Big River Industries Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Big River Industries Limited
72 609 901 377
For the year ended 30 June 2022
For the year ended 30 June 2021
2. Results for announcement to the market
Revenues from ordinary activities
Profit from ordinary activities after tax attributable to the owners of Big
River Industries Limited
Profit for the year attributable to the owners of Big River Industries
Limited
$'000
45.4% to
409,263
1070.4%
to
21,267
1070.4%
to
21,267
up
up
up
Basic earnings per share
Diluted earnings per share
Dividends
Final dividend paid on 6 October 2021
Interim dividend paid on 6 April 2022
2022
Cents
26.03
25.51
2021
Cents
2.58
2.58
Amount per
security
Cents
Franked
amount per
security
Cents
3.00
5.50
3.00
5.50
On 26 August 2022, the directors determined a fully franked dividend of 10.0 cents per fully paid ordinary share to be paid
on 6 October 2022.
Comments
The profit for the Group after providing for income tax amounted to $21,267,000 (30 June 2021: $1,817,000).
Refer to the Annual Report attached to this Appendix 4E for detailed explanation and commentary on the results.
3. Net tangible assets
Net tangible assets per ordinary security
Reporting
period
Cents
Previous
period
Cents
65.66
63.11
Big River Industries Limited
Appendix 4E
Preliminary final report
Calculated as follows:
Net assets
Intangibles
Net tangible assets
Number of ordinary shares
2022
$'000
112,420
(58,427)
53,993
Group
2021
$'000
94,691
(43,809)
50,882
82,227,610 80,625,116
4. Dividend reinvestment plans
The following dividend or distribution plans are in operation:
The dividend reinvestment plan dated 10 December 2019
http://bigriverindustries.com.au
is
in operation, which can be downloaded at
The last date(s) for receipt of election notices for the dividend or distribution plans:
7 September 2022
5. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unmodified opinion has been issued.
6. Attachments
Details of attachments (if any):
The Annual Report of Big River Industries Limited for the year ended 30 June 2022 is attached.
7. Signed
Signed ___________________________
Date: 26 August 2022
James Bindon
Managing Director and Chief Executive Officer
Sydney
Big River Industries Limited
ABN 72 609 901 377
Annual Report - 30 June 2022
Big River Industries Limited
Contents
30 June 2022
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Note 1. General information
Note 2. Significant accounting policies
Note 3. Critical accounting judgements, estimates and assumptions
Note 4. Operating segments
Note 5. Revenue
Note 6. Other income
Note 7. Expenses
Note 8. (Recovery)/Impairment of assets and restructuring costs
Note 9. Income tax
Note 10. Cash and cash equivalents
Note 11. Trade and other receivables
Note 12. Inventories
Note 13. Financial assets
Note 14. Other assets
Note 15. Non-current assets classified as held for sale
Note 16. Property, plant and equipment
Note 17. Right-of-use assets
Note 18. Intangibles
Note 19. Trade and other payables
Note 20. Borrowings
Note 21. Lease liabilities
Note 22. Provisions
Note 23. Contingent consideration
Note 24. Other liabilities
Note 25. Issued capital
Note 26. Reserves
Note 27. Retained profits
Note 28. Dividends
Note 29. Financial instruments
Note 30. Key management personnel disclosures
Note 31. Remuneration of auditors
Note 32. Contingent liabilities
Note 33. Related party transactions
Note 34. Parent entity information
Note 35. Business combinations
Note 36. Interests in subsidiaries
Note 37. Deed of cross guarantee
Note 38. Cash flow information
Note 39. Earnings per share
Note 40. Share-based payments
Note 41. Events after the reporting period
Directors' declaration
Independent auditor's report to the members of Big River Industries Limited
Shareholder information
Corporate directory
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Big River Industries Limited
Directors' report
30 June 2022
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 2022.
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
Brad Soller
Martin Monro
Appointed 10 September 2021
Appointed 10 September 2021
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
Dividends paid during the financial year were as follows:
Final dividend of 3.0 cents per fully paid ordinary share paid on 6 October 2021 (2021: 2.4
cents paid on 6 October 2020)
Interim dividend of 5.5 cents per fully paid ordinary share paid on 6 April 2022 (2021: 2.6
cents paid on 21 April 2021)
2022
$'000
Group
2021
$'000
2,419
1,499
4,520
2,018
6,939
3,517
Dividend declared
On 26 August 2022, the directors determined a fully franked dividend of 10.0 cents per fully paid ordinary share to be paid
on 6 October 2022.
Review of operations
The profit for the Group after providing for income tax amounted to $21.3 million (30 June 2021: $1.8 million).
The Group achieved revenue for the year ending 30 June 2022 of $409.3m, an increase of 45% on the previous financial
year. This reflected same store organic revenue growth of 20% as well as a 25% growth contribution from acquisitions
completed in the current year. This strong growth achievement was reflective of a solid construction sector, particularly the
detached housing market, that was still benefiting from the Homebuilder package introduced during FY2021.
EBITDA pre-significant items grew by 113% to $48m. As the same case with the revenue improvements, this growth was
achieved from a combination of strong organic growth, better operating cost leverage and excellent contribution from recent
acquisitions Revolution Wood Products and United Building Products. EBITDA pre-significant items margin grew from 8% to
11.7%.
Net Profit after tax pre significant items was $22.7 million, an increase of 191% compared to the prior reporting period.
2
Big River Industries Limited
Directors' report
30 June 2022
A summary of the Group’s results is below
Revenue
Gross profit*
Gross profit margin %
EBITDA pre significant items
Depreciation of PPE
Depreciation of Right of Use Assets
Amortisation
EBIT
Finance costs
Profit before Income tax
Income Tax (Expense)/Benefit
Profit after Income Tax before Significant Items
Significant Items (net of tax impact)
Profit after Income Tax and Significant Items
2022
$'m
409.3
110.3
26.9%
48.0
(3.3)
(7.5)
(1.4)
35.8
(3.2)
32.6
(9.9)
22.7
(1.4)
21.3
2021
$'m
281.4
70.1
25.0%
22.5
(3.0)
(5.8)
(0.6)
13.1
(1.9)
11.2
(3.4)
7.8
(6.0)
1.8
*
The Company made a change in the classification of expenses in FY2022. In FY2022, direct labour from manufacturing
operations is included in “Raw materials and consumables used” resulting in a gross margin of 26.9%, an increase of
190bps from 25.0% gross margin achieved in FY2021 on a like for like basis. FY2021 has been restated in this table to
include $9.4m of direct labour from manufacturing operations recorded in the profit or loss as an “Employee benefits
expense”. Excluding this adjustment the gross margin reported in FY2021 was 28.2%.
Significant items
The Group had the following significant items (net of taxation) during the year:
Contingent consideration fair value adjustment
Acquisition transaction costs
Non-cash share based payments charge
Impairment/(gain) of assets and restructuring costs relating to Wagga Wagga site closure
Total significant items
2022
$'m
-
(1.0)
(0.9)
0.5
(1.4)
2021
$'m
0.1
(1.0)
(0.6)
(4.5)
(6.0)
The Group separates these significant items as they are either non-cash items or one-off items that don’t impact operational
performance.
Segment performance
During the year the business re-organised into two operating segments being:
●
Panels Division – comprising of three manufacturing and five distribution sites of timber panel products in Australia and
New Zealand.
Construction division – comprising of fifteen sites which sell building, commercial and formwork products in Australia.
●
Panels
Construction
Corporate
Total
Segment Revenue
2021
$'m
2022
$'m
Segment EBITDA
2021
$'m
2022
$'m
117.1
292.2
-
54.9
226.5
-
409.3
281.4
21.4
31.9
(5.3)
48.0
10.6
16.1
(4.2)
22.5
Both Divisions achieved strong improvements on the back of both organic revenue growth and contributions from new
acquisitions (and a full 12-month contribution from the prior year acquisition of Timberwood Panels).
3
Big River Industries Limited
Directors' report
30 June 2022
Organic growth varied by division, with 14.0% achieved in the Panels division, and 23.0% organic growth from the
Construction division, which has a higher exposure to the strong detached housing market.
Cash and Debt
Cash and cash equivalents
Bank Bills
Bank overdraft and trade finance
Net Debt
Contingent consideration*
Net Debt adjusted for contingent consideration
2022
$'m
19.8
(36.0)
(5.1)
(21.3)
2021
$'m
7.8
(26.0)
(3.6)
(21.8)
(7.9)
(7.2)
(29.2)
(29.0)
*
Contingent consideration represents estimated future payments to vendors of previously completed acquisitions. These
payments are contingent on the achievement of certain financial targets of that acquired business. Refer note 23
'Contingent consideration' for further details.
The Group has a Net Debt position of $21.3m as at 30 June 2022, a reduction of $0.5m compared to the prior reporting
period. The Group remains in a strong balance sheet position with a reduction in gearing (measured as Net Debt/Net Debt
plus Equity) occurring during FY2022, closing the year at 15.8%, versus the 18.7% in the previous corresponding period.
From an operating cash flow perspective, the Group achieved a 88% EBITDA to cash conversion, which was a very strong
outcome notwithstanding the material increase in inventory to counter the supply chain disruptions occurring throughout the
year.
Material business risks
The Group has a number of business risks including work health and safety risk, operational and compliance risk, competition
risks, macroeconomic risks, financial risks, cyber security risks and environmental risks. The Group’s trading activity is
influenced by the construction cycle and underlying demand. The Board doesn’t consider any individual risk to be material
to the Group in isolation of other risks.
FY2022 included material uncertainty around global supply chains, and specifically for the Group, the importation of a range
of building products. The Group believes that FY2023 does not bring an elevated level of risk in relation to supply chain and
has observed supply chains beginning to improve as Covid-19 related constraints subside.
Covid-19 continues to potentially impact the Group’s operations and those of customers through any imposed restrictions or
lockdowns.
The Board has established a risk management policy for the management and oversight of risk and has delegated
responsibility of compliance and internal control to the Audit and Risk Committee.
Significant changes in the state of affairs
The Group completed two acquisitions during the year, Revolution Wood Products in Brisbane, and United Building Products
in Albion Park, in The Illawarra region of NSW.
On 1 October 2021, the completion of the Revolution Wood Products acquisition occurred, with a maximum consideration
price of $7.8m including $6.0 million in cash, the issue of $1.0 million in ordinary shares of Big River Industries Ltd, with the
balance payable upon achieving agreed EBITDA targets over a two year period. The acquisition contributed $12.1 million to
revenue and $0.7 million to net profit after tax of the Group for the year ended 30 June 2022.
The values identified in relation to the acquisition are final as at 30 June 2022.
On 1 November 2021, the completion of the United Building Products acquisition occurred, with a maximum consideration
price of $10.7m including inventory, and plant and equipment, and was settled through the payment of $7.5 million in cash,
the issue of $2.1 million in ordinary shares of Big River Industries Ltd, with the balance payable upon achieving agreed
EBITDA targets over a two year period. The acquisition contributed $15.5 million to revenue and $1.1 million to net profit
after tax of the Group for the year ended 30 June 2022.
4
Big River Industries Limited
Directors' report
30 June 2022
The values identified in relation to the acquisition are final as at 30 June 2022.
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 7 July 2022, Big River Group Pty Ltd, a subsidiary of Big River Industries Limited, agreed to buy the business and the
assets of F.A. Mitchell & Co Pty Ltd for the consideration of $600,000. The contract for purchase was completed on 1 August
2022.
Apart from the dividend declared as discussed above, no other matter or circumstance has arisen since 30 June 2022 that
has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's
state of affairs in future financial years.
Likely developments and expected results of operations
The building products market is closely linked to activity levels in the residential, commercial, civil and infrastructure
construction industry (comprising both new builds and additions and alterations) in Australia. The industry is cyclical and is
sensitive to a broad range of economic and other factors, including any potential impact from COVID-19.
As the COVID-19 situation remains fluid due to continuing changes in government policy and evolving business and customer
reactions thereto, as at the date these financial statements are authorised for issue, the directors of the Group consider that
the future financial effects of COVID-19 on the Group's operations and operating results cannot be reasonably estimated.
The Group has a strong balance sheet and a healthy undrawn banking facility which will continue to support the Group.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
James Bernard Bindon
Managing Director and Chief Executive Officer
James ('Jim') holds a Bachelor of Agricultural Economics (Honours) from the University
of New England and a Masters of Business Administration from the University of
Queensland. Jim is a member of the Australian Institute of Company Directors.
Jim joined Big River in January 2001 and has been Chief Executive Officer and
Managing Director since 2005. He has been a director of Big River Group Pty Limited
since July 2005 and a director of the Company since February 2016. Prior to his current
role as Chief Executive Officer and Managing Director, Jim was the Chief Financial
Officer and Company Secretary from 2001 to 2005. Prior to working at Big River, Jim
held the position of Business Manager of Sugar and Horticulture at Incitec, where he
was responsible for segment profitability, strategy and marketing.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
533,333 ordinary shares (indirectly)
Interests in shares:
688,315 performance rights (directly)
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Malcolm Geoffrey Jackman
Independent Non-Executive Chairman
Malcolm has a Bachelor of Science in Pure Mathematics and a Bachelor of Commerce
in Accounting from Auckland University. He is a fellow of the Australian Institute of
Directors and a recipient of the Centenary of Federation Medal.
Malcolm has been an independent Non-Executive Director of the Company since
February 2016 and became Chairman on 31 July 2019. Malcolm has also been a
director of Big River Group Pty Limited since February 2016. Malcolm is a member of
the Anacacia Capital Business Advisory Council.
Non-Executive Director of Force Fire Pty Limited (non-listed)
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in rights:
Chair of the Board
124,830 ordinary shares (indirectly)
None
5
Big River Industries Limited
Directors' report
30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in rights:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
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
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
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 (ASX: ABB), 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 rights:
Chair of the Nomination and Remuneration Committee
32,252 ordinary shares (indirectly)
None
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
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.
Non-Executive Director of BSA Limited (ASX: BSA) and Non-Executive Director of
Wingara AG Limited (ASX: WNR)
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in rights:
Member of the Audit and Risk Committee
None
None
Experience and expertise:
Name:
Title:
Qualifications:
Brad Soller
Non-Executive Director (appointed 10 September 2021)
Brad is a Chartered Accountant and has a Master of Commerce, a Bachelor of
Accounting and a Bachelor of Commerce from the University of Witwatersrand.
Brad is a very experienced senior financial executive and previously held the roles of
Chief Financial Officer at Metcash, David Jones and Lendlease Group.
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in rights:
Chair of the Audit and Risk Committee
12,500 ordinary shares (directly)
None
6
Big River Industries Limited
Directors' report
30 June 2022
Name:
Title:
Qualifications:
Experience and expertise:
Martin Monro
Non-Executive Director (appointed 10 September 2021)
Martin has a BA with a double major in Psychology from Flinders University and post-
graduate qualifications in Human Resources Management from Charles Sturt
Univeristy. He is a graduate of the London Business School Accelerated Development
Programme, a Fellow of the Australian Institute of Company Directors and a Fellow of
the Australian Institute of Building.
Martin was formerly the Chief Executive Officer and Managing Director of Watpac
Limited from August 2012 until his retirement in an executive capacity in June 2019.
Martin has more than 30 years’ experience in the Australian and international
construction sectors, with a proven track record in prudent financial management,
safety leadership and successful expansion into new markets. Martin remains a Non-
Executive Director of Watpac Limited. Since June 2020 Martin has been a Non-
Executive Director of Fleetwood Limited and Chair of its Risk Committee. He is also a
Specialist Workplace Relations Advisor to the Board of the Australian Constructors
Association where he was a Director from 2012 until 2019. Martin is currently Chair of
the Moits Advisory Board and the Advisory Board of Pannell Enoteca. He is the
immediate past National Vice President of the Australian Industry Group and an
Independent Government-appointed member of the Royal Melbourne Showgrounds
Unincorporated Joint Venture Board from 2019 to 2022. Martin was also a Director of
the construction industry suicide prevention charity, Mates in Construction, a voluntary
position he held from 2017 to 2021.
Fleetwood Limited (ASX: FWD)
Member of the Audit and Risk Committee and member of the Nomination and
Remuneration Committee
25,000 ordinary shares (directly)
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in rights:
'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 'interests in rights' are as at the date of this report.
Company Secretary
John O'Connor (BComm, ACMA, GAICD)
John O'Connor was appointed to the position of Company Secretary on 22 August 2022. John has a BComm, is a Chartered
Management Accountant and a Graduate of the Australian Institute of Company Directors. He has over 30 years' experience
in senior finance roles.
Stephen Thomas Parks (BCom, FIPA)
Steve was Company Secretary during the year and resigned effective 30 June 2022.
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.
7
Big River Industries Limited
Directors' report
30 June 2022
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 2022, and the number of meetings attended by each director were:
J Bindon
M Kaplan
M Jackman
V Papachristos
B York
B Soller
M Monro
Attended
Full Board
Held
Nomination and
Remuneration Committee
Held
Attended
Audit and Risk Committee
Held
Attended
16
15
16
16
16
12
12
16
16
16
16
16
12
12
4
4
4
4
4
3
3
4
4
4
4
4
3
3
4
4
4
4
4
3
3
4
4
4
4
4
3
3
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
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:
●
●
John O'Connor - Chief Financial Officer and Company Secretary (appointed effective 22 August 2022)*
Stephen Parks - Chief Financial Officer and Company Secretary (resigned effective 30 June 2022)
*
Appointment was post year end. As a result, information below relating to remuneration for the year will exclude details
relating to John O'Connor with the exception of the service agreements section which details his service agreement.
During the FY2022 year, the business re-organised into two operating segments. On that basis it was determined that John
Lorente (Executive General Manager - Construction Division) is no longer a KMP for the Group effective from 1 July 2021.
Accordingly, John Lorente's remuneration disclosures only appear for the prior year.
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.
8
Big River Industries Limited
Directors' report
30 June 2022
The Nomination and Remuneration Committee is responsible for:
●
●
●
●
determining and reviewing remuneration arrangements for its directors and executives;
the operation of incentive plans, including equity-based remuneration plans for senior executives;
reviewing Board and senior executive succession plans; and
recommending the appointment of any new directors.
The quality of the directors and executives is a major factor in the overall performance of the Group. The remuneration
philosophy is to attract, motivate and retain high performance and high quality personnel.
The Nomination and Remuneration Committee has structured an executive remuneration framework that is market
competitive and complementary to achievement of the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it
should seek to enhance shareholders' interests by:
●
having economic profit as a core component;
●
focusing on sustained growth in shareholder value and delivering constant or increasing return on assets as well as
focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder value; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-
executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined
independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman
is not present at any discussions relating to the determination of his own remuneration. Non-executive directors do not
receive share options or other incentives.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. Unless otherwise determined by a resolution of shareholders, the maximum aggregate remuneration payable by
the Company to all non-executive directors of the Company for their services as directors, including their services on a Board
Committee or Sub-Committee and including superannuation is limited to $500,000 per annum (in total).
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework currently has three components:
●
●
●
fixed base salary, including superannuation and non-monetary benefits;
short-term performance incentives; and
long-term performance incentives.
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.
9
Big River Industries Limited
Directors' report
30 June 2022
The short-term incentive ('STI') program is designed to align the targets of the business with the performance hurdles of
executives. STI payments granted to executives are at the discretion of the Board and are based on the achievement of
financial hurdles, principally relating to earnings before interest, tax, depreciation and amortisation ('EBITDA') performance,
and key performance indicators ('KPI's') being achieved. KPI's include profit contribution, cash management, customer
satisfaction, safety performance, leadership contribution and product management.
The STI's are paid in cash following the end of the financial year and approval from the Nomination and Remuneration
Committee. The Nomination and Remuneration Committee retains the discretion to withdraw or amend the STI at any time.
The long-term incentive program ('LTI') is designed to create an alignment between shareholder benefit and the remuneration
of selected executives through the issue of Performance Rights. The number of Performance Rights vesting will be
determined by reference to the compound annual growth rate ('CAGR') in Earnings Per Share ('EPS') over the vesting period
and ranges from nil for less than 3% CAGR in EPS to 100% for greater than 10% CAGR in EPS, subject to an overriding
discretion held by the Board. The Board considers CAGR in EPS to be an appropriate performance measure as it aligns with
the Group’s remuneration policy of creating value and is within the scope of influence of the selected executives.
Group performance and link to remuneration
Remuneration for the senior executives is directly linked to the performance of the Group. A portion of their STI is dependent
on 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 2022, the Group did not engage remuneration consultants.
Voting and comments made at the Company's 2021 Annual General Meeting ('AGM')
At the 27 October 2021 AGM, 99.87% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2021. 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
Cash salary
and fees
$
Cash
Non-
bonus monetary
$
$
Super-
annuation
$
Leave
benefits
$
Share-
based
payments
Perform-
ance
rights**
$
Total
$
-
109,110
77,286
63,659
60,629
49,930
-
-
-
-
-
-
-
-
-
-
-
-
-
10,911
7,729
6,366
6,063
4,993
-
-
-
-
-
-
-
-
-
-
-
-
-
120,021
85,015
70,025
66,692
54,923
474,616
175,000
-
25,962
18,152
360,209 1,053,939
350,919
1,186,149
41,500
216,500
-
-
25,962
87,986
119,906
138,058
155,615
693,902
515,824 2,144,517
2022
Non-Executive Directors:
M Kaplan*
M Jackman
V Papachristos
B York
B Soller
M Monro
Executive Directors:
J Bindon
Other Key Management
Personnel:
S Parks
10
Big River Industries Limited
Directors' report
30 June 2022
*
**
M Kaplan waived his director's fees (including any committee fee to which he is entitled) during the financial year ended
30 June 2022.
The value of the performance rights was determined as the fair 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 30 June
2022 no performance rights have vested and the actual value is nil.
'Long-term benefits' represent payment of accrued leave entitlements on termination, and movements in accrued long service
and annual leave entitlements.
Total remuneration paid to non-executive directors for the year ending 30 June 2022 amounted to $396,676 (30 June 2021:
$240,000) which is 79.3% (30 June 2021: 48.0%) of the non-executive directors aggregate.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Cash salary
and fees
$
Cash
Non-
bonus monetary
$
$
Super-
annuation
$
Leave
benefits
$
Share-
based
payments
Perform-
ance
rights**
$
Total
$
-
91,324
63,927
63,927
-
-
-
-
-
-
-
-
-
8,676
6,073
6,073
-
-
-
-
-
-
-
-
-
100,000
70,000
70,000
443,369
199,750
-
25,000
16,855
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
35,214
598,244
117,785
117,785
596,493
504,677 2,388,818
2021
Non-Executive Directors:
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 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.
*** Ceased as a key management person on 1 July 2021.
'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
2021
2022
2022
At risk - STI
2021
2022
At risk - LTI
2021
49%
51%
17%
21%
34%
28%
72%
-
62%
62%
6%
-
18%
18%
22%
-
20%
20%
11
Big River Industries Limited
Directors' report
30 June 2022
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
J Bindon
Other Key Management
Personnel:
S Parks
Maximum STI
$
Actual STI
$
Cash bonus paid/payable
2021
2022
Cash bonus forfeited
2021
2022
227,250
175,000
77%
94%
23%
6%
125,603
41,500
33%
91%
67%
9%
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 $505,000 per annum including statutory
superannuation contributions. Either Jim or the Company may terminate the
employment contract by giving six 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.
John O'Connor
Chief Financial Officer and Company Secretary (appointed effective 22 August 2022)
22 August 2022
No fixed term
Total fixed employment cost ('TFEC') of $390,000 per annum including statutory
superannuation contributions. John may terminate his employment contract by giving
three months' written notice to the Company and the Company may terminate the
employment contract by giving three months' written notice to John. A Short Term
Incentive ('STI') is payable up to 36% 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 (resigned effective 30 June 2022)
July 2008
No fixed term
Total fixed employment cost ('TFEC') of $370,000 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 36% 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 2022.
12
Big River Industries Limited
Directors' report
30 June 2022
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
Number of
rights
granted Grant date
Measurement period* Expiry date**
154,024 23 November 2018
307,147 28 November 2019
222,787 1 December 2020
158,381 17 December 2021
65,745 23 November 2018
134,435 28 November 2019
97,511 1 December 2020
66,205 17 December 2021
30 June 2021
30 June 2022
30 June 2023
30 June 2024
30 June 2021
30 June 2022
30 June 2023
30 June 2024
23 November 2023
28 November 2024
1 December 2025
17 December 2026
23 November 2023
28 November 2024
1 December 2025
17 December 2026
Fair value
per right
at grant date
$1.611
$1.076
$1.312
$1.968
$1.611
$1.076
$1.312
$1.968
*
**
Measurement period represents the financial year ended date for the measurement of vesting conditions for
performance rights. Performance rights vest following confirmation of the achievement of vesting conditions in August
following the end of the measurement period.
The expiry date represents the last possible date that vested performance rights can be converted to shares in the
Company if not exercised prior.
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 2022 are set out below:
Name
J Bindon
S Parks
Number of
rights
granted
during the
year
2022
Number of
rights
granted
during the
year
2021
Number of
rights
vested
during the
year
2022
Number of
rights
vested
during the
year
2021
158,381
66,205
222,787
97,511
-
-
-
-
Additional information
The earnings of the Group for the five years to 30 June 2022 are summarised below:
Sales revenue
EBITDA (pre-significant items)
Profit/(loss) after income tax (pre-significant
items)
*
Years 2019 and 2018 are pre-AASB 16.
2022
$'000
2021
$'000
2020
$'000
2019*
$'000
2018*
$'000
409,263
48,040
281,382
22,548
248,828
17,289
217,689
9,820
210,756
10,981
21,267
1,817
4,660
4,358
5,389
13
Big River Industries Limited
Directors' report
30 June 2022
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2022
2021
2020
2019
2018
Earnings per share pre-significant items (cents
per share)
26.03
11.15
7.49
8.18
10.19
The Board considers the achievement of EPS growth as aligned and a key factor to the creation of shareholder value and
this reinforces the remuneration principles set out in this Remuneration report.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Ordinary shares
M Kaplan
M Jackman
V Papachristos
B York
B Soller
M Monro
J Bindon
S Parks
Balance at
the start of
Received
as part of
the year remuneration
Additions
Disposals/
other
-
120,166
31,047
-
-
-
533,333
320,000
1,004,546
-
-
-
-
-
-
-
-
-
-
4,664
1,205
-
12,500
25,000
-
-
43,369
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year
-
124,830
32,252
-
12,500
25,000
533,333
320,000
1,047,915
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
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
683,958
297,691
981,649
158,381
66,205
224,586
-
-
-
(154,024)
(65,745)
(219,769)
688,315
298,151
986,466
This concludes the remuneration report, which has been audited.
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
28 November 2019
1 December 2020
17 December 2021*
Expiry date
28 November 2024
1 December 2025
17 December 2026
Number
of rights
677,590
541,662
473,429
1,692,681
*
During the year ended 30 June 2022, the Company issued 473,429 Performance rights to senior employees of the
Group under the Group's performance rights plan.
14
Big River Industries Limited
Directors' report
30 June 2022
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 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 2022 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 31 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 31 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.
●
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.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
15
Big River Industries Limited
Directors' report
30 June 2022
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
26 August 2022
Sydney
___________________________
James Bindon
Managing Director and Chief Executive Officer
16
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
25 August 2022
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 2022, 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
Big River Industries Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Note
2022
$'000
Group
2021
$'000
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
Recovery/(Impairment) of assets and restructuring costs
Finance costs
Profit before income tax (expense)/benefit
Income tax (expense)/benefit
Profit after income tax (expense)/benefit for the year attributable to the owners
of Big River Industries Limited
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
5
6
7
7
11
8
7
9
27
409,263
281,382
62
234
(299,247)
(6,993)
(38,785)
(3,944)
(10,600)
(1,020)
(12,240)
(2,625)
709
(3,224)
(201,919)
(6,459)
(38,100)
(4,635)
(7,340)
(1,348)
(9,415)
(1,119)
(8,902)
(1,933)
31,356
446
(10,089)
1,371
21,267
1,817
(764)
(764)
(69)
(69)
20,503
1,748
Cents
Cents
Basic earnings per share
Diluted earnings per share
39
39
26.03
25.51
2.58
2.58
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
18
Big River Industries Limited
Consolidated statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
Other assets
Non-current assets classified as held for sale
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 liabilities
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
Note
2022
$'000
Group
2021
$'000
10
11
12
13
14
15
16
17
18
9
19
20
21
9
22
23
24
20
21
22
23
19,796
63,414
72,815
113
499
156,637
2,701
159,338
21,944
21,511
58,427
21
101,903
7,851
53,965
54,144
-
1,585
117,545
-
117,545
20,830
22,510
43,809
5,076
92,225
261,241
209,770
61,881
2,538
7,794
5,290
6,938
3,513
2,324
90,278
36,000
17,432
756
4,355
58,543
41,227
1,404
7,150
998
9,220
1,970
2,324
64,293
26,000
18,636
960
5,190
50,786
148,821
115,079
112,420
94,691
25
26
27
96,665
331
15,424
93,409
186
1,096
112,420
94,691
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
19
Big River Industries Limited
Consolidated statement of changes in equity
For the year ended 30 June 2022
Group
Foreign
currency
translation
reserve
$'000
Share-based
payments
reserve
$'000
Issued
capital
$'000
Balance at 1 July 2020
69,286
(350)
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 25)
Share-based payments (note 40)
Dividends paid (note 28)
-
-
-
24,123
-
-
-
(69)
(69)
-
-
-
Balance at 30 June 2021
93,409
(419)
Retained
profits
$'000
Total equity
$'000
2,796
71,732
1,817
1,817
-
(69)
1,817
1,748
-
-
-
-
-
605
-
605
-
-
(3,517)
24,123
605
(3,517)
1,096
94,691
Group
Foreign
currency
translation
reserve
$'000
Share-based
payments
reserve
$'000
Issued
capital
$'000
Retained
profits
$'000
Total equity
$'000
Balance at 1 July 2021
93,409
(419)
605
1,096
94,691
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 25)
Share-based payments (note 40)
Dividends paid (note 28)
-
-
-
-
(764)
(764)
-
-
-
21,267
21,267
-
(764)
21,267
20,503
3,256
-
-
-
-
-
-
909
-
-
-
(6,939)
3,256
909
(6,939)
Balance at 30 June 2022
96,665
(1,183)
1,514
15,424
112,420
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
20
Big River Industries Limited
Consolidated statement of cash flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grant
Interest and other finance costs paid
Income taxes paid
Note
2022
$'000
Group
2021
$'000
434,762
(397,294)
305,582
(290,974)
37,468
5,000
(2,446)
(2,862)
14,608
4,000
(1,719)
(2,742)
Net cash from operating activities
38
37,160
14,147
Cash flows from investing activities
Payment for purchase of businesses, net of cash acquired
Payments for deferred consideration
Payments for investments
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/(used in) 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
35
23
13
16
18
25
28
(13,455)
(2,022)
(113)
(6,065)
(164)
154
(21,023)
(1,254)
-
(1,807)
(385)
143
(21,665)
(24,326)
-
(10)
10,000
(7,850)
(6,700)
20,410
(1,152)
150
(5,275)
(3,409)
(4,560)
10,724
10,935
6,447
(124)
545
5,897
5
Cash and cash equivalents at the end of the financial year
10
17,258
6,447
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
21
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
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 26 August 2022. 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.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 34.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Big River Industries Limited
as at 30 June 2022 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.
22
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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 Company's functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into the functional currency using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
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.
23
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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.
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.
24
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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.
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal
groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of
disposal of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss
previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as
held for sale are presented separately on the face of the statement of financial position, in current liabilities.
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.
25
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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.
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.
26
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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.
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.
27
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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 rights over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
28
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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.
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.
29
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
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.
Comparatives
Certain comparatives have been reclassified to align with current year disclosure. There has been no change to net assets,
equity or profit for the year of any reclassification.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
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 2022. The Group has not yet
assessed the impact of these new or amended Accounting Standards and Interpretations.
30
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
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.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the Group's operations; comparison of terms and conditions to
prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs
and disruption to replace the asset. The Group reassesses whether it is reasonably certain to exercise an extension option,
or not exercise a termination option, if there is a significant event or significant change in circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a
similar value to the right-of-use asset, with similar terms, security and economic environment.
Note 4. Operating segments
Identification of reportable operating segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors (the chief operating decision maker) in assessing performance and in determining the allocation of
resources. Discrete financial information about these operating segments is reported on at least a monthly basis.
31
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 4. Operating segments (continued)
The information reported to the Board of Directors is aggregated based on product types and nature of the underlying
activities which the Group operates. The Group’s reportable segments are as follows:
Panels Division
Distribution
Comprised of three manufacturing and five distribution sites of timber panel products in
Australia and New Zealand
Comprised of fifteen sites which sell building, commercial and formwork products in
Australia
Sales between segments are based on similar terms and conditions to those in place with third party customers and are
eliminated from the results below.
The Group considers Revenue and EBITDA as its key segment measures.
EBITDA is measured pre significant items which are presented separately due to their nature, size and expected infrequent
occurrence and therefore do not reflect the underlying trading of the Group.
Operating segment information
Group - 2022
Revenue
Sales to external customers
Total revenue
EBITDA (pre significant items)
Depreciation and amortisation
Finance costs
Significant items
Profit before income tax expense
Income tax expense
Profit after income tax expense
Group - 2021
Revenue
Sales to external customers
Total revenue
EBITDA (pre significant items)
Depreciation and amortisation
Finance costs
Significant items
Profit before income tax benefit
Income tax benefit
Profit after income tax benefit
Corporate
Panels Construction (unallocated)
$'000
$'000
$'000
Total
$'000
117,100
117,100
292,163
292,163
-
-
409,263
409,263
21,400
31,900
(5,260)
Corporate
Panels Construction (unallocated)
$'000
$'000
$'000
48,040
(12,240)
(3,224)
(1,220)
31,356
(10,089)
21,267
Total
$'000
54,900
54,900
226,482
226,482
-
-
281,382
281,382
10,600
16,100
(4,152)
22,548
(9,415)
(1,933)
(10,754)
446
1,371
1,817
32
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 4. Operating segments (continued)
Geographical information
Australia
New Zealand
Revenue from external
customers
2021
$'000
2022
$'000
Geographical non-current
assets
2021
$'000
2022
$'000
376,329
32,934
254,349
27,033
86,361
18,222
66,415
20,290
409,263
281,382
104,583
86,705
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 (92%) and b) New Zealand (8%). There is no single customer with 10% or
more of revenue.
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
Sale of goods
2022
$'000
Group
2021
$'000
409,263
281,382
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
Fair value adjustment of contingent consideration*
Other income
2022
$'000
62
-
62
Group
2021
$'000
134
100
234
*
Fair value adjustment of contingent consideration represents a portion of acquisition earn out targets not met and
therefore reducing the amounts payable to vendors. There were no adjustments in the current year.
33
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
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
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
Expenses associated with business combinations
Transaction costs
2022
$'000
Group
2021
$'000
299,247
201,919
163
3,149
7,490
167
2,880
5,788
10,802
8,835
1,116
286
36
1,438
312
246
22
580
12,240
9,415
1,661
784
779
1,047
672
214
3,224
1,933
-
5
3,157
2,454
909
605
838
831
The Company made a change in the classification of expenses in FY2022. In FY2022, direct labour from manufacturing
operations is included in “Raw materials and consumables used” resulting in a gross margin of 26.9%, an increase of 190bps
from 25.0% gross margin achieved in FY2021 on a like for like basis. FY2021 has not been restated in this table to include
$9.4m of direct labour from manufacturing operations recorded in the profit or loss as an “Employee benefits expense”.
34
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 8. (Recovery)/Impairment of assets and restructuring costs
Buildings (note 16)
Plant and equipment (note 16)
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
2022
$'000
(316)
-
(338)
(55)
-
(709)
-
(709)
Group
2021
$'000
1,842
10,432
1,738
2,096
470
16,578
(7,676)
8,902
213
(4,421)
(496)
4,481
2022
Following completion of the closure of the Wagga Wagga NSW site, subject to the sale of the land and buildings, which is
expected to be completed in FY2023, the Company re-assessed its provisions recognised for the consolidation project. The
Company reversed a small portion of the impairment charges and restructuring costs in the amount of $0.7 million.
2021
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.
Amount of $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.
35
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 9. Income tax
Income tax expense/(benefit)
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
2022
$'000
7,128
2,987
(26)
Group
2021
$'000
2,320
(4,248)
557
Aggregate income tax expense/(benefit)
10,089
(1,371)
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)
Net deferred tax balance
Deferred tax asset (refer breakdown below)
Deferred tax liability (refer breakdown below)
Net deferred tax asset (as per statement of financial position)
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
36
31,356
9,407
273
-
-
541
10,221
(26)
(106)
446
134
181
(30)
(2,303)
141
(1,877)
557
(51)
10,089
(1,371)
2022
$'000
Group
2021
$'000
11,656
(11,635)
13,987
(8,911)
21
5,076
2022
$'000
Group
2021
$'000
1,038
-
2,339
6,705
318
20
-
1,236
646
2,660
1,790
6,914
267
496
802
412
11,656
13,987
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 9. Income tax (continued)
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Property, plant and equipment
Right-of-use assets
Customer relationships
Brand
Present value on contingent consideration
Deferred tax liability
Provision for income tax
Provision for income tax
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 20)
Balance as per statement of cash flows
2022
$'000
Group
2021
$'000
1,290
6,342
2,847
849
307
-
6,542
1,223
780
366
11,635
8,911
2022
$'000
Group
2021
$'000
5,290
998
2022
$'000
Group
2021
$'000
3,087
16,709
3,342
4,509
19,796
7,851
19,796
(2,538)
7,851
(1,404)
17,258
6,447
37
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 11. Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Government grant
2022
$'000
63,671
(3,542)
60,129
2,285
1,000
Group
2021
$'000
47,243
(2,154)
45,089
2,876
6,000
63,414
53,965
Allowance for expected credit losses
The Group has recognised a loss of $2,625,000 in profit or loss in respect of the expected credit losses for the year ended
30 June 2022 (30 June 2021: loss of $1,119,000).
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
%
2022
%
Carrying amount
2021
$'000
2022
$'000
Allowance for expected
credit losses
2021
$'000
2022
$'000
0.18%
5.76%
84.80%
49.50%
0.60%
1.00%
20.00%
58.76%
41,522
20,794
1,329
2,311
29,832
16,553
993
2,741
75
1,197
1,126
1,144
179
166
199
1,610
65,956
50,119
3,542
2,154
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, and is taking into consideration when determining expected credit loss rate.
Note 12. Inventories
Current assets
Raw materials and work in progress - at cost
Finished goods - at cost
Less: Provision for stock obsolescence
2022
$'000
Group
2021
$'000
2,533
73,088
(2,806)
3,177
51,476
(509)
72,815
54,144
38
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 13. Financial assets
Current assets
TradeNET Solutions Ltd
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous
financial year are set out below:
Opening fair value
Additions
Closing fair value
Note 14. Other assets
Current assets
Prepayments
Other deposits
Note 15. Non-current assets classified as held for sale
2022
$'000
113
-
113
113
2022
$'000
363
136
499
2022
$'000
Group
2021
$'000
-
-
-
-
Group
2021
$'000
1,449
136
1,585
Group
2021
$'000
Current assets
Buildings
2,701
-
The Company has entered into a sale agreement for the land and buildings at its Wagga site in connection with the
consolidation project described in note 8. The Company expects the sale to be completed in FY2023.
39
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 16. 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
2022
$'000
856
800
(66)
734
40,853
(20,499)
20,354
Group
2021
$'000
856
4,227
(934)
3,293
24,198
(7,517)
16,681
21,944
20,830
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 2020
Additions
Additions through business combinations (note
35)
Disposals
Exchange differences
Impairment of assets
Transfers in/(out)
Depreciation expense
Balance at 30 June 2021
Additions
Additions through business combinations (note
35)
Classified as held for sale (note 15)
Disposals
Exchange differences
Recovery of assets
Transfers in/(out)
Depreciation expense
Buildings
$'000
Plant and
equipment
$'000
Plant and
equipment
under
lease
$'000
5,286
16
-
-
-
(1,842)
-
(167)
3,293
-
-
(2,701)
(11)
-
316
-
(163)
19,280
1,075
6,517
(9)
(3)
(10,432)
200
(2,396)
14,232
5,104
934
-
(141)
(26)
-
239
(2,565)
2,417
716
-
-
-
-
(200)
(484)
2,449
961
-
-
(10)
-
-
(239)
(584)
Freehold
land
$'000
856
-
-
-
-
-
-
-
856
-
-
-
-
-
-
-
-
Total
$'000
27,839
1,807
6,517
(9)
(3)
(12,274)
-
(3,047)
20,830
6,065
934
(2,701)
(162)
(26)
316
-
(3,312)
Balance at 30 June 2022
856
734
17,777
2,577
21,944
40
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 17. Right-of-use assets
Non-current assets
Buildings - right-of-use
Less: Accumulated depreciation
2022
$'000
Group
2021
$'000
37,021
(15,510)
31,752
(9,242)
21,511
22,510
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.
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 2020
Additions
Additions through business combinations (note 35)
Lease adjustments
Exchange differences
Depreciation expense
Balance at 30 June 2021
Additions
Additions through business combinations (note 35)
Exchange differences
Depreciation expense
Balance at 30 June 2022
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 16 for plant and equipment under lease;
note 21 for lease liabilities and maturity analysis at 30 June 2022; and
consolidated statement of cash flows for repayment of lease liabilities.
Buildings -
right-of-use
$'000
18,460
4,216
6,207
(554)
(31)
(5,788)
22,510
154
6,507
(170)
(7,490)
21,511
41
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 18. Intangibles
Non-current assets
Goodwill
Customer relationships
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation
Product development - at cost
Less: Accumulated amortisation
Brand name - at cost
2022
$'000
Group
2021
$'000
44,497
35,351
13,237
(3,797)
9,440
2,082
(600)
1,482
191
(94)
97
6,241
(2,120)
4,121
1,918
(314)
1,604
191
(58)
133
2,911
2,600
58,427
43,809
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Customer
relationships
$'000
Product
Software development
$'000
$'000
Group
Balance at 1 July 2020
Additions
Additions through business
combinations (note 35)
Exchange differences
Amortisation expense
Balance at 30 June 2021
Additions
Additions through business
combinations (note 35)
Exchange differences
Amortisation expense
Goodwill
$'000
27,058
-
8,339
(46)
-
35,351
-
9,510
(364)
-
898
-
3,538
(3)
(312)
4,121
-
6,447
(12)
(1,116)
1,471
379
-
-
(246)
1,604
164
-
-
(286)
Balance at 30 June 2022
44,497
9,440
1,482
Brand
name
$'000
-
-
2,600
-
-
2,600
-
311
-
-
Total
$'000
29,576
385
14,477
(49)
(580)
43,809
164
16,268
(376)
(1,438)
2,911
58,427
149
6
-
-
(22)
133
-
-
-
(36)
97
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.
Goodwill acquired through business combinations is allocated to the lowest level within the entity at which the goodwill is
monitored, being the two cash-generating units (or ‘CGU’s) – Panels and Construction Divisions.
42
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 18. Intangibles (continued)
Allocation to CGU’s
The carrying amount of goodwill and intangible assets are allocated to the Group’s CGUs as follows:
Cash generating units
Panels
Construction
Total
2022
$'000
Goodwill
2021
$'000
17,355
27,142
13,787
21,564
2022
$'000
1,135
1,776
Brand name
2021
$'000
1,014
1,586
44,497
35,351
2,911
2,600
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 FY2023 financial year as reviewed and approved by the Board.
In preparing the FY2023 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 four years. The value-in-use calculations have
been prepared using a compound revenue growth rate of 2% (30 June 2021: 2%) and terminal growth rate of 2% (30 June
2021: 2%). The post-tax discount rate applied to cash flow projections was 10% (30 June 2021: 10%) which is derived from
the Group’s weighted average cost of capital, adjusted for varying risk profiles, where appropriate. The two CGU's have been
assessed with the same weighted average cost of capital as they have similar economic and risk profiles.
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, including
reducing the growth rate for the projected cash flow period to 0% and increasing the post-tax discount rate to 12% to
determine their impact on headroom. Management has not identified any reasonable change in assumptions that would lead
to an impairment charge for either CGU.
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 2022.
Note 19. Trade and other payables
Current liabilities
Trade payables
Goods and services tax payable
Other payables and accrued expenses
Refer to note 29 for further information on financial instruments.
2022
$'000
Group
2021
$'000
46,053
1,565
14,263
33,753
616
6,858
61,881
41,227
43
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 20. Borrowings
Current liabilities
Bank overdraft and trade finance
Non-current liabilities
Bank bills
Refer to note 29 for further information on financial instruments.
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 21. 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
44
2022
$'000
Group
2021
$'000
2,538
1,404
36,000
26,000
2022
$'000
18,131
46,000
3,900
68,031
2,538
36,000
2,465
41,003
15,593
10,000
1,435
27,028
Group
2021
$'000
18,225
36,000
3,900
58,125
1,404
26,000
2,247
29,651
16,821
10,000
1,653
28,474
2022
$'000
Group
2021
$'000
843
6,951
676
6,474
7,794
7,150
1,622
15,810
1,571
17,065
17,432
18,636
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 21. Lease liabilities (continued)
The following table details the Group's remaining contractual maturity, both current and non-current, for its lease liabilities:
Between 1
and
2 years
$'000
Between 2
and
3 years
$'000
Between 3
and
4 years
$'000
Between 4
and
5 years
$'000
1 year
or less
$'000
Over
Remaining
contractual
5 years maturities
$'000
$'000
2022
Lease liability - finance lease
Lease liability - right-of-use
lease
2021
Lease liability - finance lease
Lease liability - right-of-use
lease
931
794
542
312
63
-
2,642
7,573
8,504
5,483
6,277
4,019
4,561
3,562
3,874
2,060
2,123
1,701
1,701
24,398
27,040
758
739
586
334
-
-
2,417
7,139
7,897
6,449
7,188
4,308
4,894
3,134
3,468
2,709
2,709
1,609
1,609
25,348
27,765
The cash flows in the maturity analysis above include interest and are not expected to occur significantly earlier than
contractually disclosed.
Note 22. Provisions
Current liabilities
Annual leave
Long service leave
Redundancy
Rehabilitation
Non-current liabilities
Long service leave
Lease make good
2022
$'000
3,548
3,325
-
65
Group
2021
$'000
2,598
2,295
2,674
1,653
6,938
9,220
306
450
756
660
300
960
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.
45
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 22. 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 - 2022
Carrying amount at the start of the year
Additions through business combinations (note 35)
Amounts used
Unused amounts reversed
Carrying amount at the end of the year
Note 23. Contingent consideration
Current liabilities
Contingent consideration
Non-current liabilities
Contingent consideration
Lease
Redundancy Rehabilitation make good
$'000
$'000
$'000
2,674
-
(2,615)
(59)
1,653
-
(1,203)
(385)
-
65
300
150
-
-
450
2022
$'000
Group
2021
$'000
3,513
1,970
4,355
5,190
7,160
1,920
-
778
(2,022)
32
3,654
4,681
(100)
214
(1,254)
(35)
7,868
7,160
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 35)
Reassessment of contingent consideration
Unwind of present value interest
Payments made during the year
Exchange differences
Closing balance
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 35 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
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 24. Other liabilities
Current liabilities
Deferred revenue
2022
$'000
Group
2021
$'000
2,324
2,324
Deferred revenue related to the portion of government grant that will be recognised over the life of the associated assets to
be acquired. As at 30 June 2022, no new assets at Grafton have been commissioned.
Note 25. Issued capital
2022
Shares
2021
Shares
2022
$'000
Group
2021
$'000
Ordinary shares - fully paid
82,227,610 80,625,116
96,665
93,409
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
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 2020
6 October 2020
15 December 2020
12 March 2021
62,468,912
8,313
10,600,000
4,518,519
29 March 2021
21 April 2021
2,962,963
66,409
Balance
Issue of shares on completion of Revolution Wood
Panels
Issue of shares from dividend reinvestment plan
Issue of shares on completion of United Building
Products
Issue of shares from dividend reinvestment plan
Transaction costs arising on share issue, net of tax
30 June 2021
80,625,116
1 October 2021
6 October 2021
2 November 2021
6 April 2022
496,066
76,029
993,984
36,415
Balance
30 June 2022
82,227,610
$1.44
$1.35
$1.35
$1.50
$1.45
$2.09
$2.03
$2.13
$2.32
69,287
12
14,310
6,100
4,444
96
(840)
93,409
1,037
154
2,117
85
(137)
96,665
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.
47
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 25. 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 2021 Annual Report.
Note 26. Reserves
Foreign currency translation reserve
Share-based payments reserve
2022
$'000
(1,183)
1,514
331
Group
2021
$'000
(419)
605
186
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 27. Retained profits
Retained profits at the beginning of the financial year
Profit after income tax (expense)/benefit for the year
Dividends paid (note 27)
2022
$'000
1,096
21,267
(6,939)
Group
2021
$'000
2,796
1,817
(3,517)
Retained profits at the end of the financial year
15,424
1,096
Note 28. Dividends
Dividends paid
Dividends paid during the financial year were as follows:
Final dividend of 3.0 cents per fully paid ordinary share paid on 6 October 2021 (2021: 2.4
cents paid on 6 October 2020)
Interim dividend of 5.5 cents per fully paid ordinary share paid on 6 April 2022 (2021: 2.6
cents paid on 21 April 2021)
48
2022
$'000
Group
2021
$'000
2,419
1,499
4,520
2,018
6,939
3,517
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 28. Dividends (continued)
Dividend declared
On 26 August 2022, the directors determined a fully franked dividend of 10.0 cents per fully paid ordinary share to be paid
on 6 October 2022.
Franking credits
2022
$'000
Group
2021
$'000
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will arise from the payment of the amount of the provision for income
tax at the reporting date based on a tax rate of 30%
19,838
21,363
4,171
196
Franking credits available for subsequent financial years based on a tax rate of 30%
24,009
21,559
Note 29. 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's operations in NZ give rise to exposure to changes in foreign currency rates, primarily the NZD. The Group's
currency risk exposure is limited predominantly to consolidated Australian dollar translation risk as the majority of transactions
by the New Zealand operations are transacted by the same functional currency of the relevant transaction.
Where the Group purchases raw materials and consumables in foreign currencies such as USD or Euro, the Group will use
forward rate foreign exchange contracts to hedge exposure.
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. The Group uses interest rate swaps to minimise rate risk.
49
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 29. 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
Net exposure to cash flow interest rate risk
Weighted
average
interest rate
%
3.71%
3.25%
2022
2021
Weighted
average
interest rate
%
3.54%
3.08%
Balance
$'000
2,538
36,000
38,538
Balance
$'000
1,404
26,000
27,404
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
An official increase/decrease in interest rates of 100bps (30 June 2021: 100bps) would have an adverse/favourable effect
on profit before tax of the following:
Group - 2022
Basis points increase
Basis points
change
Effect on
profit before
tax
Effect on
equity
Basis points
change
Basis points decrease
Effect on
profit before
tax
Effect on
equity
Variable rate borrowings
(100)
(385,379)
(269,765)
100
385,379
269,765
Group - 2021
Basis points increase
Basis points
change
Effect on
profit before
tax
Effect on
equity
Basis points
change
Basis points decrease
Effect on
profit before
tax
Effect on
equity
Variable rate borrowings
(100)
(274,043)
(191,830)
100
274,043
191,830
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 2022 or 30 June 2021.
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 one year.
The Group has no significant credit risk to any individual customer.
50
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 29. 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.
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 - 2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Contingent consideration
Interest-bearing - variable
Bank overdraft and trade
finance
Bank bills
Total non-derivatives
Group - 2021
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Contingent consideration
Interest-bearing - variable
Bank overdraft and trade
finance
Bank bills
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
-
-
-
46,053
14,263
3,534
-
-
2,758
3.71%
3.25%
2,538
1,170
67,558
-
36,879
39,637
-
-
1,576
-
-
1,576
-
-
-
-
-
-
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
46,053
14,263
7,868
2,538
38,049
108,771
Remaining
contractual
maturities
$'000
-
-
-
33,753
6,859
2,022
-
-
2,104
-
-
3,035
3.54%
3.08%
1,404
801
44,839
-
801
2,905
-
26,602
29,637
-
-
-
-
-
-
33,753
6,859
7,161
1,404
28,204
77,381
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 21).
51
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 30. 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 31. Remuneration of auditors
2022
$
Group
2021
$
1,402,649
87,986
138,058
515,824
1,753,105
95,822
35,214
504,677
2,144,517
2,388,818
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
2022
$
Group
2021
$
263,000
199,000
85,500
41,645
31,125
270,320
127,145
301,445
390,145
500,445
Note 32. Contingent liabilities
The Group has given bank guarantees as at 30 June 2022 of $2,497,158 (30 June 2021: $2,509,386) to various landlords.
Note 33. Related party transactions
Parent entity
Big River Industries Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 36.
Key management personnel
Disclosures relating to key management personnel are set out in note 30 and the remuneration report included in the
directors' report.
Transactions with related parties
During the financial year, the Company paid $77,000 (30 June 2021: $47,885) 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.
52
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 33. Related party transactions (continued)
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 34. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Retained profits
Total equity
2022
$'000
Parent
2021
$'000
7,284
6,513
-
-
7,284
6,513
2022
$'000
Parent
2021
$'000
86,992
71,775
48,325
48,916
135,317
120,691
116
-
36,000
26,000
36,116
26,000
99,201
94,691
96,665
1,514
1,022
93,409
605
677
99,201
94,691
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 37) under which it guarantees the debts of its subsidiaries
as at 30 June 2022 and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
53
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 34. Parent entity information (continued)
Capital commitments - Property, plant and equipment
Under the Government Grant entitlement in 2020, the Group agreed to invest approximately $6.0m of capital expenditure
expanding the Grafton NSW Site. As at 30 June 2022, there is approximately $2.0m of capital commitments remaining from
this investment. The Group expects these to be completed during FY2023.
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 35. Business combinations
2022
Revolution Wood Panels
On 24 August 2021, the Group executed a business purchase deed to acquire the business and assets of Revolution Wood
Panels Pty Ltd ('Revolution Wood Panels'), a business located in the Brisbane suburb of Brendale, QLD. Completion was
effective from 1 October 2021 and the maximum purchase price of $7.8 million, which includes inventory, and plant and
equipment, was settled through the payment of $6.0 million in cash, the issue of $1.0 million in ordinary shares of Big River
Industries Ltd, with the balance payable upon achieving agreed EBITDA targets over a two year period. The acquisition
contributed $12.1 million to revenue and $0.7 million to net profit after tax of the Group for the year ended 30 June 2022.
The values identified in relation to the acquisition are final as at 30 June 2022.
United Building Products
On 4 October 2021, the Group executed a business purchase deed to acquire the business and assets of United Home &
Trade Pty Ltd ('United Building Products'), a business located in Albion Park, NSW. Completion was effective from 1
November 2021 and the maximum purchase price of $10.7 million, which includes inventory, and plant and equipment, was
settled through the payment of $7.5 million in cash, the issue of $2.1 million in ordinary shares of Big River Industries Ltd,
with the balance payable upon achieving agreed EBITDA targets over a two year period. The acquisition contributed $15.5
million to revenue and $1.1 million to net profit after tax of the Group for the year ended 30 June 2022. The values identified
in relation to the acquisition are final as at 30 June 2022.
54
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
Details of the acquisitions are as follows:
Inventories
Plant and equipment
Right-of-use assets
Customer relationships
Brand
Deferred tax asset
Deferred tax liability
Employee benefits
Lease make good provision
Lease liability
Net assets acquired
Goodwill
Revolution
Wood
Panels
Fair value
$'000
United
Building
Products
Fair value
$'000
1,598
613
1,157
3,168
129
76
(1,059)
(255)
(90)
(1,066)
4,271
3,532
2,350
321
5,350
3,279
182
104
(1,142)
(345)
(60)
(5,291)
4,748
5,978
Total
$'000
3,948
934
6,507
6,447
311
180
(2,201)
(600)
(150)
(6,357)
9,019
9,510
Acquisition-date fair value of the total consideration transferred
7,803
10,726
18,529
Representing:
Cash paid or payable to vendor
Big River Industries Limited shares issued to vendor
Contingent consideration
5,998
1,037
768
7,457
2,117
1,152
13,455
3,154
1,920
7,803
10,726
18,529
Acquisition costs expensed to profit or loss
624
214
838
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: contingent consideration
Less: shares issued by Company as part of consideration
Net cash used
7,803
(768)
(1,037)
10,726
(1,152)
(2,117)
18,529
(1,920)
(3,154)
5,998
7,457
13,455
55
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
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.
Details of the acquisition are as follows:
Fair value
$'000
11,380
543
6,517
6,207
3,538
2,600
228
(2,237)
(760)
(100)
(6,107)
21,809
8,339
30,148
21,023
4,444
4,681
30,148
831
30,148
(4,681)
(4,444)
21,023
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 or payable to vendor
Big River Industries Limited shares issued to vendor
Contingent consideration
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: contingent consideration
Less: shares issued by Company as part of consideration
Net cash used
56
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 36. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Name
Big River Group Pty Ltd
Big River Group (NZ) Limited
Plytech International Limited
Decortech Limited
Note 37. Deed of cross guarantee
Principal place of business /
Country of incorporation
Australia
New Zealand
New Zealand
New Zealand
Ownership interest
2022
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
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements
and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other
parties to the deed of cross guarantee that are controlled by Big River Industries Limited, they also represent the 'Extended
Closed Group'.
The statement of profit or loss and other comprehensive income and statement of financial position are substantially the
same as the Group and therefore have not been separately disclosed.
57
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 38. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax (expense)/benefit for the year
Adjustments for:
Depreciation and amortisation
(Reversal)/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
Increase in inventories
Decrease in prepayments
Increase in deferred tax
Increase in trade and other payables
Increase in provision for income tax
Increase/(decrease) in other provisions
Increase/(decrease) in other operating liabilities
2022
$'000
Group
2021
$'000
21,267
1,817
12,240
(316)
(62)
909
-
779
-
(9,449)
(14,722)
1,086
2,907
20,659
4,292
(1,467)
(963)
9,415
12,274
(134)
605
(286)
214
(100)
(10,170)
(4,554)
88
(4,248)
2,788
134
3,980
2,324
Net cash from operating activities
37,160
14,147
Non-cash investing and financing activities
Additions to the right-of-use assets
Shares issued under dividend reinvestment plan
Shares issued in relation to business combinations
2022
$'000
154
239
3,154
Group
2021
$'000
4,216
108
4,444
3,547
8,768
58
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 38. Cash flow information (continued)
Changes in liabilities arising from financing activities
Group
Balance at 1 July 2020
Net cash from/(used in) financing activities
Acquisition of leases
Changes through business combinations (note 35)
Lease adjustments
Balance at 30 June 2021
Net cash from/(used in) financing activities
Acquisition of leases
Changes through business combinations (note 35)
Balance at 30 June 2022
Note 39. Earnings per share
Bank
bills
$'000
25,850
150
-
-
-
26,000
10,000
-
-
Lease
liability
$'000
21,524
(5,507)
4,216
6,107
(554)
25,786
(7,071)
154
6,357
Total
$'000
47,374
(5,357)
4,216
6,107
(554)
51,786
2,929
154
6,357
36,000
25,226
61,226
2022
$'000
Group
2021
$'000
Profit after income tax attributable to the owners of Big River Industries Limited
21,267
1,817
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
81,716,852 70,359,025
Performance rights
1,644,577
-
Weighted average number of ordinary shares used in calculating diluted earnings per share 83,361,429 70,359,025
Number
Number
Basic earnings per share
Diluted earnings per share
Note 40. Share-based payments
Cents
Cents
26.03
25.51
2.58
2.58
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.
59
Big River Industries Limited
Notes to the consolidated financial statements
30 June 2022
Note 40. Share-based payments (continued)
Set out below are summaries of performance rights granted under the plan:
2022
Grant date
Expiry date
23/11/2023
28/11/2024
01/12/2025
17/12/2026
23/11/2018
28/11/2019
01/12/2020
17/12/2021
2021
Grant date
Expiry date
23/11/2018
28/11/2019
01/12/2020
23/11/2023
28/11/2024
01/12/2025
Balance at
the start of
the year
341,355
677,590
541,662
-
1,560,607
Balance at
the start of
the year
341,355
677,590
-
1,018,945
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
473,429
473,429
-
-
-
-
-
(341,355)
-
-
-
(341,355)
-
677,590
541,662
473,429
1,692,681
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
541,662
541,662
-
-
-
-
-
-
-
-
341,355
677,590
541,662
1,560,607
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 3.25
years (30 June 2021: 3.41 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
17/12/2021
Expiry date
17/12/2026
Note 41. Events after the reporting period
Share price
at grant date
Dividend
yield
Risk-free
Fair value
interest rate at grant date
$2.13
2.63%
1.58%
$1.968
On 7 July 2022, Big River Group Pty Ltd, a subsidiary of Big River Industries Limited, agreed to buy the business and the
assets of F.A. Mitchell & Co Pty Ltd for the consideration of $600,000. The contract for purchase was completed on 1 August
2022.
Apart from the dividend declared as disclosed in note 28, no other matter or circumstance has arisen since 30 June 2022
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
Big River Industries Limited
Directors' declaration
30 June 2022
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
2022 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 37 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
26 August 2022
Sydney
___________________________
James Bindon
Managing Director and Chief Executive Officer
61
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Independent Auditor’s Report to the Members of Big River Industries Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Big River Industries Limited (the “Company”) and its subsidiaries (the
“Group”) which comprises the consolidated statement of financial position as at 30 June 2022, 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 2022 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 Existence and completeness of inventory
How the scope of our audit responded to the Key Audit Matter
As at 30 June 2022, the Group has
recognised $72.8m of finished goods (net
of provision) in the consolidated statement
of financial position as disclosed in Note
12.
The Group holds inventories of finished
goods at each of its retail branches and
manufacturing sites across Australia and
New Zealand.
Existence and completeness of inventory is
assessed by the Group through the
completion of annual stock takes at each
of the Group’s retail branches and
manufacturing sites.
Existence and completeness of inventory is
a key audit matter due to the nature of
inventory where the value per unit is
relatively insignificant but high volumes
are involved which are dispersed across
different locations.
Occurrence and accuracy of revenue – sale
of goods
The Group has generated $409.3m of
revenue from the sale of goods as
disclosed in the consolidated statement of
profit and loss and other comprehensive
income and in Note 5.
Occurrence and accuracy of revenue
relating to the sale of goods is a key audit
matter due to the significant audit effort
to test the high volume of sale
transactions recorded as revenue and the
significant value of the revenue
recognised.
Our procedures included, but were not limited to:
-
-
-
-
-
-
the appropriateness of
Evaluating
the Group’s
accounting policies for the existence of inventory
against the requirements of the accounting standard
Obtaining
an understanding of management’s
processes applied in determining the existence of
inventory
On a sample basis, attending the annual inventory stock
takes at locations with significant inventory holdings
On a sample basis, testing the existence and
completeness of inventory, by tracing items from the
inventory system to the physical location and from the
physical location to the inventory system respectively
Testing the summation of the stock sheets to the
general ledger to test that variances identified at count
date have been appropriately updated in the general
ledger
Agreeing the stock sheets and variance reports from the
annual inventory counts to the general ledger
We have also assessed the adequacy of the relevant disclosures
in Note 12 to the financial statements.
Our procedures included, but were not limited to:
-
-
-
-
Evaluating the appropriateness of the Group’s revenue
recognition policies against the requirements of the
accounting standard
Obtaining
an understanding of management’s
processes applied in determining the recognition of
revenue for the sale of goods
On a sample basis, verifying the revenues with the
corresponding
from the
respective customers, delivery documentation and
third party confirmation of the receipt of goods
Analysing the relevant terms for a sample of contracts
to the criteria in the accounting standards, those in the
Group’s accounting policy and against what the Group
identified as the performance obligations.
invoices, cash received
We have also assessed the adequacy of the disclosures in Note
5 to the financial statements.
63 Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report,
Corporate Directory and Shareholder Information, which we obtained prior to the date of this auditor’s report,
and also includes the following information which will be included in the Group’s annual report (but does not
include the financial report and our auditor’s report thereon): Chairman and Managing Director’s Report and
Corporate Details, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
When we read the Chairman and Managing Director’s Report and Corporate Details, if we conclude that there is
a material misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
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 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
64 financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 14 of the Directors’ Report for the year ended
30 June 2022.
In our opinion, the Remuneration Report of Big River Industries Limited, for the year ended 30 June 2022, 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
David Haynes
Partner
Chartered Accountants
Sydney, 25 August 2022
65 Big River Industries Limited
Shareholder information
30 June 2022
The shareholder information set out below was applicable as at 5 August 2022.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number
of holders
175
126
39
55
29
424
41.27
29.72
9.20
12.97
6.84
100.00
54
12.74
Naos Asset Mgt
Anacacia Capital
SG Hiscock & Co
Kinetic Investment Partners
Mrs Anne E Parsonson
Lennox Capital Partners
Regal Funds Mgt
Mr Victor Said
Mr & Mrs Denis W Jaggar
Mr & Mrs Paul H Webber
1851 Capital
Mr Iain O A Agyeman
DMP Asset Mgt
Wilson Asset Mgt
Mr James B Bindon
Mr Steve Grozdanov
Mr Nick Grozdanov
Cyan Investment Mgt
Mr & Mrs Stephen T Parks
Mr Graham R Anderson
Unquoted equity securities
Performance rights
66
Ordinary shares
% of total
shares
issued
Number held
28,225,225
27,166,427
4,927,960
4,045,158
2,222,222
1,721,062
1,237,796
988,894
901,632
901,632
851,174
740,741
718,911
627,545
533,333
496,992
496,992
285,714
253,333
248,033
34.33
33.04
5.99
4.92
2.70
2.09
1.51
1.20
1.10
1.10
1.04
0.90
0.87
0.76
0.65
0.60
0.60
0.35
0.31
0.30
77,590,776
94.36
Number
on issue
Number
of holders
1,692,681
10
Big River Industries Limited
Shareholder information
30 June 2022
Substantial holders
Substantial holders in the Company are set out below:
Naos Asset Mgt
Anacacia Capital
SG Hiscock & Co
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
shares
issued
Number held
28,225,225
27,166,427
4,927,960
34.33
33.04
5.99
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.
67
Big River Industries Limited
Corporate directory
30 June 2022
Directors
James Bernard Bindon
Malcolm Geoffrey Jackman
Martin Kaplan
Vicky Papachristos
Brendan York
Brad Soller
Martin Monro
Company secretary
John O'Connor
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
68