Beacon Lighting Group Limited
ANNUAL
REPORT
20 15
ACN 164 122 785
For personal use only For personal use only Contents
Chairman’s and Chief Executive Officer’s Report
Board of Directors
Management Team
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
Index to the Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the
Members of Beacon Lighting Group Limited
Shareholders’ Information
Corporate Directory
Store Locations
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Important Notice
This financial report is the consolidated financial report of the consolidated entity consisting Beacon Lighting Group Limited, ACN 164 122 785 and its
subsidiaries. Beacon Lighting Group Limited is a Company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place
of business is 5 Bastow Place Mulgrave Victoria 3170. A description of the nature of the consolidated entity’s operations and its principal activities is included
in the Director’s report on page 14, which is not part of the financial report. The financial report was authorized for issue by the Directors on 19 August 2015.
The Director’s have the power to amend and re-issue the financial statements.
For personal use only For personal use only Chairman’s and Chief Executive Officer’s Report
Beacon Lighting Group Limited is very excited to be able to announce our outstanding financial results
for FY2015. As a result of the efforts of the Beacon Lighting team, the Group has achieved record sales
and record profits in FY2015. The exceptional result was driven by strong sales growth, including
terrific comparative company store sales, solid gross profit dollar growth and expense productivity
gains. Throughout FY2015, Beacon Lighting has been able to build on our industry leading position in
Australia by bringing the latest fashion, trend and technologically advanced products to our customers
supported by continuing focus on customer service.
Result Overview
Other Result Highlights
Beacon Lighting has achieved sales growth of 19.3% to $179.4 million
in FY2015. This strong sales growth was supported by the spectacular
growth in company stores comparative sales by 10.4%. Gross profit
dollars were also solid with an increase of 20.1% or $19.4m, while the
gross profit margin also improved to 64.7% in FY2015 from 64.3% in
FY2014. Expense productivity gains were also achieved with expenses
as a percentage of sales falling to 51.6% in FY2015 from 54.6% in
FY2014. Due to the strong trading and expense improvements the
EBITDA result increased by 36.4% to $27.4 million in FY2015 and the
Net Profit After Tax result has improved by 43.6% to $16.9 million in
FY2015.
The Beacon Lighting trading results were supported by an increased
investment in inventories to improve the in stock position to service
our customers and prime the 3PL supply chain. Other Beacon Lighting
investments included new stores, major store refurbishments, a
franchise store acquisition and other assets. The continued investment
in the Group assets have been funded by cash flow and assisted by the
use of trade finance facilities.
Beacon Lighting finished FY2015 with 78 company stores, 13 franchise
stores and 4 commercial sales offices. During FY2015, the Group opened
seven new company stores being Mittagong (NSW), Coburg (VIC), Port
Macquarie (NSW), Camberwell (VIC), Churchill (SA), Pakenham (VIC) and
Ipswich (QLD). We also closed down the Hawthorn (VIC) store, opened a
new Commercial Sales Office in Perth (WA) and purchased the Fountain
Gate (VIC) franchise store. Further investments were also made in major
store refurbishments at Taren Point (NSW) and Moorabbin (VIC). Exciting
new product ranges supported by delivering high standards of service
helped to make Beacon Lighting an exciting and engaging place to shop
for our customers.
Beacon Lighting had a number of other result highlights which contributed
to the record sales and record profit results in FY2015 including:
▲ Company store sales increased by 19.6%
▲ Online sales increased by 32.2%
▲ VIP customers have increased to 104,000
▲ Website traffic has increased by 29.2%
▲ Trade Sales increased by 26.6%
▲ Our Associates now exceed 800 in total
CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S REPORT
1
For personal use only Growth Strategies
The Board
Beacon Lighting have a number of consistent growth strategies which
continue to drive sales and profits. In FY2016, we will continue to:
• Target the opening of six new company stores;
• Continue to improve the performance of the
existing stores;
• Be the first to market in the latest fashion, trends
and technological lighting products;
• Enhance our online and social media presence
in order to drive incremental sales growth;
• Pursue aligned business acquisition opportunities
both locally and internationally;
• Support the emerging businesses in Beacon Solar
and Beacon International; and
• Manage efficiency gains while continuing to
support the business growth.
As recently announced, the distribution and product development
opportunity in partnership with GE will provide Beacon Lighting with
further growth opportunities through new sales channels in both
Australia and New Zealand. In addition, the acquisition of the Essendon
and Watergardens franchised stores adds additional sales and growth
in those markets.
The Board of Directors recognises the importance of good corporate
governance for the benefit of our shareholders, associates and
customers. Changes in the development in the corporate governance
area are monitored and reviewed for implementation if required. The
Board is committed to ensuring that Beacon Lighting is operated ethically
and in accordance with high standards of corporate governance.
Dividends
The Directors have declared a final fully franked dividend of 2.4 cents
per share for the year ending 28 June 2015. This brings the annual
dividend to 4.2 cents per share fully franked for FY2015. Going forward,
it is expected that full year dividends of between 50% and 60% of annual
Net Profit After Tax will be paid half yearly in March and September.
Outlook
The general market conditions remain supportive of the lighting
industry in Australia. Low interest rates, confidence in property prices
and increasing number of dwelling approvals are all positive indicators
for a housing aligned business like Beacon Lighting. In addition, the
continuing and rapid development of new LED technologies, new
energy effiency regulations and lighting becoming more fashionable will
continue to drive growth in the lighting category.
Given these market conditions along with our growth strategies, the
Directors believe that Beacon Lighting remains well positioned to take
advantage of the ongoing changes that are occurring in Australia. We
will continue to open new company stores, we will continue to work
on improving the performance of existing stores, we will be the first to
market with the latest fashion, trend and technology lighting products,
we will enhance our online and social media presence, we will pursue
aligned business acquisition opportunities, we will support our emerging
business and we will target efficiency gains. The Beacon Lighting team
is looking forward to another successful year in FY2016.
Ian Robinson
Executive Chairman
Glen Robinson
Chief Executive Officer
2
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only Key Highlights of 20 1 5
RECORD
SALES
$179.4m
RECORD
EBITDA1
$27.4m
COMP. STORE
SALES INC.2
10.4%
OPERATING
EXPENSES
% SALES FALL3
3.0%
SALES4 ($m)
$179.4
$132.9
$150.3
$120.6
FY 2012
FY 2013
FY 2014
FY 2015
EBITDA1,4 ($m)
$15.9
$16.6
$27.4
$20.1
FY 2012
FY 2013
FY 2014
FY 2015
NPAT4,5 ($m)
$16.9
$9.3
$9.5
$11.8
FY 2012
FY 2013
FY 2014
FY 2015
1 Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)
2 Company Store Comparative Sales Increase
3 Operating Expenses excluding, Depreciation, Amortisation, Interest and Tax.
4 52 week FY2012 and FY2013 Pro Forma result in the Prospectus dated 12 March 2014.
5 Net Profit After Tax (NPAT)
HIGHLIGHTS
3
For personal use only For personal use only Board of Directors
Ian Robinson
Executive Chairman
41 year of service
Ian Robinson purchased the first Beacon Lighting store in 1975. Over
the subsequent 40 years, his role has grown from store management,
to CEO and in July 2013 to his current role as Executive Chairman. Ian
remains actively involved in the Group operations. Ian is a Director of
both Lighting Council of Australia and Carbonetix Pty Ltd. and President
of the Large Format Retailers Association.
Glen Robinson
Chief Executive Officer
20 years of service
Glen Robinson assumed his current role of Chief Executive Officer in July
2013 after joining the Group in 1994. Glen has a strong understanding
of the business having started with the Group on the sales floor,
progressed to Trainee Buyer, Merchandising Manager and then taking
responsibility for Beacon Lighting’s product range from development to
in-store presentation. Glen holds a Bachelor of Business (Management).
Left to right: (James) Eric Barr, Glen Robinson, Ian Robinson and Neil Osborne.
(James) Eric Barr
Deputy Chairman Non-Executive Director
Eric Barr is the Deputy Chairman and also the Chairman of Beacon
Lighting’s Remuneration and Nomination Committee. Eric retired in
2000 as a partner with PricewaterhouseCoopers after 20 years service
providing multi-disciplinary services to numerous retailers. Since then
he has been a Director of public and private companies in the United
States and Australia, including 10 years as lead Director of Reading
International Inc. Eric is a Director and Chairman of the Audit Committee
of Asia Pacific Stock Exchange Limited, Director and Chairman of the
Risk Committee of Austock Life Limited.
Neil Osborne
Non-Executive Director
Neil Osborne is a Non-Executive Director and is also Chairman of the
Company’s Audit Committee.
Neil has over 30 years’ experience in the retail industry. He was formerly
an Accenture Partner, leading large strategic projects in Australia and
Asia. He also spent 18 years with Coles Myer Ltd in senior positions
including finance (including CFO Myer) and strategic planning.
Neil is a Non-Executive Director of Vita Group, Deputy Chairman of
Australian United Retailers (trading as Foodworks) and is a Non-
Executive Director of Lovisa Holdings.
Neil holds a Bachelor of Commerce and is a CPA and a FAICD.
BOARD OF DIRECTORS
5
For personal use only Management Team
Left to right: Ian Bunnett, Michael (Mick) Tan, Prue Robinson, David Speirs, Tracey Hutchinson, Rodney Brown, Barry Martens and Elizabeth Mikkelsen.
Ian Bunnett
Managing Director - Retail
Joined Beacon Lighting in 2004 having had extensive retail experience
including the GM of Store Operations with Payless Shoes.
David Speirs
Chief Financial Officer
Joined Beacon Lighting in 2003 after six years of business consulting
and a career working with various Coles Myer businesses. David holds
a BBus (Accounting), MBus (Accounting), Post Grad Dip (Finance) and
is a FCPA.
Barry Martens
Chief Operating Officer
Joined Beacon Lighting in 1996 following a retail advertising career
with Clemenger Harvey and retail marketing experience with Klein’s
Jewellery. Barry holds a Certificate in Business Studies (Advertising).
Elizabeth Mikkelsen
Group Human Resources Manager
Joined Beacon Lighting in 2003 having had a retail management career
which included Myer Stores in Human Resources and line management.
Elizabeth holds a BA (Psych(Hons)) and a Dip (Human Resources).
Prue Robinson
Marketing Director
Joined Beacon Lighting in 2006 following a variety of roles in Sydney
and London and four years in marketing with Spotlight. Prue holds a
BBus (Management & Marketing).
Michael (Mick) Tan
Chief Information Officer
Joined Beacon Lighting in 2000 after having 20 years information
technology experience including a career with Fujitsu Systems. Mick
holds a Dip (Management), an ICL Certificate (Systems Analysts & Design)
and an ICL Certificate (Base Computer Concepts & Programming).
Rodney Brown
National Distribution Manager
Joined Beacon Lighting in 2012 with extensive supply chain experience
including management roles with Cadbury Schweppes and Fosters
Brewing. Rodney holds a Certificate III in Purchasing and Warehouse
Management.
Tracey Hutchinson
Finance Manager & Company Secretary
Joined Beacon Lighting in 2011 having had senior financial management
roles with various ASX businesses, including Eyecare Partners. Tracey
holds a BBus (Accounting), an MBus (Administration) and is a CPA.
6
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only For personal use only Corporate Governance Statement
The Board of Directors of Beacon Lighting Group Limited is responsible for the corporate governance of the Group. This statement outlines the corporate
governance policies and practices formally approved by the Board of Beacon Lighting. This statement is current as at 28 June 2015. These policies and
practices are in accordance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd Edition) unless
otherwise stated. The Board considers that the Group’s corporate governance practices and procedures substantially reflect the principles. The full
content of the Group’s Corporate Governance policies and charters can be found on the Group’s website (www.beaconlightinggroup.com.au).
Principle 1
Lay solid foundations for management and oversight
Principle 2
Structure the Board to add value
The Board’s responsibilities are defined in the Board Charter and there
is a clear delineation between the matters expressly reserved to the
Board and those delegated to the Chief Executive Officer and senior
management.
The Board Charter outlines:
The experience and expertise relevant to the position of Director held by
each Director in office at the date of the annual report is included in the
Directors’ Report.
The term in office held by each Director in office at the date of this report
is as follows:
• The guidelines for Board composition, including the processes around
Director appointments and resignations.
• The operation of the Board and the Board Committees.
• The roles of the Board, the Chairperson, CEO and senior management.
• Specifically includes risk management responsibilities (rather than
these being delegated to a separate Risk Committee).
A copy of the Group’s Board Charter is available on the Group’s website.
The Board and Committee Evaluation Policy sets out the processes for
the annual review of the performance of the Board as a whole, each
Director and the Board Committees.
The Board has established a Remuneration and Nomination Committee
which is responsible for annually reviewing executive remuneration and
incentive policies and practices.
The Group has a written agreement with each Director and senior
executive setting out the terms of their appointment.
The Group has adopted a Diversity Policy. The Group does not propose
to establish measurable objectives for achieving gender diversity in the
foreseeable future as recommended by Recommendation 1.5 of the ASX
Corporate Governance Principles and Recommendations as:
• The Group’s senior management team is extremely experienced
and stable and the Group does not intend to make changes in the
immediate future.
• The Group is strongly committed to making all selection decisions on
the basis of merit and the setting of specific targets for the proportion
of men and women at any level would potentially influence decision
making to the detriment of the business.
The Diversity Policy affirms the commitment of the Group to embrace
diversity and sets out the principles and work practices to ensure that all
Associates have the opportunity to achieve their full potential.
Name
Ian Robinson
Eric Barr
Glen Robinson
Neil Osborne
Term in office
2 years
1 year
1 year
1 year
Note: these terms of office relate to the listed entity Beacon Lighting
Group Limited only and do not relate to the subsidiary or operating
entities.
Ian Robinson is a substantial shareholder. He has been Chairman since
July 2013 having previously held the position of Chairman and Chief
Executive Officer.
Eric Barr and Neil Osborne are shareholders of Beacon Lighting Group
Limited. They are Non-Executive Directors and bring objective judgment
to bear on Board decisions commensurate with their commercial
knowledge, experience and expertise.
Glen Robinson is a senior executive of Beacon Lighting and has been
Chief Executive Officer since July 2013.
Recommendation 2.1 of the ASX Corporate Governance Principles and
Recommendations recommends that the Board establishes a nomination
committee and that the committee have at least three members, a
majority of whom are independent and be chaired by an independent
Director.
The Remuneration and Nominations Committee has four members. Three
are independent: Eric Barr and Neil Osborne, as independent Directors,
and one external consultant. Ian Robinson, Executive Chairman, is the
other member.
The Committee is chaired by Eric Barr.
A copy of the Remuneration and Nomination Committee Charter is
available on the Group’s website.
8
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only In relation to nominations, the Remuneration and Nomination Committee
is responsible for:
In summary, the Code requires associates to always act:
• In a professional, fair and ethical manner, in accordance with Group
• Assessing current and future Director skills and experiences and
values.
identifying suitable candidates for succession.
• In accordance with applicable legislation and regulations, and internal
• Annually enquiring of the Executive Chairman and the Chief Executive
policies and procedures.
Officer their processes for evaluating their direct reports.
An internal process of evaluation is undertaken annually on the
performance, skills and knowledge of the Board and its committees,
utlising a board skills matrix. The review provides comfort to the Board
that its structure and performance is effective and appropriate to Beacon
Lighting and that the Board has the range of skills, knowledge and
experience to direct the Group.
The board skills matrix sets out the requisite skills, expertise, experience
and other desirable attributes for the Board. The following skills and
attributes have been identified as skills which Beacon seeks to achieve
across its Board membership: other Board experience, retail industry
financial management experience and Governance
experience,
experience.
The Directors have been selected for their relevant expertise and
experience. They bring to the Board a variety of skills and experience,
including industry and business knowledge, financial management,
accounting, operational and corporate governance experience. The
annual report includes details of the Directors, including their specific
experience, expertise and term of office.
To enable performance of their duties, all Directors:
• Are provided with appropriate information in a timely manner and can
request additional information at any time;
• Have access to the Company Secretary;
• Have access to appropriate continuing professional development
opportunities; and
• Are able to seek independent professional advice at the Group’s
expense in certain circumstances.
Recommendations 2.4 and 2.5 of the ASX Corporate Governance
Principles and Recommendations recommends that the Board comprise
a majority of Directors who are independent, and that the Chairperson
should be an independent Director. The Board, as currently composed,
does not comply with these recommendations. The Board considers that
the composition of the Board is appropriate given the Group’s present
circumstances.
Principle 3
Act ethically and responsibly
The Group has adopted a written Code of Conduct which applies to the
Directors and all associates employed by the Group, including executives.
The objective of this Code is to ensure that high standards of corporate
and individual behavior are observed by all associates in the context of
their employment.
• In a manner that protects the Group interests, reputation, property
and resources.
The Code also reminds associates of their responsibility to raise any
concerns in relation to suspected or actual breaches of the Code.
Beacon Lighting has in place a policy concerning trading in Beacon
Lighting Group securities. The Securities Trading policy includes detailed
requirements for Directors, officers and key management regarding
when they can trade Beacon Lighting securities.
Principle 4
Safeguard integrity in corporate reporting
Principle 4.1 of the ASX Corporate Governance Principals and
Recommendations, recommends that the Audit Committee consist only
of Non-Executive Directors and consists of a majority of independent
Directors. The Audit Committee as currently composed does not
comply with these recommendations. Beacon Lighting has an Audit
Committee comprising of four members, three of whom are considered
independent. The Audit Committee presently comprises Neil Osborne
(Chairman), Eric Barr, Glen Robinson and one external consultant. Two
of the four members of the committee are Non-Executive Directors and
have experience in, and knowledge of, the industry in which Beacon
Lighting operates. Neil Osborne, Eric Barr and the external consultant
each have accounting qualifications.
The details of the number of Audit Committee meetings held and
attended are included in the Directors’ Report. Minutes are taken at
each Audit Committee meeting, with the minutes tabled in the following
full Board meeting.
The Audit Committee has adopted a formal charter which outlines its role
in assisting the Board in the Group’s governance and exercising of due
care, diligence and skill in relation to:
• Reporting of financial information;
• The application of accounting policies;
• Financial risk management;
• The Group’s internal control system; and
• Its relationship with the external auditor.
In accordance with Recommendation 4.2 the Board, before it approves
the Group’s statements for a financial period, ensures that it receives
from its Chief Executive Officer and Chief Financial Officer a declaration
that, in their opinion, the financial records of the Group have been
properly maintained and that the financial statements comply with the
appropriate accounting standards and give a true and fair view of the
financial position and performance of the entity and that the opinion has
been formed on the basis of a sound system of risk management and
internal control which is operating effectively.
CORPORATE GOVERNANCE STATEMENT
9
For personal use only In accordance with Principle 4.3, the Group’s external auditor attends
each annual general meeting and is available to answer shareholder
questions about the audit.
Principle 5
Make timely and balanced disclosure
Principle 5.1 of the ASX Corporate Governance Principles and
Recommendations recommends that companies should establish a
written policy designed to ensure compliance with ASX Listing Rule
disclosure requirements and to ensure accountability at a senior executive
level for that compliance and disclose that policy or a summary of it. The
Group has adopted a Continuous Disclosure Policy. This Policy sets out
the standards, protocols and the detailed requirements expected of all
Directors, officers, senior management and associates of the Group for
ensuring the Group immediately discloses all price-sensitive information
in compliance with the Listing Rules and Corporations Act relating to
continuous disclosure.
Principle 6
Respect the rights of security holders
The Group has adopted a Communications Policy governing its approach
to communicating with its shareholders, market participants, customers,
associates and other stakeholders.
This policy specifically includes:
• The approach to briefing institutional investors, brokers and analysts.
• The approach to communications with investors whether by meetings,
via the Group’s websites, electronically or by any other means.
Beacon Lighting provides a printed copy of its annual report to all
requesting shareholders. The annual report contains relevant information
about the Group’s operations during the year, changes in the state of
affairs and, other disclosures required by the Corporations Act. The half
year report contains summarised financial information and a review of
Beacon Lighting operations during the period.
The Beacon Lighting Corporate website provides all shareholders
and the public access to our announcements to the ASX, and general
information about Beacon Lighting and its business. It also includes
a section specifically dedicated to governance, which includes links to
the Company’s Constitution, Code of Conduct and its various corporate
governance charters and policies.
The format of general meetings aims to encourage shareholders to
actively participate in the meeting through being invited to comment, or
raise questions of Directors on any matter relevant to the performance
and operation of the Group.
Principle 7
Recognise and manage risk
Principle 7.1 of
the ASX Corporate Governance Principles and
Recommendations recommends that a listed company either have a
committee to oversee risk or otherwise disclose the processes it employs
for overseeing the company’s risk management framework.
The Board does not currently have a committee to oversee risk. Instead,
the Board Charter specifically includes risk management responsibilities
(rather than these being delegated to a separate Risk Committee).
The Board evaluates all risks to the Group on an annual basis. The risk
matrix is then reviewed at regular intervals throughout the year to ensure
that the Group is not being exposed to any new risks and that all existing
risks are being monitored and managed effectively.
The Board retains oversight responsibility for assessing the effectiveness
of the Group’s systems for the management of material business risks.
The Board reviews the Group’s risk management on an annual basis to
ensure it continues to be sound.
The Board does not consider a separate internal audit function is
necessary at this stage. One of the Audit Committee responsibilities is
to evaluate compliance with the Group’s risk management and internal
control processes.
The Board has received written assurances from management as to the
effectiveness of the Group’s management of its material business risks.
The Chief Executive Officer and Chief Financial Officer provide a written
assurance in the form of a declaration in respect of each relevant financial
period that, in their opinion, the declaration is founded on a sound system
of risk management and internal control and that the system is operating
effectively in all material respects in relation to financial reporting risks.
Principle 7.4 of the ASX Corporate Governance Principles and
Recommendations requires the Group to disclose details about whether
it has any material exposure to economic, environmental and social
sustainability risks (if any). The Group has considered the following risks
and has risk mitigation strategies in place.
Economic risks include impacts to consumers’ willingness to spend
on discretionary retail and lighting products in particular. The Group
mitigates the risk through the constant monitoring of the macro-
economic environment and adjusting capital expenditure, new projects
and operating expenses accordingly. Whilst consumer retail sentiment
was lower in 2015 which affected general retail demand, housing activity
remained positive which offset the impact of lower consumer sentiment
towards discretionary expenditure for the Group.
Exchange rate volatility can impact upon the Group’s ability to grow
margins. The Group has a policy of hedging 100% of the Group’s
inventory which is purchased in USD and sold in AUD. The Group can
also lock in a forward position for this foreign exchange exposure for
a period of up to 12 months. The Board believes this mitigates the
Group’s exchange rate volatility risk to an acceptable level.
Environmental sustainability risks include impacts on the Group’s supply
chain from suppliers through to stores. These risks can be reputational,
regulatory and financial. The Boards assesses its primary exposure to
be in the production of its products. The Group through its supply chain
operates responsibly within the community and expects the same from
its suppliers.
Social sustainability risks include workplace health and safety as well
as personnel management and corporate conduct. The Group has an
extensive workplace health and safety policy incorporating the early
identification and correction of potential risks, both in store and at the
support offices. The Board is informed of all incidents and material
potential risks at each Board meeting and the appropriate action taken.
Corporate conduct risks could impact regulatory, reputational and
financial performance. It includes stock loss and theft. The Group
has a dedicated store operations team to regularly monitor and assess
store related risks. The Group undertakes regular inventory counts and
analysis of store performance to reduce the risk of material loss.
10
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only For personal use only For personal use only Principle 8
Remunerate fairly and responsibly
Principle 8.1 of the Corporate Governance Principles and Recommendations,
recommends that the remuneration committee should comprise a majority
of independent Directors. The Remuneration and Nomination Committee
as currently composed does not comply with this recommendation. The
Remuneration and Nomination Committee has four members. Three are
independent: Eric Barr and Neil Osborne, as independent Directors, and
one external consultant. Ian Robinson, Executive Chairman, is the other
member. The Committee is chaired by Eric Barr.
In relation to remuneration, the Remuneration and Nomination Committee
is responsible for:
• Ensuring the Group has remuneration policies and practices appropriate
to attracting and retaining key talent.
• Reviewing and making recommendations in relation to the remuneration
of Directors and senior management.
• Reviewing and recommending the design of any executive incentive plans
and approving the proposed awards to each executive under those plans.
In accordance with its Charter, the Remuneration and Nomination
Committee clearly distinguishes the structure of Non-Executive Directors’
remuneration from that of Executive Directors and senior executives.
Details of Directors’ and executives’ remuneration, including the principles
used to determine the nature and amount of remuneration, are disclosed in
the remuneration report section of the annual report.
The Group’s Securities Trading Policy expressly prohibits relevant
participants from entering into arrangements that limit the economic risk
of participating in the Group’s incentive schemes prior to the relevant
securities becoming fully vested.
13
For personal use only Directors’ Report
The Directors of Beacon Lighting Group Limited (the ‘Group’) present their report together with the Consolidated Financial Statements of the Group and
its controlled entities (the ‘Consolidated Entity’) for the 52 weeks ended 28 June 2015.
1. Directors
The Directors of the Group during the whole financial period and up to
the date of the report were:
Ian Robinson
Executive Director
Chairman of the Board, Member of the Remuneration and
Nomination Committee.
Glen Robinson
Chief Executive Officer
Member of the Audit Committee.
Eric Barr
Non-Executive Director
Deputy Chairman of the Board, Chairman of the Remuneration and
Nomination Committee and Member of the Audit Committee.
Neil Osborne
Non-Executive Director
Chairman of the Audit Committee and Member of the Remuneration and
Nomination Committee.
Details of the expertise and experience of the Directors are outlined
on page 5 of this annual report.
2. Principal Activities
During the financial period the principal continuing activities of the
Group consisted of the selling of lighting, globes, ceiling fans and energy
efficient products in the Australian market.
3. Results
The consolidated profit for the year attributable to the members of
Beacon Lighting Group Limited was:
Consolidated Entity
Actual
FY2015
$’000
Actual
FY2014
$’000
4. Operating and Financial Review
4.1 Overview of Operations
Beacon Lighting is Australia’s leading specialist retailer of lighting, ceiling
fans and light globes, offering our customers knowledge, service and
advice on a wide range of products. As a vertically integrated retailer,
Beacon Lighting develops, designs, sources, imports, distributes,
merchandises, promotes and sells its product range to meet the demands
of our customers. More than 90% of the products sold in Company
stores are supplied through the Beacon Lighting wholesale supply chain
and approximately 80% of the products are exclusively branded.
At the end of FY2015, Beacon Lighting operated the following businesses:
Profit before Income Tax
23,832
17,057
• 78 Beacon Lighting Company Operated Stores;
Income Tax Expense
6,893
5,260
• 13 Beacon Lighting Franchise Stores;
• 4 Commercial Sales Offices;
Operating profit after tax attributable
to the members of Beacon Lighting
Group Limited
14
16,939
11,797
• Beacon Lighting Online;
• Beacon International; and
• Beacon Solar.
During FY2015, Beacon Lighting opened seven new company stores,
purchased the Fountain Gate (VIC) franchise store, closed one store in
Hawthorn (VIC) and opened a new Commercial Sales Office in Perth
(WA). The company operated stores that opened during FY2015 were
Mittagong (NSW), Coburg (VIC), Port Macquarie (NSW), Camberwell
(VIC), Churchill (SA), Pakenham (VIC) and Ipswich (QLD). Company
Operated Stores at Moorabbin (VIC) and Taren Point (NSW) both
underwent major refurbishments in FY2015.
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 4.1.1 Financial Performance
A summary of the actual FY2015 financial performance compared to the FY2014 actuals is presented in the following table.
Consolidated Entity
Sales
Gross Profit
Other Income & Other Revenue
Operating Expenses1
EBITDA
EBIT
Net Profit After Tax (NPAT)
1 Operating Expenses exclude depreciation and amortisation
4.1.2 Sales
Beacon Lighting has achieved sales growth of 19.3% to $179.4 million
in FY2015. This strong sales growth was particularly supported by
the spectacular growth in company stores comparative sales of 10.4%.
The sales increases in the states of New South Wales, Queensland and
Victoria were all outstanding. The comparative company store sales
growth was particularly strong in H1 FY2015 with an increase 11.6%
and while sales growth in H2 FY2015 was still strong with an increase
of 9.6%.
4.1.3 Gross Profit Margin
The gross profit dollars earned by Beacon Lighting increased by 20.1% or
$19.4 million in FY2015. Pleasingly, the gross profit margin also improved
to 64.7% of sales in FY2015 from 64.3% of sales in FY2014. Despite
the fall in the AUD/USD exchange rate, Beacon Lighting has been able to
increase the gross profit dollars and maintain the gross profit margins
through the introduction of 440 new exciting fashionable and technology
based products, improved buying, price and stock management.
4.1.4 Other Income & Other Revenue
Other Income and Other Revenue primarily consists of franchise stores
royalties and franchise store marketing fund contribution. These incomes
continue to fall as franchise stores have been purchased and converted
into company operated stores. Other Income and Other Revenue was
2.2% of sales in FY2015 compared to 3.7% of sales in FY2014. The
Taren Point (NSW) franchise store was purchased in H2 FY2014 and the
Fountain Gate (VIC) franchise store was purchased in H1 FY2015.
4.1.5 Operating Expenses
Supported by the strong sales growth and the effective management
of operating expenses, Beacon Lighting continued to achieve strong
expense productivity gains in FY2015. Total operating expenses as
a percentage of sales have improved to 51.6% of sales in FY2015
compared to 54.6% of sales in FY2014. Pleasingly, the expense
productivity gains have been achieved across all expense categories.
4.1.6 Earnings
Beacon Lighting achieved an Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) growth of 36.4% to $27.4 million for FY2015.
Actual
FY2015
$’000
179,386
116,041
3,949
(92,594)
27,395
25,042
16,939
Actual
FY2014
$’000
150,338
96,660
5,521
(82,095)
20,086
18,066
11,797
% Inc / Dec
on FY2014
19.3%
20.1%
(28.5%)
12.8%
36.4%
38.6%
43.6%
As a percentage of sales, the EBITDA result improved to 15.3% of sales
in FY2015 compared to 13.4% of sales in FY2014. The significant
EBITDA improvement was consistent with strong sales, improved gross
profit performance and the management of operating expenses. The
Net Profit After Tax (NPAT) has increased to $16.9 million or 9.4% of
sales in FY2015 compared to $11.8 million or 7.8% of sales in FY2014.
4.1.7 Dividends
The Directors of Beacon Lighting have declared an annual fully franked
dividend of 4.2 cents per share for FY2015. This means that Beacon
Lighting will have a NPAT dividend payout ratio of 53.3% for FY2015.
For H1 FY2015, the Directors have already declared a fully franked
dividend of 1.8 cents per share, therefore for H2 FY2015, the Directors
have declared a fully franked dividend of 2.4 cents per share. Going
forward, it is expected that Beacon Lighting will continue to have an
annual NPAT dividend payout ratio of between 50% and 60%.
4.1.8 Financial Position
In FY2015, Beacon Lighting has made a deliberate increased investment
in inventory. This has been the result of the introduction of new Company
Operated Stores, continuing to prime the China Warehouse and 3PL
distribution channel and improved in stock position in all Stores. Total
inventory increased to $44.6 million at the end of FY2015 from $32.2
million at the end of FY2014. Beacon Lighting invested $5.0 million
in capital expenditure principally associated with the expansion of the
Company Operated Store Network and the refit of two existing Company
Operated Stores. During FY2015, Beacon Lighting also purchased the
very successful Fountain Gate (VIC) franchise store which was funded
through cash flow.
This increase investment in inventory in FY2015 has been partially
funded by our trade finance facilities with our banks. These banking
facilities are current interest bearing loans and are used to meet our
working capital requirements of stock funding. Our banking facilities
have not been fully drawn down in FY2015 and do provide Beacon
Lighting with additional funding flexibility for the operation of the Group.
Beacon Lighting continues to operate well within our bank covenants.
DIRECTOR’S REPORT
15
For personal use only 4.2 Business Strategies
Beacon Lighting remains very well positioned to take advantage of the
changes that continue to occur in the lighting industry in Australia and
the rest of the world. Beacon Lighting intends to drive sales and profit
growth through a number of different strategies.
4.2.1 New Store Rollout
Beacon Lighting will continue to target the opening of six new Company
Operating Stores per year. These store openings are however dependent
upon the suitable site identification, negotiations and availability.
4.2.2 Optimising Store Portfolio and Operations
Beacon Lighting believes it is able to grow sales and profits through the
continued improvement in the existing store portfolio. The existing store
portfolio is being continually reviewed in order to optimise product range,
merchandising, marketing, fit out, customer service team, training and
operating costs.
4.2.3 New Products and Ranges
Beacon Lighting currently offers an extensive range of the latest fashion,
trend and energy efficient products to our customers. Beacon Lighting
has the scope to further improve the breadth and depth of the range
and is aiming to refresh approximately 20% of the product range each
year. More product options for both residential and trade customers
also present further opportunities for the Group.
4.2.4 Technology in Lighting
The lighting industry is experiencing rapid change in technology. A
need for greater energy efficiency is driving the development of
LED technology. Still in the early stages of penetration through the
lighting product range, LED continues to represent a significant growth
opportunity for the Group.
4.2.5 Online Presence
There are further opportunities to enhance and develop the Group’s
online presence to drive incremental sales. Further opportunities
which are aligned with social media and third party websites have been
identified and continue to be worked on.
4.2.6 Acquisitions
Beacon Lighting intends to investigate and pursue local and international
business acquisition opportunities that complement the core business
activities or leverage off existing business activities. This may include
other lighting stores, franchise stores, other retail formats, wholesaling
and other opportunities.
4.2.7 New Markets
There may be opportunities for Beacon Lighting to leverage our existing
business capabilities into new markets. Beacon Lighting intends to
further investigate and better understand the opportunities for the
future growth of the Group.
4.2.8 Emerging Businesses
Beacon Lighting intends to continue to support the emerging Beacon
International and Beacon Solar businesses. Both businesses offer
synergies with the core business and strengthen the overall market
penetration for the brand both within Australia and the rest of the world.
4.2.9 Efficiency Gains
Beacon Lighting believes that it can continue to make efficiency gains
and manage the growth of expenses through continued investment in
systems, technology and processes. There remains further efficiency
gain opportunities as the Group grows in relation to the supply chain,
inventory management and the Group support infrastructure.
4.3 Business Risks
There are a number of risks, both specific to Beacon Lighting and of
a general nature which may threaten both the future operating and
financial performance of the Group and the outcome of an investment
in Beacon Lighting. The operating and financial performance of Beacon
Lighting is influenced by a variety of general economic factors and
business factors, including but not limited to interest rates, consumer
confidence, business confidence, property prices, dwelling approvals,
inflation, government policy, natural disasters along with other domestic
and international events. Many of these risks are beyond the control
and influence of the Directors and management but Beacon Lighting is
well positioned to face these challenges compared to our competitors.
The specific material business risks faced by Beacon Lighting and how
they are managed are set out below.
4.3.1 Competition
Beacon Lighting operates in a competitive retail market which is subject
to moderate barriers to entry and changing consumer preferences.
Beacon Lighting believes that with our vertically integrated business
model and the business strategies previously discussed, our market
leading position in Australia will be maintained.
4.3.2 Supplier and Buying Agents
Beacon Lighting is a vertically integrated business which heavily relies
upon third party suppliers and buying agent structure. Beacon Lighting
will continue to monitor the supplier and buying agent performance and
spread product manufacturing across many suppliers.
4.3.3 Exchange Rates
The majority of goods that are purchased and imported by Beacon
Lighting are purchased in US dollars. As a result, the Group is exposed
to fluctuations in the AUD/USD exchange rates. Beacon Lighting
mitigates this risk by carrying all domestic stock in Australia in AUD by
using a variety of forward contracts, spot rates and options.
4.3.4 Growth Strategies
Beacon Lighting has a number of different business strategies to
support future growth and earnings. There is no guarantee that the
expected benefits of these strategies will be realised. Beacon Lighting
will continue to invest in and support growth strategies that can
contribute to increase Group value. If these opportunities do not have
this capability, then resources will be reallocated to other strategies.
4.3.5 Product Failure
As a vertically integrated business self-supplying over 90% of stock that
is technically complex in nature, there is always a risk of product failure.
Beacon Lighting continues to make significant investment in engineering,
product development and quality control to minimise this risk.
4.3.6 Operating Expenses
Operating expenses continue to increase. Some of these expenses are
contractual and some are beyond the control of the Group. The ongoing
increase in scale of Beacon Lighting gives the Group the opportunity to
deliver future operating expense efficiencies.
16
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 4.4 Trading Outlook
7. Directors’ Interests in Shares
Beacon Lighting has made a solid start to FY2016. Some of the key
strategies that are already in place for FY2016 and beyond are:
• A new E-Commerce sales channel, ebay.com.au became operational
in July 2015.
• The GE Distribution and Product Development Licence Agreement for
Australia and New Zealand to become operational in September 2015.
• At the end of September 2015, the Essendon and Watergardens
franchise stores will be purchased and converted into Company
Operated Stores.
• Three new stores, Maribyrnong (VIC), Fairfield (QLD) and Preston (VIC)
are expected to be opened during FY2016.
• A store expansion at the Alexandria (NSW) store was completed in
July 2015.
• A major refurbishment is planned for the Osborne Park (WA) store
with a targeted completion date of October 2015.
• 48 new products have been released for the Lamps Catalogue and 84
new products for the Spring / Summer Catalogue.
• The JustEnough forecasting and replenishment system is expected to
become operational in September 2015.
Going forward, the ongoing development in LED, fan and globe
technologies will continue to provide Beacon Lighting with opportunities
to bring fresh and exciting new products to our customers. Beacon
Lighting also continues to review a portfolio of new store opportunities
along with possible business acquisitions.
Beacon Lighting expects the current growth strategies to continue to
drive improved sales and profit results in FY2016.
5. Significant Changes in the State of Affairs
During the financial year there were no significant changes in the state
of the affairs of the Group.
6. Directors’ Meetings
The numbers of meetings of the Company’s Board of Directors held
during the financial period ended 28 June 2015, and the numbers of
meetings attended by each Director were:
Director’s
Meetings
H
13
13
13
13
A
13
13
13
13
Committee Meetings
Audit
Remuneration
& Nomination
H
-
4
4
4
A
-
4
4
4
H
5
-
5
5
A
5
-
5
5
DIRECTOR
I Robinson
G Robinson
E Barr
N Osborne
H = Number of meetings held during the time the Director held office or was a member of the
committee during the period.
A = Number of meetings attended.
The relevant interest of each Director in the Company, as notified by
the Directors to the ASX in accordance with section 205G(l) of the
Corporations Act 2001 (Cth), at the date of the report is as follows:
Director
I Robinson1
G Robinson1
E Barr
N Osborne
Ordinary Shares in the Company
118,652,589
118,652,589
150,000
300,000
1Heystead Nominees Pty Ltd and other Robinson Family member interests.
8. Directors’ Interests in Contracts
Directors’ interests in contracts are disclosed in Note 31 of the financial
statements.
9. Dividends
Dividends paid to members during the financial period were as follows:
Fully franked dividends provided
or paid during the period
FY 2015
$000
FY 2014
$000
6,882
14,500
To avoid any doubt, in FY2014 $14.5m was paid prior to the Group listing
on the ASX.
10. Insurance of Officers
10.1 Indemnification of Directors
The Group has indemnified each Director referred to in this Report,
the Company Secretary and previous Directors and officers against all
liabilities or loss (other than to the Group or a related body corporate) that
may arise from their position as officers of the Group and its controlled
entities, except where the liability arises out of conduct involving a lack
of good faith or where indemnification is otherwise not permitted under
the Corporations Act. The indemnity stipulates that the Group will meet
the full amount of any such liabilities, including costs and expenses,
and covers a period of seven years after ceasing to be an officer of the
Group. The indemnity is contained in a Deed of Access, Insurance and
Indemnity, which also gives each officer access to the Group’s books
and records.
The Group has also indemnified the current and previous Directors of
its controlled entities and certain members of the Company’s senior
management for all liabilities or loss (other than to the Group or a related
body corporate) that may arise from their position, except where the
liability arises out of conduct involving a lack of good faith or where
indemnification is otherwise not permitted under the Corporations Act.
DIRECTOR’S REPORT
17
For personal use only
10.2 Insurance premiums
During the financial period, Beacon Lighting Group Limited paid a
premium of $35,911 to insure the Directors and officers of the Group
against any loss which he/she becomes legally obligated to pay on
account of any claim first made against him/her during the policy period.
11. Indemnity of Auditors
Beacon Lighting Group Limited has agreed to indemnify their auditors,
PricewaterhouseCoopers (PwC), to the extent permitted by law, against
any claim by a third party arising from Beacon Lighting Group Limited’s
breach of their agreement. The indemnity stipulates that Beacon Lighting
Group Limited will meet the full amount of any such liabilities including a
reasonable amount of legal costs.
12. 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 Group for all or part of
those proceedings.
No proceedings have been brought or intervened in on behalf of the
Group with leave of the Court under section 237 of the Corporations Act
2001 (Cth).
13. Events Subsequent to Reporting Date
Other than the item described below, there has been no other matter
or circumstance that has occurred subsequent to period end that has
significantly affected, or may significantly affect, the operations of the
Group, the results of those operations or the state of affairs of the Group
or economic entity in subsequent financial periods.
Effective from September 2015, Beacon Lighting Group has entered
into a sole Distribution and IP License Agreement with GE Lighting for
the Australian and New Zealand markets. These agreements provide
the Group with wholesale distribution rights of the current GE branded
range of lamps (globes) and other consumer lighting fixtures. They also
provide use of the prominent GE brand under license for further product
development by Beacon Lighting.
Effective from 28th September 2015, Beacon Lighting Group has agreed
to terms for the acquisition of two Beacon Lighting Franchised stores.
The stores, located at Watergardens Homemaker Centre (Victoria) and
Essendon Homemaker Hub (Victoria). Having traded for more than 14
and 9 years respectively, they have developed a solid customer base
over that time.
A fully franked dividend of $5,161,822 was declared on August 19, 2015.
14. Audit Services
14.1 Auditor’s independence declaration
The auditor’s independence declaration to the Directors of the
Consolidated Entity in relation to the auditor’s compliance with the
independence requirements of the Corporations Act 2001 (Cth) and
the professional code of conduct for external auditors, forms part of the
Directors’ Report.
No person who was an officer of the Consolidated Entity during the
financial year was a Director or partner of the Consolidated Entity’s
external auditor.
14.2 Audit and non-audit services provided by the external auditor
During the 52 weeks ended 28 June 2015, the following fees were paid
or were due and payable for services provided by the external auditor,
PwC, of the Consolidated Entity:
Consolidated Entity
Audit & assurance services
FY 2015
$
FY 2014
$
Audit & review of financial statements
201,400
199,410
IPO due diligence
Other services
Other IPO services
IPO tax related services
Tax services
Other services
-
-
-
164,495
38,836
118,935
133,811
30,190
22,655
-
Total remuneration of PwC
357,866
551,866
In addition to their statutory audit duties, PwC provided taxation and
other assurance related services to the Group.
The Board has a review process in relation to non-audit services provided
by the external auditor. The Board considered the non-audit services
provided by PwC and, in accordance with written advice provided, and
endorsed, by a resolution of the Audit Committee, is satisfied that the
provision of these non-audit services by the auditor is compatible with,
and does not compromise, the auditor independence requirements of
the Corporations Act 2001 (Cth) for the following reasons:
• all non-audit services are subject to the corporate governance
procedures adopted by the Group and are reviewed by the Audit
Committee to ensure they do not impact the integrity and objectivity
of the auditor; and
• non-audit services provided do not undermine the general principles
relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants, as they do not involve reviewing
or auditing the auditor’s own work, aiding in a management or
decision making capacity for the Group, acting as an advocate for the
Company or jointly sharing risks and rewards with the Group.
15. Auditor
PricewaterhouseCoopers continues in office in accordance with section
327 of the Corporations Act 2001 (Cth).
16. Remuneration Report
16.1 Remuneration overview
The Board recognises that the performance of the Group depends on
the quality and motivation of our Associates, including the executives
and our 833 Associates employed by the Group across Australia and
Internationally. The Group remuneration strategy therefore seeks to
appropriately attract, reward and retain Associates at all levels in the
business, but in particular for management and key executives. The
Board aims to achieve this by establishing executive remuneration
packages that include a mix of fixed remuneration and short term
incentives.
The Board has appointed
the Remuneration and Nomination
Committee whose objective is to assist the Board in relation to the
Group remuneration strategy, policies and actions. In performing this
responsibility, the Committee must give appropriate consideration
to the Group’s performance and objectives, employment conditions
and external remuneration relativities. The Committee reviews and
determines our remuneration policy and structure annually to ensure it
remains aligned to business needs and meets the groups remuneration
principles. No remuneration consultants were engaged by the Group
in FY2015.
18
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only The remuneration framework for senior executives comprises a mix of both fixed and variable remuneration components. Variable remuneration may
be delivered in the form of cash and performance rights, subject to the achievement of short term performance targets. An outline of the remuneration
framework is set out below
Remuneration Framework
Element
Purpose
Performance metrics
Potential Value
Changes for FY2015
Fixed Remuneration (FR)
Provide competitive
market salary including
superannuation and
non-monetary benefits
Nil
Positioned at competitive
market rates
STI (Cash bonus)
STI (Performance Rights)
Reward for in year
performance
Reward for in year
performance
Budgeted NPBT
Budgeted NPBT
200% of on target cash
bonus
125% of on target cash
bonus
No change
No change
Assessing performance and claw-back of remuneration
The Remuneration and Nomination Committee is responsible for
assessing performance against KPIs and determining the STIs to be
paid. To assist in this assessment, the Committee receives detailed
financial reports from management which are based on independently
verifiable financial statements.
In the event of serious misconduct or material misstatement in the
Group’s financial statements the remuneration committee can cancel
performance based remuneration and may also claw back performance
based remuneration paid in previous financial years.
16.2 Principles used to determine the nature and amount
of remuneration
(a) Directors’ Fees
The Executive Chairman and the Chief Executive Officer do not receive
Directors’ fees but are remunerated as executives within the business.
The Deputy Chairman and the Non-Executive Director are entitled to
receive annual fees of $110,000 and $100,000 respectively. These
fees are inclusive of their relevant responsibilities on the various
Group Committees, and are also inclusive of superannuation. These
fees exclude any additional fees for special services which may be
determined from time to time. No additional retirement benefits are
payable.
The Non-Executive Director fees are reviewed annually to ensure that
the fees reflect market rates. There are no guaranteed annual increases
in any Directors’ fees. The Executive Chairman and Non-Executive
Directors do not participate in the short or long term incentive schemes.
(b) Executive Remuneration
Fixed remuneration includes superannuation which is paid in accordance
with legislated amounts.
Fixed remuneration for executives is reviewed annually to provide
competitiveness with the market, whilst also taking into account
capability, experience, value to the organization and performance of the
individual. There are no guaranteed base salary increases included in
executive contracts. An executive’s remuneration is also reviewed on
promotion.
In FY2015 fixed remuneration was increased for three executives at an
average of increase of 1.53%. This was done to align remuneration with
comparative roles.
2. Short term cash incentives
Executives including the Chief Executive Officer but not the Executive
Chairman are eligible to participate in an annual short term cash
incentive which delivers rewards by way of cash bonuses, subject to the
achievement of the Group financial performance targets.
The Group’s Net Profit Before Tax (NPBT) result has been determined
as the appropriate financial performance target to trigger the payment
of cash incentives for each period. The amount of any short term cash
incentive paid in a year is dependent upon the level of performance
achieved against the Group’s financial performance target, Net Profit
Before Tax (NPBT) for the year. The Board considers NPBT to be an
appropriate performance measure as it aligns the Group’s remuneration
philosophy with creating value, and is within the scope of influence of
participants.
Structure of short term cash incentive plan
Feature
Description
The current executive salary and reward framework has three
components:
Maximum opportunity
200% of on target cash bonus value
1. Fixed remuneration;
2. Short term cash incentives; and
3. Short term performance rights incentives.
The combination of these components comprises the executives’ total
remuneration.
For the year ended 28 June 2015, the Group did not a have long term
incentive program in place.
1. Fixed remuneration
Executive base salaries are structured as a part of the total employment
remuneration package which comprises the fixed component of pay and
other financial benefits being car allowances.
Performance metric
Budgeted NPBT
Delivery of STI
Board discretion
100% of STI award is paid in cash
after the financial results have been
audited and approved by the board
The board has discretion to adjust
remuneration outcomes up or down
to prevent any inappropriate reward
outcomes, including reducing down
to zero if appropriate
19
DIRECTOR’S REPORTFor personal use only 3. Short term performance rights incentives
16.4 Statutory performance indicators
During the year ended 28 June 2015 the Group implemented a short
term performance rights incentive plan for selected senior executives
as contemplated by the IPO prospectus. Executives including the
Chief Executive Officer but not the Executive Chairman are eligible
to participate in the annual short term performance rights incentive
plan, subject to the achievement of the Group financial performance
targets. Performance rights provide selected senior executives
the opportunity to acquire shares, subject to meeting the relevant
conditions for vesting, at no cost to the senior executive. 100% of
the annual incentive plan will be assessed by financial measures. The
financial measures used under the plan is the Group’s NBPT result.
This is tested annually after the end of the financial year. The Board
considers NPBT to be an appropriate performance measure as it aligns
the Group’s remuneration philosophy with creating value, and is within
the scope of influence of participants.
The board will review the nature of potential issues of performance
incentives moving forward to reflect market practice and to reflect the
principles underlying the Group’s remuneration policy.
Structure of short term performance rights incentive plan
Feature
Description
Beacon Lighting aims to align executive remuneration to strategic and
business objectives and the creation of shareholder wealth. The table
below shows measures of the Group’s financial performance over the
last two years as required by the Corporations Act 2001 (Cth). However
these measures are not necessarily consistent with measures used
in determining the variable amounts of remunerations awarded to
KMPs. As a consequence there may not always be a direct correlation
between the statutory key performance measures and the variable
remuneration awarded.
Statutory key performance indicators of the group
Profit for the year attributable
to owners of Beacon Lighting
Group Limited ($’000)
Basic earnings per share
(cents)
Dividend payments ($’000)
FY 2015
FY 2014
16,939
11,797
7.88
6,882
2.00
5.49
14,500
1.03
Maximum opportunity
125% of on target cash bonus value
Share Price
Performance metric
Budgeted NPBT
Delivery of STI
Board discretion
100% of STI performance rights award
is provided as an issue of shares
after the financial results have been
audited and approved by the board
The board has discretion to adjust
remuneration outcomes up or down
to prevent any inappropriate reward
outcomes,
reducing
including
down to zero if appropriate
16.3 FY2015 performance and impact on remuneration
Beacon Lightings performance in 2015 remained strong. For the year
ended 28 June 2015, the Group’s financial performance targets were
met and the annual short term cash incentive is expected to be in the
150% range of the on target cash bonus value and the short term
performance rights incentive will be expected to be issued in the range
of 125% of the on target cash bonus value.
16.5 Details of remuneration
The following executives along with the Directors are identified as
key management personnel with the authority and responsibility for
planning, directing and controlling the activities of the Group, directly
and indirectly, during the financial year.
Ian Robinson
Executive Chairman
Glen Robinson Chief Executive Officer
Ian Bunnett
Managing Director – Retail
David Speirs
Chief Financial Officer
Barry Martens
Chief Operating Officer
All of the above executives were employed by Beacon Lighting and were
key management personnel for the entire year ended 28 June 2015 and
year ended 29 June 2014 unless otherwise stated.
20
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only The details of the remuneration of the Directors and other key management personnel for the Beacon Lighting Group Limited and the consolidated entity
for the current and prior financial periods are set out in the following table:
Fixed Remuneration
Variable Remuneration
Cash Salary
& Fees
Non-monetary
benefits
Post
Employement
Super
Contributions
Annual & Long
Service Leave
Cash
Performance
Based
Payment
$
$
$
$
DIRECTORS
I Robinson (Chairman)
2015
2014
158,920
-
17,397
33,808
167,752
1,873
15,312
31,949
G Robinson (Chief Executive Officer)
$
-
-
Share Based
payments
$
Total
-
210,125
-
216,886
2015
2014
194,481
-
19,376
169,647
6,025
15,307
3,673
658
39,954
10,938
268,422
19,222
-
210,859
E Barr (Non-Executive)
2015
2014
101,558
152,281
N Osborne (Non-Executive)
2015
2014
100,000
72,472
M Hanman (Non-Executive)
2015
2014
-
88,073
Total Remuneration Directors
-
-
-
-
-
-
8,442
7,817
-
-
-
8,146
-
-
-
-
-
-
-
-
-
-
-
-
-
-
110,000
160,098
-
-
100,000
72,472
-
-
-
96,219
554,959
-
45,215
37,481
39,954
10,938
688,547
650,225
7,898
46,582
32,607
19,222
-
756,534
2015
2014
EXECUTIVES
I Bunnett (Managing Director – Retail)
2015
2014
198,409
-
23,282
13,836
57,078
15,625
308,230
198,137
1,223
18,889
15,464
27,460
-
261,173
D Speirs (Chief Financial Officer)
2015
2014
176,090
-
22,925
14,145
57,078
15,625
285,863
176,809
2,921
18,660
16,359
27,460
-
242,209
B Martens (Chief Operating Officer)
2015
2014
190,481
-
21,451
13,468
57,078
15,625
192,776
1,869
16,494
8,872
27,460
-
298,103
247.471
Total Remuneration Executives
2015
2014
564,980
-
67,658
41,449
171,234
46,875
892,196
567,722
6,013
54,043
40,695
82,380
-
750,853
21
DIRECTOR’S REPORTFor personal use only 16.6 Share- based Compensation
The number of performance rights over shares in the Group granted to the chief executive officer and other key management personnel during the
current financial period, together with prior period grants which vested during the period is set out below:
Grant
Date
Quantity
Granted
Vest Date
Value at
grant date
$
Vest %
Quantity
Vested
Value
Expensed
this year $
22.8.2014
30,781
22.8.2014
43,973
22.8.2014
43,973
22.8.2014
43,973
162,700
25-Aug-14
25-Aug-15
25-Aug-16
25-Aug-14
25-Aug-15
25-Aug-16
25-Aug-14
25-Aug-15
25-Aug-16
25-Aug-14
25-Aug-15
25-Aug-16
32,813
46,875
46,875
46,875
173,438
33%
10,260
24,165
33%
14,658
34,522
33%
14,658
34,522
33%
14,658
34,522
127,731
G Robinson
I Bunnett
D Speirs
B Martens
Total
The fair value of performance rights granted on 22 August 2014 (grant date) was $1.066, with a final vesting date of 22 August 2016.
All performance rights granted during the current period will vest on the exercise dates above provided the executive remains employed by the Group at
the vesting date. The performance rights have a zero exercise price. Subject to meeting the relevant vesting conditions, shares will be issued at no cost
to the executive. In the event an employee leaves the Group prior to the vesting date the performance rights will lapse.
22
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 16.7 Share holdings
The numbers of ordinary voting shares in the Company held during the financial year by each director of Beacon Lighting Group and other key management
personnel of Beacon Lighting Group, including their personally related parties, are set out below.
Balance at start
of year
Received during
the year1
Purchase of
shares
Sales of shares
Balance at end
of the year
DIRECTORS
I Robinson (Chairman)2
2015
2014
118,595,000
7,329
-
-
118,602,329
-
-
118,595,000
-
118,595,000
G Robinson (Chief Executive Officer)
2015
2014
40,000
10,260
-
-
E Barr (Non-Executive)
2015
2014
N Osborne (Non-Executive)
2015
2014
EXECUTIVES
150,000
-
300,000
-
I Bunnett (Managing Director – Retail)
-
-
-
-
-
40,000
-
150,000
-
300,000
2015
2014
20,000
14,658
-
-
-
20,000
D Speirs (Chief Financial Officer)
2015
2014
30,000
14,658
-
-
-
30,000
B Martens (Chief Operating Officer)
-
-
-
-
-
-
-
-
-
-
2015
2014
Total
2015
2014
24,545
14,658
-
-
-
-
24,545
119,159,545
61,563
-
-
-
119,159,545
-
-
-
1 Shares received during the year were a result of performance rights issued under the STI plan.
2 Heystead Nominees Pty Ltd and other Robinson Family member interests, excluding Glen Robinson.
50,260
40,000
150,000
150,000
300,000
300,000
34,658
20,000
44,658
30,000
39,203
24,545
119,221,108
119,159,545
DIRECTOR’S REPORT
23
For personal use only For personal use only 16.8 Service Agreements
16.9 Voting of shareholders at last year’s annual general meeting
All executives are on employed on terms consistent with the remuneration
framework outlined in this report. Each of the relevant executive
agreements is for a continuing term with but may be terminated by either
party with a required notice period of 12 weeks. These agreements do
not provide for any termination payments other than payment in lieu of
notice.
Beacon Lighting Group received more than 90% of yes votes on its
remuneration report for the 2014 financial year. The Company did not
receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
Signed in accordance with a resolution of Directors
Ian Robinson
Executive Chairman
Melbourne, 19 August 2015
Glen Robinson
Chief Executive Officer
25
DIRECTOR’S REPORTFor personal use only Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Beacon Lighting Group Limited for the year ended 28 June 2015, I
declare that to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Beacon Lighting Group Limited and the entities it controlled during
the period.
Daniel Rosenberg
Partner
PricewaterhouseCoopers
Melbourne
19 August 2015
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
26
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only For personal use only Index to the Financial Statements
Page
Page
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
1 Summary of Significant Accounting Policies
2 Financial Risk Management
3 Segment Information
4 Revenue from Ordinary Activities and Other Revenue
5 Other Income
6 Expenses
7 Income Tax Expense
8 Cash and Cash Equivalents
9 Trade and Other Receivables
10 Inventories
11 Derivative Financial Instruments
12 Other Current Assets
13 Property, Plant and Equipment
14 Deferred Tax Assets
15 Intangible Assets
16 Trade and Other Payables
29
30
31
32
33
39
42
42
42
43
44
45
45
46
47
47
48
49
50
51
17 Current Borrowings
18 Current Provisions
19 Current Tax Liabilities
20 Non Current Borrowings
21 Non Current Provisions
22 Contributed Equity
23 Reserves and Retained Profits
24 Dividends
25 Key Management Personnel Disclosures
26 Share Based payments
27 Earnings Per Share
28 Remuneration of Auditors
29 Contingencies
30 Commitments
31 Related Party Transactions
32 Subsidiaries
33 Events Occurring After the Reporting Period
34 Reconciliation of Profit After Income Tax to
Net Cash Inflow from Operating Activities
35 Non-Cash Investing and Financing Activities
36 Critical Accounting Estimates
37 Parent Entity Financial Information
38 Deed of Cross Guarantee
52
52
53
54
54
55
56
57
58
58
59
60
60
60
61
63
63
64
64
64
65
66
28
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014
Beacon Lighting Group and its controlled entities
Consolidated Entity
Notes
Revenue from ordinary activities
Sale of goods
Other revenue
Other income
Expenses
Cost of sales of goods
Other expenses from ordinary activities
Marketing
Selling and distribution
General and administration
Finance costs
Profit before income tax
Income tax expense
Profit for the period attributable to the members of the parent entity
Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of derivatives
Exchange differences on translation of foreign operations
Income tax relating to these items
Other comprehensive income for the period, net of tax
Total comprehensive income for the period attributable to the members of
the parent entity
Earnings per share
Basic earnings per share
Diluted earnings per share
4
4
4
5
6
6
7
23(a)
23(a)
27
27
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying Notes.
FY 2015
$’000
179,386
3,743
183,129
206
FY 2014
$’000
150,338
4,181
154,519
1,340
(63,345)
(53,678)
(11,004)
(67,508)
(16,436)
(1,210)
23,832
(6,893)
16,939
767
613
(414)
966
17,905
Cents
7.88
7.87
(9,629)
(60,309)
(14,177)
(1,009)
17,057
(5,260)
11,797
(474)
-
143
(331)
11,466
Cents
5.49
5.49
29
FINANCIAL STATEMENTSFor personal use only CONSOLIDATED BALANCE SHEET
As at 28 June 2015 and as at 29 June 2014
Beacon Lighting Group and its controlled entities.
Consolidated Entity
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Provisions
Derivative financial instruments
Current tax liabilities
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other reserves
Retained earnings
Total equity
Notes
FY 2015
$’000
FY 2014
$’000
8
9
10
11
12
13
14
15
16
17
18
11
19
20
21
22
23(a)
23(b)
11,779
7,017
44,656
299
698
64,449
19,121
5,481
5,085
29,687
94,136
15,686
18,090
4,764
-
2,572
41,112
1,278
2,340
3,618
44,730
49,406
62,647
(42,847)
29,606
49,406
11,427
8,217
32,194
-
365
52,203
16,818
3,832
4,125
24,775
76,978
16,566
13,592
4,236
238
1,147
35,779
774
2,221
2,995
38,774
38,204
62,565
(43,910)
19,549
38,204
The above consolidated balance sheet should be read in conjunction with the accompanying Notes.
30
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014
Beacon Lighting Group and its controlled entities.
Consolidated Entity
Notes
Balance as at 30 June 2014
Profit for the year
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners:
Issue of shares to employees
Employee share scheme
Dividends provided for or paid
Total contributions by and distributions to owners
Balance as at 28 June 2015
Balance as at 1 July 2013
Profit for the year
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs & tax
Non controlling interests in acquired subsidiaries
Dividends provided for or paid
Total contributions by and distributions to owners
Balance as at 29 June 2014
23(a)
22
23(a)
24
22
23(a)
24
Contributed
equity
$’000
Reserves
$’000
62,565
(43,910)
-
-
-
82
-
-
82
-
966
966
-
97
-
97
62,647
(42,847)
2,150
-
-
-
(692)
-
(331)
(331)
Retained
earnings
$’000
19,549
16,939
-
Total
equity
$’000
38,204
16,939
966
16,939
17,905
-
-
(6,882)
(6,882)
29,606
41,055
11,797
-
82
97
(6,882)
(6,703)
49,406
42,513
11,797
(331)
11,797
11,466
60,415
-
-
60,415
-
-
60,415
62,565
(42,887)
(18,803)
(61,690)
-
(14,500)
(14,500)
(42,887)
(33,303)
(15,775)
(43,910)
19,549
38,204
The above consolidated statement of changes in equity should be read in conjunction with the accompanying Notes.
31
FINANCIAL STATEMENTSFor personal use only CONSOLIDATED STATEMENT OF CASH FLOWS
For the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014
Beacon Lighting Group and its controlled entities
Consolidated Entity
Notes
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Interest received
Borrowing costs
Income taxes paid
Net cash inflow from operating activities
34
Cash flows from investing activities
Payments for acquisitions
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Repayment of loans from related parties
Net cash (outflow) from investing activities
Cash flows from financing activities
Repayment of borrowings (net)
Dividends paid to Company's shareholders
Proceeds from share capital raised
Costs associated with share capital raised
Payment to non-controlling interests
Net cash inflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of period
The above consolidated statement of cash flows should be read in conjunction with the accompanying Notes.
24
8
FY 2015
$’000
201,208
(184,439)
91
(1,210)
(6,566)
9,084
(1,400)
(3,986)
75
-
(5,311)
3,461
(6,882)
-
-
-
(3,421)
352
11,427
11,779
FY 2014
$’000
167,236
(144,612)
117
(1,009)
(6,026)
15,706
(790)
(3,620)
26
9,200
4,816
(908)
(14,500)
63,854
(1,289)
(63,854)
(16,697)
3,825
7,602
11,427
32
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 1. Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of this
consolidated financial report is set out below. These policies have
been consistently applied to all the periods presented, unless otherwise
stated. The financial report is for the consolidated entity consisting of
Beacon Lighting Group Limited and its subsidiaries.
(a) Basis of Preparation
This general purpose financial report has been prepared in accordance
with Australian Accounting Standards and interpretations issued by
the Australian Accounting Standards Board and the Corporations Act
2001 (Cth). Beacon Lighting Group Limited is a for-profit entity for the
purpose of preparing the financial report.
Beacon Lighting Group Limited operates within a retail financial period.
The current financial period was a 52 week retail period ended on the 28
June 2015 (2014: 52 week period ending 29 June 2014). This treatment
is consistent with section 323D of Corporations Act 2001 (Cth).
IFRS 15 Revenue from contracts with customers
The AASB has issued a new standard for the recognition of revenue.
This will replace AASB 118 which covers contracts for goods and
services and AASB 111 which covers construction contracts.
The new standard is based on the principle that revenue is recognised
when control of a good or service transfers to a customer — so the
notion of control replaces the existing notion of risks and rewards.
The standard permits a modified retrospective approach for the
adoption. Under this approach entities will recognise transitional
adjustments in retained earnings on the date of initial application (eg 1
July 2017), ie without restating the comparative period. They will only
need to apply the new rules to contracts that are not completed as of
the date of initial application.
At this stage Beacon Lighting Group Limited is of the view that the
new rules will not have a significant impact on the Group’s financial
statements. The Group will make more detailed assessments of the
impact over the next twelve months.
(i) New and amended standards adopted
(iii) Compliance with IFRS
The Group has applied the following standards and amendments
applicable for the first time for the June 2015 annual report:
• AASB 2013-3 Amendments to AASB 136 — Recoverable Amount
Disclosures for Non-Financial Assets
• AASB 2013-4 Amendments to Australian Accounting Standards —
Novation of Derivatives and Continuation of Hedge Accounting
• AASB 2014-1 Amendments to Australian Accounting Standards
The adoption of these standards did not have any impact on the current
period or any prior period and is not likely to affect future periods.
(ii) Standards and interpretations not yet adopted
ASB9 Financial Instruments
AASB 9 addresses the classification, measurement and derecognition
of financial assets and financial liabilities and introduces new rules for
hedge accounting.
In December 2014, the AASB made further changes to the classification
and measurement rules and also introduced a new impairment model.
These latest amendments now complete the new financial instruments
standard.
Following the changes approved by the AASB in December 2014,
the Group no longer expects any impact from the new classification,
measurement and derecognition rules on the Group’s financial assets
and financial liabilities.
There will also be no impact on the Group’s accounting for financial
liabilities, as the new requirements only affect the accounting for
financial liabilities that are designated at fair value through profit or loss
and the Group does not have any such liabilities.
The new hedging rules align hedge accounting more closely with the
Group’s risk management practices. As a general rule it will be easier
to apply hedge accounting going forward as the standard introduces a
more principles-based approach. The new standard also introduces
expanded disclosure requirements and changes in presentation.
The new impairment model is an expected credit loss (ECL) model which
may result in the earlier recognition of credit losses. The Group has
not yet assessed how its own hedging arrangements and impairment
provisions would be affected by the new rules.
The consolidated financial report of the Beacon Lighting Group Limited
Group also complies with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
(iv) Historical cost convention
This financial report has been prepared in accordance with the
historical cost convention. Comparative information is reclassified
where appropriate to enhance comparability.
(v) Critical accounting estimates
The preparation of 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.
Refer to Note 36 Critical accounting estimates for detailed explanation
of items requiring assumptions and estimates.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period.
(b) Comparative Financial Information
Unless otherwise stated, the accounting policies adopted are consistent
with those of the previous year. Comparative information is reclassified
where appropriate to enhance comparability and provide more appropriate
information to users.
(c) Principles of Consolidation
The consolidated financial report incorporates the assets and liabilities
of all subsidiaries of Beacon Lighting Group Limited (‘Group’ or ‘parent
entity’) as at 28 June 2015 and the results of all subsidiaries for the
period then ended. Beacon Lighting Group Limited and its subsidiaries
together are referred to in this financial report as the Group or the
consolidated entity.
Subsidiaries are all 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 deconsolidated from the
date that control ceases.
33
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only The acquisition method of accounting is used to account for business
combinations by the Group (refer to Note 1(i)).
Intercompany
transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence
of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Where control of an entity is obtained during a financial period, its
results are included in the consolidated statement of comprehensive
income from the date on which control commences. Where control of
an entity ceases during a financial period its results are included for that
part of the period during which control existed.
Investments in subsidiaries are accounted for at cost in accounting
records of Beacon Lighting Group Limited.
The Group treats transactions with non-controlling shareholders that
do not result in a loss of control as transactions with equity owners of
the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling
shareholders to reflect their relative interest in the subsidiary. Any
difference between the amount of the adjustment to non-controlling
shareholders and any consideration paid or received is recognised in
a seperate reserve within equity attributable to the owners of Beacon
Lighting Group Limited.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has
been identified as the Chief Executive Officer.
(e) Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial report of each of the Group’s entities are
measured using the currency of the primary economic environment in
which the entity operates (‘the functional currency’). The consolidated
financial report is presented in Australian dollars, which is Beacon
Lighting Group Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year end exchange rates
of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss, except when they are deferred in equity as
qualifying cash flow hedges and qualifying net investment hedgeses.
(iii) Specific commitments
Hedging is undertaken in order to avoid or minimise possible adverse
financial effects of movements in exchange rates. Gains or costs arising
upon entry into a hedging transaction intended to hedge the purchase
or sale of goods and services, together with subsequent exchange
gains or losses resulting from those transactions are deferred in the
consolidated statement of comprehensive income from the inception
of the hedging transaction up to the date of the purchase or sale and
included in the measurement of the purchase or sale. Any gains or
losses arising on the hedging transaction after the recognition of the
hedge purchase or sale are included in the consolidated statement of
comprehensive income.
In the case of hedges of monetary items, exchange gains or losses are
brought to account in the financial period in which the exchange rates
change. Gains or costs arising at the time of entering into such hedging
transactions are brought to account in the consolidated statement of
comprehensive income over the lives of the hedges.
(iv) Group companies
The results and financial position of foreign operations (none of which
has the currency of a hyper inflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities for each balance sheet presented are translated
at the closing rate at the date of that balance sheet;
• Income and expenses for each income statement and statement of
comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions), and
• All
resulting exchange differences are
recognised
in other
comprehensive income.
On consolidation, exchange differences arising from the translation
of any net investment in foreign entities, and of borrowings and other
financial instruments designated as hedges of such investments, are
recognised in other comprehensive income. When a foreign operation
is sold or any borrowings forming part of the net investment are repaid,
the associated exchange differences are reclassified to profit or loss, as
part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a
foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
(f) Revenue Recognition
Revenue is measured at the fair value of the consideration received or
receivable. Amounts disclosed as revenue are net of returns, trade
allowances, rebates and amounts collected on behalf of third parties.
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of
ownership have been transferred to the buyer and the costs incurred or
to be incurred in respect of the transaction can be measured reliably.
Risks and rewards are considered passed to the buyer at the time of
control of the goods is passed to the customer. Revenue recognised
equals the fair value of the consideration received or receivable.
(ii) Trust distribution income
Trust distribution revenue is recognised when the right to receive a
distribution has been established.
(iii) Interest income
Interest income is recognised using the effective interest method.
When a receivable is impaired, the Group reduces the carrying amount
to its recoverable amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument, and
continues unwinding the discount as interest income. Interest income
on impaired loans is recognised using the original effective interest rate.
34
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only (g) Income Tax
The income tax expense or revenue for the period is the tax payable on
the current period’s taxable income based on the applicable income tax
rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences
at the tax rates expected to apply when the assets are recovered or
liabilities are settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. The relevant tax rates are
applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is
made for certain temporary differences arising from the initial recognition
of an asset or a liability. No deferred tax asset or liability is recognised in
relation to these temporary differences if they arose in a transaction, other
than a business combination, that at the time of the transaction did not
affect either accounting profit or taxable profit or loss.
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.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred tax balances related to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and tax bases of investments
in foreign operations where the Group is able to control the timing of
the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Current and deferred tax is recognised in profit or loss, except to the
extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Beacon Lighting Group Limited and its wholly-owned Australian controlled
entities have not implemented the tax consolidation legislation.
(h) Leases
Leases of property, plant and equipment where the Group, as lessee,
has substantially all the risks and rewards of ownership are classified
as non current assets (Note 13). Finance leases are capitalised at the
lease’s inception at the fair value of the leased property or, if lower, the
present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in other short-term and
long-term payables. Each lease payment is allocated between the liability
and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The property, plant and
equipment acquired under finance leases is depreciated over the asset’s
useful life or over the shorter of the asset’s useful life.
Leases in which a significant portion of the risks and rewards of
ownership are not transferred to the Group as lessee are classified as
operating leases (Note 30). Payments made under operating leases (net
of any incentives received from the lessor) are charged to profit or loss on
a straight-line basis over the period of the lease.
(i) Business Combinations
The acquisition method of accounting is used to account for all business
combinations, regardless of whether equity instruments or other assets
are acquired. The consideration transferred for the acquisition of a
subsidiary comprises the fair values of the assets transferred, the
liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any asset or
liability resulting from a contingent consideration arrangement and
the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair
values at the acquisition-date. On an acquisition-by-acquisition basis,
the Group recognises any non-controlling interest in the acquiree either
at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s net identifiable assets.
The excess of the consideration transferred and the amount of any
non-controlling interest in the acquiree over the fair value of the net
identifiable assets acquired is recorded as goodwill. If those amounts
are less than the fair value of the net identifiable assets of the subsidiary
acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the
amounts payable in the future are discounted to their present value as at
the date of exchange. The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar borrowing could be
obtained from an independent financier under comparable terms and
conditions.
Contingent consideration is classified either as equity or a financial
liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in profit
or loss.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer’s previously held equity interest in the
acquire is remeasured to fair value at the acquisition date. Any gains
or losses arising from such remeasurement are recognised in profit or
loss.
(j) Impairment of Assets
Goodwill and intangible assets that have an indefinite useful life are not
subject to amortisation and are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that they might
be impaired. Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less cost of
disposal and value-in-use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that suffered an impairment
are reviewed for possible reversal of the impairment at the end of each
reporting period.
(k) Cash and Cash Equivalents
For the purpose of presentation in the consolidated statement of cash
flows, cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, other short-term, highly liquid investments
35
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 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, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities in the consolidated balance sheet.
profit or loss within other income or general and administration expenses.
Amounts accumulated in equity are reclassified to profit or loss in the
periods when the hedged item affects profit or loss (for instance when the
forecast purchase of inventory that is hedged takes place).
(l) Trade Receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost, less provision for doubtful debts. Trade
receivables are due for settlement no more than 30-60 days from the
date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis.
Debts which are known to be uncollectible are written off. A provision
for doubtful receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due according to
the original terms of receivables. The amount of the provision is the
difference between the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the effective interest rate.
The amount of the provision is recognised in the consolidated statement
of comprehensive income.
The amount of the impairment loss is recognised in profit or loss within
general and administration expenses. When a trade receivable for which
an impairment allowance had been recognised becomes uncollectible
in a subsequent period, it is written off against the allowance account.
Subsequent recoveries of amounts previously written off are credited
against other expenses in profit or loss.
(m) Inventories
Finished goods are stated at the lower of cost and net realisable value.
Cost comprises direct materials, and an appropriate proportion of
variable and fixed overhead expenditure.
Costs are assigned to individual items of inventory on the basis of
weighted average costs. Net realisable value is the estimated selling
price in the ordinary course of business less the estimated costs
necessary to make the sale.
(n) Derivatives and Hedging Activities
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured to their
fair value at the end of each reporting period. The accounting for
subsequent changes in fair value depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item
being hedged.
The Group documents at the inception of the hedging transaction the
relationship between hedging instruments and hedged items, as well
as its risk management objective and strategy for undertaking various
hedge transactions. The Group also documents its assessment, both
at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions have been and will continue to
be highly effective in offsetting changes in fair values or cash flows of
hedged items.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that
are designated and qualify as cash flow hedges is recognised in other
comprehensive income and accumulated in reserves in equity. The gain
or loss relating to the ineffective portion is recognised immediately in
The gain or loss relating to the effective portion of forward foreign
exchange contracts hedging imported inventory purchases is recognised
in profit or loss within other income or general and administration
expenses. The deferred amounts are ultimately recognised in profit or
loss as cost of goods sold in the case of inventory.
(o) Property, Plant and Equipment
All plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Cost may also include transfers from equity
of any gains/losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. The
carrying amount of any component accounted for as a separate asset
is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are
incurred.
Depreciation is calculated using the Diminishing Value (DV) method to
allocate their cost or revalued amounts, net of their residual values, over
their estimated useful lives at the following depreciation rates.
• Furniture, Fittings & Equipment 10%-33%
• Motor vehicles 20%
Diminishing Value method of depreciation has been chosen by Beacon
Lighting in order to more accurately reflect the benefits that Beacon
Lighting receive from the store fitting assets. The use of the store
fittings extends throughout the life of the store and the most significant
benefits from the use of those assets occur in the early years in the
life of the assets and gradually reduces over time. For this reason, the
majority of the Beacon Lighting shop fitting assets are depreciated on
the basis of 10% per annum on a Diminishing Value basis.
The assets’ residual values and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds
with carrying amount. These are included in profit or loss.
(p) Intangible Assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the
fair value of the Group’s share of the net identifiable assets of the
acquired subsidiary/associate at the date of acquisition. Goodwill on
acquisitions of subsidiaries is included in intangible assets. Goodwill is
not amortised. Instead, goodwill is tested for impairment annually, or
more frequently if events or changes in circumstances indicate that it
might be impaired, and is carried at cost less accumulated impairment
losses. Gains and losses on the disposal of an entity include the
36
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only carrying amount of goodwill relating to the entity sold.
(ii) Other long-term employee benefit obligations
Goodwill is allocated to cash-generating units for the purpose of
impairment testing.
(ii) Patents, Trademarks and Other Rights
Patents, Trademarks and Other Rights have a finite useful life and
are carried at cost less accumulated amortisation. Amortisation is
calculated using the straight-line method to allocate the cost of the
patents, trademarks and other rights over their useful life of 25 years.
(q) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the
group prior to the end of financial year which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition.
Trade and other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting period. They
are recognised initially at their fair value and subsequently measured at
amortised cost using the effective interest method.
(r) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred. Borrowings are subsequently measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and
the redemption amount is recognised in the consolidated statement
of comprehensive income over the period of the borrowings using the
effective interest method.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
(s) Provisions
Provisions for legal claims and product warranties are recognised when
the group has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources will be required
to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the
class of obligations as a whole. A provision is recognised even if the
likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of managements best
estimate of the expenditure required to settle the present obligation at
the end of the reporting period.
(t) Employee Benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that
are expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service are recognised
in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
The liabilities for long service leave and annual leave are not expected to
be settled wholly within 12 months after the end of the period in which
the employees render the related service. They are therefore recognised
in the provision for employee benefits and measured as the present value
of expected future payments to be made in respect of services provided
by employees up to the end of the reporting period using the projected
unit credit method. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end
of the reporting period of corporate bonds with terms and currencies that
match, as closely as possible, the estimated future cash outflows.
Re-measurements as a result of experience adjustments and changes in
actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet
if the entity does not have an unconditional right to defer settlement for
at least twelve months after the reporting period, regardless of when the
actual settlement is expected to occur.
(iii) Share based payments
Share-based compensation benefits are provided to employees via the
Beacon Lighting Short Term Incentive Plan. Information relating to this
scheme is set out in the Remuneration Report and Note 26. The fair
value of performance rights granted under the plan is recognised as an
employee benefit expense over the period during which the employees
become unconditionally entitled to the rights with a corresponding
increase in equity. The total amount to be expensed is determined
by reference to the fair value of the rights granted, which includes any
market performance conditions and the impact of any non-vesting
conditions but excludes the impact of any service and non-market
performance vesting conditions. Non-market vesting conditions are
included in assumptions about the number of rights that are expected
to vest which are revised at the end of each reporting period. The
impact of the revision to original estimates, if any, is recognised in the
consolidated statement of comprehensive income, with a corresponding
adjustment to equity.
The fair value is measured at grant date and the expense recognised over
the life of the plan. The fair value is independently determined using a
Black-Scholes pricing model that takes into account the exercise price,
the term of the rights, 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 rights.
(u) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of
associated GST, unless the GST incurred is not recoverable from the
taxation authority. In this case it is recognised as part of the cost of
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 taxation authority is included with other receivables or
payables in the consolidated balance sheet.
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 taxation authority, are presented as
operating cash flows.
37
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only (z) Rounding Amounts
The Group is of a kind referred to in ASIC Class Order 98/100, and in
accordance with that Class Order, amounts in the financial statements
have been rounded off to the nearest thousand dollars, or in certain
cases, to the nearest dollar.
(aa) Parent Entity Financial Information
The financial information for the parent entity, Beacon Lighting Group
Limited, disclosed in Note 37 has been prepared on the same basis as
the consolidated financial report, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial
report of Beacon Lighting Group Limited.
(v) Store Opening Costs
Non-capital costs associated with the setup of a new store are expensed
in the period in which they are incurred.
(w) Dividends
Provision is made for the amount of any dividends declared, determined
or publicly recommended by the Directors on or before the end of the
financial period but not distributed at balance date.
(x) Contributed Equity
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.
(y) Earnings Per Share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after income
tax attributable to members of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial period,
adjusted for bonus elements in ordinary shares issued during the period.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figure 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 (including performance rights) and the
weighted average number of shares assumed to have been issued for
no consideration in relation to dilutive potential ordinary shares.
38
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 2. Financial Risk Management
The consolidated entity is exposed to a variety of financial risks comprising:
a) Market risk;
b) Credit risk; and
c) Liquidity risk
Risk management is carried out under policies approved by the Chief Executive Officer.
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency 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 foreign exchange contracts and interest rate swaps to hedge certain
risk exposures. 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 foreign exchange risks and
aging analysis for credit risk.
The Group holds the following financial instruments:
Consolidated Entity
Financial Assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Financial Liabilities
Trade and other payables
Borrowings
Derivative financial instruments
(a) Market risk
Foreign exchange risk
FY 2015
$’000
FY 2014
$’000
11,779
7,017
299
19,095
15,686
19,368
-
35,054
11,427
8,217
-
19,644
16,566
14,366
238
31,170
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar.
Foreign exchange risk arises when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency
that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
The Group hedges its foreign exchange risk exposure arising from future commercial transactions and recognised assets and liabilities using forward
contracts. The Group has a policy of hedging 100% of the Group’s inventory which is purchased in USD and sold in AUD. The Group can also lock in a
forward position for this foreign exchange exposure for a period of up to 12 months.
Consolidated Entity
Forward exchange and interest rate swap contracts - buy cash flow hedges
FY 2015
$’000
20,237
FY 2014
$’000
19,578
39
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only Interest rate risk
The Group’s main interest rate risk arises from short terms borrowings with variable rates, which expose the group to cash flow interest rate risk. The Group
manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps.
The Group’s exposure to foreign currency and interest rate risk at the end of the reporting period, expressed in Australian dollar, was as follows:
Group sensitivity
At 28 June 2015 100% of Beacon Lighting Group’s short term borrowings are hedged using forward exchange contracts and interest rate swaps. Therefore
any movements in the Australian dollar against the US dollar or interest rates would have no impact on the Group’s pre- tax profit or equity.
Therefore a sensitivity analysis has not been performed.
(b) Credit risk
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, favorable derivative financial instruments and deposits with
banks as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. Individual credit limits
are set based on internal or external ratings in accordance with limits set by the Board. The compliance with credit limits by wholesale and retail customers
is regularly monitored by line management. Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk.
There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions.
An analysis of trade receivables is disclosed in Note 9.
(c) Liquidity risk
Financing arrangements
The Group and parent entity had access to the following financing facilities at the end of each reporting period:
Consolidated Entity
Floating rate – Total facilities
Overdraft
Trade finance facility
Asset finance facility
Floating rate – Total undrawn facilities
Overdraft
Trade finance facility
Asset finance facility
FY 2015
$’000
FY 2014
$’000
500
23,750
3,500
500
6,529
1,353
500
23,750
3,500
500
7,693
2,539
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings as follows:
(a) based on their contractual maturities:
(i) all non-derivative financial liabilities, and
(ii) net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the
cash flows.
(b) based on the remaining period to the expected settlement date:
(i) derivative financial liabilities for which the contractual maturities are not essential for an understanding of the timing of the cash flows.
40
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact
of discounting is not significant.
Contractual maturities of financial liabilities:
Consolidated Entity
At 28 June 2015
Non-derivatives
Trade and other payables
Borrowings
Finance lease liabilities
Total non-derivatives
Derivatives
Net settled (cash flow hedges)
At 29 June 2014
Non-derivatives
Trade and other payables
Borrowings
Finance lease liabilities
Total non-derivatives
Derivatives
Net settled (cash flow hedges)
Less than 6
months
$’000
6 - 12 months
$’000
Between
1 and 5 years
$’000
Over 5 years
$’000
Total
contractual
cash flows
$’000
Carrying amount
(assets) liabilities
$’000
15,686
17,221
-
32,907
(299)
16,566
13,028
-
29,594
-
-
869
869
-
-
-
564
564
-
-
1,278
1,278
-
-
-
774
774
238
-
-
-
-
-
-
-
-
-
-
-
-
15,686
17,221
2,147
35,054
15,686
17,221
2,147
35,054
(299)
(299)
16,566
13,028
1,338
30,932
16,566
13,028
1,338
30,932
238
238
(d) Fair Value measurements
For information about the methods and assumptions used in determining the fair value of derivatives please refer to Note 11.
Fair value hierarchy
AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2); and
c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The following table presents the Groups’ financial assets and financial liabilities measured and recognised at fair value at 28 June 2015, on a recurring basis.
At 28 June 2015
Derivatives used for hedging - Net Position
Level 2
$’000
(299)
Total
$’000
(299)
41
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only The fair value of financial instruments that are not traded in an active market (for example, over–the–counter derivatives) is determined using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
All of the resulting fair value adjustments are included in level 2.
There are no financial assets and liabilities in Level 1 and Level 3, and there are no transfers between the levels.
3. Segment Information
The chief operating decision maker for Beacon Lighting Group Limited and its controlled entities (the Group), is the Chief Executive Officer (CEO). The
Group determines operating segments based on information provided to the CEO in assessing performance and determining the allocation of resources
with the Group. Consideration is given to the manner in which products are sold, nature of the products supplied, the organisational structure and the
nature of customers.
Reportable segments are based on the aggregated operating segments determined by the manner in which products are sold, similarity of products,
nature of the products supplied, the nature of customers and the methods used to distribute the product. The Group purchases goods in USD for sales
into Australia. The Group’s one reportable segment is the selling of lighting, fans and energy efficient products in the Australian market.
The total of the reportable segments’ revenue, profit, assets and liabilities, is the same as that of the Group as a whole and as disclosed in the consolidated
statement of comprehensive income and consolidated statement of financial position
4. Revenue from Ordinary Activities and Other Revenue
FY 2015
$’000
FY 2014
$’000
179,386
150,338
3,543
200
3,743
3,859
322
4,181
183,129
154,519
FY 2015
$’000
91
33
82
206
FY 2014
$’000
117
1,162
61
1,340
Consolidated Entity
(a) From ordinary activities
Sale of goods
(b) Other revenue
Franchise fees
Sundry revenue
5. Other Income
Consolidated Entity
Interest
Customs duty refund
Other income
42
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only
6. Expenses
Consolidated Entity
(a) Profit before income tax includes the following specific expenses:
Depreciation
Plant and equipment
Motor vehicles
Amortisation
Patents, trademarks and other rights
Finance costs
Interest and finance charges paid/payable
Net loss on disposal of property, plant and equipment
Rental expense relating to operating leases
Minimum lease payments
Employee benefits
(b) Net foreign exchange gains and losses
FY 2015
$’000
FY 2014
$’000
2,068
265
20
1,210
815
15,444
41,055
1,758
242
20
1,009
143
13,827
35,357
Net foreign exchange (gains)/losses recognised in profit before income tax for the period
(as either other income or expense)
43
(134)
(c) Individually significant items
Profit for the year includes the following items that are significant because of their nature, size or
incidence
Other income – customs import duty refund
Expense incurred in the collection of customs import duty refund
Initial recognition of warranty provision expense
-
-
-
1,162
(274)
(1,038)
43
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 7. Income Tax Expense
Consolidated Entity
(a) Income tax expense
Current tax
Deferred tax
Adjustments for current tax of prior periods
Deferred income tax (revenue) included in income tax expense comprises: (Note 14)
Decrease (increase) in deferred tax assets
(Decrease) increase in deferred tax liabilities
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30.0% (2014 – 30.0%)
Tax effect of amounts which are not deductible (taxable)in calculating taxable income:
Write off deferred tax assets relating to prior year losses
Tax effect of prior years franchise agreement termination fees
Entertainment
Sundry items
Adjustments for income tax expense of prior periods
Income tax expense
(c) Aggregate amounts of $29,000 deferred tax arose in the reporting period were not
recognised in net profit or other comprehensive income but directly credited to equity
(Note 14).
FY 2015
$’000
FY 2014
$’000
8,093
(1,200)
-
6,893
(1,193)
(7)
(1,200)
23,832
7,150
355
(755)
19
124
6,893
-
6,893
5,913
(813)
160
5,260
(122)
(691)
(813)
17,057
5,117
-
-
14
15
5,146
114
5,260
44
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 8. Cash and Cash Equivalents
Consolidated Entity
Cash at bank and in hand
Deposits at call (a)
(a) Classification as cash equivalents
FY 2015
$’000
11,579
200
11,779
FY 2014
$’000
10,177
1,250
11,427
Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24
hours notice with no loss of interest.
Risk exposure
The Group’s and the parent entity’s exposure to interest rate risk is discussed in Note 2.
9. Trade and Other Receivables
Consolidated Entity
Trade receivables (a)
Provision for impairment of receivables (b)
Net amounts receivable from customers
Other debtors (c)
(a) Aging of trade receivables
Trade receivables ageing analysis at period end is:
Consolidated Entity
Not past due
Past due 31-60 days
Past due 61-90 days
Past due more than 91 days
FY 2015
$’000
6,856
(239)
6,617
400
7,017
FY 2015
$’000
5,167
825
470
394
6,856
FY 2014
$’000
7,368
(178)
7,190
1,027
8,217
FY 2014
$’000
6,198
671
277
222
7,368
45
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only (b) Provision for impairment of receivables
Trade receivables are non-interest bearing with 30 days end of month terms. An impairment loss is recognised when there is objective evidence that an
individual trade receivable is impaired. A provision against impairment for the amount of $239,228 (2014: $177,751) has been raised against the balance
of trade receivables for 2015. The impairment losses have been included within expenses in the consolidated statement of comprehensive income. Trade
receivables that are not impaired are largely expected to be received within trading terms or shortly thereafter.
Movements in the provision for impairment of receivables are as follows:
Consolidated Entity
Opening balance
Provision for impairment recognised during the year
Receivables written off during the year as uncollectable
Closing balance
(c) Other debtors
FY 2015
$’000
FY 2014
$’000
178
104
(43)
239
213
(22)
(13)
178
These amounts generally arise from transactions outside the usual operating activities of the Group. Interest may be charged at commercial rates where
the terms of repayment exceed six months. Collateral is not normally obtained.
Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign currency risk and interest rate risk in relation to trade and other receivables is provided in Note 2.
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of receivables mentioned above. Refer to Note
2 for more information on the risk management policy of the Group and the credit quality of the entity’s trade receivables.
10. Inventories
Consolidated Entity
Inventory at lower of cost and net realizable value
Goods in transit - at cost
FY 2015
$’000
42,392
2,264
44,656
FY 2014
$’000
29,622
2,572
32,194
Inventory expense
Inventories recognised as expense during the 52 week period ended 28 June 2015 and included in cost of sales of goods amounted to $63,023,378
(2014: $53,274,131).
Write-downs of inventories to net realisable value recognised as an expense during the 52 week period ended 28 June 2015 amounted to $936,417
(2014: $511,460).
46
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 11. Derivative Financial Instruments
Consolidated Entity
Derivatives used for hedging - Net Position
The Group’s risk exposures are provided in Note 2.
Forward exchange contracts and interest rate swaps– cash flow hedges
FY 2015
$’000
299
FY 2014
$’000
(238)
The Group purchases products in US currency. In order to protect against exchange rate movements, the Group has entered into forward exchange
contracts to purchase US dollars and an interest rate swap to hedge against interest rate fluctuations.
These contracts are hedging highly probable forecasted purchases for the ensuing financial year. The contracts are timed to mature when payments for
major purchases of inventory are scheduled to be made.
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income. When
the cash flows occur, the group adjusts the initial measurement of the component recognised in the balance sheet by removing the related amount from
other comprehensive income.
During the year ended 28 June 2015 there were no gains or losses (2014 – $0) recognised in profit or loss for the ineffective portion of these hedging
contracts.
12. Other Current Assets
Consolidated Entity
Prepayments and other current assets
FY 2015
$’000
698
FY 2014
$’000
365
47
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only Furniture, fittings
and equipment
$’000
Vehicles
$’000
22,441
(9,504)
12,937
12,937
4,555
(110)
(1,758)
15,624
27,037
(11,413)
15,624
15,624
5,008
(763)
(2,068)
17,801
31,282
(13,481)
17,801
2,471
(1,383)
1,088
1,088
407
(59)
(242)
1,194
2,819
(1,625)
1,194
1,194
519
(128)
(265)
1,320
3,210
(1,890)
1,320
Total
$'000
24,912
(10,887)
14,025
14,025
4,962
(169)
(2,000)
16,818
29,856
(13,038)
16,818
16,818
5,527
(891)
(2,333)
19,121
34,492
(15,371)
19,121
13. Property, Plant and Equipment
Consolidated Entity
At 30 June 2013
Cost
Accumulated depreciation
Net book amount
Year ended 29 June 2014
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 29 June 2014
Cost
Accumulated depreciation
Net book amount
Year ended 28 June 2015
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 28 June 2015
Cost
Accumulated depreciation
Net book amount
48
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 14. Deferred Tax Assets
Consolidated Entity
Gross Deferred Tax Assets
The balance comprises temporary differences attributable to:
Employee benefits
Inventory
Franchise agreement termination fees
Debtor provision
Fixed assets
Tax losses
IPO capitalized expenses
Marketing fund
Other provisions/accruals
Total deferred tax assets
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
Gross Deferred Tax Liabilities
The balance comprises temporary differences attributable to:
Derivatives
Other accruals and provisions
Total deferred tax liabilities
Deferred tax liabilities expected to be settled within 12 months
Deferred tax liabilities expected to be settled after more than 12 months
Movements in Net Deferred Tax Assets
Opening balance
Charged/(credited) to the consolidated statement of comprehensive income (Note 7)
Charged/(credited) amounts recognised on acquisitions
Charged/(credited) amounts recognised directly in equity
Net deferred tax assets
FY 2015
$’000
FY 2014
$’000
1,657
1,109
940
72
274
-
314
642
535
5,543
4,328
1,215
5,543
-
62
62
62
-
62
3,832
1,200
420
29
5,481
1,107
446
-
54
-
504
552
442
796
3,901
1,484
2,417
3,901
-
69
69
69
-
69
2,467
813
-
552
3,832
49
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only Goodwill
$’000
Patents,trademarks
and other rights
$’000
Other
$’000
Total
$’000
3,035
790
-
3,825
3,825
-
-
3,825
3,825
980
-
4,805
4,805
-
-
4,805
320
-
(20)
300
-
500
(200)
300
300
-
(20)
280
-
500
(220)
280
1
-
(1)
-
1
-
(1)
-
-
-
-
-
-
-
-
-
3,356
790
(21)
4,125
3,826
500
(201)
4,125
4,125
980
(20)
5,085
4,805
500
(220)
5,085
15. Intangible Assets
Consolidated Entity
Year ended 29 June 2014
Opening net book amount
Additions
Amortisation charge
Closing net book amount
At 29 June 2014
Cost
Valuation
Accumulated amortisation and
impairment
Net book amount
Year ended 28 June 2015
Opening net book amount
Additions
Amortisation charge for the year
Closing net book amount
At 28 June 2015
Cost
Valuation
Accumulated amortisation and
impairment
Net book amount
50
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only (a) Impairment tests for goodwill
Goodwill is allocated to the Group’s one cash generating unit being the selling of lighting, fans and energy efficient products in the Australian market
(refer Note 3).
The recoverable amount is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets
approved by management covering a five-year period
(b) Key assumptions used for value-in-use calculations
Gross Margin
Growth Rate
Discount Rate
2015
%
64.0
2014
%
64.0
2015
%
3.0
2014
%
3.0
2015
%
11.0
2014
%
11.0
Management determined gross margin based on past performance and its expectations for the future. The weighted average growth rates used are
consistent with forecasts included in industry reports. Management has considered reasonably possible changes in the key assumptions used in the
value- in-use calculations, and has not identified any reasonably possible change that would cause a material impact in the carrying amount of the Group’s
cash generating unit.
16. Trade and Other Payables
Consolidated Entity
Trade payables
Customer deposits
Sundry creditors
Marketing fund
Other payables
FY 2015
$’000
5,883
2,723
4,701
2,139
240
15,686
FY 2014
$’000
9,865
2,388
2,698
1,407
208
16,566
(a) Risk exposure
Information about the Group’s exposure to foreign exchange risk is provided in Note 2.
(b) Fair Value
Trade payables are unsecured and are usually paid within 30 days of recognition.
The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term nature.
51
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 17. Current Borrowings
Consolidated Entity
Unsecured
Trade finance (a)
Hire purchase liability (b)
Total unsecured current borrowings
(a) Trade finance
FY 2015
$’000
17,221
869
18,090
FY 2014
$’000
13,028
564
13,592
In the 2015 Annual Report, Beacon Lighting has classified its trade finance facility as current borrowings. The comparative liability has been reclassified
from Trade payables to borrowings. This change in classification has had no impact on the profit or net assets of the Group.
(b) Hire purchase liability
The Group utilises hire-purchase plans to acquire assets (i.e. fixtures and fittings and motor vehicles).
The terms range from one to four years. Details on the accounting for these hire-purchase plans is disclosed in Note 1(h) of this report.
Security and fair value disclosures
Information about the security relating to each of the secured liabilities and the fair value of each of the borrowings is provided in Note 20.
Risk exposures
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in Note 2.
Consolidated Entity
Employee benefits (a)
Warranty provision (b)
Other provisions (c)
18. Current Provisions
(a) Employee benefits
FY 2015
$’000
3,786
870
108
4,764
FY 2014
$’000
3,106
1,038
92
4,236
The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave it covers all unconditional
entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain
circumstances. The entire amount of the provision is presented as current, since the Group does not have an unconditional right to defer settlement for
Consolidated Entity
Leave obligations not expected to be settled within 12 months
FY 2015
$’000
2,670
FY 2014
$’000
2,161
any of these obligations. However, based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require
payment within the next 12 months. The following amounts reflect leave that is expected to be taken or paid within the next 12 months.
52
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only (b) Warranty provision
The Group generally offers 12 months warranty on its products. Provision is made for estimated warranty claims in respect of products sold which are still
under warranty at the end of the reporting period. These claims are expected to be settled in the next financial year. Management estimates the provision
based on historical warranty claim information and any recent trends that may suggest claims could differ from historical amounts.
Factors that could impact the estimated claim information include the success of the Group’s product and quality initiatives, as well as parts and labor
costs. Where claim costs to differ by 10% from management’s estimates, the warranty provision would be an estimated $87,000 higher or lower.
Movement in warranty provision
Consolidated Entity
Carrying amount at the start of the year
Charged/(credited) to profit or loss - amount incurred and charged
Carrying amount at end of period
(c) Other provisions
Provision is made for the fringe benefit tax payable at the end of the reporting period.
Movements in other provisions
Consolidated Entity
Carrying amount at the start of the year
Charged/(credited) to profit or loss - amount incurred and charged
Amounts used during the year
Carrying amount at end of period
19. Current Tax Liabilities
Consolidated Entity
Provision for income tax
FY 2015
$’000
1,038
(168)
870
FY 2015
$’000
92
470
(454)
108
FY 2015
$’000
2,572
FY 2014
$’000
-
1,038
1,038
FY 2014
$’000
64
368
(340)
92
FY 2014
$’000
1,147
53
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 20. Non Current Borrowings
Consolidated Entity
Unsecured
Hire purchase plan (a)
Total unsecured non-current borrowings
(a) Hire purchase plan
FY 2015
$’000
1,278
1,278
FY 2014
$’000
774
774
The Group utilises hire-purchase plans to acquire assets (i.e. furniture and fittings and motor vehicles), with one to four year terms. Details on the accounting
for these hire-purchase plans is disclosed in Note 1(h) of this report.
Risk exposures
Information about the Group’s exposure to interest rate and foreign exchange risk is provided in Note 2.
21. Non Current Provisions
Consolidated Entity
Lease liabilities
Employee benefits
Total non-current liabilities - provisions
FY 2015
$’000
1,789
551
2,340
FY 2014
$’000
1,638
583
2,221
54
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 22. Contributed Equity
Consolidated Entity
Number of ordinary shares, fully paid
Consolidated Entity
Movements in ordinary share capital
Balance at the beginning of the year
Elimination of prior year share capital
Transaction costs arising on share issue net of tax
Share capital raised
Performance rights vesting into shares
Balance at the end of the year
FY 2015
FY 2014
215,075,927
215,000,000
FY 2015
$’000
62,565
-
-
-
82
62,647
FY 2014
$’000
2,150
(2,150)
(1,289)
63,854
-
62,565
Consolidated Entity
FY 2015
FY 2014
Movements in the number of ordinary shares
Balance at the beginning of the year
Elimination of prior year share capital
New shares Issued
Performance rights vesting into shares
Balance at the end of the year
Ordinary shares
215,000,000
-
-
75,927
2,150,000
(2,150,000)
215,000,000
-
215,075,927
215,000,000
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of and amounts paid
on the shares held.
All shares carry one vote per share.
Ordinary shares have no par value and the Group does not have a limited amount of authorised capital.
Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
Consistently with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by borrowings
less cash plus total equity. Net debt is calculated as total borrowings less cash.
55
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 23. Reserves and Retained Profits
Consolidated Entity
(a) Other reserves
Cash flow hedges
Share based payment reserve
Foreign currency translation reserve
Common control reserve
Movement in cash flow hedges
Opening balance
Revaluation (net of tax effect)
Closing balance
Movement in share based payments reserve
Opening balance
Transactions arising from share based payments
Closing balance
Movement in foreign currency translation reserve
Opening balance
Revaluation (net of tax effect)
Closing balance
Movement in common control reserve
Opening balance
Transactions arising from share capital restructure
Closing balance
FY 2015
$’000
299
97
429
(43,672)
(42,847)
(238)
537
299
-
97
97
-
429
429
FY 2014
$’000
(238)
-
-
(43,672)
(43,910)
93
(331)
(238)
-
-
-
-
-
-
(43,672)
-
(43,672)
(785)
(42,887)
(43,672)
Nature and Purpose of Other Reserves
Foreign currency translation
Cash flow hedges
The hedging reserve is used to record gains or losses on a hedging
instrument in a cash flow hedge that are recognised in other comprehensive
income, as described in Note 1(p). Amounts are reclassified to profit or
loss when the associated hedged transaction affects profit or loss.
Share-based payments
The share-based payments reserve is used to recognise:
• the grant date fair value of rights issued to employees but not exercised
• the grant date fair value of shares issued to employees
Exchange differences arising on translation of the foreign controlled entity
are recognised in other comprehensive income and accumulated in a
separate reserve within equity. The cumulative amount is reclassified to
profit or loss when the net investment is disposed of.
Common control reserve
This reserve is used to record the differences which may arise as a result
of transactions with non-controlling interests that do not result in a loss
of control.
56
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only Consolidated Entity
(b) Retained earnings
Movements in retained earnings were as follows:
Opening balance
Net profit for the period
Transactions arising from share capital restructure
Dividends
Closing balance
24. Dividends
FY 2015
$’000
FY 2014
$’000
19,549
16,939
-
(6,882)
29,606
41,055
11,797
(18,803)
(14,500)
19,549
(a) Ordinary shares
Dividends of $14.5m were paid prior to the group listing in April 2014, including dividends of $6.525m paid to the non-controlling interest shareholder
during the year ended 29 June 2014.
Consolidated Entity
Final Dividend for year ended 29 June 2014 1.4 cents (2014 - 6.7 cents) per fully paid
share
Interim dividend for year ended 28 June 2015 of 1.8 cents (2014 - 0 cents) per full paid
share
Total Dividends provided for or paid
(b) Dividends not recognized at the end of the reporting period
Consolidated Entity
In addition to the above dividends, since year end the directors have recommended the
payment of a final dividend of 2.4 cents per fully paid ordinary share (2014 - 1.4 cents),
fully franked based on tax paid at 30%. The proposed dividend is to be paid out of retained
earnings at 28 June 2015, but not recognised as at liability at year end.
FY 2015
$’000
3,011
3,871
6,882
FY 2014
$’000
14,500
-
14,500
FY 2015
$’000
FY 2014
$’000
5,162
3,011
57
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only (c) Franked dividends
The franked portions of the final dividends recommended after 28 June 2015 will be franked out of existing franking credits or out of franking credits
arising from the payment of income tax in the 52 week period ended 28 June 2015.
Consolidated Entity
Franking credits available for subsequent reporting periods based on a tax rate of 30.0%
(2014 - 30.0%)
FY 2015
$’000
22,529
FY 2014
$’000
21,412
The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax,
• franking debits that will arise from the payment of dividends recognised as a liability at the reporting date, and
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries were paid as dividends.
25. Key Management Personnel Disclosures
Consolidated Entity
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Performance based cash benefits
Performance based share benefits
FY 2015
$
564,980
67,658
41,449
171,234
46,875
892,196
FY 2014
$
573,735
54,043
40,695
82,380
-
750,853
Detailed remuneration disclosures are provided in the remuneration report on pages 19 to 22.
26. Share Based Payments
(a) Performance Rights – executive short-term incentive scheme
Under the Group’s short-term incentive (STI) plan, executives received 57% of the annual STI in cash and 43% in the form of performance rights to
ordinary shares of Beacon Lighting Group Limited. The rights were granted on 22 August 2014, which in part vested immediately, one year after the grant
date and two years after the grant date. Under the plan, participants are granted performance rights which only vest if certain requirements are met.
Participation in the plan is at the discretion of the board and no individual has a contractual right to participate in the plan or to receive any guaranteed
benefits.
The number of rights to be granted is determined based on the average share price at 30 June (averaged over + / - 30 days).
Number of performance rights granted on 22 August 2014
Fair Value of performance rights at grant date
FY 2015
227,779
$1.066
FY 2014
-
-
58
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only (b) Fair Value of Performance Rights granted
The fair value of the rights at the grant date was estimated using the Black Scholes Model which takes into account the share price at grant date, the
impact of dilution (where material), expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate.
The model inputs for the performance rights granted during the year ended 28 June 2015 included:
Exercise price
Grant date
Share Price at grant date
Expected dividend yield
FY 2015
$0.000
22 August 2014
$1.16
4.09%
FY 2014
-
-
-
-
The expected volatility of the company’s shares and the risk free interest rate do not have a material impact on the fair value calculation of the perform-
ance rights granted.
c) Expenses arising from share based payment transactions
Total expenses arising from share based payment transactions recognized during the period as part of employee benefits expense were as follows:
Consolidated Entity
Performance rights issued under employee STI plan
27. Earnings Per Share
Consolidated Entity
Basic earnings per share - cents
Diluted earnings per share - cents
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share
FY 2015
$’000
178
FY 2014
$’000
-
FY 2015
FY 2014
7.88
7.87
5.49
5.49
215,064,423
215,000,000
215,193,269
215,000,000
59
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 28. Remuneration of Auditors
During the period the following fees were paid or payable for services provided by PricewaterhouseCoopers, auditor of the parent entity.
Consolidated Entity
Audit and Assurance Services
Audit and review of financial statements
IPO due diligence
Other services
Other IPO services
IPO tax related services
Taxation services
Other services
Total remuneration of PwC
29. Contingencies
There were no significant or material contingent liabilities including legal claims at 28 June 2015.
30. Commitments
Lease commitments: group as lessee
(a) Non-cancellable operating leases
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Consolidated Entity
Within one year
Later than one year but not later than five years
Later than five years
FY 2015
$
201,400
-
-
-
133,811
22,655
357,866
FY 2015
$’000
16,478
45,604
6,416
68,498
FY 2014
$
199,410
164,495
38,836
118,935
30,190
-
551,866
FY 2014
$’000
13,446
37,449
7,895
58,790
The Group leases various offices, warehouses and retail stores under non-cancellable operating leases expiring within one to seven years. The leases
have varying terms, with rent payable monthly in advance. Various options exist to renew the leases at expiry for an additional term. On renewal, the
terms of the leases are renegotiated.
60
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only (b) Hire purchase commitments
Commitments in relation to finance leases are payable as follows:
Consolidated Entity
Within one year
Later than one year but not later than five years
Minimum lease payments
Future finance charges
Total lease liabilities
Representing lease liabilities
Current (Note 17)
Non-current (Note 20)
31. Related Party Transactions
(a) Subsidiaries
Interests in subsidiaries are set out in Note 32.
(b) Key management personnel
Disclosures relating to key management personnel are set out in Note 25.
(c) Transactions with other related parties
Consolidated Entity
The following transactions occurred with related parties:
Purchases of goods
FY 2015
$’000
FY 2014
$’000
964
1,328
2,292
(145)
2,147
869
1,278
2,147
632
824
1,456
(118)
1,338
564
774
1,338
FY 2015
$
FY 2014
$
Purchases of goods and supply of services from/to other related parties
-
47,610
Other transactions
Income received from other related parties
Consulting fees paid to other related parties
Rent paid to other related parties
37,557
-
1,288,724
-
49,090
1,404,101
61
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only The Robinson family has a 55% interest as owner of the Derrimut distribution
centre leased by Beacon Lighting on arms length commercial terms. The
current rent is $920,000 per annum increasing by 3% annually. The lease
expires in March 2021 with two further rights of renewal for periods of seven
years each. The Robinson family is in the process of negotiating to acquire
the remaining 45% interest.
The Robinson family has a 55% interest as owner of the Heidelberg store
leased by Beacon Lighting on arms length terms. The current rent is
$153,276 per annum increasing by 3% annually. The lease expires in 2017
with one further right of renewal for a period of seven years. The Robinson
family is in the process of negotiating to acquire the remaining 45% interest.
The Robinson family has a 100% interest as owner of the Fyshwick store
leased by Beacon Lighting on arms length terms. The current rent is
$205,855 per annum increasing by 3% annually. The lease expires in 2017
with one further right of renewal for a period of seven years.
These disclosures are made due to Beacon Lighting having obtained, at
the time of listing, a waiver from Listing Rule 10.1 permitting the lease
arrangements described above continuing without shareholder approval
conditional on disclosure being made in the Annual Report as set out here.
Ian Robinson has a 100% interest in Carbonetix Pty Ltd. Carbonetix Pty Ltd
and Beacon Solar have an arms length working alliance whereby business
opportunities are jointly explored. Beacon Lighting subleases office space to
Carbonetix Pty Ltd at an arms length fee.
(d) Outstanding balances
There are no outstanding balances arising from sales/purchases of goods
and services with related parties at the end of the reporting period.
No provisions for doubtful debts have been raised in relation to any out-
standing balances, and no expense has been recognised in respect of bad
or doubtful debts due from related parties.
(e) Loans to/from related parties
Consolidated Entity
Beginning of the year
Loans repaid
End of period
FY 2015
$
-
-
-
FY 2014
$
9,200,000
(9,200,000)
-
62
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 32. Subsidiaries
The consolidated financial report incorporate the assets, liabilities and results of the following principal subsidiaries in accordance with the accounting
policy described in Note 1(b):
Name of Entity
Incorporation
Shares
Equity holding1
FY 2015 %
FY 2014 %
Beacon Lighting Corporation Pty Ltd
Brightlite Unit Trust
Beacon Lighting Wholesalers Unit Trust
Beacon Lighting Franchising Unit Trust
Tanex Unit Trust
Enviro Renew Pty Ltd
Manrob Investments Pty Ltd
Beacon Solar Pty Ltd
Light Source Solutions Limited
Beacon International Limited
1592603 Ltd
Beacon Lighting International
Fanaway Trading Limited
Fanaway International Trading Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1The proportion of ownership interest is equal to the proportion of voting power held.
33. Events Occurring After the Reporting Period
Other than the item described below, there has been no other matter or circumstance that has occurred subsequent to period end that has significantly
affected, or may significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or economic entity
in subsequent financial periods.
Effective from September 2015, Beacon Lighting Group has entered into a sole Distribution and IP License Agreement with GE Lighting for the Australian
and New Zealand markets. These agreements provide the Group with wholesale distribution rights of the current GE branded range of lamps (globes)
and other consumer lighting fixtures. They also provide use of the prominent GE brand under license for further product development by Beacon Lighting
Effective from 28th September 2015, Beacon Lighting Group has agreed to terms for the acquisition of two Beacon Lighting Franchised stores. The
stores, located at Watergardens Homemaker Centre (Victoria) and Essendon Homemaker Hub (Victoria). Having traded for more than 14 and 9 years
respectively, they have developed a solid customer base over that time.
A fully franked dividend of $5,161,822 was declared on August 19, 2015.
63
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 34. Reconciliation of Profit After Income Tax to Net Cash Inflow from Operating Activities
Consolidated Entity
Profit for the period
Depreciation
Net loss on disposal of non-current assets
Amortisation
Fair value adjustment to derivatives
Share based payments
Net exchange differences
Change in operating assets and liabilities:
(Increase) decrease in receivables
(Increase) decrease in inventories
(Increase) decrease in deferred tax assets
(Increase) decrease in other operating assets
(Decrease) increase in payables
(Decrease) increase in provision for income taxes payable
(Decrease) increase in other provisions
Net cash inflow from operating activities
35. Non-Cash Investing and Financing Activities
Consolidated Entity
Acquisition of plant and equipment by means of finance leases
36. Critical Accounting Estimates
FY 2015
$’000
16,939
2,333
815
20
-
179
43
1,201
(12,462)
(1,648)
(333)
(74)
1,425
647
9,084
FY 2015
$’000
1,541
FY 2014
$’000
11,797
2,000
143
20
-
-
134
(2,246)
(3,122)
(1,365)
215
6,619
(10)
1,521
15,706
FY 2014
$’000
1,341
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management
also needs to exercise judgement in applying the Group’s accounting policies.
The areas that involves a higher degree of judgement or complexity, and items which are more likely to be materially adjusted due to estimates and
assumptions turning out to be wrong are detailed in Note 18. The group has assessed the calculation of the warranty provisions to be a critical
accounting estimate.
64
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 37. Parent Entity Financial Information
(a) Summary financial information
The individual financial report for the parent entity show the following aggregate amounts:
Consolidated Entity
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Retained profits
Total equity
Profit / (Loss) for the period
Total comprehensive income
(b) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 28 June 2015 or 29 June 2014.
FY 2015
$’000
FY 2014
$’000
8,939
88,892
97,831
1,905
1,905
95,926
86,964
(71)
9,033
95,926
946
946
15,068
88,737
103,805
1,951
1,951
101,854
86,884
-
14,970
101,854
(30)
(30)
65
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only 38. Deed of Cross Guarantee
Beacon Lighting Group Limited and Beacon Lighting Corporation Pty Ltd are parties to a deed of cross guarantee under which each company guarantees
the debts of the others. By entering into the deed, the wholly owned entities have been relieved from the requirement to prepare a financial report and
directors report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investment Commission.
(a) Consolidated income statement, statement of comprehensive income and summary of movements in consolidated retained earnings
The above companies represent a closed group for the purposes of the Class Order, and as there are no other parties to the deed of cross guarantee
that are controlled by Beacon Lighting Group Limited, they also represent the extended closed group.
Set out below is a consolidated income statement, a consolidated statement of comprehensive income and a summary of movements in
consolidated retained earnings for the year ended 28 June 2015 of the closed group consisting of Beacon Lighting Group Limited and Beacon Lighting
Corporation Pty Ltd.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE CLOSED GROUP
Beacon Lighting Group Limited and Beacon Lighting Corporation Pty Ltd
Distribution income
Expenses
General and administration
Profit before income tax
Income tax expense
Profit for the period attributable to the members of the closed group
Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of derivatives
Income tax relating to these items
Other comprehensive income for the period, net of tax
Total comprehensive income for the period attributable to the members
of the closed group
FY 2015
$’000
26,324
(3,271)
23,053
(6,260)
16,793
-
(241)
72
(169)
FY 2014
$’000
17,472
(1,915)
15,557
(5,220)
10,337
-
-
-
-
16,624
10,337
66
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only CONSOLIDATED BALANCE SHEET OF THE CLOSED GROUP
Beacon Lighting Group Limited and Beacon Lighting Corporation Pty Ltd
FY 2015
$’000
FY 2014
$’000
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Related party receivables
Total current assets
Non-current assets
Deferred tax assets
Investment in subsidiaries
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Derivative financial instruments
Provisions
Current tax liabilities
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other reserves
Retained earnings
Total equity
1,292
516
26
38,623
40,457
5,158
70,633
75,791
22
482
-
30,791
31,295
3,493
70,633
74,126
116,248
105,421
759
169
571
2,399
3,898
3,898
1,951
-
-
1,040
2,991
2,991
112,350
102,430
62,642
(71)
49,779
112,350
62,561
-
39,869
102,430
67
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesNOTES TO THE FINANCIAL STATEMENTSFor personal use only CONSOLIDATED STATEMENT OF CHANGES IN EQUITY OF THE CLOSED GROUP
Beacon Lighting Group Ltd and
Beacon Lighting Corporation Pty Ltd
Balance as at 1 July 2013
Profit for the year
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs & tax
Non controlling interests in acquired subsidiaries
Dividends provided for or paid
Total contributions by and distributions to owners
Balance as at 29 June 2014
Balance as at 29 June 2014
Profit for the year
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity as owners
Issue of shares to employees
Employee share scheme
Dividends provided for or paid
Total contributions by and distributions to owners
Contributed
equity
$’000
2,150
-
-
86,883
(26,472)
-
60,411
62,561
62,561
-
-
-
81
-
-
81
Balance as at 28 June 2015
62,642
Reserves
$’000
-
-
-
-
-
-
-
-
-
-
(169)
(169)
-
98
-
98
(71)
Retained
earnings
$’000
44,031
10,338
10,338
-
-
(14,500)
(14,500)
39,869
39,869
16,793
-
16,793
-
-
(6,882)
(6,882)
49,779
Total equity
$’000
46,181
10,338
10,338
86,883
(26,472)
(14,500)
45,911
102,430
102,430
16,793
(169)
16,624
81
98
(6,882)
(6,703)
112,350
68
NOTES TO THE FINANCIAL STATEMENTSFor the 52 weeks ended 28 June 2015 and the 52 weeks ended 29 June 2014Beacon Lighting Group and its controlled entitiesBEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only Directors’ Declaration
In the opinion of the Directors:
(a) the Financial Statements, notes and the additional disclosures set out on pages 28 to 68 are in accordance with the Corporations Act 2001 (Cth),
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 28 June 2015 and of its performance for the 52 weeks ended
on that date, and
(b) 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
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note 38 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 38.
(d) note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
(e) the Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by the section 295A of the
Corporations Act 2001 (Cth).
This declaration is made in accordance with a resolution of the Directors.
Signed in accordance with a resolution of Directors.
Ian Robinson
Executive Chairman
Melbourne
19 August 2015
Glen Robinson
Chief Executive Officer
69
DIRECTORS’ DECLARATIONFor personal use only
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEACON LIGHTING GROUP LIMITED
Independent auditor’s report to the members of Beacon
Lighting Group Limited
Report on the financial report
We have audited the accompanying financial report of Beacon Lighting Group Limited (the
company), which comprises the consolidated balance sheet as at 28 June 2015, the
consolidated statement of comprehensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the year ended on that date, a summary
of significant accounting policies, other explanatory notes and the directors’ declaration for
Beacon Lighting Group Limited (the consolidated entity). The consolidated entity comprises
the company and the entities it controlled at year’s end or from time to time during the
financial year.
Directors’ responsibility 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, the
Corporations Act 2001 and for such internal control as the directors determine is necessary
to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial
statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the consolidated entity’s preparation and fair
presentation of the financial report 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 entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
70
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BEACON LIGHTING GROUP LIMITED
Independent auditor’s report to the members of Beacon
Lighting Group Limited (Continued)
Report on the financial report (Continued)
Auditor’s opinion
In our opinion:
(a)
the financial report of Beacon Lighting Group Limited is in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity's financial position as at 28
June 2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001.
(b)
the financial report and notes also comply with International Financial Reporting
Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the remuneration report included in pages 18 to 25 of the directors’ report
for the year ended 28 June 2015. The directors of the company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the remuneration report of Beacon Lighting Group Limited for the year
ended 28 June 2015 complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
Daniel Rosenberg
Partner
Melbourne
19 August 2015
71
INDEPENDENT AUDITOR’S REPORTFor personal use only 72
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only Shareholders’ Information
In accordance with Section 4.10 of the Australian Stock Exchange Limited Listing Rules, the Directors provide the following information.
SHAREHOLDING ANALYSIS
(a) Distribution of shareholders
(c) Class of shares and voting rights
At 3 August 2015, the distribution of shareholdings was
as follows
Size of Shareholding
Number of
Shareholders
At 3 August 2015, there were 1,669 holders of ordinary shares of the Company.
All of the issued shares in the capital of the parent entity are ordinary shares
and each shareholder is entitled to one vote per share.
Twenty largest shareholders, as at 3 August 2015:
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
Over 100,000
105
402
386
734
42
Total number of shareholders
1,669
Holdings of less than a
marketable parcel
20
(b) Substantial shareholdingss
The number of shares held by the substantial shareholders
listed in the Company’s register of substantial shareholders
as at 3 August 2015 were:
Number of
Shares
% Held
118,652,589
55.17%
Shareholder
Heystead
Nominees Pty
Ltd (including
Robinson Family
members)
Commonwealth
Bank of Australia
2,726,723
5.08%
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Rank
Name
HEYSTEAD NOMINEES
PROPRIETARY LTD
Number
of Shares
%
Holding
118,250,000
54.98
NATIONAL NOMINEES LTD
19,281,191
8.96
J P MORGAN NOMINEES
AUSTRALIA LTD
10,223,118
4.75
CITICORP NOMINEES PTY LTD
9,673,691
4.50
HSBC CUSTODY NOMINEES
(AUSTRALIA) LTD
RBC INVESTOR SERVICES
AUSTRALIA NOMINEES PTY LTD
CITICORP NOMINEES PTY LTD
AMCIL LTD
MIRRABOOKA INVESTMENTS
LTD
9,465,360
4.40
9,039,253
4.20
3,005,470
1,624,141
1,624,140
1.40
0.76
0.76
RELIABLE BUSINESS CO LTD
1,363,636
0.63
739,146
0.34
HSBC CUSTODY NOMINEES
(AUSTRALIA) LTD
DR DJ RITCHIE & DR GJ RITCHIE
TRUEBELL CAPITAL PTY LTD
BOND STREET CUSTODIANS LTD
NETWEALTH INVESTMENTS LTD
BNP PARIBAS NOMS PTY LTD
MR N OSBORNE
MR R BRYAN
AH KELLY & PJ KELLY
MR CW JENKINSON
& MS W SULLIVAN
Totals: Top 20 holders of ISSUED CAPITAL
187,500,456
Total Remaining Holders Balance
27,575,471
500,000
500,000
464,950
398,230
337,130
300,000
250,000
236,000
225,000
0.23
0.23
0.22
0.19
0.16
0.14
0.12
0.11
0.10
87.18
12.82
215,075,927
100.00
73
SHAREHOLDERS’ INFORMATIONFor personal use only Corporate Directory
DIRECTORS
Ian Robinson
Glen Robinson
Eric(James) Barr
Neil Osborne
Executive Chairman
Chief Executive Officer
Deputy Chairman
Non-Executive Director
COMPANY SECRETARY
Tracey Hutchinson
REGISTERED OFFICE
5 Bastow Place
Mulgrave
Victoria
WEBSITE
Corporate site
www.beaconlightinggroup.com.au
Retail site
www.beaconlighting.com.au
Other business websites
www.beaconlightingtradeclub.com.au
www.beaconsolar.com.au
www.beaconlightingcommercial.com.au
www.beaconinternational.com
www.fanaway.com
LEGAL ADVISORS
Baker & McKenzie
Level 19, 181 William Street, Melbourne
Victoria
AUDITORS
PricewaterhouseCoopers
Freshwater Place
2 Southbank Boulevard, Southbank
Victoria
SHARE REGISTRY
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street, Abbotsford
Victoria
STOCK EXCHANGE LISTING
Beacon Lighting Group Limited (BLX)
shares are listed on the ASX
74
BEACON LIGHTING GROUP ANNUAL REPORT 2015For personal use only 75
For personal use only Store Locations
VIC
Abbotsford
250 Hoddle St
Albury Wodonga
Harvey Norman Centre
94 Borella Rd,
Albury NSW
Ballarat
Wendouree
Homemaker Centre
333 Gillies St
Bendigo
285 High St
Kangaroo Flat
Camberwell
347 Camberwell Rd
Chirnside Park
Showroom Centre
286 Maroondah Hwy
Coburg
Lincoln Mills
Homemaker Centre,
64-74 Gaffney St
Cranbourne
Cranbourne Home
Cnr Sth Gippsland Hwy
& Thompsons Rd
Essendon DFO
Homemaker Hub
120 Bulla Rd, Strathmore
Fountain Gate
Casey Lifestyle Centre
430 Princes Hwy
Frankston
22 McMahons Rd
Geelong
354 Melbourne Rd
Heidelberg
2-4 Dora Street
Hoppers Crossing
283 Old Geelong Rd
Moorabbin
867 Nepean Hwy
Nunawading
262 Whitehorse Rd
Oakleigh
807 Warrigal Rd
Pakenham
Lifestyle Centre
825 Princes Hwy
Scoresby
1391 Ferntree Gully Rd
South Wharf DFO
Level 1,
Homemaker Hub
20 Convention
Centre Place
Springvale
IKEA Homemaker Centre
917 Princes Hwy
St Kilda
366 St Kilda Rd
Sunshine
497 Ballarat Rd
Thomastown
Homemaker Centre
Cnr Dalton and
Settlement Rds
Watergardens
Homemaker Centre
440 Keilor-Melton Hwy,
Taylors Lakes
Waurn Ponds
Homemaker Centre
235 Colac Rd
(Princes Hwy)
TAS
Moonah
7-9 Derwent Park Rd
Launceston
40 William Street
NSW
Albury Wodonga
Harvey Norman Centre
94 Borella Rd, Albury
Alexandria
Style Homemaker
Centre, Cnr O’Riordan
& Doody Sts
Artarmon
Home HQ
North Shore
Cnr Reserve Rd
& Frederick St
Bankstown
Home Central
9 - 67 Chapel Rd South
Belrose
Supa Centa Belrose
4-6 Niangala Cl
Campbelltown
Homebase
24 Blaxland Rd
Castle Hill
Home Hub Hills, Cnr
Victoria & Hudson Ave
Crossroads
Homemaker Centre
Parkers Farm Place,
Casula
Gosford West
Hometown
356 Manns Rd
Hornsby
Cnr Pacific Hwy
& Yardley Ave, Waitara
Kotara
Kotara Home
108 Park Ave
Lake Haven
Home Mega Centre
Cnr Pacific Hwy
& Lake Haven Drv
McGraths Hill
Home Central,
264-272 Windsor Rd
Mittagong
Highlands
Homemaker Centre,
205 Old Hume Hwy
Parramatta
Cnr Church and
Daking Sts
Penrith
Homemaker Centre
2 Patty’s Place
Port Macquarie
180 Lake Rd
Prospect
Homebase
19 Stoddart Rd
Rutherford
Harvey Norman Centre,
366 New England Hwy
Shellharbour
146 New Lake
Entrance Rd
Taren Point
105 Parraweena Rd
Warners Bay
Warners Bay Home
240 Hillsborough Rd
ACT
Fyshwick
175 Gladstone St
QLD
Burleigh
Stockland Centre
177-207 Reedy
Creek Rd
Cairns
331 Mulgrave Rd
Cannon Hill
Homemaker Centre
1881 Creek Rd
Capalaba
Freedom
Home Centre
67 Redland Bay Rd
Carseldine
Homemaker Centre
1925 Gympie Rd,
Bald Hills
Fortitude Valley
Homemaker
City North
650 Wickham St
Helensvale
Homeworld
502 Hope Island Rd
Hervey Bay
140 Boat
Harbour Drv
Ipswich
Ipswich Riverlink
Shopping Centre
Cnr The Terrace
& Downs Sts
Jindalee
Homemaker City
182 Sinnamon Rd
Kawana
2 Eden St, Minyama
Macgregor
550 Kessels Rd
Maroochydore
Sunshine
Homemaker Centre 72
Maroochydore Rd
Morayfield
Supa Centre
344 Morayfield Rd
Noosa
Noosa Civic
Eenie Creek Rd
Rockhampton
Red Hill
Homemaker Centre
Cnr Yaamba &
Richardson Rds
Southport
Bunnings Complex
542 Olsen Ave
Toowoomba
Harvey Norman Centre,
910 Ruthven St
Townsville
Mega Centre
Cnr Dalrymple Rd
& Duckworth St,
Garbutt
Underwood
Homemaker HQ
1-21 Kingston Rd
Windsor
Homemaker City
190 Lutwyche Rd
WA
Baldivis
Safety Bay Rd
Bunbury
Homemaker Centre
42 Strickland St
Cannington
21 William St
Clarkson
Ocean Keys
Homemaker Centre
61 Key Largo Drv
Jandakot
South Central
Cockburn
87 Armadale Rd
Joondalup
3 Sundew Rise
Malaga
Home Centre
655 Marshall Rd
Mandurah
28 Gordon Rd
Mandurah
Home City
430 Pinjarra Rd
Midland
Midland Central
Cnr Clayton
& Lloyd Sts
Myaree
Melville Square
Cnr Leach Hwy
& Norma Rd
Osborne Park
Hometown
381 Scarborough
Beach Rd
Subiaco
320 Hay St
SA
Churchill
Churchill Centre South
252 Churchill Rd
Kilburn
Gepps Cross
Home HQ
750 Main North Rd
Melrose Park
Melrose Plaza
1039 South Rd
Mile End
Mile End Home
121 Railway Tce
Munno Para
Harvey Norman Centre
600 Main North Rd,
Smithfield
Noarlunga
Harvey Norman Centre
2 Seaman Dr
NT
Darwin
Homemaker Village
356-362
Bagot Rd, Millner
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