Annual Report
BSA Limited 2013
BSA announced the $93 million contract for the
Mechanical Services at the new Royal Adelaide Hospital
(nRAH) in February 2013. Construction on the project
commenced in 2011.
CONTENTS
In 2013, BSA opened new offices in Adelaide to
deliver on the landmark nRAH project.
4 —
Chairman’s Report
6 —
Managing Director’s Report
14 —
Directors’ Report
18 —
Remuneration Report
29 —
Corporate Governance Statement
40 —
Auditor’s Independence Declaration
41 —
Financial Report
99 —
Directors’ Declaration
102 —
Shareholder Information
104 —
Corporate Directory
BSA LIMITED ANNUAL REPORT 2013
3
CHAIRMAN’S REPORT
Triple ‘M’ completed the Mechanical Services
installation for the Parramatta Justice Precinct.
BSA continues to provide maintenance services
to the facilities, which achieved 5 Star Green Star
and 5 Star Nabers ratings.
KEY HIGHLIGHTS
$474 million
Revenue
$12.8 million
EBITDA
$3.8 million
Net profit after tax
18.9%
52.7%
Revenue
Portfolio Diversification
28.4%
Technical Design & Construction Projects
Technical Maintenance Services
Technical Field Force Solutions
On behalf of BSA Limited, I am pleased to report
on our performance in what has been another
challenging year for BSA, where we have faced
significant challenges in each of our markets.
Technical Design and Construction Projects (TDCP) experienced
the failure of a number of second tier builders, the slowing of the
construction industry, working capital impacts from finalising our
large contracts, and reduced margins on underperforming contracts.
Technical Field Force Solutions (TFFS) successfully renegotiated
the Foxtel contract, securing additional tenure and business in
regional areas; at the time of this report, we are continuing to
mobilise the new regional activities in this contact.
Technical Maintenance Services (TMS) was also impacted by the
failure of second tier builders and the slowing of the resource sector,
affecting our operations in Western Australia.
Despite these market difficulties, your Company’s forward workload
is very healthy. Our challenge however, is to improve our cash flow
and ensure our operational disciplines are in place to achieve this.
4 BSA LIMITED ANNUAL REPORT 2013
BSA has built a strong forward
workload despite the underlying
market challenges
“
”
•
•
•
•
Continued the investment in our vehicle fleet, business
systems, business continuity programs and branch
infrastructure;
Despite difficult market conditions that suppressed
revenue growth, compared to FY2012, all Business
Units actively pursued forward work resulting in good
underlying revenue for FY2014. This has provided BSA
with the opportunity to focus on improving earnings and
extracting cash, with less business development costs
expected in the 2014 financial year;
The appointment of a new Chief Financial Officer, who will
commence with the business on 1 October 2013; and
Heightened the focus on working capital management
across the Company.
Operating cash flow was -$16.5 million compared to +$23.9
million in FY2012, and the decline in our profit before tax reflects
the difficult trading conditions and other issues outlined in our
various market updates. The Board and management are focused
on extracting improved earnings and greater cash in FY2014 as the
respective Business Units deal with their issues in the first half.
The Board has resolved not to pay a final dividend for FY2013. Our
decision to pay a dividend is made in every period. In this period, our
decision was based on the poor cash flow in the second half and the
level of debt.
We finished the 2013 financial year with a solid forward order
book and a sound, diversified business portfolio in what were very
difficult market conditions.
I would like to thank my fellow Directors for their contribution to
BSA and for their support during the year.
Despite the considerable challenges faced throughout FY2013, our
staff and Executive team have again shown their commitment to our
customers and shareholders. On behalf of the Board, thank you.
Ross Johnston
Chairman
30 September 2013
BSA LIMITED ANNUAL REPORT 2013
5
Ross Johnston
Chairman
BSA’s continued investment in workplace health, safety, security and
environment has been further rewarded with a 77% reduction in
Lost Time Incidents (LTI) compared to FY2012. BSA is now tracking
towards best practice.
Our Managing Director, Steve Nash, will provide a detailed review of
our results in the Managing Director’s Report. The key highlights are
as follows:
•
•
•
•
•
•
Revenue $474 million;
EBITDA $12.8 million;
Net profit after tax $3.8 million;
Basic earnings per share of 1.64 cents;
Operating cash flow -$16.5 million; and
Nil final dividend was declared.
Additionally, we have achieved the following:
•
•
•
Following Foxtel’s acquisition of Austar, BSA was awarded
an extension, to 2017, of its existing metropolitan works
contract, as well as all regional work in Australia. BSA is
very proud that it is entering its 15th year as a service
provider to Foxtel, Australia’s leading subscription television
provider;
Secured the new Royal Adelaide Hospital contract with
the Hansen Yuncken Leighton Contractors Joint Venture.
I am pleased to report that we have established offices
and fabrication facilities in Adelaide and engaged all key
positions to fulfil our contract obligations. Including this
contract, our construction order book stands at a healthy
$277 million;
Experienced 26% growth in the newly formed TMS
Business Unit that is now one of Australia’s leading Heating,
Ventilation, Air Conditioning (HVAC), and Fire Services
maintenance providers;
MANAGING DIRECTOR’S REPORT
BSA provides programmed preventive maintenance
and 24/7 reactive services to a number of facilities
in the healthcare sector. Our technicians are
familiar with the critical requirements for consistent
temperature, and clean, uncontaminated air.
OPERATIONAL AND
FINANCIAL HIGHLIGHTS AND OUTLOOK
Financial year 2013 was challenging, not only for BSA Limited but
for many of Australia’s largest contracting organisations. Despite the
market uncertainty, your Company has built a strong forward workload
for FY2014 and beyond. This provides a more certain revenue base
that will allow the BSA Group to now focus on improving the quality
of its earnings and strengthening the balance sheet.
BSA Group revenue reached $474 million (2012:$492 million),
resulting in earnings before interest, taxes, depreciation and
amortisation (EBITDA) of $12.8 million (2012:$16.5 million), and
Net Profit for the year of $3.8 million (2012: $5.8 million). Further
commentary on BSA’s Business Units, is outlined below.
BSA delivered basic earnings of 1.64 cents per share (2012: 2.57
cents per share).
The Directors have not declared a final dividend, taking the total
dividends for the year to 0.5 cents per share, fully franked.
The Consolidated Statement of Financial Position has seen
Current Assets reduce by 13% to $93.6 million primarily due to
the reduction in cash offset by an increase in trade debtors of
$9.6 million. Non-current assets have increased minimally at 2%
to $83.8 million. This increase is primarily due to an increase in
property, plant and equipment ($2.4 million) offset by a reduction
in other intangible assets ($1.4 million). Current liabilities reduced
15% to $87.1 million. This reduction is mainly due to a decrease
in trade and other payables of $15.0 million, an increase in
borrowings of $3.6 million, and a decrease in tax liabilities of
$4.7 million. Non-current liabilities have increased 35% to $15.5
million, mainly due to an increase in non-current borrowings.
Closing net debt position of $20.5 million increased during
the year from a $9.5 million net cash position at 30 June 2012.
Cash balance decreased to $2.0 million (from $24.7 million
at 30 June 2012) due to net cash used in operations of $16.5
million, investment activities of $5.2 million, and net cash used
in financing activities of $1.0 million. Cash used in operations
of $16.5 million was due to positive EBITDA $12.8 million being
offset predominantly by a reduction in other operating liabilities of
$12.9 million, an increase in trade receivables of $9.6 million, and
a reduction in provision for income taxes of $5.9 million.
NSW OFFICE OF STATE REVENUE (OSR)
BSA advised that on 30 August 2013 it received an email from the
NSW Office of State Revenue (OSR) concerning a possible payroll
tax-related liability of approximately $11.7 million, for the five year
period 2008-2013. This issue related principally to our Technical
Field Force Solutions (TFFS) Business Unit.
To allow BSA to more fully understand the matters raised in the OSR
email, on 4 September 2013, BSA requested a two week voluntary
suspension of its shares whilst we sought advice from our advisors.
Our advisers have confirmed that the OSR email received does not
have the status of a notice of assessment issued under the state
tax legislation, that a material calculation error has been made
in arriving at the figure, and that BSA has reasonable grounds to
believe the figure can be reduced by utilising certain avenues of
relief. BSA is working, and will continue to work, proactively with
the OSR to resolve this matter.
BSA has advised its bank of the above and will continue to work
with them in relation to this matter.
With no admission of legal liability, BSA has taken a provision in its
FY2013 accounts of $2 million for any settlement that may occur.
Your Company will continue to keep the market informed as and
when further information becomes available.
GROWTH
I have previously advised that the key platforms of BSA’s strategy are
growth through portfolio diversification, strategic acquisitions and
sound organic growth, whilst maintaining a strong balance sheet.
However achieving a sound forward workload for Technical Design
and Construction Projects business unit was seen as a significant
priority over the past 12 months as the impending downturn in the
construction industry was a significant risk to the Group.
I can report that we have achieved both a sound forward workload
for TDCP of $277 million and portfolio diversification within the
business through both acquisitive and organic growth. The business
will now focus on organic growth, extracting greater earnings,
optimising working capital, and strengthening the balance sheet.
6
BSA LIMITED ANNUAL REPORT 2013
“
Steve Nash
Managing Director
As the revenue base moves into steady
state the primary goals for the medium
term are improved earnings and
strengthening of the balance sheet
”
COMMUNITY SUPPORT
During the year BSA, and its employees, continued our support of
the Foxtel Lap and the Murdoch Childrens Research Institute, for
the fourth year in a row, by working together to raise funds for child
health research.
We also continued our longstanding partnership with Youngcare,
a not-for-profit foundation that provides age appropriate
accommodation to young Australians with high-care needs. Youngcare
commenced the construction of its Sydney apartments (located in
Auburn) in March 2013.
Forward orders for Technical Design and Construction Projects (TDCP)
stands at $277 million (2012:$208 million) including the new Royal
Adelaide Hospital (nRAH) project, announced earlier this year.
TFFS has extended its metropolitan contract with Foxtel to 2017,
and at the same time gained 100% of the regional work following
Foxtel’s acquisition of Austar.
Technical Maintenance Services (TMS) has grown by 26% from
FY2012 and developed into one of Australia’s leading Heating,
Ventilation, Air Conditioning (HVAC) and Fire services maintenance
businesses, with sound growth prospects for the coming years.
During FY2013, your Company continued to invest in systems,
vehicles and facilities ensuring that all businesses now have
sustainable competitive advantages, with less investment planned
for FY2014 and beyond.
HEALTH, SAFETY, SECURITY, ENVIRONMENT
AND QUALITY
BSA’s safety performance continued to improve throughout FY2013,
with a 77% reduction in our Lost Time Incident Frequency Rate
(LTIFR) to three incidents/million hours worked. As a consequence of
the improved safety performance, our Lost Day Frequency Rate (Lost
Days/million hours worked) has reduced by over 56% and cost of
claims by over 50%, during the reporting period.
Underpinning the strong cultural and operational improvements is
the establishment of our Integrated Management System project,
focused on enhancing operational effectiveness, improved risk
management and increased regulatory compliance across the Group.
Environmental sustainability remains a key commitment at BSA, with
the establishment of a centralised energy consumption and carbon
footprint monitoring program, to enable the effective management of
energy reduction programs.
BSA, and its employees, also contributed to a number of charity
fundraisers including the Starlight Children’s Foundation Australia,
Make-A-Wish Australia and St Vincent de Paul.
GENDER DIVERSITY
BSA is committed to providing a workplace for all employees that
is free from discrimination, harassment and bullying. We provide
a working environment that promotes diversity and ensures all
employees reach their potential.
At the same time, BSA advises that the significant majority of
employment in the TDCP team as well as the TFFS team consists
of specific skill sets. Whilst BSA has a commitment to diversity to
ensure the elimination of discrimination against people based on
gender, ethnic group, country of birth, political or religious affiliation,
health status and people with disabilities, the over-arching principle
applied is that the most suitable person for a job is employed where
there is a vacancy.
Current staff summary:
Board
Senior Executive
Senior Management
Managers
Administration Staff
Skilled Workers
Percentage of Employment
Female
0%
12%
15%
8%
70%
3%
Male
100%
88%
85%
92%
30%
97%
BSA is also committed to recruiting, training and retaining talented
future leaders, with apprentice and trainee employees making up
13.2% of our workforce.
BSA LIMITED ANNUAL REPORT 2013
7
MANAGING DIRECTOR’S REPORT
Allstaff Airconditioning is nearing the completion
of the air conditioning and ancillary systems design
and construction contract for the Charles Perkins
Centre, NSW. Triple ‘M’ Fire has also been contracted
to deliver the fire and security systems.
TECHNICAL DESIGN AND CONSTRUCTION PROJECTS (TDCP)
Despite difficult trading conditions, the total forward order book for
TDCP stands at $277 million (2012:$208 million). This includes the
recent awards of:
•
•
•
New Royal Adelaide Hospital;
150 Collins Street, a 12 level commercial building housing
Westpac in Melbourne; and
5 Martin Place, a 20 level office high-rise in Sydney, an
iconic building in the Sydney CBD, better known as the CBA
‘moneybox’ building.
Other significant projects in the forward order book include:
•
•
Charles Perkins Centre in Sydney;
Swinburne University AMC in Melbourne;
• Macquarie Centre Retail in Sydney;
•
•
Cloisters on Hay in Perth; and
Indooroopilly Retail in Brisbane.
BSA Group companies Allstaff Airconditioning (Allstaff) and Triple
‘M’ continues to be the major providers of HVAC and Fire Protection
services to the building industry, operating in all mainland states
and territories.
Allstaff and Triple ‘M’ offer a complete in-house facility for design,
engineering, fabrication, installation, commissioning and service.
Notwithstanding this in-house capability, TDCP also has long
standing arrangements with specialist subcontractors.
TDCP $249.7 million
Revenue
(2012:$283.3 million)
TDCP $6.0 million
EBITDA
(2012:$8.7 million)
NB: Excludes Corporate Recharges
Nearing completion, or recently completed, major projects include:
•
•
•
•
•
•
•
Fiona Stanley Hospital in Perth;
Liverpool Hospital in Sydney;
Queensland Institute of Medical Research in Brisbane;
Olivia Newton John Centre in Melbourne;
CSL Biotherapies in Melbourne;
Kinghorn Cancer Centre in Sydney; and
Hunter Medical Research Institute in the Hunter Region of
NSW.
Fiona Stanley Hospital, in Perth, remains the largest HVAC contract
awarded in Australia and is now in its final stages of commissioning.
8
BSA LIMITED ANNUAL REPORT 2013
Triple ‘M’ was engaged to construct the mechanical
services at Metronode’s Sydney and Illawarra data
centres. Triple ‘M’ installed and commissioned Air
Handling Units, Exhaust and associated systems.
Metranode
BSA LIMITED ANNUAL REPORT 2013
9
MANAGING DIRECTOR’S REPORT
BSA’s Technical Field Force Solutions continues to
provide installation and maintenance services to
Optus customers.
TECHNICAL FIELD FORCE SOLUTIONS (TFFS)
On 14 December 2012, TFFS was awarded an extension to its
existing contract with Foxtel, Australia’s leading subscription
television provider. This contract extends BSA’s existing
metropolitan services to 2017 (an additional two years), and
includes 100% of field activities in regional Australia. This new
opportunity presented itself through a formal tender process,
resulting from Foxtel’s acquisition of Austar.
In October 2012, BSA was awarded a contract with the
Department of Broadband, Communication and the Digital
Economy to provide services to convert to digital television,
Household Assistance Scheme (HAS) and Satellite Subsidy
Scheme (SSS) customers in Adelaide, Brisbane and Perth licence
areas. HAS provides practical and technical in-home assistance,
by BSA technicians, to vulnerable Australians who may otherwise
have difficulty converting to digital television. In June 2013, BSA
was also awarded the contract to provide the same services to
Sydney licence areas.
Our partnership with one of Australia’s largest
telecommunications providers, Optus, is now in its 14th year
and BSA looks forward to growing the range of services that we
currently deliver to Optus as we move into the new financial year.
Throughout FY2013, TFFS completed approximately 500,000
installations, upgrades and service calls across Australia, and
continues to position itself as a leader in high volume, ticket
of work order management. The BSA team has an extremely
effective logistics and management system in place, and late
2013 and beyond will see further deployment of our upgraded
field mobility solution.
BSA’s Registered Training Organisation, BSA Advanced Learning
(BAL), continues to grow, training over 2,000 students this financial
year. BAL is now providing training for NBN and facilitates the
following courses:
•
•
•
•
•
•
•
•
•
•
•
•
Diploma of Business Administration;
Certificate III & IV in Front Line Management;
Construction Induction Training (White Card);
NBN Safety and Awareness;
NBN Fibre Drop Line;
Certificate II Telecommunications for Pre-Traineeships for
BSA Foxtel Platform and Silcar NBN;
Certificate III Digital Reception to both up skill existing
technicians and for new trainees;
Certificate III Telecommunications for Silcar NBN Trainees;
Induction training for technicians on the HAS project;
OHS re-accreditation and Fibre accreditation for Telstra
Learning;
Customer Service Training; and
Service Call refresher training for Foxtel Technicians.
BAL also assisted the Industry Skills Council in the development of
competencies in telecommunications, specifically for NBN works.
On 30 August 2013, BSA received an email from the NSW Office
of State Revenue (OSR) concerning a possible payroll tax-related
liability that principally related to TFFS, with further detail
outlined above.
10 BSA LIMITED ANNUAL REPORT 2013
BSA and Foxtel’s transition into regional
Australia (formerly Austar activity) began on
2 August 2013 in the Northern Territory.
TFFS $134.8 million
Revenue
(2012:$137.3 million)
TFFS $5.1 million
EBITDA
(2012:$7.3 million)
NB: Excludes Corporate Recharges
BSA LIMITED ANNUAL REPORT 2013
11
MANAGING DIRECTOR’S REPORT
Technical Maintenance Services has extended
its service offering. TMS now provides Electrical
Services in addition to Mechanical, Fire and
Essential Services.
TECHNICAL MAINTENANCE SERVICES (TMS)
LOOKING FORWARD
In its first full year as an integrated business, TMS increased revenue
by 26% to $89.8 million (2012: $71.4 million) and performed strongly
in all major markets. In particular TMS’ Western Australian operation,
BurkeAir, had revenues exceeding $50 million, doubling its revenue
since its acquisition in 2011, with revenues then of circa $27 million.
The outlook for the new financial year across most market sectors
remains challenging but BSA has invested well and developed
strong forward workloads for each of our three Business Units.
The mantra for FY2014 is steady state, improve earnings, optimise
working capital and reduce net debt.
There has been a strong focus on building the portfolio of recurring
maintenance works with major institutions in health, tertiary
education, mine camps, commercial property and retail shopping
centres. Notable contract wins have been Sydney University, Monash
University, Federation Centres (NSW), the Victorian sites for CBRE,
Fortescue Metals Group, and Northern Territory Power and Water.
These contracts were mainly won late in the second half of the year
and position TMS well for the next financial year.
Following the slow-down of new projects in the resource sector,
profits were adversely impacted by one-off debtor write downs, after
the sudden collapse of two builders in the North West resources
sector. However, TMS has strengthened its credit procedures and
renewed its focus on providing maintenance services to large
profitable clients.
The Company’s investment in the safety and wellbeing of our
staff and contractors will continue, as will far broader risk
management initiatives, and corporate governance programs.
Again I would like to thank BSA’s many talented and committed
staff, and contractors. I look forward to their continued support
for the years ahead.
Your Board continues to be very supportive and I again extend
my thanks to the BSA Chairman and Directors for their guidance
and assistance.
Investment in TMS’ mobility solution has continued with the
successful completion of its proprietary system SECURE, which has
now been deployed nationally across the entire technician base via
iPad devices. Our system, through web portals, delivers detailed asset
level reporting, real-time service records and dashboard reporting.
Steve Nash
Managing Director
30 September 2013
12 BSA LIMITED ANNUAL REPORT 2013
TMS $89.8 million
Revenue
(2012:$71.4 million)
TMS $5.5 million
EBITDA
(2012:$6.6 million)
NB: Excludes Corporate Recharges
BurkeAir’s patented CPU II Pressurisation Unit, a
dust exclusion solution, is now being used in the
North West by resource companies eager to protect
their critical electrical componentry.
BSA LIMITED ANNUAL REPORT 2013
13
DIRECTORS’ REPORT
THE BOARD OF DIRECTORS PRESENT THEIR REPORT
A
B
C
D
E
F
G
THE BOARD OF DIRECTORS AS AT 30 JUNE 2013
The Directors of BSA Limited (the ‘Company’) present their report on the Company and its subsidiaries for the
financial year end 30 June 2013.
A - ROSS JOHNSTON
CHAIRMAN (NON-EXECUTIVE)
D - PAUL TEISSEIRE
NON-EXECUTIVE DIRECTOR
Mr Johnston is an extensively experienced Executive in the facilities
management and building services industries. Ross is the Chief
Executive Officer of Regis Group and prior to joining Regis in late
2008, was the National General Manager, Property and Facilities and
then the Chief Executive Officer, Spotless Australian Services, the
Australian arm of Spotless Group. Ross worked both internationally
and domestically with Lend Lease for 15 years. Mr Johnston has a
focus on strategic development and brings his skills in building and
repositioning major businesses to BSA. Ross joined the Board on 29
April 2008 and was appointed as Chairman from that date.
B - STEVE NASH
MANAGING DIRECTOR
AND CHIEF EXECUTIVE OFFICER
Mr Nash’s roles over the last ten years have included Chief
Executive Officer, Chief Operating Officer, and Executive General
Manager. These have been in the building services and facilities
management industries. Steve has a strong background in business
development, information systems and risk management. Steve
was appointed as Managing Director on 17 January 2011.
C - MICHAEL GIVONI
NON-EXECUTIVE DIRECTOR
Mr Givoni has had extensive Executive experience in the business to
business (B2B) areas of commerce. His particular area of expertise
is in strategy, business development and mergers and acquisitions.
Michael has held senior Executive roles in listed companies including
Spotless Group. Prior to his Executive career, Michael was a partner in a
prominent Melbourne legal practice.
Michael joined BSA as a Non-Executive Director on 23 March 2005. He
holds a number of other Non-Executive Director and Advisory Board
roles in prominent, privately owned businesses.
Mr Teisseire is a professional independent Non-Executive Director.
He spent over 20 years in private practices as a corporate lawyer
specialising in business and corporate law with a special interest
in corporate governance. He is a Non-Executive Director of Drake
Supermarkets Pty Ltd. Within the last three years, Paul was a Non-
Executive Director of Gunns Limited and Mesbon China Nylon Ltd.
Paul was appointed as a Non-Executive Director on 23 March 2005.
E - MARK LOWE
NON-EXECUTIVE DIRECTOR
Mr Lowe was appointed as a Director of BSA on 1 August 2007 upon
completion of the acquisition of the Triple ‘M’ Group. Mark brings a
wealth of knowledge to the Company from his 30 years’ experience
in the installation and maintenance of Air Conditioning and Fire
Protection services. He is a Director of Construction Information
Systems Limited (NATSPEC), and a former National President of the
Air Conditioning Mechanical Contractors Association of Australia.
Following his retirement on 2 March 2012 from Executive duties
Mark was appointed a Non-Executive Director on 2 March 2012.
F - DANIEL COLLIS
NON-EXECUTIVE DIRECTOR
Mr Collis represents Birketu Pty Ltd, BSA’s largest shareholder. Daniel
is the Chief Financial Officer and Company Secretary of WIN Television
Network Group, and is the Company Secretary of Birketu Pty Ltd. Daniel
was appointed as a Non-Executive Director on 27 November 2012.
G - MAX COWLEY
NON-EXECUTIVE DIRECTOR
Mr Cowley was appointed to the Board of BSA on 2 May 2006 and
represented Birketu Pty Ltd, BSA’s largest shareholder, until 27
November 2012 when he retired as Non-Executive Director.
14 BSA LIMITED ANNUAL REPORT 2013
Allstaff delivered to the New Horizons Project at
Monash University, sustainable solutions such as
Active Mass Cooling, Underfloor Air Conditioning,
and heat recovery on office and lab exhaust air
systems. The cutting-edge 6 Star Green Star
building was completed in August 2013.
DIRECTOR INDEPENDENCE
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Board considers three of BSA’s Directors independent, as defined
under the guidelines of the ASX Corporate Governance Council,
being: Ross Johnston, Paul Teisseire and Michael Givoni.
The Company was not subject to any particular or significant
environmental regulations of the Commonwealth, individual states,
or territories, during the financial year.
CORPORATE GOVERNANCE
The Company continued to follow best practice recommendations
as set out by the ASX Corporate Governance Council. Where the
Company has not followed best practice for any recommendation,
explanation is given in the Corporate Governance section in this
annual report. Further corporate governance information is available
on the Company’s web site at www.bsa.com.au/about-bsa.
In assessing the independence of Directors, the Board follows the
ASX guidelines as set out in the Corporate Governance Statement
within this Annual Report.
PERFORMANCE OF DIRECTORS
In accordance with Principle 8(1) of the ASX Corporate Governance
Principles and Recommendations, the Board has conducted a review
of the performance of its Directors and the Board’s function as a
whole during the period. The evaluation of Directors was completed
in accordance with the process established by the Board, led by the
chairman of the Nomination and Remuneration Committee.
COMPANY SECRETARY
The following person held the position of Company Secretary at the
end of the financial year:
Mr Graham Seppelt - Mr Seppelt has had extensive experience as a
contract accountant and in corporate advisory roles. He is currently
Company Secretary for Legend Corporation Limited, Australian
Zircon NL and UXA Resources Limited.
BSA LIMITED ANNUAL REPORT 2013
15
DIRECTORS’ REPORT
Triple ‘M’ were engaged to deliver stages
three to six of the Shell Harbour Shopping
Centre extension. The project is due for
completion in 2013.
INFORMATION ON DIRECTORS
As at 30 June 2013, the following information is provided in relation to Directors:
Director
Special Responsibilities
Ordinary Share
Options
Share Rights
Ross Johnston Chairman Non-Executive Director
Chairman Non-Executive Director
Chairman of Board
Member of Nomination and Remuneration Committee
Member of Audit and Compliance Committee
Stephen Nash Executive Director
Executive Director
Managing Director
Daniel Collis Non-Executive Director
Non-Executive Director
Member of Nomination and Remuneration Committee
Member of Audit and Compliance Committee
Michael Givoni Non-Executive Director
Non-Executive Director
Chairman of Nomination and Remuneration Committee
Member of Audit and Compliance Committee
Paul Teisseire Non-Executive Director
Non-Executive Director
Member of Nomination and Remuneration Committee
Chairman of Audit and Compliance Committee
Mark Lowe Non-Executive Director
Non-Executive Director
Member of Nomination and Remuneration Committee
Member of Audit and Compliance Committee
*Shares owned by Birketu Pty Ltd of which Daniel Collis is Company Secretary.
16 BSA LIMITED ANNUAL REPORT 2013
1,209,315
Nil
Nil
Nil
Nil
1,360,000
*58,333,195
Nil
Nil
230,000
Nil
Nil
404,769
Nil
Nil
10,315,403
Nil
Nil
BSA continues to invest in BIM technology. The
Company holds in excess of 180 Autodesk software
licences nationally, which makes BSA the largest
Autodesk subscriber in the Australian HVAC industry.
DIRECTORSHIPS HELD IN OTHER LISTED ENTITIES
Period of Appointment
Name of Company
Position Held (Non-Executive or Executive Director)
Paul Teisseire
Appointed March 2008
Resigned 20th July 2012
Appointed September 2007
Resigned 8 November 2012
Michael Givoni
Appointed 1 July 2002
Gunns Ltd
Non-Executive Director and Chairman of the Audit Committee
Mesbon China Nylon Ltd
Non-Executive Director
Chairman of the Audit and Compliance Committee
The Venture Bank Limited
Non-Executive Director
BSA LIMITED ANNUAL REPORT 2013
17
DIRECTORS’ REPORT
REMUNERATION REPORT - AUDITED
Alignment to shareholders’ interests:
This Remuneration Report details the nature and amount of
remuneration for the key management personnel of BSA Limited.
The Company’s policy for determining the nature and amount
of emoluments of Board members and Senior Executives of the
Company is as follows, and is set out under the following main
headings:
•
•
Has economic profit as a core component of plan design;
Focuses on sustained growth in shareholder wealth,
consisting of dividends and growth in share price, and
delivering constant return on assets as well as focusing the
Executive on key non-financial drivers of value; and
•
Attracts and retains high calibre Executives.
A. Principles used to determine the nature and amount of remuneration;
Alignment to program participants’ interests:
B. Details of remuneration;
C. Service agreements;
D. Cash bonuses; and
E. Share-based compensation.
The information provided in this remuneration report has been audited
as required by section 308(3C) of the Corporations Act 2001 (Cth).
A
PRINCIPLES USED TO DETERMINE THE NATURE
AND AMOUNT OF REMUNERATION
The objective of the Group’s Executive reward framework is to
ensure reward for performance is competitive and appropriate
for the results delivered. The framework aligns Executive reward
with achievement of strategic objectives, the creation of value for
shareholders, and conforms to market practice for delivery of the
reward. The Board ensures that the Executive reward satisfies the
following key criteria for good reward governance practices:
•
•
•
•
•
Competitiveness and reasonableness;
Acceptability to shareholders;
Performance linkage/alignment of Executive compensation;
Transparency; and
Capital management.
In consultation with external remuneration consultants, the
Group has structured an Executive remuneration framework that
is market competitive, and complementary to the reward strategy
of the organisation.
•
•
•
•
Rewards capability and experience;
Reflects competitive reward for contribution to growth in
shareholder wealth;
Provides a clear structure for earning rewards; and
Provides recognition for contribution.
The framework provides a mix of fixed and variable pay as well
as a blend of short and long-term incentives. As Executives gain
seniority within the Group, the balance of this mix shifts to a higher
proportion of at risk rewards.
The Board has established a Nomination and Remuneration
Committee which provides advice on remuneration and incentive
policies and practices, as well as specific recommendations on
remuneration packages and other terms of employment for Executive
Directors, other Senior Executives and Non-Executive Directors. The
Corporate Governance Statement provides further information on the
role of this committee.
Non-Executive Directors
Fees and payments to Non-Executive Directors reflect the demands
which are made on, and the responsibilities of, the Directors. Non-
Executive Directors’ fees and payments are reviewed annually by
the Board. The Board has also considered the advice of independent
remuneration consultants to ensure Non-Executive Directors’ fees
and payments are appropriate, and in line with the market.
The Chairman’s fees are determined independently to the fees of
Non-Executive Directors based on the Director’s experience and
comparative roles in the external market. The Chairman is not
present at any discussions relating to determination of his own
remuneration.
18 BSA LIMITED ANNUAL REPORT 2013
Directors fees
Short-Term Incentives
The current base remuneration for Directors was last reviewed on
26 June 2012. Directors’ fees are inclusive of superannuation and
include the requirement to sit on two or more Board committees for
the duration of their tenure. A Director’s expected time commitment
is between five to ten hours per month. Directors are reimbursed
actual expenses or paid a per diem allowance for attendance at the
monthly meetings.
Non-Executive Directors’ fees are determined within an aggregate
Directors’ fee pool limit, which is periodically recommended
for approval by shareholders. The maximum currently stands at
$600,000 per annum and was last approved by shareholders at the
Annual General Meeting (AGM) on 26 November 2007. The following
fees have applied:
Base fees including superanuation
Chairman
Other Non-Executive Directors
$158,646
$91,560
Retirement allowances for Directors
Non-Executive Directors do not participate in any share or option
incentive plan, and there are no retirement schemes or retirement
benefits, other than statutory benefits, for Non-Executive Directors.
Executive Pay
Executive remuneration packages include a bonus based on a
combination of the Company achieving a pre-determined profit
target, and the operational pre-determined target being met. Using
a profit target ensures variable reward is only available when value
has been created for shareholders, and when profit is consistent
with the business plan.
Each Executive with operational responsibilities has a short-term
incentive (STI) depending on the accountabilities of the role
and impact on organisation and business unit performance. The
maximum target bonus opportunity is 30% of base salary.
For the year ended 30 June 2013, the targets linked to the STI plans
were based on the Group and individual business objectives. The
target achievement required performance in reducing operating
cost, increasing revenue, and overall increase in EBITDA. The Group
targets are generic across the management team.
The Nomination and Remuneration Committee is responsible
for assessing whether the targets are met. Targets are set at the
beginning of the year and are assessed semi-annually. Short-term
bonus payments are adjusted, up or down, in line with under or over
achievement against target performance levels. Because short-term
targets cover several operational areas of the business, as well
as the overall company target, STI may be paid when operational
targets are achieved although the Company’s overall target may not
be met. The STI target annual payment is reviewed annually.
The Executive pay and reward framework has three components:
Options
•
•
•
Base pay and benefits, including superannuation;
Short-term performance incentives; and
Long-term incentives through participation in the employee
share scheme, employee option plan and performance
rights plan.
The combination of these components comprises the executive’s total
remuneration.
Base Pay
Base pay is structured as a total employment cost package which
may be delivered as a combination of cash and prescribed non-
financial benefits at the Executives’ discretion.
Executives are offered a competitive base pay that comprises the
fixed component of pay and rewards. Base pay for Senior Executives
is reviewed annually to ensure the Executive’s pay is competitive
with the market and meets the responsibilities of the position.
An Executive’s pay is also reviewed on promotion. There are no
guaranteed base pay increases included in the Senior Executive
terms of employment.
Benefits
Executives receive benefits including allowances.
Retirement benefits
All employees are eligible to participate in the Company’s default
superannuation fund. With the change in legislation as at 1
July 2005, employees can now exercise choice as to where their
superannuation is paid.
No options were exercised during the year ended 30 June 2013.
No amounts are unpaid on any shares issued on the exercise of options.
All options have expired as at 30 June 2013.
Employee share scheme
A scheme, under which shares were issued by the Company to
employees for no cash consideration, was ratified by shareholders
at the 2004 AGM. All permanent employees (including Executive
Directors), who were continuously employed by the consolidated
entity for a period of at least one year, were eligible to participate in
the scheme. Employees could elect not to participate in the scheme.
Under the scheme, eligible employees were offered $1,000 worth
of fully-paid ordinary shares in the Company for the year ended 30
June 2004, for no cash consideration. The market value of shares
issued under the scheme, measured as the weighted average
market price on the day of issue of the shares, was recognised in
the statement of financial position as share capital, and as part of
employee benefit costs.
Offers under the scheme are at the discretion of the Company. No offers
were made to Directors of the Company or other key management
personnel of the Group during the year ended 30 June 2013.
BSA LIMITED ANNUAL REPORT 2013
19
DIRECTORS’ REPORT
Executives Securities Loan
Employee Performance Rights Plan
The establishment of the BSA Executive Securities Plan was
approved by shareholders at the 2005 AGM. The plan was
established as a mechanism to provide the Company’s key
Executives with a direct equity involvement and incentive in the
Company, which aligns them with the shareholders.
The number of securities to be offered, and the time at which
securities may be offered to Executives, and the price and terms of
payment, shall be determined by the Board in its discretion.
The Board, may at such times as it determines, invite any Executive
to be a member of the plan.
If an Executive to whom an invitation has been issued forwards to
the Company a duly completed Loan Application and the Transfer
Documents together with his acceptance, and where appropriate his
Application for Shares, then the Company shall, in accordance with
the terms of the Loan Agreement, lend to the Executive such amount
as the Executive has applied for in the Loan Application.
The maximum amount of any loan shall be the total subscription
price for the shares applied for.
No interest is payable by the Executive under the Loan Agreement.
All shares are held in escrow until loans are fully repaid. An
Executive shall not sell, mortgage, charge, assign or otherwise
dispose of, or encumber, any shares before payment or repayment of
any amount outstanding to the Company in respect thereof.
Subject to the above restriction, and to the terms of the Loan
Agreement (if any) deemed to be entered into by the Executive,
an Executive shall, from the Date of Allotment, be the absolute
beneficial owner of the shares.
Unless the Directors of the Company otherwise provide, in the terms
of any invitation, all Plan Shares shall rank for dividends declared on
or after the Date of Allotment, and shall, in all respects, rank equally
with, and have the same rights and entitlements as all other fully
paid ordinary shares of the Company.
Offers under the scheme are at the discretion of the Company. No offers
were made to Directors of the company or other key management
personnel of the Group during the year ended 30 June 2013.
At the AGM held on 25 November 2008, shareholders approved the
introduction of the BSA Employee Performance Rights Plan.
This incentive plan is designed to increase the motivation of
eligible key staff and to create a stronger link between increasing
shareholder value and employee reward.
To achieve its corporate objectives, the Company needs to attract
and retain its key staff. The Board believes that awards made to
selected eligible employees under the proposed plan will:
•
•
•
•
•
Provide an incentive for the creation of, and focus on,
shareholder wealth;
Enable the Company to recruit and retain the talented
people needed to achieve the Company’s business
objectives;
Link the reward of key staff with the achievement of
strategic goals and the performance of the Company;
Align the financial interests of participants in the plan with
those of Company shareholders; and
Ensure the remuneration packages of employees are
consistent with market practice.
As part of the Company’s strategy, the Board wishes to be in a
position to offer rights to acquire shares in the Company to selected
eligible employees who, in the opinion of the Board, are able
by virtue of their skill and their application in performing their
allocated tasks within the Company, to improve shareholder wealth.
The flexibility of the plan rules will enable the Board to design
grants that best meet the particular circumstances.
The Board is cognisant that long-term equity-based rewards for
key staff should be linked to the achievement, by the Company, of
testing performance hurdles.
Rights granted to certain plan participants in each grant will be at
zero vesting value, and will be subject to the following performance
conditions as determined by the Board:
(i)
Service condition of two to three years; or
(ii) The Company’s performance as measured by earnings per
share (EPS), being the EPS for the relevant Measurement
Period, as determined by the Board having regard to the
financial statements. Certain growth in EPS for the shares
must be attained in respect of each Measurement Period
and pro-rata in respect of the initial Measurement Period
and service condition of three years.
The Company must achieve these performance conditions before the
rights vest.
20 BSA LIMITED ANNUAL REPORT 2013
B
DETAILS OF REMUNERATION
Details of the remuneration of the Directors, the key management
personnel of the Group (as defined in AASB 124 Related Party
Disclosures) and specified Executives of BSA and the BSA Group are
set out in the following tables.
The key management personnel of the Group are the following:
(i)
Chairman - Non-Executive Director
Ross Johnston
(ii) Managing Director / Executive Director
Steve Nash
(iii) Non-Executive Directors
Paul Teisseire
Michael Givoni
Max Cowley (Retired 30 October 2012)
Mark Lowe
Daniel Collis (Appointed 27 November 2012)
(iv) Chief Financial Officer
Karl Nixon (Resigned 5 July 2013)
Once rights have been exercised by an eligible employee (subject
to performance conditions being met), the Company may make non-
refundable contributions to either fund the purchase of a new plan
share, or to acquire, on the ASX, existing shares and transfer these to
an eligible employee.
The specific terms of a particular grant, including any performance
conditions, will be contained in the invitation and associated
documentation sent to the eligible employee.
A right granted to a participant is not transferable and may not
otherwise be dealt with, except with the Board’s approval, or by
operation of law, on death or legal incapacity.
Rights to acquire shares will not be exercisable until the end of the
final measurement period, and until those rights have satisfied all
vesting conditions and all performance hurdles established by the
Board. This is subject to a number of exceptions (including death,
cessation of employment, takeovers and schemes of arrangement).
The rights will have a specified life determined by the Board. All
grants of rights will have a life terminating five years after the grant
date or such other date, as determined by the Board.
The Board will prescribe the date when performance under the
hurdle is measured for each tranche.
On, or after, the end of the final measurement period, and provided
any performance hurdle prescribed by the Board has been achieved
and, where applicable, to the extent it has been achieved, the plan
participant may then acquire shares by exercising the rights.
A right lapses if the vesting conditions are not met.
There is no Board policy in relation to the participant limiting exposure
to risk in relation to the securities issued as part of the remuneration.
There was no new issue of rights in the current year.
BSA LIMITED ANNUAL REPORT 2013
21
DIRECTORS’ REPORT
Key management personnel of the Group and other Executives of the Company and the Group
2013
Name
Short-term
Benefits
Post
Employment
Long-term
Benefits
Share-based
payments
Cash,
Salary &
Fees
Interest
Unwind
on Loans
Cash
Bonus
Superannuation
Long
Service
Leave
Termination
Benefits
Rights
Rights
Total
Performance
Related
$
$
$
$
$
$
$
%
$
%
Non-Executive Directors
Ross Johnston
Paul Teisseire
Michael Givoni
Max Cowley
(Retired 30 October 2012)
Mark Lowe
Daniel Collis
(Appointed 27 November 2012)
148,993
84,000
83,862
25,707
83,862
49,921
-
-
-
-
-
-
-
-
-
-
-
-
9,653
7,560
7,547
2,314
7,547
4,493
Sub-total Non-Executive Directors
476,345
-
-
39,114
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
158,646
91,560
91,409
28,021
91,409
54,414
-
515,459
-
-
-
-
-
-
-
( 66,063)
( 13.41)
492,764
( 13.41)
( 59,287)
(20.45)
289,950
( 20.45)
45,427
8,651
25,000
5,795
109,541
14,446
-
( 125,350)
1,298,173
-
Executive Director
Stephen Nash
Chief Financial Officer
Karl Nixon
(Resigned 5 July 2013)
504,749
318,442
Total compensation
1,299,536
-
-
-
-
-
-
22 BSA LIMITED ANNUAL REPORT 2013
2012
Name
Non-Executive Directors
Ross Johnston
Paul Teisseire
Michael Givoni
Max Cowley
Mark Lowe (Retired as Executive
Director on 2 March 2012)
Short-term
Benefits
Post
Employment
Long-term
Benefits
Share-based payments
Cash,
Salary &
Fees
Interest
Unwind
on Loans
Cash
Bonus
Superannuation
Long
Service
Leave
Termination
Benefits
Rights
Rights
Total
Performance
Related
$
$
$
$
$
$
$
%
$
%
140,000
-
80,000
-
80,000
-
80,000
-
-
-
-
-
12,600
-
-
-
-
152,600
7,200
-
-
-
-
87,200
7,200
-
-
-
-
87,200
7,200
-
-
-
-
87,200
-
-
-
-
287,991
160,000
3,934
30,327
3,512
94,656
( 54,197)
( 10.30)
526,223
20.11
Sub-total Non-Executive Directors
667,991 160,000
3,934
64,527
3,512
94,656
( 54,197)
940,423
Executive Director
Stephen Nash
Chief Financial Officer
Karl Nixon
494,143
50,000
-
43,780
8,552
-
66,063
9.97
662,538
17.52
311,000
35,000
-
26,981
6,327
-
5,564
1.45
384,872
10.54
Total compensation
1,473,134 245,000
3,934
135,288
18,391
94,656
17,430
1,987,833
The amounts disclosed above in relation to cash bonuses include any under accrual of 2011 bonuses paid during 2012, where applicable.
BSA LIMITED ANNUAL REPORT 2013
23
DIRECTORS’ REPORT
Performance Income as a Proportion of Total Remuneration
C
SERVICE AGREEMENTS
Executive Directors and Executives are paid performance based
bonuses based on set monetary figures, rather than proportions
of their salary. This has led to the proportions of remuneration
related to performance varying between individuals. The
Nomination and Remuneration Committee has set these bonuses
to encourage achievement of specific goals that have been given
a high level of importance to the future growth and profitability
of the consolidated Group.
The Nomination and Remuneration Committee will review
the performance bonuses to gauge their effectiveness against
achievement of the set goals, and adjust future years’ incentives
as they see fit, to ensure use of the most cost effective and
efficient methods.
Name
Other key management personnel (Group)
Stephen Nash
Karl Nixon
On appointment to the Board, all Non-Executive Directors enter into
a service agreement with the Company in the form of a letter of
appointment. The letter summarises the Board policies and terms,
including compensation, relevant to the office of Director.
Remuneration and other terms of employment for the Managing
Director and the other key management personnel are also
formalised in service agreements. Each of these agreements provide
for the provision of performance-related cash bonuses, other
benefits, car allowances, and participation, when eligible, in the BSA
Limited Option Plan, and the BSA Performance Rights Plan. Other
major provisions of the agreements relating to remuneration are set
out below.
All contracts with Executives may be terminated early by either
party with three to six months’ notice.
D
CASH BONUSES
The cash bonus granted to Mark Lowe in 2012 was at the discretion
of the Nomination and Remuneration Committee. Bonuses vested as
per the below table during the financial year ended 30 June 2013.
Key management personnel and Executives are also entitled to a
short-term cash incentive based on performance criteria described
in section A to this Remuneration Report. Details of these FY2013
short-term incentives recognised as remuneration, forfeited or
available for vesting in future financial years, is outlined below.
Included in
Remuneration
% Vested in
current year
% Forfeited
in current year
-
-
-
-
100
100
24 BSA LIMITED ANNUAL REPORT 2013
E
SHARE-BASED COMPENSATION
Executives Securities Plan
Set out below are summaries of securities held in escrow:
Grant Date
Issue Price (cents)
Balance at Start of the
Year
Granted During the Year
Released from Escrow
During the Year Based on
Full Loan Repayment
Balance in Escrow at End
of the Year
Number
Number
Number
Number
Consolidated and parent entity
13 Oct 2006
19 Jul 2007
11 Sep 2007
13 Sep 2007
14 Dec 2007
10 Feb 2009
Total
0.23
0.63
0.68
0.68
0.68
0.10
700,000
1,600,000
150,000
200,000
400,000
1,700,000
4,750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
700,000
1,600,000
150,000
200,000
400,000
1,700,000
4,750,000
BSA LIMITED ANNUAL REPORT 2013
25
DIRECTORS’ REPORT
Employee Performance Rights Plan
Set out below are summaries of Rights issued to key management personnel under the plan:
Balance at
Start of the
Year
Granted
During the
Year
Released
from Escrow
during the
Year
Forfeited
During the
Year
Balance in
Escrow at
End of the
Year
Fair
Value
per
Right at
Grant
Date
Aggregate
Fair Value
Number
Number
Number
Number
Number
$
$
454,000
454,000
1,360,000
613,000
2,881,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
454,000
0.160
72,640
454,000
0.195
88,530
1,360,000
0.190
258,400
613,000
0.190
116,470
2,881,000
536,040
Name
Grant Date
Exercise Date
Expiry Date
Consolidated and parent entity
Karl Nixon
Karl Nixon
29 Sep 2009
29 Sep 2012
29 Sep 2014
24 Aug 2010
24 Aug 2013
24 Aug 2015
Stephen Nash
15 Nov 2011
15 Nov 2014
15 Nov 2016
Karl Nixon
Total
15 Nov 2011
15 Nov 2014
15 Nov 2016
Rights are granted over ordinary shares and nil is payable on exercise.
REMUNERATION CONSULTANTS
During the year under review, the Board engaged KPMG to review and make independent recommendations in relation to the long-term and short- term
incentive programs available to specific key management personnel and Executive management. KPMG was paid $9,000 (2012: Nil) for that advice.
The consulting arrangement was initiated by the Chairman of the Board and the Nomination and Remuneration Committee.
No other advice was sought from the remuneration consultant during the year.
As no contact was made between the consultant and Executive management, the Board is satisfied that the recommendations were free from undue
influence by Executives. The remuneration consultant has confirmed that in its view, it was acting independently of management. The engagement
of KPMG was based on an agreed set of protocols that would be followed by the consultant so that it would be able to carry out its work, including
information capture and the formation of its recommendations, free from undue influence by members of the key management personnel and Executive
management about whom the recommendations may relate.
The Board undertook its own inquiries and review of the processes and procedures followed by KPMG, and is satisfied that KPMG’s remuneration
recommendations were made free from such undue influence.
End of Audited Remuneration Report
26 BSA LIMITED ANNUAL REPORT 2013
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and each Board committee held during the year ended 30 June 2013, and the
number of meetings attended by each Director were:
Board Meetings
Audit and Compliance
Committee Meetings
Nomination and Remuneration
Committee Meetings
A
15
15
1
15
12
15
7
B
15
15
6
15
15
15
8
A
5
*
1
5
4
5
2
B
5
*
2
5
5
5
2
A
3
*
1
3
3
3
1
B
3
*
2
3
3
3
1
Ross Johnston
Stephen Nash
Max Cowley
Michael Givoni
Paul Teisseire
Mark Lowe
Daniel Collis
A
B
*
Number of meetings attended
Number of meetings held during the time the Director held office or was a member of the Committee during the year
Not a member of the relevant committee, but invited to attend the Audit and Remuneration Committee meetings
RETIREMENT, ELECTION AND
CONTINUATION IN OFFICE OF DIRECTORS
OPTIONS
Directors are subject to retirement by rotation and election by
shareholders at a general meeting. No Director, other than the
Managing Director, may remain on the Board for more than three
years without re-election. Where a Director is appointed during
the year, the Director will hold office until the next Annual General
Meeting (AGM), and then be eligible for election.
Ross Johnston is the Director retiring by rotation who, being eligible,
offers himself for re-election. Daniel Collis is a Director elected
during the year and, being eligible, offers himself for election.
INDEMNIFYING OFFICERS OR AUDITORS
During the year, the Company paid a premium for a contract insuring
all Directors, secretaries, Executive officers and officers of the
Company, and of each related body corporate of the Company. The
insurance does not provide cover for the independent auditors of
the Company, or of a related body corporate of the Company.
In accordance with usual commercial practice, the insurance
contract prohibits disclosure of details of the nature of the liabilities
covered by the insurance, the limit of indemnity and the amount of
the premium paid under the contract.
No liability has arisen under this indemnity as at the date of this
report.
As at the date of this report, there were no unissued ordinary shares
of the Company under option.
During the year ended 30 June 2013, no ordinary shares of the
Company were issued on the exercise of options granted under the
BSA Limited Employee Option Plan. No further shares have been
issued since that date. No amounts are unpaid on any of the shares.
RIGHTS
As at the date of this report, the unissued ordinary shares of the
Company, under right, are as follows:
Grant Date
Date of Expiry
Exercise Price
10 Feb 2009
21 Feb 2014
29 Sep 2009
29 Sep 2014
24 Aug 2010
24 Aug 2015
14 Nov 2011
24 Nov 2016
$0.00
$0.00
$0.00
$0.00
Number under
Right
115,000
78,967
963,500
2,539,000
3,696,467
During the year ended 30 June 2013, 208,967 ordinary shares of the
Company were issued on the exercise of rights granted under the
BSA Limited Employee Performance Rights Plan. No further shares
have been issued since that date. No amounts are unpaid on any of
the shares.
No person entitled to exercise the right had, or has, any right by
virtue of the right to participate in any share issue of any other body
corporate.
BSA LIMITED ANNUAL REPORT 2013
27
DIRECTORS’ REPORT
Allstaff technicians utilise BSA’s reporting
software SECURE on their mobile devices
to check and record the calibration and set
points of equipment such as Johnson Controls
variable speed drives [featured here].
PROCEEDINGS ON BEHALF OF THE COMPANY
AUDITORS’ REMUNERATION
No person has applied to the court under section 237 of the
Corporations Act 2001 (Cth) for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the
Company is a party, for the purpose of taking responsibility on
behalf of the Company for all, or part, of those proceedings.
No proceedings have been brought or intervened on behalf of
the Company with leave of the court under section 237 of the
Corporations Act 2001 (Cth).
NON AUDIT SERVICES
The Company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or Group are
important.
Details of the amounts paid or payable to the auditor (Deloitte
Touche Tohmatsu) for audit and non-audit services during the year
are set out below.
The Board of Directors has considered the position and in
accordance with the advice received from the audit committee, is
satisfied that the provision of non-audit services by the auditor,
as set out below, did not compromise the auditor independence
requirements of the Corporations Act 2001 (Cth) for the following
reasons:
•
•
All non-audit services have been reviewed by the Audit
Committee to ensure they do not impact the impartiality
and objectivity of the auditor; and
None of the services undermine the general principles
relating to auditor independence as set out in Professional
Statement APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the auditors
own work, acting in a management or a decision making
capacity for the Company, acting as advocate for the
Company or jointly sharing economic risk and rewards.
Amounts paid/payable to Deloitte for:
Auditing or reviewing the financial report
Taxation services
Other non-audit services
2013
$
2012
$
302,430
219,419
48,136
347,552
436,226
345,382
AUDITORS INDEPENDENCE DECLARATION
The lead auditors’ independence declaration for the year ended 30
June 2013 as required under section 307c of the Corporations Act
2001 (Cth) has been received and can be found on page 40 of this
report.
ROUNDING OF AMOUNTS
The Company is an entity to which ASIC Class Order 98/100 applies.
Accordingly, amounts in the Financial Statements and Directors’
Report have been rounded to the nearest thousand dollars.
Signed in accordance with a resolution of the Board of Directors.
Ross Johnston
Chairman
30 September 2013
28 BSA LIMITED ANNUAL REPORT 2013
CORPORATE GOVERNANCE STATEMENT
The Company, through its Board and Executives, recognises the need to establish and maintain corporate
governance policies and practices, which reflect the requirements of the market regulators and participants, and
the expectations of members and others who deal with the Company.
These policies and practices remain under constant review as the
corporate governance environment and good practice evolve.
PRINCIPLE 1
LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
This statement outlines the Company’s system of governance during
the financial year and the extent of the Company’s compliance, as at
the end of the financial year, by reference to the second edition of the
ASX Corporate Governance Principles and Recommendations with
2010 Amendments and to the Corporations Act 2001 (Cth).
As at the date of publication, the Company complies with the
recommendations in all respects, other than the requirement for
the majority of the Directors of the Company to be independent,
and the recommendation that there be two separate committees
for remuneration and nomination. Further, in undertaking a review
of the Company’s current practices, the Company has established
a new Code of Conduct, a Whistleblowing Policy, as part of a
whistleblowers program, and a Diversity Policy which sets out the
diversity targets from which the Company will report against. The
Company has established a new Code of Conduct, having regard
to the growth of the Company over past years, and the changing
industry. Corporate governance documentation including charters
and relevant corporate policies and codes referred to in this
statement can be found on the www.bsa.com.au website.
1.1 Functions of Board and Management
•
Strategy and direction
-
-
Setting policies regarding the Company’s overall
strategic direction, and plans for each of the
Company’s Business Units, key business and
financial objectives; and
Approving any significant acquisitions or disposals
of assets, and significant expenditure.
•
Financial controls, compliance and risk management
-
-
-
-
Approving annual operating and capital
expenditure budgets;
Monitoring and approving financial statements and
published reports, including the Directors’ Report
and the Corporate Governance Statement;
Approving any significant changes in accounting
policies or procedures; and
Reviewing the effectiveness of the internal
control systems and risk management processes,
and compliance with statutory and regulatory
obligations which, if not complied with, would have
a material effect on the Company’s business.
•
Capital and debt structure
-
Approving any changes to the Company’s debt and
capital structure including any reductions in share
capital, buy backs, or issue of new securities.
•
Appointments
-
Appointing Directors to the Board, following a review
by the Nomination and Remuneration Committee;
BSA LIMITED ANNUAL REPORT 2013
29
Continuous disclosure – keeping the Board and the market
fully informed about material developments; and
Selection of senior management – making
recommendations for the appointment of senior
management, determining terms of appointment, and
evaluating performance and development of senior
management.
1.2 Process for Evaluating the Performance of Senior Executives
The Company has an established process of objective setting and
performance review of all staff.
Senior Executives have defined objectives which are agreed at the
commencement of each financial year. Their performance against
these objectives is assessed annually, in addition to regular feedback
during the performance period. The potential future development
of the Executive is discussed, together with any training required
to assist in achieving the development objectives and progression
within the Company.
In the case of the Senior Executives (including the Managing
Director), an assessment of their performance is undertaken by the
Nomination and Remuneration Committee and the Board.
In addition to the induction program provided to new employees,
new members of the Executive Management team undertake
an induction program customised to their needs. This typically
includes one on one meetings with every member of the Executive
Management team, and visits to major sites. Senior Executives and
senior managers also participate in training sessions on key topics
of relevance such as changes in corporate governance standards,
legislation, and compliance.
1.3 Performance Evaluation
During the financial year, each member of the Executive
Management team, including the Managing Director, was subject to
a performance review as described in 1.2 above.
CORPORATE GOVERNANCE STATEMENT
-
-
-
Appointing and reviewing the performance of the
Managing Director against objectives set by the
Board; and
Approving the Boards of subsidiary companies; and
•
•
Appointing the Company Secretary.
•
Delegation of authority
-
-
Approving any changes to the membership or
charter of any committee of the Board; and
Determining the scope of authority delegated to
the Managing Director, the Chief Financial Officer,
or other Executive Management team members.
•
Policies
-
Approving significant policies for the Company
including the Code of Conduct, security trading
policies for Directors and Senior Executives, health
and safety policies, risk management policies, and
continuous disclosure and communications policies.
•
Corporate governance matters
-
-
-
-
Determining the independence of Non-Executive
Directors;
Taking into account the recommendations of the
Nomination and Remuneration Committee in
determining the remuneration of Non-Executive
Directors;
Determining the resolutions and documentation to
be put to members in general meetings;
Approving announcements and press releases
concerning matters decided by the Board,
including announcements relating to the operating
performance of the Company.
The Board has delegated a number of responsibilities to its
Committees. The role and responsibilities of these Committees
are explained later in this statement. Directors may attend any
Committee meetings. The Board receives copies of the minutes of all
the Committee meetings.
Day-to-day management of the business and operations of the
Company is delegated by the Board to management through the
Managing Director, subject to the agreed authority limits. The Board
has delegated, to management, responsibility for:
•
Strategy – development of strategies and the making of
recommendations to the Board on such strategies;
• Management – management and performance of the
Company in accordance with the strategy, business plans
and policies approved by the Board;
•
Financial performance – developing the Company’s
annual budget, managing day-to-day operational and
capital expenditure, and ensuring that the Financial
Reports present a true and fair view of the Company’s
financial condition, and are in accordance with the relevant
accounting standards;
•
Risk management – establishing and maintaining effective
risk management frameworks and internal control systems;
30 BSA LIMITED ANNUAL REPORT 2013
PRINCIPLE 2
STRUCTURE THE BOARD TO ADD VALUE
The membership of the Board is reviewed by the full Board, from
time to time, having regard to the ongoing needs of the Company
and the Company’s Constitution. It is the policy of the Board that
its membership should reflect an appropriate balance between
Executive members possessing extensive direct experience and
expertise in the business activities of the Company, and Non-
Executive members who bring to the Board a broad range of general
commercial expertise, experience and qualifications.
The Group’s objective is that the Board should be of a size and
composition that is conducive to effective decision making, with the
benefit of a variety of perspectives and skills and in the interests of
the Company.
The appointment of a new member to the Board is made after
consultation with the Nomination and Remuneration Committee and
the Board. New Directors are initially appointed by the full Board and
must then submit themselves to election by members of the Company
at the Annual General Meeting (AGM) following their appointment.
On 10 October 2012, the Company announced that Mr Max Cowley
would not seek re-appointment at the 30 October 2012 AGM, and
would retire his position as a Non-Executive Director of the Board,
from that date. On 27 November 2012, the Company announced
that Mr Daniel Collis would assume the position of a Non-
Executive Director.
Board renewal and succession planning is part of the Company’s
overall governance program and the Company remains committed
to a Board which includes a mix of Non-Executive members who
have outstanding track records and reputations at the highest levels
of business and commerce generally.
The Company has undertaken a review of its practices on diversity.
This has included an assessment of the relevant policies to codify
the Company’s position on diversity; and, in particular, the targets
from which the Company will report against. Further information
on how the Company is currently addressing the issue of diversity is
contained in section 3 of this statement.
2.1 Independent Directors
The composition of the Board is set out in the table below:
Name
Position
Independent
Ross Johnston
Chair/Non-Executive Director
Stephen Nash
Managing/Executive Director
Michael Givoni
Non-Executive Director
Paul Teisseire
Non-Executive Director
Mark Lowe
Non-Executive Director
Daniel Collis (1)
Non-Executive Director
Max Cowley (2)
Non-Executive Director
Yes
No
Yes
Yes
No
No
No
The Board currently has six members. Of these, three are
independent Non-Executive Directors. These Directors are
considered by the Board to be independent of management and free
of any business or other relationship, or any other circumstance that
could materially interfere with the exercise of objective, unfettered
or independent judgement.
50% of Directors are independent. Therefore, a majority of the
Directors on the Board are not independent.
The Board considers that it should include significant representation
by Directors who are capable and willing to make decisions which
are in the best interests of members, free from interests and
influences which conflict with that duty, and are also independent of
management.
The Board continually assesses the independence of each Director
in accordance with the interests they have disclosed, and such other
factors as the Board determines are appropriate.
In making this determination, the Board is seeking to assess
whether Directors are:
•
•
•
Independent of management;
Free of any business or other relationship that could
materially interfere or be perceived to materially interfere
with their unfettered and independent judgement; and
Capable of making decisions without bias and which are in
the best interests of all members.
A Non-Executive Director will not be regarded as an independent
director if that Director:
•
Is a substantial shareholder of the Company or an officer
of, or otherwise associated directly with, a substantial
shareholder of the Company;
• Within the last three years has been employed in an
Executive capacity by any member of the Company, or been
a Director after ceasing to hold any such employment;
• Within the last three years has been a partner or a senior
management Executive with audit responsibilities of a firm
which has acted in the capacity of statutory auditor of any
member of the Company;
• Within the last three years has been a principal, employee
or consultant of a material professional adviser to any
member of the Company;
•
•
•
Is a principal, employee or associate of a material supplier
to, or material customer of, any member of the Company;
Has a material contractual relationship with any member of
the Company other than as a Director of the Company; and
Has any interest, or business, or other relationship, which
could materially interfere with the Director’s ability to act
in the best interests of the Company, and independently of
management.
(1) Mr Collis was appointed to the Board on 27 November 2012.
(2) Mr Cowley retired his position on the Board at the
Annual General Meeting on 30 October 2012.
Biographies of the Directors are included in the section on the
Board of Directors in this Annual Report.
As regarding the Non-Executive Directors, applying the criteria
set out in the Board Charter, the Board has made the following
determinations:
• Mr Daniel Collis (1) is not independent given that he is a
Director, and Company Secretary, of the major substantial
shareholder in the Company;
BSA LIMITED ANNUAL REPORT 2013
31
CORPORATE GOVERNANCE STATEMENT
• Mr Mark Lowe is not independent (following his resignation
as an Executive in March 2012), given his long standing
Executive role with the Company;
• Mr Stephen Nash is not independent given that his role is
that of Managing Director, an Executive Director.;
• Mr Max Cowley (2) is not independent given that he was a
Director, and Company Secretary, of the major substantial
shareholder in the Company; and
• Mr Ross Johnston, Mr Michael Givoni and Mr Paul Teisseire
are all considered to be independent Directors.
(1) Mr Collis was appointed to the Board on 27 November 2012.
(2) Mr Cowley retired his position on the Board at the Annual General
Meeting on 30 October 2012.
The Board, through the Nomination and Remuneration Committee,
has come to the conclusion that whilst 50% of the Board is
independent, the balance of skills and experience required for
Board members for the size and development of the Company
is appropriate. The Board is confident that each Non-Executive
Director brings independent judgment to bear on Board decisions.
That conclusion was reached based on the Board’s knowledge of
the significant contributions made by each Director to the business
of the Board, and its Committees. This includes the willingness of
the Directors to debate issues openly and constructively and freely
express their views and opinions on matters being considered by the
Board, including occasions where those views are contrary to those
expressed by the Executive Directors and management.
Each Non-Executive Director has signed a letter of appointment
which, amongst other things, places an onus on each independent
Director to promptly and fully disclose to the Board any matter or
circumstance which may impact on their status as an independent
Director, or the likely perception of their status, as an independent
member of the Board. Where the Board concludes that a Director
has lost their status as an independent Director, that determination
will be advised to the market.
The Nomination and Remuneration Committee’s Charter discloses a
process for selection and appointment of new Directors and re-election
of incumbent Directors. The role and responsibilities of the Nomination
and Remuneration Committee are set out later in this statement.
2.2 Chair and Independence
Council recommends that listed companies should have an
independent Director as Chair, and that the roles of Chair and Chief
Executive Officer should not be held by the same person.
Mr Ross Johnston is considered to be independent by the Board,
having regard to the guidelines for independence.
2.3 Nomination and Remuneration Committee
The Board has appointed a combined Nomination and Remuneration
Committee, with the two distinct roles, having regard to the size and
requirements of the Company.
The objective of the Nomination and Remuneration Committee is to
support and advise the Board in relation to the identification, selection,
recommendation and appointment of, the Board, the Directors and the
Senior Executives, as well as the ongoing evaluation and review of
their performance. It is also responsible for the general remuneration,
recruitment and termination policies and practices.
The members of the Committee are set out in the Directors’ Report.
The Board recognises the ASX’s recommendation that the Nomination
and Remuneration Committee should be chaired by an independent
Director. Mr Michael Givoni is an independent Director.
The Committee met three times during the financial year, per the
details set out in the Directors’ Report. The Executive Directors may
be invited to attend Nomination and Remuneration Committee
discussions.
The functions undertaken by the Committee in discharging their
responsibilities include:
•
•
•
•
•
Assessing the skills of current Board members against the
collective skill set required by the Board to competently
discharge the Board’s duties, having regard to the strategic
direction of the Company;
Regularly reviewing and making recommendations to
the Board regarding the structure, size, diversity and
composition (including the balance of skills, knowledge and
experience) of the Board; and reviewing the effectiveness
of the Board as a whole, and continually reviewing the
leadership needs of the Company, both Executive and Non-
Executive;
Identifying suitable candidates (Executive and Non-
Executive) to fill Board vacancies as and when they arise,
and nominating candidates for approval of the Board;
Annually reviewing the performance of the Board; and
Ensuring the existence of proper succession planning
processes and plans for the Board.
No member of the Committee will participate in a review of their
own performance or re-appointment.
The Nomination and Remuneration Committee Charter, as approved
by the Board, appears in the corporate governance section of the
www.bsa.com.au website.
Recommendations regarding future appointment of additional
Directors will be made by the Nomination and Remuneration
Committee, and considered by the Board, having regard to:
•
•
•
The assessment made on the skill set required to discharge
the responsibilities of the Board, compared with the skills
currently represented on the Board;
The current strategic direction of the Company, and the
consequent need to consider skills which may be required
in the future; and
The suitability of available candidates, identified in the
context of a detailed description of the role and capabilities
required, for a particular appointment.
Recommendations made by the Nomination and Remuneration
Committee will be considered by the Board, which retains an
unfettered discretion on the appointment of a Director to fill a
casual vacancy or act as an additional Director, prior to the formal
election of that Director, by the members of the Company at a
General Meeting.
Upon appointment, a new Director undertakes an induction program
specifically designed to their needs, to assist in familiarising them
with issues relating to the current business before the Board.
32 BSA LIMITED ANNUAL REPORT 2013
New Board members are provided with the opportunity to experience
the operations of the Company, and to meet and discuss all aspects
of the Company’s operations with key members of Executive
Management. As part of the induction program, access is provided
to information in areas such as; operations, finance, treasury, and risk
management, to assist the new Board member as required.
New Directors receive a letter of appointment which sets out the
main terms and conditions on which each Director is appointed. The
letter of appointment conforms to the Recommendations of the ASX
Corporate Governance Council.
The letter of appointment also sets out a procedure in relation
to independent professional advice, at the Company’s expense.
Directors are able to take independent professional advice, and
are required to make that advice available to the other Directors.
Directors are encouraged to direct any enquiries or requests for
additional information to the Company Secretary, who will facilitate
a response to the query and/or provide the Director with the
requested information.
On an ongoing basis, Directors are provided with periodic updates
on legal and corporate developments, particularly those pertaining
to matters relating to the responsibilities of boards and directors
generally, health and safety, changes to the Corporations Act
2001 (Cth), corporate governance principles, tax and accounting
developments, and other matters of interest. Management conducts
regular briefing sessions to the Board and Board Committees on
operational, financial, treasury, legal, and tax issues of relevance to
the Board.
PRINCIPLE 3
PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING
3.1 Code of Conduct
Compliance Manual
As part of the Company’s ongoing commitment to high standards
of ethical conduct, the Company is committed to continually
developing a Compliance Manual which provides detailed guidance
to employees on the current laws applicable in the jurisdiction in
which they work, the standards of conduct, and the procedures to
be adopted to comply with those laws. The Compliance Manual has
been supplemented by seminars to help employees understand the
legal requirements with which the Company must comply.
The Compliance Manual deals with issues such as:
• Workplace health and safety;
•
•
•
•
•
•
Australian Consumer Law;
Employment;
Privacy;
Anti discrimination, equal opportunity and bullying;
Environmental compliance;
Corporations Act 2001 (Cth) and ASX Listing Rules
requirements; and
•
Complaints handling procedures.
The Company has provided a number of such seminars to date, and
encourages education on these core principles.
The Company Secretary is appointed and removed by the Board.
Company Values
The Company Secretary works with the Chair, the Board and the
Board Committees on all governance related issues. All Directors
have access to the Company Secretary for the purpose of obtaining
information or advice. The Company Secretary may also retain
the services of independent advisory bodies, if requested by the
Board or Board Committees. The office of the Company Secretary is
responsible for the systems and processes that enable the Board to
perform its role, and also provides secretariat services for each of
the Board Committees. The Committee agendas, papers and minutes
are available to all members of the Board.
The Board undertakes ongoing self-assessment and review of its
performance, and of the performance of the Board Committees. The
Board is committed to transparency in assessing the performance of
the Board.
The conduct of all Company employees is governed by a set of
fundamental principles to which employees are expected to adhere
to when dealing with other employees, clients, contractors, members,
and the community.
These core values require Company employees, at all times, to
conduct themselves having regard to the following:
•
•
The Safety and wellbeing of our staff is non negotiable:
We will not harm our people;
Talented and committed People are the heart of our business:
The retention and development of our staff is a business
imperative;
• We will conduct ourselves with the highest Integrity:
Uphold integrity in everything we say and do;
•
•
Teamwork is the foundation for success:
Working as one across all business units to achieve success;
Respect for our fellow workers is essential:
Treat everyone as you would expect to be treated;
• We will be Innovative and create our own future:
We will continue to strive to evolve our people and our
technology; and
•
Our Reputation is paramount:
We will ensure our decisions and behaviour enhances the
reputation of BSA.
BSA LIMITED ANNUAL REPORT 2013
33
CORPORATE GOVERNANCE STATEMENT
In adhering to those values, the Company and its employees will
achieve the following:
•
Creation of an environment that motivates and allows
employees to contribute and develop;
•
Honest, just and fair management in all dealings;
• Meeting the commitments of the Company;
•
•
•
•
•
Examination of ways to continually improve processes in a
manner which adds value;
Providing members with superior returns on a sustainable
basis;
Constantly seek new opportunities and pursue sound
growth and earning opportunities;
Conducting all activities in a safe and environmentally
responsible manner;
Contributing expertise and resources to promote positive
interaction between all members of the community; and
•
Being a leading corporate citizen.
Employee Code of Conduct
The core principles of the BSA Group are supplemented by the
Employee Code of Conduct which is provided to all employees at the
time of joining the Company, and which deals, in broad terms, with the
following matters:
•
•
•
•
The high standards of personal conduct and ethical
behaviour expected of all employees;
The duty of employees to avoid conflicts of interest
which may arise if the employee or any person or entity
associated with that employee has a business arrangement
or relationship with the Company outside their normal
employment relationship;
The duty of employees to maintain confidentiality with
respect to the Company’s information and information
provided by our contractors and clients;
The duty of employees to avoid discrimination against any
person; and
•
The Company’s policy prohibiting harassment in any form.
The Employee Code of Conduct, which is provided to, and
acknowledged by, all employees who join the Company, is reviewed
on a regular basis to ensure it remains current and relevant.
Compliance seminars to update senior management on changes to
legal requirements and procedures are conducted on a regular basis,
and all senior managers are required to pass this information on
to their staff. Senior managers are required to attend and formally
acknowledge their understanding and compliance.
It is the responsibility of each Director and employee to understand
the Company values, Code of Conduct, and other policies applicable
to them and to bring to the attention of senior management any
conduct or activities which may be in breach of those policies, so
that a proper investigation can be conducted.
Serious breaches of these policies must be reported immediately to the
Managing Director, the Chief Financial Officer, or the General Counsel,
for investigation, in accordance with the Company’s policies. Where
appropriate, the police or other regulatory authority will be informed.
Complaints are treated in a confidential manner. No action of any
kind will be taken against an employee, adviser or contractor who, in
good faith, makes an allegation against the Company, any employee,
adviser or contractor, whether or not that complaint is confirmed by
subsequent investigation.
Whistleblower Policy
Having regard to the above, the Company has implemented
a Whistleblowing Policy which forms an integral part of the
Company’s compliance program. The policy will be adopted to
ensure that concerns regarding unethical, unlawful or improper
conduct may be raised without fear of reprisal.
Under the policy, the Company has appointed a Whistleblower
Protection Officer. Employees will be encouraged to report any
genuine matter, or behaviour, that they honestly believe contravenes
the Code of Conduct, policies, or the law. Such matters may include
any actual or suspected:
•
•
•
Conduct or practices which are illegal;
Corrupt activities;
Theft or fraud;
• Misleading or deceptive conduct of any kind; or
•
Harm to public health or safety, or the health or safety of
any employee.
The Company will investigate all reported concerns appropriately,
and will, where applicable, provide feedback regarding the
investigation’s outcome. The Company will take any necessary action
in response to a report, and where no action is taken an explanation
will be provided.
Where appropriate, a third party may be engaged to assist in the
investigation.
A report will be provided to the Audit and Compliance Committee,
summarising the whistleblower activities for the preceding six
month period.
3.2 Diversity
As noted at section 2 above, the Board has undertaken a review
and assessment of its current practices, including how the Board
and the Nomination and Remuneration Committee presently take
into account the diversity criteria when identifying and assessing
potential Director candidates and members of senior management.
The Company has implemented a Diversity Policy which expressly
incorporates the diversity targets from which the Company will
report against, and which the Board and Committee will consider in
relation to their objectives and responsibilities.
The Company values an inclusive culture where all people are able
to succeed to the best of their ability. These principles also guide
our employees’ conduct in all their dealings with stakeholders of
the Company. Diversity is regarded as a key factor in enabling the
Company to attract the broadest range of talent in the market.
Our commitment to diversity requires that we work to ensure
an environment which is supportive of equality and access for
all our staff to career opportunities, development, remuneration
and benefits. Diversity includes but is not limited to gender, age,
disability, ethnicity, religion and cultural background. However,
the initial emphasis by the Company is on gender diversity with a
primary goal being to strengthen the representation of women in
management positions.
34 BSA LIMITED ANNUAL REPORT 2013
Women in BSA
The Company recognises that working towards gender diversity
and equality is essential to attracting and retaining the best talent
in our business. Currently, 14% of the Company’s total workforce
is female, with 13% representation within the Senior Executive
team. In accordance with the Workplace Gender Equality Act 2012
(the Act), the Company has reported on the distribution of gender
in the workplace, and has complied with the notification and access
requirements.
The Board has considered appropriate targets, having regard to the
industry in which the Company operates. Relevantly, the Company
has set a target of 20% female representation in the senior
management of the Company, together with a target of 20% female
representation in the senior talent and succession plans, for the next
financial year.
The Company will seek to improve each year on the target scores,
and employees’ views on diversity will be tracked via employee
surveys. The Company will also review its progress on diversity
against other organisations within this industry.
The Company has established a working group which has
reviewed the Act, with the objective of ensuring compliance to the
standardised gender equality indicators, minimum standards and
reporting requirements and implementing strategies to ensure such
compliance. The Company is aware that it must comply with the Act,
and, on that basis, will continually revise its practices and policies
to ensure it complies with, and reports against, any standardised
gender equality indicators and other minimum standards set by the
relevant Minister, having regard to the Act.
As part of this process, the Company is committed to achieving the
following objectives over the next two financial years:
•
•
•
•
•
•
The Managing Director will develop a three year plan to
address diversity targets;
The establishment of processes in relation to objective setting,
co-ordination, monitoring and reporting of diversity measures;
Implementing an education program focusing on raising
awareness of the need for diversity;
Reviewing the opportunities in non-traditional roles (eg.
construction and project managers) and, where possible and
practical, ensuring at least one woman is on the recruitment
short list;
Reviewing the hiring processes with the intention of increasing
the representation of a diverse candidate pool; and
Succession planning reviews with each Senior Executive with a
focus on improved diverse representation and career planning
for senior positions.
The Company will report against the above objectives. In the past
financial year, a review of flexible work arrangements has been
carried out. As a result, policies are currently being updated to
ensure a consistent approach, having regard to the legislation and
best practice. The Company has also commenced a review of pay
equity in order to identify remuneration gaps, based upon gender, as
well as other diversity categories, between employees performing
comparable roles.
Professional development is available for all our employees, with
additional emphasis and focus placed on leadership development
throughout all levels of our talent pipeline. All employees are provided
with opportunities to strengthen their leadership skills and capabilities,
and enhance their potential for leadership positions in the future.
The Company’s Parental Leave Policy aims to provide employees
with sufficient options and choices to enable them to devote time
and care to their new or adopted children without disadvantaging
their career. Paid parental leave is available to employees based
on a sliding scale of entitlement. Employees on parental leave
are invited to attend relevant training programs, seminars or
conferences to keep them up to date on developments within their
area of business and help support their transition back to work.
The Diversity Policy shall be continually reviewed as part of an ongoing
commitment to achieving the above objectives, and the standardised
gender equality indicators set, in accordance with the Act.
Cultural Diversity
The Company is committed to maintaining and developing
mutually beneficial and respectful indigenous partnerships with the
industries within which the Company operates, by providing real
opportunities in education, training, mentoring and employment to
indigenous Australians.
The Company continues to focus on enhancing diversity through
a range of strategies at the Board and business levels, which in
turn contribute significantly to the Company’s business and to
achievement of the business values which we have established.
3.3 Security Trading Policy
The Company is committed to promoting knowledge and awareness
of the legal, regulatory and governance requirements to which the
Company and its employees are subject, including prohibitions
against insider trading.
All Directors and employees are subject to Corporations Act 2001
(Cth) restrictions on buying, selling, or subscribing for securities in
the Company if they are in possession of price sensitive information
which has not been published.
Members of the Board, and certain employees within the
Company who have been notified that this policy applies to them,
are prohibited from trading in Company securities in certain
defined black-out periods, which include periods leading up to
an announcement of results. They are encouraged to first obtain
written, or email, consent from the Managing Director or Chair
before dealing.
At any other time, any member of the Board dealing in the
Company’s securities must notify the Company Secretary.
A copy of the Security Trading Policy is available on the www.bsa.
com.au website.
A copy of the Company’s Security Trading Policy was lodged with the
ASX and released to the market on 28 December 2010.
BSA LIMITED ANNUAL REPORT 2013
35
CORPORATE GOVERNANCE STATEMENT
PRINCIPLE 5
MAKE TIMELY AND BALANCED DISCLOSURE
5.1 Continuous Disclosure Policy
The Company’s Continuous Disclosure Policy underlines the
Company’s commitment to ensuring that the Company’s members,
and the market, are provided with high quality, relevant and accurate
information in a timely manner; and that investors are able to trade
in Company securities in a market which is efficient, competitive
and informed, as well as ensuring that market participants have an
equal opportunity to review and assess information disclosed by
the Company. The Company is also committed to complying with
continuous disclosure obligations contained in the applicable ASX
Listing Rules, and the Corporations Act 2001 (Cth).
The Policy includes a vetting and authorisation process so that
all disclosures are factual, do not omit material matters, and are
expressed in a clear and objective manner. The Policy also outlines
how the Company identifies and distributes information to members
and the market generally.
The Continuous Disclosure Policy appears on the www.bsa.com.au
website.
PRINCIPLE 4
SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
4.1 Audit and Compliance Committee
Composition
The Board has established an Audit and Compliance Committee
to ensure that an effective internal control framework exists to
safeguard the assets of the business, and to ensure the integrity and
reliability of financial and management reporting systems.
The composition of the Audit and Compliance Committee is as set
out in the Directors’ Report, with Mr Paul Teisseire, an independent
Director, chairing this Committee.
The Committee met five times during the financial year. All members
of the Committee attended all of the meetings per the details set
out in the Directors’ Report.
Audit and Compliance Committee Charter
The Audit and Compliance Committee operates under a charter
to enable it to fulfil its corporate governance and monitoring
responsibilities by:
•
•
Reviewing the adequacy of, and, where necessary,
questioning the action and judgment of management
in relation to the Company’s half-yearly and annual
financial reports prepared for release to members, the ASX,
regulators, and to the public;
Reporting to the Board on the half-year and annual reports
and financial statements of the Company;
• Making recommendations regarding the appointment,
remuneration, evaluation and removal of the Company’s
external auditor and reviewing and reporting to the Board
on the adequacy, scope and quality of the annual statutory
audit and half-year audit review, and on the integrity and
reliability of the financial statements;
• Monitoring and reviewing the effectiveness of the
Company’s internal control environment;
• Monitoring and reviewing the reliability of financial reporting;
• Monitoring and reviewing the compliance of the Company
with applicable laws and regulations;
• Monitoring and reviewing the scope and the co-ordination
of the external audit functions; and
• Monitoring the adequacy and effectiveness of compliance
systems in relation to the legal exposures of the Company.
The Audit and Compliance Committee meets with external auditors
at least twice each year (and more frequently if required), to
review the adequacy of existing external audit arrangements, and
the scope of the audit. The external auditors have a direct line of
communication at any time to either the Chair of the Audit and
Compliance Committee, or the Chair of the Board.
The Audit and Compliance Committee reports to the Board after
each Committee meeting, and the minutes of each Audit and
Compliance Committee meeting are included in the Board papers.
The external auditors, the Managing Director and the Chief Financial
Officer are invited to attend Audit and Compliance Committee
meetings at the discretion of the Committee.
A copy of the Audit and Compliance Committee charter is available
on the www.bsa.com.au website.
36 BSA LIMITED ANNUAL REPORT 2013
PRINCIPLE 6
RESPECT THE RIGHTS OF MEMBERS
6.1 Communications with Members
The Company is committed to providing all members with
comprehensive, timely, and equal access to information about its
activities, to enable them to make informed investment decisions.
The Company employs a wide range of communication approaches,
including direct communications with members, and publication of
all relevant company investor information on the www.bsa.com.au
website.
The Company uses its corporate website as a means of providing
information to members, and the broader investment community.
A section of this website is dedicated to BSA’s investors. Media
releases, investor presentations and interim and full-year financial
reports are available for review on the www.bsa.com.au website.
These announcements, presentations and reports are placed on the
website immediately after they have been released to the ASX. An
archive of announcements, presentations, and reports is retained on
the www.bsa.com.au website.
Also available for review on the www.bsa.com.au website are
notices of members’ meetings, and explanatory documents issued
by the Company in respect of those meetings. A copy of the Chair’s
address to the AGM, the AGM presentation, and the outcome of
voting on the items of business, are posted to the website following
the AGM.
Members are encouraged to attend the AGM held each year, and
to use these opportunities to ask questions and vote on important
matters affecting the Company, including the election of Directors,
the receipt of annual financial statements, and the advisory vote
on the remuneration report. The external auditor attends the AGM
and is available to answer questions. Members may appoint proxies
electronically through the www.bsa.com.au website, or via mail.
The Company encourages members to access the Annual
Report online to assist with the Company’s commitment to the
environment, as well as being more cost efficient. A printed copy of
the Annual Report will only be sent to those members who have
made an election to receive it. Otherwise members will be notified
when the Annual Report is available to be accessed online at the
www.bsa.com.au website.
Members are also encouraged to provide the Company with their
email address, so that they can be notified when the Annual Report
is available online, and also to be kept updated on other member
communications.
The Company works closely with its share registrar to monitor and
review the potential to increase the use of electronic means of
communicating with its investors.
The Communications Policy is available on the www.bsa.com.au
website.
PRINCIPLE 7
RECOGNISE AND MANAGE RISK
7.1 Risk oversight and management and internal control
The entire Board is responsible for monitoring and reviewing the
corporate policies for identifying and managing relevant risks
associated with the business of the Company, and the adequacy
of the Company’s practices and procedures in implementing those
policies. This involves monitoring and reviewing:
•
•
The Company’s policies regarding risk oversight and risk
management;
The appropriateness of the risk management and internal
control systems adopted by the Company; and
•
The Company’s continuing processes for:
-
-
-
-
The identification of material workplace health
and safety, financial, legal, and operational risks
associated with the conduct of the business of the
Company;
The maintenance of appropriate internal control
systems designed to manage key risk areas;
Assessing the above matters in conjunction with
management and the external auditors; and
Monitoring and reporting against compliance with
the risk management policies.
Operating a group of companies undertaking technical and building,
including construction related services, inevitably involves risks
of various kinds. Furthermore, operating a company which utilises
a contractor base involves risks of a different nature, which need
to be balanced with the Company’s business and management.
The Company’s objective is to ensure that those business risks
are identified and assessed, and that, where it is practical and
economical, steps are taken to mitigate the impact of any risk which
may eventuate.
The Company regards risk management as an essential element
in its management processes, with links to every aspect of the
Company’s business including health and safety issues in respect of
employees, clients, contractors and customers, the construction of
sites, and relationships with major clients, contractors, and suppliers.
The Company’s approach to risk management involves:
•
•
•
•
Pro-actively identifying risk;
Properly assessing and making informed decisions on risk
issues;
Ensuring that sound risk mitigation and management plans
are in place; and
Reviewing, as part of its regular business processes, the
operation and adequacy of its risk management systems
and the assumptions which dictate those systems.
Risk management is aimed at managing the level of risk within
parameters which are acceptable to the Company, rather than
seeking to eliminate all risks. The Company’s risk management
systems promote the need for informed and measured decision
making on risk issues based on a systematic approach to risk
identification, assessment, control, and review and reporting.
BSA LIMITED ANNUAL REPORT 2013
37
CORPORATE GOVERNANCE STATEMENT
The Company has developed and implemented a risk profile to
operate as a general guide as to identification, assessment, and
management of the various risks inherent to the Company’s
business, from a contractual perspective.
7.2 Management of material business risks
The Board has delegated specific risk related responsibilities to the
Managing Director, who, in turn, has delegated these responsibilities
to management.
Each Senior Executive, and all managers, are responsible for:
•
•
•
Assisting in the formulation of all aspects of the risk
management process;
Overseeing the implementation of the Company’s policies
and procedures by ensuring that all phases of the process
of identification, assessment, control, review and reporting
are reflected appropriately in the business processes of the
Company; and
Implementing appropriate systems for confirming
compliance with all relevant laws, and other regulatory
obligations, are complied with.
The Managing Director reports to the Board on the effectiveness of
the Company’s management of its material risks.
7.3 Managing Director and Chief Financial Officer Assurance
The Managing Director and the Chief Financial Officer are required
to confirm in writing to the Board, every half year, that in all
material respects:
•
•
•
The financial statements present a true and fair view;
That this assertion is founded on a sound system of
financial risk management and internal compliance and
control which implements the policies adopted by the
Board; and
That the Company’s financial risk management and internal
compliance and control systems are operating efficiently
and effectively in all material respects in relation to
financial reporting risks.
This assurance has been given.
PRINCIPLE 8
REMUNERATE FAIRLY AND RESPONSIBLY
The Company’s remuneration policy is designed to attract and retain
high caliber Directors and Senior Executives, capable of meeting the
specific management needs of the Company.
The Company’s current remuneration objectives and policies
regarding determination of base pay, the short term variable
bonus, and long term equity linked incentives, are explained in the
Remuneration Report, which forms part of the Directors’ Report.
Details of the remuneration of all Directors, and the five Senior
Executives receiving the highest remuneration within the Company,
are also set out in the Remuneration Report.
8.1 Nomination and Remuneration Committee
As the Company has a combined Nomination and Remuneration
Committee, the composition of the Nomination and Remuneration
Committee is as set out in the Directors’ Report.
The Board recognises the ASX’s recommendation that the
Nomination and Remuneration Committee should be chaired by
an independent chair and consist of a majority of independent
directors. The Chair, Mr Michael Givoni is independent, the
Committee consists of a majority of independent Directors. Mr
Mark Lowe is not independent given his long standing Executive
role within the Company, and Mr Daniel Collis is not independent
because he is a Director and Company Secretary of the major
substantial shareholder in the Company.
The Committee met three times during the financial year, as set out
in the Directors’ Report.
The Committee met five times during the financial year, as set out in
the Directors’ Report.
The objective of the Committee is to assist the Board in establishing
remuneration policies and practices which:
•
•
•
Enable the Company to attract and retain Executives and
Directors who will create sustainable value and returns for
members and other stakeholders;
Fairly and responsibly reward Executives and Directors,
having regard to the performance of the Company, the
Executive, and the market; and
Comply with all relevant legislation and regulations
including the ASX Listing Rules and the Corporations Act 2001
(Cth).
38 BSA LIMITED ANNUAL REPORT 2013
WORKPLACE HEALTH, SAFETY AND ENVIRONMENT
The Company is committed to ensuring the safety and wellbeing of
all employees, its clients, customers, and members of the public. To
this end, the number one value of the Company is “The safety and
wellbeing of our staff is non negotiable”. The Company provides
ongoing training across the organisation, with respect to its legal
obligations, and specific training as to operational risks in the field.
The Company places great emphasis on carrying out everything it
does in a safe manner.
The Company values the environment and recognises the
responsibility to protect our surroundings. Operations are managed
in an environmentally responsible manner, with an undertaking to:
•
•
•
Operate in compliance with relevant local environmental
legislation and regulations;
Seek to reduce the energy consumption and waste produced
per unit of output;
Educate our employees, ensuring the requirements for
environmental responsibility is integrated into work
practices training; and
• Monitor and report on environmental compliance through
management to the Board.
PRIVACY
The Company is committed to respecting stakeholders’ rights to
privacy and protecting personal information.
The Company will treat all personal information with due care, and
take reasonable steps to protect such information from loss, misuse,
unauthorised access or disclosure.
The Company’s Privacy Policy can be found on the www.bsa.com.au
website.
The Charter of the Nomination and Remuneration Committee may
be viewed on the www.bsa.com.au website.
The responsibilities of the Committee include:
•
•
•
•
•
•
Determining and reviewing remuneration policies to apply to
members of the Board, and to Executives within the Company;
Determining the specific remuneration packages for Executive
Directors (including base pay, incentive payments, equity linked
plan participation, and other contractual benefits);
Reviewing contractual rights of termination for members of
the Senior Executive team;
Reviewing and approving the policy for participation by
Senior Executives in equity-linked plans;
Reviewing and approving management’s recommendations of
the total proposed awards to be issued under each plan; and
Administering the equity-linked plans as required in
accordance with the rules of the plans.
8.2 Structure of Non-Executive Directors’ Remuneration
Fees paid to Non-Executive Directors are determined by the Board,
within the current maximum aggregate limit set by members of
the Company. Current fees and salaries are fully disclosed in the
Remuneration Report section of the Directors’ Report. Directors’
fees are reviewed annually by the Nomination and Remuneration
Committee, and by the Board, taking into consideration the level of
fees paid to Non-Executive directors by companies of a similar size
and stature.
Non-Executive Directors receive their fees in cash. The Non-
Executive Directors do not participate in schemes designed for the
remuneration of Executives, nor do they receive options or bonus
payments. The gross fee received by Non-Executive Directors is
inclusive of any contribution that the Company is obliged to pay
pursuant to the superannuation guarantee legislation. There are
no retirement schemes or retirement benefits for Non-Executive
Directors, other than statutory benefits for Non-Executive Directors.
8.3 Equity Linked Executive Remuneration
The Company has a policy to preclude its Senior Executives from
entering into transactions to limit their economic risk from investing
in Company shares, options, or rights, where those entitlements are
unvested. The Company makes Senior Executives aware of their
obligations in relation to financial commitments against shares issued
under the Executive securities plan, and has requested that they
take sufficient independent, professional advice in relation to their
individual financial position. The Company does not provide advice.
In addition to the Corporate Governance Principles and
Recommendations, the Company considers that a commitment to
workplace health and safety, and the environment, and to privacy, is
paramount to a good corporate governance programme.
BSA LIMITED ANNUAL REPORT 2013
39
AUDITOR’S INDEPENDENCE DECLARATION
The Board of Directors
BSA Limited
7 Figtree Drive,
Sydney Olympic Park
NSW 2127
30 September 2013
Dear Board Members
Deloitte Touche Tohmatsu
ABN: 74 490 121 060
Eclipse Tower
Level 19
60 Station Street
Parramatta NSW 2150
PO Box 38
Parramatta NSW 2124 Australia
DX 28485
Tel: +61 (0) 2 9840 7000
Fax: +61 (0) 2 9840 7001
www.deloitte.com.au
BSA Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of BSA Limited.
As lead audit partner for the audit of the financial statements of BSA Limited for the financial
year ended 30 June 2013, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Glen Sanford
Partner
Chartered Accountants
Member of Deloitte Touche Tohmatsu Limited
Liability limited by a scheme approved under Professional Standards Legislation.
40 BSA LIMITED ANNUAL REPORT 2013
FINANCIAL REPORT
BSA LIMITED
ABN 50 088 412 748
42 —
Consolidated Statement of Comprehensive Income
43 —
Consolidated Statement of Financial Position
44 —
Consolidated Statement of Changes in Equity
45 —
Consolidated Statement of Cash Flows
46 —
Notes to Financial Statements
99 —
Directors’ Declaration
100 —
Independent Auditor’s Report
102 —
Shareholder Information
BSA LIMITED ANNUAL REPORT 2013
41
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
Revenue
Investment revenue
Other gains and losses
Changes in inventories of finished goods
Subcontractor and raw materials used
Employee benefits expense
Depreciation expenses
Amortisation expenses
Occupancy expenses
Finance costs
Other expenses
Profit before tax
Income tax benefit /(expense)
Profit for the year
Other comprehensive income for the year, net of tax
Items that may be reclassified subsequently to profit or loss:
Gain/(loss) recognised on cash flow hedges
Total comprehensive income for the year, net of tax
Earnings per share for profit from continuing operations:
Basic earnings per share
Diluted earnings per share
Note
5
6
7
8
8
8
8
9.1
2013
$’000
474,180
357
47
2,202
(390,673)
(44,499)
(7,002)
(1,440)
(6,084)
(1,932)
(22,358)
2,798
965
3,763
(16)
3,747
2012
$’000
491,764
764
18
22
(405,466)
(42,426)
(5,373)
(2,266)
(4,897)
(1,462)
(22,477)
8,201
(2,391)
5,810
11
5,821
12
12
1.64 cents
1.60 cents
2.57 cents
2.51 cents
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
42 BSA LIMITED ANNUAL REPORT 2013
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Tax assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Other financial assets
Property, plant & equipment
Deferred tax assets
Goodwill
Other intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Provisions
Other liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Profit reserve
TOTAL EQUITY
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
Note
13
14
15
9.3
14
19
16
9.4
17
18
22
23
9.3
24
23
24
25
26
26
26
(a)
(b)
(c)
2013
$’000
2,009
85,190
5,202
1,206
93,607
1,279
3
17,866
1,981
55,185
7,473
83,787
177,394
70,532
8,545
-
8,054
87,131
14,008
1,218
242
15,468
102,599
74,795
77,797
1,313
(8,177)
3,862
74,795
2012
$’000
24,734
79,194
3,000
-
106,928
1,279
4
15,501
1,443
55,045
8,913
82,185
189,113
85,584
4,966
4,672
7,803
103,025
10,247
1,192
-
11,439
114,464
74,649
77,797
1,497
(8,177)
3,532
74,649
BSA LIMITED ANNUAL REPORT 2013
43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
Balance at 1 July 2011
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Shares issued during period
Share-based payment expense
Shares issued in satisfaction of performance conditions
Dividends paid
Balance at 30 June 2012
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Shares issued during period
Share-based payment expense
Shares issued in satisfaction of performance conditions
Dividends paid
Balance at 30 June 2013
Issued
Capital
$’000
Accumulated
Losses
$’000
75,419
(3,778)
-
-
-
2,378
-
-
-
77,797
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,399)
(8,177)
-
-
-
-
-
-
-
77,797
(8,177)
Profit
Reserve
$’000
-
5,810
-
5,810
-
-
-
(2,278)
3,532
3,763
-
3,763
-
-
-
(3,433)
3,862
Share-based
Payment Reserve
Cash Flow
Hedge Reserve
$’000
$’000
1,671
-
-
-
-
151
(300)
-
1,522
-
-
-
-
(129)
(39)
-
1,354
(36)
-
11
11
-
-
-
-
(25)
-
(16)
(16)
-
-
-
-
(41)
Total
$’000
73,276
5,810
11
5,821
2,378
151
(300)
(6,677)
74,649
3,763
(16)
3,747
-
(129)
(39)
(3,433)
74,795
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
44 BSA LIMITED ANNUAL REPORT 2013
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
Cash Flows from operating activities:
Cash receipts from customers
Payments to suppliers and employees
Interest received
Interest and other costs of finance paid
Income tax received/(paid)
Net cash (used in)/ generated by operating activities
Cash flows from investing activities:
Proceeds from disposal of property, plant and equipment
Payment for businesses
Payment for plant and equipment
Net cash used in investing activities
Cash Flows from financing activities:
Payment for shares issued for vesting rights
Proceeds from borrowings
Repayment of borrowings
Repayment of Executive loans
Payment of finance lease liabilities
Share issue costs paid
Dividends paid to owners of the Company
Net cash (used in) financing activities
Net decrease in cash
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Note
29 (a)
31(c)
13
2013
$’000
511,962
(521,227)
144
(1,953)
(5,450)
(16,524)
422
(188)
(5,439)
(5,205)
(39)
10,444
(5,058)
4
(2,914)
-
(3,433)
(996)
(22,725)
24,734
2,009
2012
$’000
544,711
(521,710)
868
(1,648)
1,690
23,911
579
(8,734)
(5,396)
(13,551)
(76)
-
(10,000)
1,013
(3,170)
(2)
(4,822)
(17,057)
(6,697)
31,431
24,734
BSA LIMITED ANNUAL REPORT 2013
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 1 GENERAL INFORMATION
BSA Limited (the Company) is a limited company incorporated in Australia. The address of its registered office and principal places of business are disclosed in the introduction to the
Annual Report. The principal activities of the Company and its subsidiaries (the Group) are described in note 28.
NOTE 2 APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS
2.1 Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
The following new and revised Standards and Interpretations have been adopted in the current period and have affected the amounts reported in these financial statements.
Standards affecting presentation and disclosure
Amendments to AASB 101‘Presentation of Financial Statements’
The amendment part of AASB 2011-9 ‘Amendments to Australian Accounting Standards - Presentation of Items
of Other Comprehensive Income’ introduces new terminology for the Statement of Comprehensive Income and
Income Statement. Under the amendments to AASB 101, the Statement of Comprehensive Income is renamed
as a Statement of Profit or Loss and Other Comprehensive Income and the Income Statement is renamed as a
Statement of Profit or Loss. The amendments to AASB 101 retain the option to present profit or loss and other
comprehensive income in either a single statement or in two separate but consecutive statements. However,
the amendments to AASB 101 require items of other comprehensive income to be grouped into two categories
in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss
and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income
tax on items of other comprehensive income is required to be allocated on the same basis – the amendments
do not change the option to present items of other comprehensive income either before tax or net of tax. The
amendments have been applied retrospectively, and hence the presentation of items of other comprehensive
income has been modified to reflect the changes. Other than the above mentioned presentation changes, the
application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive
income and total comprehensive income.
Standards and Interpretations affecting the reported results of financial position
There are no new and revised Standards and Interpretations adopted in these financial statements affecting the reporting results or financial position.
46 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2.2 Standards and Interpretations in issue not yet adopted
The Company is still in the process of identifying the impact of Standards and Interpretations in issues not yet adopted.
Standard/Interpretation
AASB 9 ‘Financial Instruments’, AASB 200911 ‘Amendments to Australian Accounting Standards arising from
AASB 9’ and AASB 2010-7 ‘Amendments to Australian Accounting Standards arising from AASB 9 (December
2010)’
Effective for
annual reporting periods
beginning on or after
1 January 2015
Expected to be
initially applied in the
financial year ending
30 June 2016
AASB 10 ‘Consolidated Financial Statements’
1 January 2013
30 June 2014
AASB 11 ‘Joint Arrangements’
1 January 2013
30 June 2014
AASB 12 ‘Disclosure of Interests in Other Entities’
1 January 2013
30 June 2014
AASB 127 ‘Separate Financial Statements’ (2011)
1 January 2013
30 June 2014
AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments to Australian Accounting Standards
arising from AASB 13’
1 January 2013
30 June 2014
AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10 ‘Amendments to Australian Accounting Standards
arising from AASB 119 (2011)’
1 January 2013
30 June 2014
AASB 2011-4 ‘Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements’
1 July 2013
30 June 2014
AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from the Consolidation and Joint
Arrangements Standards’
1 January 2013
30 June 2014
AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from Annual Improvements
2009–2011 Cycle’
1 January 2013
30 June 2014
AASB 2012-9 ‘Amendment to AASB 1048 arising from the Withdrawal of Australian Interpretation 1039’
1 January 2013
30 June 2014
AASB 2012-10 ‘Amendments to Australian Accounting Standards – Transition Guidance and Other
Amendments’
1 January 2013
30 June 2014
AASB 2013-3 ‘Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets’
1 January 2014
30 June 2015
AASB 2013-4 ‘Amendments to Australian Accounting Standards - Novation of Derivatives and Continuation
of Hedge Accounting’
1 January 2014
30 June 2015
A number of Australian Accounting Standards are in issue but are not effective for the current year end. The reported results and position of the group are not expected to change on
adoption of these pronouncements. Adoption will, however, result in changes to information currently disclosed in the financial statements. The group does not intend to adopt any of these
pronouncements before their effective dates.
BSA LIMITED ANNUAL REPORT 2013
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES
3.1 Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001 (Cth), Accounting Standards and
Interpretations, and comply with other requirements of the law.
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the
Group comply with International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the Directors on 30 September 2013.
3.2 Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on
the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.
The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Financial Report are rounded
off to the nearest thousand dollars, unless otherwise indicated.
3.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries).
Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Income and expense of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition and
up to the date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control are accounted for as equity transactions. The carrying amounts of the Group’s
interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and
the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts
previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the
same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost
is regarded as the fair value on initial recognition for subsequent accounting under AASB 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial
recognition of an investment in an associate or jointly controlled entity.
3.4 Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum
of the acquisition date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity instruments issued by the Group
in exchange for control of the acquiree. Acquisition related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition date fair value.
Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). All other subsequent changes in
the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant Standards. Changes in the fair value of contingent consideration
classified as equity are not recognised.
48 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date, except that:
•
•
•
Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements, are recognised and measured in accordance with AASB 112 Income Taxes and
AASB 119 Employee Benefits respectively;
Liabilities or equity instruments related to share-based payment arrangements of the acquiree, or share-based payment arrangements of the Group entered into to replace share-
based payment arrangements of the acquiree, are measured in accordance with AASB 2 ‘Share-based Payment’ at the acquisition date; and
Assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 Noncurrent Assets Held for Sale and Discontinued Operations are measured in
accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously
held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the
acquisition date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially
measured either at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is
made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another Standard.
Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent
consideration is measured at its acquisition date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the
‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration
is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent
consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with AASB 139, or AASB 137 ‘Provisions, Contingent Liabilities and
Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group
attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been
recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items
for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.
3.5 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the business (see 3.4 above) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash generating units (or groups of cash generating units) that is expected to benefit from the synergies
of the combination.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is indication that the unit may be impaired. If the recoverable
amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the Consolidated
Statement of Comprehensive Income. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
3.6 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Any
consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between
the amount initially recognised and the amount ultimately received is interest revenue. All revenue is stated net of the amount of Goods and Services Tax (GST).
BSA LIMITED ANNUAL REPORT 2013
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.6.1 Sale of goods
Revenue from the sale of goods is recognised when all the following conditions are satisfied:
•
•
•
•
•
The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
The amount of revenue can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the Group; and
The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Specifically, revenue from the sale of goods is recognised when goods are delivered and legal title is passed.
3.6.2 Rendering of services
Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion of the contract is determined as follows:
•
•
•
Installation fees are recognised by reference to the stage of completion of the installation, determined as the proportion of the total time expected to install that has elapsed at
the end of the reporting period;
Servicing fees included in the price of products sold are recognised by reference to the proportion of the total cost of providing the servicing for the product sold; and
Revenue from time and material contracts is recognised at the contractual rates as labour hours are delivered and direct expenses are incurred.
The Group’s policy for recognition of revenue from construction contracts is described at 3.7 below.
3.6.3 Dividend and interest income
Dividend revenue from investments is recognised when the shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to
the Group and the amount of revenue can be measured reliably).
Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on
a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount on initial recognition.
50 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
3.7 Construction contracts and work in progress
Construction work in progress is valued at cost, plus profit recognised to date less any provision for anticipated future losses. Costs includes both variable and fixed costs relating to specific
contracts, and those costs that are attributable to the contract activity in general and that can be allocated on a reasonable basis.
3.8 Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
3.8.1 The Group as lessee
Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The
corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses
are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs
(see 3.9 below). Contingent rentals are recognised as expenses in the periods in which they are incurred.
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which
economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental
expense on a straight line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
3.9 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
3.10 Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required
and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of
services provided by employees up to reporting date.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
BSA LIMITED ANNUAL REPORT 2013
51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.11 Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the
determination of the fair value of equity-settled share-based transactions are set out in note 30.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Group’s estimate of equity
instruments that will eventually vest. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of
the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee
benefits reserve.
The policy described above is applied to all equity-settled share-based payments that were granted after 7 November 2002 and vested after 1 January 2005. No amounts have been
recognised in the financial statements in respect of other equity-settled share-based payments.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be
estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the
service.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period
until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
3.12 Taxation
Income tax expense represents the sum of the tax currently payable and movement in deferred tax.
3.12.1 Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of the reporting period.
3.12.2 Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able
to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
3.12.3 Current and deferred tax for the year
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other
comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the
case of a business combination, the tax effect is included in the accounting for the business combination.
52 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
3.12.4 Tax consolidation
The Company and its wholly owned Australian resident entities have formed a tax consolidated group with effect from 1 August 2007 and are therefore taxed as a single entity from that
date. The head entity within the tax consolidated group is BSA Limited. The members of the tax consolidated group are identified in note 19. Tax expense/income, deferred tax liabilities
and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax
consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying
under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax consolidated group are
recognised by the Company (as head entity in the tax consolidated group).
Due to the existence of a tax funding arrangement between the entities in the tax consolidated group, amounts are recognised as payable to or received by the Company and each
member of the Group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax consolidated group in accordance with the
arrangement.
3.13 Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost less their residual values over their useful lives, using the straight line method. The estimated useful lives, residual values and
depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of
the asset and is recognised in profit or loss.
3.14 Intangible assets
3.14.1 Intangible assets acquired separately
Intangible assets acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight line basis over their
estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
3.14.2 Internally generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been
demonstrated:
•
•
•
•
•
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition
criteria listed above. Where no internally generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as
intangible assets that are acquired separately.
3.14.3 Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis
as intangible assets that are acquired separately.
BSA LIMITED ANNUAL REPORT 2013
53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.15 Impairment of tangible and intangible assets excluding goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. Where a reasonable
and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash
generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset
may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior
years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
3.16 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories by the
method most appropriate to the particular class of inventory, with the majority being valued on the basis of weighted average cost. Net realisable value represents the estimated selling
price for inventories less all estimated costs of completion and costs necessary to make the sale.
3.17 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those
cash flows (where the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
3.17.1 Restructurings
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry
out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct
expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
3.17.2 Warranties
Provisions for the expected cost of warranty obligations under construction contracts are recognised at the Directors’ best estimate of the expenditure required to settle the Group’s obligation.
3.17.3 Contingent liabilities acquired in a business combination
Contingent liabilities acquired in a business combination are initially measured at fair value at the date of acquisition. At the end of subsequent reporting periods, such contingent liabilities
are measured at the higher of the amount that would be recognised in accordance with AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’ and the amount initially
recognised less cumulative amortisation recognised in accordance with AASB 118 ‘Revenue’.
54 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
3.18 Financial assets
Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS)
financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
3.18.1 Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments.
3.18.2 Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and
receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-
term receivables when the recognition of interest would be immaterial.
3.18.3 Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective
evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective
evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the
average credit period of 30 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash
flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written
off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
3.18.4 Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
BSA LIMITED ANNUAL REPORT 2013
55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.19 Financial liabilities and equity instruments issued by the Group
3.19.1 Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
3.19.2 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at
the proceeds received, net of direct issue costs.
3.19.3 Financial guarantee contract liabilities
Financial guarantee contract liabilities are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
•
•
The amount of the obligation under the contract, as determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets; and
The amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance with the revenue recognition policies set out at 3.6 above.
3.20 Financial liabilities
Financial liabilities are classified as ‘other financial liabilities’.
3.20.1 Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on
initial recognition.
3.20.2 Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.
3.21 Derivative financial instruments
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including foreign exchange forward contracts and
interest rate swaps. Further details of derivative financial instruments are disclosed in note 35.
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period.
The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition
in profit or loss depends on the nature of the hedge relationship.
3.21.1 Hedge accounting
The Group designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges, cash
flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.
At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its
strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly
effective in offsetting changes in fair values or cash flows of the hedged item.
56 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
3.21.2 Cash flow hedges
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. The gain or loss relating
to the ineffective portion is recognised immediately in profit or loss, and is included in the ‘other gains and losses’ line item.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognised in profit or
loss, in the same line of the Statement of Comprehensive Income as the recognised hedged item. However, when the forecast transaction that is hedged results in the recognition of a
non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the
non-financial asset or non-financial liability.
Hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies
for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a
forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss.
3.22 Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i.
ii.
Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
For receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable
to, the taxation authority is classified within operating cash flows.
NOTE 4 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 3, the Directors are required to make judgements, estimates and assumptions about the carrying amounts
of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
4.1 Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year.
4.1.1 Contracts - estimates to complete
Construction contracts are accounted for as per 3.7. Inherent in the assessment of profitability of each contract is the estimate to complete. This estimate requires the Directors to assess the
conduct of the contract to date and the expected cost to complete the contract.
4.1.2 Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation
requires the directors to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.
The carrying amount of goodwill at 30 June 2013 was $55.2 million (30 June 2012: $55.0 million).
BSA LIMITED ANNUAL REPORT 2013
57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 5 REVENUE
Consolidated
The following is an analysis of the Group’s revenue from continuing operations (excluding investment revenue - see note 6).
Revenue from sale of goods
Revenue from the rendering of services
Contract revenue
Total Revenue
NOTE 6 INVESTMENT REVENUE
Consolidated
Interest revenue
Bank deposits
Other loans and receivables
The following is an analysis of investment revenue earned on financial assets by category of asset:
Loans and receivables (including cash and bank balances)
NOTE 7 OTHER GAINS AND LOSSES
Consolidated
Continuing operations
(Loss)/gain on disposal of property, plant and equipment
58 BSA LIMITED ANNUAL REPORT 2013
2013
$’000
18,235
116,545
339,400
2012
$’000
15,857
121,434
354,473
474,180
491,764
2013
$’000
144
213
357
357
357
2013
$’000
47
47
2012
$’000
764
-
764
764
764
2012
$’000
18
18
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 8 PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
Consolidated
Profit for the year from continuing operations has been arrived at after charging/(crediting):
8.1
Cost of sales
8.2
Finance costs
Interest on bank overdrafts and loans
Total finance costs
8.3
Depreciation and amortisation expense
Depreciation of property, plant and equipment
Amortisation of intangible assets
Total depreciation and amortisation expense
8.4
Employee benefits expense
Post employment benefits
Superannuation
Share-based payments (see note 30(d))
Equity-settled share-based payments
Other employee benefits
Total employee benefits expense
2013
$’000
2012
$’000
388,471
405,444
1,932
1,932
7,002
1,440
8,442
1,462
1,462
5,373
2,266
7,639
9,215
7,066
(129)
35,413
44,499
151
35,209
42,426
BSA LIMITED ANNUAL REPORT 2013
59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 9 INCOME TAXES
Consolidated
9.1
Income tax recognised in profit or loss
The expense for the year can be reconciled to the accounting profit as follows:
Profit from continuing operations
Income tax expense calculated at 30%
Adjusted for:
Non-deductible expenses
Research and development allowance
Adjustments recognised in the current year in relation to the current tax of prior years
Research and development allowance
Rights to future income adjustment due to change in legislation
Other
Income tax (benefit)/expense recognised in profit or loss
The tax rate used for the 2013 and 2012 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law.
9.2
Income tax recognised directly in equity
Current tax
Share issue costs
9.3
Current tax assets and liabilities
Current tax assets
Tax refund receivable
Current tax liabilities
Income tax payable
60 BSA LIMITED ANNUAL REPORT 2013
-
-
1,206
1,206
-
-
2013
$’000
2012
$’000
2,798
840
25
(693)
172
(1,039)
-
(98)
(1,137)
(965)
8,201
2,460
265
(150)
2,575
(1,749)
1,668
(103)
(184)
2,391
(16)
(16)
-
-
4,672
4,672
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
9.4
Deferred tax balances
2013
Temporary differences
Finance leases
Intangible assets
Employee benefits
Retirement benefit obligations
Provisions
Doubtful debts
Other financial liabilities
2012
Temporary differences
Finance leases
Intangible assets
Employee benefits
Retirement benefit obligations
Provisions
Doubtful debts
Other financial liabilities
Deferred tax balances are presented in the Statement of Financial Position as follows:
Deferred tax assets
Deferred tax liabilities
Opening Balance
Recognised in
Profit or Loss
Closing Balance
$’000
$’000
$’000
(4)
(2,674)
3,068
253
392
408
-
1,443
(47)
432
(287)
76
551
(187)
-
538
(51)
(2,242)
2,781
329
943
221
-
1,981
Opening Balance
Recognised in
Profit or Loss
Closing Balance
$’000
$’000
$’000
(20)
(1,169)
2,590
142
124
423
-
2,090
16
(1,505)
478
111
268
(15)
-
(647)
2013
$’000
1,981
-
1,981
(4)
(2,674)
3,068
253
392
408
-
1,443
2012
$’000
1,443
-
1,443
BSA LIMITED ANNUAL REPORT 2013
61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 9 INCOME TAXES (CONTINUED)
9.5
Tax consolidation
Relevance of tax consolidation to the Group
The Company and its wholly owned Australian resident entities have formed a tax consolidated group with effect from 1 August 2007 and are therefore taxed as a single
entity from that date. The head entity within the tax consolidated group is BSA Limited. The members of the tax consolidated group are identified in note 19. Tax expense/
income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial
statements of the members of the tax consolidated group using the ‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial
statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and
relevant tax credits of the members of the tax consolidated group are recognised by the Company (as head entity in the tax consolidated group).
Due to the existence of a tax funding arrangement between the entities in the tax consolidated group, amounts are recognised as payable to or received by the Company and
each member of the Group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax consolidated group in
accordance with the arrangement.
NOTE 10 KEY MANAGEMENT PERSONNEL
Consolidated
Compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
2013
$
2012
$
1,299,536
109,541
14,446
-
(125,350)
1,298,173
1,722,068
135,288
18,391
94,656
17,430
1,987,833
Further information regarding the identity of key management personnel and their compensation can be found in the Audited Remuneration Report contained in the Directors’
Report on pages 14 to 28 of this Annual Report.
62 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2013
$
302,430
219,419
48,136
569,985
2012
$
347,552
436,226
345,382
1,129,160
NOTE 11 AUDITORS’ REMUNERATION
Consolidated
Remuneration of the auditor of the Group for:
- Auditing or reviewing the Financial Report
- Taxation services
- Other non-audit services
The auditor of BSA Limited is Deloitte Touche Tohmatsu.
BSA LIMITED ANNUAL REPORT 2013
63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 12 EARNINGS PER SHARE
Consolidated
Basic earnings per share
Diluted earnings per share
(a)
Reconciliation of Earnings to Profit
Profit
Earnings used to calculate basic EPS and dilutive EPS
2013
Cents
1.64
1.60
$’000
3,763
3,763
2012
Cents
2.57
2.51
$’000
5,810
5,810
(b)
Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS
Number
228,861,202
Number
225,653,329
Weighted average number of options/rights outstanding
5,779,836
6,215,852
Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS
234,641,038
231,869,181
(c)
Information concerning the classification of securities
Options/Rights
Options granted to employees under the BSA Limited Employee Option Plan and rights granted to employees under the BSA Limited Employees Performance Rights Plan are
considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options/rights
have not been included in the determination of basic earnings per share. Details relating to the options and rights are set out in note 30.
NOTE 13 CASH AND CASH EQUIVALENTS
Consolidated
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents include
cash on hand and in banks.
Cash at bank and on hand
2013
$’000
2,009
2,009
2012
$’000
24,734
24,734
64 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 14 TRADE AND OTHER RECEIVABLES
Consolidated
CURRENT
Trade receivables
Allowance for doubtful debts
Other receivables
Executive Share Plan receivables
Amounts due from customers under construction contracts
Allowance for doubtful debts (construction contracts)
Contract Retentions
Prepayments
NON-CURRENT
Executive Share Plan receivables
Note
33
(c)
33
(c)
2013
$’000
11,399
(84)
11,315
8,074
194
64,734
(597)
592
878
73,875
85,190
1,279
1,279
2012
$’000
4,909
(361)
4,548
11,783
198
62,066
(799)
849
549
74,646
79,194
1,279
1,279
Trade receivables
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
The average credit period for the Group is 30 days. No interest is charged on overdue receivables. Allowances for doubtful debts are recognised against trade receivables greater
than 60 days based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty.
Before accepting a new customer, the Group uses an external credit scoring system to assess the potential customer's credit quality and defines credit limits by customer.
BSA LIMITED ANNUAL REPORT 2013
65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 14 TRADE AND OTHER RECEIVABLES (CONTINUED)
Age analysis of trade receivables that are past due but not impaired at the reporting date
Consolidated
Trade receivables
Not past due
Past due [30] days
Past due [30-60] days
Past due [60-90] days
Past due [>90] days
Total
Amounts due from customers under construction contracts
Not past due
Past due [30] days
Past due [30-60] days
Past due [60-90] days
Past due [>90] days
Total
2013
Amount
Impaired
$’000
Amount Not
Impaired
$’000
-
-
12
38
34
84
-
-
-
-
597
597
6,459
1,414
690
1,795
957
11,315
43,007
12,107
2,424
951
5,648
64,137
Total
$’000
6,459
1,414
702
1,833
991
11,399
43,007
12,107
2,424
951
6,245
64,734
2012
Amount
Impaired
$’000
Amount Not
Impaired
$’000
7
255
19
-
80
361
-
-
-
-
799
799
2,640
1,248
-
285
375
4,548
38,796
13,254
3,988
1,852
3,377
61,267
Total
$’000
2,647
1,503
19
285
455
4,909
38,796
13,254
3,988
1,852
4,176
62,066
As at 30 June 2013, the Group had current trade receivables of $681,553 (2012: $1,160,140) that were impaired. The amounts relate to customers who had not responded to final
request for payment notices, customers that BSA had requested external collection agencies to collect outstanding debts or customers who have disputed invoiced amounts.
Analysis of Allowance Account
Consolidated
Opening Balance
Transferred In from acquisition of subsidiary
Provisions for doubtful receivables current
Provisions for doubtful receivables non-current
Receivables written off during the year
Reversal of amounts provided
Closing balance
NOTE 15 INVENTORIES
Consolidated
CURRENT
Raw materials and stores
66 BSA LIMITED ANNUAL REPORT 2013
2013
$’000
1,160
-
681
-
(503)
(657)
681
2013
$’000
5,202
5,202
2012
$’000
1,104
481
1,160
-
(16)
(1,569)
1,160
2012
$’000
3,000
3,000
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 16 PROPERTY, PLANT AND EQUIPMENT
Movements in Carrying Amounts
Movements in the carrying amounts of each class of property, plant and equipment between the beginning and the end of the financial year:
Land
Buildings
Leasehold
Improvements
Plant &
Equipment
Plant &
Equipment
Under Finance
Lease and Hire
Purchase
Make Good
Total
$’000
$’000
$’000
$’000
$’000
$'000
$’000
Cost
Balance as at 1 July 2011
Additions
Disposals
Acquisitions through business combinations
Transfers *
-
253
-
-
-
-
410
-
-
-
1,558
700
-
-
-
15,950
4,033
(1,240)
1,450
15
6,525
4,396
(527)
-
(15)
Balance as at 30 June 2012
253
410
2,258
20,208
10,379
Additions
Disposals
Acquisitions through business combinations
Transfers *
-
-
-
-
-
-
-
-
1,332
(537)
-
-
Balance as at 30 June 2013
253
410
3,053
-
-
-
-
-
-
230
-
-
-
24,033
9,792
(1,767)
1,450
-
33,508
9,611
(2,750)
132
-
230
40,501
-
-
-
-
-
71
-
-
71
159
13,839
5,373
(1,205)
-
18,007
7,002
(2,374)
-
22,635
17,866
4,107
(1,120)
132
2,985
26,312
9,671
3,369
(824)
602
928
240
-
-
1,168
12,818
583
(609)
-
1,142
1,911
4,445
(725)
874
17,412
8,900
3,942
(1,093)
-
(2,985)
10,243
3,240
1,758
(381)
(602)
4,015
1,886
(1,040)
(874)
3,987
6,256
Accumulated depreciation and impairment
Balance as at 1 July 2011
Additions
Disposals
Transfers *
Balance as at 30 June 2012
Additions
Disposals
Transfers *
Balance as at 30 June 2013
-
-
-
-
-
-
-
-
-
Net Book Value as at 30 June 2013
253
* Transfers between categories
16.1
The following useful lives are used in the calculation of depreciation:
-
6
-
-
6
17
-
-
23
387
Buildings
Leasehold improvements
Plant and equipment
Plant and equipment under finance lease
25 years
4 - 5 years
3 - 10 years
3 - 5 years
16.2
Assets held as security
Fixed and floating charges over the whole of the Company assets has been pledged as security for bank loans.
BSA LIMITED ANNUAL REPORT 2013
67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 17 NON-CURRENT ASSETS - GOODWILL
Consolidated
Cost
Balance at the beginning of year
Additional amounts recognised from business combinations occurring during the year (note 31)
Balance at end of year
Accumulated impairment losses
Balance at the beginning of year
Balance at end of year
Closing carrying value at 30 June 2012
Impairment Disclosures
Goodwill has been allocated for impairment testing purposes to the following cash generating units:
CGU
Technical Field Force Solutions
Technical Design & Construction Projects
Technical Maintenance Services
Total
2013
$’000
56,580
140
56,720
(1,535)
(1,535)
55,185
Carrying Value
of Good Will
2013
$’000
11,490
34,885
8,810
55,185
2012
$’000
53,638
2,942
56,580
(1,535)
(1,535)
55,045
Carrying Value
of Good Will
2012
$’000
11,490
34,885
8,670
55,045
The recoverable amount of each cash generating unit is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow
projections over a five year period with the period extending beyond five years extrapolated using an estimated growth rate of 2.5% for Technical Field Force Solutions, 2.5% for
Technical Design & Construction Projects and 2.5% for Technical Maintenance Services. The cash flows are discounted using the weighted average cost of capital at the end of the
budget period.
The following assumptions were used in the value-in-use calculations:
2013
Growth
Rate
-
17.60%
3.00%
3.00%
3.00%
3.00%
2.50%
2013
Discount
Rate
-
16.05%
16.05%
16.05%
16.05%
16.05%
16.05%
2012
Growth
Rate
(12.82%)
3.00%
3.00%
3.00%
3.00%
-
3.00%
2012
Discount
Rate
15.02%
15.02%
15.02%
15.02%
15.02%
-
15.02%
Technical Field Force Solutions (TFFS)
2013
2014
2015
2016
2017
2018
Term Year
68 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
2013
Growth
Rate
-
(2.40%)
(10.30%)
3.00%
3.00%
3.00%
2.50%
-
12.50%
4.00%
3.00%
3.00%
3.00%
2.50%
2013
Discount
Rate
-
16.00%
16.00%
16.00%
16.00%
16.00%
16.00%
-
16.80%
16.80%
16.80%
16.80%
16.80%
16.80%
2012
Growth
Rate
(2.75%)
3.00%
3.00%
3.00%
3.00%
-
3.00%
29.59%
4.00%
4.00%
4.00%
4.00%
-
4.00%
2012
Discount
Rate
15.86%
15.86%
15.86%
15.86%
15.86%
-
15.86%
15.31%
15.31%
15.31%
15.31%
15.31%
-
15.31%
Technical Design & Construction Projects (TDCP)
2013
2014
2015
2016
2017
2018
Term Year
Technical Maintenance Services (TMS)
2013
2014
2015
2016
2017
2018
Term Year
For further details on estimates used in value-in-use calculations refer Note 3.5.
Management has based the value-in-use calculations on Board approved budgets for each reporting segment for FY2014. Forecasts have been used for FY2015-FY2018. These
forecasts use historical weighted growth rates to project revenue and rates at which contracts are currently being written. Costs are calculated taking into account historical gross
margins. Estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to the locations in which the segments operate. Discount
rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.
Impact of possible changes to key assumptions
Growth Rate
Management has assumed a conservative growth rate for all cash generating units and does not believe that any reasonably possible change would have a material effect on the
recoverable amount of the goodwill.
Weighted Average Cost of Capital (WACC)
The WACC applied to each cash generating unit is on the higher end of BSA management’s assessment of external data against the relative conservative modelling of future cash
flows of each of the respective cash generating units. Management estimates that an increase in WACC of 1% would still not impair any of the three cash generating units.
Gross Margin
TFFS - In a sensitivity analysis, Management estimates that a 1% reduction in gross margin would cause a reduction in enterprise value of $11.2 million and a resultant
impairment of $2.9 million, and a 0.7% reduction in Gross Margin would result in a break even bertween carrying value and an enterprise value calculation. A senistivity analyis
around 1% has been chosen due to the underlying stability of the TFFS buisness operation model, predominantly based on the back of long term contracts with major clients.
Forecast Gross margin percentage is anticipated to improve slightly over the value in use cash flow projection period.
TDCP - In a sensitivity analysis, Management estimates that a 1% reduction in gross margin could cause a reduction in enterprise value of $14.3 million and a resultant
impairment of up to $6.4 million, and a 0.6% reduction of in Gross Margin would result in a break even between carrying value and an enterprise value calculation. A sensitivity
analyis around 1% has been chosen due to the competitive nature of the industry that TDCP operates in that has resulted in lower than expected margin performance. Forecast
Gross Margin percentage is anticipated to improve based on a mix of improved margin contracts currently underway.
TMS - In a sensitivity analysis, Management estimates that a 1% reduction in gross margin could cause a reduction in enterprise value of $8.2 million and a resultant headroom
of $8.4 million, and a 2.0% reduction of Gross Margin would result in a break even bertween carrying value and an enterprise value calculation. A senistivity analyis around 1%
has been chosen due to the underlying stability of the TMS business operation model, predominantly based on a spread of work across maintenance contracts, service and small
project work. Forecast Gross margin percentage is anticipated to remain steady over the value in use cash flow projection period.
BSA LIMITED ANNUAL REPORT 2013
69
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 17 NON-CURRENT ASSETS - GOODWILL (CONTINUED)
Working Capital
Key components affecting working capital include debtor day collections, accounts payable days, and project Work In Progress days. Management believe the assumptions used
in the cash flow projection period are conservative based on historical performance and do not take into account initiatives to improve these metrics going forward. Applying
sensitivity analysis impacts each respective cash generating unit as follows:
TFFS – A sensitivity in adversely impacting working capital based on collecting debtors two days later, paying creditors two days earlier would reduce enterprise value by $2.1
million resulting in headroom of $6.1 million.
TDCP – A sensitivity in adversely impacting working capital based on collecting debtors five days later, paying creditors two days earlier, and WIP reducing three days would reduce
enterprise value by $6.8 million resulting in headroom of $1.1 million.
TMS - A sensitivity in adversely impacting working capital based on collecting debtors five days later, paying creditors two days earlier, and WIP reducing two days would reduce
enterprise value by $3.2 million and resulting in headroom of $13.4 million.
NOTE 18 NON-CURRENT ASSETS - OTHER INTANGIBLE ASSETS
Intangible assets, other than goodwill, have finite lives. The current amortisation for intangible assets is included under depreciation and amortisation expense per the Income
Statement.
Cost
Balance as at 1 July 2011
Acquisitions through business combinations
Balance at 30 June 2012
Acquisitions through business combinations
Balance at 30 June 2013
Accumulated amortisation and impairment
Balance as at 1 July 2011
Amortisation expense
Balance at 30 June 2012
Amortisation expense
Balance at 30 June 2013
Net Book Value as at 30 June 2013
Customer
Relationships
Order
Backlog
6,900
-
6,900
-
6,900
(3,004)
(767)
(3,771)
(767)
(4,538)
2,362
3,679
6,400
10,079
-
10,079
(2,796)
(1,499)
(4,295)
(673)
(4,968)
5,111
Total
10,579
6,400
16,979
-
16,979
(5,800)
(2,266)
(8,066)
(1,440)
(9,506)
7,473
The amortisation expense has been included in the line “depreciation and amortisation expense” in the Statement of Comprehensive Income.
The following useful lives are used in the calculation of amortisation.
Customer relationships
Order backlog
9 years
1 to 9.5 years
70 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 19 OTHER FINANCIAL ASSETS
Consolidated
Shares in other corporations at cost
(a)
Shares in subsidiaries
Details of Group Companies
Parent Entity:
BSA Limited
Ultimate Parent Entity:
BSA Limited
Controlled Entities:
Mr Broadband Pty Limited
Allstaff Airconditioning Holdings Pty Limited
Allstaff Airconditioning (VIC) Pty Limited
Allstaff Airconditioning (NSW) Pty Limited
Allstaff Airconditioning (ACT) Pty Limited
Complex Airconditioning Pty Limited
Mr Antenna Pty Limited
Satellite Receiving Systems (QLD) Pty Limited
Mr Alarms Pty Limited
MEC Services Pty Limited
BSA Transmission Solutions Pty Limited
066 059 809 Pty Limited
Triple M Group Pty Limited
Triple M Mechanical Services Pty Limited
Triple M Mechanical Services (Qld) Pty Limited
Triple M Fire Pty Limited
Triple M Mechanical Services (Administration) Pty Limited
BSA Networks Pty Limited
Burke Air Pty Limited
2013
$’000
3
3
2012
$’000
4
4
Country of
incorporation
Class of
shares
Percentage Owned (%)
2013
2012
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
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
100
100
100
100
100
100
100
100
100
100
(b)
Deed of Cross Guarantee:
All Controlled Entities are parties to the Deed of Cross Guarantee, where relief is obtained from preparing individual financial reports under ASIC Class Order 98/1418, and are
members of the Closed Group. Under the Deed, BSA Limited agrees to support the liabilities and obligations of the Controlled Entities.
(c)
Tax Consolidation Group
All the controlled entities are part of the Tax Consolidation Group.
BSA LIMITED ANNUAL REPORT 2013
71
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 20 AMOUNTS DUE FROM (TO) CUSTOMERS UNDER CONSTRUCTION CONTRACTS
Consolidated
Contracts in progress
Construction costs incurred plus recognised profits less recognised losses to date
Less progress billings
Represented by amounts due:
- From customers under construction contracts (note 14)
- To customers under construction contracts (note 22)
2013
$'000
339,424
(274,969)
64,455
64,734
(279)
64,455
2012
$'000
354,473
(293,143)
61,330
62,066
(736)
61,330
At 30 June 2013, retentions held by customers for contract work amounted to $713,979 (30 June 2012: $848,650). Advances received from customers for contract work amounted
to Nil (30 June 2012 : $392,293).
72 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 21 PARENT ENTITY DISCLOSURES
(a)
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Retained earnings
Profit Reserve
Reserves
Share-based payments reserve
Cash flow hedge reserve
Total equity
(b)
Financial Performance
Profit for the year
Other comprehensive income for the year, net of tax
Items that may be reclassified subsequently to profit or loss:
Gain/(loss) recognised on cash flow hedges
Total comprehensive income for the year, net of tax
(c)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
BSA Limited has entered into a cross guarantee with its wholly owned subsidiaries.
2013
$’000
32,083
79,955
112,038
33,138
12,408
45,546
66,492
77,797
(34,766)
22,148
1,354
(41)
66,492
25,580
(16)
25,564
73,660
2012
$’000
35,704
77,606
113,310
60,791
7,991
68,782
44,528
77,797
(34,766)
-
1,522
(25)
44,528
(2,767)
11
(2,756)
62,505
(d)
Contingent Liabilities
Guarantees established in favour of National Australia Bank Limited and Swiss Re International SE for Guarantees issued to various clients for satisfactory contract performance,
secured by cross guarantees from all wholly owned group members amounting to $9,130,007 (2012 - $2,829,789).
BSA LIMITED ANNUAL REPORT 2013
73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 22 TRADE AND OTHER PAYABLES
Consolidated
Trade payables
(a)
Other payables
Amounts due to customers under construction contracts (see note 20)
Total Payables
2013
$’000
39,560
30,693
279
70,532
2012
$’000
40,798
44,050
736
85,584
The average credit period on purchases is 32.7 days. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.
(a)
Payroll Tax Payable to NSW Office of State Revenue.
Subsequent to year end, the NSW Office of State Revenue (OSR) informally advised of a possible payroll tax-related liability of approximately $11.7 million, including interest and
penalties, for the six year period 2008-2013. This issue relates principally to the Technical Field Force Services business and the status of its contractor workforce.
BSA’s advisors confirmed the email received did not have the status of a notice of assessment issued under the state tax legislation, that a material calculation error has been made in
arriving at the figure, and that BSA has reasonable grounds to believe the figure can be reduced by utilising certain avenues of relief. BSA will continue to work proactively with the OSR
to resolve this matter. The Company will vigorusly defend its position in this matter.
On 18th September 2013, BSA released a market announcement on the ASX which stated that the Company believes that the best guidance of a liability, if any, at a range of $2m to $5m.
An amount of $2m has been provided in the financial statements as at 30 June 2013 as Directors’ best estimate of a liability.
NOTE 23 BORROWINGS
Consolidated
CURRENT
Secured liabilities at amortised cost:
Hire purchase liabilities
Lease liabilities
Bank loans
Total Borrowings
NON-CURRENT
Secured liabilities at amortised cost:
Hire purchase liabilities
Lease liabilities
Bank loans
Total Borrowings
74 BSA LIMITED ANNUAL REPORT 2013
Note
(b)
(b)
(a)
(b)
(b)
(a)
2013
$’000
2,211
673
5,661
8,545
2,366
2,667
8,975
14,008
2012
$’000
1,815
276
2,875
4,966
2,660
1,212
6,375
10,247
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
(a)
The bank loans of the Group are secured by fixed and floating charges registered by mortgage debenture over assets and undertakings of the parent entity and its subsidiaries
along with interlocking guarantees and indemnities for $73,660,000 between the parent entity and its subsidiaries.
As at the date of this report an annual review of the bank facilities is underway with the Company’s bank. Whilst term debt facilities amounting to $14.3m are due to expire on 30
September 2014, key remaining facilities totalling $52.0m are due for renewal on 30 November 2013. Directors do not see any issue with the annual review process with the bank.
The covenants within the bank borrowings require debt service cover to be greater than 1.25 times, senior debt leverage ratio to be less than 2.5 times, total leverage ratio to be less
than 4.0 times and trading ratio to be greater than 1.05 times. There were no covenants breached during the financial year.
Consolidated
Total financial assets pledged as security
CURRENT
Cash and cash equivalents
Trade and other receivables
Inventories
Tax assets
NON-CURRENT
Trade and other receivables
Other financial assets
Property, plant & equipment
Deferred tax assets
Goodwill
Other intangible assets
2013
$’000
2,009
85,190
5,202
1,206
93,607
1,279
3
17,866
1,981
55,185
7,473
83,787
2012
$’000
24,734
79,194
3,000
-
106,928
1,279
4
15,501
1,443
55,045
8,913
82,185
(b)
Lease liabilities and hire purchase liabilities are effectively secured as the rights to the assets recognised in the financial statements revert to the financier in the event of default.
Actual interest rates for HP liabilities outstanding during the year ranged between 5.90% and 9.39%. Actual interest rates for lease liabilities outstanding during the year ranged
between 5.75% and 9.46%. Actual interest rates for bank loans outstanding during the year ranged between 7.72% and 9.06%.
177,394
189,113
NOTE 24 PROVISIONS
Consolidated
Employee benefits
CURRENT
NON-CURRENT
Note
(i)
2013
$’000
9,272
8,054
1,218
9,272
2012
$’000
8,995
7,803
1,192
8,995
(i)
The provision for employee benefits represents annual leave and vested and non-vested long service leave entitlements accrued.
BSA LIMITED ANNUAL REPORT 2013
75
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 25 ISSUED CAPITAL
(a)
Share capital
Ordinary shares - fully paid
(b)
Movements in ordinary share capital
Date
Details
Note
(c)
Parent Entity
2013
Number of
Shares
2012
Number of
Shares
228,861,202
228,861,202
1 July 2011
1 August 2011
Opening Balance
BurkeAir Acquisition
12 September 2011
Shares issued on settlement of rights conversion
4 October 2011
Dividend Reinvestment Plan
20 April 2012
Dividend Reinvestment Plan
(g)
(f)
(f)
Less: transaction costs arising on shares issued
1 July 2012
30 June 2013
Opening Balance
Balance
Number of
Shares
217,595,890
1,363,635
1,000,000
7,830,573
1,071,104
-
228,861,202
228,861,202
Issue Price $
0.22
0.23
0.20
0.27
$’000
75,419
300
225
1,566
289
(2)
77,797
77,797
Changes to the Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore the Company does not have a
limited amount of authorised capital and issued shares do not have a par value.
(c)
Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
The costs of raising the share capital in the year ended 30 June 2013 totalled $0 (2012: $2,304). Pursuant to the policy described in Note 3.19.2, the cost has been deducted from
issued capital.
(d)
Options
At 30 June 2013 no options were held over ordinary shares of the Company.
Share options granted under the Share Option Plan carry no rights to dividends and no voting rights. Further information relating to the BSA Limited Employee Option Plan,
including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in Note 30.
(e)
Executive Securities Plan
The Company has established an Executve Securities Plan as a mechanism to provide the Company’s key Executives with a direct equity involvement and incentive in the Company
which aligns them with the shareholders.
(f)
Dividend Reinvestment Plan
The Company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend entitlements satisfied by the
issue of new ordinary shares rather than by being paid in cash. The Dividend Reinvestment Plan has been suspended since the final dividend for 30 June 2012.
(g)
Rights
Information relating to the BSA Limited Performance Rights Plan, including details of rights issued, exercised and lapsed during the financial year and rights outstanding at the
end of the financial year, is set out in Note 30.
76 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 26 RESERVES AND ACCUMULATED LOSSES
Consolidated
(a)
Reserves
Cash flow hedging reserve
Share-based payments reserve
Cash flow hedging reserve
Opening balance
Gain/(loss) recognised on cash flow hedges
Closing balance
2013
$’000
(41)
1,354
1,313
(25)
(16)
(41)
2012
$’000
(25)
1,522
1,497
(36)
11
(25)
The cash flow hedging reserve represents the cumulative portion of gains and losses on hedging instruments deemed effective as cash flow hedges. The cumulative deferred
gain or loss on the hedging instrument is reclassified to profit or loss only when the hedged transaction affects the profit or loss, or is included as a basis adjustment to the non-
financial hedged item, consistent with the relevant accounting policy.
Share-based payments reserve
Opening balance
Rights expense
Shares issued in satisfaction of performance conditions
Closing balance
1,522
(129)
(39)
1,354
1,671
151
(300)
1,522
The share-based payments reserve relates to share options and share rights granted to employees under the Employee Share Option Plan and the Employee Performance Rights
Plan. Further information about share-based payments to employees is set out in note 30.
The share-based payments reserve records items recognised as expenses on valuation of employee share options and rights.
(b)
Accumulated losses
Movements in accumulated losses were as follows:
Balance at beginning of year
Net profit/(loss) for the year
Dividends
Balance at end of year
(c)
Profit Reserve
Movements in profit reserve were as follows:
Balance at beginning of year
Net profit/(loss) for the year
Dividends
Balance at end of year
(8,177)
-
-
(8,177)
3,532
3,763
(3,433)
3,862
(3,778)
-
(4,399)
(8,177)
-
5,810
(2,278)
3,532
BSA LIMITED ANNUAL REPORT 2013
77
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 26 RESERVES AND ACCUMULATED LOSSES (CONTINUED)
(d)
Dividends on equity instruments
Recognised amounts
Fully paid ordinary shares
Interim dividend:
Final dividend:
Unrecognised amounts
Fully paid ordinary shares
Final dividend:
2013
2012
Cents per share
Total ‘000
Cents per share
Total ‘000
0.50
1.00
1,144
2,289
1.00
2.00
2,278
4,399
-
-
1.00
2,289
The Directors have not recommended the payment of a final dividend in respect of the year ending 30 June 2013.
(e)
Franked credits
Franking account balance at 30 June
NOTE 27 CAPITAL AND LEASING COMMITMENTS
Consolidated
17,361
13,397
Note
2013
$’000
2012
$’000
(i)
Operating Lease Commitments
The Group leases various offices and warehouses under non-cancellable operating leases expiring within one to five years. The leases have varying terms, escalation clauses and
renewal rights. On renewal, the terms of the leases are renegotiated.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
(ii)
Finance Lease Commitments
4,254
9,907
-
14,160
4,008
8,368
-
12,376
The Group leases various plant and equipment with a carrying amount of $3,895,000 (2012: $1,480,000) under finance leases expiring within one to four years. Under the terms of
the leases, the Group has the option to acquire the leased assets after paying the residual amount on expiry of the leases.
Commitments in relation to finance leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payments
Less future finance charges
Total Lease Liability
Represented by:
Current liability
Non-current liability
78 BSA LIMITED ANNUAL REPORT 2013
877
2,940
-
3,817
(477)
3,340
673
2,667
3,340
378
1,394
-
1,772
(284)
1,488
276
1,212
1,488
23
23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Note
2013
$’000
2012
$’000
Consolidated
(iii)
Hire Purchase Commitments
The Group has purchased various plant and equipment with a carrying amount of $2,361,000 (2012: $4,884,000) under hire purchase agreements expiring within one to four
years. Under the terms of the agreements, the Group has the option to acquire the assets after paying the residual amount on expiry of the agreements.
Commitments in relation to hire purchase agreements are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Minimum payments
Less future finance charges
Total Hire Purchase Liability
Represented by:
Current liability
Non-current liability
2,499
2,442
-
4,941
(364)
4,577
2,211
2,366
4,577
2,128
2,821
-
4,949
(474)
4,475
1,815
2,660
4,475
23
23
BSA LIMITED ANNUAL REPORT 2013
79
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 28 SEGMENT INFORMATION
(a)
AASB 8 Operating Segments
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision
maker in order to allocate resources to the segment and to assess its performance.
(b)
Products and services from which reportable segments derive their revenues
The Group is organised into the following reportable segments:
Technical Field Force Solutions (TFFS)
Technical Field Force Solutions provides contracting services to the telecommunications, subscription television and communication industries. The contracting services include
the delivery of bundled services over hybrid fibre coax network, the installation of subscription television, the installation of free to air television antennas and security systems.
Technical Design and Construction Projects (TDCP)
Technical Design and Construction Projects provides the design and installation of building services for commercial and industrial buildings including: Mechanical Services, Air
Conditioning, Heating and Ventilation, Refrigeration and Fire services.
Technical Maintenance Services (TMS)
Technical Maintenance Services provides the maintenance of building services for commercial and industrial buildings including: Mechanical Services, Air Conditioning, Heating
and Ventilation, Refrigeration and Fire services.
(c)
Segment revenues and results
The following is an analysis of the Group’s revenue and results by reportable operating segments:
Technical Field Force Solutions
Technical Design and Construction Projects
Technical Maintenance Services
Other
Corporate costs including acquisition, legal and advisory
Finance costs
Profit before tax
Revenue
Year Ended
30 Jun 13
$’000
134,805
249,706
89,763
310
474,584
30 Jun 12
$’000
137,314
283,307
71,434
491
492,546
Segment Profit
Year Ended
30 Jun 13
$’000
30 Jun 12
$’000
3,660
3,521
2,631
-
9,812
(5,082)
(1,932)
5,694
5,506
4,884
-
16,084
(6,421)
(1,462)
2,798
8,201
Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2012: Nil).
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 3. Segment profit represents the profit earned by each
segment without allocation of central administration costs and Directors’ salaries, investment income, gains and losses, finance costs and income tax expense. This is the measure
reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
80 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
(d)
Segment assets and liabilities
Segment assets
Technical Field Force Solutions
Technical Design and Construction Projects
Technical Maintenance Services
Consolidated assets
Segment liabilities
Technical Field Force Solutions
Technical Design and Construction Projects
Technical Maintenance Services
Consolidated liabilities
Year Ended
30 Jun 13
$’000
30 Jun 12
$’000
100,561
60,311
16,522
68,022
101,656
19,435
177,394
189,113
44,073
42,592
15,934
32,488
69,430
12,546
102,599
114,464
For the purposes of monitoring segment performance and allocating resources between segments:
.
.
All assets, except cash, are allocated to reportable segments. In 2013, cash is allocated to TFFS who operate the Group’s treasury. Goodwill is allocated to reportable segments as
described in note 17. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments; and
All liabilities are allocated to reportable segments. Liabilities for which reportable segments are jointly liable are allocated in proportion to segment assets.
(e)
Other segment information
Continuing operations
Technical Field Force Solutions
Technical Design & Construction Projects
Technical Maintenance Services
Depreciation and amortisation
Additions to non-current assets
Year Ended
Year Ended
30 Jun 13
$’000
30 Jun 12
$’000
30 Jun 13
$’000
30 Jun 12
$’000
3,055
2,528
2,859
8,442
2,338
3,244
2,057
7,639
5,149
1,570
2,892
9,611
4,721
3,218
1,853
9,792
BSA LIMITED ANNUAL REPORT 2013
81
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 28 SEGMENT INFORMATION (CONTINUED)
(f)
Geographical information
The Group only operates in Australia.
The Group’s revenue from continuing operations from external customers and information about its non-current assets by geographical location are detailed below.:
Revenue from external customers
Year ended
Non-current assets
Year Eded
30 Jun 13
$’000
474,584
474,584
30 Jun 12
$’000
492,546
492,546
30 Jun 13
83,787
83,787
30 Jun 12
$’000
82,185
82,185
Australia
(g)
Information about major customers
The Group has a number of customers to whom it provides both products and services. The Group supplies a single external customer in the Technical Field Force Solutions
segment who accounts for 18% of external revenue (2012: 19%). The Group’s next most significant client is in the Technical Design and Construction segment and accounts for
13% of external revenue (2012: 18%).
NOTE 29 CASH FLOW INFORMATION FOR THE PERIOD
Consolidated
(a)
Reconciliation of profit to net cash flows from operating activities for the year
Profit for the year
Depreciation
Amortisation
Share-based payment expense
Net (profit) on sale of non-current assets
Change in operating assets and liabilities
(Increase)/decrease in trade receivables
(Increase)/decrease in inventories
Decrease in deferred tax asset
Decrease/(Increase) in other operating assets
(Decrease)/increase in trade payables
(Decrease) in other operating liabilities
(Decrease)/increase in provision for income taxes payable
(Decrease) in provision for deferred taxes payable
Increase in provisions
Net cash generated by operating activities transactions
82 BSA LIMITED ANNUAL REPORT 2013
2013
$’000
3,763
7,002
1,440
(129)
(47)
(9,636)
(2,161)
(538)
3,638
(1,362)
(12,894)
(5,878)
-
278
(16,524)
2012
$’000
5,810
5,373
2,266
151
(18)
3,771
100
1,044
(1,313)
2,741
(1,935)
4,992
(35)
964
23,911
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
2013
$’000
2012
$’000
(b)
(i)
(ii)
Non-cash transactions
During the year the consolidated entity acquired plant and equipment with an aggregate value of $3,942,000 (2012:$4,396,000) by means of finance leases. These acquisitions
are not reflected in the cash flow statement.
During the year the consolidated entity paid dividends, but did not offer holders of ordinary shares to elect to have all or part of their dividend entitlements satisfied by the issue
of new ordinary shares rather than by being paid in cash. In 2012, this amounted to $1,855,000.
(c)
Credit Standby Arrangements with Banks
Credit facility
Amount utilised
Unused credit facility
The major facility is summarised as follows:
Working Capital Facility
(d)
Loan facilities
Loan facilities
Amount utilised
Unused loan facility
The major facilities are summarised as follows:
Acquisition Finance Loans
16,000
-
16,000
14,636
(14,636)
-
10,000
-
10,000
9,250
(9,250)
-
Loan 1 is for $3,687,500 and is fully drawn and has an expiry date of 30 September 2014. Half the interest is paid on a fixed basis under an interset rate swap and half is variable.
The current interest rate is 8.77% (2012: 6.11%) Loan 2 is for $2,937,500 and is fully drawn and has an expiry date of 30 September 2014. Half the interest is paid on a fixed basis
under an interset rate swap and half is variable. The current interest rate is 8.77% (2012: 5.425%). Loan 3 is for $7,650,000 and has an expiry date of 30 September 2014. Half the
interest is paid on a fixed basis under an interset rate swap and half is variable. The current interest rate is 8.77% (2012: N/A).
Finance will be provided under the facility provided the Company and the consolidated entity has not breached any borrowing requirements and the required financial ratios are met.
(e)
Guarantees
Guarantees to the value of $23,275,718 were utilised at 30 June 2013 (2012: $19,621,673), are secured by fixed and floating charge to the bank over the assets of the Company
together with guarantees in favour of the parent given by all controlled entities.
(f)
Surety Bonds
Surety Bonds of which $23,605,833 were utilised at 30 June 2013 (2012: $18,355,202), are unsecured.
BSA LIMITED ANNUAL REPORT 2013
83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 30 SHARE-BASED PAYMENTS
(a)
Employee Option Plan
The establishment of the BSA Limited Employee Option Plan was approved by shareholders at the 2004 AGM. Staff eligible to participate are those who are full-time or
permanent part-time employees of any company in the Group, including an Executive Director and Non-Executive Director of the company and whom the Board of Directors has
sole discretion to determine to be eligible to participate but does not include a person who has a relevant interest in greater than 5% of the issued ordinary share capital of the
Company.
The exercise price and exercise period applicable to any options to be offered under the Option Plan will, at or before the time of issuing an invitation to eligible employees to
subscribe for options, be determined by the Board in its absolute discretion.
Subject to any restrictions in the Listing Rules or the Corporations Act 2001, the Board may in its absolute discretion impose on the options such other terms as it considers appropriate.
As soon as practicable after receipt of a valid notice of exercise of an option together with the exercise price the Company will allot the appropriate number of ordinary shares. Any
shares issued on the exercise of the options granted pursuant to the resolution will be officially quoted and will rank equally with all other shares on issue in the Company and all the
rights and entitlements of the holders in respect of those shares will be identical to the rights and entitlements of the holders of the currently issued shares in the Company.
Options can only be exercised after three years if the employee remains in the employment of the Company and the option will then expire two years after this date. If the
employee terminates their employment within the three years, the option is exercisable for 12 months from the date after termination. If the Company is subject to a takeover the
option will vest and be exercisable for a period of three months.
Options may not be transferred, though prior to issue a nominee may be advised for consideration by the Board.
There were no options outstanding at 30 June 2013 (2012: Nil).
Fair value of options granted
There have been no options granted since 25 November 2004.
There is no employee benefits expense in the income statement (2012: nil), which relates, in full, to equity-settled share-based payment transactions.
84 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
(b)
Employee Share Scheme
A scheme under which shares were issued by the Company to employees for no cash consideration was ratified by shareholders at the 2004 AGM. All permanent employees
(including Executive Directors) who were continuously employed by the consolidated entity for a period of at least one year were eligible to participate in the scheme. Employees
could elect not to participate in the scheme.
Under the scheme, eligible employees were offered $1,000 worth of fully-paid ordinary shares in BSA Limited for the Year Ended 30 June 2004 for no cash consideration. The
market value of shares issued under the scheme, measured as the weighted average market price on the day of issue of the shares, was recognised in the balance sheet as share
capital and as part of employee benefit cost.
Offers under the scheme are at the discretion of the Company. No offers were made during year the ended 30 June 2013 (2012: Nil).
Shares under the scheme may not be sold until the earlier of three years after issue or cessation of employment with the consolidated entity. In all other aspects the shares rank
equally with other fully-paid ordinary shares on issue (see note 25(c)).
The number of shares issued to participants in the scheme is the offered amount divided by the weighted average price at which the Company's shares are traded on the
Australian Stock Exchange during the five trading days immediately before the date of the offer.
(c)
Executive Securities Plan
The establishment of the BSA Executive Securities Plan was approved by shareholders at the 2005 AGM. The Plan was established as a mechanism to provide the Company's key
Executives with a direct equity involvement and incentive in the Company which aligns them with the shareholders.
The number of securities to be offered and the time at which securities may be offered from time to time to Executives and the price and terms of payment, shall be determined by
the Board in its discretion.
The Board may at such times as it determines invite any Executive to be a member of the Plan.
If an Executive to whom an invitation has been issued forwards to the Company a duly completed Loan Application and the Transfer Documents together with his acceptance, and
where appropriate his Application for Shares, then the Company shall, in accordance with the terms of the Loan Agreement, lend to the Executive such amount as the Executive has
applied for in the Loan Application.
The maximum amount of any Loan shall be the total subscription price for the shares applied for.
No interest is payable by the borrower under the Loan Agreement.
An Executive shall not sell, mortgage, charge, assign or otherwise dispose of or encumber any shares before payment or repayment of any amount outstanding to the Company in
respect thereof.
Subject to the above restriction and to the terms of the Loan Agreement (if any) deemed to be entered into by the Executive, an Executive shall from the Date of Allotment, be the
absolute beneficial owner of the shares.
Unless the Directors of the Company otherwise provide in the terms of any Invitation, all Plan Shares shall rank for dividends declared on or after the Date of Allotment and shall
in all respects rank equally with and have the same rights and entitlements as all other fully paid ordinary shares of the Company.
Under the Loan Agreement, the borrower shall repay the balance outstanding of the Outstanding Principal when the borrower ceases to be an employee or Director of the Lender.
BSA Limited has adopted the policy of having a rolling three year maturity date for all Executives who do not have a termed employment contract.
Set out below are summaries of securities accepted under the plan:
Consolidated and parent entity
Grant Date
Expiry Date
Issue Price
(cents)
Balance at Start
of the Year
Granted During
the Year
Released from Escrow
During the Year
Balance in Escrow at
End of the Year
Number
Number
Number
Number
13 Oct 2006
19 Jul 2007
11 Sep 2007
13 Sep 2007
14 Dec 2007
10 Feb 2009
Total
0.23
0.63
0.68
0.68
0.68
0.10
700,000
1,600,000
150,000
200,000
400,000
1,700,000
4,750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
700,000
1,600,000
150,000
200,000
400,000
1,700,000
4,750,000
BSA LIMITED ANNUAL REPORT 2013
85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 30 SHARE-BASED PAYMENTS (CONTINUED)
(d)
Employee Performance Rights Plan
The establishment of the BSA Employee Performance Rights Plan was approved by shareholders at the 2008 AGM. The Plan was established to reward selected eligible employees
and to:
•
•
•
•
•
Provide an incentive for the creation of, and focus on, shareholder wealth;
Enable the Company to recruit and retain the talented people needed to achieve the Company's business objectives;
Link the reward of key staff with the achievement of strategic goals and the performance of the Company;
Align the financial interests of participants in the Plan with those of Company shareholders; and
Ensure the remuneration packages of employees are consistent with market practice.
Securities may be offered under the Plan and the Board has discretion to determine who is offered the opportunity to participate.
Generally, securities are subject to a holding restriction and cannot be traded unless certain performance conditions are met or as otherwise specified at the time of the relevant
award after acquisition by the participant.
Rights to acquire shares will not be exercisable until the end of the final measurement period, and until those rights have satisfied all vesting conditions and all performance
hurdles established by the Board. This is subject to a number of exceptions (including death, cessation of employment, takeovers and schemes of arrangement). The rights have a
specified life determined by the Board. The initial grant of rights (the Grant Date) will have a life terminating five years after the Grant Date or such other date as determined by
the Board (the Expiry Date).
Rights granted to certain participants in the initial grant will be at zero vesting value and will be subject to the following performance conditions as determined by the Board:
i.
ii.
Service condition of two to three years; or
The Company’s performance as measured by earnings per share (“EPS”) being the EPS for the relevant Measurement Period as determined by the Board having regard
to the financial statements. Certain growth in EPS for the shares must be attained in respect of each Measurement Period and pro rata in respect of each Measurement
Period and service condition of three years.
The Board will prescribe the date when performance under the hurdle is measured for each tranche.
On or after the end of the final measurement period and provided any performance hurdle prescribed by the Board has been achieved and, where applicable, to the extent it has
been achieved, the Plan Participant may then acquire shares by exercising the rights.
A right lapses if it is not exercised by the Expiry Date.
The Exercise Price (if any) will be an amount determined by the Board from time to time, fixed at the date of grant or determined by application of methodology approved by the Board.
Once Rights have been exercised by an Eligible Employee (subject to certain Performance Conditions being met), the Company may make non-refundable contributions to the Plan
Company to either:
•
•
Fund the purchase of a new Plan Share; or
The acquisition on the ASX of an existing share and transfer to the participant of that share, to which the participant is entitled under the Rights.
The plan company is Computershare Plan Co Pty Limited ACN 098 404 696 or any other Company that the Board may approve from time to time. After rights are exercised, the
plan company will subscribe for new shares or acquire shares in the ordinary course of trading on the ASX for participants, as directed from time to time by the Board.
Consolidated and parent entity
Grant Date
Exercise Date
Expiry Date
Exercise Price
(cents)
Balance at Start
of the Year
Granted During
the Year
Exercised
During the Year
Forfeited
During the Year
Balance in
Escrow at End
of the Year
Number
Number
Number
Number
Number
10 Feb 2009
10 Feb 2012
10 Feb 2014
29 Sep 2009
29 Sep 2012
29 Sep 2014
24 Aug 2010
24 Aug 2013
24 Aug 2015
14 Nov 2011
14 Nov 2014
14 Nov 2016
Total
-
-
-
115,000
1,195,934
1,489,500
3,218,000
6,018,434
-
-
-
-
-
-
(208,967)
-
-
-
-
(124,000)
(122,000)
115,000
986,967
1,365,500
3,096,000
(208,967)
(246,000)
5,563,467
86 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 31 BUSINESS COMBINATION
(a)
Summary of Acquisition
On 1 September 2012, the Group acquired 100% of the assets of Reat Holdings Pty Limited (Trading as Allied Cooling Services) for a purchase consideration of $188,000. Reat
Holdings provides Air Conditioning services and operates in Kalgoorlie, Western Australia. These assets were acquired with the objective of extending the presence of the Group
into Kalgoorlie to service the gold and nickel mines in the area of which the largest mines are serviced by contractors based in Perth.
(b)
Details of the fair value of the assets and liabilities acquired and goodwill are as follows:
Purchase consideration:
Cash consideration
Equity consideration
Total purchase consideration
Fair value of identifiable assets acquired (refer to (c) below)
Goodwill (refer to (c) below and note 17)
Identifiable intangible assets (refer note 18)
There were no acquisition related costs incurred on this transaction.
$’000
188
188
-
188
48
140
-
188
BSA LIMITED ANNUAL REPORT 2013
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 31 BUSINESS COMBINATION (CONTINUED)
(c)
Assets and liabilities acquired
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Trade and other payables
Provision for deferred tax liability
Net assets acquired
Purchase consideration settled in cash
Cash and cash equivalents in subsidiary
Cash outflow on acquisition
$’000
-
-
41
132
( 125)
-
48
188
-
188
The above goodwill is attributed to the fact that Reat Holdings provides BSA with a presence in the Kalgoorlie building services market.
None of the goodwill arising on this acquisition is expected to be deductible for tax purposes.
No part of the operations of Reat Holdings have or will be disposed of as part of the business combination.
From the date of acquisition, Reat Holdings has contributed $1,506,318 to the revenue and $262,639 to the profit for the year from continuing operations.
NOTE 32 EVENTS OCCURING AFTER THE BALANCE SHEET DATE
Other than the following, the Directors are not aware of any significant events since the end of the reporting period.
Subsequent to year end, the NSW Office of State Revenue (OSR) informally advised of a possible payroll tax-related liability of approximately $11.7 million, including interest and
penalties, for the six year period 2008-2013. This issue relates principally to the Technical Field Force Services business and the status of its contractor workforce, full details are
described in Note 22.
88 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 33 RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no more favourable than those to other parties unless otherwise stated.
(a)
Transactions with related parties:
Consolidated Entity
Rent was paid to The Day Street Unit Trust in which M Lowe, a Director, has a beneficial interest
Outstanding balances arising from purchases of services
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Purchase of services
Rent for premises from Director
2013
$
96,000
2012
$
112,000
192,000
96,000
(b)
Equity instrument disclosures relating to key management personnel
(i) Rights holdings
The numbers of rights over ordinary shares in the Company held during the financial year by each Director of BSA Limited and other key management personnel of the Group,
including their personally related parties, are set out below.
2013
Stephen Nash
Karl Nixon
2012
Stephen Nash
Mark Lowe
Karl Nixon
Balance at
Start of Year
Granted as
Compensation
Rights
Exercised
Net Change
Other
Balance at End
of Year
Vested but Not
Exercisable
Vested and
Exercisable
Rights Vesting
During Year
1,360,000
1,521,000
2,881,000
-
-
-
-
-
-
-
-
-
1,360,000
1,521,000
2,881,000
-
-
-
-
-
-
-
-
-
Balance at
start of year
Granted as
Compensation
Rights
Exercised
Net Change
Other
Balance at end
of year
Vested but not
exercisable
Vested and
exercisable
Rights vesting
during year
-
1,360,000
1,374,000
1,362,000
746,000
613,000
2,736,000
2,719,000
-
-
-
-
-
1,360,000
( 2,120,000)
( 454,000)
( 2,574,000)
-
1,521,000
2,881,000
-
-
-
-
-
-
-
-
-
-
-
-
Further details of schemes can be found in the Directors' Report.
BSA LIMITED ANNUAL REPORT 2013
89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 33 RELATED PARTY TRANSACTIONS (CONTINUED)
(ii) Share holdings
The numbers of shares in the Company held during the year by each Director of BSA Limited and other key management personnel of the Group, including their personally related
parties, are set out below. There were no shares granted during the reporting period as compensation.
2013
Directors of BSA Limited
Ordinary Shares
Ross Johnston
Mark Lowe
Paul Teisseire
Michael Givoni
Max Cowley
Daniel Collis
Ordinary Shares - Escrowed
Mark Lowe
2012
Directors of BSA Limited
Ordinary Shares
Ross Johnston
Mark Lowe
Paul Teisseire
Michael Givoni
Max Cowley
Ordinary Shares - Escrowed
Mark Lowe
Balance at
the start of
the year
1,634,315
10,115,403
404,769
230,000
58,333,195
-
-
200,000
70,917,682
Balance at
the start of
the year
1,818,634
10,115,403
263,921
150,000
53,130,178
200,000
65,678,136
Rights
Exercised
Other Changes
During the Year
Balance at the
End of the Year
Balance
Held Nominally
-
-
-
-
-
-
-
-
-
( 425,000)
-
-
-
( 58,333,195)
58,333,195
-
-
1,209,315
10,115,403
404,769
230,000
-
-
-
-
-
-
58,333,195
58,333,195
200,000
-
( 425,000)
70,492,682
58,333,195
Rights
Exercised
Other Changes
During the Year
Balance at the
End of the Year
Balance
Held Nominally
-
-
-
-
-
-
-
( 184,319)
-
140,848
80,000
5,203,017
1,634,315
10,115,403
404,769
230,000
-
-
-
-
58,333,195
58,333,195
-
200,000
-
5,239,546
70,917,682
58,333,195
90 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
(c)
Executive Securities Loans
2013
2012
2011
2010
2009
2008
2007
2006
Opening
Balance
Balance at
End of Year
$000
1,477
2,552
2,656
2,487
2,437
1,029
833
807
$000
1,473
1,477
2,552
2,656
2,487
2,437
1,029
833
Notional
Interest
Charged
$000
90
93
44
334
171
148
63
26
Notional
Interest
Not Charged
$000
Provision for
Impairment
$000
Number of
Individuals
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
11
13
13
13
13
6
1
Individuals with loans above $100,000 in reporting period.
2013
Opening Balance
Notional Interest Charged Using
Effective Interest Rate Method
Balance at End
of Year
Highest Balance
During Period
Brendan Foley
Ray Larkin
Leaston Paull
Bryce Wood
Peter Tripodi *
Younis Tehfe
$
490,499
188,844
188,844
160,332
147,500
112,397
* Balance at year end stated at actual due to the terms of the loans.
$
34,334
13,219
13,219
11,223
-
7,868
$
490,499
188,844
188,844
160,332
143,750
112,397
$
490,499
188,844
188,844
160,332
147,500
112,397
2012
Opening Balance
Notional Interest Charged Using
Effective Interest Rate Method
Balance at End
of Year
Highest Balance
During Period
Mark Foley *
Brendan Foley
Ray Larkin
Leaston Paull
Bryce Wood
Peter Tripodi *
Grant Backhouse
Mark Lowe
Younis Tehfe
$
869,000
490,499
188,844
188,844
160,332
155,000
136,000
112,397
112,397
* Balance at year end stated at actual due to the terms of the loans.
$
-
32,853
12,659
12,708
10,738
-
-
3,560
7,868
$
-
490,499
188,844
188,844
160,332
147,500
-
50,400
112,397
$
869,000
490,499
188,844
188,844
160,332
155,000
136,000
112,397
112,397
The above current loans represent unsecured loans to purchase shares in BSA Limited which was passed at a meeting of members held on 12 December 2005. The shares were
issued between 13 October 2006 and 10 February 2009 at values ranging from 10.0 cents per share and 68.0 cents per share. The loans are repayable on the termination of each
individual from the Company and do not bear interest. These loans have been booked into the accounts at net present value on a rolling three year basis.
At the discretion of the Board, the above loan to Peter Tripodi was not repaid on termination. The outstanding principal is now due and payable.
BSA LIMITED ANNUAL REPORT 2013
91
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 34 FINANCIAL INSTRUMENTS
Fair value of financial instruments carried at amortised cost
The Directors consider that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the financial statements approximate their fair values.
Consolidated
Financial Assets
Cash and cash equivalents
Loans and receivables
Trade and other receivables
Financial Assets at amortised cost
Financial liabilities
Financial liabilities held at amortised cost
Trade and other payables
Borrowings
Financial liabilities at amortised cost
NOTE 35 FINANCIAL RISK MANAGEMENT
(a)
General objectives, policies and processes
2013
$’000
2012
$’000
2,009
24,734
86,469
88,478
70,532
22,553
93,085
80,473
105,207
85,584
15,213
100,797
In common with all other businesses, the Group is exposed to financial risks that arise. This note describes the Group’s objectives, policies and processes for managing those risks
and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used
to measure them from previous periods unless otherwise stated in this note.
The principal financial instruments from which financial instrument risk arises are:
- Trade receivables;
- Cash at bank;
- Bank overdrafts;
- Trade and other payables; and
- Borrowings.
The Board has overall responsibility for the determination of the Group’s risk management objectives and polices and, whilst retaining ultimate responsibility for them, it has
delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s Finance function. The
Group’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results of the Group where such impacts may
be material. The Board receives monthly reports from the Finance department through which it reviews the effectiveness of the processes put in place and the objectives and
policies it sets. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility.
Further details regarding these policies are set out below.
92 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
(b)
Credit Risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the Group incurring a financial loss. This usually occurs when
debtors fail to settle their obligations owing to the Group.
Trade receivables consist of a large number of customers. The Group does not have significant credit risk exposure to any single counterparty or group of counterparties having
similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities. Concentration of credit risk to the largest counterparty did
not exceed 12% of gross monetary assets at balance date. Concentration of credit risk to any other counterparty did not exceed 10% of gross monetary assets at balance date.
The maximum exposure to credit risk at balance date is as follows:
Consolidated
Receivables
Included in loans and receivables, the most significant customer accounts for 6.7% of trade receivables at 30 June 2013 (2012:9.4%).
The maximum exposure to credit risk at balance date by country is as follows:
Consolidated
Australia
The maximum exposure to credit risk for cash and trade receivables at balance date by type of customer is as follows:
Consolidated
Technical Field Force Solutions
Technical Design and Construction Projects
Technical Maintenance Services
2013
$’000
86,468
86,468
2013
$’000
86,468
86,468
2013
$’000
25,812
47,110
13,546
86,468
2012
$’000
105,207
105,207
2012
$’000
105,207
105,207
2012
$’000
34,529
55,406
15,272
105,207
The Group’s most significant customer, a Technical Design and Construction Projects customer, accounts for $8,416,031 of trade receivables at 30 June 2013. At 30 June 2012, the
Group’s most significant customer was a Technical Design and Construction Projects customer which accounted for $6,001,700.
All major customers are credit worthy, as detailed above.
The Group has a significant concentration of credit risk as all loans and lease liabilities are with the one financial institution.
BSA LIMITED ANNUAL REPORT 2013
93
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 35 FINANCIAL RISK MANAGAMENT (CONTINUED)
(c)
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the
management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves,
banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and
liabilities. The table below sets out details of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.
Financing arrangements
The following financing facilities were available at balance date:
Consolidated
Credit stand-by arrangements
Total facilities:
Working Capital Facility
Product Swap Facility
Debtor Finance Facility
Used at balance date:
Working Capital Facility
Product Swap Facility
Debtor Finance Facility
Unused at balance date:
Working Capital Facility
Product Swap Facility
Debtor Finance Facility
Bank loans
Total facilities:
Used at balance date
Unused at balance date
Total unused credit facilities at balance date
Master Asset Finance Facility
Total facilities:
Used at balance date
Unused at balance date
Refer Note 23(a) for details of terms of financing arrangements.
94 BSA LIMITED ANNUAL REPORT 2013
2013
$’000
-
-
16,000
16,000
-
-
-
-
-
-
16,000
16,000
14,275
14,275
-
16,000
10,500
7,917
2,583
2012
$’000
10,000
5,000
-
15,000
-
5,000
-
5,000
10,000
-
-
10,000
4,250
4,250
-
10,000
10,500
5,963
4,537
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Maturity Analysis - Group
The following table details the Group’s remaining contractual maturity for its financial liabilities with agreed repayment periods. The table has been drawn up based on the
undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.
To the extent that interest flows are at floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is
based on the earliest date on which the Group may be required to pay.
The table below includes the weighted average effective interest rate and a reconciliation to the carrying amount in the Statement of Financial Position as an example of
summary quantitative data about exposure to interest rates at the end of the reporting period that an entity may provide internally to management personnel.
Financial Liabilities
30 June 2013
Bank loans
Trade creditors
Other payables
Finance lease liabilities
TOTAL
30 June 2012
Bank loans
Trade creditors
Other payables
Finance lease liabilities
TOTAL
Carrying
Amount
$’000
14,636
39,560
40,244
7,917
102,357
Carrying
Amount
$’000
9,250
40,798
53,781
5,963
109,792
Contractual Cash
Flows
$’000
15,654
39,560
40,244
8,758
104,216
Contractual Cash
Flows
$’000
9,733
40,798
53,781
6,721
111,033
< 6
mths
$’000
3,550
39,560
40,244
1,688
85,042
< 6
mths
$’000
1,374
40,798
52,589
1,253
96,014
6- 12
mths
$’000
1-3
years
$’000
3,073
9,031
-
-
1,688
4,761
6- 12
mths
$’000
-
-
5,382
14,413
1-3
years
$’000
1,952
6,407
-
-
1,253
3,205
-
-
4,215
10,622
> 3
years
$’000
-
-
-
-
-
> 3
years
$’000
-
-
1,192
-
1,192
The following table details the Group’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of
the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the
Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis.
Financial Assets
30 June 2013
Trade debtors
Other receivables
TOTAL
30 June 2012
Trade debtors
Other receivables
TOTAL
Carrying
Amount
$’000
11,315
75,154
86,469
Carrying
Amount
$’000
4,548
75,925
80,473
Contractual Cash
Flows
$’000
11,399
75,751
87,150
Contractual Cash
Flows
$’000
4,909
77,132
82,041
< 6
mths
$’000
11,399
74,279
85,678
< 6
mths
$’000
4,909
75,302
80,211
6- 12
mths
$’000
-
1
1
6- 12
mths
$’000
-
3
3
1-3
years
$’000
-
192
192
1-3
years
$’000
-
143
143
> 3
years
$’000
-
1,279
1,279
> 3
years
$’000
-
1,684
1,684
BSA LIMITED ANNUAL REPORT 2013
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 35 FINANCIAL RISK MANAGAMENT (CONTINUED)
(d)
Market Risk
Interest rate risk
The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. The risk is managed by the
Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to
align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.
Sensitivity Analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period.
For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 2%
increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change
in interest rates.
Consolidated
2013
Borrowings AUD
Tax effect (30%)
After tax increase/ (decrease)
Carrying Amount AUD
+2% of AUD IR
-2% of AUD IR
$’000
14,636
-
14,636
Profit
$’000
293
(88)
205
Other Equity
$’000
-
-
-
Profit
$’000
(293)
88
(205)
Other Equity
$’000
-
-
-
The above analysis assumes all other variables remain constant.
The same analysis was performed for the period ended 2012.
Consolidated
2012
Borrowings AUD
Tax effect (30%)
After tax increase/ (decrease)
Carrying Amount AUD
+2% of AUD IR
-2% of AUD IR
$’000
9,250
-
9,250
Profit
$’000
185
(56)
129
Other Equity
$’000
-
-
-
Profit
$’000
(185)
56
(129)
Other Equity
$’000
-
-
-
The above analysis assumes all other variables remain constant.
96 BSA LIMITED ANNUAL REPORT 2013
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between the fixed and floating rate interest amounts calculated on agreed notional principal amounts.
Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the issued variable rate debt.
The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the
credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.
The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period:
Cash flow hedges
Outstanding receive floating pay fixed contracts
Less than 1 year
1 to 2 years
Average Contracted
Fixed Interest Rate
2013
%
8.77
8.77
2012
%
5.43
5.43
Notional Principal Value
Fair Value
2013
$’000
-
7,138
7,138
2012
$’000
4,875
-
4,875
2013
$’000
-
(41)
(41)
2012
$’000
(625)
-
(625)
The interest rate swaps settle on a quarterly basis. The floating rate on the interest rate swaps is the local interbank rate of Australia. The Group will settle the difference between
the fixed and floating interest rate on a net basis.
All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Group’s
cash flow exposure resulting from variable interest rates on borrowings. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount
accumulated in equity is reclassified to profit or loss over the period that the floating rate interest payments on debt affect profit or loss.
Cash flow hedges are regarded as a Level 2 financial instrument. Level 2 fair value measurements are those derived from inputs other than quoted prices that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
BSA LIMITED ANNUAL REPORT 2013
97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2013
NOTE 36 CAPITAL RISK MANAGEMENT
The Group considers its capital to comprise its issued capital, share-base payment reserve, cash flow hedge reserve and accumulated losses.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a combination of capital
growth and distributions. In order to achieve this objective, the Group seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain
a sufficient funding base to enable the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims,
either through altering its dividend policy, new share issues or the reduction of debt, the Group considers not only its short-term position but also its long-term operational and
strategic objectives.
It is the Group’s policy to review its gearing ratio to ensure adequate funds are available to meet its obligations. The Group’s gearing ratio at the balance sheet date is shown below :
Consolidated
Gearing ratios
Net (cash) / debt
Total equity
Total Gearing Ratio
2013
20,544
74,795
27.47%
2012
(9,521)
74,649
(12.75%)
Gearing levels have increased due to increased working capital requirements associated with Technical Design and Construction Projects and Technical Maintenance Services
projects, resulting in less cash at bank at year end. It is the Board’s intention to monitor gearing levels going forward. There have been no other significant changes to the Group’s
capital management objectives, policies and processes in the year nor has there been any change in what the Group considers to be its capital.
NOTE 37 CONTINGENT LIABILITIES
Guarantees established in favour of National Australia Bank Limited and Swiss Re International SE for guarantees issued to various clients for satisfactory contract performance,
secured by cross guarantees from all wholly owned group members amounting to $46,881,551 (2012 - $37,976,875).
During the normal course of business, entities within the Group incur normal contractors and product liability in relation to contracts which may include claims or litigation by
or against the entities. Where the outcome is probable and can be reasonably quantified, provision is made in these financial statements. Although for many issues the ultimate
outcome cannot be reliably determined, at the date of this report no material losses are expected.
NOTE 38 CORPORATE INFORMATION
The Financial Report of BSA Limited for the year ended 30 June 2013 was authorised for issue in accordance with a resolution of the Directors on 30 September 2013 and covers
the consolidated entity consisting of BSA Limited and its subsidiaries as required by the Corporations Act 2001. BSA Limited is a company limited by shares incorporated in
Australia and whose shares are publicly traded on the Australian Stock Exchange.
The financial report is presented in Australian currency.
The address of the registered office and principal place of business is:
7 Figtree Drive
Sydney Olympic Park NSW 2127
98 BSA LIMITED ANNUAL REPORT 2013
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2013
The Directors declare that:
(a)
(b)
(c)
In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
In the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as
stated in note 3.1 to the financial statements;
In the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 (Cth),
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
consolidated entity; and
(d)
The Directors have been given the declarations required by s.295A of the Corporations Act 2001 (Cth).
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the
deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in
accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order
applies, as detailed in note 19 to the financial statements will, as a group, be able to meet any obligations or liabilities to which they are, or
may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001 (Cth).
On behalf of the Directors.
Ross Johnston
Chairman
Sydney
30 September 2013
BSA LIMITED ANNUAL REPORT 2013
99
INDEPENDENT AUDITOR’S REPORT
Deloitte Touche Tohmatsu
ABN: 74 490 121 060
Eclipse Tower
Level 19
60 Station Street
Parramatta NSW 2150
PO Box 38
Parramatta NSW 2124 Australia
DX 28485
Tel: +61 (0) 2 9840 7000
Fax: +61 (0) 2 9840 7001
www.deloitte.com.au
Independent Auditor’s Report
to the Board of Directors of BSA Limited
Report on the Financial Report
We have audited the accompanying financial report of BSA Limited, which comprises the
consolidated statement of financial position as at 30 June 2013, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of cash flows and the consolidated
statement of changes in equity for the year ended on that date, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity, comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year as set out on pages 41 to 99.
Directors’ Responsibility for the Financial Report
The directors of BSA Limited are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. In note 3.1, the
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the consolidated 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 entity’s
preparation of the financial report that gives a true and fair view, 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.
Member of Deloitte Touche Tohmatsu Limited
Liability limited by a scheme approved under Professional Standards Legislation.
100 BSA LIMITED ANNUAL REPORT 2013
INDEPENDENT AUDITOR’S REPORT
Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001 ,
which has been given to the directors of BSA Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of BSA Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the consolidated financial statements also comply with International Financial Reporting
Standards as disclosed in Note 3.1
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 18-28 of the directors’ report for the year
ended 30 June 2013. 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.
Opinion
In our opinion the Remuneration Report of BSA Limited for the year ended 30 June 2013, complies
with section 300A of the Corporations Act 2001 .
DELOITTE TOUCHE TOHMATSU
Glen Sanford
Partner
Chartered Accountants
Parramatta, 30 September 2013
Member of Deloitte Touche Tohmatsu Limited
Liability limited by a scheme approved under Professional Standards Legislation.
BSA LIMITED ANNUAL REPORT 2013
101
SHAREHOLDER INFORMATION
THE SHAREHOLDER INFORMATION SET OUT BELOW WAS APPLICABLE AS AT 31 JULY 2013
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and above
Number
of
Holders
162
619
401
1,136
283
2,601
Ordinary
Shares
78,025
2,034,035
3,237,206
45,498,461
178,013,475
228,861,202
Number
of
Holders
Number
of
Holders
Performance
Rights
Options
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8
5
13
-
-
-
515,000
3,073,467
3,588,467
There were 483 (2012: 313) holders of less than a marketable parcel of ordinary shares.
B. EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name of Holder
BIRKETU PTY LTD
MR GREG MULLANE
SETLOBE PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
RUMDAB PTY LTD
AUST EXECUTOR TRUSTEES LTD
HGT INVESTMENTS PTY LTD
SAMLOWE PTY LTD
CITICORP NOMINEES PTY LIMITED
TALOOMBI PTY LTD
MR BRENDAN GERARD FOLEY
MR DAVID CAMPBELL
AJ HARDWICK INVESTMENTS PTYLTD
MR ROSS JAMES JOHNSTON + MRS DENISE ANN JOHNSTON
EDINGTON PTY LIMITED
CTSF PTY LTD
MS SUE ELIZABETH MCGREGOR
VALETER PTY LTD
MS DAN LIU
MR JOHN ELDRED WILLIAMS + MRS JUNE MABEL WILLIAMS
Ordinary Shares
Number
Held
Percentage of
Issued Shares
58,333,195
25.49%
7,548,743
7,392,405
6,643,237
6,370,655
4,524,341
3,797,000
2,722,998
2,415,592
1,721,257
1,702,617
1,450,000
1,250,000
1,209,315
1,153,200
1,075,945
1,000,000
900,000
843,000
813,606
3.30%
3.23%
2.90%
2.78%
1.98%
1.66%
1.19%
1.06%
0.75%
0.74%
0.63%
0.55%
0.53%
0.50%
0.47%
0.44%
0.39%
0.37%
0.36%
Top 20 Shareholders
112,867,106
49.32%
102 BSA LIMITED ANNUAL REPORT 2013
SHAREHOLDER INFORMATION
Number Held
58,333,195
Percentage
25.49%
C. SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are set out below:
Ordinary Shares
BIRKETU PTY LTD
D. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person, or by proxy, shall have one vote and upon a poll each share shall have one vote.
(b) Option over an ordinary share
No voting rights.
(c) Rights over an ordinary share
No voting rights.
BSA LIMITED ANNUAL REPORT 2013
103
CORPORATE DIRECTORY
BSA Limited - Corporate
Registered Office (Sydney)
7 Figtree Drive
Sydney Olympic Park NSW 2127
P
F
E
W
+61 2 8748 2400
+61 2 8748 2577
corporate@bsa.com.au
www.bsa.com.au
Share Registry
Computershare Investor Services
GPO Box 2975
Melbourne VIC 3001 Australia
P
P
F
1300 85 05 05
+61 3 9415 4000
+61 3 9473 2500
Auditor
Deloitte Touche Tohmatsu
Level 10, 10 Smith Street
Parramatta NSW 2150
Banker
National Australia Bank
255 George Street
Sydney NSW 2000
Technical Design
and Construction Projects
Head Office (Sydney)
Level 3, Quad 2, 8 Parkview Drive
Sydney Olympic Park NSW 2127
P
F
+61 2 9763 6200
+61 2 9763 6201
Technical
Field Force Solutions
Head Office (Sydney)
7 Figtree Drive
Sydney Olympic Park NSW 2127
P
F
+61 2 8748 2400
+61 2 8748 2577
Technical
Maintenance Services
Head Office (Sydney)
Level 3, Quad 2, 8 Parkview Drive
Sydney Olympic Park NSW 2127
P
F
+61 2 9763 6200
+61 2 9763 6201
www.bsa.com.au