APPENDIX 4E
Results for Announcement to
the Market and Annual Report
BSA Limited
50 088 412 748
FOR THE YEAR ENDED 30 JUNE 2019
CONTENTS
- APPENDIX 4E
- ANNUAL REPORT
RESULTS FOR ANNOUNCEMENT TO THE MARKET
FOR THE PERIOD ENDED 30 JUNE 2019
PREVIOUS CORRESPONDING PERIOD 30 JUNE 2018
APPENDIX 4E
Revenue from ordinary activities
Profit from ordinary activities after income tax attributable to members
Up
Up
9.7%
21.9%
Net profit for the period attributable to members
Down
89.0%
Basic earnings per share
Diluted earnings per share
Net tangible asset backing per ordinary share
DIVIDENDS
Interim dividend (fully franked)
Final dividend (fully franked)
to
to
to
$’000
469,484
10,764
172
2018
cents
2.087
2.079
5.41
2019
cents
2.523
2.511
3.42
Franked amount per
Amount per security
security at 30% tax
(cents)
(cents)
Nil
0.50
Nil
0.50
Record date for determining entitlement to dividends
30 September 2019
Payment date of dividend
Total dividend payable
4 November 2019
$2,141,000
The Company’s Dividend Reinvestment Plan (DRP) will be in operation for this dividend. 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. Shares will be allotted or transferred under the DRP
for a price which is equal to the arithmetic average of the daily volume weighted average market price (rounded to the nearest whole cent) of all fully paid
shares of that class sold on the ASX (excluding special crossings and other categories reasonably determined by the Directors as distorting the fair market
value of the shares) during the ten trading days commencing on the second trading day following the relevant Record Date, determined by reference to
such information as the Directors approve for the purpose from time to time. None of this dividend is foreign sourced.
This report is based on the consolidated financial statements which have been audited by Deloitte Touche Tohmatsu, with the Independent Auditor’s Report
included in the consolidated financial statements.
BSA LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET
2019
BSA LIMITED
ANNUAL REPORT
BSA | Maintain has been delivering services to Curtin University
since July 2018. This involves the provision of preventative,
corrective and reactive maintenance for the mechanical and
BMS assets across all their WA campuses located in Bentley,
Perth CBD and Kalgoorlie.
2
BSA LIMITED ANNUAL REPORT 2019 CONTENTS
Chairman’s Report - 5
Managing Director’s Report - 6
Directors’ Report - 14
Remuneration Report - 17
Auditor’s Independence Declaration - 27
Financial Report - 28
Directors’ Declaration - 89
Independent Auditor’s Report - 90
Shareholder Information - 96
Corporate Directory - 98
BSA LIMITED ANNUAL REPORT 2019
3
The 44 level office block on Mount St is one of North
Sydney’s largest commercial towers. In conjunction
with Laing O’Rourke, BSA | Build completed work
on this project in mid 2019. It has been designed to
achieve a 5-star Green Star and a 5-star NABERS
energy rating.
KEY HIGHLIGHTS*
$469.5
million
$21.8
million
$10.8
million
Revenue
4
EBITDA
Net Profit
* from Continuing Operations (refer page 13)
BSA LIMITED ANNUAL REPORT 2019 CHAIRMAN’S REPORT
CHAIRMAN’S
REPORT
Michael Givoni
Chairman
FY2019 was a successful year for BSA Limited, with improvements
During the course of FY2019, important management changes assisted
noted across all key financial metrics for continuing operations.
BSA Limited to realign key priorities. Our CEO, Nicholas Yates has
A detailed review of these results is outlined in the Managing Director’s
prioritised organic Business Development. Tim Harris was appointed
Report, however the high level financial results from continuing
Deputy CEO and added the finance function to his operational focus.
operations are:
Revenue $469.5 million (2018: $427.9 million)
EBITDA $21.8 million (2018: $19.2 million)
With our most senior executives having clarity on key priorities, this
restructure has already begun to yield positive results.
Throughout the last year your Board also approved investment in an IT
systems enhancement that will automate key parts of our field service
EBITDA excluding significant items $24.6 million (2018: $21.4 million)
and maintenance tasks. An important by product will be increased
NPAT $10.8 million (2018: $8.8 million)
Operating cash inflow $18.3 million (2018: $4.7 million)
Basic earnings per share of 2.52 cents (2018: 2.09 cents)
Net Cash $16.3 million (2018: $7.0 million)
Final dividend declared 0.5 cents per share (2018: 0.5 cents)
It was pleasing to see the progress in our core business areas,
particularly our annuity businesses across Connect and Maintain.
The substantial reduction in legacy issues and a return to reporting
results without underlying commentary and add back adjustments is a
key objective of the Board heading into FY2020.
In the Connect core business we are greatly encouraged by the
feedback we have received from our major clients in nbn, Foxtel
and Optus. It has been pleasing to see market leading KPI
performance as we continue to consolidate our position as a genuine
tier one Telecommunications market service provider.
An extensive piece of work has been undertaken to reduce the
company’s exposure to higher perceived risks in the HVAC construction
sector. In this regard, on 13 August 2019 BSA | Build | HVAC Major
Projects business in New South Wales and Victoria was successfully
divested to Fredon Air Pty Limited. BSA will retain a Special Projects
Team to support our BSA Maintain clients – we view this as an
important differentiator in the self-delivery of facilities maintenance.
A key driver in the divestment of HVAC Build and the right sizing of
overheads is to create a sustainable platform that will generate a more
predictable and higher margin portfolio of business units across BSA.
New organic Business Development opportunities were unlocked in
the solar and smart metering space, which included new works with
Estia Aged Care. In the Maintain division, new contracts were secured
including YMCA (National Multi services) and BHP Commercial offices.
We are confident that our Business Development activities will ensure
that we substantially replace the lost HVAC Build volume in FY2020.
productivity in the field as well as greater visibility for our customers.
These IT enhancements will be a key driver of the working capital
improvements that both the Board and the Management Team
are striving for.
We also undertook a Board refresh in recent months. We welcomed
David Prescott as a new Director who brings strong and relevant skills
to the BSA Limited Board in Mergers & Acquisitions and Corporate
communications. David is a hardworking Director who is prepared to roll
up sleeves as required.
Long standing Board Member, Edwin Maxwell Cowley announced his
retirement from the BSA Board in February 2019. Max spent over eleven
years on the BSA Limited Board during which time he contributed his
wealth of knowledge in a constructive and forthright manner. On a
personal note, I would like to thank Max for his sage advice and steady
hand throughout his journey with BSA Limited.
BSA has continued to enjoy a supportive and strong relationship with
our financiers National Australia Bank in FY2019 and we appreciate the
ongoing support and commitment.
Finally I thank my fellow Directors for their support in what has
been another challenging but fulfilling year. I wish to acknowledge
and also thank management and staff for their ongoing hard work
and commitment.
Michael Givoni
Chairman
20 August 2019
5
BSA LIMITED ANNUAL REPORT 2019 MANAGING DIRECTOR’S REPORT
A solar power installation at an Estia Health aged
care facility, which forms part of a national roll
out across the Estia portfolio. Stage 3 will be
commencing in August 2019.
MANAGING DIRECTOR’S
REPORT
OPERATIONAL AND FINANCIAL HIGHLIGHTS AND
OUTLOOK
A positive financial result and the achievement of key strategic
outcomes has made FY2019 a successful year for BSA Limited by
any measure. Group revenue from continuing operations has increased
by 9.7% to $469.5 million (2018: $427.9 million) whilst EBITDA increased
by 13.7% to $21.8 million (2018: $19.2 million) and net profit grew to
$10.8 million (2018: $8.8 million). Operating cash inflow increased by
289.4% to $18.3 million and Net Cash at year end was $16.3 million
(including $4.1 million of cash held in the BSAF Joint Operation which
has been divested post year-end). BSA has rejuvenated our finance
function and the refreshed financial management team has driven a
keen focus on key aspects of cash management.
The BSA | Connect business unit again performed well, achieving
consecutive record years in terms of revenue and profit. BSA | Maintain
achieved improved revenue and EBITDA results whilst streamlining
operations and generating tangible cost efficiencies. Our Fire
business continues to improve performance and continues to push
into the burgeoning infrastructure business. As per our previously
stated strategic goals we have completed the divestment of the HVAC
Build business which significantly reduces our exposure to lump
Nicholas Yates
Managing Director and
Chief Executive Officer
6
BSA LIMITED ANNUAL REPORT 2019 MANAGING DIRECTOR’S REPORT
“A positive financial result and the achievement of key strategic
outcomes has made FY2019 a successful year for BSA Limited
by any measure.”
sum contracting risk and is significant in underpinning our move to
recertification in ISO 14001, 9001 and ASNZS 4801 during the year.
an annuity income services based business model. FY2019 saw the
proportion of annuity revenue at 62% and with the sale of the HVAC
Build Major Projects business, this will shift even more sharply in
FY2020 to approximately 75%.
During FY2019 BSA refreshed the Safety Leadership program through
the Walk the Talk program. This program saw Executive and Senior
Management undertake more frequent field visits to discuss practical
safety approaches with our people. This supports BSA’s path to a leader
FY2019 saw BSA continue in our efforts to grow and expand into new
led Health and Safety culture.
markets, in line with our previously announced strategic goals. We are
now established as a respected operator in the metering services, new
energy and solar spaces.
Though outside the reporting period, we were pleased to receive
recertification from the Federal Safety Commissioner in July 2019,
after the completion of an extensive auditing and review process.
A key focus for the business has been reorganisation of our Business
The recertification extends to 26 July, 2022.
Development function, to ensure maximum returns from the significant
investment made in this area. This approach has begun to yield results,
with a number of contracts awarded in new and existing markets
throughout the year.
GROWTH
With the divestment of the BSA | Build HVAC business being
completed post year end, the opportunities for growth in the
remaining pillars of the BSA business are a key focus. Our strategic
growth plans are based on genuine end-to-end service provision
Looking forward to FY2020 BSA will continue to concentrate on a range
of initiatives that align with our HSE vision to “Foster a collaborative
working environment where the only choice that can be made at work
is the safe and environmentally sustainable choice – in turn enabling our
people to return home safe every day”. The key pillars of the forward
Safety Strategy comprise our Systems, Risk Management (Critical Risk
Control), HSE Capability, Health, Wellbeing, Leadership and Culture. A
number of activities are encompassed in each of the pillars that will be
delivered throughout the business.
across Telecommunications and Property Asset Management. We
COMMUNITY SUPPORT
will be building this framework on our significant foundation through
organic growth and via expansion both geographically and into
adjacent markets.
During the year BSA, its subsidiaries and its employees, contributed to
a number of charity fundraisers including Property Industry Foundation,
South Newcastle Rugby League, Everyday Hero Foundation, Rotary
Our Advisory and design team continues to provide our Business
Australia, Childrens Cancer institute, Balmoral Swim for Cancer,
Units with innovative engineering solutions that underpin our end-to-
Sydney Uni Sport, Southern Districts Rugby, Cancer Council, Australian
end asset solution offering and assist in converting opportunities and
Himalayan Foundation and Balcatta Football Club. We also continued
providing value to their clients. This allows us to partner with our clients
our long-standing support of Youngcare through the provision of
through the end-to-end life cycle management of their assets, and
services in kind.
has enabled the provision of a multitude of technical services ranging
from planning for Asset Capture/Collection and Internet of Things
(“IoT”) implementation to Energy modelling, Mechanical/Fire/Electrical
infrastructure upgrade designs and problem based investigations
and solutions.
HEALTH, SAFETY, ENVIRONMENT AND QUALITY (HSEQ)
BSA has recorded a continued reduction in Total Recordable Injury
Frequency Rate (TRIFR) since 2016 with current performance reported
at 8.86 (June 2019) vs 14.74 (July 2016) which is indicative of a 39.9%
decrease on TRIFR over the 3 year period. Unfortunately, in the FY2019
period the target of 10% reduction on the TRIFR was not achieved with
the TRIFR increasing slightly. This was primarily due to an increase in
medical treatment injuries to Contractors across the Group.
Utilising the BSA Group Business Process Framework and individual
Business Unit documentation, the BSA Group successfully achieved
7
BSA LIMITED ANNUAL REPORT 2019 MANAGING DIRECTOR’S REPORT
BSA | CONNECT
BSA | Connect again achieved a record year in terms of revenue and
profit. BSA | Connect completed over 1 million tickets in FY2019. The
generated from our long-standing Foxtel contract declining 8.7%
putting further pressure on margins. BSA is working collaboratively
business achieved modest revenue uplift of 0.8%, which combined
with Foxtel to identify and implement further improvements to what is
with the successful implementation of workforce and cost optimisation
considered an already best-of-breed delivery model.
programs delivered an EBITDA result of $19.3 million, representing a
$0.8 million or 4.3% increase on the prior year.
BSA | Connect achieved significant organic revenue growth within the
“smart” electricity metering field services business throughout FY2019
BSA | Connect substantially completed construction under the nbn
Multi-technology Integrated Master Agreement (MIMA), resulting in the
to >$5 million (199% increase) and EBITDA improvements of $0.4
million and has now established itself in this market, being awarded a
reduction of year-on-year revenue generated from this project of $24.6
second contract in late FY2019, which will support continued growth
million. This revenue shortfall was more than offset by a strong increase
and increased market share in FY2020.
in activity under the nbn Operate and Maintain (OMMA) contract,
which saw revenue growth of $33.3 million (27.7%). This growth was
due to the business’s ability to rapidly mobilise a significant increase in
its technical workforce to meet the nbn ramp up requirements for the
Hybrid Fibre Coax (HFC) rollout. This process was assisted by BSA’s
strategic investment in building an internal network workforce, which
was recognised by nbn with the award of network optimization and
maintenance works.
Softness in the subscription television market continues, as access to
faster broadband to support streaming services improves, with revenue
8
As a key pillar of its People, Process and Systems strategy, BSA |
Connect has embarked on a significant investment in a world-class
field service management solution that enables the delivery of
significantly more streamlined, scalable and efficient services and a
greatly improved end-customer experience, which will provide BSA
with a platform for accelerated growth. BSA implemented a successful
pilot of the solution on the Optus Business platform in March 2019 with
a staged rollout to be delivered progressively through FY2020.
BSA LIMITED ANNUAL REPORT 2019 MANAGING DIRECTOR’S REPORT
KEY AREAS OF FOCUS FOR FY2020 INCLUDE:
•
Continue strong operational “on the ground” performance
within existing core contracts to secure partnerships over the
long-term as client needs evolve.
•
Continue the development of a highly-skilled internal technical
workforce to provide BSA with a key competitive advantage.
•
Continue the implementation of the new field service
management solution to optimise business and client outcomes
plus provide a solid growth platform.
•
Retain and expand services to existing customers via
geographic and new services opportunities.
•
Expansion of energy market services via geographic growth
and increased diversification of the customer base.
•
Entry into the mobile telecommunications market in
preparation for 5G opportunities.
•
Establishment and growth within the fixed wireless network
and residential sector.
•
Converting opportunities within adjacent sectors for delivery of
workforce management systems and resources management
solutions to scale.
•
Increased focus on identifying and converting opportunities
BSA | Connect
$251.5 million
Revenue
[2018: $249.4 million]
$19.3 million *
EBITDA
[2018: $18.5 million]
within Government departments related to telecommunications,
* Excludes Corporate Recharges
energy and Internet of Things (IoT) including Smart City end-
to-end opportunities.
•
Development of strategic partnerships enabling end-to-end
design, build, operate and maintain services.
BSA LIMITED ANNUAL REPORT 2019
9
MANAGING DIRECTOR’S REPORT
BSA | MAINTAIN
In FY2019, BSA | Maintain increased revenue by $9.8 million from $93.5
million to $103.3 million and EBITDA increased by $1.3 million from $2.9
forward, we will continue to explore and implement highly relevant
technological innovations as a key part of our value-added proposition.
million to $4.2 million.
Advisory and energy services have also continued to build additional
Throughout FY2019, BSA | Maintain continued to deliver and grow
service agreements across a diverse range of industries and regions
value to our national maintain clients through energy auditing and
consultancy on building upgrades to assist with energy reduction
resulting in a number of new contracts being secured including:
strategies across their portfolios.
•
•
•
•
YMCA (National Multi Services)
BHP Commercial Offices (WA, VIC and QLD)
Charles Darwin University (NT)
GMHBA Stadium (VIC)
• Woodside Karratha Housing (WA)
In addition, the following key contract extensions have been secured
during the financial year:
•
•
•
•
INPEX LNG Plant (NT)
Scentre Group (WA)
Sodexo / Rio Tinto (WA)
Various Government Councils
Continuing in the theme of organic expansion, BSA | Maintain has
extended its geographical and service offering footprint by opening
offices in Geelong, Katherine and Tasmania (August 2019), and
completing an expansion into electrical services from the existing
Karratha branch. Expansion plans continue to evolve around organic
operational delivery opportunities with plans progressing towards
further expansion into regional QLD.
BSA | Maintain has expanded the Building Automation division with
teams now established across NSW, VIC, QLD and WA. This expansion
has facilitated the exploration of technological developments in the
industry including data analytics, IoT and energy management to
strongly complement our existing client service offering. Looking
The BSA | Maintain | Fire division continued its growth journey in the
year and now has a very sound and scalable base to take advantage of
the growing external market to accelerate growth.
BSA | Maintain was formally recognised as Trainer of the Year
in Western Australia, combined with our first qualified female
tradesperson winning an award as best third year apprentice for 2018.
We will continue to invest in the growth and professional development
of key staff at all levels of the organisation, as we consider this to be a
foundation to fulfilling our strategic objectives.
A key focus for the BSA | Maintain team entering FY2020 will be to
drive further growth across all BSA service platforms while capturing
and leveraging the efficiencies of our size and scale.
The groundwork towards positioning BSA | Maintain as an industry
leader in complete asset life cycle management in every major capital
city and key regional locations across Australia is well-underway. The
existing geographical footprint, coupled with a breadth and depth of
service offerings, strongly positions BSA | Maintain for future
business growth.
BSA | Maintain
$103.3 million
$4.2 million *
Revenue
[2018: $93.5 million]
EBITDA
[2018: $2.9 million]
* Excludes Corporate Recharges
10
BSA LIMITED ANNUAL REPORT 2019
For more than 16 years, BSA | Maintain
has been delivering the mechanical
maintenance services across the entire
WA Scentre Group portfolio including
Westfield Innaloo, Westfield Whitford City
and Westfield Carousel – WA’s largest
shopping centre.
BSA LIMITED ANNUAL REPORT 2019
11
MANAGING DIRECTOR’S REPORT
BSA | BUILD
BSA | Build delivered the new 9 storey Acute
Services Building as part of Stage 2 of the
$700 million Blacktown and Mount Druitt
Hospitals Expansion Project.
The BSA | Build performance improved as the strategy to refocus the
business to meet the challenging external environment was successfully
As previously announced, BSA Limited has secured and is delivering
some of the largest Fire Protection contracts in Australia. These projects
implemented.
As a result of a previously announced strategic review, the business
unit ceased HVAC operations in QLD and WA in the year and
refocused the VIC and NSW businesses on more selective tendering
represent a significant milestone for BSA and underpin not only the
strategy to be the market leader in specialist fire protection services
nationally, but also our strategic objective to enter the burgeoning
infrastructure market.
where margin and risk apportionment were appropriate for the work
Our modularised solutions in NorthConnex and 60 Martin Place are
being undertaken. This restructuring activity has impacted the EBITDA
being lauded as significant ‘step change’ innovations which have
result for the year.
Significant projects completed include Blacktown Hospital,
100 Mount Street in North Sydney while the Glen Shopping Centre in
Melbourne and the Calvary Hospital in Adelaide approach completion.
BSA | BUILD | FIRE
BSA | Build | Fire continued to establish and maintain its status as a
tier 1 solution provider, with end-to-end in-house capability in the Fire
construction sector. BSA | Build | Fire has continued its year on year
growth targets and is well positioned to further enhance its offerings.
fundamentally changed the market and provided huge benefits to our
clients. We will be continuing with this integrated project delivery model
which is adding great value to our clients through more robust design,
less re-work and increased productivity. This innovative approach also
reduces the commercial risk usually associated with these types of
projects for both BSA and our clients.
FY2019 has seen the successful development of BSA’s commercial
solar capabilities delivering a number of projects across the health,
education and retail sectors. A core, specialist team has been
established and will continue to work closely with state based project
teams on the national roll out of solar across Estia Health Aged Care
sites and delivery of a strong pipeline of tendered projects for FY2020.
12
BSA LIMITED ANNUAL REPORT 2019 MANAGING DIRECTOR’S REPORT
Major contracts secured throughout the year include:
DISCLOSING NON-IFRS FINANCIAL INFORMATION
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)*
•
•
•
NorthConnex - NSW
Crown Casino Sydney
Grafton Prison
• Wynyard Commercial development
Profit/(loss) for the year from
continuing operations
As per the introductory commentary, we have now divested the HVAC
Build Major Projects business which as well as lowering the overall risk
Add back
will allow us to provide added focus to our attractive Special Projects
Income tax expense/(benefit)
and Fire businesses.
Nicholas Yates
Managing Director and
Chief Executive Officer
20 August 2019
Finance costs
Interest revenue
Depreciation
Amortisation expense
EBITDA
Total Significant Items (note 6.4)
EBITDA excluding Significant Items
* From continuing operations.
FY2019
$’000
10,764
-
4,033
819
(11)
5,515
674
21,793
2,818
24,611
FY2018
$’000
8,827
-
4,465
604
(24)
4,619
674
19,165
2,193
21,358
BSA | Build | Fire
$66.0 million
Revenue
[2018: $51.8 million]
$5.3 million *
EBITDA
[2018: $4.0 million]
* Excludes Corporate Recharges
BSA LIMITED ANNUAL REPORT 2019
13
DIRECTORS’ REPORT
THE BOARD OF DIRECTORS PRESENTS ITS REPORT
The Directors of BSA Limited (‘BSA’ or the ‘Company’) present their report on the Company and its
subsidiaries for the financial year ended 30 June 2019.
THE BOARD OF DIRECTORS AS AT 30 JUNE 2019
MICHAEL GIVONI
CHAIRMAN (NON-EXECUTIVE)
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
Ltd. 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 and was appointed as Chairman from 29
April 2015. Michael holds a number of other Non-Executive Director
and Chair roles in significant privately owned businesses including
Winslow Group, RSEA, First5Minutes and Buzz Products.
NICHOLAS YATES
MANAGING DIRECTOR AND CHIEF
EXECUTIVE OFFICER
Mr. Yates graduated with a Bachelor of
Engineering (Mechanical) from the University
of Sydney and went on to forge an extensive
career in the building services and facilities
management industries. Commencing as a site engineer overseeing
mechanical services installations, Nicholas then progressed through
various management roles within Lend Lease and eventually moved
on to become CEO of APP Corporation Pty Limited, Australia’s leading
Construction Project Management consulting business. When APP
was acquired by Transfield Services, Nicholas moved into a series
of leadership roles within Transfield Services, most recently Chief
Executive Officer, Infrastructure ANZ. Nicholas sits on the Boards of a
number of private companies and was appointed Managing Director
and Chief Executive Officer of BSA Limited on 13 March 2014.
PAUL TEISSEIRE
NON-EXECUTIVE DIRECTOR
Mr. Teisseire is a professional independent
Non-Executive Director. Paul spent over 20
years in private practice as a corporate lawyer
specialising in business and corporate law with
a special interest in corporate governance.
Paul is a Non-Executive Director and Audit Committee Chairman of
Drake Supermarkets Pty Ltd. Paul was appointed as a Non-Executive
Director on 23 March 2005 and is currently Chair of the Audit
Committee.
MAX COWLEY
NON-EXECUTIVE DIRECTOR
Mr. Cowley practised as Principal of Chartered
Accounting firm E M Cowley & Co for 47
years. Max’s years of corporate and financial
experience are extensive. Max was a Director
of WIN Corporation Pty Ltd, Australia’s
largest regional television network and has been involved with that
organisation from its commencement and over the past 37 years.
Having previously served on the Board of BSA from 2 May 2006 until 27
November 2012, Max was appointed as a Non-Executive Director on 14
April 2014 and retired on 8 February 2019.
GRAEME BARCLAY
NON-EXECUTIVE DIRECTOR
Mr. Barclay has extensive experience
in executive leadership and strategic
development in areas that brings valuable
skills to the BSA Board and Company.
Graeme successfully led all aspects of a major
MARK LOWE
NON-EXECUTIVE DIRECTOR
Mr. Lowe was appointed as a Director of BSA
on 1 August 2007 upon completion of the
telecommunications group for more than a decade in the role of Group
CEO with responsibility for financial performance, strategy, sales,
corporate development, international expansion, operations and capital
structure.
acquisition of the Triple ‘M’ Group. Mark brings
Graeme also has senior executive level experience within investment
a wealth of knowledge to the Company from
banking and chartered accounting businesses, with responsibilities
his 30 years’ experience in the installation
including property, investment banking, corporate finance and
and maintenance of Air-Conditioning and Fire Protection Services.
corporate restructuring.
Mark is a former Director of Construction Information Systems Limited
(NATSPEC) and a former National President of the Air-Conditioning
Mechanical Contractors Association of Australia. Mark has been a
Non-Executive Director since 2 March 2012.
Graeme is a member of the Australian Institute of Company Directors, a
Fellow of the Financial Services Institute of Australasia and is a qualified
Chartered Accountant in Scotland and Australia/NZ. Graeme is currently
a Non-Executive Director of Codan Limited, Non-Executive Chairman
of Uniti Group Limited and CEO of Axicom Group Holdco Pty Limited.
Graeme was appointed as a Non-Executive Director on 30 June 2015,
and is currently Chair of the Remuneration Committee.
14
BSA LIMITED ANNUAL REPORT 2019 DIRECTORS’ REPORT
DAVID PRESCOTT
NON-EXECUTIVE DIRECTOR
Mr. Prescott is the founder and Managing
Director of Lanyon Asset Management, a
value-oriented equities fund manager. He has
over 20 years investing and financial analysis
experience working for firms in Australia and
CORPORATE GOVERNANCE
BSA 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 Statement which is available on the Company’s
website at www.bsa.com.au/pages/about/corporate-governance.html
the UK. David was previously Head of Equities at institutional fund
manager, CP2 (formerly Capital Partners). David has an Economics
degree from the University of Adelaide, a Graduate Diploma in Applied
Finance and Investment from the Securities Institute of Australia
(FINSIA) and is a CFA Charterholder. David was appointed as a Non-
Executive Director on 3 June 2019.
REVIEW OF OPERATIONS
Information relating to the operations of BSA including a description
of principal activities, a review of operations, significant changes in
activities and affairs during the year and likely future developments
and prospects can be found in the Chairman’s Report and Managing
Director’s Report on pages 5 to 13.
DIRECTOR INDEPENDENCE
The Board considers four of BSA’s Directors independent, as defined
under the guidelines of the ASX Corporate Governance Council,
being: Michael Givoni, Paul Teisseire, Mark Lowe and Graeme Barclay.
In assessing the independence of Directors, the Board follows the ASX
guidelines as set out in the Corporate Governance Statement on the
Company’s website.
PERFORMANCE OF DIRECTORS
In accordance with Principle 2.5 of the ASX Corporate Governance
Principles and Recommendations, the Board conducts a review of
the performance of its Directors and the Board’s function as a whole
each year. The evaluation of Directors is carried out in accordance
with the process established by the Board, led by the Chairman of the
Remuneration Committee.
COMPANY SECRETARY
The following person held the position of Company Secretary at the end
of the financial year:
Mr Graham Seppelt - Graham has had extensive experience as a
contract accountant and in corporate advisory roles. He is currently
also Company Secretary for Legend Corporation Limited and Erinbar
Limited.
ENVIRONMENTAL REGULATION AND PERFORMANCE
BSA was not subject to any particular or significant environmental
regulations of the Commonwealth, individual states, or territories,
during the financial year.
15
BSA LIMITED ANNUAL REPORT 2019 DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
As at 30 June 2019, the following information is provided in relation to Directors:
Director
Special Responsibilities
Ordinary Shares
Options
Share Rights
Michael Givoni
Non-Executive Director
Chairman of Board
Member of Remuneration Committee
Member of Audit Committee
Nicholas Yates
Executive Director
Managing Director
Paul Telsseire
Non-Executive Director
Member of Remuneration Committee
Chairman of Audit Committee
Mark Lowe
Non-Executive Director
Member of Remuneration Committee
Member of Audit Committee
Graeme Barclay
Non-Executive Director
Chairman of Remuneration Committee
Member of Audit Committee
David Prescott
Non-Executive Director
Member of Remuneration Committee
Member of Audit Committee
1,255,946
Nil
Nil
2,907,625
Nil
1,259,524
680,012
Nil
Nil
10,315,403
Nil
Nil
155,925
Nil
Nil
91,405,746*
Nil
Nil
*David Prescott is Investment Manager of Lanyon Asset Management Pty Ltd which holds the 91,405,746 ordinary shares in BSA Limited.
At the date of this Annual Report, there were no changes in the interests of Directors either for Ordinary Shares or Share Rights.
DIRECTORSHIPS HELD IN OTHER LISTED ENTITIES
Period of Appointment
Name of Company
Position Held (Non-Executive or Executive Director)
Graeme Barclay
Appointed 1 February 2015
Codan Limited
Appointed 24 September 2018
Uniti Group Limited
Non-Executive Director
Non-Executive Chairman
16
BSA LIMITED ANNUAL REPORT 2019 REMUNERATION REPORT
REMUNERATION REPORT - AUDITED
This remuneration report details the nature and amount of remuneration
for each key management person of BSA Limited.
The Company’s policy for determining the nature and amount of
remuneration for Board members and Senior Executives of the
Company is as follows and is set out under the following main headings:
A.
Principles used to determine the nature and amount
of remuneration
Details of remuneration
Service agreements
Cash bonuses
Share-based compensation
Remuneration Consultants
B.
C.
D.
E.
F.
The information provided in this remuneration report has been audited as
required by section 308(3C) of the Corporations Act 2001.
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 how the reward is paid. The Board ensures that
executives’ reward satisfies the following key criteria for good reward
governance practices:
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.
Alignment to shareholders’ interests:
•
Has the achievement of target financial profit as a core
component of performance reward;
•
As well as focusing each executive on key performance metrics
relevant to the role; and
•
Attracts and retains high calibre executives.
Alignment to program participants’ interests:
•
•
•
•
Rewards capability and experience;
Reflects competitive reward for contribution to
financial performance;
Provides a clear structure for earning rewards; and
Provides recognition for contribution.
The framework provides a mix of fixed and variable at-risk pay for
executives and senior managers as well as additional long-term
incentives for the most senior executives. As executives gain seniority
and greater responsibility within the Group, the balance of this mix
shifts to a higher proportion of at-risk rewards.
The Board has established a Remuneration Committee that 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
•
•
•
•
•
Competitiveness and reasonableness;
provides further information on the role of this committee.
Acceptability to shareholders;
Performance linkage/alignment of executive compensation;
Transparency; and
Capital management.
17
BSA LIMITED ANNUAL REPORT 2019 REMUNERATION REPORT
The table below sets out summary information about the consolidated entity’s earnings and movements in shareholder wealth for the five years to
30 June 2019:
Revenue
Net profit/(loss) before tax
Net profit/(loss) after tax
Share price at start of year
Share price at end of year
Final Dividend 1
Basic earnings per share
Diluted earnings per share
30 June 20192
30 June 20182
30 June 2017
30 June 2016
30 June 2015
$469.5m
$427.9m
$492.3m
$14.8m
$10.8m
$0.305
$0.325
$13.3m
$8.8m
$0.340
$0.305
0.50 cps
0.50 cps
2.52cps
2.51cps
2.09cps
2.08cps
$5.6m
$4.0m
$0.245
$0.340
0.50 cps
0.94 cps
0.93 cps
$511.9m
($3.0)m
($2.2)m
$0.165
$0.245
$543.7m
$5.4m
$3.9m
$0.100
$0.165
0.00 cps
0.00 cps
(0.52) cps
(0.52) cps
1.11 cps
1.10 cps
1. Declared after the end of the reporting period and not reflected in the financial statements and will be franked to 100% at 30% corporate income tax rate
2. Based on continuing operations
Non-Executive Directors
Fees and payments to Non-Executive Directors reflect the demands
that are made on, and the responsibilities of, the Directors.
The Chairman’s fees are determined independently to the fees of
•
•
•
Base pay and benefits, including superannuation;
Short-term performance incentives; and
Long-term incentives principally through participation in the
performance rights plan.
Non-Executive Directors based on the Director’s experience and
The combination of these components comprises the executive’s
comparative roles in the external market. The Chairman is not present
total remuneration.
at any discussions relating to determination of his own remuneration.
Base Pay
Directors’ and Chairman’s Fees
Base pay is structured as a total employment cost package which may
The current base remuneration for Directors was last reviewed and
be delivered as a combination of cash and prescribed non-financial
determined on 26 June 2012, therefore there has been no increase in the
benefits at the executives’ discretion.
base remuneration paid to a Director for seven years. 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 a minimum ten hours per month. Directors
are reimbursed actual expenses or paid a per diem allowance for
attendance at the monthly meetings.
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 reflects 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.
Non-Executive Directors’ fees are determined within an aggregate
Directors’ fee pool limit, which is periodically recommended for approval
Benefits
by shareholders. The maximum currently stands at $600,000 per
Executives receive benefits including allowances.
annum and was last approved by shareholders at the Annual General
Meeting (AGM) on 26 November 2007. There has been no change to
Retirement Benefits
the aggregate fee pool for Non-Executive Directors for approximately 11
All employees are eligible to participate in the Company’s default
years. The following fees have applied during the year to 30 June 2019:
superannuation fund. Consistent with the change in legislation as at 1 July
2005, employees can exercise choice as to where their superannuation
Base fees
Chairman
Other Non-Executive Directors
is paid.
Short Term Incentives
$167,684
$91,560
Non-Executive Directors are entitled to participate in the Non-Executive
Director Fee Sacrifice Equity Plan.
Retirement Allowances for Directors
There are no retirement schemes or retirement benefits, other than
statutory superannuation, paid to Non-Executive Directors.
Executive Pay
Executive remuneration packages include a bonus based on a
combination of the Company achieving a predetermined profit target
and certain predetermined operational targets being met. Using a
profit target ensures variable at-risk reward is only available when
value has been created for shareholders and when achieved profit is
consistent with the business plan.
Each executive and senior manager with operational responsibilities
has a Short-Term Incentive (STI) depending on the accountabilities of
The Executive pay and reward framework has three components:
the role and impact on organisation and business unit performance.
18
BSA LIMITED ANNUAL REPORT 2019 REMUNERATION REPORT
The maximum target bonus opportunity is 80% of base salary.
Employee Performance Rights Plan
To the extent an STI bonus is earned, 50% of the bonus is paid in cash,
and the other 50%, which can either be cash or performance rights, is
deferred for a period of two years.
For the year ended 30 June 2019, the targets under the STI plans were
based on the Group and individual business unit financial objectives. The
target achievement required performance in delivering an overall increase
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.
in EBIT. The Group targets apply to the whole of the management team.
To achieve its corporate objectives, the Company needs to attract
The Remuneration Committee is responsible for assessing whether the
targets are met. Targets are set at the beginning of each financial year
and are set for the year. Short-term bonus payments are calculated in line
with actual performance versus target performance levels. Because short-
and retain key staff. The Board believes that awards made to selected
eligible employees under this plan:
•
Provide an incentive for the creation of, and focus on,
shareholder wealth;
term targets cover several operational areas of the business as well as the
•
Enable the Company to recruit and retain the talented people
overall Group target, a proportion of STI may be paid when business unit
needed to achieve the Company’s business objectives;
or other operational targets are achieved although the Group’s overall
•
Link the reward of key staff with the achievement of strategic
target may not be met.
Options
The BSA Employee Option Plan was approved by shareholders at the
2004 Annual General Meeting. The last of those options expired on 30
June 2010.
No Options have been granted since that date.
The board of directors has resolved to cancel the Employee Option Plan.
Employee Share scheme
A scheme under which shares are able to be 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.
Since that date, no further shares have been offered to employees
under the Employee Share Scheme.
The board of directors has resolved to cancel the Employee Share
Scheme.
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 interest in the Company to better align them with the
shareholders.
No offers were made under the Executive Securities Plan to any
Directors or employees of BSA Limited during the year ended 30 June
2019.
The number of shares held in escrow and the amount of the outstanding
loans as at 30 June 2019 is set out in section E of this report.
The board has resolved there will no further issues to or loans made to
goals and the performance of the Company;
•
Align the financial interests of participants with those of
Company shareholders; and
•
Ensure the remuneration packages of employees are consistent
with market practice.
Vesting of rights or shares under this Plan requires the achievement of
appropriate performance or service hurdles to be determined by the Board:
(i) Service condition of a specified period; 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.
Once rights have been exercised by an eligible employee (subject to
relevant service or 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 are not exercisable until the end of the final
measurement period, and until those rights have satisfied all vesting
conditions and any 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 (5) years after the grant date or such
any executives under this plan and has resolved to cancel this plan once
other date as determined by the Board.
the remaining loans have been repaid to the Company.
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.
19
BSA LIMITED ANNUAL REPORT 2019 REMUNERATION REPORT
A right lapses if the vesting conditions are not met.
The Company may impose a CHESS holding lock on Restricted Shares
During the year to 30 June 2019, 1,108,741 rights were granted to
executives, of which 553,301 have vested, 380,000 vest on 1 February
2020 and 175,440 vest on 30 June 2020.
Fee Sacrifice Equity Plan for Individual Non-Executive Directors
to ensure the participant does not sell them earlier than permitted
under the Rules. The Company will advise each participant when it
considers the specified disposal restrictions cease to apply.
Participants must not enter an arrangement with anyone if it would
have the effect of limiting their exposure to risk in relation to Deferred
The establishment of the BSA Fee Sacrifice Equity Plan for Individual
Rights or Restricted Shares.
Non-Executive Directors was approved by shareholders at the 2017
AGM. The plan establishes a mechanism for Non-Executive Directors
(NEDs) to acquire shares in the Company by electing to salary sacrifice
a proportion of annual fees, on a voluntary basis, and is intended to
align their interests with shareholders.
All individuals holding NED roles in the Company or a subsidiary of the
Company are eligible to become participants in the Plan.
Participants will be treated in a manner that does not advantage or
disadvantage them compared with other shareholders in the event of
bonus issues, rights issues and capital reorganisation.
If a participant ceases to be a NED of the Company or a subsidiary
of the Company any unexercised Restricted Rights will be exercised
automatically the day following cessation, and any Restricted Shares
held by a Participant that are subject to Specified Disposal Restrictions
The Company intends to invite each NED to voluntarily elect to apply
will cease to be subject to such restrictions on the day of cessation
for rights under the Plan, to be funded by salary sacrificing a proportion
unless otherwise determined by the Board and notified to the
of annual Board fees. While the Company intends to issue invitations
Participant in the Invitation.
following the half-year and full-year results announcements, the
Board will determine in its sole discretion each year whether to issue
invitations.
Invitations will include such terms as the Board deems appropriate
including the date of the invitation, the number of Deferred Rights that
a participant is eligible to apply for, that the cost of each right/share
is based on the 10 day VWAP post either the half or full year results
announcement, the period during which disposal restrictions will apply,
and such other terms and conditions as the Board determines.
During the year to 30 June 2019, Non-Executive Directors elected to
acquire 257,838 Deferred Rights under this Fee Sacrifice Equity Plan.
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
Deferred Rights granted under this Plan will be fully vested on the date
following:
of grant (being the date notified in a Notice of Grant).
Deferred Rights will be automatically exercised 90 days after grant
but may not be exercised earlier. On exercise of a right, the Board in
its discretion will either: a) issue shares to Participants or b) arrange
for shares to be acquired for the benefit of Participants by the trustee
of the BSA Employee Share Trust. The Company will contribute such
funds as needed to acquire shares either on-market or a subscription
to a new issue as directed by the Board. These funds are recouped over
12 months from the Directors’ fees that have been salary sacrificed to
acquire the Deferred Rights. The shares that result from the exercise of
Deferred Rights are Restricted Shares.
All shares acquired by Participants are subject to disposal restrictions
that prevent disposal until the earlier of 15 years from the date of
grant of rights and cessation of being a NED on the Board of BSA
or a subsidiary of the Company (which will be specified Disposal
Restrictions). During the period the Special Disposal Restrictions apply,
the Restricted Shares may not be sold or otherwise disposed.
(i) Chairman - Non-Executive
Michael Givoni
(ii) Executive Director
Nicholas Yates
(iii) Non-Executive Directors
Paul Teisseire
Max Cowley
Mark Lowe
Graeme Barclay
David Prescott
(iv) Deputy Chief Executive Officer
Timothy Harris
20
BSA LIMITED ANNUAL REPORT 2019 REMUNERATION REPORT
Non-Executive Directors, key management personnel of the Group and other executives of the Company and the Group
2019
Short-term
Benefits
Post
Long-
term
Employment
Benefits
Share-based
payments
Cash,
Interest
Unwind
Long
Name
Fees
Bonus
Loans
Superannuation
Leave
Benefits
Rights
Rights
Total
Related
Salary &
Cash
on
Service
Termination
Performance
$
$
$
$
$
$
$
%
$
%
Non-Executive Directors
Michael Givoni
Paul Teisseire
Max Cowley1
Mark Lowe
Graeme Barclay
David Prescott2
83,412
83,616
57,831
83,616
54,416
-
Sub-total
362,891
Non-Executive Directors
Executive Directors
Nicholas Yates
649,657
-
-
-
-
-
-
-
-
Other Key
Management Personnel
Deputy Chief
Executive Officer
Timothy Harris
572,738
50,000
Total compensation
1,585,286
50,000
1. Resigned on 8 February 2019.
2. Appointed 3 June 2019.
-
-
-
-
-
-
-
-
-
-
14,272
7,944
5,494
7,944
7,944
-
43,598
-
-
-
-
-
-
-
20,343
6,478
20,531
9,960
84,472
16,438
-
-
-
-
-
-
-
-
-
-
70,000
41.75
167,684
-
-
-
-
-
-
29,200
31.89
-
-
91,560
63,325
91,560
91,560
-
99,200
505,689
-
676,478
-
-
-
-
-
-
-
-
-
-
653,229
7.65
99,200
1,835,396
21
BSA LIMITED ANNUAL REPORT 2019
REMUNERATION REPORT
2018
Short-term
Benefits
Long-
term
Post Employment
Benefits
Share-based
payments
Cash,
Interest
Unwind
Long
Name
Fees
Bonus
Loans
Superannuation
Leave
Benefits
Rights
Rights
Total
Related
Salary &
Cash
on
Service
Termination
Performance
$
$
$
$
$
$
$
%
$
%
Non-Executive Directors
Michael Givoni
Paul Teisseire
Max Cowley
Mark Lowe *
Graeme Barclay
156,557
83,616
83,616
83,616
83,616
Sub-total
491,021
Non-Executive Directors
-
-
-
-
-
-
Executive Directors
Nicholas Yates
650,692
50,000
Other Key
Management Personnel
Chief Financial Officer
Nicholas Benson
395,030
50,000
Chief Operating Officer
Timothy Harris
541,533
63,544
Total compensation
2,078,276
163,544
-
-
-
-
-
-
-
-
-
-
14,272
7,944
7,944
7,944
7,944
46,048
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170,829
91,560
91,560
91,560
91,560
537,069
-
-
-
-
-
19,308
6,488
-
50,000
6.44
776,488
12.88
25,000
3,355
21,494
9,417
111,850
19,260
-
-
-
-
-
473,385
10.56
95,050
13.00
731,038
21.69
145,050
2,517,980
* During FY2018 Mark Lowe was contracted to the company within the BSA | Build business unit, to assist in driving improved performance from the business
unit. $24,000 of Mark Lowe’s remuneration relates to his role assisting BSA | Build during the year and was not Directors fees.
Performance Income as a Proportion of Total Remuneration:
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 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 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.
C.
SERVICE AGREEMENTS
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 Employee Performance Rights Plan. Other major provisions of the
agreements relating to remuneration are set out below.
Executives are on contracts with no fixed end date.
All contracts with executives may be terminated early by either party with three to six months notice.
22
BSA LIMITED ANNUAL REPORT 2019
REMUNERATION REPORT
D.
CASH BONUSES
Bonuses vested as per the below table during the financial year ended 30 June 2019.
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 FY2019 short-term incentives recognised as remuneration, forfeited or available for vesting in future
financial years is outlined below.
Name
Other key management personnel (Group)
Timothy Harris
E.
SHARE-BASED COMPENSATION
Executive Securities Loan
Set out below are summaries of Securities held in escrow:
Included in
Remuneration
% Vested in
current year
% Forfeited
in current year
50,000
100
-
Issue Price
Balance at Start
During the
During the Year Based on
Balance in Escrow
Granted
Released from Escrow
Amount
of Loan
Grant Date
(cents)
of the Year
Year
Full Loan Repayment
at End of the Year
provided
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
450,000
850,000
150,000
-
400,000
750,000
2,600,000
-
-
-
-
-
-
-
50,000
250,000
-
-
-
400,000
92,000
600,000
378,000
150,000
102,000
-
-
400,000
272,000
250,000
500,000
50,000
550,000
2,050,000
894,000
Employee Performance Rights Plan
Set out below are summaries of Rights issued to key management personnel under the plan:
Name
Grant Date
Vesting Date
Expiry Date
the Year
the Year
Year
the Year
Year
Date $
$
Number
Number
Number
Number
Released
Balance in
Fair Value
Balance
Granted
from Escrow
Forfeited
Escrow at
per Right
Aggregate
at Start of
During
During the
During
End of the
at Grant
Fair Value
Consolidated and parent entity
Nicholas Yates
25 Nov 2014
30 Jun 2015
25 Nov 2019
1,116,667
Timothy Harris
29 Nov 2016
1 Sep 2017
29 Nov 2021
200,000
Nicholas Yates
28 Nov 2016
31 Jan 2018
28 Nov 2021
142,857
Timothy Harris
4 Dec 2017
4 Dec 2017
4 Dec 2022
175,391
-
-
-
-
-
(200,000)
-
(175,391)
Timothy Harris
28 Jun 2019
30 Jun 2020
1 Mar 2024
-
175,440
-
-
-
-
-
-
1,116,667
0.165
184,250
-
0.325
-
142,857
-
175,440
0.350
0.371
0.285
Total
1,634,915
175,440
(375,391)
-
1,434,964
Rights are granted over ordinary shares and nil is payable on exercise.
50,000
-
50,000
284,250
23
BSA LIMITED ANNUAL REPORT 2019 REMUNERATION REPORT
NED Fee Salary Sacrifice Plan
Set out below are summaries of Deferred Rights issued to Non-Executive Directors under the plan:
Name
Grant Date
Date
Expiry Date
the Year
the Year
Year
the Year
Year
Date
Fair Value
Vesting
at Start of
During
During the
During
End of the
at Grant
Aggregate
Balance
Granted
from Escrow
Forfeited
Escrow at
per Right
Released
Balance in
Fair Value
Number
Number
Number
Number
$
Consolidated and parent entity
Michael Givoni
3 May 2018
3 May 2018
3 May 2033
207,838
Graeme Barclay
3 May 2018
3 May 2018
3 May 2033
50,000
-
-
(207,838)
(50,000)
Michael Givoni
28 Mar 2019
28 Mar 2019
28 Mar 2034
Graeme Barclay
28 Mar 2019
28 Mar 2019
28 Mar 2034
Total
-
-
251,708
(251,708)
105,000
(105,000)
257,838
356,708
(614,546)
-
-
-
-
-
0.337
0.337
0.278
0.278
-
-
-
-
-
$
-
-
-
-
-
Deferred Rights are granted over ordinary shares for the price specified as Fair Value per Deferred Right at the date of grant, and no further amount
is payable on the automatic exercise of the Right 90 days after grant.
F.
REMUNERATION CONSULTANTS
During the year ended 30 June 2019, the Board continued to consider the advice obtained from Godfrey Remuneration Group (GRG) as independent
advisor in relation to the current structure of the Executive Performance Rights Plan and to the implementation of a Fee Salary Sacrifice Plan for
Non-Executive Directors. The Board implemented the Fee Salary Sacrifice Plan following its approval at the 2017 AGM. No amendments have been
made to the Executive Performance Rights Plan.
The continuing engagement of GRG during the year by the Chairman of the Remuneration Committee was based on an agreed set of protocols that
have been followed by GRG, members of the Remuneration Committee and members of the key management personnel, governing the way in which
remuneration recommendations would be developed by GRG and provided to non-executive members of the Remuneration Committee.
These arrangements were implemented to ensure that GRG would be able to carry out its work, including information capture and the formation of its
recommendations free from undue influence by Executive Directors or executive key management personnel about whom the recommendations may relate.
The Board undertook its own inquiries and review of the processes and procedures followed by GRG and is satisfied that their remuneration
recommendations were made free from such influence.
The Board and Remuneration Committee confirm that GRG made remuneration recommendations within the meaning of the Corporations Act
in respect of the structure of the Incentive Plans being considered. These remuneration recommendations were made in respect of elements of
remuneration and were not in respect of the quantum of the incentives to be provided.
The total consideration payable by the company to GRG for the provision of the remuneration recommendations in the 2019 financial year was
$17,500 (2018: $18,500).
End of Audited Remuneration Report
24
BSA LIMITED ANNUAL REPORT 2019 DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The number of meetings of BSA’s Board of Directors and each Board committee held during the year ended 30 June 2019, and the number of
meetings attended by each Director were:
Board Meetings
Audit Committee Meetings
Remuneration Committee Meetings
Meetings
Attended
Meetings Held
during tenure
in FY2019
Meetings
Attended
Meetings Held
Meetings Held
during tenure
Meetings
during tenure in
in FY2019
Attended
FY2019
Michael Givoni
Nicholas Yates
Graeme Barclay
Max Cowley
Paul Teisseire
Mark Lowe
David Prescott
16
16
14
9
15
14
1
16
16
16
9
16
16
1
2
-
2
1
2
1
-
2
-
2
2
2
2
-
4
-
3
3
4
4
-
4
-
4
4
4
4
-
RETIREMENT, ELECTION AND CONTINUATION
IN OFFICE OF DIRECTORS
RIGHTS
As at the date of this report, the unissued ordinary shares of the
Directors are subject to retirement by rotation and election by
Company, under right, are as follows:
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.
Michael Givoni and Paul Teisseire are the Directors who have been
longest in office and who, being eligible, offer themselves for re-election
at the 2019 Annual General Meeting.
INDEMNIFYING OFFICERS OR AUDITORS
During the year, the Company paid a premium for a contract insuring
Grant Date
Date of Expiry
Exercise Price
Number
under Right
Fair value at
grant date
25 Nov 2014
25 Nov 2019
28 Nov 2017
4 Dec 2022
1 Oct 2018
1 Oct 2023
1 Feb 2019
1 Feb 2024
1 Mar 2019
1 Mar 2024
$0.00
$0.00
$0.00
$0.00
$0.00
1,116,667
142,857
553,301
380,000
175,440
2,368,265
$0.165
$0.350
$0.271
$0.283
$0.285
all Directors, secretaries, Executive officers and officers of the
During the year ended 30 June 2019, 375,391 rights granted under the
Company, and of each related body corporate of the Company. The
BSA Limited Employee Performance Rights Plan were exercised. Since
insurance does not provide cover for the independent auditors of the
that date, 257,838 rights have been converted to Restricted Ordinary
Company, or of a related body corporate of the Company.
Shares. No amounts are unpaid on any of the shares.
In accordance with usual commercial practice, the insurance contract
No person entitled to exercise the right had, or has, any right by virtue of
prohibits disclosure of details of the nature of the liabilities covered by
the right to participate in any share issue of any other body corporate.
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.
OPTIONS
As at the date of this report, there were no unissued ordinary shares of
the Company under option.
During the year ended 30 June 2019, 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.
25
BSA LIMITED ANNUAL REPORT 2019 DIRECTORS’ REPORT
PROCEEDINGS ON BEHALF OF THE COMPANY
AUDITOR’S 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
FY2019
FY2018
$
$
Company for all, or part, of those proceedings.
Amounts due for the financial year to Deloitte Touche Tohmatsu for:
No proceedings have been brought or intervened on behalf of the
Auditing or reviewing the financial report
386,060
353,390
Company with leave of the court under section 237 of the Corporations
Taxation services
Act 2001 (Cth).
Other non-audit services
469,883
299,708
55,000
17,250
910,943
670,348
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
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June
2019 as required under section 307c of the Corporations Act 2001 (Cth)
has been received and can be found on page 27 of this report.
below.
ROUNDING OF AMOUNTS
The Board of Directors has considered the position and in accordance
The Company is a company of the kind referred to in ASIC Corporations
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:
(Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated
24 March 2016, and in accordance with that Corporations Instrument
amounts in the Directors’ Report and the financial statements are
rounded off to the nearest thousand dollars, unless otherwise indicated.
•
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.
Signed in accordance with a resolution of the Board of Directors.
Michael Givoni
Chairman
20 August 2019
26
BSA LIMITED ANNUAL REPORT 2019 AUDITOR’S INDEPENDENCE DECLARATION
27
BSA LIMITED ANNUAL REPORT 2019 FINANCIAL REPORT
BSA LIMITED
ABN 50 088 412 748
29 —
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
30 —
Consolidated Statement of Financial Position
31 —
Consolidated Statement of Changes in Equity
32 —
Consolidated Statement of Cash Flows
33 —
Notes to the Consolidated Financial Statements
89 —
Directors’ Declaration
90 —
Independent Auditor’s Report
96 —
Shareholder Information
28
BSA LIMITEDANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Investment revenue
Other gains and losses
Changes in inventories of finished goods and work in progress
Subcontractor and raw materials used
Employee benefits expense
Depreciation expenses
Amortisation expenses
Occupancy expenses
Finance costs
Other expenses
Note
5
6.1
6.1
6.3
6.2
6.2
2019
$’000
469,484
11
284
(230)
(357,170)
(54,424)
(5,515)
(674)
(4,520)
(819)
(31,630)
2018
$’000
427,873
24
219
(633)
(315,208)
(59,320)
(4,619)
(674)
(5,557)
(604)
(28,209)
Profit from continuing operations, before tax
14,797
13,292
Income tax expense
7.1
(4,033)
(4,465)
Profit for the year from continuing operations, after tax
10,764
8,827
Discontinued Operations
Loss from discontinued operations, after tax
18.2
(10,592)
(7,263)
Profit for the year
172
1,564
Other comprehensive income for the year, net of tax
Items that may be reclassified subsequently to profit or loss:
Net gain 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
-
172
-
1,564
2.523 cents
2.511 cents
2.087 cents
2.079 cents
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
29
BSA LIMITED ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Assets held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Investments in Joint Ventures
Property, plant & equipment
Deferred tax assets
Goodwill
Other intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Contract liabilities
Borrowings
Current tax liabilities
Provisions
Liabilities associated with assets held for sale
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Provisions
Investments in joint ventures
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Profit reserve
TOTAL EQUITY
Note
2019
$’000
2018
$’000
11
12
13
14
18.2
12
19
15
7.2
16
17
21
13
22
23
18.2
22
23
19
24
25(a)
25(b)
25(c)
21,941
58,963
12,835
1,311
17,414
112,464
432
-
16,337
8,982
11,185
1,066
38,002
150,466
62,873
14,092
2,853
2,806
11,730
12,695
107,049
2,820
4,596
67
7,483
114,532
35,934
98,894
1,868
(74,032)
9,204
35,934
12,670
106,224
-
1,541
-
120,435
946
170
14,736
5,215
15,185
1,740
37,992
158,427
92,066
-
2,083
-
12,058
-
106,207
3,621
3,481
81
7,183
113,390
45,037
97,562
1,568
(65,243)
11,150
45,037
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
30
BSA LIMITEDANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Accumulated
Share-based
Issued
Losses
Note
Capital
(Refer Note 2)
$’000
$’000
Profit
Reserve
$’000
Payment
Reserve
$’000
Total
$’000
Consolidated
Balance at 1 July 2017
Profit for the year
Total comprehensive income for the year
Share-based payment expense
Shares issued in satisfaction of performance
conditions
Dividends paid
Balance at 30 June 2018
Opening balance adjustment on initial
application of AASB 15
Opening balance adjustment on initial
application of AASB 9
Balance at 1 July 2018
Profit for the year
Total comprehensive profit for the year
Share-based payment expense
Shares issued during period
Dividends paid
Balance at 30 June 2019
25(d)
2.1
2.1
25(d)
25(d)
97,564
(65,243)
-
-
-
(2)
-
97,562
-
-
-
-
-
-
-
(65,243)
(8,269)
(520)
97,562
(74,032)
-
-
-
1,332
-
-
-
-
-
-
98,894
(74,032)
11,700
1,564
1,564
-
-
(2,114)
11,150
-
-
11,150
172
172
-
(1,245)
(873)
9,204
1,423
45,444
-
-
145
-
-
1,568
-
-
1,564
1,564
145
(2)
(2,114)
45,037
(8,269)
(520)
1,568
36,248
-
-
299
1
-
1,868
172
172
299
88
(873)
35,934
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
31
BSA LIMITED ANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Cash Flows From Operating Activities:
Cash receipts from customers
Payments to suppliers and employees
Interest received
Dividend received
Interest and other costs of finance paid
Net cash generated by/(used in) operating activities
Cash Flows From Investing Activities:
Proceeds from disposal of property, plant and equipment
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 increase/(decrease) in cash
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Note
28(a)
15
25(d)
11
2019
$'0001
641,665
(622,511)
11
-
(819)
18,346
781
(7,035)
(6,254)
1
2,485
(1,569)
-
(2,865)
-
(873)
(2,821)
9,271
12,670
21,941
Consolidated
2018
$’0001
619,043
(613,759)
24
200
(845)
4,663
420
(6,135)
(5,715)
-
4,626
(4,532)
724
(1,412)
(2)
(2,114)
(2,710)
(3,762)
16,432
12,670
1 The above Consolidated Statement of Cash Flows includes both continuing and discontinued operations. Amounts related to discontinued operations are
disclosed in Note 18.2.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
32
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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 Corporate Directory at the end of the Annual Report. The principal activities of the Company and its subsidiaries (the Group) are described in note 27.
NOTE 2 APPLICATION OF NEW AND REVISED STANDARDS
2.1 New and amended accounting standards adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are
relevant to their operations and effective for an accounting period that begins on or after 1 January 2018.
AASB 9 Financial Instruments and related amending Standards
In the current year, the Group has applied AASB 9 Financial Instruments which has come into effect 1 July 2018. AASB 9 simplifies the model for classifying
and recognising financial instruments and introduces a new impairment model. The new impairment model is a move away from the previous incurred
credit loss approach to the expected credit loss approach. Upon adoption of AASB 9, there were changes to the financial instrumentation and measurement
practices. The effect of which, are presented throughout this report. The impact on initial application of AASB 9 is set out further below.
AASB 15 Revenue from Contracts with Customers and related amending Standards
In the current year, the Group has applied AASB 15 Revenue from Contracts with Customers (as amended in April 2016) which has come into effect 1 July
2018. Details of the new requirements of AASB 15 as well as the impact on the Group’s consolidated financial statements are described below.
Impact on application of AASB 9 and AASB 15
The Group has applied AASB 15, using the modified approach, with the cumulative effect of initially applying the standard adjusted in the opening balance
of equity and comparative figures are therefore not restated. The opening equity adjustment due to the application of the new standard is analysed by
financial statement line item below.
Current trade and other receivables
Investments accounted using the equity method
Deferred tax asset
Total assets impact
Net assets impact
Accumulated losses
Total equity impact
As reported
AASB 9 Transition
AASB 15 Transition
Opening Balance
30 June 2018
Adjustments
Adjustments
$'000
$'000
106,224
5,215
(65,243)
(65,243)
(743)
223
(520)
(520)
(520)
(520)
$'000
(11,814)
3,545
(8,269)
(8,269)
(8,269)
(8,269)
1 July 2018
$'000
93,667
-
8,983
(74,032)
(74,032)
Impact on the consolidated statement of profit and loss
Had AASB 15 Revenue from Contracts with Customers not been applied and the financial statements were still produced under previous guidance, including
AASB 118 Revenue, AASB 111 Construction Contracts and related interpretations, the financial report for the year ended 30 June 2019 would have been
impacted as follows:
•
the consolidated statement of financial position as at 30 June 2019 would be impacted by adding back $8.9 million of transition adjustments to both
net assets and equity; and
•
the impact on all line items reported in the consolidated statement of profit or loss for the year to 30 June 2019 is shown above.
Accordingly there would be no additional material impact on the consolidated statement of financial position as at 30 June 2019 after adding back the
transition adjustments noted above.
33
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2 APPLICATION OF NEW AND REVISED STANDARDS (CONTINUED)
2.2 New accounting standards and interpretations not yet adopted
The following standards, amendments to standards and interpretations have been identified as those which may impact the Group in the period of initial
application. The Group is required to disclose known or reasonably estimable information relevant to assessing the possible impact that the application of
the new accounting standards will have on the Group’s consolidated financial statements.
a)
AASB 16 Leases
AASB 16 Leases specifies how to recognise, measure and disclose leases. The standard provides a single lessee accounting model, requiring lessees to
recognise right-of-use assets and lease liabilities for almost all leases. Lessor accounting remains similar to the current standard – i.e. lessors continue to
classify leases as finance or operating leases. AASB 16 applies to annual reporting periods beginning on or after 1 January 2019 and replaces AASB 117
Leases and the related interpretations.
BSA has assessed the impact that AASB 16 would have had on its consolidated financial statements on 30 June 2019 (including discontinued operations).
New lease liabilities
New right of use assets
Financial effect
30 June 2019
$'000
$4,650 to $4,850
$4,700 to $4,900
The net effect of the new lease liabilities and right of use assets, adjusted for deferred tax and the reversal of the existing straight line lease and incentive
liability will be recognised against retained earnings. The impact predominantly relates to BSA’s property leases for commercial premises, service facilities,
and support offices. The actual impact of applying AASB 16 on the consolidated financial statements in the period of initial application will depend on future
economic conditions, including BSA’s borrowing rate at 1 July 2019, the composition of BSA’s lease portfolio, the extent to which BSA elects to use practical
expedients and recognition exemptions, and the new accounting policies, which are subject to change until BSA presents its first consolidated financial
statements that include the date of initial application.
b)
Other new accounting standards
The following new or amended standards are not expected to have a significant impact on the Group’s consolidated financial statements:
-
-
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions; and
AASB 2017-5 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial
Corrections
34
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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, 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 purpose 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 consolidated financial statements were authorised for issue by the Directors on 20 August 2019.
3.2 Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for certain financial instruments that are measured at revalued
amounts or fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair values of the consideration given in exchange for goods and services. All amounts are presented in Australian
dollars, unless otherwise noted.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an
asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account
when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is
determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope of
AASB 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
3.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries.
Control is achieved when the Company:
• has power over the investee;
•
is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give
it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing
whether or not the Company’s voting rights in an investee are sufficient to give it power, including:
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
•
rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the
time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
35
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and
other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. 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.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s
accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in
full on consolidation.
The parent entity carries its investment in subsidiaries at cost less impairment (if any).
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.
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 12 Income Taxes and AASB 19 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 (see note 3.12); 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 AASB.
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 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.
36
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 Profit or Loss and Other 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.
The Group’s policy for goodwill arising on the acquisition of an associate and a joint venture is described at note 3.6 below.
3.6 Interests in Associates and Joint Ventures
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require
unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity method of
accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with AASB 5. Under
the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted
thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group's share of
losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long-term interests that, in substance,
form part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate
or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group's share of
the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment,
is recognised immediately in profit or loss in the period in which the investment is acquired.
When it is necessary to recognise an impairment loss with respect to the Group’s investment in an associate or a joint venture, the entire carrying amount
of the investment (including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing its
recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognised forms part of
the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable
amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture, or when the
investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial
asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance.
The difference between the carrying amount of the associate or joint venture at the date the equity method was discontinued, and the fair value of any
retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the determination of the gain or loss on
disposal of the associate or joint venture.
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BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate or joint venture on the
same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously
recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or
liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.
The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint
venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to
profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership
interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint
venture are recognised in the Group's consolidated financial statements only to the extent of interests in the associate or joint venture that are not related
to the Group.
3.7 Revenue recognition
Revenue is recognised when control is transferred at an amount that is highly probable that a significant reversal of revenue will not occur.
3.7.1 Construction revenue
The Group 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. Contracts entered into may be for the construction of one or several separate inter-linked pieces of
large infrastructure. The construction of each individual piece of infrastructure is generally taken to be one performance obligation. Where contracts are
entered for the building of several projects the total transaction price is allocated across each project based on stand-alone selling prices. The transaction
price is normally fixed at the start of the project. It is normal practice for contracts to include bonus and penalty elements based on timely construction or
other performance criteria known as variable consideration, discussed below.
The performance obligation is fulfilled over time and as such revenue is recognised over time. As work is performed on the assets being constructed they
are controlled by the customer and have no alternative use to the Group, with the Group having a right to payment for performance to date.
Generally, contracts identify various inter-linked activities required in the construction process. Revenue is recognised on an input basis.
Revenue earned is typically invoiced monthly or in some cases on achievement of milestones or to match major capital outlay. Invoices are paid on normal
commercial terms, which may include the customer withholding a retention amount until finalisation of the construction. Certain construction projects
entered into receive payment prior to work being performed in which case revenue is deferred on the consolidated statement of financial position.
3.7.2 Services revenue
The Group performs installation and maintenance services for a variety of different industries. Contracts entered into can cover installation and servicing
of related assets which may involve various different processes. The total transaction price is allocated across each service or performance obligation and,
where linked, the construction of the relevant asset. The transaction price is allocated to each performance obligation based on contracted prices. The total
transaction price may include variable consideration.
3.7.3 Installation and servicing fees
Performance obligations are fulfilled at a point in time as the benefits provided to our customers under this category of work type do not transfer to the
customer until the completion of the service and as such revenue is recognised upon completion.
Customers are in general invoiced on a monthly basis for an amount that is calculated on either a schedule of rates or a cost plus basis that are aligned with
the stand alone selling prices for each performance obligation. Payment is received following invoice on normal commercial terms.
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BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.7.4 Variable consideration
It is common for contracts to include performance bonuses or penalties assessed against the timeliness or cost effectiveness of work completed or other
performance related KPIs. Where consideration in respect of a contract is variable, the expected value of revenue is recognised when the uncertainty
associated with the variable consideration is highly probable of being resolved (known as constraint requirements). The Group assesses the constraint
requirements on a periodic basis when estimating the variable consideration to be included in the transaction price. The estimate is based on all available
information including historic performance. Where modifications in design or contract requirements are entered into, the transaction price is updated
to reflect these. Where the price of the modification has not been confirmed, an estimate is made of the amount of revenue to recognise whilst also
considering the constraint requirement.
3.7.5 Contract fulfilment costs
Costs incurred prior to the commencement of a contract may arise due to mobilisation/site setup costs, feasibility studies, environmental impact studies
and preliminary design activities as these are costs incurred to fulfil a contract. Where these costs are expected to be recovered, they are capitalised
and amortised over the course of the contract consistent with the transfer of service to the customer. Where the costs, or a portion of these costs, are
reimbursed by the customer, the amount received is recognised as deferred revenue and allocated to the performance obligations within the contract and
recognised as revenue over the course of the contract.
3.7.6 Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer is significant
and therefore there aren't expected to be financing components within the contracts. As a consequence, the Group does not adjust any of the transaction
prices for the time value of money.
3.7.7 Loss making contracts
A provision is made for the difference between the expected cost of fulfilling a contract and the expected unearned portion of the transaction price where
the forecast costs are greater than the forecast revenue.
3.7.8 Interest revenue is recognised on an accruals basis.
3.7.9 Dividend income is recognised when the dividend is declared.
3.8 Contract assets and liabilities
When the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the
contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the
estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive
payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is
probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
When contract costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts due from
customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognised profits less recognised losses,
the surplus is shown as the amounts due to customers for contract work. Amounts received before the related work is performed are included in the
consolidated statement of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are
included in the consolidated statement of financial position under trade and other receivables.
3.9 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.
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BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.9.1 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 3.10 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.
3.10 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.
3.11 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.
3.12 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 29.
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 with a corresponding increase in equity. 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.
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.
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BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.13 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
3.13.1 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.
3.13.2 Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated 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 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. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
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.
3.13.3 Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity,
in which case the current and deferred tax are also recognized in other comprehensive income or directly in equity. Where current tax or deferred tax arises from
the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
3.13.4 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 18. 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 un-used 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.
41
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.14 Property, plant and equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the consolidated statement of
financial position at cost.
Depreciation on buildings is recognised in profit or loss.
Freehold land is not depreciated.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost (other than freehold land) 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 the end of each reporting period, 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. However, when there is no reasonable
certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use
of the asset. Any 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.
3.15 Intangible assets
3.15.1 Intangible assets acquired separately
Intangible assets with finite lives that are 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 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.
3.15.2 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.
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BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.16 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. An
impairment loss recognised for goodwill is not reversed in subsequent periods.
3.17 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.
3.18 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.
3.18.1 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.
3.18.2 Make Good
Provisions for the estimated cost of work to comply with make good provisions in certain Group property leases are recognised at the Directors’ best estimate of
the expenditure to settle the Group’s obligation.
3.19 Financial Assets
Financial assets are classified as either those measured at fair value, with adjustments to fair value through the change in Other Comprehensive Income
(FVTOCI) or through Profit or Loss (FVTPL); and those measured at amortised cost.
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BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.19.1 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.
3.19.2 Trade and other receivables
Trade and other receivables are carried at original invoice amount, less expected credit losses provided for. Collectability of trade and other receivables is reviewed
on an ongoing basis. Individual debts that are determined to be uncollectable are written off when identified.
3.19.3 Impairment of financial assets
Trade and other receivables are subject to AASB 9’s Expected Credit Losses model for recognising and measuring impairment of financial assets.
The simplified approach has been applied for all trade and other receivables that do not have a significant financing component. For these receivables, the
age of outstanding balances have been analysed and historical default percentages adjusted for other current observable data has been applied as a means
to estimate lifetime Expected Credit Losses using a provision matrix approach.
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.
3.20 Financial liabilities and equity instruments issued by the Group
3.20.1 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.
3.20.2 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.
3.20.3 Financial Liabilities
Financial liabilities are classified as ‘other financial liabilities’.
3.20.4 Other Financial Liabilities
Other financial liabilities, including borrowings and trade and other payables, 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 on initial recognition.
44
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.21 Derivative financial instruments
From time to time the Group enters into a variety of derivative financial instruments to manage its exposure to interest rate risk, including interest rate
swaps. Further details of derivative financial instruments are disclosed in note 32.
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 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 Consolidated Statement of Profit or Loss and Other 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. 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
ii. 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 presented in the consolidated statement of cash flow 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.
45
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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 judgments, 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 3.8. 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. In addition, where appropriate,
Management and the Directors assess the probability of recovery of variations within the contract estimates. Variations in contract work and claims are
included to the extent that the amount can be measured reliably and its receipt is considered probable. Claims and variations can be both approved and not
approved by the customer. Where the claim and/or variation are not approved by the customer, estimates are made in relation to the claim and/or variation
position and management assesses the recovery at each reporting period.
4.1.2 Recoverability 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. Where the actual future cash flows are less than expected, a material impairment loss may arise.
The carrying amount of goodwill at 30 June 2019 was $11,185,000 (30 June 2018: $15,185,000).
See note 16 for details.
4.1.3 Payroll Tax Liability
Following the settlement of the NSW Office of State Revenue (OSR), BSA has entered into a repayment plan with the NSW OSR. The provision for this matter
at the end of FY2019 stands at $1,843,000 (FY2018:3,421,000).
See note 23 for details.
NOTE 5 REVENUE
The following is an analysis of the Group's revenue from continuing operations
BSA | Connect
BSA | Build
BSA | Maintain
2019
$’000
251,551
114,621
103,312
469,484
Consolidated
2018
$’000
249,356
85,067
93,450
427,873
46
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 6 PROFIT/(LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS
Profit/(Loss) for the year from continuing operations has been arrived at after charging/(crediting):
6.1
Cost of sales
6.2
Depreciation and amortisation expense
Depreciation of property, plant and equipment
Amortisation of intangible assets
Total depreciation and amortisation expense
6.3
Employee benefits expense
Post employment benefits
Superannuation
Share-based payments (see note 25)
Equity-settled share-based payments
Termination benefits
Other employee benefits
Total employee benefits expense
6.4
Significant items
Business reorganisation and restructure costs
nRAH completion and commissioning costs and settlement impact
Legal and professional fees relating to legacy issues
Total significant items
Significant items for FY2019 include $7,781,000 associated with discontinued operations (FY18: $3,571,000).
Consolidated
Year Ended
2019
2018
$’000
$’000
357,400
315,841
5,515
674
4,619
674
6,189
5,293
8,721
7,576
299
145
1,408
1,973
43,996
49,626
54,424
59,320
9,128
61
1,410
3,970
784
1,010
10,599
5,764
47
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7 INCOME TAXES
7.1
Income tax recognised in profit or loss
Income tax expense
Current tax expense
Deferred tax relating to the origination and reversal of temporary differences
Consolidated
Year Ended
2019
$’000
2018
$’000
2,806
1
-
909
2,807
909
Income tax is attributable to:
Profit from continuing operations (as reported in the consolidated statement of
4,033
4,465
profit or loss)
Loss from discontinued operations
The expense for the year can be reconciled to the accounting profit as follows:
Profit from continuing operations, before tax
Loss from discontinued operations, before tax
Profit before income tax expense
Income tax expense calculated at 30%
Adjusted for:
Other non-deductible items
Adjustments recognised in the current year in relation to the current tax of prior years:
Other
Income tax expense
(1,226)
(3,556)
2,807
909
14,797
13,292
(11,818)
(10,819)
2,979
2,473
894
742
1,394
2,288
124
866
519
519
43
43
2,807
909
The tax rate used for the 2019 and 2018 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on taxable
profits under Australian tax law.
48
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7 INCOME TAXES (CONTINUED)
7.2
Deferred tax balances
2019
Opening balance
Recognised in
profit or loss
AASB 9 /
AASB 15 initial
Closing balance
application
$’000
$’000
$’000
$’000
Temporary differences
Finance leases
Intangible assets
Employee benefits
Provisions (adjusted for AASB 15 and AASB 9)
Expected credit losses (adjusted for AASB 9)
Tax loss carried forward
2018
Temporary differences
Finance leases
Intangible assets
Employee benefits
Provisions
Doubtful debts
Tax loss carried forward
Deferred tax balances are presented in the consolidated statement of financial position as follows:
Deferred tax assets
Deferred tax liabilities
188
(522)
3,649
1,040
771
89
5,215
(48)
202
495
(719)
158
(89)
(1)
-
-
-
3,545
223
-
3,768
140
(320)
4,144
3,866
1,152
-
8,982
Opening balance
Recognised in
profit or loss
AASB 9 /
AASB 15 initial
Closing balance
application
$’000
$’000
$’000
$’000
12
(724)
3,405
1,890
543
998
6,124
-
-
-
-
-
-
-
176
202
244
(850)
228
(909)
(909)
2019
$’000
8,982
-
8,982
188
(522)
3,649
1,040
771
89
5,215
2018
$’000
5,215
-
5,215
49
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 7 INCOME TAXES (CONTINUED)
7.3
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 18. 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 un-used 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 8 KEY MANAGEMENT PERSONNEL
The aggregate compensation made to Directors and other key management personnel of the Company and the Group is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
2019
$
1,635,286
84,472
16,438
249,200
Consolidated
2018
$
2,241,820
111,850
19,260
145,050
1,985,396
2,517,980
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 17 to 24 of this Annual Report.
NOTE 9 AUDITOR'S REMUNERATION
Remuneration of the auditor of the Group for:
- Audit and review of the Financial Report
- Taxation services
- Other non-audit services
The auditor of BSA Limited is Deloitte Touche Tohmatsu.
50
2019
$
386,060
469,883
55,000
Consolidated
2018
$
353,390
299,708
17,250
910,943
670,348
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 10 EARNINGS PER SHARE
(a)
Profit/(loss) for the period attributable to shareholders of the parent entity
used in earnings per share
Continuing operations
Discontinued operations
2019
$'000
10,764
(10,592)
172
Consolidated
2018
$'000
8,827
(7,263)
1,564
Number
Number
(b)
Weighted average number of ordinary shares outstanding during the year used
426,587,199
422,933,082
in calculating basic EPS
Weighted average number of options/rights outstanding
2,050,196
1,607,509
Weighted average number of ordinary shares outstanding during the year used in calculating diluted EPS
428,637,395
424,540,591
(c)
Basic earnings per share
Continuing operations
Discontinued operations
(d)
Diluted earnings per share
Continuing operations
Discontinued operations
Cents
Cents
2.523
(2.483)
0.040
2.511
(2.471)
0.040
2.087
(1.717)
0.370
2.079
(1.711)
0.368
(e)
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 31.
51
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11 CASH AND CASH EQUIVALENTS
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
NOTE 12 TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Expected credit losses
Amounts due from customers under construction contracts
Executive Share Plan receivables
Accrued revenue
Prepayments
NON-CURRENT
Executive Share Plan receivables
Other Receivables
2019
$’000
21,941
21,941
2019
$’000
48,323
(1,705)
46,618
-
294
10,303
1,748
12,345
58,963
432
-
432
Consolidated
2018
$’000
12,670
12,670
Consolidated
2018
$’000
62,590
(1,180)
61,410
29,577
332
13,470
1,435
44,814
106,224
582
364
946
Note
31(c)
31(c)
Trade receivables
Trade receivables disclosed above are measured at amortised cost.
The average credit period for the Group is 38 days. No interest is charged on overdue receivables. Expected credit losses are recognised against
trade receivables greater than 60 days based on estimated future irrecoverable amounts determined by reference to default experience of
the counterparty.
Before accepting a new customer, the Group assesses the potential customer's credit quality and defines credit limits by customer.
52
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 12 TRADE AND OTHER RECEIVABLES (CONTINUED)
Age analysis of trade receivables that are past due but not impaired at the reporting date
Not past due
Past due [30] days
Past due [30-60] days
Past due [60-90] days
Past due [>90] days
Total
2019
Amount
Amount Not
Impaired
Impaired
$’000
6
579
278
23
819
$’000
39,717
2,831
1,822
942
1,756
Total
$’000
44,063
9,951
1,849
1,646
5,081
1,705
46,618
62,590
Total
$’000
39,273
3,410
2,100
965
2,575
48,323
Consolidated
2018
Amount
Amount Not
Impaired
Impaired
$’000
-
208
-
-
972
1,180
$’000
44,063
9,743
1,849
1,646
4,109
61,410
As at 30 June 2019, the Group had current trade receivables of $1,705,000 (2018: $1,180,000) 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 and adjustments to incorporate the required expected credit losses model per AASB 9.
Analysis of Allowance Account
Consolidated
Opening Balance
Expected credit losses
Receivables written off during the year
Closing balance
NOTE 13 CONTRACT ASSETS AND LIABILITIES
Contract assets
Contract liabilities
For comparative amounts, refer to notes 12 and 21.
2019
$’000
1,180
559
(34)
1,705
2019
$’000
12,835
(14,092)
2018
$’000
1,138
76
(34)
1,180
2018
$’000
-
-
53
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 13 CONTRACT ASSETS AND LIABILITIES (CONTINUED)
Contract assets primarily relate to the Group’s right to consideration for construction work completed but not invoiced at the balance sheet date. The
contract assets are transferred to trade receivables when the amounts are certified by the customer. On most contracts certificates are issued by the
customer on a monthly basis.
The Group has taken advantage of the practical expedient in paragraph 94 of AASB 15 to immediately expense the incremental costs of obtaining contracts
where the amortisation period of the assets would have been one year or less.
Contract liabilities primarily relate to the advance consideration received from customers in respect of performance obligations which have not yet been
fully satisfied and for which revenue has not been recognised. All contract liabilities held at 30 June 2019 are expected to satisfy performance obligations in
the next 12 months.
Significant changes in the contract assets and the contract liabilities during the period are as follows:
2019
2018
Contract
Contract
Contract
Contract
assets
liabilities
assets
liabilities
$'000
$'000
$'000
$'000
Opening balance
Effect of change in accounting policies
Reclassifications
As restated
Revenue recognised:
performance obligations satisfied in the current year
adjustments to performance obligations satisfied in previous years
Cash received for performance obligations not yet satisfied
-
(11,814)
56,252
44,438
213,143
-
-
Amounts transferred to trade receivables
(244,746)
-
-
(24,110)
(24,110)
9,204
814
-
-
Closing balance
12,835
(14,092)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The following table includes revenue expected to be recognised in the future related to performance obligations that are unsatisfied or partially
unsatisfied at the balance sheet date:
Work in hand - continuing operations
Work in hand includes estimates of future revenue streams for existing contracts. Final volumes may be higher or lower than present estimates.
NOTE 14 INVENTORIES
Future years
$'000
322,686
CURRENT
Inventories of finished goods and work in progress at net realisable value
Consolidated
2018
$’000
1,541
1,541
2019
$’000
1,311
1,311
The cost of inventories recognised as an expense includes $642,000 (2018:$589,000) in respect of write-down of inventory to net realisable value.
54
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 15 PROPERTY, PLANT AND EQUIPMENT
Plant &
Equipment
Under Finance
Leasehold
Plant &
Lease & Hire
Make
Consolidated
Assets
Under
Land
Buildings
Improvements
Equipment
Purchase
Good
Construction
Total
$’000
$’000
$’000
$’000
$’000
$'000
$'000
$’000
Cost
Balance as at 30 June 2017
253
410
3,291
Additions
Disposals
Transfers *
-
-
-
-
-
-
Balance as at 30 June 2018
253
410
Additions
Disposals
Reclassed as Held for Sale
Transfers *
-
-
-
-
-
-
-
-
Balance as at 30 June 2019
253
410
109
-
2,508
5,908
153
(355)
(117)
-
5,589
32,981
3,504
(796)
-
11,542
4,095
(1,204)
1,250
408
(393)
673
50,400
2,522
10,638
-
(2,393)
-
-
(2,508)
-
35,689
14,433
1,265
687
58,645
4,094
(1,495)
(2,846)
391
35,833
526
(1,843)
(1,048)
-
169
(180)
-
-
2,330
7,272
-
-
(3,873)
(4,011)
(391)
-
12,068
1,254
2,626
58,033
Accumulated depreciation and impairment
Balance as at 30 June 2017
Additions
Disposals
Transfers *
Balance as at 30 June 2018
Additions
Disposals
Reclassed as Held for Sale
Transfers *
Balance as at 30 June 2019
-
-
-
-
-
-
-
-
-
-
88
17
-
-
3,209
28,089
527
-
-
2,782
(693)
-
9,063
1,530
(1,156)
-
105
3,736
30,178
9,437
16
-
-
-
121
672
(351)
(117)
-
2,498
(1,495)
(2,741)
-
1,857
(1,804)
(1,040)
-
3,940
28,440
8,450
745
429
417
(393)
-
453
472
(180)
-
-
-
-
-
-
-
-
-
-
-
-
40,878
5,273
(2,242)
-
43,909
5,515
(3,830)
(3,898)
-
41,696
Net Book Value as at 30 June 2019
Net Book Value as at 30 June 2018
253
253
289
305
1,649
2,172
7,393
5,511
3,618
4,996
509
812
2,626
16,337
687
14,736
* Transfers between categories
15.1
The following useful lives are used in the calculation of depreciation:
Buildings
Leasehold improvements
Plant and equipment
Plant and equipment under finance lease
Make good
25 years
4 - 5 years
3 - 10 years
3 - 5 years
Lease term
15.2
Assets held as security
Fixed and floating charges over the whole of the parent entity and its subsidiaries' assets have been pledged as security for bank loans (see note 22).
55
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16 NON-CURRENT ASSETS - GOODWILL
$'000
Cost
Closing carrying value
2019
2018
BSA | Connect
BSA | Build
BSA | Maintain
Consolidated
-
-
11,185
15,185
-
-
11,185
15,185
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 three year period with the period extending beyond three years extrapolated using an estimated
growth rate of 3.0% for BSA | Build | Fire. The cash flows are discounted using the weighted average cost of capital with mid-year discounting.
At 30 June 2019 the company has assessed both internal and external indicators of impairment, including completing the value-in-use models, and
did not identify any indicators of impairment.
Due to the decision to divest BSA | Build | HVAC, $4,000,000 of goodwill has been reclassified to Assets held for sale in FY2019.
The key assumptions used in the value-in-use calculations as at 30 June 2019 and 30 June 2018 were as follows:
- growth rate used to extrapolate cash flows beyond the forecast period: 3.0% for BSA | Build | Fire (2018: 3.0%);
- post-tax discount rate: 12.5% (2018: 12.5%); and
- divisional Revenue, EBIT, working capital adjustments and maintenance capital expenditure..
Impact of possible changes to the key assumptions
The key assumptions in the impairment model are the discount rate, terminal growth rate percentage and EBITDA margin percentage. Below is set
out the assumptions used in the impairment model.
Key Assumptions
Discount rate %
Terminal growth %
EBITDA Margin %
FY 2019
12.5%
3.0%
6.1%
56
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17 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 Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Cost
Balance as at 30 June 2017
Acquisitions through business combinations
Balance at 30 June 2018
Acquisitions through business combinations
Balance at 30 June 2019
Accumulated amortisation and impairment
Balance as at 30 June 2017
Amortisation expense
Balance at 30 June 2018
Amortisation expense
Balance at 30 June 2019
Order Backlog
$’000
10,079
-
10,079
-
10,079
(7,665)
(674)
(8,339)
(674)
(9,013)
Total
$’000
10,079
-
10,079
-
10,079
(7,665)
(674)
(8,339)
(674)
(9,013)
Net Book Value as at 30 June 2019
1,066
1,066
Net Book Value as at 30 June 2018
1,740
1,740
57
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18 OTHER FINANCIAL ASSETS
(a)
Shares in subsidiaries
Details of Group Companies
Parent Entity:
BSA Limited
Ultimate Parent Entity:
BSA Limited
Name of Subsidiary
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
ACN 085 921 615 Pty Ltd
Satellite Receiving Systems (QLD) Pty Limited
BSA Equity Plans Pty Limited
(Formerly ACN 066 496 893 Pty Ltd)
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
BurkeAir Pty Limited
(b)
Deed of Cross Guarantee:
Principal
Activity
Place of incorporation
2019
2018
Percentage owned (%)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
-
-
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%
BSA | Build
BSA | Build
BSA | Build
BSA | Build
BSA | Maintain
BSA | Maintain
BSA | Connect
BSA | Connect
BSA | Connect
BSA | Maintain
BSA | Connect
BSA | Connect
BSA | Build
BSA | Build
BSA | Build
BSA | Build
BSA | Build
BSA | Connect
BSA | Maintain
All Controlled Entities are parties to the Deed of Cross Guarantee, where relief is obtained from preparing individual financial reports under ASIC
Corporations (wholly owned companies) instrument 2016/785, 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
All the controlled entities are members of the Tax Consolidated Group under Australian Tax Law.
BSA Limited is the head entity within the Tax Consolidated Group.
58
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18 OTHER FINANCIAL ASSETS (CONTINUED)
18.1
Composition of the Group
Information about the composition of the Group at the end of the reporting period is as follows:
Principal Activity
BSA | Connect
BSA | Build
BSA | Maintain
18.2 Discontinued operations
BSA | Build | HVAC
Place of incorporation
Number of wholly-owned
subsidiaries
and operation
2019
2018
Australia
Australia
Australia
6
9
4
19
6
9
4
19
The Group has decided to exit the BSA | Build | HVAC business. Consequently, the BSA | Build | HVAC business is classified as a discontinued
operation. During the financial year, the following events have occurred:
- non-binding discussions with parties identified as having a potential interest in acquiring the BSA | Build | HVAC business were held;
- preparations for the formation of the disposal assets have occurred with detailed plans and indicative timetables established;
- advisory partners to the sale were engaged to help facilitate the disposal of the BSA | Build | HVAC business during the 2020 financial year; and
- an assessment of the fair value (less costs to sell) of the BSA | Build | HVAC operations was undertaken by the Directors.
Analysis of loss for the period from discontinued operations
BSA | Build | HVAC
Revenue
Expenses
Loss before interest and tax
Net financing cost
Loss before tax
Income tax benefit
Loss for the period from discontinued operation
Cash flows from / (used in) discontinued operations
BSA | Build | HVAC
Net cash inflow/(outflow) from operating activities
Net cash inflow/(outflow) from investing activities
Net cash inflow/(outflow) from financing activities
2019
$’000
100,817
(112,602)
(11,785)
(33)
(11,818)
1,226
(10,592)
2019
$’000
(7,129)
(133)
(33)
(7,295)
2018
$’000
134,499
(145,277)
(10,778)
(41)
(10,819)
3,556
(7,263)
2018
$’000
(10,994)
(564)
(41)
(11,598)
59
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 18 OTHER FINANCIAL ASSETS (CONTINUED)
Assets held for sale
BSA | Build | HVAC
At 30 June 2019, the assets and liabilities relating to the BSA | Build | HVAC business have been classified as held for sale.
Property Plant and Equipment
Other assets
Total assets classified as held for sale
Total liabilities directly associated with assets held for sale
NOTE 19 DETAILS OF JOINT VENTURES
2019
$’000
113
17,301
17,414
12,695
2018
$’000
-
-
-
-
Details of the Group’s joint ventures and joint operations at the end of the reporting period is as follows:
Name of Joint Venture/Operation
Principal Activity
Place of incorporation and
principal place of business
Triple M and Premier Fire JV Co Limited Installation of fire services
BSAF Joint Operation
Installation of fire services
Australia
Australia
Proportion of ownership
interest and voting power
held by the group
2019
50%
50%
2018
50%
50%
The Triple M and Premier Fire JV Co Limited incorporated joint venture was accounted for using the equity method in these consolidated financial
statements. The BSAF Joint Operation was accounted for using the proportional consolidation method in these consolidated financial statements.
Summarised financial information in respect of the Group's material joint ventures are set out below. The summarised financial information below
represents amounts shown in the joint ventures financial statements prepared in accordance with AASBs (adjusted by the Group for equity
accounting purposes).
Triple M and Premier Fire JV Co Limited
Current Assets
Current Liabilities
Non-current liabilities
The above amounts of assets and liabilities include the following:
Cash and cash equivalents
Current financial liabilities (excluding trade and other payables and provisions)
Non-current financial liabilities (excluding trade and other payables and provisions)
60
2019
$’000
603
(738)
-
439
-
-
2018
$’000
681
(843)
-
225
-
-
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19 DETAILS OF JOINT VENTURES (CONTINUED)
Triple M and Premier Fire JV Co Limited
Revenue
Profit or loss from continuing operations
Profit/(loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
Dividends received from the joint venture during the year
The above profit/(loss) for the year include the following:
Depreciation and amortisation
Interest income
Income tax expense (income)
2019
$’000
321
-
-
-
-
(200)
-
-
51
Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint venture recognised in the
consolidated financial statements:
Triple M and Premier Fire JV Co Limited
Net assets of the joint venture
Proportion of the Group's ownership interest in the joint venture
Goodwill
Other adjustments
Carrying amount of the Group's interest in the joint venture
BSAF Joint Operation
Current Assets
Non-current assets
Current Liabilities
Non-current liabilities
The above amounts of assets and liabilities include the following:
Cash and cash equivalents
Current financial liabilities (excluding trade and other payables and provisions)
Non-current financial liabilities (excluding trade and other payables and provisions)
2019
$’000
(135)
50%
-
-
(67)
2019
$’000
16,509
-
(14,512)
-
8,141
-
-
2018
$’000
4,161
-
-
-
-
(200)
-
-
86
2018
$’000
(162)
50%
-
-
(81)
2018
$’000
1,974
-
(1,634)
-
2
-
-
61
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19 DETAILS OF JOINT VENTURES (CONTINUED)
BSAF Joint Operation
Revenue
Profit or loss from continuing operations
Profit/(loss) for the year
Other comprehensive income for the year
Total comprehensive income for the year
Dividends received from the joint venture during the year
The above profit for the year include the following:
Depreciation and amortisation
Interest income
Interest expenses
Income tax expense (income)
2019
$’000
29,377
3,856
3,856
-
3,856
(1,000)
-
-
-
-
Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint operation recognised in the
consolidated financial statements:
BSAF Joint Operation
Net assets of the joint operation
Proportion of the Group's ownership interest in the joint operation
Carrying amount of the Group's interest in the joint operation1
1 Included in Assets held for sale in FY2019
2019
$’000
1,997
50%
999
2018
$’000
1,795
142
142
-
142
-
-
-
-
-
2018
$’000
340
50%
170
62
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 20 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
Accumulated losses
Profit Reserve
Reserves
Share-based payments reserve
Total equity
(b)
Financial Performance
(Loss) / Profit for the year
Other comprehensive (Loss) / income for the year, net of tax
Items that may be reclassified subsequently to profit or loss:
Gain recognised on cash flow hedges
Total comprehensive (Loss) / income for the year, net of tax
2019
$’000
58,487
35,618
94,105
51,572
6,599
58,171
35,934
98,894
(77,546)
12,718
1,868
35,934
(10,539)
-
(10,539)
2018
$’000
39,486
43,625
83,111
31,781
4,375
36,156
46,955
97,562
(77,546)
25,371
1,568
46,955
4,348
-
4,348
(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.
57,164
57,164
(d)
Contingent Liabilities
Under the above cross guarantee, BSA Limited, as the parent entity, guarantees all contingent liabilities of the wholly owned subsidiaries.
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 $5,047,000 (2018:
$9,333,000) directly relating to the parent. Guarantees secured by cross guarantee by all group members amounted to $38,409,000
(2018:$41,242,000).
63
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 21 TRADE AND OTHER PAYABLES
Trade payables
Other payables
Amounts due to customers under construction contracts
Total Payables
NOTE 22 BORROWINGS
CURRENT
Secured liabilities at amortised cost:
Hire purchase liabilities
Lease liabilities
Bank loans
Other
Total current borrowings
NON-CURRENT
Secured liabilities at amortised cost:
Hire purchase liabilities
Lease liabilities
Total non-current borrowings
2019
$’000
32,808
30,065
-
62,873
2018
$’000
37,573
30,383
24,110
92,066
Note
2019
$’000
Consolidated
2018
$’000
(a), 26(iii)
(a), 26(ii)
(a), 26(iii)
(a), 26(ii)
480
607
-
1,766
2,853
936
1,884
2,820
714
626
-
743
2,083
1,158
2,463
3,621
The Group has Banking Facilities amounting to $54,500,000 which have an expiry date of 31 December 2020 and Banking Facilities amounting to
$12,500,000 which have an expiry date of 31 July 2020.
The covenants within the bank borrowings have the following ratios as at 30 June 2019:
Quarterly interest cover ratio greater than 3.5 times.
Quarterly total leverage ratio less than 2.25 times.
Covenants on borrowings were met as at 30 June 2019.
64
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 22 BORROWINGS (CONTINUED)
Total assets pledged as security
CURRENT
Cash and cash equivalents
Trade and other receivables
Assets held for sale
Inventories
NON-CURRENT
Trade and other receivables
Investments in Joint Ventures
Property, plant & equipment
Deferred tax assets
Goodwill
Other intangible assets
2019
$’000
21,941
71,798
17,414
1,311
112,464
432
-
16,337
8,982
11,185
1,066
38,002
150,466
Consolidated
2018
$’000
12,670
106,224
-
1,541
120,435
946
170
14,736
5,215
15,185
1,740
37,992
158,427
(a)
Lease liabilities and hire purchase liabilities are effectively secured as the rights to the assets recognised in the consolidated financial statements
revert to the financier in the event of default.
Actual interest rates for hire purchase liabilities outstanding during the year ranged between 4.47% and 5.31%. Actual interest rates for lease liabilities
outstanding during the year ranged between 4.93% and 5.97%.
There were no defaults or breaches of any loan agreements during the current year.
Reconciliation of liabilities arising from financing activities.
(b)
(c)
The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising
from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group's consolidated statement of cash
flows as cash from financing activities.
Hire purchase and finance lease liabilities
Other borrowings
Non-cash
changes
Financing
New finance
cash flows
leases
1 July 2018
(i)
(note 28(b))
30 June 2019
$’000
$’000
$’000
$’000
4,961
743
5,704
(2,865)
916
(1,949)
1,811
107
1,918
3,907
1,766
5,673
(i)
The cash flows from other borrowings make up the net amount of proceeds from borrowings and repayment of borrowings in the consolidated statement of
cash flows.
65
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 23 PROVISIONS
Employee benefits
Other provisions (see below)
CURRENT
NON-CURRENT
Note
(i)
2019
$’000
8,664
7,662
16,326
11,730
4,596
16,326
Consolidated
2018
$’000
10,152
5,387
15,539
12,058
3,481
15,539
Other Provisions
Revenue (ii)
Make Good (iii)
Leases (iv)
Provisions (v)
Total
Office of State
Contract
Balance at 1 Jul 2018
Additional provisions recognised
Provisions reversed
Paid
Balance at 30 June 2019
3,421
1,333
-
-
(1,578)
1,843
-
2,540
-
-
633
5,387
1,300
3,853
-
-
-
(1,578)
13
-
-
1,346
2,540
1,933
7,662
(i)
The provision for employee benefits represents annual leave and vested and non-vested long service leave entitlements accrued.
(ii)
The provision for Office of State Revenue ("OSR") primarily relates to the following:
Following the settlement of the NSW OSR issue, BSA has entered into a repayment plan with the NSW OSR. The provision for this matter at the
end of FY2019 stands at $1,843,000 (FY2018: $3,421,000).
(iii)
The provision for make good represents the estimated cost of work to comply with make good obligations in certain Group property leases.
(iv)
The provision relates to onerous leases.
(v)
The provision for project provisions represents the expected cost of obligations under construction contracts recognised at the Directors' best
estimate of the expenditure to settle the Group's obligation.
66
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24 ISSUED CAPITAL
(a)
Share capital
Ordinary shares - fully paid
(b)
Movements in ordinary share capital
Date
Details
Note
(c)
Parent Entity
2019
2018
Number of
Number of
Shares
Shares
428,241,404
422,997,668
Number of
Shares
$’000
1 July 2018
Opening Balance
422,997,668
97,562
27 July 2018
Exercise of Non-Executive Director Rights
21 September 2018
Exercise of Performance Rights
2 November 2018
Dividend Reinvestment Plan
30 June 2019
Balance
257,838
375,391
4,610,507
428,241,404
87
-
1,245
98,894
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.
(d)
Options
At 30 June 2019 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 29.
(e)
Executive Securities Plan
The Company has established an Executive 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.
(g)
Employee Performance Rights Plan
Information relating to the BSA Limited Employee 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 29.
(h)
Fee Sacrifice Equity Plan
Information relating to the BSA Limited Fee Sacrifice Equity 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 29.
67
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 25 RESERVES AND ACCUMULATED LOSSES
(a)
Reserves
Share-based payments reserve
Share-based payments reserve
Opening balance
Rights expense
Shares issued in satisfaction of performance conditions
Closing balance
Consolidated
2019
$’000
2018
$’000
1,868
1,868
1,568
299
1
1,868
1,568
1,568
1,423
145
-
1,568
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 29.
The share-based payments reserve records items recognised as expenses on valuation of employee share options and rights.
(65,243)
(65,243)
(8,269)
(520)
-
-
(74,032)
(65,243)
-
-
(74,032)
(65,243)
11,150
10,764
(10,592)
(2,118)
9,204
11,700
8,827
(7,263)
(2,114)
11,150
(b)
Accumulated losses
Movements in accumulated losses were as follows:
Balance at beginning of year
Opening balance adjustment AASB 15 application
Opening balance adjustment AASB 9 application
As restated
Net loss for the year
Balance at end of year
(c)
Profit Reserve
Movements in profit reserve were as follows:
Balance at beginning of year
Net profit after tax for the year, continuing operations
Net loss after tax, discontinued operations
Dividends
Balance at end of year
68
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 25 RESERVES AND ACCUMULATED LOSSES (CONTINUED)
(d)
Dividends on equity instruments
Recognised amounts
Fully paid ordinary shares
Interim dividend:
Final fully franked dividend of 0.5 (2018: 0.5) cents per
fully paid ordinary share franked at the rate of 30% paid
Year 2019
Year 2018
Cents per share
Total $‘000
Cents per share
Total $‘000
-
-
-
-
2 November 2018
0.50
2,118
0.50
2,114
Unrecognised amounts
Fully paid ordinary shares
Final dividend
0.50
2,141
0.50
2,115
On 20 August 2019 the Directors declared a fully franked dividend of 0.50 cent per share to the holders of fully paid ordinary shares in respect of
the financial year ended 30 June 2019, to be paid to shareholders on 4 November 2019. This dividend has not been included as a liability in these
consolidated financial statements. The dividend will be paid to all shareholders on the Register of Members on 30 September 2019. The total
estimated dividend to be paid is $2,141,000.
The Group has a Dividend Reinvestment Plan (DRP) in place. The DRP was in place for the distribution made in November 2018. The distribution
resulted in $873,000 being paid in cash and $1,245,000 being raised by the DRP through the issue of 4.610 million securities at $0.27 in
November 2018.
(e)
Franking credits
Franking account balance as at 30 June
Franking credits that will arise from the payment of income tax payable as
at the reporting date
Franking credits that will attach to the payment of dividends proposed
or declared before the financial report was authorised for issue but not
recognised as a distribution to equity holders during the period.
Net franking credits available
Consolidated
2018
$’000
15,464
-
2019
$’000
14,558
255
(908)
13,905
(906)
14,558
69
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26 CAPITAL AND LEASING COMMITMENTS
Note
2019
$’000
Consolidated
2018
$’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
3,636
5,880
-
9,516
3,951
5,771
-
9,722
(ii)
Finance Lease Commitments
The Group leases various plant and equipment with a carrying amount of $2,886,000 (2018: $3,718,000) 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
730
2,108
-
2,838
(347)
2,491
607
1,884
2,491
725
2,729
-
3,454
(365)
3,089
626
2,463
3,089
22
22
(iii)
Hire Purchase Commitments
The Group has purchased various plant and equipment with a carrying amount of $732,000 (2018: $1,278,000) 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
70
649
923
-
1,572
(156)
1,416
480
936
1,416
771
1,261
-
2,032
(160)
1,872
714
1,158
1,872
22
22
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 27 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:
BSA | Connect
BSA | Connect provides contracting services to the telecommunications, subscription television and communication industries. The contracting
services include the delivery of bundled services over fixed line multi-technology services and networks and the installation of subscription
television.
BSA | Build
BSA | Build provides the design and installation of building services for commercial and industrial buildings and infrastructure including: Mechanical
and Fire services.
BSA | Maintain
BSA | Maintain 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 segment:
Continuing operations
BSA | Connect
BSA | Build
BSA | Maintain
Other
Revenue
Year Ended
Segment Profit/Loss
Year Ended
30 Jun 19
$’000
30 Jun 18
$’000
30 Jun 19
$’000
30 Jun 18
$’000
251,551
114,621
103,312
295
469,779
249,356
85,067
93,450
243
428,116
16,878
4,134
2,244
11
23,267
16,442
3,985
1,228
24
21,679
Corporate costs including acquisition, legal and advisory
(7,651)
(7,783)
Finance costs
Profit before tax from continuing operations
(819)
14,797
(604)
13,292
Segment revenue reported above represents revenue generated from external customers.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 3. Segment profit/loss
represents the profit/loss 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.
71
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 27 SEGMENT INFORMATION (CONTINUED)
(d)
Segment assets and liabilities
Segment assets
BSA | Connect
BSA | Build
BSA | Maintain
Consolidated assets
Segment liabilities
BSA | Connect
BSA | Build
BSA | Maintain
Consolidated liabilities
Year Ended
30 Jun 19
$’000
75,724
30,261
27,067
133,052
55,346
33,510
12,981
101,837
30 Jun 18
$’000
48,082
78,823
31,522
158,427
39,239
53,089
21,062
113,390
For the purposes of monitoring segment performance and allocating resources between segments.
All assets, except cash, are allocated to reportable segments. In 2019 and 2018, cash is allocated to BSA | Connect. Goodwill is allocated to
reportable segments as described in note 16. 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
BSA | Connect
BSA | Build
BSA | Maintain
Depreciation and amortisation
Additions to non-current assets
Year Ended
Year Ended
30 Jun 19
$’000
30 Jun 18
$’000
30 Jun 19
$’000
30 Jun 18
$’000
4,485
120
1,584
6,189
3,463
123
1,707
5,293
6,110
133
1,029
7,272
9,345
564
729
10,638
72
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 27 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:
Australia
Revenue from external customers
Non-current assets
Year ended
Year Ended
30 Jun 19
$’000
469,779
469,779
30 Jun 18
$’000
428,116
428,116
30 Jun 19
$’000
38,002
38,002
30 Jun 18
$’000
37,992
37,922
(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 BSA |
Connect segment who accounts for 28% of gross external revenue (2018: 24%).
NOTE 28 CASH FLOW INFORMATION FOR THE PERIOD
(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
Decrease in trade receivables
Decrease in inventories
(Increase)/decrease in deferred tax asset
Decrease/(increase) in other operating assets
Decrease in trade payables
increase in other operating liabilities
Increase in tax provision
Increase/(decrease) in provisions
Net cash generated by operating activities
2019
$’000
172
5,515
674
299
(307)
6,976
230
(3,767)
3,057
(4,766)
6,669
2,807
787
18,346
Consolidated
2018
$’000
1,564
5,273
674
145
(269)
512
633
909
(7,115)
(4,198)
7,369
-
(834)
4,663
73
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 28 CASH FLOW INFORMATION FOR THE PERIOD (CONTINUED)
(b)
Non-cash transactions
During the year the consolidated entity acquired plant and equipment with an aggregate value of $848,000 (2018:$4,095,000) by means of finance
leases. These acquisitions are not reflected in the consolidated statement of cash flows.
(c)
Credit Standby Arrangements with Banks
Credit facility
Amount utilised
Unused credit facility
This facility is summarised as follows:
A Working Capital Facility which covers the financial requirements of the day to day operations of the Group.
(d)
Credit Standby Arrangements with Banks
Credit facility
Amount utilised
Unused credit facility
2019
$’000
20,000
-
20,000
12,500
-
12,500
This facility is summarised as follows:
A Corporate Receivables Facility which covers the financial requirements of the day to day operations of the Group.
(e)
Master Asset Finance Facilities
Total asset finance facility
Amount utilised
Total unused Master Asset Finance Facility
8,000
(3,907)
4,093
Consolidated
2018
$’000
20,000
-
20,000
12,500
-
12,500
8,000
(4,961)
3,039
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. During the year, the Company and the consolidated entity have not breached any borrowing requirements.
(f)
Loan Facilities
Loan facilities
Amount utilised
Unused loan facility
(g)
Guarantees
-
-
-
-
-
-
Guarantees to the value of $18,440,000 were utilised at 30 June 2019 (2018: $24,902,000), and 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.
(h)
Surety Bonds
Surety Bonds of which $19,969,000 were utilised at 30 June 2019 (2018: $16,341,000), are unsecured.
74
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29 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 twelve 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 2019 (2018: Nil).
Fair value of options granted
There have been no options granted since 25 November 2004.
There is no employee benefits expense in the Consolidated Statement of Profit or Loss and Other Comprehensive Income (2018: Nil), which
relates, to equity-settled share-based payment transactions under the Employee Option Plan.
(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 Consolidated Statement of Financial Position 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 2019 (2018: 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 24 (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 their acceptance, and where appropriate their 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.
75
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29 SHARE-BASED PAYMENTS (CONTINUED)
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
Issue Price
Balance at Start
Granted During
Released from Escrow
Balance in Escrow
Grant Date
Expiry Date
(cents)
of the Year
13 Oct 2006
19 Jul 2007
11 Sep 2007
13 Sep 2007
14 Dec 2007
10 Feb 2009
Total
n/a
n/a
n/a
n/a
n/a
n/a
0.23
0.63
0.68
0.68
0.68
0.10
Number
450,000
850,000
150,000
-
400,000
750,000
2,600,000
the Year
Number
-
-
-
-
-
-
-
During the Year
at End of the Year
Number
50,000
250,000
-
-
-
250,000
550,000
Number
400,000
600,000
150,000
-
400,000
500,000
2,050,000
(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 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)
Service conditions as determined by the Board.
(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 each Measurement Period and service condition of three years.
76
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29 SHARE-BASED PAYMENTS (CONTINUED)
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 current plan company is BSA Limited ACN 088 412 748 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 Under
Right
Granted During
the Year Under
Right
Exercised During
the Year Under
Right
Cancelled During
the Year Under
Right
Balance in Escrow
at End of the Year
Under Right
Number
Number
Number
Number
Number
25 Nov 14
30 Jun 15
25 Nov 19
29 Nov 16
6 Feb 17
29 Nov 21
29 Nov 16
1 Sep 17
29 Nov 21
28 Nov 17
4 Dec 17
4 Dec 22
4 Dec 17
4 Dec 17
4 Dec 22
1 Oct 18
1 Oct 18
1 Oct 23
1 Feb 19
1 Feb 19
1 Feb 24
1 Mar 19
1 Mar 19
1 Mar 24
Total
-
-
-
-
-
-
-
-
1,116,667
-
200,000
142,857
175,391
-
-
-
1,634,915
-
-
-
-
-
553,301
380,000
175,440
1,108,741
-
-
(200,000)
-
(175,391)
-
-
-
(375,391)
-
-
-
-
-
-
-
-
-
1,116,667
-
-
142,857
-
553,301
380,000
175,440
2,368,265
Fee Sacrifice Equity Plan to Individual Non-Executive Directors
The establishment of the BSA Fee Sacrifice Equity Plan to Individual Non-Executive Directors was approved by shareholders at the 2017 AGM.
The plan is to establish a mechanism for Non-Executive Directors (NEDS) to acquire shares in the Company by electing to salary sacrifice a
proportion of annual fees, on a voluntary basis that will align their interests with shareholders and does not create any financial or governance
concerns for shareholders.
All individuals holding NED roles in the Company or a subsidiary of the Company are eligible to become participants in the Plan.
Each year, the Company intends to invite each NED to voluntarily elect to apply for rights under the Plan, to be funded by salary sacrificing a
proportion of Annual Board fees. While the Company intends to issue invitations annually, the Board will determine at its sole discretion each year
whether to issue an invitation.
Invitations will include such terms as the Board deems appropriate including the date of the invitation, the number of Deferred Rights that a participant
is eligible to apply for, that the price of a Deferred Right shall be nil (ignoring the amount of the fee sacrificed), that the exercise price shall be nil, the
period during which disposal restrictions will apply, and such other terms and conditions as the Board determines.
Deferred Rights granted under this Plan will be fully vested on the date of grant (being the date notified in a Notice of Grant).
77
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29 SHARE-BASED PAYMENTS (CONTINUED)
Deferred Rights will be automatically exercised 90 days after grant but may not be exercised earlier. On exercise of a right, the Board in its discretion will
either: a) issue shares to Participants or b) arrange for shares to be acquired for the benefit of Participants by the trustee of the BSA Employee Share
Trust. The Company will contribute such funds as needed to acquire shares either on-market or a subscription to a new issue as directed by the Board.
The shares that result from the exercise of Deferred Rights are Restricted Shares.
All shares acquired by Participants are subject to disposal restrictions that prevent disposal until the earlier of 15 years from the date of grant of rights
and cessation of being a NED on the Board of BSA or a subsidiary of the Company (which will be specified Disposal Restrictions). During the period the
Special Disposal Restrictions apply, the Restricted Shares may not be sold or otherwise disposed. The Company may impose a CHESS holding lock on
Restricted Shares to ensure the participant does not sell them earlier than permitted under the Rules. The Company will advise each participant when it
considers the specified disposal restrictions cease to apply.
Participants must not enter an arrangement with anyone if it would have the effect of limiting their exposure to risk in relation to Deferred Rights or
Restricted Shares.
Participants will be treated in a manner that does not advantage or disadvantage them compared with other shareholders in the event of bonus issues,
rights issues and capital reorganisation.
If a participant ceases to be a NED of the Company or a subsidiary of the Company any unexercised Deferred Rights will be exercised automatically
the day following cessation, and any Restricted Shares held by a Participant that are subject to Specified Disposal Restrictions will cease to be
subject to such restrictions on the day of cessation unless otherwise determined by the Board and notified to the Participant in the Invitation.
Grant
Date
Exercise
Date
Expiry
Date
Exercise Price
(cents)
Balance at Start
of the Year
Under Right
Granted During
the Year Under
Right
Exercised During
the Year Under
Right
Cancelled During
the Year Under
Right
Balance in
Escrow at End of
the Year Under
Right
Number
Number
Number
Number
Number
3 May 17
3 May 18
3 May 33
28 Mar 19
28 Mar 19
28 Mar 34
-
-
257,838
-
(257,838)
-
356,708
(356,708)
Total
257,838
356,708
(614,546)
-
-
-
-
-
-
NOTE 30 EVENTS OCCURRING AFTER THE BALANCE DATE
On 13 August 2019, BSA Limited agreed to sell its HVAC Build Major Projects Business in New South Wales and Victoria to Fredon Air Pty Limited
(Fredon) for gross proceeds of $5,500,000 (comprising cash of $4,400,000 and $1,100,000 of net liabilities transferred to Fredon). Under the
agreement, BSA retained three near complete HVAC Build Major Projects and did not include the HVAC Build Minor Projects nor the Fire Build
businesses. Economic ownership of the HVAC Build Major Projects transferred to Fredon effective 1 July 2019 although completion of the sale shall
occur on 30 August 2019.
The sale to Fredon and the completion of the three retained HVAC Build Major Projects results in a complete exit from the HVAC Major Project
construction market by BSA.
On 16 August 2019 the receivables finance facility with NAB ($12,500,000) was extended to have an expiry date of 31 July 2020.
On 20 August 2019, the Director's declared a dividend of 0.50 cents per share.
Other than as detailed above, the Directors are not aware of any significant events since the end of the reporting period.
78
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 31 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:
Rent was paid to The Day Street Unit Trust in which M Lowe, a Director,
has a beneficial interest
2019
$
74,170
Consolidated Entity
2018
$
173,604
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 payable for premises from Director
2019
$
Consolidated Entity
2018
$
14,875
14,875
(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.
Balance at
Net
Balance
the start of
Granted as
Rights
Change
at End of
Vested
but Not
Vested
Vesting
and
During
Rights
2019
the year
Compensation
Exercised
Other
Year
Exercisable
Exercisable
Year
Nicholas Yates
Timothy Harris
Michael Givoni
Graeme Barclay
1,259,524
-
-
375,391
175,440
(375,391)
207,838
251,708
(459,546)
50,000
105,000
(155,000)
1,892,753
532,148
(989,937)
-
-
-
-
-
1,259,524
175,440
-
-
1,434,964
-
-
-
-
-
1,259,524
-
-
-
-
-
251,708
105,000
1,259,524
356,708
79
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 31 RELATED PARTY TRANSACTIONS (CONTINUED)
Balance at
Net
Balance
the start of
Granted as
Rights
Change
at End of
Vested
but Not
Vested
Vesting
and
During
Rights
2018
the year
Compensation
Exercised
Other
Year
Exercisable
Exercisable
Year
Nicholas Yates
Nicholas Benson
Timothy Harris
Michael Givoni
Graeme Barclay
1,116,667
142,857
-
90,322
-
( 90,322)
200,000
175,391
-
-
207,838
50,000
-
-
-
-
-
-
-
-
1,259,524
-
375,391
207,838
50,000
1,406,989
576,086
( 90,322)
-
1,892,753
-
-
-
-
-
-
1,259,524
142,857
-
-
375,391
175,391
207,838
207,838
50,000
50,000
1,892,753
576,086
Further details of schemes can be found in the Directors’ Report.
(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.
Balance at
the start of
Rights
the year
Exercised
Other Changes
During the Year
Balance at the
End of the Year
Balance
Held Nominally
2019
Directors of BSA Limited
Ordinary Shares
Mark Lowe
Paul Teisseire
Michael Givoni
Graeme Barclay
Nicholas Yates
David Prescott1
Max Cowley2
10,115,403
680,012
-
-
796,400
459,546
-
155,000
2,854,760
-
-
-
-
-
-
Ordinary Shares - Escrowed
Mark Lowe
200,000
Key Management Personnel
Ordinary Shares
Timothy Harris
-
14,646,575
375,391
989,937
-
-
-
-
52,865
-
-
-
-
52,865
10,115,403
680,012
1,255,946
155,000
2,907,625
-
-
200,000
375,391
15,689,377
-
-
-
-
-
-
-
-
-
-
1. David Prescott is Investment Manager of Lanyon Asset Management Pty Ltd which holds 91,405,746 ordinary shares in BSA Limited.
2. Max Cowley is a nominee director of Birketu Pty Ltd and is also a director of Birketu Pty Ltd. Birketu Pty Ltd holds shares in BSA Limited of
72,000,000 (2018: 67,204,000). Max Cowley has no beneficial interest in Birketu Pty Ltd.
80
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 31 RELATED PARTY TRANSACTIONS (CONTINUED)
2018
the year
Exercised
During the Year
End of the Year
Held Nominally
Balance at
the start of
Rights
Other Changes
Balance at the
Balance
Directors of BSA Limited
Ordinary Shares
Mark Lowe
Paul Teisseire
Michael Givoni
Graeme Barclay
Nicholas Yates
Ordinary Shares - Escrowed
Mark Lowe
Key Management Personnel
Ordinary Shares
Nicholas Benson
Timothy Harris
(c)
Executive Securities Loans
Opening
Balance
$000
914
1,661
1,734
1,705
1,473
1,473
1,477
2,552
2,656
2,487
2,437
1,029
833
807
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
10,115,403
680,012
796,400
-
2,727,273
200,000
1,363,636
-
15,882,724
-
-
-
-
-
-
-
-
-
-
-
-
-
10,115,403
680,012
796,400
-
127,487
2,854,760
-
200,000
90,322
-
217,809
1,453,958
-
16,100,533
-
-
-
-
-
-
-
-
-
Balance at
Notional
Notional Interest
Provision for
End of Year
Interest Charged
Not Charged
Impairment
Number of
Individuals
$000
$000
$000
$000
726
914
1,661
1,734
1,705
1,473
1,473
1,477
2,552
2,656
2,487
2,437
1,029
833
7
(13)
1
29
232
90
90
93
44
334
171
148
63
26
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28
74
74
-
-
-
-
-
-
-
-
-
-
-
6
8
11
11
11
11
11
11
13
13
13
13
6
1
81
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 31 RELATED PARTY TRANSACTIONS (CONTINUED)
Individuals with loans above $100,000 in reporting period
Opening
Notional Interest Charged Using
Balance at End
2019
Balance
Effective Interest Rate Method
Ray Larkin
Leaston Paull
Bryce Wood
Peter Tripodi *
Younis Tehfe
$
220,507
220,507
186,770
142,500
129,319
$
1,737
1,737
1,473
-
1,000
* Balance at year end stated at actual date to the terms of the loans
of Year
$
222,244
222,244
-
142,500
130,319
Opening
Notional Interest Charged Using
Balance at End
2018
Balance
Effective Interest Rate Method
Brendan Foley *
Ray Larkin
Leaston Paull
Bryce Wood
Peter Tripodi *
Younis Tehfe
$
590,412
227,362
227,362
193,032
143,750
135,453
$
3,087
( 6,855)
( 6,855)
( 6,262)
-
( 6,134)
of Year
$
30,755
220,507
220,507
186,770
142,500
129,319
Highest Balance
During Period
$
222,244
222,244
186,770
142,500
130,319
Highest Balance
During Period
$
590,412
227,362
227,362
193,032
143,750
135,453
* Balance at year end stated at actual date to the terms of the loans
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 to 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 at the termination date. The outstanding principal is now due and
receivable and actions to recover are under way.
82
BSA LIMITEDANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32 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.
Financial Assets
Cash and cash equivalents
Loans and receivables
Trade and other receivables
2019
$’000
Consolidated
2018
$’000
21,941
12,670
57,647
105,735
Financial Assets at amortised cost
79,588
118,405
Financial liabilities
Financial liabilities held at amortised cost
Trade and other payables
Borrowings
54,209
5,673
81,914
5,704
Financial liabilities at amortised cost
59,882
87,618
NOTE 33 FINANCIAL RISK MANAGEMENT
(a)
General objectives, policies and processes
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.
83
BSA LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FINANCIAL RISK MANAGEMENT (CONTINUED)
(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 4% of gross monetary assets at balance date. Concentration of credit risk to
any other counterparty did not exceed 7% of gross monetary assets at balance date.
The maximum exposure to credit risk at balance date is as follows:
Trade and other receivables
2019
$’000
59,395
59,395
Consolidated
2018
$’000
107,170
107,170
Included in trade and other receivables, the most significant customer accounts for 16.5% of trade receivables at 30 June 2019 (2018: 6.6%).
The maximum exposure to credit risk at balance date by country is as follows:
Australia
2019
$’000
59,395
59,395
The maximum exposure to credit risk for cash and trade receivables at balance date by type of customer is as follows:
BSA | Connect
BSA | Build
BSA | Maintain
2019
$’000
31,278
6,811
21,306
59,395
All major customers are credit worthy, as detailed above.
The Group has significant concentration of credit risk as all loans and lease liabilities are with the one financial institution.
Consolidated
2018
$’000
107,170
107,170
Consolidated
2018
$’000
29,408
51,204
26,558
107,170
84
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FINANCIAL RISK MANAGEMENT (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:
Credit stand-by arrangements
Total facilities:
Corporate Market Loan
Debtor Finance Facility
Used at balance date:
Corporate Market Loan
Debtor Finance Facility
Unused at balance date:
Corporate Market Loan
Debtor Finance Facility
Master Asset Finance Facility
Total facilities:
Used at balance date
Unused at balance date
Total unused Facilities at balance date
2019
$’000
20,000
12,500
32,500
-
-
-
-
20,000
12,500
32,500
8,000
3,907
4,093
36,593
Consolidated
2018
$’000
20,000
12,500
32,500
-
-
-
20,000
12,500
32,500
8,000
4,961
3,039
35,539
In addition to the above arrangements the consolidated entity has a bank guarantee facility of $26,500,000 (2018: $26,500,000) which was utilised
to $18,440,000 (2018: $24,902,000).
In addition to the above facilities the consolidated entity has a surety bond facility with Swiss Re International SE of $30,000,000 (2018: $30,000,000)
which was utilised to $19,969,000 (2018: $16,341,000).
Refer Note 22 (a) for details of terms of financing arrangements.
85
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FINANCIAL RISK MANAGEMENT (CONTINUED)
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 consolidated 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 2019
Other
Trade payables
Other payables
Finance lease and hire purchase liabilities
TOTAL
Financial Liabilities
30 June 2018
Other
Trade payables
Other payables
Finance lease and hire purchase liabilities
TOTAL
Carrying
Contractual Cash
Amount
$’000
1,766
32,808
46,391
3,907
84,872
Flows
$’000
1,766
32,808
46,391
4,410
85,375
Carrying
Contractual Cash
Amount
$’000
743
37,573
70,032
4,961
113,309
Flows
$’000
743
37,573
70,032
5,486
113,834
< 6
mths
$’000
1,766
32,808
46,391
690
81,655
< 6
mths
$’000
743
37,573
70,032
748
109,096
6- 12
mths
$’000
-
-
-
690
690
6- 12
mths
$’000
-
-
-
748
748
1-3
years
$’000
-
-
-
3,031
3,031
1-3
years
$’000
-
-
-
3,990
3,990
> 3
years
$’000
-
-
-
-
-
> 3
years
$’000
-
-
-
-
-
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.
Carrying
Contractual Cash
Amount
$’000
46,618
25,612
72,230
Flows
$’000
48,323
25,613
73,936
Carrying
Contractual Cash
Amount
$’000
5,986
101,184
107,170
Flows
$’000
6,338
102,013
108,351
< 6
mths
$’000
48,323
24,887
73,210
< 6
mths
$’000
6,338
100,734
107,072
6- 12
mths
$’000
-
-
-
6- 12
mths
$’000
-
85
85
1-3
years
$’000
-
-
-
1-3
years
$’000
-
-
-
> 3
years
$’000
-
726
726
> 3
years
$’000
-
1,194
1,194
Financial Assets
30 June 2019
Trade receivables
Other receivables
TOTAL
Financial Assets
30 June 2018
Trade receivables
Other receivables
TOTAL
86
BSA LIMITEDANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FINANCIAL RISK MANAGEMENT (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.
NOTE 34 CAPITAL AND LEASING COMMITMENTS
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 :
Gearing ratios
Net (cash) / debt
Total equity
Total Gearing Ratio
2019
$’000
(16,268)
35,934
(45.27%)
Consolidated
2018
$’000
(6,966)
45,037
(15.47%)
Gearing levels were maintained at a healthy position at 30 June 2019. It is the Board's intention to monitor gearing levels going forward to ensure
flexibility. There have been no 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.
87
BSA LIMITED ANNUAL REPORT 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 35 CONTINGENT LIABILITIES
(i) 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 $38,409,000 (2018:$41,242,000)
(ii) Following the settlement of the NSW OSR issue, BSA is currently working with other State Revenue Authorities on outstanding matters.
NOTE 36 CORPORATE INFORMATION
The Financial Report of BSA Limited for the year ended 30 June 2019 was authorised for issue in accordance with a resolution of the Directors on
20 August 2019 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 Securities Exchange.
The Financial Report is presented in Australian currency.
The address of the registered office and principal place of business is:
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
88
BSA LIMITEDANNUAL REPORT 2019 DIRECTORS’ DECLARATION
The Directors declare that:
(a)
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;
(b)
in the Directors’ opinion, the attached consolidated financial statements are in compliance with International Financial Reporting
Standards, as stated in note 3.1 to the consolidated financial statements;
(c)
In the Directors’ opinion, the attached consolidated financial statements and notes thereto are in accordance with the
Corporations Act 2001, 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.
At the date of this declaration, the Company is within the class of companies affected by ASIC Corporations (Wholly-owned Companies)
Instrument 2016/785, dated 28 September 2016. 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 Corporations
(Wholly-owned Companies) Instrument 2016/785 applies, as detailed in note 18 to the consolidated 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.
On behalf of the Directors.
Michael Givoni
Chairman
Sydney
20 August 2019
89
BSA LIMITED ANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
90
BSA LIMITEDANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
91
BSA LIMITED ANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
92
BSA LIMITEDANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
93
BSA LIMITED ANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
94
BSA LIMITEDANNUAL REPORT 2019 INDEPENDENT AUDITOR’S REPORT
95
BSA LIMITED ANNUAL REPORT 2019 SHAREHOLDER INFORMATION
THE SHAREHOLDER INFORMATION SET OUT BELOW WAS APPLICABLE AS AT 31 JULY 2019
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
Number of
Holders
Ordinary
Shares
Number of
Holders
Options
of Holders
Rights
Number
Performance
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and above
180
475
261
688
215
1,819
64,385
1,485,442
2,018,679
29,471,567
395,558,039
428,598,112
-
-
-
-
-
-
-
-
-
-
-
-
3
-
-
-
3
6
380.000
-
-
-
1,988,285
2,368,265
There were 221 (2018: 194) 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
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
BIRKETU PTY LTD
SANDHURST TRUSTEES LTD
HGT INVESTMENTS PTY LTD
SAMLOWE PTY LTD
MR GREG MULLANE
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
FF OKRAM PTY LTD
EMELWIN PTY LTD
EDINGTON PTY LIMITED
TALOOMBI PTY LTD
CTSF PTY LTD
MISS YAN LI
MR NICHOLAS JOHN BENSON
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
VANWARD INVESTMENTS LIMITED
MR RICHARD EWAN BROMLEY MEWS
MR GRAEME LESLIE HERRING + MRS JOAN HERRING
MS SUE ELIZABETH MCGREGOR
Top 20 Shareholders
96
Ordinary Shares
Number
Percentage
Held
of Issued
110,727,006
84,814,853
73,175,760
21,581,723
14,870,544
10,115,403
7,548,743
6,916,806
6,132,908
2,907,625
1,769,376
1,721,257
1,675,945
1,495,000
1,480,883
1,260,949
1,194,807
1,162,949
1,090,656
1,000,000
25.83%
19.79%
17.07%
5.04%
3.47%
2.36%
1.76%
1.61%
1.43%
0.68%
0.41%
0.40%
0.39%
0.35%
0.35%
0.29%
0.28%
0.27%
0.25%
0.23%
352,643,193
82.28%
BSA LIMITEDANNUAL REPORT 2019 SHAREHOLDER INFORMATION
THE SHAREHOLDER INFORMATION SET OUT BELOW WAS APPLICABLE AS AT 31 JULY 2019
C. SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are set out below:
Ordinary Shares
Number Held
Percentage
THE TRUST COMPANY LIMITED
NAOS ASSET MANAGEMENT LIMITED
BIRKETU PTY LTD
SANDHURST TRUSTEES LIMITED
D. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
87,382,061
83,730,628
73,175,760
21,581,723
20.39%
19.54%
17.07%
5.04%
(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.
97
BSA LIMITED ANNUAL REPORT 2019 CORPORATE DIRECTORY
BSA Limited - Corporate
BSA | Build
Registered Office (Sydney)
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
P
F
E
W
+61 2 8748 2400
+61 2 8748 2577
corporate@bsa.com.au
www.bsa.com.au
Head Office (Sydney)
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
P
F
+61 2 9763 6200
+61 2 9763 6201
BSA | Connect
Head Office (Sydney)
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
P
F
+61 2 8748 2400
+61 2 8748 2577
BSA | Maintain
Head Office (Sydney)
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
P
F
+61 2 9763 6200
+61 2 9763 6201
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
225 George Street
Sydney NSW 2000
Banker
National Australia Bank
255 George Street
Sydney NSW 2000
98
www.bsa.com.au
BSA LIMITEDANNUAL REPORT 2019