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SHAPING THE FUTURE
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CAPRAL LIMITED • 2022 ANNUAL REPORT
ABN 78 004 213 692
2 | Annual Report 2022 Contents
Contents
KEY STATISTICS
CHAIRMAN’S REPORT
MANAGING DIRECTOR’S OPERATIONS AND FINANCIAL REVIEW
BOARD OF DIRECTORS
SUSTAINABILITY REPORT
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
MEMBER DETAILS
3
4
7
11
15
20
25
42
43
44
45
46
48
92
93
98
Annual Report 2022 Key Statistics | 3
KEY STATISTICS
2022
2021
Variance
For The Year Ended 31 December
Sales Volume - Tonnes
71,800
76,300
(4,500)
$m
$m
$m
Revenue
692.5
593.5
99.0
Underlying EBITDA1
Profit after Tax
62.2
40.8
56.4
42.7
5.8
(1.9)
Operating Cash Flow
7.1
41.7
(34.6)
Net Cash1
24.9
50.1
(25.2)
1 Please refer to notes on page 4.
4 | Annual Report 2022 Chairman’s Report
Chairman’s Report
ANNUAL REVIEW
Revenues of $693 million in 2022 were 17% higher
compared to $39.0 million EBIT in 2021 which included
a $2.8 million positive LME revaluation.
than the $593 million reported in 2021 on 6% lower
Reported Net Profit After Tax (NPAT) includes $8.4 million
volume than in the previous year. Sales revenue growth,
arising from recognition of a deferred tax asset brought
particularly in the first half of the year, was driven by
to account (2021 included $9.4 million deferred tax
record high global aluminium prices (LME) and improved
benefit). NPAT was $40.8 million ($2.31 per share)
sales mix.
The strong demand experienced throughout 2021,
continued into the first half of 2022 which was also
compared to last year’s $45.8 million ($2.52 per share)
which also included a gain on property revaluations
of $3.1 million.
supported by a very high order book at the start of the
Higher LME prices and the resultant increase in revenues
year. The second half of the year saw easing supply
saw receivables and inventories increase substantially.
bottlenecks which allowed market participants to work
through the backlog of orders accumulated during the
post-pandemic demand surge. Some market share gains
This higher working capital reduced the Company’s
Net Cash1 at 31 December 2022 by 50% on prior year
to $25.0 million. Despite this additional investment in
from imports came under pressure as international
working capital, the company’s balance sheet remains
supply chain problems eased, and declining dwelling
strong allowing us to continue to balance our utilisation
commencements in the second half of the year led to
of free cash between funding internal growth, investing
lower activity levels in the latter part of 2022.
in additional capacity, and returning cash to our
High productivity, operational leverage from capacity
utilisation, and favourable sales mix all contributed to
a record Underlying EBIT1 of $40.8 million for 2022, 13%
higher than last year’s $36.2 million. A negative LME
revaluation of $2.2 million reduced EBIT to $38.7 million,
shareholders through fully franked dividends.
Shareholders are directed to the Results Presentation
released to the market today.
1 EBITDA is defined as Earnings before Interest, Tax, Depreciation and Amortisation and, in accordance with AASB16. Underlying
EBITDA, EBIT and Earnings per Share (EPS) are adjusted for Significant Items. Significant Items are material items of revenue or
expense that are unrelated to the underlying performance of the business. For the current period, these items are LME and
FX Revaluation $-2.2 million. (FY21: $2.8 million) and Income Tax Benefit $8.4 million (FY21: $9.4 million). Capral believes that
Underlying EBITDA, EBIT and Earnings per Share provides a better understanding of its financial performance and allows for a more
relevant comparison of financial performance between financial periods. The Underlying EBITDA, EBIT and Earnings per Share are
presented with reference to the ASIC Regulatory Guide 230 “Disclosing non-IFRS financial information” issued in December 2011.
Net Cash is cash and cash equivalents ($49.0 million) less short-term borrowings (24.1 million)
Annual Report 2022 Chairman’s Report | 5
Capral has been a long-term
partner, supplying RDM since
its start-up 30 years ago.
“Capral is so much more than just
a supplier. Their team in Tasmania are
very hands-on, visiting us regularly,
continually reviewing their current
supply of materials, also considering
how new extrusions could impact
positively on our overall productivity
and operating efficiencies, making it
more cost-effective to build our boats.”
Ron Devine, Co-Founder,
Richardson Devine Marine
6 | Annual Report 2022 Chairman’s Report
DIVIDENDS
LOOKING AHEAD
After the 2019 restructuring, Capral has demonstrated that
Whilst we expect the housing sector to decline further,
is now very well placed to succeed through the various
the non-residential and industrial segments of our
phases of the business cycle. Capral paid a fully franked
business should remain firm. We are expecting a modest
interim dividend of 20 cents per share during the 2022
decline in the overall extrusion market in the year ahead
year and the financial result for the year supports
which we anticipate will have an impact on earnings
maintaining the final fully franked dividend for the 2022
in 2023.
reporting period.
Please refer to the Outlook section of the Managing
Therefore, the Company has declared a fully franked final
Director’s Report for details of our earnings guidance
dividend of 50 cents per ordinary share (2021: 50 cents)
for 2023.
to be paid on 24 March 2023 in respect of the financial
year ended 31 December 2022. The dividend will be paid
to all shareholders on the register of members as at the
Record Date of 3 March 2023. Our Dividend Reinvestment
Plan will not be active for this dividend.
SAFETY
BOARD CHANGES
Having served as an independent non-executive director
since June 2010, Graeme Pettigrew has decided to retire
from the Board at the conclusion of the AGM
on 27 April 2023 and will therefore not be standing for
re-election. We thank Graeme for his wise counsel and
Once again, the Capral team has delivered excellent safety
support during his tenure, which included his dedicated
results, far exceeding the comparative results of our listed
service as chair of the remuneration and nomination
peers. The Company recorded a total reportable injury
committee. His participation in the Board’s deliberations
frequency rate (TRIFR) of 4.3 injuries per 1 million hours
have been invaluable.
worked in 2022, well below the 7.2 recorded in 2021.
Capral’s management continues to strengthen the strong
safety culture and roll out new initiatives and prioritise
safety across every area of our business.
SUSTAINABILITY
The environment is a key priority for Capral. Our National
Sustainability Committee continues to make significant
and meaningful progress in driving Capral’s Sustainability
journey. I urge stakeholders to read the Sustainability
Report, which details the many initiatives in progress.
In conclusion, on behalf of the board I wish to thank all
of Capral’s stakeholders for their tremendous support
during 2022. We look forward to meeting every challenge
in 2023. Thank you to all my Capral colleagues for their
tireless efforts throughout the past year.
Rex Wood-Ward
Chairman
24 February 2023
Annual Report 2022 Managing Director’s Operations and Financial Review | 7
Managing Director’s Operations
and Financial Review
HIGHLIGHTS
FINANCIAL REVIEW
• Record underlying earnings result for the second
Market conditions were strong in the first half of 2022,
consecutive year
and volumes were assisted by a large order book to start
• Sales revenue $693 million, up 17% on last year
the year. Conditions softened in the second half as the
• Volume at 71,800 tonnes was 6% below last year
market slowed and import supply chains and shipping
• Market conditions softened in the second half of
costs returned to normal levels. Volume however
the year
remained solid which allowed Capral’s manufacturing
• Underlying EBITDA1 $62.2 million, up $5.8 million on
plants to run at good levels of efficiency.
last year
• Underlying EBIT1 $40.8 million, up $4.6 million on
last year
• Underlying Net Profit After Tax1 $34.6 million, up
$4.1 million on last year
• Reported Net Profit After Tax $40.8 million includes
a $8.4 million deferred tax benefit
• Underlying earnings per share1 at $1.96, up $0.16
on last year
• Balance sheet strong with Net Cash1 of $24.9 million
• Fully franked final dividend of 50 cps declared, total
FY22 dividend of 70 cps
• Exceptional safety performance with TRIFR 4.3,
well below our listed peers
As interest rates started to rise the residential housing
market slowed from its highs driven by post-COVID
government housing stimulus programmes. Housing
starts are tracking to record 190,0002 starts in 2022, 18%
down on last year. Commercial construction activity was
buoyant, and our key industrial markets (manufacturing,
transport and marine) also remained relatively strong,
underpinned by good levels of economic activity.
The international LME price of aluminium was impacted
by global supply factors, including Russia’s invasion of
Ukraine. LME started to rise in mid-2021 post-COVID,
reaching peak levels in Q2 2022, before returning to
more normal but still elevated levels in Q4 2022.
Capral’s average LME cost for 2022 was 22% above last
year, which in turn was 30% higher than the previous year.
This flowed through to higher selling prices and working
capital levels which will continue into first half 2023.
8 | Annual Report 2022 Managing Director’s Operations and Financial Review
Vawdrey Australia chooses to work
with Capral and has done for more
than 20 years.
“We buy the best. That’s why we use Capral
aluminium. Capral’s quality is second to none,
it’s cost-effective, and we have a good working
relationship. We depend on Capral as much
as our own blokes, If you have a good working
relationship, it helps with everything.”
Mick Vawdrey, Founder, Vawdrey Australia.
Annual Report 2022 Managing Director’s Operations and Financial Review | 9
During 2019 Capral completed a significant restructure
Late in 2022 a paint line was installed at our new
of its largest manufacturing operation at Bremer Park in
Huntingwood distribution centre with commissioning in
Queensland. This successfully transformed Capral’s
Q1 2023, thereby providing Capral with powder coating
business delivering permanent cost savings and increased
capability in NSW for the first time. These assets will
operational efficiencies. The benefits are evident with
provide Capral an expanded manufacturing presence
Bremer Park now delivering a strong profit contribution
in NSW delivering freight savings and improved service
to the group. The acquisition of the GJames extrusion
to customers.
plant in Smithfield was completed in February 2021.
The plant has been successfully integrated into Capral’s
operations and has moved from a one shift operation to
three shifts during 2022.
We will also continue to focus on growing Capral’s
aluminium distribution business with the objective of
increasing the volume and profitability of Capral’s direct
distribution channel. Over the past year we have added
Capral delivered a record profit result in 2022 with
two Aluminium Centres to the Capral distribution footprint.
underlying EBITDA¹ of $62.2 million (2021: $56.4m)
on 6% lower volume. Underlying EBIT1 of $40.8 million
(2021: $36.2m) and an underlying net profit after tax of
Targeted acquisitions of existing businesses in
North Brisbane and Wollongong have expanded our
geographical presence. There exists a small number of
$34.6 million (2021: $30.5m). An excellent result,
other good opportunities to expand our footprint in
increasing earnings on lower volume demonstrates how
the future.
far Capral has progressed over the last four years.
FAIR TRADE
Capral ended 2022 with a Net Cash1 balance of
$24.9 million. Debtors collection performance remained
good but inventory levels were high at year end due to
delayed shipments of rolled product arriving in the second
half. Working capital levels also increased due to the
impact of the higher LME on debtors and inventory levels,
resulting in a lower net cash position. This will improve as
working capital returns to more normal levels during 2023.
Capral continues to lead the local industry in the pursuit
of fair trade
• Measures on Chinese imports are in place until 2025
and a review of duty levels is currently underway
• Measures against some Malaysian and Vietnamese
suppliers fell away during the year and we are pressing
for re-instatement
Capral will pay a fully franked final dividend of 50 cents per
share and, together with the interim dividend of 20 cents
per share, resulting in total FY22 dividends to 70 cents per
share (FY21: 70 cps).
Market share gains have been made against imports over
the last two years, however they continue to represent a
material proportion of the total Australian extrusion
market. As supply chains normalise we must remain
KEY INITIATIVES AND STRATEGIES
Key high-level strategies remain consistent
vigilant in this area.
SAFETY
Safety First is the first of Capral’s key values. We continue
to focus on risk assessment, training, systems, and our
safety culture. Capral’s safety performance has been
exceptional this year, recording a total reportable injury
frequency rate (TRIFR) of 4.3 (2021: 7.2). This is well
below the peer average of 9.8 for listed building
products manufacturers.
• Build on our strengths – product offer, scale, capability
and our people
• Optimise what we do – improve productivity in all
aspects of our business
• Grow for the future – develop new and innovative
products, expand our footprint
A key focus in 2023 will be in Sydney with the Smithfield
and Penrith extrusion plants and a new paint line installed
at our Huntingwood distribution centre. Smithfield will
continue to focus on lifting productivity through
debottlenecking aspects of product flow and upgrades
of some equipment. During January 2023, a project was
successfully completed to upgrade the Penrith extrusion
press and shop floor software. This was a major
undertaking by the Capral engineering team and will
ultimately result in a first-class extrusion facility at Penrith.
10 | Annual Report 2022 Managing Director’s Operations and Financial Review
SUSTAINABILITY AND ESG
Capral advanced its commitment to environmental
obligations by forming a National Sustainability
Committee in 2020 with employee representation across
Capral’s operations. This resulted in the development of
LME is volatile and subject to international influences.
Based on external forecasts, we expect LME to remain
at elevated levels throughout the first quarter of 2023 and
then weaken on the back of lower global demand as
economies slow under the weight of higher interest rates.
Capral’s Sustainability four pillars and a roadmap to net
The overall market for Capral’s aluminium extrusion and
zero by 2050. During the year Capral introduced lower
carbon aluminium options to the Australian market, LocAl®
Green and LocAl® Super Green. Capral has considered the
overall impact of current ESG issues and has not
rolled product is forecast to fall modestly in 2023.
We expect to retain a good proportion of market share
gained from imports. Underlying EBITDA¹ is forecast,
absent any unforeseen events, to be between $52 million
discovered any resulting material impact on our financial
and $56 million with underlying Net Profit After Tax
statements at this point. Please refer to Capral’s
between $26 million and $30 million. On that basis
Sustainability Report (pages 15 to 19) for further details.
Capral would be in a position to continue the payment
KEY OPERATING RISKS
Capral has a robust risk assessment process and active
risk mitigation programme, key risks include;
• Significant slow-down in economic activity, particularly
the new housing market
of dividends.
The focus in the year ahead will be to deliver benefits
from our recent capital investments in NSW, increase
productivity in our extrusion operations, and grow our
distribution business. We plan to enhance our range,
service, and quality to help grow our customer base to
•
Increased level of imported aluminium extrusion and
deliver strong ongoing profitability.
increased local competitor activity
• External IT threats such as cyber attacks
• Changes in construction methodology
OUTLOOK
Forecasts for the residential market show the market
slowing further. Starts in 2023 are forecast2 to be on par
with 2022 but the pipeline of work will empty out over the
next year. The non-residential market is forecast to be firm
in 2023 as are our key industrial markets with customers
continuing to support local supply.
I wish to thank the Capral team for their tremendous
contribution to the outstanding 2022 result. Capral is
in a good position to capitalise on its strong foundation,
maximise opportunities as they present, and develop the
business for the future.
Tony Dragicevich
Managing Director
24 February 2023
1 Refer to Underlying EBITDA, EBIT, Earnings per Share (EPS) and Net Cash explanation in footnotes to Chairman’s Report on page 4
2 BIS Oxford Economics December 2022 forecast
Annual Report 2022 Board of Directors | 11
Board of Directors
Directors in office during the financial year and up to the date of this report:
REX WOOD-WARD
PHILIP JOBE B. Comm
Chairman of Board (Independent)
Non-executive director (Independent)
Appointed 6 November 2008
• Chairman of the Board
Appointed 24 April 2009
Retired 27 April 2022
• Member of the Audit & Risk Committee
• Member of the Audit & Risk Committee
• Member of the Remuneration & Nomination Committee
• Member of the Remuneration & Nomination Committee
Mr Wood-Ward has 45 years of experience in general
Mr Jobe became a non-executive director following the
management, mergers and acquisitions, corporate
expiry of his term as Capral’s Chief Executive Officer and
strategy and structuring, including in manufacturing and
Managing Director in April 2013. Before joining Capral,
distribution. Over his career he has been a director of over
Mr Jobe was the Executive General Manager of
10 publicly listed companies in Australia, the United
Boral Limited’s Cement Division, including Managing
Director of Blue Circle Southern Cement Pty Limited.
This also encompassed the role of Chairman of the
Cement Industry Federation. He also had executive
responsibility for Boral’s expanding Asian construction
materials businesses.
Mr Jobe was previously Managing Director of Stegbar
Pty Limited from 1989 to 1994.
Directorships of other listed companies held in last
3 years before end of the Financial Year: None
Kingdom and South Africa.
Directorships of other listed companies held in last
3 years before end of the Financial Year: None
TONY DRAGICEVICH B. Comm A.C.A
Managing Director (Non-independent)
Appointed 15 April 2013
Mr Dragicevich joined Capral in January 2013 and became
the Managing Director and Chief Executive Officer on
15 April 2013. Mr Dragicevich is an experienced CEO
and business leader who has been involved in the
improvement of a number of businesses, having previously
served as Managing Director of the Wattyl Group,
and as Chief Executive of GWA Bathroom and Fittings,
Managing Director of the Red Paper Group and General
Manager of Tasman Insulation.
Directorships of other listed companies held in last
3 years before end of the Financial Year: None
12 | Annual Report 2022 Board of Directors
GRAEME PETTIGREW FIPA, FAIM, FAICD
MARK WHITE B. Comm, M. Comm, CA, GAICD
Non-executive director (Independent)
Non-executive director (Independent)
Appointed 18 June 2010
Appointed 1 September 2021
• Chairman of the Remuneration & Nomination
• Member of the Audit & Risk Committee from
Committee Member of the Audit & Risk Committee
1 September 2021
Mr Pettigrew has held chief executive roles at CSR
Building Products Pty Ltd and Chubb Australia Ltd and he
• Member of the Remuneration & Nomination
Committee from 1 September 2021.
retired as a non-executive director of Adelaide Brighton
Mr White has extensive experience in the aluminium and
Ltd. He has relevant experience in the construction and
building materials sectors. He is currently the General
building materials industry, as well as manufacturing and
Manager of Gove Aluminium Finance Limited. He also has
distribution businesses.
Directorships of other listed companies held in last
3 years before end of the Financial Year: None
KATHERINE OSTIN B. Comm, GAICD, F FIN, CA
Non-executive director (Independent)
Appointed 17 June 2020
• Chairman of the Audit & Risk Committee.
more than 10 years’ experience as an Executive Director
on the Board of Tomago aluminium smelter and has held
a number of senior positions in CSR Limited’s building
products businesses and has over 20 years of experience
across a number of manufacturing industries.
Directorships of other listed companies held in last
3 years before end of the Financial Year: None
BRYAN TISHER B. Eng, MBA
• Member of the Remuneration & Nomination Committee
Non-executive director (Independent)
Ms Ostin is a Chartered Accountant and an experienced
Company Director with significant experience in finance
and accounting, audit, risk, governance, strategy and
business development. She is currently a Non-Executive
Appointed 24 February 2022
• Member of the Audit & Risk Committee
• Member of the Remuneration & Nomination Committee.
Director of a diverse portfolio of both listed and non-listed
Mr Tisher has extensive experience in the resources,
companies and is Chair of the respective Audit & Risk
building materials and electrical products sectors.
Committees. She has also previously served as a
He is currently the Chief Executive Officer of Legend
Non-Executive Director of several not-for-profit entities.
Corporation, an Australian leader in industrial and
Ms Ostin was a senior Partner in Audit Assurance & Risk
electrical products and previously held senior positions
Consulting with KPMG, holding various leadership roles
at Orica, Boral and Rio Tinto.
over her 12 years as a Partner from 2005 to 2017.
In her 24 years with KPMG she has worked across a broad
number of sectors in Australia, Asia, the US and the UK.
Mr Tisher was the Managing Director of Orica Asia
responsible for manufacturing and distribution operations
covering 14 countries, and the Divisional Managing
Directorships of other listed companies held in last
Director of Boral Building Products responsible for the
3 years before end of the Financial Year:
Plasterboard Australia, Timber, Bricks, Roofing, Masonry
• Non-executive director of Swift Media Ltd: 1 October
2019 to 19 November 2021.
• Non-executive director of Dusk Group Ltd:
16 September 2020 to date of this report.
• Non-executive director of 3P Learning Ltd: 6 August
2021 to date of this report.
and Windows business units. He has had extensive board
experience as an Executive Chairman for six joint ventures
in Asia and the Boral Carter Holt Harvey Softwood
Manufacturing Joint Venture at Oberon, and, as a
Non-Executive Director at Sustainable Timber Tasmania
and Cape York Enterprises.
Directorships of other listed companies held in last
3 years before end of the Financial Year: None
Annual Report 2022 Board of Directors | 13
Capral products are the first choice
for Unique Metal, who emphasise
that Capral’s product range,
technical knowledge and service
stand out.
“We have worked closely with Capral for
many years – almost since we have been
in business. We’ve got a great
relationship. Capral offers solutions,
good pricing, and reliability. We get our
product when they say we will get it,
and they keep us informed of any issues.”
Paul Figliomeni, Managing Director,
Unique Metal Laser
14 | Annual Report 2022 Board of Directors
Since the business started, sourcing aluminium
locally has been a priority for the WillPlay team,
which works closely with Capral Aluminium.
Aluminium is used extensively throughout the WillPlay
range and custom-designed solutions for three
fundamental reasons: “One, it’s lightweight, but two,
it’s also strong. And thirdly, it is sustainable. Its weight
saves on freight around Australia, and it survives our
climate from the ocean to the deserts. And importantly,
aluminium can be recycled at the end of a product’s life.
Our playgrounds are 100 per cent recyclable, so
everything that gets taken off one of our playgrounds
can be taken to a recycling facility. It sets us apart.”
Jared Silcox, Design Manager, WillPlay
Annual Report 2022 Sustainability Report | 15
Sustainability Report
A SUSTAINABLE FUTURE
During 2022 Capral continued its Sustainability journey
with a concerted focus on reducing Scope 2 emissions
working towards a position of net zero emissions by 2050.
Our Sustainability Committee creates a companywide
emphasis on crucial sustainability strategies.
The coordination of sustainability initiatives is now
embedded within Capral’s Integrated Management System
(IMS), ensuring the consistent management of
environmental compliance and safety throughout all
our operations.
The global community has stated the need to reach net
zero global CO2 emissions by mid-century, and Capral
recognizes that environmental and social sustainability
must be a priority for our organisation.
Capral will continue to act wisely to care for the
environment and broader society while working in the best
During 2022 Capral undertook two significant supply chain
initiatives in support of our sustainability goals. In March,
Capral signed an agreement with Tomago Aluminium,
Australia’s largest aluminium smelter, to supply
550 tonnes of production scrap annually for remelting.
This industry-leading arrangement was the first of its kind
in Australia, paving the way toward access to low-carbon
aluminium for Australian manufacturers.
In November Capral introduced LocAl®, a lower-carbon
primary aluminium option available across Capral’s locally
manufactured extruded aluminium products. This provides
the Australian manufacturing sector access to cleaner,
greener, more sustainable aluminium products.
The LocAl® offer includes two lower carbon aluminium
options: LocAl® Green with carbon emissions of
8kg CO2e/kg Al* and LocAl® Super Green at 4kg CO2e/kg
Al* – amongst the lowest carbon aluminium available
globally and up to 75% lower than global average CO2e
interests of our stakeholders and customers.
emissions for primary aluminium.
We are committed to our Sustainability Roadmap and the
adaption of transformational sustainability projects which
will reduce our carbon footprint.
As a significant aluminium supplier in Australia, our buying
strategies and corporate activities reflect Capral’s goal to
work towards sustainability best practice.
Underpinning these responsible and transformational
procurement initiatives is Capral’s decision to join the
Aluminium Stewardship Initiative (ASI), a global standard
setting and certification body. ASI brings together
producers, users, and stakeholders in the aluminium value
chain with a commitment to maximising the contribution
of aluminium to a sustainable society. ASI members aim
to work together to foster responsible production,
sourcing, and stewardship of aluminium.
16 | Annual Report 2022 Sustainability Report
Capral supports the adoption of the United Nations (UN)
Sustainable Development Goals (SDGs) and emphasises
integrating sustainable principles into our operations.
We acknowledge that reducing our CO2 emissions in line
with the targets of the Paris Agreement and supporting
the UN SDGs will help to achieve our strategic goals and
improve business performance. Across our business, we
currently incorporate four SDGs into our company values
and daily activities.
OUR ROADMAP – ON A BETTER PATH
TO TOMORROW
SUSTANABILITY ROADMAP
THE ENVIRONMENT
In line with Capral’s commitment to the environment,
we will effectively manage our waste materials with the
circular vision of “reduce – reuse – repurpose” and
compliance with environmental standards.
Capral is committed to maintaining an Environment
Management System that incorporates requirements for
planning, implementation, and review based on a risk
management approach. All Capral manufacturing sites are
certified to ISO14001 Environmental Management.
We are committed to minimising adverse consequences
of new equipment and processes by assessing
environmental implications in the design, purchase, and
In 2022 Capral focussed its Sustainability Roadmap
commissioning phases. Throughout 2022 Capral
on the reduction of energy consumption, successfully
continued to make energy efficiency a priority in its capital
reducing demand on the Victorian power grid from our
plant upgrade considerations. Key energy saving initiatives
Campbellfield manufacturing plant with the
undertaken were:
commissioning of a 800 kilowatt solar panel installation.
Within the first six months, CO2 emissions saved were
222,500 kg, the equivalent of 4,300 planted trees.
• Renewable energy roof-top solar installed at
Campbellfield site self-generating 15% of its
energy needs
Further energy savings were made by replacing 400 high
•
Introduction of latest generation IE5 SynRM motors
bay lights with LEDs at the Bremer Park, Queensland
linked to variable speed drives VSDs at Penrith
manufacturing site, saving approximately 2000 kilowatts
manufacturing plant reducing power consumption
per day, the equivalent of one year’s average household
by 20%
electricity consumption.
2023 will see our Roadmap adopt an additional focus on
waste reduction and increased recycling activity in
continuing to achieve our goal of a Circular Economy.
• 400 high bay LED lighting replacement at Bremer Park
• Latest generation multi-zone electric billet heating
containers introduced at 5 of Capral’s extrusion
presses reducing power usage by 15%.
Annual Report 2022 Sustainability Report | 17
Aluminium Extrusion Emissions Intensity
Total Reportable Injury Frequency Rate
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A
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2
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1.0
0.8
0.6
0.4
0.2
0.0
R
F
I
R
T
20
15
10
5
0
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
2016
2017
2018
2019
2020
2020
2022
YEAR ENDED JUNE
HEALTH AND SAFETY
Capral has continued to invest significantly towards
enhancing its ability to manage its Health and Safety
requirements and align itself with industry best practice.
Capral’s Integrated Management System (IMS) underwent
a revitalisation to enhance its ability to systemise ESG and
develop accurate performance metrics.
Capral focused on educating its employees through
a new L&D programme which supports the practice of
Capral’s IMS compels all sites to comply with safety,
health, and environmental legislation under ISO 45001.
IMS also incorporates monitoring and improvement,
targeted at increasing employee lifespan and supporting
SDG goal #3 “good health and well-being”.
PEOPLE AND COMMUNITY
Capral employs around 1,100 people over 20 sites around
Australia with approximately half of our employees
covered by Enterprise Agreements.
understanding associated risks and the inherent controls
We champion diversity by aiming to build a workforce as
required. Site IMS assurance continued to be verified
through monthly compliance reviews. This approach has
demonstrated a profound impact on positively influencing
behaviour and identifying workplace inconsistencies
through the Capral network.
Operational leaders are equipped with fitness for work
management knowledge to ensure their team can perform
tasks safely and without incident. Employees are
encouraged to speak freely and voice their concerns.
diverse as the community we serve. Because the more
perspectives we have, the better decisions we make.
Our ability to make these decisions is underpinned by our
Code of Conduct and Vision and Values Programme:
• Safety First – Everyone is responsible. Injuries can be
prevented. All jobs can be done safely
• Customer Success – Customers determine our
success. Service and quality. Be responsive
This approach has reduced Capral’s reportable incidents,
• Play Fair – Be honest and respectful. Do the right thing
minimised injury severity and improved recovery.
by each other and the environment. Work as a team
This has resulted in significantly lower restricted and lost
hours. Capral’s IMS philosophy has reduced Capral’s total
reportable injury frequency rate (TRIFR) to 4.3, which is
well below the industry average of 8.3 for listed building
product manufacturers.
• Better Every Day – Continuous improvement.
Be innovative. Embrace change
• Own It – Be accountable. Feel empowered; Take pride
in your work. Act boldly
18 | Annual Report 2022 Sustainability Report
As a company our diverse perspective comes from many
LEARNING AND DEVELOPMENT
sources including; gender, race, age, nationality, sexual
orientation, culture, education, professional and life
experience. We constantly strive to foster an equitable
work culture that celebrates diversity, embraces inclusion,
amplifies belonging, and drives innovation.
Capral recognises the significant benefit of investing in our
people being crucial to future success. Capral’s L&D
programme was enhanced by expanding employee
access to professional development opportunities.
Capral has partnered with multiple organisations to offer
People are the epicentre of everything we do; from our
multifaceted, continuous professional development (CPD)
employees to those who touch our business as
programmes aligned to essential organisational and
customers, and to the communities we call home.
personal goals. Through our L&D programme, employees
We all share the vision of a better future.
RECRUITMENT INITIATIVES
can expand their knowledge and receive additional
support to ensure their skills remain up-to-date and
relevant to Capral’s business requirements.
Capral’s recruitment initiatives developed throughout 2022
as staff turnover increased post-Covid. Skilled migration
played a pivotal role in increasing our depth of knowledge
COMMUNITY SUPPORT AND
ASSOCIATION
and skills talent. Capral established relationships with
Capral continues to work with community organisations
a number of international applicants from a range of
making positive contributions across a broad spectrum
countries and cultures, resulting in three overseas
of areas. Company-wide initiatives included awareness
applicants successfully migrating to Australia for
campaigns for mental health through R U Ok? Day,
specialist roles.
domestic violence through White Ribbon Day, and men’s
Helping the Homeless with housing,
health and living
health through Tievember, our version of Movember.
Through continued work on our recruitment programme,
it is our goal to improve on existing gender targets and
L E A R N M O R E
increase female representation within Capral’s leadership
All initiatives were extremely well received with record
employee uptake for our Tievember campaign.
positions and in non-traditional blue collar and trade roles.
Capral provides support to a number of charity
organisations including:
Goodna Street Life
Goodna Street Life is an independent charity providing housing and support for the homeless
and vulnerable people in our community. Established in 2015 by a group of dedicated locals
hoping to make a difference in our community, the group sought to establish a local shelter for
the homeless, and people forced onto the streets.
Our charity has grown to include our Op Shop, accreditation as a Residential Service, GSL
Housing services, free counselling and drug and alcohol rehabilitation support, Work programs
for clients, Community Food Bank and more.
We provide crisis and long term accommodation through our specialist homeless services at
Helens Haven.
Helens Haven Motel provides crisis accommodation in a supported community environment,
providing specialist care and support to assist clients to overcome barriers, and transition into
long term accommodation.
As a non-government funded, independent charity we rely on fundraising and donations to
provide our services. You can support the work we do in the community by making a donation,
purchasing goods from our Op Shop or supporting our fundraisers.
F U N D R A I S E R S
O P S H O P
F O O D B A N K
D O N A T E
Annual Report 2022 Sustainability Report | 19
Capral has been Louvreclad’s supply partner for more than 20 years;
the two businesses are neighbours, providing extra convenience to
deliveries and collaboration on extrusion developments.
“Working on bespoke projects where we need to create something new, it’s easy
to share drawings with Capral’s design team, and they quickly let us know if our
designs will work and advise on lead times. It works very well for our business;
We require very high-quality aluminium because our products are used on
building facades. Capral packages our extrusions very carefully in stillages to
avoid any damage.
Uddhava Sharplin, Design Consultant, Louvreclad
20 | Annual Report 2022 Directors’ Report
Directors’ Report
Your directors present their report on the consolidated entity consisting of Capral Limited (Capral ) and the entities
it controlled at the end of, or during, the financial year ended 31 December 2022 (Financial Year ).
DIRECTORS
The following persons were directors of Capral except as indicated below:
Name
Period Office Held
R. L. Wood-Ward
6 November 2008 – Date of this report
A. M. Dragicevich
15 April 2013 – Date of this report
P. J. Jobe
K. Ostin
24 April 2009 – 27 April 2022
17 June 2020 – Date of this report
G. F. Pettigrew
18 June 2010 – Date of this report
M. White
B. Tisher
1 September 2021 – Date of this report
24 February 2022 – Date of this report
Details of directors, their qualifications, experience, special
DIVIDENDS
responsibilities (including committee memberships) and
directorships of other listed companies held in the last
three years before end of the Financial Year are set out
on pages 11 and 12.
PRINCIPAL ACTIVITIES
During the Financial Year, the principal continuing
activities of the consolidated entity consisted of the
manufacturing, marketing and distribution of fabricated
and semi-fabricated aluminium related products.
The Directors recommend that a final dividend of 50 cents
per ordinary share (fully franked) be declared. The record
date for the final ordinary dividend will be 3 March 2023,
with payment being made on 24 March 2023. Capral’s
Dividend Reinvestment Plan (DRP) will not be active for
this dividend. A final dividend of 50 cents per ordinary
share (fully franked) was paid in March 2022 in respect
of the 2021 financial year and an interim dividend of
20 cents per ordinary share (fully franked) was paid on
15 September 2022 in respect of the 2022 financial year,
no other dividends or distributions have been paid during
the Financial Year.
Annual Report 2022 Directors’ Report | 21
REVIEW OF OPERATIONS AND
FINANCIAL POSITION
COMPANY SECRETARY
Ms K Bradley-Ware – Joint Company Secretary,
A review of operations and financial position of the
B Comm, CPA, LLB
consolidated entity are referred to in the Managing
Ms Bradley-Ware has over 20 years of experience as a
Director’s Operations and Financial Review on
Company Secretary and CFO. Ms Bradley-Ware is an
pages 7 to 10.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs
of the consolidated entity during the year.
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
No matter or circumstance other than those disclosed in
Note 34 has arisen since the end of the Financial Year that
has significantly affected, or may significantly affect the
consolidated entity’s operations, the results of those
operations or the consolidated entity’s state of affairs in
future financial years.
LIKELY DEVELOPMENTS, BUSINESS
STRATEGIES, PROSPECTS AND RISKS
employee of Company Matters Pty Ltd, a company
secretarial service provider. Prior to joining Company
Matters, Ms Bradley-Ware was a Company Secretary and
Chief Financial Officer at ASX listed Pan Pacific Petroleum
Limited (ASX: PPP) and prior to that, held various roles in
accounting across a variety of different industries
including credit reporting, telecommunications and media.
Ms Bradley-Ware has provided support to a large number
of ASX companies including Elixinol Global Limited
(ASX: EXL), Energy Action Limited (ASX: EAX),
People Infrastructure Ltd (ASX: PPE), as well as various
Infrastructure Joint Ventures and Private Companies.
Ms Bradley-Ware was appointed as a Company Secretary
on 11 December 2020.
Mr T Campbell – Chief Financial Officer and Joint
Company Secretary, B.Com (Hons), CA
Mr Campbell was appointed Chief Financial Officer on
Information on likely developments, business strategies,
1 June 2011.
prospects and risks are detailed in the Managing Director’s
Operations and Financial Review on pages 7 to 10 and the
Sustainability Report on pages 15 to 19. Whilst Capral
continues to meet its continuous disclosure obligations,
this report omits information where it would be likely to
result in unreasonable prejudice to Capral. This includes
information that is commercially sensitive, is confidential
Mr Campbell is a member of the Australia and
New Zealand Institute of Chartered Accountants.
Prior to joining Capral, Mr Campbell held various executive
positions at UXC, Macsteel and The South African
Breweries.
or could provide a third party with a commercial
Mr Campbell was appointed as a Company Secretary
advantage (such as internal budgets and forecasts).
on 8 March 2019.
OTHER INFORMATION FOR MEMBERS
TO MAKE AN INFORMED ASSESSMENT
Other than information set out in this report, there is no
information that members would reasonably require to
make an informed assessment of the operations, financial
position, business strategies and prospects for future
financial years of the consolidated entity.
22 | Annual Report 2022 Directors’ Report
DIRECTORS’ MEETINGS
The numbers of directors’ meetings (including meetings of committees) held, and the number of meetings attended,
by each director during the Financial Year, are as follows:
Board
Risk Committee
Nomination Committee
Audit &
Remuneration &
Director
Held
Attended
Held
Attended
Held
Attended
R.L. Wood-Ward
A.M. Dragicevich
P.J. Jobe
K. Ostin
G.F. Pettigrew
M. White
B. Tisher
8
8
2
8
8
8
8
7
8
2
8
8
8
8
3
3
1
3
3
3
3
3
31
1
3
3
3
3
2
2
1
2
2
2
1
2
21
1
2
2
2
1
1 Attended meeting(s) in an ex-officio capacity
DIRECTORS’ INTERESTS AND BENEFITS
Ordinary Shares
Details of holdings of ordinary shares in Capral for the directors (including former directors who held office during the
Financial Year) at the beginning and end of the Financial Year and at the date of this report are as follows:
Name
Position
Ordinary shares fully paid in the Company
Balance at
1.1.2022
Balance at
Balance at date
31.12.2022
of this report
R.L .Wood-Ward
Director and Chairman of the Board
–
A.M. Dragicevich
Managing Director
P.J. Jobe
K. Ostin
G.F. Pettigrew
M. White
B. Tisher
Director
Director
Director
Director
Director
444,029
270,016
–
–
–
–
–
546,0411
270,016
–
–
–
–
–
546,041
270,016
–
–
–
–
1 Acquired 23,682 as part of 2021 STI programme on 2 March 2022. Allotted 78,330 as vesting of 2019 LTI rights on 7 March 2022.
In addition to the interests shown above, indirect interests in Capral shares held by the Managing Director, Mr. Dragicevich
Annual Report 2022 Directors’ Report | 23
are as follows:
Mr A. M. Dragicevich
Nature of other interests
Balance at 1.1.20221
Balance at 31.12.2022
Balance at date of this report
Performance rights
267,300
238,0002
238,000
1 Shown as post 3 November 2020 share consolidation quantity
2 Nil performance rights lapsed on 1 March 2022; 78,330 performance rights vested on 1 March 2022 and 49,000 performance rights
were issued on 27 April 2022
Unissued shares or interests under option
At the date of this report, there are 722,350 (2021: 754,310) unissued shares or interests under option. Refer to
sections 1 to 3 of the Remuneration Report and Note 38.
HSP’s supply partnership with Capral has helped them
on their journey to global leadership.
“In creating world-firsts, we can’t use anything off the shelf –
our products must stand out for their functionality and looks.
Everything we design is specific to a particular product and Capral
accommodates our needs and offers quality, reliability, and quantity.
“There are a lot of synergies between us – they are a high-quality
manufacturer that believes in manufacturing in Australia.”
Massih Aimaq, Sales director, HSP 4X4 Accessories
24 | Annual Report 2022 Directors’ Report
The Moore Reef Pontoon was designed for
specific needs, making it invaluable to have
a supplier like Capral working closely with
the engineers.
“This 250-tonne structure is built to survive 30 years
on the reef, it needs to endure cyclones and extreme
weather; Marine Survey requirements called for the
aluminium plate to have ‘DNV’ test certificates.
Fortunately, Capral supplied English Engineering
with the certification required for all aluminium
used on the build. Access to DNV-certified material
locally is essential for the Australian marine sector.”
Susan Plath, Marketing and Development
Manager, English Engineering
Annual Report 2022 Remuneration Report (Audited) | 25
Remuneration Report (Audited)
This report sets out Capral’s remuneration of its directors and executives. It also details the actual remuneration of its
key management personnel (including the directors) during the Financial Year.
SECTION 1: THE REMUNERATION
FRAMEWORK
( b ) Role of Remuneration & Nomination
Committee
( a ) Key Principles
Capral’s remuneration framework and practices are based
on the principles that remuneration is performance driven,
aligns with shareholder interests, provides market
competitive remuneration that attracts qualified and
experienced candidates, and retains and motivates
employees.
The variable components of remuneration (short and long
term) are driven by challenging targets focused on both
external and internal measures of financial and
non-financial performance. Details of performances
measures are set out in sections 1(g) and 1(h) below.
Executive remuneration is aligned with shareholder
interests via an emphasis on variable (incentive)
remuneration, the award of which is linked to performance
benchmarks that support business strategies and future
success. A significant proportion of executive
remuneration is at-risk. Details of the link between
performance and remuneration is set out in section 4.
The Remuneration & Nomination Committee is
responsible for reviewing and making recommendations
to the Board of Directors (the Board) on remuneration
policies for Capral including, in particular, those governing
the directors (including the Managing Director) and
executive managers. The Committee operates in
accordance with its Charter.
Remuneration of the Managing Director and certain
executive managers is reviewed at least annually by the
Remuneration & Nomination Committee and
recommendations are put to the Board for its approval.
Short- and long-term incentives are linked to performance
criteria. The Board can exercise its discretion in relation to
approving bonuses and incentives. Changes must be
justified by reference to measurable performance criteria
and having regard to Capral’s overall financial performance
and other special circumstances.
The Remuneration & Nomination Committee may seek
independent advice as appropriate in setting the structure
and levels of remuneration based on the principle that the
elements of remuneration should be set at an appropriate
level having regard to market practice for roles of similar
scope and skill. Godfrey Remuneration Group Pty Ltd
(GRG), independent remuneration consultants, was
engaged during December 2021 to provide guidance
regarding structure and level of remuneration of
Non-Executive Directors and Key Executives.
26 | Annual Report 2022 Remuneration Report (Audited)
( c ) Performance Planning and Review
Remuneration of non-executive directors is allocated out
Capral has a Performance Planning and Review (PPR)
process to evaluate and discuss performance and
development plans at least annually with salaried
employees. This PPR process covers:
of the pool of funds, the limit of which is approved by
shareholders in general meeting; the fee pool limit is
currently $650,000 per annum. Each non-executive
director is entitled to the payment of an annual fee in cash
and superannuation contributions for their services.
• An agreement of objectives for the year ahead and the
Additional fees are not paid for sitting on Board
setting of key performance measures against which
committees; however, the extra responsibility of the
the achievement of those objectives will be assessed.
Chairman of the Board and committees is recognised by
These are set by reference to financial targets and key
the payment of a higher fee. The fees for the non-executive
business strategies.
directors were reviewed by GRG as detailed above and
• A review of performance against the previously agreed
adjusted during the Financial Year to be in line to those
objectives for the period under review.
• Employee comment and feedback.
paid at comparable listed companies. Non-executive
directors do not receive any shares, options or other
• Short- and long-term training and development needs
securities as part of their remuneration however they are
and career aspirations.
The PPR process ensures that there is better
understanding of Capral’s objectives thereby increasing
the likelihood of their achievement. It also enables
eligible to participate in Capral’s equity incentive plans,
although none currently participate. There are no schemes
for retirement benefits (other than statutory
superannuation payments).
managers to evaluate and develop employee skills and
( e ) Senior Management Remuneration
performance and identify future development needs.
( d ) Non-executive Directors
The structure of Capral’s non-executive director
remuneration is distinct from that applicable to the
Managing Director and other senior executives.
The remuneration policy for the Managing Director and
executives seeks to attract and retain people with the
required capabilities to lead Capral in the achievement of
business objectives and focus on delivering financial and
non-financial measures.
Remuneration is reviewed annually, and approved changes
Remuneration of non-executive directors is established
at a level that enables Capral to attract and retain high
applied from 1 March.
quality directors at a reasonable cost. Remuneration of
The Remuneration & Nomination Committee reviews the
non-executive directors and their terms of office are
remuneration arrangements of the Managing Director, his
governed by Capral’s constitution and not by contract.
direct reports and certain other executive managers.
The Managing Director reviews the remuneration
arrangements of the other members of senior
management, based on the recommendations of his
direct reports.
Annual Report 2022 Remuneration Report (Audited) | 27
For the Managing Director and other senior management,
( g ) Short Term Incentives
remuneration consists of a fixed annual salary and
superannuation (refer to section 1(f) below) plus at-risk
components comprised of a short-term incentive plan
(STIP) (refer to section 1(g) below) and a long term
incentive plan (LTIP) (refer to section 1(h) below).
The proportions of fixed and at-risk remuneration are
established for the Managing Director and other senior
management relative to their position in Capral.
Capral’s short-term incentive schemes are designed to
encourage participants to assist Capral in achieving
continuous improvement by aligning their interests with
those of Capral and its stakeholders and rewarding them
when key performance measures are achieved.
For the Financial Year, there were 3 short term incentive
programmes:
As a general guide, at-risk remuneration is 50% for the
( 1 ) Short Term Incentive Plan (STIP): The Managing
Managing Director, 25–30% for executive management
Director and senior employees have the opportunity
and 10%–20% for other senior managers, for the
to earn a cash and deferred equity incentive, based
achievement of ‘target’ goals.
( f ) Fixed remuneration
on a specified percentage of TEC dependent on each
individual’s level of responsibility. The actual incentive
earned is based on the achievement of financial and
The level of the total employment cost (being base salary
non-financial objectives.
( 2 ) Bonus scheme: other salaried employees can earn
fixed payments, as approved by the Managing
Director, for achieving key performance measures set
by their managers and outlined in the employee’s
individual PPR.
( 3 ) Sales incentives: Sales employees participate in
quarterly sales incentive programmes in relation to
revenue, gross margin, and debtor days targets.
STIP is weighted 70% to financial objectives and 30%
non-financial objectives. A summary of STIP is set out in
the table below:
plus superannuation) (TEC) is determined having regard to
job responsibilities, skills, experience, and performance.
Salaries are reviewed annually, with any changes applied
from 1 March. Fixed remuneration of executives is
generally targeted at market median.
The fixed remuneration of the Managing Director is
determined by the Board having regard to other ASX listed
companies in building product related industries, his
particular skills and previous remuneration, experience
and capability to lead Capral in delivering financial targets
and executing key business strategies. It forms part of his
executive employment contract and is subject to
annual review.
The Board has reviewed generally available market
information regarding fixed remuneration of the key
management personnel with comparable revenues and
market capitalisation. The fixed remuneration of Capral’s
key management personnel is generally in line with
this group.
28 | Annual Report 2022 Remuneration Report (Audited)
Frequency
Awards determined annually with payment made in the March following the end of the
performance year.
Financial Measures
• Trading EBITDA for Capral and (for relevant General/Divisional Managers) Business Units
(30%). Key financial threshold measure as reflects underlying earnings after excluding the
impact of external economic factors such as the volatility of global aluminium prices and the
unrealised impact of foreign exchange rate fluctuations.
• Net Profit After Tax for Capral (15%). Aligned to ability to pay dividends.
• Free Cash Flow for Capral (15%). Selected to ensure effectiveness of cash management.
• % Working Capital to Annualised Sales for Capral and (for relevant General/Divisional
Managers) Business Units (10%). Selected to ensure effectiveness of capital management.
Non-financial
Specific individual objectives are set to reflect measurable and numeric (where possible)
Measures
strategic initiatives and profit and safety improvement objectives. The key individual objectives
include performance to customers, sales targets/growth, productivity and operational
improvements, key projects and cost improvements. The weightings are generally 5% however
may be higher or lower depending on importance to company performance.
Assessment of
Performance against financial measures is assessed after the end of each financial year based
performance against
on Capral’s financial results. The performance against non-financial measures is assessed as
measures
part of the PPR process.
The Managing Director, in consultation with senior managers, is responsible for recommending
to the Board the amount of STIP, if any, to be paid.
Payments are subject to the achievement of applicable Capral, Divisional or Regional minimum
annual Trading EBITDA targets. Stretch payments are not made where target financial metrics
are not met.
Discretionary
The Board retains absolute discretion regarding payments having regard to Capral’s overall
override
financial position and other special circumstances that have arisen during the year
(i.e. normalisation or clawback). The intent however is to minimise the exercise of discretionary
adjustments to the planned outcomes set at the start of the year. Material adjustments would
be disclosed.
Service condition
The Managing Director is eligible to receive a pro-rata payment where his employment is
terminated other than for cause. Other employees who leave Capral part way through a
performance period are not eligible for a payment for that period.
Clawback of awards
In the event of fraud, misstatement or misrepresentation of the financials, the Board may
exercise its discretion to withhold some or all of a payment before it is made or recover some or
all of payments already made.
Deferral
Any ‘Stretch’ STIP payments (after tax) to the Managing Director and Executive Team is satisfied
by Capral Shares and held in escrow for 3 years. These shares can be issued or acquired on
market (priced at the 12-month Volume Weighted Average Price (VWAP) as at the end of the
performance period) as determined by the Board. There is no deferred cash / equity component
for other STIP participants. The Board introduced deferred equity in 2018 to further strengthen
alignment of Capral’s executive managers with shareholders.
Plan review
The STIP design is reviewed at least annually by the Remuneration & Nomination Committee
and approved by the Board. The Managing Director, in consultation with senior managers, is
responsible for recommending to the Board the STIP financial targets. The non-financial
objectives are approved by the Managing Director. The Managing Director’s non-financial targets
are established and approved by the Board.
Annual Report 2022 Remuneration Report (Audited) | 29
The Managing Director and key management personnel
( h ) Long Term Incentives
are eligible for the following awards of STIP relative
to TEC:
% of TEC
Position
Minimum Target
Stretch
Managing Director
25%
Chief Financial Officer
12.5%
50%
25%
100%
50%
Capral’s long-term incentive plan (LTIP) was designed to
strengthen the alignment of the interests of senior
managers with shareholders and support a culture of
share ownership and shareholder wealth. It also aims to
provide competitive remuneration for the retention of
specifically targeted members of senior management.
The Managing Director, Mr Dragicevich, was granted
102,670 performance rights following shareholder
Where objectives can be financially measured, ‘Minimum’
approval in April 2020 and 86,300 performance rights
is generally set around 15% below Board approved Budget.
following shareholder approval in April 2021. During the
‘Target’ is generally set around Board approved Budget
and ‘Stretch’ is generally set 30% above Budget.
Financial Year, an additional 49,000 performance rights
were granted to Mr Dragicevich following shareholder
The Board has reviewed the guidance provided through the
approval in April 2022.
GRG remuneration benchmarking report regarding short
On the recommendation of the Managing Director to the
term incentive schemes of the key management personnel
Remuneration & Nomination Committee, selected senior
(including the Managing Director) for listed companies
executives participate in LTIP.
with comparable revenues and market capitalisation. The
Board considers that Capral’s short-term incentive scheme
is generally in line with this group.
A summary of LTIP for the Managing Director and other
senior executives is set out below:
Frequency
Awards determined annually.
Type of award
Performance rights subject to service requirements and vesting criteria. If the conditions are
met, shares will be issued around the vesting date.
Amount of award
The Managing Director is eligible to receive additional annual issues of up to 50% of the value
of TEC, subject to shareholder approval.
The value of individual awards for all other participating senior executives is generally less than
30% of TEC.
As a matter of practice, the aggregate amount of each annual award to all Executives is about
1.5% of issued capital and the number of rights awarded is based on the 12-month Volume
Weighted Average Price (VWAP) as at the start of the performance period.
Performance period &
3 years with 31 December testing dates.
vesting dates
2020 award: vesting date of 1 March 2023.
2021 award: vesting date of 1 March 2024.
2022 award: vesting date of 1 March 2025.
30 | Annual Report 2022 Remuneration Report (Audited)
Performance
conditions
Performance rights granted under LTIP are subject to the participant remaining employed by
Capral at the vesting date and the achievement of the following performance conditions:
• 50% of rights are subject to an EPS performance condition. The actual EPS performance is
measured over a 3-year period, must meet, in aggregate, the 3 annual targets combined.
The EPS condition is calculated each year as follows: Net Profit After Tax Target as
specified by the Board for that year (adjusted for any extraordinary items approved by the
Board) divided by weighted average number of securities on issue during the year.
The Net Profit After Tax Target used for this condition is set at least at minimum Budget
level. The Board may adjust EPS to normalise results and exclude the effects of material
business acquisitions/ divestments and certain one-off costs; any material adjustments
would be disclosed. The number of rights that may vest is set out in Table B below.
• 50% of rights are subject to a TSR performance condition as against the entities with
ordinary shares and units (as the case may be) included in the S&P/ASX All Ordinaries
Index as at 1 January in the year of grant but excluding those companies who are classified
in the Global Industry Classification Standard sector number 40. The number of rights
which may vest is set out in Table A below.
Refer to the explanation above (LTIP) regarding the setting of the EPS condition and the use
of EPS and TSR tests.
Assessment of
Performance against the EPS and TSR conditions are assessed at the end of the 3-year period
performance against
(31 December testing date).
measures
There is no re-testing of EPS or TSR conditions. Vested rights convert on the relevant vesting
date a one-for-one basis to ordinary shares. Unvested rights lapse.
Treatment of awards
If employment ceases all unvested rights will immediately lapse. However, if the cessation
on cessation of
relates to the redundancy or permanent disability / death of the employee or other reason
employment
determined by the Board then the Board has absolute discretion to determine that some or all
of the rights vest.
Treatment of awards
The Board has discretion to allow awards to vest on a change of control. In exercising this
on change of control
discretion, the Board is not bound to award all shares.
Dividend/ participation
There is no entitlement to dividends on performance rights during the vesting period or to
rights
participate in respect of issues of shares to shareholders.
Clawback of awards
In the event of fraud, misstatement or misrepresentation of the financials, the Board may
exercise its discretion to forfeit some or all of the award prior to the issue of shares or recover
some or all of the award already made.
Plan review
The LTIP design is reviewed at least annually by the Remuneration & Nomination Committee
and approved by the Board. The Managing Director makes recommendations to the
Remuneration & Nomination Committee regarding the proposed LTIP award participants and
the amount of the entitlements.
Vesting of rights subject to the TSR and EPS performance
conditions at each testing date is determined in
accordance with Tables A and B respectively below:
Table A
Percentile of TSR
% Rights Vesting
< 50th
50th
None
50
> 50th and < 75th
Between 50 and 100 (pro rata)
> 75th
100
Table B
EPS Target
% Rights Vesting
> 5% below target
None
5% below target
50
< 5% below target to
Between 50 and 100 (pro rata)
10% above target
> 10% above target
100
The Board has reviewed the guidance provided through
the GRG remuneration benchmarking report regarding
long term incentive schemes of the key management
personnel (including the Managing Director) for listed
companies with comparable revenues and market
capitalisation. The Board considers that Capral’s long-term
Annual Report 2022 Remuneration Report (Audited) | 31
SECTION 2: ACTUAL REMUNERATION
OF KEY MANAGEMENT PERSONNEL
During the Financial Year there were a number of
remuneration outcomes. The expensed remuneration is
set out in detail in the remuneration table below however
in summary the key outcomes were as follows:
( a ) Remuneration
General pay increases were implemented for executives.
Total expensed remuneration for the key management
personnel (including the directors) increased on average
by 2% as compared to the prior year.
( b ) STIP
STIP payments in respect of the 2022 year are lower than
the prior year.
( c ) LTIP
49,000 performance rights were granted to the Managing
Director in April 2022 following shareholder approval
(2021: 86,300) and 139,000 rights were granted under
the 2022 LTIP award to executives in March 2022
(2021: 164,700).
Performance rights granted to the Managing Director and
executives under LTIP awards were tested after the year
end with the outcomes detailed in section 3 below.
For the financial year ending 31 December 2023, Capral
intends to:
incentive scheme is generally in line with this group.
•
increase the fixed remuneration of the Managing
( i ) Anti-Hedging Policy
Director and executives by an average of 3%; and
• grant further performance rights under the LTIP to the
Capral’s personnel are not permitted to enter into
Managing Director (subject to shareholder approval)
transactions with securities (or any derivative thereof)
and selected senior managers.
which limit the economic risk of any unvested
entitlements awarded under any Capral equity-based
remuneration scheme currently in operation or which will
( d ) Remuneration Table – key management
personnel
be offered by Capral in the future. As part of Capral’s due
The following table sets out the remuneration of the key
diligence undertaken at the time of the financial results,
management personnel (including the directors) during
participants in any Capral equity plan are required to
the Financial Year and the 2021 financial year.
confirm that they have not entered into any such
prohibited transactions.
The key management personnel of the consolidated entity
are the non-executive directors, Managing Director and
Chief Financial Officer/Company Secretary. These people
have the authority and responsibility for planning, directing
and controlling the day-to-day activities of Capral.
32 | Annual Report 2022 Remuneration Report (Audited)
Short-term employee benefits
benefits
benefits
benefits2
Share-based payments
Total
related
Post- employment
long-term
Termination
Other
Total
performance
Salary and fees
Bonus1
benefits
Superannuation5
Non-monetary
Deferred Equity1
Rights3
Performance
Name
Directors
Year
Title
$
$
$
$
A.M. Dragicevich
2022
Managing Director
700,428
364,650
2021
Managing Director
R.L. Wood-Ward
2022
Chairman
2021
Chairman
P.J. Jobe
2022
Non-executive director
2021
Non-executive director
K. Ostin
2022
Non-executive director
2021
Non-executive director
G.F. Pettigrew
2022
Non-executive director
2021
Non-executive director
M. White
2022
Non-executive director
2021
2022
Non-executive director4
Non-executive director6
2021
Non-executive director
B. Tisher
Executives
690,000
123,821
120,000
23,664
60,000
81,463
70,000
81,463
70,000
71,464
20,000
62,712
–
357,500
–
–
–
–
–
–
–
–
–
–
–
–
T. Campbell *
2022
CFO/ Co. Sec.
405,218
108,375
2021
CFO/Co. Sec.
401,000
106,250
Total 2022
Total 2021
1,550,233
473,025
1,431,000
463,750
1 All salaries, fees and bonus amounts are on an accrual basis.
2 Termination benefits include leave accrued and payments made in lieu of notice at the end of employment with Capral.
3 All LTIP performance rights listed are securities that have not yet vested. In relation to the performance rights of the key management
personnel refer to Note 38 of the financial statements.
4 Mr White was appointed as a director on 1 September 2021.
5 Superannuation guarantee percentage has been changed from 10.0% to 10.5% from 1 July 2022.
6 Mr Tisher was appointed as a director on 24 February 2022.
* Capral’s key management personnel (other than directors).
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
53,050
323,079
1,468,309
332,400
192,535
1,599,085
$
–
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
–
$
136,518
131,703
26,522
65,852
89,821
76,827
89,821
76,827
78,796
22,000
69,170
–
14,625
98,250
67,675
97,966
65,847
653,666
696,328
421,045
2,612,623
430,650
258,382
2,668,622
%
50
55
–
–
–
–
–
–
–
–
–
–
–
–
34
39
27,102
26,650
12,697
11,703
2,858
5,852
8,358
6,827
8,358
6,827
7,332
2,000
6,458
–
27,482
24,981
100,645
84,840
Post- employment
benefits
Other
long-term
benefits
Termination
benefits2
Share-based payments
Total
related
Total
performance
Annual Report 2022 Remuneration Report (Audited) | 33
Salary and fees
Bonus1
benefits
Superannuation5
$
–
–
–
–
–
–
–
–
–
–
–
–
690,000
123,821
120,000
23,664
60,000
81,463
70,000
81,463
70,000
71,464
20,000
62,712
–
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
27,102
26,650
12,697
11,703
2,858
5,852
8,358
6,827
8,358
6,827
7,332
2,000
6,458
–
27,482
24,981
100,645
84,840
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Deferred Equity1
Performance
Rights3
$
$
$
53,050
323,079
1,468,309
332,400
192,535
1,599,085
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
136,518
131,703
26,522
65,852
89,821
76,827
89,821
76,827
78,796
22,000
69,170
–
14,625
98,250
67,675
97,966
65,847
653,666
696,328
421,045
2,612,623
430,650
258,382
2,668,622
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
%
50
55
–
–
–
–
–
–
–
–
–
–
–
–
34
39
Short-term employee benefits
Non-monetary
Name
Directors
Year
Title
$
A.M. Dragicevich
2022
Managing Director
700,428
364,650
2021
Managing Director
357,500
R.L. Wood-Ward
2022
Chairman
2021
Chairman
P.J. Jobe
2022
Non-executive director
2021
Non-executive director
K. Ostin
2022
Non-executive director
2021
Non-executive director
G.F. Pettigrew
2022
Non-executive director
2021
Non-executive director
M. White
2022
Non-executive director
2021
2022
Non-executive director4
Non-executive director6
2021
Non-executive director
B. Tisher
Executives
T. Campbell *
2022
CFO/ Co. Sec.
405,218
108,375
2021
CFO/Co. Sec.
401,000
106,250
Total 2022
Total 2021
1,550,233
473,025
1,431,000
463,750
1 All salaries, fees and bonus amounts are on an accrual basis.
2 Termination benefits include leave accrued and payments made in lieu of notice at the end of employment with Capral.
3 All LTIP performance rights listed are securities that have not yet vested. In relation to the performance rights of the key management
personnel refer to Note 38 of the financial statements.
4 Mr White was appointed as a director on 1 September 2021.
6 Mr Tisher was appointed as a director on 24 February 2022.
* Capral’s key management personnel (other than directors).
5 Superannuation guarantee percentage has been changed from 10.0% to 10.5% from 1 July 2022.
34 | Annual Report 2022 Remuneration Report (Audited)
SECTION 3: PERFORMANCE RIGHTS,
OPTIONS AND BONUSES PROVIDED AS
COMPENSATION
Performance rights – Managing Director
102,670 performance rights were granted to the Managing
Director in April 2020 following shareholder approval.
These rights have a vesting date of March 2023. The EPS
condition (51,335 rights) was tested as at 31 December
2022. Capral achieved the EPS condition and consequently
During the Financial Year and the financial year ended
51,335 rights will vest in March 2023. The TSR condition
31 December 2021, performance rights were granted as
(51,335 rights) was also tested as at 31 December 2022.
equity compensation benefits under the LTIP, to the
Capral’s relative TSR performance over the period from
Managing Director as disclosed as at balance date below.
January 2020 to December 2022 was in the 93rd
The performance rights were granted at no cost to him.
percentile and thus 100% of the rights subject to the TSR
49,000 performance rights were granted to the Managing
Director in April 2022 following shareholder approval.
These rights have a vesting date of March 2025.
86,300 performance rights were granted to the Managing
Director in April 2021 following shareholder approval.
These rights have a vesting date of March 2024.
condition will vest in March 2023. Consequently, a total of
102,670 rights will vest and convert into Capral shares on
a 1 for 1 basis as at 1 March 2023.
78,330 performance rights were granted to the Managing
Director in April 2019 following shareholder approval.
None of 78,330 rights lapsed and a total of 78,330 rights
vested and converted into Capral shares on a 1 for 1 basis,
as at 1 March 2022.
Grant
Grant
Fair value per right
Test
Lapsed
Vested
Tranche
number
date
at grant date ($)
date
number
number
2022 Offer
A. Dragicevich
27/04/2022
EPS 50%
24,500
TSR 50%
24,500
$7.77
31/12/2024
$5.82
31/12/2024
Total 2022 Offer
49,000
2021 Offer
A. Dragicevich
28/04/2021
EPS 50%
43,150
TSR 50%
43,150
$6.43
31/12/2023
$5.17
31/12/2023
Total 2021 Offer
86,300
2020 Offer
A. Dragicevich
29/04/2020
EPS 50%
51,335
TSR 50%
51,335
$1.56
31/12/2022
$2.04
31/12/2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total 2020 Offer
102,670
2019 Offer
A. Dragicevich
16/04/2019
EPS 50%
39,165
TSR 50%
39,165
Total 2019 Offer
78,330
$3.00
31/12/2021
$2.10
31/12/2021
Nil
Nil
Nil
39,165
39,165
78,330
Annual Report 2022 Remuneration Report (Audited) | 35
Performance rights – other key management
personnel
180,650 performance rights were granted under the 2020
LTIP award to executives in March 2020. These rights have
During the Financial Year and the financial year ended
31 December 2021, performance rights were granted as
equity compensation benefits under the LTIP, to certain
executives including key management personnel as
disclosed as at balance date below. The performance
rights were granted at no cost to the participants.
a vesting date of March 2023. The EPS condition (90,325
rights) was tested as at 31 December 2022. Capral
achieved the EPS condition and consequently 90,325
of these rights will vest in March 2023. The TSR condition
(90,325 rights) was also tested as at 31 December 2022.
Capral’s relative TSR performance over the period from
January 2020 to December 2022 was in the 93rd
139,000 performance rights were granted under the 2022
percentile and thus 100% of the rights subject to the TSR
LTIP award to executives in March 2022. These rights have
condition will vest in March 2023. Consequently, a total
a vesting date of March 2025.
of 90,325 rights will vest and convert into Capral shares
164,700 performance rights were granted under the 2021
on a 1 for 1 basis as at 1 March 2023.
LTIP award to executives in March 2021. These rights have
141,660 performance rights were granted under the 2019
a vesting date of March 2024.
LTIP award to executives in March 2019. None of 141,660
rights lapsed and a total of 141,660 rights vested and
converted into Capral shares on a 1 for 1 basis, as at
1 March 2022.
Other KMP/Offer
Tranche
number
date
at grant date ($)
date
number
number
Grant
Grant
Fair value per right
Test
Lapsed
Vested
2022 Offer
T. Campbell
Total 2022
2021 Offer
T. Campbell
Total 2021
2020 Offer
T. Campbell
Total 2020
2019 Offer
T. Campbell
EPS 50%
TSR 50%
8,750
8,750
17,500
EPS 50%
12,850
TSR 50%
12,850
25,700
EPS 50%
15,335
TSR 50%
15,335
30,670
08/03/2022
03/03/2021
03/03/2020
22/03/2019
$6.78
31/12/2024
$4.91
31/12/2024
$5.49
31/12/2023
$4.18
31/12/2023
$2.82
31/12/2022
$2.10
31/12/2022
EPS 50%
10,835
TSR 50%
10,835
$3.15
31/12/2021
$2.25
31/12/2021
Total 2019
21,670
–
–
–
–
–
–
–
–
–
–
–
–
–
Nil
Nil
Nil
–
–
–
–
–
–
–
–
–
–
–
–
–
10,835
10,835
21,670
36 | Annual Report 2022 Remuneration Report (Audited)
Options
No options were issued under the LTIP during the Financial Year and the financial year ended 31 December 2021.
Equity grants during the Financial Year
Details of the performance rights granted, as well as the movement during the Financial Year in rights previously granted,
to Key Management Personnel are as follows:
2022 – Performance
Held at start
Granted as
Other
Held at end
share rights
A Dragicevich
T Campbell
of year
compensation
Lapsed
Vested
Changes
of year
267,300
78,040
345,340
49,000
17,500
66,500
–
–
–
(78,300)
(21,670)
(99,970)
–
–
–
238,000
73,870
311,870
The non-executive directors hold no performance rights.
Bonuses
During the Financial Year and the financial year ended
31 December 2021, STIP bonus payments were made to
the Managing Director and key management personnel.
The Managing Director’s STIP payments for 2022 and
2021 equated to 57% and 96% (respectively) of his TEC
(above the Capral Trading EBITDA2 ‘target’ level detailed in
section 1 above) and the Board considers it appropriate
having regard to the achievement of certain key financial
measures as well as critical non-financial measures
regarding customers, capital projects, anti-dumping
activities and other strategic plans. The other key
management personnel’s STIP payments were 28% and
48% of TEC for 2022 and 2021 respectively (above the
Capral Trading EBITDA2 ‘target’ level detailed in
section 1 above).
The percentages of bonus accrued and forfeited (as a
result of not meeting the performance criteria at ‘target’
level) during the Financial Year and the financial year
ended 31 December 2021 are disclosed below:
% of compensation
% of
% of
for the year
bonus
bonus
consisting of
2022
accrued
forfeited
STIP bonus1
Executives
A. Dragicevich
T. Campbell
115
114
–
–
36
22
% of compensation
% of
% of
for the year
bonus
bonus
2021
accrued
forfeited
consisting of
STIP bonus1
Executives
A. Dragicevich
T. Campbell
Notes on Bonuses:
193
192
–
–
49
32
1 Total compensation used for calculating % purposes
excludes equity compensation benefits under the LTIP and
termination benefits.
2 Trading EBITDA (non-IFRS measure) is EBITDA adjusted for
items assessed as unrelated to the underlying performance
of the business and allows for a more relevant comparison
between financial periods.
3 Bonuses relating to a financial year are payable in the
following financial year.
Annual Report 2022 Remuneration Report (Audited) | 37
Shareholdings of Key Management Personnel – fully paid ordinary shares of the Company
Details of the holdings of Capral’s ordinary shares of key management personnel during the Financial Year are as follows:
2022
Directors
R.L. Wood-Ward
A.M. Dragicevich
P.J. Jobe
K. Ostin
G.F. Pettigrew
M. White
Executives
T. Campbell
Held at start
Granted as
of performance
changes during
Held at end
of year
compensation
rights/ exercise of options
the year
of year
Received on vesting
Other
–
444,029
270,016
–
–
–
–
23,6821
–
–
–
–
–
78,3302
–
–
–
–
–
–
–
–
–
–
–
546,041
270,016
–
–
–
48,957
763,002
7,0001
30,682
21,6702
(17,657)3
59,970
100,000
(17,657)
876,027
1 Deferred equity acquisition as part of 2021 STIP plan.
2 Acquired on vesting of performance rights in March 2022.
3 Acquired through DRP and selling
SECTION 4: RELATIONSHIP BETWEEN REMUNERATION
AND COMPANY PERFORMANCE
There is a link between company performance and executive reward. For the Financial Year and the previous 4 financial
years, Capral has made STIP payments based upon the achievement of performance (financial and non-financial)
measures.
Whilst continuing to ensure that Capral attracts and retains qualified, experienced and motivated employees in accordance
with the remuneration policy by remunerating employees at a competitive level, Capral has placed more emphasis on
at-risk remuneration in order to align remuneration of the employees to the performance of Capral and encourage
shareholder wealth.
38 | Annual Report 2022 Remuneration Report (Audited)
During the Financial Year and the previous 4 financial years (2018–2021), Capral’s financial performance objectives were
as follows, with the minimum targets (M) that were set for the 2022 STIP financial measures also shown:
1,573
6,415
13.9
45.0
Year Ended 31 Dec
Trading EBITDA $’0001
Free Cash Flow $’0001
Net (Loss)/Profit $’000
2022 (A)
2022 (M)
2021 (A)
2020 (A)
2019 (A)
2018 (A)
43,305
31,400
38,157
19,668
11,021
14,268
(16,376)
11,100
17,229
20,7524
4755
32,3872
25,200
33,3133
11,4644
3,1055
% Working Capital to Annualised Sales
Dividend – cents per share
13.1
70.0
13.1
–
10.7
70.0
13.2
45.0
14.7
15.0
Underlying earnings / (loss) – cents per share
195.902
151.28
179.703
69.514
19.265
40.11
Share price (closing) $
7.40
n/a
9.47
5.95
3.45
3.60
Note:
Any JobKeeper related benefit received in 2020 have been excluded in full
1 Trading EBITDA (non-IFRS measure as explained in footnote to Chairman’s Report on page 4) is Statutory EBITDA adjusted for items
assessed as unrelated to the underlying performance of the business and allows for a more relevant comparison between financial
periods. . Free Cash Flow is net cash provided by operating activities reduced by net cash flows used in investing activities and lease
liability payments.
2 Net Profit and Underlying Earnings per share adjusted to exclude Deferred Tax Benefit of $8.365 million.
3 Net Profit and Underlying Earnings per share adjusted to exclude Deferred Tax Benefit of $9.430 million, property revaluation
$3.074 million.
4 Free Cash Flow, Net Profit and Basic Earnings per share adjusted to exclude Deferred Tax Benefit of $3.048 million and other one-off
items of $0.499 million.
5 Free Cash Flow, Net Profit and Basic Earnings per share adjusted to exclude Restructuring Cost and other one-off items of
$7.345 million.
In the Financial Year, Capral’s Trading EBITDA was above 2021 level, but Net Profit after tax was lower due to the negative
LME revaluation. The minimum targets were surpassed in all instances except for Free Cash Flow, driven by unplanned
high Working Capital requirement due to record high LME price. As a result, proportional STIP will be payable to Capral key
management and other senior personnel. Discretionary Bonuses will also be payable to other qualifying employees.
At a Divisional and Regional level minimum Trading EBITDA measures were achieved in all business units, and there were
mixed results relating to Working Capital and sales volume measures.
Annual Report 2022 Remuneration Report (Audited) | 39
SECTION 4: RELATIONSHIP BETWEEN REMUNERATION AND COMPANY
PERFORMANCE (CONT’D)
The following provides examples of other key measures (that are not commercially sensitive) used to assess
executive performance:
Performance Area Measure
Outcome
Safety
Reduction in total reportable
Rate improved significantly and Group Stretch targets were met
injury frequency rate
Hours lost & return to work
Stretch performance targets met
hours lost from injuries
Customers
Volume retention/ growth
Sales areas met some of the specific growth and revenue targets as
well as margin measures. Performance varied by region/ division
Production
Operational efficiency
Manufacturing plants met some of their operational efficiency/
improvement targets. Performance varied by plant.
Supply Chain
Supply chain and inventory
Initiatives were generally not achieved
reduction programmes
People
AL & LSL excess balance
Overall excess leave balance reduction initiatives were not achieved.
reduction
Performance varied by region/ division
Anti-dumping
Pursue anti-dumping
Overall, the outcomes were successful.
campaign
Costs
Cost reduction initiatives
Many of the specific cost and expense reduction initiatives were
achieved. Performance varied by region/ division
The 2022 STIP payments are lower than those paid in
was 449.5 cents per share against an aggregate
2021, aligned to financial performance. There is a clear
target of 263.4 cents per share and therefore the
link between financial performance and the level of
EPS condition of the 2020 award was achieved.
STIP awarded.
LTIP is linked to Capral’s performance as the value of the
performance rights awarded depends on Capral’s share
Consequently, 100% or 141,660 of the rights
subject to the EPS condition of the 2020 award will
vest and convert into Capral shares.
price and dividend payments, and whether the awards vest
•
In 2021:
relate to earnings growth and Capral’s relative TSR
- Capral’s relative TSR performance over the period
performance. There is a link between Capral’s
from January 2019 to December 2021 achieved
performance and the vesting of rights under LTIP awards.
the 89th percentile, above the maximum 75th
In this regard:
•
In 2022:
- Capral’s relative TSR performance over the period
from January 2020 to December 2022 achieved
the 93rd percentile, above the maximum 75th
percentile. Consequently, 100% or 141,660 of
the rights subject to the TSR condition that were
awarded in 2020 to executives will vest and convert
to Capral shares.
- Given earnings in, 2020, 2021 and 2022, the
aggregate EPS result for the 3 year period to 2022
percentile. Consequently, 100% or 109,995 of
the rights subject to the TSR condition that
were awarded in 2019 to executives vested and
converted into Capral shares.
- Given earnings in, 2019, 2020 and 2021, the
aggregate EPS result for the 3 year period to 2021
was 285.16 cents per share against an aggregate
target of 156.04 cents per share and therefore the
EPS condition of the 2019 award was achieved.
Consequently, 100% or 109,995 of the rights
subject to the EPS condition of the 2019 award
vested and converted into Capral shares.
40 | Annual Report 2022 Remuneration Report (Audited)
SECTION 5: SUMMARY OF KEY EMPLOYMENT CONTRACTS
Details of the key contract terms for the Managing Director and other key management personnel as at the end of the
Financial Year are as follows:
Contract Details
A. Dragicevich
T. Campbell
Expiry date
No fixed end date
No fixed end date
Notice of termination by Capral
6 months
Notice of termination by employee
6 months
6 months
6 months
Termination payments (in lieu
6 months salary plus accrued but
6 months salary. STIP entitlement for
of notice)
unpaid STIP (pro rata for incomplete
incomplete financial years is subject
financial year).
to Board discretion
In addition, unvested LTIP rights may
vest if employment is terminated by
Capral other than for cause.6 weeks
annual leave per annum.
ENVIRONMENTAL REGULATIONS
INDEMNITIES TO AUDITORS
Manufacturing licences and consents required by laws
In respect of non-audit services provided in relation to
and regulations are held by the consolidated entity at each
reviews of consulting and compliance advice during the
relevant site as advised by consulting with relevant
Financial Year, Deloitte Touche Tohmatsu, Capral’s auditor,
environmental authorities. All applications for and
has the benefit of an indemnity (including in respect of
renewals of licences have been granted and all consents
legal costs) for any third party claim in connection with the
have been given by all relevant authorities.
use, distribution or reliance on their work (except to the
DIRECTORS’ AND OFFICERS’
INDEMNITIES AND INSURANCE
Under Capral’s constitution, Capral is required to
indemnify, to the extent permitted by law, each director
and secretary of Capral against any liability incurred by
extent caused by the wilful misconduct or fraud of Deloitte
Touche Tohmatsu, or where it has agreed that the third
party may rely on the work or it may be used in a public
document).
PROCEEDINGS ON BEHALF OF CAPRAL
that person as an officer of Capral. The directors listed on
No person has applied to the Court under section 237 of
pages 11 to 12 and the secretary listed on page 21 have
the Corporations Act for leave to bring proceedings on
the benefit of this indemnity. During the Financial Year,
behalf of Capral, or to intervene in any proceedings to
Capral paid a premium for directors’ and officers’ liability
which Capral is party, for the purpose of taking
insurance policies which cover current and former
responsibility on behalf of Capral for all or part of those
directors, company secretaries and officers of the
proceedings. No proceedings have been brought or
consolidated entity. Details of the nature of the liabilities
intervened in on behalf of Capral with leave of the Court
covered and the amount of the premium paid in respect of
under section 237 of the Corporations Act.
the directors’ and officers’ insurance policies are not
disclosed, as such disclosure is prohibited under the terms
of the contracts.
Annual Report 2022 Directors’ Report | 41
NON-AUDIT SERVICES
Capral may decide to employ the auditor on assignments
AUDITOR’S INDEPENDENCE
DECLARATION
additional to their statutory audit services where the
The auditors’ independence declaration as required
auditor’s expertise and experience with the consolidated
under section 307C of the Corporations Act is set out
entity are important.
on page 42.
The Board has considered this position and in accordance
with the advice received from the Audit & Risk Committee,
it is satisfied that the provision of these services during
the Financial Year by the auditor is compatible with,
and did not compromise, the general standard of auditor
independence imposed by the Corporations Act for the
following reasons:
( 1 ) the non-audit services provided do not involve
reviewing or auditing the auditor’s own work and have
not involved partners or staff acting in a
management or decision-making capacity for Capral
or in the processing or originating of transactions;
( 2 ) all non-audit services and the related fees have been
reviewed by the Audit & Risk Committee to ensure
complete transparency and that they do not affect
the integrity and objectivity of Deloitte Touche
Tohmatsu; and
( 3 ) the declaration required by section 307C of the
Corporations Act 2001 confirming independence has
been received from Deloitte Touche Tohmatsu.
Details of the amounts paid or payable to Capral’s auditor
(Deloitte Touche Tohmatsu) for audit and non-audit
services provided during the Financial Year are set out in
Note 33 of the financial statements.
ROUNDING OF AMOUNTS
Capral is a company of the kind referred to in ASIC
Corporations Instrument 2016/191, dated 24 March 2016,
and in accordance with that ASIC Corporations Instrument
amounts in the Directors’ Report and the Financial Report
are rounded off to the nearest thousand dollars, unless
otherwise indicated.
Signed in accordance with a resolution of directors made
pursuant to section 298(2) of the Corporations Act 2001.
On behalf of the directors
R. L. Wood-Ward
Chairman
Sydney
24 February 2023
A. M. Dragicevich
Managing Director
42 | Annual Report 2022 Auditor’s Independence Declaration
Auditor’s Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
8 Parramatta Square
10 Darcy Street
Parramatta, NSW, 2150
Australia
Phone: +61 2 9840 7000
www.deloitte.com.au
The Board of Directors
Capral Limited
15 Huntingwood Drive
Huntingwood NSW 2148
24 February 2023
Dear Board Members,
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo CCaapprraall LLiimmiitteedd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Capral Limited..
As lead audit partner for the audit of the financial report of Capral Limited for the year ended 31 December
2022, I declare that to the best of my knowledge and belief, the only contraventions of:
·
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
· Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
X Delaney
Partner
Chartered Accountant
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Annual Report 2022 Financial Statements | 43
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the financial year ended 31 December 2022
Continuing operations
Sales revenue
Scrap and other revenue
Revenue
Other income
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Finance costs
Freight expense
Occupancy costs
Repairs and maintenance expense
Other expenses
Profit before tax
Income tax benefit
Profit for the year
Other comprehensive income Items that will not be reclassified
subsequently to profit or loss
Gain on revaluation of properties
Other comprehensive income for the year
Note
3
3
2
2
2
2
2
4
2022
$’000
643,284
49,222
692,506
2021
$’000
550,854
42,607
593,461
3,446
2,723
(468,730)
(376,398)
(103,922)
(21,318)
(6,319)
(16,296)
(4,969)
(7,076)
(96,895)
(20,170)
(5,760)
(13,675)
(4,087)
(6,978)
(34,934)
(38,908)
32,388
33,313
8,365
9,430
40,753
42,743
–
–
3,074
3,074
Total comprehensive income for the year
40,753
45,817
Earnings per share
Basic earnings per share
Diluted earnings per share
($ per share)
($ per share)
26
26
2.31
2.22
2.52
2.42
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
44 | Annual Report 2022 Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2022
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Prepayments
Total current assets
Non-current assets
Deferred tax assets
Property, plant and equipment
Right-of-use assets
Other intangible assets
Goodwill
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Borrowings
Other financial liabilities
Deferred income
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
Note
7
8
9
31 (c)
10
11
14
17
15
16
19
20
21
27 (b)
31 (c)
22
20
21
23
24
24 (b)
2022
$’000
2021
$’000
48,988
91,326
154,877
11
848
50,132
96,290
130,507
–
723
296,050
277,652
23,700
56,644
66,651
649
3,070
150,714
446,764
112,735
16,158
17,901
24,083
828
153
15,335
53,195
75,313
700
3,070
147,613
425,265
139,037
15,810
18,798
–
67
213
171,858
173,925
77,874
7,306
85,180
257,038
189,726
433,433
91,279
(334,986)
87,730
6,485
94,215
268,140
157,125
430,588
69,888
(343,351)
189,726
157,125
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the financial year ended 31 December 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest and other costs of finance paid
Net cash provided by operating activities
35(ii)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Payments for purchase of a business
39
Interest received
Proceeds from sale of property, plant and equipment
Annual Report 2022 Financial Statements | 45
Note
2022
$’000
2021
$’000
770,509
622,566
(757,098)
(575,577)
13,411
(6,349)
7,062
(9,790)
(170)
–
125
–
46,989
(5,260)
41,729
(9,181)
(368)
(10,302)
–
131
Net cash flows used in investing activities
(9,835)
(19,720)
Cash flows from financing activities
Payments of dividends
25
(12,166)
(10,870)
Proceeds from dividend reinvestment plan
Payments for share purchase – employee share plan
Proceeds in relation to employee share plan
Proceeds from borrowings (Trade loans)
Repayment of borrowings (Trade loans)
Payment of lease liabilities excluding financing component
35(iv)
Net cash flows provided by/(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of foreign exchange rate changes
2,604
–
428
80,820
(56,737)
(14,548)
401
(2,372)
50,132
1,228
3,494
(273)
–
–
–
(14,951)
(22,600)
(591)
49,396
1,327
Cash and cash equivalents at the end of the financial year
35(i)
48,988
50,132
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
46 | Annual Report 2022 Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Balance as at 1 January 2021
Profit for the year
Total comprehensive profit for the year
Share-based payments expense
Shares issued – dividend reinvestment plan
Shares issued – employee escrow shares
Employees shares on-market purchase
Dividends paid
Balance as at 31 December 2021
Balance as at 1 January 2022
Profit for the year
Total comprehensive profit for the year
Share-based payments expense
Shares issued – dividend reinvestment plan
Shares issued – employee escrow shares
Employees shares on-market purchase
Dividends paid
Fully paid
ordinary shares
$’000
426,965
–
–
–
3,494
129
–
–
430,588
430,588
–
–
–
2,604
241
–
–
Note
25
25
Equity-settled
compensation
reserve
$’000
11,319
–
–
590
–
–
–
–
11,909
11,909
–
–
982
–
–
–
–
Balance as at 31 December 2022
433,433
12,891
4,088
(334,986)
* Dividend reserve represents undistributed profits since the financial year 2010. Current period profit has been transferred to a dividend
reserve account. Interim and final dividends are declared and sourced from current year profits.
^
Income tax benefit (2022: $8.365 million; 2021: $9.430 million) in relation to deferred tax assets on tax losses are excluded from
dividend reserve.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Employee
Asset revaluation
share reserve
reserve
$’000
1,014
–
3,074
4,088
4,088
–
–
–
–
–
–
–
–
–
–
–
–
Dividend
Reserve*
$’000
31,673
33,313
33,313
–
–
–
–
–
–
–
–
(10,870)
54,116
54,116
32,388
32,388
(12,166)
74,338
Accumulated
losses
$’000
(352,781)
9,430^
9,430^
(343,351)
(343,351)
8,365^
8,365^
–
–
–
–
–
–
–
–
–
–
Total
$’000
118,190
42,743
45,817
590
3,494
129
(225)
(10,870)
157,125
157,125
40,753
40,753
982
2,604
241
187
(12,166)
189,726
$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
(225)
(225)
(225)
187
(38)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Balance as at 1 January 2021
Profit for the year
Total comprehensive profit for the year
Share-based payments expense
Shares issued – dividend reinvestment plan
Shares issued – employee escrow shares
Employees shares on-market purchase
Dividends paid
Balance as at 31 December 2021
Balance as at 1 January 2022
Profit for the year
Total comprehensive profit for the year
Share-based payments expense
Shares issued – dividend reinvestment plan
Shares issued – employee escrow shares
Employees shares on-market purchase
Dividends paid
Note
Fully paid
ordinary shares
$’000
426,965
Equity-settled
compensation
reserve
$’000
11,319
–
–
–
–
–
–
–
–
–
–
3,494
129
430,588
430,588
2,604
241
590
–
–
–
–
–
–
–
–
–
–
–
–
11,909
11,909
982
25
25
Employee
Asset revaluation
share reserve
reserve
$’000
–
–
–
–
–
–
(225)
–
(225)
(225)
–
–
–
–
–
187
–
(38)
$’000
1,014
–
3,074
–
–
–
–
–
4,088
4,088
–
–
–
–
–
–
–
4,088
Balance as at 31 December 2022
433,433
12,891
* Dividend reserve represents undistributed profits since the financial year 2010. Current period profit has been transferred to a dividend
reserve account. Interim and final dividends are declared and sourced from current year profits.
^
Income tax benefit (2022: $8.365 million; 2021: $9.430 million) in relation to deferred tax assets on tax losses are excluded from
dividend reserve.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Annual Report 2022 Financial Statements | 47
Dividend
Reserve*
$’000
31,673
33,313
33,313
–
–
–
–
(10,870)
54,116
54,116
32,388
32,388
–
–
–
–
(12,166)
74,338
Accumulated
losses
$’000
(352,781)
9,430^
9,430^
–
–
–
–
–
(343,351)
(343,351)
8,365^
8,365^
–
–
–
–
–
(334,986)
Total
$’000
118,190
42,743
45,817
590
3,494
129
(225)
(10,870)
157,125
157,125
40,753
40,753
982
2,604
241
187
(12,166)
189,726
Notes to the Financial Statements
48 | Annual Report 2022 Notes to the Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
Compliance with A-IFRS ensures that the financial
for the financial year ended 31 December 2022
1a. GENERAL INFORMATION
statements and notes of the Group comply with
International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the
Capral Limited (the Company) is a public listed company
directors on 24 February 2023.
incorporated and operating in Australia. The Company’s
shares are quoted on the Australian Securities Exchange
Basis of Preparation
(ASX Code: CAA).
The Company’s registered office and its principal place of
business is as follows:
Registered office & principal place of business
71 Ashburn Road
Bundamba
QLD 4304
Tel: (07) 3816 7000
The principal continuing activities of the consolidated
entity consist of the manufacturing, marketing and
distribution of fabricated and semi-fabricated aluminium
related products.
1b. ADOPTION OF NEW AND REVISED
ACCOUNTING STANDARDS
In the current year, the Group has applied the below
amendments to AASB Standards and Interpretations
issued by the Board that are effective for an annual period
that begins on or after 1 January 2022. Their adoption has
not had any material impact on the disclosures or on the
amounts reported in these financial statements.
Amendments to AASB 3 Business Combinations
Reference to the Conceptual Framework
The financial report has been prepared on the basis of
historical cost, except for the revaluation of certain
non-current assets and financial instruments. Cost is
based on the fair values of the consideration given in
exchange for assets. All amounts are presented in
Australian dollars, unless otherwise noted.
The Company is of a kind referred to in ASIC Corporations
Instrument 2016/191, dated 24 March 2016, issued by the
Australian Securities and Investments Commission,
relating to the “rounding off” of amounts in the financial
report. Amounts in the financial report have been rounded
off in accordance with that ASIC Corporations Instrument
to the nearest thousand dollars, or in certain cases, the
nearest dollar as indicated.
The following significant accounting policies have been
adopted in the preparation and presentation of the
financial report:
( a ) Basis of Consolidation
The financial statements incorporate the financial
statements of the Company and entities (including special
purpose entities) controlled by the Company (and its
subsidiaries) (referred to as ‘the Group’ in these financial
statements).
Amendments to AASB 116 Property, Plant and Equipment
– Proceeds before Intended Use
1c. SIGNIFICANT ACCOUNTING POLICIES
Control is based on whether an investor has:
• power over the investee
• exposure, or rights, to variable returns from its
involvement with the investee, and
Statement of Compliance
•
the ability to use its power over the investee to affect
The financial report is a general purpose financial report
which has been prepared in accordance with the
Corporations Act 2001, Accounting Standards and
Interpretations, and complies with other requirements of
the law.
The financial report includes the financial statements of
the Company and the financial statements of the Group.
For the purpose of preparing the consolidated financial
statements, the Company is a for-profit entity.
Accounting Standards include Australian equivalents to
International Financial Reporting Standards (‘A-IFRS’).
the amount of the returns.
The results of the subsidiaries acquired or disposed of
during the year are included in the consolidated statement
of profit or loss and other comprehensive income from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting
policies into line with those used by other members of the
Group. All intra-group transactions, balances, income and
expenses are eliminated in full on consolidation.
Annual Report 2022 Notes to the Financial Statements | 49
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
( b ) Borrowing Costs
• assets (or disposal groups) that are classified as
held for sale in accordance with AASB 5 Non-Current
Assets Held for Sale and Discontinued Operations are
measured in accordance with that Standard.
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
( d ) Cash and Cash Equivalents
assets that necessarily take a substantial period of time to
Cash comprises cash on hand and demand deposits.
get ready for their intended use or sale, are added to the
Cash equivalents are short-term, highly liquid investments
cost of those assets, until such time as the assets are
that are readily convertible to known amounts of cash and
substantially ready for their intended use or sale.
which are subject to an insignificant risk of change in
Investment income earned on the temporary investment
value and have a maturity of three months or less at the
of specific borrowings pending their expenditure on
date of acquisition. Bank overdrafts are shown within
qualifying assets is deducted from the borrowing costs
borrowings in current liabilities in the statement of
eligible for capitalisation. All other borrowing costs are
financial position.
recognised in profit or loss in the period in which they
are incurred.
( c ) Business Combinations
( e ) Derivative Financial Instruments
The Group enters into a variety of derivative financial
instruments to manage its exposure to interest rate and
Acquisitions of subsidiaries and businesses are accounted
foreign exchange rate risk, including foreign exchange
for using the acquisition method. The consideration for
forward contracts.
each acquisition is measured at the aggregate of the fair
values (at the date of exchange) of assets given, liabilities
incurred or assumed, and equity instruments issued by the
Group in exchange for control of the acquiree.
Acquisition-related costs are recognised in profit or loss
as incurred.
Where applicable, the consideration for the acquisition
includes any asset or liability resulting from a contingent
consideration arrangement, measured at its
acquisition-date fair value. Subsequent changes in such
fair values are adjusted against the cost of acquisition
where they qualify as measurement period adjustments
(see below). All other subsequent changes in the fair value
of contingent consideration classified as an asset or
liability are accounted for in accordance with relevant
Standards. Changes in the fair value of contingent
consideration classified as equity are not recognised.
Further details of derivative financial instruments are
disclosed in Note 31 to the financial statements.
Derivatives are initially recognised at fair value at the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date.
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 of profit or loss depends on the
nature of the hedge relationship. The fair value of hedging
derivatives is classified as a non-current asset or a
non-current liability if the remaining maturity of the hedge
relationship is more than 12 months, and as a current
asset or current liability if the remaining maturity of the
hedge relationship is less than 12 months. The Group’s
derivatives do not qualify for hedge accounting and are
not designated into an effective hedge relationship and are
The acquiree’s identifiable assets, liabilities and contingent
classified as a current asset and current liability.
liabilities that meet the conditions for recognition under
AASB 3 are recognised at their fair value at the acquisition
Embedded Derivatives
date, except that:
• deferred tax assets or liabilities and liabilities or
assets related to employee benefit arrangements are
recognised and measured in accordance with AASB
112 Income Taxes and AASB 119 Employee Benefits
respectively;
•
liabilities or equity instruments related to the
replacement by the Group of an acquiree’s share based
payment awards are measured in accordance with
AASB 2 Share-based Payment; and
Derivatives embedded in hybrid contracts with hosts that
are not financial assets within the scope of AASB 9
(e.g. financial liabilities) are treated as separate derivatives
when they meet the definition of a derivative, their risks
and characteristics are not closely related to those of the
host contracts and the host contracts are not measured
at FVTPL.
50 | Annual Report 2022 Notes to the Financial Statements
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
( f ) Employee Benefits
( i ) Salaries, wages and leave benefits
A liability is recognised for benefits accruing to
employees in respect of wages and salaries,
including non-monetary benefits, 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 at 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.
( ii ) Share-based payments
Equity-settled share-based payments with employees
are measured at the fair value of the equity
instrument at the grant date.
( g ) Financial Assets
Investments are recognised and derecognised on trade
date where the purchase or sale of an investment is under
a contract whose terms require delivery of the investment
within the timeframe established by the market concerned,
and are initially measured at fair value, net of transaction
costs except for those financial assets classified as at fair
value through the profit or loss which are initially
measured at fair value. Subsequent to initial recognition,
investments in subsidiaries are measured at cost in the
Company’s financial statements. Other financial assets
are classified into the following specified categories:
financial assets at amortised cost; financial assets at fair
value through other comprehensive income and financial
assets at fair value through profit or loss account.
The classification depends on the nature and purpose
of the financial assets and is determined at the time of
initial recognition.
Effective interest method
The effective interest method is a method of calculating
the amortised cost of a financial asset and of allocating
interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash receipts through the expected life of the
The fair value of the performance rights is estimated
financial asset, or, where appropriate, a shorter period.
at grant date using a Monte-Carlo Simulation analysis
taking into account the terms and conditions upon
which the securities are granted.
The fair value of the options is estimated at grant
date using a binomial tree model taking into account
the terms and conditions upon which the securities
are granted.
The expected life used in the model has been
adjusted, based on management’s best estimate, for
the effects of non-transferability, exercise restrictions,
and behavioural considerations.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed
Income is recognised on an effective interest rate basis for
debt instruments other than financial assets ‘at fair value
through profit or loss’.
Financial assets at FVTPL are measured at fair value at
the end of each reporting period, with any fair value gains
or losses recognised in profit or loss to the extent they are
not part of a designated hedging relationship.
The net gain or loss recognised in profit or loss on the
financial assets is included in the other income or other
expenses. Fair value is determined in the manner
described in Note 31.
Trade and other receivables
on a straight-line basis over the vesting period, based
Trade and other receivables that were measured at
on the Group’s estimate of shares that will
amortised cost under AASB 139 continue to be measured
eventually vest.
Further details on how the fair value of equity-settled
share-based transactions have been determined can
be found in Note 37.
( iii ) Defined contribution plan
at amortised cost under AASB 9 as they are held within a
business model to collect contractual cash flows.
Trade and other receivables are measured at amortised
cost using the effective interest method less impairment.
Interest is recognised by applying the effective
interest rate.
Contributions to defined contribution superannuation
plans are expensed when incurred.
Annual Report 2022 Notes to the Financial Statements | 51
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Impairment of financial assets
Impairment of financial assets is based on an expected
credit loss (“ECL”) model under AASB 9 rather than
incurred loss model. ECLs are a probability-weighted
estimate of credit losses. The group calculated ECLs
based on consideration of customer-specific factors and
actual credit loss experience over the past 3 years. As a
percentage of revenue, the Group’s actual credit loss
experience has not been material.
In accordance with AASB 9 paragraph 7.2.20 the group will
( h ) Financial Instruments Issued by the Group
Debt and equity instruments
Debt and equity instruments are classified as either
liabilities or as equity in accordance with the substance
of the contractual arrangement.
Compound instruments
The component parts of compound instruments are
classified separately as financial liabilities and equity in
accordance with the substance of the contractual
arrangement. At the date of issue, the fair value of the
liability component is estimated using the prevailing
market interest rate for a similar non-convertible
recognise a loss allowance at an amount equal to lifetime
expected credit losses at each reporting date. The group
instrument.
calculated ECLs based on consideration of
customer-specific factors and actual credit loss
experience over the past 3 years. The credit loss includes
consideration for the COVID 19 impact.
For financial assets carried at amortised cost, the amount
of the impairment is the difference between the asset’s
carrying amount and the present value of estimated future
cash flows, discounted at the original effective
This amount is recorded as a liability on an amortised cost
basis until extinguished on conversion or upon the
instruments reaching maturity. The equity component
initially brought to account is determined by deducting the
amount of the liability component from the fair value of
the compound instrument as a whole. This is recognised
and included in equity, net of income tax effects and is not
subsequently remeasured.
interest rate.
Financial guarantee contract liabilities
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 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.
Financial guarantee contract liabilities are measured
initially at their fair values and subsequently at the higher
of the amount recognised as a provision and the amount
initially recognised less cumulative amortisation.
Financial liabilities
Financial liabilities are classified as either financial
liabilities ‘at fair value through profit or loss’ or other
financial liabilities.
Financial liabilities at fair value through profit or loss
Derecognition of financial assets
Financial liabilities at fair value through profit or loss are
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire,
or it transfers the financial asset and substantially all the
risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains
substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Group
recognises its retained interest in the asset and an
associated liability for the amounts it may have to pay.
If the Group retains substantially all the risks and rewards
of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also
recognises a collateralised borrowing for the
proceeds received.
stated at fair value, with any resultant gain or loss
recognised in profit or loss. The net gain or loss
recognised in profit or loss incorporates any interest paid
on the financial liability. Fair value is determined in the
manner described in Note 31.
Other financial liabilities
Other financial liabilities, including borrowings, are initially
measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at
amortised cost using the effective interest method, with
interest expense recognised on an effective yield basis.
Refer note 1c (o).
52 | Annual Report 2022 Notes to the Financial Statements
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
for which the estimates of future cash flows have not
been adjusted. If the recoverable amount of an asset
( i ) Foreign Currency
(or CGU) is estimated to be less than its carrying amount,
the carrying amount of the asset (CGU) is reduced to its
In preparing the financial statements, transactions in
recoverable amount. An impairment loss is recognised in
currencies other than the entity’s functional currency
profit or loss immediately, unless the relevant asset is
(foreign currencies) are recorded at the rates of exchange
carried at fair value, in which case the impairment loss is
prevailing on the dates of the transactions. At each
treated as a revaluation decrease.
balance date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the
balance date. Non-monetary items carried at fair value
that are denominated in foreign currencies are
retranslated at the rates prevailing on the date when the
fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency
are not retranslated.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (CGU) is increased to the
revised estimate of its recoverable amount, but only to
the extent 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 (CGU) in prior years. A reversal of an impairment
loss is recognised in the profit or loss immediately, unless
Exchange differences are recognised in profit or loss in the
the relevant asset is carried at fair value, in which case
period in which they arise except for exchange differences
the reversal of the impairment loss is treated as a
which relate to assets under construction for future
revaluation increase.
productive use, which are included in the cost of those
assets where they are regarded as an adjustment to
( l )
Income Tax
interest costs on foreign currency borrowings.
The income tax expense or revenue for the period is the
( j ) Government Grant
tax payable on the current period’s taxable income based
on the national income tax rate for each jurisdiction
Grants are recognised where there is a reasonable
adjusted by changes in deferred tax assets and liabilities
assurance that the grant will be received and all attached
attributable to temporary differences between the tax
conditions will be complied with.
( k ) Impairment of Other Tangible and
bases of assets and liabilities and their carrying amounts
in the financial statements, and to unused tax losses.
Intangible Assets excluding goodwill
Deferred tax assets are recognised for deductible
At each reporting date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
suffered an impairment loss. If any such indication exists,
The Company and its wholly owned Australian entities
the recoverable amount of the asset is estimated in order
have implemented the tax consolidation legislation.
to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit (CGU) to
which that asset belongs.
The current and deferred tax amounts for the
tax-consolidated group are allocated to the members of
the tax-consolidated group (including the Company as the
head entity) using the ‘separate taxpayer within group’
approach, with deferred taxes being allocated by reference
Intangible assets with indefinite useful lives and intangible
to the carrying amounts in the financial statements of
assets not yet available for use are tested for impairment
each member entity and the tax values applying under tax
at least annually and whenever there is an indication that
consolidation. Current tax liabilities and assets and
the asset may be impaired. Recoverable amount is the
higher of fair value less costs to sell and value in use.
deferred tax assets arising from unused tax losses and
relevant tax credits arising from this allocation process are
In assessing value in use, the estimated future cash flows
then accounted for as immediately assumed by the head
are discounted to their present value using a post-tax
entity, as under Australian taxation law the head entity has
discount rate that reflects current market assessments of
the legal obligation (or right) to these amounts.
the time value of money and the risks specific to the asset
Annual Report 2022 Notes to the Financial Statements | 53
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
( m ) Intangible Assets
Intangible assets acquired in a business combination are
identified and recognised separately from goodwill where
they satisfy the definition of an intangible asset and their
fair value can be measured reliably.
SaaS arrangements
Configuration and customisation costs incurred in
implementing SaaS arrangements are recognised in profit
or loss as the customisation and configuration services
are performed, or, in certain circumstances, over the SaaS
( o ) Leases
The Group assesses whether a contract is or contains a
lease, at inception of the contract. The Group recognises a
right-of-use asset and a corresponding lease liability with
respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a
lease term of 12 months or less) and leases of low value
assets (such as copiers). For these leases, the Group
recognises the lease payments as an operating expense
on a straight-line basis over the term of the lease unless
another systematic basis is more representative of the
time pattern in which economic benefits from the leased
assets are consumed.
contract term when access to the cloud application
The lease liability is initially measured at the present value
software is provided.
Patents, trademarks and licences
of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
Patents, trademarks and licences are recorded at cost less
determined, the Group uses its incremental borrowing rate.
accumulated amortisation and impairment. Amortisation
is charged on a straight-line basis over their estimated
useful lives, which vary from 5 to 16 years.
The estimated useful life and amortisation method is
reviewed at the end of each annual reporting period,
with any changes being recognised as a change in
accounting estimate.
Software
Software assets including system development costs
have a finite useful life and are carried at cost less
accumulated amortisation and impairment losses.
Amortisation is calculated using the straight-line method
to allocate the cost over the assets estimated useful lives,
which vary from 3 to 5 years.
( n ) Inventories
Inventories representing aluminium log, other supplies and
finished goods are valued at the lower of cost and net
realisable value.
Net realisable value represents the estimated selling price
less all estimated costs of completion and costs
necessary to make the sale.
Aluminium log is valued at moving average of direct
purchase cost. Cost of rolled product has been
determined principally on moving average of direct
purchase costs. Costs for finished and partly finished
includes moving average metal cost, direct labour, and
appropriate proportion of fixed and variable
factory overhead.
Lease payments included in the measurement of the lease
liability comprise:
• Fixed lease payments (including in-substance fixed
payments), less any lease incentives receivable;
• Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date; and
• Payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the
carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use
asset) whenever:
• The lease term has changed or there is a significant
event or change in circumstances resulting in a
change in the assessment of exercise of a purchase
option, in which case the lease liability is remeasured
by discounting the revised lease payments using a
revised discount rate.
• The lease payments change due to changes in an
index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised
lease payments using an unchanged discount rate
(unless the lease payments change is due to a change
in a floating interest rate, in which case a revised
discount rate is used).
54 | Annual Report 2022 Notes to the Financial Statements
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
• A lease contract is modified and the lease modification
is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease
term of the modified lease by discounting the revised
lease payments using a revised discount rate at the
effective date of the modification.
The right-of-use assets comprise the initial measurement
of the corresponding lease liability, lease payments made
at or before the commencement day, less any lease
incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated
depreciation and impairment losses.
The depreciation starts at the commencement date of
the lease.
Rental income from operating leases is recognised on a
straight-line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the
leased asset and recognised on a straight-line basis over
the lease term.
Operating lease payments are recognised as an expense
on a straight-line basis over the lease team, except where
another systematic basis is more representative of the
time pattern in which economic benefits from the leased
asset are consumed.
In the event that lease incentives are received to enter into
operating leases, such incentives are recognised as a
liability. The aggregate benefits of incentives are
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.
( p ) Property, Plant and Equipment
buildings are credited to the asset revaluation reserve
except to the extent that the increase reverses a
revaluation decrease for the same asset previously
recognised as an expense in profit or loss, in which case
the increase is credited to the profit and loss to the extent
of the decrease previously charged. A decrease in carrying
amount arising on the revaluation of land and buildings is
charged as an expense in profit or loss to the extent that it
exceeds the balance, if any, held in the revaluation reserve
relating to a previous revaluation of that asset.
Depreciation on revalued buildings is charged to profit or
loss. On the subsequent sale or retirement of revalued
property, the attributable revaluation surplus remaining in
the revaluation reserve, net of any related taxes, is
transferred directly to retained earnings.
Plant and equipment, and leasehold improvements are
stated at cost less accumulated depreciation and
impairment. Cost includes expenditure that is directly
attributable to the acquisition of the item.
In the event that settlement of all or part of the purchase
consideration is deferred, cost is determined by
discounting the amounts payable in the future to their
present value as at the date of acquisition. Depreciation is
provided on property, plant and equipment, including
freehold buildings but excluding land. Depreciation is
calculated on a straight-line basis so as to write off the net
cost or other revalued amount of each asset over its
expected useful life to its estimated residual value.
Leasehold improvements are depreciated over the period
of the lease or estimated useful life, whichever is shorter,
using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at
the end of each annual reporting period, with the effect of
any changes recognised on a prospective basis.
Right-of-use assets are depreciated over the shorter
period of lease term and useful life of the underlying asset.
Land and buildings are measured at fair value less any
( q ) Provisions
subsequent accumulated depreciation and subsequent
accumulated impairment losses. Fair value is determined
on the basis of a periodic, independent valuation by
external valuation experts, based on discounted cash
flows or capitalisation of net income, as appropriate.
Periodic reviews are conducted every three to five years.
The fair values are recognised in the financial statements
of the Group and are reviewed at the end of each reporting
period to ensure that the carrying value of land and
buildings is not materially different from their fair values.
Any revaluation increase arising on revaluation of land and
Provisions are recognised when the Group has a present,
legal or constructive obligation as a result of past events,
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 reporting date, taking into account the risks
and uncertainties surrounding the obligation. Where a
provision is measured using the cashflows estimated to
Annual Report 2022 Notes to the Financial Statements | 55
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
settle the present obligation, its carrying amount is the
present value of those cashflows. When some or all of
the economic benefits required to settle a provision are
The Group recognises revenue from the sale of products
and the sale of scrap and when it transfers control of a
product to a customer, which is the point in time that the
customer obtains control of the goods being on
acceptance of the goods by the customer.
expected to be recovered from a third party, the receivable
Revenue is measured at the fair value of the consideration
is recognised as an asset if it is virtually certain that the
received or receivable. Sales revenue comprises sales of
reimbursement will be received and the amount of the
goods and services at net invoice values less returns,
receivable can be measured reliably.
trade allowances and applicable rebates.
Onerous contracts
Royalties
Present obligations arising under onerous contracts are
Royalty income is recognised on an accrual basis in
recognised and measured as a provision. An onerous
accordance with the substance of the relevant agreement.
contract is considered to exist where the Group has a
contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic
benefits expected to be received under it.
Restructuring
A restructuring provision is recognised when the Group
has developed a detailed formal plan for the restructuring
and has raised a valid expectation in those affected that
it will carry out the restructuring by starting to implement
the plan or announcing its main features to those affected
by it.
Royalties are recognised on the subsequent sale or usage,
and the performance obligation to which the royalty has
been allocated has been satisfied.
Rental income
The Group’s policy for recognition of income from
operating leases is described in note 1c (o).
Interest income
Interest income is accrued on a time basis, by reference to
the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts
The measurement of a restructuring provision includes
estimated future cash receipts through the expected life
only the direct expenditures arising from the restructuring,
of the financial asset to that asset’s net carrying amount.
which are those amounts that are both necessarily
entailed by the restructuring and not associated with the
( s ) Goods and Services Tax
ongoing activities of the entity.
Revenues, expenses and assets are recognised net of the
Provision for restoration and rehabilitation
amount of goods and services tax (GST) except:
(provision for make good on leased assets)
( i ) where the amount of GST incurred is not recoverable
A provision for restoration and rehabilitation (provision for
make good on leased assets) is recognised when there is
a present obligation as a result of production activities
undertaken, it is probable that an outflow of economic
benefits will be required to settle the obligation, and the
amount of the provision can be measured reliably.
The estimated future obligations include the costs of
removing the facilities and restoring the affecting areas.
( r ) Revenue Recognition
Revenue is recognised when (or as) a performance
obligation is satisfied, i.e. when ‘control’ of the goods or
services underlying the particular performance obligation
is transferred to the customers.
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 included in the cash flow
statement on a gross basis. The GST component of cash
flows arising from investing and financing activities which
is recoverable from, or payable to, the taxation authority,
is classified as operating cash flows.
56 | Annual Report 2022 Notes to the Financial Statements
1c. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
( t ) Earnings per share
( i ) Basic earnings per share
Basic earnings per share is calculated by dividing the
profit/(loss) attributable to equity holders of the
Group, excluding any costs of servicing equity other
than ordinary shares, by the weighted average
number of ordinary shares outstanding during the
year, adjusted for bonus elements in ordinary shares
issued during the year.
( ii ) Diluted earnings per share
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account the weighted average number of shares
assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
1d. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which
are described in note 1, management is required to make
Inventories
Note 9 sets out the categories of inventory carried.
The net realisable value of inventories is the estimated
selling price in the ordinary course of business less
estimated costs to sell which approximates fair value less
cost to sell. The key assumptions require the use of
management judgement and are reviewed annually.
These key assumptions are the variables affecting the
estimated costs to sell and the expected selling price.
Any reassessment of cost to sell or selling price in a
particular year will affect the cost of goods sold.
The Group also records impairment allowance on slow,
non-moving and obsolete inventories. The key
assumptions include future sales forecast, forecast LME
price and selection of specific inventory based on the past
consumption patterns vis-à-vis the inventory on hand.
Impairment of non-current assets inclusive of right
of use assets and goodwill
Goodwill and indefinite life intangible assets are tested for
impairment at each reporting period or more frequently if
events or changes in circumstances indicate that goodwill
or other intangibles might be impaired. This is performed
through a value-in-use discounted cash flow model.
judgements, estimates and assumptions about carrying
There is a degree of estimation uncertainty in the
values of assets and liabilities that are not readily apparent
estimates and judgements used in the preparation of
from other sources. The estimates and associated
assumptions are based on historical experience and
value-in-use models. The key assumptions applied
includes price, margin, volumes, working capital, capital
various other factors that are believed to be reasonable
expenditure, discount rate, economic factors and prior
under the circumstances, the results of which form the
period tax losses.
basis of making the judgements. Actual results may differ
from these estimates.
Note 14 and Note 17 sets out the categories of property,
plant and equipment held and right of use assets. In
The estimates and underlying assumptions are reviewed
assessing whether there is any indication that property,
on an ongoing basis. Revisions to accounting estimates
plant and equipment and right of use assets may be
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.
impaired, or whether a reversal of previous impairment
losses should be recognised, management has used,
among others, the following key assumptions:
( i )
the cyclical nature of both residential and commercial
Critical judgements in applying the Group’s
accounting policies
building activity,
The following are the critical judgements (apart from
those involving estimations which are dealt with above),
that management has made in the process of applying the
( ii ) aluminium prices which impact margins to the extent
that price variations are passed onto customers or
not, and
Group’s accounting policies and that have the most
( iii ) anti-dumping outcomes in relation to import duties
significant effect on the amounts recognised in the
imposed on overseas suppliers.
financial statements.
Annual Report 2022 Notes to the Financial Statements | 57
1d. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY (CONTINUED)
The key assumptions required the use of management
judgement and are reviewed biannually. If there are
indicators of impairment or reversal of impairment, a
value-in-use discounted cash flow model is prepared to
assess the extent of impairment or reversal of impairment.
Employee benefits
Key assumptions used in the calculation of leave benefit
provisions at balance date:
( i )
future on-cost rates,
( ii ) experience of employee departures and period of
service, and
Incremental borrowing rate (AASB 16)
The rate is defined as the rate of interest that the lessee
would have to pay to borrow over a similar term and with
a similar security the funds necessary to obtain an asset
of a similar value to the right-of-use asset in a similar
economic environment.
Deferred taxation
The recognition of deferred tax assets is based upon
whether it is more likely than not that sufficient and
suitable taxable profits will be available in the future
against which the reversal of temporary differences can
be deducted and unrecognised tax losses utilised.
To determine the future taxable profits, reference is made
to the latest available profit forecasts. Relevant tax law is
considered to determine the availability of the losses to
offset against the future taxable profits. Recognition of
( iii ) future increase in wages and salaries.
deferred tax assets therefore involves judgement
Provision for customer claims
regarding the future financial performance of the
particular legal entity or tax group in which the deferred
Provision for customer claims are measured at the
tax asset has been recognised together with availability
present value of management’s best estimate of the
of such losses.
expenditure required to settle the present obligation at the
statement of the financial position date based on claims
assessors report.
Useful lives of property, plant and equipment
1e. COMPARATIVE INFORMATION
Where necessary, comparative amounts have been
reclassified and repositioned for consistency with current
period disclosures. However, there are none during
The Group reviews the estimated useful lives of property,
the year.
plant and equipment at the end of each annual reporting
period. During the financial year, the directors determined
that there were no revisions to the useful lives of property,
plant and equipment.
Lease renewal
The Group reassess whether it is reasonably certain to
exercise an extension option, or not to exercise a
termination option, upon the occurrence of either a
significant event or a significant change in
circumstances that:
•
is within the control of the Group; and
• affects whether the Group is reasonably certain
to exercise an option not previously included in its
determination of the lease term, or not to exercise an
option previously included in its determination of the
lease term.
58 | Annual Report 2022 Notes to the Financial Statements
2 PROFIT FOR THE YEAR
(A) OTHER EXPENSES
Profit before tax includes the following specific net expenses:
Inventory:
Write-down of inventory to net realisable value
Reversal of write-down of inventory
Note
9
Amortisation of intangibles assets
Total amortisation
Depreciation – owned assets
Buildings
Leasehold improvements
Plant and equipment
Total depreciation – owned assets
Depreciation – right of use assets
Buildings
Plant and equipment
Total depreciation – right of use assets
Total depreciation and amortisation
Occupancy costs
Site costs
Expense relating to leases of low value assets
Other charges against assets
(Decrease)/increase in impairment of trade receivables
Employee benefit expense
Post-employment benefits:
– defined contribution plans
Equity-settled share-based payments
Termination benefits
Other employee benefits
Finance costs
Interest and finance charges paid/payable
– third party financier
Net finance costs are comprised of:
Interest and fees on bank overdrafts and loans
Interest component of lease liabilities
Impact of discounting on long-term provisions
Total interest expense
Other expenses
Other labour cost
Utilities
Insurance
Other
Total other expenses
(B) GAINS AND LOSSES
Net gain/(loss) on foreign exchange
Net gain on disposal of property, plant and equipment
CONSOLIDATED
2022
$’000
2,929
(25)
2,904
212
212
311
537
6,473
7,321
12,067
1,718
13,785
21,318
4,969
4,969
80
(183)
7,687
982
59
95,194
103,922
6,350
2,000
4,350
(31)
6,319
11,087
9,441
3,104
11,302
34,934
1,349
–
2021
$’000
1,321
(117)
1,204
189
189
175
399
5,904
6,478
11,523
1,980
13,503
20,170
4,087
4,087
88
280
6,848
590
58
89,399
96,895
5,260
878
4,382
500
5,760
10,990
8,049
2,364
17,505
38,908
(159)
109
NOTES TO THE FINANCIAL STATEMENTS
3 REVENUE AND OTHER INCOME
Revenue from continuing operations
Sales revenue – sale of goods (i)
Other revenue
Scrap revenue (i)
Total other revenue
Other income
Royalties
Sub-lease rental income
Other miscellaneous income
Interest – other
(i) Recognised at a point in time.
4 INCOME TAX
Current tax:
Current year
Deferred tax:
Annual Report 2022 Notes to the Financial Statements | 59
CONSOLIDATED
2022
$’000
2021
$’000
643,284
550,854
49,222
49,222
–
3,319
2
125
3,446
42,607
42,607
–
2,721
2
–
2,723
–
–
Origination and reversal of temporary differences
8,365
9,430
Carry forward tax losses
Income tax benefit
The benefit for the year can be reconciled to profit before tax as follows:
Profit before income tax benefit
Income tax calculated @ 30% (2021:30%)
Tax effect of non-assessable / non-deductible items:
Effect of expenses that are not deductible or taxable in determining
8,365
9,430
32,388
9,716
33,313
9,994
taxable profit
455
481
Tax effect of utilisation of tax losses and temporary differences not
previously recognised
(10,171)
(10,475)
Previously unrecognised and unused tax losses and temporary differences
now recognised as deferred tax assets
Income tax benefit recognised in profit or loss
8,365
8,365
9,430
9,430
60 | Annual Report 2022 Notes to the Financial Statements
5 CHANGES IN ACCOUNTING ESTIMATES
There were no significant changes in accounting estimates.
6 SEGMENT INFORMATION
The information reported to the Managing Director, as the Group’s chief operating decision maker, for the purposes of
resource allocation and assessment of performance is focused on the type of goods supplied, being aluminium products.
As such, in 2021 and 2022, the Group operated in one reportable segment under AASB 8 Operating Segment.
Major Products and Services
The Group produces a wide range of extruded aluminium products and systems. It distributes those manufactured
products in addition to a small number of bought-in products through two distribution channels.
The Group supplies to three market segments through each of its distribution channels:
• Residential – supply of aluminium and other components for windows and doors, showers and wardrobes and
security products,
• Commercial – supply of aluminium and other components for windows and doors, internal fit outs and other
commercial building related products, and
•
Industrial – supply of aluminium extrusions and rolled products for industrial uses.
Management does not report on the revenues from external customers for each of the market segments.
Geographic Information
The Group operates in one geographical area, Australia.
Information About Major Customers
There are no individual major customers who contributed more than 10% of the Group’s revenue in either the Financial Year
or in 2021.
CONSOLIDATED
2022
$’000
2021
$’000
7 CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash at bank and cash in hand
48,988
50,132
Annual Report 2022 Notes to the Financial Statements | 61
CONSOLIDATED
8 CURRENT ASSETS – TRADE AND OTHER RECEIVABLES
Trade receivables – at amortised cost
Loss allowance (i)
Other receivables
Disclosed in the financial statements as:
Current trade and other receivables
Non-current other receivables
2022
$’000
90,443
(242)
90,201
1,125
91,326
2021
$’000
91,151
(425)
90,726
5,564
96,290
91,326
96,290
–
–
91,326
96,290
The average credit period on sales of goods is approximately 43 days (2021: 50 days). No interest is charged on
trade receivables.
CONSOLIDATED
(i) Movement in the loss allowance.
Balance at beginning of the financial year
Amounts written off during the financial year
Increase in allowance recognised in profit or loss
Balance at end of the financial year
2022
$’000
(425)
243
(60)
(242)
2021
$’000
(145)
112
(392)
(425)
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected
credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the
debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, general
economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the
forecast direction of conditions at the reporting date. Allowances are made for known doubtful debts at the time of
appointment of administrators, liquidators, or other formal insolvency events.
Included in the Group’s trade receivables are debtors with balances in 61 days and over of $594,000 (2021: $530,000),
refer to note 31(h). The Group has not provided all of these balances as the Group believes that these past due balances
are still recoverable. In relation to some of the balances the Group holds personal property securities registrations and/or
personal guarantees and/or trade indemnity insurance for 80% of the amount outstanding (after applying the deductible).
The average age of these receivables is 79 days (2021: 92 days).
62 | Annual Report 2022 Notes to the Financial Statements
8 CURRENT ASSETS – TRADE AND OTHER RECEIVABLES (CONTINUED)
Trade receivables risk profile:
Current
1–30 days past due
31–60 days past due
61+ days past due
Total
CONSOLIDATED
2022
$’000
70,226
17,744
1,879
396
90,245
2021
$’000
72,261
16,411
1,706
449
90,827
Included in the loss allowance is the expected credit loss for individually impaired trade receivables with a balance of
$198,000 (2021: $324,000). The impairment recognised represents the difference between the carrying amount of these
trade receivables and the present value of the expected proceeds.
Current
1–30 days past due
31–60 days past due
61+ days past due
Total
CONSOLIDATED
2022
$’000
–
–
–
198
198
2021
$’000
–
243
–
81
324
Major concentrations of credit risk are in the construction, transport, consumer durable and electrical industries in
Australia. Furthermore, the Company has credit insurance cover which requires ongoing management of credit accounts
with monthly reports provided to the Insurer. Accordingly, there is no further credit provision required in excess of the loss
allowance. The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery.
9 CURRENT ASSETS – INVENTORIES
Raw materials and stores
Work in progress
Finished goods
CONSOLIDATED
2022
$’000
25,617
3,631
125,629
154,877
2021
$’000
21,659
3,875
104,973
130,507
All inventories are net of allowance for obsolescence and are expected to be recovered within 12 months. Included in the
inventories balance is inventories in transit of $29.760 million (2021: $36.513 million).
Annual Report 2022 Notes to the Financial Statements | 63
CONSOLIDATED
2022
$’000
2021
$’000
10 CURRENT ASSETS – PREPAYMENTS
Prepayments
848
723
11 DEFERRED TAX ASSETS
The following is a reconciliation of the deferred tax assets recognised by the Group and movements during the current and
prior reporting period.
Balance at 1 January 2021
Benefit recognised in the profit
Balance at 1 January 2022
Benefit recognised in the profit
Balance at end of the financial year
TAX LOSSES AND
TEMPORARY
DIFFERENCES
$’000
5,905
9,430
15,335
8,365
23,700
TOTAL
$’000
5,905
9,430
15,335
8,365
23,700
At the reporting date, the Group has unused tax losses of $208,596,113 (2021: $245,374,998) available to offset against
future taxable profits and $82,058,874 (2021: $79,486,000) deductible temporary differences which would reverse
in the future.
The Group has recognised a deferred tax asset of $23,700,000 (2021: $15,335,000) representing both carry forward tax
losses and deductible temporary differences. These tax losses may be carried forward indefinitely, however subject to
income tax recoupment rules in subsequent years. The recognition of the deferred tax assets is dependent on the three
years forecasted taxable profits. The Group has taken a view that it is probable to achieve forecasted taxable profits in the
next three years against which this deferred tax asset recognised would be utilised.
The group has recognised deferred taxes amounting to $11,180,000 in respect of deductible temporary differences and no
deferred tax asset is recognised on the balance temporary differences of $44,790,000 based on management assessment
that they will not reverse in foreseeable future.
In respect of carried forward tax losses, the group has recognised taxes amounting to $12,520,000 and no deferred tax
asset recognised on balance of the available tax losses amounting to $166,864,000.
The total unrecognised deferred taxes amount to $63,496,496 (2021: $82,124,027) as of reporting date.
64 | Annual Report 2022 Notes to the Financial Statements
12 NON-CURRENT ASSETS – INVESTMENTS
Details of subsidiaries
The financial statements incorporate the assets, liabilities and results of the following subsidiaries:
EQUITY HOLDING
2022
%
100
2021
COUNTRY OF
%
INCORPORATION
100
Australia
ENTITY NAME
Austex Dies Pty Limited
13 RELATED PARTIES
Parent entities
The ultimate parent entity within the Group is Capral Limited.
Equity interests in controlled entities
Interests in controlled entities are set out in Note 12.
Transactions with key management personnel
Refer to Note 37 in relation to securities granted and forfeited during the Financial Year under the Long Term Incentive Plan
that include rights granted and shares issued, to Capral’s Managing Director and Chief Financial Officer (who are key
management personnel).
Details of the compensation of, and transactions with, each Director of the Company and key management personnel of the
Group are set out in the Directors’ Report and in particular, the Remuneration Report.
Transactions with other related parties
In 2022, the parent entity has settled a non-interest-bearing loan of $1,000,000 (2021: $700,000) advanced from a controlled
entity, Austex Dies Pty Limited. The loan was payable on demand.
The Company has entered into the following transactions with controlled entities:
• Purchase of dies of $4,845,482 (2021: $4,891,151) – Austex Dies Pty Limited
These transactions were conducted on arm’s length commercial terms and conditions at market rates.
During the Financial Year, the Company received a dividend of $1,000,000 (2021: $700,000) from Austex Dies Pty Limited.
Annual Report 2022 Notes to the Financial Statements | 65
CONSOLIDATED
2022
$’000
2021
$’000
14 PROPERTY, PLANT AND EQUIPMENT
Freehold land
At valuation (i)
Accumulated depreciation
Net book amount
Buildings
At valuation (i)
Accumulated depreciation
Net book amount
Leasehold improvements
At cost
Accumulated depreciation
Accumulated impairment
Net book amount
Total land and buildings
Plant, machinery and equipment
At cost
Accumulated depreciation
Accumulated impairment
Net book amount
Capital work in progress at cost
Net plant, machinery and equipment
Total property, plant and equipment – net book value
The following useful lives are used in the calculation of depreciation:
Buildings
20–33 Years
Leasehold improvements
5–25 Years
Plant and equipment
3–25 Years
(i) Valuations of land and building:
1,700
–
1,700
5,628
(747)
4,881
14,257
(8,646)
(1,970)
3,641
10,222
1,700
–
1,700
5,628
(436)
5,192
12,925
(8,159)
(1,970)
2,796
9,688
229,805
223,387
(159,515)
(153,397)
(32,099)
(32,099)
38,191
8,231
46,422
56,644
37,891
5,616
43,507
53,195
An independent valuation of the Group’s land and buildings was performed in December 2021 using Capitalisation and
Direct Comparison approaches to determine the fair value of the land and buildings. The valuations, which conform to
International Valuation Standards, were determined by reference to recent market transactions on arm’s length terms at the
time. The fair value of the Land and Buildings is $1,700,000 and $5,000,000 respectively.
66 | Annual Report 2022 Notes to the Financial Statements
14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Reconciliations
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the
current and prior financial year are set out below:
FREEHOLD
LAND
BUILDINGS
LEASEHOLD
PLANT AND
CAPITAL WORK
AT FAIR
AT FAIR
IMPROVEMENTS
EQUIPMENT
IN PROGRESS
VALUE
VALUE
AT COST
AT COST
AT COST
TOTAL
$’000
$’000
$’000
$’000
$’000
$’000
CONSOLIDATED
2022
Opening net book amount
1,700
5,192
2,796
37,891
Additions
Business acquisition
Disposals
Transfers
Revaluation
Depreciation charge (Note 2(a))
Net book amount at
31 December 2022
2021
Additions
Business acquisition
Disposals
Transfers
Revaluation
Depreciation charge (Note 2(a))
Net book amount at
31 December 2021
–
–
–
–
–
–
–
–
–
–
–
912
–
(17)
487
–
4,113
–
–
–
(311)
(537)
(6,473)
2,660
(3,202)
5,616
5,817
–
–
–
–
53,195
10,842
–
(17)
(55)
–
(7,321)
1,700
4,881
3,641
38,191
8,231
56,644
–
–
–
–
500
–
–
–
–
–
2,574
(175)
2,591
589
–
–
15
–
30,401
7,921
4,508
(22)
987
–
(399)
(5,904)
1,829
5,016
–
–
(1,229)
–
–
38,814
13,526
4,508
(22)
(227)
3,074
(6,478)
1,700
5,192
2,796
37,891
5,616
53,195
Opening net book amount
1,200
2,793
Impairment of non-current assets inclusive of right of use assets and goodwill
At each reporting date, the Group reviews the carrying amounts of its tangible, intangible and right-of-use 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 the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit (CGU) to which that asset belongs. Management views the Group as
representing one CGU.
Annual Report 2022 Notes to the Financial Statements | 67
14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
If there is an indication of impairment, the recoverable amount of property, plant & equipment, goodwill and intangible
assets will be determined by reference to a value in use discounted cash flow valuation of the Group, utilising financial
forecasts and projections. Goodwill has resulted from the business combinations in the previous year (Note 39).
Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might
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 post-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. Cash flows that may result from prior period tax losses are not taken into account. If the
recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset
(CGU) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.
The result of Impairment assessment as at 31 December 2022
As a result of the non-current assets recoverable amount assessment performed, Capral has determined that no
impairment write-down of non-current assets as at 31 December 2022 was necessary. The recoverable amount of the CGU
estimated by management exceeded the carrying amount of assets by $4,637,000. However, management view that no
reversal of impairment is required due to the uncertainty of the performance of the construction industry and its impact
on margins.
The key assumptions used in preparing the value in use cash flow valuation as at 31 December 2022 are as follows:
The table below shows key assumptions in the value in use calculation as at 31 December 2022 and value of the input to
which the key assumption must change in isolation for the estimated recoverable amount to be equal to its carrying value.
WACC (Post-tax)
Average volumes increase 2023–27 p.a.
Long-term growth rate
INPUT TO THE MODEL
BREAKEVEN INPUT
11.50%
0.38%
1.00%
11.73%
0.30%
0.35%
The valuation is based on budget and projected cash flows for a 5-year period commencing January 2023 with a terminal
value being applied at the end of this period. The cash flow assumptions are based on board approved budgets for the
period from January 2023 to December 2023. Beyond this date cash flow projections until 31 December 2027 are based on
projected volume growth and expected improvements in EBITDA per tonne (refer below). Sales volumes are projected to
grow at 1% per annum from 2024. This growth rate corresponds with the average long-term growth rate based on external
economic sources.
The value in use cash flow valuation is very sensitive to price and the discount rate.
Price and Margins
In setting price and margin assumptions, historical performance trends and the impact of previous price increases were
reviewed in assessing the timing and quantum of future price increases.
Recent history in relation to direct costs and the impact of changing volumes on manufacturing variances were assessed
in setting assumptions on absorbed conversion costs.
In forecasting the margin, Management has considered the production capacity of Capral compared to current volumes
and concluded that increase in production volumes to satisfy demand expected by independent market predictions can be
attained by predominately increasing variable cost with very limited additional fixed cost expenditure. This is reflected in
the resultant average EBITDA per tonne increase of 1.0% per annum from 2024 to 2027. A 0.15% underperformance in
forecasted margin, in isolation, would reduce the headroom to nil but would not result in an impairment charge.
68 | Annual Report 2022 Notes to the Financial Statements
14 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Volumes
In determining assumptions in relation to sales volumes into the commercial and residential/domestic market, Capral have
based these on reputable third-party long term economic forecast reports with reference to historical performance and
seasonal trends. The volume projections estimate the sales volumes at around 73,000 tonnes at the end of the
5-year period.
Working Capital and Capital Expenditure
These assumptions were set in light of strategic initiatives and approved maintenance and safety capital expenditure
of an average around $5,500,000 per annum, with working capital flexed in relation to the assumed production capacity for
volumes throughout the forecast period and historical performance and considering revisions to trading terms with key
suppliers, customers and external market environment.
Discount rate
A discount rate of 11.5%, representing the Company’s post-tax weighted average cost of capital has been applied to the
cash flow projections.
Economic Factors
Assumptions including Gross Domestic Production (GDP), the Consumer Price Index (CPI), expected wage and salary
increases, foreign exchange and the future impact of aluminium prices have been made with reference to third party
economic forecasts and the Company’s strategic plans and budgets.
Prior Period Tax Losses
Cash flows that may result from prior period tax losses are not taken into account in determining the recoverable amount
of assets.
OTHER INTELLECTUAL
PROPERTY
SOFTWARE
$’000
$’000
15 OTHER INTANGIBLES ASSETS
CONSOLIDATED
2022
Cost
Accumulated amortisation
Accumulated impairment
Net book value
2021
Cost
Accumulated amortisation
Accumulated impairment
Net book value
15,937
(8,368)
(7,560)
9
15,927
(8,367)
(7,560)
–
25,083
(21,977)
(2,466)
640
24,932
(21,766)
(2,466)
700
Impairment assessment is performed based on assumptions and estimates as disclosed in Note 14.
TOTAL
$’000
41,020
(30,345)
(10,026)
649
40,859
(30,133)
(10,026)
700
Annual Report 2022 Notes to the Financial Statements | 69
15 OTHER INTANGIBLES ASSETS (CONTINUED)
Reconciliations
Reconciliations of the carrying amounts of each class of intangibles at the beginning and end of the current Financial Year
are set out below:
OTHER INTELLECTUAL
PROPERTY
SOFTWARE
$’000
$’000
TOTAL
$’000
CONSOLIDATED
2022
Opening net book amount
Additions
Disposals
Transfers
Amortisation
Net book amount at 31 December 2022
2021
Opening net book amount
Additions
Disposals
Transfers
Amortisation
Net book amount at 31 December 2021
16 GOODWILL
COST
At 31 December 2021
Business acquisition – Note 39
At 31 December 2022
ACCUMULATED DEPRECIATION
At 31 December 2021
Amortisation
At 31 December 2022
–
10
–
–
(1)
9
–
–
–
–
–
–
700
96
–
55
(211)
640
321
341
–
227
(189)
700
Consolidated
2022
$’000
3,070
–
3,070
–
–
–
700
106
–
55
(212)
649
321
341
–
227
(189)
700
2021
$’000
–
3,070
3,070
–
–
–
Impairment assessment is performed based on assumptions and estimates as disclosed in Note 14.
70 | Annual Report 2022 Notes to the Financial Statements
17 RIGHT-OF-USE ASSETS
BUILDINGS
EQUIPMENT
PLANT &
$’000
$’000
CONSOLIDATED
COST
At 31 December 2021
Additions
Terminations
At 31 December 2022
ACCUMULATED DEPRECIATION
At 31 December 2021
Terminations
Depreciation charge
At 31 December 2022
NET BOOK VALUE
At 31 December 2022
At 31 December 2021
103,805
4,434
(3,196)
105,043
(32,787)
2,515
(12,067)
(42,339)
62,704
71,018
TOTAL
$’000
113,358
5,804
(3,196)
9,553
1,370
–
10,923
115,966
(5,258)
–
(1,718)
(6,976)
3,947
4,295
(38,045)
2,515
(13,785)
(49,315)
66,651
75,313
Impairment assessment is performed based on assumptions and estimates as disclosed in Note 14.
The Group leases several assets including buildings and plant and equipment, with average lease term of 4.5 years
(2021: 4.4 years) and 3.9 years (2021: 4.0 years) respectively.
The Group has options to purchase certain equipment for a nominal amount at the end of the lease term. The Group’s
obligations are secured by the lessor’s title to the leased assets for such leases.
The Group has renewed some of leases for buildings and equipment in the current financial year. The expired contracts
were replaced by new leases for identical underlying assets. This resulted in additions to right-of-use assets of $5.804
million in the current financial year (2021: $2.061 million)
18 ASSETS PLEDGED AS SECURITY
In accordance with the security arrangements of liabilities disclosed in Note 27, all assets of the Group have been pledged
as security. The holder of the security does not have the right to sell or repledge the assets other than in the event of
default under the principal finance agreement where the security is enforced.
19 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Annual Report 2022 Notes to the Financial Statements | 71
Trade payables (i)
Goods and services tax payable
Other payables
CONSOLIDATED
2022
$’000
92,819
1,728
18,188
2021
$’000
119,489
1,996
17,552
112,735
139,037
(i) The average credit period on purchases is 85 days from the end of the month (2021: 89 days). No interest is charged on the trade
payables. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
20 LEASE LIABILITIES
CONSOLIDATED
Current
Non-current
MATURITY ANALYSIS
Within one year
Later than one year but not later than five years
Later than five years
2022
$’000
16,158
77,874
94,032
16,158
53,837
24,037
94,032
2021
$’000
15,810
87,730
103,540
15,810
50,993
36,737
103,540
72 | Annual Report 2022 Notes to the Financial Statements
21 PROVISIONS
CURRENT
Employee benefits
Make good on leased assets1
Other2
NON-CURRENT
Employee benefits
Make good on leased assets1
Other
CONSOLIDATED
2022
$’000
13,776
169
3,956
17,901
2,332
4,974
–
7,306
2021
$’000
13,241
809
4,748
18,798
2,254
4,231
–
6,485
1 Provision for make good on leased assets comprises obligations relating to site closure and other costs associated with lease
rental properties.
2 Other current provisions include provisions for insurance claims and provisions for customer claims including metal returns net
of scrap and pricing adjustments.
Consolidated
EMPLOYEE
MAKE GOOD ON
BENEFITS
LEASED ASSETS
OTHER
TOTAL
MOVEMENTS IN CARRYING AMOUNTS
Carrying value at the beginning of the financial year
Provision utilised/released in the year
Additional amounts provided
Carrying value at the end of the financial year
$’000
15,495
(7,306)
7,919
16,108
22 DEFERRED INCOME – CURRENT
Deferred income – other
$’000
$’000
$’000
5,040
(904)
1,007
5,143
4,748
25,283
(1,033)
(9,243)
241
9,167
3,956
25,207
CONSOLIDATED
2022
$’000
153
153
2021
$’000
213
213
Annual Report 2022 Notes to the Financial Statements | 73
2022
No. 000
2021
No. 000
2022
$’000
2021
$’000
23 ISSUED CAPITAL
(A) SHARE CAPITAL
Ordinary shares: fully paid
17,767
17,193
433,433
430,588
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
(B) MOVEMENT IN ORDINARY SHARE CAPITAL
DATE
DETAILS
NUMBER
OF SHARES
ISSUE
PRICE
$’000
January 2021
Balance at the beginning of the financial year
16,562,669
–
426,965
March 2021
Shares issued pursuant to a dividend reinvestment plan
330,733
$6.2854
2,079
March 2021
Shares issued against performance rights
March 2021
Shares issued – deferred STIP
92,427
31,130
–
$4.14
–
129
September 2021
Shares issued pursuant to a dividend reinvestment plan
176,300
$8.0251
1,415
December 2021
Balance at the end of the financial year
January 2022
Balance at the beginning of the financial year
March 2022
Shares issued – deferred STIP
17,193,259
17,193,259
32,369
March 2022
Shares issued pursuant to a dividend reinvestment plan
321,654
March 2022
Shares issued against performance rights
December 2022
Balance at the end of the financial year
219,990
17,767,272
–
–
$7.44
$8.1
–
–
430,588
430,588
241
2,604
–
433,433
74 | Annual Report 2022 Notes to the Financial Statements
24 RESERVES AND ACCUMULATED LOSSES
Asset revaluation reserve
Equity-settled compensation reserve
Employee share reserve
Dividend reserve
Accumulated losses
24(A) MOVEMENTS IN RESERVES WERE:
Equity-settled compensation reserve
CONSOLIDATED
2022
$’000
4,088
12,891
(38)
74,338
91,279
2021
$’000
4,088
11,909
(225)
54,116
69,888
(334,986)
(343,351)
(243,707)
(273,463)
Balance at the beginning of the financial year
11,909
11,319
Expense recognised
Shares acquired on conversion of vested rights
982
–
590
–
Balance at the end of the financial year
12,891
11,909
Asset revaluation reserve
Balance at the beginning of the financial year
Revaluation increase
Balance at the end of the financial year
Employee share reserve
Balance at the beginning of the financial year
Funding provided
Employees shares on-market purchase
Balance at the end of the financial year
Dividend reserve
Balance at the beginning of the financial year
Net profit attributable to members of Capral
Dividends paid
Balance at the end of the financial year
24(B) ACCUMULATED LOSSES
Balance at the beginning of the financial year
Net profit for the year (Income tax benefit)
Balance at the end of the financial year
4,088
–
4,088
(225)
–
187
(38)
54,116
32,388
(12,166)
74,338
1,014
3,074
4,088
–
(225)
–
(225)
31,673
33,313
(10,870)
54,116
(343,351)
(352,781)
8,365
9,430
(334,986)
(343,351)
Annual Report 2022 Notes to the Financial Statements | 75
CONSOLIDATED
2022
$’000
2021
$’000
12,166
10,870
25 DIVIDENDS
Ordinary shares:
FRANKING CREDITS
Franking credits available for subsequent financial years based on a tax rate of
30% (2021:30%)
8,079
13,293
26 EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
CONSOLIDATED
2022
$
2.31
2.22
Net profit after tax used in the calculation of basic and diluted profit per share for 2022 was $40,753,000 (2021: $42,743,000).
The weighted average numbers of ordinary shares on issue used in the calculation of basic and diluted earnings per share were
17,649,632 and 18,366,893 (2021: 16,961,049 and 17,691,815) respectively.
CONSOLIDATED
27 STAND BY ARRANGEMENT AND CREDIT FACILITIES
27(A) SECURED FACILITIES
Total secured facilities
Facilities used:
Trade loan
Cash loan
Bank guarantees
Trade finance – drawn letters of credits
Trade finance – open letters of credits
Total facilities utilised
Total available facilities
27(B) BORROWINGS
Current:
Trade Loan
2021
$
2.52
2.42
2021
$’000
60,000
60,000
–
–
4,495
35,868
15,716
56,079
3,921
2022
$’000
90,000
90,000
24,083
–
4,371
18,743
6,814
54,011
35,989
24,083
–
76 | Annual Report 2022 Notes to the Financial Statements
27 STAND BY ARRANGEMENT AND CREDIT FACILITIES (CONTINUED)
Each trade instrument is approved individually and may result in temporary facility over utilisation due to timing of release
of instruments already expired.
The Multi-option Facility was increased to $90 million on 24 November 2022. To align with Capral’s ongoing requirements,
the Facility was reduced to $75 million from 1 January 2023 to closely align with Capral’s working capital requirement with
an expiry date of 30 April 2024.
The existing ANZ facilities consist of:
Secured:
• $90 million Multi-option Facility which includes a Trade Finance Loan Facility, Trade Instruments and Trade Finance
at 31 December 2022, which was revised to $75 million from 1 January 2023; and
• $5 million Standby Letter of Credit or Guarantee Facility.
Unsecured:
• $2.5 million Electronic Payaway Facility; and
• $0.5 million Commercial Card Facility.
• $1.3 million Asset Finance Facility
The trade loan facility has a maximum drawdown term of 90 days and with an ANZ defined variable base rate plus a margin.
28 COMMITMENTS FOR EXPENDITURE – CAPITAL
CONSOLIDATED
2022
$’000
2021
$’000
Commitments for the acquisition of plant and equipment contracted for at the
reporting date but not recognised as liabilities payable:
Within one year
1,880
3,895
29 COMMITMENTS FOR EXPENDITURE – LEASES
The recognition of a right-of-use asset and a lease liability at commencement for all leases, except for short-term leases
and leases of low value assets. Refer to note 20 for maturity analysis of lease liabilities at 31 December 2022.
At 31 December 2022, the Group is committed to $287,088 (2021: $342,547) for low value leases and has no short-term
lease commitments.
LEASE RECEIVABLE
Non-cancellable lease receivable
Within one year
Later than one year but not later than five years
Later than five years
CONSOLIDATED
2022
$’000
2,977
12,829
5,822
21,628
2021
$’000
2,862
12,331
9,080
24,273
Lease receivables relate to the sublease of office and plant premises with a lease term of 10 years, with an option to extend for a further
term of 5 years.
Annual Report 2022 Notes to the Financial Statements | 77
30 FAIR VALUE MEASUREMENT
Some of the Group’s assets and liabilities are measured at fair value at the end of each reporting period. The following table
gives information about how the fair values of these assets and liabilities are determined (in particular, valuation
technique(s) and input(s) used).
FAIR VALUE AS AT
ASSETS /
31/12/22
31/12/21
FAIR VALUE
VALUATION TECHNIQUE(S)
UNOBSERVABLE
RELATIONSHIP OF
LIABILITIES
$
$
HIERARCHY
AND KEY INPUT(S)
INPUT(S)
UNOBSERVABLE INPUT(S)
SIGNIFICANT
Foreign
currency
forward
contracts
(see note
31(f))
Assets – nil
Assets – nil
Level 2
Discounted cash flow.
n/a
n/a
Liabilities –
Liabilities –
828,359
66,807
Future cash flows are
estimated based on
forward exchange rate
(from observable forward
exchange rates at the end
of the reporting period)
and contract forward rates,
discounted at a rate that
reflects the credit risks of
various counterparties.
Land and
buildings
Land –
Land –
Level 3
Capitalisation and Direct
Comparable to
The higher/(lower) the
1,700,000
1,700,000
Comparison approaches.
recent market
comparable market
Buildings –
Buildings –
4,881,000
5,192,000
(Last assessed 2021)
transactions on
net rental amount and
arm’s length terms
the higher/(lower) the
at the time.
comparable market
sales transactions, the
higher the fair value.
31 FINANCIAL INSTRUMENTS
( a ) Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while
maximising the return to shareholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains unchanged from 2021.
The capital structure of the Group consists of debt, as disclosed in Note 27, cash and cash equivalents, and equity holders
of the parent, comprising issued capital, reserves and accumulated losses, as disclosed in Notes 7, 23 and 24 respectively.
The Directors review the capital structure on a regular basis, and at least annually. As a part of this review the Directors
consider the cost of capital and the risks associated with each class of capital. Based on the determinations of the
Directors, the Group will balance its overall capital structure through the payment of dividends, new share issues and share
buy-backs as well as the issue of new debt or the redemption of existing debt.
The Group prepares monthly management accounts, comprising Balance Sheet, Profit and Loss Statement and Cash Flow
Statement updates for the current financial year and the current year forecast. The forecast is used to monitor the Group’s
capital structure and future capital requirements, taking into account future capital requirements and market conditions.
78 | Annual Report 2022 Notes to the Financial Statements
31 FINANCIAL INSTRUMENTS (CONTINUED)
( a ) Capital risk management (continued)
The Group complied with its borrowing financial covenants under its current facility detailed in Note 27 as at 31 December
2022 and 31 December 2021 as follows:
FINANCIAL COVENANT DESCRIPTION
REQUIRED VALUE
ACTUAL VALUE
ACTUAL VALUE
2022
2021
EBITDA Interest Cover Ratio
(A ratio of EBITDA to Interest Expense)
Minimum Tangible Net Worth
> 3.00:1
23.75:1
45.61:1
(Tangible Net Worth – Total Tangible Assets Less Total
> AUD 100.0m
AUD 191.5m
AUD 168.4m
Liabilities)
Borrowing Base Ratio
(A ratio of Aggregate Facility Amount Owing to Eligible
< 0.70:1
0.54:1
0.62:1
Debtors owing up to 90 days)
Distributions
(Any payment or distribution of money or other assets
Variable*
AUD 12.17m
AUD 10.87m
to shareholders)
Inventory Cover Ratio
*
lower than the profit of prior year
( b ) Significant accounting policies
>0.8:1
0.88:1
0.87:1
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in Note 1(c).
( c ) Categories of financial instruments
Financial Assets
Trade and other receivables
Cash and cash equivalents
Other financial assets1
Financial Liabilities
Trade and other payables
Borrowings
Lease liabilities
Other financial liabilities2
CONSOLIDATED
2022
$’000
91,326
48,988
11
2021
$’000
96,290
50,132
–
112,735
139,037
24,083
94,032
828
–
103,540
67
1 security deposit for a site energy supply.
2
foreign exchange contract mark-to-market $828,000 (2021: foreign exchange contract mark-to-market $67,000).
Annual Report 2022 Notes to the Financial Statements | 79
31 FINANCIAL INSTRUMENTS (CONTINUED)
( d ) Financial risk management objectives
The Group’s treasury function monitors and manages the financial risks relating to the operations of the Group through
internal risk reports. These risks include market risk (including currency risk, interest rate risk and equity price risk),
credit risk and liquidity risk. These risks are analysed below.
( e ) Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (refer note 31(f))
and interest rates (refer note 31(g)). From time to time, the Group enters into a variety of derivative financial instruments to
manage its exposure to interest rate and foreign currency risk, including foreign exchange forward contracts to hedge the
exchange rate risk arising on the purchase of aluminium log and rolled product from overseas in US dollars.
At a Group and Company level, market risk exposures are measured using a sensitivity analysis. There has been no
material change to the Group’s exposure to market risks or the manner in which it manages and measures the risk during
the Financial Year.
( f ) Foreign currency risk management
The Group undertakes certain transactions in foreign currencies, resulting in exposures to exchange rate fluctuations.
Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
It is the policy of the Group to enter into forward foreign exchange contracts from time to time to manage any material risk
associated with anticipated foreign currency sales and purchase transactions.
The carrying amount of the Group’s and Company’s foreign currency denominated monetary assets and monetary
liabilities at the reporting date is as follows:
USD (cash)
EURO (cash)
USD (trade payables)
EURO (trade payables)
JPY (trade payables)
USD (trade receivables)
CONSOLIDATED
2022
$’000
12,753
767
2021
$’000
20,423
98
(11,923)
(18,205)
113
(22)
1,017
632
(23)
2,292
Foreign currency sensitivity
The Group is exposed to EUR, JPY and USD (2021: EUR, JPY and USD).
To mitigate foreign currency risk at reporting date, the Group entered into foreign exchange forward contracts.
The Group’s exposure to foreign exchange rate fluctuations was primarily limited to cash, trade payables and trade receivables
outstanding at reporting date denominated in currencies other than Australian dollar (AUD). The total value of trade payables
denominated in currencies other than the AUD at reporting date was $11,831,000 (2021: $17,596,000). The total value of trade
receivables denominated in currencies other than the AUD at reporting date was $1,017,000 (2021: $2,292,000).
The following table details the Group’s sensitivity to a 10% increase and decrease in the AUD against the relevant unhedged
foreign currency. 10% represents management’s assessment of the possible change in foreign exchange rates.
The sensitivity analysis includes only foreign currency denominated monetary items outstanding at 31 December 2022
and 31 December 2021 and adjusts their translation at the period end for a 10% change in foreign currency rates.
A positive number indicates an increase in profit.
80 | Annual Report 2022 Notes to the Financial Statements
31 FINANCIAL INSTRUMENTS (CONTINUED)
Profit or loss (after tax)
– AUD strengthens by 10% against USD
– AUD weakens by 10% against USD
– AUD strengthens by 10% against EUR
– AUD weakens by 10% against EUR
– AUD strengthens by 10% against JPY
– AUD weakens by 10% against JPY
Forward foreign exchange contracts
CONSOLIDATED
2022
$’000
991
(1,212)
(10)
12
2
(2)
2021
$’000
1,447
(1,768)
(57)
70
2
(3)
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific material foreign currency
payments and receipts.
The following table details the forward foreign currency (FC) contracts outstanding at the end of the reporting period:
OUTSTANDING CONTRACTS
FOREIGN CURRENCY
FAIR VALUE
Buy EUR
Buy JPY
Buy CNH
Buy USD
31/12/22
FC$’000
31/12/21
FC$’000
31/12/22
$’000
31/12/21
$’000
GAIN/(LOSS)
GAIN/(LOSS)
420
4,620
240
1,763
4,145
240
5
–1
–1
22,336
40,356
(833)
(81)
–1
1
14
1 Fair value of the gain/(loss) was less than $1,000, hence, rounded down to nil.
( g ) Interest rate risk management
The Group interest rate risk arises from borrowings, cash and derivatives.
The Group is exposed to interest rate risk as the Group borrows funds at floating interest rates. Hedging activities are
evaluated regularly to align with interest rate views and defined risk appetite, ensuring optimal hedging strategies are
applied, by either positioning the balance sheet or protecting interest expense through different interest rate cycles.
The Group’s exposure to interest rate risk at the reporting date was considered insignificant and as a result the Group did
not enter into interest rate options.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed below.
Interest rate sensitivity
The sensitivity analysis below shows the effect on profit or loss after tax for the Financial Year if there is a change in
interest rates with all other variables held constant. This is determined by applying the change in interest rates to both
derivative and non-derivative instruments at the reporting date that have an exposure to interest rate changes. A 110-basis
point (1.1%) increase and a 110 basis point (1.1%) decrease represents Management’s assessment of the possible change
in interest rates (2021: 1bp or 0.01% increase and 1bp or 0.01% decrease). A positive number indicates an increase in profit.
Annual Report 2022 Notes to the Financial Statements | 81
31 FINANCIAL INSTRUMENTS (CONTINUED)
( g ) Interest rate risk management (continued)
Interest rate sensitivity (continued)
Profit or loss (after tax)
Impact of a 110bp (2021: 1bp) increase in AUD interest rates
– Cash and cash equivalents
Impact of a 110bp (2021: 1bp) decrease in AUD interest rates
– Cash and cash equivalents
( h ) Credit risk management
CONSOLIDATED
2022
$’000
377
(377)
2021
$’000
4
(4)
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has exposures to credit risk on cash and cash equivalents, receivables and derivative financial assets.
The credit risk on financial assets of the Group which have been recognised on the statement of financial position, other
than investments in shares, is generally the carrying amount, net of any allowances for doubtful debts.
The Group does not have any significant exposure to any individual customer or counterparty. Major concentrations of
credit risk are in the construction, transport, consumer durable and electrical industries in Australia. The Company has
credit insurance cover which requires ongoing management of credit accounts with monthly reports provided to the
Insurer. Experienced credit management and associated internal policies ensure constant monitoring of the credit risk for
the Company.
There is no concentration of credit risk with respect to receivables as the Group has a large number of customers.
The aging of gross trade receivables is detailed below:
Current
1–30 days
31–60 days
60+ days
CONSOLIDATED
2022
$’000
70,226
17,744
1,879
594
90,443
2021
$’000
72,262
16,653
1,706
530
91,151
( i ) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who ensure there is 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 banking facilities and
reserve borrowing facilities, complying with covenants, monitoring forecast and actual cash flows, and matching the
maturity profiles of financial assets and liabilities. Included in Note 27 is a list of additional undrawn facilities that the Group
has at its disposal to further reduce liquidity risk.
82 | Annual Report 2022 Notes to the Financial Statements
31 FINANCIAL INSTRUMENTS (CONTINUED)
( i ) Liquidity risk management (continued)
Liquidity and interest risk tables
Financial assets are made up of cash of $48,988,000 (2021: $50,132,000) and trade and other receivables of $91,326,000
(2021: $96,290,000). Cash is liquid and trade and other receivables are expected to be realised on average within 43 days
(2021: 50 days). Cash balances earn 2.40% interest per annum (2021: 0.00%). Trade and other receivables are interest-free.
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities.
The table has been prepared 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. The contractual maturity
is a fair representation of management’s expectations of actual repayments.
WEIGHTED
AVERAGE EFFECTIVE
LESS THAN
GREATER
INTEREST RATE
1 YEAR
1–3 YEARS
3–5 YEARS
THAN 5 YEARS
CONSOLIDATED
2022
Trade and other payables
Other financial liabilities
%
–
–
Borrowings
3.94
2021
Trade and other payables
Other financial liabilities
–
–
$’000
$’000
$’000
$’000
112,735
828
24,083
137,646
139,037
67
139,104
–
–
–
–
–
–
–
–
–
–
–
–
( j ) Fair value of financial instruments
The fair values of financial assets, financial liabilities and derivative instruments are determined as follows:
( i )
the fair value of financial assets and financial liabilities (excluding derivative instruments) are determined in
accordance with generally accepted pricing models based on the discounted cash flow analysis using prices from
observable market data; and
( ii )
the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available,
the discounted cash flow analysis is employed using observable market data for non-option derivatives. For option
derivatives, option pricing models are used with key inputs sourced from observable market data.
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in
the financial statements approximate their fair values.
Annual Report 2022 Notes to the Financial Statements | 83
32 CONTINGENT LIABILITIES
Capral has received customer claims relating to the supply of non-conforming marine grade plate. The plate was
manufactured by a third party, independently certified, imported and distributed by Capral. As stated in the 2020 Annual
Report and 2021 Managing Director’s AGM address, Capral supplied replacement plate to affected customers and this
plate was fully provided for in Capral’s 2020 accounts.
Some claims include a property damage and consequential loss component which have been submitted to Capral’s insurer.
Capral maintains the belief that it is not liable for any of these claims and as such Management continues ongoing
discussions with the insurer, supplier, and certifier (DNV-GL) in this regard. These claims, together with potential liability and
recourse against third parties, have been assessed. Based on assessments done and legal advice obtained, the directors
have made provision for what the Board believe Capral’s resulting liability could be. Any contingent liability in excess of the
amounts already provided is not able to be reliably estimated. The information usually required by AASB 137 (Provisions,
Contingent Liabilities and Contingent Assets) is not disclosed on the grounds that it can be expected to seriously prejudice
the outcome of negotiations and legal proceedings.
Separate from the item above, claims and possible claims, arise in the ordinary course of business against Capral entities.
Capral has fully provided for all known and determinable material claims.
Based on legal advice obtained, the Directors believe that any residual liability will not materially affect the financial position
of the consolidated entity.
During the year, there were no developments that would require management to reassess the sufficiency of the provision.
The Company’s bankers have granted guarantees in respect of rental obligations on lease commitments, use of utilities
infrastructure and international trade facilities. At 31 December 2022, these guarantees totalled $4,370,502
(2021: $4,494,942).
Capral’s bankers have issued letters of credit in respect of Capral’s purchases internationally. At 31 December 2022,
these open letters of credit totalled $6,814,372 (31 December 2021: $15,715,119).
33 REMUNERATION OF AUDITORS
During the year the auditor of the Group and parent entity and its related
practices earned the following remuneration:
Auditor of the Group and parent entity
Audit or review of financial reports of the entity or any entity in the
consolidated entity
Other services:
– tax compliance
– tax consulting
Total remuneration
CONSOLIDATED
2022
$
2021
$
340,400
327,100
37,250
45,750
31,500
32,550
423,400
391,150
It is the Group’s policy to employ the Company’s auditors, Deloitte Touche Tohmatsu, on assignments additional to their statutory duties
where their expertise and experience is considered invaluable to the assignment.
84 | Annual Report 2022 Notes to the Financial Statements
34 EVENTS AFTER REPORTING DATE
No matter or circumstance has arisen since the end of the Financial Year that has significantly affected, or may significantly
affect the Group’s operations, the results of those operations or the Group’s state of affairs in future financial years.
35 NOTES TO THE CASH FLOW STATEMENT
( i ) Reconciliation of cash and cash equivalents
Reconciliation of cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash and cash equivalents
includes cash on hand and at bank and short term deposits at call net of bank
overdrafts. Cash as at the end of the financial year as shown in the Statement
of Cash Flows is reconciled to the related items in the Statement of Financial
Position as follows:
Cash at bank and on hand
CONSOLIDATED
2022
$’000
2021
$’000
48,988
48,988
50,132
50,132
( ii ) Reconciliation of profit for the year to net cash flows from operating activities
Profit for the year
Non-cash items:
Depreciation and amortisation – owned assets
Depreciation and amortisation – right of use assets
Gain on sale of property, plant and equipment
Income tax benefit
Share-based payments expense
Interest income reclassified to investing activities
Change in assets and liabilities:
Decrease/(increase) in current receivables
Increase in financial assets
Increase in inventories
(Increase)/decrease in prepayments
(Decrease)/increase in trade and other payables
Increase/(decrease) in employee benefit provisions
(Decrease)/increase in other provisions
(Decrease)/increase in deferred income
Increase/(decrease) in other financial liabilities
Net cash provided by operating activities
40,753
42,743
7,533
13,785
–
(8,365)
982
(125)
4,964
(11)
6,667
13,503
(109)
(9,430)
590
–
(30,040)
–
(24,489)
(48,406)
(125)
(27,594)
2,578
(3,525)
(60)
761
7,062
1,794
61,049
(470)
5,300
86
(1,548)
41,729
Annual Report 2022 Notes to the Financial Statements | 85
35 NOTES TO THE CASH FLOW STATEMENT (CONTINUED)
( iii ) Details of finance facilities are included in note 27 to the financial statements.
( iv ) Movement in financial activities
The following table details changes in the Group’s liabilities arising from financial 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 statement of cash flows as cash flows from financing activities.
MOVEMENTS IN FINANCING ACTIVITIES
Lease liabilities
Opening balance
Financing cash flows
New leases
Retired or changes to leases
Closing balance
CONSOLIDATED
2022
$
2021
$
103,540
(14,548)
5,804
(764)
94,032
96,476
(14,951)
26,039
(4,024)
103,540
( v ) Non-cash financing activities
There were no non-cash financing activities other than above during the Financial Year or the 2021 year.
86 | Annual Report 2022 Notes to the Financial Statements
36 PARENT ENTITY DISCLOSURES
FINANCIAL POSITION
Assets
Current assets – third parties
Total assets
Liabilities
Current liabilities – third parties
Total liabilities
Equity
Issued capital
Accumulated losses
Equity-settled compensation reserve
Asset revaluation reserve
Employee share reserve
Dividend reserve
Total Equity
FINANCIAL PERFORMANCE
Profit for the year
Other comprehensive income
Total comprehensive profit for the year
Contingent liabilities of the parent entity
Refer note 32
COMPANY
2022
$’000
2021
$’000
296,060
445,137
171,615
256,658
277,343
423,578
174,204
267,765
433,433
430,588
(335,219)
(343,649)
12,891
3,074
(38)
74,338
188,479
40,818
–
40,818
11,909
3,074
(225)
54,116
155,813
42,239
3,074
45,313
Commitments for the acquisition of property, plant and equipment by the
parent entity
Commitments for the acquisition of property, plant and equipment by the
parent entity
Within one year
1,880
3,895
Annual Report 2022 Notes to the Financial Statements | 87
37 SHARE-BASED PAYMENTS
Performance Share Rights
Executive and Senior Management
Refer to section 2 of the Remuneration Report for details of rights issued under the Long Term Incentive Plan.
The following share-based payment arrangements were in existence during the current reporting period:
PERFORMANCE RIGHT
NUMBER AS
LAST TESTING
PRICE
GRANT DATE
EXERCISE
FAIR VALUE AT
SERIES (LTIP)
AT 31 DEC 22
GRANT DATE
DATE
Issued 3 March 20201
Issued 3 March 20201
Issued 3 March 20212
Issued 3 March 20212
Issued 8 March 20223
Issued 8 March 20223
90,325
90,325
82,350
82,350
69,500
69,500
3/03/2020
31/12/2022
3/03/2020
31/12/2022
3/03/2021
31/12/2023
3/03/2021
31/12/2023
8/03/2022
31/12/2024
8/03/2022
31/12/2024
$
–
–
–
–
–
–
$
2.100
2.820
4.180
5.490
4.910
6.780
1
In accordance with the terms of the LTIP arrangement, performance rights issued during the financial year ended 31 December 2020
have an average vesting date of 1 March 2023.
2
In accordance with the terms of the LTIP arrangement, performance rights issued during the financial year ended 31 December 2021
have an average vesting date of 1 March 2024.
3
In accordance with the terms of the LTIP arrangement, performance rights issued during the financial year ended 31 December 2022
have an average vesting date of 1 March 2025.
The following share-based payment arrangements were in existence during the comparative reporting period:
EXERCISE
FAIR VALUE AT
NUMBER AS
LAST TESTING
PRICE
AT 31 DEC 21
GRANT DATE
DATE
Issued 22 March 20191
70,830
22/03/2019
31/12/2021
Issued 22 March 20191
70,830
22/03/2019
31/12/2021
Issued 3 March 20202
Issued 3 March 20202
Issued 3 March 20213
Issued 3 March 20213
90,325
90,325
82,350
82,350
3/03/2020
31/12/2022
3/03/2020
31/12/2022
3/03/2021
31/12/2023
3/03/2021
31/12/2023
$
–
–
–
–
–
–
GRANT DATE
$4
2.250
3.150
2.100
2.820
4.180
5.490
1
In accordance with the terms of the LTIP arrangement, performance rights issued during the financial year ended 31 December 2019
have an average vesting date of 1 March 2022.
2
In accordance with the terms of the LTIP arrangement, performance rights issued during the financial year ended 31 December 2020
have an average vesting date of 1 March 2023.
3
In accordance with the terms of the LTIP arrangement, performance rights issued during the financial year ended 31 December 2021
have an average vesting date of 1 March 2024.
4 Shown as post 3 November 2020 share consolidation equivalent fair value.
88 | Annual Report 2022 Notes to the Financial Statements
37 SHARE-BASED PAYMENTS (CONTINUED)
INPUTS INTO THE MODEL
08 MARCH 2022
03 MARCH 2021
03 MARCH 2020
22 MARCH 2019
PERFORMANCE RIGHTS (LTIP)
Grant date
Dividend yield
Risk free yield
Expected volatility
Last testing date
Exercise price
Share price at grant date^
Performance right life
8/03/2022
3/03/2021
3/03/2020
22/03/2019
7.9%
1.6%
45%
6.5%
0.3%
55%
9.5%
0.5%
47.5%
7.7%
1.4%
45%
31/12/2024
31/12/2023
31/12/2022
31/12/2021
n.a.
$8.570
3 years
n.a.
$6.670
3 years
n.a.
$3.750
3 years
n.a.
$3.900
3 years
^ Shown as post 3 November 2020 share consolidation equivalent share price.
Managing Director
During the Financial Year, 49,000 rights were issued to Mr A. Dragicevich.
During the comparative financial year, 86,300 rights were issued to Mr A. Dragicevich.
The following rights were in existence during the current reporting period, subject to the achievement of performance
conditions and have been independently valued as follows:
EXERCISE
FAIR VALUE AT
NUMBER AS
LAST TESTING
PRICE
SHARE RIGHTS
AT 31 DEC 22
GRANT DATE
DATE
Issued 29 April 20201
Issued 29 April 20201
Issued 28 April 20212
Issued 28 April 20212
Issued 27 April 20223
Issued 27 April 20223
51,335
29/04/2020
31/12/2022
51,335
29/04/2020
31/12/2022
43,150
28/04/2021
31/12/2023
43,150
28/04/2021
31/12/2023
24,500
27/04/2022
31/12/2024
24,500
27/04/2022
31/12/2024
$
–
–
–
–
–
–
GRANT DATE
$4
$1.560
$2.040
$5.170
$6.430
$5.820
$7.770
1
In accordance with the terms of the LTIP arrangement, performance rights issued during the Financial Year ended 31 December 2020
have an average vesting date of 1 March 2023.
2
In accordance with the terms of the LTIP arrangement, performance rights issued during the Financial Year ended 31 December 2021
have an average vesting date of 1 March 2024.
3
In accordance with the terms of the LTIP arrangement, performance rights issued during the Financial Year ended 31 December 2022
have an average vesting date of 1 March 2025.
4 Shown as post 3 November 2020 share consolidation equivalent fair value.
Annual Report 2022 Notes to the Financial Statements | 89
37 SHARE-BASED PAYMENTS (CONTINUED)
The following rights were in existence during the comparative reporting period, subject to the achievement of performance
conditions and have been independently valued as follows:
EXERCISE
FAIR VALUE AT
NUMBER AS
LAST TESTING
PRICE
SHARE RIGHTS
AT 31 DEC 21
GRANT DATE
DATE
Issued 16 April 20191
Issued 16 April 20191
Issued 29 April 20202
Issued 29 April 20202
Issued 28 April 20213
Issued 28 April 20213
39,165
16/04/2019
31/12/2021
39,165
16/04/2019
31/12/2021
51,335
29/04/2020
31/12/2022
51,335
29/04/2020
31/12/2022
43,150
28/04/2021
31/12/2023
43,150
28/04/2021
31/12/2023
$
–
–
–
–
–
–
GRANT DATE
$4
$2.100
$3.000
$1.560
$2.040
$5.170
$6.430
1
In accordance with the terms of the LTIP arrangement, performance rights issued during the Financial Year ended 31 December 2019
have an average vesting date of 1 March 2022.
2
In accordance with the terms of the LTIP arrangement, performance rights issued during the Financial Year ended 31 December 2020
have an average vesting date of 1 March 2023.
3
In accordance with the terms of the LTIP arrangement, performance rights issued during the Financial Year ended 31 December 2021
have an average vesting date of 1 March 2024.
4 Shown as post 3 November 2020 share consolidation equivalent fair value.
INPUTS INTO THE MODEL
27 APRIL 2022
28 APRIL 2021
29 APRIL 2020
16 APRIL 2019
Grant date
Dividend yield
Risk free yield
Expected volatility
Last testing date
27/4/2022
28/4/2021
29/4/2020
16/4/2019
7.1%
2.6%
45%
5.8%
0.3%
55%
12.2%
0.2%
47.5%
8.0%
1.5%
45%
31/12/2024
31/12/2023
31/12/2022
31/12/2021
Share price at grant date^
Performance right life
$9.510
3 years
$7.580
3 years
$2.880
3 years
$3.750
3 years
^ Shown as post 3 November 2020 share consolidation equivalent share price.
90 | Annual Report 2022 Notes to the Financial Statements
37 SHARE-BASED PAYMENTS (CONTINUED)
The following table reconciles the outstanding securities granted to the Managing Director and senior management at the
beginning and end of the Financial Year:
PERFORMANCE RIGHTS
2022
2021
Number of share performance rights:
Balance at the beginning of the financial year
Granted during the financial year
Forfeited during the financial year
Vested during the financial year
Lapsed during the financial year
Balance at the end of the financial year
754,310
188,000
–
700,000
251,000
–
(219,990)
(92,427)
–
(104,263)
722,320
754,310
The performance rights outstanding at the end of the Financial Year were 722,320 (2021: 754,310), with a weighted
average remaining contractual life of 0.9 years.
38 KEY MANAGEMENT PERSONNEL COMPENSATION
The aggregate compensation made to directors and other members of key management personnel of the Company and
the Group is set out below:
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
CONSOLIDATED/COMPANY
2022
$
2021
$
2,023,258
1,894,750
100,645
84,840
–
–
–
–
488,720
689,032
2,612,623
2,668,622
39 BUSINESS COMBINATIONS
Capral Limited acquired certain assets and employee entitlements of the G James Extrusion Smithfield Business from
G James Extrusion Co. Pty. Ltd on 1 February 2021 for a total consideration of $10,302,000.
Consideration
Cash at Completion
Cash post Completion
Total Consideration
2021
$’000
7,100
3,202
10,302
Acquisition-related costs amounting to $48,000 were excluded from the consideration transferred. Further cost relating to
the integration of the acquired business was $65,000. Both these were recognised as an expense in the prior period,
within the ‘Other expenses’ line item in the Consolidated Statement of Comprehensive Income.
Annual Report 2022 Notes to the Financial Statements | 91
39 BUSINESS COMBINATIONS (CONTINUED)
Smithfield Extrusion Facility was primarily acquired to provide additional extrusion capacity in key New South Wales market
and reduce freight costs due to interstate production. In addition, the acquisition also facilitates better utilisation of other
production facilities and reducing occasional reliance on third party producers.
Fair value of assets acquired and liabilities assumed at the date of acquisition:
Current assets
Inventory
Non-current assets
Fixed assets
Current liabilities
Employee benefits
Total
Goodwill:
Consideration
Less: fair value of identifiable net assets acquired
Goodwill
Net cash outflow on purchase of a business:
Consideration paid in cash
Net cash outflow on purchase of a business
2021
$’000
3,194
4,508
(470)
7,232
10,302
(7,232)
3,070
(10,302)
(10,302)
The goodwill of $3,070,000 arising from the acquisition consisted mostly of the synergies and economies of scale expected
from combining the operations of Smithfield and Capral Group.
Impact of acquisition on the results of the Group
The acquired business contributed revenue of $22,275,000 and a profit for 2021 financial year of $626,000 to the group for
the period from 1st February 2021 to 31 December 2021.
Had the business combination been effected at 1st January 2021, the revenue of the Group would have been $595,303,000
and the profit for the year would have been $42,868,000.
92 | Annual Report 2022 Directors’ Declaration
Directors’ Declaration
The directors declare that:
( a )
in the directors’ opinion, there are reasonable grounds to believe that Capral will be able to pay its debts as and when
they become due and payable;
( b )
in the directors’ opinion, the attached 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 Capral and the consolidated entity;
( c )
in the directors’ opinion, the financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board; and
( d ) the directors have been given declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001.
On behalf of the directors
R. L. Wood-Ward
Chairman
Sydney
24 February 2023
A. M. Dragicevich
Managing Director
Annual Report 2022 Independent Auditor’s Report | 93
Independent Auditor’s Report
TO THE MEMBERS OF CAPRAL LIMITED
Deloitte Touche Tohmatsu
ABN 74 490 121 060
8 Parramatta Square
10 Darcy Street
Parramatta, NSW, 2150
Australia
Phone: +61 2 9840 7000
www.deloitte.com.au
Independent Auditor’s Report to the
Members of Capral Limited
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of Capral Limited (the “Company”) and its subsidiaries (the “Group”) which
comprises the consolidated statement of financial position as at 31 December 2022, the consolidated statement
of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
· Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its financial
performance for the year then ended; and
· Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
94 | Annual Report 2022 Independent Auditor’s Report
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
IImmppaaiirrmmeenntt oorr rreevveerrssaall ooff ttaannggiibbllee aanndd
iinnttaannggiibbllee aasssseettss
As at 31 December 2022, the Group had
goodwill of $3.070m, other intangible
assets of $0.649m, property, plant and
equipment of $56.644m (net of previously
recognised
of
impairment
$34.069m) and right-of-use assets of
$66.651m.
losses
Goodwill and indefinite life intangible
assets are required to be tested for
impairment annually and whenever an
impairment indicator exists. As a result,
management
impairment
completed
testing at 31 December 2022 to assess the
recoverability of the carrying value of
tangible and intangible assets, including
goodwill and other
intangible assets,
property, plant and equipment and right-
of-use assets. This is performed through a
value-in-use discounted cash flow model
(“impairment model”).
Note 1d outlines the determination of the
goodwill as well as the carrying value of the
property, plant and equipment and right of
use assets which requires significant
judgement by management in assessing for
any indicators of impairment and preparing
a value-in-use discounted cash flow model,
including;
·
·
·
estimating future growth rates,
discount rates, and
the expected cash flows and capital
expenditure.
RReeccooggnniittiioonn aanndd rreeccoovveerraabbiilliittyy ooff ddeeffeerrrreedd
ttaaxx aasssseett
As disclosed in Note 11, at 31 December
2022, the Group has recognised deferred
tax assets of $23.700m and as disclosed in
Note 4, the Group has unrecognised and
temporary
unused
differences of $50.059m and $13.437m
respectively.
losses and
tax
Our procedures included, but were not limited to:
§ Assessing the process undertaken and conclusions
reached by management in determining indicators of
impairment or reversal of impairment;
§ Reviewing the FY23 budget, the basis on which it has
been prepared, and assessing the historical accuracy of
forecasting by management;
§ Assessing reasonableness of assumptions
in
the
impairment model including:
o discount rate;
o forecasted cash flows and capital expenditure;
o lease payments and sustaining capital
expenditures on leases;
o growth rates, in particular with reference to
historic growth rates and forecast macro-
economic conditions impacting demand in the
industry; and
o terminal growth rate.
§ Engaging our valuation specialists to assist with
evaluating the appropriateness of the discount rate
adopted;
§ Recalculating the mathematical accuracy and integrity
of the impairment model;
§ Performing sensitivity analysis on
relevant
assumptions and inputs in the impairment model, to
assess the extent of change in those assumptions that
either individually or collectively would result in
impairment or reversal of impairment; and
the
§ Assessing the headroom in the impairment model and
whether it is indicative of a requirement to reverse
previously recorded impairment losses.
We also assessed the appropriateness of the disclosures in Notes
1c(k), 1d, 14, 15, 16 and 17 to the financial statements.
Our procedures included, but were not limited to:
§ Engaging our tax specialists to assist us in assessing the
availability of tax losses and temporary differences to
the Group;
§ Reviewing management’s forecasts in respect of the
Group’s taxable income;
§ Assessing the key assumptions in management’s
calculations including:
o Comparing the consistency of the assumptions
used to the inputs and assumptions in
management’s impairment model;
Annual Report 2022 Independent Auditor’s Report | 95
o Assessing whether the period used to forecast
taxable profits is appropriate;
o Assessing the likelihood of the Group achieving
these forecasts.
We also assessed the appropriateness of the Group’s disclosure
in respect of the deferred tax assets including tax losses and
temporary deductible differences in the notes to the financial
statements.
Deferred tax assets in respect of tax losses
and temporary differences are recognised
when it is probable that the Group will have
future taxable profits against which such
losses and temporary differences will be
utilised.
is
judgement
The Group’s ability to recognise deferred
tax assets in relation to tax losses and
temporary differences
is assessed by
management at each reporting period.
Significant
required by
management in their assessment of the
quantum of available tax losses and
deductible
temporary differences, and
whether it is probable that some or all of
these tax losses and temporary differences
can be utilised in the foreseeable future.
This assessment includes estimating the
Group’s future shorter term taxable income
and the probability of those forecasts being
met.
Management’s assessment resulted in the
recognition of an additional $8.365m of
deferred tax assets as at 31 December 2022
as disclosed in Note 11.
Other Information
The directors are responsible for the other information. The other information comprises the Chairman’s Report,
Managing Director’s Operations and Financial Review, Sustainability Report and Directors’ Report, which we
obtained prior to the date of this auditor’s report, and also includes the following information which will be
included in the Group’s annual report (but does not include the financial report and our auditor’s report thereon):
Members Details and Corporate Directory, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
When we read the Members Details and Corporate Directory, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and use our professional judgement to
determine the appropriate action.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
96 | Annual Report 2022 Independent Auditor’s Report
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
·
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
· Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
Annual Report 2022 Independent Auditor’s Report | 97
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 25 of the Directors’ Report for the year ended
31 December 2022..
In our opinion, the Remuneration Report of Capral Limited, for the year ended 31 December 2022, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
X Delaney
Partner
Chartered Accountants
Parramatta, 24 February 2023
98 | Annual Report 2022 Member Details
MEMBER DETAILS
TOP HOLDERS (GROUPED) AS OF 28/02/2023
1 TWENTY LARGEST HOLDERS
Details of Capral’s twenty largest shareholders were as follows:
RANK NAME
CITICORP NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
PRUDENTIAL NOMINEES PTY LTD
NATIONAL EXCHANGE PTY LTD
MR ANTHONY MATTHEW DRAGICEVICH
BNP PARIBAS NOMS PTY LTD
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