More annual reports from Fleetwood Limited:
2023 ReportANNUAL REPORT
2017
T: (08) 9323 3300 | F: (08) 9202 1106 | info@fleetwood.com.au | ABN 69 009 205 261
21 Regal Place, East Perth, WA 6004
www.fleetwoodcorporation.com.au
COMPANY EVOLUTION
2014 Bocar acquired
2013
Fleetwood RV restructured (combined Coromal and
Windsor)
2010 BRB Modular acquired
2004
Fleetwood Parks division sold
Rainbow Transportable Homes acquired
Searipple Village established
Hertz Campervans sold
2003 Windsor Caravans acquired
2001 Serada Limited acquired in NZ
Territory Transportables acquired
2000 Camec acquired
Flexiglass Challenge Industries acquired
1999 Coromal Caravans acquired
New corporate image developed
1998 Sun City Holiday Park acquired
Sunset Beach Holiday Park acquired
1997 Hertz Campervans established in NZ
Perth Holiday Village caravan park acquired
1996 Caravan Park Cooke Point Pty Ltd acquired
Western Portables Pty Ltd (now Fleetwood Pty Ltd)
1994 Camperent Australia Pty Ltd (licensee for
Hertz caravans) acquired
1991 Fleetwood Properties Pty Ltd acquired
1987 ASX Listing
Caravan Parts of WA Pty Ltd acquired
1964 Fleetwood Group established
2017
CORPORATE
DIRECTORY
DIRECTORS
Phillip Campbell
Brad Denison
Jeff Dowling
Adrienne Parker
COMPANY SECRETARY
Yanya O’Hara
AUDITOR
Grant Thornton
BANKER
Westpac Banking Corporation
REGISTERED OFFICE &
PRINCIPAL PLACE OF
BUSINESS
21 Regal Place
East Perth, WA 6004
T: (08) 9323 3300
F: (08) 9202 1106
E: info@fleetwood.com.au
SHARE REGISTRY
Computershare
Level 11
172 St Georges Terrace
Perth, WA 6000
T: (08) 9323 2000
F: (08) 9323 2033
E: www.investorcentre.com/contact
1
CONTENTS
Corporate Directory ............................................... 1
Group Structure ......................................................... 3
5 Year Summary ......................................................... 4
Board of Directors ..................................................... 5
Executive Officers .................................................... 6
Board Chair’s Letter ................................................ 7
Managing Director’s Review ............................. 8
Financial Report 2017 ......................................... 12
Directors’ Report .................................................... 48
Directors’ Declaration ........................................ 62
Auditor’s Independence
Declaration ................................................................. 63
Auditor’s Report...................................................... 64
ASX Additional Information .......................... 68
2
DELIVERING THE
PROMISE
OUR
OBJECTIVE
To outperform financially by
providing genuine value
OUR
BELIEFS
We:
want to do business
build strong relationships in which each party wins
expect all parties to make and honour
their commitments
value the support of our shareholders,
clients and suppliers
OUR
COMMITMENT
We will:
act with honesty and integrity
provide a safe and healthy workplace
operate in an environmentally responsible manner
develop and reward our people for their creativity and
dedication
deal with people in a concerned
and professional way
find better ways to do things
always hold ourselves accountable for
‘Delivering the Promise’
2017 3
GROUP STRUCTURE
Modular
Accommodation
Village
Operations
Design, manufacture and supply of accommodation
for the affordable housing, education and commercial
markets.
Operation of accommodation villages - Searipple in
Karratha and Osprey in South Hedland.
Parts and
Accessories
Recreational
Vehicles
Manufacture and distribution of recreational and
commercial vehicle parts and accessories.
Manufacture and distribution of caravans.
4
FIVE YEAR SUMMARY
(excludes discontinued operations)
$ Million (unless stated)
2017
2016
2015
2014
2013
Revenue
330.1
284.5
272.8
366.5
333.9
Earnings before interest, tax, depreciation, amortisation and
impairment (EBITDA before impairment)
21.9
7.2
17.8
28.2
40.5
EBITDA margin
6.6%
2.5%
6.5%
7.7%
12.1%
Depreciation and amortisation
7.3
9.3
12.3
Earnings (loss) before interest, tax and impairment
(EBIT before impairment)
14.6
(2.1)
Earnings (loss) before interest and tax (EBIT)
14.6
(12.4)
5.5
2.3
17.6
10.6
5.6
16.1
24.5
24.5
EBIT margin
Finance costs
Income tax (benefit) expense
4.4%
-4.4%
0.8%
1.5%
7.3%
0.9
4.3
1.0
4.0
(2.4)
(0.0)
Operating profit (loss) before income tax
13.7
(13.4)
Operating profit (loss) after tax (continuing operations)
9.4
(11.0)
Interest cover (times)
15.9
(12.8)
(1.6)
(1.6)
1.2
Earnings (loss) per share (cents)
15.5
(18.1)
(2.6)
Dividends per share (cents)
5.0
0.0
0.0
Assets
Net (cash) debt
Shareholders funds
Debt / Shareholders funds %
Cash flows from operations
Number of shares on issue (million)
267.5
238.6
327.7
321.8
312.6
(0.4)
(3.1)
55.9
56.0
32.0
195.9
186.3
214.0
214.4
214.1
0%
5.9
61.0
-2%
29%
29%
21%
67.0
61.0
42.2
61.0
30.9
60.6
25.4
60.5
2.2
2.8
3.4
0.6
2.5
0.9
4.0
1.3
6.6
23.2
16.6
19.3
27.8
30.0
2017 5
BOARD OF DIRECTORS
PHILLIP CAMPBELL
Non-Executive Director, Board Chair
Mr Campbell was appointed as non-executive director on 12 August 2016, and thereafter as Chair of the Board on 24 August 2016.
Mr Campbell is an independent and experienced director, having been involved with a number of listed and unlisted entities in
capacities including managing director and chairman. He has a proven track record of guiding businesses through challenging and
volatile environments to restore and enhance shareholder value.
Mr Campbell’s business experience includes dealing with domestic and international companies across a range of industries including
resources, construction, and manufacturing.
Mr Campbell holds a Bachelor in Engineering from the University of Queensland, a Diploma of Corporate Finance from the University
of NSW/Institute of Management, and is a graduate member of AICD.
Mr Campbell is currently non-executive director and chairman of Vmoto Limited, and in the last three years held the position of non-
executive director of ASX listed Farm Pride Foods Limited (resigned 30 September 2016).
BRAD DENISON
Managing Director
Mr Denison was appointed Managing Director on 1 August 2014. Prior to this, Mr Denison was Chief Financial Officer and Company
Secretary for 12 years.
Mr Denison has significant corporate experience in commercial and complex projects, finance, risk and mergers and acquisitions.
Mr Denison holds a Bachelor of Commerce (Accounting) from Curtin University, and is a fellow of CPA Australia.
Mr Denison did not hold any other directorships with listed entities in the last three years.
JEFF DOWLING
Non-Executive Director, Chair of Audit Committee and Remuneration Committee
Mr Dowling was appointed as non-executive director on 1 July 2017, and thereafter as Chair of the Audit Committee and Remuneration
Committee on 26 July 2017.
Mr Dowling holds a Bachelor of Commerce from the University of Western Australia and is a fellow of the Institute of Chartered
Accountants, the Australian Institute of Company Directors and the Financial Services Institute of Australasia.
Mr Dowling is a highly experienced corporate leader with over 40 years’ experience in professional services with Ernst & Young, and as
a non-executive director on both listed and unlisted corporations. Mr Dowling’s experience centers around finance, risk and financial
transactions derived from acting as lead partner on numerous large public company audits, capital raisings and transactions. As a non-
executive director on a number of ASX listed companies he has been involved with various corporate acquisitions and takeovers, debt
restructures and equity raisings.
Mr Dowling is currently the Chairman of S2 Resources Limited and non-executive director and Audit Committee Chair of NRW Holdings
Limited. In the last three years Mr Dowling held the position of director with the following listed companies: Board Chair of Sirius
Resources NL (resigned 23 September 2015), Board Chair of Pura Vida Energy NL (resigned 16 May 2016), and non-executive director
and Audit Committee Chair of Atlas Iron Limited (resigned 4 May 2016).
ADRIENNE PARKER
Non-Executive Director
Ms Parker was appointed as non-executive director on 23 August 2017.
Ms Parker is a partner at Norton Rose Fulbright Australia and specialises in major project construction, engineering and resources
projects, including disputes in the infrastructure, mining, oil and gas and transport sectors.
Ms Parker’s experience includes both domestic and international front end negotiations advising all parties on procurement strategies,
risk assessment and management, and project delivery. Ms Parker has also acted in many large scale complex disputes involving
mining projects, processing plants, oil and gas facilities, and major commercial building and infrastructure projects.
Ms Parker is the immediate past President of the WA Chapter of National Association of Women in Construction, Governing Board
Member and Deputy Chair and Member of Remuneration and Nominations Committee of Perth Public Art Foundation, and Board
Member of the UWA Centenary Trust. Ms Parker did not hold any other directorships with listed entities in the last three years.
Ms Parker holds a Bachelor of Laws from the University of Western Australia.
6
EXECUTIVE OFFICERS
ANDREW WACKETT
Chief Financial Officer
Mr Wackett commenced as Chief Financial Officer on 12 June 2017. Prior to this appointment Mr Wackett was a Division Director of
Macquarie Securities Group for 20 years. During that time, Mr Wackett gained significant commercial experience with large Australian
and international listed entities, developed an in depth knowledge of corporate governance, and statutory financial requirements, and
has proven financial and leadership skills in guiding business, departments and teams in the formulation and execution of financial
strategies. Prior to Macquarie, Mr Wackett worked at Wesfarmers Limited for over six years.
Mr Wackett holds a Bachelor of Commerce from the University of Western Australia, is a Certified Practicing Accountant and a Fellow
of the Financial Services Institute of Australasia.
YANYA O’HARA
Company Secretary
Ms O’Hara was appointed Company Secretary on 1 August 2014. Prior to this appointment Ms O’Hara was the Assistant Company
Secretary for 3 years. Prior to joining Fleetwood, Ms O’Hara practiced as a corporate attorney in New York and as barrister and solicitor
in Perth.
Ms O’Hara holds a Bachelor of Laws with Honors from the University of Notre Dame, and a Master of Laws (Securities and Financial
Regulation) from Georgetown University.
DIRECTORS RETIRED
STEPHEN BOYLE
Mr Boyle was appointed as non-executive director on 1 April 2017. Shortly thereafter Mr Boyle was appointed to the position of Deputy
President of the Administrative Appeals Tribunal. Due to this appointment Mr Boyle was unable to continue as a non-executive
director of Fleetwood and resigned from the Board on 31 August 2017.
Mr Boyle had been a partner of Clayton Utz for 32 years and specialised in front-end and dispute work for major engineering,
infrastructure, mining and general construction projects.
Mr Boyle holds a Bachelor of Laws from the University of Western Australia and had been on the board of the Insurance Commission
of Western Australia from 2011 to 2015.
Mr Boyle did not hold any other directorships with listed entities in the last three years.
MICHAEL HARDY
Mr Hardy was appointed as non-executive director in 2004, and thereafter as Board Chair in 2007. Mr Hardy resigned as Board Chair
on 12 August 2016, and was appointed as an independent non-executive director. During his tenure, Mr Hardy also held positions of
Chair of the Audit Committee and Chair of the Remuneration Committee. Mr Hardy resigned from the Board on 30 June 2017.
Mr Hardy has extensive legal experience in the areas of commercial, property, corporate and administrative law, and had been a
partner in Clayton Utz, and principal in Hardy Bowen.
Mr Hardy holds a Bachelor of Laws from the University of Western Australia and did not hold any directorships with listed entities in
the last three years.
GREG TATE
Mr Tate was first appointed to the Board in 1987 as a non-executive director, and thereafter as Managing Director in 1990. Mr Tate
resigned as Managing Director in 2007 and was appointed as an executive director. In 2010 Mr Tate retired from his executive position
and was appointed as a non-executive director. On 30 June 2017 Mr Tate retired from the Board.
Mr Tate is a chartered accountant and holds a Bachelor of Commerce from the University of Western Australia.
Mr Tate did not hold any other directorships with listed entities in the last three years.
2017 7
BOARD CHAIR’S LETTER
Dear Shareholder,
On behalf of the Board, I have pleasure in presenting Fleetwood’s Annual Report for the financial year ending 30 June 2017.
I would also like this opportunity to thank the Managing Director, Brad Denison, and his management team on a very solid
performance. They have delivered on the first tranche of the promise made at the last Annual General Meeting and as
expressed in the Company’s turnaround strategy.
The Board would like to acknowledge the contribution that long time director and previous managing director, Greg Tate,
made to the business over 30 years. As you know, Greg retired this year, and his legacy will be remembered for many years
to come.
In conclusion, I would also like to thank Michael Hardy, who also retired from the board this year after 13 years as a director,
the last 8 years as Board Chair. His guidance in the early months of my tenure as Board Chair was invaluable.
Sincerely,
Phillip Campbell
Board Chair
Fleetwood Corporation Limited
8
MANAGING DIRECTOR’S REVIEW
Review of Operations
Fleetwood’s turnaround plan, initiated three years ago delivered early results in FY2017 with earnings before interest and
tax increasing from a loss of $2.1m to a profit of $14.6m.
There were no impairment charges impacting underlying earnings in FY2017.
The divisional breakdown shown below demonstrates that strong earnings in Modular Accommodation and Village
Operations were offset to a degree by continued underperformance in Recreational Vehicle Manufacturing.
All divisions saw an improved underlying EBIT contribution during the year.
$ million
Revenue
Recreational Vehicles
Parts and Accessories
2017
2016
Change
47.4
87.6
29.8
86.6
Modular Accommodation
175.8
142.5
Village Operations
Unallocated
Intersegment eliminations
26.3
0.3
(7.3)
30.2
0.1
(4.7)
Total revenue
330.1
284.5
Underlying EBIT
Recreational Vehicles
Parts and Accessories
Modular Accommodation
Village Operations
Unallocated
Total underlying EBIT
(6.7)
1.3
15.2
6.9
(2.1)
14.6
(8.1)
0.9
3.6
5.2
(3.6)
(2.1)
59%
1%
23%
-13%
n/a
56%
16%
17%
46%
325%
34%
43%
n/a
Excludes the discontinued resource sector rental business. 2016 revenue and EBIT have been adjusted by $2.8m reflecting a change in accounting
treatment relating to village operations.
2017 9
During the year, additional working capital was applied to supply agreements in the affordable housing and education
sectors. Capital expenditure of $8.7m included rental classrooms for state governments of $3.6m.
Despite a large volume of work remaining in progress at 30 June, the company has moved from net debt of $9.6m at 31
December 2016 to a net cash position at 30 June.
While the turnaround remains in progress the directors have resolved to pay a fully franked final dividend of 5 cents per
share.
Significant changes have been made to Fleetwood’s board, senior management team and business operations in the
last two years. The operational changes have seen the company become net debt free, re-focus on growth markets and
significantly reduce operating costs.
Both the board and management team remain focussed on continuing to deliver the turnaround plan in FY2018.
Growth Markets
As can be seen in the chart below revenue has moved away from resources and has been replaced by affordable housing,
an important growth sector.
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Education
Recreation
Resources
Affordable Housing
Other
2015
2016
2017
Education and Affordable Housing comprise the Manufactured Accommodation segment. Recreation is comprised of the Parts and Accessories
and RV Manufacturing segments. Resources comprises the Village Operations segment.
Modular Accommodation
Revenue improved by 23% in the Modular Accommodation segment compared to the previous corresponding period.
While education has been a strong contributor to this, supply agreements with key customers have been an important part
of a refocus towards affordable housing, which is a market with a solid forward outlook.
Vans
Fleetwood Volume
Vans
Industry Volume
30,000
The outlook for education spending in East Coast markets remains strong as evidenced by recent state government budget
spending plans.
1,200
While education and affordable housing are the backbone of the Modular Accommodation segment, the company is
actively pursuing opportunities in other modular markets.
900
22,500
A major restructure of the Western Australian accommodation business was undertaken in the 2016 financial year. The
restructure has substantially reduced overheads in WA which has been a major contributor to the increase in earnings.
600
15,000
Encouragingly, the company experienced an improvement in enquiries from the resource sector towards the end of the
7,500
financial year.
300
0
0
2016
2017
2016
2017
7,500
5,000
2,500
0
2013
2017
Searipple rooms Overall Karratha rooms
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
10
Education
Recreation
Resources
Affordable Housing
Other
2015
2016
2017
Recreational Vehicles
The charts below highlight that the Recreational Vehicle business has been able to grow its volume by over 50% into a soft
market environment in 2017.
Fleetwood Volume
Industry Volume
Vans
30,000
22,500
15,000
7,500
0
Vans
1,200
900
600
300
0
2016
2017
2016
2017
Improvements to the company’s product range and dealer network in the last eighteen months have resulted in a marked
increase in order intake and factory output. This is evident in the revenue increase of 59% over the previous corresponding
period.
However, to facilitate such a rapid increase in output, the number of factory employees has more than doubled in the last
two years, and time required to train new employees has resulted in lower than ideal labour efficiency.
7,500
Despite improvements in the business and strong results at the Perth and Sydney caravan shows, results from other capital
city shows have been weaker than previous years. This is in line with a generally weakening trend seen in the Australian
caravan manufacturing sector towards the end of the financial year.
5,000
Given this and notwithstanding that the company is targeting market share growth in the coming year, it is not expected
that the business will return to profitability in FY2018.
2,500
The board has confidence in the direction the business is taking given the number of improvement initiatives currently
underway.
Parts and Accessories
0
Fleetwood’s parts and accessories segment is comprised of Camec which is a major supplier of components to the RV
manufacturing industry and Flexiglass which supplies fibreglass canopies and aluminium trays for utility vehicles.
2013
2017
Despite significant pressure from overseas competitors and the caravan market weakness towards year end noted above, a
modest revenue improvement was generated in 2017. Both businesses remain leaders in their respective markets.
Searipple rooms Overall Karratha rooms
While operating costs and capital employed in this segment remain the subject of close management, there is an
opportunity to improve market share through the development of innovative products and strong customer relationships.
A number of new products are planned for release during the 2018 financial year.
2017
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Vans
30,000
22,500
15,000
7,500
0
Education
Recreation
Resources
Affordable Housing
Other
2015
2016
2017
Industry Volume
Fleetwood Volume
Vans
1,200
900
600
300
0
2016
2017
2016
2017
11
Village Operations
The chart below demonstrates the estimated change in supply of accommodation rooms in the Karratha market since 2013.
7,500
5,000
2,500
0
2013
2017
Searipple rooms Overall Karratha rooms
Revenue moderated in the Village Operations segment in 2017 despite some improvement in both occupancy and revenue
at Searipple Village in the second half of the year. This was the result of fluctuating demand from customers.
EBIT improved due to a combination of lower costs negotiated with suppliers and lower depreciation and amortisation
charges.
While the downturn in the mining sector has generally seen demand for worker accommodation reduce, the income
streams from Searipple and Osprey are underpinned by blue chip customers.
Discontinued Operation
The company’s discontinued mining rental business generated $6.5m in revenue from residual contracts during the period
and delivered a result marginally below break-even.
The remaining stock has been reclassified as a current asset held for sale.
Dividends
Given the improved results and outlook, the directors have declared a fully franked 5 cent per share final dividend. This
represents 53% of second half 2017 earnings. The dividend reinvestment plan will apply to this dividend. The plan offers
a 2.5% reinvestment discount.
Sustainability
Fleetwood’s strive for sustainability at Searipple continued this year, with a 51% reduction in water consumption and a 23%
reduction in electricity consumption. The reduction in water and electricity usage is a result of near real time monitoring
which has resulted in Fleetwood qualifying for consideration for a Gold Award from the Water Corporation of Western
Australia under their Water Wise Business Recognition Scheme.
Further measures to be rolled out by the Company next year include an in-room energy management system which will
reduce electricity waste, and further optimisation of the Company’s onsite waste water treatment plant to increase the
treatment of Village waste water from 65% to 95% for use in reticulating gardens.
Fleetwood People
Fleetwood has been through significant changes over the last three financial years. These changes have in some instances
necessitated reductions in the company’s workforce and in other cases they have resulted in significant increases in
workforce numbers.
The board is aware of the impact these changes can have and we wish to thank all Fleetwood employees and contractors
for their diligent work ethic and for the significantly improved results delivered to shareholders in the 2017 financial year.
FINANCIAL REPORT 2017
Consolidated statement of profit or loss
and other comprehensive income
Fleetwood Corporation Limited
Year ended 30 June 2017
Continuing operations
Sales revenue
Other income
Materials used
Sub-contract costs
Employee benefits
Operating leases
Impairment of non-current assets
Other expenses
Profit (Loss) before interest, tax, depreciation and amortisation (EBITDA)
Depreciation and amortisation
Profit (Loss) before interest and tax (EBIT)
Finance costs
Profit (Loss) before income tax expense
Income tax (expense) benefit
Profit (Loss) from continuing operations
Loss from discontinued operation
Profit (Loss) for the year
Note
2
2
13, 14
3
3
4
33
5, 24
2017
$ '000
2016
$ '000
330,144
284,297
1
195
(138,384)
(110,382)
(78,262)
(58,067)
(8,709)
-
(24,856)
21,867
(7,256)
14,611
(921)
13,690
(4,258)
9,432
(437)
8,995
(75,311)
(56,092)
(10,059)
(10,312)
(25,444)
(3,108)
(9,305)
(12,413)
(968)
(13,381)
2,362
(11,019)
(16,985)
(28,004)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss
Net exchange difference relating to foreign controlled entities (net of tax)
23
Total comprehensive income (loss) for the year
301
9,296
13
(27,991)
Earnings (loss) per share from continuing and discontinued operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
Earnings (loss) per share from continuing operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
Earnings (loss) per share from continuing operations before impairment
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
To be read in conjunction with the accompanying notes.
7
7
7
7
7
7
14.7
14.7
15.5
15.4
15.5
15.4
(45.9)
(45.8)
(18.1)
(18.0)
(3.0)
(3.0)
122017
Consolidated statement of financial position
Fleetwood Corporation Limited
As at 30 June 2017
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Non-current assets held for sale
330,144
284,297
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Goodwill
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing liabilities
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
To be read in conjunction with the accompanying notes.
Consolidated statement of profit or loss
and other comprehensive income
Fleetwood Corporation Limited
Year ended 30 June 2017
Continuing operations
Sales revenue
Other income
Materials used
Sub-contract costs
Employee benefits
Operating leases
Impairment of non-current assets
Other expenses
Depreciation and amortisation
Profit (Loss) before interest and tax (EBIT)
Finance costs
Profit (Loss) before income tax expense
Income tax (expense) benefit
Profit (Loss) from continuing operations
Loss from discontinued operation
Profit (Loss) for the year
Profit (Loss) before interest, tax, depreciation and amortisation (EBITDA)
Earnings (loss) per share from continuing and discontinued operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
Earnings (loss) per share from continuing operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
Earnings (loss) per share from continuing operations before impairment
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
To be read in conjunction with the accompanying notes.
Note
2017
$ '000
2016
$ '000
(138,384)
(110,382)
13, 14
33
5, 24
2
2
3
3
4
7
7
7
7
7
7
1
-
(78,262)
(58,067)
(8,709)
(24,856)
21,867
(7,256)
14,611
(921)
13,690
(4,258)
9,432
(437)
8,995
14.7
14.7
15.5
15.4
15.5
15.4
195
(75,311)
(56,092)
(10,059)
(10,312)
(25,444)
(3,108)
(9,305)
(12,413)
(968)
(13,381)
2,362
(11,019)
(16,985)
(28,004)
(45.9)
(45.8)
(18.1)
(18.0)
(3.0)
(3.0)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss
Net exchange difference relating to foreign controlled entities (net of tax)
23
Total comprehensive income (loss) for the year
301
9,296
13
(27,991)
Note
8
9
10
11
9
12
13
14
4
15
17
16
20
16
22
23
24
2017
$ '000
5,383
64,953
63,211
20,220
2016
$ '000
6,116
40,628
49,291
25,839
153,767
121,874
1,369
46,848
55,230
91
10,167
113,705
267,472
58,831
5,000
5,812
363
70,006
1,551
1,551
427
45,836
55,230
1,120
14,121
116,734
238,608
42,247
3,000
5,556
301
51,104
1,177
1,177
71,557
52,281
195,915
186,327
195,371
195,079
57
487
(244)
(8,508)
195,915
186,327
13
Consolidated statement of changes in equity
Fleetwood Corporation Limited
Year ended 30 June 2017
Foreign
currency
translation
reserve
$ '000
Issued capital
$ '000
Retained
earnings
$ '000
Total
$ '000
194,762
(257)
19,496
214,001
-
-
-
317
-
13
13
-
(28,004)
(28,004)
-
13
(28,004)
(27,991)
-
317
195,079
(244)
(8,508)
186,327
-
-
-
292
195,371
-
301
301
-
57
8,995
-
8,995
-
487
8,995
301
9,296
292
195,915
Balance 1 July 2015
Loss for the year
Exchange differences arising on translation of foreign
operations
Total comprehensive income (loss) for the year
Share-based payments
Balance at 30 June 2016
Profit for the year
Exchange differences arising on translation of foreign
operations
Total comprehensive income for the year
Share-based payments
Balance at 30 June 2017
To be read in conjunction with the accompanying notes.
142017
Consolidated statement of changes in equity
Fleetwood Corporation Limited
Year ended 30 June 2017
Total comprehensive income (loss) for the year
(28,004)
(27,991)
Foreign
currency
translation
Issued capital
reserve
$ '000
$ '000
Retained
earnings
$ '000
Total
$ '000
194,762
(257)
19,496
214,001
(28,004)
(28,004)
195,079
(244)
(8,508)
186,327
317
-
-
-
-
-
-
292
195,371
13
13
-
-
-
301
301
-
57
-
-
-
-
8,995
8,995
13
317
8,995
301
9,296
292
487
195,915
Balance 1 July 2015
Loss for the year
operations
Share-based payments
Balance at 30 June 2016
Profit for the year
operations
Exchange differences arising on translation of foreign
Total comprehensive income for the year
Share-based payments
Balance at 30 June 2017
To be read in conjunction with the accompanying notes.
Exchange differences arising on translation of foreign
Net cash provided by operating activities
28.1
5,879
66,977
Consolidated statement of cash flows
Fleetwood Corporation Limited
Year ended 30 June 2017
Cash flows from operating activities
Receipts in the course of operations
Payments in the course of operations
Interest received
Income taxes paid
Finance costs paid
Note
2017
$ '000
2016
$ '000
345,102
(338,240)
54
(116)
(921)
381,985
(313,528)
290
(617)
(1,153)
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from sale of non-current assets
Payment for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Net cash used in financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on the balance of cash held in foreign currencies
Cash and cash equivalents at the end of the financial year
8
To be read in conjunction with the accompanying notes.
(8,719)
117
(10)
(8,612)
70,300
(68,300)
2,000
(733)
6,116
-
5,383
(7,972)
436
(484)
(8,020)
85,000
(144,500)
(59,500)
(543)
6,634
25
6,116
15
Notes to the financial statements
Fleetwood Corporation Limited
Year ended 30 June 2017
1 Statement of significant accounting policies
The significant policies which have been adopted in the preparation of this financial report are:
1.1 Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act (Cth) 2001,
Accounting Standards and Interpretations, and complies with other requirements of the law. Compliance with Australian Accounting
Standards ensures the consolidated financial statements and notes of the consolidated entity comply with International Financial
Reporting Standards. The Company is a for profit entity and the financial statements comprise the consolidated financial statements of
the Group.
The financial statements were authorised for issue by the directors on 29 September 2017.
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board
(AASB) that are relevant to its operations and effective for the current annual reporting period. Adoption of these standards has had no
effect on the amounts reported for the current or prior period.
At the date of authorisation of the financial statements, the following applicable standards and interpretations have been issued but are
not yet effective:
Standard
AASB 9 ‘Financial Instruments’, and the relevant amending standards
AASB 15 ‘Revenue from Contracts with Customers’
AASB 16 ‘Leases’
Effective for
reporting periods
beginning on or
after:
Expected to
be applied in
the year
ending:
1 January 2018
30 June 2019
1 January 2017
30 June 2018
1 January 2019
30 June 2020
AASB 2014-5 ‘Amendments to Australian Accounting Standards arising from AASB 15’
1 January 2018
30 June 2019
AASB 2014-7 ‘Amendments to Australian Accounting Standards arising from AASB 9’
1 January 2018
30 June 2019
AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective Date of AASB
15’
1 January 2017
30 June 2018
AASB 2016-1 ‘Amendments to Australian Accounting Standards – Recognition of Deferred
Tax Assets for Unrealised Losses’
1 January 2017
30 June 2018
AASB 2016-1 ‘Amendments to Australian Accounting Standards – Disclosure Initiative:
Amendments to AASB 107’
1 January 2017
30 June 2018
The Group has yet to undertake a detailed assessment of the impact of AASB 15 and AASB 9. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the
financial statements when it is first adopted for the year ending 30 June 2019.
For all other standards and interpretations that have been issued but are not yet effective in the table above, management is in the
process of determining the potential impact of the initial application of those standards and interpretations.
1.2 Basis of preparation
The financial report has been prepared on the basis of historical costs, except for certain non-current assets and financial instruments
that are measured at revalued amounts or fair values, as explained in the accounting policies below. Cost is generally based on the fair
values of the consideration given in exchange for assets. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes
into account the characteristics of the asset or liability market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial
statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing
transactions that are within the scope of AASB 117, and measurements that have some similarities to fair value but are not fair value,
such as net realisable value in AASB 2 or value in use in AASB 136. Accounting policies have been consistently applied and except
where there are changes in accounting policy, are consistent with those of the previous year. All amounts are presented in Australian
Dollars unless otherwise noted.
The Company has applied the relief available to it under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument
2016 / 191 and accordingly, amounts in the financial statements and directors’ report have been rounded to the nearest $1,000, or in
certain cases, the nearest dollar.
1.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries). Control is achieved when the Company has power over the investee, is exposed, or has rights, to variable returns from its
involvement with the investee, and has the ability to use its power to affect its returns. The Company reassesses whether or not it
controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.
162017
Notes to the financial statements
Fleetwood Corporation Limited
Year ended 30 June 2017
1 Statement of significant accounting policies
The significant policies which have been adopted in the preparation of this financial report are:
1.1 Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act (Cth) 2001,
Accounting Standards and Interpretations, and complies with other requirements of the law. Compliance with Australian Accounting
Standards ensures the consolidated financial statements and notes of the consolidated entity comply with International Financial
Reporting Standards. The Company is a for profit entity and the financial statements comprise the consolidated financial statements of
the Group.
The financial statements were authorised for issue by the directors on 29 September 2017.
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board
(AASB) that are relevant to its operations and effective for the current annual reporting period. Adoption of these standards has had no
effect on the amounts reported for the current or prior period.
At the date of authorisation of the financial statements, the following applicable standards and interpretations have been issued but are
not yet effective:
Standard
Effective for
Expected to
reporting periods
be applied in
beginning on or
after:
the year
ending:
1 January 2018
30 June 2019
1 January 2017
30 June 2018
1 January 2019
30 June 2020
AASB 9 ‘Financial Instruments’, and the relevant amending standards
AASB 15 ‘Revenue from Contracts with Customers’
AASB 16 ‘Leases’
AASB 2014-5 ‘Amendments to Australian Accounting Standards arising from AASB 15’
1 January 2018
30 June 2019
AASB 2014-7 ‘Amendments to Australian Accounting Standards arising from AASB 9’
1 January 2018
30 June 2019
AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective Date of AASB
1 January 2017
30 June 2018
15’
AASB 2016-1 ‘Amendments to Australian Accounting Standards – Recognition of Deferred
Tax Assets for Unrealised Losses’
1 January 2017
30 June 2018
AASB 2016-1 ‘Amendments to Australian Accounting Standards – Disclosure Initiative:
Amendments to AASB 107’
1 January 2017
30 June 2018
The Group has yet to undertake a detailed assessment of the impact of AASB 15 and AASB 9. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the
financial statements when it is first adopted for the year ending 30 June 2019.
For all other standards and interpretations that have been issued but are not yet effective in the table above, management is in the
process of determining the potential impact of the initial application of those standards and interpretations.
1.2 Basis of preparation
The financial report has been prepared on the basis of historical costs, except for certain non-current assets and financial instruments
that are measured at revalued amounts or fair values, as explained in the accounting policies below. Cost is generally based on the fair
values of the consideration given in exchange for assets. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes
into account the characteristics of the asset or liability market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial
statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing
transactions that are within the scope of AASB 117, and measurements that have some similarities to fair value but are not fair value,
such as net realisable value in AASB 2 or value in use in AASB 136. Accounting policies have been consistently applied and except
where there are changes in accounting policy, are consistent with those of the previous year. All amounts are presented in Australian
The Company has applied the relief available to it under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument
2016 / 191 and accordingly, amounts in the financial statements and directors’ report have been rounded to the nearest $1,000, or in
Dollars unless otherwise noted.
certain cases, the nearest dollar.
1.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries). Control is achieved when the Company has power over the investee, is exposed, or has rights, to variable returns from its
involvement with the investee, and has the ability to use its power to affect its returns. The Company reassesses whether or not it
controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant
facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders, potential
voting rights held by the Company, other vote holders or other parties, rights arising from other contractual arrangements, and any
additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.Income and expense
of 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 and up to the effective date of disposal, as appropriate. Total
comprehensive income of subsidiaries is attributed to the owners of the Company even if this results in the non-controlling interests
having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those
used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
When the Group loses control of a subsidiary, a gain or loss is recognised in the profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous
carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the
subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other
comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income and
accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets (i.e. reclassified to profit or loss or
transferred directly to retained earnings as specified by applicable Standards). The fair value of any investment retained in the former
subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139
‘Financial Instruments: Recognition and Measurement’ or, when applicable, the cost on initial recognition of an investment in an
associate.
1.4 Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is
measured at fair value which is calculated as the sum at the acquisition-date of the fair values of assets transferred by the Company,
liabilities incurred by the Company to the former owners of the acquiree and the equity instruments issued by the Company in exchange
for control of the acquiree. Acquisition related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that deferred
tax assets or liabilities or assets related to employment benefit arrangements are recognised and measured in accordance with AASB
112 ‘Income Taxes’ and AASB 119 ‘Employee Benefits’ respectively.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition date
amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition date amounts
of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-
controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is
recognised immediately in profit or loss as a bargain purchase gain.
1.5 Revenue recognition
Revenue is recognised at the fair value of consideration received or receivable net of goods and services tax (GST).
Sale of goods
Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the following
conditions are satisfied:
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the Group; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Construction contracts
When the stage of completion can be reliably measured, revenue is recognised in proportion to the stage of completion of the contract.
The stage of completion is measured based on the proportion of costs incurred for work performed to date relative to the estimated total
contract cost. Variations in contract work, claims and incentive payments are included to the extent that the amount can be reliably
measured and its receipt is considered probable. Where the outcome of a contract cannot be reliably estimated, costs are immediately
recognised as an expense. Where it is probable costs will not be recovered, revenue is only recognised to the extent costs are
recoverable. An expected loss is recognised immediately as an expense.
When costs incurred to date plus recognised profits less recognised losses exceed progress billings, the surplus is shown as amounts
due from customers for contract work. For contracts where progress billings exceed costs incurred to date plus recognised profits less
recognised losses, the surplus is shown as the amounts due to customers for contract work. Amounts received before the related work
is performed are included in the consolidated statement of financial position, as a liability. Amounts billed for work performed but not yet
paid are included in the consolidated statement of financial position as trade and other receivables.
Rental
Rental income is recognised on a straight line basis over the term of the relevant rental contract.
Interest
Interest is recognised on an accrual basis, taking into account the effective yield on the financial asset.
Sale of non-current assets
Gains or losses on sale of non-current assets are included as income or expenses at the date the significant risks and rewards of the
asset pass to the buyer, usually when an unconditional contract of sale is signed. The gain or loss on disposal is calculated as the
difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.
17
Dividends
Dividends and distributions from subsidiaries are recognised by the parent entity when they are declared by the subsidiaries. Dividends
received out of pre-acquisition reserves are eliminated against the carrying amount of the investment and not recognised as revenue.
1.6 Foreign currency
Functional currency
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the
entity operates (its functional currency). The results and financial position of each group entity are expressed in Australian Dollars (‘$’),
which is the functional currency of the Company and the presentation currency for the consolidated financial statements.
Transactions
Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the transactions.
Amounts receivable and payable in foreign currencies at balance date are translated at the rate of exchange ruling on that date.
Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account as exchange gains or
losses in the statement of comprehensive income in the financial year in which they arose.
Translation of controlled foreign operations
The assets and liabilities of foreign operations, including subsidiaries, are translated at the rates of exchange ruling at balance date.
Equity items are translated at historical rates. Exchange differences arising from translation are taken directly to the foreign currency
reserve until disposal or partial disposal of the operations. Income and expense items are translated at the average exchange rates for
the period. Exchange differences are recognised in other comprehensive income and accumulated in equity.
1.7 Goods and services tax
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances, GST is recognised as part of the cost of acquisition of the asset or as
part of an item of expense.
Receivables and payables are stated with the amount of GST included. The net GST recoverable from, or payable to, the taxation
authority is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and
financing activities, which are recoverable from, or payable to, the taxation authority are classified as operating cash flows.
1.8 Taxation
Current tax
Current tax is calculated by reference to the amount of income tax payable or recoverable in respect of the taxable profit or loss for the
period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Current tax
for current and prior periods is recognised as a liability or asset to the extent that it is unpaid or refundable.
Taxable profit differs from profit before tax as reported in the consolidated statement of profit or loss and other comprehensive income
because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible.
Deferred tax
Deferred tax is accounted for using the comprehensive statement of financial position liability method in respect of temporary
differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those
items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent
that it is probable that a sufficient taxable amount will be available against which deductible temporary differences or unused tax losses
and tax offsets can be utilised. Deferred tax assets and liabilities are not recognised if the temporary differences arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor
accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets and the
liabilities giving rise to them are realised or settled, based on tax rates and tax laws that have been enacted or substantively enacted by
the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities
are offset when they relate to income taxes levied by the same taxation authority and the company/consolidated entity intends to settle
its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the statement of comprehensive income, except when it relates to
items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the
initial accounting for a business combination, in which case it is taken into account in the determination of goodwill.
1.9 Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash, which are subject to an insignificant risk of changes in fair value and have a maturity of three
months or less at the date of acquisition.
182017
1.10 Acquisition of assets
All assets including property, plant and equipment and intangibles are initially recorded at their cost at the date of acquisition, being the
fair value of the consideration provided plus incidental costs directly attributable to the acquisition. The costs of assets constructed or
internally generated by the consolidated entity, other than goodwill, include the cost of materials, direct labour, directly attributable
overheads and other incidental costs.
Expenditure, including that on internally generated assets other than development costs, is only recognised as an asset when it is
probable that future economic benefits will eventuate and the costs can be measured reliably. Costs attributable to feasibility and
alternative approach assessments are expensed as incurred.
Costs incurred on assets subsequent to initial acquisition are capitalised when it is probable future economic benefits will flow to the
consolidated entity. Costs that do not meet the criteria for capitalisation are expensed as incurred.
1.11 Non-current assets held for sale
Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-
current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use. This condition is only met when the sale is highly probable and the asset is available for immediate sale in its present
condition and the sale is expected to be completed within one year from the date of classification.
1.12 Receivables
Trade debtors are recorded at amortised cost less impairment. The collectability of debts is assessed at year-end and a provision is
made for any doubtful debts. Changes in the carrying amount of the allowance are recognised in profit or loss.
Revenues, expenses and assets are recognised net of goods and services tax (GST), except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances, GST is recognised as part of the cost of acquisition of the asset or as
1.13 Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is determined using standard cost and for work in progress
includes an appropriate share of both variable and fixed costs. Net realisable value represents the estimated selling prices for the
inventories less all estimated costs of completion and costs necessary to make the sale.
1.14 Impairment of assets other than goodwill
At each reporting date, the carrying amounts of tangible and intangible assets are reviewed to determine whether there is any indication
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 any impairment loss. Where the asset does not generate cash flows that are independent from other assets,
the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets with
indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an
indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-
generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the
relevant asset is carried at fair value through equity, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but only to the extent the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value through equity, in which
case the reversal of the impairment loss is treated as a revaluation increase.
1.15 Leases
Payments made under operating leases are expensed on a straight-line basis over the term of the lease, except where an alternative
basis is more representative of the pattern of benefits to be derived from the leased property.
1.16 Property, plant and equipment
Each class of property, plant and equipment is stated at historical cost less, where applicable, any accumulated depreciation and
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Property in the course of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried
at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in
accordance with the Group’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences
when the assets are ready for their intended use.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction)
less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis. Freehold land is not depreciated.
The cost of self-constructed assets includes the cost of materials and direct labour and any other costs attributable to bringing an asset
to a working condition ready for its intended use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from
the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Dividends and distributions from subsidiaries are recognised by the parent entity when they are declared by the subsidiaries. Dividends
received out of pre-acquisition reserves are eliminated against the carrying amount of the investment and not recognised as revenue.
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the
entity operates (its functional currency). The results and financial position of each group entity are expressed in Australian Dollars (‘$’),
which is the functional currency of the Company and the presentation currency for the consolidated financial statements.
Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the transactions.
Amounts receivable and payable in foreign currencies at balance date are translated at the rate of exchange ruling on that date.
Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account as exchange gains or
losses in the statement of comprehensive income in the financial year in which they arose.
Translation of controlled foreign operations
The assets and liabilities of foreign operations, including subsidiaries, are translated at the rates of exchange ruling at balance date.
Equity items are translated at historical rates. Exchange differences arising from translation are taken directly to the foreign currency
reserve until disposal or partial disposal of the operations. Income and expense items are translated at the average exchange rates for
the period. Exchange differences are recognised in other comprehensive income and accumulated in equity.
Dividends
1.6 Foreign currency
Functional currency
Transactions
1.7 Goods and services tax
part of an item of expense.
Receivables and payables are stated with the amount of GST included. The net GST recoverable from, or payable to, the taxation
authority is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and
financing activities, which are recoverable from, or payable to, the taxation authority are classified as operating cash flows.
1.8 Taxation
Current tax
Deferred tax
items.
Current tax is calculated by reference to the amount of income tax payable or recoverable in respect of the taxable profit or loss for the
period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Current tax
for current and prior periods is recognised as a liability or asset to the extent that it is unpaid or refundable.
Taxable profit differs from profit before tax as reported in the consolidated statement of profit or loss and other comprehensive income
because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible.
Deferred tax is accounted for using the comprehensive statement of financial position liability method in respect of temporary
differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent
that it is probable that a sufficient taxable amount will be available against which deductible temporary differences or unused tax losses
and tax offsets can be utilised. Deferred tax assets and liabilities are not recognised if the temporary differences arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor
accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets and the
liabilities giving rise to them are realised or settled, based on tax rates and tax laws that have been enacted or substantively enacted by
the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities
are offset when they relate to income taxes levied by the same taxation authority and the company/consolidated entity intends to settle
its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the statement of comprehensive income, except when it relates to
items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the
initial accounting for a business combination, in which case it is taken into account in the determination of goodwill.
1.9 Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash, which are subject to an insignificant risk of changes in fair value and have a maturity of three
months or less at the date of acquisition.
19
1.17 Depreciation and amortisation
All non-financial assets of the entity (except land) have limited useful lives and are depreciated/amortised using the straight-line method
over their estimated useful lives to their estimated residual values. Assets are depreciated or amortised from the time an asset is ready
for use.
Depreciation and amortisation rates and methods and residual values are reviewed annually for appropriateness. When changes are
made adjustments are reflected in current and future periods only. Depreciation and amortisation are expensed, except to the extent
they are included in the carrying amount of another asset as an allocation of production overheads.
Depreciation/amortisation rates used for each class of asset are as follows:
Buildings
Leasehold property and improvements
Plant and equipment
1.18 Goodwill
2017
2.5%
2016
2.5%
2% - 25%
2% - 25%
2.5% - 50%
2.5% - 50%
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating
units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the
unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or
loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss
on disposal.
1.19 Intangibles
Product development costs
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An intangible asset arising from product development (or from the development phase of an internal project) is recognised if the
following are demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
the expenditure attributable to the intangible asset during its development can be measured reliably.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the
asset first meets the recognition criteria. Where no internally-generated asset can be recognised, development expenditure is
recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and
accumulated impairment losses and are amortised on a straight-line basis over their useful lives of 2 to 5 years.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or
losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
1.20 Employee benefits
Wages, salaries, annual and long service leave
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave
when it is probable that settlement will be required and they are capable of being measured reliably. Provisions expected to be settled
within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions which are not expected to be settled within 12 months are measured as the present value of the estimated future cash flows
to be made in respect of services provided by employees up to the reporting date. The expected future payments incorporate
anticipated future wage and salary levels, experience of employee departures and periods of service, and are discounted at rates
determined by reference to market yields at the end of the reporting period on high quality corporate bonds that have maturity dates that
approximate the timing of the estimated future cash flows. Any re-measurements arising from experience adjustments and changes in
assumptions are recognised in profit or loss in the periods in which the changes occur.
Share based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity
instruments at the grant date.
The fair value determined at grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the estimate of equity instruments that will eventually vest. At the end of each reporting period, the estimate of the
number of equity instruments expected to vest is reviewed. The impact of the revision is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to equity.
Superannuation
Contributions to employee superannuation funds are expensed when the employees have rendered service entitling them to the
contributions.
202017
1.17 Depreciation and amortisation
1.21 Financial liabilities and equity instruments issued by the Group
All non-financial assets of the entity (except land) have limited useful lives and are depreciated/amortised using the straight-line method
over their estimated useful lives to their estimated residual values. Assets are depreciated or amortised from the time an asset is ready
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual
arrangement. Equity instruments issued by the Group are recognised at the amount received, net of direct issue costs.
for use.
Depreciation and amortisation rates and methods and residual values are reviewed annually for appropriateness. When changes are
made adjustments are reflected in current and future periods only. Depreciation and amortisation are expensed, except to the extent
they are included in the carrying amount of another asset as an allocation of production overheads.
Depreciation/amortisation rates used for each class of asset are as follows:
Buildings
Leasehold property and improvements
Plant and equipment
1.18 Goodwill
2017
2.5%
2016
2.5%
2% - 25%
2% - 25%
2.5% - 50%
2.5% - 50%
Payables
Liabilities are recognised for amounts to be paid in the future for goods or services received regardless of whether they have been billed
to the consolidated entity. They are initially valued at fair value, net of transaction costs.
Interest bearing liabilities
Bank loans are recognised initially at fair value net of transaction costs. Subsequent to initial recognition, bank loans are measured at
amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit or loss
over the period of the borrowing using the effective interest rate. Interest expense is recognised on an accrual basis.
The Group derecognises liabilities when, the obligations are discharged, cancelled or expire. The difference between the carrying
amount of the liability derecognised and the consideration paid and payable is recognised in profit or loss.
1.22 Comparative information
Comparative information has been restated for Village Operations income which had been accounted for on a gross basis.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating
units) that is expected to benefit from the synergies of the combination.
1.23 Borrowing Costs
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the
unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or
loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalisation.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
on disposal.
1.19 Intangibles
Product development costs
following are demonstrated:
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An intangible asset arising from product development (or from the development phase of an internal project) is recognised if the
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
the expenditure attributable to the intangible asset during its development can be measured reliably.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the
asset first meets the recognition criteria. Where no internally-generated asset can be recognised, development expenditure is
recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and
accumulated impairment losses and are amortised on a straight-line basis over their useful lives of 2 to 5 years.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or
losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
1.20 Employee benefits
Wages, salaries, annual and long service leave
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave and sick leave
when it is probable that settlement will be required and they are capable of being measured reliably. Provisions expected to be settled
within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions which are not expected to be settled within 12 months are measured as the present value of the estimated future cash flows
to be made in respect of services provided by employees up to the reporting date. The expected future payments incorporate
anticipated future wage and salary levels, experience of employee departures and periods of service, and are discounted at rates
determined by reference to market yields at the end of the reporting period on high quality corporate bonds that have maturity dates that
approximate the timing of the estimated future cash flows. Any re-measurements arising from experience adjustments and changes in
assumptions are recognised in profit or loss in the periods in which the changes occur.
Share based payments
instruments at the grant date.
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity
The fair value determined at grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the estimate of equity instruments that will eventually vest. At the end of each reporting period, the estimate of the
number of equity instruments expected to vest is reviewed. The impact of the revision is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to equity.
Superannuation
contributions.
Contributions to employee superannuation funds are expensed when the employees have rendered service entitling them to the
1.24 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the
reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the
time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is
recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured
reliably.
1.25 Derivative financial instruments
The Group enters into foreign exchange forward contracts to manage its exposure to foreign exchange rate risk. Further details
of derivative financial instruments are disclosed in notes 20 and 27.
Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to
their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless
the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends
on the nature of the hedge relationship.
1.26 Critical accounting judgments and key sources of estimation uncertainty
In the application of accounting policies, management is required to make judgments, estimates and assumptions. The estimates and
associated assumptions are based on experience and other factors that are considered relevant. Actual results may differ from these
estimates.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the
reporting period, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
Accounting for construction contracts involves the continuous use of assessed estimates based on assumptions consistent
with project scope and schedule, contract and risk management processes. Contracts may span several accounting
periods. Estimates of forecast costs are regularly updated in accordance with the agreed work scope and schedule under the
contract. Forecasts are based on the cost expected to apply when the related activity is undertaken. Contingencies are
included in order to cover the risks in those forecasts. Revenues reflect the price agreed in the contract and variations where
they have been approved or if it is probable they will be approved. Claims are included in contract revenue only where
negotiations have reached an advanced stage such that it is probable that the client will accept the claim and recovery of the
amount involved is probable.
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which
goodwill has been allocated except for where fair value less cost to sell has been applied. The value in use calculation
requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable
discount rate in order to calculate the present value. Details of goodwill and the subsequent testing for impairment are set out
in note 13. Where the actual future cash flows are less than expected, a material impairment loss may arise.
The Company uses valuation techniques that include inputs that are not based on observable market data to estimate the fair
value of share rights and share units issued during the year. Note 21 provides information about the key assumptions used in
the determination of the fair value of these options. The Directors believe that the chosen valuation techniques and
assumptions used are appropriate in determining the fair value of the rights and share units.
The carrying amount of goodwill at 30 June 2017 was $55.3 million (30 June 2016: $55.3 million). No impairment loss was
recognised during 2017 (30 June 2016: $6.5 million). Details of the impairment loss calculation including key assumptions are
set out in note 13.
21
The carrying amount of property, plant and equipment at 30 June 2017 was $46.8 million (30 June 2016: $45.8 million). No
impairment loss was recognised during 2017 (30 June 2016: $19.7 million) and no transfers to non-current assets held for
sale were recognised (30 June 2016: $25.8 million).
The Company uses historical and observable market information to measure the value of assets classified as held for sale.
1.27 Profit or loss from discontinued operations
A discontinued operation is a component of the Group that has either been disposed of, or is held for sale, and;
represents a separate major line of business or geographical area of operations;
is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Profit or loss from discontinued operations, including prior year components of profit or loss, are presented in a single amount in the
statement of profit or loss and other comprehensive income. This amount, which comprises the post-tax profit or loss of discontinued
operations, is further analysed in note 33.
General information
Fleetwood Corporation Limited is a public company listed on the Australian Securities Exchange (trading under the symbol ‘FWD’),
incorporated in Australia and operating in Australia and New Zealand.
The registered and business address of the Company is 21 Regal Place, East Perth, Western Australia. The telephone number of the
company is (08) 9323 3300.
Tax consolidation
The Company and its wholly-owned Australian resident entities elected from 1 July 2003 to be taxed as a single entity.
Fleetwood Corporation Limited, as the head entity, and the subsidiaries in the tax consolidated group continue to account for their own
current and deferred tax amounts. The amounts are measured as if each entity continues to be a stand-alone taxpayer in its own right.
The current tax balances are then transferred to the head entity via intercompany balances. The entities within the Group have entered
a tax funding arrangement whereby each subsidiary will compensate the head entity for the amount of tax payable that would be
calculated as if the subsidiary was a tax paying entity.
The method used to calculate current and deferred tax amounts is summarised in note 1.8.
222017
The carrying amount of property, plant and equipment at 30 June 2017 was $46.8 million (30 June 2016: $45.8 million). No
impairment loss was recognised during 2017 (30 June 2016: $19.7 million) and no transfers to non-current assets held for
sale were recognised (30 June 2016: $25.8 million).
The Company uses historical and observable market information to measure the value of assets classified as held for sale.
2 Revenue
Revenue from continuing operations comprises:
Sales revenue
Goods
Construction
Rental
Other income
Interest
Loss on sale of non-current assets
1.27 Profit or loss from discontinued operations
A discontinued operation is a component of the Group that has either been disposed of, or is held for sale, and;
represents a separate major line of business or geographical area of operations;
is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Profit or loss from discontinued operations, including prior year components of profit or loss, are presented in a single amount in the
statement of profit or loss and other comprehensive income. This amount, which comprises the post-tax profit or loss of discontinued
operations, is further analysed in note 33.
General information
company is (08) 9323 3300.
Tax consolidation
Fleetwood Corporation Limited is a public company listed on the Australian Securities Exchange (trading under the symbol ‘FWD’),
incorporated in Australia and operating in Australia and New Zealand.
The registered and business address of the Company is 21 Regal Place, East Perth, Western Australia. The telephone number of the
2017
$ '000
2016
$ '000
159,428
138,073
32,643
141,493
109,300
33,504
330,144
284,297
53
(52)
1
290
(95)
195
330,145
284,492
The Company and its wholly-owned Australian resident entities elected from 1 July 2003 to be taxed as a single entity.
Fleetwood Corporation Limited, as the head entity, and the subsidiaries in the tax consolidated group continue to account for their own
current and deferred tax amounts. The amounts are measured as if each entity continues to be a stand-alone taxpayer in its own right.
The current tax balances are then transferred to the head entity via intercompany balances. The entities within the Group have entered
a tax funding arrangement whereby each subsidiary will compensate the head entity for the amount of tax payable that would be
calculated as if the subsidiary was a tax paying entity.
All non-resource rental fleet units are available for sale and their sale is included in Sales revenue - Goods rather than loss on sale of
non-current assets.
3 Profit before income tax expense
The method used to calculate current and deferred tax amounts is summarised in note 1.8.
Expenses from continuing operations contain the following items:
Cost of sales
Depreciation and amortisation of:
buildings
leasehold improvements
plant and equipment
product development
Finance costs:
Bank loans and overdraft
Net bad and doubtful debts
Research and development costs
Equity settled share-based payments
260,666
226,240
34
748
5,761
713
7,256
34
1,921
6,602
748
9,305
921
968
869 1,192
255
292
310
317
23
4 Income taxes recognised in profit or loss
Current tax expense (benefit)
Deferred tax expense (benefit) relating to origination and reversal of temporary
Over provision of income tax in prior year
Continuing operations
Discontinued operations
Reconciliation of income tax expense to the accounting profit
Note
2017
$ '000
2016
$ '000
4,148 (1,531)
110 (398)
- (433)
4,258
(2,362)
33
(187)
(7,279)
Profit (loss) before tax from continuing operations
13,690
(13,381)
The tax rate used for 2017 and 2016 is the corporate tax rate of 30% payable by
Australian corporate entities on taxable profits under Australian tax law.
Income tax expense (benefit) calculated at 30% (2016: 30%)
4,107 (4,014)
Amortisation of leasehold improvements
Effect of lower tax rates on overseas income
Non-deductible expenses
Research & development allowance
Non-assessable amounts
Sundry items
Adjustments relating to income tax in prior year
Deferred tax
Deferred tax relating to:
Property, plant and equipment
Employee provisions
Other provisions
Accruals
Unused tax losses
8
(17)
88
(51)
109
14
4,258
-
4,258
8
(8)
2,054
(74)
90
15
(1,929)
(433)
(2,362)
Balance
2015
$ '000
Charged
to income
$ '000
Balance
2016
$ '000
Charged
to income
$ '000
Balance
2017
$ '000
2,733
1,973
12
104
-
4,822
5,515
46
6
97
3,635
9,299
8,248
2,019
18
201
3,635
14,121
(2,150)
189
-
122
(2,115)
(3,954)
6,097
2,208
18
324
1,520
10,167
The company anticipates future profits will be earned to utilise deferred tax assets.
242017
5 Segment information
Group operating segments are based on the internal reports that are reviewed and used by the Board of Directors (chief operating
decision makers) in assessing performance and determining the allocation of resources.
Business segments
Products / Services
RV Manufacturing
Manufacture of caravans
Parts and Accessories
Manufacture and distribution of RV and commercial vehicle parts and accessories
Modular Accommodation
Design, manufacture and sale of accommodation
Village Operations
Operation of accommodation villages
Unallocated
Group corporate function
Group revenue and results by reportable operating segment:
RV Manufacturing
Parts and Accessories
Modular Accommodation
Village Operations
Unallocated
Intersegment eliminations
Finance costs
Asset impairment
Profit (loss) before income tax benefit
Income tax (expense) benefit
Profit (loss) from continuing operations
Loss from discontinued operations
Profit (loss) attributable to members of the parent entity
Segment
revenue
Depreciation &
amortisation
Segment result (EBIT)
2017
$ '000
47,353
87,616
175,827
26,303
349
(7,303)
2016
$ '000
29,752
86,570
142,533
30,246
80
(4,689)
2017
$ '000
2016
$ '000
632
1,857
2,323
2,232
212
-
627
1,876
2,298
4,282
222
-
2017
$ '000
(6,721)
1,255
15,211
6,944
(2,078)
-
2016
$ '000
(8,096)
858
3,583
5,183
(3,629)
-
330,145
284,492
7,256
9,305
14,611
(2,101)
(921)
(968)
-
(10,312)
13,690
(13,381)
(4,258)
2,362
9,432
(11,019)
(437)
(16,985)
8,995
(28,004)
Revenue from the top three external customers comprised 23.9%, 11.3% & 6.5%, respectively (2016: 20.7%, 11.3% & 9.8%), of group
revenue, derived from the manufactured accommodation segment.
In 2016 impairment of $10.3 million relates to impaired goodwill and intangible assets to the Parts and Accessories segment.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1. Segment
results represents earnings before interest and tax without the allocation of corporate overheads.
Group assets and liabilities by segment:
Additions to
Segment assets non-current assets
2016
$ '000
2017
$ '000
2017
$ '000
2016
$ '000
RV Manufacturing
Parts and Accessories
Manufactured Accommodation
Village Operations
Unallocated
23,603
56,367
126,930
24,474
36,098
15,959
54,838
97,148
27,786
42,877
1,155
1,510
5,537
326
191
847
1,114
3,789
172
2,659
Segment
liabilities
2017
$ '000
6,840
13,413
41,921
2,782
6,601
2016
$ '000
6,280
13,343
25,428
2,442
4,788
267,472
238,608
8,719
8,581
71,557
52,281
Unallocated segment assets include idle mining rental assets of $20.2 million (2016: $25.8 million).
For the purposes of monitoring segment performance and allocating resources all assets and liabilities are allocated to the reportable
segments other than current and deferred tax amounts and assets and liabilities directly utilised by the Corporate entity.
25
5 Segment information (continued)
The Group operates in two principal geographical areas - Australia (country of domicile) and New Zealand.
Group non-current assets and revenues by geographical segment:
Australia
New Zealand
6 Dividends
Unrecognised
Final 2017 - 5 cents per share fully franked
Segment non-current
assets
Revenue from external
customers
2017
$ '000
2016
$ '000
2017
$ '000
2016
$ '000
113,282
423
116,268
466
323,587
6,558
281,176
6,081
113,705
116,734
330,145
287,257
2,017
$ '000
3,052
3,052
2,016
$ '000
-
-
On 28 August 2017 the Directors declared a fully franked final dividend of 5 cents per
share which was paid on 29 September 2017. As the dividend was not announced
until after 30 June 2017 it has not been included as a liability in these financial
statements.
Dividend franking account
30% franking credits available to shareholders of Fleetwood Corporation Limited for
subsequent years
26,146
26,146
7 Earnings per share
Earnings used in the calculation of basic and diluted earnings per share from
continuing and discontinued operations
Adjustment to exclude loss from discontinued operation
Earnings used in the calculation of basic and diluted earnings per share from
continuing operations
The weighted average number of ordinary shares used in the calculation of diluted
earnings per share reconciles to the weighted average number of ordinary shares
used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary shares used in the calculation of basic EPS
Number of shares deemed to be issued for no consideration in respect of options
Weighted average number of ordinary shares used in the calculation of diluted EPS
From continuing and discontinued operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
From continuing operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
8,995
(28,004)
437
16,985
9,432
(11,019)
Weighted average
number of shares used
61,039,412
61,039,412
104,810
131,220
61,144,222
61,170,632
14.7
14.7
15.5
15.4
(45.9)
(45.8)
(18.1)
(18.0)
262017
5 Segment information (continued)
The Group operates in two principal geographical areas - Australia (country of domicile) and New Zealand.
Group non-current assets and revenues by geographical segment:
8 Cash and cash equivalents
2017
$ '000
2016
$ '000
Cash and cash equivalents
5,383
6,116
Cash at bank is at call and received interest at a weighted average rate of 0.6% (2016:
0.98%)
9 Trade and other receivables
Current
Trade receivables
Less: allowance for doubtful debts
Other debtors
Non-Current
Other debtors
54,899
(1,363)
11,417
64,953
1,369
1,369
29,813
(608)
11,423
40,628
427
427
Trade and other debtors are non-interest bearing and are generally on terms ranging between 7 and 60 days. The average credit
period on sales of goods is 30 to 60 days. All trade and other debtors are expected to be settled within 60 days of year end.
The three largest outstanding customer receivables comprised 14.2%, 12.0% & 7.8%, respectively (2016: 12.5%, 9.6% & 9.5%), of
trade and other receivables.
Retentions on construction contracts included within other debtors amount to $0.4 million (2016: 0.2 million), to be received from the
customer on acceptance of the works performed and other contractual milestones.
Other non-current debtors represent funds advanced to the trust
term incentive plans.
to purchase shares on market for the employee and executive long
Trade receivables include amounts that are past due at the end of the reporting period but against which the Group has not recognised
an allowance for doubtful receivables because there has not been a significant change in the credit quality and the amounts are still
considered recoverable. The Group does not hold any collateral over these balances. An analysis of these amounts is included below:
Less than 3 months
Between 3 - 6 months
Longer than 6 months
Movement in allowance for doubtful debts
Balance at beginning of year
Impairment losses recognised on receivables
Amounts (written off) / provided for during the year
134
48
476
657
608
82
673
1,363
4,081
41
645
4,767
387
625
(404)
608
Segment non-current
Revenue from external
assets
customers
2017
$ '000
2016
$ '000
2017
$ '000
2016
$ '000
113,282
116,268
323,587
281,176
423
466
6,558
6,081
113,705
116,734
330,145
287,257
2,017
$ '000
3,052
3,052
2,016
$ '000
-
-
Australia
New Zealand
6 Dividends
Unrecognised
Final 2017 - 5 cents per share fully franked
statements.
Dividend franking account
subsequent years
7 Earnings per share
On 28 August 2017 the Directors declared a fully franked final dividend of 5 cents per
share which was paid on 29 September 2017. As the dividend was not announced
until after 30 June 2017 it has not been included as a liability in these financial
30% franking credits available to shareholders of Fleetwood Corporation Limited for
26,146
26,146
Earnings used in the calculation of basic and diluted earnings per share from
continuing and discontinued operations
Adjustment to exclude loss from discontinued operation
Earnings used in the calculation of basic and diluted earnings per share from
continuing operations
The weighted average number of ordinary shares used in the calculation of diluted
earnings per share reconciles to the weighted average number of ordinary shares
used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary shares used in the calculation of basic EPS
Number of shares deemed to be issued for no consideration in respect of options
Weighted average number of ordinary shares used in the calculation of diluted EPS
From continuing and discontinued operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
From continuing operations
Basic earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
8,995
(28,004)
437
16,985
9,432
(11,019)
Weighted average
number of shares used
61,039,412
61,039,412
104,810
131,220
61,144,222
61,170,632
14.7
14.7
15.5
15.4
(45.9)
(45.8)
(18.1)
(18.0)
27
10 Inventories
Current
Raw materials & stores
Work in progress
Finished goods
2017
$ '000
2016
$ '000
11,241
26,651
25,319
63,211
8,832
17,984
22,475
49,291
The cost of inventories recognised as an expense during the year in respect of continuing operations was $138.7 million (2016: $115.0
million).
11 Non-current assets held for sale
Plant & equipment - idle mining rental assets
Further information in respect of the Group's discontinued operation is set out in note 33.
12 Property, plant and equipment
Freehold land
Cost
Buildings
Cost
Accumulated depreciation
Leasehold property and improvements
Cost
Accumulated amortisation
Plant and equipment
Cost
Accumulated depreciation
Assets under construction
Cost
20,220
20,220
25,839
25,839
2,964
2,964
1,342
(374)
968
1,342
(340)
1,002
50,391
(39,876)
50,744
(39,490)
10,515
11,254
72,477
(41,365)
67,928
(38,326)
31,112
29,602
1,289
46,848
1,014
45,836
282017
The cost of inventories recognised as an expense during the year in respect of continuing operations was $138.7 million (2016: $115.0
Further information in respect of the Group's discontinued operation is set out in note 33.
10 Inventories
Current
Raw materials & stores
Work in progress
Finished goods
million).
11 Non-current assets held for sale
Plant & equipment - idle mining rental assets
12 Property, plant and equipment
Freehold land
Cost
Buildings
Cost
Accumulated depreciation
Leasehold property and improvements
Cost
Accumulated amortisation
Plant and equipment
Cost
Accumulated depreciation
Assets under construction
Cost
2017
$ '000
2016
$ '000
11,241
26,651
25,319
63,211
8,832
17,984
22,475
49,291
20,220
20,220
25,839
25,839
2,964
2,964
1,342
(374)
968
1,342
(340)
1,002
50,391
(39,876)
50,744
(39,490)
10,515
11,254
72,477
(41,365)
67,928
(38,326)
31,112
29,602
1,289
46,848
1,014
45,836
12 Property, plant and equipment (continued)
Movement in the carrying amounts of each class of property, plant and equipment:
2017 Financial Year
Balance at 1 July 2016
Additions
Transferred from assets under construction
Transferred from product development WIP
Transferred to plant and equipment
Disposals
Depreciation and amortisation
Balance at 30 June 2017
2016 Financial Year
Balance at 1 July 2015
Additions
Transferred to non current assets held for sale
Transferred from assets under construction
Transferred to plant and equipment
Transferred to other debtors
Transferred to other creditors
Disposals
Depreciation and amortisation
Impairment
Effect of foreign exchange differences
Freehold
land Buildings
Leasehold
Property
Plant and
equipment
Assets under
Construction
2,964
1,002
11,254
-
-
-
-
-
-
2,964
-
-
-
-
-
(34)
968
8
-
-
-
-
(748)
29,602
3,947
4,489
325
-
(1,489)
(5,761)
1,014
4,764
-
-
(4,489)
-
-
Total
45,836
8,719
4,489
325
(4,489)
(1,489)
(6,543)
10,514
31,113
1,289
46,848
2,964
1,036
13,161
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
-
-
-
-
-
-
(34)
(1,921)
-
-
-
-
66,528
3,095
(25,839)
27,733
-
-
288
(6,143)
(16,397)
(19,680)
17
23,987
107,676
4,989
8,098
-
-
(25,839)
27,733
(27,733)
(27,733)
(126)
-
(126)
288
(103)
(6,246)
-
-
-
(18,352)
(19,680)
17
Balance at 30 June 2016
2,964
1,002
11,254
29,602
1,014
45,836
29
13 Goodwill
Goodwill
Reconciliation of the carrying amount of Goodwill:
Gross carrying amount
Opening balance
Additional amounts recognised from business combination occurring during the period
Effect of foreign exchange differences
Accumulated impairment
Opening balance
Impairment loss in respect of canopies, trays and accessories CGU
Individual cash-generating unit (CGU) allocations:
Parts and accessories
Canopies, trays and accessories
Manufactured accommodation
2017
$ '000
2016
$ '000
55,230
55,230
68,856
-
-
68,856
68,858
-
(2)
68,856
(13,626)
-
(7,097)
(6,529)
(13,626)
(13,626)
12,401
4,509
38,320
55,230
12,401
4,509
38,320
55,230
The recoverable amount of the cash generating units has been determined based on value in use. The value in use has been
calculated using cashflow projections based on financial budgets approved by the board with key assumptions based on past
experience and where applicable external sources of information. Projections are extrapolated for a 5 year period using an estimated
growth rate. 2.8% (2016: 2.5%) for parts and accessories CGU, 2.5% (2016: 2.5%) for canopies, trays and accessories CGU and 2.5%
(2016: 2.5%) for manufactured accommodation CGU. The terminal growth rate used for all CGUs is 2.5% (2016: 2.5%).
Pre-tax discount rate assumptions utilised in the value-in-use calculations are: 16.0% (2016: 17.8%) for parts and accessories CGU,
16.0% (2016: 17.0%) for canopies, trays and accessories CGU and 16.00% (2016: 9.65%) for manufactured accommodation CGU.
The discount rate recognises the risk factor applicable to the industry in which each CGU operates.
the Parts and Accessories CGU,
In respect of
foreign exchange rates and EBIT are considered to be key
assumptions used in the value-in-use calculations. The cash flow projection for 2018 assumes an increase in annual EBIT from the
CGU’s actual 2017 greater than 2.5%. This is based on anticipated sales of new products and the effects of cost reduction initiatives on
operating expenditures enacted in fiscal 2017. Otherwise, the projection for 2018 reflects stable profit margins achieved immediately
before the budget period.
the discount rate,
Management has used the forecasts of industry specialists to determine the anticipated foreign exchange rates applied to overseas
purchases in the forecasted periods. With all other inputs held constant, if the AUD were to weaken by approximately 8% to the USD
when compared to the industry specialists’ predictions, the CGU’s recoverable amount would be equivalent to its carrying amount.
If management’s assumptions for 2018 cash flows as described above were to be achieved, and maintaining steady growth of 2.5% for
each period thereafter, the carrying amount would exceed the recoverable amount and no reasonable fluctuation in discounts rates or
growth rates could cause the CGU’s carrying amount to exceeds its recoverable amount.
Testing for impairment is carried out on an annual basis and whenever there is an indication of impairment. In 2016 a $6.5 million
impairment was recorded against the goodwill of the canopies, trays and accessories CGU reflecting the challenging environment for
Flexiglass. The recoverable amount of each CGU equals or exceeds the carrying amount of goodwill as at 30 June 2017.
302017
13 Goodwill
Goodwill
Gross carrying amount
Opening balance
Reconciliation of the carrying amount of Goodwill:
Additional amounts recognised from business combination occurring during the period
Effect of foreign exchange differences
Accumulated impairment
Opening balance
Impairment loss in respect of canopies, trays and accessories CGU
Individual cash-generating unit (CGU) allocations:
Parts and accessories
Canopies, trays and accessories
Manufactured accommodation
2017
$ '000
2016
$ '000
55,230
55,230
68,856
68,858
-
(2)
68,856
68,856
(13,626)
(7,097)
(6,529)
(13,626)
(13,626)
-
-
-
12,401
4,509
38,320
55,230
12,401
4,509
38,320
55,230
The recoverable amount of the cash generating units has been determined based on value in use. The value in use has been
calculated using cashflow projections based on financial budgets approved by the board with key assumptions based on past
experience and where applicable external sources of information. Projections are extrapolated for a 5 year period using an estimated
growth rate. 2.8% (2016: 2.5%) for parts and accessories CGU, 2.5% (2016: 2.5%) for canopies, trays and accessories CGU and 2.5%
(2016: 2.5%) for manufactured accommodation CGU. The terminal growth rate used for all CGUs is 2.5% (2016: 2.5%).
Pre-tax discount rate assumptions utilised in the value-in-use calculations are: 16.0% (2016: 17.8%) for parts and accessories CGU,
16.0% (2016: 17.0%) for canopies, trays and accessories CGU and 16.00% (2016: 9.65%) for manufactured accommodation CGU.
The discount rate recognises the risk factor applicable to the industry in which each CGU operates.
In respect of
the Parts and Accessories CGU,
the discount rate,
foreign exchange rates and EBIT are considered to be key
assumptions used in the value-in-use calculations. The cash flow projection for 2018 assumes an increase in annual EBIT from the
CGU’s actual 2017 greater than 2.5%. This is based on anticipated sales of new products and the effects of cost reduction initiatives on
operating expenditures enacted in fiscal 2017. Otherwise, the projection for 2018 reflects stable profit margins achieved immediately
before the budget period.
Management has used the forecasts of industry specialists to determine the anticipated foreign exchange rates applied to overseas
purchases in the forecasted periods. With all other inputs held constant, if the AUD were to weaken by approximately 8% to the USD
when compared to the industry specialists’ predictions, the CGU’s recoverable amount would be equivalent to its carrying amount.
If management’s assumptions for 2018 cash flows as described above were to be achieved, and maintaining steady growth of 2.5% for
each period thereafter, the carrying amount would exceed the recoverable amount and no reasonable fluctuation in discounts rates or
growth rates could cause the CGU’s carrying amount to exceeds its recoverable amount.
Testing for impairment is carried out on an annual basis and whenever there is an indication of impairment. In 2016 a $6.5 million
impairment was recorded against the goodwill of the canopies, trays and accessories CGU reflecting the challenging environment for
Flexiglass. The recoverable amount of each CGU equals or exceeds the carrying amount of goodwill as at 30 June 2017.
14 Intangible assets
Product development
At cost
Accumulated amortisation
Product development WIP
At cost
Reconciliation of the carrying amounts:
Product development
Cost
Opening balance
Transferred from product development WIP
Additions
Disposals
Impairment
Accumulated amortisation
Opening balance
Amortisation charged for the year
Eliminated on disposal
Eliminated on impairment
Product development WIP
Carrying amount at beginning of year
Additions
Impairment
Transferred to product development
Transferred to plant and equipment
Intangible assets have a useful life of 2 to 5 years.
No impairment was recorded against product development in 2017 (2016:$3.7 million).
15 Trade and other payables
Trade creditors
Payments in advance
Other creditors and accruals
2017
$ '000
2016
$ '000
274
(183)
91
-
91
289
676
-
(691)
-
274
160
713
(690)
-
183
991
10
-
(676)
(325)
-
91
289
(160)
129
991
1,120
4,993
505
238
(423)
(5,025)
289
1,932
748
(423)
(2,097)
160
2,105
246
(854)
(506)
-
991
1,120
34,289
47
24,495
58,831
27,506
51
14,690
42,247
Payables include amounts for goods received not invoiced. Trade and other payables are non-interest bearing. The average credit
period on purchases is 45 days.
Included in other creditors and accruals is $8.2 million of advances received from customers related to work not yet performed on
construction contracts in progress at the end of the reporting period (2016: $2.6 million).
31
16 Provisions
Current
Employee benefits
Other
Non-current
Employee benefits
Aggregate employee benefits
2017
$ '000
2016
$ '000
5,812
-
5,812
1,551
7,363
5,544
12
5,556
1,177
6,721
Provisions for employee benefits represent accrued annual leave and long sevice leave entitlements. Based on past experience, the
consolidated entity does not expect the full amount of annual leave or long service leave balances classified as current liabilities to be
settled within the next 12 months.
17 Interest bearing liabilities
Current - at amortised cost
Bank loans - secured
18 Financing arrangements
The consolidated entity has access to the following lines of credit:
Facilities available
Bank overdraft
Bank loans
Bank guarantees
Multi Option Facility
18
5,000
5,000
3,000
3,000
-
18,000
2,000
20,000
1,500
20,000
3,500
25,000
Under the terms of the Multi Option Facility, the consolidated entity is entitled to draw on any mix of commercial bill, bank guarantees,
standby letter of credit or bank overdraft.
Facilities utilised
Bank loans
Bank guarantees
Facilities not utilised
Bank overdraft
Bank loans
Bank guarantees
17
5,000
1,842
6,842
-
13,000
158
13,158
3,000
1,438
4,438
1,500
17,000
2,062
20,562
Bank loans
Bank loans are secured by a mortgage debenture over the assets of the consolidated entity and bear interest at the BBSY rate plus
0.95% (2016: 0.875%) plus a line fee of 0.90% (2016: 0.875%). The effective annual interest rate at the end of the financial year was
3.50% (2016: 3.65%).
Bank guarantees
Bank guarantees are utilised for construction contracts. No liability has been recognised in the statement of financial position in
respect of bank guarantees.
322017
19 Commitments
Operating lease commitments
Within one year
Between one and five years
2017
$ '000
2016
$ '000
7,819
10,771
18,590
7,293
13,846
21,139
Provisions for employee benefits represent accrued annual leave and long sevice leave entitlements. Based on past experience, the
consolidated entity does not expect the full amount of annual leave or long service leave balances classified as current liabilities to be
Operating lease receivables
Within one year
Between one and five years
7,425
2,701
6,080
4,315
10,126
10,395
The Group has a number of non-cancellable operating lease arrangements for land and buildings with lease terms of between 1 to 5
years. The leases have varying terms and renewal rights. The majority of these lease contracts contain market review clauses in the
event that the lessee exercises its option to renew. The lessee does not have the option to purchase the property at the expiry of the
lease period.
The Group has a number of non-cancellable operating lease arrangements for portable buildings and contracts for the provision of
accommodation services. The leases have varying terms and renewal rights. The majority of these lease contracts contain market
review clauses. The lessee does not have the option to purchase the property at the expiry of the lease period.
20 Other financial liabilities
Current
Derivatives not in designated hedge accounting relationships
363
301
The Group has entered into forward exchange contracts to hedge foreign currency risk on highly probable future purchases of
inventory from overseas.
21 Share based payments
Employee plan
A scheme under which rights to acquire ordinary shares may be issued by the company to employees for no consideration was
approved by shareholders at the 2014 annual general meeting. Employees who have been continuously employed by the group for at
least one year are eligible to participate in the scheme. Employees will be issued shares in Fleetwood Corporation Limited upon the
exercise of the rights. One third of the rights are exercisable 1 year from the date of issue and a further one third of the rights are
exercisable in each of the next 2 years. One share right represents one Fleetwood Corporation Limited share. There are no voting or
dividend entitlements attaching to the rights. No amount is payable upon exercise of the rights and shares issued upon exercise rank
equally with existing shares on the ASX.
2017
$ '000
2016
$ '000
5,812
-
5,812
1,551
7,363
5,544
12
5,556
1,177
6,721
5,000
5,000
3,000
3,000
-
18,000
2,000
20,000
5,000
1,842
6,842
-
13,000
158
13,158
1,500
20,000
3,500
25,000
3,000
1,438
4,438
1,500
17,000
2,062
20,562
18
17
16 Provisions
Employee benefits
Current
Other
Non-current
Employee benefits
Aggregate employee benefits
settled within the next 12 months.
17 Interest bearing liabilities
Current - at amortised cost
Bank loans - secured
18 Financing arrangements
The consolidated entity has access to the following lines of credit:
Facilities available
Bank overdraft
Bank loans
Bank guarantees
Multi Option Facility
Facilities utilised
Bank loans
Bank guarantees
Facilities not utilised
Bank overdraft
Bank loans
Bank guarantees
Bank loans
3.50% (2016: 3.65%).
Bank guarantees
respect of bank guarantees.
Under the terms of the Multi Option Facility, the consolidated entity is entitled to draw on any mix of commercial bill, bank guarantees,
standby letter of credit or bank overdraft.
Bank loans are secured by a mortgage debenture over the assets of the consolidated entity and bear interest at the BBSY rate plus
0.95% (2016: 0.875%) plus a line fee of 0.90% (2016: 0.875%). The effective annual interest rate at the end of the financial year was
Bank guarantees are utilised for construction contracts. No liability has been recognised in the statement of financial position in
33
21 Share based payments (continued)
Summary of movements:
Weighted
average
share
price at
grant date
$
1.35
1.44
1.94
Grant
date
18/12/14
2017
2016
08/09/15
2017
2016
01/12/16
2017
Rights at
beginning of
year
No.
Rights
granted
No.
Rights
expired /
forfeited
No.
Rights
exercised
(shares
issued)
No.
Rights at
end of year
No.
Vested at
end of year
No.
Fair value
(market value) of
shares on issue
$
40,060
72,600
-
-
(2,520)
(11,360)
(19,330)
(21,180)
18,210
40,060
33,600
-
-
220,680
(667)
(187,080)
(11,200)
-
21,733
33,600
-
208,480
(17,280)
-
191,200
-
-
-
-
-
40,400
29,758
23,408
-
-
2017
2016
63,808
29,758
Employee share rights granted have been valued at the volume weighted average price at which Fleetwood’s share traded over five
trading days commencing 1 December 2016 ($1.94).
(20,467)
(198,440)
(30,530)
(21,180)
231,143
73,660
208,480
220,680
73,660
72,600
-
-
Executive Plan
Long-term incentives in the form of shares received by the Managing Director, executives and key management personnel are
determined in accordance with the provisions of the Executive Long Term Incentive plan (LTIP), which was approved by shareholders at
the 2014 annual general meeting.
Under the plan, eligible directors, executives and key management personnel are invited to participate in a grant of shares or options
through a trust established for the LTIP. The Company provides participants with an interest free, non-recourse loan for an amount
equivalent to the price of the shares or options issued, for the sole purpose of acquiring units in the trust. The loans are repayable
upon the eventual sale or transfer of the shares from the trust to the participant. The share units are restricted and subject to a risk of
forfeiture until the end of the vesting period.
The number of shares granted is determined by the Board. The price of the shares issued is calculated using the Volume Weighted
Average Price (VWAP) over the five days prior to the grant date.
The LTIP contains a gateway level of minimum performance below which no benefit accrues. The performance gateway is met where
the Company’s total shareholder return from grant to vesting date, equals or exceeds 15% p.a. and is equal to or greater than the ASX
All Ordinaries Index.
Assuming the participant continues to be employed by Fleetwood and the performance hurdles are reached, the vesting dates for the
shares are as follows: for one third of the shares, the date that is at least a minimum of 1 year after being granted; for two thirds of the
shares, the date that is at least a minimum of 2 years after being granted; and for the balance of the shares, the date that is at least a
minimum of 3 years after being granted.
In the event that a performance hurdle is not reached, or the value of the shares is less than the outstanding balance of the loan, or the
participant ceases to be an employee for reasons other than death, illness and injury, the participant may surrender and forfeit the units
in the trust to the Company in full settlement of the loan balance. The share units expire 5 years from the grant date. Until the shares
vest, voting and dividend rights remain with the trustee.
342017
21 Share based payments (continued)
Summary of movements:
Weighted
average
share
price at
grant date
$
Rights at
beginning of
year
No.
Grant
date
18/12/14
1.35
Rights
Rights
exercised
Rights
granted
No.
expired /
forfeited
No.
(shares
Rights at
Vested at
(market value) of
issued)
end of year
end of year
shares on issue
No.
No.
No.
Fair value
40,400
29,758
23,408
$
-
-
63,808
29,758
08/09/15
1.44
01/12/16
2017
1.94
2017
2016
2017
2016
2017
2016
(2,520)
(11,360)
(19,330)
(21,180)
18,210
40,060
-
-
-
40,060
72,600
33,600
-
-
(667)
(11,200)
220,680
(187,080)
21,733
33,600
208,480
(17,280)
191,200
-
-
73,660
72,600
208,480
220,680
(20,467)
(198,440)
(30,530)
(21,180)
231,143
73,660
-
-
-
-
-
-
-
Employee share rights granted have been valued at the volume weighted average price at which Fleetwood’s share traded over five
trading days commencing 1 December 2016 ($1.94).
Executive Plan
Long-term incentives in the form of shares received by the Managing Director, executives and key management personnel are
determined in accordance with the provisions of the Executive Long Term Incentive plan (LTIP), which was approved by shareholders at
the 2014 annual general meeting.
Under the plan, eligible directors, executives and key management personnel are invited to participate in a grant of shares or options
through a trust established for the LTIP. The Company provides participants with an interest free, non-recourse loan for an amount
equivalent to the price of the shares or options issued, for the sole purpose of acquiring units in the trust. The loans are repayable
upon the eventual sale or transfer of the shares from the trust to the participant. The share units are restricted and subject to a risk of
forfeiture until the end of the vesting period.
The number of shares granted is determined by the Board. The price of the shares issued is calculated using the Volume Weighted
Average Price (VWAP) over the five days prior to the grant date.
The LTIP contains a gateway level of minimum performance below which no benefit accrues. The performance gateway is met where
the Company’s total shareholder return from grant to vesting date, equals or exceeds 15% p.a. and is equal to or greater than the ASX
All Ordinaries Index.
Assuming the participant continues to be employed by Fleetwood and the performance hurdles are reached, the vesting dates for the
shares are as follows: for one third of the shares, the date that is at least a minimum of 1 year after being granted; for two thirds of the
shares, the date that is at least a minimum of 2 years after being granted; and for the balance of the shares, the date that is at least a
minimum of 3 years after being granted.
In the event that a performance hurdle is not reached, or the value of the shares is less than the outstanding balance of the loan, or the
participant ceases to be an employee for reasons other than death, illness and injury, the participant may surrender and forfeit the units
in the trust to the Company in full settlement of the loan balance. The share units expire 5 years from the grant date. Until the shares
vest, voting and dividend rights remain with the trustee.
21 Share based payments (continued)
Summary of movements:
Weighted
average
share
price at
grant date
$
1.35
1.22
1.94
2.19
Grant
date
18/12/14
2017
2016
18/12/15
2017
2016
20/12/16
2017
12/06/17
2017
2017
2016
Share units information:
Share units at
beginning of
year
No.
Share uints
granted
No.
Share units
expired /
forfeited
No.
Share units
exercised
(shares
issued)
No.
Share
units at end of
year
No.
Vested at
end of year
No.
Fair value
(market value) of
shares on
exercise
$
300,000
360,000
-
-
-
(60,000)
(6,800)
-
293,200
300,000
99,000
102,000
13,260
-
355,000
-
-
355,000
-
418,000
60,000
478,000
355,000
655,000
360,000
-
-
-
-
-
-
-
-
355,000
355,000
120,700
-
418,000
60,000
-
-
-
-
-
-
-
(60,000)
(6,800)
-
1,126,200
655,000
219,700
102,000
13,260
-
Grant
Date
Expiry
Date
Vesting
tranche
Volatility
%
Dividend
yield
%
Risk free
interest
rate
%
Fair value
at grant
date
$
Exercise
price
$
Weighted
average
share price
at grant
date
$
Weighted
average
share price
at exercise
date 2017
$
Weighted
average
share price
at exercise
date 2016
$
18/12/19
18/12/14
20/12/16
18/12/15
18/12/21
18/12/20
1
2
3
1
2
3
1
2
3
1
2
3
-
-
-
-
-
-
-
-
-
-
-
-
The fair value at grant date for Executive shares units is determined using a Monte Carlo simulation model. The expected volatility is
based on historical share price volatility over the past 5 years, and the risk free interest rate and dividend yield have been assessed
based on prevailing market conditions. In addition, specific factors in relation to the likely achievement of performance hurdles and
employment tenure have been taken into account.
47.57
47.57
47.57
50.21
50.21
50.21
49.48
49.48
49.48
49.48
49.48
49.48
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
1.90
1.90
1.90
2.40
2.40
2.40
1.73
1.73
1.73
2.33
2.33
2.33
2.53
2.53
2.53
1.35
1.35
1.35
1.22
1.22
1.22
1.94
1.94
1.94
2.19
2.19
2.19
1.35
1.35
1.35
1.22
1.22
1.22
1.94
1.94
1.94
2.19
2.19
2.19
0.43
0.42
0.39
0.46
0.42
0.37
0.82
0.74
0.68
0.91
0.83
0.72
-
-
-
-
-
-
-
-
-
-
-
-
12/06/17
12/06/22
35
21 Share based payments (continued)
Employee option plan
The group ceased offering options to its employees and now utilizes the rights plan approved at its 2014 AGM. Options under the old
Employee option plan remain valid options with the same terms as they were issued.
Employees with more than 1 year’s service with the consolidated entity were granted options to purchase ordinary shares in Fleetwood
Corporation Limited. No amounts are payable for the options. 50% of the options are exercisable 1 year from the date of issue and a
further 25% are exercisable in each of the next 2 years. The options expire 5 years from the date of issue. There are no voting or
dividend rights attaching to the options.
Summary of movements:
Exercise
price
$
Options at
beginning of
year
No.
Options
granted
No.
Options
expired /
forfeited
No.
Options
exercised
(shares
issued)
No.
Options
at end of
year
No.
Vested
at end of
year
No.
Proceeds
received on
exercise
$
Fair value
(market value)
of shares on
exercise
$
8.02
8.68
9.39
2.56
237,031
215,517
255,156
256,440
303,400
349,250
416,050
821,207
1,211,637
-
-
-
-
-
-
-
-
-
(237,031)
(215,517)
(39,639)
(13,200)
(46,960)
(17,250)
(66,800)
(245,967)
(390,430)
-
-
-
-
-
-
-
-
-
-
-
-
215,517
-
215,517
243,240
256,440
243,240
256,440
332,000
349,250
332,000
261,938
575,240
821,207
575,240
733,895
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Issue
date
31/10/10
2016
02/09/11
2017
2016
29/08/12
2017
2016
30/08/13
2017
2016
2017
2016
Weighted average
exercise price ($)
2017
2016
Options information:
6.30
6.63
N/A
N/A
8.29
7.32
N/A
N/A
5.45
6.30
5.45
6.74
Option
life
Issue Date Expiry Date Years
Volatility
%
Dividend
yield
%
Risk free
interest
rate
%
Fair value
at grant
date
$
Exercise
price
$
Share
price at
grant date
$
Weighted
average share
price at
exercise date
2017
$
Weighted
average share
price at
exercise date
2016
$
31/10/10
02/09/11
29/08/12
30/08/13
30/10/15
01/09/16
28/08/17
30/08/18
5
5
5
5
40.00
35.69
35.80
45.03
6.14
6.18
7.59
3.64
4.50
4.50
2.77
2.54
4.03
2.53
2.31
0.90
8.02
8.68
9.39
2.56
10.02
10.66
11.78
3.10
-
-
-
-
-
-
-
-
362017
21 Share based payments (continued)
Employee option plan
21 Share based payments (continued)
Executive option plan
The group ceased offering options to its employees and now utilizes the rights plan approved at its 2014 AGM. Options under the old
Employee option plan remain valid options with the same terms as they were issued.
The previous Executive option plan has been replaced by the Executive Long Term Incentive Plan as approved at the 2014 AGM.
Options issued under the old Executive option plan remain valid options with the same terms as they were issued.
Employees with more than 1 year’s service with the consolidated entity were granted options to purchase ordinary shares in Fleetwood
Corporation Limited. No amounts are payable for the options. 50% of the options are exercisable 1 year from the date of issue and a
further 25% are exercisable in each of the next 2 years. The options expire 5 years from the date of issue. There are no voting or
dividend rights attaching to the options.
Summary of movements:
Issue
Exercise
beginning of
Options at
Options
exercised
Options
Vested
Proceeds
(market value)
year
No.
Options
granted
No.
expired /
forfeited
No.
at end of
at end of
received on
of shares on
exercise
exercise
year
No.
year
No.
Options
(shares
issued)
No.
Fair value
date
31/10/10
2016
price
$
8.02
02/09/11
8.68
29/08/12
9.39
30/08/13
2.56
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Weighted average
exercise price ($)
Options information:
237,031
(237,031)
-
-
-
-
-
-
-
-
-
(215,517)
(39,639)
(13,200)
(46,960)
(17,250)
(66,800)
(245,967)
(390,430)
-
-
-
-
-
-
-
-
-
-
-
-
-
215,517
215,517
243,240
256,440
243,240
256,440
332,000
349,250
332,000
261,938
575,240
821,207
575,240
733,895
215,517
255,156
256,440
303,400
349,250
416,050
821,207
1,211,637
6.30
6.63
N/A
N/A
8.29
7.32
N/A
N/A
5.45
6.30
5.45
6.74
Option
Dividend
interest
at grant
Exercise
price at
exercise date
exercise date
life
Volatility
price
grant date
2017
2016
Risk free
Fair value
Share
price at
price at
Weighted
Weighted
average share
average share
Issue Date Expiry Date Years
%
31/10/10
02/09/11
29/08/12
30/08/13
30/10/15
01/09/16
28/08/17
30/08/18
5
5
5
5
40.00
35.69
35.80
45.03
yield
%
6.14
6.18
7.59
3.64
rate
%
4.50
4.50
2.77
2.54
date
$
4.03
2.53
2.31
0.90
$
$
8.02
8.68
9.39
2.56
10.02
10.66
11.78
3.10
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
Executives are granted options to purchase ordinary shares in Fleetwood Corporation Limited. No amounts are payable for the options.
For options issued prior to 1 July 2012, one third of the options are exercisable after the 30 June subsequent to the date of issue, a
further one third of the options are exercisable in each of the next 2 years. Options issued after 1 July 2012 vest three years from the
issue date. The options are only exercisable if the company’s total shareholder return equals or exceeds 15% p.a. compounded from
the inception of the plan (1999) and is equal to or greater than the ASX300 All Industrials Accumulation Index. The options expire 5
years from the date of issue. There are no voting or dividend rights attaching to the options.
Summary of movements:
Exercise
price
$
Options at
beginning of
year
No.
Options
granted
No.
Options
expired /
forfeited
No.
Options
exercised
(shares
issued)
No.
Options
at end of
year
No.
Vested
at end of
year
No.
Proceeds
received on
exercise
$
Fair value
(market value)
of shares on
exercise
$
8.02
8.68
10.57
2.88
81,666
39,171
96,775
65,000
130,000
140,000
270,000
244,171
578,441
-
-
-
-
-
-
-
-
-
(81,666)
(39,171)
(57,604)
-
(65,000)
-
(130,000)
(39,171)
(334,270)
-
-
-
-
-
-
-
-
-
-
-
-
39,171
-
39,171
65,000
65,000
65,000
65,000
140,000
140,000
140,000
-
205,000
244,171
205,000
104,171
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Issue
date
31/10/10
2016
02/09/11
2017
2016
20/02/13
2017
2016
30/08/13
2017
2016
2017
2016
Weighted average
exercise price ($)
2017
2016
Options information:
5.86
6.30
N/A
N/A
8.68
6.63
N/A
N/A
5.32
5.86
5.32
9.86
Option
life
Issue Date Expiry Date Years
Volatility
%
Dividend
yield
%
Risk free
interest
rate
%
Fair value
at grant
date
$
Exercise
price
$
Share
price at
grant date
$
Weighted
average share
price at
exercise date
2017
$
Weighted
average share
price at
exercise date
2016
$
31/10/10
02/09/11
20/02/13
30/08/13
30/10/15
01/09/16
19/02/18
30/08/18
5
5
5
5
40.00
35.69
35.39
45.03
6.14
6.18
7.59
3.64
4.50
4.50
2.85
3.68
2.43
2.53
1.15
1.40
8.02
8.68
10.57
2.88
10.02
10.66
9.66
3.10
-
-
-
-
-
-
-
-
Employee and Executive share options outstanding at the end of the financial year had a weighted average remaining contractual life of
296 days.
37
21 Share based payments (continued)
The grant date weighted average fair value of options in existence at reporting date is:
Options issued in 2012: $2.50 per option
Options issued in 2013: $1.57 per option
Options issued in 2014: $0.67 per option
Employee Options were valued using the Black-Scholes option pricing model. The expected life used in the model has been adjusted
based on management’s best estimate of the effects of exercise restrictions and behavioral considerations. The expected volatility is
based on historical share price volatility over the past 5 years, and the risk free interest rate and dividend yield have been assessed
based on prevailing market conditions.
Executive Options were valued using a Monte Carlo simulation model. The expected volatility is based on historical share price volatility
over the past 5 years, and the risk free interest rate and dividend yield have been assessed based on prevailing market conditions.
2017
$ '000
2016
$ '000
22 Issued capital
Issued and paid-up capital
61,039,412 (2016: 61,039,412) ordinary shares, fully paid
195,371
195,079
Holders of ordinary shares are entitled to receive dividends as declared and to one vote per share held.
2017
2016
# Shares
$ '000
# Shares
$ '000
Movements in ordinary share capital
Balance at beginning of year
Equity settled share-based payments
Shares issued pursuant to Dividend Reinvestment Plan
Shares issued pursuant to Employee and Executive Option Plans
61,039,412
-
-
-
195,079
292
-
-
61,039,412
-
-
-
194,762
317
-
-
Balance at the end of year
61,039,412
195,371
61,039,412
195,079
Ordinary shares are allotted under the dividend reinvestment plan at a discount to the weighted average price of ordinary shares sold
on the ASX over the period of 5 business days up to and including the record date. The current discount is 2.5%.
At 30 June 2017, employees held options over 575,240 ordinary shares of the Company, of which 243,240 will expire on 29 August
2017. At 30 June 2016, employees held options over 821,207 ordinary shares of the Company, of which 215,517 expired on 1
September 2016.
At 30 June 2017, employees held rights over 231,143 ordinary shares of the Company. The rights do not have an expiry date (2016:
73,500). At 30 June 2017, executives held options over 205,000 ordinary shares of the Company, of which 65,000 will expire on 20
February 2018. At 30 June 2016, executives held options over 244,171 ordinary shares of the Company, of which 39,171 expired on 1
September 2016.
23 Reserves (net of income tax)
Foreign currency translation reserve
Balance at beginning of year
Translation of foreign operations
Reserves relate to exchange differences on the translation of self-sustaining foreign operations.
(244)
301
57
(257)
13
(244)
382017
21 Share based payments (continued)
The grant date weighted average fair value of options in existence at reporting date is:
Options issued in 2012: $2.50 per option
Options issued in 2013: $1.57 per option
Options issued in 2014: $0.67 per option
Employee Options were valued using the Black-Scholes option pricing model. The expected life used in the model has been adjusted
based on management’s best estimate of the effects of exercise restrictions and behavioral considerations. The expected volatility is
based on historical share price volatility over the past 5 years, and the risk free interest rate and dividend yield have been assessed
based on prevailing market conditions.
Executive Options were valued using a Monte Carlo simulation model. The expected volatility is based on historical share price volatility
over the past 5 years, and the risk free interest rate and dividend yield have been assessed based on prevailing market conditions.
24 Retained earnings
Balance at beginning of year
Profit (loss) attributable to members of the parent entity
25 Auditors' remuneration
22 Issued capital
Issued and paid-up capital
2017
$ '000
2016
$ '000
Audit services
Other services - taxation and accounting assistance
The auditor of Fleetwood Corporation Limited is Grant Thornton Audit Pty Ltd.
61,039,412 (2016: 61,039,412) ordinary shares, fully paid
195,371
195,079
26 Deed of cross guarantee
2017
$ '000
2016
$ '000
(8,508)
8,995
19,496
(28,004)
487
(8,508)
135
-
135
130
6
136
Pursuant to an ASIC Class Order 98/1418 dated 13 August 1998, relief was granted to the wholly owned subsidiaries listed below from
the requirement to prepare, have audited and lodge financial reports.
It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of
the Deed is that the Company guarantees to each creditor, payment in full of any debt in the event of winding up of any subsidiaries
under certain provisions of the Corporations Act (Cth) 2001. If a winding up occurs under other provisions of the Law, the Company will
only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar
guarantees in the event that the Company is wound up.
Subsidiaries subject to the deed are:
Bocar Pty Ltd (formerly Bendigo Re-locatable Buildings Pty Ltd)
BRB Modular Pty Ltd
Camec Pty Ltd
Fleetwood Recreational Vehicles Pty Ltd
Fleetwood Finance (WA) Pty Ltd
Fleetwood Pty Ltd
Flexiglass Challenge Pty Ltd
Windsor Caravans Pty Ltd
A consolidated statement of financial performance and financial position comprising the Company and its subsidiaries, which are party
to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee is set out on the following page:
Holders of ordinary shares are entitled to receive dividends as declared and to one vote per share held.
2017
2016
# Shares
$ '000
# Shares
$ '000
Movements in ordinary share capital
Balance at beginning of year
Equity settled share-based payments
Shares issued pursuant to Dividend Reinvestment Plan
Shares issued pursuant to Employee and Executive Option Plans
61,039,412
195,079
61,039,412
-
-
-
292
-
-
-
-
-
194,762
317
-
-
Balance at the end of year
61,039,412
195,371
61,039,412
195,079
Ordinary shares are allotted under the dividend reinvestment plan at a discount to the weighted average price of ordinary shares sold
on the ASX over the period of 5 business days up to and including the record date. The current discount is 2.5%.
At 30 June 2017, employees held options over 575,240 ordinary shares of the Company, of which 243,240 will expire on 29 August
2017. At 30 June 2016, employees held options over 821,207 ordinary shares of the Company, of which 215,517 expired on 1
At 30 June 2017, employees held rights over 231,143 ordinary shares of the Company. The rights do not have an expiry date (2016:
73,500). At 30 June 2017, executives held options over 205,000 ordinary shares of the Company, of which 65,000 will expire on 20
February 2018. At 30 June 2016, executives held options over 244,171 ordinary shares of the Company, of which 39,171 expired on 1
September 2016.
September 2016.
23 Reserves (net of income tax)
Foreign currency translation reserve
Balance at beginning of year
Translation of foreign operations
Reserves relate to exchange differences on the translation of self-sustaining foreign operations.
(244)
301
57
(257)
13
(244)
39
26 Deed of cross guarantee (continued)
Statement of profit or loss
and other comprehensive income
Continuing operations
Sales revenue
Other income
Materials used
Sub-contract costs
Employee benefits expense
Operating leases
Other expenses
Profit before interest, tax, depreciation and amortisation and impairment
Depreciation and amortisation expense
Profit before interest, tax and impairment
Impairment of non-current assets
Profit (loss) before interest and tax
Finance costs
Profit (loss) before income tax expense for the year
Income tax (expense) benefit
Profit (loss) from continuing operations for the year
Discontinued operations
Loss from discontinued operation
Total profit (loss) and other comprehensive income for the year
2017
$ '000
2016
$ '000
324,592
609
(133,923)
(78,262)
(57,549)
(8,709)
(25,180)
21,578
(7,175)
14,403
281,498
1,259
(105,737)
(75,311)
(55,538)
(9,761)
(25,789)
10,621
(9,222)
1,399
-
(10,312)
14,403
(921)
13,482
(4,213)
(8,913)
(3,733)
(12,646)
2,470
9,269
(10,176)
(437)
(16,985)
8,832
(27,161)
402017
26 Deed of cross guarantee (continued)
Statement of profit or loss
and other comprehensive income
Continuing operations
Sales revenue
Other income
Materials used
Sub-contract costs
Employee benefits expense
Operating leases
Other expenses
Profit before interest, tax, depreciation and amortisation and impairment
Depreciation and amortisation expense
Profit before interest, tax and impairment
Impairment of non-current assets
Profit (loss) before interest and tax
Finance costs
Profit (loss) before income tax expense for the year
Income tax (expense) benefit
Discontinued operations
Loss from discontinued operation
Total profit (loss) and other comprehensive income for the year
324,592
609
(133,923)
(78,262)
(57,549)
(8,709)
(25,180)
21,578
(7,175)
14,403
14,403
(921)
13,482
(4,213)
281,498
1,259
(105,737)
(75,311)
(55,538)
(9,761)
(25,789)
10,621
(9,222)
1,399
(8,913)
(3,733)
(12,646)
2,470
-
(10,312)
(437)
(16,985)
8,832
(27,161)
Profit (loss) from continuing operations for the year
9,269
(10,176)
2017
$ '000
2016
$ '000
26 Deed of cross guarantee (continued)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Non-current assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Investments
Property, plant and equipment
Goodwill
Intangible assets
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing liabilities
Provisions
Other financial liabilities
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
4,874
63,937
60,932
20,219
5,805
39,566
47,296
25,839
149,962
118,506
1,369
66
46,704
55,256
91
10,319
113,805
263,767
57,618
5,000
5,775
363
68,756
1,551
1,551
427
66
45,649
55,256
1,120
14,146
116,664
235,170
41,296
3,000
5,521
301
50,118
1,177
1,177
70,307
51,295
193,460
183,875
195,364
57
(1,961)
195,073
(244)
(10,954)
193,460
183,875
27 Financial instruments
Capital management
The Group manages capital to ensure it will be able to continue as a going concern, while maximising returns to shareholders through
optimisation of debt and equity balances. The categories of financial instruments of the entity are apparent from the statement of
financial position. The Group’s overall strategy remains unchanged since 2015.
The capital structure of the Group includes borrowings and related repayment terms (as detailed in note 17), cash and cash equivalents
(as detailed in note 8) and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings
(as detailed in notes 22, 23 and 24).
Operating cash flows are used to maintain and expand the Group’s operating assets, make payments of tax and dividends and to repay
debt. Group policy is to borrow centrally to meet funding requirements. The Group does not have a target gearing ratio.
The group has requirements imposed by its financier pertaining to gearing ratio, shareholders’ funds and interest cover.
41
27 Financial instruments (continued)
Financial risk management objectives
Financial instruments comprise cash, receivables, payables, hire purchase creditors, and bank loans. All financial instruments except
forward foreign exchange contracts are carried at amortised cost. The Group manages its exposure to key financial risks, including
interest rate and currency risk in accordance with the Group financial risk management policy. The objective of the policy is to support
delivery of financial targets whilst providing financial security.
The main financial instrument risks are interest rate, foreign currency, credit and liquidity risk. Different methods are used to measure
and manage risks including monitoring exposure to interest and foreign exchange rates and assessments of market forecasts for
interest and foreign exchange rates. Ageing analysis and monitoring of specific credit allowances are undertaken to manage credit risk.
Liquidity risk is monitored through the development of rolling cash flow forecasts.
Foreign currency risk management
The Group undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations arise.
Exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts. The Group is mainly
exposed to United States Dollars, the Euro and Chinese Yuan Renminbi.
Foreign exchange sensitivity analysis to a 10% movement in the Australian Dollar
- 10%
+ 10%
USD
$ '000
Euro
$ '000
Renminbi
$ '000
Total
$ '000
USD
$ '000
Euro
$ '000
Renminbi
$ '000
Total
$ '000
2017 Profit
2016 Profit
2017 Equity
2016 Equity
(1,873)
(1,212)
(1,873)
(1,212)
(792)
(449)
(792)
(449)
(164)
(104)
(164)
(104)
(2,829)
(1,765)
(2,829)
(1,765)
1,873
1,212
1,873
1,212
792
449
792
449
164
104
164
104
2,829
1,765
2,829
1,765
Forward foreign exchange contracts
Group policy is to enter into forward foreign exchange contracts to manage the risk associated with anticipated purchases denominated
in foreign currency. Anticipated purchases are assessed out to twelve months from the date the contract is entered into, with 40-80% of
the anticipated exposure covered. Basis adjustments are made to the carrying amounts of non-financial items when the anticipated
purchase transaction takes place.
Outstanding
contracts
Buy USD
Less than 3 months
3 to 6 months
6 to 12 months
Buy Euro
Less than 3 months
3 to 6 months
6 to 12 months
Buy Renminbi
Less than 3 months
3 to 6 months
6 to 12 months
Average exchange rate
Foreign Currency
Notional Value
Fair Value
2017
$
0.75
0.75
0.75
0.65
0.69
0.66
5.04
5.27
5.15
2016
$
0.74
0.74
0.74
0.66
0.66
0.66
4.70
4.95
4.97
2017
FC '000
2016
FC '000
4,701
4,749
500
2,151
1,400
200
2,609
3,100
350
4,548
2,019
2,433
1,762
875
1,000
2,768
1,218
2,100
2017
$ '000
6,265
6,343
669
3,297
2,042
305
517
588
68
2016
$ '000
6,134
2,733
3,306
2,655
1,321
1,524
589
246
423
2017
$ '000
(150)
(152)
(16)
(92)
66
(1)
(17)
1
(2)
2016
$ '000
(142)
14
4
(72)
(24)
(39)
(30)
(4)
(8)
(363)
(301)
During 2017 a loss of $363,000 was recognised in profit and loss pertaining to forward exchange contracts (2016: $301,000 loss).
422017
27 Financial instruments (continued)
Financial risk management objectives
Financial instruments comprise cash, receivables, payables, hire purchase creditors, and bank loans. All financial instruments except
forward foreign exchange contracts are carried at amortised cost. The Group manages its exposure to key financial risks, including
interest rate and currency risk in accordance with the Group financial risk management policy. The objective of the policy is to support
delivery of financial targets whilst providing financial security.
The main financial instrument risks are interest rate, foreign currency, credit and liquidity risk. Different methods are used to measure
and manage risks including monitoring exposure to interest and foreign exchange rates and assessments of market forecasts for
interest and foreign exchange rates. Ageing analysis and monitoring of specific credit allowances are undertaken to manage credit risk.
Liquidity risk is monitored through the development of rolling cash flow forecasts.
Foreign currency risk management
The Group undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations arise.
Exchange rate exposures are managed within approved policy parameters utilising forward exchange contracts. The Group is mainly
exposed to United States Dollars, the Euro and Chinese Yuan Renminbi.
Foreign exchange sensitivity analysis to a 10% movement in the Australian Dollar
- 10%
+ 10%
USD
$ '000
Euro
Renminbi
$ '000
$ '000
Total
$ '000
USD
$ '000
Euro
Renminbi
$ '000
$ '000
Total
$ '000
2017 Profit
2016 Profit
2017 Equity
2016 Equity
(1,873)
(1,212)
(1,873)
(1,212)
(792)
(449)
(792)
(449)
(164)
(104)
(164)
(104)
(2,829)
(1,765)
(2,829)
(1,765)
1,873
1,212
1,873
1,212
792
449
792
449
164
104
164
104
2,829
1,765
2,829
1,765
Forward foreign exchange contracts
Group policy is to enter into forward foreign exchange contracts to manage the risk associated with anticipated purchases denominated
in foreign currency. Anticipated purchases are assessed out to twelve months from the date the contract is entered into, with 40-80% of
the anticipated exposure covered. Basis adjustments are made to the carrying amounts of non-financial items when the anticipated
purchase transaction takes place.
Average exchange rate
Foreign Currency
Notional Value
Fair Value
Outstanding
contracts
Buy USD
Less than 3 months
3 to 6 months
6 to 12 months
Buy Euro
Less than 3 months
3 to 6 months
6 to 12 months
Buy Renminbi
Less than 3 months
3 to 6 months
6 to 12 months
2017
$
0.75
0.75
0.75
0.65
0.69
0.66
5.04
5.27
5.15
2016
$
0.74
0.74
0.74
0.66
0.66
0.66
4.70
4.95
4.97
2017
FC '000
2016
FC '000
4,701
4,749
500
2,151
1,400
200
2,609
3,100
350
4,548
2,019
2,433
1,762
875
1,000
2,768
1,218
2,100
2017
$ '000
6,265
6,343
669
3,297
2,042
305
517
588
68
2016
$ '000
6,134
2,733
3,306
2,655
1,321
1,524
589
246
423
2017
$ '000
(150)
(152)
(16)
(92)
66
(1)
(17)
1
(2)
2016
$ '000
(142)
14
4
(72)
(24)
(39)
(30)
(4)
(8)
(363)
(301)
During 2017 a loss of $363,000 was recognised in profit and loss pertaining to forward exchange contracts (2016: $301,000 loss).
27 Financial instruments (continued)
Interest rate risk management
Interest rate risk arises from borrowings. Group policy is to manage finance costs by using a mix of fixed and variable rate debt after
considering market forecasts.
Interest rate sensitivity analysis to interest rate risk
Financial assets
Cash and cash equivalents - 2017
Cash and cash equivalents - 2016
Financial liabilities
Borrowings - 2017
Borrowings - 2016
2017
2016
Credit risk management
Carrying
amount
$ '000
5,383
6,116
5,000
3,000
- 75 bps
+ 75 bps
Profit
$ '000
Equity
$ '000
Profit
$ '000
Equity
$ '000
(40)
(46)
37
23
(3)
(23)
(40)
(46)
37
23
(3)
(23)
40
46
(37)
(23)
3
23
40
46
(37)
(23)
3
23
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Group
policy is to deal with creditworthy counterparties and obtain sufficient collateral where appropriate as a means of mitigating the risk of
financial loss from default. Reviews of customer creditworthiness are undertaken before payment and delivery terms are offered. The
review assesses credit quality of the customer, taking into account its financial position, past experience, industry reputation and other
factors. Purchase limits are established for each customer, and compliance with credit limits is regularly monitored. Customers that fail
to meet benchmark creditworthiness may transact with the Group only on a prepayment basis. Sales to retail customers are required to
be settled in cash or by using major credit cards, mitigating credit risk.
The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum exposure to credit risk.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk
framework for the management of short, medium and long-term funding. Liquidity risk is managed by maintaining adequate reserves
and banking facilities, by monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and
liabilities. Note 18 lists unused facilities that the Group has at its disposal to reduce liquidity risk. The remaining contractual maturities
of the Group are:
3 months or less: Trade and other payables as disclosed at note 15. Trade and other payables do not attract an interest
charge and are expected to be settled within 60 days of year end.
3 months or less: Bank Loans as disclosed at note 18. Weighted average interest rate 3.50% (2016: 4.18%). Loans are
expected to be settled within three months of year end.
There were no contractual maturities greater than 12 months as at 30 June 2017
Fair value of financial assets and liabilities
The fair value of financial assets and liabilities recognised in the statement of financial position is based on cash flows due from
customers or payable to suppliers. The cash flows have not been discounted to their present value, except as disclosed in the table
below. The carrying values approximate fair value. The fair values of financial instruments are derived from quoted prices (unadjusted)
in active markets for identical assets or liabilities. There are clearly observable quoted prices for all financial instruments held by the
Group. Some of the Group’s financial assets and liabilities are measured at fair value and the end of each reporting period. Information
about how the fair values of these financial liabilities are determined (in particular, the valuation techniques and inputs used).
Fair value as at
2017 2016
Fair value
Hierarchy
Valuation technique and
key inputs
Significant
unobservable
inputs
Relationship of
unobservable
inputs to fair
value
Financial assets
Foreign currency
forward contracts
Financial
liabilities
Foreign currency
forward contracts
Nil
Nil
Level 2
$362,871
$300,779
Level 2
cash
Discounted
flow.
Future cash
flows are
estimated
based
on
rates
forward exchange
and contract forward rates,
discounted to their present
value.
flow.
Discounted
flows are
Future cash
on
estimated
based
forward exchange
rates
and contract forward rates,
discounted to their present
value.
cash
N/A
N/A
N/A
N/A
43
28 Notes to the consolidated statement of cash flows
28.1 Reconciliation of profit from ordinary activities after income tax to net
cash provided by operating activities
Operating profit (loss) after income tax
Items classified as investing activities:
Loss on sale of non-current assets
Non-cash items:
Equity settled share-based payments
Depreciation and amortisation expense - continuing operations
Depreciation and amortisation expense - discontinued operations
Written down value of rental fleet sold
Impairment of plant and equipment
Impairment of intangible assets
Impairment of goodwill
Changes in assets and liabilities during the year:
Increase in inventories
(Increase) decrease in trade and other receivables
(Increase) in other financial assets
Increase (decrease) in trade and other payables
Increase in provisions
(Decrease) increase in deferred taxes receivable
Increase in other financial liabilities
2017
$ '000
2016
$ '000
8,995
(28,004)
52
95
292
7,256
442
6,799
-
-
-
(13,920)
(25,267)
-
16,584
630
3,954
62
317
9,305
9,795
5,813
19,680
3,782
6,529
(4,046)
55,142
(206)
(1,425)
157
(10,258)
301
Net cash provided by operating activities
5,879
66,977
28.2 Non-cash financing and investing activities
The Company received dividends of $615,120 (2016: $14,312,390) from controlled entities by way of an increase in controlled entities
loan accounts.
29 Contingent liabilities
Under the terms of the Deed of Cross Guarantee, the Company has guaranteed the repayment of all current and non-current liabilities
totalling $70,307,744 (2016: $51,295,220) in the event any of the entities which are party to the Deed are wound up.
The Directors are not aware of any circumstances or information that would lead them to believe these liabilities will crystallise and
consequently no provisions are included in the financial statements in respect of these matters.
Certain claims arising out of construction and insurance contracts have been made by or against controlled entities in the ordinary
course of business, some of which involved litigation or adjudication. The Directors do not consider the outcome of any of these claims
will have a material adverse impact on the financial position of the consolidated entity.
442017
28 Notes to the consolidated statement of cash flows
28.1 Reconciliation of profit from ordinary activities after income tax to net
cash provided by operating activities
Operating profit (loss) after income tax
Items classified as investing activities:
Loss on sale of non-current assets
Non-cash items:
Equity settled share-based payments
Depreciation and amortisation expense - continuing operations
Depreciation and amortisation expense - discontinued operations
Written down value of rental fleet sold
Impairment of plant and equipment
Impairment of intangible assets
Impairment of goodwill
Changes in assets and liabilities during the year:
Increase in inventories
(Increase) decrease in trade and other receivables
(Increase) in other financial assets
Increase (decrease) in trade and other payables
Increase in provisions
(Decrease) increase in deferred taxes receivable
Increase in other financial liabilities
28.2 Non-cash financing and investing activities
loan accounts.
29 Contingent liabilities
Net cash provided by operating activities
5,879
66,977
The Company received dividends of $615,120 (2016: $14,312,390) from controlled entities by way of an increase in controlled entities
Certain claims arising out of construction and insurance contracts have been made by or against controlled entities in the ordinary
course of business, some of which involved litigation or adjudication. The Directors do not consider the outcome of any of these claims
will have a material adverse impact on the financial position of the consolidated entity.
8,995
(28,004)
52
95
292
7,256
442
6,799
-
-
-
-
(13,920)
(25,267)
16,584
630
3,954
62
317
9,305
9,795
5,813
19,680
3,782
6,529
(4,046)
55,142
(206)
(1,425)
(10,258)
157
301
2017
$ '000
2016
$ '000
30 Particulars relating to controlled entities
Fleetwood Corporation Limited (Ultimate parent entity)
Controlled entities
Place of
Incorporation
Principal Activities
Interest held (%)
2017
2016
Bocar Pty Ltd (formerly Bendigo Re-locatable
Buildings Pty Ltd)
Australia
BRB Modular Pty Ltd
Camec Pty Ltd
Australia
Australia
Fleetwood Recreational Vehicles Pty Ltd
Australia
Fleetwood Pty Ltd
Australia
Dormant (Bocar products are
traded through Flexiglass
Challenge Pty Ltd)
Accommodation solutions provider
to the resources, education and
affordable housing sectors.
Manufacturer and distributor of
parts and accessories to the
recreational vehicles industry.
Manufacturer of caravans, pop-
tops and campers distributed
through a national dealer network.
Accommodation solutions provider
to the resources, education and
affordable housing sectors.
Fleetwood Finance (WA) Pty Ltd
Australia
Dormant
Flexiglass Challenge Pty Ltd
Australia
Distributor of canopies and trays
for commercial vehicles.
Windsor Caravans Pty Ltd
Australia
Dormant
Flexiglass Challenge Industries (NZ) Limited
New Zealand Dormant
Camec NZ Limited
New Zealand
Manufacturer and distributor of
parts and accessories to the
recreational vehicles industry.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Fleetwood Corporation Limited is the head entity within the tax consolidated group. All companies incorporated in Australia are
members of the tax consolidated group.
31 Related parties
Directors
Under the terms of the Deed of Cross Guarantee, the Company has guaranteed the repayment of all current and non-current liabilities
totalling $70,307,744 (2016: $51,295,220) in the event any of the entities which are party to the Deed are wound up.
The names of each person holding the position of Director of Fleetwood Corporation Limited during the financial year were P Campbell,
B Denison, S Boyle, M Hardy, G Tate, J Bond. Details of directors’ remuneration are set out in the Remuneration Report contained in
the Directors’ Report.
The Directors are not aware of any circumstances or information that would lead them to believe these liabilities will crystallise and
consequently no provisions are included in the financial statements in respect of these matters.
No Director has entered into a material contract with the Company or the consolidated entity during and since the end of the financial
year and there were no material contracts involving directors’ interests existing at year-end.
Directors of the Company or its controlled entities may purchase goods from the consolidated entity. These purchases are on the same
terms and conditions as those entered into by other consolidated entity employees.
Further information on remuneration of key management personnel can be found in the Remuneration Report.
Key management personnel
Aggregate compensation of the key management personnel of the consolidated entity and the Company for the year:
Consolidated
Company
Short-term employee benefits
Post-employment benefits
Other long term benefits
Share-based payments
2017
$
2016
$
2,212,505
145,621
41,157
176,756
2,556,902
183,131
45,337
81,272
2,576,039
2,866,642
Transactions between Fleetwood Corporation and its related parties
During the financial year subsidiaries of the parent company made dividend payments totaling $615,120 (2016:14,312,390) to the
parent entity. Non-current loans totaling $175,674,540 (2016: $178,584,357) repayable to the parent are outstanding at reporting date.
Transactions and balances between the company and its subsidiaries were eliminated in the preparation of the consolidated financial
statements of the Group.
45
32 Parent entity disclosures
32.1 Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Retained earnings
Total equity
32.2 Financial performance
(Loss) profit for the year
Total comprehensive (loss) income
2017
$ '000
2016
$ '000
6,196
183,752
6,317
180,873
189,948
187,190
4,247
581
4,828
572
547
1,119
195,371
(10,251)
195,079
(9,009)
185,120
186,070
(1,242)
(1,242)
9,790
9,790
32.3 Guarantees entered into by the parent entity in relation to debts of
its subsidiaries
Note
Guarantee provided under the deed of cross guarantee
29
70,307
51,295
32.4 Commitments
Operating lease commitments
Within one year
One year or later and no later than five years
Later than five years
203
329
-
532
338
583
-
921
The accounting policies of the parent entity, which have been applied in determining the financial information above are the same as
those applied in the consolidated financial statements.
Under the terms of the Deed of Cross Guarantee, the Company has guaranteed the repayment of all current and non-current liabilities
totaling $70,307,744 (2016: 51,295,220) in the event any of the entities which are party to the Deed are wound up.
The parent entity had no other contingent liabilities as at 30 June 2017 (2016: nil).
462017
32 Parent entity disclosures
32.1 Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Retained earnings
Total equity
32.2 Financial performance
(Loss) profit for the year
Total comprehensive (loss) income
32.4 Commitments
Operating lease commitments
Within one year
Later than five years
One year or later and no later than five years
32.3 Guarantees entered into by the parent entity in relation to debts of
Note
its subsidiaries
Guarantee provided under the deed of cross guarantee
29
70,307
51,295
The accounting policies of the parent entity, which have been applied in determining the financial information above are the same as
those applied in the consolidated financial statements.
Under the terms of the Deed of Cross Guarantee, the Company has guaranteed the repayment of all current and non-current liabilities
totaling $70,307,744 (2016: 51,295,220) in the event any of the entities which are party to the Deed are wound up.
The parent entity had no other contingent liabilities as at 30 June 2017 (2016: nil).
2017
$ '000
2016
$ '000
33 Discontinued operation
On 1 March 2016 the company ceased resource sector rental operations due to the downturn in the mining industry and the resulting
reduction in demand for construction workforce accommodation.
33.1 Financial performance
Revenue
Impairment
Expenses
Loss from discontinued operation before income tax
Attributable income tax benefit
Loss from discontinued operation after income tax
33.2 Cashflow information
Net cash inflows from operating activities
Net cash outflows from investing activities
Net cash inflow from discontinued operations
33.3 Loss per share from discontinued operations
Basic loss per share (cents)
Diluted loss per share (cents)
Revenue relates to the rental of portable buildings to the resource sector.
34 Significant events after the reporting period
2017
$ '000
2016
$ '000
6,479
-
(7,103)
(624)
187
(437)
5,384
-
5,384
12,524
(19,680)
(17,108)
(24,264)
7,279
(16,985)
9,729
(2,596)
7,133
(0.7)
(0.7)
(27.8)
(27.8)
Final Dividend
On 23 August 2017 the Directors declared a fully franked final dividend of 5 cents per share which was paid on 29 September 2017. As
the dividend was not announced until after 30 June 2017 it has not been included as a liability in these financial statements.
6,196
183,752
6,317
180,873
189,948
187,190
4,247
581
4,828
572
547
1,119
195,371
(10,251)
195,079
(9,009)
185,120
186,070
(1,242)
(1,242)
9,790
9,790
203
329
-
532
338
583
-
921
47
Directors’ Report
The Directors of Fleetwood Corporation Limited present their report for the year ended 30 June 2017.
Directors and Officers
The Board is currently comprised of three non-executive Directors and one Managing Director. The names, qualifications, experience,
special responsibilities, current and previous directorships for the last 3 years of the Directors who are in office at the date of this report
are disclosed on page 5 of this Annual Report.
Principal Activities
The principal activities of the entities in the Group during the financial year were:
design, manufacture, and sale of manufactured accommodation;
manufacture of caravans and vehicle parts and accessories;
manufacture and distribution of vehicle parts and accessories; and
operation of accommodation villages.
Operations
A review of operations for the year is contained in the Managing Director’s Review. Results of operations for the year are contained in
the Financial Report.
Financial Position
A summary of the financial position of the Group is disclosed on page 4 of this Annual Report.
State of Affairs
During the financial year there was no significant change in the state of affairs of the consolidated entity.
Significant Events After the Reporting Period
There were no significant events which occurred after the reporting period.
Future Developments
The consolidated entity will continue to pursue increasing both profitability and market share in its major business sectors. Further
information as to likely developments and expected future results are disclosed in the Managing Director’s Review.
Dividends
A fully franked dividend of 5c per share has been declared, the ex-dividend date for the final dividend was 4 September 2017, the
record date for determining entitlements to the final dividend was 5 September 2017, and payment for the final dividend is 29
September 2017.
The final dividend in respect of ordinary shares for the year ended 30 June 2017 has not been recognised in the financial statements
because the dividend was not declared, determined or publicly recommended at 30 June 2017.
Share Options
Details of all share based payment arrangements in existence at 30 June 2017 and unissued shares the subject of options at the date of
this Annual Report and shares issued pursuant to the exercise of options during or since the end of the year are disclosed in note 21 to
the financial statements. No options have been issued subsequent to year end. 472,000 options have been forfeited subsequent to
year end. Details of unissued shares the subject of options as at the date of this report are outlined below.
Employee Options
Issue date
Total unissued shares under option
Exercise price ($)
Expiry date
Executive Options
Issue date
Total unissued shares under option
Exercise price ($)
Expiry date
29/08/2012
243,240
9.39
29/08/2017
30/08/2013
332,000
2.56
30/08/2018
20/02/2013
65,000
10.57
20/02/2018
30/08/2013
140,000
2.88
30/08/2018
The Employee and Executive Option Plans have been replaced by long term incentive share plans, approved by shareholders at the
2014 annual general meeting. Since that time, no options have been issued to employees or executives pursuant to those plans. With
respect to the above options no voting or dividend rights attach to the options. Details of options previously granted to Directors,
executives and key management personnel are contained in note 21 to the financial statements and in the Remuneration Report.
482017 Directors’ Report
Directors and Officers
The Directors of Fleetwood Corporation Limited present their report for the year ended 30 June 2017.
The Board is currently comprised of three non-executive Directors and one Managing Director. The names, qualifications, experience,
special responsibilities, current and previous directorships for the last 3 years of the Directors who are in office at the date of this report
A review of operations for the year is contained in the Managing Director’s Review. Results of operations for the year are contained in
are disclosed on page 5 of this Annual Report.
Principal Activities
The principal activities of the entities in the Group during the financial year were:
design, manufacture, and sale of manufactured accommodation;
manufacture of caravans and vehicle parts and accessories;
manufacture and distribution of vehicle parts and accessories; and
operation of accommodation villages.
Operations
the Financial Report.
Financial Position
State of Affairs
A summary of the financial position of the Group is disclosed on page 4 of this Annual Report.
During the financial year there was no significant change in the state of affairs of the consolidated entity.
Significant Events After the Reporting Period
There were no significant events which occurred after the reporting period.
Future Developments
A fully franked dividend of 5c per share has been declared, the ex-dividend date for the final dividend was 4 September 2017, the
record date for determining entitlements to the final dividend was 5 September 2017, and payment for the final dividend is 29
The final dividend in respect of ordinary shares for the year ended 30 June 2017 has not been recognised in the financial statements
because the dividend was not declared, determined or publicly recommended at 30 June 2017.
Details of all share based payment arrangements in existence at 30 June 2017 and unissued shares the subject of options at the date of
this Annual Report and shares issued pursuant to the exercise of options during or since the end of the year are disclosed in note 21 to
the financial statements. No options have been issued subsequent to year end. 472,000 options have been forfeited subsequent to
year end. Details of unissued shares the subject of options as at the date of this report are outlined below.
Dividends
September 2017.
Share Options
Employee Options
Issue date
Exercise price ($)
Expiry date
Executive Options
Issue date
Exercise price ($)
Expiry date
Total unissued shares under option
Total unissued shares under option
29/08/2012
30/08/2013
243,240
9.39
332,000
2.56
29/08/2017
30/08/2018
20/02/2013
30/08/2013
65,000
10.57
140,000
2.88
20/02/2018
30/08/2018
The Employee and Executive Option Plans have been replaced by long term incentive share plans, approved by shareholders at the
2014 annual general meeting. Since that time, no options have been issued to employees or executives pursuant to those plans. With
respect to the above options no voting or dividend rights attach to the options. Details of options previously granted to Directors,
executives and key management personnel are contained in note 21 to the financial statements and in the Remuneration Report.
Indemnification of Directors, Officers and Auditors
The Company has executed agreements with current and former Directors and officers in respect of indemnity, access to documents
and insurance.
Subject to the Corporations Act (Cth) 2001 and Fleetwood’s Constitution, Directors and officers are indemnified against all liabilities to
another person (other than the Company or a related body corporate) that may arise from their position as Director or officer of the
Company, except where the liability arises out of conduct involving a lack of good faith.
The Company provides D&O insurance cover to current and former directors and officers. The contract of insurance prohibits
disclosure of the nature of the liability, however insurance premiums paid during the financial year were $50,808 (2016: $47,930).
The access deed provides, among other things, current and former directors and officers with access to certain Company information,
during their tenure and for a period of seven years after they cease to be an officer or director.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or
agreed to indemnify an auditor of the Company or any related body corporate against liability incurred as an auditor.
Directors’, Audit Committee and Remuneration Committee Meetings
During the financial year, twelve board meetings, three audit committee meetings and two remuneration committee meetings were held.
The number of Board, Audit Committee and Remuneration Committee meetings attended by each current and former Director of the
Company during the financial year are as follows:
Board
Audit Committee
Remuneration Committee
Eligible
to attend
Attended
Eligible
to attend
Attended
Eligible
to attend
Attended
Phillip Campbell (Appointed 12/08/2016)
Brad Denison
Stephen Boyle (Resigned 31/08/2017)
Michael Hardy (Resigned 30/06/2017)
Greg Tate (Resigned 30/06/2017)
John Bond (Resigned 24/08/16)
8
12
2
12
12
5
8
12
2
12
12
5
2
3*
1
3
3
1
2
3*
1
3
3
1
1
2*
0
2
2
0
1
2*
0
2
2
0
The consolidated entity will continue to pursue increasing both profitability and market share in its major business sectors. Further
information as to likely developments and expected future results are disclosed in the Managing Director’s Review.
*By invitation of the Audit Committee and Remuneration Committee
Directors’ Shareholdings
The relevant interest of each Director in Company shares and options at the date of this report, as notified by the Directors to the ASX in
accordance with s205G(1) of the Corporations Act (Cth) 2001 are as follows:
Phillip Campbell (Appointed 12/08/2016)
Brad Denison
Jeff Dowling (Appointed 01/07/2017)
Adrienne Parker (Appointed 23/08/2017)
Stephen Boyle (Resigned 31/08/2017)
Michael Hardy (Resigned 30/06/2017)
Greg Tate (Resigned 30/06/2017)
John Bond (Resigned 24/08/16)
Remuneration Report (audited)
Number of Shares
units Number of options
Number of share
15,000
227,364
25,000
-
-
16,975
6,568,271
20,000
-
570,000
-
150,000
-
-
-
-
-
-
-
-
-
-
-
-
The Remuneration Committee is responsible for recommending the remuneration of non-executive Directors to the Board, and for
determining remuneration arrangements of executives and key management personnel.
During the financial year the members of the Remuneration Committee reviewed:
conditions of service and remuneration of the Directors, executives, and key management personnel;
remuneration policies of the Group;
proposals for new issues under, or changes to, the Company’s long and short term incentive plans;
succession plans for senior management; and
other related matters.
In accordance with the Remuneration Committee charter non-executive directors receive fees and other statutory benefits within
aggregate limits approved by shareholders, and are not entitled to participate in the Company’s short or long term incentive plans.
In respect of remuneration arrangements for executives and key management personnel the Remuneration Committee seeks to ensure
that the remuneration arrangements motivate the recipient to pursue the short and long term performance objectives of the Company. It
does this by ensuring that there is a clear relationship between Company performance and remuneration by striking an appropriate
balance between fixed and variable (‘at risk’) remuneration. In undertaking this role the Remuneration Committee has authority to seek
information as required from Company employees and may take such independent legal, financial, remuneration or other advice it
considers necessary.
The proportion of fixed and variable remuneration is based on available market data for comparable roles, the capacity of the individual
to influence the overall outcome of Company operations and return to shareholders. When considering the fixed component of
Remuneration Report (continued)
49
remuneration, the Remuneration Committee will take into account the person’s responsibilities, qualifications and experience. When
Remuneration Report (continued)
considering the variable component of remuneration, the Remuneration Committee considers the capacity of the individual to affect
profit earned by the Company and the individual’s performance against key responsibilities, key competencies and period specific
remuneration, the Remuneration Committee will take into account the person’s responsibilities, qualifications and experience. When
objectives. The variable remuneration includes short-term incentives in the form of cash payments and long-term incentives in the form
considering the variable component of remuneration, the Remuneration Committee considers the capacity of the individual to affect
of shares, which are subject to performance hurdles and vesting provisions.1
profit earned by the Company and the individual’s performance against key responsibilities, key competencies and period specific
objectives. The variable remuneration includes short-term incentives in the form of cash payments and long-term incentives in the form
Short Term Incentive Plan
of shares, which are subject to performance hurdles and vesting provisions.1
Short-term incentives received by the Managing Director, executives and key management personnel are determined in accordance
Short Term Incentive Plan
with the provisions of the Fleetwood Short Term Incentive Plan (STIP). Fleetwood’s STIP was revised in the 2015 financial year such
that it only rewards exceptional performance. The STIP is designed to put a meaningful proportion of the participant’s remuneration at
Short-term incentives received by the Managing Director, executives and key management personnel are determined in accordance
risk, to be delivered upon the achievement of targets linked to the Company’s annual business objectives.
with the provisions of the Fleetwood Short Term Incentive Plan (STIP). Fleetwood’s STIP was revised in the 2015 financial year such
that it only rewards exceptional performance. The STIP is designed to put a meaningful proportion of the participant’s remuneration at
The STIP is linked to the Company’s annual business objectives through the incorporation of company specific qualifying gates. A
risk, to be delivered upon the achievement of targets linked to the Company’s annual business objectives.
participant will only qualify for a STIP payment if the qualifying gates are satisfied. Qualifying gates are met if, the Company or
The STIP is linked to the Company’s annual business objectives through the incorporation of company specific qualifying gates. A
operating company the participant is employed by or manages (i) passes an independent internal safety audit, achieving at least at a
90% rating; and (ii) achieves at least 90% of budget Earnings Before Interest and Tax (EBIT) for the financial year2. Once the gates
participant will only qualify for a STIP payment if the qualifying gates are satisfied. Qualifying gates are met if, the Company or
have been met a review of the performance measures is undertaken to determine if exceptional performance has been demonstrated.
operating company the participant is employed by or manages (i) passes an independent internal safety audit, achieving at least at a
90% rating; and (ii) achieves at least 90% of budget Earnings Before Interest and Tax (EBIT) for the financial year2. Once the gates
The performance measures of the STIP comprise a combination of individual and company specific performance targets. The weighting
have been met a review of the performance measures is undertaken to determine if exceptional performance has been demonstrated.
is 50% non-financial and 50% financial. In setting the performance measures for the STIP, the Remuneration Committee is conscious
to ensure that all targets are measurable and provide a challenging but meaningful incentive to participants.
The performance measures of the STIP comprise a combination of individual and company specific performance targets. The weighting
is 50% non-financial and 50% financial. In setting the performance measures for the STIP, the Remuneration Committee is conscious
Non-financial metrics are based on performance against specific individual key performance targets. Individual performance targets are
to ensure that all targets are measurable and provide a challenging but meaningful incentive to participants.
derived from position descriptions, key responsibilities, key competencies and period specific objectives which are in turn aligned with
key business strategies identified annually during the business planning process. Financial performance targets are derived from
Non-financial metrics are based on performance against specific individual key performance targets. Individual performance targets are
budgeted or forecast EBIT above the qualifying gate which is considered an appropriate measure of the Company’s profitability.
derived from position descriptions, key responsibilities, key competencies and period specific objectives which are in turn aligned with
key business strategies identified annually during the business planning process. Financial performance targets are derived from
Depending on the participant and their role within the Group, some targets may be restricted to the operating company in which the
budgeted or forecast EBIT above the qualifying gate which is considered an appropriate measure of the Company’s profitability.
participant is employed, or expanded to include the Group as a whole. Financial targets are expressed as a range over which
performance will be measured. The standard range is 100% to 125% of the applicable budget. The maximum amount a participant can
Depending on the participant and their role within the Group, some targets may be restricted to the operating company in which the
earn through the STIP is capped at a percentage of the participant’s Annual Fixed Remuneration (AFR). STIP percentage caps as
participant is employed, or expanded to include the Group as a whole. Financial targets are expressed as a range over which
determined by the Remuneration Committee applicable to the Managing Director, executives and key management personnel are noted
performance will be measured. The standard range is 100% to 125% of the applicable budget. The maximum amount a participant can
earn through the STIP is capped at a percentage of the participant’s Annual Fixed Remuneration (AFR). STIP percentage caps as
below.
determined by the Remuneration Committee applicable to the Managing Director, executives and key management personnel are noted
below.
Maximum STIP as
% of AFR
Maximum STIP as
% of AFR
50%
Brad Denison
40%
40%
50%
25%
40%
40%
25%
40%
40%
40%
40%
40%
40%
Andrew Wackett
Brad Denison
Yanya O'Hara
Andrew Wackett
Giles Everest
Yanya O'Hara
Jarrod Waring
Giles Everest
Peter Naylor
Jarrod Waring
Manuel Larre
Peter Naylor
In order for a payment under the STIP to be made, the qualifying gate must be satisfied and the participant must: meet the minimum
Manuel Larre
financial and non-financial performance measures, be an employee at the time the payment is to be made, and not have tendered their
resignation at the time the payment is made.
In order for a payment under the STIP to be made, the qualifying gate must be satisfied and the participant must: meet the minimum
financial and non-financial performance measures, be an employee at the time the payment is to be made, and not have tendered their
The Remuneration Committee is of the opinion that the STIP appropriately aligns executive remuneration with shareholder wealth
resignation at the time the payment is made.
generation.
The Remuneration Committee is of the opinion that the STIP appropriately aligns executive remuneration with shareholder wealth
Executive Share Plan
generation.
Long-term incentives in the form of shares received by the Managing Director, executives and key management personnel are
Executive Share Plan
determined in accordance with the provisions of the Executive Long Term Incentive plan (LTIP), which was approved by shareholders at
the 2014 annual general meeting. The objective of this plan is to retain and reward the Managing Director, executives and key
Long-term incentives in the form of shares received by the Managing Director, executives and key management personnel are
management personnel and to align their long term interests with those of shareholders.
determined in accordance with the provisions of the Executive Long Term Incentive plan (LTIP), which was approved by shareholders at
the 2014 annual general meeting. The objective of this plan is to retain and reward the Managing Director, executives and key
Under the plan, eligible directors, executives and key management personnel are invited to participate in a grant of shares or options
management personnel and to align their long term interests with those of shareholders.
through a trust established for the LTIP. The Company provides participants with an interest free, non-recourse loan for an amount
equivalent to the price of the shares or options issued, for the sole purpose of acquiring units in the trust. The loans are repayable
Under the plan, eligible directors, executives and key management personnel are invited to participate in a grant of shares or options
upon the eventual sale or transfer of the shares from the trust to the participant. The share units are restricted and subject to a risk of
through a trust established for the LTIP. The Company provides participants with an interest free, non-recourse loan for an amount
forfeiture until the end of the vesting period.
equivalent to the price of the shares or options issued, for the sole purpose of acquiring units in the trust. The loans are repayable
upon the eventual sale or transfer of the shares from the trust to the participant. The share units are restricted and subject to a risk of
The number of shares granted is determined by the Board with reference to the participant’s position in the company, the Group’s
forfeiture until the end of the vesting period.
financial performance and shareholder wealth generation. The price of the shares issued is calculated using the Volume Weighted
The number of shares granted is determined by the Board with reference to the participant’s position in the company, the Group’s
Average Price (VWAP) over five trading days following the annual general meeting.
financial performance and shareholder wealth generation. The price of the shares issued is calculated using the Volume Weighted
Remuneration Report (continued)
Average Price (VWAP) over five trading days following the annual general meeting.
Remuneration Report (continued)
1 As the majority of the members of the current Remuneration Committee were appointed after year end, the committee undertook a
benchmarking exercise of non-executive director remuneration, as well as executive and key management personnel remuneration.
1 As the majority of the members of the current Remuneration Committee were appointed after year end, the committee undertook a
The results of the benchmarking exercise were then used to review current remuneration arrangements for non-executive directors,
executives, and key management personnel, and to provide guidance to the committee for determining remuneration arrangements for
benchmarking exercise of non-executive director remuneration, as well as executive and key management personnel remuneration.
non-executive directors, executives and key management personnel for FY 2018.
The results of the benchmarking exercise were then used to review current remuneration arrangements for non-executive directors,
executives, and key management personnel, and to provide guidance to the committee for determining remuneration arrangements for
non-executive directors, executives and key management personnel for FY 2018.
2 For FY 2018 the Remuneration Committee has revised the second qualifying gate of the STIP to now require the Company or the
operating company the participant is employed by to achieve 100% of Budget Earnings Before Interest and Tax.
2 For FY 2018 the Remuneration Committee has revised the second qualifying gate of the STIP to now require the Company or the
operating company the participant is employed by to achieve 100% of Budget Earnings Before Interest and Tax.
502017
remuneration, the Remuneration Committee will take into account the person’s responsibilities, qualifications and experience. When
considering the variable component of remuneration, the Remuneration Committee considers the capacity of the individual to affect
profit earned by the Company and the individual’s performance against key responsibilities, key competencies and period specific
remuneration, the Remuneration Committee will take into account the person’s responsibilities, qualifications and experience. When
objectives. The variable remuneration includes short-term incentives in the form of cash payments and long-term incentives in the form
considering the variable component of remuneration, the Remuneration Committee considers the capacity of the individual to affect
of shares, which are subject to performance hurdles and vesting provisions.1
profit earned by the Company and the individual’s performance against key responsibilities, key competencies and period specific
objectives. The variable remuneration includes short-term incentives in the form of cash payments and long-term incentives in the form
Short Term Incentive Plan
of shares, which are subject to performance hurdles and vesting provisions.1
Short Term Incentive Plan
Short-term incentives received by the Managing Director, executives and key management personnel are determined in accordance
with the provisions of the Fleetwood Short Term Incentive Plan (STIP). Fleetwood’s STIP was revised in the 2015 financial year such
that it only rewards exceptional performance. The STIP is designed to put a meaningful proportion of the participant’s remuneration at
Short-term incentives received by the Managing Director, executives and key management personnel are determined in accordance
risk, to be delivered upon the achievement of targets linked to the Company’s annual business objectives.
with the provisions of the Fleetwood Short Term Incentive Plan (STIP). Fleetwood’s STIP was revised in the 2015 financial year such
that it only rewards exceptional performance. The STIP is designed to put a meaningful proportion of the participant’s remuneration at
The STIP is linked to the Company’s annual business objectives through the incorporation of company specific qualifying gates. A
risk, to be delivered upon the achievement of targets linked to the Company’s annual business objectives.
participant will only qualify for a STIP payment if the qualifying gates are satisfied. Qualifying gates are met if, the Company or
The STIP is linked to the Company’s annual business objectives through the incorporation of company specific qualifying gates. A
operating company the participant is employed by or manages (i) passes an independent internal safety audit, achieving at least at a
90% rating; and (ii) achieves at least 90% of budget Earnings Before Interest and Tax (EBIT) for the financial year2. Once the gates
participant will only qualify for a STIP payment if the qualifying gates are satisfied. Qualifying gates are met if, the Company or
have been met a review of the performance measures is undertaken to determine if exceptional performance has been demonstrated.
operating company the participant is employed by or manages (i) passes an independent internal safety audit, achieving at least at a
90% rating; and (ii) achieves at least 90% of budget Earnings Before Interest and Tax (EBIT) for the financial year2. Once the gates
The performance measures of the STIP comprise a combination of individual and company specific performance targets. The weighting
have been met a review of the performance measures is undertaken to determine if exceptional performance has been demonstrated.
is 50% non-financial and 50% financial. In setting the performance measures for the STIP, the Remuneration Committee is conscious
to ensure that all targets are measurable and provide a challenging but meaningful incentive to participants.
The performance measures of the STIP comprise a combination of individual and company specific performance targets. The weighting
is 50% non-financial and 50% financial. In setting the performance measures for the STIP, the Remuneration Committee is conscious
Non-financial metrics are based on performance against specific individual key performance targets. Individual performance targets are
to ensure that all targets are measurable and provide a challenging but meaningful incentive to participants.
derived from position descriptions, key responsibilities, key competencies and period specific objectives which are in turn aligned with
key business strategies identified annually during the business planning process. Financial performance targets are derived from
Non-financial metrics are based on performance against specific individual key performance targets. Individual performance targets are
budgeted or forecast EBIT above the qualifying gate which is considered an appropriate measure of the Company’s profitability.
derived from position descriptions, key responsibilities, key competencies and period specific objectives which are in turn aligned with
key business strategies identified annually during the business planning process. Financial performance targets are derived from
Depending on the participant and their role within the Group, some targets may be restricted to the operating company in which the
budgeted or forecast EBIT above the qualifying gate which is considered an appropriate measure of the Company’s profitability.
participant is employed, or expanded to include the Group as a whole. Financial targets are expressed as a range over which
performance will be measured. The standard range is 100% to 125% of the applicable budget. The maximum amount a participant can
Depending on the participant and their role within the Group, some targets may be restricted to the operating company in which the
earn through the STIP is capped at a percentage of the participant’s Annual Fixed Remuneration (AFR). STIP percentage caps as
participant is employed, or expanded to include the Group as a whole. Financial targets are expressed as a range over which
determined by the Remuneration Committee applicable to the Managing Director, executives and key management personnel are noted
performance will be measured. The standard range is 100% to 125% of the applicable budget. The maximum amount a participant can
below.
earn through the STIP is capped at a percentage of the participant’s Annual Fixed Remuneration (AFR). STIP percentage caps as
determined by the Remuneration Committee applicable to the Managing Director, executives and key management personnel are noted
below.
Brad Denison
Andrew Wackett
Brad Denison
Yanya O'Hara
Andrew Wackett
Giles Everest
Yanya O'Hara
Jarrod Waring
Giles Everest
Peter Naylor
Jarrod Waring
Manuel Larre
Peter Naylor
Manuel Larre
Maximum STIP as
% of AFR
Maximum STIP as
% of AFR
50%
40%
50%
25%
40%
40%
25%
40%
40%
40%
40%
40%
40%
40%
In order for a payment under the STIP to be made, the qualifying gate must be satisfied and the participant must: meet the minimum
financial and non-financial performance measures, be an employee at the time the payment is to be made, and not have tendered their
resignation at the time the payment is made.
In order for a payment under the STIP to be made, the qualifying gate must be satisfied and the participant must: meet the minimum
financial and non-financial performance measures, be an employee at the time the payment is to be made, and not have tendered their
The Remuneration Committee is of the opinion that the STIP appropriately aligns executive remuneration with shareholder wealth
resignation at the time the payment is made.
The Remuneration Committee is of the opinion that the STIP appropriately aligns executive remuneration with shareholder wealth
generation.
Executive Share Plan
generation.
Executive Share Plan
Long-term incentives in the form of shares received by the Managing Director, executives and key management personnel are
determined in accordance with the provisions of the Executive Long Term Incentive plan (LTIP), which was approved by shareholders at
the 2014 annual general meeting. The objective of this plan is to retain and reward the Managing Director, executives and key
Long-term incentives in the form of shares received by the Managing Director, executives and key management personnel are
management personnel and to align their long term interests with those of shareholders.
determined in accordance with the provisions of the Executive Long Term Incentive plan (LTIP), which was approved by shareholders at
the 2014 annual general meeting. The objective of this plan is to retain and reward the Managing Director, executives and key
Under the plan, eligible directors, executives and key management personnel are invited to participate in a grant of shares or options
management personnel and to align their long term interests with those of shareholders.
through a trust established for the LTIP. The Company provides participants with an interest free, non-recourse loan for an amount
equivalent to the price of the shares or options issued, for the sole purpose of acquiring units in the trust. The loans are repayable
Under the plan, eligible directors, executives and key management personnel are invited to participate in a grant of shares or options
upon the eventual sale or transfer of the shares from the trust to the participant. The share units are restricted and subject to a risk of
through a trust established for the LTIP. The Company provides participants with an interest free, non-recourse loan for an amount
forfeiture until the end of the vesting period.
equivalent to the price of the shares or options issued, for the sole purpose of acquiring units in the trust. The loans are repayable
forfeiture until the end of the vesting period.
upon the eventual sale or transfer of the shares from the trust to the participant. The share units are restricted and subject to a risk of
The number of shares granted is determined by the Board with reference to the participant’s position in the company, the Group’s
financial performance and shareholder wealth generation. The price of the shares issued is calculated using the Volume Weighted
Average Price (VWAP) over five trading days following the annual general meeting.
The number of shares granted is determined by the Board with reference to the participant’s position in the company, the Group’s
financial performance and shareholder wealth generation. The price of the shares issued is calculated using the Volume Weighted
Remuneration Report (continued)
Average Price (VWAP) over five trading days following the annual general meeting.
Remuneration Report (continued)
1 As the majority of the members of the current Remuneration Committee were appointed after year end, the committee undertook a
benchmarking exercise of non-executive director remuneration, as well as executive and key management personnel remuneration.
The results of the benchmarking exercise were then used to review current remuneration arrangements for non-executive directors,
1 As the majority of the members of the current Remuneration Committee were appointed after year end, the committee undertook a
executives, and key management personnel, and to provide guidance to the committee for determining remuneration arrangements for
benchmarking exercise of non-executive director remuneration, as well as executive and key management personnel remuneration.
non-executive directors, executives and key management personnel for FY 2018.
The results of the benchmarking exercise were then used to review current remuneration arrangements for non-executive directors,
executives, and key management personnel, and to provide guidance to the committee for determining remuneration arrangements for
non-executive directors, executives and key management personnel for FY 2018.
2 For FY 2018 the Remuneration Committee has revised the second qualifying gate of the STIP to now require the Company or the
operating company the participant is employed by to achieve 100% of Budget Earnings Before Interest and Tax.
2 For FY 2018 the Remuneration Committee has revised the second qualifying gate of the STIP to now require the Company or the
operating company the participant is employed by to achieve 100% of Budget Earnings Before Interest and Tax.
Remuneration Report (continued)
The LTIP contains a gateway level of minimum performance below which no benefit accrues. The performance gateway is met where
the Company’s total shareholder return from grant to vesting date, equals or exceeds 15% p.a. and is equal to or greater than the ASX
All Ordinaries Index. The Remuneration Committee considers that the use of this index provides an external benchmark that enables a
comparison of the Company’s TSR performance to that of a broad group of diverse companies. Such a comparison reduces sensitivity
to the performance of a particular competitor or the influence of cyclical industry specific factors.
Assuming the participant continues to be employed by Fleetwood and the performance hurdles are reached, the vesting dates for the
shares are as follows: for one third of the shares, the date that is at least a minimum of 1 year after being granted; for two thirds of the
shares, the date that is at least a minimum of 2 years after being granted; and for the balance of the shares, the date that is at least a
minimum of 3 years after being granted.
In the event that a performance hurdle is not reached, or the value of the shares is less than the outstanding balance of the loan, or the
participant ceases to be an employee for reasons other than death, illness and injury, the participant will surrender and forfeit the units
in the trust to the Company in full settlement of the loan balance. The share units expire 5 years from the grant date. Until the shares
vest, voting and dividend rights remain with the trustee.
Up until the implementation of the LTIP, eligible directors, executives and key management persons participated in the Executive Option
Plan. The options granted pursuant to that plan are noted in this Report, and that plan will remain in effect until all granted options have
been exercised, fortified or have expired.
Executive Option Plan
Long-term incentives in the form of options received by eligible directors, senior executives and key management personnel were
determined in accordance with the provisions of the old Executive Option Plan. The objective of that plan was to retain and reward
eligible directors, executives and key management personnel and to align their long term interests with those of shareholders.
Invitation to participate in the plan was at the discretion of the Board, however participants generally needed to be employed in an
executive or key management position for a minimum period of two years before such invitation was extended.
Under the plan, participants were granted options to purchase ordinary shares in Fleetwood. The number of options granted was
determined by the Board with reference to the participant’s individual performance over the immediately preceding financial year, the
Group’s financial performance and shareholder wealth generation. No amounts were payable for the options, and each option entitles
the holder to subscribe for one ordinary share upon exercise. Assuming the participant continues to be employed by Fleetwood and the
performance hurdles are reached, for options issued after 1 July 2012 100% of the issued options vest on the third anniversary of the
grant date, and for options issued prior to 1 July 2012, one third of the options vest after 30 June subsequent to the date of issue, a
further one third of the options vest over each of the next 2 years. The exercise price of the options was calculated using the Volume
Weighted Average Price (VWAP) of the shares over the five days prior to the issue date. The maximum discount that could be applied
to the VWAP was 10%.
The options are only exercisable if the company’s total shareholder return equals or exceeds 15% p.a. compounded from the inception
of the plan and is equal to or greater than the ASX 300 All Industrials Accumulation Index. In the event that a performance hurdle is not
reached, the options do not vest.
If the participant ceases to be an employee for reasons other than death, illness, injury, the attainment of the normal age of retirement
or for other reasons approved by the Board, the options lapse and terminate. The options expire 5 years from the date of issue. There
are no voting or dividend rights attaching to the options.
Movements in shareholder wealth for the five years to 30 June 2017 (from continuing operations):
Share price at start of year ($)
Share price at end of year ($)
Dividend per share (cents)
Earnings (loss) per share (cents)
Diluted earnings (loss) per share (cents)
$ Million
Revenue
Net profit (loss) before tax
Net profit (loss) after tax
2013
11.74
3.60
30.0
20.8
20.7
332.9
23.2
16.6
2014
3.60
2.33
4.0
0.1
0.1
366.3
3.4
0.6
2015
2.33
1.37
-
0.3
0.3
302.0
0.9
0.2
2016
1.37
1.91
-
(45.9)
(45.8)
284.3
(13.4)
(11.0)
2017
1.91
2.36
5.0
14.7
14.7
330.1
13.7
9.4
51
Remuneration Report (continued)
Short-term employee
benefits
Post
Share
Employment Other long
Based
Share
Based
Salary &
fees
$
Bonus
$
Non-
monetary
$
Superan-
nuation
$
Term Payment
Payment
Benefits Options Share units
$
$
$
Performance
based
Total
$
remuneration
%
Key management
personnel
Directors*
Phillip Campbell
(Appointed 12/8/2016)
2017
Brad Denison1
Managing Director
2017
2016
Stephen Boyle
(Resigned 31/08/2017)
2017
Michael Hardy
(Resigned 30/6/2017)
2017
2016
Greg Tate
(Resigned 30/6/2017)
2017
2016
John Bond
(Resigned 24/08/16)
2017
2016
Peter Gunzburg
(Resigned 27/11/15)
2016
2017 Company and
2016 Consolidated
99,999
-
-
-
-
-
-
99,999
-
507,842
541,970
35,000
-
15,473
10,153
30,000
30,000
3,636
25,562
1,953
16,175
99,187
56,432
693,092
680,293
19.6
10.7
17,500
75,875
85,000
70,000
70,000
10,548
70,000
35,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
781,764
801,970
35,000
-
15,473
10,153
30,000
30,000
3,636
25,562
1,953
16,175
99,187
56,432
17,500
75,875
85,000
70,000
70,000
10,548
70,000
35,000
967,014
940,293
-
-
-
-
-
-
-
-
14.1
7.7
1The Remuneration Committee resolved to grant Mr. Denison a $35,000 bonus for FY 2016 for satisfaction of a specific KPI relating to
the Osprey transaction. This amount was paid in FY 2017.
522017
Short-term employee
Post
Share
benefits
Employment Other long
Based
Share
Based
Key management
personnel
Salary &
Non-
fees
Bonus
monetary
Superan-
nuation
Term Payment
Payment
Benefits Options Share units
Total
remuneration
$
$
$
$
Performance
based
507,842
35,000
541,970
15,473
10,153
30,000
30,000
3,636
25,562
1,953
16,175
99,187
56,432
693,092
680,293
19.6
10.7
Directors*
Phillip Campbell
(Appointed 12/8/2016)
Brad Denison1
Managing Director
Stephen Boyle
(Resigned 31/08/2017)
Michael Hardy
(Resigned 30/6/2017)
Greg Tate
(Resigned 30/6/2017)
John Bond
(Resigned 24/08/16)
Peter Gunzburg
(Resigned 27/11/15)
2017
2017
2016
2017
2017
2016
2017
2016
2017
2016
2016
$
-
-
-
-
-
-
-
-
-
99,999
17,500
75,875
85,000
70,000
70,000
10,548
70,000
35,000
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
99,999
-
-
-
-
-
-
-
-
17,500
75,875
85,000
70,000
70,000
10,548
70,000
35,000
967,014
940,293
2017 Company and
2016 Consolidated
781,764
35,000
801,970
15,473
10,153
30,000
30,000
3,636
25,562
1,953
16,175
99,187
56,432
14.1
7.7
1The Remuneration Committee resolved to grant Mr. Denison a $35,000 bonus for FY 2016 for satisfaction of a specific KPI relating to
the Osprey transaction. This amount was paid in FY 2017.
%
-
-
-
-
-
-
-
-
-
Remuneration Report (continued)
Remuneration Report (continued)
Short-term employee
benefits
Post
Share
Employment Other long
Based
Share
Based
Salary &
fees
$
Bonus
$
Non-
monetary
$
Superan-
nuation
$
Term Payment
Payment
Benefits Options Share units
$
$
$
Performance
based
Total
$
remuneration
%
Key management
personnel
Executives
Andrew Wackett2
Chief Financial Officer
(Appointed 12/06/17)
2017
Yanya O'Hara
Company Secretary
2017
2016
17,022
175,947
165,505
-
-
-
285,950
248,948
Jarrod Waring
Executive GM, BRB Modular Pty Ltd
2017
2016
Giles Everest1
Executive GM, Fleetwood Pty Ltd
(Appointed 01/12/14)
2017
2016
Peter Naylor1
Executive GM, Fleetwood RV Pty Ltd
2017
2016
282,402
272,680
295,490
282,706
Manuel Larre
Executive GM, Camec & Flexiglass
2017
2016
283,455
275,272
Steve Carroll
GM, International Business
(Resigned 09/10/15)
2016
Bradley Van Hemert
GM, International Procurement
(Redundant 11/03/16)
2016
60,502
414,165
-
25,000
15,000
-
25,000
-
-
-
-
-
2017 Company and
2016 Consolidated
1,340,267
1,719,778
40,000
25,000
1,502
15
-
2,608
21,147
12.3
15,930
15,154
5,507
9,039
19,615
19,308
15,966
6,936
25,909
25,250
3,395
757
26,756
25,124
1,353
262
9
43
5
21
-
-
-
-
11,827
5,316
209,220
195,057
16,468
9,200
338,005
309,412
14,870
6,850
341,576
305,537
12,580
2,865
361,179
310,957
25,909
36,328
11,285
12,249
781
6,003
16,468
9,200
337,898
339,052
5.7
2.7
4.9
11.1
8.7
2.2
10.4
0.9
5.1
4.5
5,748
(9,468)
(8,087)
(4,903)
43,792
(29.7)
26,220
115,621
153,131
-
(12,940)
(4,903)
422,542
37,521
19,775
795
(14,960)
74,821
23,625
1,609,025
1,926,350
(4.2)
7.2
1.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Included in salary & fees are amounts of annual leave accrued during the reporting period. There are no post-employment benefits
other than superannuation. Executive contracts do not provide for any termination payments, other than the payment of accrued leave
entitlements. Other long term benefits comprise long service leave entitlements accrued to the executive during the reporting period.
The amount included in remuneration as share-based payments are not related to or indicative of the benefits (if any) that individual
executives may ultimately realise should the equity instruments vest.
1The Remuneration Committee resolved to grant Mr Everest a $15,000 bonus for FY 2016 for satisfaction of a specific KPI relating to
the Fleetwood West business restructure following a downturn in the resources sector, and a $25,000 bonus to Mr. Naylor for FY 2016
for satisfaction of a specific KPI relating to expanding the Coromal and Windsor product range and Dealer Network. These amounts
were paid in FY 2017.
2Andrew Wackett was appointed to the position of CFO of the Company on 12 June 2017.
Remuneration Report (continued)
Share based payment arrangements in existence at the reporting date: Options
53
Remuneration Report (continued)
17,022
175,947
165,505
Key management
personnel
Executives
Andrew Wackett2
Chief Financial Officer
(Appointed 12/06/17)
Yanya O'Hara
Company Secretary
2017
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2016
2016
Jarrod Waring
Executive GM, BRB Modular Pty Ltd
Giles Everest1
Executive GM, Fleetwood Pty Ltd
(Appointed 01/12/14)
Peter Naylor1
Executive GM, Fleetwood RV Pty Ltd
Manuel Larre
Executive GM, Camec & Flexiglass
Steve Carroll
GM, International Business
(Resigned 09/10/15)
Bradley Van Hemert
GM, International Procurement
(Redundant 11/03/16)
-
-
-
-
-
-
-
-
-
-
Short-term employee
Post
Share
benefits
Employment Other long
Based
Share
Based
Salary &
Non-
fees
Bonus
monetary
$
$
$
Superan-
nuation
$
Term Payment
Payment
Benefits Options Share units
Total
remuneration
$
$
$
$
%
Performance
based
1,502
15
-
2,608
21,147
12.3
15,930
15,154
5,507
9,039
11,827
5,316
209,220
195,057
9
43
5
21
-
-
-
-
285,950
248,948
25,000
19,615
19,308
15,966
6,936
16,468
9,200
338,005
309,412
282,402
15,000
272,680
25,909
25,250
3,395
757
14,870
6,850
341,576
305,537
295,490
25,000
282,706
26,756
25,124
1,353
262
12,580
2,865
361,179
310,957
283,455
275,272
25,909
36,328
11,285
12,249
781
6,003
16,468
9,200
337,898
339,052
60,502
5,748
(9,468)
(8,087)
(4,903)
43,792
(29.7)
414,165
-
(12,940)
(4,903)
422,542
2017 Company and
2016 Consolidated
1,340,267
40,000
1,719,778
25,000
37,521
19,775
795
(14,960)
74,821
23,625
1,609,025
1,926,350
26,220
115,621
153,131
Included in salary & fees are amounts of annual leave accrued during the reporting period. There are no post-employment benefits
other than superannuation. Executive contracts do not provide for any termination payments, other than the payment of accrued leave
entitlements. Other long term benefits comprise long service leave entitlements accrued to the executive during the reporting period.
The amount included in remuneration as share-based payments are not related to or indicative of the benefits (if any) that individual
executives may ultimately realise should the equity instruments vest.
1The Remuneration Committee resolved to grant Mr Everest a $15,000 bonus for FY 2016 for satisfaction of a specific KPI relating to
the Fleetwood West business restructure following a downturn in the resources sector, and a $25,000 bonus to Mr. Naylor for FY 2016
for satisfaction of a specific KPI relating to expanding the Coromal and Windsor product range and Dealer Network. These amounts
were paid in FY 2017.
2Andrew Wackett was appointed to the position of CFO of the Company on 12 June 2017.
5.7
2.7
4.9
11.1
8.7
2.2
10.4
0.9
5.1
4.5
(4.2)
7.2
1.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Remuneration Report (continued)
Share based payment arrangements in existence at the reporting date: Options
Exercise
price
$
Options at
beginning of
year
No.
Options
granted
No.
Options
expired /
forfeited
No.
Options
exercised
(shares
issued)
No.
Options
at end of
year
No.
Vested
at end of
year
No.
Proceeds
received on
exercise
$
Fair value
(market value)
of shares on
exercise
$
8.02
8.68
9.39
10.57
2.56
2.88
81,666
-
(81,666)
39,171
96,775
220
220
65,000
130,000
750
750
140,000
270,000
245,141
579,411
-
-
-
-
-
-
-
-
-
-
-
-
(39,171)
(57,604)
-
-
-
(65,000)
-
-
-
(130,000)
(39,171)
(334,270)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,171
-
39,171
220
220
220
220
65,000
65,000
65,000
65,000
750
750
750
500
140,000
140,000
140,000
-
205,970
245,141
205,970
104,891
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Issue
date
31/10/10
2016
02/09/11
2017
2016
30/08/12
2017
2016
20/02/13
2017
2016
30/08/13
2017
2016
30/08/13
2017
2016
2017
2016
Weighted average
price ($)
2017
2016
Options information:
5.85
6.30
N/A
N/A
8.68
6.63
N/A
N/A
5.31
5.85
5.31
9.82
Option
life
Issue Date Expiry Date Years
Volatility
%
Dividend
yield
%
Risk free
interest
rate
%
Fair value
at grant
date
$
Exercise
price
$
Share
price at
grant date
$
Weighted
average share
price at
exercise date
2017
$
Weighted
average share
price at
exercise date
2016
$
31/10/10
02/09/11
20/02/13
30/08/13
30/10/15
01/09/16
19/02/18
30/08/18
5
5
5
5
40.00
35.69
35.39
45.03
6.14
6.18
7.59
3.64
4.50
4.50
2.85
3.68
2.43
2.53
1.15
1.40
8.02
8.68
10.57
2.88
10.02
10.66
9.66
3.10
-
-
-
-
-
-
-
-
Refer to summary on following pages for those options which are vested and exercisable, and vested and unexercisable.
Yanya O’Hara was issued options under the Employee Option Plan in 2013 and 2014. Jarrod Waring was issued options under the
Employee Option Plan in 2014.
542017
Remuneration Report (continued)
17,022
175,947
165,505
Key management
personnel
Executives
Andrew Wackett2
Chief Financial Officer
(Appointed 12/06/17)
Yanya O'Hara
Company Secretary
2017
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2016
2016
Jarrod Waring
Executive GM, BRB Modular Pty Ltd
Giles Everest1
Executive GM, Fleetwood Pty Ltd
(Appointed 01/12/14)
Peter Naylor1
Executive GM, Fleetwood RV Pty Ltd
Manuel Larre
Executive GM, Camec & Flexiglass
Steve Carroll
GM, International Business
(Resigned 09/10/15)
Bradley Van Hemert
GM, International Procurement
(Redundant 11/03/16)
-
-
-
-
-
-
-
-
-
-
Short-term employee
Post
Share
benefits
Employment Other long
Based
Share
Based
Salary &
Non-
fees
Bonus
monetary
$
$
$
Superan-
nuation
$
Term Payment
Payment
Benefits Options Share units
Total
remuneration
$
$
$
$
%
Performance
based
1,502
15
-
2,608
21,147
12.3
15,930
15,154
5,507
9,039
11,827
5,316
209,220
195,057
9
43
5
21
-
-
-
-
285,950
248,948
25,000
19,615
19,308
15,966
6,936
16,468
9,200
338,005
309,412
282,402
15,000
272,680
25,909
25,250
3,395
757
14,870
6,850
341,576
305,537
295,490
25,000
282,706
26,756
25,124
1,353
262
12,580
2,865
361,179
310,957
283,455
275,272
25,909
36,328
11,285
12,249
781
6,003
16,468
9,200
337,898
339,052
60,502
5,748
(9,468)
(8,087)
(4,903)
43,792
(29.7)
414,165
-
(12,940)
(4,903)
422,542
2017 Company and
2016 Consolidated
1,340,267
40,000
1,719,778
25,000
37,521
19,775
795
(14,960)
74,821
23,625
1,609,025
1,926,350
26,220
115,621
153,131
Included in salary & fees are amounts of annual leave accrued during the reporting period. There are no post-employment benefits
other than superannuation. Executive contracts do not provide for any termination payments, other than the payment of accrued leave
entitlements. Other long term benefits comprise long service leave entitlements accrued to the executive during the reporting period.
The amount included in remuneration as share-based payments are not related to or indicative of the benefits (if any) that individual
executives may ultimately realise should the equity instruments vest.
1The Remuneration Committee resolved to grant Mr Everest a $15,000 bonus for FY 2016 for satisfaction of a specific KPI relating to
the Fleetwood West business restructure following a downturn in the resources sector, and a $25,000 bonus to Mr. Naylor for FY 2016
for satisfaction of a specific KPI relating to expanding the Coromal and Windsor product range and Dealer Network. These amounts
were paid in FY 2017.
2Andrew Wackett was appointed to the position of CFO of the Company on 12 June 2017.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Issue
Exercise
beginning of
Options at
Options
exercised
Options
Vested
Proceeds
(market value)
year
No.
Options
granted
expired /
forfeited
No.
No.
at end of
at end of
received on
of shares on
exercise
exercise
year
No.
year
No.
Options
(shares
issued)
No.
Fair value
date
31/10/10
2016
price
$
8.02
02/09/11
8.68
30/08/12
9.39
20/02/13
10.57
30/08/13
2.56
30/08/13
2.88
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Weighted average
price ($)
2017
2016
Options information:
81,666
-
(81,666)
39,171
96,775
220
220
65,000
130,000
750
750
140,000
270,000
245,141
579,411
-
-
-
-
-
-
-
-
-
-
-
-
(39,171)
(57,604)
-
-
-
-
-
-
(130,000)
(39,171)
(334,270)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,171
39,171
220
220
220
220
750
750
750
500
140,000
140,000
140,000
-
205,970
245,141
205,970
104,891
(65,000)
65,000
65,000
65,000
65,000
5.85
6.30
N/A
N/A
8.68
6.63
N/A
N/A
5.31
5.85
5.31
9.82
Option
Dividend
interest
at grant
Exercise
price at
exercise date
exercise date
Risk free
Fair value
Share
price at
price at
Weighted
Weighted
average share
average share
Issue Date Expiry Date Years
%
life
Volatility
31/10/10
02/09/11
20/02/13
30/08/13
30/10/15
01/09/16
19/02/18
30/08/18
5
5
5
5
40.00
35.69
35.39
45.03
yield
%
6.14
6.18
7.59
3.64
rate
%
4.50
4.50
2.85
3.68
date
$
2.43
2.53
1.15
1.40
$
$
8.02
8.68
10.57
2.88
10.02
10.66
9.66
3.10
Refer to summary on following pages for those options which are vested and exercisable, and vested and unexercisable.
Yanya O’Hara was issued options under the Employee Option Plan in 2013 and 2014. Jarrod Waring was issued options under the
Employee Option Plan in 2014.
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
5.7
2.7
4.9
11.1
8.7
2.2
10.4
0.9
5.1
4.5
(4.2)
7.2
1.7
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
Remuneration Report (continued)
Remuneration Report (continued)
Share based payment arrangements in existence at the reporting date: Options
Share based payment arrangements in existence at the reporting date: Share units
Weighted
average
share
price at
grant date
$
1.35
1.22
1.94
2.19
Grant
date
18/12/14
2017
2016
18/12/15
2017
2016
20/12/16
2017
12/06/17
2017
2017
2016
Share units at
beginning of
year
No.
Share uints
granted
No.
Share units
expired /
forfeited
No.
Share units
exercised
(shares
issued)
No.
Share
units at end of
year
No.
Vested at
end of year
No.
Fair value
(market value) of
shares on
exercise
$
265,000
325,000
325,000
590,000
325,000
-
-
-
(60,000)
-
325,000
368,000
60,000
428,000
325,000
-
-
-
-
-
(60,000)
-
-
-
-
-
-
-
-
265,000
265,000
87,450
90,100
325,000
325,000
110,500
-
368,000
60,000
-
-
1,018,000
590,000
197,950
90,100
-
-
-
-
-
-
-
-
Grant
Date
Expiry
Date
Vesting
tranche
Volatility
%
Dividend
yield
%
Risk free
interest
rate
%
Fair value
at grant
date
$
Exercise
price
$
Weighted
average
share price
at grant
date
$
Weighted
average
share price
at exercise
date 2017
$
Weighted
average
share price
at exercise
date 2016
$
18/12/14
18/12/19
18/12/15
18/12/20
20/12/16
18/12/21
price
grant date
2017
2016
12/06/17
12/06/22
1
2
3
1
2
3
1
2
3
1
2
3
47.57
47.57
47.57
50.21
50.21
50.21
49.48
49.48
49.48
49.48
49.48
49.48
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
3.20
1.90
1.90
1.90
2.40
2.40
2.40
1.73
1.73
1.73
2.33
2.33
2.33
2.53
2.53
2.53
0.43
0.42
0.39
0.46
0.42
0.37
0.82
0.74
0.68
0.91
0.83
0.72
1.35
1.35
1.35
1.22
1.22
1.22
1.94
1.94
1.94
2.19
2.19
2.19
1.35
1.35
1.35
1.22
1.22
1.22
1.94
1.94
1.94
2.19
2.19
2.19
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55
Remuneration Report (continued)
Shares, options and share units held by Directors, executives and key management personnel and movements during the reporting
period;
Shares
Directors
Phillip Campbell
(Appointed 12/8/2016)
2017
Brad Denison
2017
2016
Stephen Boyle
(Resigned 31/08/17)
2017
Michael Hardy
(Resigned 30/6/2017)
2017
2016
Greg Tate
(Resigned 30/6/2017)
2017
2016
John Bond
(Resigned 24/08/16)
2017
2016
Executives
Andrew Wackett
(Apponted 12/06/17)
2017
Yanya O'Hara
2017
2016
Jarrod Waring
2017
2016
Giles Everest
2017
2016
Peter Naylor
2017
Manuel Larre
2017
2016
Bradley Van Hemert
(Redundant 11/03/16)
2016
2017
2016
Shares at
beginning of year
No.
Options
exercised
No.
Net other
change
No.
Shares at
end of year
No.
-
45,464
45,464
-
16,975
16,975
6,568,271
6,568,271
20,000
20,000
-
5,100
-
18,704
8,504
6,800
-
-
10,200
-
175,810
6,691,514
6,835,024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000
15,000
181,900
-
227,364
45,464
-
-
-
-
-
-
-
-
11,750
5,100
20,100
10,200
15,100
6,800
-
16,975
16,975
6,568,271
6,568,271
20,000
20,000
-
16,850
5,100
38,804
18,704
21,900
6,800
6,800
6,800
20,100
10,200
30,300
10,200
(59,173)
116,637
270,750
(26,873)
6,962,264
6,808,151
562017
Remuneration Report (continued)
Remuneration Report (continued)
Shares, options and share units held by Directors, executives and key management personnel and movements during the reporting
Options
Granted
No.
Forfeited
No.
Exercised
No.
Vested
during the
year
No.
Vested
and exer-
cisable at
end of year
No.
Vested
and unexer-
cisable at
end of year
No.
Proceeds
received on
exercise
$
Options at
end of year
No.
Options at
beginning
of year
No.
189,171
215,837
720
720
250
250
55,000
55,000
-
-
-
-
-
-
-
-
(39,171)
(26,666)
-
-
-
-
-
-
108,433
-
(108,433)
199,171
245,141
579,411
-
-
-
(199,171)
(39,171)
(334,270)
Directors
Brad Denison
2017
2016
Executives
Yanya O'Hara
(Appointed 01/08/14)
2017
2016
Jarrod Waring
(Appointed 01/09/14)
2017
2016
Manuel Larre
2017
2016
Steve Carroll
(Resigned 09/10/15)
2016
Bradley Van Hemert
(Redundant 11/03/16)
2016
2017
2016
-
-
-
-
-
-
-
-
-
-
-
-
150,000
189,171
100,000
50,000
-
-
150,000
89,171
720
720
250
250
167
240
84
83
55,000
55,000
40,000
15,000
-
-
205,970
245,141
-
40,000
140,251
105,323
720
553
250
166
-
-
-
-
-
-
-
-
55,000
15,000
-
-
970
719
205,000
104,171
-
-
-
-
-
-
-
-
-
-
-
-
Andrew Wackett, Giles Everest and Peter Naylor did not hold any options during the reporting period.
period;
Shares
Directors
Phillip Campbell
(Appointed 12/8/2016)
Brad Denison
Stephen Boyle
(Resigned 31/08/17)
Michael Hardy
(Resigned 30/6/2017)
Greg Tate
(Resigned 30/6/2017)
John Bond
(Resigned 24/08/16)
Executives
Andrew Wackett
(Apponted 12/06/17)
Yanya O'Hara
Jarrod Waring
Giles Everest
Peter Naylor
Manuel Larre
2017
2017
2016
2017
2017
2016
2017
2016
2017
2016
2017
2017
2016
2017
2016
2017
2016
2017
2017
2016
2016
2017
2016
Bradley Van Hemert
(Redundant 11/03/16)
Shares at
Options
Net other
Shares at
beginning of year
exercised
change
end of year
No.
No.
No.
No.
15,000
15,000
45,464
45,464
181,900
227,364
45,464
-
-
-
-
-
-
-
16,975
16,975
6,568,271
6,568,271
20,000
20,000
5,100
18,704
8,504
6,800
10,200
175,810
6,691,514
6,835,024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,750
5,100
20,100
10,200
15,100
6,800
-
16,975
16,975
6,568,271
6,568,271
20,000
20,000
-
16,850
5,100
38,804
18,704
21,900
6,800
6,800
6,800
20,100
10,200
30,300
10,200
(59,173)
116,637
270,750
(26,873)
6,962,264
6,808,151
57
Remuneration Report (continued)
Option values that form part of current year remuneration;
Year Options Granted
2013
$
2014
$
Remuneration
as options
%
Total
$
Directors
Brad Denison
2017
2016
Executives
Yanya O'Hara
(Appointed 01/08/14)
2017
2016
Jarrod Waring
(Appointed 01/09/14)
2017
2016
Manuel Larre
2017
2016
Bradley Van Hemert
(Redundant 11/03/16)
2016
Steve Carroll
(Resigned 09/10/15)
2016
2017
2016
Movements in option entitlements during the year:
Key management
personnel
Brad Denison
Yanya O'Hara
Jarrod Waring
Manuel Larre
Options granted
No. at
grant
date
-
-
-
-
Value at
grant
date
$
-
-
-
-
-
4,669
1,953
11,506
1,953
16,175
-
-
-
-
-
1,401
9
43
5
21
9
43
5
21
781
4,602
781
6,003
0.3%
2.4%
0.0%
0.0%
0.0%
0.0%
0.2%
1.8%
(3,735)
(9,205)
(12,940)
-3.1%
(2,334)
-
-
(5,753)
2,748
1,214
(8,087)
2,748
1,214
-18.5%
0.2%
0.1%
Options exercised
(shares issued)
Value at
exercise
date
$
No.
during
year
Amounts
paid
$
Options
Vested
No.
during
year
Value
of options
included in
remuneration Remuneration
by options
%
for the year
$
-
-
-
-
-
-
-
-
-
-
-
-
100,000
167
84
40,000
1,953
9
5
781
0.3
0.0
0.0
0.2
39,171 options lapsed during the year (2016: 66,666 options). No options were forfeited during the year because the person did not
meet service or performance criteria.
582017
Remuneration Report (continued)
Option values that form part of current year remuneration;
Remuneration Report (continued)
Share units
Directors
Brad Denison
Executives
Yanya O'Hara
(Appointed 01/08/14)
Jarrod Waring
(Appointed 01/09/14)
Manuel Larre
Bradley Van Hemert
(Redundant 11/03/16)
Steve Carroll
(Resigned 09/10/15)
2017
2016
2017
2016
2017
2016
2017
2016
2016
2016
2017
2016
Year Options Granted
Remuneration
as options
2014
$
1,953
11,506
9
43
5
21
Total
$
1,953
16,175
9
43
5
21
%
0.3%
2.4%
0.0%
0.0%
0.0%
0.0%
0.2%
1.8%
1,401
781
4,602
781
6,003
(3,735)
(9,205)
(12,940)
-3.1%
(2,334)
(5,753)
2,748
1,214
(8,087)
2,748
1,214
-18.5%
0.2%
0.1%
2013
4,669
$
-
-
-
-
-
-
-
-
Movements in option entitlements during the year:
Options granted
Value at
No.
Value at
Options exercised
(shares issued)
Options
Vested
No.
Value
of options
included in
Key management
personnel
grant
date
during
exercise
Amounts
during
remuneration Remuneration
year
date
paid
year
for the year
by options
$
-
-
-
-
-
-
-
-
$
-
-
-
-
$
-
-
-
-
100,000
167
84
40,000
1,953
$
9
5
781
%
0.3
0.0
0.0
0.2
No. at
grant
date
-
-
-
-
Brad Denison
Yanya O'Hara
Jarrod Waring
Manuel Larre
39,171 options lapsed during the year (2016: 66,666 options). No options were forfeited during the year because the person did not
meet service or performance criteria.
Directors
Brad Denison
2017
2016
Executives
Andrew Wackett
(Appointed 12/06/17)
20171
Yanya O'Hara
2017
2016
Jarrod Waring
2017
2016
Giles Everest
2017
2016
Peter Naylor
2017
2016
Manuel Larre
2017
2016
Bradley Van Hemert
(Redundant 11/03/16)
2016
Steve Carroll
(Resigned 09/10/15)
2016
2017
2016
Units at
beginning
of year
No.
Granted
No.
Forfeited
No.
Exercised
No.
Units at end
of year
No.
Vested
during the
year
No.
Vested at
end of year
No.
Proceeds
received on
exercise
$
-
-
-
-
-
-
-
-
-
-
-
-
-
370,000
170,000
200,000
200,000
-
60,000
28,000
20,000
35,000
30,000
35,000
25,000
35,000
20,000
35,000
30,000
35,000
15,000
60,000
30,000
45,000
20,000
20,000
-
60,000
30,000
30,000
30,000
590,000
325,000
-
-
428,000
325,000
(30,000)
(30,000)
-
(60,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
570,000
370,000
124,100
57,800
181,900
57,800
60,000
-
-
63,000
35,000
95,000
60,000
80,000
45,000
55,000
20,000
95,000
60,000
11,750
5,100
20,100
10,200
15,100
6,800
6,800
-
16,850
5,100
30,300
10,200
21,900
6,800
6,800
-
20,100
10,200
30,300
10,200
-
-
10,000
-
-
-
1,018,000
590,000
197,950
100,100
288,050
90,100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Share units issued as part of Andrew Wackett’s remuneration package. The units are subject to a 12 month holding period.
59
Remuneration Report (continued)
Share units values that form part of current year remuneration;
Year Share units granted
Directors
Brad Denison
2017
2016
Executives
Andrew Wackett
2017
Yanya O'Hara
2017
2016
Jarrod Waring
2017
2016
Giles Everest
2017
2016
Peter Naylor
2017
2016
Manuel Larre
2017
2016
Bradley Van Hemert
(Redundant 11/03/16)
2016
Steve Carroll
(Resigned 09/10/15)
2016
2017
2016
2015
$
11,751
27,784
-
1,037
2,452
2,074
4,903
1,383
3,269
-
-
2,074
4,903
(4,903)
(4,903)
18,318
33,504
2016
$
36,278
28,648
-
3,628
2,865
5,442
4,297
4,535
3,581
3,628
2,865
5,442
4,297
-
-
2017
$
51,157
-
2,608
7,162
-
8,953
-
8,953
-
8,953
-
8,953
-
-
-
58,951
46,553
96,738
-
Movements in share unit entitlements during the year:
Remuneration
as share units
%
14.3%
8.3%
Total
$
99,187
56,432
2,608
12.3%
11,827
5,317
16,468
9,200
14,870
6,850
12,580
2,865
16,468
9,200
5.7%
2.7%
4.9%
3.0%
4.4%
2.2%
3.5%
0.9%
4.9%
2.7%
(4,903)
-1.2%
(4,903)
174,008
80,058
-11.2%
7.6%
7.3%
Key management
personnel
Brad Denison
Andrew Wackett
Yanya O'Hara
Jarrod Waring
Giles Everest
Peter Naylor
Manuel Larre
Share units granted
No. at
grant
date
200,000
60,000
28,000
35,000
25,000
20,000
30,000
Value at
grant
date
$
149,333
49,200
20,907
26,133
26,133
26,133
26,133
Share units exercised
(shares issued)
Value at
exercise
date
No.
during
year
Amounts
paid
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Units
Vested
No.
during
year
124,100
-
11,750
20,100
15,100
-
20,100
Value
of share units
included in
remuneration Remuneration
for the year by share units
$
99,187
2,608
11,827
16,468
14,870
12,580
16,468
%
14.3
12.3
5.7
4.9
4.4
3.5
4.9
The issue date for share units granted pursuant to the LTIP was 18 December 2016 at a price of $1.94 per share (2016: 18 December
2015 at a price of $1.22 per share) for all Key management personnel other than for Andrew Wackett. Share units were granted to
Andrew Wackett at a price of $2.19 per share on 12 June 2017. Under the LTIP, each unit can be redeemed for one underlying share in
the Company upon repayment of the loan. There have been no alterations to the terms and conditions of this grant since the grant date.
602017
Remuneration Report (continued)
Share units values that form part of current year remuneration;
Year Share units granted
Remuneration
as share units
Directors
Brad Denison
Executives
Andrew Wackett
Yanya O'Hara
Jarrod Waring
Giles Everest
Peter Naylor
Manuel Larre
2017
2016
2017
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2016
2016
2017
2016
Bradley Van Hemert
(Redundant 11/03/16)
Steve Carroll
(Resigned 09/10/15)
2,608
12.3%
Total
$
99,187
56,432
11,827
5,317
16,468
9,200
14,870
6,850
12,580
2,865
16,468
9,200
%
14.3%
8.3%
5.7%
2.7%
4.9%
3.0%
4.4%
2.2%
3.5%
0.9%
4.9%
2.7%
2015
$
11,751
27,784
-
1,037
2,452
2,074
4,903
1,383
3,269
-
-
2,074
4,903
(4,903)
(4,903)
18,318
33,504
2016
$
36,278
28,648
-
3,628
2,865
5,442
4,297
4,535
3,581
3,628
2,865
5,442
4,297
-
-
2017
$
51,157
-
2,608
7,162
8,953
8,953
8,953
8,953
-
-
-
-
-
-
-
-
(4,903)
-1.2%
58,951
46,553
96,738
(4,903)
174,008
80,058
-11.2%
7.6%
7.3%
200,000
149,333
No. at
grant
date
60,000
28,000
35,000
25,000
20,000
30,000
grant
date
$
49,200
20,907
26,133
26,133
26,133
26,133
Brad Denison
Andrew Wackett
Yanya O'Hara
Jarrod Waring
Giles Everest
Peter Naylor
Manuel Larre
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
124,100
11,750
20,100
15,100
-
-
20,100
$
99,187
2,608
11,827
16,468
14,870
12,580
16,468
-
-
-
-
-
-
-
%
14.3
12.3
5.7
4.9
4.4
3.5
4.9
Remuneration Report (continued)
Section 206J of the Corporation Act (Cth) 2001 prohibits the hedging of remuneration by key management personnel; as such the
Board does not directly impose any restrictions in relation to key management personnel limiting his or her exposure to risk in respect
of share units issued by the Company. No Director is a party to a contract whereby such person would have a right to call for or deliver
shares in, or debentures of or interests in a registered scheme made available by the Group.
Loans to key management personnel
in connection with the Long Term Incentive Plan totaling $1,602,515 (2016: $747,785) were
outstanding at the end of the reporting period. As the loans are non-recourse there is no fixed term, and no allowance for doubtful debts
or impairment loss has been recognised against them. The number of key management personnel included in the aggregate of loans is
7.
Mr. Denison had loans totaling $863,319 (2016: $469,521) made to him at the end of the reporting period, with the total loan remaining
outstanding at the end of the reporting period in connection with the Long Term Incentive Plan. As the loan is non-recourse there is no
fixed term, and no allowance for doubtful debts or impairment loss has been recognised against it.
No share units issued during the year vested or lapsed during the year. No bonuses or share units were forfeited during the year
because the person did not meet service or performance criteria.
The terms and conditions of employment of senior executives and key management personnel are governed by individual employment
contracts. Employment contracts are not limited in duration and do not contain termination payments. Each employment contract may
be terminated by either party upon the giving of 4 weeks’ notice. However, the Company may terminate an employment contract at any
time and without notice if serious misconduct has occurred.
2016 Annual General Meeting
At the 2016 Annual General Meeting, a group of shareholders advised the Board that they intended to vote against the Remuneration
Report resolution as a protest against performance over recent years. The particular shareholders were clear in stating that they did
not take issue with the contents of the Remuneration Report itself, but saw no other way of strongly conveying their displeasure
of performance. As a result, when the advisory resolution to adopt the Remuneration Report was put to shareholder vote, more than
25% of the votes cast were cast against the adoption of the Remuneration Report, and the Company received a first strike
under the Corporations Act (Cth) 2001.
The directors do not expect the reasoning behind last year’s vote to impact this year’s Annual General Meeting.
Non-audit Services
The Directors are satisfied that the provision of non-audit services during the year by the auditor is compatible with the general standard
of independence for auditors imposed by the Corporations Act (Cth) 2001. The Directors are satisfied that the provision of non-audit
services by the auditors did not compromise the auditor independence requirement of the Corporations Act (Cth) 2001 for the following
reasons:
all non-audit services have been reviewed by the Audit Committee to ensure that they do not impact impartiality and
objectivity of the auditor; and
none of the services undermine the general principle relating to auditor independence as set out in the Corporations Act (Cth)
2001 or the Code of Conduct APES 110 Code of Ethics for Professional Accountants, as amended, issued by the Accounting
Professional and Ethical Standards board, including reviewing or auditing the auditors own work, acting in a management or a
decision making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and
rewards.
Details of the amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note
25 to the financial statements.
Movements in share unit entitlements during the year:
Company Secretary
Share units granted
(shares issued)
Value at
No.
Value at
Share units exercised
Units
Value
Vested
of share units
No.
included in
Ms. Yanya O’Hara is the Company Secretary, and was appointed to that position on 1 August 2014. Ms. O’Hara is responsible for all
company governance and secretarial services, and oversees and coordinates the Groups general
legal matters. Prior to her
appointment, Yanya was employed by the Company for three years as Assistant Company Secretary. Prior to joining Fleetwood, Yanya
practiced as a corporate attorney in New York and as a barrister and solicitor in Perth.
Key management
personnel
during
exercise
Amounts
during
remuneration Remuneration
year
date
paid
year
for the year by share units
Corporate Governance Statement
The Company’s Corporate Governance Statement for the year ended 30 June 2017, may be accessed from the Company’s website at
http://www.fleetwoodcorporation.com.au/Investors/Corporate-Governance.
Rounding
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and
accordingly amounts in the financial report and directors’ report have been rounded to the nearest one thousand dollars, unless
otherwise indicated.
Signed in accordance with a resolution of the Directors.
The issue date for share units granted pursuant to the LTIP was 18 December 2016 at a price of $1.94 per share (2016: 18 December
2015 at a price of $1.22 per share) for all Key management personnel other than for Andrew Wackett. Share units were granted to
Andrew Wackett at a price of $2.19 per share on 12 June 2017. Under the LTIP, each unit can be redeemed for one underlying share in
the Company upon repayment of the loan. There have been no alterations to the terms and conditions of this grant since the grant date.
P Campbell
Board Chair
29 September 2017
61
Directors’ Declaration
In the opinion of the directors of Fleetwood Corporation Limited:
a)
The financial statements and notes set out on pages 12 to 47, are in accordance with the Corporations Act (Cth) 2001,
including:
i.
Complying with Australian Accounting Standards and the Corporations Regulations 2001 (Cth); and
ii. Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance for the financial
year ended on that date; and
b)
c)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
There are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order 98/1418
applies, as detailed in note 26 to the financial statements will, as a Group, be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of the deed of cross guarantee.
The Directors’ draw attention to note 1 to the financial statements, which includes a statement of compliance with International
Financial Reporting Standards.
The directors have been given the declarations required by s.295A of the Corporations Act (Cth) 2001 from the Managing Director and
Chief Financial Officer. Signed in accordance with a resolution of the directors.
On behalf of the Directors
P Campbell
Board Chair
29 September 2017
Perth
622017 Directors’ Declaration
In the opinion of the directors of Fleetwood Corporation Limited:
a)
The financial statements and notes set out on pages 12 to 47, are in accordance with the Corporations Act (Cth) 2001,
i.
Complying with Australian Accounting Standards and the Corporations Regulations 2001 (Cth); and
ii. Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance for the financial
year ended on that date; and
b)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
including:
payable; and
c)
There are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order 98/1418
applies, as detailed in note 26 to the financial statements will, as a Group, be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of the deed of cross guarantee.
The Directors’ draw attention to note 1 to the financial statements, which includes a statement of compliance with International
Financial Reporting Standards.
The directors have been given the declarations required by s.295A of the Corporations Act (Cth) 2001 from the Managing Director and
Chief Financial Officer. Signed in accordance with a resolution of the directors.
On behalf of the Directors
P Campbell
Board Chair
29 September 2017
Perth
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Fleetwood Corporation Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of Fleetwood Corporation Limited for the year ended 30 June 2017, I declare that, to
the best of my knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Patrick Warr
Partner - Audit & Assurance
29 September 2017
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
63
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
to the Directors of Fleetwood Corporation Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Fleetwood Corporation Limited (the Company), and its
subsidiaries (the Group) which comprises the consolidated statement of financial position as at 30
June 2017, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, and notes to the consolidated statement statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying consolidated statement report of Fleetwood Corporation Limited,
is in accordance with the Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b 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
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
642017
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the consolidated statement report of the current period. These matters were
addressed in the context of our audit of the consolidated statement report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Revenue recognition for construction contracts
Note 1.5 and Note 2
For the year ended 30 June 2017, the Group
recognised $138.073 million in revenues from its
construction contracts within its Modular
Accommodation operating segment.
The Group recognises revenues from construction
contracts with reference to AASB 111 Construction
Contracts and uses percentage-of-completion
accounting.
There is heightened risk around the application of
percentage-of-completion accounting as it requires
management to estimate margins that impact
revenue recognised.
This area is a key audit matter due to the degree of
management estimation and judgements required
with regard to revenue recognised under the
percentage-of-completion method.
Our procedures included, amongst others:
discussions with management to obtain an
understanding of the revenue recognition
policies applied and assess their
compliance with AASB 111 Construction
Contracts;
testing the operating effectiveness of
controls over the modular accommodation
projects;
testing a sample of costs incurred and their
allocation to projects, through supporting
documentation such as an invoice and
approved timesheets;
reviewing the schedule of all contracts in
progress provided by management and
recompute using budgeted margin
percentages applied to accumulated costs;
sampled the contract prices to approved
contracts signed by the customer;
performed analytical procedures to assess
the budgeting accuracy; and
assessed the appropriateness of financial
statement disclosures.
Goodwill valuation
Note 13
As at 30 June 2017, the Group carries $55.230
million in Goodwill across various cash-generating
units.
Our procedures included, amongst others, obtaining
management’s latest discounted cash flow model and
performing the following audit procedures:
Goodwill is required to be assessed for valuation
annually by management as prescribed in AASB 138
– Intangible Assets and AASB 136 – Impairment of
Assets.
This area is a key audit matter due to significant
balances carried by the Company that are assessed
using management estimates and judgement. The
Group estimates the fair value of its cash-generating
units by employing a discounted cash flow model
and, in doing so, determining the following:
forecasted cash flows from operations
working capital adjustments
capital expenditure estimates
discount and growth rates
a terminal value
These estimates and judgments can require specific
valuation expertise and analysis.
identified the key assumptions in the model;
obtained from management available
evidence to support the key assumptions;
performed sensitivity analysis on the key
assumptions;
tested the mathematical accuracy of the
model;
considered the reasonableness of the
revenue and costs forecasts against current
year actuals;
involved the expertise of our internal
corporate finance experts; and
ensured the appropriateness of related
financial statement disclosures.
65
Key audit matter
Non-current assets held for sale
Note 11
As at 30 June 2017, the Group holds $20.220 million
of non-current assets that are held for sale. These
assets had been previously classified as assets held
for sale as at 30 June 2016.
As per AASB 5 – Non-current Assets Held for Sales
and Discontinued Operations, assets held for sale
are required to be presented as Current Assets and
presented at the lower of their written-down value
and fair value less cost to sell the assets.
This area is a key audit matter due to significant
balances carried by the Group. The assets held for
sale are presented at their fair value less cost to sell
the assets, which is determined using management
estimates and judgments.
How our audit addressed the key audit matter
Our procedures included, amongst others:
obtaining a schedule of non-current assets
held for sale sold during the period and on-
hand as at 30 June 2017;
reviewed in-period sales results and
compared to carrying value assessments,
testing management’s ability to accurately
estimate the fair value less cost to sell the
assets;
sampled the vouched sales results to
source invoices and proof of receipt in
bank;
reviewed correspondence of tender
documents and third party interest in
purchase of the units and assessed buyer
price against the fair value assigned to the
units; and
viewed evidence of the sale or sale
contracts of any units post year-end and
compared results to the fair value less cost
to sell of units carried as at 30 June 2017.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2017, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do 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
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, 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.
Responsibilities of the Directors’ for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability 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 have 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
662017
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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 49 to 61 of the directors’ report for
the year ended 30 June 2017.
In our opinion, the Remuneration Report of Fleetwood Corporation Limited, for the year ended 30
June 2017, 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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
P W Warr
Partner – Audit & Assurance
29 September, 2017
67
ASX Additional Information
as at 26 September 2017
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is
set out below.
Twenty largest shareholders
Name
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
Karrad Pty Ltd
Citicorp Nominees Pty Limited
One Managed Invt Funds Ltd
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