ANNUAL REPORT 2020 OUR VISION TO BE THE LEADING PROVIDER OF TRANSPORT AND LOGISTICS SOLUTIONS WITHIN OUR TARGET MARKETS IN AUSTRALIA AND NEW ZEALAND. CONTENTS Chairman’s Report Financial Overview Managing Director’s Report Directors’ Report Remuneration Report Financial Report Corporate Directory FINANCIAL CALENDAR Annual General Meeting Half Year Result Full Year Result Annual Report to Shareholders Annual General Meeting 1 3 4 6 14 20 IBC 24 November 2020 24 February 2021 25 August 2021 15 October 2021 23 November 2021 CHAIRMAN’S REPORT On behalf of the Board of K&S Corporation Limited, I am pleased to present the Company’s Annual Report for the year ended 30 June 2020. Trading conditions in the transport and logistics segments and regions that the Company trades in remain challenging. Operating revenues for the period were $790.6 million, 12.7% lower than the prior corresponding period. The Company reported a statutory profit after tax of $11.2 million, up 384.1% on the previous year’s statutory profit after tax of $2.3 million. Included in the Group comprising K&S Corporation Limited and its subsidiaries (The Group) statutory result for FY2020 was $12.4 million (before tax) attributable to JobKeeper and $1.3 million (before tax) in NZ wage subsidy, both of which were received in the June 2020 quarter. Offsetting these were a number of other significant items relating to debt refinancing, restructuring and the sale of the WA Regal General Freight business. These items totalled $8.4 million. After adjusting for the above significant items including government wage subsidies, the current year underlying profit before tax was $12.0 million, an increase of 270.1% on the prior corresponding period. The underlying profit after tax was $8.4 million, up on the prior corresponding period by $6.1 million. Operating cashflow for the year was $83.1 million, 34.4% higher than for the previous year, which included benefits derived through continued and improved working capital management as well as government wage subsidies. Safety remains a key focus for the Group. The Group’s lost time injury rate improved, reducing from 10.0 at the end of last year to 6.6 in the current year. The Australian Transport business delivered a strong improvement in results compared to the last year. Full year revenue declined due to a combination of the cessation of contracts, divestment of underperforming business units and customer activity reduction consequent to COVID-19. The implementation of cost reduction strategies continued across the business, contributing strongly to improved underlying profit. In particular, the Group has focussed on operational efficiencies, supplier renegotiations, cessation of underperforming activities, and the rationalisation and replacement of specific fleet assets that reduced operating costs. Ongoing cost reductions are expected to continue to be accretive in the next year, although these may be offset by possible COVID-19 related impacts. The New Zealand business produced a sound result in FY2020, despite the Stage 4 COVID-19 lockdowns being put in place from 23 March 2020 to 26 April 2020. The New Zealand business continues to realise growth through the provision of its integrated and value adding service offering, with further business diversification also being achieved. The fuel trading business has again provided sound financial results, despite demand softening in the June 2020 quarter consequent to COVID-19. The fuel retailing and wholesaling markets remain dynamic and continue to exhibit high levels of competition. K&S CORPORATION LIMITED ANNUAL REPORT 2020 1 The Directors have declared a fully franked fi nal dividend of 3.0 cents per share (2019: 0.0 cents per share). This follows the fully franked interim dividend of 2.0 cents per share paid in April 2020, making the total fully franked dividend 5.0 cents per share in respect of the year ended 30 June 2020. The fi nal dividend will be paid on 3 November 2020, with the date for determining entitlements being 20 October 2020. Directors have also elected to suspend the dividend reinvestment plan (DRP) in respect of the fi nal dividend as they believe that it is in the best interests of Shareholders to suspend the DRP as the Group’s shares are currently trading at too great a discount to the net tangible asset backing of $1.74 per share and the issuing of shares under the dividend reinvestment plan would be dilutionary to existing shareholders. MANAGEMENT CHANGES Wayne Johnston ceased as Chief Financial Offi cer on 16 December 2019 and Raunak Parikh was appointed to the position of Chief Financial Offi cer on 1 April 2020. On behalf of the Board, I thank our customers, suppliers and employees, who have contributed to the continued success of the business. In particular, I thank the senior management team, led by Paul Sarant, for their ongoing commitment and dedication in diffi cult times. Tony Johnson Chairman CHAIRMAN’S REPORT COVID-19 In the June 2020 quarter, the Group experienced reduced revenues in a number of business units in Australia and New Zealand as a result of COVID-19. At a minimum, the Group expects revenues to be adversely impacted by COVID-19 in the fi rst half of FY2021. With the exception of the Stage 4 lockdown imposed in New Zealand between 23 March 2020 and 26 April 2020, the Group’s operations have not been subject to any Government mandated shut-downs or state border closures. The Group has enacted pandemic protocols to assist manage the safety of employees. The Group has also implemented measures to mitigate potential impacts of COVID-19 upon its continued ability to fulfi l core managerial, administrative, operational and customer service functions. DIVIDEND The Directors are cognisant of the fact that whilst the statutory earnings for the current year include signifi cant contributions from government wage subsidies, the Group’s underlying earnings have also improved signifi cantly compared to the prior year. The fi nal dividend declared was determined with reference to the underlying net profi t after tax, as opposed to the statutory profi t after tax, and specifi cally excludes any impact of government wage subsidies from the dividend calculation. 2 K&S CORPORATION LIMITED ANNUAL REPORT 2020 FINANCIAL OVERVIEW OPERATING REVENUE ($M) OPERATING CASH FLOW ($M) 905.2 844.1 790.6 699.2 688.8 755.2 83.1 61.8 48.1 49.4 41.1 40.8 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 UNDERLYING PROFIT AFTER TAX ($M) GEARING (%) 13.3 34.9 34.7 37.0 35.4 7.5 7.7 8.4 25.0 21.4 3.9 2.3 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 K&S CORPORATION LIMITED ANNUAL REPORT 2020 3 MANAGING DIRECTOR’S REPORT Company revenue decreased from the prior corresponding period by 12.7% to $790.6 million. Underlying Profit before Tax increased to $12.0 million from $3.2 million in the prior year, underpinned by various profit improvement initiatives that were completed in the current year, of which several were commenced in prior periods. In August 2019, we announced the sale of our Western Australian general freight business, Regal. The business sale was completed on 30 August 2019 and a significant portion of the surplus operating fleet was divested and working capital realised in the current year. Support of the South32 Coal operations also ceased. The Lost Time Injury Frequency Rate across the K&S Group decreased from 10.0 in the previous year to 6.6 in the current year. In addition, the total reportable injury frequency rate reduced by approximately 20% compared to the previous year. Our improvement of all facets of our safety performance remains a high priority. SAFETY The global COVID-19 pandemic has presented the business with a new series of challenges concerning the ongoing safety our employees, contractors, sub-contractors and those who we interact with every day to provide transport and logistics services for our customers and communities. The engagement, commitment and leadership displayed by all our workers to ensure our workplace remained safe during this pandemic has been of the highest order. As an essential service provider, we have continued to operate throughout the pandemic, albeit with alterations to state and territory border crossing controls, ensuring supply chains remain in place for our customers and the broader community. In the year the Group had no reported COVID-19 cases. We continue to operate with strict control regimes in place. As we exit COVID-19 state based restrictions, our primary concern will remain the welfare of our employees and their extended families. The Group has continued to invest heavily and proactively in load restraint training. In September 2019, this investment was recognised at the 30th Australian Freight Industry Awards where the group was provided the Investment in People Award. With over 600 training sessions delivered to date using our current methods, manual handling injury rates have declined with an approximate 25% reduction in overall manual handling injuries, and in particular shoulder injuries compared to last year. 4 K&S CORPORATION LIMITED ANNUAL REPORT 2020 ENVIRONMENT Ongoing fleet upgrades have enabled the Group to continue its emission improvements. During the year vehicle emissions reduction reached 76% of 2003 levels for NOx, up from 74%, and 93% for particulate matter compared with 91% last year. Carbon dioxide generation for 2018-19 was 180,886 tonnes, down from 199,000 tonnes from the previous year reflecting on business activities for the year. COMPLIANCE The Group has maintained ISO 9001:2015 accreditation standards, including other relevant accreditations which included: WA Main Roads, NHVAS Mass, Maintenance and Basic Fatigue Management, accreditation for Food Safety/ HACCP and TruckSafe accreditation. AUSTRALIAN TRANSPORT Intermodal and Import/Export Intermodal operations performed well, particularly on the eastern seaboard. Asset utilisation was further improved in both linehaul road and rail operations. Intermodal steel and timber volume from our major customers was strong. Major infrastructure projects undertaken by the various State and Federal governments underpinned these activity levels, and despite the recent decline in domestic housing and apartment construction, are forecast to remain the same in the immediate future. Full year revenue declined due to a combination of the cessation of contracts, divestment of underperforming business units and customer activity reduction consequent to COVID-19. The implementation of cost reduction strategies continued across the business, contributing strongly to improved underlying profit. Contract & Specialist Logistics Our contract logistics business has continued the previous trend of year on year growth, with another strong performance. Diversification and expansion into non-traditional sectors continued, with new contracts being awarded and commenced during the year across the country. A strong focus on safety, service excellence and differentiation remain core to the business, underpinning the value proposition to customers and establishing long term sustainable partnerships. The core business provides consistent volume activity and financial returns, underpinned by focussed cost management and fleet utilisation. Heavy Haulage demand was firm throughout the financial year. Fleet upgrades were progressed, with additional assets being added early in FY2021. Whilst not shielded from the impact of the COVID-19 pandemic, the diversified customer base and industry segments did assist in limiting the direct impact the pandemic has had on the business. Chemical and Fuel Transport There has been steady improvement in our chemical and energy transportation businesses in FY2020, with a range of restructuring initiatives having a positive impact over the course of the year. The improvements were offset by a fall in volumes, especially in the energy business during the COVID-19 period as fuel demand declined significantly in the June 2020 quarter. Aviation Services Our specialised aviation refuelling business performed well with strong activity levels in support of regional firefighting efforts. With better than previous year’s rainfall, agricultural support also increased. Consequent to COVID-19, significant volume reductions were experienced in the June 2020 quarter with traffic through many regional airports that we support materially declining. A new refuelling installation was commissioned at Bathurst Airport in March 2020. Construction of our largest, and most recent installation at Port Hedland International Airport (WA) was commenced, with commissioning anticipated in November 2020. The fleet upgrade and expansion program has continued with our firefighting capacity increased further. NEW ZEALAND Despite the Stage 4 COVID-19 lockdowns put in place from 23 March 2020 to 26 April 2020, which materially impacted our fleet utilisation, our New Zealand operation has realised a solid result in FY2020. Industry segments such as dairy, steel and timber performed strongly this year, underpinning the overall performance. Operating cashflows remain strong and debt has reduced to record low levels. Further growth and diversification of the revenue base remain key priorities, leveraging the strong and expandable infrastructure that has been put in place over the past 5 years. FUEL AGENCY In an exceptionally competitive market, the fuel trading business provided sound financial results. A softening of demand was experienced in the June 2020 quarter consequent to COVID-19. The fuel retailing and wholesaling markets remain dynamic and continue to exhibit high levels of competition. Our South Australian regional network was marginally increased with the addition of a new retail shop and service station at Kingston SA. HUMAN RESOURCES Employee engagement and communications programs remain a high priority and area of focus across the business. Further development of our employee smartphone App was completed to support our training and engagement programs aligned to our core values. We continue to align the operational and management structures to service the needs of business units and customers, whilst maintaining our strong focus on the retention and development of skilled and qualified employees as K&S’ most valuable asset. OTHER ITEMS The implementation and realisation of profit and cash improvement and debt reduction strategies has successfully continued across the business, contributing strongly to improved underlying profit in the current year. We remain focussed on improving operational efficiencies, achieving increased benefits through supplier renegotiations, the cessation of underperforming activities, and the rationalisation and replacement of specific fleet assets to realise reduced operating costs. As part of the year’s changes we exited eleven externally rented properties. Ongoing cost reductions are expected to continue to be accretive in FY2021, although as we commence the new period in softer market conditions adversely impacted by COVID-19, these may be offset by other items. I would like to take this opportunity to thank all employees, and supporters of K&S, who have collectively worked exceptionally hard to continue to improve our Company. Paul Sarant Managing Director and CEO K&S CORPORATION LIMITED ANNUAL REPORT 2020 5 DIRECTORS’ REPORT The Directors present their report, together with the consolidated financial report of the Group comprising K&S Corporation Limited (the “Company”) and its subsidiaries, for the year ended 30 June 2020 and the Auditor’s Report thereon. DIRECTORS The Directors of the Company in office at the date of this report, together with particulars of their qualifications, experience and special responsibilities are set out below. Tony Johnson Chairman Age 73, Director since 1986 Tony Johnson BA, LLB, LLM (Companies & Securities) FAICD is a lawyer and an accredited mediator. Mr Johnson is a founder and former Chairman of the national law firm Johnson Winter & Slattery. He has worked extensively in the corporate advisory and commercial disputes area. Mr Johnson is also Chairman of AA Scott Pty Ltd, the largest Shareholder of K&S Corporation Limited and Chairman of Adelaide Community Healthcare Alliance. Member of: – Environmental Committee (Chairman) – Nomination and Remuneration Committee (Chairman) (appointed 26 November 2019) – Audit Committee Paul Sarant Managing Director and Chief Executive Officer Age 52, Director since 2014 Paul Sarant B.Eng., has extensive experience in the transport and logistics sector. Mr Sarant held the position of Executive General Manager DTM for seven years at K&S Corporation prior to his appointment as Managing Director and Chief Executive Officer. Before that, Mr Sarant occupied a range of senior management roles, including general management and senior manufacturing, engineering and logistics roles in the course of his fifteen years at Amcor Printing Paper Group/ PaperlinX and was former General Manager at Spicer Stationery Group. Member of: – Environmental Committee Legh Winser Age 72, Director since 2013 Legh Winser is a former Managing Director of the Company, a position which he held for 16 years. He has extensive knowledge of the transport and logistics industry with more than 40 years’ experience. Mr Winser is also a director of AA Scott Pty Ltd, the largest Shareholder of K&S Corporation Limited. Member of: – Environmental Committee – Nomination and Remuneration Committee 6 K&S CORPORATION LIMITED ANNUAL REPORT 2020 Graham Walters AM (Independent Director) Age 78, Director since 22 May 2018 Graham Walters AM FCA is an experienced chartered accountant and director of successful public and private companies and associations, with extensive experience in accounting, finance, audit, risk management and corporate governance. Mr Walters AM is a former Chairman of Partners South Australia of KPMG and a former Chairman of Westpac South Australia. Mr Walters AM is a Director of Adelaide Community Healthcare Alliance and Adelaide Development Company Ltd. Member of: – Audit Committee (Chairman) (appointed Chairman 26 November 2019) Sallie Emmett Age 55, Director since 24 September 2019 Sallie Emmett LLB GDLP, is a lawyer with over 30 years’ experience as a practising solicitor in both legal and management roles. Mrs Emmett is a former partner of national law firm Johnson Winter & Slattery. Mrs Emmett has a broad range of commercial exposure including in workplace relations. Mrs Emmett operates her own legal and management consulting business and has advised the boards and management of a variety of organisations including private and public companies, government, and educational institutions. Mrs Emmett has significant transport sector experience, having acted for a number of transport companies. Mrs Emmett also sits on the board of a number of not for profit organisations. Member of: – Audit Committee (appointed 26 November 2019) Ray Smith (Independent Director) (Retired on 26 November 2019) Age 73, Director since 2008 Ray Smith FCPA, FAICD, Dip Com is a Director of listed entity Cleanaway Waste Management Ltd since 2011 and is a Director of Hy-Line Australia Pty Ltd. Mr Smith brings a wealth of corporate and financial experience in the areas of strategy, acquisitions, treasury and capital raising. Member of: – Audit Committee (Chairman until retirement on 26 November 2019) – Nomination & Remuneration Committee (Chairman until retirement on 26 November 2019) SECRETARY Chris Bright BEc, LLB, Grad Dip CSPM, FCIS Age 49, Secretary since 2005 Chris Bright has held the position of General Counsel for 18 years. Mr Bright was admitted as a solicitor in South Australia in 1997. He also has experience working in private practice in Adelaide, principally in commercial dispute resolution. K&S CORPORATION LIMITED ANNUAL REPORT 2020 7 DIRECTORS’ MEETINGS The number of Directors’ meetings (including meetings of Committees of Directors) and number of meetings attended by each of the Directors of the Company during the financial year were: Director Number of meetings held: Number of meetings attended: Mr T Johnson Mr R Smith2 Mr P Sarant Mr L Winser Mr G Walters AM Mrs S Emmett3 Directors’ Meetings1 Audit Committee Meetings Nomination & Remuneration Committee Meetings Environmental Committee Meetings 19 19 8 19 17 19 13 6 6 3 – – 6 3 1 1 1 – 1 – – 4 4 – 4 4 – – 1. In addition to the eleven scheduled directors’ meetings, there were a further eight directors’ meetings held in the course of FY2020. 2. Mr Smith ceased to act as a director on 26 November 2019 and attended all of the directors’ meetings as well as the audit committee and nomination and remuneration committee meetings in respect of which he was eligible. 3. Mrs Emmett commenced to act as a director on 24 September 2019 and attended all of the directors’ meetings and audit committee meetings in respect of which she was eligible. PRINCIPAL ACTIVITIES The principal activities of the Group during the course of the financial year were transport and logistics, contract management, warehousing and distribution and fuel distribution. There were no significant changes in the nature of the activities of the Group during the year. OPERATING AND FINANCIAL REVIEW The Board presents the FY2020 Operating and Financial Review, which has been designed to provide Shareholders with a clear and concise overview of the Group’s operations, financial position, business strategies and outlook. The review complements the financial report and has been prepared in accordance with the guidelines in ASIC RG247. 8 K&S CORPORATION LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT The consolidated profit for the year ended 30 June 2020 attributable to the members of K&S Corporation Limited (“K&S”) is shown below, along with comparative results for the previous corresponding period: Financial Overview 2020 2019 % Movement Operating Revenue Statutory profit after tax Statutory profit before tax Earnings before interest and tax (EBIT) Earnings before interest, tax and depreciation (EBITDA)2 Less legal settlement income Less JobKeeper income and NZ wages subsidy Less other significant items Underlying profit before interest, tax & depreciation2 Underlying profit before interest & tax Underlying profit before tax1 Underlying operating profit after tax1 Total assets Net borrowings excluding lease liabilities Shareholders’ funds Finance costs2 Depreciation2 Dividend per share Net tangible assets per share3 Operating cash flow2 Return on assets Gearing ratio (excluding lease liabilities) Employee numbers Lost time injuries Lost time injuries frequency rate $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 cents $ $’000 % % 790,639 11,237 16,090 26,410 82,426 – (13,731) 9,648 74,758 18,742 12,007 8,405 563,344 69,608 255,367 10,320 56,016 5.0 1.74 83,074 2.0 21.4 2,161 31 6.6 905,207 2,321 3,197 11,158 60,515 (9,525) – 9,572 60,562 11,205 3,244 2,354 579,778 131,605 240,331 7,961 49,357 2.0 1.84 61,833 0.4 35.4 2,749 57 10.0 (12.7%) 384.1% 403.3% 136.7% 36.2% (100.0%) 100.0% 0.8% 23.4% 67.3% 270.1% 257.1% (2.8%) (47.1%) 6.3% 29.6% 13.5% 150.0% (5.4%) 34.4% 398.3% (39.6%) (21.4%) (45.6%) (34.0%) 1. Underlying profits and earnings per share based on underlying profits are categorised as non-IFRS Financial information and therefore have been presented in compliance with ASIC Regulatory Guide 230- Disclosing non-IFRS information issued in December 2011. Underlying adjustments have been considered in relation to their size and nature, and have been adjusted from the statutory information for disclosure purposes to assist readers to better understand the financial performance of the underlying business in each reporting period. These adjustments primarily include the Government wage subsidies received, redundancies, debt refinancing, COVID-19 related costs, onerous lease expenses and costs associated with the sale of Regal General Freight. The exclusion of these items provides a result which, in the Directors view, is more closely aligned with the ongoing operations of the Consolidated Group. The non-IFRS information has not been subject to audit or review by the auditor. 2. Balances include amounts arising from the adoption of the new leasing accounting standard AASB 16 Leases from 1 July 2019, refer to pages 25-26 for further details. 3. The net tangible asset backing per ordinary security has been impacted by the introduction of AASB 16. At 30 June 2020, $26.6 million of lease liabilities were included within the net tangible assets calculation, but $25.7 million of right of use assets have been excluded as they are considered to be of an intangible nature. This has reduced the net tangible asset per security by $0.20. The Group is a tier one logistics provider, recognised as a leader in the development and provision of specialist logistics solutions for its customers. The Group operates in the Australian and New Zealand markets. The Group’s success is underpinned by a strong focus on safety, service and continuous improvement. The environment for the transport and logistics sector in FY2020 continued to be challenging. The transport and logistics sector continues to experience high levels of competition and pressure on rates, a low growth economic environment and the concentration of bargaining power in large and sophisticated buyers of transport and logistics services. In addition, in the second half of FY2020, the COVID-19 pandemic has impacted economic activity and market sentiment. Operating revenues decreased by 12.7% to $790.6 million in FY2020. The Group achieved a statutory profit before tax of $16.1 million, an increase of $12.9 million or 403.3% on the prior corresponding period. K&S CORPORATION LIMITED ANNUAL REPORT 2020 9 Included in the Group’s statutory result for FY2020 was $12.4 million (before tax) attributable to JobKeeper and $1.3 million (before tax) in NZ wage subsidy, both of which were received in the June 2020 quarter. The Group’s statutory result also included $9.6 million of costs treated as significant items. These largely related to hire purchase break costs from the Group’s debt refinancing totalling $3.6 million, $3.4 million in redundancy costs and a further $1.4 million of costs associated with the sale of the Western Australia based Regal General Freight business that was concluded in August 2019. After adjusting for the above significant items including government wage subsidies, the current year underlying profit before tax was $12.0 million, an increase of 270.1% on the prior corresponding period. The underlying profit after tax was $8.4 million, up on the prior corresponding period by $6.1 million. Operating cashflow for FY2020 was $83.1 million, 34.4% higher than for the previous year, which included benefits derived through continued and improved working capital management as well as government wage subsidies. Safety remains a key focus for the Group. The Group’s lost time injury rate improved, reducing from 10.0 at the end FY2019 to 6.6 in FY2020. Australian Transport The overall segment delivered a strong improvement in results compared to FY2019. Full year revenue declined due to a combination of the cessation of contracts, divestment of underperforming business units and customer activity reduction consequent to COVID-19. The implementation of cost reduction strategies continued across the business, contributing strongly to improved underlying profit. In particular, the Group has focussed on operational efficiencies, supplier renegotiations, cessation of underperforming activities, and the rationalisation and replacement of specific fleet assets that reduced operating costs. Ongoing cost reductions are expected to continue to be accretive in FY2021, although these may be offset by possible COVID-19 related impacts. Intermodal steel and timber volume from our major customers were strong, with major infrastructure projects undertaken by the various state governments underpinning ongoing activity levels, despite the recent decline in domestic housing and apartment construction. We continue to incur increased costs in our rail transport operations as a result of increased rail network costs. Our contract logistics business unit again experienced a pleasing FY2020, with both our revenue base and profit contribution increasing. During the COVID-19 period it has proven to be quite resilient, especially in the June 2020 quarter, when some other segments experienced volume reductions. There has been steady improvement in our chemical and energy transportation businesses in FY2020, with a range of restructuring initiatives having a positive impact over the course of the year. The improvements were offset by a fall in volumes, especially in energy business during the COVID-19 period as fuel demand declined significantly in the June 2020 quarter. 10 K&S CORPORATION LIMITED ANNUAL REPORT 2020 The sale of the Western Australia based Regal General Freight business and certain assets to Centurion Transport Co. Pty Ltd (Centurion) was completed on 30 August 2019. Remaining contributions from Western Australia based heavy haulage and contract logistics were sound with limited impact from COVID-19. Our specialised aviation refuelling business performed well with strong activity levels in support of regional firefighting efforts. It then subsequently experienced a significant fall in volumes in the June 2020 quarter as a consequence of COVID-19 as our airport refuelling services materially declined. Our specialist business units continue to provide strong diversification in our earnings and provide further strategic growth opportunities. Fuel Agency The fuel trading business has again provided sound financial results, despite demand softening in the June 2020 quarter consequent to COVID-19. The fuel retailing and wholesaling markets remain dynamic and continue to exhibit high levels of competition. New Zealand Transport The New Zealand business produced a sound result in FY2020, despite the Stage 4 COVID-19 lockdowns being put in place from 23 March 2020 to 26 April 2020. The New Zealand business continues to realise growth through the provision of its integrated and value adding service offering, with further business diversification also being achieved. Balance Sheet and Funding The Group successfully completed the refinance of its debt facilities in April 2020. The Group secured a new $200 million debt facility that completely refinanced the previous debt arrangements that included a significant number of hire-purchase lease contracts. Leveraging the Group’s sound balance sheet, the new debt facility provides improved terms, liquidity, pricing and debt covenant headroom and does not require any mandatory amortisation in FY2021. The debt facility comprises funding in three year tranches totalling A$150 million and five year tranches totalling A$50 million, and will be utilised for fleet capex, working capital and general corporate purposes. The debt facility was provided by two of the Group’s existing lenders, Westpac and NAB, with the addition of a new lender, Bank of China. Previous funding arrangements with CBA have ceased. The Group incurred a charge of $3.6 million in break costs relating to the refinance. During the course of the year, the Group acquired fixed assets totalling $20.6 million, well below the prior year amount of $64.9 million. The resulting cashflow savings were used to repay debt. Based upon independent valuations, the Group increased the carrying value of its freehold property portfolio by $6.7 million. The Group’s property portfolio consists of high quality industrial assets that have not been adversely impacted by COVID-19, compared to other commercial property assets. The Group’s gearing ratio (excluding lease liabilities) reduced to 21.4% at 30 June 2020, compared to 35.4% in the prior year. DIRECTORS’ REPORT Business Restructuring As part of the ongoing cost reduction focus, the Group completed a number of restructuring activities during the year: – Regal General Freight – The Western Australia based business was sold in August 2019 to Centurion. Under the agreement, Regal transferred to Centurion its rights and entitlements under customer contracts and Centurion made offers of employment to the majority of the employees of K&S working in the Regal General Freight business. The sale was completed on 30 August 2019. – Bulk transportation – The Port Kembla based bulk transportation business was closed in January 2020 following the exit of the Illawarra Coal contract. The closure of the Port Kembla bulk business resulted in an improvement in Group underlying performance in the second half of FY2020. – Chemical and energy transportation – A number of underperforming operations were exited during the year. Each of the above initiatives were accretive to profit in FY2020. The Group recorded a total redundancy expense of $3.4 million in relation to these initiatives. COVID-19 It is not possible to forecast with any certainty the magnitude of the COVID-19 impact on the Australian and New Zealand economies or upon the Group itself. In the June 2020 quarter the Group experienced reduced revenues in a number of business units in Australia and New Zealand as a result of COVID-19. At a minimum, the Group expects revenues to be adversely impacted by COVID-19 in the first half of FY2021. With the exception of the Stage 4 lockdown imposed in New Zealand between 23 March 2020 and 26 April 2020, the Group’s operations have not been subject to any Government mandated shut downs or state border closures. The Group has enacted pandemic protocols to assist manage the safety of employees. The Group has also implemented measures to mitigate potential impacts of COVID-19 upon its continued ability to fulfil core managerial, administrative, and operational functions. Pleasingly, for the June 2020 quarter, the Group was able to maintain near pre-COVID-19 levels of workforce participation with nil major stand down actions. The receipt of the JobKeeper wage subsidy has further strengthened the Group’s financial position and will assist it to withstand the longer term impacts of COVID-19 on operations. Safety Addressing the challenges posed by COVID-19 required considerable resourcing and was the major area of employee welfare and safety focus in the second half of FY2020. Cognisant of the Group’s large and mobile workforce which services numerous customer sites, it is pleasing that at this point in time the Group has had nil employee COVID-19 cases. We continue to invest in our safety management system and in the training of our employees. Dividend The Directors are cognisant of the fact that whilst the statutory earnings for FY2020 include significant contributions from government wage subsidies, the Group’s underlying earnings have also improved significantly compared to the prior year. The final dividend declared was determined with reference to the underlying net profit after tax, as opposed to the statutory profit after tax, and specifically excludes any impact of government wage subsidies from the dividend calculation. The Directors have declared a fully franked final dividend of 3.0 cents per share (2019: 0.0 cents per share). This follows the fully franked interim dividend of 2.0 cents per share paid in April 2020, making the total fully franked dividend 5.0 cents per share in respect of the year ended 30 June 2020. The final dividend will be paid on 3 November 2020, with the date for determining entitlements being 20 October 2020. Directors have elected to suspend the dividend reinvestment plan (DRP) in respect of the final dividend. The Directors believe that it is in the best interests of Shareholders to suspend the DRP as the Group’s shares are currently trading at too great a discount to the net tangible asset backing of $1.74 per share and the issuing of shares under the dividend reinvestment plan would be dilutionary to existing shareholders. Board Composition and Management Changes Sallie Emmett was appointed as a non-executive director with effect from 24 September 2019. Mrs Emmett is a lawyer with over 30 years’ experience as a practising solicitor in both legal and management roles. Mrs Emmett has a broad range of commercial exposure, including to the transport sector, and expertise in workplace relations. Mr Ray Smith retired as a non-executive director following the conclusion of the Group’s annual general meeting on 26 November 2019. Mr Smith made a significant contribution over his eleven years as a non-executive director. Mr Wayne Johnston ceased as Chief Financial Officer on 16 December 2019. Mr Raunak Parikh was appointed to the position of Chief Financial Officer on 1 April 2020. Mr Parikh previously occupied the position of Group Financial Controller at K&S from May 2019. Prior to commencing with K&S, Mr Parikh held senior audit roles at KPMG. Outlook Providing earnings guidance going forward remains difficult, particularly having regard to the uncertainties created by COVID-19. The Group has secure long term bank facilities and low gearing levels, and will continue to take a conservative approach to financial risk as well as maintaining a strong focus on working capital management and underlying profit improvement. The Group will continue to target organic growth, particularly in market segments such as contract logistics that will deliver stronger returns on investment. The Group continues to review the industry segments in which it operates as well as the ways it offers services to the market. The Group also continues to review customer accounts that currently do not generate adequate financial returns. K&S CORPORATION LIMITED ANNUAL REPORT 2020 11 SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group during the financial year. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group’s operations are subject to environmental regulations under both Commonwealth and State legislation in relation to its transport and storage business and its fuel business. The Group has a Board Committee which monitors compliance with environmental regulations. Climate Change Reporting under the National Greenhouse Energy Reporting regime (NGER) was completed and submitted in FY2020. Transport and Warehousing The transport and warehousing business is subject to the Dangerous Goods Acts in Commonwealth and State Legislation. The Group monitors performance and recorded several incidents during the year, none of which has the potential to result in any material restrictions being placed upon the Group’s ability to continue its operations in their current form. Fuel The fuel business is subject to the South Australian Environmental Protection Act 1993 and the South Australian Dangerous Substances Act 1979. The Group monitors performance and recorded a number of minor fuel related incidents during the year. In all cases, corrective actions have been taken. DIVIDENDS Dividends paid or declared by the Company to members since the end of the previous financial year were: 1 A fully franked preference dividend (taxed to 30%) of 4.0 cents per share amounting to $4,800 in respect of the year ended 30 June 2019 was declared on 30 August 2019 and paid on 2 November 2019; and 2 An interim fully franked ordinary dividend (taxed to 30%) of 2.0 cents per share in respect of the year ended 30 June 2020 was declared on 25 February 2020 and paid on 3 April 2020 amounting to $2,545,587. The final dividend declared by the Company for the year ended 30 June 2020 and payable on 3 November 2020 in respect of the year ended 30 June 2020 comprises: 1 A fully franked ordinary dividend (taxed to 30%) of 3.0 cents per share amounting to $3,863,563 (based on the Company’s current issued share capital); and 2 A fully franked preference dividend (taxed to 30%) of 4.0 cents per share amounting to $4,800. The preference share dividends are included as interest expense in determining net profit. DIVIDENDS PAID TO SHAREHOLDERS (cents per share) 12 10 8 6 4 2 0 4.5 5.0 6.0 3.5 3.0 5.0 5.0 6.5 3.0 3.5 1.5 2.0 1.5 2.0 3.0 2.0 2.0 2.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ■ Interim ■ Final 12 K&S CORPORATION LIMITED ANNUAL REPORT 2020 DIRECTORS’ REPORT EVENTS SUBSEQUENT TO BALANCE DATE TAX CONSOLIDATION On 28 August 2020, the Directors of K&S Corporation Limited declared a final dividend on ordinary shares in respect of the 2020 financial year. The total amount of the dividend is $3,863,563 which represents a fully franked dividend of 3.0 cents per share. The dividend has not been provided for in the 30 June 2020 financial statements and is payable on 3 November 2020. No other matters have arisen in the interval between the end of the financial year and the date of this report, including any item, transaction or event of a material and unusual nature which, in the opinion of the Directors of the Company, are likely to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS Indemnification The Company indemnifies current and former Directors, Executive Officers and the Secretaries of the Company and its controlled entities against all liabilities, costs and expenses to another person (other than the Company or a related body corporate) to the maximum extent permitted by law that may arise from their position as Directors, Executive Officers and Secretaries of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. Insurance premiums Since the end of the previous financial year, the Company has paid insurance premiums of $177,540 in respect of Directors’ and Officers’ Liability insurance contracts for current and former officers, including Directors, Executive Officers and the Secretaries of the Company and its controlled entities. The insurance premiums relate to: – Costs and expenses incurred by the relevant officers in successfully defending proceedings, whether civil or criminal; and – Other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or position to gain a personal advantage. The Officers of the Company covered by the policy include the current Directors: T Johnson, L Winser, S Emmett, G Walters AM and P Sarant. Other officers covered by the contract are Executive Officers and the Secretaries of the Company and Directors and the Secretaries of controlled entities (who are not also Directors of the Company), General Managers and other Executive Officers of controlled entities. Indemnification of auditors To the extent permitted by law and excluding in circumstances of negligence, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. Effective 1 July 2002, for the purposes of income taxation, K&S Corporation Limited and its domestic based 100% owned subsidiaries formed a tax consolidated Group. Members of the Group entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned subsidiaries on a pro-rata basis. In addition, the agreement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of K&S Corporation Limited support the principles of corporate governance. The Company’s Corporate Governance Statement can be found on this URL on our website: http://www.ksgroup.com.au/ corporate-governance/. ROUNDING The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016 and in accordance with that legislative instrument, amounts in the Financial Report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES The entity’s Auditor, Ernst & Young have provided the Group with an Auditors’ Independence Declaration which is on page 58 of this report. DIRECTORS’ INTERESTS The beneficial interest of each Director in their own name in the share capital of the Company shown in the Register of Directors’ Shareholdings as at the date of this report is: Mr L Winser Mr P Sarant Ordinary Shares 43,651 60,000 Directors of the Company have relevant interests in additional shares as follows: Mr L Winser Mr T Johnson Mr P Sarant Mr G Walters AM Ordinary Shares 1,252,799 542,967 126,603 5,252 K&S CORPORATION LIMITED ANNUAL REPORT 2020 13 REMUNERATION REPORT (AUDITED) This remuneration report outlines the Director and executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, Key Management Personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether executive or otherwise) of the parent company. The Nomination and Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and executives on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executives. For the purposes of this report, the term executive encompasses the Managing Director, executives, general managers and secretaries of the Parent and the Group. Details of the Key Management Personnel are: i) Directors Mr T Johnson Mr P Sarant Mr R Smith Mr L Winser Mr G Walters AM Mrs S Emmett Non-Executive Chairman Managing Director and Chief Executive Officer Non-Executive Director (retired 26 November 2019) Non-Executive Director Non-Executive Director Non-Executive Director (appointed 24 September 2019) ii) Key Management Personnel Mr R Parikh Mr W Johnston Mr C Bright Chief Financial Officer (appointed 1 April 2020) Chief Financial Officer (ceased 16 December 2019) Company Secretary REMUNERATION PHILOSOPHY The performance of the Group depends upon the quality of its Directors and executives. To prosper, the Group must attract, motivate and retain highly skilled Directors and executives. To this end, the Group adopts the following key principles in its remuneration policy: – Remuneration is set at levels that will attract and retain good performers and motivate and reward them to continually improve business performance. – Remuneration is structured to reward employees for increasing Shareholder value. – Rewards are linked to the achievement of business targets. THE NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee of the Board of Directors of the Company is responsible for reviewing compensation arrangements for the Directors, the Managing Director and executives. While the Nomination and Remuneration Committee reviews the remuneration paid to Non-Executive Directors and the Managing Director, and the aggregate remuneration paid to the executive team, the Board of Directors has ultimate responsibility for determining these amounts. REMUNERATION STRUCTURE In accordance with best practice corporate governance, the structure of Non-Executive Director, Managing Director and other executive remuneration is separate and distinct. NON-EXECUTIVE DIRECTOR REMUNERATION Objective The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain quality Directors, whilst incurring a cost which is acceptable to Shareholders. Structure The Constitution and the ASX Listing Rules specify that the maximum aggregate remuneration of Non-Executive Directors’ shall be determined from time to time by a general meeting of Shareholders. The latest determination was at the Annual General Meeting held on 20 November 2012 when Shareholders approved a maximum aggregate remuneration of $600,000 per year. The amount of aggregate remuneration sought to be approved by Shareholders and the amounts paid to Directors is reviewed annually. The Board considers the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review, as well as periodically taking advice from external recruitment consultants. No advice was taken from external recruitment consultants in relation to the fees paid to Non-Executive Directors in FY2020. Each Non-Executive Director receives a fee for being a Director of the Company. There were no increases in fees payable to Non-Executive Directors in FY2020. Non-Executive Directors have long been encouraged by the Board to hold shares in the Company (purchased by the Director on the market). It is considered good corporate governance for Directors to have a stake in the Company whose Board he or she sits on. The remuneration of Non-Executive Directors for the period ended 30 June 2020 is detailed on page 17 of this report. 14 K&S CORPORATION LIMITED ANNUAL REPORT 2020 EXECUTIVE DIRECTOR AND EXECUTIVE REMUNERATION Objective The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company to: – reward executives for Company, business unit and individual performance against targets set by reference to appropriate benchmarks; – align the interests of executives with those of Shareholders; – link reward with performance of the Company; and – ensure total remuneration is competitive by market standards. Structure In determining the level and make up of executive remuneration, the Nomination and Remuneration Committee seeks external information detailing market levels of comparable executive roles from which the Committee makes its recommendation to the Board. For the Managing Director and the other executives, remuneration programs are balanced with a mix of fixed and variable rewards. The makeup and eligibility criteria for short term incentives are approved by the Board at the commencement of each financial year. As safety performance is a key organisational goal and critical to the ongoing operations of the Group, the Board believes that aligning the payment of short term incentives to reducing lost time injuries is appropriate and in the interests of Shareholders. As the Company’s annual budget for operating profit before tax is set with a view to increasing the profit generated by the Company, growing earnings per share, and improving the Company’s capacity to pay dividends, the Board also believes that aligning the payment of short term incentives to the attainment of budgeted profit before tax on a normalised basis is appropriate and in the interests of Shareholders. The Board also believes that having all of the Company’s executives aligned to the common goal of achieving budgeted operating profit before tax drives positive behaviours amongst the executives in maximising Group wide benefits from operating activities. For the year ended 30 June 2020, the Board approved the adoption of at risk short term incentives of up to 30% of the base remuneration of the Managing Director and executives. The payment of such short term incentives is settled in cash. The Board reviews and considers the fees paid to the Managing Director and other executives of comparable companies when undertaking the annual review, as well as periodically taking advice from external recruitment consultants. No advice was taken from external recruitment consultants in relation to the fees paid to the Managing Director and other executives for the year ended 30 June 2020. Payment of the short term incentive in respect of the 2020 financial year was conditional upon: – outperformance of budgeted profit before tax on an underlying basis and excluding any non-trading items (e.g., government wage subsidies or restructuring charges) (but including any non-trading items that have been included in the budget) on a sliding scale up to a maximum of 20% of base remuneration: Profit Before Tax STI4 Ascot Media Investments Pty Ltd 5 Zena Winser Pty Ltd 6 PS Super Nominee Pty Limited 7 Oakcroft Nominees Pty Ltd 8 Mr Eric Joseph Roughana 9 Ardmore Super Pty Ltd 10 Winscott Investments Pty Ltd 11 Tirroki Pty Ltd 12 Kailva Pty Ltd 13 Dixson Trust Pty Ltd 14 Collins Rural Superfund Pty Ltd 15 Mr Anthony Victor King & Ms Elina Maria King 16 Ray Scott Private Pty Ltd 17 Maine Pty Ltd 18 Mrs Edna Grace Scott 19 Mr Raymond Walter Scott 20 Mr Bruce Grubb & Mrs Valerie Grubb Number of Shareholders 422 671 249 314 43 1,699 % 60.49 14.21 3.98 1.99 1.58 0.98 0.97 0.54 0.53 0.52 0.42 0.33 0.28 0.28 0.27 0.23 0.22 0.19 0.19 0.17 88.37 Number of Ordinary Shares Held 77,905,262 18,299,696 5,125,532 2,558,428 2,038,885 1,269,720 1,252,799 700,000 682,032 667,536 542,967 420,000 364,430 355,343 350,000 292,721 282,457 241,925 241,664 215,837 110,812,872 AA Scott Pty Limited is the registered holder of all the 6% Non Redeemable Cumulative Preference Shares, participating to 8%. The 20 largest shareholders hold 88.37% of the ordinary shares of the Company, and 100% of the preference shares. The following is an extract from the Company’s Register of Substantial Shareholders as at 28th September 2020:- AA Scott Pty Ltd & Associated Companies Linfox Australia Pty Ltd VOTING RIGHTS The voting rights are as follows: Preference Shares: Nil Ordinary Shares: 1 vote per share 64 K&S CORPORATION LIMITED ANNUAL REPORT 2020 Number % of Class 83,067,544 22,977,255 65.26 18.05 CORPORATE DIRECTORY HEAD OFFICE 591 Boundary Road Truganina Victoria 3029 Phone: (03) 8744 3500 Facsimile: (03) 8744 3599 REGISTERED OFFICE 141-147 Jubilee Highway West Mount Gambier South Australia 5290 Phone: (08) 8721 1700 Facsimile: (08) 8721 1799 STOCK EXCHANGE K&S Corporation Limited's shares are quoted on the Australian Securities Exchange (ASX code: KSC). SHARE REGISTRY c/o Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street Adelaide, South Australia 5000 Phone: (08) 8236 2300 Facsimile: (08) 9473 2102 GPO Box 1903 Adelaide SA 5001 Enquiries within Australia: 1300 556 161 Enquiries outside Australia: 61 3 9415 5000 web.queries@computershare.com.au www.computershare.com.au Email: Website: Website: www.ksgroup.com.au OPERATIONS Intermodal/Bulk Melbourne 591 Boundary Road Truganina VIC 3029 Phone: (03) 8744 3700 Portland 53 Fitzgerald Street Portland VIC 3305 Phone: (03) 5523 4144 Geelong 325 Thompson Road North Geelong VIC 3215 Phone: (03) 5278 5777 West Cliff Colliery Weighbridge Christchurch Ballarat c/o Laminex Industries 16 Trewin Street Wendouree VIC 3355 Phone: (03) 5338 1710 Kyabram 39 McCormick Road Kyabram VIC 3620 Phone: (03) 5852 1011 Sydney 1 Hope Street Enfi eld NSW 2136 Phone: (02) 9735 2400 Appin Wedderburn Road Wedderburn NSW 2560 Phone: (02) 4640 4109 Brisbane 34 Postle Street Coopers Plains QLD 4108 Phone: (07) 3137 4400 Bundaberg Old Quanaba Mill, Grange Road Bundaberg QLD 4670 Phone: (07) 4159 2150 Townsville 677 Ingham Road MountSaint John QLD 4818 Phone: (07) 4431 2070 Roseneath 2-6 Curley Circuit Roseneath QLD 4811 Phone: (07) 4721 7700 Perth Precinct Lot 1 Kewdale Freight Off Fenton Street Kewdale WA 6105 Phone: (08) 6466 6600 Bunbury 28 Barcoo Close Dardanup West WA 6236 Phone: (08) 9725 4400 Adelaide 30-32 Francis Street Port Adelaide SA 5015 Phone:(08) 7224 5400 Mount Gambier 209 Jubilee Highway West Mount Gambier SA 5290 Phone: (08) 8721 2941 Alice Springs 5827 Dalgety Road Alice Springs NT 0870 Phone: (08) 8950 8701 Darwin 8 College Road Darwin NT 0828 Phone: (08) 8984 4922 New Zealand Cambridge 3847 Te Awamutu Road Cambridge NZ Phone: (07) 827 6002 Mount Maunganui 35 Portside Drive Mount Maunganui NZ Phone: (07) 575 8265 Auckland 126 Kerwyn Ave Highbrook Auckland NZ Phone: (09) 307 0061 55 Lunns Rd Middleton Christchurch NZ Phone: (03) 344 0171 DTM Sydney 2 Hope Street Enfi eld NSW 2136 Phone: (02) 9735 2300 Melbourne 591 Boundary Road Truganina VIC 3029 Phone: (03) 8744 3509 Adelaide 30-32 Francis Street Port Adelaide SA 5015 Phone: (08) 7224 5400 Brisbane 34 Postle Street, Coopers Plains QLD 4108 Phone: (07) 3137 4400 Perth Lot 1 Kewdale Freight Precinct Off Fenton Street Kewdale WA 6105 Phone: (08) 6466 6646 K&S Heavy Haulage Perth Part 460 Bushmead Road Hazelmere WA 6055 Phone: (08) 9376 9600 K&S Energy/Chemtrans Brisbane 34 Postle Street Coopers Plains QLD 4108 Phone: (07) 3718 4221 Darwin 8 College Road Berrimah NT 0828 Phone: (08) 8995 8100 Sydney 1 Hope Street Enfi eld NSW 2135 Phone: (02) 9735 2346 Adelaide 19 Bowyer Rd Wingfi eld SA 5013 Phone: (08) 8347 3449 Melbourne 591 Boundary Road Truganina VIC 3029 PO Box 57 Laverton VIC 3028 Phone: (03) 8744 3700 Mackay 112 Spiller Avenue Mackay QLD 4740 Phone: (07) 4431 2040 Port Kembla Cnr King & Wattle Streets Port Kembla NSW 2505 Phone: (02) 4267 9200 Newcastle 45 Greenleaf Road Kooragang Island NSW 2304 Phone: (02) 4033 7000 Roseneath 2-6 Curley Circuit Roseneath QLD 4811 Phone: (07) 4721 7700 Townsville 13 Pilkington Street Garbutt QLD 4814 Phone: (07) 4431 2000 Gladstone Lot 152 Red Rover Road Gladstone QLD 4680 Phone: (07) 4973 1700 Perth Perth 3 Central Avenue Hazelmere WA 6055 Phone: (08) 6274 9600 Cnr Beard and Morley Streets Naval Base WA 6165 Phone: 0417 046 786 K&S Fuels Mount Gambier 40 Graham Road Mount Gambier SA 5290 Phone: (08) 8721 1774 Millicent Cnr Williams & Mt Gambier Roads Millicent SA 5280 Phone: (08) 8733 3133 Aero Refuellers Albury Hangar 8-11 Ogden Place East Albury NSW 2640 Phone: (02) 6041 1599 Enfi eld 1 Hope Street Enfi eld NSW 2135 Phone: (02) 9735 2392 Thurgoona 22 Hoff mann Road Thurgoona NSW 2640 Phone: (02) 6054 2200 CORPORATE DIRECTORY HEAD OFFICE 591 Boundary Road Truganina Victoria 3029 Phone: (03) 8744 3500 Facsimile: (03) 8744 3599 REGISTERED OFFICE 141-147 Jubilee Highway West Mount Gambier South Australia 5290 Phone: (08) 8721 1700 Facsimile: (08) 8721 1799 STOCK EXCHANGE K&S Corporation Limited's shares are quoted on the Australian Securities Exchange (ASX code: KSC). SHARE REGISTRY c/o Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street Adelaide, South Australia 5000 Phone: (08) 8236 2300 Facsimile: (08) 9473 2102 GPO Box 1903 Adelaide SA 5001 Enquiries within Australia: 1300 556 161 Enquiries outside Australia: 61 3 9415 5000 Email: web.queries@computershare.com.au Website: www.computershare.com.au Website: www.ksgroup.com.au OPERATIONS Intermodal/Bulk Melbourne 591 Boundary Road Truganina VIC 3029 Phone: (03) 8744 3700 Portland 53 Fitzgerald Street Portland VIC 3305 Phone: (03) 5523 4144 Geelong 325 Thompson Road North Geelong VIC 3215 Phone: (03) 5278 5777 Ballarat c/o Laminex Industries 16 Trewin Street Wendouree VIC 3355 Phone: (03) 5338 1710 Kyabram 39 McCormick Road Kyabram VIC 3620 Phone: (03) 5852 1011 Sydney 1 Hope Street Enfi eld NSW 2136 Phone: (02) 9735 2400 Appin West Cliff Colliery Weighbridge Wedderburn Road Wedderburn NSW 2560 Phone: (02) 4640 4109 Brisbane 34 Postle Street Coopers Plains QLD 4108 Phone: (07) 3137 4400 Bundaberg Old Quanaba Mill, Grange Road Bundaberg QLD 4670 Phone: (07) 4159 2150 Townsville 677 Ingham Road MountSaint John QLD 4818 Phone: (07) 4431 2070 Roseneath 2-6 Curley Circuit Roseneath QLD 4811 Phone: (07) 4721 7700 Perth Lot 1 Kewdale Freight Precinct Off Fenton Street Kewdale WA 6105 Phone: (08) 6466 6600 Bunbury 28 Barcoo Close Dardanup West WA 6236 Phone: (08) 9725 4400 Adelaide 30-32 Francis Street Port Adelaide SA 5015 Phone:(08) 7224 5400 Mount Gambier 209 Jubilee Highway West Mount Gambier SA 5290 Phone: (08) 8721 2941 Alice Springs 5827 Dalgety Road Alice Springs NT 0870 Phone: (08) 8950 8701 Darwin 8 College Road Darwin NT 0828 Phone: (08) 8984 4922 New Zealand Cambridge 3847 Te Awamutu Road Cambridge NZ Phone: (07) 827 6002 Mount Maunganui 35 Portside Drive Mount Maunganui NZ Phone: (07) 575 8265 Auckland 126 Kerwyn Ave Highbrook Auckland NZ Phone: (09) 307 0061 Christchurch 55 Lunns Rd Middleton Christchurch NZ Phone: (03) 344 0171 DTM Sydney 2 Hope Street Enfi eld NSW 2136 Phone: (02) 9735 2300 Melbourne 591 Boundary Road Truganina VIC 3029 Phone: (03) 8744 3509 Adelaide 30-32 Francis Street Port Adelaide SA 5015 Phone: (08) 7224 5400 Brisbane 34 Postle Street, Coopers Plains QLD 4108 Phone: (07) 3137 4400 Perth Lot 1 Kewdale Freight Precinct Off Fenton Street Kewdale WA 6105 Phone: (08) 6466 6646 K&S Heavy Haulage Perth Part 460 Bushmead Road Hazelmere WA 6055 Phone: (08) 9376 9600 K&S Energy/Chemtrans Brisbane 34 Postle Street Coopers Plains QLD 4108 Phone: (07) 3718 4221 Darwin 8 College Road Berrimah NT 0828 Phone: (08) 8995 8100 Sydney 1 Hope Street Enfi eld NSW 2135 Phone: (02) 9735 2346 Adelaide 19 Bowyer Rd Wingfi eld SA 5013 Phone: (08) 8347 3449 Melbourne 591 Boundary Road Truganina VIC 3029 PO Box 57 Laverton VIC 3028 Phone: (03) 8744 3700 Mackay 112 Spiller Avenue Mackay QLD 4740 Phone: (07) 4431 2040 Port Kembla Cnr King & Wattle Streets Port Kembla NSW 2505 Phone: (02) 4267 9200 Newcastle 45 Greenleaf Road Kooragang Island NSW 2304 Phone: (02) 4033 7000 Roseneath 2-6 Curley Circuit Roseneath QLD 4811 Phone: (07) 4721 7700 Townsville 13 Pilkington Street Garbutt QLD 4814 Phone: (07) 4431 2000 Gladstone Lot 152 Red Rover Road Gladstone QLD 4680 Phone: (07) 4973 1700 Perth 3 Central Avenue Hazelmere WA 6055 Phone: (08) 6274 9600 Perth Cnr Beard and Morley Streets Naval Base WA 6165 Phone: 0417 046 786 K&S Fuels Mount Gambier 40 Graham Road Mount Gambier SA 5290 Phone: (08) 8721 1774 Millicent Cnr Williams & Mt Gambier Roads Millicent SA 5280 Phone: (08) 8733 3133 Aero Refuellers Albury Hangar 8-11 Ogden Place East Albury NSW 2640 Phone: (02) 6041 1599 Enfi eld 1 Hope Street Enfi eld NSW 2135 Phone: (02) 9735 2392 Thurgoona 22 Hoff mann Road Thurgoona NSW 2640 Phone: (02) 6054 2200 www.ksgroup.com.au