Kangaroo Island
Plantation Timbers Ltd
Annual Financial Report
ABN 19 091 247 166
For the year ended
30 June 2021
Corporate Information
Directors
Paul Lawrence McKenzie (Non-Executive Chairman)
Keith Desmond Lamb (Managing Director)
Shauna Marie Black (Executive Director)
Gregory Colin Boulton AM (Non-Executive Director)
James Richard Davies (Non-Executive Director)
Mitchell Bennett Taylor (Non-Executive Director)
Company Secretary
Victoria Marie Allinson
Registered Office
Unit 3B, Level 3,
60 Hindmarsh Square
Adelaide, South Australia 5000
Telephone: (08) 8227 2482
Facsimile: (08) 8223 1685
Principal Place of Business
Unit 3B, Level 3,
60 Hindmarsh Square
Adelaide, South Australia 5000
Solicitors
Piper Alderman Lawyers
Level 16, 70 Franklin Street
Adelaide, South Australia 5000
Bankers
Commonwealth Bank of Australia Limited
CBA Specialised Agribusiness Solutions WA SA NT
Level 14D, 300 Murray Street
Perth, Western Australia 6000
Auditor
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
Adelaide, South Australia 5000
Share Registry
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell St
Adelaide, South Australia 5000
Telephone: (08) 8236 2300
Website
www.kipt.com.au
Australian Securities Exchange Code
KPT
Contents
P a g e | 1
DIRECTORS ................................................................................................................................................... 2
COMPANY SECRETARY AND CHIEF FINANCIAL OFFICER ..................................................................................... 5
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE .............................. 5
DIVIDENDS .................................................................................................................................................... 6
PRINCIPAL ACTIVITIES .................................................................................................................................... 6
CORPORATE INFORMATION ............................................................................................................................. 6
OPERATING AND FINANCIAL REVIEW ................................................................................................................. 7
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS ............................................................................................... 9
SIGNIFICANT EVENTS AFTER BALANCE DATE ...................................................................................................... 9
LIKELY DEVELOPMENTS ..................................................................................................................................11
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS .......................................................................11
PROCEEDINGS ON BEHALF OF THE COMPANY ...................................................................................................11
DIRECTORS’ MEETINGS ..................................................................................................................................11
COMMITTEE MEMBERSHIP ..............................................................................................................................11
ROUNDING ...................................................................................................................................................11
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES .........................................................................................12
REMUNERATION REPORT (AUDITED) ................................................................................................................12
AUDITOR INDEPENDENCE DECLARATION ...............................................................................................24
CORPORATE GOVERNANCE STATEMENT ................................................................................................25
FINANCIAL REPORT .....................................................................................................................................26
DIRECTORS’ DECLARATION .......................................................................................................................71
INDEPENDENT AUDITOR’S REPORT ..........................................................................................................72
INVESTORS’ SUPPLEMENTARY INFORMATION .......................................................................................75
Directors’ Report
P a g e | 2
Your directors submit their report for the year ended 30 June 2021.
Directors
The names and details of the Company’s directors in office during or since the end of the financial
year are as follows:
Director
Position
Appointed
Last elected or
re-elected at
AGM
Resigned
Paul McKenzie
Non-Executive Chairman
29 April 2005
10 Nov 2017
-
Keith Lamb(1)
Managing Director
15 Oct 2018
-
-
John Sergeant(2)
Non-Executive Director
2 March 2013
21 Nov 2019
3 May 2021
Shauna Black(1)
Executive Director
17 March 2015
21 Nov 2019
-
Gregory Boulton AM
Non-Executive Director
1 Nov 2016
16 Oct 2018
21 Sep 2021
James Davies
Non-Executive Director
13 July 2021
-
-
Mitchell Taylor
Non-Executive Director
13 July 2021
-
-
(1) Mr Lamb and Ms Black are resigning at the close of the 2021 AGM.
(2) Mr Sergeant was appointed as a Non-Executive Director on 1 April 2020. He had served as an
Executive Director since 1 January 2015, including as Managing Director between 1 January
2015 and 1 June 2019, and, before that, had served as a non-executive director for the company
from 2 March 2013. Mr Sergeant resigned as a Non-Executive Director on 3 May 2021.
Names, qualifications, experience and special responsibilities
Paul McKenzie BSc(Agric), BCom, FAICD, AIAST
Non-Executive Chairman
Board member since April 2005, appointed Chairman July 2009. Member of
the Audit and Risk Committee.
Mr McKenzie is the Managing Partner of Agrarian Management, a leading
Western Australian agriculture consultancy with offices in Geraldton, Perth and
Esperance. He has 29 years’ experience in agribusiness, management,
finance and primary production, advising over $1.0 billion of agriculture assets.
He is a Fellow of AICD, past President of the Australian Association of
Agricultural Consultants (WA) Inc and a Ministerial Appointee to various
agribusiness review and advisory panels.
Mr McKenzie is a Non-Executive Director of Minbos Resources Limited (ASX:
MNB) (appointed 7 December 2020), Chairman of CRC for Honey Bee Products Ltd, Chairman of
Hay Australia Pty Ltd and a director of SALIC Australia Pty Ltd (the Saudi Agricultural & Livestock
Investment Company’s Australian entity).
Mr McKenzie is also a director of Rural Financial Counselling Service (WA), which administers a
federal government-funded program in WA under the Department of Agriculture, Fisheries and
Forestry.
Mr McKenzie was the founding Chairman of Gage Roads Brewing Co (ASX: GRB) from concept to
private company to ASX listing in December 2006, resigning in May 2008.
Other than as disclosed above, in the three years prior to 30 June 2021, Mr McKenzie held no other
director positions with any other ASX listed companies.
Mr McKenzie will step down as Chairman as the Annual General Meeting but will remain a Non-
Executive Director.
Directors’ Report
P a g e | 3
Keith Lamb BForSc, GrDip (REM), MFor, EMBA, GAIDC, MIFA
Managing Director
Board member since October 2018. Mr Lamb was appointed an Executive
Director on 11 March 2019 and became Managing Director on 1 June 2019.
Mr Lamb holds masters-level qualifications in Forestry and in Business
Administration. He was Director of Operations and Portfolio Manager for New
Forests Asset Management Pty Ltd (New Forests) from 2005 until 2017, with
responsibility for $2.5 billion in timberland and related agricultural and
industrial assets. Mr Lamb has also served as a director of several forestry
companies and trusts within and outside the New Forests group. His early
career included both government and non-government forestry roles.
In the three years prior to 30 June 2021, Mr Lamb held no director positions
with any other ASX listed companies.
Mr Lamb will retire from the Board at the next Annual General Meeting, to be held in October 2021.
Shauna Black Dip Proj Mgt
Executive Director
Board member since March 2015 and Executive Director of Community
Engagement since May 2017.
Ms Black has been a well-known and respected resident of Kangaroo Island
(“KI”) for 16 years and is the Executive Officer of the Kangaroo Island Business
and Brand Alliance. She acted as Flood Recovery Co-ordinator for Kangaroo
Island Council following the severe flood damage sustained in June 2013 in
the MacGillivray/Haines area of KI, and is active in a number of local
associations on Kangaroo Island.
With a 30-year career in media, Ms Black was the Managing Editor of KI’s
newspaper, The Islander, for almost eight years. This followed a move from
Adelaide after a 15-year stint at The Advertiser, where amongst other things, she was its first
personal finance editor and superannuation writer.
She is currently a member of the board of Media Super and Chair of its Investment Committee and
is also the proprietor of Black Stump Media, a Kangaroo Island business specialising in media and
project management services.
In the three years prior to 30 June 2021, Ms Black held no director positions with any other ASX
listed companies.
Ms Black will retire from the Board at the next Annual General Meeting, to be held in October 2021.
Gregory Boulton AM BA(Accounting), FCA, FCPA, FAICD
Independent Non-Executive Director
Board member since November 2016. Chairman of the Audit and Risk
Committee.
Mr Boulton is a leading Adelaide company director with 35 years’ experience
in both public and private companies. He is the Chair of Southern Gold Ltd
(ASX: SAU), Chair of SA Pine Pty Ltd and Chair of Super SA. He is also a
Director of the Cancer Council of South Australia. Mr Boulton was a director of
Kogi Iron Limited (ASX: KFE) from 29 November 2018 until he retired on 15
November 2020.
Other than as disclosed above, in the three years prior to 30 June 2021, Mr
Boulton held no other director positions with any other ASX listed companies.
Directors’ Report
P a g e | 4
Mr Boulton has significant experience in Governance, Logistics, Timber, Resources and Finance. He
is a Fellow of the Institute of Chartered Accountants, CPA Australia and the Australian Institute of
Company Directors.
Mr Boulton was awarded an AM – Member in the General Division of the Order of Australia – for his
services to AFL Football Administration, to the Community of South Australia and to Business.
Mr Boulton was President of Port Adelaide Football Club for 16 years.
Mr Boulton resigned from the Board on 21 September 2021.
James Davies BCompSc, MBA, GAICD
Non-Executive Director
Board Member since July 2021.
Mr Davies has more than 35 years of experience in investment management
across timberland, economic infrastructure, real estate, private equity and
special situations. Most recently he was Head of Funds Management at New
Forest Asset Management, overseeing $2.5 billion worth of investments in
broad acre real estate, forestry assets and environmental markets.
Prior to that he held Director roles at Hastings Funds Management Limited and
Royal Bank of Scotland’s Strategic Investments Group. Mr Davies has served
on numerous Investment Committees and Boards including as Chairman of
both Timberlink Australia and Tasmanian-based plantation owner Forico.
Mr Davies is Chairman of ASX-listed property investor Eildon Capital (ASX: EDC) and a non-
executive Director of ASX-listed New Energy Solar (ASX: NEW). He is also a member of the Advisory
Board for AGR Partners, a US-based private equity firm focussed on agribusiness.
Other than as disclosed above, in the three years prior to 30 June 2021, Mr Davies held no other
director positions with any other ASX listed companies.
Mr Davies holds a Bachelor of Computer Science from the University of New England, a Masters of
Business Administration from London Business School and is a Graduate of the Australian Institute
of Company Directors.
Mr Davies will be appointed Executive Chairman of the Board immediately after the Annual General
Meeting.
Mitchell Taylor BCom, MAppFin, GAICD
Non-Executive Director
Board Member since July 2021.
Mr Taylor is a representative of Samuel Terry Asset Management Pty Ltd,
which manages the Samuel Terry Absolute Return Active Fund, the largest
shareholder of Kangaroo Island Plantation Timbers. He has more than 10
years of commercial experience in funds management.
Mr Taylor has experience in a variety of commercial transactions and corporate
situations across a range of industries. He holds a Bachelor of Commerce from
the University of Sydney, a Masters of Applied Finance from Macquarie
University and is a Graduate of the Australian Institute of Company Directors.
In the three years before 30 June 2021, Mr Taylor held no director positions with any other ASX
listed companies.
Directors’ Report
P a g e | 5
Company Secretary and Chief Financial Officer
Victoria Allinson (appointed 14 May 2013)
FCCA, AGIA
Ms Allinson is a Fellow of The Association of Certified Chartered Accountants
and a member of the Governance Institute of Australia. She has more than 30
years of accounting and auditing experience, including senior accounting
positions in a number of listed companies and was an audit manager for
Deloitte Touche Tohmatsu. In addition, Ms Allinson has gained professional
experience while living and working in both Australia and the United Kingdom.
Ms Allinson is currently Chief Financial Officer (“CFO”), Company Secretary
and Nominated Advisor (NOMAD) of NSX-listed Asset Resolution Limited
(NSX: ASS), Company Secretary and CFO of ASX-listed Elixir Energy Limited (ASX: EXR) and
Company Secretary of ASX-listed Buddy Technologies Limited (ASX: BUD). Her previous experience
has included being Company Secretary and CFO for a number of ASX listed companies, including:
Marmota Limited, Safety Medical Products Ltd, Centrex Metals Ltd, Adelaide Energy Ltd, Enterprise
Energy NL, and Island Sky Australia Ltd as well as a number of unlisted companies. In her role as
Company Secretary, Ms Allinson has assisted a number of companies to list on the ASX.
Ms Allinson has experience in all sizes of business from sole traders to large companies, in a wide
variety of business sectors. She is based in Adelaide, South Australia.
Interests in the shares and options of the Company and related
bodies corporate
As at 30 June 2021(2) and at the date of this report, the interests of the directors, either directly or
indirectly, in the shares of Kangaroo Island Plantation Timbers Ltd were:
Interest in ordinary shares
Opening
interest at
1 July 2020
Net changes
during the
period
Appointment /
(resignation) of
director
Closing interest
at date of this
report
Paul McKenzie
2,789,860
-
-
2,789,860
Keith Lamb
15,000
7,000
-
22,000
John Sergeant(1)
2,619,970
-
(2,619,970)
-
Shauna Black(2)
421,670
(200,000)
221,670
Gregory Boulton
193,730
-
-
193,730
James Davies(3)
-
-
-
-
Mitchell Taylor(3)(4)
-
-
15,916,041
15,916,041
Total
6,040,230
(193,000)
13,296,071
19,143,301
(1) Resigned on 3 May 2021.
(2) Ms Black held 421,670 shares at 30 June 2021 and sold 200,000 shares on 16 September 2021.
(3) Appointed on 13 July 2021.
(4) Shareholding of Samuel Terry Asset Management Pty Ltd, of which Mr Taylor is a related party.
Interest in Performance Rights
At the 28 October 2020 Annual General Meeting, shareholders approved the issue on 1 July 2021 of
a total of 2,256,896 Performance Rights, that expire on 30 June 2022, under the Group’s Performance
Rights Plan.
All other Performance Rights held by directors during the year expired without vesting during the year.
Individual holding of the Rights issued on 1 July 2021 are as follows:
•
Paul McKenzie
282,112
•
Keith Lamb
1,128,448
•
John Sergeant
lapsed as Mr Sergeant resigned as a director on 3 May 2021.
•
Shauna Black
282,112
Directors’ Report
P a g e | 6
•
Gregory Boulton AM
282,112
These Rights had an expiry date of 30 June 2022. On 13 September 2021, the Group announced
that the Board had determined that the Performance Rights Plan approved by Shareholders on 21
November 2019 be withdrawn. The Performance Rights approved by Shareholders on 28 October
2020 and issued on 1 July 2021 therefore lapsed with immediate effect.
Refer to the Remuneration Report for further information on the directors’ interests in performance
rights.
Dividends
The directors have resolved not to declare a dividend for the year ended 30 June 2021 (2020: Nil).
No dividends were declared or paid during the previous year.
Principal Activities
The principal activity during the year of entities within the consolidated group was forestry.
During 2020-21 there were no significant changes in the nature of activities.
On 11 August 2021, the Group announced that the South Australia Minister for Planning had declined
the development application for the Kangaroo Island Seaport at Smith Bay. The Group announced a
new strategy to remove the tree crop and convert its land to agriculture. This strategy is now the main
focus of the business.
Corporate Information
Corporate Structure
Kangaroo Island Plantation Timbers Ltd is a publicly listed company that is incorporated and
domiciled in Australia. Kangaroo Island Plantation Timbers Ltd has prepared a consolidated financial
report incorporating the entities that it controlled during the financial year, which are outlined in the
following illustration (“Group”):
Kangaroo Island
Plantation Timbers
Ltd
KI Seaport Pty Ltd
KIPT Holdings Pty
Ltd
Kangaroo Island
Plantation
Management
Pty Ltd
RuralAus Finance
Limited
(de-registered 10
July 2019)
Kangaroo Island
Land Assets Ltd
Kangaroo Island
Timbers Pty Ltd
Directors’ Report
P a g e | 7
Employees
At 30 June 2021, the consolidated entity employed 9.8 full time equivalent employees (2020: 8.0) and
1.4 full time equivalent Executive Directors (2020: 1.4).
Operating and financial review
Results of operations
Revenue for the period decreased by $36,000 to $90,000 (2020: $126,000) as a result of decreased
operating lease revenue.
During the period, the change in fair value of biological assets was a decrease of $5,981,000 (2020:
decrease of $109,216,000).
Net comprehensive loss for the period was $28,687,000 (2020: loss of $25,597,000), this is a
$3,090,000 increase in losses which is primarily due to:
2021
Income/
(Expense)
$000’s
2020
Income/
(Expense)
$000’s
Increase/
(decrease)
in profits
$000’s
Insurance recoveries on fire-affected assets
312
68,026
(67,714)
Biological asset of standing timber decrease in fair
value
(5,981)
(109,216)
103,235
Tax benefit primarily relating to derecognition of
deferred tax assets on capital losses in 2021
1,309
14,424
(13,115)
Performance rights expensed but not issued as
conditions not yet met.
(1,572)
(176)
(1,396)
Wharf development costs expensed
(872)
(1,422)
550
Wharf asset costs expensed due to refusal of
development application
(13,242)
-
(13,242)
Forestry expense
(2,554)
(2,623)
69
Forestry expense increase due to commencement
of harvesting
(1,226)
-
(1,226)
Lower borrowing costs due to loan repayment
-
(970)
970
Revaluation of land assets
(2,721)
8,273
(10,994)
Other changes
(2,140)
(1,913)
(227)
Net comprehensive profit
(28,687)
(25,597)
(3,090)
Directors’ Report
P a g e | 8
Performance indicators
2021
$’000
2020
$’000
2019
$’000
2018
$’000
2017
$’000
Revenue from ordinary activities from
continuing operations
90
126
215
230
185
Revenue from ordinary activities from
continuing and discontinued operations
90
126
215
230
185
Profit/(loss) from ordinary activities
(25,966)
(33,870)
247
13,052
36,086
Profit/(loss) from discontinued
operations
-
-
-
-
-
Profit/(loss) attributable to members for
the period
(25,966)
(33,870)
247
13,052
36,086
Other comprehensive income
(2,721)
8,273
-
-
227
Total comprehensive profit/(loss) after tax (28,687)
(25,597)
247
13,052
36,313
Basic earnings per share (cents)
(46.02)
(60.20)
0.47
28
148
Net tangible asset backing per security
(cents)
153
201
246
251
233
Net tangible asset (excluding deferred
tax) backing per security (cents)
155
214
279
289
265
Commentary on results
Agricultural Strategy
On 11 August 2021, the Group announced a strategy to remove the tree crop and convert its land
for more traditional agricultural use. The directors see no prospect of recovering the losses on the
tree-crop and the value of the biological assets has been written down to nil. The Group will continue
to pursue any salvage harvest opportunities, particularly for the softwood plantations, if the
contribution to tree removal and site clean-up presents an attractive risk adjusted return to
shareholders.
As a result of the agricultural strategy:
•
The land assets have been independently valued at $51.4m (June 2020: $59.3 million).
Agricultural (grazing) has been determined as the highest and best use of the land. The
independent valuation includes an appropriate allowance for the estimated cost of reversion.
•
The wharf asset, previously held at historic cost of $18.2 million, has been impaired to net
realisable value, based on an independent valuation of $5.0 million. The wharf asset is a
current asset held for sale.
•
The biological assets, previously valued at $5.9 million, have been determined to have a fair
value of nil.
The new strategy has resulted in several material changes to company activities after the end of the
2021 financial year, which are reported in Significant events after balance date below.
On 31 August 2021 the Group posted a Request for Proposals – Agriculture Opportunity, for
interested parties to register their interest for the following work:
•
clearing 14,500 hectares of timberlands;
•
disposal or removal of timber and biomass;
•
site preparation including pasture, water infrastructure and fencing; and
•
development and / or operation of agricultural operations.
The Request for Proposals closed on 17 September 2021.
Directors’ Report
P a g e | 9
Land Revaluation
The 30 June 2021 independent valuation by JLL Valuation Advisory – Agribusiness, of land and
buildings owned by the Group amounts to $51.4 million.
The fair value valuation was prepared using a Summation Approach whereby the land value has been
assessed as a rate per hectare which is summated with the added value of any structural
improvement. The independent expert has assessed the rate per hectare for the productive
component of the land (exclusive of remnant vegetation and water bodies) as in the range of $3,500
per hectare to $4,500 per hectare. The land’s location, rainfall, physical attributes, location of
amenities and improvements all influence where in this range a particular parcel of land is valued.
An appropriate allowance for the cost of rehabilitating the forestry estate for agricultural use has been
included in the independent valuation.
Insurance payments
During the year KPT received $32.4 million in insurance proceeds from its tree crop and other
insurance policies for the damage caused during the 2019-20 wildfires. KPT’s insurer has retained
$5 million in respect of KPT’s insurance claim, of which $1 million related to replanting, with the
remainder against the potential for KPT to obtain a positive margin on salvage timber. The directors
see no prospect of a positive margin on the salvaged timber and are seeking payment of the balance
of the insurance claim.
The remaining $4 million insurance claim (plus interest) has not been recognised and is treated as a
contingent asset at 30 June 2021.
Corporate Operations
Share issues
On 12 August 2020, the Group completed an unmarketable parcel buy-back and 49,273 shares were
bought back at $0.85. No shareholder approval was required due to the size of this buy-back.
A further 65,844 shares were issued during the year for services received, including 53,678 shares
to Approvals Manager, Peter Lockett to settle $50,000 of consulting fees and 2,607 shares to a
company controlled by Company Secretary, Victoria Allinson to settle $3,000 of professional services
fees. In addition, 8,690 shares valued at $10,000 were issued to other personnel under the
Company’s Executive and Employee Share Plan.
As at 30 June 2021 there were 56,480,359 ordinary Shares on issue and 1,974,784 Performance
Rights.
Changes to Board and Management
The Group recorded one change to the Board during the year. On 3 May 2021, Mr John Sergeant
resigned as a director. Mr Sergeant’s resignation was part of his long-term plans for his involvement
in the Group.
Subsequent to year end, on 13 July 2021, the Group appointed two new non-executive directors, Mr
James Davies and Mr Mitchell Taylor.
Mr Gregory Boulton AM resigned as a director on 21 September 2021.
Significant changes in the state of affairs
The significant changes affecting the Group and its subsidiaries are set out in the Operating and
Financial Overview.
There have been no other significant changes in the state of affairs of the Group.
Significant events after balance date
On 13 July 2021, the Group appointed two new non-executive directors, Mr James Davies and Mr
Mitchell Taylor.
Directors’ Report
P a g e | 10
On 9 August 2021, the South Australian Minister for Planning and Local Government declined the
Group’s application to build a deep-water port facility at Smith Bay.
On 11 August 2021, the Group announced a strategy to remove the tree crop and convert its land for
more traditional agricultural use. The directors see no prospect of recovering the losses on the tree-
crop and the value of the biological assets has been written down to nil. The Group will continue to
pursue any salvage harvest opportunities, particularly for the softwood plantations, if the contribution
to tree removal and site clean-up presents an attractive risk adjusted return to shareholders.
As a result of the agricultural strategy:
•
The wharf asset, previously held at historic cost of $18.2 million, has been revalued to net
realisable value, based on an independent valuation of $5.0 million. The wharf asset is now
a current asset held for sale.
•
The biological assets, previously valued at $5.9 million, have been determined to have a fair
value of nil.
•
The land assets have been independently valued at $51.4m. Agricultural (grazing) has been
determined as the highest and best use of the land. The independent valuation includes an
appropriate allowance for the estimated cost of reversion.
These valuations have been reflected in the financial statements for the year ended 30 June 2021.
During August 2021, in response to the change in strategy, Group Executives involved with the
approvals and construction of the proposed seaport at Smith Bay, Mr Lockett and Mr Braggs, together
with Mr Heathcote who oversaw the forestry operations (including harvesting) ceased to be employed
by the Company.
On 11 August 2021, the Group announced that Managing Director Keith Lamb will retire from the
Company Board, effective at the conclusion of the 2021 Annual General Meeting. James Davies will
be appointed as Executive Chairman, effective at the conclusion of the 2021 Annual General Meeting.
Paul McKenzie will remain on the Board as a Non-Executive Director.
On 12 August 2021, the Group issued an on-market share buy-back notification for up to 10% of the
Company’s issued share capital, being 5,648,035 shares, under the ASX 10/12 rule. The buy-back
commenced on 27 August 2021 and closed on 20 September 2021. 5,647,022 shares were bought
back for $6,710,343; the shares had not been cancelled at the date of this report.
On 12 August, the Group issued a termination notice to property manager PF Olsen due to the change
in business circumstances. The termination notice is subject to a (maximum) six-month work-out
period.
On 27 August 2021, the Group issued redundancies to eight island employees, as the forestry work
was discontinued.
On 31 August 2021 the salvage of softwood (pine) was discontinued and a variation issued to the
harvest contractor to commence felling to waste certain areas of the hardwood estate that had
received fire in 2018 and in 2020.
On 13 September 2021, the Group announced that the Board had determined that the Performance
Rights Plan approved by Shareholders on 21 November 2019 be withdrawn. The Performance Rights
approved by Shareholders on 28 October 2020 and issued on 1 July 2021 therefore lapsed with
immediate effect. A new Performance Rights Plan is being proposed by the Group and will be put to
Shareholders for approval at the 2021 Annual General Meeting.
On 14 September 2021 the Group announced:
•
the resignation of Mr Gregory Boulton AM as a director, effective 21 September 2021; and
•
the resignation of Ms Shauna Black as an Executive Director, effective 30 September 2021,
and that Ms Black will not be offering herself for re-election at the 2021 Annual General
Meeting and will therefore cease to be a director at that date.
There have been no other significant events after balance date.
Directors’ Report
P a g e | 11
Likely developments
Refer to the commentary on results.
Environmental regulation and performance
The Group’s operations are subject to environmental regulations, pursuant to the conditions of tree
farm planning permissions, and the requirements of planning and regulatory approvals of local
government. The Group also operates under environmental legal and licence requirements governing
the remaining plant at the Timber Creek sawmill. To the best of the directors’ knowledge, the Group
has complied with all environmental regulations relating to its activities during the year.
Indemnification and insurance of directors and officers
During the financial year the controlled entity, on behalf of the Group, paid $19,274 (2020: $19,238)
insurance premiums in respect of directors' and officers' insurance against liability, except wilful
breach of duty. In accordance with the insurance policy, further details of the nature of the liabilities
insured against and the amount of the premium are prohibited from being disclosed.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is
a party, for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
Directors’ meetings
The number of meetings of directors held during the year and the number of meetings attended by
each director were as follows:
Number of
Directors
Meetings held
while in office
Directors
Meetings
attended
Number of
Audit & Risk
Meetings held
while in office
Audit & Risk
Meetings
attended
Paul McKenzie
15
15
3
3
Keith Lamb(1)
15
15
-
-
John Sergeant(2)
10
10
3
3
Shauna Black(1)
15
14
-
-
Gregory Boulton AM(3)
15
15
3
3
(1) Executive Directors attend Audit and Risk Committee meetings by invitation.
(2) Mr Sergeant resigned on 3 May 2021.
(3) Mr Boulton was appointed as Chairman of the Audit and Risk Committee on 28 February 2017.
Committee membership
As at the date of this report, the Company had an Audit and Risk Committee of the Board, of which
Mr Boulton was the Independent Chair. The directors consider that the committee is adequate for the
Company’s current circumstances.
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest
$1,000 (where rounding is applicable) under the option available to the Group under ASIC Class
Order 2016/191. The Group is an entity to which the Class Order applies.
Directors’ Report
P a g e | 12
Auditor independence and non-audit services
The directors have received the auditor’s independence declaration, which is included on page 24 of
this report. The declaration forms part of the Directors’ report.
No director of the Group is currently, or was formerly, a partner of Grant Thornton Audit Pty Ltd.
Auditor
Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations
Act 2001.
Audit Services
The directors of Kangaroo Island Plantation Timbers Limited resolved that Iain Kemp’s appointment
as auditor be extended from 5 to 7 years for the audit commencing 1 July 2020, in order to maintain
audit quality. Iain Kemp has confirmed that this extension would not give rise to a conflict of interest
as defined in the Corporations Act and the directors agree with this statement.
Non-Audit Services
Grant Thornton Audit Pty Ltd were appointed as auditors on 28 August 2013 and the appointment
was confirmed by shareholders at a General Meeting held on 28 August 2013.
During the year, Grant Thornton, the Group’s auditors, performed certain other services in addition
to their statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in
accordance with written advice provided by resolution of the Audit and Risk Committee, is satisfied
that the provision of those non-audit services during the year is compatible with, and did not
compromise, the auditor independence requirements of the Corporations Act 2001 for the following
reasons:
•
All non-audit services were subject to the corporate governance procedures adopted by the
Group and have been reviewed by the Audit and Risk Committee to ensure they do not impact
upon the impartiality and objectivity of the auditor; and
•
The non-audit services do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they
did not involve reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing
risks and rewards.
See Note 20 for amounts received or due and receivable by Grant Thornton Audit Pty Ltd.
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 the 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.
For the purpose of this report, the term “executive” encompasses the Managing Director, other
Executive Directors and the Executive positions listed in the table below.
Directors’ Report
P a g e | 13
Key management personnel
Key management personnel are as follows:
Directors
Position
Paul McKenzie
Chairman - Non-Executive Director
Keith Lamb
Managing Director
John Sergeant (resigned 3 May 2021)
Non-Executive Director
Shauna Black
Executive Director
Gregory Boulton AM (resigned 21 September
2021)
Independent Non-Executive Director
Executives
Position
Victoria Allinson
Company Secretary Chief Financial Officer
Peter Lockett
Approvals Manager
Luke Tregurtha
Manager of Business Development
Alan Braggs
KI Seaport Manager
Rob Heathcote
Operations Manager
On 14 July 2021, the Group appointed two new Non-Executive Directors, Mr James Davies and Mr
Mitchell Taylor.
On 11 August 2021, the Group announced that Managing Director Keith Lamb will retire from the
Company Board, effective at the conclusion of the 2021 Annual General Meeting.
On 14 September 2021 the Group announced the resignation of Ms Shauna Black as an Executive
Director, effective 30 September 2021, and that Ms Black will not be offering herself for re-election at
the 2021 Annual General Meeting and will therefore cease to be a director at that date.
Subsequent to the reporting date, Mr Lockett, Mr Braggs and Mr Heathcote ceased to be executives
of the Group.
There have been no other changes to Key Management Personnel after the reporting date and before
the date the financial accounts were authorised for issue.
Remuneration committee
In view of the size of the parent entity, the directors have considered that establishing a nomination
and remuneration committee would contribute little to its effective management and accordingly all
directors participate in decisions regarding the nomination and election of new Board members and
the appointment of senior management.
The Board of Directors of the Group is responsible for determining and reviewing remuneration
arrangements for directors and executives.
The Board assesses the appropriateness of the nature and amount of remuneration of 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, high performing director
and executive team.
Remuneration is usually reviewed on an annual basis, taking into consideration both qualitative and
quantitative performance indicators, with reference to industry benchmarks.
A review of remuneration levels was not conducted during the year, as the Board remained of the
opinion that total remuneration should only be changed once the Group’s strategic plans were further
developed. It is noted that the Remuneration Report for the year ended 30 June 2020 received 98.7%
of ‘yes’ proxy votes (1999: 99.5%) and was adopted via a poll with 99.6% in favour (1999: 99.5%).
The Company received no specific feedback on its Remuneration Report at the last Annual General
Meeting.
The Board did not meet during the year to consider specific remuneration matters; the Board did not
use the professional services of Remuneration Consultants during the year.
Directors’ Report
P a g e | 14
Remuneration philosophy and structure
The Board has structured remuneration packages for its executives and directors in order to attract
and retain people with the necessary qualifications, skills and experience to assist the Group in
achieving its desired results.
In addition to cash remuneration, the Board utilises Performance Rights with vesting conditions tied
to Group share price performance to incentivise directors and align a portion of their remuneration
with the objective of increasing shareholder wealth. The Group also has an Executive and Employee
Share Plan, whereby shares can be issued to employees as a means of aligning a component of
employee remuneration with the Group’s share price performance.
the 2017 figures have been adjusted for the 10:1 share split in that year:
Year
Net tangible assets
per share
Earnings
per share
Share price
at 30 June
With the exception of awards of Performance Rights, there is not a direct correlation between the
results of key performance measures set out above and the remuneration awarded.
Non-executive director remuneration
Objective
Structure
The total amount paid to non-executive directors is determined by the Board from time to time for
presentation to and resolution by shareholders at the Annual General Meeting. The current maximum
aggregate remuneration paid in cash to non-executive directors is fixed at $400,000 per year.
Non-executive directors are paid a fixed amount per year. They are not eligible for any additional
payments, other than reimbursement of expenses incurred on behalf of the Group, and excluding the
value of any Performance Rights issued.
In the year ended 30 June 2021:
•
Non-Executive Chairman’s fees were $100,000 (2020: $100,000);
•
Other Non-Executive Director fees were $75,000 (2020: $75,000) for each director; and
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to
shareholders.
The overall performance of the directors and the executives of the Group is considered against:
•
Timely production of Group accounts and records;
•
Maintenance/improvement of the Net Tangible Assets of the Group;
•
Control of costs;
•
Investor relations;
•
Assessment of new opportunities; and
•
Employee performance.
Performance is reviewed on an annual basis; the last review was undertaken in September 2020.
Key performance indicators
The following table shows the results of key performance indicators of the Group for the past 5 years;
2021
$1.53
($0.4602)
$1.08
2020
$2.01
($0.6020)
$0.80
2019
$2.46
$0.0047
$2.25
2018
$2.51
$0.2800
$2.15
2017
$2.33
$1.4800
$2.03
Directors’ Report
P a g e | 15
•
The Non-Executive Chairman of the Audit and Risk Committee received an additional
$10,000 fee in respect of these extra duties (2020: $10,000).
The directors have signed contracts setting out their obligations and remuneration.
Director performance reviews are in the form of informal annual self-review and discussion with the
other directors led by the Chairman.
Executive remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities with the Group, so as to:
•
Align the interest of executives with those of shareholders; and
•
Ensure total remuneration is competitive by market standards.
Structure
The Group reviews its staffing requirements on an ongoing basis. At 30 June 2021, there were 15
(2020: 17) employees (part time and full time), including the Executive Directors. 11 (2020: 12)
employees are based on Kangaroo Island, including one Executive Director.
The Company’s Company Secretary and CFO Victoria Allinson, Approvals Manager Peter Lockett,
KI Seaport Manager Alan Braggs and Operations Manager Rob Heathcote provide their services as
contractors:
•
Allinson Accounting Solutions Pty Ltd is engaged to provide the Company’s financial,
administrative and company secretarial functions;
•
Seaview Corporate Services Pty Ltd is engaged to provide the approval managerial services of
Peter Lockett;
•
Infrastructure Consulting Pty Ltd is engaged to provide the KI Seaport management services of
Alan Braggs; and
•
Heathcote Resources Pty Ltd is engaged to provide the operations management services of Rob
Heathcote.
Executive Directors have signed contracts setting out their obligations and remuneration. In addition,
Executive Directors are entitled to Performance Rights under an approved Performance Rights Plan.
There are no termination obligations, other than statutory entitlements, with respect to any of the
executives. The total amount paid to executives is determined by the Board on an annual basis as
part of the annual performance review of executives conducted by the Board based on KPIs set by
the Board each year. The amount of salary and fees and the payment of cash bonuses, if any, are at
the Board’s ultimate discretion.
Total Remuneration – Key Management Personnel
Remuneration is reviewed by the Board and is set at around the mid-point for professional personnel
as measured by knowledge of the members of the Board.
Details of the nature and amount of each element of the remuneration for each member of the KMP
of the Group are shown in the table below:
Directors’ Report
P a g e | 16
Short term
benefits
Post
employ-
ment
benefits
Long
term
benefits
Share-based
payment
Year
Salary &
fees
$
Annual
leave
provision
$
Super
$
Long
service
leave
$
Performance
Rights
Plan(12)
$
Shares
$
Total
$
P McKenzie(1)
2021
100,000
-
-
-
201,473
-
301,473
2020
100,000
-
-
-
20,888
-
120,888
G Boulton(2)
2021
85,000
-
-
-
201,473
-
286,473
2020
85,000
-
-
-
20,888
-
105,888
J Sergeant(3)
2021
57,630
-
5,475
-
161,984
-
225,089
2020
17,123
-
1,627
-
13,002
-
31,752
Total NED
2021
242,630
-
5,475
-
564,930
-
813,035
2020
202,123
-
1,627
-
54,778
-
258,528
K Lamb(4)
2021
319,635
5,021
30,365
5,159
805,890
- 1,166,070
2020
319,635
22,440
30,365
2,843
31,714
-
406,997
J Sergeant(3)
2021
-
-
-
-
-
-
-
2020
152,435
26,575
27,565
-
28,774
-
235,349
S Black(5)
2021
150,000
13,295
-
3,947
201,473
-
368,715
2020
134,763
8,010
-
6,627
36,745
-
186,145
G Holdaway(6)
2021
-
-
-
-
-
-
-
2020
160,609
12,820
10,934
-
23,681
-
208,044
Total ED
2021
469,635
18,316
30,365
9,106
1,007,363
- 1,534,785
2020
767,442
69,845
68,864
9,470
120,914
- 1,036,535
L Tregurtha(7)
2021
146,986
4,309
13,014
669
-
1,000
165,978
2020
6,227
-
591
12
-
1,000
7,830
A Braggs(8)
2021
280,614
-
-
-
-
-
280,614
2020
19,500
-
-
-
-
-
19,500
R Heathcote(9)
2021
150,455
-
-
-
-
-
150,455
2020
48,122
-
-
-
-
-
48,122
P Lockett(10)
2021
204,540
-
-
-
-
50,000
254,540
2020
200,000
-
-
-
-
50,000
250,000
V Allinson(11)
2021
369,644
-
-
-
-
3,000
372,644
2020
266,901
-
-
-
-
5,000
271,901
Total Other KMP
2021 1,152,239
4,309
13,014
669
-
54,000 1,224,231
2020
540,750
-
591
12
-
56,000
597,353
TOTAL
2021 1,864,504
22,625
48,854
9,775
1,572,293
54,000 3,572,051
2020 1,510,315
69,845
71,082
9,482
175,692
56,000 1,892,416
There were no cash bonuses or other non-monetary benefits during the current or prior year.
Notes:
(1)
Mr McKenzie’s director’s fees consisted of a Chairman’s fee of $100,000 (2020: $100,000).
(2)
Mr Boulton’s director’s fees consisted of a Director’s fee of $75,000 (2020: $75,000) and an
Audit and Risk Committee Chairman fee of $10,000 (2020: $10,000).
(3)
Mr Sergeant was an Executive director until 31 March 2020 and was appointed as a Non-
Executive director on 1 April 2020. Mr Sergeant’s directors fees to the date of his resignation on
3 May 2021 consisted of a Directors fee (inclusive of superannuation) of $63,105 (2020:
$75,000) and an Executive fee (inclusive of superannuation) of $nil (2020: $123,750).
Directors’ Report
P a g e | 17
(4)
Mr Lamb‘s directors fees consisted of a Directors fee (inclusive of superannuation) of $75,000
(2020: $75,000) and an Executive fee (inclusive of superannuation) of $275,000 (2020:
$275,000)
(5)
Ms Black’s director’s fees consisted of a Director’s fee of $75,000 (2020: $75,000) and an
Executive fee of $75,000 (2020: $59,763)
(6)
In the prior year, Mr Holdaway’s director’s fees to the date of his resignation on 6 May 2020
consisted of a Director’s fee of $63,668 and an Executive fee of $107,875.
(7)
Mr Tregurtha is the Manager of Business Development and was appointed on 12 June 2020.
During the year, $150,000 (2020: $6,818) was paid in salary (inclusive of superannuation) to
Mr Tregurtha.
(8)
Mr Braggs was appointed as KI Seaport Manager on 10 June 2020. During the year $280,614
(2020: $19,500) of professional services were invoiced by Infrastructure Consulting Pty Ltd, of
which Mr Braggs has effective control.
(9)
Mr Heathcote was appointed as Operations Manager on 6 May 2020. During the year $150,455
(2020: $48,122) of professional services were invoiced by Heathcote Resources Pty Ltd, of
which Mr Heathcote has effective control. At 30 June 2021 $14,545 (2020: $8,852) of fees
were payable.
(10) Mr Lockett was appointed as Approvals Manager on 8 May 2017. During the year $254,540
(2020: $250,000) of professional services were invoiced by Seaview Corporate Services Pty
Ltd, of which Mr Lockett has effective control. During the year $50,000 (2020: $50,000) of these
fees were paid in ordinary shares. At 30 June 2021 $29,167 (2020: $12,500) of fees were
payable.
(11) Ms Allinson was appointed as CFO and Company Secretary on 14 May 2013. During the year,
fees for professional accounting, administration and company secretarial services, as well as
fees for the provision of serviced office space of $372,644 (2020: $271,901) were invoiced by
Allinson Accounting Solutions Pty Ltd, of which Ms Allinson has effective control. $3,000 of
these fees were paid in shares (2020: $5,000), of which $1,000 of shares were issued to Ms
Allinson and $2,000 to her staff. At 30 June 2021, $54,894 (2020: $37,356) of fees were
payable.
(12) During the year, the Board issued Performance Rights to directors on 28 October 2020 (expired
on 30 June 2021), and on 30 June 2021 following shareholder approval in both cases. The
Rights were valued based on AASB 2 Share-based Payment. Further details are set out below
and in Note 24.
No options were granted as part of remuneration during the year.
Performance Rights
The value of performance rights issued during the current and prior years which has been recognised
as Director Remuneration is shown below, organised by the issue date of the relevant batch of
Performance Rights.
Directors’ Report
P a g e | 18
Share based Remuneration - Performance Rights
Year
Issued
1 July
2021
$
Issued
30 June
2020
$
Issued 21
November
2019
$
Issued 16
October
2018
$
Total
Performance
Rights
$
Non-Executive Directors
P McKenzie
2021
95,430
106,043
-
-
201,473
2020
-
-
15,857
5,031
20,888
G Boulton
2021
95,430
106,043
-
-
201,473
2020
-
-
15,857
5,031
20,888
J Sergeant(1)
2021
72,838
89,146
-
-
161,984
2020
-
-
13,002
-
13,002
Executive Directors
K Lamb
2021
381,720
424,170
-
-
805,890
2020
-
-
31,714
-
31,714
J Sergeant(1)
2021
-
-
-
-
-
2020
-
-
18,712
10,062
28,774
S Black
2021
95,430
106,043
-
-
201,473
2020
-
-
31,714
5,031
36,745
G Holdaway(2)
2021
-
-
-
-
-
2020
-
-
13,620
10,062
23,681
Total
2021
740,848
831,445
-
-
1,572,293
2020
-
-
140,746
35,216
175,692
(1) Mr Sergeant was appointed as a non-executive director on 1 April 2020. He had served as an Executive
Director from 1 January 2015 to 31 March 2020 and resigned from the Company on 3 May 2021.
(2) Mr Holdaway resigned on 6 May 2020.
Performance Rights Plan
The Performance Rights Plan (“Plan”) was last approved by Shareholders on 21 November 2019.
Under the Plan, the Board can issue Performance Rights to Executive and the Non-Executive
Directors as remuneration for additional duties performed and to incentivise them to align their
interests more closely with those of Shareholders.
If the performance conditions and any other vesting conditions are met, an equivalent number of
Shares will be issued that rank equally with all other existing Shares in all respects.
A Plan participant must not dispose of any Shares acquired under the Plan before the end of the
restriction period (if any), which are subject to the Plan rules and the terms of the specific offer from
time to time.
The Directors have used a trinomial lattice model to value the Performance Rights; refer to Note 24
for further details.
All Performance Rights expire on the earlier of twelve months after issue or if they are replaced by
new Performance Rights.
On 13 September 2021, the Group announced that Board had determined that the Performance
Rights Plan approved by Shareholders on 21 November 2019 be withdrawn. A new Performance
Rights Plan is being proposed by the Group and will be put to Shareholders for approval at the 2021
Annual General Meeting.
Directors’ Report
P a g e | 19
Performance Rights approved on 28 October 2020 and issued on 1 July 2021
At the 28 October 2020 General Meeting, shareholders approved the issue on 1 July 2021 of a total
of 2,256,896 Performance Rights, with an expiry date of 30 June 2022.
These Performance Rights replace the Performance Rights issued on 30 June 2020 that expired on
29 June 2021.
Keith Lamb received 50% of the total Rights pool each, with John Sergeant, Shauna Black, Paul
McKenzie and Greg Boulton receiving 12.5% each. The Performance Rights are triggered by meeting
the following performance vesting conditions:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000
Shares Traded
VWAP
Keith Lamb
rights
John Sergeant
Shauna Black
Paul McKenzie
Greg Boulton
rights (each)
Total
rights
Total
valuation
$
$1.31 or above
376,149
94,037
752,297
690,608
$1.57 or above
501,533
125,383
1,003,065
832,545
$1.83 or above
250,766
62,692
501,534
377,655
Total
1,128,448
1,128,448
2,256,896
1,900,808
In accordance with AASB 2 Share-Based Payment, the value of these Rights must be recognised
through profit or loss. An expense of $740,848 was recognised in the year ended 30 June 2021,
which is included in directors’ remuneration.
These Rights were resolved by the Directors to have expired unvested on 13 September 2021.
Performance Rights approved and issued on 30 June 2020
Owing to the impact of the wildfires on Kangaroo Island during the 2019/20 financial year on the
Group’s timber plantation assets and, consequently on the Group’s share price, the directors resolved
that the terms of the performance rights issued on 21 November 2019 (discussed below) were no
longer appropriate.
On 30 June 2020, shareholders approved the issue of a total of 2,256,896 Performance Rights, with
an expiry date of 29 June 2021.
Shareholders also approved the early expiry on 30 June 2020 of the 21 November 2019 performance
rights (due to expire 19 November 2020).
Keith Lamb was allocated 50% of the total Rights pool, with the remaining four directors, John
Sergeant, Shauna Black, Paul McKenzie and Gregory Boulton, each allocated 12.5% of the pool.
The 30 June 2020 Performance Rights were issued in the three tranches with different share price
performance conditions as shown below:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000
Shares Traded
VWAP
Keith Lamb
rights
John Sergeant
Shauna Black
Paul McKenzie
Greg Boulton
rights (each)
Total
rights
Total
valuation
$
$1.21 or above
376,149
94,037
752,297
340,791
$1.57 or above
501,533
125,383
1,003,065
362,106
$1.83 or above
250,766
62,692
501,534
145,445
Total
1,128,448
1,128,448
2,256,896
848,342
These Rights were resolved by the Directors to have expired unvested on 29 June 2021.
Directors’ Report
P a g e | 20
In accordance with AASB 2 Share-Based Payment, the value of these Rights must nonetheless be
recognised through profit or loss. An expense of $831,445 was recognised in the year ended 30 June
2021, which is included in directors’ remuneration.
Performance Rights approved and issued on 21 November 2019
At the 21 November 2019 Annual General Meeting, shareholders approved the issue of a total of
1,285,700 Performance Rights, with an expiry date of 19 November 2020.
These rights replaced the performance rights that had been issued on 16 October 2018 and which
expired on 15 October 2019.
Keith Lamb, John Sergeant, Shauna Black and Graham Holdaway each received 20% of the total
Rights pool, with Paul McKenzie and Gregory Boulton each receiving 10%.
The Performance Rights would be triggered by meeting the following performance vesting conditions:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000
Shares Traded
VWAP
John Sergeant
Graham Holdaway
rights (each)
Paul McKenzie
Greg Boulton
Shauna Black
rights (each)
Total
rights
Total
valuation
$
$3.50 or above
107,140
53,570
535,700
118,925
$4.25 or above
85,720
42,860
428,600
47,575
$5.00 or above
64,280
32,140
321,400
-
Total
257,140
128,570
1,285,700
166,500
These rights were resolved by the Directors to have expired unvested on 30 June 2020.
In accordance with AASB 2 Share-Based Payment, the value of these Rights must nonetheless be
recognised through profit or loss. An expense of $140,476 was recognised in the year ended 30 June
2020, which is included in directors’ remuneration.
Performance Rights approved and issued on 16 October 2018
At the 16 October 2016 Annual General Meeting, shareholders approved the issue of a total of
899,990 Performance Rights, ‘with an expiry date of 15 October 2019.
These rights replaced the performance rights that had been issued on 10 November 2017 and which
expired on 9 November 2018.
John Sergeant, and Graham Holdaway each received 28.6% of the total Rights pool, with Paul
McKenzie, Gregory Boulton and Shauna Black each receiving 14.3%.
The Performance Rights would be triggered by meeting the following performance vesting conditions:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000
Shares Traded
VWAP
John Sergeant
Graham Holdaway
rights (each)
Paul McKenzie
Greg Boulton
Shauna Black
rights (each)
Total
rights
Total
valuation
$
$3.50 or above
107,140
53,570
374,990
130,684
$4.25 or above
85,720
42,860
300,020
12,300
$5.00 or above
64,280
32,140
224,980
4,612
Total
257,140
128,570
899,990
147,596
These rights expired unvested on 15 October 2019.
In accordance with AASB 2 Share-Based Payment, the value of these Rights must nonetheless be
recognised through profit or loss. An expense of $35,216 was recognised through profit or loss in the
year ended 30 June 2020 with respect to these rights, which is included in directors’ remuneration.
Directors’ Report
P a g e | 21
Shareholdings of key management personnel
Opening
interest at
1 July
2020
Net changes
during the
period
Issued in
lieu of fees
Closing
interest at
30 June
2021
Directors
Paul McKenzie (1)
2,789,860
-
-
2,789,860
Keith Lamb (2)
15,000
7,000
-
22,000
John Sergeant (3)
2,619,970
(2,619,970)
-
-
Shauna Black (4)
421,670
-
-
421,670
Gregory Boulton AM (5)
193,730
-
-
193,730
Executives
Luke Tregurtha(6)
1,162
9,931
-
11,093
Alan Braggs
-
-
-
-
Rob Heathcote
-
-
-
-
Peter Lockett (7)
100,445
(21,970)
53,678
132,153
Victoria Allinson (8)
29,116
-
869
29,985
Total
6,170,953
(2,625,009)
54,547
3,600,491
(1) Mr McKenzie’s shares comprise:
a. 2,132,500 (2020: 2,132,500) held by Aminac Pty Ltd ATF Aminac Superfund, of which
Mr McKenzie is the Managing Director; and
b. 657,360 (2020: 657,360) held by Alke Pty Ltd ATF The McKenzie Family Trust No 2, of
which Mr McKenzie is the Managing Director.
(2) Mr Lamb’s shares are held directly.
(3) On 3 May 2021, the date of his resignation, Mr Sergeant’s shares comprised:
a. 614,759 (2020: 1,042,759) held by Phalaenopsis Pty Ltd ATF the Sergeant Family Trust
of which Mr Sergeant has effective control; and
b. 2,005,211 (2020: 1,577,211) held by the Sergeant Family Superannuation Fund, of which
Mr Sergeant has effective control.
c. Mr Sergeant is also a unitholder in the Samuel Terry Absolute Return Fund, a Managed
Fund which is a substantial shareholder in the Company. Mr Sergeant has no influence
on the acquisition, disposal or voting of the shares held on behalf of Samuel Terry
Absolute Return Fund.
d. Mr Sergeant resigned as a director on 3 May 2021.
(4) Ms Black’s shares comprise:
a. 66,670 (2020: 66,670) held directly; and
b. 355,000 (2020: 355,000) held by Black Stump Regional Pty Ltd ATF the Taybric Family
Trust, of which Ms Black has effective control.
Subsequent to year end, on 16 September 2021, Ms Black sold 200,000 shares held by Black
Stump Regional Pty Ltd ATF the Taybric Family Trust.
(5) Mr Boulton’s 193,730 shares (2020: 193,730) are held by G Boulton Pty Ltd ATF the Greg
Boulton Family Superannuation Fund.
(6) Mr Tregurtha’s shares are held directly.
(7) Mr Lockett’s Shares are held by the Seaview Superannuation Fund, of which Mr Lockett has
effective control.
Directors’ Report
P a g e | 22
(8) Ms Allinson’s shares comprise:
a. 24,978 held by Allinson Accounting Solutions Pty Ltd (2020: nil);
b. 2,031 (2020: 26,140) held by AZV Pty Ltd ATF AZV Superannuation Fun of which she
has effective control; and
c. 2,976 (2020: 2,976) held directly.
Other Rights and Option holdings of key management personnel
The Group does not have any share options on issue. Shown below are the holdings of KMP in
Performance Rights.
Performance rights
Opening
interest at
1 July 2020
Performance
rights granted as
compensation
Performance
rights lapsed
Performance
rights held at
the end of the
reporting
period
30 June 2021
Non-Executive Directors
Paul McKenzie
282,112
282,112
(282,112)
282,112
Gregory Boulton AM
282,112
282,112
(282,112)
282,112
John Sergeant(1)
282,112
282,112
(564,224)
-
Executive Directors
Keith Lamb
1,128,448
1,128,448
(1,128,448)
1,128,448
Shauna Black
282,112
282,112
(282,112)
282,112
Total
2,256,896
2,256,896
(2,539,008)
1,974,784
(1) Mr Sergeant resigned on 3 May 2021.
At the 28 October 2020 General Meeting, shareholders approved the issue on 1 July 2021 of a total
of 2,256,896 Performance Rights. These Performance Rights have been included in the column
“Performance rights granted as compensation” notwithstanding that they were not actually issued
until 1 July 2021.
Note that Mr Sergeant resigned on 3 May 2021 and his 282,112 28 October 2020 / 1 July 2021
Performance Rights lapsed without ever being issued. The lapse of these Performance Rights has
been included in the “Performance rights lapsed” column.
The Performance Rights approved and issued on 30 June 2020 expired unvested on 29 June 2021.
These Performance Rights have been included in the “Performance rights lapsed” column.
On 13 September 2021, the Group announced that the Board had determined that the Performance
Rights Plan approved by Shareholders on 21 November 2019 be withdrawn. The Performance Rights
approved by Shareholders on 28 October 2020 and issued on 1 July 2021 therefore lapsed with
immediate effect. A new Performance Rights Plan is being proposed by the Group and will be put to
Shareholders for approval at the 2021 Annual General Meeting.
Directors’ Report
P a g e | 23
Other Related party transactions
Gosse East plantation
Consolidated
2021
$
2020
$
Director’s transaction
Operating lease income
(11,885)
11,885
Operating lease income relates to a lease to a former director, Mr Graham Holdaway. Mr Holdaway
resigned from the Board on 6 May 2020.
Mr Holdaway leased a property of 187.60 hectares, known as “Gosse East”, from the Group. The
lease commenced on 30 June 1999, for a term of 25 years.
Owing to the impacts of wildfires, the Group forgave lease payments relating to the period following
the fires. The contractual annual rental for year ended 30 June 2020 was $25,144, of which $13,259
was forgiven and $11,885 was unpaid at 30 June 2020.
The lease over Gosse East was terminated on 17 December 2020. No rental was charged for the
year ended 30 June 2021 and the $11,885 owed at 30 June 2020 was forgiven.
The Group assumed ownership of all trees and forest produce at Gosse East and released Mr
Holdaway from the obligation to clear and remove the plantation. The biological assets at Gosse East
have been valued at zero in the Group’s accounts.
Adelaide Head Office
The Group entered into a license to occupy serviced office space with Allinson Accounting Solutions,
a company controlled by the Company Secretary, Ms Victoria Allinson. The licence expires on 12
July 2022 and a commitment of $24,773 is disclosed in note 25 to the financial statements.
End of Remuneration Report
Signed in accordance with a resolution of the directors
Paul McKenzie
Chairman
Dated: Dated this 21st day of September 2021
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.
www.grantthornton.com.au
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Kangaroo Island Plantation Timbers Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Kangaroo
Island Plantation Timbers Limited for the year ended 30 June 2021, 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
I S Kemp
Partner – Audit & Assurance
Adelaide, 21 September 2021
P a g e | 25
Corporate Governance Statement
Kangaroo Island Plantation Timbers Ltd (“Company”) and the Board of Directors are responsible for
the Corporate Governance of the Group and are committed to achieving the highest standard of
Corporate Governance, business integrity and professionalism with due regard to the interests of
all stakeholders. The Board guides and monitors the business and affairs of the Group on behalf
of the shareholders by whom they are elected and to whom they are accountable.
As such, the Company has adopted the fourth edition of the Corporate Governance Principles and
Recommendations which was released by the ASX Corporate Governance Council on 27 February
2019 and is effective for financial years beginning on or after 1 July 2020.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2021 was
approved by the Board on 21 September 2021. The Corporate Governance Statement is available
at www.kipt.com.au.
P a g e | 26
Financial Report
Contents
Page
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.... 27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................. 28
CONSOLIDATED STATEMENT OF CASH FLOWS................................................................................ 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................... 30
1.
CORPORATE INFORMATION ............................................................................................................. 31
2.
BASIS OF PREPARATION AND ACCOUNTING POLICIES .......................................................................... 31
a)
Basis of preparation ............................................................................................................... 31
b)
Compliance with IFRS ........................................................................................................... 31
c)
New accounting standards and interpretations ...................................................................... 31
d)
Basis of consolidation ............................................................................................................ 32
e)
Segment reporting ................................................................................................................. 33
f)
Cash and cash equivalents .................................................................................................... 33
g)
Trade and other receivables .................................................................................................. 33
h)
Biological Assets .................................................................................................................... 34
i)
Financial Instruments ............................................................................................................. 34
j)
Property, plant and equipment ............................................................................................... 35
k)
Leases ................................................................................................................................... 36
l)
Impairment of non-financial assets ........................................................................................ 37
m)
Trade and other payables ...................................................................................................... 37
n)
Provisions and employee leave benefits ................................................................................ 37
o)
Contributed equity .................................................................................................................. 37
p)
Revenue recognition .............................................................................................................. 37
q)
Share-based payment transactions ....................................................................................... 38
r)
Income tax ............................................................................................................................. 38
s)
Earnings per share ................................................................................................................. 40
t)
Comparative figures ............................................................................................................... 40
u)
Fair value measurements....................................................................................................... 40
v)
Significant accounting judgements, estimates and assumptions ........................................... 41
3.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES .................................................................. 42
4.
FAIR VALUE MEASUREMENT OF NON-FINANCIAL ASSETS...................................................................... 45
5.
SEGMENT REPORTING .................................................................................................................... 46
6.
REVENUE AND EXPENSES ............................................................................................................... 46
7.
INCOME TAX .................................................................................................................................. 48
8.
EARNINGS PER SHARE .................................................................................................................... 50
9.
CURRENT ASSETS – CASH AND CASH EQUIVALENTS .......................................................................... 50
10.
CURRENT ASSETS – TRADE AND OTHER RECEIVABLES ....................................................................... 51
11.
OTHER CURRENT ASSETS .............................................................................................................. 51
12.
PROPERTY, PLANT AND EQUIPMENT / ASSETS CLASSIFIED AS HELD FOR SALE ....................................... 51
13.
BIOLOGICAL ASSETS ...................................................................................................................... 54
14.
CURRENT LIABILITIES – TRADE AND OTHER PAYABLES ....................................................................... 57
15.
CURRENT LIABILITIES – EMPLOYEE BENEFITS .................................................................................... 58
16.
CONTRIBUTED EQUITY .................................................................................................................... 58
17.
RESERVES .................................................................................................................................... 59
18.
CONTINGENT ASSETS AND LIABILITIES .............................................................................................. 60
19.
RECONCILIATION OF STATEMENT OF CASH FLOWS ............................................................................. 60
20.
AUDITOR REMUNERATION ............................................................................................................... 61
21.
KEY MANAGEMENT PERSONNEL ....................................................................................................... 61
22.
RELATED PARTY DISCLOSURES ....................................................................................................... 61
23.
PARENT ENTITY DISCLOSURES ........................................................................................................ 63
24.
SHARE BASED PAYMENTS ............................................................................................................... 63
25.
COMMITMENTS .............................................................................................................................. 69
26.
EVENTS AFTER BALANCE DATE ........................................................................................................ 69
P a g e | 27
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2021
Consolidated
Notes
2021
$’000
2020
$’000
Sales
26
-
Operating lease income
6a
6
61
Bank interest
58
65
Revenue
90
126
Fair value gain / (loss) on biological assets
13
(5,981)
(109,216)
Other income
6b
391
68,146
Profit / (loss) on assets sold
6c
60
181
Forestry expenses
(3,780)
(2,623)
Wharf feasibility costs
(872)
(1,422)
Wharf asset impaired
(13,242)
-
Administrative and other expenses
6d
(3,941)
(2,516)
Finance costs
6e
-
(970)
Profit / (loss) before income tax
(27,275)
(48,294)
Income tax (expense)/benefit
7
1,309
14,424
Net profit / (loss) for the year
(25,966)
(33,870)
Other comprehensive income
Items that will not be classified subsequently to
profit or (loss)
Net fair value gain in property, plant and
equipment
12
(2,721)
8,273
Other comprehensive income for the year net
of tax
(2,721)
8,273
Total comprehensive profit / (loss) for the year
attributable to members of the parent
(28,687)
(25,597)
EPS in cents
EPS in cents
Basic and diluted earnings per share
8
(46.02)
(60.20)
The above Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
P a g e | 28
Consolidated Statement of Financial Position
As at 30 June 2021
Consolidated
Notes
2021
$’000
2020
$’000
ASSETS
Current assets
Cash and cash equivalents
9
32,735
8,521
Trade and other receivables
10
150
32,356
Other current assets
11
146
100
33,031
40,977
Assets classified as held for sale
12
5,000
-
Total current assets
38,031
40,977
Non-current assets
Property, plant and equipment
12
51,917
74,858
Biological assets
13
-
5,942
Other non-current assets
4
4
Total non-current assets
51,921
80,804
TOTAL ASSETS
89,952
121,781
LIABILITIES
Current liabilities
Trade and other payables
14
2,242
577
Employee benefits
15
189
154
Total current liabilities
2,431
731
Deferred tax liability
7
1,261
7,697
Total non-current liabilities
1,261
7,697
TOTAL LIABILITIES
3,692
8,428
NET ASSETS
86,260
113,353
EQUITY
Contributed equity
16
90,691
90,669
Reserves
17
9,905
11,958
Accumulated profit / (loss)
(14,336)
10,726
TOTAL EQUITY
86,260
113,353
The above Statement of Financial Position should be read in
conjunction with the accompanying notes.
P a g e | 29
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Consolidated
Notes
2021
$’000
2020
$’000
Cash flows from operating activities
Receipts from customers
150
206
Payments to suppliers and employees
(5,589)
(4,488)
Payments to wharf development suppliers
(843)
(1,453)
Interest received
58
65
Borrowing costs
-
(1,183)
Tax refund
43
-
Government grant
1,195
50
Insurance recoveries
32,412
35,926
Net cash flows from operating activities
19
27,426
29,123
Cash flows from investing activities
Proceeds from sale of property, plant and
equipment
95
287
Purchase of wharf development assets
(2,794)
(1,091)
Purchase of plant and equipment
(469)
(262)
Net cash flows used in investing activities
(3,168)
(1,066)
Cash flows from financing activities
Proceeds from the issue of shares
-
660
Payment for share issue costs
(2)
(7)
Purchase of unmarketable shares
(42)
-
Repayment of bank borrowings
-
(29,700)
Net cash flows used in financing activities
(44)
(29,047)
Net increase in cash and cash equivalents
24,214
(990)
Cash and cash equivalents at beginning of year
8,521
9,511
Cash and cash equivalents at end of year
9
32,735
8,521
The above Statement of Cash Flows should be read in
conjunction with the accompanying notes.
P a g e | 30
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Issued
capital
$’000
Treasury
shares
$’000
Property,
plant &
equipment
revaluation
reserve
$’000
Option &
performance
rights
reserve
$’000
Accum-
ulated
profit
$’000
Total
$’000
Balance at 1 July 2019
90,399
(450)
3,685
125
44,296
138,055
Loss for the period
-
-
-
-
(33,870)
(33,870)
Other comprehensive
income
-
-
8,273
-
-
8,273
Total comprehensive income
-
-
8,273
-
(33,870)
(25,597)
Shares issued
660
-
-
-
-
660
Share issue costs
(5)
-
-
-
-
(5)
Net shares issued
655
-
-
-
-
655
Performance rights lapsed
-
-
-
(300)
300
-
Share-based payments
67
-
-
175
-
242
Share issue costs
(2)
-
-
-
-
(2)
Transaction with owners
720
-
-
(125)
300
895
Balance at 30 June 2020
91,119
(450)
11,958
-
10,726
113,353
Balance at 1 July 2020
91,119
(450)
11,958
-
10,726
113,353
Loss for the period
-
-
-
-
(25,966)
(25,966)
Other comprehensive
income
-
-
(2,721)
-
-
(2,721)
Total comprehensive income
-
-
(2,721)
-
(25,966)
(28,687)
Shares issued
-
-
-
-
-
-
Share issue costs
-
-
-
-
-
-
Net shares issued
-
-
-
-
-
-
Unmarketable parcel buy-
back
-
(42)
-
-
-
(42)
Share-based payments
64
-
-
1,572
-
1,636
Share issue costs
-
-
-
-
-
-
Performance rights lapsed
-
-
-
(904)
904
-
Transaction with owners
64
(42)
-
668
904
1,594
Balance at 30 June 2021
91,183
(492)
9,237
668
(14,336)
86,260
The above Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
Notes to the Consolidated Financial Statements
P a g e | 31
1.
Corporate information
The financial report for Kangaroo Island Plantation Timbers Ltd for the year ended 30 June 2021
was authorised for issue in accordance with a resolution of the directors on 21 September 2021.
Kangaroo Island Plantation Timbers Ltd is a for-profit company incorporated and domiciled in
Australia and limited by shares, which are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’
report.
2.
Basis of preparation and accounting policies
a)
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance
with the requirements of the Corporations Act 2001 and Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. The financial report
has been prepared on a historical cost basis, except for biological assets, investment properties
and freehold land that have been measured at fair value.
The financial report is presented in Australian dollars and all values are rounded to the nearest
thousand dollars ($’000) unless otherwise stated under the option available to the Company under
ASIC Class Order 2016/191. The Company is an entity to which the class order applies.
Impact of COVID-19 pandemic - Judgment has been exercised in considering the impacts that the
Coronavirus (COVID-19) pandemic has had, or may have, on the operations of the Group and its
financial position and results. At present it is not expected that the pandemic will have any significant
impact on the Group’s operations.
Group personnel, key supply chains, and other important stakeholder relationships have remained
largely unaffected by the pandemic. As at 30 June 2021 and the date of this report, there has been
no significant impact upon the financial results and position of the Group reported on in these
consolidated financial statements as a result of the COVID-19 pandemic. The Board and
management will continue to monitor the impact of the pandemic on the Group’s operations and
state of affairs.
b)
Compliance with IFRS
The financial report complies with Australian Accounting Standards as issued by the Australian
Accounting Standards Board and International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board.
c)
New accounting standards and interpretations
At the date of authorisation of these financial statements, several new, but not yet effective,
standards and amendments to existing standards, and interpretations have been published by the
IASB. None of these standards or amendments to existing standards have been adopted early by
the Group. Management anticipates that all relevant pronouncements will be adopted for the first
period beginning on or after the effective date of the pronouncement. New standards, amendments
and interpretations not adopted in the current year have not been disclosed as they are not expected
to have a material impact on the Group’s financial statements.
The accounting policies applied by the Group in the consolidated financial statements are consistent
with those applied in the prior year. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective. Standards, interpretations
and amendments that apply for the first time in 2021 did not have any impact on the amounts
recognised in prior periods and are not expected to significantly affect the current or future periods.
Notes to the Consolidated Financial Statements
P a g e | 32
d)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Kangaroo Island
Plantation Timbers Limited and its subsidiaries as at and for the period ended 30 June each year
(the Group).
The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement
with the subsidiary and has the ability to affect those returns through its power over the subsidiary.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies. In preparing the consolidated financial statements,
all intercompany balances, transactions, unrealised gains and losses resulting from intra-Group
transactions and dividends have been eliminated in full.
All controlled entities have a June financial year-end.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and
cease to be consolidated from the date on which control is transferred out of the Group.
Investments in subsidiaries held by Kangaroo Island Plantation Timbers Ltd are accounted for at
cost in the parent entity less any impairment charges. Dividends received from subsidiaries are
recorded as a component of other revenues in the separate income statement of the parent entity,
and do not impact the recorded cost of the investment. Upon receipt of dividend payments from
subsidiaries, the parent will assess whether any indicators of impairment of the carrying value of
the investment in the subsidiary exist. Where such indicators exist, to the extent that the carrying
value of the investment exceeds its recoverable amount, an impairment loss is recognised. See
Note 23 for parent entity information.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The
acquisition method of accounting involves recognising at acquisition date, separately from goodwill,
the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the
acquiree. The identifiable assets acquired and the liabilities assumed are measured at their
acquisition date fair values.
The difference between the above items and the fair value of the consideration (including the fair
value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For
the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned
to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying
amount of the operation when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured based on the relative values of the operation disposed
of and the portion of the cash-generating unit retained.
Non-controlling interests are allocated their share of net profit after tax in the statement of
comprehensive income and are presented within equity in the consolidated statement of financial
position, separately from the equity of the owners of the parent.
Losses are attributed to the non-controlling interest even if that results in a deficit balance. A change
in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for as
an equity transaction.
Notes to the Consolidated Financial Statements
P a g e | 33
e)
Segment reporting
An operating segment is a component of an entity that engages in business activities from which it
may earn revenues and incur expenses (including revenues and expenses relating to transactions
with other components of the same entity), whose operating results are regularly reviewed by the
entity's chief operating decision maker in order to make decisions about resources to be allocated
to the segment and to assess its performance and for which discrete financial information is
available. This includes start-up operations, which are yet to earn revenues. Management will also
consider other factors in determining operating segments such as the existence of a line manager and
the level of segment information presented to the board of directors.
The group aggregates two or more operating segments when they have similar economic
characteristics, and the segments are similar in each of the following respects:
•
Nature of the products and services
•
Nature of the production processes
•
Type or class of customer for the products and services
•
Methods used to distribute the products or provide the services, and if applicable
•
Nature of the regulatory environment
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported
separately. However, an operating segment that does not meet the quantitative criteria is still reported
separately where information about the segment would be useful to users of the financial statements.
Information about other business activities and operating segments that are below the quantitative
criteria are combined and disclosed in a separate category for “all other segments”.
There have been no changes from the prior period in the measurement methods used to determine
reported segment profit or loss.
f)
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an
original maturity of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and
cash equivalents as defined above, net of outstanding bank overdrafts.
g)
Trade and other receivables
Trade receivables, which generally have 30–90-day terms, are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method, less an allowance for
any expected credit losses / uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be
uncollectible are written off when identified. An impairment allowance is recognised when there is
objective evidence that the Group will not be able to collect the receivable. Financial difficulties of
the debtor, default payments, or debts more than 60 days overdue are considered objective
evidence of impairment. The amount of the impairment loss is the receivable carrying amount
compared to the present value of estimated future cash flows, discounted at the original effective
interest rate.
Notes to the Consolidated Financial Statements
P a g e | 34
h)
Biological Assets
Timber plantations
The Group has an interest in radiata pine and eucalypt plantations (the biological assets). The
biological assets are valued by an external valuer or by a directors’ assessment of their fair value
less costs to sell each year. Fair value is determined as the net present value of expected future
cashflows at harvest (discounted at a risk adjusted rate). Costs incurred in maintaining or enhancing
the plantations are capitalised when incurred and are classified as additions at cost before the
determination of the net increments in fair values.
Net increments or decrements in the fair value less cost to sell of the plantation trees are recognised
as income or expenses in profit or loss, determined as the difference between the total fair value
less costs to sell of the trees recognised as at the beginning of the period, adjusted for costs incurred
in maintaining or enhancing plantation trees which are capitalised, and the total fair value less costs
to sell of the plantation trees recognised as at the reporting date.
Further details including key assumptions can be found in Note 13.
Plantations which are expected to be harvested, processed and monetised within 12 months are
classified as current assets; all other biological assets are classified as non-current assets.
The Group has a comprehensive risk management strategy in place to monitor and oversee its
timber plantations. The policy framework is set by the Board, with risk management addressed via
fire risk management, plantation management practices and experienced staff and Board.
i)
Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial
asset expire, or when the financial asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are
measured at the transaction price in accordance with IFRS 15, all financial assets are initially
measured at fair value adjusted for transaction costs (where applicable).
Financial assets, other than those designated and effective as hedging instruments, are classified
into one of the following categories:
• amortised cost;
• fair value through profit or loss (‘FVTPL’); or
• fair value through other comprehensive income (‘FVOCI’).
In the periods presented, the Group does not have any financial assets categorised as FVOCI.
All revenue and expenses relating to financial assets that are recognised in profit or loss are
presented within finance costs, finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and
are not designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets and
collect its contractual cash flows; and
Notes to the Consolidated Financial Statements
P a g e | 35
• the contractual terms of the financial assets give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than “hold to collect” or “hold
to collect and sell: are categorised at FVTPL. Further, irrespective of business model, financial
assets whose contractual cash flows are not solely payments of principal and interest are accounted
for at FVTPL.
Assets in this category are measured at fair value with gains or losses recognised in the profit or
loss. The fair values of financial assets in this category are determined by reference to active market
transactions or using a valuation technique where no active market exists.
Impairment of financial assets
All financial assets except for those carried at FVTPL, are subject to review for impairment at least
at each reporting date to identify whether there is any objective evidence that a financial asset or a
group of financial assets is impaired. Different criteria to determine impairment are applied for each
category of financial assets, which are described below:
Individually significant receivables are considered for impairment when they are past due or when
other objective evidence is received that a specific counterparty will default.
Receivables that are not considered to be individually impaired are reviewed for impairment in
groups, which are determined by reference to the industry and region of a counterparty and other
shared credit risk characteristics. The impairment loss estimate is then based on recent historical
counterparty default rates for each identified group.
Classification and subsequent measurement of financial liabilities
The Group’s financial liabilities include trade and other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for
transaction costs, unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest
method, except for derivatives and financial liabilities designated at FVTPL, which are carried
subsequently at fair value, with gains or losses recognised in profit or loss.
All interest-related charges and, if applicable, changes in an instrument's fair value that are reported
in profit or loss are included within finance costs or finance income.
j)
Property, plant and equipment
Plant and equipment / Wharf Asset
Plant and equipment are stated at historical cost less accumulated depreciation and any
accumulated impairment losses. Such costs include the cost of replacing parts that are eligible for
capitalisation when the cost of replacing the parts is incurred. All other repairs and maintenance are
recognised in profit or loss as incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as
follows:
Plant and equipment
2 - 25 years
The wharf assets represent assets under construction and have therefore not been depreciated.
The assets’ residual values, useful lives and amortisation methods are reviewed and adjusted, if
appropriate, at each financial year-end.
Notes to the Consolidated Financial Statements
P a g e | 36
Freehold land and buildings
Freehold land and buildings are measured at fair value (refer to Note 2(u)) at the date of revaluation.
In accordance with AASB 13 Fair Value Measurement paragraph 27, the Group’s valuation basis
for its freehold land is at “Highest and Best Use”. For the majority of the Group’s freehold land and
buildings this is as agricultural land and buildings, less an allowance for the cost of reversion from
forestry land. The fair value valuation has been prepared using a ‘Summation Approach’ whereby
the land value has been assessed as a rate per hectare which is summated with the added value
of any structural improvement. Further details of the plantation land and buildings fair value
valuation can be found in Note 12.
Any revaluation increment is credited to the asset revaluation reserve in equity, except to the extent
that it reverses a revaluation decrement for the same asset previously recognised in profit and loss,
in which case the increment is recognised in profit or loss.
Any revaluation decrement is recognised in the profit and loss, except to the extent that it offsets a
previous revaluation increment for the same asset, in which case the decrement is debited directly
to the asset revaluation reserve to the extent of the credit balance existing in the revaluation reserve
for that asset.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These are included in profit or loss within other income or expenses.
Upon disposal or derecognition, any revaluation reserve relating to the particular asset being sold
is transferred to retained earnings.
Certain leasehold land, held under perpetual crown lease, is treated in the same manner as freehold
land.
Buildings are depreciated on a straight-line basis over the estimated useful life of the asset as
follows:
Buildings
33 years
Derecognition and impairment
An item of property, plant and equipment is derecognised upon disposal or when no further future
economic benefits are expected from its use or disposal.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
k)
Leases
The Group leases various offices.
The Group has elected to account for short-term leases and leases of low-value assets using the
practical expedients method. Instead of recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense in profit or loss on a straight-line basis
over the lease term.
At 30 June 2021 the Group was committed to a short-term lease of the Kangaroo Island office,
expiring on 30 September 2021 with a total commitment at 30 June 2021 of $3,015, and a short-
term lease of the Adelaide office, expiring on 12 July 2022 with a total commitment at 30 June 2021
of $24,273.
Notes to the Consolidated Financial Statements
P a g e | 37
l)
Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Intangible assets with indefinite useful
lives and non-financial assets not yet available for use are tested for impairment annually and
whenever there is an indication that the asset may be impaired. An impairment loss is recognised
for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows that are largely independent of the cash inflows from other assets or groups
of assets (cash-generating units). Non-financial assets that suffer impairment are tested for possible
reversal of the impairment whenever events or changes in circumstances indicate that the
impairment may have reversed.
m)
Trade and other payables
Trade payables and other payables are carried at amortised cost due to their short-term nature and
are not discounted. They represent liabilities for goods and services provided to the Group prior to
the end of the financial year, for which the Group is obliged to make future payments. The amounts
are unsecured and are usually paid within 30 days of recognition.
n)
Provisions and employee leave benefits
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the profit
or loss net of any reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the balance date. If the effect of the time value of money
is material, provisions are discounted using a current pre-tax rate that reflects the time value of
money and, where appropriate, the risks specific to the liability. The increase in the provision
resulting from the passage of time is recognised in finance costs.
Employee Leave Benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave expected to be settled within 12 months of the reporting date, are recognised in respect
of employees’ services up to the reporting date.
They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities
for non-accumulating sick leave are recognised when the leave is taken and are measured at the
rates paid or payable.
o)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or other securities are shown in equity as a deduction, net of tax, from the proceeds.
p)
Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable
to the extent it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured. The following specific recognition criteria must also be met before revenue is
recognised.
Notes to the Consolidated Financial Statements
P a g e | 38
Insurance claims
The Group recognises income from insurance claims only when the realisation of income is virtually
certain. Income is recognised at fair value at the time the insured event occurs. Fair value is
assessed as the best estimate of the insurance proceeds to be received and is revised as necessary
at reporting dates.
Timber sales
Timber sales are recognised when the Group has transferred to the buyer the significant risk and
reward of ownership, generally when the customer has taken delivery of the goods.
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial
instrument) to the net carrying amount of the financial asset.
Operating leases
The Group earns rental income from operating leases over some of its property (see Note 6). Rental
income is recognised on a straight-line basis over the term of the lease.
q)
Share-based payment transactions
Equity-settled share-based payments including the issue of performance rights made to directors
and other Group personnel are measured at fair value at grant date. Market based vesting
conditions, such as the achievement of specified share prices, are incorporated into the fair value
assessment at grant date. The fair value of performance rights is recognised as an expense, with a
corresponding increase in the share-based payments reserve in equity over the period during which
the recipient becomes unconditionally entitled to the rights. The expense is not revised in
subsequent reporting periods for instruments that do not vest due to a failure to meet market-based
vesting conditions.
Equity-settled share-based payments to other parties are measured at the fair value of goods and
services received, except where the fair value cannot be estimated reliably, in which the transaction
is measured at the fair value of the equity instruments granted on the date the goods or services
are received.
r)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from, or paid to, the taxation authorities based on the current period’s
taxable income. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
when the deferred income tax liability arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
•
when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary differences will not reverse
in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward
of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences and the carry-forward of unused
tax assets and unused tax losses can be utilised, except:
Notes to the Consolidated Financial Statements
P a g e | 39
•
when the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor the taxable profit or
loss; or
•
when the deductible temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures; in which case a deferred tax asset is only recognised
to the extent that it is probable that the temporary difference will reverse in the foreseeable
future and taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are
recognised to the extent that it has become probable that future taxable profit will allow the deferred
tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit
or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to
set off current tax assets against current tax liabilities and the deferred tax assets and liabilities
relate to the same taxable entity and the same taxation authority.
Tax consolidation legislation
Kangaroo Island Plantation Timbers Ltd and its wholly-owned Australian entities have implemented
the tax consolidation legislation as of 1 July 2004.
The head entity, Kangaroo Island Plantation Timbers Ltd, and the controlled entities in the tax
consolidation group continue to account for their own current and deferred tax amounts. The Group
has applied the group allocation approach in determining the appropriate amount of current taxes
and deferred taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, Kangaroo Island Plantation Timbers Ltd
also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused
tax losses and tax credits assumed from controlled entities in the tax consolidation group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the Group. Details of the tax
funding agreement are disclosed in Note 7.
Any difference between the amounts assumed and amounts receivable or payable under the tax
funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax
consolidated entities.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
• receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the statement of financial position.
Notes to the Consolidated Financial Statements
P a g e | 40
Cash flows are included in the statement of cash flows on a gross basis and 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.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
s)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted
to exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent and
adjusted for:
•
costs of servicing equity (other than dividends) and preference share dividends;
•
the after-tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
•
other non-discretionary changes in revenues or expenses during the period that would
result from the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares
on issue, adjusted for any bonus element.
t)
Comparative figures
Where necessary, comparatives have been reclassified and repositioned for consistency with
current year disclosures.
u)
Fair value measurements
Certain accounting policies and disclosures require the measurement of fair value, for both financial
and non-financial assets and liabilities.
Management has overall responsibility to oversee all significant fair value measurements and
reports these to the Audit and Risk Committee. Management regularly reviews significant
components of fair value measurements, including unobservable inputs and other valuation
adjustments. If third party information, such as valuation reports, are used to measure fair values,
then management assesses the evidence obtained from the third parties to support the conclusion
that such valuations meet the requirements of AASB 13 Fair Value Measurement, including the
level in the fair value hierarchy in which such valuations should be disclosed. Significant valuation
issues are reported to the Board of Directors through the Audit and Risk Committee.
The Group uses observable data as much as possible when measuring the fair value of an asset or
liability. Fair values of assets or liabilities are categorised into different levels in the fair value
hierarchy based on the lowest input used in the valuation techniques as follows:
•
Level 1: quoted (unadjusted market prices in active markets for identical assets or liabilities).
•
Level 2: valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
•
Level 3: valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
If the inputs used to measure the fair value of an asset or a liability might be categorised in different
levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the
same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
Notes to the Consolidated Financial Statements
P a g e | 41
Further information about the assumptions made in measuring fair values is included in the following
notes:
•
Note 12: Property, Plant and Equipment; and
•
Note 13: Biological Assets.
The fair value of cash and short-term deposits, trade receivables, other current financial assets,
trade payables and other current liabilities approximate their carrying values largely due to the short-
term maturities of these instruments. Management reviews this assessment at least annually.
v)
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses. Management bases its judgements and estimates on historical
experience and on other various factors it believes to be reasonable under the circumstances, the
results of which form the basis of the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different
assumptions and conditions.
Management has identified the following critical accounting policies for which significant judgements,
estimates, and assumptions are made. Actual results may differ from these estimates under
different assumptions and conditions and may materially affect financial results or the financial
position reported in future periods.
Key Estimate – Valuation of biological assets
The Board has resolved to value the Group’s biological assets using the 30 June 2021 using a
director’s updated valuation which amounts to $nil (2020: $5,942,626). The director’s valuation
assumes that:
•
until the Board has confirmed a viable strategy to remove the damaged timber from other
plantations, a fair value of $nil has been determined for all damaged or partially damaged
timber plantations; and
•
with the refusal of development approval for the wharf; viable exploitation of the undamaged
timber resource is now less than probable.
The fair value of the Group’s biological assets has been calculated using a directors valuation, which
allows the Group to estimate the value of its timber under various scenarios and to consider the
impact of variables within and outside the Group’s control, such as harvesting costs, internal road
construction costs, haulage, wharf charges, exchange rates and international timber prices. Like
any forward-looking valuation, the outputs are sensitive to the choice of assumptions.
Key Estimate – Valuation of Land
The fair value of the plantation land assets was calculated by an independent expert, JLL Valuation
Advisory – Agribusiness (‘JLL’), in their report dated 30 June 2021. The value provided is that of the
Market Value of the Group’s portfolio and also takes into account fair value measurements in
accordance with Australian Accounting Standards Board (AASB) 13. The combined approach
utilises the Highest and Best Use (HBU) of each property, observed prices for recent market
transactions for similar properties and incorporates adjustments for factors specific to the land in
question, including plot size, location, encumbrances and current use.
A significant assumption in JLL’s valuation is the classification of all forestry areas within the portfolio
as “non-viable”, based on the agricultural strategy announced on 12 August 2021. Forestry
plantations have been valued as agricultural land, less an allowance for the cost of reversion from
forestry land.
Notes to the Consolidated Financial Statements
P a g e | 42
Key Estimate – Carrying value of Wharf asset
With the refusal of the development approval of the wharf, costs incurred in developing the Wharf
asset (refer to note 12 for further detail) exceeds the recoverable amount and an impairment charge
is required, under AASB 116 Property, Plant and Equipment. In accordance with AASB 136
Impairment of Assets the recoverable amount was determined using the fair value less costs to sell
of the group of assets referred to as the Wharf asset, based on an independent valuation of $5.0
million of the floating pontoon (which is the only asset with any realisable value). The wharf asset is
now classified as a current asset held for sale.
Key Estimate – Valuation of Performance rights
The fair value of performance rights is measured at grant date using probabilistic estimates in
relation to future share prices and taking into account the terms and conditions upon which the
rights were granted.
The amount recognised as an expense for the 30 June 2021 and 30 June 2020 financial periods is
calculated using estimates of the expected vesting periods. Refer to Notes 7 and 24 for further
details.
Key Estimate – Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences if management considers
that it is probable that future taxable profits will be available to utilise those temporary differences.
3.
Financial risk management objectives and policies
The Group’s principal financial instruments comprise receivables, payables, cash and short-term
deposits.
The Group manages its exposure to key financial risks in accordance with the Group’s financial risk
management policy. The objective of the policy is to support the delivery of the Group’s financial
targets whilst protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk and credit risk.
The Board reviews and agrees policies for managing each of these risks and they are summarised
below. Primary responsibility for identification and control of financial risks is shared between the
Board members and executive management.
Categories of Financial Assets and Liabilities
30 June 2021 Note
Assets at
FVTPL
$’000
Financial
assets at
amortised cost
$’000
Total
$’000
Financial Assets
Cash and cash equivalents
9
-
32,735
32,735
Trade and other receivables
10
-
150
150
Other financial assets
11
-
146
146
-
33,031
33,031
Note
*Designated
at FVTPL
$’000
*Other
liabilities at
FVTPL
$’000
#Other
liabilities
$’000
Total
$’000
Financial Liabilities
Trade and other payables
14
-
-
2,242
2,242
Total
-
-
2,242
2,242
Notes to the Consolidated Financial Statements
P a g e | 43
30 June 2020 Note
Assets at
FVTPL
$’000
Financial
assets at
amortised cost
$’000
Total
$’000
Financial Assets
Cash and cash equivalents
9
-
8,521
8,521
Trade and other receivables
10
-
32,356
32,356
Other financial assets
11
-
100
100
-
40,977
40,977
Note
*Designated
at FVTPL
$’000
*Other
liabilities at
FVTPL
$’000
#Other
liabilities
$’000
Total
$’000
Financial Liabilities
Trade and other payables
14
-
-
577
577
Total
-
-
577
577
* Carried at fair value
# Carried at amortised cost
Risk Exposures and Responses
Interest Rate Risk
The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s
interest-bearing liabilities and short-term deposits.
At balance date, the Group had the following mix of financial assets and liabilities exposed to
Australian variable interest rate risk that are not designated in cash flow hedges:
Consolidated
2021
$’000
2020
$’000
Financial assets
Cash and cash equivalents
32,735
8,521
Term deposits
-
-
32,735
8,521
Financial liabilities
-
Interest bearing liabilities
-
-
-
Net exposure
32,735
8,521
At 30 June 2021, if interest rates had moved as illustrated in the table below, with all other variables
held constant, post-tax profit and equity would have been affected as follows:
Post-tax profit
Higher/(lower)
Equity
Higher/(lower)
Judgements of reasonably
possible movements:
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Consolidated
+1%
327
85
-
-
-0.5%
(164)
(42)
-
-
The movements in profit are due to higher / lower interest costs from variable rate debt and cash
balances.
Notes to the Consolidated Financial Statements
P a g e | 44
Credit Risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents
and trade and other receivables. The Group’s exposure to credit risk arises from potential default
of the counter party, with a maximum exposure equal to the carrying amount of these instruments.
Exposure at balance date is addressed in each applicable note.
Cash at bank is held at the Commonwealth Bank, which has an S&P (Standard & Poors) rating of
AA-.
Credit risk in trade and other receivables is managed in the following ways:
•
a regular risk review takes place on all receivables and loan balances; and
•
The Chief Financial Officer has direct responsibility of the recovery of outstanding accounts.
All overdue accounts are now sent directly to the Group’s lawyers for legal action after other
avenues of recovery have been exhausted.
Legal action on those particular accounts where the matter is being defended are dealt with directly
by the Chief Financial Officer and the lawyers involved.
The Chief Financial Officer regularly reports to the Board of Directors on these matters.
Refer to Note 10 for ageing analysis of receivables.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through
the use of bank loans and other available credit lines.
The table below reflects all contractually fixed settlements and receivables for settlement,
repayments and interest resulting from recognised financial assets and liabilities as at 30 June 2021.
Cash flows for financial assets and liabilities without fixed amounts or timing are based on the
conditions existing at 30 June 2021.
The remaining contractual maturities of the Group’s financial liabilities are:
Consolidated
2021
$’000
2020
$’000
6 months or less
(2,242)
(577)
6-12 months
-
-
1-5 years
-
-
Over 5 years
-
-
(2,242)
(577)
Maturity analysis of financial assets and liability based on management’s expectations
Trade payables and other financial liabilities mainly originate from the financing of assets used in
ongoing operations. These assets are considered in the Group’s overall liquidity risk. To monitor
existing financial assets and liabilities, as well as to enable an effective controlling of future risks,
Kangaroo Island Plantation Timbers Ltd has established risk reporting that reflects the expectations
of management in regards to the expected settlement of financial assets and liabilities.
< 6
months
$’000
6-12
months
$’000
1-5
years
$’000
> 5
years
$’000
Total
$’000
Year ended 30 June 2021
Financial Assets
Cash and cash equivalents
32,735
-
-
-
32,735
Trade and other receivables
150
-
-
-
150
Other financial assets
146
-
-
-
146
33,031
-
-
-
33,031
Notes to the Consolidated Financial Statements
P a g e | 45
< 6
months
$’000
6-12
months
$’000
1-5
years
$’000
> 5
years
$’000
Total
$’000
Financial Liabilities
Trade and other payables
(2,242)
-
-
-
(2,242)
(2,242)
-
-
-
(2,242)
Net Maturity
30,789
-
-
-
30,789
< 6
months
$’000
6-12
months
$’000
1-5
years
$’000
> 5
years
$’000
Total
$’000
Year ended 30 June 2020
Financial Assets
Cash and cash equivalents
8,521
-
-
-
8,521
Trade and other receivables
32,356
-
-
-
32,356
Other financial assets
100
-
-
-
100
40,977
-
-
-
40,977
Financial Liabilities
Trade and other payables
(577)
-
-
-
(577)
(577)
-
-
-
(577)
Net Maturity
40,400
-
-
-
40,400
Fair value
The methods for estimating fair value are outlined in the relevant notes to the financial statements.
Price risk
The Group’s exposure to commodity and equity securities price risk is minimal as the Group does
not hold investments in equity securities.
4. Fair value measurement of non-financial assets
The following table shows the levels within the hierarchy of non-financial assets measured at fair
value on a recurring basis at 30 June 2021:
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
30 June 2021
Property, plant and equipment
Land held for production in Australia
-
-
49,010
49,010
Land and buildings
-
-
2,412
2,412
-
-
51,422
51,422
Biological assets
Standing timber
-
-
-
-
30 June 2020
Property, plant and equipment
Land held for production in Australia
-
-
56,778
56,778
Land and buildings
-
-
2,502
2,502
-
-
59,280
59,280
Biological assets
Standing timber
-
-
5,942
5,942
Notes to the Consolidated Financial Statements
P a g e | 46
Land held for production in Australia (Level 3)
The fair value of the plantation land assets was calculated by an independent expert, JLL Valuation
Advisory – Agribusiness, in their report dated 30 June 2021.
Refer to Note 12 for further details.
Biological assets (Level 3)
The fair value of the Group’s biological assets was calculated by a director’s valuation. Owing to
wildfires that started in December 2019 approximately 95% of the plantation has been damaged,
leaving three plantations with limited fire damage, of which 512.5 acres is undamaged.
The Board has determined that the fair value of the Group’s biological assets amounts to $nil (2020:
$5,942,626).
The fair value of damaged timber plantations has been determined to be $nil (2020: $nil)
With the refusal of development approval for the wharf; the fair value of the undamaged timber
resource has been determined to be $nil (2020: $5,942,626).
5. Segment reporting
Consistent with the prior year, the Group has operations in one business segment, forestry
management.
The forestry management segment primarily involves the management of timber plantations and,
should favourable conditions exist, milling operations.
All operations are conducted in Australia.
6. Revenue and expenses
Consolidated
2021
2020
$’000
$’000
(a) Operating lease income
Operating leases: freehold land and buildings
18
61
Debt forgiven
(12)
-
Total
6
61
The Group leases a number of assets to third parties under operating lease arrangements:
Freehold land and buildings leases $18,180 (2020: $61,019):
•
The Group leased a property of 187.60 hectares, known as “Gosse East”, to a former
director, Mr Graham Holdaway. The lease commenced on 30 June 1999 for a term of 25
years. Mr Holdaway resigned from the Board on 6 May 2020.
Owing to the impacts of wildfires, the Company forgave lease payments relating to the
period following the fires. The contractual annual rental for year ended 30 June 2020 was
$25,144, of which $13,259 was forgiven and $11,885 was unpaid at 30 June 2020.
The lease over Gosse East was terminated on 17 December 2020. No rental was charged
for the year ended 30 June 2021 and the $11,885 owed at 30 June 2020 was forgiven.
• The Group has a residential lease on 2 (2020: 2) properties, down from 10 at 30 June 2019.
The reduced number of leased properties is due to domestic dwellings being destroyed or
severely damaged by wildfire. The remaining agreements are cancellable and the annual
rents received amounted to $11,894 (2020: $41,707); and
Notes to the Consolidated Financial Statements
P a g e | 47
• The Group also casually leases out certain properties for agistment and other purposes.
Annual income amounted to $nil (2020: $7,427). The decrease in annual income from leased
properties pertains to 2021 lease fees not being charged as part of wildfire relief.
Consolidated
2021
2020
$’000
$’000
(b) Other income
Government rebates
67
50
Insurance recoveries
312
68,026
Other income
12
70
Total Other income
391
68,146
(c) Sale of assets
Sale of property, plant and equipment
95
287
Carrying value of assets sold and costs of sale
(35)
(106)
Profit / (loss) on assets sold
60
181
Total profit / (loss) on assets sold
60
181
(d) Administrative and other expenses
Share-based payment
1,636
243
Audit fees
79
100
ASIC fees
7
11
Depreciation
291
158
ASX/share registry fees
107
90
Directors’ fees (excluding share-based payment)
712
1,127
Legal fees
113
75
Professional fees
466
354
Other corporate expenses
530
358
Other expenses
3,941
2,516
(e) Finance costs
Borrowing costs
-
970
Other interest
-
-
Finance costs
-
970
(f) Employee benefits expense
Wages and salaries
1,117
1,203
Non-Executive Directors’ fees (including super)
248
185
Share based payments
11
12
Performance rights
1,572
176
Annual leave provision
53
84
Long service leave provision
1
27
Superannuation
91
107
Total employee and directors’ remuneration
3,093
1,794
Notes to the Consolidated Financial Statements
P a g e | 48
7. Income Tax
Consolidated
2021
2020
$’000
$’000
a) Income tax expense
The major components of income tax expense are:
Current income tax
-
-
Deferred income tax
(1,309)
(14,424)
Income tax expense/(benefit) reported in profit or loss
(1,309)
(14,424)
Profit/(loss) before tax
(27,275)
(48,294)
Tax expense/(benefit) at the statutory income tax rate of 30%
(2020: 30%)
(8,182)
(14,489)
Non-deductible expenses/capital gain on sale of land
469
65
Restate deferred tax balances at expected future rate of 26%
316
-
Derecognise deferred tax assets on capital losses
6,088
-
Income tax expense/(benefit) reported in income statement
(1,309)
(14,424)
b) Amounts charged / (credited) to equity
Share issue costs
(2)
-
Revaluation of land
(5,125)
3,539
Income tax expense reported in equity
(5,127)
3,539
Tax Consolidation
The Company and its 100% owned controlled entities have formed a tax consolidated group.
Members of the Consolidated Entity have entered into a tax sharing arrangement in order to allocate
income tax expenses to the wholly owned controlled entities on a pro-rata basis. The agreement
provides for the allocation of income tax liabilities between the entities should the head entity default
on its tax payment obligations. At balance date, the possibility of default is remote. The head entity
of the tax consolidated group is Kangaroo Island Plantation Timbers Ltd.
Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding
agreement provides for the allocation of current taxes to members of the tax consolidated group.
Deferred taxes are allocated to members of the tax consolidated Group in accordance with a group
allocation approach which is consistent with the principles of AASB 112 Income Taxes.
The allocation of taxes under the tax funding agreement is recognised as an increase/(decrease) in
the member entities’ intercompany accounts with the tax consolidated group head company,
Kangaroo Island Plantation Timbers Ltd. In this regard the Company, has assumed the benefit of
tax losses from the member entities as of the balance date. The nature of the tax funding agreement
is such that no tax consolidation contributions by or distributions to equity participants are required.
Tax losses recognised
The gross value of tax losses recognised at 30 June 2021 amounted to $17,970,347 (2020:
$23,225,757).
Tax losses not recognised
The gross value of capital tax losses not recognised at 30 June 2021 amounted to $12,755,674
(2020: $nil).
Notes to the Consolidated Financial Statements
P a g e | 49
Recognised deferred tax assets and liabilities
Assets
Liabilities
Net
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Property, plant & equipment
-
2,034
-
(9,384)
-
(7,350)
Assets classified as held for
sale
5,321
-
-
-
5,321
-
Biological assets
-
9,079
-
-
-
9,079
Capital raising costs
-
-
-
-
-
-
Trade and other receivables
111
374
(11,421)
(16,830)
(11,310)
(16,456)
Trade and other payables
56
62
-
-
56
62
Tax losses
4,672
6,968
-
-
4,672
6,968
Net deferred tax
assets/(liabilities)
10,160
18,517
(11,421)
(26,214)
(1,261)
(7,697)
Deferred income tax
Deferred income tax for the year ended 30 June 2021 relates to the following:
Movements in temporary
differences during the
year
Balance
30 June 20
$’000
Recognised in
income
$’000
Recognised in
equity
$’000
Transfer
$’000
Balance
30 June 21
$’000
Property, plant & equipment
(7,350)
7,546
5,125
(5,321)
-
Assets classified as held for
sale
-
-
5,321
5,321
Biological assets
9,079
(9,079)
-
-
-
Capital raising costs
-
-
-
-
-
Trade and other receivables
(16,456)
5,144
2
2
(11,310)
Trade and other payables
62
(6)
-
-
56
Tax losses
6,968
(2,296)
-
-
4,672
(7,697)
1,309
5,127
-
(1,261)
Movements in temporary
differences during the
year
Balance
30 June 19
$’000
Recognised
in income
$’000
Recognised
on acquisition
$’000
Recognised
in equity
$’000
Balance
30 June 20
$’000
Property, plant & equipment
(4,151)
340
-
(3,539)
(7,350)
Biological assets
(23,685)
32,764
-
-
9,079
Capital raising costs
616
(616)
-
-
-
Trade and other receivables
-
(16,456)
-
-
(16,456)
Trade and other payables
70
(8)
-
-
62
Tax losses
8,568
(1,600)
-
-
6,968
(18,582)
14,424
-
(3,539)
(7,697)
Notes to the Consolidated Financial Statements
P a g e | 50
8. Earnings per share
The following reflects the income and share data used in the total operation’s basic and diluted
earnings per share computations:
Consolidated
2021
2020
$’000
$’000
a)
Earnings used in calculating earnings per share
Net profit/(loss) attributable to ordinary equity holders of the parent
(25,966)
(33,870)
There is no dilutive effect of the Performance Rights on earnings.
2021
2020
Number
Thousands
Number
Thousands
b)
Weighted average number of shares
Weighted average number of ordinary shares for basic earnings
per share
56,424
56,264
Effect of dilution:
Share options and performance rights
-
-
Weighted average number of ordinary shares adjusted for the
effect of dilution
56,424
56,264
c) Basic and diluted earnings per share
EPS in
cents
EPS in
cents
Basic and diluted earnings per share
(46.02)
(60.20)
There are no instruments excluded from the calculation of diluted earnings per share that could
potentially dilute basic earnings per share in the future because they are anti-dilutive for both periods
presented.
There have been no transactions involving ordinary shares or potential ordinary shares that would
significantly change the number of ordinary shares or potential ordinary shares outstanding between
the reporting date and the date of completion of these financial statements.
9.
Current assets – Cash and cash equivalents
Consolidated
2021
2020
$’000
$’000
Cash at bank and in hand
32,735
8,521
32,735
8,521
Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying
amounts of cash and cash equivalents represent fair value.
At 30 June 2021 $1,127,500 (2020: $nil) in grant monies received from the Commonwealth
government’s Forestry Recovery Development Fund is held in a restricted bank account. The grant
was to support development of a biomass pellet plant on Kangaroo Island, capable of accepting the
fire-damaged logs and any other logs that cannot be sold into export markets.
Notes to the Consolidated Financial Statements
P a g e | 51
10.
Current assets – Trade and other receivables
Consolidated
2021
2020
$’000
$’000
Trade receivables (a)
43
128
Insurance receivable
-
32,100
Sundry debtors
107
128
Carrying amount of trade and other receivables
150
32,356
a)
Terms of trade
Trade debtors are non-interest bearing and generally on 30-day terms.
b)
Ageing analysis of trade and other receivables
At 30 June 2021, the ageing analysis of trade and other receivables is as follows:
0 – 30
days
$000
31 – 60
days
$000
61 – 90
days
$000
91+ days
$000
Total
$000
Trade receivables
43
-
-
-
43
Sundry debtors
107
-
-
-
107
150
-
-
-
150
At 30 June 2020, the ageing analysis of trade and other receivables is as follows:
0 – 30
days
$000
31 – 60
days
$000
61 – 90
days
$000
91+ days
$000
Total
$000
Trade receivables
115
-
-
13
128
Insurance receivable
19,600
-
-
12,500
32,100
Sundry debtors
128
-
-
-
128
19,843
-
-
12,513
32,356
c)
Credit risk and effective interest rate risk and fair values
Details regarding the credit risk and effective interest rate of current receivables are disclosed in
Note 3. The net carrying amount of trade and other receivables is assumed to approximate their fair
value.
11.
Other Current Assets
Consolidated
2021
$’000
2020
$’000
Prepayments
146
100
146
100
12. Property, plant and equipment
Assets classified as held for sale
Consolidated
2021
$’000
2020
$’000
Wharf asset
5,000
-
5,000
-
Notes to the Consolidated Financial Statements
P a g e | 52
Property, plant and equipment
a) Reconciliation of carrying amounts of property, plant and equipment at the beginning
and end of the period
Freehold
land and
Buildings
$’000
Plant and
equipment
$’000
Wharf
asset
$’000
Total
$’000
Year ended 30 June 2021
At 1 July 2020 net of accumulated depreciation
and impairment
59,280
334
15,244
74,858
Additions
33
436
2,998
3,467
Disposals
(29)
-
-
(29)
Revaluation
(7,862)
-
(13,242)
(21,104)
Adjustment in accumulated depreciation in
relation to disposal/revaluation
16
-
-
16
Depreciation charge for year
(16)
(275)
-
(291)
Transfer to assets classified as held for sale
-
-
(5,000)
(5,000)
At 30 June 2021 net of accumulated
depreciation and impairment
51,422
495
-
51,917
At 30 June 2021
Cost or fair value
51,422
1,283
-
52,705
Accumulated depreciation and impairment
-
(788)
-
(788)
Net carrying amount
51,422
495
-
51,917
Freehold
land and
Buildings
$’000
Plant and
equipment
$’000
Wharf
asset
$’000
Total
$’000
Year ended 30 June 2020
At 1 July 2019 net of accumulated depreciation
and impairment
47,485
318
14,288
62,091
Additions
-
264
956
1,220
Disposals
-
(605)
-
(605)
Revaluation
11,812
-
-
11,812
Adjustment in accumulated depreciation in
relation to disposal/revaluation
-
499
-
499
Depreciation charge for year
(17)
(142)
-
(159)
At 30 June 2020 net of accumulated
depreciation and impairment
59,280
334
15,244
74,858
At 30 June 2020
Cost or fair value
59,280
847
15,244
75,371
Accumulated depreciation and impairment
-
(513)
-
(513)
Net carrying amount
59,280
334
15,244
74,858
Additions to wharf assets of $2,998,000 during the year (2020: $956,000), mainly relate to
improvements to the floating pontoon. The wharf is not operational and has been transferred to
Assets classified as held for sale, therefore no depreciation has been charged during the year (2020:
$nil).
Notes to the Consolidated Financial Statements
P a g e | 53
b)
Freehold land revaluations
The Group’s freehold land and buildings are stated at their revalued amounts, being the fair value
at the date of revaluation. The fair value measurements of the Group’s freehold land and buildings
as at 30 June 2021 and 30 June 2020 are based on an independent expert’s valuation. The net
result of the 30 June 2021 independent revaluation amounted to ($7,846,000) of which ($5,492,000)
was recognised in the asset revaluation reserve and ($2,354,000) as deferred tax.
Independent expert’s valuation technique
The Board has elected to use valuations provided by the independent external valuer, JLL
Valuation Advisory – Agribusiness (‘JLL’).
The fair value of the land assets was calculated by JLL in their report dated 30 June 2021 (2020:
30 June 2020). The valuation was carried out in accordance with AASB 13 Fair Value
Measurement and AASB 116 Property, Plant and Equipment. This valuation method has been
used by JLL as it provides the best estimate of a price reasonably obtainable in the property market
at the report date. The fair value valuation has been prepared using a ‘Summation Approach’
whereby the land value has been assessed as a rate per hectare which is summated with the
added value of any structural improvement. The independent expert has assessed the rate per
hectare for the productive component of the land (exclusive of remnant vegetation and water
bodies) as in the range of $3,500 to $4,500 per hectare. The land’s location, rainfall, physical
attributes, location of amenities and improvements all influence where in this range a particular is
valued.
All fair value estimates for land and buildings are included in Level 3 of the fair value hierarchy.
Significant Observable Inputs
(i)
Recent sales of land on Kangaroo Island and recent trends in the sale of land in other
agricultural regions, adjusted for comparability considerations.
(ii) Land use deemed as Agricultural (Grazing).
Significant Unobservable Inputs
(i)
Estimated price per hectare is determined by the independent expert after observing each
asset’s:
a. location including surrounding land use, amenities and local services;
b. improvement including structural, fencing and water;
c. land and climatic characteristics including soil, climate and rainfall;
d. plantation details including planted hectares and age; and
e. occupancy including dwellings, structures and licenses/leases.
(ii) Estimated cost of reversion from Forestry to Agricultural use.
(iii) Economic overview including local, State and industry economic overview.
Sensitivity analysis
The fair value measurement of freehold land is sensitive to changes in the unobservable inputs
which may result in a significantly higher or lower fair value measurement. The following tables
demonstrate the sensitivity to a reasonably possible change in significant unobservable inputs, with
all other variables held constant (change in profit and equity):
Notes to the Consolidated Financial Statements
P a g e | 54
Consolidated
Forestry land
2021
$’000
2020
$’000
Increase in estimated market value per hectare by 2%
980
1,186
Decrease in estimated market per hectare by 2%
(980)
(1,186)
-
-
c)
Wharf asset
With the refusal of the development approval of the wharf, costs incurred in developing the Wharf
asset (refer to note 12 for further detail) exceeds the recoverable amount and an impairment charge
is required, under AASB 116 Property, Plant and Equipment. In accordance with AASB 136
Impairment of Assets the recoverable amount was determined using the fair value less costs to sell
of the group of assets referred to as the Wharf asset, based on an independent valuation of $5.0
million. The wharf asset is now a current asset held for sale.
With respect to the wharf asset, only the floating pontoon is believed to have any realisable value.
An agent has been appointed to sell the pontoon and a sale is expected to have been completed
within 12 months.
d)
Operating lease
The Group earns rental income from operating leases of its freehold land and buildings (see Note
6).
13.
Biological assets
Consolidated
2021
$’000
2020
$’000
Opening balance at 1 July
5,942
115,158
Add fair value adjustment:
39
-
Fair value gain / (loss)
(5,981)
(109,216)
Closing balance as at 30 June
-
5,942
Plantation timber at cost
25,217
25,178
Accumulated fair value gain / (loss)
(25,217)
(19,236)
Total biological assets
-
5,942
Classified as non-current
-
5,942
Fair value at 30 June 2021
On 11 August 2021, the Group announced a strategy to remove the tree crop and convert its land
for more traditional agricultural use. The Group will continue to pursue any salvage harvest
opportunities, particularly for softwood plantations, if they present attractive risk adjusted returns
to shareholders.
As a result of the agricultural strategy, the biological assets, previously valued at $5.9 million, have
been determined to have fair value of nil
Notes to the Consolidated Financial Statements
P a g e | 55
Prior year comparative fair value at 30 June 2020
The fair value of the Group’s biological assets at 30 June 2019 was calculated by an independent
expert, Geddes Management Pty Ltd (Geddes), as at 30 June 2019. Owing to wildfires that started
in December 2019, approximately 95% of the Group’s biological assets were damaged, leaving
three plantations with limited fire damage, of which 512.5 acres is undamaged.
The Group valued its biological assets at 30 June 2020 using a director’s valuation which amounted
to $5,942,626.
Key assumptions used in the valuation are detailed below:
•
The director’s valuation assumes that, until the Board has confirmed a viable strategy to
remove the damaged timber from other plantations, a fair value of $nil is appropriate for all
damaged or partially damaged timber plantations.
•
For the undamaged timber, the valuation assumes that, due to lack of local data, the highest
and best use of the Group’s plantation timber is commercial timber production for export
markets.
•
The Group considers that the development of wharf infrastructure, that would allow
exploitation of the substantial standing timber resource, to be more probable than not. As
a result, the Group believes it had sufficient certainty about the form and quantum of future
cash flows to support its valuation approach.
•
The key milestone achieved, and taken into consideration, in the year was that on 23
March 2020, the Group submitted the Response Document to the public consultation
process which, together with the Addendum Document submitted October 2019, and the
Revised EIS Submitted January 2019, represents the final form of documentation required
by government.
•
The valuation model used by directors allows the Group to estimate the value of its timber
under various scenarios, and to consider the impact of variables within and outside the
Group’s control, such as harvesting costs, internal road construction costs, haulage, wharf
charges, exchange rates and international timber prices. As with any forward-looking
valuation, the outputs are sensitive to the choice of assumptions.
•
The fair value measurements for the biological assets is categorised as Level 2 in the fair
value hierarchy.
•
In accordance with AASB 141 Agriculture the valuation is on a pre-tax basis.
As with any forward-looking valuation, the outputs are sensitive to the choice of assumptions.
Significant Observable Inputs to the 30 June 2020 valuation
(i) US Dollar exchange rate used is consistent throughout the valuation model at 1.389 AUD or 72
cents US.
(ii) The valuation is derived using a real pre-tax discount rate of 11.43% (nominal 13.78%)
calculated using the CAPM formula. Material inputs are an Australian 10-year bond rate for risk
free rate of return of 4.75% and an equity premium of 5%, a beta of 1, a gearing of 30% debt,
an alpha of 2.0% and inflation of 2.1% forecast to 2021.
Significant Unobservable Inputs to the 30 June 2020 valuation
(i) Current trees are between 14 and 36 years old. The volumes have been estimated by the valuer
assisted by the implementation of a Woodstock inventory model by PF Olsen. The directors
model assumes a harvesting plan over 5 years commencing in 2021.
(ii) The price of timber is determined with due consideration to market transactions and industry
projections including:
Notes to the Consolidated Financial Statements
P a g e | 56
o The price of hardwood logs is determined after consideration of current market
transactions, arriving at a blue globulous log price of $90.42 (USD$65.10) per green
metric tonne (GMT) after discounts including dry fibre percentage, anticipated losses,
discount to allow for market fluctuations and marketing commissions. The estimates are in
real dollars.
o The price of pine logs is determined for a range of log grades after consideration of current
market transactions. Using the PF Olsen inventory data, an estimate of revenue per hectare
at harvest is calculated on a property-by-property basis. The average estimated price is
$124.96 per GMT. The estimates are in real dollars.
o Costs to maintain the plantations are estimated on a per hectare per annum basis. Prior to
harvest an allowance is made for in plantation roading costs. This is also denominated on
a per hectare basis and varies according to the specific conditions on each plantation
property.
o The costs at harvest (harvesting, haulage, port access and other pre-export costs) are
estimated on a per GMT basis for both hardwood and softwood.
(iii) The fair value measurement of biological assets is sensitive to changes in the unobservable
inputs which may result in a significantly higher or lower fair value measurement:
o An increase in timber production or timber prices would result in a higher fair value
measurement.
o A decrease in timber production or timber prices would result in a lower fair value
measurement.
o An increase in harvesting, processing, marketing or plantation maintenance costs would
result in a lower fair value measurement.
o A decrease in harvesting, processing, marketing or plantation maintenance costs would
result in a higher fair value measurement.
Deferral in harvest year
A deferral in harvest year may result in higher production as a more mature tree is harvested, this
may alter the fair value measurement, depending on the ratio of the growth rate to the discount rate.
Sensitivity analysis
(i) Foreign Currency Sensitivity Analysis
The following tables demonstrate the sensitivity of the fair value measurement of biological assets
to a reasonably possible change in USD exchange rate, with all other variables held constant:
2021
$’000
2020
$’000
Change in value
•
Increase in the AUD to USD by 4 cents or 5.0%
(2020: 4 cents or 5.0%)
-
(822)
•
Decrease in the AUD to USD by 4 cents 5.0%
(2020: 4 cents or 5.0%)
-
822
(ii) Price Risk Sensitivity Analysis
The following tables demonstrate the sensitivity of the fair value measurement of biological assets
to a reasonably possible change in price, with all other variables held constant:
Eucalyptus globulus
2021
$’000
2020
$’000
Change in value
•
Increase in the price by 5% (2020: 5%)
-
801
•
Decrease in the price by 5% (2020: 5%)
-
(801)
Notes to the Consolidated Financial Statements
P a g e | 57
(iii) Discount rate Risk Sensitivity Analysis
The following tables demonstrate the sensitivity of the fair value measurement of biological assets
to a reasonably possible change in discount rate, with all other variables held constant:
2021
$’000
2020
$’000
Change in value
o
Increase in the nominal discount rate by 5% from 11.44%
to 12.01% (2020: 5% from 11.44% to 12.01%)
-
(28)
o
Decrease in the nominal discount rate by 7% from 11.44%
to 12.01% (2020: 7% from 11.44% to 12.01%)
-
28
Project Risk
The Group is exposed to the following risks relating to its timber plantations.
(i) Supply and Demand Risk
The Group is exposed to risks arising from fluctuations in the price and sales volume of Eucalyptus
globulus, Eucalyptus nitens and Pinus radiata. Management performs regular industry trend
analysis for projected harvest volumes and pricing. The Group has signed a Memorandum of
Understanding with Mitsui Bussan Woodchip Oceania Pty Ltd (MWO), an Australian subsidiary of
a Japanese conglomerate Mitsui & Co Ltd, with a view to entering into an exclusive timber off-take
agreement. This Agreement will mitigate an element of demand risk.
(ii) Climate and Other Risks
The Group’s timber plantations are exposed to the risk of damage from climate changes, diseases,
forest fires and other natural forces. The Group has processes in place aimed at monitoring and
mitigating these risks, including regular forest health inspections and industry pest and disease
surveys. The island location also mitigates some of these risks. In addition, the group is seeking
certain local Government protection that is given to other Kangaroo Island businesses in preventing
introduction of diseases from the mainland.
(iii) Foreign Currency Risk
Foreign currency risk is the risk of variation in future cash flows due to changes in foreign exchange
rates. Timber prices are typically denominated in $US, although the main customers are located in
Asia. The Group is considering using appropriate financial instruments to reduce its exposure to
foreign currency risks.
14.
Current liabilities – Trade and other payables
Consolidated
2021
2020
$’000
$’000
Trade payables
1,001
553
Unearned income
1,128
-
Other payables
113
24
2,242
577
Trade payables are unsecured, non-interest bearing and are usually paid within 30 days of
recognition.
Unearned income relates to a grant from the Commonwealth Government to develop a pellet mill
as part of the 2019-20 Bushfires Relief Recovery program, where the Group has not yet spent the
monies on approved expenditure.
The carrying amounts of trade and other payables are considered to be the same as their fair values,
due to their short-term nature.
Notes to the Consolidated Financial Statements
P a g e | 58
15.
Current liabilities – employee benefits
Employee benefits
Consolidated
2021
2020
$’000
$’000
Annual leave
126
92
Long service leave
54
53
Superannuation
9
9
189
154
Employee benefits are non-interest bearing.
16.
Contributed equity
Consolidated
2021
2020
a) Issued and paid-up capital
$’000
$’000
Ordinary shares fully paid
90,691
90,669
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
b) Movements in shares on issue
2021
2020
Number of
shares
$’000
Number of
shares
$’000
Beginning of financial year
56,463,788
90,669
56,081,499
89,949
Director participation in share
placement (approved by shareholders
21 November 2019)
-
-
330,000
660
Unmarketable parcel buy-back
(49,273)
(42)
-
-
Share-based payment (Note 24)
65,844
64
52,289
67
Share issue costs, net of tax
-
-
-
(7)
End of the financial year
56,480,359
90,691
56,463,788
90,669
c) Capital management
When managing capital, management’s objective is to ensure the entity continues as a going
concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders.
Management also aims to maintain a capital structure that ensures the lowest cost of capital
available to the entity.
Management monitors capital through the gearing ratio (net debt/total capital). The gearing ratios
at 30 June 2021 and 30 June 2020 were as follows:
Notes to the Consolidated Financial Statements
P a g e | 59
Consolidated
2021
$’000
2020
$’000
Trade and other payables
1,074
577
Interest bearing liabilities
-
-
Less cash and cash equivalents
(32,735)
(8,521)
Net debt
(31,661)
(7,944)
Total equity
86,260
113,353
Total capital
54,559
105,409
Gearing Ratio
-
-
As at 30 June 2021 the Group’s net cash exceeds debt.
The Group is not subject to any externally imposed capital requirements.
17.
Reserves
Consolidated
2021
$’000
2020
$’000
Share based payments reserve (a)
668
-
Property, plant and equipment reserve (b)
9,237
11,958
9,905
11,958
a)
Share based payments reserve
Consolidated
2021
$’000
2020
$’000
Opening balance at 1 July
-
125
Movement:
Performance rights dated 28 October 2020
741
-
Performance rights dated 28 October 2020 lapsed
(73)
-
Performance rights dated 30 June 2020
831
-
Performance rights dated 30 June 2020 lapsed
(831)
-
Performance rights dated 21 November 2019
-
140
Performance rights dated 21 November 2019 lapsed
-
(140)
Performance rights dated 16 October 2018
-
35
Performance rights dated 16 October 2018 lapsed
-
(160)
Closing balance at 30 June
668
-
The share-based payments reserve records the fair value at grant date of performance rights issued
to directors, employees and other parties that has been recognised as an expense at the reporting
date. It also reflects the value of performance rights that are on issue but have not yet converted
into shares.
On 30 June 2020, 2,256,896 Performance Rights were issued in the allocations and with the share
price performance conditions outlined in Note 24. The 30 June 2020 Performance Rights expired
on 29 June 2021.
At the 28 October 2020 Annual General Meeting, shareholders approved the issue of a further
2,256,896 Performance Rights on 1 July 2021 that expire on 30 June 2022, in the allocations and
with the share price performance conditions outlined in Note 24.
Share-based payment expense for the year ended 30 June 2021 totalling $1,572,293 consists of
the full value of the 30 June 2020 issue ($831,445) and part of the value of the 1 July 2021 rights
($740,848). The remaining value of the 1 July 2021 rights will be recognised in future financial
periods.
Notes to the Consolidated Financial Statements
P a g e | 60
The value of the 30 June 2020 rights was transferred from the share-based payment reserve to
accumulated profits at 29 June 2021, as they expired without vesting.
Part of the value of the 1 July 2021 rights was transferred from the share-based payment reserve
to accumulated profits on 3 May 2021, when Mr John Sergeant resigned as a director, these
rights lapsing without vesting.
Refer to Note 24 for further detail of the terms, conditions and allocations of the rights issued during
the current financial year and related share-based payment expense.
b)
Property, plant and equipment revaluation reserve
Consolidated
2021
$’000
2020
$’000
Opening balance at 1 July
11,958
3,685
Increase / (decrease) based on independent valuation
(7,846)
11,812
Deferred tax applicable to revaluation
5,125
(3,539)
Closing balance at 30 June
9,237
11,958
The property, plant & equipment revaluation surplus is used to record increments and decrements
on the revaluation of non-current assets. In the event of a sale of an asset, any balance in the
reserve in relation to the asset is transferred to retained earnings.
18.
Contingent assets and liabilities
The Group notes a contingent asset, being an additional $4 million (2020: $5 million) tree crop
insurance claim, which may be receivable, given ambiguity in the wording of its insurance policy
concerning the interaction of $5 million per-event excesses and the overall limit of claims, which is
$65 million. This additional amount has not been recognised in the Group’s accounts.
The Directors are not aware of any other matter or circumstance not otherwise dealt with in the
report or consolidated financial statements that has significantly, or may significantly, affect the
operations of the consolidated entity.
19.
Reconciliation of statement of cash flows
Consolidated
2021
2020
$’000
$’000
Reconciliation from the net profit after tax to the net cash flows
from operations
Net profit/(loss)
(25,966)
(33,870)
Adjustments for
Depreciation
291
158
(Profit) / loss on sale of property, plant and equipment
(60)
(181)
Net fair value decrease in biological assets
5,981
109,216
Impairment of wharf asset
13,242
-
Share-based payments (Note 24)
1,636
243
Changes in assets and liabilities
Increase/(decrease) in deferred tax
(1,311)
(14,425)
(Increase)/decrease in receivables and other current assets
32,160
(31,673)
Increase/(decrease) in payables and employee benefits
1,453
(345)
Net cash from operating activities
27,426
29,123
Loan facilities
Facilities available
-
-
Facilities used at 30 June
-
-
Notes to the Consolidated Financial Statements
P a g e | 61
20.
Auditor remuneration
The auditor of Kangaroo Island Plantation Timbers Ltd is Grant Thornton Audit Pty Ltd.
Consolidated
2021
$
2020
$
An audit or review of the financial report of the Group
66,359
64,452
Taxation services
17,875
3,500
Total
84,234
37,952
21.
Key management personnel
(a) Compensation of key management personnel
Consolidated
2021
$
2020
$
Non-executive Directors
Short-term benefits
242,630
202,123
Superannuation
5,475
1,627
Performance Rights
564,930
54,778
813,035
258,528
Executives
Short-term benefits
1,644,499
1,378,037
Superannuation
43,379
69,455
Long service leave
9,775
9,482
Performance Rights
1,007,363
120,914
Share-based remuneration payment
54,000
56,000
2,759,016
1,633,888
Total
3,572,051
1,892,416
The directors and executives have been reimbursed for Group expenses incurred during the year.
22.
Related party disclosures
Ultimate parent
The ultimate parent entity is Kangaroo Island Plantation Timbers Ltd, a publicly listed company
domiciled and incorporated in Australia.
Subsidiaries
The consolidated financial statements include the financial statements of Kangaroo Island
Plantation Timbers Ltd and the subsidiaries listed in the following table:
Percentage of equity
interest held by the
consolidated entity
Name
Country of
incorporation
2021
%
2020
%
KI Seaport Pty Ltd(i)
Australia
100
100
KIPT Holdings Pty Ltd(ii)
Australia
100
100
Kangaroo Island Plantation Management Pty Ltd
Australia
100
100
RuralAus Finance Limited(iii)
Australia
nil
nil
Kangaroo Island Land Assets Ltd
Australia
100
100
Kangaroo Island Timbers Pty Ltd
Australia
100
100
Notes to the Consolidated Financial Statements
P a g e | 62
(i) KI Seaport Pty Ltd was incorporated on 29 January 2014 and is a wholly owned subsidiary
of Kangaroo Island Plantation Timbers Ltd.
(ii) KIPT Holdings Pty Ltd is a wholly owned subsidiary of Kangaroo Island Plantation Timbers
Ltd and is the immediate parent entity to Kangaroo Island Plantation Management Pty Ltd,
Kangaroo Island Land Assets Ltd and Kangaroo Island Timbers Pty Ltd.
(iii) Deregistered on 10 July 2019.
Transactions with related parties
Controlled Entities
Transactions between Kangaroo Island Plantation Timbers Ltd and other entities in the wholly
owned group during the period consisted of:
•
Loans advanced by Kangaroo Island Plantation Timbers Ltd; and
•
Loans advanced to Kangaroo Island Plantation Timbers Ltd.
Loans provided by the Company to wholly owned entities are made on an interest free basis and
are repayable on demand.
All inter-entity transactions and balances are eliminated in the consolidated financial statements.
Key management personnel
Details of the remuneration of key management personnel are included in Notes 21 and 24 and in
the Remuneration Report.
Gosse East plantation
Consolidated
2021
$
2020
$
Directors’ transactions
Operating lease income
(11,885)
11,885
Operating lease income relates to a lease to a former director, Mr Graham Holdaway. Mr Holdaway
resigned from the Board on 6 May 2020.
Mr Holdaway leased a property of 187.60 hectares, known as “Gosse East”, from the Group. The
lease commenced on 30 June 1999, for a term of 25 years.
Owing to the impacts of wildfires, the Company forgave lease payments relating to the period
following the fires. The contractual annual rental for year ended 30 June 2020 was $25,144, of
which $13,259 was forgiven and $11,885 was unpaid at 30 June 2020.
The lease over Gosse East was terminated on 17 December 2020. No rental was charged for the
year ended 30 June 2021 and the $11,885 owed at 30 June 2020 was forgiven.
The Group assumed ownership of all trees and forest produce at Gosse East and released Mr
Holdaway from the obligation to clear and remove the plantation. The biological assets at Gosse
East have been valued at zero in the Group’s accounts.
Adelaide Head Office
The Group has entered into a license, at an annual cost of $23,500, to occupy serviced office space
with Allinson Accounting Solutions, a company controlled by the Company Secretary, Ms Victoria
Allinson. The licence expires on 12 July 2022 and a commitment of $24,773 at 30 June 2021 is
disclosed in Note 25 to the financial statements.
Notes to the Consolidated Financial Statements
P a g e | 63
23.
Parent Entity disclosures
Information relating to Kangaroo Island Plantation Timbers Ltd:
2021
$’000
2020
$’000
Current assets
32,297
8,369
Non-current assets
5,705
9,506
Intercompany assets
35,358
56,454
Total assets
73,360
74,329
Current liabilities
1,413
148
Non-current liabilities
-
291
Total liabilities
1,413
439
Total net assets
71,947
73,890
Issued capital
90,691
90,669
Option and performance rights reserve
668
-
Property, plant and equipment reserve
768
970
Retained earnings
(20,180)
(17,749)
Total shareholders’ equity
71,947
73,890
Profit / (loss) of the parent entity
(3,336)
(1,253)
Net fair value gain in property, plant and equipment
(202)
75
Total comprehensive (loss)
(3,538)
(1,178)
Parent entity guarantees, commitments and contingent liabilities
The parent entity has leased two offices throughout the year ended 30 June 2021 and the lease
commitment is disclosed in Note 25.
The Directors are not aware of any other guarantees, commitments or contingent liabilities of the
parent entity.
24.
Share based payments
Recognised share-based payment expenses
The expense recognised for remuneration and other services received during the year is shown in
the table below:
Consolidated
2021
$
2020
$
Performance Rights - Directors (a)
1,572,293
175,692
Shares issued to employees under the EESP (b)
11,000
12,000
Shares issued in lieu of consulting fees (c)
53,000
55,000
Total
1,636,293
242,692
(a) Performance Rights – Directors
On 28 October 2020, shareholders approved the issue of 2,256,896 Performance Rights on 1 July
2021. The 1 July 2021 Performance rights have an expiry date of 30 June 2022.
The allocations and share price performance conditions of the 1 July 2021 Rights issues are outlined
in further detail below.
Share-based payment expense for the year ended 30 June 2021 totalling $1,572,293 consists of
$831,445 in respect of the 30 June 2020 issue and $740,848 in respect of the 1 July 2021 issue.
The balance of the value of the 1 July 2021 Rights will be recognised in future financial periods.
Notes to the Consolidated Financial Statements
P a g e | 64
Detail of share-based payment expense for the year is shown below.
Year
Granted
28 October
2020
$
Issued
30 June
2020
$
Issued 21
November
2019
$
Issued 16
October 2018
$
Total
Performance
Rights
$
Non-Executive
Directors
P McKenzie
2021
95,430
106,043
-
-
201,473
2020
-
-
15,857
5,031
20,888
G Boulton
2021
95,430
106,043
-
-
201,473
2020
-
-
15,857
5,031
20,888
J Sergeant
2021
72,838
89,146
-
-
161,984
2020
-
-
13,002
-
13,002
Executive Directors
K Lamb
2021
381,720
424,170
-
-
805,890
2020
-
-
31,714
-
31,714
J Sergeant
2021
-
-
-
-
-
2020
-
-
18,712
10,062
28,774
S Black
2021
95,430
106,043
-
-
201,473
2020
-
-
31,714
5,031
36,745
G Holdaway
2021
-
-
-
-
-
2020
-
-
13,620
10,062
23,681
Total
2021
740,848
831,445
-
-
1,572,293
2020
-
-
140,746
35,216
175,692
Mr Sergeant was an Executive Director until 31 March 2020 and a Non-Executive Director until he
resigned on 3 May 2021.
Director Holdings of Performance rights
Opening
interest at
1 July 2020
Performance
rights granted
Performance
rights lapsed
Closing
interest at date
of report
Non-Executives
Paul McKenzie
282,112
282,112
(282,112)
282,112
Gregory Boulton AM
282,112
282,112
(282,112)
282,112
John Sergeant
282,112
282,112
(564,224)
-
Executive Directors
Keith Lamb
1,128,448
1,128,448
(1,128,448)
1,128,448
Shauna Black
282,112
282,112
(282,112)
282,112
Total
2,256,896
2,256,896
(2,539,008)
1,974,784
Mr Sergeant’s 30 June 2020 and 28 October 2020 performance rights lapsed when he resigned as
a director on 3 May 2021.
All other directors 30 June 2020 performance rights lapsed on 29 June 2021 as the target share
price was not achieved.
Notes to the Consolidated Financial Statements
P a g e | 65
Performance Rights Plan
The Performance Rights Plan (“Plan”) was last approved by Shareholders on 21 November 2019.
Under the Plan, the Board can issue performance rights to executive and non-executive directors
as remuneration for additional duties performed and to incentivise them to align their interests more
closely with those of shareholders.
If the performance conditions and any other vesting conditions are met, an equivalent number of
shares will be issued, that rank equally with all other existing shares in all respects.
A Plan participant must not dispose of any shares acquired under the Plan before the end of the
restriction period (if any) which are subject to the Plan rules and the terms of the specific offer from
time to time.
On 13 September 2021, the Group announced that Board had determined that the Performance
Rights Plan approved by Shareholders on 21 November 2019 be withdrawn. A new Performance
Rights Plan is being proposed by the Group and will be put to Shareholders for approval at the 2021
Annual General Meeting.
Valuation and Recognition of Remuneration
Under AASB 2 Share-Based Payment the fair value of any share-based remuneration is determined
at the grant date and then recognised as an expense over the relevant vesting period. Performance
rights are normally valued based on the Company’s share price at the Grant Date and an assessed
probability of achievement. Vesting conditions that are market-based (such as achievement of a
particular share price) are included in the fair value assessment. The directors have used an
adapted Monte Carlo valuation method to value the performance rights
Remuneration expense is then recognised over the relevant term of the performance rights, on the
basis that the recipient must be in the employ of the Group at the time a performance condition is
met in order for the rights to vest. Amounts recognised as remuneration expense are not reversed
through profit and loss if the rights do not vest because of a failure to meet a market-based
performance condition. However, the value of performance rights that have lapsed or expired is
transferred from the share-based payment reserve to accumulated profit.
The Performance Rights expire at the earlier of twelve months after approval or if they are replaced
with new Performance Rights.
Performance Rights approved on 28 October 2020 and issued on 1 July 2021
At the 28 October 2020 General Meeting, shareholders approved the issue on 1 July 2021 of a total
of 2,256,896 Performance Rights, with an expiry date of 30 June 2022. These Rights were resolved
by the Directors to have expired unvested on 13 September 2021.
The total valuation of these performance rights of $1,900,808 is being expensed from the date of
grant (28 October 2020) to the date of expiry (30 June 2022).
In the year ended 30 June 2021, $740,848 was recognised as an expense in relation to these rights.
This was less than the valuation of $763,439 attributable to the year ended 30 June 2020, owing to
the resignation of Mr Sergeant as a director on 3 May 2021. The balance of the valuation will be
recognised in future periods.
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000
Shares Traded
VWAP
Keith Lamb
Rights
John Sergeant
Shauna Black
Paul McKenzie
Greg Boulton
Rights (each)
Total
Rights
Total Valuation
$
$1.31 or above
376,149
94,037
752,297
690,608
$1.57 or above
501,533
125,383
1,003,065
832,545
$1.83 or above
250,766
62,692
501,534
377,655
Total
1,128,448
1,128,448
2,256,896
1,900,808
Notes to the Consolidated Financial Statements
P a g e | 66
The Directors have employed the services of FTI Consulting to value the performance rights using
a trinomial lattice model. The performance rights are all American call performance rights calculated
with the following inputs:
•
Valuation date of 28 October 2020;
•
A share price of $1.095, being the closing share price as at 28 October 2020;
•
A risk-free rate of 0.105%, based on the yield of Australian 2-year government bonds as
at 28 October 2020;
•
A volatility of 88.1% based on analysis of the historical volatility of ASX:KPT for a 1-year
period up to 28 October 2020, rounded to one decimal place and reflecting the period for
which performance is measured; and
•
A strike price of $nil.
Last 1,000,000
Shares Traded
VWAP
Shares to
be issued
Grant Date
to 31 Dec
2020
$
6 months to
Jun 2021
$
6 months to
Dec 2021
$
6 months to
30 Jun 2022
$
Total
Valuation
$
$1.31 or above
752,297
72,457
204,918
208,315
204,918
690,608
$1.57 or above
1,003,065
87,349
247,034
251,128
247,034
832,545
$1.83 or above
501,534
39,623
112,058
113,916
112,058
377,655
Total
2,256,896
199,429
564,010
573,359
564,010
1,900,808
Performance Rights approved and issued on 30 June 2020
Owing to the impact of the wildfires on Kangaroo Island during the 2019/20 financial year on the
Group’s timber plantation assets and, consequently on the Group’s share price, the directors
resolved that the terms of the performance rights issued on 21 November 2019 (discussed below)
were no longer appropriate.
On 30 June 2020, shareholders approved the issue of a total of 2,256,896 Performance Rights, with
an expiry date of 29 June 2021. These Rights were resolved by the Directors to have expired
unvested on 29 June 2021.
In the year ended 30 June 2021, $831,445 was recognised as an expense in relation to these rights,
which was less than the valuation of $848,342, owing to the resignation of Mr Sergeant as a director
on 3 May 2021.
The 30 June 2020 Performance Rights were issued in the three tranches with different share price
performance conditions as shown below:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares
Last 1,000,000
Shares Traded
VWAP
Keith Lamb
Rights
John Sergeant
Shauna Black
Paul McKenzie
Greg Boulton
Rights (each)
Total
Rights
Total Valuation
$
$1.25 or above
376,149
94,037
752,297
340,791
$1.50 or above
501,533
125,383
1,003,065
362,106
$1.75 or above
250,766
62,692
501,534
145,445
Total
1,128,448
1,128,448
2,256,896
848,342
The Directors have employed the services of FTI Consulting to value the performance rights using
a trinomial lattice model. The performance rights are all American call performance rights calculated
with the following inputs:
•
Valuation date of 30 June 2020;
Notes to the Consolidated Financial Statements
P a g e | 67
•
A share price of $0.80, being the closing share price as at 30 June 2020;
•
A risk-free rate of 0.250%, based on the yield of Australian 2-year government bonds as
at 30 June 2020;
•
A volatility of 85.7% based on analysis of the historical volatility of ASX:KPT for a 1 year
period up to 30 June 2020, rounded to one decimal place and reflecting the period for
which performance is measured; and
•
A strike price of $nil.
Last 1,000,000
Shares Traded
VWAP
Shares to be
issued
6 months
31 Dec 2020
$
6 months
30 Jun 2021
$
Total Valuation
$
$1.25 or above
752,297
168,523
172,268
340,791
$1.50 or above
1,003,065
179,064
183,042
362,106
$1.75 or above
501,534
71,923
73,522
145,445
Total
2,256,896
419,510
428,832
848,342
Performance Rights approved and issued on 21 November 2019
At the 21 November 2019 Annual General Meeting, shareholders approved the issue of a total of
1,285,700 Performance Rights, with an expiry date of 19 November 2020. These rights were
resolved by the Directors to have expired unvested on 30 June 2020.
The total value of these rights of $166,500 included $140,476 which was recognised as an expense
in the year ended 30 June 2020.
The Performance Rights would be triggered by meeting the following performance vesting
conditions:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000 Shares
Traded VWAP
John Sergeant
Graham Holdaway
Rights (each)
Paul McKenzie
Greg Boulton
Shauna Black
Rights (each)
Total
Rights
Total
Valuation
$
$3.50 or above
107,140
53,570
535,700
118,925
$4.25 or above
85,720
42,860
428,600
47,575
$5.00 or above
64,280
32,140
321,400
-
Total
257,140
128,570
1,285,700
166,500
The valuation is set out in the table below:
20 Business Day
VWAP
Post-split
Shares to be
issued
Share price at
grant date
Probability
Valuation
$
$3.50 or above
535,700
$2.22
10%
118,925
$4.25 or above
428,600
$2.22
5%
47,575
$5.00 or above
321,400
$2.22
0%
-
Total
1,285,700
166,500
Performance Rights approved and issued on 16 October 2018
At the 16 October 2018 Annual General Meeting, shareholders approved the issue of a total of
899,990 Performance Rights, which expired on 15 October 2019.
The total value of these rights of $147,596 included $35,216 which was recognised as an expense
in the year ended 30 June 2020.
Notes to the Consolidated Financial Statements
P a g e | 68
The Performance Rights would be triggered by meeting the following performance vesting
conditions:
•
the volume-weighted average price (VWAP) of the Group’s Shares exceeds the relevant price,
based on the most recently-traded 1,000,000 shares.
Last 1,000,000 Shares
Traded VWAP
John Sergeant
Graham Holdaway
Rights (each)
Paul McKenzie
Greg Boulton
Shauna Black
Rights (each)
Total
Rights
Total Valuation
$
$3.50 or above
107,140
53,570
374,990
130,684
$4.25 or above
85,720
42,860
300,020
12,300
$5.00 or above
64,280
32,140
224,980
4,612
Total
257,140
128,570
899,990
147,596
The valuation is set out in the table below:
20 Business Day
VWAP
Post-split
Shares to
be issued
Share price at
grant date
Probability
Valuation $
$3.50 or above
374,990
$2.05
17%
130,684
$4.25 or above
300,020
$2.05
2%
12,301
$5.00 or above
224,980
$2.05
1%
4,611
Total
899,990
147,596
(b) Shares issued under Executive & Employee Share Plan (EESP)
9,559 shares were issued to employees during the year under the EESP. Shares were valued at
the Company’s closing price on the ASX on the date of issue ($1.15) and remuneration expense of
$11,000 was recognised (2020: $12,000). Eleven employees were issued 869 (2020: 1,162) shares
each.
(c) Shares issued in lieu of consulting fees
The Group’s Approvals Manager Mr Peter Lockett invoices his services via Seaview Corporate
Services Pty Ltd, of which Mr Lockett has effective control. During the year $50,000 (2020: $50,000)
of these services have been paid in Shares. Shares are paid at 20-day VWAP as at the last day of
each quarter. Mr Lockett’s shares issued in lieu of fees for the period are outlined in the table below.
Date of Issue
Fees Invoiced
$
20-Day VWAP
Shares Issued
Consideration
$
11 June 2021
12,500
$0.818
15,278
12,500
11 June 2021
12,500
$0.813
15,380
12,500
11 June 2021
12,500
$1.192
10,484
12,500
11 June 2021
12,500
$0.931
12,536
12,500
50,000
53,678
50,000
Ms Victoria Allinson is the Group’s CFO and Company Secretary and provides professional
accounting, administration and company secretarial fees which are invoiced by Allinson Accounting
Solutions Pty Ltd, of which Ms Allinson is Managing Director and shareholder. $3,000 of these fees
were paid in shares (2020: $5,000), of which $1,000 of shares were issued to Ms Allinson and
$2,000 to her employees. 2,607 shares were issued at $1.15 per share; 869 shares to Ms Allinson
and 1,738 to her employees.
Notes to the Consolidated Financial Statements
P a g e | 69
25.
Commitments
Commitments
The Group has leased two offices throughout the year ended 30 June 2021.
Consolidated
Lease Commitments
Consolidated
Other Commitments
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Due no later than one year
26
35
-
-
Later than one year but no later than 2 years
1
-
-
-
Later than 2 years but no later than 5 years
-
-
-
-
Later than 5 years
-
-
-
-
Total
27
35
-
-
There are no other commitments as at 30 June 2021.
26.
Events after balance date
On 13 July 2021, the Group appointed two new non-executive directors, Mr James Davies and Mr
Mitchell Taylor.
On 9 August 2021, the South Australian Minister for Planning and Local Government refused the
Group’s application to build a deep-water port facility at Smith Bay.
On 11 August 2021, the Group announced a strategy to remove the tree crop and convert its land
for more traditional agricultural use. The directors see no prospect of recovering the losses on the
tree-crop and the value of the biological assets has been written down to nil. The Group will continue
to pursue any salvage harvest opportunities, particularly for the softwood plantations, if the
contribution to tree removal and site clean-up presents an attractive risk adjusted return to
shareholders.
As a result of the agricultural strategy:
•
The wharf asset, previously held at historic cost of $18.2 million, has been revalued to net
realisable value, based on an independent valuation of $5.0 million. The wharf asset is
now a current asset held for sale.
•
The biological assets, previously valued at $5.9 million, have been determined to have a
fair value of nil.
•
The land assets have been independently valued at $51.4m. Agricultural (grazing) has
been determined as the highest and best use of the land. The independent valuation
includes an appropriate allowance for the estimated cost of reversion.
During August 2021, in response to the change in strategy, Group Executives involved with the
approvals and construction of the proposed seaport at Smith Bay, Mr Lockett and Mr Braggs,
together with Mr Heathcote who oversaw the forestry operations (including harvesting) ceased to
be employed by the Company.
On 11 August 2021, the Group announced that Managing Director Keith Lamb will retire from the
Company Board, effective at the conclusion of the 2021 Annual General Meeting. James Davies
will be appointed as Executive Chairman, effective at the conclusion of the 2021 Annual General
Meeting. Paul McKenzie will remain on the Board as a Non-Executive Director.
On 12 August 2021, the Group issued an on-market share buy-back notification for up to 10% of
the Group’s issued share capital, being 5,648,035 shares, under the ASX 10/12 rule. The buy-back
commenced on 27 August 2021 and closed on 20 September 2021. 5,647,022 shares were bought
back for $6,710,343; the shares had not been cancelled at the date of this report.
Notes to the Consolidated Financial Statements
P a g e | 70
On 12 August, the Group issued a termination notice to property manager PF Olsen due to the
change in business circumstances. The termination notice is subject to a (maximum) six-month
work-out period.
On 27 August 2021, the Group issued redundancies to eight island employees, as the forestry work
was discontinued.
On 31 August 2021 the salvage of softwood (pine) was discontinued and a variation issued to the
harvest contractor to commence felling to waste certain areas of the hardwood estate that had
received fire in 2018 and in 2020.
On 13 September 2021, the Group announced that the Board had determined that the Performance
Rights Plan approved by Shareholders on 21 November 2019 be withdrawn. The Performance
Rights approved by Shareholders on 28 October 2020 and issued on 1 July 2021 therefore lapsed
with immediate effect. A new Performance Rights Plan is being proposed by the Group and will be
put to Shareholders for approval at the 2021 Annual General Meeting.
On 14 September 2021 the Group announced:
•
the resignation of Mr Gregory Boulton AM as a director, effective 21 September 2021; and
•
the resignation of Ms Shauna Black as an Executive Director, effective 30 September
2021, and that Ms Black will not be offering herself for re-election at the 2021 Annual
General Meeting and will therefore cease to be a director at that date.
The Board does not believe the COVID-19 pandemic will have any impact on the Group’s ability to
continue as a going concern.
There have been no other significant events after the balance date.
P a g e | 71
Directors’ Declaration
In accordance with a resolution of the directors of Kangaroo Island Plantation Timbers Ltd, I
state that:
•
In the opinion of the directors:
o
The consolidated financial statements and notes of Kangaroo Island Plantation
Timbers Ltd for the financial year ended 30 June 2021 are in accordance with
the Corporations Act 2001, including:
▪
Giving a true and fair view of its financial position as at 30 June 2021
and of its performance for the financial year ended on that date;
▪
Complying with Accounting Standards (including the Australian
Accounting Interpretations) and Corporations Regulations 2001; and
•
The financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 2(a); and
•
There are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
•
This declaration has been made after receiving the declarations required to be made
to the Directors in accordance with Section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2021.
On behalf of the Board
Chairman
Dated this 21st day of September 2021
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.
www.grantthornton.com.au
Level 3, 170 Frome Street
Adelaide SA 5000
Correspondence to:
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Kangaroo Island Plantation Timbers Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Kangaroo Island Plantation Timbers Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2021, 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 financial statements,
including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group 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 2021 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 auditor independence requirements of 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 (including Independence Standards) (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Valuation of Land (Note 12)
Land is subject to a revaluation policy and as at 30 June
2021 the value is based on a valuation prepared by a third
party. The Group has reassessed its strategy and has
determined the most advantageous market for the land is
agriculture land.
Estimating the fair value of land is a complex process
involving a number of judgements and estimates regarding
various inputs. Due to the nature of the asset, the valuation
technique includes a model that uses a number of inputs
from internal and external sources.
This area is a key audit matter due to the significant level of
judgement, including:
Estimated price per hectare taking into consideration
land location, land improvements, plantation details and
occupancy; and
The best use of the land.
Our procedures included, amongst others:
Reviewing the board paper prepared detailing the
appropriate basis for the fair value of land;
Obtaining the external valuation for land;
Assessing the expertise and qualification of management’s
expert;
Assessing appropriateness of comparable sales and
validating recent sales in area,
Assessing the reasonableness of inputs, including
discount rate and rehabilitation costs, in the valuation, and
Assessing the appropriateness of the relate disclosure
within the financial statements.
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 included in the
Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our 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 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: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.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 the Directors’ report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Kangaroo Island Plantation Timbers Limited, for the year ended 30 June
2021 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
I S Kemp
Partner – Audit & Assurance
Adelaide, 21 September 2021
P a g e | 75
Investors’ supplementary information
As at 28 August 2021
The information contained below is to be read in conjunction with the annual report of Kangaroo
Island Plantation Timbers Ltd dated 30 June 2021.
Details of top 20 shareholders
The following is a list of the top 20 Shareholders of the Company:
Rank
Name
Number of Shares
% of
Shares
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
14,692,174
26.01
2
WASHINGTON H SOUL PATTINSON AND COMPANY
6,506,003
11.52
3
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
4,960,992
8.78
4
SAMUEL TERRY ASSET MANAGEMENT PTY LTD
3,000,000
5.31
5
MR JOHN DAVID SERGEANT
2,142,500
3.79
6
AMINAC PTY LTD
2,132,500
3.78
7
NATIONAL NOMINEES LIMITED
2,020,001
3.58
8
BNP PARIBAS NOMINEES PTY LTD
1,325,269
2.35
9
BROADGATE INVESTMENTS PTY LTD
1,135,000
2.01
10
MR STEPHEN PATRICK WARD + MRS JULIE PATRICIA WARD +
MR JAMES MICHAEL WARD
1,011,237
1.79
11
SHANDORA ONE PTY LTD
746,200
1.32
12
ROBERTS PIKE FOUNDATION PTY LTD
700,000
1.24
13
ALKE PTY LTD
657,360
1.16
14
AUSTRALIAN PHILANTHROPIC SERVICES FOUNDATION PTY
LTD
585,000
1.04
15
WASHINGTON H SOUL PATTINSON AND COMPANY
493,997
0.87
16
PERPETUAL CORPORATE TRUST LTD
461,484
0.82
17
MR GRAHAM IAN HOLDAWAY + MRS KRISTINA MARY IRVING
HOLDAWAY
406,015
0.72
18
BENGER SUPERANNUATION PTY LIMITED
402,998
0.71
19
MR BRIAN GARFIELD BENGER
384,889
0.68
20
MR DAVID NEIL CONSTABLE
369,500
0.65
TOTALS: TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES
44,488,109
78.77
TOTAL REMAINING HOLDERS BALANCE
11,992,250
21.23
Distribution of shareholder numbers
Range
Total
holders
Number of
Shares
% of
Shares
1 - 1,000
172
98,912
0.17
1,001 - 5,000
169
444,060
0.79
5,001 - 10,000
74
587,448
1.04
10,001 - 100,000
165
5,792,558
10.26
100,001 and over
51
49,557,381
87.74
TOTAL
631
56,480,359
100.00
Number of shareholders with less than a marketable parcel of securities
As at 28 August 2021, there were a total of 44 shareholders with less than a marketable parcel of
securities held in Kangaroo Island Plantation Timbers Ltd.
P a g e | 76
Investors’ supplementary information (continued)
Details of substantial shareholders
The following is a list of substantial shareholders of the Company and their associates:
Name of substantial
shareholder
Registered holder of the shares
Number of
shares held
% of total
shares
Samuel Terry Asset
Management Pty Ltd
JP Morgan Nominees Australia Limited
12,914,076
22.87%
Samuel Terry Asset Management Pty Ltd
3,000,000
5.31%
Mr Frederick Woollard
1,965
0.00%
Total
15,916,041
28.18%
Washington H Soul
Pattinson and
Company Limited
Washington H Soul Pattinson and Company
Limited
6,660,087
11.79%
Brickworks Limited
Shareholding in Washington H Soul
Pattinson and Company Limited
6,660,087
11.79%
Paradice Investments
Management Pty Ltd
Paradice Investments Management Pty Ltd
3,561,894
6.31%
Transcontinental Asset management Pty Ltd
70,833
0.12%
Total
3,632,727
6.43%
Unlisted options
There are no unlisted options.
Performance rights
There are 1,974,784 performance rights on issue.
Types of securities and voting rights
There is one class of ordinary shares. Each share is entitled to one vote when a poll is called,
otherwise each member present at a meeting or by proxy has one vote on a show of hands.
Number and class of shares held in escrow
There are currently no ordinary shares held in escrow.
Buy Backs
On 12 August 2020, the Company completed an unmarketable parcel buy-back and 49,273 shares
were bought back at $0.85. No Shareholder approval was required due to the size of this buy-
back.
On 12 August 2021, the Company issued an on-market share buy-back notification for up to 10%
of the Company’s issued share capital, being 5,648,035 shares, under the ASX 10/12 rule. The
buy-back commenced on 27 August 2021 and closed on 20 September 2021. 5,647,022 shares
were bought back for $6,710,343; the shares had not been cancelled at the date of this report.
Securities Exchange
The Company is listed on the Australian Securities Exchange under the ASX stock code KPT.