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Lindsay Australia Limited 2016 | Annual Report
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ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2016
DIRECTORS
Chairman-non-executive,
John F Pressler OAM MAICD
Managing Director and Chief Executive Officer
Michael K Lindsay
Non-executive Directors
Richard A Anderson OAM BCom FCA FCPA
Gregory D Farrell BEcon
GENERAL LEGAL COUNSEL Broderick T Jones LLB
& COMPANY SECRETARY
CHIEF FINANCIAL OFFICER Nathan L King BBus, CPA, ACIS, GAICD
& COMPANY SECRETARY
SHARE
REGISTERED & PRINCIPAL
ADMINISTRATIVE
REGISTER
Computershare Investor Services Pty Ltd
117 Victoria Street, West End, QLD 4101
Telephone: 1300 552 270
Website: www.computershare.com.au
44b Cambridge Street, Rocklea, QLD, 4106
OFFICE
Telephone: (07) 3240 4900
Fax: (07) 3054 0240
Website: www.lindsayaustralia.com.au
AUDITOR
BANKER
Pitcher Partners
Level 30 Central Plaza 1, 345 Queen Street, Brisbane, QLD, 4000
Westpac Banking Corporation
65 Molesworth Street, Lismore, NSW, 2480
STOCK EXCHANGE LISTING Lindsay Australia Limited shares are listed on the Australian Securities
Exchange, code LAU.
Lindsay Australia Limited 2016 | Annual Report
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CONTENTS
ABOUT LINDSAY AUSTRALIA
CHAIRS’ REPORT
OVERVIEW OF DIRECTORS AND COMPANY SECRETARIES
OPERATING AND FINANCIAL REPORT
DIRECTORS’ REPORT
Remuneration report
AUDITOR’S INDEPENDENCE DECLARATION
ANNUAL FINANCIAL REPORT
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LINDSAY
AUSTRALIA LIMITED
CORPORATE GOVERNANCE STATEMENT
SHAREHOLDER INFORMATION
PAGE
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Lindsay Australia Limited 2016 | Annual Report
ABOUT LINDSAY AUSTRALIA
4
Our Business
Lindsay Australia is an integrated transport, logistics and rural supply company with a specific focus on
servicing customers in the food processing, food services, fresh produce, rural and horticultural sectors.
Lindsay Australia comprises of two divisions Rural and Transport. When combined these divisions offer
products and services covering the key needs of growers (customer) throughout their production cycle.
From planting crops, through fertiliser, chemicals, supply of packaging, and then transportation, fumigation
and export. The two divisions offer customers an end to end solution with one point of contact and
accountability.
SITE LOCATIONS
Lindsay Rural
Lindsay Transport
Lindsay Fresh Logistics
Brisbane Warehouse
Berri
Bowen
Brandon
Kyabram
Mareeba
Adelaide
Mildura
Adelaide
Bowen
Brisbane
Bundaberg
Bundaberg North
Mundubbera
Coffs Harbour
Bundaberg Wyllie
Murwillumbah
Childers
Coffs Harbour
Emerald
Gatton
Innisfail
Nambour
Invergordon
Stanthorpe
Tully
Emerald
Gatton
Innisfail
Mackay
Mareeba
Melbourne
Mildura
Brisbane Markets
Mundubbera
Nambour
Stanthorpe
Sydney
Tully
Lindsay Australia Limited 2016 | Annual Report
ABOUT LINDSAY AUSTRALIA
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LINDSAY SOLUTION
Lindsay Australia’s business units share common customers
within the horticulture industry which gives the Group a
strategic advantage by providing a unique end-to-end service
solution. With the recent addition of the new Lindsay Fresh
Logistics facility, Lindsay Australia continues to build on the
Lindsay Solution by increasing our service offerings to our
customers and now provide an integrated logistics service
from port to paddock and everything in-between.
Lindsay Australia Limited 2016 | Annual Report
ABOUT LINDSAY AUSTRALIA
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Lindsay Australia Limited 2016 | Annual Report
CHAIRS’ REPORT
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CHAIRS’ REPORT
Overall, your company, Lindsay Australia
performed strongly for the year delivering on its
strategic objectives, supported by benign economic
and climatic conditions. The Group continually
reinvented and adjusted its logistics and rural
network in the face of fierce competition and
changing customer needs.
Last year the Group raised capital to invest for
future growth, strengthening the transport network
and expanding the rural business. It is pleasing to
see Kim Lindsay and his team delivering these
projects.
During the year Adelaide depot was commissioned,
the logistics systems replaced, and the much of the
fleet renewed. The Group purchased its first
refrigerated rail cars offering Lindsay customers
alternatives for different products. The Rural
division continued to expand its Queensland
presence with new locations in Bowen and the
Burdekin.
The Groups export facility, Lindsay Fresh Logistics
(LFL) completed its first full year of operations.
LFL provided better than expected operational
efficiencies to the transport division. The facility
offers customers further reach into the logistics
chain by providing:
Unloading, cross-docking, and local
delivery;
Short and long term storage solutions;
Ripening services for specific produce
lines; and
Quarantine, inspection and fumigation of
produce for import, export and interstate.
customers, the facility located in the Brisbane
Markets, offers improved efficiencies through its
optimal layout and proximity to key stakeholders.
The 2016 result was underpinned by improved fleet
and network efficiency, and value add from LFL.
Combined with a formative year for the Rural
division, with two new locations, net profit after tax
was $8.072 million a 30.9% improvement on the
previous year.
Off the back of the strong result and the positive
future outlook the board has declared a full year
dividend of 2.2 cents per share, a 4.8% increase on
the previous financial year. Increasing the final year
dividend from 1.0 cent to 1.1 cents.
We all have high hopes and expectations for the
business this coming year. Two new depot
locations, in Brisbane and Mareeba, will be
completed. The LFL business will continue
experimenting and growing the export cold chain to
the world. We will monitor and watch our
competitors ready to take advantage of expected
industry consolidation as it occurs.
I’m sure the year ahead will have many challenges
and opportunities that the Group will embrace with
vigour. Focusing on customers and expecting a
high level of discretionary effort from our
employees should deliver another excellent year.
I thank our CEO Kim Lindsay and, the executive
team, and all Lindsay Australia employees for their
hard work and dedication throughout the year.
John F Pressler
Customers can now rely on one supplier, Lindsay
Australia, to maintain the constant temperature of
produce from the paddock to the port. In addition
to providing services to existing and new
Brisbane, Queensland
29 August 2016
Lindsay Australia Limited 2016 | Annual Report
OVERVIEW OF DIRECTORS AND COMPANY SECRETARIES
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OVERVIEW OF DIRECTORS
AND COMPANY SECRETARIES
Your directors present their report on the consolidated entity (referred to hereafter either as the
consolidated entity or as the Group) consisting of Lindsay Australia Limited and its controlled entities for the
financial year ended 30 June 2016.
Information on Directors and Company Secretaries
The following persons were directors of Lindsay Australia Limited during the financial year and until the date
of this report. Directors were in office for the whole of the period unless otherwise stated.
Mr John Frederick Pressler OAM
Chairman-non-executive
Mr Pressler has had a highly successful
involvement in the agricultural and horticultural
industries for over 40 years, and is recognised
as one of the industry’s leading participants in
both the Bundaberg and Emerald regions.
Mr Pressler was a non-executive director of
Wide Bay Australia Limited from 1988 to 2013,
and Chairman from 1997 to 2009. Mr Pressler is
a member of the Australian Institute of
Company Directors. He was awarded the medal
of the Order of Australia in 2004 for services to
the horticultural industry.
Mr Pressler has held no other directorships with
other listed companies during the last three
years.
Mr Michael Kim Lindsay
Managing Director and Chief Executive Officer
Mr Lindsay has over 30 years’ experience in the
Australian transportation and rural
merchandising industries. From 1974 to 1983
he worked for Lindsay Transport, gaining a
hands-on knowledge of the transportation
industry through an involvement in all areas of
the Group’s operations.
In 1983 Mr Lindsay established Lindsay Rural, a
specialist rural merchandising business with
operations in Central and South East
Queensland. As Managing Director of the
Company he was responsible for expanding it
from a small local operation to a major regional
business.
Mr Lindsay has been Managing Director and
Chief Executive Officer of Lindsay Australia since
2002.
Mr Lindsay has held no other directorships with
other listed companies during the last three
years.
Lindsay Australia Limited 2016 | Annual Report
OVERVIEW OF DIRECTORS AND COMPANY SECRETARIES
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Mr Richard Andrew Anderson OAM
Non-executive Director
Mr Gregory Damien Farrell
Non-executive Director
Mr Anderson is a former partner of
PriceWaterhouseCoopers having served as the
firm’s managing partner in Queensland for nine
years and also as a member of the firm’s
national committee.
Mr Anderson holds a Bachelor of Commerce
degree from the University of Queensland and
is a Fellow of the Institute of Chartered
Accountants and a Fellow of CPA Australia.
Mr Anderson is the current chairman of Data
#3 Limited. He is also a member of the board
of Namoi Cotton Cooperative Limited and is
the current president of the Guide Dogs for the
Blind Association of Queensland.
Mr Anderson was awarded the medal of the
Order of Australia in 1997 for services to the
Guide Dogs for the Blind Association of
Queensland and the Queensland Art Gallery
Foundation.
Mr Anderson has held no other directorships
with other listed companies during the last
three years.
Mr Farrell is the Managing Director of Mulawa
Holdings Pty Limited – a family company with
interests in the Australian tourism, gaming and
road transport industries.
In 1988 Mr Farrell was appointed to the
position of Managing Director of Mulawa
Holdings following his transfer from the IPEC
Transport Group.
Whilst at IPEC, Mr Farrell participated in all
areas of the business, gaining valuable
experience and insight into every department.
He held senior positions, including those of
Industrial Relations Manager and National
Freight Manager and was a key member of the
IPEC Board of Management.
In 1990 Mulawa Holdings established, and still
operates, Cope Transport a significant road
transport company operating in all States and
Territories throughout Australia.
Mr Farrell has a Bachelor of Economics degree
from the University of New South Wales and in
1999 successfully completed a three-year
executive education program at the Harvard
Business School.
Mr Farrell has held no other directorships with
other listed companies during the last three
years.
Lindsay Australia Limited 2016 | Annual Report
OVERVIEW OF DIRECTORS AND COMPANY SECRETARIES
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Mr Nathan King
Chief Financial Officer and Company
Secretary
B.Bus (Banking & Finance), CPA, ACIS
(Company Secretarial Practice), GAICD.
Mr King commenced as Chief Financial Officer
in January 2015. He brings experience from
various industries, geographies, and company
sizes. Previous companies include Rio Tinto,
Sydney Airport, Hilton, and Hyatt hotels.
Nathan also sits as a non-executive director on
the board of QT Mutual Bank.
Mr Broderick Jones
Group Legal Counsel and Company Secretary
Mr Jones holds a bachelor of laws degree from
Queensland University of Technology. He has 20
years’ professional experience within law, finance,
property and markets gained from a number
senior roles both domestically and offshore.
Broderick joined Lindsay Australia Limited in
September 2014 and was appointed Company
Secretary 30 October 2014.
Lindsay Australia Limited 2016 | Annual Report
OPERATING AND FINANCIAL REPORT
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Lindsay Australia Limited 2016 | Annual Report
OPERATING AND FINANCIAL REPORT
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SUMMARY OF OPERATING RESULTS
An overview of key metrics showed another improved result for the Group. Net profit after tax (NPAT)
increased 30.9% to $8,072,000 compared with the previous corresponding period. A one off positive item in
this year’s result was the recovery of previous years’ costs associated with settlement of a legal case
($735,000 after tax). Revenue excluding fuel revenue grew 8.0% as customer volumes increased. Fuel
revenue decreased $8.9 million in line with the decreasing wholesale price of oil. The fuel levy is passed
directly back to customers and moves up and down with the price of fuel.
As the Group delivered on a number capital projects, operational efficiencies were achieved. Costs
increased at a lower rate than revenue growth. However, the rate of depreciation and amortisation
increased.
The NPAT result is largely attributed to growth in Transport and the improved contribution from Lindsay
Fresh Logistics (LFL) as these operations begin to work in a seamless integrated logistics chain. Rural
reported before tax profit of $3,544,000, down on the previous financial year by (5.5%), due to increased
operating cost as the division expanded into new regions.
KEY METRICS
AU$ 000s unless stated otherwise
2016
2015 % Change
324,796
309,929
5,326
(598)
4,219
793
(175.4)
5.1
26.2
329,524
314,941
4.6
816
9,714
(91.6)
328,708
305,227
(293,835)
(285,347)
35,689
29,594
(19,642)
(16,254)
16,047
13,340
(4,644)
(4,482)
(3,331)
(2,692)
8,072
6,166
22,768
20,123
3,544
3.749
8.0
3.0
20.6
20.8
20.3
3.6
23.7
30.9
13.1
(5.5)
Operating Revenue
Other Income
Other gain/(losses)
Total Revenue
Fuel Levy Revenue
Revenue Net of Fuel
Operating Costs
EBITDA
Depreciation and Amortisation
EBIT
Interest
Income Tax
Reported NPAT
Divisional Contributions
Transport
Rural
Lindsay Australia Limited 2016 | Annual Report
OPERATING AND FINANCIAL REPORT
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2016 REPORTED NET PROFIT AFTER TAX (NPAT) VERSUS 2015
In May 2015 the Group outlined plans to invest for future growth. Plans included upgrading the logistics
system, renewing and expanding the divisions fleet and construction of a new depot in South East
Queensland, which would see the consolidation of several sites. The Group also continued to evaluate
potential acquisitions and growth opportunities that would benefit the Lindsay Solution.
As of the 1st July 2016 the Group successfully went live with a new logistics system and is scheduled to open
the new Acacia Ridge site in South East Queensland in October 2016. Transport’s fleet renewal initiatives
have continued in full force, yielding positive results by reducing vehicle operating costs and better safety.
LFL made an improved contribution to the 2016 result, in the divisions second year of operations. LFL
continues to add value to the Lindsay Solution, through diversified service offerings and a growing customer
base. During the year Rural began operations in the Burdekin region, increasing the Groups presence in
North Queensland. The 2016 result shows the positive effect of these investments as the Group continues
to lay the foundations to meet our long term goals.
Lindsay Australia Limited 2016 | Annual Report
OPERATING AND FINANCIAL REPORT
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TRANSPORT
Transport’s profit before tax increased 13.1% on the previous corresponding period due to higher revenue
and margin growth, Lindsay Fresh Logistics maturing operations and cost saving initiatives. Revenue net of
fuel recovery increased $18,530,000 on the previous corresponding period (2015: $5,335,000), with a large
majority of the growth attributable to the divisions continual expansion into North Queensland.
TRANSPORT REVENUE
TRANSPORT REVENUE WITH
FUEL RECOVERY
*Red line – gross profit margin
*Faded area – Revenue recovered via fuel levy
Lindsay Australia Limited 2016 | Annual Report
OPERATING AND FINANCIAL REPORT
15
RURAL
Rural’s sales increased 6.9% from $95,080,000 to $101,588,000 as the division expanded into new regions
and packaging sales grew. The expansion into new regions resulted in increased operating costs attributable
to the start-up of these new stores, which affected the divisions overall profitability, down 5.5% on the
previous corresponding period. These costs are expected to drop and sales volumes increase as new
customer’s contracts commence. Rural continues to provide Transport with freight into regional towns,
where the produce is grown, increasing Transport’s utilisation and benefiting the Group overall.
RURAL REVENUE
STRATEGY, RISK & GOVERNANCE
Business strategies and prospects for future years
The Group continues to implement the strategic initiatives outlined last year. Increasing profitability
through operational excellence (scalable, repeatable processes), a stronger network, and new sources of
revenue within the Lindsay solution.
Continue investing for future growth and sustainability:
Systems that allow real time measurement and decision making
Reduce the transactional costs through improved systems and processes
Further grow our export / import capabilities and capacities
Transport Division:
Maintaining a low year fleet that delivers optimal efficiency and safe outcomes
Increase year round fleet utilisation
Continue to develop hubs in locations that support customers and aggregate loads
Consolidate several sites into one at Acacia Ridge
Innovate within LFL. New export services for perishable good customers.
Lindsay Australia Limited 2016 | Annual Report
OPERATING AND FINANCIAL REPORT
16
Rural Division:
Enter new geographies, particularly where the whole Lindsay Solution can add greater value
Sourcing strategy and available lines to customers
Utilise key supplier partnerships to drive further value
Focusing on growing volume and reducing operating costs in new regions
Risk Management
The consolidated entity takes a proactive approach to risk management. The board is responsible for
ensuring that risks, and also opportunities, are identified on a timely basis.
The board adopts the “three lines of defence” model for management of risks and controls:
1. Accountability and ownership of risks within the operation. Implementation of board approved
operating plans and budgets and board monitoring of progress against these budgets, including the
establishment and monitoring of KPIs of both a financial and non-financial nature;
2. Monitor and management of risks. Committees to report on specific business risks including, for
example, such matters as environmental issues and concerns, and occupational health and safety; and
3. Testing and assurance of the risk systems
Risks and uncertainties that could impact future results
External risks include: weather, commodity prices, and regulatory regime particularly with fuel credits.
Strategic risks include: making unsuccessful acquisitions.
Operational risks include: labour force management, fleet safety, and succession planning of key personnel.
Funding and dividends
A final dividend of 1.1 cents per share fully franked has been declared for the year ended 30 June 2016.
An interim dividend for the half year ended 31 December 2015 of 1.1 cents per share fully franked (total
$3,177,000) was paid on 31 March 2016.
The board regularly reviews dividend policy to ensure the best possible outcome for shareholders and the
Group. The board will adjust the dividend policy if it maximises shareholder welfare and is sustainable for
future growth. Based on the 2016 financial result and the positive future outlook the board has declared a
final dividend of 1.1 cents (2015: 1.0 cents).
Committee Membership
As at the date of this report, the Group has an Audit and Risk Committee, an Environmental and
Occupational Health and Safety Committee, and a Remuneration Committee of the board of directors.
Membership of the committees is as follows:
Audit & Risk
Remuneration
Environmental & Occupational Health & Safety
R A Anderson (Chairman)
G D Farrell (Chairman)
J F Pressler (Chairman)
J F Pressler
G D Farrell
J F Pressler
R A Anderson
R A Anderson
G D Farrell
M K Lindsay
Lindsay Australia Limited 2016 | Annual Report
DIRECTORS REPORTS
17
Lindsay Australia Limited 2016 | Annual Report
DIRECTORS REPORT
18
The directors of Lindsay Australia Limited present their report (including the Remuneration Report) together
with the Financial Report of the consolidated entity, being Lindsay Australia Limited and its controlled
entities, for the year ended 30 June 2016.
Directors
The directors of Lindsay Australia Limited in office at any time during or since the end of the 2016 financial
year and information on the directors (including qualifications and experience and directorships of listed
companies held by the directors at any time in the last three years), is set out on page 8 to 10.
The table below outlines the number of directors’ meetings held (including meetings of committees of the
Board) and the number of meetings attended by each of the directors of Lindsay Australia Limited during
the financial year.
Directors’ Meetings
Audit & Risk
Committee
Remuneration
Committee
Environmental &
Occupational Health
& Safety Committee
Held
Attended
Held
Attended
Held
Attended
Held
Attended
J F Pressler
M K Lindsay
R A Anderson
G D Farrell
14
14
14
14
13
13
14
14
4
-
4
4
4
-
4
4
4
-
4
4
4
-
4
4
12
12
12
12
11
12
12
12
Details of director and senior executive remuneration are set out in the Remuneration Report. The
particulars of directors’ interests in shares of the company as at the date of this report are set out on
page 20.
Principal Activities
The principal activities and operations of the Group during the financial year were transportation of
refrigerated and general freight, merchandising of rural supplies and export and import of horticultural
goods through the new Lindsay Fresh Logistics facility.
Other than as previously referred to in the Annual Report, there were no other significant changes in the
nature of the activities of the consolidated entity during the year.
Consolidated Results
The consolidated operating profit attributable to the company’s shareholders after provision for income tax
was $8,072,000.
Review of Operations
A review of the operations of Lindsay Australia Limited during the financial year and the results of those
operations are set out on 11 to 16.
Significant changes in state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Events after the reporting date
Other than as disclosed in Note 36 of the financial report and in this Directors’ Report, the directors are not
aware of any matter or circumstance that has arisen since the end of the financial year and that has
significantly affected or may significantly affect the operations of the Group, the results of those operations,
or the state of affairs of the Group in subsequent financial years.
Likely developments and expected results
Refer to Strategy, Risk and Governance section set out on 15 to 16.
Lindsay Australia Limited 2016 | Annual Report
DIRECTORS REPORTS
19
Environmental Compliance
The Group’s operations are subject to the National Greenhouse Energy Reporting Act 2007. The Group
complies with this Act. Other than this Act, the Group’s operations are not subject to any particular and
significant environmental regulation under law of the Commonwealth or of a State or Territory.
Company Secretaries
The Company Secretaries of Lindsay Australia Limited in office at any time during or since the end of the
2016 financial year and information on the directors (including qualifications and experience and
directorships of listed companies held by the directors at any time in the last three years), is set out on page
10.
Share Options
During the financial year 62,045 performance rights (options) were granted over unissued shares as part of
an employee remuneration contract. The options are exercisable at nil cents each. This tranche of options
vest over a 12-month period and have certain vesting conditions linked to continued employment and
performance criteria. Previously issued options were granted over a 3 to 5 year horizon.
No share option entitles the holder to participate in any share issue of the Group.
Since the end of the financial year up to the date of this report, no options over ordinary shares in Lindsay
Australia Limited have been granted to any person or compensated.
Shares issued on the exercise of options
There were no shares issued pursuant to the exercise of options since the beginning of the financial year up
to the date of this report.
Dividends Paid or Recommended
A final dividend of 1.1 cents per share fully franked has been declared for the year ended 30 June 2016. An
interim dividend for the half year ended 31 December 2015 of 1.1 cents per share fully franked (total
$3,177,000) was paid on 31 March 2016.
1. INDEMNITIES
Lindsay Australia agrees to indemnify each director, officer, and secretary of the Group and of its Australian
based subsidiaries against any liability:
(a) to a party other than Lindsay Australia Limited or a related body corporate, but only to the extent that
the liability arises out of conduct in good faith, and
(b) for legal costs incurred in connection with proceedings for relief to the director or secretary under the
Corporations Act 2001 in which the court grants the relief.
The amount payable under the agreement is the full amount of the liability. No liability has arisen under
these indemnities as at the date of this report.
Lindsay Australia Limited has paid a premium to insure each of the directors against liabilities for costs and
expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in
the capacity of director, other than conduct involving a wilful breach of duty. The amount of the premium
was $31,831 inclusive of GST.
2. ROUNDING OF AMOUNTS
The amounts in this report and in the financial report have been rounded to the nearest $1,000 (where
rounding is applicable) relying on rounding relief under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument (2016/191). The Group is an entity to which the Instrument applies.
Lindsay Australia Limited 2016 | Annual Report
DIRECTORS REPORT
20
3. AUDIT INDEPENDENCE DECLARATION
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act
2001 is attached to this report.
Non-Audit Services
The company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the company and/or the Group are important.
Details of the amounts paid or payable to the auditor Pitcher Partners for audit and non-audit services
provided during the year are set out below.
The Board of Directors has considered the position and, in accordance with advice received from the audit
committee, is satisfied that the provision of the non-audit services is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the
provision of the non-audit services by the auditor, as set out below, did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
All non-audit services have been reviewed by the Audit Committee to ensure they do not impact
on the impartially and objectivity of the auditor; and
None of the services undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants.
Pitcher Partners received or is due to receive the following amounts for the provision of non-audit services
during the year ended 30 June 2016:
Non-audit services
Tax compliance services
Other services
2016
$
22,850
20,000
2015
$
18,800
-
Interests in Shares of the Company
At the date of this report the interests of current directors in securities of the Group are as follows:
Director
J F Pressler
M K Lindsay
R A Anderson
G D Farrell
Ordinary Shares
2,656,432
11,335,581
391,869
14,857,038
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
21
REMUNERATION REPORT (AUDITED)
The Remuneration Report details the nature and amount of remuneration for non-executive directors, the
executive director and other key management personnel of Lindsay Australia Limited and its controlled
entities.
The Remuneration Report is set out under the following main headings:
CONTENTS
A. Principles used to determine the nature and amount of remuneration
B. Service agreements
C. Details of remuneration paid to key management personnel
D. Other Transactions with key management personnel
E. Share-based compensation
F. Equity Holdings of key management personnel
G. Loans to key management personnel
H. Additional Information
PAGE
22
25
25
27
27
28
29
29
The information provided in this Remuneration Report has been audited as required by section 308(3C) of
the Corporations Act 2001.
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
22
A. PRINCIPLES USED TO DETERMINE THE
NATURE AND AMOUNT OF REMUNERATION
Remuneration Philosophy
It is the Group’s objective to provide maximum shareholder benefit via the attraction and retention of a
high quality board and executive team (key management personnel). This is in part achieved by
remunerating directors and executives fairly and appropriately with reference to relevant employment
market conditions and results delivered.
Remuneration Committee
The board’s Remuneration Committee is responsible for determining and reviewing compensation
arrangements for directors and executives of the Group. To assist in achieving this objective, the
Remuneration Committee takes into account the nature and amount of executive directors’ and officers’
emoluments and the Group’s achieved financial and operational performance when determining and
reviewing compensation arrangements.
Remuneration Structure
The structure of non-executive director and senior management remuneration is separate and distinct.
Non-executive Director Remuneration
Objective
The board seeks to set aggregate remuneration at a level which provides the Company with the ability to
attract and retain suitably qualified and experienced directors, whilst incurring a cost which is acceptable to
shareholders.
Structure
The Constitution of the Company and the ASX Listing Rules specify that the aggregate remuneration of non-
executive directors shall be determined from time to time by a general meeting. An amount not exceeding
the amount determined is then divided between the directors as agreed. The latest determination was at
the General Meeting held on 19 November 2007 when shareholders approved an aggregate remuneration
of $450,000 per year. The actual amount paid including statutory superannuation during the financial year
ended 30 June 2016 was $225,570 (2015: $262,800).
The amount of aggregate remuneration sought (subject to the approval of shareholders) and the manner in
which it is apportioned amongst directors is reviewed annually. The board considers the fees paid to non-
executive directors of comparable companies when undertaking the annual review process. There is no
scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors. No
additional fees are paid for board committee membership.
Details of the nature and amount of the emolument of each director of the Company for the years ended 30
June 2016 and 30 June 2015 are set out on page 26.
Executive Director and other Key Management Personnel Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Group and results achieved.
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
23
The executive pay and reward framework has three components:
Component
Vehicle(s)
Rewarding
Fixed remuneration
Base salary, superannuation and salary
packaged benefits
Skills and experience relative to the
market
Short term incentives (STI)
Discretionary bonus payments
Performance relative to annual goals
Long-term incentives (LTI)
Grants of performance options
Long term performance of the Group
Structure
Executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash,
superannuation and fringe benefits such as motor vehicles, and expense payment plans. It is intended that
the manner of payment chosen will be optimal for the recipient without creating undue cost for the Group.
The Fixed Remuneration is not dependent upon the satisfaction of any performance conditions.
In relation to the payment of STI (other than where an STI provision is included in an executive service
contract), options/performance rights and other incentive payments, discretion is exercised by the board
remuneration committee, having regard to the overall performance of the Group and the performance of
the individual during the period.
During the year executives with measurable KPI’s achieved a portion of planned STI payments.
Revenue grew at target levels;
Stock levels were higher than the desired level.
Profit grew at the target rate.
Discretionary effort was awarded above target.
These measures were chosen because they balance growth in profitability, revenue and working capital.
The method used to calculate each KPI is an agreed formulae understood and able to be referenced. The
discretionary amount covers safety, people, and sustainability.
The executive director and other key management personnel are eligible to participate in the Employee
Share Option Plans, with grants made during 2016 being shown below. The terms and conditions under the
plans which regulate the issue of options/performance rights are:
Total options on issue must not exceed 5% of total shares on issue;
The exercise prices and exercise period are determined by directors;
The employee must be employed at the commencement of the exercise period or the options will
lapse;
During the exercise period the options lapse if an employee resigns or the employee is lawfully
terminated;
If an employee dies during the exercise period, his estate may exercise the options prior to the
expiry date;
If an employee becomes disabled during the exercise period, the employee may exercise the
options prior to the expiry date;
If an employee is made redundant during the exercise period, the directors may specify a period
not exceeding the expiry date for the employee to exercise the options.
The table below lists the executive directors and non-executive directors of Lindsay Australia Limited during
the financial year:
Name
J F Pressler
M K Lindsay
R A Anderson
G D Farrell
Position
Chairman (Non-Executive)
Appointment Date
8 January 1997
Managing Director and Chief Executive Officer
26 November 1996
Director (Non-Executive)
Director (Non-Executive)
16 December 2002
17 November 2005
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
24
The following people employed by Lindsay Australia Limited also had authority and responsibility for
planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year:
Name
M K Lindsay
T G Lindsay
N King
B Jones
W T Lorenz
A W Bunker
Position
Managing Director and Chief Executive Officer
General Manager Lindsay Fresh Logistics
Chief Financial Officer and Company Secretary
General Counsel and Company Secretary
General Manager Rural
Commercial Manager Transport
Term as KMP
Full financial year
Full financial year
Full financial year
Full financial year
Full financial year
Ceased 1 July 2015
Details of the nature and amount of remuneration and all monetary and non-monetary components for
each key management personnel during the years ended 30 June 2016 and 30 June 2015 are provided later
in this report.
Use of external consultants
In February 2016, the remuneration committee engaged external consultancy, The Indelible Link, to review
its existing salaries of key management personnel to ensure they were within market. The cost of the
engagement was $5,280 for these services.
The Indelible Link utilised the following approach to the remuneration review for Lindsay Australia Limited.
1. A Group of 15 companies were identified for market remuneration purposes. The criteria for selection of
these companies was that:
they were listed on the ASX and were of comparable market capitalisation to the Lindsay Group
(ASX100-ASX500)
their principal activities are business to business in nature
they are involved in an industry related to the transport, logistics and/or rural services markets
2. Data was then collected relating to the remuneration practices from the most recent published annual
report of these comparator companies
3. On the basis of this information, market ranges were created for all KMP roles and recommendations
made to the Remuneration Committee as to the requirement for adjustments. The review resulted in
changes to the Fixed remuneration for 2 executives.
The Remuneration Committee approved the engagement of The Indelible Link to provide remuneration
recommendations regarding the remuneration mix and quantum for executives. Following assurances from
the Indelible Link and the remuneration committee, the Board is satisfied the advice received from The
Indelible Link is free from undue influence from the KMP to whom the remuneration recommendations
apply. The remuneration recommendations were provided to the Group as an input into decision making
only. The Remuneration Committee considered the recommendations, along with other factors, in making
its remuneration decisions.
The Indelible Link was introduced by the CFO, and then engaged by the chairman of the Remuneration
Committee. All reports were passed directly to the chair of that committee and subsequently reviewed with
all members of the Remuneration Committee. The committee is satisfied that the review was objective.
Additionally, The Indelible Link were engaged to assist in designing the future performance and
remuneration framework to cover the Group’s executives. This resulted in a review of the executive
performance and remuneration policy and the implementation of a new Long Term Incentive Plan, which
will be the subject of future disclosures. The cost of the engagement was $13,483 for these services.
Voting and comments made at the Group’s 2015 Annual General Meeting
Lindsay Australia received more than 98% of “yes” votes on eligible votes cast by shareholder present or by
proxy on its remuneration report for the 2015 financial year. The company did not receive any specific
feedback at the AGM or throughout the year on its remuneration practices.
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
25
B. SERVICE AGREEMENTS
The Group’s policy in operation during 2016 is that service contracts for key management personnel are
unlimited in term but capable of termination on four weeks’ notice. The key management personnel are
also entitled to receive on termination of employment their statutory entitlements of accrued annual and
long service leave, together with any superannuation benefits. Short term incentives are based on
performance against a key set of performance measures which are aligned to shareholder outcomes. Long
term incentives include a combination of performance measures and tenure. Compensation levels are
reviewed each year to meet the principles of the remuneration policy.
Executive service contracts that include any terms that require a bonus payment are for Nathan King and
Wolf Lorenz’s contract. Both require short term and long term incentives to be paid after a qualifying period
of service which extends to 30 June 2016. The directors may grant a bonus to any employee at their
discretion.
Updated service agreements will be negotiated for KMP during 2017 financial year, the details of which will
be provided subsequently.
C. DETAILS OF REMUNERATION PAID TO KEY MANAGEMENT PERSONNEL
The persons listed are the only persons to have authority and responsibility for the planning, directing and
controlling the activities of Lindsay Australia Limited and the Group. There are no other executives who are
key management personnel. Amounts disclosed for cash salary, fees and superannuation include amounts
accrued during the year in respect of leave entitlements. Total remuneration expense may vary, as
compared to base salary, with the movements in annual and long service leave.
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
26
Short-term
benefits
Long-term
benefits
Post-
employme
nt benefits
Share based
payments
(a)
Total
Perform-
ance
related
Salary and
fees
$
Cash
Bonus
$
Non-
monetary
benefits
$
Long
service
leave
$
Superannu
ation
$
Options
$
$
%
56,650
60,000
Non-executive directors
J F Pressler (Chairman)
55,960
2016
2015
53,560
R A Anderson
2016
2015
G D Farrell
2016
2015
L R Hancock (b)
2015
Sub-Total
2016
Sub-Total
2015
40,000
174,410
61,800
60,000
213,560
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
27,300
-
12,614
17,300
75,000
50,000
821,788
744,948
Executive director and other key management personnel
M K Lindsay (Managing Director & Chief Executive Officer)
2016
2015
N King (Chief Financial Officer) (c)
249,000
2016
2015
127,700
G A Johnston (Chief Financial Officer) (d)
2015
168,196
AW Bunker (Commercial Manager Transport) (e)
2015
B Jones (General Counsel & Company Secretary) (f)
2016
2015
T G Lindsay (Chief Executive Officer – Lindsay Fresh Logistics)
5,178
333,661
2016
2015
9,630
314,053
W T Lorenz (General Manager Rural)
354,902
2016
355,567
2015
2,139,761
Total 2016
2,260,798
Total 2015
56,290
91,169
188,590
186,169
-
-
19,890
19,890
-
-
17,792
41,907
206,000
164,153
10,000
-
20,000
20,000
19,890
19,890
172,621
10,531
5,000
4,446
-
-
-
-
-
34,268
34,040
11,021
5,700
5,871
5,700
3,800
51,160
49,240
35,000
38,885
24,000
10,242
17,456
34,935
20,258
14,921
35,000
34,368
-
-
-
-
-
-
-
-
-
-
-
90,228
87,600
67,671
65,700
67,671
65,700
43,800
225,570
262,800
944,402
851,133
12,144
-
312,444
137,942
-
-
-
-
-
-
210,098
223,087
236,258
179,074
413,729
397,941
47,424
31,440
212,842
231,487
(12,237)
45,021
(93)
45,021
446,379
523,197
2,578,782
2,785,272
NA
NA
NA
NA
NA
NA
NA
-
-
8
6
13
-
-
2
4
-
5
5
10
26
8
9
a) Share based option payment are the probable number to vest at the grant date value.
b) L R Hancock resigned 29th January 2015.
c) N King commenced 5st January 2015.
d) G A Johnston retired on 31st December 2014.
e) W Bunker ceased to be a KMP on 1 July 2015.
f) B Jones commenced 22nd September 2014.
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
27
D. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Amounts recognised as revenues and expenses:
Revenues
Cartage revenue received / receivable from entities associated with GD Farrell
Cartage revenue received / receivable from entities associated with J Pressler
2016
$
1,265,456
11,453,605
12,719,061
Expenses
Fees for corporate uniform consultancy provided by entities associated with M K Lindsay
14,478
Amounts receivable / payable to key management personnel and their related parties at the
reporting date
Current receivables – trade debtors
Current payables – trade creditors and accruals
1,773,199
-
The directors believe transactions with key management personnel were on commercial terms and
conditions (unless otherwise stated). Current receivables and payables are unsecured, to be settled cash
and are on the same terms and conditions as non-related parties as disclosed elsewhere in this report.
E. SHARE-BASED COMPENSATION
Options
Options over shares in Lindsay Australia Limited are granted under the Lindsay Australia Limited Employee
Share Option Plans to provide long term incentives to executives to deliver long-term shareholder returns.
In addition, Performance Rights (options) may be granted to key management personnel as part of a Long
Term Incentive Plan (LTIP). The LTIP is structured as a reward for length of service and is variable depending
upon cumulative annual performance. The terms and conditions of each grant of options affecting
performance in the current or a future reporting period are as follows:
Grant Date
July 2014
July 2014
July 2015
Fair Value per
option (cents)
Date vested and
exercisable
Expiry Date
Exercise price
Vested
26.5
22.7
41.9
August 2017
August2019
August 2016
Sept 2017
Sept 2019
Sept 2016
-
-
-
0%
0%
0%
All of the above grants of options are performance related to provide long-term incentives.
Detail of options over ordinary shares in the company provided as remuneration to each director of
Lindsay’s Australia Limited and each of its key management personnel and other executives of the parent
entity and the Group are set out below. When exercisable, each option is convertible into one ordinary
share of Lindsay Australia Limited. Further information on the options is set out in note 29 to the financial
report.
Name
N King
Number of options granted
during the year
Value of options
at grant date (1)
Number of options vested
during the year
62,045
12,144
41,364
(1) The value at the grant date calculated in accordance with AASB2 Share-based Payments of options granted during the year as part of
remuneration. The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant
date to vesting date, and the amount is included in the remuneration tables above.
Options granted have an exercise price of zero and no market conditions. The number of options vested
ultimately depends on the performance of the individual and the overall company. Fair values at grant date
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
28
are determined using the share price at the grant date less the dividend discounted where the vesting date
is great then one year. Probability of achieving the performance objective is also taken into account.
Name
Balance
at 1 July
2015
Granted
during the
year
Exercised
Net other
change
Bal 30
June
2016
Vested not
exercisable
Vested and
exercisable
W Lorenz
392,259
-
N King
-
62,045
-
-
(91,886)
300,373
(20,682)
41,364
50,373
41,364
-
-
Vested
during
year
30,772
41,364
F. EQUITY HOLDINGS OF KEY MANAGEMENT PERSONNEL
The share and option holdings disclosed for key management personnel are calculated in accordance with
AASB 124 Related Party Disclosures. Accordingly, the holdings for each key management person include
holdings of the individual (whether held directly, indirectly or beneficially) as well as the holdings of their
related parties (whether held directly, indirectly or beneficially). As a result, where key management
personnel have related parties in common, the holdings of the related parties may be included in the
holdings of all relevant key management personnel, i.e. holdings may be included more than once in the
disclosure.
(i) Options provided as remuneration and shares issue on exercise of such options
Options were provided as remuneration and apart of the Long Term Incentive Plan. There were no
shares issued or options exercised during the 2016 and 2015 years.
(ii) Option holdings
Option holdings represent one KMP’s portion of a Long Term Incentive Plan. There were no shares
issued or options exercised during the 2016 and 2015 years.
(iii) Share holdings
The number of ordinary shares in the Company held during the financial year and prior year by
each director of Lindsay Australia Limited and other key management personnel of the Group,
including their personally related parties, are set out below.
2016 Shares
Directors of Lindsay Australia Limited
J F Pressler
M K Lindsay
R A Anderson
G D Farrell
Other key management personnel of the Group
A W Bunker (a)
T G Lindsay
N L King
B T Jones
W T Lorenz
a) ceased to be a KMP 1 July 2015
Balance at
1 July 2015
Net change
other
Balance at
30 June 2016
2,653,535
11,335,581
2,897
2,656,432
-
11,335,581
376,314
15,555
391,869
29,714,076
(14,857,038)
14,857,038
429,061
-
-
14,060,575
33,333
14,093,908
-
-
-
-
-
-
-
-
-
All equity transactions with directors and other key management personnel have been entered into under
terms and conditions no more favourable than those the entity would have adopted if dealing at arm’s
length.
No shares were granted as remuneration during the last two financial years.
Lindsay Australia Limited 2016 | Annual Report
REMUNERATION REPORT
29
G. LOANS TO KEY MANAGEMENT PERSONNEL
There were no loans to key management personnel during the current or prior reporting period.
H. ADDITIONAL INFORMATION
The table below shows for the current financial year and previous four financial years the total
remuneration cost of the key management personnel, earnings per ordinary share (EPS) dividends paid or
declared, and the closing price of ordinary shares on ASX at year end.
Financial Year
Total Remuneration
$
2012
2013
2014
2015
2016
1,747,375
1,779,713
2,345,032
2,785,272
2,578,782
EPS
¢
-
3.3
2.8
2.4
2.8
Dividends
¢
Share Price
¢
0.7
1.9
2.0
2.1
2.2
17.0
17.5
34.0
45.0
47.5
This report is made in accordance with a resolution of the directors.
John F Pressler
Chairman of Directors
Brisbane, Queensland
29 August 2016
Lindsay Australia Limited 2016 | Annual Report
AUDITOR’S INDEPENDENCE DECLARATION
30
The Directors
Lindsay Australia Limited
44b Cambridge Street
ROCKLEA QLD 4106
Auditor’s Independence Declaration
As lead auditor for the audit of Lindsay Australia Limited for the year ended 30 June 2016, I
declare that, to the best of my knowledge and belief, there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Lindsay Australia Limited and the entities it controlled during the
period.
PITCHER PARTNERS
J. J Evans
Partner
Brisbane, Queensland
29 August 2016
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
31
CONTENTS
PAGE
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Corporate Information
1. Significant Accounting Policies
2. Financial Risk Management
3. Critical Accounting Estimates, Judgements
4. Revenues
5. Other Income
6. Expenses
7. Income Tax
8. Franking Credits / Dividends
9. Cash And Cash Equivalents
10. Trade And Other Receivables
11. Inventories
12. Other Current Assets
13. Available-For-Sale Financial Assets
14. Property, Plant And Equipment
15. Deferred Tax Assets
16. Intangible Assets
17. Trade And Other Payables
18. Borrowings
19. Deferred Tax Liabilities
20. Provisions
21. Other Liabilities
22. Contributed Equity
23. Reserves
24. Retained Profits
25. Cash Flow Information
26. Earnings Per Share
27. Auditor’s Remuneration
28. Related Party Disclosures
29. Share-Based Payments
30. Subsidiaries
31. Segment Information
32. Deed Of Cross Guarantee
33. Commitments
34. Contingent Liabilities
35. Parent Company Information
36. Events after the reporting date
37. Legal Proceedings
Directors’ declaration
33
34
35
36
37
38
38
49
52
52
52
53
53
54
55
55
56
57
57
57
58
59
60
60
62
62
62
63
64
64
65
65
65
66
66
68
69
71
71
72
72
73
73
74
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
32
These financial statements cover the consolidated financial statements for the consolidated entity
consisting of Lindsay Australia Limited and its subsidiaries. The financial statements are presented in
Australian currency.
Lindsay Australia Limited is a company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Lindsay Australia Limited
44b Cambridge Street
ROCKLEA QLD 4106
A description of the nature of the consolidated entity’s operations and its principal activities is included in
the review of operations and activities in the Directors’ Report which is not part of this financial report.
The financial statements were authorised for issue by the directors on 29 August 2016. The directors have
the power to amend and reissue the financial statements.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
33
CONSOLIDATED STATEMENT OF
PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE PERIOD ENDED 30 JUNE 2016
Revenues
Other Income
Gain/(Loss) on sale of Assets
Expenses
Changes in inventories
Purchase of inventories
Fuel and oil costs
Repairs and maintenance
Subcontractors
Employee benefits expense
Depreciation and amortisation
Finance costs
Insurance
Registrations
Pallet charges
Operating lease rentals
Professional fees
Bad debt expense
Other expenses
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Basic earnings per share
Diluted earnings per share
Note
2016
$’000
2015
$’000
4
324,796
309,929
5a
5b
5,326
(598)
4,219
793
(1,416)
1,689
(79,495)
(77,662)
(31,137)
(39,786)
(14,464)
(14,029)
(36,917)
(34,310)
(90,263)
(82,874)
6
(19,642)
(16,254)
(4,644)
(1,212)
(4,886)
(2,215)
(6,957)
(1,899)
(4)
(4,482)
(2,181)
(4,220)
(1,843)
(6,993)
(1,889)
(84)
(22,970)
(21,165)
11,403
8,858
(3,331)
(2,692)
8,072
6,166
-
8,072
Cents
2.8
2.8
-
6,166
Cents
2.4
2.4
6
7
24
26
26
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
34
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT THE END OF THE PERIOD 30 JUNE 2016
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Current Tax Assets
Other
Total Current Assets
Non-Current Assets
Available-For-Sale Financial Assets
Property, Plant and Equipment
Intangible Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Borrowings
Current Tax Liabilities
Provisions
Other
Total Current Liabilities
Non-Current Liabilities
Borrowings
Deferred Tax Liabilities
Provisions
Other
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed Equity
Reserves
Retained Profits
Total Equity
Note
2016
$’000
2015
$’000
9
10
11
12
13
14
16
17
18
20
21
18
19
20
21
22
23
24
10,022
50,234
13,588
-
16,159
45,303
15,177
55
6,172
5,157
80,016
81,851
25
25
153,204
120,289
9,188
7,685
162,417
127,999
242,433
209,850
32,854
34,913
941
7,123
2,216
26,393
26,557
-
6,327
2,971
78,047
62,248
75,654
62,740
1,831
1,056
1,364
2,121
1,284
1,561
79,905
67,706
157,952
129,954
84,481
79,896
70,044
67,475
536
13,901
84,481
536
11,885
79,896
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2016
At 30 June 2014
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners
Contributions of equity, net of transactions costs
Dividends reinvested /(paid) during year
Employee share schemes – value of employee services
At 30 June 2015
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners
Contributions of equity, net of transactions costs
Dividends reinvested /(paid) during year
Employee share schemes – value of employee services
At 30 June 2016
-
-
-
-
12,772
560
-
67,475
-
-
-
-
1,785
784
-
70,044
Contributed
equity
$’000
Share based
payments
reserve
$’000
54,143
491
Retained
profits
$’000
Total equity
$’000
10,802
6,166
-
6,166
-
-
65,436
6,166
-
6,166
-
12,772
(5,083)
(4,523)
-
11,885
8,072
-
8,072
-
-
(6,056)
-
45
79,896
8,072
-
8,072
-
1,785
(5,272)
-
-
-
-
-
-
-
45
536
-
-
-
-
-
-
-
536
13,901
84,481
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Lindsay Australia Limited 2016 | Annual Report
Note
2016
$’000
2015
$’000
356,811
345,970
(320,464)
(317,639)
627
(2,625)
(4,560)
29,789
743
(5,179)
(4,387)
19,508
25(a)
6,306
1,776
(11,155)
(19,190)
(1,805)
(52)
(6,654)
(17,466)
15,491
1,855
(70)
13,594
13,000
(451)
(23,789)
(11,742)
(16,718)
(12,409)
(5,271)
(28,502)
(5,367)
15,389
10,022
(4,523)
(2,531)
(489)
15,878
15,389
ANNUAL FINANCIAL REPORT
36
CONSOLIDATED STATEMENT OF
CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2016
Cash flows from Operating Activities
Receipts In the course of operations
Payments In the course of operations
Interest received
Income taxes paid
Finance costs paid
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities
Proceeds from disposal of Property, Plant and Equipment
Payments for Property, Plant and Equipment
Payments for Intangibles
Net Cash (Used In) Investing Activities
Cash flows from Financing Activities
Proceeds from Borrowings
Proceeds from Share Placements
Share Issue Transaction Costs
Repayment of Borrowings
Repayment of Lease Liabilities
Dividends Paid
Net Cash (Used In) Financing Activities
Increase/(Decrease) In Cash and Cash Equivalents
Cash And Cash Equivalents at Beginning of Financial Year
Cash And Cash Equivalents At End Of Financial Year
9
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Lindsay Australia Group
The Lindsay Australia Group is adding value to the many perishable product value chains that require cold
temperatures to extend and preserve life, with the aim of delivering end consumers products in optimal
condition. We currently add value in these chains through cold logistics and rural merchandise. These
businesses have a strong presence in the Eastern states and South Australia.
Lindsay Australia Limited (LAU) is a for-profit entity limited by shares. Shares in the LAU are publicly traded
on the Australian Securities Exchange (ASX). The financial statements relate to the consolidated entity
consisting of Lindsay Australia Limited and its subsidiaries.
The full board of LAU authorised the issuance of the consolidated financial statements for the year ended 30
June 2016, on 29th August,2016.
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation of the financial statements
These general purpose consolidated financial statements have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authorise
pronouncements of the Australian Accounting Standards Board.
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the periods presented, unless otherwise stated.
These financial statements have been prepared under the historical cost convention, as modified by the
revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative
instruments) at fair value through profit or loss, certain classes of property, plant and equipment and
investment property.
The financial report is presented in Australian dollars and all values are rounded to the nearest ($000),
except where whole dollars are used, relying on rounding relief under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument (2016/191).
Changes in Accounting Standards and Regulatory requirements
There are a number of new and amended accounting standards issued by the AASB which are applicable for
reporting periods beginning on 1 July 2015. We have adopted all the mandatory new and amended
accounting standards issued that are relevant to our operations and effective for the current reporting
period. There was no material impact on the financial report as a result of the mandatory new and amended
accounting standards adopted.
Compliance with IFRS
The consolidated financial statements of the Lindsay Australia also comply with International Financial
Reporting Standards (AIFRS) as issued by the International Accounting Standards Board (IASB).
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
1.2 Basis of consolidation of the financial statements
The consolidated financial statements contain the financial statements of the LAU and its controlled
subsidiaries as at 30 June 2016. Control occurs when LAU is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power to direct its
activities. Generally, there is a presumption that a majority of voting rights results in control. Supporting
this assertion LAU considers the facts and circumstances in assessing whether it has power over the entity
including: the contractual arrangements with other vote holders, rights arising from other contractual
arrangements, and LAU’s voting rights and potential voting rights.
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Subsidiaries are fully consolidated from the date on which control is obtained, and deconsolidated from the
date that control ceases. The acquisition method of accounting is used to account for business
combinations of the Group.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of
the parent of LAU and to the non-controlling interests. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting
policies. All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between LAU members are eliminated in full on consolidation.
1.3 Summary of significant accounting policies
(a) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the acquisition
of a subsidiary comprises the:
•
•
•
•
•
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
equity interests issued by the Group
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
•
•
•
consideration transferred,
amount of any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in the acquired entity over the fair
value of the net identifiable assets acquired is recorded as goodwill.
If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the
difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquire is remeasured to fair value at the acquisition date. Any gains or
losses arising from such remeasurement are recognised in profit or loss.
(b) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Board of Directors.
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(c) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances and duties and taxes paid. Revenue is recognised for the major
business activities as follows:
Revenue from freight cartage and hire and other services is recognised when the services are provided.
Revenue from the sale of goods is recognised when the risks and rewards of ownership have been
transferred which is taken to be upon the delivery of goods to customers.
Rental income from operating leases is recognised in income on a straight-line basis over the lease term.
Interest revenue is recognised on a time proportional basis that takes into account the effective yield on the
financial asset.
(d) Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the
tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax
losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantively enacted. The tax rate is applied to the cumulative amounts of deductible and taxable
temporary differences to measure the deferred tax asset or liability. An exception is made for certain
temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or
liability is recognised in relation to these temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not affect either accounting profit or taxable
profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the parent entity is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse in
the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit and loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity respectively.
(e) Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception
at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The
corresponding rental obligations, net of finance charges, are included in borrowings. Each lease payment is
allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under finance leases are depreciated over the
estimated useful life of the asset. Where there is no reasonable certainty that the lessee will obtain
ownership, the asset is depreciated over the shorter of the lease term and the assets useful life.
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Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group
as lessee are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
(f) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment. Other assets that are subject to amortisation are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The 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 (cash generating units).
(g) Cash and cash equivalents
For the cash flow statement cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with original maturities 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on
the statement of financial position.
(h) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised
cost, less provision for doubtful debts. Trade and other receivables are due for settlement usually no more
than 30 to 120 days from the date of recognition.
The Group assesses, at each reporting date, whether there is objective evidence that a financial asset or a
Group of financial assets is impaired. An impairment exists if one or more events that has occurred since the
initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of
the financial asset or the Group of financial assets that can be reliably estimated. Evidence of impairment
may include indications that the debtors or a Group of debtors is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or
other financial reorganisation and observable data indicating that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Collectability of trade and other receivables is reviewed on an ongoing basis. Debts, which are known to be
uncollectible, are written off. A provision for doubtful receivables is established when there is objective
evidence that the Group will not be able to collect all amounts due according to the original terms of
receivables. The amount of the provision is the difference between the asset’s carrying amount and the
present value of estimated future cash flows, discounted at the original effective interest rate. The amount
of the provision is recognised in profit or loss.
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(i) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises cost of purchase and,
where applicable, cost of conversion after deducting trade discounts, rebates and other similar items. Costs
are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. Volume rebates are apportioned evenly across the relevant
product purchased. Where the product remains in inventory the rebate reduces its carrying value.
(j) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that 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 a provision is presented in the statement of profit or loss net of any reimbursement
(k) Investments and other financial assets
The Group classifies investments in the following categories: financial assets at fair value through profit or
loss, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose
for which the investments were acquired. Management determines the classification of its investments at
initial recognition.
Financial assets at fair value through profit or loss are financial assets held for trading which are acquired
principally for the purposes of selling in the short term with the intention of making a profit. Derivatives are
also categorised as held for trading unless they are designated as hedges.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for those with maturities greater
than 12 months after the period end date, which are classified as non-current assets. Loans and receivables
are included in trade and other receivables in the statement of financial position.
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivates
that are either designated in this category or not classified in any of the other categories. They are included
in non-current assets unless management intends to dispose of the investment within 12 months of the
period end date. Investments are designated as available-for-sale if they do not have fixed maturities and
fixed or determinable payments and management intends to hold them for the medium or long term.
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at
fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially
recognised at fair value and transaction costs are expensed in profit or loss. Financial assets are
derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently
carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method.
When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments
recognised in other comprehensive income are included in profit or loss as gains and losses from investment
securities.
The Group assesses at each period end date whether there is objective evidence that a financial asset or
Group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a
significant or prolonged decline in the fair value of a security below its cost is considered in determining
whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the
cumulative loss – measured as the difference between the acquisition cost and the current fair value, less
any impairment loss on that financial asset previously recognised in profit or loss – is reclassified from
equity and recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments
classified as available-for-sale are not reversed through profit or loss.
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(l) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on quoted market prices at the period end date. The
quoted market price used for financial assets held by the Group is the current bid price; the appropriate
quoted market price for financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market (for example, over-the-
counter derivatives) is determined using valuation techniques. The Group uses a variety of methods and
makes assumptions that are based on market conditions existing at each reporting date. Quoted market
prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other
techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining
financial instruments.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to
approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the
Group for similar financial instruments.
(m) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
profit or loss during the financial period in which they are incurred.
Depreciation of assets is calculated on a diminishing value or straight line method to allocate their cost, net
of their residual values, over their estimated useful lives. The depreciation rates used for each class of
depreciable asset are:
Classification
Buildings
Leasehold improvements
Plant and equipment
Leased plant and equipment
Rate
2.5-5%
20-30%
8-40%
8-40%
Depreciation Basis
SL
SL/DV
SL/DV
SL/DV
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
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 (Note 1(g)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss.
(n) Intangible assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the
net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of
subsidiaries is included in intangible assets. Goodwill acquired in business combinations is not amortised.
Instead, goodwill is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity
sold.
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Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made
to those cash-generating units or Groups of cash-generating units that are expected to benefit from the
business combination in which goodwill arose, identified according to operating segments.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in the statement of profit or loss in the expense category that is
consistent with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of
profit or loss when the asset is derecognised.
(o) Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
year which are unpaid. The amounts are usually unsecured (except for Orora – refer Note 17) and paid
within 30 to 60 days of recognition.
(p) Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled wholly within 12 months after the end of the period in which the employees render
the related service are recognised in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled.
The liability for annual leave and accumulating sick leave is recognised in the provision for employee
benefits. All other short-term employee benefit obligations are presented as payables.
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service. They are therefore measured
as the present value of expected future payments to be made in respect of services provided by employees
up to the end of the reporting period using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the end of the reporting period of corporate bonds
with terms and currencies that match, as closely as possible, the estimated future cash outflows.
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are
recognised in profit or loss.
The Group makes contributions to defined contribution superannuation funds. Contributions are recognised
as an expense as they become payable.
Share-based compensation benefits are provided to employees via the Lindsay Australia Limited Employee
Share Option Plans.
The fair value of options granted under Employee Option Plans is recognised as an employee benefits
expense with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted, which includes any market performance conditions but
excludes the impact of any service and non-market performance vesting conditions and the impact of any
non-vesting conditions. Non-market vesting conditions are included in assumptions about the number of
options that are expected to vest.
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Service and non-market performance conditions are not taken into account when determining the grant
date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s
best estimate of the number of equity instruments that will ultimately vest. Market performance conditions
are reflected within the grant date fair value. Any other conditions attached to an award, but without an
associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are
reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also
service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or
service conditions have not been met. Where awards include a market or non-vesting condition, the
transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied,
provided that all other performance and/or service conditions are satisfied.
The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the
number of options that are expected to vest based on the non-marketing vesting conditions. It recognises
the impact of the revision to original estimates, if any, in profit or loss with a corresponding adjustment to
equity.
(q) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in profit or loss over the period of the borrowings using the
effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
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(r) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(s) Earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to owners of the company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during
the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential ordinary shares.
(t) Dividends
Provision is made for the amount of any dividend declared being appropriately authorised and no longer at
the discretion of the entity, on or before the end of the financial year, but not distributed at reporting date.
(u) Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The
liability is initially measured at fair value and subsequently at the higher of the amount determined in
accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially
recognised less cumulative amortisation, where appropriate. The fair value of financial guarantees is
determined as the present value of the difference in net cash flows between the contractual payments
under the debt instrument and the payments that would be required without the guarantee, or the
estimated amount that would be payable to a third party for assuming the obligations.
(v) GST
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
• Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised
as part of the cost of acquisition of an asset or as part of an item of expense; or
For receivables and payables which are recognised inclusive of GST.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
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(w) New accounting standards and interpretations
Relevant accounting standards and interpretations that have recently been issued or amended but are not
yet effective and have not been adopted for the year are as follows:
Standard/Interpretation
AASB 9 ‘Financial Instruments’, and the relevant
amending standards
AASB 15 ‘Revenue from Contracts with Customers’, AASB 2014-5
‘Amendments to Australian Accounting Standards arising from AASB 15’,
AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective
date of AASB 15’
AASB 16 ‘Leases’
AASB 2014-3 ‘Amendments to Australian Accounting Standards – Accounting
for Acquisitions of Interests in Joint Operations’
AASB 2014-4 ‘Amendments to Australian Accounting Standards –
Clarification of Acceptable Methods of Depreciation and Amortisation’
AASB 2014-9 ‘Amendments to Australian Accounting Standards – Equity
Method in Separate Financial Statements’
AASB 2014-10 ‘Amendments to Australian Accounting Standards – Sale or
Contribution of Assets between an Investor and its Associate or Joint
Venture’, AASB 2015-10 ‘Amendments to Australian Accounting Standards –
Effective Date of Amendments to AASB 10 and AASB 128’
AASB 2015-1 ‘Amendments to Australian Accounting Standards – Annual
Improvements to Australian Accounting Standards 2012-2014 Cycle’
AASB 2015-2 ‘Amendments to Australian Accounting Standards – Disclosure
Initiative: Amendments to AASB 101’
AASB 2016-2 ‘Amendments to Australian Accounting Standards – Disclosure
Initiative: Amendments to AASB 107’
Effective for
annual
reporting periods
beginning on or
after
Expected to be
initially
applied in the
financial
year ending
1 January 2018
30 June 2019
1 January 2018
30 June 2019
1 January 2019
30 June 2020
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
30 January 2018
30 June 2019
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2017
30 June 2018
The directors anticipate that the adoption of these Standards and Interpretations in future years may have
the following impacts:
AASB 9 – This revised standard provides guidance on the classification and measurement of financial assets,
which is the first phase of a multi-phase project to replace AASB 139 Financial Instruments: Recognition and
Measurement. Under the new guidance, a financial asset is to be measured at amortised cost only if it is
held within a business model whose objective is to collect contractual cash flows and the contractual terms
of the asset give rise on specified dates to cash flows that are payments solely of principal and interest (on
the principal amount outstanding). All other financial assets are to be measured at fair value. Changes in the
fair value of investments in equity securities that are not part of a trading activity may be reported directly
in equity, but upon realisation those accumulated changes in value are not recycled to the profit or loss.
Changes in the fair value of all other financial assets carried at fair value are reported in the profit or loss.
The Group is yet to assess the impact of the new standard. In the second phase of the replacement project,
the revised standard incorporates amended requirements for the classification and measurement of
financial liabilities. The new requirements pertain to liabilities at fair value through profit or loss, whereby
the portion of the change in fair value related to changes in the entity’s own credit risk is presented in other
comprehensive income rather than profit or loss. There will be no impact on the Group’s accounting for
financial liabilities, as the Group does not have any liabilities at fair value through profit or loss. Recent
amendments as part of the project introduced a new hedge accounting model to simplify hedge accounting
requirements and more closely align hedge accounting with risk management activities. There will be no
impact on the Group’s accounting, as the Group does not utilise hedge accounting.
IFRS 15 – Revenue from Contracts with Customers This new standard replaces AASB 118 and AASB 111. It
contains a single model that applies to contracts with customers and two approaches to recognising
revenue. The model features a contract-based five step analysis of transactions to determine whether, how
Lindsay Australia Limited 2016 | Annual Report
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47
much and when revenue is recognised. Initial investigations into the standard show there will be no impact
from the standard on significant contacts. The Group is yet to assess the full impact of the new standard.
AASB 16 Leases – AASB 16 provides a comprehensive model for the identification of lease arrangements
and their treatment in the financial statements of both lessees and lessors. The accounting model for
lessees will require lessees to recognise all leases on balance sheet, except for short-term leases and leases
of low value assets. AASB 16 applies to annual periods beginning on or after 1 January 2019. The directors of
the Company anticipate that the application of AASB 16 in the future may have a material impact on the
amounts reported and disclosures made in the Group's consolidated financial statements. However, it is not
practicable to provide a reasonable estimate of the effect of AASB 16 until the Group performs a detailed
review.
AASB 2014-3 – This amendment to AASB 1 and AASB 11 sets out the business combination accounting
required to be applied to acquisitions of interests in a joint operation that meets the definition of a
business. This will not apply to Lindsay Australia’s assets or recent acquisitions.
AASB 2014-4 – These amendments to AASB116 and AASB138 introduce a rebuttable presumption that the
use of revenue-based depreciation/amortisation methods for intangible assets is inappropriate and for
property, plant and equipment it cannot be used. There will be no impact on the Group’s accounting as it
does not use revenue-based depreciation/amortisation methods.
AASB 2014-9 – These amendments to AASB 127, ASSB 1 and AASB 128 allow entities to use the equity
method of accounting for investments in subsidiaries joint ventures and associates in their separate
financial statements. There is no impact from this standard.
AASB 2014-10 – These amendments clarify the accounting treatment for sales or contributions of assets
between an investor and its associates or joint ventures. They confirm that the accounting depends on
whether the contributed assets constitute a business or an asset. There is no impact from this standard.
AASB 2015-1 – These amendments introduce minor changes to various AASBs. The Group does not expect
the new standard to have a significant impact on its disclosures.
AASB 2015-2 – These amendments to AASB 101 clarify a number of presentation issues and highlight that
preparers are permitted to tailor the format and presentation of the financial statements to their
circumstances and the needs of the users. The Group does not expect the new standard to have a
significant impact on its disclosures.
AASB 2015-5 – These amendments exempt investment entities from consolidating controlled investees.
Controlled investees will be accounted for at fair value through profit and loss, except in limited
circumstances. There will be no impact on the Group as it does not meet the definition of an investment
entity.
AASB 2016-2 – ‘Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to
AASB 107’ Amends AASB 107 ‘Statement of Cashflows’ to require entities to provide disclosures that enable
users of financial statements to evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes. The amendments apply to annual periods beginning
on or after 1 January 2017. The directors of the Company do not anticipate that the application of these
amendments to will have a material impact on the Group's consolidated financial statements.”
Other than as noted above, the adoption of the various Australian Accounting Standards and Interpretations
and IFRSs on issue but not yet effective will not impact the Group’s accounting policies. However, the
pronouncements may result in changes to information currently disclosed in the financial statements. The
Group does not intend to adopt any of these pronouncements before their effective dates.
(x) Parent entity financial information
The financial information for the parent entity, Lindsay Australia Limited, disclosed in Note 35 has been
prepared on the same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries are accounted for at cost in the financial statements of Lindsay Australia Limited.
Lindsay Australia Limited 2016 | Annual Report
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48
Lindsay Australia Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidated legislation.
The head entity, Lindsay Australia Limited, and the controlled entities in the tax consolidated Group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated Group continues to be a stand-alone tax payer in its own right.
In addition to its own current and deferred tax amounts, Lindsay Australia Limited also recognises the
current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax
credits assumed from controlled entities in the tax consolidated Group.
The entities have also entered into a tax funding agreement under which the whole-owned entities fully
compensate Lindsay Australia Limited for any current tax payable assumed and are compensated by Lindsay
Australia Limited for any current tax receivable and deferred tax assets relating to unused tax losses or
unused tax credits that are transferred to Lindsay Australia Limited under the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’
financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding
advice from the head entity, which is issued as soon as practicable after the end of each financial year. The
head entity may also require payment of interim funding amounts to assist with its obligations to pay tax
instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
current amounts receivable from or payable to other entities in the Group.
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.
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries
for no compensation, the fair values of these guarantees are accounted for as contributions and recognised
as part of the cost of the investment.
(y) General
Lindsay Australia Limited is a public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Lindsay Australia Limited
44b Cambridge Street
ROCKLEA QLD 4106
Lindsay Australia Limited 2016 | Annual Report
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49
2. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest
rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group uses different methods to measure different types of risk to which it
is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks, and aging analysis for credit risk. Risk management is undertaken by senior management
and the board of directors. Monthly reports of financial assets and financial liabilities including undrawn
facilities, analysis and details of significant and/or overdue debtors are provided to the board of directors
for review.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents (1)
Trade and other receivables (1)
Available-for-sale financial assets
Financial liabilities
Trade and other payables (2)
Borrowings (2)
2016
$’000
2015
$’000
10,022
50,234
25
16,159
45,303
25
60,281
61,487
32,854
110,567
26,393
89,297
143,421
115,690
(1) Loans and receivables category
(2) Financial liabilities at amortised cost category
Assets pledged as security
Refer to Note 18 for information on assets pledged as security.
(a) Market risk
Foreign exchange risk
The Group does not operate internationally. The Group purchases approximately $5.0 million (5.7%) (2015 -
$5.3 million (6.5%)) of its inventory from overseas sources in overseas currency. The Group is exposed to
foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar,
during the interval, usually not greater than 90 days, between purchase and settlement. Selling prices can
also be adjusted to cover price movements. The Group’s exposure to foreign exchange movements at 30
June 2016 and 30 June 2015 is not significant.
Price risk
The Group is exposed to equity security price risk on unlisted available-for-sale financial assets. The price
risk for the unlisted securities at 30 June 2016 and 30 June 2015 is not significant.
Interest rate risk
The Group’s main interest rate risk arises from borrowings, cash and debtors. Borrowings issued at variable
rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to
fair value interest rate risk. During 2016 and 2015, the Group’s borrowings at variable rate were
denominated in Australian Dollars. The Group’s policy is to fix the rates for plant and equipment purchases
at the time of purchase or leasing. The Group has no significant interest-bearing assets other than cash and
debtors. The Group charges interest on debtor balances that extend beyond agreed terms. Interest is based
on fixed loan rates.
The Group’s cash flow interest rate risk primarily relates to variable rate financial instruments such the bank
overdraft, and other variable rate loans. The proportion of variable rate borrowings to total borrowings of
the Group is 6.0% (2015: 16.9%). The decrease is attributable to a reduction in variable rate borrowing and
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
50
an increase in plant and equipment borrowings at fixed rates. The Group monitors its interest rate exposure
against movements in market interest rates and future interest rate expectations.
No hedging instruments are used.
As at the reporting date, the Group had the following financial instruments subject to variable interest rates
outstanding:
Weighted Average Interest Rate
Cash and cash equivalents
Borrowings
Bank overdraft
Bank loans
Other loans
2016
%
2015
%
2016
$’000
2015
$’000
0.4
-
4.4
3.2
-
1.2
10,022
16,159
4.4
4.6
3.7
-
-
4,439
2,250
770
9,433
2,250
16,711
28,612
At 30 June 2016, if interest rates had changed by +/-1% from the year-end rates, with all other variables
held constant, after-tax profit for the year would have been $39,000 lower/higher (2015 – change of 1%:
$108,000 lower/higher), mainly as a result of higher/lower interest expense from borrowings and
higher/lower interest income from cash and cash equivalents.
(b) Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, and deposits with
trading banks, as well as credit exposures to customers, including outstanding receivables and committed
transactions. For customer’s risk control assesses the credit quality of the customer, taking into account its
financial position, past experience and other factors such as credit reports. Individual risk limits are set
based on credit worthiness and sales expectations. The compliance with credit limits by customers is
regularly monitored by management. The Group has significant concentrations of credit risk as detailed
below. The Group has policies in place to ensure that sales of products and services are made to customers
with an appropriate credit history. Outstanding receivables in excess of $50,000 per customer are reviewed
monthly by the Board of Directors.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as
summarised above.
There are a number of individually significant receivables. These include Government fuel rebates/subsidies
receivable (refer Note 10) of $998,000 (2015: $611,000).
At 30 June 2016 the largest 10 debtors comprised approximately 37% (2015: 36%) of total trade debtors
(the largest individual debtor alone comprised 10% (2015: 7%) of trade debtors). A majority of the trade
debtors are involved in the rural industry in Queensland, New South Wales, Victoria, and South Australia -
approximately 69% (2015: 64%).
At the reporting date cash was held with the Group’s banker and principal financier Westpac Banking
Corporation
(c) Liquidity risk
Liquidity risk is managed by maintaining sufficient cash and the availability of funding, through adequate
amount of at call committed credit facilities, to meet obligations when due. The Group manages liquidity
risk by continuously monitoring cash flows and the maturity profiles of financial assets and liabilities.
Surplus funds are only invested in deposits with trading banks. The Group maintains un-drawn limits on
equipment facilities.
Lindsay Australia Limited 2016 | Annual Report
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51
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the reporting date:
Available facilities
Bank overdraft
Bank loans
Other loans
Lease Liabilities
Amounts utilised
Bank overdraft
Bank loans
Other loans
Lease Liabilities
Unused facilities
2016
$’000
2015
$’000
5,000
15,882
5,860
106,880
5,000
19,632
5,710
97,478
-
(770)
(11,335)
(19,632)
(2,250)
(2,250)
(96,982)
(66,645)
23,055
38,523
Bank overdraft
The bank overdraft facility is subject to annual review, may be drawn at any time and may be terminated by
the bank without notice. The interest rate is variable and is based on prevailing market rates.
Bank loans
Bank loans are generally repayable by monthly instalments of principal and interest over periods of between
12 months and 5 years. The facilities are subject to annual review.
Equipment finance facilities
The consolidated entity is able to draw on these facilities for the acquisition of plant and equipment (by way
of finance lease). Generally:
The facilities are subject to periodic review;
Fixed monthly repayments of principal and interest are arranged over the term of the agreement
at the date of each draw; and
The liabilities are effectively secured as the rights to the leased assets revert to the lessor in the
event of default.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity Groupings based on the
remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows.
Within
1 year
$’000
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
Greater than
5 years
$’000
Total
contractual
cash flows
$’000
Carrying
Amount
liabilities
$’000
32,854
9,781
29,040
71,675
26,393
11,053
18,642
56,088
-
2,139
24,515
26,654
-
4,205
20,476
24,681
-
1,893
52,710
54,603
-
8,987
34,077
43,064
-
-
-
-
-
156
-
156
32,854
13,813
106,265
152,932
26,393
24,401
73,195
123,989
32,854
13,585
96,982
143,421
26,393
22,652
66,645
115,690
At 30 June 2016
Trade Payables
Borrowing (excluding
finance leases)
Finance Leases
Total
At 30 June 2015
Trade Payables
Borrowing (excluding
finance leases)
Finance Leases
Total
Lindsay Australia Limited 2016 | Annual Report
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52
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be recognised for recognition and
measurement or for disclosure purposes. The Group has no significant financial assets or liabilities
measured and recognised at fair value in the financial statements at year end.
The carrying amounts of financial instruments represent reasonable approximations of their fair values,
given their short-term nature.
The net fair value of financial assets and financial liabilities including lease liabilities approximate their
carrying amounts.
3. CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting
policy stated in Note 1(n). The recoverable amounts of cash generating units have been determined based
on value-in-use calculations. These calculations require the use of assumptions. Refer to Note 16 for details
of these assumptions.
4. REVENUES
Sales revenue
Freight cartage
Sale of goods
Total revenue
5. OTHER INCOME
(a) Other income
Insurance recoveries
Rents and sub-lease rentals
Interest
Litigation settlement
Other items
(b) Other income
2016
$’000
2015
$’000
224,331
100,465
324,796
215,984
93,945
309,929
2016
$’000
2015
$’000
1,852
222
627
1,050
1,575
5,326
1,737
215
743
-
1,524
4,219
Net gain on disposal of property, plant and equipment
(598)
793
Lindsay Australia Limited 2016 | Annual Report
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53
6. EXPENSES
Profit before income tax includes the following specific expenses:
Cost of goods sold
Professional fees
Legal fees
Accounting firms
Consultancy fees
Total professional fees
Depreciation
Freehold buildings
Plant and equipment
Leasehold improvements
Amortisation
Plant and equipment under finance lease
Computer software
Customer List
Total depreciation and amortisation
Defined contribution superannuation expense
Impairment losses – trade receivables
Impairment losses - inventory
Minimum Lease payments
7. INCOME TAX
(a)
Income tax expense
Current tax
Deferred tax
Under (over) provision in prior years
Deferred tax is attributable to:
(Increase) decrease in deferred tax assets (Note 15)
Increase (decrease) in deferred tax liabilities (Note 19)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
Tax at the Australian tax rate of 30% (2015: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Share based payments
R&D claim
Sundry items
Under (over) provision in prior years
Income tax expense
(c) Tax losses
2016
$’000
2015
$’000
80,911
75,973
943
215
741
1,899
162
6,540
401
12,238
62
239
19,642
5,757
4
49
6,957
1,021
155
713
1,889
61
7,268
286
8,537
102
-
16,254
5,112
85
(24)
6,993
2016
$’000
2015
$’000
3,547
(216)
-
2,805
(113)
-
3,331
2,692
(99)
(117)
(216)
11,403
3,421
(138)
48
-
(153)
40
(113)
8,858
2,658
14
20
-
3,331
2,692
Unused tax losses for which deferred tax assets have not been recognised at 30%
263
263
All unused and unrecognised tax losses were incurred by Australian entities and comprise capital losses.
Lindsay Australia Limited 2016 | Annual Report
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54
8. FRANKING CREDITS / DIVIDENDS
2016
$’000
2015
$’000
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
(2015: 30%)
3,540
4,242
The above amounts represent the balance of the franking account as at the end of the financial year,
adjusted for:
i.
ii.
Franking credits that will arise from the payment of the amount of the provision for income tax;
Franking debits that will arise from the payment of dividends recognised as a liability at the reporting
date; and
iii. Franking credits that will arise from the receipt of dividends recognised as receivables at the reporting
date.
The impact on the franking account of the dividend recommended by the directors since year end, but not
recognised as a liability at year end, will be a reduction in the franking account of $1,367,000 (2015 -
$1,217,000).
Dividends paid
Interim dividend for the year ended 30 June 2016 of 1.1 cents per share fully franked (at
30%) paid in full on 31 March 2016. (2015: 1.1 cents per share fully franked (at 30%) paid
in full on 31 March 2015 fully franked (at 30%).
3,177
2,799
Interim dividends paid in cash or satisfied by the issue of shares under the dividend re-
investment plan during the years ended 30 June 2016 and 2015 were as follows:
Paid in cash
Satisfied by issue of shares
Final dividend for the year ended 30 June 2015 of 1.0 cents per share fully franked (at
30%) paid on 30 September 2015 (2014 – 0.9 cents per share fully franked (at 30%) paid in
full on 30 September 2014).
Final dividend out of prior year’s profits paid in cash or satisfied by the issue of shares
under the dividend re-investment plan during the years ended 30 June 2015 and 2014
were as follows:
Paid in cash
Satisfied by issue of shares
Dividends not recognised at year end
In addition to the above dividends, since year end the directors have recommended the
payment of a final dividend of 1.1 cents per share fully franked fully franked based on tax
paid at 30% (2015: 1.0 cents per share fully franked (at 30%) paid in full on 30 September
2015).
2,731
446
3,177
2,879
2,489
310
2,799
2,284
2,541
338
2,879
2,034
250
2,284
3,189
2,840
Lindsay Australia Limited 2016 | Annual Report
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9. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Reconciliation of cash and cash equivalents
Cash and cash equivalents at the end of the financial year as shown in the statement of
cash flows is reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
Bank overdrafts
The Group’s exposure to interest rate risk is discussed in Note 2.
10. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for impairment of receivables
Fuel rebates/subsidies
Future GST recoverable
Other receivables
2016
$’000
2015
$’000
10,022
16,159
10,022
-
10,022
16,159
(770)
15,389
2016
$’000
2015
$’000
47,727
(345)
47,382
998
437
1,417
50,234
43,465
(19)
43,446
611
458
788
45,303
Trade receivables are generally due for settlement within 30 days and are therefore classified as current
assets. Trade and other receivables are generally unsecured, non-interest bearing and due 30 to 90 days
from date of recognition, except as otherwise noted.
Other receivables generally arise from transactions outside the usual operating activities of the Group.
(a) Impaired trade receivables
As at 30 June 2016 current trade receivables of the Group with a nominal value of $379,000 (2015 -
$20,000) were impaired. The amount of the provision was $345,000 (2015 - $19,000). The GST component
of the receivables is not considered impaired as this is refundable. The majority of the individually impaired
receivables relate mainly to customers in the rural industry sector who are experiencing difficulties as a
result of seasonal factors.
The ageing of these receivables is as follows:
1 to 2 months
3 to 4 months
Over 4 months
2016
$’000
2015
$’000
192
24
129
345
2
1
16
19
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Movements in the provision for impairment of receivables are as follows:
At 1 July
Provision for impairment recognised/(reversed) during the year
Receivables written off during the year as uncollectible
At 30 June
2016
$’000
2015
$’000
19
330
(4)
345
76
(84)
27
19
The creation and release of the provision for impaired receivables has been included in “bad debt expense”
in the statement of comprehensive income. Amounts charged to the allowance account are generally
written off when there is no expectation of recovering additional cash.
(b) Past due but not impaired
As of 30 June 2016 trade receivables of $14,873,000 (2015 - $11,868,000) were past due but not impaired.
These relate to a number of independent customers for whom there is no recent history of default. The
ageing history of these trade receivables is as follows:
1 to 2 months
3 months
Greater than 3 months
2016
$’000
2015
$’000
10,240
776
3,857
9,560
530
1,778
14,873
11,868
The other classes within trade and other receivables do not contain impaired assets and are not past due.
Based on the credit history of these classes it is expected that these amounts will be received when due.
The Group does not hold any collateral in relation to these receivables.
(c) Foreign exchange and interest rate risk
There are no receivables denominated in foreign currencies. No interest is charged on trade debtors except
for certain debtors who pay late and are charged interest at rates between 1% and 1.5% per month by
agreement.
(d) Fair value and credit risk
The carrying amounts of financial instruments represent reasonable approximations of their fair values,
given their short-term nature. The maximum exposure to credit risk at the reporting date is the carrying
amount of each class of receivable mentioned above. Refer Note 2 for more information on the risk
management policy of the Group and on the credit quality of the entity’s trade receivables.
11. INVENTORIES
Raw materials and stores – at cost
Finished goods – at cost
Provision for obsolescence
Of the above inventory, raw materials and stores are expensed and not charged to cost of sales.
2016
$’000
2015
$’000
2,589
11,252
13,841
(253)
13,588
2,762
12,619
15,381
(204)
15,177
Lindsay Australia Limited 2016 | Annual Report
12. OTHER CURRENT ASSETS
Prepayments
13. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Unlisted equity securities
Unlisted equity securities are traded in inactive markets.
14. PROPERTY, PLANT AND EQUIPMENT
Freehold Land and Buildings
Land - at cost
Buildings - at cost
Accumulated depreciation
Leasehold Improvements
At cost
Accumulated depreciation
Total leasehold improvements
Total property
Plant and Equipment
Plant and equipment
At cost
Accumulated depreciation
Plant and equipment under finance lease
At cost
Accumulated amortisation
Total plant and equipment
Total property, plant and equipment
ANNUAL FINANCIAL REPORT
57
2016
$’000
2015
$’000
6,172
5,157
2016
$’000
2015
$’000
25
25
2016
$’000
2015
$’000
6,430
5,601
7,948
7,869
(389)
13,989
(227)
13,243
5,097
(1,150)
3,947
5,097
(749)
4,348
17,936
17,591
98,074
99,869
(68,691)
(71,591)
29,383
28,278
136,572
97,258
(30,687)
(22,838)
105,885
135,268
153,204
74,420
102,698
120,289
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58
Movements in carrying amounts
Movements in the carrying amounts for each class of property, plant and equipment are shown below.
Leasehold
Improve-
ments
$’000
Plant &
Equipment
$’000
Buildings
$’000
Plant &
Equipment
Under Finance
Lease
$’000
Carrying amount at 30 June 2014
Additions
Disposals
Transfers
Depreciation/amortisation
Freehol
d Land
$’000
2,394
3,207
-
-
-
Carrying amount at 30 June 2015
5,601
Additions
Disposals
Transfers
Depreciation/amortisation
885
(56)
-
-
Carrying amount at 30 June 2016
6,430
1,422
6,281
-
-
(61)
7,642
291
(212)
-
(162)
7,559
371
4,502
-
(239)
(286)
4,348
-
-
-
(401)
3,947
28,204
5,200
(2,051)
4,193
(7,268)
28,278
8,969
(3,684)
2,360
(6,540)
29,383
Assets pledged as security. Refer to Note 18 for information on assets pledged as security.
15. DEFERRED TAX ASSETS
The balance comprises temporary differences attributable to:
Impaired receivables
Employee benefits
Depreciation and amortisation
Payables
Other
Stock obsolescence
Sundry items
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions (refer Note 19)
Net deferred tax assets
Movements
At 30 June 2014
(Charged) /credited to profit or loss
Credit to equity
Liabilities transferred
Over provision in prior years
At 30 June 2015
(Charged) /credited to profit or loss
Credited to equity
Liabilities transferred
Over provision
At 30 June 2016
Lindsay Australia Limited 2016 | Annual Report
Tax
losses
$’000
Employee
Benefits
$’000
Impaired
receivables
$’000
Deprec
& Amort
$’000
Payables
$’000
Other
$’000
-
-
-
-
-
-
-
-
-
-
-
1,977
232
-
74
-
2,283
252
-
-
(81)
2,454
23
(17)
-
-
-
6
97
-
-
-
83
5
-
-
-
88
(41)
-
-
-
341
(16)
-
-
-
325
(11)
-
-
-
136
(51)
135
-
(12)
208
(199)
156
-
-
103
47
314
165
3,083
Total
$’000
91,792
46,669
(2,020)
-
(16,152)
120,289
56,325
(4,069)
-
59,401
27,479
31
(3,954)
(8,537)
74,420
46,180
(117)
(2,360)
(12,238)
(19,341)
105,885
153,204
2016
$’000
2015
$’000
103
2,454
47
314
6
2,283
88
325
2,918
2,702
15
150
165
3,083
(3,083)
-
15
193
208
2,910
(2,910)
-
Total
$’000
2,560
153
135
74
(12)
2,910
98
156
-
(81)
16. INTANGIBLE ASSETS
Computer software
Accumulated amortisation
Goodwill
Accumulated impairment
Customer list
Accumulated amortisation
Total intangible assets
ANNUAL FINANCIAL REPORT
59
2016
$’000
2015
$’000
2,220
(2,155)
65
11,138
(3,577)
7,561
1,801
(239)
1,562
9,188
2,217
(2,093)
124
11,138
(3,577)
7,561
-
-
-
7,685
(a) Movements in carrying amounts
Movements in the carrying amounts for each class of intangible asset are shown below.
Carrying amount at 30 June 2014
Additions – acquired separately
Amortisation
Carrying amount at 30 June 2015
Additions – acquired separately
Amortisation
Carrying amount at 30 June 2016
Computer
Software
$’000
174
52
(102)
124
3
(62)
65
Goodwill
$’000
7,561
-
-
7,561
-
-
7,561
Customer
List
$’000
Total
$’000
-
-
-
-
1,801
(239)
1,562
7,735
52
(102)
7,685
1,804
(301)
9,188
(b) Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the business
segments. The carrying amount of goodwill is attributable to the Rural segment.
The Group tests whether goodwill should be impaired on an annual basis. The recoverable amount of a cash
generating unit (CGU) is determined based on value-in-use calculations which require the use of
assumptions. The calculations use cash flow projections based on financial budgets approved by
management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the
estimated growth rates stated below.
(c) Key assumptions used for value-in-use calculations of the Rural CGU
Gross margin
Terminal growth rate
Free cash growth rate
Discount rate
Assumption
2016 %
17.2
2.0
25.3
9.4
2015 %
17.4
2.0
2.0
9.6
Approach used to determining values
Budgeted gross margin:
Based on past performance and management’s expectations for the future
Terminal growth rate:
This is the growth rate used to extrapolate cash flows beyond the 5 year forecasted
period based off management’s expectations of long-term growth.
Free cash grow rate
Pre-tax discount rate:
Average growth rate over the five-year forecast period. Large capital expenditure in year
one has skewed 5 year average growth rate, decreases to 13.4% from years two to five
based off management expectations for the future.
Reflect specific risks relating to the relevant segments and the countries in which they
operate.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
60
(d) Impact of possible changes in key assumptions
A sensitivity analysis was performed on key assumptions which included reducing the free cash growth rate
from 25.3% to 3.0% and increasing the discount rate from 9.4% to 10.4%. Both scenarios did not result in
impairment.
(e) Assets pledged as security
Refer to Note 18 for information on current assets pledged as security.
(f) Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life using the straight-line method over the
following periods:
Computer Software
Customer list
2 - 3 years
7 years
See note 1(f) for the other accounting policies relevant to impairment of assets, and note 1(n) for the
Group’s policy regarding intangible assets.
17. TRADE AND OTHER PAYABLES
Trade payables
2016
$’000
2015
$’000
32,854
26,393
A major supplier, Orora Limited, has a registered charge over the assets of Lindsay Rural Pty Ltd up to a
maximum amount of $3,200,000 (2015: $3,200,000). At the reporting date the amount payable to Orora
Limited was $178,000 (2015: $411,000).
18. BORROWINGS
Current
Secured
Bank overdraft
Lease liabilities
Bank loans
Total secured current borrowings
Unsecured
Other loans
Total unsecured current borrowings
Total current borrowings
Non-current
Secured
Lease liabilities
Bank loans
Total secured non-current borrowings
Total non-current borrowings
Total borrowing
Lindsay Australia Limited 2016 | Annual Report
2016
$’000
2015
$’000
-
25,329
7,334
32,663
2,250
2,250
770
15,827
7,710
24,307
2,250
2,250
34,913
26,557
71,653
4,001
75,654
75,654
110,567
50,818
11,922
62,740
62,740
89,297
ANNUAL FINANCIAL REPORT
61
(a) Bank overdraft and bank loans
The bank overdraft and bank loans are secured by guarantees by all companies in the consolidated entity
supported by mortgages over all the consolidated entity’s property and other assets.
(b) Lease liabilities
Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of
default. Certain of the lease liabilities are also secured by guarantees by entities in the consolidated entity,
as well as by mortgages/charges over the property and other assets.
(c) Other loans
Other loans consist mainly of a loan from Orora Limited (Orora) which was provided in 2009 pursuant to a
Distribution Agreement. The interest rate payable on the loan is the 90 day bank bill rate plus 1.0% per
annum. The agreement was terminated during the reporting period and currently forms part of legal
dispute with Orora and is classified as current until the dispute is resolved. Refer Note 33 for further details.
(d) Assets pledged as security
All the assets of the consolidated entity are pledged as security for the facilities as noted above.
(e) Fair value
Information about the Group’s fair value of borrowings is provided in Note 2.
(f) Risk exposure
Information about the Group’s exposure to risks arising from borrowings is provided in Note 2.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
62
19. DEFERRED TAX LIABILITIES
The balance comprises temporary differences attributable to:
Prepayments
Inventories
Depreciation and amortisation
Other
Total deferred tax liabilities
Set-off of deferred tax assets pursuant to set-off provisions (refer Note 15)
Net deferred tax liabilities
2016
$’000
2015
$’000
1,103
768
3,026
17
4,914
(3,083)
1,831
1,048
828
3,155
-
5,031
(2,910)
2,121
Movements
Consolidated
At 30 June 2014
Charged /(credited) to profit or loss
At 30 June 2015
Charged /(credited) to profit or loss
At 30 June 2016
20. PROVISIONS
Current
Employee benefits
Non-current
Employee benefits
21. OTHER LIABILITIES
Current
Deferred revenue
Other
Non-current
Other
Prepayments
$’000
Inventories
$’000
Depreciation &
Amortisation
$’000
Other
$’000
Total
$’000
885
163
1,048
55
1,103
769
59
828
(60)
768
3,337
(182)
3,155
(129)
3,026
-
-
-
17
17
4,991
40
5,031
(117)
4,914
2016
$’000
2015
$’000
7,123
6,327
1,056
1,284
2016
$’000
2015
$’000
1,697
519
2,216
2,538
433
2,971
1,364
1,561
Deferred revenue comprises monies paid in advance of delivery of goods or services.
Lindsay Australia Limited 2016 | Annual Report
22. CONTRIBUTED EQUITY
Fully paid ordinary shares
ANNUAL FINANCIAL REPORT
63
2016
$’000
2015
$’000
70,044
67,475
Effective 1 July 1998 the corporations legislation in place abolished the concepts of authorised capital and
par value shares. Accordingly, the parent does not have authorised capital nor par value in respect of its
issued shares.
The movement in fully paid ordinary shares for 2016 and 2015 is reconciled as follows:
Note
No of Shares
Issue Price
$’000
Balance at 30 June 2014
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares for payment of interest
Placement of shares
Share issue transaction costs net of tax benefits
Balance at 30 June 2015
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares pursuant to the Dividend Reinvestment Plan
Placement of shares
Issue of shares to customers - sign on fee
Share issue transaction costs net of tax benefits
Balance at 30 June 2016
(a)
(a)
(b)
(c)
(b)
(a)
(a)
(c)
(e)
(b)
253,469,308
667,250
46.43¢
692,914
36.10¢
266,915
32.94¢
28,888,889
45.00¢
-
283,985,276
850,717
39.80¢
1,028,163
43.39¢
3,942,148
45.00¢
128,640
46.64¢
-
-
289,934,944
54,143
310
250
88
13,000
(316)
67,475
338
446
1,774
60
(49)
70,044
(a) Dividend Reinvestment Plan
The company has established a dividend reinvestment plan under which holders of ordinary shares may
elect to have all or part of their dividend entitlements satisfied by the issue of new ordinary shares rather
than by being paid in cash. Shares are issued under the plan at a discount as determined by the d irectors
but no more than 5% to the market price.
Issues pursuant to the Dividend Reinvestment Plan are:
Date
31 March 2016
30 September 2015
31 March 2015
30 September 2014
Number of Shares
1,028,163
850,717
667,250
692,914
Issue Price
43.39 cents
39.80 cents
46.43 cents
36.10 cents
(b) Shares issued in payment of interest
Shares were issued to Orora Limited pursuant to the Distribution Agreement on interest owing on a loan of
$2,250,000. Refer Note 29 and 33 for further information.
(c) Placement shares
A placement of 3,942,148 ordinary shares (2015: 28,888,889) was made to institutional and sophisticated
investors at 45 cents (2015: 45 cents) per share fully paid to raise $1,773,967 cash on 8 July 2015 (2015:
$13,000,000 cash on 9 June 2015).
(d) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
company in proportion to the number of and amounts paid on the shares held. On a show of hands every
holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll
each share is entitled to one vote.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
64
(e) Ordinary shares
Shares were issued to a number of customers pursuant to the Customer Supply Agreement on execution of
a long term supply contract. Refer Note 29 for further information.
(f) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as going concern, so
that they can continue to provide returns for shareholders and benefits for other stakeholders and to
maintain a cost effective cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, issue new shares, raise or retire debt finance or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by
net debt and total equity. Net debt is calculated as total interest bearing borrowings as shown in the
statement of financial position less cash and cash equivalents. During the year ended 30 June 2016 the
Group did not alter its capital management policy.
The gearing ratios at 30 June 2016 and 30 June 2015 were as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Gearing ratio
2016
$’000
2015
$’000
110,567
89,297
(10,022)
(16,159)
100,545
84,481
73,138
79,858
54%
48%
Lindsay Australia Limited has complied with the financial covenants of its borrowing facilities during the
2016 and 2015 reporting periods.
23. RESERVES
Movements in the Share-based payments reserve are shown below.
Share-based payment reserve
Open at 1 July
Employee share schemes – value of employee services
Close at 30 June
2016
$’000
2015
$’000
536
-
536
491
45
536
Nature and purposes of reserve
The share-based payments reserve is used to recognise the fair value of options issued to employees.
24. RETAINED PROFITS
Retained earnings at the beginning of the year
Profit for the year
Dividends paid or provided
Retained earnings at the end of the year
Lindsay Australia Limited 2016 | Annual Report
2016
$’000
2015
$’000
11,885
8,072
(6,056)
13,901
10,802
6,166
(5,083)
11,885
ANNUAL FINANCIAL REPORT
65
25. CASH FLOW INFORMATION
(a) Reconciliation of Cash Flows from Operating Activities with Profit for the Year
Profit for the year
Depreciation/amortisation
Net (gain)/loss on disposal of property, plant and equipment
Non-cash interest expense payment by issue of shares
Non-cash employee benefits expense-share based payments
Fair value adjustment to financial liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments and other assets
(Increase)/decrease in inventories
(Increase)/decrease in tax assets
(Decrease)/increase in trade and other payables
(Decrease)/increase in tax liabilities
(Decrease)/increase in other liabilities
(Decrease)/increase in provisions
Cash flows from operating activities
(b) Non-Cash Financing and Investing Activities
Acquisition of plant and equipment by means of finance leases
Dividends satisfied by issue of shares
Interest satisfied by issue of shares
26. EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
Earnings used in calculating basic and diluted earnings per share – net profit
Weighted average number of ordinary shares used in calculating basic and diluted
earnings per share
27. AUDITOR’S REMUNERATION
During the year the auditor of the parent entity earned the following remuneration:
Audit or review of financial reports
Taxation and other services
Total remuneration
There was no other remuneration paid to related practices of the auditor.
2016
$’000
2015
$’000
8,072
19,642
598
-
-
-
(5,910)
(985)
1,589
(184)
6,349
890
(841)
569
6,166
16,254
(793)
88
45
11
(1,699)
(303)
(1,886)
(214)
1,827
(2,272)
1,263
1,021
29,789
19,508
46,180
27,478
784
-
560
88
2016
¢
2.8
2.8
2016
$’000
8,072
2015
¢
2.4
2.4
2015
$’000
6,166
Number of
Shares
Number of
Shares
288,769,334 256,088,654
2016
$
2015
$
146,500
146,500
42,850
18,800
189,350
165,300
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
66
28. RELATED PARTY DISCLOSURES
(a) Key management personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2016
$
2015
$
2,348,241
2,466,857
17,792
41,907
212,842
231,487
(93)
45,021
2,578,782
2,785,272
Detailed remuneration disclosures are provided in the remuneration report contained in the directors’ report.
(b) Other transactions and balances with key management personnel
Amounts recognised as revenues and expenses:
Revenues
Cartage revenue received / receivable
Sale of equipment
Expenses
Fees for corporate uniform consultancy
Fees for legal services provided
Amounts receivable / payable to key management personnel and their related parties
at the reporting date
Current receivables – trade debtors
Current payables – trade creditors and accruals
2016
$
2015
$
12,719,061
1,431,634
-
72,667
14,478
-
-
68,625
1,773,199
219,363
-
7,671
The directors believe transactions with key management personnel were on commercial terms and
conditions (unless otherwise stated). Current receivables and payables are unsecured, to be settled cash
and are on the same terms and conditions as non-related parties as disclosed elsewhere in this report.
(c) Loans to key management personnel
There were no loans to key management personnel during the current or prior reporting period.
29. SHARE-BASED PAYMENTS
Lindsay Australia has the following employee share-based plans. These plans have been accounted for in
accordance with the fair value recognition provisions of AASB 2 “Share-based Payment”.
Tax exempt share acquisition plan
The establishment of the Tax Exempt Share Acquisition Plan was approved by shareholders on 5 November
2004. Participation in the plan is open to all employees. The company however does not intend to make any
offers under this plan to directors or senior executives. The plan is in accordance with the Employee Share
Scheme provisions of Division 13A of the Income Tax Assessment Act 1936, which allows the issue of up to a
maximum of $1,000 worth of shares to employees which will be tax exempt for the employees. It is
expected that shares will be issued for no consideration. Offers under the plan must be made to at least
75% of full time and long term part time employees. There have been no shares issued pursuant to the plan
since its approval.
Employee share option plan
Participants are generally assigned shares in settlement of their awards and therefore the awards are
accounted for in accordance with the requirements applying to equity-settled share-based payment
transactions. The exercise period is the period specified by directors at the time of issue. The options vest
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
67
based on service and performance criteria as specified by directors. Options issued under the plans may not
exceed 5% of the total number of issued shares of the company at the date of issue.
Options are designed to reward key personnel for performance over a medium to long term. These Options
form the reward for the Long Term Incentive program. Each year the employee’s performance is assessed
and the aggregation of this performance constructs the longer term incentive. Key terms include:
Options lapse if prior to or during the exercise period the employee is terminated or resigns.
If a person dies, becomes disabled or is made redundant during the exercise period special rules
apply that allow options to be exercised. This is at the boards discretion.
Options granted under the plan carry no dividend or voting rights. When exercisable, each option
is convertible into one ordinary share of Lindsay Australia Limited.
Amounts receivable on the exercise of options are recognised as share capital.
The exercise period of the options was between the vest date and expiry date.
Options are valued as zero exercise priced with no market conditions. The fair value is the share price at
grant date less expected future dividends, discounted where greater than one year.
Lindsay Australia currently issues shares to two senior employees as part of a long term incentive program.
Summary of outstanding options
When exercisable, each option is convertible into one ordinary share of Lindsay Australia Limited. Options
granted are as follows:
Tranche
First
Second
Third
Fair Value per
option (cents)
26.5
22.7
41.9
Grant Date
July 2014
July 2014
July 2015
Normally
Exercisable
Sept 2017
Sept 2019
Sept 2016
Number
Issued
250,000
250,000
62,045
Number
forfeited
116,293
-
20,682
Number
Exercised
-
-
-
Determining option value at grant date
All issued and outstanding options contain no market conditions to vest. All options are non-participating
zero priced options. These options have an exercise price of zero and do not participate in dividends until
exercised. The fair value at the grant date for the issues was determined by taking the share price at grant
date less the present value of dividends discounted at the risk free rate of 2% where the vest date is greater
than one year from grant date.
Non-Employee share based payment (Shares issued in payment of sign-on fees)
During the year LAU issued shares to several customers pursuant to an export oriented customer supply
agreement. Customers were offered a sign on fee to a determined value. Customers could then elect to
receive shares in LAU instead of cash as payment for sign on fees. The number of shares granted was
determined using the consideration offered divided by the average closing share price for the five days prior
to signing the agreement. The fair value of the services (sign on fees) paid by the issue of shares is expensed
in the accounts with the shares issued on the date of execution by the company of the Customer Supply
Agreement.
Expense arising from share based payment transactions
Due to a change in the number of expected options to vest a credit arising from share-based payment
transactions was recognised during the year as part of employee benefit expense ($93) (2015: $45,021).
An expense of $10,000 (2015: Nill) was recognised for customer sign on payments. Therefore, the total
expense for share-based payments was $9,907 (2015: $45,021).
Expense arising from equity settled share-based payment transactions
Expense arising from cash settled share-based payment transactions
Total expense arising from share-based payment transactions
There were no share options exercised during the year.
2016
9,907
-
9,907
2015
45,021
-
45,021
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
68
Movements during the year
The following table illustrates the number and weighted average exercise prices (WAEP) in cents of, and
movements in, share options during the year:
2016
$’000
2015
$’000
Number
WAEP
Number
WAEP
Balance at beginning of year
Granted during the year
Forfeited and lapsed during the year
Exercised during the year
Balance at the end of the year
Exercisable at end of year
392,259
62,045
(112,567)
-
341,737
-
-
-
-
-
-
-
-
500,000
(107,741)
-
392,259
-
-
-
-
-
-
-
Share options outstanding at the end of the year
The share options outstanding at the end of the year had an exercise price of zero (2015 zero) and a
weighted average remaining contractual life of 2.2 years (2015: 3.0 years)
30. SUBSIDIARIES
The Group consists of the ultimate parent entity Lindsay Australia Limited and its wholly owned subsidiaries.
Set out below are the names of the subsidiaries which are included in the consolidated financial statements
shown in this report. All entities were incorporated in Australia.
Name
Lindsay Brothers Holdings Pty Ltd (a), (d)
Lindsay Transport Pty Ltd (a), (d)
Lindsay Brothers Management Pty Ltd (a), (d)
Lindsay Brothers Fuel Services Pty Ltd (a), (d)
Lindsay Brothers Hire Pty Ltd (a), (d)
Lindsay Brothers Plant & Equipment Pty Ltd (a), (d)
P & H Produce Pty Ltd (d)
P & H Produce Trust (d)
Lindsay Rural Pty Ltd (b), (d)
Skinner Rural Pty Ltd (c), (d)
Croptec Fertilizer and Seeds Pty Ltd (c), (d)
Lindsay Fresh Logistics Pty Ltd (d)
Class
Shares/Units
Equity
Holding %
2016
Equity
Holding %
2015
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(a) Lindsay Brothers Holdings Pty Ltd (LBH) is the parent entity of Lindsay Transport Pty Ltd, Lindsay Brothers Management Pty Ltd, Lindsay
Brothers Fuel Services Pty Ltd, Lindsay Brothers Hire Pty Ltd, and Lindsay Brothers Plant and Equipment Pty Ltd. Accordingly, the
parent entity’s interest in these entities (other than LBH) is indirect.
(b) Lindsay Rural Pty Ltd is 50% owned by P&H Produce Trust and 50% owned by the parent entity.
(c) These companies are subsidiaries of Lindsay Rural Pty Ltd.
(d) These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with Class Order 98/1418
issued by the Australian Securities and Investments Commission. For further information refer to Note 32.
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
69
31. SEGMENT INFORMATION
Description of segments
The Group has identified the following reporting segments based on the internal reports that are reviewed
and used by the Board of Directors (chief operating decision maker) in assessing performance and
determining the allocation of resources:
Transport – Cartage of general and refrigerated products and ancillary sales, and;
Rural – Sale and distribution of a range of agricultural supply products.
The segments are determined by the type of product or service provided to customers and the operating
characteristics of each segment. The Group operated in these business segments for the whole of the 2016
and 2015 years. All Group revenue is derived from customers within Australia.
Basis of accounting for purposes of reporting segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as chief decision maker with
respect to operating segments are determined in accordance with accounting policies that are consistent to
those adopted in the annual financial statements of the Group.
The Group does not allocate assets or liabilities to each segment because management does not include this
information in its measurement of the performance of the operating segments.
Inter-segment transactions
An internally determined transfer price is set for all inter-entity sales. All such transactions are eliminated
on consolidation for the Group’s financial statements. Some corporate charges are allocated to reporting
segments based on the segments’ overall proportion of usage within the Group.
Unallocated items
The following items of revenue and expense are not allocated to operating segments as they are not
considered part of the core operations of any segment:
Interest received;
Borrowing costs;
Corporate costs including bad debt expense; and
Income tax expense.
Major customers
No customer of the Group account for more than 10% of external revenue (2015: nil). The largest individual
customer accounts for 10.0 % of external revenues (2015: 7.9%).
Lindsay Australia Limited 2016 | Annual Report
ANNUAL FINANCIAL REPORT
70
Segment information
2016
Revenue
External sales
Inter-segment sales
Other income
Other gains/(losses)
Total segment revenue/income
Reconciliation of segment revenue/income to Group revenue/income
Inter-segment elimination
Interest income
Corporate/unallocated income
Total revenue/income
Segment net profit before tax
Reconciliation of segment profit to Group net profit before tax
Corporate/unallocated
Finance costs
Net profit before income tax
Income tax expense
Profit for year
Depreciation and amortisation
Corporate/unallocated cost
2015
Revenue
External sales
Inter-segment sales
Other income
Other gains/(losses)
Total segment revenue/income
Reconciliation of segment revenue/income to Group revenue/income
Inter-segment elimination
Interest income
Corporate/unallocated income
Total revenue/income
Segment net profit before tax
Reconciliation of segment profit to Group net profit before tax
Corporate/unallocated
Finance costs
Net profit before income tax
Income tax expense
Profit for year
Depreciation and amortisation
Corporate/unallocated cost
Transport
$’000
Rural
$’000
Total
$’000
224,331
4,727
2,279
(615)
230,722
100,465
865
258
17
101,605
22,768
3,544
18,543
369
215,984
4,179
1,543
783
222,489
93,945
567
568
10
95,090
20,123
3,749
15,614
95
324,796
5,592
2,537
(598)
332,327
(5,592)
627
2,162
329,524
26,312
(10,265)
(4,644)
11,403
(3,331)
8,072
18,912
730
19,642
309,929
4,746
2,111
793
317,579
(4,746)
743
1,365
314,941
23,872
(10,532)
(4,482)
8,858
(2,692)
6,166
15,709
545
16,254
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71
32. DEED OF CROSS GUARANTEE
The following companies are parties to a deed of cross guarantee under which each company guarantees
the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the
requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as amended)
issued by the Australian Securities and Investments Commission. The companies include: Lindsay Australia
Limited, Lindsay Brothers Holdings Pty Ltd, Lindsay Transport Pty Ltd, Lindsay Brothers Management Pty Ltd,
Lindsay Brothers Fuel Services Pty Ltd, Lindsay Brothers Hire Pty Ltd, Lindsay Brothers Plant and Equipment
Pty Ltd, P & H Produce Pty Ltd, P & H Produce Trust, Lindsay Rural Pty Ltd, Skinner Rural Pty Ltd, Croptec
Fertiliser and Seeds Pty Ltd, Lindsay Fresh Logistics Pty Ltd.
The above companies represent a ‘closed Group’ for the purposes of the Class Order, and as there are no
other parties to the deed of cross guarantee that are controlled by Lindsay Australia Limited, they also
represent the ‘extended closed Group’
33. COMMITMENTS
Finance lease commitments
Finance lease liabilities are payable exclusive of GST as follows:
Minimum
lease
payments
2016
$’000
29,040
77,225
106,265
Interest
Principal
2016
$’000
3,711
5,572
9,283
2016
$’000
25,329
71,653
96,982
Minimum
lease
payments
2015
$’000
18,642
54,552
73,194
Interest
Principal
2015
$’000
2,815
3,735
6,550
2015
$’000
15,827
50,817
66,644
Less than one year
Between one and five years
Finance leases comprise leases of items of plant and equipment under normal commercial finance lease
terms and conditions. Finance leases do not contain any contingent rental components. No items subject
to finance lease are subleased. Under the leases there are no escalation clauses and there is an option to
acquire the leased assets at the end of the term.
Operating Lease Commitments
Non-cancellable operating leases contracted for but not recognised in the financial
statements are payable inclusive of GST as follows:
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
2016
$’000
2015
$’000
7,782
14,579
3,376
25,737
5,430
17,910
2,650
25,990
Operating leases primarily comprise leases of premises under normal commercial operating lease terms and
conditions. These include rentals, in certain cases, being subject to periodic review for market and/or for
CPI increases as well as options for renewal.
There are no significant items subject to operating leases that are subleased.
Capital Commitments
Commitments for capital expenditure (property, plant equipment, and intangibles)
contracted for but not recognised in the financial statements are as follows:
15,497
30,528
2016
$’000
2015
$’000
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Distribution Agreement
On 13 July 2009 the Group executed a Distribution Agreement with Orora Limited (Orora) which has been
terminated by the parties. Orora paid the Group a signing fee of $2.25 million on execution with interest
payable on an annual basis. The repayment terms of the signing fee and accrued interest is currently part of
the dispute between the parties arising from the termination of the Distribution Agreement. Resolution of
this matter is expected to occur during the 2016-2017 financial year.
34. CONTINGENT LIABILITIES
Guarantees to secure lease obligations
Guarantees to cover Workers policy
Total Guarantees
2016
$’000
2015
$’000
1,462
2,746
4,208
1,511
1,319
2,830
Cross guarantees have been given as described in Note 32.
From time to time the consolidated entity is subject to claims and litigation during the normal course of
business. The directors have given consideration to such matters and are of the opinion that there are no
further material contingent liabilities as at the reporting date that are likely to arise. Other than above to
the directors’ knowledge no matter or circumstance has arisen since the end of the year that has
significantly affected or may significantly affect the operations of the consolidated entity, the results of
those operations, or the state of affairs of the consolidated entity in future financial years.
35. PARENT COMPANY INFORMATION
Information relating to Lindsay Australia Limited is as follows:
Summary financial information
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained profits
Share based payments reserve
Total shareholders’ equity
Profit of the parent entity
Total comprehensive income of the parent entity
Contingent liabilities of the parent entity
Contractual commitments
2016
$’000
2015
$’000
4,819
14,197
303,824
261,064
223,461
227,790
180,340
189,985
70,044
67,475
5,454
536
3,068
536
76,034
71,079
8,442
8,442
1,736
1,736
-
-
-
-
Guarantees entered into by parent entity
Lindsay Australia Limited has guaranteed the Groups external debt in respect of bank overdrafts, financial
leases, and bank loans of subsidiaries amounting to $20,824,048 (2015: $36,122,000) secured by registered
mortgages over property and other assets. The parent entity has also given unsecured guarantees in respect
of financial leases of subsidiaries amounting to $42,223,495 (2015: $22,746,000).
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73
In addition, there are cross guarantees given by Lindsay Australia Limited as described in Note 32. No
deficiencies of assets exist in any of these companies. No liability has been recognised in relation to these
financial guarantees in accordance with the policy set out in Note 1(u) as the present value of the difference
in net cash flows is not significant.
36. EVENTS AFTER THE REPORTING PERIOD
There were no events after the reporting date to disclose.
37. LEGAL PROCEEDINGS
In 2009 the Group executed a seven-year Distribution Agreement with Orora Limited (Orora) which was
terminated in 2015 by the parties prior to the contract term end date. Both parties have made claims for
loss as a result of the termination however the quantum of these claims have not yet been expressed by
either party. Lindsay continues to recognise a current liability for the loan of $2.25 million. The repayment
terms of the signing fee and accrued interest is part of the dispute between the parties also arising from the
termination of the Distribution Agreement. Resolution of this matter is expected to occur during the 2016-
2017 financial year. Given the dispute is proceeding any further disclosure could prejudice the outcome.
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74
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a) The attached financial statements and notes are in accordance with the Corporations Act 2001,
including:
(i) Complying with Accounting Standards, the Corporations Regulations 2001; and other mandatory
professional reporting requirements, and
(ii) Giving a true and fair view of the company’s and consolidated entity’s financial position as at 30
June 2016 and of its performance for the financial year ended on that date; and
(b) There are reasonable grounds to believe that the company will be able to pay its debts as and when
they become due and payable; and
(c) At the date of this declaration, there are reasonable grounds to believe that the members of the
Extended Closed Group identified in Note 32 will be able to meet any obligations or liabilities to which
they are, or may become, subject by virtue of the deed of cross guarantee described in Note 32.
Note 1 confirms that the consolidated financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
John F Pressler
Chairman of Directors
Brisbane, Queensland
29 August 2016
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF LINDSAY AUSTRALIA LIMITED
75
Independent Auditor’s Report to the Members of Lindsay Australia Limited
Report on the Financial Report
We have audited the accompanying financial report of Lindsay Australia Limited, which comprises
the consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility 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 Note 1, the directors also state, in accordance with Accounting Standard AASB101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the financial report.
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76
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Opinion
In our opinion:
a)
the financial report of Lindsay Australia Limited is in accordance with the Corporations Act
2001, including:
i)
ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
b)
the consolidated financial report also complies with International Financial Reporting Standards
as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 29 of the directors’ report for the
year ended 30 June 2016. 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.
Opinion
In our opinion the Remuneration Report of Lindsay Australia Limited for the year ended 30 June
2016 complies with Section 300A of the Corporations Act 2001.
PITCHER PARTNERS
J. J Evans
Partner
Brisbane, Queensland
29 August 2016
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CORPORATE GOVERNANCE STATEMENT
77
CORPORATE GOVERNANCE STATEMENT INTRODUCTION
The Board of Directors of Lindsay Australia Limited is responsible for the corporate governance of the
consolidated entity. The board guides and monitors the business and affairs of Lindsay Australia Limited on
behalf of the shareholders by whom they are elected and to whom they are accountable.
Lindsay Australia Limited’s Corporate Governance Statement is structured with reference to the Corporate
Governance Council’s principles and recommendations, which are as follows:
CONTENTS
Principle 1. Lay solid foundations for management and oversight
Principle 2. Structure the board to add value
Principle 3. Act ethically and responsibly
Principle 4. Safeguard integrity in corporate reporting
Principle 5. Make timely and balanced disclosure
Principle 6. Respect the rights of security holders
Principle 7. Recognise and manage risk
Principle 8. Remunerate fairly and responsibly
PAGE
78
79
81
82
83
83
84
85
Limited’s Corporate Governance practices recognise the Group’s market capitalisation and the complexity of
its operations. For further information on corporate governance policies adopted by Lindsay Australia
Limited, refer to our website: www.lindsayaustralia.com.au
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CORPORATE GOVERNANCE STATEMENT
78
PRINCIPLE 1.
Lay solid foundations for management and oversight
Recommendation 1.1
Recognise and publish the respective roles and responsibilities of the board and management.
During the financial year the Company was governed in accordance with its Corporate Governance Charter
adopted by the board. The Corporate Governance Charter is published on the Company’s website.
The Company should establish the functions reserved to the board and those delegates to senior executives
and disclose those functions.
The Corporate Governance Board charter reserves powers for the board. Functions not reserved to the Board
are delegated to senior management.
Recommendation 1.2
Undertake appropriate checks before appointing a person, or putting forward to security holders a
candidate for election, as a director.
Provide security holders with all material information in its possession relevant to a decision on whether or
not to elect or re-elect a director.
The Group undertakes appropriate checks and evaluation before appointing or re-appointing a person
including putting forward a candidate for election as a director. The Corporate Governance Charter outlines
the process for appointment and retirement of members of the board including the provision of relevant
information to security holders.
Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive setting out the
terms of their appointment.
The Group has entered into agreements with directors and senior executives, these documents together with
the Corporate Governance charter outline roles, responsibilities and expectations.
Recommendation 1.4
The Company Secretary of a listed entity should be accountable directly to the board, through the chair, on
all matters to do with the proper functioning of the board.
The Company Secretary has access to all Board members and the primary functions are to assist and advise
the Board on governance matters and compliance with internal processes. The role of the Company Secretary
is outlined in the board charter which support the recommendations. The Company Secretary’s appointment
and engagement terms reflect the requirements of the recommendations.
Recommendation 1.5
A listed entity should:
(a) Have a diversity policy which includes requirements for the board or a relevant committee of the board
to set mHave a diversity policy which includes requirements for the board or a relevant committee of the
board to set measurable objectives for achieving gender diversity and to assess annually both the
objectives and the entity’s progress in achieving them;
(b) Disclose the policy or a summary of it; and
(c) Disclose at the end of each reporting period the measurable objectives for achieving gender diversity set
by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its
progress towards achieving them, and either:
(1) The respective proportions of men and women on the board, in senior executive positions and
across the whole organisation (including how the entity has defined senior executive for these
purposes); or
Lindsay Australia Limited 2016 | Annual Report
CORPORATE GOVERNANCE STATEMENT
79
(2)
If the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most
recent “Gender Equality Indicators”, as defined in and published under the Act.
The Diversity Policy is published on the Company’s web site. The Board has established the following
objectives in relation to gender diversity. The intention is to achieve the objectives over time as positions
become available. The Board notes that some positions within the Company have time and physical
demands that may make these jobs traditionally unattractive to women
Percentage of women in Group’s workforce
Percentage of women in management positions
Objective
15%
20%
2016
11%
15%
2015
12%
19%
The Company’s Workplace Gender Equality Act public report for 2016 is available on the Company’s
website.
Recommendation 1.6
A listed entity should:
(a) Have and disclose a process for periodically evaluating the performance of the board, its committees and
individual directors; and
(b) Disclose in relation to each reporting period, whether a performance evaluation was undertaken in the
reporting period in accordance with that process.
The Company has adopted processes concerning the evaluation and development of the board, board
committees and individual directors. Procedures include an internal Board performance assessment. The
Corporate Governance Statement outlines the performance review criteria for directors.
During the 2016 financial Year, an internal board performance assessment was performed and reviewed
against the performance criteria. No material weaknesses were identified and no governance changes were
deemed necessary
Recommendation 1.7
A listed entity should:
(a) Have and disclose a process for periodically evaluating the performance of its senior executives; and
(b) Disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the
reporting period in accordance with that process.
The Company’s Corporate Governance Charter details the procedures for performance reviews and evaluation.
Senior executives are subject to formal/informal evaluations against individual performance and business
measures either on an ongoing or annual basis.
PRINCIPLE 2.
Structure the board to add value – Have a board of an effective composition, size, and commitment to
adequately discharge its responsibilities and duties.
Recommendation 2.1
The board of a listed entity should:
(a) Have a nomination committee which:
Is chaired by an independent director; and disclose:
(i) Has at least three members, a majority of whom are independent directors; and
(ii)
(iii) The charter of the committee;
(iv) The members of the committee; and
(v) As at the end of each reporting period, the number of times the committee met throughout the
reporting period and the individual attendances of the members at those meetings
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80
(b)
If it does not have a nomination committee, disclose the fact and the processes it employs to address
board succession issues and to ensure that the board has the appropriate balance of skill, knowledge
and experience, independence and diversity to enable it to discharge its duties responsibly and
effectively
The Company does not have a nomination committee. The board believes that due to the Company’s relatively
small size a nominations committee is not necessary as the board can undertake all functions normally
delegated to a nomination committee. The Selection and Re-appointment of directors Policy contains
procedures for the appointment and resignation of directors. The Board Charter also outlines the requirements
for the composition of the board.
Recommendation 2.2
A listed entity should have and disclose a board skill matrix setting out the mix of skills and diversity that the
board currently has or is looking to achieve in its membership.
The Company’s objective is an appropriate mix of skills, experience and expertise and attributes relevant to
the board in discharging its responsibilities
Experience
Transport Industry
Agriculture Industry
Import Export Industry
Property
Attributes
Integrity
Communication
Commitment
Innovation
Influence
Skills/Expertise
Strategy
Financial
Governance
Risk Management and Safety
Policy, Legal, Compliance
Government & Stakeholders
Culture & Values
Executive Management
Information Technology
Recommendation 2.3
A listed entity should disclose:
(a) The names of directors considered by the board to be independent directors;
(b)
If a director has an interest, position, association or relationship of the type described in box 2.3 of ASX
Corporate Governance Principles and Recommendations, but the board is of the opinion that it does
not compromise the independence of the director, the nature of the interest position, association or
relationship in question and an explanation of why the board is of that opinion; and
(c) The length of service of each director.
Director
Status
Date of appointment
Length of Service
Interest/Association
J F Pressler
Non-Executive.
Independent Director
08/01/1997
R A Anderson Non-Executive.
16/12/2002
Independent Director
M K Lindsay
Executive. Non
Independent
G D Farrell
Non-executive. Non
Independent
26/11/1996
17/11/2005
19 years (at
08/01/2016)
15 years (at
16/12/2015)
19 years (at
26/11/2015)
10 years (at
17/11/2015)
Chief Executive Officer
substantial shareholder
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Recommendation 2.4
The majority of the board of a listed entity should be independent directors.
The Company has not complied with this recommendation, there are four members of the board of directors,
two of which are considered independent directors.
Directors of Lindsay Australia Limited are considered to be independent when they are independent of
management and free from any material business or other relationship that could interfere with, or could
reasonably be perceived to interfere with, the exercise of their unfettered and independent judgement In the
context of director independence, a factor is considered “material” if it is greater than 5% of either sales or
purchases of the Group. In accordance with the definition of independence detailed on the Company’s
website, the following directors of Lindsay Australia Limited are considered to be independent:
J F Pressler
R A Anderson
The board does not consider the expense of increasing the number of independent directors so that a
majority of independent directors is obtained is justified. The board considers the current composition of a
board an appropriate blend of skills and experience relevant to the Company’s business. The board will
assess independence when any new appointments are made.
There are procedures in place, agreed by the board, to enable directors, in furtherance of their duties, to seek
independent professional advice at the Company’s expense.
Recommendation 2.5
The chair of the board of a listed entity should be an independent director, and, in particular, should
not be the same person as the Chief Executive Officer of this entity.
The Company complies with this recommendation. Mr J.F. Pressler, an independent director, is the
Chair. Mr M.K Lindsay is the Chief Executive Officer.
Recommendation 2.6
A listed entity should have a program for inducting new directors and provide appropriate professional
development opportunities for directors to develop and maintain their skills and knowledge needed to
perform their role as directors effectively.
The board assumes responsibility for new board member induction, education and development. The
corporate governance charter requires new directors to be provided with relevant information, induction and
opportunities for training, and the opportunity to take independent advice at the expense of the Company.
PRINCIPLE 3.
Promote ethical and responsible decision-making
Recommendation 3.1
A listed entity should:
(a) Have a code of conduct for its directors, senior executives and employees; and;
(b) Disclose the code or a summary of it:
A formal Code of Ethics forms part of the Corporate Governance Charter that is disclosed on the Company’s
website. The Company has a code of conduct, equal opportunity policy and Employee Workplace and Safety
Handbook applicable to all employees, a summary of these policies is disclosed on the Company’s website.
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PRINCIPLE 4.
Safeguard integrity in corporate reporting
Recommendation 4.1
The board of a listed entity should:
(a) Have an audit committee which:
(i) Has at least three members, all of whom are non-executive directors and a majority of whom are
independent directors
Is chaired by an independent director who is not the chair of the board, and disclose:
(ii)
(iii) The charter of the committee;
(iv) The relevant qualifications and members of the committee; and
(v)
In relation to each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings; or
(b)
If it does not have an audit committee, disclose that fact and the processes it employs that
independently verify and safeguard the integrity of its corporate reporting, including the processes for
the appointment and removal of the external auditor and rotation of the audit engagement partner.
The board has established an audit and risk committee, which operates under a charter approved by the
board. The charter is contained in the Company’s Corporate Governance Charter which is available on the
Company’s website.
The Chairman of the committee is Mr RA Anderson, an independent director. The members of the
committee, meetings and attendances are contained in the Directors’ Report to the Annual Report disclosed
on the Company’s website. All members of the audit and risk committee are non-executive directors. There
is a majority of independent directors on the committee.
The board has delegated the responsibility for the establishment and maintenance of a framework of
internal controls and ethical standards for the management of the consolidated entity to the audit and risk
committee.
It is the board’s responsibility to ensure that an effective internal control framework and risk identification
process exists within the entity. This includes internal controls to deal with both the effectiveness and
efficiency of significant business processes, the safeguarding of assets, the maintenance of proper
accounting records, and the reliability of financial information as well as non-financial considerations such as
the benchmarking of operational key performance indicators.
The committee also provides the board with additional assurance regarding the reliability of financial
information for inclusion in the financial reports.
Recommendation 4.2
The board of a listed entity should, before it approves the entity’s financial statements for a period, receive
from its Chief Executive Officer and Chief Financial Officer a declaration that, in their opinion, the financial
records of the entity have been properly maintained and that the financial statements comply with the
appropriate accounting standards and give a true and fair view of the financial position and performance of
the entity and that the opinion has been formed on the basis of a sound system of risk management and
control which is operating effectively.
In respect of the relevant financial reporting period the Company’s Chief Executive Officer and Chief Financial
Officer provide the board with a declaration in accordance with S.295A of the Corporations Act which is
consistent with Recommendation 4.2.
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Recommendation 4.3
A listed entity that has an Annual General Meeting should ensure that its external auditor attends its AGM
and is available to answer questions from security holders relevant to the audit.
The Company complies with this requirement, representative of the Company’s auditor attends the Annual
General Meeting and be available to answer questions from security holders.
PRINCIPLE 5.
Make timely and balanced disclosure – Promote timely and balanced disclosure of all material matters
concerning the Company.
Recommendation 5.1
Establish written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior executive level for that compliance.
The Company complied with the continuous disclosure requirements of Chapter 3 of the Australian Securities
Exchange Listing Rules. The Corporate Governance Charter contains additional requirements. The
continuous disclosure obligations are reviewed at each board meeting.
PRINCIPLE 6.
Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its governance to investors via its website.
The Corporate Governance Charter is available on the website together with other Company policies. The
website provides:
Details of the key business divisions;
Copies of the annual report;
Other relevant publications; and
Investor information.
Recommendation 6.2
A listed entity should design and implement an investor relations program to facilitate effective two-way
communication with investors.
The board encourages attendance at meetings and is available to shareholders at general meetings. General
meetings are set well in advance of their scheduled date to facilitate maximum attendance by shareholders.
Investors may communicate directly with the company in person or electronically via the website.
Recommendation 6.3
A listed entity should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders
The Company’s notice of meetings is clear, concise and effective, shareholders receive notice of meetings in
hard copy. All general meetings of the Company allow shareholder participation through the opportunity to
ask questions directly of the board prior to a poll or vote.
Recommendation 6.4
A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
The Company’s share registry is maintained electronically through Computershare Limited, a link is provided
on the Company’s website. Contact information for Computershare Limited is also provided in the annual
report. Security holders can also contact the Company electronically via the Company’s website.
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PRINCIPLE 7.
Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a) Have a committee or committees to oversee risk, each of which:
Is chaired by an independent director and disclose:
(i) Has at least three members, a majority of whom are independent directors;
(ii)
(iii) The charter of the committee;
(iv) The members of the committee;
(v) As at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings
(b)
If it does not have a risk committee or a committee that satisfies (a) above, disclose that fact and the
process it employs for overseeing the entity’s risk management framework.
The board has established an audit and risk committee, which operates under a charter approved by the
board. The charter is contained in the Company’s Corporate Governance Statement which is available on the
Company’s website. The chairman of the committee is Mr RA Anderson, an independent director. The
members of the committee, meetings and attendances are contained in the Directors’ Report to the Annual
Report disclosed on the Company’s website. All members of the audit and risk committee are non-executive
directors. There is a majority of independent directors on the committee.
The board has delegated the responsibility for the establishment and maintenance of a framework of
internal controls and ethical standards for the management of the consolidated entity to the audit and risk
committee.
It is the board’s responsibility to ensure that an effective internal control framework and risk identification
process exists within the entity. This includes internal controls to deal with both the effectiveness and
efficiency of significant business processes, the safeguarding of assets, the maintenance of proper
accounting records, and the reliability of financial information as well as non-financial considerations such as
the benchmarking of operational key performance indicators.
The committee also provides the board with additional assurance regarding the reliability of financial
information for inclusion in the financial reports. The board considers risks at each board meeting.
The Board assesse risk and risk issues at each board meeting described further under recommendation 7.2.
Recommendation 7.2
The board or a committee of the board should review the entity’s risk management framework at least
annually to satisfy itself that it continues to be sound and disclose, in relation to each reporting period,
whether such a review has taken place.
The board is responsible for the Company’s risk management framework. Risks are monitored on a regular
basis and prevention or mitigation measures adopted as appropriate. Policies and procedures have been
established for, asset maintenance, workplace health and safety and inventory control. A business risks
checklist is reviewed at each meeting of the board. Details of financial risks are provided in Note 2 to the
Financial Statements.
The board has established an environmental and occupational health and safety committee, details on
meetings, membership and attendance are contained in the Directors Report to the annual Report located
on the Company’s website. It is the board’s responsibility to ensure that the Company observes all regulatory
compliance and to provide a safe workplace by identifying and managing risks in the workplace. The board
has delegated the responsibility for these functions to the environmental and occupational health and safety
committee.
Lindsay Australia Limited 2016 | Annual Report
CORPORATE GOVERNANCE STATEMENT
85
Recommendation 7.3
A listed entity should disclose if it has an internal audit function, how the function is structured and what
role it performs or if it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal control
processes.
The Company does not have an internal audit function. The board considers that due to the relatively small
size of the Company such a function would not be cost effective. Details of financial risks are provided in
Note 2 to the Financial Statements. The board may engage an independent third party to undertake the
equivalent activities of internal audit at any time if it requires.
Recommendation 7.4
A listed entity should disclose whether it has a material exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or intends to manage those risks.
The Company actively considers and monitors business and other risks but does not consider it has material
exposure to these risks. Where possible the Company looks to adopt products or processes that have a
positive environmental or social sustainability impact.
The board has established an environmental and occupational health and safety committee, details on
meetings, membership and attendance are contained in the Directors Report to the Annual Report located
on the Company’s website. It is the board’s responsibility to ensure that the Company observes all regulatory
compliance, is proactive in achieving environmental outcomes consistent with sustainable development, and
to provide a safe workplace by identifying and managing risks in the workplace. The board has delegated
the responsibility for these functions to the environmental and occupational health and safety committee.
PRINCIPLE 8.
Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) Have a remuneration committee which:
is chaired by an independent director; And disclose:
(i) has at least three members, a majority of whom are independent directors; and
(ii)
(iii) the charter of the committee; and
(iv) the members of the committee; and
(v) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the member at those meetings; or
(b)
If it does not have a remuneration committee, disclose the fact and the processes it employs for setting
the level and composition of remuneration for directors and senior executives and ensuring that such
remuneration is appropriate and not excessive
The Company has established a Remuneration Committee. The Remuneration Committee has a formal
charter contained in the Corporate Governance Charter on the Company’s website. The members of the
committee, meetings and attendances are disclosed in the Directors Report to the Annual Report disclosed
on the Company’s website.
The Company does not meet the recommendation of the Remuneration Committee having an Independent
Chairman, however the committee has a majority of independent directors. The current chairman of the
committee is Mr G.D Farrell, as a non-executive director and material shareholder of the Group. The board
considers Mr Farrell appropriately qualified to chair the committee to oversee matters of remuneration
It is the Group’s objective to provide maximum security holder benefit from the retention of a high quality
board and executive team, by remunerating directors and key executives fairly and appropriately with
reference to relevant employment market conditions. To assist in achieving this objective, the Remuneration
Lindsay Australia Limited 2016 | Annual Report
CORPORATE GOVERNANCE STATEMENT
86
Committee links the nature and amount of executive directors’ and officers’ remuneration to the Group’s
financial and operational performance. The expected outcomes of the remuneration structure are:
(i) Retention and motivation of key executives;
(ii) Attraction of quality management to the Group; and
(iii) Performance incentives which allow executives to share the rewards of the success of Lindsay
Australia Limited.
For details on the amount of remuneration and all monetary and non-monetary components for each of the
key management personnel during the year and for all directors, refer to the Remuneration Report contained
in the Directors’ Report. In relation to the payment of bonuses, options and other incentive payments,
discretion is exercised by the board, having regard to the overall performance of Lindsay Australia Limited
and the performance of the individual during the period.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive
Directors. The board is responsible for determining and reviewing compensation arrangements for the
Directors themselves and the Chief Executive Officer and the key management personnel.
The remuneration policy is disclosed in the Remuneration Report contained in the Directors’ Report. There
were no material changes to that policy during the year. Due to the relatively small size of the Company the
only direct link between remuneration and performance of the Company for the Chief Executive Officer and
Senior Executive staff is by the potential issue of options or performance rights over shares. There were no
employee options or performance rights on issue at 30 June 2016 held by key management personnel. At
any review the performance of the Company and the contribution by particular executives’ form part of the
process. Details of the remuneration of the directors and the key management personnel of the Group is
disclosed in the Remuneration Report.
Recommendation 8.2
A listed entity should separately disclose its policies and practices regarding the remuneration of non-
executive directors and the remuneration of executive directors and other senior executives.
Executives will be remunerated by way of salary and statutory superannuation. Senior Executives may
participate in a performance based incentive structure.
The guidelines for non-executive director remuneration published by the Council are:
Non-executive directors should normally be remunerated by way of fees (in the form of cash, non-
cash benefits, superannuation contributions or salary sacrifice into equity); they should not
participate in schemes designed for the remuneration of executives.
Non-executive directors should not receive options or bonus payments.
Non-executive directors should not be provided with retirement benefits other than statutory
superannuation.
The Group complies with the guidelines Refer also to the Remuneration Report contained in the Directors’
Report.
Recommendation 8.3
A listed entity which has an equity based remuneration scheme should:
(a) Have a policy on whether participants are permitted to enter into transactions (whether through the
use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b) Disclose the policy or a summary of it.
The Group has a limited equity based incentive scheme applying to a small number of senior executives only.
Trading in Group securities is regulated by the Securities Trading Policy disclosed on the Group’s website.
Trading activities relating to any short term or speculative gain is prohibited
Lindsay Australia Limited 2016 | Annual Report
SHAREHOLDER INFORMATION
87
SHAREHOLDER INFORMATION
Information relating to security holders as at 11 August 2016.
Shares
DISTRIBUTION OF SHAREHOLDERS
Range
1- 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of Shareholders Number of Shares
100
384
249
837
198
1,768
28,170
1,057,696
2,028,654
30,735,668
256,084,756
289,934,944
Number of holdings less than a marketable parcel of shares – 101 (1,021 shares)
TOP TWENTY SHAREHOLDERS
Name
Number of Shares
% of Issued Shares
WASHINGTON H SOUL PATTINSON
AND GROUP LIMITED
ANKLA PTY LTD
CITICORP NOMINEES PTY LIMITED
BKI INVESTMENT COMPANY LIMITED
MULAWA HOLDINGS PTY LTD
SANDHURST TRUSTEES LTD
MILTON CORPORATION LIMITED
MR THOMAS KELSALL LINDSAY + MR
THOMAS GLEN LINDSAY
POLTICK PTY LTD
LINDSAY SUPER CO PTY LTD
K & D LINDSAY PTY LTD
RM AND DM PELL PTY LTD
J P MORGAN NOMINEES AUSTRALIA
LIMITED
HEADING EAST PTY LTD
MS GRETA MARJORIE LINDSAY
NATIONAL NOMINEES LIMITED
PROCO PTY LTD
MR MATTHEW SINGLETON
JANALA PTY LTD
YESOR PTY LTD
Totals: Top 20 holders
55,526,491
20,197,999
17,221,182
16,783,130
12,937,412
11,926,710
11,787,000
11,364,402
7,065,253
6,219,739
3,222,148
3,022,761
2,837,206
2,549,506
2,328,551
2,255,429
2,100,000
2,000,000
1,919,626
1,917,505
19.15
6.97
5.94
5.79
4.46
4.11
4.07
3.92
2.44
2.15
1.11
1.04
0.98
0.88
0.80
0.78
0.72
0.69
0.66
0.66
195,182,050
67.32
Lindsay Australia Limited 2016 | Annual Report
SHAREHOLDER INFORMATION
88
Substantial Shareholders
The names of substantial shareholders who have notified the company in accordance with section 617B of
the Corporations Act 2001 are:
Name
Mulawa Holdings Pty Ltd
Washington H Soul Pattinson & Group Limited
Mizikovsky Group
Naos Asset Management Limited
BKI Investments Group Limited
Number of Shares
% of Issued Shares
14,857,038
55,526,491
28,180,363
19,980,907
16,341,631
5.14
19.28
9.72
9.92
5.75
Voting Rights of Ordinary Shares
The holders of ordinary shares in the Group are entitled at any general meeting, either in person or by
proxy, on a show of hands, to one vote, and on a poll to one vote for each fully paid share.
On-market Buy Back of Shares
There is no current on-market buyback of shares.
Lindsay Australia Limited 2016 | Annual Report