Lindsay Australia Limited
ABN 81 061 642 733
ASX Code
LAU
Preliminary Final Report
Financial Year Ended 30 June 2018
ASX Rule 4.3A
Information required by Appendix 4E
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2018
Page 1
Lindsay Australia Limited (LAU)
Results for announcement to the market
Revenues
Profit after tax attributable to members
Up
Up
8.0%
25.4%
A$000
30 June 2018
364,882
8,058
A$000
30 June 2017
337,712
6,426
From
From
Dividends
Interim Dividend
Final Dividend
Amount per security
0.8 cent
1.0 cent
Franked amount
per security
100%
100%
Conduit Foreign
Income
Nil
Nil
The Record Date for determining entitlements to the dividend is 14 September 2018.
Management Comments
Refer Annual Report 2018 which has been lodged concurrently with App 4E.
Comparison of half-year profits
Profit after tax attributable to members for the 1st half-year.
Profit after tax attributable to members for the 2nd half-year.
Ratios
Profit before tax / revenue
Profit before tax as a percentage of revenue
Profit after tax / equity interests
Profit after tax attributable to members as a percentage of equity
(similarly attributable) at the end of the year
Earnings Per Security (EPS)
(a) Basic EPS
(b) Diluted EPS
(c) Weighted average number of ordinary shares outstanding
during the period used in the calculation of Basic EPS
NTA backing
$A’000
30 June 2018
$A’000
30 June 2017
5,010
3,048
5,939
487
30 June 2018
30 June 2017
3.1%
8.9%
2.5%
7.5%
30 June 2018
2.7 cents
2.7 cents
30 June 2017
2.2 cents
2.2 cents
293,150,766
290,833,967
30 June 2018
30 June 2017
Net tangible asset backing per ordinary security
27.3 cents
26.0 cents
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2018
Page 2
Dividends
Date the dividend is payable
Record date to determine entitlements to the dividend
If it is a final dividend, has it been declared?
Dividend amount per security
Final dividend:
Interim dividends:
Total dividend per security:
Current year
Previous year
Current year
Previous year
Current year
Previous year
There is no Conduit Foreign Income in 2018 or 2017.
Other disclosures in relation to dividends
28 September 2018
14 September 2018
Yes
Amount per
security
¢
1.0
0.8
0.8
0.8
1.8
1.6
Franked
amount per
security at
30% tax
¢
100%
100%
100%
100%
100%
100%
The company has a dividend reinvestment plan. The last date for election to participate in the plan is 17
September 2018. Shares issued pursuant to the plan are at 5% discount to the volume weighted
average price for the five business days prior to and including the record date.
Issued and quoted securities at end of current year
Category of securities
Total number Number quoted
Issue price per
security
(cents)
Ordinary securities
Changes during current year:
Increases through issues:
Dividend Re-investment Plan
Dividend Re-investment Plan
294,153,227
294,153,227
1,071,954
990,479
1,071,954
990,479
36.00
39.00
2,062,433
2,062,433
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2018
Page 3
Annual meeting
The annual meeting will be held as follows:
Place
Date
Time
Approximate date the annual report will be
available
Compliance statement
McCullough Robertson Auditorium
Level 11, 66 Eagle Street
Brisbane, Qld 4000
Friday 26 October 2018
11:00 am
10 September 2018
This report has been prepared under accounting policies which comply with accounting standards as
defined in the Corporations Act.
This report and the accounts, upon which the report is based, use the same accounting policies.
1. This report does give a true and fair view of the matters disclosed.
2. The entity has a formally constituted audit committee.
3. There are no entities over which control has been gained or lost during the period.
4. This report is based on accounts that have been audited.
Justin Green
Chief Financial Officer and Company Secretary
Date: 23 August 2018
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2018
Page 4
annual report
for the financial year ended
30 June 2018
annual report
for the year ended 30 June 2018
DIRECTORS
GENERAL LEGAL COUNSEL
& COMPANY SECRETARY
CHIEF FINANCIAL OFFICER &
COMPANY SECRETARY
SHARE REGISTER
REGISTERED & PRINCIPAL
ADMINISTRATIVE OFFICE
AUDITOR
BANKER
STOCK EXCHANGE LISTING
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
Broderick T Jones LLB
Mr Justin T Green BBus, CPA
Computershare Investor Services Pty Ltd
117 Victoria Street, West End, QLD 4101
Telephone: 1300 552 270
Website: www.computershare.com.au
152 Postle St, Acacia Ridge, QLD 4110
Telephone: (07) 3240 4900
Fax: (07) 3054 0240
Website: www.lindsayaustralia.com.au
Pitcher Partners
Level 30 Central Plaza 1, 345 Queen Street,
Brisbane, QLD, 4000
Westpac Banking Corporation
65 Molesworth Street, Lismore, NSW, 2480
Lindsay Australia Limited shares are listed on
the Australian Securities Exchange, code LAU.
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
4
6
8
10
15
19
27
28
31
32
33
34
35
35
69
70
73
82
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.
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.
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.
Site locations
Lindsay Rural
Brisbane Shop
Brisbane Warehouse
Berri
Bowen
Brandon
Bundaberg North
Bundaberg Wyllie
Childers
Coffs Harbour
Emerald
Gatton
Innisfail
Invergordon
Leeton
Mareeba
Adelaide
Mildura
Mundubbera
Murwillumbah
Nambour
Stanthorpe
Tully
Werribee
Lindsay Transport
Adelaide
Bowen
Brisbane
Bundaberg
Coffs Harbour
Emerald
Gatton
Innisfail
Mackay
Mareeba
Melbourne
Mildura
Mundubbera
Nambour
Perth (coming soon)
Stanthorpe
Sydney
Tully
Lindsay Fresh
Logistics
Brisbane Markets
Melbourne Markets
4
Lindsay Australia Limited | Annual Report 2018 | About Lindsay Australia
The Lindsay end-to-end 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 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 RURAL – Working with Australian growers
Expert Advice
Horticulture & Agronomy
Irrigation and Fertilisers
Packaging
LINDSAY TRANSPORT – Providing total transport solutions
Transport
Logistics
Cold Storage
Distribution
LINDSAY FRESH LOGISTICS – Managing storage and delivery
Warehousing
Bio-security
Ripening
Delivery
LINDSAY CONNECT – Taking Australian produce to the world
Fresh Produce
Sea Freight
Air Freight
Global Distribution
Lindsay Australia Limited | Annual Report 2018 | About Lindsay Australia
5
chairs’ report
The Group delivered an 8% increase
in revenue to $360 million and a 25%
increase in Statutory Net Profit After Tax
to $8.06 million.
chairs’ report
A focus on improved fleet utilisation
coupled with strategic investment in
facility upgrades, fleet renewal and
technology has delivered a strong
result for the 2018 financial year.
The 2018 financial year (FY18) was in many ways a great year
of progress for the Lindsay Australia Group. Our ambition
to lead the industry for all our stakeholders, and add value
wherever we are, was marked by efforts to transform –
through new technologies, by creating new business and
extending our services and footprint to make our offering
smarter, more efficient, safer and more rewarding.
It is all the more satisfying that we have delivered a year
of great operational progress along with a solid financial
performance. Our revenue grew 8% to $360 million, reflecting
our investment in facility upgrades and focus on improved
ultilisation rates. Net profit after tax grew to $8 million, an
increase of 25%. This strong growth was achieved despite
multiple challenges such as adverse weather significantly
impacting the Wide Bay-Burnett region and unstable fuel
prices negatively impacting the Transport division.
Our investment in a geographically diversified portfolio further
mitigated headwinds during FY18 with less seasonal risk in
the horticultural segment aiding growth. Mareeba, Brisbane
and Adelaide all delivered double digit revenue growth due
to strategic investment in capacity increases resulting in
customer additions and customer volume increases.
FY18 also saw the completion of a number of key projects.
Our Brisbane market facility received a $2.5 million upgrade
(completed May 2018) which will support export growth
and drive volume increases across multiple fresh food
categories. The Off Road Bulk Fuel project (completed June
2018) expanded the Group’s bulk storage facilities with new
refuelling facilities in strategic locations such as Mareeba,
Townsville, Emerald and Dubbo. These tanks coupled with an
upgraded fuel management system will remove reliance on
service stations and facilitate improved fuel cost management.
Our fleet renewal program also continued throughout FY18,
with a further investment of $23 million in new interstate prime
movers, refrigerated trailers and distribution equipment. These
upgrades will deliver improved safety and cost reductions due
to the implementation of latest technology and reduced fleet
maintenance.
Looking ahead, we will continue to expand our reach in FY19
supporting our strategy of mitigating seasonal horticultural
risks by diversifying our geographical footprint. In July we
purchased a distribution facility in the major horticulture
growing region of Bowen, Central Queensland.
The Transport division will also see expansion in FY19 with
a greenfield cold storage project in Perth, Western Australia
(WA). The WA operations will be serviced primarily with the
addition of 35 new refrigerated rail containers and equipment
at a cost of $5.7 million. The expansion into Perth will provide
the national network desired by our existing eastern seaboard
customer base and will be underpinned by a long term
transport supply agreement from a major Perth manufacturer.
A new purpose built distribution hub in Sydney is also
planned. Subject to project financial and legal criteria being
met and planning approvals being obtained, construction
will commence in FY19 with completion expected in 2020.
The proposed facility will include significantly increased cold
storage capacity with purpose built driver accommodation,
workshop facilities and bulk fuel storage.
As we enter the 2019 financial year, we remain focused on
high fleet utilisation rates, improving operational efficiency and
diversifying and expanding our network to continue delivering
stakeholder value. Investment in technology upgrades also
remains a priority with system upgrades expected to drive
productivity, efficiency and safety improvements.
In line with increased earnings, the Board has declared a final
dividend fully franked of 1.0 cent per share. This represents a
full year fully franked dividend of 1.8 cents per share, up from
fully franked 1.6 cents per share in FY17.
On behalf of the board, I thank our CEO Kim Lindsay and all
Lindsay Australia employees for their dedication and hard
work, and for their continuous capacity for improvement
without which our ongoing success would not be possible.
John F Pressler
Brisbane, Queensland,
23 August 2018
Lindsay Australia Limited | Annual Report 2018 | Chairs’ Report
7
Overview of directors and company secretaries
Mr John Frederick Pressler OAM
Mr Michael Kim Lindsay
Mr Richard Andrew Anderson 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.
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.
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 Limited (formerly
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.
8
Lindsay Australia Limited | Annual Report 2018 | Overview of Directors and Company Secretaries
Mr Gregory Damien Farrell
Mr Justin Troy Green
Mr Broderick Thomas Jones
Chief Financial Officer and
Company Secretary
Group Legal Counsel and
Company Secretary
Mr Green was appointed CFO on
31 January 2018 and Company Secretary
on 24 May 2018.
Mr Green has been with the Company for
17 years and has held both group finance
positions in head office and commercial
positions for both the Rural and Transport
divisions.
Justin holds a Bachelor of Business
(accounting) and is a member of CPA
Australia.
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.
Non-executive Director
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 | Annual Report 2018 | Overview of Directors and Company Secretaries
9
operating and
financial report
The Group continues to pursue
new revenue opportunities which
complement the existing operations.
Operating and Financial Report
Summary of Operating Results
For the Financial Year Ended 30 June 2018, the Lindsay Australia Limited Group of companies (the ‘Group’) grew operating revenue by
8.3% to $360 million and achieved an $8.06 million operating profit after tax which was a 25.4% from the previous financial year.
Despite a number of challenges the Group faced in FY2018, key initiatives undertaken in previous years were able to mitigate the
impacts of volatile fuel pricing, adverse weather events and changes in the Groups customer base.
Excluding the impact of fuel tax credits received in FY2017 which related to prior years, the Underlying Net Profit before Tax in FY2018
was $11.224 million. This result represents an increase of $9.047 million from FY2017. The Group remains focused on delivering
improved performance through strategic capacity additions, upgraded technology and fleet renewal and upgrades.
Key Metrics
Operating Revenue
EBITDA
Depreciation & Amortisation
EBIT
Finance Costs
Reported Net Profit Before Tax
Income Tax1
Reported Net Profit After Tax
Underlying Net Profit Before Tax (a)
Key Finance Metrics
Capital Expenditure
Operating Cash Flow
EPS
Divisional Contribution
• Transport
• Rural
Transport Underlying Divisional Contribution (a)
(a) Transport profit contribution for FY2017 included $6.158 million of fuel tax credits relating to prior periods.
2018
$’000
2017 % Change
$’000
360,479
332,858
36,149
35,904
8.3%
0.7%
(19,624)
(22,086)
(11.1%)
16,525
(5,301)
11,224
(3,166)
8,058
11,224
13,818
(5,483)
8,335
(1,909)
6,426
2,177
29,750
18,912
35,160
39,702
2.7 cents
2.2 cents
19.6%
(3.3%)
34.7%
65.8%
25.4%
415.5%
(15.4%)
(52.4%)
24.7%
28,435
25,153
13.0%
2,994
3,405
(12.1%)
28,435
18,995
49.7%
EBITDA ($M)
Group Operating Revenue ($M)
36
36
36
29
28
30
30
360
333
325
308
310
2013
2014
2015
2016
2017
Reported
2017
Underlying
2018
2014
2015
2016
2017
2018
1 In FY2018 tax expense was reduced by Research and development (R&D) tax offsets of $214k. In FY2017 tax expense was reduced by tax
offsets of $202k and the over provision of tax in prior years of $433k also relating to R&D. Excluding these items normalised tax rate remained
at approximately 30%.
Lindsay Australia Limited | Annual Report 2018 | Operating and Financial Report
11
The investment in facility upgrades in Mareeba, Brisbane and Adelaide in prior years provided the platform for revenue growth in
FY2018. On a revenue basis Mareeba grew 30%, Brisbane grew 18% and Adelaide grew 24% from FY2017, collectively contributing
revenue growth of $13.4 million for the Transport division. With customer growth in Mareeba and Adelaide horticulture regions and
customer additions in Brisbane these facilities are expected to provide revenue growth opportunities for future years.
The Group continues to pursue new revenue opportunities which complement the existing operations of both the Transport and Rural
divisions. New opportunities from the import/export segment will be supported by a refrigeration capacity upgrade completed in June at
the Brisbane Market facility. The $2.5 million investment supports volume increases from existing and new customers in various
produce categories including citrus, mangoes and avocadoes.
Cash generated from operating activities normalised in FY2018 to $18.91 million from $39.7 million in FY2017. Group operating cash
fluctuates yearly depending on seasonal debtor payments and deferred creditor terms.
Capital expenditure for FY2018 was $29.8 million taking the three year capital expenditure program to $123 million (FY2016-FY2018).
Capital spend made during the year related to the fleet renewal program with investment in the long haul prime mover fleet and local
distribution fleet, and a small increase in refrigerated trailer equipment, delivering safety improvements and maintenance savings.
Continued capital expenditure is key to delivering future earnings growth for the Group. Capital spend for FY2019 is forecast to
increase by $2 million from FY2018 and will be funded through a combination of cash and finance leases. The Group continue to invest
in fleet renewal of $13.1 million, expansion in the rail container fleet and associated equipment of $5.6 million, facility additions and
upgrades of $8.7 million and information technology programs of $3.1 million.
0.1
0.1
12
Lindsay Australia Limited | Annual Report 2018 | Operating and Financial Report
Divisional performance Transport & Rural
Segment Overview
External Sales
Transport
Rural
Profit Contribution
Transport
Rural
Transport Underlying Divisional Contribution (a)
(a) Transport profit contribution for FY2017 included $6.158 million of fuel tax credits relating to prior periods.
2018
$’000
2017 % Change
$’000
250,555
109,924
227,400
105,458
10.2%
4.2%
28,435
2,994
28,435
25,153
3,405
18,995
13.0%
(12.1%)
49.7%
Transport result
Transport made a divisional contribution in FY2018 of $28.44 million, an increase of 13% on the previous year. Excluding the fuel tax
credits in FY2017 relating to prior periods, underlying segment contribution increased $9.44 million or 49.7%. The result was achieved
despite volatile fuel pricing throughout the year. Fuel pricing peaked in May at an increase of 31 cents per litre (33%) from the
beginning of the financial year. Stable fuel pricing is the preferred operating environment for both Transport and its customers.
The consolidated profit and loss statement shows vehicle operating costs for the year of $57.617 million increasing by $12.437 million.
Excluding the impact of increased fuel expenses and related fuel tax credits in FY2017, vehicle operating costs for FY2018 increased
5.2%. Long haul fleet kilometres travelled increased by 7.6% in the same period. The increase is mainly related to additional fuel tax
credits of $6.158 million in FY2017 relating to prior years, and an increase in fuel operating costs in FY2018 of $5.550 million. A fuel
levy passed onto customers partially recovers pricing swings but overall fuel price volatility negatively impacts the divisions earnings.
Import/Export logistic revenue for Lindsay Fresh increased by 27% in FY2018 to $4.66 million. With increased volumes from existing
produce categories and new customer additions, the Import/Export logistic freight task is forecast to deliver similar revenue growth in
FY2019.
Rural result
Rural division remains key to the Lindsay Group end-to-end customer service model, although FY2018 delivered a number of
challenges for the division. An adverse rain event in the Wide Bay Burnett region in the first half of the year negatively impacted the
division and contribution reduced $411k or 12.1% from FY2017. Despite this, the Rural segment sales remained strong throughout the
year, increasing 4.2%.
The Rural division derives almost all revenue from horticulture customers in regional produce growing areas. Rural has a small number
of regions impacted by the severe drought conditions in regional Australia. Approximately 2.8% of the Rural division revenue is
generated from Stanthorpe in Queensland which is currently experiencing water restraints due to the dry conditions. Extended drought
conditions are not forecast to have a material impact on the Rural divisions future earnings.
Corporate
During FY2018, the Group employed 1366 full time equivalent employees (FTE), this was an increase of 41 FTE’s from FY2017. The
Group takes pride in being an industry leader in the area of innovative technology solutions that provide a safer work environment for
our people. The Group employs the motto “Safety Always” and encourages all employees to make safety a personal value; think SAFE,
act SAFE, be SAFE.
Division
Corporate
Rural
Transport
Total FTE
FY2018
FY2017
Change
66
107
1,193
1,366
63
103
1,159
1,325
3
4
34
41
%
4.8%
3.9%
2.9%
3.1%
Lindsay Australia Limited | Annual Report 2018 | Operating and Financial Report
13
Strategy, risk & governance
Business strategies and prospects for future years
The Group’s overall business strategy remains consistent with prior years. Plans and initiatives for export revenue growth remain a
goal, and investment in new regions to diversify seasonal revenue risks remain in place. Operational performance from equipment
utilisation remains a priority with continual review of latest technology to improve safety and systems.
Investing for future growth and sustainability
•
•
•
•
Facility upgrades to drive operational efficiencies and increased capacity
New facility additions to expand the Lindsay Australia Group footprint
Investing in fleet technology to allow real time tracking of trailers
Safety system investments for improved fatigue management
Transport Division
•
•
•
•
Fleet renewal to deliver modern fleet with latest safety features
Expanding rail container fleet to service existing and new freight lanes
Use of technology to deliver fleet utilisation improvements
Customer reviews to ensure service model meets customer demands
Rural Division
•
•
•
Leverage existing Transport customer relationships to deliver supply chain improvements for both Lindsay Australia Group and its
customer base
Focus on product sales mix
Reducing cost to service
Risk Management
The Lindsay Australia Group 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:
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 KPI’s 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.
Risk and uncertainties that could impact future results
External risks include: weather, fuel pricing, exchange rates, commodity prices, credit risks from customers and regulatory changes
Strategic risks include: making unsuccessful acquisitions and not adapting to continually changing technologies
Operation risks include: labour force management, fleet safety, and succession planning for key personnel
Funding and dividend strategy
Total dividends of 1.8 cents (0.8 cents interim, 1.0 cent final) are proposed out of the FY2018 profit. This represents a payout of
$5,295,000 representing 66% of after tax profit. The board continually evaluates the payout ratio to ensure there are sufficient funds
to sustain and grow the business while considering shareholder’s best interests.
Committee Membership
As at the date of this report, the Group has an Audit and Risk Committee, an Environmental & 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
14
Lindsay Australia Limited | Annual Report 2018 | Operating and Financial Report
directors’ report
The directors of Lindsay Australia
Limited present their report for the
year ended 30 June 2018.
Directors’ Report
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 2018, referred to throughout the report as the Group.
Directors
All of the directors of Lindsay Australia Limited were in office for the full financial year ending 30 June 2018. Information on directors
(including qualifications and experience and directorships of listed companies held by the directors at any time in the last three years),
are set out on pages 8 to 9.
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
16
16
16
16
16
16
15
16
5
-
5
5
5
-
5
5
2
-
2
2
2
-
2
2
12
12
12
12
12
12
11
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 18.
Principal Activities
The principal activities and operations of the Group during the financial year were transportation of refrigerated and general freight, and
merchandising of rural supplies and logistic functions associated with the export and import of horticultural goods through Lindsay
Fresh Logistics.
There were no significant changes in the nature of the activities of the Group during the year.
Consolidated Results
The consolidated operating profit attributable to the Lindsay Australia Limited Shareholders after provision for income tax was
$8,058,000.
Review of Operations
A review of the operations of Lindsay Australia Group during the financial year and the results of those operations are set out on pages
11 to 14.
Significant changes in state of affairs
There were no significant changes to state of affairs during the period.
Events after the reporting date
On 13 July 2018 Lindsay Australia Limited completed settlement of the acquisition of a property and associated plant and equipment in
the key horticulture growing region in Bowen, Queensland for $1.05 million. The property will be utilised for both Transport and Rural
divisions.
There are no other matters or circumstance since the year end that have significantly affected the Group’s operations, results or state of
affairs, or may do so in future years.
Other are events they are outlined in Note 36 of the financial report.
Likely developments and expected results
Refer to Strategy, Risk and Governance section set out on pages 14.
Lindsay Australia Limited | Annual Report 2018 | Directors’ Report
16
Environmental Compliance
The Group’s operations are subject to environmental laws and the National Greenhouse Energy Reporting Act 2007. The Group
complies with this Act.
Company Secretaries
The Company Secretaries of Lindsay Australia Limited and their information (including qualifications, experience and directorships of
listed companies held in the last three years), are set out on page 9.
N L King ceased as a Company Secretary on 22 January 2018.
J T Green was appointed as a Company Secretary on 24 May 2018.
Share Options
During the financial year 400,000 performance rights (options) were granted over unissued shares as part of an employee remuneration
contract. Refer to the remuneration report for further information on share options issued during the year and existing at year-end.
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
Dividends paid to members are as follows:
Final ordinary dividend per share paid on 29th September for the prior financial year
Interim ordinary dividend per share paid on 29th March
2018
cents
0.8
0.8
2017
cents
1.1
0.8
Since the end of the financial year the directors have recommended payment of a final ordinary dividend of $2,941,000 (1.0 cent per
share fully franked) for the year ended 30 June 2018.
Insurance of officers and indemnities
Lindsay Australia Limited agrees to indemnify each director, officer, and company secretary of the Group and of its Australian based
subsidiaries against any liability:
a.
b.
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
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 for 2018 financial year was $87,217 exclusive of GST.
Rounding of Amounts
Unless otherwise stated, 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.
Audit Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is attached on page 27
of this report.
17
Lindsay Australia Limited | Annual Report 2018 | Directors’ 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 impartiality 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 2018:
Non-audit services
Tax compliance services
Other services
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
2018
$
39,600
50,000
2017
$
26,870
-
Ordinary Shares
2,662,055
11,335,581
391,869
14,607,038
Lindsay Australia Limited | Annual Report 2018 | Directors’ Report
18
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.
B.
C.
D.
E.
F.
G.
H.
Principles used to determine the Nature and Amount of Remuneration
Service Agreements
Details of Remuneration Paid to Key Management Personnel
Other Transactions with Key Management Personnel
Share-Based Compensation
Equity Holdings of Key Management Personnel
Loans to Key Management Personnel
Additional Information
20
23
23
24
25
25
26
26
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001.
19
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
A. Principles used to determine the Nature and Amount
of Remuneration
Remuneration Philosophy
It is the Group’s objective to provide maximum shareholder benefit by 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 shareholders at 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 where shareholders
approved an aggregate remuneration of $450,000 per year. The actual amount paid including statutory superannuation during the
financial year ended 30 June 2018 was $229,707 (2017: $225,570).
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 remuneration is 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 2018 and 30 June
2017 are set out on page 23.
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)
Managing Director and Chief Executive Officer
Director (Non-Executive)
Director (Non-Executive)
Appointment Date
8 January 1997
26 November 1996
16 December 2002
17 November 2005
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
20
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.
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 2016 a Long Term Incentive Plan (LTI Plan) was approved by shareholders. The terms and conditions of this plan are detailed in
Note 29. At the 2017 Annual General Meeting shareholders approved the issue of 400,000 options to the CEO, M K Lindsay, pursuant
to the LTI Plan.
The terms of these options are:
•
•
•
•
•
•
•
•
•
each option is to acquire one ordinary share in Lindsay Australia Limited (the Company);
the options were issued for nil consideration;
the employee must remain employed by the Company during the vesting period;
the exercise price to acquire a share is $nil;
the options will vest if a number of performance targets are achieved. Targets are set by the Board. In 2018 the targets were:
–
–
Initial hurdle of Net Profit After Tax of $7.53 million for the financial year ended 30 June 2018, and
achieve aggregate Earnings Per Share Target of 8.09c over the 2018 to 2020 financial years – (EPS Hurdle), with a further
retest at 4 years against a 4 year target (to be determined by the Board) if the hurdle is not met at the 3 year mark;
notwithstanding the vesting conditions outlined above, in accordance with the LTI Plan rules, the Board may, in its absolute
discretion, waive some or all of the vesting conditions such that the options may vest despite a vesting condition not being
satisfied;
the options will not be transferrable other than with the written consent of the Board;
the options will expire on the date which is seven years after the issue date; and
in the event that the CEO leaves the Company, the Board will determine their status as a Good Leaver or Bad Leaver and
determine the treatment of any equity instruments in accordance with the LTI Plan rules.
The Net Profit after Tax hurdle of $7.53 million has been achieved for FY2018.
During FY2017 shareholders approved the issue of 400,000 options to acquire shares exercisable at $nil for each option subject to
satisfying certain conditions. The conditions were not satisfied and the options were forfeited in that year.
During FY2018 and FY2017 no other KMP or other employee has participated in the LTI Plan. It is expected that other KMP’s and
employees will be invited to participate in the LTI Plan in FY2019.
An Employment Contract was entered into with the CEO M K Lindsay during FY2017. This contract provided for Short Term Incentives
(STI’s) between 0% and 60% of base salary on achieving goals. The STI’s earned and paid to the CEO are measured against delivery
of the strategic objectives including:
•
•
•
•
•
•
•
Safety outcomes. Benchmarked internally.
Delivering an updated network with new sites, systems, updating the fleet.
Implementing new logistics systems. Maintaining fleet age below five years.
Growing new sources of revenue, particularly in export.
Maintaining a profitable business.
Preparing to export new lines of produce to overseas markets.
Building staff skills and retaining KMP’s.
21
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
These short term objectives were chosen because of the need to renew infrastructure and set the Group on a future path of growth. For
FY2018 M K Lindsay achieved a STI inclusive of superannuation of $200,000 (FY2017 $82,125).
During FY2017 W T Lorenz was General Manager of the Rural division and a KMP. W T Lorenz’s STI and LTI were calculated based
on the following areas:
•
•
•
•
Sales growth adjusted for inflation.
Divisional profit growth adjusted for inflation
Stock turns to profit (gross margin return on investment).
And discretionary effort.
These measures were chosen because they balance growth in profitability, revenue and working capital. The method used to
calculate each key performance indicator (KPI) is an agreed formulae understood and able to be referenced. The discretionary
amount covers safety, people, and sustainability. As a result of the above measures, W T Lorenz achieved 25% of the possible STI.
The payment of STI’s to other KMP’s is at the discretion of the CEO and the Remuneration Committee, having regard to the overall
performance of the Group and the performance of the individual during the period.
The Key Management Personnel are eligible to participate in the Employee Share Option Plan. No grants of Options were made during
FY2018 and FY2017 pursuant to the Employee Share Option Plan.
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
N L King
J T Green
B T Jones
W T Lorenz
C R Baker
Position
Managing Director and Chief Executive Officer
Term as KMP
Full financial year
Chief Financial Officer and Company Secretary
Ceased 22 January 2018
Chief Financial Officer and Company Secretary
Appointed CFO 31 January 2018
General Counsel and Company Secretary
General Manager Rural
General Manager Rural
Appointed Company Secretary 24
May 2018
Full financial year
Ceased 30 June 2017
Appointed 1 July 2017
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 2018 and 30 June 2017 are provided later in this report.
Use of external consultants
The Remuneration Committee in FY2017 approved the engagement of external consultant The Indelible Link to review and provide
recommendations regarding the remuneration mix and quantum for executives and to assist in designing the future performance and
remuneration framework to cover the Group’s executives. The Indelible Link consultancy services were used in both FY2017 and
FY2018.
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 key management personnel 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. All reports provided by The Indelible
Link are issued 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
A new Long Term Incentive Plan (LTI) was implemented following the review.
The cost of the engagement of The Indelible Link in FY2018 was $11,067 (2017: $28,025).
Voting and comments made at the Group’s 2017 Annual General Meeting
Lindsay Australia Limited received more than 98% of “yes” votes on eligible votes cast by shareholder present or by proxy on its
remuneration report for the 2017 financial year. The company did not receive any specific feedback at the AGM or throughout the year
on its remuneration practices.
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
22
B. Service Agreements
The Group’s policy in operation during FY2018 is that service contracts for CEO and other key management personnel are unlimited in
term but capable of termination on giving twelve months and between four and twelve weeks’ notice respectively. 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 (STI) are based on performance against a key set of
performance measures which are aligned to shareholder outcomes. Long term incentives (LTI) include a combination of performance
measures and tenure.
Compensation levels are reviewed each year to meet the principles of the remuneration policy.
During FY2017 a new CEO contract was implemented with STI’s and LTI’s. The STI earned and paid to the CEO for FY2018 was
measured against delivery of the strategic objectives outlined under “structure” above. STI is paid as a portion of fixed remuneration
between 0 and 60%.
For FY2017 W T Lorenz had a specific contract containing fixed remuneration and an STI between 0 and 40% of fixed remuneration.
An LTI is determined using the STI percentage.
N L King had STI & LTI’s determined by the Remuneration Committee and based on specific measure against overall business
performance, delivery of the strategy, contribution to profit and overall leadership.
All remaining management receive STI’s at the discretion of the CEO and Remuneration Committee based on non-contracted
discretionary measures.
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 accruals.
Short-term
benefits
Long-term
benefits
Post-employment
benefits
Share-based
payments (b)
Total
Performance
related
Salary
and fees
$
Cash
Bonus (a)
$
Non-monetary
benefits
$
Long
service
leave
$
Superannuation
Options
%
$
$
$
Non-executive directors
J F Pressler (Chairman)
2018
2017
R A Anderson
2018
2017
G D Farrell
2018
2017
Sub-Total
2018
Sub-Total
2017
83,911
55,960
62,933
61,800
62,933
61,800
209,777
179,560
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,972
34,268
5,979
5,871
5,979
5,871
19,930
46,010
-
-
-
-
-
-
91,883
90,228
68,912
67,671
68,912
67,671
- 229,707
- 225,570
Executive director and other key management personnel
M K Lindsay (Managing Director & Chief Executive Officer) (g)
2018
2017
888,690 257,648
6,629
822,513 127,000
-
12,564
12,579
42,352
35,000
48,626 1,256,509
- 997,092
NA
NA
NA
NA
NA
NA
-
-
24
13
23
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
Short-term
benefits
Long-term
benefits
Post-employment
benefits
Share-based
payments (b)
Total
Performance
related
Salary
and fees
$
Cash
Bonus (a)
$
Non-monetary
benefits
$
Long
service
leave
$
Superannuation
Options
%
$
$
$
Non-executive directors
J T Green (Chief Financial
Officer)
(c)
2018
133,653
10,000
-
30,204
12,444
- 186,301
N L King (Chief Financial Officer) (d)
2018
2017
233,426
-
275,791
7,711
-
-
B T Jones (General Counsel & Company Secretary)
2018
2017
280,991
-
226,600
17,000
C R Baker (General Manager
Rural) (e)
(g)
-
-
-
-
-
-
18,750
27,646
25,000
21,231
- 252,176
- 311,148
- 305,991
- 264,831
2018
277,274
60,000
55,652
23,754
26,425
- 443,105
W T Lorenz (General Manager Rural) (f)
2017
358,745
46,424
-
-
1,814,034 327,648
62,281
66,522
30,000
124,971
4,530 439,699
48,626 2,444,082
1,683,649 198,135
-
12,579
113,877
4,530 2,012,770
Total 2018
2,023,811 327,648
62,281
66,522
Total 2017
1,863,209 198,135
-
12,579
144,900
159,887
48,626 2,673,788
4,530 2,238,340
Sub-Total
2018
Sub-Total
2017
5
-
2
-
6
14
11
15
10
14
9
(a) During 2017 W.T Lorenz and N.L King share options were modified to vest and exercise through cash settlement. See Note 29 for further information.
(b) Share-based option payments are the probable number to vest at the grant date value.
(c) J T Green appointed KMP on 31 January 2018
(d) N L King ceased to be a KMP on 22 January 2018
(e) C R Baker appointed KMP on 1 July 2017
(f) W T Lorenz ceased to be a KMP on 30 June 2017
(g) Total remuneration includes cash bonuses which have been paid during the financial year and also bonuses that have been accrued and paid after the end of
the financial year. In FY2018 bonus payments accrued and paid after year end included M K Lindsay ($200,000), J T Green ($5,475) and C R Baker ($16,425).
There were no bonus payments accrued at the end of the 2017 financial year, a bonus of $57,648 was paid to M K Lindsay in FY2018 relating to FY2017. The
cash bonuses shown for M K Lindsay in 2017 of $127,000 relate to FY2016.
D. Other Transactions with Key Management Personnel
Amounts recognised as revenues and expenses (exclusive GST):
Revenues
Cartage revenue received / receivable from and the sale of rural supplies to entities associated with G D Farrell
Cartage revenue received / receivable from and the sale of rural supplies to entities associated with J F Pressler
Expenses
Fees for corporate uniform consultancy provided by entities associated with M K Lindsay
Amounts receivable / payable to key management personnel and their related parties at the reporting date
Current receivables – trade debtors
2018
$
1,447,421
17,102,017
18,549,438
18,055
898,928
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 in cash and are on the same terms and conditions as non-
related parties as disclosed elsewhere in this report.
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
24
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 (LTI Plan). The LTI Plan 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
October 2017
Fair Value per
option (cents)
Date vested and
exercisable
22.7
36.5
August 2019
October 2020
Expiry
Date
Sept 2019
Nov 2024
Exercise
price
-
-
Vested
-
-
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 at 30 June 2018 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
Number of options
granted during the
year
Value of options
at grant date (a)
Number of
options
forfeited
Number of
options vested
during the year
M K Lindsay
400,000
145,881
-
-
(a) 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 are determined using the share price at the grant date
less the dividend discounted where the vesting date is greater than one year. The number and movement for all options during FY2018
is as follows.
Name
Balance 30 June 2017 Granted
Forfeited
% Forfeited
Balance 30 June 2018
during year
Modified, vested
and Exercised
during year
Unvested
Vested
W T Lorenz
157,315
M K Lindsay
-
-
-
-
(19,488)
400,000
-
-
-
4%
0%
Unvested
Vested
137,827
400,000
-
-
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 part of the Long Term Incentive Plan. Vested options above were cash settled.
25
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
(ii) 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
2018 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
B T Jones
J T Green
N L King
C R Baker
W T Lorenz
Balance at
30 June 2017
Upon
appointment
Net change
other
Balance at
30 June 2018
2,659,356
11,335,581
391,869
14,857,038
-
-
-
-
-
-
-
-
-
-
31,632
-
58,419
-
2,699
2,662,055
-
-
11,335,581
391,869
(250,000)
14,607,038
-
-
-
-
-
-
31,632
-
58,419
-
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.
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
$
2014
2015
2016
2017
2018
2,345,032
2,785,272
2,578,782
2,238,340
2,673,788
EPS
¢
2.8
2.4
2.8
2.2
2.7
Dividends
¢
Share Price
¢
2.0
2.1
2.2
1.6
1.8
34.0
45.0
47.5
38.0
38.0
This report is made in accordance with a resolution of the directors.
John F Pressler
Chairman of Directors
Brisbane, Queensland
23 August 2018
Lindsay Australia Limited | Annual Report 2018 | Remuneration Report (Audited)
26
The Directors
Lindsay Australia Limited
152 Postle Street
ACACIA RIDGE QLD 4110
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2018, to the best of my knowledge and belief there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001; and
no contraventions of APES110 Code of Ethics for Professional Accountants.
This declaration is in respect of Lindsay Australia Limited and the entities it controlled during the period.
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
23 August 2018
27
Lindsay Australia Limited | Annual Report 2018 | Auditor’s Independence Declaration
financial
statements
Contents
Consolidated statement of profit and loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
1.
2.
3.
4.
5.
6.
7.
Significant Accounting Policies
Financial Risk Management
Critical Accounting Estimates & Judgements
Revenues
Other Income
Expenses
Income Tax
Franking Credits / Dividends
Cash and Cash Equivalents
8.
9.
10. Trade and Other Receivables
11.
12. Other Current Assets
Inventories
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 Earnings
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 period
Directors’ Declaration
Shareholder Information
Distribution of Shareholders
Top Twenty Shareholders
29
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
31
32
33
34
35
35
43
46
46
46
47
48
49
50
50
51
51
51
52
53
53
55
55
56
56
57
57
58
58
59
59
59
60
60
63
64
66
66
67
67
68
69
82
82
82
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. It’s Registered Office and Principal
Place of Business is:
Lindsay Australia Limited
152 Postle Street
ACACIA RIDGE QLD 4110
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 23 August 2018. The directors have the power to amend and
reissue the financial statements.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
30
Lindsay Australia Limited
Consolidated statement of profit and loss and
other comprehensive income
for the year ended 30 June 2018
Revenue
Other Income
Expenses
Changes in inventories
Purchase of inventories
Employee benefits expense
Subcontractors
Depreciation and amortisation
Vehicle operating charges
Finance costs
Insurance
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
4
5
2018
$’000
2017
$’000
360,479
332,858
4,403
4,854
(1,071)
530
(87,645)
(84,500)
(108,079)
(99,964)
(31,212)
(30,350)
6
6
(19,624)
(22,086)
(57,617)
(45,180)
(5,301)
(1,452)
(2,264)
(9,661)
(1,455)
(85)
(5,483)
(1,412)
(2,605)
(8,662)
(1,570)
(684)
(28,192)
(27,411)
11,224
(3,166)
8,058
-
8,335
(1,909)
6,426
-
8,058
6,426
Cents
Cents
2.7
2.7
2.2
2.2
7
24
26
26
The above Consolidated Statement of Profit and Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
31
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
Lindsay Australia Limited
Consolidated statement of financial position
for the year ended 30 June 2018
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Other
Current Tax Assets
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 Earnings
Total Equity
Note
2018
$’000
2017
$’000
9
10
11
12
13
14
16
17
18
20
21
18
19
20
21
22
23
24
14,716
48,862
13,010
4,260
1,087
25,037
43,946
14,308
4,302
-
81,935
87,593
25
25
168,200
161,125
10,090
10,630
178,315
171,780
260,250
259,373
30,614
39,280
-
8,982
2,831
37,074
36,436
684
7,788
2,701
81,707
84,683
82,427
84,279
1,634
1,262
2,813
795
1,074
2,333
88,136
88,481
169,843
173,164
90,407
86,209
71,656
70,884
565
18,186
90,407
515
14,810
86,209
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
32
Lindsay Australia Limited
Consolidated statement of changes in equity
for the year ended 30 June 2018
At 30 June 2016
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Dividends reinvested /(paid) during year
Employee share schemes – value of employee services
At 30 June 2017
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Dividends reinvested /(paid) during year
Employee share schemes – value of employee services
At 30 June 2018
Note Contributed
equity
$’000
70,044
-
-
-
840
-
70,884
-
-
-
772
-
71,656
8
8
Share-based
payments
reserve
$’000
536
-
-
-
-
(21)
515
-
-
-
50
565
Retained
profits
$’000
13,901
6,426
-
6,426
(5,517)
-
Total
equity
$’000
84,481
6,426
-
6,426
(4,677)
(21)
14,810
86,209
8,058
-
8,058
(4,682)
-
8,058
-
8,058
(3,910)
50
18,186
90,407
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
33
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
Lindsay Australia Limited
Consolidated statement of cash flows
for the year ended 30 June 2018
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
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
Note
2018
$’000
2017
$’000
397,496
379,123
(369,625)
(331,254)
441
(4,099)
(5,301)
18,912
518
(3,202)
(5,483)
39,702
25
3,434
2,753
(2,349)
(15,654)
(123)
(566)
962
(13,467)
6,146
(10,332)
22,807
(9,333)
(22,099)
(20,017)
(3,910)
(4,677)
(30,195)
(11,220)
(10,321)
25,037
14,716
15,015
10,022
25,037
9
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
34
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. The Group 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 is a for-profit entity limited by shares. Shares in Lindsay Australia Limited are publicly traded on the Australian
Securities Exchange (Code: LAU). The financial statements relate to the consolidated entity consisting of Lindsay Australia Limited and
its subsidiaries.
The full board of Lindsay Australia Limited authorised the issuance of the consolidated financial statements for the year ended 30 June
2018, on 23 August 2018.
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 authorised 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 basis, except for 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 (measured at fair value).
The financial report is presented in Australian dollars and unless otherwise stated 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 were a number of new and amended accounting standards issued by the AASB which were applicable for reporting periods
beginning on 1 July 2017. All the mandatory new and amended accounting standards issued that are relevant to the operations and
effective for the current reporting period have been adopted. 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 Lindsay Australia Limited also comply with International Financial Reporting Standards (IFRS)
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 Lindsay Australia Limited (the Company) and its controlled
subsidiaries (the ‘Group’) as at 30 June 2018. Control occurs when the Company 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 the Company 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 the Company’s voting rights and potential voting rights.
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.
35
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent Company 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 the Group 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 sum 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 acquisition 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.
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 import and export 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.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
36
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.
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 statement of cash flows, 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 to the extent they are drawn on the statement of financial position.
37
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
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.
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 market 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.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as interest expense.
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-derivatives 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.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
38
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.
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 (DV) or straight line (SL) 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%
7.5-30%
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(f)).
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.
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.
39
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
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 and paid within 7 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.
The liabilities for long service leave and annual leave which are not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service are 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 the Employee Share Option Plan 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.
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 derecognised when the obligation specified in the contract is discharged, cancelled or expired. The difference between
the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
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.
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.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
40
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.
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
Effective for annual
reporting periods
beginning on or after
Expected to be initially
applied in the financial
year ending
AASB 9 ‘Financial Instruments’, and the relevant amending standards
1 January 2018
30 June 2019
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 2014-10 ‘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’
1 January 2018
30 June 2019
1 January 2019
30 June 2020
30 January 2018
30 June 2019
AASB 2016-5 Amendments to Australian Accounting Standards - Classification
and Measurement of Share-based Payment Transactions
1 January 2018
30 June 2019
AASB Interpretation 22 Foreign Currency Transactions and Advance
Consideration
1 January 2018
30 June 2019
The directors anticipate that the adoption of these Standards and Interpretations in future years may have the following impacts:
AASB 9 – Financial Instruments, addresses the classification, measurement and derecognition of financial assets and financial
liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The standard will be applicable
retrospectively.
There will be no impact on the accounting for the Group’s financial liabilities as the new standard only impacts financial liabilities
designated at fair value through profit or loss. The Group has one small holding classified as available for sale financial assets. No
significant accounting impact is anticipated as these holdings are small.
41
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
The Group has not yet completed its detail assessment of the classification and measurement of financial assets, debt instruments
currently available for sale how the hedging arrangements and the impairment of financial instruments under the expected credit loss
model will be affected by the new rules; however, the impact is not expected to be material.
The new standard also introduces expanded disclosure requirements and changes in presentation. The Group’s assessment of the
potential accounting, disclosure and financial impacts on adoption of the standard will continue up to the date of application.
AASB 15 – Revenue from Contracts with Customers. This new standard replaces AASB 118 and AASB 111. The new standard is
based on the principle that revenue is recognised when control of a good or service transfers to a customer. The standard permits
either a full retrospective or a cumulative catch-up approach for the transition. 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 much and when revenue is recognised.
The Group earns revenue from providing goods and services to customers. Consistent with the requirements of AASB15 and the nature
of the Groups performance obligations to its customers, the Group will recognise revenue with respect to the provision of goods at
specific points in time (typically when the goods are physically transferred to the customers) and recognise revenue with respect to the
provision of services over the period in which the services are provided to the customers.
The Group intends to adopt this standard effective from the 1 July 2018 and apply the cumulative catch-up approach which will result in
a debit to opening retained earnings of $486,000.
AASB 16 Leases – This new standard replaces AASB 117 and some lease-related Interpretations. It requires all leases to be
accounted for “on balance sheet” by lessees, other than for short-term and low value asset leases. The standard also provides new
guidance on the definition of a lease and on sale and leaseback accounting and requires new and different disclosures about leases.
The accounting requirements for lessors remains largely unchanged from AASB 117. If AASB 16 were adopted from 1 July 2019 based
on the leases in effect at 30 June 2018, this would have a material impact on the transactions and balances recognised in the financial
statements, specifically:
•
•
•
lease assets and financial liabilities on the balance sheet would increase on 1 July 2019 by approximately $39.1 million and $41.5
million, respectively.
retained earnings would be reduced on 1 July 2019 by approximately $2.4 million because the carrying value of the assets reduce
more quickly than the carrying amount of the lease liabilities.
in FY2020 total expenses would be approximately $0.4 million higher, as depreciation and interest expense would increase by
approximately $6.6 million whilst rent expense would decrease by approximately $6.2 million.
The Group does not intend to adopt AASB 16 before its effective date on 1 July 2019.
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 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment
Transactions. The amendments made to AASB 2 clarify the measurement basis for cash-settled share-based payments and the
accounting for modifications that change an award from cash-settled to equity-settled. They also introduce an exception to the
classification principles in AASB 2. Where an employer is obliged to withhold an amount for the employee’s tax obligation associated
with a share-based payment and pay that amount to the tax authority, the whole award will be treated as if it was equity-settled
provided it would have been equity-settled without the net settlement feature. The impact of this standard will not be material.
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 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.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
42
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. The Registered Office and
Principal Place of Business is:
Lindsay Australia Limited
152 Postle Street
ACACIA RIDGE QLD 4110
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 (a)
Trade and other receivables (a)
Available-for-sale financial assets
Financial liabilities
Trade and other payables (b)
Borrowings (b)
(a) Loans and receivables category
(b) Financial liabilities at amortised cost category
Assets pledged as security
Refer to Note 18 for information on assets pledged as security.
a.
Market risk
2018
$’000
2017
$’000
14,716
48,862
25
25,037
43,946
25
63,603
69,008
30,614
121,707
152,321
37,074
120,715
157,789
The Group does not operate internationally however does have some revenue generated from internationally based customers
denominated in Australian Dollars. Revenue from international customers in FY2018 accounted for 0.32% (FY2017: nil) of Group
revenue.
The Group purchases approximately $2.7 million (2.9%) (2017 - $2.8 million (3.1%)) 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 2018 and 30 June 2017 is not significant.
43
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
b.
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 2018 and 30 June 2017 is not significant.
c.
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 2018 and 2017,
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 as the bank overdraft, and other
variable rate loans. The proportion of variable rate borrowings to total borrowings of the Group is 13.3% (2017: 15.5%). 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 loans
2018
%
0.1%
2017
%
0.0%
2018
$’000
2017
$’000
14,716
25,037
4.85%
4.60%
-
-
16,181
30,897
18,711
43,748
At 30 June 2018, 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 $10,000 lower/higher (2017 – change of 1%: $45,000 lower/higher), mainly as a result of higher/lower
interest expense from borrowings and higher/lower interest income from cash and cash equivalents.
d.
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 customers, 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. Management regularly monitors the compliance of
credit limits by customers. 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. The Board of Directors reviews
outstanding customer receivables in excess of $50,000 monthly.
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 $653,000 (2017: $671,000).
At 30 June 2018 the largest ten debtors comprised approximately 31% (2017: 35%) of total trade debtors (the largest individual debtor
comprised 6% (2017: 8%) of trade debtors). The majority of the trade debtors are involved in the rural industry in Queensland, New
South Wales, Victoria, and South Australia - approximately 62% (2016: 69%).
At the reporting date cash was held with the Group’s banker and principal financier Westpac Banking Corporation.
e.
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 | Annual Report 2018 | Notes to the consolidated financial statements
44
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 loans
Other loans
Lease Liabilities
Unused facilities
Bank overdraft
2018
$’000
2017
$’000
5,000
19,389
1,384
5,000
23,770
2,150
132,434
109,629
(19,389)
(22,809)
(1,233)
(2,000)
(101,085)
(95,906)
36,500
19,834
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 3 years
with options to refinance. The facilities are subject to annual review.
Other loans
The 2018 balance of other loans includes an amount of $1,233,000 (2017: $2,000,000) that relates to an interest free working capital
loan provided by Visy Board Pty Ltd. The loan is due to be paid in full by 30 June 2020.
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.
At 30 June 2017
Trade Payables
Borrowing (excluding finance leases)
Finance Leases
Total
At 30 June 2018
Trade Payables
Borrowing (excluding finance leases)
Finance Leases
Total
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
37,074
8,478
-
-
7,362
13,169
31,398
26,973
45,689
-
-
-
37,074
29,009
104,060
37,074
24,809
95,906
76,950
34,335
58,858
-
170,143
157,789
30,614
7,893
-
13,702
-
-
35,161
26,406
48,571
73,668
40,108
48,571
-
-
-
-
30,614
21,595
30,614
20,622
110,138
101,085
162,347
152,321
45
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
f.
Fair value estimation
The fair value of financial assets and financial liabilities must be determined 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.
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.
The Group makes judgements as to its ability to collect outstanding receivables and provides for the portion of receivables when
collection becomes doubtful. 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. Refer note 10 for details of impaired receivables and the allowance provided.
4. Revenues
Freight cartage
Sale of goods
Total revenue
5. Other Income
Other income
Insurance & other recoveries
Rents and sub-lease rentals
Interest
Other items
2018
$’000
250,555
109,924
360,479
2017
$’000
227,400
105,458
332,858
2018
$’000
2017
$’000
1,563
210
441
2,189
4,403
2,448
197
518
1,691
4,854
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
46
6. Expenses
Profit before income tax includes the following specific expenses:
Cost of goods sold
Depreciation
Freehold buildings
Plant and equipment
Leasehold improvements
Amortisation
Plant and equipment under finance lease
Customer list
Computer software
Total depreciation and amortisation
Vehicle Operating Expenses
Vehicle Operating Expenses
Fuel tax credits relating to prior periods (a)
Total vehicle operating expenses
Defined contribution superannuation expense
Impairment losses – trade receivables
Impairment losses - inventory
Minimum Lease payments
2018
$’000
2017
$’000
88,716
83,971
392
5,089
978
327
5,682
781
12,503
14,285
257
405
257
754
19,624
22,086
57,617
-
57,617
7,412
85
(8)
9,661
51,338
(6,158)
45,180
6,175
684
56
8,662
a.
Fuel tax credits relating to prior periods
During the 2017 financial year, external consultants were engaged to conduct a review of the Group’s fuel tax credit processes. The
external review was conducted to ensure the Lindsay Group was using an accurate and reliable methodology to ensure it was claiming
the correct amount of tax to which it was entitled. The new processes focused on utilising new systems and data, which had been
implemented with the recent IT system upgrades. Using the new processes to review prior periods, external consultants identified a
further $6,158,000 of fuel tax credits to which the business was entitled. Of the refund almost the entire amount had been refunded and
received during the previous year, with the exception of a $43,000 received in the current period.
47
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
7.
Income Tax
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)
Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
Tax at the Australian tax rate of 30% (2017: 30%)
Tax effects of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible expenses
Research and development tax offset relating to current year
Research and development tax offset related to prior years
Income tax expense
Tax losses
2018
$’000
2,733
433
-
3,166
(599)
1,032
433
11,224
3,367
13
(214)
-
3,166
2017
$’000
3,169
(827)
(433)
1,909
(788)
(39)
(827)
8,335
2,500
44
(202)
(433)
1,909
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 | Annual Report 2018 | Notes to the consolidated financial statements
48
8.
Franking Credits / Dividends
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
(2017: 30%)
2018
$’000
2017
$’000
4,964
4,839
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
a.
b.
c.
Franking credits that will arise from the payment or provision for income tax;
Franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
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 $1,260,000 (2017 - $1,001,000).
Dividends paid
Interim dividend for the year ended 30 June 2018 of 0.8 cents per share fully franked (at 30%)
paid in full on 29 March 2018. (2017: 0.8 cents per share fully franked (at 30%) paid in full on 31
March 2017 fully franked (at 30%).
Interim dividends paid in cash or satisfied by the issue of shares under the dividend re-investment
plan during the years ended 30 June 2018 and 2017 were as follows:
• Paid in cash
• Satisfied by issue of shares
Final dividend for the year ended 30 June 2017 of 0.8 cents per share fully franked (at 30%) paid
on 29 September 2017 (2016 – 1.1 cents per share fully franked (at 30%) paid in full on 30
September 2016).
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 2017 and 2016 were as follows:
• Paid in cash
• Satisfied by issue of shares
Dividends not recognised at year end
2,345
2,328
1,959
386
2,345
2,337
1,951
386
2,337
1,956
372
2,328
3,189
2,721
468
3,189
In addition to the above dividends, since year end the directors have recommended the payment
of a final dividend of 1.0 cents per share fully franked based on tax paid at 30% (2017: 0.8 cents
per share fully franked (at 30%) paid in full on 29 September 2017).
2,942
2,337
49
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
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
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
2018
$’000
2017
$’000
14,716
25,037
14,716
14,716
25,037
25,037
2018
$’000
2017
$’000
46,677
(291)
46,386
653
643
1,180
48,862
41,496
(176)
41,320
671
607
1,348
43,946
Other receivables generally arise from transactions outside the usual operating activities of the Group.
a.
Impaired trade receivables
As at 30 June 2018 current trade receivables of the Group with a nominal value of $321,000 (2017 - $194,000) were impaired. The
amount of the provision was $291,000 (2017 - $176,000). The GST component of the receivables is not considered impaired as this is
refundable. The majority of the individually impaired receivables relate to customers in the rural industry sector who are experiencing
difficulties as a result of seasonal factors.
The ageing of the full balance of these receivables is as follows:
0 to 2 months
3 to 4 months
Over 4 months
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
2018
$’000
73
105
579
757
2018
$’000
176
30
85
291
2017
$’000
221
1
213
435
2017
$’000
345
515
(684)
176
The creation and release of the provision for impaired receivables has been included in “Bad debt expense” in the statement of profit
and loss and other comprehensive income. Amounts charged to the allowance account are generally written off when there is no
expectation of recovering additional cash.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
50
b.
Past due but not impaired
As of 30 June 2018 trade receivables of $4,680,000 (2017 - $9,179,000) 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
2018
$’000
2,538
806
628
3,972
2017
$’000
5,196
648
3,335
9,179
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.
12. Other Current Assets
Prepayments
13. Available-For-Sale Financial Assets
Unlisted equity securities
Unlisted equity securities are traded in inactive markets.
2018
$’000
2,552
10,760
13,312
(302)
13,010
2017
$’000
2,779
11,838
14,617
(309)
14,308
2018
$’000
4,260
2017
$’000
4,302
2018
$’000
25
2017
$’000
25
51
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
14. Property, Plant and Equipment
Freehold Land and Buildings
Land - at cost
Buildings - at cost
Accumulated depreciation
Leasehold Improvements
At cost
Accumulated depreciation
Total property
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
Movements in carrying amounts
2018
$’000
2017
$’000
6,430
15,471
(1,108)
20,793
12,225
(2,424)
9,801
30,594
88,432
(67,304)
21,128
163,285
(46,807)
116,478
137,606
168,200
6,430
15,468
(716)
21,182
12,597
(1,792)
10,805
31,987
97,066
(73,300)
23,766
142,789
(37,417)
105,372
129,138
161,125
Movements in the carrying amounts for each class of property, plant and equipment are shown below.
Freehold
Land
Buildings
Leasehold
Improvements
Plant &
Equipment
Carrying amount at 30 June 2016
Additions
Disposals
Transfers
Depreciation/amortisation
$’000
6,430
-
-
-
-
$’000
7,559
6,091
-
1,429
(327)
$’000
3,947
6,203
(31)
1,467
(781)
$’000
23,444
3,410
(2,909)
5,503
(5,682)
Carrying amount at 30 June 2017
6,430
14,752
10,805
23,766
Additions
Disposals
Transfers
Depreciation/amortisation
-
-
-
-
3
-
-
53
(79)
-
2,385
(2,418)
2,484
(392)
(978)
(5,089)
Carrying amount at 30 June 2018
6,430
14,363
9,801
21,128
Assets pledged as security. Refer to Note 18 for information on assets pledged as security.
Plant &
Equipment
Under Finance
Lease
$’000
Work In
Progress
Total
$’000
$’000
105,885
5,939
153,204
18,890
(771)
-
-
34,594
(3,711)
(4,347)
(5,939)
(1,887)
(14,285)
105,372
27,187
(1,094)
(2,484)
(12,503)
116,478
-
-
-
-
-
-
-
(21,075)
161,125
29,628
(3,591)
-
(18,962)
168,200
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
52
15. Deferred Tax Assets
The balance comprises temporary differences attributable to:
Impaired receivables
Employee benefits
Payables
Other
Stock obsolescence
Other
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 2016
(Charged)/credited to:
Profit or loss
Current tax liability
At 30 June 2017
(Charged)/credited to:
Profit or loss
Current tax liability
At 30 June 2018
Employee
Benefits
$’000
Impaired
Receivables
$’000
Deprec
& Amort
$’000
2,454
204
-
2,658
415
-
3,073
103
(50)
-
53
34
-
87
47
-
(47)
-
-
-
-
16.
Intangible Assets
Computer software
Accumulated amortisation
Goodwill
Accumulated impairment
Customer list
Accumulated amortisation
Total intangible assets
2018
$’000
87
3,073
493
3,653
90
929
1,019
4,672
(4,672)
-
Payables
Other
$’000
314
(87)
4
231
66
196
493
$’000
165
721
49
935
84
-
1,019
2018
$’000
4,795
(3,314)
1,481
7,805
(244)
7,561
1,802
(754)
1,048
2017
$’000
53
2,658
231
2,942
93
842
935
3,877
(3,877)
-
Total
$’000
3,083
788
6
3,877
599
196
4,672
2017
$’000
4,673
(2,909)
1,764
7,805
(244)
7,561
1,802
(497)
1,305
10,090
10,630
53
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
a.
Movements in carrying amounts
Movements in the carrying amounts for each class of intangible asset are shown below.
Carrying amount at 30 June 2016
Additions – internal development
Amortisation
Transfers from WIP – internal development
Carrying amount at 30 June 2017
Additions – internal development
Amortisation
Carrying amount at 30 June 2018
b.
Impairment tests for goodwill
Computer
Software
$’000
Goodwill
$’000
Customer
List
$’000
Total
$’000
65
566
(754)
1,887
7,561
1,562
9,188
-
-
-
-
(257)
-
566
(1,011)
1,887
1,764
7,561
1,305
10,630
122
(405)
1,481
-
-
7,561
-
(257)
1,048
122
(662)
10,090
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
Average Gross margin
Terminal growth rate
Free cash growth rate
Discount rate
2018
%
17.0
2.0
15.6
9.4
2017
%
17.9
2.0
17.3
9.6
Assumption
Approach used to determining values
Budgeted gross margin
Based on past performance and management’s expectations for the future
Terminal growth rate
Free cash grow rate
Pre-tax discount rate
The growth rate used to extrapolate cash flows beyond the five-year forecasted period based off
management’s expectations of long-term growth.
The average cash flow growth rate over the five-year forecast period is based off management’s
expectations for the future.
Reflect specific risks relating to the relevant segments and the countries in which they operate based
off management’s expectations for the future.
d.
Impact of possible changes in key assumptions
A sensitivity analysis was performed on key assumptions, which included increasing the discount rate from 9.4 to 11.6% and reducing
product margin growth. 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
2 - 6 years
Customer list
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.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
54
17. Trade and Other Payables
Trade payables
2018
$’000
30,614
2017
$’000
37,074
Orora Limited, a previous supplier to the Group had a registered charge over the assets of Lindsay Rural Pty Ltd up to a maximum of
$3,200,000 (2017: $3,200,000). At reporting date no amounts were payable to Orora Limited (2017: $3,500,000). The charge has been
removed after 30 June 2018.
No other major suppliers have a registered charge over assets.
18. Borrowings
Current
Secured
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
Unsecured
Other loans
Total unsecured current borrowings
Total non-current borrowings
Total borrowing
2018
$’000
2017
$’000
31,363
7,091
38,454
826
826
27,898
7,741
35,639
797
797
39,280
36,436
69,722
12,298
82,020
407
407
82,427
121,707
68,008
15,068
83,076
1,203
1,203
84,279
120,715
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 mortgage
charges 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 lease
liabilities are also guaranteed by entities in the consolidated entity in addition to mortgage charges over the property and other assets.
c.
Other Loans
The 2018 balance of other loans includes an amount of $1,233,000 (2017: $2,000,000) which relates to an interest free working capital
loan provided by Visy Board Pty Ltd. The loan is due to be paid in full by 30 June 2020.
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.
55
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
f.
Risk exposure
Information about the Group’s exposure to risks arising from borrowings is provided in Note 2.
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
Movements
Prepayments
Inventories
$’000
$’000
1,103
33
-
1,136
(54)
-
1,082
768
58
8
834
(139)
-
695
Consolidated
At 30 June 2016
Charged /(credited):
Profit or loss
Current tax liability
At 30 June 2017
Charged /(credited):
Profit or loss
Current tax liability
At 30 June 2018
20. Provisions
Current
Employee benefits
Non-current
Employee benefits
2018
$’000
1,082
695
4,333
196
6,306
(4,672)
1,634
Depreciation &
Amortisation
$’000
Other
$’000
2017
$’000
1,136
834
2,518
184
4,672
(3,877)
795
Total
$’000
3,026
17
4,914
(297)
(211)
2,518
1,213
602
4,333
167
-
184
12
-
196
(39)
(203)
4,672
1,032
602
6,306
2018
$’000
2017
$’000
8,982
7,788
1,262
1,074
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
56
21. Other Liabilities
Current
Deferred revenue
Other
Non-current
Other
2018
$’000
2,802
29
2,831
2017
$’000
2,620
81
2,701
2,813
2,333
Deferred revenue comprises monies paid in advance of delivery of goods or services.
22. Contributed Equity
Fully paid ordinary shares
The movement in fully paid ordinary shares for 2018 and 2017 is reconciled as follows:
2018
$’000
71,656
Balance at 30 June 2016
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares pursuant to the Dividend Reinvestment Plan
Balance at 30 June 2017
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares pursuant to the Dividend Reinvestment Plan
Balance at 30 June 2018
a.
Dividend Reinvestment Plan
Note No of Shares
Issue Price
(a)
(a)
(a)
(a)
289,934,944
1,061,640
1,094,210
292,090,794
1,071,954
990,479
294,153,227
44 cents
34 cents
36 cents
39 cents
2017
$’000
70,884
$’000
70,044
468
372
70,884
386
386
71,656
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 directors but no more than 5% to the market price.
Issues pursuant to the Dividend Reinvestment Plan are:
2017 Dividends
30 September 2016
31 March 2017
2018 Dividends
29 September 2017
29 March 2018
Number of
Shares
1,061,640
1,094,210
Number of
Shares
1,071,954
990,479
Issue Price
44 cents
34 cents
Issue Price
36 cents
39 cents
Dividends payable on 30 September 2016 and 31 March 2017 were each settled in to two tranches due to rounding errors in the DRP,
with 1,005,868 and 1,033,423 shares being issued on 30 September 2016 and 31 March 2017 respectively and a further issuance of
60,787 and 55,772 shares issued on 10 April 2017 and 21 June 2017 respectively.
57
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
b.
Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a 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 2018 the Group did not alter its capital management policy.
The gearing ratios at 30 June 2018 and 30 June 2017 were as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Gearing ratio
2018
$’000
121,706
(14,716)
106,990
90,407
54%
2017
$’000
120,715
(25,037)
95,678
86,209
53%
Lindsay Australia Limited has complied with the financial covenants of its borrowing facilities during the 2018 and 2017 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
a.
Nature and purposes of reserve
The share-based payments reserve is used to recognise the fair value of options issued to employees.
24. Retained Earnings
Retained earnings at the beginning of the year
Profit for the year
Dividends paid or provided
Retained earnings at the end of the year
2018
$’000
2017
$’000
515
50
565
536
(21)
515
2018
$’000
14,810
8,058
(4,682)
18,186
2017
$’000
13,901
6,426
(5,517)
14,810
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
58
25. Cash Flow Information
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 employee benefits expense-share-based payments
(Increase)/decrease in current taxes
(Increase)/decrease in deferred taxes
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments and other assets
(Increase)/decrease in inventories
(Decrease)/increase in trade and other payables
(Decrease)/increase in other liabilities
(Decrease)/increase in provisions
Cash flows from operating activities
Non-Cash Financing and Investing Activities
Acquisition of plant and equipment by means of finance leases
Dividends satisfied by issue of shares
26. Earnings per Share
Basic earnings per share
Diluted earnings per share
2018
$’000
2017
$’000
8,058
19,624
373
50
(1,771)
839
(5,141)
31
1,298
(6,442)
611
1,382
18,912
27,187
772
6,426
22,086
861
(21)
(257)
(1,035)
6,054
1,871
(720)
2,300
1,454
683
39,702
18,940
840
2018
$’000
2.7
2.7
2017
$’000
2.2
2.2
Earnings used in calculating basic and diluted earnings per share – net profit
8,058
6,426
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share
293,150,766
290,833,967
Number of
Shares
Number of
Shares
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.
2018
$
2017
$
150,000
89,600
239,600
150,000
26,870
176,870
59
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
28. Related Party Disclosures
a.
Key management personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2018
$
2017
$
2,413,740
2,061,344
66,522
144,900
48,626
12,579
159,887
4,530
2,673,788
2,238,340
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 (GST exclusive):
Revenues
Cartage revenue received / receivable
Sale of rural supplies
Expenses
Fees for corporate uniform consultancy
2018
$
2017
$
9,581,537
7,486,435
8,967,901
6,701,893
18,549,438
14,188,327
18,055
18,909
Amounts receivable / payable to key management personnel and their related parties at the
reporting date
Current receivables – trade debtors
898,928
312,241
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 a number of share-based incentive plans described in the Remuneration Report. These plans have been
accounted for in accordance with the fair value recognition provisions of AASB 2 “Share-based Payment”.
Expense arising from share-based payment transactions
During the period $50,262 (2017: ($4,530)) was recognised as employee benefit expense arising from equity settled share-based
payment transactions. There was an additional expense recognised for the modification of a share based payment plan of $551 (2017:
$13,315).
Expense arising from equity settled share-based payment transactions
Expense relating to modification on equity settled share-based plan
Total expense arising from share-based payment transactions
There were no share options converted to shares during the year.
2018
$
49,711
551
50,262
2017
$
4,530
13,315
17,845
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
60
Change in share-based payment reserve
During the year the share-based payment reserve increased by $50,262 comprising of the modification and cash settlement of $551
outlined below and the expense arising from equity settled share-based payment transactions of $49,711.
Employee share option plans
Long Term Incentive (Option) Plan (LTIP)
In 2016 shareholders approved a LTIP at the 2016 Annual General Meeting. The plan has the following characteristics:
Eligibility
Grant of options
Exercise
Lapse
The LTIP will be open to eligible employees (including directors, contractors and consultants) of the Company
who the Board determines in its absolute discretion to issue options.
No amount is payable by eligible employees for the issue of options under the LTIP.
The offer must be in writing and specify, amongst other things, the number of options being issued, the exercise
period, any conditions to be satisfied before the options may be exercised and the exercise price of the options.
The options may also be subject to specific terms established by the Board.
The options may be exercised, subject to any exercise conditions, by the participant giving a signed notice to
the Company and paying the exercise price in full. The Company will apply for official quotation of any Shares
issued on exercise of any options.
The options shall lapse in accordance with specific offer terms or events contained in the LTIP rules, including
termination of employment or resignation, redundancy, death or disablement (subject to the Board’s direction to
extend the terms of exercise in restricted cases).
Right of participants Once shares are allotted upon exercise of the options the participant will hold the shares free of restrictions
(unless the Board determines otherwise). The shares will rank for dividends declared on or after the date of
issue but will carry no right to receive any dividend before the date of issue.
Should the Company undergo any reorganisation of capital, the number of options or shares will be adjusted in
accordance with the Listing Rules as applicable to options at the time of the reorganisation.
In the event of a change of control, and subject to the Listing Rules and any applicable laws, the Board may
determine that:
(a)
(b)
(c)
a participant’s unvested options will vest notwithstanding some or all of the vesting conditions have not
been satisfied;
that an eligible employee may transfer or otherwise dispose of their options; or
that a disposal restriction will be waived in respect of the options.
A holder of options is not entitled to participate in dividends, a new issue of shares or other securities made by
the Company to shareholders merely because he or she holds options.
Assignment
The options are not transferable or assignable without the prior written approval of the Board.
Administration
Termination and
amendment
The LTIP will be administered by the Board which has an absolute discretion to determine appropriate
procedures for its administration and, subject to the Listing Rules and applicable laws, all decisions of the Board
as to the interpretation, effect or application of the plan rules and all calculations and determinations made by
the Board under the plan rules are final, conclusive and binding in the absence of manifest error.
The LTIP may be terminated or suspended at any time by the Board, or if an order is made or an effective
resolution is passed for the winding up of the Company other than for the purpose of amalgamation or
reconstruction.
The LTIP may be amended at any time by the Board provided that any amendment does not materially alter the
rights of any participant in respect of the issue of options under the plan prior to the date of the amendments
unless:
(a)
(b)
(c)
the amendment is introduced primarily for the purposes of complying with or conforming to present or
future applicable legislation;
to correct any manifest error or mistake; or
to enable the plan or Company to comply with any applicable laws or any required policy.
A grant of 400,000 options for shares exercisable at $nil was granted to the CEO M K Lindsay in each of FY2018 and FY2017 pursuant
to the LTI Plan. Both of these issues were approved by shareholders at the Annual General Meetings held in 2017 and 2016
respectively. No other options have been granted pursuant to the LTI Plan in FY2018 and FY2017. The options issued in FY2017
were forfeited in that year.
61
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
Fair value of options granted under LTI Plan
The assessed fair value at grant date of options granted during the year ended 30 June 2018 was $0.3647 and 30 June 2017 was
$0.4084 per option. The options have nil exercise price, a three year vesting period where they do not participate in dividends, and two
performance criteria (year one NPAT and year three EPS). There are no direct market criteria incorporated in valuing the options.
Under these criteria both the Black Scholes and a discounted cash model produce a similar result, and are permitted methodologies
under ASIC Regulatory Guide 76. The Board believes this valuation model to be appropriate to the circumstances and has not used
any other valuation or other models in proposing the terms of the options. These valuation methods are based on a number of
assumptions, set out below, with an adjustment to the expected life of the options to take account of limitations on transferability. These
valuations impute a total value of $145,881 for FY2018 and $163,369 for FY2017 after tax for the proposed options over the three year
vesting period.
The models used the following assumptions:
•
•
•
•
•
risk free rate set at 2.78% (2017: 1.96%) based on the Australian Government 10-year bond rate as at the grant date;
a share price of $0.41 (2017: $0.47) being the most recent traded price on ASX at grant date before the valuation was completed;
the option exercise price on 30 June 2024 and 30 June 2020 of $nil;
volatility of 30% is based on the standard deviation of the monthly Company’s share price movement over the last 4 years; and
no discount has been applied to reflect the fact the options will be unlisted and non-transferrable.
Employee Share Option Plan
The employee share option plan in place prior to 2017 is expected to be phased out and replaced by the LTI Plan. That plan has the
same characteristics as the LTI Plan, except exercise conditions are specific to the individual’s performance rather than the
performance of the Group. During FY2017, two senior employees were a part of long term incentive programs involving employment
contract specific options. No grants were undertaken in 2018 under this plan.
Employee Share Options Granted
The following table summarises options granted under the LTI Plan and employee share option. The number and weighted average
exercise price (WAEP) per option in cents of, and movements in, share options during the year: no options expired during the periods
covered by the below table.
Balance at beginning of year
Granted during the year
Forfeited and lapsed during the year
Modified, vested and exercised during the year
Balance at the end of the year
Exercisable at end of year
Summary of options outstanding
2018
2017
Number
157,315
400,000
(4,176)
(15,312)
537,827
-
WAEP
Number
WAEP
-
-
-
-
-
341,737
400,000
(492,685)
(91,737)
157,315
- -
-
-
-
-
-
-
The share options outstanding at the end of the year had an exercise price of nil (2017: nil) and a weighted average remaining
contractual life of 2.0 years (2017: 1.8 years).
A summary of the status of the Groups equity settled share option plans at 30 June 2018 is presented below. When exercisable, each
option is convertible into one ordinary share of Lindsay Australia Limited at a zero exercise price.
Tranche
Fair Value Per
Option (cents)
Grant
Date
Expiry Date
Number
Issued
Number
Forfeited
Number
Modified,
Vested and
Exercised (a)
Vested Not
Exercisable
First
Second (b)
LTIP
26.5
22.7
36.5
July 2014
Sept 2018
July 2014
Sept 2019
October 2017 Nov 2024
250,000
250,000
400,000
180,139
69,861
-
-
-
-
-
-
-
(a) Refer to modification section below.
(b) 112,173 options for W T Lorenz Second Tranche not expected to vest based on performance hurdles
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 where the
vest date is greater than one year from grant date.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
62
(a) Modification of share-based payment arrangements
2018
In September 2017, Lindsay Australia Limited cash settled 15,312 options from the employee share option plan in preparation for
transition to the LTIP at a price of 37.40 cents. There were 4,176 options that were also forfeited. The settlement price was based on
the 5 day weighted average leading up to 30 June 2017. The change in settlement resulted in an additional expense being recognised
in income statement of $551. This difference is also recognised as a cash bonus in Remuneration report for the relevant employee.
Existing Option plan
Grant Price (cents) Settlement price
Options exercised Expensed in
Tranche 1 (W T Lorenz)
26.6
*grant price is rounded in the model from 5 decimal places to 2.
2017
(cents)
37.4
15,312
income
$551
Change in share-based
payment reserve
$551
In September 2016, Lindsay Australia Limited cash settled 91,737 options from the existing option plan in preparation for transition to
the LTIP at a price of 48 cents. The settlement price was based on the 5 day weighted average from 1 September 2016. The change in
settlement resulted in an additional expense being recognised in income statement of $13,315. This difference is also recognised as a
cash bonus in Remuneration report for each relevant employee.
Existing Option plan
Grant Price (cents) Settlement price
Options exercised Expensed in
(cents)
48.0
48.0
-
50,373
41,364
91,737
income
$10,809
$7,711
$18,520
Tranche 1 (W T Lorenz)
Tranche 3 (N L King)
Total
26.6
41.9
-
*grant price is rounded in the model from 5 decimal places to 2.
30. Subsidiaries
Change in share-based
payment reserve
($13,370)
($12,144)
($25,514)
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 %
Equity
Holding %
2018
2017
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 ASIC Corporations (wholly-owned companies)
Instrument 2016/785. For further information refer to Note 32.
63
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
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 2018 and 2017 years. The majority of the Group’s
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 accounts for more than 10% of external revenue (2017: nil). The largest individual customer accounts for
3.7% of external revenues (2017: 7.8%).
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
64
Segment information
2018
Revenue
External sales
Inter-segment sales
Other revenue
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
2017
Revenue
External sales
Inter-segment sales
Other income
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
250,555
109,924
360,479
6,341
2,015
969
709
7,310
2,724
258,911
111,602
370,513
(7,310)
441
1,238
364,882
28,435
2,994
31,429
(14,904)
(5,301)
11,224
(3,166)
8,058
17,441
2,183
19,624
16,914
527
227,400
105,458
332,858
5,415
2,187
765
406
6,180
2,593
235,002
106,629
341,631
(6,180)
518
882
336,851
25,153
3,405
28,558
(14,739)
(5,483)
8,335
(1,909)
6,426
19,805
2,281
22,086
19,327
478
65
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
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 ASIC Corporations (wholly-owned companies) Instrument 2016/785. 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 Instrument, 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:
Less than one year
Between one and five years
Minimum lease
payments
Interest
Principal Minimum lease
payments
Interest
Principal
2018
$’000
35,161
74,977
110,138
2018
$’000
3,798
5,255
9,053
2018
$’000
31,363
69,722
2017
$’000
31,398
72,662
101,085
104,060
2017
$’000
3,500
4,654
8,154
2017
$’000
27,899
68,008
95,906
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 (GST exclusive)
Non-cancellable operating leases contracted for but not recognised in the financial statements are
payable as follows:
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
2018
$’000
2017
$’000
6,746
21,406
32,262
60,414
6,609
11,371
28,390
46,369
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:
13,446
7,256
2018
$’000
2017
$’000
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
66
34. Contingent Liabilities
Guarantees to secure lease obligations
Guarantees to cover Workers policy
Total Guarantees
Cross guarantees have been given as described in Note 32.
2018
$’000
4,524
2,817
7,341
2017
$’000
4,405
3,090
7,495
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.
Legal Matters
On 16 October 2017 Lindsay Australia Limited announced that Worksafe NSW commenced proceedings in the District Court of NSW
for alleged breaches by the Company and related entities of the Work Health and Safety Act.
The proceedings relate to an accident, and consequential fatality of a Lindsay employee at the Arndell Park site in Sydney on 10
October 2015. Proceedings are currently ongoing.
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
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
2018
$’000
2017
$’000
1,448
385,784
293,650
309,600
71,656
3,963
565
3,074
351,308
256,389
275,169
70,884
4,740
515
76,184
76,139
3,906
3,906
-
-
4,803
4,803
-
-
67
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
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 $33,753,891 (2017: $35,348,151) secured by registered mortgage charges over property and other assets.
The parent entity has also given unsecured guarantees in respect of financial leases of subsidiaries amounting to $67,396,910 (2017:
$60,244,092).
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
On 13 July 2018 Lindsay Australia limited completed settlement of the acquisition of a property in the key horticulture growing region in
Bowen, Queensland for $1.05 million for the property and associated plant and equipment. The property will be utilised for both
Transport and Rural divisions. Additional capital improvements to the property of $150,000 are forecast to be completed in FY2019.
Lindsay Australia Limited | Annual Report 2018 | Notes to the consolidated financial statements
68
Directors’ Declaration
In the directors’ opinion:
a.
b.
c.
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 2018 and of its
performance for the financial year ended on that date; and
There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable; and
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
23 August 2018
69
Lindsay Australia Limited | Annual Report 2018 | Directors’ Declaration
Independent Auditor’s Report
To the Members of Lindsay Australia Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Lindsay Australia Limited, “the Company” and its controlled entities “the Group”, which
comprises the consolidated statement of financial position as at 30 June 2018, 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, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a.
b.
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial performance for the year then
ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group
in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants “the Code” that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the
Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Lindsay Australia Limited | Annual Report 2018 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
70
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of
the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the matter
Impairment of goodwill
Refer to Note 16: Intangible Assets
At 30 June 2018 the Group’s balance sheet includes goodwill
amounting to $7.561 million relating to historical business
acquisitions.
In accordance with AASB136 Impairment of Assets, an annual
impairment test is performed which requires management to
exercise judgement in determining the key assumptions to
calculate the recoverable amount using a value-in-use model.
Key assumptions in the model include discount rates, annual
revenue and terminal growth rates and interest rates.
The key assumptions and a sensitivity analysis is included in
Note 16.
It is due to the use of key estimates and judgement that this is
a key area of audit focus.
Other Information
Our procedures included, amongst others:
• Checking management’s calculations for accuracy;
• Critically assessing the reasonableness of key inputs
including assumptions, considering supporting
documentation and historic performance, where available;
and
• Performing a sensitivity analysis of management’s
calculations to assess the level of headroom available.
We also considered the adequacy of the Group’s disclosures on
goodwill impairment in light of the requirements of the Australian
Accounting Standards.
The directors are responsible for the other information. The other information comprises the information included in the Group’s annual
report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
71
Lindsay Australia Limited | Annual Report 2018 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial
report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the
Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and
to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the
financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless
law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 19 to 26 of the directors’ report for the year ended 30 June 2018. In our
opinion, the Remuneration Report of Lindsay Australia Limited, for the year ended 30 June 2018, complies with section 300A of the
Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with
section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
23 August 2018
Lindsay Australia Limited | Annual Report 2018 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
72
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. Lindsay Australia Limited’s Corporate Governance practices recognise the Company’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
Contents
Principle 1
Principle 2
Principle 3
Principle 4
Principle 5
Principle 6
Principle 7
Principle 8
74
75
77
77
78
78
79
80
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Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
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 Company 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 Company 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.
b.
c.
Have 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
Disclose the policy or a summary of it; and
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:
i.
ii.
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
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.
Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
74
Percentage of women in Group’s workforce
Percentage of women in management positions
Objective
15%
20%
2018
5%
12%
2017
12%
14%
The Company’s Workplace Gender Equality Act public report for 2018 is available on the Company’s website.
Recommendation 1.6
A listed entity should:
a.
b.
Have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and
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 assessment. The Corporate Governance Statement outlines the skills criteria for
Directors of the Company.
During the 2018 financial Year, an internal board performance assessment was performed and reviewed against the criteria. The
review did not result in any governance or other changes.
Recommendation 1.7
A listed entity should:
a.
b.
Have and disclose a process for periodically evaluating the performance of its senior executives; and
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:
i.
ii.
iii.
iv.
v.
Has at least three members, a majority of whom are independent directors; and
is chaired by an independent director; and disclose:
the charter of the committee;
the members of the committee; and
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.
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.
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Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
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.
b.
The names of directors considered by the board to be independent directors;
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. Independent
Director
16/12/2002
M K Lindsay
Executive. Non Independent
26/11/1996
G D Farrell
Non-executive. Non
Independent
17/11/2005
21 years (as at
08/01/2018)
15 years (as at
16/12/2017)
21 years (as at
26/11/2017)
12 years (at
17/11/2017)
Recommendation 2.4
The majority of the board of a listed entity should be independent directors.
Chief Executive Officer
Substantial Shareholder
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.
Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
76
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.
Principle 4
Safeguard integrity in corporate reporting
Recommendation 4.1
The board of a listed entity should:
a. Have an audit committee which:
i.
ii.
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,
iii.
and disclose:
iv. The charter of the committee;
v.
vi.
The relevant qualifications and members of the committee; and
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 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.
77
Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
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.
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.
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 has adopted a Continuous Disclosure Policy and has 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 recent annual reports, 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.
Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
78
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.
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:
i.
ii.
Has at least three members, a majority of whom are independent directors;
Is chaired by an independent director and disclose:
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 assesses risk and risk issues at each board meeting
described further under recommendation 7.2.
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
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.
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Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
Principle 8
Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
a. Have a Remuneration Committee which:
i.
ii.
iii.
iv.
v.
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director; And disclose:
the charter of the committee; and
the members of the committee; and
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 Company. The board considers Mr Farrell appropriately qualified to chair the committee to
oversee matters of remuneration.
It is the Company’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 Committee links the nature and amount of executive Directors’ and officers’
remuneration to the Company’s financial and operational performance.
1. Retention and motivation of key executives;
2.
Attraction of quality management to the Group; and
3.
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. 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 Company complies with the guidelines of the Council, specifically Non-executive Directors do not receive
options or bonus payments nor retirement benefits other than statutory superannuation. Refer also to the Remuneration Report
contained in the Directors’ Report.
Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
80
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 Company has a limited equity based incentive scheme applying to a small number of senior executives only. Trading in Company
securities is regulated by the Securities Trading Policy disclosed on the Company’s website. Trading activities relating to any short term
or speculative gain is prohibited.
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Lindsay Australia Limited | Annual Report 2018 | Corporate Governance Statement
Shareholder Information
Information relating to security holders as at 1 August 2018.
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
105
324
229
859
209
1,726
22,632
895,180
1,845,755
32,594,204
258,795,456
294,153,227
MR THOMAS KELSALL LINDSAY + MR THOMAS GLEN LINDSAY
10,604,402
Number of holdings less than a marketable parcel of shares – 145 (1,316 shares)
Top Twenty Shareholders
Name
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
ANKLA PTY LTD
BKI INVESTMENT COMPANY LIMITED
SANDHURST TRUSTEES LTD
MILTON CORPORATION LIMITED
MULAWA HOLDINGS PTY LTD
POLTICK PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LINDSAY SUPER CO PTY LTD
SKYLEVI PTY LTD
K & D LINDSAY PTY LTD
RM & DM PELL PTY LTD
HEADING EAST PTY LTD
MS GRETA MARJORIE LINDSAY
CAROLINE HOUSE SUPERANNUATION FUND PTY LTD
PROCO PTY LTD
MR FRED SALOME
MR MATTHEW SINGLETON
YESOR PTY LTD
Totals: Top 20 holders
Number of
Shares
% of Issued
Shares
55,526,491
18.88
22,104,631
16,783,130
15,901,694
12,843,330
12,687,412
10,108,181
7,325,996
6,219,739
3,613,067
3,222,148
3,104,592
2,549,506
2,328,551
2,100,108
2,100,000
2,000,000
2,000,000
2,000,000
7.51
5.71
5.41
4.37
4.31
3.61
3.44
2.49
2.11
1.23
1.1
1.06
0.87
0.79
0.71
0.71
0.68
0.68
0.68
195,122,978
66.35
Lindsay Australia Limited | Annual Report 2018 | Shareholder Information
82
Substantial Shareholders
The names of substantial shareholders who have notified the company in accordance with section 671B of the Corporations Act
2001 are:
Name
Number of Shares
% of Issued Shares
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
MIZIKOVSKY GROUP
BKI INVESTMENT COMPANY LIMITED
ENDEAVOR ASSET MANAGEMENT PTY LTD
Voting Rights of Ordinary Shares
55,526,491
35,862,199
16,783,130
14,795,482
18.88
12.3
5.71
5.03
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.
Other Equity Instruments
Details
M K Lindsay: Unlisted share options over ordinary shares – Not
vested
W T Lorenz: Unlisted performance rights granted over ordinary
shares – Not Vested
Quantity
400,000
137,827
Exercise Price
$nil
$nil
83
Lindsay Australia Limited | Annual Report 2018 | Shareholder Information