Annual Report
for the financial year ended 30 June 2019
Annual Report
for the financial year ended 30 June 2019
DIRECTORS
Chairman non-executive
Mr John F Pressler OAM MAICD
Managing Director and Chief Executive Officer
Mr Michael K Lindsay
Non-executive Directors
Mr Richard A Anderson OAM BCom FCA FCPA
Mr Anthony R Kelly
Mr Broderick T Jones LLB
Mr Justin T Green BBus CPA
Computershare Investor Services Pty Ltd
Level 1, 200 Mary Street, Brisbane QLD 4000
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
GENERAL LEGAL COUNSEL
& COMPANY SECRETARY
CHIEF FINANCIAL OFFICER
& COMPANY SECRETARY
SHARE REGISTER
REGISTERED & PRINCIPAL
ADMINISTRATIVE OFFICE
AUDITOR
BANKER
STOCK EXCHANGE LISTING
Lindsay Australia Limited shares are listed on the
Australian Securities Exchange, code LAU
Contents
ABOUT LINDSAY AUSTRALIA
CHAIR'S 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
16
20
29
30
33
34
35
36
37
74
75
79
89
Our business
Lindsay Australia Limited’s core divisions share common customers within the agriculture and
horticulture industries which gives the Lindsay Group a strategic advantage by providing a
unique end-to-end service solution for all our customer’s needs.
The Group continues to remain agile, increasing the range of services it can offer and the
regions that it services. In the 2019 financial year the Group expanded its geographical reach,
commencing operations in both Bowen, Central Queensland and Perth. Refrigerated rail
operations were expanded significantly this year as the Group continues to invest in new and
exciting opportunities for the future.
Site locations
Lindsay Rural
Lindsay Transport
Lindsay Fresh Logistics
Brisbane Markets
Melbourne Markets
Brisbane Shop
Brisbane Warehouse
Bowen
Brandon
Bundaberg
Childers
Coffs Harbour
Emerald
Gatton
Innisfail
Invergordon
Leeton
Mareeba
Adelaide
Mildura
Mundubbera
Murwillumbah
Nambour
Stanthorpe
Tully
Adelaide
Bowen
Brisbane
Bundaberg
Coffs Harbour
Emerald
Gatton
Innisfail
Mackay
Mareeba
Melbourne
Mildura
Mundubbera
Nambour
Perth
Stanthorpe
Sydney
Tully
4
The Lindsay end-to-end solution
Lindsay Australia Limited is an integrated transport,
logistics and rural supply company with a specific focus on
servicing customers in the food processing, food services,
fresh produce, agriculture and horticulture industries.
The Lindsay Australia Group comprises the two core
divisions of Rural and Transport (including Fresh
Logistics). When combined these divisions offer products
and services covering key needs of customers throughout
their production lifecycle.
The service begins with offering expert agronomy advice
and continues with a diverse range of products and
services along the chain to help farmers grow, package,
transport and distribute the produce throughout Australia
and the world. The end-to-end solution is unique and
offers customers with a single point of contact and
accountability.
Chair's Report
Chair's Report
Strategic investment in a diversified
product and geographical mix
combined with technology upgrades
saw the Group deliver record
revenue of $386 million in 2019.
The 2019 financial year represented a strategic milestone for
the Lindsay Australia Group as prior period investments in
facility additions, equipment upgrades and diversified service
offerings boosted financial performance and strengthened our
position for sustainable long-term growth. We continued to
invest in strong demand areas, enhancing our logistics offering
through investment in refrigerated rail, the set-up of a Perth
distribution facility and the acquisition of a facility in Central
Queensland’s major horticultural region of Bowen.
Our focus on technology evolution further supported our
financial performance due to improved operational efficiencies
and capacity utilisation. Driver safety remains paramount,
which is why we have committed $1.2 million to our driver
safety monitoring project which commenced in late 2019 and
will be completed in the first half of 2020 alongside our
$1.1 million investment in real time trailer and container
monitoring. Embracing innovation delivers an offering that is
not only smarter but safer for our people and for our
customers.
Revenue for the year grew 7% to $386 million and net profit
after tax grew 10% to $8.9 million. The 2019 financial year also
delivered strong cash generation and a more robust balance
sheet, with operating cash of $35 million (FY18 $19 million)
and net debt of $98 million (FY18 $107 million) both improving
significantly on the prior year. The Group’s leverage ratio
(Debt/EBITDA) also improved to 2.86 times (FY18 3.36 times).
Pleasingly, these results were achieved despite adverse
weather events in North Queensland and lower produce freight
volumes in some regional locations. Volatile fuel pricing
remained throughout 2019 and looks likely to continue during
2020.
Transport’s freight revenue for 2019 grew 7.4% to $268 million.
The reduction in produce freight volumes for some regions due
to adverse weather and seasonality was offset by increases
from capital cities as well as the additional revenue from our
expansion into refrigerated rail. Accordingly, we invested
$6 million in 50 new refrigerated rail containers and associated
equipment throughout the year. A further 50 new refrigerated
rail containers are included in the capex plan for the first half of
2020. Our refrigerated road fleet capacity remained similar to
the previous financial year.
Rural delivered a strong result for FY19 with revenue growing
3.7% to $114 million. The result was achieved whilst
performing a branch review which resulted in the closure of
some sites and consolidation in some regions. The Rural
division remains focused on high growth horticulture regions
that have strategic fit with the Transport division.
Fresh Logistics external revenue for FY19 increased 20% to
$7.8 million. Investment in new equipment during the second
half of 2019 has provided the necessary platform to offer
value-add services for existing and new customers generating
additional revenue for the division.
Connect delivered revenue of $3.8m in its second year of
operation (FY18 $837k). Whilst the export market presents
opportunity the barriers to entry remain high and regulatory
framework cumbersome. From the first quarter of 2020,
Connect in its current model will cease as we actively
manage our portfolio and refocus on our strength in the
domestic market and high-quality long-term revenue.
Our new Sydney distribution facility located at Erskine Park
has commenced construction and is due for completion in
January 2020. The purpose built facility will feature increased
cold storage capacity, workshop, bulk fuel facilities and driver
accommodation. The facility will be operated under a long
term lease with the Group contributing $7.5 million to the
Lindsay specific fit-out which will be funded by debt and cash.
As we embark on a new financial year, we remain focused on
nurturing a responsible business model that delivers
sustainable value creation for all stakeholders. We continue
to pursue new revenue opportunities while strengthening our
position in established markets by investing in high quality
long-term assets and a diversified mix to drive long-term
profitable growth. The Board is strongly committed to
proactive and uncompromising safety leadership throughout
the organisation and wider industry to ensure the right safety
practices, behaviours, policies and culture are in place.
In line with increased earnings, the Board has declared a final
fully franked dividend of 1.1 cents per share. This represents
a full year fully franked dividend of 2.1 cents per share, up
from 1.8 cents per share in FY18 (an increase of 16.6%).
On behalf of the board, I thank our CEO Kim Lindsay and all
employees for their hard work and dedication throughout the
year, your ability to embrace changes in customer and
industry requirements ensures we will remain competitive in
today’s environment.
John F Pressler
Brisbane, Queensland
23 August 2019
Board of directors and company secretaries
Mr John Frederick Pressler OAM
Mr Michael Kim Lindsay
Mr Richard Andrew Anderson OAM
Chairman Non-executive Director
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
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.
Mr Anthony Kelly
Mr Justin Troy Green
Mr Broderick Thomas Jones
Group Legal Counsel and Company
Secretary
Mr Jones holds a bachelor of laws degree
from Queensland University of Technology.
He has 20 years’ professional experience
within law, finance, property and markets
gained from a number of 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
Chief Financial Officer 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 Group for 19
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 Kelly joined Lindsay Australia Limited in
May 2019 as an Independent
Non-executive Director.
Mr Kelly brings a wealth of knowledge and
relevant industry insight to the Group,
having over 25 years’ experience in the
agricultural and horticulture industries
including experience in imports/exports.
Mr Kelly is currently a Director and Deputy
Chair of Brisbane Markets Limited since
2002. He is also the Chair of the Legal and
Compliance Committee and member of the
Finance and Audit Committee and
Remuneration Committee.
Mr Kelly is currently Chairman and
co-owner of Veracity Technology, an
emerging IT company that specialises in
cloud based platforms and services. Mr
Kelly has held previous directorships with
Gladstone Ports Corporation, Brisbane
Lions AFL Football Club (Chairman),
Brismark (President) and Carter & Spencer
Group.
Mr Kelly is a qualified lawyer, having
graduated from the University of
Queensland in 1984.
Mr Kelly has held no other directorships
with other listed companies during the last
three years.
Operating and
Financial Report
10
Operating and Financial Report
Summary of Operating Results
For the financial year ended 30 June 2019, the Lindsay Australia Limited Group of companies (the ‘Group’) grew operating revenue by
7.1% to $386.07 million and achieved an $8.87 million operating profit after tax, representing an increase of 10.2% from the previous
financial year.
Underlying1 EBITDA for the financial year increased $1.57 million to $37.72 million, an increase of 4.35%. On a reported basis, EBITDA
increased 11.8% to $40.41 million. The uplift in the EBITDA benefited key metrics for the Group. The Group’s leverage ratio reduced to
2.86 times (2018: 3.36 times) and operating cash increased to $35.22 million (2018: $18.91 million). Group net debt levels also reduced
by $8.5 million to $98.46 million.
Prior period investments in facility additions, equipment upgrades and diversified service offerings underpinned the financial
performance and somewhat mitigated the challenging trading conditions encountered by the Transport division during the financial
year.
Key Metrics
Operating Revenue
EBITDA
Depreciation & Amortisation
EBIT
Finance Costs
Reported Net Profit Before Tax
Income Tax2
Reported Net Profit After Tax
Underlying Net Profit Before Tax3
Key Finance Metrics
Capital Expenditure
Operating Cash Flow
Net debt
Leverage Ratio (Debt / EBITDA)
Earnings per share
2019
$’000
2018 % Change
$’000
386,077
360,479
40,415
36,149
(21,753)
(19,624)
18,662
(5,893)
12,769
(3,890)
8,879
10,076
25,270
35,229
98,465
2.86 x
16,525
(5,301)
11,224
(3,166)
8,058
11,224
29,750
18,912
106,991
3.36 x
3.0 cents
2.7 cents
7.1%
11.8%
10.8%
12.9%
11.2%
13.8%
22.9%
10.2%
(10.2%)
(15.1%)
86.3%
8.0%
14.9%
9.5%
EBITDA ($M)
Group Operating Revenue ($M)
40
36
36
36
386
360
30
333
325
310
2015
2016
2017
2018
2019
Reported
2015
2016
2017
2018
2019
1 Underlying EBITDA excludes one-off fuel tax credits relating to prior periods.
2 In FY2018 tax expense was reduced by research and development (R&D) tax offsets of $214k. Excluding this item the normalised tax rate
remained at approximately 30%.
3 In FY2019 additional fuel tax credits relating to prior periods of $3.36m ($2.69m net of professional fees) were received. Refer Note 6 for
additional information.
Lindsay Australia Limited | Annual Report 2019 | Operating and Financial Report
11
Capital Expenditure
Capital expenditure (capex) for the financial year of $25.27 million was focused in four key areas:
TECHNOLOGY: Investing in technology to improve safety and operational efficiency;
RAIL: Expanding the Group’s refrigerated rail fleet;
ROAD: Renewal program for interstate and local fleet; and
FOOTPRINT: Acquiring a new facility in the major horticulture region of Bowen, Central Queensland and opening a facility in
Perth.
Capex was funded through a combination of cash, finance leases and bank loans.
Looking ahead, the Group will continue to invest in strong demand areas and services across both the rural and transport sectors.
Capex for FY2020 is forecast to be approximately $30 million. Key investments include the Sydney distribution facility of circa $7.5
million and further rail expansion with the addition of 50 new refrigerated rail containers in the first half of FY2020 at approximately $5
million.
Capital Expenditure ($M)
0.6
12.3
22.3
0.1
0.1
29.6
0.1
0.1
3.4
1.1
20.7
1.1
5.9
23.0
2017
2018
2019
2020(f)
Plant & Equipment
Land, Buildings and Leasehold Improvements WIP (P&E)
IT Software
12
Lindsay Australia Limited | Annual Report 2019 | Operating and Financial Report
Divisional Performance
Segment Overview
External sales
Transport – freight services
Transport – sale of goods
Rural
2019
$’000
2018
% Change
$’000
268,266
249,725
7.4%
3,813
113,998
386,077
830
359.4%
109,924
360,479
3.7%
7.1%
Segment Profit contribution
Transport
Rural
31,229
3,874
28,435
2,994
Transport Underlying Divisional Contribution (a)
27,863
28,435
9.8%
29.4%
(2.0%)
(a) Transport profit contribution for FY2019 includes $3.36 million of fuel tax credits relating to
prior periods. Refer note 6 for additional information.
Transport Segment
Transport external freight revenue for the year grew $18.54 million (7.4%) to $268.22 million. Produce freight volumes were negatively
impacted in some regions due to adverse weather and seasonality, however these reductions were offset by growth across capital
cities and additional revenue from expansion into refrigerated rail. Brisbane, Sydney, Melbourne, Adelaide and Perth revenues
collectively increased 14% for the year.
Transport made a divisional contribution in FY2019 of $31.22 million, which included additional fuel tax credits of $3.36 million relating
to prior years. The Group engaged external consultants to a conduct a review of the Group’s fuel tax credit processes to ensure an
accurate and reliable methodology of claiming fuel tax credits was being employed. The review focused on utilising new systems and
data from IT system upgrades. The new methodology of claiming fuel tax credits will maximise the Group’s fuel tax claims for future
years.
Transport expanded its geographical reach in FY2019, acquiring a facility in Bowen, Central Queensland in July, and opening a new
Perth facility in November. Perth is serviced predominately by the Group’s expanded refrigerated rail fleet enabling the division to
provide a comprehensive national service, either by road or rail.
Transport’s road fleet capacity remained similar to the previous year with investment skewed towards growth opportunities in
refrigerated rail. 50 refrigerated rail containers were added to the fleet during the financial year and an additional 50 are included in the
Capex plan for the first half of FY2020. The road fleet will continue to receive upgrades and technology additions, ensuring we remain
first in class, while delivering efficiency and safety across our network.
Import/Export logistic revenue for Lindsay Fresh increased by 18% in FY2019 to $5.48 million. Investment in new equipment during the
second half of the year will generate additional revenue for the division by providing value-add services for both existing and new
customers.
Rural Segment
The Rural division remains key to the Group’s strategy, offering an end-to-end customer service model for horticultural customers.
During the year a strategic review of low margin branches was undertaken, resulting in the closure of some sites and consolidation in
some regions. The division remains focused on high growth horticulture regions that have a strategic synergy with the Transport
division.
Rural external revenue for the year grew $4.07 million (3.7%) to $113.99 million. Like-for-like4 branch revenue grew 5%.
Rural made a divisional contribution in FY2019 of $3.87 million, an increase of $880k (29.4%). The division was able to benefit from
operating cost reductions from the branch rationalisation and consolidation.
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 1.7% of Rural revenue for the financial year
was generated from Stanthorpe in Queensland which is currently experiencing severe water restrictions. Extended drought conditions
are not forecast to have a material impact on the Rural division’s future earnings.
4 Like-for-like normalises branch revenue by excluding revenue for branches closed during the year.
Lindsay Australia Limited | Annual Report 2019 | Operating and Financial Report
13
Corporate Update
Safety, People, Culture
During the financial year, the Group employed 1,425 full time equivalent employees (FTE’s), this was an increase of 59 FTE’s from
FY2018.
Safety remains paramount, with $1.2 million committed to our driver safety monitoring project which commenced roll-out across the
fleet of 300 prime movers in late 2019 and will be completed in the first half of 2020. The project acknowledges the importance of driver
wellbeing and safety.
Division
Corporate
Rural
Transport
Total FTE
2019
74
102
1,249
1,425
2018
66
107
1,193
1,366
Change
%
8
(5)
56
59
12.1%
(4.7%)
4.7%
4.3%
The Board recognises it has an important leadership role in promoting safety at all levels in the Group and is committed to ensure
safety practices, behaviours, polices, procedures and culture are in place, not only for the employees but the community and all
stakeholders.
The Group focuses on core values that underpin how the business is managed. The “Lindsay Way” strives to hold ourselves
accountable to our customers, shareholders, partners and employees by honouring our commitments, providing results and striving for
excellence as individuals and as a team.
Each element of our core values is individually significant, but in combination they are the basis of how we operate every day to build a
sustainable business for the future.
Our core values include:
Safety Always: Making safety a personal value; think SAFE, act SAFE, and be SAFE.
People Focused: Dedicated to the development and support of current and future employees.
Value Family: Committed to recognising the importance and value of family life.
Community Supportive: Involved and supportive of our local communities.
Customer and Supplier Orientated: Maintain and improve the high level of service provided to both our customers and suppliers.
Industry Innovators: Constantly challenging ourselves to provide and develop new innovations.
Enforceable Undertaking
On 10 October 2015, an accident occurred at the Group’s Arndell Park facility which tragically resulted in the fatality of a Lindsay
employee.
Worksafe NSW commenced proceedings in the District Court of NSW for alleged breaches by Lindsay Australia Limited and related
entities of the Work Health and Safety Act.
On 27 May 2019 following a consultation process with SafeWork NSW in relation to the Court proceedings, SafeWork NSW accepted
the terms of an Enforceable Undertaking proposed by Lindsay Australia Limited and related entities.
The entering into an Enforceable Undertaking is an alternative to the court process, and satisfactory compliance with the terms by
Lindsay Australia Limited will result in the court proceedings being discontinued.
The activities required under the terms of the Enforceable Undertaking will deliver safety related promotional and advertising initiatives,
training initiatives and technological initiatives, with benefits extending to the road transport and logistics industry, the community and
the Lindsay Group.
The undertaking requires the following actions:
Installation of Guardian – ‘Seeing Eye Machines’ in prime movers and trialling the installation in depot tug trucks;
Implementing a work health and safety leadership training program;
Engaging external providers to undertake a safety audit of the tug truck operations at the Sydney depot;
Development and implementation of Augmented Reality Technology Training Tool in conjunction with SafeWork NSW and an
Industry Advisory Group;
Commissioning a radio media campaign targeted at truck drivers promoting safety awareness messages for maxi brake use
and road safety; and
Commissioning B Double trailer advertising campaign promoting safety awareness messages for road users.
The Enforceable Undertaking represents an opportunity for the Lindsay Group to promote safety initiatives, a positive outcome arising
from extremely sad and difficult circumstances.
Details of the specific terms of the Enforceable Undertaking are published on the SafeWork NSW website at www.safework.nsw.gov.au
14
Lindsay Australia Limited | Annual Report 2019 | Operating and Financial Report
Strategy, Risk and Governance
Business strategies and prospects for future years
The Group’s overall business strategy remains consistent with prior years. Plans and initiatives for service offering and geographical
diversification remain a goal to reduce seasonal revenue risks. Operational performance from equipment utilisation remains a priority as
is the continuous review of latest technology to improve safety and systems.
Investing for future growth and sustainability
Facility upgrades to drive operational efficiencies and increased capacity
Construction of purpose-built facility in Sydney; expected to be operational in January 2020
Investing in fleet technology to allow real time tracking of trailers and containers
Technology investment for improved driver safety
Transport division
Ongoing fleet renewal to deliver a modern fleet with latest safety features
Expanding rail container fleet to service existing and new freight lanes
Use of technology to deliver increased equipment utilisation
Customer reviews to ensure service model meets customer demands
Rural division
Focus on high growth horticulture regions
Leverage existing Transport geographical reach
Focus on product sales mix
Reducing cost to service
Risk management
The 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 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 price volatility, exchange rates, commodity prices, credit risks 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 management personnel
Funding and dividend strategy
Total dividends of 2.1 cents (1.0 cent interim, 1.1 cents final) are proposed out of the FY2019 profit. This is a payout of $6,220,000
representing 70% 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 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)
J F Pressler
J F Pressler (Chairman)
J F Pressler
A R Kelly
R A Anderson
A R Kelly
R A Anderson
A R Kelly
M K Lindsay
Lindsay Australia Limited | Annual Report 2019 | Operating and Financial Report
15
Directors’ Report
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 2019, referred to
throughout the report as the Group.
Directors
Information on directors (including qualifications, 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 directors mentioned below held office for the entire financial year and since the end of the year except as otherwise noted.
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
A R Kelly (a)
12
12
12
2
12
12
12
2
2
2
2
-
G D Farrell (b)
1
(a) Mr A R Kelly appointed director on 3 May 2019
(b) Mr G D Farrell retired as director on 26 October 2018
4
4
2
2
2
-
1
1
-
1
-
1
1
-
1
-
1
12
12
12
2
4
12
12
12
2
4
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 19.
Principal activities
The principal activities and operations of the Group during the financial year were transportation of refrigerated and general freight,
logistic services associated with the import and export of horticultural goods and merchandising of rural supplies.
There were no significant changes in the nature of the activities of the Group during the year.
Consolidated results
The consolidated operating profit, after the provision for income tax for the financial year, attributable to the Lindsay Australia Limited
shareholders was $8,879,000.
Review of operations
A review of the operations of the 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
To the Directors’ knowledge, no matter or circumstance has arisen since the end of the financial 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.
Likely developments and expected results
Refer to Strategy, Risk and Governance section set out on page 15.
Lindsay Australia Limited | Annual Report 2019 | Directors’ Report
17
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.
Share options
During the financial year 400,000 options were granted over unissued shares as part of an employment agreement. 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.
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 during the financial year
Dividends paid to members are as follows:
Final ordinary dividend per share paid on 28th September for the prior financial year
Interim ordinary dividend per share paid on 29th March
Dividends recommended after end of financial year
2019
cents
1.0
1.0
2018
cents
0.8
0.8
Since the end of the financial year the directors have recommended payment of a final ordinary dividend of $3,265,421 (1.1 cents per
share fully franked) for the year ended 30 June 2019.
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 the 2019 financial year was $151,936 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.
Auditor’s independence declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is attached on page 29
of this report.
18
Lindsay Australia Limited | Annual Report 2019 | 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 2019:
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
A R Kelly
2019
$
60,505
12,000
2018
$
39,600
50,000
Ordinary Shares
2,665,786
11,615,581
391,869
-
Lindsay Australia Limited | Annual Report 2019 | Directors’ Report
19
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
21
24
24
26
26
27
27
28
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001.
20
Lindsay Australia Limited | Annual Report 2019 | 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 2019 was $195,570 (2018: $229,707).
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 2019 and 30 June
2018 are set out on page 25.
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
Position
Appointment Date
Resignation Date
Chairman (Non-Executive)
8 January 1997
Managing Director and Chief Executive Officer
26 November 1996
R A Anderson
Director (Non-Executive)
A R Kelly
G D Farrell
Director (Non-Executive)
Director (Non-Executive)
16 December 2002
3 May 2019
17 November 2005
26 October 2018
The directors mentioned above held office for the entire financial year and since the end of the year except as otherwise noted
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
21
Executive director and other key management personnel remuneration
Objective
The Group aims to reward key management personnel with a level and mix of remuneration commensurate with their position and
responsibilities within the Group to:
Link rewards with the strategic goals and performance of the Group;
Align the interests of key management personnel with shareholders; and
Ensure total remuneration is market competitive.
Structure
The key management personnel 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
Fixed remuneration
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.
Short-term incentives (STI)
The payment of short-term incentives to key management personnel is at the discretion of the Chief Executive Officer and the
Remuneration Committee, having regard to the overall performance of the Group and the performance of the individual during the
period. Financial key indicators of profitability, revenue growth, revenue diversification and working capital improvements are factored
into short-term incentive remuneration. Other key indicators include safety, employee engagement, employee retention and
sustainability. The Board considers this as a balanced approach to align key management personnel rewards with overall shareholder
value creation.
During the 2017 financial year, an employment agreement was entered into with the CEO, M K Lindsay. The agreement provides for
STI’s between 0% and 60% of fixed remuneration based on achieving goals. The STI’s earned and paid to the CEO are measured
against delivery of strategic objectives including:
Safety outcomes and initiatives benchmarked and measured internally;
Delivering an updated network with new sites, systems and updating the fleet;
Growing new sources of revenue, particularly in import/export;
Maintaining a profitable business; and
Building staff skills and retaining key management personnel.
The short-term objectives were chosen because of the need to renew infrastructure and set the Group on a future path of growth. In
FY2019, M K Lindsay achieved STI cash bonus, inclusive of superannuation, of $200,000 (FY2018: $200,000).
The table below details the STI cash bonus that was awarded and how much was forfeited, based on the maximum STI payable in the
employment agreement of M K Lindsay.
Fixed Remuneration
$
Maximum STI
$
STI Awarded
$
STI Awarded
%
STI Forfeited
%
Key management personnel
M K Lindsay - Managing Director & Chief Executive Officer
2019
2018
845,518
845,518
507,311
507,311
200,000
200,000
39%
39%
61%
61%
22
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
Long term incentives (LTI)
Key management personnel are eligible to participate in the Long Term Incentive (Option) Plan (LTI) that was approved by
shareholders in 2016. Terms and conditions of the LTI Plan are detailed in Note 29.
At the 2017 and 2018 Annual General Meeting, shareholders approved the issue of 400,000 options (each year) to the CEO,
M K Lindsay, pursuant to the LTI Plan.
The terms of the options issued under the LTI Plan 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 remained employed by the Company during the vesting period;
The exercise price to acquire a share is $nil;
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;
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 options will vest if a number of performance targets are achieved (refer table below);
Notwithstanding the vesting conditions, in accordance with the LTI Plan rules, the Board may, at its absolute discretion, waive
some or all of the vesting conditions such that the options may vest despite a vesting condition not being satisfied.
Details of options issued under the LTI Plan (including performance targets) are listed in the table below.
Options Granted To
Options Granted
Valuation at Grant Date
Net Profit After Tax Hurdle
2019
M K Lindsay
400,000
2018
M K Lindsay
400,000
$0.3151 per share
$0.3647 per share
$9,010,000 (FY2019)
$7,530,000 (FY2018)
3 Year Aggregate EPS Target
11.54 cents per share
8.09 cents per share
4 Year Aggregate EPS Target (if 3 year not met)
Board to determine
Board to determine
The Board reviews other key management remuneration personnel on a regular basis to ensure remuneration is linked to the
achievement of operational goals and performance of the Group.
Refer to section (E) below and Note 29 for additional information on LTI 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
J T Green
B T Jones
C R Baker
Position
Managing Director and Chief Executive Officer
Chief Financial Officer and Company Secretary
General Counsel and Company Secretary
General Manager Rural
Term as KMP
Full financial year
Full financial year
Full financial year
Full financial year
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 2019 and 30 June 2018 are provided later in this report.
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
23
Use of external consultants
The Remuneration Committee has approved the engagement of external consultant The Indelible Link to review and provide
recommendations regarding remuneration mix and quantum for executives and to assist in designing the future performance and
remuneration framework for the Group’s executives. The Indelible Link consultancy services were used in both FY2018 and FY2019.
Following assurances from the Indelible Link and the Remuneration Committee, the Board is satisfied the advice received is free from
undue influence from the key management personnel to whom the remuneration recommendations apply. The remuneration
recommendations were provided as an input into the decision making process 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 the Remuneration Committee and subsequently reviewed with all members of the Remuneration Committee. The
Remuneration Committee is satisfied that the review was objective.
The cost of engagement of The Indelible Link in FY2019 was $10,810 (2018: $11,067).
Voting and comments made at the Group’s 2018 Annual General Meeting
Lindsay Australia Limited received more than 98% of “yes” votes on eligible votes cast by shareholders present or by proxy on its
Remuneration Report for the 2018 financial year. The Company did not receive any specific feedback at the Annual General Meeting or
throughout the year on its remuneration practices.
B. Service Agreements
The Group’s policy in operation during 2019 financial year is that service contracts for the Chief Executive Officer (CEO) and other key
management personnel are unlimited in term but capable of termination, either by employer or employee, on giving between one and
twelve months’ notice. The notice period varies depending on the position held.
Notice period contained in employment agreements for key management positions:
Position
Chief Executive Officer
Chief Financial Officer
Legal counsel
General Manager – Rural
Employee
M K Lindsay
J T Green
B T Jones
C R Baker
Notice Period
12 months
3 months
1 month
1 month
Key management personnel are 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.
There were no new key management personnel service agreements entered into during the financial year.
C. Details of Remuneration Paid to Key Management
Personnel
The persons listed below are the only persons to have authority and responsibility for 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.
24
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
Short-term
benefits
Long-term
benefits
Post-employment
benefits
Share-based
payments (a)
Total
Performance
related
Salary
and fees
$
Cash
Bonus
$
Non-monetary
benefits
$
Long
service
leave
$
Superannuation
Options
$
$
$
Non-executive directors
J F Pressler (Chairman)
2019
2018
R A Anderson
2019
2018
84,049
83,911
63,036
62,933
-
-
-
-
G D Farrell (retired 26 October 2018)
2019
2018
21,012
62,933
-
-
A R Kelly (appointed 3 May 2019)
2019
Sub-Total
2019
Sub-Total
2018
10,506
178,603
209,777
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Executive director and other key management personnel
M K Lindsay - Managing Director & Chief Executive Officer (d)
2019
2018
828,171 182,648
888,690 257,648
9,578
6,629
12,564
12,564
J T Green - Chief Financial Officer & Company Secretary (b)
2019
2018
288,393
37,500
133,653
10,000
-
-
4,666
30,204
N L King - Chief Financial Officer & Company Secretary (c)
2018
233,426
-
-
B T Jones - General Counsel & Company Secretary
2019
2018
296,393
20,000
280,991
-
C R Baker - General Manager Rural
-
-
-
-
-
7,985
7,972
5,988
5,979
1,996
5,979
998
16,967
19,930
25,000
42,352
25,000
12,444
18,750
25,000
25,000
311,447
45,000
56,708
5,183
277,274
60,000
55,652
23,754
1,724,404 285,148
66,286
22,413
25,000
26,425
100,000
2019
2018
Sub-Total
2019
Sub-Total
2018
-
-
-
-
-
-
-
-
92,034
91,883
69,024
68,912
23,008
68,912
11,504
195,570
-
229,707
90,641 1,148,602
48,626 1,256,509
-
-
355,559
186,301
-
252,176
-
-
-
-
341,393
305,991
443,338
443,105
90,641 2,288,892
%
NA
NA
NA
NA
NA
NA
NA
NA
NA
24
24
11
5
-
6
-
10
14
16
15
15
14
1,814,034 327,648
62,281
66,522
124,971
48,626 2,444,082
Total 2019
1,903,007 285,148
Total 2018
2,023,811 327,648
66,286
62,281
22,413
66,522
116,967
144,900
90,641 2,484,462
48,626 2,673,788
(a) Share-based option payments are the probable number to vest at the grant date value.
(b) J T Green appointed KMP on 31 January 2018
(c) N L King ceased to be a KMP on 22 January 2018
(d) 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 a cash bonus was paid to M K Lindsay relating to FY2017 that was not
accrued in FY2017.
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
25
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
2019
$
469,278
15,784,182
16,253,460
10,400
706,349
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.
E. Share-Based Compensation
Options
Options over shares in Lindsay Australia Limited may be granted under the Long Term Incentive (Option) Plan (LTIP). 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 future reporting periods are as follows:
Grant Date
October 2017
October 2018
Options issued Fair Value per
option (cents)
Date vested and
exercisable
Expiry
date
Exercise
price
Vested
400,000
400,000
36.5
31.5
October 2020
October 2024
October 2021
October 2025
-
-
-
-
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 and key management personnel of
Lindsay’s Australia Limited and related entities at 30 June 2019 are set out below. When exercisable, each option is convertible into
one ordinary share of Lindsay Australia Limited. Further information on the options are set out in Note 29 to the financial report.
Name
M K Lindsay (October 2017)
M K Lindsay (October 2018)
Number of options
granted during the
year
400,000
400,000
Value of options
at grant date (a)
Number of
options
forfeited
Number of
options vested
during the year
145,881
126,041
-
-
-
-
(a) The value at the grant date is 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 the
2019 financial year are as follows.
Name
Balance 30 June 2018
Granted
during year
Modified, vested
and Exercised
during year
Forfeited
% Forfeited
Balance 30 June 2019
Unvested
Vested
Unvested
Vested
M K Lindsay
400,000
-
400,000
-
-
-
800,000
-
26
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
F. Equity Holdings of Key Management Personnel
(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.
(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.
2019 Shares
Directors of Lindsay Australia Limited
J F Pressler
M K Lindsay
R A Anderson
G D Farrell (retired 26 October 2018)
A R Kelly (appointed 3 May 2019)
Other key management personnel of the Group
B T Jones
J T Green
C R Baker
Balance at
30 June 2018
Upon
appointment
Upon
retirement
Net change
other
Balance at
30 June 2019
2,662,055
11,335,581
391,869
14,607,038
-
-
31,632
58,419
-
-
-
-
-
-
-
-
-
-
-
(14,607,038)
-
-
-
-
3,731
2,665,786
280,000
11,615,581
-
-
-
-
-
3,345
391,869
-
-
-
31,632
61,764
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.
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
27
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
$
2015
2016
2017
2018
2019
2,785,272
2,578,782
2,238,340
2,673,788
2,484,462
EPS
¢
2.4
2.8
2.2
2.7
3.0
Dividends
¢
Share Price
¢
2.1
2.2
1.6
1.8
2.1
45.0
47.5
38.0
38.0
34.5
This report is made in accordance with a resolution of the directors.
John F Pressler
Chairman of Directors
Brisbane, Queensland
23 August 2019
28
Lindsay Australia Limited | Annual Report 2019 | Remuneration Report (Audited)
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 2019, to the best of my knowledge and belief there
have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001; and
(ii) 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 2019
Lindsay Australia Limited | Annual Report 2019 | Auditor’s Independence Declaration
29
Annual Financial Report
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.
8.
Significant Accounting Policies
Financial Risk Management
Critical Accounting Estimates & Judgements
Revenues
Other Revenue
Expenses
Income Tax
Franking Credits / Dividends
Cash and Cash Equivalents
9.
10. Trade and Other Receivables
11.
Inventories
12. Other Current Assets
13. Financial Assets at Fair Value Through Other Comprehensive Income
14. Property, Plant and Equipment
15. Deferred Tax Assets
Intangible Assets
16.
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
Independent Auditor’s Report
Corporate Governance Statement
Shareholder Information
Distribution of Shareholders
Top Twenty Shareholders
33
34
35
36
37
37
46
49
50
51
51
52
53
54
54
55
55
56
56
57
58
59
59
60
61
61
62
63
63
63
64
64
64
65
68
69
72
72
73
73
73
74
75
79
89
89
89
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
31
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 2019. The directors have the power to amend and
reissue the financial statements.
32
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
Lindsay Australia Limited
Consolidated Statement of Profit and Loss and
Other Comprehensive Income
for the year ended 30 June 2019
Revenue
Other Revenue
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
Impairment loss on trade receivables
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
2019
$’000
2018
$’000
4
5
6
6
6
7
24
26
26
386,077
360,479
3,746
4,403
87
(1,071)
(97,671)
(87,645)
(111,022)
(108,079)
(36,964)
(21,753)
(60,119)
(5,893)
(1,694)
(1,904)
(9,605)
(2,471)
(36)
(31,212)
(19,624)
(57,617)
(5,301)
(1,452)
(2,264)
(9,661)
(1,455)
(200)
(28,009)
(28,077)
12,769
(3,890)
8,879
-
11,224
(3,166)
8,058
-
8,879
8,058
Cents
Cents
3.0
3.0
2.7
2.7
The above Consolidated Statement of Profit and Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
33
Lindsay Australia Limited
Consolidated Statement of Financial Position
as at 30 June 2019
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Other
Current Tax Assets
Total Current Assets
Non-Current Assets
Financial Assets at Fair Value Through Other Comprehensive Income
Property, Plant and Equipment
Intangible Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Borrowings
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
2019
$’000
2018
$’000
9
10
11
12
13
14
16
17
18
20
21
18
19
20
21
22
23
24
17,460
55,003
13,150
4,552
663
14,716
48,862
13,010
4,260
1,087
90,828
81,935
25
25
170,064
168,200
9,606
179,695
270,523
39,549
38,548
9,533
3,300
10,090
178,315
260,250
30,614
39,280
8,982
2,831
90,930
81,707
77,377
82,427
3,164
1,523
3,424
1,634
1,262
2,813
85,488
88,136
176,418
169,843
94,105
90,407
72,615
662
20,828
94,105
71,656
565
18,186
90,407
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
34
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
Lindsay Australia Limited
Consolidated Statement of Changes in Equity
for the year ended 30 June 2019
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
At 1 July 2018
Adjustment to retained earnings with application of AASB15
Adjusted balance at 1 July 2018
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 2019
Note Contributed
equity
$’000
70,884
-
-
-
772
-
71,656
71,656
-
71,656
-
-
-
959
-
72,615
8
8
Share-based
payments
reserve
$’000
Retained
profits
$’000
515
14,810
-
-
-
-
50
565
565
-
565
-
-
-
-
97
662
8,058
-
8,058
(4,682)
-
18,186
18,186
(340)
17,846
8,879
-
8,879
(5,897)
-
Total
equity
$’000
86,209
8,058
-
8,058
(3,910)
50
90,407
90,407
(340)
90,067
8,879
-
8,879
(4,938)
97
20,828
94,105
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
35
Lindsay Australia Limited
Consolidated Statement of Cash Flows
for the year ended 30 June 2019
Cash flows from Operating Activities
Receipts In the course of operations
Payments In the course of operations
Interest received
Income taxes paid
Income taxes received
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 (i)
Repayment of Borrowings (i)
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
2019
$’000
2018
$’000
426,417
397,496
(383,693)
(369,625)
304
(3,205)
1,415
(6,009)
35,229
1,335
(4,199)
(50)
(2,914)
25,393
(25,835)
(24,191)
(4,938)
(29,571)
2,744
14,716
17,460
441
(4,099)
-
(5,301)
18,912
3,434
(2,349)
(123)
962
6,146
(10,332)
(22,099)
(3,910)
(30,195)
(10,321)
25,037
14,716
25
9
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
(i)
Refer to Note 18 borrowings, term debt facility renegotiated in September 2018
36
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
Notes to the Consolidated Financial Statements
Lindsay Australia Limited and controlled entities
Lindsay Australia Limited and its controlled entities (the Group), is an integrated transport, logistics and rural supply company that has a
specific focus on servicing customers in the food processing, food services, fresh produce and horticulture sectors.
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
2019, on 23 August 2019.
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 investments in equity instruments which have
been measured at fair value through other comprehensive income.
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).
New accounting standards and interpretations
Except as detailed below, the accounting policies applied in the consolidated financial statements are the same as those adopted in the
Group’s consolidated financial statements for the year ended 30 June 2018. The changes detailed below were also adopted in the
interim financial statements for 31 December 2018.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 introduces new
requirements for the classification, measurement and de-recognition of financial assets and financial liabilities, new hedge accounting
requirements and a new model for calculating expected credit losses.
The group has adopted AASB 9 from 1 July 2018.
Credit losses on trade receivables
The Group has elected to apply the simplified approach to measuring expected credit losses. In measuring expected credit losses, a
provision matrix for trade receivables was used. The provision matrix is based on historical credit losses, adjusted for any material
expected changes to future credit risk.
The adoption of AASB 9 on 1 July 2018 did not have a material impact on the Group’s earnings for the financial year.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
37
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018. Details of the new requirements of
AASB 15 as well as the impact on the consolidated financial statements are described below.
The new standard replaces AASB 18 and AASB 111 and establishes a comprehensive framework for determining whether, how much
and when revenue is recognised. The standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer rather than on transfer of risks and rewards.
The Group has adopted AASB 15 using the cumulative effect method, initially applying this standard at the date of initial application
(1 July 2018). Accordingly the information presented for the period ended 30 June 2018 has not been restated and it is presented as
previously reported under AASB 118, AASB 111 and related interpretations.
The Group earns revenue from providing goods and services to customers. Consistent with the requirements of AASB 15 and the
nature of the Group’s performance obligations to its customers, the Group recognises revenue with respect to the provision of goods at
specific points in time (typically when goods are physically transferred to the customers) and recognises revenue with respect to the
provision of services over the period in which the services are provided to the customers.
The Group’s major revenue sources are from sale of goods and from transport/logistic services and are considered below.
Sale of goods
The Group generates revenue from the sale of rural products. The adoption of AASB 15 has not impacted the timing of revenue
recognition and revenue continues to be recognised on a point in time basis, generally when the goods are delivered to the customers.
Transport/logistic services
The Group generates revenue from the provision of transport and logistic services which are generally completed over a period of time.
On adoption of AASB 15 an assessment of the Group’s revenue was performed and the output method of measuring revenue was
considered the best approach that reflects the Group’s performance obligations over a period of time. As a result, a $340,000 after tax
decrease in retained earnings was recognised at 1 July 2018. Amounts collected for services not yet completed are recorded as
contract liabilities in the statement of financial position, offset by any direct costs.
The adoption of AASB 15 on 1 July 2018 did not have a material impact on the Group’s earnings for the financial year.
Impact on the opening balance of the consolidated statement of financial position.
The below table summarises the impact on the Group’s retained earnings from transition to AASB 15 on 1 July 2018.
Current Assets
Inventories
Total Current Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Other
Total Current Liabilities
Non-Current Liabilities
Deferred Tax Liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Retained Earnings
Total Equity
As reported
AASB15
Opening
30 June 2018
$’000
Adjustments
$’000
1 July 2018
$’000
13,010
81,935
178,315
260,250
30,614
2,831
81,707
1,634
88,136
169,843
90,407
18,186
90,407
98
98
-
98
(81)
665
584
(146)
(146)
438
(340)
(340)
(340)
13,108
82,033
178,315
260,348
30,533
3,496
82,291
1,488
87,990
170,281
90,067
17,846
90,067
38
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
Compliance with international financial reporting standards
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 2019. 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.
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 re-measurement 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.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
39
c.
Revenue and other income
The Group earns revenue from providing goods and services to customers. Consistent with the requirements of
AASB 15 Contracts with Customers and the Group’s performance obligations, the Group recognises revenue with respect to the
provision of goods at specific points in time (typically when goods are physically transferred to the customers) and recognises revenue
with respect to the provision of services over the period in which the services are provided to the customers.
Contract liabilities are recognised when advance consideration is received from customers or where revenue is otherwise deferred and
the related performance obligations have not yet been met.
The recognition of each of the Group’s major revenue sources is detailed below:
Sale of goods
Revenue is recognised from the sale of goods on a point in time basis, generally when the goods are delivered to the customers.
Transport/logistic services
Revenue is recognised from the provision of transport and logistics services generally over a period of time. The Group has adopted the
output method of measuring revenue as this approach best reflects the Group’s performance obligations over a period of time.
Other revenue
Revenue from the provision of short-term warehousing and storage services provided to customers is generally recognised over a
period of time as the services are provided.
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.
40
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
f.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are measured at amortised cost. The
measurement of the loss allowance depends on the Group’s assessment at the end of each reporting period as to whether the financial
instrument’s credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is
available, without undue cost or effort to obtain.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables. In measuring the expected credit loss, a provision matrix for trade receivables is used. The provision matrix is
based on historical credit losses, adjusted for any material expected changes to future credit risk. Any change in expected credit losses
between the previous reporting period and the current reporting period is recognised as an impairment gain or loss in the statement of
profit and loss. Collectability of trade receivables is reviewed on an ongoing basis.
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.
h.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less any allowance for
expected credit losses.
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 has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement models for financial
assets.
Financial assets are measured at amortised cost where the Group holds the asset in order to collect contractual cash flows which arise
on specified dates and that are solely principal and interest.
Financial assets are measured at fair value through other comprehensive income where the Group holds the asset in order to collect
contractual cash flows that arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its
fair value.
The Group classifies and measures all other financial assets at fair value through profit and loss.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market
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.
Financial assets at fair value through other comprehensive income (FVOCI), comprise principally marketable equity securities which do
not have fixed maturities, fixed or determinable payments and management intends to hold them for the medium or long term. They are
included in non-current assets unless management intends to dispose of the investment within 12 months of the period end date.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
41
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 equity security financial assets through fair value though other
comprehensive income) 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.
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%
6.5-30%
5-40%
6.5-40%
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.
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 de-recognition 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.
42
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
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 and annual 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 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. Re-measurements 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 can be provided to employees under the Lindsay Australia Limited Long Term Incentive (Option)
Plan (LTIP).
The fair value of options granted under the LTIP 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 2019 | Notes to the consolidated financial statements
43
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
AASB 16 ‘Leases’
AASB Interpretation 23 – clarifies the recognition and measurement criteria in
AASB 112 Income Taxes
Effective for annual
reporting periods
beginning on or after
Expected to be initially
applied in the financial
year ending
1 January 2019
30 June 2020
1 January 2019
30 June 2020
The directors anticipate that the adoption of these Standards and Interpretations in future years may have the following impacts:
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 2019, using the modified retrospective approach, this would have a material impact on the
transactions and balances recognised in the financial statements, specifically:
Statement of financial position changes on 1 July 2019:
Right of Use assets would increase $45.10 million;
Lease liabilities would increase $49.51 million;
Other liabilities would decrease $1.93 million;
Deferred tax asset would increase $0.74 million; and
Retained earnings would reduce $1.74 million.
Statement of profit and loss changes for FY2020 (based on the leases in effect at 30 June 2019):
For FY2020, total expenses would be approximately $0.44 million higher.
The Group will adopt AASB 16 from 1 July 2019.
AASB Interpretation 23 – Clarifies the application of the recognition and measurement criteria in AASB 112 Income Taxes where
there is uncertainty over income tax treatments. The new standard requires assessment of each uncertain tax position as to whether it
is probable that a taxation authority will accept the position. The adoption of this standard is not expected to have a material impact on
the Group.
44
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
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.
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
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
45
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)
Equity securities (b)
Financial liabilities
Trade and other payables (c)
Borrowings (c) (d)
2019
$’000
2018
$’000
17,460
55,003
25
14,716
48,862
25
72,488
63,603
39,549
116,041
155,590
30,614
121,707
152,321
(a) Financial assets at amortised cost
(b) Fair value through other comprehensive income
(c) Other financial liabilities
(d) The carrying amount of borrowings disclosed excludes offsetting borrowing costs of $116,000.
Assets pledged as security
Refer to Note 18 for information on assets pledged as security.
a.
Currency risk
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 2019 accounted for 1.1% (2018: 0.32%) of Group revenue.
The Group purchases approximately $3.9 million (4.0%) (2018 - $2.7 million (2.9%)) 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 2019 and 30 June 2018 is not significant.
b.
Price risk
The Group is exposed to equity security price risk on unlisted equity securities financial assets. The price risk for the unlisted securities
at 30 June 2019 and 30 June 2018 is not significant.
46
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
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 2019 and 2018, 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 a small number of debtor balances that extend beyond agreed payment terms.
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 at 30 June 2019 is 14.0% (2018: 13.3%).
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
2019
%
0.03%
2018
%
0.10%
2019
$’000
2018
$’000
17,460
14,716
4.20%
4.85%
16,206
16,181
At 30 June 2019, 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 $9,000 lower/higher (2018 – change of 1%: $10,000 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, excluding the value of any security the Group may hold, at balance for recognised financial
assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position
and notes to the financial statements.
The Group has adopted the simplified approach to measuring expected credit losses for trade receivables. In measuring the expected
credit loss, a provision matrix is used. The provision matrix is based on historical credit losses, adjusted for any material changes to
future credit risk.
At 30 June 2019 the largest ten debtors comprised approximately 23% (2018: 31%) of total trade debtors (the largest individual debtor
comprised 3.7% (2018: 6%) 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 66% (2018: 62%).
At the reporting date cash was held with the Group’s principal financiers, including Westpac Banking Corporation, Commonwealth Bank
of Australia and the National Australia Bank.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
47
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
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 (a)
Other loans
Lease Liabilities
Unused facilities
2019
$’000
2018
$’000
5,000
24,215
659
5,000
19,389
1,384
135,800
132,434
(19,721)
(459)
(19,389)
(1,233)
(95,861)
(101,085)
49,633
36,500
(a)
The carrying amount of borrowings disclosed excludes offsetting of borrowing costs of $116,000.
Bank overdraft
The bank overdraft is a revolving overdraft facility and may be drawn any time. The overdraft facility is available until September 2023
unless the lender demands repayment in accordance with the facility. The interest rate is variable and is based on prevailing market
rates.
Bank loans
Bank loans are generally repayable by monthly instalments of principal and interest over periods of between 12 months and 5 years
with options to refinance. The facilities are subject to annual review.
Other loans
The 2019 balance of other loans includes an amount of $459,000 (2018: $1,233,000) 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.
48
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
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.
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
At 30 June 2018
Trade Payables
Borrowing (excluding finance leases)
Finance Leases
Total
At 30 June 2019
Trade Payables
Borrowing (excluding finance leases) (a)
Finance Leases
Total
Within
1 year
$’000
30,614
7,893
35,161
-
13,702
-
-
26,406
48,571
73,668
40,108
48,571
39,549
8,141
34,707
-
-
3,931
9,860
31,841
37,274
82,397
35,772
47,134
-
-
-
-
-
-
-
-
30,614
21,595
30,614
20,622
110,138
101,085
162,347
152,321
39,549
21,932
103,822
39,549
20,180
95,861
165,303
155,590
(a) The carrying amount of borrowings disclosed excludes offsetting of borrowing costs of $116,000.
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. An allowance for expected credit losses is established.
In measuring expected credit losses, a provision matrix for trade receivables is used. The provision matrix is based on historical credit
losses, adjusted for any material expected changes to future credit risk. Refer note 10 for details of the allowance for expected credit
losses.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
49
4.
Revenues
In the following table, revenue from contracts with customers is disaggregated by customer type.
Horticulture customers
Customers are classified as horticulture if they are predominately exposed to the primary production of fresh fruit and vegetables.
Horticulture customers include primary producers (growers), produce market agents and produce packing groups. Revenues for
horticulture customers can fluctuate depending on season and can be impacted by weather related events.
Commercial customers
All other customers are classified as commercial customers. These customers do not have any direct involvement in the production of
fresh fruit and vegetables. They are predominately manufacturers, food processors or distributors and third-party transport operators.
2019
Revenues
Horticulture
Commercial
Revenue from contracts with customers
Other revenue
Corporate/unallocated revenue
Total other revenue
Total revenue
2018
Revenues
Horticulture
Commercial
Revenue from contracts with customers
Other revenue
Corporate/unallocated revenue
Total other revenue
Total revenue
Transport
Rural
$’000
Group
$’000
155,191
116,888
113,998
-
269,189
116,888
272,079
113,998
386,077
2,080
606
2,686
1,060
3,746
274,159
114,604
389,823
Transport
Rural
$’000
Group
$’000
143,998
106,557
109,924
-
253,922
106,557
250,555
109,924
360,479
2,015
709
2,724
1,679
4,403
252,570
110,633
364,882
50
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
5. Other Revenue
Other revenue comprises
Insurance and other recoveries
Rents received
Interest received
Other
6.
Expenses
Profit before income tax includes the following specific expenses:
Cost of goods sold
Professional fees
Legal fees
Accounting firms
Consultancy fees
Fuel tax credits consultancy fees (a)
Total professional fees
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 reversal - inventory
Minimum operating lease payments
2019
$’000
970
308
304
2,164
3,746
2018
$’000
1,563
210
441
2,189
4,403
2019
$’000
2018
$’000
97,584
88,716
373
242
1,183
673
2,471
411
4,499
892
337
188
930
-
1,455
392
5,089
978
15,416
12,503
257
278
257
405
21,753
19,624
63,485
(3,366)
60,119
7,098
36
(57)
9,605
57,617
-
57,617
7,412
200
(8)
9,661
a.
Fuel tax credits relating to prior periods
During the 2019 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 $3,366,000 of fuel tax credits to which the business was entitled. Professional costs of $673,000 were incurred in identifying the
fuel tax claims resulting in net benefit to the Group of $2,693,000.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
51
7.
Income Tax
Income tax expense
Current tax
Deferred tax
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% (2018: 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
Income tax expense
Tax losses
2019
$’000
2,214
1,676
3,890
(51)
1,727
1,676
12,769
3,831
59
-
3,890
2018
$’000
2,733
433
3,166
(599)
1,032
433
11,224
3,367
13
(214)
3,166
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
52
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
8.
Franking Credits / Dividends
2019
$’000
2018
$’000
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
(2018: 30%)
4,650
4,964
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 $1,399,000 (2018 - $1,260,000).
Dividends paid
Interim dividend for the year ended 30 June 2019 of 1.0 cent per share fully franked (at 30%) paid
in full on 29 March 2019. (2018: 0.8 cents per share fully franked (at 30%) paid in full on 29 March
2018).
Interim dividends paid in cash or satisfied by the issue of shares under the dividend re-investment
plan during the years ended 30 June 2019 and 2018 were as follows:
Paid in cash
Satisfied by issue of shares
Final dividend for the year ended 30 June 2018 of 1.0 cent per share fully franked (at 30%) paid
on 28 September 2018 (2018 – 0.8 cents per share fully franked (at 30%) paid in full on 29
September 2017).
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 2019 and 2018 were as follows:
Paid in cash
Satisfied by issue of shares
Dividends not recognised at year end
2,955
2,345
2,460
495
2,955
2,942
2,478
464
2,942
1,959
386
2,345
2,337
1,951
386
2,337
In addition to the above dividends, since year end the directors have recommended the payment
of a final dividend of 1.1 cents per share fully franked based on tax paid at 30% (2018: 1.0 cent
per share fully franked (at 30%) paid in full on 28 September 2018).
3,265
2,942
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
53
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
Allowance for expected credit losses
Fuel rebates receivable
Future GST recoverable
Other receivables
2019
$’000
17,460
2018
$’000
14,716
17,460
17,460
14,716
14,716
2019
$’000
49,767
(171)
49,596
3,428
581
1,398
55,003
2018
$’000
46,677
(291)
46,386
653
643
1,180
48,862
a.
Impairment allowance for trade receivables
The Group applies the simplified approach under AASB 9 to measuring the allowance for credit losses for trade receivables. The Group
determines expected credit losses using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors
that are specific to the trade receivables as well as future economic conditions relevant to the trade receivables.
The creation and release of the expected credit loss allowance for trade receivables has been included in the “Impairment loss on trade
receivables” in the statement of profit and loss and other comprehensive income. Amounts charged to the loss allowance account are
generally written off when there is no expectation of recovering those amounts.
The following table provides a reconciliation in the movement during the financial year of the loss allowance for trade receivables:
Loss allowance at 1 July 2017
Increase (decrease) in allowance for movements in expected credit losses
Trade receivables written off during the year
Loss allowance at 30 June 2018
Increase (decrease) in allowance for movements in expected credit losses
Trade receivables written off during the year
Loss allowance at 30 June 2019
$’000
176
30
85
291
(290)
170
171
54
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
b.
Credit risk profile for trade receivables
The following table provides information about the risk profile of trade receivables.
The impairment allowance at the end of the reporting period for trade receivables of the Group was $188,000 inclusive of GST of
$17,000 (2018: $321,000 inclusive of GST of $30,000). The GST component of trade receivables is not considered impaired as this is
refundable.
Details of the trade receivable aging and the impairment allowance is detailed in the table shown below:
2019
Trade Receivables
2019
Impairment allowance
2018
Trade Receivables
2018
Impairment allowance
$’000
35,200
13,024
429
1,114
49,767
$’000
(29)
(38)
(11)
(110)
(188)
$’000
32,076
11,642
1,584
1,376
46,677
$’000
(17)
(22)
(21)
(261)
(321)
Not yet due
Past due 1 to 30 days
Past due 31 to 60 days
Past due 61 days or more
c.
Other receivables
Other trade receivables do not contain impaired assets and are not past due. Based on the history of these receivables, it is expected
that these amounts will be received when due.
d.
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 1.0% and 1.5% per month by agreement.
e.
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
2019
$’000
2,605
10,790
13,395
(245)
13,150
2018
$’000
2,552
10,760
13,312
(302)
13,010
2019
$’000
4,552
2018
$’000
4,260
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
55
13. Financial Assets at Fair Value Through Other
Comprehensive Income
Unlisted equity securities
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
Work in progress - capital
Total plant and equipment
Total property, plant and equipment
2019
$’000
25
2018
$’000
25
2019
$’000
7,009
16,034
(1,519)
21,524
12,225
(3,316)
8,909
30,433
87,395
(67,415)
19,980
173,706
(57,420)
116,286
3,365
139,631
170,064
2018
$’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
56
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
Movements in carrying amounts
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 2017
Additions
Disposals
Transfers
Depreciation/amortisation
$’000
6,430
$’000
14,752
-
-
-
-
3
-
-
(392)
$’000
10,805
53
(79)
-
(978)
$’000
23,766
2,385
(2,418)
2,484
(5,089)
Carrying amount at 30 June 2018
6,430
14,363
9,801
21,128
116,478
Plant &
Equipment
Under Finance
Lease
$’000
Work In
Progress
Capital
Total
$’000
$’000
Additions
Disposals
Transfers
Depreciation/amortisation
579
563
-
-
-
-
-
(411)
Carrying amount at 30 June 2019
7,009
14,515
-
-
-
(892)
8,909
1,863
(2,135)
3,623
(4,499)
19,980
Assets pledged as security. Refer to Note 18 for information on assets pledged as security.
15. Deferred Tax Assets
The balance comprises temporary differences attributable to:
Impaired receivables
Employee benefits
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 2017
(Charged)/credited to:
Profit or loss
Current tax liability
At 30 June 2018
(Charged)/credited to:
Profit or loss
Adoption of AASB 15
At 30 June 2019
Employee
Benefits
$’000
Impaired
Receivables
$’000
2,658
415
-
3,073
245
-
3,318
53
34
-
87
(36)
-
51
Payables
$’000
231
66
196
493
(107)
-
386
105,372
27,187
(1,094)
(2,484)
(12,503)
-
-
-
-
-
-
161,125
29,628
(3,591)
-
(18,962)
168,200
25,219
(2,137)
-
(21,218)
18,849
3,365
(2)
(3,623)
(15,416)
-
-
-
116,286
3,365
170,064
2019
$’000
51
3,318
386
3,755
74
1,040
1,114
4,869
(4,869)
-
Other
$’000
935
84
-
1,019
(51)
146
1,114
2018
$’000
87
3,073
493
3,653
90
929
1,019
4,672
(4,672)
-
Total
$’000
3,877
599
196
4,672
51
146
4,869
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
57
16.
Intangible Assets
Computer software
Accumulated amortisation
Goodwill
Accumulated impairment
Customer list
Accumulated amortisation
Total intangible assets
2019
$’000
4,846
2018
$’000
4,795
(3,592)
(3,314)
1,254
7,805
(244)
7,561
1,802
(1,011)
791
9,606
1,481
7,805
(244)
7,561
1,802
(754)
1,048
10,090
a.
Movements in carrying amounts
Movements in the carrying amounts for each class of intangible asset are shown below.
Carrying amount at 30 June 2017
1,764
7,561
1,305
10,630
Computer
Software
$’000
Goodwill
$’000
Customer
List
$’000
Total
$’000
Additions
Amortisation
Carrying amount at 30 June 2018
Additions
Amortisation
Carrying amount at 30 June 2019
122
(405)
1,481
51
(278)
1,254
-
-
7,561
-
-
7,561
-
(257)
1,048
-
(257)
791
122
(662)
10,090
51
(535)
9,606
b.
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the business segments. The carrying amount
of goodwill is attributable to the Rural segment.
The Group tests whether goodwill should be impaired on an annual basis. The recoverable amount of a cash generating unit (CGU) is
determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based
on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated
using the estimated growth rates stated below.
c.
Key assumptions used for value-in-use calculations of the Rural CGU
Average Gross margin
Terminal growth rate
Free cash growth rate
Discount rate
2019
%
16.3
2.0
13.2
9.5
2018
%
17.0
2.0
15.6
9.4
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.
58
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
d.
Impact of possible changes in key assumptions
A sensitivity analysis was performed on key assumptions, which included increasing the discount rate from 9.5% to 11.5% and reducing
average product margin from 16.3% to 15.3%. 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.
17. Trade and Other Payables
Trade payables
18. Borrowings
Current
Secured
Lease liabilities
Bank loans
Bank loans – borrowing costs offset
Total secured current borrowings
Unsecured
Other loans
Total unsecured current borrowings
Total current borrowings
Non-current
Secured
Lease liabilities
Bank loans
Bank loans – borrowing costs offset
Total secured non-current borrowings
Unsecured
Other loans
Total unsecured current borrowings
Total non-current borrowings
Total borrowings
2019
$’000
39,549
2018
$’000
30,614
2019
$’000
2018
$’000
31,149
6,965
(25)
38,089
459
459
31,363
7,091
-
38,454
826
826
38,548
39,280
64,712
12,756
(91)
77,377
-
-
77,377
115,925
69,722
12,298
-
82,020
407
407
82,427
121,707
In September 2018 the Group renegotiated its term debt loan facility to finance the acquisition of the Bowen property and partly finance
the proposed Sydney depot fit-out. The total available limit on the new facility is $20,700,000, an increase of $5,535,000. At
30 June 2019, $16,206,000 was drawn on the facility. The facility is repayable in quarterly repayments of $862,500 commencing
September 2019 with a balloon payment in September 2023.
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.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
59
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 2019 balance of other loans includes an amount of $459,000 (2018: $1,233,000) 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.
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 receivables
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
Consolidated
At 30 June 2017
Charged /(credited):
Profit or loss
Current tax liability
At 30 June 2018
Charged /(credited):
Profit or loss
At 30 June 2019
$’000
$’000
1,136
834
(54)
-
1,082
61
1,143
(139)
-
695
15
710
2019
$’000
2018
$’000
1,143
710
5,093
1,087
8,033
(4,869)
3,164
Depreciation &
Amortisation
$’000
Other
Receivables
$’000
2,518
1,213
602
4,333
760
5,093
184
12
-
196
891
1,087
1,082
695
4,333
196
6,306
(4,672)
1,634
Total
$’000
4,672
1,032
602
6,306
1,727
8,033
60
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
20. Provisions
Current
Employee benefits
Non-current
Employee benefits
21. Other Liabilities
Current
Contract liabilities
Deferred revenue
Other
Non-current
Other
2019
$’000
2018
$’000
9,533
8,982
1,523
1,262
2019
$’000
3,284
-
16
3,300
2018
$’000
-
2,802
29
2,831
3,424
2,813
Contract liabilities relates to monies received in advance of delivery of goods or services (previously classified as deferred revenue) and
performance obligations that have not yet been met.
The changes in contract liabilities reflect both:
(a) The release of deferred revenues to the profit and loss through the performance of delivery of the goods or service; and
(b) New monies received where the delivery of the goods or service has not yet been completed and performance obligations
have not yet been met.
Revenue recognised in the financial year from contract liabilities at the beginning of the period being satisfied was $2,802,000.
Revenue not recognised in the financial year as performance obligations not yet satisfied and classified as contract liabilities is
$3,284,000.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
61
22. Contributed Equity
Fully paid ordinary shares
The movement in fully paid ordinary shares for 2019 and 2018 is reconciled as follows:
2019
$’000
72,615
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
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares pursuant to the Dividend Reinvestment Plan
Balance at 30 June 2019
a.
Dividend Reinvestment Plan
Note
No of Shares
Issue Price
(a)
(a)
(a)
(a)
292,090,794
1,071,954
990,479
294,153,227
1,363,800
1,339,438
296,856,465
36 cents
39 cents
34 cents
37 cents
2018
$’000
71,656
$’000
70,884
386
386
71,656
464
495
72,615
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:
2018 Dividends
29 September 2017
29 March 2018
2019 Dividends
28 September 2018
29 March 2019
.
b.
Capital risk management
Number of
Shares
1,071,954
990,479
Issue Price
36 cents
39 cents
1,363,800
1,339,438
34 cents
37 cents
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 2019 the Group did not alter its capital management policy.
The gearing ratios at 30 June 2019 and 30 June 2018 were as follows:
Total borrowings (a)
Less cash and cash equivalents
Net debt
Total equity
Gearing ratio
2019
$’000
116,041
(17,460)
98,581
94,105
51%
2018
$’000
121,707
(14,716)
106,991
90,407
54%
(a) The carrying amount of borrowings disclosed excludes offsetting of borrowing costs of $116,000.
Lindsay Australia Limited has complied with the financial covenants of its borrowing facilities during the 2019 and 2018 reporting
periods.
62
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
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
Adjustment to retained earnings with application of AASB15
Profit for the year
Dividends paid or provided
Retained earnings at the end of the year
25. Cash Flow Information
Reconciliation of Cash Flows from Operating Activities with Profit for the Year
Profit for the year
Adjustment for non-cash items in profit
-
-
-
-
Depreciation/amortisation
Net (gain)/loss on disposal of property, plant and equipment
Non-cash employee benefits expense-share-based payments
Adjustment to retained earnings on application of AASB15
-
Amortisation of borrowing costs
Net changes in assets and liabilities
-
-
-
-
-
-
-
-
(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
2019
$’000
565
97
662
2019
$’000
18,186
(340)
8,879
(5,897)
20,828
2018
$’000
515
50
565
2018
$’000
14,810
-
8,058
(4,682)
18,186
2019
$’000
2018
$’000
8,879
8,058
21,753
19,624
701
97
(340)
(116)
424
1,530
(6,040)
(292)
(140)
6,881
1,080
812
35,229
18,849
959
373
50
-
-
(1,771)
839
(5,141)
31
1,298
(6,442)
611
1,382
18,912
27,187
772
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
63
26. Earnings per Share
Basic earnings per share
Diluted earnings per share
2019
$’000
3.0
3.0
2018
$’000
2.7
2.7
Earnings used in calculating basic and diluted earnings per share – net profit
8,879
8,058
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share
295,525,789
293,150,766
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 remuneration paid to related practices of the auditor.
28. Related Party Disclosures
2019
$
2018
$
171,320
72,505
243,825
150,000
89,600
239,600
a.
Key management personnel compensation (including non-executive directors)
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments expense
2019
$
2018
$
2,254,441
2,413,740
22,413
116,967
90,641
66,522
144,900
48,626
2,484,462
2,673,788
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
Amounts receivable / payable to key management personnel and their related parties at the reporting date
Current receivables – trade debtors
2019
$
2018
$
7,186,610
9,581,537
9,066,850
8,967,901
16,253,460
18,549,438
10,400
18,055
706,349
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 cash and are on the same terms and conditions as non-related
parties as disclosed elsewhere in this report.
64
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
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 Limited has a Long Term Incentive (Option) Plan (LTIP) as described in the Remuneration Report. The LTIP has
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 financial year $96,898 (2018: $49,711) was recognised as employee benefit expense arising from equity settled share-
based payment transactions. There was no additional expense recognised for the modification of a share-based payment plan
(2018: $551).
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.
Employee share option plans
Long Term Incentive (Option) Plan (LTIP)
2019
$
96,898
-
96,898
2018
$
49,711
551
50,262
At the 2016 Annual General Meeting, Shareholders approved a LTIP. 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)
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.
(b)
(c)
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:
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
65
(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.
Options granted under LTIP
In 2019 financial year a grant of 400,000 options for shares exercisable at $nil was granted to the CEO M K Lindsay pursuant to the
LTI Plan. This issue was approved by shareholders at the Annual General Meeting held in October 2018.
No other options have been granted pursuant to the LTI Plan in the financial year.
Change in share-based payment reserve
During the year the share-based payment reserve increased by $96,898 arising from equity settled share-based payment transactions
of $96,898.
Fair value of options granted under LTI Plan
The assessed fair value at grant date of options granted during the year ended 30 June 2019 was $0.3151. 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 $126,041 after tax
for the proposed options over the three year vesting period.
The models used the following assumptions:
risk free rate set at 2.56% (2018: 2.78%) based on the Australian Government 10-year bond rate as at the grant date;
a share price of $0.36 (2018: $0.41) being the most recent traded price on ASX at grant date before the valuation was completed;
the option exercise price on 30 June 2025 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 (now superseded by LTIP)
The Employee Share Option Plan that was in place prior to the 2017 financial year has now been superseded by the Long Term
Incentive (Option) Plan (LTIP). Two senior executives with specific employment contracts containing entitlements to performance rights,
have now been modified and expensed through the profit and loss statement and no further performance rights are in existence.
Employee Share Options Granted
The following table summarises options that have been granted under the LTI Plan and the previous employee share option plan.
The weighted average exercise price (WAEP) and movements in the options during the year are detailed below. 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
2019
2018
Number
537,827
400,000
-
(137,827)
800,000
-
WAEP
-
-
-
-
-
Number
157,315
400,000
(4,176)
(15,312)
537,827
- -
WAEP
-
-
-
-
-
-
66
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
Summary of options outstanding
The share options outstanding at the end of the year had an exercise price of nil (2018: nil) and a weighted average remaining
contractual life of 5.8 years (2018: 5.0 years).
A summary of the status of the Groups equity settled share option plans at 30 June 2019 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
LTIP – FY18
36.5
October 2017 October 2024
400,000
LTIP – FY19
31.5
October 2018 October 2025
400,000
-
-
Determining option value at grant date
Number
Modified,
Vested and
Exercised)
-
-
Vested Not
Exercisable
-
-
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.
Modification of share-based payment arrangements
2019
In December 2018, Lindsay Australia Limited with agreement with W T Lorenz cash settled options previously issued under the
Employee Option Plan. A credit of $6,257 was included in the share based payment reserve for the modification of the share options.
The difference was recognised as a cash bonus for the relevant employee.
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 was recognised as a cash bonus for the relevant employee.
Existing Option plan
Grant Price (cents) Settlement price
Options exercised Expensed in
Tranche 1 (W T Lorenz)
26.6
(cents)
37.4
15,312
income
$551
Change in share-based
payment reserve
$551
*grant price is rounded in the model from 5 decimal places to 2.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
67
30. Subsidiaries
The Group consists of the ultimate parent entity Lindsay Australia Limited and its wholly owned subsidiaries. Set out below are the
names of the subsidiaries which are included in the consolidated financial statements shown in this report. All entities were incorporated
in Australia.
Name
Lindsay Brothers Holdings Pty Ltd (a), (d)
Lindsay Transport Pty Ltd (a), (d)
Lindsay Brothers Management Pty Ltd (a), (d)
Lindsay Brothers Fuel Services Pty Ltd (a), (d)
Lindsay Brothers Hire Pty Ltd (a), (d)
Lindsay Brothers Plant & Equipment Pty Ltd (a), (d)
P & H Produce Pty Ltd (d)
P & H Produce Trust (d), (e)
Lindsay Rural Pty Ltd (b), (d), (e)
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 %
2019
Equity
Holding %
2018
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
(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) In 2018 Lindsay Rural Pty Ltd was 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.
(e) In 2019 the P & H Produce Trust was terminated and the assets of the Trust were distributed to the sole Unitholder Lindsay
Australia Limited. At 30 June 2019 Lindsay Australia Limited owns 100% of Lindsay Rural Pty Ltd.
68
Lindsay Australia Limited | Annual Report 2019 | 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, warehouse and distribution 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 2019 and 2018 years. Group revenues are derived
predominately 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 impairment of receivables; and
Income tax expense.
Major customers
No customer of the Group accounts for more than 10% of external revenue (2018: nil). The largest individual customer accounts for
4.0% of external revenues (2018: 3.7%).
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
69
Segment information
2019
Revenue
Revenue for services (i)
Revenue for sale of goods (ii)
Other revenue
Total segment revenue/income
Inter-segment revenue elimination
Reconciliation of segment revenue/income to Group revenue/income
Interest income
Corporate/unallocated income
Total revenue/income
Segment net profit before tax (iii)
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
274,238
3,813
2,080
280,131
(5,972)
274,159
-
115,262
606
115,868
(1,264)
114,604
31,229
3,874
19,447
472
274,238
119,075
2,686
395,999
(7,236)
388,763
304
756
389,823
35,103
(16,441)
(5,893)
12,769
(3,890)
8,879
19,919
1,834
21,753
(i)
(ii)
(iii)
Revenue from provision of services is recognised over time
Revenue from sale of goods is recognised at a point in time
Transport segment contribution for FY2019 includes additional fuel tax credits relating to prior years of $3,336,000.
Professional costs associated with the fuel tax credit review of $673,000 are included in the corporate unallocated costs.
70
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
2018
Revenue
Revenue for services (i)
Revenue for sale of goods (ii)
Other revenue
Total segment revenue/income
Inter-segment revenue elimination
Reconciliation of segment revenue/income to Group revenue/income
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
(i)
(ii)
Revenue from provision of services is recognised over time
Revenue from sale of goods is recognised at a point in time
Transport
$’000
Rural
$’000
Total
$’000
256,066
830
2,015
-
110,893
709
258,911
111,602
(6,341)
(969)
256,066
111,723
2,724
370,513
(7,310)
252,570
110,633
363,203
28,435
2,994
16,914
527
441
1,238
364,882
31,429
(14,904)
(5,301)
11,224
(3,166)
8,058
17,441
2,183
19,624
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
71
32. Deed of Cross Guarantee
The following companies are parties to a deed of cross guarantee under which each company guarantees the debts of the others.
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and directors’
report under 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, Lindsay Rural Pty Ltd,
Skinner Rural Pty Ltd, Croptec Fertiliser and Seeds Pty Ltd and 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
2019
$’000
34,707
69,115
103,822
2019
$’000
3,558
4,403
7,961
2019
$’000
31,149
64,712
95,861
2018
$’000
35,161
74,977
110,138
2018
$’000
3,798
5,255
9,053
2018
$’000
31,363
69,722
101,085
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 lease
terms 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
2019
$’000
2018
$’000
7,556
26,260
27,080
60,897
6,746
21,406
32,262
60,414
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:
8,679
13,446
2019
$’000
2018
$’000
72
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
34. Contingent Liabilities
Guarantees to secure lease obligations
Guarantees to cover workers compensation policies
Total Guarantees
Cross guarantees have been given as described in Note 32.
Other
2019
$’000
7,741
1,733
9,474
2018
$’000
4,524
2,817
7,341
From time to time the consolidated entity is subject to claims and litigation during the normal course of business. The directors have
given consideration to such matters and are of the opinion that there are no further material contingent liabilities as at the reporting date
that are likely to arise.
Other than above to the directors’ knowledge no matter or circumstance has arisen since the end of the year that has significantly
affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity in future financial years.
35. Parent Company Information
Information relating to Lindsay Australia Limited is as follows:
Summary financial information
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained profits
Share-based payments reserve
Total shareholders’ equity
Profit of the parent entity
Total comprehensive income of the parent entity
Contingent liabilities of the parent entity
Contractual commitments
2019
$’000
2018
$’000
1,018
405,636
314,837
331,252
72,615
1,107
662
74,384
3,041
3,041
-
-
1,448
385,784
293,650
309,600
71,656
3,963
565
76,184
3,906
3,906
-
-
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 $29,069,466 (2018: $33,753,891) 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 $66,791,580
(2018: $67,396,910).
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
To the Directors’ knowledge, no matter or circumstance has arisen since the end of the financial 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.
Lindsay Australia Limited | Annual Report 2019 | Notes to the consolidated financial statements
73
Directors’ Declaration
In the directors’ opinion:
a.
The attached financial statements and notes are in accordance with the Corporations Act 2001, including:
i.
Complying with Accounting Standards, the Corporations Regulations 2001; and other mandatory professional reporting
requirements, and
ii. Giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2019 and of its
performance for the financial year ended on that date; and
b.
c.
There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable; and
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 2019
74
Lindsay Australia Limited | Annual Report 2019 | Director’s 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 2019, 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 2019 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 2019 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
75
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
Impairment of goodwill
Refer to Note 16: Intangible Assets
How our audit addressed the matter
At 30 June 2019 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.
Our procedures included, amongst others:
Understanding management’s processes and
controls;
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
The key assumptions and a sensitivity analysis
is included in Note 16.
management’s calculations to assess the
level of headroom available.
It is due to the use of key estimates and
judgement that this is a key area of audit focus.
We also considered the adequacy of the
Group’s disclosures on goodwill impairment in
light of the requirements of the Australian
Accounting Standards.
Other Information
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 2019, 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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
76
Lindsay Australia Limited | Annual Report 2019 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
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.
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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Lindsay Australia Limited | Annual Report 2019 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
77
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 20 to 28 of the directors’ report for the year ended 30
June 2019. In our opinion, the Remuneration Report of Lindsay Australia Limited, for the year ended 30 June 2019,
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 2019
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
78
Lindsay Australia Limited | Annual Report 2019 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
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
80
81
84
84
85
85
86
87
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
79
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 delegated 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. 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
b. Disclose the policy or a summary of it; and
c. Disclose at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a
relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and
either:
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
Percentage of women in Group’s workforce
Percentage of women in management positions
Objective
15%
20%
2019
12%
12%
2018
12%
5%
The Company’s Workplace Gender Equality Act public report for 2019 is available on the Company’s website.
80
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
Recommendation 1.6
A listed entity should:
a. Have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and
b. Disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in
accordance with that process.
The Company has adopted processes concerning the evaluation and development of the board, board committees and individual
directors. Procedures include an internal Board assessment. The Corporate Governance Statement outlines the skills criteria for
Directors of the Company.
During the 2019 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. Have and disclose a process for periodically evaluating the performance of its senior executives; and
b. Disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in
accordance with that process.
The Company’s Corporate Governance Charter details the procedures for performance reviews and evaluation. Senior executives are
subject to formal/informal evaluations against individual performance and business measures either on an ongoing or annual basis.
Principle 2
Structure the board to add value – Have a board of an effective composition, size, and commitment to
adequately discharge its responsibilities and duties.
Recommendation 2.1
The board of a listed entity should:
a. Have a Nomination Committee which:
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
Corporate Governance Charter contains procedures for the appointment of directors and procedures to be followed for a Nomination
Committee, which are discharged by the board. The Board Charter also outlines the requirements for the composition of the board.
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
81
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
Attributes
Integrity
Communication
Commitment
Innovation
Influence
Skills/Expertise
Strategy
Financial
Governance
Experience
Transport Industry
Agriculture Industry
Import Export Industry
Risk Management and Safety
Property
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.
Appointment
Resignation
Director
Status
Date
Date
Length of Service
Interest/Association
J F Pressler Non-Executive.
08/01/1997
22 years (as at 08/01/2019)
Independent Director
R A Anderson Non-Executive.
16/12/2002
16 years (as at 16/12/2018)
Independent Director
M K Lindsay Executive.
Non Independent Director
26/11/1996
22 years (as at 26/11/2018) Chief Executive Officer
G D Farrell Non-executive.
Non Independent Director
A R Kelly
Non-Executive.
Independent Director
17/11/2005
26/10/2018
12 years and 11 months
Substantial Shareholder
03/05/2019
2 months at 30 June 2019
82
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
Recommendation 2.4
The majority of the board of a listed entity should be independent directors.
The Company has complied with this recommendation following the retirement of Mr G D Farrell and effective appointment of
Mr A R Kelly, from the 3 May 2019 there are four members of the board of directors, three 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 considers the current composition of a board an appropriate blend of skills and experience relevant to the Company’s
business. The board will assess independence when any new appointments are made.
There are procedures in place, agreed by the board, to enable directors, in furtherance of their duties, to seek independent professional
advice at the Company’s expense.
Recommendation 2.5
The chair of the board of a listed entity should be an independent director, and, in particular, should not be the same person as the
Chief Executive Officer of this entity.
The Company complies with this recommendation. Mr J F Pressler, an independent director, is the Chair. Mr M K Lindsay is the Chief
Executive Officer.
Recommendation 2.6
A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for
directors to develop and maintain their skills and knowledge needed to perform their role as directors effectively.
The board assumes responsibility for new board member induction, education and development. The Corporate Governance Charter
requires new directors to be provided with relevant information, induction and opportunities for training, and the opportunity to take
independent advice at the expense of the Company.
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
83
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; and disclose
iii.
The charter of the committee;
iv. The relevant qualifications and members of the committee; and
v.
In relation to each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
b.
If it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the
integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and rotation of
the audit engagement partner.
The board has established an audit and risk committee, which operates under a charter approved by the board. The charter is
contained in the Company’s Corporate Governance Charter which is available on the Company’s website.
The Chairman of the committee is Mr R A 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.
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.
84
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
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.
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.
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
85
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 7.2
The board or a committee of the board should review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound and disclose, in relation to each reporting period, whether such a review has taken place.
The board is responsible for the Company’s risk management framework. Risks are monitored on a regular basis and prevention or
mitigation measures adopted as appropriate. Policies and procedures have been established for, asset maintenance, workplace health
and safety and inventory control. A business risks checklist is reviewed at each meeting of the board. Details of financial risks are
provided in the Notes to the Financial Statements.
The board has established an environmental and occupational health and safety committee, details on meetings, membership and
attendance are contained in the Directors Report to the Annual report located on the Company’s website. It is the board’s responsibility
to ensure that the Company observes all regulatory compliance and 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.
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.
86
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
Recommendation 7.4
A listed entity should disclose whether it has a material exposure to economic, environmental and social sustainability risks and, if it
does, how it manages or intends to manage those risks.
The Company actively considers and monitors business and other risks but does not consider it has material exposure to these risks.
Where possible the Company looks to adopt products or processes that have a positive environmental or social sustainability impact.
The board has established an environmental and occupational health and safety committee, details on meetings, membership and
attendance are contained in the Directors Report to the Annual Report located on the Company’s website. It is the board’s responsibility
to ensure that the Company observes all regulatory compliance, is proactive in achieving environmental outcomes consistent with
sustainable development, and to provide a safe workplace by identifying and managing risks in the workplace. The board has delegated
the responsibility for these functions to the environmental and occupational health and safety committee.
Principle 8
Remunerate fairly and responsibility.
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. Up to his resignation the chairman of the committee was Mr GD Farrell, as a non-
executive director and material shareholder of the Company. The board considered Mr Farrell appropriately qualified to chair the
committee to oversee matters of remuneration. The board is making arrangements for the transition to a new chair of the Remuneration
Committee.
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. The key expected outcomes of the remuneration structure are:
1. Retention and motivation of key executives;
2.
3.
Attraction of quality management to the Group; and
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. Unquoted options issues to the Chief Executive Officer are detailed in the Remuneration Report contained in the Director’s
Report, there were no other employee options or performance rights on issue at 30 June 2019 held by key management personnel. At
any review the performance of the Company and the contribution by particular executives form part of the process. Details of the
remuneration of the Directors and the key management personnel of the Group is disclosed in the Remuneration Report contained in
the Director’s Report.
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
87
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.
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.
88
Lindsay Australia Limited | Annual Report 2019 | Corporate Governance Statement
Shareholder Information
Information relating to security holders as at 31 July 2019.
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
104
325
221
819
217
1,686
20,979
888,835
1,762,335
31,361,429
262,822,887
296,856,465
MR THOMAS KELSALL LINDSAY + MR THOMAS GLEN LINDSAY
11,364,402
Number of holdings less than a marketable parcel of shares – 159 (1,471 shares)
Top Twenty Shareholders
Name
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
ANKLA PTY LTD
BKI INVESTMENT COMPANY LIMITED
MILTON CORPORATION LIMITED
MULAWA HOLDINGS PTY LTD
NATIONAL NOMINEES LIMITED
LINDSAY SUPER CO PTY LTD
SKYLEVI PTY LTD
ARCHERFIELD AIRPORT CORPORATION PTY LTD
K & D LINDSAY PTY LTD
RM & DM PELL PTY LTD
SUNSTAR AUSTRALIA PTY LTD
HEADING EAST PTY LTD
MR FRED SALOME
MS GRETA MARJORIE LINDSAY
CAROLINE HOUSE SUPERANNUATION FUND PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PROCO PTY LTD
MR MATTHEW SINGLETON
Totals: Top 20 holders
Number of
Shares
% of Issued
Shares
55,526,491
40,936,473
16,783,130
13,341,599
12,687,412
8,415,949
6,499,739
4,100,067
4,000,000
3,222,148
3,104,592
2,642,150
2,549,506
2,350,000
2,328,551
2,150,000
2,145,960
2,100,000
2,000,000
18.70
13.79
5.65
4.49
4.27
3.83
2.84
2.19
1.38
1.35
1.09
1.05
0.89
0.86
0.79
0.78
0.72
0.72
0.71
0.67
198,248,169
66.77
Lindsay Australia Limited | Annual Report 2019 | Shareholder Information
89
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
55,526,491
48,053,855
16,783,130
18.70
16.19
5.65
Voting Rights of Ordinary Shares
The holders of ordinary shares in the Group are entitled at any general meeting, either in person or by proxy, on a show of hands, to
one vote, and on a poll to one vote for each fully paid share.
On-market Buy Back of Shares
There is no current on-market buyback of shares.
Other Equity Instruments
Details
M K Lindsay: Unlisted share options over ordinary shares – Not
vested (issued October 2017)
M K Lindsay: Unlisted share options over ordering shares – Not
Vested (issued October 2018)
Quantity
400,000
400,000
Exercise Price
$nil
$nil
90
Lindsay Australia Limited | Annual Report 2019 | Shareholder Information