Lindsay Australia Limited
ABN 81 061 642 733
ASX Code
LAU
Appendix 4E
for the year ended 30 June 2020
ASX Rule 4.3A
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2020
Page 1
Lindsay Australia Limited (LAU)
Results for announcement to the market
Revenues
Profit after tax attributable to members Down 40.1%
6.5%
Up
A$000
30 June 2020
415,110
5,322
A$000
30 June 2019
389,823
8,879
From
From
Dividends
Interim 2020 dividend - paid on 09 April 2020
Final 2020 dividend – to be paid on 09 October
2020
Amount per
security
1.0 cent
0.5 cent
Franked
amount per
security
100%
100%
Conduit
Foreign
Income
Nil
Nil
The Record Date for determining entitlements to the dividend is 25 September 2020.
Management Comments
Refer Annual Report 2020 which has been lodged concurrently with App 4E.
Comparison of half-year profits
Profit (loss) after tax attributable to members for the 1st half-year.
Profit (loss) after tax attributable to members for the 2nd half-year.
5,785
(463)
5,398
3,481
$A’000
30 June 2020
$A’000
30 June 2019
Ratios
Profit before tax / revenue
Profit before tax as a percentage of revenue
Profit after tax / equity interests
Profit after tax attributable to members as a percentage of equity
(similarly attributable) at the end of the year
Earnings Per Security (EPS)
30 June 2020
30 June 2019
1.85%
5.76%
3.27%
9.43%
(a) Basic EPS
(b) Diluted EPS
(c) Weighted average number of ordinary shares outstanding
during the period used in the calculation of Basic EPS
30 June 2020
1.8 cents
1.8 cents
30 June 2019
3.0 cents
3.0 cents
298,409,063
295,525,789
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2020
Page 2
NTA backing
Net Tangible Assets (NTA)
$A’000
30 June 2020
$A’000
30 June 2019
83,058
84,499
Net tangible asset backing per ordinary security
27.8 cents
28.5 cents
The net tangible asset back per ordinary security of 27.8 cents is inclusive of right-of-use assets and lease
liabilities.
Dividends
Date the dividend is payable
Record date to determine entitlements to the dividend
If it is a final dividend, has it been declared?
Dividend amount per security
Final dividend:
Interim dividends:
Total dividend per security:
Current year
Previous year
Current year
Previous year
Current year
Previous year
There is no Conduit Foreign Income in 2020 or 2019.
Other disclosures in relation to dividends
09 October 2020
25 September 2020
Yes
Amount per
security
¢
0.5
1.1
1.0
1.0
1.5
2.1
Franked
amount per
security at
30% tax
¢
100%
100%
100%
100%
100%
100%
The company has a dividend reinvestment plan. The last date for election to participate in the plan is 28
September 2020. Shares issued pursuant to the plan are at 5% discount to the volume weighted
average price for the five business days prior to and including the record date.
Issued and quoted securities at end of current year
Category of securities
Total number Number quoted
Issue price per
security
(cents)
Ordinary securities
Changes during current year:
Increases through issues:
Dividend Re-investment Plan
Dividend Re-investment Plan
299,290,033
299,290,033
1,912,218
521,350
1,912,218
521,350
34.00
30.00
2,433,568
2,433,568
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2020
Page 3
Annual meeting
The annual meeting will be held as follows:
Place
Date
Time
Approximate date the annual report will be
available
Compliance statement
The Annual General Meeting will be conducted as a
virtual meeting. Details will be confirmed in the notice
of meeting.
Friday 6th November 2020
11:00 am
25 September 2020
This report has been prepared under accounting policies which comply with accounting standards as
defined in the Corporations Act.
This report and the accounts, upon which the report is based, use the same accounting policies.
1. This report does give a true and fair view of the matters disclosed.
2. The entity has a formally constituted audit committee.
3. There are no entities over which control has been gained or lost during the period.
4. This report is based on accounts that have been audited.
Justin Green
Chief Financial Officer and Company Secretary
Date: 25 August 2020
Lindsay Australia Limited: (LAU)
Information required by appendix 4E, 30 June 2020
Page 4
2020
ANNUAL REPORT
For the financial year
ended 30 June 2020
Annual Report
For the financial year ended 30 June 2020
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 LLB MAICD JP (Qual)
Mr Robert L Green BBus (QAC)
GROUP LEGAL COUNSEL
& COMPANY SECRETARY
Mr Broderick T Jones LLB
CHIEF FINANCIAL OFFICER
& COMPANY SECRETARY
Mr Justin T Green BBus CPA
SHARE REGISTER
REGISTERED & PRINCIPAL
Computershare Investor Services Pty Ltd
Level 1, 200 Mary Street, Brisbane QLD 4000
Telephone: 1300 552 270
Website: www.computershare.com.au
ADMINISTRATIVE OFFICE
152 Postle St, Acacia Ridge, QLD 4110
Telephone: (07) 3240 4900
Fax: (07) 3054 0240
Website: www.lindsayaustralia.com.au
AUDITOR
Pitcher Partners
Level 38, 345 Queen Street, Brisbane, QLD, 4000
STOCK EXCHANGE LISTING
Lindsay Australia Limited shares are listed on the Australian
Securities Exchange, code LAU
Table of Contents
ABOUT LINDSAY AUSTRALIA
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
1
2
12
21
22
25
26
27
28
29
68
69
73
83
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 2020 financial year the Group continued to expand
its rail service offering, with an increase in both refrigerated and dry containers.
Our Locations
Lindsay Rural
Lindsay Transport
Lindsay Fresh Logistics
Brisbane Markets
Adelaide
Brisbane Shop
Brisbane Warehouse
Bowen
Brandon
Bundaberg
Childers
Coffs Harbour
Emerald
Gatton
Innisfail
Invergordon
Mareeba
Mildura
Mundubbera
Murwillumbah
Nambour
Stanthorpe
Tully
Adelaide
Bowen
Brisbane
Bundaberg
Childers
Coffs Harbour
Emerald
Gatton
Innisfail
Mackay
Mareeba
Melbourne
Mildura
Mundubbera
Nambour
Perth
Stanthorpe
Sydney
Tully
Director’s
Directors’
Report
Report
Directors’ Report
The Directors present their report (including the Remuneration
Report) together with the Financial Statements of the
consolidated entity, being Lindsay Australia Limited and its
controlled entities, for the year ended 30 June 2020, referred
to throughout the report as the Group.
Directors and Company Secretary information
Mr John Pressler 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 awarded
the medal of the Order of Australia in 2004 for services to the
horticultural industry.
Mr Pressler was a Non-executive Director of Wide Bay
Australia Limited from 1988 to 2013, and Chairman from 1997
to 2009 and has held no other directorships with other listed
companies during the last three years.
Mr Pressler is a member of the Australian Institute of Company
Directors.
Mr Michael Lindsay
Managing Director and Chief Executive Officer
Mr Lindsay has been Managing Director and Chief Executive
Officer of Lindsay Australia Limited since 2002.
Mr Lindsay has over 35 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 held no other directorships with listed
companies during the last three years.
Mr Richard Anderson OAM
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 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 held a previous directorship with Namoi Cotton
Limited. Mr Anderson has held no other directorships with
other listed companies during the last three years.
Mr Anthony Kelly
Non-executive Director
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 32 years’ experience in the agricultural and
horticulture industries. Mr Kelly is a qualified lawyer, having
graduated from the University of Queensland in 1984.
Mr Kelly is currently a Director and Deputy Chair of Brisbane
Markets Limited. He is also the Chair of the Legal and
Compliance Committee and member of the Finance and Audit
Committee, and Remuneration Committee. He was also
recently appointed to the Board of the Queensland Academy of
Sport.
Mr Kelly is currently Chairman and co-owner of Veracity
Technology, an IT company that specialises in cloud-based
platforms and services. He has held previous directorships
with Gladstone Ports Corporation, Brisbane Lions AFL Football
Club (Chairman), Brismark (President) and Carter & Spencer
Group.
Mr Kelly has held no other directorships with other listed
companies during the last three years.
Mr Robert Green
Non-executive Director
Mr Green was appointed to the Board in August 2019 as an
Independent Non-executive Director.
Mr Green has considerable board relevant experience working
as a Senior Executive and General Manager in the Australian
and International agricultural industry over many years. Key
areas of experience include Operations Management and
Business Development. Mr Green brings extensive relevant
experience to the Group as trading, importing and distribution
across a range of industries including the international
agriculture industry.
Mr Green is currently a Director of Namoi Cotton Limited and is
Chair of the Trading and Operational Risk and Safety
Committee.
Mr Green has held previous directorships with Louis Dreyfus
Australia, Union Dairy Company, Macrofertil Australia, Soy
Australia and was previously President of Australian Oilseeds
Federation and Director and past President of Australia Grain
Exporters Association.
Mr Green is a member of the Australia Institute of Company
Directors.
Mr Justin Green
Chief Financial Officer and Company Secretary
Mr Green was appointed Chief Financial Officer in January
2018 and Company Secretary in 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.
Mr Green holds a Bachelor of Business (accounting) and is a
member of CPA Australia.
Mr Broderick Jones
Group Legal Counsel and Company Secretary
Mr Jones joined Lindsay Australia Limited in September 2014
and was appointed Company Secretary in October 2014.
Mr Jones holds a Bachelor of Laws degree from Queensland
University of Technology and has over 20 years’ professional
experience within law, finance, property and markets gained
from a number of senior roles both domestically and offshore.
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
3
Meeting of the directors
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
R L Green (a)
20
20
20
20
17
19
20
16
20
17
2
2
2
2
1
2
2
2
2
1
1
-
1
1
-
1
-
1
1
-
12
12
12
12
10
11
12
10
12
10
(a) Mr R L Green appointed Independent Non-executive Director on 26 August 2019.
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 below.
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)
R L Green (Chairman)
A R Kelly (Chairman)
J F Pressler
A R Kelly
R L Green
J F Pressler
R A Anderson
A R Kelly
J F Pressler
R A Anderson
R L Green
M K Lindsay
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
R L Green
Ordinary Shares
Share Options (i)
2,670,387
11,843,886
391,869
-
-
-
1,200,000
-
-
-
(i)
Unlisted share options over ordinary shares not vested.
Share options
During the 2020 financial year 400,000 share options were granted over unissued ordinary shares as part of an employment
agreement. At the end of the financial year there was 1,200,000 share options outstanding over unissued ordinary shares. Detailed
below is information regarding share options issued.
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)
M K Lindsay: Unlisted share options over ordinary shares
Not vested (issued October 2019)
Quantity
400,000
400,000
400,000
Exercise Price
$nil
$nil
$nil
Share options do not entitle the holder to participate in any share issue of the Group.
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
4
Since the end of the financial year up to the date of this report, no share options over ordinary shares in Lindsay Australia Limited have
been granted.
Refer to the Remuneration Report for additional information on share options.
Shares issued on the exercise of options
Since the end of the financial year up to the date of this report, no shares have been issued pursuant to the exercise of options.
Since the end of the financial year 400,000 share options for MK Lindsay have vested but have not yet been exercised. The 400,000
share options have an expiry date of 31 October 2024.
Refer to the Remuneration Report for additional information on share options.
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 company 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 2020 financial year was $180,801 exclusive of GST.
Significant changes in state of affairs
There were no significant changes to state of affairs during the financial year.
Events after the reporting date
Other than the dividends recommended after the end of the financial year as disclosed below, 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.
Principal activities
The principal activities and operations of the Group during the financial year were the 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.
Likely developments and expected results
Refer to the Strategy, Risk and Governance section set out on page 11.
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.
The directors are not aware of any environmental issues which have been raised in relation to the Group’s operations 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 30th September 2019 for the prior financial year (2019: 28th
September 2018)
Interim ordinary dividend per share paid on 9th April 2020 (2019: 29th March 2019)
2020
cents
1.1
1.0
2019
cents
1.0
1.0
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
5
Dividends recommended after the end of the financial year
Since the end of the financial year, the directors have recommended payment of a final ordinary dividend of $1,496,450 (0.5 cents per
share fully franked) for the year ended 30 June 2020.
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 21
of this report.
Non-audit services
The Company may decide to engage 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 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 undermines the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants including independence standards.
Pitcher Partners received or are due to receive the following amounts for the provision of non-audit services during the year ended
30 June 2020:
Non-audit services
Tax compliance services
Other services
2020
$
28,920
-
2019
$
60,505
12,000
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
6
Operating and financial review
Reconciliation of results from the Group’s operations
A summary of the Group’s financial results from its continuing operations for the financial year ending 30 June 2020 and the prior
comparative year is set out below.
Underlying operations defined in this report are the Group’s reported financial results as set out in the financial statements, adjusted for
significant items that are non-recurring or items incurred outside the ordinary operations of the Group. Significant items include
restructuring costs associated with the Group’s core operations and non-recurring costs of closure of underperforming segments.
Significant items arose in the prior financial year from the change in calculation methodology on fuel tax credits.
The below table provides a reconciliation of the Group’s results as contained in the financial statements and non-IFRS (International
Financial reporting Standards) underlying operations. The Directors believe the additional information included in the report is useful for
measuring the financial performance of the Group. The following non-IFRS reconciliation has not been subject to the Group’s audit but
is extracted from the audited financial statements.
Transport
Rural
2020
Reported profit (loss) before tax
Impact of application of AASB 16
Depreciation right of use properties
Finance costs right-of-use properties
Operating lease rental payments
AASB 16 profit impact
Underlying adjustments
Restructure costs
Merger and acquisition costs
Historical claim costs
Total underlying adjustments
Underlying profit (loss) before tax
Reported EBITDA (net of fair value gain)
Less: depreciation right of use properties
Less: finance costs right-of-use properties
Add: underlying adjustments
Underlying EBITDA
$’000
26,029
4,382
1,505
(5,096)
791
985
-
-
1,776
27,805
53,022
(4,382)
(1,505)
1,776
48,911
Corporate/
Unallocated
$’000
(24,828)
2,423
1,024
Group
$’000
7,683
7,547
2,627
(2,903)
(8,816)
544
1,358
443
211
451
1,428
211
451
1,649
3,448
$’000
6,482
742
98
(817)
23
-
-
-
23
6,505
(23,179)
11,131
7,756
(742)
(98)
23
(13,645)
(2,423)
(1,024)
1,649
47,133
(7,547)
(2,627)
3,448
6,939
(15,443)
40,407
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
7
2019
Reported profit (loss) before tax
Underlying adjustments
Fuel tax credits relating to prior periods
Fuel tax credits consultancy fees
Total underlying adjustments
Underlying profit (loss) before tax
Reported EBITDA (net of fair value gain)
Less: underlying adjustments
Underlying EBITDA
Summary of operating results
Transport
Rural
Corporate/
Unallocated
Group
$’000
31,229
(3,366)
-
(3,366)
27,863
50,676
(3,366)
47,310
$’000
3,874
$’000
$’000
(22,334)
12,769
-
-
-
-
673
673
3,874
(21,661)
4,346
(14,607)
-
673
4,346
(13,934)
(3,366)
673
(2,693)
10,076
40,415
(2,693)
37,722
The 2020 financial year was punctuated by a series of unprecedented domestic and global economic events with widespread drought,
bushfires and the sudden spread of Covid-19 all presenting unique challenges. Despite this, the Group continued to meet strategic
goals and customer demands through strong process management, sound governance and appropriate capital deployment. Continual
investments in diversifying Lindsay’s service offerings coupled with upgrades to facilities, equipment and technology enabled continuity
of revenue despite the turbulent market conditions. The additional costs associated with trading throughout these unprecedented
events were mitigated mainly by the cost efficiencies gained from these improvements. Group external revenue for FY2020 grew 6.6%,
and on an underlying basis, Group EBITDA increased 7.1%.
Reported and underlying results
Operating Revenue
EBITDA (net of fair value gain)
Depreciation & Amortisation
EBIT (net of fair value gain)
Finance Costs (net of fair value gain)
Reported Net Profit Before Tax
Income Tax
Reported Net Profit After Tax
Underlying EBITDA
Underlying Net Profit Before Tax
2020
$’000
2019 % Change
$’000
411,515
386,077
47,133
40,415
(31,258)
(21,753)
15,875
(8,192)
7,683
(2,361)
5,322
40,407
11,131
18,662
(5,893)
12,769
(3,890)
8,879
37,722
10,076
6.6%
16.6%
43.7%
(14.9%)
39.0%
(39.8%)
(39.3%)
(40.1%)
7.1%
10.5%
Throughout FY2020, Transport continued its rail strategy with capital investments focused on expansion. The additional capacity and
service offerings helped mitigate some of the challenges encountered by road transport and import/export logistics during the financial
year. Continued investment in technology upgrades and safety remain crucial in ensuring the division remains a market leader.
Transport’s external freight service revenues grew 5.3% to $282.43 million while the underlying segment contribution for the year
remained steady.
The Rural division had an exceptional year increasing external revenues by 12.9% to $128.66 million and delivering an increase in
segment contribution of 67.3% to $6.48 million.
Lindsay Connect ceased trading in the first quarter of FY2020 as previously announced.
Capital expenditure (capex) in FY2020 was focused on delivering four key projects.
SAFETY: Driver safety project completed with the roll-out of new monitoring technology in all interstate vehicles;
FACILITIES: The new purpose-built Sydney distribution facility was opened in March 2020, driving both operational
efficiencies and providing a platform for future growth. The Group contributed $7.8 million capex to the purpose built fit-out;
RAIL: The addition of 110 new refrigerated rail containers during the year, expanding the Group’s fleet to 186 at
30 June 2020. Growth capex for the year was $11.4 million for refrigerated containers and associated equipment; and
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
8
TECHNOLOGY: Trailer monitoring project completed with the installation of real-time tracking and temperature monitoring for
all refrigerated trailers and rail containers.
Divisional Performance
Segment overview
External sales
Transport – freight services
Transport – sale of goods
Rural
Segment overview
Segment profit before tax
Transport – reported
Transport – underlying
Rural – reported
Rural – underlying
Transport Segment
2020
$’000
2019
% Change
$’000
282,431
268,266
5.3%
424
3,813
(88.9%)
128,660
411,515
113,998
386,077
12.9%
6.6%
2020
$’000
26,029
27,805
6,482
6,505
2019
% Change
$’000
31,229
27,863
(16.7%)
(0.2%)
3,874
3,874
67.3%
67.9%
Transport external freight revenue for the year grew $14.16 million (5.3%) to $282.43 million. Increases in rail freight revenues for the
year of $22.26 million were driven by new customer additions and capacity expansion offset a reduction in produce freight volumes
which were negatively impacted in some regions due to adverse weather and seasonality.
Transport made a divisional contribution in FY2020 of $26.03 million, which was below FY2019 by $5.20 million (16.7%). However, on
an underlying basis, the Transport divisions segment contribution was on par with FY2019. The underlying comparison excludes
additional fuel tax credits in FY2019 and in FY2020 eliminates the impact of the adoption of AASB16 for comparison purposes and
other abnormal restructuring costs.
Transport’s road fleet capacity remained similar to the previous year with investment concentrated on growth opportunities in
refrigerated rail. 110 refrigerated rail containers were added to the fleet during the financial year, taking the Group’s fleet to 186 at year
end. An additional 75 refrigerated and 20 dry containers are included in the capital expenditure plan for the first half of FY2021. The
road fleet will continue to be renewed in line with the replacement plan to ensure the fleet remains first in class while delivering
efficiency and safety across our network.
Import/Export logistic revenue for Lindsay Fresh was materially impacted in the 4th quarter due to Covid-19. Fresh had a positive start to
the first half of FY2020 where import/export logistics revenue rose 22% over the prior period, but as a result of Covid-19 volumes
dropped off significantly with revenues finishing the year 12% up on FY2019. The first half of FY2021 remains a challenge for this
revenue segment as available air freight remains an issue.
Rural Segment
The Rural segment saw significant uplift as a result of the FY2019 strategic , which shifted the focus and resources of the segment to
high growth regions. The review also resulted in the closure of several marginal earning branches bringing with it a renewed focus for
the division.
Rural external revenues grew by $14.66 million (12.9%) to $128.66 million.
Rural made a divisional contribution in FY2020 of $6.48 million, an increase of $2.63 million (67.3%). The division benefited from a full
year of operating cost reductions from the branch rationalisation.
The division remains focused on high growth horticulture regions that have a strategic synergy with the Transport division.
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
9
Corporate Update
Safety, People, Culture
During the financial year, the Group employed 1,457 full-time equivalent employees (FTE’s); this was an increase of 32 FTE’s from
FY2019.
During the year a number of administration roles within the Group were restructured within the Transport and Corporate divisions who
were made redundant and with process improvements, the roles have been incorporated into existing teams roles. One-off costs
incurred for the restructure for the financial year was $548k.
Safety remains paramount and was further demonstrated in FY2020 with the completion of the roll-out of new driver monitoring
technology across the Group’s 300 interstate prime movers in the first half of FY2020. The project acknowledges the importance of
driver wellbeing and safety.
Division
Corporate
Rural
Transport
Total FTE
2020
76
99
1,282
1,457
2019
74
102
1,249
1,425
Change
%
2
(3)
33
32
2.7%
(2.9%)
2.6%
2.2%
The Board recognises it has an important leadership role in promoting safety at all levels in the Group and is committed to ensuring
safety practices, behaviours, policies, procedures and culture are in place, not only for the employees but the community and all
stakeholders.
Covid-19 impact
As a leading national provider of transport and logistic services to the horticulture and food related industries, the Group remains
committed to maintaining its essential services to customers during these unprecedented times and continuing its key role in the food
supply chain.
The Group has implemented and maintains a significant number of initiatives in response to the Covid-19 challenges, with a particular
focus on staff wellbeing, customer communications and safety and compliance for the suppliers, customers and all community
stakeholders.
Transport’s road freight business has been impacted by freight imbalances and sub-optimal equipment utilisation rates caused by
abnormal consumer spending on food and related products during the last quarter of the year.
Transport’s import/export logistics operations which are conducted by Lindsay Fresh experienced a material decline in revenues since
the onset of the pandemic due to a lack of air freight capacity and associated export services. Capacity restraints are expected to
continue for the first half for FY2021. The Lindsay Fresh division was eligible for the Australian Government Job Keeper wage subsidy
scheme and received wage subsidies in the year ended 30 June 2020 of $870,000.
The Rural division has experienced some supply restraints on products which are manufactured overseas due to increased shipping
timeframes, however, the division overall has not been materially impacted.
While Transport is fully operational as an essential service provider in all States, we are aware that circumstances are subject to
sudden and continual changes.
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
10
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 both service 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 the latest technology to improve safety and systems.
Investing for future growth and sustainability
Facility upgrades to improve operational efficiencies and increased cold store capacity;
Sydney purpose-built cold store distribution facility opened in March 2020;
Real-time temperature monitoring project to retrofit all refrigerated trailers and containers completed in FY2020; and
Driver safety monitoring technology roll-out for all interstate prime movers completed in FY2020.
Transport division
Ongoing expansion of the refrigerated rail container fleet to support the service expansion for new freight lanes and customer
additions;
Road fleet renewal to deliver a modern fleet with latest safety features;
Use of technology to achieve increased equipment utilisation; and
Customer reviews to ensure service model meets customer demands.
Rural division
Focus on high growth horticulture regions;
Reducing cost to service;
Focus on product sales mix to deliver margin improvements; and
Leverage existing Transport geographical reach.
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, competition, cyber, climate change
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 1.5 cents (1.0 cent interim, 0.5 cents final) are proposed out of the FY2020 profit. This is a payout of $4,484,000
representing 84% 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.
Lindsay Australia Limited | Annual Report 2020 | Directors’ Report
11
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
13
16
17
18
18
19
19
20
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001.
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
12
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 2020 was $287,986 (2019: $195,570).
The amount of aggregate remuneration sought (subject to the approval of shareholders) and the manner in which it is apportioned
amongst directors is reviewed annually. The board considers the fees paid to non-executive directors of comparable companies when
undertaking the annual review process. There is no scheme to provide retirement benefits, other than statutory superannuation, to
non-executive directors. No additional remuneration is paid for board committee membership.
Details of the nature and amount of the emolument of each director of the Company for the years ended 30 June 2020 and
30 June 2019 are set out on page 17.
The table below lists the executive directors and non-executive directors of Lindsay Australia Limited during the financial year:
Name
J F Pressler
M K Lindsay
R A Anderson
A R Kelly
R L Green
Position
Chairman (Non-Executive)
Appointment Date
8 January 1997
Managing Director and Chief Executive Officer
26 November 1996
Director (Non-Executive)
Director (Non-Executive)
Director (Non-Executive)
16 December 2002
3 May 2019
26 August 2019
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 2020 | Remuneration Report (Audited)
13
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 remuneration 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 an 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 the 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
FY2020, M K Lindsay achieved STI cash bonus, inclusive of superannuation of $200,000 (FY2019: $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
%
M K Lindsay - Managing Director & Chief Executive Officer
2020
2019
845,518
845,518
507,311
507,311
200,000
200,000
39%
39%
61%
61%
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
14
Long term incentives (LTI)
Key management personnel are eligible to participate in the Long Term Incentive (Option) Plan (LTIP) that was approved by
shareholders at the 2016 Annual General Meeting. Terms and conditions of the LTIP are detailed in Note 30.
At the 2017, 2018 and 2019 Annual General Meeting, shareholders approved the issue of 400,000 share options (each year) to the
CEO, M K Lindsay, pursuant to the LTIP.
The terms of the options issued under the LTIP are:
Each option is to acquire one ordinary share in Lindsay Australia Limited (the Company);
The options were issued for nil consideration;
The employee must remain employed by the Company during the vesting period;
The exercise price to acquire a share is $nil;
The options will 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 LTIP rules;
The options will vest if a number of performance targets are achieved (refer table below);
Notwithstanding the vesting conditions, in accordance with the LTIP 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 share options issued under the LTIP (including performance targets) are listed in the table below.
Share Options Granted To
Share Options Granted
Valuation at Grant Date
Net Profit After Tax Hurdle
FY2020
M K Lindsay
400,000
$0.3071
FY2019
M K Lindsay
400,000
$0.3151
$9,530,000 (FY2020)
$9,010,000 (FY2019)
3 Year Aggregate EPS Target
11.54 cents per share
11.54 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 30 for additional information on LTIP.
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 2020 and 2019 financial years:
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
Group Legal 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 2020 and 30 June 2019 are provided later in this report.
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
15
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 not used in FY2020 but were used in
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 with no engagement costs in FY2020.
Voting and comments made at the Group’s 2019 Annual General Meeting
Lindsay Australia Limited received more than 97% of “yes” votes on eligible votes cast by shareholders present or by proxy on its
Remuneration Report for the 2019 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 the 2020 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
Group 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.
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
16
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.
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)
2020
2019
R A Anderson
2020
2019
84,156
84,049
63,117
63,036
-
-
-
-
G D Farrell (retired 26 October 2018)
2020
2019
-
21,012
A R Kelly (appointed 3 May 2019)
2020
2019
63,117
10,506
-
-
-
-
R L Green (appointed 26 August 2019)
2020
2019
Sub-Total
2020
Sub-Total
2019
52,611
-
263,001
178,603
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Executive director and other key management personnel
M K Lindsay - Managing Director & Chief Executive Officer
2020
2019
843,420 182,648
828,171 182,648
12,713
9,578
12,590
12,564
J T Green - Chief Financial Officer & Company Secretary
2020
2019
298,682
40,000
288,393
37,500
-
-
4,677
4,666
B T Jones – Group Legal Counsel & Company Secretary
2020
2019
293,905
20,000
296,393
20,000
C R Baker - General Manager Rural
-
-
13,880
-
334,651
52,500
52,498
(2,099)
311,447
45,000
56,708
5,183
1,770,658 295,148
65,211
29,048
2020
2019
Sub-Total
2020
Sub-Total
2019
7,995
7,985
5,996
5,988
-
1,996
5,996
998
4,998
-
24,985
16,967
26,411
25,000
25,260
25,000
25,085
25,000
25,443
25,000
102,199
-
-
-
-
-
-
-
-
-
-
-
92,151
92,034
69,113
69,024
-
23,008
69,113
11,504
57,609
-
287,986
-
195,570
131,592 1,209,374
90,641 1,148,602
-
-
-
-
-
-
368,619
355,559
352,870
341,393
462,993
443,338
131,592 2,393,856
%
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
26
24
11
11
6
6
11
10
18
16
16
15
1,724,404 285,148
66,286
22,413
100,000
90,641 2,288,892
Total 2020
2,033,659 295,148
65,211
29,048
127,184
131,592 2,681,842
Total 2019
(a) Share-based option payments are the probable number to vest at the grant date value.
1,903,007 285,148
116,967
66,286
22,413
90,641 2,484,462
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
17
D. Other Transactions with Key Management Personnel
Amounts recognised as revenues and expenses (exclusive GST):
2020
$
Revenues
Cartage revenue received / receivable from and the sale of rural supplies to entities associated with J F Pressler
20,579,591
Expenses
Fees for corporate uniform consultancy provided by entities associated with M K Lindsay
18,867
Amounts receivable / payable to key management personnel and their related parties at the reporting date
Current receivables – trade debtors
1,071,183
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 LTIP is
structured as a reward for length of service and is variable depending upon cumulative annual performance.
The terms and conditions of each grant of options affecting performance in the current or future reporting periods are as follows:
Grant Date
October 2017
October 2018
October 2019
Options issued Fair Value per
option (cents)
Date vested and
exercisable
Expiry
date
Exercise
price
Vested
400,000
400,000
400,000
36.5
31.5
30.7
October 2020
October 2024
October 2021
October 2025
October 2022
October 2026
-
-
-
-
-
-
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 2020 are set out below. When exercisable, each option is convertible into
one ordinary share of Lindsay Australia Limited. Further information on the options is set out in Note 30 of the financial report.
Name
Number of options
granted during the
year
Value of options
at grant date (a)
Number of
options
forfeited
Number of
options vested
during the year
M K Lindsay (October 2017)
M K Lindsay (October 2018)
M K Lindsay (October 2019)
400,000
400,000
400,000
145,881
126,041
122,855
-
-
-
-
-
-
(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 the 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
2020 financial year are as follows.
Name
Balance 30 June 2019
Granted
during year
Modified, vested
and Exercised
during year
Forfeited
% Forfeited
Balance 30 June 2020
Unvested
Vested
Unvested
Vested
M K Lindsay
800,000
-
400,000
-
-
-
1,200,000
-
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
18
F. Equity Holdings of Key Management Personnel
Share options provided as remuneration and shares issued on exercise of such
options
During the 2020 and 2019 financial years, share options were provided as remuneration as part of the Long Term Incentive (Option)
Plan.
The table below details share options issued to key management personnel.
No shares in Lindsay Australia Limited have been issued in the 2020 or 2019 financial years up to the reporting date on the exercise of
such options.
Refer Note 30 for additional information on share options.
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)
M K Lindsay: Unlisted share options over ordinary shares
Not vested (issued October 2019)
Share holdings
Quantity
400,000
400,000
400,000
Exercise Price
$nil
$nil
$nil
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.
Directors of Lindsay Australia Limited
J F Pressler
M K Lindsay
R A Anderson
A R Kelly (appointed 3 May 2019)
R L Green (appointed 26 August 2019)
Other key management personnel of the Group
B T Jones
J T Green
C R Baker
Balance at
30 June 2019
Net change
other
Balance at
30 June 2020
2,665,786
4,601
2,670,387
11,615,581
228,305
11,843,886
391,869
-
-
-
31,632
61,764
-
-
-
-
-
4,125
391,869
-
-
-
31,632
65,889
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 financial years.
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
19
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
$
2016
2017
2018
2019
2020
2,578,782
2,238,340
2,673,788
2,484,462
2,681,842
EPS
¢
2.8
2.2
2.7
3.0
1.8
Dividends
¢
Share Price
¢
2.2
1.6
1.8
2.1
1.5
47.5
38.0
38.0
34.5
35.0
This report is made in accordance with a resolution of the directors.
John F Pressler
Chairman of Directors
Brisbane, Queensland
25 August 2020
Lindsay Australia Limited | Annual Report 2020 | Remuneration Report (Audited)
20
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 2020, 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 (including Independence
Standards).
This declaration is in respect of Lindsay Australia Limited and the entities it controlled during the year.
PITCHER PARTNERS
DAN COLWELL
Partner
Brisbane, Queensland
25 August 2020
Lindsay Australia Limited | Annual Report 2020 | Auditor’s Independence Declaration (Audited)
21
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
Inventories
1. Significant Accounting Policies
2.
Financial Risk Management
3. Critical Accounting Estimates & Judgements
4. Revenues
5. Other Revenue
6. Expenses
7.
Income Tax
8.
Franking Credits / Dividends
9. Cash and Cash Equivalents
10. Trade and Other Receivables
11.
12. Financial Assets at Fair Value Through Other Comprehensive Income
13. Property, Plant and Equipment
14. Right-of-use Assets
15. Lease Liabilities
16. Deferred Tax Assets
17.
Intangible Assets
18. Trade and Other Payables
19. Borrowings
20. Deferred Tax Liabilities
21. Provisions
22. Other Liabilities
23. Contributed Equity
24. Reserves
25. Retained Earnings
26. Cash Flow Information
27. Earnings per Share
28. Auditor’s Remuneration
29. Related Party Disclosures
30. Share-based Payments
31. Subsidiaries
32. Segment Information
33. Deed of Cross Guarantee
34. Capital Commitments
35. Contingent Liabilities
36. Parent Company Information
37. Events after the reporting period
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance Statement
Shareholder Information
Distribution of Shareholders
Top Twenty Shareholders
25
26
27
28
29
29
37
41
42
42
43
44
45
46
46
47
47
48
49
49
50
51
52
53
54
55
55
56
56
57
57
58
58
58
59
62
63
66
66
66
67
67
68
69
73
83
83
83
Lindsay Australia Limited | Annual Report 2020 | Consolidated Financial Statements
23
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 in the
Directors’ Report which is not part of this financial report.
The financial statements were authorised for issue by the directors on 25 August 2020. The directors have the power to amend and
reissue the financial statements.
Lindsay Australia Limited | Annual Report 2020 | Consolidated Financial Statements
24
Lindsay Australia Limited
Consolidated Statement of Profit and Loss and
Other Comprehensive Income
for the year ended 30 June 2020
Revenue
Other revenue
Fair value gain arising on recognition of financial liabilities
Expenses
Changes in inventories
Purchase of inventories
Employee benefits expense
Subcontractors
Depreciation and amortisation
Vehicle operating charges
Finance costs
Operating lease rentals
Rental and equipment hire costs
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
4
5
15
6
6
6
6
6
7
25
27
27
2020
$’000
2019
$’000
411,515
386,077
3,595
864
(641)
3,746
-
87
(105,895)
(97,671)
(116,291)
(111,022)
(50,563)
(31,258)
(59,551)
(9,056)
-
(2,155)
(1,834)
(115)
(36,964)
(21,753)
(60,119)
(5,893)
(9,605)
-
(2,471)
(36)
(30,932)
(31,607)
7,683
(2,361)
5,322
-
5,322
Cents
1.8
1.8
12,769
(3,890)
8,879
-
8,879
Cents
3.0
3.0
The above Consolidated Statement of Profit and Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
The Group has initially applied AASB 16 at 1 July 2019 using the modified retrospective approach. Under this approach comparative
information is not restated and the cumulative effect of initially applying AASB16 is recognised in the retained earnings (refer note 1).
Lindsay Australia Limited | Annual Report 2020 | Consolidated Financial Statements
25
Lindsay Australia Limited
Consolidated Statement of Financial Position
for the year ended 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Current tax assets
Total current assets
Non-current assets
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Right-of-use assets
Intangible Assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Other
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
Note
2020
$’000
2019
$’000
9
10
11
12
13
14
17
18
19
15
21
22
19
15
20
21
22
23
24
25
17,895
50,508
12,053
5,288
1,301
17,460
55,003
13,150
4,552
663
87,045
90,828
25
25
64,407
170,064
200,756
9,305
274,493
361,538
34,019
7,918
36,043
10,159
3,363
91,502
17,190
149,484
3,201
1,868
5,930
177,673
269,175
92,363
73,421
794
18,148
92,363
-
9,606
179,695
270,523
39,549
38,548
-
9,533
3,300
90,930
77,377
-
3,164
1,523
3,424
85,488
176,418
94,105
72,615
662
20,828
94,105
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The Group has initially applied AASB 16 at 1 July 2019 using the modified retrospective approach. Under this approach comparative
information is not restated and the cumulative effect of initially applying AASB16 is recognised in the retained earnings (refer note 1).
Lindsay Australia Limited | Annual Report 2020 | Consolidated Financial Statements
26
Lindsay Australia Limited
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
Note Contributed
equity
At 30 June 2018
At 1 July 2018
Adjustment to retained earnings with application of AASB 15
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
8
At 30 June 2019
At 1 July 2019
Adjustment to retained earnings with application of AASB 16
1
Adjusted balance at 1 July 2019
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 2020
8
$’000
71,656
71,656
-
71,656
-
-
-
959
-
72,615
72,615
-
72,615
-
-
-
806
-
73,421
Share-based
payments
reserve
$’000
565
565
-
565
-
-
-
-
97
662
662
-
662
-
-
-
-
132
794
Retained
earnings
$’000
18,186
18,186
(340)
17,846
8,879
-
8,879
(5,897)
-
20,828
20,828
(1,749)
19,079
5,322
-
5,322
(6,253)
-
18,148
Total
equity
$’000
90,407
90,407
(340)
90,067
8,879
-
8,879
(4,938)
97
94,105
94,105
(1,749)
92,356
5,322
-
5,322
(5,447)
132
92,363
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
The Group has initially applied AASB 16 at 1 July 2019 using the modified retrospective approach. Under this approach comparative
information is not restated and the cumulative effect of initially applying AASB 16 is recognised in the retained earnings (refer note 1).
Lindsay Australia Limited | Annual Report 2020 | Consolidated Financial Statements
27
Lindsay Australia Limited
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
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 from 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 property lease liabilities
Repayment of equipment lease liabilities (ii)
Proceeds of equipment lease liabilities (ii)
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
2020
$’000
2019
$’000
460,690
426,417
(411,322)
(383,693)
312
(3,032)
819
(9,195)
38,272
2,458
(13,948)
(225)
304
(3,205)
1,415
(6,009)
35,229
1,335
(4,199)
(50)
(11,715)
(2,914)
31,600
25,393
(26,281)
(25,835)
(6,189)
-
(51,483)
(24,191)
31,678
(5,447)
-
(4,938)
(26,122)
(29,571)
435
17,460
17,895
2,744
14,716
17,460
26
26
26
26
26
9
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
The Group has initially applied AASB 16 at 1 July 2019 using the modified retrospective approach. Under this approach comparative
information is not restated and the cumulative effect of initially applying AASB16 is recognised in the retained earnings (refer note 1).
(i)
(ii)
Refer to Note 26 cash flow information, term debt facility renegotiated in September 2018 and March 2020.
Refer to Note 26 cash flow information for information regarding equipment lease liability refinancing during the year.
Lindsay Australia Limited | Annual Report 2020 | Consolidated Financial Statements
28
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
2020 on 25 August 2020.
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 2019. The changes detailed below were also adopted in the
interim financial statements for 31 December 2019.
AASB 16 Leases
The Group adopted AASB 16 Leases from 1 July 2019. Details of the new requirements of AASB 16 as well as the impact on the
consolidated financial statements are described below.
AASB 16 Leases supersedes AASB 117 Leases. AASB 16 introduces a single lessee accounting model and eliminates the
classification between operating and finance leases. All leases are required to be accounted for “on balance sheet” by lessees, other
than for short-term and low value 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 Group leased assets include properties and equipment. As a lessee, the Group previously classified leases as operating or finance
leases based on its assessment of whether the lease transferred substantially all of the risk and rewards of ownership.
From 1 July 2019 the Group recognises a right-of-use asset and lease liability at the commencement date which is initially measured on
a present value basis.
On initial adoption of AASB 16:
For leases previously classified as finance leases, the Group has recognised the carrying amount of the lease asset and lease
liability immediately before transition as the carrying amount of the right-of-use asset and lease liability at 1 July 2019;
For leases previously classified as operating leases under the principles of AASB 117 Leases, the Group has recognised a
right-of-use asset and lease liabilities;
The right-of-use assets have been recognised at the carrying amount as if AASB 16 Leases had always applied, discounted
using the Group’s incremental borrowing rate; and
The associated lease liabilities have been measured at the present value of future minimum lease payments, using the
Group’s incremental borrowing rate of 4.20%.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
29
The reconciliation between the operating commitments disclosed in the 30 June 2019 financial statements and the lease liability
recognised as at 1 July 2019 is detailed below:
Operating lease commitments disclosed at 30 June 2019
Discounted using lessee’s incremental borrowing rate at the implementation of AASB 16
Less: short-term leases not recognised as a liability
Lease liability recognised as at 1 July 2019 (i)
Current Liability
Non-current liability
Lease liability recognised as at 1 July 2019 (i)
(i)
In addition to those previously recognised as finance leases.
The right-of-use assets recognised on 1 July 2019 relate to the following asset types:
Properties
Equipment
Total right-of-use assets (net)
$’000
60,897
(10,675)
(694)
49,528
5,180
44,348
49,528
44,672
116,714
161,386
In applying AASB 16 for the first time, the Group has applied the following practical expedients as permitted by the standard:
Applied the exemption not to recognise right-of-use assets and lease liabilities for low value leases or leases with less than 12
months of lease term;
Applied the use of a single discount rate to the portfolio of leases with similar characteristics. The rate applied was the Group’s
weighted average borrowing rate of 4.20%;
Applied the use of hindsight in determining the lease term where the contract contains options to extend the lease; and
Relied on previous assessments on whether leases are onerous.
The impact on the consolidated statement of financial position on the initial adoption of the new lease standard is set out below.
The Group has adopted AASB 16 on 1 July 2019 using the modified retrospective approach. As permitted under the specific transitional
provisions of the standard, comparatives have not been restated for the 2019 reporting period. The reclassifications and adjustments
arising from the adoption of the new leasing standard are recognised in the opening statement of financial position.
On transition, the Group recognised new right-of-use assets of $45.10 million and lease liabilities of $49.52 million which were
previously classified as operating leases. The table below summarises the impact of the adoption on the statement of financial position
as at 1 July 2019:
Property, plant and equipment
Right-of-use assets
Borrowings (current and non-current)
Lease liabilities (current and non-current)
Other liabilities
Deferred taxes (net)
Retained earnings
As reported
30 June 2019
$’000
AASB 16
transition
adjustments
$’000
Opening balance
1 July 2019
$’000
170,064
(116,285)
-
(115,925)
161,386
95,861
-
(145,389)
(6,724)
(3,164)
(20,828)
1,928
750
1,749
53,779
161,386
(20,064)
(145,389)
(4,796)
(2,414)
(19,079)
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
30
The impact on the consolidated statement of profit and loss and other comprehensive income and the Group’s before tax earnings and
earnings before interest, tax and depreciation (EBITDA) for the year ended 30 June 2020 as a result of the adoption of the new lease
standard is set out below.
The movement in the right-of-use assets for the period has resulted in $7.55 million of depreciation charges. The finance lease liabilities
gave rise to finance costs of $2.63 million for the period.
2020
Reported profit (loss) before tax
Impact of application of AASB 16
Depreciation right of use properties
Finance costs right-of-use properties
Operating lease rental payments
AASB 16 profit impact
Transport
Rural
$’000
26,029
4,382
1,505
(5,096)
791
$’000
6,482
742
98
(817)
23
Corporate/
Unallocated
$’000
(24,828)
2,423
1,024
Group
$’000
7,683
7,547
2,627
(2,903)
(8,816)
544
1,358
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 2020. 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.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
31
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.
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.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
32
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
The Group has adopted AASB 16 Leases from 1 July 2019.
The Group operates several leased facilities. Facility rental agreements range in tenure from 1 to 15 years. Lease terms are negotiated
on an individual basis and with varying terms and conditions. Until the end of the 2019 financial year, leases of property were classified
as ‘operating leases’. Expenses incurred under operating leases were previously charged to the profit and loss on a straight-line basis.
From 1 July 2019, leases are now recognised as a right-of-use asset with a corresponding lease liability. Each lease payment is allocated
between the liability and finance cost. The right-of-use asset is depreciated over the lease term on a straight-line basis or over the useful
life where title to the asset transfers at the end of the lease. Assets and liabilities arising from a lease are initially measured on a present
value basis.
Depreciation on right-of-use assets and interest on lease liabilities is recognised in the consolidated statement of profit and loss and other
comprehensive income.
Payments associated with short term leases (generally less than 12 month terms) and leases of low value have continued to be recognised
on a straight-line basis as an expense in the consolidated statement of profit and loss and other comprehensive income. Low value leases
include office equipment and short-term leases includes equipment that is utilised by the Group to cover peak operating periods and are
on short term rental agreements of less than 12 months in tenure.
The principal portion of the lease payments are recognised as a financing cash flow and the interest portion of the lease payments are
recognised as an operating cash flow in the consolidated statement of cash flows.
The Group uses critical judgements in determining the lease term. Extension options are only included in the lease term where
management considers that it is reasonably certain that the lease will be extended.
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 include 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.
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 the 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.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
33
k.
Investments and other 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.
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 at fair value through 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
Right-of-use assets
Leasehold improvements
Plant and equipment
Leased plant and equipment
Rate
2.5-5%
6.5%-50%
6.5-30%
5-40%
6.5-40%
Depreciation Basis
SL
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.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
34
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.
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 90 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.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
35
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.
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.
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.
v.
New accounting standards and interpretations
A number of new or amended accounting standards and interpretations are effective for the Group from 1 July 2019. However, aside
from those described below, these are not considered relevant to the activities of the group nor are they expected to have a material
impact on the financial statements of the Group.
The Group has adopted AASB 16 Leases on 1 July 2019. Refer note 1.1 for additional information regarding the impact of adopting the
standard.
There are a number of new accounting standards, amendments and interpretations that have been issued but are not yet effective,
however these are not considered relevant to the activities of the Group nor are they expected to have a material impact on the
financial statements of the Group.
w.
Parent entity financial information
The financial information for the parent entity, Lindsay Australia Limited, disclosed in Note 36 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
taxpayer 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.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
36
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.
x.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will
be complied with. When the grant relates to an expense item, it is recognised as a reduction of the expense to which it relates.
y.
General
Lindsay Australia Limited is a public company limited by shares, incorporated and domiciled in Australia. The Registered Office and
Principal Place of Business is:
Lindsay Australia Limited
152 Postle Street
ACACIA RIDGE QLD 4110
2.
Financial Risk Management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other
price risks, and aging analysis for credit risk. Risk management is undertaken by senior management and the Board of Directors.
Monthly reports of financial assets and financial liabilities including undrawn facilities, analysis and details of significant and/or overdue
debtors are provided to the Board of Directors for review.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents (a)
Trade and other receivables (a)
Equity securities (b)
Financial liabilities
Trade and other payables (c)
Borrowings (c) (d)
Lease liabilities (e) (f)
2020
$’000
2019
$’000
17,895
50,508
25
17,460
55,003
25
68,428
72,488
34,019
25,500
186,309
245,828
39,549
116,041
-
155,590
(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 $392,000 (2019: $116,000).
(e) The carrying amount of lease liabilities excludes offsetting of fair value gain of $782,000 (2019: nil).
(f) Lease liabilities include $87.6m of liabilities relating to the application of AASB 16 for property leases.
a.
Assets pledged as security
Refer to Note 19 for information on assets pledged as security.
b.
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 FY2020 accounted for 0.2% (2019: 1.1%) of Group
revenue.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
37
In FY2020 the Group purchased approximately $5.4 million (5.1%) (2019: $3.9 million (4.0%)) 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 2020 and 30 June 2019 is not
significant.
c.
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 2020 and 30 June 2019 is not significant.
d.
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 2020 and 2019, the
Group’s borrowings at variable rate were denominated in Australian Dollars. The Group’s policy is to fix interest 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 for seasonal extended payment terms or for debtors that
extend beyond agreed payment terms.
The Group’s cash flow interest rate risk primarily relates to variable rate financial instruments such short term and long term variable
rate bank loan borrowings. The proportion of variable rate borrowings to total borrowings of the Group at 30 June 2020 is 20.5%
(2019: 14.0%). 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
2020
%
2019
%
2020
$’000
2019
$’000
Cash and cash equivalents
0.01%
0.03%
17,865
17,460
Borrowings
Bank loans (i)
3.18%
4.20%
25,500
16,206
(i)
The carrying amount of borrowings disclosed excludes offsetting borrowing costs of $392,000 (2019: $116,000).
At 30 June 2020, 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 $53,000 lower/higher (2019 – change of 1%: $9,000 lower/higher), mainly as a result of higher/lower
interest expense from borrowings and higher/lower interest income from cash and cash equivalents.
e.
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 2020 the largest ten debtors comprised approximately 29% (2019: 23%) of total trade debtors (the largest individual debtor
comprised 7.2% (2019: 3.7%) 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 69% (2019: 66%).
At the reporting date cash was held with the Group’s principal financiers, including Commonwealth Bank of Australia,
Westpac Banking Corporation and the National Australia Bank.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
38
f.
Liquidity risk
Liquidity risk is managed by maintaining sufficient cash and the availability of funding, through an 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 finance facilities.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the reporting date:
Available facilities
Bank overdraft
Bank loan - working capital finance facility
Bank loan
Other loans
Equipment finance lease liabilities
Amounts utilised
Bank loan – working capital finance facility
Bank loans (a)
Other loans
Equipment finance lease liabilities (b)
Unused facilities
2020
$’000
2019
$’000
-
10,000
19,500
80
5,000
-
24,215
659
130,000
135,800
(6,000)
(19,500)
-
-
(19,721)
(459)
(98,749)
(95,861)
35,331
49,633
(a) The carrying amount of borrowings disclosed excludes offsetting of borrowing costs of $392,000 (2019: $116,000).
(b) The carrying amount of equipment finance lease liabilities disclosed excludes offsetting of a fair value gain of $782,000 (2019: nil).
Bank loan - working capital finance facility
The working capital finance facility is available until March 2023 unless the lender demands repayment in accordance with the facility
agreement. The interest rate is variable and is based on prevailing market rates. The facility is utilised to fund annual premiums such as
registrations and insurances and drawn upon and repaid as per the Groups funding requirements but not longer than 12 months from
initial utilisation. The facility is subject to annual review.
Bank loans
Bank loans are generally 12 months to 5 years in tenor and repayable by quarterly instalments of principal and interest with a balloon
payment. The interest rate is variable and is based on prevailing market rates. The facility is subject to annual review.
Other loans
In 2020, other loans relate to a corporate card facility held with a financial institution. The amounts are payable at the end of each
month. The facility is subject to annual review.
In 2019, the balance of other loans included an amount of $459,000 that related to an interest free working capital loan provided by Visy
Board Pty Ltd. The loan was repaid in full in FY2020.
Equipment finance lease facilities
The consolidated entity can draw on these lease facilities for the acquisition of plant and equipment (by way of equipment finance
lease). Generally:
The facilities are subject to periodic review;
Individual equipment finance agreements generally range in tenor of between 1 and 5 years depending on the equipment type;
Fixed monthly repayments of principal and interest are arranged over the term of each agreement at the date of each draw;
Depending on the equipment finance by the agreement, balloon residuals are generally refinanced for a further term of between 1
and 3 years; and
The liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.
At 30 June 2020, $5,166,000 (30 June 2019: $5,960,000) was included as a current liability on the financial statement for balloon
residuals for equipment finance agreements expiring within 12 months of balance date. As per the Group’s equipment finance strategy,
these balloon residuals are expected to be refinanced for a further term as they fall due.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
39
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting
date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
At 30 June 2019
Trade payables
Borrowings
Equipment finance leases
Total
At 30 June 2020
Trade payables
Borrowings (a)
Equipment finance leases (b)
Lease liabilities - properties
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
Within
1 year
$’000
39,549
8,141
34,707
34,019
8,661
32,001
10,735
82,397
35,772
47,134
-
-
3,931
9,860
31,841
37,274
-
-
2,556
15,513
24,419
49,187
-
-
-
-
-
-
-
39,549
21,932
103,822
39,549
20,180
95,861
165,303
155,590
34,019
26,730
105,607
34,019
25,500
98,749
87,559
10,368
29,107
61,405
111,615
Total
85,416
37,343
93,807
61,405
277,971
245,827
(a) The carrying amount of borrowings disclosed excludes offsetting of borrowing costs of $392,000 (2019: $116,000).
(b) The carrying amount of equipment finance lease liabilities excludes offsetting of a fair value gain of $782,000 (2019: nil).
g.
Fair value estimation
The Group has no significant financial assets measured and recognised at fair value in the financial statements at year end. In FY2020
the Group recognised a fair value gain of $864,000 on the refinance of $24,233,000 of equipment finance obligations. Refer Note 15 for
additional information. There were no other significant liabilities measured at fair value in the financial statements 2020 or 2019 financial
years.
The carrying amounts of financial instruments represent reasonable approximations of their fair values, given their short-term nature.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
40
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 17 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. Trade and other receivables, 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.
The Group uses critical judgements in determining the lease term for property leases with renewable extension options. The lease term
is determined to be the non-cancellable term of a lease and includes the periods covered by an option to extend the lease term where
management considers that it is reasonably certain that the lease extension option will be exercised.
The Group uses critical input judgements when determining the Group’s entitlements to fuel tax credits. These judgements are based
on continual technology improvements which assist the fuel tax credit input data capture process, which includes key inputs such
kilometres travelled, fuel burn rates, idle rates and off-road kilometres and other key inputs which are continually reviewed.
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
41
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.
2020
Revenues
Horticulture
Commercial
Revenue from contracts with customers
Other revenue
Corporate/unallocated revenue
Total other revenue
Total revenue
2019
Revenues
Horticulture
Commercial
Revenue from contracts with customers
Other revenue
Corporate/unallocated revenue
Total other revenue
Total revenue
5. Other Revenue
Other revenue comprises
Insurance and other recoveries
Rents received
Interest received
Other
Transport
Rural
$’000
Group
$’000
146,090
136,765
128,660
274,750
-
136,765
282,855
128,660
411,515
2,180
263
2,443
1,152
3,595
285,035
128,923
415,110
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
2020
$’000
996
130
312
2,157
3,595
2019
$’000
970
308
304
2,164
3,746
Lindsay Australia Limited | Annual Report 2020 Notes to consolidated financial statements
42
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
Employee benefits expense
Salaries and wages
Defined contribution superannuation expense
Government wage subsidies received due to Covid-19
Other wage expenses
Total employee benefits expense
Finance costs
Break fee related to refinancing of equipment lease liabilities (refer note 15)
Amortisation of fair value gain on recognition of lease liabilities
Finance costs on financial obligations
Finance costs on equipment lease liabilities
Finance costs on property lease liabilities
Total finance costs
Depreciation
Freehold buildings
Plant and equipment
Leasehold improvements
Right of Use Asset
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
Impairment losses – trade receivables
Impairment losses/(reversals) – inventory
Rental and equipment hire costs
2020
$’000
2019
$’000
106,536
97,584
396
298
1,140
-
1,834
108,779
7,513
(870)
869
373
242
1,183
673
2,471
102,173
7,098
-
1,751
116,291
111,022
864
82
1,614
3,869
2,627
9,056
412
5,082
1,056
24,153
-
258
297
-
-
1,483
4,410
-
5,893
411
4,499
892
-
15,416
257
278
31,258
21,753
59,551
-
59,551
115
117
2,155
63,485
(3,366)
60,119
36
(57)
9,605
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 2020 Notes to consolidated financial statements
43
7.
Income Tax
Income tax expense
Current tax
Deferred tax
Deferred tax is attributable to:
(Increase) decrease in deferred tax assets (Note 16)
Increase (decrease) in deferred tax liabilities (Note 20)
Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax
Tax at the Australian tax rate of 30% (2019: 30%)
Tax effects of amounts which are not deductible (taxable) in calculating taxable income:
Non-deductible expenses
Income tax expense
Tax losses
2020
$’000
1,460
901
2,361
(1,609)
2,510
901
7,683
2,305
56
2,361
2019
$’000
2,214
1,676
3,890
(51)
1,727
1,676
12,769
3,831
59
3,890
Unused tax losses for which deferred tax assets have not been recognised at 30%
263
263
All unused and unrecognised tax losses were incurred by Australian entities and comprise capital losses.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
44
8.
Franking Credits / Dividends
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
(2019: 30%)
2020
$’000
2019
$’000
3,539
4,650
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 $641,000 (2019 - $1,399,000).
Dividends paid
Interim dividend for the year ended 30 June 2020 of 1.0 cent per share fully franked (at 30%) paid
in full on 09 April 2020. (2019: 1.0 cent per share fully franked (at 30%) paid in full on 29 March
2019).
Interim dividends paid in cash or satisfied by the issue of shares under the dividend re-investment
plan during the years ended 30 June 2020 and 2019 were as follows:
Paid in cash
Satisfied by issue of shares
Final dividend for the year ended 30 June 2019 of 1.1 cents per share fully franked (at 30%) paid
on 30 September 2019 (2019 – 1.0 cent per share fully franked (at 30%) paid in full on 28
September 2018).
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 2020 and 2019 were as follows:
Paid in cash
Satisfied by issue of shares
Dividends not recognised at year end
2,988
2,955
2,832
156
2,988
3,265
2,615
650
3,265
2,460
495
2,955
2,942
2,478
464
2,942
In addition to the above dividends, since year end the directors have recommended the payment
of a final dividend of 0.5 cents per share fully franked based on tax paid at 30% (2019: 1.1 cents
per share fully franked (at 30%) paid in full on 30 September 2019).
1,496
3,265
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
45
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
2020
$’000
17,895
2019
$’000
17,460
17,895
17,895
17,460
17,460
2020
$’000
46,034
(138)
45,896
823
631
3,158
50,508
2019
$’000
49,767
(171)
49,596
3,428
581
1,398
55,003
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 2018
Increase (decrease) in allowance for movements in expected credit losses
Trade receivables written off during the year
Loss allowance at 30 June 2019
Increase (decrease) in allowance for movements in expected credit losses
Trade receivables written off during the year
Loss allowance at 30 June 2020
$’000
291
(290)
170
171
(182)
149
138
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
46
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 $152,000 inclusive of GST of
$14,000 (2019: $188,000 inclusive of GST of $17,000). 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:
2020
Trade Receivables
2020
Impairment allowance
2019
Trade Receivables
2019
Impairment allowance
$’000
37,024
7,985
487
538
46,034
$’000
(30)
(15)
(4)
(103)
(152)
$’000
35,200
13,024
429
1,114
49,767
$’000
(29)
(38)
(11)
(110)
(188)
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 historical analysis and future economic
considerations 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. The Group charges interest on a small number of debtor balances for
seasonal extended payment terms or for debtors that extend beyond agree payment terms. Interest charged on these debtors is at
ranges between 0.75% 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 (a)
Finished goods – at cost
Provision for obsolescence
(a) Raw materials and stores are expensed and not charged to cost of sales.
12. Financial Assets at Fair Value Through Other
Comprehensive Income
Unlisted equity securities
2020
$’000
2,149
10,266
12,415
(362)
12,053
2019
$’000
2,605
10,790
13,395
(245)
13,150
2020
$’000
25
2019
$’000
25
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
47
13. 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
Movements in carrying amounts
2020
$’000
7,034
16,034
(1,931)
21,137
24,184
(4,372)
19,812
40,949
95,921
(73,755)
22,166
-
-
-
1,292
23,458
64,407
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
Movements in the carrying amounts for each class of property, plant and equipment are shown below.
Freehold
Land
Buildings
Leasehold
Improvements
Plant &
Equipment
$’000
$’000
$’000
$’000
Plant &
Equipment
Under Finance
Lease
$’000
Work in
Progress
Capital
Total
$’000
$’000
Carrying amount at 30 June 2018
6,430
14,363
9,801
21,128
116,478
-
168,200
Additions
Disposals
Transfers
Depreciation/amortisation
579
563
-
-
-
-
-
(411)
(892)
-
-
-
1,863
(2,135)
3,623
(4,499)
18,849
3,365
(2)
(3,623)
(15,416)
-
-
-
25,219
(2,137)
-
(21,218)
Carrying amount at 30 June 2019
7,009
14,515
8,909
19,980
116,286
3,365
170,064
Application of AASB 16 (refer note 14)
-
-
Carrying amount 1 July 2019
7,009
14,515
Additions
Disposals
Transfers – WIP Capital
Transfers – right-of-use assets
Depreciation
5
-
20
-
-
-
-
-
-
(412)
Carrying amount at 30 June 2020
7,034
14,103
-
8,909
11,629
-
330
-
(1,056)
19,812
-
(116,286)
-
(116,286)
19,980
3,253
(1,316)
637
4,694
(5,082)
22,166
-
-
-
-
-
-
-
3,365
53,778
1,292
16,179
-
(1,316)
(3,365)
(2,378)
-
-
4,694
(6,550)
1,292
64,407
Assets pledged as security. Refer to Note 19 for information on assets pledged as security.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
48
14. Right-of-use Assets
Right-of-use Property Leases
At Cost
Accumulated depreciation
Total right-of-use Property Lease
Right-of-use Equipment Leases
At Cost
Accumulated depreciation
Total right-of-use Equipment Lease
Total right-of-use assets
Movements in carrying amounts
Carrying amount at 30 June 2019
Application of AASB 16 Leases (refer note 1)
Carrying amount at 1 July 2019
Additions/modifications
Disposals
Transfers – WIP Capital
Transfers – plant and equipment
Depreciation
Carrying amount at 30 June 2020
15. Lease Liabilities
Lease liabilities – Current
Property
Equipment (i)
Total current lease liabilities
Lease liabilities – Non-current
Property
Equipment (i)
Total non-current lease liabilities
Total lease liabilities
2020
$’000
2019
$’000
102,553
(20,781)
81,772
179,588
(60,604)
118,984
200,756
-
-
-
-
-
-
-
Right-of-use
Properties
Right-of-use
Equipment
Total Right-of-use
Assets
$’000
-
45,100
45,100
44,219
-
-
-
(7,547)
81,772
$’000
-
116,286
116,286
22,686
(1,037)
2,349
(4,694)
(16,606)
118,984
$’000
-
161,386
161,386
66,905
(1,037)
2,349
(4,694)
(24,153)
200,756
2020
$’000
2019
$’000
7,226
28,817
36,043
80,333
69,151
149,484
185,527
-
-
-
-
-
-
-
(i) The carrying amount of equipment lease liabilities includes an offsetting fair value gain of $782,000.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
49
Movements in carrying amounts
Carrying amount at 30 June 2019
Application of AASB 16 Leases
Carrying amount at 1 July 2019
Additions (i)
Lease modification
Repayments (i)
Interest
Fair value gain – movement
Carrying amount at 30 June 2020
Lease liabilities
properties
Lease liabilities
equipment
Total lease
liabilities
$’000
-
49,528
49,528
44,219
(30)
(8,785)
2,627
-
87,559
$’000
-
95,861
95,861
54,371
-
(55,351)
3,869
(782)
97,968
$’000
-
145,389
145,389
98,590
(30)
(64,136)
6,496
(782)
185,527
(i) Refer to note 26 cash flow information for breakdown of lease liabilities refinanced during the financial year.
Recognition and measurement – Leases
Refer Note 1.3(e) summary of significant accounting policies and Note 19(b) leases for additional information on the recognition and
measurement of leases.
Assets pledged as security
Refer to Note 19 for information on assets pledged as security.
Fair value gain arising on recognition of financial liabilities
In March 2020 the Group renegotiated its financing arrangements which included the refinancing of $24,233,000 of equipment lease
liabilities. As part of the refinance of the equipment lease liabilities, the Group was able to secure below market fixed interest rates on a
range of separate agreements between 12 months and 5 years tenor. Using the income valuation approach, the Group recognised a
fair value gain of $864,000 on the new financial obligations by comparing the present value of future cash flows of the liabilities with the
financier’s standard rates with the discounted rates under the new arrangement. The fair value gain will be amortised over the
remaining term of the new lease liabilities using the effective interest method. The carrying value of the fair value gain at 30 June 2020
is $782,000 and is offset against equipment lease liabilities in the statement of financial position. $82,000 has been expensed to finance
costs during the year.
16. Deferred Tax Assets
The balance comprises temporary differences attributable to:
Impaired receivables
Employee benefits
Payables
Other liabilities
Other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions (refer Note 20)
Net deferred tax assets
2020
$’000
41
3,610
373
1,779
97
5,900
(5,900)
-
2019
$’000
51
3,318
386
1,029
85
4,869
(4,869)
-
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
50
Movements
Employee
Benefits
Impaired
Receivables
Payables
Other
liabilities
Other
Total
At 30 June 2018
(Charged)/credited to:
Profit or loss
Adoption of AASB 15
At 30 June 2019
(Charged)/credited to:
Profit or loss
Adoption of AASB 16
At 30 June 2020
$’000
3,073
245
-
3,318
292
-
3,610
$’000
87
(36)
-
51
(10)
-
41
$’000
493
(107)
-
386
(13)
-
373
$’000
844
185
-
1,029
1,328
(578)
1,779
$’000
175
(236)
146
$’000
4,672
51
146
85
4,869
12
-
97
1,609
(578)
5,900
17.
Intangible Assets
Computer software
Accumulated amortisation
Goodwill
Accumulated impairment
Customer list
Accumulated amortisation
Total intangible assets
2020
$’000
5,100
2019
$’000
4,846
(3,889)
(3,592)
1,211
7,805
(244)
7,561
1,802
(1,269)
533
9,305
1,254
7,805
(244)
7,561
1,802
(1,011)
791
9,606
Total
$’000
10,090
51
(535)
9,606
225
29
(555)
9,305
a.
Movements in carrying amounts
Movements in the carrying amounts for each class of intangible asset are shown below.
Carrying amount at 30 June 2018
Additions
Amortisation
Carrying amount at 30 June 2019
Additions
Transfers – work-in-progress capital
Amortisation
Carrying amount at 30 June 2020
Computer
Software
$’000
1,481
51
(278)
1,254
225
29
(297)
1,211
Goodwill
$’000
7,561
-
-
7,561
-
-
-
7,561
Customer
List
$’000
1,048
-
(257)
791
-
-
(258)
533
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 or more frequent if events or changes in circumstances
indicate impairment. 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.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
51
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
2020
%
15.9
2.0
10.6
9.2
2019
%
16.3
2.0
13.2
9.5
Assumption
Approach used to determine values
Average gross margin
Based on past performance and management’s expectations for the future.
Terminal growth rate
Free cash growth rate
Pre-tax discount rate
The growth rate used to extrapolate cash flows beyond the five-year forecasted period based on
management’s expectations of long-term growth.
The average cash flow growth rate over the five-year forecast period is based on management’s
expectations for the future.
Reflect specific risks relating to the relevant asset or cash generating unit and the economic and
regulatory environment in which they operate based off management’s expectations for the future.
d.
Impact of possible changes in key assumptions
A sensitivity analysis was performed on key assumptions, which included increasing the discount rate from 9.2% to 11.2% (2019: 9.5%
to 11.5%) and reducing average product margin from 15.9% to 14.9% (2019: 16.3% to 15.3%). Both scenarios did not result in
impairment (2019: no impairment).
e.
Assets pledged as security
Refer to Note 19 for information on current assets pledged as security.
f.
Amortisation methods and useful lives
See note 1(f) for the accounting policies relevant to impairment of assets and note 1(n) for the Group’s policy regarding intangible
assets.
18. Trade and Other Payables
Trade payables
2020
$’000
34,019
2019
$’000
39,549
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
52
19. Borrowings
Current
Secured
Equipment finance 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
Equipment finance lease liabilities
Bank loans
Bank loans – borrowing costs offset
Total non-current borrowings
Total borrowings
2020
$’000
2019
$’000
-
8,000
(82)
7.918
-
-
31,149
6,965
(25)
38,089
459
459
7,918
38,548
-
17,500
(310)
17,190
25,108
64,712
12,756
(91)
77,377
115,925
Refer to Note 26 cash flow information, financing arrangements renegotiated in September 2018 and March 2020.
a.
Bank loans
In March 2020 the Group renegotiated its financing arrangements and the bank overdraft facility was terminated and replaced by a
short-term bank loan facility. The new facility has a $10,000,000 limit of which $6,000,000 was drawn at 30 June 2020. The bank loan
facilities are secured by guarantees by all companies in the consolidated entity supported by mortgage charges over all the
consolidated entity’s property and other assets.
b.
Lease liabilities
Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default. Certain lease
liabilities are also guaranteed by entities in the consolidated entity in addition to mortgage charges over the property and other assets.
c.
Other Loans
In 2019, the balance of other loans included an amount of $459,000 that related to an interest free working capital loan provided by Visy
Board Pty Ltd. The loan was repaid in full in FY2020.
In 2020, other loans relate to a corporate card facility held with a financial institution. The amounts are payable at the end of each
month. The facility is subject to annual review.
d.
Assets pledged as security
All the assets of the consolidated entity are pledged as security for the facilities as noted above.
e.
Fair value
Information about the Group’s fair value of borrowings is provided in Note 2.
f.
Risk exposure
Information about the Group’s exposure to risks arising from borrowings is provided in Note 2.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
53
20. 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 16)
Net deferred tax liabilities
Movements
Prepayments
Inventories
At 30 June 2018
Charged /(credited):
Profit or loss
At 30 June 2019
Charged /(credited):
Profit or loss
Implementation AASB 16
Overprovision
At 30 June 2020
$’000
1,082
61
1,143
213
-
-
1,356
$’000
695
15
710
(99)
-
-
611
2020
$’000
1,356
611
6,887
247
9,101
(5,900)
3,201
Depreciation &
Amortisation
$’000
Other
Receivables
$’000
4,333
196
760
5,093
3,236
(1,328)
(114)
6,887
891
1,087
(840)
-
-
247
2019
$’000
1,143
710
5,093
1,087
8,033
(4,869)
3,164
Total
$’000
6,306
1,727
8,033
2,510
(1,328)
(114)
9,101
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
54
21. Provisions
Current
Employee benefits
Non-current
Employee benefits
22. Other Liabilities
Current
Contract liabilities
Other
Non-current
Other
2020
$’000
2019
$’000
10,159
9,533
1,868
1,523
2020
$’000
3,356
7
3,363
2019
$’000
3,284
16
3,300
5,930
3,424
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 $3,284,000 (2019:
$2,802,000).
Revenue not recognised in the financial year as performance obligations not yet satisfied and classified as contract liabilities is
$3,356,000 (2019: $3,284,000).
Other liabilities include make-good liabilities, as well as, straight lining liabilities (2019 only).
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
55
23. Contributed Equity
Fully paid ordinary shares
The movement in fully paid ordinary shares for 2020 and 2019 is reconciled as follows:
2020
$’000
73,421
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
Issue of shares pursuant to the Dividend Reinvestment Plan
Issue of shares pursuant to the Dividend Reinvestment Plan
Balance at 30 June 2020
a.
Dividend reinvestment plan
Note
No of Shares
Issue Price
(a)
(a)
(a)
(a)
294,153,227
1,363,800
1,339,438
296,856,465
1,912,218
521,350
299,290,033
34 cents
37 cents
34 cents
30 cents
2019
$’000
72,615
$’000
71,656
464
495
72,615
650
156
73,421
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:
2019 Dividends
28 September 2018
29 March 2019
2020 Dividends
30 September 2019
09 April 2020
Number of
Shares
1,363,800
1,339,438
Issue Price
34 cents
37 cents
1,912,218
521,350
34 cents
30 cents
b.
Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue
to provide returns for shareholders and benefits for other stakeholders and to maintain a cost effective cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new
shares, raise or retire debt finance or sell assets to reduce debt.
Lindsay Australia Limited has complied with the financial covenants of its borrowing facilities during the 2020 and 2019 reporting
periods.
24. Reserves
Movements in the Share-based payments reserve are shown below.
Share-based payment reserve
Opening balance at 1 July
Employee share schemes – value of employee services
Closing balance 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.
2020
$’000
662
132
794
2019
$’000
565
97
662
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
56
25. Retained Earnings
Retained earnings at the beginning of the year
Adjustment to retained earnings with application of AASB15
Adjustment to retained earnings with application of AASB16
Profit for the year
Dividends paid or provided
Retained earnings at the end of the year
26. 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 AASB 15
- Movement in capitalised borrowing costs
- Movement in fair value gain (refer note 15)
Net changes in assets and liabilities
-
-
-
-
-
-
-
-
(Increase)/decrease in current 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
(Decrease)/increase in net deferred tax liabilities
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
Refinance of borrowings
2020
$’000
20,828
-
(1,749)
5,322
(6,253)
18,148
2019
$’000
18,186
(340)
-
8,879
(5,897)
20,828
2020
$’000
2019
$’000
5,322
8,879
31,258
21,753
10
132
-
(276)
(782)
(638)
4,336
(691)
1,097
(3,476)
221
972
787
701
97
(340)
(116)
-
424
(6,040)
(292)
(140)
6,881
1,080
812
1,530
38,272
35,229
-
806
18,849
959
FY2019: 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 was $20,700,000. 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. Included in repayment of borrowings on the statement of cash flows for FY2019 is $15,165,000
that related to the refinance of the previous facility.
FY2020: In March 2020 the Group changed its major corporate debt financing arrangements to a syndicated corporate debt facility. The
total available limit on the new facility at 30 June 2020 is $19,500,000. At 30 June 2020, $19,500,000 was drawn on the facility. The
facility is repayable in quarterly repayments of $500,000 which commenced in June 2020 with a balloon payment in March 2025.
Included in repayment of borrowings on the statement of cash flows for FY2020 is $14,499,000 that related to the refinance of the
previous facility.
Refinance of equipment lease liabilities
FY2020: Included in repayments of equipment lease liabilities on statement of cash flows is $24,233,000 of equipment lease residuals
that were refinanced under new facilities.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
57
27. Earnings per Share
Basic earnings per share
Diluted earnings per share
2020
$’000
1.8
1.8
2019
$’000
3.0
3.0
Earnings used in calculating basic and diluted earnings per share – net profit
5,322
8,879
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share
298,409,063
295,525,789
Number of
Shares
Number of
Shares
(i)
The dilutive effect of options is not significant.
28. 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.
29. Related Party Disclosures
2020
$
2019
$
181,100
28,920
210,020
171,320
72,505
243,825
a.
Key management personnel compensation (including non-executive directors)
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments expense
Detailed remuneration disclosures are provided in the remuneration report contained in the directors’ report.
b.
Other transactions and balances with key management personnel
2020
$
2019
$
2,394,018
2,254,441
29,048
127,184
131,592
22,413
116,967
90,641
2,681,842
2,484,462
Amounts recognised as revenues and expenses (GST exclusive):
Revenues
Cartage revenue received / receivable
Sale of rural supplies
Expenses
Fees for corporate uniform consultancy
2020
$
2019
$
8,343,730
7,186,610
12,235,861
9,066,850
20,579,591
16,253,460
18,867
10,400
Amounts receivable / payable to key management personnel and their related parties at the reporting date
Current receivables – trade debtors
1,071,183
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 cash and are on the same terms and conditions as non-related
parties as disclosed elsewhere in this report.
c.
Loans to key management personnel
There were no loans to key management personnel during the current or prior reporting period.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
58
30. 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 2020 financial year $131,592 (2019: $96,898) 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
(2019: $nil).
Expense arising from equity settled share-based payment transactions
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)
2020
$
131,591
131,591
2019
$
96,898
96,898
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:
(a)
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.
(b)
(c)
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
59
Options granted under LTIP
In the 2020 financial year a grant of 400,000 (2019: 400,000) options for shares exercisable at $nil was granted to the CEO M K
Lindsay pursuant to the LTIP. This issue was approved by shareholders at the Annual General Meeting held in October 2019.
No other options have been granted pursuant to the LTIP in the financial year.
Change in share-based payment reserve
During the financial year the share-based payment reserve increased by $131,592 (2019: $96,898) arising from equity settled share-
based payment transactions of $131,592 (2019: $96,898).
Fair value of options granted under LTIP
The assessed fair value at grant date of options granted during the year ended 30 June 2020 was $0.3071 (2019: $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 $122,855 (2019: $126,041) after tax for the proposed options over the three-year vesting period.
The models used the following assumptions and inputs shown below:
risk free rate based on the Australian Government 10-year bond rate as at the grant date;
a share price being the most recent traded price on ASX at grant date before the valuation was completed;
the option exercise price on 30 June 2026 of $nil (2019: 30 June 2025 at $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.
Model inputs
Risk free rate
Share price
Exercise price
Volatility
FY2020
1.20%
$0.365
$nil
30%
FY2019
2.56%
$0.36
$nil
30%
Employee Share Options Granted
The following table summarises options that have been granted under the LTIP 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
Modified, vested and exercised during the year
Balance at the end of the year
Exercisable at end of year
2020
2019
Number
800,000
400,000
-
1,200,000
-
WAEP
-
-
-
-
-
Number
537,827
400,000
(137,827)
800,000
-
WAEP
-
-
-
-
-
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
60
Summary of options outstanding
The share options outstanding at the end of the year had an exercise price of nil (2019: nil) and a weighted average remaining
contractual life of 5.8 years (2019: 5.8 years).
A summary of the status of the Groups equity settled share option plans at 30 June 2020 is presented below. When exercisable, each
option is convertible into one ordinary share of Lindsay Australia Limited at a zero-exercise price.
Tranche
Fair Value Per
Option (cents)
Grant
Date
Expiry Date
Number
Issued
Number
Forfeited
Number
Modified,
Vested and
Exercised)
Vested Not
Exercisable
LTIP – FY18
36.5
October 2017 October 2024
LTIP – FY19
31.5
October 2018 October 2025
LTIP – FY20
30.7
October 2019 October 2026
400,000
400,000
400,000
-
-
-
-
-
-
-
-
-
Determining option value at grant date
All issued and outstanding options contain no market conditions to vest. All options are non-participating zero priced options. These
options have an exercise price of zero and do not participate in dividends until exercised. The fair value at the grant date for the issues
was determined by taking the share price at grant date less the present value of dividends discounted at the risk free rate where the
vest date is greater than one year from grant date.
Modification of share-based payment arrangements
2020
No modifications to share based payments occurred in FY2020.
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.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
61
31. 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), (c)
Lindsay Transport Pty Ltd (a), (c)
Lindsay Brothers Management Pty Ltd (a), (c)
Lindsay Brothers Fuel Services Pty Ltd (a), (c)
Lindsay Brothers Hire Pty Ltd (a), (c)
Lindsay Brothers Plant & Equipment Pty Ltd (a), (c)
P & H Produce Pty Ltd (c)
Lindsay Rural Pty Ltd (c)
Skinner Rural Pty Ltd (b), (c)
Croptec Fertilizer and Seeds Pty Ltd (b), (c)
Lindsay Fresh Logistics Pty Ltd (c)
Class
Shares/Units
Equity
Holding %
2020
Equity
Holding %
2019
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
(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) These companies are subsidiaries of Lindsay Rural Pty Ltd.
(c) 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 33.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
62
32. 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 2020 and 2019 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;
Finance costs (except for interest costs relating to property right-of-use lease liabiltiies;
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 (2019: nil). The largest individual customer accounts for
4.96% of external revenues (2019: 4.05%).
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
63
Segment information
2020
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 (including fair value gain)
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
Finance costs (iii)
Corporate/unallocated cost
Transport
$’000
Rural
$’000
Total
$’000
288,672
424
2,180
-
129,991
263
288,672
130,415
2,443
291,276
130,254
421,530
(6,241)
(1,331)
(7,572)
285,035
128,923
413,958
26,029
6,482
25,488
1,176
1,505
98
312
1,704
415,974
32,511
(17,375)
(7,453)
7,683
(2,361)
5,322
26,664
4,594
31,258
1,603
7,453
9,056
(i)
(ii)
(iii)
Revenue from provision of services is recognised over time
Revenue from sale of goods is recognised at a point in time
Segment finance costs relate to property lease liabilities, equipment lease liabilities and borrowings cost remain
unallocated
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
64
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
Finance costs
Corporate/unallocated costs
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
-
5,893
5,893
(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.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
65
33. 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’.
34. Capital Commitments
Capital Commitments
Commitments for capital expenditure (property, plant, equipment and intangibles) contracted for but
not recognised in the financial statements are as follows:
5,833
8,679
2020
$’000
2019
$’000
35. Contingent Liabilities
Guarantees
Guarantees to secure lease obligations
Guarantees to cover workers compensation policies
Total Guarantees
Cross guarantees have been given as described in Note 33.
Fuel tax credit claims
2020
$’000
7,726
1,578
9,304
2019
$’000
7,741
1,733
9,474
In May 2020, the Group was subject to an Australian Taxation Office (ATO) audit of the Group’s historical fuel tax credit (FTC) claims
for the period of 1 July 2006 to 30 June 2019. The initial findings from the ATO determined the Group was not entitled to claim FTC’s
for amounts relating to fuel used from battery powered sleeper cabin air conditioners and challenged other legislative interpretations of
the Group’s FTC claims. The ATO’s initial findings were the Group had overclaimed $4,893,841 in FTC’s.
The Group, in consultation with its expert advisor Deloitte, have disputed the ATO findings. The ATO is still reviewing the additional
information provided by the Group and has not provided a timeframe in which it will respond to the Group. On the basis of the advice
received from Deloitte, the Group believes it has a reasonable position to dispute the ATO findings, so no provision has been
recognised at 30 June 2020 in respect of the ATO claim.
At 30 June 2020 the Group has FTC receivable accounted for of $256k (net of fees) that has not yet been remitted to the ATO until the
above matter has been concluded.
Other
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 the dividends recommended after the end of the financial year as disclosed in the Directors’ Report, 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.
Lindsay Australia Limited | Annual Report 2020 | Notes to the consolidated financial statements
66
36. 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
2020
$’000
2019
$’000
2,106
452,505
323,179
377,221
73,422
1,069
793
75,284
7,040
7,040
-
-
1,018
405,636
314,837
331,252
72,615
1,107
662
74,384
3,041
3,041
-
-
Guarantees entered into by parent entity
Lindsay Australia Limited has guaranteed the Groups external debt in respect of working capital loans, equipment finance leases and
bank loans of subsidiaries amounting to $81,555,886 (2019: $29,069,466) which are 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 $17,192,953 (2019: $66,791,580).
In addition, there are cross guarantees given by Lindsay Australia Limited as described in Note 33. 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.
37. Events after the reporting period
Other than the dividends recommended after the end of the financial year as disclosed in the Directors’ Report ,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 2020 | Notes to the consolidated financial statements
67
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 2020 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 33 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 33.
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
25 August 2020
Lindsay Australia Limited | Annual Report 2020 | Directors’ Declaration
68
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 2020, the consolidated
statement of profit or loss and other 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 2020 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 (including Independence Standards) “the Code” that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We 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.
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.
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69
Key audit matter
Impairment of goodwill
Refer to Note 17: Intangible Assets
How our audit addressed the matter
At 30 June 2020 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, average gross
margin, free cash growth rate and terminal
growth rate.
The key assumptions and a sensitivity analysis
are included in Note 17.
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;
Performing a sensitivity analysis on key
assumptions used in management’s calculations
to assess the level of headroom available; and
Reviewing the adequacy of the Group’s
It is due to the use of management judgement
in determining the key assumptions that this is a
key area of audit focus.
disclosures on goodwill impairment to ensure
compliance with Australian Accounting
Standards.
Adoption of Australian Accounting Standard AASB 16: Leases
Refer to Note 14: Right of Use Assets and Note 15: Lease Liabilities
The 30 June 2020 financial year was the first
year of adoption of Australian Accounting
Standard AASB 16: Leases. The Group has a
significant number of leases over premises and
equipment.
The Group elected to apply the modified
retrospective approach. Effective on the date of
transition, $145.389 million Lease Liabilities and
$161.386 million of Right of Use Assets were
recognised, including amounts previously
recognised in Property, Plant and Equipment
and Borrowings. An after-tax adjustment of
$1.749 million impacting retained earnings was
recognised upon transition.
Given the financial significance to the Group of
its leasing arrangements, the complexity and
judgements involved in the application of AASB
16, such as, the Incremental Borrowing Rate
and the transition requirements of the standard,
this was assessed as a key audit matter.
Our procedures included, amongst others:
Understanding management’s processes and
controls related to the identification, recognition
and measurement of lease liabilities and right of
use assets;
Assessing the integrity of the management’s
AASB 16 lease calculation model, including the
accuracy of formulas;
Agreeing inputs into the AASB 16 lease
calculation model, using audit sampling to agree
the lease term, fixed and variable rent
payments, renewal options and lease incentives
back to underlying executed lease agreements;
Assessing the reasonableness of
management’s judgements in relation to the
accounting treatment of lease renewal options
under AASB 16;
Assessing the reasonableness of the
Incremental Borrowing Rate used to discount
future lease payments to present value;
Reviewing whether the Group’s new accounting
policy satisfied the requirements of AASB 16
including the adoption of practical expedients
applied by management for the transitional
accounting; and
Reviewing the adequacy of the disclosures in
the financial report to ensure compliance with
Australian Accounting Standards.
Lindsay Australia Limited | Annual Report 2020 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
70
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 2020, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
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.
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71
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
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 12 to 20 of the directors’ report for the year ended 30
June 2020. In our opinion, the Remuneration Report of Lindsay Australia Limited, for the year ended 30 June 2020,
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
DAN COLWELL
Partner
Brisbane, Queensland
25 August 2020
Lindsay Australia Limited | Annual Report 2020 | Independent Auditor’s Report to the Members of Lindsay Australia Limited
72
Corporate Governance Statement
Introduction
The Board of Directors of Lindsay Australia Limited is responsible for the corporate governance of the consolidated entity. The board
guides and monitors the business and affairs of Lindsay Australia Limited on behalf of the shareholders by whom they are elected and
to whom they are accountable.
Lindsay Australia Limited’s Corporate Governance Statement is structured with reference to the Corporate Governance Council’s
principles and recommendations. Lindsay Australia Limited’s Corporate Governance practices recognise the Company’s market
capitalisation and the complexity of its operations. For further information on corporate governance policies adopted by Lindsay
Australia Limited, refer to our website: www.lindsayaustralia.com.au
Contents
Principle 1
Principle 2
Principle 3
Principle 4
Principle 5
Principle 6
Principle 7
Principle 8
74
75
78
78
79
79
80
81
Lindsay Australia Limited | Annual Report 2020 | Corporate Governance Statement
73
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 website. 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%
2020
10%
14%
2019
12%
12%
The Company’s Workplace Gender Equality Act public report for 2020 is available on the Company’s website.
Lindsay Australia Limited | Annual Report 2020 | Corporate Governance Statement
74
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 2020 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 2020 | Corporate Governance Statement
75
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 and Compliance
Government and Stakeholders
Culture and 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
23 years (as at 08/01/2020)
Independent Director
R A Anderson Non-Executive.
16/12/2002
17 years (as at 16/12/2019)
Independent Director
M K Lindsay Executive.
Non Independent Director
26/11/1996
A R Kelly
Non-executive.
Non Independent Director
03/05/2019
23 years (as at 26/11/2019) Chief Executive Officer
1 year (as at 03/05/2020)
R L Green
Non-Executive.
Independent Director
26/08/2019
10 months (as at 30/06/2020)
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Recommendation 2.4
The majority of the board of a listed entity should be independent directors.
The Company has complied with this recommendation. Out of the five current directors, four directors are considered to be
independent.
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
A R Kelly
R L Green
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.
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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 of conduct 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.
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Recommendation 4.3
A listed entity that has an Annual General Meeting should ensure that its external auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
Representative of the Company’s auditor attends the Annual General Meeting and are 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 board meetings.
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 Company website together with other Company policies. The website provides
details of the key business divisions, copies of recent annual reports and 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, and a link is provided on the Company’s
website. Contact information for Computershare Limited is also provided in the annual report. Security holders can also contact the
Company electronically via the Company’s website.
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Principle 7
Recognise and manage risk.
Recommendation 7.1
The board of a listed entity should:
a. Have a committee or committees to oversee risk, each of which:
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.
Lindsay Australia Limited | Annual Report 2020 | Corporate Governance Statement
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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.
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; and
v.
As at the end of each reporting period, the number of times the committee met throughout the period and the individual
attendances of the member at those meetings; or
b.
If it does not have a Remuneration Committee, disclose the fact and the processes it employs for setting the level and
composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not
excessive.
The Company has established a Remuneration Committee. The Remuneration Committee has a formal Charter contained in the
Corporate Governance Charter on the Company’s website. The members of the committee, meetings and attendances are disclosed in
the Directors Report to the Annual Report disclosed on the Company’s website. The members of the committee include all the
independent directors of the board. The Chairman of the committee, Mr RL Green, is an independent director.
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 Company; 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 issued 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 2020 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 2020 | Corporate Governance Statement
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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.
Lindsay Australia Limited | Annual Report 2020 | Corporate Governance Statement
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Shareholder Information
Information relating to security holders as at 04 August 2020.
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
114
366
237
819
237
1,773
21,419
1,025,755
1,924,520
31,532,092
264,786,247
299,290,033
MR THOMAS KELSALL LINDSAY + MR THOMAS GLEN LINDSAY
11,364,402
Number of holdings less than a marketable parcel of shares – 172 (96,203 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
LINDSAY SUPER CO PTY LTD
NATIONAL NOMINEES LIMITED
SKYLEVI PTY LTD
ARCHERFIELD AIRPORT CORPORATION PTY LTD
K & D LINDSAY PTY LTD
RM & DM PELL PTY LTD
PROCO PTY LTD
KIRKFARE PTY LTD
SUNSTAR AUSTRALIA PTY LTD
MR FRED SALOME
HEADING EAST PTY LTD
MS GRETA MARJORIE LINDSAY
CAROLINE HOUSE SUPERANNUATION FUND PTY LTD
PROCO PTY LTD
Totals: Top 20 holders
Number of
Shares
% of Issued
Shares
55,526,491
42,260,889
16,783,130
13,341,599
11,540,611
6,668,374
5,245,823
4,100,067
4,000,000
3,222,148
3,104,592
3,030,000
2,897,643
2,727,632
2,700,000
2,549,506
2,328,551
2,150,000
2,100,000
18.55
14.12
5.61
4.46
3.86
3.80
2.23
1.75
1.37
1.34
1.08
1.04
1.01
0.97
0.91
0.90
0.85
0.78
0.72
0.70
197,641,458
66.04
Lindsay Australia Limited | Annual Report 2020 | Shareholder Information
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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
49,509,410
16,783,130
18.55
16.57
5.61
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) (i)
M K Lindsay: Unlisted share options over ordering shares
Not Vested (issued October 2018)
M K Lindsay: Unlisted share options over ordinary shares
Not vested (issued October 2019)
Quantity
400,000
400,000
400,000
Exercise Price
$nil
$nil
$nil
(i)
Since the end of the financial year, 400,000 share options have vested but up to the date of this report have not been
exercised and no shares have been issued. The expiry date to exercise these options is 31 October 2024.
Lindsay Australia Limited | Annual Report 2020 | Shareholder Information
84