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Level 5, 1 Adelaide Terrace
East Perth Western Australia 6004
T: + 61 (0)8 6210 5222
www.lycopodium.com.au
Corporate Directory
Directors’ Report
Corporate Governance Statement
Financial Report
- Consolidated Statement of Profit or Loss
and Other Comprehensive Income
- Consolidated Balance Sheet
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
- Notes to the Consolidated Financial Statement
Directors Declaration
Audit Report
Shareholder Information
Corporate Directory
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Lycopodium Limited Annual Financial Report 2016
Directors Report
Lycopodium Limited
Directors' report
30 June 2016
Directors' report
Your Directors present their report on the group consisting of Lycopodium Limited and the entities it controlled at
the end of, or during, the year ended 30 June 2016.
Directors
The following persons were Directors of Lycopodium Limited during the whole of the financial year and up to the
date of this report:
Michael John Caratti
Peter De Leo
Rodney Lloyd Leonard
Robert Joseph Osmetti
Lawrence William Marshall
Bruno Ruggiero
Steven John Micheil Chadwick
Steven John Micheil Chadwick was appointed as a Non-executive Director on 13 January 2016.
Principal activities
The principal activities of the group during the financial year consisted of engineering consulting in the mining,
metallurgical, rail and manufacturing industries. There were no significant changes in the nature of the group's
principal activities during the financial year.
Dividends
Dividends paid to members during the financial year were as follows:
No payments of final fully franked dividend for the year ended 30 June 2015
(2014: 1.5 cents)
Interim fully franked dividend for the year ended 30 June 2016 of 1.5 cents
(2015: 1.5 cents) per fully paid share paid on 15 April 2016 (2015: 17 April 2015)
2016
$
2015
$
-
586,233
595,987
595,987
595,986
1,182,219
In addition to the above dividends, since the end of the financial year the Directors have recommended the
payment of a final fully franked dividend of $1,589,295 (4.0 cents per fully paid share) to be paid on 14 October
2016 out of retained earnings at 30 June 2016 (2015: $0). This brings the total dividend declared for the year
ended 30 June 2016 to 5.5 cents (2015: 1.5 cents).
Review of operations
Market conditions across the 2015/2016 financial year stabilised but continued to be challenging with uncertainty
and poor forward visibility on future workload prevailing. This was particularly the case in the six months to
December 2016. This period required us to continue the cost reduction and capacity downsizing efforts to match
the market needs. This was a difficult exercise, testing the management and staff across the business and
requiring them to maintain a strong focus on continuing to deliver high quality services to our clients, whilst at the
same time rationalising many aspects of the business so as to reduce costs. Our teams rose to the challenge
meeting the demands of the market and the needs of the Company in this regard. Moving into the second half of
the financial year a slight but identifiable improvement was seen in the mineral resources market and signs of
improvement were also seen across some of the other market sectors we service. Through tight and focused
management across all subsidiaries Lycopodium returned to profit and has been able to establish a trend of
steady improvement in financial performance.
Based on our high level of repeat business there is no doubt that Clients appreciate our efforts to deliver a quality
outcome. What we clearly appreciate, is that due to the funding challenges in this market, cost is a major driver
for clients when selecting their engineer. Key to meeting the market's cost expectations has been our ability to
use a combination of our various operational centres.
1
• 1
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Review of operations (continued)
In both the Resources and Process Industries sectors we have seen the market's preference for EPC delivery
continue to grow. Whilst the majority of our work continues to be delivered on an EP or EPCM basis we have
been able to respond to the market and have bid and won work which will be delivered on an EPC basis. This
has in some areas required us to adopt revised approaches to certain aspects of project delivery but still firmly
encapsulates our traditional strengths developed in the delivery of hundreds of projects over the past twenty four
years.
Across the Infrastructure, Transport and Asset Management sectors we continue to operate primarily as a
consultant with the business model based on the delivery of professional services on either a fixed price or
reimbursable basis. Similarities in the delivery of services across these sectors, as well as the overlap sometimes
seen by these three subsidiary businesses informed our decision to consolidate the subsidiaries, Infrastructure,
Rail and Asset Management into one under the Infrastructure banner. This has provided a strengthened
management team working across a broader footprint to service new geographic markets in terms of the specific
sector involvement.
Our strategy and collaborative approach has seen us emerge from a period of significant uncertainty across most
of our markets with first class teams, a sound financial position and a plan to tackle and achieve good outcomes
in our selected markets. We continue to maintain and grow a world class capability in the provision of
professional services for all phases of the project development cycle, delivering large projects for leading
multi-national companies through to enabling emerging and junior companies to achieve first production.
Full Year Results
As per prior guidance, the Directors are pleased to report a return to profitability for the financial year ended 30
June 2016, with Lycopodium achieving revenues of $124.5 million and a net profit after tax of $3.3 million.
Basic earnings per share were 8.0 cents. The Directors have resolved to pay a final dividend of 4.0 cents fully
franked, which aligns with our dividend policy. The total dividend for the year is 5.5 cents fully franked.
Corporate overview
We have, during the year, worked on the consolidation of the wholly owned subsidiaries Lycopodium
Infrastructure Pty Ltd, Lycopodium Rail Pty Ltd and Lycopodium Asset Management Pty Ltd under the
Infrastructure business banner. The changes formally came into effect on 1 July 2016. The change was made to
leverage off our expertise within several of our subsidiaries, broaden our reach and access new markets to offset
the impacts of the tighter economic conditions. The consolidated entity is headed up by Stuart Sutherland,
formerly Managing Director of Lycopodium Rail Pty Ltd.
There were no other material changes to the operating subsidiaries.
Operational highlights
Lycopodium continued to operate positively across all its market sectors during the period.
Resources
Lycopodium Minerals (including the Perth, Brisbane, Toronto and Manila based organisations) continued building
its track record as the preeminent international engineer in terms of gold projects working on study or
development phase activities for projects in Colombia, Mali, Senegal, Ghana, Burkina Faso, Ethiopia, Namibia,
Philippines, Côte D’Ivoire and French Guiana. Lycopodium Minerals also continued its long relationship with First
Quantum Minerals Limited (FQML) with work continuing on the world class Cobré Panama Project in Panama.
ADP built on its relationship with key clients including De Beers (and its subsidiaries) whilst advancing several
key studies and projects. Orway Mineral Consultants (OMC) built on the Group’s strong reputation for innovation
with their work on the Carapateena / Prominent Hill Projects for OZ Minerals.
2 • Lycopodium Limited Annual Financial Report 2016
2
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Review of operations (continued)
Lycopodium Minerals, ADP and OMC provided services predominantly to the resources sectors with the following
highlights:
Cobré
Lycopodium continued working on the 70 Mtpa Mina De Cobré Panama (Cobré Panama) Project for FQML.
This project involves the largest unit processing equipment in the world and Lycopodium’s approach of
working collaboratively with FQML has been able to support this Client’s project development style to
achieve industry leading capital intensity and project schedule targets.
Bouly
Construction and commissioning of the Bouly Project in Burkina Faso, West Africa was completed and
handed over on time and under budget to Bissa Gold (subsidiary of Nord Gold) whilst achieving an excellent
health and safety record. The Bouly Project involved a greenfield 7.5 Mtpa heap leach facility as well as
brownfield upgrades to the Bissa gold treatment plant. Lycopodium was responsible for the gold processing
facilities and associated services and this brief represented a continuation of the relationship with Nord Gold
something which has been further extended with the award to Lycopodium of the Definitive Feasibility Study
for the Montagné D’Or Project in French Guiana.
Agbaou Crusher Upgrade
Following on from its work with Endeavour on the Nzema Project in Ghana and the Agbaou Project in Côte
D’Ivoire, Lycopodium was engaged to provide the delivery, on an EPCM basis, of the Agbaou Secondary and
Pebble Crushing Circuit. Completion of the project is forecast for 3Q2016, five weeks ahead of schedule,
below budget and with an excellent safety record and represents a continuation of our involvement with this
key client, something which is set to continue beyond this latest effort with the award of the Houndé Project
(EPCM) in Burkina Faso.
Fekola
Under construction for B2Gold in a remote location in south western Mali, some 400 km west of the capital
Bamako, is the Fekola mine. Lycopodium’s involvement in the development of this project is a continuation of
a successful association with two other B2Gold projects - Otjikoto in Namibia and Masbate in the Philippines.
In July 2015, Lycopodium commenced detailed design, with a scope encompassing the complete process
plant, site water and power distribution and building infrastructure design. Detailed design is well advanced
and on schedule to be completed in July 2016. Lycopodium has also provided a small team of engineers who
will integrate with B2Gold’s construction team to deliver general site technical and scheduling support. This
role will continue for the duration of the construction period and expand with additional engineering resources
once plant commissioning commences mid 2017.
Santa Rosa
Lycopodium completed the Definitive Feasibility Study of the San Ramon Gold Project in October 2014. In
March 2015 Lycopodium was awarded the EPCM contract for the development of the fully-permitted Santa
Rosa Project. Early works focused on procurement of the long lead items and detailed engineering
commenced in May 2015. Engineering and procurement was essentially complete in January 2016 with the
main effort being carried out by the Lycopodium Toronto office with the help of a local Colombian engineering
company based in Medellin. The mechanical installation is progressing well with site construction expected to
be essentially complete in Q3 2016. Once completed, Santa Rosa will be one of the largest gold mines in
Colombia and the first gold mine operating under modern environmental permitting legislation.
Houndé
In April 2016 Lycopodium was awarded the EPCM contract for the delivery of Endeavour Mining’s Houndé
Project in Burkina Faso. The project comprises the delivery of a gold processing plant and associated
infrastructure capable of treating 3.0 Mtpa of gold bearing ore. Lycopodium successfully completed the
feasibility study for the project before being awarded the EPCM.
3
• 3
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Review of operations (continued)
ARDC
Having completed the Treatment Plant portions of the Pre-feasibility and Feasibility Studies for De Beers
Marine, Lycopodium ADP (LADP) were awarded the contract to undertake the complete detailed engineering
for the treatment (sampling plant) for the Alternative Resource Development Capability New Evaluation
Vessel (ARDC NEV) Project. The Project, which is being managed by De Beers Marine (PTY) Limited
(DBM), comprises of the delivery and integration of a new deep-water diamond exploration and sampling
vessel called the SS Nujoma. The highly specialised and technologically advanced vessel will become the
sixth ship in the Debmarine Namibia fleet. The vessel is being built in a Norwegian shipyard, Kleven Verft,
and is named after Namibia’s founding president, Dr Sam Nujoma. Once completed, the vessel will be
delivered to Cape Town for integration of Mission Equipment comprising the sampling tool, the launch and
recovery system and the LADP designed treatment plant. This work is a good example of the continued
working relationship of our Cape Town based group with De Beers and its subsidiaries.
Letšeng
High in the Maloti Mountains in Lesotho, at an elevation of 3,100 m above sea level, Gem Diamonds
operates the highest diamond mine in the world, the Letšeng Diamond Mine. This mine is not only
recognised for its high altitude location, but has earned a reputation for producing a great number of
prestigious large investment diamonds with the purest physical diamond characteristics, achieving the
highest price per carat in the world. Lycopodium ADP (LADP) has done a number of diamond process
improvement projects at the Letšeng Diamond Mine for Gem Diamonds and was awarded the EPCM
contract for the design and implementation of the New Final Recovery Plant (NFRP) which was successfully
completed and commissioned during the period.
Colluli
Potash is the common term for fertiliser forms of the element potassium which is one of three key fertiliser
‘macro-nutrients’ essential for healthy soil and plant growth. The Danakil region of Eritrea in East Africa is an
emerging potash province of significance with over 6 billion tonnes of potassium bearing salts having been
identified to date. The Colluli deposit lies within this region. In November 2015, a definitive feasibility study
(DFS) was completed with Lycopodium responsible for not only the coordination of the study, but also the
process design and supporting infrastructure for the project.
Prominent Hill / Carapateena
OMC has been involved with the OZ Minerals’ owned Carrapateena copper-gold project since the inception
of the pre-feasibility study in early 2013, principally working on a complex hydrometallurgical concentrate
treatment process. OZ Minerals plans to use OMC’s technology (OZ Minerals term it the Hydromet Process)
to leach iron from the concentrate, thereby increasing the copper content by up to 50-60% and significantly
reducing the impurity content, particularly uranium. This process will open up additional markets for the
concentrates as well as further de-risking concentrate export. OMC in conjunction with Lycopodium Minerals
has successfully progressed efforts on study completion and the procurement process associated with long
lead key equipment.
Nammuldi / Silvergrass
Pilbara EPCM, the successful joint venture group, owned equally by Lycopodium Minerals Pty Ltd and
AECOM continued to provide services to Rio Tinto on their Nammuldi BWT Project as well as preparatory
work on their associated Silvergrass Project.
4 • Lycopodium Limited Annual Financial Report 2016
4
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Review of operations (continued)
Lycopodium Process Industries provided services predominantly to the chemicals, renewable and
pharmaceutical sectors with the following highlights:
Weak Nitric Acid
Thales issued a Construction EPC tender which Lycopodium won in January 2015. Lycopodium was
responsible for all aspects of the construction and management of the upgrade to the facility as a brown field
construction site in an operating facility. The project was completed on time and on budget in June 2016 and
has now been commissioned and is fully operational.
Lycopodium Infrastructure provided services across the urban infrastructure, transport (road and rail) and asset
management sectors with the following highlights:
Robinson Rd Upgrade
The town of Brookton is located 138 km from the Perth via the Brookton Highway. The Shire is intent on
improving the town centre facilities with an upgraded main street, improved streetscape etc. Based on Urban
Design proposals initially put forward by the Brookton Townscape Committee, Lycopodium developed
concept and detailed designs for the Shire of Brookton incorporating improvements to the public domain and
encouraging enhanced pedestrian movement through traffic calming initiatives.
NorthLink WA
NorthLink WA is being undertaken by Main Roads Western Australia (MRWA) to build a strategic transport
link between Morley and Muchea as part of improving links between Perth and the State’s north west.
NorthLink WA has a long term vision to cater for the traffic volumes associated with a future Perth population
of 3.5 million. NorthLink WA projects comprise three separate sections and Lycopodium has worked on all
three sections. During the period Lycopodium provided MRWA with independent tender evaluation services,
project management services for the procurement phase and independent tender evaluation services.
Lycopodium has been retained to continue providing services on this key infrastructure initiative based on the
value it continues to deliver to the MRWA.
Charles Street Bus Project
On behalf of the Public Transport Authority, Main Roads WA (MRWA) is undertaking a project that will see
the construction of a new bus bridge and associated bus priority measures that will enable buses from
Perth's northern and north-western suburbs to avoid congested city roads. The project includes: a dedicated
busway from the existing James Street bus bridge to the Charles Street / Newcastle Street intersection,
including a new 110 m long bridge over the Graham Farmer Freeway as well as other works. In September
2015, Lycopodium was engaged by MRWA to provide project management services during the procurement
phase of the project. The scope included finalisation of the concept design, traffic modelling, investigation
works, preparation and issue of tender documentation and tender evaluation services. At the conclusion of
the procurement phase, Lycopodium was then engaged to provide design coordination services for the
project.
HSE and Community
As always Lycopodium’s primary focus is on the health and safety of its staff and all personnel working on its
projects. We continue to set and achieve a high standard of health and safety across all our projects and given
the highly international nature of our activities we have worked proactively to ensure the safety and well being of
our personnel wherever they may be.
In 2015/16 there were 2.04 million manhours worked across the Lycopodium managed projects with a LTIFR of
0.49 against an 8.5 construction industry average.
5
• 5
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Review of operations (continued)
On the community side, Lycopodium continued as an active sponsor and supporter of:
•
•
The Clontarf Foundation, a charitable not-for-profit organisation improving the education, discipline,
self-esteem, life skills and employment prospects of young Aboriginal men.
B.A.S.I.C.S based in Accra, Ghana, an organisation committed to improving the quality of life for children
living in some of the poorest areas of that city.
Additionally Lycopodium was an active participant in a number of Industry Engagement Panels and targeted
educational initiatives in association with both the University of Western Australia, Curtin University (Western
Australia) and the South African Minerals Education Trust Fund (METF). The Company also continued to provide
support to a number of charitable initiatives championed by staff including St Vincent DePaul (Vinnies) CEO
Sleepout in aid of homeless people.
Outlook
Our traditional markets remain tight and this will continue to translate into tight forecast margins.
In the Resources Sector, gold as well as several other emerging minerals have seen heightened activity. On the
back of our track record in gold and mineral processing generally we are now active in the development phase of
seven gold projects in Africa and one gold project in South America. In addition, we continue our work on the
massive Cobré Panama Copper Project in Panama for First Quantum Minerals Limited, as well as being active
on projects relating to diamonds, fluorspar, graphite and an assortment of other minerals. We are also working on
a reasonable number of studies for a variety of minerals and metals including those already mentioned, as well
as sulfate of potash (SOP) projects.
In the Infrastructure space we are seeing an improving level of activity in the Asset Management sector with
opportunities presenting in local government and industry across Australia. Similarly we believe we are well
positioned to participate to a greater extent in the high level of activity being seen in Eastern Australia in both
transport (predominantly rail) and urban infrastructure related work.
Geographically we will remain active during the next year in Australia, Canada, South Africa, Philippines, Ghana,
Côte D’Ivoire, Burkina Faso, Columbia, Namibia, Botswana, Mali and Senegal as well as undertaking study
services related to a host of other localities.
On the back of the recent award of several material contracts including the Houndé Project (EPCM), Mako
Project (EPC) and Sissingué Project (EPC) we have reasonably good visibility on the first half of the 2016/2017
financial year. The second half will see activity wind down on the Cobré Panama Project. Subject to favorable
conditions there is the prospect of select projects continuing from study into execution phase which can provide a
forward pipeline of work to somewhat offset this, however we currently have modest visibility into the second half.
At present the Company has adopted the view that there will be an increase to the Company’s financial
performance from this year with forecast revenue of $200M and profit after tax of $6M for 2016/17.
Acknowledgement
As noted previously the 2015/16 financial year was both challenging and testing for the broader organisation. The
Board of Directors recognises that the demands placed on our personnel during this period have been high and
acknowledges that the Company’s ability to continue delivering world class services to our clients and to maintain
and enhance the company’s performance and capability is dependent on the continued commitment and support
of our personnel. On behalf of my fellow Directors I take this opportunity to sincerely thank all personnel for their
highly valued contribution.
We would also like to thank our clients for their continued trust in Lycopodium to deliver services to their projects
and studies. We will as always work hard to maintain these valued relationships.
6 • Lycopodium Limited Annual Financial Report 2016
6
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Review of operations (continued)
A summary of consolidated revenues and results for the year by significant reporting segments is set out below:
Segment revenues
2015
2016
$
$
Segment results
2016
$
2015
$
Corporate services
Minerals
Other
Intersegment eliminations
Goodwill impairment
Unallocated revenue less unallocated expenses
Total
6,061,290
105,360,748
33,180,491
(20,142,311)
-
-
124,460,218
13,159,204
105,917,216
27,182,790
(23,447,888)
-
-
122,811,322
(501,787)
4,794,321
1,468,095
-
(500,000)
(45,000)
5,215,629
(346,920)
(5,844,746)
4,616,598
-
-
(45,000)
(1,620,068)
Income tax (expense)/benefit
Profit/(Loss) for the year
Loss attributable to non-controlling interest
Profit/(Loss) attributable to owners of Lycopodium Ltd
Matters subsequent to the end of the financial year
(1,889,219)
3,326,410
604,655
(1,015,413)
(162,932)
3,163,478
97,336
(918,077)
Since year end the directors have recommended the payment of a final dividend on ordinary shares in respect of
the 2016 financial year. The total amount of dividend is $1,589,295 which represents a fully franked dividend of
4.0 cents per fully paid ordinary share.
With the exception of the above, no other matter or circumstance has arisen since 30 June 2016 that has
significantly affected, or may significantly affect:
(a)
(b)
(c)
the group's operations in future financial years, or
the results of those operations in future financial years, or
the group's state of affairs in future financial years.
Likely developments and expected results of operations
The group will continue to provide engineering consultancy services as detailed above.
Refer to the Review of Operations section within the Directors' Report for information regarding the likely
developments and expected results.
Environmental regulation
The group's operations are not subject to significant environmental regulation under a law of the Commonwealth
or of a State or Territory in respect of its consulting activities.
7
• 7
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Information on Directors
Michael John Caratti BE (Elec) (Hons). Non-executive Chairman. Age 66.
Experience and expertise
Former Managing Director of Lycopodium Minerals Pty Ltd, Mr Caratti has over 40 years experience in the
mineral processing industry and has had a major role in the development of the group's risk management and
quality control programmes.
Special responsibilities
Chairman of the Board.
Chairman of the Corporate Governance Committee.
Interests in shares and options
9,104,637 ordinary shares of Lycopodium Limited.
Former directorships in the last 3 years
None.
Peter De Leo BE (Civ) CPEng FIEAust. Managing Director. Age 50.
Experience and expertise
Mr De Leo has over 25 years experience in the construction and engineering fields. Mr De Leo is the Managing
Director of Lycopodium Limited and director of Pilbara EPCM Pty Ltd.
Special responsibilities
Member of the Corporate Governance Committee.
Member of the Audit Committee.
Interests in shares and options
1,171,711 ordinary shares of Lycopodium Limited.
50,000 performance rights over ordinary shares of Lycopodium Limited.
Former directorships in the last 3 years
None.
Rodney Lloyd Leonard BE (Hons), MSc, MAusIMM. Executive Director. Age 55.
Experience and expertise
Mr Leonard has in excess of 30 years experience in the mineral processing industry and is the Managing
Director of Lycopodium Minerals Pty Ltd and non-executive director of ADP Holdings Pty Ltd.
Special responsibilities
Member of the Corporate Governance Committee.
Member of the Audit Committee.
Interests in shares and options
2,612,332 ordinary shares of Lycopodium Limited.
167,000 performance rights over ordinary shares of Lycopodium Limited.
Former directorships in the last 3 years
None.
8 • Lycopodium Limited Annual Financial Report 2016
8
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Information on Directors (continued)
Robert Osmetti BE (Civ), MIEAust, CPEng. Executive Director. Age 60.
Experience and expertise
Mr Osmetti has over 35 years experience in the project management and construction of minerals, oil refining
and manufacturing projects. Mr Osmetti is the former president of Lycopodium Minerals Canada Limited.
Special responsibilities
Member of the Corporate Governance Committee.
Interests in shares and options
2,058,148 ordinary shares of Lycopodium Limited.
67,000 performance rights over ordinary shares of Lycopodium Limited.
Former directorships in the last 3 years
None.
Lawrence William Marshall B.Bus (Acc) CPA. Non-executive Director. Age 63.
Experience and expertise
Mr Marshall in his role as the former Chief Executive Officer of Lycopodium Limited and with over 35 years
experience has played a major role in the development of the group's information, accounting and management
and risk management systems. Mr Marshall is a non-executive director of Lycopodium Process Industries Pty
Ltd, Lycopodium Infrastructure Pty Ltd and ADP Holdings Pty Ltd.
Special responsibilities
Chairman of the Audit Committee.
Member of the Corporate Governance Committee.
Interests in shares and options
1,942,332 ordinary shares of Lycopodium Limited.
Former directorships in the last 3 years
None.
Bruno Ruggiero BE (Mech), Grad Dip Min Sc, Grad Cert Eng Tech, MIEAust. Non-executive Director. Age
52.
Experience and expertise
Mr Ruggiero has over 25 years experience in the minerals industry. His role is varied in that he fills senior
positions in the areas of Study, Project and Design Management on a project by project basis. He is a
non-executive director of Lycopodium Minerals Pty Ltd.
Special responsibilities
Member of the Corporate Governance Committee.
Interests in shares and options
3,167,332 ordinary shares in Lycopodium Limited.
67,000 performance rights over ordinary shares of Lycopodium Limited.
Former directorships in the last 3 years
None.
9
• 9
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Information on Directors (continued)
Steven Chadwick BASc (Metallurgy). Non-executive Director. Age 62.
Experience and expertise
Mr Chadwick has 40 years experience in the mining industry, incorporating technical, operating and
management roles, as well as a strong metallurgical background. Mr Chadwick is now a metallurgical consultant
specialising in project management with a range of local and international clients. He was a founding Director of
BC Iron and a former Managing Director of Coventry Resources, PacMin Mining and, Northern Gold. Mr
Chadwick is a Non-executive Director of Lycopodium Limited.
Former directorships in the last 3 years
Coventry Resources.
Company secretary
The company secretary is Keith John Bakker B.Bus (Acc), FCPA. Age 63.
Keith has in excess of 30 years experience in senior finance and company secretarial roles within the airline,
human resource consulting and mining services sectors. He is the Chief Financial Officer of Lycopodium Limited.
Meetings of Directors
The numbers of meetings of the Company's board of Directors and of each board committee held during the year
ended 30 June 2016, and the numbers of meetings attended by each Director were:
Full meetings Meetings of
of directors non-executive
Meetings of committees
A
12
12
10
12
11
10
7
B
12
12
12
12
12
12
7
directors
B
A
-
-
-
*
-
*
-
*
-
-
-
-
-
-
Audit
Nomination Remuneration
A
**
2
2
**
2
**
**
B
-
2
2
-
2
-
-
A
-
-
-
-
-
-
-
B
-
-
-
-
-
-
-
A
1
1
1
1
1
1
-
B
***
***
***
***
***
***
-
Michael Caratti
Peter De Leo
Rodney Leonard
Robert Osmetti
Lawrence Marshall
Bruno Ruggiero
Steven Chadwick
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during
the year
* = Not a non-executive Director
** = Not a member of the relevant committee
*** = Remuneration reviewed during a normal monthly meeting of the full board rather than as a separate
committee meeting.
The following Director missed full meetings of the Board because of absence on company business.
Name
Bruno Ruggiero
Number of meetings
2
10 • Lycopodium Limited Annual Financial Report 2016
10
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited
The Directors are pleased to present your Company's 2016 remuneration report which sets out remuneration
information for Lycopodium Limited's non-executive Directors, executive Directors and other key management
personnel.
Directors and key management personnel disclosed in this report
Name
Michael Caratti
Peter De Leo
Rodney Leonard
Robert Osmetti
Lawrence Marshall
Bruno Ruggiero
Steven Chadwick
Keith Bakker
Position
Chairman, Non-executive Director
Managing Director
Executive Director
Executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Company Secretary, Chief Financial Officer
Role of the remuneration committee
The remuneration committee comprises all members of the Board. It is primarily responsible for making
recommendations on:
• Remuneration levels of executive Directors and other key management personnel
•
•
The over-arching executive remuneration framework and operation of any incentive plan, and
Key performance indicators and performance hurdles for the executive team.
The objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the
long-term interests of the company.
Non-executive Director remuneration policy
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities
of, the Directors. Non-executive Directors’ fees and payments are reviewed annually by the Board to ensure that
they are appropriate and in-line with the market.
Non-executive Directors are also paid an hourly rate for ad hoc services, as required.
Non-executive Directors do not receive performance-based pay.
Directors' fees
The current base fees were last reviewed with effect from 1 July 2015. The fees are inclusive of committee fees.
Details on Directors fees are disclosed under service agreements on page 14.
Executive remuneration policy and framework
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
• Competitive and reasonable, enabling the company to attract and retain key talent
•
•
•
Aligned to the company’s strategic and business objectives and the creation of shareholder value
Transparent, and
Acceptable to shareholders.
The executive remuneration framework has three components:
•
•
•
Fixed annual remuneration, including superannuation, and
Service bonus, and
Equity.
11
• 11
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Executive remuneration policy and framework (continued)
Fixed annual remuneration is structured as a total employment cost package which is delivered as a combination
of salary and prescribed non financial benefits partly at the executive’s discretion. Fixed annual remuneration is
reviewed at a minimum annually to ensure the executive’s pay is competitive with the market. An executive’s pay
is also reviewed on promotion.
1,450,000 rights were granted to certain executive directors under the Executive Director Performance Rights
Plan in the financial year ended 30 June 2009. These rights were granted for nil consideration and are
exercisable upon certain performance hurdles and vesting conditions being achieved. This is the only element of
remuneration that is linked to company performance. Refer to page 15 for details.
A service or senior management bonus may be provided to certain senior salaried employees payable annually,
at the discretion of the company.
Voting and comments made at the company's 2015 Annual General Meeting
The remuneration report for the 2015 financial year was unanimously approved by shareholders during the AGM.
The company did not receive any specific feedback at the AGM or throughout the year on its remuneration
practices.
Company performance
The profit after income tax expense and basic earnings per share for the group for the last five years is as
follows:
Revenue ($)
Profit/(Loss) before income tax ($)
Income tax expense/(benefit) ($)
Profit/(Loss) after income tax ($)
Basic EPS (cents)
Basic EPS growth, year on year (%)
Fully franked dividends per share (cents)
Change in share price * ($)
Return on equity (%)
2015
2012
2013
2016
2014
124,460,218 122,811,332 154,765,985 245,940,092 232,286,982
28,534,189 31,771,777
7,682,592
5,993,750
3,973,206
9,416,678
3,709,386
22,540,439 22,355,099
10.0
(82.3%)
6.5
(2.17)
5.61%
(1,620,068)
(604,655)
(1,015,413)
(2.3)
(123.0%)
1.5
(0.84)
(1.61%)
5,215,629
1,889,219
3,326,410
8.0
447.8%
5.5
0.84
5.22%
56.5
(1.4%)
36.0
(2.40)
34.86%
57.3
29.1%
33.0
0.92
40.81%
*calculated as the difference between the closing share price at the start and end of the respective financial years.
12 • Lycopodium Limited Annual Financial Report 2016
12
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Details of remuneration
The following tables show details of the remuneration received by the Directors and the key management
personnel of the group for the current and previous financial year.
2016
Name
Non-executive Directors
Michael Caratti
Lawrence Marshall
Bruno Ruggiero
Steven Chadwick
Sub-total non-executive
directors
Executive Directors
Peter De Leo
Rodney Leonard
Robert Osmetti
Other key management
personnel
Keith Bakker
Total key management
personnel compensation
(group)
Short-term employee benefits
Post-em
ployment
benefits
Share-
based
payments
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Other
$
Super-
annuation
$
Rights
$
Total
$
Perfor-
mance
related
%
54,794
138,274
389,453
27,500
610,021
504,538
492,371
514,067
320,204
2,441,201
-
-
-
-
-
-
-
-
-
-
11,014
11,014
11,014
-
33,042
-
-
-
-
-
11,014
11,014
-
-
-
31,251
5,206
35,000
35,000
-
75,206
35,000
35,000
-
11,014
-
35,000
66,084
31,251
180,206
-
-
-
-
-
-
-
-
-
-
71,014
184,288
435,467
27,500
718,269
550,552
538,385
545,318
366,218
2,718,742
-
-
-
-
-
-
-
-
-
-
No element of the above remuneration is conditional upon meeting key performance indicators.
2015
Name
Non-executive Directors
Michael Caratti
Lawrence Marshall
Bruno Ruggiero
Sub-total non-executive
directors
Executive Directors
Peter De Leo
Rodney Leonard
Robert Osmetti
Other key management
personnel
Keith Bakker
Total key management
personnel compensation
(group)
Short-term employee benefits
Post-em
ployment
benefits
Share-
based
payments
Cash
salary and
fees
$
Cash
bonus*
$
Non-
monetary
benefits
$
Other
$
Super-
annuation
$
Rights
$
Total
$
Perfor-
mance
related
%
54,794
186,432
288,148
529,374
568,840
488,570
471,840
322,008
2,380,632
-
-
-
-
-
-
-
-
-
10,730
10,730
10,730
32,190
10,730
10,730
-
-
-
-
-
-
-
30,853
5,206
35,000
35,000
75,206
30,000
35,000
-
12,535
-
35,000
66,185
30,853
175,206
-
-
-
-
-
-
-
-
-
70,730
232,162
333,878
636,770
609,570
534,300
502,693
369,543
2,652,876
-
-
-
-
-
-
-
-
-
No element of the above remuneration is conditional upon meeting key performance indicators.
13
• 13
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Service agreements
Remuneration and other terms of employment for the Directors and key management personnel are formalised in
employment contracts. Each contract deals with fixed annual remuneration. Other major provisions of the
agreements relating to remuneration are set out below.
All employment contracts with Directors and executives may be terminated by either party with one month’s
notice. None of the directors or executives are provided with termination benefits.
Name
Michael Caratti,
Chairman and Non-executive Director
Peter De Leo,
Managing Director
Rodney Leonard,
Executive Director
Robert Osmetti,
Executive Director
Lawrence Marshall,
Non-executive Director
Bruno Ruggiero,
Non-executive Director
Steven Chadwick,
Non-executive Director
Keith Bakker,
Company Secretary and Chief
Financial Officer
Term of agreement
Fixed Remuneration including
superannuation*
No fixed term
Directors fee of $60,000 p.a.
No fixed term
No fixed term
No fixed term
No fixed term
No fixed term
$525,000 p.a.
$450,000 p.a.
$450,000 p.a.
Fixed hourly rate of $203.13
Directors fee of $60,000 p.a.
Fixed hourly rate of $203.13
Directors fee of $60,000 p.a.
No fixed term
Directors fee of $60,000 p.a.
No fixed term
$352,175 p.a.
* Fixed remuneration payable from 1 July 2015 and reviewed annually by the Remuneration Committee.
14 • Lycopodium Limited Annual Financial Report 2016
14
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Service agreements (continued)
Share-based compensation
Executive Director Performance Rights
Performance rights were granted to certain executive Directors as disclosed in the Notice of Annual General
Meeting dated 16 October 2008. The rights were designed to give incentive to the executive Directors to provide
dedicated and ongoing commitment and effort to the company and aligning the interest of both employees and
shareholders.
Vesting of the above rights are subject to the following performance hurdles:
Performance Rights Plan
Grant date
Tranche
Executive Director
24 December 2008
Tranche 1
Executive Director
24 December 2008
Tranche 2
Executive Director
24 December 2008
Tranche 3
Executive Director
24 December 2008
Tranche 4
Executive Director
24 December 2008
Tranche 5
The above rights were granted for no consideration.
Vesting date and Performance
hurdles
1 July 2011 if EPS for 30 June
2009 exceeds EPS for 30 June
2008 by 10%
1 July 2012 if EPS for 30 June
2010 exceeds EPS for 30 June
2009 by 10%
1 July 2013 if EPS for 30 June
2011 exceeds EPS for 30 June
2010 by 10%
1 July 2014 if EPS for 30 June
2012 exceeds EPS for 30 June
2011 by 10%
1 July 2015 if EPS for 30 June
2013 exceeds EPS for 30 June
2012 by 10%
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting
period are as follows:
Grant date
24 December
2008
24 December
2008
24 December
2008
24 December
2008
24 December
2008
Vesting and
exercise date
Expiry date
Exercise
price
Value per
option at grant
date
Performance
achieved
%
Vested
1 July 2011
24 December 2016
1 July 2012
24 December 2016
1 July 2013
24 December 2016
1 July 2014
24 December 2016
1 July 2015
24 December 2016
$-
$-
$-
$-
$-
$0.74
$0.74
$0.74
$0.74
$0.74
Achieved
100%
Achieved
100%
34%
100%
Achieved
100%
0%
0%
The rights granted carry no dividend or voting rights.
Further information on rights over ordinary shares on issue is set out in note 34 to the financial statements.
15
• 15
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Share-based compensation (continued)
Details of remuneration: Executive Directors Performance Rights
All of the above rights vest after three years, provided the vesting conditions are met. No rights will vest if the
conditions are not satisfied, hence the minimum value of the right yet to vest is nil. The maximum value of the
rights yet to vest has been determined as the amount of the grant date fair value of the rights and is yet to be
expensed.
Name
Peter De Leo
Robert Osmetti
Bruno Ruggiero
Rodney Leonard
Vested
%
Year
granted
Forfeited
%
Shared-based compensation benefits (Options)
Financial years
in which options
may vest
30 June 2011
30 June 2012
30 June 2013
30 June 2014
30 June 2015
30 June 2011
30 June 2012
30 June 2013
30 June 2014
30 June 2015
30 June 2011
30 June 2012
30 June 2013
30 June 2014
30 June 2015
30 June 2011
30 June 2012
30 June 2013
30 June 2014
30 June 2015
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
100
100
100
100
-
100
100
100
100
-
100
100
100
100
-
100
100
100
100
-
-
-
66
-
100
-
-
66
-
100
-
-
66
-
100
-
-
66
-
100
Maximum total
value of grant
yet to vest $
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Senior manager share acquisition plan
Interest free loans were provided to eligible senior managers to acquire shares in Lycopodium Limited under the
Senior Manager Share Acquisition Plan. The plan was designed to provide alignment of the senior managers with
the shareholders of the company by assisting the senior managers to acquire shares in Lycopodium Limited
under the plan. None of the Directors of Lycopodium Limited are eligible to participate in this plan. Further
information on the plan is set out in note 34 to the financial statements.
Equity instrument disclosures relating to key management personnel
The table below shows the number of:
(i) Rights over ordinary share in the company
(ii) Shares in the company
that were held during the financial year by key management personnel of the group, including their close family
members and entities related to them.
There were no shares granted during the reporting period as compensation.
16 • Lycopodium Limited Annual Financial Report 2016
16
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Equity instrument disclosures relating to key management personnel (continued)
(i) Rights holdings
The numbers of rights over ordinary shares in the Company held during the financial year by each Director of
Lycopodium Limited are set out below.
2016
Name
Directors of Lycopodium
Limited
Peter De Leo
Rodney Leonard
Robert Osmetti
Bruno Ruggiero
Balance
at start
of the
year
50,000
167,000
67,000
67,000
Granted
as
compen-
sation Exercised
Other
changes
Balance
at end of
the year
Vested and
exercisable Unvested
-
-
-
-
-
-
-
-
-
-
-
-
50,000
167,000
67,000
67,000
50,000
167,000
67,000
67,000
-
-
-
-
All vested rights are exercisable at the end of the year.
(ii) Share holdings
The numbers of shares in the Company held during the financial year by each Director of Lycopodium Limited
and other key management personnel of the group, including their personally related parties, are set out below.
There were no shares granted during the reporting period as compensation.
2016
Name
Balance at
the start of
the year
Received during
the year on the
exercise of options
Other
changes
during the
year
Balance at
end of the
year
Directors of Lycopodium Limited
Ordinary shares
Michael Caratti
Peter De Leo
Rodney Leonard
Robert Osmetti
Lawrence Marshall
Bruno Ruggiero
Steven Chadwick
Other key management personnel of the group
Ordinary shares
Keith Bakker
9,104,367
1,171,711
2,612,332
2,058,148
1,942,332
3,167,332
-
49,281
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,104,367
1,171,711
2,612,332
2,058,148
1,942,332
3,167,332
-
49,281
17
• 17
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Remuneration report - audited (continued)
Loans to key management personnel
Details of loans made to Directors of Lycopodium Limited and other key management personnel of the group,
including their personally related parties, are set out below.
(i) Aggregates for key management personnel
Balance at
the start of
the year
$
Interest paid
and payable
for the year
$
Interest not
charged
$
Balance at
end of the
year
$
Number in
group at the
end of the
year
2016
2015
44,232
46,434
-
-
-
-
49,134
44,232
3
1
Loans outstanding at the end of the current and prior year include a loan to a key management personnel under
the senior manager share acquisition plan.
All other loans to key management personnel are short-term advances in nature and are insignificant.
No write-downs or allowances for doubtful receivables have been recognised in relation to any loans made to key
management personnel.
End of remuneration report.
18 • Lycopodium Limited Annual Financial Report 2016
18
Shares under option
Unissued ordinary shares of Lycopodium Limited under option at the date of this report are as follows:
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Date options granted
24 December 2008*
* Details of options granted to key management personnel are disclosed on pages 15 to 16.
Expiry date
24 December 2016
Issue price of
shares
$-
Number under
option
351,000
Insurance of officers
During the financial year, Lycopodium Limited took out insurance cover for the Directors, secretaries and senior
officers of the company and its controlled entities.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that
may be brought against the officers in their capacity as officers of entities in the group, and any other payments
arising from liabilities incurred by the officers in connection with such proceedings, other than where such
liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of
their position or of information to gain advantage for themselves or someone else or to cause detriment to the
company.
The directors have not included specific details of the premium paid as such disclosure is prohibited under the
terms of the contract.
Indemnity of auditors
Lycopodium Limited has agreed to indemnify their auditors, Grant Thornton Audit Pty Ltd, to the extent permitted
by law, against any claim by a third party arising from Lycopodium Limited's breach of their agreement. The
indemnity stipulates that Lycopodium Limited will meet the full amount of any such liabilities including a
reasonable amount of legal costs.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for
the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
19
• 19
Directors Report (continued)
Lycopodium Limited
Directors' report
30 June 2016
(continued)
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor's expertise and experience with the Company and/or the group are important.
Details of the amounts paid or payable to the auditor (Grant Thornton Audit Pty Ltd) for audit and non-audit
services provided during the year are set out below.
The board of Directors has considered the position and, in accordance with advice received from the Audit
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of
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 the
impartiality and objectivity of the auditor
none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the
parent entity, its related practices and non-related audit firms:
Taxation services
Firm related to Grant Thornton Audit Pty Ltd:
Tax compliance services (including income tax returns)
Tax consolidation and valuation services
Network firm of Grant Thornton:
Consolidated
2016
$
2015
$
146,400
-
30,000
311,168
Tax compliance services (including income tax returns)
25,995
25,429
Non-Grant Thornton Audit Pty Ltd audit firms:
Tax compliance services (including income tax returns)
International tax advice
Total remuneration for taxation services
Other services
Grant Thornton Audit Pty Ltd Australian firm:
Other services
Non-Grant Thornton Audit Pty Ltd audit firms:
Other services
Total remuneration for other services
100,102
-
272,497
55,926
45,747
468,270
9,500
19,205
-
9,500
14,200
33,405
Total remuneration for non-audit services
281,997
501,675
20 • Lycopodium Limited Annual Financial Report 2016
20
Lycopodium Limited
Directors' report
Lycopodium Limited
30 June 2016
Directors' report
(continued)
30 June 2016
(continued)
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
Auditor's independence declaration
set out on page 22.
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
set out on page 22.
This report is made in accordance with a resolution of Directors.
This report is made in accordance with a resolution of Directors.
Peter De Leo
Managing Director
Peter De Leo
Managing Director
Perth
15 September 2016
Perth
15 September 2016
21
21
• 21
Level 1
10 Kings Park Road
West Perth WA 6005
Level 1
Correspondence to:
10 Kings Park Road
PO Box 570
West Perth WA 6005
West Perth WA 6872
Correspondence to:
T +61 8 9480 2000
PO Box 570
F +61 8 9322 7787
West Perth WA 6872
E info.wa@au.gt.com
W www.grantthornton.com.au
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Lycopodium Limited
Auditor’s Independence Declaration
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
To the Directors of Lycopodium Limited
auditor for the audit of Lycopodium Limited for the year ended 30 June 2016, I declare that,
to the best of my knowledge and belief, there have been:
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Lycopodium Limited for the year ended 30 June 2016, I declare that,
no contraventions of the auditor independence requirements of the Corporations Act
a
to the best of my knowledge and belief, there have been:
2001 in relation to the audit; and
a
b
b
no contraventions of the auditor independence requirements of the Corporations Act
no contraventions of any applicable code of professional conduct in relation to the
2001 in relation to the audit; and
audit.
no contraventions of any applicable code of professional conduct in relation to the
audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M J Hillgrove
Partner - Audit & Assurance
M J Hillgrove
Perth, 15 September 2016
Partner - Audit & Assurance
Perth, 15 September 2016
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Grant Thornton Audit Pty Ltd ACN 130 913 594
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
scheme applies.
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
22 • Lycopodium Limited Annual Financial Report 2016
Corporate Governance Statement
Lycopodium Limited
Corporate governance statement
30 June 2016
Corporate governance statement
The Board of Directors of Lycopodium Limited is responsible for the overall corporate governance of the
company. The Board has implemented the Recommendations of the ASX Corporate Governance Council to the
extent considered appropriate for the size and nature of the Company’s current operations.
Lycopodium Limited’s practices are consistent with the ASX Corporate Governance Council’s Principles and
Recommendations (3rd Edition) (‘Principles’) with any exceptions noted.
1.0 COUNCIL PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1 Council Recommendation 1.1:
A listed entity should:
(a) disclose the respective roles and responsibilities of the Board and Management
(b) disclose those matters expressly reserved to the Board and those delegated to Management.
The Company complies with this recommendation.
1.2 Council Recommendation 1.2:
A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward to security holders a
candidate for election as a Director
(b) provide security holders with all material information in its possession relevant to a decision
whether or not to elect or re-elect a Director.
The Company complies with this recommendation.
1.3 Council 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 complies with this recommendation.
1.4 Council 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 complies with this recommendation.
1.5 Council 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 access annually both
the objectives and the entity's progress in achieving them;
(b) disclose that policy or a summary of it; and
(c) disclose as 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)
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
23
• 23
Corporate Governance Statement (continued)
Lycopodium Limited
Corporate governance statement
30 June 2016
(continued)
1.0 COUNCIL PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
(continued)
1.5 Council Recommendation 1.5: (continued)
(ii)
if the entity is a 'relevant employer' under the Workplace Gender Equality Act, the entity's
most recent published 'Gender Equality Indicators', as defined in under the Act.
The Company does not comply with recommendation 1.5(a) or 1.5(c)(i). As a global participant, the Company
recruits staff from every continent and has an established policy of equal opportunity employment.
1.6 Council 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 complies with this recommendation.
1.7 Council 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 complies with this recommendation.
2.0 COUNCIL PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
2.1 Council Recommendation 2.1:
The Board of a listed entity should:
(a) have a nomination committee which:
(i)
has at least 3 members, a majority of which are independent directors; and
(ii)
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 meet
throughout the period and the individual attendances of the members at these meetings;
or
(b)
if it does not have a nomination committee, disclose the fact and the process it employs to
address Board succession issues and to ensure that the Board has the appropriate balance of
skills, knowledge, experience, independence and diversity to enable it to discharge its duties and
responsibilities effectively.
The Company does not comply with this recommendation. The role of the nomination committee is carried out by
the full Board.
24 • Lycopodium Limited Annual Financial Report 2016
24
Lycopodium Limited
Corporate governance statement
30 June 2016
(continued)
2.0 COUNCIL PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE (continued)
2.2 Council Recommendation 2.2:
A listed entity should have and disclose a Board skills matrix setting out the mix of skills and diversity that the
Board currently has or is looking to achieve in its membership.
The Company does not comply with this recommendation. The Board considers that each of its current directors
possess skills and experience appropriate to managing and developing the Company. Any additional information
or specific advice can be more appropriately and economically obtained by engaging independent external expert
consultants.
2.3 Council Recommendation 2.3:
A listed entity should disclose:
(a)
the names of directors considered by the Board to be independent directors;
(b)
if a director has an interest, position, association or relationship that might cause doubt about the
independence of the director 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.
The Company complies with this recommendation.
2.4 Council Recommendation 2.4:
A majority of the Board of a listed entity should be independent.
The Company does not comply with this recommendation as only one director is independent. The Board
considers that at this time the shareholders are better served by directors who have a vested interest in the
Company. The Board intends to reconsider the formation of a separate Nomination Committee as the Company's
operations evolve.
2.5 Council 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 CEO of the entity.
The Company does not fully comply with this recommendation as the Chairperson is not an independent director.
The Board considers that at this stage in the development of the Company, an independent Chairperson would
not add sufficient expertise to the Board to justify the associated cost and any additional information or specific
advice required can be more appropriately and economically obtained from independent external expert
consultants.
2.6 Council 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 the skills and knowledge needed to perform the
role as directors effectively.
The Company complies with this recommendation.
25
• 25
Corporate Governance Statement (continued)
Lycopodium Limited
Corporate governance statement
30 June 2016
(continued)
3.0 COUNCIL PRINCIPLE 3: ACT ETHICALLY AND RESPONSIBLY
3.1 Council Recommendation 3.1:
A listed entity should:
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
The Company complies with this recommendation.
4.0 COUNCIL PRINCIPLE 4: SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1 Council Recommendation 4.1:
The board of a listed entity should:
(a) have an audit committee which:
(i)
has at least three members, of all whom are non-executive directors and a majority are
independent directors; and
(ii)
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 experience of the 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 these 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 the rotation of the audit engagement
partner.
The Company does not fully comply with this recommendation in that the Audit Committee consists of three
directors only one of which is a non-executive and none are independent.
4.2 Council Recommendation 4.2:
The Board of a listed entity should, before it approves the entity's financial statements for a financial period,
receive from its CEO and CFO 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 internal control which is operating effectively.
The Company complies with this recommendation.
4.3 Council Recommendation 4.3:
A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
The Company complies with this recommendation.
26 • Lycopodium Limited Annual Financial Report 2016
26
Lycopodium Limited
Corporate governance statement
30 June 2016
(continued)
5.0 COUNCIL PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
5.1 Council Recommendation 5.1:
A listed entity should:
(a) have a written policy for complying with its continuous disclosure obligations under the listing
Rules; and
(b) disclose that policy or a summary of it.
The Company complies with this recommendation.
6.0 COUNCIL PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1 Council Recommendation 6.1:
A listed entity should provide information about itself and its governance to investors via its website.
The Company complies with this recommendation.
6.2 Council Recommendation 6.2:
A listed entity should design and implement an investor relations program to facilitate effective two-way
communication with investors.
The Company complies with this recommendation.
6.3 Council 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 does not currently comply with this recommendation, although the matter will be assessed in the
light of what emerges in the market and will be responded to as appropriate.
6.4 Council 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 complies with this recommendation.
7.0 COUNCIL PRINCIPLE 7: RECOGNISE AND MANAGE RISK
7.1 Council Recommendation 7.1:
The Board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(i)
has at least 3 members, a majority of whom are independent directors; and
(ii)
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 members at those meetings; or
(b)
if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the
processes it employs for overseeing the entity's risk management framework.
The Company complies with (b) of this recommendation.
27
• 27
Corporate Governance Statement (continued)
Lycopodium Limited
Corporate governance statement
30 June 2016
(continued)
7.0 COUNCIL PRINCIPLE 7: RECOGNISE AND MANAGE RISK (continued)
7.1 Council Recommendation 7.1: (continued)
The Board considers risk management as one of its primary responsibilities. The Board has adopted a Risk
Management Policy, which provides that:
•
•
All members of the Board are responsible for risk management and oversight of internal controls. The
day to day responsibilities for risk management and internal controls rest with the Managing Director.
The Managing Director reports on risk management and internal controls, using an exception reporting
basis, to the full Board as part of a monthly written report to directors.
The Company has an internal control framework covering all areas of identified risk within the Company’s
operations and has documented these policies in order to centralise the controls and intends that the Risk
Management Policy will be enhanced as its operations evolve. The areas of risk covered by the internal control
framework are tenders / proposals, client contract negotiation and management, financial control and reporting,
commercial / corporate control and reporting, operational control and reporting, personnel management,
procurement and purchasing and supplier contract negotiation and management.
7.2 Council Recommendation 7.2:
The Board or a committee of the Board should:
(a) Review the entity's risk management framework at least annually to satisfy itself that it continues
to be sound; and
(b) Disclose, in relation to each reporting, whether such a review has taken place.
The Company complies with this recommendation.
7.3 Council Recommendation 7.3:
A listed entity should disclose:
(a)
if it has an internal audit function, how the function is structured and what role it performs; or
(b)
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 complies with (b) of this recommendation.
7.4 Council Recommendation 7.4:
A listed entity should disclose whether it has any material exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or intends to manage these risks.
The Company is of the view that it is not materially exposed to the risks outlined in this recommendation.
8.0 COUNCIL PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
8.1 Council Recommendation 8.1:
The Board of a listed entity should:
(a) have a remuneration committee which:
(i)
has at least three members, a majority of whom are independent directors; and
(ii)
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 members at those meetings; or
28 • Lycopodium Limited Annual Financial Report 2016
28
Lycopodium Limited
Corporate governance statement
30 June 2016
(continued)
8.0 COUNCIL PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY (continued)
8.1 Council Recommendation 8.1: (continued)
(b)
if it does not have a remuneration committee, disclose that 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 does not fully comply with this recommendation as a separate Remuneration Committee has not
been formed.
The role of the Remuneration Committee is carried out by the full Board. The Company has a remuneration
committee charter which is published on its website. Statistics regarding participation at remuneration committee
meetings are published in each Annual Report.
8.2 Council 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.
The Company complies with this recommendation.
8.3 Council 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 that policy or a summary of it.
This recommendation does not apply as the Company has not entered into any scheme which enables
participants to hedge or otherwise limit the economic risk of participation without prior disclosure and the approval
of security holders at a general meeting.
29
• 29
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2016
Lycopodium Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2016
Revenue from operations
Employee benefits expense
Depreciation and amortisation expense
Project expenses
Equipment and materials
Contractors
Occupancy expense
Impairment of goodwill
Other expenses
Loss on disposal of asset
Finance costs
Share of net profit of associate and joint venture accounted for using the
equity method
Profit/(Loss) before income tax
Income tax (expense)/benefit
Profit/(Loss) for the year
Other comprehensive (expense)/income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Total comprehensive income/(expense) for the year
Profit/(Loss) for the year is attributable to:
Owners of Lycopodium Limited
Non-controlling interests
Total comprehensive income/(expense) for the year is attributable to:
Owners of Lycopodium Limited
Non-controlling interests
Consolidated
Notes
2016
$
2015
$
5
6
16
6
7
124,460,218
122,811,322
(57,853,816)
(1,329,095)
(4,370,898)
(12,080,173)
(28,417,150)
(8,082,301)
(500,000)
(7,768,302)
(1,254)
(33,324)
(65,367,325)
(1,753,905)
(4,630,594)
(16,875,139)
(22,665,053)
(8,060,711)
-
(7,537,899)
(323,251)
(57,836)
1,191,724
5,215,629
2,840,323
(1,620,068)
(1,889,219)
3,326,410
604,655
(1,015,413)
22(a)
(1,593,336)
1,733,074
605,183
(410,230)
3,163,478
162,932
3,326,410
(918,077)
(97,336)
(1,015,413)
1,570,142
162,932
1,733,074
(312,894)
(97,336)
(410,230)
Cents
Cents
Earnings per share for profit attributable to the ordinary equity
holders of the Company:
Basic earnings per share
Diluted earnings per share
33
33
8.0
8.0
(2.3)
(2.3)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
30 • Lycopodium Limited Annual Financial Report 2016
30
Consolidated Balance Sheet
For the year ended 30 June 2016
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax receivables
Other current assets
Total current assets
Non-current assets
Investments accounted for using the equity method
Available-for-sale financial assets
Property, plant and equipment
Intangible assets
Other receivables
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Parent entity interest
Non-controlling interests
Total equity
Lycopodium Limited
Consolidated balance sheet
As at 30 June 2016
Consolidated
Notes
2016
$
2015
$
8
9
10
12
13
14
16
11
15
17
18
20
41,547,757
26,525,309
703,686
1,008,816
1,793,028
71,578,596
32,440,938
24,573,180
255,211
4,561,762
1,708,221
63,539,312
1,768,751
102,953
2,343,796
7,907,733
521,898
2,782,541
15,427,672
2,789,527
35,750
2,776,265
8,858,308
703,291
5,331,787
20,494,928
87,006,268
84,034,240
21,436,955
89,879
508,544
22,035,378
19,854,442
288,513
89,725
20,232,680
639,873
639,873
568,634
568,634
22,675,251
20,801,314
64,331,017
63,232,926
21
22(a)
22(b)
20,823,772
(840,944)
41,285,494
61,268,322
20,823,772
754,422
38,718,003
60,296,197
3,062,695
2,936,729
64,331,017
63,232,926
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
31
• 31
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
Lycopodium Limited
Consolidated statement of changes in equity
For the year ended 30 June 2016
Attributable to members of Lycopodium Limited
Contributed
equity
$
Retained
earnings
$
Foreign
currency
translation
reserve
$
Available
for sale
investment
revaluation
reserve
$
Performance
rights
reserve
$
Non-con-
trolling
interests
$
Total
equity
$
Consolidated
Notes
Balance at 1 July 2014
18,999,317
42,390,395
(27,898)
(81,900)
1,021,535
577,904
62,879,353
(Loss)/Profit for the year
Other comprehensive income / (expense)
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax
Non-controlling interests on acquisition of subsidiary
Foreign currency translation with non-controlling interest
Dividends provided for or paid
Performance rights - value of rights
Performance rights - transfer on exercise
Newly consolidated operations
Balance at 30 June 2015
Balance at 1 July 2015
(Loss)/Profit for the year
Other comprehensive income / (expense)
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Foreign currency translation with non-controlling interest
Dividends provided for or paid
-
-
-
(918,077)
-
(918,077)
-
605,183
605,183
824,455
1,000,000
-
-
-
-
-
1,824,455
-
(1,572,096)
-
(1,182,219)
-
-
-
(2,754,315)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(97,336)
-
(97,336)
(1,015,413)
605,183
(410,230)
-
-
-
-
61,957
(824,455)
-
(762,498)
-
(577,904)
25,715
-
-
-
3,008,350
2,456,161
824,455
(1,150,000)
25,715
(1,182,219)
61,957
(824,455)
3,008,350
763,803
20,823,772
38,718,003
577,285
(81,900)
259,037
2,936,729
63,232,926
20,823,772
38,718,003
577,285
(81,900)
259,037
2,936,729
63,232,926
-
-
-
-
-
-
3,163,478
-
3,163,478
-
(1,593,336)
(1,593,336)
-
(2,030)
(2,030)
-
(595,987)
(595,987)
-
-
-
-
-
-
-
-
-
-
-
-
162,932
-
162,932
3,326,410
(1,595,366)
1,731,044
(36,966)
-
(36,966)
(36,966)
(595,987)
(632,953)
21
23
23
24
22
22
23
24
Balance at 30 June 2016
20,823,772
41,285,494
(1,016,051)
(83,930)
259,037
3,062,695
64,331,017
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
32
32 • Lycopodium Limited Annual Financial Report 2016
Consolidated Statement of Cash Flows
For the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services
tax)
Interest received
Income taxes received/(paid)
Net cash inflow from operating activities
Cash flows from investing activities
Dividends received from joint venture
Payments for purchase of business, net of cash received
Payments for acquisition of non-controlling interests
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for available-for-sale financial assets
Payments for intangible assets
Payments for investment in associate
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Repayments of hire purchase and lease liabilities
Loans advanced to associate
Dividends paid to company's shareholders
Proceeds from repayment of loans under the senior manager share
acquisition plan
Net cash outflow from financing activities
Lycopodium Limited
Consolidated statement of cash flows
For the year ended 30 June 2016
Consolidated
Notes
2016
$
2015
$
32
29
14
16
12(b)
123,507,881
127,101,357
(119,223,061)
4,284,820
(125,121,138)
1,980,219
1,149,187
4,632,663
10,066,670
939,293
(1,445,116)
1,474,396
2,600,000
-
-
(548,607)
21,038
(70,104)
(9,962)
(387,500)
1,604,865
4,400,000
(4,141,003)
(1,150,000)
(221,335)
55,212
(32,750)
(38,236)
-
(1,128,112)
804,015
(832,572)
(193,990)
(387,500)
(595,987)
895,027
(817,128)
(751,727)
-
(1,182,219)
181,393
(1,024,641)
169,362
(1,686,685)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of financial year
10,646,894
32,440,938
(1,540,075)
41,547,757
(1,340,401)
33,302,348
478,991
32,440,938
8
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
33
• 33
Notes to the Consolidated Financial Statement
30 June 2016
Contents of the notes to the consolidated financial statements
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Summary of significant accounting policies
Financial risk management
Critical accounting estimates and judgements
Segment information
Revenue
Expenses
Income tax expense
Current assets - Cash and cash equivalents
Current assets - Trade and other receivables
Current assets - Other current assets
Non-current assets - Other receivables
Non-current assets - Investments accounted for using the equity method
Non-current assets - Available-for-sale financial assets
Non-current assets - Property, plant and equipment
Non-current assets - Deferred tax assets
Non-current assets - Intangible assets
Current liabilities - Trade and other payables
Current liabilities - Borrowings
Non-current liabilities - Deferred tax liabilities
Non-current liabilities - Provisions
Contributed equity
Reserves and retained earnings
Non-controlling interests
Dividends
Remuneration of auditors
Contingencies
Commitments
Related party transactions
Business combination
Subsidiaries
Events occurring after the reporting period
Reconciliation of profit after income tax to net cash inflow from operating activities
Earnings per share
Share-based payments
Parent entity financial information
Page
35
51
56
56
59
60
61
63
63
65
65
65
67
68
69
71
74
75
76
76
77
78
80
80
81
82
82
84
86
88
88
89
89
91
93
34
34 • Lycopodium Limited Annual Financial Report 2016
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of this consolidated financial report are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated. The
financial report comprises the financial statements for the group consisting of Lycopodium Limited and its
subsidiaries.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001.
Lycopodium Limited is a for-profit entity for the purpose of preparing the financial report.
(i) Compliance with IFRS
The consolidated financial report of the Lycopodium Limited group complies with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the group
The group has applied the following standards and amendments for the first time for the financial year beginning
1 July 2015:
•
•
AASB 2015-3 - Amendments to Australian Accounting Standards arising from the withdrawal of AASB
1031 Materiality.
AASB 2015-4 Amendments to Australian Accounting Standards - Financial Reporting Requirements for
Australian Groups with a Foreign Parent.
The adoption of the above standards did not have a material impact on the group.
(iii) Early adoption of standards
The group has not elected to apply any pronouncements before their operative date in the annual reporting
period beginning 1 July 2015.
(iv) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the
revaluation of available-for-sale financial assets and financial assets at fair value through profit and loss.
(v) Critical accounting estimates
The preparation of financial report 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 report, are disclosed in note 3.
(b) Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an
entity when the group 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 the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the group. They are deconsolidated from the date
that control ceases.
The acquisition method of accounting is used to account for business combinations by the group (refer to note
1(h)).
35
• 35
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(b) Principles of consolidation (continued)
(i) Subsidiaries (continued)
Intercompany transactions, balances and unrealised gains on transactions between companies in the group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated balance
sheet, respectively.
(ii) Employee Share Trust
The group has formed a trust to administer the group's employee share scheme. This trust is consolidated, as the
substance of the relationship is that the trust is controlled by the group.
(iii) Joint arrangements
Under AASB 11 Joint Arrangement investments in joint arrangements are classified as either joint operations or
joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than
legal structure of the joint arrangement. Lycopodium Limited has a joint venture arrangement.
Joint ventures
Interest in joint ventures are accounted for using the equity method (see (v) below), after initially being
recognised at cost in the consolidated balance sheet.
(iv) Associates
Associates are all entities over which the group has significant influence but not control or joint control. This is
generally the case where the group holds between 20% and 50% of the voting rights. Investments in associates
are accounted for using the equity method of accounting (see (v) below), after initially being recognised at cost.
(v) Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to
recognise the group's share of the post-acquisition profits or losses of the investee in profit or loss, and the
group's share of movements in other comprehensive income of the investee in other comprehensive income.
Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying
amount of the investment.
When the group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, the group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the group and its associates and joint ventures are eliminated to the
extent of the group's interest in these entities. Unrealised losses are also eliminated unless the transactions
provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees
have been changed where necessary to ensure consistency with the policies adopted by the group.
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in a separate reserve within equity attributed to owners of Lycopodium Limited.
36 • Lycopodium Limited Annual Financial Report 2016
36
..................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(b) Principles of consolidation (continued)
(vi) Changes in ownership interests
When the group ceases to have control, joint control or significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value
becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the group had directly disposed of the related assets or
liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to
profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are
reclassified to profit or loss where appropriate.
(c) 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.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial report of each of the group's entities are measured using the currency of the
primary economic environment in which the entity operates ('the functional currency'). The consolidated financial
report are presented in Australian dollars, which is Lycopodium Limited's functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit and loss.
Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value
gain or loss. Translation differences on non-monetary assets and liabilities such as equities held at fair value
through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences
on non-monetary assets such as equities classified as available-for-sale financial assets are recognised in other
comprehensive income.
(iii) Consolidated entities
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of
that balance sheet
income and expenses for each statement of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions),
and
all resulting exchange differences are recognised in other comprehensive income.
37
• 37
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(d) Foreign currency translation (continued)
(iii) Consolidated entities (continued)
On consolidation, exchange differences arising from the translation of any net investment in foreign operations,
and of borrowings and other financial instruments designated as hedges of such investments, are recognised in
other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net
investment are repaid, associated exchange differences are recognised in the profit and loss, as part of the gain
or loss on sale where applicable.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the group's activities as
described below. The group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
Revenue is recognised for the major business activities as follows:
(i) Rendering of services
Revenue from consulting services is recognised in the accounting period in which the services are rendered. For
fixed-price contracts, revenue is recognised under the percentage of completion method, based on the actual
service provided as a proportion of the total services to be provided.
If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward
completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues
or costs and are reflected in profit or loss in the period in which the circumstances that give rise to the revision
become known by management.
(ii) Rental revenue
Rental revenue is accounted for on a straight-line basis over the lease term as this matches the profile of the
manner in which rental is earned. Contingent rental income is recognised as income in the periods in which it is
earned.
(iii) Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired, the group
reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest
income on impaired loans is recognised using the original effective interest rate.
(iv) Dividends
Dividends are recognised as revenue when the right to receive payment is established.
(f)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
38 • Lycopodium Limited Annual Financial Report 2016
38
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(f)
Income tax (continued)
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company's subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial report. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax
is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
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 foreign operations where the company 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.
Lycopodium Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation effective 1 July 2013. As a consequence, these entities are taxed as a single entity and the deferred
tax assets and liabilities of these entities are set off in the consolidated financial report.
Current and deferred tax is recognised in profit or 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.
(g) Leases
Leases of property, plant and equipment where the group, as lessee, has substantially all the risks and rewards
of ownership are classified as finance leases. Finance leases are capitalised at the lease's inception at the fair
value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding
rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease
payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under finance leases is depreciated over the asset's useful
life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the
group will obtain ownership at the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as
lessee are classified as operating leases (note 27). Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the
lease.
39
• 39
Notes to the Consolidated Financial Statement
30 June 2015 (continued)......................................................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(h) 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, the liabilities incurred and the equity interests issued by the
group. The consideration transferred also includes the fair value of any asset or liability resulting from a
contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. 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. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in
the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net
identifiable assets.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree 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 and the measurement of all amounts has been
reviewed, 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.
(i)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value
less costs to sell and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(j) Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value, and bank overdrafts.
(k) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. Trade receivables are generally due for settlement within
30 days.
40 • Lycopodium Limited Annual Financial Report 2016
40
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(k) Trade receivables (continued)
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade
receivables) is used when there is objective evidence that the group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the
debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30
days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment
allowance is the difference between the asset's carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in the profit and loss within ‘administration and management
costs’. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible
in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against 'administration and management costs' in the profit and loss.
(l)
Inventories
Contract work in progress
Contract work in progress is stated at the aggregate of contract costs incurred to date plus recognised profits less
recognised losses and progress billings. If there are contracts where progress billings exceed the aggregate
costs incurred plus profits less losses, the net amount is presented under other liabilities.
Contract costs include all costs directly related to specific contracts, costs that are specifically chargeable to the
customer under the terms of the contract and an allocation of overhead expenses incurred in connection with the
group's contract activities in general.
(m) Investments and other financial assets
Classification
The group classifies its financial assets in the following categories: financial assets at fair value through profit or
loss, loans and receivables and available-for-sale financial assets. The classification depends on the purpose for
which the investments were acquired. Management determines the classification of its investments at initial
recognition and re-evaluates this designation at each reporting date.
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit and loss are financial assets held-for-trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are
classified as held-for-trading unless they are designated as hedges. Assets in this category are classified as
current assets.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for those with maturities greater than 12
months after the reporting period which are classified as non-current assets. Loans and receivables are included
in trade and other receivables in the balance sheet.
(iii) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that
are either designated in this category or not classified in any of the other categories. They are included in
non-current assets unless the investment matures or management intends to dispose of the investment within 12
months of the end of the reporting period. Investments are designated as available-for-sale if they do not have
fixed maturities and fixed or determinable payments and management intends to hold them for the medium to
long-term.
41
• 41
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(m) Investments and other financial assets (continued)
Financial assets - reclassification
The group may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if
the financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans
and receivables are permitted to be reclassified out of the held-for-trading category only in rare circumstances
arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the group may
choose to reclassify financial assets that would meet the definition of loans and receivables out of the
held-for-trading or available-for-sale categories if the group has the intention and ability to hold these financial
assets for the foreseeable future or until maturity at the date of reclassification.
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or
amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date
are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables are
determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates
prospectively.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date - the date on which the group
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the group has transferred substantially all
the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in
other comprehensive income are reclassified to profit or loss as gains and losses from investment securities.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or
loss.
Loans and receivables are subsequently carried at amortised cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried
at fair value. Gains or losses arising from changes in the fair value of the 'financial assets at fair value through
profit or loss' category are presented in profit or loss within other income or other expenses in the period in which
they arise. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss
as part of revenue from continuing operations when the group's right to receive payments is established. Interest
income from these financial assets is included in the net gains/(losses).
Changes in the fair value of monetary securities denominated in a foreign currency and classified as
available-for-sale are analysed between translation differences resulting from changes in amortised cost of the
security and other changes in the carrying amount of the security. The translation differences related to changes
in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in
other comprehensive income. Changes in the fair value of other monetary and non-monetary securities classified
as available-for-sale are recognised in other comprehensive income.
Details on how the fair value of financial instruments is determined are disclosed in note 2.
42 • Lycopodium Limited Annual Financial Report 2016
42
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(m) Investments and other financial assets (continued)
Impairment
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset
or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events
that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact
on the estimated future cash flows of the financial asset or group of financial assets that can be reliably
estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in
the fair value of the security below its cost is considered an indicator that the assets are impaired.
(i) Assets carried at amortised cost
For loans and receivables, the amount of the loss is measured as the difference between the asset's carrying
amount and the present value of estimated future cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is
reduced and the amount of the loss is recognised in profit or loss. If a loan has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective interest rate determined under the
contract. As a practical expedient, the group may measure impairment on the basis of an instrument's fair value
using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's
credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss.
Impairment testing of trade receivables is described in note 1(k).
(ii) Assets classified as available-for-sale
If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss - measured
as the difference between the acquisition cost and the current fair value, less any impairment loss on that
financial asset previously recognised in profit or loss - is removed from equity and recognised in profit or loss.
Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or
loss in a subsequent period.
If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the
increase can be objectively related to an event occurring after the impairment loss was recognised in profit or
loss, the impairment loss is reversed through profit or loss.
(n) 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. The carrying amount of any component accounted for as a separate asset
is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Depreciation on plant and equipment is calculated using the straight line or diminishing value method to allocate
their cost, net of their residual values, over their estimated useful lives, as follows:
-
-
-
-
-
Plant and equipment
Vehicles
Furniture, fittings and equipment
Leasehold improvements
Leased plant and equipment
3 - 10 years
5 - 7 years
3 - 8 years
3 - 6 years
3 - 5 years
43
• 43
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(n) Property, plant and equipment (continued)
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(i)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in the profit and loss.
(o) Intangible assets
(i) Goodwill
Goodwill is measured as described in note 1(h). Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised but it 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 the goodwill arose, identified according to operating segments (note 4).
(ii) Customer contracts
Customer contracts acquired as part of a business combination are recognised separately from goodwill. The
customer contracts are carried at their fair value at the date of acquisition less accumulated amortisation and
impairment losses. Amortisation is calculated based on the timing of projected cash flows of the contracts over
their estimated useful lives, which currently vary from 1 to 5 years.
(iii) Software
Intangible assets also comprise capitalised computer software. Computer software has a finite useful life and is
carried at cost less accumulated amortisation. Amortisation is calculated using the straight line method to allocate
the cost of the computer software over their estimated useful lives, being 3 years.
(p) Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months from the reporting
date. They are recognised initially at their fair value and subsequently measured at amortised cost using the
effective interest method.
(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 removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
(r) Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
44 • Lycopodium Limited Annual Financial Report 2016
44
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(s) Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the group has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will
be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for
future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of obligations may be small.
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.
(t) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits expected to be settled wholly within 12 months
after the end of the period in which the employees render the related services 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. All other short-term employee benefit obligations are presented as payables.
(ii) Other long-term employee benefits obligations
The liability for long service leave and annual leave which is not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service is therefore recognised in the
provision for employee benefits and 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 high quality corporate bonds with terms and currency that match, as closely as possible, the estimated
future cash outflows. Remeasurements as a result of experience adjustments and changes in actuarial
assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the consolidated balance sheet if the entity does not have
an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when
the actual settlement is expected to occur.
(iii) Retirement benefit obligations
Contributions to defined contribution funds are recognised as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is
available.
45
• 45
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(t) Employee benefits (continued)
(iv) Share-based payments
Share-based compensation benefits are provided to certain executive directors and other designated employees
via the Performance Rights Plans. Information relating to this scheme is set out in note 34.
The fair value of rights granted under the Performance Rights Plans are recognised as an employee benefit
expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over
the period during which the employees become unconditionally entitled to the options.
The fair value at grant date is independently determined using a Binomial Tree option pricing model that takes
into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution,
the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the term of the option.
(v) Senior manager share acquisition plan
The senior manager share acquisition plan was approved at the company's Annual General Meeting on 24
November 2009. The aim of the plan was to allow the Board to assist managers, who in the Board's opinion have
demonstrated the qualities and dedication to become the next generation of senior managers, to take up a
significant shareholding so as to ensure their commitment and the future of the company.
Eligible Senior Managers include both full-time senior managers and executive directors of the group or such
other persons as the Board determines.
A broad outline of the plan is summarised below:
•
•
•
•
The company will loan funds to participating Senior Managers to purchase Lycopodium Limited shares
via the Lycopodium Share Plan Trust.
The loan will be a limited recourse loan provided the Senior Manager stays with the group for greater
than 3 years.
The loan will be interest free if the Senior Manager remains employed by the group for greater than 3
years.
In the event that the Senior Manager leaves within 3 years, interest will be charged equal to the market
rate of interest that would have accrued on the loan from the date of advance of the funds to the
repayment date.
• During the term of the loan, dividends will be offset against the outstanding loan balance.
•
The shares are allocated to the Senior Managers at a 1 cent discount to the volume weighted average of
the prices at which the shares of Lycopodium Limited were traded on the ASX during the one week
period up to and including the date of allocation.
The group has the following as the result of this transaction:
Share based payment
The difference between the value of the shares purchased and the value of the shares allocated to the senior
managers represents the cost to the company for providing the loan to the employees. This amount is expensed
in the profit and loss.
Embedded derivative
The senior manager loan receivable is a loan with an embedded derivative with the senior manager having an
option to put back the share to the group in full settlement of the loan after the 3 year period. As the embedded
derivative is closely related to the senior manager loan, the financial instrument is measured at fair value through
profit or loss.
46 • Lycopodium Limited Annual Financial Report 2016
46
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(u) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
(v) 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 reporting period but not distributed at the end of the reporting
period.
(w) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit 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 financial year, adjusted for
bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
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.
•
(x) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred
is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
consolidated balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as operating
cash flows.
(y) New accounting standards not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2016 reporting periods. The group's assessment of the impact of these new standards and interpretations is set
out below.
(i) AASB 9 Financial Instruments
AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.
These requirements improve and simplify the approach for classification and measurement of financial assets
compared with the requirements of AASB 139.
The effective date is for annual reporting periods beginning on or after 1 January 2018.
47
• 47
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(y) New accounting standards not yet effective (continued)
(continued)
(i)
The entity is yet to undertake a detailed assessment of the impact of AASB 9. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and
balances recognised in the financial statements when it is first adopted for the year ending 30 June 2019.
(ii) AASB 14 Regulatory Deferral Accounts
AASB 14 permits first-time adopters of Australian Accounting Standards who conduct rate-regulated activities to
continue to account for amounts related to rate regulation in accordance with their previous GAAP. Accordingly,
an entity that applies AASB 14 may continue to apply its previous GAAP accounting policies for the recognition,
measurement, impairment and derecognition of its regulatory deferral account balances. This exemption is not
available to entities who already apply Australian Accounting Standards.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When AASB 14 becomes effective for the first time for the year ending 30 June 2017, it will not have any impact
on the entity.
(iii) AASB 15 Revenue from Contracts with Customers
AASB 15 replaces AASB 118: Revenue, AASB 111 Construction Contracts and some revenue-related
Interpretations. In summary, AASB 15:
•
•
•
•
establishes a new revenue recognition model;
changes the basis for deciding whether revenue is to be recognised over time at a point in time;
provides a new and more detailed guidance on specific topics (eg multiple element arrangements,
variable pricing, rights of return and warranties); and
expands and improves disclosures about revenue.
When this Standard is first adopted for the year ending 30 June 2018, there will be no material impact on the
transactions and balances recognised in the financial statements.
(iv) AASB 2014-3 Amendments to Australian Accounting Standards - Accounting for Acquisitions of Interests in
Joint Operations
This amendment impacts on the use of AASB 11 when acquiring an interest in a joint operation.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on
the transactions and balances recognised in the financial statements.
(v) AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of
Depreciation and Amortisation
The amendments to AASB 116 prohibit the use of a revenue-based depreciation method for property, plant and
equipment. Additionally, the amendments provide guidance in the application of the diminishing balance method
for property, plant and equipment.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on
the transactions and balances recognised in the financial statements.
48 • Lycopodium Limited Annual Financial Report 2016
48
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(y) New accounting standards not yet effective (continued)
(vi) AASB 2014-9 Amendments to Australian Accounting Standards - Equity Method in Separate Financial
Statements
The amendments introduce the equity method of accounting as one of the options to account for an entity’s
investments in subsidiaries, joint ventures and associates in the entity’s separate financial statements.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on
the financial statements.
(vii) AASB 2014-10 Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
The amendments address a current inconsistency between AASB 10 Consolidated Financial Statements and
AASB 128 Investments in Associates and Joint Ventures (2011). The amendments clarify that, on a sale or
contribution of assets to a joint venture or associate or on a loss of control when joint control or significant
influence is retained in a transaction involving an associate or a joint venture, any gain or loss recognised will
depend on whether the assets or subsidiary constitute a business, as defined in AASB 3 Business Combinations.
Full gain or loss is recognised when the assets or subsidiary constitute a business, whereas gain or loss
attributable to other investors’ interests is recognised when the assets or subsidiary do not constitute a business.
The effective date is for annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no material impact on
the financial statements.
(viii)AASB 16 Leases
AASB 16 replaces AASB 117 Leases and some lease-related Interpretations. In summary, AASB 16:
•
•
•
•
requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low
value asset leases;
provides new guidance on the application of the definition of lease and on sale and lease back
accounting;
largely retains the existing lessor accounting requirements in AASB 117; and
requires new and different disclosures about leases.
The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and
balances recognised in the financial statements when it is first adopted for the year ending 30 June 2020.
(z) Parent entity financial information
The financial information for the parent entity, Lycopodium Limited, disclosed in note 35 has been prepared on
the same basis as the consolidated financial report, except as set out below.
(i)
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial report
of Lycopodium Limited. Dividends received from associates are recognised in the parent entity's profit or loss,
rather than being deducted from the carrying amount of these investments.
49
• 49
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
1 Summary of significant accounting policies (continued)
(z) Parent entity financial information (continued)
(ii) Share based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in
the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase
to investment in subsidiary undertakings, with a corresponding credit to equity.
50 • Lycopodium Limited Annual Financial Report 2016
50
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
2 Financial risk management
The group manages its exposure to key financial risks, including interest rate and currency risk in accordance
with the group's financial risk management policy. The objective of the policy is to support the delivery of the
group's financial targets whilst protecting future financial security.
The main risks arising from the group's financial instruments are interest rate risk, foreign currency risk, credit risk
and liquidity risk. The group uses different methods to measure and manage different types of risks to which it is
exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and
assessments of market forecasts for interest rates and foreign exchange. Ageing analyses and monitoring of
specific credit allowances are undertaken to manage credit risk, and liquidity risk is monitored through the
development of future rolling cash flow forecasts.
The primary responsibility for identification and control of financial risks rests with the Board. The Board reviews
and agrees policies for managing each of the risks identified above.
(i) Fair value estimation
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for
disclosure purposes.
AASB 13 "Fair Value Measurement" requires disclosure of fair value measurements by level of the following fair
value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based on
quoted market prices at the reporting date (level 1). The quoted market price used for financial assets held by the
group is the current bid price.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair value due to their short term nature. The fair value of financial liabilities for disclosure purposes is
estimated by discounting the future contractual cashflows at the current market interest rate that is available to
the group for similar financial instruments.
51
• 51
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
2 Financial risk management (continued)
(ii) Summary of financial instruments
The group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Deposits held with banks
Available-for-sale financial assets
Other receivables
Financial liabilities
Trade and other payables
Borrowings
(a) Market risk
Consolidated
2016
$
2015
$
41,547,757
26,525,309
595,463
102,953
521,898
69,293,380
32,440,938
24,573,180
631,107
35,750
703,291
58,384,266
12,265,983
89,879
12,355,862
10,427,474
288,513
10,715,987
(i) Foreign exchange risk
The group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the US dollar (USD), Ghanaian Cedi (GHS) and Philippine Peso (PHP).
Foreign exchange risk arises when future commercial transactions and recognised financial assets and financial
liabilities are denominated in a currency that is not the entity’s functional currency. The Board considers that
while the group's foreign exchange risk to be minimal at this stage some form of risk management policy will be
necessary to mitigate this exposure in the future.
The group's exposure to foreign currency risk at the reporting period, expressed in Australian dollar, was as
follows:
USD
$
30 June 2016
GHS
$
PHP
$
USD
$
30 June 2015
GHS
$
PHP
$
Cash and cash equivalents
Trade and other receivables
Other current assets
Trade and other payables
Net exposure
3,507,010
134
-
(16,732)
3,490,412
8,984
9,831
11,084
(10,603)
19,296
106,943
36,583
389,479
(183,142)
349,863
3,077,791
-
-
(39,001)
3,038,790
77,597
7,290
940
(15,241)
70,586
22,415
21,482
407,327
(209,013)
242,211
Group sensitivity
Based on the financial instruments held at 30 June 2016, had the Australian dollar weakened/strengthened by
10% against the US dollar with all other variables held constant, the group's post-tax profit and equity for the year
would have been $349,041 higher/$349,041 lower (2015: $303,879 higher/$303,879 lower), mainly as a result of
foreign exchange gains/losses on translation of US dollar denominated financial instruments as detailed in the
above table. Profit is more sensitive to movements in the Australian dollar/US dollar exchange rates in 2016 than
2015 because of the higher amount of US dollar denominated cash and cash equivalents.
52 • Lycopodium Limited Annual Financial Report 2016
52
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
2 Financial risk management (continued)
(a) Market risk (continued)
(i) Foreign exchange risk (continued)
Based on the financial instruments held at 30 June 2016, had the Australian dollar weakened/strengthened by
10% against the Ghanaian Cedi with all other variables held constant, the group's post-tax profit and equity for
the year would have been $1,930 higher/$1,930 lower (2015: $7,059 higher/$7,059 lower), mainly as a result of
foreign exchange gains/losses on translation of Ghanaian Cedi denominated financial instruments as detailed in
the above table. Profit is less sensitive to movements in the Australian dollar/Ghanaian Cedi exchange rates in
2016 than 2015 because of the lower amount of Ghanaian Cedi denominated cash and cash equivalents.
Based on the financial instruments held at 30 June 2016, had the Australian dollar weakened/strengthened by
10% against the Philippine Peso with all other variables held constant, the group's post-tax profit and equity for
the year would have been $34,986 higher/$34,986 lower (2015: $24,221 higher/$24,221 lower), mainly as a
result of foreign exchange gains/losses on translation of Philippine Peso denominated financial instruments as
detailed in the above table. Profit is more sensitive to movements in the Australian dollar/Philippine Peso
exchange rates in 2016 than 2015 mainly because of the higher amount of Philippine Peso denominated cash
and cash equivalents.
(ii) Price risk
The group is exposed to equity securities price risk with the exposure, however, being minimal. Equity securities
price risk arises from investments in equity securities. The equity investments are publicly traded on the
Australian Securities Exchange ("ASX"). The price risk for the listed securities is immaterial in terms of a possible
impact on profit and loss or total equity and as such a sensitivity analysis has not been completed. The group
does not have a risk management policy surrounding price risk in place as the Board considers the risk minimal.
The group is not directly exposed to commodity price risk.
(iii) Interest rate risk
The group is exposed to interest rate risk arising mainly from borrowings and cash balances held. The risk is
considered minimal as the group's borrowings are minimal. The group does not enter into any specific swaps or
hedges to cover any interest rate volatility and does not have a risk management policy surrounding cash flow
and interest rate risk as the Board considers these risks to be minimal.
Group sensitivity
At 30 June 2016, if interest rates had changed by -/+50 basis points from the year end rates with all other
variables held constant, post-tax profit and equity for the year would have been $141,327 lower/higher (2015:
-/+50 basis points: $113,811 lower/higher), as a result of lower/higher interest income from cash and cash
equivalents.
(b) Credit risk
Credit risk arises from the financial assets of the group, which comprise cash and cash equivalents, trade and
other receivables and other current assets. The group's exposure to credit risk arises from potential default of the
counterparty, with a maximum exposure equal to the carrying amount of these instruments.
Other receivables comprises of the loan under the senior management share acquisition plan. The group is not
exposed to credit risk as the loan is secured under the terms of the loan (note 1(t)).
53
• 53
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
2 Financial risk management (continued)
(b) Credit risk (continued)
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Deposits held with banks (note 10)
Cash and cash equivalents
Consolidated
2016
$
2015
$
41,547,757
26,525,309
597,974
68,671,040
32,440,938
24,573,180
637,693
57,651,811
The credit risk on cash and cash equivalents is limited because the group's primary bank is rated AA- by an
international credit-rating agency.
Trade and other receivables
The group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the demographics of the group’s customer base, including the default risk
of the industry and country in which customers operate, as these factors may have an influence on credit risk.
The group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it
the group's policy to securitise its trade and other receivables. All receivables at balance date that are neither
past due nor impaired comply with the group's policy on credit quality.
It is the group's policy that all customers who wish to trade on credit terms are subject to credit verification
procedures including an assessment of their independent credit rating, financial position, past experience and
industry reputation.
In addition, receivable balances are monitored on an ongoing basis with the result that the group's exposure to
bad debts is minimised.
There are no significant concentrations of credit risk within the group. The group minimises concentrations of
credit risk in relation to trade receivables by undertaking transactions with a number of customers that operate
predominantly in the mining and extractive industry sector including the major players in the industry and the
junior/emerging players. There are multiple contracts with our significant customers, across a number of their
subsidiaries, divisions within those subsidiaries and locations.
Deposits held with banks
The credit risk on deposits held with banks are limited as they comprise deposits held with banks with high credit
ratings assigned by international credit-rating agencies.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities. The group manages liquidity risk
by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities.
54 • Lycopodium Limited Annual Financial Report 2016
54
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
2 Financial risk management (continued)
(c) Liquidity risk (continued)
Financing arrangements
The group had access to the following undrawn borrowing facilities at the reporting date:
Leasing facility
Standby credit facility
Insurance bonds
Maturities of financial liabilities
Consolidated
2016
$
2015
$
881,870
-
15,000,000
15,881,870
3,873,058
11,060,654
-
14,933,712
The following tables detail the group's remaining contractual maturity for its non-derivative financial liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the group can be required to pay. The table includes both interest and principal cash flows. The group
had no derivative financial instruments.
1 year or
less
Between 1
and 2 years
Between 2
and 5
years
Over 5
years
Total
contrac-
tual
cash
flows
Carrying
amount
liabilities
$
$
$
$
$
$
Consolidated - At 30 June
2016
Non-derivatives
Trade payables
Insurance premium funding
Total non-derivatives
12,265,985
89,879
12,355,864
-
-
-
-
-
-
-
-
-
12,265,985
89,879
12,355,864
12,265,985
89,879
12,355,864
1 year or
less
Between 1
and 2 years
Between
2 and 5
years
Over 5
years
Total
contrac-
tual
cash
flows
Carrying
amount
liabilities
$
$
$
$
$
$
Consolidated - At 30 June
2015
Non-derivatives
Trade payables
Insurance premium funding
Finance lease liabilities
Total non-derivatives
17,501,858
99,679
193,989
17,795,526
-
-
-
-
-
-
-
-
-
-
-
-
17,501,858
99,679
193,989
17,795,526
17,501,858
99,679
193,989
17,795,526
55
• 55
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
3 Critical accounting estimates and 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.
(a) Critical accounting estimates and assumptions
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.
(i)
Impairment testing of goodwill
The group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy
stated in note 1(i). The recoverable amounts of cash-generating units have been determined based on
value-in-use calculations. These calculations require the use of assumptions. Refer to note 16 for details of these
assumptions and the potential impact of changes to the assumptions. In 2016, the group recognised an
impairment loss on goodwill (see Note 16(a) ).
(ii) Fixed-price contracts
The group uses the percentage of completion method in accounting for its revenue from fixed-sum contracts. The
stage of completion is measured by reference to the contract costs incurred to date compared to the estimated
total costs for the contract.
Significant assumptions are required to estimate the total contract costs and the recoverable variations work that
will affect the stage of completion and the contract revenue respectively. In making these estimates, the group
has relied on past experience and best available information.
4 Segment information
(a) Description of segments
Management has determined the operating segments based on the reports reviewed by the Board of Directors
that are used to make strategic decisions.
The Board considers the business from both a product and geographic perspective and has identified nine
operating segments of which two (2015: two) are reportable in accordance with the requirements of AASB 8.
The Corporate Services segment consists of managerial, legal and technical services provided to the group in
addition to strategic investment holdings.
The Minerals segment consists of engineering and related services provided to the extractive mining industry.
The clients, including junior exploration companies and major multinational producers, are developing projects for
a wide range of commodities. These projects range in scope from large greenfield projects involving process
plant and equipment, civil, and building works, control systems, services and infrastructure to small skid-mounted
pilot plants.
All other operating segments are not reportable operating segments, as they fall under the quantitative thresholds
of AASB 8. The results of these operations are included in the 'Other' column.
The remaining operating segments that are not reportable consists of:
Process Industries:
engineering and related services provided to the manufacturing and renewable
energy facilities throughout Australia and South East Asia.
56 • Lycopodium Limited Annual Financial Report 2016
56
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
4 Segment information (continued)
(a) Description of segments (continued)
Infrastructure:
engineering and related services including architectural designs, power supply and
distribution, water supply and distribution, accommodation, buildings, roads and other
general civil and infrastructure components.
Asset Management:
reliability and engineering maintenance services to clients in the petrochemical, oil
and gas, mining minerals, marine and manufacturing sectors.
Rail:
Metallurgical:
project development phase studies, engineering and design, procurement and
construction phase services for rail infrastructure projects across Australia.
metallurgical consulting providing a range of services to the mineral processing
community, primarily in the field of comminution, hydrometallurgy and mineral
processing design.
Project Services Asia:
provision of drafting services for offshore Lycopodium entities.
Project Services Africa: project management construction management and commissioning services provided
to the extractive mining industry in Africa.
(b) Segment information provided to the Board of Directors
The segment information provided to the Board of Directors for the reportable segments for the year ended 30
June 2016 and 30 June 2015 are as follows:
2016
Total segment revenue
Inter-segment revenue
Revenue from external
customers
Profit / (loss) before tax
Interest in the profit of equity
accounted joint ventures
Depreciation and amortisation
Income tax expense/(benefit)
Total segment assets
Total assets includes:
Investment in joint ventures
Additions to non-current assets
(other than financial assets and
deferred tax)
Total segment liabilities
Corporate
Services
Minerals
Other
$
6,061,290
(5,365,437)
695,853
$
105,360,748
(6,886,352)
98,474,396
$
33,180,491
(7,890,522)
25,289,969
Total
$
144,602,529
(20,142,311)
124,460,218
(501,787)
-
4,794,321
1,191,724
1,468,095
-
5,760,629
1,191,724
(153)
200,936
16,922,240
(987,684)
(1,289,504)
49,304,279
(341,258)
(800,651)
16,645,893
(1,329,095)
(1,889,219)
82,872,412
752,852
-
1,015,900
405,021
-
153,548
1,768,752
558,569
5,032,115
14,200,393
6,637,715
25,870,223
57
• 57
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
4 Segment information (continued)
(b) Segment information provided to the Board of Directors (continued)
2015
Total segment revenue
Inter-segment revenue
Revenue from external
customers
Profit / (loss) before tax
Interest in the profit of equity
accounted joint ventures
Depreciation and amortisation
Income tax expense/(benefit)
Total segment assets
Total assets includes:
Investment in joint ventures
Additions to non-current assets
(other than financial assets and
deferred tax)
Total segment liabilities
(c) Other segment information
Corporate
Services
Minerals
Other
$
13,159,204
(12,251,193)
908,011
$
105,917,216
(4,048,200)
101,869,016
$
27,182,790
(7,148,495)
20,034,295
(346,920)
-
(3,004,423)
2,840,323
1,776,275
-
(96,331)
614,615
12,792,739
(1,171,040)
(340,978)
48,187,752
(486,535)
331,018
14,533,319
Total
$
146,259,210
(23,447,888)
122,811,322
(1,575,068)
2,840,323
(1,753,906)
604,655
75,513,810
-
-
2,789,527
193,649
-
65,922
2,789,527
259,571
2,655,777
12,595,290
4,890,135
20,141,202
(i) Segment revenue
Sales between segments are carried out at arm's length and are eliminated on consolidation. The revenue from
external parties reported to the board of Directors is measured in a manner consistent with that in the
consolidated statement of profit or loss and other comprehensive income.
The entity is domiciled in Australia. Revenue from external customers in Australia was $20,800,010 (2015:
$57,126,431), and the total of revenue from external customers from other countries is $103,660,208 (2015:
$65,684,89). Segment revenues are allocated based on the country in which the customer is located.
Revenues of approximately $36,973,772 (2015: $42,454,871) are derived from the top 3 customers. These
revenues are attributable to the Minerals segment.
(ii) Segment profit before tax
The board of Directors assesses the performance of the operating segments based on a measure of adjusted
profit before tax.
A reconciliation of segment profit before tax to the profit before tax in the consolidated statement of profit or loss
and other comprehensive income is provided as follows:
Consolidated
2016
$
2015
$
Segment profit before tax
Goodwill impairment
Amortisation of customer relationships
Profit before income tax as per statement of comprehensive income
5,760,629
(500,000)
(45,000)
5,215,629
(1,575,068)
-
(45,000)
(1,620,068)
58 • Lycopodium Limited Annual Financial Report 2016
58
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
4 Segment information (continued)
(c) Other segment information (continued)
(iii) Segment assets
The amounts provided to the board of Directors with respect to total assets are measured in a manner consistent
with that of the financial report. These assets are allocated based on the operations of the segment and the
physical location of the asset.
Reportable segments' assets are reconciled to total assets as follows:
Segment assets
Intersegment eliminations
Intangibles arising on consolidation
Deferred tax arising on consolidation
Total assets as per the consolidated balance sheet
Consolidated
2016
$
2015
$
82,872,412
(3,350,662)
7,484,518
-
87,006,268
75,513,810
504,412
8,029,518
(13,500)
84,034,240
The total of non-current assets other than financial instruments and deferred tax assets in Australia is $8,964,665
(2015: $11,281,689), and other countries is $3,680,467 (2015: $3,881,452).
(iv) Segment liabilities
The amounts provided to the board of Directors with respect to total liabilities are measured in a manner
consistent with that of the financial report. These liabilities are allocated based on the operations of the segment.
Reportable segments' liabilities are reconciled to total liabilities as follows:
Segment liabilities
Intersegment eliminations
Total liabilities as per the consolidated balance sheet
5 Revenue
From operations
Sales revenue
Contract revenue
Other revenue
Rents and sub-lease rentals
Bank interest
Other revenue
Total revenue from operations
Consolidated
2016
$
2015
$
25,870,223
(3,194,972)
22,675,251
20,141,202
660,112
20,801,314
Consolidated
2016
$
2015
$
122,992,053
121,138,662
84,070
1,209,245
174,850
1,468,165
102,770
927,383
642,507
1,672,660
124,460,218
122,811,322
59
• 59
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
6 Expenses
Profit before income tax includes the following specific
expenses:
Depreciation
Fixtures and fittings
Leasehold improvements
Leased plant and equipment
Motor vehicles
Total depreciation
Amortisation
Computer software
Customer contracts
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable
Net foreign exchange (gains)/losses
Net loss on disposal of property, plant and equipment
Consolidated
2016
$
2015
$
655,534
121,698
77,907
17,056
872,195
739,147
174,740
295,296
25,587
1,234,770
411,900
45,000
456,900
1,329,095
474,135
45,000
519,135
1,753,905
33,324
57,836
30,893
(1,180,146)
1,254
323,251
Rental expense relating to operating leases
Minimum lease payments
8,082,300
7,541,941
Defined contribution superannuation expense
2,481,745
3,236,874
60 • Lycopodium Limited Annual Financial Report 2016
60
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
7 Income tax expense
(a)
Income tax expense
Current tax
Deferred tax
Adjustments for current tax of prior periods
Deferred income tax expense/(benefit) included in income tax expense
comprises:
Decrease/(increase) in deferred tax assets (note 15)
(Decrease)/increase in deferred tax liabilities (note 19)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(Loss) before income tax expense
Tax at the Australian tax rate of 30% (2015: 30%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Goodwill impairment
Share-based payment
Sundry items
Adjustments for current tax of prior periods - under provision of prior year income
tax
Difference in overseas tax rates
Previously unrecognised tax losses now recouped to reduce current tax expense
Deferred taxes not recognised
Share of net profit of joint ventures accounted for using the equity method
Total income tax expense/(benefit)
Consolidated
2016
$
2015
$
1,062,835
2,494,234
(1,667,850)
1,889,219
175,493
(197,069)
(583,079)
(604,655)
2,835,279
(341,045)
2,494,234
(600,912)
403,844
(197,068)
Consolidated
2016
$
2015
$
5,215,629
(1,620,068)
1,564,689
(486,020)
150,000
-
306,065
2,020,754
-
18,587
129,215
(338,218)
275,180
(116,586)
(154,238)
(78,374)
(57,517)
1,889,219
(583,079)
73,102
(91,489)
1,187,126
(852,097)
(604,655)
(7,104,848)
2,224,723
61
• 61
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
7 Income tax expense (continued)
(c) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not
recognised in net profit or loss or other comprehensive income but directly
debited or credited to equity:
Current tax - credited directly to equity
(d) Tax losses
Consolidated
2016
$
2015
$
870
-
Consolidated
2016
$
2015
$
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 30% (2015: 30%)
3,131,881
939,564
3,886,249
1,165,875
(e) Tax consolidation
The company and its 100% owned Australian entities formed a tax consolidated group on 1 July 2013. Members
of the consolidated group have entered into a tax sharing agreement in order to allocate income tax expense to
the wholly owned Australian entities on a pro-rata basis. The agreement provides for the allocation of income tax
liabilities between the entities should the head entity default on its tax payment obligations. At balance date, the
possibility of default is remote. The head entity of the tax consolidated group is Lycopodium Limited.
Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement effective from 1 July 2013.
The tax funding agreement provides for the allocation of current taxes to members of the tax consolidated group.
Deferred taxes are allocated to members of the tax consolidated group in accordance with the group allocation
approach, which is consistent with the principles of AASB 112 Income Taxes.
The allocation of taxes under the tax funding agreement is recognised as an increase/(decrease) in the member
entities’ intercompany accounts with the tax consolidated group head company, Lycopodium Limited. In this
regard, the company has assumed the benefit of tax losses from the member entities as of the balance date. The
nature of the tax funding agreement is such that no tax consolidated contributions by or distributions to
participant's equity are required.
62 • Lycopodium Limited Annual Financial Report 2016
62
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
Consolidated
2016
$
2015
$
35,532,920
6,014,837
41,547,757
26,602,119
5,838,819
32,440,938
8 Current assets - Cash and cash equivalents
Cash at bank and in hand
Deposits at call
(a) Risk exposure
The group's exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the end
of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.
9 Current assets - Trade and other receivables
Trade receivables
Allowance for impairment of receivables (a)
GST and other receivables
Cash advanced to employees
Loans to associate
Consolidated
2016
$
2015
$
25,476,511
(859,424)
24,617,087
24,198,282
(1,458,208)
22,740,074
1,483,984
36,738
387,500
1,908,222
1,829,250
3,856
-
1,833,106
26,525,309
24,573,180
(a)
Impaired trade receivables
As at 30 June 2016, current trade receivables of the group with the value of $859,425 (2015: $1,458,208) were
impaired, with the amounts being fully provided for.
The ageing of these receivables are as follows:
31 to 60 days
61 to 90 days
91 to 120 days
121 to 210 days
211 days or over
Consolidated
2016
$
2015
$
11,799
-
364
3,147
844,115
859,425
12,672
827
258,109
513,507
673,093
1,458,208
63
• 63
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
9 Current assets - Trade and other receivables (continued)
(a)
Impaired trade receivables (continued)
Movements in the provision for impairment of receivables are as follows:
At 1 July
Provision for impairment recognised during the year
Receivables written off during the year as uncollectable
Unused amounts reversed
Exchange difference
At 30 June
Consolidated
2016
$
2015
$
1,458,208
172,494
(759,339)
(12,672)
734
859,425
110,023
1,450,248
(74,043)
(27,127)
(893)
1,458,208
The other classes within trade and other receivables do not contain impaired assets.
(b) Past due but not impaired
As of 30 June 2016, trade receivables of $3,296,960 (2015: $5,235,219) were past due but not impaired. These
relate to a number of independent customers for whom there is no recent history of default. The ageing analysis
of these trade receivables is as follows:
31 to 60 days
61 to 90 days
91 to 120 days
121 to 210 days
211 days and over
Consolidated
2016
$
2015
$
2,343,056
166,910
216,714
59,947
510,333
3,296,960
1,866,816
1,228,257
744,283
607,046
788,817
5,235,219
(c) Foreign exchange and interest rate risk
Information about the group's exposure to foreign currency risk and interest rate risk in relation to trade and other
receivables is provided in note 2.
(d) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair
value.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables mentioned
above. The group does not hold any collateral as security. Refer to note 2 for more information on the risk
management policy of the group.
64 • Lycopodium Limited Annual Financial Report 2016
64
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
Consolidated
2016
$
2015
$
597,974
1,195,054
1,793,028
637,693
1,070,528
1,708,221
10 Current assets - Other current assets
Other current assets (a)
Prepayments
(a) Other current assets
Other current assets consist of deposits held with licensed banks as security/bond on the various properties
leased by the group.
11 Non-current assets - Other receivables
Other receivables
(a)
Impaired receivables and receivables past due
Consolidated
2016
$
2015
$
521,898
703,291
None of the non-current receivables are impaired or past due but not impaired.
12 Non-current assets - Investments accounted for using the equity method
Investment in joint venture
Investment in associate
Consolidated
2016
$
2015
$
1,015,900
752,851
1,768,751
2,789,527
-
2,789,527
65
• 65
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
12 Non-current assets - Investments accounted for using the equity method
(continued)
(a)
Investment in joint venture
The group has one material joint venture, Pilbara EPCM Pty Ltd ("PEPL").
Name of Joint
Venture
Country of
Incorporation &
Principal Place of
Business
Pilbara EPCM Pty Ltd
Australia
Principal Activities
Engineering,
procurement,
construction
management
services
Proportion of Ownership Interest
Held by the Group
2016
2015
50%
50%
The investment in PEPL is accounted for using the equity method in accordance with AASB 128.
Summarised financial information for PEPL is set out below:
Current assets (a)
Non-current assets
Total assets
Current liabilities (b)
Non-current liabilities (c)
Total liabilities
a. Includes cash and cash equivalents
b. Includes current financial liabilities (excluding trade and other payables and
provisions)
c. Includes non-current financial liabilities (excluding trade and other payables and
provisions)
Revenue
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Depreciation and amortisation
Interest income
Interest expense
Tax expense
2016
$
2015
$
3,851,858
-
3,851,858
1,052,756
767,306
1,820,062
10,382,283
-
10,382,283
2,061,118
2,742,114
4,803,232
2,210,810
-
6,263,407
-
-
-
2016
$
2015
$
9,372,882
1,652,743
-
-
36,198,303
5,680,646
-
-
-
106,980
-
689,519
-
199,199
-
1,766,556
A reconciliation of the above summarised financial information to the carrying amount of the investment in PEPL
is set out below:
66 • Lycopodium Limited Annual Financial Report 2016
66
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
12 Non-current assets - Investments accounted for using the equity method
(continued)
Total net assets of PEPL
Proportion of ownership interest held by the Group
Carrying amount of the investment in PEPL
2016
$
2015
$
2,031,796
50%
1,015,900
5,579,052
50%
2,789,526
Dividends received during the year from PEPL amounted to $2,600,000 (2015: $4,400,000).
PEPL is a Private Company; therefore no quoted market prices are available for its shares.
(b) Investment in associate
During the year, the Group acquired a 31% equity interest in ECG Engineering Pty Ltd, a start up electrical
engineering consultancy based in Perth, Australia.
Summarised financial information of the Group's share in this associate:
Profit from continuing operations
Other comprehensive income
Total comprehensive income
Carrying amount of the Group's interest in associate
13 Non-current assets - Available-for-sale financial assets
Balance at the beginning of the year
Revaluation deficit transferred to equity
Equity securities
Balance at end of year
2016
$
2015
$
365,352
-
365,352
752,851
-
-
-
.
-
Consolidated
2016
$
2015
$
35,750
(2,900)
70,103
102,953
3,000
-
32,750
35,750
67
• 67
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
14 Non-current assets - Property, plant and equipment
Fixtures and
fittings
$
Motor
vehicles
$
Leasehold
improvements
$
Leased plant
and
equipment
$
Total
$
6,263,090
(4,363,169)
1,899,921
215,679
(108,032)
107,647
1,848,815
(820,782)
1,028,033
1,572,008
(1,121,798)
450,210
9,899,592
(6,413,781)
3,485,811
1,899,921
540,136
166,735
(26,434)
(739,147)
39,501
75,464
1,956,176
107,647
28,570
34,231
(65,309)
(25,587)
-
(150)
79,402
1,028,033
11,429
20,369
(297,812)
(174,740)
-
42,843
630,122
450,210
-
-
-
(295,298)
(44,347)
-
110,565
3,485,811
580,135
221,335
(389,555)
(1,234,772)
(4,846)
118,157
2,776,265
6,798,826
(4,842,650)
1,956,176
226,148
(146,746)
79,402
1,399,709
(769,587)
630,122
366,257
(255,692)
110,565
8,790,940
(6,014,675)
2,776,265
1,956,176
522,904
(190)
(655,534)
18,774
(78,376)
1,763,754
79,402
13,593
(4,245)
(17,056)
-
(2,648)
69,046
630,122
12,110
(3,973)
(121,698)
-
(5,565)
510,996
110,565
-
(13,884)
(77,907)
(18,774)
-
-
2,776,265
548,607
(22,292)
(872,195)
-
(86,589)
2,343,796
6,798,763
(5,035,009)
1,763,754
212,142
(143,096)
69,046
783,485
(272,489)
510,996
-
-
-
7,794,390
(5,450,594)
2,343,796
At 1 July 2014
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2015
Opening net book amount
Acquisition of subsidiary
Additions
Disposals
Depreciation charge
Transfers
Exchange differences
Closing net book amount
At 30 June 2015
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2016
Opening net book amount
Additions
Disposals
Depreciation charge
Transfers
Exchange differences
Closing net book amount
At 30 June 2016
Cost
Accumulated depreciation
Net book amount
68 • Lycopodium Limited Annual Financial Report 2016
68
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
14 Non-current assets - Property, plant and equipment (continued)
(a) Leased assets
Plant and equipment under a finance lease is disclosed as a separate category in the property, plant and
equipment movements detailed above. In addition, leasehold improvements include the following amounts where
the group is a lessee under a finance lease:
Leasehold equipment
Cost
Accumulation depreciation
Net book amount
15 Non-current assets - Deferred tax assets
The balance comprises temporary differences attributable to:
Unused tax losses
Employee benefits
Doubtful debts
Accrued expenses
Deferred revenue
Other provisions
Depreciation
Finance leases
Consolidated
2016
$
2015
$
529,706
(529,706)
-
529,706
(472,762)
56,944
Consolidated
2016
$
2015
$
969,026
2,089,752
142,442
174,696
160,935
(4,610)
310
-
3,532,551
3,163,352
2,322,848
226,475
134,107
381,406
137,694
310
56,650
6,422,842
Set-off of deferred tax liabilities pursuant to set-off provisions (note 20)
Net deferred tax assets
(750,010)
2,782,541
(1,091,055)
5,331,787
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
2,843,786
688,765
3,532,551
5,651,807
771,035
6,422,842
69
• 69
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
15 Non-current assets - Deferred tax assets (continued)
Movements
Doubtful
debts
$
Employee
Benefits
$
Deferred
revenue
$
Accrued
expenses
$
Other
provisions
$
Depn
&
Amort
$
Finance
Leases
$
Unused
tax losses
$
Total
$
204,940
At 1 July 2014 31,055
Credited/(charged)
- to profit or
loss
Acquisition of
subsidiary
Exchange rate
differences
At 30 June
2015
226,475
-
(9,520)
(84,033)
At 1 July 2015 226,475
(Charged)/credited
- to profit or
loss
- directly to
equity
Exchange rate
differences
At 30 June
2016
142,442
-
-
2,435,970
18,651
295,507
72,209 33,474 162,006 2,028,483 5,077,355
(320,622)
85,419 (180,461)
50,671(33,164) (105,356)
899,486
600,913
207,500 277,336
19,061
14,814
-
-
-
-
-
-
-
-
227,712
736,903
7,671
7,671
2,322,848 381,406
134,107 137,694
310
56,650 3,163,352 6,422,842
2,322,848 381,406
134,107 137,694
310
56,650
3,163,352 6,422,842
(233,096) (220,471)
40,589 (143,173)
-
-
-
-
-
-
870
-
-
-
-
2,089,752 160,935
174,696
(4,609)
310
(56,650) (2,138,445) (2,835,279)
-
-
-
-
870
(55,882)
(55,882)
969,025 3,532,551
70 • Lycopodium Limited Annual Financial Report 2016
70
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
16 Non-current assets - Intangible assets
At 1 July 2014
Cost
Accumulation amortisation and impairment
Net book amount
Year ended 30 June 2015
Opening net book amount
Additions
Amortisation charge *
Transfers from property, plant and equipment
Exchange differences
Closing net book amount
Goodwill
$
Software
$
Customer
contracts
$
Total
$
6,420,380
(819,842)
5,600,538
4,543,272
(3,372,509)
1,170,763
315,000
(225,000)
90,000
11,278,652
(4,417,351)
6,861,301
5,600,538
2,465,026
-
-
-
8,065,564
1,170,763
38,236
(474,135)
4,846
8,034
747,744
90,000
-
(45,000)
-
-
45,000
6,861,301
2,503,262
(519,135)
4,846
8,034
8,858,308
Cost
Accumulation amortisation and impairment
Net book amount
8,885,406
(819,842)
8,065,564
2,043,090
(1,295,346)
747,744
315,000
(270,000)
45,000
11,243,496
(2,385,188)
8,858,308
Year ended 30 June 2016
Opening net book amount
Additions
Amortisation charge *
Impairment loss recognised
Exchange differences
Closing net book amount
At 30 June 2016
Cost
Accumulated amortisation
Net book amount
Goodwill
$
Software
$
Customer
contracts
$
Total
$
8,065,564
-
-
(500,000)
-
7,565,564
747,744
9,962
(411,900)
-
(3,637)
342,169
45,000
-
(45,000)
-
-
-
8,858,308
9,962
(456,900)
(500,000)
(3,637)
7,907,733
8,385,406
(819,842)
7,565,564
1,934,790
(1,592,621)
342,169
315,000
(315,000)
-
10,635,196
(2,727,463)
7,907,733
* Group amortisation of $456,900 (2015: $519,135) is included in depreciation and amortisation expense in the
statement of comprehensive income.
71
• 71
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
16 Non-current assets - Intangible assets (continued)
(a)
Impairment tests for goodwill
Goodwill is allocated to the group cash-generating units (CGUs) identified according to business segment and
country of operation.
A segment-level summary of the goodwill allocation is presented below.
2016
Minerals
Process industries
Maintenance
Metallurgical
2015
Minerals
Process industries
Maintenance
Metallurgical
Australia
$
Other
countries
$
3,622,991
263,242
1,095,048
119,257
5,100,538
2,465,026
-
-
-
2,465,026
Australia
$
Other
countries
$
3,622,991
763,242
1,095,048
119,257
5,600,538
2,465,026
-
-
-
2,465,026
Total
$
6,088,017
263,242
1,095,048
119,257
7,565,564
Total
$
6,088,017
763,242
1,095,048
119,257
8,065,564
72 • Lycopodium Limited Annual Financial Report 2016
72
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
16 Non-current assets - Intangible assets (continued)
(b) Key assumptions used for value-in-use calculations
The recoverable amount of each CGU within the business segment is determined on the basis of value-in-use
('VIU'). The following describes the assumptions on which management has based its cash flow projections when
determining value in use:
Minerals
Process Industries
Maintenance
Metallurgical
Growth rate
Growth rates
2016
%
2015
%
Discount rates
2015
2016
%
%
2.5
1.0
2.5
2.5
2.5
2.5
2.0
2.5
6.0
6.0
6.0
6.0
11.7
11.7
11.7
11.7
The growth rate represents a steady indexation rate which does not exceed management's expectations of the
long term average growth rate for the business in which each CGU operates.
Discount rate
The base discount rate applied to cash flow projections is 7.8% (2015: 11.7%). The discount rate is a pre-tax rate
that reflects the current assessment of the time value of money and the overall perceived risk profile of the group.
Cash flows
VIU calculations use cash flow projections from approved budgets based on past performance and its
expectations for the future covering a three year period.
Revenue
Value-in-use model is based on budget approved by the Board. The forecast budget process was developed
based on revenue expectations for the year built around existing customer contracts along with the potential to
develop new markets and sustain growth.
(c) Cash flow assumptions
Minerals, Maintenance and Metallurgical
The forecast was adjusted to reflect the challenging conditions seen in these segments over the past year as the
industry in general tightened. As a result, the Board expects minimal growth rate and moderately declining profit
margins for this segment.
Efficiency improvements were factored into the forecasts on the back of the strategic plans put in place to counter
the effects of the tightening market. These include savings in fixed overhead costs and other process efficiencies.
Process Industries
The forecast was adjusted in 2016 for the decline in services in the Process Industries segment due to the
decline in Australia's manufacturing industry. As a result, the Board expects lower growth and declining profit
margins for this segment.
Impairment testing, taking into account these latest developments, resulted in a reduction in goodwill in 2016 of
$500,000. The related goodwill impairment loss of $500,000 (2015: nil) was included within impairment of
non-financial assets.
73
• 73
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
16 Non-current assets - Intangible assets (continued)
(c) Cash flow assumptions (continued)
Apart from the consideration described in determining the value-in-use of the cash-generating units described
above, the Board is not currently aware of any other probable changes that would necessitate changes in its key
estimates.
17 Current liabilities - Trade and other payables
Trade payables
Revenue received in advance
Goods and services tax (GST) payable
Sundry creditors and accrued expenses
Employee benefit obligations (a)
Consolidated
2016
$
2015
$
3,587,538
2,449,507
84,681
8,678,445
6,636,784
21,436,955
2,708,897
1,883,634
468,950
7,718,577
7,074,384
19,854,442
Included in the above are financial liabilities of $18,902,767 (2015: $17,501,858).
(a) Amounts not expected to be settled within the next 12 months
Employee benefit obligations include accruals for annual leave and unconditional entitlements of long service
leave. The entire obligation is presented as current, since the group does not have an unconditional right to defer
settlement. However, based on past experience, the group does not expect all employees to take the full amount
of accrued leave within the next 12 months.
The following amounts reflect leave that is not expected to be taken within the next 12 months:
Annual leave obligation expected to be settled after 12 months
Long service leave obligation expected to be settled after 12 months
(b) Risk exposure
Information about the group exposure to foreign exchange risk is provided in note 2.
Consolidated
2016
$
2015
$
732,859
923,151
1,656,010
695,866
1,305,616
2,001,482
74 • Lycopodium Limited Annual Financial Report 2016
74
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
Consolidated
2016
$
2015
$
-
-
188,834
188,834
89,879
89,879
99,679
99,679
89,879
288,513
18 Current liabilities - Borrowings
Secured
Lease liabilities (note 27)
Total secured current borrowings
Unsecured
Other loans
Total unsecured current borrowings
Total current borrowings
(a) Risk exposures
Details of the group's exposure to risks arising from current and non-current borrowings are set out in note 2.
75
• 75
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
19 Non-current liabilities - Deferred tax liabilities
The balance comprises temporary differences attributable to:
Accrued income - contractors
Other provisions
Depreciation
Prepaid expenses
Consolidated
2016
$
2015
$
321,126
169,388
235,475
24,021
750,010
292,169
347,126
377,743
74,017
1,091,055
Set-off of deferred tax liabilities pursuant to set-off provisions (note 15)
Net deferred tax liabilities
(750,010)
-
(1,091,055)
-
Deferred tax liabilities expected to be settled within 12 months
Deferred tax liabilities expected to be settled after more than 12 months
750,010
-
750,010
713,312
377,743
1,091,055
Movements
At 1 July 2014
Charged/(credited)
- profit or loss
Acquisition of subsidiary
At 30 June 2015
Depreciation
&
amortisation
$
Accrued
income
$
Other
provisions
$
Prepaid
expenses
$
Total
$
199,329
78,073
62,204
44,387
383,993
178,414
-
377,743
(41,778)
255,874
292,169
251,584
33,338
347,126
15,624
14,006
74,017
403,844
303,218
1,091,055
At 1 July 2015
Charged/(credited)
- profit or loss
At 30 June 2016
377,743
292,169
347,126
74,017
1,091,055
(142,268)
235,475
28,957
321,126
(177,738)
169,388
(49,996)
24,021
(341,045)
750,010
20 Non-current liabilities - Provisions
Employee benefits - long service leave
639,873
568,634
Consolidated
2016
$
2015
$
76 • Lycopodium Limited Annual Financial Report 2016
76
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
2016
Shares
2015
Shares
2016
$
2015
$
39,732,373
39,732,373
20,823,772
20,823,772
21 Contributed equity
(a) Share capital
Ordinary shares
Fully paid
(b) Movements in ordinary share capital
Date
Details
Number of
shares
Issue price
$
1 July 2014 Opening balance
1 September 2014 Exercise of Director performance rights
6 October 2014 Shares issued for Acquisition of
38,965,103
117,000
247,635
Lycopodium Rail Pty Ltd Outside
Interests
6 October 2014 Shares issued for Acquisition of
247,635
Lycopodium Americas Pty Ltd Outside
Interests
25 November 2014 Exercise of Employee performance rights
30 June 2015 Closing balance
1 July 2015 Opening balance
No movements during the year
30 June 2016 Closing balance
(c) Ordinary shares
155,000
39,732,373
39,732,373
-
39,732,373
$0.74
$2.02
$2.02
$4.76
18,999,317
86,346
500,000
500,000
738,109
20,823,772
20,823,772
-
20,823,772
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one
vote, and upon a poll each share is entitled to one vote.
(d) 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 an
optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the group monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including 'borrowings'
and 'trade and other payables' as shown in the consolidated balance sheet) less cash and cash equivalents.
Total capital is calculated as 'equity' as shown in the consolidated balance sheet (including non-controlling
interests) plus net debt.
77
• 77
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
21 Contributed equity (continued)
(d) Capital risk management (continued)
During 2016, the group's strategy was to maintain a gearing less than 40%. The gearing ratios at 30 June 2016
and 30 June 2015 were as follows:
Total borrowings (including payables)
Less: cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
22 Reserves and retained earnings
(a) Other reserves
Available-for-sale investment revaluation reserve
Performance rights reserve
Foreign currency translation reserve
Movements:
Available-for-sale investment revaluation reserve
Balance 1 July
Revaluation - gross
Deferred tax
Balance 30 June
Performance rights reserve
Balance 1 July
Performance rights plan expense
Transfer to share capital - exercise of rights
Balance 30 June
Foreign currency translation reserve
Balance 1 July
Currency translation differences arising during the year
Balance 30 June
78 • Lycopodium Limited Annual Financial Report 2016
78
Consolidated
2016
$
2015
$
21,526,836
(41,547,756)
(20,020,920)
20,142,956
(32,440,938)
(12,297,982)
61,268,322
41,247,402
60,296,197
47,998,215
(32.7)%
(20.4)%
Consolidated
2016
$
2015
$
(83,930)
259,037
(1,016,051)
(840,944)
(81,900)
259,037
577,285
754,422
Consolidated
2016
$
2015
$
(81,900)
(2,900)
870
(83,930)
259,037
-
-
259,037
(81,900)
-
-
(81,900)
1,021,535
61,957
(824,455)
259,037
577,285
(1,593,336)
(1,016,051)
(27,898)
605,183
577,285
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
22 Reserves and retained earnings (continued)
(b) Retained earnings
Balance 1 July
Profit/(Loss) for the year
Dividends paid or payable
Acquisition of non-controlling interests (i)
Transfer from non-controlling interests
Balance 30 June
Consolidated
2016
$
2015
$
38,718,003
3,163,478
(595,987)
-
-
41,285,494
42,390,395
(918,077)
(1,182,219)
(2,150,000)
577,904
38,718,003
(i) During the prior year, the group purchased the remaining non-controlling interest of Lycopodium Americas Pty
Ltd, Lycopodium Rail Pty Ltd and Orway Mineral Consultants Americas Pty Ltd.
(c) Nature and purpose of other reserves
(i) Available-for-sale investments revaluation reserve
Changes in the fair value and exchange differences arising on translation of investments, such as equities,
classified as available-for-sale financial assets, are recognised in other comprehensive income as described in
note 1(m) and accumulated in a separate reserve within equity. Amounts are reclassified to profit or loss when
the associated assets are sold or impaired.
(ii) Performance rights reserve
The performance rights reserve is used to recognised the fair value of rights issued to certain Directors or
employees during the year.
(iii) Foreign currency translation reserve
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive
income as described in note 1(d) and accumulated in a separate reserve within equity. The cumulative amount is
reclassified to profit or loss when the net investment is disposed of.
79
• 79
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
23 Non-controlling interests
Share capital
Reserves
Non-controlling interest on acquisition
Retained earnings
Transfer to retained earnings
24 Dividends
(a) Ordinary shares
Consolidated
2016
$
2015
$
14,937
23,986
2,833,808
189,964
-
3,062,695
14,937
2,100
2,833,808
663,788
(577,904)
2,936,729
Parent entity
2016
$
2015
$
No payments of final dividend for the year ended 30 June 2015 (2014: 1.5 cents)
Fully franked based on tax paid @ 30% (2015: 30%)
-
586,233
Interim dividend for the year ended 30 June 2016 of 1.5 cents (2015: 1.5 cents)
per fully paid share paid on 13 April 2016 (2015: 17 April 2015)
Fully franked based on tax paid @ 30% (2015: 30%)
Total dividends provided for or paid
595,987
595,987
595,986
1,182,219
(b) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the Directors have
recommended the payment of a final dividend of 4.0 cents per fully paid ordinary
share (2015: 0 cents), fully franked based on tax paid at 30%. The aggregate
amount of the proposed dividend expected to be paid on 14 October 2016 out of
retained earnings at 30 June 2016, but not recognised as a liability at year end, is
(c) Franked dividends
Parent entity
2016
$
2015
$
1,589,295
-
Consolidated
2016
$
2015
$
Franking credits available for subsequent reporting periods based on a tax rate of
30% (2015: 30%)
12,687,298
10,535,474
80 • Lycopodium Limited Annual Financial Report 2016
80
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
24 Dividends (continued)
(c) Franked dividends (continued)
The above amounts represent the balance of the franking account as at the end of the reporting period, adjusted
for:
(a)
(b)
(c)
franking credits that will arise from the payment of the amount of the provision for income tax
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date,
and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting
date.
The consolidated amounts include franking credits that would be available to the parent entity if distributable
profits of subsidiaries were paid as dividends.
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 $681,126 (2015: $0).
25 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
(a) Grant Thornton Audit Pty Ltd
Audit and other assurance services
Audit and review of financial reports
Taxation services - Paid to a related entity of Grant Thornton Audit Pty Ltd
Tax compliance services (including income tax returns)
Tax consolidation and valuation services
Total remuneration for taxation services
Other services
Other services
Total remuneration
(b) Network firms of Grant Thornton Audit Pty Ltd
Audit and other assurance services
Audit and review of financial statements
Taxation services
Tax compliance services (including income tax returns)
Other services
Other services
Total remuneration of network firms of Grant Thornton Audit Pty Ltd
Consolidated
2016
$
2015
$
190,000
190,000
146,400
-
146,400
30,000
311,168
341,168
9,500
345,900
19,205
550,373
Consolidated
2016
$
2015
$
115,079
25,995
-
141,074
96,597
25,429
1,633
123,659
81
• 81
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
25 Remuneration of auditors (continued)
(c) Non-Grant Thornton Audit Pty Ltd
Audit and other assurance services
Audit and review of financial statements
Taxation services
Tax compliance services (including income tax returns)
International tax advice
Total remuneration for taxation services
Other services
Other services
Total remuneration of non-Grant Thornton Audit Pty Ltd audit firms
Consolidated
2016
$
2015
$
52,367
31,597
100,102
-
100,102
55,926
45,747
101,673
-
152,469
14,200
147,470
Total auditors' remuneration
639,443
821,502
It is the group's policy to employ Grant Thornton Audit Pty Ltd on assignments additional to their statutory audit
duties where Grant Thornton Audit Pty Ltd expertise and experience with the group are important. These
assignments are principally tax advice and due diligence reporting on acquisitions, or where Grant Thornton Audit
Pty Ltd is awarded assignments on a competitive basis. It is the group's policy to seek competitive tenders for all
major consulting projects.
26 Contingencies
The group had contingent liabilities at 30 June 2016 and 30 June 2015 in respect of:
(a) Contingent liabilities
(i) Guarantees
Guarantees are given in respect of rental bonds for $1,935,610 (2015: $1,664,122).
These guarantees may give rise to liabilities in the event that the group defaults on its obligations under the terms
of the lease agreement for its premises at 1 Adelaide Terrace, East Perth, 153-163 Leichhardt Street, Spring Hill,
253-269 Wellington Road, Mulgrave, 138-140 Beaumont Street, Hamilton and Centennial Place, Century
Boulevard, Century City, Cape Town, South Africa.
No material losses are anticipated in respect of any of the above contingent liabilities (2015: Nil).
27 Commitments
(a) Capital commitments
There were no capital expenditures contracted for at the reporting date which have not been recognised as
liabilities (2015: Nil).
82 • Lycopodium Limited Annual Financial Report 2016
82
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
27 Commitments (continued)
(b) Lease commitments: group as lessee
(i) Non-cancellable operating leases
The property under operating lease by Lycopodium Minerals Pty Ltd is a non cancellable lease with a 120 month
term ending 31 January 2021. Minimum lease payments are contingent upon both 4% fixed annual increases and
market-based reviews during the term of the lease. The lease allows for sub letting of all lease areas, subject to
the consent of the landlord.
The property under operating lease by Lycopodium Process Industries Pty Ltd is a non cancellable lease with a
36 month term ending 15 September 2018, with an option to renew the lease at the end of the term for a further
36 months. The agreement provides for an annual increase in the rental payments of 3.5% over the previous
year's rental.
The property under operating lease by Lycopodium (Philippines) Pty Ltd is a non cancellable lease with a 36
month term ending 30 June 2018. The agreement provides for an increase in the rental payments of 5% per
annum and an increase in the general leasing expenses of 5% per annum.
The property under operating lease by Lycopodium Minerals QLD Pty Ltd is a non-cancellable lease with a 72
month term ending 28 February 2018, with no option to renew. The lease agreement provides for annual
increase in the rental payments of 4% over the previous year's rental. The lease allows for sub-letting of all lease
areas subject to prior consent of the landlord.
The property under operating lease by Lycopodium Asset Management Pty Ltd is a non cancellable lease with a
96 month term ending 31 January 2021, with an option to renew a further 60 month term. Minimum lease
payments are contingent upon a 4.5% fixed annual increase. The lease allows for sub letting of all lease areas,
subject to the consent of the landlord.
The property under lease by Lycopodium Minerals Canada Ltd is a non-cancellable lease with a 60 month term
ending 31 July 2017, with an option to renew for a further 60 months term. The agreement fixes rental from 1
August 2014 to expiry date.
The property under operating lease by Lycopodium Rail Pty Ltd is a non-cancellable lease with a 36 months term
ending 19 January 2018, with an option to renew the lease at the end of its term for a further 36 months.
Minimum lease payments are contingent upon annual CPI movements during the terms of its lease.
The property under lease by ADP Holdings (Pty) Limited is a non-cancellable lease with a 60 month term ending
30 April 2018. The agreement provides for an annual increase in the rental payments of 8% over the previous
year's rental. The lease allows for sub-letting of all lease areas subject to prior consent of the landlord.
Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Consolidated
2016
$
2015
$
8,354,181
23,387,362
-
31,741,543
7,805,187
29,592,524
1,327,000
38,724,711
(ii) Finance leases and hire purchase commitments
The group has finance leases and hire purchase contracts for various items of plant and equipment with a
carrying amount of $0 (2015: $167,508). These lease contracts expire within 1 to 5 years. Under the terms of the
leases, the group has the option to acquire the leased assets.
83
• 83
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
27 Commitments (continued)
(b) Lease commitments: group as lessee (continued)
(ii) Finance leases and hire purchase commitments (continued)
Commitments in relation to finance leases are payable as follows:
Within one year
Future finance charges
Total lease liabilities
Representing lease liabilities:
Current (note 18)
Consolidated
2016
$
2015
$
-
-
-
-
193,990
(5,155)
188,835
188,834
The weighted average interest rate implicit in the leases and hire purchases is 0% (2015: 7.10%).
28 Related party transactions
(a) Parent entities
The parent entity within the group is Lycopodium Limited, which is incorporated in Australia.
(b) Subsidiaries
Interests in subsidiaries are set out in note 30.
(c) Key management personnel
Short-term employee benefits
Post-employment benefits
Consolidated
2016
$
2015
$
2,538,536
180,206
2,718,742
2,477,670
175,206
2,652,876
Detailed remuneration disclosures are provided in the remuneration report on pages 11 to 18.
84 • Lycopodium Limited Annual Financial Report 2016
84
28 Related party transactions (continued)
(d) Transactions with other related parties
The following transactions occurred with related parties:
Purchases of goods and services
Purchases from joint venture
Purchases from associate
Sale of goods and services
Sales to joint venture
Other revenue
Management fees to joint venture
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
Consolidated
2016
$
2015
$
26,183
2,682,375
45,354
-
856,568
2,504,724
-
450,000
(e) Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related
parties:
Current receivables
Joint venture
Current payables
Joint venture
Associate
(f) Loans to/from related parties
Loans to associate
Beginning of the year
Loans advanced
Repayments made
End of year
Consolidated
2016
$
2015
$
126,402
116,668
6,283
251,307
176,233
-
Consolidated
2016
$
2015
$
-
387,500
-
387,500
-
-
-
-
There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense
has been recognised in respect of impaired receivables due from related parties.
(g) Terms and conditions
Purchases and sales of goods and services with the joint venture are made at cost.
Purchases and sales of goods and services with the associate are made at arms-length.
85
• 85
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
28 Related party transactions (continued)
(g) Terms and conditions (continued)
Loans advanced to the joint venture and associate are interest-free and repayable within 12 months.
Outstanding balances are unsecured and are repayable in cash.
29 Business combination
(a) Acquisition of ADP Holdings (Pty) Ltd and Metco Global Ltd
On 30 September 2014, Lycopodium acquired 74% of the issued share capital of ADP Holdings (Pty) Ltd
(“ADP”). The company is based in South Africa, with operations relating to supplying engineering, procurement,
construction and management (“EPCM”) services and engineering, procurement and construction (“EPC”)
projects to the mining industry.
On 30 September 2014, Lycopodium acquired 74 % of the issued share capital of Metco Global Ltd ("Metco").
The company is based in Angola with operations relating to the supply of alluvial and kimberlite diamond
processing equipment for prospection and medium sized production modules.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration (refer to (iv) below):
Cash paid
$
10,530,478
The fair values of the identifiable net assets at 30 June 2015 recognised as a result of the acquisition are as
follows:
Cash
Trade and other receivables (net of provision for
doubtful debts)
Inventories
Plant and equipment
Trade and other payables
Deferred income
Provisions
Borrowings
Net identifiable assets acquired
Less: non-controlling interests
Add: Goodwill
Net assets acquired
ADP
$
6,203,095
11,284,006
1,753,299
564,825
(6,239,482)
(2,868,669)
(81,165)
(46,178)
10,569,731
(2,748,130)
2,465,025
10,286,626
Metco
$
186,380
1,712,083
-
15,310
(28,656)
(18,387)
(1,537,201)
329,529
(85,677)
-
243,852
Total
$
6,389,475
12,996,089
1,753,299
580,135
(6,268,138)
(2,868,669)
(99,552)
(1,583,379)
10,899,260
(2,833,807)
2,465,025
10,530,478
The goodwill is attributable to the workforce and the profitability of the acquired business.
(i) Acquired receivables
The fair value of acquired trade receivables for ADP and Metco are $9,790,446 and $1,703,573 respectively.
ADP's gross contractual amount for trade receivables due is $9,853,238 of which $62,792 is expected to be
uncollectible. Metco's gross contractual amount for trade receivables due is $2,348,025 of which $644,452 is
expected to be uncollectible.
86 • Lycopodium Limited Annual Financial Report 2016
86
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
29 Business combination (continued)
(a) Acquisition of ADP Holdings (Pty) Ltd and Metco Global Ltd (continued)
(ii) Non-controlling interests
The group recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling
interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an
acquisition-by-acquisition basis. For the non-controlling interest in ADP and Metco, the group elected to
recognise the non-controlling interests in at its proportionate share of the acquired net identifiable assets.
(iii) Revenue and profit contribution
The ADP business contributed revenues of $34,084,342 and net profit of $265,096 to the group for the period
from 30 September 2014 to 30 June 2015. The Metco business contributed revenues of $351,103 and net loss of
$521,662 to the group for the period from 30 September 2014 to 30 June 2015.
If the acquisition had occurred on 1 July 2014, ADP's revenues and net profit for the full-year ended 30 June
2015 would be $50,076,617 and $416,619 respectively. Metco's revenues and net loss for the full-year ended 30
June 2015 would be $1,396,012 and $651,362 respectively.
(iv) Purchase consideration - cash outflow
Outflow of cash to acquire subsidiary, net of cash acquired
Cash consideration
Less: balances acquired
Cash
Outflow of cash - investing activities
Acquisition-related costs
2015
$
10,530,478
(6,389,475)
4,141,003
Acquisition related costs totalled $311,917 of which $265,881 was incurred in the financial period ended 30 June
2014 and $46,036 in the current reporting period. These costs are included in other expenses in consolidated
statement of profit or loss and other comprehensive income.
(b) Acquisition of non-controlling interests in Lycopodium Americas Pty Ltd, Lycopodium Rail Pty Ltd
and Orway Mineral Consultants Americas Pty Ltd
On 6 October 2014, Lycopodium Limited completed the acquisition of the non-controlling interests' shares in its
subsidiary Lycopodium Americas Pty Ltd and Lycopodium Rail Pty Ltd pursuant to the exercise of an existing
option for a total consideration of $2,000,000.
On 17 April 2015, Orway Minerals Consultants (WA) Pty Ltd completed the acqusition of the non-controlling
interest shares in its subsidiary Orway Mineral Consultants Americas Pty Ltd for total cash consideration of
$150,000.
Cash paid
Fully paid shares in Lycopodium Limited
Total purchase consideration
87
2015
$
1,150,000
1,000,000
2,150,000
• 87
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
30 Subsidiaries
(a) Significant investments in subsidiaries
The consolidated financial report incorporate the assets, liabilities and results of the following principal
subsidiaries in accordance with the accounting policy described in note 1(b):
Name of entity
ADP Holdings (Pty) Limited
Lycopodium Asset Management Pty Ltd
Lycopodium Burkina Faso SARL
Lycopodium Ghana Ltd
Lycopodium Infrastructure Pty Ltd
Lycopodium Mauritius
Lycopodium Minerals Canada Ltd
Lycopodium Minerals Pty Ltd
Lycopodium Philippines Pty Ltd
Lycopodium Process Industries Pty Ltd
Lycopodium Rail Pty Ltd
Metco Global Limited
Orway Mineral Consultants (Canada) Ltd
Orway Mineral Consultants (WA) Pty Ltd
Country of
incorporation /
Principal
activity
South Africa (1)
Australia (1)
Burkina Faso (2)
Ghana (2)
Australia (1)
Mauritius (2)
Canada (1)
Australia (1)
Australia (1)
Australia (1)
Australia (1)
Angola (2)
Canada (1)
Australia (1)
Class of shares
Equity holding
2016
%
2015
%
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
74
100
100
100
100
100
100
100
100
100
100
74
100
100
74
100
100
100
100
100
100
100
100
100
100
74
100
100
(1) Engineering, procurement, construction management services
(2) Offshore project support services
31 Events occurring after the reporting period
Since year end the directors have recommended the payment of a final dividend on ordinary shares in respect of
the 2016 financial year. The total amount of the dividend is $1,589,295 (2015: $0), which represents a fully
franked dividend of 4.0 (2015: 0) cents per fully paid ordinary share.
With the exception of the above, no other matter or circumstances have arisen since the end of the financial year
which significantly affected or may significantly affect:
(a)
(b)
(c)
the group's operations in future financial years, or
the results of those operations in future financial years, or
the group's state of affairs in future financial years.
88 • Lycopodium Limited Annual Financial Report 2016
88
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
32 Reconciliation of profit after income tax to net cash inflow from operating activities
Profit/(Loss) for the year
Depreciation and amortisation
Impairment of goodwill
Loans advanced to associate (included at cash flows from financing activities)
Non-cash employee benefits expense - share-based payments
Dividend and interest income
Net loss on sale of non-current assets
Share of net profit of associate and joint venture accounted for using the equity
method
Interest relating to financing activities
Change in operating assets and liabilities:
(Increase)/decrease in trade debtors and other receivables
Increase in inventories
Decrease/(increase) in deferred tax assets
(Increase)/decrease in other operating assets
Increase in trade creditors
Increase/(decrease) in provision for income taxes payable
Increase/(decrease) in other provisions
Net cash inflow from operating activities
33 Earnings per share
(a) Basic earnings per share
Consolidated
2016
$
2015
$
3,326,410
1,329,095
500,000
387,500
-
(9,413)
1,254
(1,015,413)
1,753,905
-
-
61,958
(946)
323,251
(1,191,724)
33,324
(2,840,323)
57,836
(1,952,129)
(448,475)
2,550,116
(84,808)
1,582,515
3,971,765
71,240
10,066,670
1,637,241
(255,211)
(638,425)
282,071
3,940,087
(1,411,346)
(420,289)
1,474,396
Consolidated
2016
Cents
2015
Cents
Basic earnings per share attributable to the ordinary equity holders of the
company
8.0
(2.3)
(b) Diluted earnings per share
Consolidated
2016
Cents
2015
Cents
Diluted earnings per share attributable to the ordinary equity holders of the
company
8.0
(2.3)
89
• 89
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
33 Earnings per share (continued)
(c) Reconciliation of earnings used in calculating earnings per share
Basic earnings per share
Profit/(Loss) attributable to the ordinary equity holders of the company used in
calculating basic earnings per share
Diluted earnings per share
Used in calculating diluted earnings per share
(d) Weighted average number of shares used as denominator
Consolidated
2016
$
2015
$
3,163,478
(918,077)
3,163,478
(918,077)
Consolidated
2016
Number
2015
Number
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
39,732,373
39,537,055
Adjustments for calculation of diluted earnings per share:
Performance rights
-
303,126
Weighted average number of ordinary and potential ordinary shares used as the
denominator in calculating diluted earnings per share
39,732,373
39,840,181
90 • Lycopodium Limited Annual Financial Report 2016
90
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
34 Share-based payments
(a) Executive director performance rights plan
Performance rights were granted to certain executive directors as disclosed in the Notice of Annual General
Meeting dated 16 October 2008. The performance rights were designed to give incentive to the executive
directors to provide dedicated and ongoing commitment and effort to the company and aligning the interest of
both employees and shareholders.
The performance rights vest subject to the following performance hurdles being met.
(i)
Tranche 1 - On 1 July 2011 if EPS for 30 June 2009 exceeds EPS for 30 June 2008 by 10%
(ii) Tranche 2 - On 1 July 2012 if EPS for 30 June 2010 exceeds EPS for 30 June 2009 by 10%
(iii) Tranche 3 - On 1 July 2013 if EPS for 30 June 2011 exceeds EPS for 30 June 2010 by 10%
(iv) Tranche 4 - On 1 July 2014 if EPS for 30 June 2012 exceeds EPS for 30 June 2011 by 10%
(v) Tranche 5 - On 1 July 2015 if EPS for 30 June 2013 exceeds EPS for 30 June 2012 by 10%
Where EPS does not exceed 10%, the performance rights will vest proportionally for each period from 0% where
EPS is 5% to 100% where EPS is 10%.
The rights expire on 24 December 2016 and are granted under the plan for no consideration.
Fair value of rights granted
The assessed fair value at grant date of rights granted during the year ended 30 June 2009 was $0.74 cents per
right. Fair values at grant date are independently determined using a Binomial Tree option pricing model that
takes into account the exercise price, the term of the rights, the impact of dilution, the share price at grant date
and expected price volatility of the underlying share, the expected dividend yield and the risk-free rate for the
term of the rights.
The model inputs for options granted during the year ended 30 June 2009 included:
exercise price: $Nil
(i)
(ii) grant date: 27 November 2008
(iii) expiry date: 24 December 2016
(iv) share price at grant date: $1.95
(v) expected price volatility of the company’s shares: 45.6%
(vi) expected dividend yield: 12.8%
(vii) risk-free interest rate: 5.25%
The expected price volatility is based on the historic volatility (based on the remaining life of the options),
adjusted for any expected changes to future volatility due to publicly available information.
The total number of rights issued under this plan to participating directors for the financial year ended 30 June
2016 was Nil (2015: Nil).
(b) Employee performance rights plan
Performance rights were granted to certain employees during the year under the Lycopodium Group
Performance Plan as approved by the Board on 3 October 2011. The rights were designed to give incentive to
the employees to provide dedicated and ongoing commitment and effort to the company and aligning the interest
of both employees and shareholders. None of the directors of Lycopodium Limited are eligible to participate in
this plan.
91
• 91
Notes to the Consolidated Financial Statement
30 June 2016 (continued)...............................
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
34 Share-based payments (continued)
(b) Employee performance rights plan (continued)
Fair value of rights granted
The assessed fair value at grant date of the rights granted during the year ended 30 June 2012 was $4.76 per
right. Fair values at grant date are independently determined using a Binomial Tree option pricing model that
takes into account the exercise price, the term of the rights, the impact of dilution, the share price at grant date
and expected price volatility of the underlying share, the expected dividend yield and the risk-free rate for the
term of the rights.
The model inputs for options granted during the year ended 30 June 2012 included:
exercise price: $Nil
(i)
(ii) grant date: 1 October 2011
(iii) expiry date: 30 September 2014
(iv) share price at grant date: $5.60
(v) expected price volatility of the company’s shares: 35.5%
(vi) expected dividend yield: 5.4%
(vii) risk-free interest rate: 4.75%
The expected price volatility is based on the historic volatility (based on the remaining life of the options),
adjusted for any expected changes to future volatility due to publicly available information.
The total number of rights issued under this plan to eligible participating employees for the financial year ended
30 June 2014 was Nil (2013: Nil).
All rights issued under this plan have been exercised during the financial year ended 30 June 2015.
(c) Senior manager share acquisition plan
The senior manager share acquisition plan was introduced in November 2009. Under the plan eligible senior
managers are provided with an interest free limited recourse loan for a period of 3 years to acquire shares in
Lycopodium Limited. The purchase of the shares will be done via the employee share trust. The loan will be
interest free if the participating senior manager stays with the group for more than 3 years. In the event the
participating senior manager leaves within 3 years, interest will be charged equal to market rate of interest that
would have accrued on the loan from the date of advance of the funds to the repayment date. Eligibility will be
decided by the board of Directors.
The value of the loan to each participating senior manager is based on the value of the shares allocated to the
respective senior manager. The shares are allocated at a 1 cent discount to the volume weighted average of the
prices at which the shares were traded on the ASX during the one week period up to and including the date of
allocation. During the financial year ended 30 June 2010, 607,500 shares were acquired on and off market.
The difference between the price of the shares acquired and the value of shares allocated to the participating
senior managers was expensed in the financial year ended 30 June 2010. This amounted to $125,855.
(d) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee
benefit expense were as follows:
Consolidated
2016
$
2015
$
Rights issued under the Employee Performance Rights Plan
-
61,958
92 • Lycopodium Limited Annual Financial Report 2016
92
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
35 Parent entity financial information
(a) Summary financial information
The individual financial report for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Contributed equity
Share-based payments
Retained earnings
Profit for the year
Total comprehensive income
2016
$
2015
$
14,956,881
11,100,144
30,547,721
30,640,308
45,504,602
41,740,452
5,000,827
2,615,285
31,288
40,492
5,032,115
2,655,777
40,472,487
(121,417,461)
39,084,675
(117,254,025)
20,823,772
259,037
19,389,678
20,823,772
259,037
18,001,866
40,472,487
39,084,675
1,983,798
9,502,165
1,983,798
9,502,165
(b) Guarantees entered into by the parent entity
In 2013, the parent entity entered into an arrangement with a financier for a standby credit facility of $12.5m. In
return, the parent entity and Lycopodium Minerals Pty Ltd jointly executed a cross guarantee and indemnity as
security for the facility. As at balance date, this facility has been withdrawn.
In 2016, the parent entity entered into an arrangement with a insurer for a standby insurance bonding facility of
$15.0m. In return, the parent entity and Lycopodium Minerals Pty Ltd jointly executed a cross guarantee and
indemnity as security for the facility.
Lycopodium Limited
Notes to the consolidated financial statements
30 June 2016
(continued)
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2016 or 30 June 2015.
35 Parent entity financial information (continued)
(d) Contractual commitments for the acquisition of property, plant or equipment
The parent entity did not have any contractual commitments for the acquisition of property, plant and equipment
as at 30 June 2016 or 30 June 2015.
• 93
93
94
Directors Declaration
Lycopodium Limited
Directors' declaration
Lycopodium Limited
30 June 2016
Directors' declaration
30 June 2016
In the Directors' opinion:
In the Directors' opinion:
(a)
(a)
(b)
(b)
the financial report and notes set out on pages 30 to 94 are in accordance with the Corporations Act 2001,
including:
the financial report and notes set out on pages 30 to 94 are in accordance with the Corporations Act 2001,
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
(i)
including:
professional reporting requirements, and
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
(i)
(ii)
giving a true and fair view of the group's financial position as at 30 June 2016 and of its
professional reporting requirements, and
performance for the year ended on that date, and
giving a true and fair view of the group's financial position as at 30 June 2016 and of its
(ii)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
performance for the year ended on that date, and
become due and payable.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Note 1(a) confirms that the financial report also complies with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Note 1(a) confirms that the financial report also complies with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
The Directors have been given the declarations by the Managing Director and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors.
This report is made in accordance with a resolution of Directors.
Peter De Leo
Managing Director
Peter De Leo
Managing Director
Perth
15 September 2016
Perth
15 September 2016
95
94 • Lycopodium Limited Annual Financial Report 2016
95
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LYCOPODIUM LIMITED
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
Level 1
PO Box 570
10 Kings Park Road
West Perth WA 6872
West Perth WA 6005
T +61 8 9480 2000
Correspondence to:
F +61 8 9322 7787
PO Box 570
E info.wa@au.gt.com
West Perth WA 6872
W www.grantthornton.com.au
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
Report on the Financial Report
We have audited the accompanying financial report of Lycopodium Limited (the Company),
Auditor’s Independence Declaration
To the Directors of Lycopodium Limited
which comprises the consolidated balance sheet as at 30 June 2016, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
changes in equity and consolidated statement of cash flows for the year then ended, notes
auditor for the audit of Lycopodium Limited for the year ended 30 June 2016, I declare that,
comprising a summary of significant accounting policies and other explanatory information
to the best of my knowledge and belief, there have been:
and the directors’ declaration of the consolidated entity comprising the Company and the
entities it controlled at the year’s end or from time to time during the financial year.
a
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
Directors’ Responsibility for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report
no contraventions of any applicable code of professional conduct in relation to the
b
that gives a true and fair view in accordance with Australian Accounting Standards and the
audit.
Corporations Act 2001. The Directors’ responsibility also includes 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.
The Directors also state, in the notes to the financial report, in accordance with Accounting
Standard AASB 101 Presentation of Financial Statements, the financial statements comply with
International Financial Reporting Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
M J Hillgrove
Partner - Audit & Assurance
Perth, 15 September 2016
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
Grant Thornton Audit Pty Ltd ACN 130 913 594
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
scheme applies.
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
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• 95
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s Opinion
In our opinion:
a
the financial report of Lycopodium Limited is in accordance with the Corporations Act
2001, including:
i
ii
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
b
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 18 of the directors’
report for the year ended 30 June 2016. The Directors of the Company are responsible for
the preparation and presentation of the Remuneration Report in accordance with section
300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
96 • Lycopodium Limited Annual Financial Report 2016
Auditor’s Opinion on the Remuneration Report
In our opinion, the Remuneration Report of Lycopodium Limited for the year ended 30
June 2016, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M J Hillgrove
Partner - Audit & Assurance
Perth, 15 September 2016
• 97
Shareholder Information
......................................................
The shareholder information set out below was applicable as at 2 September 2016.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
There were 167 holders of less than a marketable parcel of ordinary shares.
B. Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Lycopodium Limited
Shareholder information
30 June 2016
Total Holders
376
493
143
151
25
1,188
Name
1 Reesh Pty
2 HSBC Custody Nominees (Australia) Limited
3 Luala Pty Ltd
4 Caddy Fox Pty Ltd
5 Selso Pty Ltd
6 Accede Pty Ltd
7 JP Morgan Nominees Australia Limited
8 Citicorp Nominees Pty Ltd
9 De Leo Nominees Pty Ltd
10 Citicorp Nominees Pty Ltd (Colonial First State Inv A/C)
11 Mr David James Taylor
12 Mr Peter De Leo & Mrs Tiana De Leo
13 Botech Pty Ltd
14 Lycopodium Share Plan Pty Ltd
15 Kensington House Nominees
16 Dr Gregory O'Neil
17 Rubi Holdings Pty Ltd
18 Nancris Pty Ltd
19 Tobaka Pty Ltd
20 Mr Timothy & Mrs Lisa Kelly (The Kelly Superannuation Fund)
Ordinary shares
Number held
Percentage of
Units
9,104,637
7,367,649
3,167,332
2,612,332
2,058,148
1,942,332
1,223,191
846,258
780,366
687,068
484,389
383,405
305,405
297,500
247,635
195,174
175,000
175,000
142,291
139,737
32,334,849
22.91
18.55
7.97
6.58
5.18
4.89
3.08
2.13
1.96
1.73
1.22
0.96
0.77
0.75
0.62
0.49
0.44
0.44
0.36
0.35
81.38
98
98 • Lycopodium Limited Annual Financial Report 2016
C. Substantial holders
Substantial holders in the company are set out below:
Name
1 Reesh Pty Ltd
2 HSBC Custody Nominees (Australia) Limited
3 Luala Pty Ltd
4 Caddy Fox Pty Ltd
5 Selso Pty Ltd
D. Voting rights
Lycopodium Limited
Shareholder information
30 June 2016
(continued)
Number
held
Percentage of
Units
9,104,637
7,367,649
3,167,332
2,612,332
2,058,148
22.91
18.55
7.97
6.58
5.18
The voting rights attaching to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
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Corporate Directory
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Directors
Lycopodium Limited
Corporate directory
Michael John Caratti
Peter De Leo
Rodney Lloyd Leonard
Robert Joseph Osmetti
Lawrence William Marshall
Bruno Ruggiero
Steven John Micheil Chadwick
Company Secretary
Keith John Bakker
Registered and Principal Office
Share Registry
Lawyers to the Company
Auditor
Level 5, 1 Adelaide Terrace
East Perth WA 6004
Australia
T: +61 (0)8 6210 5222
www.lycopodium.com.au
Computershare Investor Services Pty Limited
Level 11, 172 St George's Terrace
Perth WA 6000
T: +61 (0)8 9323 2000
www.computershare.com.au
DLA Piper Australia
Level 31, 152-158 St George's Terrace
Perth WA 6000
T: +61 (0)8 6467 6000
www.dlapiper.com
Grant Thornton Audit Pty Ltd
Level 1, 10 Kings Park Road
West Perth WA 6005
T: +61 (0)8 9480 2000
www.grantthornton.com.au
100 • Lycopodium Limited Annual Financial Report 2016
100
Corporate Directory
Directors’ Report
Corporate Governance Statement
Financial Report
- Consolidated Statement of Profit or Loss
and Other Comprehensive Income
- Consolidated Balance Sheet
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
- Notes to the Consolidated Financial Statement
Directors Declaration
Audit Report
Shareholder Information
Corporate Directory
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Lycopodium Limited Annual Financial Report 2016
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Level 5, 1 Adelaide Terrace
East Perth Western Australia 6004
T: + 61 (0)8 6210 5222
www.lycopodium.com.au