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A N N U A L F I N A N C I A L R E P O R T
2 0 1 8
Level 5, 1 Adelaide Terrace
East Perth Western Australia 6004
T: + 61 (0)8 6210 5222
www.lycopodium.com.au
Contents
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
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24
31
32
33
34
- Notes to the Consolidated Financial Statement
35
Directors’ Declaration
Independent Auditor’s Audit Report
to the members
Shareholder Information
Corporate Directory
94
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101
This financial report is the
consolidated financial report of the
group consisting of Lycopodium
Limited and its subsidiaries.
The financial report is presented in
the Australian currency.
Lycopodium Limited is a company
limited by shares, incorporated and
domiciled in Australia. Its registered
office and principal place of business
is:
Lycopodium Limited
Level 5, 1 Adelaide Terrace
East Perth WA 6004
A description of the nature of the
group’s operations and its principal
activities is included in the directors’
report on page 1, which is not part of
this financial report.
The financial report was authorised
for issue by the Directors on
20 September 2018. The Directors
have the power to amend and
reissue the financial report.
Through the use of the internet,
we have ensured that our corporate
reporting is timely and complete.
All press releases, financial reports
and other information are available
at our Shareholders’ Centre on our
website:
www.lycopodium.com.au
Lycopodium Annual Finanical Report 2018
Lycopodium Annual Financial Report 2018
Directors’ Report
Lycopodium Annual Financial Report 2018 • 1
LycopodiumLimitedDirectors'report30June2018Directors'reportYourDirectorspresenttheirreportonthegroupconsistingofLycopodiumLimitedandtheentitiesitcontrolledattheendof,orduring,theyearended30June2018.DirectorsThefollowingpersonswereDirectorsofLycopodiumLimitedduringthewholeofthefinancialyearanduptothedateofthisreport:MichaelJohnCarattiPeterDeLeoRodneyLloydLeonardRobertJosephOsmettiBrunoRuggieroPeterAnthonyDawsonLawrenceWilliamMarshallStevenJohnMicheilChadwickPrincipalactivitiesTheprincipalactivitiesofthegroupduringthefinancialyearconsistedofengineeringconsultinginthemining,metallurgical,railandmanufacturingindustries.Therewerenosignificantchangesinthenatureofthegroup'sprincipalactivitiesduringthefinancialyear.DividendsDividendspaidtomembersduringthefinancialyearwereasfollows:2018$2017$Finalfullyfrankeddividendfortheyearended30June2017of9.0cents(2017:4.0cents)perfullypaidsharepaidon10October2017(2017:13October2016).3,575,9141,589,295Interimfullyfrankeddividendfortheyearended30June2017of12.0cents(2017:9.0cents)perfullypaidsharepaidon10April2018(2017:13April2017)4,767,8853,575,9148,343,7995,165,209In 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 $7,151,827 (18.0 cents per fully paid share) to be paid on 12 October 2018 out of retained earnings at 30 June 2018 (2017: $3,575,914). This brings the total dividend declared for the year ended 30 June 2018 to 30.0 cents (2017: 18.0 cents).Review of operationsLycopodium has had a busy and successful year. Operationally we have delivered five West African gold projects on time, on budget and on specification. Financially we have delivered a good profit result, added to our already strong balance sheet and paid a fully franked dividend of 30 cents per share to shareholders.Above all else, we have achieved these results while keeping our people safe and healthy.We continue to be flexible in the form of contract we use to deliver our services. Of the five projects commissioned this financial year, two were delivered under EPC contracts while the remaining three were delivered under EPCM contracts.EPC•MakoProjectforToroGoldLtd(Toro)inSenegal•SissinguéProjectforPerseusMiningLimited(Perseus)inCôted'IvoireEPCM•HoundéProjectforEndeavourMiningCorporation(Endeavour)inBurkinaFaso•NatougouProjectforSEMAFOInc.(SEMAFO)alsoinBurkinaFaso;and•FekolaProjectforB2GoldCorporation(B2Gold)inMali.1 Directors’ Report (continued)
2 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Review of operations (continued)Looking forward for the next year we have kicked off two new greenfield gold projects - the Ity Project in Côte d'Ivoire for Endeavour and the Waghnion Project for Teranga Gold Corporation in Burkina Faso. We are also completing the Karma Upgrade for Endeavour in Burkina Faso. Subject to market conditions discussed below, our pipeline looks reasonable for 2018/19.The delivery of major West African gold projects in the past year masks the diversity of our business. As examples of this diversity:•we have continued to provide EP (Engineering and Procurement) services at the Cobré Panama Projectfor First Quantum Minerals Ltd (FQM), the largest greenfield copper project in the world.•we are progressing the Toka Tindung Expansion in North Sulawesi for PT Arci Indonesia.•we have designed, delivered and are currently commissioning the Final Recovery Plant on theMontepuez Ruby Mine in Mozambique for Gemfields plc.•we continue to provide a broad range of specialist diamond processing and engineering services to DeBeers Group (De Beers) in South Africa, Botswana and Namibia.•we are jointly preparing the Pre-feasibility Study for the Toliara Minerals Sands Project for Base MineralsLimited in Mozambique.•we are undertaking studies and delivering projects in battery minerals including graphite, lithium, cobaltand nickel.4In addition, our infrastructure services continued at a steady rate across the year with a number of material briefs awarded and executed. These included the Stockingbingal to Parkes study package on the Australian Inland Rail Project, study services on the Pipers Flat Coal Unloader for Energy Australia, ongoing professional services as part of the Main Roads of Western Australia Project Management Panel and design services on BHP’s Jimblebar Stretch Assist Project.In our process industries business we executed the design and construct contract for a Cotton Seed De-linting package in NSW and the EPC work associated with the Mt Piper Air Cannon Project.This is a broad portfolio of commodities, geographies and sectors within which we operate.Our staff numbers have reduced modestly over the year reflecting the rise and fall associated with our project delivery activities. It is with great pride that we can report that all our projects and studies are being delivered very well across the business and as always that is a reflection of our great people and teams.Full Year ResultsFor the financial year ended 30 June 2018, Lycopodium derived revenues of $194.6 million and a net profit after tax of $18.2 million.The Directors have resolved to pay a final dividend of 18 cents per share, which is in line with the dividend policy. The total dividend for the year is 30 cents per share fully franked.2 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 3
LycopodiumLimitedDirectors'report30June2018(continued)Review of operations (continued)OutlookGeneral viewThe markets within which we operate are in a relatively steady state. We are always adapting to changes in mining legislation, tax structures and security issues in the normal course of our business. Subject to any material impacts associated with trade wars and tariffs on commodities we expect this to continue. In practical terms a steady state translates to a reasonable level of work and opportunity in the market which we expect will translate to reasonable financial returns for the business.ResourcesThe gold price this time last year sat at around US$1,310/oz, peaked at over US$1,360/oz and subsequently weakened to US$1,173/oz in mid-August 2018 before rallying to approximately US$1,200/oz in mid-September.Although this has not had a material effect on our level of activity on gold projects to date, we expect we will see some future delay to near term gold related prospects whilst project owners deal with more arduous routes to project funding.At time of writing the copper price is also down 10% from this time last year yet the medium to long term outlook for copper sees a production deficit which will exert an upward influence on the price. This has been the general story across many of the commodities with which Lycopodium has historically worked. The result is that whilst there is significant activity in the sector the activity is predominantly in the development phase of the existing project order book. Timeline slippage is being seen in those projects which are at the pre-development and funding phase making predicting project award dates somewhat difficult. Notwithstanding the steady outlook for those more traditional mineral resources we have during the year made significant inroads into the battery metals market having taken on and executed studies and projects in lithium, cobalt, graphite and nickel.Process IndustriesIn general we are seeing an increase in engineering services in the chemical processing sector and the water, waste water and waste management sectors, which has offset the decline being experienced in the food and beverage sector and the pharmaceuticals sectors.InfrastructureWe have seen a steadily improving level of activity within the sectors we service. During the year we have strengthened our position on the east coast of Australia in Rail Infrastructure Management (RIM) services particularly in NSW and have also continued to build our presence in Victoria. We secured a key package on the Inland Rail Project for Australian Rail Track Corporation (ARTC) and a significant multiyear contract with Pacific National Corporation (Pacific National) which should benefit our ability as a business to secure similar future briefs.Corporate overviewDuring the course of the year we undertook a thorough strategic planning process involving the full leadership team across our global business. This has culminated in the development of a strategic plan and a series of strategic initiatives to take the business forward.The outcome of this work can be summarised as:•Remainingfocussedonsuretyofoutcomeforourclients,shareholdersandstaff.•Enhancingourtraditionofinnovationindesignandinnovationinimplementationbyestablishinganinnovationcentrewithinthebusinessgiventhebreadthofchangesnowconfrontingallofus.•Pursuingstrategiesthathavethepotentialtobroadenourofferinginthemarket.AllofthisdeliveredfromourhubsinAustralia,CanadaandSouthAfricasupportedbyourManilabasedoperation.3 Directors’ Report (continued)
4 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Review of operations (continued)A key initiative reported last year was the establishment of Mondium Pty Ltd (Mondium). This business is a standalone joint venture company owned by Lycopodium and Monadelphous Ltd, a highly respected engineering and construction company listed on the ASX.Mondium has been established to service the mineral resources market in Australia and selected other regions by delivering projects on an EPC or Lump Sum Turnkey basis. During the past year Mondium secured a number of EPC briefs and successfully completed its first project at Talison Lithium’s Greenbushes site in Western Australia. This team has continued to build a reputation for delivering quality outcomes and although the number of large EPC opportunities is low we remain highly confident that Mondium will be successful in developing into a significant asset for Lycopodium.Growing our business, adapting and embracing change, responding to new market conditions - these are challenges to be addressed by Lycopodium’s people. Developing our people so that they, individually, are able to reach their full potential remains at the very core of Lycopodium’s business and culture.Operational highlightsResourcesWe have a world class skill set within our business.•Gold - we continued building our track record as the preeminent international engineer for gold projects inWest Africa•Copper - we are providing engineering and procurement services on the largest greenfield copper projectunder construction in the world (Cobre Panama)•Diamonds - we continue to deliver leading edge diamond process and engineering services to key clientsincluding De Beers.•Comminution - we provide world-leading comminution circuit modelling, design, commissioning andoptimisation services through our wholly owned subsidiary, Orway Mineral Consultants (OMC).We have worked hard to deliver bespoke solutions for our clients, working with them to resolve problems unique to their own projects and in so doing to increase the probability of project development or alternatively, to de-risk project delivery. The following are a few highlights from the year:Cobré Panama Project - FQM -PanamaWehavebeenactiveonthisprojectsince2014.OneoftheuniquefeaturesofthisprojectisthatFQMhasaphilosophyof,andaverystrongcapabilityin,self-performingandmanagingprojectdelivery.Holdingtotheseprinciplesforaprojectofthismagnitude(85Mtpa)isveryunusualandacredittothestrengthoftheFQMorganisation.LycopodiumprovidedtheEPcomponentoftheprocessfacilityandhasworkedverymuchhandinglovewithFQMthroughoutthepast4years.TheCobréProjectrepresentsacontinuationofalongrelationshipwithFQMthatcommencedwiththeKMTProjectin2008andhasnowcontinuedacrosssixprojects,includingCobré.SissinguéIn 2015 Lycopodium completed the Feasibility Study, a Mill Option Study and subsequently the Front End Engineering Design (FEED) for the Sissingué Project of Perseus. Lycopodium provided EPC services to deliver the process plant and related project infrastructure. The project involved a standard 1 Mtpa gold plant however was unique in that it was tailored as a fit for purpose design to suit the relatively short term life of mine.Typical of Lycopodium plants the Sissingué process plant ramped up to nameplate production levels quickly, meeting or exceeding client expectations.Sissingué is a transformative asset for Perseus, making the company a multi-mine, multi-jurisdiction gold producer. Perseus is now pursuing the development of the larger Yaouré Project in neighbouring Côte d'Ivoire. Lycopodium has been awarded the FEED for this project.4 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 5
LycopodiumLimitedDirectors'report30June2018(continued)Reviewofoperations(continued)NatougouSEMAFO’sNatougouProjectislocated320kmfromthecapitalofOuagadougou,inthesoutheastofBukinaFaso.LycopodiumcompletedapositiveFeasibilityStudyinFebruary2016whichconfirmedtheeconomicviabilityofanopenpit,carboninpulpproject.InMay2016wewereawardedthecontractsfortheprovisionofoffshoreEP(engineering,procurementandprojectmanagement)services,andonshoreCM(fieldengineering,constructionmanagementandcommissioning)servicesforthegreenfieldprocessplantandassociatedfacilities.TheprocessplantconcreteworkscommencedinApril2017,plantconstructionworkwascompletedinMaywiththewetcommissioningcompletedinJune2018.ChallengesuniquetoNatougouincludedtheremotenessofthesitebeinginthefareastofBurkinaFasoaswellastherelativelackoflocalskilledandsemi-skilledlabourresourcesavailableinsupportoftheconstructionefforts.HoundéInApril2016,LycopodiumwasawardedtheEPCMcontractforthedeliveryofEndeavour’s90%-ownedHoundéprojectinBurkinaFaso.Withaninitialcapitalcostestimatedat$328million,the3Mtpaprojectcomprisedthedeliveryofagoldprocessingplantandassociatedinfrastructure,includingafullyintegratedowneroperatedminingfleet.Havingundertakenthedetailedfeasibilitystudyandparticipatedinprojectoptimisationreviews,wewereabletomovequicklyfromstudytodetailedengineering,withsiteactivitiesquicklyfollowingon.TheprojectwasinterestinginthatEndeavourself-performedtheprojectinfrastructure,whileLycopodiumfocussedprimarilyontheprocessingfacilityandmineservicesareas.TheprojectdeliverystrategyworkedwellandwiththefirstgoldpouroccurringinOctober2017.Endeavourofficiallyannouncedtothemarketsthattheminehadbeensuccessfullybuilt,aheadofscheduleandbelowbudget.Nameplatecapacitywasachievedwithinweeksfollowingtheintroductionoforeintothemill.Lycopodium’sinvolvementinthedevelopmentofthisprojectwasacontinuationofasuccessfulassociationwithEndeavouracrosstheNzemaProjectinGhana,AgbaouProjectinCôted'IvoireandKarmaExpansionProjectinBurkinaFaso.ThisassociationcontinueswiththecurrentinvolvementwiththeItyProjectinCôted'Ivoire,aprojectsimilarinscaletotheHoundéProject.FekolaThis reporting year Lycopodium continued working with B2Gold on the commissioning of the Fekola mine in south western Mali, some 400 km west of the capital Bamako. Overall Lycopodium scope of services included the process design, detailed engineering and design of the new facilities; delivering procurement services for equipment and materials purchases as well as providing a team of engineers who were integrated with B2Gold’s construction and commissioning teams to deliver site technical and scheduling support.The process plant was originally designed to process nominally 4 Mtpa primary run of mine ore however in 2016 B2Gold announced that, as a result of positive drill results and exploration potential, they had decided to expand throughput at Fekola and proceed with an expansion of the mill. Design factors built into the Optimised Feasibility Study by Lycopodium / B2Gold included 5 Mtpa assumptions for plant design, general infrastructure and tailings dam design and location, thus enabling ore throughput capacity to reach up to 5 Mtpa from the onset of initial production.Construction of the project started in February 2015 and in November 2017 B2Gold announced that Fekola had achieved commercial production, one month ahead of the revised schedule and four months ahead of the schedule announced in the Optimised Feasibility Study. Production ramp-up to design throughput was achieved on schedule and B2Gold reports that plant operation continues to exceed both throughput and gold recovery nameplate design.5 Directors’ Report (continued)
6 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Reviewofoperations(continued)Lycopodium’sinvolvementinthedevelopmentofthisprojectwasacontinuationofasuccessfulassociationwithB2GoldfollowingonfrompreviousinvolvementontheirOtjikotoProjectinNamibiaandMasbateProjectinthePhilippines.Thisassociationcontinueswiththecurrentinvolvementwiththeexpansionprojects/studiesforboththeMasbatemineandtheElLimonmineinNicaragua.MakoInAugust2016,wewereawardedtheEPCcontractforthedeliveryoftheMakoProjectineasternSenegal.MakoistheflagshipassetofToro,aprivateexploration,developmentandproductioncompanyfocusedonWestAfrica.TheMakoProjectisuniqueinthatthedepositcomprisesaparticularlyhardandabrasiveore.FollowingextensivetestworkourmodellingofthecomminutioncircuitshowedthatanoptimumgrindcouldbeachievedonthisveryhardorewithasinglestageSAGmill,anaggressivecircuitbutonedeliveringsignificantcapitalandoperatingcostsavingstoToro.Followingcompletionofthepre-feasibilityanddefinitivestudyphasesin2015and2016,Lycopodiumsuccessfullydeliveredthecontractscope(treatmentplant,mineservicesarea,tailingsmanagementfacility,riverabstractionfacility,rawwaterstoragedam,campandsupportinfrastructure)onanEPCbasis.Inaddition,theprojectbordersaUNESCOlistedparksothatveryhighenvironmentalprotectionstandardswereimplementedindesignandconstruction.TheMakominepoureditsfirstgoldinJanuary2018,withtheprojectcominginbelowbudgetandaheadofschedule.Theprojecthascontinuedtooperateatnameplatecapacityanddesignrecoveriessincecommissioning.XRTTechnologyAcquisitionProject,VenetiaDiamondMinesTheVenetiadiamondmine,whichopenedin1992,isDeBeersflagshipoperationinSouthAfrica.Itisthecountry’slargestdiamondproducerandyieldsapproximately40%ofSouthAfrica’sannualdiamondproduction.DeBeersisnowintheprocessofdevelopinganundergroundminingoperationatVenetiaasitisapproachingthedepthlimitofopen-pitoperations.Theundergroundmineisexpectedtocommenceoperationin2022andduringitslifetimewilltreat132milliontonnesoforecontaininganestimated94millioncarats.Theundergrounddevelopmentisexpectedtoextendthelifeofthemineto2046.Lycopodiumhasbeeninvolvedinsuccessfullyimplementingvariousplantimprovementprojectsattheminesince2011,specificallyintheReconcentrateAreaaswellasintheRecoveryPlant.Wewereengagedattheendof2017onacostreimbursablebasistoundertakethedetaildesignofanX-RayTransmission(XRT)facilitytobeincorporatedintotheDenseMediaSeparationconcentratestream,inordertoalleviatethebottle-neckthathighyieldingmaterialcreatesinthefinalRecoveryPlant.Theprojectisscheduledforcompletionattheendof2018.AquariumIntegratedSortHouse,JwanengMine,BotswanaTheJwanengminelocatedinSouthernBotswanaistherichestdiamondmineintheworldandisownedbyDebswana(apartnershipbetweenDeBeersandtheGovernmentofBotswana).Debswanacurrentlyhasanold,stand-aloneSorthousefacilitylocatedatJwanengthatishandlingconcentrateproducedfromalloftheDebswanamines.AdecisionwasmadetorelocateandintegratethisfinaldiamondsortingfacilityintotheexistingfullyintegratedSorthousebuilding(locatedatthemine).TheobjectiveofthenewSorthousefacilityistohandleupto50millioncaratsofdiamondsperannum.DebswanaengagedLycopodium,throughourlocalBotswanaoffice,onacostreimbursablebasistoundertakethedetaileddesignofthenewSorthouse.Theprojectisscheduledforcompletionattheendof2018.6 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 7
LycopodiumLimitedDirectors'report30June2018(continued)Reviewofoperations(continued)ProcessIndustriesLycopodium’sProcessIndustriesgroupdeliversprocessdesign,engineeringandprojectdeliveryservicesinspecialtyareassuchaschemicals,pharmaceuticals,foodandbeveragerenewablesandwater/wastewatersectors.Severalhighlightsinclude:DensoBitumenMixingFacilityUpgradeDensohasrecentlyundertakentherelocationofitsmanufacturingoperationstoanewpurposebuiltfacilityinCampbellfield,Victoria.Aspartofarelocationtothenewfacility,Densotooktheopportunitytoupgradeitsbitumenstorageandmanufacturingcapability.LycopodiumassistedDensowiththedesignandconstructionofthenewproductionfacilityincludingthedetaildesignoftheproductblendingtanks,heating,agitationandproducttransfersystems.Theprojectwasdeliveredonagreenfieldsiteunderalumpsumcontract.Theprojectwasdeliveredonschedulewithnosafetyorenvironmentalincidents.PfizerAsepticManufacturingFacilityPfizeristhesecondlargestpharmaceuticalscompanyonaglobalbasis.Lycopodiumhasbeenprovidingon-goingprojectengineeringsupporttoPfizeratitsPerthAsepticManufacturingFacilityforseveralyears.Thefacilitymanufacturesplasticvials(Cytosafe®)containingliquidoncologymedicines,andplasticampoules(Sterisafe®)containingsterilesolutions.AltonaSaltReductionPlantLycopodiumdesignedandconstructedonaD&Cbasisanewhydrochloricacid(HCl)dosingsystemfordeliveryofHClliquidtoreverseosmosisunitsattheAltonaSaltReductionPlantofVictorianGovernment’sCityWestWater.Theprojectwasdeliveredonabrownfieldsiteunderalumpsumcontractwithnointerruptionorimpacttoplantoperations.Wewereresponsibleforthedesignoftheconcretebundarea,newpipebridge,integrationofpipeworkandtie-intotheexistingplantincludinginstallingnewpipeworktoexistingtankerunloadingarea.EcoMagMagnesiumSaltRecoveryProjectLycopodiumwasrecentlyawardedadetailedfeasibilitystudyforEcoMagLimitedbasedonrecyclingbitternsgeneratedbysea-saltproductiontoextracthighpuritymagnesiumcompounds.InfrastructureLycopodium’sInfrastructuregroupprovidesservicesacrossthegeneralinfrastructure,transport(roadandrail)andassetmanagementsectorswiththefollowinghighlights:JimblebarMobileMaintenanceFacilityBGCContractingPtyLtd(BGC)isoneofAustralia’slargestprivateminingandconstructioncontractorsandprovidesminingandconstructionservicesacrosstheresources,energyandinfrastructuresectors.BGCwasengagedtoundertakethedesignandconstructionofnewandrefurbishedMobileMaintenancefacilitiesattheJimblebarMine,oneoftheBHPBillitonLimited(BHP)ironoresitesinthePilbararegionofWesternAustralia,some40kmeastofNewman.TheMobileMaintenancefacilityupgradewillsupportexpansionofthemine’sfleetcapacity.Previously,LycopodiumdesignedthewarehouseandworkshopattheSinoIronProject,whichwasultimatelyconstructedbyBGC.Recognisingthequalityofdesignandsupportprovidedonthatproject,BGCinvitedLycopodiumtotenderandsubsequentlyawardeddesignservicesfortheJimblebarproject.PacificNationalRIMServicesPacificNationalCorporation(PacificNational)isAustralia’slargestrailprovider,haulingcoal,steel,automotive,agricultural,mineralsandcontainerisedfreighttoallmainlandstatesandterritoriesinAustralia.LycopodiumwasengagedbyPacificNationaltoprovideRIMservices,ona3yearplus1yearagreementtoinspect,certifyandmanagedefectsat62sitesAustraliawide.InspectionsatthesesitescommencedinApril2018requiringsubstantialpriorplanningandgroundwork.7 Directors’ Report (continued)
8 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Reviewofoperations(continued)RIMservicescompriseprocessesandsystemstoensureinfrastructureisfit-for-purpose,abletosupportsafeandefficientoperations.Inadditionandmostimportantly,theserviceensuresriskismanagedinaccordancewiththerequirementsofrailsafetylegislation.Sincecommencing,PacificNationalhasexpandedourscopetoincludederailmentinvestigations,specialoradhocinspectionsandgeotechnicalinvestigations.HSEandCommunityLycopodium’sprimaryfocusisonthehealthandsafetyofitsstaffandallpersonnelworkingonitsprojects.Wecontinuetosetandachieveahighstandardofhealthandsafetyacrossallourprojectsandgiventhehighlyinternationalnatureofouractivitieswehaveworkedproactivelytoensurethesecurity,safetyandwellbeingofourpersonnelwherevertheymaybe.In2017/18therewere4.14millionmanhoursworkedacrosstheLycopodiummanagedprojectswithaLTIFRof0.23againstan11.5constructionindustryaverage.Onthecommunityside,LycopodiumcontinuedtofocusoneducationasameansofstrengtheningcommunitiesandinlinewiththisremainedanactivesponsorandsupporteroftheClontarfFoundation,acharitablenot-for-profitorganisationinAustraliaimprovingtheeducation,discipline,self-esteem,lifeskillsandemploymentprospectsofyoungAboriginalmen.SupportwasalsoprovidedaroundakeyannualeventfortheMurlpirrmarraConnection,anot-for-profitorganisationthatexiststoprovideAboriginalyouthintheremotecommunitiesofWiluna,LeonoraandsurroundingregionsinWesternAustralia,witheducationalopportunities.Intermsofindustryengagement,LycopodiumbecameaplatinumsponsoroftheAustralianAfricanMiningandEnergyGroupthepeakbodyrepresentingAustraliancompaniesengagedinthedevelopmentofAfrica’sresourceindustry.TheCompanyalsocontinuedtoprovidematerialsupporttoanumberofcharitableinitiativeschampionedbystaff.AcknowledgementTheBoardofDirectorsrecognisesthattheCompany’sabilitytocontinuedeliveringworldclassservicestoourclientsandtomaintainandenhancethecompany’sperformanceandcapabilityisdependentonthecontinuedcommitmentandsupportofourpersonnel.OnbehalfofmyfellowDirectorsItakethisopportunitytosincerelythankallpersonnelfortheirhighlyvaluedcontribution.WewouldalsoliketothankourclientsfortheircontinuedtrustinLycopodiumtodeliverservicestotheirprojectsandstudies.Wewillasalwaysworkhardtomaintainthesevaluedrelationships.8 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 9
LycopodiumLimitedDirectors'report30June2018(continued)Reviewofoperations(continued)Asummaryofconsolidatedrevenuesandresultsfortheyearbysignificantreportingsegmentsissetoutbelow:SegmentrevenuesSegmentresults2018$2017$2018$2017$Corporateservices14,216,66514,854,323(378,949)788,088Minerals-AsiaPacific117,526,791137,132,98418,004,6499,080,813Minerals-NorthAmerica17,163,30321,649,5881,167,134(746,232)Minerals-Africa32,692,36341,116,8561,705,232984,779Projectservices-Africa22,382,75416,834,8044,559,8802,784,941IndustrialProcess9,840,9544,179,161(76,389)(199,343)Other24,019,29421,989,9691,403,9661,877,816Intersegmenteliminations(43,273,233)(41,141,243)--Goodwillimpairment--(1,095,048)(263,242)Total194,568,891216,616,44225,290,47514,307,620Incometaxexpense(6,957,088)(3,934,091)Profitfortheyear18,333,38710,373,529Less:Profitattributabletonon-controllinginterest(163,201)(81,446)ProfitattributabletoownersofLycopodiumLtd18,170,18610,292,083MatterssubsequenttotheendofthefinancialyearSinceyearendthedirectorshaverecommendedthepaymentofafinaldividendonordinarysharesinrespectofthe2018financialyear.Thetotalamountofdividendis$7,151,827whichrepresentsafullyfrankeddividendof18.0centsperfullypaidordinaryshare.Withtheexceptionoftheabove,noothermatterorcircumstancehasarisensince30June2018thathassignificantlyaffected,ormaysignificantlyaffect:(a)thegroup'soperationsinfuturefinancialyears,or(b)theresultsofthoseoperationsinfuturefinancialyears,or(c)thegroup'sstateofaffairsinfuturefinancialyears.LikelydevelopmentsandexpectedresultsofoperationsThegroupwillcontinuetoprovideengineeringconsultancyservicesasdetailedabove.RefertotheReviewofOperationssectionwithintheDirectors'Reportforinformationregardingthelikelydevelopmentsandexpectedresults.EnvironmentalregulationThegroup'soperationsarenotsubjecttosignificantenvironmentalregulationunderalawoftheCommonwealthorofaStateorTerritoryinrespectofitsconsultingactivities.9 Directors’ Report (continued)
10 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)InformationonDirectorsMichaelJohnCarattiBE(Elec)(Hons).Non-executiveChairman.Age68.ExperienceandexpertiseFormerManagingDirectorofLycopodiumMineralsPtyLtd,MrCarattihasover40yearsexperienceinthemineralprocessingindustryandhashadamajorroleinthedevelopmentofthegroup'sriskmanagementandqualitycontrolprogrammes.MrCarattiisaDirectorofOrwayMineralsConsultants(WA)PtyLtd.SpecialresponsibilitiesChairmanoftheBoard.ChairmanoftheCorporateGovernanceCommittee.ChairmanoftheRemunerationCommittee.Interestsinsharesandoptions9,104,637ordinarysharesofLycopodiumLimited.Formerdirectorshipsinthelast3yearsNone.PeterDeLeoBE(Civ)CPEngFIEAust.ManagingDirector.Age52.ExperienceandexpertiseMrDeLeohasover29yearsexperienceintheconstructionandengineeringfields.MrDeLeoistheManagingDirectorofLycopodiumLimitedandaNon-executiveDirectorofMondiumPtyLtd.SpecialresponsibilitiesMemberoftheCorporateGovernanceCommittee.MemberoftheAuditCommittee.Interestsinsharesandoptions1,171,711ordinarysharesofLycopodiumLimited.Formerdirectorshipsinthelast3yearsNone.RodneyLloydLeonardBE(Hons),MSc,MAusIMM.ExecutiveDirector.Age57.ExperienceandexpertiseMrLeonardhasinexcessof30yearsexperienceinthemineralprocessingindustryandistheManagingDirectorofLycopodiumMineralsPtyLtdandaNon-executiveDirectorofADPHoldings(Pty)Limited.SpecialresponsibilitiesMemberoftheCorporateGovernanceCommittee.MemberoftheAuditCommittee.Interestsinsharesandoptions2,154,215ordinarysharesofLycopodiumLimited.Formerdirectorshipsinthelast3yearsNone.10 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 11
LycopodiumLimitedDirectors'report30June2018(continued)InformationonDirectors(continued)RobertOsmettiBE(Civ),MIEAust,CPEng.ExecutiveDirector.Age62.ExperienceandexpertiseMrOsmettihasover38yearsexperienceintheprojectmanagementandconstructionofminerals,oilrefiningandmanufacturingprojects.MrOsmettiisaDirectorofLycopodiumMineralsCanadaLimitedandManagingDirectorofMondiumPtyLtd.SpecialresponsibilitiesMemberoftheCorporateGovernanceCommittee.Interestsinsharesandoptions266,148ordinarysharesofLycopodiumLimited.Formerdirectorshipsinthelast3yearsNone.BrunoRuggieroBE(Mech),GradDipMinSc,GradCertEngTech,MIEAust.ExecutiveDirector.Age54.ExperienceandexpertiseMrRuggierohasover30yearsexperienceinthemineralsindustry.HecurrentlyservesastheTechnicalDirectorforLycopodiumMineralshavingoverarchingresponsibilityfortheCompany’stechnicalknowledgebase,capabilitiesanddirection.MrRuggerioisaDirectorofLycopodiumMineralsPtyLtdandaNon-executiveDirectorofECGEngineeringPtyLtdandQuantumGraphiteLimited.SpecialresponsibilitiesMemberoftheCorporateGovernanceCommittee.Interestsinsharesandoptions3,167,332ordinarysharesinLycopodiumLimited.Formerdirectorshipsinthelast3yearsNone.PeterAnthonyDawson,BSc(Hons).ExecutiveDirector.Age60.ExperienceandexpertiseMrDawsonhas30yearsexperienceintheresourcessector,initiallyinoperationsandsubsequentlyincorporateroles,includingasanexecutivedirectoroflistedpubliccompaniesandasaPartnerintheCorporateFinancedivisionofKPMG.MrDawsonisaDirectorofLycopodiumProcessIndustries,LycopodiumInfrastructurePtyLtdandaNon-executiveDirectorofADPHoldings(Pty)Limited.SpecialresponsibilitiesMemberoftheCorporateGovernanceCommittee.InterestsinsharesandoptionsNil.Formerdirectorshipsinthelast3yearsNone.11 Directors’ Report (continued)
12 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)InformationonDirectors(continued)LawrenceWilliamMarshallB.Bus(Acc)CPA.Non-executiveDirector.Age65.ExperienceandexpertiseMrMarshallinhisroleastheformerChiefExecutiveOfficerofLycopodiumLimitedandwithover40yearsexperiencehasplayedamajorroleinthedevelopmentofthegroup'sinformation,accountingandmanagementandriskmanagementsystems.SpecialresponsibilitiesChairmanoftheAuditCommittee.MemberoftheCorporateGovernanceCommittee.MemberoftheRemunerationCommitee.Interestsinsharesandoptions1,272,332ordinarysharesofLycopodiumLimited.Formerdirectorshipsinthelast3yearsNone.StevenChadwickBASc(Metallurgy).Non-executiveDirector.Age64.ExperienceandexpertiseMrChadwickhasover40yearsexperienceintheminingindustry,incorporatingtechnical,operatingandmanagementroles,aswellasastrongmetallurgicalbackground.MrChadwickisnowametallurgicalconsultantspecialisinginprojectmanagementwitharangeoflocalandinternationalclients.HewasafoundingDirectorofBCIronandaformerManagingDirectorofCoventryResources,PacMinMiningandNorthernGold.MrChadwickisaNon-executiveDirectorofLycopodiumLimitedandQuantumGraphiteLimited.SpecialresponsibilitiesMemberoftheCorporateGovernanceCommittee.MemberoftheRemunerationCommitee.Formerdirectorshipsinthelast3yearsCoventryResources.CompanysecretaryThecompanysecretaryisKeithJohnBakkerB.Bus(Acc),FCPA.Age65.Keithhasinexcessof30yearsexperienceinseniorfinanceandcompanysecretarialroleswithintheairline,humanresourceconsultingandminingservicessectors.HeistheChiefFinancialOfficerofLycopodiumLimited.12 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 13
LycopodiumLimitedDirectors'report30June2018(continued)MeetingsofDirectorsThenumbersofmeetingsoftheCompany'sboardofDirectorsandofeachboardcommitteeheldduringtheyearended30June2018,andthenumbersofmeetingsattendedbyeachDirectorwere:FullmeetingsMeetingsofMeetingsofcommitteesofdirectorsnon-executivedirectorsAuditNominationRemunerationABABABABABMichaelCaratti1111--**---22PeterDeLeo1111*-33--**-RodneyLeonard1011*-13--**-RobertOsmetti1011*-**---**-BrunoRuggerio1011*-**---**-PeterDawson99*-**---**-LawrenceMarshall911--33--22StevenChadwick1111--**---22A=NumberofmeetingsattendedB=NumberofmeetingsheldduringthetimetheDirectorheldofficeorwasamemberofthecommitteeduringtheyear*=Notanon-executiveDirector**=Notamemberoftherelevantcommittee13 Directors’ Report (continued)
14 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Remunerationreport-auditedTheDirectorsarepleasedtopresentyourCompany's2018remunerationreportwhichsetsoutremunerationinformationforLycopodiumLimited'snon-executiveDirectors,executiveDirectorsandotherkeymanagementpersonnel.DirectorsandkeymanagementpersonneldisclosedinthisreportNamePositionMichaelCarattiChairman,Non-executiveDirectorPeterDeLeoManagingDirectorRodneyLeonardExecutiveDirectorRobertOsmettiExecutiveDirectorBrunoRuggieroExecutiveDirectorPeterDawsonExecutiveDirectorLawrenceMarshallNon-executiveDirectorStevenChadwickNon-executiveDirectorKeithBakkerCompanySecretary,ChiefFinancialOfficerRoleoftheremunerationcommitteeTheremunerationcommitteeisprimarilyresponsibleformakingrecommendationson:•RemunerationlevelsofexecutiveDirectorsandotherkeymanagementpersonnel•Theover-archingexecutiveremunerationframeworkandoperationofanyincentiveplan,and•Keyperformanceindicatorsandperformancehurdlesfortheexecutiveteam.Theobjectiveistoensurethatremunerationpoliciesandstructuresarefairandcompetitiveandalignedwiththelong-terminterestsofthecompany.Non-executiveDirectorremunerationpolicyFeesandpaymentstonon-executiveDirectorsreflectthedemandswhicharemadeon,andtheresponsibilitiesof,theDirectors.Non-executiveDirectors’feesandpaymentsarereviewedannuallybytheBoardtoensurethattheyareappropriateandin-linewiththemarket.Non-executiveDirectorsarealsopaidanhourlyrateforadhocservices,asrequired.Non-executiveDirectorsdonotreceiveperformance-basedpay.Directors'feesThecurrentbasefeeswerelastreviewedwitheffectfrom1July2018.Thefeesareinclusiveofcommitteefees.DetailsonDirectorsfeesaredisclosedunderserviceagreementsonpage17.ExecutiveremunerationpolicyandframeworkIndeterminingexecutiveremuneration,theBoardaimstoensurethatremunerationpracticesare:•Competitiveandreasonable,enablingthecompanytoattractandretainkeytalent•Alignedtothecompany’sstrategicandbusinessobjectivesandthecreationofshareholdervalue•Transparent,and•Acceptabletoshareholders.Theexecutiveremunerationframeworkhasthreecomponents:•Fixedannualremuneration,includingsuperannuation,and•Servicebonus,and•Equity.14 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 15
LycopodiumLimitedDirectors'report30June2018(continued)Remunerationreport-audited(continued)Executiveremunerationpolicyandframework(continued)Fixedannualremunerationisstructuredasatotalemploymentcostpackagewhichisdeliveredasacombinationofsalaryandprescribednonfinancialbenefitspartlyattheexecutive’sdiscretion.Fixedannualremunerationisreviewedataminimumannuallytoensuretheexecutive’spayiscompetitivewiththemarket.Anexecutive’spayisalsoreviewedonpromotion.Aserviceorseniormanagementbonusmaybeprovidedtocertainseniorsalariedemployeespayableannually,atthediscretionofthecompany.Votingandcommentsmadeatthecompany's2017AnnualGeneralMeetingTheremunerationreportforthe2017financialyearwasunanimouslyapprovedbyshareholdersduringtheAGM.ThecompanydidnotreceiveanyspecificfeedbackattheAGMorthroughouttheyearonitsremunerationpractices.CompanyperformanceTheprofitafterincometaxexpenseandbasicearningspershareforthegroupforthelastfiveyearsisasfollows:20182017201620152014Revenue($)194,568,891216,616,442124,460,218122,811,332154,765,985Profit/(Loss)beforeincometax($)25,290,47514,307,6205,215,629(1,620,068)7,682,592Incometaxexpense/(benefit)($)6,957,0883,934,0911,889,219(604,655)3,973,206Profit/(Loss)afterincometax($)18,333,38710,373,5293,326,410(1,015,413)3,709,386BasicEPS(cents)45.725.98.0(2.3)10.0BasicEPSgrowth,yearonyear(%)76.4%223.8%447.8%(123.0%)(82.3%)Fullyfrankeddividendspershare(cents)30.018.05.51.56.5Changeinshareprice*($)1.501.050.84(0.84)(2.17)Returnonequity(%)24.68%15.53%5.22%(1.61%)5.61%*calculatedasthedifferencebetweentheclosingsharepriceatthestartandendoftherespectivefinancialyears.15 Directors’ Report (continued)
16 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Remunerationreport-audited(continued)DetailsofremunerationThefollowingtablesshowdetailsoftheremunerationreceivedbytheDirectorsandthekeymanagementpersonnelofthegroupforthecurrentandpreviousfinancialyear.2018Short-termemployeebenefitsPost-employmentbenefitsNameCashsalaryandfeesCashbonusNon-monetarybenefitsOtherSuper-annuationTotalPerfor-mancerelated$$$$$$%Non-executiveDirectorsMichaelCaratti54,794-11,764-5,20671,764-LawrenceMarshall94,416-11,764-25,000131,180-StevenChadwick79,200----79,200-Sub-totalnon-executivedirectors228,410-23,528-30,206282,144-ExecutiveDirectorsPeterDeLeo500,00038,75011,764-25,000575,514-RodneyLeonard425,00032,50011,764-25,000494,264-RobertOsmetti305,00032,50011,764-25,000374,264-BrunoRuggiero381,641-11,764-25,000418,405-PeterDawson332,410-9,235-16,657358,302-OtherkeymanagementpersonnelKeithBakker336,088---25,000361,088-Totalkeymanagementpersonnelcompensation(group)2,508,549103,75079,819-171,8632,863,981-Noelementoftheaboveremunerationisconditionaluponmeetingkeyperformanceindicators.2017Short-termemployeebenefitsPost-employmentbenefitsNameCashsalaryandfeesCashbonus*Non-monetarybenefitsOtherSuper-annuationTotalPerfor-mancerelated$$$$$$%Non-executiveDirectorsMichaelCaratti54,794-11,378-5,20671,378-LawrenceMarshall94,470-11,378-35,000140,848-StevenChadwick108,180----108,180-Sub-totalnon-executivedirectors257,444-22,756-40,206320,406-ExecutiveDirectorsPeterDeLeo493,450-11,378-35,000539,828-RodneyLeonard427,700-11,378-34,000473,078-RobertOsmetti475,785-9,1555,10035,000525,040-BrunoRuggiero384,278-11,378-35,000430,656-OtherkeymanagementpersonnelKeithBakker317,17515,000--35,000367,175-Totalkeymanagementpersonnelcompensation(group)2,355,83215,00066,0455,100214,2062,656,183-Noelementoftheaboveremunerationisconditionaluponmeetingkeyperformanceindicators.16 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 17
LycopodiumLimitedDirectors'report30June2018(continued)Remunerationreport-audited(continued)ServiceagreementsRemunerationandothertermsofemploymentfortheDirectorsandkeymanagementpersonnelareformalisedinemploymentcontracts.Eachcontractdealswithfixedannualremuneration.Othermajorprovisionsoftheagreementsrelatingtoremunerationaresetoutbelow.AllemploymentcontractswithDirectorsandexecutivesmaybeterminatedbyeitherpartywithonemonth’snotice.Noneofthedirectorsorexecutivesareprovidedwithterminationbenefits.NameTermofagreementFixedRemunerationincludingsuperannuation*MichaelCaratti,ChairmanandNon-executiveDirectorNofixedtermDirectorsfeeof$75,000p.a.PeterDeLeo,ManagingDirectorNofixedterm$590,000p.a.RodneyLeonard,ExecutiveDirectorNofixedterm$540,000p.a.RobertOsmetti,ExecutiveDirectorNofixedterm$415,000p.a.Directorsfeeof$75,000p.a.BrunoRuggiero,ExecutiveDirectorNofixedterm$415,000p.a.Directorsfeeof$75,000p.a.PeterDawson,ExecutiveDirectorNofixedterm$415,000p.a.Directorsfeeof$75,000p.a.LawrenceMarshall,Non-executiveDirectorNofixedtermFixedhourlyrateof$216.15Directorsfeeof$75,000p.a.StevenChadwick,Non-executiveDirectorNofixedtermDirectorsfeeof$75,000p.a.KeithBakker,CompanySecretaryandChiefFinancialOfficerNofixedterm$370,000p.a.*Fixedremunerationpayablefrom1July2018andreviewedannuallybytheRemunerationCommittee.17 Directors’ Report (continued)
18 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Remunerationreport-audited(continued)Serviceagreements(continued)EquityinstrumentdisclosuresrelatingtokeymanagementpersonnelThetablebelowshowsthenumberof:(i)Sharesinthecompanythatwereheldduringthefinancialyearbykeymanagementpersonnelofthegroup,includingtheirclosefamilymembersandentitiesrelatedtothem.Therewerenosharesgrantedduringthereportingperiodascompensation.(i)ShareholdingsThenumbersofsharesintheCompanyheldduringthefinancialyearbyeachDirectorofLycopodiumLimitedandotherkeymanagementpersonnelofthegroup,includingtheirpersonallyrelatedparties,aresetoutbelow.Therewerenosharesgrantedduringthereportingperiodascompensation.2018NameBalanceatthestartoftheyearReceivedduringtheyearontheexerciseofoptionsOtherchangesduringtheyearBalanceatendoftheyearDirectorsofLycopodiumLimitedOrdinarysharesMichaelCaratti9,104,367--9,104,367PeterDeLeo1,171,711--1,171,711RodneyLeonard2,354,215-(200,000)2,154,215RobertOsmetti1,808,148-(1,542,000)266,148BrunoRuggiero3,167,332--3,167,332PeterDawson----LawrenceMarshall1,942,332-(670,000)1,272,332StevenChadwick----OtherkeymanagementpersonnelofthegroupOrdinarysharesKeithBakker46,874-(6,000)40,87418 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 19
LycopodiumLimitedDirectors'report30June2018(continued)Remunerationreport-audited(continued)LoanstokeymanagementpersonnelDetailsofloansmadetoDirectorsofLycopodiumLimitedandotherkeymanagementpersonnelofthegroup,includingtheirpersonallyrelatedparties,aresetoutbelow.(i)AggregatesforkeymanagementpersonnelBalanceatthestartoftheyear$Interestpaidandpayablefortheyear$Interestnotcharged$Balanceatendoftheyear$Numberingroupattheendoftheyear201840,607--35,3571201749,134--40,6071Loansoutstandingattheendofthecurrentandprioryearincludealoantoakeymanagementpersonnelundertheseniormanagershareacquisitionplan.Allotherloanstokeymanagementpersonnelareshort-termadvancesinnatureandareinsignificant.Nowrite-downsorallowancesfordoubtfulreceivableshavebeenrecognisedinrelationtoanyloansmadetokeymanagementpersonnel.Endofremunerationreport.19 Directors’ Report (continued)
20 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)SharesunderoptionTherewerenounissuedordinarysharesofLycopodiumLimitedunderoptionatthedateofthisreport.InsuranceofofficersDuringthefinancialyear,LycopodiumLimitedtookoutinsurancecoverfortheDirectors,secretariesandseniorofficersofthecompanyanditscontrolledentities.Theliabilitiesinsuredarecostsandexpensesthatmaybeincurredindefendingcivilorcriminalproceedingsthatmaybebroughtagainsttheofficersintheircapacityasofficersofentitiesinthegroup,andanyotherpaymentsarisingfromliabilitiesincurredbytheofficersinconnectionwithsuchproceedings,otherthanwheresuchliabilitiesariseoutofconductinvolvingawilfulbreachofdutybytheofficersortheimproperusebytheofficersoftheirpositionorofinformationtogainadvantageforthemselvesorsomeoneelseortocausedetrimenttothecompany.Thedirectorshavenotincludedspecificdetailsofthepremiumpaidassuchdisclosureisprohibitedunderthetermsofthecontract.IndemnityofauditorsLycopodiumLimitedhasagreedtoindemnifytheirauditors,GrantThorntonAuditPtyLtd,totheextentpermittedbylaw,againstanyclaimbyathirdpartyarisingfromLycopodiumLimited'sbreachoftheiragreement.TheindemnitystipulatesthatLycopodiumLimitedwillmeetthefullamountofanysuchliabilitiesincludingareasonableamountoflegalcosts.ProceedingsonbehalfofthecompanyNopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedingsonbehalfoftheCompany,ortointerveneinanyproceedingstowhichtheCompanyisaparty,forthepurposeoftakingresponsibilityonbehalfoftheCompanyforallorpartofthoseproceedings.NoproceedingshavebeenbroughtorintervenedinonbehalfoftheCompanywithleaveoftheCourtundersection237oftheCorporationsAct2001.20 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 21
LycopodiumLimitedDirectors'report30June2018(continued)Non-auditservicesTheCompanymaydecidetoemploytheauditoronassignmentsadditionaltotheirstatutoryauditdutieswheretheauditor'sexpertiseandexperiencewiththeCompanyand/orthegroupareimportant.Detailsoftheamountspaidorpayabletotheauditor(GrantThorntonAustraliaLtd)forauditandnon-auditservicesprovidedduringtheyeararesetoutbelow.TheboardofDirectorshasconsideredthepositionand,inaccordancewithadvicereceivedfromtheAuditCommittee,issatisfiedthattheprovisionofthenon-auditservicesiscompatiblewiththegeneralstandardofindependenceforauditorsimposedbytheCorporationsAct2001.TheDirectorsaresatisfiedthattheprovisionofnon-auditservicesbytheauditor,assetoutbelow,didnotcompromisetheauditorindependencerequirementsoftheCorporationsAct2001forthefollowingreasons:•allnon-auditserviceshavebeenreviewedbytheAuditCommitteetoensuretheydonotimpacttheimpartialityandobjectivityoftheauditor•noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110CodeofEthicsforProfessionalAccountants.Duringtheyearthefollowingfeeswerepaidorpayablefornon-auditservicesprovidedbytheauditoroftheparententity,itsrelatedpracticesandnon-relatedauditfirms:Consolidated2018$2017$TaxationservicesFirmrelatedtoGrantThorntonAustraliaLtd:Taxcomplianceservices(includingincometaxreturns)63,44032,300NetworkfirmofGrantThorntonAustraliaLtd:Taxcomplianceservices(includingincometaxreturns)40,52956,926Non-GrantThorntonAustraliaLtdauditfirms:Taxcomplianceservices(includingincometaxreturns)15,27533,951Totalremunerationfortaxationservices119,244123,177OtherservicesFirmrelatedtoGrantThorntonAustraliaLtd:Otherservices39,87015,183Non-GrantThorntonAustraliaLtdauditfirms:Otherservices57,16824,536Totalremunerationforotherservices97,03839,719Totalremunerationfornon-auditservices216,282162,89621 Directors’ Report (continued)
22 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'report30June2018(continued)Auditor'sindependencedeclarationAcopyoftheauditor'sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001issetoutonpage23.ThisreportismadeinaccordancewitharesolutionofDirectors.PeterAnthonyDawsonDirectorPerth20September201822LycopodiumLimitedDirectors'report30June2018(continued)Auditor'sindependencedeclarationAcopyoftheauditor'sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001issetoutonpage23.ThisreportismadeinaccordancewitharesolutionofDirectors.PeterAnthonyDawsonDirectorPerth20September201822 Directors’ Report (continued)
Lycopodium Annual Financial Report 2018 • 23
Corporate Governance Statement
24 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedCorporategovernancestatement30June2018CorporategovernancestatementTheBoardofDirectorsofLycopodiumLimitedisresponsiblefortheoverallcorporategovernanceofthecompany.TheBoardhasimplementedtheRecommendationsoftheASXCorporateGovernanceCounciltotheextentconsideredappropriateforthesizeandnatureoftheCompany’scurrentoperations.LycopodiumLimited’spracticesareconsistentwiththeASXCorporateGovernanceCouncil’sPrinciplesandRecommendations(3rdEdition)(‘Principles’)withanyexceptionsnoted.1.0COUNCILPRINCIPLE1:LAYSOLIDFOUNDATIONSFORMANAGEMENTANDOVERSIGHT1.1CouncilRecommendation1.1:Alistedentityshould:(a)disclosetherespectiverolesandresponsibilitiesoftheBoardandManagement(b)disclosethosemattersexpresslyreservedtotheBoardandthosedelegatedtoManagement.TheCompanycomplieswiththisrecommendation.1.2CouncilRecommendation1.2:Alistedentityshould:(a)undertakeappropriatechecksbeforeappointingaperson,orputtingforwardtosecurityholdersacandidateforelectionasaDirector(b)providesecurityholderswithallmaterialinformationinitspossessionrelevanttoadecisionwhetherornottoelectorre-electaDirector.TheCompanycomplieswiththisrecommendation.1.3CouncilRecommendation1.3:AlistedentityshouldhaveawrittenagreementwitheachDirectorandseniorexecutivesettingoutthetermsoftheirappointment.TheCompanycomplieswiththisrecommendation.1.4CouncilRecommendation1.4:TheCompanySecretaryofalistedentityshouldbeaccountabledirectlytotheBoard,throughtheChair,onallmatterstodowiththeproperfunctioningoftheBoard.TheCompanycomplieswiththisrecommendation.1.5CouncilRecommendation1.5:Alistedentityshould:(a)haveadiversitypolicywhichincludesrequirementsfortheBoardorarelevantcommitteeoftheBoardtosetmeasurableobjectivesforachievinggenderdiversityandtoaccessannuallyboththeobjectivesandtheentity'sprogressinachievingthem;(b)disclosethatpolicyorasummaryofit;and(c)discloseasattheendofeachreportingperiodthemeasurableobjectivesforachievinggenderdiversitysetbytheBoardorarelevantcommitteeoftheBoardinaccordancewiththeentity'sdiversitypolicyanditsprogresstowardsachievingthem,andeither:(i)therespectiveproportionsofmenandwomenontheBoard,inseniorexecutivepositionsandacrossthewholeorganisation(includinghowtheentityhasdefined'seniorexecutive'forthesepurposes);or24 Corporate Governance Statement
Lycopodium Annual Financial Report 2018 • 25
LycopodiumLimitedCorporategovernancestatement30June2018(continued)1.0COUNCILPRINCIPLE1:LAYSOLIDFOUNDATIONSFORMANAGEMENTANDOVERSIGHT(continued)1.5CouncilRecommendation1.5:(continued)(ii)iftheentityisa'relevantemployer'undertheWorkplaceGenderEqualityAct,theentity'smostrecentpublished'GenderEqualityIndicators',asdefinedinundertheAct.TheCompanydoesnotcomplywithrecommendation1.5(a)or1.5(c)(i).Asaglobalparticipant,theCompanyrecruitsstafffromeverycontinentandhasanestablishedpolicyofequalopportunityemployment.1.6CouncilRecommendation1.6:Alistedentityshould:(a)haveanddiscloseaprocessforperiodicallyevaluatingtheperformanceoftheBoard,itscommitteesandindividualDirectors;and(b)disclose,inrelationtoeachreportingperiod,whetheraperformanceevaluationwasundertakeninthereportingperiodinaccordancewiththatprocess.TheCompanycomplieswiththisrecommendation.1.7CouncilRecommendation1.7:Alistedentityshould:(a)haveanddiscloseaprocessforperiodicallyevaluatingtheperformanceofitsseniorexecutives;and(b)disclose,inrelationtoeachreportingperiod,whetheraperformanceevaluationwasundertakeninthereportingperiodinaccordancewiththatprocess.TheCompanycomplieswiththisrecommendation.2.0COUNCILPRINCIPLE2:STRUCTURETHEBOARDTOADDVALUE2.1CouncilRecommendation2.1:TheBoardofalistedentityshould:(a)haveanominationcommitteewhich:(i)hasatleast3members,amajorityofwhichareindependentdirectors;and(ii)ischairedbyanindependentdirector;anddisclose(iii)thecharterofthecommittee;(iv)themembersofthecommittee;and(v)asattheendofeachreportingperiod,thenumberoftimesthecommitteemeetthroughouttheperiodandtheindividualattendancesofthemembersatthesemeetings;or(b)ifitdoesnothaveanominationcommittee,disclosethefactandtheprocessitemploystoaddressBoardsuccessionissuesandtoensurethattheBoardhastheappropriatebalanceofskills,knowledge,experience,independenceanddiversitytoenableittodischargeitsdutiesandresponsibilitieseffectively.TheCompanydoesnotcomplywiththisrecommendation.TheroleofthenominationcommitteeiscarriedoutbythefullBoard.TheBoardintendstoreconsidertheformationofaseparateNominationCommitteeastheCompany'soperationsevolve.25 Corporate Governance Statement (continued)
26 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedCorporategovernancestatement30June2018(continued)2.0COUNCILPRINCIPLE2:STRUCTURETHEBOARDTOADDVALUE(continued)2.2CouncilRecommendation2.2:AlistedentityshouldhaveanddiscloseaBoardskillsmatrixsettingoutthemixofskillsanddiversitythattheBoardcurrentlyhasorislookingtoachieveinitsmembership.TheCompanydoesnotcomplywiththisrecommendation.TheBoardconsidersthateachofitscurrentdirectorspossessskillsandexperienceappropriatetomanaginganddevelopingtheCompany.Anyadditionalinformationorspecificadvicecanbemoreappropriatelyandeconomicallyobtainedbyengagingindependentexternalexpertconsultants.2.3CouncilRecommendation2.3:Alistedentityshoulddisclose:(a)thenamesofdirectorsconsideredbytheBoardtobeindependentdirectors;(b)ifadirectorhasaninterest,position,associationorrelationshipthatmightcausedoubtabouttheindependenceofthedirectorbuttheBoardisoftheopinionthatitdoesnotcompromisetheindependenceofthedirector,thenatureoftheinterest,position,associationorrelationshipinquestionandanexplanationofwhytheBoardisofthatopinion;and(c)thelengthofserviceofeachdirector.TheCompanycomplieswiththisrecommendation.2.4CouncilRecommendation2.4:AmajorityoftheBoardofalistedentityshouldbeindependent.TheCompanydoesnotcomplywiththisrecommendationasonlyonedirectorisindependent.TheBoardconsidersthatatthistimetheshareholdersarebetterservedbydirectorswhohaveavestedinterestintheCompany.2.5CouncilRecommendation2.5:TheChairoftheBoardofalistedentityshouldbeanindependentdirectorand,inparticular,shouldnotbethesamepersonastheCEOoftheentity.TheCompanydoesnotfullycomplywiththisrecommendationastheChairpersonisnotanindependentdirector.TheBoardconsidersthatatthisstageinthedevelopmentoftheCompany,anindependentChairpersonwouldnotaddsufficientexpertisetotheBoardtojustifytheassociatedcostandanyadditionalinformationorspecificadvicerequiredcanbemoreappropriatelyandeconomicallyobtainedfromindependentexternalexpertconsultants.2.6CouncilRecommendation2.6:Alistedentityshouldhaveaprogramforinductingnewdirectorsandprovideappropriateprofessionaldevelopmentopportunitiesfordirectorstodevelopandmaintaintheskillsandknowledgeneededtoperformtheroleasdirectorseffectively.TheCompanycomplieswiththisrecommendation.26 Corporate Governance Statement (continued)
Lycopodium Annual Financial Report 2018 • 27
LycopodiumLimitedCorporategovernancestatement30June2018(continued)3.0COUNCILPRINCIPLE3:ACTETHICALLYANDRESPONSIBLY3.1CouncilRecommendation3.1:Alistedentityshould:(a)haveacodeofconductforitsdirectors,seniorexecutivesandemployees;and(b)disclosethatcodeorasummaryofit.TheCompanycomplieswiththisrecommendation.4.0COUNCILPRINCIPLE4:SAFEGUARDINTEGRITYINCORPORATEREPORTING4.1CouncilRecommendation4.1:Theboardofalistedentityshould:(a)haveanauditcommitteewhich:(i)hasatleastthreemembers,ofallwhomarenon-executivedirectorsandamajorityareindependentdirectors;and(ii)ischairedbyanindependentdirector,whoisnotthechairoftheBoard,anddisclose;(iii)thecharterofthecommittee;(iv)therelevantqualificationsandexperienceofthemembersofthecommittee;and(v)inrelationtoeachreportingperiod,thenumberoftimesthecommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthesemeetings;or(b)ifitdoesnothaveanauditcommittee,disclosethatfactandtheprocessesitemploysthatindependentlyverifyandsafeguardtheintegrityofitscorporatereporting,includingtheprocessesfortheappointmentandremovaloftheexternalauditorandtherotationoftheauditengagementpartner.TheCompanydoesnotfullycomplywiththisrecommendationinthattheAuditCommitteeconsistsofthreedirectorsonlyoneofwhichisanon-executiveandnoneareindependent.4.2CouncilRecommendation4.2:TheBoardofalistedentityshould,beforeitapprovestheentity'sfinancialstatementsforafinancialperiod,receivefromitsCEOandCFOadeclarationthat,intheiropinion,thefinancialrecordsoftheentityhavebeenproperlymaintainedandthatthefinancialstatementscomplywiththeappropriateaccountingstandardsandgiveatrueandfairviewofthefinancialpositionandperformanceoftheentityandthattheopinionhasbeenformedonthebasisofasoundsystemofriskmanagementandinternalcontrolwhichisoperatingeffectively.TheCompanycomplieswiththisrecommendation.4.3CouncilRecommendation4.3:AlistedentitythathasanAGMshouldensurethatitsexternalauditorattendsitsAGMandisavailabletoanswerquestionsfromsecurityholdersrelevanttotheaudit.TheCompanycomplieswiththisrecommendation.27 Corporate Governance Statement (continued)
28 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedCorporategovernancestatement30June2018(continued)5.0COUNCILPRINCIPLE5:MAKETIMELYANDBALANCEDDISCLOSURE5.1CouncilRecommendation5.1:Alistedentityshould:(a)haveawrittenpolicyforcomplyingwithitscontinuousdisclosureobligationsunderthelistingRules;and(b)disclosethatpolicyorasummaryofit.TheCompanycomplieswiththisrecommendation.6.0COUNCILPRINCIPLE6:RESPECTTHERIGHTSOFSECURITYHOLDERS6.1CouncilRecommendation6.1:Alistedentityshouldprovideinformationaboutitselfanditsgovernancetoinvestorsviaitswebsite.TheCompanycomplieswiththisrecommendation.6.2CouncilRecommendation6.2:Alistedentityshoulddesignandimplementaninvestorrelationsprogramtofacilitateeffectivetwo-waycommunicationwithinvestors.TheCompanycomplieswiththisrecommendation.6.3CouncilRecommendation6.3:Alistedentityshoulddisclosethepoliciesandprocessesithasinplacetofacilitateandencourageparticipationatmeetingsofsecurityholders.TheCompanydoesnotcurrentlycomplywiththisrecommendation,althoughthematterwillbeassessedinthelightofwhatemergesinthemarketandwillberespondedtoasappropriate.6.4CouncilRecommendation6.4:Alistedentityshouldgivesecurityholderstheoptiontoreceivecommunicationsfrom,andsendcommunicationsto,theentityanditssecurityregistryelectronically.TheCompanycomplieswiththisrecommendation.7.0COUNCILPRINCIPLE7:RECOGNISEANDMANAGERISK7.1CouncilRecommendation7.1:TheBoardofalistedentityshould:(a)haveacommitteeorcommitteestooverseerisk,eachofwhich:(i)hasatleast3members,amajorityofwhomareindependentdirectors;and(ii)ischairedbyanindependentdirector,anddisclose;(iii)thecharterofthecommittee;(iv)themembersofthecommittee;and(v)asattheendofeachreportingperiod,thenumberoftimesthecommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthosemeetings;or(b)ifitdoesnothaveariskcommitteeorcommitteesthatsatisfy(a)above,disclosethatfactandtheprocessesitemploysforoverseeingtheentity'sriskmanagementframework.TheCompanycomplieswith(b)ofthisrecommendation.28 Corporate Governance Statement (continued)
Lycopodium Annual Financial Report 2018 • 29
LycopodiumLimitedCorporategovernancestatement30June2018(continued)7.0COUNCILPRINCIPLE7:RECOGNISEANDMANAGERISK(continued)7.1CouncilRecommendation7.1:(continued)TheBoardconsidersriskmanagementasoneofitsprimaryresponsibilities.TheBoardhasadoptedaRiskManagementPolicy,whichprovidesthat:•AllmembersoftheBoardareresponsibleforriskmanagementandoversightofinternalcontrols.ThedaytodayresponsibilitiesforriskmanagementandinternalcontrolsrestwiththeManagingDirector.•TheManagingDirectorreportsonriskmanagementandinternalcontrols,usinganexceptionreportingbasis,tothefullBoardaspartofamonthlywrittenreporttodirectors.TheCompanyhasaninternalcontrolframeworkcoveringallareasofidentifiedriskwithintheCompany’soperationsandhasdocumentedthesepoliciesinordertocentralisethecontrolsandintendsthattheRiskManagementPolicywillbeenhancedasitsoperationsevolve.Theareasofriskcoveredbytheinternalcontrolframeworkaretenders/proposals,clientcontractnegotiationandmanagement,financialcontrolandreporting,commercial/corporatecontrolandreporting,operationalcontrolandreporting,personnelmanagement,procurementandpurchasingandsuppliercontractnegotiationandmanagement.7.2CouncilRecommendation7.2:TheBoardoracommitteeoftheBoardshould:(a)Reviewtheentity'sriskmanagementframeworkatleastannuallytosatisfyitselfthatitcontinuestobesound;and(b)Disclose,inrelationtoeachreporting,whethersuchareviewhastakenplace.TheCompanycomplieswiththisrecommendation.7.3CouncilRecommendation7.3:Alistedentityshoulddisclose:(a)ifithasaninternalauditfunction,howthefunctionisstructuredandwhatroleitperforms;or(b)ifitdoesnothaveaninternalauditfunction,thatfactandtheprocessesitemploysforevaluatingandcontinuallyimprovingtheeffectivenessofitsriskmanagementandinternalcontrolprocesses.TheCompanycomplieswith(b)ofthisrecommendation.7.4CouncilRecommendation7.4:Alistedentityshoulddisclosewhetherithasanymaterialexposuretoeconomic,environmentalandsocialsustainabilityrisksand,ifitdoes,howitmanagesorintendstomanagetheserisks.TheCompanyisoftheviewthatitisnotmateriallyexposedtotherisksoutlinedinthisrecommendation.8.0COUNCILPRINCIPLE8:REMUNERATEFAIRLYANDRESPONSIBLY8.1CouncilRecommendation8.1:TheBoardofalistedentityshould:(a)havearemunerationcommitteewhich:(i)hasatleastthreemembers,amajorityofwhomareindependentdirectors;and(ii)ischairedbyanindependentdirector,anddisclose;(iii)thecharterofthecommittee;(iv)themembersofthecommittee;and(v)asattheendofeachreportingperiod,thenumberoftimesthecommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthosemeetings;or29 Corporate Governance Statement (continued)
30 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedCorporategovernancestatement30June2018(continued)8.0COUNCILPRINCIPLE8:REMUNERATEFAIRLYANDRESPONSIBLY(continued)8.1CouncilRecommendation8.1:(continued)(b)ifitdoesnothavearemunerationcommittee,disclosethatfactandtheprocessesitemploysforsettingthelevelandcompositionofremunerationfordirectorsandseniorexecutivesandensuringthatsuchremunerationisappropriateandnotexcessive.TheCompanydoesnotfullycomplywiththisrecommendationastheRemunerationCommitteedoesnothaveamajorityofindependentdirectorsnorisitchairedbyanindependentdirector.TheroleoftheRemunerationCommitteeiscarriedoutbythefullBoard.TheCompanyhasaremunerationcommitteecharterwhichispublishedonitswebsite.StatisticsregardingparticipationatremunerationcommitteemeetingsarepublishedineachAnnualReport.8.2CouncilRecommendation8.2:Alistedentityshouldseparatelydiscloseitspoliciesandpracticesregardingtheremunerationofnon-executivedirectorsandtheremunerationofexecutivedirectorsandotherseniorexecutives.TheCompanycomplieswiththisrecommendation.8.3CouncilRecommendation8.3:Alistedentitywhichhasanequitybasedremunerationschemeshould:(a)haveapolicyonwhetherparticipantsarepermittedtoenterintotransactions(whetherthroughtheuseofderivativesorotherwise)whichlimittheeconomicriskofparticipatinginthescheme;and(b)disclosethatpolicyorasummaryofit.ThisrecommendationdoesnotapplyastheCompanyhasnotenteredintoanyschemewhichenablesparticipantstohedgeorotherwiselimittheeconomicriskofparticipationwithoutpriordisclosureandtheapprovalofsecurityholdersatageneralmeeting.30 Corporate Governance Statement (continued)
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2018
Lycopodium Annual Financial Report 2018 • 31
LycopodiumLimitedConsolidatedstatementofprofitorlossandothercomprehensiveincomeFortheyearended30June2018ConsolidatedNotes2018$2017$Revenuefromoperations5194,568,891216,616,442Employeebenefitsexpense(67,562,580)(61,898,213)Depreciationandamortisationexpense6(1,228,479)(1,171,764)Projectexpenses(17,418,251)(9,843,966)Equipmentandmaterials(23,838,936)(74,207,912)Contractors(41,753,703)(38,255,322)Occupancyexpense(8,577,494)(8,052,368)Impairmentofgoodwill16(1,095,048)(263,242)Otherexpenses(8,793,785)(9,540,001)Lossondisposalofasset(2,080)(1,634)Financecosts6(120,741)(93,651)Shareofnetprofitofassociatesandjointventuresaccountedforusingtheequitymethod1,112,6811,019,251Profitbeforeincometax25,290,47514,307,620Incometaxexpense7(6,957,088)(3,934,091)Profitfortheyear18,333,38710,373,529OthercomprehensiveincomeItemsthatmaybereclassifiedtoprofitorlossChangesinthefairvalueofavailable-for-salefinancialassets22(a)325,5117Exchangegains/(losses)ontranslationofforeignoperations22(a)(26,508)111,932Othercomprehensiveincomefortheyear,netoftax299,003111,939Totalcomprehensiveincomefortheyear18,632,39010,485,468Profitfortheyearisattributableto:OwnersofLycopodiumLimited18,170,18610,292,083Non-controllinginterests163,20181,44618,333,38710,373,529Totalcomprehensiveincomefortheyearisattributableto:OwnersofLycopodiumLimited18,469,18910,404,022Non-controllinginterests163,20181,44618,632,39010,485,468CentsCentsEarningspershareforprofitattributabletotheordinaryequityholdersoftheCompany:Basicearningspershare32(a)45.725.9Dilutedearningspershare32(b)45.725.9Theaboveconsolidatedstatementofprofitorlossandothercomprehensiveincomeshouldbereadinconjunctionwiththeaccompanyingnotes.31 Consolidated Balance Sheet
As at 30 June 2018
32 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedConsolidatedbalancesheetAsat30June2018ConsolidatedNotes2018$2017$ASSETSCurrentassetsCashandcashequivalents874,287,78885,334,768Tradeandotherreceivables937,616,63736,919,288Inventories819,844327,430Currenttaxreceivables1,334,1511,344,040Othercurrentassets101,740,8512,149,687Derivativefinancialassets11(c)-164,994Totalcurrentassets115,799,271126,240,207Non-currentassetsInvestmentsaccountedforusingtheequitymethod132,767,6902,227,735Available-for-salefinancialassets11(b)1,256,106102,963Property,plantandequipment143,434,4873,174,174Intangibleassets166,792,0177,421,173Otherreceivables12332,356442,616Deferredtaxassets158,350,7983,797,930Totalnon-currentassets22,933,45417,166,591Totalassets138,732,725143,406,798LIABILITIESCurrentliabilitiesTradeandotherpayables1731,749,22964,080,966Borrowings11(d)696,905509,731Derivativefinancialliabilities11(c)27,694-Currenttaxliabilities9,568,8813,978,266Provisions1816,361,0094,280,795Totalcurrentliabilities58,403,71872,849,758Non-currentliabilitiesBorrowings11(d)562,066832,912Provisions20416,531500,796Totalnon-currentliabilities978,5971,333,708Totalliabilities59,382,31574,183,466Netassets79,350,41069,223,332EQUITYContributedequity2120,823,77220,823,772Reserves22(a)(689,039)(988,042)Retainedearnings22(b)56,238,75746,412,369Parententityinterest76,373,49066,248,099Non-controllinginterests232,976,9202,975,233Totalequity79,350,41069,223,332Theaboveconsolidatedbalancesheetshouldbereadinconjunctionwiththeaccompanyingnotes.32 Consolidated Balance Sheet
As at 30 June 2018
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
Attributable to members of Lycopodium Limited
Consolidated
Contributed
equity
$
Retained
earnings
$
Notes
Foreign
currency
translation
reserve
$
Available
for sale
investment
revaluation
reserve
$
Performance
rights
reserve
$
Non-
controlling
interests
$
Total
equity
$
Balance at 1 July 2016
20,823,772
41,285,494
(1,016,051)
(83,930)
259,037
3,062,695
64,331,017
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
Performance rights - expired
23
24
22
-
-
-
-
-
-
-
10,292,083
-
-
111,932
10,292,083
111,932
-
111,932
(5,165,208)
-
(5,165,208)
-
-
-
-
7
7
7
-
-
-
-
-
-
-
-
(259,037)
81,446
10,373,529
-
111,939
81,446
10,485,468
(168,908)
(168,908)
-
-
(5,165,208)
(259,037)
(259,037)
(168,908)
(5,593,153)
Balance at 30 June 2017
20,823,772
46,412,369
(904,119)
(83,923)
-
2,975,233
69,223,332
Consolidated statement of changes in equity
For the year ended 30 June 2018
Lycopodium Limited
Balance at 1 July 2017
20,823,772
46,412,369
(904,119)
(83,923)
Attributable to members of Lycopodium Limited
2,975,233
69,223,332
-
Profit for the year
Other comprehensive income /
Consolidated
(expense)
-
-
18,170,186
-
Notes
Contributed
-
equity
(26,508)
$
325,511
Retained
-
earnings
$
-
Total comprehensive
income for the year
Balance at 1 July 2016
Transactions with owners in
Profit for the year
their capacity as owners:
Other comprehensive income / (expense)
Foreign currency translation
with non-controlling interest
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Dividends provided for or paid
Foreign currency translation with non-controlling interest
Dividends provided for or paid
Performance rights - expired
Balance at 30 June 2018
20,823,772
23
24
-
-
-
-
(8,343,798)
(8,343,798)
56,238,757
18,170,186
(26,508)
325,511
20,823,772
41,285,494
-
-
-
(930,627)
-
-
-
10,292,083
-
-
10,292,083
-
-
-
-
241,588
-
-
-
(5,165,208)
-
(5,165,208)
Foreign currency
163,201
-
translation reserve
-
$
-
18,333,387
Available for sale
investment
revaluation reserve
$
299,003
Performance
rights reserve
$
Non-con-
trolling
interests
$
Total
equity
$
-
-
-
-
-
163,201
18,632,390
(1,016,051)
-
111,932
111,932
(161,514)
(161,514)
-
(161,514)
2,976,920
(8,343,798)
(8,505,312)
79,350,410
-
-
-
-
(83,930)
259,037
3,062,695
64,331,017
-
7
7
-
-
-
-
(259,037)
(259,037)
Balance at 30 June 2017
Balance at 1 July 2017
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
20,823,772
46,412,369
(904,119)
(83,923)
2,975,233
69,223,332
20,823,772
46,412,369
-
-
-
-
-
-
18,170,186
-
18,170,186
-
(8,343,798)
(8,343,798)
(904,119)
-
(26,508)
(26,508)
-
-
-
(83,923)
-
325,511
325,511
-
-
-
23
24
22
23
24
Balance at 30 June 2018
20,823,772
56,238,757
(930,627)
241,588
2,976,920
79,350,410
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
33
Lycopodium Annual Financial Report 2018 • 33
81,446
10,373,529
111,939
81,446
10,485,468
(168,908)
(168,908)
(168,908)
(5,165,208)
(259,037)
(5,593,153)
2,975,233
69,223,332
163,201
163,201
18,333,387
299,003
18,632,390
(161,514)
(161,514)
(161,514)
(8,343,798)
(8,505,312)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
34 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedConsolidatedstatementofcashflowsFortheyearended30June2018ConsolidatedNotes2018$2017$CashflowsfromoperatingactivitiesReceiptsfromcustomers(inclusiveofgoodsandservicestax)170,346,647237,498,193Paymentstosuppliersandemployees(inclusiveofgoodsandservicestax)(168,124,948)(187,908,401)2,221,69949,589,792Interestreceived1,847,1451,557,922Incometaxespaid(5,909,452)(1,814,985)Netcash(outflow)/inflowfromoperatingactivities31(1,840,608)49,332,729CashflowsfrominvestingactivitiesDividendsreceivedfromjointventuresandassociate572,726560,267Paymentsforproperty,plantandequipment14(1,053,110)(335,812)Proceedsfromsaleofproperty,plantandequipment20,2406,311Paymentsforintangibleassets16(631,529)(50,116)Proceedsfromsaleofavailable-for-salefinancialassets1,187,036-Paymentforavailable-for-salefinancialassets11(b)(75,000)-Netcash(outflow)/frominvestingactivities20,363180,650CashflowsfromfinancingactivitiesProceedsfromborrowings1,274,2581,231,311Repaymentsofborrowings(1,203,222)(1,229,832)Repaymentsofhirepurchaseandleaseliabilities(504,329)(227,765)Loansadvancedtojointventure(884,000)(336,000)Repaymentofloansfromassociate387,500-Dividendspaidtocompany'sshareholders(8,343,798)(5,165,208)Proceedsfromrepaymentofloansundertheseniormanagershareacquisitionplan110,26179,282Netcashoutflowfromfinancingactivities(9,163,330)(5,648,212)Net(decrease)/increaseincashandcashequivalents(10,983,575)43,865,167Cashandcashequivalentsatthebeginningofthefinancialyear85,334,76841,547,756Effectsofexchangeratechangesoncashandcashequivalents(63,405)(78,155)Cashandcashequivalentsattheendoffinancialyear874,287,78885,334,768Theaboveconsolidatedstatementofcashflowsshouldbereadinconjunctionwiththeaccompanyingnotes.34 Consolidated Statement of Cash Flows
For the year ended 30 June 2018
Notes to the Consolidated Financial Statements
30 June 2018
Lycopodium Annual Financial Report 2018 • 35
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018ContentsofthenotestotheconsolidatedfinancialstatementsPage1Summaryofsignificantaccountingpolicies362Financialriskmanagement513Criticalaccountingestimatesandjudgements554Segmentinformation565Revenue606Expenses617Incometaxexpense628Currentassets-Cashandcashequivalents649Currentassets-Tradeandotherreceivables6410Currentassets-Othercurrentassets6611Financialassetsandliabilities6612Non-currentassets-Otherreceivables6913Non-currentassets-Investmentsaccountedforusingtheequitymethod7014Non-currentassets-Property,plantandequipment7315Non-currentassets-Deferredtaxassets7416Non-currentassets-Intangibleassets7517Currentliabilities-Tradeandotherpayables7818Currentliabilities-Provisions7919Non-currentliabilities-Deferredtaxliabilities8020Non-currentliabilities-Provisions8021Contributedequity8122Reservesandretainedearnings8223Non-controllinginterests8324Dividends8425Remunerationofauditors8526Contingencies8627Commitments8628Relatedpartytransactions8829Subsidiaries9030Eventsoccurringafterthereportingperiod9031Reconciliationofprofitafterincometaxtonetcashinflowfromoperatingactivities9132Earningspershare9133Share-basedpayments9234Parententityfinancialinformation9335 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
36 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1SummaryofsignificantaccountingpoliciesTheprincipalaccountingpoliciesadoptedinthepreparationofthisconsolidatedfinancialreportaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.ThefinancialreportcomprisesthefinancialstatementsforthegroupconsistingofLycopodiumLimitedanditssubsidiaries.(a)BasisofpreparationThisgeneralpurposefinancialreporthasbeenpreparedinaccordancewithAustralianAccountingStandardsandInterpretationsissuedbytheAustralianAccountingStandardsBoardandtheCorporationsAct2001.LycopodiumLimitedisafor-profitentityforthepurposeofpreparingthefinancialreport.(i)CompliancewithIFRSTheconsolidatedfinancialreportoftheLycopodiumLimitedgroupcomplieswithInternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).(ii)NewandamendedstandardsadoptedbythegroupTherewerenoneworamendedstandardsissuedbytheAustralianAccountingStandardsBoardthatwerematerialtotheGroupandneedbedisclosedinthisfinancialreport.AllstandardsapplicablefortheperiodwerethereforeadoptedwithnomaterialimpactontheGroup.(iii)EarlyadoptionofstandardsThegrouphasnotelectedtoapplyanypronouncementsbeforetheiroperativedateintheannualreportingperiodbeginning1July2017.(iv)HistoricalcostconventionThesefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,asmodifiedbytherevaluationofavailable-for-salefinancialassetsandfinancialassetsatfairvaluethroughprofitandloss.(v)CriticalaccountingestimatesThepreparationoffinancialreportrequirestheuseofcertaincriticalaccountingestimates.Italsorequiresmanagementtoexerciseitsjudgementintheprocessofapplyingthegroup'saccountingpolicies.Theareasinvolvingahigherdegreeofjudgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialreport,aredisclosedinnote3.36 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 37
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(b)Principlesofconsolidation(i)SubsidiariesSubsidiariesareallentities(includingstructuredentities)overwhichthegrouphascontrol.Thegroupcontrolsanentitywhenthegroupisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowertodirecttheactivitiesoftheentity.Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtothegroup.Theyaredeconsolidatedfromthedatethatcontrolceases.Theacquisitionmethodofaccountingisusedtoaccountforbusinesscombinationsbythegroup(refertonote1(h)).Intercompanytransactions,balancesandunrealisedgainsontransactionsbetweencompaniesinthegroupareeliminated.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceoftheimpairmentoftheassettransferred.Accountingpoliciesofsubsidiarieshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbythegroup.Non-controllinginterestsintheresultsandequityofsubsidiariesareshownseparatelyintheconsolidatedstatementofcomprehensiveincome,consolidatedstatementofchangesinequityandconsolidatedbalancesheet,respectively.(ii)EmployeeShareTrustThegrouphasformedatrusttoadministerthegroup'semployeesharescheme.Thistrustisconsolidated,asthesubstanceoftherelationshipisthatthetrustiscontrolledbythegroup.(iii)JointarrangementsUnderAASB11JointArrangementinvestmentsinjointarrangementsareclassifiedaseitherjointoperationsorjointventures.Theclassificationdependsonthecontractualrightsandobligationsofeachinvestor,ratherthanlegalstructureofthejointarrangement.LycopodiumLimitedhasajointventurearrangement.JointventuresInterestinjointventuresareaccountedforusingtheequitymethod(see(v)below),afterinitiallybeingrecognisedatcostintheconsolidatedbalancesheet.(iv)AssociatesAssociatesareallentitiesoverwhichthegrouphassignificantinfluencebutnotcontrolorjointcontrol.Thisisgenerallythecasewherethegroupholdsbetween20%and50%ofthevotingrights.Investmentsinassociatesareaccountedforusingtheequitymethodofaccounting(see(v)below),afterinitiallybeingrecognisedatcost.(v)EquitymethodUndertheequitymethodofaccounting,theinvestmentsareinitiallyrecognisedatcostandadjustedthereaftertorecognisethegroup'sshareofthepost-acquisitionprofitsorlossesoftheinvesteeinprofitorloss,andthegroup'sshareofmovementsinothercomprehensiveincomeoftheinvesteeinothercomprehensiveincome.Dividendsreceivedorreceivablefromassociatesandjointventuresarerecognisedasareductioninthecarryingamountoftheinvestment.Whenthegroup'sshareoflossesinanequity-accountedinvestmentequalsorexceedsitsinterestintheentity,includinganyotherunsecuredlong-termreceivables,thegroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheotherentity.37 Notes to the Consolidated Financial Statements
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38 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(b)Principlesofconsolidation(continued)(v)Equitymethod(continued)Unrealisedgainsontransactionsbetweenthegroupanditsassociatesandjointventuresareeliminatedtotheextentofthegroup'sinterestintheseentities.Unrealisedlossesarealsoeliminatedunlessthetransactionsprovidesevidenceofanimpairmentoftheassettransferred.Accountingpoliciesofequityaccountedinvesteeshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbythegroup.Thegrouptreatstransactionswithnon-controllingintereststhatdonotresultinalossofcontrolastransactionswithequityownersofthegroup.Achangeinownershipinterestresultsinanadjustmentbetweenthecarryingamountsofthecontrollingandnon-controllingintereststoreflecttheirrelativeinterestsinthesubsidiary.Anydifferencebetweentheamountoftheadjustmenttonon-controllinginterestsandanyconsiderationpaidorreceivedisrecognisedinaseparatereservewithinequityattributedtoownersofLycopodiumLimited.(vi)ChangesinownershipinterestsWhenthegroupceasestohavecontrol,jointcontrolorsignificantinfluence,anyretainedinterestintheentityisremeasuredtoitsfairvaluewiththechangeincarryingamountrecognisedinprofitorloss.Thefairvaluebecomestheinitialcarryingamountforthepurposesofsubsequentlyaccountingfortheretainedinterestasanassociate,jointventureorfinancialasset.Inaddition,anyamountspreviouslyrecognisedinothercomprehensiveincomeinrespectofthatentityareaccountedforasifthegrouphaddirectlydisposedoftherelatedassetsorliabilities.Thismaymeanthatamountspreviouslyrecognisedinothercomprehensiveincomearereclassifiedtoprofitorloss.Iftheownershipinterestinajointventureoranassociateisreducedbutjointcontrolorsignificantinfluenceisretained,onlyaproportionateshareoftheamountspreviouslyrecognisedinothercomprehensiveincomearereclassifiedtoprofitorlosswhereappropriate.(c)SegmentreportingOperatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecisionmaker.Thechiefoperatingdecisionmaker,whoisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegments,hasbeenidentifiedastheBoardofDirectors.(d)Foreigncurrencytranslation(i)FunctionalandpresentationcurrencyItemsincludedinthefinancialreportofeachofthegroup'sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates('thefunctionalcurrency').TheconsolidatedfinancialreportarepresentedinAustraliandollars,whichisLycopodiumLimited'sfunctionalandpresentationcurrency.(ii)TransactionsandbalancesForeigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslationatyearendexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedinprofitandloss.Translationdifferencesonfinancialassetsandliabilitiescarriedatfairvaluearereportedaspartofthefairvaluegainorloss.Translationdifferencesonnon-monetaryassetsandliabilitiessuchasequitiesheldatfairvaluethroughprofitorlossarerecognisedinprofitorlossaspartofthefairvaluegainorloss.Translationdifferencesonnon-monetaryassetssuchasequitiesclassifiedasavailable-for-salefinancialassetsarerecognisedinothercomprehensiveincome.(iii)ConsolidatedentitiesTheresultsandfinancialpositionofforeignoperations(noneofwhichhasthecurrencyofahyperinflationaryeconomy)thathaveafunctionalcurrencydifferentfromthepresentationcurrencyaretranslatedintothepresentationcurrencyasfollows:38 Notes to the Consolidated Financial Statements
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Lycopodium Annual Financial Report 2018 • 39
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(d)Foreigncurrencytranslation(continued)(iii)Consolidatedentities(continued)•assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateatthedateofthatbalancesheet•incomeandexpensesforeachstatementofcomprehensiveincomearetranslatedataverageexchangerates(unlessthisisnotareasonableapproximationofthecumulativeeffectoftheratesprevailingonthetransactiondates,inwhichcaseincomeandexpensesaretranslatedatthedatesofthetransactions),and•allresultingexchangedifferencesarerecognisedinothercomprehensiveincome.Onconsolidation,exchangedifferencesarisingfromthetranslationofanynetinvestmentinforeignoperations,andofborrowingsandotherfinancialinstrumentsdesignatedashedgesofsuchinvestments,arerecognisedinothercomprehensiveincome.Whenaforeignoperationissoldoranyborrowingsformingpartofthenetinvestmentarerepaid,associatedexchangedifferencesarerecognisedintheprofitandloss,aspartofthegainorlossonsalewhereapplicable.(e)RevenuerecognitionRevenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.Amountsdisclosedasrevenuearenetofreturns,tradeallowances,rebatesandamountscollectedonbehalfofthirdparties.Thegrouprecognisesrevenuewhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomicbenefitswillflowtotheentityandspecificcriteriahavebeenmetforeachofthegroup'sactivitiesasdescribedbelow.Thegroupbasesitsestimatesonhistoricalresults,takingintoconsiderationthetypeofcustomer,thetypeoftransactionandthespecificsofeacharrangement.Revenueisrecognisedforthemajorbusinessactivitiesasfollows:(i)RenderingofservicesRevenuefromconsultingservicesisrecognisedintheaccountingperiodinwhichtheservicesarerendered.Forfixed-pricecontracts,revenueisrecognisedunderthepercentageofcompletionmethod,basedontheactualserviceprovidedasaproportionofthetotalservicestobeprovided.Ifcircumstancesarisethatmaychangetheoriginalestimatesofrevenues,costsorextentofprogresstowardcompletion,estimatesarerevised.Theserevisionsmayresultinincreasesordecreasesinestimatedrevenuesorcostsandarereflectedinprofitorlossintheperiodinwhichthecircumstancesthatgiverisetotherevisionbecomeknownbymanagement.(ii)RentalrevenueRentalrevenueisaccountedforonastraight-linebasisovertheleasetermasthismatchestheprofileofthemannerinwhichrentalisearned.Contingentrentalincomeisrecognisedasincomeintheperiodsinwhichitisearned.(iii)InterestincomeInterestincomeisrecognisedusingtheeffectiveinterestmethod.Whenareceivableisimpaired,thegroupreducesthecarryingamounttoitsrecoverableamount,beingtheestimatedfuturecashflowdiscountedattheoriginaleffectiveinterestrateoftheinstrument,andcontinuesunwindingthediscountasinterestincome.Interestincomeonimpairedloansisrecognisedusingtheoriginaleffectiveinterestrate.(iv)DividendsDividendsarerecognisedasrevenuewhentherighttoreceivepaymentisestablished.39 Notes to the Consolidated Financial Statements
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40 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(f)IncometaxTheincometaxexpenseorrevenuefortheperiodisthetaxpayableonthecurrentperiod'staxableincomebasedontheapplicableincometaxrateforeachjurisdictionadjustedbychangesindeferredtaxassetsandliabilitiesattributabletotemporarydifferencesandtounusedtaxlosses.ThecurrentincometaxchargeiscalculatedonthebasisofthetaxlawsenactedorsubstantivelyenactedattheendofthereportingperiodinthecountrieswheretheCompany'ssubsidiariesandassociatesoperateandgeneratetaxableincome.Managementperiodicallyevaluatespositionstakenintaxreturnswithrespecttosituationsinwhichapplicabletaxregulationissubjecttointerpretation.Itestablishesprovisionswhereappropriateonthebasisofamountsexpectedtobepaidtothetaxauthorities.Deferredincometaxisprovidedinfull,usingtheliabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsintheconsolidatedfinancialreport.However,deferredtaxliabilitiesarenotrecognisediftheyarisefromtheinitialrecognitionofgoodwill.Deferredincometaxisalsonotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffectsneitheraccountingnortaxableprofitorloss.Deferredincometaxisdeterminedusingtaxrates(andlaws)thathavebeenenactedorsubstantiallyenactedbytheendofthereportingperiodandareexpectedtoapplywhentherelateddeferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesandunusedtaxlossesonlyifitisprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.Deferredtaxliabilitiesandassetsarenotrecognisedfortemporarydifferencesbetweenthecarryingamountandtaxbasesofinvestmentsinforeignoperationswherethecompanyisabletocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatthedifferenceswillnotreverseintheforeseeablefuture.Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsandliabilitiesandwhenthedeferredtaxbalancesrelatetothesametaxationauthority.Currenttaxassetsandtaxliabilitiesareoffsetwheretheentityhasalegallyenforceablerighttooffsetandintendseithertosettleonanetbasis,ortorealisetheassetandsettletheliabilitysimultaneously.LycopodiumLimitedanditswholly-ownedAustraliancontrolledentitieshaveimplementedthetaxconsolidationlegislationeffective1July2013.Asaconsequence,theseentitiesaretaxedasasingleentityandthedeferredtaxassetsandliabilitiesoftheseentitiesaresetoffintheconsolidatedfinancialreport.Currentanddeferredtaxisrecognisedinprofitorloss,excepttotheextentthatitrelatestoitemsrecognisedinothercomprehensiveincomeordirectlyinequity.Inthiscase,thetaxisalsorecognisedinothercomprehensiveincomeordirectlyinequity,respectively.(g)LeasesLeasesofproperty,plantandequipmentwherethegroup,aslessee,hassubstantiallyalltherisksandrewardsofownershipareclassifiedasfinanceleases.Financeleasesarecapitalisedatthelease'sinceptionatthefairvalueoftheleasedpropertyor,iflower,thepresentvalueoftheminimumleasepayments.Thecorrespondingrentalobligations,netoffinancecharges,areincludedinothershort-termandlong-termpayables.Eachleasepaymentisallocatedbetweentheliabilityandfinancecost.Thefinancecostischargedtoprofitorlossovertheleaseperiodsoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliabilityforeachperiod.Theproperty,plantandequipmentacquiredunderfinanceleasesisdepreciatedovertheasset'susefullifeorovertheshorteroftheasset'susefullifeandtheleasetermifthereisnoreasonablecertaintythatthegroupwillobtainownershipattheendoftheleaseterm.Leasesinwhichasignificantportionoftherisksandrewardsofownershiparenottransferredtothegroupaslesseeareclassifiedasoperatingleases(note27).Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtoprofitorlossonastraight-linebasisovertheperiodofthelease.40 Notes to the Consolidated Financial Statements
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Lycopodium Annual Financial Report 2018 • 41
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(h)BusinesscombinationsTheacquisitionmethodofaccountingisusedtoaccountforallbusinesscombinations,regardlessofwhetherequityinstrumentsorotherassetsareacquired.Theconsiderationtransferredfortheacquisitionofasubsidiarycomprisesthefairvaluesoftheassetstransferred,theliabilitiesincurredandtheequityinterestsissuedbythegroup.Theconsiderationtransferredalsoincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangementandthefairvalueofanypre-existingequityinterestinthesubsidiary.Acquisition-relatedcostsareexpensedasincurred.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationare,withlimitedexceptions,measuredinitiallyattheirfairvaluesattheacquisition-date.Onanacquisition-by-acquisitionbasis,thegrouprecognisesanynon-controllinginterestintheacquireeeitheratfairvalueoratthenon-controllinginterest'sproportionateshareoftheacquiree'snetidentifiableassets.Theexcessoftheconsiderationtransferredandtheamountofanynon-controllinginterestintheacquireeoverthefairvalueofthenetidentifiableassetsacquiredisrecordedasgoodwill.Ifthoseamountsarelessthanthefairvalueofthenetidentifiableassetsofthesubsidiaryacquiredandthemeasurementofallamountshasbeenreviewed,thedifferenceisrecogniseddirectlyinprofitorlossasabargainpurchase.Wheresettlementofanypartofcashconsiderationisdeferred,theamountspayableinthefuturearediscountedtotheirpresentvalueasatthedateofexchange.Thediscountrateusedistheentity'sincrementalborrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtainedfromanindependentfinancierundercomparabletermsandconditions.Contingentconsiderationisclassifiedeitherasequityorafinancialliability.Amountsclassifiedasafinancialliabilityaresubsequentlyremeasuredtofairvaluewithchangesinfairvaluerecognisedinprofitorloss.(i)ImpairmentofassetsGoodwillandintangibleassetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment,ormorefrequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired.Otherassetsaretestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset'scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset'sfairvaluelesscoststosellandvalue-in-use.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashinflowswhicharelargelyindependentofthecashinflowsfromotherassetsorgroupsofassets(cash-generatingunits).Non-financialassetsotherthangoodwillthatsufferedanimpairmentarereviewedforpossiblereversaloftheimpairmentattheendofeachreportingperiod.(j)CashandcashequivalentsForcashflowstatementpresentationpurposes,cashandcashequivalentsincludescashonhand,depositsheldatcallwithfinancialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue,andbankoverdrafts.(k)TradereceivablesTradereceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.Tradereceivablesaregenerallydueforsettlementwithin30days.41 Notes to the Consolidated Financial Statements
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42 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(k)Tradereceivables(continued)Collectabilityoftradereceivablesisreviewedonanongoingbasis.Debtswhichareknowntobeuncollectiblearewrittenoffbyreducingthecarryingamountdirectly.Anallowanceaccount(provisionforimpairmentoftradereceivables)isusedwhenthereisobjectiveevidencethatthegroupwillnotbeabletocollectallamountsdueaccordingtotheoriginaltermsofthereceivables.Significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyorfinancialreorganisation,anddefaultordelinquencyinpayments(morethan30daysoverdue)areconsideredindicatorsthatthetradereceivableisimpaired.Theamountoftheimpairmentallowanceisthedifferencebetweentheasset'scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedattheoriginaleffectiveinterestrate.Cashflowsrelatingtoshort-termreceivablesarenotdiscountediftheeffectofdiscountingisimmaterial.Theamountoftheimpairmentlossisrecognisedintheprofitandlosswithin‘administrationandmanagementcosts’.Whenatradereceivableforwhichanimpairmentallowancehadbeenrecognisedbecomesuncollectibleinasubsequentperiod,itiswrittenoffagainsttheallowanceaccount.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainst'administrationandmanagementcosts'intheprofitandloss.(l)InventoriesContractworkinprogressContractworkinprogressisstatedattheaggregateofcontractcostsincurredtodateplusrecognisedprofitslessrecognisedlossesandprogressbillings.Iftherearecontractswhereprogressbillingsexceedtheaggregatecostsincurredplusprofitslesslosses,thenetamountispresentedunderotherliabilities.Contractcostsincludeallcostsdirectlyrelatedtospecificcontracts,coststhatarespecificallychargeabletothecustomerunderthetermsofthecontractandanallocationofoverheadexpensesincurredinconnectionwiththegroup'scontractactivitiesingeneral.(m)InvestmentsandotherfinancialassetsClassificationThegroupclassifiesitsfinancialassetsinthefollowingcategories:financialassetsatfairvaluethroughprofitorloss,loansandreceivablesandavailable-for-salefinancialassets.Theclassificationdependsonthepurposeforwhichtheinvestmentswereacquired.Managementdeterminestheclassificationofitsinvestmentsatinitialrecognitionandre-evaluatesthisdesignationateachreportingdate.(i)FinancialassetsatfairvaluethroughprofitorlossFinancialassetsatfairvaluethroughprofitandlossarefinancialassetsheld-for-trading.Afinancialassetisclassifiedinthiscategoryifacquiredprincipallyforthepurposeofsellingintheshortterm.Derivativesareclassifiedasheld-for-tradingunlesstheyaredesignatedashedges.Assetsinthiscategoryareclassifiedascurrentassets.(ii)LoansandreceivablesLoansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareincludedincurrentassets,exceptforthosewithmaturitiesgreaterthan12monthsafterthereportingperiodwhichareclassifiedasnon-currentassets.Loansandreceivablesareincludedintradeandotherreceivablesinthebalancesheet.(iii)Available-for-salefinancialassetsAvailable-for-salefinancialassets,comprisingprincipallymarketableequitysecurities,arenon-derivativesthatareeitherdesignatedinthiscategoryornotclassifiedinanyoftheothercategories.Theyareincludedinnon-currentassetsunlesstheinvestmentmaturesormanagementintendstodisposeoftheinvestmentwithin12monthsoftheendofthereportingperiod.Investmentsaredesignatedasavailable-for-saleiftheydonothavefixedmaturitiesandfixedordeterminablepaymentsandmanagementintendstoholdthemforthemediumtolong-term.42 Notes to the Consolidated Financial Statements
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LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(m)Investmentsandotherfinancialassets(continued)Financialassets-reclassificationThegroupmaychoosetoreclassifyanon-derivativetradingfinancialassetoutoftheheld-for-tradingcategoryifthefinancialassetisnolongerheldforthepurposeofsellingitinthenearterm.Financialassetsotherthanloansandreceivablesarepermittedtobereclassifiedoutoftheheld-for-tradingcategoryonlyinrarecircumstancesarisingfromasingleeventthatisunusualandhighlyunlikelytorecurinthenearterm.Inaddition,thegroupmaychoosetoreclassifyfinancialassetsthatwouldmeetthedefinitionofloansandreceivablesoutoftheheld-for-tradingoravailable-for-salecategoriesifthegrouphastheintentionandabilitytoholdthesefinancialassetsfortheforeseeablefutureoruntilmaturityatthedateofreclassification.Reclassificationsaremadeatfairvalueasofthereclassificationdate.Fairvaluebecomesthenewcostoramortisedcostasapplicable,andnoreversalsoffairvaluegainsorlossesrecordedbeforereclassificationdatearesubsequentlymade.Effectiveinterestratesforfinancialassetsreclassifiedtoloansandreceivablesaredeterminedatthereclassificationdate.Furtherincreasesinestimatesofcashflowsadjusteffectiveinterestratesprospectively.RecognitionandderecognitionRegularwaypurchasesandsalesoffinancialassetsarerecognisedontrade-date-thedateonwhichthegroupcommitstopurchaseorselltheasset.Financialassetsarederecognisedwhentherightstoreceivecashflowsfromthefinancialassetshaveexpiredorhavebeentransferredandthegrouphastransferredsubstantiallyalltherisksandrewardsofownership.Whensecuritiesclassifiedasavailable-for-salearesold,theaccumulatedfairvalueadjustmentsrecognisedinothercomprehensiveincomearereclassifiedtoprofitorlossasgainsandlossesfrominvestmentsecurities.MeasurementAtinitialrecognition,thegroupmeasuresafinancialassetatitsfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofitorloss,transactioncoststhataredirectlyattributabletotheacquisitionofthefinancialasset.Transactioncostsoffinancialassetscarriedatfairvaluethroughprofitorlossareexpensedinprofitorloss.Loansandreceivablesaresubsequentlycarriedatamortisedcostusingtheeffectiveinterestmethod.Available-for-salefinancialassetsandfinancialassetsatfairvaluethroughprofitorlossaresubsequentlycarriedatfairvalue.Gainsorlossesarisingfromchangesinthefairvalueofthe'financialassetsatfairvaluethroughprofitorloss'categoryarepresentedinprofitorlosswithinotherincomeorotherexpensesintheperiodinwhichtheyarise.Dividendincomefromfinancialassetsatfairvaluethroughprofitorlossisrecognisedinprofitorlossaspartofrevenuefromcontinuingoperationswhenthegroup'srighttoreceivepaymentsisestablished.Interestincomefromthesefinancialassetsisincludedinthenetgains/(losses).Changesinthefairvalueofmonetarysecuritiesdenominatedinaforeigncurrencyandclassifiedasavailable-for-saleareanalysedbetweentranslationdifferencesresultingfromchangesinamortisedcostofthesecurityandotherchangesinthecarryingamountofthesecurity.Thetranslationdifferencesrelatedtochangesintheamortisedcostarerecognisedinprofitorloss,andotherchangesincarryingamountarerecognisedinothercomprehensiveincome.Changesinthefairvalueofothermonetaryandnon-monetarysecuritiesclassifiedasavailable-for-salearerecognisedinothercomprehensiveincome.Detailsonhowthefairvalueoffinancialinstrumentsisdeterminedaredisclosedinnote2.43 Notes to the Consolidated Financial Statements
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44 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(m)Investmentsandotherfinancialassets(continued)ImpairmentThegroupassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethatafinancialassetoragroupoffinancialassetsisimpaired.Afinancialassetoragroupoffinancialassetsisimpairedandimpairmentlossesareincurredonlyifthereisobjectiveevidenceofimpairmentasaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset(a'lossevent')andthatlossevent(orevents)hasanimpactontheestimatedfuturecashflowsofthefinancialassetorgroupoffinancialassetsthatcanbereliablyestimated.Inthecaseofequityinvestmentsclassifiedasavailable-for-sale,asignificantorprolongeddeclineinthefairvalueofthesecuritybelowitscostisconsideredanindicatorthattheassetsareimpaired.(i)AssetscarriedatamortisedcostForloansandreceivables,theamountofthelossismeasuredasthedifferencebetweentheasset'scarryingamountandthepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesthathavenotbeenincurred)discountedatthefinancialasset'soriginaleffectiveinterestrate.Thecarryingamountoftheassetisreducedandtheamountofthelossisrecognisedinprofitorloss.Ifaloanhasavariableinterestrate,thediscountrateformeasuringanyimpairmentlossisthecurrenteffectiveinterestratedeterminedunderthecontract.Asapracticalexpedient,thegroupmaymeasureimpairmentonthebasisofaninstrument'sfairvalueusinganobservablemarketprice.If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised(suchasanimprovementinthedebtor'screditrating),thereversalofthepreviouslyrecognisedimpairmentlossisrecognisedinprofitorloss.Impairmenttestingoftradereceivablesisdescribedinnote1(k).(ii)Assetsclassifiedasavailable-for-saleIfthereisobjectiveevidenceofimpairmentforavailable-for-salefinancialassets,thecumulativeloss-measuredasthedifferencebetweentheacquisitioncostandthecurrentfairvalue,lessanyimpairmentlossonthatfinancialassetpreviouslyrecognisedinprofitorloss-isremovedfromequityandrecognisedinprofitorloss.Impairmentlossesonequityinstrumentsthatwererecognisedinprofitorlossarenotreversedthroughprofitorlossinasubsequentperiod.Ifthefairvalueofadebtinstrumentclassifiedasavailable-for-saleincreasesinasubsequentperiodandtheincreasecanbeobjectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognisedinprofitorloss,theimpairmentlossisreversedthroughprofitorloss.(n)DerivativesfinancialinstrumentsTheGroupentersintoforeignexchangeforwardcontractstomanageitsexposuretoforeignexchangeraterisk.FurtherdetailsofderivativefinancialinstrumentsaredisclosedinNote11(c).Derivativesareinitiallyrecognisedatfairvalueatthedateofthederivativecontractisenteredintoandaresubsequentlyremeasuredtotheirfairvalueattheendofeachreportingperiod.Theresultinggainorlossisrecognisedinprofitorlossimmediatelyunlessthederivativeisdesignatedandeffectiveasahedginginstrument,inwhicheventhetimingoftherecognitioninprofitorlossdependsonthenatureofthehedgerelationship.(o)Property,plantandequipmentProperty,plantandequipmentisstatedathistoricalcostlessdepreciation.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.Subsequentcostsareincludedintheasset'scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtothegroupandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofanycomponentaccountedforasaseparateassetisderecognisedwhenreplaced.Allotherrepairsandmaintenancearechargedtoprofitorlossduringthereportingperiodinwhichtheyareincurred.44 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 45
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(o)Property,plantandequipment(continued)Depreciationonplantandequipmentiscalculatedusingthestraightlineordiminishingvaluemethodtoallocatetheircost,netoftheirresidualvalues,overtheirestimatedusefullives,asfollows:-Plantandequipment3-10years-Vehicles5-7years-Furniture,fittingsandequipment3-8years-Leaseholdimprovements3-6years-Leasedplantandequipment3-5yearsTheassets'residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.Anasset'scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset'scarryingamountisgreaterthanitsestimatedrecoverableamount(note1(i)).Gainsandlossesondisposalsaredeterminedbycomparingproceedswithcarryingamount.Theseareincludedintheprofitandloss.(p)Intangibleassets(i)GoodwillGoodwillismeasuredasdescribedinnote1(h).Goodwillonacquisitionsofsubsidiariesisincludedinintangibleassets.Goodwillisnotamortisedbutitistestedforimpairmentannually,ormorefrequentlyifeventsorchangesincircumstancesindicatethatitmightbeimpaired,andiscarriedatcostlessaccumulatedimpairmentlosses.Gainsandlossesonthedisposalofanentityincludethecarryingamountofgoodwillrelatingtotheentitysold.Goodwillisallocatedtocash-generatingunitsforthepurposeofimpairmenttesting.Theallocationismadetothosecash-generatingunitsorgroupsofcash-generatingunitsthatareexpectedtobenefitfromthebusinesscombinationinwhichthegoodwillarose,identifiedaccordingtooperatingsegments(note4).(ii)CustomercontractsCustomercontractsacquiredaspartofabusinesscombinationarerecognisedseparatelyfromgoodwill.Thecustomercontractsarecarriedattheirfairvalueatthedateofacquisitionlessaccumulatedamortisationandimpairmentlosses.Amortisationiscalculatedbasedonthetimingofprojectedcashflowsofthecontractsovertheirestimatedusefullives,whichcurrentlyvaryfrom1to5years.(iii)SoftwareIntangibleassetsalsocomprisecapitalisedcomputersoftware.Computersoftwarehasafiniteusefullifeandiscarriedatcostlessaccumulatedamortisation.Amortisationiscalculatedusingthestraightlinemethodtoallocatethecostofthecomputersoftwareovertheirestimatedusefullives,being3years.(q)TradeandotherpayablesTheseamountsrepresentliabilitiesforgoodsandservicesprovidedtothegrouppriortotheendoffinancialyearwhichareunpaid.Theamountsareunsecuredandareusuallypaidwithin30daysofrecognition.Tradeandotherpayablesarepresentedascurrentliabilitiesunlesspaymentisnotduewithin12monthsfromthereportingdate.Theyarerecognisedinitiallyattheirfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.(r)BorrowingsBorrowingsareinitiallyrecognisedatfairvalue,netoftransactioncostsincurred.Borrowingsaresubsequentlymeasuredatamortisedcost.Anydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionamountisrecognisedinprofitorlossovertheperiodoftheborrowingsusingtheeffectiveinterestmethod.45 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
46 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(r)Borrowings(continued)Borrowingsareremovedfromthebalancesheetwhentheobligationspecifiedinthecontractisdischarged,cancelledorexpired.Thedifferencebetweenthecarryingamountofafinancialliabilitythathasbeenextinguishedortransferredtoanotherpartyandtheconsiderationpaid,includinganynon-cashassetstransferredorliabilitiesassumed,isrecognisedinprofitorlossasotherincomeorfinancecosts.Borrowingsareclassifiedascurrentliabilitiesunlessthegrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthereportingperiod.(s)BorrowingcostsBorrowingcostsincurredfortheconstructionofanyqualifyingassetarecapitalisedduringtheperiodoftimethatisrequiredtocompleteandpreparetheassetforitsintendeduseorsale.Otherborrowingcostsareexpensed.(t)ProvisionsProvisionsforlegalclaims,servicewarrantiesandmakegoodobligationsarerecognisedwhenthegrouphasapresentlegalorconstructiveobligationasaresultofpastevents,itisprobablethatanoutflowofresourceswillberequiredtosettletheobligationandtheamounthasbeenreliablyestimated.Provisionsarenotrecognisedforfutureoperatinglosses.Wherethereareanumberofsimilarobligations,thelikelihoodthatanoutflowwillberequiredinsettlementisdeterminedbyconsideringtheclassofobligationsasawhole.Aprovisionisrecognisedevenifthelikelihoodofanoutflowwithrespecttoanyoneitemincludedinthesameclassofobligationsmaybesmall.Provisionsaremeasuredatthepresentvalueofmanagement'sbestestimateoftheexpenditurerequiredtosettlethepresentobligationattheendofthereportingperiod.Thediscountrateusedtodeterminethepresentvalueisapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.Theincreaseintheprovisionduetothepassageoftimeisrecognisedasinterestexpense.(u)Employeebenefits(i)Short-termobligationsLiabilitiesforwagesandsalaries,includingnon-monetarybenefitsexpectedtobesettledwhollywithin12monthsaftertheendoftheperiodinwhichtheemployeesrendertherelatedservicesarerecognisedinrespectofemployees'servicesuptotheendofthereportingperiodandaremeasuredattheamountsexpectedtobepaidwhentheliabilitiesaresettled.Allothershort-termemployeebenefitobligationsarepresentedaspayables.(ii)Otherlong-termemployeebenefitsobligationsTheliabilityforlongserviceleaveandannualleavewhichisnotexpectedtobesettledwhollywithin12monthsaftertheendoftheperiodinwhichtheemployeesrendertherelatedserviceisthereforerecognisedintheprovisionforemployeebenefitsandmeasuredasthepresentvalueofexpectedfuturepaymentstobemadeinrespectofservicesprovidedbyemployeesuptotheendofthereportingperiodusingtheprojectedunitcreditmethod.Considerationisgiventoexpectedfuturewageandsalarylevels,experienceofemployeedeparturesandperiodsofservice.Expectedfuturepaymentsarediscountedusingmarketyieldsattheendofthereportingperiodofhighqualitycorporatebondswithtermsandcurrencythatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.Remeasurementsasaresultofexperienceadjustmentsandchangesinactuarialassumptionsarerecognisedinprofitorloss.Theobligationsarepresentedascurrentliabilitiesintheconsolidatedbalancesheetiftheentitydoesnothaveanunconditionalrighttodefersettlementforatleasttwelvemonthsafterthereportingdate,regardlessofwhentheactualsettlementisexpectedtooccur.46 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 47
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(u)Employeebenefits(continued)(iii)RetirementbenefitobligationsContributionstodefinedcontributionfundsarerecognisedasanexpenseastheybecomepayable.Prepaidcontributionsarerecognisedasanassettotheextentthatacashrefundorareductioninthefuturepaymentsisavailable.(iv)Share-basedpaymentsShare-basedcompensationbenefitsareprovidedtocertainexecutivedirectorsandotherdesignatedemployeesviathePerformanceRightsPlans.Informationrelatingtothisschemeissetoutinnote33.ThefairvalueofrightsgrantedunderthePerformanceRightsPlansarerecognisedasanemployeebenefitexpensewithacorrespondingincreaseinequity.Thefairvalueismeasuredatgrantdateandrecognisedovertheperiodduringwhichtheemployeesbecomeunconditionallyentitledtotheoptions.ThefairvalueatgrantdateisindependentlydeterminedusingaBinomialTreeoptionpricingmodelthattakesintoaccounttheexerciseprice,thetermoftheoption,thevestingandperformancecriteria,theimpactofdilution,thenon-tradeablenatureoftheoption,thesharepriceatgrantdateandexpectedpricevolatilityoftheunderlyingshare,theexpecteddividendyieldandtherisk-freeinterestrateforthetermoftheoption.(v)SeniormanagershareacquisitionplanTheseniormanagershareacquisitionplanwasapprovedatthecompany'sAnnualGeneralMeetingon24November2009.TheaimoftheplanwastoallowtheBoardtoassistmanagers,whointheBoard'sopinionhavedemonstratedthequalitiesanddedicationtobecomethenextgenerationofseniormanagers,totakeupasignificantshareholdingsoastoensuretheircommitmentandthefutureofthecompany.EligibleSeniorManagersincludebothfull-timeseniormanagersandexecutivedirectorsofthegrouporsuchotherpersonsastheBoarddetermines.Abroadoutlineoftheplanissummarisedbelow:•ThecompanywillloanfundstoparticipatingSeniorManagerstopurchaseLycopodiumLimitedsharesviatheLycopodiumSharePlanTrust.•TheloanwillbealimitedrecourseloanprovidedtheSeniorManagerstayswiththegroupforgreaterthan3years.•TheloanwillbeinterestfreeiftheSeniorManagerremainsemployedbythegroupforgreaterthan3years.•IntheeventthattheSeniorManagerleaveswithin3years,interestwillbechargedequaltothemarketrateofinterestthatwouldhaveaccruedontheloanfromthedateofadvanceofthefundstotherepaymentdate.•Duringthetermoftheloan,dividendswillbeoffsetagainsttheoutstandingloanbalance.•ThesharesareallocatedtotheSeniorManagersata1centdiscounttothevolumeweightedaverageofthepricesatwhichthesharesofLycopodiumLimitedweretradedontheASXduringtheoneweekperioduptoandincludingthedateofallocation.Thegrouphasthefollowingastheresultofthistransaction:SharebasedpaymentThedifferencebetweenthevalueofthesharespurchasedandthevalueofthesharesallocatedtotheseniormanagersrepresentsthecosttothecompanyforprovidingtheloantotheemployees.Thisamountisexpensedintheprofitandloss.47 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
48 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(u)Employeebenefits(continued)(v)Seniormanagershareacquisitionplan(continued)EmbeddedderivativeTheseniormanagerloanreceivableisaloanwithanembeddedderivativewiththeseniormanagerhavinganoptiontoputbackthesharetothegroupinfullsettlementoftheloanafterthe3yearperiod.Astheembeddedderivativeiscloselyrelatedtotheseniormanagerloan,thefinancialinstrumentismeasuredatfairvaluethroughprofitorloss.(v)ContributedequityOrdinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesareshowninequityasadeduction,netoftax,fromtheproceeds.(w)DividendsProvisionismadefortheamountofanydividenddeclared,beingappropriatelyauthorisedandnolongeratthediscretionoftheentity,onorbeforetheendofthereportingperiodbutnotdistributedattheendofthereportingperiod.(x)Earningspershare(i)BasicearningspershareBasicearningspershareiscalculatedbydividing:•theprofitattributabletoownersoftheCompany,excludinganycostsofservicingequityotherthanordinaryshares•bytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear,adjustedforbonuselementsinordinarysharesissuedduringtheyear.(ii)DilutedearningspershareDilutedearningspershareadjuststhefiguresusedinthedeterminationofbasicearningspersharetotakeintoaccount:•theafterincometaxeffectofinterestandotherfinancingcostsassociatedwithdilutivepotentialordinaryshares,and•theweightedaveragenumberofadditionalordinarysharesthatwouldhavebeenoutstandingassumingtheconversionofalldilutivepotentialordinaryshares.(y)GoodsandServicesTax(GST)Revenues,expensesandassetsarerecognisednetoftheamountofassociatedGST,unlesstheGSTincurredisnotrecoverablefromthetaxationauthority.Inthiscaseitisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpense.ReceivablesandpayablesarestatedinclusiveoftheamountofGSTreceivableorpayable.ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedwithotherreceivablesorpayablesintheconsolidatedbalancesheet.Cashflowsarepresentedonagrossbasis.TheGSTcomponentsofcashflowsarisingfrominvestingorfinancingactivitieswhicharerecoverablefrom,orpayabletothetaxationauthority,arepresentedasoperatingcashflows.48 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 49
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1 Summary of significant accounting policies (continued)(z) New accounting standards not yet effectiveCertain new accounting standards and interpretations have been published that are not mandatory for 30 June 2018 reporting periods. The group's assessment of the impact of these new standards and interpretations is set out below.(i) AASB 9 Financial InstrumentsAASB 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.The company has performed its detailed assessment. When this standard is first adopted for the year ending 30 June 2019, there will be no material impact on the transactions and balances recognised in the financial statements.(ii) AASB 15 Revenue from Contracts with CustomersAASB 15 replaces AASB 118: Revenue, AASB 111 Construction Contracts and some revenue-related Interpretations. In summary, AASB 15:•establishesanewrevenuerecognitionmodel;•changesthebasisfordecidingwhetherrevenueistoberecognisedovertimeatapointintime;•providesanewandmoredetailedguidanceonspecifictopics(egmultipleelementarrangements,variablepricing,rightsofreturnandwarranties);and•expandsandimprovesdisclosuresaboutrevenue.The company has performed its detailed assessment. When this standard is first adopted for the year ending 30 June 2019, there will be no material impact on the transactions and balances recognised in the financial statements.(iii)AASB16LeasesAASB16replacesAASB117Leasesandsomelease-relatedInterpretations.Insummary,AASB16:•requiresallleasestobeaccountedfor‘on-balancesheet’bylessees,otherthanshort-termandlowvalueassetleases;•providesnewguidanceontheapplicationofthedefinitionofleaseandonsaleandleasebackaccounting;•largelyretainstheexistinglessoraccountingrequirementsinAASB117;and•requiresnewanddifferentdisclosuresaboutleases.Basedontheentity’spreliminaryassessment,thelikelyimpactonthefirsttimeadoptionoftheStandardfortheyearending30June2020includes:•asignificantincreaseinleaseassetsandfinancialliabilitiesrecognisedonthebalancesheet;•thereportedequitywillreduceasthecarryingamountofleaseassetswillreducemorequicklythanthecarryingamountofleaseliabilities;•EBITinthestatementofprofitorlossandothercomprehensiveincomewillbehigherastheimplicitinterestinleasepaymentsforformeroffbalancesheetleaseswillbepresentedaspartoffinancecostsratherthanbeingincludedinoperatingexpenses;49 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
50 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)1Summaryofsignificantaccountingpolicies(continued)(z)Newaccountingstandardsnotyeteffective(continued)(iii)(continued)•operatingcashoutflowswillbelowerandfinancingcashflowswillbehigherinthestatementofcashflowsasprincipalrepaymentsonallleaseliabilitieswillnowbeincludedinfinancingactivitiesratherthanoperatingactivities.Interestcanalsobeincludedwithinfinancingactivities.(aa)ParententityfinancialinformationThefinancialinformationfortheparententity,LycopodiumLimited,disclosedinnote34hasbeenpreparedonthesamebasisastheconsolidatedfinancialreport,exceptassetoutbelow.(i)Investmentsinsubsidiaries,associatesandjointventureentitiesInvestmentsinsubsidiaries,associatesandjointventureentitiesareaccountedforatcostinthefinancialreportofLycopodiumLimited.Dividendsreceivedfromassociatesarerecognisedintheparententity'sprofitorloss,ratherthanbeingdeductedfromthecarryingamountoftheseinvestments.(ii)SharebasedpaymentsThegrantbytheCompanyofoptionsoveritsequityinstrumentstotheemployeesofsubsidiaryundertakingsinthegroupistreatedasacapitalcontributiontothatsubsidiaryundertaking.Thefairvalueofemployeeservicesreceived,measuredbyreferencetothegrantdatefairvalue,isrecognisedoverthevestingperiodasanincreasetoinvestmentinsubsidiaryundertakings,withacorrespondingcredittoequity.50 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 51
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)2FinancialriskmanagementThegroupmanagesitsexposuretokeyfinancialrisks,includinginterestrateandcurrencyriskinaccordancewiththegroup'sfinancialriskmanagementpolicy.Theobjectiveofthepolicyistosupportthedeliveryofthegroup'sfinancialtargetswhilstprotectingfuturefinancialsecurity.Themainrisksarisingfromthegroup'sfinancialinstrumentsareinterestraterisk,foreigncurrencyrisk,creditriskandliquidityrisk.Thegroupusesdifferentmethodstomeasureandmanagedifferenttypesofriskstowhichitisexposed.Theseincludemonitoringlevelsofexposuretointerestrateandforeignexchangeriskandassessmentsofmarketforecastsforinterestratesandforeignexchange.Ageinganalysesandmonitoringofspecificcreditallowancesareundertakentomanagecreditrisk,andliquidityriskismonitoredthroughthedevelopmentoffuturerollingcashflowforecasts.TheprimaryresponsibilityforidentificationandcontroloffinancialrisksrestswiththeBoard.TheBoardreviewsandagreespoliciesformanagingeachoftherisksidentifiedabove.(a)Marketrisk(i)ForeignexchangeriskThegroupoperatesinternationallyandisexposedtoforeignexchangeriskarisingfromvariouscurrencyexposures,primarilywithrespecttotheUSdollar(USD)andPhilippinePeso(PHP).Exchangerateexposuresaremanagedwithapprovedpolicyparametersutilisingforwardexchangecontracts.Foreignexchangeriskariseswhenfuturecommercialtransactionsandrecognisedfinancialassetsandfinancialliabilitiesaredenominatedinacurrencythatisnottheentity’sfunctionalcurrency.Thegroup'sexposuretoforeigncurrencyriskatthereportingperiod,expressedinAustraliandollar,wasasfollows:30June201830June2017USD$PHP$USD$PHP$Cashandcashequivalents4,340,880197,52026,491,471203,126Tradeandotherreceivables-35,411-32,356Othercurrentassets-623,895-184,017Tradeandotherpayables(2,660,357)(207,859)(10,621,049)(161,669)Netexposure1,680,523648,96715,870,422257,830GroupsensitivityBasedonthefinancialinstrumentsheldat30June2018,hadtheAustraliandollarweakened/strengthenedby10%againsttheUSdollarwithallothervariablesheldconstant,thegroup'spost-taxprofitandequityfortheyearwouldhavebeen$168,052higher/$168,052lower(2017:$1,587,042higher/$1,587,042lower),mainlyasaresultofforeignexchangegains/lossesontranslationofUSdollardenominatedfinancialinstrumentsasdetailedintheabovetable.ProfitislesssensitivetomovementsintheAustraliandollar/USdollarexchangeratesin2018than2017becauseoftheloweramountofUSdollardenominatedcashandcashequivalents.Basedonthefinancialinstrumentsheldat30June2018,hadtheAustraliandollarweakened/strengthenedby10%againstthePhilippinePesowithallothervariablesheldconstant,thegroup'spost-taxprofitandequityfortheyearwouldhavebeen$64,897higher/$64,897lower(2017:$25,783higher/$25,783lower),mainlyasaresultofforeignexchangegains/lossesontranslationofPhilippinePesodenominatedfinancialinstrumentsasdetailedintheabovetable.ProfitismoresensitivetomovementsintheAustraliandollar/PhilippinePesoexchangeratesin2018than2017mainlybecauseofthehigheramountofPhilippinePesodenominatedcashandcashequivalents.51 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
52 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)2Financialriskmanagement(continued)(a)Marketrisk(continued)(i)Foreignexchangerisk(continued)Exposurestoforeignexchangeratesvaryduringtheyeardependingonthevolumeofoverseastransactions.Nonetheless,theanalysisaboveisconsideredtoberepresentativeoftheGroup’sexposuretocurrencyrisk.(ii)PriceriskThegroupisexposedtoequitysecuritiespriceriskwiththeexposure,however,beingminimal.Equitysecuritiespriceriskarisesfrominvestmentsinequitysecurities.TheequityinvestmentsarepubliclytradedontheAustralianSecuritiesExchange("ASX").Thepriceriskforthelistedsecuritiesisimmaterialintermsofapossibleimpactonprofitandlossortotalequityandassuchasensitivityanalysishasnotbeencompleted.ThegroupdoesnothaveariskmanagementpolicysurroundingpriceriskinplaceastheBoardconsiderstheriskminimal.(iii)InterestrateriskThegroupisexposedtointerestrateriskarisingmainlyfromborrowingsandcashbalancesheld.Theriskisconsideredminimalasthegroup'sborrowingsareminimal.ThegroupdoesnotenterintoanyspecificswapsorhedgestocoveranyinterestratevolatilityanddoesnothaveariskmanagementpolicysurroundingcashflowandinterestrateriskastheBoardconsiderstheseriskstobeminimal.GroupsensitivityAt30June2018,ifinterestrateshadchangedby-/+50basispointsfromtheyearendrateswithallothervariablesheldconstant,post-taxprofitandequityfortheyearwouldhavebeen$259,482lower/higher(2017:-/+50basispoints:$298,419lower/higher),asaresultoflower/higherinterestincomefromcashandcashequivalents.(b)CreditriskCreditriskarisesfromthefinancialassetsofthegroup,whichcomprisecashandcashequivalents,tradeandotherreceivablesandothercurrentassets.Thegroup'sexposuretocreditriskarisesfrompotentialdefaultofthecounterparty,withamaximumexposureequaltothecarryingamountoftheseinstruments.Otherreceivablescomprisesoftheloanundertheseniormanagementshareacquisitionplan.Thegroupisnotexposedtocreditriskastheloanissecuredunderthetermsoftheloan(note1(u)).52 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 53
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)2Financialriskmanagement(continued)(b)Creditrisk(continued)Thecarryingamountoffinancialassetsrepresentsthemaximumcreditexposure.Themaximumexposuretocreditriskatthereportingdatewas:Consolidated2018$2017$Cashandcashequivalents74,287,78885,334,768Tradeandotherreceivables37,616,63736,919,288Depositsheldwithbanks(note10)778,401569,742112,682,826122,823,798CashandcashequivalentsThecreditriskoncashandcashequivalentsislimitedbecausethegroup'sprimarybankisratedAA-byaninternationalcredit-ratingagency.TradeandotherreceivablesThegroup’sexposuretocreditriskisinfluencedmainlybytheindividualcharacteristicsofeachcustomer.However,managementalsoconsidersthedemographicsofthegroup’scustomerbase,includingthedefaultriskoftheindustryandcountryinwhichcustomersoperate,asthesefactorsmayhaveaninfluenceoncreditrisk.Thegrouptradesonlywithrecognised,creditworthythirdparties,andassuchcollateralisnotrequestednorisitthegroup'spolicytosecuritiseitstradeandotherreceivables.Allreceivablesatbalancedatethatareneitherpastduenorimpairedcomplywiththegroup'spolicyoncreditquality.Itisthegroup'spolicythatallcustomerswhowishtotradeoncredittermsaresubjecttocreditverificationproceduresincludinganassessmentoftheirindependentcreditrating,financialposition,pastexperienceandindustryreputation.Inaddition,receivablebalancesaremonitoredonanongoingbasiswiththeresultthatthegroup'sexposuretobaddebtsisminimised.Therearenosignificantconcentrationsofcreditriskwithinthegroup.Thegroupminimisesconcentrationsofcreditriskinrelationtotradereceivablesbyundertakingtransactionswithanumberofcustomersthatoperatepredominantlyintheminingandextractiveindustrysectorincludingthemajorplayersintheindustryandthejunior/emergingplayers.Therearemultiplecontractswithoursignificantcustomers,acrossanumberoftheirsubsidiaries,divisionswithinthosesubsidiariesandlocations.DepositsheldwithbanksThecreditriskondepositsheldwithbanksarelimitedastheycomprisedepositsheldwithbankswithhighcreditratingsassignedbyinternationalcredit-ratingagencies.(c)LiquidityriskPrudentliquidityriskmanagementimpliesmaintainingsufficientcashandmarketablesecuritiesandtheavailabilityoffundingthroughanadequateamountofcommittedcreditfacilities.Thegroupmanagesliquidityriskbycontinuouslymonitoringforecastandactualcashflowsandmatchingthematurityprofilesoffinancialassetsandliabilities.53 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
54 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)2Financialriskmanagement(continued)(c)Liquidityrisk(continued)FinancingarrangementsThegrouphadaccesstothefollowingundrawnborrowingfacilitiesatthereportingdate:Consolidated2018$2017$Leasingfacility1,523,0001,850,000Standbycreditfacility10,784,32811,658Insurancebonds14,119,2393,238,47926,426,5675,100,137MaturitiesoffinancialliabilitiesThefollowingtablesdetailthegroup'sremainingcontractualmaturityforitsnon-derivativefinancialliabilities.Thetableshavebeendrawnupbasedontheundiscountedcashflowsoffinancialliabilitiesbasedontheearliestdateonwhichthegroupcanberequiredtopay.Thetableincludesbothinterestandprincipalcashflows.1yearorlessBetween1and2yearsBetween2and5yearsOver5yearsTotalcontrac-tualcashflowsCarryingamountliabilitiesConsolidated-At30June2018$$$$$$Non-derivativesTradepayables-----12,980,390Insurancepremiumfunding218,689---218,689218,689Financeleaseliabilities526,584516,25169,693-1,112,5281,040,282Total745,273516,25169,693-1,331,21714,239,361Consolidated-At30June20171yearorless$Between1and2years$Between2and5years$Over5years$Totalcontrac-tualcashflows$Carryingamountliabilities$Non-derivativesTradepayables23,401,728---23,401,72823,401,728Insurancepremiumfunding121,247---121,247121,247Financeleaseliabilities450,053450,053439,719-1,339,8251,221,396Total23,973,028450,053439,719-24,862,80024,744,37154 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 55
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)2Financialriskmanagement(continued)(c)Liquidityrisk(continued)InassessingandmanagingliquidityrisksofitsderivativefinancialinstrumentstheGroupconsidersbothcontractualinflowsandoutflows.ThecontractualcashflowsoftheGroup’sderivativefinancialassetsandliabilitiesareallcurrent(within12months).Derivativefinancialinstrumentsreflectforwardexchangecontracts(seeNote11(c))thatwillbesettledonagrossbasis.3CriticalaccountingestimatesandjudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatmayhaveafinancialimpactontheentityandthatarebelievedtobereasonableunderthecircumstances.(a)CriticalaccountingestimatesandassumptionsThegroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.(i)ImpairmenttestingofgoodwillThegrouptestsannuallywhethergoodwillhassufferedanyimpairment,inaccordancewiththeaccountingpolicystatedinnote1(i).Therecoverableamountsofcash-generatingunitshavebeendeterminedbasedonvalue-in-usecalculations.Thesecalculationsrequiretheuseofassumptions.Refertonote16fordetailsoftheseassumptionsandthepotentialimpactofchangestotheassumptions.(ii)ServiceandequipmentwarrantiesInaccordancewiththeaccountingpolicystatedinnote1(t),thegrouphasrecognisedwarrantyprovisionsattheendofthefinancialyearinrespectofpotentialclaimsforrectificationworkonsomeofitsEPCcontracts.Refertonote18inrelationtotheservicewarrantyprovisionsprovidedatperiodend.Theamountsprovidedtakesintoaccountthepercentagecompletionoftheproject,forecasttocompletecostsplusanyclose-outobligationsandpotentialcontractualliabilitiesduringthewarrantyperiod.(iii)Fixed-pricecontractsThegroupusesthepercentageofcompletionmethodinaccountingforitsrevenuefromfixed-sumcontracts.Thestageofcompletionismeasuredbyreferencetothecontractcostsincurredtodatecomparedtotheestimatedtotalcostsforthecontract.Significantassumptionsarerequiredtoestimatethetotalcontractcostsandtherecoverablevariationsworkthatwillaffectthestageofcompletionandthecontractrevenuerespectively.Inmakingtheseestimates,thegrouphasreliedonpastexperienceandbestavailableinformation.55 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
56 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)4Segmentinformation(a)DescriptionofsegmentsManagementhasdeterminedtheoperatingsegmentsbasedonthereportsreviewedbytheBoardofDirectorsthatareusedtomakestrategicdecisions.TheBoardconsidersthebusinessfrombothaproductandgeographicperspectiveandhasidentifiednineoperatingsegmentsofwhichfour(2017:four)arereportableinaccordancewiththerequirementsofAASB8.TheCorporateServicessegmentconsistsofmanagerialandlegalservicesprovidedtothegroupinadditiontostrategicinvestmentholdings.TheMineralssegmentconsistsofengineeringandrelatedservicesprovidedtotheextractiveminingindustry.Theclients,includingjuniorexplorationcompaniesandmajormultinationalproducers,aredevelopingprojectsforawiderangeofcommodities.Theseprojectsrangeinscopefromlargegreenfieldprojectsinvolvingprocessplantandequipment,civil,buildingworks,controlsystems,servicesandinfrastructuretosmallskid-mountedpilotplants.TheProcessIndustriessegmentconsistsofengineeringandrelatedservicesprovidedtothemanufacturingandrenewableenergyfacilitiesthroughoutAustraliaandSouthEastAsia.TheProjectServices-Africasegmentconsistsofprojectmanagement.constructionmanagementandcommissioningservicesprovidedtotheextractiveminingindustryinAfrica.Allotheroperatingsegmentsarenotreportableoperatingsegments,astheyfallunderthequantitativethresholdsofAASB8.Theresultsoftheseoperationsareincludedinthe'Other'column.Theremainingoperatingsegmentsthatarenotreportableconsistsof:Infrastructure:assetmanagement,engineering,architecturalandprojectdeliveryservicestoawiderangeofprivateandpublicclientsacrossAustralia.Metallurgical:metallurgicalconsultingprovidingarangeofservicestothemineralprocessingcommunity,primarilyinthefieldofcomminution,hydrometallurgyandmineralprocessingdesign.ProjectServicesAsia:provisionofdraftingservicestooffshoreLycopodiumentities.(b)SegmentinformationprovidedtotheBoardofDirectorsThesegmentinformationprovidedtotheBoardofDirectorsforthereportablesegmentsfortheyearended30June2018and30June2017areasfollows:56 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Corporate
Services
2018
Asia Pacific
Minerals
North
America
Africa
Project
Services -
Africa
Industrial
Process
Other
Total
Total segment revenue
$
14,216,665
$
117,526,791
$
17,163,303
$
32,692,363
$
22,382,754
$
9,840,954
$
24,019,294
$
237,842,124
Inter-segment revenue
(13,580,951)
(4,659,510)
(6,777,315)
-
(8,665,611)
(334,146)
(9,255,700)
(43,273,233)
Revenue from external
customers
Profit / (Loss)
before tax
Interest in the profit of
equity accounted joint
ventures
Depreciation and
amortisation
Income tax benefit /
(expense)
635,714
112,867,281
10,385,988
32,692,363
13,717,143
9,506,808
14,763,594
194,568,891
(378,949)
18,004,649
1,167,134
1,705,232
4,559,880
(76,389)
1,403,966
26,385,523
696,487
416,194
-
-
-
-
-
1,112,681
153
716,478
70,962
219,818
1,653
59,249
160,166
1,228,479
443,258
(4,916,146)
(302,819)
(776,598)
(1,179,354)
(52,701)
(172,728)
(6,957,088)
Total segment assets
22,478,193
65,123,623
9,446,818
17,106,363
7,641,097
5,118,600
11,782,914
138,697,608
Total assets includes:
Investment in joint
ventures
Additions to non-current
assets (other than
financial assets and
deferred tax)
Total segment
liabilities
1,493,641
1,274,049
-
-
-
864,816
129,863
256,563
-
-
-
-
2,767,690
142,493
543,909
1,937,644
1,502,239
39,225,091
5,982,709
5,876,314
5,772,947
2,753,378
4,308,836
65,421,514
Lycopodium Annual Financial Report 2018 • 57
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)4Segmentinformation(continued)(b)SegmentinformationprovidedtotheBoardofDirectors(continued)CorporateServicesMineralsProjectServices-AfricaIndustrialProcessOther2018AsiaPacificNorthAmericaAfricaTotal$$$$$$$$Totalsegmentrevenue14,216,665117,526,79117,163,30332,692,36322,382,7549,840,95424,019,294237,842,124Inter-segmentrevenue(13,580,951)(4,659,510)(6,777,315)(8,665,611)(334,146)(9,255,700)(43,273,233)Revenuefromexternalcustomers635,714112,867,28110,385,98832,692,36313,717,1439,506,80814,763,594194,568,891Profit/(Loss)beforetax(378,949)18,004,6491,167,1341,705,2324,559,880(76,389)1,403,96626,385,523Interestintheprofitofequityaccountedjointventures696,487416,194-----1,112,681Depreciationandamortisation153716,47870,962219,8181,65359,249160,1661,228,479Incometaxbenefit/(expense)443,258(4,916,146)(302,819)(776,598)(1,179,354)(52,701)(172,728)(6,957,088)Totalsegmentassets22,478,19365,123,6239,446,81817,106,3637,641,0975,118,60011,782,914138,697,608Totalassetsincludes:Investmentinjointventures1,493,6411,274,049-----2,767,690Additionstonon-currentassets(otherthanfinancialassetsanddeferredtax)-864,816129,863256,563-142,493543,9091,937,644Totalsegmentliabilities1,502,23939,225,0915,982,7095,876,3145,772,9472,753,3784,308,83665,421,51457 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Corporate
Services
2017
Asia Pacific
Minerals
North
America
Africa
Project
Services -
Africa
Industrial
Process
Other
Total
Total segment revenue
$
14,854,323
$
137,132,984
$
21,649,588
$
41,116,856
$
16,834,804
$
4,179,161
$
21,989,969
$
257,757,685
Inter-segment revenue
(14,741,676)
(3,427,752)
(7,614,681)
(114,273)
(5,316,980)
(353,497)
(9,572,384)
(41,141,243)
Revenue from external
customers
Profit / (Loss)
before tax
Interest in the profit of
equity accounted joint
ventures
Depreciation and
amortisation
Income tax benefit /
(expense)
112,647
133,705,232
14,034,907
41,002,583
11,517,824
3,825,664
12,417,585
216,616,442
788,088
9,080,813
(746,232)
984,779
2,784,941
(199,343)
1,877,816
14,570,862
927,295
91,956
-
-
-
-
-
1,019,251
153
593,629
76,075
309,152
3,831
31,048
157,876
1,171,764
711,881
(2,910,830)
80,616
(650,065)
(402,807)
59,258
(822,144)
(3,934,091)
Total segment assets
22,748,913
66,636,322
4,725,219
17,556,315
14,545,417
4,082,881
10,070,508
140,365,575
Total assets includes:
Investment in joint
ventures
Additions to non-current
assets (other than
financial assets and
deferred tax)
Total segment
liabilities
1,369,880
857,855
-
-
-
1,482,555
16,935
58,764
-
-
-
-
2,227,735
1,398
205,939
1,765,591
3,749,923
49,142,644
2,461,174
6,374,583
11,501,412
1,588,570
3,386,944
78,205,250
58 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)4Segmentinformation(continued)(b)SegmentinformationprovidedtotheBoardofDirectors(continued)CorporateServicesMineralsProjectServices-AfricaIndustrialProcessOther2018AsiaPacificNorthAmericaAfricaTotal$$$$$$$$Totalsegmentrevenue14,216,665117,526,79117,163,30332,692,36322,382,7549,840,95424,019,294237,842,124Inter-segmentrevenue(13,580,951)(4,659,510)(6,777,315)(8,665,611)(334,146)(9,255,700)(43,273,233)Revenuefromexternalcustomers635,714112,867,28110,385,98832,692,36313,717,1439,506,80814,763,594194,568,891Profit/(Loss)beforetax(378,949)18,004,6491,167,1341,705,2324,559,880(76,389)1,403,96626,385,523Interestintheprofitofequityaccountedjointventures696,487416,194-----1,112,681Depreciationandamortisation153716,47870,962219,8181,65359,249160,1661,228,479Incometaxbenefit/(expense)443,258(4,916,146)(302,819)(776,598)(1,179,354)(52,701)(172,728)(6,957,088)Totalsegmentassets22,478,19365,123,6239,446,81817,106,3637,641,0975,118,60011,782,914138,697,608Totalassetsincludes:Investmentinjointventures1,493,6411,274,049-----2,767,690Additionstonon-currentassets(otherthanfinancialassetsanddeferredtax)-864,816129,863256,563-142,493543,9091,937,644Totalsegmentliabilities1,502,23939,225,0915,982,7095,876,3145,772,9472,753,3784,308,83665,421,51457 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 59
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)4Segmentinformation(continued)(c)Othersegmentinformation(i)SegmentrevenueSalesbetweensegmentsarecarriedoutatarm'slengthandareeliminatedonconsolidation.TherevenuefromexternalpartiesreportedtotheboardofDirectorsismeasuredinamannerconsistentwiththatintheconsolidatedstatementofprofitorlossandothercomprehensiveincome.TheentityisdomiciledinAustralia.TheresultofitsrevenuefromexternalcustomersinAustraliais$59,271,697(2017:$24,016,675),andthetotalofrevenuefromexternalcustomersfromothercountriesis$135,297,193(2017:$192,599,767).Segmentrevenuesareallocatedbasedonthecountryinwhichthecustomerislocated.Revenuesofapproximately$70,186,213(2017:$91,090,536)arederivedfromthetop3customers.TheserevenuesareattributabletotheMineralssegment.(ii)SegmentprofitbeforetaxTheboardofDirectorsassessestheperformanceoftheoperatingsegmentsbasedonameasureofadjustedprofitbeforetax.Areconciliationofsegmentprofitbeforetaxtotheprofitbeforetaxintheconsolidatedstatementofprofitorlossandothercomprehensiveincomeisprovidedasfollows:Consolidated2018$2017$Segmentprofitbeforetax26,385,52314,570,862Goodwillimpairment(1,095,048)(263,242)Profitbeforeincometaxasperstatementofcomprehensiveincome25,290,47514,307,620(iii)SegmentassetsTheamountsprovidedtotheboardofDirectorswithrespecttototalassetsaremeasuredinamannerconsistentwiththatofthefinancialreport.Theseassetsareallocatedbasedontheoperationsofthesegmentandthephysicallocationoftheasset.Reportablesegments'assetsarereconciledtototalassetsasfollows:Consolidated2018$2017$Segmentassets138,697,608140,365,575Intersegmenteliminations(6,091,111)(4,180,052)Intangiblesarisingonconsolidation6,126,2287,221,276Totalassetsaspertheconsolidatedbalancesheet138,732,725143,406,799Thetotalofnon-currentassetsotherthanfinancialinstrumentsanddeferredtaxassetsinAustraliais$13,303,765(2017:$9,968,180),andothercountriesis$1,278,891(2017:$3,400,482).59 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
60 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)4Segmentinformation(continued)(c)Othersegmentinformation(continued)(iv)SegmentliabilitiesTheamountsprovidedtotheboardofDirectorswithrespecttototalliabilitiesaremeasuredinamannerconsistentwiththatofthefinancialreport.Theseliabilitiesareallocatedbasedontheoperationsofthesegment.Reportablesegments'liabilitiesarereconciledtototalliabilitiesasfollows:Consolidated2018$2017$Segmentliabilities65,421,51478,205,250Intersegmenteliminations(6,039,199)(4,021,783)Totalliabilitiesaspertheconsolidatedbalancesheet59,382,31574,183,4675RevenueConsolidated2018$2017$FromoperationsSalesrevenueContractrevenue192,016,864214,817,550OtherrevenueRentsandsub-leaserentals68,88859,803Bankinterest1,883,7051,639,559Otherrevenue599,43499,5302,552,0271,798,892Totalrevenuefromoperations194,568,891216,616,44260 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 61
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)6ExpensesConsolidated2018$2017$Profitbeforeincometaxincludesthefollowingspecificexpenses:DepreciationFixturesandfittings528,652649,407Leaseholdimprovements52,83060,331Leasedplantandequipment454,110160,172Motorvehicles9,95618,826Totaldepreciation1,045,548888,736AmortisationComputersoftware182,931283,028Totaldepreciationandamortisation1,228,4791,171,764FinancecostsInterestandfinancechargespaid/payable120,74193,651Netforeignexchange(gains)/losses(543,812)433,067Netlossondisposalofproperty,plantandequipment2,0801,634RentalexpenserelatingtooperatingleasesMinimumleasepayments8,577,4948,052,368Definedcontributionsuperannuationexpense2,791,8042,604,28861 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
62 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)7Incometaxexpense(a)IncometaxexpenseConsolidated2018$2017$Currenttax11,841,3884,879,361Deferredtax(4,533,986)(1,184,980)Adjustmentsforcurrenttaxofpriorperiods(350,314)239,7106,957,0883,934,091Deferredincometaxexpense/(benefit)includedinincometaxexpensecomprises:Increaseindeferredtaxassets(note15)(4,345,535)(1,464,815)(Decrease)/increaseindeferredtaxliabilities(note19)(188,451)279,835(4,533,986)(1,184,980)(b)NumericalreconciliationofincometaxexpensetoprimafacietaxpayableConsolidated2018$2017$Profitbeforeincometaxexpense25,290,47514,307,620TaxattheAustraliantaxrateof30%(2017:30%)7,587,1434,292,286Taxeffectofamountswhicharenotdeductible(taxable)incalculatingtaxableincome:Goodwillimpairment328,51478,973Sundryitems191,858278,6888,107,5154,649,947Adjustmentsforcurrenttaxofpriorperiods-under/(over)provisionofprioryearincometax(350,314)239,710Differenceinoverseastaxrates(567,357)(267,374)Previouslyunrecognisedtaxlossesnowrecoupedtoreducecurrenttaxexpense-(466,812)Deferredtaxesnotrecognised101,04884,395Shareofnetprofitofjointventuresaccountedforusingtheequitymethod(333,804)(305,775)Totalincometaxexpense/(benefit)6,957,0883,934,091(32,247,563)(18,241,711)62 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 63
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)7Incometaxexpense(continued)(c)AmountsrecogniseddirectlyinequityConsolidated2018$2017$Aggregatecurrentanddeferredtaxarisinginthereportingperiodandnotrecognisedinnetprofitorlossorothercomprehensiveincomebutdirectlydebitedorcreditedtoequity:Currenttax-debiteddirectlytoequity139,5053(d)TaxconsolidationThecompanyandits100%ownedAustralianentitiesformedataxconsolidatedgroupon1July2013.MembersoftheconsolidatedgrouphaveenteredintoataxsharingagreementinordertoallocateincometaxexpensetothewhollyownedAustralianentitiesonapro-ratabasis.Theagreementprovidesfortheallocationofincometaxliabilitiesbetweentheentitiesshouldtheheadentitydefaultonitstaxpaymentobligations.Atbalancedate,thepossibilityofdefaultisremote.TheheadentityofthetaxconsolidatedgroupisLycopodiumLimited.TaxeffectaccountingbymembersofthetaxconsolidatedgroupMembersofthetaxconsolidatedgrouphaveenteredintoataxfundingagreementeffectivefrom1July2013.Thetaxfundingagreementprovidesfortheallocationofcurrenttaxestomembersofthetaxconsolidatedgroup.Deferredtaxesareallocatedtomembersofthetaxconsolidatedgroupinaccordancewiththegroupallocationapproach,whichisconsistentwiththeprinciplesofAASB112IncomeTaxes.Theallocationoftaxesunderthetaxfundingagreementisrecognisedasanincrease/(decrease)inthememberentities’intercompanyaccountswiththetaxconsolidatedgroupheadcompany,LycopodiumLimited.Inthisregard,thecompanyhasassumedthebenefitoftaxlossesfromthememberentitiesasofthebalancedate.Thenatureofthetaxfundingagreementissuchthatnotaxconsolidatedcontributionsbyordistributionstoparticipant'sequityarerequired.63 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
64 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)8Currentassets-CashandcashequivalentsConsolidated2018$2017$Cashatbankandinhand74,287,78885,334,768(a)RiskexposureThegroup'sexposuretointerestrateriskisdiscussedinnote2.Themaximumexposuretocreditriskattheendofthereportingperiodisthecarryingamountofeachclassofcashandcashequivalentsmentionedabove.9Currentassets-TradeandotherreceivablesConsolidated2018$2017$Tradereceivables32,933,66336,833,250Allowanceforimpairmentofreceivables(a)(877,744)(2,342,738)32,055,91934,490,512GSTandotherreceivables4,305,3901,593,490Cashadvancedtoemployees35,32862,420Loantoassociates1,220,000772,8665,560,7182,428,77637,616,63736,919,288(a)ImpairedtradereceivablesAsat30June2018,currenttradereceivablesofthegroupwiththevalueof$877,743(2017:$2,342,738)wereimpaired,withtheamountsbeingfullyprovidedfor.Theageingofthesereceivablesareasfollows:Consolidated2018$2017$61to90days-43,47591to120days-207,520121to210days-381,674211daysorover877,7431,710,069877,7432,342,73864 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 65
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)9Currentassets-Tradeandotherreceivables(continued)(a)Impairedtradereceivables(continued)Movementsintheprovisionforimpairmentofreceivablesareasfollows:Consolidated2018$2017$At1July2,342,737859,424Provisionforimpairmentrecognisedduringtheyear65,5671,527,262Receivableswrittenoffduringtheyearasuncollectable(546,798)(288,079)Unusedamountsreversed(988,877)244,625Exchangedifference5,114(495)At30June877,7432,342,737Theotherclasseswithintradeandotherreceivablesdonotcontainimpairedassets.(b)PastduebutnotimpairedAsof30June2018,tradereceivablesof$9,118,811(2017:$6,634,696)werepastduebutnotimpaired.Theserelatetoanumberofindependentcustomersforwhomthereisnorecenthistoryofdefault.Theageinganalysisofthesetradereceivablesisasfollows:Consolidated2018$2017$31to60days3,109,0894,236,36261to90days4,325,781503,73391to120days540,8351,183,188121to210days671,938330,939211daysandover471,168380,4749,118,8116,634,696(c)RiskexposureInformationaboutthegroup'sexposuretoforeignexchangeriskandinterestrateriskisprovidedinnote2.(d)FairvalueandcreditriskDuetotheshort-termnatureofthesereceivables,theircarryingamountisassumedtoapproximatetheirfairvalue.Themaximumexposuretocreditriskatthereportingdateisthefairvalueofeachclassofreceivablesmentionedabove.Thegroupdoesnotholdanycollateralassecurity.Refertonote2formoreinformationontheriskmanagementpolicyofthegroup.65 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
66 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)10Currentassets-OthercurrentassetsConsolidated2018$2017$Othercurrentassets(a)778,401569,742Prepayments962,4501,579,9451,740,8512,149,687(a)OthercurrentassetsOthercurrentassetsconsistofdepositsheldwithlicensedbanksassecurity/bondonthevariouspropertiesleasedbythegroup.11Financialassetsandliabilities(a)CategoriesoffinancialassetsandliabilitiesNote1(m)providesadescriptionofeachcategoryoffinancialassetsandliabilitiesandtherelatedaccountingpolicies.Thecarryingamountsoffinancialassetsandliabilitiesineachcategoryareasfollows:FinancialassetsConsolidated-At30June2018NoteAvailableforsale$Derivativesusedforhedging$Loansandreceivablesatamortisedcost$Total$Cashandcashequivalents8--74,287,78874,287,788Tradeandotherreceivables9--37,616,63737,616,637Depositsheldwithbanks10--778,401778,401Available-for-salefinancialassets11(b)1,256,106--1,256,106OtherReceivables12--332,356332,3561,256,106-113,015,182114,271,288Consolidated-At30June2017Cashandcashequivalents8--85,334,76985,334,769Tradeandotherreceivables9--36,919,28836,919,288Depositsheldwithbanks10--569,742569,742Derivativefinancialassets-164,994-164,994Available-for-salefinancialassets11(b)102,963--102,963OtherReceivables12--442,616442,616102,963164,994123,266,415123,534,37266 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 67
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)11Financialassetsandliabilities(continued)(a)Categoriesoffinancialassetsandliabilities(continued)FinancialliabilitiesConsolidated-At30June2018NoteLiabilitiesatfairvaluethroughprofitorloss$Derivativesusedforhedging$Liabilitiesatamortisedcost$Total$Tradeandotherpayables--12,980,39312,980,393Borrowings11(d)--1,258,9711,258,971Derivativefinancialliabilities-27,694-27,694-27,69414,239,36414,267,058Consolidated-At30June2017Tradeandotherpayables--23,401,72523,401,725Borrowings11(d)--1,342,6431,342,643--24,744,36824,744,368AdescriptionoftheGroup’sfinancialinstrumentrisks,includingriskmanagementobjectivesandpoliciesisgiveninNote2.ThemethodsusedtomeasurefinancialassetsandliabilitiesreportedatfairvaluearedescribedinNote2.(b)AvailableforsalefinancialassetsThedetailsandcarryingamountsofAFSfinancialassetsareasfollows:Consolidated2018$2017$Balanceatthebeginningoftheyear102,963102,953Revaluationgaintransferredtoequity465,01510Saleofavailable-for-salefinancialassets(265,747)-Sharesreceivedinlieuofpaymentofservices878,875-Purchasesofavailable-for-salefinancialassets75,000-Balanceatendofyear1,256,106102,96367 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
68 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)11Financialassetsandliabilities(continued)(c)DerivativefinancialinstrumentsTheGroup’sderivativefinancialinstrumentsaremeasuredatfairvalueandaresummarisedbelow:Consolidated2018$2017$CurrentassetsOtherhedginginstruments-164,994Totalcurrentderivativefinancialinstrumentassets-164,994CurrentliabilitiesOtherhedginginstruments27,694-Totalcurrentderivativefinancialinstrumentliabilities27,694-(27,694)164,994TheGroupusesforwardforeignexchangecontractstomitigateexchangerateexposurearisingpredominantlyfromforecastsalesinUSdollars.Allforwardexchangecontractsareconsideredbymanagementtobepartofeconomichedgearrangementsbuthavenotbeenformallydesignated.TheGroup’sUS-dollarforwardcontractsrelatetocashflowsthathavebeenforecastedforJuly2018toDecember2018.Allforecasttransactionsareexpectedtooccur.During2018alossof$483,288(2017:lossof$257,091)wasrecognisedinprofitandlossasaresultoffair-valuingthederivativeinstrumentatyearend.(d)BorrowingsBorrowingsincludethefollowingfinancialliabilities:Consolidated20182017Carryingamountatamortisedcosts:Current$Non-current$Total$Current$Non-current$Total$SecuredLeaseliabilities478,216562,0661,040,282388,484832,9121,221,396Totalsecuredborrowings478,216562,0661,040,282388,484832,9121,221,396UnsecuredOtherloans218,689-218,689121,247-121,247Totalunsecuredborrowings218,689-218,689121,247-121,247Totalborrowings696,905562,0661,258,971509,731832,9121,342,643AllborrowingsaredenominatedinAUD.BankborrowingsaresecuredbyplantandequipmentownedbytheGroup.Currentinterestratesarevariableandaverage5.57%(2017:7.22%).Thecarryingamountofbankborrowingsisconsideredtobeareasonableapproximationoffairvalue.68 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 69
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)11Financialassetsandliabilities(continued)(e)FairvaluemeasurementFinancialassetsandliabilitiesmeasuredatfairvalueintheBalanceSheetaregroupedintothreeLevelsofafairvaluehierarchy.ThethreeLevelsaredefinedbasedontheobservabilityofsignificantinputstothemeasurement,asfollows:•Level1:quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities•Level2:inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly•Level3:unobservableinputsfortheassetorliability.ThefollowingtableshowstheLevelswithinthehierarchyoffinancialassetsandliabilitiesmeasuredatfairvalueonarecurringbasisat30June2018and30June2017.Level1Level2Level3TotalConsolidated-At30June2018$$$$Financialassets/(liabilities)ListedSecurities1,256,106--1,256,106Foreigncurrencyforwardcontracts-(27,694)-(27,694)Netfairvalue1,256,106(27,694)-1,228,412Level1Level2Level3TotalConsolidated-At30June2017$$$$Financialassets/(liabilities)ListedSecurities102,963--102,963Foreigncurrencyforwardcontracts-164,994-164,994Netfairvalue102,963164,994-267,957TherewerenotransfersbetweenLevel1andLevel2in2018and2017.MeasurementoffairvalueoffinancialinstrumentsTheGroup’sfinanceteamperformsvaluationsoffinancialitemsforfinancialreportingpurposes,inconsultationwiththirdpartyvaluationspecialistsforcomplexvaluations,whererequired.Valuationtechniquesareselectedbasedonthecharacteristicsofeachinstrument,withtheoverallobjectiveofmaximisingtheuseofmarket-basedinformation.ThefinancialteamreportsdirectlytotheChiefFinancialOfficerandtotheauditcommittee.ThevaluationtechniquesusedforinstrumentscategorisedinLevel2aredescribedbelow:Foreigncurrencyforwardcontracts(Level2)TheGroup’sforeigncurrencyforwardcontractsarenottradedinactivemarkets.Thesehavebeenfairvaluedusingobservableforwardexchangeratesandinterestratescorrespondingtothematurityofthecontract.Theeffectsofnon-observableinputsarenotsignificantforforeigncurrencyforwardcontracts.12Non-currentassets-OtherreceivablesConsolidatedNotes2018$2017$Loansunderseniormanagementshareacquisitionplan33(a)332,356442,616(a)ImpairedreceivablesandreceivablespastdueNoneofthenon-currentreceivablesareimpairedorpastduebutnotimpaired.69 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
70 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)13Non-currentassets-InvestmentsaccountedforusingtheequitymethodConsolidated2018$2017$Investmentinjointventures1,274,049857,856Investmentinassociates1,493,6411,369,8792,767,6902,227,735(a)InvestmentinjointventuresThegrouphasonematerialjointventure,PilbaraEPCMPtyLtd("PEPL").ProportionofOwnershipInterestHeldbytheGroupNameofJointVentureCountryofIncorporation&PrincipalPlaceofBusinessPrincipalActivities20182017PilbaraEPCMPtyLtdAustraliaEngineering,procurement,constructionmanagementservices50%50%TheinvestmentinPEPLisaccountedforusingtheequitymethodinaccordancewithAASB128.SummarisedfinancialinformationforPEPLissetoutbelow:20182017$$Currentassets(a)2,636,2182,661,470Non-currentassets--Totalassets2,636,2182,661,470Currentliabilities(b)65,125333,855Non-currentliabilities(c)-611,908Totalliabilities65,125945,763a.Includescashandcashequivalents2,636,2182,653,672b.Includescurrentfinancialliabilities(excludingtradeandotherpayablesandprovisions)--c.Includesnon-currentfinancialliabilities(excludingtradeandotherpayablesandprovisions)--70 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 71
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)13Non-currentassets-Investmentsaccountedforusingtheequitymethod(continued)20182017$$Revenue37,4281,605,130Profitfortheyear23,001183,912Depreciationandamortisation--Interestincome37,42830,973Interestexpense--Taxexpense-66,784AreconciliationoftheabovesummarisedfinancialinformationtothecarryingamountoftheinvestmentinPEPLissetoutbelow:20182017$$TotalnetassetsofPEPL2,548,0981,715,707ProportionofownershipinterestheldbytheGroup50%50%CarryingamountoftheinvestmentinPEPL1,274,049857,856NodividendswerereceivedduringtheyearfromPEPL(2017:$250,000).PEPLisaPrivateCompany;thereforenoquotedmarketpricesareavailableforitsshares.Theinvestmentiscurrentlyintheprocessofbeingwound-up.In2017,Lycopodium(40%)andMonadelphousGroupLtd(60%)formedanincorporatedjointventure,MondiumPtyLtd("Mondium").Mondium'spurposeistotargetanddeliverengineering,procurementandconstruction(EPC)projectsinthemineralsprocessingsector,domesticallyandwithinselectedinternationalmarkets.Mondiumisaprivatecompany,withnoquotedmarketpricesavailableforitsshares.Theinvestmentiscurrentlycarriedatanilvalue(2017:Nil).71 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
72 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)13Non-currentassets-Investmentsaccountedforusingtheequitymethod(continued)(b)InvestmentinassociatesTheGrouphasonematerialinvestmentinassociate,ECGEngineeringPtyLtd,anelectricalengineeringconsultancybasedinPerth,Australia.ProportionofOwnershipInterestHeldbytheGroupNameofJointVentureCountryofIncorporation&PrincipalPlaceofBusinessPrincipalActivities20182017ECGEngineeringPtyLtdAustraliaElectricalengineering31%31%SummarisedfinancialinformationoftheGroup'sshareintheassociates:20182017$$Profitfromcontinuingoperations696,487927,295Othercomprehensiveincome--Totalcomprehensiveincome696,487927,295.CarryingamountoftheGroup'sinterestinassociates1,493,6411,369,87972 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 73
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)14Non-currentassets-Property,plantandequipmentFixturesandfittings$Motorvehicles$Leaseholdimprovements$Leasedplantandequipment$Total$At1July2016Costorfairvalue6,798,763212,142783,485-7,794,390Accumulateddepreciation(5,035,009)(143,096)(272,489)-(5,450,594)Netbookamount1,763,75469,046510,996-2,343,796Yearended30June2017Openingnetbookamount1,763,75469,046510,996-2,343,796Additions297,450-38,3621,379,6631,715,475Disposal(4,180)(4,904)--(9,084)Depreciationcharge(649,407)(18,826)(60,331)(160,172)(888,736)Transferstointangibleassets(9,650)---(9,650)Exchangedifferences29,4771,800(8,904)-22,373Closingnetbookamount1,427,44447,116480,1231,219,4913,174,174At30June2017Costorfairvalue6,935,104186,962798,3311,379,6639,300,060Accumulateddepreciation(5,507,660)(139,846)(318,208)(160,172)(6,125,886)Netbookamount1,427,44447,116480,1231,219,4913,174,174Yearended30June2018Openingnetbookamount1,427,44447,116480,1231,219,4913,174,174Additions981,618-71,490253,0061,306,114Disposal(2,482)---(2,482)Depreciationcharge(528,652)(9,956)(52,830)(454,110)(1,045,548)Exchangedifferences(2,674)(141)5,044-2,229Closingnetbookamount1,875,25437,019503,8271,018,3873,434,487At30June2018Cost7,480,514179,528862,3321,632,66810,155,042Accumulateddepreciation(5,605,260)(142,509)(358,505)(614,281)(6,720,555)Netbookamount1,875,25437,019503,8271,018,3873,434,48773 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
74 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)15Non-currentassets-DeferredtaxassetsConsolidated2018$2017$Thebalancecomprisestemporarydifferencesattributableto:Unusedtaxlosses138,37137,422Employeebenefits2,513,5222,177,976Doubtfuldebts24,688408,877Accruedexpenses107,421110,965Deferredrevenue649,359209,886Otherprovisions5,446,7461,516,230Financeleases312,084366,4199,192,1914,827,775Set-offofdeferredtaxliabilitiespursuanttoset-offprovisions(note19)(841,393)(1,029,845)Netdeferredtaxassets8,350,7983,797,930Deferredtaxassetsexpectedtoberecoveredwithin12months8,385,7564,108,718Deferredtaxassetsexpectedtoberecoveredaftermorethan12months806,435719,0579,192,1914,827,775MovementsDoubtfuldebts$EmployeeBenefits$Deferredrevenue$Accruedexpenses$Otherprovisions$FinanceLeases$Unusedtaxlosses$Total$At1July2016142,4422,089,752160,935174,696(4,299)-969,0253,532,551Credited/(charged)-toprofitorloss266,43588,22448,951(63,731)1,520,532366,419(762,016)1,464,814-directlytoequity----(3)--(3)Utilisationofrecognisedlosses------(161,657)(161,657)Exchangeratedifferences------(7,930)(7,930)At30June2017408,8772,177,976209,886110,9651,516,230366,41937,4224,827,775At1July2017408,8772,177,976209,886110,9651,516,230366,41937,4224,827,775(Charged)/credited-toprofitorloss(384,189)335,546439,473(3,544)4,070,021(54,335)(57,437)4,345,535-directlytoequity----(139,505)--(139,505)Reversalofrecognisedlosses------158,386158,386At30June201824,6882,513,522649,359107,4215,446,746312,084138,3719,192,19174 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 75
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)16Non-currentassets-IntangibleassetsGoodwill$Software$Customercontracts$Total$At1July2016Cost8,885,4061,934,790315,00011,135,196Accumulatedamortisationandimpairment(1,319,822)(1,592,621)(315,000)(3,227,443)Netbookamount7,565,584342,169-7,907,753Yearended30June2017Openingnetbookamount7,565,564342,169-7,907,733Additions-50,116-50,116Amortisationcharge*-(283,028)-(283,028)Impairmentlossrecognised(263,242)--(263,242)Transfersfromproperty,plantandequipment-9,650-9,650Exchangedifferences-(56)-(56)Closingnetbookamount7,302,322118,851-7,421,173Cost8,885,4061,878,728315,00011,079,134Accumulatedamortisationandimpairment(1,583,084)(1,759,877)(315,000)(3,657,961)Netbookamount7,302,322118,851-7,421,173Goodwill$Software$Customercontracts$Total$Yearended30June2018Openingnetbookamount7,302,322118,851-7,421,173Additions-631,529-631,529Amortisationcharge*-(182,931)-(182,931)Impairmentlossrecognised(1,095,048)--(1,095,048)Disposal-17,895-17,895Exchangedifferences-(601)-(601)Closingnetbookamount6,207,274584,743-6,792,017At30June2018Cost8,885,4062,478,811315,00011,679,217Accumulatedamortisation(2,678,132)(1,894,068)(315,000)(4,887,200)Netbookamount6,207,274584,743-6,792,017*Groupamortisationof$182,931(2017:$283,028)isincludedindepreciationandamortisationexpenseinthestatementofcomprehensiveincome.75 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
76 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)16Non-currentassets-Intangibleassets(continued)(a)ImpairmenttestsforgoodwillGoodwillisallocatedtothegroupcash-generatingunits(CGUs)identifiedaccordingtobusinesssegmentandcountryofoperation.Asegment-levelsummaryofthegoodwillallocationispresentedbelow.2018Australia$Othercountries$Total$Minerals3,622,9912,465,0266,088,017Metallurgical119,257-119,2573,742,2482,465,0266,207,2742017Australia$Othercountries$Total$Minerals3,622,9912,465,0266,088,017Infrastructure(previouslyMaintenance)1,095,048-1,095,048Metallurgical119,257-119,2574,837,2962,465,0267,302,322(b)Keyassumptionsusedforvalue-in-usecalculationsTherecoverableamountofeachCGUwithinthebusinesssegmentisdeterminedonthebasisofvalue-in-use('VIU').Thefollowingdescribestheassumptionsonwhichmanagementhasbaseditscashflowprojectionswhendeterminingvalueinuse:GrowthratesDiscountrates2018%2017%2018%2017%Minerals2.52.53.24.0ProcessIndustries---4.0Infrastructure1.02.53.24.0Metallurgical2.52.53.24.0GrowthrateThegrowthraterepresentsasteadyindexationratewhichdoesnotexceedmanagement'sexpectationsofthelongtermaveragegrowthrateforthebusinessinwhicheachCGUoperates.DiscountrateFortheAustralianCGUs,thepre-taxdiscountrateappliedtocashflowprojectionsis3.2%(2017:4.0%)andfortheMineralsCGUsinothercountries,thepre-taxdiscountrateis9.2%(2017:9.0%).CashflowsVIUcalculationsusecashflowprojectionsfromapprovedbudgetsbasedonpastperformanceanditsexpectationsforthefuturecoveringathreeyearperiod.76 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 77
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)16Non-currentassets-Intangibleassets(continued)(b)Keyassumptionsusedforvalue-in-usecalculations(continued)RevenueValue-in-usemodelisbasedonbudgetapprovedbytheBoard.Theforecastbudgetprocesswasdevelopedbasedonrevenueexpectationsfortheyearbuiltaroundexistingcustomercontractsalongwiththepotentialtodevelopnewmarketsandsustaingrowth.SensitivitiesTheBoardhasperformedsensitivitiesaroundallkeyassumptionsdisclosedabove.TherearenofluctuationstoanyoftheassumptionsthatcouldreasonablyoccurthatwouldcausetherecoverableamountoftheCGUtobeequivalenttothatofthecarryingamountoftheCGUsassets.(c)CashflowassumptionsMinerals,InfrastructureandMetallurgicalTheforecastwasadjustedin2018forthedeclineinassetmanagementservicesintheInfrastructuresegmentduetoincreasedcompetitioninthesector.Asaresult,theBoardexpectslowergrowthanddecliningprofitmarginsforthissegment.Impairmenttesting,takingintoaccounttheselatestdevelopments,resultedinareductioningoodwillin2018of$1,095,048.Therelatedgoodwillimpairmentlossof$1,095,048wasincludedwithinimpairmentofnon-financialassets.Apartfromtheconsiderationdescribedindeterminingthevalue-in-useofthecash-generatingunitsdescribedabove,theBoardisnotcurrentlyawareofanyotherprobablechangesthatwouldnecessitatechangesinitskeyestimates.77 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
78 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)17Currentliabilities-TradeandotherpayablesConsolidated2018$2017$Tradepayables6,198,80410,225,530Revenuereceivedinadvance8,602,05332,659,785Goodsandservicestax(GST)payable2,330,610708,415Sundrycreditorsandaccruedexpenses6,781,58613,176,194Employeebenefitobligations(a)7,836,1767,311,04231,749,22964,080,966Includedintheabovearefinancialliabilitiesof$12,980,390(2017:$23,401,725).(a)Amountsnotexpectedtobesettledwithinthenext12monthsEmployeebenefitobligationsincludeaccrualsforannualleaveandunconditionalentitlementsoflongserviceleave.Theentireobligationispresentedascurrent,sincethegroupdoesnothaveanunconditionalrighttodefersettlement.However,basedonpastexperience,thegroupdoesnotexpectallemployeestotakethefullamountofaccruedleavewithinthenext12months.Thefollowingamountsreflectleavethatisnotexpectedtobetakenwithinthenext12months:Consolidated2018$2017$Annualleaveobligationexpectedtobesettledafter12months1,142,739922,499Longserviceleaveobligationexpectedtobesettledafter12months1,118,000973,5632,260,7391,896,062(b)RiskexposuresDetailsofthegroup'sexposuretoforeignexchangeriskisprovidedinnote2.78 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 79
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)18Currentliabilities-ProvisionsConsolidated2018$2017$Serviceandequipmentwarranties16,361,0094,280,795(a)Movementsinprovisions2018Serviceandequipmentwarranties$Total$Carryingamountatbeginningofyear4,280,7954,280,795Provisionsrecognised12,080,21412,080,214Carryingamountatendofyear16,361,00916,361,009Thegrouprecognisesserviceandequipmentwarrantyprovisionsinaccordancewithitscurrentpolicy.Theamountprovidedtakesintoaccountthepercentagecompletionoftheproject,forecasttocompletecostsplusanyclose-outobligationsandpotentialcontractualliabilitiesduringthewarrantyperiod.Theincreaseinthebalanceforthefinancialyearended30June2018reflectsmultiplemajorprojectsnearingcompletionorhavingbeencompleted.79 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
80 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)19Non-currentliabilities-DeferredtaxliabilitiesConsolidated2018$2017$Thebalancecomprisestemporarydifferencesattributableto:Accruedincome299,562318,275Otherprovisions15,973145,049Depreciation&Amortisation485,481525,882Prepaidexpenses40,37740,639841,3931,029,845Set-offofdeferredtaxliabilitiespursuanttoset-offprovisions(note15)(841,393)(1,029,845)Netdeferredtaxliabilities--Deferredtaxliabilitiesexpectedtobesettledwithin12months355,912503,963Deferredtaxliabilitiesexpectedtobesettledaftermorethan12months485,481525,882841,3931,029,845MovementsDepreciation&amortisation$Accruedincome$Otherprovisions$Prepaidexpenses$Total$At1July2016235,475321,126169,38824,021750,010Charged/(credited)-profitorloss290,407(2,851)(24,339)16,618279,835At30June2017525,882318,275145,04940,6391,029,845At1July2017525,882318,275145,04940,6391,029,845Charged/(credited)-profitorloss(40,401)(18,713)(129,076)(262)(188,452)At30June2018485,481299,56215,97340,377841,39320Non-currentliabilities-ProvisionsConsolidated2018$2017$Employeebenefits-longserviceleave416,531500,79680 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 81
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)21Contributedequity(a)Sharecapital2018Shares2017Shares2018$2017$OrdinarysharesFullypaid39,732,37339,732,37320,823,77220,823,772(b)MovementsinordinarysharecapitalDateDetailsNumberofsharesIssueprice$1July2016Openingbalance39,732,37320,823,772Nomovementsduringtheperiod--30June2017Closingbalance39,732,37320,823,7721July2017Openingbalance39,732,37320,823,772Nomovementsduringtheperiod--30June2018Closingbalance39,732,37320,823,772(c)OrdinarysharesOnashowofhandseveryholderofordinarysharespresentatameetinginpersonorbyproxy,isentitledtoonevote,anduponapolleachshareisentitledtoonevote.(d)CapitalriskmanagementThegroup'sobjectiveswhenmanagingcapitalaretosafeguarditsabilitytocontinueasagoingconcern,sothatitcancontinuetoprovidereturnsforshareholdersandbenefitsforotherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.Inordertomaintainoradjustthecapitalstructure,thegroupmayadjusttheamountofdividendspaidtoshareholders,returncapitaltoshareholders,issuenewsharesorsellassetstoreducedebt.Consistentwithothersintheindustry,thegroupmonitorscapitalonthebasisofthegearingratio.Thisratioiscalculatedasnetdebtdividedbytotalcapital.Netdebtiscalculatedastotalborrowings(including'borrowings'and'tradeandotherpayables'asshownintheconsolidatedbalancesheet)lesscashandcashequivalents.Totalcapitaliscalculatedas'equity'asshownintheconsolidatedbalancesheet(includingnon-controllinginterests)plusnetdebt.81 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
82 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)21Contributedequity(continued)(d)Capitalriskmanagement(continued)During2018,thegroup'sstrategywastomaintainagearinglessthan40%.Thegearingratiosat30June2018and30June2017wereasfollows:Consolidated2018$2017$Totalborrowings(includingpayables)33,008,20365,423,613Less:cashandcashequivalents(74,287,788)(85,334,768)Netdebt(41,279,585)(19,911,155)Totalequity76,373,48666,248,097Totalcapital35,093,90146,336,942Gearingratio(54)%(30)%22Reservesandretainedearnings(a)OtherreservesConsolidated2018$2017$Available-for-saleinvestmentrevaluationreserve241,588(83,923)Foreigncurrencytranslationreserve(930,627)(904,119)(689,039)(988,042)Consolidated2018$2017$Movements:Available-for-saleinvestmentrevaluationreserveBalance1July(83,923)(83,930)Revaluation-gross465,01510Deferredtax(139,504)(3)Balance30June241,588(83,923)PerformancerightsreserveBalance1July-259,037Expiryofperformancerights-(259,037)Balance30June--ForeigncurrencytranslationreserveBalance1July(904,119)(1,016,051)Currencytranslationdifferencesarisingduringtheyear(26,508)111,932Balance30June(930,627)(904,119)82 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 83
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)22Reservesandretainedearnings(continued)(b)RetainedearningsConsolidated2018$2017$Balance1July46,412,36941,285,494Profitfortheyear18,170,18610,292,083Dividendspaidorpayable(8,343,798)(5,165,208)Balance30June56,238,75746,412,369(c)Natureandpurposeofotherreserves(i)Available-for-saleinvestmentsrevaluationreserveChangesinthefairvalueandexchangedifferencesarisingontranslationofinvestments,suchasequities,classifiedasavailable-for-salefinancialassets,arerecognisedinothercomprehensiveincomeasdescribedinnote1(m)andaccumulatedinaseparatereservewithinequity.Amountsarereclassifiedtoprofitorlosswhentheassociatedassetsaresoldorimpaired.(ii)PerformancerightsreserveTheperformancerightsreserveisusedtorecognisedthefairvalueofrightsissuedtocertainDirectorsoremployeesduringtheyear.(iii)ForeigncurrencytranslationreserveExchangedifferencesarisingontranslationofforeigncontrolledentitiesarerecognisedinothercomprehensiveincomeasdescribedinnote1(d)andaccumulatedinaseparatereservewithinequity.Thecumulativeamountisreclassifiedtoprofitorlosswhenthenetinvestmentisdisposedof.23Non-controllinginterestsConsolidated2018$2017$Sharecapital14,93714,937Reserves(1,986)4,230Non-controllinginterestonacquisition2,833,8082,833,808Retainedearnings130,161122,2582,976,9202,975,23383 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
84 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)24Dividends(a)OrdinarysharesParententity2018$2017$Finaldividendsforyearended30June2017of9.0cents(2017:4.0cents)perfullypaidsharepaidon10October2017(2017:13October2016)Fullyfrankedbasedontaxpaid@30%(2017:30%)3,575,9141,589,295Interimdividendfortheyearended30June2018of12.0cents(2017:9.0cents)perfullypaidsharepaidon10April2018(2017:13April2017)Fullyfrankedbasedontaxpaid@30%(2017:30%)4,767,8853,575,914Totaldividendsprovidedfororpaid8,343,7995,165,209(b)DividendsnotrecognisedattheendofthereportingperiodParententity2018$2017$Inadditiontotheabovedividends,sinceyearendtheDirectorshaverecommendedthepaymentofafinaldividendof18.0centsperfullypaidordinaryshare(2017:9.0cents),fullyfrankedbasedontaxpaidat30%.Theaggregateamountoftheproposeddividendexpectedtobepaidon12October2018outofretainedearningsat30June2018,butnotrecognisedasaliabilityatyearend,is7,151,8273,575,914(c)FrankeddividendsConsolidated2018$2017$Frankingcreditsavailableforsubsequentreportingperiodsbasedonataxrateof30%(2017:30%)19,842,22110,713,752Theaboveamountsrepresentthebalanceofthefrankingaccountasattheendofthereportingperiod,adjustedfor:(a)frankingcreditsthatwillarisefromthepaymentoftheamountoftheprovisionforincometax(b)frankingdebitsthatwillarisefromthepaymentofdividendsrecognisedasaliabilityatthereportingdate,and(c)frankingcreditsthatwillarisefromthereceiptofdividendsrecognisedasreceivablesatthereportingdate.Theconsolidatedamountsincludefrankingcreditsthatwouldbeavailabletotheparententityifdistributableprofitsofsubsidiarieswerepaidasdividends.Theimpactonthefrankingaccountofthedividendrecommendedbythedirectorssinceyearend,butnotrecognisedasaliabilityatyearend,willbeareductioninthefrankingaccountof$3,065,069(2017:$1,532,534).84 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 85
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)25RemunerationofauditorsDuringtheyearthefollowingfeeswerepaidorpayableforservicesprovidedbytheauditoroftheparententity,itsrelatedpracticesandnon-relatedauditfirms:(a)GrantThorntonAustraliaLtdConsolidated2018$2017$AuditandotherassuranceservicesAuditandreviewoffinancialreports190,000190,000TaxationservicesTaxcomplianceservices(includingincometaxreturns)63,44032,300Totalremunerationfortaxationservices63,44032,300OtherservicesOtherservices39,87015,183Totalremuneration293,310237,483(b)NetworkfirmsofGrantThorntonAustraliaLtdConsolidated2018$2017$AuditandotherassuranceservicesAuditandreviewoffinancialstatements110,072106,687TaxationservicesTaxcomplianceservices(includingincometaxreturns)40,52956,926TotalremunerationofnetworkfirmsofGrantThorntonAustraliaLtd150,601163,61385 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
86 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)25Remunerationofauditors(continued)(c)Non-GrantThorntonAustraliaLtdConsolidated2018$2017$AuditandotherassuranceservicesAuditandreviewoffinancialstatements49,08748,804TaxationservicesTaxcomplianceservices(includingincometaxreturns)15,27533,951Totalremunerationfortaxationservices15,27533,951OtherservicesOtherservices57,16824,536Totalremunerationofnon-GrantThorntonAustraliaLtdauditfirms121,530107,291Totalauditors'remuneration565,441508,387Itisthegroup'spolicytoemployGrantThorntonAustraliaLtdonassignmentsadditionaltotheirstatutoryauditdutieswhereGrantThorntonAustraliaLtdexpertiseandexperiencewiththegroupareimportant.Theseassignmentsareprincipallytaxadviceandduediligencereportingonacquisitions,orwhereGrantThorntonAustraliaLtdisawardedassignmentsonacompetitivebasis.Itisthegroup'spolicytoseekcompetitivetendersforallmajorconsultingprojects.26ContingenciesThegrouphadcontingentliabilitiesat30June2018and30June2017inrespectof:(a)Contingentliabilities(i)GuaranteesGuaranteesaregiveninrespectofrentalbondsfor$1,830,584(2017:$1,910,888).Theseguaranteesmaygiverisetoliabilitiesintheeventthatthegroupdefaultsonitsobligationsunderthetermsoftheleaseagreementforitspremisesat1AdelaideTerrace,EastPerth,60LeichhardtStreet,SpringHill,253-269WellingtonRoad,Mulgrave,138-140BeaumontStreet,Hamilton,CentennialPlace,CenturyBoulevard,CenturyCity,CapeTown,SouthAfricaandGolfPark,CapeTown,SouthAfrica.Nomateriallossesareanticipatedinrespectofanyoftheabovecontingentliabilities(2017:Nil).27Commitments(a)CapitalcommitmentsTherewerenocapitalexpenditurescontractedforatthereportingdatewhichhavenotbeenrecognisedasliabilities(2017:Nil).86 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 87
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)27Commitments(continued)(b)Leasecommitments:groupaslessee(i)Non-cancellableoperatingleasesThePerthpropertyunderoperatingleasebyLycopodiumMineralsPtyLtdisanoncancellableleasewitha120monthtermending31January2021.Minimumleasepaymentsarecontingentuponboth4%fixedannualincreasesandmarket-basedreviewsduringthetermofthelease.Theleaseallowsforsublettingofallleaseareas,subjecttotheconsentofthelandlord.TheMelbournepropertyunderoperatingleasebyLycopodiumProcessIndustriesPtyLtdisanoncancellableleasewitha36monthtermending25September2018,withanoptiontorenewtheleaseattheendofthetermforafurther36months.Theagreementprovidesforanannualincreaseintherentalpaymentsof3.5%overthepreviousyear'srental.TheManilapropertyunderoperatingleasebyLycopodium(Philippines)PtyLtdisanoncancellableleasewitha60monthtermending20August2023.Theagreementprovidesforanincreaseintherentalpaymentsof5%perannum.TheBrisbanepropertyunderoperatingleasebyLycopodiumMineralsPtyLtdisanon-cancellableleasewitha36monthtermending28February21,withanoptiontorenewfor36months.Theleaseagreementprovidesforannualincreaseintherentalpaymentsof3.25%overthepreviousyear'srental.Theleaseallowsforsub-lettingofallleaseareassubjecttopriorconsentofthelandlord.ThePerthpropertyunderoperatingleasebyLycopodiumInfrastructurePtyLtdisanoncancellableleasewitha96monthtermending31January2021,withanoptiontorenewafurther60monthterm.Minimumleasepaymentsarecontingentupona4.5%fixedannualincrease.Theleaseallowsforsublettingofallleaseareas,subjecttotheconsentofthelandlord.TheTorontopropertyunderleasebyLycopodiumMineralsCanadaLtdisanon-cancellableleasewitha63monthtermending31October2022.Noprovisionforincreaseinbaserental.TheNewcastlepropertyunderoperatingleasebyLycopodiumInfrastructurePtyLtdisanon-cancellableleasewitha36monthtermending1November2020,withanoptiontorenewtheleaseattheendofitstermforafurther72months.MinimumleasepaymentsarecontingentuponannualCPImovementsduringthetermsofitslease.TheCenturyCitypropertyunderleasebyADPHoldings(Pty)Limitedisanon-cancellableleasewitha37monthtermending31May2021.Theagreementprovidesforanannualincreaseintherentalpaymentsof8%overthepreviousyear'srental.Theleaseallowsforsub-lettingofallleaseareassubjecttopriorconsentofthelandlord.TheGolfParkpropertyunderleasebyADPHoldings(Pty)Limitedisanon-cancellableleasewitha36monthtermending31May2021.Consolidated2018$2017$Commitmentsforminimumleasepaymentsinrelationtonon-cancellableoperatingleasesarepayableasfollows:Withinoneyear7,554,8017,807,360Laterthanoneyearbutnotlaterthanfiveyears14,822,35917,492,39122,377,16025,299,75187 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
88 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)27Commitments(continued)(b)Leasecommitments:groupaslessee(continued)(ii)FinanceleasesandhirepurchasecommitmentsThegrouphasfinanceleasesandhirepurchasecontractsforvariousitemsofplantandequipmentwithacarryingamountof$1,018,386(2017:$1,219,491).Theseleasecontractsexpirewithin1to5years.Underthetermsoftheleases,thegrouphastheoptiontoacquiretheleasedassets.Consolidated2018$2017$Commitmentsinrelationtofinanceleasesarepayableasfollows:Withinoneyear526,584450,053Laterthanoneyearbutnotlaterthanfiveyears585,944889,772Minimumleasepayments1,112,5281,339,825Futurefinancecharges(72,246)(118,429)Totalleaseliabilities1,040,2821,221,396Representingleaseliabilities:Current(note11(d))478,216388,484Non-current(note11(d))562,066832,9121,040,2821,221,396Theweightedaverageinterestrateimplicitintheleasesandhirepurchasesis5.57%(2017:7.22%).28Relatedpartytransactions(a)ParententitiesTheparententitywithinthegroupisLycopodiumLimited,whichisincorporatedinAustralia.(b)SubsidiariesInterestsinsubsidiariesaresetoutinnote29.(c)KeymanagementpersonnelConsolidated2018$2017$Short-termemployeebenefits2,692,1182,441,977Post-employmentbenefits171,863214,2062,863,9812,656,183Detailedremunerationdisclosuresareprovidedintheremunerationreportonpages14to19.88 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 89
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)28Relatedpartytransactions(continued)(d)TransactionswithotherrelatedpartiesThefollowingtransactionsoccurredwithrelatedparties:Consolidated2018$2017$PurchasesofgoodsandservicesPurchasesfromassociates8,188,8214,927,903SaleofgoodsandservicesSalestoassociatesandjointventures-337,291(e)Outstandingbalancesarisingfromsales/purchasesofgoodsandservicesThefollowingbalancesareoutstandingattheendofthereportingperiodinrelationtotransactionswithrelatedparties:Consolidated2018$2017$CurrentpayablesAssociates18,007278,393(f)Loansto/fromrelatedpartiesConsolidated2018$2017$LoanstoassociatesBeginningoftheyear723,500387,500Loansadvanced884,000336,000Repaymentsmade(387,500)-Endofyear1,220,000723,500Thereisnoallowanceaccountforimpairedreceivablesinrelationtoanyoutstandingbalances,andnoexpensehasbeenrecognisedinrespectofimpairedreceivablesduefromrelatedparties.(g)TermsandconditionsPurchasesandsalesofgoodsandserviceswithstatutoryjointventuresaremadeatcost.Purchasesandsalesofgoodsandserviceswiththeassociatearemadeatarms-length.Loansadvancedtothejointventureandassociateareinterest-freeandrepayablewithin12months.Outstandingbalancesareunsecuredandarerepayableincash.89 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
90 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)29Subsidiaries(a)SignificantinvestmentsinsubsidiariesTheconsolidatedfinancialreportincorporatetheassets,liabilitiesandresultsofthefollowingprincipalsubsidiariesinaccordancewiththeaccountingpolicydescribedinnote1(b):NameofentityCountryofincorporation/PrincipalactivityClassofsharesEquityholding2018%2017%LycopodiumMineralsPtyLtdAustralia(1)Ordinary100100LycopodiumProcessIndustriesPtyLtdAustralia(1)Ordinary100100OrwayMineralConsultants(WA)PtyLtdAustralia(1)Ordinary100100LycopodiumGhanaLtdGhana(2)Ordinary100100LycopodiumAssetManagementPtyLtdAustralia(1)Ordinary100100LycopodiumBurkinaFasoSARLBurkinaFaso(2)Ordinary100100LycopodiumInfrastructurePtyLtdAustralia(1)Ordinary100100LycopodiumMineralsCanadaLtdCanada(1)Ordinary100100LycopodiumMauritiusMauritius(2)Ordinary100100LycopodiumPhilippinesPtyLtdAustralia(1)Ordinary100100MetcoGlobalLimitedAngola(2)Ordinary7474OrwayMineralConsultants(Canada)LtdCanada(1)Ordinary100100LycopodiumRailPtyLtdAustralia(1)Ordinary100100ADPHoldings(Pty)LimitedSouthAfrica(1)Ordinary7474(1)Engineering,procurement,constructionmanagementservices(2)Offshoreprojectsupportservices30EventsoccurringafterthereportingperiodSinceyearendthedirectorshaverecommendedthepaymentofafinaldividendonordinarysharesinrespectofthe2018financialyear.Thetotalamountofthedividendis$7,151,827(2017:$3,575,914),whichrepresentsafullyfrankeddividendof18.0(2017:9.0)centsperfullypaidordinaryshare.Withtheexceptionoftheabove,noothermatterorcircumstanceshavearisensincetheendofthefinancialyearwhichsignificantlyaffectedormaysignificantlyaffect:(a)thegroup'soperationsinfuturefinancialyears,or(b)theresultsofthoseoperationsinfuturefinancialyears,or(c)thegroup'sstateofaffairsinfuturefinancialyears.90 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 91
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)31ReconciliationofprofitafterincometaxtonetcashinflowfromoperatingactivitiesConsolidated2018$2017$Profitfortheyear18,333,38710,373,528Depreciationandamortisation1,228,4791,171,764Impairmentofgoodwill1,095,048263,242Loansadvancedtojointventure(inclatcashflowsfromfinancingactivities)884,000336,000Repaymentofloansfromassociate(inclatcashflowfromfinancingactivities)(387,500)-Proceedsfromavailable-for-salefinancialassets(inclatcashflowfrominvestingactivites)(1,187,036)-Non-cashemployeebenefitsexpense-share-basedpayments-(259,037)Non-cashsharesreceivedinlieuofpaymentforservices(878,875)-Net(gain)/lossonsaleofnon-currentassets(35,653)1,634Shareofnetprofitofassociateandjointventureaccountedforusingtheequitymethod(1,112,681)(1,019,251)Interestrelatingtofinancingactivities96,61756,377Financeleaseexpense-43,011Changeinoperatingassetsandliabilities:Increaseintradedebtorsandotherreceivables(697,349)(10,393,981)(Increase)/decreaseininventories(492,414)376,256Increaseindeferredtaxassets(4,552,868)(866,965)Decrease/(increase)inotheroperatingassets408,836(356,658)(Decrease)/increaseintradecreditors(32,331,738)42,644,013Increaseinprovisionforincometaxespayable5,600,5042,986,072Increaseinotherprovisions11,995,9474,141,718Decrease/(increase)inderivativefinancialassets192,688(164,994)Netcashinflowfromoperatingactivities(1,840,608)49,332,72932Earningspershare(a)BasicearningspershareConsolidated2018Cents2017CentsBasicearningspershareattributabletotheordinaryequityholdersofthecompany45.725.9(b)DilutedearningspershareConsolidated2018Cents2017CentsDilutedearningspershareattributabletotheordinaryequityholdersofthecompany45.725.991 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
92 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)32Earningspershare(continued)(c)ReconciliationofearningsusedincalculatingearningspershareConsolidated2018$2017$BasicearningspershareProfitattributabletotheordinaryequityholdersofthecompanyusedincalculatingbasicearningspershare18,170,18610,292,083DilutedearningspershareUsedincalculatingdilutedearningspershare18,170,18610,292,083(d)WeightedaveragenumberofsharesusedasdenominatorConsolidated2018Number2017NumberWeightedaveragenumberofordinarysharesusedasthedenominatorincalculatingbasicearningspershare39,732,37339,732,37333Share-basedpayments(a)SeniormanagershareacquisitionplanTheseniormanagershareacquisitionplanwasintroducedinNovember2009.Undertheplaneligibleseniormanagersareprovidedwithaninterestfreelimitedrecourseloanforaperiodof3yearstoacquiresharesinLycopodiumLimited.Thepurchaseoftheshareswillbedoneviatheemployeesharetrust.Theloanwillbeinterestfreeiftheparticipatingseniormanagerstayswiththegroupformorethan3years.Intheeventtheparticipatingseniormanagerleaveswithin3years,interestwillbechargedequaltomarketrateofinterestthatwouldhaveaccruedontheloanfromthedateofadvanceofthefundstotherepaymentdate.EligibilitywillbedecidedbytheboardofDirectors.Thevalueoftheloantoeachparticipatingseniormanagerisbasedonthevalueofthesharesallocatedtotherespectiveseniormanager.Thesharesareallocatedata1centdiscounttothevolumeweightedaverageofthepricesatwhichthesharesweretradedontheASXduringtheoneweekperioduptoandincludingthedateofallocation.Duringthefinancialyearended30June2010,607,500shareswereacquiredonandoffmarket.Thedifferencebetweenthepriceofthesharesacquiredandthevalueofsharesallocatedtotheparticipatingseniormanagerswasexpensedinthefinancialyearended30June2010.Thisamountedto$125,855.(b)Expensesarisingfromshare-basedpaymenttransactionsTotalexpensesarisingfromshare-basedpaymenttransactionsrecognisedduringtheperiodaspartofemployeebenefitexpensewerenil.92 Notes to the Consolidated Financial Statements
30 June 2018 (continued)
Lycopodium Annual Financial Report 2018 • 93
LycopodiumLimitedNotestotheconsolidatedfinancialstatements30June2018(continued)34Parententityfinancialinformation(a)SummaryfinancialinformationTheindividualfinancialreportfortheparententityshowthefollowingaggregateamounts:2018$2017$BalancesheetCurrentassets20,254,06520,757,301Non-currentassets30,065,70029,956,945Totalassets50,319,76550,714,246Currentliabilities1,484,0033,705,820Non-currentliabilities18,23644,102Totalliabilities1,502,2393,749,922Netassets48,817,52646,964,324(146,452,578)(140,892,972)Shareholders'equityContributedequity20,823,77220,823,772Retainedearnings27,993,75426,140,55248,817,52646,964,324Profitfortheyear10,197,00111,916,083Totalcomprehensiveincome10,197,00111,916,083(b)GuaranteesenteredintobytheparententityIn2016,theparententityenteredintoanarrangementwithainsurerforastandbyinsurancebondingfacilityof$15.0m.Inreturn,theparententityandLycopodiumMineralsPtyLtdjointlyexecutedacrossguaranteeandindemnityassecurityforthefacility.Thisfacilitywasincreasedto$20.0mduringtheyearended30June2018.(c)ContingentliabilitiesoftheparententityTheparententitydidnothaveanycontingentliabilitiesasat30June2018or30June2017.(d)Contractualcommitmentsfortheacquisitionofproperty,plantorequipmentTheparententitydidnothaveanycontractualcommitmentsfortheacquisitionofproperty,plantandequipmentasat30June2018or30June2017.93 Directors’ Declaration
94 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedDirectors'declaration30June2018IntheDirectors'opinion:(a)thefinancialreportandnotessetoutonpages31to93areinaccordancewiththeCorporationsAct2001,including:(i)complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessionalreportingrequirements,and(ii)givingatrueandfairviewofthegroup'sfinancialpositionasat30June2018andofitsperformancefortheyearendedonthatdate,and(b)therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.Note1(a)confirmsthatthefinancialreportalsocomplieswithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoard.TheDirectorshavebeengiventhedeclarationsbytheManagingDirectorandChiefFinancialOfficerrequiredbysection295AoftheCorporationsAct2001.ThisreportismadeinaccordancewitharesolutionofDirectors.PeterAnthonyDawsonDirectorPerth20September201894LycopodiumLimitedDirectors'declaration30June2018IntheDirectors'opinion:(a)thefinancialreportandnotessetoutonpages31to93areinaccordancewiththeCorporationsAct2001,including:(i)complyingwithAccountingStandards,theCorporationsRegulations2001andothermandatoryprofessionalreportingrequirements,and(ii)givingatrueandfairviewofthegroup'sfinancialpositionasat30June2018andofitsperformancefortheyearendedonthatdate,and(b)therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.Note1(a)confirmsthatthefinancialreportalsocomplieswithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoard.TheDirectorshavebeengiventhedeclarationsbytheManagingDirectorandChiefFinancialOfficerrequiredbysection295AoftheCorporationsAct2001.ThisreportismadeinaccordancewitharesolutionofDirectors.PeterAnthonyDawsonDirectorPerth20September201894 Directors’ Declaration
Audit Report
Lycopodium Annual Financial Report 2018 • 95
Audit Report (continued)
96 • Lycopodium Annual Finanical Report 2018
Audit Report (continued)
Lycopodium Annual Financial Report 2018 • 97
Audit Report (continued)
98 • Lycopodium Annual Finanical Report 2018
Audit Report (continued)
Shareholder Information
Lycopodium Annual Financial Report 2018 • 99
LycopodiumLimitedShareholderinformation30June2018Theshareholderinformationsetoutbelowwasapplicableasat31August2018.A.DistributionofequitysecuritiesAnalysisofnumbersofequitysecurityholdersbysizeofholding:HoldingTotalHolders1-10003381,001-5,0004645,001-10,00013510,001-100,000163100,001andover281,128Therewere76holdersoflessthanamarketableparcelofordinaryshares.B.EquitysecurityholdersThenamesofthetwentylargestholdersofquotedequitysecuritiesarelistedbelow:OrdinarysharesNameNumberheldPercentageofUnits1ReeshPty9,104,36722.912HSBCCustodyNominees(Australia)Limited4,981,30012.543BNPParibasNomineesPtyLimited3,235,1578.144LualaPtyLtd3,167,3327.975JPMorganNomineesAustraliaLimited3,067,5697.726CaddyFoxPtyLtd2,154,2155.427AccedePtyLtd1,272,3323.208CiticorpNomineesPtyLtd821,0002.079MonadelphousGroupLimited603,5111.5210MrDavidJamesTaylor447,6351.1311DeLeoNomineesPtyLtd(TheDeLeoInvestmentA/C)407,9001.0312MrPeterDeLeo&MrsTianaDeLeo407,0711.0213DeLeoNomineesPtyLtd(TheDeLeoFamilyA/C)348,8000.8814SelsoPtyLtd266,1480.6715CiticorpNomineesPtyLtd(ColonialFirstStateInvA/C)265,4750.6716RBCInvestorServicesAustraliaNomineesPtyLtd252,4840.6317LycopodiumSharePlanPtyLtd235,0000.5918FiftySecondCelebrationPtyLtd202,9470.5119BotechPtyLtd188,9590.4820NancrisPtyLtd175,0000.4431,604,20279.5499 Shareholder Information (continued)
100 • Lycopodium Annual Finanical Report 2018
LycopodiumLimitedShareholderinformation30June2018(continued)C.SubstantialholdersSubstantialholdersinthecompanyaresetoutbelow:NameNumberheldPercentageofUnits1ReeshPtyLtd9,104,36722.912HSBCCustodyNominees(Australia)Limited4,981,30012.543BNPParabisNomineesPtyLtd3,235,1578.144LualaPtyLtd3,167,3327.975JPMorganNomineedAustraliaLimited3,067,5697.72D.VotingrightsThevotingrightsattachingtoeachclassofequitysecuritiesaresetoutbelow:(a)OrdinarysharesOnashowofhandseverymemberpresentatameetinginpersonorbyproxyshallhaveonevoteanduponapolleachshareshallhaveonevote.100 Shareholder Information (continued)
Corporate Directory
Lycopodium Annual Financial Report 2018 • 101
LycopodiumLimitedCorporatedirectoryDirectorsCompanySecretaryRegisteredandPrincipalOfficeShareRegistryLawyerstotheCompanyAuditorMichael John CarattiPeter De LeoRodney Lloyd LeonardRobert Joseph OsmettiBruno RuggieroPeter Anthony DawsonLawrence William MarshallSteven John Micheil ChadwickKeith John BakkerLevel 5, 1 Adelaide TerraceEast Perth WA 6004AustraliaT: +61 (0)8 6210 5222www.lycopodium.com.auComputershare Investor Services Pty Limited Level 11, 172 St Georges TerracePerth WA 6000T: +61 (0)8 9323 2000www.computershare.com.auClyde & Co.Level 28, 197 St Georges TerracePerth WA 6000T: +61 (0)8 6145 1700www.clydeco.comGrant Thornton Audit Pty LtdLevel 43, 152 - 158 St Georges Terrace Perth WA 6000T: +61 (0)8 9480 2000www.grantthornton.com.au101 This page has been left blank intentionally
102 • Lycopodium Annual Finanical Report 2018
Contents
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
1
24
31
32
33
34
- Notes to the Consolidated Financial Statement
35
Directors’ Declaration
Independent Auditor’s Audit Report
to the members
Shareholder Information
Corporate Directory
94
95
99
101
This financial report is the
consolidated financial report of the
group consisting of Lycopodium
Limited and its subsidiaries.
The financial report is presented in
the Australian currency.
Lycopodium Limited is a company
limited by shares, incorporated and
domiciled in Australia. Its registered
office and principal place of business
is:
Lycopodium Limited
Level 5, 1 Adelaide Terrace
East Perth WA 6004
A description of the nature of the
group’s operations and its principal
activities is included in the directors’
report on page 1, which is not part of
this financial report.
The financial report was authorised
for issue by the Directors on
20 September 2018. The Directors
have the power to amend and
reissue the financial report.
Through the use of the internet,
we have ensured that our corporate
reporting is timely and complete.
All press releases, financial reports
and other information are available
at our Shareholders’ Centre on our
website:
www.lycopodium.com.au
Lycopodium Annual Finanical Report 2018
Lycopodium Annual Financial Report 2018
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www.lycopodium.com.au