MACA Limited and its Controlled Entities
ABN 42 144 745 782
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www.maca.net.au
2016
ANNUAL REPORT
Standing from left to right:
Peter Gilford Company Secretary, Robert Ryan Non-Executive Director, Geoff Baker Operations Director,
Andrew Edwards Non-Executive Chairman, Chris Tuckwell Managing Director, Linton Kirk Non-Executive Director
CORPORATE DIRECTORY
MACA LIMITED
ABN 42 144 745 782
DIRECTORS
Andrew Edwards
Non-Executive Chairman
Chris Tuckwell
Managing Director
Geoff Baker
Operations Director
Linton Kirk
Non-Executive Director
Robert Ryan
Non-Executive Director
Peter Gilford
Company Secretary
SHARE REGISTRY
Computershare Investor Services Pty Ltd
11/122 St Georges Terrace
PERTH WA 6000
STOCK EXCHANGE
LISTINGS
MACA Limited shares are listed
on the Australian Securities Exchange
ASX Code : MLD
WEBSITE ADDRESS
www.maca.net.au
REGISTERED OFFICE
45 Division Street
WELSHPOOL WA 6106
Telephone (08) 6242 2600
(08) 6242 2677
Facsimile
SOLICITORS
Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
AUDITORS
Moore Stephens
Exchange Plaza
2 The Esplanade
PERTH WA 6000
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MACA LIMITED ANNUAL REPORT 2016
CONTENTS
Corporate Directory
About MACA
Chairman’s Address
Managing Director’s Review of Operations
Directors’ Report
Remuneration Report - Audited
Corporate Governance Statement
Auditor’s Independence Declaration
Consolidated Statement of Profit and Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Shareholder Information
Inside Front Cover
02
03
04
11
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MACA LIMITED ANNUAL REPORT 2016
1
ABOUT MACA
MACA is a successful mining services and civil
construction group providing open pit contracting
services to the mining industry including loading and
hauling, drilling and blasting, crushing and screening
and civil infrastructure services to public and private
industry. MACA currently works within Australia and in
Brazil in South America.
Incorporated as a private company in November
2002, MACA was admitted to the Australian Securities
Exchange (‘ASX’) in November 2010 following a highly
successful initial public offering (‘IPO’).
MACA has consistently delivered on its earnings
forecasts and maintains continuing positive forward
projections based on its solid financial and operational
capacity. Since listing in November 2010 MACA has paid
a total of $1.16 per share in dividends to shareholders.
MACA’s mining business specialises in providing mining
and crushing services predominantly to mid-size mining
projects across a range of commodities. Through its
dedicated civil construction and asset maintenance
businesses, MACA provides a broad range of civil
infrastructure and maintenance services to government
and private organisations. The Group currently employs
a workforce in excess of 1,200 employees and sub-
contractors.
2
MACA LIMITED ANNUAL REPORT 2016 CHAIRMAN’S ADDRESS
2016 CONTINUED TO BE A VERY CHALLENGING
ENVIRONMENT FOR THE MINING AND
CIVIL SERVICES SECTORS. AN IMPROVING
COMMODITY OUTLOOK AND IN PARTICULAR
A STRONG GOLD PRICE HAS PRESENTED
OPPORTUNITIES WITH GROWTH EXPECTED
INTO 2017 AS A RESULT.
I am pleased to report that MACA delivered a full year net
profit after tax of $24.2 million. Whilst this is down on the
prior year, it is nevertheless a solid result and a reflection of
the strength of MACA’s business to continue to deliver for
shareholders in a tough operating environment.
Central to MACA’s success is a continuing focus on
business improvement and exceeding client expectations.
This is reflected in repeat work being awarded with Regis
Resources, Doray Minerals and the awarding of a new
contract with Blackham Resources in June 2016 which is
expected to add $115 million in revenue through to around
February 2019. We also commenced our second Brazilian
operation at Antas with Avanco Resources.
During the year operations ceased at Hinge (Karara) and
Andy Well (Doray Minerals). Pleasingly, the Company
was able to successfully deploy personnel and plant and
equipment from terminated contracts into other projects.
The Civil division had a particularly tough year, incurring
a loss of $4 million. As part of our strategic response to
the extremely difficult conditions in this sector, we have
diversified and expanded our civil activities through the
acquisition of a controlling interest in Services South
East Pty Ltd, an eastern states based business which
provides road asset and maintenance services. We expect
this acquisition to underpin our objective to improve the
financial performance of the Civil division.
The Company retains a strong balance sheet with a cash
balance at 30 June 2016 of $115.6 million and net cash (after
deducting interest bearing debt) of $41.9 million.
Your Directors have declared a final dividend of 4.5 cents
per share taking the total dividends for the year to 8.5
cents fully franked. This represents a 60% dividend payout
ratio (excluding depreciation on idle equipment) which is
consistent with the Company’s targeted guideline and the
Board’s objective to both provide a return to shareholders
and retain cash resources to fund future growth plans.
MACA has a solid level of work in hand ($1.16 billion as
at 30 June 2016) and a balance sheet that provides the
capability to support its strategy to pursue organic growth
opportunities and potential acquisitions. As previously
announced, MACA is expecting revenue to increase in
FY2017 to in excess of $470 million, of which in excess of
90% is contracted.
I would like to once again especially thank our leadership
team and staff for all their hard work. Thank you also to my
fellow Directors for their wise counsel and support.
Whilst we expect conditions to remain challenging in the
coming year, we are seeing some signs of a recovery in
mining activity and improvement in investor sentiment
towards the sector. We believe MACA is well placed to
benefit from a continuation of improved market conditions
and in so doing deliver strong returns to our shareholders.
Thank you for your continuing support.
Andrew Edwards
Chairman
3
MACA LIMITED ANNUAL REPORT 2016 MANAGING DIRECTOR’S
REVIEW OF OPERATIONS
Dear Shareholders
On this, the 13th year of operation of MACA and our sixth
since listing in 2010, I am pleased to present a review of the
company’s performance to shareholders of MACA Limited.
The full year earnings result demonstrates the strength of
MACA’s business, despite what is still a very challenging
operating environment for the mining and civil sectors.
Operational activities have further rebalanced towards
gold with MACA now working for MetalsX, repeat work with
Doray Minerals, and also a new contract with Blackham
Resources. The company has also commenced another
project in Brazil for Avanco Resources in the first half. This
increased geographical presence and experience, coupled
with a strong balance sheet has MACA well placed to secure
further opportunities.
MACA continues to perform well across its spread of
projects in the mining sector. During the period MACA
continued operations at Rosemont, Garden Well and
Moolart Well for Regis Resources and Abydos and Wodgina
for Atlas Iron, and also for Beadell Resources in Brazil,
South America.
Projects commenced during the year were the Deflector
project for Doray Minerals and the company’s second
off-shore operation at the Antas project in Brazil, South
America for Avanco Resources. At financial year end MACA
was awarded and commenced mobilisation for the Matilda
project for Blackham Resources.
Two projects were taken over by MACA through an
acquisition of another smaller contract mining company
during the second half for MetalsX at their Central
Murchison operations and also for Silver Lake Resources at
the Mount Monger site.
Operations at Paroo Station for LeadFX remains in care and
maintenance and, the Hinge project for Karara Mining and
the Andy Well project for Doray Minerals were closed during
the first half with MACA successfully deploying personnel
and equipment to other MACA projects.
The commencement of the projects above, together with
the Golden Grove operations for MMG Mining which has
commenced subsequent to year end has enabled utilization
of otherwise idle equipment and importantly continued
employment for personnel relocating from completed
projects.
Whilst the mining division has produced acceptable results
the civil division has had a tough year with tendering costs
higher in proportion to revenue and also restructuring
costs for the civil divisions in both Alliance Contracting
and Services South East acquisitions. The second of these
acquisitions has allowed MACA to change its civil strategy
from being a purely road and small civil infrastructure
provider to complement its services by providing road asset
management and road maintenance capabilities.
The results have been achieved once again through a
number of success factors including:
• A strong and maintained focus on the management and
execution of our operations.
• Commitment to our clients and the relationships in our
business.
• Financial performance driven by high levels of
utilisation and a disciplined approach to our operational
and overhead management structure.
• The daily delivery of services and outcomes through the
talent of our workforce who demonstrate the Company’s
commitment to working safely every day and our “Can
Do” culture.
4
MACA LIMITED ANNUAL REPORT 2016 FINANCIAL AND OPERATING PERFORMANCE
OPERATING REVENUE OF
$431.4 MILLION
EBITDA OF
$90.7 MILLION
NET PROFIT AFTER
TAX ATTRIBUTABLE
TO MEMBERS OF
$24.2 MILLION
NET OPERATING
CASH FLOW OF
$64.1 MILLION
FINAL DIVIDEND OF
4.5 CENTS PER SHARE
(FULLY FRANKED) (TOTAL
FOR FY16 OF 8.5 CPS)
STRONG BALANCE SHEET
WITH A NET CASH POSITION
OF $41.9 MILLION
5
MACA LIMITED ANNUAL REPORT 2016 FINANCIAL PERFORMANCE
Revenue
EBITDA
EBIT
Net Profit Before Tax
Net Profit After Tax
Contracted Work in Hand
Operating Cash Flow
Earnings per share - basic
Dividends per share (fully franked)
30 June 2016
30 June 2015
Movement
$431.4m
$90.7m
$34.3m
$33.6m
$24.2m
$1,160m
$64.1m
10.4 cents
8.5 cents
$601.4m
$138.2m
$79.1m
$77.6m
$54.4m
$1,223m
$136.5m
24.0 cents
39.5 cents1
(28)%
(34)%
(57)%
(57)%
(56)%
(5)%
(53)%
(57)%
(78)%
1 Total dividends of 14.5 cents per share and a 25.0 cent per share Special Dividend were paid in FY15.
Group revenue decreased overall with a contraction in the
core mining segment of 26% and a revenue decline in the
civil business of 54%.
The after tax profit has decreased to $24.2 million for
the year ended 30 June 2016. Civil recorded a loss for
the full year of $4 million. The profit before tax has also
been impacted by approximately $10 million depreciation
expense for equipment that has been idle during the year.
EBITDA (Earnings before interest, tax, depreciation and
amortisation) was $90.7 million (21% of revenue) for the
period ending 30 June 2016, a solid result given market
conditions.
DIVIDEND
On the 23rd August 2016, the board of MACA Limited
declared a final dividend for the financial year ending 2016
of 4.5 cents per share. After adjusting for the depreciation
expense on idle equipment, this payout is consistent with
our targeted guideline and the Board’s objective to both
provide a return to shareholders and retain cash resources
to pursue future growth opportunities.
The total dividend paid during the year was $26.8 million
(2015: $89.6 million including special dividend).
OPERATING CASH FLOW AND CAPITAL
EXPENDITURE
Operating cash flow for the 12 months ending 30 June 2016
was $64.1 million.
Capital expenditure for the financial year was $34.8 million
(excluding $20.8 million in acquisitions) relating to plant,
equipment and inventory. Capital equipment purchases
were funded by a combination of cash and equipment
finance contracts in both our onshore and offshore
jurisdictions.
Assets were purchased primarily for the new contract works
in Brazil and other assets in Australia purchased to replace
specific plant and equipment previously hired and also
plant sold off to match activity levels.
BALANCE SHEET AND GEARING
Despite a decrease in revenue and assets employed, the
group as at 30 June 2016 remains in a strong financial
position with a net cash position of $41.9 million and with
cash on hand of $115.6 million.
ORDER BOOK
As at 30 June 2016 the Company had work-in-hand of $1,160
million with an average mining contract term of 30 months.
6
MACA LIMITED ANNUAL REPORT 2016 MANAGING DIRECTOR’S REVIEW OF OPERATIONS
OPERATIONS
Mining and Crushing
The division’s revenue of $399 million represented
92% of the total group revenue and was derived from
continuing operations, the completion of 2 projects and the
commencement of 5 new projects during the period.
Mining and crushing contracts by sector commenced,
continued and completed from July 2015 include:
Iron Ore
f Mining services and crushing and screening services
Continuation
Atlas Iron at Abydos
Atlas Iron at Wodgina (mining
services only)
Completed
Karara Mining at Hinge in December
2015
Gold
f Mining services
Commencement Blackham Resources at Matilda in
June 2016
Doray Minerals at Deflector in
February 2016
Metals X at the Central Murchison
operations in February 2016
Silver Lake Resources at Mount
Monger in February 2016
Continuation
Beadell Resources at Tucano (Brazil,
South America)
Regis Resources at Moolart Well
Regis Resources at Garden Well
Regis Resources at Rosemont
Doray Minerals at Andy Well in
November 2015
Completed
Copper
f Mining services
Commencement Avanco Resources at Antas (Brazil,
South America) in August 2015
Other Metals
f Mining services
Continuation
LeadFX at Paroo Station (in care and
maintenance)
Mining and crushing contracts by sector commenced and
completed subsequent to June 2016 include:
Gold/Copper
f Mining services
Commencement MMG at Golden Grove in July 2016
Completed
Silver Lake resources of Mount
Monger in September 2016
Civil
The civil business maintained its strong relationship with
Main Roads Western Australia by completing a number of
road-works projects both as the principal contractor and in
joint venture during the period.
In addition, MACA Civil (through the acquisition of Alliance
Contracting in January 2016) will continue to develop the
indigenous joint venture - Marniyarra Mining and Civil in the
Port Hedland and Karratha regions of Western Australia.
During the second half MACA purchased a controlling
interest in a civil business Services South East Pty Ltd (SSE)
that predominantly offers road and asset maintenance
services and has existing long term contracts in Victoria and
also has carried out work in South Australia.
MACA Civil achieved re-certification in the National pre-
qualification system to R4 level for Roads and has retained
its accreditation to the Office of Federal Safety. This allows
continued participation on or competing for federally
funded public infrastructure projects.
7
MACA LIMITED ANNUAL REPORT 2016 Civil contracts by sector commenced, continued and
completed from July 2015 include:
Public sector
MACA Civil
Main Roads Department of Western Australia
NWCH - Manilya to Mia Mia section
Construct Only project - Widening, reconstruction and
overlay of 40km of major North West
Coastal Highway (NWCH) including replacement of all
under road culverts (completed December 2015)
Fortescue River Bridge
Construct Only project - Works include all earthworks,
pavements, seal work and bridge works (completed
February 2016)
Bussell Highway - Vasse Bypass
Construct Only project - Works include all earthworks,
pavements, seal work, bridge works and precast
concrete underpass (completed April 2016)
Collie Lake King Road
Construct Only project - Works include all earthworks,
pavements and seal work (due for completion October
2016)
Fauntleroy / GEH intersection and approaches
Construct Only project - Works include all earthworks,
pavements and seal work (due for completion December
2016)
Services South East (SSE)
VicRoads - (Victorian Roads Corporation) - Western Region
Maintenance
Routine maintenance of pavement, shoulders, roadside
areas, drainage systems and structures on arterial
roads - contract ongoing to 2019
VicRoads - (Victorian Roads Corporation) - East Metropolitan
Region Maintenance
Routine maintenance of roadside areas of major
freeways - contract ongoing to 2019
Baw Baw Shire Council - Routine Road Maintenance
Services
Provision of road maintenance services for rural and
urban road network including sealed and unsealed
roads - ongoing to 2021
8
MACA LIMITED ANNUAL REPORT 2016 MANAGING DIRECTOR’S REVIEW OF OPERATIONS
HEALTH, SAFETY AND ENVIRONMENT
MACA acknowledges that the successful leadership in
safety is critical to our business success and its philosophy
that each employee return home every day safe and in the
same way they began the day.
Focus on the development of new safety standard initiatives
continues as one of our key business drivers with the goal
of ‘Zero Harm’ underpinning every task we perform in the
workplace.
MACA manages risk through the continual improvement,
measurement and review of its systems and processes
targeted specifically to prevent incidents. Quarterly audits
are conducted across all projects to measure compliance
against our certified Occupational Health and Safety
Management Systems (AS/NZS: 4801) and Environmental
Management Systems (ISO: 14001) to provide a safe
workplace for its employees, contractors and visitors.
The continued focus on health and safety through our audit
and compliance processes has seen our Lost Time Injury
Frequency Rate (LTIFR) at zero for a period of 36 months to
June 2016 and remains well below industry benchmarks.
Efforts this year have resulted in a 35% reduction in
the number of incidents and the Total Recordable Injury
Frequency Rate (TRIFR) has reduced by 24%.
QUALITY MANAGEMENT
MACA Mining and MACA Civil secured re-certification until
April 2018 for its Quality Management Systems (ISO: 9001)
during the year and continues to develop their systems to
support growth through continual measurement and review.
HUMAN RESOURCES
The Group’s Australian operations have decreased and
the South American operations have increased employee
numbers over the last year.
The number of employees within the Group worldwide
stood at 1,198 – an increase of 4% on the number at the
corresponding period last year.
PEOPLE IN MACA
Workforce
- Mining
Workforce
- Civil
Workforce
- Brazil
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The Group retains a core of highly experienced long serving
employees (+ 5 years’ and 10 years’ service) that form
the backbone of the Company and which it relies on to
concentrate our efforts to remain efficient and competitive
in a very difficult environment.
Imperative to our business success is the skills and
experience of our people and their ability to work in a
safe and productive manner. The labour market has eased
considerably allowing the Group an opportunity to attract
new talent whilst building on its retention strategies.
MACA continues to develop and improve a number of
programs to enhance the performance and satisfaction
of our workforce even when the industry in general has
retracted. Internal and external leadership programs, first
year and mature trade apprenticeships, scholarships for
mining and civil engineers, and the in-house development
of our key people ensures the skills and capability of our
workforce is enabled to meet future business challenges.
MACA maintains a proactive approach to diversity through
the monitoring of employment outcomes particularly
for female and indigenous groups. Policies have been
established to meet our commitment to embrace diversity
and recruitment and retention strategies.
9
MACA LIMITED ANNUAL REPORT 2016
MANAGING DIRECTOR’S REVIEW
OF OPERATIONS
COMMUNITY
MACA, with the support of its employees, suppliers and
stakeholders maintains a strong link to the jurisdictions
and communities in which it operates. The Company
actively contributes and supports many regional and local
groups across a diverse range of activities as part of our
focus in community engagement.
MACA is the Title Sponsor for the ‘Ride to Conquer Cancer
(RTCC)’ which directly supports the Harry Perkins Institute
of Medical Research (Perkins). The support of ‘Perkins’
and the ride will continue in the current year with MACA
workforce and stakeholders united in its efforts to raise in
excess of $1.0m with 240 participating riders for this year’s
event.
During the year MACA continued its long-term association
with the Princess Margaret Hospital Foundation, through
the provision of funds for medical equipment. The Company
is also involved in various forms of sponsorship with the
Hawaiian Ride for Youth and the West Australian Symphony
Orchestra.
MACA highly values its hard working and loyal employees.
The Board would like to extend its thanks to them and all
of our stakeholders who remain an essential part of our
success.
Chris Tuckwell
Managing Director, CEO
10
MACA LIMITED ANNUAL REPORT 2016 The Directors present their report, together with the financial statements, of the consolidated entity (referred to hereafter as
the ‘consolidated entity’) consisting of MACA Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the entities
it controlled for the year ended 30 June 2016.
DIRECTORS
The following persons were directors of MACA Limited during whole or part of the financial year and up to the date of this
report, unless otherwise stated:
Mr (Hugh) Andrew Edwards (Chairman, Non-executive Director)
Mr Christopher Mark Tuckwell (Chief Executive Officer and Managing Director)
Mr Geoffrey Alan Baker (Executive Director)
Mr Linton John Kirk (Non-executive Director)
Mr Robert Neil Ryan (Non-executive Director) - appointed 18th August 2015
PRINCIPAL ACTIVITIES AND ANY SIGNIFICANT CHANGES IN NATURE
The principal activities of the Group during the financial year were the contracting of mining and civil services to the mining and
resources industry.
There were no significant changes in the nature of the Group’s principal activities during the financial year.
DIVIDENDS PAID OR RECOMMENDED
Dividends that are fully franked and paid or declared for payment since the end of the previous financial year are as follows:
Interim dividend declared and paid for per ordinary share
Final dividend declared and paid for per ordinary share
The final fully franked dividend was paid on 26th September 2016.
DIVIDEND REINVESTMENT PLAN
There is no dividend reinvestment plan in place.
2016
cps
4.0
4.5
2015
cps
7.0
7.5
11
DIRECTORS’ REPORT MACA LIMITED ANNUAL REPORT 2016 REVIEW OF OPERATIONS
A summary of key financial indicators is set out in the table below.
A review of, and information about the operations of the consolidated entity for the financial year and the results of those
operations are set out in the Chairman’s Address and the Managing Director’s Review of Operations that forms part of this
Directors’ report.
Revenue
EBITDA
EBIT
Net Profit before tax
Net Profit after tax
Contracted Work in Hand
Operating Cashflow
Dividend per share (fully franked)
Basic earnings per share
FY2016
$’m
FY2015
$’m
$431.4
$90.7
$34.3
$33.6
$24.2
$1,160
$64.1
$601.4
$138.2
$79.1
$77.6
$54.4
$1,223
$136.5
8.5 cents
10.4 cents
39.5 cents
24.0 cents
Change
(28%)
(34%)
(57%)
(57%)
(56%)
(5%)
(53%)
(78%)
(57%)
ENVIRONMENTAL ISSUES
The MACA Group is aware of its environmental obligations with regard to its principal activities and ensures it complies with all
regulations.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have not been any significant changes in the state of affairs of the Company.
CHANGES IN CONTROLLED ENTITIES
During the period MACA gained control of the following entities:
Alliance Contracting Pty Ltd;
Services South East Pty Ltd; and
Marniyarra Mining and Civil Pty Ltd.
EVENTS SUBSEQUENT TO BALANCE DATE
After balance date events include the following:
MACA has commenced a small mining services contract with MMG Mining at Golden Grove; and MACA has commenced a small
crushing services contract with Merlin Diamonds in the Northern Territory.
Other than the matters detailed above no circumstances have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial years.
12
DIRECTORS’ REPORTMACA LIMITED ANNUAL REPORT 2016 DIRECTORS’ REPORT
INFORMATION ON CURRENT DIRECTORS
Name:
Title:
Mr Andrew Edwards
Independent Non-executive Chairman
Qualifications:
B Com, FCA, SF Finsia, FAICD
Experience and expertise:
Mr Edwards is a former Managing Partner of PriceWaterhouseCoopers (PwC), Perth Office,
a former national Vice President of the Securities Institute of Australia (now the Financial
Institute of Australasia) and a former President of the Western Australian division of that
Institute. Mr Edwards is a Fellow of Chartered Accountants Australia and New Zealand and
has served as state councillor of that Institute.
Current directorships:
Mr Edwards has been a board member of MACA Limited since 10th November 2010.
Former directorships
(in last 3 years):
Special responsibilities:
Mr Edwards is currently a Non-executive Director of MMA Offshore Limited (appointed
December 2009) and Nido Petroleum Limited (appointed December 2009).
Mr Edwards was a Non-executive Director of Aspire Mining Limited from July 2011 to May
2014.
Mr Edwards is currently a member of the Board’s Remuneration Committee, Audit
Committee and Risk Committee.
Interest in shares
20,000
Name:
Title:
Mr Chris Tuckwell
Chief Executive Officer and Managing Director
Qualifications:
B Eng (Construction) MAICD
Experience and expertise:
Mr Tuckwell holds a Bachelor of Engineering - Construction and has spent his entire career
within the mining industry, working with both mining contractors and mining companies
over the past 31 years. During his career Mr Tuckwell has also fulfilled senior off-shore
management and executive positions in West and East Africa, South America, Indonesia
and the West Indies.
Current directorships:
Mr Tuckwell has been a board member of MACA Limited since 4th August 2014.
Former directorships
Mr Tuckwell was a board member of MACA Limited from 10th November 2010 to 25th July
2012.
Special responsibilities:
Mr Tuckwell is currently a member of the Board’s Risk Committee.
Interest in shares
612,500
Name:
Title:
Mr Geoff Baker
Executive Director
Qualifications:
MAICD
Experience and expertise:
Mr Baker is a founding shareholder of MACA. Geoff is responsible for planning, operating
strategy, capital expenditure and delivery of safety and financial outcomes on all projects.
Mr Baker has worked in the sector for 37 years focusing on plant maintenance and asset
management.
Current directorships:
Mr Baker has been a board member of MACA Limited since 10th November 2010.
Former directorships
Nil
(in last 3 years):
Special responsibilities:
Mr Baker is currently a member of the Board’s Risk Committee.
Interest in shares
12,500,000
13
MACA LIMITED ANNUAL REPORT 2016 Name:
Title:
Mr Linton Kirk
Independent Non-executive Director
Qualifications:
B Eng (Mining) FAusIMM (CP) GAICD
Experience and expertise:
Mr Kirk has over 30 years’ experience in mining and earthmoving, covering both open pit
and underground operations in several commodities. He has held technical, operational
and management positions in a variety of mining and mining service companies throughout
the world prior to becoming a consultant in 1997. Mr Kirk holds a Bachelor of Engineering
(Mining) degree from the University of Melbourne, is a fellow and Charted Professional
of the Australian Institute of Mining and Metallurgy and is a graduate of the Australian
Institute of Company Directors.
Current directorships:
Mr Kirk has been a board member of MACA Limited since 1st October 2012.
Former directorships
(in last 3 years):
Special responsibilities:
Mr Kirk was a Non-executive Director of Middle Island Resources from September 2011 to
July 2016.
Mr Kirk is currently the Chair of the Boards’ Audit Committee and Risk Committee and a
member of the Remuneration Committee.
Interest in shares
50,000
Name:
Title:
Mr Robert Ryan
Independent Non-executive Director
Qualifications:
CP Eng MIEAust MAICD
Experience and expertise:
Mr Ryan has extensive civil contracting and construction engineering experience with
particular expertise in engineering, project, asset and senior management. His experience
in infrastructure projects is substantial. Mr Ryan has extensive experience at senior
levels of a significant public company and was a partner in a successful civil earthmoving
business for over 12 years.
Current directorships:
Mr Ryan has been a board member of MACA Limited since 18th August 2015.
Former directorships
Nil
(in last 3 years):
Special responsibilities:
Mr Ryan is currently the Chair of the Boards’ Remuneration Committee and member of the
Audit Committee and Risk Committee.
Interest in shares
18,604
Company Secretary
Name:
Title:
Mr Peter Gilford
Chief Financial Officer / Company Secretary
Qualifications:
B Com, CA
Experience and expertise:
Mr Gilford has over 15 years’ experience in the areas of financial management, accounting,
business and taxation services. He has provided services to a large number of mining,
exploration and construction companies and has provided services to MACA for over 10
years. Mr Gilford has acted in roles of Director, Company Secretary and CFO for a number of
privately owned businesses. Peter is a member of the Chartered Accountants Australia and
New Zealand and has completed a Graduate Diploma in Applied Corporate Governance with
the Governance Institute of Australia.
14
DIRECTORS’ REPORTMACA LIMITED ANNUAL REPORT 2016 DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The number of directors meetings which directors were eligible to attend (including Committee meetings) and the number
attended by each director during the year ended 30th June 2016 were as follows:
Directors’ Meetings
Audit
Committee Meetings
Remuneration
Risk
Number
eligible
to attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
7
7
7
7
7
7
7
6
6
7
2
-
-
2
2
2
-
-
2
2
3
-
-
3
3
3
-
-
3
3
1
1
1
1
1
1
1
1
1
1
Andrew Edwards
Chris Tuckwell
Geoff Baker
Linton Kirk
Robert Ryan
REMUNERATION REPORT
The audited remuneration report is set out on pages 19 to 32 and forms part of this Directors’ report.
INDEMNIFYING OFFICERS OR AUDITOR
During the financial year the Company paid a premium in respect of a contract insuring the directors of the Company, the
company secretary and all executive and non-executive directors of the Company and any related body corporate against a
liability incurred as such a director, company secretary or executive officer to the extent permitted by the Corporations Act 2001.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability
incurred as such by an officer or auditor. In accordance with a confidentiality clause under the insurance policy, the amount of
the premium paid to insurers has not been disclosed. This is permitted under s300(9) of the Corporations Act 2001.
15
MACA LIMITED ANNUAL REPORT 2016 PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
The Company was not a party to any such proceedings during the year.
ASIC CI 2016/191 ROUNDING OF AMOUNTS
The company is an entity to which ASIC CI 2106/191 Rounding of Amounts applies and, accordingly, amounts in the financial
statements and directors’ report have been rounded to the nearest thousand dollars.
NON AUDIT SERVICES
No non-audit services were provided during the year by the auditor to the Company or any related body corporate.
AUDITORS INDEPENDENCE DECLARATION
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 39 and
forms part of the directors’ report for the financial year ended 30 June 2016.
RISK
MACA’s risk management framework is embedded within existing processes and is aligned to the Company’s strategic business
objectives. Given the markets and the geographies in which the Company operates, a wide range of risk factors have the
potential to affect the achievement of these objectives. For further information in relation to the Company’s risk management
framework, refer to the Corporate Governance Statement.
Set out below is an overview of the more significant business risks facing MACA and the approach taken to managing those
risks. These risks do not comprise every risk that MACA could encounter nor are they set out in any particular order, when
conducting its business.
HEALTH, SAFETY, SUSTAINABILITY AND ENVIRONMENT RISK
The mining industry involves a high degree of operational risk. MACA believes it takes reasonable precautions to manage safety
and environmental risks to ensure the continued sustainability of the business. However, there can be no assurance that the
Company will avoid significant costs, liability and penalties or criminal prosecution. This risk is mitigated by progressively
improving on already high safety performance standards across the business and by maintaining independently reviewed
health and safety, environmental and quality certifications.
DEMAND RISK
MACA is a contractor operating predominantly in the mining resources and civil sectors. As a result, failure to obtain contracts,
delays in awards of contracts, cancellations or terminations of contracts, delays in completion, changes in economic conditions
and the volatile and cyclical nature of commodity prices means that the demand for MACA’s goods and services can vary
markedly over relatively short periods. Accordingly, changes in market conditions could impact MACA’s financial performance.
The Company seeks to manage demand risk as best it can by maintaining a diversified client base and commodity mix and
having a proportion of equipment and labour on hire.
16
DIRECTORS’ REPORTMACA LIMITED ANNUAL REPORT 2016 DIRECTORS’ REPORT
ORDER BOOK RISK
Generally in the mining industry, most contracts can be terminated for convenience by the customer at short notice and without
penalty, with the customer paying for all work completed to date, unused material and in most cases demobilisation from the
site and redundancies. As a result, there can be no assurance that work in hand will be realised as revenue in any future period.
MACA seeks to manage this risk by being selective in the contracts that it enters into and always seeks to extend contracts
where possible in an effort to maximise its return on capital.
PROJECT DELIVERY RISK
The execution and delivery of projects involves judgment regarding the planning, development and operation of complex
operating facilities and equipment. Some parts of MACA’s business are involved in large-scale projects that may occur over
extended time periods. As a result, the Company’s operations, cash flows and liquidity could be affected if MACA miscalculates
the resources or time needed to complete a project, if it fails to meet contractual obligations, or if it encounters delays or
unspecified conditions. MACA maintains a strict project monitoring regime, proactive management and decision making to
mitigate project delivery risks.
COMPETITION RISK
The market in which MACA operates is highly competitive, which may result in downward pressure on prices and margins.
If MACA is unable to compete effectively in its markets, it runs the risk of losing market share. MACA continues to focus on
delivering quality services to make us a contractor of choice as a means of mitigating this risk.
CONTRACT PRICING RISK
MACA has a mixed exposure to contract types. However, if the Company materially underestimates the cost of providing
services, equipment, or plant, there is a risk of a negative impact on MACA’s financial performance. MACA follows a proven
tender review process to reduce the risk of under-pricing contracts.
LIQUIDITY RISK
The risk of MACA not being able to meet its financial obligations as they fall due is managed by maintaining adequate cash
reserves and available borrowing facilities, as required. Errors or unforeseen changes in actual and forecast cash flows that
then create a mismatch against the maturity profiles of financial assets and liabilities could have a detrimental effect on the
Company’s liquidity. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Company’s reputation.
PARTNER RISK
MACA, in some cases, may undertake services through and participate in, joint ventures or partnering/alliance arrangements.
The success of these partnering activities depends on the satisfactory performance by MACA’s partners. The failure of partners
to meet performance obligations could impose additional financial and performance obligations that could cause significant
impact on MACA’s reputation and financial results. MACA completes due diligence on potential partners prior to forming any
business relationship and regularly monitors these relationships.
17
MACA LIMITED ANNUAL REPORT 2016 BUSINESS ACQUISITIONS
When MACA acquires a business there is a risk of not being able to realise or sustain expected benefits of the acquisition. The
goodwill represents the amounts paid for the business, less the fair value of the net assets acquired. MACA, at least annually,
reviews the carrying value of goodwill and may incur impairment charges related to goodwill if the businesses or markets they
serve deteriorate. In addition, businesses that MACA acquires may have liabilities that MACA was unaware of in the course
of performing due diligence investigations. Any such liabilities may have material adverse impact on MACA’s business and
financial position. As part of the due diligence process MACA thoroughly reviews all contracts to mitigate the risk of acquiring
onerous contracts.
CURRENCY FLUCTUATION
As a Company with international operations, MACA is exposed to fluctuations in the value of the Australian dollar versus
other currencies. Because MACA’s consolidated financial results are reported in Australian dollars, if MACA generates sales or
earnings or has assets and liabilities in other currencies, the translation into Australian dollars for financial reporting purposes
can result in a significant increase or decrease in the amount of those sales or earnings and net assets. MACA uses cash backed
deposits to mitigate some of the US dollar currency risk. Currently the company has unhedged exposure to the Brazilian Real.
Other material risks that could affect MACA include
• a major operational failure or disruption at key facilities or to communication systems which interrupt MACA’s business
• changing government regulation including tax, occupational health and safety, and changes in policy and spending
• operating in international markets, potentially exposing MACA to economic conditions, civil unrest, conflicts, and bribery
and corrupt practices
loss of reputation through poor project outcomes, unsafe work practices, unethical business practices, and not meeting the
market’s expectation of its financial performance
foreign exchange rates and interest rates in the ordinary course of business, and
loss of key Board, management or operational personnel.
•
•
•
OUTLOOK
MACA has a strong current level of work in hand at $1.16 billion and a very strong balance sheet. Although market conditions
remain challenging we are experiencing some signs of the start of a recovery and a commensurate improvement in both the
mining activity and investor sentiment towards the sector. MACA is well placed to benefit from the continuation of this recovery.
The Company similarly expects to benefit from its recent investment in its expanded civil and infrastructure operations through
increased spending on road and asset management and maintenance services within the private and public sector. MACA is
expecting revenue for FY2017 to increase from the current year to exceed $470 million, of which in excess of 95% is contracted.
MACA is selectively identifying development opportunities and is well positioned to deliver quality services to customers in the
mining, civil and infrastructure sectors.
MACA’s strong operational performance and relationships with its clients continues to generate opportunities for growth. MACA
is focused on continuing to deliver its services to clients whilst maintaining the ongoing commitment to its people, their safety
and the culture that has made the business successful to date.
The Company has a strong balance sheet to fund future projects and acquisitions and continues to evaluate new opportunities.
18
DIRECTORS’ REPORTMACA LIMITED ANNUAL REPORT 2016 Remuneration Report - audited
Section
Title
Description
Section 1
Introduction
Outlines the scope of the Remuneration Report and the individuals disclosed.
Section 2
Remuneration Governance
Describes the role of the board, the Remuneration Committee and matters
considered (including external advice) when making remuneration decisions.
Section 3
Section 4
Section 5
2016 Executive remuneration
framework and improvements
Outlines the 2016 remuneration framework and changes to remuneration
plans.
Company performance and the
link to remuneration
Executive remuneration
outcomes
The outcomes of the key business metrics and hurdles that are used for
measuring variable pay outcomes.
Provides Chief Executive officer remuneration, Short Term Incentive (STI) and
Long Term Incentive (LTI) Plan details and Executive remuneration outcomes
for the year.
Appointments and notice periods for current and former Key Management
Personnel.
Section 6
Executive contracts
Section 7
Non-executive Directors’ fees
Provides detail regarding the fees paid to Non-executive Directors.
1 Introduction
This remuneration Report forms part of the Directors’ Report for 2016 and outlines the remuneration strategy and arrangements
for the Company’s Directors and Executives (together “Key Management Personnel” or “KMP”) in accordance with section 300A
of the Corporations Act.
1.1 Key Management Personnel
The KMP of the Group during and since the end of the financial year comprise the company directors (as detailed in the beginning
of the Directors’ Report) and the following senior executive officers. Except as noted, these persons held their current position for
the whole of the financial year and since the end of the financial year.
Person
Position
Directors - Non-executive
Period in position during the year
Andrew Edwards
Non-executive Chairman
Full year
Linton Kirk
Robert Ryan
Directors - Executive
Non-executive Director
Non-executive Director
Chris Tuckwell
Chief Executive Officer and Managing Director
Geoff Baker
Executives
Tim Gooch
Operations Director
General Manager - Mining
Mitch Wallace
General Manager - Brazil Operations
Maurice Dessauvagie
General Manager - Civil
David Greig
Peter Gilford
Former KMP
General Manager - Business Development
Chief Financial Officer and Company Secretary
Full Year
Appointed effective 18th August 2015
Full year
Full year
Full year
Full year
Full year
Appointed effective 18th July 2016
Full year
Jeremy Connor
General Manager - Business Development
Resigned effective 1st April 2016
19
REMUNERATION REPORT - AUDITED MACA LIMITED ANNUAL REPORT 2016 2 Remuneration Governance
The Board oversees the remuneration arrangements of the Company.
In performing this function the Remuneration Committee reviews the remuneration packages of all Directors, the Chief Executive
Officer and other Executives (collectively the KMP).
The Committee makes recommendations to the Board on an annual basis with benchmarking against comparable industry
packages and adjusting to recognise the specific performance of both the company and the individual.
The Remuneration Committee may also engage an external remuneration consultant to review the levels of senior executive and
non-executive remuneration. No external remuneration consultant was engaged over the past financial year.
A decision to reduce executive salaries with effect from 1 June 2015 in recognition of current market conditions was introduced
and is still in effect.
3 2016 Executive remuneration framework
Remuneration practices are continuously developed in line with the Company’s business demands, industry conditions and overall
market trends. The primary goal
is to link executive remuneration with the achievement of MACA’s business and strategic
objectives with the aim to increase shareholder value over the short and longer term. The nature and amount of compensation for
executive KMP is designed to retain and motivate individuals on a market competitive basis.
Remuneration Framework
Total fixed remuneration (TFR)
Short-term incentive (STI)
Long-term incentive (LTI)
◦
◦
◦
TFR takes into account similar positions
in peer companies, length of service,
experience and contribution
Peer companies are those with broadly
similar revenue and in related
industries
TFR is reviewed annually
Financial metrics comprise some or all of:
◦
◦
◦
◦
◦
◦
◦
◦
Net profit after tax - division
Net profit after tax - company
Earnings per share
Return on equity
Non-financial metrics
Safety indicators - LTI and TRIFR
Personal performance
Maximum STI is 15 - 25% of TFR
depending on the individual
◦
◦
Relative TSR using a benchmark
index namely the S&P/ASX Small
Odinaries Accumulation Index
(XSOAI) measure over a 3 year
period (100% component)
Number of performance rights
issued up to 25% of fixed annual
remuneration divided by the
independently assessed value of a
performance right
20
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016 2 Remuneration Governance
The Board oversees the remuneration arrangements of the Company.
In performing this function the Remuneration Committee reviews the remuneration packages of all Directors, the Chief Executive
Officer and other Executives (collectively the KMP).
The Committee makes recommendations to the Board on an annual basis with benchmarking against comparable industry
packages and adjusting to recognise the specific performance of both the company and the individual.
The Remuneration Committee may also engage an external remuneration consultant to review the levels of senior executive and
non-executive remuneration. No external remuneration consultant was engaged over the past financial year.
A decision to reduce executive salaries with effect from 1 June 2015 in recognition of current market conditions was introduced
and is still in effect.
3 2016 Executive remuneration framework
Remuneration practices are continuously developed in line with the Company’s business demands, industry conditions and overall
market trends. The primary goal
is to link executive remuneration with the achievement of MACA’s business and strategic
objectives with the aim to increase shareholder value over the short and longer term. The nature and amount of compensation for
executive KMP is designed to retain and motivate individuals on a market competitive basis.
Remuneration Framework
Total fixed remuneration (TFR)
Short-term incentive (STI)
Long-term incentive (LTI)
◦
TFR takes into account similar positions
Financial metrics comprise some or all of:
◦
Relative TSR using a benchmark
in peer companies, length of service,
experience and contribution
Net profit after tax - division
Net profit after tax - company
◦
Peer companies are those with broadly
Earnings per share
Return on equity
industries
◦
TFR is reviewed annually
Safety indicators - LTI and TRIFR
Personal performance
Maximum STI is 15 - 25% of TFR
depending on the individual
◦
◦
◦
◦
◦
◦
◦
◦
index namely the S&P/ASX Small
Odinaries Accumulation Index
(XSOAI) measure over a 3 year
period (100% component)
issued up to 25% of fixed annual
remuneration divided by the
independently assessed value of a
performance right
similar revenue and in related
Non-financial metrics
◦
Number of performance rights
REMUNERATION REPORT - AUDITED
4 Company performance and the link to remuneration
Key Performance Indicators (‘KPIs’) for both short term and long-term Executive incentive schemes are linked to the Company’s
strategic and business objectives and as a result, pay outcomes are directly aligned with Company performance against these
objectives.
The following Company performance measures are among those that may be included in incentive plans for relevant executives.
KPIs may be adjusted for individually large or unusual
items to derive an underlying performance measure outcome. The
Committee believes these KPIs are aligned to Shareholder wealth and returns to investors.
2016
2015
2014
2013
2012
2011
Reported net profit/(loss)
attributable to equity holders of
the parent ($m)
Reported return on equity (%)
Reported basic earnings per
share (cents)
Long term injury frequency rate
(LTIFR)
Total recordable injury frequency
rate (TRIFR)
Shareholders’ Wealth
Interim dividend declared (cents)
Final dividend declared (cents)
Special dividend declared (cents)
Share price at 30 June (cents)
1Total shareholder return (TSR %)
Compound 3 year TSR %
24.2
9.5
10.4
0
13.7
4.0
4.5
-
126
79.6
7.4
54.4
21.7
24
0
14.8
7
7.5
25
77
-37
-9.1
55.4
22.5
30.3
0
15.3
6.5
7.5
30
185
28.2
0.3
49.5
23.3
31.5
2
15.9
4.5
5.5
-
177
-17.3
-
37.7
23.7
25.1
0
-
3.5
4.5
-
225
-5.5
-
28.7
37.5
19.7
0.8
-
3
3
-
245
1.2
-
1 All dividends in the TSR (Total Shareholder Return) calculation are on a paid basis each year. The dividends in the table are as declared (rather than paid) in
respect to each financial year.
5 Executive remuneration outcomes
In light of market conditions the Group executives and senior management of the Company reduced their base salaries by 5 to
10% dependent on position from the 1st June 2015. These levels were held for the 12 months to June 2016 and were then
reviewed at that time. A further decision to hold these levels through to December 2016 has been made and will be reviewed at
that time. Prior to this executive remuneration increases were in line with CPI other than where there were changes in role,
responsibility or position.
5.1 Managing Director and CEO arrangements
Mr Tuckwell’s remuneration package as CEO was determined by benchmarking it against that paid to CEOs in similar
organisations. The remuneration package comprises the following components:
-
-
Total Fixed Remuneration (TFR) originally set at $715,000 per annum inclusive of superannuation plus the use of a company
motor vehicle. This was subject to annual review but not before March 2016. This amount has been reduced by 10% as
outlined above.
An STI which includes the opportunity to earn an annual cash bonus of up to 25% of total fixed remuneration, subject to
achieving performance hurdles. Mr Tuckwell’s STI plan has been aligned with other senior executives under similar plan
rules with KPIs that align to profitable performance and safety. The CEO’s STI Plan comprises 60% for key financial KPI’s, 20%
for safety KPI’s and 20% for personal KPI’s. The financial KPIs comprise Profit after Tax, Return on Equity and Earnings per
Share growth. The safety KPIs are based on the Long Term Injury Frequency Rate and the Total Recordable Injury Frequency
Rate.
There was no STI payable for Mr Tuckwell for 2016 as the STI program was put on hold until December 2016 - refer 5.4 below.
-
An LTI under which Mr Tuckwell may receive share performance rights convertible into fully paid shares, subject to
performance criteria being met. At the 2015 Annual General Meeting the Board sought and received approval for the grant
of 444,737 Performance Rights pursuant to the Company’s Performance Rights Plan (PRP). Subject to the relevant
performance hurdles being met, these may vest in June 2018.
21
MACA LIMITED ANNUAL REPORT 2016 5.2 Total Fixed Remuneration (TFR)
All Executives received TFR as outlined in page 27 of this report. TFR comprises base salary and superannuation plus the use of a
company motor vehicle or motor vehicle allowance.
Fixed pay has been reviewed and set against peer companies with whom MACA competes. MACA also benchmarks through
industry surveys and reports and may seek external advice for KMP remuneration.
5.3 Short-Term Incentive Plan (STI Plan)
Key features of the STI Plan are outlined in the table below.
STI Plan
Objective
Eligibility
At risk payments
Performance conditions
Setting of KPIs
Assessment of KPIs
Trigger for payment
Cessation of employment
KPIs are set to encourage a profit and safety driven culture with the ultimate aim of driving
Stakeholder returns. The STI payments are structured to recognize and motivate employees
to align their performance with the Company’s goals.
All executive key management personnel.
2015: The STI is a component of ‘at risk’ pay provided to Executives and KMP. The amount of
bonus actually earned will depend on performance against predetermined KPIs with payment
commencing upon reaching those hurdles.
% of TFR paid on Target Achievement
CEO
Executive Directors
Other Executive KMP
25%
25%
15%
2016: During the financial year the STI plan was suspended for all executives
% of TFR paid on Target Achievement
CEO
Executive Directors
Other Executive KMP
0%
0%
0%
2015: KPIs are set for the Group and business division (where relevant).
Each KPI is weighted according to its importance in driving profitable performance and
returns to Shareholders.
KPIs for the CEO and Executive Directors include Earning per Share (EPS), Net Profit after Tax
(NPAT), Return on Equity (ROE), Long Term Injury Frequency Rate (LTIFR), Total Recordable
Injury Frequency Rate (TRIFR) and personal assessment.
KPIs for other Executive KMP include Net Profit after Tax (NPAT), business operating unit
profit performance, Long Term Injury Frequency Rate (LTIFR), Total Recordable Injury
Frequency Rate (TRIFR) and personal assessment.
2016: KPIs are set for the Group, and Business division (where relevant) – the KPI Program
was put on hold for all Executives for the full year 2016 and has been extended out until
December 2016.
2015: Financial and safety targets are all agreed with the Board and personal KPIs are set in
consultation with the relevant Executive.
2016: Suspended.
2015: Performance is measured quantitatively and progress against key targets measured at
half year and full year.
2016: Suspended.
2015: Any performance target met will trigger the calculation of total or part payment of the
STI. The board may exercise its discretion in relation to the payment of STI’s.
2016: Suspended.
2015: STI forfeited if an Executive or KMP resigns or is terminated before the payment date.
In exceptional circumstances this may be reviewed by the Board.
2016: Suspended.
22
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016
5.2 Total Fixed Remuneration (TFR)
All Executives received TFR as outlined in page 27 of this report. TFR comprises base salary and superannuation plus the use of a
company motor vehicle or motor vehicle allowance.
Fixed pay has been reviewed and set against peer companies with whom MACA competes. MACA also benchmarks through
industry surveys and reports and may seek external advice for KMP remuneration.
5.3 Short-Term Incentive Plan (STI Plan)
Key features of the STI Plan are outlined in the table below.
STI Plan
Objective
Eligibility
At risk payments
KPIs are set to encourage a profit and safety driven culture with the ultimate aim of driving
Stakeholder returns. The STI payments are structured to recognize and motivate employees
to align their performance with the Company’s goals.
All executive key management personnel.
2015: The STI is a component of ‘at risk’ pay provided to Executives and KMP. The amount of
bonus actually earned will depend on performance against predetermined KPIs with payment
commencing upon reaching those hurdles.
% of TFR paid on Target Achievement
2016: During the financial year the STI plan was suspended for all executives
% of TFR paid on Target Achievement
Executive Directors
Other Executive KMP
CEO
CEO
Executive Directors
Other Executive KMP
returns to Shareholders.
25%
25%
15%
0%
0%
0%
Performance conditions
2015: KPIs are set for the Group and business division (where relevant).
Each KPI is weighted according to its importance in driving profitable performance and
KPIs for the CEO and Executive Directors include Earning per Share (EPS), Net Profit after Tax
(NPAT), Return on Equity (ROE), Long Term Injury Frequency Rate (LTIFR), Total Recordable
Injury Frequency Rate (TRIFR) and personal assessment.
KPIs for other Executive KMP include Net Profit after Tax (NPAT), business operating unit
profit performance, Long Term Injury Frequency Rate (LTIFR), Total Recordable Injury
Frequency Rate (TRIFR) and personal assessment.
2016: KPIs are set for the Group, and Business division (where relevant) – the KPI Program
was put on hold for all Executives for the full year 2016 and has been extended out until
Setting of KPIs
2015: Financial and safety targets are all agreed with the Board and personal KPIs are set in
Assessment of KPIs
2015: Performance is measured quantitatively and progress against key targets measured at
Trigger for payment
2015: Any performance target met will trigger the calculation of total or part payment of the
STI. The board may exercise its discretion in relation to the payment of STI’s.
Cessation of employment
2015: STI forfeited if an Executive or KMP resigns or is terminated before the payment date.
In exceptional circumstances this may be reviewed by the Board.
December 2016.
consultation with the relevant Executive.
2016: Suspended.
half year and full year.
2016: Suspended.
2016: Suspended.
2016: Suspended.
REMUNERATION REPORT - AUDITED
5.4 STI Outcomes
In light of the current market conditions, the decision has been taken to suspend the STI plan for the 2016 financial year (subject
to the Board's discretion to reinstate this should market conditions change).
5.5 Long-Term Incentive Plan (LTI Plan)
Key features of the LTI Plan are outlined in the table below.
LTI Plan
Overview of the LTI Plan
Objective
Eligibility
At risk payments
The Plan offers Executives and KMP performance rights with the opportunity to receive fully
paid ordinary shares in MACA Limited for no consideration, subject to specified time
restrictions, continued employment and performance conditions being met. Each
performance right will entitle participants to receive one fully paid ordinary share at the time
of vesting.
The Plan is designed to assist with Executive and KMP retention and to incentivise employees
to maximise returns and earnings for Shareholders.
Executive KMP as determined by the Board.
2015: The LTI is a component of ‘at risk’ pay provided to Executives and KMP. The number of
performance rights issued will depend on performance against predetermined KPIs with
vesting occurring upon reaching those hurdles.
The number of performance rights that vest is linked primarily to Company performance.
CEO
Executive Directors
Other Executive KMP
2016: No changes
CEO
Executive Directors
Other Executive KMP
% of TFR applied in LTI
25%
25%
20%
% of TFR applied in LTI
25%
25%
20%
Performance conditions
2015: KPIs are set for the Group (where relevant).
Each KPI is weighted according to its importance in driving profitable performance and
returns to Shareholders.
KPIs for the CEO, Executive Directors and other Executive KMP comprise relative Total
Shareholder Return (TSR) (75%) and Earning per Share (EPS) (25%) measured over a 3 year
period.
2016: KPIs are set for the Group (where relevant).
Each KPI is weighted according to its importance in driving profitable performance and
returns to Shareholders.
KPIs for the CEO, Executive Directors and other Executive KMP comprise 100% against a Total
Shareholder Return (TSR) using a benchmark index namely the S&P/ASX Small Ordinaries
Accumulation Index (XSOAI) measured over a 3 year period.
2015: Comprises companies similar to MACA, being Ausenco (AAX), Ausdrill (ASL), Brierty
(BYL), Decmil (DCG), Downer (DOW), McMahon (MAH), NRW (NWH) and Sedgeman (SDM).
2016: Changed to be assessed 100% against TSR using a benchmark index namely the
S&P/ASX Small Ordinaries Accumulation Index (XSOAI).
2015: Performance is measured quantitatively and progress against key targets reported at
full year.
2016: No changes.
TSR Comparator Group
Assessment of KPIs
23
MACA LIMITED ANNUAL REPORT 2016
LTI Plan (cont)
Trigger for vesting
Cessation of employment
5.6 Unvested entitlements
2015: Any performance target met will trigger the calculation of total or part payment of the
LTI. The board may exercise in its discretion in introducing further LTI participants.
Specifically, if the Company’s TSR over the Performance Period is:
(i) below the 50th percentile of the TSR achieved by the Comparator Group of companies,
then nil Performance Rights will vest;
(ii) at the 50th percentile of the TSR achieved by the Comparator Group of companies, then
50% of the Performance Rights will vest;
(iii) between the 50th and 75th percentile of the TSR achieved by the Comparator Group of
companies then between 50% and 100% of the Performance Rights will vest pro-rata; and
(iv) at or above the 75th percentile of the TSR achieved by the Comparator Group of
companies, 100% of the Performance Rights will vest.
If the compound growth in the Company’s EPS over the Performance Period is:
(i) below 6% per annum - then nil Performance Rights will vest;
(ii) equal to 6% per annum - then 50% of Performance Rights will vest;
(iii) between 6% and 12.5% annum - then 50% - 100% of the Performance Rights will vest pro-
rata; and
(iv) equal to 12.5% or higher then 100% of Performance Rights will vest;
The board has discretion not to pay any LTI on the TSR component if the TSR is negative.
2016: Changed to be assessed 100% against TSR using a benchmark index namely the
S&P/ASX Small Ordinaries Accumulation Index (XSOAI).
2015: LTI forfeited if an Executive resigns or is terminated before the payment date. In
exceptional circumstances this may be reviewed by the Board.
2016: No changes.
It is the Company's policy to prohibit executives from entering into transactions or arrangements which limit the economic risk of
participating in unvested entitlements under any equity-based remuneration schemes.
5.7 KMP Options
No options were granted during the period and no options were vested or were exercised during the period. At 30 June 2016 no
options were held by KMP.
5.8 KMP performance rights
As at 30 June 2015, MACA had 261,830 performance rights outstanding which vested in June 2016. Having achieved the
designated performance hurdles 75% of these being 196,373 rights were excercisable and shares were issued in September 2016.
As at 30 June 2016, MACA had 663,501 performance rights issued and outstanding. These rights were granted during the 2015
financial year to KMP under the Group's Performance Rights Plan and, subject to the achievement of designated performance
hurdles, will vest in June 2017.
During the 2016 financial year 1,955,782 performance rights were granted under the Group’s Performance Rights Plan as set out
in the table below and are intended to be issued after the end of the financial year, and 311,146 performance rights were
forfeited. Subject to the achievement of designated performance hurdles, these performance rights will vest in June 2018
(2015:663,501). On 11 November 2015 shareholders approved the issue of 444,737 performance rights to the Managing Director
Mr Chris Tuckwell and 363,816 performance rights to the Operation Director Mr Geoff Baker. As at 30 June 2016 there were
2,308,136 performance rights outstanding of which 925,331 had been issued.
24
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016 2015: Any performance target met will trigger the calculation of total or part payment of the
LTI. The board may exercise in its discretion in introducing further LTI participants.
Specifically, if the Company’s TSR over the Performance Period is:
(i) below the 50th percentile of the TSR achieved by the Comparator Group of companies,
(ii) at the 50th percentile of the TSR achieved by the Comparator Group of companies, then
then nil Performance Rights will vest;
50% of the Performance Rights will vest;
(iii) between the 50th and 75th percentile of the TSR achieved by the Comparator Group of
companies then between 50% and 100% of the Performance Rights will vest pro-rata; and
(iv) at or above the 75th percentile of the TSR achieved by the Comparator Group of
companies, 100% of the Performance Rights will vest.
If the compound growth in the Company’s EPS over the Performance Period is:
(i) below 6% per annum - then nil Performance Rights will vest;
(ii) equal to 6% per annum - then 50% of Performance Rights will vest;
(iii) between 6% and 12.5% annum - then 50% - 100% of the Performance Rights will vest pro-
rata; and
(iv) equal to 12.5% or higher then 100% of Performance Rights will vest;
The board has discretion not to pay any LTI on the TSR component if the TSR is negative.
2016: Changed to be assessed 100% against TSR using a benchmark index namely the
S&P/ASX Small Ordinaries Accumulation Index (XSOAI).
Cessation of employment
2015: LTI forfeited if an Executive resigns or is terminated before the payment date. In
exceptional circumstances this may be reviewed by the Board.
2016: No changes.
It is the Company's policy to prohibit executives from entering into transactions or arrangements which limit the economic risk of
participating in unvested entitlements under any equity-based remuneration schemes.
No options were granted during the period and no options were vested or were exercised during the period. At 30 June 2016 no
5.6 Unvested entitlements
5.7 KMP Options
options were held by KMP.
5.8 KMP performance rights
As at 30 June 2015, MACA had 261,830 performance rights outstanding which vested in June 2016. Having achieved the
designated performance hurdles 75% of these being 196,373 rights were excercisable and shares were issued in September 2016.
As at 30 June 2016, MACA had 663,501 performance rights issued and outstanding. These rights were granted during the 2015
financial year to KMP under the Group's Performance Rights Plan and, subject to the achievement of designated performance
hurdles, will vest in June 2017.
During the 2016 financial year 1,955,782 performance rights were granted under the Group’s Performance Rights Plan as set out
in the table below and are intended to be issued after the end of the financial year, and 311,146 performance rights were
forfeited. Subject to the achievement of designated performance hurdles, these performance rights will vest in June 2018
(2015:663,501). On 11 November 2015 shareholders approved the issue of 444,737 performance rights to the Managing Director
Mr Chris Tuckwell and 363,816 performance rights to the Operation Director Mr Geoff Baker. As at 30 June 2016 there were
2,308,136 performance rights outstanding of which 925,331 had been issued.
LTI Plan (cont)
Trigger for vesting
5.8 KMP performance rights (cont)
The number of rights over ordinary shares held by each KMP of the Group during the financial year is as follows:
REMUNERATION REPORT - AUDITED
30 June 2016
Chris Tuckwell
Managing Director and Chief Executive Officer
Geoff Baker
Executive Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil Operations
Maurice Dessauvagie
General Manager - Civil
David Greig 1
General Manager - Business Development
Peter Gilford
Chief Financial Officer
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Non-executive Director
Robert Ryan
Non-executive Director
Jeremy Connor
Former KMP
Balance at beginning of
year
Granted as
remuneration during the
year
Exercised
during the
year
Other
changes
during the
year
Balance at
end of year
Vested and
exercisable
Vested and
un-
exercisable
Unvested at
end of year
183,280
444,737
-
363,816
195,764
241,450
169,802
249,932
204,228
253,940
-
-
76,900
186,118
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
628,017
-
363,816
-
-
-
628,017
-
363,816
-
437,214
(68,939)
(22,980)
345,295
-
419,734
(54,316)
(18,105)
347,313
-
458,168
(73,118)
(24,373)
360,677
-
-
-
263,018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
263,018
-
-
-
-
-
-
-
-
95,357
215,789
-
(311,146)
-
Total
1 David Greig appointed effective 18th July 2016
925,331
1,955,782
-
(311,146)
2,569,967
(196,373)
(65,458)
2,308,136
25
MACA LIMITED ANNUAL REPORT 2016 5.9 KMP shareholdings
The number of ordinary shares in MACA Limited held by each KMP of the Group during the financial year is as follows:
30 June 2016
Chris Tuckwell
Managing Director and Chief
Executive Officer
Geoff Baker
Executive Director
Tim Gooch
Balance at beginning of
year
Granted as
remuneration during
the year
Increase other
Issued on exercise of
options during the year
Other changes during the
year
Balance at end of year
612,500
-
`
- -
612,500
15,000,000
-
`
- -
15,000,000
General Manager - Mining
- -
`
- -
-
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie
General Manager - Civil
David Greig
General Manager - Business
Development
Peter Gilford
Chief Financial Officer
Hugh (Andrew) Edwards
Chairman
Linton Kirk
100,000
-
`
-
- 100,000
20,000
-
`
-
- 20,000
- -
`
-
-
-
27,500
-
`
- -
27,500
20,000
-
`
- - 20,000
Non-executive Director
50,000
-
`
- -
50,000
Robert Ryan
Non-executive Director
- - 18,604
- -
18,604
Jeremy Connor
Former KMP
Total
37,250
-
`
-
(37,250)
-
15,867,250
- 18,604
-
(37,250)
15,848,604
26
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016 5.9 KMP shareholdings
5.10 KMP remuneration
The number of ordinary shares in MACA Limited held by each KMP of the Group during the financial year is as follows:
5.10.1 Employment benefits and payments for the year ended 30 June 2016
Balance at beginning of
Granted as
Increase other
Issued on exercise of
Other changes during the
Balance at end of year
year
remuneration during
options during the year
year
the year
in respect to the financial year, and the components of
The following table sets out the benefits and payment details,
remuneration for members of key management personnel of the consolidated Group, and to the extent different, among the five
Group executives and five company executives receiving the highest remuneration.
REMUNERATION REPORT - AUDITED
612,500
-
`
- -
612,500
Short-term benefits
Post-employment
benefits
Long-term benefits
Salary, fees
and leave
Committee
fees
Cash
bonus/STI
Non-
monetary
Other
Superannua
tion
Other
Incentive
plans
Year
$
$
$
$
$
$
$
$
Executive Directors
Chris Tuckwell 1
Managing Director & Chief
Executive Officer
2016
621,939
-
-
-
29,671
30,192
2015
610,385
- 331,608
-
28,603
23,077
Geoff Baker
2016
543,000
-
-
Operations Director
2015
600,000
- 112,500
Ross Williams 4
2016
-
Finance Director
2015
40,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
LSL
$
-
-
-
-
-
-
-
-
-
-
-
-
Equity-settled share-
based payments
Share /
Units
Options /
Rights
$
$
Total
$
-
77,552
759,354
-
21,093 1,014,766
-
36,100
579,100
-
-
-
-
712,500
-
-
-
40,000
Total compensation for
Executive Directors
Non-executive Directors
2016
1,164,939
-
-
- 29,671
30,192
- -
-
- 113,652
1,338,454
2015
1,250,385
- 444,108
- 28,603
23,077
- -
-
- 21,093
1,767,266
Andrew Edwards
2016
144,139
Chairman
Linton Kirk 2
2015
140,275
2016
117,787
-
-
-
2015
201,429
8,325
Robert Ryan 3
2016
152,259
Ross Williams 4
2015
2016
-
-
2015
45,000
Joseph Sweet 5
2016
-
2015
5,255
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,693
-
14,725
-
7,951
-
8,550
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
157,832
-
155,000
-
125,738
-
218,304
-
152,259
-
-
-
-
-
45,000
-
-
- 5,255
Total compensation for Non-
executive Directors
2016
414,185
-
-
-
- 21,644
- -
-
-
- 435,829
2015
391,959
8,325
-
-
- 23,275
- -
-
-
- 423,559
Managing Director and Chief
30 June 2016
Chris Tuckwell
Executive Officer
Geoff Baker
Executive Director
Tim Gooch
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie
General Manager - Civil
General Manager - Business
David Greig
Development
Peter Gilford
Chief Financial Officer
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Robert Ryan
Jeremy Connor
Former KMP
Total
15,000,000
-
`
- -
15,000,000
General Manager - Mining
- -
`
- -
-
100,000
-
`
-
- 100,000
20,000
-
`
-
- 20,000
- -
`
-
-
-
27,500
-
`
- -
27,500
20,000
-
`
- - 20,000
Non-executive Director
50,000
-
`
- -
50,000
Non-executive Director
- - 18,604
- -
18,604
37,250
-
`
-
(37,250)
-
15,867,250
- 18,604
-
(37,250)
15,848,604
27
MACA LIMITED ANNUAL REPORT 2016 5.10 KMP remuneration (cont)
Short-term benefits
Post-employment
benefits
Long-term benefits
Salary, fees
and leave
Committee
fees
Cash
bonus/STI
Non-
monetary
Other
Superannua
tion
Other
Incentive
plans
Year
$
$
$
$
$
$
$
$
LSL
$
Equity-settled share-
based payments
Share /
Units
Options /
Rights
$
$
Total
$
Executives (KMP)
Tim Gooch
2016
393,362
-
-
-
12,955
39,621
General Manager - Mining
2015
433,698
- 52,191
-
12,174
43,420
Mitch Wallace
2016
454,821
-
-
-
6,370
33,928
General Manager - Brazil
Operations
2015
437,028
- 71,321
-
21,101
30,908
Maurice Dessauvagie
2016
440,125
General Manager - Civil
2015
474,719
David Greig 6
General Manager - Business
Development
2016
2015
-
-
Peter Gilford
2016
317,046
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
39,437
-
43,460
-
-
-
-
-
25,896
28,877
2015
317,040
- 42,187
-
12,590
31,611
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97,620
543,558
-
66,526
608,009
-
85,674
580,793
-
54,206
614,564
- 102,703
582,265
-
70,167
588,346
-
-
-
-
-
-
-
32,491
404,310
-
8,850
412,278
Chief Financial Officer /
Company Secretary
Total compensation for
Executives
Former KMP
Jeremy Connor 7
General Manager - Business
Development
Total compensation for former
KMP
Total compensation for KMP
2016
1,605,354
-
-
- 45,221 141,863
- -
-
- 318,488
2,110,926
2015
1,662,485
- 165,699
- 45,865 149,399
- -
-
- 199,749
2,223,197
2016
307,326
-
-
2015
452,393
- 52,312
-
-
-
21,512
-
46,029
-
-
-
-
-
-
-
38,834
367,672
-
10,995
561,729
2016
307,326
-
-
-
- 21,512
- -
-
- 38,834
367,672
2015
452,393
- 52,312
-
- 46,029
- -
-
- 10,995
561,729
2016
3,491,804
-
-
- 74,892 215,211
- -
-
- 470,974
4,252,881
2015
3,757,222
8,325
662,119
- 74,468 241,780
- -
-
- 231,837
4,975,751
1
2
3
4
5
6
7
Chris Tuckwell - commenced as Managing Director effective 4th August 2014.
Linton Kirk was engaged on a contract basis through his business Kirk Mining Consultants to perform consulting work on the Tucano project.
The engagement was charged at hourly rates and is included in the amount of salary and fees above.
Robert Ryan - commenced as a Non-executive Director effective 18th August 2015. Robert Ryan was engaged on a contract basis through his
business Hensman Properties to perform consulting work in business development. The engagement was charged at hourly rates and is
included in the amount of salary and fees above.
Ross Williams - resigned as Finance Director on 23rd July 2014, commenced as a Non-executive Director effective 23rd July 2014 and resigned
as a Non-executive Director effective 23rd February 2015.
Joe Sweet - resigned as a Non-executive Director effective 23rd July 2014.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
Jeremy Connor - resigned as General Manager - Business Development effective 1st April 2016.
28
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016 5.10 KMP remuneration (cont)
5.10.2 Employment details of members of key management personnel and other executives
Short-term benefits
benefits
Long-term benefits
Post-employment
Equity-settled share-
based payments
Salary, fees
Committee
Cash
Non-
Superannua
and leave
fees
bonus/STI
monetary
Other
tion
Other
Incentive
plans
Share /
Options /
Units
Rights
Total
Year
$
$
$
$
$
$
$
$
$
$
$
LSL
$
The following table provides details of persons who were, during the financial year, members of key management personnel of
the consolidated Group, and to the extent different, among the five Group executives and five company executives receiving the
highest remuneration. The table also sets out the proportion of remuneration that was performance and non-performance based
and the proportion of remuneration received in the form of options and performance rights.
REMUNERATION REPORT - AUDITED
General Manager - Business
David Greig 6
Development
Peter Gilford
Chief Financial Officer /
Company Secretary
Total compensation for
Executives
Former KMP
Jeremy Connor 7
General Manager - Business
Development
Total compensation for former
KMP
Total compensation for KMP
Executives (KMP)
Tim Gooch
2016
393,362
-
12,955
39,621
General Manager - Mining
2015
433,698
- 52,191
-
12,174
43,420
Mitch Wallace
2016
454,821
-
6,370
33,928
2015
437,028
- 71,321
-
21,101
30,908
General Manager - Brazil
Operations
Maurice Dessauvagie
2016
440,125
General Manager - Civil
2015
474,719
2016
2015
-
-
-
39,437
-
43,460
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2016
317,046
-
25,896
28,877
2015
317,040
- 42,187
-
12,590
31,611
-
97,620
543,558
-
66,526
608,009
-
85,674
580,793
-
54,206
614,564
- 102,703
582,265
-
70,167
588,346
-
-
-
-
-
-
-
32,491
404,310
-
8,850
412,278
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2016
1,605,354
-
-
- 45,221 141,863
- -
-
- 318,488
2,110,926
2015
1,662,485
- 165,699
- 45,865 149,399
- -
-
- 199,749
2,223,197
2016
307,326
-
-
2015
452,393
- 52,312
-
21,512
-
46,029
-
38,834
367,672
-
10,995
561,729
2016
307,326
-
-
-
- 21,512
- -
-
- 38,834
367,672
2015
452,393
- 52,312
-
- 46,029
- -
-
- 10,995
561,729
2016
3,491,804
-
-
- 74,892 215,211
- -
-
- 470,974
4,252,881
2015
3,757,222
8,325
662,119
- 74,468 241,780
- -
-
- 231,837
4,975,751
1
2
5
6
7
Chris Tuckwell - commenced as Managing Director effective 4th August 2014.
Linton Kirk was engaged on a contract basis through his business Kirk Mining Consultants to perform consulting work on the Tucano project.
The engagement was charged at hourly rates and is included in the amount of salary and fees above.
3
Robert Ryan - commenced as a Non-executive Director effective 18th August 2015. Robert Ryan was engaged on a contract basis through his
business Hensman Properties to perform consulting work in business development. The engagement was charged at hourly rates and is
included in the amount of salary and fees above.
4
Ross Williams - resigned as Finance Director on 23rd July 2014, commenced as a Non-executive Director effective 23rd July 2014 and resigned
as a Non-executive Director effective 23rd February 2015.
Joe Sweet - resigned as a Non-executive Director effective 23rd July 2014.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
Jeremy Connor - resigned as General Manager - Business Development effective 1st April 2016.
Executive Directors
Chris Tuckwell 1
Managing Director & Chief
Executive Officer
Geoff Baker
Operations Director
Ross Williams 2
Finance Director
Non-executive Directors
Andrew Edwards
Chairman
Linton Kirk
Robert Ryan 2
Ross Williams 3
Joseph Sweet 4
Executives (KMP)
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie
General Manager - Civil
David Greig 5
General Manager - Business
Development
Peter Gilford
Chief Financial Officer / Company
Secretary
Proportions of elements of remuneration related
to performance
Shares / Units
Options / Rights
Non-salary
cash-based
incentives
%
%
%
%
Proportions of
elements of
remuneration not
related to
performance
Fixed Salary /
Fees
Total
%
-
-
10.2
89.8
100.0
Year
2016
2015
12.0
-
2.1
85.9
100.0
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
-
15.8
-
-
-
-
-
-
-
-
-
-
-
8.6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6.2
93.8
100.0
-
84.2
100.0
-
-
-
- 100.0
100.0
- 100.0
100.0
- 100.0
100.0
100.0
100.0
- 100.0
100.0
- 100.0
100.0
-
-
-
-
-
- 100.0
100.0
-
-
-
- 100.0
100.0
18.0
82.0
100.0
10.9
80.5
100.0
14.8
85.2
100.0
2015
11.6
-
8.8
79.6
100.0
2016
2015
2016
2015
2016
-
-
-
-
-
-
-
-
-
17.6
82.4
100.0
11.9
88.1
100.0
-
-
-
-
-
-
-
8.0
92.0
100.0
2015
10.2
-
2.1
87.7
100.0
29
MACA LIMITED ANNUAL REPORT 2016 5.10.2 Employment details of members of key management personnel and other executives (cont)
Proportions of elements of remuneration related
to performance
Shares / Units Options / Rights
Non-salary
cash-based
incentives
%
%
%
%
Proportions of
elements of
remuneration not
related to
performance
Fixed Salary /
Fees
Total
%
-
-
10.6
89.4
100.0
Year
2016
2015
9.3
-
2.0
88.7
100.0
Former KMP
Jeremy Connor 6
General Manager - Business
Development
1
2
3
4
5
6
Chris Tuckwell - commenced as Managing Director effective 4th August 2014.
Robert Ryan - commenced as a Non-executive Director effective 18th August 2015.
Ross Williams - resigned as Finance Director on 23rd July 2014, commenced as a Non-executive Director effective 23rd July
2014 and resigned as a Non-executive Director effective 23rd February 2015.
Joseph Sweet - resigned as a Non-executive Director on 23rd July 2014.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
Jeremy Connor - resigned as General Manager - Business Development effective 1st April 2016.
6 Executive Contracts
Executive contracts of service between the Company or company within the Group and KMP are on a continuing basis, the terms
of which are not expected to change in the immediate future. The notice period for termination varies from one to three months.
Executive
Appointment to KMP
Notice period for contract cessation
Chris Tuckwell
Managing Director and Chief
Executive Officer
Geoff Baker
Operations Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie
General Manager - Civil
David Greig
General Manager - Business
Development
Peter Gilford
Chief Financial Officer and
Company Secretary
4th August 2014
The contract is ongoing and has no
fixed term
3rd November 2010
The contract is ongoing and has no
fixed term
20th June 2011
The contract is ongoing and has no
fixed term
3rd November 2010
The contract is ongoing and has no
fixed term
10th June 2013
The contract is ongoing and has no
fixed term
18th July 2016
The contract is ongoing and has no
fixed term
23rd July 2014
The contract is ongoing and has no
fixed term
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract can be terminated by either party with
1 months’ notice or payment in lieu
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract can be terminated by either party with
3 months’ notice or payment in lieu
30
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016 5.10.2 Employment details of members of key management personnel and other executives (cont)
Proportions of elements of remuneration related
to performance
cash-based
Shares / Units Options / Rights
Non-salary
incentives
%
%
%
Proportions of
elements of
remuneration not
related to
performance
Fixed Salary /
Fees
%
Total
%
Former KMP
Jeremy Connor 6
General Manager - Business
Development
Year
2016
-
-
10.6
89.4
100.0
2015
9.3
-
2.0
88.7
100.0
1
2
3
4
5
6
Chris Tuckwell - commenced as Managing Director effective 4th August 2014.
Robert Ryan - commenced as a Non-executive Director effective 18th August 2015.
Ross Williams - resigned as Finance Director on 23rd July 2014, commenced as a Non-executive Director effective 23rd July
2014 and resigned as a Non-executive Director effective 23rd February 2015.
Joseph Sweet - resigned as a Non-executive Director on 23rd July 2014.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
Jeremy Connor - resigned as General Manager - Business Development effective 1st April 2016.
6 Executive Contracts
Executive
Chris Tuckwell
Executive Officer
Geoff Baker
Operations Director
Tim Gooch
General Manager - Mining
Mitch Wallace
Operations
Maurice Dessauvagie
General Manager - Civil
David Greig
Development
Peter Gilford
Executive contracts of service between the Company or company within the Group and KMP are on a continuing basis, the terms
of which are not expected to change in the immediate future. The notice period for termination varies from one to three months.
Managing Director and Chief
The contract is ongoing and has no
The contract can be terminated by either party with
3 months’ notice or payment in lieu
Appointment to KMP
Notice period for contract cessation
4th August 2014
fixed term
3rd November 2010
fixed term
20th June 2011
fixed term
3rd November 2010
fixed term
10th June 2013
fixed term
18th July 2016
fixed term
23rd July 2014
The contract is ongoing and has no
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract is ongoing and has no
The contract can be terminated by either party with
3 months’ notice or payment in lieu
General Manager - Brazil
The contract is ongoing and has no
The contract can be terminated by either party with
1 months’ notice or payment in lieu
The contract is ongoing and has no
The contract can be terminated by either party with
3 months’ notice or payment in lieu
General Manager - Business
The contract is ongoing and has no
Chief Financial Officer and
The contract is ongoing and has no
Company Secretary
fixed term
The contract can be terminated by either party with
3 months’ notice or payment in lieu
The contract can be terminated by either party with
3 months’ notice or payment in lieu
REMUNERATION REPORT - AUDITED
6 Executive Contracts (cont)
Executive
Former KMP
Jeremy Connor
General Manager - Business
Development
Appointment to KMP
Notice period for contract cessation
Resigned effective 1st April 2016
The contract has been terminated
The contract can be terminated by either party with
1 months’ notice or payment in lieu
7 Non-executive Directors fees
Non-executive Directors fees are determined within an aggregate directors fee pool which is periodically recommended for
approval to shareholders. The current aggregate directors’ fee pool is $600,000. This provides for any future increases to Non-
executive Directors fees and to allow for any changes to the Board make up and potential increases in the number of Non-
executive Directors.
Fees paid to Non-executive Directors are set at levels which reflect both the responsibilities of, and time commitments required
from, each Non-executive Director to discharge their duties and are not linked to the financial performance of the Company. Non-
executive Directors fees are reviewed annually by the Board to ensure they are appropriate for the duties performed, including
Board committee duties, and are in line with the market. Other than statutory superannuation, Non-executive Directors are not
entitled to retirement benefits.
Non-executive Directors fees increased to their current levels with effect from 1 July 2014 following a market based review of
these fees at that time. There were no fee increases during the financial year.
Non-executive Directors
$ / Chairman
Andrew Edwards
Linton Kirk
Robert Ryan 1
$155,000
Board
$90,000
Audit Committee
Risk Committee
$90,000
Remuneration Committee
Member
Audit Committee
Risk Committee
Remuneration Committee
Remuneration Committee
Audit Committee
Risk committee
1 Robert Ryan, Non-executive Director was appointed to his Board position with MACA Limited effective 18th August 2015.
31
MACA LIMITED ANNUAL REPORT 2016 8 Other transactions with key management persons and / or related parties
Key management person and/or related party
Partnership comprising entities controlled by
current director Mr G Baker and former directors
Mr R Williams, Mr J Moore, Mr D Edwards and Mr F
Maher.
Kirk Mining Consultants - a company controlled by
current director Mr L Kirk.
Hensman Properties Pty Ltd - a company controlled
by current director Mr R. Ryan.
Gateway Equipment Parts & Services Pty Ltd - a
company controlled by current director Mr G Baker
and former directors Mr D Edwards, Mr F Maher
and Mr J Moore.
Gateway Equipment Parts & Services Pty Ltd - a
company controlled by current director Mr G Baker
and former directors Mr D Edwards, Mr F Maher
and Mr J Moore.
Alliance Contracting Pty Ltd: Mr G Baker was a 15%
shareholder in Alliance Contracting Pty Ltd
Transaction
Expense - Rent on Division St Business
premises.
Expense - Mining consulting fees
Expense - Consulting fees
Expense - hire of equipment and
purchase of equipment, parts and
services.
Revenue - sale of equipment
2016
$
2015
$
1,530,560 1,119,000
37,070
119,754
74,498
-
894,052 1,641,792
Acquisition of 100% of equity on 31
January 2016
320,320 205,130
4,703,253
-
Key management person and/or related party
Transaction
2016
$
2015
$
Amounts payable at year end arising from the
above transactions (Receivables Nil)
Gateway Equipment Parts & Services Pty Ltd - a
company controlled by current director Mr G Baker
and former directors Mr D Edwards, Mr F Maher
and Mr J Moore.
Partnership comprising entities controlled by
current director Mr G Baker and former directors
Mr R Williams, Mr J Moore, Mr D Edwards & Mr F
Maher.
21,330 200,737
- 138,967
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Directors.
On behalf of the Directors
Chris Tuckwell
Managing Director
30th day of September 2016
Perth
32
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2016 and Mr J Moore.
894,052 1,641,792
Gateway Equipment Parts & Services Pty Ltd - a
Revenue - sale of equipment
8 Other transactions with key management persons and / or related parties
Key management person and/or related party
Transaction
Partnership comprising entities controlled by
Expense - Rent on Division St Business
current director Mr G Baker and former directors
premises.
Mr R Williams, Mr J Moore, Mr D Edwards and Mr F
Maher.
Kirk Mining Consultants - a company controlled by
Expense - Mining consulting fees
current director Mr L Kirk.
by current director Mr R. Ryan.
Hensman Properties Pty Ltd - a company controlled
Expense - Consulting fees
Gateway Equipment Parts & Services Pty Ltd - a
Expense - hire of equipment and
company controlled by current director Mr G Baker
purchase of equipment, parts and
and former directors Mr D Edwards, Mr F Maher
services.
company controlled by current director Mr G Baker
and former directors Mr D Edwards, Mr F Maher
and Mr J Moore.
Alliance Contracting Pty Ltd: Mr G Baker was a 15%
Acquisition of 100% of equity on 31
shareholder in Alliance Contracting Pty Ltd
January 2016
Key management person and/or related party
Transaction
Amounts payable at year end arising from the
above transactions (Receivables Nil)
Gateway Equipment Parts & Services Pty Ltd - a
company controlled by current director Mr G Baker
and former directors Mr D Edwards, Mr F Maher
and Mr J Moore.
Partnership comprising entities controlled by
current director Mr G Baker and former directors
Mr R Williams, Mr J Moore, Mr D Edwards & Mr F
Maher.
2016
$
2015
$
1,530,560 1,119,000
37,070
119,754
74,498
-
320,320 205,130
4,703,253
-
2016
$
2015
$
21,330 200,737
- 138,967
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Directors.
On behalf of the Directors
Chris Tuckwell
Managing Director
30th day of September 2016
Perth
Corporate Governance Statement – Checklist
The board of MACA Limited is committed to ensuring that the Company’s obligations and responsibilities to its various
stakeholders are fulfilled through its corporate governance practices. MACA is committed to the development of a culture that
delivers our Promise – we care, we are flexible and we deliver, and the Core Values of the company – people first, exceed
expectations, community leadership and innovation and continuous improvement. We believe that adopting and operating in
accordance with the corporate governance guidelines enhances the delivery of the above expectations.
This checklist reports on MACA’s key governance principles and practices which are reviewed and revised as appropriate to
reflect changes in law and developments in corporate governance. A complete Corporate Governance Statement and all
Charters, Policies, Procedures, Disclosures, Definitions, Codes and Strategies are available for viewing on the Company’s website
under the Corporate Governance tab.
As required by the Australian Securities Exchange Limited (“ASX”) Listing Rules, the Corporate Governance Statement contained
on the Company website and in reference to this checklist reports on:
- The extent to which he Company has followed the Corporate Governance recommendations contained in the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations (3rd Edition); and
- The reasons for any departures from the Corporate Governance Council’s Corporate Governance Principles and
Recommendations (3rd Edition), in compliance with the “if not, why not” regime.
Overall approach to corporate governance
The Board as a whole reviews and makes changes in line with recommendations made by individual board members and as a
result of this focus, the Board is satisfied that the Company meets the Corporate Governance Council’s Corporate Governance
Principles and Recommendations with departures as disclosed below. These departures during the year were a consequence of
the resignation of an independent non executive director in the previous year resulting in the board and committee members
not being a majority independent. This has now been rectified with the appointment of a new independent non-executive
director as at the 18th August 2015. A checklist cross-referencing the Corporate Governance Council’s Corporate Governance
Principles and Recommendations to the relevant sections of this Statement is shown below.
ASX Corporate Governance Council’s Principles and Recommendations
Under ‘Compliance’ where an ‘x’ appears refer to the Corporate Governance
statement (available on the Company website) for the appropriate reasoning for the
departure from the Corporate governance Council’s Corporate Governance Principles
and Recommendations.
Principle 1 – Lay solid foundations for management and oversight
A listed entity should establish and disclose the respective roles and responsibilities of
board and management and how their performance is monitored and evaluated.
1.1
A listed entity should disclose:
(a) the respective roles and responsibilities of its board and
management; and
(b) those matters expressly reserved to the board and those
delegated to management.
A listed entity should:
(a) undertake appropriate checks before appointing a person, or
putting forward to security holders a candidate for election, as a
director; and
(b) provide security holders with all material information in its
possession relevant to a decision on whether or not to elect or re-
elect a director.
A listed entity should have a written agreement with each director
and senior executive setting out the terms of their appointment.
The company secretary of a listed entity should be accountable
directly to the board, through the chair, on all matters to do with
the proper functioning of the board.
1.2
1.3
1.4
CG statement
reference
Compliance
1.1
Board Charter (website)
1.2
Board Charter (website)
1.3
1.4
Board Charter (website)
33
CORPORATE GOVERNANCE STATEMENT - CHECKLIST MACA LIMITED ANNUAL REPORT 2016 ASX Corporate Governance Council’s Principles and Recommendations
1.5
A listed entity should:
CG statement
reference
1.5
Compliance
(a) have a diversity policy which includes requirements for the
board or a relevant committee of the board to set measurable
objectives for achieving gender diversity and to assess annually
both the objectives and the entity’s progress in achieving them;
Disclosure - Diversity
Procedure (website)
Human Resources and
Cultural Diversity Policy
(website)
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the
measureable objectives for achieving gender diversity set by the
board or a relevant committee of the board in accordance with
the entity’s diversity policy and its progress towards achieving
them, and either;
(1) the respective proportions of men and women on the board,
in senior executive positions and across the whole organization
(including how the entity has defined “senior executive” for these
purposes); or
(2) if the entity is a “relevant employer” under the Workplace
Gender Equality Act, the entity’s most recent “Gender Equality
Indicators”, as defined in and published under the Act
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual
directors; and
(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
accordance with that process.
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
accordance with that process.
1.6
1.7
Principle 2 – Lay solid foundations for management and oversight
A listed entity should have a board of an appropriate size, composition, skills and
commitment to enable it to discharge its duties effectively.
2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are
independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose the fact
and the processes it employs to address board succession issues
and to ensure that the board has the appropriate balance of skills,
knowledge, experience, independence and diversity to enable it to
discharge its duties and responsibilities effectively.
1.6
Disclosure -
Performance Evaluation
(website)
1.7
Disclosure -
Performance Evaluation
(website)
2.1
Board Charter (website)
Nomination Committee
Charter (website)
34
CORPORATE GOVERNANCE STATEMENTMACA LIMITED ANNUAL REPORT 2016 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for the
Disclosure - Diversity
board or a relevant committee of the board to set measurable
Procedure (website)
objectives for achieving gender diversity and to assess annually
Human Resources and
both the objectives and the entity’s progress in achieving them;
Cultural Diversity Policy
CG statement
reference
1.5
(website)
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the
measureable objectives for achieving gender diversity set by the
board or a relevant committee of the board in accordance with
the entity’s diversity policy and its progress towards achieving
them, and either;
(1) the respective proportions of men and women on the board,
in senior executive positions and across the whole organization
(including how the entity has defined “senior executive” for these
purposes); or
(2) if the entity is a “relevant employer” under the Workplace
Gender Equality Act, the entity’s most recent “Gender Equality
Indicators”, as defined in and published under the Act
1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
Disclosure -
performance of the board, its committees and individual
Performance Evaluation
directors; and
(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
(website)
1.6
1.7
accordance with that process.
1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the
Disclosure -
performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting period in
Performance Evaluation
(website)
accordance with that process.
Principle 2 – Lay solid foundations for management and oversight
A listed entity should have a board of an appropriate size, composition, skills and
commitment to enable it to discharge its duties effectively.
2.1
The board of a listed entity should:
2.1
Board Charter (website)
Nomination Committee
Charter (website)
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are
independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose the fact
and the processes it employs to address board succession issues
and to ensure that the board has the appropriate balance of skills,
knowledge, experience, independence and diversity to enable it to
discharge its duties and responsibilities effectively.
CORPORATE GOVERNANCE STATEMENT
ASX Corporate Governance Council’s Principles and Recommendations
Compliance
ASX Corporate Governance Council’s Principles and Recommendations
2.2
2.3
2.4
2.5
2.6
A listed entity should have and disclose a board skills matrix
setting out the mix of skills and diversity that the board currently
has or is looking to achieve in its membership.
A listed entity should disclose:
(a) the names of the directors considered by the board to be
independent directors; and
(b) if a director has an interest, position, association or
relationship of the type described in the recommendations but
the board is of the opinion that it does not compromise the
independence of the director, the nature of the interest, position
association or relationship in question and an explanation of why
the board is of that opinion; and
(c) the length of service of each director.
A majority of the board of a listed entity should be independent
directors.
The chair of the board of a listed entity should be an independent
director and, in particular, should not be the same person as the
CEO of the entity.
A listed entity should have a program for inducting new directors
and provide appropriate professional development opportunities
for directors to develop and maintain the skills and knowledge
needed to perform their role as directors effectively.
Principle 3 – Act ethically and responsibly
A listed entity should act ethically and responsibly.
3.1
A listed entity should:
CG statement
reference
2.2
Compliance
2.3
Definition of
Independence (website)
2.4
2.5
2.6
Board Charter (website)
Nomination Committee
Charter (website)
3.1
(a) have a code of conduct for its directors, senior executives and
employees; and
(b) disclose that code or a summary of it.
Corporate Code of
Conduct (website)
Principle 4 – Safe guard integrity in corporate reporting
A listed entity should have a formal and rigorous processes that independently verify
and safeguard the integrity of its corporate reporting.
The board of a listed entity should:
4.1
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive
directors and a majority of whom are independent directors; and
(2) is chaired by an independent director, who is not chair of the
board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of
the committee; and
(5) in relation to each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have an audit committee, disclose that fact and
the processes it employs to independently verify and safeguard
the integrity of its corporate reporting, including the processes for
the appointment and removal of the external auditor and the
rotation of the audit engagement partner.
4.1
Audit Committee
Charter (website)
35
MACA LIMITED ANNUAL REPORT 2016 ASX Corporate Governance Council’s Principles and Recommendations
4.2
4.3
The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO
and CFO a declaration that, in their opinion, the financial records
of the entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed
on the basis of a sound system of risk management and internal
control which is operating effectively.
A listed entity that has an AGM should ensure that its external
auditor attends its AGM and is available to answer any questions
from security holders relevant to the audit.
CG statement
reference
4.2
Compliance
4.3
Principle 5 – Make timely and balanced disclosure
A listed entity should make timely and balanced disclosure of all matters concerning it
that a reasonable person would expect to have a material effect on the price or value
of its securities.
5.1
A listed entity should :
(a) have a written policy for complying with its continuous
disclosure obligations under the Listing Rules; and
(b) disclose that policy or a summary of it.
5.1
Disclosure - Continuous
Disclosure (website)
Principle 6 – Respect the rights of security holders
A listed entity should respect the rights of its security holders by providing them with
appropriate information and facilities to allow them to exercise those rights
effectively.
6.1
A listed entity should provide information about itself and its
governance to investors via its website.
6.2
6.3
6.4
A listed entity should design and implement an investor relations
program to facilitate effective two-way communication with
investors.
A listed entity should disclose the policies and processes it has in
place to facilitate and encourage participation at meetings of
security holders.
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity
and its security registry electronically.
6.1
Shareholder
Communication
Strategy (website)
6.2
Investor Centre
(website)
6.3
Shareholder
Communication
Strategy (website)
6.4
Shareholder
Communication
Strategy (website)
36
CORPORATE GOVERNANCE STATEMENTMACA LIMITED ANNUAL REPORT 2016 ASX Corporate Governance Council’s Principles and Recommendations
4.2
4.3
The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO
and CFO a declaration that, in their opinion, the financial records
of the entity have been properly maintained and that the financial
statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed
on the basis of a sound system of risk management and internal
control which is operating effectively.
A listed entity that has an AGM should ensure that its external
auditor attends its AGM and is available to answer any questions
from security holders relevant to the audit.
Principle 5 – Make timely and balanced disclosure
A listed entity should make timely and balanced disclosure of all matters concerning it
that a reasonable person would expect to have a material effect on the price or value
of its securities.
5.1
A listed entity should :
(a) have a written policy for complying with its continuous
disclosure obligations under the Listing Rules; and
Disclosure - Continuous
Disclosure (website)
(b) disclose that policy or a summary of it.
Principle 6 – Respect the rights of security holders
A listed entity should respect the rights of its security holders by providing them with
appropriate information and facilities to allow them to exercise those rights
effectively.
6.1
A listed entity should provide information about itself and its
governance to investors via its website.
6.2
A listed entity should design and implement an investor relations
program to facilitate effective two-way communication with
6.3
A listed entity should disclose the policies and processes it has in
place to facilitate and encourage participation at meetings of
investors.
security holders.
6.4
A listed entity should give security holders the option to receive
6.4
communications from, and send communications to, the entity
and its security registry electronically.
CG statement
reference
4.2
Compliance
4.3
5.1
6.1
6.2
6.3
Shareholder
Communication
Strategy (website)
Investor Centre
(website)
Shareholder
Communication
Strategy (website)
Shareholder
Communication
Strategy (website)
CORPORATE GOVERNANCE STATEMENT
ASX Corporate Governance Council’s Principles and Recommendations
Principle 7 – Recognise and manage risk
A listed entity should establish a sound risk management framework and periodically
review the effectiveness of that framework.
7.1
7.2
7.3
7.4
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of
which:
(1) has at least three members, a majority of whom are
independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a risk committee or committees that satisfy
(a) above, disclose that fact and the processes it for overseeing
the entity’s risk management framework.
The board or a committee of the board should:
(a) review the entity’s risk management framework at least
annually to satisfy itself that it continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a
review has taken place.
A listed entity should disclose:
(a) if it has an internal audit function, how the function is
structured and what role it performs; or
(b) if it does not have an internal audit function, that fact and the
processes it employs for evaluating and continually improving the
effectiveness of its risk management and internal control
processes.
A listed entity should disclose whether it has any material
exposure to economic, environmental and social sustainability
risks and, if it does, how it manages or intends to manage those
risks.
Principle 8 – Remunerate fairly and responsibly
A listed entity should pay director remuneration sufficient to attract and retain high
quality directors and design its executive remuneration to attract, retain and motivate
high quality senior executives and to align their interests with the creation of value for
security holders.
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are
independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
CG statement
reference
Compliance
7.1
Risk Committee Charter
(website)
7.2
Disclosure - Risk
Management (website)
7.3
7.4
8.1
Remuneration
Committee Charter
(website)
Remuneration Report
37
MACA LIMITED ANNUAL REPORT 2016 ASX Corporate Governance Council’s Principles and Recommendations
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that
fact and the processes it employs for setting the level of
remuneration for directors and senior executives and ensuring
that such remuneration is appropriate and not excessive.
A listed entity should separately disclose its policies and practices
regarding the remuneration of non-executive directors and the
remuneration of executive directors and other senior executives.
A listed entity which has an equity-based remuneration scheme
should:
(a) have a policy on whether participants are permitted to enter
into transactions (whether through the use of derivatives or
otherwise) which limit the economic risk of participating in the
scheme; and
(b) disclose that policy or a summary of it.
8.2
8.3
CG statement
reference
Compliance
8.2
Remuneration Report
8.3
38
CORPORATE GOVERNANCE STATEMENTMACA LIMITED ANNUAL REPORT 2016 ASX Corporate Governance Council’s Principles and Recommendations
CG statement
reference
Compliance
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times
the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that
fact and the processes it employs for setting the level of
remuneration for directors and senior executives and ensuring
that such remuneration is appropriate and not excessive.
8.2
A listed entity should separately disclose its policies and practices
8.2
regarding the remuneration of non-executive directors and the
remuneration of executive directors and other senior executives.
Remuneration Report
8.3
A listed entity which has an equity-based remuneration scheme
8.3
should:
(a) have a policy on whether participants are permitted to enter
into transactions (whether through the use of derivatives or
otherwise) which limit the economic risk of participating in the
scheme; and
(b) disclose that policy or a summary of it.
Auditors Independence Declaration
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace,
WA 6831
T +61 (0)8 9225 5355
F +61 (0)8 9225 6181
www.moorestephenswa.com.au
AUDITOR’S INDEPENDENCE DECLARATION
UNDER S307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF MACA LIMITED & CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016 there have been no
contraventions of:
i.
the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii.
any applicable code of professional conduct in relation to the audit.
Neil Pace
Partner
Moore Stephens
Chartered Accountants
Signed at Perth this 30th day of September 2016
Liability limited by a scheme approved under Professional Standards Legislation. Moore Stephens ABN 16 874 357 907. An independent member of Moore Stephens International
Limited - members in principal cities throughout the world. The Perth Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.
/Volumes/BrandShare/+ WIP/MACA/+ BRAND/J16-319 MACA ANNUAL REPORT 2016/SUPPLIED/REV-4/2016 Audit Report &
Auditors Independence Declaration.docx
39
AUDITOR’S INDEPENDENCE DECLARATION MACA LIMITED ANNUAL REPORT 2016
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2016
Revenue
Other income
Direct costs
Finance costs
Share based payment expense
Impairment of plant and equipment
Impairment of Debtors
Foreign exchange losses
Other expenses from ordinary activities
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income:
Exchange differences on translating foreign operations
Fair value gains/(loss) on available-for-sale financial assets, net
of tax
Total comprehensive income for the year
Profit / (loss) attributable to:
- Non-controlling interest
- Members of the parent entity
Total comprehensive income attributable to:
- Non-controlling interest
- Members of the parent entity
Earnings per share:
- Basic earnings per share (cents)
- Diluted earnings per share (cents)
The accompanying notes form part of these financial accounts
Note
2
2
3
4
9
9
2016
$’000
431,424
17,837
(394,978)
(2,558)
(277)
-
-
(85)
(17,721)
33,641
(9,411)
24,230
2,428
203
26,861
67
24,163
24,230
67
26,794
26,861
10.4
10.4
2015
$’000
601,400
27,614
(523,516)
(4,427)
(232)
(5,772)
(1,821)
(753)
(14,844)
77,649
(23,236)
54,413
(2,804)
(1,663)
49,946
-
54,413
54,413
-
49,946
49,946
24.0
24.0
40
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 30 June 2016MACA LIMITED ANNUAL REPORT 2016 Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2016
Consolidated Statement of Financial Position
as at 30 June 2016
Revenue
Other income
Direct costs
Finance costs
Share based payment expense
Impairment of plant and equipment
Impairment of Debtors
Foreign exchange losses
Other expenses from ordinary activities
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income:
Exchange differences on translating foreign operations
Fair value gains/(loss) on available-for-sale financial assets, net
of tax
Total comprehensive income for the year
Profit / (loss) attributable to:
- Non-controlling interest
- Members of the parent entity
Total comprehensive income attributable to:
- Non-controlling interest
- Members of the parent entity
Earnings per share:
- Basic earnings per share (cents)
- Diluted earnings per share (cents)
The accompanying notes form part of these financial accounts
Note
2
2
3
4
9
9
2016
$’000
431,424
17,837
(394,978)
(2,558)
(277)
-
-
(85)
(17,721)
33,641
(9,411)
24,230
2,428
203
26,861
67
24,163
24,230
67
26,794
26,861
10.4
10.4
2015
$’000
601,400
27,614
(523,516)
(4,427)
(232)
(5,772)
(1,821)
(753)
(14,844)
77,649
(23,236)
54,413
(2,804)
(1,663)
49,946
-
-
54,413
54,413
49,946
49,946
24.0
24.0
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Loans to other companies
Inventory
Work in progress
Financial Assets
Other assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Property, plant and equipment
Loan to other companies
Financial Assets
Goodwill
Deferred tax assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Current tax liabilities
Short-term provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
Financial liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained profits
Parent Interest
Non-controlling Interest
TOTAL EQUITY
The accompanying notes form part of these financial accounts
Note
10
11
14
15
12
13
14
15
5
16
17
18
16
19
16
18
20
2016
$’000
115,602
73,461
7,114
10,068
89
-
2,144
208,479
154,167
883
851
3,187
5,733
164,821
373,300
32,863
39,210
1,028
9,954
83,055
113
34,499
34,612
117,667
255,633
208,816
(3,549)
50,814
256,081
(448)
255,633
2015
$’000
118,533
80,242
6,256
7,789
4,818
-
5,129
222,767
158,564
9,878
1,898
-
6,088
176,428
399,195
54,736
41,032
2,885
9,282
107,935
94
35,198
35,292
143,227
255,968
209,016
(6,457)
53,409
255,968
-
255,968
41
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2016 MACA LIMITED ANNUAL REPORT 2016 Consolidated Statement of Changes in Equity
for the year ended 30 June 2016
Issued
Capital
Retained
Profits
Outside
Equity
Interest
General
Reserves
Option
Reserve
FX
Reserve
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
-
-
-
-
-
-
-
152,290
88,652
54,413
143,066
152,290
-
-
-
152,290
143,066
58,500
(1,774)
-
-
-
-
(89,657)
209,016
53,409
209,016
53,409
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,317)
95
-
(2,317)
95
-
(1,663)
(3,980)
95
-
-
-
238,720
54,413
293,133
(2,804)
(2,804)
-
(1,663)
(2,804)
288,666
-
-
-
-
-
-
58,500
(1,774)
232
-
-
(89,657)
-
-
-
-
-
232
-
-
-
-
-
-
-
-
-
(3,980)
327
(2,804)
255,967
(3,980)
327
(2,804)
255,967
209,016
209,016
-
-
-
-
(200)
-
-
-
-
24,163
77,572
77,572
-
-
-
-
-
-
-
67
67
67
-
-
-
-
-
-
(515)
(26,758)
-
-
(3,980)
327
-
203
(3,777)
327
277
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,230
(2,804)
280,198
-
2,428
2,631
(376)
282,829
-
-
-
-
-
-
-
-
(200)
277
-
(515)
(26,758)
208,816
50,814
(448)
(3,777)
604
(376)
255,633
BALANCE AT 1 JULY 2014
Profit for the period
SUB-TOTAL
Other comprehensive income:
Revaluation of Investment
SUB-TOTAL
Shares issued
Capital raising costs
Options issued net of options exercised
Transactions with non-controlling interests
Acquisition of non-controlling interest
Dividends paid
BALANCE AT 30 JUNE 2015
BALANCE AT 1 JULY 2015
Profit for the period
SUB-TOTAL
Other comprehensive income:
Revaluation of Investment
SUB-TOTAL
Shares issued
Capital raising costs
Options issued net of options exercised
Transactions with non-controlling interests
Acquisition of non-controlling interest
Dividends paid
BALANCE AT 30 JUNE 2016
The accompanying notes form part of these financial accounts
42
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 30 June 2016MACA LIMITED ANNUAL REPORT 2016 BALANCE AT 1 JULY 2014
Profit for the period
SUB-TOTAL
Other comprehensive income:
Revaluation of Investment
SUB-TOTAL
Shares issued
Capital raising costs
Options issued net of options exercised
Transactions with non-controlling interests
Acquisition of non-controlling interest
Dividends paid
BALANCE AT 30 JUNE 2015
BALANCE AT 1 JULY 2015
Profit for the period
SUB-TOTAL
Other comprehensive income:
Revaluation of Investment
SUB-TOTAL
Shares issued
Capital raising costs
Options issued net of options exercised
Transactions with non-controlling interests
Acquisition of non-controlling interest
Dividends paid
BALANCE AT 30 JUNE 2016
Issued
Capital
Retained
Profits
General
Reserves
Option
Reserve
FX
Reserve
Total
Outside
Equity
Interest
$’000
$’000
$’000
$’000
$’000
$’000
$’000
152,290
88,652
(2,317)
95
54,413
152,290
143,066
(2,317)
95
(2,804)
(2,804)
(1,663)
58,500
(1,774)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(200)
(515)
(26,758)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
232
277
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
238,720
54,413
293,133
(1,663)
58,500
(1,774)
232
-
-
-
-
-
24,230
(200)
277
(515)
(26,758)
(89,657)
(89,657)
209,016
53,409
(3,980)
327
(2,804)
255,967
209,016
53,409
(3,980)
327
(2,804)
255,967
24,163
67
67
209,016
77,572
(3,980)
327
(2,804)
280,198
209,016
77,572
67
(3,777)
327
(376)
282,829
203
2,428
2,631
The accompanying notes form part of these financial accounts
208,816
50,814
(448)
(3,777)
604
(376)
255,633
Consolidated Statement of Changes in Equity
for the year ended 30 June 2016
Consolidated Statement of Cash Flows
for the year ended 30 June 2016
Note
2016
$’000
2015
$’000
152,290
143,066
(3,980)
95
(2,804)
288,666
Net Cash Provided By Operating Activities
24(b)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest received
Interest paid
Income tax paid
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of investments
Proceeds from sale of property, plant and equipment
Net Loans to other companies
Purchase of property, plant and equipment
Net cash consideration for acquisition of subsidiaries
Payment for investments
Net Cash Used In Investing Activities
CASH FLOW FROM FINANCING ACTIVITIES
Net Proceeds from Share Issue
Net movement in borrowings
Dividends paid by the parent
Net Cash provided by / (used in) Financing Activities
Net increase/(decrease) in cash held
Effect of exchange rate changes on the balance of cash held in
foreign currencies
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of financial year
24(a)
The accompanying notes form part of these financial accounts
471,512
(395,172)
-
1,929
(2,558)
(11,578)
64,133
1,303
3,336
9,019
(34,995)
(2,274)
-
(23,611)
-
(17,768)
(26,758)
(44,526)
(4,004)
1,073
118,533
115,602
674,424
(508,386)
-
2,956
(4,428)
(28,105)
136,461
4,438
289
(16,134)
(29,707)
-
(2,000)
(43,114)
56,667
(46,364)
(89,657)
(79,354)
13,993
-
104,540
118,533
43
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2016 MACA LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements
for the year ended 30 June 2016
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001. The Group is a for profit entity for financial reporting purposes under Australian
Accounting Standards. These financial statements also comply with International Financial Reporting standards as issued by the
International Accounting Standards Board (IASB).
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements
containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting
Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued
by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have
been consistently applied unless otherwise stated.
These financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable,
by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities. These financial
statements are presented in Australian dollars.
b. Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MACA Limited as at 30 June 2016
and the results of all subsidiaries for the year then ended. MACA Limited and its subsidiaries together are referred to in these
financial statements as the ‘consolidated entity’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when
the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control,
is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to
the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses
incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
c. Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or
businesses under common control. The business combination will be accounted for from the date that control is obtained,
whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised
(subject to certain limited exemptions).
44
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2016MACA LIMITED ANNUAL REPORT 2016 Notes to the Financial Statements
for the year ended 30 June 2016
NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001. The Group is a for profit entity for financial reporting purposes under Australian
Accounting Standards. These financial statements also comply with International Financial Reporting standards as issued by the
International Accounting Standards Board (IASB).
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements
containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting
Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued
by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have
been consistently applied unless otherwise stated.
These financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable,
by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities. These financial
statements are presented in Australian dollars.
b. Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MACA Limited as at 30 June 2016
and the results of all subsidiaries for the year then ended. MACA Limited and its subsidiaries together are referred to in these
financial statements as the ‘consolidated entity’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when
the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control,
is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to
the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses
incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
c. Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or
businesses under common control. The business combination will be accounted for from the date that control is obtained,
whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised
(subject to certain limited exemptions).
NOTES TO THE FINANCIAL STATEMENTS
c. Business Combinations (cont)
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or
liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial
instrument, are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i)
(ii)
(iii)
the consideration transferred;
any non-controlling interest (determined under either the full goodwill or proportionate interest method); and
the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of
any previously held equity interest shall form the cost of the investment in the separate financial statements.
Fair value remeasurements in any pre-existing equity holdings are recognised in profit or loss in the period in which they arise.
Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such
amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than 100% interest will depend
on the method adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-
controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest's proportionate
Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make
the maximum use of market information where available. Under this method, goodwill attributable to the non-controlling interest
is recognised in the consolidated financial statements.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in
investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating
units, representing the lowest level at which goodwill is monitored and not larger than an operating segment. Gains and losses on
the disposal of an entity include the carrying amount of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions
and do not affect the carrying amounts of goodwill.
d. Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense
(income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income
tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well
as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
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MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
d. Income Tax (cont)
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully
expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised
or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset
or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable
that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax
assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement
or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are
offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
e. Inventories
Inventories and work in progress are measured at the lower of cost or net realisable value. The cost of manufactured products
includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the
basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.
f. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Property
Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between
knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external
independent valuers, less subsequent depreciation for buildings.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity.
Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity, all other
decreases are charged to the statement of comprehensive income. Each year the difference between depreciation based on the
revalued carrying amount of the asset charged to the statement of profit or loss and other comprehensive income and
depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net
amount is restated to the revalued amount of the asset.
Plant and equipment
Plant and equipment are measured on the cost basis.
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MACA LIMITED ANNUAL REPORT 2016 d. Income Tax (cont)
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully
expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised
or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset
or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable
that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax
assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement
or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are
offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Inventories and work in progress are measured at the lower of cost or net realisable value. The cost of manufactured products
includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the
basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated
e. Inventories
f. Property, Plant and Equipment
depreciation and impairment losses.
Property
Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between
knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external
independent valuers, less subsequent depreciation for buildings.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity.
Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity, all other
decreases are charged to the statement of comprehensive income. Each year the difference between depreciation based on the
revalued carrying amount of the asset charged to the statement of profit or loss and other comprehensive income and
depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net
amount is restated to the revalued amount of the asset.
Plant and equipment
Plant and equipment are measured on the cost basis.
NOTES TO THE FINANCIAL STATEMENTS
f. Property, Plant and Equipment (cont)
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received
from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values
in determining recoverable amounts.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs
and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in
which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is
depreciated on a diminishing value or straight line basis over the asset’s useful life to the consolidated group commencing from
the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period
of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Leasehold improvements
2.50%
Plant and equipment
2.5% – 66.67%
Low value pool
Motor vehicles
18.75% – 37.5%
18.75% – 50%
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, amounts included in
the revaluation surplus relating to that asset are transferred to retained earnings.
g. Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal
ownership that is transferred to entities in the consolidated group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased
property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are
allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a diminishing or straight-line basis over the shorter of their estimated useful lives or the lease
term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses
in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease
term.
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MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
h. Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the
instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the
asset.
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair
value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or
cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable,
In other circumstances,
willing parties. Where available, quoted prices in an active market are used to determine fair value.
valuation techniques are adopted.
Amortised cost is calculated as:
i. the amount at which the financial asset or financial liability is measured at initial recognition;
ii. less principal repayments;
iii. plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the
maturity amount calculated using the effective interest method ; and
iv. less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to
the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums
or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial
instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will
necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the
requirements of accounting standards specifically applicable to financial instruments.
a. Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-
term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting
mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a
fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently
measured at fair value with changes in carrying value being included in profit or loss.
b. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after
the end of the reporting period. (All other loans and receivables are classified as non-current assets).
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MACA LIMITED ANNUAL REPORT 2016 h. Financial Instruments
Initial recognition and measurement
asset.
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the
instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair
value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or
cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable,
willing parties. Where available, quoted prices in an active market are used to determine fair value.
In other circumstances,
valuation techniques are adopted.
Amortised cost is calculated as:
ii. less principal repayments;
i. the amount at which the financial asset or financial liability is measured at initial recognition;
iii. plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the
maturity amount calculated using the effective interest method ; and
iv. less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to
the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums
or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial
instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will
necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the
requirements of accounting standards specifically applicable to financial instruments.
a. Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-
term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting
mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a
fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently
measured at fair value with changes in carrying value being included in profit or loss.
b. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after
the end of the reporting period. (All other loans and receivables are classified as non-current assets).
NOTES TO THE FINANCIAL STATEMENTS
h. Financial Instruments (cont)
c. Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments,
and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months
after the end of the reporting period. (All other investments are classified as current assets).
If during the period the Group sold or reclassified more than an insignificant amount of the held-to-maturity investments before
maturity, the entire held-to-maturity investments category would be tainted and reclassified as available-for-sale.
d. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other
categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in
the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those which are expected to mature within 12
months after the end of the reporting period. (All other financial assets are classified as current assets).
e. Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the
fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing
models.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been
impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to
determine whether an impairment has arisen. Impairment losses are recognised in the statement of comprehensive income.
De-recognition
Financial assets are de-recognised where the contractual rights to receipt of cash flows expires or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with
the asset. Financial liabilities are de-recognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
i. Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources of information including dividends received from
subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair
value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
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MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
j. Foreign Currency Transactions and Balances
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other
comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain
or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of profit or loss and other
comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
– assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
– income and expenses are translated at average exchange rates for the period; and
– retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss and
other comprehensive income in the period in which the operation is disposed.
k. Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when
the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated
future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wages
increases and the probability that the employee may satisfy vesting requirements. Those cash outflows are discounted using
market yields on national government bonds with terms to maturity that match the expected timing of cash flows.
Equity-settled compensation
The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to
which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a
corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of
options and performance rights are ascertained using a Black–Scholes pricing model and a Monte Carlo simulation respectively
which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at
the end of each reporting date such that the amount recognised for services received as consideration for the equity instruments
granted shall be based on the number of equity instruments that eventually vest. The impact of the revision of original estimates,
if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with corresponding
adjustment to the equity settled Option Reserve.
l. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable
that an outflow of economic benefits will result and that outflow can be reliably measured.
m. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in
current liabilities on the statement of financial position.
50
MACA LIMITED ANNUAL REPORT 2016 j. Foreign Currency Transactions and Balances
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other
comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain
or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of profit or loss and other
comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
– assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
– income and expenses are translated at average exchange rates for the period; and
– retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency
translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss and
other comprehensive income in the period in which the operation is disposed.
k. Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when
the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated
future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wages
increases and the probability that the employee may satisfy vesting requirements. Those cash outflows are discounted using
market yields on national government bonds with terms to maturity that match the expected timing of cash flows.
Equity-settled compensation
The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to
which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a
corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of
options and performance rights are ascertained using a Black–Scholes pricing model and a Monte Carlo simulation respectively
which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at
the end of each reporting date such that the amount recognised for services received as consideration for the equity instruments
granted shall be based on the number of equity instruments that eventually vest. The impact of the revision of original estimates,
if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with corresponding
adjustment to the equity settled Option Reserve.
l. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable
that an outflow of economic benefits will result and that outflow can be reliably measured.
m. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in
current liabilities on the statement of financial position.
NOTES TO THE FINANCIAL STATEMENTS
n. Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and
volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest
that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the
amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and
rewards of ownership of the goods and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent
in the instrument.
All dividends received shall be recognised as revenue when the right to receive the dividend has been established.
Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the
transaction at the end of the reporting period and where outcome of the contract can be estimated reliably. Stage of completion
is determined with reference to the services performed to date as a percentage of total anticipated services to be performed.
Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is
recoverable.
All revenue is stated net of the amount of goods and services tax (GST).
o. Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by
the Group during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount
being normally paid within 30 days of recognition of the liability.
p. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial
period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
q. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive
of GST.
Cash flows are presented in the statement of cashflows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
r. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the
current financial year.
When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its
financial statements, a statement of financial position as at the beginning of the earliest comparative period will be disclosed.
s. Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the group. A change in ownership interests results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the
adjustment to non-controlling interests and the consideration paid or received is recognised in a separate reserve within equity.
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MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
s. Changes in ownership interests (cont)
When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to
its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In
addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to
profit or loss where appropriate.
t. Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Group.
Key estimates
i. Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that
may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations
which incorporate various key assumptions.
The value in use calculations with respect to property, plant and equipment require an estimation of the future cash flows
expected to arise from each cash generating unit and a suitable discount rate to apply to these cash flows to calculate net present
value. The Directors have determined that there is no adjustment required to the carrying value of property, plant and equipment
in the current reporting period.
ii. Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on best estimates. These
estimates take into account both the financial performance and position of the Group as they pertain to current income taxation
legislation, and the Group’s understanding thereof. No adjustment has been made for pending or future taxation legislation. The
current income tax position represents that best estimate, pending an assessment by the Australian Taxation Office.
iii. Estimation of Useful Lives of Assets
The estimation of the useful lives of property, plant and equipment is based on historical experience and is reviewed on an
ongoing basis. The condition of the assets is assessed at least annually against the remaining useful life with adjustments made
when considered necessary.
Key judgments
i. Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental
legislation, and the directors understanding thereof. At the current stage of the Group’s development and its current
environmental impact the directors believe such treatment is reasonable and appropriate.
u. Rounding of Amounts
The parent entity has applied the relief available to it under ASIC CI 2016/191 and accordingly, amounts in the financial statements
and directors’ report have been rounded off to the nearest $1,000.
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MACA LIMITED ANNUAL REPORT 2016 s. Changes in ownership interests (cont)
Note
When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to
its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In
addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to
profit or loss where appropriate.
t. Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and
best available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and within the Group.
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that
may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations
which incorporate various key assumptions.
The value in use calculations with respect to property, plant and equipment require an estimation of the future cash flows
expected to arise from each cash generating unit and a suitable discount rate to apply to these cash flows to calculate net present
value. The Directors have determined that there is no adjustment required to the carrying value of property, plant and equipment
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on best estimates. These
estimates take into account both the financial performance and position of the Group as they pertain to current income taxation
legislation, and the Group’s understanding thereof. No adjustment has been made for pending or future taxation legislation. The
current income tax position represents that best estimate, pending an assessment by the Australian Taxation Office.
iii. Estimation of Useful Lives of Assets
The estimation of the useful lives of property, plant and equipment is based on historical experience and is reviewed on an
ongoing basis. The condition of the assets is assessed at least annually against the remaining useful life with adjustments made
Key estimates
i. Impairment
in the current reporting period.
ii. Taxation
when considered necessary.
Key judgments
i. Environmental Issues
u. Rounding of Amounts
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental
legislation, and the directors understanding thereof. At the current stage of the Group’s development and its current
environmental impact the directors believe such treatment is reasonable and appropriate.
The parent entity has applied the relief available to it under ASIC CI 2016/191 and accordingly, amounts in the financial statements
and directors’ report have been rounded off to the nearest $1,000.
NOTE 2. REVENUE AND OTHER INCOME
Revenue from continuing operations
Contract Trading Revenue
Other revenue
– Interest received
– Other revenue
Total Revenue
Other Income:
– Profit / (Loss) on sale of plant and equipment
– Profit / (Loss) on sale of investment
– Profit / (Loss) on revaluation of investment
– Rebates
Total Other Income
NOTE 3. PROFIT FOR THE YEAR
Expenses:
Depreciation and amortisation
– Plant and equipment
– Motor vehicles
– Other
Total depreciation and amortisation expense
Employee benefits expense
– Direct labour
– Payroll tax
– Superannuation
– Employee entitlements accrual
– Share Based Payments
– Other
Total employee benefits expense
Repairs, service and maintenance
Materials and supplies
NOTES TO THE FINANCIAL STATEMENTS
2016
$’000
427,137
427,137
1,929
2,358
4,287
431,424
697
(540)
(1,194)
18,873
17,837
54,970
1,490
163
56,623
101,906
2,416
6,538
9,680
277
462
2015
$’000
598,006
598,006
2,956
438
3,394
601,400
83
2,132
-
25,399
27,614
57,861
1,032
160
59,053
130,575
7,175
8,198
13,035
232
384
121,279
159,599
46,979
56,792
97,600
112,326
53
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
Note
NOTE 4. INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current
Deferred
(b) The prima facie tax on profit from ordinary activities
before income tax is reconciled to the income tax as follows:
Prima facie tax payable on profit from ordinary activities
before income tax at 30% (2015: 30%)
Add tax effect of:
– dividend imputation
– other non allowable items
– Other taxable items
– Research & Development Credit
Less tax effect of:
– franking credits on dividends received
– other deductible items
Income tax attributable to the entity
The applicable weighted average effective tax rate as
NOTE 5. BUSINESS COMBINATIONS
2016
2016
$’000
10,142
(731)
9,411
10,092
4,571
575
10,667
(1,256)
2015
$’000
24,343
(1,107)
23,236
23,295
11,527
61
26,897
(120)
(15,238)
(38,424)
9,411
27.9%
23,236
29.9%
On 31 January 2016 the Group acquired 100% of the issued capital in Alliance Contracting Pty Ltd, a company involved in
contracting of mining and civil services.
On 5 April 2016 the Group acquired 75% of the issued capital in Services South East Pty Ltd, a company mostly involved in
contracting of civil and road maintenance services.
The major classes of assets and liabilities comprising the acquisition of each Company as at the date of the acquisition are as
follows:
Alliance Contracting Pty Ltd
Purchase consideration - Cash:
Less:
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Land and Building
Trade and other payables
Financial liabilities
Current tax liabilities
Provisions
Value of identifiable assets acquired and liabilities assumed
Gain on acquisition
54
Fair value at 31 January
2016
$’000
4,703
4,172
5,712
1,087
11,828
1,820
(7,829)
(9,185)
(19)
(2,881)
4,703
-
MACA LIMITED ANNUAL REPORT 2016 Note
NOTE 5. BUSINESS COMBINATIONS (cont)
Services South East Pty Ltd
Fair value at 5 April
2016
NOTES TO THE FINANCIAL STATEMENTS
Purchase consideration - Cash:
Less:
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Trade and other payables
Financial liabilities
Current tax liabilities
Provisions
Value of identifiable assets acquired and liabilities assumed
Goodwill on acquisition
(15,238)
(38,424)
2015
There were no business combinations for the year ended 30 June 2015
Note
2016
$’000
$’000
1,642
(63)
1,657
918
7,173
(4,817)
(6,486)
-
(442)
(1,545)
(3,187)
2015
$’000
NOTE 6. AUDITORS’ REMUNERATION
Remuneration of the parent entity auditors for:
– Auditing or reviewing the financial report
160
150
NOTE 7. INTERESTS OF KEY MANAGEMENT COMPENSATION (KMP)
Refer to the remuneration report contained in the director’s
report for details of the remuneration paid or payable to each
member of the Group’s key management personnel for the
year ended 30 June 2016.
The totals of remuneration paid to KMP of the company and
Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share based payments
3,567
215
-
471
4,253
4,393
242
121
232
4,988
NOTE 4. INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current
Deferred
(b) The prima facie tax on profit from ordinary activities
before income tax is reconciled to the income tax as follows:
Prima facie tax payable on profit from ordinary activities
before income tax at 30% (2015: 30%)
Add tax effect of:
– dividend imputation
– other non allowable items
– Other taxable items
– Research & Development Credit
Less tax effect of:
– franking credits on dividends received
– other deductible items
Income tax attributable to the entity
NOTE 5. BUSINESS COMBINATIONS
2016
contracting of mining and civil services.
The applicable weighted average effective tax rate as
follows:
Alliance Contracting Pty Ltd
Purchase consideration - Cash:
Less:
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Land and Building
Trade and other payables
Financial liabilities
Current tax liabilities
Provisions
Gain on acquisition
Value of identifiable assets acquired and liabilities assumed
2016
$’000
10,142
(731)
9,411
10,092
4,571
575
10,667
(1,256)
9,411
27.9%
2015
$’000
24,343
(1,107)
23,236
23,295
11,527
61
26,897
(120)
23,236
29.9%
2016
$’000
4,703
4,172
5,712
1,087
11,828
1,820
(7,829)
(9,185)
(19)
(2,881)
4,703
-
On 31 January 2016 the Group acquired 100% of the issued capital in Alliance Contracting Pty Ltd, a company involved in
On 5 April 2016 the Group acquired 75% of the issued capital in Services South East Pty Ltd, a company mostly involved in
contracting of civil and road maintenance services.
The major classes of assets and liabilities comprising the acquisition of each Company as at the date of the acquisition are as
Fair value at 31 January
55
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
Note
NOTE 8. DIVIDENDS
Distributions paid
Interim fully franked ordinary dividend of $0.04 (2015: 0.070)
per share franked at the tax rate of 30% (2015: 30%)
No Special dividend was paid during the year (2015: $0.25)
2015 final dividend (fully franked) of $0.075 per share paid in
2016 (2015: $0.075)
Total dividends per share for the period $
2016
$’000
9,307
-
17,451
26,758
0.115
2015
$’000
15,201
58,169
16,287
89,657
0.395
Proposed final fully franked ordinary dividend of $0.045 (2015:
$0.075) per share franked at the tax rate of 30% (2015: 30%)
10,470
17,451
Balance of franking account at year end adjusted for credits
arising from payment of provision of income tax and debits
arising for income tax and dividends recognised as receivables
and franking credits that may be prevented from distribution in
subsequent financial year as per the income tax return at 30
June 2016 being the latest tax year end to balance date.
NOTE 9. EARNINGS PER SHARE
a. Reconciliation of earnings to profit and loss
Profit
(Profit)/loss attributable to non controlling interest
Earnings used to calculate basic EPS
Earnings used in the calculation of dilutive EPS
b. Weighted average number (000) of ordinary shares
outstanding during the year in calculating basic EPS
Weighted average number (000) of dilutive options
outstanding
Weighted average number (000) of ordinary shares
outstanding during the year used in calculating dilutive EPS
22,312
22,201
24,230
(67)
24,163
24,163
54,413
-
54,413
54,413
232,676
226,676
664
262
233,340
226,938
NOTE 10. CASH AND CASH EQUIVALENTS
Cash at bank
20
115,602
118,533
56
MACA LIMITED ANNUAL REPORT 2016 Proposed final fully franked ordinary dividend of $0.045 (2015:
$0.075) per share franked at the tax rate of 30% (2015: 30%)
10,470
17,451
NOTE 8. DIVIDENDS
Distributions paid
Interim fully franked ordinary dividend of $0.04 (2015: 0.070)
per share franked at the tax rate of 30% (2015: 30%)
No Special dividend was paid during the year (2015: $0.25)
2015 final dividend (fully franked) of $0.075 per share paid in
2016 (2015: $0.075)
Total dividends per share for the period $
Balance of franking account at year end adjusted for credits
arising from payment of provision of income tax and debits
arising for income tax and dividends recognised as receivables
and franking credits that may be prevented from distribution in
subsequent financial year as per the income tax return at 30
June 2016 being the latest tax year end to balance date.
NOTE 9. EARNINGS PER SHARE
a. Reconciliation of earnings to profit and loss
Profit
(Profit)/loss attributable to non controlling interest
Earnings used to calculate basic EPS
Earnings used in the calculation of dilutive EPS
b. Weighted average number (000) of ordinary shares
outstanding during the year in calculating basic EPS
Weighted average number (000) of dilutive options
outstanding
Weighted average number (000) of ordinary shares
outstanding during the year used in calculating dilutive EPS
2016
$’000
9,307
-
17,451
26,758
0.115
2015
$’000
15,201
58,169
16,287
89,657
0.395
22,312
22,201
24,230
(67)
24,163
24,163
54,413
-
54,413
54,413
232,676
226,676
664
262
233,340
226,938
NOTE 10. CASH AND CASH EQUIVALENTS
Cash at bank
20
115,602
118,533
Note
Note
NOTE 11. TRADE AND OTHER RECEIVABLES
CURRENT
Trade debtors
Less – Impairment for doubtful debts
a. Credit risk
NOTES TO THE FINANCIAL STATEMENTS
2016
$’000
73,461
-
73,461
2015
$’000
82,063
(1,821)
80,242
The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties other
than those receivables specifically provided for and mentioned within Note 11. The class of assets described as “trade and other
receivables” is considered to be the main source of credit risk related to the Group.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit
enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the debt
has not been settled within the terms and conditions agreed between the Group and the customer or counterparty to the
transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided
for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.
The balance of receivables that remain within initial trade terms (as detailed in the table) are considered to be of acceptable credit
quality.
Gross amount
Past due and
impaired
Past due but not
impaired (months
Within initial trade
terms
overdue)
< 1 month
30-Jun-16
Trade and term receivables
Other receivables
Total
30-Jun-15
Trade and term receivables
Other receivables
Total
$’000
$’000
$’000
$’000
73,461
-
73,461
82,063
-
82,063
-
-
-
12,652
60,809
-
-
12,652
60,809
1,821
-
1,821
28,756
51,487
-
-
28,756
51,487
Neither the Group nor parent entity holds any financial assets with terms that have been renegotiated, but which would otherwise
be past due or impaired.
b. Financial assets classified as loans and receivables
Trade and other receivables
- Total current
- Total non-current
Other loans
- Total current
- Total non-current
73,461
-
73,461
7,114
883
7,997
80,242
-
80,242
6,256
9,878
16,134
14
14
57
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
Note
NOTE 12. OTHER ASSETS
CURRENT
Prepayments
Deposit
NOTE 13. PROPERTY, PLANT & EQUIPMENT
PLANT AND EQUIPMENT
Plant and equipment – at cost
Accumulated depreciation & impairment
Motor vehicles – at cost
Accumulated depreciation
Land and Building – at cost
Accumulated depreciation
Leased plant and equipment – at cost
Accumulated depreciation
Low value pool – at cost
Accumulated depreciation
Leasehold improvements – at cost
Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
2016
$’000
244
1,900
2,144
462,646
(315,797)
146,850
12,194
(8,297)
3,897
2,327
(397)
1,930
1,080
(1,080)
-
163
(106)
57
2,102
(668)
1,434
150,804
154,167
2015
$’000
5,100
29
5,129
377,203
(221,803)
155,400
8,654
(7,008)
1,646
-
-
-
1,080
(1,080)
-
175
(114)
61
1,688
(231)
1,457
157,107
158,564
The Group monitors market conditions for indications of impairment of its operating assets. Where a trigger event occurs which
indicates an impairment may have occurred, a formal impairment assessment is performed.
For the financial year ended 30 June 2016 there have been no indicators of impairment.
58
MACA LIMITED ANNUAL REPORT 2016 Note
NOTE 13. PROPERTY, PLANT & EQUIPMENT (cont)
a. Movements in Carrying Amounts
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the
current financial year.
NOTES TO THE FINANCIAL STATEMENTS
Land and Buildings
Plant and
equipment
Motor Vehicles
Leased plant and
equipment
Leasehold
improvements
Total
NOTE 12. OTHER ASSETS
CURRENT
Prepayments
Deposit
NOTE 13. PROPERTY, PLANT & EQUIPMENT
PLANT AND EQUIPMENT
Plant and equipment – at cost
Accumulated depreciation & impairment
Motor vehicles – at cost
Accumulated depreciation
Land and Building – at cost
Accumulated depreciation
Leased plant and equipment – at cost
Accumulated depreciation
Low value pool – at cost
Accumulated depreciation
Leasehold improvements – at cost
Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
2016
$’000
244
1,900
2,144
462,646
(315,797)
146,850
12,194
(8,297)
3,897
2,327
(397)
1,930
1,080
(1,080)
-
163
(106)
57
2,102
(668)
1,434
2015
$’000
5,100
29
5,129
377,203
(221,803)
155,400
8,654
(7,008)
1,646
-
-
-
-
1,080
(1,080)
175
(114)
61
1,688
(231)
1,457
150,804
154,167
157,107
158,564
Consolidated:
$’000
Opening balance at 1 July 2014
Additions
Disposals
Foreign Currency movements
Impairment
Depreciation expense
Capitalised borrowing cost and
depreciation
Balance at 30 June 2015
Opening balance at 1 July 2015
Additions
Additions through Business
Combinations
Disposals
Foreign Currency movements
Impairment
Depreciation expense
Capitalised borrowing cost and
depreciation
-
-
-
-
-
-
-
$’000
110
1,820
-
-
-
-
-
$’000
167,887
50,826
(47)
367
(5,772)
(57,861)
-
155,400
$’000
155,400
34,601
14,946
(3,127)
-
-
$’000
2,767
50
(139)
-
-
(1,032)
-
1,646
$’000
1,646
0
4,046
(305)
-
-
(54,970)
(1,490)
-
-
Balance at 30 June 2016
1,930
146,850
3,897
Note
NOTE 14. LOANS TO OTHER COMPANIES
Loans to Other Companies - current
Loans to Other Companies - non current
The Group monitors market conditions for indications of impairment of its operating assets. Where a trigger event occurs which
indicates an impairment may have occurred, a formal impairment assessment is performed.
For the financial year ended 30 June 2016 there have been no indicators of impairment.
NOTE 15. AVAILABLE FOR SALE FINANCIAL ASSETS
Shares in Listed corporations at Fair Value - current
Shares in Listed corporations at Fair Value - non current
Low
value
pool
$’000
76
2
(2)
$’000
-
-
-
-
-
-
-
-
-
$’000
$’000
$’000
1,528
91
(17)
-
-
$’000
172,258
50,969
(205)
367
(5,772)
(59,053)
(15)
(145)
-
-
61
1,457
158,564
61
0
5
0
$’000
1,457
130
4
(4)
-
-
$’000
158,564
34,841
20,821
(3,436)
0
0
-
-
-
-
-
-
-
-
-
-
-
2016
$’000
7,114
883
7,997
-
851
851
(9)
(154)
(56,623)
-
-
57
1,433
154,167
2015
$’000
6,256
9,878
16,134
-
1,898
1,898
59
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. TAX
(a) Liabilities
CURRENT
Income tax
NON-CURRENT
Deferred tax liability comprises:
Other
Total
(b) Assets
NON-CURRENT
Deferred tax assets comprises:
Provisions
Receivables
Other
Total
(c) Reconciliations
i. Gross movements
The overall movement in the deferred tax account is as
follows:
Opening balance
(Charge)/credit to income statement
(Charge)/credit to equity
Closing balance
ii. Deferred tax liabilities
The movement in deferred tax liabilities for each temporary
difference during the year is as follows:
Other:
Opening balance
Charge / (Credit) to income statement
Charge / (Credit) to equity
Closing balance
Note
2016
$’000
2015
$’000
1,028
2,885
113
113
94
94
3,012
-
2,721
5,733
5,994
(175)
(199)
5,620
94
19
-
113
3,442
547
2,099
6,088
4,587
756
651
5,994
748
(29)
(625)
94
60
MACA LIMITED ANNUAL REPORT 2016
NOTE 16. TAX
(a) Liabilities
CURRENT
Income tax
Other
Total
(b) Assets
Provisions
Receivables
Other
Total
NON-CURRENT
Deferred tax liability comprises:
NON-CURRENT
Deferred tax assets comprises:
The overall movement in the deferred tax account is as
(c) Reconciliations
i. Gross movements
follows:
Opening balance
(Charge)/credit to income statement
(Charge)/credit to equity
Closing balance
ii. Deferred tax liabilities
The movement in deferred tax liabilities for each temporary
difference during the year is as follows:
Other:
Opening balance
Charge / (Credit) to income statement
Charge / (Credit) to equity
Closing balance
Note
2016
$’000
2015
$’000
1,028
2,885
113
113
94
94
3,012
-
2,721
5,733
5,994
(175)
(199)
5,620
94
19
-
113
3,442
547
2,099
6,088
4,587
756
651
5,994
748
(29)
(625)
94
NOTES TO THE FINANCIAL STATEMENTS
Note
2016
$’000
2015
$’000
NOTE 16. TAX (cont)
iii. Deferred tax assets
The movement in deferred tax assets for each temporary
difference during the year is as follows:
Provisions:
Opening balance
Credit to income statement
Closing balance
Receivables:
Opening balance
(Charge) / Credit to income statement
Closing balance
Other:
Opening balance
(Charge) / Credit to income statement
(Charge) / Credit to equity
Closing balance
NOTE 17. TRADE AND OTHER PAYABLES
PAYABLES
CURRENT
Unsecured Liabilities:
Trade creditors
Sundry creditors and accruals
Creditors are non-interest bearing and settled at various terms
up to 45 days.
Financial liabilities at amortised cost classified as trade and
other payables
Trade and other payables
- Total current
- Total non-current
3,442
(430)
3,012
547
(547)
-
2,099
821
(199)
2,721
4,230
(788)
3,442
-
547
547
1,105
968
26
2,099
28,046
4,817
32,863
38,374
16,362
54,736
32,863
-
32,863
54,736
-
54,736
61
MACA LIMITED ANNUAL REPORT 2016
NOTES TO THE FINANCIAL STATEMENTS
Note
NOTE 18. FINANCIAL LIABILITIES
CURRENT
Secured Liabilities:
Finance lease liability
NON-CURRENT
Secured Liabilities
Finance lease liability
a. Total current and non-current secured liabilities:
Finance lease liability
20, 21
b. The carrying amounts of non-current assets pledged as
security are:
Finance lease liability
Insurance Bonding Facilities
The Company has an insurance bonding facility totalling $10
million. At 30 June 2016 the amount drawn on the facility was
$2.391 million.
NOTE 19. PROVISIONS
CURRENT
Employee Entitlements
a. Movement in provisions:
Consolidated:
Opening balance as at 1 July
Additional provisions
Amounts used
Closing balance as at 30 June
b. Provision for employee benefits
A provision has been recognised for employee benefits relating
to statutory leave for employees. The measurement and
recognition criteria for employee benefits have been included
in Note 1.
2016
$’000
39,210
39,210
34,499
34,499
73,709
73,709
98,842
98,842
2015
$’000
41,032
41,032
35,198
35,198
76,320
76,320
98,282
98,282
9,954
9,282
Employee entitlements
Total
9,282
11,619
(10,947)
9,954
8,449
14,690
(13,857)
9,282
62
MACA LIMITED ANNUAL REPORT 2016 a. Total current and non-current secured liabilities:
Finance lease liability
20, 21
b. The carrying amounts of non-current assets pledged as
security are:
Finance lease liability
Insurance Bonding Facilities
The Company has an insurance bonding facility totalling $10
million. At 30 June 2016 the amount drawn on the facility was
NOTE 18. FINANCIAL LIABILITIES
CURRENT
Secured Liabilities:
Finance lease liability
NON-CURRENT
Secured Liabilities
Finance lease liability
$2.391 million.
NOTE 19. PROVISIONS
CURRENT
Employee Entitlements
a. Movement in provisions:
Consolidated:
Opening balance as at 1 July
Additional provisions
Amounts used
Closing balance as at 30 June
Note
2016
$’000
39,210
39,210
34,499
34,499
73,709
73,709
98,842
98,842
2015
$’000
41,032
41,032
35,198
35,198
76,320
76,320
98,282
98,282
9,954
9,282
Employee entitlements
Total
9,282
11,619
(10,947)
9,954
8,449
14,690
(13,857)
9,282
b. Provision for employee benefits
A provision has been recognised for employee benefits relating
to statutory leave for employees. The measurement and
recognition criteria for employee benefits have been included
in Note 1.
NOTES TO THE FINANCIAL STATEMENTS
Note
2016
$’000
2015
$’000
NOTE 20. ISSUED CAPITAL
232,676,373 (2015: 232,676,373) Fully paid ordinary shares
with no par value
(a) Ordinary shares:
At the beginning of the reporting period
Shares issued during the year
– 11 September 2014 – Capital Raising
Shares at reporting date
208,816
209,016
No.
No.
232,676,373
202,676,373
-
232,676,373
30,000,000
232,676,373
The company has no authorised share capital. Ordinary shares participate in dividends and the proceeds on winding up of the
parent entity in proportion to the number of shares held. At the shareholders’ meetings each ordinary share is entitled to one vote
when a poll is called, otherwise each shareholder has one vote on a show of hands.
Management controls the capital of the Group in order to maintain a prudent debt to equity ratio, provide the shareholders with
adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the
Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels, distributions to shareholders and share issues.
Total borrowings
Less cash and cash equivalents
18
10
Net debt
Total equity
Total capital
Gearing ratio
NOTE 21. CAPITAL & LEASING COMMITMENTS
(a) Capital expenditure commitments
Capital expenditure commitments contracted for:
Plant and equipment purchases
Payable
– not later than 12 months
– between 12 months and 5 years
– greater than 5 years
Minimum Commitments
(b) Finance lease commitments
Payable — minimum lease payments
– not later than 12 months
– between 12 months and 5 years
– greater than 5 years
Minimum lease payments
Less: Future Finance Charges
73,709
(115,602)
(41,893)
255,633
213,739
(20%)
76,230
(118,533)
(42,303)
255,968
213,665
(20%)
11,520
18,519
11,520
18,519
-
-
-
-
11,520
18,519
41,330
36,802
-
78,132
(4,423)
73,709
43,969
36,731
-
80,700
(4,470)
76,230
63
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 21. CAPITAL & LEASING COMMITMENTS (cont)
(c) Operating lease commitments
Non-cancellable operating leases contracted for but not
capitalised in the accounts:
Payable — minimum lease payments
– not later than 12 months
– between 12 months and 5 years
– greater than 5 years
Note
2016
$’000
2015
$’000
1,576
4,467
-
6,043
1,515
5,824
-
7,339
NOTE 22. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Performance Guarantees
MACA has indemnified its bankers and insurance bond providers in respect of bank guarantees and insurance bonds to various
customers for satisfactory contract performance and warranty security in the following amounts: 30 June 2016: $3.236 million
(2015: $3.215 million)
There are no contingent assets or liabilities other than those listed above.
NOTE 23. OPERATING SEGMENTS
The group information presented in the financial report is the information that is reviewed by the Board of Directors (Chief
operating decision maker) in assessing performance and determining the allocation of resources.
Identification of Reportable Segment
The Group identifies its operating segments based on internal reports that are reviewed and used by the Board of Directors (chief
operating decision maker) in assessing performance and determining the allocation of resources.
The Group operates predominantly in two businesses and two geographical segments being the provision of civil and contract
mining services throughout Australia and mining services to the mining industry in Brazil, South America.
Basis of Accounting for Purposes of Reporting by Operating Segments
Accounting Policies Adopted
Unless otherwise stated, all amounts reported to the Board of Directors as the chief operating decision maker, is in accordance
with accounting policies that are consistent to those adopted in the financial statements of the Company.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognized at the consideration received net of transaction costs. If inter-
segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest
rates. This policy represents a departure from that applied to the statutory financial statements.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic
value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical
location.
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets
have not been allocated to operating segments.
64
MACA LIMITED ANNUAL REPORT 2016 NOTE 21. CAPITAL & LEASING COMMITMENTS (cont)
(c) Operating lease commitments
Non-cancellable operating leases contracted for but not
capitalised in the accounts:
Payable — minimum lease payments
– not later than 12 months
– between 12 months and 5 years
– greater than 5 years
1,576
4,467
-
6,043
1,515
5,824
-
7,339
NOTE 22. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Performance Guarantees
MACA has indemnified its bankers and insurance bond providers in respect of bank guarantees and insurance bonds to various
customers for satisfactory contract performance and warranty security in the following amounts: 30 June 2016: $3.236 million
(2015: $3.215 million)
There are no contingent assets or liabilities other than those listed above.
NOTE 23. OPERATING SEGMENTS
Identification of Reportable Segment
The group information presented in the financial report is the information that is reviewed by the Board of Directors (Chief
operating decision maker) in assessing performance and determining the allocation of resources.
The Group identifies its operating segments based on internal reports that are reviewed and used by the Board of Directors (chief
operating decision maker) in assessing performance and determining the allocation of resources.
The Group operates predominantly in two businesses and two geographical segments being the provision of civil and contract
mining services throughout Australia and mining services to the mining industry in Brazil, South America.
Basis of Accounting for Purposes of Reporting by Operating Segments
Accounting Policies Adopted
Unless otherwise stated, all amounts reported to the Board of Directors as the chief operating decision maker, is in accordance
with accounting policies that are consistent to those adopted in the financial statements of the Company.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognized at the consideration received net of transaction costs. If inter-
segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest
rates. This policy represents a departure from that applied to the statutory financial statements.
Segment assets
location.
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic
value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets
have not been allocated to operating segments.
Note
2016
$’000
2015
$’000
NOTE 23. OPERATING SEGMENTS (cont)
Segment liabilities
NOTES TO THE FINANCIAL STATEMENTS
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the
segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment
liabilities include trade and other payables and certain direct borrowings.
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered
part of the core operations of any segment:
Dividends, interest, head office and other administration expenditure
Consolidated - June 2016
Revenue
Total reportable segment revenue
Other Revenue
Total revenue
Earnings before interest, tax, depreciation, amortisation and
impairments
Depreciation and amortisation
Impairment of assets (debtors and plant & equipment)
Interest Revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Mining
$’000
396,209
2,661
398,871
95,597
(56,356)
-
71
(2,558)
36,754
Civil
$’000
Unallocated
$’000
Total
$’000
30,927
(98)
30,829
-
1,724
1,724
(3,969)
(735)
(267)
-
134
-
(4,102)
-
-
1,724
-
989
427,137
4,287
431,424
90,894
(56,623)
-
1,929
(2,558)
33,641
(9,411)
24,230
373,300
373,300
117,667
117,667
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
255,906
18,246
99,148
91,818
11,572
14,277
54,472
1,190
-
55,662
65
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 23. OPERATING SEGMENTS (cont)
Consolidated - June 2015
Revenue
Total reportable segment revenue
Other Revenue
Total revenue
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation
Impairment of assets (debtors and plant & equipment)
Interest Revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Mining
$’000
541,394
1,058
542,452
143,567
(58,794)
(7,593)
620
(4,427)
73,373
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
Geographical information
Australia
Brazil
Total
Major customers
Civil
$’000
Unallocated
$’000
Total
$’000
56,612
74
56,686
437
(259)
-
74
-
252
-
2,262
2,262
1,762
-
-
2,262
-
4,024
598,006
3,394
601,400
145,766
(59,053)
(7,593)
2,956
(4,427)
77,649
(23,236)
54,413
399,195
399,195
143,227
143,227
240,770
31,953
126,472
116,155
26,780
292
50,829
140
-
50,969
Revenue
Non-current assets
2016
$’000
349,606
81,818
431,424
2015
$’000
573,876
27,524
601,400
2016
$’000
111,980
52,841
164,821
2015
$’000
141,337
35,091
176,428
The Group has a number of customers to whom it provides both products and services. The Group supplies 3 single external
customers in the mining segment which account for 35%, 19% and 16% of external revenue. (2015: 31%, 21% and 12%). The next
most significant client accounts for 5% (2015: 11%) of external revenue.
66
MACA LIMITED ANNUAL REPORT 2016 NOTE 23. OPERATING SEGMENTS (cont)
Consolidated - June 2015
Total reportable segment revenue
Revenue
Other Revenue
Total revenue
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation
Impairment of assets (debtors and plant & equipment)
Interest Revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Civil
$’000
Unallocated
$’000
Total
$’000
Mining
$’000
541,394
1,058
542,452
143,567
(58,794)
(7,593)
620
(4,427)
73,373
56,612
74
56,686
437
(259)
74
-
-
252
-
-
-
-
2,262
2,262
1,762
2,262
4,024
598,006
3,394
601,400
145,766
(59,053)
(7,593)
2,956
(4,427)
77,649
(23,236)
54,413
399,195
399,195
143,227
143,227
2015
$’000
141,337
35,091
176,428
240,770
31,953
126,472
116,155
26,780
292
50,829
140
-
50,969
Revenue
Non-current assets
2016
$’000
349,606
81,818
431,424
2015
$’000
573,876
27,524
601,400
2016
$’000
111,980
52,841
164,821
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
Geographical information
Australia
Brazil
Total
Major customers
The Group has a number of customers to whom it provides both products and services. The Group supplies 3 single external
customers in the mining segment which account for 35%, 19% and 16% of external revenue. (2015: 31%, 21% and 12%). The next
most significant client accounts for 5% (2015: 11%) of external revenue.
NOTES TO THE FINANCIAL STATEMENTS
2016
$’000
2015
$’000
NOTE 24. CASH FLOW INFORMATION
(a) Reconciliation of Cash
Cash at the end of the financial year as shown in the Statement of Cash Flows is
reconciled to the related items in the balance sheet as follows:
Cash and cash equivalents
Bank overdraft
(b) Reconciliation of Cash Flow from Operations with Operating Profit after
Income Tax
Operating profit after income tax
Non-cash flows in profit from ordinary activities
Depreciation and amortization
Impairment of plant and equipment
Impairment of debtors
Net (gain)/loss on disposal of plant and equipment
Net (gain)/loss on disposal of investments
Foreign exchange losses
Share based payment
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
(Increase)/decrease in inventories & WIP
Increase/(decrease) in trade and other payables
Increase/(decrease) in income tax payable
Increase/(decrease) in deferred tax payable
Increase/(decrease) in provisions
(c) Non-cash financing and Investing Activities
During the year the economic entity did not acquire any acquired plant and
equipment (2015: $17,945,477) by means of finance leases. These acquisitions
are not reflected in the statement of cash flows.
115,602
-
115,602
24,230
56,623
-
-
(697)
1,734
85
277
23,143
931
(2,451)
(39,310)
(1,857)
374
1,050
64,132
118,533
-
118,533
54,413
59,053
5,772
1,821
(84)
(2,132)
753
232
56,232
(2,137)
(8,315)
(23,984)
(4,591)
(1,406)
833
136,461
67
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 24. CASH FLOW INFORMATION (cont)
(d) Acquisition of Entities
During the year the economic entity did not acquire any entities by non-cash
means (2016: nil).
Alliance Contracting Pty Ltd (Alliance)
On 1 February 2016, MACA acquired 100% of the ordinary share capital and voting rights in Alliance as
described in note 5:
Purchase consideration:
Consideration exchanged
Total consideration
Cash acquired:
Cash held by Alliance at date of acquisition
Cash in-flow on acquisition
Assets and liabilities held at acquisition date (excluding cash) excluded from the consolidated statement
of cash flow:
Trade and other receivables
Property, plant, and equipment
Land and Building
Trade and other payables
Financial liabilities
Services South East Pty Ltd (SSE)
On 4 April 2016, MACA acquired 75% of the ordinary share capital and voting rights in SSE as described
in note 5:
Purchase consideration:
Consideration exchanged
Total consideration
Cash acquired:
Cash held by SSE at date of acquisition
Cash in-flow on acquisition
Assets and liabilities held at acquisition date (excluding cash) excluded from the consolidated statement
of cash flow:
Trade and other receivables
Loans
Other current assets
Property, plant, and equipment
Trade and other payables
Other liabilities
68
2016
$’000
4,703
4,703
4,172
4,172
5,712
11,828
1,820
(7,829)
(9,185)
2016
$’000
1,642
1,642
(63)
(63)
1,657
992
479
7,173
(4,817)
(6,928)
MACA LIMITED ANNUAL REPORT 2016 NOTE 24. CASH FLOW INFORMATION (cont)
(d) Acquisition of Entities
During the year the economic entity did not acquire any entities by non-cash
means (2016: nil).
On 1 February 2016, MACA acquired 100% of the ordinary share capital and voting rights in Alliance as
Assets and liabilities held at acquisition date (excluding cash) excluded from the consolidated statement
On 4 April 2016, MACA acquired 75% of the ordinary share capital and voting rights in SSE as described
Assets and liabilities held at acquisition date (excluding cash) excluded from the consolidated statement
Alliance Contracting Pty Ltd (Alliance)
described in note 5:
Purchase consideration:
Consideration exchanged
Total consideration
Cash acquired:
Cash held by Alliance at date of acquisition
Cash in-flow on acquisition
of cash flow:
Trade and other receivables
Property, plant, and equipment
Land and Building
Trade and other payables
Financial liabilities
Services South East Pty Ltd (SSE)
in note 5:
Purchase consideration:
Consideration exchanged
Total consideration
Cash acquired:
Cash held by SSE at date of acquisition
Cash in-flow on acquisition
of cash flow:
Trade and other receivables
Loans
Other current assets
Property, plant, and equipment
Trade and other payables
Other liabilities
2016
$’000
4,703
4,703
4,172
4,172
5,712
11,828
1,820
(7,829)
(9,185)
2016
$’000
1,642
1,642
(63)
(63)
1,657
992
479
7,173
(4,817)
(6,928)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25. SHARE-BASED PAYMENTS
(a) Options
There were no options issued for the year ended 30 June 2016. The weighted average fair value of options granted during the
previous year was Nil.
(b) Performance Rights
The Company issues performance rights to Senior executives in accordance with the terms of the Long-Term Incentive Plan and
the Performance Rights Plan as approved by Shareholders. When vested, each performance right is converted into one ordinary
share for no consideration. Performance rights granted carry no dividend or voting rights.
During the 2016 financial year 1,955,782 performance rights were granted under the Group’s Performance Rights Plan as set out
in the table below and are intended to be issued after the end of the financial year, and 311,146 performance rights were
forfeited. Subject to the achievement of designated performance hurdles, these performance rights will vest in June 2018
(2015:663,501). On 11 November 2015 shareholders approved the issue of 444,737 performance rights to the Managing Director
Mr Chris Tuckwell and 363,816 performance rights to the Operation Director Mr Geoff Baker. As at 30 June 2016 there were
2,308,136 performance rights outstanding of which 925,331 had been issued.
The following performance rights arrangement was in existence at 30 June 2016:
Unlisted Performance Rights
Unlisted Performance Rights
Unlisted Performance Rights
Number
261,830
568,143
1,739,993
Expiry Date
30-Jun-16
30-Jun-17
30-Jun-18
The following performance Rights were granted, vested or expired during the year:
Outstanding at the beginning of the year
Granted
Vested
Cancelled or expired
Outstanding at the end of the year
Vested at Year End
2016
Number
925,331
1,955,782
-
(311,146)
2,569,967
(261,830)
2015
Number
261,830
663,501
-
-
925,331
-
An independent valuation was completed on performance rights granted during the year. Market based vesting conditions were
valued using a hybrid share option pricing model that simulates the share price of the Company as at the test date using a Monte-
Carlo simulation model. For non-market based vesting conditions no discount was made to the underlying valuation model
The weighted average fair value of the performance rights granted during the year ended 30 June 2016 was $0.38 per right. The
total share based payment expense for the year ended 30 June 2016 relating to the grant of performance rights in the statement
of profit or loss is $232k (2015: 277k). Inputs used to determine the fair value of performance rights granted during the year
ended 30 June 2016 were:
a)
b)
c)
d)
e)
f)
Share price $0.814 being the 30 day VWAP of the Company on the last trading day prior to 30 June 2015
Exercise price: Nil
Volatility: 41.2%
Option life: 3 years
Dividend yield: 10%
Risk Free Rate 2.12%
69
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. EVENTS AFTER THE BALANCE SHEET DATE
After balance date events included the following:
MACA has commenced a small mining services contract with MMG Mining at Golden Grove. The contract is worth approximately
$5 million over a period of 6 months for the first stage of works.
MACA has commenced a small crushing services contract with Merlin Diamonds in the Northern Territory. The contract is worth
approximately $3 million over a period of 12 months for the first stage of works.
NOTE 27. CONTROLLED ENTITIES
Parent entity:
MACA Limited
Subsidiaries:
MACA Mining Pty Ltd
MACA Plant Pty Ltd
MACA Crushing Pty Ltd
MACA Civil Pty Ltd
Riverlea Corporation Pty Ltd
MACA Mineracao e Construcao Civil Ltda
Alliance Contracting Pty Ltd
Services South East Pty Ltd
Marniyarra Mining and Civil Pty Ltd JV
Country of
Incorporation
Percentage Owned (%)
2016
2015
Australia
-
-
Australia
Australia
Australia
Australia
Australia
Brazil
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
75%
60%
100%
100%
100%
100%
100%
100%
-
-
-
70
MACA LIMITED ANNUAL REPORT 2016 NOTE 26. EVENTS AFTER THE BALANCE SHEET DATE
After balance date events included the following:
MACA has commenced a small mining services contract with MMG Mining at Golden Grove. The contract is worth approximately
$5 million over a period of 6 months for the first stage of works.
MACA has commenced a small crushing services contract with Merlin Diamonds in the Northern Territory. The contract is worth
approximately $3 million over a period of 12 months for the first stage of works.
NOTE 27. CONTROLLED ENTITIES
Parent entity:
MACA Limited
Subsidiaries:
MACA Mining Pty Ltd
MACA Plant Pty Ltd
MACA Crushing Pty Ltd
MACA Civil Pty Ltd
Riverlea Corporation Pty Ltd
MACA Mineracao e Construcao Civil Ltda
Alliance Contracting Pty Ltd
Services South East Pty Ltd
Marniyarra Mining and Civil Pty Ltd JV
Country of
Incorporation
Percentage Owned (%)
2016
2015
Australia
-
100%
100%
100%
100%
100%
100%
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
75%
60%
Australia
Australia
Australia
Australia
Australia
Brazil
Australia
Australia
Australia
NOTES TO THE FINANCIAL STATEMENTS
Note
2016
$’000
2015
$’000
NOTE 28. FINANCIAL RISK MANAGEMENT
Financial Risk Management
The Group’s financial
investments, accounts receivable and payable, loans to and from subsidiaries, loans to other companies and leases.
instruments consist mainly of deposits with banks,
local money market instruments, short-term
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies
to these financial statements are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
— Trade and other receivables
— Other Loans
Available-for-sale financial assets:
— At fair value
— Listed investments
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
— Trade and other payables
— Borrowings
Total Financial Liabilities
Financial Risk Management Policies
10
115,602
118,533
11(b)
14
15
17
18
73,461
7,997
851
197,911
32,863
73,709
106,572
80,242
16,134
1,898
216,807
54,736
76,320
130,966
The Board of Directors (“the Board”) is responsible for, amongst other issues, monitoring and managing financial risk exposures of
the Group. The Board monitors the Group’s financial risk management policies and exposures and approves financial transactions
within the scope of its authority.
It also reviews the effectiveness of internal controls relating to commodity price risk,
counterparty credit risk, currency risk, financing risk and interest rate risk.
The Board’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while
minimising potential adverse effects on financial performance. Its functions include the review of the use of hedging derivative
instruments, credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of
interest rate risk, foreign currency risk and commodity and equity price risk.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the
approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial
stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to
transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Depending on the
division within the Group, credit terms are generally 14 to 30 days from the invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in entities that
the Board has otherwise cleared as being financially sound. Where the Group is unable to ascertain a satisfactory credit risk
profile in relation to a customer or counterparty, the risk may be further managed through insurance, title retention clauses over
goods or obtaining security by way of personal or commercial guarantees over assets of sufficient value which can be claimed
against in the event of any default.
71
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 28. FINANCIAL RISK MANAGEMENT (cont)
The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral
or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as
presented in the statement of financial position. Credit risk also arises through the provision of financial guarantees, as approved
at Board level, given to parties securing the liabilities of certain subsidiaries (refer Note 28 for details).
The Group has approximately 43.9% (2015: 27%) of credit risk with a single counterparty or group of counterparties. Failure or
default of a major counterparty would have a material impact on earnings. Details with respect to credit risk of Trade and Other
Receivables are provided in Note 11(a). MACA carries a credit risk insurance policy. The amount of cover varies on a client by client
basis dependant on the counterparty.
Trade and other receivables that are neither past due or impaired are considered to be of acceptable quality. Aggregates of such
amounts are as detailed in Note 11(a).
Credit risk related to balances held with banks and other financial institutions are only invested with counterparties with a
Standard & Poors rating of at least AA-.
b. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
-
-
-
-
-
-
-
preparing forward looking cashflow analysis in relation to its operational, investing and financing activities;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile;
managing credit risk related to financial assets;
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
The Group’s policy is to ensure that all lease agreements entered into, are over a period that will ensure that adequate cash flows
will be available to meet repayments.
The tables below reflect an undiscounted (except for finance lease liabilities) contractual maturity analysis for financial liabilities.
Financial guarantee liabilities are treated as payable on demand since the Group has no control over the timing of any potential
settlement of the liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest
contractual settlement dates and does not reflect management’s expectations that banking facilities will be rolled forward.
Financial liability and financial asset maturity analysis
Financial liabilities due for payment
Trade and other payables
Finance lease liabilities
Total contractual outflows
Total expected outflows
Financial assets - cash flows realisable
Cash and cash equivalents
Trade, term and loans receivables
Other investments
Total anticipated inflows
Net (outflow)/inflow on financial instruments
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2016
‘000
2015
‘000
2016
‘000
2015
‘000
2016
‘000
2015
‘000
2016
‘000
2015
‘000
32,863
54,736
-
-
39,210
41,032
34,499
35,198
72,073
95,768
34,499
35,198
72,073
95,768
34,499
35,198
115,602 118,533
80,575
86,498
-
-
-
883
851
-
9,878
1,898
196,177 205,031
1,734
11,776
124,104 109,263 (32,765)
-23,422
-
-
-
-
-
-
-
-
-
-
-
32,863
54,736
73,709
76,320
- 106,572 130,966
- 106,572 130,966
- 115,602 118,533
-
-
81,458
96,376
851
1,898
- 197,911 216,807
-
91,339
85,841
Financial assets pledged as collateral. No financial assets have been pledged as security for debt.
72
MACA LIMITED ANNUAL REPORT 2016 The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral
or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as
presented in the statement of financial position. Credit risk also arises through the provision of financial guarantees, as approved
at Board level, given to parties securing the liabilities of certain subsidiaries (refer Note 28 for details).
The Group has approximately 43.9% (2015: 27%) of credit risk with a single counterparty or group of counterparties. Failure or
default of a major counterparty would have a material impact on earnings. Details with respect to credit risk of Trade and Other
Receivables are provided in Note 11(a). MACA carries a credit risk insurance policy. The amount of cover varies on a client by client
Trade and other receivables that are neither past due or impaired are considered to be of acceptable quality. Aggregates of such
Credit risk related to balances held with banks and other financial institutions are only invested with counterparties with a
basis dependant on the counterparty.
amounts are as detailed in Note 11(a).
Standard & Poors rating of at least AA-.
b. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
preparing forward looking cashflow analysis in relation to its operational, investing and financing activities;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile;
managing credit risk related to financial assets;
-
-
-
-
-
-
-
will be available to meet repayments.
settlement of the liabilities.
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
The Group’s policy is to ensure that all lease agreements entered into, are over a period that will ensure that adequate cash flows
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest
contractual settlement dates and does not reflect management’s expectations that banking facilities will be rolled forward.
Financial liability and financial asset maturity analysis
Financial liabilities due for payment
Trade and other payables
Finance lease liabilities
Total contractual outflows
Total expected outflows
Financial assets - cash flows realisable
Cash and cash equivalents
Trade, term and loans receivables
Other investments
Total anticipated inflows
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2016
‘000
2015
‘000
2016
‘000
2015
‘000
2016
‘000
2015
‘000
2016
‘000
2015
‘000
32,863
54,736
39,210
41,032
34,499
35,198
32,863
54,736
73,709
76,320
72,073
95,768
34,499
35,198
- 106,572 130,966
72,073
95,768
34,499
35,198
- 106,572 130,966
-
-
-
-
115,602 118,533
80,575
86,498
-
-
883
851
9,878
1,898
- 115,602 118,533
81,458
96,376
851
1,898
196,177 205,031
1,734
11,776
- 197,911 216,807
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net (outflow)/inflow on financial instruments
124,104 109,263 (32,765)
-23,422
91,339
85,841
Financial assets pledged as collateral. No financial assets have been pledged as security for debt.
NOTE 28. FINANCIAL RISK MANAGEMENT (cont)
NOTE 28. FINANCIAL RISK MANAGEMENT (cont)
NOTES TO THE FINANCIAL STATEMENTS
c. Market Risk
i. Interest rate risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes
in market interest rates and the effective weighted average interest rates on those financial assets and financial liabilities, is as
follows:
Floating Interest
Rate
Fixed Interest Rate
Within 1 Year
1 to 5 Years
Non-interest Bearing
Total
Weighted Average
Effective Interest
Rate
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
%
%
Financial Assets:
Cash
Trade and other receivables
Total Financial Assets
Financial Liabilities:
Finance lease
Trade and other payables
Total Financial Liabilities
ii. Price Risk
115,602
118,533
-
-
115,602
118,533
-
-
-
-
-
-
-
-
-
-
-
-
-
-
115,602
118,533
81,458
96,376
81,458
96,376
81,458
96,376
197,060
214,909
2.09
N/A
2.65
N/A
-
-
-
-
-
-
39,210
43,969
34,499
36,731
-
-
73,709
80,700
-
-
-
-
32,863
54,736
32,863
54,736
4.55
N/A
4.76
N/A
39,210
43,969
34,499
36,731
32,863
54,736
106,572
135,436
The Group is also exposed to securities price risk on investments held for trading or for medium to longer terms. The risk
associated with these investments has been assessed as reasonably not having a significant impact on the Group.
The tables below reflect an undiscounted (except for finance lease liabilities) contractual maturity analysis for financial liabilities.
Financial guarantee liabilities are treated as payable on demand since the Group has no control over the timing of any potential
iii. Foreign exchange risk
The group is exposed to fluctuations in foreign currencies. The currency exposure relates to Brazilian Real and a USD lease facility.
The USD lease facility is offset by cash held in a USD bank account equal to the total of the lease. Brazilian Real is unhedged.
Sensitivity Analysis
The following illustrates sensitivities to the Group’s exposures to changes in interest rates, and equity prices. The table indicates
the impact on how profit and equity values reported at the end of the reporting period would have been affected by changes in
the relevant risk variable that management considers to be reasonably possible.
These sensitivities assume that the movement in a particular variable is independent of the other variables.
Year ended 30 June 2016
+/- 2% in interest rates
+/- 10% in the value of listed investments
+/- 10% in AUD/BRL exchange rate
+/- 10% in AUD/USD exchange rate
Year ended 30 June 2015
+/- 2% on interest rates
+/- 10% in listed investments
+/- 10% in AUD/BRL exchange rate
+/- 10% in AUD/USD exchange rate
Profit
$’000
+/- 1,110
+/- 81
+/- 300
+/- 0
+/- 1,860
+/- 0
+/- 290
+/- 0
Equity
$’000
+/- 1,110
+/- 81
+/- 1,971
+/- 0
+/- 1,860
+/- 190
+/- 1,803
+/- 0
73
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 28. FINANCIAL RISK MANAGEMENT (cont)
Net Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are those amounts at which an asset could be exchanged, or a liability
settled, between knowledgeable, willing parties in an arm’s length transaction. The fair values of financial assets and financial
liabilities approximate the carrying values in the financial statements.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may
have a material impact on the amounts estimated. Where possible, valuation information used to calculate fair value is extracted
from the market, with more reliable information available from markets that are actively traded.
In this regard, fair values for
listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available,
fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a
fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of
the following levels:
-
-
-
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) Level 3.
Included within Level 1 for the current and previous reporting periods are listed investments. The fair value of these assets have
been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs. The Group does not
have other material instruments within the fair value hierarchy.
NOTE 29. PARENT INFORMATION
The following information has been extracted from the books
and records of the parent and has been prepared in
accordance with Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Reserves
(Accumulated losses)/ Retained profits
TOTAL EQUITY
STATEMENT OF FINANCIAL PERFORMANCE
Profit for the year (including interco dividends)
Total comprehensive income
74
200,461
308,027
115,530
307,252
319
357
301,339
604
5,727
307,670
27,747
27,747
255
255
301,539
102
5,356
306,997
93,682
93,682
MACA LIMITED ANNUAL REPORT 2016 NOTE 28. FINANCIAL RISK MANAGEMENT (cont)
Net Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are those amounts at which an asset could be exchanged, or a liability
settled, between knowledgeable, willing parties in an arm’s length transaction. The fair values of financial assets and financial
liabilities approximate the carrying values in the financial statements.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may
have a material impact on the amounts estimated. Where possible, valuation information used to calculate fair value is extracted
from the market, with more reliable information available from markets that are actively traded.
In this regard, fair values for
listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available,
fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a
fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of
the following levels:
-
-
-
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) Level 3.
Included within Level 1 for the current and previous reporting periods are listed investments. The fair value of these assets have
been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs. The Group does not
have other material instruments within the fair value hierarchy.
NOTE 29. PARENT INFORMATION
The following information has been extracted from the books
and records of the parent and has been prepared in
accordance with Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Reserves
TOTAL EQUITY
(Accumulated losses)/ Retained profits
STATEMENT OF FINANCIAL PERFORMANCE
Profit for the year (including interco dividends)
Total comprehensive income
200,461
308,027
115,530
307,252
319
357
301,339
604
5,727
307,670
27,747
27,747
255
255
301,539
102
5,356
306,997
93,682
93,682
NOTES TO THE FINANCIAL STATEMENTS
Note
2016
$’000
2015
$’000
NOTE 29. PARENT INFORMATION (cont)
Guarantees
MACA Limited has entered into guarantees for certain equipment finance facilities in the current financial year, in relation to the
debts entered into by its subsidiaries.
Contingent liabilities
There were no contingent liabilities as at 30 June 2016 (2015: none).
Contractual commitments
Plant and equipment
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
Total
NOTE 30. COMPANY DETAILS
The registered office is:
The principal place of business is:
MACA Limited
45 Division Street
MACA Limited
45 Division Street
Welshpool, Western Australia 6106
Welshpool, Western Australia, 6106
NOTE 31. RELATED PARTY TRANSACTIONS
Key management person and/or related party
Transaction
50,730
34,499
-
85,229
62,488
36,731
-
99,219
2016
2015
$
1,530,560
$
1,119,000
Partnership comprising entities controlled by current director
Mr G.Baker and former directors Mr J.Moore, Mr D.Edwards
& Mr F.Maher.
Kirk Mining Consultants - a company controlled by current
director Mr L. Kirk.
Hensman Properties Pty Ltd - a company controlled by current
director Mr R. Ryan.
Gateway Equipment Parts & Services Pty Ltd - a company
controlled by director Mr G.Baker and former directors
Mr D.Edwards, Mr F.Maher and Mr J.Moore.
Gateway Equipment Parts & Services Pty Ltd - a company
controlled by current director Mr G.Baker and former
directors Mr D.Edwards, Mr F.Maher and Mr J.Moore.
Expense - Rent on Division St Business
premises.
Expense - Mining consulting fees
37,070
119,754
Expense - Consulting fees
74,498
-
Expense - hire of equipment and purchase of
equipment, parts and services.
894,052
1,641,792
Revenue - sale of equipment
320,320
205,130
Alliance Contracting Pty Ltd: Mr G Baker was a 15%
shareholder in Alliance Contracting Pty Ltd.
Acquisition of 100% of equity on 31 January
2016
4,703,253
-
Amounts payable at year end arising from the above
transactions (Receivables Nil)
Gateway Equipment Parts & Services Pty Ltd - a company
controlled by current director Mr G.Baker and former
directors Mr D.Edwards, Mr F.Maher and Mr J.Moore.
Partnership comprising entities controlled by current director
Mr G.Baker and former directors Mr J.Moore, Mr D.Edwards
& Mr F.Maher.
21,330
200,737
-
138,967
75
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 32. RESERVES
a. Financial Assets Reserve
The financial assets reserve records revaluations of available for sale financial assets.
b. General Reserve
The general reserve records funds associated with the acquisition of non-controlling interests of a controlled entity from previous
years.
c. Option Reserve
The option reserve records items recognised as share based payments/expenses on valuation of employee share options or
performance rights.
d. FX Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
NOTE 33. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have
not been early adopted by the Group for the annual reporting period ended 30 June 2016. The Group’s assessment of the impact
of these new or amended Accounting Standards and Interpretations, most relevant to the Group, are set out below.
(i) AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or
after 1 January 2018).
The Standard will be applicable retrospectively and includes revised requirements for the classification and measurement of
financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements
for hedge accounting. The key changes that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit
loss, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading
in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the
ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies
in line with the new hedge accounting requirements of the Standard, the application of such accounting would be largely
prospective. Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments, including hedging activity, it is impracticable at this stage to provide a reasonable estimate of such impact.
(ii) AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 January 2018, as
deferred by AASB 2015-8: Amendments to Australian Accounting Standards – Effective Date of AASB 15).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles-
based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all
contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to
customers and potential customers. The core principle of the Standard is that an entity will recognise revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:
-
-
-
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each prior period
presented per AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors (subject to certain practical expedients
in AASB 15); or recognise the cumulative effect of retrospective application to incomplete contracts on the date of initial
application. There are also enhanced disclosure requirements regarding revenue.
-
76
MACA LIMITED ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS
NOTE 33. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED (cont)
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group’s financial statements, it is
impracticable at this stage to provide a reasonable estimate of such impact.
(iii) AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and
related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be
classified as operating or finance leases. The main changes introduced by the new Standard include:
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12
months of tenure and leases relating to low-value assets);
depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
variable lease payments that depend on an index or a rate are included in the initial measurement of the lease
liability using the index or rate at the commencement date;
by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and
instead account for all components as a lease; and
additional disclosure requirements.
-
-
-
-
-
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line with
AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial
application. Although the directors anticipate that the adoption of AASB 16 will impact the Group's financial statements, it is
impracticable at this stage to provide a reasonable estimate of such impact.
(iv) AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint
Operations (applicable to annual reporting periods beginning on or after 1 January 2016)
This Standard amends AASB 11: Joint Arrangements to require the acquirer of an interest (both initial and additional) in a joint
operation in which the activity constitutes a business, as defined in AASB 3: Business Combinations, to apply all of the principles
on business combinations accounting in AASB 3 and other Australian Accounting Standards except for those principles that conflict
with the guidance in AASB 11; and disclose the information required by AASB 3 and other Australian Accounting Standards for
business combinations. The application of AASB 2014-3 will result in a change in accounting policies for the above described
transactions, which were previously accounted for as acquisitions of assets rather than applying the acquisition method per AASB
3. The transitional provisions require that the Standard should be applied prospectively to acquisitions of interests in joint
operations occurring on or after 1 January 2016. As at 30 June 2016, management is not aware of the existence of any such
arrangements that would impact the financial statements of the entity going forward and as such is not capable of providing a
reasonable estimate at this stage of the impact on initial application of AASB 2014-3.
(v) AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture (applicable to annual reporting periods beginning on or after 1 January 2018, as deferred by AASB
2015-10: Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control over a subsidiary that is
not a “business” as defined in AASB 3 to an associate or joint venture, and requires that:
-
-
-
a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the extent of
the unrelated investor’s interest in that associate or joint venture;
the remaining gain or loss be eliminated against the carrying amount of the investment in that associate or
joint venture; and
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be
recognised only to the extent of the unrelated investor’s interest in the associate or joint venture. The
remaining gain or loss should be eliminated against the carrying amount of the remaining investment.
The application of AASB 2014-10 will result in a change in accounting policies for transactions of loss of control over subsidiaries
(involving an associate or joint venture) that are businesses per AASB 3 for which gains or losses were previously recognised only
to the extent of the unrelated investor’s interest. The transitional provisions require that the Standard should be applied
prospectively to sales or contributions of subsidiaries to associates or joint ventures occurring on or after 1 January 2018.
Although the directors anticipate that the adoption of AASB 2014-10 may have an impact on the Group’s financial statements, it is
impracticable at this stage to provide a reasonable estimate of such impact.
77
MACA LIMITED ANNUAL REPORT 2016 Director’s Declaration
The directors of the company declare that:
1. The financial statements set out on pages 40 to 43 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards which as stated in accounting policy Note 1 to the financial statements, constitutes
explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and
(b) give a true and fair view of the financial position as at 30 June 2016 and of the performance for the year ended on that
date of the company and consolidated group;
2. the Managing Director (acting as Chief Executive Officer) and Chief Finance Officer have each declared that;
(a) the financial records of the Group for the financial year have been properly maintained in accordance with s286 of the
Corporations Act 2001 ;
(b) the financial statements and notes for the financial year comply with the Accounting Standards Board; and
(c) the financial statements and notes for the financial year give a true and fair view;
In the directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors
by:
Chris Tuckwell
Managing Director
Dated at Perth this 30th day of September 2016
78
DIRECTOR’S DECLARATIONfor the year ended 30 June 2016MACA LIMITED ANNUAL REPORT 2016 Director’s Declaration
The directors of the company declare that:
1. The financial statements set out on pages 40 to 43 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards which as stated in accounting policy Note 1 to the financial statements, constitutes
explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and
(b) give a true and fair view of the financial position as at 30 June 2016 and of the performance for the year ended on that
date of the company and consolidated group;
2. the Managing Director (acting as Chief Executive Officer) and Chief Finance Officer have each declared that;
(a) the financial records of the Group for the financial year have been properly maintained in accordance with s286 of the
Corporations Act 2001 ;
(b) the financial statements and notes for the financial year comply with the Accounting Standards Board; and
(c) the financial statements and notes for the financial year give a true and fair view;
In the directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors
become due and payable.
by:
Chris Tuckwell
Managing Director
Independent Audit Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
MACA LIMITED
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace,
WA 6831
T +61 (0)8 9225 5355
F +61 (0)8 9225 6181
www.moorestephenswa.com.au
Report on the Financial Report
We have audited the accompanying financial report of MACA Limited, which comprises the consolidated statement of
financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes
comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the
financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101:
Presentation of Financial Statements that the financial statements comply with International Financial Reporting Standards
(IFRS).
Dated at Perth this 30th day of September 2016
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to
audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
internal control.
of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Liability limited by a scheme approved under Professional Standards Legislation. Moore Stephens ABN 16 874 357 907. An independent member of Moore Stephens International
Limited - members in principal cities throughout the world. The Perth Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.
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INDEPENDENT AUDIT REPORT MACA LIMITED ANNUAL REPORT 2016
INDEPENDENT AUDIT REPORT
Auditor’s Opinion
In our opinion:
a.
the financial report of MACA Limited is in accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the remuneration report as included in the Directors’ Report for the year ended 30 June 2016. The
directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with
s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our
audit conducted in accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion the remuneration report of MACA Limited for the year ended 30 June 2016 complies with s 300A of the
Corporations Act 2001.
Neil Pace
Partner
Moore Stephens
Chartered Accountants
Signed at Perth this 30th day of September 2016
Liability limited by a scheme approved under Professional Standards Legislation. Moore Stephens ABN 16 874 357 907. An independent member of Moore Stephens International
Limited - members in principal cities throughout the world. The Perth Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.
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MACA LIMITED ANNUAL REPORT 2016
Shareholder Information
As at 12 September 2016
1. Numbers of Holders of Equity Securities
a. Ordinary Share Capital
232,872,746 fully paid ordinary shares are held by 2,374 individual shareholders.
b. Listed Options
There are no listed options.
c. Unlisted Options
There are no unlisted options.
d. Distribution of Holders of Equity Securities as of 12 September 2016
Total Holders
Units
% of issued capital
1 - 1,000
1,001 – 5,000
5,001 – 10,000
383 190,817
855
2,597,975
444
3,611,117
10,001 – 100,000
624 17,711,750
100,001 – 999,999,999
68 208,761,087
Total
2,374
232,872,746
e. Substantial Share and Option Holders
The names of the substantial shareholders listed in the Company’s register as at 12 September 2016:
1
2
3
4
MR KENNETH RUDY KAMON
PARADICE INVESTMENT MANAGEMENT PTY LTD
GEMBLUE NOMINEES PTY LTD
MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER
There were no substantial option holders listed in the Company’s register as at 12 September 2016.
0.08
1.12
1.55
7.61
89.65
100.00
Number
17,275,633
16,734,666
12,500,000
12,300,000
f. Other Information
The voting rights attached to ordinary shares are governed by the Constitution of the Company. On a show of hands every person
present who is a Member or representative of a Member shall have one vote on a poll, every Member present in person or by
proxy or by attorney or duly authorised representative shall have one vote for each share held. None of the options have any
voting rights.
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SHAREHOLDER INFORMATIONas at 12 September 2016 MACA LIMITED ANNUAL REPORT 2016 SHAREHOLDER INFORMATION
Shareholder Information (cont)
g. Unmarketable Parcels
As at 12 September 2016, there were 127 holders who held shares that were unmarketable parcels.
2. Twenty Largest Shareholders
Name
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR KENNETH RUDY KAMON
NATIONAL NOMINEES LIMITED
GEMBLUE NOMINEES PTY LTD
Number
Percentage
37,927,285
25,582,825
24,094,718
17,275,633
15,811,307
12,500,000
MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER
12,300,000
MINING & CIVIL MANAGEMENT SERVICES PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
MR JAMES EDWARD MOORE + MS JULIA CATHERINE MOORE
BNP PARIBAS NOMS PTY LTD
BRISPOT NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
8,888,000
6,391,996
6,000,000
5,443,521
3,828,418
3,737,020
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,388,673
BNP PARIBAS NOMINEES PTY LTD
AUST EXECUTOR TRUSTEES LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
ECAPITAL NOMINEES PTY LIMITED
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
MR KENNETH JOSEPH HALL
2,329,339
2,287,987
2,038,704
1,859,878
1,758,933
1,590,352
16.3%
11.0%
10.4%
7.4%
6.8%
5.4%
5.3%
3.8%
2.7%
2.6%
2.3%
1.6%
1.6%
1.5%
1.0%
1.0%
0.9%
0.8%
0.8%
0.7%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
3. Twenty Largest Listed Option Holders
There were no listed options at the date of this report.
4. Restricted Securities
There were no restricted securities at the date of this report.
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MACA LIMITED ANNUAL REPORT 2016 Shareholder Information (cont)
g. Unmarketable Parcels
2. Twenty Largest Shareholders
As at 12 September 2016, there were 127 holders who held shares that were unmarketable parcels.
Name
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR KENNETH RUDY KAMON
NATIONAL NOMINEES LIMITED
GEMBLUE NOMINEES PTY LTD
MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER
12,300,000
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,388,673
MINING & CIVIL MANAGEMENT SERVICES PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
MR JAMES EDWARD MOORE + MS JULIA CATHERINE MOORE
BNP PARIBAS NOMS PTY LTD
BRISPOT NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
AUST EXECUTOR TRUSTEES LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
ECAPITAL NOMINEES PTY LIMITED
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
MR KENNETH JOSEPH HALL
Number
Percentage
37,927,285
25,582,825
24,094,718
17,275,633
15,811,307
12,500,000
8,888,000
6,391,996
6,000,000
5,443,521
3,828,418
3,737,020
2,329,339
2,287,987
2,038,704
1,859,878
1,758,933
1,590,352
16.3%
11.0%
10.4%
7.4%
6.8%
5.4%
5.3%
3.8%
2.7%
2.6%
2.3%
1.6%
1.6%
1.5%
1.0%
1.0%
0.9%
0.8%
0.8%
0.7%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
3. Twenty Largest Listed Option Holders
There were no listed options at the date of this report.
4. Restricted Securities
There were no restricted securities at the date of this report.
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MACA LIMITED ANNUAL REPORT 2016 Standing from left to right:
Peter Gilford Company Secretary, Robert Ryan Non-Executive Director, Geoff Baker Operations Director,
Andrew Edwards Non-Executive Chairman, Chris Tuckwell Managing Director, Linton Kirk Non-Executive Director
CORPORATE DIRECTORY
MACA LIMITED
ABN 42 144 745 782
DIRECTORS
Andrew Edwards
Non-Executive Chairman
Chris Tuckwell
Managing Director
Geoff Baker
Operations Director
Linton Kirk
Non-Executive Director
Robert Ryan
Non-Executive Director
Peter Gilford
Company Secretary
SHARE REGISTRY
Computershare Investor Services Pty Ltd
11/122 St Georges Terrace
PERTH WA 6000
STOCK EXCHANGE
LISTINGS
MACA Limited shares are listed
on the Australian Securities Exchange
ASX Code : MLD
WEBSITE ADDRESS
www.maca.net.au
REGISTERED OFFICE
45 Division Street
WELSHPOOL WA 6106
Telephone (08) 6242 2600
(08) 6242 2677
Facsimile
SOLICITORS
Steinepreis Paganin
Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
AUDITORS
Moore Stephens
Exchange Plaza
2 The Esplanade
PERTH WA 6000
Designed by Dash Digital
MACA LIMITED ANNUAL REPORT 2016
MACA Limited and its Controlled Entities
ABN 42 144 745 782
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2016
ANNUAL REPORT