ANNUAL REPORT
2017
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 /
Chief Executive Officer
Geoff Baker
Executive Director
Linton Kirk
Non-executive Director
Robert Ryan
Non-executive Director
Peter Gilford
Company Secretary
MACA LIMITED ANNUAL REPORT 2017
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 Tower
2 The Esplanade
PERTH WA 6000
CONTENTS
Corporate Directory
About MACA
Chairman’s Address
Managing Director’s Review of Operations
Directors’ Report
Remuneration Report - Audited
Auditor’s Independence Declaration
Corporate Governance Statement
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
19
33
34
40
41
42
43
44
77
78
84
MACA LIMITED ANNUAL REPORT 2017
11
MACA LIMITED ANNUAL REPORT 2017 MACA IS A SUCCESSFUL INTEGRATED SERVICES
CONTRACTOR WITH OPERATIONS SPANNING
AUSTRALIA AND BRAZIL. WITH A TEAM OF OVER
1,540 HIGHLY SKILLED AND DEDICATED PEOPLE
WE PROVIDE TAILORED SOLUTIONS TO SUIT THE
NEEDS OF OUR CLIENTS.
WE SPECIALISE IN:
MINING
CIVIL CONSTRUCTION
INFRASTRUCTURE, AND
MINERAL PROCESSING EQUIPMENT
Mining – providing open pit contracting services
including drilling and blasting, and loading and hauling
across a range of commodities in Australia and Brazil.
Civil Construction and Infrastructure – through our
dedicated civil construction and asset maintenance
businesses, we provide a broad range of civil
infrastructure and maintenance services to government
and private organisations across Australia.
Mineral Processing Equipment – delivering small to
large scale structural, mechanical and piping (SMP)
projects, new and refurbished plant & equipment and
consumables to the Mineral Processing sector of the
resources industry.
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 growth based on
its solid financial and operational capacity. Since listing
in November 2010, MACA has paid a total of $1.25 per
share in dividends to shareholders.
2
ABOUT MACAMACA LIMITED ANNUAL REPORT 2017 CHAIRMAN’S
ADDRESS
AS ANTICIPATED IN LAST YEAR’S ADDRESS,
YOUR COMPANY ACHIEVED SOLID GROWTH IN
2017 ON THE BACK OF AN IMPROVED, BUT STILL
CHALLENGING, MINING AND CIVIL SECTORS. THIS
UPWARD TREND IS EXPECTED TO CONTINUE INTO
2018 AND PROVIDE THE CATALYST FOR FURTHER
GROWTH IN REVENUE AND EARNINGS.
I am pleased to report that MACA delivered a full
year net profit after tax of $32.1 million. This is 33%
up on the prior year, a solid result helped by higher
mining activity but nonetheless in a demanding
operating environment.
Your Directors have declared a final dividend of 4.5
cents per share taking the total dividends for the
year to 9.0 cents fully franked. This represents a 65%
dividend payout ratio which is consistent with the
Company’s targeted guideline.
MACA’s relentless focus on business improvement
and exceeding client expectations has been
instrumental in both maintaining our existing
client base and winning new work in the face of
considerable competition. This year we have been
awarded mining works for Ramelius Resources at the
Mount Magnet gold project, for Northern Minerals
Browns Range heavy rare earth minerals project and
subsequent to year end awarded the Pligangoora
Lithium-Tantalum project for Pilbara Minerals. This
work will enable MACA to give continued employment
for personnel relocating from completed projects
and better utilization of idle assets coming off
completed works.
The Contractor Collaboration Agreement with Atlas
Iron and other parties on the Abydos and Wodgina
iron ore projects has essentially come to a conclusion
and has rewarded MACA over that period through the
ability to earn a reasonable margin and a satisfactory
return for the risk taken on as part of the Agreement.
The 2017 financial result has been achieved
after making further investment in our Civil and
Infrastructure businesses. This has included
establishing a Structural, Mechanical and Piping
offering in the mining sector via the acquisition of
a controlling interest in Interquip Pty Ltd, as well
as purchasing the remaining 25% of our Services
South East business. These businesses have not
performed to expectations in 2017 with their results
also impacted by integration and restructuring costs.
Nevertheless, the Company remains committed
to its diversification strategy to include Civil and
Infrastructure activities, and believes it has a sound
platform from which to generate a turnaround in
the financial performance in 2018. In this regard,
the Civil division was awarded one of the largest
civil earthworks projects tendered during the year
within Western Australia, the Gruyere Gold project
civil works, which commenced in May 2017 for an
expected duration of approximately 12 months.
As previously announced, MACA is expecting revenue
to increase to $560 million in FY2018, of which in
excess of 70% is already contracted. The Company
has work in hand in excess of $1.1 billion and a strong
pipeline of opportunities.
Winning some of these opportunities will require
investment in additional mining fleet and working
capital. Consequently, in September 2017 the
Company raised a further $60 million through a
share placement to institutional and professional
investors. Combined with its net cash (after deducting
interest bearing debt) of $64 million as at 30 June
2017, MACA is strongly positioned to pursue organic
growth opportunities and potential acquisitions in an
improving market.
I would like to once again especially thank our
executive leadership team and all staff for their
hard work, and to my fellow Directors for their
wise counsel.
The Board is confident that your Company is well
placed to benefit from the expected uplift in activity
in the sectors in which it operates and in so doing
deliver strong returns to our shareholders. Thank you
for your continuing support.
Andrew Edwards
Chairman
3
MACA LIMITED ANNUAL REPORT 2017 MANAGING DIRECTOR’S
REVIEW OF OPERATIONS
Dear Shareholders
On this, the 15th year since incorporation of MACA and
our 7th 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 continued
strength of MACA’s business, despite what has been a
demanding operating environment for the mining and civil
sectors. Whilst the result is pleasing, it has been impacted
by investment of both time and resources in existing
business divisions and integration of acquisitions. The
Company believes this investment will greatly assist in
providing a robust platform to support sustained growth in
line with our Corporate Strategy.
Mining - Australia
Operational activities have continued to grow in gold, with
MACA commencing new contracts with Ramelius Resources
at Mount Magnet and for Northern Minerals Browns Range
heavy rare earth minerals project.
MACA continues to perform well across its broad spectrum
of projects in the mining sector. During the period MACA
continued operations at Rosemont, Garden Well and
Moolart Well for Regis Resources, Abydos and Mt Dove for
Atlas Iron, Central Murchison for MetalsX and Matilda for
Blackham Resources.
Operations at Mount Monger for Silver Lake Resources,
Golden Grove for MMG Mining, Deflector for Doray and
Wodgina for Atlas Iron were completed during the year.
Subsequent to year end operations commenced on our
mining services contract for Ramelius Resources at its
Mount Magnet project and the works for Central Murchison
for MetalsX were completed.
The commencement of the Mount Magnet project for
Ramelius and award of mining services at the Pilgangoora
project for Pilbara Minerals in early September 2017 will
enable MACA to fully utilise our mining equipment and
importantly continued employment for personnel relocating
from completed projects.
International
Both projects in Brazil for Beadell Resources’ Tucano
gold project and Avanco’s copper project at Antas
continue to perform satisfactorily given the challenges of
remoteness, and the Company continues to look for further
opportunities in Brazil.
Civil and Infrastructure
In the first half of FY 2017 MACA purchased the remaining
25% of the Services South East business and rebranded it
MACA Infrastructure. MACA was awarded a Road and Asset
Maintenance contract with Main Roads in the Kimberley
Region in February of 2017 in line with our strategy of
growing the Infrastructure division.
Further to this the Civil division has commenced the
Gruyere Gold project Site Bulk Earthworks, Access Roads,
Airstrip and Tailings Storage Facility works.
Mineral Processing
In December 2016 MACA purchased 60% of Interquip, a
privately owned business providing end to end processing
solutions in Western Australia and the Northern Territory.
The business has since been rebranded MACA Interquip.
The acquisition has enabled MACA to establish a Structural,
Mechanical and Piping (SMP) offering within the mining
industry. The solid pipeline of opportunities supports
MACA’s expectations of revenue and profit growth.
A strong culture and commitment to the MACA brand has
contributed to the successful delivery of quality projects
and financial performance. The ongoing commitment to
training through our Leadership Development Program,
Engineering Graduate and Apprentice Programs continues
to ensure we develop skilled MACA employees. MACA
highly values its diligent and loyal employees and the
Board would like to extend its thanks to them and all of our
stakeholders who remain an essential part of our success.
We remain committed to providing all of our employees and
contractors with a safe place to work and we continually
strive to ensure that safety remains a core focus within
our business.
4
MACA LIMITED ANNUAL REPORT 2017 FINANCIAL AND OPERATING
PERFORMANCE
OPERATING
REVENUE OF
$497.9 MILLION
EBITDA OF
$99.2 MILLION
NET PROFIT AFTER
TAX ATTRIBUTABLE
TO MEMBERS OF
$32.1 MILLION
NET OPERATING
CASH FLOW OF
$68.1 MILLION
FINAL DIVIDEND
OF 4.5 CENTS
PER SHARE
(FULLY FRANKED)
(TOTAL FOR FY17 OF 9.0 CPS)
STRONG BALANCE
SHEET WITH A NET
CASH POSITION OF
$64.2 MILLION
EXCLUDING SEPTEMBER 2017
CAPITAL RAISING
5
MACA LIMITED ANNUAL REPORT 2017 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 2017
30 June 2016
Movement
$497.9M
$99.2M
$46.4M
$44.1M
$32.1M
$1,130M
$68.1M
13.7 cents
9.0 cents
$431.4M
$90.7M
$34.3M
$33.6M
$24.2M
$1,160M
$64.1M
10.4 cents
8.5 cents
15%
9%
35%
31%
33%
(3)%
6%
32%
6%
Group revenue increased overall with growth in the core
mining segment of 6%, and a revenue increase in the
civil, infrastructure and mineral processing equipment
businesses of 236%.
The after tax profit has increased to $32.1 million for the
year ended 30 June 2017. The Civil, Infrastructure and
Mineral Processing businesses recorded a loss for the full
year of $4.9 million.
EBITDA (Earnings before interest, tax, depreciation and
amortisation) was $99.2 million (20 % of revenue) for the
period ending 30 June 2017, a solid result.
OPERATING CASH FLOW AND
CAPITAL EXPENDITURE
Operating cash flow for the 12 months ending 30 June 2017
was $68.1 million.
Capital expenditure for the financial year was $31.5 million
(excluding $5.7 million in acquisitions) relating to plant
and equipment associated with sustaining capital and
the commencement of a mining services project. Capital
equipment purchases were funded by a combination of cash
and equipment finance contracts. The Company did not
enter into any off balance sheet financing arrangements.
DIVIDEND
On the 28th August 2017, the board of MACA Limited
declared a final dividend for the financial year ending 2017
of 4.5 cents per share. This payout is consistent with our
targeted guideline and the Board’s objective to provide a
return to shareholders whilst still retaining the financial
capacity to support our growth plans.
The total dividend paid during the year was $21.0 million
(2016: $26.8 million).
BALANCE SHEET AND GEARING
With an increase in revenue and assets employed, the
Group as at 30 June 2017 remains in a strong financial
position with a net cash position of $64.2 million and with
cash on hand of $112.0 million.
ORDER BOOK
As at 30 June 2017 the Company had work-in-hand of
$1,130 million, and an average mining contract tenure of
36 months.
6
MACA LIMITED ANNUAL REPORT 2017 MANAGING DIRECTOR’S REVIEW OF OPERATIONS
Civil and Infrastructure
The civil and infrastructure business in Western Australia
has maintained its strong relationship with Main Roads
by completing a number of road-works projects as the
principal contractor during the period, and being awarded
a Road and Asset Maintenance contract in the Kimberley
region in February of 2017.
MACA also commenced the Gruyere Gold project site bulk
earthworks, access roads, airstrip and tailings storage
facility (TSF) works in June 2017.
In addition, MACA Civil has partnered with a local
Pilbara Aboriginal company, Hicks Civil & Mining, to
form Marniyarra Mining and Civil in the Karratha region
of Western Australia. This operating company is 50%
owned by MACA Civil and is actively promoting aboriginal
employment and development in the Pilbara.
The civil and infrastructure business in Victoria has
maintained its strong relationships with VicRoads and
Baw Baw Shire Council plus other local government
clients with continuing long term Road and Asset
Maintenance contracts.
In the first half of 2017 MACA purchased the remaining 25%
of the Services South East business and rebranded it to
MACA Infrastructure.
MACA Civil achieved re-certification in the National
pre-qualification system to R4 (restricted) 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.
OPERATIONS
Mining and Crushing
The division’s revenue of $424 million represented
85% of the total Group revenue and was derived from
continuing operations, the completion of 2 projects and the
commencement of 3 new projects during the period.
Mining and crushing contracts by sector from
July 2016 include:
Gold
f Mining services
Commenced
Continued
Completed
Iron Ore
Ramelius Resources at Mount
Magnet in June 2017
Regis Resources at Moolart Well
Regis Resources at Garden Well
Regis Resources at Rosemont
Blackham Resources at Matilda
Metals X at Central Murchison
Beadell Resources at Tucano
(Brazil, South America)
Silver Lake Resources at Mount
Monger in September 2016
Doray Minerals at Andy Well in
February 2017
f Mining services and crushing and screening services
Commenced
Atlas Iron at Mt Dove in June 2017
(crushing services only)
Continued
Atlas Iron at Abydos
Completed
Atlas Iron at Wodgina in May 2017
(mining services only)
Copper
f Mining services
Continued
Other Minerals
f Mining services
Commenced
Awarded
subsequent to
year end
Avanco Resources at Antas
(Brazil, South America)
Northern Minerals at Browns Range
in June 2017
Pilbara Minerals at Pilgangoora in
September 2017
Mining and crushing contracts by sector completed
subsequent to June 2017 include:
Metals X at Central Murchison in August 2017
7
MACA LIMITED ANNUAL REPORT 2017 Longer term Civil and Infrastructure contracts by sector
from July 2016 include:
MACA Civil
Public Sector
Main Roads Department of Western Australia
Collie Lake King Road
Construct Only project - Works include all earthworks,
pavements and seal work (completed in October 2016)
Fauntleroy / Great Eastern Highway intersection
and approaches
Construct Only project - Works include all earthworks,
pavements and seal work
(completed in December 2016)
Private Sector
Gold Road Earthworks (commenced in June 2017 and due
for completion in June 2018)
Site bulk earthworks, access roads, airstrip and tailings
storage facility (TSF) work
Browns Range bulk earthworks
Bulk earthworks used to construct a tailings storage
facility (TSF), airstrip, process plant site and internal
access roads
MACA Infrastructure
Public Sector
Victoria
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 2017 MANAGING DIRECTOR’S REVIEW OF OPERATIONS
Western Australia
Kimberley Road Maintenance
Provision of routine road maintenance services for the
rural road network including sealed and unsealed roads
- ongoing to January 2019
MACA Interquip
In December 2016 MACA purchased 60% of Interquip, a
privately owned business providing end to end processing
solutions in Western Australia and the Northern Territory.
The acquisition has enabled MACA to establish a Structural,
Mechanical and Piping (SMP) offering within the mining
industry.
Major projects to date are:
Newmont Mining - Tanami - Northern Territory
Supply and Install SMP, Electrical and Instrumentation
on a new plant upgrade
Sandfire Resources - DeGrussa - Western Australia
Paste fill plant upgrade works
HEALTH, SAFETY AND ENVIRONMENT
MACA believes that strong leadership in safety is critical to
our business success and underpins our philosophy that
each employee has the right to return home every day safe
and healthy in the same way they began the day.
Our ongoing focus on the development of new safety
standard initiatives continues to be a key business driver
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 our employees, contractors, clients
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 to June 2017 and other safety
metrics remain well below industry benchmarks.
Efforts this year have resulted in a reduction in the number
of injuries with the Total Recordable Injury Frequency
Rate (TRIFR) reducing by 34% to 7.8 per million
man-hours worked.
QUALITY MANAGEMENT
MACA Mining and MACA Civil secured re-certification and
MACA Infrastructure secured certification until April 2018
for their 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 personnel have increased
mainly through the acquisition of businesses within the last
year, and the Brazilian operations have remained stable.
The number of employees and contractors within the Group
workforce worldwide stand at 1,540 - an increase of 29% at
the corresponding period last year.
The Group retains a core of highly experienced long serving
employees (+ 5 years’ and 10 years’ service) that form the
backbone of the Company which it relies on to concentrate
our efforts to remain efficient and competitive. Imperative
to our business success is the skills and experience of our
people and their ability to work in a safe and productive
manner. Our hands on, CAN DO approach is what makes
us different to other contractors. Central to our success is
our people, focus on business improvement and exceeding
client expectations.
MACA continues to implement a number of Learning and
Development programs to enhance the performance and
engagement of our people. Leadership development
programs, apprenticeships, traineeships, mining and civil
graduate programs, and the ongoing upskilling of our
people ensures we are able to successfully meet future
business challenges.
MACA continues to adopt a proactive approach to promote
and foster workplace diversity and equal opportunity for
our people. We take a zero tolerance position to any form
of workplace discrimination and harassment. Policies and
programs are in place to deliver on our commitment to
diversity, equal opportunity and harassment.
INDIGENOUS EMPLOYMENT
MACA is fully committed to providing direct employment
to Indigenous Australians. Our Indigenous Employment
Program is centered around affording Indigenous
Australians equal opportunity to access jobs, skills
development and career prospects. We aim to play our
part in enhancing the lives of Indigenous Australians
where we can.
9
MACA LIMITED ANNUAL REPORT 2017 MANAGING DIRECTOR’S REVIEW
OF OPERATIONS
COMMUNITY
MACA, with the support of its employees, suppliers
and other stakeholders maintains a strong link to the
jurisdictions and communities in which it operates. The
Company actively contributes to and supports many
regional and local groups across a diverse range of
activities as part of our focus on 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 continues in the current year with MACA
employees and stakeholders united in their efforts to raise
in excess of $1.3M with around 270 participating riders for
this year’s event – an event that we have been involved with
for 6 years now.
During the year MACA continued its long-term association
with the Hawaiian Ride for Youth raising funds and
awareness for mental health, and 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 (WASO).
In closing, MACA highly values its hard working, dedicated
and loyal employees. The Board would like to extend its
thanks to them and all of our stakeholders who remain an
integral part of our success.
Chris Tuckwell
Managing Director, CEO
10
MACA LIMITED ANNUAL REPORT 2017 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 2017.
DIRECTORS
The following persons were directors of MACA Limited during the whole year and up to the date of this report:
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)
PRINCIPAL ACTIVITIES AND ANY SIGNIFICANT CHANGES IN NATURE
The principal activities of the Group during the financial year were in three businesses and two geographical segments being
the provision of contract mining services, civil contracting services and mineral processing services throughout Australia, and
contract mining services in Brazil, South America.
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 per ordinary share
Final dividend declared and paid per ordinary share
The final fully franked dividend was paid on 22nd September 2017.
DIVIDEND REINVESTMENT PLAN
There is no dividend reinvestment plan in place.
2017
cps
4.5
4.5
2016
cps
4.0
4.5
11
DIRECTORS’ REPORT MACA LIMITED ANNUAL REPORT 2017 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
FY2017
$’M
FY2016
$’M
Change
$497.9
$99.2
$46.4
$44.1
$32.1
$1,130
$68.1
9 cents
13.7 cents
$431.4
$90.7
$34.3
$33.6
$24.2
$1,160
$64.1
8.5 cents
10.4 cents
15%
9%
35%
31%
33%
2%
6%
32%
6%
ENVIRONMENTAL ISSUES
MACA 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:
• Interquip Pty Ltd (and its subsidiaries)
EVENTS SUBSEQUENT TO BALANCE DATE
After balance date events include the following:
• MACA has been awarded the mining services contract for Pilbara Minerals Limited at the Pilgangoora
Lithium-Tantalum project
• The Company raised a further $60.2 million through a share placement to institutional and professional investors in
early September 2017
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 2017 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 a state councillor of that Institute.
Current directorships:
Mr Edwards has been a board member of MACA Limited since 10th November 2010.
Mr Edwards is currently a Non-executive Director of MMA Offshore Limited (appointed
December 2009) and Nido Petroleum Limited (appointed December 2009) (delisted from
ASX June 2017).
Former directorships
(in last 3 years):
Special responsibilities:
Nil
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 32 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:
Interest in Performance
612,500
712,991
Rights:
Name:
Title:
74,064 vested not yet issued
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 for the business.
Mr Baker has worked in the sector for 38 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
(in last 3 years):
Nil
Special responsibilities:
Mr Baker is currently a member of the Board’s Risk Committee.
Interest in shares:
Interest in Performance
12,500,000
579,292
Rights:
13
MACA LIMITED ANNUAL REPORT 2017
Name:
Title:
Mr Linton Kirk
Independent Non-executive Director
Qualifications:
B Eng (Mining) FAusIMM (CP) GAICD
Experience and expertise:
Mr Kirk has over 35 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 Board’s 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:
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
(in last 3 years):
Special responsibilities:
Nil
Mr Ryan is currently the Chair of the Board’s 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 16 year’s 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 2017
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 2017 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
6
6
6
6
6
6
6
6
6
6
2
-
-
2
2
2
-
-
2
2
2
-
-
2
2
2
-
-
2
2
3
3
3
3
3
3
3
3
3
3
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 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 2017 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 33 and
forms part of the directors’ report for the financial year ended 30 June 2017.
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 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 industry sectors in which we operate encounters 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 2017 DIRECTORS’ REPORT
ORDER BOOK RISK
Generally in the mining industry, most contracts can be terminated for convenience by the client at short notice and without
penalty, with the client 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.
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 and change in control provisions, and historic liabilities and integration 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 2017 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:
• public liability risk incurred maintaining road assets requiring identified defects to be closed out within a
specified time frame
• 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 country specific adverse 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
Whilst market conditions have remained challenging in Western Australia, we are experiencing a noticeable improvement in
both mining activity and investor sentiment towards the sector. MACA believes it is well placed to benefit from the continuation
of this recovery.
The Company similarly expects to benefit from its recent investments in its expanded civil and infrastructure operations in
Victoria through increased spending on road and asset management and maintenance services within the private sector and its
acquisition of an end to end mineral processing solution provider.
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.
MACA has a strong work in hand position at $1.13 billion as at 30 June 2017 and a solid balance sheet to facilitate further
growth in the business. At this stage, the Company expects revenue for FY2018 to increase from the current year to be
approximately $560 million.
MACA continues to selectively identify opportunities and is well positioned to deliver growth of its quality services to clients in
the sectors in which it operates.
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
2017 Executive remuneration
Outlines the 2017 remuneration framework and changes to remuneration
framework and improvements
plans.
Company performance and the
The outcomes of the key business metrics and hurdles that are used for
link to remuneration
measuring variable pay outcomes.
Executive remuneration
outcomes
Provides Chief Executive officer remuneration, Short Term Incentive (STI) and
Long Term Incentive (LTI) Plan details and Executive remuneration outcomes
Section 6
Executive contracts
Appointments and notice periods for current and former Key Management
for the year.
Personnel.
Section 7
Non-executive Directors’ fees
Provides detail regarding the fees paid to Non-executive Directors.
This remuneration Report forms part of the Directors’ Report for 2017 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
1 Introduction
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.
Period in position during the year
Person
Position
Directors - Non-executive
Andrew Edwards
Non-executive Chairman
Linton Kirk
Robert Ryan
Directors - Executive
Non-executive Director
Non-executive Director
Chris Tuckwell
Chief Executive Officer / Managing Director
Operations Director
Geoff Baker
Executives
Tim Gooch
Mitch Wallace
Mark Davidovic
David Greig
David Kent
Peter Gilford
Former KMP
General Manager - Mining
General Manager - Brazil Operations
General Manager - Civil
General Manager - Business Development
General Manager - Corporate Services
Chief Financial Officer / Company Secretary
Full year
Appointed effective 20th February 2017
Appointed effective 18th July 2016
Appointed effective 1st November 2016
Maurice Dessauvagie
General Manager - Civil
Replaced effective 20th February 2017
Full year
Full Year
Full Year
Full year
Full year
Full year
Full year
18
DIRECTORS’ REPORTMACA LIMITED ANNUAL REPORT 2017 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
2017 Executive remuneration
framework and improvements
Outlines the 2017 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 2017 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
Andrew Edwards
Non-executive Chairman
Linton Kirk
Robert Ryan
Directors - Executive
Non-executive Director
Non-executive Director
Chris Tuckwell
Chief Executive Officer / Managing Director
Geoff Baker
Executives
Tim Gooch
Mitch Wallace
Mark Davidovic
David Greig
David Kent
Peter Gilford
Former KMP
Operations Director
General Manager - Mining
General Manager - Brazil Operations
General Manager - Civil
General Manager - Business Development
General Manager - Corporate Services
Chief Financial Officer / Company Secretary
Period in position during the year
Full year
Full Year
Full Year
Full year
Full year
Full year
Full year
Appointed effective 20th February 2017
Appointed effective 18th July 2016
Appointed effective 1st November 2016
Full year
Maurice Dessauvagie
General Manager - Civil
Replaced effective 20th February 2017
19
REMUNERATION REPORT - AUDITED MACA LIMITED ANNUAL REPORT 2017 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).
objectives.
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
continued until 31 December 2016. From January 1 2017 there has been an uplift to all executive salaries of 3% to the reduced
salary levels in line with CPI.
3 2017 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.
Total fixed remuneration (TFR)
Short-term incentive (STI)
Long-term incentive (LTI)
Remuneration Framework
◦
◦
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 - company
Earnings per share
Non-financial metrics comprise some or all
of:
◦
◦
◦
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 Ordinaries
Accumulation Index (XSOAI) measured
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
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
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 Board
believes these KPIs are aligned to Shareholder wealth and returns to investors.
2017
2016
2015
2014
2013
2012
Reported net profit/(loss)
attributable to equity holders
31.2
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)
Total shareholder return (TSR
%) 1
3 year Annual Compound TSR
11.6
13.7
0
7.8
4.5
4.5
-
165
38.1
6.6
24.2
9.5
10.4
0
13.7
4.0
4.5
-
126
74.6
8
54.4
21.7
24
0
14.8
7
7.5
25
77
(37.0)
(9.0)
55.4
22.5
30.3
0
15.3
6.5
7.5
30
185
28.2
10.3
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)
1 All dividends in the TSR (Total Shareholder Return) calculation are on a 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 18 months to December 2016 and were reviewed at that
time. A decision was made to increase these salaries by 3% of the reduced base levels as of January 2017. 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) is $664,630 per annum inclusive of superannuation plus the use of a company motor vehicle.
-
-
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 40% for key financial KPI’s, 30% for
safety KPI’s and 30% for personal KPI’s. The financial KPIs comprise Net Profit after Tax and Earnings per Share growth. The
safety KPIs are based on the Long Term Injury Frequency Rate (LTIFR) and the Total Recordable Injury Frequency Rate (TRIFR).
There was an STI payable for Mr Tuckwell for 2017 as some KPI's were met - 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 2016 Annual General Meeting the Board sought and received approval for the grant of
268,254 Performance Rights pursuant to the Company’s Performance Rights Plan (PRP). Subject to the relevant performance
hurdles being met, these may vest in June 2019.
20
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017 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 Board
believes these KPIs are aligned to Shareholder wealth and returns to investors.
2017
2016
2015
2014
2013
2012
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)
Total shareholder return (TSR
%) 1
3 year Annual Compound TSR
31.2
11.6
13.7
0
7.8
4.5
4.5
-
165
38.1
6.6
24.2
9.5
10.4
0
13.7
4.0
4.5
-
126
74.6
8
54.4
21.7
24
0
14.8
7
7.5
25
77
(37.0)
(9.0)
55.4
22.5
30.3
0
15.3
6.5
7.5
30
185
28.2
10.3
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)
-
1 All dividends in the TSR (Total Shareholder Return) calculation are on a 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 18 months to December 2016 and were reviewed at that
time. A decision was made to increase these salaries by 3% of the reduced base levels as of January 2017. 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) is $664,630 per annum inclusive of superannuation plus the use of a company motor vehicle.
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 40% for key financial KPI’s, 30% for
safety KPI’s and 30% for personal KPI’s. The financial KPIs comprise Net Profit after Tax and Earnings per Share growth. The
safety KPIs are based on the Long Term Injury Frequency Rate (LTIFR) and the Total Recordable Injury Frequency Rate (TRIFR).
There was an STI payable for Mr Tuckwell for 2017 as some KPI's were met - 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 2016 Annual General Meeting the Board sought and received approval for the grant of
268,254 Performance Rights pursuant to the Company’s Performance Rights Plan (PRP). Subject to the relevant performance
hurdles being met, these may vest in June 2019.
21
MACA LIMITED ANNUAL REPORT 2017 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
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.
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%
2017: During the financial year the STI plan was suspended for all executives to December
2016. The STI plan was reinstated as of January 2017.
CEO
Executive Directors
Other Executive KMP
% of TFR paid on Target Achievement
12.5% (6 months)
12.5% (6 months)
7.5% (6 months)
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.
2017: KPIs are set for the Group, and Business division (where relevant) – the KPI Program was
put on hold for all Executives during the financial year to December 2016 and was then
reinstated as of January 2017.
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), 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.
Setting of KPIs
2016: Suspended.
2017: Financial and safety targets are all agreed with the Board and personal KPIs are set in
consultation with the relevant Executive.
Assessment of KPIs
2016: Suspended.
2017: Performance is measured quantitatively against key targets over the 6 month period at
year end.
Trigger for payment
2016: Suspended.
Cessation of employment
2016: Suspended.
2017: 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.
2017: 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.
22
5.4 STI Outcomes
The outcomes of the STI for Executives and KMP is outlined in the table below
Chris Tuckwell
Managing Director / Chief Executive Officer
Geoff Baker
Operations Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil Operations
Mark Davidovic
General Manager - Civil and Infrastructure
General Manager - Business Development
General Manager - Corporate Services
David Greig
David Kent
Peter Gilford
Chief Financial Officer / Company Secretary
Former KMP
Maurice Dessauvagie
$
70,671
56,142
28,211
29,062
11,256
26,536
26,536
24,234
Replaced as General Manager - Civil and Infrastructure effective 20th February 2017.
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 Executive 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.
2016: The LTI is a component of ‘at risk’ pay offered to Executive 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.
Executive Directors
Other Executive KMP
2017: No changes
CEO
CEO
Executive Directors
Other Executive KMP
% of TFR applied in LTI
% of TFR applied in LTI
25%
25%
20%
25%
25%
20%
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017
5.4 STI Outcomes
The outcomes of the STI for Executives and KMP is outlined in the table below
REMUNERATION REPORT - AUDITED
Chris Tuckwell
Managing Director / Chief Executive Officer
Geoff Baker
Operations Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil Operations
Mark Davidovic
General Manager - Civil and Infrastructure
David Greig
General Manager - Business Development
David Kent
General Manager - Corporate Services
Peter Gilford
Chief Financial Officer / Company Secretary
Former KMP
Maurice Dessauvagie
$
70,671
56,142
28,211
29,062
11,256
26,536
26,536
24,234
Replaced as General Manager - Civil and Infrastructure effective 20th February 2017.
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 Executive 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.
2016: The LTI is a component of ‘at risk’ pay offered to Executive 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
2017: No changes
CEO
Executive Directors
Other Executive KMP
% of TFR applied in LTI
25%
25%
20%
% of TFR applied in LTI
25%
25%
20%
23
MACA LIMITED ANNUAL REPORT 2017
LTI Plan (cont)
Performance conditions
TSR Comparator Group
Assessment of KPIs
Trigger for vesting
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.
2017: No changes
2016: Assessed 100% against TSR using a benchmark index namely the S&P/ASX Small
Ordinaries Accumulation Index (XSOAI).
2017: No changes.
2016: Performance is measured quantitatively and progress against key targets reported at full
year.
2017: No changes.
2016: Assessed 100% against TSR using a benchmark index namely the S&P/ASX Small
Ordinaries Accumulation Index (XSOAI). The Board has discretion to not approve the vesting of
the rights if the TSR is negative.
2017: No changes.
Cessation of employment
2016: LTI forfeited if an Executive resigns or is terminated before the payment date. In
exceptional circumstances this may be reviewed by the Board.
2017: No changes.
5.6 Unvested entitlements
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 2017 no
options were held by KMP.
5.8 KMP performance rights
As at 30 June 2017, MACA had 1,486,053 performance rights issued and outstanding. These rights were granted during the 2017
financial year to KMP under the Group's Performance Rights Plan and, subject to the achievement of designated performance
hurdles, will vest in June 2018.
During the 2017 financial year a further 1,196,083 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 407,770 performance rights were
forfeited. Subject to the achievement of designated performance hurdles, these performance rights will vest in June 2019
(2016:1,955,782). On 16 November 2016 shareholders approved the issue of 268,254 performance rights to the Managing Director
Mr Chris Tuckwell and 215,476 performance rights to the Operations Director Mr Geoff Baker. As at 30 June 2017 there were
2,528,307 performance rights outstanding of which 1,486,053 had been issued.
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:
Balance at beginning of
Granted as
Exercised
Other
Balance at
Vested and
Vested and
Unvested at
year
remuneration during
during the
changes
end of year
exercisable
un-
end of year
the year
year
during the
exercisable
year
628,017
268,254
- 896,271
(74,064)
(109,216)
712,991
363,816
215,476
- 579,292
-
- 579,292
437,214
146,261
(68,939)
(22,980)
491,556
(43,021)
(60,824)
387,711
419,734
150,310
(54,316)
(18,105)
497,623
(40,343)
(57,038)
400,242
458,168
153,829
(73,118)
(432,142)
106,737
(44,020)
(62,717)
-
-
-
-
-
- 136,556
- 136,556
- 136,556
-
-
-
-
263,018
125,397
- 388,415
(31,858)
(45,042)
311,515
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Managing Director / Chief Executive Officer
30 June 2017
Chris Tuckwell
Geoff Baker
Executive Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil Operations
Maurice Dessauvagie 1
General Manager - Civil and Infrastructure
Mark Davidovic 2
General Manager - Civil and Infrastructure
General Manager - Business Development
General Manager - Corporate Services
David Greig 3
David Kent 4
Peter Gilford
Chief Financial Officer / Company Secretary
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Non-executive Director
Robert Ryan
Non-executive Director
Total
1
2
3
4
2,569,967
1,196,083
(196,373)
(473,227)
3,096,450
(233,306)
(334,837)
2,528,307
Maurice Dessauvagie - replaced as General Manager - Civil and Infrastructure effective 20th February 2017.
Mark Davidovic - appointed as General Manager - Civil and Infrastructure effective 20th February 2017.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
David Kent - appointed as General Manager - Corporate Services effective 1st November 2016.
24
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017 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
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
628,017
268,254
363,816
215,476
-
-
- 896,271
(74,064)
(109,216)
712,991
- 579,292
-
- 579,292
437,214
146,261
(68,939)
(22,980)
491,556
(43,021)
(60,824)
387,711
419,734
150,310
(54,316)
(18,105)
497,623
(40,343)
(57,038)
400,242
458,168
153,829
(73,118)
(432,142)
106,737
(44,020)
(62,717)
-
-
- 136,556
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 136,556
-
-
-
-
-
-
-
- 136,556
-
-
- 388,415
(31,858)
(45,042)
311,515
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2017
Chris Tuckwell
Managing Director / Chief Executive Officer
Geoff Baker
Executive Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil Operations
Maurice Dessauvagie 1
General Manager - Civil and Infrastructure
Mark Davidovic 2
General Manager - Civil and Infrastructure
David Greig 3
General Manager - Business Development
David Kent 4
General Manager - Corporate Services
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Non-executive Director
Robert Ryan
Non-executive Director
Total
Peter Gilford
263,018
125,397
Chief Financial Officer / Company Secretary
2,569,967
1,196,083
(196,373)
(473,227)
3,096,450
(233,306)
(334,837)
2,528,307
1
2
3
4
Maurice Dessauvagie - replaced as General Manager - Civil and Infrastructure effective 20th February 2017.
Mark Davidovic - appointed as General Manager - Civil and Infrastructure effective 20th February 2017.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
David Kent - appointed as General Manager - Corporate Services effective 1st November 2016.
25
MACA LIMITED ANNUAL REPORT 2017 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 2017
Balance at beginning
of year
Granted as
remuneration
during the year
Increase other
Issued on exercise of
rights during the year
Other changes during
the year
Balance at end of year
612,500
-
-
-
-
612,500
15,000,000
-
-
-
(2,500,000)
12,500,000
- -
-
68,939
(68,939)
-
100,000
-
- 54,318
(154,318)
-
20,000
-
- 73,118
(73,118)
20,000
2017
1,187,245
- 126,813
- 41,836
25,000
-
-
-
- 237,329
1,618,223
2016
1,164,939
-
-
- 29,671
30,192
-
-
-
- 113,652
1,338,454
0
-
-
-
-
-
Andrew Edwards
2017
141,552
0
-
-
-
-
-
0
-
-
-
-
-
27,500
-
-
-
-
27,500
20,000
-
-
-
-
20,000
50,000
-
-
-
-
50,000
18,604
-
-
-
-
18,604
Executives (KMP)
15,848,604
-
-
196,375
(2,796,375)
13,248,604
Tim Gooch
2017
397,893
-
28,211
-
21,085
37,800
The following table sets out the benefits and payment details, in respect to the financial year, and the components of 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.
Short-term benefits
benefits
Long-term benefits
based payments
Post-employment
Equity-settled share-
Salary, fees
Committe
Cash
Non-
Superannu
Incentive
and leave
e fees
bonus/STI
monetary
Other
ation
Other
plans
Year
$
$
$
$
$
$
$
$
LSL
$
Share /
Options /
Units
Rights
$
$
Total
$
Total compensation for Non-
executive Directors
2017
364,884
-
-
-
- 21,293
-
-
-
-
- 386,177
2016
414,185
-
-
-
- 21,644
-
-
-
-
- 435,829
Chris Tuckwell
2017
628,165
-
70,671
-
41,836
25,000
2016
621,939
-
29,671
30,192
Geoff Baker
2017
559,080
-
56,142
Operations Director
2016
543,000
Executive Directors
Managing Director / Chief
Executive Officer
Total compensation for
Executive Directors
Non-executive Directors
Chairman
Linton Kirk 1
2016
144,139
2017
91,370
2016
117,787
2016
152,259
Robert Ryan 2
2017
131,962
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,447
-
13,693
-
7,846
-
7,951
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 145,996
911,668
- 77,552
759,354
- 91,333
706,555
- 36,100
579,100
-
-
-
-
-
-
-
154,999
-
157,832
-
99,216
-
125,738
-
131,962
-
152,259
- 80,183
565,172
- 97,620
543,558
- 80,932
565,081
- 85,674
580,793
- 83,880
397,440
- 102,703
582,265
-
- 216,830
-
-
-
-
-
-
-
-
-
- 63,893
488,906
- 32,491
404,310
General Manager - Mining
2016
393,362
-
12,955
39,621
Mitch Wallace
2017
427,930
-
29,062
-
6,388
20,769
2016
454,821
-
6,370
33,928
Maurice Dessauvagie 3
2017
287,774
2016
440,125
-
25,786
-
39,437
2017
191,769
-
11,256
-
13,805
General Manager - Brazil
Operations
General Manager - Civil and
Infrastructure
Mark Davidovic 4
General Manager - Civil and
General Manager - Business
Infrastructure
David Greig 5
Development
David Kent 6
Services
Peter Gilford
General Manager - Corporate
Chief Financial Officer /
Company Secretary
Total compensation for
Executives
2016
2016
2016
-
-
-
2017
395,000
-
26,536
-
35,150
- 28,677
485,363
2017
256,944
-
26,536
-
22,885
-
- 306,365
2017
345,180
-
24,234
-
25,643
29,956
2016
317,046
-
25,896
28,877
2017
2,302,490
- 145,835
- 53,116 186,151
-
-
-
- 337,565
3,025,157
2016
1,605,354
-
-
- 45,221 141,863
-
-
-
- 318,488
2,110,926
Short-term benefits
benefits
Long-term benefits
based payments
Post-employment
Equity-settled share-
Salary, fees
Committe
Cash
Non-
Superannu
Incentive
and leave
e fees
bonus/STI
monetary
Other
ation
Other
plans
Share /
Options /
Units
Rights
Year
$
$
$
$
$
$
$
$
$
$
LSL
$
Total
$
30 June 2017
Chris Tuckwell
Managing Director / Chief
Executive Officer
Geoff Baker
Executive Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie
General Manager - Civil and
Infrastructure
Mark Davidovic
General Manager - Civil and
Infrastructure
David Greig
General Manager - Business
Development
David Kent
General Manager - Corporate
Services
Peter Gilford
Chief Financial Officer
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Non-executive Director
Robert Ryan
Non-executive Director
Total
26
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017 REMUNERATION REPORT - AUDITED
5.10 KMP remuneration
5.10.1 Employment benefits and payments for the year ended 30 June 2017
The following table sets out the benefits and payment details, in respect to the financial year, and the components of 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.
Short-term benefits
Post-employment
benefits
Long-term benefits
Equity-settled share-
based payments
Salary, fees
and leave
Committe
e fees
Cash
bonus/STI
Non-
monetary
Year
$
$
$
$
Superannu
ation
$
Other
$
Incentive
plans
$
Other
$
LSL
$
Share /
Units
Options /
Rights
$
$
Total
$
Executive Directors
Chris Tuckwell
2017
628,165
-
70,671
-
41,836
25,000
Managing Director / Chief
Executive Officer
2016
621,939
-
-
-
29,671
30,192
Geoff Baker
2017
559,080
-
56,142
Operations Director
2016
543,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 145,996
911,668
- 77,552
759,354
- 91,333
706,555
- 36,100
579,100
Total compensation for
Executive Directors
Non-executive Directors
2017
1,187,245
- 126,813
- 41,836
25,000
-
-
-
- 237,329
1,618,223
2016
1,164,939
-
-
- 29,671
30,192
-
-
-
- 113,652
1,338,454
Andrew Edwards
2017
141,552
Chairman
Linton Kirk 1
2016
144,139
2017
91,370
2016
117,787
Robert Ryan 2
2017
131,962
2016
152,259
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,447
-
13,693
-
7,846
-
7,951
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
154,999
-
157,832
-
99,216
-
125,738
-
131,962
-
152,259
Total compensation for Non-
executive Directors
2017
364,884
-
-
-
- 21,293
-
-
-
-
- 386,177
2016
414,185
-
-
-
- 21,644
-
-
-
-
- 435,829
Short-term benefits
Post-employment
benefits
Long-term benefits
Equity-settled share-
based payments
Salary, fees
and leave
Committe
e fees
Cash
bonus/STI
Non-
monetary
Other
Superannu
ation
Other
Incentive
plans
Year
$
$
$
$
$
$
$
$
LSL
$
Share /
Units
Options /
Rights
$
$
Total
$
Executives (KMP)
Tim Gooch
2017
397,893
-
28,211
-
21,085
37,800
General Manager - Mining
2016
393,362
-
-
-
12,955
39,621
Mitch Wallace
2017
427,930
-
29,062
-
6,388
20,769
General Manager - Brazil
Operations
2016
454,821
Maurice Dessauvagie 3
2017
287,774
General Manager - Civil and
Infrastructure
2016
440,125
-
-
-
-
-
-
Mark Davidovic 4
2017
191,769
-
11,256
General Manager - Civil and
Infrastructure
2016
-
-
-
David Greig 5
2017
395,000
-
26,536
General Manager - Business
Development
2016
-
-
-
David Kent 6
2017
256,944
-
26,536
General Manager - Corporate
Services
2016
-
-
-
-
6,370
33,928
-
-
-
-
-
-
-
-
-
25,786
-
39,437
-
13,805
-
-
-
35,150
-
-
-
22,885
-
-
Peter Gilford
2017
345,180
-
24,234
-
25,643
29,956
2016
317,046
-
-
-
25,896
28,877
Chief Financial Officer /
Company Secretary
Total compensation for
Executives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 80,183
565,172
- 97,620
543,558
- 80,932
565,081
- 85,674
580,793
- 83,880
397,440
- 102,703
582,265
-
- 216,830
-
-
-
- 28,677
485,363
-
-
-
-
- 306,365
-
-
-
- 63,893
488,906
- 32,491
404,310
2017
2,302,490
- 145,835
- 53,116 186,151
-
-
-
- 337,565
3,025,157
2016
1,605,354
-
-
- 45,221 141,863
-
-
-
- 318,488
2,110,926
27
MACA LIMITED ANNUAL REPORT 2017 5.10 KMP remuneration (cont)
Former KMP
Jeremy Connor 7
General Manager - Business
Development
Total compensation for
former KMP
Total compensation for KMP
2017
-
2016
307,326
-
-
-
-
-
-
-
-
-
21,512
-
-
-
-
-
-
-
-
-
- 38,834
367,672
2017
-
-
-
-
-
-
-
-
-
-
-
-
2016
307,326
-
-
-
- 21,512
-
-
-
- 38,834
367,672
2017
3,854,619
- 272,648
- 94,952 232,444
-
-
-
- 574,894
5,029,557
2016
3,491,804
-
-
- 74,892 215,211
-
-
-
- 470,974
4,252,881
1
2
3
4
5
6
Linton Kirk was engaged on a contract basis through his business Kirk Mining Consultants to perform consulting work. The engagement was
charged at hourly rates and is included in the amount of salary and fees above.
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.
Maurice Dessauvagie - replaced as General Manager - Civil and Infrastructure effective 20th February 2017.
Mark Davidovic - appointed as General Manager - Civil and Infrastructure effective 20th February 2017.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
David Kent - appointed as General Manager - Corporate Services effective 1st November 2016.
7 Jeremy Connor - resigned as General Manager - Business Development effective 1st April 2016.
28
5.10.2 Employment details of members of key management personnel and other executives
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.
Proportions of elements of remuneration related
to performance
cash-based
Shares / Units
Options / Rights
Non-salary
incentives
Year
%
%
%
Proportions of
elements of
remuneration not
related to
performance
Fixed Salary /
Fees
%
Total
%
Managing Director / Chief Executive
2016
-
-
10.2
89.8 100.0
2017
7.8
- 16.0
76.2 100.0
7.9
-
-
12.9
- 6.2
79.1
100.0
93.8 100.0
- -
-
100.0
100.0
- -
- 100.0
100.0
- -
- 100.0
100.0
- -
- 100.0
100.0
Robert Ryan
- -
- 100.0
100.0
- -
- 100.0
100.0
Year
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2016
2016
2016
2016
2016
Executive Directors
Chris Tuckwell
Officer
Geoff Baker
Operations Director
Non-executive Directors
Andrew Edwards
Chairman
Linton Kirk
Executives (KMP)
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie 1
General Manager - Civil and
Infrastructure
Mark Davidovic 2
General Manager - Civil and
General Manager - Business
Infrastructure
David Greig 3
Development
David Kent 4
Services
Peter Gilford
Secretary
General Manager - Corporate
Chief Financial Officer / Company
5.0
- 14.2
80.8 100.0
5.1
-
14.3
80.5 100.0
- 18.0
82.0
100.0
- 14.8
85.2
100.0
2017
-
- 21.1
78.9 100.0
-
17.6
82.4
100.0
2017
5.2
-
94.8
100.0
- 100.0
100.0
2017
5.5
-
5.9
88.6
100.0
-
- 100.0
100.0
2017
8.7
-
91.3 100.0
- 100.0
100.0
2017
5.0
- 13.1
82.0 100.0
- 8.0
92.0
100.0
-
-
-
-
-
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017 REMUNERATION REPORT - AUDITED
5.10.2 Employment details of members of key management personnel and other executives
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.
Year
Proportions of elements of remuneration related
to performance
Shares / Units
Options / Rights
Non-salary
cash-based
incentives
%
Year
%
%
%
Proportions of
elements of
remuneration not
related to
performance
Fixed Salary /
Fees
Total
%
Executive Directors
Chris Tuckwell
Managing Director / Chief Executive
Officer
Geoff Baker
Operations Director
Non-executive Directors
Andrew Edwards
Chairman
Linton Kirk
Robert Ryan
Executives (KMP)
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie 1
General Manager - Civil and
Infrastructure
Mark Davidovic 2
General Manager - Civil and
Infrastructure
David Greig 3
General Manager - Business
Development
David Kent 4
General Manager - Corporate
Services
Peter Gilford
Chief Financial Officer / Company
Secretary
2017
7.8
- 16.0
76.2 100.0
2016
-
-
10.2
89.8 100.0
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
7.9
-
-
12.9
- 6.2
79.1
100.0
93.8 100.0
- -
-
100.0
100.0
- -
- 100.0
100.0
- -
- 100.0
100.0
- -
- 100.0
100.0
- -
- 100.0
100.0
- -
- 100.0
100.0
5.0
- 14.2
80.8 100.0
-
- 18.0
82.0
100.0
5.1
-
14.3
80.5 100.0
-
- 14.8
85.2
100.0
2017
-
- 21.1
78.9 100.0
2016
-
-
17.6
82.4
100.0
2017
5.2
-
94.8
100.0
2016
- 100.0
100.0
2017
5.5
-
5.9
88.6
100.0
2016
-
-
- 100.0
100.0
2017
8.7
-
91.3 100.0
2016
- 100.0
100.0
2017
5.0
- 13.1
82.0 100.0
2016
-
- 8.0
92.0
100.0
29
MACA LIMITED ANNUAL REPORT 2017 5.10.2 Employment details of members of key management personnel and other executives (cont)
7 Non-executive Directors fees
Total
%
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.
-
10.6
89.4
100.0
Non executive Directors fees, other than for the Chairman (no change), were increased by 3% with effect from 20th April 2017 in
Proportions of elements of remuneration related
to performance
Shares / Units Options / Rights
%
%
%
Proportions of
elements of
remuneration not
related to
performance
Fixed Salary /
Fees
Non-salary
cash-based
incentives
%
-
-
Year
2017
2016
Former KMP
Jeremy Connor 5
General Manager - Business
Development
1
2
3
4
5
Maurice Dessauvagie - replaced as General Manager - Civil and Infrastructure effective 20th February 2017.
Mark Davidovic - appointed as General Manager - Civil and Infrastructure effective 20th February 2017.
David Greig - appointed as General Manager - Business Development effective 18th July 2016.
David Kent - appointed as General Manager - Corporate Services effective 1st November 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 / Chief Executive
Officer
Geoff Baker
Operations Director
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager - Brazil
Operations
Maurice Dessauvagie
General Manager - Civil and
Infrastructure
Mark Davidovic
General Manager - Civil and
Infrastructure
David Greig
General Manager - Business
Development
David Kent
General Manager - Corporate
Services
Peter Gilford
Chief Financial Officer / 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
Replaced as General Manager - Civil
and Infrastructure on 20th February
20th February 2017
The contract is ongoing and has no
fixed term
18th July 2016
The contract is ongoing and has no
fixed term
1st November 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
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
line with KMP increases.
Non-executive Directors
$ / Chairman
Andrew Edwards
Linton Kirk
Robert Ryan
$155,000
Board
$92,700
Audit Committee
Risk Committee
$92,700
Member
Audit Committee
Risk Committee
Remuneration Committee
Remuneration Committee
Remuneration Committee
Risk committee
Audit Committee
8 Other transactions with key management persons and / or related parties
Key management person and/or related party
Transaction
2017
$
2016
$
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 - 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.
and Mr J Moore.
Gateway Equipment Parts & Services Pty Ltd - a
Revenue - Sale of equipment
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
1,589,382
1,530,560
8,780
37,070
41,962
74,498
1,922,082 894,052
- 320,320
-
4,703,253
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017 REMUNERATION REPORT - AUDITED
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, other than for the Chairman (no change), were increased by 3% with effect from 20th April 2017 in
line with KMP increases.
Non-executive Directors
$ / Chairman
Andrew Edwards
Linton Kirk
Robert Ryan
$155,000
Board
$92,700
Audit Committee
Risk Committee
$92,700
Member
Audit Committee
Risk Committee
Remuneration Committee
Remuneration Committee
Audit Committee
Remuneration Committee
Risk committee
8 Other transactions with key management persons and / or related parties
Key management person and/or related party
Transaction
2017
$
2016
$
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.
Expense - Rent on Division St Business
premises.
Expense - Consulting fees
Expense - Consulting fees
Expense - Hire of equipment and
purchase of equipment, parts and
services.
Revenue - Sale of equipment
1,589,382
1,530,560
8,780
37,070
41,962
74,498
1,922,082 894,052
Acquisition of 100% of equity on 31
January 2016
- 320,320
-
4,703,253
31
MACA LIMITED ANNUAL REPORT 2017 8 Other transactions with key management persons and / or related parties (cont)
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.
2017
$
2016
$
110,000
21,330
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
28th day of September 2017
Perth
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS
OF MACA LIMITED & CONTROLLED ENTITIES
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.moorestephens.com.au
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017 there have been
no contraventions of:
i.
ii.
the audit; and
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
any applicable code of professional conduct in relation to the audit.
NEIL PACE
PARTNER
MOORE STEPHENS
CHARTERED ACCOUNTANTS
Signed at Perth this 28th day of September 2017.
32
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.
REMUNERATION REPORT - AUDITEDMACA LIMITED ANNUAL REPORT 2017 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS
OF MACA LIMITED & CONTROLLED ENTITIES
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.moorestephens.com.au
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017 there have been
no contraventions of:
i.
ii.
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
NEIL PACE
PARTNER
MOORE STEPHENS
CHARTERED ACCOUNTANTS
Signed at Perth this 28th day of September 2017.
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.
33
AUDITOR’S INDEPENDENCE DECLARATION MACA LIMITED ANNUAL REPORT 2017 Corporate Governance Statement – Checklist
The Board of MACA Limited is committed to ensuring that the Company’s obligations and responsibilities to its 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,
Continuous Improvement and Community. We believe that 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 the 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. There were no departures during the year. 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)
✓
✓
✓
✓
✓
✓
34
ASX Corporate Governance Council’s Principles and Recommendations
CG statement reference
Compliance
1.5
A listed entity should:
1.5
(a) have a diversity policy which includes requirements for the
Cultural Diversity Policy
board or a relevant committee of the board to set measurable
(website)
objectives for achieving gender diversity and to assess annually
Disclosure - Diversity
both the objectives and the entity’s progress in achieving them;
Procedure (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
accordance with that process.
Performance Evaluation
(website)
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
2.1
Board Charter (website)
Nomination Committee
Charter (website)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
CORPORATE GOVERNANCE STATEMENT - CHECKLISTMACA LIMITED ANNUAL REPORT 2017 CORPORATE GOVERNANCE STATEMENT
CG statement reference
1.5
Cultural Diversity Policy
(website)
Disclosure - Diversity
Procedure (website)
ASX Corporate Governance Council’s Principles and Recommendations
1.5
A listed entity should:
(a) have a diversity policy which includes requirements for the
board or a relevant committee of the board to set measurable
objectives for achieving gender diversity and to assess annually
both the objectives and the entity’s progress in achieving them;
(b) disclose 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:
1.6
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual
directors; and
Disclosure -
Performance Evaluation
(website)
1.7
(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.
1.7
Disclosure -
Performance Evaluation
(website)
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
2.1
Board Charter (website)
Nomination Committee
Charter (website)
Compliance
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
35
MACA LIMITED ANNUAL REPORT 2017 ASX Corporate Governance Council’s Principles and Recommendations
CG statement reference
Compliance
✓
ASX Corporate Governance Council’s Principles and Recommendations
CG statement reference
Compliance
(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.
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.
2.2
2.3
2.4
2.5
2.6
Principle 3 – Act ethically and responsibly
A listed entity should act ethically and responsibly.
3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives and
employees; and
(b) disclose that code or a summary of it.
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:
36
2.2
2.3
Definition of
Independence (website)
2.4
2.5
2.6
Board Charter (website)
Nomination Committee
Charter (website)
3.1
Corporate Code of
Conduct (website)
4.1
Audit Committee
Charter (website)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
(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.
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.
4.2
4.3
4.2
✓
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 - Continuous
disclosure obligations under the Listing Rules; and
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.
5.1
6.1
6.2
6.3
Shareholder
Communication
Strategy (website)
Investor Centre
(website)
Shareholder
Communication
Strategy (website)
✓
✓
✓
✓
✓
✓
✓
✓
CORPORATE GOVERNANCE STATEMENTMACA LIMITED ANNUAL REPORT 2017 CORPORATE GOVERNANCE STATEMENT
ASX Corporate Governance Council’s Principles and Recommendations
(3) the charter of the committee;
CG statement reference
(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.
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.
4.2
4.3
Compliance
✓
✓
✓
4.2
✓
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 :
5.1
(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
6.3
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.
6.1
Shareholder
Communication
Strategy (website)
6.2
Investor Centre
(website)
6.3
Shareholder
Communication
Strategy (website)
✓
✓
✓
✓
✓
37
MACA LIMITED ANNUAL REPORT 2017 ASX Corporate Governance Council’s Principles and Recommendations
6.4
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity
and its security registry electronically.
CG statement reference
6.4
Compliance
✓
Shareholder
Communication
Strategy (website)
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
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.
7.2
7.1
Risk Committee Charter
(website)
7.2
Disclosure - Risk
Management (website)
7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the function is
structured and what role it performs; or
(b) if it does not have an internal audit function, that fact and the
processes it employs for evaluating and continually improving the
effectiveness of its risk management and internal control
processes.
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.
7.4
7.3
7.4
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
ASX Corporate Governance Council’s Principles and Recommendations
CG statement reference
Compliance
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:
8.1
Remuneration
Committee Charter
(website)
Remuneration Report
(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;
(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.
✓
✓
✓
✓
✓
✓
✓
✓
38
CORPORATE GOVERNANCE STATEMENTMACA LIMITED ANNUAL REPORT 2017 CORPORATE GOVERNANCE STATEMENT
ASX Corporate Governance Council’s Principles and Recommendations
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;
(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
8.1
Remuneration
Committee Charter
(website)
Remuneration Report
8.2
Remuneration Report
8.3
✓
✓
✓
✓
✓
✓
✓
✓
39
MACA LIMITED ANNUAL REPORT 2017 Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2017
Note
2017
$’000
Revenue
Other income
Direct costs
Finance costs
Share based payment expense
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
2
2
3
4
497,922
23,906
(456,406)
(3,813)
(103)
(1,584)
(15,814)
44,108
(12,915)
31,193
(1,829)
806
30,170
(864)
32,057
31,193
(864)
31,034
30,170
Earnings per share:
- Basic earnings per share (cents)
- Diluted earnings per share (cents)
9
9
13.72
13.62
The accompanying notes form part of these financial accounts
2016
$’000
431,424
17,837
(394,978)
(2,558)
(277)
(85)
(17,721)
33,642
(9,411)
24,231
2,428
203
26,862
67
24,164
24,231
67
26,795
26,862
10.44
10.41
40
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 30 June 2017MACA LIMITED ANNUAL REPORT 2017 Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2017
Consolidated Statement of Financial Position
as at 30 June 2017
Revenue
Other income
Direct costs
Finance costs
Share based payment expense
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
Note
2017
$’000
2
2
3
4
497,922
23,906
(456,406)
(3,813)
(103)
(1,584)
(15,814)
44,108
(12,915)
31,193
(1,829)
806
30,170
(864)
32,057
31,193
(864)
31,034
30,170
Earnings per share:
- Basic earnings per share (cents)
- Diluted earnings per share (cents)
9
9
13.72
13.62
The accompanying notes form part of these financial accounts
2016
$’000
431,424
17,837
(394,978)
(2,558)
(277)
(85)
(17,721)
33,642
(9,411)
24,231
2,428
203
26,862
67
24,164
24,231
67
26,795
26,862
10.44
10.41
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
Note
10
11
14
15
12
13
14
15
5
16
17
18
16
19
16
18
20
2017
$’000
112,008
113,667
9,675
13,647
(345)
-
1,756
250,408
2016
$’000
115,602
73,461
7,114
10,068
89
-
2,144
208,479
128,905
154,167
-
1,648
6,526
8,037
145,116
395,524
64,042
21,838
3,428
10,402
99,710
107
25,980
26,087
125,797
269,727
211,333
(7,502)
62,652
266,483
3,244
269,727
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
The accompanying notes form part of these financial accounts
41
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2017 MACA LIMITED ANNUAL REPORT 2017 Consolidated Statement of Changes in Equity
for the year ended 30 June 2017
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
BALANCE AT 1 JULY 2016
Profit for the period
SUB-TOTAL
Other comprehensive income:
Revaluation of Investment
SUB-TOTAL
Shares issued
Options/Rights Issued
Options issued net of options exercised
Transactions with non-controlling interests
Acquisition of non-controlling interest
Dividends paid
BALANCE AT 30 JUNE 2017
The accompanying notes form part of these financial accounts
Issued
Capital
Retained
Profits
Outside
Equity
Interest
General
Reserves
Option
Reserve
FX
Reserve
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
209,016
53,409 -
(3,980)
327
(2,804)
255,968
-
24,163
67 - - -
24,230
209,016
77,572
67
(3,980)
327
(2,804)
280,198
- - - - - -
-
- - -
203 -
2,428
2,631
209,016
77,572
67
(3,777)
327
(376)
282,829
- - - - - -
-
(200) - - - - -
(200)
- - - -
277 -
277
- - - - - -
-
- -
(515) - - -
(515)
-
(26,758) - - - -
(26,758)
208,816
50,814
(448)
(3,777)
604
(376)
255,633
208,816
50,814
(448)
(3,777)
604
(376)
255,633
- 32,057
(864) - - -
31,193
208,816
82,871
(1,312)
(3,777)
604
(376)
286,826
- - - - - -
-
- 806
- - -
(1,829)
(1,023)
208,816
83,677
(1,312)
(3,777)
604
(2,205)
285,803
2,400
- - - - -
2,400
- - - - 103
-
103
117
- - -
(117) -
-
- - 448
- - -
448
- - 4,108
(2,110) - -
1,998
-
(21,025) - - - -
(21,025)
211,333
62,652
3,244
(5,887)
590
(2,205)
269,727
42
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 30 June 2017MACA LIMITED ANNUAL REPORT 2017 Consolidated Statement of Changes in Equity
for the year ended 30 June 2017
Consolidated Statement of Cash Flows
for the year ended 30 June 2017
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
BALANCE AT 1 JULY 2016
Profit for the period
SUB-TOTAL
Other comprehensive income:
Revaluation of Investment
SUB-TOTAL
Shares issued
Options/Rights Issued
Options issued net of options exercised
Transactions with non-controlling interests
Acquisition of non-controlling interest
Dividends paid
BALANCE AT 30 JUNE 2017
The accompanying notes form part of these financial accounts
Issued
Capital
Retained
Profits
General
Reserves
Option
Reserve
FX
Reserve
Total
Outside
Equity
Interest
$’000
$’000
$’000
$’000
$’000
$’000
$’000
209,016
53,409 -
(3,980)
327
(2,804)
255,968
-
24,163
67 - - -
24,230
209,016
77,572
67
(3,980)
327
(2,804)
280,198
- - - - - -
- - -
203 -
2,428
2,631
209,016
77,572
67
(3,777)
327
(376)
282,829
- - - - - -
(200) - - - - -
(200)
- - - -
277 -
277
- - - - - -
- -
(515) - - -
(515)
-
(26,758) - - - -
(26,758)
208,816
50,814
(448)
(3,777)
604
(376)
255,633
208,816
50,814
(448)
(3,777)
604
(376)
255,633
- 32,057
(864) - - -
31,193
208,816
82,871
(1,312)
(3,777)
604
(376)
286,826
- - - - - -
- 806
- - -
(1,829)
(1,023)
208,816
83,677
(1,312)
(3,777)
604
(2,205)
285,803
2,400
- - - - -
2,400
- - - - 103
-
103
117
- - -
(117) -
- - 448
- - -
448
- - 4,108
(2,110) - -
1,998
-
(21,025) - - - -
(21,025)
211,333
62,652
3,244
(5,887)
590
(2,205)
269,727
-
-
-
-
-
Note
2017
$’000
2016
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest received
Interest paid
Income tax paid
Net Cash Provided By Operating Activities
24(b)
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
482,742
(399,268)
-
1,481
(3,814)
(12,999)
68,142
-
3,175
-
(21,909)
(2,677)
-
(21,411)
-
(27,105)
(21,025)
(48,130)
(1,399)
(2,195)
115,602
112,008
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
43
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2017 MACA LIMITED ANNUAL REPORT 2017 Notes to the Financial Statements
for the year ended 30 June 2017
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,
liabilities. These financial
by the measurement at fair value of selected non-current assets, financial assets and 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 2017
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,
is accounted for as an equity transaction, where the difference between the consideration
without the loss of control,
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).
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.
44
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 June 2017MACA LIMITED ANNUAL REPORT 2017 Notes to the Financial Statements
for the year ended 30 June 2017
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 2017
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).
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.
NOTES TO THE FINANCIAL STATEMENTS
c. Business Combinations (cont)
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
share of the subsidiary's identifiable net assets (proportionate interest method). In such circumstances, the Group determines
which method to adopt for each acquisition and this is stated in the respective notes to these financial statements disclosing the
business combination.
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.
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.
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MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
d. Income Tax (cont)
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.
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
Low value pool
Motor vehicles
10% – 66.67%
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.
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MACA LIMITED ANNUAL REPORT 2017 d. Income Tax (cont)
f. Property, Plant and Equipment (cont.)
NOTES TO THE FINANCIAL STATEMENTS
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.
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
Low value pool
Motor vehicles
10% – 66.67%
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.
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,
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:
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 2017 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.
j. Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s
functional and presentation currency.
48
MACA LIMITED ANNUAL REPORT 2017 Fair value
pricing models.
Impairment
De-recognition
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 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
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.
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.
j. Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s
functional and presentation currency.
NOTES TO THE FINANCIAL STATEMENTS
j. Foreign Currency Transactions and Balances (cont)
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.
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MACA LIMITED ANNUAL REPORT 2017 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.
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.
50
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
s. Changes in ownership interests (cont)
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 assets 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 assets in the current reporting period.
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
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.
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
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
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.
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the
of GST.
r. Comparative Figures
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.
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.
51
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
Note
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
Total employee benefits expense
Repairs, service and maintenance
Materials and supplies
2017
$’000
496,278
496,278
1,480
164
1,644
2016
$’000
427,137
427,137
1,929
2,358
4,287
497,922
431,424
1,125
-
22,781
23,906
50,356
1,560
183
52,099
132,936
55,436
99,562
697
(540)
(1,194)
18,873
17,837
54,970
1,490
163
56,623
121,279
46,979
97,600
52
MACA LIMITED ANNUAL REPORT 2017 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 employee benefits expense
Repairs, service and maintenance
Materials and supplies
Total depreciation and amortisation expense
497,922
431,424
Note
2017
$’000
496,278
496,278
1,480
164
1,644
1,125
-
22,781
23,906
50,356
1,560
183
52,099
132,936
55,436
99,562
2016
$’000
427,137
427,137
1,929
2,358
4,287
697
(540)
(1,194)
18,873
17,837
54,970
1,490
163
56,623
121,279
46,979
97,600
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
15,219
(2,304)
12,915
2016
$’000
10,142
(731)
9,411
13,232
10,092
3,861
497
9,010
-
(12,871)
(814)
12,915
29.3%
4,571
575
10,667
(1,256)
(15,238)
-
9,411
27.9%
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% (2016: 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 (Losses not previously brought to account)
Income tax attributable to the entity
The applicable weighted average effective tax rate as
NOTE 5. BUSINESS COMBINATIONS
2017
On 15 December 2016 the Group acquired 60% of the issued capital in Interquip Pty Ltd, a company involved in Structural
Mehanical and Piping Construction. The consideration consisted of $5.6M in cash, $2.4M in shares and an earn out agreement
based on EBIT targets for FY 2017 and FY 2018. The earnout was valued at $1.5M based upon expected outcomes.
The major classes of assets and liabilities at the date of the acquisition are as follows:
Interquip Pty Ltd
Purchase consideration - Cash
- Shares
- Deferred Consideration (Earn Out)
Less:
Cash and cash equivalents
Trade and other receivables
WIP and Inventory
Other assets
Property, plant and equipment
Land and Building
Trade and other payables
Financial liabilities
Advance Payment
Current tax liabilities
Provisions
Value of identifiable assets acquired and liabilities assumed
Goodwill on acquisition
Fair value at 15
December 2016
$’000
5,600
2,400
1,500
3,073
5,995
4,334
74
5,687
107
(4,216)
(1,214)
(3,000)
(140)
(430)
10,270
6,162
3,338
53
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
NOTE 5. BUSINESS COMBINATIONS (Cont.)
Services South East Pty Ltd
On 31 October 2016 the Group acquired 25% of the issued capital in Services South East Pty Ltd which it did not already own for
cash payment of $150,000 and forgiveness of a related party debt and assumption of liabilities. The total consideration for the
remaining 25% amounted to $1.662M.
2016
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
Services South East Pty Ltd
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
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
-
Fair value at 5 April
2016
$’000
1,642
(63)
1,657
918
7,173
(4,817)
(6,486)
-
(442)
(1,545)
3,187
MACA LIMITED ANNUAL REPORT 2017 NOTE 5. BUSINESS COMBINATIONS (Cont.)
Services South East Pty Ltd
On 31 October 2016 the Group acquired 25% of the issued capital in Services South East Pty Ltd which it did not already own for
cash payment of $150,000 and forgiveness of a related party debt and assumption of liabilities. The total consideration for the
remaining 25% amounted to $1.662M.
2016
contracting of mining and civil services.
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
Value of identifiable assets acquired and liabilities assumed
Fair value at 5 April
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
Services South East Pty Ltd
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
2016
$’000
4,703
4,172
5,712
1,087
11,828
1,820
(7,829)
(9,185)
(19)
(2,881)
4,703
-
2016
$’000
1,642
(63)
1,657
918
7,173
(4,817)
(6,486)
-
(442)
(1,545)
3,187
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
2016
$’000
NOTE 6. AUDITORS’ REMUNERATION
Remuneration of the parent entity auditors for:
– Auditing or reviewing the financial report
NOTE 7. INTERESTS OF KEY MANAGEMENT COMPENSATION (KMP)
The totals of remuneration paid to KMP of the Company and
the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share based payments
NOTE 8. DIVIDENDS
Distributions paid
Interim fully franked ordinary dividend of $0.045 (2016: 0.040)
per share franked at the tax rate of 30% (2016: 30%)
2016 final dividend (fully franked) of $0.045 per share paid in
2017 (2016: $0.075)
166
160
4,221
232
-
575
5,028
10,479
10,546
21,025
3,567
215
-
471
4,253
9,307
17,451
26,758
Total dividends paid per share for the period $
0.090
0.115
Proposed final fully franked ordinary dividend of $0.045 (2016:
$0.045) per share franked at the tax rate of 30% (2016: 30%)
Balance of franking account at year end.
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
NOTE 10. CASH AND CASH EQUIVALENTS
Cash at bank
10,545
36,145
31,193
864
32,057
32,057
10,479
22,312
24,230
(67)
24,163
24,163
233,628
232,676
1,802
664
235,430
233,340
20
112,008
115,602
55
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
NOTE 11. TRADE AND OTHER RECEIVABLES
CURRENT
Trade debtors
Less – Impairment for doubtful debts
a. Credit risk
Note
2017
$’000
113,667
-
113,667
2016
$’000
73,461
-
73,461
The Group has approximately 32.1% (2016: 43.9%) of credit risk with a single counterparty or group of counterparties. Failure or
default of a major counterparty would have a material on earnings. Management of credit risk is discussed at Note28 (a). 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.
30-Jun-17
Trade and term receivables
Other receivables
Total
30-Jun-16
Trade and term receivables
Other receivables
Total
b. Financial assets classified as loans and receivables
Trade and other receivables
- Total current
- Total non-current
Other loans
- Total current
- Total non-current
Gross amount
Past due and
impaired
Past due but not
impaired
Within initial trade
terms
$’000
$’000
$’000
$’000
113,667
25,265
88,402
-
-
-
113,667
25,265
88,402
73,461
12,652
60,809
-
-
-
73,461
12,652
60,809
Note
2017
$’000
2016
$’000
113,667
73,461
-
-
113,667
73,461
14
14
9,675
-
9,675
7,114
883
7,997
56
MACA LIMITED ANNUAL REPORT 2017 NOTE 11. TRADE AND OTHER RECEIVABLES
Less – Impairment for doubtful debts
CURRENT
Trade debtors
a. Credit risk
Note
2017
$’000
113,667
-
113,667
2016
$’000
73,461
-
73,461
The Group has approximately 32.1% (2016: 43.9%) of credit risk with a single counterparty or group of counterparties. Failure or
default of a major counterparty would have a material on earnings. Management of credit risk is discussed at Note28 (a). 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.
30-Jun-17
Trade and term receivables
Other receivables
Total
30-Jun-16
Trade and term receivables
Other receivables
Total
Trade and other receivables
- Total current
- Total non-current
Other loans
- Total current
- Total non-current
b. Financial assets classified as loans and receivables
Gross amount
$’000
Past due and
Past due but not
Within initial trade
impaired
$’000
impaired
$’000
terms
$’000
-
-
-
113,667
113,667
73,461
73,461
25,265
88,402
25,265
88,402
12,652
60,809
12,652
60,809
-
-
-
Note
2017
$’000
2016
$’000
113,667
73,461
-
-
113,667
73,461
14
14
-
9,675
9,675
7,114
883
7,997
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
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
103
1,653
1,756
2016
$’000
244
1,900
2,144
472,703
(351,877)
120,826
462,646
(315,797)
146,850
13,317
(9,728)
3,589
3,180
(419)
2,761
1,080
(1,080)
-
419
(146)
273
2,400
(944)
1,456
12,194
(8,297)
3,897
2,327
(397)
1,930
1,080
(1,080)
-
163
(106)
57
2,102
(668)
1,434
124,688
128,905
150,804
154,167
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 2017 there have been no indicators of impairment.
57
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
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.
Land and Buildings
Plant and
equipment
Motor Vehicles
Leased plant and
equipment
Consolidated:
$’000
$’000
$’000
$’000
Low
value
pool
$’000
Leasehold
improvements
$’000
Total
$’000
Opening balance at 1 July 2015
-
Additions
Additions through Business
Combinations
Disposals
Depreciation expense
Balance at 30 June 2016
110
1,820
-
-
1,930
155,400
34,601
14,946
(3,127)
(54,970)
146,850
1,646
-
61
1,457
158,564
-
-
-
4,046
(305)
(1,490)
3,897
-
5
-
-
-
-
(9)
57
130
34,841
4
20,821
(4)
(3,436)
(154)
(56,623)
1,433
154,167
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Opening balance at 1 July 2016
1,930
146,850
3,897
-
57
1,433
154,167
Additions
Additions through Business
Combinations
Disposals
Foreign Currency movements
Depreciation expense
Balance at 30 June 2017
853
28,548
1,948
-
30
71
31,450
5,321
(9,537)
174
(870)
192
107
5,794
-
-
-
-
(10,407)
-
-
-
-
-
-
-
- 22
2,761
(50,356)
120,826
(1,560)
3,589
-
-
(6)
273
(155)
(52,099)
1,456
128,905
NOTE 14. LOANS TO OTHER COMPANIES
Loans to Other Companies - current
Loans to Other Companies - non current
Includes short term loans to clients
NOTE 15. AVAILABLE FOR SALE FINANCIAL ASSETS
Shares in Listed corporations at Fair Value - current
Shares in Listed corporations at Fair Value - non current
Note
2017
$’000
9,675
-
9,675
-
1,648
1,648
2016
$’000
7,114
883
7,997
-
851
851
58
MACA LIMITED ANNUAL REPORT 2017 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
Losses
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
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
2016
$’000
3,428
1,028
107
107
3,611
3,596
830
8,037
5,620
2,310
-
7,930
113
(6)
-
107
113
113
3,012
2,019
702
5,733
5,994
(175)
(199)
5,620
94
19
-
113
59
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
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
Losses:
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
Note
2017
$’000
2016
$’000
3,012
599
3,611
2,019
1,577
3,596
702
128
-
830
3,442
(430)
3,012
1,596
423
2,019
503
398
(199)
702
48,483
15,559
64,042
28,046
4,817
32,863
64,042
-
64,042
32,863
-
32,863
60
MACA LIMITED ANNUAL REPORT 2017 Note
2017
$’000
2016
$’000
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
2016
$’000
The movement in deferred tax assets for each temporary
difference during the year is as follows:
NOTE 16. TAX (cont)
iii. Deferred tax assets
Provisions:
Opening balance
Credit to income statement
Closing balance
Losses:
Opening balance
Closing balance
Other:
Opening balance
(Charge) / Credit to income statement
(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
3,012
599
3,611
2,019
1,577
3,596
702
128
-
830
3,442
(430)
3,012
1,596
423
2,019
503
398
(199)
702
48,483
15,559
64,042
28,046
4,817
32,863
-
64,042
64,042
32,863
-
32,863
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 and bank
guarantee facilities totalling $10.0 million. At 30 June 2017 the
amount drawn on the facility was $8.3 million (2016: $2.4
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.
21,838
21,838
25,980
25,980
47,818
47,818
60,291
60,291
39,210
39,210
34,499
34,499
73,709
73,709
98,842
98,842
10,402
9,954
Employee entitlements
Total
9,954
11,066
(10,618)
10,402
9,282
11,619
(10,947)
9,954
61
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
Note
NOTE 20. ISSUED CAPITAL
234,343,334 (2016: 232,676,373) Fully paid ordinary shares
(a) Ordinary shares:
At the beginning of the reporting period
Shares issued during the year
- 9 September 2016 Conversion of Performance Rights
- 15 December 2016 Consideration for Acquisition of Interquip
Shares at reporting date
2017
$’000
211,333
No.
2016
$’000
208,816
No.
232,676,373
232,676,373
196,373
1,470,588
234,343,334
-
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.
Note
18
10
2017
$’000
47,818
(112,008)
(64,190)
269,727
205,537
(31%)
2016
$’000
73,709
(115,602)
(41,893)
255,633
213,739
(20%)
10,694
11,520
10,694
11,520
-
-
-
-
10,694
11,520
24,079
26,534
-
50,613
(2,795)
47,818
41,330
36,802
-
78,132
(4,423)
73,709
Total borrowings
Less cash and cash equivalents
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
62
MACA LIMITED ANNUAL REPORT 2017 NOTE 20. ISSUED CAPITAL
234,343,334 (2016: 232,676,373) Fully paid ordinary shares
(a) Ordinary shares:
At the beginning of the reporting period
Shares issued during the year
- 9 September 2016 Conversion of Performance Rights
- 15 December 2016 Consideration for Acquisition of Interquip
Shares at reporting date
2017
$’000
211,333
No.
2016
$’000
208,816
No.
232,676,373
232,676,373
196,373
1,470,588
234,343,334
-
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.
Note
Note
18
10
Total borrowings
Less cash and cash equivalents
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
2017
$’000
47,818
(112,008)
(64,190)
269,727
205,537
(31%)
24,079
26,534
-
50,613
(2,795)
47,818
2016
$’000
73,709
(115,602)
(41,893)
255,633
213,739
(20%)
-
-
-
41,330
36,802
78,132
(4,423)
73,709
10,694
11,520
10,694
11,520
-
-
10,694
11,520
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
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
2016
$’000
1,578
3,984
-
5,562
1,576
4,467
-
6,043
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 2017: $9.4 million
(2016: $3.2 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.
63
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
NOTE 23. OPERATING SEGMENTS (cont)
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the
segment. 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 2017
Revenue
Total reportable segment revenue
Other Revenue
Total revenue
Earnings before interest, tax, depreciation and amortisation
Depreciation and amortisation
Interest Revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
1 Structural, Mechanical and Piping business
Mining
$’000
Civil /
Infrastructure /
SMP1
$’000
Unallocated
Total
$’000
$’000
423,698 72,580
-
496,278
480 99
1,065
1,644
424,178
72,679
1,065
497,922
102,693
(50,667)
(3,186)
(966)
98,541
(1,432)
-
(52,099)
384 31
1,065
(3,515)
48,895
(299)
-
(4,886)
99
248,705 51,908 94,911
93,410 29,187
3,200
1,480
(3,814)
44,108
(12,915)
31,193
395,524
395,524
125,797
125,797
23,171
8,279
-
31,450
64
MACA LIMITED ANNUAL REPORT 2017 Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the
segment. Segment liabilities include trade and other payables and certain direct borrowings.
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
NOTE 23. OPERATING SEGMENTS (cont)
Segment liabilities
Unallocated items
Consolidated - June 2017
Total reportable segment revenue
Revenue
Other Revenue
Total revenue
Depreciation and amortisation
Interest Revenue
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
1 Structural, Mechanical and Piping business
Earnings before interest, tax, depreciation and amortisation
Mining
Infrastructure /
Unallocated
Total
$’000
$’000
$’000
Civil /
SMP1
$’000
423,698 72,580
-
496,278
480 99
1,065
1,644
424,178
72,679
1,065
497,922
102,693
(50,667)
(3,186)
(966)
98,541
(1,432)
-
(52,099)
384 31
1,065
(3,515)
48,895
(299)
-
(4,886)
99
1,480
(3,814)
44,108
(12,915)
31,193
395,524
395,524
125,797
125,797
93,410 29,187
3,200
23,171
8,279
-
31,450
NOTE 23. OPERATING SEGMENTS (Cont.)
Consolidated - June 2016
Revenue
Total reportable segment revenue
Other Revenue
Total revenue
NOTES TO THE FINANCIAL STATEMENTS
Mining
$’000
Civil /
$’000
Unallocated
$’000
Total
$’000
396,209
2,661
398,871
30,927
-
427,137
(98)
30,829
1,724
1,724
4,287
431,424
Earnings before interest, tax, depreciation, amortisation and
impairments
Depreciation and amortisation
95,597
(56,356)
(3,969)
(735)
90,893
(267)
-
(56,623)
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
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
248,705 51,908 94,911
Geographical information
Australia
Brazil
Total
Major customers
71
134
1,724
(2,558)
-
-
36,754
(4,102)
989
255,906
18,246
99,148
91,818
11,572
14,277
1,929
(2,558)
33,641
(9,411)
24,230
373,300
373,300
117,667
117,667
54,472
1,190
-
55,662
Revenue
Non-current assets
2017
$’000
2016
$’000
2017
$’000
2016
$’000
416,573
349,606 107,375
81,349
81,818 37,741
497,922
431,424
145,116
111,980
52,841
164,821
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 40%, 15% and 13% of external revenue. (2016: 35%, 19% and 16%). The next
most significant client accounts for 8% (2016: 5%) of external revenue.
65
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
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
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
2017
$’000
2016
$’000
112,008
115,602
-
-
112,008
115,602
31,193
24,231
52,099
(1,125)
-
1,584
103
(36,481)
(490)
1,189
22,251
2,348
(2,433)
(2,096)
68,142
56,623
(697)
1,734
85
277
23,143
931
(2,451)
(39,310)
(1,857)
374
1,050
64,133
(c) Non-cash financing and Investing Activities
During the year the economic entity acquired $9.5 million in plant and
equipment (2016: $nil) by means of finance leases. These acquisitions are not
reflected in the statement of cash flows.
(d) Acquisition of Entities
During the year the economic entity funded a portion of the acquisition of
Interquip using shares to the value of $2.4million (2016: nil).
66
MACA LIMITED ANNUAL REPORT 2017 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
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 acquired $9.5 million in plant and
equipment (2016: $nil) by means of finance leases. These acquisitions are not
reflected in the statement of cash flows.
(d) Acquisition of Entities
During the year the economic entity funded a portion of the acquisition of
Interquip using shares to the value of $2.4million (2016: nil).
112,008
115,602
-
-
112,008
115,602
31,193
24,231
52,099
103
(1,125)
-
1,584
(36,481)
(490)
1,189
22,251
2,348
(2,433)
(2,096)
68,142
56,623
(697)
1,734
85
277
23,143
931
(2,451)
(39,310)
(1,857)
374
1,050
64,133
NOTES TO THE FINANCIAL STATEMENTS
2017
$’000
2016
$’000
NOTE 24. CASH FLOW INFORMATION (Cont.)
Interquip Pty Ltd (Interquip)
On 15 December 2016, MACA acquired 60% of the ordinary share capital and voting rights in Interquip
as described in note 5:
Purchase consideration:
Non Cash Consideration
Cash Consideration exchanged
Total consideration
Cash acquired:
Cash held by Interquip at date of acquisition
Cash out-flow on acquisition
Assets and liabilities held at acquisition date (excluding cash) excluded from the
consolidated statement of cash flow:
Trade and other receivables
WIP and Inventory
Other Assets
Property, plant, and equipment
Land and Building
Trade and other payables
Financial liabilities
Other Liabilities
2017
$’000
(3,900)
(5,600)
(9,500)
3,073
(2,527)
5,995
4,334
74
5,687
107
(4,216)
(1,214)
(3,570)
NOTE 25. SHARE-BASED PAYMENTS
(a) Options
There were no options issued for the year ended 30 June 2017. 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 2017 financial year 1,196,083 performance rights were granted under the Group’s Performance Rights Plan and
1,042,254 are intended to be issued after the end of the financial year, and 407,768 performance rights were forfeited. Subject to
the achievement of designated performance hurdles, these performance rights will vest in June 2019 (2016:1,955,782). As at 30
June 2017 there were 2,528,307 performance rights outstanding of which 1,486,053 had been issued.
The following performance rights arrangement was in existence at 30 June 2017:
Unlisted Performance Rights
Unlisted Performance Rights
Unlisted Performance Rights
Number
568,143
1,486,053
1,042,254
Expiry Date
30-Jun-17
30-Jun-18
30-Jun-19
67
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
NOTE 25. SHARE-BASED PAYMENTS (Cont.)
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
2017
Number
2,569,967
1,196,083
(261,830)
(407,770)
3,096,450
(568,143)
2016
Number
925,331
1,955,782
-
(311,146)
2,569,967
(261,830)
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 2017 was $0.63 per right. The
total share based payment expense for the year ended 30 June 2017 relating to the grant of performance rights in the statement
of profit or loss is $103k (2016: 232k). Inputs used to determine the fair value of performance rights granted during the year
ended 30 June 2017 were:
a)
b)
c)
d)
e)
f)
Share price $1.13 being the 30 day VWAP of the Company on the last trading day prior to 30 June 2016
Exercise price: Nil
Volatility: 41.9%
Option life: 3 years
Dividend yield: 5.2%
Risk Free Rate 1.55%
NOTE 26. EVENTS AFTER THE BALANCE SHEET DATE
No matters or 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.
Country of
Incorporation
Percentage Owned (%)
2017
2016
Australia
-
-
Australia
Australia
Australia
Australia
Australia
Brazil
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
50%
60%
100%
100%
100%
100%
100%
100%
100%
75%
60%
-
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
MACA Infrastructure Pty Ltd
Marniyarra Mining and Civils Pty Ltd
Interquip Pty Ltd
68
MACA LIMITED ANNUAL REPORT 2017 local money market instruments, short-term
instruments consist mainly of deposits with banks,
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
2016
$’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.
NOTE 25. SHARE-BASED PAYMENTS (Cont.)
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
2017
Number
2,569,967
1,196,083
(261,830)
(407,770)
2016
Number
925,331
1,955,782
-
(311,146)
3,096,450
2,569,967
(568,143)
(261,830)
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 2017 was $0.63 per right. The
total share based payment expense for the year ended 30 June 2017 relating to the grant of performance rights in the statement
of profit or loss is $103k (2016: 232k). Inputs used to determine the fair value of performance rights granted during the year
ended 30 June 2017 were:
Share price $1.13 being the 30 day VWAP of the Company on the last trading day prior to 30 June 2016
a)
b)
c)
d)
e)
f)
Exercise price: Nil
Volatility: 41.9%
Option life: 3 years
Dividend yield: 5.2%
Risk Free Rate 1.55%
NOTE 26. EVENTS AFTER THE BALANCE SHEET DATE
No matters or 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.
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
MACA Infrastructure Pty Ltd
Marniyarra Mining and Civils Pty Ltd
Interquip Pty Ltd
Country of
Incorporation
Percentage Owned (%)
2017
2016
Australia
Australia
Australia
Australia
Australia
Brazil
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
50%
60%
100%
100%
100%
100%
100%
100%
100%
75%
60%
-
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
112,008
115,602
11(b)
14
113,667
9,675
15
17
18
1,648
236,998
64,042
47,818
111,860
73,461
7,997
851
197,911
32,863
73,709
106,572
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.
Australia
-
-
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.
69
MACA LIMITED ANNUAL REPORT 2017 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 29 for details).
The Group has approximately 32.1% (2016: 43.9%) 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
2017
2016
2017
2016
2017
2016
2017
2016
‘000
‘000
‘000
‘000
‘000
‘000
‘000
‘000
64,042
32,863
-
-
-
- 64,042
32,863
21,838
39,210
25,980
34,499
-
- 47,818
73,709
85,880
72,073
25,980
34,499
-
- 111,860 106,572
85,880
72,073
25,980
34,499
-
- 111,860 106,572
112,008 115,602
-
-
-
- 112,008 115,602
123,342
80,575
0
883
-
- 123,342
81,458
-
-
1,648
851
-
-
1,648
851
235,350 196,177
1,648
1,734
-
- 236,998 197,911
149,470 124,104
(24,332)
(32,765)
-
- 125,138
91,339
Financial assets pledged as collateral. No financial assets have been pledged as security for debt.
70
MACA LIMITED ANNUAL REPORT 2017 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 29 for details).
The Group has approximately 32.1% (2016: 43.9%) 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
Credit risk related to balances held with banks and other financial institutions are only invested with counterparties with a
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;
-
-
-
-
-
-
-
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.
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
2017
2016
2017
2016
2017
2016
2017
2016
‘000
‘000
‘000
‘000
‘000
‘000
‘000
‘000
64,042
32,863
-
-
-
- 64,042
32,863
21,838
39,210
25,980
34,499
-
- 47,818
73,709
85,880
72,073
25,980
34,499
-
- 111,860 106,572
85,880
72,073
25,980
34,499
-
- 111,860 106,572
112,008 115,602
-
-
-
- 112,008 115,602
123,342
80,575
0
883
-
- 123,342
81,458
-
-
1,648
851
-
-
1,648
851
235,350 196,177
1,648
1,734
-
- 236,998 197,911
149,470 124,104
(24,332)
(32,765)
-
- 125,138
91,339
Financial assets pledged as collateral. No financial assets have been pledged as security for debt.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 28. FINANCIAL RISK MANAGEMENT (cont)
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:
Fixed Interest Rate
Floating Interest
Rate
Within 1 Year
1 to 5 Years
Non-interest Bearing
Total
Weighted Average
Effective Interest
Rate
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
%
%
112,008
115,602
- - - - - - 112,008
115,602 1.69
- - - - - - 123,342
81,458
123,342
81,458
N/A
112,008
115,602
- - - - 123,342
81,458
235,350
197,060
- -
21,838
39,210
25,980
34,499
- -
47,818
73,709 4.97
- - - - - - 64,042
32,863
64,042
32,863
N/A
- - 21,838
39,210
25,980
34,499
64,042
32,863 111,860 106,572
2.09
N/A
4.55
N/A
Financial Assets:
Cash
Trade and other receivables
Total Financial Assets
Financial Liabilities:
Finance lease
Trade and other payables
Total Financial Liabilities
ii. Price Risk
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 2017
+/- 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 2016
+/- 2% on interest rates
+/- 10% in listed investments
+/- 10% in AUD/BRL exchange rate
+/- 10% in AUD/USD exchange rate
Profit
$’000
+/- 1,213
+/- 165
+/- 952
+/- 1,410
+/- 1,110
+/- 81
+/- 300
+/- 0
Equity
$’000
+/- 1,213
+/- 165
+/- 2,503
+/- 1,410
+/- 1,110
+/- 81
+/- 1,971
+/- 0
71
MACA LIMITED ANNUAL REPORT 2017 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:
-
-
-
Level 1 - quoted prices in active markets for identical assets or liabilities;
Level 2 - 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); and
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
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
2017
$’000
2016
$’000
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
72
193,917
313,732
3,168
3,200
303,740
707
6,085
310,532
21,142
21,142
200,461
308,027
319
357
301,339
604
5,727
307,670
27,747
27,747
MACA LIMITED ANNUAL REPORT 2017 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:
-
-
-
Level 1 - quoted prices in active markets for identical assets or liabilities;
Level 2 - 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); and
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
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
2017
$’000
2016
$’000
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
193,917
313,732
3,168
3,200
303,740
707
6,085
310,532
21,142
21,142
200,461
308,027
319
357
301,339
604
5,727
307,670
27,747
27,747
NOTES TO THE FINANCIAL STATEMENTS
Note
2017
$’000
2016
$’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
On the 4th of July 2017 the liquidators of Kimberley Diamond Company Pty Ltd filed a claim for an unfair preference payment in
the amount of $1.4 million. The company is vigorously defending the claim. Other than this legal action and the gurantees
described in note 22 there were no contingent liabilities as at 30 June 2017 (2016: 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
32,532
25,980
-
58,512
50,730
34,499
-
85,229
The registered office is:
MACA Limited
45 Division Street
Welshpool, Western Australia 6106
The principal place of business is:
MACA Limited
45 Division Street
Welshpool, Western Australia, 6106
73
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
NOTE 31. RELATED PARTY TRANSACTIONS
(a) The Group’s main related parties are as follows:
i. Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or
indirectly, including any director (whether executive or otherwise) of that entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 7: Interests of Key Management Personnel (KMP).
Information regarding individual directors or executives remuneration is provided in the Remuneration Report included in the
Director’s Report.
ii. Other related parties
Other related parties include entities over which key management personnel exercise significant influence.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
Transactions with related parties:
Other related parties:
Key management person and/or related party
Transaction
Partnership comprising entities controlled by current director
Mr G.Baker and former directors Mr J.Moore, Mr D.Edwards &
Mr F.Maher.
Expense - Rent on Division St Business
premises.
2017
2016
$
$
1,589,382
1,530,560
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 - Mining consulting fees
8,780
37,070
Expense - Consulting fees
41,962
74,498
Expense - hire of equipment and purchase of
equipment, parts and services.
1,922,082
894,052
Revenue - sale of equipment
-
320,320
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.
NOTE 32. RESERVES
a. General Reserve
110,000
21,330
The general reserve records funds associated with the acquisition of non-controlling interests of a controlled entity from previous
years.
b. Option Reserve
The option reserve records items recognised as share based payments/expenses on valuation of employee share options or
performance rights.
c. FX Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
74
MACA LIMITED ANNUAL REPORT 2017 NOTE 31. RELATED PARTY TRANSACTIONS
(a) The Group’s main related parties are as follows:
i. Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or
indirectly, including any director (whether executive or otherwise) of that entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 7: Interests of Key Management Personnel (KMP).
Information regarding individual directors or executives remuneration is provided in the Remuneration Report included in the
Other related parties include entities over which key management personnel exercise significant influence.
Director’s Report.
ii. Other related parties
other parties unless otherwise stated.
Transactions with related parties:
Other related parties:
Key management person and/or related party
Transaction
2017
2016
$
$
Partnership comprising entities controlled by current director
Expense - Rent on Division St Business
1,589,382
1,530,560
Mr G.Baker and former directors Mr J.Moore, Mr D.Edwards &
premises.
Kirk Mining Consultants - a company controlled by current
Expense - Mining consulting fees
8,780
37,070
Hensman Properties Pty Ltd - a company controlled by current
Expense - Consulting fees
41,962
74,498
Mr F.Maher.
director Mr L.Kirk.
director Mr R.Ryan.
Gateway Equipment Parts & Services Pty Ltd - a company
Expense - hire of equipment and purchase of
1,922,082
894,052
controlled by director Mr G.Baker and former directors
equipment, parts and services.
Mr D.Edwards, Mr F.Maher and Mr J.Moore.
Gateway Equipment Parts & Services Pty Ltd - a company
Revenue - sale of equipment
-
320,320
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 January
-
4,703,253
shareholder in Alliance Contracting Pty Ltd.
2016
110,000
21,330
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.
NOTE 32. RESERVES
a. General Reserve
years.
b. Option Reserve
performance rights.
c. FX Translation Reserve
The general reserve records funds associated with the acquisition of non-controlling interests of a controlled entity from previous
The option reserve records items recognised as share based payments/expenses on valuation of employee share options or
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 33. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an assessment of
the potential impact of such pronouncements on the Group when adopted in future periods, are discussed below:
(i) AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or
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.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
The Directors do not anticipate that the adoption of AASB 9 will have any significant impact on the Group’s financial statements.
(ii) AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 July 2018, as
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.
The Directors do not anticipate that the adoption of AASB 15 will have any significant impact on the Group’s financial statements.
(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
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.
The Directors do not anticipate that the adoption of AASB 16 will have any significant impact on the Group’s financial statements.
The Company has an operating lease in relation to the business premises it conducts business from. All other operating leases
currently held by the Company are immaterial.
75
MACA LIMITED ANNUAL REPORT 2017 NOTES TO THE FINANCIAL STATEMENTS
NOTE 33. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED (cont.)
(v) AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and
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.
76
MACA LIMITED ANNUAL REPORT 2017 NOTE 33. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED (cont.)
(v) AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and
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.
DIRECTOR’S DECLARATION
for the year ended 30 June 2017
Director’s Declaration
The directors of the company declare that:
1. The financial statements set out on pages 40 to 76 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 2017 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 28th day of September 2017
MACA LIMITED ANNUAL REPORT 2017
MACA LIMITED ANNUAL REPORT 2017
77
77
INDEPENDENT AUDIT REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF MACA LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
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.moorestephens.com.au
We have audited the financial report of MACA Limited (the Company and its subsidiaries) (the “Group”), which
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the “Code”) that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Group, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
78
MACA LIMITED ANNUAL REPORT 2017
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.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF MACA LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
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.moorestephens.com.au
We have audited the financial report of MACA Limited (the Company and its subsidiaries) (the “Group”), which
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the “Code”) that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Group, would be in the same terms if given to the directors as at the time of this
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
2001, including:
i.
ii.
Basis for Opinion
with the Code.
auditor’s report.
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
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.
INDEPENDENT AUDIT REPORT
Key Audit Matters (continued)
Existence and Ownership of Assets – Plant and Equipment
Refer to Note 13 “Property, Plant and Equipment”
Existence and ownership of plant and equipment is
a key audit matter.
It is due to the size of this account balance and the
location of plant and equipment (most located at
client sites throughout Australia and overseas i.e.
Brazil) that this is a key area of audit focus.
Our procedures included:
• We agreed a sample of plant and equipment
additions to supplier invoices and to Capital
Expenditure Request Forms (for appropriate
authority);
• We agreed a sample of plant and equipment to
Recognition of Revenue
Refer to Note 2 “Revenue and Other Income”
The Group’s largest revenue stream relates to the
rendering of mining services, all of which are based
on contracts which determine the services, products
and rates to be charged.
The accurate recording of revenue
dependent upon the following key factors;
• Knowledge of the individual characteristics and
is highly
status of contracts;
• Management’s invoicing process including;
− accurate measurement of work done and
services provided each month
− invoices prepared
in compliance with
contract terms such as services performed
and rates charged;
• Determination of
variations and
claims,
including compliance with contractual terms and
an assessment of when the Group believes it is
probable that the amount will be approved and
thus recovered from the customer.
We focused on this matter as a key audit matter due
to the significance of revenue to the Group
combined with the need to comply with a variety of
contractual conditions, leading to judgemental risk
associated with revenue recognition.
hire purchase financing agreements;
• We agreed a sample of plant and equipment in
Australia and Brazil by obtaining date stamped
photographs and videos taken by senior MACA
personnel.
Our procedures included, amongst others:
• We
evaluated management’s
processes
regarding existence and valuation of the Group’s
contract revenues. We tested internal controls
in relation to preparation and authorisation of
monthly revenue invoices for compliance with
the Group’s policy;
• We selected a sample of sales invoices raised
during the year and performed the following
procedures;
− agreed to contractual terms and rates
− agreed to general
ledger accounts and
subsequent receipts from the customer
− for variations or claims we checked they
were in accordance with contract terms and
evaluated for risk of non-recovery;
• We evaluated contract performance during and
subsequent to year end to audit opinion date to
reflect on year end revenue recognition
judgements.
MACA LIMITED ANNUAL REPORT 2017
79
INDEPENDENT AUDIT REPORT
Key Matters (continued)
Valuation of Receivables
Refer to Note 11 “Trade and Other Receivables” and to Note 14 “Loans to Other Companies”
Valuation of receivables is a key audit matter.
It is due to the size of the account balances and the
judgements required in determining their carrying
value that this is a key area of audit focus.
Loans to Other Companies as set out in Note 14,
amounting to $9.68 million (after right of set-off) as
at 30 June 2017, represent a net receivable owing to
the Group by Beadell Resources Limited.
The loan receivable is material to the Group.
• Discussion with management as to the existence
of any disputes with debtors, review of
correspondence and assessment of impairment
provisions raised by management;
Our procedures included, amongst others:
• Review of subsequent receipt collections from
• Confirmations with selected trade debtors
debtors and ageing analysis post year end;
where considered necessary;
• Assessment of the financial viability of debtors,
where considered necessary;
• In relation to balances between the Group and
Beadell Resources Limited we obtained direct
confirmation from Beadell Resources Limited
and agreed the set off arrangement to the set-
off deed between the two companies.
Our procedures included, amongst others:
• We assessed management’s determination of
the Group’s CGUs based on our understanding
of the nature of the Group’s business. We also
analysed the internal reporting of the Group to
assess how earnings streams are monitored and
reported;
• Assessing the value in use model, including
checking the mathematical accuracy;
• Reconciling input data to supporting evidence,
such as approved budgets, discount rates, etc;
the
• Challenging
reasonableness of
key
assumptions, such as those relating to forecast
revenue, growth rates and discount rates, based
on our knowledge of the business and industry;
• Performing sensitivity analysis using a range of
reasonable inputs such as alternative growth
rates and discount rates;
Review of disclosure in the financial statements
to ensure appropriate and adequate.
balances
incorporated
Impairment of Goodwill
Refer to Note 5 “Goodwill”
At 30 June 2017 the Group’s statement of financial
position
includes goodwill of $6.53 million,
contained within 3 cash generating units (“CGUs”).
The assessment of impairment of the Group’s
goodwill
significant
judgement in respect of factors such as discount
rates, underlying cashflows (in particular future
revenue growth), as well as economic assumptions
such as inflation rates.
The sectors in which the Group operated during the
period have experienced the impacts of a decline in
economic conditions along with volatile commodity
prices.
A key audit matter for us was whether the Group’s
value
included
appropriate consideration of these factors on their
significant estimates and judgements.
in use model for
impairment
80
MACA LIMITED ANNUAL REPORT 2017
Key Matters (continued)
Valuation of Receivables
Refer to Note 11 “Trade and Other Receivables” and to Note 14 “Loans to Other Companies”
Valuation of receivables is a key audit matter.
Our procedures included, amongst others:
It is due to the size of the account balances and the
judgements required in determining their carrying
• Review of subsequent receipt collections from
debtors and ageing analysis post year end;
value that this is a key area of audit focus.
Loans to Other Companies as set out in Note 14,
amounting to $9.68 million (after right of set-off) as
at 30 June 2017, represent a net receivable owing to
the Group by Beadell Resources Limited.
The loan receivable is material to the Group.
• Confirmations with selected trade debtors
where considered necessary;
• Discussion with management as to the existence
of any disputes with debtors, review of
correspondence and assessment of impairment
provisions raised by management;
• Assessment of the financial viability of debtors,
where considered necessary;
• In relation to balances between the Group and
Beadell Resources Limited we obtained direct
confirmation from Beadell Resources Limited
and agreed the set off arrangement to the set-
off deed between the two companies.
• We assessed management’s determination of
the Group’s CGUs based on our understanding
of the nature of the Group’s business. We also
analysed the internal reporting of the Group to
assess how earnings streams are monitored and
reported;
• Assessing the value in use model, including
checking the mathematical accuracy;
• Reconciling input data to supporting evidence,
such as approved budgets, discount rates, etc;
• Challenging
the
reasonableness of
key
assumptions, such as those relating to forecast
revenue, growth rates and discount rates, based
on our knowledge of the business and industry;
• Performing sensitivity analysis using a range of
reasonable inputs such as alternative growth
rates and discount rates;
Review of disclosure in the financial statements
to ensure appropriate and adequate.
At 30 June 2017 the Group’s statement of financial
Our procedures included, amongst others:
Impairment of Goodwill
Refer to Note 5 “Goodwill”
position
includes goodwill of $6.53 million,
contained within 3 cash generating units (“CGUs”).
The assessment of impairment of the Group’s
goodwill
balances
incorporated
significant
judgement in respect of factors such as discount
rates, underlying cashflows (in particular future
revenue growth), as well as economic assumptions
such as inflation rates.
The sectors in which the Group operated during the
period have experienced the impacts of a decline in
economic conditions along with volatile commodity
prices.
A key audit matter for us was whether the Group’s
value
in use model for
impairment
included
appropriate consideration of these factors on their
significant estimates and judgements.
Key Matters (continued)
Acquisition of Interquip Pty Ltd
Refer to Note 5 “Business Combinations”
On 15 December 2016 the Group acquired a 60%
controlling interest in Interquip Pty Ltd for total
consideration of $9.5 million.
Accounting for this transaction is complex, requiring
management to exercise judgement to determine
the fair value of contingent consideration, the fair
value of acquired assets and liabilities, including the
allocation of purchase consideration to goodwill and
separately identifiable intangible assets.
This is a key audit matter due to the significance of
the acquisition and
in
accounting for the transaction.
judgement
involved
INDEPENDENT AUDIT REPORT
Our procedures included, amongst others:
• We read the sale and purchase agreement to
understand the key terms and conditions;
• We assessed whether this acquisition should be
for under AASB 3 Business
accounted
Combinations or AASB 116 Property, Plant and
Equipment – the Group accounted for it as an
acquisition of a business under AASB3;
• Evaluating the fair value model developed by
management to determine the fair value of
contingent consideration and the acquired fair
value of assets and liabilities;
• Assessing the acquisition date determined by
management;
Review of disclosure in the financial statements
to ensure they are appropriate and adequate.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
MACA LIMITED ANNUAL REPORT 2017
81
INDEPENDENT AUDIT REPORT
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, international omissions, misrepresentation, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
82
MACA LIMITED ANNUAL REPORT 2017
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, international omissions, misrepresentation, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
during our audit.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
INDEPENDENT AUDIT REPORT
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 19 to 32 of the directors’ report for the year
ended 30 June 2017.
In our opinion, the Remuneration Report of MACA Limited, for the year ended 30 June 2017 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
NEIL PACE
PARTNER
MOORE STEPHENS
CHARTERED ACCOUNTANTS
Signed at Perth on the 28th day of September 2017
MACA LIMITED ANNUAL REPORT 2017
83
SHAREHOLDER INFORMATION
as at 12 September 2017
Shareholder Information
As at 12 September 2017
1. Numbers of Holders of Equity Securities
a. Ordinary Share Capital
234,343,334 fully paid ordinary shares are held by 2,034 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 2017
Total Holders
Units
% of issued capital
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 999,999,999
Total
417 201,613
705
2,079,404
372
3,008,423
492
48
2,034
14,161,702
214,892,192
234,343,334
e. Substantial Share and Option Holders
The names of the substantial shareholders listed in the Company’s register as at 12 September 2017:
PERPETUAL INVESTMENTS LTD
MR KENNETH RUDY KAMON
PARADICE INVESTMENT MANAGEMENT PTY LTD
GEMBLUE NOMINEES PTY LTD
1
2
3
4
5
MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER
12,300,000
There were no substantial option holders listed in the Company’s register as at 12 September 2017.
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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MACA LIMITED ANNUAL REPORT 2017
0.09
0.89
1.28
6.04
91.70
100.00
Number
17,482,553
17,275,633
14,699,892
12,500,000
234,343,334 fully paid ordinary shares are held by 2,034 individual shareholders.
Name
Number
Percentage
SHAREHOLDER INFORMATION
g. Unmarketable Parcels
As at 12 September 2017, there were 128 holders who held shares that were unmarketable parcels.
2. Twenty Largest Shareholders
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
MR KENNETH RUDY KAMON
GEMBLUE NOMINEES PTY LTD
55,016,178
29,763,489
28,419,406
17,275,633
12,500,000
MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER
12,300,000
NATIONAL NOMINEES LIMITED
MINING & CIVIL MANAGEMENT SERVICES PTY LTD
MR JAMES EDWARD MOORE + MS JULIA CATHERINE MOORE
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BRISPOT NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR KENNETH JOSEPH HALL
AUST EXECUTOR TRUSTEES LTD
MS TINA HARDY
ZERO NOMINEES PTY LTD
ECAPITAL NOMINEES PTY LIMITED
12,019,327
6,818,000
6,000,000
5,228,034
3,691,666
3,592,841
2,567,320
2,261,956
1,945,531
1,590,352
1,542,987
1,470,588
1,291,000
1,028,591
23.5%
12.7%
12.1%
7.4%
5.3%
5.2%
5.1%
2.9%
2.6%
2.2%
1.6%
1.5%
1.1%
1.0%
0.8%
0.7%
0.7%
0.6%
0.6%
0.4%
Total
Top 20 Holders of Ordinary Fully Paid Shares
195,034,589
83.8%
3. Twenty Largest Listed Option Holders
There were no listed options at the date of this report.
MR FRANCIS JOSEPH MAHER + MS SHARON JANE MAHER
12,300,000
4. Restricted Securities
There were no substantial option holders listed in the Company’s register as at 12 September 2017.
There were no restricted securities at the date of this report.
Shareholder Information
As at 12 September 2017
1. Numbers of Holders of Equity Securities
a. Ordinary Share Capital
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 2017
Total Holders
Units
% of issued capital
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 999,999,999
Total
417 201,613
705
2,079,404
372
3,008,423
492
14,161,702
48
214,892,192
2,034
234,343,334
e. Substantial Share and Option Holders
The names of the substantial shareholders listed in the Company’s register as at 12 September 2017:
PERPETUAL INVESTMENTS LTD
MR KENNETH RUDY KAMON
PARADICE INVESTMENT MANAGEMENT PTY LTD
GEMBLUE NOMINEES PTY LTD
1
2
3
4
5
0.09
0.89
1.28
6.04
91.70
100.00
Number
17,482,553
17,275,633
14,699,892
12,500,000
f. Other Information
voting rights.
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
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MACA LIMITED ANNUAL REPORT 2017
MACA LIMITED ANNUAL REPORT 2017
MACA Limited and its Controlled Entities
ABN 42 144 745 782
www.maca.net.au