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PentairMACA LIMITED
ANNUAL REPORT
2020
CORPORATE
DIRECTORY
MACA LIMITED
ABN 42 144 745 782
DIRECTORS
Andrew Edwards
Non-Executive Chairman
Mike Sutton
Chief Executive Offi cer
& Managing Director
Geoff Baker
Executive Director
Linton Kirk
Non-Executive Director
Robert Ryan
Non-Executive Director
Peter Gilford
Company Secretary
REGISTERED OFFICE
45 Division Street
WELSHPOOL WA 6106
Telephone (08) 6242 2600
SOLICITORS
Aphelion Legal
Corporate and Commercial Law
PO Box 8250, South Perth,
PERTH WA 6151
AUDITORS
Moore Australia Audit (WA)
Exchange Tower
2 The Esplanade
PERTH WA 6000
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
www.maca.net.au
1
MACA LIMITED ANNUAL REPORT 2020
CONTENTS
About Us
Corporate Directory
About Us
Operating Businesses
History
Leadership
Executive Leadership Team
Board of Directors
Operational Review
Chairman’s Address
Managing Director’s Review of Operations
FY 20 Key Points
Areas of Activity
Directors’ Report
Remuneration Report
Financial Report
Auditor’s Independence Declaration
Corporate Governance Statement Checklist
Directors’ Declaration
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Sections to the Financial Statements
Independent Audit Report
Shareholder Information
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MACA LIMITED ANNUAL REPORT 2020
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MACA is a publicly
listed domestic and
international contracting
group providing services
to the mining and
construction industries
With our team of highly
skilled and dedicated
professionals, we provide
tailored solutions to meet
the need of all our clients
and end-users
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MACA LIMITED ANNUAL REPORT 2020
ABOUT US
OUR VISION
Be Number 1
in what we do
CORE VALUES
PEOPLE FIRST
We care for people and create a safe and enjoyable workplace.
We treat them fairly, with integrity, honesty and respect
EXCEED EXPECTATIONS
We strive to exceed expectations of our people, clients and shareholders
CONTINUOUS IMPROVEMENT
We are committed to being a better business through continuous
improvement and innovation
COMMUNITY
We show leadership and take responsibility for our community
ACCOUNTABILITY
We are personally accountable for delivering on our commitments.
We do what we say
OUR PROMISE
We Care
We are Flexible
We Deliver
MACA LIMITED ANNUAL REPORT 2020
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ABOUT US
OUR OPERATING BUSINESSES
MINING AUSTRALIA
CRUSHING
MINING INTERNATIONAL
• Modern fleet of surface
mining equipment
• Load & haul mining contracts
• Bulk overburden removal
• Modern fleet of proven drilling
equipment
• Complete blasting service
utilising latest technology
• Experience in gold, iron ore,
lithium, coal, nickel and others
• Modern fleet of crushing
equipment including primary
jaw crushers, secondary cone
crushers and tertiary cone
crushers
• Complete screening services
utilising the latest technology
with scalping screens, vibrating
and fixed screens and single,
double and triple deck screens
• Equipment and operating
techniques are used to
meet client needs in diverse
operating environments
• Load and haul
• Drill and blast
• International experience in
gold and copper projects
CIVIL CONSTRUCTION
• Civil bulk earthworks for the
private / resource sector
including mining, TSF, road,
airstrips, camp pads, borefield
and camp infrastructure
• Public works civil capabilities
include roads and bridges,
bulk earthworks, aerodromes,
drainage and marine works
INFRASTRUCTURE
MAINTENANCE
• Infrastructure capabilities and
experience includes roads
maintenance and construction,
parks and gardens, specialist
services, verge works, bridge
works and safety barriers
• Asset management and
maintenance segments in
Australia
MACA INTERQUIP
• Delivering small to large
scale structural, mechanical
and piping projects
• New and refurbished plant
and equipment
• Consumables to the mineral
processing sector of the
resources industry
• Significant number of low to
high lift cranes available
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MACA LIMITED ANNUAL REPORT 2020
HISTORY
2003
Awarded first Mining
Services contract
2007
Awarded 1st Crushing and
Screening contract
2011
Awarded 1st interstate Mining
Services contract in South Australia
MACA Civil began providing
Civil Infrastructure design &
construction services
2016
Acquisition of Alliance Contracting,
a small Mining Services business
2018
Awarded Bluff Coal contract
in Queensland
Commenced crushing contracts for BHP Iron Ore
2019
2002
Mining and Civil Australia
was founded in WA
2004
Awarded 1st contract
with Equigold
(now Regis Resources)
2010
Listed on ASX as
MACA Limited
2014
Awarded 1st International
Mining contract.
Gold Project, Brazil
2016
Established MACA Infrastructure
and expanded the Civil and
Infrastructure businesses into
Victoria through the acquisition of
local contractor Services South East
Acquired a 60% stake in MACA
Interquip, and expanded Mining
Services offering to include mineral
processing solutions
2020
2000+ workforce, $800m+ turnover, $2.7b work in hand
Commencement of Ravensthorpe Project
MACA LIMITED ANNUAL REPORT 2020
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LEADERSHIP
EXECUTIVE LEADERSHIP TEAM
Back: David Greig, Peter Gilford, Geoff Baker, Mike Sutton, Tim Gooch, Michael Hunt, Tony McClure
Front: Lance Matthews, Linda Devereux, Mark Davidovic, Adam Struthers
Geoff Baker
Executive Director
Geoff is a founding
shareholder of MACA
and brings with
him more than 40
years’ experience
in the mining
and construction
industries.
Mike Sutton
Chief Executive Offi cer
& Managing Director
Mike is an experienced
Civil Engineer with
over 40 years’
experience gained in
various senior roles
within the mining
and civil contracting
industries.
David Greig
Chief Operating Offi cer
Peter Gilford
Chief Financial Offi cer &
Linda Devereux
General Manager People
David joined MACA
in 2016 and has over
20 years’ experience
in the international
mining, construction,
maintenance and
infrastructure
industries.
Company Secretary
& Safety
Peter has over 20
years’ experience in
the areas of financial
management,
accounting, business
and taxation services
and has been with
MACA for over 13 years.
Linda joined MACA
in 2019 and brings
with her more than
20 years’ experience
in HR and Corporate
Services from a
diverse range of
industries.
Tim Gooch
General Manager
Mark Davidovic
General Manager Civil
Tony McClure
General Manager
Adam Struthers
General Manager
Lance Matthews
General Manager
Michael Hunt
General Manager
Mining
& Infrastructure
Crushing & Interquip
Plant
HSEQT
Estimating & Technical
Tim joined MACA
in 2011 and is an
experienced mining
engineer with over
30 years domestic
and international
mining experience.
Mark is a
professional civil
engineer with over
25 years’ experience
in the resources and
public infrastructure
development
sectors.
Tony has held a
number of senior
management roles,
with over 25 years’
experience within the
oil and gas, mining
and construction
industries.
Adam has over 25
years’ experience
in maintenance and
mining industry
and has held
management roles
with contractors,
hire companies
and OEMs.
Lance joined MACA
in 2020 and brings
with him more than
20 years’ experience
in health and safety,
risk management
and governance
strategic planning
within the mining
and civil industries.
Services
Michael joined MACA
in 2020, and brings
with him over 24
years’ of experience
and knowledge in
the mining industry,
including over 14 years
in senior roles with
mining contractors.
7
MACA LIMITED ANNUAL REPORT 2020
BOARD OF DIRECTORS
Andrew Edwards
Non-Executive
Chairman
Andrew is an experienced Non-
Executive director. He is a former
Managing Partner of PwC’s Perth
Office, and a former president of
the Western Australian division
of the Securities Institute of
Australia (now the Financial
Services Institute of Australasia).
Mike Sutton
Managing Director and
Chief Executive Offi cer
Mike is an experienced Civil
Engineer with over 40 years’
experience gained in various
senior roles within the mining and
civil contracting industries, having
worked internationally with more
than 20 years spent in WA.
Geoff Baker
Executive Director
Geoff is a founding shareholder
of MACA and brings with him
over 40 years’ experience within
the mining and civil industries.
Geoff has extensive experience
in operational strategy, capital
expenditure and successful
project delivery in terms of safety
and financial outcomes.
Linton Kirk
Independent
Non-Executive Director
Linton has over 40 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.
Robert Ryan
Independent
Non-Executive Director
Robert brings over 40 years’
experience in civil engineering
and construction to the Board.
For 14 years he worked at a
senior level for a significant
public company working in
engineering services.
MACA LIMITED ANNUAL REPORT 2020
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OPERATIONAL REVIEW
CHAIRMAN’S
ADDRESS
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MACA LIMITED ANNUAL REPORT 2020
MACA has seen improved
performance during 2020,
again achieving record levels
of revenue and work in hand,
alongside a positive recovery
in operating margins.
ANDREW EDWARDS
Chairman
On behalf of the Board of
MACA, I am pleased to report
on the Company’s results and
achievements for the year
ended 30 June 2020.
Revenue
Work in Hand
2.7b
2.1b
FY16
FY17
FY18
FY19
FY20
431.4
497.9
562.6
665.7
808.0
$ million
2019
2020
MACA has seen improved performance
during 2020 in our underlying business
operations, again achieving record
levels of revenue and work in hand,
alongside a positive recovery in
our EBITDA and NPAT margins
(pre impairment and forex impacts).
Our financial results before impairment
and forex impacts were largely in line
with guidance provided to the market,
with revenue of $808m and EBITDA
of $120m.
However, the outbreak of COVID-19 in
the second half of the financial year,
whilst having limited operational
impact, significantly impacted MACA’s
statutory results through its impact
on broader economic factors. The
softening price for PCI Coal resulted
in MACA recognising an impairment
to the carrying value of receivables
of $34m (after tax) on amounts
owing from Carabella Resources in
relation to the Bluff PCI Project. In
addition, a deterioration of the value
of the Brazilian Real in consequence
of that country’s severe COVID-19
outbreak was a major contributor to
our discontinued Brazilian operations
reporting a net loss after tax of $21m.
In consequence, MACA reported an
overall net loss after tax of $17.4m.
The past year has seen changes
in the Executive Leadership Team.
Mike Sutton was appointed as
CEO / Managing Director after an
extensive selection process, following
the resignation of Chris Tuckwell,
who served in these roles for 11
years. Additionally, David Greig was
appointed as Chief Operating Officer.
These appointments further enhance
MACA’s capability and better
enable the Company to achieve
its strategic objectives and deliver
shareholder value.
Our Australian mining operations
have continued to grow, with MACA
continuing its contract mining
operations for Regis Resources at the
Duketon South and Duketon North
operations, with Ramelius Resources
at the Mount Magnet and Edna May
(awarded in February 2020) projects,
with Blackham Resources at the
Matilda project, with Pilbara Minerals
at the Pilgangoora lithium project
and with Carabella Resources in the
Blackwater region of Queensland (PCI
coal). In November 2019, MACA was
awarded a five year mining contract
by FQM Australia Nickel Pty Ltd at the
Ravensthorpe Nickel Project, which
commenced successfully in the second
half of FY20.
Our civil and infrastructure operations
performed strongly in FY20, with this
performance underpinned by a number
of key projects, including the Karratha /
Tom Price road for Main Roads WA, the
General Earthworks, Camp Expansion
and Road Construction for FMG Iron
Bridge and Formosa Steel, the Corunna
Downs Haul Road for Atlas Iron and
a number of works packages for
VicRoads in Victoria.
Our MACA Interquip business has had
a positive year, albeit not matching
its strong performance in FY19, but
still contributing to the overall MACA
result. Interquip’s main activities this
year comprised supporting Adaman
Resources at its Kirkalocka gold
project, Saracen at its Carosue Dam
operations, and completing a number
of minor works packages for BHP, FQM
and Wiluna. We remain confident in
the MACA Interquip pipeline of work
into FY21 and its ability to continue to
enhance overall Group performance.
We are currently observing positive
market conditions across the mining
and civil construction sectors, and
the Company is actively pursuing
many mining, civil and infrastructure
opportunities. As previously
announced, MACA is expecting revenue
to exceed $850m in FY21, of which
$740m is currently secured.
Your Directors have declared a final
dividend of 2.5 cents per share, taking
the total dividends for the year to 5.0
cents fully franked. This dividend has
been set having regard to the recent
level of earnings and the desire to
retain sufficient funds for equipment
and working capital investments
required to support future projects.
We will continue to position
MACA for future years by pursuing
appropriate growth opportunities and
diversification. MACA remains focused
on productivity and other initiatives
to improve and protect margins in our
drive to bolster earnings sustainability.
Importantly, the Company’s strong
balance sheet provides MACA with
the capacity to pursue the right
opportunities to achieve its long-term
growth strategy.
On behalf of the Board, I would like
to take this opportunity to thank our
shareholders, as well as all of MACA’s
other stakeholders, for their continued
support, and in particular our dedicated
people for their commitment and
contribution during the year.
Andrew Edwards
Chairman
MACA LIMITED ANNUAL REPORT 2020
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OPERATIONAL REVIEW
REVIEW OF OPERATIONS
This financial year represented one of significant growth and change for MACA,
and I look forward to the future and its opportunities, while acknowledging the
proud history of the business and its past achievements.
SAFETY
OUR PEOPLE
MACA is committed to providing a
safe and healthy workplace to our
employees, contractors and visitors,
and delivers our work responsibly
in order to minimise impact to the
environment.
Creating a safe working environment
for our employees is our highest
priority. Our total recordable injury
frequency rate is 6.6 and we continue
to strive to improve our safety
performance.
In FY20, MACA refreshed its approach
to health and safety, with engagement
of leadership at all levels of the
business, and we are now collectively
focused to deliver a “Working Safely”
workplace culture.
It is also pleasing to note that during
the second half of the financial year,
MACA worked proactively with its
clients, suppliers and employees
and was able to manage the impact
of COVID-19 in such a way that the
impact on day to day operations was
minimal.
MACA highly values its hard working
and loyal employees, who in many
cases have spent additional time
away from their families whilst
facilitating roster changes due to site
requirements and border closures
as a result of COVID-19. With a
strong culture and commitment
to the MACA brand, and a total
workforce (including contractors)
in excess of 2,000 people, all have
contributed to the successful delivery
of quality projects and the financial
performance for the business. I would
like to extend my thanks to them and
all of our stakeholders who remain an
essential part of our success.
MACA currently employs 55
apprentices and has 165 employees
enrolled in traineeships, representing
greater than 10% of our workforce
engaged in traineeship programs.
MACA is committed to enlisting and
developing a pipeline of qualified
employees to ensure the long-term
sustainability of our industry.
2,381
1,958
1,741
1,388
1,146
FY20 represented a contrasting year
for MACA, with strong growth in our
revenue, continuing operational
earnings (before impairment) and
orderbook, against a statutory
net loss after tax. The outbreak
of COVID-19 in the second half of
the financial year has had limited
operational impact, however the
broader economic factors have had
a significant impact on statutory
results. These included disruptions
to demand in the coal market, with
a softening of the price for PCI Coal
alongside a deterioration of the value
of the Brazilian Real. As a result, an
impairment to the carrying value of
receivables of $34m (after tax) was
realised on amounts owing from
Carabella Resources in relation to the
Bluff PCI Project and our discontinued
Brazilian operations reported a net
loss after tax of $21m with a major
contributor being foreign exchange
losses on the back on the Brazilian
currency being impacted by the
country’s severe COVID-19 outbreak.
MACA will continue to work with
Carabella Resources to facilitate
the recovery of the full outstanding
amount while continuing operations.
In contrast, receivable balances
continue to unwind, including Wiluna
Mining Corporation Ltd (previously
Blackham Resources) having repaid
its working capital facility in full and
operating under contractual payment
terms, and Great Panther Mining
continuing to meet its repayment
obligations.
2016
2017
2018
2019
2020
Our People (including Contractors)
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MACA LIMITED ANNUAL REPORT 2020
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MACA LIMITED ANNUAL REPORT 2020
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It gives me great pleasure
to present my first Annual
Report for MACA, having
commenced in the CEO
role in March 2020, and
as Managing Director
in June 2020.
MIKE SUTTON
Chief Executive Officer
and Managing Director
2020 Safety
6.6
0.2
LTIFR
TRIFR
OPERATIONAL REVIEW
FY 20 KEY POINTS
SAFETY (TRIFR)
6.6
2,381
HEADCOUNT (INCL CONTRACTORS)
REVENUE
EBITDA
$808million
$120.4 million
$17.4 million
NET LOSS AFTER TAX
WORK IN HAND
$2.7 billion
at Sept 20
(up 3%
from FY19)
(up 22%
from FY19)
(up 21%
from FY19)
(up 70%
from FY19)
(down 178%
on FY19 NPAT
of $20.6m)
(up 28%
from FY19)
OPERATING CASH FLOW
$116.6 million
(up 103%
from FY19)
CAPITAL INVESTMENT
$124 million
NET DEBT
$73.4 million
CASH OF $114.7M
(down 25%
from FY19)
(down from
$82.8m at
Jun19)
APPOINTMENT OF NEW CHIEF EXECUTIVE OFFICER
AND MANAGING DIRECTOR
Mike Sutton
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MACA LIMITED ANNUAL REPORT 2020
MACA would like to extend its
thanks to our highly valued,
hardworking loyal employees,
who in many cases have spent
additional time away from their
families as result of COVID-19,
and have supported the business
in delivering the FY20 results
MACA LIMITED ANNUAL REPORT 2020
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OPERATIONAL REVIEW
AREAS OF ACTIVITY
18
C A M B O D I A
MACA OFFICES
MINING
CIVIL & INFRASTRUCTURE
CRUSHING
INTERQUIP
A U S T R A L I A
15
BRISBANE
PERTH
WESTERN AUSTRALIA
Goldfi elds/Esperence
01 Regis Resources
Duketon South
Moolart Well
16 17
MELBOURNE
QUEENSLAND
Kimberley
07 MainRoads WA
Bowen Basin
15 Carabella Resources
Kimberley Road Maintenance
Bluff Coal
02 Wiluna Mining Corporation
Matilda Gold
03 First Quantum Minerals
Ravensthorpe
Pilbara
08 Pilbara Minerals
Pilgangoora
VICTORIA
Regional
16 VicRoads
Wheatbelt
04 Ramelius Resources
Edna May
Murchison
05 Ramelius Resources
Mount Magnet
06 Adaman Resources
Kirkalocka
09 BHP
Mining Area C
Eastern Ridge
WAIO
10
11 Atlas Iron
Mt Webber Crushing
12 Corunna Downs
13 MainRoads WA
Karratha / Tom Price Rd
Coongan Gorge
14 FMG
Iron Bridge
Geelong-Bacchus Marsh Road
Shepparton Alt. Route Roundabout Upgrade
Findon Road
Princes Highway pavements and guardrails
Midland Highway Road widening
Moggs Creek bridge replacement
Forrest Apollo Bay turnout
17 Baw Baw Shire
Network Maintenance
CAMBODIA
Cambodia (East)
18 Emerald Resources*
Okvau Gold
MACA exited Brazil per ASX announcement dated 21 January 2020
MACA executed mining contract for the Okvau Gold project per ASX announcement dated 13 March 2020
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MACA LIMITED ANNUAL REPORT 2020
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P I L B A R A
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K I M B E R L E Y
W E S T E R N
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G O L D F I E L D S
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M U R C H I S O N
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PERTH
W H E A T B E L T
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MACA LIMITED ANNUAL REPORT 2020
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OPERATIONAL REVIEW
REVIEW OF OPERATIONS CONTINUED
PERFORMANCE
BASE BUSINESS FUNDAMENTALS
REVENUE
EBITDA
NPAT
OPERATING CASH FLOW
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4
6
.
5
7
5
7
8
.
n
o
i
l
l
i
m
$
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
PREPARED FOR GROWTH
* NPAT in FY20 excludes
impairment and foreign
exchange transfer impact.
WORK IN HAND
DIVIDENDS
NET TANGIBLE ASSETS
NET DEBT / (CASH)
0
0
7
2
,
0
1
1
2
,
0
9
.
5
8
.
5
6
.
.
1
6
0
1
.
9
8
0
1
.
8
8
1
1
.
5
9
1
1
.
7
6
0
1
.
8
2
8
.
4
3
7
0
6
1
1
,
0
3
1
1
,
1
5
0
1
,
s
p
c
0
5
.
5
4
.
s
p
c
n
o
i
l
l
i
m
$
n
o
i
l
l
i
m
$
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
.
FY16
)
9
1
4
-
(
.
FY17
)
2
4
6
-
(
.
FY18
)
3
3
6
-
(
FY19
FY20
MOMENTUM FOR GROWTH
• New Chief Executive Officer
• Strong liquidity with $114.7m cash
and Managing Director with the
appointment of Mike Sutton in
March 2020
• Strong work in hand position of
$2.7bn at Sep 20, with solid pipeline
of advanced opportunities
and net debt of $73.4m (relating only
to finance leases on plant)
• Improved EBITDA margins
• Strong performance of mining and
civil construction segments expected
to continue into FY21
17
MACA LIMITED ANNUAL REPORT 2020
GROWTH STRATEGY
MACA has a positive outlook for FY21 and expects to deliver to shareholders
continued growth in both our revenue and earnings. Our outlook is underpinned
by our strong work in hand position of $2.7 billion at Sep20 and is also
supported by a general improvement in the mining and construction industries.
MACA is focused on the following strategic priorities:
DELIVER
Delivering for our
Existing Clients while
Winning New Work
CONTINUED
GROWTH
POSITIVE
OUTLOOK
IMPROVE
Encourage an
environment of
Continuous
Improvement to
drive operational
effi ciencies
DIVERSIFY
Diversifying into
New Markets,
Services and
Commodities
SUPPORT
Supporting our
Trading Divisions to
extract the full
value of our assets
IMPLEMENT
Implementing
long-term strategic
plans for Human
Resources and
Technology
MACA LIMITED ANNUAL REPORT 2020
18
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OPERATIONAL REVIEW
REVIEW OF OPERATIONS CONTINUED
MINING AND CRUSHING
Operational activities have continued to grow in mining, with MACA continuing its contract mining operations for Regis
Resources at the Duketon South and Duketon North operations, with Ramelius Resources at the Mount Magnet and Edna
May (awarded in February 2020) projects, with Blackham Resources at the Matilda project, with Pilbara Minerals at the
Pilgangoora lithium project and with Carabella Resources in the Blackwater region of Queensland (PCI coal). In November
2019, MACA was awarded a five year mining contract by FQM Australia Nickel Pty Ltd at the Ravensthorpe Nickel Project,
which commenced successfully in the second half of FY20.
In March 2020, MACA executed a mining contract with a wholly owned subsidiary of Emerald Resources Ltd, for provision of
contract mining services at the Okvau Gold Project in Cambodia. The term of the contract is for seven years, with mobilisation
to site commencing in August 2020 and operations commencing October 2020.
Internationally, MACA ceased operations for Avanco Resources (now fully owned by Oz Minerals) at the Antas project in
Brazil and is currently working on disposing of and relocating assets to other operations.
MACA continued to deliver on its crushing contracts for BHP Iron Ore during the year, which included a contract to crush
blast-hole stemming material across its Western Australian Iron Ore operations, a contract to crush and screen up to
12Mtpa at the Mining Area C operation, and a contract to crush and screen up to 5Mtpa at the Eastern Ridge operations.
Additionally, MACA was awarded a contract by Altas Iron in October 2019 for the provision of crushing and screening at their
Mt Webber operations.
Project
Client
Location
Services
Commodity
Status
Duketon Operations
Mount Magnet
Wiluna
Pilgangoora
Bluff PCI
Antas
Ravensthorpe Nickel
Edna May
Corunna Downs
Karlawinda
Okvau
Mining Area C
Eastern Ridge
WAIO Stemming
Mount Webber
Regis Resources
Ramelius Resources
Wiluna Mining Corporation
Pilbara Minerals
Carabella Resources
OZ Minerals
FQM Ravensthorpe Nickel
Ramelius Resources
Atlas Iron
Capricorn Metals
Emerald Resources
BHP
BHP
BHP
Atlas Iron
Goldfi elds, WA
Murchison, WA
Goldfi elds, WA
Pilbara, WA
Bowen Basin, QLD
Brazil
Goldfi elds Esperance
Wheatbelt, WA
Pilbara, WA
Pilbara, WA
Cambodia
Pilbara, WA
Pilbara, WA
Pilbara, WA
Pilbara, WA
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Open Pit Mining Services
Crushing & Screening
Crushing & Screening
Crushing & Screening
Crushing & Screening
Gold
Gold
Gold
Lithium
PCI Coal
Copper
Nickel
Gold
Iron Ore
Gold
Gold
Iron Ore
Iron Ore
Iron Ore
Iron Ore
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ceased
Commenced
Commenced
Awarded
Awarded
Awarded
Ongoing
Ongoing
Ongoing
Commenced
INFRASTRUCTURE MAINTENANCE
In both Western Australia and Victoria smaller long-term infrastructure works involving road maintenance continued.
Project
Client
Location
Services
Commodity
Status
Baw Baw
Western Region
Kimberley
Various maintenance packages Local Shires & Councils
Baw Baw Shire
VicRoads
Main Roads WA
19
MACA LIMITED ANNUAL REPORT 2020
Regional Victoria Routine Maintenance
Western Victoria Road & Roadside Maintenance Government
Government
Kimberley, WA
Local Government
Victoria
Road Maintenance
Various
Local Government
Ceased
Ongoing
Ongoing
Completed /
Ongoing
CIVIL CONSTRUCTION
The Civil and Infrastructure business delivered a record result in FY20, benefiting from increased scale and a heightened
focus on project delivery. Additionally, MACA has been upgraded to R4/B3 conditional under the National Prequalification
Scheme for Main Roads Western Australia, which will enable MACA to participate in larger road and bridge projects in capital
cities for various road agencies around the country.
During FY20 the Civil division substantially completed its work package in relation to the Karratha / Tom Price Road for
Main Roads Western Australia, which included the construction and sealing of a 45km section of road. In addition, MACA
has commenced a number of packages for Fortescue Metals Group Ltd subsidiary FMG Iron Bridge and Formosa Steel IB Pty
Ltd, including general earthworks, camp expansion, construction of a 26km mine access road, construction of the explosive
facility and further road upgrades. MACA also commenced work for Atlas Iron on the Corunna Downs haul road.
In Victoria, our business continues to grow in scale and capability, with the award of a number of projects for VicRoads
in FY20, including the Shepparton Alternative Route Roundabout Upgrades, the Bacchus March Road Stage 2A Safety
Improvements, the Midland Highway Buninyong Road Towards Zero package, the civil and safety pack on the Princes
Highway along with a number of minor works contracts with VicRoads and local Victorian shires.
Project
Client
Karratha / Tom Price Road
Main Roads WA
Iron Bridge Magnetite Project
Iron Bridge Magnetite Project
FMG Iron Bridge / Formosa
Steel IB
FMG Iron Bridge / Formosa
Steel IB
Main Roads WA
Williams
Main Roads WA
Hay Street Bridge
Atlas Iron
Corunna Downs Haul Road
Shepparton Alt. Route Upgrade VicRoads
VicRoads
Findon Road
VicRoads
Princes Highway
VicRoads
Moggs Creek
VicRoads
Forrest Apollo Bay Turnout
Location
Pilbara, WA
Pilbara, WA
Pilbara, WA
Williams, WA
Perth, WA
Pilbara, WA
Victoria
Victoria
Victoria
Victoria
Victoria
VicRoads
Victoria
Various other civil
construction projects
MACA INTERQUIP
Services
Road construction and
sealing
General earthworks, roads,
facilities
Airstrip
Commodity
Status
Government
Ongoing
Iron Ore
Commenced
Iron Ore
Commenced
Government
Road and bridge upgrade
Government
Bridge replacement
Iron Ore
Haul Road
Government
Roundabout Upgrade
Signalised Intersection
Government
Pavement works, guardrails Government
Government
Bridge replacement
Government
Construction of slow vehicle
turn out lanes
Various
Government
Completed
Commenced
Commenced
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Completed /
Ongoing
In FY20, MACA Interquip completed the Kirkalocka gold project for Adaman Resources which included the installation of a
new semi-autogenous mill and the refurbishment of an existing processing plant, with MACA Interquip also awarded the
ongoing contract in relation to its maintenance. Additionally, MACA Interquip completed tank upgrade works for Saracen at
Carosue Dam and the build, refurbish and install of the Mt Webber crushing circuit at Atlas Iron Mt Webber.
Project
Client
Location
Services
Commodity
Status
Kirkalocka
Kirkalocka
Carosue
Mount Webber
Various
Wiluna
Ravensthorpe Nickel
Adaman Resources
Adaman Resources
Saracen
Atlas Iron
BHP
Wiluna Mining Corporation
FQM Ravensthorpe Nickel
Operations
Murchison, WA
Murchison, WA
Goldfi elds, WA
Pilbara, WA
Pilbara, WA
Goldfi elds, WA
Goldfi elds Esperance,
WA
Mill Installation and refurb
Maintenance
Tank Upgrade Works
Refurbish Install Crushing Circuit
Various support projects
Support
Support
Gold
Gold
Gold
Iron Ore
Iron Ore
Gold
Nickel
Completed
Ongoing
Completed
Completed
Ongoing
Ongoing
Ongoing
MACA LIMITED ANNUAL REPORT 2020
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OPERATIONAL REVIEW
REVIEW OF OPERATIONS CONTINUED
ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE
MACA recognises
the importance of
Environmental, Social and
Governance outcomes
in delivering long-term
sustainable performance
and shareholder value.
BIODIVERSITY AND
LAND MANAGEMENT
MACA takes great steps to ensure
there is minimal impact to the
environments in which we work,
including the natural state of
flora and fauna. MACA conducts
proper environmental assessments
as part of the conditions for
environmental approval. We take no
part in unauthorised land clearing,
and ensure we don’t disturb or
negatively impact cultural heritage
sites around us.
ENVIRONMENTAL
REHABILITATION
MACA is committed to providing
environmental, social, governance
initiatives in order to minimise the
impact to the environment.
Our framework is based on our
ISO AS/NZS 14001 certified
Environmental Management
System which supports MACA’s
environmental performance.
MACA considers the lifecycle
aspect to environmental decision-
making to reduce the business’s
environmental footprint. We are
receptive to innovative ideas that
will result in reducing emission
discharges, waste, energy usage
and resource consumption.
We ensure compliance with all
legal requirements involving critical
environmental aspects such as
waste, water, noise, cultural heritage
management, biodiversity and
hazardous materials.
MACA is actively involved in stockpile
rehabilitation work with our key
stakeholders and clients.
EMISSIONS AND ENERGY
MACA strives to reduce emissions and
energy use where we can at all of our
operations. Recent examples of these
initiatives and reductions include:
- Installation of full solar paneling
and movement detection to reduce
energy needs at our Head Office in
Welshpool, WA
- Conversion of halogen globe lighting
towers to LED to reduce energy load
- Movement towards a fleet of Tier 4
reduced emissions equipment
- Movement towards a fleet of
4-cylinder light vehicles
CLIMATE CHANGE
MACA recognises that climate change
is a complex and challenging issue.
We continue to work with our clients
to ensure we find practical emissions
reductions solutions for current and
future works.
21
MACA LIMITED ANNUAL REPORT 2020
MACA is pleased to report
that we have had:
0 Major
Environmental
Incidents
We continue to actively work
with our clients to ensure
rehabilitation work is a key
focus within all projects.
INNOVATION IN
DUST MANAGEMENT
Dust management is a vital
environmental process for both the
environment and our people. In
2019, MACA Interquip developed
and built a state-of-the-art dust
management machine which
captures dust particles in the air and
eliminates them from being airborne.
Fully autonomous, the Dust Machine
has wireless surveillance which can
be used from multiple devices and is
equipped with different nozzle sizes
which can be replaced to match the
dust particle size. Addition of organic
elements to the machine also allows
the machine to clump and crust dust.
WASTE AND RECYCLING
MACA engages in active waste and
recycling initiatives on our sites to
reduce our environmental footprint.
These include oils, steel, batteries
and general waste on projects
transported to certified recyclers.
SOCIAL
COMMUNITY
At MACA, we know that we can make an
impact through the contributions and
support we give to our communities.
We therefore develop partnerships that
generate long term value and support a
sustainable future for both our people
and the wider community.
MACA engages with all communities
and individuals in a manner that
is respectful and inclusive, with
consideration and respect towards their
rights, culture and way of life. We know
that we can make a difference together.
THE HARRY PERKINS INSTITUTE
OF MEDICAL RESEARCH
MACA has continued its long-term
partnership with the Harry Perkins
Institute of Medical Research and
is proud to be title sponsor of the
MACA Cancer 200 Ride for Research.
Collectively MACA raised $1.68 million
for the Perkins last year, and close
to $10 million in total within our
partnership tenure. All funds raised
go towards vital cancer research
initiatives.
THE PERTH CHILDREN’S HOSPITAL
MACA is proud to support PCHF in
purchasing much needed medical
equipment. In 2020, MACA donated
a medical human simulation patient,
also known as ‘Lil MACA’ to PCHF. This
simulator allows doctors and nurses to
train in a simulated live environment.
MACA is proudly affiliated with other
community organisations including
Youth Focus (prevention of youth
GOVERNANCE
The Board of Directors are
responsible for MACA’s corporate
governance framework, which
ensures that the Company’s
obligations and responsibilities
to its various stakeholders are
fulfilled.
MACA has in place charters,
policies and procedures
(published on our website) which
are reviewed and revised as
appropriate to reflect changes
in law and developments in
corporate governance.
MACA also provides a risk
management framework in
accordance with ISO31000: Risk
Management - Principles and
Guidelines, which allows the
Group to identify potential change
and manage the associated
risks and opportunities, to meet
or exceed the organisational
strategic and operational
objectives.
The Board’s Risk Committee is
responsible for monitoring the
effectiveness of the Group’s risk
management framework.
suicide), Murlpirrmarra Connection
(Aboriginal education and employment
opportunities), West Australian
Symphony Orchestra (the arts) and
Working Spirit (Veterans’ employment).
DIVERSITY
MACA acknowledges that diversity
and inclusion is a business imperative,
driving diversity of thought, a sense of
belonging and providing a respectful
workplace for all employees.
MACA prides itself on being an equal
opportunity employer where the value
of diversity is executed through our
core values and our decision-making
processes as a business.
A key area of focus for MACA is to
increase our female participation rate
within our workforce. We have clear
engagement and strategic plans in
place to help us reach these goals
within the next 12 months.
We are also fully committed to
increasing our Aboriginal participation
rate within our workforce, and to
continue to provide direct and indirect
contracting opportunities to Aboriginal
communities.
The table below outlines the group’s
current progress and objectives for
diversity in FY21.
Diversity Targets
Indigenous Australians:
Percentage of Female workforce:
Percentage of Female Directors:
FY 20
Actual
FY21
Targets
4%
15%
0%
5%
17%
30%
MACA LIMITED ANNUAL REPORT 2020
22
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OPERATIONAL REVIEW
REVIEW OF OPERATIONS CONTINUED
DIVIDEND
On the 24 August 2020, the board
of MACA Limited declared a final
dividend for the financial year ended
2020 of 2.5 cents per share and a
total dividend for the year of 5.0 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 $13.4 million
(2019: $14.7 million).
OPERATING CASH FLOW AND
CAPITAL EXPENDITURE
Operating cash flow for the year
ended 30 June 2020 was $116.6
million. Capital expenditure for the
financial year was $124.5 million.
This is largely associated with growth
capex for the Ravensthorpe Nickel
Project, preparing fleet for the Okvau
Gold Project, the Crushing Division
and sustaining capital. Capital
equipment purchases were funded by
a combination of cash and equipment
finance contracts.
BALANCE SHEET AND GEARING
OUTLOOK
With an increase in revenue and
assets employed, the Group as at
30 June 2020 remains in a strong
financial position with a net debt
position of $73.4m (2019: $82.8
million) and with cash on hand of
114.7m (2019: $59.3 million)
MACA enters the new financial year
with a work in hand position of
$2.7 billion as at September 2020.
This together with strong prospects
has the business poised to grow both
revenue and profitability.
FINANCIAL
REVIEW
OVERVIEW
MACA’s “pre impairment and forex”
financial results were in line with
guidance provided to the market,
with revenue of $808m (up 21% on
FY19) and EBITDA of $120m (up 70%
on FY19). Statutory results include
the impairment of receivables ($48m)
and goodwill ($3m) and the transfer
of foreign exchange loss reserves on
discontinued operations to the profit
and loss statement ($10m) resulting
in a Net Loss After Tax of $17.4m.
Mining & Crushing Work in Hand
(By Sector/Commodity)
13%
• GOLD
• PCI COAL
• NICKEL
• IRON ORE
• LITHIUM
20%
42%
ORDER BOOK
24%
As at the end of September 2020
the company has a Work in Hand of
$2.7 billion, with Mining and Crushing
accounting for $2.5 billion and Civil
and Infrastructure accounting
for $0.2 billion.
Mike Sutton
Chief Executive Officer and
Managing Director
Work in Hand
Dividends per Share
Capital Expenditure
2,700
9.0
2,110
1,130
1,050
e
r
a
h
S
r
e
p
D
U
A
$
6.5
5.0
4.5
)
m
$
(
d
n
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k
r
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o
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i
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$
165.9
124.5
39.6
31.5
FY17
FY18
FY19
FY20*
FY17
FY18
FY19
FY20
FY17
FY18
FY19
FY20
* As at the date of this report
23
MACA LIMITED ANNUAL REPORT 2020
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MACA LIMITED ANNUAL REPORT 2020
24
DIRECTORS’ REPORT
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 2020.
DIRECTORS
The following persons were directors of MACA Limited during
the whole or part of the financial year and up to the date of
this report:
Mr (Hugh) Andrew Edwards
(Chairman, Non-Executive Director)
Mr Mike Sutton
(Chief Executive Officer commenced effective 24 Feb 2020,
and Managing Director commenced effective 1 June 2020)
Mr Geoffrey Alan Baker (Executive Director)
Mr Linton John Kirk (Non-Executive Director)
Mr Robert Neil Ryan (Non-Executive Director)
Mr Chris Tuckwell (Chief Executive Officer and
Managing Director, resigned March 3 2020)
Mr Chris Sutherland (Non-Executive Director,
commenced effective 26th of February 2020,
resignation effective 10th September 2020)
PRINCIPAL ACTIVITIES AND ANY SIGNIFICANT
CHANGES IN NATURE
The principal activities of the Group during the 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, in the first half of the financial year contract
mining services in Brazil, South America.
DIVIDEND REINVESTMENT PLAN
There is no dividend reinvestment plan in place.
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 Group not otherwise disclosed in this Report or
the Financial Statements.
CHANGES IN CONTROLLED ENTITIES
There were no changes in controlled entities.
EVENTS SUBSEQUENT TO BALANCE DATE
• Award of Corunna Downs Mining Contract by Atlas Iron
which is expected to generate revenue of $230 million over
the 62 month term;
• Letter of intent to award the open pit mining services
contract by Capricorn Metals Ltd in relation to the
Karlawinda Gold Project, which is expected to generate
revenue of $410 million over the five year term;
• Award of Mt Magnet Mining Contract Extension by
There were no significant changes in the nature of the
Group’s principal activities during the financial year.
Ramelius Resources which is expected to generate revenue
of $130 million over the three year term;
DIVIDENDS PAID OR RECOMMENDED
Dividends that were fully franked and paid or declared for
payment since the end of the previous financial year were as
follows:
Interim dividend declared and
paid per ordinary share (cps)
Final dividend declared and
paid per ordinary share (cps)
2020
2019
2.5
2.0
2.5
2.5
• 10% Non-Owner Participant in the Southwest Connex
Alliance for Bunbury Outer Ring Road Project which is
expected to generate revenue of $85m for MACA over the
three and half year term; and
• As announced on 21 August 2020, MACA recognised an
impairment of $48m in relation to the carrying amount
of the Carabella Resources receivable, in addition to
impairing goodwill by $3m;
Other than the items listed above, no other matters or
circumstances have arisen since the full year to 30 June 2020
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.
The final fully franked dividend was paid on the
18th September 2020.
25
MACA LIMITED ANNUAL REPORT 2020
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REVIEW OF OPERATIONS
Ordinary Activities
30 June 2020
30 June 2019
Movement
Revenue
EBITDA
EBIT
Net Profit / (Loss) Before Tax
Net Profit / (Loss) After Tax
Discontinued Operations
Revenue
EBITDA
EBIT
Net Profit / (Loss) Before Tax
Net Profit / (Loss) After Tax
Total
Revenue
EBITDA
EBIT
Net Profit / (Loss) Before Tax
Net Profit / (Loss) After Tax
Other Metrics
Work in Hand**
Net Debt (Cash) position
Operating Cash Flow
Earnings per share - basic
Dividends per share (fully franked)
$795.8m
$129.5m
$9.3m
$6.1m
$3.6m
$639.9m
$68.3m
$30.3m
$32.0m
$22.4m
24%
90%
(69%)
(81%)
(84%)
30 June 2020
30 June 2019
Movement
$12.2m
($9.1m)
($14.6m)
($13.7m)
($21.0m)
$25.8m
$2.4m
($2.2m)
-
-
(53%)
(479%)
(564%)
-
-
30 June 2020
30 June 2019
Movement
$808.0m
$120.4m
($5.3m)
($7.6m)
($17.4m)
$665.7m
$70.7m
$28.1m
$32.0m
$22.4m
21%
70%
(119%)
(124%)
(178%)
30 June 2020
30 June 2019
Movement
$2,320m
$73.4m
$116.6m
(6.7) cents
5.0 cents
$2,110m
$82.8m
$57.5m
7.7 cents
4.5 cents
10%
(11%)
103%
** Work in hand as at the date of this report is $2.7bn
MACA LIMITED ANNUAL REPORT 2020
26
DIRECTORS’ REPORT
INFORMATION ON CURRENT DIRECTORS
Mr Andrew Edwards
Mr Geoff Baker
TITLE:
Independent Non-Executive Chairman
TITLE:
Executive Director
QUALIFICATIONS:
B Com FCA SF Finsia FAICD
QUALIFICATIONS: MAICD
EXPERIENCE AND
EXPERTISE:
CURRENT
DIRECTORSHIPS:
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 Services 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.
Mr Edwards has been a board member of
MACA Limited since 10th November 2010.
Mr Edwards is currently Non-Executive
Chairman of MMA Offshore Limited
(appointed December 2009).
FORMER
DIRECTORSHIPS
(IN LAST 3 YEARS):
Non-Executive Director of Nido Petroleum
Limited (appointed December 2009 and
resigned December 2018) (delisted from ASX
June 2017).
SPECIAL
RESPONSIBILITIES:
Mr Edwards is currently a member of the
Board’s Remuneration Committee, Audit
Committee and Risk Committee.
INTEREST IN
SHARES:
20,000
Mr Mike Sutton
EXPERIENCE AND
EXPERTISE:
Mr Baker is a founding shareholder of MACA.
He has extensive experience in planning,
operating strategy, capital expenditure and
delivery of successful safety and financial
outcomes for projects. Mr Baker has worked
in the sector for over 40 years, with a focus 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
RIGHTS:
12,863,816
215,514 vesting 30 June 2021
263,406 vesting 30 June 2022
Mr Linton Kirk
TITLE:
Chief Executive Officer and Managing Director
TITLE:
Independent Non-Executive Director
QUALIFICATIONS:
BSc in Civil Engineering, MAICD, MAusIMM
QUALIFICATIONS:
B Eng (Mining) FAusIMM (CP)
EXPERIENCE AND
EXPERTISE:
Mike is an experienced Civil Engineer
with over 40 years’ experience gained in
various senior roles within the mining and
civil contracting industries, having worked
internationally with more than 20 years spent
in Western Australia. Prior to joining MACA,
Mr Sutton held the role of Chief Operating
Officer at Downer EDI Mining for 10 years
successfully growing the business from a low
base. Prior to that Mike held senior roles with
Leighton Contractors and Henry Walker Eltin.
CURRENT
DIRECTORSHIPS:
Mr Sutton has been a board member of MACA
Limited since 1st June 2020
FORMER
DIRECTORSHIPS
(IN LAST 3 YEARS):
Nil
SPECIAL
RESPONSIBILITIES:
Mr Sutton is currently a member of the
Board’s Risk Committee
EXPERIENCE AND
EXPERTISE:
Mr Kirk has over 40 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.
CURRENT
DIRECTORSHIPS:
Mr Kirk has been a board member of MACA
Limited since 1st October 2012.
FORMER
DIRECTORSHIPS
(IN LAST 3 YEARS)
Mr Kirk was a Non-Executive Director of
Middle Island Resources from September
2011 to July 2016.
SPECIAL
RESPONSIBILITIES:
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:
115,000
27
MACA LIMITED ANNUAL REPORT 2020
Mr Robert Ryan
TITLE:
Independent Non-Executive Director
QUALIFICATIONS: CP Eng MIEAust MAICD
EXPERIENCE AND
EXPERTISE:
Mr Ryan has extensive civil construction and
engineering experience. That experience has
been at both project and management levels
in construction and asset management.
Mr Ryan worked at a senior level with
Downer EDI for 14 years as EGM Downer
Infrastructure WA for four years then
reporting directly to the CEO of DownerEDI
Infrastructure working on various business
improvement projects nationally and
overseas. During that time he played a
major role in setting up the association with
Mouchel to form DownerMouchel securing
a number of asset management in WA, Qld
and NSW. Before joining Downer EDI Mr
Ryan worked as Construction Manager for
14 years with a local business undertaking
civil construction and earthmoving in
Metropolitan and Regional areas of Western
Australia.
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:
58,604
Mr Peter Gilford
TITLE:
Chief Financial Officer / Company Secretary
QUALIFICATIONS: B Com CA AGIA ACG
EXPERIENCE AND
EXPERTISE:
Mr Gilford has significant 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. 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 is a member of the Chartered
Governance Institute.
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DIRECTORS’ REPORT
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MACA LIMITED ANNUAL REPORT 2020
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 2020 were as follows:
Directors’ Meetings
Committee Meetings
Board*
Audit
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
Andrew Edwards
Mike Sutton
Chris Tuckwell
Geoff Baker
Linton Kirk
Robert Ryan
Chris Sutherland
6
2
4
6
6
6
3
6
2
4
6
6
6
3
2
-
2
2
2
2
1
2
-
2
2
2
2
1
2
1
1
2
2
2
1
2
1
1
2
2
2
1
2
1
1
2
2
2
1
2
1
1
2
2
2
1
*The Board sitting as a Nomination Committee met twice during the year.
REMUNERATION REPORT
The audited remuneration report is set out on pages 35 to 48
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 by an officer or auditor. In accordance with a
confidentiality clause under the insurance policy, the amount
of the premium paid to insurers has not been disclosed. This is
permitted under s300(9) of the Corporations Act 2001.
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
49 and forms part of the directors’ report for the financial year
ended 30 June 2020.
RISK
MACA’s risk management framework is embedded within existing
processes and is aligned to the Group’s strategic business
objectives. Given the markets and the geographies in which the
Group operates, a wide range of risk factors have the potential to
affect the achievement of these objectives. For further information
in relation to the Group’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. The factors identified below are not necessarily listed in
order of importance and are not intended as an exhaustive list of
all the risks and uncertainties associated with the MACA business.
MACA LIMITED ANNUAL REPORT 2020
30
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DIRECTORS’ REPORT
HEALTH, SAFETY,
SUSTAINABILITY AND
ENVIRONMENT RISK
The industry sectors in
which we operate involve 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 Group 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.
PROJECT DELIVERY RISK
ORDER BOOK RISK
DEMAND 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 Group’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.
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.
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 Group
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.
31
MACA LIMITED ANNUAL REPORT 2020
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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.
COUNTERPARTY RISK
CONTRACT PRICING RISK
MACA has a mixed exposure
to contract types. However,
if the Group 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.
MACA derives its revenue
from a number of customers.
In the event that any of
these customers fails to
pay, reduces production
or scales back operations,
terminates the relationship,
defaults on a contract or
fails to renew their contract
with MACA, this may have
an adverse impact on the
financial performance and/or
financial position of MACA.
MACA seeks to manage this
risk by regularly monitoring
material counterparties and
its exposures and seeks
additional security when
appropriate.
MACA LIMITED ANNUAL REPORT 2020
32
DIRECTORS’ REPORT
33
MACA LIMITED ANNUAL REPORT 2020
LIQUIDITY RISK
CURRENCY FLUCTUATION
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
Group’s liquidity. The Group’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
Group’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.
LABOUR COSTS AND AVAILABILITY
Labour represents a significant portion of operating
expenses. In order to compete for work and to service
clients, the Group needs to be able to continue to attract
and retain skilled employees. Consequently, the Group is
exposed to increased labour costs in markets where the
demand for labour is strong. Within more stable labour
markets, the group’s labour costs are typically protected
by rise and fall mechanisms within client contracts, which
help neutralise the impact of rising labour costs.
As a Group 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, in addition to United States Dollars
(Cambodian Mining Contract).
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
timeframe;
• 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;
• Loss of reputation through poor project
outcomes, unsafe work practices,
unethical business practices, and not
meeting the market’s expectation of its
financial performance;
• Operating in international markets,
potentially exposing MACA to country
specific adverse economic conditions,
civil unrest, conflicts, bribery and corrupt
practices;
• Foreign exchange rates and interest rates
in the ordinary course of business, and
• Loss of key Board, management or
operational personnel.
MACA LIMITED ANNUAL REPORT 2020
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DIRECTORS’ REPORT
REMUNERATION REPORT
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
2020 Executive remuneration
framework and improvements
Outlines the 2020 remuneration framework and changes to remuneration plans.
Section 4
Company performance and the
link to remuneration
The outcomes of the key business metrics and hurdles that are used for measuring
variable pay outcomes.
Section 5
Executive remuneration
outcomes
Provides Chief Executive officer remuneration, Short Term Incentive (STI) and Long
Term Incentive (LTI) Plan details and Executive remuneration outcomes for the year.
Section 6
Executive contracts
Appointments and notice periods for current and former Key Management
Personnel.
Section 7
Non-Executive Directors’ fees
Provides detail regarding the fees paid to Non-Executive Directors.
1.0 INTRODUCTION
This remuneration Report forms part of the Directors’ Report for 2020 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 top five paid executives. 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
Non-Executive Director
Non-Executive Director
Non-Executive Director
Period in position during the year
Full year
Full year
Full year
Commenced effective 26th February 2020.
Resignation effective 10 September 2020.
Chief Executive Officer / Managing Director
Part Year (Retired 3 March 2020)
Chief Executive Officer / Managing Director
Commenced as CEO effective 24 February
2020, commenced as Managing Director
effective 1 June 2020.
Executive Director
Chief Operating Officer
General Manager - Mining
Chief Financial Officer / Company Secretary
General Manager - Civil
Full year
Full year
Full year
Full year
Full year
General Manager - Brazil Operations
Resignation effective 31st March 2020
Linton Kirk
Robert Ryan
Chris Sutherland
Directors - Executive
Chris Tuckwell
Mike Sutton
Geoff Baker
Executives
David Greig
Tim Gooch
Peter Gilford
Mark Davidovic
Mitch Wallace
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MACA LIMITED ANNUAL REPORT 2020
2.0 REMUNERATION GOVERNANCE
The Board oversees the remuneration arrangements of the KMP.
In performing this function the Remuneration Committee reviews the remuneration packages of all Directors, the Chief
Executive Officer and other Executives (collectively the KMP).
The Committee makes recommendations to the Board on an annual basis with benchmarking against comparable industry
packages and adjusting to recognise the specific performance of both the company and the individual.
The Remuneration Committee may also engage an external remuneration consultant to review the levels of senior executive
and non-executive remuneration. No external remuneration consultant was engaged over the past financial year.
3.0 2020 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 stimulate individuals on a market competitive basis.
Remuneration Framework
Total fi xed remuneration (TFR)
Short-term incentive (STI)
Long-term incentive (LTI)
• TFR takes into account similar
positions in peer companies,
length of service, experience and
contribution
• Peer companies are those with
broadly similar revenue and in
related industries
• TFR is reviewed annually
Financial metrics comprise some or all of:
• Net profit after tax - company and divisional
• Earnings per share
Non-financial metrics comprise some or all of:
• Safety indicators - LTI and TRIFR
• Personal performance
• Maximum STI is 15 - 60% 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 50% of fixed annual
remuneration divided by the
independently assessed value of
a performance right
4.0 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.
MACA LIMITED ANNUAL REPORT 2020
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REMUNERATION REPORT CONTINUED
4.0 COMPANY PERFORMANCE AND THE LINK TO REMUNERATION (CONTINUED)
Reported net profit/(loss) attributable to equity
holders of the parent ($m)
Reported return on equity (%)
Reported basic earnings per share (cents)
Lost time 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
2020
(17.9)
2019
20.6
2018
23.6
(5.8)
(6.7)
0.2
6.6
2.5
2.5
-
86.5
1.7
6.9
7.7
0.5
6.4
2.0
2.5
-
90
7.4
9.1
0
6.8
3.0
3.5
-
120
(21.3)
(5.2)
(23.3)
23.2
2017
31.2
11.6
13.7
0
7.8
4.5
4.5
-
165
38.1
6.3
2016
24.2
9.5
10.4
0
13.7
4.0
4.5
-
132
74.6
8.0
3 year Annual Compound TSR 1
(14.1)
1
All dividends in the TSR (Total Shareholder Return) calculation are on a declared (rather than paid) basis in respect to each
financial year.
5.0 EXECUTIVE REMUNERATION OUTCOMES
5.1 MANAGING DIRECTOR AND CEO ARRANGEMENTS
Mr Sutton’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 $706,500 per annum inclusive of superannuation.
- An STI which includes the opportunity to earn an annual cash bonus of up to 60% of total fixed remuneration, subject
to achieving performance hurdles. Mr Suttons’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 Lost Time Injury Frequency Rate (LTIFR) and the Total Recordable Injury
Frequency Rate (TRIFR).
There was no STI payable for Mr Sutton nor the previous CEO Mr Tuckwell for 2020 - refer 5.4 below.
- An LTI under which Mr Sutton may receive share performance rights convertible into fully paid shares, subject to
performance criteria being met. There were no Performance Right issued to Mr Sutton during the year. At the 2019
Annual General Meeting the Board sought and received approval for the grant of 313,622 Performance Rights to then
Managing Director and CEO Mr Tuckwell, pursuant to the Company’s Performance Rights Plan (PRP). These Rights were
forfeited upon Mr Tuckwell’s resignation.
37
MACA LIMITED ANNUAL REPORT 2020
5.2 TOTAL FIXED REMUNERATION (TFR)
All Executives received TFR as outlined in page 43 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.
Objective
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. The amount of bonus actually earned will
depend on performance against predetermined KPIs with payment commencing upon reaching
those hurdles.
Eligibility
All Executive key management personnel.
At risk payments
2019: The STI is a component of ‘at risk’ pay provided to Executives and KMP.
% of TFR paid on Target Achievement
CEO
Executive Directors
Other Executive KMP
25%
25%
15%
2020: The STI is a component of ‘at risk’ pay provided to Executives and KMP.
% of TFR paid on Target Achievement
CEO
Executive Directors, COO and CFO
Other Executive KMP
25% - 60%
25%
15%
Performance conditions Financial and safety targets are all agreed with the Board and personal KPIs are set in
consultation with the relevant Executive.
Each KPI is weighted according to its importance in driving profitable performance and returns to
Shareholders. In order to be eligible to receive an STI there is a minimum financial requirement
or gate which must be met before other KPI’s are considered.
KPIs for the CEO and Executive Directors include Earning per Share (EPS), Net Profit after Tax
(NPAT), Lost Time 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, Lost Time Injury Frequency Rate (LTIFR), Total Recordable Injury Frequency Rate
(TRIFR) and personal assessment.
Setting of KPIs
Financial and safety targets are all agreed with the Board and personal KPIs are set in
consultation with the relevant Executive.
Assessment of KPIs
Performance is measured quantitatively and progress against key targets measured at half year
and full year.
Trigger for payment
Any performance target met will trigger the calculation of total or part payment of the STI’s.
The board may exercise its discretion in relation to the payment of STI’s.
Cessation of employment 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.
MACA LIMITED ANNUAL REPORT 2020
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REMUNERATION REPORT CONTINUED
5.4 STI OUTCOMES
No STI was paid to any member of the senior executive team. An amount of $51,530 was accrued for Divisional General
Managers.
5.5 LONG-TERM INCENTIVE PLAN (LTI PLAN)
Key features of the LTI Plan are outlined in the table below.
Overview of the LTI Plan 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.
Objective
The Plan is designed to assist with Executive and KMP retention and to incentivise employees to
maximise returns and earnings for Shareholders.
Eligibility
Executive KMP as determined by the Board.
At risk payments
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 to relative Total Shareholder Return (TSR).
2019
CEO
Executive Directors
Other Executive KMP
2020
CEO
% of TFR applied in LTI
25%
25%
20%
% of TFR applied in LTI
25%
Executive Directors, COO and CFO
20-30%
Other Executive KMP
20%
Performance conditions 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.
TSR Comparator Group Assessed 100% against TSR using a benchmark index namely the S&P/ASX Small Ordinaries
Accumulation Index (XSOAI).
Assessment of KPIs
Performance is measured quantitatively and progress against key targets reported at full year.
Trigger for vesting
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.
Cessation of employment LTI forfeited if an Executive resigns or is terminated before the payment date. In exceptional
circumstances this may be reviewed by the Board.
39
MACA LIMITED ANNUAL REPORT 2020
5.6 LTI OUTCOMES
None of the applicable hurdles were met for the period 1 July 2017 to 30 June 2020 (3 year period) for rights to vest in the
LTI performance conditions above for Executives and KMP. Accordingly, no performance rights vested during FY20.
5.7 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.
5.8 KMP OPTIONS
No options were granted during the period and no options were vested or were exercised during the period. At 30 June
2020 no options were held by KMP.
5.9 KMP PERFORMANCE RIGHTS
During the 2020 financial year 1,906,909 (2019: 1,473,586) performance rights were granted under the Group’s
Performance Rights Plan and 1,163,501 (2019: 209,941) performance rights were forfeited. Subject to the achievement
of designated performance hurdles, these performance rights will vest in June 2021. As at 30 June 2020 there were
2,690,578 (2018: 2,235,877) performance rights outstanding. On 14 November 2019 shareholders approved the issue
of 313,622 performance rights to the Managing Director Mr Chris Tuckwell and 263,406 performance rights to the
Operations Director Mr Geoff Baker. During the year, 697,368 rights lapsed as performance criteria were not met.
MACA LIMITED ANNUAL REPORT 2020
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5.9 KMP PERFORMANCE RIGHTS (CONTINUED)
The number of rights over ordinary shares held by each KMP of the Group during the financial year is as follows:
Balance at
Granted as
Exercised
beginning
remuneration
during the
of year
during the year
year
Other
changes
Balance at
Vested and
Vested and
Unvested at
during the
end of year
exercisable
unexercisable
end of year
year
30 June 2020
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Non-Executive Director
Robert Ryan
Non-Executive Director
Chris Sutherland
Non-Executive Director
Chris Tuckwell
Managing Director /
Chief Executive Officer
Mike Sutton
Managing Director /
Chief Executive Officer
Geoff Baker
Executive Director
David Greig
Chief Operating Officer
-
-
-
-
-
-
-
-
441,218
313,622
-
-
362,289
263,406
209,504
153,057
Tim Gooch
General Manager - Mining
235,465
167,599
Mitch Wallace
General Manager -
Brazil Operations
Mark Davidovic
General Manager -
Civil and Infrastructure
Peter Gilford
Chief Financial Officer /
Company Secretary
239,414
168,797
251,993
181,148
208,320
153,704
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(754,840)
-
-
-
-
-
-
-
-
-
-
625,695
362,561
403,064
(408,211)
-
-
-
433,141
362,024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
146,775
478,920
92,500
270,061
98,339
304,725
-
-
103,781
329,360
84,489
277,535
Total
1,948,203
1,401,333
-
(1,163,051)
2,186,485
-
525,884
1,660,601
Performance rights totalling 504,093 have been issued to employees not classed as KMP and remain unvested as at 30
June 2020.
41
MACA LIMITED ANNUAL REPORT 2020
5.10 KMP SHAREHOLDINGS
The number of ordinary shares in MACA Limited held by each KMP of the Group during the financial year is as follows:
Balance at
Granted as
beginning of
remuneration
year
during the year
Issued on
Increase
exercise of
Other changes
Balance at
other
rights during
during the year
end of year
the year
30 June 2020
Hugh (Andrew) Edwards
Chairman
Linton Kirk
Non-Executive Director
Robert Ryan
Non-Executive Director
Chris Sutherland
Non-Executive Director
Chris Tuckwell
Managing Director /
Chief Executive Officer
Mike Sutton
Managing Director /
Chief Executive Officer
Geoff Baker
Executive Director
David Greig
Chief Operating Officer
Peter Gilford
20,000
75,000
38,604
-
1,288,801
-
12,863,816
-
Chief Financial Officer / Company
245,376
Secretary
Tim Gooch
General Manager - Mining
Mitch Wallace
General Manager -
Brazil Operations
Mark Davidovic
General Manager -
Civil and Infrastructure
164,962
290,275
-
Total
14,986,834
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40,000
20,000
-
-
-
-
-
-
-
-
-
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
115,000
58,604
-
1,288,801
-
12,863,816
-
245,376
(164,962)
(290,275)
-
-
-
-
(455,237)
14,591,597
MACA LIMITED ANNUAL REPORT 2020
42
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REMUNERATION REPORT CONTINUED
5.11 KMP REMUNERATION
5.11.1 Employment benefi ts and payments for the year ended 30 June 2020
The following table sets out the benefits and payment details, in respect to the financial year, and the components of
remuneration for members of office holders and five highest paid key management personnel of the consolidated group.
Short-term benefi ts
Salary, fees
and leave
Comm-
ittee
fees
Cash
bonus/
STI
Post-employment
benefi ts
Long-term
benefi ts
Equity-settled
sharebased
payments
Non-
monetary
Other
Super-
annuation
Other
Incentive
plans
LSL
Share /
Units
Options /
Rights
Total
Year
$
$
$
$
$
$
$
$
$
$
$
$
Executive Directors
Mike Sutton
Managing Director /
Chief Executive Officer
Geoff Baker
Operations Director
Total compensation for
Executive Directors
Non-Executive Directors
Andrew Edwards
Chairman
Linton Kirk 1
Robert Ryan 2
Christopher Sutherland
3
Total compensation
for Non-Executive
Directors
Executives (KMP)
David Greig
Chief Operating Officer
Tim Gooch
General Manager -
Mining
Mark Davidovic
General Manager -
Civil and Infrastructure
Peter Gilford
Chief Financial Officer /
Company Secretary
2020
222,798
2019
-
2020
538,958
2019
568,957
2020
761,756
2019
568,957
2020
141,553
2019
141,552
2020
125,845
2019
104,769
2020
111,581
2019
2020
2019
96,978
27,036
-
2020
406,015
2019
343,300
2020
440,077
2019
402,399
2020
413,258
2019
413,258
2020
481,950
2019
464,100
2020
390,000
2019
379,014
Total compensation for
Executives
2020 1,725,285
2019 1,658,771
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,653
-
-
-
8,653
-
13,447
13,447
8,042
8,042
-
-
2,568
-
24,057
21,489
-
-
32,096
35,853
18,597
- 18,763
39,259
-
- 22,684
39,259
32,933
-
-
-
-
-
-
-
25,000
25,203
- 18,136
25,000
- 24,918
23,544
51,530
- 36,899 121,355
-
- 47,602 123,859
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
231,451
-
138,859
677,817
- 136,696
705,653
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
138,859
909,268
136,696
705,653
-
-
-
-
-
-
-
-
-
-
155,000
155,000
133,887
112,811
111,581
96,978
29,604
-
430,072
364,789
80,400
552,573
81,527
519,779
89,837
579,714
90,384
565,585
96,348
636,231
96,045
585,348
80,897
514,033
79,563
507,039
- 347,482 2,282,551
-
347,519
2,177,751
43
MACA LIMITED ANNUAL REPORT 2020
5.11 KMP REMUNERATION (CONTINUED)
Short-term benefi ts
Salary, fees
and leave
Comm-
ittee
fees
Cash
bonus/
STI
Post-employment
benefi ts
Long-term
benefi ts
Equity-settled
sharebased
payments
Non-
monetary
Other
Super-
annuation
Other
Incentive
plans
LSL
Share /
Units
Options /
Rights
Total
Year
$
$
$
$
$
$
$
$
$
$
$
$
Former KMP
Chirs Tuckwell
Managing Director -
Chief Executive Officer
2020
665,471
2019
652,423
David Kent
General Manager -
Corporate Services
Mitch Wallace
General Manager -
Brazil Operations
Total compensation for
former KMP
Total compensation
for KMP
2020
-
2019
405,150
2020
515,323
2019
466,197
2020 1,180,794
2019 1,523,770
2020 4,073,850
2019 4,094,798
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51,530
-
-
-
-
-
-
-
-
-
-
-
29,589
19,230
52,804
44,384
25,000
-
-
-
-
-
-
-
-
26,084
3,226 230,594
-
-
29,589
22,456
283,398
44,384
51,084
-
66,488 176,521 283,398
91,986
196,432
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
109,249
876,343
168,171
889,978
-
-
53,407
484,641
91,159
840,302
92,340
558,537
-
200,408
1,716,645
- 313,918 1,933,156
- 686,749 5,338,536
-
798,133
5,181,349
1 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.
2 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.
3 Chris Sutherland resigned as a Non-Executive Director effective 10 September 2020.
MACA LIMITED ANNUAL REPORT 2020
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5.11.2 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. 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
Proportions of
elements of
remuneration
not related to
performance
Non-salary cash-
based incentives
Shares / Units
Options / Rights
Fixed Salary / Fees
Total
Year
%
%
%
%
%
Executive Directors
Mike Sutton
Managing Director / Chief Executive Officer
Geoff Baker
Operations Director
Non-Executive Directors
Andrew Edwards
Chairman
Linton Kirk
Non-Executive Director
Robert Ryan
Non-Executive Director
Chris Sutherland 4
Non-Executive Director
Executives (KMP)
David Greig
Chief Operating Officer
Tim Gooch
General Manager - Mining
Mark Davidovic
General Manager - Civil and Infrastructure
Peter Gilford
Chief Financial Officer /Company Secretary
Former KMP
Chris Tuckwell 1
CEO/Managing Director
David Kent 2
General Manager - Corporate Services
Mitch Wallace 3
General Manager - Brazil Operations
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3.2
-
5.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20.5
19.4
-
-
-
-
-
-
-
-
14.6
15.7
15.5
16.0
15.1
16.4
15.8
15.7
12.5
20.7
-
11.0
10.9
16.5
100.0
-
79.5
80.6
100.0
100.0
100.0
100.0
100.0
100.0
100.0
n/a
85.4
84.3
81.3
84.0
79.7
83.6
84.2
84.3
87.5
79.3
-
89.0
89.1
83.5
100.0
-
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
n/a
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1 Chris Tuckwell - resigned as CEO/Managing Director - effective 28th February 2020.
2 David Kent - resigned as General Manager - Corporate Services effective 28th June 2019.
3 Mitch Wallace - resigned as General Manager - Brazil Operations effective 29th March 2020.
4 Chris Sutherland - resigned as Non-Executive Director effective 10 September 2020
45
MACA LIMITED ANNUAL REPORT 2020
6.0 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
Mike Sutton
Managing Director / Chief Executive Officer
Geoff Baker
Operations Director
David Greig
Chief Operating Officer
Tim Gooch
General Manager - Mining
Mark Davidovic
General Manager - Civil and Infrastructure
Peter Gilford
Chief Financial Officer / Company Secretary
24th February 2020
The contract is ongoing and has
no fixed term
3rd November 2010
The contract is ongoing and has
no fixed term
18th July 2016
The contract is ongoing and has
no fixed term
20th June 2011
The contract is ongoing and has
no fixed term
20th February 2017
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 6 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
MACA LIMITED ANNUAL REPORT 2020
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REMUNERATION REPORT CONTINUED
7.0 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
$ / Chairman
Member
Andrew Edwards
Linton Kirk
$155,000
Board
$92,700
Robert Ryan
$92,700
Chirs Sutherland 1
$29,604
Audit Committee
Risk Committee
Remuneration Committee
Audit Committee
Risk Committee
Remuneration Committee
Audit Committee
Risk committee
Remuneration Committee
Audit Committee
Risk committee
Remuneration Committee
1 Chris Sutherland - resigned as Non-Executive Director effective 10 September 2020
47
MACA LIMITED ANNUAL REPORT 2020
8.0 OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONS AND/OR RELATED PARTIES
Key management person and/or related party
Transaction
Partnership of which current director Mr G Baker is a
25% partner.
Expense - Rent on Division St
business premises.
2020
$
2019
$
1,547,850
1,520,000
Kirk Mining Consultants - a company controlled by current
director Mr L Kirk.
Expense - Mining consulting
fees
41,187
9,504
Hensman Properties Pty Ltd - a company controlled by
Expense - Consulting fees
18,881
4,719
current director Mr R. Ryan.
Gateway Equipment Parts & Services Pty Ltd – a company
of which current director Mr G Baker is a shareholder.
Expense - Hire of equipment
and purchase of equipment,
parts and services.
4,974,153
2,456,742
Gateway Equipment Parts & Services Pty Ltd – a company
Sale of equipment
430,000
-
of which current director Mr G Baker is a shareholder.
(Revenue)
Amounts payable at year end arising from the above
transactions (Receivables Nil).
Gateway Equipment Parts & Services Pty Ltd – a company
of which current director Mr G Baker is a shareholder.
150,244
177,241
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of
Directors.
On behalf of the Directors
Mike Sutton
Managing Director
25th day of September, 2020
Perth
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
AUDITOR’S INDEPENDENCE
DECLARATION
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Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
(cid:7)(cid:1)(cid:22)(cid:23)(cid:21)(cid:57)(cid:19)(cid:35)(cid:23)(cid:1)(cid:37)(cid:26)(cid:19)(cid:37)(cid:44)(cid:1)(cid:37)(cid:32)(cid:1)(cid:37)(cid:26)(cid:23)(cid:1)(cid:20)(cid:23)(cid:36)(cid:37)(cid:1)(cid:32)(cid:24)(cid:1)(cid:30)(cid:42)(cid:1)(cid:29)(cid:31)(cid:32)(cid:41)(cid:57)(cid:23)(cid:22)(cid:25)(cid:23)(cid:1)(cid:19)(cid:31)(cid:22)(cid:1)(cid:20)(cid:23)(cid:57)(cid:27)(cid:23)(cid:24)(cid:44)(cid:1)(cid:22)(cid:39)(cid:35)(cid:27)(cid:31)(cid:25)(cid:1)(cid:37)(cid:26)(cid:23)(cid:1)(cid:42)(cid:23)(cid:19)(cid:35)(cid:1)(cid:23)(cid:31)(cid:22)(cid:23)(cid:22)(cid:1)(cid:55)(cid:53)(cid:1)(cid:8)(cid:39)(cid:31)(cid:23)(cid:1)(cid:54)(cid:53)(cid:54)(cid:53)(cid:1)(cid:37)(cid:26)(cid:23)(cid:35)(cid:23)(cid:1)(cid:26)(cid:19)(cid:40)(cid:23)(cid:1)(cid:20)(cid:23)(cid:23)(cid:31)(cid:1)
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Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation
49
MACA LIMITED ANNUAL REPORT 2020
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’s Vision is
to “Be Number 1 in what we do”, and
we achieve this by demonstrating the
Core Values of the Company – People
First, Exceed Expectations, Continuous
Improvement, Accountability and
Community. Our Core Values are
underpinned by our commitment to our
Promise – We Care, We are Flexible and
We Deliver. 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 (4th Edition);
and
- The reasons for any departures
from the Corporate Governance
Council’s Corporate Governance
Principles and Recommendations
(4th 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 the Companies Corporate
Governance Statement (CGS) is
shown below.
ASX CORPORATE GOVERNANCE
PRINCIPLES AND BEST PRACTICE RECOMMENDATIONS
REFERENCE AND
IF COMPLIANT
PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
A listed entity should clearly delineate the respective roles and responsibilities of its board
and management and regularly review their performance.
Recommendation 1.1
A listed entity should have and disclose a board charter setting out:
(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.
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a director or senior executive or putting
someone forward 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.
Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive
setting out the terms of their appointment.
Recommendation 1.4
The company secretary of a listed entity should be accountable directly to the board,
through the chair, on all matters to do with the proper functioning of the board.
✓
✓
✓
1.1
Board Charter in CGS
1.2
Board Charter in CGS
1.3
Remuneration Report in CGS
✓
1.4
Board Charter in CGS
✓
MACA LIMITED ANNUAL REPORT 2020
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CORPORATE GOVERNANCE STATEMENT CHECKLIST CONTINUED
ASX CORPORATE GOVERNANCE
PRINCIPLES AND BEST PRACTICE RECOMMENDATIONS
Recommendation 1.5
A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a committee of the board set measurable objectives for achieving
gender diversity in the composition of its board, senior executives and workforce generally;
and
(c) disclose in relation to each reporting period:
(1) the measurable objectives set for that period to achieve gender diversity;
(2) the entity’s progress towards achieving those objectives;
(3) either:
(A) the respective proportions of men and women on the Board, in senior executive
positions and across the whole workforce (including how the entity has defined
“senior executive” for these purposes); or
(B) 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.
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken
in accordance with that process during or in respect of that period.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for evaluating the performance of its senior executives at least
once every reporting period; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken
in accordance with that process during or in respect of that period.
PRINCIPLE 2 - STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE
The board of a listed entity should be an appropriate size and collectively have the skills,
commitment and knowledge of the entity and the industry in which it operates, to enable it to
discharge its duties effectively and to add value.
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director, and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose the fact and the processes it employs
to address board succession issues and to ensure that the board has the appropriate balance
of skills, knowledge, experience, independence and diversity to enable it to discharge its
duties and responsibilities effectively.
51
MACA LIMITED ANNUAL REPORT 2020
REFERENCE AND
IF COMPLIANT
1.5
✓
Diversity Procedure in CGS
1.6
✓
Disclosure - Performance
Evaluation in CGS
1.7
✓
Disclosure - Performance
Evaluation in CGS
2.1
Directors Report
Board Charter in CGS
✓
Nomination Committee
Charter in CGS
ASX CORPORATE GOVERNANCE
PRINCIPLES AND BEST PRACTICE RECOMMENDATIONS
Recommendation 2.2
A listed entity should have and disclose a Board skills matrix setting out the mix of skills that
the Board currently has or is looking to achieve in its membership.
Recommendation 2.3
A listed entity should disclose:
(a) the names of the directors considered by the Board to be independent directors;
(b) if a Director has an interest, position, 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 or relationship in question
and an explanation of why the board is of that opinion; and
(c) the length of service of each director.
Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
Recommendation 2.5
The chair of the board of a listed entity should be an independent director and, in particular,
should not be the same person as the CEO of the entity.
Recommendation 2.6
A listed entity should have a program for inducting new directors and for periodically
reviewing whether there is a need for existing directors to undertake professional
development to maintain the skills and knowledge needed to perform their role as directors
effectively.
PRINCIPLE 3 - INSTIL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY
A listed entity should instil and continually reinforce a culture across the organisation of acting
lawfully, ethically and responsibly.
Recommendation 3.1
A listed entity should articulate and disclose its values.
Recommendation 3.2
A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of
that code.
Recommendation 3.3
A listed entity should:
(a) have and disclose a whistleblower policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents
reported under that policy.
Recommendation 3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents
reported under that policy.
REFERENCE AND
IF COMPLIANT
2.2
2.3
Definition of
Independence in CGS
2.4
2.5
2.6
Board Charter in CGS
Nomination Committee
Charter in CGS
3.1
Corporate Code of
Conduct in CGS
3.2
Corporate Code of
Conduct in CGS
✓
✓
✓
✓
✓
✓
✓
3.3
✓
Whistleblower
Procedure in CGS
3.4
✓
Anti-Bribery and
Corruption Procedure
in CGS
MACA LIMITED ANNUAL REPORT 2020
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CORPORATE GOVERNANCE STATEMENT CHECKLIST CONTINUED
ASX CORPORATE GOVERNANCE
PRINCIPLES AND BEST PRACTICE RECOMMENDATIONS
PRINCIPLE 4 - SAFEGUARD THE INTEGRITY OF CORPORATE REPORTS
A listed entity should have appropriate processes to verify the integrity of its corporate reports.
Recommendation 4.1
The board of a listed entity should :
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of
whom are independent directors; and
(2) is chaired by an independent director, who is not chair of the board, and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5) in relation to each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings.
REFERENCE AND
IF COMPLIANT
4.1
✓
Audit Committee Charter in
CGS
Recommendation 4.2
4.2
✓
The Board of a listed entity should, before it approves the entity’s financial statements for a
financial period, receive from its Managing Director and Chief Financial Officer a declaration
that, in their opinion the financial records of the entity have been properly maintained and that
the financial statements comply with the appropriate accounting standards and give a true
and fair view of the financial position and performance of the entity and that the opinion has
been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
Recommendation 4.3
4.3
✓
A listed entity should disclose its process to verify the integrity of any periodic corporate
report it releases to the market that is not audited or reviewed by an external auditor.
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.
Recommendation 5.1
A listed entity should have and disclose a written policy for complying with its continuous
disclosure obligations under Listing Rule 3.1.
Recommendation 5.2
A listed entity should ensure that its board receives copies of all material announcements
promptly after they have been made.
Recommendation 5.3
A listed entity that gives a new and substantive investor or analyst presentation should release
a copy of the presentation materials on the ASX Market Announcements Platform ahead of the
presentation.
5.1
Continuous
Disclosure in CGS
Compliance
Procedure in CGS
5.2
5.3
✓
✓
✓
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MACA LIMITED ANNUAL REPORT 2020
ASX CORPORATE GOVERNANCE
PRINCIPLES AND BEST PRACTICE RECOMMENDATIONS
PRINCIPLE 6 - RESPECT THE RIGHTS OF SECURITY HOLDERS
A listed entity should provide its security holders with appropriate information and facilities to
allow them to exercise their rights as security holders effectively.
Recommendation 6.1
A listed entity should provide information about itself and its governance to investors via its
website.
Recommendation 6.2
A listed entity should have an investor relations program that facilitates effective two-way
communication with investors.
Recommendation 6.3
REFERENCE AND
IF COMPLIANT
6.1
Shareholder
Communication
Strategy in CGS
6.2
6.3
A listed entity should disclose how it facilitates and encourages participation at meetings of
security holders.
Investor Centre in CGS
Recommendation 6.4
A listed entity should ensure that all substantive resolutions at a meeting of security holders
are decided by a poll rather than by a show of hands.
Recommendation 6.5
A listed entity should give security holders the option to receive communications from, and
send communications to, the entity and its security registry electronically.
PRINCIPLE 7 - RECOGNISE AND MANAGE RISK
A listed entity should establish a sound risk management framework and periodically review
the effectiveness of that framework.
Recommendation 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.
Recommendation 7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound and that the entity is operating with due regard to the risk appetite set
by the board; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
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✓
✓
✓
✓
✓
6.4
Shareholder
Communication
Strategy
in CGS
6.4
Shareholder
Communication
Strategy in CGS
7.1
Risk Committee
Charter in CGS
7.2
✓
Disclosure -
Risk Management in CGS
MACA LIMITED ANNUAL REPORT 2020
54
FINANCIAL REPORT
CORPORATE GOVERNANCE STATEMENT CHECKLIST CONTINUED
ASX CORPORATE GOVERNANCE
PRINCIPLES AND BEST PRACTICE RECOMMENDATIONS
Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs;
and
(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 governance, risk management
and internal control processes.
Recommendation 7.4
A listed entity should disclose whether it has any material exposure to environmental or social
risks and, if it does, how it manages those risks.
PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY
A listed entity should pay director remuneration sufficient to attract and retain high quality
directors and design its executive remuneration to attract, retain and motivate high quality
senior executives and to align their interests with the creation of value for security holders and
with the entity’s values and risk appetite.
Recommendation 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
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.
Recommendation 8.2
A listed entity should separately disclose its policies and practices regarding the remuneration
of non-executive directors and the remuneration of executive directors and other senior
executives.
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme should :
(a) have a policy on whether participants are permitted to enter into transactions (whether
through the use of derivatives or otherwise) which limit the economic risk of participating in
the scheme; and
(b) disclose that policy or a summary of it.
REFERENCE AND
IF COMPLIANT
7.3
In CGS
7.4
In CGS
✓
✓
8.1
✓
Remuneration Report
in CGS
Remuneration Committee
Charter in CGS
8.2
Remuneration Report
in CGS
8.3
Remuneration Report
in CGS
✓
✓
55
MACA LIMITED ANNUAL REPORT 2020
DIRECTORS’ DECLARATION
The directors of the company declare that:
1. The financial statements set out on pages 57 to 100 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards which as stated in the accounting policies included in 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 2020 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 International Financial Reporting
Standards; and
(c) the financial statements and notes for the financial year give a true and fair view of the financial performance and
results of the entity.
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:
Mike Sutton
Chief Executive Officer and Managing Director
Dated at 25th September 2020
MACA LIMITED ANNUAL REPORT 2020
56
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FINANCIAL REPORT
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the Year Ended 30 June 2020
Continuing Operations
Revenue
Other Income
Direct Costs
Finance Costs
Impairment of Assets
Fair Value Gains / (Losses) on Financial Assets
Foreign Exchange Gains / (Losses)
Other Expenses from Ordinary Activities
Profit Before Income Tax
Income Tax Expense
Profi t After Tax from Continuing Operations
Discontinued Operations
Profit / (Loss) After Tax from Discontinued Operations
Transfer of Foreign Exchange Reserve on Discontinued Operations
Profi t / (Loss) for the Year
Other Comprehensive Income:
Exchange Differences on Translating Foreign Operations
Transfer of Foreign Exchange Reserve on Discontinued Operations
Total Comprehensive Income for the Year
Profit / (Loss) Attributable to:
- Non-Controlling Interest
- Members of the Parent Entity
Total Comprehensive Income Attributable to:
- Non-Controlling Interest
- Members of the Parent Entity
Earnings per Share
From Continuing and Discontinued Operations:
- Basic Earnings per Share (cents)
- Diluted Earnings per Share (cents)
From Continuing Operations:
- Basic Earnings per Share (cents)
- Diluted Earnings per Share (cents)
From Discontinued Operations:
- Basic Earnings per Share (cents)
- Diluted Earnings per Share (cents)
Section
3.1(a)
3.1(b)
3.1(c)
3.6.1(a)
3.7
5.6
5.6
5.6
3.8
3.8
3.8
3.8
3.8
3.8
30 June
2020
$’000
30 June
2019
$’000
795,755
38,013
(748,000)
(6,468)
(51,602)
-
1,415
(23,044)
6,069
(2,486)
3,583
(10,472)
(10,567)
(17,456)
(2,072)
10,567
(8,961)
418
(17,874)
(17,456)
418
(9,379)
(8,961)
(6.67)
(6.57)
1.18
1.16
(7.85)
(7.74)
639,948
31,674
(621,152)
(3,391)
-
(404)
1,667
(16,327)
32,015
(9,593)
22,422
(7)
-
22,415
4,155
-
26,570
1,841
20,574
22,415
1,841
24,729
26,570
7.68
7.60
7.68
7.60
0.00
0.00
* The comparative Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Year Ended 30 June 2019 has
been restated to conform with AASB 5: Non-Current Assets Held for Sale and Discontinued Operations.
The accompanying Sections form part of these Financial Statements
57
MACA LIMITED ANNUAL REPORT 2020
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at 30 June 2020
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Loans to Other Companies
Inventory
Work In Progress
Other Financial Assets
Other Assets
Total Current Assets
Non-Current Assets
Trade and Other Receivables
Property, Plant and Equipment*
Loans to Other Companies
Other Financial Assets
Goodwill
Deferred Tax Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Interest Bearing Liabilities
Current Tax Liabilities
Short-Term Provisions
Total Current Liabilities
Non-Current Liabilities
Deferred Tax Liabilities
Interest Bearing Liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Reserves
Retained Profits
Parent Interest
Non-Controlling Interest
Total Equity
Section
5.1.1
4.1
4.1
4.2
4.2
4.1
4.3
4.1
4.4
4.1
4.1
4.5
3.6.2(a)
4.6
5.2.1
3.6.2(b)
4.7
3.6.2(b)
5.2.1
5.5
5.6
30 June
2020
$’000
30 June
2019
$’000
114,650
154,329
-
12,438
1,201
69
5,550
288,237
-
293,318
26,841
-
-
23,559
343,718
631,955
116,078
55,127
2,169
15,976
189,350
-
132,945
132,945
322,295
309,660
269,806
(5,298)
41,619
306,127
3,533
309,660
59,292
175,649
22,300
14,306
1,717
7,076
1,815
282,155
15,139
238,280
25,655
6,514
3,187
13,513
302,288
584,443
87,942
42,272
3,732
13,657
147,603
4,326
99,848
104,174
251,777
332,666
269,806
(13,793)
73,496
329,509
3,157
332,666
*Includes Right-Of-Use Assets
The accompanying Sections form part of these Financial Statements
MACA LIMITED ANNUAL REPORT 2020
58
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FINANCIAL REPORT
CONSOLIDATED STATEMENT OF
CHANGES OF EQUITY
For the Year Ended 30 June 2020
Issued
Capital
Retained
Profi ts
Outside
Equity
Interest
General
Reserves
Option
Reserve
FX
Reserve
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 Jul 2018
269,806
67,662
1,316
(5,888)
590
(12,650)
320,836
Profit / (Loss) for the Year
-
20,574
1,841
-
-
-
22,415
SUB-TOTAL
269,806
88,236
3,157
(5,888)
590
(12,650)
343,251
Other Comprehensive Income:
Forex in Translating Foreign
Operations
SUB-TOTAL
Dividends Paid
-
-
-
-
-
4,155
4,155
269,806
88,236
3,157
(5,888)
590
(8,495)
347,406
-
(14,740)
-
-
-
-
(14,740)
Balance at 30 Jun 2019
269,806
73,496
3,157
(5,888)
590
(8,495)
332,666
Balance at 1 Jul 2019
269,806
73,496
3,157
(5,888)
590
(8,495)
332,666
Effect of AASB16
-
(603)
(42)
-
-
-
(645)
Restated Balance at 1 Jul 2019
269,806
72,893
3,115
(5,888)
590
(8,495)
332,021
Profit / (Loss) for the Year
-
(17,874)
418
-
-
-
(17,456)
SUB-TOTAL
269,806
55,019
3,533
(5,888)
590
(8,495)
314,565
Other Comprehensive Income:
Forex in Translating Foreign
Operations
Transfer of FX Reserve on
Discontinued Operations
SUB-TOTAL
Dividends Paid
-
-
-
-
-
-
-
-
269,806
55,019
3,533
(5,888)
-
(13,400)
-
-
Balance at 30 Jun 2020
269,806
41,619
3,533
(5,888)
-
(2,072)
(2,072)
-
10,567
10,567
590
-
590
-
-
-
323,060
(13,400)
309,660
The accompanying Sections form part of these Financial Statements.
59
MACA LIMITED ANNUAL REPORT 2020
CONSOLIDATED STATEMENT OF
CASH FLOWS
For the Year Ended 30 June 2020
Cash Flows From Operating Activities
Receipts from Customers
Payments to Suppliers and Employees
Interest Received
Interest Paid
Income Tax Paid
Section
30 June
2020
$’000
30 June
2019
$’000
787,478
629,567
(652,119)
(568,027)
3,292
8,055
(6,834)
(15,187)
(4,109)
(7,965)
Net Cash Provided By / (Used In) Operating Activities
5.1.2
116,630
57,521
Cash Flow From Investing Activities
Proceeds from Sale of Investments
Proceeds from Sale of Property, Plant and Equipment
Purchase of Property, Plant and Equipment*
Net Loans Repaid by / (Provided to) Customers
Purchase of Investments
Net Cash Provided By / (Used In) Investing Activities
Cash Flow From Financing Activities
Proceeds from Borrowings*
Repayment of Borrowings
Dividends Paid by the Parent
Net Cash Provided by / (Used In) Financing Activities
Net Increase/(Decrease) in Cash Held
Effect of Forex Rate Changes
Cash and Cash Equivalents at the Beginning of the Year
19,836
10,348
7,735
1,620
(63,444)
(89,318)
22,591
(19,925)
(5,435)
(19,755)
(18,717)
(117,030)
23,821
47,965
(52,975)
(27,337)
(13,400)
(14,741)
(42,554)
5,887
55,359
(53,622)
(1)
4,675
59,292
108,239
Cash and Equivalents at the End of the Year
5.1.1
114,650
59,292
* Non-Cash Financing and Investing Activities
During the period ended 30 June 2020 the Group acquired $61.1 million (2019: $76.6m) in plant and equipment by means of
finance leases (included in right-of-use assets), directly from original equipment manufacturers. These acquisitions are not
reflected above.
The accompanying Sections form part of these Financial Statements.
MACA LIMITED ANNUAL REPORT 2020
60
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
SECTION 1 GENERAL INFORMATION
1.1 REPORTING ENTITY
1.3 BASIS OF CONSOLIDATION
MACA Limited (MLD) is a limited company incorporated
in Australia. The addresses of the Company’s registered
office and principal places of business are disclosed in
the Corporate Directory. The principal activities of the
Company are described in the Directors’ Report.
The Financial Statements were authorised for issue by
the Directors on 25th September 2020.
1.2 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 Company 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 and rounded to the
nearest thousand ($’000), unless otherwise stated,
in accordance with ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191.
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of MACA Limited
(the ‘Company’) as at 30 June 2020 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 “Group” or “Consolidated”.
Subsidiaries are all those entities over which the
Company has control. The Company controls an
entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has
the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised
gains on transactions between entities in the Group
are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by
the Group.
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 Group. Losses incurred by
the Group are attributed to the non-controlling interest
in full.
61
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
1.4 NEW ACCOUNTING STANDARDS APPLIED DURING
THE PERIOD
The Group has considered the implications of new or
amended Accounting Standards which have become
applicable for the current financial reporting period.
The Group had to change its accounting policies and
make adjustments as a result of adopting the following
Standard:
AASB 16: Leases
The impact of the adoption of this Standard and the
respective accounting policies is disclosed in the note
below:
Changes in Accounting Policies
This note describes the nature and effect of the
adoption of AASB 16: Leases on the Group’s financial
statements and discloses the new accounting policies
that have been applied from 1 July 2019, where they are
different to those applied in prior periods.
a. Leases
The Group as lessee
At inception of a contract, the Group assesses if the
contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding lease
liability are recognised by the Group, where the Group
is a lessee. However, all contracts that are classified as
short-term leases (i.e. a lease with a remaining lease
term of 12 months or less) and leases of low-value
assets are recognised as an operating expenses on a
straight-line basis over the term of the lease.
Initially the lease liability is measured at the present
value of the lease payments still to be paid at the
commencement date. The lease payments are
discounted at the interest rate implicit in the lease. If
this rate cannot be readily determined, the Group uses
the incremental borrowing rate.
Lease payments included in the measurement of the
lease liability are as follows:
- fixed lease payments less any lease incentives;
- variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
- the amount expected to be payable by the lessee
under residual value guarantees;
- the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options;
- lease payments under extension options, if the lessee
is reasonably certain to exercise the options; and
- payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.
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The right-of-use assets comprise the initial
measurement of the corresponding lease liability, any
lease payments made at or before the commencement
date and any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term
or useful life of the underlying asset, whichever is the
shortest.
Where a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects that
the Group anticipates to exercise a purchase option, the
specific asset is depreciated over the useful life of the
underlying asset.
b. Initial Application of AASB 16: Leases
The Group has adopted AASB 16 using the modified
retrospective approach from 1 July 2019 and as such has
not restated comparatives for the 2019 reporting period,
as permitted under the specific transitional provisions in
the standard. The reclassifications and the adjustments
arising under AASB 16 are therefore recognised in the
opening balance sheet on 1 July 2019.
The Group has recognised a lease liability and right-of-
use asset for all leases, except for the short-term and
low-value leases which are recognised as operating
leases under AASB 117: Leases where the Group is the
lessee.
There has been no significant change from prior year
treatment for leases where the Group is a lessor.
Lease liabilities are measured at the present value of
the remaining lease payments. The Group’s incremental
borrowing rate as at 1 July 2019 was used to discount
the lease payments.
The right-of-use assets were measured at the carrying
amount as if AASB 16 had been applied since the
commencement date, but discounted using the Group’s
incremental borrowing rate per lease term as at 1 July
2019.
The right-of-use assets for the remaining leases have
been measured and recognised in the statement of
financial position as at 1 July 2019 by taking into
consideration the lease liability and the prepaid and
accrued lease payments previously recognised as at 1
July 2019 (that are related to the lease).
The following practical expedients have been used by
the Group in applying AASB 16 for the first time:
- for a portfolio of leases that have reasonably similar
characteristics, a single discount rate has been
applied.
- leases that have remaining lease term of less than 12
months as at 1 July 2019 have been accounted for in
the same way as short-term leases.
MACA LIMITED ANNUAL REPORT 2020
62
FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
1.4 NEW ACCOUNTING STANDARDS APPLIED
DURING THE PERIOD (CONTINUED)
- the use of hindsight to determine lease terms on
contracts that have options to extend or terminate.
- applying AASB 16 to leases previously identified as
leases under AASB 117: Leases and Interpretation 4:
Determining whether an arrangement contains a lease
without reassessing whether they are, or contain, a
lease at the date of initial application.
- not applying AASB 16 to leases previously not
identified as containing a lease under AASB 117 and
Interpretation 4.
The Group’s weighted average incremental borrowing
rate on 1 July 2019 applied to the lease liabilities
was 4%.
The effect of the application of AASB 16 in respect to the
operating lease under AASB 117 on the statement of
financial position on 1 July 2019 was as follows:
Impact of the
Application of AASB 16
Section
1 July 2019
$’000
Right-of-Use Assets (net of
accumulated depreciation of $3.04m)
Total impact on assets
Lease Liabilities
Total impact on liabilities
Net impact on retained earnings
4.4
5.2.1
13,138
13,138
13,783
13,783
(645)
Refer to Section 3.4, 4.4 and 5.2 for details of the impact on
the financial statements
1.5 NEW ACCOUNTING STANDARDS FOR APPLICATION IN
FUTURE PERIODS
A number of new accounting standards, amendments to
standards and interpretations are not yet effective for
the 30 June 2020 reporting period and have not been
early adopted in preparing these financial statements.
The Directors’ assessment of these new accounting
standards (to the extent relevant to the Group) and
interpretations is that they are not expected to have a
material effect on the financial statements of the Group.
1.6 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.
SECTION 2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Directors evaluate estimates and judgments incorporated into the financial report 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 AND JUDGEMENTS
Impairment - Property, Plant and Equipment
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.
Impairment - Trade and Other Receivables and Loans to
Other Companies
As at 30 June 2020, the Group’s trade and other receivables
and loans to other companies amounted to $229.6m (30 June
2019: $238.74m), before recognition of any impairment.
Based on the Group’s historical credit loss experience and
forward looking macroeconomic data, trade receivables
and loans to other companies exhibit different loss patterns
for each revenue segment. Where the Group has common
customers across the different geographical regions it
applies credit evaluations firstly by segment. Receivables
identified within each revenue segment, are then evaluated
on an individual basis. Management has assessed that
trade receivable with Carabella Resources Pty Ltd is credit
impaired and has made a provision through the profit and
loss of $48.4 million, this reflects the lifetime expected
credit loss. There were no further receivables that were
considered material and impaired.
63
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
2.0 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
In the assessment of loans to other companies, no overdue
payments were outstanding for greater than 12 months and
the loan to Carabella Resources Pty Ltd has first ranking
securities over the company assets. (Refer to Section 5.3 for
details)
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.
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
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.
SECTION 3 RESULTS FOR THE YEAR
This section focuses on the results and performance of the Group and includes disclosures explaining the Group’s results
for the year, segment information, capital and leasing commitments, taxation, profit/(loss) from discontinued operations
and EPS.
3.1 REVENUE
Accounting Policies
Revenue Recognition
Under AASB 15, revenue is recognised when the
performance obligations are considered met, which can be
at a point in time, or over time, depending on the various
service offerings. Major activities of the Group are detailed
below.
Contract Services
Contracts for services includes contract mining, drill and
blast, excavation, earthmoving, crushing, infrastructure and
road construction and maintenance.
The relevant performance obligations are fulfilled over time
as the Group enhances assets which the customer controls,
for which the Group does not have an alternative use and for
which the Group has a right to payment for performance to
date and as such revenue is recognised over time.
Revenue is measured and recognised monthly using the
outputs method, either based on units of production
(typically for contract mining services, which is the largest
segment in the Group) or on the achievement of milestones
(generally for civil and infrastructure projects) at agreed
contract rates that are aligned with the stand alone selling
prices for each performance obligation. The majority of the
Group’s revenue (i.e. in respect of mining services) is paid
one month in arrears and therefore gives rise to a process
of invoicing or accruing revenue monthly, based on the
achievement of contractually agreed production related
measures, as noted above.
For rental of equipment, as the customer simultaneously
receives and consumes the benefits, the Group has an
enforceable right to payment, based on agreed contract
rates, and as such the performance obligation is fulfilled
over time.
The total transaction price for contract services may include
variable consideration. Variable consideration is only
recognised and recorded in the accounts to the extent that it
is highly probable that a significant reversal in the amount of
revenue recognised will not occur.
Sale of Inventory
Revenue recognised at a point in time is only 1% of the
Group’s trading revenue. This is noted under note 3.2
Operating Segments and refers only to Interquip revenues
of which 22% of their trading revenues comprise the sale of
inventory. At the point of recognising the revenue the Group
has agreed the price of the transaction, transferred the
physical asset and the customer has accepted control of the
asset and its intended use of the asset.
Other Revenue
Other revenue and other income primarily includes profit or
loss on sale of assets or investments, dividends received,
government rebates (including diesel fuel rebates) and
interest income which is recognised on an accrual basis.
All dividends received are recognised as revenue when the
right to receive the dividend has been established.
All revenue is stated net of the amount of goods and services
tax (GST).
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.1 REVENUE (CONTINUED)
The following is an analysis of the Group’s revenue and other income for the year:
Continuing Operations
Section
$’000
$’000
30 June
2020
30 June
2019
3.1(a) Revenue from Operating Activities
Contract Trading Revenue
Interest Received
Other Revenue
Total Revenue from Operating Activities
3.1(b) Other Income
Profit / (Loss) on Disposal of Property, Plant and Equipment
Profit / (Loss) on Sale of Investments
Rebates
Total Other Income
3.1(c) Impairment of Assets
Impairment of Receivables
Impairment of Goodwill
Total Impairment
790,058
634,429
3,223
2,474
795,755
5,124
395
639,948
3,402
(299)
34,910
38,013
48,415
3,187
51,602
1,030
188
30,456
31,674
-
-
-
4.1
4.5
3.2 OPERATING SEGMENTS
Identifi cation 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 in three business and two geographical
segments, being the provision of civil, SMP and contract
mining services throughout Australia and mining services
to the mining industry in Brazil, South America. Operations
in Brazil have been discontinued during the year and are
presented separately in the table below.
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, are in
accordance with accounting policies that are consistent to
those adopted in the financial statements of the Group.
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.
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.
Inter-segment transactions
Unallocated items
Inter-segment loans payable and receivable are initially
recognised 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
The following items of revenue and expense are not
allocated to operating segments as they are not considered
part of the core operations of any segment:
- Dividends, interest, head office and other administration
expenditure
65
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.2 OPERATING SEGMENTS (CONTINUED)
Consolidated - June 2020
Revenue
Reportable Segment Revenue1
Other Revenue
Total Revenue
EBITDA*
Depreciation and Amortisation
Impairment
Interest Revenue
Finance Costs
Net Profi t/(Loss) Before Tax
Income Tax Expense
Net Profi t After Tax
Net Loss After Tax from Discontinued Operations
Profi t / (Loss) for the Year
Assets
Segment Assets
Total Assets
Liabilities
Segment Liabilities
Total Liabilities
Mining
Civil/
Infrastructure
Interquip Unallocated
Total
$’000
$’000
$’000
$’000
$’000
570,774
36,324
607,098
111,698
(66,248)
(48,415)
1,785
(6,235)
(7,415)
191,173
(42)
191,131
13,083
(1,285)
(3,187)
24
(156)
8,479
30,797
(3)
30,794
2,105
(1,021)
-
4
(53)
1,035
3,011
795,755
1,734
4,745
38,013
833,768
2,584
129,470
-
-
(68,554)
(51,602)
1,410
(24)
3,970
470,246
71,260
21,463
68,986
266,642
49,749
4,185
1,719
3,223
(6,468)
6,069
(2,486)
3,583
(21,039)
(17,456)
631,955
631,955
322,295
322,295
Capital Expenditure
117,975
6,037
513
-
124,525
1Excludes revenue of $12.2m from discontinued operation from Brazil
*EBITDA is Earnings Before Interest, Income Tax, Depreciation and Amortisation of Continuing Operations
22% of Interquip segment revenue has been derived at a point in time. This represents only 1% of the Group’s total trading
revenue. All other Group revenue is derived over time.
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.2 OPERATING SEGMENTS (CONTINUED)
Consolidated - June 2019
Revenue
Reportable Segment Revenue1
Other Revenue
Total Revenue
EBITDA*
Depreciation and Amortisation
Impairment
Interest Revenue
Finance Costs
Net Profi t/(Loss) Before Tax
Income Tax Expense
Net Profi t After Tax
Net Loss After Tax from Discontinued Operations
Profi t for the Year
Assets
Segment Assets
Total Assets
Liabilities
Segment Liabilities
Total Liabilities
Mining
Civil/
Infrastructure
Interquip Unallocated
Total
$’000
$’000
$’000
$’000
$’000
447,691
30,920
478,611
63,151
(36,204)
-
2,254
(3,192)
26,009
138,920
50,530
2,807
639,948
10
138,930
2
50,532
742
3,549
31,674
671,622
792
68,299
(1,405)
(1,041)
-
15
(180)
(2,611)
5,761
(772)
-
48
(19)
5,018
-
-
2,807
-
3,599
451,635
31,234
26,785
74,789
214,136
24,219
8,903
4,519
(38,017)
-
5,124
(3,391)
32,015
(9,593)
22,422
(7)
22,415
584,443
584,443
251,777
251,777
Capital Expenditure
164,675
491
754
-
165,920
1Excludes revenue of $25.8m from discontinued operation from Brazil
*EBITDA is Earnings Before Interest, Income Tax, Depreciation and Amortisation of Continuing Operations
Geographical Information
Australia
Brazil (Discontinued Operations)
Total
Major Customers
Revenue
Non-Current Assets
30 June
2020
$’000
30 June
2019
$’000
30 June
2020
$’000
30 June
2019
$’000
795,755
639,948
333,292
266,492
12,186
807,941
25,772
665,720
10,426
343,718
35,796
302,288
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 31.4%, 10.9% and 8.5% of external revenue. (2019: 35.6%, 9% and
7.9%). The next most significant client across the Group accounts for 10.9% (2019: 7.2%) of external revenue.
67
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.3 OPERATING COSTS FROM CONTINUING OPERATIONS
Expenses
Depreciation and Amortisation
– Plant and Equipment
– Motor Vehicles
– Other
30 June
30 June
2020
$’000
2019
$’000
Section
65,582
37,107
509
2,463
68,554
662
248
38,017
Total Depreciation and Amortisation Expense*
3.2
*The amount above excludes the depreciation of $3.46m (2019: $4.65m) for discontinued operations.
Employee Benefits Expense
Repairs, Service and Maintenance
Materials and Supplies
3.4 CAPITAL AND LEASING COMMITMENTS
Accounting Policies
Leases
289,988
273,202
55,360
53,029
129,244
122,178
AASB 16 Leases has been adopted by the Group at 1 July
2019 and contains significant changes to the accounting
treatment of leases around how to recognise, measure and
disclose. These are detailed in the Changes in Accounting
Policies Note, Note 4.4 and 5.2. The new standard provides
a single lessee accounting model, requiring lessees to
recognise assets and liabilities for all leases, with exception
of short term (less than 12 months) and low value leases.
The Group manages its owned and leased assets to ensure
there is an appropriate level of equipment to meet its
current obligations and to tender for new work. The decision
as to whether to lease or purchase an asset is dependent
on the finance available at the time and the residual risk
of ownership following the anticipated completion of the
project.
(a) 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
Total Operating Lease Commitments
(b) Capital Expenditure Commitments
Plant and Equipment Purchases
Payable
– Not Later Than 12 Months
– Between 12 Months and 5 Years
– Greater Than 5 Years
Total Minimum Commitments
30 June
2020
$’000
30 June
2019
$’000
-
-
-
-
40,300
-
-
40,300
2,979
8,817
4,268
16,064
21,100
-
-
21,100
$40.3m of commitments for property, plant and equipment expenditure existed at 30 June 2020 (2019: $21.1m). These
commitments are largely associated with the Okvau and Corunna Downs projects for EMR and Atlas Iron respectively.
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.5 AUDITOR’S REMUNERATION
Auditor’s Remuneration - Moore Australia (WA)
Auditor’s Remuneration - Moore Australia (WA)
Audit or Review of the Financial Report
Audit or Review of the Financial Report
Other Non-Audit Services
Other Non-Audit Services
Taxation Services
Taxation Services
Total Auditor’s Remuneration
Total Auditor’s Remuneration
3.6 TAXATION
Accounting Policies
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.
69
MACA LIMITED ANNUAL REPORT 2020
30 June
30 June
30 June
30 June
20202020
$’000
$’000
20192019
$’000
$’000
239
239
230
230
- -
- -
- -
- -
239
239
230
230
Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against
which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments
in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where
the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in
the foreseeable future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the
respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of
set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where it
is intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will occur
in future periods in which significant amounts of deferred tax
assets or liabilities are expected to be recovered or settled.
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.
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.6 TAXATION (CONTINUED)
Continuing Operations
3.6.1 Income Tax Expense
(a) The Components of Tax Expense Comprise:
Current
Deferred
Income Tax Expense
(b) Reconciliation:
Prima Facie Tax Payable on Profit From Ordinary Activities Before Income Tax at 30% (2019: 30%)
Add Tax Effect of
– Dividend Imputation
– Other Non-Allowable Items
– Other Taxable Items
– Under/(Over) provision of Prior Years’ Tax Expense
Less Tax Effect of
– Franking Credits on Dividends Received
– Other Deductible Items
Income tax attributable to the Group
The Applicable Weighted Average Effective Tax Rate as*
30 June
30 June
2020
$’000
2019
$’000
16,858
(14,372)
2,486
10,494
(901)
9,593
1,821
9,605
1,723
412
5,017
(277)
(5,743)
(467)
2,486
41%
1,895
124
4,286
-
(6,317)
-
9,593
30%
*Permanent tax difference of $1m arising from the impairment of goodwill has increased the tax rate from 30% to 41% for
the year.
3.6.2 Tax Assets and Liabilities
(a) Tax Assets
Non-Current
Deferred Tax Assets comprise:
Provisions
Losses
Other
Total Non-Current Tax Assets
(b) Tax Liabilities
Current
Income tax
Total Current Tax Liabilities
Non-Current
Deferred Tax Liabilities comprises:
Depreciation
Other
Total Non-Current Tax Liabilities
Section
3.6.3(c)
3.6.3(c)
3.6.3(c)
30 June
30 June
2020
$’000
2019
$’000
5,725
2,733
15,101
23,559
4,671
8,293
549
13,513
2,169
2,169
3,732
3,732
3.6.3(b)
-
-
-
4,306
20
4,326
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.6 TAXATION (CONTINUED)
30 June
30 June
2020
$’000
2019
$’000
3.6.3 Reconciliations
(a) 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
9,187
14,372
-
23,559
(b) Deferred Tax Liabilities
The Movement In Deferred Tax Liabilities For Each Temporary Difference During the Year is as follows:
Depreciation and Other:
Opening Balance
Charge/(Credit) To Income Statement
Charge/(Credit) To Equity
Closing Balance
4,326
(4,326)
-
-
(c) 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
\
4,671
1,054
5,725
8,293
(5,560)
2,733
549
14,552
-
15,101
8,305
882
-
9,187
2,959
1,367
-
4,326
3,980
691
4,671
6,585
1,708
8,293
700
(151)
-
549
71
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SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.7 PROFIT / (LOSS) FROM DISCONTINUED OPERATIONS
Accounting Policies
A discontinued operation is a component of the entity
that either has been disposed of, ceased operation or is
classified as held for sale, and
- represents a separate major line of business or
geographical area of operations;
- is part of a single coordinated plan to dispose of a
separate major line of business or geographical area of
operations; or
- is a subsidiary acquired exclusively with a view to resale.
post-tax profit or loss of discontinued operations and the
post-tax gain or loss resulting from the measurement and
disposal of assets classified as held for sale (if any).
Discontinued Operations
On 21 January 2020, the Group announced the cessation of
the operations in Brazil. This followed the termination of the
contract at Antas for AVB Mineracao Ltda, a subsidiary of Oz
Minerals Ltd. The Group is in the progress of relocating the
plant and equipment back to Australia for deployment to
existing and new projects.
Profit or loss from discontinued operations, including prior
year components of profit or loss, is presented in a single
amount in the Consolidated Statement of Profit or Loss and
Other Comprehensive Income. This amount comprises the
The financial performance of the discontinued operations,
included in profit/(loss) from discontinued operations on the
face of Consolidated Statement of Profit or Loss and Other
Comprehensive Income, is as follows:
Revenue
Other Income
Direct Costs
Impairment
Finance Costs
Foreign Exchange Gains / (Losses)
Profit / (Loss) Before Income Tax
Income Tax Expense
Profit / (Loss) After Tax from Discontinued Operations
30 June
2020
$’000
30 June
2019
$’000
12,186
211
25,772
(401)
(21,426)
(24,717)
(1,952)
(365)
(2,358)
(13,704)
3,232
(10,472)
-
(718)
54
(10)
3
(7)
The net cash flows of the discontinued operations, which have been incorporated into the Consolidated Statement of Cash
Flows, are as follows:
Net Cash Provided By / (Used In) Operating Activities
Net Cash Provided By / (Used In) Investing Activities
Net Cash Provided By / (Used In) Financing Activities*
Net Cash Increase / (Decrease) in Cash Held
27,240
1,603
(38,778)
(9,935)
17,170
(3,308)
(6,612)
7,250
*Included in the net cash used in financing activities for the year ended 30 June 2020, is an amount of $29.3m loan
repayment made to the parent entity.
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
3.8 EARNINGS PER SHARE
Accounting Policies
Basic EPS
Basic EPS is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number of ordinary shares during the financial year.
Diluted EPS
Diluted EPS is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares and performance rights for
the effects of all dilutive potential ordinary shares.
Reconciliation Of Earnings To Profi t and Loss
Profit After Tax from Continuing Operations
(Profit) / Loss Attributable To Non-Controlling Interest
Profit Attributable to Members of Parent Entity from Continuing Operations
Profit / (Loss) Attributable to Members of Parent Entity from Discontinued Operations
Profit / (Loss) Attributable to Members of Parent Entity from Continuing and Discontinued
Operations
From Continuing and Discontinued Operations
Earnings Used To Calculate Basic EPS
Earnings Used in the Calculation of Dilutive EPS
From Continuing Operations
Earnings Used To Calculate Basic EPS
Earnings Used in the Calculation of Dilutive EPS
From Discontinued Operations
Earnings Used To Calculate Basic EPS
Earnings Used in the Calculation of Dilutive EPS
Weighted Avg. No. of Ord. Shares Outstanding During the Year (Basic EPS) (’000)
Weighted Average Number of Dilutive Options Outstanding (’000)
Weighted Avg. No. of Ord. Shares Outstanding During the Year (Diluted EPS) (’000)
30 June
2020
$’000
30 June
2019
$’000
3,583
(418)
3,165
(21,039)
22,422
(1,841)
20,581
(7)
(17,874)
20,574
(17,874)
(17,874)
20,574
20,574
3,165
3,165
20,581
20,581
(21,039)
(21,039)
268,008
3,879
271,887
(7)
(7)
268,008
2,592
270,600
73
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
SECTION 4 ASSETS AND LIABILITIES
This Section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result.
Liabilities relating to the Group’s financing activities are addressed in Section 5.
4.1 TRADE AND OTHER RECEIVABLES, LOANS TO OTHER COMPANIES AND OTHER FINANCIAL ASSETS
Accounting Policies
Trade and other receivables represent the asset outstanding at the end of the reporting period for goods and services
provided by the Group during the reporting period which remain unpaid. The balance is recognised as a current asset with
the amount normally being received within 30 to 60 days of recognition of the receivable. The Group’s impairment loss
allowance accounting policy for receivables is outlined in note 5.3.
Trade and Other Receivables
Trade and Other Debtors - Current
Less: Provision for Impairment
Debtors Subject to Payment Arrangements - Current
Total Current
Debtors Subject to Payment Arrangements - Non-Current
Total Trade and Other Receivables
Loans to Other Companies
Loans to Other Companies - Current
Loans to Other Companies - Non-Current
Total Loans to Other Companies
Other Financial Assets
Shares in Listed Corporations at Fair Value - Current
Shares in Listed Corporations at Fair Value - Non-Current
Total Other Financial Assets
30 June
30 June
2020
$’000
2019
$’000
191,554
(48,415)
143,139
11,190
154,329
155,405
-
155,405
20,244
175,649
-
154,329
15,139
190,788
-
26,841
26,841
69
-
69
22,300
25,655
47,955
7,076
6,514
13,590
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.1 TRADE AND OTHER RECEIVABLES, LOANS TO OTHER COMPANIES AND OTHER FINANCIAL ASSETS (CONTINUED)
Credit Risk
The Group has approximately 22% (2019: 23.4%) of post-impairment credit risk with a single counterparty or group of
counterparties. Failure or default of a major counterparty would have a material impact on earnings. Management of credit
risk is discussed in Section 5.3 Financial Risk Management. The class of assets described as “trade and other receivables”
and “loans to other companies” are 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 June 2020
Trade and Term Receivables
Other Receivables
Total Trade and Other Receivables
30 June 2019
Trade and Term Receivables
Other Receivables
Total Trade and Other Receivables
Receivables and Loans as Financial Assets measured
at Amortised Cost
Trade and Other Receivables
- Total Current (net of impairment)
- Total Non-Current
Loans to Other Companies
- Total Current
- Total Non-Current (Secured)*
Gross
amount
$’000
Past due
and impaired
Past due but
not impaired
Within initial
trade terms
$’000
$’000
$’000
198,049
4,695
202,744
175,649
15,139
190,788
48,415
-
48,415
-
-
-
18,806
-
18,806
30,686
15,139
45,825
130,828
4,695
135,523
144,963
-
144,963
30 June
2020
$’000
30 June
2019
$’000
154,329
-
154,329
175,649
15,139
190,788
-
26,841
26,841
22,300
25,655
47,955
* Loan to Carabella Resources Pty Ltd has first ranking securities over the company assets, being mining and exploration
tenements.
75
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.2 INVENTORY AND WORK IN PROGRESS (WIP)
Accounting Policies
Inventory 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.
Inventory and Work In Progress (WIP)
Inventory
WIP
Total Inventory and Work in Progress (WIP)
4.3 OTHER CURRENT ASSETS
Other Current Assets
Prepayments
Deposit*
Total Other Current Assets
30 June
2020
$’000
30 June
2019
$’000
12,438
1,201
13,639
14,306
1,717
16,023
30 June
2020
$’000
30 June
2019
$’000
777
4,773
5,550
894
921
1,815
*Included in the balance as at 30 June 2020, amount of $4.6m is cash deposit-backed security bonds.
4.4 PROPERTY, PLANT AND EQUIPMENT
Accounting Policies
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.
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.
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
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
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed within the Group
includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable
overheads.
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.
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 profit and loss statement
during the financial period in which they are incurred.
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.
Depreciation
Leases
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 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% – 40.0%
18.75% – 37.5%
18.75% – 50%
As permitted by AASB 16, the carrying amount of $163.76m
as at 1 July 2019 for the plant and equipment and motor
vehicles that were under finance lease arrangement have
been reclassified as Right-Of-Use Assets (“ROUA”). No
restatement of comparative figures has been made.
Right-of-use assets are depreciated over the lease term or
useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset
or the cost of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset
is depreciated over the useful life of the underlying asset.
Movements in Carrying Amounts
Movements in carrying amounts for each class of property,
plant and equipment between the beginning and the end of
the current financial period are as follows:
77
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Plant and Equipment – at Cost
- Owned
- Right-Of-Use Assets
Total Cost
Accumulated Depreciation
- Owned
- Right-Of-Use Assets
Total Accumulated Depreciation
30 June
2020
$’000
30 June
2019
$’000
405,691
276,951
682,642
(325,162)
(82,003)
(407,165)
634,613
-
634,613
(403,198)
-
(403,198)
Carrying Amount - Plant and Equipment
275,477
231,415
Motor Vehicles – at Cost
- Owned
- Right-Of-Use Assets
Total Cost
Accumulated Depreciation
- Owned
- Right-Of-Use Assets
Total Accumulated Depreciation
Carrying Amount - Motor Vehicles
Land and Building
- Owned at Fair Value
- Right-Of-Use Assets
Total
Accumulated Depreciation
- Owned at Fair Value
- Right-Of-Use Assets
Total Accumulated Depreciation
Carrying Amount - Land and Building
Low Value Pool – at Cost
Accumulated Depreciation
Carrying Amount - Low Value Pool
Leasehold Improvements – at Cost
Accumulated Depreciation
Carrying Amount - Leasehold Improvements
Total Carrying Amounts - Owned
Total Carrying Amounts - Right-Of-Use Assets
Total Carrying Amounts - Property, Plant and Equipment
The Group’s lease portfolio includes buildings, plant and equipment and motor vehicles.
4,370
3,752
8,122
(3,807)
(2,126)
(5,933)
2,189
3,272
16,458
19,730
(487)
(5,018)
(5,505)
14,225
481
(416)
65
2,980
(1,618)
1,362
85,304
208,014
293,318
10,005
-
10,005
(7,311)
-
(7,311)
2,694
3,272
-
3,272
(464)
-
(464)
2,808
466
(372)
94
2,591
(1,322)
1,269
238,280
-
238,280
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Options to Extend or Terminate
The options to extend or terminate are contained in several
of the property leases of the Group. There were no extension
options for equipment leases. These clauses provide the
Group opportunities to manage leases in order to align with
its strategies. All of the extension or termination options
are only exercisable by the Group. The extension options or
termination options which management were reasonably
certain to be exercised have been included in the calculation
of the lease liability.
Impairment of Property, Plant and Equipment
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. The following
trigger events have occurred at 30 June 2020:
- The carrying amount of the Group’s net assets exceed the
Company’s market capitalisation as at 30 June 2020.
As a result, an assessment has been made of the
recoverable amounts of each of the Operating Segments.
The Groups Mining Services segment is split into Mining
and Crushing CGU’s for evaluation of impairment. Similarly,
Civil and Infrastructures are also assessed as independent
CGU’s. Cash flows have been projected for 5 years from the
continuing use of assets within each CGU as well as the
disposal of any assets, and have been discounted using a
Weighted Average Cost of Capital (WACC) rate. Projected
future cash flows from the continuing use of assets for FY21
have been based on current contracted work in hand plus
an allowance for estimated new work, thereafter growth has
been allowed at 2.3% with a terminal growth rate of 2.0%
has been applied. The FY20 WACC rate has been applied to
discount the projected cash flows of each of these CGU’s to
measure any impairment.
The assessment has resulted in no impairment to the plant
and equipment employed in all the CGUs.
Key Assumptions used for value in use calculations
- EBITDA Margin
- Discount Rates
- Growth rates used to extrapolate cash flows beyond the
forecast period
- Capital expenditure
The EBITDA Margin is based on management’s best estimate
taking into account past performance and expected market
conditions. Working Capital has been adjusted to reflect the
required working capital for the forecast future cashflows.
Capital expenditure has considered both required
replacement capital and idle equipment which could be
utilised to sustain the current Work in Hand schedule.
Capital expenditure has been matched to depreciation levels
in the terminal year.
Growth rates and discount rates applied are shown below.
Growth Rate
CGU
Crushing
Mining
Civil
Infrastructure
Interquip
FY21
5.00%
12.00%
10.00%
10.00%
10.00%
FY22
2.30%
2.30%
2.30%
2.30%
2.30%
FY23
2.30%
2.30%
2.30%
2.30%
2.30%
FY24
2.30%
2.30%
2.30%
2.30%
2.30%
FY25q
2.30%
2.30%
2.30%
2.30%
2.30%
Terminal Year
2.00%
2.00%
2.00%
2.00%
2.00%
Discount Rate used in all CGU analysis
10.10%
11.10%
Post-Tax Discount Rate
Pre-Tax Discount rate
79
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
As disclosed above management have made judgements and estimates in respect of impairment testing of plant and
equipment. Any adverse changes to key assumptions may result in an impairment in the future. The sensitivities are as
follows:
Sensitivity Analysis
CGU
Crushing
Mining
Civil
Infrastructure *
Interquip
Decrease in Revenue
required to incur an
impairment
Increase in Discount
Rate to incur an
impairment
60.1%
19.9%
42.8%
51.4%
13.5%
27.0%
see note 4.5 Impairment of Goodwill
33.6%
44.5%
* Infrastructure separated from Civil CGU to address the impact of COVID 19 on the State of Victoria.
Plant and
Equipment
Motor
Vehicles
Land and
Buildings
Right-Of-
Use Assets
Low Value
Pool
Leasehold
Improvement
Total
Consolidated:
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 01 July 18
Additions
Disposals
Forex movements
Depreciation expense
Balance at 30 June 19
107,268
165,431
(769)
1,238
(41,753)
231,415
3,153
427
(225)
-
(661)
2,694
2,832
-
-
-
(24)
2,808
Balance at 01 July 19
231,415
2,694
2,808
-
-
-
-
-
-
-
Adoption of AASB 16
- Reallocation from PPE
(161,888)
(1,867)
- Recognition of ROUA
Restated Bal. at 01 July 19
Additions
Disposals
Reallocation from ROUA
Forex movements
Depreciation expense
Balance at 30 June 20
-
69,527
38,231
(5,238)
7,703
(5,100)
(24,594)
80,529
-
827
12
(79)
-
-
(197)
563
-
-
163,755
13,138
2,808
176,893
-
-
-
-
85,842
-
(7,703)
-
(23)
2,785
(47,018)
208,014
128
-
(6)
-
(28)
94
94
-
-
94
17
-
-
-
(46)
65
1,404
114,785
62
165,920
-
-
(197)
1,269
(1,000)
1,238
(42,663)
238,280
1,269
238,280
-
-
1,269
423
(10)
-
-
(320)
1,362
-
13,138
251,418
124,525
(5,327)
-
(5,100)
(72,198)
293,318
AASB 16 related amounts recognised in the income statement for the year ended 30 June 2020
$’000
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance cost)
Short-term leases expense
47,018
6,834
338
Depreciation and interest charged for the year ended 30 June 2020, in respect to the operating leases that were previously
accounted for under AASB117, amounted to $2.46m.
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.5 INTANGIBLE ASSETS
Accounting Policies
Goodwill
Goodwill is carried at cost less any accumulated impairment
losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred;
(ii) any non-controlling interest (determined under either
the full goodwill or proportionate interest method); and
(iii) 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.
81
MACA LIMITED ANNUAL REPORT 2020
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.
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.
Goodwill
Section
30 June
2020
$’000
30 June
2019
$’000
Carrying Value of Goodwill
-
3,187
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.5 INTANGIBLE ASSETS (CONTINUED)
Allocation of Goodwill to Cash Generating Unit
Impairment Test for Goodwill
Goodwill is allocated to the Group’s cash generating units
identified according to operating segment. Goodwill is not
amortised but is subject to impairment testing on an annual
basis or whenever there is an indication of impairment.
The carrying amount of goodwill was allocated to cash
generating units as follows:
Goodwill
Section
MACA Infrastructure
Less: Impairment
Goodwill Carrying Amount
30 June
2020
$’000
30 June
2019
$’000
3,187
3,187
(3,187)
-
-
3,187
The recoverable amount of the goodwill in each cash
generating unit is based on value in use calculations. These
calculations use cash flow projections based on the FY21
current work in hand, thereafter the average growth rate
of 2.3% for the forecast period. Project closures resulting
from COVID19 is expected to have an impact on the first half
of FY21 and has resulted in an impairment of goodwill of
$3.2million.
The key assumptions used in the value in use calculations as
at 30 June 2020 and 30 June 2019 were as follows:
- growth rate used to extrapolate cash flows beyond the
terminal period: 2.0% (2019: 2.5%);
- discount rate: 10.4% (2019: 14.0%); and
- Revenue, EBIT, working capital adjustments and
maintenance capital expenditure, based on established
norms.
4.6 TRADE AND OTHER PAYABLES
Accounting Policies
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 45 days of recognition of the liability.
Payables
Current
Unsecured Liabilities:
Trade Creditors
Sundry Creditors and Accruals
Total Trade and Other Payables
Creditors are non-interest bearing and settled at various terms up to 45 days.
Trade and Other Payables as Financial Liabilities measured at Amortised Cost
Trade and Other Payables
- Total Current
- Total Non-Current
Total Trade and Other Payables
30 June
2020
$’000
30 June
2019
$’000
Section
80,388
35,690
116,078
69,263
18,679
87,942
116,078
87,942
-
-
116,078
87,942
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
4.7 PROVISIONS
Accounting Policies
Employee Benefi ts
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.
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.
Employee Entitlements
Movement in Provisions
Opening Balance
Additional Provisions
Amounts Used
Closing balance
30 June
2020
$’000
30 June
2019
$’000
15,976
13,657
13,657
11,838
11,714
8,598
(9,395)
(6,779)
15,976
13,657
83
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
SECTION 5 CAPITAL STRUCTURE AND FINANCING COSTS
This Section outlines how the Group manages its capital structure, including its balance sheet liquidity and access to capital
markets.
The Directors determine the appropriate capital structure of MLD, specifically, how much is raised from shareholders (equity)
and how much is borrowed from financial institutions (debt) in order to finance the Group’s activities both now and in the
future. The Directors consider the Group’s capital structure and dividend policy at least annually and do so in the context of
its ability to continue as a going concern, to execute the strategy and to deliver its business plan.
During FY20, the group complied with all the financial covenants of its borrowing facilities.
5.1 CASH AND CASH EQUIVALENTS
Accounting Policies
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. The Group does not have any bank overdraft facilities.
30 June
2020
$’000
30 June
2019
$’000
Section
5.1.1 CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents as Financial Assets measured at Amortised Cost
5.1.2 CASH FLOW INFORMATION
Reconciliation of Cash Flow from Operations with Profi t / (Loss) for the Year
Profit / (Loss) for the Year
Non-Cash Flows in Profi t
Depreciation and Amortisation
Impairment
Net (Gains) / Losses on Disposal of Plant and Equipment
Net (Gains) / Losses on Disposal of Investments
Foreign Exchange (Gains) / Losses
Total Non-Cash Flows in Profit
Movements in Working Capital
(Increase) / Decrease in Trade and Other Receivables
(Increase) / Decrease in Other Assets
(Increase) / Decrease in Inventories and Work-In-Progress
Increase / (Decrease) in Trade and Other Payables
Increase / (Decrease) in Income Tax Payable
Increase / (Decrease) in Deferred Tax
Increase / (Decrease) in Provisions
Total Working Capital Movements
Net Cash Increase / (Decrease) from Operating Activities
4.4
3.1(c) , 3.7
114,650
59,292
(17,456)
22,415
72,198
53,554
(2,165)
(846)
13,560
136,301
42,663
-
(630)
216
(1,721)
40,528
(13,143)
(27,372)
(4,026)
(420)
432
(4,397)
28,136
(1,562)
(14,371)
2,319
(2,215)
116,630
23,323
2,506
(880)
1,818
(5,422)
57,521
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.1 CASH AND CASH EQUIVALENTS (CONTINUED)
5.1.3 NON-CASH FINANCING AND INVESTING ACTIVITIES
During the year the Group acquired $61.1 million in plant
and equipment (2019: $76.6m) by means of finance leases
(included in right-of-use assets), directly from original
equipment manufacturers. These acquisitions are not
reflected in the statement of cash flows.
There were no business combinations for the year ended 30
June 2020 and 30 June 2019.
Shares Issued
During 2020 no shares were issued as a result of performance
rights vesting to KMPs and other Executives (2019: nil).
Insurance Bonding and Bank Guarantee Facilities
The Group has insurance bonding and bank guarantee
facilities totalling $43.8 million. At 30 June 2020 the amount
drawn on the facilities was $23.6 million (2019: $15.4 million).
5.2 INTEREST BEARING LIABILITIES
Accounting Policies
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 the statement of
profit and loss in the period in which they are incurred.
5.2.1 FINANCIAL LIABILITIES MEASURED AT AMORTISED COST
Current
Secured Lease Liability
Unsecured Lease Liability
Finance Lease Liability
Total Current Interest Bearing Liabilities
Non-Current
Secured Lease Liability
Unsecured Lease Liability
Finance Lease liability
Total Non-Current Interest Bearing Liabilities
Total Current and Non-Current Interest Bearing Liabilities
Carrying Amounts of Non-Current Assets Pledged as Security
30 June
2020
$’000
30 June
2019
$’000
Section
52,941
2,186
-
55,127
-
-
42,272
42,272
122,772
10,173
-
132,945
-
-
40,528
99,848
188,072
142,120
197,940
161,695
Unsecured lease liabilities (in respect to operating lease under AASB 117) recognised in the statement of financial position at
the date of initial application of AASB 16 are reconciled as follows:
Operating lease commitments disclosed as at 30 June 2019
Changes to extension options assumptions and discounting using the lessee’s incremental
borrowing rate at the date of initial application
Lease liability recognised as at 1 July 2019
$’000
16,064
(2,281)
13,783
The associated right-of-use assets were measured on a retrospective basis as if the new rules had always been applied, using
the lessee’s incremental borrowing rate on the date of initial application.
85
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.3 FINANCIAL RISK MANAGEMENT
Specifi c Financial Risk Exposures and Management
The Group’s financial instruments consist mainly of deposits
with banks, local money market instruments, short-term
investments, accounts receivable and payable, loans to and
from subsidiaries, loans to other companies and leases.
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
equity price risk.
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:
Accounting Policies
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, liquidity risk, currency risk, financing risk and interest
rate risk.
The Board’s overall risk management strategy seeks
to assist the 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 (if any), credit risk policies
and future cash flow requirements.
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
30 to 60 days from the invoice date. The Group considers
various debt recovery methodologies and has entered
into repayment arrangements with Beadell Resources Ltd
(Great Panther Mining Ltd). Since the commencement of
the arrangement in June 2018, Beadell Resources Ltd has
reduced debt in excess of $50 million as at the date of this
report.
Financial Assets
Financial Assets at Amortised Cost:
— Cash and Cash Equivalents
— Trade and Other Receivables
— Loans to Other Companies
Financial Assets at Fair Value Through Profit or Loss:
— Listed Investments
Total Financial Assets
Financial Liabilities
Financial Liabilities at Amortised Cost:
— Trade and Other Payables
— Interest Bearing Liabilities
Total Financial Liabilities
30 June
2020
$’000
30 June
2019
$’000
Section
5.1.1
4.1
4.1
4.1
4.6
5.2.1
114,650
154,329
26,841
59,292
190,788
47,955
69
295,889
13,590
311,625
116,078
188,072
304,150
87,942
142,120
230,062
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.3 FINANCIAL RISK MANAGEMENT (CONTINUED)
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 title retention clauses
over goods or obtaining security by way of personal or
commercial guarantees over assets which may be claimed
against in the event of any default. 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.
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
Section 6.6 Parent Entity Disclosures for details).
Trade Receivables and Contract Assets
The Group applies the simplified approach to provide for
the Expect Credit Loss (“ECL”) for all trade receivables.
The simplified approach required the loss allowance to be
measured at an amount equal to the lifetime ECL.
The Group uses a provision matrix to measure the lifetime
ECL allowance for trade receivables. In measuring the ECL,
trade receivables are grouped based on shared credit risk
characteristics and days past due.
Internal
Rating
Grades
Performing
Under-
Performing
Non-
Performing
Basis for
Recognition and
Measurement
of ECL
12-mth ECL
Lifetime ECL
(not credit-
impaired)
Lifetime
ECL (credit-
impaired)
Defi nition
The counterparty has
a low risk of default
and does not have
any past due amounts
There has been a
significant increase in
credit risk since initial
recognition
There is evidence
indicating that the
asset is credit-
impaired
87
MACA LIMITED ANNUAL REPORT 2020
In calculating the ECL rates, the Group considers historical
loss rates for each category of customers and adjust for
forward looking macroeconomic data.
The Group considers the trade receivables as in default
when the counterparty fail to make contractual payments
for a prolonged period of time when they fall due, and the
Group may also consider financial or economic conditions
that are expected to cause a significant change to the
debtors’ ability to meet their obligations. Trade receivables
are written off when there is no reasonable expectation of
recovering the contractual cash flow. When trade receivables
have been written off, the Group continues to engage in
enforcement activity to attempt to recover the debts. Where
recoveries are made, these are recognised in profit or loss.
Receivables for which an impairment/expected credit
loss provision was recognised are written off against
the provision when there is no expectation of recovering
additional cash.
The creation and release of the provision for impaired and
expected credit loss receivables has been shown separately
in the consolidated statement of profit or loss.
The Group’s credit risk exposure in relation to Trade
Receivables and Contract Assets at 30 June 2020 is set out in
Section 4.1.
Carabella Resources Pty Ltd was identified individually as a
credit risk, their payments have fallen outside credit terms
and the PCI coal price has decreased significantly over the
period. MACA currently holds first ranking security over
the assets of Carabella Resources Pty Ltd and first ranking
security over Grosvenor West Coast Project owned by
Wealth Resources Pty Ltd, immediate parent of Carabella
Resources Pty Ltd. Accordingly management has obtained
an independent valuation on secured assets, and performed
a discounted cash flow to determine recoverable value
resulting in a provision for doubtful debts of $48.4 million
against the debtor amounts owed by Carabella Resources
Pty Ltd. Further, the Group has assessed and concluded that
all other trade receivables are not subject to material credit
loss. There has been no change in the estimation techniques
or significant assumptions made during the financial period.
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 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.
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.3 FINANCIAL RISK MANAGEMENT (CONTINUED)
Provision for
Impairment and
Expected Credit Losses
of Trade Receivables
At 1 July
Provision (reversed) /
recognised during
the year
Receivables written off
during the year
as uncollectable
At 30 June
Other Receivables
30 June
2020
$’000
30 June
2019
$’000
Section
-
4.1
48,415
-
48,415
-
-
-
-
The Group applies the general approach to provide for the
ECL for other receivables. Under the general approach,
the loss allowance is measured at an amount equal to the
12-month ECL at initial recognition.
At each reporting date, the Group assesses whether
the credit risk of a financial instrument has increased
significantly since initial recognition. When credit risk
has increased significantly since initial recognition, loss
allowance is measured at an amount equal to lifetime ECL.
The Group has approximately 22% (2019: 23.4%) of post-
impairment credit risk with a single counterparty or group
of counterparties. Failure or default of a major counterparty
would have a material impact on earnings. The classes of
assets described as Trade and Other Receivables and Loans
to Other Companies are considered to be main source of
credit risk related to the Group.
The loan to Carabella Resources Pty Ltd (“Carabella”) under
the working capital facility of $26.84m remains outstanding,
it is repayable from free cashflows from the project. Both
loan and receivables are secured over the project assets and
subject to its parent company guarantee, which is expected
to be sufficient to cover the exposure of the outstanding
balance after impairment.
Trade and other receivables that remain within initial trade
terms are considered to be of acceptable quality and fully
recoverable.
Credit risk related to balances held with banks and other
financial institutions are only invested with counterparties
with a Standard & Poor’s rating of at least AA-.
MACA LIMITED ANNUAL REPORT 2020
88
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.3 FINANCIAL RISK MANAGEMENT (CONTINUED)
Liquidity Risk (Continued)
Financial Liability and
Financial Asset Maturity Analysis
Financial Liabilities Due for Payment
Trade and Other Payables
Interest Bearing Liabilities
Total Contractual Outflows
Total Expected Outflows
Within 1 Year
2019
2020
1 to 5 Years
2020
2019
Over 5 Years
2019
2020
Section
‘000
‘000
‘000
‘000
‘000
‘000
4.6
5.2.1
116,078
55,127
171,205
-
87,942
42,272 132,945
132,945
130,214
-
99,848
99,848
171,205
130,214
132,945
99,848
Financial Assets - Cash Flows Realisable
Cash and Cash Equivalents
5.1.1
114,650
59,292
Trade and Other Receivables
Investments and Loan Receivables
4.1
4.1
Total Anticipated Inflows
Net (Outflow)/Inflow on Financial
Instruments
-
-
-
15,139
154,329
175,649
69
29,376
26,841
32,169
269,048
264,317
26,841
47,308
97,843
134,103 (106,104) (52,540)
Total
2020
‘000
2019
‘000
116,078
87,942
188,072
142,120
304,150
230,062
304,150
230,062
114,650
59,292
154,329
190,788
26,910
61,545
295,889
311,625
(8,261)
81,563
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No financial assets have been pledged as security for debt.
Market Risk
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on those financial assets and financial
liabilities, is as follows:
Floating
Interest Rate
Fixed Interest Rate
Within 1 Year
1 to 5 Years
Non-interest
Bearing
Total
2020
‘000
2019
‘000
2020
‘000
2019
‘000
2020
‘000
2019
‘000
2020
‘000
2019
‘000
2020
‘000
2019
‘000
Financial Assets
Cash
114,650
59,292
-
-
Trade and Other Receivables
Loans to Other Companies
-
-
-
-
11,190
20,244
-
22,300
26,841
Total Financial Assets
114,650
59,292
11,190
42,544
26,841
-
-
-
59,292
15,139 143,139 155,405 154,329 190,788
- 114,650
-
25,655
47,955
40,794 143,139 155,405 295,820 298,035
26,841
-
-
Weighted
Average
Effective
Interest Rate
2020
2019
%
%
-
0.80
0.50
9.00
6.40
9.50
Financial Liabilities
Interest Bearing Liabilities
Trade and Other Payables
Total Financial Liabilities
-
-
-
-
-
-
55,127
-
42,272 132,945
-
-
55,127
42,272 132,945
99,848
-
- 188,072 142,120
3.80
4.00
- 116,078
99,848 116,078
87,942 116,078
87,942
87,942 304,150 230,062
N/A
N/A
89
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.3 FINANCIAL RISK MANAGEMENT (CONTINUED)
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.
Foreign Exchange Risk
The Group is exposed to fluctuations in foreign currencies.
The currency exposure relates to Brazilian Real and US
Dollar being cash in bank, trade receivables subject to
repayment and intercompany loan. Both Brazilian Real
and US Dollar are unhedged. The original investment into
the Brazilian subsidiary is exposed to fluctuations in the
Brazilian Real. On 21 January 2020, the Group announced
its decision to cease the operations in Brazil, which resulted
Year ended 30 Jun 2020
+/- 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 Jun 2019
+/- 2% in Interest Rates
+/- 10% in the Value of Listed Investments
+/- 10% in AUD/BRL Exchange Rate
+/- 10% in AUD/USD Exchange Rate
in the realisation of the foreign currency translation reserve
to income statement (see Note 5.6(b)). The BRL has been
devalued by 31.5% against the AUD during the financial year
ended 30 June 2020.
Summarised Sensitivity Analysis
The following illustrates sensitivities to the Group’s
exposures to changes in interest rates, foreign exchange
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.
Profi t
$’000
Equity
$’000
+/- 708
+/- 708
+/- 7
+/- 7
+/- 300 +/- 1,140
+/- 2,159 +/- 2,159
+/- 10
+/- 10
+/- 1,359 +/- 1,359
+/- 1
+/- 451
+/- 1,042 +/- 1,042
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.4 FINANCIAL INSTRUMENTS
Initial recognition and measurement
that is in a effective hedging relationships).
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions to
the instrument. For financial assets, this is equivalent to the
date that the Group commits itself to either the purchase or
sale of the asset (i.e. trade date accounting is adopted).
Financial instruments (except for trade receivables) 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. Where available, quoted prices
in an active market are used to determine fair value.
Trade receivables are initially measured at the transaction
price if the trade receivables do not contain a significant
financing component or if the practical expedient was
applied as specified in AASB 15.63.
Classifi cation and subsequent measurement
Financial Liabilities
Financial instruments are subsequently measured at:
- amortised cost; or
- fair value through profit or loss.
A financial liability is measured at fair value through profit
and loss if the financial liability is:
- a contingent consideration of an acquirer in a business
combination to which AASB 3: Business Combinations
applies;
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating
the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period.
The effective interest rate is the internal rate of return of the
financial asset or liability. That is, it is the rate that exactly
discounts the estimated future cash flows through the
expected life of the instrument to the net carrying amount at
initial recognition.
A financial liability is held for trading if:
- it is incurred for the purpose of repurchasing or repaying
in the near term;
- part of a portfolio where there is an actual pattern of
short-term profit taking; or
- a derivative financial instrument (except for a derivative
that is in a financial guarantee contract or a derivative
Any gains or losses arising on changes in fair value are
recognised in profit or loss to the extent that they are not
part of a designated hedging relationship are recognised in
profit or loss.
The change in fair value of the financial liability attributable
to changes in the issuer’s credit risk is taken to other
comprehensive income and are not subsequently
reclassified to profit or loss. Instead, they are transferred
to retained earnings upon derecognition of the financial
liability. If taking the change in credit risk in other
comprehensive income enlarges or creates an accounting
mismatch, then these gains or losses should be taken to
profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial Assets
Financial Assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income,: or
- fair value through profit or loss.
Measurement is on the basis of two primary criteria:
- the contractual cash flow characteristics of the financial
assets; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is
subsequently measured at amortised cost:
- the financial asset is managed solely to collect
contractual cash flows; and
- the contractual terms within the financial asset give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified
dates.
A financial asset that meets the following conditions
is subsequently measured at fair value through other
comprehensive income:
- the contractual terms within the financial asset give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified
dates;
- the business model for managing the financial assets
comprises both contractual cash flows collection and the
selling of the financial asset.
By default, all other financial assets that do not meet the
measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently
measured at fair value through profit or loss.
91
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.4 FINANCIAL INSTRUMENTS (CONTINUED)
Financial Assets (Continued)
De-recognition
The Group initially designates a financial instrument as
measured at fair value through profit or loss if:
- it eliminates or significantly reduces a measurement
or recognition inconsistency (often referred to as
“accounting mismatch”) that would otherwise arise from
measuring assets or liabilities or recognising the gains
and losses on them on different bases;
- it is in accordance with the documented risk management
or investment strategy, and information about the
groupings was documented appropriately, so that the
performance of the financial liability that was part of a
group of financial liabilities or financial assets can be
managed and evaluated consistently on a fair value basis;
- it is a hybrid contract that contains an embedded
derivative that significantly modifies the cash flows
otherwise required by the contract.
Derecognition refers to the removal of a previously
recognised financial asset or financial liability from the
statement of financial position.
Derecognition of fi nancial liabilities
A liability is derecognised when it is extinguished (ie when
the obligation in the contract is discharged, cancelled or
expires). An exchange of an existing financial liability for a
new one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as
an extinguishment of the existing liability and recognition of
a new financial liability.
The difference between the carrying amount of the financial
liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
Derecognition of fi nancial assets
The initial designation of the financial instruments to
measure at fair value through profit or loss is a one-time
option on initial classification and is irrevocable until the
financial asset is derecognised.
A financial asset is derecognised when the holder’s
contractual rights to its cash flows expires, or the asset is
transferred in such a way that all the risks and rewards of
ownership are substantially transferred.
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.
Equity instruments
At initial recognition, as long as the equity instrument is
not held for trading and not a contingent consideration
recognised by an acquirer in a business combination to
which AASB 3:Business Combinations applies, the Group
made an irrevocable election to measure any subsequent
changes in fair value of the equity instruments in other
comprehensive income, while the dividend revenue received
on underlying equity instruments investment will still be
recognised in profit or loss.
Regular way purchases and sales of financial assets
are recognised and derecognised at settlement date in
accordance with the Group’s accounting policy.
All of the following criteria need to be satisfied for
derecognition of financial asset:
- the right to receive cash flows from the asset has expired
or been transferred;
- all risk and rewards of ownership of the asset have been
substantially transferred; and
- the Group no longer controls the asset (i.e. the Group has
no practical ability to make a unilateral decision to sell
the asset to a third party).
On derecognition of a financial asset measured at amortised
cost, the difference between the asset’s carrying amount
and the sum of the consideration received and receivable is
recognised in profit or loss.
On derecognition of a debt instrument classified as at fair
value through other comprehensive income, the cumulative
gain or loss previously accumulated in the investment
revaluation reserve is reclassified to profit or loss.
On derecognition of an investment in equity which was
elected to be classified under fair value through other
comprehensive income, the cumulative gain or loss
previously accumulated in the investment revaluation
reserve is not reclassified to profit or loss, but is transferred
to retained earnings.
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.4 FINANCIAL INSTRUMENTS (CONTINUED)
Impairment
Simplifi ed approach
The Group recognises a loss allowance for expected credit
losses on:
- financial assets that are measured at amortised cost or
fair value through other comprehensive income;
The simplified approach does not require tracking of
changes in credit risk at every reporting period, but instead
requires the recognition of lifetime expected credit loss at all
times. This approach is applicable to:
- trade receivables or contract assets that result from
transactions within the scope of AASB 15: Revenue from
Contracts with Customers and which do not contain a
significant financing component; and
- lease receivables.
In measuring the expected credit loss, a provision matrix
for trade receivables was used taking into consideration
various data to get to an expected credit loss (ie diversity
of customer base, appropriate groupings of historical loss
experience, etc).
Recognition of expected credit losses in fi nancial
statements
At each reporting date, the Group recognises the movement
in the loss allowance as an impairment gain or loss in the
statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at
amortised cost includes the loss allowance relating to that
asset.
Assets measured at fair value through other comprehensive
income are recognised at fair value, with changes in fair
value recognised in other comprehensive income. Amounts
in relation to change in credit risk are transferred from other
comprehensive income to profit or loss at every reporting
period.
- lease receivables;
- contract assets (eg amounts due from customers under
construction contracts);
- loan commitments that are not measured at fair value
through profit or loss; and
- financial guarantee contracts that are not measured at
fair value through profit or loss.
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or
loss; or
- equity instruments measured at fair value through other
comprehensive income.
Expected credit losses are the probability-weighted
estimate of credit losses over the expected life of a financial
instrument. A credit loss is the difference between all
contractual cash flows that are due and all cash flows
expected to be received, all discounted at the original
effective interest rate of the financial instrument.
The Group uses the following approaches to impairment, as
applicable under AASB 9: Financial Instruments:
- the general approach; and
- the simplified approach
General approach
Under the general approach, at each reporting period, the
Group assesses whether the financial instruments are credit-
impaired, and if:
- the credit risk of the financial instrument has increased
significantly since initial recognition, the Group measures
the loss allowance of the financial instruments at an amount
equal to the lifetime expected credit losses; or
- there is no significant increase in credit risk since initial
recognition, the Group measures the loss allowance for
that financial instrument at an amount equal to 12-month
expected credit losses.
93
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.5 EQUITY
Issued Capital
268,007,708 (2019: 268,007,708)
Fully Paid Ordinary Shares With No Par Value
Ordinary Shares
At the Beginning of the Reporting Period
Shares Issued During the Year
Shares Issued at Reporting Date
30 June
2020
$’000
30 June
2019
$’000
269,806
269,806
No.
No.
268,007,708
268,007,708
-
-
268,007,708
268,007,708
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.
Performance Rights
For information relating to performance rights, including details of performance rights issued, exercised and lapsed during
the financial year, refer to Section 5.8.
Capital Management
Management controls the capital of the Group in order to maintain a prudent debt to equity ratio, provide the shareholders
with adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements. Management effectively manages the Group’s capital by assessing
the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to shareholders and share issues.
Total Borrowings
Less Cash and Cash Equivalents
Net Debt/(Cash)
Total Equity
Total Capital
Gearing ratio
Section
5.2.1
5.1.1
30 June
2020
$’000
188,072
(114,650)
73,422
309,660
383,082
19%
30 June
2019
$’000
142,120
(59,292)
82,828
332,666
415,494
20%
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.6 RESERVES
Accounting Policies
Equity Settled Employee Benefi ts Reserve
Foreign Currency Translation Reserve
The equity-settled employee benefits reserve relates
to performance rights granted by the Company to its
Executives and employees under its Employee Long-Term
Incentive Plan. Rights granted during the year were made
via an Employee Share Trust and as a result there was no
movement in the Equity Settled Employee Benefits Reserve.
Exchange differences arising on translation of foreign
controlled operations are taken to the exchange fluctuation
reserve. Gains or losses accumulated in equity are
recognised in the income statement when a foreign
operation is disposed or discontinued.
Other Reserves
The other reserves represent the cumulative effective
portion of gains or losses arising on changes in fair value
of forward foreign exchange contracts entered into for cash
flow hedges, and interest rate swaps. The gain or loss that is
recognised in the other reserve will be reclassified to profit
or loss only when the transaction affects the profit or loss.
Foreign Operations
The financial transactions of foreign operations whose
functional currency is different from the presentation
currency are translated at the exchange rates prevailing
at the date of the transaction. At the end of the reporting
period, assets and liabilities are re-translated at the rates
prevailing at that date. Income and expenses are re-
translated at average exchange rates for the period.
Exchange differences arising on translation of foreign
operations are transferred directly to the foreign currency
translation reserve in the Consolidated Statement of
Financial Position. These differences are recognised in profit
and loss in the period in which the operation is disposed or
discontinued.
Reserves
Equity-Settled Employee Benefits Reserve
Foreign Currency Translation Reserve
Other Reserves
Total Reserves
(a) Other Reserves
Balance at the Beginning of the Year
Transactions with Members
Balance at the End of the Year
(b) Foreign Currency Translation Reserve
Balance at the Beginning of the Year
Exchange Differences Arising on Translating the Foreign Operations
Transfer of Forex Reserve on Discontinued Operations
30 June
2020
$’000
30 June
2019
$’000
Section
590
-
(5,888)
(5,298)
(5,888)
-
(5,888)
(8,495)
(2,072)
10,567
590
(8,495)
(5,888)
(13,793)
(5,888)
-
(5,888)
(12,650)
4,155
-
Balance at the End of the Year
-
(8,495)
95
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.7 DIVIDENDS
In respect of FY20, the Directors declared the payment of a Final Dividend of 2.5 cents per share fully franked to the holders
of fully paid ordinary shares on the Company’s register at 4th September 2020 with payment date of 18th September 2020.
The amount of the Final Dividend is $6.7 million. No provision has been made for the Final Dividend in the Financial
Statements as the final dividend was not declared or determined by the Directors on or before the end of the financial year.
30 June 2020
30 June 2019
Cents Per
Share
$’000
Cents Per
Share
$’000
2.5
2.5
6,700
6,700
5.0
13,400
51,991
2.0
5,360
2.5
4.5
6,700
12,060
44,576
Distributions Paid/Payable
Final Dividend in respect of FY20/FY19
Foreign Currency Translation Reserve
Total
Balance of franking account at year end
5.8 SHARE-BASED COMPENSATION
Options
There were no options issued for the year ended 30 June 2020. The weighted average fair value of options granted during the
previous year was Nil.
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 2020 financial year 1,906,909 (2019: 1,473,587) performance rights were granted under the Group’s Performance
Rights Plan and 1,452,208 (2019: 1,252,194) performance rights were forfeited. Subject to the achievement of designated
performance hurdles, these performance rights will vest in June 2022. As at 30 June 2020 there were 2,690,578 (2019:
2,235,877) performance rights outstanding.
The following performance rights arrangement was in existence at 30 June 2020:
Unlisted Performance Rights
Unlisted Performance Rights
Outstanding at the Beginning of the Year
Granted
Vested
Cancelled or Expired
Outstanding at the End of the Year
Number
Expiry Date
1,097,291
1,593,287
30-Jun-21
30-Jun-22
2020
Number
2,235,877
1,906,909
-
2019
Number
2,014,485
1,473,586
-
(1,452,208)
(1,252,194)
2,690,578
2,235,877
MACA LIMITED ANNUAL REPORT 2020
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Inputs used to determine the fair value of performance rights
granted during the year ended 30 June 2020 were:
- Share price $0.956 being the 30 day VWAP of the Company
on the last trading day prior to 30 June 2019
- Exercise price: Nil
- Volatility: 49.80%
- Option life: 3 years
- Dividend yield: 5.1%
- Risk Free Rate 0.955%
Refer 4.5 Intangible Assets for treatment and calculation of
goodwill.
There were no business combinations during the year ended
30 June 2020 and 30 June 2019.
FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
5.8 SHARE-BASED COMPENSATION (CONTINUED)
Performance Rights (Continued)
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 2020 was $0.54
per right. Payments were made to the MACA ERT Trust for
delivery of shares under the Performance Rights Plan.
SECTION 6 OTHER
6.1 BUSINESS COMBINATIONS
Accounting Policies
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.
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.
97
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
6.2 CONTROLLED ENTITIES
Details of the Company’s subsidiaries at the end of the reporting period are as follows:
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
Interquip Construction Pty Ltd*
OPMS Cambodia Co Ltd
Percentage Owned (%)
Country of
Incorporation
30 June
2020
30 June
2019
Australia
100%
100%
Australia
Australia
Australia
Australia
Australia
Brazil
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
50%
60%
60%
100%
100%
100%
100%
100%
100%
100%
100%
50%
60%
60%
Cambodia
100%
100%
*Interquip Construction Pty Ltd wholly owned by Interquip Pty Ltd
6.3 RELATED PARTY TRANSACTIONS
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:
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.
Information regarding individual directors or executives remuneration is provided in the Remuneration Report included in
the Director’s Report.
The total of remuneration paid to KMP’s of the Group during the year was as follows:
Short-Term Employee Benefits
Post-Employment Benefits
Other Long-Term Benefits
Long-Term Incentive Payments
Total Remuneration
30 June
2020
$’000
30 June
2019
$’000
4,192
460
-
687
5,339
4,187
196
-
798
5,181
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
6.3 RELATED PARTY TRANSACTIONS (CONTINUED)
Controlled Entities
Other Related Parties
Interests in controlled entities are set out Section 6.2.
During the year, funds have been advanced between
entities within the Group for the purposes of working
capital requirements.
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.
Key Management Person and/or Related Party
Transaction
Partnership of which current director Mr G Baker is a
25% partner.
Rent on Division St Business
premises.
Kirk Mining Consultants - a company controlled by current
director Mr L.Kirk.
Mining consulting fees
Hensman Properties Pty Ltd - a company controlled by
current director Mr R.Ryan.
Consulting fees
30 June
2020
$’000
30 June
2019
$’000
1,548
1,520
41
19
10
5
Gateway Equipment Parts & Services Pty Ltd – a company
of which current director Mr G Baker is a shareholder.
Hire of equipment and purchase
of equipment, parts and services.
4,974
2,456
Gateway Equipment Parts & Services Pty Ltd – a company
of which current director Mr G Baker is a shareholder.
Sale of equipment (Revenue)
430
-
Amounts payable at year end arising from the above transactions
Gateway Equipment Parts & Services Pty Ltd – a company
of which current director Mr G Baker is a shareholder.
150
177
6.4 CONTINGENT LIABILITIES
Performance Guarantees
MLD has indemnified its bankers and insurance bond providers in respect of bank guarantees, insurance bonds and letters
of credit to various customers and suppliers for satisfactory contract performance and warranty security, in the following
amounts:
30 Jun 2020: $23.6 million 30 Jun 2019: $15.4 million
Claims
Certain claims arising out of engineering and construction contracts have been made by, or against, controlled entities in the
ordinary course of business. The Directors do not consider the outcome of any of these claims will be materially different to
the position taken in the financial accounts of the Group.
99
MACA LIMITED ANNUAL REPORT 2020
SECTIONS TO THE FINANCIAL STATEMENTS
For the Year Ended 30 June 2020
6.5 EVENTS AFTER BALANCE SHEET DATE
The Directors have recommended a final dividend payment of 2.5 cents per share. Refer to Section 5.7 for details.
Subsequent to the year end, the following major contracts have been awarded to the Group:
- Award of Corunna Downs Mining Contract by Atlas Iron which is expected to generate revenue of $230 million over the
62 month term;
- Letter of intent to award the open pit mining services contract by Capricorn Metals Ltd in relation to the Karlawinda Gold
Project, which is expected to generate revenue of $410 million over the five year term;
- Award of Mt Magnet Mining Contract Extension by Ramelius Resources which is expected to generate revenue of
$130 million over the 3 year term; and
- 10% Non-Owner Participant in the Southwest Connex Alliance for Bunbury Outer Ring Road Project which is expected to
generate revenue of $85m over the three and half year term
As announced on 21 August 2020, MACA recognised an impairment of $48m in relation to the carrying amount of the
Carabella Resources receivable, in addition to impairing goodwill by $3m.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the financial year
that has 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.
6.6 PARENT ENTITY DISCLOSURES
The following information has been extracted from the books and records of the Company 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
Guarantees
30 June
2020
$’000
30 June
2019
$’000
38,073
379,041
46,761
380,157
1,718
1,718
4,498
4,498
362,329
362,329
591
14,403
591
12,739
377,323
375,659
15,064
15,064
17,128
17,128
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.
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
INDEPENDENT AUDIT REPORT
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(cid:18)(cid:6)(cid:17)(cid:16)(cid:18)(cid:20)(cid:1)(cid:16)(cid:15)(cid:1)(cid:20)(cid:9)(cid:6)(cid:1)(cid:2)(cid:21)(cid:5)(cid:10)(cid:20)(cid:1)(cid:16)(cid:7)(cid:1)(cid:20)(cid:9)(cid:6)(cid:1)(cid:7)(cid:10)(cid:15)(cid:2)(cid:15)(cid:4)(cid:10)(cid:2)(cid:13)(cid:1)(cid:18)(cid:6)(cid:17)(cid:16)(cid:18)(cid:20)(cid:1)
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Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.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 2020, 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.
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
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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 & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the “Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors
of the 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.
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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.
(cid:6)(cid:48)(cid:31)(cid:40)(cid:41)(cid:27)(cid:35)(cid:25)(cid:27)(cid:1)(cid:23)(cid:35)(cid:26)(cid:1)(cid:16)(cid:47)(cid:35)(cid:27)(cid:39)(cid:40)(cid:30)(cid:31)(cid:37)(cid:1)(cid:36)(cid:28)(cid:1)(cid:2)(cid:40)(cid:40)(cid:27)(cid:41)(cid:40)(cid:1)(cid:56)(cid:1)(cid:17)(cid:33)(cid:23)(cid:35)(cid:41)(cid:1)(cid:23)(cid:35)(cid:26)(cid:1)(cid:6)(cid:38)(cid:45)(cid:31)(cid:37)(cid:34)(cid:27)(cid:35)(cid:41)
(cid:18)(cid:27)(cid:28)(cid:27)(cid:39)(cid:1)(cid:41)(cid:36)(cid:1)(cid:15)(cid:36)(cid:41)(cid:27)(cid:1)(cid:63)(cid:52)(cid:63)(cid:1)(cid:54)(cid:17)(cid:39)(cid:36)(cid:37)(cid:27)(cid:39)(cid:41)(cid:49)(cid:51)(cid:1)(cid:17)(cid:33)(cid:23)(cid:35)(cid:41)(cid:1)(cid:23)(cid:35)(cid:26)(cid:1)(cid:6)(cid:38)(cid:45)(cid:31)(cid:37)(cid:34)(cid:27)(cid:35)(cid:41)(cid:55)
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) 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 hire
purchase financing agreements.
• We agreed a sample of plant and equipment to date
stamped photography and video taken by senior MACA
personnel.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation
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MACA LIMITED ANNUAL REPORT 2020
INDEPENDANT AUDIT REPORT (CONTINUED)
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Property, plant and equipment (“PPE”) represents the
Group’s largest asset with a year-end book value of $293
million. Given the Group reported a net loss for the year
and as its net assets exceed the Company’s market
capitalisation at balance date, an impairment trigger event
has arisen under AASB 136 Impairment.
As a result, an impairment assessment has been made by
management of the recoverable amounts of each of the
Group’s operating segments (or Cash Generating Units or
CGUs). An impairment is recognised if the carrying amount
of the Group’s PPE and intangible assets is less than its
recoverable amounts, being the higher of fair value less
costs of disposal and value-in-use (VIU).
The impairment assessment undertaken has resulted in no
impairment to the PPE employed in all CGUs, but the
carrying value of the Goodwill ($3.187 million) relating to
MACA Infrastructure has been fully impaired.
The recoverable amounts of the Group’s PPE and
Intangibles were key audit matters due to the significant
judgment involved in forecasting future cash flows and the
selection of assumptions.
Our procedures included, amongst others:
• Evaluating the value-in-use (VIU) discounted cash flow
model developed by management to assess the
recoverable amount of the underlying assets including
assessing the following assumptions:
- discount & growth rates
- forecast cash flows and capital expenditure
- terminal growth rate
Where possible, we corroborated assumptions by
reference to external data and new contracts awarded
to / announced by the Group to-date
• Checking the mathematical accuracy of the cash flow
models
• Assessing the historical accuracy of forecasting of the
Group
• Reviewing the sensitivity analysis performed under the
impairment model for reasonableness
• In relation to mining equipment of discontinued
operations (Brazil) which are being repatriated to
Australia, we obtained market appraisals for a number
of high value assets by two independent consultants to
ensure the appraised values were greater than book
values. The appraisers’ underlying assumptions,
objectivity, competency and capabilities were also
evaluated.
• Assessing the appropriateness of the relevant
disclosures in the financial statements
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The Group’s revenue is predominantly derived from the
rendering of mining and other services, all of which are
based on contracts which determine the services, products
and rates to be charged.
The accurate recording of revenue is highly dependent
upon the following key factors:
• Knowledge of the individual characteristics and 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
• Recognition of variations and claims, in accordance
with contractual terms and based on an assessment as
to when the Group believes it is highly probable that a
significant reversal in the amount of revenue recognised
will not occur when the uncertainty associated with the
variable consideration is subsequently removed.
We focused on this matter as a key audit matter due to the
significance of contract-based revenue to the Group
combined with the need to comply with a variety of
contractual conditions, leading to judgemental risk
associated with revenue recognition.
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 relating
to revenue recognition
• We selected a sample of sales invoices raised during
the year (and post year-end) 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
− revenue cut-off testing
• We evaluated contract performance during and
subsequent to year-end up to audit opinion date to
reflect on year end revenue recognition judgements. As
part of this process, we challenged the appropriateness
of variations and claims included in the computation of
contract revenue
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
INDEPENDANT AUDIT REPORT (CONTINUED)
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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 value that
this is a key area of audit focus.
Trade debtors and debtors subject to payment
arrangements amounted to a total of $154.33 million as at
30 June 2020.
The entire amount is expected to be
collected over a period no longer than 12 months.
Loans to Other Companies amounted to $26.84 million as
at 30 June 2020. The entire amount is expected to be
collected over a period of longer than the next 12 months.
Debtors subject to payment arrangements and loans to
other companies are all subject to enforceable agreements
entered into between the group companies and the
debtors.
The Group assesses periodically and at each year end the
expected credit loss associated with its receivables.
As reported in the Statement of Profit or Loss and Other
Comprehensive Income for the year ended 30 June 2020,
the Group recognised an expected credit loss (ECL)
impairment of $48.42 million against trade debtors
following completion of a comprehensive ECL assessment.
• Review of subsequent sales invoices and related claim
documentation in respect of accrued revenue.
• Review of the level of credit insurance coverage for
each debtor, subsequent receipt collections from
debtors and ageing analysis post year end.
• Confirmations with selected trade & other debtors
where considered necessary.
• Review for compliance with relevant agreements in
order to ensure that related receivables are properly
recorded and classified in the accounts at 30 June
2020 in accordance with the terms of this agreement.
• Review of agreements and security arrangements
entered into in respect of loan facilities provided to
borrowers.
• Review of AASB 9 ECL workings and assessments
prepared by management in relation to trade and other
receivables, including the independent valuation report
obtained for secured assets, an analysis of the credit
risk characteristics attributed to a significant trade
debtor and borrower, as part of our assessment of the
adequacy of the impairment provision recognised at
balance date. The independent valuer’s assumptions,
objectivity, competency and capabilities were also
evaluated.
• Discussion with management and the directors as to
the existence of other arrears/disputes with trade
debtors, review of related correspondence and the
impact these factors have had on the assessment and
adequacy of the ECL impairment provision recognised.
• Assessment of the financial viability and future
prospects of debtors, where considered necessary
based on publicly available information and other
information available to the Company.
• Review of the classification of receivables between
current and non-current ensuring that classification
reflects the agreements entered into with customers
and borrowers.
• Review of disclosures made in the notes to the financial
statements
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MACA LIMITED ANNUAL REPORT 2020
INDEPENDANT AUDIT REPORT (CONTINUED)
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The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the
audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
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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.
(cid:2)(cid:31)(cid:17)(cid:21)(cid:28)(cid:24)(cid:26)(cid:33)(cid:27)(cid:1)(cid:11)(cid:18)(cid:27)(cid:25)(cid:24)(cid:23)(cid:27)(cid:21)(cid:15)(cid:21)(cid:22)(cid:21)(cid:29)(cid:18)(cid:27)(cid:1)(cid:19)(cid:24)(cid:26)(cid:1)(cid:28)(cid:20)(cid:18)(cid:1)(cid:2)(cid:31)(cid:17)(cid:21)(cid:28)(cid:1)(cid:24)(cid:19)(cid:1)(cid:28)(cid:20)(cid:18)(cid:1)(cid:4)(cid:21)(cid:23)(cid:14)(cid:23)(cid:16)(cid:21)(cid:14)(cid:22)(cid:1)(cid:11)(cid:18)(cid:25)(cid:24)(cid:26)(cid:28)(cid:1)
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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms
part of our audit report.
(cid:11)(cid:3)(cid:10)(cid:9)(cid:11)(cid:12)(cid:1)(cid:9)(cid:8)(cid:1)(cid:12)(cid:5)(cid:3)(cid:1)(cid:11)(cid:3)(cid:7)(cid:13)(cid:8)(cid:3)(cid:11)(cid:2)(cid:12)(cid:6)(cid:9)(cid:8)(cid:1)(cid:11)(cid:3)(cid:10)(cid:9)(cid:11)(cid:12)(cid:1)
(cid:2)(cid:13)(cid:8)(cid:11)(cid:8)(cid:12)(cid:11)(cid:1)(cid:12)(cid:11)(cid:1)(cid:16)(cid:7)(cid:6)(cid:1)(cid:3)(cid:6)(cid:10)(cid:18)(cid:11)(cid:6)(cid:14)(cid:4)(cid:17)(cid:12)(cid:11)(cid:1)(cid:3)(cid:6)(cid:13)(cid:12)(cid:14)(cid:16)(cid:1)
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of MACA Limited, for the year ended 30 June 2020 complies with section 300A of
the Corporations Act 2001.
(cid:3)(cid:6)(cid:15)(cid:13)(cid:12)(cid:11)(cid:15)(cid:8)(cid:5)(cid:8)(cid:9)(cid:8)(cid:17)(cid:6)(cid:15)(cid:1)
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.
SL TAN
PARTNER
Signed at Perth on the 25th day of September 2020
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
MACA LIMITED ANNUAL REPORT 2020
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FINANCIAL REPORT
SHAREHOLDER INFORMATION
As at 8th September 2020
NUMBERS OF HOLDERS OF EQUITY
SECURITIES ORDINARY SHARECAPITAL
268,007,708 fully paid ordinary shares are held by 8,188 individual shareholders.
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.
LISTED OPTIONS
There are no listed options.
UNLISTED OPTIONS
There are no unlisted options.
DISTRIBUTION OF SHAREHOLDINGS
Fully Paid Ordinary Shares
1 -1,000 shares
1,001 –5,000 shares
5,001 –10,000 shares
10,001 –100,000 shares
100,001 and over shares
Total
Number of
Shareholders
1,383
3,383
1,612
1,735
75
8,188
Number of
Shares
913,746
9,719,489
12,196,607
42,799,031
202,378,835
268,007,708
% of Issued
Capital
0.34%
3.63%
4.55%
15.97%
75.51%
100.00%
SUBSTANTIAL SHARE AND OPTION HOLDERS
An extract of the Company’s register of substantial shareholders (who held a relevant interest in 5% or more of issued
capital) is set outbelow:
Substantial Shareholder
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Kennerth Rudy Kamon
Fully Paid
Ordinary Shares
42,400,021
40,781,744
20,735,359
18,693,141
% of Total
Shares
15.82%
15.22%
7.74%
6.97%
There were no substantial option holders listed in the Company’s register as at 8 September 2020.
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.
UNMARKETABLE PARCELS
As at 8 September 2020, there were 450 holders who held shares that were unmarketable parcels
105
MACA LIMITED ANNUAL REPORT 2020
SHAREHOLDER INFORMATION (CONTINUED)
MLD’S TOP TWENTY SHAREHOLDERS
Registered Shareholder
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR KENNETH RUDY KAMON
GEMBLUE NOMINEES PTY LTD
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