56TH ANNUAL REPORT
ENDED 30 JUNE 2015
Honouring the Past
Treasuring the Present
Shaping the Future
ABN 92 000 207 988
www.oldfields.com.au
ANNUAL REPORT CONTENTS
Directors' Report
Remuneration Report
Auditor's Independence Declaration
Financial Report
Independent Auditor's Report
Corporate Governance Statement
Risk Management Statement
Shareholder Information
Corporate Directory
1
4
8
9
47
49
57
59
60
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT
Your directors present their report on the consolidated entity (referred to herein as the "Group") consisting of Oldfields Holdings Limited (referred to
hereafter as the "company" or "parent entity") and its controlled entities for the financial year ended 30 June 2015.
Directors
The names and details of the directors of Oldfields Holdings Limited during the financial year and until the date of this report are set out below. Directors
were in office for this entire period unless otherwise stated.
Name:
Title:
Qualifications:
Experience:
Tony Joseph Grima
Executive Director and Chief Executive Officer
Master of Commerce (Marketing)
15 years experience in general management roles in a large Fortune 500 company, both within Australia and
overseas, with a number of years experience in the building products industry
Interest in shares and options:
100,000 shares held
Other current directorships:
None
Former directorships in last 3 years:
None
Name:
Title:
Qualifications:
Experience:
William Lewis Timms
Non-executive Director and Chairman
Bachelor of Business (Accounting and Audit), Real Estate and Business Agent
28 years experience in accounting, taxation and audit, 21 years experience in commercial real estate and project
management
Special responsibilities:
Member of the Audit Committee and Member of the Remuneration Committee
Interest in shares and options:
39,384,528 shares held
Other current directorships:
William is a Non-Executive Director of Buderim Ginger Limited (since January 2015)
Former directorships in last 3 years:
None
Name:
Title:
Qualifications:
Experience:
Stephen Charles Hooper
Non-executive Director
Bachelor of Science
21 years experience in senior executive roles in the fast moving consumer goods industry, with a focus on supply
chain management
Special responsibilities:
Chairman of the Audit Committee and Member of the Remuneration Committee
Interest in shares and options:
50,000 shares held
Other current directorships:
Former directorships in last 3 years:
None
None
Principal Activities
The principal activities of the Group during the financial year were:
-
-
-
-
manufacturing, importing and marketing of paint brushes, paint rollers, painter's tools and accessories;
manufacturing and marketing garden sheds and outdoor storage systems;
manufacturing and marketing of scaffolding and related equipment; and
hire and errection of scaffolding and related products.
A large majority of our operations are conducted in Australia.
Review of Operations and Financial Results
Operating Results
Net operating loss for the Group after providing for income tax amounted to $1,102,000 (2014: Loss $2,576,000).
Earnings before interest, tax, depreciation and amortisation ("EBITDA") is a financial measure which is not prescribed by Australian Accounting Standard
("AAS") and represents the profit under AAS adjusted for specific non cash and significant items. The directors consider EBITDA to reflect the core
earnings/(loss) of the Group. The following table summarises the key reconciling items between statutory earnings/(loss) before income tax attributable to
the shareholders of the Group and EBITDA.
1
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT (continued)
Operating Results (continued)
Loss before income tax
Depreciation and amortisation expense
Interest expense
Foreign exchange gains/losses
Revaluation of deferred senior loan note
Loss on disposal of investment in associated companies
EBITDA
2015
$'000
(868)
1,361
482
(39)
229
-
1,165
2014
$'000
(2,429)
1,168
485
(15)
205
1,363
777
2013
$'000
(717)
1,034
524
(10)
98
-
929
2012
$'000
(1,543)
1,089
1,328
(1)
-
-
873
The Group revenue from continuing operations for the financial year ended 30 June 2015 was $27,380,000 (2014: $27,231,000), which was in line with the
prior year. Whilst the consumer division revenues were down predominantly due to intense competition within the paint application and outdoor storage
industries, revenue was increased within the scaffold division which was driven by an increase in demand within the building and construction industry. This
trend is expected to continue in the next twelve months.
The Group’s net loss after tax was $1,102,000 (2014: Loss $2,576,000). Despite intense competition across all divisions, as well as cost increases from
suppliers in Asia that were driven by labour increases in that region and the devaluation of the $AUD, the Group’s gross profit increased from 44.8% in 2014
to 47.5% in 2015 because of change in business mix during the year which focused more on higher margin businesses, especially within the scaffold division.
The consolidated EBITDA increased from $777K in 2014 to $1165K in 2015, which is an increase of 50%.
The Group has continued to make investments in improving in-store presence in key national hardware retailers, launching new products to the paint
specialist market and increasing awareness to improve revenue generation and growth in the scaffold division. These initiatives will continue in 2016 and are
expected to support future growth of the business.
Net cash provided by operating activities was $1,477,000 in 2015, compared to $657,000 in 2014. Improving operating cash flow continues to be a major
focus for the group with increased emphasis on improving revenue growth and margins in 2016.
Review of Operations
(i) Consumer Products - Paint Applications and Outdoor Storage Solutions
Revenue for the consumer division declined compared with the prior year. While benefiting from the changing landscape in the hardware retail market,
revenue in the more traditional paint specialist market has declined. As the overall market shifts and competition intensifies, there is a renewed focus on
differentiated products to ensure key customers can compete with their competitors while still maintaining a point of difference. With such changes in the
overall market and the resulting variation in customer mix, the consumer products division has experienced added pressure to maintain gross margins.
The consumer products division has spent the last twelve months consolidating, upgrading and rationalising its range of products with the process of re-
branding and repackaging near completion. Improvements have also been made to ensure that the supply chain is efficient, customer expectations are met,
lead times are improved and inventory controls are enhanced in order to satisfy demand. The division is now focused on innovation, becoming the brand of
choice in the market, best in class customer service, and improving internal business processes. In addition, by capitalising on the experience of recent staff
appointments, this division is well positioned to grow in the coming year. Potential growth opportunities are already being investigated with existing and new
customers.
(ii) Scaffolding Division
The increase in the building industry has supported growth in the scaffold division in 2015 as revenues increased by 8.1% compared to the previous year.
Despite a slight decrease in gross profit margins caused by competition, the scaffold division significantly improved its EBITDA in 2015 by improving labour
utilisation on scaffolding services and the consolidation/relocation of it's branches.
The scaffold division consolidated and/or relocated the majority of its branches in order to further reduce costs, improve efficiency levels, and be better
positioned in areas of building and construction growth. In addition, newer premises have been selected in highly populated areas to renew the division’s
image, encourage growth, and enhance brand recognition for the Group.
The scaffold manufacturing operation in China continued to operate strongly during the year and is well positioned to support the expected growth of this
division in 2016.
International sales increased by 18% compared with the prior year as the customer base expanded. This is expected to continue in 2016 and new market
opportunities are also being investigated.
Financial Position
The net assets of the group have decreased by $1,151,000 from $6,042,000 at 30 June 2014 to $4,891,000 at 30 June 2015. This decrease has largely
resulted from a net loss from operations.
A key area of focus for 2016 will be to concentrate on profitable growth opportunities to improve the net asset position of the Group.
Significant Changes in State of Affairs
During the year the Group merged and/or relocated most of it's scaffold branches across Australia. This was part of a restructuring program to obtain
efficiencies as well as to be closer to core customers and market activity.
There were no other significant changes in the state of affairs during the financial year.
2
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT (continued)
Dividends
Since the start of the financial year, no dividends have been paid or declared by Oldfields Holdings Limited.
Events after the Reporting Period
There have been no significant events after the end of the reporting period.
Future Developments, Prospects and Business Strategies
Capitalising on the expected upturn in the building and construction industry and changing hardware retail market will continue to be the primary focus for
the Group in 2016 with a concentration on sustainable and profitable growth across all divisions. The Group will continue to invest it's resources in ensuring
that it is well positioned to benefit from the continued growth in these sectors.
Over the last 12 months, the management team put in place the Group’s strategic plan for the next three years. As part of this process, the Group’s mission
statement has been remodelled, new key financial measures have been identified, and key strategies for growth have been developed.
Four strategic pillars underpin the Group’s mission statement that aim to provide focus and direction going forward. These pillars are centred on:
-
Building profitable growth and driving innovation to the market by:
Developing a new pipeline of business opportunities to grow revenue and margin levels
Developing a new innovation process and investigating potential new product lines
Expanding distribution networks in regional areas within the scaffold division
Identifying and developing a concise plan to grow the outdoor storage division
Repositioning and strengthening the Oldfields brand
Expanding distribution into growing markets internationally across all divisions
-
Developing and investing in people and continuing to build a market lead culture by:
Incorporating the Group’s mission statement and strategic pillars into recruitment processes, training programs and performance
management procedures, talent and succession plans and remuneration reviews
Developing and renewing leadership capabilities across all divisions
The development and rollout of an employee engagement program which aims to improve productivity, inspire and motivate employees,
and promote goal congruence
-
Improving on and ensuring that all areas of supply chain management is efficient by:
Ensuring adequate stock levels are maintained to meet customer demand and customer satisfaction levels remain high
Reviewing and selecting key strategic suppliers
Reviewing and negotiating prices in order to reduce inventory costs and improve margins
Implementing sales and operational planning to optimise working capital and cash flow management
Developing and implementing a process of benchmarking scaffold branches to drive improvements
Developing and implementing ongoing efficiency and cost reduction programs
-
Improving mission critical processes and systems by:
Identifying and improving key business processes and functions
Developing and implementing new reporting standards across all divisions
Each of these pillars will be supported by financial and operational measures to track the Group’s progress of these initiatives and monitor their success. The
management team and the Board are excited about the Group’s future prospects and feel confident that these initiatives will improve the Group’s results in
2016 and beyond.
Environmental Regulation and Performance
The Group’s operations are not subject to any particular or significant environmental regulation under the law of the Commonwealth or of a State or Territory
in Australia. The economic entity has established procedures whereby compliance with existing environmental regulations and new regulations are
monitored continually. This process includes procedures to be followed should an incident adversely impact the environment. The directors are not aware of
any breaches during the period covered by this report.
Directors' Meetings
The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each
director were as follow:
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Directors' Meetings
Number
Eligible to
Attend
12
12
12
Number
Attended
12
12
11
Audit Committee Meetings
Remuneration Committee
Meetings
Number Eligible
to Attend
2
2
2
Number
Attended
2
2
2
Number
Eligible to
Attend
-
1
1
Number
Attended
-
1
1
3
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT (continued)
Company Secretary
Gregory John Park — Bachelor of Business, CA.
Gregory has been the Chief Financial Officer and Company Secretary since April 2014. Gregory has more than 20 years experience in senior financial and
general management roles in retailing, manufacturing and distribution in the fast moving consumer goods industry.
Remuneration Report (Audited)
Remuneration Policy
The remuneration policy of Oldfields Holdings Limited has been designed to align key management personnel (KMP) objectives with shareholder and business
objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the
consolidated entity's financial results. The Board of Oldfields Holdings Limited believes the remuneration policy to be appropriate and effective in it's ability to
attract and retain the high-quality KMP to run and manage the consolidated group, as well as create goal congruence between directors, executives and
shareholders.
The Board’s policy for determining the nature and amount of remuneration for KMP of the Group is as follows:
-
-
-
-
The remuneration policy is to be developed by the remuneration committee and approved by the Board after professional advice is sought from
independent external consultants.
KMP receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, and
performance incentives.
Performance incentives are generally only paid once predetermined key performance indicators (KPIs) have been met.
The remuneration committee reviews KMP packages annually by reference to the Group’s performance, executive performance and
comparable information from industry sectors.
The performance of KMP is measured against criteria agreed biannually with each executive and is based predominantly on the forecast growth of the
Group’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The Board may, however,
exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the committee’s recommendations. Any
change must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of executives and reward them
for performance results leading to long-term growth in shareholder wealth.
KMP receive, at a minimum, a superannuation guarantee contribution required by the government, which is currently 9.5% (2014: 9.25%) of the individual's
average weekly ordinary time earnings (AWOTE). Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards
superannuation.
Upon retirement, KMP are paid employee benefit entitlements accrued to the date of retirement.
All remuneration paid to KMP is valued at the cost to the company and expensed.
The Board's policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The remuneration committee
determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at the Annual General Meeting.
Engagement of Remuneration Consultants
During the financial year, there were no consultants engaged by the remuneration committee to review the elements of KMP remuneration and provide
recommendations.
Performance-based Remuneration
The KPIs are set annually, with a certain level of consultation with KMP. The measures are specifically tailored to the area each individual is involved in and
has a level of control over. The KPIs target areas the Board believes hold greater potential for the Group's expansion and profit, covering financial and non-
financial as well as short and long-term goals. The level set for each KPI is based on budgeted figures for the Group and respective industry standards.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved.
Following the assessment, the KPIs are reviewed by the remuneration committee in light of the desired and actual outcomes, and their efficiency is assessed
in relation to the Group’s goals and shareholder wealth, before the KPIs are set for the following year.
In determining whether or not a KPI has been achieved, Oldfields Holdings Limited bases the assessment on audited figures, however, where the KPI involves
comparison of the Group or a division within the Group to the market, independent reports are obtained from organisations such as Standard & Poors.
4
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT (continued)
Remuneration Report (continued)
Employment Details of Members of Key Management Personnel
The following table provides employment details of persons who were, during the financial year, members of KMP of the Group.
Group Key Management Personnel
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Position Held During and at 30 June 2015
Executive Director and Chief Executive Officer
Non-executive Director
Non-executive Director
Company Secretary and Chief Financial Officer
Contract Details (Duration & Termination)
Duration unspecified. Termination 3 months notice
Duration & termination unspecified
Duration & termination unspecified
Duration unspecified. Termination 3 months notice
The table below illustrates the proportion of remuneration that was performance and non-performance based and the proportion of remuneration received
in the form of options by the KMP.
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Proportions of Elements of Remuneration
Related to Performance
Proportions of Elements of
Remuneration not Related
to Performance
Non-Salary
Cash Base
Incentives
%
-
-
-
-
Shares / Units
%
-
-
-
-
Options /
Rights
%
-
-
-
-
Fixed
Salary/Fee
%
100
100
100
100
Total
%
100
100
100
100
The employment terms and conditions of all KMP are formalised in contracts of employment.
There are no pre-defined termination benefits payable to key management personnel, other than previously accrued leave entitlements. In addition to the
above, the Group is committed to pay the CEO and the CFO up to 6 months of base salary each in the event of a successful takeover offer and their positions
are terminated or made effectively redundant.
Remuneration expenses for KMP
The following table of benefits and payments represents the components of the current year and comparative year remuneration expenses for each member
of KMP of the consolidated group. Such amounts have been calculated in accordance with Australian Accounting Standards:
2015
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Total
2014
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Christopher Michael Giles (resigned 30 April 2014)
Robert Allan Coleman (resigned 9 January 2014)
Gregory John Park (appointed 28 April 2014)
Total
Securities Received that are not Performance Related
Short-term benefits
Post
Employment
Benefits
Cash Salary
and Fees
$
203,204
60,000
45,872
164,760
473,836
Cash Bonuses &
Incentives
$
25,000
-
-
20,000
45,000
Total
Non-
Super-
Monetary
annuation
Benefits
$
$
$
19,304
27,492
275,000
- 5,700
65,700
- 4,358
50,230
- 15,652
200,412
27,492 45,014 591,342
Short-term benefits
Post
Employment
Benefits
Cash Salary
and Fees
$
146,411
60,000
45,872
150,790
119,288
29,361
551,722
Total
Non-
Super-
Monetary
Cash Bonuses &
annuation
Benefits
Incentives
$
$
$
$
13,543
- 18,129
178,083
- 5,550
-
65,550
- 4,243
-
50,115
- 10,891
11,084
172,765
- 9,310 9,544
138,142
-
- 2,716
32,077
- 38,330 46,680 636,732
No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration package.
5
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT (continued)
Remuneration Report (continued)
Performance-Related Share-based Payments
There were no performance-related share-based payments made to key management personnel during the year.
Options and Rights Granted as Remuneration
There were no options or rights granted as remuneration during the year.
KMP Shareholdings
The number of ordinary shares in Oldfields Holdings Limited held by each KMP of the Group during the financial year is as follows:
2015
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Total
2014
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Christopher Michael Giles (resigned 30 April 2014)
Robert Allan Coleman (resigned 9 January 2014)
Gregory John Park (appointed 28 April 2014)
Total
Other Transactions with KMP and/or their Related Parties
Issued on
Exercise of
Options
During the
Year
Granted as
Remuneration
During the Year
-
-
-
-
-
-
-
-
-
-
Number at
Beginning of
Year
100,000
39,384,528
-
-
39,484,528
Number at
Beginning of
Year
Granted as
Remuneration
During the Year
Issued on
Exercise of
Options
During the
Year
-
39,384,528
-
1,400,000
-
-
40,784,528
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other Changes
During the
Year
Number at
End of Year
-
100,000
- 39,384,528
50,000
50,000
-
-
50,000 39,534,528
Other Changes
During the
Year
100,000
Number at
End of Year
100,000
- 39,384,528
-
(1,400,000)
-
-
(1,300,000) 39,484,528
-
-
-
-
There were no other transactions conducted between the Group and KMP or their related parties, other than those disclosed above relating to equity,
compensation and loans, that were conducted other than in accordance with normal employee, customer or supplier relationships on terms no more
favourable than those reasonably expected under arm’s length dealings with unrelated persons.
(This concludes the Remuneration Report which has been audited)
Indemnifying Officers
During or since the end of the financial year, the company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay
insurance premiums as follows:
-
The company has paid premiums to insure all past, present and future directors against liabilities for costs and expenses incurred by them in
defending legal proceedings arising from their conduct while acting in the capacity of directors of the company, other than conduct involving a
wilful breach of duty in relation to the company. The contract of insurance prohibits disclosure of the nature of liability and the amount of the
premium.
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.
Options
At the date of this report, there were no unissued ordinary shares of Oldfields Holdings Limited under options.
Rounding
Oldfileds Holdings Limited is a type of Company referred to in ASIC Class Order 98/100 and therefore the amounts contained in this report and in the financial
report have been rounded to the nearest $1,000 (where rounding is applicable), or in certain cases, to the nearest dollar under the option permitted in the
class order.
6
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' REPORT (continued)
Non-audit Services
The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below
did not compromise the external auditor’s independence for the following reasons:
-
-
all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the
integrity and objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110:
Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to BDO East Coast Partnership for non-audit services:
Taxation and other services
Auditor's Independence declaration
2015
$
13,900
2014
$
18,725
A copy of the auditor's independence declaration as required under section 307C of the Corporation Act 2001 is set out on the following page.
This Director's Report is signed in accordance with the resolution of the Board of Directors.
Tony Joseph Grima
Dated:
31-August-2015
7
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY PAUL BULL TO THE DIRECTORS OF OLDFIELDS HOLDINGS
LIMITED
As lead auditor of Oldfields Holdings Limited for the year ended 30 June 2015, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Oldfields Holdings Limited and the entities it controlled during the
period.
Paul Bull
Partner
BDO East Coast Partnership
Sydney, 31 August 2015
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
8
FINANCIAL REPORT
Financial Statements
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
Notes to the Consolidated Financial Statements
1. Summary of Significant Accounting Policies
2. Revenue and Other Income
3. Expenses
4. Income Tax Expense
5. Cash and Cash Equivalents
6. Trade and Other Receivables
7. Inventories
8. Property, Plant and Equipment
9. Intangible Assets
10. Trade and Other Payables
11. Borrowings
12. Employee Benefit Obligations
13. Tax Assets/Liabilities
14. Derivative Financial Instruments
15. Financial Risk Management
Directors' Declaration
General Information
Page
14
25
25
25
26
27
28
28
28
30
30
31
32
33
33
16. Fair Value Measurements
17. Cash Flow Information
18. Parent Information
19. Interests in Subsidiaries
20. Related Party Transactions
21. Auditors’ Remuneration
22. Segment Information
23. Dividends
24. Earnings per Share
25. Issued Capital
26. Reserves
27. Accumulated Losses
28. Commitments
29. Contingent Liabilities and Contingent Assets
30. Events After the Reporting Period
Page
10
11
12
13
Page
36
37
37
38
39
40
40
42
43
43
44
44
44
45
45
46
The financial report includes the consolidated financial statements for Oldfields Holdings Limited (the ultimate parent entity) and its controlled entities
("Oldfields" or the "Group"). The financial report is presented in Australian dollars, which is Oldfields Holdings Limited's functional and presentation currency.
The financial report consists of the financial statements , notes to the financial statements and the directors' declaration.
Oldfields Holdings Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of
business is :
8 Farrow Road
Campbelltown, NSW, 2560, Australia
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial report.
The financial report was authorised for issue with a resolution of directors on 31 August, 2015. The directors have the power to amend and reissue the
financial report.
9
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Sales revenue
Cost of sales
Gross profit
Other income
Expenses:
Other expenses from ordinary activities:
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Finance costs
Revaluation of deferred senior loan note derivative component
Loss on disposal of investment in associated companies
Share of net profits of associated companies
Loss before income tax
Tax expense
Net loss from continuing operations
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Fair value gains on cash flow hedges (effective portion), net of tax
Exchange differences on translating foreign operations, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Net loss for the year attributable to:
Members of the parent entity
Non-controlling interest
Total net loss for the year
Comprehensive income attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive income for the year
(Loss)/Earnings per share from continuing operation attributable to members of the parent entity:
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
Note
2
2
3
4(a)
Note
24
24
2015
$'000
27,380
(14,384)
12,996
2014
$'000
27,231
(15,027)
12,204
7
30
(8,588)
(424)
(1,309)
(2,839)
(482)
(229)
-
-
(868)
(234)
(1,102)
(7,922)
(564)
(1,417)
(2,816)
(485)
(205)
(1,363)
109
(2,429)
(147)
(2,576)
33
71
104
(8)
(235)
(243)
(998)
(2,819)
(1,372)
270
(1,102)
(1,268)
270
(998)
2015
Cents
(1.67)
(1.67)
(2,715)
139
(2,576)
(2,958)
139
(2,819)
2014
Cents
(3.31)
(3.31)
The above statement should be read in conjunction with the accompanying notes.
10
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Current tax assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Employees benefit obligations
Derivative financial instruments
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Deferred tax liabilities
Employees benefit obligations
Derivative financial instruments
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Other reserves
Accumulated losses
Parent interest
Non-controlling interest
TOTAL EQUITY
Note
2015
$'000
2014
$'000
5
6
7
14
13
8
9
10
11
13
12
14
11
13
12
14
25
26
27
27
820
3,850
3,987
19
-
8,676
373
4,069
4,811
-
47
9,300
6,516
900
7,416
16,092
7,470
1,045
8,515
17,815
2,728
1,863
39
844
-
5,474
3,431
71
87
2,138
5,727
11,201
2,877
971
-
1,016
13
4,877
4,877
51
59
1,909
6,896
11,773
4,891
6,042
21,106
64
(16,835)
4,335
556
4,891
21,106
(40)
(15,463)
5,603
439
6,042
The above statement should be read in conjunction with the accompanying notes.
11
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Issued
Capital
$'000
Other
Reserves
$'000
Retained
Earnings
$'000
Subtotal
$'000
Note
Non-
Controlling
Interests
$'000
Total
$'000
Balance at 1 July 2013
21,176
(1,242)
(12,748)
7,186
449
7,635
Comprehensive income
(Loss)/profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as
owners:
Transaction costs relating to prior year share issue
Dividends provided for or paid
Total transactions with owners and other transfers
Other
Realisation of foreign exchange differences on
disposal of associated companies
Total Other
Balance at 30 June 2014
Balance at 1 July 2014
Comprehensive income
(Loss)/profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as
owners:
Dividends provided for or paid
Total transactions with owners and other transfers
26
23
26
23
-
(243)
(243)
(2,715)
-
(2,715)
(2,715)
(243)
(2,958)
139
-
139
(2,576)
(243)
(2,819)
-
-
-
(70)
-
(70)
-
-
-
-
-
-
(70)
-
(70)
-
-
21,106
1,445
1,445
(40)
-
-
(15,463)
1,445
1,445
5,603
21,106
(40)
(15,463)
5,603
-
(149)
(149)
-
-
439
439
270
-
270
(70)
(149)
(219)
1,445
1,445
6,042
6,042
(1,102)
104
(998)
(1,372)
-
(1,372)
(1,372)
104
(1,268)
-
-
-
-
-
-
104
104
-
-
-
-
-
-
(153)
(153)
(153)
(153)
Balance at 30 June 2015
21,106
64
(16,835)
4,335
556
4,891
The above statement should be read in conjunction with the accompanying notes.
12
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Other income received
Finance costs
Income tax paid
Interest paid on director's loan
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Payments relating to issue of additional shares
Repayment of borrowings
Loans from related parties
- payments made
- proceeds from borrowings
Dividends paid by controlled entities to non-controlling interests
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
Note
2015
$'000
2014
$'000
28,278
(26,303)
1,975
29,985
(28,861)
1,124
9
(378)
(129)
-
1,477
237
(451)
(214)
284
-
(1,054)
(275)
206
(153)
(992)
271
(247)
24
42
(344)
(163)
(2)
657
180
(411)
(231)
359
(70)
(633)
(202)
200
(149)
(495)
(69)
(178)
(247)
17
5
The above statement should be read in conjunction with the accompanying notes.
13
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
These consolidated financial statements and notes represent those of Oldfields Holdings Limited and Controlled Entities (the “Consolidated Group” or
“Group”). The separate financial statements of the parent entity, Oldfields Holdings Limited, have not been presented within this financial report as
permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 31 August 2015 by the directors of the company.
Note 1
Summary of Significant Accounting Policies
This note provides a list of all significant accounting policies adopted in the preparation of these consolidated financial statements. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also
comply with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available-for-sale financial
assets, financial assets and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment and derivative
financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in
the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in Note 1(aa).
Comparative figures
Comparative figures have been adjusted to conform to changes in classification and presentation for the current financial year.
Going Concern Basis
As disclosed in the consolidated financial statements, the Group generated a loss after tax of $1,102,000 for the year ended 30 June 2015. The Directors are
confident that the Group will be able to continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the
consolidated financial report for the following reasons:
-
-
-
The Group anticipates to grow revenue over the next 12 months and has already begun implementing a strategic plan to achieve this objective;
The Group generated a positive cash flow from operating activities of $1,477,000 during the year;
The cash flow forecast for 2016 suggests cash flows from operations will be positive and that banking facility covenants and debt repayments
will be met.
(a)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of Oldfields Holdings Limited and all of the subsidiaries
(including any structured entities). Subsidiaries are entities the Parent controls. The Parent 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 over the entity.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which
control
is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Inter-company
transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on consolidation. Accounting
policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by
the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as ‘Non-Controlling Interests’. The Group
initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the
subsidiary’s net assets on liquidation at either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other
comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and
statement of profit or loss and other comprehensive income.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under
common control. The business combination will be accounted for from the date that control is attained whereby the fair value of the
identifiable assets acquired and liabilities assumed, including contingent liabilities, are recognised (subject to certain limited exemptions).
14
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
(a)
Summary of Significant Accounting Policies (continued)
Principles of Consolidation (continued)
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 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 the profit or loss and other comprehensive income statement when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i) 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 a 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 interests is determined using valuation techniques which make the
maximum use of market information where available. Under this method, goodwill attributable to the non-controlling interests is recognised in
the consolidated financial statements.
Goodwill on acquisitions 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 being 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.
(b)
Operating Segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal
reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating
segments and assessing their performance.
(c)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax
rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax
losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in
the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax
rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax
losses.
15
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
(c)
Summary of Significant Accounting Policies (continued)
Income Tax (continued)
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in
the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise
from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in
a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in
foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Tax Consolidation
Oldfields Holdings Limited and its wholly-owned subsidiaries have implemented the tax consolidation legislation. As a consequence, these
entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial
statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and rebates
allowed. When the inflow of consideration is deferred it is treated as the provision of financing and is discounted at a rate of interest that is
generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately
received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of
ownership of the goods and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest method.
Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture
entities are accounted for in accordance with the equity method of accounting.
Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the end
of the reporting period where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the
services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably,
revenue is recognised only to the extent that related expenditure is recoverable.
All revenue is stated net of the amount of goods and services tax.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to
prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the statement of financial position.
16
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
(d)
(e)
(f)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(g)
(h)
(i)
Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business.
Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables
are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any provision for impairment. Refer to Note 1(s) for further discussion on the determination of impairment losses.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct
labour and an appropriate proportion 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.
Property, Plant and Equipment
All property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable
to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign
currency purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are recognised
as expenses in profit or loss during the financial period in which they are incurred.
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.
Depreciation
The depreciable amount of all fixed assets, including capitalised lease assets, is depreciated on a straight-line basis over the asset's useful life to
the company 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
Leasehold improvements
Plant and equipment
Motor vehicles
Depreciation Rate
20-33%
5-33%
18-20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in profit
or loss in the period in which they arise. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are
transferred to retained earnings.
(j)
Intangibles other than Goodwill
Patents and Trademarks
Patents and trademarks are recognised at cost of acquisition. They have a finite life and are carried at cost less any accumulated amortisation
and any impairment losses. Patents and trademarks are amortised over their useful lives ranging from 5 to 10 years.
Research and Development
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when
technical feasibility studies identify that the project is expected to deliver future economic benefits and these benefits can be measured reliably.
Capitalised development costs have a finite useful life and are amortised on a systematic basis based on the future economic benefits over the
useful life of the project.
17
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(k)
Investments in Associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and
operating policy decisions of the entity but is not control or joint control of those policies. Investments in associates are accounted for in the
consolidated financial statements by applying the equity method of accounting, whereby the investment is initially recognised at cost (including
transaction costs) and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate company. In
addition, the Group’s share of the profit or loss of the associate is included in the Group’s profit or loss.
The carrying amount of the investment includes, when applicable, goodwill relating to the associate. Any discount on acquisition, whereby the
Group’s share of the net fair value of the associate exceeds the cost of investment, is recognised in profit or loss in the period in which the
investment is acquired.
Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the
associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of
further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate
subsequently makes profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of the
losses not recognised.
(l)
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting
period. The balance is recognised as a current liability with the amounts normally paid between 7 and 60 days of recognition of the liability.
(m)
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.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(n)
Employee Benefits
Short-term Employee Benefits
Obligations for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within
12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to
the end of the reporting period and are measured at the (undiscounted) amounts expected to be paid when the liabilities are settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as a part of current trade and
other payables in the statement of financial position. The Group’s obligations for employees’ annual leave and long service leave entitlements
are recognised as current employee benefit obligations in the statement of financial position.
Other long-term Employee Benefits
Obligations for long service leave and annual leave that are not expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period .
Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are
discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates
that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long-term employee
benefits are recognised in profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except
where the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which
case the obligations are presented as current provisions.
Defined Contribution Superannuation Benefits
All employees of the Group receive defined contribution superannuation entitlements, for which the Group pays the fixed superannuation
guarantee contribution (currently 9.5% of the employee’s earnings) to the employee’s superannuation fund of choice. All contributions in
respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The Group’s obligation with
respect to employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at
the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the undiscounted amounts
expected to be paid when the obligation is settled and are presented as current liabilities in the Group’s statement of financial position.
18
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
(n)
Summary of Significant Accounting Policies (continued)
Employee Benefits (continued)
Termination benefits
When applicable, the Group recognises a liability and expense for termination benefits at the earlier of: (a) the date when the Group can no
longer withdraw the offer for termination benefits; and (b) when the Group recognises costs for restructuring pursuant to AASB 137: Provisions,
Contingent Liabilities and Contingent Assets and the costs include termination benefits.
In either case, unless the number of employees
affected is known, the obligation for termination benefits is measured on the basis of the number of employees expected to be affected.
Termination benefits that are expected to be settled wholly before 12 months after the annual reporting period in which the benefits are
recognised are measured at the undiscounted amounts expected to be paid. All other termination benefits are accounted for on the same basis
as other long-term employee benefits.
(o)
(p)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently
measured at amortised cost using the effective interest rate method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings
are classified as non-current.
Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset (but not the legal ownership) are
transferred to entities in the consolidated group, are classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or
the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the
reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses in the
periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.
(q)
Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For
financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date
accounting is adopted).
Financial instruments are initially measured at fair value plus transactions costs except where the instrument is classified ‘at fair value through
profit or loss’ in which case transaction costs are expensed to profit or loss immediately.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less principal
repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and
the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that
discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) over the expected life
(or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or
financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying amount with a consequential
recognition of an income or expense item in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of
accounting standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are 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 amount being included in profit or loss.
19
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
(q)
Summary of Significant Accounting Policies (continued)
Financial Instruments (continued)
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and
are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iii)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is
the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iv)
Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of being classified into other categories of
financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other
entities where there is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and
losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that
asset previously recognised in other comprehensive income is reclassified into profit or loss.
(v)
Available-for-sale financial assets are classified as non-current assets when they are expected to be sold after 12 months from the end of
the reporting period. All other available-for-sale financial assets are classified as current assets.
Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are
recognised in profit or loss through the amortisation process and when the financial liability is derecognised.
Derivative Instruments
The Group designates certain derivatives as either:
(i)
(ii)
Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
Hedges of highly probable forecast transactions (cash flow hedge).
At the inception of the transaction the relationship between hedging instruments and hedged items, as well as the Group's risk management
objective and strategy for undertaking various hedge transactions is documented.
Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and
will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items are also documented.
(i)
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss, together with
any changes in the fair value of hedged assets or liabilities that are attributable to the hedged risk.
(ii)
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other
comprehensive income and accumulated in hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss.
Amounts accumulated in the hedge reserve in equity are transferred to profit or loss in the periods when the hedged item affects profit or
loss.
Impairment
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of
one or more events (a “loss event”) having occurred, which has an impact on the estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered to
constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value previously
recognised in other comprehensive income is reclassified to profit or loss at this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are
experiencing significant financial difficulty; default or delinquency in interest or principal payments; indications that they will enter bankruptcy
or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults.
20
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
(q)
Summary of Significant Accounting Policies (continued)
Financial Instruments (continued)
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying
amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the
carrying amount cannot be recovered by any means, at that point the written-off amounts are charged to the allowance account or the carrying
amount of impaired financial assets is reduced directly if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the Group recognises the
impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events
that have occurred are duly considered.
Derecognition
Financial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is transferred to another party
whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities
are derecognised when the related obligations are discharged, cancelled or have expired. The difference between the carrying amount of the
financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets
or liabilities assumed, is recognised in profit or loss.
(r)
Fair Value of Assets and Liabilities
The Group measures some of it's assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements
of the applicable accounting standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction
between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value.
Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and
liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise,
to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e., the market with the
greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to
the entity at reporting date (i.e., the market that maximises the receipts from the sale of the asset or minimises the payment made to transfer
the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest and best
use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share based payment arrangements) may be
valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market
information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and
where significant, are detailed in the respective note to the financial statements.
(s)
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 amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the
asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116:
Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other
Standard.
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.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use.
(t)
Foreign Currency Transactions and Balances
Functional and Presentation Currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that
entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional currency.
21
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
(t)
Summary of Significant Accounting Policies (continued)
Foreign Currency Transactions and Balances (continued)
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried
at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a
qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that
the underlying gain or loss is recognised in other comprehensive income, otherwise the exchange difference is recognised in the profit or loss.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are
translated as follows:
(i)
(ii)
(iii)
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other
comprehensive income and included in the foreign currency translation reserve in the statement of financial position. The cumulative amount of
these differences is reclassified into profit or loss in the period in which the operation is disposed of.
(u)
Issued Capital
Ordinary shares are classified as equity.
deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
(v)
(w)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Oldfields Holdings Limited, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax
effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(x)
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 (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable
to, the ATO is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable
from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.
(y)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in it's financial
statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum
comparative financial statement is presented.
(z)
Rounding
Amounts in this financial report have been rounded to the nearest thousand dollars unless otherwise stated. The Group is the kind referred to
in the Class Order 98/100 dated July 1998 issued by the Australian Securities and Investments Commission. All rounding has been conducted in
accordance with the class order.
22
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(aa)
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available
current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained
both externally and within the Group.
Key Estimates
(i) Impairment - general
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.
(ii) Employee entitlement provisions - Long Service Leave
As discussed in note 1(m), the liability for long service leave is recognised and measured at the present value of the estimated future cash flows
to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and
pay increases through promotion and inflation have been taken into account.
(iii) Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and
other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 1(s). The
recoverable amounts of cash generating units have been determined based on value-in use calculations. These calculations require the use of
assumptions, including estimated discount rates based on the current cost of capital and growth rates of estimated future cash flows.
(iv) Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it probably that future taxable
benefits will be available to utilise those temporary differences and losses.
(v) Derivatives
The Group uses valuation techniques to estimate the fair value of certain derivative financial instruments. Information on the key assumptions
used in estimating the fair values of these instruments is found at note 16.
Key Judgments
(i) Provision for impairment of receivables
The provision for impairment of receivables assessment required a degree of estimation and judgement. The level of provision is assessed by
taking into account the recent sales experience, the ageing of the receivables, historical collection rates and specific knowledge of the individual
debtors financial position.
(ii) Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of provision is assessed by
taking into account the recent sales experience, the ageing of the inventories, and other factors that affect inventory obsolescence.
(iii) Estimation of useful lives of assets
The consolidated entity determined the estimated useful lives and related depreciation and amortisation charges for its property, plant and
equipment and definite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event.
The depreciation and amortisation charge will increase where the useful lives are less than previously estimated, or technically obsolete or non-
strategic assets that have been abandoned or sold will be written off or down.
(ab)
New and Amended Accounting Policies adopted by the Group
The group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 July 2014:
(i) AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
(ii) AASB 2012–3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities
(iv) AASB 2014-1 Amendments to Australian Accounting Standards
The adoption of AASB 2013-3 had a small impact on the impairment disclosures and AASB 2014-1 has required additional disclosures in our
segment note. Other than that, the adoption of these standards did not have any impact on the current period or any prior period and is not
likely to affect future periods.
23
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(ac)
New Accounting Standards for Application in Future Periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group, together with an
assessment of the potential impact of such pronouncements on the Group when adopted in future periods, are discussed below:
(i)
AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods commencing on or after 1
January 2018).
The Standards will be applicable retrospectively (subject to the comment on hedge accounting below) and include revised requirements
for the classification and measurement of financial
instruments, revised recognition and derecognition requirements for financial
instruments and simplified requirements for hedge accounting.
The key changes made to the Standard that may affect the Group on initial application include certain simplifications to the classification
of financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable election to recognise gains and losses
on investments in equity instruments that are not held for trading in other comprehensive income. AASB 9 also introduces a new model
for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial
items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of AASB 9, the application
of such accounting would be largely prospective.
The adoption of AASB 9 is unlikely to have an impact on the Group’s financial statements.
(ii)
AASB 15 Revenue from Contracts with Customers (applicable for annual reporting periods commencing on or after 1 January 2017).
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers contracts for goods and
services and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue is recognised when
control of a good or service transfers to a customer – so the notion of control replaces the existing notion of risks and rewards. The
standard permits a modified retrospective approach for the adoption. Under this approach entities will recognise transitional adjustments
in retained earnings on the date of initial application (for example 1 July 2017), without restating the comparative period. They will only
need to apply the new rules to contracts that are not completed as of the date of initial application.
Management is currently assessing the impact of the new rules and has identified the following areas that are likely to be affected:
* consignment sales where recognition of revenue will depend on the passing of control rather than the passing of risks and rewards
* the balance sheet presentation of rights of return, which will have to be grossed up in future (separate recognition of the right to
recover the goods from the customer and the refund obligation)
At this stage, the group is not able to estimate the impact of the new rules on the group’s financial statements. The group will make more
detailed assessments of the impact over the next twelve months.
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or
future reporting periods and on foreseeable future transactions.
24
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 2
Revenue and Other Income
The group derives the following types of revenue:
Sales revenue:
Sale of goods
Rental revenue
Total sales revenue
Other income:
Other income
Total other income
Total revenue and other income from continuing operations:
Attributable to members of the parent entity
Attributable to an entity with non-controlling interests
Total revenue and other from continuing operations
Note 3
Expenses
Loss before income tax includes the following specific expenses by nature:
Inventory recognised as an expense during the year
Depreciation expense
Amortisation expense
Goodwill impairment
Employee benefits expense
Bad and doubtful debts provision
Rental expense on operating leases
Loss on disposal on investment in associated companies:
Reclassification of foreign currency exchange differences relating to associated companies
Gain on disposal/reduction of investment in associated companies
Total loss on disposal on investment in associated companies:
Finance costs:
Related parties
Unrelated parties
Hire purchase charges
Unwinding of discount on deferred senior loan note
Other borrowing costs
Total finance costs
Note 4
Income Tax Expense
Income tax expense
(a)
Current tax
Current tax on profits for the year
Adjustments for current tax of prior periods
Total current tax expense
Deferred income tax
Decrease (increase) in deferred tax assets
(Decrease) increase in deferred tax liabilities
Total deferred tax expense/(benefit)
Total income tax expense
2015
$'000
2014
$'000
14,768
12,612
27,380
15,738
11,493
27,231
7
7
30
30
23,099
4,288
27,387
23,466
3,795
27,261
Note
2015
$'000
2014
$'000
8
9
9
7,616
8,349
1,331
1,017
30
141
152
-
8,994
9,145
220
42
1,133
1,237
-
-
-
-
299
45
109
29
482
1,445
(82)
1,363
13
305
55
97
15
485
Note
2015
$'000
2014
$'000
202
12
214
(4)
24
20
234
114
-
114
(11)
44
33
147
13(a)
13(b)
25
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 4
Income Tax Expense (continued)
(b)
Loss before income tax expense
Numerical reconciliation of income tax expense to prima facie tax payable/receivable
Tax at the Australian tax rate of 30% (2014 – 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-allowable items
Under/(over) provision for income tax in prior year
Unwinding of discount on DSLN not deductible
Revaluation of derivative element of DSLN not deductible
Net difference between tax and book value on disposal of PPE
Exempt foreign loss from disposal on investment in associated companies
Less tax effect of:
Share of net profits of associates and joint venture entities netted directly
Net tax effect profit/(loss) from overseas operations
Current year tax loss not brought to account
Income tax expense
Tax recognised in other comprehensive income
Changes in fair value of the cash flows hedge
Total tax recognised in other comprehensive income
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Operating losses
Capital losses
Potential tax benefit @ 30%
Note
26
2015
$'000
(868)
(260)
47
12
33
69
-
-
(99)
-
5
(338)
234
(14)
(14)
9,134
273
2,822
2014
$'000
(2,429)
(729)
6
(26)
29
61
64
409
(186)
33
(13)
(353)
147
3
3
8,007
273
2,484
The unused tax losses were incurred by the Australian tax consolidated group. The losses are currently not considered to be recoverable as the Group is not
likely to generate taxable income in the foreseeable future.
The benefits of the above unused tax losses will only be realised if the conditions for deductibility set out in Note 1(c) occur. These amounts have no expiry
date.
Note 5
Cash and Cash Equivalents
Cash on hand
Cash at bank
Total cash and cash equivalents
(a) Reconciliation to cash flow statement
2015
$'000
2
818
820
The above cash balance is reconciled to the amount of cash shown in the statement of cash flows at the end of the financial year as follows:
Cash and cash equivalents
Bank overdrafts
Balances per statement of cash flows
(b) Classification as cash equivalents
Note
11
2015
$'000
820
(796)
24
2014
$'000
2
371
373
2014
$'000
373
(620)
(247)
Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24 hours
notice with no loss of interest. Refer Note 1(f) for the Group’s other accounting policies on cash and cash equivalents.
(c) Risk exposure
The Group's exposure to interest rate risk is discussed in Note 15. The maximum exposure to credit risk at the end of the reporting period is the carrying
amount of each cash and cash equivalents mentioned above.
26
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 6
Trade and Other Receivables
CURRENT
Trade receivables
Provision for impairment
Net trade receivables
Other receivables
Prepayments
Total current trade and other receivables
(a)
Classification as trade and other receivables
2015
$'000
2014
$'000
3,754
(198)
3,556
52
242
3,850
3,349
(44)
3,305
473
291
4,069
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. Loans and other receivables are
non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. If collection of the amounts is expected in one
year or less they are classified as current assets. If not, they are presented as noncurrent assets. Trade receivables are generally due for settlement within 30
days and therefore are all classified as current. The Group’s other accounting policies and impairment for trade and other receivables are outlined in Notes
1(g) and 1(s) respectively.
(b)
These amounts generally arise from transactions outside the usual operating activities of the Group. Collateral is not normally obtained.
Other receivables
(c)
Impairment and risk exposure
A provision for impairment is recognised when there is objective evidence that an individual trade or term receivable is impaired. These amounts have been
included within the administrative expenses item in the consolidated statement of profit or loss and comprehensive income.
The aging analysis of these receivables are as follows:
1 to 3 months
3 to 6 months
Over 6 months
Total
Movement in the provision for impairment of receivables is as follows:
Opening balances
Provision for impairment recognised during the year
Receivables written off during the year as uncollectable
Bad debts recovered
Closing balance
Past due but not impaired
2015
$'000
16
9
173
198
2015
$'000
44
220
(67)
1
198
2014
$'000
26
15
3
44
2014
$'000
19
42
(19)
2
44
Amounts are considered as ‘past due’ when the debt has not been settled with the terms and conditions agreed between the Group and the customer or
counter party 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.
As at 30 June 2015, trade receivables of $268,000 (2014: $285,000 ) were past due but not impaired. These relate to a number of independent customers for
whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:
Up to 3 months
3 to 6 months
Total
2015
$'000
217
51
268
2014
$'000
156
129
285
Credit risk
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables
specifically provided for and mentioned within Note 6. The class of assets described as Trade and Other Receivables is considered to be the main source of
credit risk related to the Group.
(d)
Financial assets classified as loans and receivables
Trade and other Receivables
Total current
Financial assets
Note
15
2015
$'000
3,608
3,608
2014
$'000
3,778
3,778
27
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 7
Inventories
Raw materials and stores
Work in progress
Finished goods
Goods in transit
Less provisions
Total inventories
Note
2015
$'000
916
320
2,488
590
(327)
3,987
2014
$'000
841
433
3,241
510
(214)
4,811
The costs of individual items of inventory are determined using weighted average costs. Refer Note 1(h) for the Group’s accounting policies for inventories.
Note 8
Property, Plant and Equipment
Hire
Equipment
$'000
Plant and
Equipment
$'000
Note
Leasehold
Improve-
ments
$'000
Motor
Vehicles
$'000
Total
$'000
Year ended 30 June 2014
At 30 June 2013
Cost
Accumulated depreciation/amortisation
Net book amount
Year ended 30 June 2014
Opening net book amount
Additions
Disposals
Depreciation expense
Closing net book amount
At 30 June 2014
Cost
Accumulated depreciation/amortisation
Net book amount
Year ended 30 June 2015
Opening net book amount
Exchange differences
Additions
Disposals
Depreciation expense
Closing net book amount
At 30 June 2015
Cost
Accumulated depreciation/amortisation
Net book amount
Note 9
Intangible Assets
Year ended 30 June 2014
At 30 June 2013
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2014
Opening net book amount
Additions
Amortisation charge
Closing net book amount
3
3
8,517
(1,814)
6,703
6,703
176
(115)
(492)
6,272
8,549
(2,277)
6,272
6,272
0
257
(67)
(823)
5,639
8,433
(2,794)
5,639
4,317
(3,531)
786
786
100
(10)
(216)
660
4,347
(3,687)
660
660
25
107
(11)
(245)
536
4,388
(3,852)
536
385
(268)
117
117
33
(4)
(60)
86
349
(263)
86
86
11
51
(1)
(59)
88
392
(304)
88
2,276
(1,660)
616
616
100
(16)
(248)
452
1,996
(1,544)
452
452
7
49
(51)
(204)
253
1,574
(1,321)
253
15,495
(7,273)
8,222
8,222
409
(145)
(1,016)
7,470
15,241
(7,771)
7,470
7,470
43
464
(130)
(1,331)
6,516
14,787
(8,271)
6,516
Note
Goodwill
$'000
Trademark
&
Licences
$'000
Software &
Other
$'000
Total
$'000
5,160
(4,181)
979
979
-
-
979
177
(144)
33
33
-
(13)
20
372
(208)
164
164
21
(139)
46
5,709
(4,533)
1,176
1,176
21
(152)
1,045
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
3
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 9
Intangible Assets (continued)
At 30 June 2014
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2015
Opening net book amount
Additions
Amortisation charge
Impairment losses
Balance at 30 June 2015
At 30 June 2015
Cost
Accumulated amortisation and impairment
Net book amount
Note
Goodwill
$'000
Trademark
&
Licences
$'000
Software &
Other
$'000
3
5,160
(4,181)
979
979
-
-
(141)
838
5,160
(4,322)
838
177
(157)
20
20
-
(11)
-
9
177
(168)
9
393
(347)
46
46
26
(19)
-
53
418
(365)
53
Total
$'000
5,730
(4,685)
1,045
1,045
26
(30)
(141)
900
5,755
(4,855)
900
Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and
amortisation expense per the statement of profit or loss. Goodwill has an indefinite useful life.
Impairment tests for goodwill
Goodwill is allocated to the Group's cash-generating units (CGUs) according to reporting segment. A CGU level summary of the goodwill allocation is
presented below.
Consumer products segment
Scaffold division segment
Total
Significant estimate: key assumptions used for value-in-use calculations
Note
2015
$'000
-
838
838
2014
$'000
141
838
979
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash generating unit (CGU) is determined
based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on a one-year budget and four-year
projections approved by management. Cash flows beyond the one-year budget period are extrapolated using the estimated growth rates stated below. The
growth rates for the terminal period do not exceed the long-term average growth rates for the industry in which each CGU operates.
The following key assumptions were used in the value-in-use calculations:
2015
Consumer products
Scaffold division
2014
Consumer products
Scaffold division
Growth Rate
Year 1
Year 2-5
Terminal
Period Growth
Rate
%
%
%
Discount
Rate
%
7.00%
6.10%
7.50%
6.10%
3.00%
2.50%
3.00%
2.50%
3.00%
3.00%
19.64%
17.39%
3.00%
3.00%
19.53%
17.30%
Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to
project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which
are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks
associated with a particular segment.
Significant estimate: impairment charge
The impairment charge of $141,000 arose in the consumer product CGU following a review of the Painteroo and WYCO branded products, originally acquired
during 2007 and 2008, which are now selling under or as a sub-brand under the Oldfields brand name. The Group reassessed the future benefits of these
brand names together with the overall operating result of the segment which lead to impairment charge during the year. No class of asset other than
consumer products goodwill was impaired.
29
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 9
Intangible Assets (continued)
Sensitivity
The calculation of value-in-use is most sensitive to changes in the discount rate. As disclosed in Note 1, the directors have made judgements and estimates in
respect of impairment testing of goodwill and intangible assets. Should these estimates not occur, the resulting goodwill and intangible assets may vary in
carrying amount.
If the discount rate was to increase by 3%, goodwill would not need to be impaired with all other assumptions remaining constant, for
scaffold division.
Note 10
Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
Net GST payables
Total trade and other payables
Financial liabilities at amortised cost classified as trade and other payables
(a)
Trade and other payables
Total current
Financial liabilities as trade and other payables
Trade payables are unsecured and are usually paid within 7-60 days of recognition.
Note
2015
$'000
2014
$'000
1,653
892
183
2,728
1,655
1,136
86
2,877
15
2,545
2,545
2,791
2,791
The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term nature.
Note 11
Borrowings
CURRENT
Secured liabilities
Bank overdrafts
Bank loans
Other financing liabilities
Hire purchase liabilities
Total current borrowings
NON-CURRENT
Unsecured liabilities
Other related liabilities
Total unsecured non-current borrowings
Secured liabilities
Bank loans
Hire purchase liabilities
Debt element of deferred senior loan note
Total secured non-current borrowings
Total non-current borrowings
Total borrowings
(a)
Current and non-current secured liabilities:
Bank overdraft
Bank loan
Other financing liabilities
Hire purchase liabilities
Debt element of deferred senior loan note
Total current and non-current secured liabilities
Note
2015
$'000
2014
$'000
15
15
15
15
15
15
15
15
796
870
81
116
1,863
-
-
2,309
106
1,016
3,431
620
116
86
149
971
69
69
3,688
213
907
4,808
3,431
4,877
5,294
5,848
2015
$'000
796
3,179
81
222
1,016
5,294
2014
$'000
620
3,804
86
362
907
5,779
30
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 11
Borrowings (continued)
Compliance with loan covenants
(b)
The Group has a finance facility in place with the bank until 31 August 2016 which includes normal commercial terms and conditions which are subject to such
covenants as interest cover ratios; capital expenditure limits; gearing ratios; and the Group cannot create or acquire a new subsidiary unless that subsidiary
becomes a party to the agreement. The Group complied with all its loan covenants during the year.
Cash at bank
Bank overdraft
Bank loan
Debt element of deferred senior loan note
Borrowings relating to loan covenants
(c)
Assets pledged as security
Fixed and floating charge over total current and non-current assets
2015
$'000
(818)
796
3,179
1,016
4,173
2014
$'000
(371)
620
3,804
907
4,960
16,092
17,815
Deferred Senior Loan Note
(d)
On 21 December 2012, the Group's bank swapped senior debt for a Deferred Senior Loan Note (DSLN) for $2,370,224 with a 10 year maturity. The main
terms of the loan note are as follows:
-
-
-
-
-
-
-
-
The DSLN is secured against assets of the Group;
Interest will be capitalised and paid either on termination or early repayment;
If the DSLN is repaid or partially repaid within the first 5 years, it will attract interest at 12% p.a.;
If the DSLN is repaid or partially repaid after the first 5 years, the amount of interest paid will be dependent upon the share price of the Group,
but capped at 12% p.a.;
In the event that the weighted average share price of the company is the same or below the issue price (10 cents) of the capital raised at the
time of the repayment after the first 5 years, the only payment due will be the original debt;
The DSLN noteholder will also be entitled to receive a payment to the equivalent value of any dividend payment made by the Group;
Entitlement to a dividend-triggered payment will be based on the face value of the DSLN divided by the issue price upon commencement of the
facility agreement; and
Other normal conditions apply in respect to meeting gearing and interest cover ratios.
Accordingly, the DSLN has been identified as containing two main components: the core debt and a derivative element capturing the capital appreciation
payment, interest and dividend-triggered entitlement. The core debt has been discounted by 12% to net present value over the expected term of the DSLN
being 10 years and is included in non-current borrowings.
Note 12
Employee Benefit Obligations
Current employee leave obligations
Non-current employee leave obligations
Total employee benefit obligations
2015
$'000
844
87
931
2014
$'000
1,016
59
1,075
(a)
The leave obligations cover the Group’s liability for long service leave and annual leave.
Leave obligations
The current portion for this obligation includes the total amount accrued for annual leave entitlements and the amounts accrued for long service leave
entitlements that have vested due to employees having completed the required period of service. Based on past experience, the Group does not expect the
full amount of annual leave or long service leave balances classified as current liabilities to be settled within the next 12 months. However, these amounts
must be classified as current liabilities since the Group does not have an unconditional right to defer the settlement of these amounts in the event employees
wish to use their leave entitlement.
The non-current portion for this obligation includes amounts accrued for long service leave entitlements that have not yet vested in relation to those
employees who have not yet completed the required period of service.
The probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits have
been included in Note 1(n).
Amounts not expected to be settled within the next 12 months
Current leave obligations expected to be settled after 12 months
444
483
31
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 13
Tax Assets/Liabilities
CURRENT
Income tax receivables
Total current tax assets
CURRENT
Income tax liabilities
Total current tax liabilities
Deferred tax assets
(a)
The balance comprises temporary differences attributable to:
Employee benefits
Other
Doubtful debts
Other
Sub other total
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
Total deferred tax assets
(b)
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Fixed assets
Total deferred tax liabilities
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
Deferred tax liabilities expected to be recovered after more than 12 months
Total deferred tax liabilities
(c)
Movements in deferred tax (assets)/liabilities
At 30 June 2015
Fixed assets
Trade and other receivables
Employee benefits obligations
Other
Net deferred tax (assets)/liabilities
At 30 June 2014
Fixed assets
Employee benefits obligations
Other
Net deferred tax (assets)/liabilities
2015
$'000
-
-
39
39
34
34
4
10
14
48
(48)
-
48
-
48
2014
$'000
47
47
-
-
43
43
-
1
1
44
(44)
-
37
7
44
2015
$'000
2014
$'000
119
119
(48)
71
119
119
95
95
(44)
51
95
95
Opening
Balance
$'000
Recognised in
Profit & Loss
$'000
Closing
Balance
$'000
95
-
(43)
(1)
51
139
(54)
1
86
24
(4)
9
(9)
20
(44)
11
(2)
(35)
119
(4)
(34)
(10)
71
95
(43)
(1)
51
32
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 14
Derivative Financial Instruments
CURRENT ASSETS
Forward exchange contracts
Total current derivative financial assets
CURRENT LIABILITIES
Forward exchange contracts
Total current derivative financial instruments
NON-CURRENT LIABILITIES
Derivative element of deferred senior loan note
Total non-current derivative financial instruments
Total derivative financial liabilities
(a)
Forward exchange contracts
Note
11(d)
2015
$'000
19
19
-
-
2014
$'000
-
-
13
13
2,138
2,138
1,909
1,909
2,138
1,922
Forward exchange contracts are used to hedge cash flow risk associated with future transactions. Gains and losses arising from changes in the fair value of
these derivatives are initially recognised directly in a hedge reserve in the equity section of the statement of financial position as per Note 26. At the date of
the transaction, amounts included in the hedge reserve are transferred from equity and included in either the statement of profit or loss and other
comprehensive income or the cost of assets. The statement of changes in equity includes transfers to and from the hedge reserve.
(b)
Derivative Element - Deferred Senior Loan Note (capital appreciation, interest and dividend-triggered entitlement)
The capital appreciation, interest and dividend-triggered entitlement components of the Deferred Senior Loan Note as per Note 11, have been accounted for
as a derivative financial instrument liability on the basis that interest payments are indexed to the value of issued capital, but capped at 12% per annum. The
assessed fair value of the derivative takes into account the expected cash flows incorporating the term (10 years) and discount rate used (12%).
Note 15
Financial Risk 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 related parties, bills, leases, and derivatives.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial
statements, are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
Financial assets at fair value through profit and loss
Derivative instruments
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables
Borrowings
Financial liabilities at fair value through profit and loss
Derivative instruments
Total Financial Liabilities
Financial risk management policies
Note
5
6
14
Note
10
11
14
2015
$'000
820
3,608
19
4,447
2015
$'000
2014
$'000
373
3,778
-
4,151
2014
$'000
2,545
5,294
2,791
5,848
2,138
9,977
1,922
10,561
The Board of Directors are responsible for managing financial risk policies and exposures of the Group.
relating to commodity price risk, counterparty credit risk, currency risk, liquidity risk and interest rate risk.
It also reviews the effectiveness of internal controls
The overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while minimising potential adverse effects on
financial performance. This includes the review of the use of hedging derivative instruments, credit risk policies and future cash flow requirements.
33
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 15
Financial Risk Management (continued)
Specific financial risk exposures and management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign
currency risk. There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies
and processes for managing or measuring the risks from the previous period.
(a)
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a
financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of
credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties),
ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing
receivables for impairment. Depending on the division within the Group, credit terms are generally 30 to 45 days from the invoice date.
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any collateral or other
security held is equivalent to the carrying amount 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.
Collateral held by the Group securing receivables is detailed in Note 6(d).
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. Details with respect to credit risk of Trade
and Other Receivables is provided in Note 6.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed at
Note 6.
Liquidity risk
(b)
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 cash flow analyses in relation to its operating, investing and financing activities;
• monitoring undrawn credit facilities;
• maintaining a reputable credit profile; and
• managing credit risk related to financial assets.
The following table details the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The table has been drawn up based
on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The table includes
both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the
statement of financial position.
Financial asset and financial liability maturity analysis
Financial Assets - cash flows realisable
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total anticipated inflows
Financial liabilities due for payment
Bank overdrafts and loans
Debt element of DSLN
Derivative element of DSLN
Trade and other payables
Amounts payable to related parties
Other financing liabilities
Finance lease liabilities
Derivative financial instruments
Total contractual outflows
Less bank overdrafts
Total expected outflows
Net (outflow) / inflow on financial
instruments
Within 1 Year
2015
$'000
2014
$'000
1 to 5 Years
2015
$'000
2014
$'000
Over 5 Years
2015
$'000
2014
$'000
820
3,608
19
4,447
1,851
-
-
2,545
-
81
116
-
4,593
(796)
3,797
373
3,778
-
4,151
1,013
-
-
2,791
69
86
149
13
4,121
(620)
3,501
-
-
-
-
2,336
-
-
-
-
-
106
-
2,442
-
2,442
-
-
-
-
3,735
-
-
-
-
-
213
-
3,948
-
3,948
-
-
-
-
-
2,370
4,991
-
-
-
-
-
7,361
-
7,361
-
-
-
-
-
2,370
4,991
-
-
-
-
-
7,361
-
7,361
Total
2015
$'000
820
3,608
19
4,447
4,187
2,370
4,991
2,545
-
81
222
-
14,396
(796)
13,600
2014
$'000
373
3,778
-
4,151
4,748
2,370
4,991
2,791
69
86
362
13
15,430
(620)
14,810
650
650
(2,442)
(3,948)
(7,361)
(7,361)
(9,153)
(10,659)
34
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 15
Financial Risk Management (continued)
Financial assets pledged as collateral
Certain financial assets have been pledged as security for debt and their realisation into cash may be restricted subject to terms and conditions attached to
the relevant debt contracts. Refer to Note 11(c) for further details.
In the above table, the derivative element of the DSLN has been shown at face value due to significant uncertainty regarding the capital appreciation, interest
and dividend-triggered entitlement, as disclosed in Note 11, within the terms and conditions of the instrument without consideration for future cash outflows
of interest.
(c)
Market risk
(i) Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future
change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
(ii) Foreign exchange risk
The board and senior management regularly monitor foreign currency movements and has undertaken to use hedging contracts where
appropriate to the value of up to 100% of its US dollar requirements over a maximum 6 month period.
Sensitivity analysis
As at the end of the reporting period, the group had the following variable rate borrowings:
Bank overdrafts and bank loans
2015
2014
Weighted
Average
Interest
Rate
8.16%
Balance % of Total Loans
40%
3,975
Weighted
Average
Interest
Rate
7.41%
Balance
4424
% of Total
Loans
42%
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity 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 other variables.
+/- 2% in interest rates
+/- 5% in $A/$US
Profit
2015
$'000
72
372
2014
$'000
82
299
Equity
2015
$'000
72
372
2014
$'000
82
299
There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying amounts as presented in
the statement of financial position. Refer to Note 16 for detailed disclosures regarding the fair value measurement of the Group’s financial assets and
financial liabilities.
Differences between fair values and carrying amounts of financial instruments with fixed interest rates are due to the change in discount rates being applied
by the market since their initial recognition by the Group. Most of these instruments, which are carried at amortised cost (i.e. term receivables, held-to-
maturity assets, loan liabilities), are to be held until maturity and therefore the fair value figures calculated bear little relevance to the Group.
Financial assets
Cash and cash equivalents
Trade and other receivables
- Non-related parties - trade and other receivables
Total trade and other receivables
Derivative liabilities
- Forward exchange contracts
Total financial assets
2015
Carrying
Amount
$'000
Fair Value
$'000
2014
Carrying
Amount
$'000
Fair Value
$'000
820
820
373
373
3,608
3,608
19
4,447
3,608
3,608
19
4,447
3,778
3,778
-
4,151
3,778
3,778
-
4,151
Note
5
6
14
35
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 15
Financial Risk Management (continued)
Financial liabilities
Trade and other payables
Hire purchase liabilities
Other financing liabilities
Derivative liabilities
- Forward exchange contracts
- Derivative element of DSLN
Other related parties
Bank overdraft
Bank loans
Debt element of DSLN
Total financial liabilities
Note 16
Fair Value Measurements
2015
Carrying
Amount
$'000
Fair Value
$'000
2014
Carrying
Amount
$'000
Fair Value
$'000
2,545
222
81
-
2,138
-
796
3,179
1,016
9,977
2,545
222
81
-
2,138
-
796
3,179
1,016
9,977
2,791
362
86
13
1,909
69
620
3,804
907
10,561
2,791
362
86
13
1,909
69
620
3,804
907
10,561
Note
10
11
11
14
14
11
11
11
11
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition:
-
Derivative financial instruments
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
(a)
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three
possible levels based on the lowest level input that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted)
in active markets for identical assets or liabilities that
the entity can access at the measurement date.
Level 2
Measurements based on inputs other than quoted prices
included in Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3
Measurements based on unobservable
inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of observable market data.
If all significant inputs required to measure fair value are observable, the
asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their
categorisation within the fair value hierarchy.
Note
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
30 June 2015
Recurring fair value measurements
Liabilities
Derivatives:
Derivative element of DSLN
Total liabilities recognised at fair value
30 June 2014
Recurring fair value measurements
Liabilities
Liabilities
Derivatives:
Forward exchange contracts
Derivative element of DSLN
Total liabilities recognised at fair value
14
14
14
-
-
-
-
-
2,138
2,138
13
1,909
1,922
-
-
-
-
-
2,138
2,138
13
1,909
1,922
There were no transfers between levels for assets or liabilities measured at fair value on a recurring basis during the reporting period (2014: no transfers).
(b)
Valuation techniques and inputs used to measure Level 2 fair values (continued)
The forward exchange derivative asset of $19,000 (2014: liability of $13,000) has been valued using Level 2 inputs by reference to quoted market prices in
active markets.
The derivative element of the DSLN of $2,138,000 (2014: $1,909,000) has been valued using Level 2 inputs which are included in the terms and conditions of
this instrument. Refer note 11(d) for main terms of the loan note.
36
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 16
(b)
Fair Value Measurements
Valuation techniques and inputs used to measure Level 2 fair values (continued)
Accordingly, the DSLN has been identified as containing two main components: the core debt and a derivative element capturing the capital appreciation
payment, interest and dividend-triggered entitlement. The core debt has been discounted by 12% to net present value over the expected term of the DSLN
(being 10 years) and is included in non-current borrowings. The assessed value of the derivative takes into account the expected cash flows incorporating the
term (10 years) and discount rate 12%.
There were no changes during the period in the valuation techniques used by the Group to determine Level 2 fair values.
Due to their short-term natures, the carrying amounts of current receivables, current trade and other payables and current interest bearing liabilities is
assumed to approximate their fair value.
Note 17
Cash Flow Information
(a)
Loss after income tax
Reconciliation of cash flow from operating activities with loss after income tax
Non-cash flows in profit
Depreciation and amortisation
Accrued interest charges
Other
Non-cash acquisitions of property, plant and equipment
Net (gain)/loss on disposal of property, plant and equipment
Realisation of foreign exchange movements on disposal of investments in associated companies
Net loss on disposal of investments in associate companies
Non-cash proceeds on disposal of investments in associated companies
Unrealised exchange gains/losses
Unwinding of discount on deferred senior loan note
Revaluation of deferred senior loan note to fair value through profit or loss
Share of associated companies' net profit after income tax and dividends
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and accruals
Decrease in income taxes payable
Increase in deferred taxes payable
Increase/(decrease) in provisions
Cash flow from operating activities
Note 18
Parent Information
2015
$'000
2014
$'000
(1,102)
(2,576)
1,361
(10)
1
(37)
36
-
-
-
29
109
229
-
165
906
(172)
86
20
(144)
1,477
1,168
27
1
(19)
(40)
1,445
(82)
823
49
97
205
(109)
(62)
(764)
409
(49)
33
101
657
The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting
Standards.
Statement of Financial Position
ASSETS
Current Assets
Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Accumulated Losses
General Reserve
TOTAL EQUITY
Statement of Profit or Loss and Other Comprehensive Income
Loss before tax
Total comprehensive loss
2015
$'000
2014
$'000
429
2,308
2,737
2,371
6,169
8,540
(5,803)
212
2,292
2,504
526
7,052
7,578
(5,074)
21,106
(26,928)
19
(5,803)
21,106
(26,167)
(13)
(5,074)
(764)
(732)
(271)
(279)
37
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 18
Parent Information (continued)
Loss for the year
The loss for the year for Oldfields Holdings Limited includes the write back of subsidiary loan accounts of $Nil (2014: $390,042) which are eliminated on
consolidation.
Guarantees
Oldfields Holdings Limited and it's Australian wholly-owned entities have entered into a deed of cross guarantee under which the company and its
subsidiaries guarantee the debts of each other.
Contingent liabilities
The parent entity did not have any contingent liabilities as at 30 June 2015 or 30 June 2014.
Contractual commitments
The parent entity did not have any contractual commitments as at 30 June 2015 or 30 June 2014.
Note 19
Interests in Subsidiaries
(a)
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of
ownership interests held equals the voting rights held by the Group. Each subsidiary’s principal place of business is also its country of incorporation.
Name of subsidiary
Subsidiaries of Oldfields Holdings Limited:
Oldfields Pty Limited
Oldfields Advance Scaffold Pty Limited
Oldfields Administration Pty Limited
Oldfields International Pty Limited
Advantage Contracting Pty Limited
Advantage Scaffolding Pty Limited
Shed Holdings Pty Limited
Advance Scaffold Solutions Pty Limited
NOST Investments Pty limited
Subsidiaries of Oldfields Pty Limited:
Midco Pty Limited
Subsidiaries of Oldfields Advance Scaffold Pty Limited:
Adelaide Scaffold Solutions Pty Limited
Subsidiaries of Oldfields Administration Pty Limited:
National Office Service Trust
Subsidiaries of NOST Investments Pty Limited:
H & O Products Pty Limited
Subsidiaries of Oldfields International Pty Limited:
Oldfields (NZ) Limited
Oldfields Paint Applications (NZ) Limited
Oldfields USA Incorporated
Scaffold Management Systems Pty Limited
Subsidiaries of Shed Holdings Pty Limited:
Backyard Installations Pty Limited
Sheds Plus (NSW) Pty Limited
Adelaide Garden Sheds Pty Limited
Subsidiaries of Advance Scaffold Solutions Pty Limited:
Scaffold The World Pty Limited
Foshan Advcorp Scaffold Limited
Principal
Place of
Business
Ownership Interest
2015
2014
%
%
Non-Controlling Interests
2015
%
2014
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Australia
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Australia
60%
60%
40%
40%
Australia
100%
100%
0%
0%
Australia
75%
75%
25%
25%
New Zealand
New Zealand
USA
Australia
Australia
Australia
Australia
Australia
China
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same reporting date as
the Group’s financial statements.
38
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 19
Interests in Subsidiaries (continued)
Summarised financial information of subsidiaries with material non-controlling interests
(b)
Set out below is the summarised financial information for Adelaide Scaffold Solutions Pty Ltd that has non-controlling interests that are material to the Group,
before any intra-group eliminations. The entity's principal place of business is 12 OG Road, Klemzig, South Australia.
Summarised financial position - material non-controlling interests
Current assets
Non-current assets
Current liabilities
Non-current liabilities
NET ASSETS
Carrying amount of non-controlling interests
Summarised financial performance
Revenue
Profit after tax
Other comprehensive income after tax
Total comprehensive income
Profit attributable to non-controlling interests
Distributions paid to non-controlling interests
Summarised cash flow information
Net cash from/(used in) operating activities
Net cash from /(used in) investing activities
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Note 20
Related Party Transactions
(a)
The ultimate parent entity that exercises control over the group is Oldfields Holdings Limited, which is incorporated in Australia.
Entities exercising control over the Group:
(b)
Interests in subsidiaries are set out in Note 19(a).
Subsidiaries
(c)
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Total KMP compensation
Detailed remuneration disclosures are provided in the remuneration report on pages 4 to 6.
(d)
Transactions with related parties:
The following transactions occurred with related parties:
Sales and purchases of goods and services
(i)
Purchases of paint application products by Oldfields Pty Ltd from Enduring Enterprises
(ii)
Other transactions
Interest paid to Sibley Investments Pty Ltd, being the holder of a minority interest in Adelaide Scaffold Solutions
Pty Ltd
Dividends paid to Sibley Investments Pty Ltd, being the holder of a minority interest in Adelaide Scaffold Solutions
Pty Ltd
2015
$'000
2014
$'000
1,009
1,833
(618)
(253)
1,971
785
1,825
(482)
(681)
1,447
556
439
4,287
3,797
674
-
674
270
153
446
(38)
(379)
29
347
-
347
139
149
434
(45)
(350)
39
2015
$'000
546
45
591
2014
$'000
590
47
637
2015
$'000
2014
$'000
-
1,187
7
20
153
149
39
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 20
Related Party Transactions (continued)
(e)
Loans to/from related parties
(i)
Loans from other related parties
Loan payable to Sibley Investments Pty Ltd, being the holder of a minority interest in Adelaide
Scaffold Solutions Pty Ltd
Beginning of the year
Loan repayments made
Interest charged
Interest paid
End of the year
Sibley Investments Pty Ltd have agreed that the balance of the loan will not be called in over the next 12 months.
Loan payable to Timms Realty, being a related party of William Lewis Timms (non-executive
Beginning of the year
Loans advanced
Loan repayments made
Interest charged
Interest paid
End of the year
2015
$'000
2014
$'000
69
(69)
7
(7)
-
-
-
-
-
-
-
144
(75)
20
(20)
69
-
200
(200)
2
(2)
-
There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been recognised in respect
of impaired receivables due from related parties.
(f)
Terms and conditions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
Note 21
Auditors’ Remuneration
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit
firms:
(a) BDO East Coast Partnership Australia
Auditing or reviewing the financial report
Taxation services
Other services
Total remuneration of BDO East Coast Partnership Australia
(b) Network firms of BDO East Coast Partnership Australia
Auditing or reviewing the financial statements of subsidiaries
Taxation services
Total remuneration of network firms of BDO East Coast Partnership Australia
(c) Non BDO East Coast Partnership audit firms
Auditing or reviewing the financial statements of subsidiaries
Total remuneration of non-BDO East Coast Partnership audit firms
Total auditors’ remuneration
Note 22
Segment Information
General Information
Identification of reportable segments
2015
$'000
132
12
2
146
9
-
9
2
2
157
2014
$'000
133
12
7
152
10
1
11
3
3
166
The Group has identified its operating segments based on the internal reports that are reviewed and used by Chief Operating Decision Maker (CODM), being
the Board of Directors, in assessing performance and in determining the allocation of resources.
The Group is managed primarily on the basis of product category and service offerings as the diversification of the Group's operations inherently have notably
different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.
40
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 22
Segment Information (continued)
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics
and are also similar with respect to the following:
-
-
-
-
-
The products sold and/or services provided by the segment;
The manufacturing process;
The type or class of customer for the products or service;
The distribution method; and
Any external regulatory requirements.
Types of products and services by segment
(i)
Consumer products
The consumer products segment imports, manufactures and markets paint brushes, paint rollers, painters tools, garden sheds and outdoor
storage systems.
(ii)
Scaffolding
The scaffolding segment manufactures and markets scaffolding and related equipment.
scaffolding related products to the building and construction industry.
In addition, this segment is engaged in hiring
Basis of accounting for purposes of reporting by operating segments
(a)
(b)
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to operating
segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of
the Group.
Inter-segment transactions
All inter-segment transactions are eliminated on consolidation of the Group's financial statements.
Corporate charges are allocated to reporting segments based on the segment's overall proportion of revenue generation within the Group. The
Board of Directors believes this is representative of likely consumption of head office expenditure that should be used in assessing segment
performance and cost recoveries.
Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If
intersegment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.
This policy represents a departure from that applied to the statutory financial statements.
(c)
Adjusted EBITDA
Adjusted EBITDA excludes discontinued operations and the effects of individually significant expenditure, such as restructuring costs, legal
expenses, and impairments when the impairment is the result of an isolated, non-recurring event. It also excludes the effects of equity-settled
share-based payments, when applicable and unrealised gains or losses on financial instruments.
Interest revenue and finance cost are not allocated to segments, as this type of activity is driven by the central treasury function, which
manages the cash position of the group.
(d)
(e)
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value from
the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment.
Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade
and other payables and certain direct borrowings.
(f)
Segment information
Operating Segments
(i) Operating segment performance
2015
Revenue
Sales Revenue
Other revenue
Total segment revenue
Consumer
Products Scaffolding
$'000
$'000
Intersegment
Eliminations/
Unallocated
Total
$'000
10,353
2
10,355
17,065
5
17,070
(38)
-
(38)
27,380
7
27,387
41
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 22
Segment Information (continued)
2015
Adjusted segment EBITDA
Depreciation and amortisation expense
Impairment of goodwill
Net loss on revaluation of DSLN at FVTPL
Finance costs
Unrealised (gain)/loss FX
Profit before income tax
Income tax expense
Profit after income tax
2014
Revenue
Sales Revenue
Other revenue
Total segment revenue
Adjusted segment EBITDA
Depreciation and amortisation expense
Net loss on revaluation of DSLN at FVTPL
Finance costs
Profit before income tax
Income tax expense
Profit after income tax
(ii) Operating segment assets and liabilities
30 June 2015
Segment assets
Segment liabilities
Segment net assets
30 June 2014
Segment assets
Segment liabilities
Segment net assets
Note 23
Dividends
Consumer
Products Scaffolding
$'000
$'000
Intersegment
Eliminations/
Unallocated
(784)
(166)
(141)
-
-
-
(1,091)
-
(1,091)
2,066
(1,120)
-
-
-
-
946
(234)
712
11,499
21
11,520
15,796
9
15,805
(596)
(260)
-
-
(856)
-
(856)
1,278
(826)
-
-
452
(147)
305
24
(75)
-
(229)
(482)
(19)
(723)
-
(723)
(64)
-
(64)
(1,253)
(82)
(205)
(485)
(2,025)
-
(2,025)
Total
$'000
1,364
(1,361)
(141)
(229)
(482)
(19)
(868)
(234)
(1,102)
27,231
30
27,261
(571)
(1,168)
(205)
(485)
(2,429)
(147)
(2,576)
Consumer
Products Scaffolding
$'000
$'000
Intersegment
Eliminations/
Unallocated
Total
$'000
5,595
(2,306)
3,289
6,134
(1,754)
4,380
12,761
(1,280)
11,481
12,062
(1,210)
10,852
(2,264)
(7,615)
(9,879)
16,092
(11,201)
4,891
(381)
(8,809)
(9,190)
17,815
(11,773)
6,042
Dividends paid or provided for
Since the start of the financial year, no dividends have been paid or declared by the parent entity.
Franking account balance
The amount of the franking credits available for subsequent reporting periods are:
Balance at the end of the reporting period
Franking credits that will arise from the payment of the amount of provision for income tax
Franking debits that will arise from the refund of the amount of income tax receivables
Franking credits available for subsequent reporting periods based on a tax rate of 30% (2014: 30%)
(a)
(b)
(c)
Parent Entity
2015
$'000
846
12
-
858
2014
$'000
809
-
(27)
782
During the year, fully franked dividends were paid by Adelaide Scaffold Solutions Pty Limited (subsidiary of Oldfields Holdings Limited) to Sibley
Investments Pty Limited, being the minority interest holder in the entity. Total dividends paid for the year were $153,000 (2014: $149,000).
42
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 24
Earnings per Share
(a)
(b)
Reconciliation of earnings to profit or loss
(Loss) profit for the year
Profit attributable to non-controlling equity interest
Earnings used to calculate basic EPS
2015
$'000
(1,102)
(270)
(1,372)
2015
No.
2014
$'000
(2,576)
(139)
(2,715)
2014
No.
Weighted average number of ordinary shares outstanding during the year used in calculating basic
EPS
82,176,198
82,176,198
Note 25
Issued Capital
Fully paid ordinary shares 82,176,198 (2014: 82,176,198)
The company has authorised share capital amounting to 82,176,198 ordinary shares.
(a)
At the end of the reporting period
Ordinary shares
(b)
Capital Management
2015
$'000
21,106
2014
$'000
21,106
2015
No.
2014
No.
82,176,198
82,176,198
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder value and ensure that
the Group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
The Group is subject to financing covenants as detailed in Note 11.
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.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. This strategy is to identify
opportunities to reduce the Group's gearing ratio. The gearing ratios for the year ended 30 June 2015 and 30 June 2014 are as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note
11
5
2015
$'000
5,294
(820)
4,474
4,891
9,365
2014
$'000
5,848
(373)
5,475
6,042
11,517
47.8%
47.5%
43
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 26
Reserves
The following table shows a breakdown of the statement of financial position line item ‘other reserves’ and the movements in these reserves during the year.
A description of the nature and purpose of each reserve is provided below the table.
Cash Flow
Hedge
$'000
Foreign
Currency
Translation
$'000
30 June 2014
As at 1 July 2013
Revaluation - gross
Deferred tax
Currency translation differences - Current period
Other comprehensive income
Transactions with owners in their capacity as owners
-
Disposal of associates companies
As at 30 June 2014
30 June 2015
As at 1 July 2014
Revaluation - gross
Deferred tax
Currency translation differences - Current period
Other comprehensive income
As at 30 June 2015
Nature and purpose of other reserves
(i) Cash flow hedge reserve
(6)
(11)
3
-
(8)
-
(14)
(14)
47
(14)
-
33
19
The cash flow hedge reserve records revaluations of items designated as cash flow hedges.
(ii) Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
Note 27
Accumulated Losses
Movements in accumulated losses were as follows:
Opening balance at 1 July
Net loss for the year
Dividends paid
Closing balance at 30 June
Accumulated losses attributable to:
Members of the parent entity
Non-controlling interest
Total accumulated losses as at 30 June
Dividends paid to the minority interest holder in a subsidiary entity is detailed in Note 23(c).
Note 28
Commitments
(a)
The Group does not have any capital expenditure commitments at reporting date.
Capital Commitments
(b)
Lease Commitments
Finance Lease Commitments
(i)
Payable — minimum lease payments
Within one year
Later than one year but not later than five years
Later than five years
-
-
-
Minimum lease payments
Less future finance charges
Present value of minimum lease payments
Total
$'000
(1,242)
(11)
3
(235)
(243)
(1,236)
-
-
(235)
(235)
1,445
(26)
1,445
(40)
(26)
-
-
71
71
45
(40)
47
(14)
71
104
64
2015
$'000
2014
$'000
(15,024)
(1,102)
(153)
(16,279)
(12,299)
(2,576)
(149)
(15,024)
(16,835)
556
(16,279)
(15,463)
439
(15,024)
Note
11
2015
$'000
132
117
-
249
(27)
222
2014
$'000
180
234
-
414
(52)
362
Included in finance lease commitments are hire purchase liabilities that are secured by a charge over the hire purchase assets.
44
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 28
Commitments (continued)
(ii)
Non-Cancellable Operating Lease Commitments
The property leases are non-cancellable leases with 1-5 year terms, with rent payable monthly in advance. Contingent rental provisions within the lease
agreement require that minimum lease payments shall be increased by the lower of the change in the consumer price index or 3-5% per annum. Options
exist to renew certain leases at the end of the term for an additional term of 1-5 years. On renewal, the terms of the leases are renegotiated.
Commitments for minimum lease payments in relation to noncancellable operating leases are payable as follows:
-
-
Within one year
Later than one year but not later than five years
Total operating lease commitments
Note 29
Contingent Liabilities and Contingent Assets
The Group does not have any significant contingent liabilities or contingent assets as 30 June 2015 or 30 June 2014.
Note 30
Events After the Reporting Period
There have been no significant events occurring since 30 June 2015.
2015
$'000
2014
$'000
1,188
1,815
3,003
1,179
2,326
3,505
45
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of Oldfields Holdings Limited, the directors of the company declare that:
1.
2.
3.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
(a)
comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes
compliance with International Financial Reporting Standards (IFRS); and
(b)
give a true and fair view of the financial position as at 30 June 2015 and of the performance for the year ended on that date of the
consolidated group;
in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
the directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief
Financial Officer.
Oldfields Holdings Limited and its Australian wholly-owned entities have entered into a deed of cross guarantee under which the company and it's
subsidiaries guarantee the debts of each other.
At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be able to
meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed.
Director
Tony Joseph Grima
Dated this
31-August-2015
46
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Oldfields Holdings Limited
Report on the Financial Report
We have audited the accompanying financial report of Oldfields Holdings Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
47
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Oldfields Holdings Limited, would be in the same terms if given to
the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Oldfields Holdings Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 6 of the directors’ report for the year
ended 30 June 2015. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Oldfields Holdings Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Paul Bull
Partner
Sydney, 31 August 2015
48
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Oldfields Holdings Limited is committed to high standards of corporate governance and adopts wherever
possible the principles outlined in the Corporate Governance Principles and Best Practice Recommendations, 3rd Edition published by
the ASX Corporate Governance Council in March 2014.
The recommendations are written in a principles based fashion and individual boards are able to choose whether to follow the
recommended practices or to adopt other practices that are better suited to the individual circumstances of the Group. Given the
size and specific circumstances of Oldfields Holdings Limited the Board recognises that some of the best practice recommendations
are not suited to obtaining the best shareholder outcomes at the present time. This situation is monitored by the Board and the
recommendations will be adopted as and when the Group’s circumstances allow.
All relevant best practice recommendations of the ASX Corporate Governance Council have been applied for the financial year ended
30 June 2015 unless specifically disclosed below. Where a recommended practice has not been followed a detailed description of
the practices adopted is provided together with a commentary on how the risks of non-adoption of the recommended practice are
mitigated.
Recommendation
Recommended Practice
Oldfields’ Practice
Recommendation 1.1
Recommendation 1.2
Recommendation 1.3
Recommendation 1.4
Recommendation 1.5
Recommendation 1.6
Recommendation 1.7
Recommendation 2.1
Recommendation 2.2
Recommendation 2.3
Recommendation 2.4
Recommendation 2.5
Recommendation 2.6
Recommendation 3.1
Recommendation 4.1
Recommendation 4.2
Recommendation 4.3
Recommendation 5.1
Recommendation 6.1
Recommendation 6.2
Establish functions reserved for the board and for
senior management.
Undertake appropriate checks prior to appointing as
Director
Written agreements in place with Directors and
senior executives
Company Secretary accountable to board through
the chair
Have a measurable diversity policy
Establish a process for evaluating performance of the
board
Have a process
performance of senior executives
The board should have a nomination committee
for periodically evaluating
independent
Have a board skills matrix
Have a list of directors who are deemed to be
independent
Majority of the board should be
directors
The chair of the board should be independent and
not the CEO
Have a program for inducting new directors
Establish and disclose a code of conduct
The board should establish an audit committee
Prior to approving financial statements the board
receive from the CFO and CEO declaration of
properly maintained records and compliance with
accounting standards
External auditor attends AGM
Establish written policies designed
to ensure
compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a
senior executive
level for that compliance and
disclose those policies or a summary of those
policies.
Provide information about itself and its governance
via its website.
Design and implement investor relations program for
49
The recommended practice is adopted
The recommended practice is adopted
The recommended practice is adopted
The recommended practice is adopted
is partially
to
recommended practice
refer below
The
adopted,
recommendation
This recommendation has not yet been
adopted
The recommended practice is adopted
for variation
Nominations are considered by the whole
board
The recommended practice is adopted
The recommended practice is adopted
The majority of the Board is not independent
and the risk management process is disclosed
The chair is not an independent director, but is
independent of the CEO
The recommended practice is adopted
The recommended practice is adopted
The recommended practice is adopted
The recommended practice is adopted
The recommended practice is adopted
The recommended practice is adopted. The
policy is disclosed
The recommended practice is adopted. The
policy is disclosed
The recommended practice is adopted
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
Recommendation
Recommended Practice
Oldfields’ Practice
Recommendation 6.3
Recommendation 6.4
Recommendation 7.1
Recommendation 7.2
Recommendation 7.3
Recommendation 7.4
Recommendation 8.1
to
receive
security holders option
communication with investors
Policies and processes in place to encourage security
holder participation
Provide
communication electronically
Establish policies for the oversight and management
of material business risks and disclose a summary of
those policies
Board to review risk management
annually
Disclosure of internal audit function
Disclose material
environmental and social sustainability risks
The board
committee
should establish a
remuneration
framework
economic,
exposure
to
Recommendation 8.2
Recommendation 8.3
Disclosure of policies and practices of remuneration
of non-executive and executive directors.
Policy on equity based remuneration scheme
The recommended practice is adopted
This recommended practice is adopted
The recommended practice is adopted. The
Risk Management Statement is disclosed
The recommended practice is adopted
The recommended practice is adopted
The indicated information is provided
recommended practice
is adopted,
it does not have a majority of
The
however
independent directors
The recommended practice is adopted
based
equity
No
place,
recommendation will be adopted when
implemented
scheme
in
Up-to-date information is available on the Group’s website which contains a clearly marked corporate governance section.
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
Principle 1. LAY SOLID FOUNDATIONS FOR MANAGEMENT & OVERSIGHT
Recommendation 1.1 – Establish functions reserved for the board and for senior management and disclose those functions.
The Board of Directors is accountable to the shareholders for the performance of the Group. The board sets the strategic direction
and delegate’s responsibility for the management of the Group to the chief executive officer.
A copy of the Board Charter, which promotes a culture within the Group of accountability, integrity and transparency, is available
from the Group’s website.
Each board member must, at all times, act honestly, fairly and diligently in all respects in accordance with the Group’s Code of
Conduct and all laws that apply to the Group.
Key matters reserved for the board include:
Oversight of the Group, including its control, accountability and compliance systems;
Appointment, monitoring, managing performance and if necessary removal of the chief executive officer, chief financial
officer and company secretary;
Input, assessment, appraisal and final approval of management’s development of corporate strategy and performance
objectives;
Monitoring risk management;
Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures;
Approval and monitoring financial and other reporting;
Ensuring the market and shareholders are fully informed of material developments; and
Recognising the legitimate interests of stakeholders.
The expectations of directors are outlined in a formal Letter of Appointment which details the term of appointment, fees, power and
duties and other information pertinent to their roles.
Responsibility for the day-to-day management of the Group and its operations is delegated to senior executive management. The
expectations of senior executive management are outlined in Board decisions which are communicated to the chief executive officer
and recorded in the board minutes and also in the position descriptions and KPI’s for each senior executive role.
The board holds a minimum of six formal meetings a year, but usually ten. Additional meetings are held as required.
Details of current members of the board are disclosed in the Directors’ Report.
Recommendation 1.2 – Undertake appropriate checks before appointing or putting forward to security holders a candidate for
election as a director
Details are provided on a candidate for Director. These will be provided to security holders prior to any election of new Directors.
Recommendation 1.3 – Written agreements in place with Directors and senior executives
Detailed service contracts are in place for all senior managers and Directors, these are established prior to commencement of
employment
Recommendation 1.4 – Company Secretary accountable to the board through the chair
The CFO/Company Secretary has clear lines of accountability with the CFO responsibilities reporting directly through to the CEO and
all company secretarial functions reporting through to the chair.
Recommendation 1.5 – Measurable diversity policy
A detailed diversity policy is in place, and available on the company’s webpage. In addition to this, the company’s workplace gender
equality report for 2013, 2014 and 2015 are available to view. Whilst the policy diverges from some of the recommendations made,
key areas in the recommendation are included in the policy, including the requirement that for all jobs advertised, it is stated that
the company is an equal opportunity employer, that at least one female applicant is included in the final shortlist of candidates for
the role, and shortlisted candidates are interviewed by a female as well as a male member of staff prior to a final decision on
employment.
Specific targets of women in senior positions within the organization have not been set, as the company will select the best
person for the role.
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OLDFIELDS HOLDINGS LIMITED
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Recommendation 1.6 – Process for evaluation of the performance of the board
The board has not completed a formal evaluation process within the period. The chairman performs an informal evaluation of
individual directors and also of each board meeting. The board will be considering obtaining independent advice during the next
financial year.
Recommendation 1.7 – Have a process for periodically evaluating the performance of senior management
Senior executive management is evaluated each year on their performance against stated objectives, goals and key performance
indicators (KPI’s).
Overall performance is reviewed by the particular senior executive’s direct supervisor and ultimately by the chief executive officer
and/or board of directors.
Principle 2. STRUCTURE THE BOARD TO ADD VALUE
The board currently has three directors, comprising two non-executive directors, including the chairman, and one executive director.
The board has adopted the following principles:
The same individual should not exercise the roles of chairman and chief executive officer;
The board should not comprise a majority of executive directors; and
The board should comprise persons with a broad range of skills and experience appropriate to the needs of the Group.
Recommendation 2.1 – The board should have a nomination committee
Nominations are considered by the board as a whole, and are only accepted if the candidate has the relevant skills required to assist
the business in achieving its strategic objectives. Given the size and requirements of the Group, the board has decided that a
nomination committee is not required at this point in time.
Recommendation 2.2 – Have a board skills matrix
This has been established.
Recommendation 2.3 – Have a list of directors that are deemed to be independent
The company has one independent director and this is disclosed in the annual report.
Recommendation 2.4 – Majority of the board should be independent directors.
Independent directors are those who are independent of management and free of any business or other relationship that could
materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and
independent judgment.
In assessing the independence of directors, an independent director is a non-executive director and:
Is not a substantial shareholder, as defined in section 9 of the Corporations Act, of the Group or an officer of, or otherwise
associated directly with, a substantial shareholder of the Group;
Has not within the last three years been employed in an executive capacity by the Group or another group member, and
there has been a period of at least three years between ceasing such employment and serving on the board;
Has not within the last three years been a principal of a material professional advisor or a material consultant to the Group
or another group member, or an employee materially associated with the service provided; and
Is not a material supplier or customer of the Group or other group member, or an officer of or otherwise associated directly
or indirectly with a material supplier or customer;
At the date of this report there was one independent director.
The following directors do not meet the independence criteria listed above:
William Lewis Timms: appointed 18th December 2009, currently a non-executive director and substantial shareholder;
Tony Joseph Grima: appointed 14 October 2013, currently an executive director and shareholder; and
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OLDFIELDS HOLDINGS LIMITED
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The board manages the risk of having a majority of non-independent directors through restrictions on trading in shares, restrictions
on related party transactions, and a close relationship with the principal provider of debt funding and a strong independent auditor
with a focus on controls.
Recommendation 2.5 – The chair of the board should be independent and not the CEO
Due to the size and nature of the business, this recommendation has not been adopted. The chair is a significant shareholder,
however the recommendation of the chair not being the CEO is in place.
Recommendation 2.6 – Have a program for inducting new directors and ensuring appropriate professional development
opportunities to develop and maintain the skills required to perform their role as directors.
There is an appropriate level of induction for new directors ensuring they understand the business needs and requirements. The
board discusses from time to time requirements to ensure continuous development of skills for the performance of their role as
director.
Principle 3. PROMOTE ETHICAL AND RESPONSIBLE DECISION – MAKING
Recommendation 3.1 – Establish and disclose a Code of Conduct and disclose the code or a summary of the code as to the practices
necessary to maintain confidence in the company’s integrity, the practices necessary to take into account their legal obligations and
the reasonable expectations of their stakeholders and the responsibility and accountability of individuals for reporting and investigat-
ing reports of unethical practices.
The board has a code of conduct for directors and Group officers and employees. The key elements of the code are:
Conflicts of interest;
Corporate opportunities;
Confidentiality;
Fair dealing;
Protection of assets;
Compliance with laws and regulations; and
Promotion of ethical and lawful behavior.
The policy is available on the company’s webpage.
Principle 4. SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
The chief executive officer and the chief financial officer state, in writing, to the board that the Group’s financial reports present a
true and fair view, in all material respects, of the Group’s financial position and operational results and are in accordance with
relevant accounting standards.
Recommendation 4.1 – the board should establish an audit committee.
The board has an audit committee, which:
Has two members who are non-executive directors;
Has a written charter which can be obtained from the Corporate Governance section of the Group’s website; and
Includes members who are all financially literate.
Details of the members are disclosed in the Director’s Report.
The board recognises that an independent audit committee is an important feature of good corporate governance.
The audit committee:
consists only of non-executive directors, however all directors are entitled to receive the papers of the committee and to
attend meetings of the committee and to meet with the auditors;
is chaired by an independent chairman, who is not chair of the board;
has two members. Given the size and structure of the board, as discussed in Recommendation 2.1, the board feels that two
members both of whom are financially literate, is sufficient at this time.
The risk with a small committee is that the members will lack the diversity to raise and recognise issues. Risk is managed through
specific working arrangements with the auditors having access to the full board at any time upon their request and through ensuring
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
that the chairman of the audit committee is a well-qualified independent director. It is intended to review this arrangement and
adopt the recommended practice if and when the board composition changes.
The audit committee has a formal charter, the key elements of the charter are:
Role of the committee;
Membership;
Meetings;
Responsibilities;
Authority;
Independence; and
Non-audit work.
The board and audit committee closely monitor the independence of the external auditor. The audit committee meets a minimum of
twice a year. The committee also meets in private, with management without the external auditor and, at a separate time, with the
external auditor without management.
Recommendation 4.2 – Prior to approving financial statements the board receive from the CFO and CEO a declaration of properly
maintained records and compliance with accounting standards.
The chief executive officer and the chief financial officer state, in writing, to the board that the Group’s financial reports present a
true and fair view, in all material respects, of the Group’s financial position and operational results and are in accordance with
relevant accounting standards.
The members of the audit committee are:
Stephen Charles Hooper; and
William Lewis Timms (Chairman).
The details of the qualifications of the audit committee members are disclosed in the Directors’ Report.
The details of the number of audit committee meetings held are contained in the Directors’ Report.
Departures from recommendations included in Principle 4 have been disclosed in the discussion of the relevant recommendations.
Recommendation 4.3 – External auditor attends AGM
The lead partner from the company’s auditors always attends the company’s AGM.
Principle 5. MAKE TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1 – Establish policy on ASX Listing Rule disclosure requirements and ensure accountability at a senior executive
level for that compliance and disclose those policies or a summary of those policies.
The Group has established procedures to ensure compliance with ASX Listing Rules which require that when an entity becomes
aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the
entity’s securities, the entity must immediately tell ASX that information.
A Continuous Disclosure Policy and Procedure has been prepared and is available from the Corporate Governance section of the
Group’s website.
Principle 6. RESPECT THE RIGHTS OF SHAREHOLDERS
Recommendation 6.1 –Provide information about itself and its governance via its website.
The company has a comprehensive website for security holders, included in this website are full governance policies.
Recommendation 6.2: Design and implement investor relations program for communications with investors.
The Group has developed and implemented a shareholder communication strategy. The Group promotes effective communication
with shareholders and encourages effective participation at the Group’s general meetings.
Shareholders and other parties will be able to access the following information from the Group’s website:
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
Copies of all announcements given to the ASX;
Press releases and copies of letters to shareholders;
Copies of annual and half year financial reports; and
Details of notices of shareholders meetings including information on general meetings.
The requirements of continuous disclosure ensure that the Group discloses relevant information to the shareholders and the market
in a timely and full manner.
The Shareholder Communication Strategy is available on the Oldfields website.
Recommendation 6.3 – Disclose policies and processes in place to encourage shareholder meeting participation
Security holders who are unable to attend meetings are given the opportunity in shareholder communications to ask questions of
the directors and responses are provided to them.
Recommendation 6.4 – Provide security holders the option to receive communications electronically.
The company’s share registry provider provides this option to all security holders.
Principle 7. RECOGNISE AND MANAGE RISK
Recommendation 7.1 – Companies should establish policies for the oversight and management of material business risks and
disclose a summary of those policies.
The board recognises that there are a number of complex operational, commercial, financial and legal risks and has in place
procedures to safeguard the Group’s assets and interests.
A Work Health and Safety Committee has been established to monitor and recommend changes to safe working practices and a safe
working environment. The chairman is not a director, and the committee comprises the managing director, senior executive officers
and employee representatives.
The board has developed a risk management policy the purpose of which is:
Identify, access, monitor and manage risk;
Inform investors of material changes to the Group’s risk profile;
Enhance the environment for capitalising on value creation opportunities;
Ensure compliance with the Corporations Act;
Consider the reasonable expectations of its stakeholders;
The measures and procedures in place to comply with these regulations; and
How compliance with those measures and procedures will be monitored.
A summary of these policies is contained in the Risk Management Statement which is disclosed on the Oldfields website.
Recommendation 7.2 – The board should review the risk management framework annually.
The Group’s risk management policy is designed and implemented by the board of directors’ which meet regularly to identify all
major risks, ensure appropriate risk management plans are in place and to monitor the effectiveness of the implementation of the
risk management plans.
The chief executive officer and the chief financial officer are required to state in writing to the board that the Group’s risk
management and internal compliance and control system is operating effectively and efficiently in all material aspects.
Recommendation 7.3 – The board should disclose whether it has an internal audit function, how the function is structured and what
role it performs.
From time to time, the board will outsource the internal audit function to a company that specializes in this work. The company will
review certain areas of controls and compliance and report back to the CEO/CFO and manager of the area. This report when
finalized with comments from management along with timelines for compliance are provided to the board for review.
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OLDFIELDS HOLDINGS LIMITED
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Recommendation 7.4 - Disclose material exposure to material exposure to economic, environmental and social sustainability risk.
The business is exposed to various risks, in particular economic and social sustainability risk. The board is fully aware of these and
these risks are mitigated wherever possible. In terms of social sustainability risk, the company is a party to the packaging covenant
agreement and always reviews product packaging for sustainability and recyclability.
Principle 8. REMUNERATE FAIRLY AND RESPONSIBLY
Recommendation 8.1 – The board should establish a remuneration committee.
The board has established a remuneration committee. The remuneration committee is responsible for developing and
recommending to the board:
Remuneration policies for non-executive directors;
Remuneration policies for the chief executive officer and chief financial officer;
Remuneration policies for executive management;
All aspects of any executive share option or acquisition scheme;
Superannuation policies;
Policies which motivate senior executives to pursue the long term growth and success of the Group; and
Policies which show a clear relationship between senior executives’ performance and remuneration.
The board has a remuneration committee which has two members and a documented charter. The members and qualification of
the remuneration committee are disclosed in the Directors’ Report.
Due to the size and nature of the board as discussed in recommendation 2.4 the following items of recommendation are not
followed:
consists of a majority of independent directors; and
has at least three members.
The remuneration of non-executive directors is by way of director’s fees in the form of cash, non-cash benefits and superannuation
benefits.
The total annual remuneration paid to non-executive directors may not exceed the limit set by shareholders at the annual general
meeting.
Non-executive directors do not receive options unless approved by shareholders.
Recommendation 8.2 - Disclosure of policies and practices of remuneration of non-executive and executive directors..
The Group has clearly differentiated the remuneration structure of executive and non-executive directors. The key elements of the
remuneration philosophy are disclosed in the Remuneration Committee Charter which is available on the Oldfields website.
Recommendation 8.3: Policy on equity based remuneration scheme.
The company currently does not have an equity based remuneration scheme. Prior to one being implemented and approved by
security holders a policy will be established for security holders to review.
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RISK MANAGEMENT STATEMENT
1.
Introduction
This statement provides an overview of the Group's risk management policies and internal compliance and control systems in
accordance with Principle 7 of the ASX Principles of Good Corporate Governance.
2. Responsibility
The Board of Directors are responsible for oversight on a regular basis of the Group's procedures and risk management policies. The
responsibility of the board is codified under the Board Charter, which is available on the Group’s website. The Group also has an
audit committee, the responsibilities of which are documented in the Audit Committee Charter which is also available on the
Group’s website.
3. Risk Management Monitoring
The board has implemented a combination of internal policies and procedures and use of external audits to monitor risk
management and its effectiveness.
3.1. Standard Operating Procedures (SOP's)
The board has implemented risk management policies covering areas of business risk such as:
Work health and safety;
Finance and treasury;
Human resources;
Asset protection (insurance); and
Codes of conduct.
The policies referred to are regularly reviewed and an internal mechanism exists whereby the board and committee members have
access to these reports on an internal intranet site. The board manages these risks appropriately with reference to identification,
implementation and review of these risks and procedures.
3.2. External Audits
The external audit of the Group is conducted annually. There is also a formal review at least once every year. Both the audit and
review are conducted by an external auditor.
The Group has a Work Health and Safety Committee which has received training and certification by external OH&S providers.
The Group engages with qualified external advisors annually in relation to asset protection. Where possible the board adopts the
most practical and affordable insurance policies suitable to protect major assets of the Group.
In general an external qualified auditor and or valuers are engaged by the board in determining large asset values on acquisition of
assets. An external valuation is obtained to determine and verify carrying values of investment property by an external
independent registered property valuer at least every three years.
3.3. Risk Management Statements
The integrity of the Group's financial reports relies on sound business and risk control systems.
Annually, the chief executive officer (CEO) and the chief financial officer (CFO) are required to sign a Risk Management Statement
that is provided to the audit committee in writing.
The CEO and CFO sign a statement regarding the adequacy of financial controls in accordance with section 295a of the Corporations
Act 2001.
The board requires management to report on the key business risks for each area of the business at each board meeting.
3.4 Internal Audit
Given the Group's size, an internal auditor is not practical. In addition, the presence of an executive director on the board allows for
detailed oversight of risks within each business by managers who are familiar with the risk environment but not directly involved in
the management of that particular business. In addition to this the company from time to time will utilise the services of an internal
auditing company to provide oversight of certain aspects of the business.
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3.5 External Covenants
The Group has voluntarily associated itself with the following self-regulated authorities:
WGE (Workplace Gender Equality Act): The Group reports annually on targets and policy to an external agency in regards to
Equal Opportunity Guidelines and Policy within the work force. The board receives and reviews this annually; and
Australian Packaging Covenant: The Group sets targets to reduce packaging waste and environmental impact of packaging
waste. Targets are set and guidelines adopted and where possible administered by management. The board reviews these
targets annually.
The Group has also entered into an agreement with its principal lender (Westpac Banking Corporation) which provides external
overview of financial risks by a representative of the bank.
4. Formal Risk Management Practices
The Group operates a formal process for risk management which includes:
Risk identification;
Risk analysis;
Risk evaluation;
Risk mitigation;
Risk monitoring and reporting; and
Risk communication.
The risk management process meets appropriate professional standards and is reviewed annually by the board of directors. The
process meets, but is not limited to the requirements of Principle 7 of the ASX Principles for Good Corporate Governance.
5. Risk Reporting and Communication
Risks are reported and their monitoring and management are communicated in accordance with the diagram below:
Material Risks
General Reporting
Accountabilities
Direct risk response or accept material
risk
Review and approve
strategies or accept risk
risk mitigation
Oversight of framework and sufficiency of
reporting
Board of Directors
Implement risk response or escalate to
Board of Directors
Review and approve risk reporting and
mitigation strategies
Oversight of corporate risks and adequacy
of framework
Chief Executive Officer (CEO)
Recommend material risk escalation to
CEO or board of directors
Consolidate risk assessments and prepare
summary reporting
Implement and monitor ERM framework
and ERM system
Chief Financial Officer (CFO)
Identify and report material risks as they
arise
Prepare risk assessments in accordance
with ERM framework
Operationally manage risks and escalate
issues
Finance Department
Communication
Effective risk management is reliant on the timely and open communication of actual or potential risk events across the
organisation. Free and frank communication is at the heart of the Group's risk management approach, and where the processes and
accountabilities described in these standards may not support a suitably rapid response to any risk, then communication should be
undertaken using whatever means to achieve the best outcome for the Group.
For the avoidance of doubt, Oldfields Holdings Limited has a whistleblower policy in place and encourages all staff to report risks of
which they are aware.
58
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
SHAREHOLDER INFORMATION
The shareholder information set below was applicable as at 26 August 2015.
(a) Distribution of Equitable Securities
Analysis of numbers of equity security holders by size of holding:
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Holdings less than a marketable parcel
(b)
Substantial Shareholders
Substantial holders (5% or more) in the company are set out below:
Shareholder
Mr Williams Lewis Timms & Mrs Carolyn Jane Timms
Lymgrange Pty Limited
(c)
Equity Security Holders
The names of twenty largest quoted equity security holders are listed below:
Mr Williams Lewis Timms & Mrs Carolyn Jane Timms
Lymgrange Pty Limited
Dixson Trust Pty Limited
Copy That Pty Ltd / Mr Rodney Boyce Hass SF A/C
Ufba Pty Ltd
Benger Superannuation Pty Limited / Benger Super Fund A/C
Starball Pty Ltd
Luton Pty Ltd
Dr Gordon Bradley Elkington
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. Mr Warwick Every-Burns & Mrs Kathryn Every-Burns / Wake Super Fund A/C
11. Oceanridge Limited
12. Mr Paul John Simpson
13. Mr Brian Garfield Benger
14. Myall Resources Pty Ltd / Myall Group Super Fund A/C
Shandora One Pty Ltd / Benger Super Fund A/C
15.
The Genuine Snake Oil Company Pty Ltd / Morson Group Super Fund A/C
16.
17.
Vivre Investments Pty Ltd
18. Mrs Antionette Giles
19. Man Investments (NSW) Pty Ltd / AMC Super Fund A/C
20.
Toveken Properties Pty Ltd
Ordinary Shares
Shares
Options
66
77
24
74
43
284
185
-
-
-
-
-
-
-
Ordinary Shares
Number Held
Percentage of
Issued Shares
39,384,528
4,399,369
47.93%
5.35%
Ordinary Shares
Number Held
Percentage of
Issued Shares
39,384,528
4,399,369
4,000,000
3,695,000
2,926,068
2,565,312
1,782,486
1,579,887
1,527,108
1,500,000
1,350,000
1,200,000
1,120,000
995,000
730,614
700,000
687,757
684,764
675,096
584,394
72,087,383
47.93%
5.35%
4.87%
4.50%
3.56%
3.12%
2.17%
1.92%
1.86%
1.83%
1.64%
1.46%
1.36%
1.21%
0.89%
0.85%
0.84%
0.83%
0.82%
0.71%
87.72%
Unquoted Equity Securities
There are no unquoted or unissued securities as at 30 June 2015.
(d) Voting Rights
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares: On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
(e) On-market Buy Back
There is no current on-market buy back.
59
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015
CORPORATE DIRECTORY
Directors
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Company Secretary
Gregory John Park
Notice of Annual General Meeting
The Annual General Meeting of Oldfields Holdings Limited
will be held at:
AICD Boardroom
Level 1, 20 Bond Street
Sydney NSW 2000
Time: 2:00pm
Date: Monday 23rd November 2015
Registered Office
Oldfields Holdings Limited
8 Farrow Road,
Campbelltown NSW 2560
Principal Place of Business
Oldfields Holdings Limited
8 Farrow Road,
Campbelltown NSW 2560
Share Register
Boardroom Pty Ltd
Level 7, 207 Kent Street
Sydney NSW 2000
Banker
Westpac Banking Corporation
Level 12, 55 Market Street
Sydney NSW 2000
Auditor
BDO East Coast Partnership
Level 11, 1 Margaret Street
Sydney NSW 2000
Stock Exchange Listing
Oldfields Holdings Limited shares are listed on
the Australian Securities Exchange
(ASX code: OLH)
Website
www.oldfields.com.au
60
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2015