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ANNUAL REPORT CONTENTS
Director's Report
Remuneration Report
Auditor's Independence Declaration
Financial Report
Independent Auditor's Report
Corporate Governance Statement
Risk Management Statement
Shareholder Information
Corporate Directory
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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Name:
Title:
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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 2016.
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.
Qualifications:
Experience:
Tony Joseph Grima
Executive Director and Chief Executive Officer
Master of Commerce (Marketing)
16 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:
Former directorships in last 3 years:
None
None
William Lewis Timms
Non-executive Director and Chairman
Bachelor of Business (Accounting and Audit), Real Estate and Business Agent
29 years experience in accounting, taxation and audit, 22 years experience in commercial real estate and project
management
Member of the Audit Committee and Member of the Remuneration Committee
39,384,528 shares held
None
Non-Executive Director of Buderim Ginger Limited (resigned 28 August 2016)
Stephen Charles Hooper
Non-executive Director
Bachelor of Science
22 years experience in senior executive roles in the fast moving consumer goods industry, with a focus on supply
chain management
Chairman of the Audit Committee and Member of the Remuneration Committee
50,000 shares held
None
None
Qualifications:
Experience:
Special responsibilities:
Interest in shares and options:
Other current directorships:
Former directorships in last 3 years:
Qualifications:
Experience:
Special responsibilities:
Interest in shares and options:
Other current directorships:
Former directorships in last 3 years:
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.
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 erection of scaffolding and related products.
There were no significant changes in the nature of the Group's principal activities during the financial year.
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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DIRECTORS' REPORT (continued)
Review of Operations and Financial Results
Operating Results
Net operating loss for the Group after providing for income tax amounted to $722,000 (2015: Loss $1,102,000).
The following table summarises the key reconciling items between statutory earnings/(loss) before income tax attributable to the shareholders of the Group
and EBITDA. 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.
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
2016
$'000
(370)
1,434
377
(37)
257
-
1,661
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's revenue from continuing operations for the financial year ended 30 June 2016 was $28,420,000 (2015: $27,380,000), which was an increase of
+3.8% over prior year. The consumer division benefitted from a 'one-off' large inventory fill order with one of our larger customers and general growth in the
paint specialist market was also very good. Our outdoor storage business continued to compete against very strong local competition and with cheaper Asian
imports expanding into both local and export markets. Overall revenue increased within the scaffold division which was driven by the ongoing growth in the
housing and construction industry. This trend is expected to continue in the next twelve months.
The Group’s net loss after tax was $722,000 (2015: Loss $1,102,000). This was an improvement of $380,000 despite the intense competition across all
divisions and cost increases from suppliers. The Group’s gross profit decreased from 43.8% in 2015 to 40.3% in 2016 primarily because of the impact of the
devaluation of the $AUD on imports and the limited ability to increase selling prices in the highly competitive markets. Despite these external preassures, the
Group continues to drive down its cost base and has achieved a 42.6% increase in its consolidated EBITDA profit from $1,165K in 2015 to $1,661K in 2016.
Net cash provided by operating activities was $2,141,000 in 2016, compared to $1,477,000 in 2015. Improving operating cash flow continues to be a major
focus for the Group with increased emphasis on improving revenue growth and margins in 2017.
Review of Operations
(i) Consumer Products - Paint Applications and Outdoor Storage Solutions
Revenue for the consumer division declined compared to the prior year by 1.8%. Paint equipment experienced an increase in revenue despite a major
customer announcing in January 2016 its intention to divest from the home improvements sector which had an immediate impact on sales. The paint
equipment growth was partially assisted by a large one-off sales order in the first half of the year. Revenue in the more traditional paint specialist market
increased in 2016 reflecting our commitment and capitalising on our 100 years of experience in the paint specialist market where Oldfields works very hard to
be best in class on service and adding value to our customers. We have also continued to make investments in improving the in-store presence in key national
hardware retailers. 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. These initiatives will continue in 2017 and are expected to support future growth
of the business.
Outdoor storage sales have continue to decline again in 2016. The cost of producing our high quality products within Australia makes profitable growth
opportunities difficult to identify. The market is highly competitive and there continues to be the expansion of imported Asian products which are significantly
cheaper.
During 2016 improvements have also been made to ensure that our supply chain is efficient, customer expectations are met, lead times continue to improve
and inventory controls are enhanced in order to satisfy demand. The division continues to focus on innovation, and its vision of being the brand of choice in
the market, provide best in class customer service and improving internal business processes. Following recent staff appointments and restucturing the
Directors believe the division is well positioned to face the challenges within the DIY retail environment as well as being able to captitalise on growth
opportunities with new and existing customers.
(ii) Scaffolding Division
The increase in building industry activity has supported growth in the scaffold division in 2016 as revenues increased by 7.3% compared to the previous year.
Despite pressures on margins caused by competition and the impact of the declining Australian dollar, the scaffold division significantly improved its EBITDA
in 2016 by improving labour utilisation on scaffolding services, the consolidation/relocation of it's branches and winning new profitable business.
Management has establised measures to monitor the performance of its hire equipment fleet. The division will continue to expand its hire fleet strategically
as well as to retire fleet items not providing a positive return.
The scaffold division consolidated and/or relocated the majority of its branches in 2015 to further reduce costs, improve efficiency levels and to be better
positioned in areas of housing and construction growth. This strategy has clearly proven succesful to the division's performance. In addition, the newer
premises have revitalised the division’s image encouraging growth and enhancing the brand recognition for the whole Group.
The manufacturing plant in China continued to operate strongly meeting customer demand and producing world class products. It remains well positioned to
support the growth expectations of the division including a number of international opportunities currently being investigated.
Financial Position
The net assets of the group have decreased by $928,000 from $4,891,000 at 30 June 2015 to $3,963,000 at 30 June 2016. This decrease has largely resulted
from a net loss from operations.
A key area of focus for 2017 will be to concentrate on profitable growth opportunities to improve the net asset position of the Group.
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
DIRECTORS' REPORT (continued)
Significant Changes in State of Affairs
There were no significant changes in the state of affairs during the financial year.
Dividends
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Since the start of the financial year, no dividends have been paid or declared by Oldfields Holdings Limited.
Events after the Reporting Period
There are no matters or circumstances that have arisen since the end of the financial year which significantly affected or could affect the operations of the
Group in future years.
Future Developments, Prospects and Business Strategies
In January 2016 Woolworths Ltd announced that it would divest itself from its home improvement activities. As a result, the Company's 2017 sales budget has
be adjusted accordingly and the division restuctured where possible to offset the impact. In August 2016 Woolworths Ltd announced that the Masters stores
would cease trading, however their Home Timber & Hardware chain would be sold to Mitre 10 which is also a key Oldfields account. The consumer division
has revised its product range and inventory levels to meet the change.
Capitalising on the expected upturn in the building and construction industry and the changing hardware retail market will continue to be the primary focus
for the Group in 2017 with a concentration on creating 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 opportunities in these sectors.
Given the changes to the competitive landscape, the management team has revised its strategic plan and its focus over the next two 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 developed.
Our vision is that Oldfields is One Company focused on becoming market leaders by:
(cid:121)
(cid:121)
(cid:121)
Understanding and engaging with our customers to meet and exceed their goals,
Inspiring our people to deliver strong profitable growth, innovation, quality products and servies, and
Continuing to build on our brand foundations and Company values.
Oldfields Strategic Pillars:
(cid:121)
(cid:121)
(cid:121)
Listen, engage and develop ideas to grow our customer's business,
Lead by listening, engaging, developing and recognising achievements, and
Continuously improve, removing costs and improving processes not valued by our customers.
Each of these strategic pillars is supported by financial and operational measures to track the Group’s progress and monitor success. The management team
and the Directors are confident about the Group’s future prospects and believe that these initiatives will continue to improve the Group’s results in 2017 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 Group 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:
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Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Directors' Meetings
Number
Eligible to
Attend
14
14
14
Number
Attended
14
14
13
Audit Committee Meetings
Remuneration Committee
Meetings
Number Eligible
to Attend
-
2
2
Number
Attended
-
2
2
Number
Eligible to
Attend
-
1
1
Number
Attended
-
1
1
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
DIRECTORS' REPORT (continued)
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 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 when required.
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% (2015: 9.5%) 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.
During the financial year, there were no consultants engaged by the Remuneration Committee to review the elements of KMP remuneration and provide
recommendations.
Engagement of Remuneration Consultants
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.
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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 2016
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.
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.
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There are no pre-defined termination benefits payable to key management personnel other than 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 Group. Such amounts have been calculated in accordance with Australian Accounting Standards:
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William Lewis Timms
Stephen Charles Hooper
Gregory John Park
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Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Total
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2015
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Total
Short-Term Benefits
Post
Employment
Benefits
Cash Salary
and Fees
$
Cash Bonuses &
Incentives
$
Non-
Monetary
Benefits
$
Super-
annuation
$
210,852
60,000
47,592
172,260
490,704
203,204
60,000
45,872
164,760
473,836
60,000
-
-
30,000
90,000
25,000
-
-
20,000
45,000
27,346
-
-
-
27,346
27,492
-
-
-
27,492
22,406
5,700
4,521
18,265
50,892
19,304
5,700
4,358
15,652
45,014
Total
$
320,604
65,700
52,113
220,525
658,942
275,000
65,700
50,230
200,412
591,342
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
DIRECTORS' REPORT (continued)
Remuneration Report (continued)
Securities Received that are not Performance Related
No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration package.
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.
The number of ordinary shares in Oldfields Holdings Limited held by each KMP of the Group during the financial year is as follows:
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KMP Shareholdings
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Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Total
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2015
Tony Joseph Grima
William Lewis Timms
Stephen Charles Hooper
Gregory John Park
Total
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Number at
Beginning of
Year
Granted as
Remuneration
During the Year
Issued on
Exercise of
Options
During the
Year
Other Changes
During the
Year
Number at
End of Year
100,000
39,384,528
50,000
-
39,534,528
100,000
39,384,528
-
-
39,484,528
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
-
- 39,384,528
50,000
-
-
-
- 39,534,528
100,000
- 39,384,528
50,000
-
50,000 39,534,528
50,000
-
Other Transactions with KMP and/or their Related Parties
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
Oldfields 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, or in certain cases, to the nearest dollar under the option permitted in the class order.
6
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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:
2016
$
13,200
2015
$
13,900
Taxation and other services
Auditor's Independence Declaration
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-2016
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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 IAN HOOPER TO THE DIRECTORS OF OLDFIELDS HOLDINGS
LIMITED
As lead auditor of Oldfields Holdings Limited for the year ended 30 June 2016, 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.
Ian Hooper
Partner
BDO East Coast Partnership
Sydney, 31 August 2016
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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
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14
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25
25
26
27
28
28
28
30
30
31
32
33
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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 Assets
30. Events After the Reporting Period
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Directors' Declaration
General Information
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, 2016. The directors have the power to amend and reissue the financial
report.
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Finance costs
Revaluation of deferred senior loan note derivative component
Impairment costs
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
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Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Sales revenue
Cost of sales
Gross profit
Other income
Expenses:
Other expenses from ordinary activities:
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
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
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o
e
s
u
a
n
o
s
r
e
p
Note
2
2
3
3
4
Note
24
24
2016
$'000
28,420
(16,982)
11,438
2015
$'000
27,380
(15,384)
11,996
86
7
(6,547)
(394)
(1,243)
(2,735)
(377)
(257)
(341)
(370)
(352)
(722)
(19)
(21)
(40)
(762)
(1,002)
280
(722)
(1,042)
280
(762)
2016
Cents
(1.22)
(1.22)
(7,451)
(424)
(1,305)
(2,839)
(482)
(229)
(141)
(868)
(234)
(1,102)
33
71
104
(998)
(1,372)
270
(1,102)
(1,268)
270
(998)
2015
Cents
(1.67)
(1.67)
(Loss)/Earnings per share from continuing operation attributable to members of the parent entity:
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
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The above statement should be read in conjunction with the accompanying notes.
10
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
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TOTAL ASSETS
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s
u
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Employees benefit obligations
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Deferred tax liabilities
Employees benefit obligations
Derivative financial instruments
TOTAL NON-CURRENT LIABILITIES
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TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Other reserves
Accumulated losses
Parent interest
Non-controlling interest
TOTAL EQUITY
Note
2016
$'000
2015
$'000
5
6
7
14
8
9
10
11
13
12
11
13
12
14
25
26
27
27
1,317
3,667
3,858
-
8,842
4,944
881
5,825
820
3,850
3,987
19
8,676
6,516
900
7,416
14,667
16,092
2,670
1,997
151
728
5,546
2,567
122
74
2,395
5,158
2,728
1,863
39
844
5,474
3,431
71
87
2,138
5,727
10,704
11,201
3,963
4,891
21,106
24
(17,837)
3,293
670
21,106
64
(16,835)
4,335
556
3,963
4,891
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The above statement should be read in conjunction with the accompanying notes.
11
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Issued
Capital
$'000
Other
Reserves
$'000
Retained
Earnings
$'000
Subtotal
$'000
Note
Non-
Controlling
Interests
$'000
Total
$'000
26
23
26
23
21,106
64
(16,835)
4,335
556
4,891
-
-
-
-
-
-
(40)
(40)
-
-
(1,002)
-
(1,002)
(1,002)
(40)
(1,042)
-
-
-
-
21,106
24
(17,837)
3,293
280
-
280
(166)
(166)
670
(722)
(40)
(762)
(166)
(166)
3,963
21,106
(40)
(15,463)
5,603
439
6,042
-
-
-
-
-
21,106
-
104
104
-
-
64
(1,372)
-
(1,372)
(1,372)
104
(1,268)
-
-
-
-
(16,835)
4,335
270
-
270
(153)
(153)
556
(1,102)
104
(998)
(153)
(153)
4,891
Year ended 30 June 2016
Balance at 1 July 2015
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
Balance at 30 June 2016
Year ended 30 June 2015
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
Balance at 30 June 2015
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The above statement should be read in conjunction with the accompanying notes.
12
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Other income received
Finance costs
Income tax paid
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
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
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l
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n
o
s
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Note
2016
$'000
2015
$'000
31,463
(28,964)
2,499
86
(255)
(189)
2,141
28,278
(26,303)
1,975
9
(378)
(129)
1,477
12
(638)
(626)
237
(451)
(214)
188
(1,102)
(300)
300
(166)
(1,080)
435
24
459
284
(1,054)
(275)
206
(153)
(992)
271
(247)
24
17
23
5
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The above statement should be read in conjunction with the accompanying notes.
13
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
Note 1
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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 2016 by the Directors of the Company.
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.
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').
Basis of Preparation
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).
l
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 $722,000 for the year ended 30 June 2016 (2015: loss
$1,102,000). 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 improve profit over the next 12 months and continues implementing a strategic plan to achieve this objective;
- The Group generated a positive cash flow from operating activities of $2,141,000 during the year (2015: $1,477,000);
- The 2017 cash flow forecast suggests cash from operations will be positive and that bank facility covenants and debt repayments will be met.
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(a)
Principles of Consolidation (continued)
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(c)
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.
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.
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(c)
Income Tax (continued)
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(f)
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(g)
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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. Repairs and maintenance costs 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, are 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
Hire equipment
Plant and equipment
Leasehold improvements
Motor vehicles
Depreciation Rate
7-20%
5-33%
20-33%
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.
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(k)
Investments in Associates
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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.
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the Group 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.
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.
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(n)
Employee Benefits (continued)
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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.
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.
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(q)
Financial Instruments (continued)
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s
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a
n
o
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(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.
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.
(v)
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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(q)
Financial Instruments (continued)
l
y
n
o
(r)
e
s
u
l
a
n
o
s
r
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(s)
r
o
F
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.
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 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.
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.
21
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(t)
Foreign Currency Transactions and Balances
Functional and Presentation Currency
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(u)
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p
(w)
(v)
(x)
r
o
F
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.
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.
Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
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.
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.
22
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(y)
l
y
n
o
(z)
(aa)
e
s
u
l
a
n
o
s
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r
o
F
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.
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.
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 stated 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 Group 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 Group considers it probably that future taxable
benefits will be available to utilise those temporary differences and losses.
(v) Derivatives
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. Information on the key assumptions used in estimating the fair values of these instruments is
stated in 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 Group 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.
23
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1
Summary of Significant Accounting Policies (continued)
(ab)
New Accounting Standards for Application in Future Periods
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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 Standard 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 to annual reporting periods beginning on or after 1 January 2018, as
deferred by AASB 2015-8: Amendments to Australian Accounting Standards – Effective Date of AASB 15).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles-based
model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with
customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential
customers. The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services
to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services.
To achieve this objective, AASB 15 provides the following five-step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each prior period presented per
AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors (subject to certain practical expedients in AASB 15); or
recognise the cumulative effect of retrospective application to incomplete contracts on the date of initial application. There are also
enhanced disclosure requirements regarding revenue.
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.
(iii)
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and related
Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as
operating or finance leases. The main changes introduced by the new Standard include:
- recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases
relating to low-value assets);
- depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in
principal and interest components;
- variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability using the index or
rate at the commencement date;
- by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and instead account for all
components as a lease; and
- additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line with AASB 108 or
recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial application.
Although the Directors anticipate that the adoption of AASB 16 will impact the Group's financial statements, it is impracticable at this
stage to provide a reasonable estimate of such impact.
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 2016
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
Hire and erection 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
Loss before income tax includes the following specific expenses by nature:
Expenses
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y
n
o
e
s
u
l
a
n
o
s
r
e
p
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F
Inventory recognised as an expense during the year
Depreciation expense
Amortisation expense
Goodwill impairment
Plant and equipment impairment
Employee benefits expense
Bad and doubtful debts provision
Rental expense on operating leases
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
2016
$'000
15,204
13,216
28,420
2015
$'000
14,768
12,612
27,380
86
86
7
7
24,121
4,385
28,506
23,099
4,288
27,387
2016
$'000
2015
$'000
8,495
7,616
1,415
1,331
19
-
341
30
141
-
8,734
8,994
6
220
1,000
1,133
7
205
28
122
15
377
7
292
45
109
29
482
Note
8
9
9
8
20(d)
Note
2016
$'000
2015
$'000
301
-
301
20
31
51
202
12
214
(4)
24
20
352
234
13(a)
13(b)
25
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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% (2015: 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
Less tax effect of:
Income tax expense
Net tax effect (profit) / loss from overseas operations
Current year tax loss not brought to account
Tax recognised in other comprehensive income
Total tax recognised in other comprehensive income
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
l
Operating losses
Capital losses
Potential tax benefit @ 30%
Changes in fair value of the cash flows hedge
26
The unused tax losses were incurred by the Australian tax consolidated group. The losses are currently not recognised as it is not sufficiently probable that the
Group will generate taxable income in the foreseeable future that will allow the losses to be utilised.
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
Cash and cash equivalents
Bank overdrafts
Balances per statement of cash flows
(a) Reconciliation to cash flow statement
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:
(b) Classification as cash equivalents
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.
Note
2016
$'000
(370)
2015
$'000
(868)
(111)
(260)
103
-
37
77
106
(62)
308
352
-
-
47
12
33
69
(99)
(5)
338
234
(14)
(14)
10,906
273
3,354
9,879
273
3,046
2016
$'000
2
1,315
1,317
Note
11
2016
$'000
1,317
(858)
459
2015
$'000
2
818
820
2015
$'000
820
(796)
24
l
y
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o
e
s
u
a
n
o
s
r
e
p
r
o
F
26
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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
Classification as trade and other receivables
(a)
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 non-current 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).
(b)
These amounts generally arise from transactions outside the usual operating activities of the Group. Collateral is not normally obtained.
Other receivables
Impairment and risk exposure
(c)
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.
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Up to 3 months
3 to 6 months
Total
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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
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 2016, trade receivables of $134,000 (2015: $268,000 ) 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:
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
Financial assets
Note
15
2016
$'000
3,145
3,145
2015
$'000
3,556
3,556
27
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
2016
$'000
3,248
(103)
3,145
100
422
3,667
2015
$'000
3,754
(198)
3,556
52
242
3,850
2016
$'000
49
15
39
103
2016
$'000
198
6
(102)
1
103
2015
$'000
16
9
173
198
2015
$'000
44
220
(67)
1
198
2016
$'000
99
35
134
2015
$'000
217
51
268
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 7
Inventories
Raw materials
Work in progress
Finished goods
Goods in transit
Provisions
Total inventories
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Note 8
Property, Plant and Equipment
Year ended 30 June 2016
Cost
Accumulated depreciation/amortisation
Net book amount
Opening net book amount
Exchange differences
Additions
Disposals
Impairment charges *
Depreciation expense
Closing net book amount
Year ended 30 June 2015
Cost
Accumulated depreciation/amortisation
Net book amount
Opening net book amount
Exchange differences
Additions
Disposals
Depreciation expense
Closing net book amount
Note 9
Intangible Assets
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F
Year ended 30 June 2016
Cost
Accumulated amortisation and impairment
Net book amount
Opening net book amount
Additions
Amortisation charge
Impairment losses
Balance at 30 June 2016
2016
$'000
867
330
2,421
319
(79)
3,858
Hire
Equipment
$'000
Plant and
Equipment
$'000
Improve-
ments
$'000
Motor
Vehicles
$'000
Note
7,759
(3,297)
4,462
5,639
(47)
470
(386)
(341)
(873)
4,462
8,433
(2,794)
5,639
6,272
-
257
(67)
(823)
5,639
4,329
(4,098)
231
536
(5)
78
(16)
-
(362)
231
4,388
(3,852)
536
660
25
107
(11)
(245)
536
399
(345)
54
88
-
12
-
-
(46)
54
392
(304)
88
86
11
51
(1)
(59)
88
1,608
(1,411)
197
253
-
78
-
-
(134)
197
1,574
(1,321)
253
452
7
49
(51)
(204)
253
3
3
2015
$'000
916
320
2,488
590
(327)
3,987
Total
$'000
14,095
(9,151)
4,944
6,516
(52)
638
(402)
(341)
(1,415)
4,944
14,787
(8,271)
6,516
7,470
43
464
(130)
(1,331)
6,516
Note
3
Goodwill
$'000
Trademark
& Licences
$'000
Software &
Other
$'000
838
-
838
838
-
-
-
838
177
(168)
9
9
-
-
-
9
418
(384)
34
53
-
(19)
-
34
Total
$'000
1,433
(552)
881
900
-
(19)
-
881
28
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
* In 2016 the Directors completed a review of the hire equipment within the scaffolding segment. It was determined that certain items were no longer generating a positive
return. The impairment charge of $341,000 represents the total written down value of the assets identified.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 9
Intangible Assets (continued)
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Sensitivity
Year ended 30 June 2015
Cost
Accumulated amortisation and impairment
Net book amount
Opening net book amount
Additions
Disposals
Amortisation charge
Impairment losses
Closing net book amount
Note
3
Goodwill
$'000
Trademark
& Licences
$'000
Software &
Other
$'000
838
-
838
979
-
-
-
(141)
838
177
(168)
9
20
-
-
(11)
-
9
418
(365)
53
46
26
-
(19)
-
53
Total
$'000
1,433
(533)
900
1,045
26
-
(30)
(141)
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). A CGU level summary of the goodwill allocation is presented below.
South & Western Australian scaffold branches
l
Significant estimate: key assumptions used for value-in-use calculations
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:
2016
$'000
838
2015
$'000
838
Growth Rate
Year 1
%
Year 2-5
%
Terminal
Period Growth
Rate
%
-3%
-3%
6%
3%
3%
3%
Discount Rate
%
17%
17%
2016
South & Western Australian scaffold branches
2015
South & Western Australian scaffold branches
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
In 2015, 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 of 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.
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.
29
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 10
Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
Net GST payables
Total trade and other payables
(a)
Trade and other payables
Total current
Financial liabilities as trade and other payables
Financial liabilities at amortised cost classified as trade and other payables
Trade payables are unsecured and are usually paid within 7-60 days of recognition.
The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term nature.
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(a)
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Note 11
Borrowings
CURRENT
Secured liabilities
Bank overdrafts
Bank loans
Other financing liabilities
Hire purchase liabilities
Total current borrowings
NON-CURRENT
Secured liabilities
Bank loans
Hire purchase liabilities
Debt element of deferred senior loan note
Total non-current borrowings
Total borrowings
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
2016
$'000
2015
$'000
1,546
966
158
2,670
1,653
892
183
2,728
15
2,512
2,512
2,545
2,545
Note
2016
$'000
2015
$'000
15
15
15
15
15
15
15
858
958
104
77
1,997
1,356
74
1,137
2,567
796
870
81
116
1,863
2,309
106
1,016
3,431
4,564
5,294
2016
$'000
858
2,314
104
151
1,137
4,564
2015
$'000
796
3,179
81
222
1,016
5,294
Collateral provided
(b)
The bank debt is secured by a fixed and floating charge over the Group's assets. The facility expires in August 2017. Covenants imposed by the bank includes
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.
30
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 11
Borrowings (continued)
Deferred Senior Loan Note
(c)
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
2016
$'000
728
74
802
2015
$'000
844
87
931
(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).
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Amounts not expected to be settled within the next 12 months
Current leave obligations expected to be settled after 12 months
r
o
F
2016
$'000
473
2015
$'000
444
31
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 13
Tax Assets / Liabilities
Deferred tax assets
(a)
The balance comprises temporary differences attributable to:
Employee benefits
CURRENT
Income tax liabilities
Total current tax liabilities
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 realised after more than 12 months
Total deferred tax assets
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 realised after more than 12 months
Total deferred tax liabilities
Movements in deferred tax (assets)/liabilities
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u
(b)
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(c)
At 30 June 2016
Fixed assets
Trade and other receivables
Employee benefits obligations
Other
Net deferred tax (assets)/liabilities
At 30 June 2015
Fixed assets
Trade and other receivables
Employee benefits obligations
Other
Net deferred tax (assets)/liabilities
r
o
F
2016
$'000
151
151
25
25
3
-
3
28
(28)
-
28
28
2016
$'000
150
150
(28)
122
150
150
2015
$'000
39
39
34
34
4
10
14
48
(48)
-
48
48
2015
$'000
119
119
(48)
71
119
119
Opening
Balance
$'000
Recognised in
Profit & Loss
$'000
Closing
Balance
$'000
119
(4)
(34)
(10)
71
95
-
(43)
(1)
51
31
1
9
10
51
24
(4)
9
(9)
20
150
(3)
(25)
-
122
119
(4)
(34)
(10)
71
32
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 14
Derivative Financial Instruments
CURRENT ASSETS
Forward exchange contracts
Total current derivative financial assets
NON-CURRENT LIABILITIES
Derivative element of deferred senior loan note
Total non-current derivative financial instruments
Total derivative financial liabilities
Forward exchange contracts
Note
11(d)
2016
$'000
-
-
2,395
2,395
2,395
2015
$'000
19
19
2,138
2,138
2,138
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.
Derivative element - Deferred Senior Loan Note (capital appreciation, interest and dividend-triggered entitlement)
The capital appreciation, interest and dividend-triggered entitlement components of the DSLN 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
Note
5
6(d)
14
10
11
14
2016
$'000
1,315
3,145
-
4,460
2,512
4,564
2,395
9,471
2015
$'000
820
3,556
19
4,395
2,545
5,294
2,138
9,977
Financial risk management policies
The Board of Directors are responsible for managing financial risk policies and exposures of the Group. It also reviews the effectiveness of internal controls
relating to commodity price risk, counterparty credit risk, currency risk, liquidity risk and interest rate risk.
The overall risk management strategy seeks to assist the 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.
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(a)
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(b)
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F
33
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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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.
Credit risk
(a)
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 days from the invoice date.
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:
(cid:891)(cid:3)(cid:393)(cid:396)(cid:286)(cid:393)(cid:258)(cid:396)(cid:349)(cid:374)(cid:336)(cid:3)(cid:296)(cid:381)(cid:396)(cid:449)(cid:258)(cid:396)(cid:282)(cid:882)(cid:367)(cid:381)(cid:381)(cid:364)(cid:349)(cid:374)(cid:336)(cid:3)(cid:272)(cid:258)(cid:400)(cid:346)(cid:3)(cid:296)(cid:367)(cid:381)(cid:449)(cid:3)(cid:258)(cid:374)(cid:258)(cid:367)(cid:455)(cid:400)(cid:286)(cid:400)(cid:3)(cid:349)(cid:374)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:410)(cid:381)(cid:3)(cid:349)(cid:410)(cid:400)(cid:3)(cid:381)(cid:393)(cid:286)(cid:396)(cid:258)(cid:410)(cid:349)(cid:374)(cid:336)(cid:853)(cid:3)(cid:349)(cid:374)(cid:448)(cid:286)(cid:400)(cid:410)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:374)(cid:282)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:272)(cid:410)(cid:349)(cid:448)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:854)
(cid:891)(cid:3)(cid:373)(cid:381)(cid:374)(cid:349)(cid:410)(cid:381)(cid:396)(cid:349)(cid:374)(cid:336)(cid:3)(cid:437)(cid:374)(cid:282)(cid:396)(cid:258)(cid:449)(cid:374)(cid:3)(cid:272)(cid:396)(cid:286)(cid:282)(cid:349)(cid:410)(cid:3)(cid:296)(cid:258)(cid:272)(cid:349)(cid:367)(cid:349)(cid:410)(cid:349)(cid:286)(cid:400)(cid:854)
(cid:891)(cid:3)(cid:373)(cid:258)(cid:349)(cid:374)(cid:410)(cid:258)(cid:349)(cid:374)(cid:349)(cid:374)(cid:336)(cid:3)(cid:258)(cid:3)(cid:396)(cid:286)(cid:393)(cid:437)(cid:410)(cid:258)(cid:271)(cid:367)(cid:286)(cid:3)(cid:272)(cid:396)(cid:286)(cid:282)(cid:349)(cid:410)(cid:3)(cid:393)(cid:396)(cid:381)(cid:296)(cid:349)(cid:367)(cid:286)(cid:854)(cid:3)(cid:258)(cid:374)(cid:282)
(cid:891)(cid:3)(cid:373)(cid:258)(cid:374)(cid:258)(cid:336)(cid:349)(cid:374)(cid:336)(cid:3)(cid:272)(cid:396)(cid:286)(cid:282)(cid:349)(cid:410)(cid:3)(cid:396)(cid:349)(cid:400)(cid:364)(cid:3)(cid:396)(cid:286)(cid:367)(cid:258)(cid:410)(cid:286)(cid:282)(cid:3)(cid:410)(cid:381)(cid:3)(cid:296)(cid:349)(cid:374)(cid:258)(cid:374)(cid:272)(cid:349)(cid:258)(cid:367)(cid:3)(cid:258)(cid:400)(cid:400)(cid:286)(cid:410)(cid:400)(cid:856)
The following table details the Group'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 bank 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 expected outflows
r
o
F
Net (outflow) / inflow on financial
instruments
Within 1 Year
2016
$'000
2015
$'000
1 to 5 Years
2016
$'000
2015
$'000
Over 5 Years
2016
$'000
2015
$'000
Total
2016
$'000
1,315
3,145
-
4,460
1,970
-
-
2,512
-
104
77
-
4,663
820
3,608
19
4,447
1,851
-
-
2,545
-
81
116
-
4,593
-
-
-
-
1,471
-
-
-
-
-
74
-
1,545
-
-
-
-
2,336
-
-
-
-
-
106
-
2,442
-
-
-
-
-
2,370
4,991
-
-
-
-
-
7,361
-
-
-
-
-
2,370
4,991
-
-
-
-
-
7,361
1,315
3,145
-
4,460
3,441
2,370
4,991
2,512
-
104
151
-
13,569
2015
$'000
820
3,608
19
4,447
4,187
2,370
4,991
2,545
-
81
222
-
14,396
(203)
(146)
(1,545)
(2,442)
(7,361)
(7,361)
(9,109)
(9,949)
*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.
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.
34
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 15
Financial Risk Management (continued)
(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:
2016
2015
Weighted
Average
Interest
Rate
8.47%
Balance
3,172
% of Total
Loans
33%
Weighted
Average
Interest
Rate
8.16%
Balance
3,975
% of Total
Loans
40%
Bank overdrafts and bank loans
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
Fair value estimation
There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.
The fair values of the Group's financial assets and financial liabilities included in the Statement of Financial Positon are carried at amounts that approximate
net fair values.
Profit
2016
$'000
50
360
2015
$'000
72
372
Equity
2016
$'000
50
360
2015
$'000
72
372
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e
s
u
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a
n
o
s
r
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p
r
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F
35
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 16
Fair Value Measurements
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.
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 categorised 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.
Recurring fair value measurements
Forward exchange contracts
Derivative element of DSLN
Total liabilities recognised at fair value
Note
14
14
2016
Level 2
$'000
-
2,395
2,395
2015
Level 2
$'000
19
2,138
2,157
There were no transfers between levels for assets or liabilities measured at fair value on a recurring basis during the reporting period (2015: no transfers).
Valuation techniques and inputs used to measure Level 2 fair values
The forward exchange derivative asset of $Nil (2015: liability of $19,000) has been valued using Level 2 inputs by reference to quoted market prices in active
markets.
The derivative element of the DSLN of $2,395,000 (2015: $2,138,000) 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.
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.
(a)
l
y
n
o
e
s
u
l
(b)
a
n
o
s
r
e
p
r
o
F
36
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting
Standards.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 17
Cash Flow Information
Reconciliation of cash flow from operating activities with loss after income tax
Loss after income tax
Non-cash flows in profit
Depreciation and amortisation
Accrued interest charges
Non-cash acquisitions of property, plant and equipment
Net (gains)/losses on disposal of property, plant and equipment
Write off of plant and equipment
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
Plant and equipment impairment
Goodwill impairment
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
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o
e
s
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s
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Statement of Financial Position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
NET LIABILITIES
EQUITY
Issued capital
Accumulated losses
Other reserves
TOTAL EQUITY
Loss before tax
Total comprehensive loss
2016
$'000
(722)
1,434
-
-
86
356
-
122
257
341
-
183
108
(58)
112
51
(129)
2015
$'000
(1,102)
1,361
(9)
(178)
36
-
29
109
229
-
141
165
906
(172)
86
20
(144)
2,141
1,477
2016
$'000
2015
$'000
296
2,080
2,376
3,502
5,400
8,902
(6,526)
429
2,308
2,737
2,371
6,169
8,540
(5,803)
21,106
(27,632)
-
(6,526)
21,106
(26,928)
19
(5,803)
(171)
(171)
(764)
(732)
Statement of Profit or Loss and Other Comprehensive Income
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 2016 or 30 June 2015.
Contractual commitments
The Parent Entity did not have any contractual commitments as at 30 June 2016 or 30 June 2015.
37
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 19
Interests in Subsidiaries
(a)
Information about 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.
l
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o
e
s
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l
a
n
o
s
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e
p
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
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership Interest
2016
2015
%
%
Non-Controlling Interests
2016
%
2015
%
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%
0%
0%
Australia
100%
100%
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.
r
o
F
38
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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 5-7 Peekara Street, Regency Park, South Australia.
l
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n
o
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
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a
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o
s
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(c)
r
o
F
(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
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.
2016
$'000
1,227
1,857
(416)
(164)
2,504
670
2015
$'000
1,009
1,833
(618)
(253)
1,971
556
4,383
4,287
699
-
699
280
166
825
(86)
(453)
286
674
-
674
270
153
446
(38)
(379)
29
2016
$'000
608
51
659
2015
$'000
546
45
591
39
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 20
Related Party Transactions (continued)
(d)
Transactions with related parties:
The following transactions occurred with related parties:
Interest paid to Sibley Investments P/L, holder of minority interest in Adelaide Scaffold Solutions P/L
Dividends paid to Sibley Investments P/L, holder of minority interest in Adelaide Scaffold Solutions P/L
Interest paid to Timms Realty, being a related party of William Lewis Timms (non-executive director)
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
Loan payable to Timms Realty, being a related party of William Lewis Timms (non-executive director)
Beginning of the year
Loan received
Loan repayments made
Interest charged
Interest paid
End of the year
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.
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
Total remuneration of network firms of BDO East Coast Partnership Australia
Total auditors’ remuneration
2016
$'000
-
166
7
2016
$'000
-
-
-
-
-
-
300
(300)
7
(7)
-
2015
$'000
7
153
-
2015
$'000
69
(69)
7
(7)
-
-
-
-
-
-
-
2016
$'000
130
12
-
142
11
11
153
2015
$'000
132
12
2
146
9
9
155
l
y
n
o
(e)
e
s
u
l
(f)
a
n
o
s
r
e
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r
o
F
40
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 22
Segment Information
Identification of reportable segments
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.
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
l
Basis of accounting for purposes of reporting by operating segments
(a)
(b)
a
n
o
s
r
e
p
(c)
(d)
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(e)
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.
Adjusted segment EBITDA
Adjusted segment 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.
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.
41
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 22
Segment Information (continued)
(f)
Segment information
Operating Segment Performance
2016
Revenue
Sales Revenue
Other revenue
Total segment revenue
Adjusted segment EBITDA
Depreciation and amortisation expense
Impairment of plant and equipment
Revaluation of deferred senior loan note derivative component
Finance costs
Foreign exchange gain/(loss)
Profit before income tax
Income tax expense
Profit after income tax
2015
Revenue
Sales Revenue
Other revenue
Total segment revenue
Adjusted segment EBITDA
Depreciation and amortisation expense
Impairment of goodwill
Revaluation of deferred senior loan note derivative component
Finance costs
Foreign exchange gain/(loss)
Profit before income tax
Income tax expense
Profit after income tax
Operating Segment Assets and Liabilities
30 June 2016
Segment assets
Segment liabilities
Segment net assets
30 June 2015
Segment assets
Segment liabilities
Segment net assets
l
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e
s
u
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a
n
o
s
r
e
p
Note 23
r
o
F
(a)
Consumer
Products Scaffolding
$'000
$'000
Intersegment
Eliminations/
Unallocated
10,168
54
10,222
(685)
(279)
-
-
-
-
(964)
-
(964)
10,353
2
10,355
(784)
(166)
(141)
-
-
-
(1,091)
-
(1,091)
18,318
32
18,350
2,853
(1,085)
(341)
-
-
-
1,427
(352)
1,075
17,065
5
17,070
2,066
(1,120)
-
-
-
-
946
(234)
712
(66)
-
(66)
(166)
(70)
-
(257)
(377)
37
(833)
-
(833)
(38)
-
(38)
24
(75)
-
(229)
(482)
39
(723)
-
(723)
Consumer
Products Scaffolding
$'000
$'000
Intersegment
Eliminations/
Unallocated
5,038
(2,456)
2,582
5,595
(2,306)
3,289
12,960
(283)
12,677
12,761
(1,280)
11,481
(3,331)
(7,965)
(11,296)
(2,264)
(7,615)
(9,879)
Total
$'000
28,420
86
28,506
2,002
(1,434)
(341)
(257)
(377)
37
(370)
(352)
(722)
27,380
7
27,387
1,306
(1,361)
(141)
(229)
(482)
39
(868)
(234)
(1,102)
Total
$'000
14,667
(10,704)
3,963
16,092
(11,201)
4,891
Dividends
Dividends paid or provided for
Since the start of the financial year, no dividends have been paid or declared by the Parent Entity.
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 $166,000 (2015: $153,000).
(b)
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 credits available for subsequent reporting periods based on a tax rate of 30% (2015: 30%)
Parent Entity
2016
$'000
858
86
944
2015
$'000
846
12
858
42
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 24
Earnings per Share
Reconciliation of earnings to profit or loss
(Loss) profit for the year
less Profit attributable to non-controlling equity interest
Earnings used to calculate basic EPS
2016
$'000
(722)
(280)
(1,002)
2016
No.
2015
$'000
(1,102)
(270)
(1,372)
2015
No.
Weighted average number of ordinary shares outstanding during the year used in calculating basic
and diluted EPS
82,176,198
82,176,198
Issued Capital
Fully paid ordinary shares 82,176,198 (2015: 82,176,198)
The company has authorised share capital amounting to 82,176,198 ordinary shares.
l
(a)
At the end of the reporting period
Ordinary shares
Capital Management
2016
$'000
21,106
2015
$'000
21,106
2016
No.
2015
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 2016 and 30 June 2015 are as follows:
(a)
l
y
n
o
(b)
Note 25
e
s
u
(b)
a
n
o
s
r
e
p
r
o
F
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note
11
5
2016
$'000
4,564
(1,317)
3,247
3,963
7,210
2015
$'000
5,294
(820)
4,474
4,891
9,365
45.0%
47.8%
43
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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.
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As at 1 July 2015
Revaluation - gross
Deferred tax
Currency translation differences - Current period
Other comprehensive income
As at 30 June 2016
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
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Nature and purpose of other reserves
(i) Cash flow hedge reserve
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
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Dividends paid to the minority interest holder in a subsidiary entity is detailed in Note 23(a).
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.
Cash Flow
Hedge
$'000
Foreign
Currency
Translation
$'000
19
(19)
-
-
(19)
-
(14)
47
(14)
-
33
19
45
-
-
(21)
(21)
24
(26)
-
-
71
71
45
Total
$'000
64
(19)
-
(21)
(40)
24
(40)
47
(14)
71
104
64
2016
$'000
(16,279)
(722)
(166)
(17,167)
(17,837)
670
(17,167)
2015
$'000
(15,024)
(1,102)
(153)
(16,279)
(16,835)
556
(16,279)
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
(b)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 28
Commitments
(a)
The Group does not have any capital expenditure commitments at reporting date.
Capital Commitments
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
Note
11
2016
$'000
87
79
-
166
(15)
151
2015
$'000
132
117
-
249
(27)
222
Included in finance lease commitments are hire purchase liabilities that are secured by a charge over the hire purchase assets.
(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.
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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
2016
$'000
2015
$'000
1,158
642
1,800
1,188
1,815
3,003
Note 29
Contingent Liabilities and Assets
The Group does not have any significant contingent liabilities or contingent assets as 30 June 2016 or 30 June 2015.
Note 30
Events After the Reporting Period
There are no matters or circumstances that have arisen since the end of the financial year which have significantly affected or could affect the operations of
the Group in future years.
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30 JUNE 2016
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Oldfields Holdings Limited, the Directors of the Company declare that:
1.
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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
give a true and fair view of the financial position as at 30 June 2016 and of the performance for the year ended on that date of the
consolidated entity;
(b)
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.
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Tony Joseph Grima
31-August-2016
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Director
Dated this
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
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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 2016, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that 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.
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.
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.
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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 consolidated entity’s financial position as at 30 June 2016
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 2016. 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 2016
complies with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Ian Hooper
Partner
Sydney, 31 August 2016
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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 2016 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
Establish functions reserved for the board and for
senior management.
The recommended practice is adopted
Recommendation 1.2
Undertake appropriate checks prior to appointing as
Director
The recommended practice is adopted
Recommendation 1.3
Recommendation 1.4
Recommendation 1.5
Written agreements in place with Directors and
senior executives
Company Secretary accountable to board through
the chair
Have a measurable diversity policy
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 a process for evaluating performance of the
board
Have
performance of senior executives
The board should have a nomination committee
for periodically evaluating
a process
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
level for that compliance and
senior executive
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
communication with investors
4(cid:28)
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 2016
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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
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.
(cid:24)(cid:19)
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30 JUNE 2016
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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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 twelve. 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 2014, 2015 and 2016 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.
(cid:120)
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.
(cid:24)(cid:20)
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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:
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
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
(cid:24)(cid:21)
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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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
(cid:120)
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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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:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
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:
(cid:120)
(cid:120)
Stephen Charles Hooper (Chairman); and
William Lewis Timms.
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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(cid:120)
(cid:120)
(cid:120)
(cid:120)
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:
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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
finalised with comments from management along with timelines for compliance are provided to the Board for review.
5(cid:24)
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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:
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(cid:120)
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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:
(cid:120)
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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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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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RISK MANAGEMENT STATEMENT
1.
Introduction
This statement provides an overview of the Group's enterprise risk management policies (ERM) and internal compliance and control
systems in accordance with Principle 7 of the ASX Principles of Good Corporate Governance.
2. Responsibility
3. Risk Management Monitoring
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.
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.
3.2. External Audits
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.
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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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
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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
Implement risk response or escalate to
Board of Directors
Recommend material risk escalation to
CEO or Board of Directors
Identify and report material risks as they
arise
Communication
Board of Directors
Review and approve
strategies or accept risk
risk mitigation
Oversight of framework and sufficiency of
reporting
Chief Executive Officer (CEO)
Review and approve risk reporting and
mitigation strategies
Oversight of corporate risks and adequacy
of framework
Chief Financial Officer (CFO)
Consolidate risk assessments and prepare
summary reporting
Implement and monitor ERM framework
and ERM system
Finance Department
Prepare risk assessments in accordance
with ERM framework
Operationally manage risks and escalate
issues
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 whistle-blower policy in place and encourages all staff to report risks of
which they are aware.
5(cid:27)
OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016
SHAREHOLDER INFORMATION
The shareholder information set below was applicable as at 2(cid:1013) August 201(cid:1010)
(cid:894)a)(cid:3) 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:
(cid:94)(cid:346)(cid:258)(cid:396)(cid:286)(cid:346)(cid:381)(cid:367)(cid:282)(cid:286)(cid:396)
Mr Williams Lewis Timms & Mrs Carolyn Jane
Timms(cid:3)Lymgrange Pty Limited
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(c)
Equity Security Holders
The names of (cid:410)(cid:346)(cid:286)(cid:3)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
(cid:17)(cid:286)(cid:374)(cid:336)(cid:286)(cid:396)(cid:3)(cid:94)(cid:437)(cid:393)(cid:286)(cid:396)(cid:258)(cid:374)(cid:374)(cid:437)(cid:258)(cid:410)(cid:349)(cid:381)(cid:374)(cid:3)(cid:87)(cid:410)(cid:455)(cid:3)(cid:62)(cid:349)(cid:373)(cid:349)(cid:410)(cid:286)(cid:282)(cid:3)(cid:876)(cid:3)(cid:17)(cid:286)(cid:374)(cid:336)(cid:286)(cid:396)(cid:3)(cid:94)(cid:437)(cid:393)(cid:286)(cid:396)(cid:3)(cid:38)(cid:437)(cid:374)(cid:282)(cid:3)(cid:4)(cid:876)(cid:18)
(cid:104)(cid:38)(cid:17)(cid:4)(cid:3)(cid:87)(cid:410)(cid:455)(cid:3)(cid:62)(cid:410)(cid:282)
(cid:68)(cid:396)(cid:3)(cid:75)(cid:396)(cid:367)(cid:258)(cid:374)(cid:282)(cid:381)(cid:3)(cid:17)(cid:286)(cid:396)(cid:258)(cid:396)(cid:282)(cid:349)(cid:374)(cid:381)(cid:3)(cid:24)(cid:349)(cid:3)(cid:47)(cid:437)(cid:367)(cid:349)(cid:381)(cid:3)(cid:920)(cid:3)(cid:68)(cid:396)(cid:400)(cid:3)(cid:18)(cid:258)(cid:410)(cid:346)(cid:258)(cid:396)(cid:349)(cid:374)(cid:258)(cid:3)(cid:68)(cid:258)(cid:396)(cid:349)(cid:258)(cid:3)(cid:60)(cid:381)(cid:381)(cid:393)(cid:373)(cid:258)(cid:374)
(cid:94)(cid:410)(cid:258)(cid:396)(cid:271)(cid:258)(cid:367)(cid:367)(cid:3)(cid:87)(cid:410)(cid:455)(cid:3)(cid:62)(cid:410)(cid:282)
Dr Gordon Bradley Elkington
(cid:4)(cid:400)(cid:336)(cid:258)(cid:396)(cid:282)(cid:3)(cid:18)(cid:258)(cid:393)(cid:349)(cid:410)(cid:258)(cid:367)(cid:3)(cid:68)(cid:258)(cid:374)(cid:258)(cid:336)(cid:286)(cid:373)(cid:286)(cid:374)(cid:410)(cid:3)(cid:62)(cid:410)(cid:400)(cid:3)(cid:1004)(cid:1013)(cid:1013)(cid:1010)(cid:1013)(cid:1012)(cid:1012) / Wake Super Fund A/C
(cid:94)(cid:346)(cid:258)(cid:374)(cid:282)(cid:381)(cid:396)(cid:258)(cid:3)(cid:75)(cid:374)(cid:286)(cid:3)(cid:87)(cid:410)(cid:455)(cid:3)(cid:62)(cid:410)(cid:282)(cid:3)(cid:876)(cid:3)(cid:17)(cid:286)(cid:374)(cid:336)(cid:286)(cid:396)(cid:3)(cid:94)(cid:437)(cid:393)(cid:286)(cid:396)(cid:3)(cid:38)(cid:437)(cid:374)(cid:282)(cid:3)(cid:4)(cid:876)(cid:18)
The Genuine Snake Oil Company Pty Ltd / Morson Group Super Fund A/C
(cid:94)(cid:286)(cid:448)(cid:286)(cid:374)(cid:3)(cid:17)(cid:381)(cid:271)(cid:3)(cid:47)(cid:374)(cid:448)(cid:286)(cid:400)(cid:410)(cid:373)(cid:286)(cid:374)(cid:410)(cid:400)(cid:3)(cid:87)(cid:410)(cid:455)(cid:3)(cid:62)(cid:410)(cid:282)(cid:3)(cid:3)(cid:90)(cid:3)(cid:38)(cid:3)(cid:18)(cid:258)(cid:373)(cid:286)(cid:396)(cid:381)(cid:374)(cid:3)(cid:94)(cid:437)(cid:393)(cid:286)(cid:396)(cid:3)(cid:38)(cid:437)(cid:374)(cid:282)(cid:3)(cid:4)(cid:876)(cid:18)
(cid:18)(cid:68)(cid:18)(cid:3)(cid:68)(cid:258)(cid:396)(cid:364)(cid:286)(cid:410)(cid:400)(cid:3)(cid:94)(cid:410)(cid:381)(cid:272)(cid:364)(cid:271)(cid:396)(cid:381)(cid:364)(cid:349)(cid:374)(cid:336)(cid:3)(cid:69)(cid:381)(cid:373)(cid:349)(cid:374)(cid:286)(cid:286)(cid:400)(cid:3)(cid:87)(cid:410)(cid:455)(cid:3)(cid:62)(cid:349)(cid:373)(cid:349)(cid:410)(cid:286)(cid:282)(cid:3)(cid:4)(cid:272)(cid:272)(cid:437)(cid:373)(cid:3)(cid:4)(cid:876)(cid:18)
Man Investments (NSW) Pty Ltd / AMC Super Fund A/C
Mrs Antionette Giles
Toveken Properties Pty Ltd
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11. Oceanridge Limited
12. Mr Paul John Simpson
13. Mr Brian Garfield Benger
14.
15.
16.
17.
18.
19.
20.
Unquoted Equity Securities
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Ordinary Shares
Shares
Options
(cid:1010)(cid:1008)
(cid:1011)(cid:1013)
(cid:1006)(cid:1004)
(cid:1011)(cid:1006)
(cid:1008)(cid:1010)
(cid:1006)(cid:1012)(cid:1005)
(cid:3)(cid:20)(cid:28)
-
-
-
-
-
-
-
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,(cid:1009)(cid:1010)(cid:1009),(cid:1007)(cid:1005)(cid:1006)
2,(cid:1006)(cid:1004)(cid:1004),(cid:1004)(cid:1004)(cid:1004)
(cid:1006)(cid:853)(cid:1005)(cid:1011)(cid:1013)(cid:853)(cid:1012)(cid:1012)(cid:1011)
1,(cid:1011)(cid:1012)(cid:1006)(cid:853)(cid:1008)(cid:1012)(cid:1010)
1,527,108
1,500,000
1,350,000
1,200,000
1,120,000
(cid:1012)(cid:1013)(cid:1004)(cid:853)(cid:1010)(cid:1005)(cid:1008)
7(cid:1004)(cid:1004)(cid:853)(cid:1004)(cid:1004)(cid:1004)
(cid:1010)(cid:1013)(cid:1007),000
687,757
(cid:1010)(cid:1011)(cid:1009)(cid:853)(cid:1004)(cid:1013)(cid:1010)
(cid:1010)(cid:1006)(cid:1006)(cid:853)(cid:1012)(cid:1005)(cid:1012)
584,394
(cid:1011)(cid:1005)(cid:853)(cid:1011)(cid:1009)(cid:1011)(cid:853)(cid:1007)(cid:1010)(cid:1013)
47.93%
5.35%
4.87%
4.50%
3.(cid:1005)(cid:1006)%
(cid:1006)(cid:856)(cid:1010)(cid:1012)%
2(cid:856)(cid:1010)(cid:1009)%
(cid:1006)(cid:856)(cid:1005)(cid:1011)%
1.86%
1.83%
1.64%
1.46%
1.36%
1.(cid:1004)(cid:1012)%
0.8(cid:1009)%
(cid:1004)(cid:856)(cid:1012)(cid:1008)%
0.84%
0.8(cid:1006)%
0.(cid:1011)(cid:1010)%
0.71%
(cid:1012)(cid:1011)(cid:856)(cid:1007)(cid:1006)(cid:1081)
There are no unquoted or unissued securities as at 30 June 2015.
(d)(cid:3) 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)(cid:3) On-(cid:68)arket Buy Back
There is no current on-market buy back.
(cid:24)(cid:28)
OLDFIELDS HOLDINGS LIMITED
30 JUNE 201(cid:1010)
CORPORATE DIRECTORY
Directors
Share Register
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, Banksia Room
Level 1, 10 Bond Street Limited
Sydney NSW 2000
Time: 2:00pm
Date: Thursday 24th November 2016
Registered Office
Oldfields Holdings Limited
8 Farrow Road
Campbelltown NSW 2560
Principal Place of Business
Oldfields Holdings Limited
8 Farrow Road
Campbelltown NSW 2560
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Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Westpac Banking Corporation
Level 12, 55 Market Street
Sydney NSW 2000
BDO East Coast Partnership
Level 11, 1 Margaret Street
Sydney NSW 2000
Banker
Auditor
Stock Exchange Listing
Oldfields Holdings Limited shares are listed on
the Australian Securities Exchange
(ASX Code: OLH)
Website
www.oldfields.com.au
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OLDFIELDS HOLDINGS LIMITED
30 JUNE 2016