ANNUAL REPORT
2016
For personal use only
CONTENTS
Chairman’s Report ……………………………………………………………………………………………………………………..
Managing Director’s Report ……………………………………………………………………………………….………………
Directors' Report …………………………………………………………………………………………..…………………..…….…
Auditor’s Independence Declaration………………………………………………………..………………………………….
Consolidated Statement of Comprehensive Income …………………………………..……………………...………
Consolidated Statement of Financial Position ………………………………………………………………….…………
Consolidated Statement of Changes in Equity ……………………………………………………………...……………
Consolidated Statement of Cashflows …………………………………………………………………..……………………
Notes on the Financial Statements …..………………………………………………………………………………………..
Directors’ Declaration …………………………………………………………………………………..…..…..…………………..
Independent Auditor's Report …………………………………………………………………….…………………..…………
Corporate Governance Statement ……………………………………………………..……….…………………..…..……
Shareholder Information ……………………………………………………………………………………………………………
Corporate Directory ……………………………………………………………………………………………….…………….….…
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CHAIRMAN’S REPORT
Dear Fellow Shareholders,
The past twelve months has continued to be
challenging for suppliers to the global mining
industry.
by
our Advisory
Our Software business continues to gain
competiveness along with aspects of the work
performed
division.
Nevertheless, all businesses within the Group
were negatively impacted by the retraction in
spending by the major mining companies and
by uncertainties associated with divestment
and restructuring activities.
Commodity prices continued to be weak in the
first six months of the year before staging a
minor recovery in the second six months. Some
industry analysts are suggesting that the worst
may be behind the mining sector, however
even if this is the case it may be quite some
time before mining companies look to increase
their capital and operating budgets. We have
seen no slowdown in the cycle of productivity
improvement and cost reduction programmes
in the industry.
entering
receivership
The 2016 financial year saw a number of non-
core mining assets put up for sale by the major
mining houses as well as a number of
companies
or
administration. Our Advisory team were
involved
in many of these transactions,
including advising on transactions that did not
proceed. Our
relationships with
acquiring Chinese industry players has seen the
Advisory business advising on the largest of
these transactions.
strong
software innovation and integration between
the major system providers to the mining
industry. We have positioned ourselves well to
be at the forefront of this endeavour.
RPM is now a full voting member of the ISA-95
committee and along with BHPB, Schneider
Electric, Caterpillar, Modular Mining and SAP,
are defining
level messaging
standards for the mining industry.
the high
During the year our company entered into
Strategic Software Partnership Agreements
with both Schneider Electric and Modular
Mining. These agreements along with our SAP
agreement have been warmly received by the
global mining companies who are looking for
standardisation leadership from the major
suppliers to the industry.
and
senior
While 2016 has been another difficult year we
have started to see the benefits of our
software investment being reflected in the
strategic conversations we are having with the
management
executive
representatives of our customers. We are not
aware of any other technical mining software
provider investing in software development to
the level that we are. It is clear to us that the
Company’s strategic move from providing
desktop applications to enterprise systems has
the support of the world’s major mining
companies. A global framework agreement
entered into during the year with a major
mining company has already yielded sales and
has opened the door to future opportunities
materialising in the years ahead.
improvements
in most
Initial productivity
mines derive from existing resources, but there
are limits to the gains from this source: mining
fleets continually wear out and have to be
replaced, requiring replacement capital spend.
Technology that can obviate or delay this
capital spend can result in higher returns.
We are confident that the next wave of
productivity improvements will come through
(Open
Consistent with our stated strategy, we have
continued to increase our investment in our
technology products. During the year we
released two new XPAC commodity based
Phosphate
and
Cut
solutions
equipment
Stratigraphic Metals),
an
simulation product designed
for Original
Equipment Manufacturers (SIMULATE) and
two Enterprise products (XERAS Enterprise and
Plan Manager). These products along with the
eight other new products released over the last
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |1
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CHAIRMAN’S REPORT
36 months have laid the foundation for the
Company’s future as the pre-eminent supplier
of technical software to the industry.
In last year’s Annual Report, we assured
shareholders that we would continue to
closely monitor the industry changes and if
needed respond swiftly and decisively, which
we have done. As in previous years we have
reduced the ongoing operational costs of the
Advisory and GeoGAS divisions in line with the
weakness across the industry.
This downsizing cost the Company $0.4 million
in redundancy costs (2015: $1.3 million) and
will provide $1.6 million in annual savings.
During the year we further reduced our office
accommodation costs in our Denver, Maitland,
Chile and Hong Kong offices by either moving
cheaper offices or
smaller
into
renegotiating more
lease
arrangements. The office lease in Moscow was
not renewed.
favourable
and
While the Board believes that the Company’s
cost structure is now appropriate for our
current revenue expectations, we will continue
to remain vigilant and monitor the industry
situation closely.
The near term outlook of the Advisory business
remains constrained, with no clear indicators
that the market is about to turn any time soon.
Because of this, the Company has recognised a
non-cash impairment of $4.0 million to the
Goodwill of the Advisory division. This brings
the intangible value of the Advisory business to
zero.
The tidy up of the Company’s corporate
structure was concluded in the 2016 financial
year with the following dormant or disused
subsidiary companies deregistered – Corelate
Capital Pty Ltd and Fractal Technologies Pty
Ltd.
(approximately 17,700,000 shares) over the
twelve months starting on 7 December. Since
that
the Company has purchased
7,184,170 shares at an average price of $0.39
per share.
time
In May 2016 the Company announced that it
would acquire iSolutions, an enterprise asset
maintenance
business
headquartered in Sydney Australia.
software
Consideration for this acquisition was made up
of $8 million in cash, earn-out payments
estimated to total $6.3 million over three years
and 9,166,666 Company shares that were
issued to the outgoing shareholders of
iSolutions (to be held in escrow for 12 months).
The earn-out payment
is based on a
combination of successful collections and
ongoing retention and growth in sales of
software and annuity revenue from iSolutions.
The issued Company shares were agreed, by
the RPM Board and the outgoing shareholders
of iSolutions, to be notionally valued at 60
cents per share ($5.5 million) as a reflection of
the
future growth opportunities of the
combined product suites and the belief that
the RPM share price at that time substantially
undervalued the business.
This transaction closed on 1 July. The Board
and Management are excited about the
complementary nature of the iSolutions and
RPM products and the entre it provides into
the Global Original Equipment Manufacturers
and Mining Contractors.
The Board has resolved not to pay a dividend
this financial year.
I would again like to acknowledge the effort
and commitment of our staff who continue to
perform especially well during this challenging
period.
In November 2015 the Company announced
that it would undertake an on-market buy-
back of up to 10% of the Company’s shares
The Board thanks its shareholders for their
ongoing support of the Company’s software
strategy and remains firmly of the opinion that
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |2
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CHAIRMAN’S REPORT
the investments it has made in its software
development area and strategic software
acquisition of the iSolutions business will
provide the growth engine for the business in
2017 and beyond.
Allan Brackin
Chairman
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |3
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MANAGING DIRECTOR’S REPORT
OVERVIEW
The 2016 financial year saw the Company
continue to invest heavily in its Software
business with $10.4 million
invested on
internal software development - a 35% ($2.7
million) increase on the previous year ($7.7
million).
investment
Even with this
in
increased
software development, the Company still
delivered a positive operating cash-flow
(before redundancies and onerous leases) for
the year of $0.4 million and closed the year
with $18.1 million in cash and no debt.
Late in the financial year we announced that
the Company would continue to invest in its
software business by acquiring iSolutions, the
world’s
leading mining mobile equipment
for $20
maintenance software provider,
million made up of $8 million in cash, $5.5
million in shares (9,166,666 shares at an
agreed notional value of $0.60 per share) and
then estimated $6.5 million
in earn out
payments over three years. This transaction
closed on 1 July 2016 and will be earnings per
share accretive in 2017.
There is no doubt in my mind that the suite of
innovative software products which
the
Company has built over the last four years,
along with the new products we are either
planning or already developing, will assist to
unlock the productivity improvements that
mining companies are looking for from their
mobile mining equipment.
FINANCIAL RESULTS
The Company’s financial performance in 2016
was adversely
impacted by two separate
occurrences, both of which were disclosed to
shareholders as soon as they became known.
In April 2016, as a result of continued client
organisational constraints by a number of the
Company’s
(including
changes to employee responsibilities and
customers
largest
incur capital and
resulting authority to
in
operational costs), RPM management
conjunction with the Board considered that
there was a risk that some software revenue
forecast to close in the fourth quarter of the
2016 financial year may not close by the end of
the financial year. This was disclosed to
shareholders via a trading update and did in
fact materialise. As a result, software licence
revenue from one of the Company’s major
customers was down $5 million from the
previous year (34% of the previous year’s
software licence revenue).
In July 2016 the Company received an
unexpected adverse court judgement against
its Russian subsidiary in the Arbitration Court
of Moscow relating to recovery of US$988.5K
of professional
fees, disbursements and
interest relating to work performed for a
Russian company during 2014. This has
resulted in RPM fully providing for this debt in
this financial year. The Company has appealed
this judgement to the appellate courts in
Moscow.
These two matters have resulted
in the
Company reporting a drop in EBITDA (before
redundancy and impairment costs) of $5.8
million from the 2015 profit of $2.6 million to a
loss of $3.2 million.
Demand for mining advisory services, desktop
software products and coal gas exploration
testing were again negatively impacted by
restrained investment by mining companies
and a restriction on capital to the industry.
This reduction in spending resulted in Net
Revenue decreasing by $9.4 million (15%) to
$52.6 million
(2015: $62.0 million). Net
Advisory revenue decreased by 17% to $16.9
million (2015: $20.3 million).
Laboratory testing and consulting revenue
from the GeoGAS business unit finished the
year at $3.3 million (2015: $4.3 million) a 23%
reduction
year.
the
Nevertheless, like the Advisory business, its
previous
from
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MANAGING DIRECTOR’S REPORT
contribution, whilst small at $0.6 million (2015:
$0.9 million), was positive.
their suppliers which of course included our
Company.
Software licence revenue finished the year at
$11.8 million down $4.1 million (26%) on last
year (2015: $15.9 million) as a direct result of
reduced sales to one of the Company’s major
customers.
Our Advisory business and GeoGAS business
are both sensitive to coal exploration activities
which continued to be severely curtailed as a
result of many of the coal mines in Australia
being up for sale.
Software consulting revenue reduced by $0.7
million on the previous year however this was
offset by the costs attributable to this revenue
being lower by the same amount.
Software maintenance revenue increased by
9% to $15.0 million (2015: $13.7 million).
than 2015
The Company’s costs (excluding development
costs) for the full year were $45.5 million, 12%
lower
($51.7 million). The
development costs incurred by the Company
increased by $2.7 million to $10.4 million
(2015: $7.7 million).
The Advisory business was again impacted by
the continuing contraction throughout the
industry. Its performance also resulted in the
Company writing-down the full value of the
goodwill associated with the Advisory business
of $4.0 million (2015: $2.5 million).
The effect of these changes contributed to a
net loss after tax of $9.3 million (2015: $6.8
million).
Basic earnings per share was a loss of 5.3 cents
per share (2015: 3.9 cents profit per share).
(before
The Company had a positive full year operating
and
cash-flow
impairment) of $0.4 million and finished the
year with cash reserves of $18.1 million and no
debt.
redundancy
Advisory and GeoGAS Operations
During the year, the Company’s customers
continued their drive to reduce capital and
operating costs as quickly as possible. This
directly impacted the revenue opportunities of
In the Advisory space, there was less work
available due to mining companies cutting
back on exploration, capacity expansions and
mine planning. The work that was available
was again hotly contested resulting in smaller
contracts and slimmer margins.
From a competitor standpoint, the 2016
financial year followed the trend set
in
previous years with more small mining
Advisory companies going to the wall and the
larger consultancy organisations reducing the
number of their dedicated mining employees.
A new development which management have
started to observe during the year was
international Engineering, Procurement, and
Construction Management (EPCM) companies
using the strength of their balance sheet to
aggressively bid for mining advisory studies for
the purpose of building early relationships with
project owners. While many of these bids are
uneconomic in and of themselves if the EPCM
is able to secure the follow up work then it is
well worth the initial loss leading investment.
We are confident that we have the most
respected Coal advisory team in the industry
and believe that we have lifted our reputation
and presence in the Metals space over the last
twelve months. The Sydney Advisory team
winning the 2016 New South Wales Mining
Industry and Suppliers Award in the category
of ‘Most Outstanding Supplier’ supports this
view.
During the 2016 financial year the Company
entered into an Advisory partnership with
ARDEF in Turkey which has resulted in the
Company securing $1.78 million of Advisory
projects in Turkey thereby forming a solid
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |5
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MANAGING DIRECTOR’S REPORT
foundation for our future in that country. After
four years of unsuccessful Indian Government
tenders, we and our Indian joint venture
partner Deepak agreed to close down our
Indian joint venture.
Software Operations
Our Software business now makes up 62% of
the Company’s net revenue (up from 58% in
2015). The addition of the iSolutions business
will see this percentage increase yet again.
During the 2016 financial year RPM entered
into a Global Framework Agreement with an
international
tier-one miner which has
provided the Company with the opportunity to
demonstrate the breadth of our software
solutions to that customer’s management
team right around the world. This is a true two
way relationship in that RPM receives direct
feedback from the customer’s operations team
on our current product offering along with
development
once
incorporated into our products will improve
their overall market acceptance.
suggestions which
The Software division entered into a Business
Partner Agreement with Enterchain in Russia
which resulted in our local consulting staff in
that region transferring across to their
business. While we will retain sales staff in the
region we will engage with and harness the
local expertise of Enterchain
sales
campaigns and opportunities going forward.
in
The Company’s new XPAC Commodity Based
Solutions performed really well during the
2016 financial year. Open Pit Metals (OPMS)
was licensed to ten new customers, Open Cut
Coal (OCCS) two and Quarry, Oil Sands and
Open Pit Diamonds each added one new
customer.
Of the remaining new products HAULSIM was
sold to fourteen (14) new customers, XECUTE
one and the Enterprise Planning Framework
(EPF) was acquired by three companies.
Software Development
The Software Development team had another
great year. They released five new products
(SIMULATE, XERAS Enterprise, Plan Manager,
Open Cut Phosphate and Stratigraphic Metals)
along with meaningful upgrades to all of our
products including a significant upgrade to
Open Cut Coal.
We continued to extend the features and
functions of our Enterprise Product Framework
(EPF) which is now being used by many
companies to both transfer data between
different technical mining products (below the
line) and between their technical mining
products and corporate enterprise systems
(above the line).
in
resulted
investment
The Company’s continued
in
an
software development
additional 13 developers being added to our
development team during the year. RPM’s
acquisition of iSolutions will add a further 11
developers to the team. The economies of
are achieved with bigger
scale
that
development teams
is really starting to
become evident with the teams being able to
quickly adapt and turn their attention to new
product opportunities as and when they
present themselves without compromising the
Company’s existing core products.
During the 2016 financial year there was a real
focus on building new innovative products for
the Coal industry. In 2017 the Company will
harness all of the innovative new products that
it has built over the last 24 months and
configuring them for the benefit of the
Underground Metals sector.
EMPLOYEES
As highlighted above it was another tough year
for our Advisory team which again saw the
business reduce in size throughout the year.
Since year-end there has been a marked
increase in debt funding enquiries and project
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MANAGING DIRECTOR’S REPORT
studies which, while early days, does bode well
for the upcoming year.
The reduction in Advisory and GeoGAS staff
was offset by the increase in software sales and
development staff.
Whilst we will continue to carefully review the
shape of our business, we are not expecting to
see further headcount reductions in 2016,
other than synergies associated with RPM’s
iSolutions acquisition, as our current cost
structures support our revenue projections.
OUTLOOK
While there are some early signs that the worst
may be behind the mining industry, we are
expecting mining companies to continue to
focus on productivity
improvements and
reducing their costs in the year ahead. Our
Advisory business will benefit
its
increased market share, however we expect its
revenue opportunities will be driven by the
level of investment mining companies are
prepared to make in their current assets or the
acquisition of new ones.
from
At some stage we expect coal companies will
need to invest in exploration activities and
once they do this should result in a slow and
steady contribution improvement from the
GeoGAS business.
simulation
and new
While we see little change in the demand for
remain
software products, we
desktop
enthusiastic about the potential growth in our
enterprise,
asset
management products. Financial Year 2015
delivered the foundations of our enterprise
products and this year saw new commodity
based scheduling products released including a
‘state of the art’ Coal solution. In 2017 we will
again extend our commodity based scheduling
footprint and will provide the mining industry
with its first fully integrated production and
maintenance system.
structure
in
accelerated
Our
cost
and
sales
investments
development position us well for the year
ahead.
and
software
Richard Mathews
Managing Director and Chief Executive Officer
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |7
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DIRECTORS’ REPORT
Your Directors present their report on RungePincockMinarco Limited (the “Company”) and its subsidiaries (referred
to hereafter as the “Group”) for the year ended 30 June 2016.
1.
Directors
The Directors of RungePincockMinarco Limited at any time during or since the end of the period were:
Non-executive
Allan Brackin – Chairman
Dr Ian Runge
Ross Walker
Executive
Richard Mathews - Managing Director
2.
Principal Activities
The Group’s principal activities during the financial year consisted of:
a)
b)
c)
Software licensing, consulting, implementation and support;
Technical, advisory and training services to the resources industry; and
Laboratory gas testing.
There were no significant changes in the nature of the Group’s principal activities during the financial year.
3.
Dividends
No dividends were paid or declared during the financial year.
4.
Review and Results of Operations
Gross revenue in the 2016 financial year reduced by 16% to $57.1 million (2015: $67.6 million). As shown below,
Advisory revenue reduced by 17% and Laboratory services revenue declined by 26% as miners limited their
investments in exploration activity and project extensions while continuing to reduce their capital and operational
costs. Software revenue declined by $4.0 million (11%) on the previous year primarily due to one customer whose
software licence purchases reduced by $5 million year on year.
Software
-
Licence Sales
- Maintenance
-
Consulting
Total Software
Advisory
GeoGAS
Other Revenue
Total Revenue
Direct Costs
Net Revenue
2016
$m
11.8
15.0
6.6
33.4
20.3
3.2
0.2
57.1
(4.5)
52.6
2015
$m
15.9
13.7
7.8
37.4
24.5
4.3
1.4
67.6
(5.6)
62.0
Change
%
-26%
9%
-15%
-11%
-17%
-26%
-86%
-16%
-20%
-15%
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DIRECTORS’ REPORT
Review and Results of Operations (Continued)
4.
Reconciliation between IFRS and non-IFRS financial performance items used in the Directors Report is presented
below:
Net Revenue
Operating Expenses
EBITDA1
Depreciation and Amortisation
Redundancy – staff
Restructure – office leases
Goodwill impairment costs
Net Finance (costs)/income
Loss before income tax
Income tax benefit/(expense)
Loss
Earnings Per Share (cents per share)
2016
$m
52.6
(55.9)
(3.2)
(1.9)
(0.4)
-
(4.0)
0.3
(9.2)
-
(9.2)
(5.3)
2015
$m
62.0
(59.4)
2.6
(4.1)
(1.3)
(1.9)
(2.5)
0.3
(6.9)
0.1
(6.8)
(3.9)
Change
%
-15%
6%
n/a
-54%
-69%
-34%
-
-37%
-36%
1 Earnings before Interest, Tax, Depreciation, Amortisation, Impairment and Restructuring
Continued focus on costs and efficiencies resulted in Advisory operating costs reducing by 16% on the prior year to
$16.2 million (2015: $19.3 million) and GeoGAS operating costs being reduced by 17% on the prior year to $2.4
million (2015: $2.9 million).
The new commodity based software products that the Company has been progressively releasing to the market
require significantly less consulting work to implement and configure and as such the Group continues to reduce
the size of its software consulting business. These changes have seen a $1.6 million (8%) reduction in operating
costs in that division to $17.7 million (2015: $19.3 million).
Redundancy costs associated with these changes in this financial year were $0.4 million (2015: $1.3 million) and
will provide $1.6 million in annual savings.
The Group reduced its accommodation costs significantly during the 2015 financial year and continued to do so
during 2016 with rental expenses being down 35% on the prior year to $3.9 million (2015: $5.9 million).
The goodwill allocated to the Advisory division was fully impaired, resulting in a non-cash charge of $4.0 million
(2015: $2.5 million).
The fall in software licence revenue from one customer and adverse court ruling in Russia accounted for the $5.8
million EBITDA (Earnings before Interest, Tax, Depreciation, Amortisation, Restructure and Impairment) drop from
a $2.6 million profit in 2015 to a loss of $3.2 million in 2016.
In November 2015 the Company announced that it would undertake an on-market buy-back of up to 10% of the
Company’s shares (approximately 17,700,000 shares) over the next twelve months starting on 7 December. Since
that time the Company has purchased 7,184,170 shares at an average price of $0.39 per share.
The Group had cash reserves of $18.1 million (2015: $22.6 million) and no bank debt at the end of the financial
year.
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DIRECTORS’ REPORT
4.
Review and Results of Operations (Continued)
Software Division
The Software division provides mine scheduling, financial costing/budgeting and simulation software solutions to
the mining industry. It also provides software consulting, implementation, training and support for these products.
The Software division contributed 62% of net revenue in 2016, up from 59% last year.
The Group increased its investment in R&D by 35%, with software development costs increasing by $2.7 million to
$10.4 million (2015: $7.7 million). This investment enabled the Group to fast-track five new products to market
including its first server-based enterprise product, XERAS Enterprise.
Software licence sales in the traditionally strong fourth quarter of the year were down this year to $4.4 million
(2015: $7.1 million) as a result of one key transaction not closing before year end.
Consulting revenue decreased by 15% to $6.6 million primarily as a result of less time being required to implement
the Company’s commodity based solutions over desktop solutions.
Recurring revenue for software maintenance and support continued its growth by 9% to $15.0 million (2015: $13.7
million).
Advisory Division
The Advisory division provides independent consulting and advisory services which cover technical and economic
analysis and assessment of mining activities and resources on behalf of mining companies, financial institutions,
government agencies and suppliers to mining projects. The market for Advisory services is heavily reliant on
expansion, development, financing and transacting of mining assets and projects.
Net revenue from Advisory services decreased by $3.4 million (17%) to $16.9 million (2015: $20.3 million).
Operating expenses for the division reduced by 16% to $16.2 million (2015: $19.4 million).
GeoGAS
The GeoGAS business provides mine gas consulting and laboratory testing services to the coal industry on the East
Coast of Australia.
The Australian coal industry experienced further cutbacks to exploration budgets and forward planning activity in
2016 due to M&A activity. Revenue was down as a result by 23% to $3.3 million (2015: $4.3 million).
To offset this revenue decline, employment costs were reduced by $0.5 million (17%) to $2.4 million (2015: $2.9
million).
Operating Expenses
Operating expenses decreased by 6% ($3.5 million) to $55.9 million during the year (2015: $59.4 million).
Development costs were $10.4 million a 35% increase on the previous year (2015: $7.7 million).
The Group also recorded $0.9 million in expenses relating to its long term incentive plan for employees in 2016
(2015: $0.4 million).
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DIRECTORS’ REPORT
5.
Likely Future Developments - Business Strategies and Prospects for Future Financial Years
Software Division
Our Software business now makes up 62% of the net revenue of our Company (up from 59% in 2015). The addition
of the iSolutions business should see this percentage increase again in 2017.
As a Board and management team we remain fully invested in growing our enterprise, simulation, financial and
new asset management products and to further harnessing existing and new global framework agreements to
expand RPM’s solution offerings within the global miners.
Continuing to build on the strong foundations of the past couple of years, which have seen us deliver innovative
enterprise, financial, simulation and commodity based scheduling solutions, we look forward to further extending
our commodity based scheduling footprint during 2017 to include Underground Metals and Underground Coal –
whilst at the same time building on the iSolutions acquisition to deliver the first fully integrated production and
maintenance system to the mining industry.
Advisory and GeoGAS
As with previous years, the near term outlook for these businesses remains tough; however we are confident that
our internationally respected Advisory team is well placed to benefit from its increased market share and to
continue to assist mining companies as they focus on productivity improvements and any associated acquisition
and divestiture activity.
With respect to our GeoGAS business, at some stage we expect coal companies on the east coast of Australia will
need to invest in exploration activities and once they do this should result in a slow and steady contribution
improvement from the GeoGAS business.
The operating costs of both of these businesses were reduced during the 2016 financial year and therefore both
businesses carry less downside risk and more upside potential in the New Year.
6.
Legal Proceedings on Behalf of the Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
any part of those proceedings.
7.
Significant Changes in the State of Affairs
There was no matter or circumstance during the financial year that has significantly affected the state of affairs of
the Group not otherwise disclosed.
8.
Matters Subsequent to the End of the Financial Year
Since 30 June 2016 the Group has acquired 100% of the issued shares in iSolutions International Pty Ltd and
iSolutions Holdings Pty Ltd (iSolutions) for cash consideration of $8 million, contingent consideration of $5.2 million
and issued shares valued at $3.8 million (see note 29 for further details).
As further detailed in Note 25, on 21 July 2016, RPM’s Russian subsidiary received an unexpected adverse
judgement against it from the Arbitration Court of Moscow relating to advisory work which it performed for a
Russian company during 2014. This has resulted in RPM fully providing for this debt in 2016. The Company has
appealed this judgement.
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected the Group’s
operations, results or state of affairs, or may do so in future years.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |11
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DIRECTORS’ REPORT
9.
Information on Current Directors and Company Secretary
Directors
Allan
Brackin
Dr Ian
Runge
Ross
Walker
Experience
Chairman, Non-executive Director. Joined the Board in November 2011.
Allan has been involved in the technology industry for over 30 years at both
executive and non- executive level. Allan was formerly Director and Chief
Executive Officer of Volante Group Limited from 2000-2004. From 1986 –
2000 Allan cofounded a number of IT companies which all became part of
the Volante Group.
Qualifications: Bachelor of Applied Science.
Other listed company directorships in last three years: Director of GBST
Holdings Limited since 2005
Non-executive Director, company founder. Director since December 1986.
Qualifications: M.E.(Mining Engineering), Ph D. (Economics), FAusIMM,
FAICD
Other listed company directorships in last three years: None
Non–executive Director. Joined the Board in March 2007.
Joined Pitcher Partners Brisbane (previously Johnston Rorke) in 1985,
Managing Partner in 1992 – 2008 and again from 2014-to date.
Predominantly involved in corporate finance, auditing, valuations, capital
raisings and mergers and acquisitions for the past 20 years.
Qualifications: Bachelor of Commerce, FCA
Other listed company directorships in last three years: None
Richard
Mathews
Appointed Managing Director 28 August 2012.
Richard’s previous roles includes Senior Vice President, International at J D
Edwards, CEO of Mincom Ltd, Chief Executive Officer and then Non-
Executive Chairman of eServGlobal Limited.
Qualifications: Bachelor of Commerce, Bachelor of Science, ACA
Other listed company directorships in last three years: Non-executive
chairman and director of eServGlobal Ltd in 2009 - 2014. Richard also
currently sits on the Board of METS Ignited.
Special
responsibilities
Chairman
Member and
Chairman – HR and
Remuneration
Committee
Member -Audit
and Risk
Committee
Non-executive
Director
Member – Audit
and Risk
Committee
Non-executive
Director
Member and
Chairman – Audit
and Risk
Committee
Member – HR and
Remuneration
Committee
Executive
Managing Director
Member – HR and
Remuneration
Committee
Company Secretary
James O’Neill, Group General Counsel and Company Secretary. Joined RungePincockMinarco Limited in December
2012. Qualifications: Bachelor of Laws and Bachelor of Information Technology from Queensland University of
Technology, Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia,
Solicitor and Member of the Queensland Law Society and Associate Member of the Governance Institute of
Australia (AGIA) and Chartered Institute of Secretaries (ACIS).
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |12
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DIRECTORS’ REPORT
10. Meetings of Directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year
ended 30 June 2016 and the number of meetings attended by each Director were:
Full meetings
of Board of Directors
Audit & Risk
Committee
HR & Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
Allan Brackin
Dr Ian Runge
Ross Walker
Richard Mathews
9
9
8
9
11.
Insurance of Officers
9
9
9
9
4
4
4
-
4
4
4
-
1
-
1
1
1
-
1
1
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as
a Director or executive, for which they may be personally liable, except where there is a lack of good faith.
During the financial year, the Company paid insurance premiums to insure the Directors and Officers of the
Company against certain risks associated with their activities as Officers of the Company. The terms of that policy
prohibit disclosure of the nature of liability covered, the limit of such liability and the premium paid.
12.
Shares Under Option
Unissued ordinary shares of RungePincockMinarco Limited under option at the date of this report are as follows:
Date options granted
29/11/20131
19/02/2014
31/03/2014
31/10/2014
03/03/20151
15/07/2015
08/09/20151
31/10/2015
03/03/2016
Expiry date
29/11/2018
19/02/2019
31/03/2019
31/10/2019
03/03/2020
15/07/2020
08/09/2020
31/10/2020
03/03/2021
Issue price of shares
$0.68
$0.67
$0.73
$0.61
$0.59
$0.57
$0.56
$0.54
$0.39
Number under option
1,593,000
166,666
250,000
100,000
4,798,666
250,000
4,335,000
50,000
300,000
11,843,332
1 Included in these options were options granted as remuneration to the five highest remunerated officers during
the year. Details of options granted to the five highest remunerated officers who are also key management
personnel are disclosed in section 20E of the Remuneration Report. There are no Officers in the Company who are
not also identified as key management personnel.
No option holder has any right under the options to participate in any other share issue of the Company or any
other entity.
13.
Shares issued on the exercise of options
No shares have been issued under the plan during the year.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |13
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DIRECTORS’ REPORT
14.
Environmental Legislation
RungePincockMinarco Limited and its controlled entities are not subject to any particular and significant
environmental regulation under a law of the Commonwealth or of a State or Territory.
15.
Non-audit Services
Details of the amounts paid or payable to the Company’s auditor and related practices of the auditor for audit and
non-audit services provided during the year are set out below.
The Board has considered the position and in accordance with advice received from the Audit Committee, is
satisfied that the provision of non-audit services is compatible with the general standard of independence of
auditors imposed by the Corporations Act 2001.
BDO (QLD) Pty Ltd
2016
$
2015
$
Preparation of Income tax return and other taxation services
14,725
5,600
16.
Indemnity of Auditors
The Company has agreed to indemnify and hold harmless its auditors, BDO Audit Pty Ltd, against any and all losses,
claims, costs, expenses, actions, demands, damages, liabilities or any other proceedings whatsoever incurred by
the auditors in respect of any claim by a third party arising from or connected to any breach by the Company.
17.
Auditor’s Independence Declaration
In accordance with Section 307C of the Corporations Act 2001, a copy of the auditor’s independence declaration is
enclosed on page 23.
18.
Directors’ Interests
The relevant interest of each director in the shares and options issued by the Company, as notified by the Directors
to the ASX in accordance with section 205G(1) of the Corporations Act 2001, at the date of this report is as follows:
A Brackin
Dr I Runge
R Walker
R Mathews 1
Options over
ordinary shares
RungePincockMinarco Limited
Ordinary
shares
1,064,978
16,335,484
925,000
8,186,805
-
-
-
-
1 Includes 175,560 shares held by R Mathews as trustee under a bare trust arrangement for a third party.
19.
Rounding of Amounts
The Company is a type of company referred to in ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191 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, the nearest dollar.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |14
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited
The remuneration report is set out under the following main headings:
A.
B.
C.
D.
E.
F.
20A.
Principles used to determine the nature and amount of remuneration;
Service agreements;
Details of remuneration;
Bonus and share-based compensation benefits;
Equity instruments held by key management personnel; and
Other transactions with key management personnel.
Principles Used to Determine the Nature and Amount of Remuneration
Remuneration and compensation have the same meaning in this report.
This report discusses the Group’s policies in regard to compensation of key management personnel (KMP). The
identified KMP have authority and responsibility for planning, directing and controlling the activities of the Group.
In addition to the Directors, the Company assessed the Chief Financial Officer, Group General Counsel & Company
Secretary and the Executive General Managers of the Software Division and Advisory Division as having authority
and responsibility for planning, directing and controlling all activities of the Group, directly or indirectly, during the
2016 financial year.
The Board has established a HR and Remuneration Committee to assist with remuneration and incentive policies
enabling the Group to attract and retain KMP and Directors who will create value for shareholders and support the
Group’s mission. The HR and Remuneration Committee obtains independent advice if required on the
appropriateness of compensation packages given trends in comparative companies. In the 2016 financial year the
Committee did not use a remuneration consultant. The Group’s Corporate Governance Statement provides further
information on the role of this Committee.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic, operational objectives and achieve the broader outcome of creation of value for
shareholders.
The compensation structures take into account:
The capability and experience of the KMP;
Their ability to control the relevant segment’s performance; and
The segment or Group earnings.
Compensation packages include a mix of fixed and short-term and long-term performance-based incentives. In
addition to their salaries, the Group also provides non-cash benefits to its KMP and contributes to a defined
contribution superannuation plan (or equivalent pension plan) on their behalf.
Fixed Compensation
Fixed compensation is calculated on a total cost basis and includes salary, allowances, non-cash benefits, employer
contributions to superannuation funds and any fringe benefits tax charges related to employee benefits, including
motor vehicles.
Compensation levels are reviewed using an individual approach, based on evaluation of the individual, and a
comparison to the market. A KMP’s compensation is also reviewed on promotion.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |15
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20A.
Principles Used to Determine the Nature and Amount of Remuneration (Continued)
Performance Linked Compensation
Performance linked compensation includes both short-term and long-term incentives and is designed to reward
KMP for meeting and exceeding their Key Performance Objectives (KPOs). The Short-Term Incentive (STI) is an ‘at
risk’ bonus provided in the form of cash, while the Long-Term Incentive (LTI) is provided as options over ordinary
shares of the Company under the rules of the Employee Share Option Plan (ESOP) (see note 24 to the financial
statements). The current long-term performance incentive structure was implemented in the 2008 year and
amended in 2010, 2012 and 2013 years.
The table below sets out the performance based compensation paid to KMP together with earnings for the same
period. Performance based compensation consists of STI cash bonus and LTI share-based payments.
Performance based compensation
Year ended
30 June
2012
2013
2014
2015
2016
STI
$’000
56
-
-
1,072
112
LTI
$’000
68
(71)
33
90
230
Total
$’000
124
(71)
33
1,162
342
EBITDA1
$’000
12,064
1,850
(945)
2,600
(3,224)
Dividends
$’000
Share price
$
2,482
2,482
-
-
-
0.35
0.47
0.58
0.56
0.41
1 Earnings before Interest, Tax, Depreciation, Impairment and Restructuring costs
Short-term Incentive Bonus
Effective 1 July 2012, the Group implemented a variable pay structure, referred to as the Executive General
Manager Incentive Plan (EGMIP). Each of the identified KMP’s has a portion of their remuneration linked to the
EGMIP. The key objective of the EGMIP is to create clear alignment between individual and business performance
and remuneration by providing a performance-based reward to participants in line with their relative contribution
to the Group. The EGMIP achieves the alignment by focusing participants on achieving goals which contribute to
sustainable shareholder value, and providing a clear link between performance and the Group financial result. In
2016 R Mathews, M Kochanowski and J O’Neill had 100% of their STI based on the Company’s adjusted EBIT
performance. C Halliday (Software) and P Baudry (Advisory) had 30% of their STI based on the Company’s adjusted
EBIT performance and 70% based on other performance metrics directly related to their respective divisions. Cash
bonuses are paid, provided for or forfeited in the year to which they relate.
The Board assessed performance of the KMP’s against the EGMIP’s for the 2016 Financial Year as shown in the
table below:
Fixed Compensation
R Mathews
M Kochanowski
J O’Neill
C Halliday
P Baudry 1
50%
83%
83%
50%
67%
Variable
Compensation
50%
17%
17%
50%
33%
STI awarded
STI forfeited
-
-
-
24%
-
100%
100%
100%
76%
100%
1 Mr Baudry elected to forgo his entitlement to payment for 20% of his STI that would have been payable under the terms of his plan
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |16
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20A.
Principles Used to Determine the Nature and Amount of Remuneration (Continued)
Long-term Incentive
Options were issued in the 2012, 2013, 2014, 2015 and 2016 financial years under the Company’s Employee Share
Option Plan (ESOP) to KMP’s at the discretion of the Board. Consistent with the current ESOP plan terms approved
by shareholders at the Company’s 2013 Annual General Meeting, the rules of the ESOP Plan enable the Board to
determine the applicable vesting criteria and to set a timetable for vesting of options in the Offer Document,
including vesting in tranches over a defined period. The Board has the discretion on whether or not to set
performance hurdles for vesting or to link vesting solely to a defined service period in order to drive key staff
retention and reward longevity of service. The options issued since November 2013 vest in tranches over a three
year period from the date of grant, have vesting conditions linked to the holder maintaining employment with the
Group over that period and are issued at an exercise price based on the volume weighted average price of the
Company’s shares in the five days prior to each grant.
The Board has a Margin Loan policy that restricts Directors and executives of the Group from entering into financial
contracts secured by shares and other securities of the Company. This policy requires the approval of the Chairman
of the Board for any financial arrangements or facilities related to Company shares held by the Directors and
executives.
Non-executive Directors
Fees and payments to Non-executive Directors reflect the demands which are made on, and the responsibilities of
the Directors. Non-executive Directors’ fees and payments are reviewed periodically by the Board and are
determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by
shareholders. The pool currently stands $500,000, unchanged since it was approved in the 2009 Annual General
Meeting.
Non-executive Directors’ base remuneration was last reviewed with effect from 31 December 2014. Both the
Chairman’s and Non-executive Directors’ remuneration is inclusive of committee fees.
20B.
Service Agreements
Details of contracts with Directors and KMP of the Group are set out below.
Terms of agreement
Termination benefit
Notice Period
A Brackin
Dr I Runge
R Walker
R Mathews
M Kochanowski
J O’Neill
C Halliday 1
P Baudry 1
1 Australian dollar equivalent, salary of C Halliday is set and paid in US Dollars and P Baudry is set and paid in Chinese Yuan and Russian
Rubles.
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Unlimited in term
Nil
Nil
Nil
6 months
3 months
2 months
1 month
1 month
Nil
Nil
Nil
6 months
3 months
2 months
1 month
1 month
Base salary including
superannuation
$100,000
$80,000
$70,000
$501,250
$280,000
$280,000
$493,828
$380,937
The KMP’s are also entitled to receive upon termination of employment their statutory entitlements of accrued
annual and long service leave (where applicable), together with any superannuation benefits (where applicable).
Compensation levels are reviewed each year to meet the principles of the remuneration policy.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |17
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20C. Details of Remuneration
Directors
Chairman (Non-executive)
Allan Brackin
Executive Directors
Richard Mathews - Managing Director
Non-executive Directors
Dr Ian Runge
Ross Walker
Other Key Management Personnel
In addition to executive Directors mentioned above, the following persons were assessed by the Company as the
executives who had the greatest authority and responsibility for planning, directing and controlling all activities of
the Group, directly or indirectly, during the 2016 financial year:
Name
Position
Michael Kochanowski
Chief Financial Officer
James O’Neill
Craig Halliday
Group General Counsel and Company Secretary
Executive General Manager – Software Division
Philippe Baudry
Executive General Manager - Advisory Division
Details of remuneration of each Director of RungePincockMinarco Limited and each of the other KMP of the Group
are set out in the following tables.
Short-term benefits
Cash salary
and fees1
STI
cash bonus
Non –
monetary
benefits 2
Post -
employm
ent
benefits
Share-
based
payment
Options
Total
Proportion
of remun-
eration
perform-
ance
related
$
$
$
$
$
$
%
91,324
80,000
70,000
428,218
669,542
-
-
-
-
-
-
-
-
9,994
9,994
8,676
-
-
35,000
43,676
-
-
-
-
-
100,000
80,000
70,000
473,212
723,212
-
-
-
-
-
2016
Directors
A Brackin
Dr I Runge
R Walker
R Mathews
Other Key Management Personnel
M Kochanowski
J O’Neill
C Halliday
P Baudry
257,695
240,483
483,554
394,082
1,375,814
2,045,356
Total
-
-
112,190
-
112,190
112,190
9,994
9,994
30,786
12,433
63,207
73,201
22,415
22,415
24,875
-
69,705
113,381
40,330
41,064
65,615
82,820
330,434
313,956
717,020
489,335
229,829 1,850,745
229,829 2,573,957
12%
13%
25%
17%
18%
13%
Value of
options
as
propor-
tion of
remun-
eration
%
-
-
-
-
-
12%
13%
9%
17%
12%
9%
1 Includes movement in accrued leave entitlements
2 Includes car park and health insurance
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |18
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20C. Details of Remuneration (Continued)
Short-term benefits
Cash salary and
fees
STI
cash bonus
Non –
monetary
benefits 1
Post -
employm
ent
benefits
Termin-
ation
benefits
Total
Share-
based
payment
Options
Proportion
of remun-
eration
perform-
ance
related
$
$
$
$
$
$
$
%
2015
Directors
A Brackin
Dr I Runge
R Walker
R Mathews
100,457
80,000
75,000
467,293
722,750
-
-
-
500,000
500,000
Other Key Management Personnel
M Kochanowski
J O’Neill
C Halliday
P Baudry
K Wallis2
227,798
229,358
421,259
422,718
213,653
1,514,786
2,237,536
44,000
45,872
454,545
27,500
-
571,917
1,071,917
Total
-
-
-
11,150
11,150
11,150
11,150
24,037
10,384
7,433
64,154
75,304
9,543
-
-
35,000
44,543
21,641
21,789
22,978
-
20,297
86,705
131,248
-
-
-
-
-
-
-
-
-
-
-
-
-
-
237,790
237,790
237,790
11,391
11,909
45,901
23,305
(2,753)
89,753
89,753
110,000
80,000
75,000
1,013,443
1,278,443
315,980
320,078
968,720
483,907
476,420
2,565,105
3,843,548
-
-
-
49.3
39.1
17.5
18.1
51.7
10.5
(0.6)
25.8
30.2
Value of
options
as
propor-
tion of
remun-
eration
%
-
-
-
-
-
3.6
3.7
4.7
4.8
(0.6)
3.5
2.3
1 Includes car park and health insurance
2 Ceased to be key management personnel during the year
The termination benefit includes contractual termination benefit and superannuation (where applicable).
20D.
Bonuses and Share-based Compensation Benefits
All options refer to options over ordinary shares of RungePincockMinarco Limited, which are exercised on a one-
for-one basis under the ESOP Plan.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from
grant date to vesting date, based on an estimate of the number of options likely to vest, and the amount is included
in the remuneration tables above. Fair values at grant date are determined using Trinominal Lattice and Hoadley’s
Hybrid models that take into account the exercise price, the term of the option, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the
term of the option. Model inputs for options granted during the year are disclosed in note 24 in the financial report.
Details of options over ordinary shares in the Company provided as remuneration to each director and each of the
KMP’s and the Group are set out below. When exercisable, each option is convertible into one ordinary share of
RungePincockMinarco Limited. Further information on the options is set out in note 24 to the financial statements.
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20D.
Bonuses and Share-based Compensation Benefits (Continued)
Number of options granted
during the year
Number of options vested
during the year 2
Value of options at
grant date 1
$
-
-
-
-
38,460
33,652
76,920
48,075
A Brackin
Dr I Runge
R Walker
R Mathews
M Kochanowski
J O’Neill
C Halliday
P Baudry
1 The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as
-
-
-
-
200,000
175,000
400,000
250,000
83,333
91,667
200,000
200,000
-
-
-
-
part of remuneration.
2 Options granted in November 2013 vested in November 2015 with an exercise price of $0.68 cents expiring in November
2018 and to-date no options in this grant have been exercised. Options granted in March 2015 vested in March 2016 with
an exercise price of $0.59 cents expiring in March 2020 and to-date no options in this grant have been exercised.
Options granted under the ESOP plan carry no dividend or voting rights until the options vest, are exercised and
converted to ordinary shares whereupon those ordinary shares carry dividend and voting rights consistent with all
other ordinary shares of the Company.
The assessed fair value at grant date of options granted to the individuals is allocated equally over the period
from grant date to vesting date, and the amount is included in the remuneration tables above.
Details of remuneration: Bonuses and share-based compensation benefits
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting
period are as follows:
Grant date
29/11/2013
29/11/2013
29/11/2013
03/03/2015
03/03/2015
03/03/2015
8/09/2015
8/09/2015
8/09/2015
Vesting and exercise
date
30/11/2014
30/11/2015
30/11/2016
03/03/2016
03/03/2017
03/03/2018
8/09/2016
8/09/2017
8/09/2018
Expiry date
29/11/2018
29/11/2018
29/11/2018
03/03/2020
03/03/2020
03/03/2020
8/09/2020
8/09/2020
8/09/2020
Exercise
Price
$
0.68
0.68
0.68
0.59
0.59
0.59
0.56
0.56
0.56
Value per
option at grant date
$0.21
$0.23
$0.25
$0.19
$0.23
$0.25
$0.17
$0.19
$0.21
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DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20D.
Bonuses and Share-based Compensation Benefits (Continued)
Details of options over ordinary shares in the Company provided as remuneration to key management personnel
are shown below. When exercisable, each option is convertible into one ordinary share of RungePincockMinarco
Limited. The vesting conditions are set out in Section 20A.
The table also shows the percentages of the options granted that vested and were forfeited during the year. Further
information on the options is set out in note 24 to the financial statements.
Year
(FY) of
grant
Years in
which
option may
vest
Number of
options
granted
Value of
option at
grant date 1
A Brackin
Dr I Runge
R Walker
R Mathews
M Kochanowski
J O’Neill
C Halliday
P Baudry
-
-
-
-
2014
2015
2016
2014
2015
2016
2014
2015
2016
2014
2015
2016
-
-
-
-
2015-2017
2016-2018
2017-2019
2015-2017
2016-2018
2017-2019
2015-2017
2016-2018
2017-2019
2015-2017
2016-2018
2017-2019
-
-
-
-
50,000
200,000
200,000
50,000
225,000
175,000
500,000
100,000
400,000
50,000
550,000
250,000
-
-
-
-
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
$0.21 - $0.25
$0.19 - $0.25
$0.17 – $0.21
Number
of
options
vested
during
the year
-
-
-
-
16,667
66,667
-
16,667
75,000
-
166,666
33,334
-
16,666
183,334
-
Veste
d
%
-
-
-
-
33%
33%
-
33%
33%
-
33%
33%
-
33%
33%
-
Number
of
options
forfeited
during
the year
Value at
date of
forfeiture 2
Forfeite
d %
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 The value at grant date calculated in accordance with AASB 2 Share-based Payment of options granted during the year as part of remuneration
2 The value of the options that were granted as part of remuneration and that were forfeited (lapsed) during the year because a vesting condition was not
satisfied was determined at the time of lapsing, but assuming the condition was satisfied.
20E.
Equity Instruments held by Key Management Personnel
No shares were granted as compensation in 2016 (2015: nil). The number of shares and options over shares in
the Company held during the financial year by each Director of RungePincockMinarco Limited and each of the
other key management personnel of the Group, including their personally-related entities, is set out below:
(i)
Options
Name
Balance at the
start of the year
Granted as
compensation
Forfeited,
exercised and
expired
Balance at the
end of the year
Vested and
exercisable
A Brackin
Dr I Runge
R Walker
R Mathews
M Kochanowski
J O’Neill
C Halliday
P Baudry
-
-
-
-
250,000
275,000
600,000
600,000
-
-
-
-
200,000
175,000
400,000
250,000
-
-
-
-
-
-
-
-
-
-
-
-
450,000
450,000
1,000,000
850,000
-
-
-
-
99,999
108,333
366,666
216,666
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |21
For personal use only
DIRECTORS’ REPORT
20.
Remuneration Report - Audited (Continued)
20E.
Equity Instruments held by Key Management Personnel (Continued)
(ii)
Ordinary Shares
Balance at
the start of
the year
Sold
during the
year
Exercise
of
Options
Acquired during
the year (on
market)
Balance at the
end of the year
Directors
A Brackin
Dr I Runge
1,064,978
16,335,484
-
-
R Walker
R Mathews 1
Other key management personnel of the Group
7,847,003
925,000
-
-
M Kochanowski
100,971
-
-
-
-
-
-
-
-
-
339,802
1,064,978
16,335,484
925,000
8,186,805
49,029
150,000
10,000
J O’Neill
C Halliday 1
-
P Baudry
1 Includes 175,560 shares held by R Mathews as trustee under a bare trust arrangement for C Halliday.
2,491,115
222,909
475,000
51,000
20,000
-
-
-
-
-
2,966,115
273,909
30,000
No options were exercised during the 2016 year.
20F. Other Transactions with Key Management Personnel
No other transactions with Key Management Personnel occurred during the 2016 year.
2015 Annual General Meeting (AGM)
The Company’s 2015 remuneration report was unanimously adopted by show of hands at 2015 AGM. The Company
did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
Remuneration report - End
This report is made in accordance with a resolution of the Directors.
Allan Brackin
Chairman
Dated: 19 August 2016
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |22
For personal use only
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY P A GALLAGHER TO THE DIRECTORS OF
RUNGEPINCOCKMINARCO LIMITED
As lead auditor of RungePincockMinarco 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 RungePincockMinarco Limited and the entities it controlled during the
period.
P A Gallagher
Director
BDO Audit Pty Ltd
Brisbane, 19 August 2016
BDO Audit Pty Ltd ABN 33 134 022 870 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 Audit Pty Ltd 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.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016
For personal use only CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Notes
2016
$’000
2015
$’000
Revenue from continuing operations
Services
Licence sales
Software maintenance
Other revenue
Revenue
Rechargeable expenses
Net Revenue
Expenses
Amortisation
Depreciation
Employee benefits expense
Other employee costs
Office expenses
Professional services
Rent
Restructure costs
Impairment of goodwill
Redundancy costs
Travel expenses
Other expenses
Loss before finance costs and income tax
Finance income
Finance costs
Net finance costs
Loss before income tax
Income tax benefit/(expense)
Loss
30,026
11,752
15,010
338
57,126
(4,476)
52,650
(931)
(948)
(42,546)
(726)
(3,033)
(1,596)
(3,886)
-
(4,055)
(361)
(2,166)
(1,920)
(62,168)
(9,518)
335
(38)
297
(9,221)
(42)
(9,263)
36,428
15,944
13,701
1,558
67,631
(5,612)
62,019
(1,060)
(3,080)
(44,287)
(772)
(3,146)
(1,318)
(5,948)
(2,469)
(3,211)
-
(2,112)
(1,835)
(69,238)
(7,219)
523
(173)
350
(6,869)
112
(6,757)
12
11
4
4
5
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |24
For personal use only
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Notes
2016
$’000
2015
$’000
Loss
Other comprehensive income
Items that may be classified subsequently to profit or loss:
Foreign currency translation differences
Other comprehensive income / (loss), net of tax
Total comprehensive income
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
23
23
(9,263)
(6,757)
(69)
(69)
(9,332)
(5.3)
(5.3)
42
42
(6,715)
(3.9)
(3.9)
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |25
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Notes
2016
$’000
2015
$’000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Work in progress
Current tax receivable
Other assets
Total current assets
Non-current assets
Trade and other receivables
Investments accounted for using the equity method
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Current tax liabilities
Other Liabilities
Total current liabilities
Non-current liabilities
Provisions
Deferred tax liabilities
Other Liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Total equity
7
8
9
10
8
27(c)
11
6
12
13
14
15
14
6
15
16
17
17
18,142
12,648
1,471
239
1,658
34,158
283
26
2,137
8,656
17,499
28,601
62,759
5,210
3,049
183
8,480
16,922
1,691
17
475
2,183
19,105
43,654
22,557
17,449
1,148
105
1,658
42,917
351
26
2,564
8,639
22,257
33,837
76,754
8,003
3,113
73
8,508
19,697
1,953
-
185
2,138
21,835
54,919
67,048
(3,013)
(20,381)
43,654
69,894
(3,857)
(11,118)
54,919
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |26
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Contributed
equity
Reserves
Retained profits
Total equity
$'000
69,894
$'000
(3,857)
$'000
$'000
Balance at 1 July 2015
Loss for the year
Other comprehensive income
Total comprehensive income
Transactions with owners in their capacity as owners
Share buyback, net of transaction costs
Employee share options
Balance at 30 June 2016
Balance at 1 July 2014
Loss for the year
Other comprehensive income
Total comprehensive income
-
-
-
(2,846)
-
(2,846)
67,048
-
-
-
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs
21,216
Employee share options
Balance at 30 June 2015
-
21,216
69,894
-
(69)
(69)
-
913
913
-
42
42
-
384
384
(11,118)
(9,263)
-
(9,263)
-
-
-
(4,361)
(6,757)
-
(6,757)
-
-
-
(3,857)
(11,118)
(3,013)
(20,381)
48,678
(4,283)
54,919
(9,263)
(69)
(9,332)
(2,846)
913
(1,933)
43,654
40,034
(6,757)
42
(6,715)
21,216
384
21,600
54,919
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |27
For personal use only
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Notes
2016
$'000
2015
$'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Redundancies
Onerous leases payments
Make good - Brisbane office
Income taxes refunded
Income taxes paid
Net cash (outflow) / inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Net cash outflow from investing activities
Cash flows from financing activities
Share buyback
Contributions of equity
Transaction costs
Net cash inflow/(outflow) from financing activities
14
21
Net increase/(decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
7
64,184
(63,909)
275
335
(38)
(608)
(626)
-
167
(301)
(796)
(563)
22
(241)
(782)
(2,847)
-
-
(2,847)
(4,425)
22,557
10
18,142
66,055
(66,870)
(815)
523
(173)
(1,018)
(1,453)
(988)
846
(532)
(3,610)
(352)
4
(2,559)
(2,907)
-
21,778
(796)
20,982
14,465
7,521
571
22,557
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |28
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
RungePincockMinarco Limited is a listed public company, incorporated and domiciled in Australia.
The financial report comprises the consolidated entity (“Group”) consisting of RungePincockMinarco Limited and
its subsidiaries.
(a)
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001. RungePincockMinarco Limited is a for-profit entity for the purposes of preparing the financial statements.
Compliance with IFRS
The consolidated financial statements of RungePincockMinarco Limited also comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
(b)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by
RungePincockMinarco Limited as at 30 June 2016 and the results of all controlled entities for the year then ended.
RungePincockMinarco Limited and its controlled entities together are referred to in this financial report as the
“consolidated entity” or the “Group”.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group (refer to
note 1(k)).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |29
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(c)
Summary of Significant Accounting Policies (Continued)
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 national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
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,
the deferred income tax is 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 balance sheet date 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 for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses in the tax
jurisdiction in which they arose.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the parent entity 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.
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.
Tax consolidation legislation
RungePincockMinarco Limited and its wholly owned Australian controlled entities have implemented the tax
consolidation legislation.
The head entity, RungePincockMinarco Limited, and the controlled entities in the tax consolidated group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, RungePincockMinarco Limited also recognises the
current tax liabilities or assets and the deferred tax assets arising from the unused tax losses and unused tax
credits assumed from controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable or payable to other entities in the Group. Details about the tax funding agreements are
disclosed in note 5.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |30
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(d)
Summary of Significant Accounting Policies (Continued)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operational decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Managing Director.
The assets and liabilities of the Group are regularly reviewed on a consolidated basis but are not regularly
reported to the chief operating decision maker at a segment level. As such this information has not been included
in the Operating Segment note 2.
(e)
i)
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The
consolidated financial statements are presented in Australian dollars, which is RungePincockMinarco
Limited’s functional and presentation currency.
ii)
Transactions and balances
Foreign currency transactions are initially translated into the functional currency using the exchange
rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are
deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable
to part of the net investment in a foreign operation.
Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation
differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss
are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-
monetary assets such as equities whose changes in the fair value are presented in other comprehensive
income are recognized in other comprehensive income.
iii)
Group entities
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet;
income and expenses for each income statement and statement of comprehensive income are
translated at daily exchange rates; and
all resulting exchange differences are recognised in other comprehensive income.
Fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of
the foreign entities and translated at the closing rate.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |31
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(f)
i)
Summary of Significant Accounting Policies (Continued)
Revenue Recognition
Sale of licences
Revenue from the sale of licences is recognised when the amount can be reliably measured and all
significant risks and rewards of ownership have been transferred to the buyer. In most cases this
coincides with the transfer of legal title or the passing of possession to the buyer.
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
ii)
Consulting
Revenue from the provision of consulting services is recognised on an accruals basis in the period in which
the consulting service is provided. Revenue from the provision of these services is calculated with
reference to the professional staff hours incurred on each client assignment adjusted for any time that
may not be recoverable.
iii)
Software maintenance
When the outcome of a transaction involving software maintenance can be estimated reliably, revenue
associated with the transaction is recognised on a straight-line basis over the service period.
iv)
Interest revenue
Interest revenue is recognised using the effective interest method. It includes the amortisation of any
discount or premium.
(g)
Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. Trade receivables are generally due for settlement
within 30 days. They are presented as current assets unless collection is not expected for more than 12 months
after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off by reducing the carrying amount directly. An allowance for impairment of trade receivables is
established when there is objective evidence that the Group will not be able to collect all amounts due according
to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation and default or delinquency in payments are considered
indicators that the trade receivable may be impaired. The amount of the provision is the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective
interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is
immaterial. The amount of the allowance is recognised in other expenses in profit or loss. Subsequent recoveries
of amounts previously written off are credited against other expenses in profit or loss.
(h) Work in Progress
Work in progress represents costs incurred and profit recognised on client assignments and services that are in
progress at balance date. Work in progress is valued at net realisable value after providing for any foreseeable
losses.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |32
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(i)
Summary of Significant Accounting Policies (Continued)
Investments and Other Financial Assets
Equity investments that are held for trading are measured at fair value through profit or loss. For all other equity
investments, the group can make an irrevocable election at initial recognition of each investment to recognise
changes in fair value through other comprehensive income (OCI) rather than profit or loss.
All current investments in equity investments are classified as at fair value through other comprehensive income.
Such investments are initially and subsequently measured at fair value, with the initial fair value being cost.
Unrealised gains or losses on investments in an equity instrument are recognised in a reserve until the investment
is sold, collected or otherwise disposed of, at which time the cumulative gain or loss is transferred to the Asset
Realisation Reserve.
The Company derecognises an investment in an equity instrument when it is sold or it transfers the investment
and the transfer qualifies for derecognition in accordance with AASB 9. Upon derecognition, unrealised
gains/losses net of tax relating to the investment are transferred from the revaluation reserve to the realisation
reserve.
Interest bearing investments are recognised initially at fair value and are subsequently measured at amortised
cost. Amortised cost is calculated with any difference between cost and redemption value being recognised in
the statement of comprehensive income over the period of the investment on an effective interest basis.
(j)
Leases
Leases of property, plant and equipment, where the Group as lessee has substantially all the risks and rewards of
ownership, are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value
of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in other short-term and long-term borrowings. Each lease
payment is allocated between the liability and finance cost.
The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The property, plant and equipment acquired
under finance leases is depreciated over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as
lessee are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the profit or loss on a straight line basis over the period of the lease.
Lease income from operating leases where the Group is a lessor is recognised in income on a straight line basis
over the lease term.
(k)
Business Combinations
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or businesses under common control, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair
values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.
The consideration transferred also includes the fair value of any contingent consideration arrangement and the
fair value of any pre-existing equity interest in the subsidiary.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |33
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(k)
Business Combinations (Continued)
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values
at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest
in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net
identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share
of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an independent financier under
comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
(l)
Impairment of Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at each reporting date.
(m)
Cash and Cash Equivalents
For cash flow statement presentation purposes, cash and cash equivalents include 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 converted 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 on the
consolidated statement of financial position.
(n)
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight line basis to
write off the net cost of each item of property, plant and equipment over its estimated useful life to the
consolidated entity, or in case of lease hold improvements, the shorter lease term. Estimates of remaining useful
lives are made on a regular basis for all assets.
The estimated useful lives for plant and equipment is ranging between 2 and 20 years.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |34
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(n)
Property, Plant and Equipment (Continued)
Gains and losses on disposals are determined by comparing proceeds with the carrying amount of the assets.
These are included in profit or loss.
(o)
i)
Intangible Assets
Software developed or acquired for sales and licensing
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects
(relating to the design and testing of new areas of products) are recognised as intangible assets when it
is probable that the project will, after considering its commercial and technical feasibility, be completed
and generate future economic benefits and its costs can be measured reliably. The expenditure
capitalised comprises all directly attributable costs, including costs of materials, services, direct labour
and an appropriate proportion of overheads. Other development expenditures that do not meet these
criteria are recognised as an expense as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period. Capitalised development costs and
acquired software are recorded as intangible assets and amortised from the point at which the asset is
ready for use on a straight line basis over its useful life, which varies from three to five years.
ii)
Software – internal management systems
Software licences used in internal management systems, whether acquired or internally developed are
stated at cost less amortisation. They are amortised on a straight line basis over the useful life from 2.5
to 5 years.
iii)
Patents and trademarks
Costs associated with patents and trademarks are expensed as incurred.
iv)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of
the net identifiable assets of the acquired subsidiary/business at the date of acquisition. Goodwill on
acquisition is included in intangible assets. Goodwill is not amortised. Instead, goodwill is tested for
impairment annually or more frequently if events or circumstances indicate that it might be impaired and
is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash generating units for the purposes of impairment testing. The allocation is
made to those cash generating units or groups of cash generating units that are expected to benefit from
business combination in which goodwill arose, identified according to operating segments or
components of operating assets (note 2).
(p)
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |35
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(q)
Summary of Significant Accounting Policies (Continued)
Borrowing Costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
(r)
i)
Employee Benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled 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 amounts expected to be paid when the liabilities are settled. The liability for annual
leave and long service leave is recognised in the provision for employee benefits.
Other long-term employee benefit obligations
The liability for long service leave and other benefits which is not expected to be settled within 12 months
after the end of the period in which the employees render the related service is recognised in the provision
for employee benefits and 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 using the projected unit
credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the
end of the reporting period on national government bonds with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
ii)
Bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that
takes into consideration the profit attributable to the Company’s shareholders after certain adjustments.
The Group recognises a provision where contractually obliged or where there is a past practice that has
created a constructive obligation.
Liabilities for bonus plans are expected to be settled within 12 months and are measured at the amounts
expected to be paid when they are settled.
iii)
Superannuation
The Group has a defined contribution superannuation plan for its eligible employees. Contributions to the
defined contribution fund are recognised as an expense as they become payable. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
iv)
Share-based payments
Share-based compensation benefits are provided to employees via the RungePincockMinarco Limited
employee share option plan (ESOP) and an employee share purchase plan. Information relating to these
schemes is set out in note 24.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |36
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(s)
Summary of Significant Accounting Policies (Continued)
Employee Benefits (Continued)
The fair value of options granted under the ESOP is recognised as an employee benefit expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the fair
value of the options granted, which includes any market performance conditions, but excludes the impact
of any service and non-market performance vesting conditions. Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest. The total expense is
recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that
are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision
to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
(s)
Value Added Taxes (Including Goods and Services Tax)
Revenues, expenses and assets are recognised net of the amount of Value Added Tax (VAT), except where the
amount of VAT is not recoverable from the relevant tax authority. In these circumstances the VAT is recognised
as part of the cost of acquisition of the asset or as part of the item as expense.
Receivables and payables are stated with the amount of VAT included. The net amount of VAT recoverable from,
or payable to, the relevant tax authority is included as a current asset or liability in the consolidated statement of
financial position.
Cash flows are presented on a gross basis. The VAT components of the cash flows arising from investing and
financing activities which are recoverable from, or payable to, the relevant tax authority are classified as operating
cash flows.
(t)
Contributed Equity
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.
(u)
i)
Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
the profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year.
ii)
Diluted earnings per share
Dilutive earnings per share adjusts the figures used in 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
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |37
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
(v)
Summary of Significant Accounting Policies (Continued)
Financial Guarantee Contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability
is initially measured at fair value and subsequently at the higher of the amount determined in accordance with
AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less
cumulative amortisation, where appropriate.
(w)
Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors
Reports) Instrument 2016/191 and accordingly, amounts in the financial statements and directors’ report have
been rounded off to the nearest $1,000, or in certain cases, the nearest dollar.
(x)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(y)
Critical Accounting Estimates and Significant Judgments
The preparation of the financial report in conformity with Australian Accounting Standards requires the use of
certain critical accounting estimates. It also requires management to exercise judgment in the process of applying
the accounting policies. The notes in the financial statements set out areas involving a higher degree of judgment
or complexity, or areas where assumptions are significant to the financial report such as:
intangible assets, including goodwill (note 12),
impairment of receivables (note 8, 22(a) and note 1(g)),
deferred tax assets (note 6).
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including reasonable expectations of future events. Management believes the estimates used in preparation of
the financial report are reasonable.
(aa)
Parent Entity Financial Information
The financial information for the parent entity, RungePincockMinarco Limited, disclosed in note 26 has been
prepared on the same basis as the consolidated financial statements, except as set out below:
(i)
Investments in subsidiaries
Investment in subsidiaries are accounted for at cost in the financial statements of RungePincockMinarco
Limited.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |38
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies (Continued)
(bb) New Accounting Standards and Interpretations Not Yet Adopted
Relevant accounting standards and interpretations that have recently been issued or amended but are not yet
effective and have not been adopted for the annual reporting period ended 30 June 2016, are as follows:
(i)
IFRS 15 Revenue from Contracts with Customers
This standard and its consequential amendments are currently applicable to annual reporting periods beginning on
or after 1 January 2018. This standard requires recognised 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 those goods or services. This means that revenue will be recognised when control of goods or services
is transferred, rather than on transfer of risks and rewards as is currently the case under IAS 18 Revenue. The Group
has not yet evaluated the impact adoption of this standard will have.
(j)
AASB16 Leases
This standard and its consequential amendments are currently 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 AASB117 Leases and related interpretations. AASB16 introduces a single lessee accounting
model that eliminates the requirement for leases to be classified as operating or finance leases. This means that
for all leases, a right-to-use asset and a liability will be recognised, with the right-to-use asset being depreciated
and the liability being unwound in principal and interest components over the life of the lease. The Group has
not yet evaluated the impact adoption of this standard will have.
(cc)
New and amended standards adopted by the Group
The Group has adopted all new Accounting Standards and Interpretations effective for the year ended 30 June
2016.
The adoption of these standards did not have any material impact on the current or any prior period and is not
likely to materially affect future periods.
Early adoption of standards
The Group has not elected to apply any pronouncements before their operative date.
2.
Operating Segments
Operating segments are reported in a manner consistent with the internal reporting provided to the CEO in order
to make decisions about resource allocations and to assess performance of the Group. The reports are split into
functional divisions: Software Division, Advisory Division and GeoGAS.
Software Division provides all of the Group’s Software offerings, including maintenance (support), training and
implementation services to mining companies.
Advisory Division provides consulting and advisory services which cover technical and economic analysis and
assessment of mining activities and resources on behalf of mining companies, financial institutions, customers
of mining companies (e.g. coal fired electricity generators), lessors and potential lessors of mineral rights to
mining companies, government departments and agencies and suppliers to mining companies and projects.
GeoGAS provides services to coal mining clients in respect of gas content testing and relevant consulting
services. Segment revenue, expenses and results include transfers between segments. Such transfers are priced
on an “arms-length” basis and are eliminated on consolidation.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |39
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
2.
Operating Segments (Continued)
Information about reportable segments
2016
2015
Software
Division
Advisory
Division
GeoGAS
Total
Software
Division
Advisory
Division
GeoGAS
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Revenue
External Sales
33,388
20,291
3,208
56,887
36,803
25,223
4,222
66,248
Inter-segment sales
603
287
Total Revenue
33,991
20,578
Inter-segment expenses
Rechargeable expenses
Net revenue
Total Expenses
(262)
(1,333)
32,396
(698)
(3,009)
16,871
104
3,312
(34)
(134)
3,144
994
57,881
(994)
(4,476)
52,411
1,739
38,542
(1,163)
(1,200)
36,179
1,171
26,394
(1,864)
(4,250)
20,280
125
4,347
(8)
(162)
4,177
3,035
69,283
(3,035)
(5,612)
60,636
(17,699)
(16,228)
(2,428)
(36,355)
(19,253)
(19,389)
(2,929)
(41,571)
Software Development
(10,361)
Segment profit/(loss)
4,336
-
643
-
(10,361)
(7,734)
716
5,695
9,192
-
891
-
1,248
(7,734)
11,331
Reconciliation of segment profit to reported net profit:
Segment result
Adjustments:
Foreign exchange gains/(losses)
Employment benefits – corporate and IT
Other unallocated costs – corporate and IT
Restructure costs
Impairment
Redundancy costs
Depreciation and amortisation
Net finance costs
Unallocated income
Loss before income tax
Income tax benefit
Net loss
Geographical Information
2016
$'000
2015
$'000
5,695
11,331
(82)
(3,883)
(5,192)
-
(4,055)
(361)
(1,879)
297
239
(9,221)
(42)
(9,263)
713
(4,454)
(5,659)
(2,469)
(3,211)
-
(4,140)
350
670
(6,869)
112
(6,757)
Segment revenue is based on the geographical location of customers and segment assets are based on the
geographical location of the assets.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |40
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
2.
Operating Segments (Continued)
Australia
Asia
Americas
Africa & Europe
Operating Segment
Unallocated Revenue
Foreign Exchange Gains
Reported
2016
2015
Revenues
$’000
Non-current
assets1
$’000
Revenues
$’000
Non-current
assets1
$’000
19,789
12,995
14,889
9,214
56,887
239
-
19,260
287
236
162
19,945
-
-
26,542
14,388
14,285
11,033
66,248
670
713
24,472
361
154
211
25,198
-
-
57,126
19,945
67,631
25,198
1Excludes financial instruments and deferred tax assets.
3.
Loss Before Income Tax
Loss before income tax includes the following specific expenses / (income)
Defined contributions superannuation expense – related party
Rental expense relating to operating leases - Minimum lease payments
Foreign exchange (gains) / losses
Impairment losses – Trade receivables
Impairment gains – Trade receivables
4.
Restructure and Impairment Costs
Impairment costs:
Goodwill – Advisory Division (note 12)
Plant and Equipment – Sydney Office Fitout (note 11)
2016
$'000
2015
$'000
2,225
3,676
82
1,317
(1,021)
4,055
-
4,055
2,118
6,900
(713)
193
(107)
2,500
711
3,211
In 2015 the Group continued a program of cost reduction and restructuring initiatives to better align the
business with the change in the operating environment. The costs incurred in these activities include:
Restructure costs:
Employment termination costs
Onerous lease obligations
Other closure costs
-
-
-
1,206
1,203
60
2,469
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |41
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
5.
Income Tax Benefit / (Expense)
Tax Recognised in profit or loss
Income tax benefit/(expense)
Current tax
Deferred tax
Adjustments to prior periods
Income tax benefit / (expense)
Numerical reconciliation of income tax expense to prima facie tax
Loss before income tax
Tax at the Australian tax rate of 30% (2015: 30%)
Tax effect of amounts which are not taxable/(deductible)
in calculating taxable income:
Attributed income
Non-deductible expense/non-assessable income
Research and development deduction
Unutilised foreign tax credits
Unrecognised deferred tax assets
Difference in overseas tax rates
Foreign Exchange movements
Over/(under) provision in prior years
Income tax benefit / (expense)
Tax consolidation legislation
2016
$'000
2015
$'000
(246)
61
143
(42)
(9,221)
2,766
-
(210)
600
(13)
(3,316)
(173)
(73)
61
143
(42)
(556)
603
65
112
(6,869)
2,061
(19)
377
400
(167)
(2,879)
(227)
18
256
65
112
liabilities of the wholly-owned entities
RungePincockMinarco Limited and its wholly-owned Australian controlled entities implemented the tax
consolidation regime from 13 March 2007. On adoption of the tax consolidation legislation, the entities in the tax
consolidated Group entered into a tax sharing agreement which, in the opinion of the Directors, limits the joint
and several
in the case of a default by the head entity,
RungePincockMinarco Limited. The entities have also entered into a tax funding agreement under which the
wholly-owned entities fully compensate RungePincockMinarco Limited for any current tax payable assumed and
are compensated for any current tax receivable and deferred tax assets relating to unused tax losses or unused
tax credits that are transferred to RungePincockMinarco Limited under the tax consolidated legislation. The
funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial
statements.
Significant Estimates – Deferred Tax Assets
An assessment of the recoverability of the net deferred tax assets has been made to determine the carrying
value. Completion of restructure in Australia significantly lowers the Company’s cost base and it is expected to
have taxable profits in the future. At each reporting period, the recoverability of the net deferred tax assets will
be reassessed. This may lead to the recognition of this unrecognized tax benefit in future reporting periods or
the de-recognition of deferred tax assets that are currently recognised on the balance sheet.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |42
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
Deferred Tax Assets and Liabilities
6.
Deferred tax assets and liabilities are attributable to the following:
Provision for impairment of receivables
Employee benefits provision
Lease incentive liabilities
Tax loss
Unearned income
Accrued expenses
Share capital raising costs
Financial assets at fair value
Intangibles
Work in progress
Property, plant and equipment
Prepayments
Unrealised foreign exchange
Other deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Net Deferred tax assets
Movements
Balance at 1 July
Recognised in profit or loss
Recognised in other comprehensive income
Recognised in equity
Over/(under) provision in prior years
Balance at 30 June
Unrecognised deferred tax assets
Foreign tax credits
Tax losses
Capital losses
Deductible temporary differences
Unrecognised deferred tax assets
Unrecognised gross temporary differences
2016
$'000
2015
$'000
221
195
1,285
1,846
502
611
3,264
4,628
439
490
105
162
171
259
743
3
2,646
(39)
(39)
(192)
(368)
(70)
8,656
(17)
8,639
8,639
61
(49)
-
(12)
8,639
1,319
(36)
(39)
(234)
(528)
(37)
8,639
-
8,639
7,880
603
70
234
(148)
8,639
271
298
8,639
3,124
485
485
1,931
1,812
11,326
5,719
40,516
23,428
The group has not recognised deferred tax assets for a portion of tax losses in the parent entity and its
subsidiaries located in China, Russia, Chile, Brazil and USA because it is not probable that sufficient future
taxable profit will be available. Foreign tax credits will expire in 2017. Capital losses do not expire,
however, it is not probable that the Group would generate capital gains to utilise the benefit. Deductible
temporary differences in subsidiaries located in China, Russia, Chile, Brazil and USA have not been
recognised because it is not probable that sufficient future taxable profit will be available.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |43
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
7.
Cash and Cash Equivalents
Cash at bank
Deposits
8.
Trade and Other Receivables
Current
Trade receivables
Provision for impairment of receivables
Other receivables
Non-current
Other receivables and deposits
9.
Work in Progress
Work in progress
10.
Other Assets
Prepayments
11.
Property, Plant and Equipment
Plant and equipment - at cost
Less: accumulated depreciation
Balance at 1 July
Exchange differences
Additions
Impairment
Disposals
Depreciation
Balance at 30 June
Note
2016
$'000
2015
$'000
9,412
8,730
18,142
15,116
(2,468)
12,648
-
12,648
283
283
8,939
13,617
22,557
19,356
(1,909)
17,447
2
17,449
351
351
1,471
1,148
1,658
1,658
6,526
(4,389)
2,137
2,564
(35)
563
-
(7)
(948)
2,137
6,652
(4,088)
2,564
6,361
52
353
(711)
(411)
(3,080)
2,564
4
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |44
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
12.
Intangible Assets
Software for sale and licensing – at cost
Less: accumulated amortisation
Software for internal use – at cost
Less: accumulated amortisation
Goodwill – at cost
Less: impairment losses
2016
$'000
2015
$'000
5,594
(2,865)
2,729
4,717
(4,424)
293
24,829
(10,352)
14,477
17,499
5,459
(2,141)
3,318
4,598
(4,191)
407
24,764
(6,232)
18,532
22,257
Software For Sales to
Customers 1
Software For Internal Use
Goodwill
Total
Balance at 1 July 2015
Additions
Exchange differences
Write-off2
Impairment 3
Amortisation
At Cost
$'000
5,459
135
-
-
-
-
Balance at 30 June 2016
5,594
Accumulated
amortisation
$'000
At Cost
$'000
Accumulated
amortisation
Carrying Value
Carrying Value
$'000
$'000
$'000
(2,141)
4,598
(4,191)
18,532
22,257
-
-
-
-
(724)
(2,865)
105
16
(2)
-
-
4,717
-
(28)
2
-
(207)
(4,424)
-
-
-
(4,055)
-
14,477
Balance at 1 July 2014
Additions
Exchange differences
Write-off2
Impairment 3
Amortisation
5,756
2,469
-
(2,766)
-
-
Balance at 30 June 2015
5,459
(4,432)
7,001
(6,100)
21,032
-
-
2,766
-
(475)
(2,141)
90
1
(2,494)
-
-
4,598
-
-
2,494
-
(585)
(4,191)
-
-
-
(2,500)
-
18,532
1 Software consists of capitalised development costs.
2 Write-off includes fully amortised software acquired by the group and is no longer utilised in internal use or external
sales.
3 The carrying amount of intangible assets has been reduced to its recoverable amount through recognition of an
impairment loss against goodwill. This loss has been disclosed in note 4.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |45
240
(12)
-
(4,055)
(931)
17,499
23,257
2,559
1
-
(2,500)
(1,060)
22,257
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
12.
(a)
Intangible Assets (Continued)
Impairment Tests for Goodwill
Goodwill is allocated to the Group's cash generating units (CGUs) according to business unit. A segment level
summary of the goodwill is presented below.
Advisory Division
Software Division
GeoGAS
2016
$'000
-
9,556
4,921
14,477
2015
$'000
4,055
9,556
4,921
18,532
(b)
Key assumptions used for value-in-use calculations
In the current and prior years the recoverable amount of the CGUs has been determined by value-in-use
calculations. These calculations were based on the following key assumptions:
Advisory Division
Software Division
GeoGAS
Margin1
Growth Rate2
Discount Rate3
2016
4%
49%
35%
2015
7%
50%
35%
2016
2.5%
2.5%
-
2015
2.5%
2.5%
2.5%
2016
14%
13%
11%
2015
15%
15%
13%
1 Budgeted gross margin
2 Weighted average growth rate used to extrapolate cash flows beyond the budget period
3 In performing the value-in-use calculations for each CGU, the group has applied post-tax discount rates to discount the
forecast future attributable post-tax cash flows. The equivalent pre-tax discount rates are disclosed above
These assumptions have been used for the analysis of each CGU. Cash flows were projected based on approved
financial budgets and management projections over a five year period. Management determined budgeted gross
margin based on past performance and its expectations for the future. The weighted average growth rates used
are consistent with forecasts included in industry reports. The discount rates used reflect specific risks relating to
the relevant segments.
(c)
Impairment charges
Based on the above assumptions and calculations, an impairment of $4,055,000 (2015: $2,500,000) has been
applied to goodwill in the Advisory division. As a result the Advisory division was written down to its recoverable
amount of $4,150,000.
(d)
Impact of possible changes in key assumptions
Impairment calculations for GeoGAS and Software divisions are not sensitive to major changes in key
assumptions.
13.
Trade and Other Payables
Current
Trade payables
Other payables and accruals
2016
$'000
2015
$'000
2,541
2,669
5,210
2,507
5,496
8,003
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |46
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
Provisions
14.
Current
Make good obligations *
Onerous sublease contracts
Employee benefits
Non-current
Make good obligations
Onerous sublease contracts
Employee benefits
* During the prior year the Group settled in cash its make good obligations for the Brisbane Head office.
15.
Other Liabilities
Current
Unearned income - software maintenance
Unearned income - consulting and other
Property lease incentives and straightlining
Non-current
-
265
2,784
3,049
352
626
713
1,691
6,632
1,778
70
8,480
31
620
2,462
3,113
343
897
713
1,953
6,787
1,691
30
8,508
Property lease incentives and straightlining
475
185
16.
Contributed Equity
Share capital
2016
Number
2015
Number
2016
$'000
2015
$'000
Ordinary shares
- fully paid
170,468,892
177,653,062
67,048
69,894
Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a showing of hands every holder of
ordinary shares present at a meeting, in person or by proxy, is entitled to one vote and upon a poll each share is
entitled to one vote. Ordinary shares have no par value and the Company does not have a limited amount of
authorised capital.
Options
Information relating to the RungePincockMinarco Employee Share Option Plan (ESOP), including details of options
issued, exercised and lapsed during the financial year and options outstanding at the end of financial year, is set
out in note 24.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |47
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
Contributed Equity (Continued)
16.
Movements in Share Capital:
Date
30/06/2014
Balance
Placement at $0.60 per share
Costs of issue
Share Purchase Plan at $0.60 per share
Costs of issue
Exercise of Options at $0.57 per share
Costs of issue
30/06/2015
Balance
Share buyback at $0.39 per share
Costs of buyback
Balance
Capital Risk Management
Ordinary shares
Number
$’000
141,380,950
35,000,000
1,106,512
-
165,600
177,653,062
(7,184,170)
-
170,468,892
48,678
21,000
(509)
664
(30)
94
(3)
69,894
(2,811)
(35)
67,048
The Group’s objectives when managing capital include safeguarding the ability to continue as a going concern, so
they continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group does not
have any externally imposed capital requirements.
Consistent with the industry practice, the Group monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘borrowings’
and ‘trade and other payables’ as shown in the consolidated statement of financial position) less cash and cash
equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position plus net debt.
The gearing ratios at 30 June 2016 and 30 June 2015 were as follows:
Total borrowings, trade and other payables
Less: cash and cash equivalents
Net (cash) / debt
Total equity
Total capital
Gearing ratio
Notes
7
2016
$'000
2015
$'000
5,210
(18,142)
(12,932)
43,654
30,722
n/a
8,003
(22,557)
(14,554)
54,919
40,365
n/a
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |48
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
17.
Reserves and Retained Profits
Reserves
Share-based payments (i)
Foreign currency translation (ii)
Financial assets revaluation reserve (iii)
Revaluation surplus
Reserve arising from an equity transaction (iv)
Nature and Purpose of Reserves
(i)
Share-based payments
2,038
(1,916)
(1,601)
18
(1,552)
(3,013)
1,125
(1,846)
(1,601)
18
(1,553)
(3,857)
The fair value of options issued to employees is recognised as an employment cost during the option vesting
period with corresponding increase in equity recognised in this reserve.
(ii)
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency
translation reserve, as described in accounting policy note 1(e).
(iii) Financial assets revaluation reserve
Changes in the fair value of investments are recognized in equity securities in other comprehensive income. These
changes are accumulated in a separate reserve within equity. The entity has a policy on transferring amounts
from this reserve to an asset realization reserve.
(iv) Reserve arising from an equity transaction
Arose from the acquisition of an additional interest in the controlled entity, MRM Mining Services (Pty) Ltd.
Movement in Reserves
Share-based payments
2016
$'000
2015
$'000
Foreign Currency
Translation
2016
$'000
2015
$'000
Balance at 1 July
Options expensed
Foreign currency translation
Balance at 30 June
1,125
913
-
2,038
741
384
-
1,125
(1,846)
-
(69)
(1,916)
(1,888)
-
42
(1,846)
There were no other movements in reserves in 2016 and 2015.
Retained Profits
Balance at 1 July
Net profit / (loss) for the year
Balance at 30 June
2016
$'000
2015
$'000
(11,118)
(9,263)
(20,381)
(4,361)
(6,757)
(11,118)
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |49
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
18.
Dividends
Fully paid ordinary shares
Cents per share
Total
2016
Cents
2015
Cents
2016
$'000
2015
$'000
-
-
-
-
No dividend was declared in respect of the current financial year. Parent’s franking account balance is nil (2015:
nil).
19.
Remuneration of Auditors
During the year the following fees were paid or payable for services provided by the auditors of the Group, its
related entities, its network forms and unrelated firms.
Audit services - Audit and review of the financial reports:
2016
2015
Auditor of the parent entity:
BDO Audit Pty Ltd
Auditors of subsidiaries:
BDO South Africa (network firm)
BDO Hong Kong (network firm)
BDO Indonesia (network firm)
$
$
166,561
159,445
23,270
24,461
17,504
25,335
21,006
17,250
231,796
223,036
During the year the company related to the Auditor of the parent entity BDO (QLD) Pty Ltd provided the following
services and received the following fees:
Preparation of Income tax return and other taxation services
14,725
5,600
20.
(a)
Commitments
Non-cancellable Operating Leases
The Group leases various offices under non-cancellable operating leases expiring within one to seven years. The
leases have varying terms, escalation clauses and renewal rights. On renewal the terms of the lease are generally
renegotiated. Excess office space is sub-let to third parties also under non-cancellable operating leases.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable:
2016
$'000
2015
$'000
Within one year
Later than one year but not later than 5 years
Later than 5 years
Commitments not recognised in the financial statements
2,594
5,657
-
8,251
Sub-lease payments
Future minimum lease payments to be received in relation to non-cancellable sub-leases of operating leases:
Within one year
Later than one year but not later than 5 years
134
30
164
2,651
6,807
255
9,713
194
164
358
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |50
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
21.
Reconciliation of Net Profit to Net Cash Inflow / (outflow) from Operating Activities
Net loss
Depreciation and amortisation
Net (gain)/ loss on sale of property, plant and equipment
Impairment
Deferred tax recognised in equity
Net exchange differences
Employee share options
Change in operating assets and liabilities
Decrease / (increase) in trade and other receivables
Decrease / (increase) in current tax asset
Decrease / (increase) in deferred tax asset
Decrease / (increase) in work in progress
Decrease / (increase) in other assets
Increase / (decrease) in trade and other payables
Increase / (decrease) in other liabilities
Increase / (decrease) in current tax liabilities
Increase / (decrease) in deferred tax liability
Increase / (decrease) in provisions
Net cash inflow / (outflow) from operating activities
22.
Financial Risk Management
(9,263)
1,879
38
4,055
-
(82)
913
4,869
(134)
(17)
(323)
-
(2,794)
262
110
17
(326)
(796)
(6,757)
4,140
(362)
3,211
(234)
571
384
(5,957)
564
(690)
1,552
(196)
2,892
(1,791)
51
(69)
(919)
(3,610)
The Group has exposure to the following risks from its use of financial instruments:
credit risk;
liquidity risk; and
market risk.
This note presents information about the Group’s exposure to each of the above risks, the objectives, policies
and processes for measuring and managing risk.
The Board of Directors is ultimately responsible for reviewing, ratifying and monitoring systems of internal
controls and risk management. The Board has established an Audit and Risk Committee, which is responsible for
overseeing risk management systems. The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance
of the Group. The Group’s finance division is responsible for development and maintenance of policies which
deal with each type of risk related to use of financial instruments.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |51
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
22.
Financial Risk Management (Continued)
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables 1
Financial liabilities
Trade and other payables 2
1 Loans and receivables
2 At amortised cost
(a)
Credit Risk
2016
$'000
18,142
12,648
30,790
2015
$'000
22,557
17,449
40,006
5,210
8,003
Credit risk is the risk of financial loss to the Group if a customer or a counter party to a financial instrument fails
to meet its contractual obligations and arises principally from the Group’s cash and cash equivalents and its
receivables from customers.
The Group does not require guarantees or collateral of its trade and other receivables. In some foreign regions
the Group works on a prepayment basis to avoid credit risk.
The Group has established an allowance for impairment that represents an estimate of incurred losses in respect
of trade receivables. This allowance is determined based on the specific information regarding conditions of a
particular individual debt. The information regarding the receivables ageing is monitored by both finance and
operations management.
The maximum credit risk exposure of financial assets of the Group is represented by the carrying amounts of
financial assets set out above. The Group had no significant concentrations of credit risk with any single
counterparty or group of counterparties, other than banks or financial institutions. The Group holds its cash with
AA-rated banks, except for the banks located in Brazil (B), China (A), Chile (A), Mongolia (B) and South Africa (BBB).
The Group assesses the credit risk by the country where the debt is located. The maximum exposure to credit risk
for trade receivables at the reporting date by geographic region was:
Australia
Americas
Asia
Africa and Europe
2016
$'000
2015
$'000
4,961
9,058
3,419
2,010
1,877
3,866
2,391
2,515
12,648
17,449
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |52
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
22.
(a)
Financial Risk Management (Continued)
Credit Risk (Continued)
As at 30 June 2016, trade receivables of $4,788,000 (2015: $5,148,000) 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 of the
trade receivables past due at the reporting date but not impaired was:
Past due less than 30 days
Past due between 31-90 days
Past due more than 90 days
The movement in the provision for impairment of trade receivables was as follows:
Balance at 1 July
Provision no longer required
Unearned Income moved to provision
Impairment loss recognised
Effect of foreign exchange
Balance at 30 June
1,253
1,846
1,689
4,788
1,909
(1,021)
177
1,317
85
2,467
1,154
1,412
2,694
5,260
1,336
(107)
381
193
106
1,909
The provision for impairment of trade receivables in 2016 and 2015 relates to receivables that are past due for
more than 90 days.
(b)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group regularly reviews cashflow forecasts, maintains sufficient cash on demand and has unutilised
borrowing facilities disclosed in note 22(c) below.
Contractual maturities of the Group’s financial liabilities, including interest thereon, are as follows:
2016
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
2-5 years
$'000
$'000
$'000
$'000
$'000
$'000
Trade and other payables
5,210
5,210
5,210
2015
Trade and other payables
8,003
8,003
8,003
-
-
-
-
-
-
More
than 5
years
$'000
-
-
The Group manages its exposure to interest rate and foreign currency fluctuations through a policy approved by
the Board of Directors. There are no other significant market risks affecting the Group.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |53
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
(c)
Market Risk
Currency Risk
The current policy is not to take any forward positions. At 30 June 2016 and 2015 the Group had not entered into
any derivative contracts to hedge these exposures. The Group does not engage in any significant transactions
which are speculative in nature.
As a multinational corporation, the Group maintains operations in foreign countries and as a result of these
activities, the Group is exposed to changes in exchange rates which affect its results of operations and cash flows.
The Group’s exposure to foreign currency risk at balance date expressed in Australian Dollars was as follows:
2016
Cash and deposits
Trade and other receivables
Trade and other payables
Net balance sheet exposure
2015
Cash and deposits
Trade and other receivables
Trade and other payables
Net balance sheet exposure
USD
$’000
CAD
$’000
ZAR
$’000
Other
$’000
Total
$’000
5,097
6,735
(784)
11,048
7,226
4,548
(715)
11,059
981
1,000
(141)
1,840
377
241
(42)
576
1,159
788
(471)
1,476
1,229
846
(228)
1,847
1,810
675
(654)
1,831
827
2,328
(886)
2,269
9,047
9,198
(2,050)
16,195
9,659
7,963
(1,871)
15,751
A 10 percent strengthening of the Australian dollar against the above currencies at 30 June 2016 based on assets
and liabilities at 30 June 2016 would have increased/(decreased) equity and profit and loss by the amounts shown
below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is
performed on the same basis for 2015.
2016
2015
Equity
$'000
Profit/(Loss)
$'000
Equity
$'000
Profit/(Loss)
$'000
(697)
(923)
(547)
(885)
A 10 percent weakening of the Australian dollar against the above currencies at 30 June 2016 would have had
equal but opposite effect on the above currencies to the amounts shown above.
Interest rate risk
Details of the Group’s borrowing facilities are presented below.
Borrowing
facilities
Other facilities
Bank guarantee
Bank guarantee
Currency
Nominal
interest
rate
2016
2015
Maturity
Facility
$’000
Utilised
$’000
Facility
$’000
Utilised
$’000
AUD
EUR
2.35%
2.50%
n/a
n/a
1,000
70
925
70
1,800
-
912
-
In 2016 and 2015 bank guarantees were secured by the Group’s term deposits.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |54
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
22.
Financial Risk Management (Continued)
Net Fair Values
(d)
The net fair values of financial assets and liabilities approximate their carrying value. No financial assets or
liabilities are readily traded on organised markets in standardised form.
23.
Earnings Per Share
Basic earnings per share
Diluted earnings per share
Earnings used in Calculating Earnings Per Share
Profit / (loss) attributable to the ordinary equity holders used in calculating
earnings per share
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
Dilutive options
Weighted average number of ordinary shares used as the
denominator in calculating diluted earnings per share
24.
Share Based Payments
Tax Exempt Share Plan
2016
Cents
(5.3)
(5.3)
2016
$’000
2015
Cents
(3.9)
(3.9)
2015
$’000
(9,264)
(6,757)
175,135,174
174,439,091
-
-
175,135,174
174,439,091
The Employee Share Scheme enables the Board to issue up to $1,000 of shares tax free per employee of the
Group each year.
There were no shares issued under the $1,000 Share Purchase Plan in 2016 or 2015.
Eligibility for the tax exempt share plan is approved by the board having regard to individual circumstances and
performance. No directors or key management personnel are eligible for the Tax Exempt Share Plan.
Employee Share Option Plan (ESOP)
The Employee Share Option Plan (ESOP) was approved by the Board of Directors on 5 February 2008, amended
on 7 October 2009, 28 October 2011 and most recently on 29 October 2013 following approval of shareholders
at the Company’s 2013 Annual General Meeting.
Eligible participants of the ESOP include any person who is employed by, or is a director, officer or executive (or
their approved permitted nominee), of the Group and whom the Board or its nominee determines is eligible to
participate in the Option Plan. A permitted nominee includes a company controlled by the employee, a trust in
which the employee has, or may have entitlements or such other entity as approved by the Board. Options are
granted at the discretion of the Board of Directors.
All options under the ESOP are to be offered to eligible employees for no consideration. The offer to the eligible
participant must be in writing and specify amongst other things, the number of options for which the eligible
employee may apply, the period within which the options may be exercised, any conditions to be satisfied before
exercise, the option expiry date and the exercise price of the options, as determined by the Board. The Board can
impose any restrictions on the exercise of options as it considers fit.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |55
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
24.
Share Based Payments (Continued)
The rules of the ESOP plan enable the Board to determine the applicable vesting criteria and to set a timetable
for vesting of options in the offer document, including vesting in tranches over a defined period. The Board has
the discretion on whether or not to set performance hurdles for vesting or to link vesting solely to a defined
service period in order to drive key staff retention and reward longevity of service.
The options may be exercised, in part or full, subject to the employee continuing to be employed at the relevant
vesting dates, by the participant giving a signed notice to the Company and paying the exercise price in full. The
Company will apply for official quotation of any Shares issued on exercise of any options.
The rules of the plan allow the Board to set the exercise price per Option in the offer document.
Subject to the accelerated expiry terms set out in the ESOP plan (explained further below), options will expire five
years after the date of grant subject to the option holder remaining employed by the Group. Unexercised options
will automatically lapse upon expiry. Unless determined otherwise by the Board, in the event of stated events
detailed in the plan, including termination of employment or resignation, redundancy, death or disablement or
in the event of a change of control of an employee’s permitted nominee, unvested options shall lapse and the
expiry date of any vested options will be adjusted in accordance with the accelerated timetables set out in the
ESOP plan rules (subject to the Board’s discretion to extend the term of exercise in restricted cases).
Once shares are allotted upon exercise of the options the participant will hold the shares free of restrictions. The
shares will rank equally for dividends declared on or after the date of issue but will carry no right to receive any
dividend before the date of issue. Should the Company undergo a reorganisation or reconstruction of capital or
any other such change, the terms of the options (including number or exercise price or both) will be
correspondingly changed to the extent necessary to comply with the Listing Rules. With this exception, the terms
for the exercise of each Option remains unchanged. In the event of a change of control of the Company, all options
will vest immediately and may be exercised by the employee (regardless of whether the vesting conditions have
been satisfied). A holder of options is not entitled to participate in dividends, a new or bonus issue of Shares or
other securities made by the Company to Shareholders merely because he or she holds options.
The Options are not transferable, assignable or able to be encumbered, without Board consent and the options
will immediately lapse upon any assignment, transfer or encumbrance, with the exception of certain dealings in
the event of death of the option holder.
The ESOP plan will be administered by the Board which has an absolute discretion to determine appropriate
procedures for its administration and resolve questions of fact or interpretation and formulate terms and
conditions (subject to the Listing Rules) in addition to those set out in the ESOP plan.
The ESOP plan may be terminated or suspended at any time by the Board. The ESOP plan may be amended or
modified at any time by the Board except where the amendment reduces the rights of the holders of options,
unless required by the Corporations Act or the Listing Rules, to correct any manifest error or mistake or for which
the option holder consents. The Board may waive or vary the application of the ESOP plan rules in relation to any
eligible employee at any time.
Employee Benefits expense
Share-based payment expense recognised during the financial year
Options issued under employee option plan
2016
$’000
2015
$’000
913
913
384
384
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |56
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
24.
Share Based Payments (Continued)
The vesting conditions attached to the options are set out in the Remuneration Report (20A) of the Directors’
Report.
The number and weighted average exercise prices of share options are as follows:
Grant
date
Vesting
Expiry
Exercise Number Granted
Forfeited
Exercised Weighted Number
date
date
Price
beginning
$
of year
at end
of year
Average
Share
Price
at the exer-
cise date
2016
Options granted to management
29/11/13 30/11/14 29/11/18
29/11/13 30/11/15 29/11/18
29/11/13 30/11/16 29/11/18
19/02/14 19/02/15 19/02/19
19/02/14 19/02/16 19/02/19
19/02/14 19/02/17 19/02/19
31/03/14 31/03/15 31/03/19
31/03/14 31/03/16 31/03/19
31/03/14 31/03/17 31/03/19
31/10/14 31/10/15 31/10/19
31/10/14 31/10/16 31/10/19
31/10/14 31/10/17 31/10/19
3/03/15
3/03/16
3/03/20
3/03/15
3/03/17
3/03/20
3/03/15
3/03/18
3/03/20
15/07/15 15/07/16 15/07/20
15/07/15 15/07/17 15/07/20
15/07/15 15/07/18 15/07/20
8/09/15
8/09/16
8/09/20
8/09/15
8/09/17
8/09/20
8/09/15
8/09/18
8/09/20
31/10/15 31/10/16 31/10/20
31/10/15 31/10/17 31/10/20
31/10/15 31/10/18 31/10/20
3/03/16
3/03/17
3/03/21
3/03/16
3/03/18
3/03/21
3/03/16
3/03/19
3/03/21
Total
0.68
0.68
0.68
0.67
0.67
0.67
0.73
0.73
0.73
0.61
0.61
0.61
0.59
0.59
0.59
0.57
0.57
0.57
0.56
0.56
0.56
0.54
0.54
0.54
0.39
0.39
0.39
575,987
571,004
571,009
116,666
116,666
116,668
83,333
83,333
83,334
33,332
33,334
33,334
1,692,308
1,692,308
1,692,384
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
83,333
83,333
-
83,334
- 1,503,308
- 1,503,308
- 1,503,384
-
16,667
-
-
-
-
16,667
16,666
100,000
100,000
-
100,000
7,495,000 5,110,000
44,998
40,001
40,001
50,000
50,000
83,334
-
-
-
-
-
-
81,665
98,331
98,338
-
-
-
58,332
58,332
58,336
-
-
-
-
-
-
(761,668)
Weighted average exercise price
0.62
0.55
0.62
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
530,989
531,003
531,008
66,666
66,666
33,334
83,333
83,333
83,334
33,332
33,334
33,334
- 1,610,643
- 1,593,977
- 1,594,046
-
-
83,333
83,333
-
83,334
- 1,444,976
- 1,444,976
- 1,445,048
-
-
-
-
-
16,667
16,667
16,666
100,000
100,000
-
100,000
- 11,843,332
0.59
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |57
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
24. Share Based Payments (Continued)
Grant
date
Vesting
Expiry
Exercise Number
Granted
Forfeited
Exercised Weighted Number
date
date
Price
beginning
$
of year
Average
at end
of year
Share
Price
at the exer-
cise date
(60,538)
(70,672)
(32,532)
(53,864)
(36,265)
(41,064)
0.66
0.66
0.66
2015
Options granted to management
14/12/10 31/08/12 30/09/14
14/12/10 31/08/13 30/09/14
14/12/10 31/08/14 30/09/14
29/05/12
1/09/14 31/08/16
3/05/13
1/09/14 31/08/16
26/08/13
1/09/14 31/08/16
29/11/13 30/11/14 29/11/18
29/11/13 30/11/15 29/11/18
29/11/13 30/11/16 29/11/18
19/02/14 19/02/15 19/02/19
19/02/14 19/02/16 19/02/19
19/02/14 19/02/17 19/02/19
31/03/14 31/03/15 31/03/19
31/03/14 31/03/16 31/03/19
31/03/14 31/03/17 31/03/19
31/10/14 31/10/15 31/10/19
31/10/14 31/10/16 31/10/19
31/10/14 31/10/17 31/10/19
3/03/15
3/03/16
3/03/20
3/03/15
3/03/17
3/03/20
3/03/15
3/03/18
3/03/20
0.57
0.57
0.57
0.4
0.55
0.55
0.68
0.68
0.68
0.67
0.67
0.67
0.73
0.73
0.73
0.61
0.61
0.61
0.59
0.59
0.59
131,210
86,396
77,329
1,796,000
578,600
1,539,734
580,987
581,004
581,009
116,666
116,666
116,668
83,333
83,333
83,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,332
33,334
33,334
- 1,692,308
- 1,692,308
- 1,692,384
(1,796,000)
(578,600)
(1,539,734)
(5,000)
(10,000)
(10,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
575,987
571,004
571,009
116,666
116,666
116,668
83,333
83,333
83,334
33,332
33,334
33,334
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 1,692,308
- 1,692,308
- 1,692,384
- 7,495,000
0.62
Total
6,552,269 5,177,000
(4,068,669)
(165,600)
Weighted average exercise price
0.56
0.59
0.49
0.57
The weighted average remaining contractual life of share options outstanding at the end of the period was 2.1
years (2015: 3.3 years).
The fair values at grant date for non-market options (EBITA & EPS and Service vesting conditions) were
estimated using a Trinomial Lattice model which defines the conditions under which employees are expected to
exercise their options after vesting in terms of the stock price reaching a specified multiple of the exercise price.
The fair values at grant date for market options (TSR vesting condition) were estimated using a Monte Carlo
simulation and a trinomial tree (Hoadley’s Hybrid Employee Share Option model - outperform index).
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |58
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
24.
Share Based Payments (Continued)
The model inputs for options granted during the 2016, 2015, 2014, 2013, 2012 and 2011 financial years included:
Grant
date
Vesting
date
Share
price
$
With market hurdles
14/12/10 31/08/12
14/12/10 31/08/13
14/12/10 31/08/14
With non-market hurdles
14/12/10 31/08/12
14/12/10 31/08/13
14/12/10 31/08/14
1/09/14
29/05/12
1/09/14
3/05/13
26/08/13
1/09/14
29/11/13 30/11/14
29/11/13 30/11/15
29/11/13 30/11/16
19/02/14 19/02/15
19/02/14 19/02/16
19/02/14 19/02/17
31/03/14 31/03/15
31/03/14 31/03/16
31/03/14 31/03/17
31/10/14 31/10/15
31/10/14 31/10/16
31/10/14 31/10/17
3/03/16
3/03/15
3/03/17
3/03/15
3/03/15
3/03/18
15/07/15 15/07/16
15/07/15 15/07/17
15/07/15 15/07/18
8/09/16
8/09/15
8/09/17
8/09/15
8/09/15
8/09/18
31/10/15 31/10/16
31/10/15 31/10/17
31/10/15 31/10/18
3/03/17
3/03/16
3/03/18
3/03/16
3/03/19
3/03/16
0.57
0.57
0.57
0.57
0.57
0.57
0.40
0.60
0.50
0.68
0.68
0.68
0.65
0.65
0.65
0.72
0.72
0.72
0.60
0.60
0.60
0.56
0.56
0.56
0.57
0.57
0.57
0.55
0.55
0.55
0.53
0.53
0.53
0.36
0.36
0.36
Exercise
Expected Weighted
Expected
Risk-free
Fair value
price
volatility
average
dividends
$
0.57
0.57
0.57
0.57
0.57
0.57
0.40
0.40
0.40
0.68
0.68
0.68
0.67
0.67
0.67
0.73
0.73
0.73
0.61
0.61
0.61
0.59
0.59
0.59
0.57
0.57
0.57
0.56
0.56
0.56
0.54
0.54
0.54
0.39
0.39
0.39
%
70
70
70
70
70
70
50
50
38
40
40
40
50
50
50
50
50
50
55
55
55
55
55
55
46
46
46
46
46
46
46
46
46
46
46
46
life, years
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.3
3.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
5.0
%
5
5
5
5
5
5
6
4
4
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
interest
rate1,%
at grant
Date, $
5.31
5.31
5.31
5.31
5.31
5.31
2.60
2.50
2.75
3.44
3.44
3.44
3.42
3.42
3.42
3.44
3.44
3.44
2.81
2.81
2.81
1.84
1.84
1.84
2.29
2.29
2.29
2.04
2.04
2.04
2.04
2.04
2.04
2.08
2.08
2.08
0.20
0.19
0.19
0.24
0.25
0.24
0.12
0.20
0.10
0.21
0.23
0.25
0.22
0.25
0.27
0.24
0.27
0.30
0.21
0.25
0.27
0.19
0.23
0.25
0.18
0.20
0.22
0.17
0.19
0.21
0.17
0.19
0.20
0.10
0.10
0.09
1 based on government bonds
The expected price volatility is based on the historic volatility compared to that of similar listed companies and
the remaining life of the options.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |59
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
25. Contingent liabilities and contingent assets
In June 2015, RPM’s Russian subsidiary CJSC Runge commenced proceedings in the Arbitration Court of Moscow
to recover USD$988.5k in professional fees, disbursements and interest owed to it for advisory services relating
to a contract originally entered into in February 2014. Proceedings were commenced by RPM as a result of non-
payment by the Russian company following their decision to cancel RPM’s mining study due to a shift in market
demand for thermal coal.
RPM’s legal advice at the time of making the claim was (and remains) that RPM has reasonable prospects of
success in recovering payment under a signed contract.
In July 2016, RPM has received advice from its Russian based legal counsel that, in a judgement that was
entirely unexpected, its claim for payment has not been successful and that instead RPM had been directed to
refund approximately USD 350,000 ($470,000) of fees already paid to RPM under the project. RPM
subsequently sought further particulars of the decision and after consideration of the recommendations of its
external legal counsel in Russia, has appealed the decision to the appellate courts in Russia.
There are no other contingent liabilities or contingent assets that require disclosure in the financial report.
26. Parent Entity Disclosures
As at and throughout the financial year ending 30 June 2016 the parent entity of the Group was
RungePincockMinarco Limited.
Summary financial information
The individual financial statements for the parent entity show the following aggregation:
Result of parent entity
Profit/(loss)
Other comprehensive income
Total comprehensive income
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Issued capital
Share-based Payments Reserve
Revaluation Surplus Reserve
Reserve Arising From an Equity Transaction
Retained profits
Total equity
Contingent liabilities
Contractual commitments for the acquisition or property, plant or equipment
(8,778)
-
(8,778)
23,449
57,776
10,669
12,638
67,048
2,038
18
(600)
(23,366)
45,138
-
-
(6,766)
-
(6,766)
31,783
70,923
13,362
15,074
69,894
1,125
18
(600)
(14,588)
55,849
-
-
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |60
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
26.
Parent Entity Disclosures (Continued)
The parent entity has provided guarantees to third parties in relation to the performance and obligations of its
subsidiary, GeoGAS Pty Ltd in respect of property lease rentals. The guarantees are for the terms of the leases
and total $98,000 (2015: $98,000). The periods covered by the guarantees range from two to three years.
No deficiency of net assets existed in the controlled entities covered by guarantees at 30 June 2016 or 30 June
2015. No liability was recognised by the parent entity in relation to these guarantees, as the fair value of the
guarantee is immaterial.
27. Interests in other entities
(a) Material subsidiaries
The Group’s principal subsidiaries at 30 June 2016 are set out below. All subsidiaries have share capital consisting
solely of ordinary shares that are 100% held directly by the Group, and the proportions of ownership interests
held equals the voting rights held by the Group. The country of incorporation or registration is also their principal
place of business.
Name of entity
GeoGAS Pty Ltd
Runge Indonesia Technology Pty Ltd
Runge Inc
RungePincockMinarco (Canada) Ltd
PT RungePincockMinarco
Runge Asia Ltd
Core Global Mining Solutions Beijing Co. Ltd
RungePincockMinarco LLC
CJSC Runge
Place of
business/incorpo
ration
Australia
Australia
USA
Canada
Indonesia
Hong Kong
China
Mongolia
Russia
Principal Activities
Laboratory Services
Software Sales and Services
Software and Advisory Services
Software Sales and Services
Advisory Services
Advisory Services
Advisory Services
Advisory Services
Software and Advisory Services
MRM Mining Services (Pty) Ltd
South Africa
Software Sales and Services
RungePincockMinarco Limited Latin America Limitada
Runge Servicos de Consultoria do Brasil Ltda
Chile
Brazil
Software Sales and Services
Software Sales and Services
All entities other than GeoGAS Pty Ltd trade as RungePincockMinarco.
(b) Significant Restrictions
Cash and Short term deposits held in Chile, Brazil, South Africa, China, Indonesia, Mongolia and Russia are subject
to local exchange control regulations. These regulation provide restrictions on exporting capital from those
countries other than through normal trading transactions or dividends.
The carrying amount of cash included within the consolidated financial statements to which these restrictions
apply is $5,058,000 (2015: $3,644,000).
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |61
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
27.
Interest in other entities (Continued)
(c) Interests in joint ventures
The Group has a 49% interest in RungePincockMinarco India Pte Ltd, an entity registered in India, which is
accounted for using the equity method. The summary of amounts in the reports for this entity is disclosed below:
Carrying Amount
Group’s share of:
Profit/(loss) from continuing operations
Other comprehensive income
Total comprehensive income
28. Key Management Personnel Disclosures
(a) Compensation
Short term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
2016
$'000
2015
$'000
26
-
-
-
26
-
-
-
2016
$
2,230,747
113,381
-
229,829
2,573,957
2015
$
3,384,757
131,248
237,790
89,753
3,843,548
(b) Other Transactions with Key Management Personnel
No other transactions with Key Management personal occurred during the year.
29. Events occurring after the reporting period
On 1 July 2016 the Group acquired 100% of the issued share capital of iSolutions International Pty Ltd and
iSolutions Holdings Pty Ltd (iSolutions Group), a leading global asset management software company with over
20 years’ experience in the provision of asset management, life cycle costing and budgeting software solutions to
the mining industry. The financial effects of this transaction have not been brought to account at 30 June 2016.
The operating results and assets and liabilities of the company will be consolidated from 1 July 2016.
The provisionally determined fair values of the assets and liabilities of iSolutions as at date of acquisition are as
follows:
Purchase consideration
Cash
Ordinary shares
Contingent consideration
Total Purchase Consideration
$’000
8,000
3,758
5,489
17,247
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |62
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
29.
Events occurring after the reporting period (Continued)
The fair value of the 9,166,666 shares issued as part of the consideration paid for the iSolutions Group
($3,758,000) was based on the closing share price on 1 July 2016 of $0.41 per share.
Contingent consideration comprises successful collection of debtors and ongoing retention and growth of annuity
revenues by iSolutions. The potential undiscounted amount of future payments was estimated at $6,300,000.
The fair value of the contingent consideration of $5,489,000 has been estimated by calculating the present value
of the future expected cash outflows based on a discount rate of 10%.
The amount of contingent consideration is subject to an independent valuation which was not complete by the
date of this report.
Acquisition related costs will be included in other expenses in profit and loss in the reporting period ending 31
December 2016. The provisionally determinated fair values of the assets and liabilities recognised as at the date
of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Deferred tax assets
Intangible assets1
Trade and other payables
Provisions
Current tax liabilities
Other Liabilities
3,608
1,644
10
214
766
14,012
(339)
(1,536)
(104)
(1,028)
Net Assets
1 Intangibles assets have not yet been split into separate asset classes and subject to an independent valuation
which was not completed at the date of this report. The Group expects the Intangible asset balance to mainly
consist of customer contracts, customer relationships, software and goodwill.
17,247
Acquisition-related costs
Acquisition-related costs were not yet determined and will be included in other expenses in profit or loss in the
reporting period ending 30 June 2017.
Information not disclosed as not yet available
At the time the financial statements were authorised for issue, the group had not yet completed the accounting
for the acquisition of iSolutions Group. In particular, the fair values of the assets and liabilities disclosed above
have only been determined provisionally as the independent valuations have not been finalised. It is also not yet
possible to provide detailed information about each class of acquired receivables and any contingent liabilities of
the acquired entity.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |63
For personal use only
NOTES ON THE FINANCIAL STATEMENTS
29.
Events occurring after the reporting period (Continued)
As further detailed in Note 25, on 21 July 2016, RPM received an unexpected adverse judgement against its
Russian subsidiary from the Arbitration Court of Moscow relating to advisory work which it performed for a
Russian company during 2014. This has resulted in RPM fully providing for this debt in 2016. The Company has
appealed this judgement
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected the Group’s
operations, results or state of affairs, or may do so in the future years.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |64
For personal use only
DIRECTORS’ DECLARATION
In the directors' opinion:
the attached financial statements and notes thereto comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes thereto comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 1 (a) to the
financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity's
financial position as at 30 June 2016 and of its performance for the financial year ended on that date;
the remuneration disclosures included in pages 15 to 22 of the directors’ report (as part of audited
Remuneration Report), for the year ended 30 June 2016, comply with section 300A of the Corporations
Act 2001; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors
Allan Brackin,
Chairman
Dated this 19th day of August 2016
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |65
For personal use only
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of RungePincockMinarco Limited
Report on the Financial Report
We have audited the accompanying financial report of RungePincockMinarco Limited, which comprises
the consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information, and the directors’ declaration of the consolidated entity
comprising the company and the entities it controlled at the year’s end or from time to time during the
financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 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 Audit Pty Ltd 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.
For personal use only
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 RungePincockMinarco Limited, would be in the same terms if given
to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of RungePincockMinarco 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 15 to 22 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 RungePincockMinarco Limited for the year ended 30 June
2016 complies with section 300A of the Corporations Act 2001.
BDO Audit Pty Ltd
P A Gallagher
Director
Brisbane, 19 August 2016
BDO Audit Pty Ltd ABN 33 134 022 870 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 Audit Pty Ltd 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.
For personal use only
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Statement – Year Ended 30 June 2016
The Board and Management consider that it is crucial to the Group’s long term performance and sustainability
and to protect and enhance the interests of the Company’s shareholders and other stakeholders, that it adopts
an appropriate corporate governance framework pursuant to which the Company and its related companies
globally will conduct its operations in Australia and internationally with integrity, accountability and in a
transparent and open manner.
The Company regularly reviews its governance arrangements as well as developments in market practice,
expectations and regulation.
The Company’s Corporate Governance Statement has been approved by the Board of RungePincockMinarco
Limited and explains how the Group addresses the requirements of the Corporations Act 2001, the ASX Listing
‘Corporate Governance Principles and
Rules 2001 and the ASX Corporate Governance Council’s
Recommendations - 3rd Edition’ (the ‘ASX Principles and Recommendations’) and is current as at 30 June 2016.
The Company’s ASX Appendix 4G, which is a checklist cross-referencing the ASX Principles and Recommendations
to the relevant disclosures in the statement Corporate Governance Statement, the Company’s 2016 Annual
Report and other relevance governance documents and materials on the Company’s website, are provided in the
corporate governance section of the Company’s website at http://www.rpmglobal.com/about-us/investor-
centre/corporate-governance/. The Company’s Corporate Governance Statement together with the ASX
Appendix 4G and this Annual Report, were also lodged with the ASX on 22 August 2016.
The Board of the Company strives to meet the highest standards of Corporate Governance, but recognises that it
is also crucial that the Company’s governance framework appropriately reflects the current size, operations and
industry in which the Company operates.
The Company has complied with the majority of recommendations of the ASX Principles and Recommendations
with the exception of a few. The Board believes the areas of non-conformance, which are explained in the
Corporate Governance Statement and the ASX Appendix 4G do not materially impact on the Company’s ability to
achieve the highest standards of Corporate Governance, whilst at the same time ensuring the Company is able to
achieve the expectations of its shareholders and other stakeholders.
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |68
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SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 1 August 2016.
A.
Distribution of Equity Securities
Analysis of number of equity security holders by size of holding:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Ordinary Shares
Options
102
276
132
266
107
883
-
-
1
46
31
78
The number of shareholdings held in less than marketable parcels of 961 shares is 86 (Close Price 1 August $0.52).
B.
Equity Security Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Number held
NATIONAL NOMINEES LIMITED
RUNGE INTERNATIONAL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
BNP PARIBAS NOMINEES PTY LTD
PAUA PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
ELGIE INVESTMENTS PTY LTD
FEYDER INVESTMENTS PTY LTD
MR STEPHEN JOHN BALDWIN & MRS ANDREA MAREE BALDWIN
THE RIDGE NZ PTY LTD
MS TRACY ROWLANDS
MR JOHN CRAIG HALLIDAY
BOND STREET CUSTODIANS LIMITED
MRS DONNA MARGARET LUXTON
MRS ANDRE JOAN PHILLIPS
MR IAN JAMES LUXTON
MR JULIAN LAVIGNE
49,010,175
15,810,389
12,105,616
10,853,712
10,558,328
6,795,753
5,631,901
5,601,589
5,276,614
4,604,416
2,889,333
2,642,511
1,391,052
1,245,889
1,136,541
1,128,471
1,123,001
1,048,508
982,934
955,273
Percentage
of issued
shares
27.28
8.80
6.74
6.04
5.88
3.78
3.14
3.12
2.94
2.56
1.61
1.47
0.77
0.69
0.63
0.63
0.63
0.58
0.55
0.53
Unquoted equity securities
11,843,332 options over unissued shares: for further details see note 24.
140,792,006
78.38
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |69
For personal use only
SHAREHOLDER INFORMATION
C.
Substantial Holders
The names of the substantial shareholders listed in the holding register are:
Estimated beneficial holdings as at 31 July 2016
Number held
Percentage
Ruffer LLP
IOOF Holdings Limited (Perennial Value)
Runge International Pty Ltd (Ian Runge)
Discovery Asset Management Pty Ltd
Paradice Investment Management
D.
Voting Rights
Refer to note 16 for voting rights attached to ordinary shares.
24,966,010
21,274,459
16,335,484
15,834,942
14,693,433
14.65
12.48
9.58
9.29
8.62
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |70
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CORPORATE DIRECTORY
Directors
Allan Brackin
Chairman
Richard Mathews
Managing Director
Dr Ian Runge
Non-executive Director
Ross Walker
Non-executive Director
Company Secretary
Registered Office
Level 2, 295 Ann Street
Brisbane QLD 4000
Ph:
+61 7 3100 7200
Fax: +61 7 3100 7297
Web: www.rpmglobal.com
Auditor
BDO Audit Pty Ltd
Level 10, 12 Creek St
Brisbane QLD 4000
Share Registry
Computershare Investor Services Pty Limited
117 Victoria Street
West End QLD 4101
James O’Neill
Group General Counsel and Company Secretary
Stock Exchange Listing
The Company is listed on the Australian Securities
Exchange Limited (ASX: RUL)
ABN 17 010 672 321
RUNGEPINCOCKMINARCO LIMITED // ANNUAL REPORT 2016 |71
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Level 2, 295 Ann St, Brisbane QLD 4000
P: +61 7 3100 7200 F: +61 7 3100 7297
www.rpmglobal.com
For personal use only