ANNUAL
REPORT
2015-16
CONNECTING
AUSTRALIAN
ICONS AND
LANDSCAPES
TO THE WORLD
BRANDS
CONTENTS
SEALINK TRAVEL GROUP
FOUR YEAR FINANCIAL HIGHLIGHTS
CHAIR REPORT
CEO REPORT
2
3
4
5
KEY RESULTS
DIRECTORS REPORT
FINANCIAL REPORT
AUDITORS REPORT
REVENUE HISTORY
10
REMUNERATION REPORT
12
13
17
51
53
SEALINK TRAVEL GROUP
SeaLink Travel Group Limited
(“SeaLink”, “The Company” or
“The Group”) is an established,
geographically diversified transport
and tourism company which provides
services in two diverse industries
being the Transport Industry, moving
regular commuters and freight
between travel destinations, and
also the Tourism Industry, promoting
and packaging holiday destinations,
providing tours and delivering
tourists to travel destinations.
The SeaLink business was founded
in 1989 with the purchase of a ferry
service linking Kangaroo Island
with the South Australian mainland.
SeaLink now has operations
across four states and the Northern
Territory, covering 10 islands and 12
destinations, operating under the
well-recognised brands of “SeaLink”
and “Captain Cook Cruises”.
SeaLink owns and operates a fleet
of 75 ferries, including 3 under
construction, and other maritime craft
carrying over 8 million passengers
per year. Additionally, SeaLink
operates a fleet of 32 coaches, buses
and other passenger vehicles.
SeaLink’s operations are
conducted through five core
business units, they are:
• SeaLink South Australia
including Kangaroo Island
SeaLink, coach touring, the
Australian Holiday Centre and
PW Murray Princess located in
Mannum, South Australia
• Captain Cook Cruises
on Sydney Harbour
• SeaLink North Queensland and
SeaLink Northern Territory
• SeaLink Gladstone and SeaLink
South East Queensland,
including Stradbroke Ferries
• Captain Cook Cruises
Western Australia
SeaLink Travel Group successfully
listed on the Australian Securities
Exchange (ASX) on the 16th
October 2013 (ASX code, SLK).
2
DIRECTORS REPORT FOUR YEAR FINANCIAL HIGHLIGHTS
SEALINK TRAVEL GROUP
NET PROFIT AFTER TAX ($M)
PERFORMANCE
Operating Revenue
Underlying EBIT
EBIT margin
Underlying NPAT*
Underlying EPS* (basic)
Dividend per share
(100% franked)
Payout ratio (Reported NPAT)
FINANCIAL STRENGTH
Net assets
NTA per share
Gearing
2013
91.4
9.2
10.0
7.0
10.4
7.5
69.9
30.8
41.6
34
2014
2015
2016
103.8
111.3
176.8
12.4
11.9
7.9
11.8
7.4
73.7
53.9
61.7
17
14.8
13.3
9.6
12.6
7.8
64.1
61.3
68.9
13
35.3
19.9
23.1
24.4
12.0
54.3
137.0
89.0
33
$m
$m
%
$m
cents
cents
%
$m
cents
%
25
20
15
10
5
FY12
FY13
FY14
FY15
FY16
Reported NPAT
Underlying NPAT
UNDERLYING EARNINGS
PER SHARE UNDILUTED ($M)
25
20
15
10
5
FY12
FY13
FY14
FY15
FY16
Underlying Earnings per share
(ave) – undiluted
3
CHAIR REPORT
Dear Shareholder,
I am very pleased to report an
excellent year’s result for SeaLink
Travel Group (“SeaLink”) – a
record profit, further expansion of
the Australian business base and
strengthening of the balance sheet.
We continue our evolution from
a small commuter ferry business
in South Australia into a major
Australian based tourism and
transport operator.
This year saw the acquisition of the
Transit Systems Marine businesses
in Queensland, and Captain
Cook Cruises Western Australia.
Those acquisitions have been
transformational for the Company,
making a significant contribution
to our result and supporting
our strategy of diversification of
geography and business types.
The Company remains focused on
the integration of these acquisitions
and in achieving cost savings and
efficiencies where possible.
Market conditions for SeaLink have
been positive for the year under
review – Australia is regarded as a
safe travel destination and inbound
short term visitor numbers remain
positive, as indicated in the graph
below. This positive environment
is aided by increasing government
focus on tourism as a way to help
SHORT TERM INTERNATIONAL
VISITORS TO AUSTRALIA
10m
8m
6m
4m
2m
I am pleased that we are able to
declare a fully franked final dividend
7.5 cents per share (an 87.5%
increase on our 2015 final dividend),
and I thank our shareholders for their
continuing support of the Company.
I would also like to thank my Board
colleagues for their contributions
during the year.
Finally, I would like to express my
thanks to the SeaLink team of more
than 1,100 employees all around
Australia for their hard work and
contributions during the year. It is
worth noting that one third of our
employees are based in our home
state of South Australia and we are
one of the largest regional tourism
employers in the country. It is the
people who maintain and run our
ferries and serve our customers who
are at the core of our success.
We are looking to the remainder of
the 2017 financial year to continue
this growth.
ANDREW McEVOY
CHAIR, SEALINK TRAVEL GROUP
address the reduced activity in the
mining sector, particularly in Western
Australia. SeaLink is well positioned
to benefit from the consequent
growth in tourism.
We remain ready to meet the
challenges ahead of us – our
Capricornian class vessels are
scheduled to conclude their
operations in Gladstone in March
2017, and we are working on
opportunities to redeploy those
four vessels. Another key focus
is to ensure we successfully
conclude negotiations to renew
or extend various long term
key services contracts and
infrastructure agreements we have
with governments around Australia.
We are a customer centric business
with a focus on safety and reliability
– meaning strong engagement with
Government partners.
Expanding opportunities for our
existing businesses is also a prime
focus including maximising utilisation
for our fleet of 73 vessels. We have
invested in construction of two new
ferries that are targeted for servicing
a new market on Sydney Harbour.
We are confident we have the right
strategies and plans in place together
with strong management to deliver
the next phase of growth.
15%
10%
5%
FY10A
FY11A
FY12A
FY13A
FY14A
FY15A
FY16A
FY17E
FY18E
Total ST Visitors
PCP Growth (%)
Source: ABS, Overseas Arrivals & Departures (ABS: 3401.0) and Tourism Research
Australia, Tourism Forecasts July 2016.
4
CEO REPORT
It gives me great pleasure to report
on the Company’s performance
over the last financial year.
The Company achieved both
strong growth from its operating
businesses, and completed two
acquisitions totalling $137 million
(less adjustments) in what was a
transformational year.
The Company was able to
successfully integrate the new
businesses into the Group, grow
sales, retain staff and cement a
foundation for future growth. The
new acquisitions have delivered a
diversified portfolio of assets both
geographically and by industries with
more balance in our key tourism and
transport industries.
A $60.6 million capital raising has
positioned the company with a strong
balance sheet and a conservative
debt level. It also has created liquidity
in our shares and positioned us well
inside the Top 300 companies on the
Australian Securities Exchange.
The newly acquired marine business
of SeaLink Gladstone and South East
Queensland had a positive effect on
profit for the year with the business
units recording a segment profit
before interest and tax of $17.6m for
the 8 month period since acquisition
and after taking into account once off
acquisition costs of $0.9m. Revenue
from this business was $58.4m for
the same period.
With record sales, record profit and
record earnings per share (up 94%),
the Company has also been able to
increase its final dividend from 4.5
cents to 7 cents per share.
RESULT OVERVIEW
The Company recorded a Net Profit
after Tax (NPAT) of $22.3m compared
to an NPAT of $9.3m for the June
2015 year. From a comparative
perspective, the June 2016 year
included the after-tax effect of
acquisition related expenses of
$0.7m whilst the June 2015 year
included the after-tax effect of
due diligence costs on acquisitions
of $0.2m.
5
CEO REPORT CONTINUED
In a competitive environment, Group
revenue (excluding acquisitions)
increased by 5.4% as a result of
growth in its core businesses of
Captain Cook Cruises Sydney and
SeaLink South Australia. On Sydney
Harbour, revenue for Captain Cook
Cruises increased by 10.8% as a
result of higher dining sales and
new ferry route services into
Watsons Bay and White Bay.
Turnover from SeaLink Queensland in
Townsville increased marginally from
additional passengers on our core
Magnetic Island ferry service.
SeaLink took delivery of a mobile
floating pontoon, “Beatrice Bush”,
which has been used since
November 2015 to service cruise
ship passengers at White Bay in
Sydney. A tug and specially designed
barge were acquired in early 2016 to
meet contractual commitments for
the delivery of mineral sands from
Stradbroke Island to Brisbane. With
these acquisitions and the purchase
of the marine business of Transit
Systems and Captain Cook Cruises
WA, our fleet under management
now comprises 73 vessels as well
as one vessel under construction.
Contribution from Captain Cook
Cruises Western Australia was a
loss of $0.4m for the 2 months since
acquisition. This was expected given
the non-peak season but positions us
well as we enter the new financial year.
Growth in Profit Before Tax reflected
a higher contribution from SeaLink
South Australia’s operations which
saw a combination of higher sales
reflecting increased coach tour and
ferry passengers, increased vehicle
traffic and fuel savings. Captain Cook
Cruises Sydney also increased its
profit contribution compared to
2015 due to higher sales and
improved margins.
Lower fuel costs due to lower world
oil prices had a positive effect on the
result. Fuel costs were $1.3m lower
on a year on year basis excluding
new acquisitions.
6
SeaLink’s achievements in its key
business segments for the year were:
• Acquisition of the Transit Systems
Marine business (November 2015);
• Acquisition of Captain Cook Cruises
Western Australia (April 2016);
• A net $49.2m capital raise through
both a share placement and a
Share Purchase Plan;
• Increased funding facilities of
$59.4m to support business
expansion;
• Signing of contracts for long term
ferry services in Gladstone;
• Signing of a contract for cartage of
sand in Moreton Bay, Queensland
along with the purchase of a tug
and barge;
• Renewal of the Moggill ferry
contract;
• New ferry service in Sydney for the
White Bay cruise terminal; and
• Appointment of Andrew McEvoy as
a new Chair and Andrea Staines to
the Board.
The Company continues to focus
on its strategy of growth through
acquisition as well as maximising
sales growth from its existing
businesses.
Our underlying cash flow profile and
the cash position at year end was
strong with all financial covenants
met during the year. Gearing (as
defined by interest bearing debt to
total tangible assets) was 33%, well
within prudent gearing levels.
SEALINK SOUTH AUSTRALIA
Kangaroo Island SeaLink
– including Murray Princess
The business unit had a very solid
year where revenue increased
by 2.8% to $65m as a result of
increased traffic flow to Kangaroo
Island and improved touring sales.
Lower margin accommodation
package sales held back growth as
suppliers reduced stock available to
sell. Our Travel Centre sales revenue
reduced, reflecting direct online sales
trends. Both passenger and vehicle
numbers increased by nearly 4%
whilst freight was down 6% reflecting
lower agricultural output.
Murray Princess sales continued
their growth increasing by 5.4%.
Contribution increased by $0.3m
as higher wages associated with a
newly agreed Employee Enterprise
Agreement partly offset increased
margins. New reverse cycling air
conditioning was also installed to
service cabins on the main deck.
Spend on vessel repairs and
maintenance for the Kangaroo Island
based vessels was $0.4m higher due
to an out of water slipping for the Spirit
of Kangaroo Island. Lower fuel costs
generated positive savings of $0.4m
as a result of a drop in world oil prices.
Strong sales growth resulted in
improved contributions from tour
products and Murray Princess.
The overall business segment
contribution before interest
increased by 20% to $13m.
There were no major changes to
this core business during the year.
SeaLink continued to invest in its
vehicle fleet with one new 53 seat
coach purchased for the Kangaroo
Island Tours and one replacement 4
Wheel Drive for its Kangaroo Island
Odyssey business.
CAPTAIN COOK CRUISES SYDNEY
The 2015-16 year continued the
business growth in sales and
product expansion. Despite higher
contribution from the growing dining
product, profit was held back with
the softening of the charter market,
lower sales on contracted ferry
routes and start-up costs associated
with the new Watsons Bay and White
Bay ferry services.
Sales increased by $3.6m or 10.7%
over last year, with growth coming
from dining cruise where sales
increased 17%. This continues to
reflect increased demand from Asia,
especially China where all sales from
this source were up 26%. Charter
sales were flat which reflects a
tough competitive environment and
lower demand. Sales increases also
came from the Hop-on Hop-off ferry
service which continues to increase
its market penetration with the
additional Manly leg proving to
be popular.
Lack of access to the Opal card
led to lower revenue on ferry
services. We are hopeful the NSW
Government’s Opal Card will be open
for use on our ferries during the latter
part of the 2016-17 financial year.
7
CEO REPORT CONTINUED
In November, 2015 the Company
commenced the new White Bay ferry
service taking cruise ship passengers
to Darling Harbour and Circular Quay.
Patronage has been growing and a
recently contract signed with a cruise
line company will help secure longer
term profitability.
In March 2015, SeaLink started a
new ferry route from Watsons Bay to
Circular Quay to service the commuter
market. After building passenger
patronage, this service is now
generating positive returns.
SEALINK TOWNSVILLE AND
NORTHERN TERRITORY
There was no major change in the
Townsville/Northern Territory based
business during the year. Assisted
by a lower $0.1m expended on
vessel repairs and maintenance and
lower fuel cost compared to last year
($0.4m), the SeaLink Townsville/
Northern Territory business segment
profit contribution before allocations
increased by $0.7m.
Turnover from SeaLink Townsville
increased marginally with 2.4% higher
revenue from its core Magnetic Island
ferry service reflecting increased traffic.
There are positive trends emerging
that passenger numbers are steadily
increasing as a result of further
backpacker demand. There were no
price increases during the year. Palm
Island revenue was flat with a similar
service level to last year.
In Townsville, vessel maintenance
costs were $0.2m lower than last
year. In 2015, substantial works were
undertaken on the MV Reef Cat super
structure and interior.
The Darwin operations performed
to expectations during the year.
Darwin’s revenue increased by
$0.3m with the main influence
coming from a new Tiwi Island
packaged tours. Net contribution
from Darwin operations has been
positive and slightly ahead of plan
for the year. Higher vessel repairs
due to a planned gearbox replacement
(up $0.2m) held back growth.
Net contribution from Darwin
operations has been positive and
the Company continues to look
for further opportunities to expand
ferry services.
SEALINK GLADSTONE AND SOUTH
EAST QUEENSLAND
The business of Transit Systems
Marine (“TSM”) was acquired on
6 November, 2015 and has been
performing to expectations. Net profit
for the segment (before interest) was
$17.6m for the eight months to 30
June 2016. The contribution included
utilisation fees associated with a
Gladstone contract, amortisation of
customer contracts of $0.9m and
corporate allocations including once
off acquisition costs of $1.0m.
During the period between signing the
contract to acquire the TSM business
and settlement on 6 November,
2015, two operational contracts
for Gladstone were signed. These
contracts are now coming on-stream
in addition to the existing contracts
to supply vessels for the construction
phase of the LNG plants. Various
vessels will be demobilised (coming
off contract) over the next 12 months
as the gas plants’ construction phase
is completed. To date, 2 vessels
have been demobilised. The MV
Mandurama, was transferred to
Sydney whilst the MV Capricornian
Dancer was relocated to Melbourne on
a wet lease basis.
In December 2015, the business
secured a long term contract to
provide a tug and barge service to cart
mineral sands from North Stradbroke
Island to Brisbane. Previously, this
service utilised a sub-contractor.
SeaLink purchased a tug, a custom
designed barge and an excavator for
the contract which commenced on
1 January 2016.
Also in December 2015, SeaLink
signed a further long term contract
for the Moggill Ferry, which operates
across the Brisbane River.
CAPTAIN COOK CRUISES WESTERN
AUSTRALIA (CCCWA)
The business was acquired on 29
April 2016 and has been performing
to expectations. Net result for the
segment (before interest) was a loss of
$0.4m for the two months to 30 June
2016. Turnover for these 2 months
was 5% higher than last year reflecting
the opening in January 2016 of the
Elizabeth Quay Marina. The business
is operating to plan and is expected
to provide a strong contribution to
2016/2017 earnings.
BOARD
At the October 2015 AGM, former
Directors Mr Fred Mann and Ms
Lucy Hughes Turnbull did not seek
re-appointment due to personal
changed circumstances. SeaLink
is pleased to report that Ms Andrea
Staines commenced as a Director on
15 February, 2016. Ms Staines has
extensive experience in the transport
sector, previously holding the position
of CEO of Australian Airlines
(a subsidiary of Qantas) which she
co-launched in 2002. Ms Staines
currently sits on the Boards of
Goodstart Early Learning and the
NSW Transport Advisory Board.
She was recently appointed to
Tourism Australia.
I wish to again thank our retiring
Directors Mr Fred Mann and Ms Lucy
Hughes Turnbull for their years of
valuable advice and dedication to
the company.
FUTURE
We are confident in our strategy, which
when combined with our great people
and assets, will continue to deliver
strong shareholder performance
next year. There is strong appetite
for SeaLink’s tourism products
and services.
All businesses, except SeaLink
Gladstone, are well-positioned to
improve upon their FY16 full year
result, assuming average seasonal and
current business conditions remain.
8
• Developing the new “light ferry”
opportunity on Sydney Harbour;
• Working with the Northern Territory
Government to develop new
routes; and
• Continuing to seek new business
acquisition opportunities
that will enhance, leverage
and complement our current
capabilities and growth strategies
I would like to thank our people,
customers, suppliers, Directors and
shareholders for their support over
the past year. We could not achieve
our success without all of their
support. The hard working talented
people at SeaLink are central to our
ongoing success and I look forward
to leading the Company to future
growth and success.
JEFF ELLISON
MANAGING DIRECTOR AND CEO
Full year underlying NPAT is
expected to improve over 2016
underlying NPAT, with anticipated
and foreshadowed lower Gladstone
earnings post LNG plant construction
on Curtis Island being offset by
organic growth in pre-acquisition
businesses and full year impact
of SEQ operations and the
Captain Cook Cruises Western
Australia acquisition.
We continue to seek new
opportunities in our existing markets
with Darwin and Sydney key areas
for new routes and services. Future
organic tourism growth opportunities
in FY17 include development of
tourism to North Stradbroke Island,
continued growth in premium product
contribution in Sydney, and tourism
growth in Perth. Organic transport
growth opportunities in FY17 include
growth in the White Bay service, the
introduction of a new “light ferry”
service in Sydney and chartering a
vessel, the MV Maggie Cat, to the
Tongan government.
Construction has commenced on
two new “light ferries” for Sydney
Harbour with a capacity of 60
passengers each. We expect these
high speed, low wash catamarans
to be excellent providers of high
frequency services to locations in
the inner harbour.
Additionally, we continue to pursue
the Company’s strategy of growth
by acquisition as we continually
assess opportunities both in Australia
and overseas.
Overall FY17 has started in line
with expectations, despite adverse
weather conditions for SeaLink South
Australia in July.
In summary, SeaLink’s overall plan
for sustainable growth involves:
• Continuing to develop further
revenue and cost saving
opportunities and efficiencies from
acquisitions;
• Continuing to improve sales, yields
and margins on tourism products;
• Utilising existing sales and
marketing skills to promote new
products and services;
• Utilising in-house technology skills
to improve booking processes and
web sites to drive increased sales
and productivity;
• Crystallising opportunities to use
vessels coming off contract after
completion of the construction
phase of the LNG plants in
Gladstone;
9
REVENUE HISTORY
1998
1999
2000
2001
2002
2003
2004
2005
2006
180 ($M)
170 ($M)
160 ($M)
150 (4M)
140 ($M)
130 ($M)
120 ($M)
110 ($M)
100 ($M)
90 ($M)
80 ($M)
70 ($M)
60 ($M)
50 ($M)
40 ($M)
30 ($M)
20 ($M)
10
10
Adelaide Sightseeing
Day Tours and
City Centre Travel
acquired.
1999
1998
Luxury Kangaroo
Island ferry
‘Sealion 2000’
built and launched.
Australian Holiday
Centres Melbourne
and Sydney
acquired.
Luxury Kangaroo
Island ferry ‘Spirit
of KI’ built and
launched.
2003
Cape Jervis Ferry
Terminal built and
officially opened.
2005
2006
Kangaroo Island
Adventure Tours
soft adventure
business acquired.
2004
Auckland NZ based
ferry company, Subritzky
Ferries acquired.
The Ski Connection ski
packaging and express
coach transport
company acquired.
Vivonne Bay Outdoor
Education Centre,
Kangaroo Island
acquired.
180 ($M)
170 ($M)
160 ($M)
150 (4M)
140 ($M)
130 ($M)
120 ($M)
110 ($M)
100 ($M)
90 ($M)
80 ($M)
70 ($M)
60 ($M)
50 ($M)
40 ($M)
30 ($M)
20 ($M)
10
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Kangaroo Island
Booking Centre retail
specialist agency
acquired.
SeaLink selected as
Facility Managers for
new Adelaide Central
Bus Station.
SkyLink Adelaide
Airport Shuttle Service
and fleet of coaches
acquired.
Vivonne Bay Eco
Adventures built Bistro
and Function Centre.
CJ’s by the Sea café
opened at Cape Jervis
Ferry Terminal.
2007
2008
Big B Cartage
Limited – NZ
freight & trucking
company, majority
shareholding
acquired.
Premier Day Tour
business acquired.
Acquisition of Captain
Cook Cruises WA.
2016
Establishment of
SeaLink Northern
Territory and
commencement of ferry
services from Darwin.
Listed on the ASX.
2013
2015
Acquisition of
Transit Systems
Marine Businesses.
Kangaroo Island
Odysseys 4WD
Luxury Touring
business acquired.
2010
2014
Constructed
the Penneshaw
Terminal,
Kangaroo Island.
2011
Sunferries Townsville,
ferries to Magnetic
and Palm Island
acquired.
Captain Cook Cruises
and Matilda Cruises,
Sydney Harbour and
Murray River Cruises
acquired.
Sold SeaLink
New Zealand including
shareholding in Big B
Cartage Limited.
SkyLink Adelaide
Airport Shuttle
Service sold.
11
KEY RESULTS
RESULTS IN BRIEF
Revenue from ordinary activities
Net Profit Before Tax
Profit after tax from ordinary activities
Note – 2014 includes ASX Listing costs of $0.9m before tax.
– 2015 includes due diligence costs of $0.3m before tax.
JUNE 2016
$M
JUNE 2015
$M
CHANGE
$M
CHANGE
%
176.7
32.0
22.3
111.3
13.4
9.3
65.4
18.6
13.0
59
139
140
DIVIDENDS
FINAL DIVIDEND DATES
AMOUNT
PER SHARE
CENTS
FRANKED
AMOUNT
PER SHARE
CENTS
TAX RATE
FOR
FRANKING
CREDIT
Ex-dividend date
Record Date
Payment date
22 September 2016
23 September 2016
14 October 2016
30 JUNE 2015
Interim Dividend
Final Dividend
30 JUNE 2016
Interim Dividend
Final Dividend
3.80
4.00
4.5
7.5
3.80
4.00
4.5
7.5
30%
30%
30%
30%
NET TANGIBLE ASSETS
Net tangible assets
per ordinary share
JUNE
2016 $
0.89
JUNE
2015 $
0.69
The report is based on the consolidated financial
statements which have been audited by Ernst & Young.
Additional Appendix 4E disclosure requirements can
be found in the Directors’ Report and the consolidated
financial statements.
12
DIRECTORS REPORT
The Board of Directors of
SeaLink Travel Group Ltd
(SeaLink) has pleasure in
submitting its report for the
year ended 30 June, 2016.
DIRECTORS
The names and details of the company’s Directors in office during the financial year and
until the date of this report are set out below. Directors have been in office for the entire
period unless otherwise stated.
JEFFREY ELLISON
(BA (Acc), FCA, FAICD)
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
Mr Ellison holds a
Bachelor of Arts
Degree in Accounting
from the University of
South Australia, is a
Fellow of the Chartered
Accountants Australia
and New Zealand and
the Institute of Company
Directors. He has held
the position of Chief
Executive Officer since
1997 and appointed
Managing Director in
2008. Mr Ellison is a
member on the Tourism
Australia International
Industry Advisory Panel
and a Director of Solstice
Media Ltd. Mr Ellison
has been awarded Life
Membership of TTF
Australia (Tourism and
Transport Forum).
ANDREW McEVOY
(MA (Comms), BA Arts)
CHAIRMAN
Mr McEvoy holds a
Bachelor of Arts Degree
from the University of
Melbourne and a Masters
in Communications from
City University in London.
Mr McEvoy has extensive
experience in the
tourism sector, having
held management
positions with both
Tourism Australia and
the South Australian
Tourism Commission.
He is currently Managing
Director, Life Media and
Events of Fairfax Media,
where he oversees the
company’s new business
portfolio, including events
and content marketing.
Mr McEvoy was
appointed a Director on
1 February, 2015 and
was appointed Chair
effective 1 July, 2015
and is a member of
the Remuneration and
Nomination Committee.
TERRY DODD
NON-EXECUTIVE DIRECTOR
Mr Dodd has extensive
experience in business
management and
the marine industry.
After qualifying as a
commercial diver in
the USA and working
as a commercial diver
in the onshore and
offshore oil and gas
industry, he successfully
established a recreational
diving business and a
travel agency in North
Queensland.
Mr Dodd is Managing
Director of Pacific Marine
Group Pty Ltd, one
of Australia’s largest
marine construction
and commercial diving
companies. Mr Dodd
was previously Managing
Director of Sunferries, a
ferry transport business
based in Townsville, prior
to its sale to SeaLink in
March 2011 when Mr
Dodd joined the Board of
SeaLink. Mr Dodd is also
Vice Chairperson on the
Board of the Australian
Festival of Chamber
Music based in Townsville.
CHRISTOPHER
SMERDON
(MAICD)
NON-EXECUTIVE DIRECTOR
Mr Smerdon has
extensive experience
in the Information
Technology field.
He founded Protech
Australasia Pty Ltd in
1984 and was Managing
Director until he sold his
interests in 1995. Other
Directorships currently
held by Mr Smerdon are
with Tourism & Allied
Holdings Pty Ltd. and
Aquaport Corporation.
He is a former member
of the South Australian
Government Motorsport
Board. Chris is currently
Managing Director of
Vectra Corporation, an
international player in
Security Consulting,
Solutions and
Infrastructure.
Mr Smerdon joined
the Board in 2002 and
is a member of the
Company’s Audit and
Risk Committee.
13
TREVOR WALLER
(BA (Acc), Dip Corp Management)
COMPANY SECRETARY
Mr Waller is the CFO and
Company Secretary of the
SeaLink Travel Group, a
position he has held since
June 2006. He is a former
Chartered Accountant and
Chartered Secretary who
joined SeaLink following a
wide range of commercial
experience including 17
years in banking and 8
years in private practice.
Mr Waller holds a Diploma in
Corporate Management and
a Bachelor Degree in Arts.
PAUL BLEWETT
(LLB)
COMPANY SECRETARY
Appointed 9 March 2016
Prior to joining SeaLink as
General Counsel, Mr Blewett
was Regional General
Counsel and Company
Secretary for Boart Longyear
Limited (ASX:BLY). Mr
Blewett has also held a
number of similar positions
with other ASX listed
companies, following private
legal practice for eight years
with Lynch Meyer in South
Australia.
WILLIAM (BILL)
SPURR AO
(BApp,Science, BEc, Dip T, FAICD)
NON-EXECUTIVE DIRECTOR
ANDREA STAINES
(MBA Finance, BA Economics)
NON-EXECUTIVE DIRECTOR
Appointed 15 February, 2016
Mr Spurr’s extensive
experience in the tourism
and hospitality industries
dates back to the early
1980’s when he was
the Executive Director
of the Australian Hotels
Association. Mr Spurr
held the position as
Chief Executive of the
South Australian Tourism
Commission from 1999 until
July, 2007.
Mr Spurr is currently Chair
of Education Adelaide
and Adelaide Venue
Management Corporation
and is an adjunct Professor
of Tourism at Flinders
University.
Mr Spurr joined the Board
of SeaLink in 2007, is
Chairperson of the both
the Company’s Audit
and Risk Committee and
the Remuneration and
Nomination Committee.
Ms Staines has extensive
experience in the transport
sector and is a former
CEO of Australian Airlines
which she co-launched in
2002. Ms Staines currently
sits on the Boards of QIC,
Goodstart Early Learning,
Uniting Care Queensland
and the Australian Rural
Leadership Foundation.
She was recently appointed
to Tourism Australia.
Ms Staines has held
previous directorships
with Aurizon Holdings
Ltd, Australian Rail Track
Corporation, Gladstone
Ports Corporation, North
Queensland Airports,
Allconnex Water, Early
Learning Services and
Royal Children’s Hospital
foundation.
Ms Staines is a member
of the Company’s
Remuneration and
Nomination Committee and
a member of the Company’s
Audit and Risk Committee.
14
DIRECTORS REPORT INTEREST IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report, the interests of the directors in the shares and options of the Company were:
A McEvoy
C D Smerdon
J R Ellison
T J Dodd
W T Spurr
A Staines
DIRECTOR’S MEETINGS
NUMBER OF ORDINARY SHARES
–
6,104,500
5,524,769
5,212,000
81,000
–
NUMBER OF OPTIONS OVER ORDINARY SHARES
–
–
–
–
–
–
The number of meetings of Directors (including meetings of committees of Directors) held during the last financial year and
attended by each Director were as follows:
NUMBER OF BOARD
MEETINGS ATTENDED
10
10
10
10
10
10
4
3
2
Number of meetings held:
A McEvoy (Chairperson)
C D Smerdon
J R Ellison
T J Dodd
W T Spurr
A Staines
F A Mann (Former Director)
L M F Hughes Turnbull
(Former Director)
NUMBER OF AUDIT AND RISK
COMMITTEE MEETINGS ATTENDED
3
–
2
3**
–
3
–
1
–
NUMBER OF REMUNERATION AND
NOMINATIONS COMMITTEE
2
2
–
2**
–
2
2
–
2
All current Directors were eligible to attend all meetings held, except for Ms Andrea Staines who was eligible to attend 5
Director’s meetings. ** Mr Ellison attended the Board sub-committees by invitation only.
COMMITTEE MEMBERSHIP
PRINCIPAL ACTIVITIES
As at the date of this report, the Company had an Audit
and Risk Committee and a Remuneration and Nomination
Committee. Members acting on the Committees of the
Board during the year were:
The principal activities of SeaLink during the year
were in providing:
• Ferry services;
Audit and Risk
W T Spurr (C)
A Staines
C D Smerdon
(C) Chairperson
DIVIDENDS
Remuneration and Nomination
• Tourism cruises, charter cruises
and accommodated cruising;
W T Spurr (C)
A Staines
A McEvoy
• Coach tours;
• Packaged holidays;
• Travel agency services;
• Tug and barge service; and
• Accommodation and restaurant services
at Vivonne Bay.
The following dividends of the consolidated entity have been paid, declared or recommended since the end of
the preceding financial year:
Interim fully franked dividend for 2016 paid 15 April 2016.
Final fully franked dividend for the year ended 30 June 2015
and paid 15 October 2015.
CENTS PER ORDINARY SHARE
AMOUNT
4.5
$4,550,521
4.0
$3,072,597
SeaLink’s directors today declared a 7.5 cents per share fully franked final dividend payable on 14 October 2016 to
shareholders registered on 23 September 2016. This represents a 54% return of net profit after tax to shareholders, in line
with STG’s policy of returning 50-70% of after-tax profit, subject to business needs and ability to pay. The interim dividend for
the half-year ended 31 December 2015 was 4.5 cents per share.
The Board will continue to consider SeaLink’s growth requirements, its current cash position, market conditions and the
need to maintain a healthy balance sheet, when determining future dividends.
15
DIRECTORS REPORT DIRECTORS REPORT
SHARE OPTIONS
UNISSUED SHARES
As at 30 June 2016, there were
200,000 (2015; 781,250) options
outstanding to acquire ordinary
shares in the Company. There were
no options issued to staff during the
period. No options over issued shares
or interests in the Company or a
controlled entity were granted since
the end of the financial year.
Option holders do not have any right,
by virtue of the option, to participate in
any share issue of the Company.
SHARES ISSUED AS A RESULT OF
THE EXERCISE OF OPTIONS
During the year, Directors and
employees have exercised options
to acquire 781,250 fully paid ordinary
shares in SeaLink at an average
weighted exercise price of $1.40
per share.
SIGNIFICANT CHANGES
IN THE STATE OF AFFAIRS
The business of Transit Systems
Marine was acquired on 6th
November, 2015 for a consideration
of $115 million net of adjustments.
This acquisition was funded through:
• A capital placement of 16.9m
shares at an issue price of $2.50
per share;
• A Share Placement Plan which
resulted in 4.33m shares being
issued at $2.50;
• Issuing 3.2m shares to the vendor
at an issue price of $2.50 per share
(fair value at settlement was $3.39
per share); and
• The balance through Bank debt
of $66.3M was drawn down at
settlement.
On 29th April 2016, the Group
acquired the business of Captain
Cook Cruises WA for a consideration
of $11m net of adjustments. The
acquisition involved the purchase of
shares in two entities and was funded
from existing debt facilities.
These acquisitions have further
strengthened SeaLink’s position as
the leading provider of transport and
tourism services in Australia.
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
NON-AUDIT SERVICES
A fully franked dividend of $7,856,558
representing 7.5 cents per share
based on the current number of
ordinary shares was declared by the
Directors on 10 August 2016 to be
paid 14 October 2016.
The Company has contracted to
construct two vessels for use in
Sydney Harbour at a cost of $1.7m.
Apart from the above, there are no
significant events after the end of the
reporting period which have come to
our attention.
OTHER
The consolidated entity’s operations
are not regulated by any significant
environmental regulation under a law
of the Commonwealth or of a State or
Territory.
No person has applied for leave
of Court to bring proceedings on
behalf of the Company or intervene
in any proceedings to which the
Company is a party for the purpose
of taking responsibility on behalf of
the Company for all or part of those
proceedings.
ROUNDING
The amounts contained in this report
and in the financial report have been
rounded to the nearest $1,000 (unless
otherwise stated) under the option
available to the Company under ASIC
Corporations (Rounding in Financial/
Directors’ Reports) Instrument
2016/191. The Company is an entity
to which the legislative instrument
applies.
AUDITOR’S INDEPENDENCE
DECLARATION
A copy of the auditor’s independence
declaration as required under Section
307C of the Corporations Act 2001 is
set out on page 47.
The following non-audit services were
provided by the Company’s auditor,
Ernst & Young. The directors are
satisfied that the provision of non-
audit services is compatible with the
general standard of independence for
auditors imposed by the Corporations
Act 2001:
• Assurance related and acquisition
related services – $51,500
INDEMNIFICATION OF OFFICERS
AND DIRECTORS
During the financial year, the Company
renewed a contract insuring the
directors of the Company (as named
above), and all executive officers
of the Company and of any related
body corporate against a liability
incurred in their capacity as directors,
secretary or executive officer to the
extent permitted by the Corporations
Act 2001. The contract of insurance
prohibits disclosure of the nature of the
liability cover and the amount of the
premium.
The Company is party to Deeds of
Indemnity in favour of each of the
Directors, referred to in this report who
held office during the year and certain
officeholders of the consolidated entity.
The indemnities operate to the full
extent permitted by law and are not
subject to a monetary limit. SeaLink is
not aware of any liability having arisen,
and no claims have been made, during
or since the financial year ending
30 June 2016 under the Deeds of
Indemnity.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the
Company has agreed to indemnify
its auditors, Ernst & Young Australia,
as part of the terms of its audit
engagement agreement against
claims by third parties arising from the
audit (for an unspecified amount). No
payment has been made to indemnify
Ernst & Young during or since the
financial year.
A J McEVOY
CHAIRPERSON
10th August 2016
16
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED 30 JUNE 2016
CONTINUING OPERATIONS
Revenue
Interest income
Other income
Total income
DIRECT OPERATING EXPENSES
Direct wages
Repairs and maintenance
Fuel
Commission
Meals and beverage
Accommodation
Tour Costs
Other direct expenses
ADMINISTRATION EXPENSES
Indirect wages
General and administration
Marketing and selling
Financing charges
Amortisation of customer contracts
Business acquisition expenses
Total expenses
PROFIT BEFORE TAX FROM CONTINUING OPERATIONS
Income tax expense
Profit for the year from continuing operations
Attributable to equity holders of the parent
EARNINGS PER SHARE
Basic, profit for the year attributable to ordinary equity holders of the parent
Diluted, profit for the year attributable to ordinary equity holders of the parent
1B (a)
1B (g)
1C
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (OCI)
FOR THE YEAR ENDED 30 JUNE 2016
NOTE
PROFIT FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Net (loss)/gain on cash flow hedge (interest rate swap)
2I (iii)
Deferred tax
Net other comprehensive loss to be reclassified to profit and loss
in subsequent financial periods
Total comprehensive income for the year, net of tax
Attributable to equity holders of the parent
NOTE
2016
$’000
2015
$’000
1A (a)
176,723
111,282
1A (b)
203
533
86
380
177,459
111,748
47,157
25,848
8,845
5.927
6,647
7,693
4,231
10,465
17,778
19,497
10,596
2,076
2,470
965
1,040
145,487
31,972
9,623
22,349
22,349
$0.236
$0.234
2016
$’000
22,349
(1,070)
321
(749)
21,600
21,600
5,042
4,353
6,022
6,411
4,231
10,711
10,921
14,993
6,132
2,192
1,164
–
332
98,352
13,396
4,047
9,349
9,349
$0.123
$0.120
2015
$’000
9,349
–
–
–
9,349
9,349
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT ARE INCLUDED ON PAGES 23-50
17
17
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Deferred tax assets
Total Non-Current Assets
Total Assets
CURRENT LIABILITIES
Trade and other payables
Unearned revenue
Operating lease liability
Interest bearing loans and borrowings
Current tax liabilities
Other financial liabilities
Provisions
Total Current Liabilities
NON-CURRENT LIABILITIES
Unearned revenue
Interest bearing loans and borrowings
Deferred tax liabilities
Other financial liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Total equity
NOTE
2A
2B
2C
2D
2E
2J
2F
2H
2K
2I
2L
2G
2H
2I
2J
2L
2G
3B
3C
2016
$’000
5,208
14,951
3154
1,810
25,123
175,037
47,748
4,693
227,478
252,601
9,759
5,000
1,279
2,864
14,264
230
8,525
41,921
1,149
65,233
5,514
840
989
73,725
115,646
136,955
95,557
(230)
41,628
136,955
2015
$’000
2,261
3,227
1,302
1,244
8,034
72,631
6,629
2,721
81,981
90,015
5,238
3,814
–
3,293
1,578
–
4,453
18,376
1,321
7,027
1,015
–
982
10,345
28,721
61,294
33,904
487
26,903
61,294
18
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT ARE INCLUDED ON PAGES 23-50
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED
NOTE
BALANCE AT 1ST JULY, 2014
Profit for the period
Other comprehensive income
Total comprehensive income for the period
TRANSACTIONS WITH OWNERS
IN THEIR CAPACITY AS OWNERS –
Dividends paid or provided for
Issue of share capital
Issue of share options
Balance at 30th June, 2015
BALANCE AT 1ST JULY, 2015
Profit for the period
Other comprehensive income
Total comprehensive income for the period
TRANSACTIONS WITH OWNERS
IN THEIR CAPACITY AS OWNERS –
Dividends paid or provided for
Issue of share capital
Issue of share options
3D
3B
3C
3D
3B
CASH FLOW
HEDGE
RESERVE
$’000
–
–
–
–
–
–
–
–
(749)
(749)
–
–
–
CON-
TRIBUTED
EQUITY
$’000
30,164
–
–
–
–
3,740
–
RETAINED
EARNINGS
$’000
23,315
9,349
–
9,349
(5,761)
–
–
33,904
26,903
33,904
–
–
–
–
61,653
–
26,903
22,349
–
22,349
(7,624)
–
–
Balance at 30th June, 2016
(749)
95,557
41,628
FINANCIAL REPORT
SHARE
OPTION
RESERVE
$’000
464
–
–
–
–
–
23
487
487
–
–
–
–
–
32
519
TOTAL
$’000
53,943
9,349
–
9,349
(5,761)
3,740
23
61,294
61,294
22,349
(749)
21,600
(7,624)
61,653
32
136,955
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT ARE INCLUDED ON PAGES 23-50
19
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Net GST paid
Interest received
Interest paid
Income tax (paid)/received
Net operating cash flows
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sale of property, plant and equipment
Cash was disbursed to:
Payments for property, plant and equipment
Acquisition of new businesses (net of cash acquired)
Net investing cash flows
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Dividend paid
Net financing cash flows
Net increase/(decrease) in cash held
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
2A
7A
3B
3D
2A
2016
$’000
176,178
(128,771)
(4,856)
203
(2,502)
(8,158)
32,094
2015
$’000
111,330
(90,458)
(3,525)
86
(1,164)
(4,080)
12,189
26
2,373
(6,855)
(115,273)
(122,102)
50,299
57.500
(7,220)
(7,624)
92,955
2,947
2,261
5,208
(11,499)
–
(9,126)
3,733
–
(3,222)
(5,761)
(5,250)
(2,187)
4,448
2,261
20
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT ARE INCLUDED ON PAGES 23-50
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES
INDEX
SECTION 1: KEY NUMBERS - STATEMENT OF COMPREHENSIVE INCOME
1A
1B
1C
1D
SECTION 2: KEY NUMBERS - STATEMENT OF FINANCIAL POSITION
2A
2B
2C
2D
2E
2F
2G
2H
2I
2J
2K
2L
SECTION 3: CAPITAL
3A
3B
3C
3D
3E
SECTION 4: RISK
4A
4B
SECTION 5: ACCOUNTING POLICIES
5A
5B
5C
5D
5E
SECTION 6: UNRECOGNISED ITEMS
6A
6B
6C
SECTION 7: OTHER
7A
7B
7C
7D
7E
7F
ASX ADDITIONAL INFORMATION
Income
Expenses
Tax Expense
Operating Segment Reporting
Cash and short term deposits
Trade and other receivables
Inventories
Property, plant and equipment
Intangible assets
Trade and other payables
Provisions
Unearned revenue
Interest bearing loans and borrowings
Deferred tax
Operating lease
Other financial liabilities
Capital Management
Equity
Reserves
Dividends
Earnings per share
Financial risk management objectives and policies
Hedging
Basis of preparation
Summary of other significant accounting policies
Changes in accounting policies and disclosures
Standards issued but not yet affective
Fair value measurement
Commitments
Contingencies
Events after the reporting period
Business Combinations
Corporate information
Parent Disclosure
Share Option Plans
Related Party Transactions
Related Bodies Corporate
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT ARE INCLUDED ON PAGES 23-50
21
FINANCIAL REPORT 22
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
1 STATEMENT OF COMPREHENSIVE INCOME
REVENUES FROM CONTINUING OPERATIONS
2016
$’000
2015
$’000
A INCOME
(a) REVENUE
Sales revenue
Rental income
(b) OTHER INCOME
Profit on the sale of fixed assets
Fuel derivative (loss)/income
Expired bookings and cancellation fees
Other
B EXPENSES
(a) FINANCE COSTS
Interest expense
Borrowings
Leases
Finance charges
(b) DEPRECIATION/AMORTISATION
Depreciation
Property, plant and equipment
Leased assets
Total depreciation
Amortisation of customer contracts
(c) EMPLOYEE BENEFITS EXPENSE
Wages and salaries
Share based expense
Other employee benefits/entitlements
Superannuation
Workers Compensation costs
176,248
475
176,723
5
–
315
213
533
1,773
144
553
2,470
7,770
68
7,838
965
53,769
32
2,175
5,411
1,620
63,008
110,869
413
111,282
155
(200)
325
100
380
552
320
292
1,164
3,753
91
3,844
–
31,807
23
1,440
3,414
1,121
37,782
(d) LEASE PAYMENTS IN INCOME STATEMENT
Lease and rental expenses
(e) AUDITOR’S REMUNERATION
The following total remuneration was received, or is due and receivable, by the
auditor Ernst & Young of the parent entity and its affiliates in respect of:
– Auditing the accounts
– Other services – Assurance and due diligence
(f) INVENTORY EXPENSE
Costs of inventories recognised as an expense
(g) ACQUISITION EXPENSE
2,497
1,723
229
51
280
126
160
286
13,734
10,863
Costs involved in relation to business acquisitions (stamp duty, legal)
1,040
332
23
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
C TAX EXPENSE
The major components of income tax expense for the years ended 30 June 2016 and 2015 are:
2016
$’000
2015
$’000
Consolidated statement of profit and loss
Current tax
Deferred tax
Under (over) provision in respect of prior years plus adjustments
Income tax expense reported in the income statement
Consolidated statement of OCI
Deferred tax related to items recognised and charged in OCI during the year:
Net loss on revaluation of cash flow hedges
Tax expense reconciliation
The prima facie income tax expense on pre-tax accounting profit reconciles to
the income tax expense as follows:
Income tax expense calculated at 30% of operating profit
Other (entertainment etc)
Non-deductible expenses (goodwill/share option cost)
Amounts under/(over) provided in prior years
Income tax expense reported in the income statement
16,029
(6,407)
1
9,623
3,966
80
1
4,047
321
–
9,592
21
9
1
9,623
4,019
20
7
1
4,047
D OPERATING SEGMENT REPORTING
For management purposes,
the Group is organised into business
units by reporting lines and has six
main reporting segments:
• Kanagaroo Island SeaLink (KIS),
which offers ferry services, tours
in SA, packaged holidays, retail
travel services, accommodation
facilities at Vivonne Bay and
accommodated cruising on the
PW Murray Princess;
• Captain Cook Cruises (CCC)
which runs tourist cruises,
charter cruises, ferry passenger
services on Sydney Harbour;
SeaLink Queensland (SQ) which
includes and manages the
operations of SeaLink Northern
Territory. This unit provides ferry
passenger services in Townsville
and Darwin as well as offering
packaged holidays;
• SeaLink Queensland (SQ) which
includes and manages the
operations of SeaLink Northern
Territory. This unit provides ferry
passenger services in Townsville
and Darwin as well as offerring
packaged holidays;
• Captain Cook Cruises WA (CCC
WA) which includes tourist cruises
and ferry operations in Perth;
• SeaLink Gladstone and SeaLink
SEQ (TSM) which includes ferry and
barging operations in Gladstone
and South East Queensland; and
• Corporate (Head Office), which
provides finance, administration
and risk management support.
The Board and Executive Committee
monitors the operating results of
each business unit separately for
the purpose of making decisions
about strategy, resource allocation,
cost management and performance
assessment. Segment performance is
measured consistently with operating
profit or loss in the consolidated
financial statements. Group income
taxes and funding are managed on a
Group basis and are not allocated to
the segments below. Transfer pricing
between operating segments is on an
arm’s length basis in a manner similar
to transactions with third parties.
24
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
D OPERATING SEGMENT REPORTING – CONTINUED
YEAR ENDED 30 JUNE 2016
Internal revenue
External Revenue
RESULTS
KIS
$’000
3,550
CCC
$’000
SQ
$’000
CCC WA
$’000
TSM
$’000
CORPO-
RATE
$’000
ELIMINA-
TIONS
$’000
CONSOLI-
DATED
$’000
–
980
–
–
2,089
(6,619)
–
65,114
36,793
15,874
1,169
58,419
(113)
–
177,256
Capital expenditure
1,550
2,084
Amortisation of customer contracts
–
–
Depreciation
2,076
1,774
286
–
532
55
26
65
2,880
939
3,385
–
–
6
Segment profit before interest and
allocations – continuing operations
Corporate allocations
Segment profit before
interest and tax – continuing
Interest income
Interest cost and finance charges
15,644
(2,698)
2,641
(773)
2,767
(366)
(389)
(154)
19,754
(6,179)
(2,188)
6,179
12,946
1,868
2,401
(543)
17,566
–
Segment profit before tax – continuing operations
Inter-segment revenues are eliminated on consolidation and reflected in the eliminations column.
–
–
–
–
–
–
6,855
965
7,838
34,238
–
34,238
203
(2,470)
31,972
YEAR ENDED 30 JUNE 2015
Internal revenue
External Revenue
RESULTS
Capital expenditure
Depreciation
Segment profit before interest and
allocations – continuing operations
Corporate allocations
Segment profit before
interest and tax – continuing
Interest income
Interest cost and finance charges
CCC
$’000
SQ
$’000
CCC WA
$’000
TSM
$’000
KIS
$’000
2,657
–
970
63,321
33,197
1 5,257
8 ,027
1 ,790
2,966
1 ,464
506
568
14,561
(3,263)
2,054
(788)
2,020
(110)
11,298
1 ,266
1,910
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Segment profit before tax – continuing operations
CORPO-
RATE
$’000
ELIMINA-
TIONS
$’000
CONSOLI-
DATED
$’000
3,101
(6,728)
–
(113)
–
111,662
–
22
(4,161)
4 ,161
–
–
–
–
–
–
11,499
3,844
14,474
–
14,474
86
(1,164)
13,396
25
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
THE FOLLOWING TABLE PRESENTS SEGMENT ASSETS AND LIABILITIES OF THE GROUP’S OPERATING SEGMENTS
KIS
$’000
38,280
76,790
CCC
$’000
SQ
$’000
CCC WA
$’000
TSM
$’000
36,620
15,426
13,221
144,353
5,139
3,376
1,713
8,850
36,159
17,798
36,006
15,118
4,657
3,673
–
–
–
–
CORPO-
RATE
$’000
ELIMINA-
TIONS
$’000
CONSOLI-
DATED
$’000
8
–
11
–
–
–
–
–
247,908
95,868
87,294
26,128
AT 30 JUNE 2016
Operating assets
Operating liabilities
AT 30 JUNE 2015
Operating assets
Operating liabilities
RECONCILIATION OF
ASSETS AND LIABILITIES
Segment operating assets
Deferred tax assets
Group total assets
Segment operating liabilities
Current tax liabilities
Deferred tax liabilities
Group total liabilities
CONSOLIDATED
2016
$’000
CONSOLIDATED
2015
$’000
247,908
4,693
252,601
95,868
14,264
5,514
115,646
87,294
2,721
90,015
26,128
1,578
1,015
28,721
2016
$’000
2015
$’000
2 STATEMENT OF FINANCIAL POSITION
A CASH AND CASH EQUIVALENTS
(a) RECONCILIATION OF CASH
For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise the following:
Cash
Cash on deposit
Total cash and cash equivalents
1,795
3,412
5,208
1,795
466
2,261
(b) RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Profit for the year after income tax
Non-Cash Items
Depreciation and amortisation of non-current assets
Deferred income
Loss/(Profit) on disposal of non-current assets
Share Option cost
Share raising costs
Changes in net assets and liabilities
Tax balances Increase/(Decrease)
Current trade receivables Decrease/(Increase)
Current inventories (Increase)/Decrease
Other current assets Decrease/(Increase)
Current trade and other creditors Increase/(Decrease)
Employee entitlements Increase/(Decrease)
Net cash provided by operating activities
26
22,349
9,349
8,803
(172)
(5)
32
–
1,466
(939)
(237)
(466)
(562)
1,825
32,094
3,844
(171)
(155)
23
–
(33)
(195)
106
133
(989)
277
12,189
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
B TRADE AND OTHER RECEIVABLES – CURRENT
Trade receivables
Other
Allowance for doubtful debts
Total trade and other receivables
2016
$’000
14,679
324
(52)
14,951
2015
$’000
2,975
258
(6)
3,227
Trade receivables are non-interest bearing and are generally on 30-60 day terms. An allowance for doubtful debts is made
when there is objective evidence that a trade receivable is past due and considered impaired.
ALLOWANCE FOR DOUBTFUL DEBTS
Opening Balance
Charge for the Year
Utilised
Closing Balance
As at 30 June, the ageing analysis of trade receivables is as follows:
INDIVIDUALLY
IMPAIRED
$’000
INDIVIDUALLY
IMPAIRED
$’000
(6)
(46)
–
(52)
(13)
–
7
(6)
NEITHER PAST DUE
OR IMPAIRED
RECEIVABLES
PAST DUE BUT
NOT IMPAIRED
RECEIVABLES
PAST DUE BUT
NOT IMPAIRED
RECEIVABLES
PAST DUE BUT
NOT IMPAIRED
IMPAIRED
TOTAL
0–30 DAYS
31–60 DAYS
61–90 DAYS
OVER 90 DAYS
2016 –
CONSOLIDATED
2015 –
CONSOLIDATED
14,679
12,589
2,975
1,777
1,616
855
250
287
172
50
All other debtors are not past due and not impaired.
C INVENTORIES
Fuel (at cost)
Goods held for resale (at cost)
Spare parts
Total current inventories
2016
$’000
327
580
2,247
3,154
52
6
2015
$’000
176
375
751
1,302
27
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
NOTE
2016
$’000
2015
$’000
D PROPERTY, PLANT AND EQUIPMENT
LAND AND BUILDINGS
Cost
Opening balance
Additions
Acquired through business combinations
7A
Disposals
Closing balance
Accumulated depreciation
Opening balance
Disposals
Depreciation for the year
Closing balance
Total land and buildings, net
PLANT AND EQUIPMENT
Cost
Opening balance
Transfers
Transfer from capital work
1B (b)
Acquired through business combinations
7A
Additions
Disposals
Closing balance
Accumulated depreciation
Opening balance
Transfers
Depreciation for the year
Disposals
Closing balance
Total plant and equipment, net
PLANT AND EQUIPMENT UNDER LEASE
Cost
Opening balance
Additions
Transfers
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation for the year
Transfers
Disposals
Closing balance
Total leased plant and equipment, net
28
1B (b)
1B (b)
16,060
47
4,063
–
20,170
2,039
–
492
2,531
17,639
12,215
540
504
6,222
1,411
(454)
20,438
6,069
387
1,308
(433)
7,331
13,107
884
406
(540)
–
750
459
68
(387)
–
140
610
16,115
207
–
(262)
16,060
1,750
(80)
369
2,039
14,021
11,258
–
–
–
1,901
(944)
12,215
5,933
–
892
(756)
6,069
6,146
884
–
–
–
884
368
91
–
–
459
425
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
NOTE
2016
$’000
2015
$’000
FERRIES
Cost
Opening balance
Additions
Acquired through business combinations
7A
Transfers from Capital works-in progress
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation for the year
Disposals
Closing balance
Total ferries, net
CAPITAL WORKS-IN-PROGRESS
Opening balance
Additions
Transfers to ferry/buildings
Closing balance – represented by pontoon/ferries
Total property, plant and equipment, net
1B (b)
71,553
3,411
93,124
–
–
168,089
20,018
5,970
–
25,988
142,101
504
1,580
(504)
1,580
175,037
61,971
8,887
–
3,268
(2,573)
71,553
18,251
2,492
(725)
20,018
51,535
3,268
504
(3,268)
504
72,631
At 30 June 2016, there was 1 new vessel build in progress for use in Darwin. The vessel will replace the James Grant
which will be relocated to Gladstone on a long term contract. At 30 June 2015, work in progress relates to a mobile
pontoon for use in Sydney Harbour. Refer also to Note 6A for capital commitments.
2016
$’000
2015
$’000
E INTANGIBLE ASSETS
Goodwill – at cost
Cost
Opening balance
Additions thorough business combination
Closing balance
Accumulated Impairment
Opening and Closing balance
Total goodwill
Customer contracts
Additions through business combination
Closing balance – at cost
Less – amortisation during the period
Total customer contracts
Total intangible assets, net
6,758
33,671
40,429
(129)
40,300
8,413
8,413
(965)
7,448
47,748
6,758
–
6,758
(129)
6,629
–
–
–
–
6,629
29
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
Goodwill acquired through business
acquisitions has been allocated to
KI Odysseys ($209,000), SeaLink
Queensland ($6,420,392), Australian
Holiday Centre Sydney ($128,520),
Captain Cook Cruises WA ($3,590,174)
and the Transit Systems Marine
business ($30,081,028) being cash
generating units (CGU’s). The Group’s
impairment testing compares the
carrying value of each CGU with its
recoverable amount as determined
using a value in use calculation.
Australian Holiday Centre has
been fully provided for in previous
financial years.
The majority of goodwill associated
with the Transit Systems Marine
business relates to the North
Stradbroke Island ferry service,
none of which is deductible for
income tax purposes. The Group
performed its annual impairment
test at 30 June 2016.
The assumptions for determining the
recoverable amount are based on past
experience and Senior Management’s
expectations for the future. The cash
flow projections are based on annual
financial budgets approved by senior
management extrapolated using a 3%
growth rates for a five-year period.
For all CGU’s, an EBIT ratio of between
6 and 7 times year 5 earnings has
been used to determine the terminal
value based on senior management’s
expectations of market price for these
style of businesses.
A pre-tax discount rate of 11.9%
(2015:12.1%) was applied to cash flow
projections and terminal value to arrive
at the recoverable amount. As a result
of the updated analysis, management
did not identify an impairment for either
of these CGU’s.
KEY ASSUMPTIONS USED IN THE
VALUE IN USE CALCULATIONS
The calculation of value in use for
both cash generating units is most
sensitive to the following key material
assumptions:
– Passenger numbers to Magnetic
Island – An increase of 1% in traffic
has been inbuilt into forecast sales
based on increased tourism flow
into Australia as well as a growing
population base in Townsville.
– Vessel repairs – These are
estimated to increase at CPI (3%
assumed) adjusted for significant
expected engine rebuilds.
– Passengers for KIO – An increase
of 1-2% in traffic has been inbuilt
to the forecast based on increased
tourism flow into Australia,
increased marketing focus and
higher on-line sales expected.
– Passenger revenue for CCC WA –
an increase of 2% in traffic as well
as a 2% pricing increase based on
increased tourism flow and growth
from Elizabeth Quay.
– Revenue for ex Transit Marine
business – an increase in revenue
of 3% to reflect small traffic growth
as well as a 2% pricing increase
based on increased tourism flow to
Stradbroke Island, CPI increases
built into fixed contracts and growth
in vessel charter rates.
– No change to the current level of
depreciation has been assumed
for all business units.
Management have assessed that
changes to the key assumptions in
the model, unless there was a large
unforeseeable event, would not result
in an impairment in goodwill for any
of the business units.
CUSTOMER CONTRACTS
Customer contracts of $8.4m are
associated with several government
contracts for ferry services in Southern
Moreton Bay, a ferry contract for sand
transport and contracts associated
with ferry transport in Gladstone
and Perth. Contracts are amortised
over their estimated life based on a
combination of the length of customer
contract and the likelihood of renewal.
The amortisation period ranges
between 5 and 7 years.
During the period, the Company
recorded an amortisation of $965,000
associated with customer contracts
with an associated reduction in the
Deferred Tax Liability of $289,500.
F TRADE AND OTHER PAYABLES
CURRENT (ALL UNSECURED)
Trade creditors (i)
Sundry payables and accruals
Total current trade and other payables
(i) Trade creditors are non-interest bearing and are normally settled on 14–60 day terms.
G PROVISIONS
CURRENT
Employee entitlements
NON-CURRENT
Employee entitlements
30
2016
$’000
4,940
4,819
9,759
2016
$’000
8,525
989
2015
$’000
3,231
2,007
5,238
2015
$’000
4,453
982
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
H UNEARNED REVENUE
CURRENT
Deferred income – Government grant
Prepaid travel (a)
Total unearned revenue
NON-CURRENT
Deferred income – Government grant
Total non-current payables
2016
$’000
172
4,828
5,000
1,149
1,149
2015
$’000
172
3,642
3,814
1,321
1,321
(a) As part of providing ferry services to passengers, vehicles and freight, and cruises, customers pay a portion or all of the
balance owing in advance of travel date. Under revenue recognition principles, the payment for travel is not recognised as
revenue until the travel paid for has departed. The balance above therefore relates to bookings with departure dates on or
after 1 July 2016 (2015: 1 July 2015).
Government Grants
There were no grants received during the year. All grants are released to income equally over the expected useful life of
the asset. Previous grants released to income totalled $171,639 (2015:$171,639).
NOTE
2016
$’000
I
INTEREST BEARING LOANS AND BORROWINGS
CURRENT
Secured:
Bank and other loans (i)
Lease liabilities (ii)
Total current interest bearing liabilities
NON-CURRENT
Secured:
Bank loans (i)
Lease liabilities (ii)
Total non-current interest bearing liabilities
(i) Security, terms and conditions – Loans and Overdraft
6A
6A
974
1,890
2,864
62,500
2,733
65,233
2015
$’000
–
3,293
3,293
5,000
2,027
7,027
First registered mortgage over property situated at Penneshaw, Kangaroo Island, Neutral Bay Marina and Russell Island.
First ranking registered company charge over all the assets and undertakings of all asset holding and trading subsidiaries.
Registered ship mortgages over all vessels in the fleet that are not leased, except for the CCC WA vessels. Various
guarantee facilities have been provided as surety on a range of lease contracts. Bank loans have been drawn down
under an interchangeable bill facility with a limit of $80.5m with ANZ which matures 6 November 2018. The current facility
limit will reduce by $5m by June 2017 and a further $5m by June 2018. This limit is reviewed annually. As part of the
interchangeable facility with ANZ, $7m has been allocated for hire purchase and lease facilities.
During the current year, there were no defaults or breaches.
(ii) Effectively secured over the assets leased. Leases are fixed rate with a lease term of between 48 and 60 months.
Committed financing facilities of $101,461,326 (2015: $26,537,873) were available to the consolidated entity at the end of
the financial year. As at that date, $83,131,409 (2015: $11,042,151) of these facilities were in use.
Interest bearing loans and borrowings have a fair value of $68,075,000 (2015: $10,283,000) and a carrying value of
$68,097,000 (2015:$10,320,000).
During the year, interest bearing borrowings of $12,809,000 were repaid from capital raised through cashflow from
operations. Drawdowns of $70,309,000 were made to fund the acquisition of the Transit Systems Marine and Captain
Cook Cruises WA businesses.
31
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
STATEMENT OF
FINANCIAL POSITION
2015
$’000
2016
$’000
STATEMENT OF
PROFIT AND LOSS
2015
$’000
2016
$’000
J DEFERRED INCOME TAX
Deferred income tax at 30 June relates to the following:
DEFERRED TAX ASSETS
Provision for doubtful debts
Government grants
Accruals
Capital expense timing differences
Revaluation of cash flow hedge
(interest rate swap)
Asset timing depreciation differences
Employee entitlements
Total deferred tax assets
DEFERRED TAX LIABILITIES
Accelerated depreciation for tax purposes
Receivables
Customer contracts
Consumables
Total deferred tax liabilities
Deferred Income tax expense
16
396
41
611
321
454
2,854
4,693
1,214
1,953
2,234
113
5,514
2
448
54
301
–
286
1,630
2,721
950
–
–
65
1,015
K OPERATING LEASE
The Group has entered an
arrangement in Gladstone where
certain vessels have been funded
by a third party. During the vessels
contractual period, certain principal
payments are made to reduce the
net exposure to an agreed residual,
which, at maturity, is offset against
utilisation fees. Utilisation fees are
brought to account progressively
over the term of the contract. There
are currently two vessels under this
arrangement. All contracts finalise
by June 2017.
14
(51)
(93)
(195)
–
168
547
(230)
6,000
290
(43)
6,407
2
448
(34)
(6)
–
(1)
(82)
183
–
–
(33)
80
L DEFERRED INCOME TAX
Derivative designated as hedging instrument
CURRENT
Interest rate swap
NON-CURRENT
Interest rate swap
NOTE
4B
4B
2016
$’000
2015
$’000
230
840
–
–
32
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
3 CAPITAL
A CAPITAL MANAGEMENT
The primary objective of the Group’s
capital management is to ensure
that it maintains healthy capital
ratios to support its business and
maximise shareholder value. The
Group manages its capital structure
and makes adjustments to it in light
of changes in economic conditions.
To maintain or adjust the capital
structure, the Group may adjust the
dividend payment to shareholders,
return capital to shareholders or
issue new shares. Apart from the
conversion of share options to
ordinary shares, no changes were
made in the objectives, policies or
processes for managing capital
during the year.
The Group monitors capital using
a gearing ratio, which is measured
as net interest bearing debt divided
by total tangible assets. This ratio
aligns with one of the key financier’s
covenants. The Group’s policy is
to maintain gearing ratio at less
than 60%. As at 30 June 2016, the
gearing ratio was 33% (2015: 13%).
B EQUITY
ISSUED AND FULLY PAID ORDINARY SHARES
(ALL ISSUED SHARES FULLY PAID)
Opening balance
Conversion of Options (refer Note 7D)
Issue of shares through a Share Placement
in September 2015
Issue of shares through a Share Purchase Plan
in October 2015
Issue of shares as purchase consideration
in November 2015 (refer Note 7A)
Deferred tax associated with share issue expenses
Total
CONTRIBUTED EQUITY
NO. OF SHARES ON ISSUE
2016
$’000
2015
$’000
2016
‘000
2015
‘000
33,904
1,084
38,380
10,835
10,848
506
95,557
30,164
3,740
–
–
–
–
76,815
781
16,004
4,354
3,200
–
73,815
3,000
–
–
–
–
33,904
101,154
76,815
During the year, 781,250 share options were converted to ordinary shares at an average price of $1.40 raising gross
proceeds of $1,090,625. To fund the Transit Systems Marine business, 20,357,930 ordinary shares were issued at a price
of $2.50 raising gross proceeds of $50,894,825. These shares were raised through a Share Placement and through a
Share Purchase Plan to existing shareholders. Additionally, the Company issued 3,200,000 shares at a fair value of $3.39
as part of the consideration for the Transit Systems Marine business. The Company expended a gross $1,686,100 less
$505,830 of associated deferred tax asset to raise these funds which was allocated to contributed equity.
C RESERVES
SHARE OPTION RESERVE
Opening Balance
Share option expense
Closing balance
2016
$’000
2015
$’000
487
32
519
464
23
487
The Share Option reserve is used to record the value of options and performance rights issued to directors and senior employees as part of their remuneration
(refer Note 7D).
CASH FLOW HEDGE RESERVE
Opening Balance
Revaluation of interest rate hedge (refer Note 4B)
Closing balance
Total reserves
–
(749)
(749)
(230)
–
–
–
487
33
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
D DIVIDENDS
Dividends on ordinary shares declared and paid during the period:
Interim dividend for 2016: 4.5 cents (2015: 3.8 cents)
Final dividend for 2015: 4.0 cents (2014: 3.7 cents)
2016
$’000
2015
$’000
4,551
3,073
2,919
2,842
Dividends on ordinary shares proposed for approval (not recognised as a liability as at 30 June):
Final dividend for 2016: 7.5 cents (2015: 4.0 cents)
7,587
3,073
FRANKING CREDIT BALANCE
The amount of franking credits available for the subsequent financial year are:
Franking account balance as at the end of the financial year
Franking credits that will arise from the payment of income tax as
at the end of the financial year.
10,745
14,264
25,009
2016
$’000
7,549
1,578
9,127
2015
$’000
E EARNINGS PER SHARE
Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders by the
weighted average number of ordinary shares outstanding during the year. Diluted earnings per share are calculated by
dividing net profit for the year attributable to ordinary equity holders by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of
all the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted share computations:
Net profit attributable to ordinary equity holders of the parent and for basic earnings
and adjusted for the effect of dilution
22,349
9,349
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution from share options and performance rights
Weighted average number of ordinary shares adjusted for dilution
’000
94,524
839
95,363
’000
76,169
1,558
77,727
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date
and date of these financial statements.
34
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
4 RISK
A FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
The Group’s principal financial
liabilities comprise of loans and
borrowings and trade and other
payables. The main purpose of
these financial liabilities is to finance
the Group’s operations and to
provide guarantees to support its
operations. The Group’s principal
financial assets include trade and
other receivables, cash and short-
term deposits that derive directly
from its operations. The Group also
enters into derivative transactions.
The Group is exposed to market
risk, credit risk and liquidity risk.
The Group’s senior management
oversees the management of
these risks andis supported by
Audit and Risk Committee that
oversees the appropriate financial
risk governance framework for
the Group. It is the Group’s policy
that no trading in derivatives for
speculative purposes may be
undertaken. The Board reviews
and agrees policies for managing
each of these risks, which are
summarised below.
MARKET RISK
Market risk is the risk that the fair
value of future cash flows of a
financial instrument will fluctuate
because of changes in market
prices. Market risk comprise
three types of risk: interest rate
risk, currency risk and other price
risk, such as equity price risk
and commodity risk. Financial
instruments affected by market
risk include loans and borrowings,
deposits and derivative financial
instruments. The Group is not
exposed directly to any material
foreign currency risk.
INTEREST RATE RISK
Interest rate risk is the risk that the
fair value or future cash flows of a
financial instrument will fluctuate
because of changes in market
interest rates. The Group’s exposure
to the risk of changes in market
interest rates relates primarily to the
Group’s long-term debt obligations
with floating rates.
The Group manages its interest rate
risk by having a balanced portfolio
of fixed and variable rate loans and
borrowings. The Group’s policy is to
keep between 40% and 60% of its
borrowings at fixed rates of interest.
To manage this, the Group enters
into either fixed rate leases for larger
assets, use cash advance facilities
which are variable interest rate
based, uses interest rate hedges
or enters into longer term fixed rate
loans. At 30 June 2016, 52% of the
Group’s interest bearing borrowings
are effectively at a fixed rate of
interest (2015: 51%).
The sensitivity analyses in the
following sections relate to the
position as at 30 June 2016 and 30
June 2015. It has been prepared
on the basis that the amount of net
debt, the ratio of fixed to floating
interest rates of the debt and
derivatives are all constant and on
the basis of the hedge designations
in place at 30 June 2016. The
table below sets out the carrying
amount, by maturity, of the financial
instruments exposed to interest
rate risk:
WEIGHTED AVE. EFFECTIVE
INTEREST RATE
WITHIN 1 YEAR
1 TO 5 YEARS
2016
%
2015
%
2016
$’000
2015
$’000
2016
$’000
2015
$’000
2016
$’000
TOTAL
2015
$’000
1.0
0.6
5,208
2,261
5,208
2,261
FINANCIAL ASSETS
Floating Rate
Cash Assets
FINANCIAL LIABILITIES
Floating Rate
Overdraft
3.50
5.20
Bills of exchange
3.54
3.54
Fixed Rate
Cash advance
Leases
Net Exposure
3.93
n/a
4.60
5.99
–
–
–
–
–
–
–
–
–
–
1,890
3,318
3,293
(1,032)
–
32,500
5,000
32,500
30,000
2,733
(65,233)
–
2,027
(7,027)
30,000
4,623
(61,915)
–
5,000
–
5,320
(8,059)
35
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
INTEREST RATE SENSITIVITY
At 30 June, if interest rates had moved as illustrated in the table below, with all other variables held constant, post tax
profit and equity would have been affected as follows:
JUDGEMENT OF REASONABLY
POSSIBLE MOVEMENTS
Movement of 0.5% increase in rates
Movement of a 1% decrease in rates
PROFIT AFFECT
EQUITY AFFECT
CONSOLIDATED
30 JUNE 2016
$’000
CONSOLIDATED
30 JUNE 2015
$’000
CONSOLIDATED
30 JUNE 2016
$’000
CONSOLIDATED
30 JUNE 2015
$’000
(114)
228
(8)
16
609
(1,239)
–
–
The movements in post tax profit are due to higher/lower interest income from variable rate cash balances and cash advances.
COMMODITY RISK – FUEL PRICE
The Group did not have any fuel
forward derivatives to hedge
changes in the underlying prices
of fuel at 30 June 2016.
CREDIT RISK
Credit risk is the risk that a
counterparty will not meet its
obligations under a financial instrument
or customer contract, leading to a
financial loss. The Group is exposed
to credit risk from its operating
activities (primarily trade receivables)
and from its financing activities,
including deposits with banks,
foreign exchange transactions and
other financial instruments. There
are no major concentrations of credit
risk. There were no expsoures that
comprised more than 12% of trade
receivables. Collection of this debt is
not considered doubtful.
TRADE RECEIVABLES
Customer credit risk is managed by
each business unit subject to the
Group’s established policy, procedures
and control relating to customer credit
risk management. Credit quality of
a customer is assessed based on
references, industry knowledge,
ability to pay and individual credit
limits are defined in accordance
with this assessment. Outstanding
customer receivables are regularly
monitored with an analysis reported
to the Board monthly.
An impairment analysis is performed
at each reporting date on an individual
basis for major clients. The maximum
exposure to credit risk at the reporting
date is the carrying value of each class
of financial assets disclosed in Note 2B.
The Group does not hold collateral
as security.
FINANCIAL INSTRUMENTS
AND CASH DEPOSITS
Credit risk from balances with banks
and financial institutions is managed
by the Audit and Risk Committee in
accordance with the Group’s policy.
Investments of surplus funds are only
placed with the Group’s major bank.
LIQUIDITY RISK
The Group monitors its risk to a
shortage of funds using a liquidity
planning tool. The Group’s objective
is to maintain a balance between
continuity of funding and flexibility
through the use of bank overdrafts,
bank loans, interchangeable limits,
finance leases and hire purchase
contracts.
The Group’s policy is to ensure that
the core funding limits have no less
than a 12 month maturity date.
The Group assessed the concentration
of risk with respect to refinancing
its debt and concluded it to be low.
Access to sources of funding is
sufficiently available and debt maturing
within 12 months can be rolled over
with existing or alternative lenders.
36
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
The table below sets out the maturity profile of the Group’s financial liabilities based on contracted undiscounted payments
including interest.
Estimated variable interest expense is based upon the rate applying as at 30 June 2016.
YEAR ENDED 30 JUNE 2016
Interest-bearing loans and borrowings
Trade and other payables
Other financial liabilities
Financial guarantee contracts
Leases/hire purchase
Total
YEAR ENDED 30 JUNE 2015
Interest-bearing loans and borrowings
Trade and other payables
Financial guarantee contracts
Leases/hire purchase
Total
B HEDGING
ON DEMAND
$’000
0–3 MONTHS
$’000
3–12 MONTHS
$’000
–
–
–
15,978
–
–
9,757
59
–
544
15,978
10,360
–
–
692
–
692
–
5,238
–
473
5,711
–
–
176
–
1,376
1,552
–
–
–
2,961
2,961
1–5 YEARS
$’000
74,244
–
780
–
2,954
77,978
5,251
–
–
2,293
7,544
TOTAL
$’000
74,244
9,757
1,014
15,978
4,874
105,867
5,251
5,238
692
5,727
16,908
During the period, the Group entered
into a 5 year fixed term interest rate
swap effective from 1 December
2015 at a rate of 2.53% before
interest margin and line fees. The
terms of the interest rate swap have
a close match to the variable interest
rate liability arising from bill facilities.
Consequently, the hedges were
assessed to be highly effective.
The fair value adjustment required
was assessed as material and
as such, the gross difference of
$1,070,006 was recorded as a
financial liability with the associated
tax effect forming part of Deferred
Tax Asset. The net difference
of $749,004 is shown through
the statement of other
comprehensive income.
The interest rate swap is
categorsied as a Level 2 within
the fair value hierarchy with the
carrying value based on market
interest rates which are actively
traded and quoted through the
Australian banking system.
5 ACCOUNTING POLICIES
A BASIS OF PREPARATION
The consolidated financial
statements for the year ended
30 June 2016 have been
prepared in accordance with the
requirements of the Corporations
Act 2001, Australian Accounting
Standards and other authoritative
pronouncements of the Australian
Accounting Standards Board. The
financial report is a general purpose
financial report, has also been
prepared on a historical cost basis
except for derivatives which use fair
value, and presented in Australian
dollars.The Group is a for-profit
entity for the purposes of preparing
the financial report.
The consolidated financial
statements also comply with
International Financial reporting
Standards (IFRS) as issued by
the International Accounting
Standards Board.
B
SIGNIFICANT ACCOUNTING
POLICIES IN THE PREPARATION
AND PRESENTATION OF ACCOUNTS
(a) PRINCIPLES OF CONSOLIDATION
The consolidated financial
statements comprise the financial
statements of the Group and its
subsidiaries as at 30 June. Control
is achieved when the Group is
exposed, or has rights, to variable
returns from its involvement with the
investee and has the ability to affect
those returns through its power over
the investee. Specifically, the Group
controls an investee if and only if the
Group has:
• Power over the investee (i.e.
existing rights that give it the
current ability to direct the
relevant activities of the investee
• Exposure, or rights, to variable
returns from its involvement with
the investee, and
• The ability to use its power over the
investee to affect its returns.
The financial statements of the
subsidiaries are prepared for the same
reporting period as the Parent, using
consistent accounting policies. In
preparing the consolidated financial
statements, all intercompany balances,
transactions, unrealised gains and
losses resulting from intra-group
transactions and dividends have
been eliminated in full.
Subsidiaries are fully consolidated from
the date on which control is obtained
by the Group and cease to be
consolidated from the date on which
control is transferred out of the Group.
(b) FINANCIAL LIABILITIES
Interest rate derivatives are
measured at fair value with changes
in fair value recognised in other
comprehensive income.
37
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
(c) INVENTORIES
Inventories, which includes spare
parts, are valued at the lower of cost
and net realisable value. Spare parts
are expensed as consumed or when
they become obsolete as a result of a
change to vessel strategy.
Costs are assigned to inventory on
hand by the method most appropriate
to each particular class of inventory,
with the majority being valued on either
a first in first out or average cost basis.
(d) TAXES
Income taxes
Current tax assets and liabilities for
the current and prior periods are
measured at the amount expected
to be recovered or paid to the
taxation authorities. The tax rates
and tax laws used to compute the
amount are those that are enacted or
substantively enacted by the balance
date. Deferred income tax is provided
on all temporary differences at the
balance date between the tax bases
of the assets and liabilities and their
carrying amounts for financial
reporting purposes.
Deferred income tax liabilities are
recognised for all taxable temporary
differences except:
• when the deferred income tax
liability arises from the initial
recognition of goodwill or of an
asset or liability in a transaction that
is not a business combination and
that, at the time of the transaction,
affects neither the accounting profit
nor the taxable profit or loss; or
• when the taxable temporary
difference is associated with
investments in subsidiaries,
associates or interests in joint
arrangements, the timing of the
reversal of the temporary differences
can be controlled and it is probable
that temporary difference will not
reverse in the foreseeable future.
Deferred income tax assets are
recognised for all deductible temporary
differences, carry-forward of unused
tax credits and unused tax losses,
to the extent that it is probable that
taxable profit will be available against
which the deductible temporary
differences and the carry-forward of
unused tax credits and unused tax
losses can be utilised, except:
• when the deferred income tax asset
relating to the deductible temporary
difference arises from the initial
recognition of an asset or liability in
a transaction that is not a business
combination and, at the time of
the transaction, affects neither the
accounting profit nor taxable profit
or loss; or
• when the deductible temporary
difference is associated with
investments in subsidiaries,
associates or interests in joint
arrangements, in which case
a deferred tax asset is only
recognised to the extent that it
is probable that the temporary
difference will reverse in the
foreseeable future and the taxable
profit will be available against
which the temporary difference
can be utilised.
The carrying amount of deferred tax
assets is reviewed at each balance
date and reduced to the extent that
it is no longer probable that sufficient
taxable profit will be available to allow
all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred income tax
assets are reassessed at each balance
date and recognised to the extent that
it has become probable that future
taxable profit will allow the deferred tax
asset to be recovered.
Deferred income tax assets and
liabilities are measured at the tax
rates that are expected to apply to
the year when the asset is realised or
the liability settled, based on the tax
rates (and tax laws) that have been
enacted or substantially enacted at
balance date.
Deferred tax asset and deferred tax
liabilities are offset only if a legally
enforceable right exists to set off
current tax assets against current tax
liabilities and the deferred tax assets
and liabilities relate to the same taxable
entity and the same taxation authority.
Goods and Services Tax (GST)
Revenues, expenses and assets
are recognised net of the amount
of GST except:
• where the GST incurred on a
purchase of goods and services is
not recoverable from the taxation
authority, in which case the GST is
recognised as part of the cost of
acquisition of the asset or as part of
the expense item as applicable; and
• receivables and payables are stated
with the amount of GST included.
The net amount of GST recoverable
from, or payable to, the taxation
authority is included as part of
receivables or payables in the
Statement of Financial Position.
Cash flows are included in the
Statement of Cash Flows on a gross
basis and the GST component of
cash flows arising from investing
and financing activities, which is
recoverable from, or payable to, the
taxation authority are classified as
operating cash flows.
Commitments and contingencies are
disclosed net of the amount of GST
recoverable from, or payable to, the
taxation authority.
(e) LEASES
Finance leases, which transfer
substantially all the risks and benefits
incidental to ownership of the leased
item, are capitalised at the inception
of the lease at the fair value of the
leased property or, if lower, at the
present value of the minimum lease
payments. Lease payments are
apportioned between the finance
charges and reduction of the leased
liability so as to achieve a constant rate
of interest on the remaining balance
of the liability. Finance charges are
recognised as an expense in the
Statement of Comprehensive Income.
Capitalised leased assets are
depreciated over the shorter of the
estimated useful life of the asset
and the lease term if there is no
reasonable certainty that the company
will obtain ownership by the end of
the lease term.
Operating leases are not capitalised
and payments are charged as
an expense in the Statement of
Comprehensive Income on a straight
line basis over the lease term.
38
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
(f) BUSINESS COMBINATIONS
AND GOODWILL
Business combinations are accounted
for using the acquisition method. The
cost of an acquisition is measured as
the aggregate of the consideration
transferred, measured at acquisition
date fair value and the amount of any
non-controlling interest in the acquiree.
For each business combination, the
Group elects whether to measure the
non-controlling interest in the acquiree
at fair value or at the proportionate
share of the acquiree’s identifiable net
assets. Acquisition related costs are
expensed as incurred and included in
administrative expenses.
When the Group acquires a business,
it assesses the financial assets and
liabilities assumed for appropriate
classification and designation in
accordance with the contractual
terms, economic circumstances
and pertinent conditions as at the
acquisition date. This includes the
separation of embedded derivatives in
host contracts by the acquiree.
If the business combination is achieved
in stages, the previously held equity
interest is remeasured at its acquisition
date fair value and any resulting gain or
loss is recognised in profit or loss.
Any contingent consideration to
be transferred by the acquirer
will be recognised at fair value at
the acquisition date. Contingent
consideration classified as an asset
or liability that is a financial instrument
and within the scope of AASB 139
Financial Instruments: Recognition and
Measurement, is measured at fair value
with changes in fair value recognised
either in either profit or loss or as
a change to other comprehensive
income. If the contingent consideration
is not within the scope of AASB 139,
it is measured in accordance with
the appropriate AASB. Contingent
consideration that is classified
as equity is not remeasured and
subsequent settlement is accounted
for within equity.
Goodwill is initially measured at cost,
being the excess of the aggregate of
the consideration transferred and the
amount recognised for non-controlling
interest over the net identifiable assets
acquired and liabilities assumed. If the
fair value of the net assets
acquired is in excess of the aggregate
consideration transferred, the gain is
recognised in profit or loss.
After initial recognition, goodwill
is measured at cost less any
accumulated impairment losses.
For the purpose of impairment
testing, goodwill acquired in a
business combination is, from the
acquisition date, allocated to each
of the Group’s cash-generating units
that are expected to benefit from the
combination, irrespective of whether
other assets or liabilities of the
acquiree are assigned to those units.
Where goodwill has been allocated to
a cash-generating unit and part of the
operation within that unit is disposed
of, the goodwill associated with the
disposed operation is included in
the carrying amount of the operation
when determining the gain or loss on
disposal. Goodwill disposed in these
circumstance is measured based on
the relative values of the disposed
operation and the portion of the cash-
generating unit retained.
(g) EMPLOYEE BENEFITS
Provision is made for employee
benefits accumulated as a result
of employees rendering services
up to the reporting date. These
benefits include wages and salaries,
annual leave and long service leave.
Liabilities arising in respect of wages
and salaries, annual leave and any
other employee benefits expected
to be settled within twelve months
of the reporting date are measured
at their nominal amounts based on
remuneration rates which are expected
to be paid when the liability is settled.
All other employee benefit liabilities are
measured at the present value of the
estimated future cash outflow to be
made in respect of services provided
by employees up to the reporting date.
In determining the present value of
future cash outflows, the market yield
as at the reporting date on high quality
corporate bonds, which have terms
to maturity approximating the terms
of the related liability, are used.
(h) IMPAIRMENT OF ASSETS
At each reporting date, the
consolidated entity reviews the
carrying value of its tangible and
intangible assets and cash generating
units to determine whether there is
any indication that those assets have
been impaired. If such an indication
exists, the recoverable amount of the
asset, being the higher of the asset’s
fair value less costs of disposal and
value in use, is compared to the
assets carrying value. Any excess
of the assets carrying value over its
recoverable amount is expensed to the
Statement of Comprehensive Income.
In assessing value in use, the
estimated future cash flows are
discounted to their present value using
a pre-tax discount rate that reflects
current market assessments of the
time value of money and the risks
specific to the asset.
For an asset that does not generate
largely independent cash inflows,
recoverable amount is determined for
the cash generating unit to which the
asset belongs, unless the asset’s value
in use can be estimated to be close to
its fair value.
Goodwill is tested for impairment
annually (as at June 30) and when
circumstances indicate the carrying
value may be impaired. The Group’s
impairment test for goodwill and
intangible assets with indefinite lives is
based on value-in-use calculations that
use a discounted cash flow model.
Apart from goodwil associated with
the acquisition of the Transit Systems
Marine business and Captain Cook
Cruises WA, there were no changes in
the carrying value of goodwill allocated
to the cash generating units nor any
impairment of goodwill during the year.
(i) PROPERTY, PLANT AND
EQUIPMENT
Plant and equipment is stated at
historical cost less accumulated
depreciation and any accumulated
impairment losses. Such cost includes
the cost of replacing parts that are
eligible for capitalisation when the
cost of replacing the parts is incurred.
Similarly, when each major inspection
is performed, its cost is recognised
in the carrying amount of the plant
and equipment as a replacement
only if it is eligible for capitalisation.
All other repairs and maintenance
are recognised in the Statement of
Comprehensive Income as incurred.
39
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
Depreciation is calculated on a
straight-line basis over the estimated
useful life of the specific assets until
an asset’s residual is reached. Vessel
depreciation is reviewed annually to
take into account further capitalisation
of costs, vessel usage or changed
market conditions. Estimated useful
life is as follows:
(j) REVENUE
Revenue is recognised to the extent
that it is probable that the economic
benefits will flow to the economic
entity and the revenue can be reliably
measured. The following specific
recognition criteria must also be met
before revenue is recognised:
Sale of Goods
Revenue is recognised when the
significant risks and rewards of
ownership of the goods have been
passed to the buyer and the costs
incurred or to be incurred in respect
of the transaction can be measured
reliably. Risks and rewards of
ownership are considered passed
to the buyer at the time of delivery
of the goods to the customer.
Rendering of Services
For ferry services, revenue is
recognised on a departure date basis
whereby customers or groups who
have paid for travel related services
have actually departed on those travel
services. The revenue is recognised in
the month of the said departure date.
Revenue in relation to retailing of travel
services is recognised on a gross basis
when customers have paid for their
travel services.
Interest
Revenue is recognised as
interest accrues using the effective
interest method.
Operating leases
Rental income arising from operating
leases on occupied properties is
accounted for on a straight-line basis
over the lease terms and is included
in revenue in the statement of profit
or loss due to its operating nature.
Income arising from operating leases
of vessels is accounted for on a
straight-line basis over the lease terms
and is included in revenue in the
statement of profit or loss due to its
operating nature.
Buildings
Plant and equipment
Plant and equipment under lease
Ferry – at cost
LIFE
14 – 40 years
3 – 20 years
Term of the lease
5 – 25 years
shares or optionsare shown in
equity as a deduction, net of tax,
from the proceeds.
(n) TRADE AND OTHER PAYABLES
Trade payables and other payables
are carried at amortised costs and
represent liabilities for goods and
services provided to the consolidated
entity prior to the end of the financial
year that are unpaid and arise when
the consolidated entity becomes
obliged to make future payments
in respect of the purchase of these
goods and services.
(o) FOREIGN CURRENCY
TRANSACTIONS AND BALANCES
Functional and presentation currency
The functional currency of each of
the group’s entities is measured using
the currency of the primary economic
environment in which that entity
operates. The consolidated financial
statements are presented in Australian
dollars which is the parent entity’s
functional and presentation currency.
Transaction and balances
Transactions in foreign currencies
are initially recorded in the functional
currency by applying the exchange rates
ruling at the date of the transaction.
Non-monetary items that are
measured in terms of historical cost in
a foreign currency are translated using
the exchange rate as at the date of the
initial transaction. Non-monetary items
measured at fair value in a foreign
currency are translated using the
exchange rates at the date when the
fair value was determined.
(k) CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the
statement of financial position
comprise cash at bank, on hand
and short term deposits with an
original maturity of three months or
less that are readily convertible to
known amounts of cash and which
are subject to an insignificant risk of
changes in value.
For the purpose of the statement of
cash flows, cash and cash equivalents
consist of cash and cash equivalents
as defined above, net of outstanding
bank overdrafts. Bank overdrafts are
included within interest-bearing loans
and borrowing in current liabilities on
the statement of financial position.
(l) TRADE AND OTHER RECEIVABLES
Trade receivables, which generally
have 14 - 60 day terms, are
recognised initially at fair value and
subsequently measured at amortised
cost using the effective interest
method, less an allowance for
impairment.
Collectability of trade receivable is
reviewed on an ongoing basis at an
operating unit level. Individual debts
that are known to be uncollectible
are written off when identified. An
impairment provision is recognised
when there is objective evidence that
the Group will not be able to collect
the receivable. Financial difficulties
of the debtor, default payments or
debts more than 60 days overdue
are considered objective evidence
of impairment. The amount of the
impairment loss is the receivable
carrying amount compared to the
present value of estimated future
cash flows, discounted at the original
effective interest rate.
(m) CONTRIBUTED EQUITY
Ordinary shares are classified as
equity. Incremental costs directly
attributable to the issue of new
40
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
(p) GOVERNMENT GRANTS
Government grants are recognised
when there is reasonable assurance
that the grant will be received and all
attaching conditions will be complied
with. When the grant relates to an
asset, the fair value is credited to
a deferred income account and
is released to the Statement of
Comprehensive Income over the
expected useful life of the relevant
asset by equal annual instalments.
When the grant relates to an expense
item, it is recognised as income over
the periods necessary to match
the grant on a systematic basis
to the costs that it is intended to
compensate.
(q) TAX CONSOLIDATION
AND TAX SHARING
SeaLink Travel Group’s wholly owned
Australian subsidiaries have formed
an income tax consolidated group
under the tax consolidation regime
effective 1/1/05. SeaLink Travel
Group Ltd is the head entity of the tax
consolidated group.
Each of the controlled entities in the
tax consolidated group continue to
account for their own current and
deferred tax amounts. The Group has
applied the Group allocation approach
in determining the appropriate amount
of current taxes and deferred taxes
to allocate to members of the tax
consolidated group.
Allocations under the tax funding
agreement are made at the end of
each reporting period. The allocation
of taxes under the tax funding
arrangement is recognised as an
increase/decrease in the subsidiaries’
intercompany accounts with the tax
consolidated group head company.
(r) BORROWING COSTS
Borrowing costs directly attributable
to the acquisition, construction or
production of an asset that necessarily
takes a substantial period of time to
get ready for its intended use or sale
are capitalised as part of the cost of
the asset. All other borrowing costs
are expensed in the period in which
they occur. Borrowing costs consist
of interest and other costs that an
entity incurs in connection with the
borrowing of funds.
(s) INTEREST BEARING LOANS
AND BORROWINGS
All loans and borrowings are initially
recognised at the fair value of the
consideration received less directly
attributable transaction costs. After
initial recognition, interest bearing loans
and borrowings are subsequently
measured at amortised cost using the
effective interest method.
Gains and losses are recognised in the
Statement of Comprehensive Income
when the liabilities are derecognised.
(t) INTANGIBLE ASSETS
Intangible assets acquired seperately
are measured on initial recognition at
cost. The cost of intangible assets
acquired in a business combination
is their fair value at the date of
acquisition. Following initial recognition,
intangible assets are carried at cost
less any accumulated amortisation
and accumulated impairment losses.
The useful lifes on intangible assets are
assessed as either finite or indefinite.
Intangible assets with finite lives are
amortised over the useful life and
assessed for impairment whenever
there is an indication that the
intangible asset maybe impaired.
The amortisation period and the
amortisation method for an intangible
asset with a finite life are reviewed
at least at the end of each reporting
period. The amortisation expense on
intangible assets with finite lives is
recognised in the statement of profit
and loss as the expense category that
is consistent with the function of the
intangible assets.
Intangible assets with indefinite
lives are are not amortised, but are
tested for impairment annually, either
individually or at the cash generating
level. The assessment of indefinite
life is reviewed annually to determine
whether the indefinite life continues to
be supportable.
(u) CRITICAL ACCOUNTING
ESTIMATES AND JUDGEMENTS
The Directors evaluate estimates and
judgements incorporated into the
financial report based on historical
knowledge and best available current
information. Estimates assume a
reasonable expectation of future
events and are based on current
trends and economic data, obtained
both externally and within the
consolidated entity.
Key Estimates – Impairment
The consolidated entity assesses
impairment at each reporting date
by evaluating conditions specific
to the consolidated entity that may
lead to impairment of assets. Where
an impairment trigger exists, the
recoverable amount of the asset is
determined. Value-in-use calculations
performed in assessing recoverable
amounts incorporate a number of key
estimates, such as passenger numbers,
growth rates and terminal value.
Key Estimates – Doubtful debts provision
The consolidated entity assesses
the level of doubtful debts at each
reporting date by evaluating past
performance of bad debts, the level
of receivables that are overdue and
specific collection responses. These
assessments incorporate a number
of key estimates around credit
assessment and security position.
(v) FAIR VALUES
The Group measures the interest rate
swap derivative at fair value at each
balance sheet date.
Fair value is the price that would
be received to sell an asset or
paid to transfer a liability in an
orderly transaction between market
participants at the measurement
date. The fair value measurement is
based on the presumption that the
transaction to sell the asset or transfer
the liability takes place either:
• In the principal market for the asset
or liability, or
• In the absence of a principal
market, in the most advantageous
market for the asset or liability
The fair value of an asset or a liability is
measured using the assumptions that
market participants would use when
pricing the asset or liability, assuming
that market participants act in their
economic best interest.
A fair value measurement of a non-
financial asset takes into account a
market participant’s ability to generate
economic benefits by using the asset
in its highest and best use or by selling
it to another market participant that
would use the asset in its highest and
best use.
The Group uses valuation techniques
that are appropriate in the
circumstances and for which sufficient
data are available to measure fair
41
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
value, maximising the use of relevant
observable inputs and minimising the
use of unobservable inputs.
• Level 1 – Quoted (unadjusted)
market prices in active markets for
identical assets or liabilities
All assets and liabilities for which fair
value is measured or disclosed in the
financial statements are categorised
within the fair value hierarchy,
described as follows, based on the
lowest level input that is significant to
the fair value measurement as a whole:
• Level 2 – Valuation techniques
for which the lowest level input
that is significant to the fair value
measurement is directly or indirectly
observable
• Level 3 – Valuation techniques
for which the lowest level input
that is significant to the fair value
measurement is unobservable
For assets and liabilities that are
recognised in the financial statements
on a recurring basis, the Group
determines whether transfers
have occurred between Levels
in the hierarchy by re-assessing
categorisation (based on the lowest
level input that is significant to the fair
value measurement as a whole) at the
end of each reporting period.
C CHANGES IN ACCOUNTING
POLICIES AND DISCLOSURES
D ACCOUNTING STANDARDS ISSUED
BUT NOT YET EFFECTIVE
The accounting policies adopted in
the preparation of the consolidated
financial statements are consistent
with those followed in the
preparation of the Group’s annual
financial statements for the year
ended 30 June 2015. There were
no new standards or interpretations
adoptedion as of 1 July 2015.
The Group has not early adopted
any other standard, interpretation or
amendment that has been issued
but is not yet effective.
Accounting standards and
interpretations issued but not yet
effective Australian Accounting
Standards and Interpretations
that have recently been issued or
amended but are not yet effective
and have not been adopted by
the Group for the annual reporting
period ending 30 June 2016, are
outlined in the table as follows:
Although a detailed assessment
of AASB 15 and AASB 16 has
yet to be undertaken, none of the
amendments are expected to have
a material impact on the Group.
The Company is currently evaluating
the impact of these new standards.
APPLICATION
DATE OF
STANDARD
APPLICATION
DATE FOR
GROUP
1 January 2018
1 July 2018
1 January 2018
1 July 2018
REFERENCE
TITLE
SUMMARY
AASB 15
Revenue from
contracts
AASB 9
Financial
Instruments
The core principle of AASB 15 is that an entity
recognises revenue to depict the 1 January 2018 1
July 2018 contracts 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 and services. An entity
recognises revenue in accordance with that principle
by applying various steps set out in AASB 15.
AASB 9 includes a logical model for classification and
measurement, a single forward looking “expected
loss” impairment model and a substantially-reformed
approach to hedge accounting.
The new standard requires entities to account for
expected credit losses from when the financial
instruments are first recognised and to recognise full
lifetime losses on a more timely basis.
AASB 9 includes requirements for a simplified
approach for classification and measurement of
financial assets compared with the requirements
of AASB 139. The changes will not have a material
impact on the Group.
42
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
REFERENCE
TITLE
SUMMARY
AASB 2015-2
Financial
statements
The Standard makes amendments to AASB
101 Presentation of Financial Statements. The
amendments are designed to further encourage
companies to apply professional judgement in
determining what information to disclose in
financial statements.
The changes will not have a material impact on
the Group.
APPLICATION
DATE OF
STANDARD
APPLICATION
DATE FOR
GROUP
1 January 2016
1 July 2016
AASB 16
Leases
The key features of AASB 16 are as follows:
1 January 2019
1 July 2019
Lessee accounting
• Lessees are required to recognise assets and
liabilities for all leases with a term of more than 12
months, unless the underlying asset is of low value.
• A lessee measures right-of-use assets similarly
to other non-financial assets and lease liabilities
similarly to other financial liabilities.
• Assets and liabilities arising from a lease are
initially measured on a present value basis.
The measurement includes non-cancellable
lease payments (including inflation-linked
payments), and also includes payments to be
made in optional periods if the lessee is reasonably
certain to exercise an option to extend the lease,
or not to exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements
for lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor
accounting requirements in AASB 117. Accordingly,
a lessor continues to classify its leases as operating
leases or finance leases, and to account for those
two types of leases differently.
• AASB 16 also requires enhanced disclosures to
be provided by lessors that will improve information
disclosed about a lessor’s risk exposure, particularly
to residual value risk.
E FAIR VALUE MEASUREMENT
Set out below is a comparison by category of carrying amounts and fair values of the Group’s financial assets and
financial liabilities at balance date:
ECONOMIC ENTITY
FINANCIAL ASSETS
Cash
Trade and other receivables
FINANCIAL LIABILITIES
Bill facilities
Other loans
Interest rate swap
Lease and hire purchase
Trade and sundry creditors
2016
CARRYING AMOUNT
$’000
2016
NET FAIR VALUE
$‘000
2015
CARRYING AMOUNT
$’000
2015
NET FAIR VALUE
$’000
5,208
14,951
62,500
974
1,070
4,623
9,759
5,208
14,951
62,500
974
1,070
4,601
9,759
2,261
3,227
2,261
3,227
5,000
5,000
–
–
5,320
5,238
–
–
5,283
5,238
43
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
The fair value of the financial assets and liabilities is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date.
Management assessed that cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other
current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
Although bill facilities held have a maturity longer than 12 months, from a re-pricing perspective, all facilities re-price within
12 months. Fair values of the Group’s bill facilities and lease and hire purchase liabilities is estimated by discounting future
cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. These have been
determined under a Level 2 fair value hierarchy.
6 UNRECOGNISED ITEMS
A COMMITMENTS
(a) CAPITAL COMMITMENTS
Vessels and buses
(b) COMMITMENTS UNDER NON-CANCELLABLE OPERATING LEASES
Not later than one year
Later than one year but not later than five years
Later than five years
(c) FINANCE LEASE COMMITMENTS:
Not later than one year
Later than one year but not later than five years
Minimum lease payments
Future finance charges
Net finance lease liability
Included in Interest Bearing Loans and borrowings (Note 2I) as:
Current liability
Non-current liability
30 JUNE 2016
$’000
30 JUNE 2015
$’000
1,146
2,644
6,266
3,901
12,811
1,890
2,984
4,874
(251)
4,623
1,890
2,733
4,623
90
2,096
5,134
2,081
9,311
3,434
2,293
5,727
(407)
5,320
3,293
2,027
5,320
(d) OPERATING LEASE COMMITMENTS — SEALINK AS LESSOR
The Group has entered into a property sub-lease for a portion of its tenancy at the Townsville terminal. The sub-lease was
for a term of 2 years and contains a clause to enable upward revision of the rental charge on an annual basis based on
CPI movement.
Future minimum rentals receivable under non-cancellable operating leases as at 30 June are as follows:
Within one year
After one year but not more than five years
87
152
239
21
–
21
B CONTINGENCIES
There were no contingencies of material note as at 30 June 2016 (2015: Nil).
C EVENTS REPORTED AFTER BALANCE DATE
A fully franked dividend of $7,586,558 representing 7.5 cents per share based on the current number of ordinary shares
was declared by the Directors on 10 August 2016 to be paid 14 October 2016. Apart from this matter, no events have
occurred subsequent to year end which would, in the absence of disclosure, cause the financial report to be misleading.
44
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
7 OTHER
A BUSINESS COMBINATIONS
Acquisition of Transit Systems Marine
On 6th November, 2015, the Group acquired 100% of the Queensland based marine business formerly owned by Transit
Systems. The acquisition involved the purchase of shares in various entities as well as the acquisition of properties on
Russell Island in Moreton Bay, Queensland. Transit System Marine business (“TSM”) consists of the following:
• Ferry operations in Gladstone to service the Curtis Island gas plants,
• Ferry services to North Stradbroke Island
• Ferry and barge operations for the Bay Islands in Southern Moreton Bay;
• Moggill cable ferry across the Brisbane River; and
• Barge service for a sand contract from North Stradbroke Island.
The acquisition has expanded SeaLink’s geographic base as well as creating opportunities for expansion. It has been
accounted for using the acquisition method. The consolidated financial statements include the results of TSM for the
period from 7th November 2015 until 30th June, 2016.
The fair values of the identifiable assets and liabilities of TSM as at the date of acquisition were:
FAIR VALUE RECOGNISED
ON ACQUISITION
$’000
ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Property, plant and equipment
Customer contracts (Refer Note 2E)
Deferred tax asset
LIABILITIES
Trade and other payables
Unearned revenue
Interest bearing loans and borrowings
Operating lease liability
Current tax liabilities
Provisions
Deferred tax liabilities
Total identifiable assets at fair value
Goodwill arising on acquisition
Purchase Consideration transferred
This consisted of -
Shares issued at fair consideration
Net Cash paid after vendor refund
Total purchase consideration
200
9,801
1,439
21
95,569
7,619
657
115,306
3,651
1,102
4,906
3,870
4,619
1,928
10,221
30,297
85,009
30,081
115,090
10,848
104,242
115,090
45
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
There was no contingent consideration.
The fair value of vessels included in Property, Plant and Equipment is $85.4m. These are based on external valuations and
internal assessment. The Deferred Tax Liability mainly comprises the tax effect on contracted utilisation fees in relation to a
Gladstone contract.
Goodwill
The majority of goodwill relates to the North Stradbroke Island ferry service, none of which is expected to be deductible for
income tax purposes.
From the date of acquisition, Transit Systems Marine has contributed $58.4m to revenue and $19.5m to the earnings before
tax from continuing operations. If the combination had taken place at the start of the financial year, revenue from continuing
operations for the Group would have been $93.0m and profit before tax from continuing operations for the Group would
have been $30.2m. The profit before tax achieved in the first 4 months of the financial year has been extracted from the
vendor’s accounting systems using unaudited accounts and using the vendor’s accounting policies as it is impractical to
revise accounts on a consistent policy basis.
ADDITIONAL CASH FLOWS ON ACQUISITION:
Transaction costs of the acquisition (included in cash flows from Operations)
Transaction costs associated with issuance of shares
Total additional cash flows on acquisition
$’000
(976)
(1,679)
(2,655)
The Group issued 3,200,000 ordinary shares as consideration for the 100% interest in the Transit Systems Marine Group.
The fair value of the shares is calculated with reference to the quoted price of the shares of the Company at the acquisition
which was $3.39 each. The fair value of the consideration was $10,848,000.
Transaction costs of $976,000 have been expensed and are disclosed as a separate line item in the profit and loss.
The attirbutable costs of the issue of shares of $1,679,000 less an associated tax beneifit of $503,820 have been
charged directly as a reduction to issued capital.
Acquisition of Captain Cook Cruises WA
On 29th April 2016, the Group acquired 100% of the Captain Cook Cruises WA business formerly privately owned.
The acquisition involved the purchase of shares in two entities and was funded from existing debt facilities.
The business (“CCC WA”) consists of the following:
• Tourism cruises on the Swan River,
• Ferry services to South Perth under a government contract, and
• Bells Function Centre
The acquisition has expanded SeaLink’s geographic base and provided further exposure to an expected growing tourism
market. It has been accounted for using the acquisition method. The consolidated financial statements include the results
of CCC WA for the period from acquisition date until 30th June, 2016.
The fair values of the identifiable assets and liabilities of CCC WA as at the date of acquisition were:
ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Property, plant and equipment
Customer contracts (Refer Note 2E)
Deferred tax asset
46
FAIR VALUE RECOGNISED
ON ACQUISITION
$’000
26
584
176
79
7,841
794
98
9,598
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
LIABILITIES
Trade and other payables
Current tax liabilities
Provisions
Deferred tax liabilities
Total identifiable assets at fair value
Goodwill arising on acquisition
Purchase Consideration transferred
The purchase consideration consisted entirely of a net cash outlay.
There was no contingent consideration.
ANALYSIS OF CASH FLOWS ON ACQUISITION:
Purchase Consideration transferred
Cash and cash equivalents
Net cash outflow
1,117
231
326
258
1,932
7,666
3,590
11,256
11,256
(26)
11,230
The fair value of vessels included
in Property, Plant and Equipment
is $7.75m. These are based on
internal valuations for ferries and
adopting tax written down values of
plant and equipment. The Deferred
Tax Asset mainly comprises the tax
effect on employee provisions whilst
the Deferred Tax Liability relates to
Customer Contracts.
Transaction costs of $64,000 have
been expensed and are disclosed as a
separate line item in the profit and loss.
Goodwill
The majority of goodwill on acquisition
relates to the tourism cruising part
of the business, none of which is
expected to be deductible for income
tax purposes.
From the date of acquisition, Captain
Cook Cruises WA has contributed
$1.2m to revenue and incured a loss
before tax of $0.3m from continuing
operations. If the combination
had taken place at the start of the
financial year, revenue from continuing
operations for the Group would have
been $10.3m and profit before tax
from continuing operations for the
Group would have been $1.1m. The
profit before tax achieved in the first 10
months of the financial year has been
extracted from the vendor’s accounting
systems using unaudited accounts
and using the vendor’s accounting
policies which are consistent with
those adopted by the Group.
B CORPORATE INFORMATION
The consolidated financial
statements of the Group for the
year ended 30 June 2016 were
authorised for issue in accordance
with a resolution of Directors on
10 August 2016.
SeaLink Travel Group Limited is a
limited company incorporated and
domiciled in Australia whose shares
are publicly traded. The Company
listed on the Australian Stock
Exchange on 16 October, 2013.
The principal business units of the
Company and its subsidiaries (the
Group) are described in Note 1D.
C INFORMATION RELATING TO SEALINK TRAVEL GROUP LIMITED (‘THE PARENT ENTITY’)
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Net Assets
Contributed equity
Reserves
Retained profits
Total Parent Equity
Profit or loss of the parent entity
Total comprehensive income of the parent entity
2016
$’000
2015
$’000
–
97,284
97,284
(480)
2,207
1,727
95,558
95,557
520
(520)
95,557
7,591
7,591
–
37,688
37,688
1,578
2,207
3,784
33,904
33,904
487
(487)
33,904
5,738
5,738
The parent has entered into various cross-guarantees with its subsidiaries to support borrowings across the Group.
47
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
D SHARE OPTION PLANS
(a) RECOGNISED SHARE-BASED PAYMENT EXPENSES;
Expense arising from options issued in 2015
Expense arising from options issued in 2012
Total expense
2016
$’000
2015
$’000
18
14
32
23
–
23
(b) TYPES OF SHARE OPTION PLANS
Employee Share Option Plan “ESOP”
Share options are generally granted
to senior executives with more
than 12 months service. The ESOP
is designed to align participants
interests with those of shareholders.
When a participant ceases
employment prior to the vesting
of their share options, the share
options are forfeited.
In November 2014, 200,000
share options were granted to
an employee under the SeaLink
Employee Option Plan. The exercise
price of the options was $2.50 and
the contractual life 5 years. The
options vest after a period of 1 year
as long as the senior employee is
still employed on such date. The fair
value of the share option granted
was valued at $0.176 per share
Effective date issued
Number of Performance Rights issued
Minimum hurdle share price
Dividend yield
Expected volatility (as per valuation)
Risk free interest rate
Expected life (years)
Valuation per performance right
Expense allocated over vesting period
ASX price at issue date
being $35,200, the cost being
expensed over the vesting period.
No options were granted during the
2016 financial year.
Employee Performance Rights
Performance rights are generally
granted to senior executives with more
than 12 months service. The ESOP is
designed to align participants interests
with those of shareholders. When a
participant ceases employment prior
to the vesting of their performance
rights or where the performance hurdle
is not met, the performance rights
lapse. Should all conditions be met,
one ordinary share is issued for each
performance right at no consideration.
The performance hurdle is measured
against a minimum share price quoted
on the ASX. This future price hurdle
usually targets a 10% compound
growth rate from the share price at the
date of issue of the performance rights.
The amount recognised as an
expense is only adjusted when
performance rights do not vest due
to non-market-related conditions.
The amount recognised as an
expense is only adjusted when
performance rights do not vest due
to non-market-related conditions.
The fair value of the performance rights
granted is estimated at the date of
grant using a custom binomial lattice
pricing model, taking into account
terms and conditions upon which the
performance rights were granted using
the following assumptions:
$
$
$
$
31 August 2015
85,000
3.20
3.35%
27.6%
3.35%
3.0
0.618
52,530
2.41
The following tables illustrate the number and weighted average exercise price (“WAEP”) of and movements in all share
options and performance rights during the year:
OPTIONS
Outstanding at the beginning of the year
Granted (under the Employee Share Option Plan)
Forfeited
Exercised
Outstanding at year end
48
NUMBER
’000
981
–
–
(781)
200
2016
WAEP
$
1 .62
n/a
n/a
1.40
2.50
NUMBER
’000
3,781
200
–
(3,000)
981
2015
WAEP
$
1.31
2.50
1.20
1.25
1.62
FINANCIAL REPORT SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
THE OUTSTANDING BALANCE IS REPRESENTED BY
TYPE
ESOP
Directors
OPTION CLASS
C
PERFORMANCE RIGHTS
Outstanding at the beginning of the year
Granted (under the Employee Share Option Plan)
Exercised
Outstanding at year end
2016
200
–
200
NUMBER
’000
–
85
–
85
2015
231
750
981
2016
WAEP
$
n/a
$Nil
n/a
$Nil
NUMBER
’000
–
–
–
–
2015
WAEP
$
n/a
n/a
n/a
n/a
E RELATED PARTY TRANSACTIONS
(a) NAMES AND POSITIONS HELD OF KEY MANAGEMENT PERSONNEL
IN OFFICE AT ANY TIME DURING THE FINANCIAL YEAR ARE
Directors
A McEvoy
C Smerdon
W T Spurr
T Dodd
A Staines
J R Ellison
Chairman – (non-executive)
Appointed Chairman 1 July, 2015
Director – (non-executive)
Director – (non-executive)
Director – (non-executive)
Director – (non-executive) - Appointed 15 February, 2016
Managing Director and Chief Executive Officer
L Hughes Turnbull
Director – (non-executive)
J R Ellison
Managing Director and Chief Executive Officer
L Hughes Turnbull
Director – (non-executive) - Retired 27 October, 2015
F A Mann
Director – (non-executive) - Retired 27 October, 2015
Other Key Management Personnel
D Gauci
T Waller
A Haworth
P Victory
General Manager, SeaLink South Australia
Chief Financial Officer, Company Secretary
General Manager, Captain Cook Cruises
General Manager, SeaLink Queensland
(b) TRANSACTIONS WITH RELATED PARTIES
During the year, the following purchases/services were made with entities associated with directors at normal market prices
Purchases and services totalling $60,331 from Vectra Corporation Ltd, a company associated with Mr C Smerdon (2015:
$23,099);
Purchases and services totalling $43,393 from Tourism and Allied, a company associated with Mr C Smerdon (2015:
$103,428);
Purchases and services totalling $7,090 from Pacific Marine, a company associated with Mr T Dodd (2015: $119,475);
Purchases and services totalling $22,571 from Fairfax Media, a company associated with Mr A McEvoy (2015: n/a);
49
FINANCIAL REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES – NOTES TO FINANCIAL STATEMENT FOR YEAR END 30 JUNE 2016
In addition to the above, the Company
purchased a barge from Pacific Marine
in February 2016 for $1.3m to be
used for a longer term contract carting
mineral sand from Stradbroke Island.
Pacific Marine was chosen as the most
appropriate supplier after an extensive
tender process was undertaken.
They were selected due to lowest
price, availability and ability to
provide a tailored solution.
Mr Dodd played no role in the
process which was negotiated
and undertaken by management
from both parties involved.
Services related to Toursim and
Allied, which previously involved a
premise rental, ceased in November
2015 when the Company shifted
its coach maintenance facilities to
Regency Park in Adelaide.
KEY MANAGEMENT PERSONNEL REMUNERATION
Short-term
Post employment
Other long-term benefits - LSL
Termination Benefits
Share-based payment
Outstanding at year end
2016
$’000
2,275
161
105
–
8
2,549
2015
$’000
2,022
138
25
–
2,185
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key
management personnel. There are no loans to directors or key management personnel.
F RELATED BODIES CORPORATE
The following subsidiaries and trusts are incorporate in Australia and all 100% owned
Kangaroo Island SeaLink Pty Ltd
Magnetic Island Cruisae Corporation Pty Ltd
SeaLink KI Ferries Pty Ltd
TravelLink Pty Ltd
Kangaroo Island Adventure Tours Pty Ltd
SeaLink Queensland Pty Ltd
SeaLink Northern Territory Pty Ltd
STG Properties Pty Ltd
Australia Inbound Pty Ltd
PDW Pty Ltd
Sunferries Travel Pty Ltd
SeaLink Ferries Pty Ltd
BITS Assets Pty Ltd
Stradbroke Assets Pty Ltd
Stradbroke Ferries Pty Ltd
Big Red Cat Pty Ltd
The South Australian Travel Company Pty Ltd
Curtis Island Assets Pty Ltd
Kangaroo Island Odysseys Pty Ltd
Captain Cook Cruises Pty Ltd
SeaLink Vessels Pty Ltd
SeaLink Marina Pty Ltd
TravelLink Technology Pty Ltd
Vivonne Bay Outdoor Education Centre Pty Ltd
The Living Classroom Pty Ltd
Vyscot Pty Ltd
Avonward Pty Ltd
TSA Ferry GroupPty Ltd
Curtis Island Services Pty Ltd
BITS Ferry Services Pty Ltd
Sea Stradbroke Services Pty Ltd
Mineral Sand Trust
Curtis Transit Trust
Bits Trust
Sea Stradbroke Trust
50
FINANCIAL REPORT Ernst & Young
121 King William Street
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
Tel: +61 8 8417 1600
Fax: +61 8 8417 1775
ey.com
REPORT ON THE FINANCIAL REPORT
We have audited the accompanying
financial report of SeaLink Travel
Group Limited, which comprises the
consolidated statement of financial
position as at 30 June 2016, the
consolidated statement of statement
of profit and loss, the consolidated
statement of other comprehensive
income, the consolidated statement of
changes in equity and the consolidated
statement of cash flows for the year
then ended, notes comprising a
summary of significant accounting
policies and other explanatory
information, and the directors’
declaration of the consolidated entity
comprising the company and the
entities it controlled at the year’s
end or from time to time during the
financial year.
Directors’ responsibility for the
financial report
The directors of the company are
responsible for the preparation of
the financial report that gives a true
and fair view in accordance with
Australian Accounting Standards
and the Corporations Act 2001 and
for such internal controls as the
directors determine are necessary to
enable the preparation of the financial
report that is free from material
misstatement, whether due to fraud
or error. In Note 5a, 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
judgment, 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 controls relevant to the entity’s
preparation and fair presentation of
the financial report 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 entity’s
internal controls. An audit also includes
evaluating the appropriateness
of accounting policies used and
the reasonableness of accounting
estimates made by the directors,
as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit we have
complied with the independence
requirements of the Corporations Act
2001. We have given to the directors
of the company a written Auditor’s
Independence Declaration, a copy
of which is included in the directors’
report. We confirm that the Auditor’s
Independence Declaration 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 SeaLink
Travel Group Ltd 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 5A.
Report on the remuneration report
We have audited the Remuneration
Report included in pages 11 to 18
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 SeaLink Travel Group Ltd
for the year ended 30 June 2016,
complies with section 300A of the
Corporations Act 2001.
Ernst & Young
Nigel Stevenson
Partner
Adelaide
10 August 2016
51
AUDITORS REPORT
SEALINK TRAVEL GROUP LTD AND ITS CONTROLLED ENTITIES
Ernst & Young
121 King William Street
Adelaide SA 5000 Australia
GPO Box 1271 Adelaide SA 5001
Tel: +61 8 8417 1600
Fax: +61 8 8417 1775
ey.com
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF SEALINK TRAVEL GROUP LIMITED
As lead auditor for the audit of SeaLink Travel Group Limited for the financial year ended 30 June 2016, I declare to the
best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of SeaLink Travel Group Limited and the entities it controlled during the financial year.
Ernst & Young
Nigel Stevenson
Partner
Adelaide
10 August 2016
52
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
AUDITORS PORT REMUNERATION REPORT
This remuneration report, which
forms part of the Director’s
Report, sets out the remuneration
arrangements of the Group
for Directors and its Senior
Management for the financial year
ended 30 June 2016. It also details
remuneration policies and results
and outlines the links between
remuneration and results, both
financial and non-financial.
The term ‘Key Management
Personnel’ (KMP) refers to those
having authority and responsibility
for planning, directing and controlling
the major activities of the Group,
directly or indirectly, including
any Director (whether Executive
or otherwise) of the Group.
The term ‘Executive’ includes
the Chief Executive Officer (CEO)
and other Senior Executives of
the Parent and the Group.
This information has been
audited as required by section
308 (3C) of the Act.
Details for each person covered
by this report are set out under
the following headings:
1. Key Management Personal;
2. Remuneration philosophy;
3. Remuneration of KMP;
4. Executive contracts;
5. Option and shareholding
of KMP; and
6. Remuneration governance.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
53
AUDITORS REPORT 1 KEY MANAGEMENT PERSONNEL (KMP)
The Directors and other KMP of the Group during or
since the end of the financial year were:
NON-EXECUTIVE DIRECTORS (NED)
A McEvoy – Chairperson – Appointed Chairperson 1 July 2015
EXECUTIVE DIRECTORS
J Ellison – CEO and Managing Director
W Spurr – Director (non-executive)
T Dodd – Director (non-executive)
OTHER EXECUTIVE KMP
T Waller – Chief Financial Officer and Company Secretary
C Smerdon – Director (non-executive)
D Gauci – General Manager – SeaLink South Australia
A Staines – Director (non-executive)
– Appointed 15 February,2016
L Hughes Turnbull – Director (non-executive)
– Retired 27 October 2015
F Mann – Director (non-executive)
– Retired 27 October 2015
2 REMUNERATION PHILOSOPHY
A Haworth – General Manager – Captain Cook Cruises
P Victory – General Manager – SeaLink Queensland /
Northern Territory
There were no changes to KMP after the reporting date
and before the financial report was authorised for issue.
The performance of SeaLink depends upon the quality of its
Directors and Executives. To succeed, the Company must
attract, motivate and retain highly skilled KMP. To achieve
this goal, remuneration policy seeks to ensure that:
• Remuneration levels are set to attract and retain good
performers and motivate and reward them to continually
improve business performance;
• Remuneration is competitive with incentives for continued
employment and for increasing shareholder value;
• Rewards are linked to the achievement of business
LINK BETWEEN REMUNERATION POLICY
AND COMPANY PERFORMANCE
Performance of SeaLink, especially in relation to overall
earnings of the Group compared to its budgets and prior
years, is a material factor in the determination of the nature
and amount of the remuneration of KMP. However, whilst
the Board does have regard for, and is extremely cognisant
of the need to drive shareholder wealth and value through
improved year on year performance and payment of
dividends, there are many varied factors that can affect
(positively or negatively):
targets; and
• SeaLink’s ASX share price; and
• A remuneration structure supports SeaLink’s values
• The ability to pay dividends or make returns of capital.
and culture.
However, the Company, as it expands, recognises
the importance of retaining key personnel and the
Nomination and Remuneration Committee is considering
implementing long term incentives for the 2016-17 year
and foreseeable future.
As such, financial results, combined with individual
performance, are the key factors in determining overall
remuneration of KMP in any financial year.
The table below shows the performance of the Company as
measured by the NPAT (net profit after tax) from continuing
operations and dividends paid.
30 JUNE 2012
$’000
30 JUNE 2013
$’000
30 JUNE 2014
$’000
30 JUNE 2015
$’000
30 JUNE 2016
$’000
Revenue
NPAT
Dividends paid
79,684
3,834
7,782
91,978
7,023
4,026
104,422
7,233
5,499
111,748
9,349
5,761
177,459
22,349
7,624
54
REMUNERATION REPORT
The below table highlights the performance of the share price since Sealink was listed:
SEALINK SHARE PRICE
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Prior to listing in
October 2013,
the share price
was determined
through an off-
market transaction
on the basis of
willing buyer and
seller run by an
independent share
registry.
7000
6000
5000
4000
3000
2000
1000
0
3
1
0
2
/
0
1
/
6
1
3
1
0
2
/
2
1
/
6
1
4
1
0
2
/
2
0
/
6
1
4
1
0
2
/
4
0
/
6
1
4
1
0
2
/
6
0
/
6
1
4
1
0
2
/
8
0
/
6
1
4
1
0
2
/
0
1
/
6
1
4
1
0
2
/
2
1
/
6
1
5
1
0
2
/
2
0
/
6
1
5
1
0
2
/
4
0
/
6
1
5
1
0
2
/
6
0
/
6
1
5
1
0
2
/
8
0
/
6
1
5
1
0
2
/
0
1
/
6
1
5
1
0
2
/
2
1
/
6
1
6
1
0
2
/
2
0
/
6
1
6
1
0
2
/
4
0
/
6
1
6
1
0
2
/
6
0
/
6
1
SeaLink
All Ords
3 REMUNERATION OF KMP
DIRECTORS
Remuneration Policy
The Board seeks to set aggregate
remuneration at a level that provides
the Company with the ability to
attract and retain directors of the
highest calibre, whilst incurring a cost
that is acceptable to shareholders.
The aggregate remuneration
amount sought to be approved by
shareholders and the fee structure is
reviewed annually against fees paid to
Non-Executive Directors (“NED”s) of
similar sized listed companies from a
market capitalisation perspective.
The Company’s constitution and the
ASX listing rules specify that the NED
fee pool shall be determined from
time to time by general meeting.
The latest determination was on 18
August 2008 when shareholders
approved the Constitution which
contained the aggregate fee pool of
$580,000 per annum. The Board will
seek an increase to $750,000 for the
NED pool at the 2016 AGM to allow
flexibility in the appointment of an
additional Director.
The remuneration of NED’s consists
of directors fees which currently are
as follows:
• The Chair receives an annual
fee of $134,000 plus statutory
superannuation; and
• All other NED’s receive $67,000 pa
plus statutory superannuation.
These fees include increases of 2.5%
on 1 July 2015 and a further 3.6% in
February, 2016. There are no increases
for the 2016-17 financial year.
There are no further additional fees
for serving on a sub-committee of the
Board. NED’s do not receive retirement
benefits, nor do they participate in
any incentive programs. The Board,
however, is currently considering
implementation of a Long Term
Incentive plan for NED’s which will be
presented at the 2016 Annual General
Meeting for approval.
55
REMUNERATION REPORT Remuneration Outcome
The remuneration of NEDs for the years ended 30 June 2015 and 30 June 2016 is detailed in the tables below:
NED’S
A McEvoy
A Staines
C Smerdon
W Spurr
T Dodd
F Mann
L Hughes Turnbull
G Ursini
FINANCIAL
YEAR
DIRECTOR
FEES
SHORT TERM
BENEFITS
OTHER SUPERANNUATION
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
131,272
28,750
25,124
–
66,616
69,000
66,104
69,000
66,104
69,000
23,575
69,000
22,041
69,000
–
139,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12,462
–
2,386
–
5,720
–
6,231
–
6,231
–
–
–
–
–
–
–
TOTAL
143,735
28,750
27,511
–
72,336
69,000
72,336
69,000
72,336
69,000
23,575
69,000
24,086
69,000
–
139,000
EXECUTIVES
• Ensure remuneration is competitive
Remuneration Policy
The Group rewards executives with
a level and mix of remuneration
commensurate with their position and
responsibilities so as to:
• Reward executives for company,
business unit and individual
performance against targets set by
reference to agreed benchmarks;
• Align the interests of executives with
those of shareholders and of other
Company business units;
• Link reward to annual and longer
term strategic business goals; and
Remuneration Outcome
to market.
The Company does not provide
discretionary bonuses unless there
are exceptional circumstances.
The Company does not subscribe,
at senior level, to the philosophy
of excessive ‘at risk components’
at a cash salary level but seeks to
reward employees with a market
competitive base rate. It considers
that employment should be ‘at risk’ if
performance does not deliver results or
is at an unacceptable level.
Remuneration comprises of several
key elements:
• Fixed remuneration;
• Annual performance incentives; and
• Where a specific business need
arises, retention incentives
are offered through options,
performance rights or retention
bonuses.
There is no requirement for either
the CEO or KMP to hold shares in
the Company.
Remuneration of KMP is prepared on an accruals basis for bonuses except where noted and were as follows:
FY 2016
J Ellison
D Gauci
T Waller
SALARY
469,702
217,241
247,711
A Haworth
267,085
P Victory
174,628
SHORT
TERM
INCENTIVE
NON-
MONETARY
BENEFITS
234,000
43,385
137,250
34,769
23,652
1,025
5,000
–
5,517
7,245
OTHER
SHORT
TERM SUPER
5,797
21,920
–
–
–
–
20,638
32,172
25,373
26,352
LONG TERM
BENEFIT LSL
PERFORMANCE
RIGHTS
TOTAL
61,609
7,016
23,151
7,936
5,362
–
794,053
2,575
295,856
–
440,284
2,575
2,575
343,255
239,814
5656
REMUNERATION REPORT FY 2015
J Ellison
D Gauci
T Waller
SALARY
414,861
211,032
194,402
A Haworth
239,769
P Victory
177,897
SHORT TERM
INCENTIVE
NON-
MONETARY
BENEFITS
104,625
38,007
32,600
30,931
31,950
2,915
6,328
–
11,186
7,358
LEAVE
LOADING
SHORT TERM SUPER
5,453
31,275
–
–
–
–
20,048
34,289
25,628
26,900
The proportion of remuneration that is performance based is as follows:
J Ellison
D Gauci
T Waller
A Haworth
P Victory
LONG TERM
BENEFIT LSL
PERFORMANCE
RIGHTS
–
–
–
–
–
6,046
5,976
5,989
871
6,500
2016
29%
16%
31%
8%
9%
TOTAL
565,175
281,391
267,280
308,385
250,605
2015
19%
14%
12%
10%
13%
The remuneration amounts disclosed above have been calculated based on the expense to the Company for the year.
Therefore, such items such as performance rights, annual leave taken and long service leave taken and accrued for, have
been included in the calculations. As a result, the remuneration disclosed may not equal the salary package as agreed with
the executive in any one year.
Short term incentives
For KMP, bonuses vary by Executive depending on the influence on the Company and the business unit, achievement of
defined business goals, achievement of specific business unit EBIT budgets as well as whether the Company achieved the
Board approved budget for the year. The table below outlines the bonuses payable to KMP for the reporting period. 100% of
the achievement bonus will vest with the employee.
CASH BONUS
AT RISK (MAXIMUM)
ACHIEVEMENT
OF GOALS
DISCRETIONARY
PERFORMANCE
TOTAL
BONUS
J Ellison
D Gauci
$260,000
$44,497
Profit and share price targets met. 90% of KPI’s met.
Group and Business Unit Budget targets met. 90% of
KPI’s met
T Waller
$150,000
Group stretch profit target met and 83% of KPI’s met
A Haworth
$48,676
P Victory
$36,388
Group Budget EBIT target met. Business Unit Budget
EBIT target not met. 93% of KPI’s met
Group Budget EBIT target met. Business Unit Budget
EBIT target not met. 80% of KPI’s met
–
–
–
–
–
$234,000
$43,385
$137,250
$34,769
$23,652
57
REMUNERATION REPORT
4 EXECUTIVE CONTRACTS
CEO
The Company and Mr Jeffrey Ellison
entered into a Managing Director
Service Agreement which commenced
on 16 October 2013 being the listing
date on the ASX. The Agreement
expires five years from that date. The
agreement also allows the Company to
extend the term of the employment.
Under the Managing Director’s Service
Agreement, Mr Ellison receives a total
fixed gross remuneration package of
$520,000 per annum (including wages,
superannuation and motor vehicle) for
his position as Managing Director of
the Company. Mr Ellison is also entitled
to a travel allowance of up to $10,000
per annum for family to travel with him
on business related travel.
Mr Ellison is entitled to a maximum
performance bonus for the reporting
period of up to 50% of annual salary.
Criteria for achievement, of which a
bonus attaches to each component,
are:
• The Company exceeding budgeted
net profit after tax;
• Growth of 10% in share price based
on the movement between the
average share price in July 2015
and June 2016; and
• Reaching specifically defined Key
Performance Indicators.
Mr Ellison is employed under an
ongoing contract which can be
terminated with notice by either side.
Mr Ellison may terminate the Managing
Director Service Agreement and his
employment with the Company at any
time by giving the Company 90 days
written notice. The Company may
also terminate the Managing Director
Service Agreement and Mr Ellison’s
employment with the Company
without cause at any time after the
expiration of the Initial Term by giving
Mr Ellison 90 days written notice or by
making a payment in lieu of notice.
In the event of serious misconduct
or where other specific circumstances
warrant summary dismissal, the
Company may terminate the
Management Director Service
Agreement and Mr Ellison’s
employment immediately without
notice.
Upon termination of Mr Ellison’s
employment, he will be subject to
a restraint of trade for a period of
six months.
OTHER KMP
Remuneration arrangements for all other KMP are formalised in employment agreements. Standard KMP termination
provisions are as follows:
NOTICE PERIOD
PAYMENT IN
LIEU OF NOTICE
TREATMENT OF STI
ON TERMINATION
TREATMENT OF LTI
ON TERMINATION
Resignation
4 weeks
Termination for cause
None
4 weeks
Termination in cases
of death, disablement,
redundancy or notice
without cause
4 weeks
None
4 weeks
Unvested awards forfeited
Unvested awards forfeited
Unvested awards forfeited
Unvested awards forfeited
Subject to Remuneration
and Nomination Committee
discretion. If not exercised,
unvested awards forfeited
Subject to Board
discretion. If not exercised,
unvested awards forfeited
In addition to the above terms and conditions, Ms D Gauci is entitled to receive a travel allowance of up to $10,000 per
annum for family travel.
5 OPTIONS AND SHAREHOLDINGS OF KMP
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
YEAR END 30 JUNE 2016
DIRECTORS
J Ellison
KEY MANAGEMENT PERSONNEL
A Haworth
Total
BALANCE
1/7/15
SOLD/
FORFEITED
EXERCISED
BALANCE
30/6/16
750,000
31,250
781,250
–
–
–
(750,000)
(31,250)
(781,250)
–
–
–
INTRINSIC VALUE
OF OPTIONS
EXERCISED/SOLD
$2,100,000
$86,875
58
REMUNERATION REPORT YEAR END 30 JUNE 2015
BALANCE 1/7/14
SOLD/
FORFEITED
EXERCISED
BALANCE
30/6/15
VALUE OF OPTIONS
EXERCISED
DIRECTORS
G Ursini
F Mann
C Smerdon
J Ellison
KEY MANAGEMENT PERSONNEL
D Gauci
T Waller
A Haworth
Total
500,000
375,000
375,000
1,435,000
–
(77)
–
–
(500,000)
(374,923)
(375,000)
(685,000)
65,000
250,000
31,250
(65,000)
(100,000)
–
–
(150,000)
–
–
–
–
750,000
–
–
31,250
3,031,250
(165,077)
(2,084,923)
781,250
$600,000
$449,908
$450,000
$897,000
$84,500
$300,000
–
As at 30 June 2016 and 30 June 2015, all options to KMP had vested. In addition to the above, 200,000 (2015: 200,000)
share options, which vested in October, 2015 are held by senior staff.
There were no share options issued to KMP during the year.
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
YEAR END 30 JUNE 2016
BALANCE
1/7/15
EXERCISE
OF OPTIONS
ACQUIRED/
(SOLD)
BALANCE
30/6/16
AMOUNT PAID PER
SHARE ON OPTION
EXERCISE ($)
DIRECTORS
C Smerdon
W Spurr
T Dodd
J Ellison
6,350,000
150,000
5,400,000
5,512,769
KEY MANAGEMENT PERSONNEL
D Gauci
T Waller
P Victory
A Haworth
5,000
150,000
62,835
14,400
–
–
–
750,000
–
–
–
31,250
(245,500)
(69,000)
(188,000)
(738,000)
5,000
(10,000)
20,525
6,000
6,104,500
81,000
5,212,000
5,524,769
10,000
140,000
83,360
51,650
1.40
1.30
Total
17,645,004
781,250
(1,218,975)
17,207,279
YEAR END 30 JUNE 2015
BALANCE 1/7/14
EXERCISE OF
OPTIONS
ACQUIRED/
(SOLD)
BALANCE
30/6/15
AMOUNT PAID PER
SHARE ON OPTION
EXERCISE ($)
DIRECTORS
G Ursini
F Mann
C Smerdon
W Spurr
T Dodd
J Ellison
5,000,000
3,173,077
6,250,000
150,000
5,207,769
KEY MANAGEMENT PERSONNEL
D Gauci
T Waller
P Victory
A Haworth
5,000
10,000
51,000
14,400
500,000
374,923
375,000
–
685,000
–
150,000
–
–
(500,000)
–
(275,000)
–
(380,000)
–
(10,000)
11,835
–
5,000,000
3,548,000
6,350,000
150,000
5,512,769
5,000
150,000
62,835
14,400
Total
25,261,246
2,084,923
(1,153,165)
26,193,004
All equity transactions with KMP have been entered into under terms and conditions no more favourable than those the
Company would have adopted if dealing at arm’s length.
1.20
1.20
1.20
–
1.31
–
1.20
–
–
59
REMUNERATION REPORT PERFORMANCE RIGHTS OF KEY MANAGEMENT PERSONNEL
Performance rights are generally granted to senior executives with more than 12 month’s service. The ESOP is designed to
align participant’s interests with those of shareholders. When a participant ceases employment prior to the vesting of their
performance rights or where the performance hurdle is not met, the performance rights are forfeited. Should all conditions be
met, one ordinary share is issued for each performance right at no consideration. The hurdle price is usually set using a 10%
compound rate applied to the share market price at date of issue.
The following Performance Rights were issued during the year to Key Management Personnel:
KEY MANAGEMENT
PERSONNEL
D Gauci
P Victory
A Haworth
NUMBER
15,000
15,000
15,000
HURDLE
PRICE
$3.20
$3.20
$3.20
ISSUE DATE
1 September 2015
1 September 2015
1 September 2015
VESTING
PERIOD
3 years
3 years
3 years
The share price was chosen as an appropriate hurdle as it creates a strong link with the creation of long term shareholder
value and to encourage the achievement of growth in the Company’s business.
6 REMUNERATION GOVERNANCE
REMUNERATION AND NOMINATION
COMMITTEE
The Remuneration and Nomination
Committee comprises three
independent NEDs. This committee
has delegated authority for matters
related to remuneration arrangements
for executives, and is required to make
recommendations to the Board on
other matters.
Specifically, the Board approves
the remuneration arrangements of
the CEO made under any long term
incentives, following recommendations
from the Remuneration and
Nomination Committee. The Board
also sets the aggregate remuneration
of all NEDs, which is then subject
to shareholder approval. The
Remuneration and Nomination
Committee approves, having regard
to the recommendations made by the
CEO, the level of the short-term annual
performance incentives for KMP or any
discretionary bonuses.
The Remuneration and Nomination
Committee meets regularly throughout
the year. The CEO attends certain
Remuneration and Nomination
Committee meetings by invitation,
where management input is required.
However, the CEO is not present
during discussions related to his own
remuneration arrangements.
REMUNERATION CONSULTANTS
To ensure the Remuneration and
Nomination Committee is fully informed
when making remuneration decisions,
it seeks external remuneration advice
where required. Remuneration
consultants are engaged by, and
report directly to, the Committee. In
selecting remuneration consultants,
the Committee considers potential
conflicts of interest and requires
independence from the Group’s key
management personnel and other
executives as part of their terms of
engagement.
During the year, Ashby Magro were
paid $2,333 for their Remuneration
and Consulting services which also
included providing advice on additional
Board members. No Remuneration
Consultants were utilised during the
2014-15 financial year.
Signed in accordance with a resolution
of the directors.
On behalf of the directors
A J McEVOY
CHAIRPERSON
Adelaide
Date: 10 August 2016
60
REMUNERATION REPORT ADDITIONAL INFORMATION
ASX
ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows.
The information is current as of 18 August 2016.
A DISTRIBUTION OF EQUITABLE SECURITIES
(i) Ordinary share capital, entitled to vote and entitled to dividends
101,154,103 fully paid ordinary shares are held by 2,798 individual shareholders.
Of the total ordinary shares, there are 3,200,000 shares held in escrow by 4 shareholdings until 15 September, 2016.
(ii) Options
200,000 options are held by 1 individual option holder. Options do not carry a right to vote or to participate in dividends.
Options do not carry a right to vote or to participate in dividends.
The number of shareholders, by size of holding, in each class are:
FULLY PAID ORDINARY SHARES
OPTIONS
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Totals
Holdings less than a marketable parcel
(based on a closing price of $4.80 on 18 August 2016)
B SUBSTANTIAL SHAREHOLDERS
ORDINARY SHAREHOLDERS
MR C SMERDON
MR J R ELLISON
MR T J DODD
C TWENTY LARGEST HOLDERS OF QUOTED EQUITY SECURITIES
ORDINARY SHAREHOLDERS
NATIONAL NOMINEES LIMITED
PRESCOTT NO 22 PTY LTD
CITICORP NOMINEES PTY LIMITED
SARTO PTY LTD
BNP PARIBAS NOMS PTY LTD
SUNROP PTY LTD
RBC INVESTOR SERVICES
HEBDEN PTY LTD
J P MORGAN NOMINEES AUSTRALIA LTD
ARISTOS NOMINEES PTY LTD
EQUILINK PTY LTD
FLAVON NOMINEES PTY LTD
HSBC CUSTODY NOMINEES
BELAHVILLE PTY LTD
WITRON PTY LTD
LASHMAR NOMINEES PTY LTD
MR J. R. ELLISON & MRS T. A. ELLISON
GLADYS WILLSON
MR KEVIN WILLSON
ATORCH NOMINEES PTY LTD
359,090
3,048,094
3,503,694
10,009,313
84,233,912
101,154,103
327
NUMBER (‘000s)
6,100
5,525
5,418
NUMBER (‘000s)
6,215
5,844
5,824
5,031
4,523
4,398
4,117
3,774
3,674
3,564
3,548
2,842
2,842
2,625
1,849
1,752
1,751
1,173
1,103
956
0
0
0
0
1
1
–
%
6.08
5.68
5.58
%
6.14
5.78
5.76
4.97
4.47
4.35
4.07
3.73
3.63
3.52
3.51
2.81
2.81
2.60
1.83
1.73
1.73
1.16
1.09
0.94
61
CORPORATE GOVERNANCE
The underlying principles are as follows:
The Board of Directors of SeaLink Travel Group Limited
(“SeaLink”) are responsible for the corporate governance
of the Company and its controlled entities (the Group),
monitoring the operational and financial performance of the
Group, overseeing its business strategy and approving its
strategic direction.
The ASX Listing Rules require listed entities to disclose
the extent to which they have followed the best practice
recommendations set by the ASX Corporate Governance
Council during a reporting period.
1. Lay solid foundations for management and oversight;
2. Structure the Board to add value;
3. Act ethically and responsibly;
4. Safeguard integrity in corporate reporting;
5. Make timely and balanced disclosure;
6. Respect the rights of shareholders;
7. Recognise and manage risk; and
8. Remunerate fairly and responsibly.
Each of these principles are dealt with in detail
on our website, in our Corporate Governance Statement
available at sealinktravelgroup.com.au/corporate-governance
Head Office
Level 2, 431-439 King William Street
Adelaide, SA 5000
Web www.sealinktravelgroup.com.au
Email info@sealinktravelgroup.com.au
Phone +61 8 8202 8688
ABN 69 007 122 367
ACN 109 078 257
ASX Code SLK