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S&W Seed CompanyAnnual Report
2016
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Contents
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Directors’ Declaration
Financial Statements
Consolidated statement of profit or
loss and other comprehensive income
Consolidated statement of financial position
1
16
17
19
20
21
22
Consolidated statement of changes in equity
23
Consolidated statement of cash flows
Notes to the Financial Statements
ASX Additional Information
24
25
71
Contents of the Notes to the Financial Statements
1 Summary of Significant Accounting Policies
2 Profit/(Loss) from Operations
3 Income Taxes
4 Remuneration of Auditors
5 Trade and Other Receivables
6 Other Financial Assets
7 Inventories
8 Other Assets
9 Property, Plant and Equipment
10 Biological Assets
11 Intangibles
12 Trade and Other Payables
13 Borrowings
14 Other Financial Liabilities
15 Provisions
16 Issued Capital
17 (Loss)/Earnings per Share
18 Dividends
19 Subsidiaries
20 Commitments for Expenditure
21 Segment Information
22 Notes to the Cash Flow Statement
23 Financial Instruments
24 Related Party Disclosures
25 Parent Entity Disclosures
26 Business Combinations
27 Subsequent Events
25
37
38
40
41
42
42
43
43
45
46
47
47
48
48
49
49
50
51
54
55
57
58
68
69
70
70
Directors’ Report
For the financial year ended 30 June 2016
The Directors of Webster Limited (ACN 009 476 000)
submit herewith the annual financial report of the Company
for the financial year ended 30 June 2016. In order to
comply with the provisions of the Corporations Act 2001,
the Directors’ Report follows:
Rod Roberts – BEc, MBA, FAICD (Non-Executive Director)
Mr Roberts was appointed Managing Director in October
1996 until 2001 and Chairman from October 2001
to August 2007 and again from November 2008 to
June 2015.
1. Directors
The Directors of the Company at any time during or since
the end of the financial year are:
Chris Corrigan – BEc (Executive Chairman)
Mr Corrigan was appointed Non-Executive Director in
November 2007 until July 2010 and again from 15 October
2012. Mr Corrigan was appointed Executive Chairman on
29 February 2016.
Mr Corrigan was Managing Director of Patrick Corporation
Limited, Australia’s largest stevedore company with interests
in rail transportation and aviation, from March 1990 to May
2006. Prior to that, he had a career with Bankers Trust
spanning 20 years, including periods as Managing Director
of Bankers Trust in Australia and for the Asia-Pacific region.
In September 2011, Mr Corrigan was appointed Chairman
of Qube Logistics Holdings Limited.
Directorships of other listed companies held during the
last three years:
Crown Limited – from July 2007 to November 2013
Qube Logistics Holdings Limited – from March 2011
Richard Haire – BEc, FAICD (Executive Chairman)
Mr Haire was appointed Executive Chairman in June 2015
and retired on 29 February 2016.
Mr Haire has 30 years’ experience in the international
cotton and agribusiness industry, including 26 years in
agricultural commodity trading and banking. He was
appointed as a director of the Bank of Queensland in April
2012. Mr Haire formerly held the position of Australian
and New Zealand Managing Director and regional head of
Olam International. He has also held the offices of director
for the Cotton Research and Development Corporation,
Open Country Dairy (NZ), New Zealand Farming Systems
Uruguay, SunWater Limited and the CSIRO Advisory Board
for Field Crops.
Mr Roberts has previously held roles including Head of
Corporate Finance at Bain & Co, Director of County NatWest
Australia Limited, Chairman of Harris & Company Limited,
Director of Tassal Group Limited and Deputy Chancellor of
the University of Tasmania. He is a director of the Australian
Institute of Company Directors and President of the
Tasmanian branch.
David Cushing – BCom, ACA (Non-Executive Director)
Mr Cushing was appointed Non-Executive Director on
31 October 2012.
Mr Cushing is Executive Chairman of Rural Equities Limited,
one of New Zealand’s largest rural property companies,
and is also a director of the private investment company
H & G Limited. Mr Cushing was formerly an investment
banker with National Australia Bank Limited subsidiary,
Bank of New Zealand. Mr Cushing has considerable
experience in the agricultural sector having previously been
a director of horticultural company Fruitfed Supplies Limited,
rural services company Williams & Kettle Limited and New
Zealand Farming Systems Uruguay Limited. He has also
acted as an alternate director of rural services and seed
company PGG Wrightson Limited for the Chinese company
Agria Corporation.
Chris Langdon – BCom (Econ) (Non-Executive Director)
Mr Langdon was appointed Non-Executive Director on
14 March 2013.
Mr Langdon is a major shareholder and Chief Executive
of Langdon Group Pty Limited. The Langdon Group is
160 years old and is a leading company in its sector,
primarily involved in food ingredient distribution, and herb
and spice processing. Mr Langdon’s early career was in
investment banking with roles in Australia, London and
New York. Since the early 1990s, apart from his corporate
role at Langdon Group, Mr Langdon has been involved in
various external corporate directorships.
He has held directorships at ASX the listed Text Media
Limited, Panoramic Resources Limited and Fresh Food
Industries Holdings Limited. He has also held a directorship
in Nutshack Group Pty Limited and is currently a director
of International College of Management, Sydney Pty Limited.
Webster Limited – Annual Report 2016
1
Directors’ Report
For the financial year ended 30 June 2016
Directorships of other listed companies held during the
last three years:
Panoramic Resources Limited – from August 2004 to
June 2016.
David Robinson – MBBS FRACS (Non-Executive Director)
Mr Robinson was appointed Non-Executive Director in
June 2005 until November 2008 and again from December
2014. He held the role of Chairman of Webster Limited from
August 2007 to November 2008. Mr Robinson retired from
the Board on 23 June 2016.
Mr Robinson has 30 years’ experience in large irrigated
and broad acre farming as principal of Red Mill Pastoral
Company and Moreton Pastoral Company. He is the
Executive Chairman of Australian Food and Fibre Limited.
Mr Robinson has also held the offices of Chairman of
Bengerang Limited and Deputy Chairman of Cotton
Australia Limited.
John Joseph (Joe) Robinson – BFA (Non-Executive
Director)
Mr J Robinson was appointed Non-Executive Director on
23 June 2016.
Mr Robinson is the Managing Director of Australian Food
and Fibre Limited and has over 20 years’ experience in
irrigated and dry land farming, prior to which he traded
futures with Bankers Trust. He is currently the Chairman
of the Gwydir Valley Irrigators Association, Chairman of the
Gwydir Valley State Water Customer Service Committee, the
Presiding Member of the Cotton Research and Development
Corporation Selection Committee and a member of The
Primary Industries Ministerial Advisory Council.
Joseph Corrigan – BA MCA (Alternate for Chris Corrigan)
Mr Corrigan was appointed Alternate Director for Mr Chris
Corrigan on 14 October 2013.
Mr Corrigan holds a Bachelor and Masters in Creative Arts
and has interests and experience in the agricultural industry
particularly wheat, canola and beef. Mr Corrigan is also
managing director of an entertainment production company.
The abovenamed Directors held office during the whole
of the financial year and since the end of the financial year
except for:
Mr J J Robinson – appointed 23 June 2016
Mr D Robinson – retired 23 June 2016
Mr R Haire – retired 29 February 2016
Directors’ shareholdings are disclosed on page 12 of the
Directors Report. There has been no change in Directors’
shareholdings between the end of the financial year and
the date of this Directors’ Report.
2. Company Secretaries
Mr Maurice Felizzi (BA Acc CPA AGIM) joined Webster
Limited on 18 April 2016 and was appointed Company
Secretary from 28 April 2016. He is a member of CPA
Australia and the Institute of Chartered Secretaries and
holds Bachelor of Arts from the University of Canberra.
Mr Andrew Reilly (B Bus) was appointed as Company
Secretary on 26 August 2015 and retired on 28 April 2016.
Ms Susan Stegman was appointed as Company Secretary
from 2008 and retired on 26 August 2015.
3. Principal Activity
The principal activity of the consolidated entity during the
year was the production, processing and marketing of
walnuts, cotton, crops and livestock.
4. Review of Operations
The consolidated entity’s financial performance resulted
in a net Loss for the period before tax of $81.6 million
(2015: Profit $8.6 million) after impairment of goodwill
of $96.5 million (2015: Nil).
2
5. Directors’ Meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during
the financial year and the number of meetings attended by each Director (while they were a Director or committee member).
During the financial year, eight Board Meetings and two Audit and Risk Committee Meetings were held. It was resolved to cease
the Remuneration Committee and the Nominations and Appointment Committee, as all such matters will be considered and
addressed at the Board of Directors meetings.
Board of
Directors
Audit and Risk
Committee
Held Attended
Held Attended
8
8
8
8
8
–
4
8
8
8
7
8
–
4
2
2
2
2
2
*
*
2
2
2
2
2
*
*
Directors
C D Corrigan
R J Roberts
B D Cushing
C D Langdon
D W Robinson (i)
J J Robinson (ii)
R Haire (iii)
(i) D W Robinson resigned on 23 June 2016.
(ii) J J Robinson was appointed as Director on 23 June 2016.
(iii) R Haire resigned as Director on 29 February 2016.
* Not a member of the Audit and Risk Committee.
6. Corporate Governance
In fulfilling its obligations and responsibilities to its various stakeholders, the Board of Webster Limited recognises the need to
implement and maintain a robust system of governance. The Board has established a program that aims to meet best practice
in standards of accountability, disclosure, responsibility and transparency.
The Australian Stock Exchange (“ASX”) Corporate Governance Council has released guidelines under which companies are now
obliged to report on whether they comply with their published “Corporate Governance Principles and Recommendations”,
as outlined in those guidelines.
The Company complies with most of the principles outlined in the ASX guidelines and the Board remains committed to
reviewing all practices to ensure that an appropriate and functional solution is in place for a company of Webster Limited’s
size and type of operation.
Set out below is a summary of the Company’s current practices in each of the areas identified in the ASX guidelines.
Webster Limited – Annual Report 2016
3
Audit and Risk Committee
The Audit and Risk Committee monitors internal control
policies and procedures designed to safeguard Company
assets and to ensure the integrity of financial reporting.
It advises on the establishment and maintenance of a
framework of internal controls and appropriate ethical
standards for the management of the consolidated Group.
The Committee is also responsible for identifying areas of
significant business risk and ensuring arrangements are in
place to manage them. It reviews the annual and half-year
financial statements before the Board considers them.
It is also responsible for ensuring compliance with the
Corporations Act 2001, ASX Listing Rules and any other
matters with external governing or statutory bodies.
Among its specific responsibilities, the Committee reviews
and advises the Board on the nomination and remuneration
of external auditors and the adequacy of existing external
and internal audit arrangements including the scope and
quality of audits. The Audit and Risk Committee Charter
is available on the Company’s website and contains
information on procedures for the selection and appointment
of the external auditor, and for the rotation of external audit
engagement partners.
The Committee met two times during the 2015-16
year. Current members of the Audit and Risk Committee
are Messrs C D Langdon (Chairman), R J Roberts and
B D Cushing.
Details of the names and qualifications of those appointed
to the Audit and Risk Committee are contained on pages
1-2 of the Directors’ Report. The number of meetings of the
Audit and Risk Committee and names of the attendees are
contained on page 3.
The Executive Chairman, Chief Financial Officer and the
external audit partner in charge of the Webster Limited audit
attend meetings of this Committee by invitation.
The Committee also meets from time to time with the
external auditors, independent of management.
Directors’ Report
For the financial year ended 30 June 2016
6.1 Lay solid foundations for
management and oversight
The Webster Limited Board of Directors is responsible
for the overall corporate governance of the consolidated
group including its strategic direction, establishing goals for
management and monitoring the achievement of these goals.
The relationship between the Board and management is
a partnership that is crucial to the Company’s long-term
success. The separation of responsibilities between the Board
and management is clearly understood and respected.
6.2 Structure the Board to add value
The Company has recognised the importance of having a
balanced Board comprised of Directors with an appropriate
range of backgrounds, skills and experience. As at the date
of this report the Board comprises one Executive Director
and four Non-Executive Directors.
It is the intention of the Board to maintain a majority of
Non-Executive Directors on the Board. The Board is of the
view that Directors possess an appropriate mix of skills,
experience, expertise and diversity to enable the Board
to discharge its responsibilities.
The Board considers the independence of Directors to
be assessed on their capacity to act in accordance with
their duties and put the interests of the Company and its
shareholders first, so that they are objectively capable of
exercising independent judgement. The Board considers
that each of the current Directors has this capacity. The
Board notes the definition of “independence” contained
in the ASX guidelines and recognises that Mr R Roberts
and Mr C Langdon meet the guidelines’ definition of
“independent”.
The Directors as a group are responsible for reviewing
membership of the Board and for selecting new Directors.
The constitution requires that any new Non-Executive
Director appointed by the Board must seek election at the
next Annual General Meeting.
The Board of Webster Limited is supported by the Audit and
Risk Committee. This committee has its own charter and
operating procedures and assists the Board in the discharge
of its obligations by the review of financial reports, audit,
risk and compliance. In addition, Directors meet outside
normal Board and Committee meetings from time to time,
in accordance with good corporate governance practice.
4
6.3 Promote ethical and responsible
decision making
As part of the Board’s continuing commitment to promote
ethical and responsible decision making, the Company has
a Code of Conduct which establishes a range of procedures
and guidelines to ensure that the highest ethical standards,
corporate behaviour and accountability are maintained.
The Code of Conduct was established in 1994 to guide
executives, management and employees in carrying out
their duties and responsibilities.
The Code of Conduct covers such matters as:
responsibilities to shareholders;
conflict of interest;
confidentiality;
protection of the Company assets;
relations with customers and suppliers;
employment practices; and
responsibilities to the community.
Webster Limited has developed and adopted a Securities
Trading Policy that prohibits employees trading the
Company’s shares due to knowledge of undisclosed
information. At other times, Directors and employees are
permitted to trade in Webster Limited securities subject to
compliance with the Securities Trading Policy, and statutory
and other relevant regulatory restrictions. Directors refer
all trading of Company shares by them to the Company
Secretary for ASX lodgment requirements.
Directors may, after prior approval of the Chairman, obtain
independent professional advice at the Company’s expense
for the purpose of the proper performance of their duties.
The Company is an equal opportunity employer and recruits
personnel from a diverse range of backgrounds. Workplace
diversity includes, but is not limited to, gender, age, race,
ethnicity, disability and cultural background. The Company
is committed to further enhancing the Group’s diversity
and recognises that embracing diversity in its workforce
contributes to the achievement of the Group’s objectives.
Although the Company has a rich diversity amongst its
employees, the Board recognise the need to improve
the diversity at senior executive and Board level. As at
30 June 2016, the Chair and the Company Secretary
of AGW Funds Management Limited (a wholly owned
subsidiary of Webster Limited that acts as the Responsible
Entity for three Managed Investment Schemes) were both
female. The Company is an equal opportunity employer and
the number of female employees has increased over recent
years and now females comprise approximately 20% of
senior executives, 18% of permanent employees and 54%
of seasonal/casual employees.
To further enhance the commitment to gender diversity the
Company has developed the following objectives which will
be monitored and evaluated by the Board.
Aim to increase the number of females in executive
positions which become vacant, subject to identifying
candidates with appropriate skills;
Review means by which the Company can identify and
develop high performing female employees to prepare
them for senior/executive roles; and
Increase the focus on gender participation across the
Company.
6.4 Safeguard integrity in financial
reporting
The Board is responsible for the integrity of financial data
and has instigated an internal control framework to ensure
accurate financial reporting of monthly actual results against
budgets approved by Directors and revised forecasts. In
accordance with section 295A of the Corporations Act
2001, the Chief Executive Officer and Chief Financial Officer
stated in writing to the Board that the consolidated entity’s
financial reports present a true and fair view, in all material
respects, of the consolidated entity’s financial condition
and operational results and are in accordance with relevant
accounting standards.
The Audit and Risk Committee provides assistance to
Directors in fulfilling their responsibility to the Company’s
shareholders and potential investors in relation to the
financial risk, audit, corporate accounting and reporting
practices of the Company.
Webster Limited – Annual Report 2016
5
Directors’ Report
For the financial year ended 30 June 2016
6.5 Make timely and balanced
disclosures
Webster Limited places considerable importance on
accurate and effective communication with its existing and
potential shareholders.
Webster Limited is committed to complying with the
continuous disclosure obligations of the Corporations
Act 2001 and the ASX Listing Rules. The Company has
developed and adopted a continuous disclosure policy and
procedure, which ensures all material matters concerning
the Company are conveyed immediately and effectively.
Webster Limited understands and respects the fact that
timely disclosure of relevant information is central to the
efficient operation of the securities market.
Consistent with best practice disclosure and continuous
disclosure requirements, all market-sensitive data, annual
and half-yearly reports and addresses by the Chairman
are released to the stock exchange through ASX On-Line.
Webster Limited also posts reports, newsletters, ASX
releases, Annual General Meeting and other major
presentations on its website – ww w.websterltd.com.au.
The external audit partner in charge of the Webster Limited
audit is invited to attend the Annual General Meeting and
is available to answer shareholder questions related to the
conduct of the audit, and the preparation and content of the
auditor’s report.
6.6 Respect the rights of
shareholders
Webster Limited is committed to providing shareholders
with comprehensive information about the Company and
its activities, and to fulfilling its obligations to the broader
market for continuous disclosure.
The Company publishes a comprehensive Annual Report
incorporating financial and other information. This is sent
to shareholders on request and is available to the public, as
well as being posted on the Company’s website. A Half-Year
Report incorporating abbreviated financial data and market
commentary is also made available on the same basis.
The Company maintains a website (ww w.websterltd.com.au)
that contains shareholder and stakeholder information in
addition to information about the Company’s products.
Previous Annual and Half-Year Reports are available on
the site.
The Company Secretary’s Office is responsible for the
distribution of material and responding to requests for
information from shareholders and the public. The Board,
and in particular the Chairman, bear responsibility for
communication with shareholders and members. This
occurs formally through the Annual Report and the Annual
General Meeting. At other times, senior management
and the Chairman liaise between the Board and key
shareholders and analysts.
Notice of the Company’s Annual General Meeting is sent
to shareholders, as well as being posted on the website
and released to the ASX. The Company’s auditor attends
the Annual General Meeting and is invited to answer
relevant questions and make statements to the meeting.
The Directors and senior management attend all General
Meetings and are available to shareholders and other
stakeholders. The public and the media are welcome
to attend General Meetings as observers.
6.7 Recognise and manage risk
The Audit and Risk Committee is responsible for the
establishment of a Group-wide risk profile. The objective
is to identify, evaluate, and monitor material risks that the
Company is facing, and to ensure effective management
or monitoring of those risks.
The Board is responsible for the Company’s system of
internal controls and monitors the operational and financial
aspects of the Company’s activities through the Audit and
Risk Committee.
The Board and the Audit and Risk Committee are both
involved in identifying key areas of risk such as insurance,
interest rate and exchange exposure and ensuring that
appropriate measures of protection are taken.
The Company has in place a number of risk management
controls which include the following:
risk management policy and practices;
policies and procedures for the management of financial
risk and treasury operations including exposures to
foreign currencies, financial instruments, and movements
in interest rates;
guidelines and limits for the approval of capital
expenditure and investments; and
a comprehensive insurance program.
Management is required to provide regular reports on each
of these matters.
6
6.8 Remunerate fairly and responsibly
7.2 Performance Based Remuneration
The Company recognises that the process of enhancing
shareholder value is dependent upon the performance
of Directors and management. Ensuring they each have
the knowledge and information required to perform their
duties, together with the regular review of performance,
are important factors in meeting the Company’s objectives.
The only benefits currently paid to Non-Executive Directors
are the base fee and superannuation, approved in aggregate
by shareholders. There is no scheme for the payment of
retirement benefits to Executive and Non-Executive Directors.
7. Remuneration Report
The Non-Executive Directors are responsible for reviewing
the compensation arrangements for all senior executives
and Directors. The review is conducted annually, having
regard to management performance and comparative,
external compensation levels. Independent advice may
be sought on compensation packages and Directors’ fees.
The compensation of key management personnel includes
salary/fees, movements in accrued annual and long service
leave, benefits (including the provision of motor vehicles,
superannuation and fringe benefits) and incentive schemes
(including performance-related bonuses).
7.1 Remuneration Policy
The objective of the Company’s executive remuneration
policy is to set remuneration levels to attract and retain
appropriately qualified and experienced Directors and
senior executives. The policy aligns executive rewards with
achievement of specific business goals and key performance
indicators, which include both financial and operational
targets. Remuneration packages include a mix of fixed
remuneration and performance-based remuneration. Senior
executives may receive short-term incentives.
Remuneration packages are reviewed and determined
by the Board, with due regard to current rates, and are
benchmarked against comparable industry salaries. The
Board may obtain independent advice with regard to the
appropriateness of remuneration packages.
Non-Executive Directors receive fees but do not receive any
performance-related remuneration. Non-Executive Directors’
fees are reviewed by the Board annually to ensure that they
are appropriate and in line with market expectations. The
total amount of remuneration provided to Non-Executive
Directors must not exceed an aggregate maximum of
$500,000 per annum.
Short-Term Incentives
A cash-based Short-Term Incentive Program (STI) continued
to be adopted for the 2016 financial year. In the 2016
financial year bonus payments of $300,000 have been
provided for (2015: $Nil). The Program is applicable
to key management personnel that act in an executive
capacity. The executive STI Program is linked to the budget
which aims to align executive performance to the financial
performance of the Company.
Executives are eligible for personal Incentives up to a
maximum of 50% of their total cost to company (TCC)
package based on achieving specific goals and/or KPIs.
The Board is responsible for assessing whether the KPIs are
met based on detailed reports on performance prepared by
management. Financial targets ensure that reward is only
available when value has been created for shareholders.
Operational targets allow for the recognition of efficiencies
that will provide for future shareholder value.
Short-term incentives are payable 50% following approval
with the remaining 50% payable after 12 months on the
condition the executive is still employed by the Company.
Long-Term Incentives
On 27 August 2013 the Board adopted an executive Long-
Term Incentive Plan (LTIP) to provide eligible executives the
opportunity to acquire shares in the Company. Under the
LTIP, eligible executives are invited to apply for a set number
of Webster Limited ordinary shares and a non-recourse
interest free loan will be made available to them by the
Company for this purpose. The Board may from time to
time determine which executives are entitled to participate
in the LTIP based on individual performance as assessed
under the annual review process. Shares issued to eligible
executives under the LTIP are subject to a holding lock from
their issue date until applicable vesting conditions (eligible
executive must be employed by the Company) have been
satisfied and the loans applicable to them repaid. The issue
price of shares under the LTIP is determined on the basis
of trading in Webster Limited ordinary shares over the five
trading days prior to the date of issue. Shares issued under
the LTIP rank pari passu with existing ordinary shares and
are entitled to participate in dividends as well as future rights
and bonus issues. The LTIP rewards participating executives
against the extent of the consolidated entity’s achievement
against improvement in share price and hence shareholder
value over the long term.
Webster Limited – Annual Report 2016
7
Directors’ Report
For the financial year ended 30 June 2016
Details of LTIP shares granted as compensation to key management personnel:
30 June 2016
Executive
Share
Rights
Issued
Share
Rights
Forfeited
Issue/
Exercise
Price
Issue
Date
Vesting/
Expiry
Date
Current
Year
Expense
J C Hosken (iii)
625,000
625,000
$0.86
05/09/2013
30/06/2016
625,000
625,000
$0.86
05/09/2013
30/06/2016
$0
$0
Total
Value
Granted
(i)
$0
$0
S J Stegmann
D C Goullet
M Felizzi
550,000
550,000
387,500
387,500
250,000
250,000
$0.86
05/09/2013
05/09/2016
$33,216
$99,467
$0.86
05/09/2013
05/09/2017
$28,349
$113,162
$0.86
05/09/2013
05/09/2016
$23,402
$70,079
$0.86
05/09/2013
05/09/2017
$19,973
$79,728
$1.10
30/05/2016
30/05/2019
$1.10
30/05/2016
30/05/2020
$2,134
$1,793
$0
$0
$75,376
$84,513
$0
$0
$108,867
$522,324
C Barnes (ii)
367,500
367,500
$1.23
05/09/2014
30/06/2016
367,500
367,500
$1.23
05/09/2014
30/06/2016
4,360,000
(i) The value of benefits granted under the LTIP during the year is calculated at the issue date using the Black-Scholes pricing model. This value
is allocated to the remuneration of key management personnel on a straight-line basis over the period from issue to vesting date.
(ii) C Barnes resigned during the financial year (16 November 2015); therefore the full value of his share rights was forfeited.
(iii) J Hosken’s entitlements were forfeited on 30 June 2016.
30 June 2015
Executive
J C Hosken
S J Stegmann
D C Goullet
C Barnes (ii)
Share
Rights
Issued
Share
Rights
Forfeited
Issue/
Exercise
Price
Issue
Date
Vesting/
Expiry
Date
Current
Year
Expense
Total
Value
Granted
(i)
625,000
625,000
550,000
550,000
387,500
387,500
367,500
367,500
3,860,000
$0.86
05/09/2013
05/09/2016
$37,677
$113,030
$0.86
05/09/2013
05/09/2017
$32,148
$128,593
$0.86
05/09/2013
05/09/2016
$33,156
$99,467
$0.86
05/09/2013
05/09/2017
$28,291
$113,162
$0.86
05/09/2013
05/09/2016
$23,360
$70,079
$0.86
05/09/2013
05/09/2017
$19,932
$79,728
$1.23
05/09/2014
05/09/2017
$25,730
$93,562
$1.23
05/09/2014
05/09/2018
$21,789
$105,645
$222,082
$803,266
(i) The value of benefits granted under the LTIP during the year is calculated at the issue date using the Black-Scholes pricing model. This value
is allocated to the remuneration of key management personnel on a straight-line basis over the period from issue to vesting date.
(ii) C Barnes was issued 735,000 share rights during the year.
8
7.3 Relationship between remuneration policy and Company performance
The following tables set out summary information about the consolidated entity’s earnings and movements in shareholder
wealth for the five years to 30 June 2016. Analysis of the figures shows that 2015 was affected by acquisition costs from the
purchase of Bengerang Limited and takeover of Tandou Limited. The 2016 year was affected by the impairment of goodwill. The
Company’s performance over the five years has been reflected in an increase in the Company’s share price over the same period.
Revenue and other income
Net profit/(loss) before tax
Net profit/(loss) after tax
Share price at start of year
Share price at end of year
Interim Dividend
Final Dividend
30 June
2016
($’000)
30 June
2015
($’000)
30 June
2014
($’000)
30 June
2013
($’000)
30 June
2012
($’000)
187,887
77,503
65,650
61,774
48,159
(81,554)
(80,669)
8,568
5,759
11,977
8,328
9,922
6,967
5,196
3,998
30 June
2016
30 June
2015
30 June
2014
30 June
2013
30 June
2012
$1.57
$1.12
–
$0.86
$1.57
$0.70
$0.86
$0.50
$0.70
$0.37
$0.50
–
1.50 cps
1.00 cps
0.50 cps
1.00 cps
1.00 cps
2.00 cps
1.50 cps
1.50 cps
Basic earnings per share
(23.28) cps
3.70 cps
6.21 cps
5.62 cps
4.31 cps
7.4 Key Management Personnel details
The Directors and other key management personnel of Webster Limited during the year were:
Directors
C D Corrigan (Executive Chairman) – appointed 29 February 2016
R J Roberts (Non-Executive Director)
B D Cushing (Non-Executive Director)
C D Langdon (Non-Executive Director)
R Haire (Executive Chairman) – retired 29 February 2016
D W Robinson (Non-Executive Director) – retired 23 June 2016
J J Robinson (Non-Executive Director) – appointed 23 June 2016
Executives
J C Hosken (Chief Executive Officer) – retired 18 November 2015
S J Stegmann (Chief Financial Officer and Company Secretary) – retired 30 September 2015
D C Goullet (General Manager Operations, Walnuts Australia)
M Felizzi (Chief Financial Officer and Company Secretary) – appointed 18 April 2016
B Barry (General Manager – Water Operations)
C D Barnes (General Manager Orchards, Walnuts Australia) – retired 16 November 2015
A T Reilly (Chief Financial Officer and Company Secretary) – appointed 28 August 2015 retired 31 March 2016
Except as noted, the named persons held their current position for the whole of the financial year and since the end of the
financial year.
Webster Limited – Annual Report 2016
9
Directors’ Report
For the financial year ended 30 June 2016
7.5 Remuneration details of Key Management Personnel
The following tables disclose compensation of key management personnel of the consolidated entity. The term “Key
Management Personnel” refers to those persons having authority and responsibility for planning, directing and controlling
the activities of the consolidated entity, directly or indirectly, including any Director (whether executive or otherwise) of the
consolidated entity.
2016
Short-Term
Post Employment Termination
Share-Based
Amounts
Fixed
Re-
muneration
Remuneration
Linked to
Performance
Total
Salary
and fees
Bonus
Non-
Monetary
Super
LTIP (ix)
Key
Management
Personnel
Directors
C D Corrigan
B D Cushing
R R Roberts
75,200
65,307
78,490
D W Robinson (i)
67,505
C D Langdon
R Haire (ii)
64,546
189,673
J J Robinson (iii)
–
Executives
–
–
–
–
–
–
–
7,418
7,144
7,418
6,204
7,418
10,510
7,418
6,413
7,418
–
4,896
15,482
141
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
89,762
78,929
96,418
81,336
71,964
210,051
141
S J Stegmann (iv)
53,748
77,853
2,626
12,223
148,643
61,375
356,467
J Hosken (v)
75,468
57,171
12,001
12,196
240,185
B Barry
M Felizzi (vi)
141,119
61,274
–
–
26,918
12,581
1,484
3,342
–
–
–
–
397,022
180,618
3,927
70,026
C Barnes (vii)
65,181
41,152
10,251
9,123
10,299
–
136,006
D Goullet
172,189
A T Reilly (viii)
182,561
–
–
26,918
20,567
–
43,375
263,049
15,856
14,573
156,340
–
369,329
Total
1,292,260
176,176
138,180
130,358
555,467
108,677
2,401,118
(i) Mr D W Robinson retired on 23 June 2016.
(ii) Mr R A G Haire retired on 29 February 2016.
(iii) Mr J J Robinson was appointed on 23 June 2016.
(iv) Ms S J Stegman retired on 30 September 2015.
(v) MC J Hosken retired on 18 November 2015.
(vi) Mr M Felizzi was appointed on 18 April 2016.
(vii) C D Barnes retired on 16 November 2015.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(viii) Mr A T Reilly was appointed 28 August 2015 and retired on 31 March 2016.
(ix) The value of the Long-Term Incentive Plan benefits granted to key management personnel as part of their remuneration is calculated as at the issue
date using the Black-Scholes pricing model. The amounts disclosed as part of the remuneration for part of the financial year have been determined
by allocating the issue date value on a straight-line basis over the period from issue date to vesting date.
10
2015
Short-Term
Post Employment Termination
Share-Based
Amounts
Fixed
Re-
muneration
Remuneration
Linked to
Performance
Total
Key
Management
Personnel
Directors
Salary
and fees
Bonus
Non-
Monetary
Super
LTIP (vi)
R J Roberts
121,744
S J L Stone (i)
C D Corrigan
B D Cushing
C D Langdon
37,198
54,005
58,402
63,638
D W Robinson (ii)
15,678
R A G Haire (iii)
–
Executives
J C Hosken
223,862
S J Stegmann
215,415
D C Goullet
C D Barnes
132,567
141,897
K M Brown (iv)
97,249
D M Jones (vv)
83,657
Total
1,245,312
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,100
11,566
2,125
3,533
5,100
5,130
5,100
5,548
5,100
–
2,763
1,489
–
–
24,600
18,090
8,100
16,986
19,500
12,425
19,500
12,930
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
138,410
42,856
64,235
69,050
68,738
19,930
–
69,825
336,377
61,446
301,947
43,292
207,784
47,519
221,846
17,875
9,564
15,365
13,000
8,291
–
–
–
140,053
104,948
127,863
105,552
15,365
222,082
1,716,174
100%
100%
100%
100%
100%
100%
–
100%
100%
100%
100%
100%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
(i) Mr S J L Stone retired on 11 November 2014.
(ii) Mr D W Robinson was appointed on 17 December 2014.
(iii) Mr R A G Haire was appointed on 15 June 2015.
(iv) Ms K M Brown’s position was made redundant on 22 May 2015.
(v) Mr D Jones resigned on 28 February 2015.
(vi) The value of the Long-Term Incentive Plan benefits granted to key management personnel as part of their remuneration is calculated as at the issue
date using the Black-Scholes pricing model. The amounts disclosed as part of the remuneration for part of the financial year have been determined
by allocating the issue date value on a straight-line basis over the period from issue date to vesting date.
7.6 Transactions with Key Management Personnel
During the financial year, Directors and their Director-related entities, and executives, purchased goods, which were domestic
or trivial in nature, from the Company on the same terms and conditions available to other employees and customers.
The Company entered into management agreements with Australian Food and Fibre Limited (pursuant to the purchase of the
Kooba Aggregation, Bengerang Limited and Tandou Limited) a company in which Mr David Robinson and Mr Joe Robinson
are associates. The Company entered into an agreement with Corrigan Air, a company in which Mr Christopher Corrigan
and Mr Joseph Corrigan are associates. The current agreement is for the provision of the use of light aircraft to transport
management to the Company’s properties at cost. Consolidated profit for the year includes $1,891,000 (2015: $400,000)
of management fee expense, direct reimbursements and aircraft travel arising from transactions with key management personnel
of the Group or their related parties.
Outside the above and contracts of employment, no other key management personnel have entered into a contract with the
Company during the financial year.
Webster Limited – Annual Report 2016
11
Directors’ Report
For the financial year ended 30 June 2016
7.7 Equity Holdings of Key Management Personnel
The following tables discloses details and movements in equity holdings of key management personnel of the consolidated entity:
Number of ordinary
shares (ORD) held
directly, indirectly
or beneficially
Type
Received
on
exercise of
options
Balance
at 1/7/15
Share
Rights
LTIP
Net other
change
Balance
at 30/6/16
Directors
C D Corrigan
B D Cushing
R J Roberts
D W Robinson (ii)
C D Langdon
R Haire
J J Robinson (i)
Executives
Options
C D Barnes
M Felizzi
D C Goullet
J C Hosken
S J Stegmann
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
43,106,493
20,244,413
5,143,187
54,031,899
1,444
–
–
122,527,436
735,000
–
776,232
1,250,000
1,105,113
3,866,345
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,025,941
45,132,434
– 20,244,413
–
5,143,187
– (54,029,399)
–
–
–
–
2,500
1,444
–
– 52,702,351
52,702,351
–
698,893 123,226,329
(735,000)
500,000
–
(1,250,000)
–
(1,485,000)
–
–
–
–
–
–
–
500,000
776,232
–
1,105,113
2,381,345
(i) Opening balance for J J Robinson is at the respective appointment date.
(ii) Closing balance for D W Robinson is at the respective retirement date.
12
Number of ordinary
shares (ORD) held
directly, indirectly
or beneficially
Type
Received
on
exercise of
options
Balance
at 1/7/14
Share
Rights
LTIP
Net other
change
Balance
at 30/6/15
Directors
C D Corrigan
B D Cushing
R J Roberts
D W Robinson (i)
C D Langdon
S J L Stone
R Haire
Executives
Options
C D Barnes
D C Goullet
J C Hosken
S J Stegmann
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
ORD
23,837,314
11,431,136
5,143,187
2,500
1,444
917,586
–
41,333,167
735,000
776,232
1,250,000
1,105,113
3,866,345
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
19,269,179
43,106,493
8,813,277
20,244,413
–
5,143,187
– 54,029,399
54,031,899
–
–
–
–
1,444
(455,000)
462,586
–
–
– 81,656,855 122,990,022
–
–
–
–
–
–
–
–
–
–
735,000
776,232
1,250,000
1,105,113
3,866,345
(i) Opening balance for D W Robinson is at the respective appointment date.
8. Issue of Shares
In August 2015, 3,039,780 ordinary shares were issued in finalising the successful takeover bid for Tandou Limited
(2015: 84,572,170 ordinary shares). In December 2014, 17,475,728 ordinary shares were issued to Australian Food and
Fibre Limited and associates in conjunction with the Kooba Aggregation purchase. In May 2015, 107,670,120 ordinary shares
were issued as consideration for the purchase of Bengerang Limited.
Webster Limited – Annual Report 2016
13
Directors’ Report
For the financial year ended 30 June 2016
9. Share Options
12. Subsequent Events
No shares of any controlled entity were issued during or
since the end of the financial year by virtue of the exercise
of any options.
Options over the shares of the Company have been granted
to M Felizzi 500,000 ORD shares – 30 May 2016 under
the LTIP scheme. On 18 November 2016 Mr C D Barnes
forfeited shares – 735,000 ORD shares, granted to him
by the Company. On 30 June 2016 Mr J Hosken forfeited
shares – 1,250,000 ORD shares, granted to him by the
Company. A non-recourse loan is made available to the
Key Management Personnel to acquire the shares granted
at the date the offer is accepted.
The Directors are not aware of any other matter or
circumstance that has arisen, other than that which has
been described above, that has significantly affected or may
significantly affect the operations of the consolidated Group,
the results of those operations or the state of affairs of the
consolidated Group in subsequent financial years.
13. Likely Developments
Likely developments in the consolidated Group’s operations
known at the date of this report have been covered
elsewhere within this report.
10. Dividends
During the year, the Directors declared and paid the
following dividends:
Dividends of 4.5 cents per share on the cumulative
non-redeeming preference shares were paid on
30 September 2015 and 31 March 2016.
A dividend of 1.0 cent per share on ordinary shares
was paid on 30 October 2015.
The Directors have declared a fully franked dividend
on ordinary shares of 1.0 cent per share, payable on
28 October 2016.
11. Changes in State of
Affairs
14. Officers’ Indemnities
and Insurance
During the current financial year, the Company paid a
premium in respect of a contract insuring the Directors of
the Company (as named above), the Company Secretary,
and all executive officers of the Company and of any related
body corporate against a liability incurred as such a Director,
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 and the amount of
the premium. The Company has not otherwise, during or
since the financial year, indemnified or agreed to indemnify
an officer or auditor of the Company or of any related body
corporate against a liability incurred as such an officer
or auditor.
Other than as disclosed in this report or in the accompanying
financial statements and notes thereto, there has been no
significant change in the state of affairs of the consolidated
Group during the year.
15. Environmental
Regulations
The consolidated group operates various processing
facilities that are subject to environmental controls. There
are no known issues that are outstanding with regulatory
authorities and the Group is operating within accepted
guidelines.
14
18. Independence
Declaration by Auditor
The auditor’s independence declaration is included on
page 16.
Signed in accordance with a resolution of the Directors
made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
C D Corrigan
Executive Chairman
Sydney, 25 August 2016
16. Non-Audit Services
The Directors are satisfied that the provision of non-audit
services during the year by the auditors (or by another
person or firm on the auditor’s behalf) is compatible with
the general standard of independence for auditors imposed
by the Corporations Act 2001. Details of amounts paid
or payable to the auditor for non-audit services provided
during the year by the auditor are outlined in note 4 to the
financial statements.
The Directors are of the opinion that the services disclosed
in note 4 to the financial statements do not compromise
the external auditor’s independence, based on the advice
received from the Audit and Risk Committee, for the
following reasons:
All non-audit services have been reviewed and approved
to ensure that they do not impact the integrity and
objectivity of the auditor, and
None of the services undermine the general principles
relating to auditor independence as set out in Code
of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing
the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as
advocate for the Company or jointly sharing economic
risks and rewards.
17. Rounding Off of
Amounts
The Company is a company of the kind referred to in ASIC
Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, dated 24 March 2016, and in
accordance with that Corporations instrument, amounts
in the Directors’ Report and the financial statements
are rounded off to the nearest thousand dollars, unless
otherwise indicated.
Webster Limited – Annual Report 2016
15
16Auditor’s Independence Declaration 17Webster Limited – Annual Report 2016Independent Auditor’s Report 18Independent Auditor’s Report Directors’ Declaration
The Directors declare that:
(a) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable;
(b) In the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting
Standards, as stated in note 1 to the financial statements;
(c) In the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations
Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and
performance of the consolidated entity; and
(d) The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by legislative instrument 2016/191.
The Company is within the class of company as affected by ASIC Class Order 98/1418. The nature of the deed of cross
guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in
accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class
Order applies, as detailed in note 19 to the financial statements will, as a group, be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
C D Corrigan
Executive Chairman
Sydney, 25 August 2016
Webster Limited – Annual Report 2016
19
Financial
Statements
20
Consolidated statement of profit
or loss and other comprehensive income
For the financial year ended 30 June 2016
Continuing Operations
Revenue
Cost of sales
Gross profit
Other income
Acquisition expenses
Distribution expenses
Marketing expenses
Operational expenses
Administration expenses
Finance costs
Other expenses
Operating profit before income tax expense and goodwill impairment
Impairment of goodwill
Profit/(loss) before income tax expense
Income tax credit/(expense)
Net profit/(loss) for the period from continuing operations
Discontinued operation
Loss for the period from discontinued operations
Profit/(loss) for the period
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit and loss
(Loss) on cash flow hedges taken to equity
Other comprehensive (loss) for the period (net of tax)
Total comprehensive income for the period
Profit attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
(Loss)/earnings per share
Basic (cents per share)
Diluted (cents per share)
Notes to the financial statements are included on pages 25 to 70.
Note
2016
($’000)
2015
($’000)
2(a)
128,381
58,320
(91,655)
(37,843)
36,726
20,477
2(b)
59,506
19,183
–
(3,902)
(671)
(3,934)
(1,969)
(584)
(63,396)
(13,922)
(6,182)
(6,927)
(258)
(7,111)
(3,283)
(289)
14,896
8,568
1.6
(96,450)
–
(81,554)
8,568
3
885
(318)
(80,669)
8,250
–
(80,669)
(2,491)
5,759
–
–
(612)
(612)
(80,669)
5,147
(80,669)
5,871
–
(112)
(80,669)
5,759
(80,669)
5,259
–
(112)
(80,669)
5,147
17
17
(23.28)
(23.28)
3.70
3.61
Webster Limited – Annual Report 2016
21
Consolidated statement of financial position
As at 30 June 2016
Current assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other assets
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Biological assets
Loans
Investments
Intangibles – water
Intangibles – goodwill
Intangibles – other
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Current tax liability
Other financial liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Net deferred tax liability
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings/(accumulated losses)
Equity attributable to the owners of the Company
Non-controlling interests
Total equity
22
Notes to the financial statements are included on pages 25 to 70.
Note
2016
($’000)
2015
($’000)
22(a)
12,450
17,226
5
6
7
8
5
9
10
11
11
11
12
13
3
14
15
13
3
15
25,535
34,743
–
53
60,353
81,452
8,223
2,229
106,561
135,703
752
2,314
233,517
218,055
43,642
35,688
–
52
2,207
52
240,450
231,741
24,700
121,150
1,919
2,044
545,032
613,251
651,593
748,954
15,231
26,480
44,694
46,991
1,038
–
–
620
1,296
2,499
62,259
76,590
152,257
149,743
19,847
21,371
374
159
172,478
171,273
234,737
247,863
416,856
501,091
16
462,844
459,468
371
(29)
(46,359)
37,812
416,856
497,251
416,856
497,251
–
3,840
416,856
501,091
Consolidated statement of changes in equity
For the financial year ended 30 June 2016
Share
capital
Cash flow
hedging
reserve1
Equity
settled
employee
benefits
reserve2
Retained
earnings/
(accumulated
losses)
Attributable
to the
owners of
the parent
Non-
controlling
interests
Total
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
($’000)
Balance at 1 July 2014
73,458
Profit or (loss) for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Payment of dividends
–
–
–
–
Equity issued via placement
17,866
Equity issued as consideration
for acquisition of subsidiaries
368,144
Non-controlling interests
arising on the acquisition
of subsidiaries
Recognition of share-based
payments
–
–
216
–
(612)
(612)
–
–
–
–
–
Balance at 30 June 2015
459,468
(396)
Profit or (loss) for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Payment of dividends
–
–
–
–
Equity issued as consideration
for acquisition of subsidiaries
3,376
Non-controlling interest
divestiture
Foreign exchange contracts
closed
Forfeiture of share-based
payments
Recognition of share-based
payments3
–
–
–
–
Balance at 30 June 2016
462,844
–
566
566
–
–
–
(170)
–
–
145
34,624
108,443
–
108,443
–
–
–
–
–
–
–
222
367
–
–
–
–
–
–
–
(197)
201
371
5,871
5,871
(112)
5,759
–
(612)
–
(612)
5,871
(2,683)
5,259
(2,683)
–
17,866
(112)
–
–
5,147
(2,683)
17,866
–
368,144
–
368,144
–
–
–
3,952
3,952
222
–
222
37,812
497,251
3,840
501,091
(80,669)
(80,669)
–
(80,669)
–
566
(80,669)
(80,103)
(3,502)
(3,502)
–
–
–
–
–
3,376
(170)
(197)
201
(46,359)
416,856
–
–
–
–
566
(80,103)
(3,502)
3,376
–
–
–
–
(170)
(197)
201
416,856
–
(3,840)
(3,840)
1. The hedging reserve represents hedging gains or losses recognised on the effective portion of cash flow hedges. The cumulative deferred gain or
loss on the hedge is recognised in profit or loss when the hedged transaction impacts the profit or loss, or is included as a basis adjustment to the
non-financial hedged item, consistent with the applicable accounting policy.
2. Equity settled employee benefits reserve relates to the Long-Term Incentive Plan.
3. The recognition of share-based payments represents the full-year expense for all members of the Long-Term Incentive Plan for the period whilst they
were a participant.
Notes to the financial statements are included on pages 25 to 70.
Webster Limited – Annual Report 2016
23
Consolidated statement of cash flows
For the financial year ended 30 June 2016
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Income tax paid
Note
2016
($’000)
2015
($’000)
150,550
96,193
(103,310)
(93,488)
(6,927)
(2,929)
–
(1,348)
Net cash (used in)/provided by operating activities
22(e)
40,313
(1,572)
Cash flows from investing activities
Cash acquired on acquisition of subsidiaries
Interest received
Payment for biological assets, property, plant and equipment
Payment for water entitlements
Payment for biological assets, property, plant and equipment acquired as part
of a business combination
Proceeds from sale of property, plant and equipment
Proceeds from government grants – development works
Proceeds from loans
Proceeds from sale of investments
Proceeds from sale of water entitlements
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings from others
Repayment of borrowings from others
Principal repayments under finance lease
Dividends paid
Proceeds from the issue of equity securities
Net cash (used in)/provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
–
97
(302)
204
(38,350)
(16,204)
(19,904)
–
–
(112,216)
5,983
9,772
1,140
2,207
53
6,970
–
–
–
–
(41,804)
(118,746)
217
144,685
–
–
(24,300)
(266)
(3,502)
(2,683)
–
17,866
(3,285)
135,302
(4,776)
14,984
17,226
2,242
Cash and cash equivalents at the end of the financial year
22(a)
12,450
17,226
Notes to the financial statements are included on pages 25 to 70.
24
Notes to the Financial Statements
For the financial year ended 30 June 2016
General Information
Webster Limited is a listed public company, incorporated
and operating in Australia.
Webster Limited’s registered office is at 148 Colinroobie
Road, Leeton NSW 2705 and its principle place of business
is at 61 Kurrajong Avenue Leeton.
1 Summary of Significant
Accounting Policies
1.1 Application of new and revised
Accounting Standards
(a) Standards and Interpretations affecting amounts
reported in the current period (and/or prior periods)
AASB 2015-3 “Amendments to Australian Accounting
Standards arising from the Withdrawal of AASB 1031
Materiality”.
The amendment completes the withdrawal of references
to AASB 10312 in the Australian Accounting Standards
and Interpretations, allowing that Standard to effectively
be withdrawn.
(b) Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements,
the Standards and Interpretations that were issued but not
yet effective are listed below. The potential effect of the
revised Standards and Interpretations on Webster’s financial
statements has not yet been determined.
AASB 9 “Financial Instruments” and the relevant
amending standards
Effective for annual reporting periods beginning on or after
1 January 2018 and expected to be initially applied in the
financial year ending 30 June 2019.
AASB 15 “Revenue from Contracts with Customers”
Effective for annual reporting periods beginning on or after
1 January 2018 and expected to be initially applied in the
financial year ending 30 June 2019.
AASB 16 “Leases”
Effective for annual reporting periods beginning on or after
1 January 2019 and expected to be initially applied in the
financial year ending 30 June 2020.
AASB 2014-4 “Amendments to Australian Accounting
Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation”
Effective for annual reporting periods beginning on or after
1 January 2016 and expected to be initially applied in the
financial year ending 30 June 2017.
AASB 2014-6 “Amendments to Australian Accounting
Standards – Agriculture: Bearer Plants”
Effective for annual reporting periods beginning on or after
1 January 2016 and expected to be initially applied in the
financial year ending 30 June 2017.
AASB 2015-1 “Amendments to Australian Accounting
Standards – Annual Improvements to Australian
Accounting Standards 2012-2014 Cycle”
Effective for annual reporting periods beginning on or after
1 January 2016 and expected to be initially applied in the
financial year ending 30 June 2017.
AASB 2015-2 “Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to
AASB 101”
Effective for annual reporting periods beginning on or after
1 January 2016 and expected to be initially applied in the
financial year ending 30 June 2017.
AASB 2015-5 “Amendments to Australian Accounting
Standards – Investment Entities: Applying the
Consolidation Exception”
Effective for annual reporting periods beginning on or after
1 January 2016 and expected to be initially applied in the
financial year ending 30 June 2017.
AASB 2016-1 “Amendments to Australian Accounting
Standards – Recognition of Deferred Tax Assets and
Unrealised Losses”
Effective for annual reporting periods beginning on or after
1 January 2017 and expected to be initially applied in the
financial year ending 30 June 2018.
Webster Limited – Annual Report 2016
25
Notes to the Financial Statements
For the financial year ended 30 June 2016
AASB 2016-2 “Amendments to Australian Accounting
Standards – Disclosure initiative: Amendments to
AASB 107”
Effective for annual reporting periods beginning on or after
1 January 2017 and expected to be initially applied in the
financial year ending 30 June 2018.
These Standards and Interpretations will be first applied in
the financial report of the Group that relates to the annual
reporting period beginning after the effective date of each
pronouncement.
1.2 Statement of compliance
These financial statements are general purpose financial
statements which have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and
Interpretations and comply with other requirements of
the law.
The financial statements comprise the consolidated financial
statements of the Group. For the purposes of preparing
the consolidated financial statements, the company is a
for-profit entity.
Accounting Standards include Australian Accounting
Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and notes
of the Company and the Group comply with International
Financial Reporting Standards (“IFRS”).
The financial statements were authorised for issue by the
Directors on 25 August 2016.
1.3 Basis of preparation
The financial report has been prepared on the basis of
historical cost, except for biological assets and inventories
at realisable value and the revaluation of certain non-current
assets and financial instruments. Cost is based on the fair
values of the consideration given in exchange for assets.
All amounts are presented in Australian dollars, unless
otherwise noted.
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,
regardless of whether that price is directly observable
or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, Webster
Limited takes into account the characteristics of the
asset or liability if market participants would take those
characteristics into account when pricing the asset or liability
at the measurement date. Fair value for measurement
and/or disclosure purposes in these consolidated financial
statements is determined on such a basis, except for share-
based payment transactions that are within the scope of
AASB 2, leasing transactions that are within the scope of
AASB 117, and measurements that have some similarities
to fair value but are not fair value, such as net realisable
value in AASB 2 or value in use in AASB 136.
In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2 or 3
based on the degree to which the inputs to the fair value
measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which
are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity
can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset
or liability.
Webster Limited is a company of the kind referred to in
Legislative Instrument 2016/191, dated 24 March 2016.
1.4 Critical accounting judgements
and key sources of estimation
uncertainty
In the application of the Group’s accounting policies,
management is required to make judgements, estimates
and assumptions about carrying values of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on
historical experience and other factors that are considered to
be relevant. Actual results may differ from these estimates.
We review the estimates and underlying assumptions on
an ongoing basis. We recognise revisions to accounting
estimates in the period in which the estimate is revised if
the revision affects only that period or in the period of the
revision and future periods if the revision affects both current
and future periods
The following are key assumptions concerning the future,
and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts of the assets
and liabilities within the next financial year:
26
Walnut Trees – We classify walnut trees as a biological asset
and valued in accordance with AASB 141 “Agriculture”. Our
accounting policies in relation to walnut trees are detailed
in Note 1.5(e). In applying this policy, the Group has made
various assumptions. As at 30 June 2016, the value of
walnut trees carried in the financial statements of the
consolidated entity is $43.6 million (2015: $33.9 million).
Goodwill – The goodwill arising on the Bengerang Limited
purchase and the Tandou Limited takeover represents
the excess of the consideration paid over the fair values
of the assets and liabilities acquired. The consideration
paid is calculated by reference to the quoted share price
of Webster Limited at the date of control, being 29 May
2015, multiplied by the number of shares issued. Directors
negotiated the acquisitions in the months preceding the
announcement of the transactions. An independent expert
assessed the transactions as fair and reasonable. The
Bengerang transaction was subsequently approved by
Webster Limited shareholders at an extraordinary general
meeting, while the Tandou acquisition was communicated
to shareholders and the market.
1.5 We have adopted the following
significant accounting policies in the
preparation and presentation of the
financial report:
(a) Basis of Consolidation
The consolidated financial statements incorporate the
financial statements of Webster Limited and entities
controlled by the company and its subsidiaries (referred to
as “Webster Limited” in these financial statements). Control
is achieved when Webster Limited:
Has power over the investee;
Is exposed, or has rights, to variable returns from its
involvement with the investee; and
Has the ability to use its power to affect its returns where
the Company has the power to govern the financial and
operating policies of an entity so as to obtain benefits
from its activities.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from
the effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, we make adjustments to the financial
statements of subsidiaries to bring their accounting policies
into line with those used by other members of Webster.
We eliminate all intra-group transactions, balances, income
and expenses in full on consolidation. In the separate
financial statements of Webster Limited, intra-Group
transactions (“common control transactions”) are generally
accounted for by reference to the existing (consolidated)
book value of the items.
Where the transaction value of common control transactions
differs from their consolidated book value, we recognise
the difference as a contribution by or distribution to equity
participants by the transacting entities.
(b) Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is reduced for estimated
customer returns, stock rotation, price protection, rebates
and other similar allowances.
Sale of goods – Revenue from the sale of goods and
disposal of other assets is recognised when the consolidated
entity has transferred to the buyer the significant risks and
rewards of ownership of the goods, except with respect to
biological assets (see note 1.5(e)).
Rendering of services – Revenue from a contract to
provide services is recognised by reference to the stage of
completion of the contract. The stage of completion of the
contract is determined as revenue from a time and material
basis and is recognised at the contractual rates as labour
hours are delivered and direct expenses are incurred.
Dividend and interest revenue – Dividend revenue from
investments is recognised when Webster Limited’s right to
receive the payment has been established. Interest revenue
is recognised on a time proportionate basis that takes into
account the effective yield on the financial asset.
(c) Borrowing Costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Investment
income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the profit and
loss in the period in which they are incurred.
Webster Limited – Annual Report 2016
27
Notes to the Financial Statements
For the financial year ended 30 June 2016
(d) Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value and have
a maturity of three months or less at the date of acquisition.
Bank overdrafts are shown within borrowings in current
liabilities in the balance sheet.
(e) Biological Assets
Walnut Trees – We classify walnut trees as a biological asset
and valued in accordance with AASB 141 “Agriculture”. We
value developing walnut trees at their growing cost until
the year they bear their first commercial crop. We measure
the value of crop-bearing walnut trees at fair value using a
discounted cash flow methodology.
The discounted cash flow incorporates the following factors:
Walnut trees have an estimated 25-year economic life,
with crop yields consistent with long-term yield rates;
Selling prices are based on average trend prices;
Growing, processing and selling costs are based on
long-term average levels; and
Cash flows are discounted at a rate that takes into
account the cost of capital plus a suitable risk factor.
Growing Crop – We value the growing walnut crop in
accordance with AASB 141 “Agriculture”. This valuation
takes into account current selling prices and current
growing, processing and selling costs. The calculated crop
value is then discounted to take into account that it is only
partly developed, and then further discounted by a suitable
factor to take into account the agricultural risk until crop
maturity. Where little biological transformation has occurred
in the growing crop, cost is used as an estimate of fair value.
The fair value of walnuts and cotton harvested during the
period and recognised in revenue is determined as the fair
value of walnuts and cotton after harvest and picking less
estimated point of sale costs.
The fair value of livestock at the reporting date has been
determined by using an external valuation.
(f) Impairment of Assets
At each reporting date, Webster Limited reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any indication exists, it
estimates the recoverable amount of the asset in order to
determine the extent of the impairment loss (if any). Where
the assets do not generate cash flows that are independent
from other assets, it estimates the recoverable amount of the
cash-generating unit to which the assets belong.
Webster Limited tests goodwill for impairment annually
and whenever there is an indication that the asset
has been impaired. An impairment of goodwill is not
subsequently reversed.
Recoverable amount is the higher of fair value less costs
to sell and value in use. 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 which the estimate of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount.
An impairment loss is recognised in profit or loss
immediately, unless the relevant asset is carried at fair
value, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss is subsequently reversed, the
carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount
does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the
asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised in profit or loss immediately,
unless the relevant asset is carried at fair value, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
28
(g) Property, Plant and Equipment
We measure land and buildings at cost. After initial
recognition the asset is carried at cost less accumulated
depreciation and any accumulated impairment losses.
Depreciation on buildings is charged to profit or loss.
Plant and equipment, leasehold improvements and
equipment under finance lease are stated at cost less
accumulated depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition
of the item. In the event that settlement of all or part of
the purchase consideration is deferred, we determine cost
by discounting the amounts payable in the future to their
present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment,
including freehold buildings but excluding land. We
calculate depreciation on a straight-line basis so as to write
off the net cost or other revalued amount of each asset
over its expected useful life to its estimated residual value.
Leasehold improvements are depreciated over the period of
the lease or estimated useful life, whichever is the shorter,
using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at the
end of each annual reporting period.
We use the following estimated useful lives in the calculation
of depreciation:
Land improvements
Buildings
Leasehold improvements
Plant and equipment
5 – 20 years
4 – 25 years
2 – 20 years
3 – 20 years
(h) Leased Assets
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. We classify all other leases as
operating leases.
Webster Limited as lessee – Assets held under finance
leases are initially recognised at their fair value or, if lower,
at amounts equal to the present value of the minimum lease
payments, each determined at the inception of the lease.
The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges
and reduction of the lease obligation so as to achieve
a constant rate of interest on the remaining balance of
the liability. Finance charges are charged directly against
income, unless they are directly attributable to qualifying
assets, in which case they are capitalised in accordance
with Webster’s general policy on borrowing costs.
Finance lease assets are amortised on a straight-line basis
over the estimated useful life of the asset.
Operating lease payments are recognised as an expense
on a straight-line basis over the lease term, except where
another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset
are consumed.
Lease incentives – In the event that lease incentives are
received to enter into operating leases, such incentives are
recognised as a liability. The aggregate benefits of incentives
are recognised as a reduction of rental expense on a
straight-line basis, except where another systematic basis is
more representative of the time pattern in which economic
benefits from the leased asset are consumed.
Webster Limited as lessor – Purchased assets where
Webster Limited is a lessor under operating leases are
carried at cost and depreciated over their useful lives,
which vary depending on the class of assets. Operating
lease income is recognised on a straight-line basis over the
period of the lease unless another systematic basis is more
appropriate. Assets leased out under operating leases are
included in property, plant and equipment.
(i) Inventories
Inventories are valued at the lower of cost and net realisable
value except for walnut and cotton stocks which are
measured at fair value less estimated cost to sell at the point
of harvest, and subsequently net realisable value under
AASB 102 “Inventories”.
We account for costs incurred in bringing each product to
its present location and condition as follows:
We value walnut stocks in accordance with AASB
141 “Agriculture” whereby the cost of the non-living
(harvested)produce is deemed to be its fair value less
cost to sell immediately after it becomes non-living. This
valuation takes into account current walnut selling prices
and current processing and selling costs.
We value cotton stocks in accordance with AASB
141 “Agriculture” whereby the cost of the non-living
(harvested) produce is deemed to be its fair value less
cost to sell immediately after it becomes non-living. This
valuation takes into account current cotton selling prices
and current processing and selling costs.
We value livestock stock in accordance with AASB
141 “Agriculture” whereby its fair value less cost to
sell is determined by an independent valuation at
each reporting date. This value is then transferred into
inventory representing its cost.
Webster Limited – Annual Report 2016
29
Notes to the Financial Statements
For the financial year ended 30 June 2016
(j) Intangibles
Goodwill – We recognise goodwill arising in a business
combination as an asset at the date that control is acquired
(the acquisition date). Goodwill is measured as the excess of
the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of
the acquirer’s previously held equity interest in the acquiree
(if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Group’s interest in the fair value of
the acquiree’s identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquiree and the fair value of the acquirer’s
previously held equity interest in the acquiree (if any), the
excess is recognised immediately in profit or loss as a
bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at
least annually. For the purpose of impairment testing, we
allocate goodwill to each of Webster’s cash-generating units
expected to benefit from the synergies of the combination.
Cash-generating units to which goodwill has been allocated
are tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than
its carrying amount, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to
the unit and then to the other assets of the unit pro-rata on
the basis of the carrying amount of each asset in the unit.
An impairment loss recognised for goodwill is not reversed
in a subsequent period.
On disposal of a subsidiary, the attributable amount of
goodwill is included in the determination of the profit or loss
on disposal.
Contracts – We measure contracts at cost. After initial
recognition the asset is carried at cost less accumulated
amortisation and any accumulated impairment losses. We
amortise contracts on a straight-line basis over the term of
the contract.
Permanent water rights – We record permanent water
rights at cost. Such rights have an indefinite life, and are
not depreciated. As an integral component of the land
and irrigation infrastructure required to grow walnuts, the
carrying value is tested annually for impairment. If events or
changes in circumstances indicate impairment, the carrying
value is adjusted to take account of any impairment losses.
(k) Derivative Financial Instruments
Webster enters into a variety of derivative financial
instruments to manage our exposure to foreign exchange
rate risks and interest rate risk, including forward foreign
exchange contracts and interest rate swaps. Further details
of derivative financial instruments are disclosed in note 23
to the financial statements.
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The
resulting gain or loss is recognised in profit immediately,
unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the
recognition in profit and loss depends on the nature of
the hedge relationship.
Webster designates certain derivatives as hedges of highly
probable forecast transactions (cash flow hedges).
Cash flow hedge – The effective portion of changes in the
fair value of derivatives that are designated and qualify as
cash flow hedges is deferred in equity. The gain or loss
relating to the ineffective portion is recognised immediately
in profit and loss.
Amounts deferred in equity are recycled in profit and loss in
the period when the hedged item is recognised in profit or
loss. However, when the forecast transaction that is hedged
results in the recognition of a non-financial asset or non-
financial liability, the gains and losses previously deferred in
equity are transferred from equity and included in the initial
measurement of the cost of the asset or liability.
We discontinue hedge accounting when Webster Limited
revokes the hedging relationship, the hedge instrument
expires or is sold, terminated, or exercised, or no longer
qualifies for hedge accounting. Any cumulative gain or loss
at that time remains in equity and is recognised when the
forecast transaction is ultimately recognised in profit and
loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was deferred in
equity is recognised immediately in profit and loss. When
the Group revokes the hedging relationship, the hedge
instrument expires or is sold, terminated, or exercised, or
no longer qualifies for hedge accounting. Any cumulative
gain or loss at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in
profit or loss. When a forecast transaction is no longer
expected to occur, the cumulative gain or loss that was
deferred in equity is recognised immediately in profit or loss.
30
Derivatives that do not qualify for hedge accounting –
Certain derivative instruments do not qualify for hedge
accounting. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting are
recognised immediately in profit and loss.
(l) Employee Benefits
We recognise for benefits accruing to employees in respect
of wages and salaries, annual leave and long service leave
when it is probable that settlement will be required and they
are capable of being measured reliably.
We measure liabilities in respect of employee benefits
expected to be settled wholly within 12 months at their
nominal values using the remuneration rate expected to
apply at the time of settlement.
Liabilities recognised in respect of employee benefits
which are not expected to be settled within 12 months
are measured as the present value of the estimated future
cash outflows to be made by Webster Limited in respect of
services provided by employees up to reporting date.
Defined contribution plans – Contributions to defined
contribution superannuation plans are expensed when
incurred.
(m) Financial Assets
Investments are recognised and derecognised on trade date
where purchase or sale of an investment is under a contract
whose terms require delivery of the investment within the
timeframe established by the market concerned, and are
initially measured at fair value.
Subsequent to initial recognition, investments in subsidiaries
are measured at cost in the Company’s financial statements.
Effective interest method – The effective interest method is a
method of calculating the amortised cost of a financial asset
and of allocating interest income over the relevant period.
The effective interest rate is the rate that exactly discounts
estimated future cash receipts (including all fees on points
paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or
discounts) through the expected life of the financial asset or,
where appropriate, a shorter period.
We recognise income on an effective interest rate basis for
debt instruments other than those financial assets “at fair
value through profit or loss.”
Financial assets at fair value through profit or loss – We
classify financial assets as financial assets at fair value
through profit or loss where the financial asset:
has been acquired principally for the purpose of selling
in the near future;
is a part of an identified portfolio of financial instruments
that Webster manages together and has a recent actual
pattern of short-term profit-taking; or
is a derivative that is not designated and effective as a
hedging instrument.
Financial assets at fair value through profit or loss are stated
at fair value, with any resultant gain or loss recognised in
profit or loss. The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on the financial
asset. We determine fair value in the manner described in
note 24.
Loans and receivables – Trade receivables, loans, and
other receivables that have fixed or determinable payments
that are not quoted in an active market are classified as
“loans and receivables”. We record loans and receivables
at amortised cost using the effective interest method less
impairment. Interest is recognised by applying the effective
interest rate.
Impairment of financial assets – Financial assets, other than
those at fair value through profit and loss, are assessed
for indicators of impairment at each balance sheet date.
Financial assets are impaired where there is objective
evidence that as a result of one or more events that
occurred after the initial recognition of the financial asset
the estimated future cash flows of the investment have been
impacted. For financial assets carried at amortised cost, the
amount of impairment is the difference between the asset’s
carrying amount and the present value of estimated future
cash flows, discounted at the original effective interest rate.
The carrying amount of the financial asset is reduced by
the impairment loss directly for all financial assets with the
exception of trade receivables where the carrying amount
is reduced through the use of an allowance account. When
the trade receivable is uncollectable, it is written off against
the allowance account. We credit subsequent recoveries
of amounts previously written off against the allowance
account. Changes in the carrying amount of the allowance
account are recognised in profit and loss.
Webster Limited – Annual Report 2016
31
Notes to the Financial Statements
For the financial year ended 30 June 2016
If in a subsequent period the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment loss was recognised,
the previously recognised impairment loss is reversed
through profit and loss to the extent the carrying amount of
the investment at the date the impairment is reversed does
not exceed what the amortised cost would have been had
the impairment not been recognised.
(n) Financial Instruments
Debt and equity instruments – We classify debt and equity
instruments as either liabilities or as equity in accordance
with the substance of the contractual arrangement. An
equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. We record equity instruments issued by Webster
as the proceeds received, net of direct issue costs.
Financial guarantee contract liabilities – We measure
financial guarantee contract liabilities initially at their fair
value and subsequently at the higher of:
the amount of the obligation under the contract, as
determined under AASB 137 “Provisions, Contingent
Liabilities and Contingent Assets”; and
the amount initially recognised less, where appropriate,
cumulative amortisation in accordance with revenue
recognition policies described in note 1.5(b).
Financial liabilities – We classify financial liabilities as either
financial liabilities “at fair value through profit or loss” or
other financial liabilities.
Other financial liabilities – Other financial liabilities, including
borrowings, are initially measured at fair value, net of
transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest
method, with interest expense recognised on an effective
yield basis.
(o) Foreign Currency
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity’s
functional currency are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance
sheet date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the
balance date.
Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at
the rates prevailing on the date when the fair value was
determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the
period in which they arise except for:
exchange differences which relate to assets under
construction for future productive use are included in
the cost of those assets where they are regarded as
an adjustment to interest costs on foreign currency
borrowings;
exchange differences on transactions entered into in order
to hedge certain foreign currency risks (refer to note 1(k));
and
exchange differences on monetary items receivable from
or payable to a foreign operation for which settlement is
neither planned nor likely to occur, which form part of the
net investment in a foreign operation, are recognised in
the foreign currency translation reserve and recognised
in profit or loss on disposal of the net investment.
(p) Goods and Services Tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
where the amount of GST incurred is not recoverable
from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of
expense; or
for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables.
We include cash flows in the cash flow statement on a
gross basis. The GST component of cash flows arising from
investing and financing activities which is recoverable from,
or payable to, the taxation authority is classified as operating
cash flows.
32
(q) Income Tax
Webster Limited and its wholly-owned Australian resident
entities have elected to become a tax-consolidated group
with effect from 1 December 2010 and are therefore
taxed as a single entity from that date. The head entity
within the tax-consolidated group is Webster Limited. The
members of the tax-consolidated group are identified in
note 19. Tax expense/income, deferred tax liabilities and
deferred tax assets arising from temporary differences of
the members of the tax-consolidated group are recognised
in the separate financial statements of the members of the
tax-consolidated group using the “separate taxpayer within
group” approach by reference to the carrying amounts in
the separate financial statements of each entity and the tax
values applying under tax consolidation. Any current tax
liabilities, current assets and deferred tax assets arising from
unused tax losses and relevant tax credits of the members of
the tax-consolidated group are recognised by the Company
(as head entity in the tax-consolidated group).
The Directors intend to implement a tax sharing agreement
and tax funding agreement between members of the
tax-consolidated group. On the existence of a tax funding
arrangement between the entities in the tax-consolidated
group, amounts are recognised as payable to or receivable
by the Company and each member of the group in relation
to the tax contribution amounts paid or payable between the
parent entity and the other members of the tax-consolidated
group in accordance with the arrangement. Under the terms
of the tax funding arrangement, Webster Limited and each
of the entities in the tax-consolidated group will agree to pay
a tax equivalent payment to or from the head entity, based
on the current tax liability or current tax asset of the entity.
The tax sharing agreement will provide for the determination
of the allocation of income tax liabilities between the entities
should the head entity default on its tax payment obligations
or if an entity should leave the tax-consolidated group. The
effect of the tax sharing agreement is that each member’s
liability for tax payable by the tax-consolidated group is
limited to the amount payable to the head entity under the
tax funding arrangement.
Current tax – Current tax is calculated by reference to the
amount of income tax payable or recoverable in respect
of the taxable profit or tax loss for the period. We calculate
using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for
current and prior periods is recognised as a liability (or
asset) to the extent that it is unpaid (or refundable).
Deferred tax – We account for Deferred tax using the
balance sheet liability method. Temporary differences are
differences between the tax base of an asset or liability and
its carrying amount in the balance sheet. The tax base of
an asset or liability is the amount attributed to that asset or
liability for tax purposes.
In principle, deferred tax liabilities are recognised for all
taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient
taxable amounts will be available against which deductible
temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities
are not recognised if the temporary differences giving rise to
them arise from the initial recognition of assets and liabilities
(other than as a result of a business combination) that affects
neither taxable income nor accounting profit. Furthermore,
a deferred tax liability is not recognised in relation to taxable
temporary differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary
differences associated with investments in subsidiaries
except where Webster is able to control the reversal of the
temporary differences and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary
differences associated with these investments and interests
are only recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected
to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the periods when the
asset and liability giving rise to them are realised or settled,
based on tax rates (and tax laws) that have been enacted or
substantively enacted by reporting date. The measurement
of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which
Webster Limited expects, at the reporting date, to recover
or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and
Webster intends to settle its current tax assets and liabilities
on a net basis.
Current and deferred tax for the period – We recognise
current and deferred tax as an expense or income in the
income statement, except when it relates to items credited
or debited directly to equity, in which case the deferred tax
is also recognised directly in equity, or where it arises from
the initial accounting for a business combination, in which
case we take it into account in the determination of goodwill
or excess.
Webster Limited – Annual Report 2016
33
Notes to the Financial Statements
For the financial year ended 30 June 2016
(r) Investment Property
Investment property, which is property held to earn rentals
and/or for capital appreciation, is measured initially at its
cost, including transaction costs.
Subsequent to initial recognition, investment property is
carried at cost less accumulated depreciation and any
accumulated impairment losses.
(s) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) and, as a result of a past
event, it is probable that the Group will be required to settle
the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation
at reporting date, taking into account the risks and
uncertainties surrounding the obligation. Where a provision
is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value
of those cash flows.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a third
party, the receivable is recognised as an asset if it is virtually
certain that recovery will be received and the amount of the
receivable can be measured reliably.
(t) Government Grants
Government Grants are assistance by the government in the
form of transfers of resources to Webster Limited in return
for past or future compliance with certain conditions relating
to the operating activities.
Government Grants include government assistance
where there are no conditions specifically relating to the
operating activities of the consolidated entity other than the
requirement to operate in certain regions or industry sectors.
We recognise Government Grants relating to income as
income over the periods necessary to match them with
related costs. Government Grants that are receivable as
compensation for expenses or losses already incurred or for
the purpose of giving immediate financial support to Webster
with no future related costs are recognised as income of the
period in which they become receivable.
Government Grants whose primary condition is that Webster
Limited should purchase, construct or otherwise acquire
non-current assets are recognised as a reduction in the cost
of non-current assets in the statement of financial position.
(u) Business Combinations
We account for acquisitions of subsidiaries and businesses
using the acquisition method. We measure the consideration
for each acquisition at the aggregate of the fair values (at
the date of exchange) of assets given, liabilities incurred or
assumed, and equity instruments issued by Webster Limited
in exchange for control of the acquiree.
We recognise acquisition-related costs in profit or loss as
incurred.
Where applicable, the consideration for the acquisition
includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition
date fair value. We adjust subsequent changes in such fair
values against the cost of acquisition where they qualify
as measurement period adjustments (see below). All
other subsequent changes in the fair value of contingent
consideration classified as an asset or liability are accounted
for in accordance with relevant Standards. Changes in the
fair value of contingent consideration classified as equity are
not recognised.
Where a business combination is achieved in stages, we
measure Webster Limited’s previously held interests in the
acquired entity to fair value at the acquisition date (that is
the date Webster attains control) and recognise the resulting
gain or loss, if any. Amounts arising from interests in the
acquiree prior to the acquisition date that have previously
been recognised in other comprehensive income are
reclassified to profit or loss, where such treatment would be
appropriate if that interest were disposed of. The acquiree’s
identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under AASB 3
are recognised at their fair value at the acquisition date,
except that:
deferred tax assets or liabilities and liabilities or assets
related to employee benefit arrangements are recognised
and measured in accordance with AASB 112 “Income
Taxes” and AASB 119 “Employee Benefits” respectively;
liabilities or equity instruments related to the replacement
by the Group of an acquiree’s share-based payment
awards are measured in accordance with AASB 2
“Share-based Payment”; and
assets (or disposal groups) that are classified as held for
sale in accordance with AASB 5 “Non-current Assets
Held for Sale and Discontinued Operations” are measured
in accordance with that Standard.
34
However, to the extent that it is impracticable to determine
either:
(a) the period-specific effects of an error on comparative
information for one or more prior periods presented,
the entity shall restate the opening balances of assets,
liabilities and equity for the earliest period for which
retrospective restatement is practicable (which may be
the current period); or
(b) the cumulative effect, at the beginning of the current
period, of an error on all prior periods, the entity shall
restate the comparative information to correct the error
prospectively from the earliest date practicable. The
correction of a prior period error is excluded from profit or
loss for the period in which the error is discovered. Any
information presented about prior periods, including any
historical summaries of financial data, is restated as far
back as is practicable.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
combination occurs, Webster Limited reports provisional
amounts for the items for which the accounting is
incomplete. We adjust those provisional amounts during
the measurement period (see below), or additional assets or
liabilities are recognised, to reflect new information obtained
about facts and circumstances that existed as of the
acquisition date that, if known, would have affected the
amounts recognised as of that date.
The measurement period is the period from the date
of acquisition to the date the Group obtains complete
information about facts and circumstances that existed
as of the acquisition date – and is subject to a maximum
of one year.
(v) Share-based payments
We measure equity-settled share-based payments to
employees at the fair value of the equity instruments at
the issue date. Fair value is measured by use of a Black-
Scholes pricing model taking into account the terms and
conditions upon which the equity-settled share-based
payments were granted. The fair value determined at the
issue date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period,
with a corresponding increase in equity. At the end of
each reporting period, the Group revises its estimate of the
number of equity instruments expected to vest. The impact
of the revision of the original estimates, if any, is recognised
in profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the
equity-settled employee benefits reserve.
(w) Material prior period errors
Material prior period errors shall be retrospectively corrected
in the first financial statements authorised for issue after
their discovery by:
(a) restating the comparative amounts for the prior period(s)
presented in which the error occurred; or
(b) if the error occurred before the earliest prior period
presented, restating the opening balances of assets,
liabilities and equity for the earliest prior period
presented.
Webster Limited – Annual Report 2016
35
Notes to the Financial Statements
For the financial year ended 30 June 2016
1.6 Significant items
Profit (Loss) before tax expense includes the following specific expenses for which disclosure is relevant in explaining the
financial performance of Webster Limited:
Impairment of goodwill
2016
$’000
2015
$’000
$96,450
–
The impairment was recognised as a result of the acquisitions of Bengerang Limited and Tandou Limited. The offer for
Bengerang Limited and Tandou Limited was based on independent valuations of the assets and liabilities. Based on these
valuations the Webster Limited bid was announced to the market on 27 February 2015.
The bid was approved at an Extraordinary General Meeting on 25 May 2015. The share price of Webster Limited increased
during the period of announcing the bids to market through until the date of acquiring control being 29 May 2015.
In accordance with AASB 3 “Business Combinations”, the consideration paid for the acquisitions was calculated by reference
to the quoted share price of Webster Limited at the date of control, multiplied by the number of shares issued. The value of
the consideration was greater than the fair value of the assets and liabilities acquired, as a result goodwill on acquisition was
generated.
The goodwill arising on acquisition was:
Bengerang goodwill
Tandou goodwill
Total goodwill
$’000
$90,072
$30,968
$121,040
In accordance with AASB 136 “Impairment of Assets”, the goodwill generated was allocated to Cash-Generating Units (CGUs)
and tested for impairment using updated Directors’ valuations of assets and liabilities during the year.
The recoverable amount of both CGUs is the greater of value in use and their fair value less costs of disposal: where fair value
less costs of disposal has been calculated based on a Directors’ Valuation. The Directors have made their valuation with
reference to external valuation assessments, making it a Level 3 valuation within the fair value hierarchy prescribed by AASB 13
“Fair Value Measurement”.
The external valuation assessments are based on comparable market transactions for other properties and water rights; and
other items such as property, plant and equipment and working capital are based on current book values which are deemed
to represent fair value.
The result from testing the CGUs for impairment during the year was to fully impair the $90.072 million of Bengerang goodwill
and impair $6.379 million of Tandou goodwill having consideration for the synergies, benefits and increasing value of water
rights acquired as part of the acquisition.
36
2 Profit/(Loss) from Operations
Profit from operations before income tax includes the following items of revenue and expense:
(a) Revenue
Revenue from the sale of goods
Revenue from the rendering of services
lnterest revenue
Rental revenue
Total revenue
(b) Other Income
Gain on disposal of permanent water rights and PPE
Increment in net market value of agricultural assets
Net foreign exchange gains/(loss)
Net income from sales of unused water allocations
Other
Total other income
(c) Expenses
Cost of sales
Interest on loans
Dividends on instruments classified as financial liabilities
Other finance costs
Total finance costs
Depreciation of non-current assets
Amortisation of non-current assets
Total depreciation and amortisation
Equity-settled share-based payments
Post-employment benefits
Other employee benefits
Total employee benefits expense
Research and development costs immediately expensed
Operating lease rental expense
2016
$’000
2015
$’000
119,782
48,803
7,937
9,269
97
565
204
44
128,381
58,320
3,550
29
49,039
16,537
(15)
2,415
4,517
177
–
2,440
59,506
19,183
91,655
37,843
6,533
3,154
32
362
35
94
6,927
3,283
7,505
4,210
483
216
7,988
4,426
201
222
1,512
1,024
15,914
10,263
17,627
11,509
–
17
450
524
Webster Limited – Annual Report 2016
37
Notes to the Financial Statements
For the financial year ended 30 June 2016
3 Income Taxes
(a) Income tax recognised in profit or loss
Tax expense comprises:
Current tax expense
Adjustments recognised in the current year in relation to the current tax of prior years
Deferred tax expense relating to the origination and reversal of temporary differences
Other
Tax attributable to discontinued operations
Total tax (credit)/expense (relating to continuing operations)
The prima facie income tax expense on pre-tax accounting (loss)/profit from
operations reconciles to income tax expense in the financial statements as follows:
(Loss)/profit from continuing operations
(Loss)/profit from discontinued operations
Total (loss)/profit from operations
Income tax expense calculated at 30%
Non-deductible expenses
Restatement of tax costs of assets
Non-assessable gain
Derecognition of deferred tax asset
(Over)/under provision of income tax in previous year
Tax attributable to discontinued operations
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by
Australian corporate entities on taxable profits under Australian tax law. There has been
no change in the corporate tax rate when compared with the previous reporting period.
(b) Income tax recognised directly in other comprehensive income
Deferred tax:
Revaluation of financial instruments treated as cash flow hedges
(c) Current tax payable:
Income tax attributable:
Parent entity
Entities in the tax consolidated group
Other
38
2016
$’000
2015
$’000
1,038
–
(1,922)
–
–
(885)
(267)
–
(495)
73
1,007
318
(81,554)
8,568
–
(3,497)
(81,554)
(24,466)
28,781
5,071
1,521
(310)
(5,557)
(1,740)
(453)
204
607
–
–
(160)
–
1,007
(885)
318
–
–
(263)
(263)
–
(1,038)
–
(1,038)
349
(699)
350
–
Opening
balance
$’000
Charged
to income
$’000
Charged
to equity
$’000
Acquisitions
/disposals
$’000
Closing
balance
$’000
(d) Deferred tax assets and liabilities
2016
Deferred tax assets:
Provisions
Financial assets – receivables
Other
Unused tax losses
Deferred tax liabilities:
Property, plant and equipment
Financial assets – non-receivables
Inventory and biological assets
Other
2015
Deferred tax assets:
Provisions
Financial assets – receivables
Other
Unused tax losses
Deferred tax liabilities:
574
586
4,314
7,402
12,876
(22,662)
(46)
(10,641)
(898)
(34,247)
(21,371)
250
491
246
1,599
2,586
372
(586)
(3,582)
3,815
19
8,311
46
(7,740)
888
1,505
1,524
118
95
1,581
3,045
4,839
Property, plant and equipment
(4,673)
(2,367)
Financial assets – non-receivables
Inventory and biological assets
Other
(35)
(1,945)
(103)
(6,756)
(4,170)
(26)
(1,962)
11
(4,344)
495
–
–
–
–
–
–
–
–
–
–
–
182
–
4
–
186
–
15
–
48
63
249
–
–
–
–
–
–
–
–
–
–
–
946
–
732
11,217
12,895
(14,351)
–
(18,381)
(10)
(32,742)
(19,847)
24
–
2,483
2,758
5,265
574
586
4,314
7,402
12,876
(15,622)
(22,662)
–
(6,734)
(854)
(23,210)
(17,105)
(46)
(10,641)
(898)
(34,247)
(21,371)
Webster Limited – Annual Report 2015-16
39
Notes to the Financial Statements
For the financial year ended 30 June 2016
4 Remuneration of Auditors
Auditor of the parent entity
Audit or review of the financial report
Taxation services
Other services
Auditor of the subsidiary companies
Tandou Limited (PricewaterhouseCoopers)
Bengerang Limited (2016: Deloitte Touche Tohmatsu; 2015: Ernst and Young)
2016
$
2015
$
382,000
227,910
47,985
205,523
72,015
12,155
502,000
445,588
–
121,100
30,000
48,932
The auditor of Webster Limited is Deloitte Touche Tohmatsu.
Other services include services relating to AGW Funds Management Limited, and LTIP and general advice.
40
5 Trade and Other Receivables
Current
Trade receivables
Goods and services tax (GST) recoverable
The average credit period on sales of goods of the operating divisions within the Company is 60 days.
Non-current
Trade receivables
Allowance for doubtful debts
Ageing of past due but not impaired
61 – 90 days
91 – 120 days
121 + days
Total
Movement in allowance for doubtful debts
Balance at the beginning of the year
Impairment losses recognised on receivables
Amounts written off as uncollectable
Balance at the end of the year
Ageing of impaired
61 – 90 days
91 – 120 days
121 + days
Total
2016
$’000
2015
$’000
25,287
34,062
248
681
25,535
34,743
2,965
(2,213)
4,398
(2,084)
752
2,314
69
55
907
1,031
256
159
2,434
2,849
(2,084)
(1,605)
(129)
–
(798)
319
(2,213)
(2,084)
–
–
–
–
2,213
2,213
2,084
2,084
In determining the recoverability of a trade receivable, the consolidated entity considers any change in the credit quality of the
trade receivables from the date credit was initially granted up to the reporting date. The Group has recognised an allowance for
doubtful debts against receivables from Managed Investment Scheme (MIS) growers, the majority of which relates to bankrupt
scheme participants. The non-current trade receivable balance relates to fees owing from MIS investors.
Webster Limited – Annual Report 2016
41
Notes to the Financial Statements
For the financial year ended 30 June 2016
6 Other Financial Assets
Current
At fair value
Foreign currency forward contracts
7 Inventories
Raw materials
Raw materials at cost
Walnut stocks
Walnut stocks at cost
Cropping stocks
Cropping stocks at fair value
Cropping stocks at cost
Livestock
Livestock at cost
Onion stocks
Onion stocks at cost
42
2016
$’000
2015
$’000
–
–
53
53
2016
$’000
2015
$’000
2,811
3,067
9,091
14,816
7,275
5,999
31,706
50,603
9,470
6,780
–
187
60,353
81,452
8 Other Assets
Prepayments
Development Funding Due
2016
$’000
2015
$’000
500
2,229
7,723
–
8,223
2,229
The consolidated entity has entered into several On Farm Irrigation Efficiency Programs (OFIEP), with the Commonwealth of
Australia and its representatives in relation to the OFIEP pursuant to which funding will be provided to improve the efficiency of
irrigation systems on its properties in return for the permanent assignment of selected Water Access Entitlements. Development
Funding Due represents the value of outstanding development works to be undertaken equal to the value of the Permanent
Water Entitlements assigned.
9 Property, Plant and Equipment
Land
improvements Buildings
Leasehold
improvements
at cost
Plant and
equipment
at cost
Equipment
under
finance
lease at cost
($’000)
($’000)
($’000)
($’000)
($’000)
Freehold
land
($’000)
Total
($’000)
Gross carrying amount
Balance at 1 July 2014
7,409
–
15,418
698
42,312
706
66,543
Acquisitions through
business combinations
Additions
Disposals
Reclassification of assets
81,227
48,286
17,568
280
20,512
1,212
169,086
–
(244)
–
106
645
–
9,700
428
10,879
–
–
(4,611)
–
(672)
(26)
(8,230)
(122)
(13,879)
26
–
–
Balance at 30 June 2015
88,392
48,392
29,020
306
64,294
2,224
232,629
Accumulated depreciation/amortisation and impairment
Balance at 1 July 2014
Disposals
Depreciation expense
Reclassification of assets
Balance at 30 June 2015
Net book value
–
–
–
–
–
–
–
(29)
–
(29)
(870)
500
(455)
–
(825)
(209)
(14,289)
(392)
(15,760)
207
4,704
(3,714)
(26)
(50)
26
(52)
73
(49)
–
5,484
(4,297)
–
(13,299)
(368)
(14,573)
As at 30 June 2014
7,409
–
14,548
489
28,023
314
50,783
As at 30 June 2015
88,392
48,363
28,195
254
50,995
1,856
218,055
Webster Limited – Annual Report 2016
43
Notes to the Financial Statements
For the financial year ended 30 June 2016
9 Property, Plant and Equipment (continued)
Land
improvements Buildings
Leasehold
improvements
at cost
Plant and
equipment
at cost
Equipment
under
finance
lease at cost
($’000)
($’000)
($’000)
($’000)
($’000)
Freehold
land
($’000)
Total
($’000)
Gross carrying amount
Business disposal
–
–
–
–
–
–
–
Balance at 1 July 2015
88,392
48,392
29,020
306
64,294
2,225
232,629
Additions
Disposals
10,383
(3,652)
7,829
–
567
(963)
134
9,463
880
29,256
–
(993)
(1,509)
(7,117)
Reclassification of assets (i)
28,549
(28,109)
8,007
(440)
(8,007)
–
–
Balance at 30 June 2016
123,672
28,112
36,631
–
64,757
1,596
254,768
Accumulated
depreciation/amortisation
and impairment
Balance at 1 July 2015
Depreciation expense
Disposal
Reclassification of assets
Balance at 30 June 2016
Net book value
–
–
–
–
–
(29)
(825)
(52)
(13,299)
(368)
(14,573)
(798)
(1,188)
–
–
–
–
(827)
(2,013)
–
52
–
–
(5,519)
–
(7,505)
(26)
–
801
–
827
–
(18,844)
433
(21,251)
As at 30 June 2015
88,392
48,363
28,195
254
50,995
1,856
218,055
As at 30 June 2016
123,672
27,285
34,618
–
45,913
2,029
233,517
(i) Reclassification of assets represents the transfer of the cotton gin building from plant and equipment prior to classification. Upon acquisition of
Tandou, management of the Group reclassified a group of assets from property improvements to land.
44
10 Biological Assets
The consolidated entity as part of its operations grows, harvests, processes and sells walnuts, cotton, crops and livestock. As
at 30 June 2016 the consolidated entity owned a total of 1,995 hectares (2015: 1,995 hectares) of walnut orchards located in
New South Wales and Tasmania. Of the total orchard area owned, 701 hectares (2015: 750 hectares) were leased to growers
under Managed Investment Schemes, with the output of agricultural product of these hectares being the property of the MIS
growers. During the year ended 30 June 2016 a total of 4,812 tonnes (2015: 5,835 tonnes) of walnuts were harvested from
all orchards, including 2,623 tonnes (2015: 2,754 tonnes) from orchards leased to MIS growers. As at 30 June 2016, the
consolidated entity owned a total of 37,715 hectares of irrigated cropping land (2015: 35,065) located in New South Wales
and Queensland.
(a) Non-current
Walnut orchards
(b) Reconciliation of changes in the carrying amount of Biological Assets
Carrying value at the beginning of the financial year
Purchases
Carrying value at the end of the financial year
2016
$’000
2015
$’000
43,642
35,688
43,642
35,688
35,688
33,964
7,954
1,724
43,642
35,688
(c) Fair Value
The fair values of non-current biological assets have been determined in accordance with generally accepted pricing models
based on a discounted cash flow analysis. The following table provides an analysis of non-current biological assets measured
at fair value based on the degree to which the fair value is observable.
Fair value hierarchy
Fair value as at:
Fair value
hierarchy
Valuation technique
30/06/16
$’000
Biological Assets
43,642
30/06/15
$’000
35,688
Level 2
Discounted cash flow
based on observable
market prices and cost
inputs. Refer to note 1.5e
for further details on
valuation technique.
(d) Biological assets pledged as security
Refer to note 13 for information on biological assets pledged as security by the parent entity or its subsidiaries.
(e) Financial risk management
The consolidated entity is exposed to financial risk associated with movements in exchange rates as walnut export sales are
undertaken in foreign currencies. The consolidated entity has an active foreign exchange policy and enters into derivative
instruments in line with its foreign exchange policy to help manage this risk.
Webster Limited – Annual Report 2016
45
Notes to the Financial Statements
For the financial year ended 30 June 2016
11 Intangibles
Goodwill
$’000
Licences
$’000
Contracts
$’000
Permanent
Water
Rights
$’000
Total
$’000
Net book value
Balance at 1 July 2014
Amortisation expense
Amounts recognised on sale of business
397
–
(286)
Additional amounts recognised during the year
121,039
100
2,069
2,848
5,414
–
–
–
(125)
–
–
–
–
(125)
(286)
228,893
349,932
Balance at 30 June 2015
Amortisation expense
Impairment
Additions
Disposals
121,150
100
1,944
231,741
354,935
–
(96,450)
–
–
–
–
–
–
(125)
–
–
–
–
–
(125)
(96,450)
19,904
19,904
(11,195)
(11,195)
Balance at 30 June 2016
24,700
100
1,819
240,450
267,069
(a) Impairment test for goodwill
Goodwill amounts recognised arose from the purchase of Bengerang Limited and Tandou Limited. The carrying value of goodwill
represents, in part, the excess of the market value of the Permanent Water Rights over the cost value of the Permanent Water
Rights. The goodwill value has been tested in accordance with generally accepted pricing models based on a discounted cash
flow analysis.
(b) Licences
Licences are measured at cost and tested for impairment on an annual basis.
(c) Contracts
Contracts are measured at cost and amortised on a straight-line basis over the term of the contract.
(d) Permanent Water Rights
The value of Permanent Water Rights is an integral part of land and irrigation infrastructure required to grow both walnuts and
annual crops. The fair value of permanent water rights used for impairment testing is supported by the tradeable market value,
which at current market prices is higher than the carrying value.
46
12 Trade and Other Payables
Current
Trade payables
Goods and services tax (GST) payable
2016
($’000)
2015
($’000)
12,794
24,196
2,437
2,284
15,231
26,480
The average credit period on purchases is 30 days. Interest is charged on a creditor by creditor basis. The consolidated entity
has financial risk management policies in place to ensure that all payables are paid within the credit time frame.
13 Borrowings
(a) Current
At amortised cost
Secured
Bank loans
Finance lease liabilities
(b) Non-current
At amortised cost
Secured
Bank loans
Finance lease liabilities
Unsecured
Non-redeemable cumulative preference shares
(i) Secured by mortgage over property and floating charge over assets, the value of which exceeds the loan.
(ii) Secured by assets leased, the value of which exceeds the lease liability.
(iii) 394,000 9% non-redeemable cumulative preference shares at a par value of $1.00 per share.
Note
2016
$’000
2015
$’000
(i)
(ii)
43,887
46,110
807
881
44,694
46,991
150,000
148,480
(ii)
1,863
869
(iii)
394
394
152,257
149,743
Webster Limited – Annual Report 2016
47
Notes to the Financial Statements
For the financial year ended 30 June 2016
14 Other Financial Liabilities
Current
At fair value
Foreign currency forward contracts
15 Provisions
(a) Current
Employee benefits
Export sales rebates
(b) Non-current
Employee benefits
(c) Movements in provisions
Balance at beginning of financial year
Additional provision recognised
Reductions arising from payments/other sacrifices of future economic benefits
Balance at end of financial year
2016
$’000
2015
$’000
–
–
620
620
2016
$’000
2015
$’000
1,296
1,569
–
930
1,296
2,499
374
159
2,658
–
(988)
1,449
1,209
–
1,670
2,658
48
16 Issued Capital
350,745,163 (2015: 347,705,383) fully paid ordinary shares
Note
2016
$’000
2015
$’000
(i)
462,844
459,468
462,844
459,468
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from
1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a
par value.
2016
2015
Note
Number
$’000
Number
$’000
(i) Fully paid ordinary share capital
Balance at beginning of financial year
347,705,383
459,468 137,987,365
73,458
Shares issued
(i)
3,039,780
3,376 209,718,018
386,010
Balance at end of financial year
350,745,163
462,844 347,705,383
459,468
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
(i) Share capital issued during the financial year
3,039,780 ordinary shares were issued on August 2015, resulting from the successful takeover bid for Tandou Limited.
17 (Loss)/Earnings per Share
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
Includes goodwill impairment in 2016
Cents per share
Note
2016
2015
(a)
(b)
(23.28)
(23.28)
3.70
3.61
(a) Basic (loss)/earnings per share
The earnings and weighted average number of ordinary shares used in the calculation of basic (loss)/earnings per share are
as follows:
Earnings used in the calculation of basic (loss)/earnings per share
(80,669)
8,250
Weighted average number of ordinary shares for the purposes of
basic (loss)/earnings per share
346,510,396 155,452,035
2016
$’000
2015
$’000
2016
2015
Webster Limited – Annual Report 2016
49
Notes to the Financial Statements
For the financial year ended 30 June 2016
17 (Loss)/Earnings per Share (continued)
(b) Diluted (loss)/earnings per share
The earnings and weighted average number of ordinary and potential ordinary shares used in the calculation of diluted (loss)/
earnings per share are as follows:
Earnings used in the calculation of diluted (loss)/earnings per share
(80,669)
8,250
Weighted average number of ordinary and potential ordinary
shares for the purpose of diluted (loss)/earnings per share
346,510,396 159,312,035
2016
$’000
2015
$’000
2016
2015
18 Dividends
(a) Dividends paid during the year
Fully paid ordinary shares
Final dividend – FY2015 paid October 2015,
(FY2014 paid October 2014)
2016
2015
Cents per
share
Total
$’000
Cents per
share
Total
$’000
1.0
3,438
2.0
2,683
3,438
2,683
(b) Dividends proposed
The Directors have declared a fully franked 1.0 cent per share final dividend on ordinary shares, payable on 28 October 2016.
The record date for determining entitlement to the ordinary dividend is 7 October 2016. The Directors have also declared a
franked 4.5 cent per share dividend on cumulative preference shares payable on 30 September 2016. The record date for
determining entitlement is 16 September 2016.
(c) Franking credits balance
Franking account balance at 1 July
Tax paid/(refunded)
Dividends paid
Net franking credits available at 30 June
Impact on franking account balance of dividends not recognised
2016
$’000
2015
$’000
2,908
2,798
(124)
(1,503)
1,281
1,348
(1,238)
2,908
(1,503)
(1,503)
50
19 Subsidiaries
Parent Entity
Webster Limited
Controlled Entities
Clements and Marshall Consolidated Limited
Cygnet Canning Company Pty Limited
Clements and Marshall Pty Limited
Field Fresh Tasmania Partnership
AGW Finance Pty Limited
AGW Walnuts Pty Limited
Walnuts Australia Pty Limited
AGW Funds Management Limited
Bengerang Limited
Tandou Limited
Note
Country of
Incorporation
Ownership Interest
2016
(%)
2015
(%)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(i)
(i)
(i)
(i)
(i)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
97
The above entities are audited by Deloitte Touche Tohmatsu.
All entities carry on business in Australia.
(i) These wholly-owned controlled entities have obtained approval under the ASIC Class Order granting relief from the requirement to produce audited
financial reports and are party to a cross guarantee.
The parent entity has entered into a range of cross guarantees and registered mortgage debentures over assets and capital of Webster Limited, which
include the above entities other than AGW Funds Management Limited, under its banking arrangements with National Australia Bank.
Webster Limited – Annual Report 2016
51
Notes to the Financial Statements
For the financial year ended 30 June 2016
19 Subsidiaries (continued)
(a) Financial performance
The following statement of financial performance represents the consolidated financial performance of entities which are
party to the deed of cross guarantee. AGW Funds Management Limited, Clements and Marshall Pty Limited, Clements and
Marshall Consolidated Limited, Cygnet Canning Company Pty Limited and AGW Finance Pty Limited are not parties to the
cross guarantee.
Revenue
Cost of sales
Gross Profit
Other income
Acquisition expenses
Distribution expenses
Marketing expenses
Operational expenses
Administration expenses
Finance costs
Impairment of goodwill
Other expenses
Profit before income tax expense
Income tax (expense)/benefit
Net profit for the period
Discontinued operations
Loss for the period from discontinued operations
Profit/(loss) for the period
Other comprehensive income, net of income tax
Gain/(loss) on cash flow hedges taken to equity
Other comprehensive gain/(loss) for the period (net of tax)
Total comprehensive income for the period
2016
$’000
2015
$’000
120,648
43,168
(91,655)
(23,348)
28,993
19,820
59,036
7,134
–
(3,902)
(671)
(3,934)
(1,927)
(584)
(55,293)
(2,988)
(5,856)
(6,927)
(96,450)
(6,912)
(3,130)
–
(261)
(289)
(81,332)
7,190
1,070
(85)
(80,262)
7,104
–
(2,491)
(80,262)
4,613
–
–
(612)
(612)
(80,262)
4,001
52
(b) Financial position
The following statement of financial position represents the consolidated financial performance of entities which are party to
the deed of cross guarantee. AGW Funds Management Limited, Clements and Marshall Pty Limited, Clements and Marshall
Consolidated Limited, Cygnet Canning Company Pty Limited and AGW Finance Pty Limited are not parties to the cross guarantee.
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other assets
Total current assets
Non-current Assets
Trade and other receivables
Property, plant and equipment
Biological Assets
Investment property
Investments
Intangibles – water
Intangibles – goodwill
Intangibles – other
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Current tax liability
Other financial liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
2016
$’000
2015
$’000
8,744
13,718
20,977
79,337
–
122
60,353
45,301
8,223
1,559
98,297
140,037
752
2,314
233,517
101,601
43,642
35,688
–
–
52
166,650
240,450
122,557
24,700
92,143
1,919
2,044
545,032
522,997
643,329
663,034
9,025
16,065
44,694
34,491
1,021
–
–
620
1,296
1,806
56,036
52,982
152,257
119,743
19,847
374
802
97
172,478
120,642
228,514
173,624
414,815
489,409
462,794
459,468
371
(29)
(48,350)
29,970
414,815
489,409
Webster Limited – Annual Report 2016
53
Notes to the Financial Statements
For the financial year ended 30 June 2016
20 Commitments for Expenditure
(a) Lease commitments
Non-cancellable operating leases
Not longer than one year
Longer than one year and not longer than five years
Finance lease liabilities
Not longer than one year
Longer than one year and not longer than five years
Minimum lease payments
Less: Future finance charges
Less: Goods and services tax (GST)
Finance lease liabilities
Present value of minimum future lease payments:
Not longer than one year
Longer than one year and not longer than five years
Included in the financial statements as:
Current interest bearing liabilities
Non-current interest bearing liabilities
(i) Operating lease commitments relate to properties and equipment with lease terms of up to 10 years.
(ii) Finance lease liabilities relate to various plant and equipment with lease terms of up to five years.
(b) Capital expenditure commitments
Not longer than one year
Longer than one year and not longer than five years
Longer than five years
Note
2016
$’000
2015
$’000
(i)
(ii)
130
227
357
759
718
1,477
807
1,015
1,863
2,670
(139)
(218)
982
1,997
(124)
(123)
2,313
1,750
699
1,614
2,313
699
1,614
2,313
881
869
1,750
881
869
1,750
16,721
11,810
–
–
–
–
16,721
11,810
54
21 Segment Information
(a) Segments
Following the purchase of the Kooba Ag assets and the acquisition of Bengerang Limited and Tandou Limited, the Group
manages and reports its business operations under two main reportable segments, Agriculture and Horticulture. The Agriculture
segment products are primarily annual row crops including cotton, wheat and maize as well as livestock, whereas the
Horticulture segment pertains to tree crops which are primarily walnuts.
(b) Segment revenue and results
The following is an analysis of the Group’s revenue and results from continuing operations by reportable segment.
Agriculture
Horticulture
Total for continuing operations
Unallocated income
Corporate and Directors’ costs
Finance costs
Acquisition costs
Profit/(loss) before tax (continuing operations)
Segment Revenue
Segment Results
2016
$’000
2015
$’000
2016
$’000
2015
$’000
147,935
26,442
(71,628)
5,194
39,856
50,961
2,202
13,661
187,791
77,403
(69,426)
18,855
97
204
(5,298)
(6,927)
–
(3,170)
(3,283)
(3,934)
(81,554)
8,568
Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales
in the current year (2015: Nil).
The accounting policies of the reportable segments are the same as the Group’s accounting policies.
Webster Limited – Annual Report 2016
55
Notes to the Financial Statements
For the financial year ended 30 June 2016
21 Segment Information (continued)
(c) Segments assets and liabilities
Assets
Agriculture
Horticulture
Total segment assets
Unallocated
Consolidated total assets
Liabilities
Agriculture
Horticulture
Total segment liabilities
Unallocated
Consolidated total liabilities
2016
$’000
2015
$’000
520,850
579,714
120,423
153,760
641,273
733,474
10,320
15,480
651,593
748,954
23,827
22,005
6,085
20,505
29,912
42,510
204,825
205,353
234,737
247,863
(d) Information on geographical areas
The consolidated entity’s goods are sold in both domestic and international markets. The following table details the consolidated
entity’s revenues from continuing operations and non-current assets by geographical location.
Revenue from
Customers
Non-current
Assets
2016
$’000
2015
$’000
2016
$’000
2015
$’000
174,659
51,790
545,032
613,251
10,909
19,622
2,223
5,991
–
–
–
–
187,791
77,403
545,032
613,251
Australia
Europe
Other
56
22 Notes to the Cash Flow Statement
(a) Reconciliation of cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents includes cash on hand
and in banks and investments in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents at the end of the financial year as shown in the cash flow statement
is reconciled to the related items in the balance sheet as follows:
Cash and cash equivalents
2016
$’000
2015
$’000
12,450
17,226
12,450
17,226
As at 30 June 2016 $4,981,394 of cash and cash equivalents is classified as restricted cash in relation to government funded
development.
(b) Non-cash financing and investing activities
During the financial year, the consolidated entity acquired equipment via finance leases to the value of $428,000 (2015: Nil).
(c) Financing facilities
Secured bank loan rolling facilities
– Amount used
– Amount unused
(d) Cash balances not available for use
There were no cash balances unavailable for use at balance date.
(e) Reconciliation of profit for the period to net cash flows from operating activities
Profit/(loss) for the period
Depreciation of non-current assets
Amortisation of non-current assets
Adjustments relating to agricultural/biological assets
Repayment of foreign exchange forward contract
Net profit on sale of non-current assets
Profit on the sale of water rights
Impairment of goodwill
Interest income received or receivable
Debt instrument dividends paid
Movements in working capital
– Decrease/(increase) in receivables
– Decrease/(increase) in inventories
– Decrease/(increase) in other assets
–
–
–
Increase/(decrease) in payables
Increase/(decrease) in provisions
Increase/(decrease) in tax balances
Net cash flows from/(used) in operating activities
193,887
194,590
56,113
51,410
250,000
246,000
(80,669)
7,505
483
5,759
4,426
–
(49,039)
(16,537)
400
(52)
(3,498)
96,450
(97)
–
10,770
70,138
1,729
(11,713)
50
(2,144)
40,313
–
(448)
–
–
(206)
–
2,971
175
–
4,474
(662)
(1,526)
(1,572)
Webster Limited – Annual Report 2016
57
Notes to the Financial Statements
For the financial year ended 30 June 2016
23 Financial Instruments
(a) Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance.
The Group’s overall strategy remains unchanged from 30 June 2015.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 14, cash and cash
equivalents and equity attributable to equity holders of the parent, comprising issued capital as disclosed in note 17, reserves
and retained profits.
The Group operates globally, primarily through subsidiary companies established in the markets in which the Group trades.
None of the Group’s entities are subject to externally imposed capital requirements.
Gearing ratio
The Group’s Board of Directors reviews the capital structure on an annual basis. As a part of this review the committee
considers the cost of capital and the risk associated with each class of capital. The Board of Directors of the Group in
considering its overall capital structure takes into account the payment of dividends, new share issues as well as the issue
of new debt or the redemption of existing debt.
The gearing ratio at year end was as follows:
Debt
Cash and cash equivalents
Net debt
Equity
Net debt to equity ratio
(i) Debt is defined as long- and short-term borrowings, as detailed in note 13.
(ii) Equity includes all capital and reserves.
(b) Categories of financial instruments
Financial assets
Derivative instrument in designated hedge accounting relationships
Cash and cash equivalents
Loans and receivables
Financial liabilities
Derivative instrument in designated hedge accounting relationships
Trade and other payables
Borrowings
Note
2016
($’000)
2015
($’000)
(i)
196,951
196,734
(12,450)
(17,226)
184,501
179,508
(ii)
418,018
497,251
44%
36%
–
53
12,450
17,226
26,287
37,057
–
620
15,231
27,410
196,951
196,734
58
(c) Financial risk management objectives
The Group’s key management personnel co-ordinate access to domestic and international financial markets and manage the
financial risks relating to the operations of the consolidated entity.
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
The Group enters into forward foreign exchange contracts to hedge the exchange rate risks arising on the export of produce to
Europe and Asia.
(d) Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group enters
into derivative financial instruments to manage its exposure to foreign currency risk, including:
forward foreign exchange contracts to hedge the exchange rate risk arising on the sales or export.
There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and
measured.
(e) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposure to exchange rate fluctuations
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts
and currency swap agreements. The Group’s exposure to foreign currency risk at balance date was as follows, based on
notional amounts:
Trade and other receivables
Cash at bank
Trade and other payables
Provisions
Net exposure
Trade and other receivables
Cash at bank
Trade and other payables
Provisions
Net exposure
2016
USD
($’000)
EUR
($’000)
GBP
($’000)
JPY
($’000)
2,770
2,483
447
880
–
–
–
–
3,216
3,362
–
1
–
–
1
–
5
–
–
5
2015
USD
($’000)
EUR
($’000)
GBP
($’000)
JPY
($’000)
6,883
7,064
739
947
2,449
(1,053)
–
390
(333)
(865)
–
–
–
30
(28)
(15)
8,279
6,256
739
934
Webster Limited – Annual Report 2016
59
Notes to the Financial Statements
For the financial year ended 30 June 2016
23 Financial Instruments (continued)
Forward foreign exchange contracts
It is the policy of all entities in the Group to enter into forward foreign exchange contracts to cover up to 100% of the exposure
generated by specific foreign currency payments and receipts. The Group also enters into forward foreign exchange contracts to
manage the risk associated with anticipated horticultural export transactions. A progressive cover strategy is adopted from the
time of budgeting through to harvest when up to 90% of exposure is hedged.
In the current year, there were no outstanding forward foreign exchange contracts. The following table details the aggregate
foreign currency contracts outstanding as at reporting date:
Outstanding contracts
Due within three months
Sell
– British Pound
– Euro
– Japanese Yen
– United States Dollar
Buy
– United States Dollar
Due after three months:
Sell
– United States Dollar
Due within three months
– Euro
– Japanese Yen
– United States Dollar
Buy
– United States Dollar
Due after three months:
Sell
– United States Dollar
Average
Exchange Rate
Foreign
Currency
2016
2015
(FC’000)
(FC’000)
2016
2015
–
–
–
–
–
–
0.6736
97.3300
0.7947
–
–
–
–
–
–
–
2,000
31,800
10,000
–
–
0.8413
–
1,000
Contract Value
Fair Value
2016
($’000)
2015
($’000)
2016
($’000)
2015
($’000)
–
–
–
–
–
–
2,969
327
12,583
–
1,189
17,068
–
–
–
–
–
–
53
(12)
(481)
–
(127)
(567)
As at the reporting date the aggregate amount of unrealised profits under forward foreign exchange contracts relating to
anticipated future transactions is $Nil, (2013: $309,000 profit) and this is deferred in the hedging reserve to the extent that
the hedge has been determined to be effective.
60
Foreign exchange sensitivity analysis
Other comprehensive income
– British Pound
– Euro
– Japanese Yen
– United States Dollar
Profit and Loss
– British Pound
– Euro
– Japanese Yen
– United States Dollar
2016
2015
+10%
($’000)
–10%
($’000)
+10%
($’000)
–10%
($’000)
–
–
–
–
–
–
–
–
–
–
–
265
31
1,307
1,603
–
(324)
(38)
(1,598)
(1,960)
2016
2015
+10%
($’000)
–10%
($’000)
+10%
($’000)
–10%
($’000)
(0)
(306)
(0)
(292)
(599)
0
374
1
357
732
(67)
(372)
(56)
–
(496)
82
455
69
–
606
(f) Interest rate risk management
The Company and the Group are exposed to interest rate risk as they borrow funds at both fixed and floating interest rates. This
risk is managed by maintaining an appropriate mix between fixed and floating rate borrowings. The Company’s and Group’s
exposures to interest rates on financial assets and financial liabilities are detailed in the maturity profile of financial instruments
section of this note.
Webster Limited – Annual Report 2016
61
Notes to the Financial Statements
For the financial year ended 30 June 2016
23 Financial Instruments (continued)
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-
derivative instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and
held constant throughout the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk
internally to key management personnel and this represents management’s assessment of the possible change in interest rates.
At reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held constant, the
impact on the Group is as follows:
Financial assets
Cash and cash equivalents
Financial liabilities
Borrowings
Effect on Profit and Loss
2016
2015
+1%
–1%
+1%
–1%
534
(534)
172
(172)
(1,970)
1,970
(1,967)
1,967
The following tables detail the Group’s expected maturity for its non-derivative financial assets and contractual maturity for
non-derivative financial liabilities.
Weighted
Average
Effective
Rate
(%)
Less
than 1
year
($’000)
1 to 5
years
($’000)
More
than 5
years
($’000)
Total
($’000)
2016
Financial assets
Non-interest bearing
Trade and other receivables
Other financial assets
Variable interest rate
Cash and cash equivalents
Financial liabilities
Non-interest bearing
Trade and other payables
Other financial liabilities
Variable interest rate
Bank loans
Fixed interest rate maturity
Finance lease liabilities
Cumulative non-redeemable preference shares*
62
–
–
25,535
752
–
–
–
1.40
12,450
37,985
752
–
–
15,231
620
–
–
–
–
–
–
–
–
26,287
–
12,450
38,737
15,231
620
2.83
44,694
152,257
–
196,951
4.60
9.00
807
35
1,863
142
–
2,670
394
571
61,387
154,262
394
216,043
2015
Financial assets
Non-interest bearing
Trade and other receivables
Other financial assets
Variable interest rate
Cash and cash equivalents
Fixed interest rate maturity
Loan
Financial liabilities
Non-interest bearing
Trade and other payables
Other financial liabilities
Variable interest rate
Bank loans
Fixed interest rate maturity
Finance lease liability
Cumulative non-redeemable preference shares*
Weighted
Average
Effective
Rate
(%)
Less
than 1
year
($’000)
1 to 5
years
($’000)
More
than 5
years
($’000)
Total
($’000)
34,743
2,314
–
–
53
–
–
–
–
37,057
53
–
17,274
1.40
17,274
7.00
154
52,224
2,283
4,597
–
–
2,437
56,821
–
26,480
–
–
26,480
620
620
3.75
46,110
148,480
–
194,590
4.60
9.00
940
35
934
142
–
1,874
394
571
74,185
149,556
394
224,135
* Amounts disclosed in more than five years represent principal amounts. There is no expiration term.
(g) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group undertakes credit checks prior to dealing with any new counterparty and obtains sufficient collateral or other security,
where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings
of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved
counterparties. The Group measures credit risk on a fair value basis.
Trade accounts receivable consist of a large number of customers, spread across diverse industries and geographical locations.
Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit
guarantee insurance cover is purchased.
Webster Limited – Annual Report 2016
63
Notes to the Financial Statements
For the financial year ended 30 June 2016
23 Financial Instruments (continued)
The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having
similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties
are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial instruments recorded in the financial statements, net of any allowances for losses, represents
the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
(h) Fair value of financial instruments
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements
approximate their fair value.
The fair values of financial assets and financial liabilities are determined as follows:
The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market prices.
The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted pricing
models based on discounted cash flow analysis.
The fair values of derivative instruments, included in hedging assets and liabilities, are calculated using quoted prices. Where
such prices are not available use is made of discounted cash flow analysis using the applicable yield curve for the duration
of the instruments.
The following tables detail the fair value of financial assets and financial liabilities.
Financial assets
Forward foreign exchange contracts
Trade and other receivables
Financial liabilities
Cumulative non-redeemable preference shares
Forward foreign exchange contracts
Trade and other payables
Bank loans
Finance lease liabilities
Carrying
amount
2016
($’000)
Fair
value
2016
($’000)
Carrying
amount
2015
($’000)
Fair
value
2015
($’000)
–
–
53
53
26,287
26,287
39,263
39,263
26,287
26,287
39,316
39,316
394
–
394
–
394
620
394
620
15,231
15,231
26,480
26,480
193,887
193,887
194,590
194,590
2,670
2,670
1,750
1,750
212,182
212,182
223,834
223,834
Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The
following table provides an analysis of financial assets and financial liabilities that are measured subsequent to initial recognition
at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
64
Derivative assets
Forward contracts
Derivative liabilities
Forward contracts
Derivative assets
Forward contracts
Derivative liabilities
Forward contracts
2016
Level 1
($’000)
Level 2
($’000)
Level 3
($’000)
Total
($’000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2015
Level 1
($’000)
Level 2
($’000)
Level 3
($’000)
Total
($’000)
–
–
–
–
53
53
(620)
(620)
–
–
–
–
53
53
(620)
(620)
(i) Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities and
by continually monitoring forecasts and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The following tables detail the Group’s expected maturity for its non-derivative financial assets and contractual maturity for
non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial assets
and liabilities based on the earliest date on which the Group earned or is required to pay.
The following table details the Group’s liquidity analysis for its derivative financial instruments. The table has been drawn up
based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and
the undiscounted gross inflows and outflows on those derivatives that require gross settlement.
Less than
1 month
($’000)
1 to 3
months
($’000)
3 months
to 1 year
($’000)
1 to 5
years
($’000)
5+ years
($’000)
30 June 2016
Foreign exchange forward contracts
–
–
–
30 June 2015
Foreign exchange forward contracts
(12)
(498)
(127)
–
–
–
–
Webster Limited – Annual Report 2016
65
Notes to the Financial Statements
For the financial year ended 30 June 2016
23 Financial Instruments (continued)
The following tables detail the Group’s expected maturity for its non-derivative financial assets and contractual maturity for
non-derivative financial liabilities.
Weighted
Average
Effective
Rate
(%)
Less than
1 year
($’000)
1 to 5
years
($’000)
More
than 5
years
($’000)
Total
($’000)
2016
Financial assets
Non-interest bearing
Trade and other receivables
Other financial assets
Variable interest rate
Cash and cash equivalents
Financial liabilities
Non-interest bearing
Trade and other payables
Other financial liabilities
Variable interest rate
Bank loans
Fixed interest rate maturity
Finance lease liabilities
Cumulative non-redeemable preference shares*
–
–
25,535
–
1.40
12,450
37,985
752
–
–
752
–
–
15,231
620
–
–
–
–
–
–
–
–
26,287
–
–
12,450
38,737
15,231
620
1.88
48,808
152,428
–
201,236
4.60
9.00
807
35
1,863
–
2,670
142
394
571
65,501
154,433
394
220,328
66
2015
Financial assets
Non-interest bearing
Trade and other receivables
Other financial assets
Variable interest rate
Cash and cash equivalents
Fixed interest rate maturity
Loan
Financial liabilities
Non-interest bearing
Trade and other payables
Other financial liabilities
Variable interest rate
Bank loans
Fixed interest rate maturity
Finance lease liability
Cumulative non-redeemable preference shares*
Weighted
Average
Effective
Rate
(%)
Less than
1 year
($’000)
1 to 5
years
($’000)
More
than 5
years
($’000)
Total
($’000)
34,743
2,314
–
–
53
–
–
–
–
37,057
53
–
17,274
1.40
17,274
7.00
154
52,224
2,283
4,597
–
–
2,437
56,821
–
26,480
–
–
26,480
620
620
3.75
46,110
148,480
–
194,590
4.60
9.00
940
35
934
142
–
1,874
394
571
74,185
149,556
394
224,135
* Amounts disclosed in more than five years represent principal amounts. There is no expiration term.
Webster Limited – Annual Report 2016
67
Notes to the Financial Statements
For the financial year ended 30 June 2016
24 Related Party Disclosures
(a) Key management personnel compensation
The aggregate compensation of the key management personnel of the consolidated entity and the Company is set out below:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Termination benefits
2016
$’000
2015
$’000
1,606
1,373
109
130
556
222
106
15
2,401
1,716
(b) Transactions with key management personnel
During the financial year, Directors and their Director-related entities, and executives, purchased goods, which were domestic
or trivial in nature, from the Company on the same terms and conditions available to other employees and customers. During
the year the Company entered into management agreements with Australian Food and Fibre Limited (pursuant to the purchase
of the Kooba Aggregation, Bengerang Limited and Tandou Limited) a Company in which Mr David Robinson and Mr Joe
Robinson are associates. The current management agreement is for a two-year term expiring 30 June 2017 with an annual
fee of $550,000 plus bonus incentives based on performance to a maximum potential of $500,000. A further agreement for
administrative services was entered into during the year for the provision of financial services totalling $295,000 per annum.
The administrative services agreement will cease in October 2016. Australian Food and Fibre Limited also incurred expenses
on behalf of the Company and was reimbursed at cost for those expenses amounting to $308,940. The Company entered
into an agreement with Corrigan Air, a company in which Mr Christopher Corrigan and Mr Joseph Corrigan are associates. The
current agreement is for the provision of the use of light aircraft to transport management to its properties. The arrangement is
charged at cost which amounted to $238,691 for the financial year ended 30 June 2016. Other than the above, and contracts
of employment, no other key management personnel have entered into a contract with the Company during the financial year.
(c) Equity interests in related parties
Details of percentages of ordinary shares held in controlled entities are disclosed in note 19 to the financial statements.
(d) Parent entity
The parent entity in the consolidated entity is Webster Limited. The ultimate Australian parent entity is Webster Limited. There
are no contingent liabilities.
68
25 Parent Entity Disclosures
(a) Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Retained earnings
Total equity
(b) Financial performance
Profit for the period
Other comprehensive income
Total comprehensive income
2016
$’000
2015
$’000
106,561
63,005
545,032
546,715
651,593
609,720
62,259
31,350
172,478
112,693
234,737
144,043
462,844
459,468
371
(58)
(44,219)
6,267
418,997
465,677
(80,277)
5,153
–
(612)
(80,277)
4,541
Webster Limited – Annual Report 2016
69
Notes to the Financial Statements
For the financial year ended 30 June 2016
26 Business Combinations
(a) Subsidiaries acquired
Principal activity
Kooba Ag
Bengerang Limited
Tandou Limited
Agriculture
Agriculture
Agriculture
Date
acquired
17/12/14
29/05/15
29/05/15
Proportion
of shares
acquired
%
Consideration
transferred
$’000
–
100.00
96.54
123,269
206,188
161,956
Kooba Ag, Bengerang Limited and Tandou Limited were acquired to continue the expansion of the Group’s activities in
agriculture.
27 Subsequent Events
In July 2016, the Company sold a parcel of its Permanent Water Rights for proceeds of $21.0 million. The sale of the
Permanent Water Rights will result in a Profit on Disposal of $5.6 million.
The Directors are not aware of any other matter or circumstance that has arisen, other than that which has been described
above, that has significantly affected or may significantly affect the operations of the consolidated Group, the results of those
operations or the state of affairs of the consolidated Group in subsequent financial years.
70
ASX Additional Information
For the financial year ended 30 June 2016
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as
follows. The information is current as at 31 August 2016.
Number and distribution of shareholders
1 – 1,000
1,001 – 5,000
5,001 –10,000
10,001 – 100,000
100,001 and over
Total number of shareholders
Total number of issued shares listed
Number of shareholders holding less than a marketable parcel
Ordinary
Cumulative
Preference
628
1,493
791
1,216
156
4,284
169
15
4
10
0
198
350,745,163
394,000
216
133
Voting Rights
Articles 63 to 70 of the Company’s Constitution govern the voting rights of members. In summary, but without prejudice to the
provisions of the Constitution, at any meeting of the Company every member present in person or by proxy or by attorney or by
duly authorised representative shall on a show of hands be entitled to vote and, on a poll, be entitled to one vote for each share
held. Preference shareholders’ voting rights are limited to matters affecting the rights of such shareholders.
Substantial shareholders
Australian Food and Fibre Limited and associates
Christopher Darcy Corrigan and Belfort Investments Limited
Verolot Limited
Mr Peter Joy
Bevan David Cushing as trustee of the KD Cushing Family Trust
Number
of Shares
%
Class of
Shares
52,566,913
45,132,434
32,215,862
21,272,722
20,244,413
14.99
12.87
9.18
6.07
5.77
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Webster Limited – Annual Report 2016
71
ASX Additional Information
For the financial year ended 30 June 2016
Twenty largest shareholders
Number of Shares
%
Listed Ordinary Shares
Australian Food and Fibre Limited
Verolot Limited
National Nominees Limited
Bell Potter Nominees
Mr Peter Robin Joy
Belfort Investment Advisors Limited
Eagle Securities Limited
Sir Selwyn John Cushing and Mr Bevan David Cushing
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