ASX Announcement
t. +612 9986 3867 f. +612 9475 0215
[email protected] www.oceaniacapital.com.au
ACN 111 554 360
Oceania Capital Partners Limited
Suite 57, 14 Narabang Way Belrose NSW 2085
24 May 2019
Appendix 4E and 31 March 2019 Financial Report
Attached for release to the market are:
• Appendix 4E – Preliminary final report
• Results Announcement
• 31 March 2019 financial report
Yours faithfully,
Lionel Baldwin Company Secretary
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OceaniaCapitalPartnersLimited(ABN52111554360)(ASX:OCP)anditscontrolledentities
Appendix4E-Preliminaryfinalreportfortheyearended31March2019asrequiredbyASXlistingrule4.3A
RESULTSFORANNOUNCEMENTTOTHEMARKET(Allcomparisonstotheyearended31March2018)
$’000
Up/down
Movement%
Revenuefromordinaryactivities 55,601 up 2.1% Profitaftertaxfromordinaryactivitiesaftertaxattributabletoordinaryshareholders 2,471 down 44.7%Netprofitfortheperiodattributabletomembers 2,471 down 44.7%
DIVIDENDINFORMATION
Nointerimorfinaldividendwasdeclaredorpaid.
NETTANGIBLEASSETPERSHARE 31March2019 31March2018Nettangibleassetpershare $1.50 $1.48Netassetspershare $2.83 $2.81
AdditionalAppendix4Edisclosurescanbefoundintheaccompanying31March2019FinancialReportandResultsAnnouncement.ThisreportisbasedontheconsolidatedfinancialstatementswhichhavebeenauditedbyBDOEastCoastPartnership.
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t. +612 9986 3867 f. +612 9475 0215
[email protected] www.oceaniacapital.com.au
ACN 111 554 360
Oceania Capital Partners Limited Suite 57, Level 3 14 Narabang Way Belrose NSW 2085
24May2019
FullYearResultsAnnouncement
Financialandoperatingsummary
OceaniaCapitalPartnersLimited(“OCP”)todayannouncedanetprofitaftertaxof$2.5millionfortheyearended 31 March 2019 (2018: $4.2 million) and earnings before interest paid, tax, depreciation andamortisation(EBITDA)of$5.4million(2018:$7.2million).Thisissummarisedinthefollowingtable:
Yearending
31March2019$’000
31March2018$’000
EONBroadcasting(SunshineCoastBroadcasters) 5,117 4,543EON2CH(Radio2CH) (1,736) (2,179)Crimsafe 3,277 3,625Cohort/PureProfile (176) 1,485Corporate(includinginterestincome) (1,779) (1,484)Mach7 (1,306) 1,403Otherlistedshares 2,019 (167) 5,416 7,226
Thenet asset valueper shareas at31March2019of$2.81 (31March2018:$2.79),basedon reportedconsolidatedcarryingvaluesatthatdate(netofminorityinterests),issetoutinthefollowingtable: Carryingvalueat
31March2019
$m $/share BasisforcarryingvalueEONBroadcasting 19.7 0.56 ConsolidatedcarryingvalueEON2CH 4.6 0.13 ConsolidatedcarryingvalueCrimsafe 29.7 0.84 ConsolidatedcarryingvalueBoody 5.9 0.17 CostCashatOCPandlistedshares 38.4 1.09 MarktomarketOthernetassets 0.7 0.02 99.0 2.81
Furtherdetailsontheunderlyinginvestmentsaresetoutbelow.
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PerformanceofInvesteeentitiesWeofferthefollowingcommentsontheperformanceofOCP’sunderlyinginvesteeentities.EONBroadcasting&EON2CHThe Sunshine Coast radio stations contributed $5.1 million (2018: $4.5 million) of EBITDA for the year.Advertisingrevenue,excludingtheeffectsof$0.2mofsurveyrelatedcontra(non-cash)revenueintheprioryear,grew3%overthatreportedfortheprioryear.ReportedEBITDAfortheyearhasgrown13%comparedto theprioryear. Included in theEBITDAresult for theprioryear isa$0.2millionpositive impactof thereductionofbroadcast licence fees tozero.DuringApril2018 thebusinesssuccessfully relocated tonewpremises.Duringtheyear2CHdeliveredanoperatinglossbeforeinterest,taxanddepreciationof$1.7million(2018:$2.2millionloss)andrevenueof$2.4million(2018:$1.9million).HavingacquiredRadio2CH1170aminJanuary2017,considerableprogresshasbeenmadeinreinvigorating2CH’son-airpositionasamusicandentertainmentproduct focussedontheover50’sdemographic.ThestationretainsarelationshipwithMMLasaresultofsharedbroadcastfacilityarrangements.Duringtheyearwehavecontinuedourfocusondevelopingtheboththedirectandagencysalescapabilityof2CH.Aspreviouslyreported,thisprocesshastakenconsiderably longerthananticipated. InApril2019Radio2CHappointedSouthernCrossAustereoAgencySalesastheagencysalesrepresentativeof2CH.Whilethereisalongwaytogothereareencouragingsignsthatadvertisersareinterestedinspecificanddirectaccesstoademographicthatspeaksforaconsiderableamountofdiscretionaryandnon-discretionaryspend.Giventhehighproportionoffixedcostsinthebusiness,additionalrevenueaddsconsiderablytoprofitmarginandthereisafocusondeliveringnewandadditionalrevenuestreams.CrimsafeTheCrimsafeGroupcontributed$3.3million(2018:3.6million)ofEBITDAfortheyear,asshowninthetablebelow: 2019
$‘0002018$‘000
Australia 4,591 5,028NorthAmerica (796) (809)Proline(powdercoatingoperation) (518) (594)CrimsafeGroup 3,277 3,625
EBITDAforAustraliais9%downwhenmeasuredagainsttheprioryear.Whilethisisadisappointingresult,thebusinesshasbeennegativelyimpactedbyapoorperformanceinWesternAustralia.ExcludingWesternAustraliaEBITDAforAustraliahasgrown3%.WeremainpositiveabouttheoutlookforCrimsafewhichistheleadingproviderofstainlesssteelsecurityscreensinAustralia.Thebusinesshasthepremierproductinitscategoryandanexcellentnationallicenseenetworkthroughwhichitdistributes.Weareenthusiasticaboutthegrowthprospectsinthecoreareaofresidentialhomesaswellasthegrowingopportunitieswhichthebusinesshasinthecommercialenvironment.Crimsafecontinuestoinvestinresearchanddevelopmentto
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ensureitcontinuestooffernewpremiumproducts.InMay2018CrimsafelaunchedtheCrimsafeiQTMrangeofproductswhichforthefirsttimeincorporatessmarttechnologywiththeoptionofanelectroniclock.
Crimsafe’spowdercoatingdivision,Proline,experiencedcontinuedoperationalsetbacksintheearlypartoftheyearwhichhasnegatively impacted theCrimsafegroupEBITDA.Considerablemanagement timeandefforthasbeeninvestedinProlineovertheyear.ThesecondhalfoftheyearhasseenanimprovementinProline’sperformance.Wearehopefulthatthistrendwillcontinueinthe2020financialyear.
US sales for the year are up 44% compared to theprior year.We continue to invest in theUSbusinesssupportingthedevelopmentofthebusinessinthelongerterm.Thisinvestmentinpeopleandmarketing,which is targeted at maximising growth opportunities, has negatively impacted the US operation’scontributiontoCrimsafegroupEBITDAduringtheyear.Aspreviouslyreported,wearehopefulabouttheprospectsoftheUSoperationcontributingsignificantlytoearningsovertimeandarecommittedtoinvestinginthispartofthebusinesswiththeaimofgrowingit.
Boody
On5March2019OCPacquireda22.5% interest inBoodyAustraliaPtyLtd (“Boody”).The investment inBoody has been classified as an associate by OCP. No profit or loss contribution from Boody has beenaccountedforbyOCPfortheperiodfromacquisitionto31March2019.
Boody,basedinSydney,designs,producesandmarketseverydayessentialsmadefromcertifiedorganicallygrownbamboo. Itsbusinessspanshealth-focussed independent retailers throughoutAustralia,aswellasdirect to consumer through boody.com.au and a number of select online marketplaces. Boody’smanufacturingprocessisthirdpartycertifiedtoensuresustainableandethicalpracticesareadheredtoatallstagesofthesupplychain-astrongpartofthecompany’scoremissiontotreadaslightlyaspossibleonthe planet. Outside of Australia, Boody is sold globally through licensed distributors throughout NorthAmerica,Canada,UnitedKingdom,Scandinavia, Iceland,NewZealand,SouthAfricaandmore recently inJapanandSouthKorea.
ListedsharesDuringtheyearOCPexiteditsholdinginPureprofileLimited(“PPL”).Alossof$0.2millioninrelationtothePPLsharesdisposedofwasrecognisedduringtheyear.DuringtheyearOCPdisposedof3.2millionMach7Limited(“M7T”)shares.Adownwardmark-to-marketadjustmentof$1.3million(2018:$1.4millionupward)wasrecognisedinrelationtoOCP’sremainingholdinginM7T.At31March2019OCPheldapproximately9.2million (2018:12.4million) shares inM7Twithamarketvalueof$1.7millionat31March2019($3.6million).Subsequentto31March2019OCPdisposedofitsholdinginM7Tfor$1.8million.OCPrealisedaprofitof$0.2millionoverthelifeofthisinvestment.OCPcontinuestoinvestinotherlistedsharesaspartofitsoverallcapitalmanagementstrategy.At31March2019thecarryingvalueofOCP’sinterestinotherlistedshareswas$19.0million(2018:$17.1million).Duringthe year an upward mark-to-market adjustment of $1.1 million (2018: $0.9 million downward) was
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recognisedinrelationtotheselistedshares.Dividendsof$0.9million(2018:$0.7million)fromotherlistedinvestmentswererecognisedasincomeduringthehalf-year.DividendsNodividendhasbeendeclaredfortheyearended31March2019(2018:3centspershares).InvestmentactivitiesOCPcontinuestoactivelyengageinexploringinvestmentopportunities,withthestatedinvestmentstrategyof investing inoperatingbusinesses,whetherownedprivatelyor througha listedcompany,withnopre-determinedemphasisonanyparticularsector.Proposedvoluntarydelistingandoff-marketsharebuy-backShareholdersarereferredtotheannouncementreleasedtodaybyOCPinrelationtotheproposedvoluntarydelistingofOCPandequalaccessoff-marketsharebuy-back.
***
FurtherinformationonthefinancialresultsandperformanceiscontainedintheAppendix4EandauditedFinancialReportreleasedtoday.Forfurtherinformation,pleasecontact:
MichaelJacobson(ExecutiveDirector)Tel:+61299863863
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CONTENTS
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT2
Page
Directors’Report
3
RemunerationReport
8
LeadAuditor’sIndependencedeclaration
14
FinancialStatements
15
Director’sdeclaration
50
IndependentAuditor’sReport
51
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DIRECTORS’REPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT3
TheDirectorspresenttheirreporttogetherwiththefinancialreportoftheConsolidatedEntity,comprising
Oceania Capital Partners Limited (“the Company” or “OCP”) and its controlled entities (together “the
ConsolidatedEntity”)fortheyearended31March2019andtheIndependentAuditor’sreportthereon.
DIRECTORS
ThefollowingweretheDirectorsoftheCompanythroughout,andsincetheendof,thefinancialyear:
RobertMoran Non-ExecutiveChairman
MichaelJacobson ExecutiveDirector
BrianScheiner ExecutiveDirector
DetailsoftheexperienceandqualificationsoftheDirectorsinofficeatthedateofthisreportare:
RobertMoran
LLB,B.Ec,MAICDNon-ExecutiveChairmanRobert Moran served as Managing Director of the Company until June 2014 and was appointed as Non-
ExecutiveChairmaninJuly2014.Hehasbeeninvolvedasaprincipalinvestorforover17yearsataboardand
strategic level in a variety of businesses and sectors and taking an active involvement in the underlying
businesses.He isexperienced in investmentbankingactivities, including financings, capital raisings,mergers
andacquisitionsandhaspracticedcorporateandcommerciallawataseniorlevel.
RobertcontinuestorepresenttheCompany’sinterestsasadirectorofofEONBroadcastingPtyLtd(“EON”),
Sunshine Coast Broadcasters Pty Ltd (“SCB”), EON2CHPty Ltd (“EON2CH”) andRadio 2CHPty Ltd (“Radio
2CH”).
Robert previously represented the Company as non-executive Chairman of Signature Security Group (from
January 2006until 29April 2011), as a director of iSOFTGroup Limited (fromNovember 2008until 29 July
2011),asdirectorofKeybridgeCapitalLimitedfromJanuary2013toFebruary2014.Healsorepresentedthe
Company’s interests inBaycorpasadirectorofBaycorpHoldingsPtyLimitedandBCHoldings1PtyLimited
(“BCHoldings”).
RobertisalsoadirectorofMPowerGroupLimited(since2002).
MichaelJacobson
B.Bus.Sci,CA(SA),CFAExecutiveDirectorMichael served as Non-Executive Director of the Company from March 2012 to June 2014 when he was
appointedasanExecutiveDirectoroftheCompany.
MichaelwasanexecutiveofHoskenConsolidatedInvestmentsLimitedGroup(“HoskenGroup”),apubliclisted
entity incorporated in South Africa and listed on the Johannesburg Stock Exchange. He joined the Hosken
Group in 2003 and served as an executive until he left South Africa in January 2011 to jointly found HCI
Australian Operations Pty Ltd, the Company’s majority shareholder. As an executive in the Hosken Group,
Michaelhelddirectorships in severalHosken subsidiaries, the largeronesbeingTsogoSunHoldings,Mettle
and Seardel Investment Corporation. He also served on numerous audit and remuneration committees.
MichaelalsoservedasChiefExecutiveOfficerofJohnnicHoldings,whichwasaJohannesburgStockExchange
listedpropertyandgamingcompany.Michael isanon-executivedirectorofMontaukHoldingsLtd, listedon
theJohannesburgStockExchange.
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DIRECTORS’REPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT4
Michael previously represented the Company as a director of Baycorp Holdings Pty Limited, an alternate
directorofBCHoldingsandadirectorofCohortHoldingsAustraliaPtyLtd(“Cohort”).Heiscurrentlyadirector
ofCrimsafeHoldingsPtyLtd(“Crimsafe”)andBoodyAustraliaPtyLtd.
BrianScheiner
BA,LLB,HDIPAdvancedCompanyLaw,HDipTaxExecutiveDirectorBrian served as Non-Executive Director of the Company from March 2012 to June 2014, when he wasappointedasanExecutiveDirectoroftheCompany.PriortojoiningtheHoskenGroup,Brianhadco-foundedasuccessfulcorporateadvisorybusiness.Beforethat,
hespent10yearsatoneofthelargestlawfirmsinSouthAfrica,wherehewasafullequitypartner,practicing
inthecorporateandcommercialdepartment.HejoinedtheHoskenGroupin2003andservedasanexecutive
until2007.HeandhisfamilythenrelocatedtoAustralia.Brianre-joinedtheHoskenGrouptojointlyfoundHCI
in2011.
BrianpreviouslyrepresentedtheCompanyasadirectorofCohort.BriancurrentlyrepresentstheCompanyas
adirectorofEON,SCB,EON2CH,Radio2CHandCrimsafe.
COMPANYSECRETARYLionelBaldwin
CA(SA),B.Comm(Hons)LioneljoinedtheHoskenGroupin2002whereheheldvariousexecutivepositionsingroupfinance.Hehas
helddirectorshipsinseveralHoskenGroupsubsidiaries.InJanuary2011heleftSouthAfricatojointlyfound
HCI. Lionelperforms the roleofChief FinancialOfficer for theCompanyand represents theCompanyasa
directorofEON,SCB,EON2CH,Radio2CHandCrimsafe.
DIRECTORMEETINGS
ThenumberofBoardmeetingsheldand thenumberofmeetings attendedbyeachof thedirectorsof the
Companyduringthefinancialyearwere:
DIRECTORBOARDMEETINGS
A B
MichaelJacobson 6 6
RobertMoran 6 6
BrianScheiner 6 6
A-Numberofmeetingsheldduringthetimethedirectorheldofficeduringtheperiod.
B-Numberofmeetingsattended.
ENVIRONMENTALREGULATION
TheCompanyanditscontrolledentitieswerenotsubjecttoanyspecificenvironmentalregulationsduringtheperiod.OPERATINGANDFINANCIALREVIEW
The principal activity of the Company during the current and prior reporting periods was investment. TheCompany has invested in operating businesses, whether privately owned or publicly listed, with decisionsbeingbasedonthefundamentalinvestmentcharacteristicsofthebusiness.Theprimaryobjectivehasbeenoninvesting in businesses which have characteristics of resilience and will grow over the investment period,enablingasuccessful,profitableexitfortheCompany.
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DIRECTORS’REPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT5
TheConsolidatedEntity’sprincipalinvestmentsattheendoftheyearwere:
• 98%interestinEONBroadcastingPtyLimited(“EON”),theownerandoperatoroftwocommercialFMradiostationsintheQueenslandSunshinecoast.
• 85.5% interest in EON2CHPty Limited (“EON2CH”), theowner andoperator of a commercial AMradiostationandassociatedDAB+spectruminSydney.
• 97%interestintheCrimsafeHoldingsPtyLtd(“Crimsafe”),aproviderofsecurityscreenproducts.• 22.5%interestinBoodyAustraliaPtyLtd(“Boody”),acquiredinMarch2019.
SIGNIFICANTCHANGESINSTATEOFAFFAIRS
Other than the acquisition of the interest in Boody, there were no other significant changes and events
affectingtheConsolidatedEntityduringtheperiodunderreviewanduntilthedateofthisreport.
ResultsofoperationsThenetaftertaxprofitoftheConsolidatedEntityfortheyearto31March2019was$2.5million(2018:$4.2million).Thecurrentperiodresultincludes:
• Interestincomeof$0.4million(2018:$0.4million).
• Arealisedlossonthedisposaloflistedsecuritiesof$0.1million(2018:$0.1millionprofit).
• A$0.2millionlossonsaleofsharesinPureprofileLimited(“PPL”).Theprioryearresultincludeda$1.5
milliondownwardmark-to-marketadjustmenttothecarryingvalueofsharesheldinPPL.
• A$1.3milliondownward(2018:$1.4millionupward)mark-to-marketadjustmenttothecarryingvalue
ofsharesheldinMach7TechnologiesLimited.
• A$1.1millionupward(2018:$0.9milliondownward)mark-to-marketadjustmenttothecarryingvalue
ofotherlistedsecurities.
• Aprofitbeforetaxcontributionof$4.8millionfromtheoperationsofSunshineCoastBroadcastersPty
Ltd(SCB)(2018:$4.2million).
• A loss before tax contribution of $1.9million from the operations of Radio 2CH Pty Ltd (2018: $2.3
millionloss)
• Aprofitbeforetaxcontributionof$2.7millionfromtheoperationsofCrimsafe(2018:$3.0million).
• Intheprioryear$3.1millionrealisedprofitwasrecognisedinrelationtotheCohortearn-out.
FinancialPositionAt31March2019 theConsolidatedEntityhadnet assetsof $99.7million (2018:$99.1million) and cashat
bankof$22.6million(2018$29.2million).
At31March2019theConsolidatedEntity’sborrowingsamountedto$7.0million(2018:$9.4million).These
borrowings, which are non-recourse to the Company, relate to the bank borrowings of the following
subsidiaries:
• EONBroadcastingPtyLtd,securedovertheassetsofEONandSCB• CrimsafeHoldingsPtyLtd,securedovertheassetsoftheCrimsafegroupofentities.
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DIRECTORS’REPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT6
EONBroadcastingPtyLtd–98%EON reported revenue for the year of $12.6million (2018: $12.3million) and Earnings Before Interest Tax
DepreciationandAmortisation(EBITDA)of$5.1million(2018:$4.5million)fromtheoperationsoftheradio
stationsSeaFM91.9and92.7MixFM.
EON2CHPtyLtd–85.5%EON 2CH reported revenue for the year of $2.4million (2018: $1.9million) and a Loss Before Interest Tax
DepreciationandAmortisationof$1.7million(2018:$2.2millionloss)fromtheoperationsoftheRadio2CH
business.
CrimsafeHoldingsPtyLtd–97%Crimsafereportedrevenuefortheyearof$39.4million(2018:$39.1million)andEarningsBeforeInterestTax
DepreciationandAmortisation(EBITDA)of$3.3million(2018:$3.6million).
LIKELYDEVELOPMENTSANDPROSPECTS
The Company will continue its policy of seeking tomake investments in opportunities as identified by the
Board of Directors and to add value to these over time. Disclosure of specific information regarding likely
developmentsintheactivitiesoftheCompanyandtheConsolidatedEntityandtheexpectedresultsofthose
activities is likelytoresult inunreasonableprejudicetotheConsolidatedEntity.Accordinglythis information
hasnotbeendisclosedinthisreport.
DIVIDENDS
Nointerimorfinaldividendwasdeclaredorpaidfortheyearending31March2019(2018:3centspershare
totalling$1,056,947).
SHARECAPITAL
TherewerenochangestotheissuedsharecapitaloftheCompanyduringtheyear.
EVENTSSUBSEQUENTTOREPORTINGDATE
InMay2019theCompanyannounceditsintention,subjecttoshareholderapproval,todelistfromtheASXand
conductanoff-marketequalaccesssharebuy-backofamaximumof10,570,000sharesat$2.30pershare.
Otherthanaboveandasdisclosedelsewhereinthisreport,thedirectorsarenotawareofanyothermatteror
circumstance that has occurred since the end of the financial year that has significantly affected or may
significantlyaffect theoperationsof theConsolidatedEntity, the resultsof thoseoperationsor the stateof
affairsoftheConsolidatedEntityinsubsequentfinancialyears.
DIRECTORSINTERESTS
Director’s relevant interests in the shares of Oceania Capital Partners Limited (OCP) as at the date of this
report:
Directors
Fullypaidordinaryshares
MichaelJacobson 2,385,427RobertMoran 935,988BrianScheiner 2,371,430
REMUNERATIONREPORT
The Remuneration Report is set out on pages 8 to 13 and forms part of theDirectors’ Report for the year
ended31March2019.
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DIRECTORS’REPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT7
INDEMNIFICATIONANDINSURANCEOFDIRECTORSANDOFFICERSThe Company’s Constitution provides that the Company may indemnify any current or former Director,
Secretaryorexecutiveofficerof theCompanyorofa subsidiaryof theCompanyoutof thepropertyof the
Company against every liability incurred by a person in that capacity (except a liability for legal costs) and
againstall legalcosts incurred indefendingproceedings,whethercivilorcriminalorofanadministrativeor
investigatory nature, in which the person becomes involved because of that capacity. The Company has
enteredintoDeedsofAccessandIndemnitywitheachoftheOfficers.
In accordancewith the provisions of the Corporations Act 2001, the Company has a Directors andOfficersLiability policy which covers all past, present or future Directors, secretaries and executive officers of theCompanyand itscontrolledentities. Thetermsof thepolicyspecificallyprohibitdisclosureofdetailsof theamountoftheinsurancecoverandthepremiumpaid.Theindemnificationandinsurancesarelimitedtotheextentrequiredbylaw.
AUDITANDNON-AUDITSERVICES
DetailsofamountspaidorpayabletoBDO,theCompany’sauditor,forauditservicesandnon-auditservices
are set out in note 22 to the financial statements. Having considered the nature and value of non-audit
servicesprovidedbyBDOtotheConsolidatedEntityduringtheyearunderreview,thedirectorsaresatisfied
that the provision of these services is compatible with the general standard of independence for auditors
imposedbytheCorporationsAct.
LEADAUDITOR’SINDEPENDENCEDECLARATIONUNDERSECTION307COFTHECORPORATIONSACT2001Theleadauditor’sindependencedeclarationissetoutonpage14andformspartoftheDirectors’Reportfor
theyearended31March2019.
PROCEEDINGSONBEHALFOFTHECOMPANY
Nopersonhasappliedfor leaveoftheCourttobringproceedingsonbehalfoftheCompanyor intervenein
any proceedings towhich the Company is a party for the purpose of taking responsibility on behalf of the
Companyforalloranypartofthoseproceedings.
ROUNDINGOFAMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument2016/191andinaccordancewiththatInstrument,amountsintheFinancialReportandDirectors’
Reporthavebeenroundedofftothenearestthousanddollars,unlessotherwisestated.
ThisreportismadeinaccordancewitharesolutionoftheDirectors.
RobertMoran
Chairman
DatedatSydneythis24thdayofMay2019
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REMUNERATIONREPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT8
This remuneration report,which forms part of theDirectors’ Report and is audited, sets out information
about the remuneration of the Consolidated Entity’s key management personnel for the year ended 31
March2019.
1. Principlesusedtodeterminethenatureandamountofremuneration
2. Keymanagementpersonnel
3. Businessperformance
4. Detailsofkeymanagementpersonnelremuneration
5. Equityinstrumentsanddisclosuresofkeymanagementpersonnel
1. PRINCIPLESUSEDTODETERMINETHENATUREANDAMOUNTOFREMUNERATION
TheConsolidatedEntity’sremunerationpoliciesaredesignedtoaligntheremunerationofexecutiveswiththeinterestsofOCPshareholders.
TheBoardofOCPdeterminesremunerationpoliciesandpracticesandhasresponsibilityfortheremuneration
packages and other terms of employment for all key management personnel of the Company. The
remunerationarrangementsofkeymanagementpersonnelemployedby investeeentitiesthataremembers
of theConsolidatedEntityaregovernedby theRemunerationCommitteeorBoardof the relevantmember
entity. The remuneration policies applied by remuneration committees or boards of those entities are
consistent with those of the Company, except as may be required to satisfy the business needs of those
entities.
Executiveremunerationandothertermsofemploymentarereviewedannuallybytherelevantremuneration
committeeorboard,havingregardtotheperformancegoalssetatthestartoftheyear,resultsoftheannual
appraisalprocess,relevantcomparativeinformation,and,ifnecessary,independentexpertadviceonmarket
compensationlevels.Aswellasabasesalary,remunerationpackagesmayincludesuperannuation,retention
arrangements,terminationentitlements,performancerelatedbonuses,longtermincentivearrangementsand
fringebenefits.
Remuneration packages are set at levels that are intended to attract and retain executives capable of
managingtheConsolidatedEntity’soperationsandachievingtheCompany’sstrategicobjectives.
Paymentofanyperformancerelatedbonusesislinkedtotheachievementofindividualobjectiveswhichare
relevanttomeetingtheConsolidatedEntity’soverallgoals.Inestablishingthelevelofanyperformancerelated
bonus for an employee, the relevant remuneration committee or board considers the results of a formal
annualperformanceappraisalprocess.
Remunerationandothertermsofemploymentforexecutivesareformalisedinserviceagreementsorletters
of employment. Participation in long term incentive plans are separately documented in accordance with
applicableplanrules.
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REMUNERATIONREPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT9
FixedremunerationFixedremunerationconsistsofbaseremuneration(whichiscalculatedonatotalcostbasisandincludesany
fringebenefits tax charges related tonon-financial employeebenefits) aswell asemployer contributions to
superannuationfunds.
PerformancelinkedremunerationPerformancelinkedremunerationisdesignedtorewardkeymanagementpersonnelformeetingorexceeding
key performance objectives, comprising both corporate and personal objectives. Performance linked
remunerationisintheformofcashbonuses.
Non-executivedirector’sremunerationFeesandpaymentstonon-executivedirectorsoftheCompanyreflectthedemandswhicharemadeon,and
theresponsibilitiesof,thedirectors.Non-executivedirectors'feesandpaymentsarereviewedannuallybythe
Board. Remuneration of non-executive directors of the Company is determined by the Board within the
maximumamountapprovedby shareholders fromtime to time. Themaximumamountcurrently standsat
$1,000,000perannuminaggregateforallNon-ExecutiveDirectorsoftheCompany.
Duringthecurrentyearthelevelofremunerationofnon-executivedirectors(inclusiveofsuperannuation)was
setat$120,000perannumfortheNon-ExecutiveChairman.
The Company’s Constitution also allows the Company to remunerate the non-executive directors for any
additionalor specialdutiesundertakenat the requestof theBoard.During theyearending31March2019
feestotalling$12,000werepaidinrespectofadditionalservicesprovidedbyRobertMoran(2018:$18,000).
Directors'feesarepaidincash.
VotingandcommentsmadeattheCompany’slastAnnualGeneralMeetingTheCompanyreceived99%of“yes”votesonitsRemunerationReportforthefinancialyearending31March
2018.TheCompanydidnotreceiveanyspecificfeedbackonitsRemunerationReportattheAnnualGeneral
Meeting.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT10
2. KEYMANAGEMENTPERSONNEL
ThedirectorsandotherkeymanagementpersonneloftheConsolidatedEntityattheendofthefinancialyear
underreviewwere:
Non-ExecutiveDirectorRobertMoran-Chairman
ExecutiveDirectorsMichaelJacobson
BrianScheiner
OtherSeniorExecutiveLionelBaldwin-CompanySecretaryandChiefFinancialOfficer
3.BUSINESSPERFORMANCE
ThetablesbelowsetoutsummaryoftheConsolidatedEntity’searningsbusinessperformanceasmeasuredby
a rangeof financial indicators for the last five financialperiods to31March2019.For furtherdiscussionon
financialperformance,refertothereviewofoperationssectionintheDirectors’Report.
31March
2019
$’000
31March
2018
$’000
31March
2017
$’000
31March
2016
$’000
31March
2015
$’000
Profit(Loss)afternetfinancingcost/income,incometax,depreciationandamortisation(fromcontinuingoperations) 2,536 4,213
7,926
4,949
2,988 Profit(Loss)attributabletoshareholdersofOceaniaCapitalPartnersLimited 2,471 4,472 7,811 4,854 2,943 Basicearningspershare(cps) 7.01 12.69 22.17 13.75 8.33Sharepriceatperiodend(cps) 200 226 225 136 134
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REMUNERATIONREPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT11
4.DETAILSOFKEYMANAGEMENTPERSONNELREMUNERATION
DetailsofthenatureandamountofremunerationofeachdirectoroftheCompanyfromOCPandeachofthe
followingnamedCompanyandrelevantgroupexecutiveswhoreceivethehighestremunerationare:
(a)Fortheyearended31March2019:
Short-term
Post-
employment
Otherlong-
term
Cashsalary
and
compensated
absences
$
Cashbonus
$
Superannuation
$
Annualand
long-service
leave
$
Total
$
Performance
based
percentageof
remuneration
Non-executive
directors
RobertMoran(i) 132,000 - - - 132,000 - Executive
Directors
MichaelJacobson 274,360 30,000 25,640 2,789 332,789 10%BrianScheiner 272,884 30,000 27,116 2,789 332,789 10% Otherexecutive LionelBaldwin 210,110 23,575 25,640 (675) 258,650 10% 889,354 83,575 78,395 4,903 1,056,228 (i) PaidtoabodycorporaterelatedtoRobertMoraninrelationtofeesforhisserviceasNon-Executive
ChairmanandadditionalservicesprovidedtotheCompany.
(b)Fortheyearended31March2018:
Short-term
Post-
employment
Otherlong-
term
Cashsalary
and
compensated
absences
$
Cashbonus
$
Superannuation
$
Annualand
long-service
leave
$
Total
$
Performance
based
percentageof
remuneration
Non-executive
directors
RobertMoran(i) 138,000 - - 138,000 - Executive
Directors
MichaelJacobson 270,012 45,000 29,988 6,105 351,105 15%BrianScheiner 265,092 45,000 34,908 6,105 351,105 15% Otherexecutive LionelBaldwin 205,762 35,363 29,988 5,680 276,793 15% 878,866 125,363 94,884 17,890 1,117,003
(i) PaidtoabodycorporaterelatedtoRobertMoraninrelationtofeesforhisserviceasNon-ExecutiveChairmanandadditionalservicesprovidedtotheCompany.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT12
(c)IndemnitiesandInsurance
Amountsdisclosedforremunerationofkeymanagementpersonnelexcludeinsurancepremiumspaidbythe
Consolidated Entity during the period ended 31 March 2019 in respect of directors' and officers' liability
insurance contracts as the contracts do not specify premiums paid in respect of individual directors and
officers. Information relating to the insurancecontracts is setout in theDirectors’Report.Disclosureof the
total amount of thepremiumand thenatureof thepotential liabilities in respect of thepolicy is expressly
prohibitedbythepolicy.
(d)Serviceagreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements or letters of appointment. These agreements may provide for the provision of performance
relatedcashbonusesandotherbenefits.Othermajorprovisionsoftheagreementsrelatingtoremuneration
aresetoutbelow.
Allarrangementswithexecutivesmaybeterminatedearlybyeitherparty,subjecttoapplicablenoticeperiods
andterminationpaymentsasdetailedbelow.
MichaelJacobson,ExecutiveDirector,OceaniaCapitalPartnersLimitedMichael JacobsonhasbeenemployedasanExecutiveDirector since1 July2014. From1March2012 to30
June 2014 he served as an Non-Executive Director of the Company. Michael’s current employment
arrangementscomprise:
• Abaseremunerationpackageof$300,000perannumincludingsuperannuation.Nextannualreview
March2020.
• Noticeperiodof3months.
BrianScheiner,ExecutiveDirector,OceaniaCapitalPartnersLimitedBrianScheinerhasbeenemployedasanExecutiveDirectorsince1July2014.From1March2012to30June
2014 he served as a Non-Executive Director of the Company. Brian’s current employment arrangements
comprise:
• Abaseremunerationpackageof$300,000perannumincludingsuperannuation.Nextannualreview
March2020.
• Noticeperiodof3months.
LionelBaldwin,ChiefFinancialOfficerandCompanySecretary,OceaniaCapitalPartnersLimitedLionel Baldwin has been employed by the Company since 1 May 2012. Lionel’s current employment
arrangementscomprise:
• Abaseremunerationpackageof$235,750perannumincludingsuperannuation.Nextannualreview
March2020.
• Noticeperiodof3months.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT13
5.EQUITYINSTRUMENTSDISCLOSURESOFKEYMANAGEMENTPERSONNEL
ThenumberofsharesintheCompanyheld,duringthefinancialperiod,bykeymanagementpersonneloftheConsolidatedEntity,includingbytheirpersonallyrelatedentities,aresetoutbelow:Ordinaryshares
Balance
At
1April
Purchases Balance
at
31March
2019 Directors MichaelJacobson 2,222,701 162,726 2,385,427RobertMoran 935,988 - 935,988BrianScheiner 2,281,430 90,000 2,371,430 Executives LionelBaldwin 607,144 3,000 610,144 2018 Directors MichaelJacobson 2,222,701 - 2,222,701RobertMoran 935,988 - 935,988BrianScheiner 2,281,430 - 2,281,430 Executives LionelBaldwin 607,144 - 607,144
Thisconcludestheremunerationreport,whichhasbeenaudited.
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Level 11, 1 Margaret St Sydney NSW 2000 Australia
Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
DECLARATION OF INDEPENDENCE BY ARTHUR MILNER TO THE DIRECTORS OF OCEANIA CAPITAL
PARTNERS LIMITED
As lead auditor of Oceania Capital Partners Limited for the year ended 31 March 2019, I declare that,
to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Oceania Capital Partners Limited and the entities it controlled during
the period.
Arthur Milner
Partner
BDO East Coast Partnership
Sydney, 24 May 2019
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FINANCIALSTATEMENTS:CONTENTSFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT15
PageFinancialstatements ConsolidatedIncomeStatement 16 ConsolidatedStatementofComprehensiveIncome 17 ConsolidatedBalanceSheet 18 ConsolidatedStatementofChangesinEquity 19 ConsolidatedCashFlowStatement 20 Notestothefinancialstatements Aboutthisreport 21 Resultsfortheyear 1. Segmentinformation 23 2. Income 25
Incometaxes
3. Incometaxes 26 Assets 4. Cashandcashequivalents 28 5. Tradeandotherreceivables 29 6. Inventories 30 7. Property,plantandequipment 31 8. Goodwillandotherintangibleassets 32 9. Otherfinancialassets 33 Capital 10. Sharecapital 35 11. Reserves 35 12. Dividends 36 13. Earningspershare 36 14. Borrowings 37 Risk 15. Financialriskmanagement
16. Impairmentofnon-financialassets 38
42 Groupstructure
17. Investmentsaccountedforusingtheequitymethod18. Subsidiaries
4445
Unrecogniseditems 19. Commitmentsandcontingencies 46 20. Eventsafterthereportingperiod 46 Other 21. Parententitydisclosures 47 22. Auditor’sremuneration 47 23. Relatedpartytransactions 48 24. Otheraccountingpolicies 49
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CONSOLIDATEDINCOMESTATEMENT
FORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT16
Inthousandsofdollars
Note
2019
2018
Revenuefromsales 2 54,298 53,390Otherincome 2 1,303 1,072Totalrevenue 55,601 54,462
(Loss)/profitonsaleoffinancialassets (145) 3,145Fairvalueadjustmentoffinancialassets (206) (938)Totaloperatingincome 55,250 56,669
Rawmaterialsandinventory (21,743) (21,943)Duediligenceandtransactioncosts (69) (186)Broadcastproductioncosts (1,149) (1,110)Employeebenefitsexpense (13,148) (12,703)Sellingcosts (2,024) (1,995)Promotionsandmarketing (4,325) (4,525)Administrationandotheroperatingexpenses (7,376) (6,981)Depreciation 7 (726) (677)Financecosts (432) (507)Profitbeforeincometax 4,258 6,042Incometaxexpense 3 (1,722) (1,829)Profitfortheyear 2,536 4,213 Attributableto: Equityholdersoftheparententity 2,471 4,472Non-controllinginterests 65 (259)Profitfortheyear 2,536 4,213
Earningspershareattributabletoequityholdersoftheparent Cents Cents
Basicearningspershare 13 7.01 12.69Dilutedearningspershare 13 7.01 12.69
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CONSOLIDATEDSTATEMENTOFOTHERCOMPREHENSIVEINCOME
FORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT17
Inthousandsofdollars
Note
2019
2018
Profitfortheyear 2,536 4,213 Othercomprehensiveincome Itemsthatmaybereclassifiedsubsequentlytoprofitorloss: Exchangedifferencesontranslationofforeignoperations (158) (19)Othercomprehensivelossfortheyear,netoftax (158) (19) Totalcomprehensiveincomefortheyear 2,378 4,194 Attributableto: Equityholdersoftheparententity 2,318 4,453Non-controllinginterests 60 (259)Totalcomprehensiveincomefortheyear 2,378 4,194
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CONSOLIDATEDBALANCESHEET
ASAT31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT18
Inthousandsofdollars Note 2019 2018
ASSETS
Currentassets Cashandcashequivalents 4 22,627 29,243Tradeandotherreceivables 5 10,463 9,484Inventory 6 8,381 8,139Otherfinancialassets 9 20,700 22,520Currenttaxassets 181 32Totalcurrentassets 62,352 69,418
Non-currentassets
Otherreceivables 5 1,571 1,016Investmentsaccountedforusingtheequitymethod 17 5,063 -Property,plantandequipment 7 4,690 4,330Intangibleassets 8 46,790 46,790Deferredtaxassets 3 335 436Totalnon-currentassets 58,449 52,572 Totalassets 120,801 121,990 LIABILITIES Currentliabilities Tradeandotherpayables 6,404 5,692Borrowings 14 6,149 1,598Currenttaxliabilities 525 549Employeebenefits 802 774Totalcurrentliabilities 13,880 8,613 Non-currentliabilities Borrowings 14 813 7,798Employeebenefits 189 192Deferredtaxliabilities 3 6,273 6,273Totalnon-currentliabilities 7,275 14,263 Totalliabilities 21,155 22,876 Netassets 99,646 99,114 EQUITY Sharecapital 10 243,359 243,359Reserves 11 25,513 25,666Accumulatedlosses (169,913) (170,872)EquityattributabletoownersofOceaniaCapital
PartnersLimited
98,959
98,153
Non-controllinginterests 687 961Totalequity 99,646 99,114
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CONSOLIDATEDSTATEMENTOFCHANGESINEQUITYFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT19
Inthousandsofdollars
Sharecapital
Equityreserve
Foreignexchangetranslation
reserve
Accumulatedlosses
Total
Non-
controllinginterests
Totalequity
Balanceat1April2017 243,359 25,690 (5) (175,344) 93,700 1,370 95,070
Profitfortheyear - - - 4,472 4,472 (259) 4,213
Othercomprehensiveincome 11 - - (19) - (19) - (19)
Totalcomprehensiveincomefortheyear - - (19) 4,472 4,453 (259) 4,194
Transactionswithownersintheircapacityasowners
Dividendpaidbysubsidiary - - - - - (150) (150)
Balanceat31March2018 243,359 25,690 (24) (170,872) 98,153 961 99,114
Balanceat1April2018 243,359 25,690 (24) (170,872) 98,153 961 99,114
Profitfortheyear - - - 2,471 2,471 65 2,536
Othercomprehensiveincome 11 - - (153) - (153) (5) (158)
Totalcomprehensiveincomefortheyear - - (153) 2,471 2,318 60 2,378
Transactionswithownersintheircapacityasowners
Dividendpaid - - - (1,057) (1,057) - (1,057)
Changeininterestinsubsidiary - - - (455) (455) (334) (789)
Balanceat31March2019 243,359 25,690 (177) (169,913) 98,959 687 99,646
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CONSOLIDATEDCASHFLOWSTATEMENTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT20
Inthousandsofdollars Note 2019 2018 Cashflowsfromoperatingactivities Receiptsfromcustomers 59,155 57,616Paymentstosuppliersandemployees (55,340) (54,723)Interestreceived 391 254Incometaxespaid (1,793) (1,847)Netcashinflowfromoperatingactivities 4 2,413 1,307 Cashflowsfrominvestingactivities Proceedsfromsaleofotherfinancialassets 1,267 -Dividendsreceived 889 719Paymentsforpurchaseofproperty,plantandequipment (1,086) (1,626)Loansadvanced (868) -Paymentsforpurchaseofotherfinancialassets (798) (5,891)ProceedsondisposalofinterestinBCHoldings 1,000 17,188ProceedsondisposalofinterestinCohort - 2,463PaymentforacquisitionofinterestinBoody (5,063) -PaymentforadditionalinterestinEONBroadcasting (456) -Netcash(outflow)/inflowfrominvestingactivities (5,115) 12,853 Cashflowsfromfinancingactivities Dividendpaid (1,057) -Dividendpaidbysubsidiary - (150)Repaymentofborrowings (2,425) (2,179)Paymentofinterestandborrowingcosts (432) (507)Netcashoutflowfromfinancingactivities (3,914) (2,836) Net(decrease)/increaseincashandcashequivalents (6,616) 11,325Cashandcashequivalentsatthebeginningoftheyear 29,243 17,918Cashandcashequivalentsattheendoftheyear 4 22,627 29,243
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NOTESTOTHEFINANCIALSTATEMENTS:ABOUTTHISREPORTFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT21
This consolidated financial report for the year ended 31 March 2019 comprises Oceania Capital PartnersLimited (“the Company”), its subsidiaries (together referred to as “the Consolidated Entity”) and theConsolidated Entity’s interest in associates and jointly controlled entities. The principal accounting policiesadoptedinthepreparationoftheconsolidatedfinancialreportaresetoutbelow,andhavebeenconsistentlyappliedbyeachentityintheConsolidatedEntitytoallperiodspresented,unlessotherwisestated.
Oceania Capital Partners Limited is a limited liability company incorporated and domiciled in Australia. Thecompanyisafor-profitentityforthepurposesofpreparingfinancialstatements.
The principal activity of the Company is investment. The Company has invested in operating businesses,whether privately owned or publicly listed, with decisions being based on the fundamental investmentcharacteristicsofthebusiness.Theprimaryfocusisoninvestingcapitalinbusinesseswhichwillgrowovertheinvestment period, enabling a successful profitable exit for the Company. The Company, either directly orthrough subsidiary entities, has invested in a number of businesses, including those that operate in thefinancial services, commercial radio broadcasting, digital lead generation, security screens, healthcaretechnology and security industries. The investment in the security industry was exited in April 2011. Theinvestment in thehealthcaretechnology industrywasexited in July2011.The investment in thedigital leadgenerationindustrywasexitedinOctober2016.TheinvestmentinthefinancialservicesindustrywasexitedinJanuary2018.
ThefinancialstatementswereapprovedbytheBoardofDirectorson24May2019.
StatementofComplianceThe financial report is a general purpose financial report which has been prepared in accordance withAustralian Accounting Standards (AASB) adopted by the Australian Accounting Standards Board and theCorporations Act 2001, as appropriate for profit oriented entities. The consolidated financial report of theConsolidated Entity complies with International Financial Reporting Standards (IFRS) and interpretationsadoptedbytheInternationalAccountingStandardsBoard.
BasisofPreparationTheconsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasisexceptforthefollowingwhicharemeasuredatfairvalue:
• derivativefinancialinstruments• financialassets
Themethodsusedtomeasurefairvaluesarediscussedfurtherinnote9.
FunctionalandPresentationCurrencyTheseconsolidatedfinancialstatementsarepresentedinAustraliandollars,whichistheCompany’sfunctionalandpresentationalcurrencyandthefunctionalcurrencyoftheentities intheConsolidatedEntityatbalancedate.
RoundingThe Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)Instrument 2016/191. In accordancewith that Instrument, all financial informationpresented inAustraliandollarshasbeenroundedtothenearestthousanddollarsunlessotherwisestated.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT22
KeyjudgementsandestimatesIn theprocessofapplyingtheConsolidatedEntity’saccountingpoliciesmanagementhasmadeanumberofjudgements and applied estimates of future events. Judgements and estimates which are material to thefinancialreportarefoundinthefollowingnotes:
3. Incometaxes6. Inventories7. Property,plantandequipment8. Intangibleassets9. Otherfinancialassets16. Impairmentofnon-financialassets BasisofconsolidationTheconsolidated financial statementscomprise the financial statementsof theConsolidatedEntity.A listofcontrolledentities(subsidiaries)atyearendiscontainedinnote18.The financial statementsof subsidiariesareprepared for thesamereportingperiodas theparentcompany,usingconsistentaccountingpolicies.Adjustmentsaremadetobringintolineanydissimilaraccountingpoliciesthatmayexist.Inpreparingtheconsolidatedfinancialstatements,all inter-companybalancesandtransactions, incomeandexpensesandprofitsandlossesresultingfromintra-Grouptransactionshavebeeneliminated.Subsidiariesareconsolidated from the date on which control is obtained to the date on which control is disposed. Theacquisitionofsubsidiariesisaccountedforusingtheacquisitionmethodofaccounting.ForeigncurrencyThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising onconsolidation,aretranslatedtoAustraliandollarsatforeignexchangeratesrulingatbalancedate.Theincomeandexpensesof foreignoperations are translated intoAustraliandollars at averageexchange rates (unlessthis is not a reasonable approximation of the cumulative effect of the rates prevailing on the transactiondates,inwhichcaserevenuesandexpensesaretranslatedatexchangeratesatthedatesofthetransactions).Anyexchangedifferencesarisingontranslationaretakendirectlytotheforeigncurrencytranslationreserveinequity.Transactionsinforeigncurrenciesareinitiallytranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedateofthetransaction.Foreigncurrencymonetary itemsthatareoutstandingatreportingdate are translated at the foreign exchange rateprevailing at that date. Foreign exchange gains and lossesarisingontranslationare recognised in the incomestatement,exceptwhendeferred inequityasqualifyingcashflowhedges.Non-monetaryassetsandliabilitiesthataremeasuredintermsofhistoricalcostinaforeigncurrency are translated using the exchange rate at the date of the transaction. Non-monetary assets andliabilities denominated in foreign currencies that are stated at fair value are translated using the exchangeratesprevailingatthedatesthefairvaluewasdetermined.OtheraccountingpoliciesSignificantandotheraccountingpoliciesthatsummarisethemeasurementbasisusedandarerelevanttotheunderstandingofthefinancialstatementsareprovidedthroughoutthenotestothefinancialstatements.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT23
1.Segmentinformation
Operating segments are determined based on the industry sectors in which the Consolidated Entity hasinvested,whichisconsistentwiththebusinessplanto invest inoperatingbusinesses.Theprimaryoperatingsegmentsduringthecurrentandpriorfinancialperiodwere:
• CommercialRadioBroadcasting: operationofAM&FMradiostations• Digitalleadgeneration: onlineleadgenerationandmarketing• Securityscreens: supplyofdoorandwindowsecurityscreens
SegmentinformationisdisclosedinmannerthatreflectsthemanagementinformationreviewedbytheChiefOperatingDecisionMakerandona financial reportingbasis toreflect that theConsolidatedEntitydoesnotfullyownand,therefore,doesnotconsolidateallthebusinessesinwhichithasinvested.
TheConsolidatedentityoperatesmateriallyinonegeographicalareabeingtheAsiaPacificregion.
SegmentrevenuesandresultsThe following is an analysis of the Consolidated Entity’s revenue and results fromoperations by reportablesegment.
Segmentrevenue Segmentprofit(loss)Inthousandsofdollars 2019 2018 2019 2018Commercialradiobroadcasting 14,924 14,208 2,940 1,942Securityscreens 39,374 39,182 2,997 3,375Digitalleadgeneration - - (175) 1,485Unallocated - - 713 1,254 54,298 53,390 6,475 8,056Interestincome 414 353Financecosts (432) (507)Centraladministrationandemployeecosts
(2,199)
(1,860)
Profitbeforetax 4,258 6,042
Segment profit reported above represents revenue generated from external customers. There were nomaterialinter-segmentsalesinthecurrentperiod(2018:Nil).
Segment profit represents the profit earned by each segment without allocation of central administrationcostsanddirectors’ salaries, investment income, financecostsand incometaxexpense.Theshareofequityaccountedprofitsofjointventuresisallocatedtotherelevantsegment.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT24
1.Segmentinformation(continued)
Segmentassetsandliabilities
Inthousandsofdollars 2019 2018Segmentassets Commercialradiobroadcasting 32,047 31,345Securityscreens 43,517 42,041Totalsegmentassets 75,564 73,386Unallocated 45,237 48,604Totalassets 120,801 121,990 Segmentliabilities Commercialradiobroadcasting 7,447 8,231Securityscreens 13,365 14,255Totalsegmentliabilities 20,812 22,486Unallocated 343 390Totalliabilities 21,155 22,876For thepurposesofmonitoringsegmentperformanceandallocationresourcesbetweensegmentsallassets(includinggoodwill)&liabilitiesareallocatedtotherelevantsegments.Othersegmentinformation
Depreciation
AdditionstoProperty,plantandequipmentand
IntangiblesInthousandsofdollars 2019 2018 2019 2018Commercialradiobroadcasting 441 423 628 811Securityscreens 280 249 513 799Unallocated 5 5 - 16 726 677 1,141 1,626
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2.Income
Inthousandsofdollars 2019 2018Salesrevenue Advertisingrevenue 14,924 14,208Saleofgoods 39,374 39,182Totalsalesrevenue 54,298 53,390 Otherincome Interestincome 414 353Dividendincome 889 719Totalotherincome 1,303 1,072
Recognitionandmeasurement
Revenue RevenueisincomethatarisesinthecourseofordinaryactivitiesoftheConsolidatedEntityandisrecognisedat the fairvalueof theconsiderationreceivedor receivable.Revenue is recognisedwhen it isprobable thatfutureeconomicbenefitswillflowtotheentityandthesebenefitscanbemeasuredreliably.
Commercialradiobroadcasting
Revenue represents revenue earned primarily from the sale of advertising airtime and related activities,including sponsorship. Revenue is recorded when the service is provided being primarily when theadvertisementisaired.Commissionspayabletomediaagenciesarerecognisedassellingcosts.Otherregularsources of operating revenue are derived from commercial production for advertisers. Revenue fromcommercialproductionisrecognisedoninvoice,atthetimeofcompletion.
Securityscreens
Securityscreensrevenueisrecognisedatthepointofsale,whichiswherethecustomerhastakendeliveryofthegoods,therisksandrewardsaretransferredtothecustomerandthereisavalidsalescontract.Amountsdisclosedasrevenuearenetofsalesreturnsandtradediscounts.
InterestincomeInterest income is recognised in the income statement on an accruals basis, using the effective interestmethod.DividendincomeDividend income is recognised in the income statement when the entity’s right to receive payment isestablished.
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT26
3.Incometaxes
Incometaxexpenserecognisedintheincomestatement
Inthousandsofdollars 2019 2018Currenttax 1,665 1,853Deferredtax 57 (24)Incometaxexpense 1,722 1,829 Deferredincometaxintheincomestatementrelatesto: Taxlosses - -Other 57 (24) 57 (24)
Reconciliation
Inthousandsofdollars 2019 2018Profitbeforetax 4,258 6,042IncometaxattheAustraliantaxrateof30% 1,278 1,813Non-deductibleexpenses 16 290Previouslyunrecognisedtaxlossesnowrecouped (562) (1,687)Taxlossesnotrecognised 1,038 1,221Other 48 192Incometaxonprofitbeforetax 1,722 1,829
Unrecognisedtaxassets
Inthousandsofdollars 2019 2018Taxlossesforwhichnodeferredtaxassethasbeenrecognised 192,328 189,848Potentialtaxbenefitat30%
57,698
56,954
Deferredincometaxinthebalancesheetrelatestothefollowing:
Inthousandsofdollars 2019 2018Employeeentitlements 233 224Other 102 212Totaldeferredtaxassets 335 436 Intangibleassets 6,273 6,273Totaldeferredtaxliabilities 6,273 6,273
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OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT27
3.Incometaxes(continued)
Recognitionandmeasurement
The income tax expense or benefit on the profit or loss for the year comprises current and deferred tax.Incometaxexpenseisrecognisedintheprofitorlossexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequity,inwhichcaseitisalsorecogniseddirectlyinequity.
Current tax is the expected tax payable on the current period’s taxable income, using tax rates enactedorsubstantiallyenactedatbalancedate.Current taxalso includesanyadjustment to taxpayable in respectofpreviousyears.
Deferredtaxismeasuredusingthebalancesheetmethod,providingfortemporarydifferencesbetweenthecarrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Theamount of deferred tax recognised is based on the expected manner of realisation or settlement of theunderlyingitemsandthetaxrateswhichareenactedorsubstantiallyenactedatbalancedateandexpectedtoapplywhen the assets are recovered or liabilities are settled. The following temporary differences are notprovidedfor:theinitialrecognitionofassetsorliabilitiesthataffectneitheraccountingnortaxableprofitanddifferences relating to investments in subsidiaries to the extent that they will probably not reverse in theforeseeable future. Deferred tax is not recognised for taxable temporary differences arising from therecognitionofgoodwill.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it isprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.
Additionalincometaxesthatarisefromthedistributionofdividendsarerecognisedatthesametimeastheliabilitytopaytherelateddividend.
Taxconsolidation
TheCompanyanditswholly-ownedAustraliancontrolledentitiesformedataxconsolidatedgroupon1July2005meaningthatallmembersofthetaxconsolidatedgrouparetaxedasasingleentity.TheCompanyistheheadentityofthetaxconsolidatedgroup.
Keyestimate:unrecogniseddeferredtaxassetsTheConsolidatedEntityhasunrecognisedbenefitsrelatingtocarriedforwardtaxlosses.TheselossesrelatetoataxablelossesincurredonthedisposalofinvestmentsbytheConsolidatedEntityin2011and2016.TheConsolidatedEntityhasdeterminedthatatthisstagefutureeligibleincometoutilisethetaxassetsarenotsufficientlyprobable.
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4.Cash&cashequivalents
Inthousandsofdollars 2019 2018Cashatbank 3,679 4,123Depositsatcall 18,948 25,120Totalcash&cashequivalents 22,627 29,243
Reconciliationofnetprofitaftertaxtonetcashflowsfromoperations
Inthousandsofdollars 2019 2018Profitfortheyear 2,536 4,213 Non-cashitems: Depreciation 726 677Fairvaluemovementoffinancialassets 206 938Shareofprofitofjointlycontrolledentities - -Loss(profit)onsaleofotherfinancialassets 145 (17)Profitonsaleofjointlycontrolledentity - (2,942)Othernon-cashitems (163) (118)Dividendsreceived (889) (718)Financecosts 432 507 Changesinassetsandliabilities: Decreaseinreceivables (1,235) (1,168)Increaseininventories (242) (1,610)Decrease(increase)innetcurrentanddeferredtaxassetsandliabilities
(71)
(17)
Increaseincreditors 957 1,288Increaseinemployeeentitlements 11 275Netcashinflowfromoperatingactivities 2,413 1,308
Recognitionandmeasurement
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and otherinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoan insignificantrisk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of theConsolidated Entity’s cash management strategy are reported within liabilities in the Balance Sheet, butincludedasacomponentofcashandcashequivalentsforthepurposeoftheStatementofCashFlows.
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5.Tradeandotherreceivables
Inthousandsofdollars 2019 2018Current Tradereceivables 8,866 8,494Provisionfordoubtfuldebts (16) (34)Interestreceivable 29 33Pre-paymentsandotherreceivables 1,584 991Totalcurrenttrade&otherreceivables 10,463 9,484 Non-current Otherloansreceivable 1,571 1,016Totalnon-currenttrade&otherreceivables 1,571 1,016TradereceivablespastduebutnotimpairedInthousandsofdollars 2019 2018Underthreemonths 883 377Threetosixmonths 137 159Totalreceivablesnotconsideredimpaired 1,020 536 TheConsolidatedentityhas recognisedanexpense in respectofbadanddoubtful trade receivablesduringtheperiodended31March2019of$$268,912(2018:$20,006).
RecognitionandmeasurementTrade receivables are initially recognised at fair value. Trade receivables are generally due for settlementwithin 30 to 60 days. Collectability of trade receivables is reviewed on an ongoing basis. Debts which areknown tobeuncollectablearewrittenoffby reducing the carryingamountdirectly.Ageneralprovision forimpairment of trade receivables is raised using a forward looking expected credit loss approach based onlifetimeexpectedcreditlosses.TheConsolidatedEntityhasestablishedaprovisionmatrixthatisbasedontheConsolidated Entity’s historical credit loss experience, adjusted for forward-looking factors specific to thedebtors andeconomicenvironment.Cash flows relating to short-term receivables arenotdiscounted if theeffectofdiscountingisimmaterial.
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6.Inventories
2018 2018 $’000 $’000Current Finishedgoods 8,381 8,139 Thecostsofindividualitemsofinventoryaredeterminedusingweightedaveragecosts.
Recognitionandmeasurement
Inventoryisstatedatthelowerofcostandnetrealisablevalue.Costcomprisesdirectmaterials,directlabour,andanappropriateproportionofoverheadexpenditure.Costsareassignedtoindividualitemsofinventoryonthebasisofweightedaveragecosts.Costsofpurchasedinventoryaredeterminedafterdeductingrebatesanddiscounts. Net realisable value is the estimated selling price in the ordinary course of business less theestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.Keyestimate:netrealisablevalueThe key assumptions, which require the use of management judgement, are the variables affecting costsrecognised inbringing the inventory to their location and condition for sale, estimated costs to sell and theexpected selling price. These key assumptions are reviewed at least annually. The total expense relating toinventorywrite-downsduring theyearwas$17,000 (2018:$159,000).Anyreasonablypossiblechange in theestimateisunlikelytohaveamaterialimpact.
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7.Property,plantandequipment
Leaseholdimprovements
$’000
Plantandequipment
$’000
Total$’000
Cost Balanceat31March2017 297 4,215 4,512Additions 592 1,034 1,626Disposals - (8) (8)Balanceat31March2018 889 5,241 6,130Additions 461 680 1,141Disposals (125) (338) (463)Balanceat31March2019 1,225 5,583 6,808 Accumulateddepreciation Balanceat31March2017 37 1,093 1,130Depreciation 101 576 677Disposals - (7) (7)Balanceat31March2018 138 1,662 1,800Depreciation 118 608 726Disposals (128) (280) (408)Balanceat31March2019 128 1,990 2,118 Carryingamounts At31March2018 751 3,579 4,330At31March2019 1,097 3,593 4,690
RecognitionandmeasurementItems of property, plant and equipment are stated at historical cost less accumulated depreciation andimpairment losses. The carrying amount of an item of property, plant and equipment includes the cost ofreplacing part of such an item when that cost is incurred if it is probable that future economic benefitsembodiedwithintheitemwilleventuateandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancearerecognisedasexpensesintheincomestatementasincurred.Depreciationischargedtothe income statement on a straight-line basis over the estimated useful lives of each part of an item ofproperty, plant and equipment. The estimated useful lives in the current and comparative periods are asfollows:
• leaseholdimprovements:shorterofleasetermorusefullife• otherplantandequipment:2-20years
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each balance sheetdate.Keyestimate:property,plantandequipmentTheestimationsofusefullives,residualvalueandamortisationmethodsrequiremanagementjudgementandarereviewedannually.Iftheyneedtobemodified,thechangeisaccountedforprospectivelyfromthedateofreassessmentuntiltheendoftherevisedusefullife(forboththecurrentandfutureyears).Suchrevisionsaregenerallyrequiredwhentherearechanges ineconomiccircumstances impactingspecificassetsorgroupsofassets. These changes are limited to specific assets and as such, any reasonably possible change in theestimateisunlikelytohaveamaterialimpactontheestimationsofusefullives,residualvalueoramortisationmethods.
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8.Intangibleassets Inthousandsofdollars 2019 2018Commercialradiolicences–atcost SunshineCoastBroadcasters 10,000 10,000Radio2CH 2,410 2,410
Brandsandrelatedintangibles–atcost
Crimsafe 8,500 8,500 Goodwill–atcost Commercialradiobroadcasting SunshineCoastBroadcasters 9,438 9,438Radio2CH 1,880 1,880
Securityscreens Crimsafe 14,562 14,562
Totalintangibleassets 46,790 46,790
Goodwill ismonitoredbymanagement at anentity levelwithineachof theConsolidatedEntity’s operatingsegments.
RecognitionandmeasurementGoodwill
Goodwillacquiredinabusinesscombinationisinitiallymeasuredatcost.Costismeasuredasthecostofthebusinesscombinationminusthenetfairvalueoftheacquiredandidentifiableassets,liabilitiesandcontingentliabilities.Followinginitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.Refertonote16forfurtherdetailsonimpairment.Intangibleassets
Intangibleassetsacquiredseparatelyaremeasuredoninitialrecognitionatcost.Thecostofintangibleassetsacquired inabusinesscombination is their fairvalueat thedateofacquisition.Following initial recognition,intangibleassetsarecarriedatcostlessamortisationandanyimpairmentlosses.Intangibleassetswithfinitelivesareamortisedonastraight-linebasisovertheirusefullivesandtestedforimpairmentwheneverthereisan indication that theymaybe impaired.Theamortisationperiodandmethod is reviewedateach financialyearend.Intangibleassetswithindefinitelivesaretestedforimpairmentinthesamewayasgoodwill.Intangibleasset UsefullifeCommercialradiolicences IndefiniteCrimsafebrands IndefiniteKeyjudgement:usefullifeofintangibleassetsTheCrimsafebrandhasbeenassessedashavinganindefiniteusefullifeonthebasisofstrongbrandstrength,ongoing expected profitability and continuing support. Radio broadcasting licences have been assessed ashaving an indefinite useful life. These licences are renewable for a minimal cost every five years underprovisionswithintheBroadcastingServicesAct.TheDirectorsunderstandthattherevocationofacommercialradiolicencehasneverhappened,withoutcause,inAustraliaandhavenoreasontobelievethatthelicenceshaveafinitelife.
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9.Otherfinancialassets
Inthousandsofdollars 2019 2018 Current Otherfinancialassetsthroughprofitorloss Investmentinlistedsecurities 20,700 21,520Other Escrowedsaleproceeds - 1,000Totalcurrentfinancialassets 20,700 22,520 At31March2018anamountof$0.86millionwasincludedinlistedsecurities,beingthecarryingvalueof4.44millionordinaryPureProfileLimitedsharesheldinescrow.Theseshareswerereleasedfromescrowon6May2018.
Duringtheprioryear theConsolidatedEntitydisposedof its remaining interest inBCHoldings.At31March2018 $1 million of the proceeds were held in escrow. These proceeds were released from escrow on 24October2018.
Fairvaluemeasurement(a)FairvaluehierarchyThetablebelowanalysesfinancial instrumentscarriedatfairvaluebyvaluationmethod.Thedifferentlevelshavebeendefinedasfollows:
• Level1:quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.• Level2:inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetor
liability,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).• Level3:inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservable
inputs)Inthousandsofdollars Level1 Level2 Level3 Total 2019 Financial assets designated at fair value
throughprofitorloss
Listedsecurities 20,700 - - 20,700 2018 Financial assets designated at fair value
throughprofitorloss
Listedsecurities 21,520 - - 21,520
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9.Otherfinancialassets(continued)
(b)ValuationtechniquesusedtodeterminefairvaluesLevel1
The fair value of financial instruments traded in active markets, such as publicly traded securities andavailable-for-salesecurities,arebasedonquotedmarketpricesatthebalancesheetdate.ThequotedmarketpriceusedforfinancialassetsheldbytheConsolidatedEntityistheclosingbidpriceatbalancedate.
Level2&3
Thefairvaluesoffinancialinstrumentsthatarenottradedinanactivemarketaredeterminedusingvaluationtechniques and/or considerationof specific circumstances affecting recovery of the financial instruments atbalancedate.
(c)Otherfinancialinstrumentsnotcarriedatfairvalue
TheConsolidatedEntity alsohas financial assets and liabilitieswhich arenotmeasured at fair valueon theBalanceSheet.Thefairvaluesoftheseinstrumentsarenotmateriallydifferenttotheircarryingvalue.
RecognitionandmeasurementAninstrumentisclassifiedasatfairvaluethroughprofitorlossifitisheldfortradingorisdesignatedassuchupon initial recognition or subsequently re-designated in compliancewith accounting standards. A financialassetisclassifiedasheldfortradingifacquiredprincipallyforthepurposeofsellingintheshortterm.Financialinstruments are designated at fair value through profit or loss if the Consolidated Entity manages suchinvestments and makes purchase and sale decisions based on their fair value in accordance with theCompany’sinvestmentstrategy.Attributabletransactioncostsarerecognisedinprofitorlosswhenincurred.Financialinstrumentsthatareclassifiedasatfairvaluethroughprofitorlossaremeasuredatfairvalue,andchangesthereinarerecognisedintheincomestatement.
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10.Sharecapital
Company Company 31March
2019shares
31March2018shares
31March2019$’000
31March2018$’000
Ordinaryfullypaidshares 35,231,572 35,231,572 243,359 243,359 OrdinarysharesentitletheholdertoparticipateindividendsandtheproceedsonwindingupoftheCompanyinproportiontothenumberofandamountspaidonthesharesheld.
11.ReservesInthousandsofdollars 2019 2018 Equityreserve Openingbalance 25,690 25,690Closingbalance 25,690 25,690 Foreigncurrencytranslationreserve Openingbalance (24) (5)Translationdifferencesduringtheyear (153) (19)Closingbalance (177) (24) Totalreserves 25,513 25,666
(a) EquityreserveInaccordancewithAccountingStandards,afinancialassetwasrecognised inrespectofunpaidsharecapitalreceivable from shareholders, discounted to fair value at recognition. This treatment resulted in therecognitionof$25.7millionofinterestincomeduringthefinancialyears2005to2007whichrepresentedtheunwindingofthediscountoverthetermtorecoveryofthereceivable. TheDirectorshavedeterminedthatthisincomeshouldnotbeusedtopayfuturedividendsandapprovedthetransferofthisamounttoanequityreserve.
(b) ForeigncurrencytranslationreserveTheforeigncurrencytranslationreservecomprisesofallforeignexchangedifferencesarisingfromthetranslationofthefinancialstatementsofcontrolledforeignentities.
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12.DividendsNointerimorfinaldividendhasbeendeclaredorpaidinrelationtothecurrentfinancialyear.Afinaldividendinrelationtotheyearended31March2018of3centspershare,totalling$1,056,947,wasdeclaredandpaidduringthecurrentfinancialyear.Estimated franking credits at31March2019available for thepaymentofdividends in subsequent financialyearsbasedonataxrateof30%total$6,013,347(2018:$6,212,684).
13.Earningspershare Incentspershare 2019 2018Basicearningspershare 7.01 12.69Dilutedearningspershare 7.01 12.69 Inthousandsofdollars 2019 2018Reconciliationofprofitusedinthecalculationofearningspershare
Profitfortheyear 2,536 4,213(Profit)lossattributabletonon-controllinginterests (65) 259Profitusedinthecalculationoftotalbasicearningspershare 2,471 4,472Profitusedinthecalculationoftotaldilutedearningspershare 2,471 4,472 Innumberofshares 2019 2018Weightedaveragenumberofordinarysharesusedinthecalculationofbasicearningspershare
35,231,572
35,231,572
Weightedaveragenumberofordinarysharesusedinthecalculationofdilutedearningspershare
35,231,572
35,231,572
CalculationofearningspershareBasicearningspershare
BasicearningspershareiscalculatedbydividingtheprofitattributabletoequityholdersoftheCompanybytheweightedaveragenumberofordinarysharesoutstandingduringthereportingperiod.
Dilutedearningspershare
Dilutedearningsper shareadjusts the figuresused in thedeterminationofbasicearningsper share to takeintoaccounttheafterincometaxeffectofinterestandotherfinancingcostsassociatedwithdilutivepotentialordinarysharesandtheweightedaveragenumberofsharesassumedtohavebeenissuedfornoconsiderationinrelationtodilutivepotentialordinaryshares.
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14.Borrowings Inthousandsofdollars 2019 2018 Current Securedbankborrowings 6,149 1,598 Non-current Securedbankborrowings 813 7,798TotalBorrowings 6,962 9,396 Securedbankborrowings
(i)Securedtermloanof$1.6million(2018:$2.3million)bearinginterestatBBSYplus2.55%,repayableover3yearswith the final instalment due on 5November 2020. The loan is secured over all of the assets of theCompany’s subsidiaries: EON Broadcasting Pty Ltd (“EON”) and Sunshine Coast Broadcasters Pty Ltd. Thecarryingvalueofassetspledgedassecurityisasfollows:Inthousandsofdollars 2019 2018Totalcurrentassets 5,230 4,318Totalnon-currentassets 21,019 20,265Totalassetspledged 26,249 25,183
TheCompanyhassubordinatedaclaimof$5millionagainstEONinfavourofthelender.
(ii)Securedtermloanof$5.4million(2018:$7.1million)bearinginterestatBBSYplus2.75%repayableover5years, with the final instalment due in March 2020. The loan is secured over the all of the assets of theCompany’s subsidiary entities: CrimsafeHoldingsPty Ltd, Crimsafe Security SystemsPty Ltd, ProlineQualityFinishing Pty Ltd, Crimsafe North America LLC and IPH International Pty Ltd. The carrying value of assetspledgedassecurityisasfollows:
Inthousandsofdollars 2019 2018Totalcurrentassets 18,418 17,082Totalnon-currentassets 25,100 24,959Totalassetspledged 43,518 42,041The Company has subordinated a claim of $16.5million against Crimsafe Holdings Pty Ltd in favour of thelender.
(iii)Assetfinancetotalling$0.1million(2018:$0.1million)securedoverproperty,plantandequipmentwithacarryingvalueof$0.2million(2018:$0.2million).
Thebankborrowingsreferredtoin(i)and(ii)abovearesubjecttocertainfinancialcovenants.Theseincludemaximumleverageandinterestcoverratios.TheConsolidatedEntityhascompliedwithallfinancialcovenantsduringtheyear.
RecognitionandmeasurementAllloansandborrowingsareinitiallyrecognisedatfairvalueoftheconsiderationreceived,lessdirectlyattributabletransactioncosts.Afterinitialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognised.
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15.FinancialriskmanagementTheConsolidatedEntityhasexposuretoavarietyoffinancialrisks,whicharecategorisedasmarketrisk,creditrisk, and liquidity risk. This note presents information about the Consolidated Entity’s exposure to each ofthese risks. Additional disclosures are presented throughout this financial report. The understanding andmanagement of risk, particularly preservation of capital, is critical to the Company. The Board has overallresponsibility for ensuring that there is a sound system of risk management and internal compliance andcontrolacrossthebusiness.Documentedpoliciesandprocessestoenableappropriatemanagementofbusinessandinvestmentriskhavebeenadopted. Investeeentitiesareresponsiblefortheirownriskmanagement.TheCompanyoverseestheriskmanagement practices of investee entities through representation on the boards of those entities andinvolvementinactivelyassistingandoverseeingthemanagementofthebusinesses.
TheriskmanagementpoliciesandanalysisdescribedbelowandthroughoutthisfinancialreportrefertothosepracticesadoptedbytheentitiesthataremembersoftheConsolidatedEntity.
(a) MarketriskMarket risk refers to the potential for changes in themarket value of the Consolidated Entity’s investmentpositions or earnings streams. There are various types ofmarket risks including exposures associatedwithinterest rates, foreign currencies and equity market prices. The Consolidated Entity may use derivativefinancialinstrumentstohedgecertainriskexposures.ThemethodsusedtomeasurethetypesofrisktowhichtheConsolidatedEntityisexposedaredescribedbelow.
(i) InterestrateriskThenatureoftheCompany’sbusinesshasbeentoinvestinlistedandunlistedentities.Aspartofthefundingarrangementsfortransactions,theBoardmayelecttoraisealevelofdebttopartiallyfundtheConsolidatedEntity’sinvestments.DebtfundingexposestheConsolidatedEntitytotheriskofmovementsininterestrates.
Interest rate swapsmay be used by the Consolidated Entity tomanage exposure to interest rate risk. Themajority of the derivative financial instruments are floating-to-fixed interest rate swaps. Such derivativefinancialinstrumentshavetheeconomiceffectofconvertingassetsandliabilitiesfromvariableinterestratetofixedinterestratearrangements.Undertheinterestrateswaps,therelevantentityagreeswithotherpartiesto exchange, at specified intervals, the difference between fixed contract rates and floating rate interestamounts calculated by reference to the agreednotional principal amounts. TheConsolidated Entity hadnoexposuretointerestrateswapsat31March2019.
As at the end of the reporting period, the Consolidated Entity had the following variable rate borrowingsoutstanding:
Inthousandsofdollars 2019 2018Bankborrowings 6,962 9,396 Weightedaverageinterestrate 4.97% 4.68%
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15.Financialriskmanagement(continued)InterestRateSensitivityThefollowingtablesummarisesthesensitivityoftheConsolidatedEntity’sfinancialassetsandliabilitiestoareasonablepossiblechangeininterestrates,withallothervariablesheldconstant.Itassessestheeffectthata100basispointincreaseordecreaseintheyieldcurveintheAustralianinterestrateat31March2019wouldhaveonequityandprofitorloss(beforetax)atthereportingdate.Theanalysiswasperformedonthesamebasisin2018. 2019 2018Inthousandsofdollars
Profitorloss
Equity
Profitorloss
Equity
100basispointdecrease 82 82 105 105
100basispointincrease (82) (82) (105) (105)
Asensitivityof100basispointshasbeenselectedasthis isconsideredreasonablegiventhecurrent levelofshort-term and long-term interest rates and the volatility observed both on an historical basis andmarketexpectationsforfuturemovements.(ii) ForeigncurrencyriskThe Company has made investments in Australian dollars only. Each of the businesses in which theConsolidatedEntityhasinvestedmayconductoperationsoutsideofAustraliaandmaybeexposedtoforeigncurrencyexchangerisk.Eachinvesteeentityisresponsibleformanagingitsownexposuretotheserisks.
OCP’spolicyistorequireoperatingsubsidiarycompaniestomanagetheirforeignexchangeriskagainsttheirfunctionalcurrency.
SensitivityanalysisTheConsolidatedEntityisnotconsideredtohaveanymaterialsensitivitytoforeigncurrencyexchangerisks.
FortheConsolidatedEntity,anyforeigncurrencytranslationriskassociatedwithforeigninvestmentsresultsinsome volatility to the foreign currency translation reserve. The impact on the foreign currency translationreserverelatestotranslationofthenetassetsofforeigncontrolledentities includingthe impactofhedging.Themovement taken to the foreign currency translation reserve takes intoaccount the relatedhedgesandrepresentstheimpactoftheunhedgedportion.
(iii) EquitypriceriskTheConsolidatedEntityisexposedtoequitysecuritiespriceriskarisingfromitsinvestmentinlistedsecurities.Hedgingisnotenteredintoinrespectoftheriskofageneraldeclineinequitymarketvalues.TheConsolidatedEntitydoesnotactivelyhedgeitsexposuretotheriskofageneraldeclineinequitymarketvalues,believingthat such strategies are not cost-effective. Instead, the Consolidated Entity prefers to activelymanage theunderlyingbusinessorassettoensurethatitsfundamentalvalueispreservedandenhanced.
TheConsolidatedEntitymayenterintohedgesofhighlyprobableforecasttransactionsforpaymentsforlistedequityinvestments.Atthereportingdate,noderivativeswereheldforthatpurpose.
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15.Financialriskmanagement(continued)EquitypricingsensitivityThe following table summarises the sensitivity of the Consolidated Entity’s financial assets and liabilities toequitypriceriskatbalancedate. 2019 2018
InthousandsofdollarsCarryingamount
Marketorfairvalue
Carryingamount
Marketorfairvalue
Listed shares (accounted for using the fairvaluemethod)
20,700
20,700
21,520
21,520
Listed securities are measured at fair value as represented by the share price at balance date. A 10%movementinthesharepriceasat31March2019wouldhaveresultedinanincreaseordecreaseinthefairvalueofthesharesofapproximately$2.07million(2017:$2.15million).
Thepriceriskforanyotherunlistedsecuritiesisimmaterialintermsofthepossibleimpactonprofitorlossortotalequity.Ithasthereforenotbeenincludedinthesensitivityanalysis.
TheConsolidatedEntityisnotexposedtocommoditypricerisk.(b)CreditriskCreditriskreferstotheriskthatacounterpartywilldefaultonitscontractualobligationsresultinginfinanciallosstotheCompanyoritssubsidiaries.Managementhasacreditpolicyinplaceandtheexposuretocreditriskis monitored on an ongoing basis. Credit risk arises from all financial assets included in the statement offinancialposition.TheCompanyhasinvestedinlistedandunlistedentities.TheCompany,orasubsidiaryentity,willusuallyonlyprovide loans to investee entities when it forms part of the overall funding provided for an investmenttransaction.ApprovalofsuchfundingistheresponsibilityoftheBoard.Operating businesses that the Company invests inwill have their own credit risk policies. The Company isactively involved in assisting and overseeing the managing of the business of investee entities, includingoverseeingthatappropriatepoliciesareinplace.ThecarryingamountofthefinancialassetsrecognisedintheBalanceSheetbestrepresentstheConsolidatedEntity’smaximumexposuretocreditriskatthereportingdate.
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15.Financialriskmanagement(continued)AgeingoffinancialassetsThe following table summarises the credit risk of theConsolidated Entity’s financial assets by assessing theageing of the carrying amount of financial assets. It also details any financial assets that are individuallyimpairedandadescriptionofcollateralheldwhererelevant.
Neitherpastdue
norimpaired
Pastduebutnotimpaired
Inthousandsof
dollars
Total
<30days
30-60days
60-90Days
>90days
Collectivelyimpaired
IndividuallyImpaired
2019 Cash&cashequivalents
22,627
22,627
-
-
-
-
-
-
Receivables 10,479 9,443 723 59 101 137 16 -Otherfinancialassets
20,700
20,700
-
-
-
-
-
-
53,806 52,770 723 59 101 137 16 - 2018 Cash&cashequivalents
29,243
29,243
-
-
-
-
-
-
Receivables 9,518 8,948 199 86 92 159 5 29Otherfinancialassets
22,520
22,520
-
-
-
-
-
-
61,281 59,687 199 86 92 159 5 29Based on past payment behaviour and analysis of customer credit risk, unimpaired past due amounts areconsideredtobecollectibleinfull.(c)LiquidityriskLiquidityriskistheriskthattheCompanyoritssubsidiarieswillnotbeabletomeetfinancialobligationsastheyfalldue.The Board has approved a Financial Management Policy applicable to the Company and its wholly ownedsubsidiaries. The Financial Management Policy includes policies for the investment of surplus cash andmonitoringoftheliquidityposition.Operating businesses in which the Company has invested and which are not wholly owned are required tomanagetheirownliquidityrequirementssoastomeettheirfinancialobligationsastheyfalldue.Thisincludesmaintaininganappropriatelevelofsurpluscashtosupportthebusinessandhavingappropriateoverdraftanddebtfacilitiesavailable.TheCompanyisrepresentedontheboardsoftheseentitiesandisabletomonitortheliquidityposition.TheliquiditypositionoftheConsolidatedEntityismonitoredfortheimpactofpotentialinvestmentacquisitionsordivestments,includinganypotentialborrowingrequirements.
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15.Financialriskmanagement(continued)ThefollowingtableanalysestheConsolidatedEntity'sfinancialliabilitiesintorelevantmaturitygroupingsbasedontheremainingcontractualmaturityperiodatthereportingdate.Theamountsdisclosedinthetablearethecontractualundiscountedcashflows(includingbothinterestandprincipalcashflows).
Residualcontractmaturities
Inthousandsofdollars
Carryingamount
Contractualcashflows
6months
orless
6-12
months
1-2years
2-5years
Morethan
5years2019 Trade&otherpayables 6,404 6,404 6,404 - - - -Interestbearingloansandborrowings
6,962
7,313
1,110
5,364
839
-
-
13,366 13,717 7,514 5,364 839 - - 2018 Trade&otherpayables 5,692 5,692 5,692 - - - -Interestbearingloansandborrowings
9,396
10,247
903
1,150
7,355
839
-
15,088 15,939 6,545 1,150 7,355 839 -TheborrowingsoftheConsolidatedEntityaresubjecttocertainfinancialcovenants;theseincludedebtservicecoverratiosandmaximumleverageratios.TheConsolidatedEntityhasongoingproceduresinplacetomonitorcompliancewiththesecovenants.TheConsolidatedEntityhascompliedwithallsuchcovenantsduringtheyearended31March2019.(d)CapitalriskmanagementThe Board reviews the Company’s capital plan including dividend policy, share issuance or repurchaseprogrammesandtheissuanceofdebt.
The Company, directly or indirectly, has invested in listed and unlisted operating businesses. In makinginvestment decisions, the Board considers an appropriate level of equity investment and debt for eachtransactionwiththeaimofreducingtheequityrequirementandmaximisingthereturnoncapitalinvested.
16.Impairmentofnon-financialassetsTestingforimpairment
TheConsolidatedEntitytests,property,plantandequipment,intangiblesandgoodwillforimpairment:• atleastannuallyforindefinitelifeintangiblesandgoodwill,and;• wherethereisanindicationthattheassetmaybeimpaired,whichisassessedatleasteachreporting
date;or• wherethereisanindicationthatpreviouslyrecognisedimpairment(onassetsotherthangoodwill)
mayhavechanged.
Iftheassetdoesnotgenerateindependentcashflowsanditsvalueinusecannotbeestimatedtobeclosetoitsfairvalue,theassetistestedforimpairmentaspartofthecashgeneratingunit(CGU)towhichitbelongs.
Assetsareimpairediftheircarryingvalueexceedstheirrecoverableamount.TherecoverableamountofanassetorCGUisdeterminedasthehigherofitsfairvaluelesscostsofdisposal(FVLCOD)orvalueinuse(VIU).
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16.Impairmentofnon-financialassets(continued)ThevalueoftheConsolidatedEntity’sBroadcastinglicences,Brandsandgoodwillaretestedforimpairmentattheindividualentityleveltowhichtheirrelate(“‘CGU”)
TherecoverableamountoftherelevantCGU’sat31March2019wasdeterminedbasedonaVIUdiscountedcashflowmodel.
VIUcalculationsusecashflowprojectionsbasedonthe2020financialbudgetextendedoverthesubsequentfouryearperiod(“forecastperiod”)usingestimatedgrowthrates.Cashflowsbeyondthefiveyearperiodareextrapolated using growth rates that do not exceed the long term average growth rate for the business inwhich the CGU operates. The estimated future cash flows are discounted to their present value using adiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetorCGU.
Discount rates used in both calculations are based on theweighted average cost of capital determined byprevailingorbenchmarkedmarketinputs,riskadjustedwherenecessary.Otherassumptionsaredeterminedwithreferencetoexternalsourcesofinformationanduseconsistent,conservativeestimatesforvariablessuchas terminal cash flow multiples. Increases in discount rates or changes in other key assumptions, such asoperating conditions or financial performance, may cause the recoverable amounts to fall below carryingvalues.
KeyassumptionsCommercialradiobroadcastingCGU’sSunshineCoastBroadcasters(“SCB”)
Assumptions used in the value in use calculation include a pre-tax discount rate of 14.25% (2018: 14.25%),revenueandoperatingcostgrowthratesof4%and3%respectivelyandalongtermgrowthrateof2.5%.Asat31 March 2019, no reasonable increase in the discount rate to reflect a higher cost of debt finance thancurrently forecast or other changes in the cost of equity would result in the SCB CGU carrying amountexceedingitsrecoverableamount.Ifeithertherevenuegrowthassumptionwastodecreasefrom4%tobelow0% or the operating expense growth assumptionwas to increase from 3% to above 15%over the forecastperioditwouldresultintheSCBCGUcarryingamountexceedingitsrecoverableamount.
Radio2CH(“2CH”)
Assumptions used in the value in use calculation include a pre-tax discount rate of 14.5% (2018:14.5%),averagerevenueandoperatingcostgrowthratesof18%and5.1%respectivelyandalongtermgrowthrateof2.5%. Revenue growth rates over the forecast period are supported by 2CH’s revenue growth strategyimplemented inApril2019.Asat31March2019,an increase inthediscountratetoreflectahighercostofdebtfinancethancurrentlyforecastorotherchangesinthecostofequitytoabove16%wouldresult inthe2CH CGU carrying amount exceeding its recoverable amount. If either the average revenue growthassumptionwastodecrease from18%tobelow16.5%or theoperatingexpensegrowthassumptionwastoincrease from5.1%toabove6.5%over the forecastperiod itwould result in the2CHCGUcarryingamountexceedingitsrecoverableamount.
SecurityscreensCGU
Assumptions used in the value in use calculation include a pre-tax discount rate of 15.25% (2018: 15.25%),revenueandoperatingcostgrowthratesof5%and3%respectivelyandalongtermgrowthrateof2.5%.Asat31 March 2019, no reasonable increase in the discount rate to reflect a higher cost of debt finance thancurrently forecast or other changes in the cost of equity would result in the security screen CGU carryingamountexceedingitsrecoverableamount.Ifeithertherevenuegrowthassumptionwastodecreasefrom5%tobelow4%or theoperatingexpensegrowthassumptionwasto increase from3%to4%over the forecastperioditwouldresultinthesecurityscreenCGUcarryingamountexceedingitsrecoverableamount.
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17.Investmentsaccountedforusingtheequitymethod
Investmentinassociates
TheConsolidatedEntityhasa22.5%equity interest inBoodyAustraliaPtyLtd&a25.96%interest inBoodyUSholdco Pty Ltd (collectively “Boody”)whichwas acquired on 5March 2019. The result of Boody for theperiodisnotconsideredmaterialtotheconsolidatedentityandhasbeenexcludedfromthecarryingamount.
SummarisedfinancialinformationofConsolidatedEntity’sshareinBoody:
2019 2018Inthousandsofdollars Profitfromcontinuingoperations - -Othercomprehensiveincome - -Totalcomprehensiveincome - - Carryingamount 5,063 -
RecognitionandmeasurementAssociatesarethoseentities inwhichtheConsolidatedEntityhassignificant influence,butnotcontrol,overthe financial and operating policies. Jointly controlled entities are those entities over whose activities theConsolidated Entity has joint control, established by contractual agreement. In the consolidated financialstatements, investments inassociatesandjointlycontrolledentitiesareaccountedforusingeitherfairvaluethroughprofitorlossortheequitymethodofaccountingasdesignatedasappropriatetoeachinvestment.
TheConsolidatedEntity’s investments inassociatesand jointlycontrolledentities includegoodwill identifiedonacquisitionnetofimpairmentlosses,ifany.Wheretheequitymethodisapplied,theconsolidatedfinancialstatements include theConsolidated Entity’s shareof the total recognised gains and losses of associates orjointlycontrolledentitiesonanequityaccountedbasis, fromthedate that significant influencecommencesuntil the date that significant influence ceases.When the Consolidated Entity’s share of losses exceeds itsinterestinanassociateorjointlycontrolledentity,theConsolidatedEntity’scarryingamountisreducedto$NilandrecognitionoffurtherlossesisdiscontinuedexcepttotheextentthattheConsolidatedEntityhasincurredobligationsormadepaymentsonbehalfoftheassociateorjointlycontrolledentity.
Wherethefairvaluemethodisapplied,thecarryingamountofinvestmentsinassociatesorjointlycontrolledentitiesisrestatedtotheassessedfairvaluewithchangesrecognisedintheincomestatement.
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18.Subsidiaries
TheConsolidatedFinancialStatementsincorporatetheassets,liabilitiesandresultsofthefollowingentities:Nameofentity
Countryofincorporation
Classofshares/units
EffectiveEquityHolding
(%)2019 2018
EONBroadcastingPtyLtd Australia Ordinary 98.0 95.0SunshineCoastBroadcastersPtyLtd Australia Ordinary 98.0 95.0OCPShelf2PtyLtd Australia Ordinary 100.0 100.0EON2CHPtyLtd Australia Ordinary 85.5 85.5Radio2CHPtyLtd Australia Ordinary 85.5 85.5CrimsafeHoldingsPtyLtd Australia Ordinary 97.0 97.0CrimsafeSecuritySystemsPtyLtd Australia Ordinary 97.0 97.0ProlineQualityFinishingPtyLtd Australia Ordinary 97.0 97.0IPHInternationalPtyLtd Australia Ordinary 97.0 97.0IPUnitTrust Australia Units 97.0 97.0CrimsafeNorthAmerica,LLC USA Ordinary 97.0 97.0OCPBoodyHoldingsPtyLtd Australia Ordinary 100.0 -RecognitionandmeasurementTheconsolidatedfinancialstatementsofOceaniaCapitalPartnersLimitedincorporatetheassetsandliabilitiesofallentitiescontrolledbytheCompanyasat31March2019andtheresultsofallcontrolledentitiesfortheyear then ended. Control exists when the Consolidated Entity has the power to govern the financial andoperatingpoliciesofanentitysoastoobtainbenefitfromitsactivities.Inassessingcontrol,potentialvotingrights thatpresentlyareexercisableare taken intoaccount.Wherecontrolofanentity isobtainedduringafinancialyear, its resultsare included in theconsolidated incomestatement fromthedateonwhichcontrolcommences.Wherecontrolofanentityceasesduringafinancialyearitsresultsareincludedforthatpartoftheyearduringwhichcontrolexisted.
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19.CommitmentsandcontingenciesNon-cancellableoperatingleases
TheConsolidatedEntityleasesvariousofficesandwarehousesundernon-cancellableoperatingleasesexpiringwithin1to4years.These leaseshavevaryingterms,escalationclausesandrenewalrights.Onrenewal, thetermsoftheleasesarerenegotiated.Inthousandsofdollars 2019 2018Commitmentsforminimumleasepaymentsinrelationtonon-cancellableoperatingleasesarepayableasfollows:
Withinoneyear 1,569 1,571Laterthanoneyearbutnotlaterthanfiveyears 1,502 2,922Total 3,071 4,493
DuringtheyeartheConsolidatedEntityrecognised$1,907,000(2018:$1,949,000)operatingleasecostsasanexpense.Other
CertainsubsidiariesoftheCompanyarepartytovariouslegalactionsthathaveariseninthenormalcourseofbusiness. It isexpectedthatany liabilitiesarisingfromsuch legalactionwouldnothaveamaterialeffectontheConsolidatedEntity’sfinancialperformance.
20.Eventsafterthereportingdate
InMay2019theCompanyannounceditsintention,subjecttoshareholderapproval,todelistfromtheASXandconductanoff-marketequalaccesssharebuy-backofamaximumof10,570,000sharesat$2.30pershare.
Otherthanaboveorasdisclosedelsewhereinthisfinancialreport,therehavebeennosignificanteventssubsequenttobalancedate.
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21.Parententitydisclosures
Inthousandsofdollars 2019 2018Resultoftheparententity Profitfortheyear 2,045 5,161Othercomprehensiveincome - -Totalcomprehensiveincomefortheperiod 2,045 5,161 Financialpositionoftheparententityatperiodend Currentassets 38,583 46,703Totalassets 89,527 88,587Currentliabilities 243 298Totalliabilities 342 391 Totalequityoftheparentcomprising: ShareCapital 243,359 243,359Equityreserve 25,690 25,690Distributableprofitreserve 9,794 8,805Accumulatedlosses (189,658) (189,658) 89,185 88,196 Operatingleasecommitments Withinoneyear 9 21
ContingentliabilitiesoftheCompanyat31March2019aredetailedinnote19.Thecompanyhadnocapitalexpenditureorinvestmentcommitmentsat31March2019.
22.Auditors’remuneration
DuringtheyearthefollowingfeeswerepaidorpayableforservicesprovidedbytheauditoroftheCompanyanditsrelatedpractices:
Indollars 2019 2018Auditservices BDOEastCoastPartnership: Statutoryauditandreviewoffinancialreports 198,017 196,400Non-Auditservices
BDOEastCoastPartnership: Otherservices-taxadvisoryandconsulting 62,244 54,919
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23.RelatedpartytransactionsUltimatecontrollingentity
Rivetprops47(Pty)Ltd(IncorporatedintheRepublicofSouthAfrica)UltimatecontrollingentityincorporatedwithinAustralia
HCIInvestmentsAustraliaPtyLtdControllingentity
HCIAustralianOperationsPtyLtdKeymanagementpersonnel
Thefollowingwerekeymanagementpersonnel(KMP)oftheConsolidatedEntityattheendofthereportingperiod:DirectorsRobertMoran(Chairman)MichaelJacobson(ExecutiveDirector)BrianScheiner(ExecutiveDirector)ExecutiveLionelBaldwin(ChiefFinancialOfficerandCompanySecretary,OceaniaCapitalPartnersLimited)
(a) DetailsofremunerationDetailsofthetotalremunerationofallkeymanagementpersonnel(KMP),includingtheirpersonallyrelatedentities,areasfollows:
Indollars 2019 2018Short-termemployeebenefits 972,929 1,004,229Other-longtermbenefits 4,903 17,890Post-employmentbenefits 78,395 94,884TotalKMPremuneration 1,056,228 1,117,003Remunerationpaidtodirectorsofparentcompany,HCIAustralianOperationsPtyLtd,duringtheperiodwas$924,228(2018:$979,004).
Other
DuringtheyeartheConsolidatedEntityadvancedaloanof$867,857toBoodyAustraliaPtyLtd,anentity inwhich the Consolidated Entity holds a 22.5% interest. This loan bears interest at 7.5% per annum and isrepayableafter3years.Apart from the details disclosed in this note, no keymanagement personnel have entered into amaterialcontractwiththeCompanyortheConsolidatedEntitysincetheendofthepreviousfinancialperiodandtherewerenomaterialcontractsinvolvingkeymanagementpersonnelinterestsexistingatbalancedate.
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24.Otheraccountingpolicies
(a)NewaccountingstandardsandinterpretationsnotyetadoptedCertainnewaccountingstandardsandinterpretationshavebeenpublishedthatarenotmandatoryforthe31March 2019 reporting period. The Consolidated Entity does not plan to adopt these standards early. Inparticular,AASB16-LeaseswhichbecomesmandatoryfortheConsolidatedEntity’s31March2020reportingperiodremovestheclassificationofleasesbetweenfinanceandoperatingleases,effectivelytreatingallleasesasfinanceleasesforthelessee.TheConsolidatedEntityanticipatesthatitsoperatingleasecontractscurrentlyin effect will be impacted by the adoption of AASB 16, and is currently in the process of determining thepotential effects of the implementation of AASB 16 on its financial statements. The expected impact is anincrease in right-of-use assets and lease liabilities on the statement of financial position,with profit or lossimpact being an increase in depreciation of the right-of-use asset, additional finance costs due to interestexpenseontheleaseliabilityandareductioninoperatingleaseexpenditure.(b)NewandamendedaccountingstandardsadoptedbytheConsolidatedEntityA number of new and amended accounting standards became applicable in the current financial year. TheConsolidatedEntitydidnothavetochangeitsaccountingpoliciesormakeandretrospectiveadjustmentsasaresultofadoptingtheseneworamendedaccountingstandards.
AASB15RevenuefromContractwithCustomersappliestoallrevenuearisingfromcontractswithcustomers,unlessthosecontractsareinthescopeofotherstandards.Thenewstandardestablishesafivestepmodeltoaccount for revenue arising from contracts with customers. Under AASB 15, revenue is recognised at anamountthatreflectstheconsiderationtowhichanentityexpectstobeentitled inexchangefortransferringgoodsorservicestoacustomer.Therewasnomaterialeffectofadoptingthestandard.
The adoption of amendments to AASB 9 Financial instruments has changed the Consolidated Entity’saccounting for impairment losses for financial assetsby replacingAASB139’s incurred loss approachwithaforward-lookingexpectedcreditloss(“ECL”)approach.FortradeandotherreceivablestheConsolidatedEntityhas applied the standard’s simplified approach and has calculated ECL’s based on lifetime expected creditlosses.TheConsolidatedEntityhasestablishedaprovisionmatrix that isbasedon theConsolidatedEntity’shistorical credit loss experience, adjusted for forward-looking factors specific to the debtors and economicenvironment.Thischangedidnothaveamaterialimpactofadoption.
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DIRECTORS’DECLARATIONFORTHEYEARENDED31MARCH2019
OCEANIACAPITALPARTNERSLIMITED2019FINANCIALREPORT50
IntheopinionoftheDirectorsofOceaniaCapitalPartnersLimited(“theCompany”):a) theconsolidatedfinancialstatementsandnotessetoutonpages16to49areinaccordancewiththe
CorporationsAct2001,including:
(i) givingatrueandfairviewoftheConsolidatedEntity’sfinancialpositionasat31March2019andofitsperformanceforthefinancialyearendedonthatdate;and
(ii) complyingwithAustralianAccountingStandards,othermandatoryprofessionalreporting
requirementsandtheCorporationsRegulations2001.
b) therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.
TheDirectorsdrawattentionthenotestothefinancialstatements,whichincludeastatementofcompliancewithInternationalFinancialReportingStandardsonpage21.TheDirectorshavebeengiventhedeclarationsrequiredbySection295AoftheCorporationsAct2001fromtheManagingDirectorandChiefFinancialOfficerfortheyearended31March2019.SignedinaccordancewitharesolutionoftheDirectors.
RobertMoranChairmanDatedatSydneythis24thdayofMay2019.
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Level 11, 1 Margaret St Sydney NSW 2000 Australia
Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
INDEPENDENT AUDITOR'S REPORT
To the members of Oceania Capital Partners Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Oceania Capital Partners Limited (the Company), and its
subsidiaries (the Group), which comprises the consolidated balance sheet as at 31 March 2019, the
consolidated income statement, the consolidated statement of other comprehensive income, the
consolidated statement of changes in equity and the consolidated cash flow statement for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i) Giving a true and fair view of the Group’s financial position as at 31 March 2019 and of its
financial performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key audit matter How the matter was addressed in our audit
Impairment assessment of intangible assets
As detailed in Note 8 the Group’s intangible assets
consist of radio licences, brand names, trademarks and
goodwill.
The Group is required to test intangible assets with
indefinite useful lives and goodwill for impairment.
Note 16 details the key assumptions used in
determining the Value in Use (VIU) of each Cash
Generating Unit to which these assets are allocated.
The impairment testing was significant to our audit
because management’s assessment requires significant
judgement in relation to key assumptions, such as
forecast revenue growth, terminal growth rates, future
costs assumptions and discount rates.
To address the key audit matter, our procedures
included, amongst others:
• Comparing the reasonableness of the board
approved budget for the previous financial
year to actual numbers reported in the
financial report for the year ended 31 March
2019;
• Reviewing the reasonableness of the
assumptions applied in the VIU, in particular
revenue growth rates, terminal growth rates,
discount rates and cost assumptions; and
• Performing sensitivity analysis around the
key assumptions.
We also assessed the appropriateness of the
disclosures in Note 16 to the financial statements.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the Group’s annual report for the year ended 31 March 2019, but does not
include the financial report and our auditor’s report thereon, which we obtained prior to the date of
this auditor’s report, and the annual report, which is expected to be made available to us after that
date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom
our report is prepared.
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Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 13 of the directors’ report for the
year ended 31 March 2019.
In our opinion, the Remuneration Report of Oceania Capital Partners Limited, for the year ended 31
March 2019, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO East Coast Partnership
Arthur Milner
Partner
Sydney, 24 May 2019
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