annual report - logicamms · 2015 annual report 3 ... petromod which took effect from 1 july 2015....

ANNUAL REPORT

LogiCamm

s Limited | A

NN

UA

L REPORT 2015

In FY15, LogiCamms reported a sustainable improvement in profitability, driven from strong project performance and improved margins. Our new Consult Deliver Maintain model will build on these operating improvements and strong performance in our customer contracts. Into FY16, we remain focused on providing competitive offerings in our core hydrocarbons market, particularly in asset performance and the gas pipeline sector, as well as deploying our specialised skills in minerals and metals and infrastructure sectors.

Revenue ($m)

97.8

FY11

123.1

FY12

129.5

FY13

133.8

FY15

127.9

FY14

Dividend per share(cents per share)

4.5

FY11

8.5

FY12

9.0

FY13

7.0

FY15

5.5

FY14

FY11

EBITDA ($m)

4.8

11.3

FY12

14.1

FY13

12.1

FY15

6.7

FY14FY11 FY12 FY13 FY15

NPAT ($m)

4.6

10.7 10.6

8.3

FY14

5.4

Return on Equity (%)

7.4

FY11

15.6

FY12

14.0

FY13 FY15

10.2

FY14

6.2

PERFORMANCE HIGHLIGHTS

OUR FUTURE

Earnings per share(cents per share)

7.6

FY11

15.9

FY12

16.6

FY13 FY14

7.2

FY15

12.0

2015 Annual Report 1

ENGINEERING A BETTER TOMORROWLogiCamms supports owners and operators in the hydrocarbons,

minerals and metals and infrastructure sectors with solutions

to optimise the performance of their assets. Our core business

is focused on operating (brownfield) facilities and comprises

engineering consulting, project delivery, asset performance and

maintenance services that aim to reduce costs, improve performance

and enhance value. LogiCamms operates primarily in Australia and

New Zealand employing 550 people, and is listed on the Australian

Securities Exchange.

our visionTo be a market leader delivering outstanding customer solutions.

our purposeTo enhance the value and performance of assets.

our valuesCan Do Approach Teamwork Integrity Delivering Quality Results Commitment to People

contentsPerformance Highlights Inside cover

Our Business 2

Our Work 4

Chairman’s Report 6

Managing Director‘s Report 7

Board and Management 10

Financial Statements 12

Directors’ Declaration 61

Independent Auditor’s Report 62

Lead Auditor’s Independence Declaration 64

ASX Information 65

LogiCamms 2

ConsultHigh value solutions

tailored to customer needs

DeliverDelivery of

engineering projects

MaintainSite based implementation,

maintenance, completions,

testing and shutdowns

õ Offshore topsides

õ Onshore processing facilities

õ Compressor stations

õ Coal seam gas, natural gas, LNG

õ Petrochemical

HYDROCARBONS MINERALS & METALS

õ Materials handling & minerals processing

õ Iron ore

õ Coal

õ Precious metals (gold)

õ Base metals (copper)

õ Rare earths

õ Uranium

õ Phosphates

INFRASTRUCTURE

õ Power generation

õ Water and wastewater treatment / production

õ Onshore pipelines

õ Environmental/approvals

õ Specialist consultancy

OUR BUSINESSWe deliver multidiscipline professional engineering, consulting and maintenance services to optimise the value and performance of our customer’s assets. Our Consult Deliver Maintain business model applies across our core markets of Hydrocarbons, Minerals and Metals and Infrastructure. The model allows us to address a diverse range of our customer’s needs and continue to develop our own growth opportunities.

Revenue by Sector

30% 57% 13%FY13

InfrastructureMinerals & MetalsHydrocarbons

57%

65% 29% 6%

36% 7%FY14

FY15

20% 50% 30%FY12


Our Strategy for growth

Each line of business in our Consult Deliver Maintain model complements the others, providing

opportunities to offer a more comprehensive range of services for our customers. This differentiates

LogiCamms from our competition and increases growth opportunities across our business.

õ Customised professional and technical training solutions and competency assurance services

õ Environmental consulting, approvals and assessment

õ Strategic asset management

Asset Performance

õ Maintenance and reliability engineering

õ Maintenance system build and optimisation

õ Shutdown management

Multidiscipline Engineering

õ Engineering and project delivery with strategic focus on brownfield sustaining capital / optimisation projects

õ Leading provider of EI&C systems

Project Delivery

õ EPC, EPCM and D&C delivery models

Site Audits

õ Specialist site audits, implementation, maintenance and completions

Site Implementation

õ Maintenance planning and scheduling

Maintenance Planning

õ Shutdown and turnaround execution

Site Support

õ On-site support

Unique and differentiated capability with opportunities

to grow.

Consult provides

opportunities to Deliver

(Pull through)

Maintain finds

rectification works for

Deliver (Pull in)

Solid base with expansion potential.

Growing interest with solid growth opportunities.

CONSULT DELIVER MAINTAIN

FY15

Future

D

D

C

C M

M

LogiCamms 4

LogiCamms has a diverse portfolio of projects that spans the breadth of our Consult Deliver Maintain services, and the domestic and international operations of our customers.

Key Contracts FY15

Customer Contract Scope Value Creation for Client

Samsung C&T Corporation

Initial EPC contract for the control systems integration at the Roy Hill Mine Site, and subsequent Commissioning scope

õ Deep domain knowledge in control systems ensured the effective delivery of an effective solution to the Roy Hill Mine

Epic Energy EPC capital works contract for the Moomba to Adelaide Pipeline

õ Project delivered safely, on time and within budget

Oil Search Competency assurance services to deliver training and development packages for office and site-based workforces

õ Leading learning and development systems and strategies

õ Specialist skill set

OUR WORK


We offer services across all phases of the delivery lifecycle. For our customers, this brings opportunities for an EPCm-capable provider to add value earlier in the identification and scoping of projects, and carry this value through to delivery. At the critical start-up phase, our asset performance services bring assurance to the transition from design and to ongoing operating performance.

Key Customers

Complete lifecycle solutions

Define opportunity Conceptual Studies

Determine project feasibility and alignment with business strategy

Project assessment Selection framework, scoping, feasibility engineering

Select the preferred development options and execution strategy

Feasibility Completed design Front end, basic engineering

Finalise project scope, cost and schedule

Long lead items

FRONT END LOADING EXECUTION

PROJECT FINANCE GATE

START-UP & OPERATIONS

Engineering, Procurement, Construction and Commissioning

Produce an operating asset consistent with scope, cost and schedule

Evaluate and operate asset to ensure performance to specifications and maximum return to the client

GATE GATE GATE GATE

1 Identify 2 Select 3 Define 4 Execute 5 Operate

PORTION OF WORK FROM BROWNFIELD (OPERATING) FACILITIES AND PROJECTS.

PEOPLE TRAINED DURING FY15 BY LOGICAMMS’ REGISTERED TRAINING ORGANISATION, COMPETENCY TRAINING.

5200 80%

LogiCamms 6

LogiCamms reported statutory net profit after

tax (NPAT) of $8.3 million, which represents an

increase of $3.4 million from the 2014 financial

year. This equates to earnings per share of

12.0 cents, compared with 7.2 cents in the

previous financial year.

Based on this improved performance, the

Board has declared a final dividend of

3.5 cents per share, which brings the full year

dividend to 7.0 cents per share, franked at

50 per cent. The record date for the final

dividend is 11 September 2015 and the

payment date is 25 September 2015.

LogiCamms maintained strong operating cash

flow during the reporting period, with a net

cash position at the year-end of $21.9 million

and no outstanding borrowings.

The Company’s share buyback program was

completed on 26 May 2015, with more than

2.7 million shares acquired at a cost of

$1.96 million since the program commenced

on 11 September 2014.

While market conditions across our key sectors

of hydrocarbons, minerals and metals and

infrastructure continue to be challenging,

we see significant opportunities in our

core business of enhancing the value and

performance of our customers’ existing assets.

To more fully access these opportunities, we

have structured the business around three key

lines: Consult, Deliver and Maintain. Our services

have historically been delivered primarily

through the core engineering and project

expertise of our Deliver team. The Consult

business houses specialist offerings including

Asset Performance, Competency Training (our

Registered Training Organisation) and Monarc

Environmental, which we acquired in March

2015. The Maintain business is based on our

site implementation expertise and has a range

of opportunities to expand organically and

through targeted investments, as demonstrated

by our first acquisition in this space, Petromod

which took effect from 1 July 2015.

On 2 March 2015, Steve Banning returned to

the position of Managing Director. Steve has

brought continuity of focus on the Company’s

strategic objectives particularly with regard to

asset performance and enhanced capabilities

in the hydrocarbons sector. The Board and I

look forward to Steve’s continued stewardship

of the business and drive into the future.

Richard Robinson became a non-executive

director of LogiCamms on 26 May 2015

and I would like to welcome Richard to the

Board. His insights from more than 35 years

in operational and commercial roles in the oil

and gas industry in Australia and Papua New

Guinea will greatly contribute to developing

our growth strategy.

Excellence in health and safety remains

fundamental to the business of LogiCamms,

and we continued to perform well in this

important area during the 2015 financial

year. Our Zero Harm philosophy is central

to the way in which the Company operates

and is something our customers expect as a

minimum requirement.

The market outlook across the sectors in which

the Company operates remain challenged,

notwithstanding strong opportunities in

specific markets and sub-sectors. Within the

hydrocarbons sector, the significant capex

in onshore and offshore gas processing in

Australia and New Zealand has peaked in

this cycle and the sector is moving into an

operational phase. LogiCamms is well placed to

capitalise on this cycle having well established

brownfield offerings, including through

our Asset Performance business. Within the

hydrocarbons sector, we are also seeing

increasing opportunities in the gas pipeline

sector, with our capabilities having been

recently deployed on a large EPC project for

the Epic owned Moomba to Adelaide Pipeline.

The Mining and Minerals sector remains

under margin pressure, however our specialist

skills including control systems integration,

have provided us with the opportunity to

successfully deliver a significant project for

the Roy Hill iron ore mine.

LogiCamms has demonstrated its ability to

rapidly adapt to shifting market conditions

throughout the 2015 financial year. Having

completed the transition to a more streamlined

and sustainable cost structure, we have also

focused on the Consult, Deliver and Maintain

lines of business to access more opportunities

through targeted acquisitions and investments.

The Company is aware that opportunities exist

through strategic alliances, joint ventures or

combining our business with other suitably

aligned businesses. In order to assist in this

process, the Company has been working with

independent advisors to review a range of

opportunities to add value to our shareholders.

In closing I would like to thank our leadership

team and the directors for their continued

commitment to the success of LogiCamms

throughout the year. I would also like to

acknowledge the people of LogiCamms for

continuing to build close relationships with

our customers by delivering positive outcomes.

I have confidence that the Company is well

positioned off the back of its strong culture,

solid results and balance sheet to maximise

its opportunities in the current market.

Peter Watson

Non-Executive Chairman

CHAIRMAN’S REPORTI am pleased to report on LogiCamms’ improved performance during the 2015 financial year with strengthening profit margins and earnings delivered on a modest increase in revenue. The Company has experienced strong contract performance for customers through the recently implemented Consult Deliver Maintain organisation structure and the benefits of our transition program to re-set the cost base.


MANAGING DIRECTOR’S REPORT

LogiCamms has reported earnings before

interest, tax, depreciation and amortisation

(EBITDA) of $12.1 million, which was a

significant improvement from $6.7 million in

the previous financial year. EBITDA margins for

the year averaged more than 9 per cent, and

we are confident that this level of profitability is

sustainable for our operating environment now

and into the foreseeable future.

LogiCamms reported a modest increase in

revenue during the 2015 financial year, up

4.5 per cent to $133.8 million (FY2014:

$127.9 million). This increase was delivered

with reduced staff numbers as we continued to

adjust our workforce profile in line with market

conditions. The Company’s workforce currently

stands at approximately 550 people, down

from 610 at the end of the 2014 financial year.

The Company’s ongoing program to deliver a

sustainable cost structure for the business has

shown a reduction in annual overheads of

$5 million so far.

The principal driver of improved profitability was

our performance on major customer contracts.

The contract with Epic Energy to deliver

engineering, procurement and construction

(EPC) services for the .Moomba to Adelaide gas

pipeline was completed at the end of FY2015

safely, on schedule and within budget.

We continue to work with major customers

including Origin Energy, Santos, APA and

Jemena. We also continue to expand our

specialist pipelines capabilities through

the successful delivery of EPC contracts, to

complement our offshore hydrocarbons

expertise. Our positioning with these

customers and our intellectual property

developed over many years in the

hydrocarbons space has allowed LogiCamms

to maintain a strong market position in an

increasingly competitive environment. Our

focus on brownfield asset performance

and optimisation services will create new

opportunities as the onshore LNG processing

market makes the transition from construction

into the operational phase.

Conditions in the minerals and metals market

remain challenging, although opportunities

are available for companies that offer specialist

skills. Our position as a market leader in control

systems integration was reinforced by the

ongoing delivery of the control system for the

mine site at the Roy Hill iron ore project for

Samsung C&T Corporation. The bulk of the fixed

price portion of the contract was delivered in

the reporting period and the project is now

moving into the commissioning phase. In

addition we have moved into the final stages

of commissioning for the Wiggins Island Coal

Export Terminal (WICET) port control system.

We continue to extend our capabilities in the

infrastructure market with the acquisition of

Monarc Environmental in March 2015. Monarc’s

long-standing relationships with power and

water utilities have created opportunities

to introduce an expanded service offering

to those customers, and the business is

performing in line with our expectations.

Although just outside of the reporting

timeframe, we also acquired specialist oil and

gas service provider Petromod effective 1 July.

Petromod has expertise in maintenance and

Electrical Engineering and Hazardous Areas as

well as providing installation, inspection and

commissioning services, primarily to oil and

Total Recordable Injury Frequency Rate

Strong project performance and continued operational improvements during the 2015 financial year supported a sustainable increase in LogiCamms’ profitability, in spite of challenging market conditions. While revenue increased modestly over the previous year and the business benefited from a more streamlined cost profile, strong project performance and our increasing capability in the pipelines market were the fundamental drivers of our improved profit result.

SAFETY PERFORMANCE

WORKFORCENUMBERS

1.3per million

hours worked

550people

LogiCamms 8

gas customers in Western Australia. Petromod

and the Company’s existing maintenance

team in the Pilbara form the foundation of the

Company’s Maintain business.

We continue to reinforce our Zero Harm

safety philosophy and behaviours throughout

the organisation to make them integral to

the daily activities of all our people. This

focus underpinned another excellent safety

performance during the period with only a

single health-related incident recorded out

of a total of approximately one million hours

over the course of the year, giving us a Total

Recordable Injury Frequency Rate of 1.3 per

million hours worked.

Strategic focusLogiCamms has a long track record of

providing our customers with high quality

technical consulting, engineering and training

services. The focus of these services is to

enhance the value and performance of our

customers’ assets.

From these foundations, we have identified

substantial market opportunities in our core

industry sectors: hydrocarbons, minerals and

metals, and infrastructure. We have structured

the business around three lines of business:

Consult, Deliver and Maintain in order to

differentiate LogiCamms and expand the

growth opportunity universe.

The Consult business line incorporates our

services in Competency Training, Asset

Performance and Monarc Environmental.

We have also further reinforced our presence in

Papua New Guinea to provide Consult services

in training and asset performance as well as

engineering services through Deliver to the

growing oil and gas industry as well as the

infrastructure and minerals and metals sectors.

The bulk of our work is carried out in the

Deliver business line, which includes all of our

engineering, project delivery, EPC and EPCM

capabilities across Australia and New Zealand.

Customer relationships in the Consult business

often results in flow on work in our Deliver

business, and further acquisition opportunities

exist with the potential to accelerate these

opportunities.

The Maintain line of business comprises all

of our site implementation, commissioning

and maintenance activities. We are currently

pursuing opportunities to expand this

capability, with the first step being the

acquisition of Petromod.

The Consult, Deliver and Maintain strategy has

broadened the landscape of opportunities

for growth through targeted investments

and acquisitions. We will continue to assess

acquisition opportunities that meet our

strategic, financial and operational criteria,

particularly in the Consult and Maintain

business lines. LogiCamms is well-placed to

fund growth through the combination of a

healthy cash position, strong operating cash

flows and undrawn facilities. Our substantial

financial resources give LogiCamms a unique

position in a market that is likely to undergo

consolidation in the short to medium term.

Deploying these resources will be a key part

of our strategy to re-define the future growth

profile of the business.

I am pleased to acknowledge the people

of LogiCamms for their continuing focus

on delivering outstanding solutions for

our customers, which has delivered a solid

performance improvement over the course of

the financial year. I would also like to thank the

leadership team and Board for their hard work

and support in guiding LogiCamms onto a

sustainable footing for growth.

Steve Banning

Managing Director

We have identified substantial market opportunities in our core industry sectors: hydrocarbons, minerals and metals, and infrastructure.

LogiCamms 10

BOARD AND MANAGEMENT

Paul BowkerDirector Corporate Development & Company Secretary

Paul has an extensive background in corporate development, acquisitions and regulatory roles, with a focus on the energy sector. õ Joined LogiCamms in 2011 õ Former General Manager of Corporate

Development and Governance at LogiCamms

õ Former corporate lawyer at AGL Energy and Linklaters in London

Peter WallNon-Executive Director

Peter is a founding Board member and brings decades of experience in management and directorship positions, with a focus on human resources and corporate governance. õ Joined LogiCamms in 2007 õ Long standing tenure at S. Smith & Sons

(The Yalumba Wine Company) and role in international trade facilitation for the wine industry

Richard Robinson Non-Executive Director

Richard has extensive experience in the Oil & Gas industry in Australia and Papua New Guinea within project management, operations and commercial in both the upstream and downstream sectors, providing consulting services to the Oil & Gas, engineering and construction sectors. õ Joined LogiCamms in 2015 õ Former Executive General Manager

at Oil Search õ Chairman of Kina Petroleum Limited (ASX:KPL)

Giles EveristNon-Executive Director

Giles is a Chartered Accountant with over 20 years of senior finance and management experience. He offers a demonstrated track record of leadership in leading service providers to the resources and energy sector. õ Joined LogiCamms in 2011 õ Non-Executive Director of Decmil Group

(ASX:DGL), Non-Executive Director of Macmahon Holdings Limited (ASX:MAH), Non-Executive Director of Austal Limited (ASX:ASB)

õ Former CFO at Monadelphous Group

Peter WatsonNon-Executive Chairman

Peter is a business leader with over 25 years of experience in engineering, construction and services. He brings a strong background in achieving growth for businesses on a local and global scale. õ Joined LogiCamms 2011 õ Former CEO at Transfield Services (ASX:TSE) õ Chairman, Regional Rail Link Victoria and

AssetCo, and Director of Save the Children

Our Board and Management group are a results-driven team with a drive to build a sustainable, successful and inspiring organisation. The group offers decades of experience in resources and energy sectors on both client-side and consultant-side.

Steve BanningManaging Director

Steve is a seasoned management professional with over 20 years of experience in resources and energy businesses. He brings a strong understanding of strategy as well as Australia’s gas markets to his non-executive position at LogiCamms. õ Former Managing Director of LogiCamms,

joining in 2011 õ Former CEO at Epic Energy, owned by Hastings

Diversified Utilities Fund (ASX:HDF) õ Former Group Manager for Duke Energy


The LogiCamms leadership team brings together extensive market knowledge, diverse skill sets and experience, and a commitment to the ongoing development of capability, services, and opportunities for our clients and our people.

With extensive experience in hydrocarbons, minerals and metals, and infrastructure sectors, LogiCamms’ leadership

team is an empowered group of senior management personnel. Seeking to demonstrate leadership in client service and

performance, each member of the leadership team is accountable for a specific operational, service delivery, business

services, or business development mandate. The group is collectively accountable for overall business performance, the

effective implementation of key strategic and operational initiatives, developing people and services, enabling enhanced

knowledge share between our people, customers, and industry, and demonstrating LogiCamms core Values in action.

Together the leadership team brings a diverse skill set to clients and the business comprising:

õ Market knowledge, with experience on both contractor-side and operator-side;

õ Commercial acumen, including experience managing and building businesses of varying sizes; and

õ People and team development, with a background in building high performing teams.

Geoff Jenkins Director Projects

Steve Banning Managing Director

Paul Walker Director Minerals, Metals & Infrastructure

Iulius Mincu Director Oil & Gas

Paul Bowker Director Corporate Development/Company Secretary

David Harris Director Finance

Karsten Guster Director Strategy

Flora Furness Director Deliver

LogiCamms 12

Directors’ Report 13

Consolidated statement of profit or loss and other comprehensive income 31

Consolidated statement of financial position 32

Consolidated statement of changes in equity 33

Consolidated statement of cash flows 34

Notes to the financial statements 35

1. General Information 35

2. Basis of preparation 35

3. Significant accounting policies 35

4. Operations 37

5. Operations – Operating assets and liabilities 42

6. Investment in long term assets 45

7. Capital and reserves 48

8. Risk 49

9. Corporate and Group 55

Directors declaration 61

Independent auditor’s report 62

FINANCIAL REPORT


Your directors present their report on LogiCamms Limited (“the Company”) and its controlled entities (“the Group”) for the financial year ended 30 June 2015.

Principal Activities LogiCamms is a provider of professional engineering and consulting services. It works with leading owners and operators of hydrocarbons, minerals

and metals and infrastructure assets to enhance productivity and efficiency through improved performance, increasing the value of customers’

operations. LogiCamms’ core business units include engineering consulting, project delivery, maintenance, asset performance services and training.

These services are provided predominately across Australia and New Zealand through office locations in Brisbane, Perth, Adelaide, Melbourne and

New Plymouth in New Zealand, as well as through regional offices in Port Moresby, Mackay and Whyalla.

Operating and Financial Review

a. Financial Performance OverviewA summary of the Group’s operating results for the year ended 30 June 2015 is below:

2015 $’000

2014 $’000

Revenue 133,838 127,890

Profit before tax 10,227 4,660

Income tax benefit / (expense) (1,899) 346

Profit for the year attributable to equity holders in the Company 8,328 5,006

Basic earnings per share (cents per share) 12.0 7.2

Diluted earnings per share (cents per share) 12.0 7.0

The Group’s financial results in 2015 improved across the following key metrics.

õ Revenue increased to $133.8 million (up from $127.9 million in 2014, an increase of 4.6%)

õ Profit before tax increased to $10.2 million (up from $4.7 million in 2014, an increase of 119.6%)

õ Profit after tax increased to $8.3 million (up from $5.0 million in 2014, an increase of 66%)

õ Earnings before interest, tax, depreciation and amortisation (EBITDA)1 was $12.1 million (up from $6.7 million in 2014, an increase of 80.6%)

õ EBITDA as a percentage of revenue was 9.0% (up from 5.2% in 2014).

Profit after tax includes research and development incentives recognised as tax credits of $0.9 million, compared with $1.2 million in the prior year.

The research and development incentives recognise innovation across the business and the unique nature of services LogiCamms provides as part of

delivering solutions to customers.

The key impacts on revenue and earnings over the prior corresponding period were:

õ effective project delivery, including on major EPC contracts; and

õ the transition program to re-establish a sustainable cost structure for the business which was completed during the reporting period and has

reduced annual overheads by $5 million whilst retaining core capability within the business.

Throughout 2015, competitive pressures were experienced across the Company’s range of services and industries in which it operates, including in

the hydrocarbons, minerals and metals and infrastructure sectors. Despite those pressures, the Company has grown revenue and returned to margin

performance in line with its stated goal for 2015 of 8% – 10% EBITDA.

DIRECTORS’ REPORTfor the year ended 30 June 2015

1 The reference to EBITDA is unaudited and is unreviewed and is intended to provide a measure of financial performance before the impact of non-cash items such as depreciation and amortisation, as well as interest income and expenses. EBITDA references in this Directors Report include profit from equity accounted investments.

LogiCamms 14

The increase in revenue for the Company was delivered with reduced

staff numbers as the business continued to adjust its workforce profile in

line with market conditions. The Company’s workforce currently stands

at approximately 550 people, down from 610 at the end of the 2014

financial year.

The key drivers for supporting future revenue and earnings growth

will continue to be the following key strategic initiatives:

õ A strong focus on optimisation of brownfield assets – working closely

with customers to enhance the performance of their operations has

underpinned a solid earnings result for LogiCamms and helped to

strengthen our customer base and relationships and diversify earnings

across a range of services and industries;

õ The reorganisation of the business into 3 service streams, being

Consult, Deliver and Maintain, to underpin the Company’s continued

expansion into specialist consulting based services and also an in field

maintenance capability; and

õ continued growth of capabilities within key sectors, such as

the midstream hydrocarbons sector (pipelines), where growth

opportunities exist in an otherwise tight market.

b. Performance Across Markets The Company operates across three key markets, being hydrocarbons,

minerals and metals and infrastructure. During the reporting period

approximately 80% of revenue was derived from brownfield (sustaining)

works as part of our ongoing strategy to focus in this area. Hydrocarbons

again formed the majority of work at 65% of revenue (up from 57% the

previous year) which reflected a continued expansion of capability in

the gas pipeline sector, through clients including EPIC Energy, APA group

and Jemena.

The minerals and metals sector accounted for 29% of revenue, down

from 36% the previous year. Despite reduced revenue in from minerals

and metals, the Company delivered solid margins from this sector,

including through the successful delivery of a contract for Samsung C&T

Corporation in connection with the Roy Hill mine.

The Company also provides services to the infrastructure sector, including

the water, power, sugar and cement industries. Although infrastructure

markets remain an important part of the Company’s long term strategic

plan, during 2015 revenue from infrastructure represented 6% of revenue

(2014: 7%).

The Company’s work in international markets was focussed primarily

around existing operations in New Zealand through ITL, as well as an

increasing workflow out of PNG. During the year, the Company also

established a trading entity in PNG to further facilitate growth in that

market. Ad hoc projects were conducted in Asia, predominately through

Competency Training, our wholly owned Registered Training Organisation.

c. Market Review and OutlookThe market for services to the hydrocarbons and minerals and metals

markets continues to be highly competitive, particularly given the

decline in underlying commodity values over 2015. However, within

those markets, there remain significant opportunities for LogiCamms

to apply its asset performance services to allow its customers to extract

more value from existing assets. This has been evident particularly in the

upstream and midstream services in the hydrocarbons sector.

In the minerals and metals markets, the Company has seen a strong

performance from key projects, including its work at the Roy Hill Iron Ore

mine. In addition, there has been renewed work in the coal sector as well

as other commodities that have been under price pressure throughout

the majority of the year.

The Company however, remains ready to respond to any further

softening in the resources sectors in which it operates. Should the

softening of the resources sector continue, leading to a decline in

engineering and consulting services, there is a risk that the company and

the industry will be subject to further margin pressure.

d. Working Capital ManagementThe Company has had a strong focus on working capital management

during the year. This focus has resulted in a strong positive operating cash

flow of $18.6m (2014: $5.6m).

The Company’s also has a strong capital position, with $21.9m in cash

at 30 June 2015, which allowed for the payment of cash consideration

for Monarc Environmental and Petromod Pty Ltd (payment for which

occurred post 30 June 2015).

e. Statement of Financial PositionThe Company’s total assets increased to $108.4 million in 2015

(2014: $105.2 million). The end of year cash balance of $21.9 million

was significantly up from $12.2 million in 2014.

The net assets and equity of the Group increased to $82.9 million at

30 June 2015 from $80.8 million at 30 June 2014. This increase is due to

the net result of the profit after tax of $8.3 million, dividends declared

and paid during the year of $4.5 million and the acquisition of Monarc

Environmental.

The Group’s total liabilities increased to $25.5 million (2014: $24.4 million).

The Group continues to operate debt-free, and has utilised $4.9 million

of its current $22.0 million bank guarantee and bonding facilities

(2014: utilised $6.0 million of $22.0 million). The Company’s financing

facilities with its existing bankers include a $10.0 million working

capital multi-option facility (that remains undrawn).


Operating and Financial Review (continued)



Dividends paid or declared by the Company to members since the end

of the previous financial year were:

Cents per

share

Total amount

$’000Franked/

unfrankedDate of

payment

Declared and paid during the year 2015

Final ordinary

for the year ended

30 June 2014 3.5 2,492

Franked

100%

25 September

2014

Interim ordinary

for the year ended

30 June 2015 3.5 2,445

Franked

50%

26 March

2015

Franked dividends declared and paid during the year were franked at the

rate of 30 per cent.

Declared after end of year

After the balance sheet date a dividend of 3.5 cents per share partially franked to 50% has been declared by the directors, representing a total amount of $2.4 million. The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2015 and will be recognised in subsequent financial reports.

f. Key Strategic GoalsDuring the reporting period, the Company was reorganised around three key lines of business: Consult, Deliver and Maintain, to differentiate the Company and expand the universe of growth opportunities. The Consult business line incorporates services in Competency Training, Asset Performance and Monarc Environmental.

The bulk of the Company’s work is carried out in the Deliver business line, which includes engineering, project delivery, and EPC and EPCM capabilities across Australia and New Zealand. The Company has also reinforced its presence in Papua New Guinea to provide Deliver services particularly to the growing oil and gas industry, as well as Consult services in training and asset performance.

The Maintain line of business comprises all of the Company’s site implementation, commissioning and maintenance activities. This capability has been expanded with the acquisition of specialist oil and gas electrical and installation business, Petromod, effective 1 July 2015 and other opportunities are being pursued.

The Company is well positioned to leverage its experience as the onshore LNG sector moves into the commissioning stage, based on its established hydrocarbons track record and focus on brownfield asset performance and optimisation. The Company is also continuing to build on its strong capabilities and existing contracts to deliver effectively to

the midstream sector, including gas pipelines and storage. The company’s

acknowledged market leadership in control systems integration and

automation presents opportunities in the minerals and metals sector, in

the context of the industry’s heightened drive for brownfield efficiencies

and plant optimisation.

The Consult Deliver Maintain strategy has broadened the range of opportunities for growth through targeted investments and acquisitions.

The Company will continue to assess acquisition opportunities that meet strategic, financial and operational criteria, particularly in the Consult and Maintain business lines. The Company’s balance sheet strength puts it in a strong position in a market that is likely to undergo consolidation in the short to medium term, and deploying these resources will be a key component of the strategy to re-define the future growth profile of

the business.

g. Significant RisksThe Group is subject to a number of external, business, financial and

operational risks. As the Group is a service provider to the hydrocarbons,

minerals and metals and infrastructure industries, any exposure that those industries have to risk factors will have some impact on the Group’s business. As an example, the volatility in oil and gas and metals and minerals prices throughout 2015, impacted on the development of new projects and re-investment in existing projects of a number of our customers. Although the Group has strategies in place to mitigate the impact of this, such as industry and service diversification, the volatility and uncertainty from such events may impact the nature and timing of work under contract.

The Group is also subject to other external risks such as currency exchange movements, changes in demand for key products (driven by changes in factors such as the Chinese economy) and political risk. The majority of the Group’s revenues are based in Australia and New Zealand and denominated in Australian and New Zealand dollars, and as such, foreign currency risks are somewhat reduced.

As a professional services business, the attraction, retention and investment in our people is critical to the success of the business. The Group manages the risks associated with a people-based business through significant investment in training, attraction and retention strategies.

The Group also faces risks in its relationship with customers. In order to optimise the delivery of services to customers, the Group has in place a robust risk management and governance framework that applies to the assessment, tender and delivery of customer projects.

The Group is exposed to financial risks, which are partly inter-dependant on the external and business risks mentioned above. The Group manages working capital closely to ensure minimal volatility in results and the appropriate delivery of services within commercial agreed terms. Although the Group does not currently have any borrowings, its ability to fund future expansion and acquisitions may be dependent on the availability of debt facilities on suitable terms.

In relation to the operational risks to the business, the Group has a strong focus on ensuring that work is carried out on terms that satisfy the its internal policies relevant to appropriate return and risk. The Group has a focus on long term sustainable projects and relationships and applies margins to work accordingly.

The Company also has detailed procedures in place to ensure that the

Company is staffed efficiently and that its people are working at a level of

business that balances the goal of strong margins with that of ensuring

the Company’s people are working in an environment that encourages

sustainable personal development and growth opportunities.

The Company maintains a register of key risks and has in place crisis

management and disaster recovery plans.

LogiCamms 16

Information on Directors The directors in office at any time during or since the end of the year were:

MR PETER WATSON Independent Non-Executive Director and Chairman, Appointed 2 June 2011. Year last re-elected: 2013.

Peter Watson has 25 years of international experience in the engineering,

construction and services industries. As former Chief Executive Officer

of Global Services Group, Transfield Services (ASX:TSE) from 1999 to

2009, Peter stewarded the company through its listing in 2001 and led

its transformation from a local operator to a global business. Prior to

his tenure as Chief Executive, Peter undertook a variety of project and

management roles with Transfield Services and Transfield Construction.

Peter is a member of the Nomination and Remuneration Committee,

a member of the Audit and Risk Committee and a member of the

Projects Committee.

Current directorships held in other listed entities

None

MR GILES EVERIST Independent Non-Executive Director, Appointed 5 April 2011. Year last re-elected: 2014.

Giles Everist is a Chartered Accountant and a member of the Institute of

Chartered Accountants (England and Wales). Giles joined the Group in

2011 bringing over 20 years’ experience. He has held senior executive roles

with Coopers and Lybrand, Rio Tinto, Fluor Australia, and more recently

Monadelphous Group where he was Chief Financial Officer from 2003

to 2009, during which the company experienced significant growth and

development. Since that tenure Giles has joined a number of Boards in the

public, private and not for profit sectors including as Non-Executive Director

of Decmil Group Limited, Non-Executive Director of McMahon Holdings

Limited, Non-Executive Director of Austal Limited, Chairman of Surton

Technologies and Chair of the Audit Committee of Perth Home Care Services.

Giles is a member of the Nomination & Remuneration Committee and

Chair of the Audit and Risk Committee.


Non-Executive Director of Decmil Group since December 2009,

Non-Executive Director of McMahon Holdings Limited since June 2013

and Non-Executive Director of Austal Limited since November 2013.

MR PETER WALL Independent Non-Executive Director Appointed 8 October 2007. Year last re-elected: 2012.

Peter has extensive management expertise, including a focus on human

resources and corporate governance. Peter had a long tenure at S. Smith

& Son (The Yalumba Wine Company); is a former board member of SA

WorkCover Corporation and Chairman of the South Australian Vocational

Employment Education & Training Board. Peter is Chair of the Nomination &

Remuneration Committee and a member of the Audit and Risk Committee.


None

MR STEVE BANNING Managing Director Appointed 2 March 2015. Year last re-elected: 2014 (as a Non-Executive Director at that time).

Steve Banning has extensive experience across the resources and energy

industry. Prior to his role as Managing Director at LogiCamms, he was

Managing Director of Epic Energy from 2007 until 2011. In his role as

MD of Epic Energy, Steve led the business through a period of significant

growth. Steve’s other roles have included General Manager Commercial

of Epic Energy, Group Manager of Duke Energy and various roles within

ExxonMobil. Steve has a Bachelor of Science (Honours).

Steve Banning was re-appointed as Managing Director on 2 March 2015,

having formerly been Managing Director from 10 November 2011 until

12 May 2014 and Non-Executive Director from 12 May 2014 until his

re-appointment as Managing Director.


None

MR RICHARD ROBINSON Independent Non-Executive Director Appointed 26 May 2015. Year last re-elected: not applicable.

Richard Robinson has more than 35 years’ experience in the Oil & Gas

industry in Australia and Papua New Guinea. Richard’s experience covers

project management, operations and commercial in both the upstream

and downstream sectors. Richard held senior roles for more than 10 years

at Oil Search Limited, retiring from his role as Executive General Manager

in 2013. He has held a number of roles providing consulting services to

the Oil & Gas, engineering and construction sectors.


Chairman of Kina Petroleum Limited having been appointed as a

Non-Executive director in 2013.

Mr Matthew Adamo Managing Director Appointed 12 May 2014 and resigned on 2 March 2015. Year last re-elected: not applicable.

Matthew Adamo was formerly the Chief Financial Officer of LogiCamms

from February 2011 until his appointment as Managing Director.

Matthew previously held senior roles with Ernst & Young, WorleyParsons

and Shell International.


None




Information on Company Secretary Paul Bowker was appointed to the position of Company Secretary on 18 July 2011 and also holds the position of Director Corporate Development, having

held the position of Chief Financial Officer of the Group until 2 March 2015. Paul holds a Bachelor of Laws, Master of Laws, and Master of Applied Finance and

Investment. Paul has a corporate finance and regulatory and compliance and background gained from working in the corporate and government sectors in

Australia and the United Kingdom, including senior roles with AGL Energy, Linklaters Lawyers and the Australian Securities & Investments Commission.

Directors’ meetingsThe number of directors’ meetings (including meetings of committees of directors) and number of meetings attended by each of the directors of the

Company during the financial year are:

Director Board Meetings Audit & Risk Committee Meetings

Nomination and Remuneration Committee

Meetings

Project Committee Meetings1

A B A B A B A B

Peter Watson 12 13 3 3 3 3 – –

Matthew Adamo 8 9 – – – – – –

Giles Everist 12 13 3 3 3 3 – –

Peter Wall 13 13 3 3 3 3 – –

Steve Banning 13 13 3 3 1 1 – –

Richard Robinson 2 2 – – – – – –

A Number of meetings attended B Number of meetings held during the time the director held office during the year

1 The Project Committee meets on a case by case basis in relation to significant projects. There were no significant projects during the year that were not able to be implemented by management or through the regular Board approval process.

Corporate governance statementLogiCamms Limited and the board are committed to achieving and demonstrating the highest standards of corporate governance. LogiCamms

Limited has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (3rd edition)

published by the ASX Corporate Governance Council. The 2015 corporate governance statement is dated as at 26 August 2015 and reflects the

corporate governance practices in place throughout the 2015 financial year. The 2015 corporate governance statement was approved by the board

on 26 August 2015. A description of the group’s current corporate governance practices is set out in the group’s corporate governance statement

which can be viewed at www.logicamms.com.au/investor-relations/corporate-governance.

Remuneration report – auditedThis Remuneration Report outlines the Key Management Personnel (KMP) remuneration arrangements of the Group in accordance with the

requirements of the Corporations Act 2001 and its Regulations. For the purpose of this report KMP of the Group are defined as those persons having

authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any directors

(whether executive or otherwise).

ContentsThe report includes:

õ an overview of the Company’s approach to executive reward;

õ the governance of remuneration arrangements;

õ the components of executive remuneration;

õ the remuneration outcomes for the 2015 financial year and the links between remuneration and company performance;

õ an overview of executive service agreements;

õ remuneration for the 2015 financial year; and

õ Non-Executive Director remuneration.

LogiCamms 18

Overview of the Company’s approach to executive rewardThe Board has adopted a remuneration policy that takes into account the

current size and nature of the Company’s operations.

Remuneration of KMPs is set at levels to reflect market conditions and

encourage the continued services of KMPs including by benchmarking

KMP remuneration to determine where roles are currently positioned,

reviewing base salary, short-term incentives and long-term incentives.

The Group’s remuneration strategy recognises and rewards performance

in a way that is consistent with general practices in the markets in which

the Group operates. The Group’s remuneration philosophy is focused on

the following key principles:

õ Alignment to sustainable long-term value creation

õ Assist the attraction and retention of highly skilled employees

õ Be competitive within the global markets in which the Group operates

õ Alignment is best achieved through high levels of equity ownership

õ Provide high rewards for true outperformance

õ Simple and transparent remuneration framework

õ Consistent remuneration framework across the organisation

õ Strategically align talent and succession planning for future growth

Governance of remuneration arrangementsTo determine the remuneration of its KMP the Company has a

Nomination and Remuneration Committee. The Committee makes

recommendations to the Board in relation to the remuneration of KMP,

including the fixed and at risk components of remuneration, which

currently includes Incentive Plans as further described below. Based on

the information and recommendations provided by the Committee,

the Board applies its discretion to determine remuneration, including

any changes to fixed components of KMP remuneration as well as any

awards under the Incentive Plans. The Committee assists the Board in

establishing human resources and compensation policies and practices

including the specific remuneration (including base pay, incentive

payments, bonuses, equity awards, superannuation, retirement rights,

termination payments and services contracts) of the Managing Director

and other KMP. The proceedings of each Committee meeting are

reported directly to the Board. The Chairman of the Committee shall be

a Non-Executive Director, with all other members being members of the

Board. The Managing Director is invited to attend Committee meetings.

The Group’s Nomination and Remuneration Committee engaged

external consultants to assess the market competitiveness of

remuneration in the 2015 financial year. The consultants engaged were

PricewaterhouseCoopers with terms of reference to assess market

data on remuneration for comparable companies and positions.

PricewaterhouseCoopers did not, and were not engaged to, provide

a remuneration recommendation and, as such, no disclosures

are required under the Corporations Act in relation to the role of

PricewaterhouseCoopers.

2015 Executive Remuneration Framework The primary objective of LogiCamms’ executive remuneration strategy is creating a framework that supports sustainable growth over the long term, recognising that this is in the interest of all stakeholders. This framework seeks to reward, retain and motivate senior executives in a manner aligned with shareholders.

LogiCamms 2015 financial year saw earnings increase compared to the 2014 financial year. For the 2015 financial year, Profit after tax increased to $8.3 million (up from $5.0 million in 2014, an increase of 66%) and Earnings before interest, tax, depreciation and amortisation (EBITDA)2 was $12.1 million (up from $6.7 million in 2014, an increase of 80.6%). Under the Key Executive Remuneration Framework the incentive outcomes for

the 2015 financial year were as follows:

Incentive Remuneration Outcomes

Short Term Incentive Outcomes

Refer to the table on page 20 for STI target opportunity payout ratio for those KMP’s who were participants in the STI in 2015.

Long Term Incentive Outcomes

Refer to the table on page 20 for LTI target opportunity payout ratio for those KMP’s who were participants in the LTI in 2015.

This Report specifically sets out remuneration information for the key people who can directly influence the long term strategic direction of the Company and had the authority for planning, directing and controlling the affairs of the Group during the financial year ended 30 June 2015. They include the Managing Director and other key executives and

Non-Executive Directors of the Company, as set out below:

Name Title

Non-Executive Directors

Peter Watson Chairman

Giles Everist Director

Peter Wall Director

Richard RobinsonA Director

Executive KMP

Steve BanningB Managing Director

Paul BowkerC Director – Corporate Development

Karsten Guster Director – Strategy

David HarrisD Director – Finance

Iulius MincuE Director – Oil & Gas

Geoff JenkinsF Director – Major Projects

Matthew AdamoG Managing Director

A Mr Richard Robinson was appointed as a Non-Executive Director on 26 May 2015 B Mr Banning became Managing Director on 2 March 2015, previously being a

Non-Executive Director.C Mr Bowker became Director - Corporate Development on 2 March 2015, having

previously been Chief Financial OfficerD Mr Harris became Director - Finance on 2 March 2015, having previously been Group

Financial ControllerE Mr Mincu was appointed on 7 April 2015F Mr Jenkins ceased to be a KMP from 1 July 2015G Mr Adamo resigned on 2 March 2015


Remuneration report – audited (continued)

2 The reference to EBITDA is unaudited and is unreviewed and is intended to provide a measure of financial performance before the impact of non-cash items such as depreciation and amortisation, as well as interest income and expenses. EBITDA references in this Directors Report include profit from equity accounted investments.



Except as noted, the named persons held their current position for

the whole of the financial year and since the end of the financial year.

Components of Executive RemunerationRemuneration and other terms of employment for the Managing Director

and other executive KMP are formalised in Executive Service Agreements

and incentive plans. The total remuneration packages for these KMP contain:

õ A fixed component – Base salary including superannuation. This

is expressed as a specific amount that the executive may take in

a form agreed with the Company and is determined based on

market reference, the scope and nature of the individual’s role, their

performance and experience.

õ At risk components – The Board considers that the financial and

operational performance and prospects of the Company are strongly

linked to creating shareholder wealth. Accordingly, the Board has put

in place at-risk components to remuneration based on success in

delivering on pre-defined targets. At-risk components are in the form of:

– Short Term Incentive (STI) – payable in equal proportions of cash

and ordinary shares in the Company. Outcomes are based on

LogiCamms financial and operational performance over the financial

period, in addition to individual performance measures; and

– Long Term Incentives (LTI) – payable through the issue of

Performance Rights. These LTI instruments are issued for the

purposes of aligning their interests with those of shareholders by

performance against strategic initiatives developed to deliver long

term sustainable shareholder value creation.

Fixed RemunerationThe fixed remuneration component of salaries includes a base salary and

superannuation. Fixed remuneration may be allocated at the executive’s

discretion to cash, superannuation (subject to legislative minimum),

motor vehicles and certain other benefits. The fixed remuneration

component is determined based on the scope and nature of the

individual’s role, their performance and experience. In financial year

2015, LogiCamms engaged external consultants to enable the Company

to assess the market competitiveness of remuneration within the

business, including the fixed remuneration levels. LogiCamms sets the

fixed remuneration based on the assessment of market data of external

consultants as well as through the Company’s internal metrics and data.

Short Term Incentive (STI) Under the terms of the STI, each participant has an annual target STI

award based on a percentage of base salary for the year. Payment of

the individual’s target STI is dependent on performance against the key

performance drivers set out in the table below.

For financial year 2015, KMP had a maximum STI opportunity ranging

from 20% to 50% of their fixed remuneration where targets are met.

However, if the threshold performance for a measure is not met, the

payment may be reduced.

The STI payment is subject to the participant being employed with the

Company at the time the STI is due to be paid.

STI awards are determined after a review of performance against the key

performance drivers by the Board at the end of the financial year.

Award Criteria for STIThe award criteria for the STI are based on achievement against the

Performance Objectives for the Company for the 2015 financial year. The

table below sets out the criteria and performance against those criteria:

FY15 Scorecard Weight Metric and WeightingPerformance Achieved

Financial 50% EBITDA 40% 20%

Cash

Management

10% 10%

Operational 30% People 10% 10%

Sales Inputs 20% 0%

Individual

Performance Targets

20% Discretionary 20% Individual

basis

The Nomination and Remuneration Committee have reviewed the

performance of the KMP against the above criteria and following that

review have made recommendations on the awards to be made under

the STI Plan, which were awarded on 26 August 2015.

Long Term Incentive (LTI)For the 2015 financial year, each of the executive KMP listed above

were participants in the LTI Plan, awards for which are in the form of

Performance Rights. Each Performance Right represents a right to be

issued one ordinary share at a nil exercise price. The Performance Rights

are convertible into ordinary shares as to 50% on 30 June 2016 and 50%

on 30 June 2017. The conversion of each of the Performance Rights

granted under the LTI Plan is subject to the relevant KMP being employed

by the Company at the time of conversion.

Award Criteria for LTIThe award criteria for the LTI are based on achievement against the

Strategic Objectives for the Company for the 2015 financial year. The

table below sets out the criteria and performance against those criteria:

FY15 Strategic Initiatives

Maximum Performance percentage

Performance Achieved

Geographic extension of

hydrocarbons presence 20% 0%

Expansion of Core Engineering

Competencies 20% 16%

Extension of EPC offering 20% 16%

Extension of technical

consulting services 10% 9%

Expansion Asset Performance

Service capability and geography 10% 9%

M&A Acquisition program 10% 9%

Monetisation of existing and

future partnerships and alliances 10% 0%

LogiCamms 20

The Nomination and Remuneration Committee have reviewed the performance of the KMP against the above criteria and following that review have

made recommendations on the awards to be made under the LTI Plan, which were awarded on 26 August 2015.

The vesting criteria with respect to the 2015 LTI are included in the table below.

Vesting Criteria Detail

Performance Period The performance period with respect to the 2015 LTI awards is the year from 1 July 2014

to 30 June 2015.

Vesting The Performance Rights vest into shares for no further consideration on a 1 for 1 basis as to

50% of the number issued on 30 June 2016 and the remaining 50% on 30 June 2017, subject

to tenure at the time of vesting.

If a change of control of the Company occurs the vesting of the Performance Rights will be subject to Board discretion.

On cessation of employment the vesting of Performance Rights will be subject to Board discretion.

Other terms

The LTI dollar value determined for each executive is calculated based on a percentage of the executive’s annual fixed remuneration and for the

executive KMP ranges from 20% to 50%. This level of LTI is in line with current market practice. The number of Performance Rights awarded

to each executive is calculated by dividing the LTI dollar value by the volume weighted average price of the Company’s ordinary shares on

the Australian Securities Exchange over the 30 days to 30 June 2015.

Performance Rights granted under the LTI Plan carry no voting or dividend entitlements. Currently, based on the number of Performance Rights issued

and held pursuant to the LTI Plan, should all of these securities convert to shares they would represent 0.9% of the Company’s issued share capital.

Proportions of fixed and at risk remunerationThe table below also set out LogiCamms’ target mix of fixed and at risk (STI & LTI) components for each of the executive KMP as a percentage of

total remuneration:

Name Title Fixed Remuneration STI LTI

Steve BanningA Managing Director 50% 25% 25%

Paul BowkerB Director – Corporate Development 62.5% 18.75% 18.75%

Karsten Guster Director – Strategy 50% 25% 25%

David HarrisC Director – Finance 72% 14% 14%

Iulius MincuD Director – Oil & Gas 100% – –

Geoff JenkinsE Director – Major Projects 66.7% 16.7% 16.7%

Matthew AdamoF Managing Director 50% 25% 25%

A Mr Banning became Managing Director on 2 March 2015, previously being a Non-Executive Director. Mr Banning becomes eligible to participate in the STI and LTI scheme from 1 July 2015. For the period 2 March 2015 to 30 June 2015, Mr Banning is eligible for a cash incentive based on operational and financial performance metrics during that period.

B Mr Bowker became Director – Corporate Development on 2 March 2015, having previously been Chief Financial OfficerC Mr Harris became Director – Finance on 2 March 2015, having previously been Group Financial ControllerD Mr Mincu was appointed on 7 April 2015 and was not a participant in the 2015 incentive plansE Mr Jenkins ceased to be a KMP from 1 July 2015F Mr Adamo resigned on 2 March 2015





The outcome of the STI and LTI awards for the KMP for 2015 were as follows:

2015 Short Term Incentive Awards

The table below sets out the STI awards payable in cash and equity to KMP under the STI Plan for the 2015 financial year.

Name Key Management Personnel Title STI Award (cash)STI Award (ordinary

shares)Percentage of Target Award Achieved (%)

Steve BanningA Managing Director $83,333 – 100%

Paul BowkerB Director – Corporate Development $29,250 40,068 59%

Karsten GusterC Director – Strategy $45,000 61,644 50%

David HarrisD Director – Finance $18,250 25,000 61%

Iulius MincuE Director – Oil & Gas – – –

Geoff JenkinsF Director – Major Projects $27,750 38,014 60%

Matthew AdamoG Managing Director 0 0 0

A Mr Banning became Managing Director on 2 March 2015, previously being a Non-Executive Director. Mr Banning is eligible for a cash incentive based on operational and financial performance metrics during that period.

B Mr Bowker became Director – Corporate Development on 2 March 2015, having previously been Chief Financial Officer.C Mr Guster became Director – Strategy on 1 July 2015, having previously been Director – Western Operations.D Mr Harris became Director - Finance on 2 March 2015, having previously been Group Financial Controller. The STI awards shown above are the full STI entitlement based on a full year

of service, not pro-rated for his time as a KMP.E Mr Mincu was appointed on 7 April 2015 and was not a participant in the 2015 incentive plans.F Mr Jenkins ceased to be a KMP from 1 July 2015.G Mr Adamo resigned on 2 March 2015.

2015 Long Term Incentive Awards

The table below sets out the Performance Rights awarded under the LTI Plan for the 2015 financial year. These Performance Rights were granted on

26 August 2015.

NameKey Management Personnel Title

2016 Performance

Rights Awarded (#)

Fair Value at Grant per 2016

right ($)

2017 Performance

Rights Awarded (#)

Fair Value at Grant per 2017 right

($)

Percentage of Target Award

Achieved (%)

Steve BanningA Managing Director 63,131 $0.66 69,444 $0.60 100%

Paul BowkerB Director – Corporate

Development

44,318 $0.66 48,750 $0.60 59%

Karsten GusterC Director – Strategy 68,182 $0.66 75,000 $0.60 50%

David HarrisD Director – Finance 27,652 $0.66 30,417 $0.60 61%

Iulius MincuE Director – Oil & Gas – – – – –

Geoff JenkinsF Director – Major Projects 42,025 $0.66 46,250 $0.60 60%

Matthew AdamoG Managing Director 0 0 – – –

A Mr Banning became Managing Director on 2 March 2015, previously being a Non-Executive Director. Mr Banning is eligible for a cash incentive based on operational and financial performance metrics during that period.

B Mr Bowker became Director – Corporate Development on 2 March 2015, having previously been Chief Financial OfficerC Mr Guster became Director – Strategy on 1 July 2015, having previously been Director – Western Operations D Mr Harris became Director – Finance on 2 March 2015, having previously been Group Financial ControllerE Mr Mincu was appointed on 7 April 2015 and was not a participant in the 2015 incentive plansF Mr Jenkins is no longer a KMP from 1 July 2015G Mr Adamo resigned on 2 March 2015

No amount is payable by KMP for the award of the Performance Rights or on exercise of the Performance Rights.

LogiCamms 22

Consequences of performance on shareholder wealthIn considering the Group’s performance and benefits for shareholder wealth, the Nomination and Remuneration Committee has had regard to a

number of factors including profit (as determined under Australian Accounting Standards), dividends, EPS, return on equity and the performance

of the share price.

The Nomination and Remuneration Committee has regard to the following indices in respect of the 2015 financial year and the previous four

financial years.

2015 2014 2013 2012 2011

Profit attributable to owners of the Company (‘000’s) $8,328 $5,006 $11,096 $10,689 $4,630

Dividends paid (‘000’s) $4,884 $4,545 $6,307 $3,208 $4,066

Change in share price -$0.13 -$0.48 $0.21 $0.08 $0.14

Return on equity 10.2% 6.2% 14.2% 15.6% 7.4%

EPS (cps) 12.0 7.2 16.6 15.8 7.6

Profit is considered as one of the financial performance targets in setting the STI. Profit amounts for 2010 to 2015 have been calculated in accordance

with Australian Accounting Standards (AASBs).

The overall level of executive KMP compensation takes into account these and other factors in assessing the performance of the Group and executive

KMP over a number of years. When comparing financial year 2015 to financial year 2014, which are the most relevant years to the current set of

executive KMP, the Group’s profit from ordinary activities after tax increased by 66%. During the same period, total KMP executive compensation

decreased by 20% due to a reorganisation of the Executive Team resulting in a reduction in the number of KMP for the reporting period.

On Market PurchasesAll shares underpinning equity awards may be purchased on market, or be newly issued shares or a combination of both. As at 1 July 2014, the

LogiCamms Employee Share Trust held 760,102 ordinary LogiCamms shares which had been purchased on market in prior periods. During the

2015 financial year, the LogiCamms Employee Share Trust did not acquire any shares and did not receive any newly issued shares. As a result of the

cancellation of the 2014 LTI instruments and the 2013 LTI instruments not achieving conversion hurdles, the Trust had sufficient shares to cover the

2015 Incentive entitlements without the purchase of additional shares during the 2015 financial year.

Overview of the Group’s Current Service Contracts with Key Management PersonnelIt is the Group’s policy that service contracts for executive KMP are unlimited in term but capable of termination upon notice as set out below.

The Group retains the right to terminate a KMP contract immediately by making payment of between 3 and 6 months’ pay in lieu of notice.

The KMP are also entitled to receive on termination of employment their statutory entitlements of accrued annual and long service leave, together

with any superannuation benefits.

The KMP have no entitlement to termination payments in the event of removal for misconduct.

Name & KMP TitleTerm of Agreement and Notice Period

Base Salary Including Superannuation ($) Termination Payments

Steve BanningA No fixed term

6 Months $518,743 –

Paul BowkerB No fixed term

3 Months $330,825 –

Karsten GusterC No fixed term

6 Months $400,000 –

David HarrisD No fixed term

3 Months $317,843 –

Iulius MincuE No fixed term

3 Months $350,000 –

Flora FurnessF No fixed term

6 months $360,000 –

A Mr Banning became Managing Director on 2 March 2015, previously being a Non-Executive Director.B Mr Bowker became Director – Corporate Development on 2 March 2015, having previously been Chief Financial OfficerC Mr Guster became Director – Strategy on 1 July 2015, having previously been Director – Western OperationsD Mr Harris became Director – Finance on 2 March 2015, having previously been Group Financial ControllerE Mr Mincu was appointed on 7 April 2015F Mrs Furness was appointed on 1 July 2015





Overview of the Company’s service contract with Steve Banning, Managing Director (appointed on 2 March 2015, having previously been a non-Executive Director)Mr Banning was appointed to the Managing Director position on 2 March 2015, for a term with no fixed end date, LogiCamms may terminate

Mr Banning’s employment by giving 6 months’ notice or a lesser period of time by making a payment in lieu of notice for the difference between

that amount of time and 6 months. On termination with notice by LogiCamms, Mr Banning will be entitled to:

(a) payment of accrued but untaken annual leave;

(b) the total incentive for target performance under the STI and LTI, pro rata for the period of notice given by the Company; and

(c) subject to applicable performance hurdles being met, all shares to which Mr Banning is entitled under the STI and LTI and other rights

(such shares will vest within three months of termination).

Mr Banning may terminate his employment by 2 weeks’ notice to LogiCamms if LogiCamms commits a material breach of the Services Agreement,

or if his role and duties are materially reduced at the instigation of the Board by comparison to his role and duties as contemplated under the Service

Agreement. If the employment is terminated by Mr Banning on either of these grounds, then Mr Banning will be entitled to 6 months’ remuneration on

termination. Mr Banning may terminate his employment by giving 6 months’ notice to LogiCamms. On termination by Mr Banning, Mr Banning will be

entitled to:



(c) all Shares to which Mr Banning is entitled under the STI and LTI and other rights (such Shares will vest within three months of termination).

LogiCamms may terminate Mr Banning’s employment immediately in the case of misconduct and in certain other circumstances. In this event,

Mr Banning will not be entitled to any payment or award under the Company’s incentive plans, but will be entitled to payment in lieu of accrued

but untaken annual leave.

Overview of the Company’s service contract with Matthew Adamo, Managing Director (resigned on 2 March 2015)Mr Adamo was appointed to the Managing Director position on 12 May 2014, for a term with no fixed end date, and resigned on 2 March 2015.

Mr Adamo’s employment contract provided that LogiCamms may terminate Mr Adamo’s employment by giving 6 months’ notice or a lesser period of

time by making a payment in lieu of notice for the difference between that amount of time and 6 months. On termination with notice by LogiCamms,

Mr Adamo’s entitlements were:



(c) subject to applicable performance hurdles being met, all shares to which Mr Adamo was entitled under the STI and LTI and other rights

(such shares will vest within three months of termination).

Mr Adamo’s employment contract provided that Mr Adamo could terminate his employment by 2 weeks’ notice to LogiCamms if LogiCamms

committed a material breach of the Services Agreement, or if his role and duties were materially reduced at the instigation of the Board by comparison

to his role and duties as contemplated under the Service Agreement. If the employment was terminated by Mr Adamo on either of these grounds, then

Mr Adamo was entitled to 6 months’ remuneration on termination. Mr Adamo’s employment contract provided that Mr Adamo could terminate his

employment by giving 6 months’ notice to LogiCamms. On termination by Mr Adamo, Mr Adamo was entitled to:



(c) all Shares to which Mr Adamo was entitled under the STI and LTI and other rights (such Shares would vest within three months of termination).

Mr Adamo’s employment contract provided that LogiCamms could terminate Mr Adamo’s employment immediately in the case of misconduct and in

certain other circumstances. In this event, Mr Adamo was not entitled to any payment or award under the Company’s incentive plans, but would be

entitled to payment in lieu of accrued but untaken annual leave.

LogiCamms 24

Non-executive director remuneration Remuneration Policy

The Board seeks to set aggregate remuneration of non-executive directors at a level that provides the Group with the ability to attract and retain

directors of appropriate calibre, whilst incurring a cost that is acceptable to shareholders.

The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against fees paid to

non-executive directors (NEDs) of comparable companies.

The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to time by a general meeting.

The latest determination by shareholders approved an aggregate fee pool of up to $600,000 with such fees to be allocated to the Directors as the

Board of Directors may determine.

Structure

The remuneration of NEDs consists of directors’ fees and committee fees. NEDs do not receive retirement benefits.

Each NED, except the Board Chairman and Mr Giles Everist, received a base fee of $75,000 inclusive of superannuation for being a director of the Group.

The Board Chairman, Mr Peter Watson, received a base fee of $140,000 inclusive of superannuation for the period and share based payments of $25,848

in relation to the conversion of Performance Rights issued in connection with Peter Watson’s appointment in 2011. Mr Giles Everist received a base fee

of $80,000 inclusive of superannuation.

An additional fee may be payable for a director (except for the Board Chairman) who is a chair of a Board committee. The payment of additional fees for

serving on a committee recognises the additional time commitment required by NEDs who serve on sub-committees. No additional fees were paid for

serving on a committee in the 2015 financial year. NEDs do not participate in the Company’s STI or LTI plans.





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LogiCamms 26

Equity instrumentsKMP disclosed below were issued Performance Rights as detailed below that impact on compensation in the 2015 or subsequent reporting periods.

The service or performance criteria used to determine the number of Performance Rights issued are set out earlier in this report in the discussion of

the Company’s LTI Plan.

No terms of equity-settled share-based payment transactions have been altered or modified by the issuing entity since the date of grant. All

Performance Rights were provided at no cost to the recipients. All Performance Rights expire on the earlier of their expiry date or termination

of the individual’s employment.

Analysis of Incentives included in remunerationDetails of the vesting profile of the Performance Rights granted to KMP and impacting on compensation in the 2015 reporting period or subsequent

reporting periods that are still outstanding are detailed below.

Instrument Number Grant Date

Fair value per instrument at grant date ($)

% Vested in Year

% Forfeited

in Year

Number at 26 August

2015

Financial Years in which Grant

Vests

Peter Watson Performance Rights 133,333 10–Nov–11 $0.810 50% – 66,666 2016

Steve Banning Performance Rights 63,131 26–Aug–15 $0.66 – – 63,131 2016

Performance Rights 69,644 26–Aug–15 $0.60 – – 69,644 2017

Paul Bowker Performance Rights 3,071 19–Aug–13 $1.460 100% – – 2015



Karsten Guster Performance Rights 152,228 20–Feb–12 $0.595 100% – – 2015

Performance Rights 123,275 8–Nov–12 $0.770 – 100% – 2015



David Harris Performance Rights 3,071 19–Aug–13 $1.460 100% – – 2015



Geoff Jenkins Performance Rights 42,025 26–Aug–15 $0.66 – – 42,025 2016


Matthew Adamo Performance Rights 145,443 20–Feb–12 $0.595 100% – – 2015

Performance Rights 119,661 8–Nov–12 $0.770 – 100% – 2015

Exercise of Performance Rights During the reporting period 152,228 shares were issued to Karsten Guster, 145,443 shares were issued to Matthew Adamo, 3,071 shares were issued

to Paul Bowker and 3,071 shares were issued to David Harris on the conversion of Performance Rights granted in prior years as compensation.

No exercise price was payable on the conversion of the Performance Rights. The fair value at grant date of each Performance Right that was

converted was $0.97. The Performance Rights for Karsten Guster and Matthew Adamo were LTI awards. The remainder were STI awards.

No other Performance Rights previously granted to KMPs were exercised during the reporting period.





Movements in sharesThe movement during the reporting year in the number of ordinary shares in the Company held directly, indirectly or beneficially, by KMP, is as follows:

Held at 1 July 2014

Net Purchases on Market

Received on exercise of options or Rights Sales

Held at 30 June

2015

Directors

Steve Banning 29,363 – – – 29,363

Peter Watson 527,695 150,000 133,334 – 811,029

Giles Everist 510,000 – – – 510,000

Peter Wall 127,001 – – – 127,001

Richard Robinson – – – – –

Executives

Paul Bowker 120,990 119,429 3,071 – 243,490

Karsten Guster 432,847 5,000 152,228 – 590,075

David Harris 25,000 – 3,071 – 28,071

Iulius Mincu – – – – –

Geoff Jenkins 41,992 – – – 41,992

Directors’ interestsThe relevant interest of each Director at the date of this report in the shares, options, Performance Rights and SARs issued by the Company at the date

of this report is as follows:

Director Ordinary shares Performance Rights

Peter Watson 811,029 66,666

Giles Everist 510,000 –

Peter Wall 127,001 –

Steve Banning 29,363 132,575

Richard Robinson – –

Rights granted to directors and officers of the Company During or since the end of the financial year, the Company granted or agreed to grant rights over unissued ordinary shares in the Company to the Key

Management Personnel as set out below. Matthew Adamo’s rights were cancelled on his resignation. Steve Banning’s rights are subject to shareholder

approval at the next Annual General Meeting.

KMP Performance Rights

Steve Banning 382,775

Paul Bowker 96,068

Karsten Guster 143,182

David Harris 58,069

Geoff Jenkins 88,275

Flora Furness –

Iulius Mincu –

Matthew Adamo –

The Performance Rights require the holder to remain employed by the Company prior to vesting.

Performance Rights over unissued ordinary shares in the Company granted in the previous financial year were detailed in the previous Annual Report.

Unissued shares under optionsAt the date of this report there are no other unissued ordinary shares of the Company under option.

LogiCamms 28

Indemnification and insurance of officers and auditors

Insurance premiumsUnder the Company’s Constitution, the Company indemnifies each current and former officer of the Group against certain liabilities and costs incurred

by them as an officer of the Group, except where the liability arises out of conduct involving a lack of good faith. The Company also indemnifies each

current and former officer of the Group against certain liabilities and costs incurred when the officer acts as an officer of another body corporate at

the Company’s request and the liability or cost is incurred in that capacity. Neither indemnity extends to liabilities or costs from which the Company is

prohibited from indemnifying current or former officers under the Corporations Act.

In addition the Company has entered into Deeds of Access, Indemnity and Insurance with certain officers of the Group. Under those Deeds, the

Company agrees to matters including the following:

õ Indemnify the officer to the extent permitted by law and under the Company’s Constitution; and

õ Maintain a Director’s and Officer’s insurance policy.

Since the end of the previous financial year the Group has paid insurance premiums of $43,130.65 (2014: $45,733.90) in respect of directors’ and officers’

liability insurance policies.

Non-audit servicesDuring the year PwC, the Group’s auditor, has performed certain other services in addition to their statutory duties.

The board has considered the non-audit services provided during the year by the auditor and in accordance with written advice provided by resolution

of the audit committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not

compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

õ all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit and

Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; and

õ the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for

Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity

for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Details of the amounts paid to the auditor of the Group, PwC, and its related practices for audit and non-audit services provided during the year are set

out below. In addition, amounts paid to other auditors for the statutory audit have been disclosed:

Consolidated 2015

$

Consolidated 2014

$

Audit services:

Auditors of the Group:

Audit and review of financial reports (PricewaterhouseCoopers) 185,000 176,000

185,000 176,000

Services other than statutory audit:

Taxation advice (PricewaterhouseCoopers) – 14,609

Other services – remuneration advice (PricewaterhouseCoopers) 5,000 5,610

5,000 20,219



After Balance Date Events On 8 July 2015 the Group acquired 100% of the shares in Petromod Pty Ltd (“Petromod”) for a consideration of $6.023 million comprising cash of

$2.198 million and the accrual of a profit earn out of $3.825m . Other than this acquisition, since the end of the financial year, the directors are not aware

of any matters or circumstances not otherwise dealt with in this report or the financial statements that have, or may, significantly affect the operations,

the results of those operations or the state of affairs of the Group in future financial years.

Environmental Regulation and Performance The Group’s operations are subject to Australian Commonwealth and State environmental legislation as well as legislation in New Zealand. The Group

has appropriate environmental management systems in place to monitor and manage compliance with existing environmental regulations and new

regulations as they come into force. LogiCamms has not been fined or prosecuted for any significant breaches of environmental regulations during the

financial year.

Proceedings on behalf of the CompanyNo person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or

to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part

of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001.

Auditor’s independence declarationThe auditor’s independence declaration is set out on page 64 and forms part of the directors’ report for the financial year ended 30 June 2015.

Rounding off of amountsThe Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial

report and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated.

This report is made in accordance with a resolution of the directors:


Dated at Brisbane, Queensland this 26th day of August, 2015.


LogiCamms 30

Consolidated statement of profit or loss and other comprehensive income 31

Consolidated statement of financial position 32

Consolidated statement of changes in equity 33

Consolidated statement of cash flows 34

Notes to the financial statements 35

1. General information 2. Basis of preparation3. Significant

accounting policies 4. Results for the year5. Operating assets

and liabilities

(a) Statement of compliance

(b) Basis of measurement and presentation currency

(c) Use of estimates and judgements

(i) Goods and services tax

(ii) Foreign currency

(iii) New standards and interpretations not yet adopted

(iv) Other accounting policies

i. Revenue

ii. Other income

iii. Finance income

iv. Expenses

v. Taxation

vi. Earnings per share

vii. Segment Reporting

viii. Auditor’s remuneration

i. Cash and cash equivalents

ii. Trade and other receivables

iii. Trade and other payables

iv. Deferred income

v. Employee benefits

vi. Provisions

6. Investment in long term assets 7. Capital 8. Risk 9. Corporate and group 10. Unrecognised items

i. Property, plant and equipment

ii. Intangible assets

i. Share capital and reserves i. Financial instruments

ii. Financial risk management

iii. Impairment

i. Group entities

ii. Equity accounted investees

iii. Acquisitions

iv. Related parties

v. Share based payments

i. Subsequent events

ii. Operating leases

Signed reports Directors declaration 61

Independent auditor’s report 62

Lead Auditor’s Independence Declaration 64

FINANCIAL STATEMENTS CONTENTS For the year ended 30 June 2015


Note2015 $’000

2014 $’000

Revenue 4(i) 133,838 127,890

Cost of sales (82,468) (78,369)

Gross profit 51,370 49,521

Other income 4(ii) 1,346 2,345

Finance income 4(iii) 287 209

Share of profit / (loss) of equity accounted investees 9(ii) 264 264

Business development expenses (4,512) (6,023)

Administrative expenses (38,527) (41,596)

Finance expenses 4(iv) (1) (60)

Profit before income tax 10,227 4,660

Income tax benefit / (expense) 4(v) (1,899) 346

Profit for the year attributable to owners of the Company 8,328 5,006

Other comprehensive income for the year, net of income tax

Items that may be reclassified subsequently to profit and loss:

Foreign currency translation differences (932) 1,790

Other comprehensive income for the period, net of tax (932) 1,790

Total comprehensive income for the year attributable to owners of the Company 7,396 6,796

Earnings per share:

Basic earnings per share (cents per share AUD) 4(vi) 12.0 7.2

Diluted earnings per share (cents per share AUD) 4(vi) 12.0 7.0

The above Consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2015

LogiCamms 32

Note2015 $’000

2014 $’000

Assets

Cash and cash equivalents 5(i) 21,851 12,150

Trade and other receivables 5(ii) 22,976 29,140

Current tax asset 4(v) 377 663

Total current assets 45,204 41,953

Investments in equity accounted investees 9(ii) 243 579

Property, plant and equipment 6(i) 4,153 4,775

Deferred tax assets 4(v) 2,370 3,233

Intangible assets 6(ii) 56,305 54,656

Other non-current assets 125 –

Total non-current assets 63,196 63,243

Total assets 108,400 105,196

Liabilities

Trade and other payables 5(iii) 12,642 7,871

Employee benefits 5(v) 5,356 5,065

Provisions 5(vi) 312 146

Deferred income 5(iv) 1,494 4,142

Total current liabilities 20,901 17,224

Trade and other payables 5(iii) 955 3,106

Employee benefits 5(v) 1,137 1,203

Provisions 5(vi) 3,590 2,820

Total non-current liabilities 5,682 7,129

Total liabilities 26,583 24,353

Net assets 82,914 80,843

Equity

Share capital 53,416 54,901

Reserves 1,001 1,933

Retained earnings 28,497 24,009

Total equity attributable to owners of the Company 82,914 80,843

The above Consolidated statement of financial position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2015


Note

Share capital

$’000Reserves

$’000

Retained earnings

$’000Total

$’000

Balance at 1 July 2014 54,901 1,933 24,009 80,843

Profit for the year – – 8,328 8,328

Other comprehensive income for the year, net of income tax – (932) – (932)

Total comprehensive income – (932) 8,328 7,396

Buy-back of shares 7(i) (1,975) – – (1,975)

Issuance of shares 490 – – 490

Dividends paid 7(i) – – (4,884) (4,884)

Share-based payments 9(v) – – 1,044 1,044

Balance at 30 June 2015 53,416 1,001 28,497 82,914

For the year ended 30 June 2014

Note

Share capital

$’000Reserves

$’000

Retained earnings

$’000Total

$’000

Balance at 1 July 2013 54,871 143 23,230 78,244

Profit for the year – – 5,006 5,006

Other comprehensive income for the year, net of income tax – 1,790 – 1,790

Total comprehensive income – 1,790 5,006 6,796

Exercise of options 30 – – 30

Dividends paid 7(i) – – (4,545) (4,545)

Share-based payments 9(v) – – 318 318

Balance at 30 June 2014 54,901 1,933 24,009 80,843

The above Consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2015

LogiCamms 34

Note2015 $’000

2014 $’000

Cash flows from operating activities

Receipts from customers 137,958 135,321

Payments to suppliers and employees (118,583) (124,350)

19,375 10,971

Interest paid (1) (60)

Income tax paid (750) (5,276)

Net cash inflow from operating activities 5(i) 18,624 5,635

Cash flows from investing activities

Interest received 287 209

Proceeds from sale of property, plant and equipment 34 48

Dividends and return of capital from equity accounted investee 600 61

Acquisition of a business 9(iii) (1,808) –

Acquisition of property, plant and equipment 6(i) (212) (540)

Acquisition of intangible assets 6(ii) (965) (1,866)

Net cash outflow from investing activities (2,064) (2,088)

Cash flows from financing activities

Proceeds from issue of share capital – 30

Repayment of borrowings – (6)

Acquisition of shares bought back (1,975) –

Dividends paid to the shareholders of the Company 7(i) (4,884) (4,545)

Net cash outflow from financing activities (6,859) (4,521)

Net decrease in cash and cash equivalents 9,701 (974)

Cash and cash equivalents at beginning of financial year 12,150 13,124

Cash and cash equivalents at end of financial year 5(i) 21,851 12,150

The above Consolidated statement of financial position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2015


NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2015

1. General informationLogiCamms Limited (the “Company”) is a company domiciled in

Australia. The address of the Company’s registered office is 433 Boundary

Street, Brisbane, Australia. The Consolidated financial statements of

the Company as at and for the year ended 30 June 2015 comprise the

Company and its subsidiaries (together referred to as the “Group” and

individually as “Group entities”) and the Group’s interest in associates and

jointly controlled entities.

The Group is primarily involved with the energy, resources and

infrastructure sectors providing engineering project delivery and

asset performance services primarily in Australia and New Zealand.

Comparative information has been reclassified where appropriate to

enhance comparability.

The Group is a for profit entity for the purpose of preparing financial

statements.

The financial statements were approved by the Board of Directors on

26 August 2015.

2. Basis of preparation

(a) Statement of complianceThe consolidated financial statements are general purpose financial

statements which have been prepared in accordance with Australian

Accounting Standards (“AASBs”) (including Australian Interpretations

adopted by the Australian Accounting Standards Board (“AASB”)) and

the Corporations Act 2001. The consolidated financial statements

comply with International Financial Reporting Standards (“IFRSs”) and

interpretations adopted by the International Accounting Standards Board.

(b) Basis of measurement and presentation currency The Consolidated financial statements have been prepared on the

historical cost basis, except for specific assets and liabilities to be

measured at fair values.

The Consolidated financial statements are presented in Australian dollars,

which is the Company’s functional currency.

The Company is of a kind referred to in ASIC Class Order 98/100 dated

10 July 1998 and in accordance with that Class Order, all financial

information presented in Australian dollars has been rounded to the

nearest thousand unless otherwise stated.

(c) Use of estimates and judgementsThe preparation of financial statements requires management to make

judgements, estimates and assumptions that affect the application

of accounting policies and the reported amounts of assets, liabilities,

income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on-going

basis. Revisions to accounting estimates are recognised in the period in

which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty

and critical judgements in applying accounting policies that have the

most significant effect on amounts recognised in the financial statements

are included in the following notes:

õ Notes 4(i) and 5(ii) – revenue recognition and project work in progress

õ Note 6(ii) – measurement of the recoverable amounts of cash-

generating units containing goodwill

õ Note 5(iv) – measurement of deferred consideration

õ Note 5(vi) – onerous leases

õ Note 9(v) – measurement of share-based payments

3. Significant accounting policies The accounting policies set out below have been applied consistently to

all periods presented in these consolidated financial statements, and have

been applied consistently by the Group.

(i) Goods and services taxRevenue, expenses and assets are recognised net of the amount of goods

and services tax (GST), except where the amount of GST incurred is not

recoverable from the taxation authority. In these circumstances, the GST

is recognised as part of the cost of acquisition of the asset or as part of

the expense.

(ii) Foreign currencyForeign currency transactions

Transactions in foreign currencies are translated to the respective

functional currencies of Group entities at exchange rates at the dates of

the transactions.

Monetary assets and liabilities denominated in foreign currencies at

the reporting date are retranslated to the functional currency at the

exchange rate at that date. The foreign currency gain or loss on monetary

items is the difference between amortised cost in the functional currency

at the beginning of the year, adjusted for effective interest and payments

during the year, and the amortised cost in foreign currency translated at

the exchange rate at the end of the year.

Non-monetary assets and liabilities that are measured at fair value in

a foreign currency are retranslated to the functional currency at the

exchange rate at the date that the fair value was determined. Non-

monetary items that are measured based on historical cost in a foreign

currency are translated using the exchange rate at the date of the

transaction.

Foreign currency differences arising on retranslation are generally

recognised in profit or loss.

LogiCamms 36


Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the presentation

currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at exchange rates

at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency

translation reserve (translation reserve) in equity.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future,

foreign exchange gains and losses arising from such items are considered to form part of the net investment in the foreign operation and are

recognised in other comprehensive income, and presented in the translation reserve in equity.

(iii) New standards and interpretations not yet adoptedA number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2014. None of these

have had a significant effect on the consolidated financial statements of the Group.

The Group has not elected to adopt early any accounting standards and/or amendments.

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective:

Standard/InterpretationEffective for annual reporting periods beginning on or after

Expected to be initially applied in the financial year ending

AASB 9 ‘Financial Instruments’, and the relevant amending standards 1 January 2018 30 June 2019

AASB 15 ‘Revenue from Contracts with Customers’ and AASB 2014-5

‘Amendments to Australian Accounting Standards arising from AASB 15’ 1

1 January 2017 30 June 2018

AASB 2014-4 ‘Amendments to Australian Accounting Standards – Clarification

of Acceptable Methods of Depreciation and Amortisation’


AASB 2014-10 ‘Amendments to Australian Accounting Standards – Sale or

Contribution of Assets between an Investor and its Associate or Joint Venture’


AASB 2015 – 1 ‘Amendments to Australian Accounting Standards – Annual

Improvements to Australian Accounting Standards 2012–2014 Cycle’


AASB 2015 – 2 ‘Amendments to Australian Accounting Standards – Disclosure

Initiative: Amendments to AASB 101’


AASB 2015 – 3 ‘Amendments to Australian Accounting Standards arising from

the Withdrawal of AASB 1031 Materiality’

1 July 2015 30 June 2016

1 The AASB has issued a new standard for the recognition of revenue (AASB 15). The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer. The Group has not yet considered the impact of the new rules on its revenue recognition policies and will undertake a detailed assessment in the near future. The Group expects to adopt the new standard from 1 July 2018.

(iv) Other accounting policies Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of the financial statements

are provided throughout the notes to the financial statements.

3. Significant accounting policies cont.



4. Operations – results for the year

(i) Revenue

2015 $’000

2014 $’000

Project and services revenue 125,123 116,890

Training courses 8,715 11,000

133,838 127,890

Revenue from projects and services

With respect to fixed price contracts, revenue is recognised depending on the stage of completion of those services. The Group estimate the

percentage of costs based on the portion that contract costs incurred for work performed to date bear to the estimated total contract costs.

Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments to the extent

that it is probable that they will result in revenue and can be measured reliably.

When the outcome of a contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are

likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.

Revenue from training courses

Revenue from training courses is recognised when the course is completed.

(ii) Other Income

2015 $’000

2014 $’000

Reduction in earn out payable 5(iii) 1,328 2,311

Other 18 34

1,346 2,345

(iii) Finance income

2015 $’000

2014 $’000

Interest income on bank deposits 287 209

287 209

(iv) Expenses

The statement of comprehensive income includes the following specific expenses:

2015 $’000

2014 $’000

Personnel expenses 68,482 68,942

Contractor expenses 12,898 13,580

Contributions to defined contribution superannuation funds 4,577 4,989

Operating leases 4,648 3,997

Restructuring costs – 3,900

Depreciation 1,072 1,178

Amortisation 1,044 1,035

Interest expense on financial liabilities 1 60

LogiCamms 38


Personnel expenses and Contributions to defined contribution superannuation funds

The Group’s accounting policy for liabilities associated with employee benefits is set out in Note 5(v). The majority of employees in Australia and

New Zealand are party to a defined contribution scheme and receive fixed contributions from the Group and the Group’s legal or constructive

obligation is limited to these contributions. Contributions to defined contribution funds are recognised as an expense as they become payable.

Operating leases

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received

are recognised as an integral part of the total lease expense, over the term of the lease.

Depreciation and Amortisation

The Group’s accounting policy for depreciation and amortisation is set out in Notes 6(i) and 6(ii).

Restructuring costs

The 2014 Restructuring costs represent one-off costs incurred as part of the 2014 program of strategic initiatives announced on 16 April 2014.

(v) TaxationIncome tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to the extent that it relates

to items recognised directly in equity, in which case it is recognised in equity or in other comprehensive income.

Income Tax Expense

2015 $’000

2014 $’000

Current tax expense

Current year 819 1,531

Withholdings tax paid 150 –

Adjustments for prior year (tax incentives) 67 (57)

1,036 1,474

Deferred tax expense

Origination and reversal of temporary differences 863 (1,820)

Total income tax (benefit) / expense 1,899 (346)

Numerical reconciliation between tax expense and pre-tax accounting profit

2015 $’000

2014 $’000

Profit for the year 8,328 5,006


Profit before income tax 10,227 4,660

Income tax using the Company’s domestic tax rate of 30% 3,068 1,398

Effect of tax rates in foreign jurisdictions (17) (50)

Tax incentives – current financial year (900) (1,162)

Previous financial year adjustment 67 (57)

Non-deductible expenses 59 135

Non-assessable income (398) (690)

Tax offsets (17) (24)

Other 37 104


4. Operations – results for the year (continued)



The difference between the actual income tax expense and the income tax expense using the Company’s domestic rate of 30% is mainly attributable

to research and development tax incentives.

Current tax assets and liabilities

Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or substantively enacted at the

reporting date, and any adjustment to tax payable in respect of previous years.

2015 $’000

2014 $’000

Current assets

Current financial year tax refundable 377 663

Tax assets and liabilities – recognised deferred tax assets and liabilities

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference

can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax

benefit will be realised.

Deferred tax is based upon the expected manner of realisation or settlement of the carrying amount of assets and liabilities using the applicable tax

rates. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting

purposes and the amounts used for taxation purposes.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets; and they relate to income taxes

levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a

net basis or their tax assets and liabilities will be realised simultaneously.

Assets Liabilities Net

2015 $’000

2014 $’000

2015 $’000

2014 $’000

2015 $’000

2014 $’000

Trade receivables 185 441 – – 185 441

Work in progress – – (1,249) (881) (1,249) (881)

Equity accounted investee – – (93) (197) (93) (197)

Fixed assets 9 18 – – 9 18

Employee benefits 1,938 1,888 – – 1,938 1,888

Other payables 623 372 – – 623 372

Revenue received in advance 22 39 – – 22 39

Provisions 879 792 – – 879 792

Share based payments 56 – – (257) 56 (257)

Transaction costs – 28 – – – 28

Income tax loss – 990 – – – 990

Tax assets / (liabilities) 3,712 4,568 (1,342) (1,335) 2,370 3,233

LogiCamms 40


Tax assets and liabilities – movement in temporary differences during the year

Balance 1 July 2013

$’000

Recognised in profit

or loss $’000

Balance 30 June 2014

$’000

Balance 1 July 2014

$’000

Recognised in profit

or loss $’000

Balance 30 June 2015

$’000

Trade receivables 669 (228) 441 441 (256) 185

Work in progress (1,339) 458 (881) (881) (368) (1,249)

Equity accounted investee (116) (81) (197) (197) (104) (93)

Fixed assets – 18 18 18 (9) 9

Employee benefits 1,988 (100) 1,888 1,888 50 1,938

Other payables 379 (7) 372 372 251 623

Revenue received in advance 27 12 39 39 (17) 22

Provisions 60 732 792 792 87 879

Share based payments (352) 95 (257) (257) 313 56

Transaction costs 97 (69) 28 28 (28) –

Income tax loss – 990 990 990 (990) –

1,413 1,820 3,233 3,233 (863) 2,370

Deferred tax is not recognised for the following temporary differences:

õ Initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit;

õ Differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the

foreseeable future; and

õ Initial recognition of goodwill.

Tax Consolidation

The company and its wholly-owned Australian resident entities are part of a Tax Consolidated Group (TCG). As a consequence, all members of the

tax-consolidated Group are taxed as a single entity. The head entity within the tax-consolidated Group is LogiCamms Limited.

(vi) Earnings per share (EPS)

2015 $’000

2014 $’000


WANOS1 used to calculate basic EPS (shares) 69,422 69,885

WANOS1 used to calculate diluted EPS (shares) 69,571 71,228

Basic EPS (cents per share) 12.0 7.2

Diluted EPS (cents per share) 12.0 7.0

1 Weighted average number of ordinary shares

2015 $’000

2014 $’000

WANOS used to calculate basic EPS (shares) 69,422 69,885

Effect of performance rights on issue 149 716

Effect of share appreciation rights on issue – 627

WANOS used to calculate diluted EPS (shares) 69,571 71,228

4. Operations – results for the year (continued)



There have been no transactions involving ordinary shares between the reporting date and the date of completion of these financial statements which

would impact on the above EPS calculations

Calculation of earnings per share

Basic earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than

dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus elements.

Diluted earnings per share

Diluted earnings per share are calculated as net profit attributable to members of the parent, adjusted for:

õ Cost of servicing equity (other than dividends)

õ The after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

õ Other non-discretionary changes in revenue or expenses during the year that would result from the dilution of potential ordinary shares

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(vii) Segment reportingThe Group has a single reportable segment in which it operates, being engineering services. This is based on information that is internally provided to

the Managing Director and Board of Directors for assessing performance and making operating decisions. Therefore no additional disclosures in relation

to the revenues, profit or loss, assets and liabilities and other material items have been made.

The Company is domiciled in Australia, with operations located across Australia and in New Zealand. Revenue and non-current assets are attributed

to the above regions based on the revenue earned and non-current assets owned by the subsidiaries domiciled in each region and are as follows:

2015 $’000

2014 $’000

Revenue

Australia 110,121 100,744

New Zealand 23,717 27,146

133,838 127,890

Non-current assets excluding deferred tax assets

Australia 60,195 59,051

New Zealand 631 959

60,826 60,010

Revenue from two customers of the Group amount to greater than 10% of the Group’s total revenues for the year ended 30 June 2015. One customer

in the Hydrocarbons sector amounts to $19,729,000 and one customer in the Minerals and Metals sector amounts to $13,529,000 (2014: one customer

in the Hydrocarbons sector $15,004,000).

(viii) Auditors’ remuneration

2015 2014

Audit services

PricewaterhouseCoopers in respect of

Audit of the Company’s Financial Report 185,000 176,000

185,000 176,000

Non-audit services

PricewaterhouseCoopers in respect of

Taxation advice – 14,609

Other services – remuneration advice 5,000 5,610

5,000 20,219

Total auditors’ remuneration 190,000 196,219

LogiCamms 42


5. Operations – Operating assets and liabilities

(i) Cash and cash equivalents

2015 $’000

2014 $’000

Operating bank accounts 21,851 12,150

Cash and cash equivalents in the statement of cash flows 21,851 12,150

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed in Note 8(ii).

Reconciliation of cash flows from operating activities

Note2015 $’000

2014 $’000

Cash flows from operating activities


Adjustments for:

Depreciation 6(i) 1,072 1,178

Amortisation of intangible assets 6(ii) 1,044 1,035

Net finance benefit (286) (149)

Share of (profit) / loss of equity accounted investees 9(ii) (264) (264)

Loss on sale of property, plant and equipment 13 34

Equity-settled share-based payment transactions 9(v) (53) 318

Income tax (benefit) / expense 4(v) 1,899 (346)

Operating profit before changes in working capital and provisions 12,489 6,812

Change in trade and other receivables 6,246 4,250

Change in trade and other payables 2,716 (1,606)

Change in deferred income (2,648) 2,066

Change in provisions and employee benefits 212 (551)

19,375 10,971

Interest paid (1) (60)

Income taxes paid (750) (5,276)

Net cash from operating activities 18,624 5,635

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing

activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

During the current year, the Group entered into a non-cash investing and financing activity relating to the issuance of Share Capital of $490,000 in the

acquisition of Monarc Environmental. This is not reflected in the Consolidated statement of cash flows.



(ii) Trade and other receivables

2015 $’000

2014 $’000

Current 14,905 21,071

Trade receivables (487) (1,517)

Provision for impairment of trade receivables 7,899 8,888

Project work in progress 659 698

Prepayments and sundry debtors 22,976 29,140

Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less any

impairment losses. At 30 June 2015 trade receivables include retentions of $216,000 relating to contracts in progress (2014: $241,000). The Group’s

exposure to credit risk and impairment losses related to Trade and other receivables (excluding project work in progress) are disclosed in Note 8(ii).

Project work in progress

Project work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is

measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditure related directly to specific

projects and an allocation of fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity. If payments

received from customers exceed the income recognised, then the difference is presented as deferred income in the balance sheet.

(iii) Trade and other payables

Note2015 $’000

2014 $’000

Current

Trade payables 4,136 2,204

GST payable 544 867

Deferred consideration – earn out payable 4(ii) 1,031 –

Accrued expenses 6,931 4,800

12,642 7,871

Non-Current

Lease incentives 955 1,247

Deferred consideration - earn out payable 4(ii) – 1,859

955 3,106

Trade and other payables are recognised initially at fair value less transaction costs and subsequently at amortised cost using the effective interest

method. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is

included as a current asset or liability in the statement of financial position.

The Group’s exposure to currency and liquidity risk related to Trade and other payables is disclosed in Note 8(ii). The deferred consideration is level 3 on

the fair value hierarchy and it is valued based on likelihood of ITL and Monarc Environmental achieving certain EBIT performance hurdles. The Group

has considered reasonable sensitivities in relation to the achievement of these targets and based on those sensitivities, reduced the fair value of the

deferred consideration payable to ITL by $1,328,000 during the financial year. Deferred consideration was increased during the year by $500,000 to

allow for earn out related to the Monarc Environmental acquisition.

LogiCamms 44


(iv) Deferred income

2015 $’000

2014 $’000

Billings in advance 1,421 4,011

Prepaid revenue 73 131

1,494 4,142

The Group’s policy in relation to deferred income is disclosed in Note 4(i).

(v) Employee benefits

2015 $’000

2014 $’000

Current

Liability for annual leave 3,611 3,629

Liability for long service leave 1,288 947

Liability for time off in lieu 457 489

5,356 5,065

Non-Current

Liability for long service leave 1,137 1,203

Annual leave, long service leave and time off in lieu

The liability for annual leave, long service leave and time off in lieu is measured as the present value of expected future payments (including on-costs)

for the service provided by employees up to the reporting date. Expected future payments are discounted using the yield on high quality corporate

bonds that have maturity dates approximating the terms of the Group’s obligations.

(vi) Provisions

2015 $’000

2014 $’000

Current

Warranty 312 146

Non-Current

Lease make good 1,190 920

Onerous lease 2,400 1,900

3,590 2,820

A provision is recognised if as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is

probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future

cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Warranty

A provision for warranty is usually recognised per project at its conclusion. At each reporting date, the overall provision is set based on average

historical warranty related expenses and the usual contractual terms for warranties made.

Onerous leases

A provision for onerous leases is recognised when the expected benefits (expected lease inflows) to be derived by the Group from a lease are lower

than the unavoidable cost of meeting its obligations under the lease. The provision is measured at the present value of the lower of the expected cost

of terminating the lease and the expected net cost of continuing the lease. Before a provision is established, the Group recognises any impairment loss

on the assets associated with the lease.

5. Operations – Operating assets and liabilities (continued)



6. Investment in long term assets

(i) Property, plant and equipment

Plant and equipment $’000

Building fit outs $’000

Motor Vehicles $’000

Total $’000

Cost

Balance at 1 July 2013 2,325 3,206 337 5,868

Adjustment to opening balance 1,678 – 132 1,810

Restated balance at 1 July 2013 4,003 3,206 469 7,678

Additions 384 156 – 540

Disposals (613) – (157) (770)

Effect of exchange rate movements 203 – 35 238

Balance at 30 June 2014 3,977 3,362 347 7,686

Balance at 1 July 2014 3,977 3,362 347 7,686

Additions 212 – – 212

Disposals (855) – (143) (998)

Acquisitions through business combinations 166 114 – 280

Effect of exchange rate movements (56) – (5) (62)

Balance at 30 June 2015 3,444 3,476 199 7,119

Depreciation

Balance at 1 July 2013 164 259 65 488

Adjustment to opening balance 1,678 – 132 1,810

Restated balance at 1 July 2013 1,842 259 197 2,298

Depreciation for the year 816 293 69 1,178

Disposals (600) – (100) (700)

Effect of exchange rate movements 120 – 16 136

Balance at 30 June 2014 2,178 552 182 2,912

Balance at 1 July 2014 2,178 552 182 2,912

Depreciation for the year 706 321 45 1,072

Disposals (854) – (110) (964)

Effect of exchange rate movements (51) – (3) (54)

Balance at 30 June 2015 1,979 873 114 2,966

Carrying amounts

At 1 July 2013 1,997 2,947 207 5,151

At 30 June 2014 1,800 2,810 165 4,775

At 1 July 2014 1,800 2,810 165 4,775

At 30 June 2015 1,465 2,603 85 4,153

LogiCamms 46


Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation. Cost includes expenditure that is directly attributable to

the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of

property, plant and equipment. Any gain or loss from derecognising the assets (the difference between the proceeds of disposal and the carrying

amount of the asset) is included in “Other income” in the period the asset is recognised.

The adjustment to the 1 July 2013 opening balance relates to the gross up of assets previously acquired which were presented on net basis in prior

financial statements.

Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and

equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will

obtain ownership by the end of the lease term. Land is not depreciated. Depreciation methods, useful lives and residual values are reviewed at each

reporting date.

The estimated useful lives for the current and comparative periods are as follows:

õ Plant and equipment 3 – 10 years

õ Building fit out costs 4 – 10 years

õ Motor vehicles 4 – 5 years

Leased assets

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition

the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to

initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Other leases are operating leases and

the leased assets are not recognised on the Group’s consolidated statement of financial position.

6. Investment in long term assets (continued)



(ii) Intangible assets

Goodwill $’000

Customer Contracts

$’000

Software & Systems

$’000Total

$’000

Cost

Balance at 1 July 2013 50,412 300 2,319 53,031

Additions – – 1,866 1,866

Effect of exchange rate movements 1,501 – – 1,501

Disposals – – (435) (435)

Balance at 30 June 2014 51,913 300 3,750 55,963

Balance at 1 July 2014 51,913 300 3,750 55,963

Additions 2,490 – 965 3,454

Effect of exchange rate movements (757) – – (757)

Disposals – – (66) (66)

Balance at 30 June 2015 53,646 300 4,649 58,595

Amortisation and impairment losses

Balance at 1 July 2013 – – 696 696

Amortisation – 300 735 1,035

Disposals – – (424) (424)

Balance at 30 June 2014 – 300 1,007 1,307

Balance at 1 July 2014 – 300 1,007 1,307

Amortisation – – 1,044 1,044

Disposals – – (60) (60)

Balance at 30 June 2015 – 300 1,990 2,290

Carrying amounts

Balance at 1 July 2013 50,412 300 1,623 52,335

Balance at 30 June 2014 51,913 – 2,743 54,656

Balance at 1 July 2014 51,913 – 2,743 54,656

At 30 June 2015 53,646 – 2,659 56,305

Goodwill

Goodwill acquired in a business combination is initially measured at cost. Goodwill is measured of the cost of the acquisition less the net fair value

of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less accumulated impairment

losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment.

Goodwill is tested for impairment annually. Refer to note 8(iii) of this report for detail of the impairment assessment.

Software and Systems

Capitalised software expenditure is measured on initial recognition at cost. The expenditure capitalised includes the direct labour and overhead costs

that are directly attributable to preparing the asset for its intended use. Following initial recognition, software and systems are carried at cost less

amortisation and any impairment losses. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible

assets, other than goodwill, from the date that they are available for use. The estimated useful life applied is usually 4 years.

LogiCamms 48


7. Capital and reserves

(i) Share capital and reservesShare capital

Number of Ordinary Shares

2015 $’000

Number of Ordinary Shares

2014 $’000

On issue at 1 July 71,214 71,178

Issued in business combinations 671 –

Bought back (2,768) –

Exercise of options – 36

On issue at 30 June – fully paid 69,117 71,214

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a

deduction from equity, net of any tax effects.

The Company does not have authorised capital or par value in respect of its issued shares. The holders of ordinary shares are entitled to receive

dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the

Company’s residual assets.

Where share capital recognised as equity is repurchased, the amount of consideration paid, which includes directly attributable costs, net of any tax

effects, is recognised as a deduction from equity.

During the year, 2,767,000 shares (2014: nil) were bought back under the on-market share buyback programme which commenced 28 August 2014

and ceased on 26 May 2015.

As at 30 June 2015, 693,435 (2014: 1,162,000) treasury shares included in the consolidated statements of financial position and changes in equity relate

to shares acquired on-market by the Employee Share Trust (EST). These shares will be held by the EST to meet future obligations to employees under

the incentive plans upon vesting of granted Performance and Share Appreciation Rights (refer Note 9(v)).

The Group has also issued Performance Rights and Share Appreciation Rights (refer Note 9(v)).

Dividends

Dividends are recognised as a liability in the period in which they are declared.

Declared and paid during the period

2015 $’000

2014 $’000

Final dividend for 2014: $0.035, 100% franked (2013: $0.045, 100% franked) 2,492 3,203

Interim dividend for 2015: $0.035, 50% franked (2014: $0.020, 100% franked) 2,445 1,424

Less dividends received on LogiCamms shares held by Employee Share Trust (53) (82)

4,884 4,545



Proposed and unrecognised as a liability

2015 $’000

2014 $’000

Final dividend for 2015: $0.035, 50% franked (2014: $0.035, 100% franked) 2,419 2,492

Franking credit balance

2015 $’000

2014 $’000

30% franking credits available to shareholders of the Company for subsequent financial years (508) 843

All dividends were franked at 30%. The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare

dividends. The impact on the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability is to

reduce it by $518,000 (2014: $1,068,000). The above amount is calculated from the balance of the franking account as at the end of the year of

$281,000, reduced by franking debits that will arise from the settlement of the receivable for income tax and the payment of the final dividend. Income

tax instalments expected to be paid during the financial year ending 30 June 2016 will return the franking account to a credit balance by 30 June 2016.

8. Risk

(i) Financial instrumentsNon-derivative financial instruments

Non-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, and trade and

other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly

attributable transaction costs. Subsequent to initial recognition non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised

if the Group’s contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial asset to another party without

retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date,

i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the

contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and term deposits.

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

(ii) Financial risk managementOverview

The Group has exposure to the following risks from its use of financial instruments:

õ Credit risk

õ Liquidity risk

õ Market risk

This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and

managing risk, and the management of capital.

Risk management framework

To discharge their obligation to establish and exercise oversight of the Group’s risk management framework the board of directors have delegated to

the Audit and Risk Committee the responsibility to exercise oversight of how management monitor and reviews the adequacy of the risk management

framework.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls,

and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and

the Group’s activities.

LogiCamms 50


Credit risk

Credit risk is the risk of financial loss to the Group if a contracting entity fails to meet its obligations under a financial instrument or customer contract

that will result in a financial loss to the Group. The Group is exposed to credit risk from its operating activities (principally from customer receivables and

financial guarantees granted to customers) and financing activities including deposits with financial institutions.

Exposure to credit risk

The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the end

of the reporting period was:

2015 $’000

2014 $’000

Trade receivables (net of provision for impairment) 14,418 19,554

Sundry debtors and prepayments 659 698

Project work in progress 7,899 8,888

22,976 29,140

Cash and cash equivalents 21,851 12,150

44,827 41,290

Credit risks related to trade receivables

The Group trades with recognised, creditworthy third parties such as government bodies, large contracting companies or customers whom the Group

has established trading history with. Customer credit risk is managed based on established policies, procedures and controls relating to customer credit

risk management. This includes:

õ for new customers – performing a creditworthiness assessment before credit terms are allowed and including the performance of a credit checks if

required

õ prior to signing a large contract – credit worthiness is assessed as part of the process of submitting the bid and negotiating terms and conditions

õ purchase limits – outside special terms required for large contracts, credit limits are established for each customer

Customers that fail to meet the Group’s benchmark creditworthiness may transact only on a prepayment basis.

In addition, the recoverability of receivable balances are regularly monitored as part of the monthly commercial and performance reviews of each

major project by senior management to ensure that the trade receivables and the carrying value of each project’s work in progress is recoverable.

In extreme cases, the Group may consider ceasing work until any aged outstanding receivables or disputed amounts are paid / resolved.

The Group has established an allowance for impairment that represents their estimate of incurred losses in respect of trade and other receivables.

The maximum exposure to credit risk for Trade and other receivables (excluding provision for doubtful debts) by geographic region is as follows.

2015 $’000

2014 $’000

Australia 10,915 15,221

New Zealand 3,271 3,029

Other regions 719 2,821

14,905 21,071

Details of the Group’s most significant customer receivable balances at 30 June 2015 are shown in the following table. The most significant single

customer at 30 June 2015 is a large, Australian based company in the energy sector.

Carrying amount 2015 $’000

% of trade receivables

2015

Carrying amount 2014 $’000

% of trade receivables

2014

Most significant single customer 1,183 8% 2,327 12%

Top ten most significant customers 6,614 46% 12,118 58%

8. Risk (continued)



Impairment losses

The aging of the Group’s Trade receivables at the reporting date was:

Gross 2015 $’000

Impairment 2015

$’000

Gross 2014 $’000

Impairment 2014

$’000

Not past due 9,484 – 11,053 –

Past due 0-30 days 2,041 – 4,855 –

Past due 31-120 days 860 – 1,575 –

Past due 121 days to one year 406 – 1,166 –

More than one year 1,021 (487) 2,181 (1,517)

Retentions (not past due) 216 – 241 –

14,905 (487) 21,071 (1,517)

The movement in the allowance for impairment in respect of Trade receivables during the year was as follows:

2015 $’000

2014 $’000

Balance at start of year 1,517 2,369

Recoveries of previous year impairments (183) (600)

Impairment losses recognised 636 95

Amounts written off as non-recoverable (1,483) (347)

Balance at 30 June 487 1,517

The impairment loss at 30 June 2015 relates to specific invoices that the Group considers are at risk of being recovered. The allowance account in

respect of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that

point the amount is considered irrecoverable and is written off against the financial asset directly.

The impairment provision related to debts that are not past due is based on current uncertainties and related risks within the industries in which the

Group trades. The Group will continue to strongly pursue all debts provided for.

Credit risks related to financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Group’s Finance team. Investments of surplus funds are made with the

Group’s bankers who have a credit rating by Standard & Poor’s rating agency of AA- or higher.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group manages this risk by ensuring, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and

stressed conditions. The Group ensures that it has sufficient cash on demand to meet expected operational commitments in the short term including

the servicing of financial obligations. The Group regularly forecasts cash flows to assess future liquidity requirements with sufficient time to hold

discussions with the Group’s bankers, if such discussions are required.

LogiCamms 52


The following are the contractual maturities of the Group’s liabilities, including estimated interest payments and excluding the impact of netting

agreements:

Carrying amount

$’000

Contractual cash flows

$’000

Less than 1 year $’000

1-2 years $’000

2-5 years $’000

Balance at 30 June 2014

Financial liabilities

Trade and other payables 10,977 9,730 7,871 1,859 –

10,977 9,730 7,871 1,859 –

Balance at 30 June 2015

Financial liabilities

Trade and other payables 13,597 12,642 12,642 – –

13,597 12,642 12,642 – –

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or

the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within

acceptable parameters, while optimising the return.

Currency risk

The Group has no significant exposure with currency risk.

Interest rate risk

The Group’s borrowings are on fixed interest rates (finance leases). Interest rate risk is managed by ensuring that total interest rate cover is well in excess of

minimum bank covenant requirements, to ensure the Group retains a high level of flexibility to absorb any adverse movements in interest rates.

Profile

At reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

2015 $’000

2014 $’000

Fixed rate instruments

Financial liabilities – –

Variable rate instruments

Financial assets 21,851 12,150

Financial liabilities – –

8. Risk (continued)



Cash flow sensitivity analysis for variable rate instruments

A change of 200 basis points in interest rates would have increased (decreased) equity and profit by the amounts shown below. A sensitivity of 2%

(2014: 2%) has been selected as this is considered reasonably possible. The Directors cannot nor do not seek to predict movements in interest rates.

These sensitivities are shown for illustrative purposes only.

2015 $’000

2014 $’000

Effect on profit increase / (decrease)

If interest rates were 2% higher (2014: 2%) 437 243

If interest rates were 2% lower (2014: 2%) (437) (243)

Effect on profit after tax increase / (decrease)



Effect on shareholders’ equity increase / (decrease)



Fair values versus carrying amounts

The fair values and carrying amounts of financial assets and liabilities shown in the balance sheet were not materially different at 30 June 2015 due to

the short term nature of these financial assets and liabilities.

The Group has no financial instruments carried at fair value and therefore has not disclosed the fair value hierarchy.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development

of the business. The Board of Directors monitors the return on capital, which the Group defines as net operating income divided by total shareholders’

equity. The Board of Directors also monitors the level of dividends to ordinary shareholders.

The Company will aim to distribute 40% – 60% of net profit after tax in the form of dividends. The ultimate dividend paid will be determined by the

board after consideration of general business and financial conditions, working capital requirements, taxation position, and future capital expenditure

requirements.

As at the balance date the Group had no debt facilities and had bank guarantee and bonding facilities of $22,000 thousand (utilised $4,931 thousand)

(2014: 22,000 thousand (utilised $2,908 thousand)). This facility was secured by a fixed and floating charge over all the Company, its subsidiaries and all

assets of the Group. The bank’s financial covenants imposed on the Group are as follows and have been met:

1. Operating leverage : total liabilities to be less than 2.0 times the previous twelve months’ EBITDA;

2. Capital adequacy ratio: tangible net assets divided by total tangible assets to exceed 40 percent; and

3. Current ratio: current assets divided by current liabilities to be greater than 2.0 times.

(iii) Impairment Financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered

to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the

present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale

financial asset is calculated by reference to its fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in

Groups that share similar credit risk characteristics.

All impairment losses are recognised in profit or loss.

LogiCamms 54


Non-financial assets

The Group tests non-financial assets for impairment:

õ At least annually for indefinite life intangible assets and goodwill; and

õ Where there is an indication that the asset may be impaired (which is assessed at least each reporting period); or

õ Where there is an indication that previously recognised impairment (on assets other than goodwill) may have changed.

If any such indication exists then the asset’s recoverable amount is estimated, being the greater of its value in use and its fair value less costs to sell.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use

that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The Group considers that it has one

cash generating unit for the purpose of impairment testing of goodwill.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised in the profit or loss if the carrying amount of an asset or its cash-generating unit (“CGU”) exceeds its recoverable

amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated

to the units and then to reduce the carrying amount of the other assets in the unit (Group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at

each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in

the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not

exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Goodwill

The recoverable amount of the goodwill is based on a value in use calculation with respect to the cash generating unit and was determined by

applying a five year net present value calculation of projected cash flows and a terminal value at the end of the fifth year. The recoverable amount was

in excess of the carrying value of the goodwill, so no impairment loss was required. The calculation of value in use was determined having regard to the

following key assumptions:

õ A pre-tax discount rate applied to cash flows of 17.94% (2014: 16.81%)

õ Expected future profits for the first year based on internal financial forecasts

õ Future nominal revenue growth of 5% per year for year’s two to five (2014: 5.0%)

õ After the fifth year a terminal value was applied using a growth rate of 2.5% (2014: 2.5%)

Sensitivity to changes in assumptions

Management recognises that there are various reasons the estimates used in these assumptions may vary. For cash generating units, there are possible

changes in key assumptions that could cause the carrying value of the CGU to exceed its recoverable amount. The changes required to each of the key

assumptions (assuming all other assumptions remain the same) to cause the carrying value of the CGU to exceed its recoverable amount are shown

as follows:

Assumption Possible change considered Change required to indicate an impairment

EBITDA margin Reduction in margin across 5 years FY16-FY20 Decrease of 2.0%

Revenue growth Reduction in growth rate across 5 years FY16-FY20 Decrease of 11.7% to a revenue contraction

per annum of 6.7%

8. Risk (continued)



9. Corporate and Group

(i) Group entitiesParent and ultimate controlling party

As at, and throughout, the financial year ended 30 June 2015 the parent company of the Group and ultimate controlling party in the Group was

LogiCamms Ltd. The subsidiary companies are listed below:

Country of incorporation

Ownership interest

2015

Ownership interest

2014

LogiCamms Holdings Pty Ltd Australia 100% 100%

LogiCamms (WA) Pty Ltd Australia 100% 100%

LogiCamms Consultants Trust Australia 100% 100%

LogiCamms (PNG) Pty Ltd Australia 100% 100%

Competency Training Pty Ltd Australia 100% 100%

LogiCamms Australia Pty Ltd (formerly LogiCamms Northern Pty Ltd) Australia 100% 100%

LogiCamms (CGH) Pty Ltd Australia 100% 100%

LogiCamms (Central) Pty Ltd Australia 100% 100%

LogiCamms Shared Services Pty Ltd Australia 100% 100%

LogiCamms Consulting Pty Ltd Australia 100% –

Independent Technology Limited New Zealand 100% 100%

Independent Technology Holdings Limited New Zealand 100% 100%

ITL Engineering New Zealand Limited New Zealand 100% 100%

ITL Limited New Zealand 100% 100%

ITL Engineering Australia Pty Ltd New Zealand 100% 100%

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable

returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries

are fully consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases.

Parent entity disclosures

2015 $’000

2014 $’000

Result of the parent entity

Profit and comprehensive income for the year 4,632 4,097

Financial position of parent entity at year end

Current assets 18,998 25,109

Total assets 96,530 101,994

Current liabilities 4,767 5,732

Total liabilities 7,204 10,693

Net assets 89,325 91,301

Total equity of the parent entity comprising of

Share capital 65,442 67,399

Reserves 886 1,643

Retained earnings 22,997 22,259

Total equity 89,325 91,301

LogiCamms 56


Parent entity contingencies

2015 $’000

2014 $’000

GST liabilities of other entities within the GST Group 467 757

Tax (assets) / liabilities of other entities within the TCG (271) (659)

(ii) Equity accounted investees (joint venture)The Group’s share of profits in its equity accounted investee, the LogiCamms-Electro 80 joint venture, for the year is set out below in the summary

financial information:

2015 $’000

2014 $’000

Ownership % 50% 50%

Current assets 633 1,530

Non-current assets – –

Total assets 633 1,530

Current liabilities 147 372

Non-current liabilities – –

Total liabilities 147 372

Net assets 486 1,158

Group’s share of net assets 243 579

Revenues 1,985 5,752

Expenses (1,456) (5,224)

Profit / (loss) 529 528

Group’s share of profit / (loss) 264 264

(ii) Equity accounted investees (joint venture)During the year the Group received $600,000 (2014: $61,000) in dividends and returns of capital from its equity accounted investee. Interests in joint

ventures are accounted for using the equity method. Under the equity method of accounting, the investments are initially recognised at cost and

adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of

movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and

joint ventures are recognised as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-

term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in these

entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of

equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

9. Corporate and Group (continued)



(iii) Acquisitions Accounting Policy

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to

the Group.

For acquisitions, the Group measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus the recognised amount of

any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the

acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised

in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incur in

connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition

date. If the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. Otherwise, subsequent

changes to the fair value of the contingent consideration are recognised in profit or loss.

Monarc Environmental

On 6 March 2015 the Group acquired 100% of a business called Monarc Environmental (“Monarc”) for a consideration of $2,798,000. The effective

accounting date was 1 March 2015. The consideration paid was comprised of $1,808,000 cash, $490,000 of issued shares and the accrual of a profit

earn out of $500,000. The fair value of identifiable net assets acquired totalled $308,000 and acquired goodwill totalled $2,490,000 (refer note 6(ii)).

The contribution of Monarc to the consolidated Group profit for the period was not material. The acquisition is expected to provide the Group

with new Consulting expertise in multi-disciplined environmental science. The accounting for the acquisition of Monarc has been completed on

a provisional basis. Further analysis will be completed during the 12 months post acquisition.

Petromod Pty Ltd

On 8 July 2015, the Group acquired 100% of a business called Petromod Pty Ltd (“Petromod”) for $6,023,000. The effective accounting date was

1 July 2015. The consideration paid was comprised of $2,198,000 cash and the accrual of a profit earn out of $3,825,000. The fair value of identifiable

net assets acquired totalled $422,000 and acquired goodwill totalled $5,601,000. The earn outs are contingent upon achievement of earnings

above historical levels to drive out performance. As the acquisition occurred post the end of the financial year, the contribution of Petromod to

the consolidated Group profit for the period was nil. The acquisition is expected to provide the Group with expertise in maintenance services in the

Hydrocarbons industry. The accounting for the acquisition of Petromod has been completed on a provisional basis. Further analysis will be completed

during the 12 months post acquisition.

No acquisitions were made by the Group in the previous financial year.

(iv) Related partiesKey Management Personnel compensation

The Key Management Personnel compensation included in ‘Personnel expenses’ (see Note 4(iv)) is as follows

2015 $’000

2014 $’000

Short-term employee benefits 2,140,287 2,587,892

Other long term benefits 29,573 40,599

Post-employment benefits 131,418 222,091

Share-based payments 154,635 191,738

Termination benefits 406,475 772,724

2,862,388 3,815,044

Individual directors and executives compensation disclosures

Information regarding individual Directors’ and executives’ compensation and some equity instruments disclosures as required by Corporations

Regulations 2M.3.03 are provided in the Remuneration Report section of the Directors’ Report. Apart from the details disclosed in this note, no Director

has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving

Directors’ interests existing at year-end.

LogiCamms 58


Key Management Personnel and their related parties

No loans were made to Key Management Personnel and their related parties during the year. The Group has not advanced loans to key management

persons or their related parties.

437,147 of ordinary shares were granted to Key Management Personnel during the reporting period upon exercise of rights granted as compensation

in prior periods (2014: 90,228).

The movement during the reporting year in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by Key Management

Personnel is detailed in the Remuneration Report.

The terms and conditions of these transactions with management persons and their related parties were no more favourable than those available, or

which might reasonably be expected to be available, on similar transactions to non-director related entities on an arm’s length basis.

Non-Key Management Personnel disclosures

There were no transactions with non-Key Management Personnel during the year that require disclosure.

Acquisition of shares from related parties

There were no acquisitions of shares from related parties in the 2015 financial year.

Subsidiaries

There is a related party relationship between the parent, LogiCamms Limited, and each of its subsidiaries listed in Note 9(i).

(v) Share-based paymentsShare Options

From December 2007 to December 2010, the Group provided Directors and Employees with an Option Plan that entitled them to purchase shares in

the Company. The movement in the number and weighted average exercise prices of share options is as follows:

Weighted average exercise price

2015

Number of options

2015

Weighted average exercise

2014

Number of options

2014

Outstanding at beginning of year – – 1.11 136,000

Forfeited during the year – – 1.20 (100,000)

Exercised during the year – – 0.85 (36,000)

Outstanding at 30 June – – – –

Exercisable at 30 June – – – –

Long Term Incentive Plan

During the year ended 30 June 2011 the Group established a Long Term Incentive Plan under which the Board at its discretion can offer Performance

Rights and Share Appreciation Rights to Key Management Personnel.

In addition, there remains a tranche of Performance Rights issued on 10 November 2011 which did not form part of the Long Term Incentive Plan.

The terms and conditions of the Rights are as follows:

Grant date / employees entitledRemaining Number

of instruments Vesting conditionsContractual life of Rights

Performance Rights issued on 10 November 2011 66,666 66,666 on or after 2 June 2016 4.5 years

Total Performance Rights 66,666

Total Rights at 30 June 2015 66,666

The terms of the Performance Rights issued on 10 November 2011 require that the recipient must remain in the continuous employment of the

Company until the vesting date. These Rights have no exercise price and are to be settled by physical delivery of shares at a conversion ratio of 1:1.




In addition to the tenure condition noted above, the terms of the other Performance and Share Appreciation Rights have two performance conditions:

õ A relative total shareholder return measure over the performance period

õ An absolute earnings per share growth target over the performance period

The performance measures are mutually exclusive. Performance will be assessed over a period of three years. The exercise price for these Performance

Rights is nil, while the effective exercise price of the Share Appreciation Rights is equal to the share price at grant, and the payoff is equivalent to the

difference between the price at the end of the performance period, and the allocation share price, with the value settled in shares at the end of the

performance period. No dividends are received on shares during the performance period.

The movement in the share rights for the year is as follows:

Outstanding at 1 July 2014 Granted

Forfeited or CancelledA Exercised

Outstanding at 30 June 2014

Exercisable at 30 June 2014

Performance Rights

Issued on 10 November 2011 200,000 – – (133,334) 66,666 –

Issued on 20 February 2012 297,671 – – (297,671) – –

Issued on 8 November 2012 342,380 – (342,380) – – –

Issued on 1 September 2013 47,431 (9,555) (37,876) – –

Issued on 20 November 2014 – 250,000 (250,000) – – –

887,482 250,000 (601,935) (468,881) 66,666 –

Share Appreciation Rights

Issued on 20 February 2012 986,280 – (986,280) – – –

Issued on 8 November 2012 1,013,390 – (1,013,390) – – –

1,999,670 – (1,999,670) – – –

Outstanding at 1 July 2013 Granted

Forfeited or Cancelled Exercised

Outstanding at 30 June 2014

Exercisable at 30 June 2014

Performance Rights

Issued on 10 November 2011 200,000 – – – 200,000 66,666

Issued on 20 February 2012 601,562 – (303,891) – 297,671 297,691

Issued on 8 November 2012 716,192 – (373,812) – 342,380 –

Issued on 21 May 2013 90,000 – – (90,000) – –

Issued on 1 July 2013 – 282,070 (18,287) (263,783) – –

Issued on 1 September 2013 – 49,137 (1,706) – 47,431 –

Issued on 7 November 2013 – 431,677 (431,677) – – –

1,607,754 762,884 (1,129,373) (353,783) 887,482 364,357

Share Appreciation Rights

Issued on 20 February 2012 1,993,171 – (1,006,891) – 986,280 986,280

Issued on 8 November 2012 2,119,806 – (1,106,416) – 1,013,390 –

Issued on 7 November 2013 – 1,764,027 (1,764,027) – – –

4,112,977 1,764,027 (3,877,334) – 1,999,670 986,280

(A) The forfeitures and cancellations relate to:(1) the cancellation of the FY2014 long term incentive scheme and(2) the forfeiture of rights relating to FY2012, FY2013 and FY2014 for two scheme participants who left the employ of the Group and received a cash settlement in lieu of their rights

entitlements. No incremental fair value was granted. The net effect of these transactions was to reduce administration expenses in 2014 by $244,000).

LogiCamms 60


Employee expenses relating to equity settled share based payments

2015 $’000

2014 $’000

Gift shares granted to employees 563 1

Performance Rights 638 208

Share Appreciation Rights (157) 109

Total expense recognised as employee costs 1,044 318

Share-based payment transactions

The grant-date fair value of options, Performance Rights or Share Appreciation Rights granted to employees is recognised as an employee expense over

the contractual life of the option or right that the employees become unconditionally entitled to the awards. The amount recognised as an expense is

adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the

amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions

at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to

reflect such conditions and there is no true-up for differences between expected and actual outcomes.

10. Unrecognised Items

(i) Subsequent eventsApart from the acquisition of Petromod detailed at note (9) (iii), there are no material events subsequent to balance date that management is aware of

that require disclosure.

(ii) Operating leases

2015 $’000

2014 $’000

Non-cancellable operating lease rentals are payable as follows:

Less than one year 4,556 4,044

Between one and five years 7,476 10,825

More than five years – 455

12,032 15,324

The Group leases properties in Brisbane, Perth, Melbourne and Adelaide as well as in several regional locations and New Zealand. The leases typically

run for a period of 2 to 10 years, with options to renew. Most leases increase annually to reflect market rentals or movement in the consumer price

index. During the year ended 30 June 2015 $5,148,000 (2014 $5,897,000), inclusive of the increase in the provision for onerous lease of $1,300,000

(2014: $1,900,000), was recognised as an expense in the income statement in respect of operating leases.



1 In the opinion of the directors of LogiCamms Ltd (‘the Company’):

(a) the consolidated financial statements and notes set out on pages 31 to 60, and the Remuneration report in the Directors’ report, set out on

pages 13 to 39, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance for the financial period ended on

that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;

(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a);

(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

2 The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the managing director and chief

financial officer for the financial year ended 30 June 2015.

Signed in accordance with a resolution of the directors:

Dated at Brisbane, Queensland, this 26th day of August 2015.


DIRECTORS’ DECLARATION As at 30 June 2015

LogiCamms 62

INDEPENDENT AUDITOR’S REPORT

PricewaterhouseCoopers, ABN 52 780 433 757Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Independent auditor’s report to the members of LogiCamms Limited

Report on the financial report We have audited the accompanying financial report of LogiCamms Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration for LogiCamms Limited (the consolidated entity). The consolidated entity comprises the company and the entities it controlled at year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2(a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the consolidated entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

IndependenceIn conducting our audit, we have complied with the independence requirements of the CorporationsAct 2001.


INDEPENDENT AUDITOR’S REPORT

PricewaterhouseCoopers, ABN 52 780 433 757Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au


Auditor’s opinion

In our opinion:

(a) the financial report of LogiCamms Limited is in accordance with the Corporations Act 2001,including:

(i) giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.

(b) the financial report and notes also comply with International Financial Reporting Standards as disclosed in Note 2(a).

Report on the Remuneration Report We have audited the remuneration report included in pages 10 to 21 of the directors’ report for the year ended 30 June 2015. 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.

Auditor’s opinion In our opinion, the remuneration report of Logicamms Ltd for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001.

PricewaterhouseCoopers

Michael Shewan BrisbanePartner 26 August 2015

LogiCamms 64

PricewaterhouseCoopers, ABN 52 780 433 757Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au


Auditor’s Independence Declaration

As lead auditor for the audit of LogiCamms Limited for the year ended 30 June 2015, I declare that tothe best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit; and

b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of LogiCamms Limited and the entities it controlled during the period.

Michael Shewan BrisbanePartnerPricewaterhouseCoopers

26 August 2015

LEAD AUDITOR’S INDEPENDENCE DECLARATION


Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. The information is correct

at 26 August 2015.

ShareholdingsTwenty largest shareholders

The number of shares held by substantial shareholders and their associates are set out below:

Shareholder Units % of Units

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 6,752,075 9.77

NATIONAL NOMINEES LIMITED 5,677,741 8.22

UBS NOMINEES PTY LTD 4,328,922 6.27

AMW CONSULTANCY SERVICES PTY LTD 2,000,000 2.90

MR ADAM ROBERT KEATS & MRS NATASHA ELIZABETH KEATS 1,414,126 2.05

MR ANDREW JOHN WELDON SMITH & MS SUZANNE ELIZABETH SMITH & MS JULIA YVONNE MUSTARD 1,099,320 1.59

MR GRAHAM JOHN GILKISON & MS JOANNE KIM GILKISON & MR ANDREW JOHN WELDON SMITH 1,099,320 1.59

BOND STREET CUSTODIANS LIMITED 992,524 1.44

MR ADAM MURRAY HORE & MS MEAGHAN LEE ROWE 727,989 1.05

PACIFIC CUSTODIANS PTY LIMITED 726,347 1.05

BFA SUPER PTY LTD 680,000 0.98

MONARC ENVIRONMENTAL PTY LTD 671,141 0.97

MR IAN HAMILTON PATERSON 624,702 0.90

MR PAUL DAVID WALKER 593,149 0.86

EQUITAS NOMINEES PTY LIMITED 525,894 0.76

MRS SALLY MARJORIE EVERIST 510,000 0.74

MRS MILLIE SALLY-JANE GRACE ADELAIDE MILLER & MR ANDREW JAMES MILLER 490,000 0.71

MR PETER JAMES MCDONALD & RT MCDONALD TRUSTEE LIMITED 471,137 0.68

MR ALAN JOHN HOOKER & MS BEVERLEY JANETTE TATHAM 471,137 0.68

HILLBOI NOMINEES PTY LTD 456,294 0.66

ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD 454,273 0.66

MR ADAM ROBERT KEATS & MR STEVEN MICHAEL WILD 357,203 0.52

Total 31,123,294 45.05

Balance of register 37,958,078 54.95

Grand total 69,081,372 100.00

Substantial Shareholders

Shareholder Units % of Units

Tiga Trading Pty Ltd & Related Parties 9,600,000 13.90%

Forager Funds Management 4,687,722 6.80%

Range of SharesOrdinary Fully Paid Shares

Range Total Holders Units

% of issued capital

100,001 and Over 76 41,581,025 60.19

50,001 to 100,000 85 6,341,855 9.18

10,001 to 50,000 633 14,919,706 21.60

5,001 to 10,000 474 3,869,273 5.60

1,001 to 5,000 653 2,175,782 3.15

1 to 1,000 278 193,731 0.28

Total 2,199 69,081,372 100.00

ASX INFORMATION

LogiCamms 66

Unmarketable ParcelsThere were 112 holders of unmarketable parcels of less thaqn $500

Voluntary Escrow

Registered NameShares Escrowed

Until 21/05/16

MR COLIN PETER FROMONT & Related Parties 55,104

MR GRAHAM JOHN GILKISON Related Parties 366,440

MR ALAN JOHN HOOKER & Related Parties 157,046

MR PETER JAMES MCDONALD & Related Parties 157,046

MR ANDREW JOHN WELDON SMITH & Related Parties 366,440

Total 1,102,076

Unlisted Securities – Performance Rights

Issue Date Vesting Date Number of Shares

10.11.11 2.6.16 66,666

26.08.15 30.6.16 245,308

26.08.15 30.6.17 270,061

582,035

The Performance Rights are exercisable into shares for nil consideration. The terms of the Performance Rights require that the recipient must remain in

the continuous employment of the Company until the vesting date.

Unlisted Securities – Options

Nil

Unlisted Securities – Share Appreciation RightsNil

The effective exercise price of the share appreciation rights is equal to the share price at the date of grant and the payoff is equivalent to the

difference between the price at the end of the performance period and the allocation share price, with the value settled in shares at the end

of an additional 1 year period.

Securities ExchangeThe Company is listed on the Australian Securities Exchange. The Home exchange is Perth, Western Australia.

Other informationLogiCamms Ltd, incorporated and domiciled in Australia, is a publicly listed company limited by shares.

Buy BackThere is no current on-market buy-back.

Voting rightsOrdinary shares

The voting rights attached to the ordinary shares are governed by the Constitution. On a show of hands every person present who is a member

or representative of a member shall have one vote and on a poll, every member present in person or by proxy or by attorney or duly authorised

representative shall have one vote for each share held.

Options

There are no options.

ASX INFORMATION

LogiCamms Limited

ASX:LCMACN 127 897 689ABN 90 127 897 689

Registered Office

433 Boundary Street, Spring Hill,Queensland, Australia 4000Tel. + 61 7 3058 7000

LogiCamm

s Limited | A

NN

UA

L REPORT 2015

This document was printed on Titan Satin which is produced in an ISO 14001 accredited facility ensuring all processes involved in production are of the highest environmental standards. FSC Mixed Sources Chain of Custody (CoC) certification ensures fibre is sourced from certified and well managed forests.

www.logicamms.com.au

Location of Share Registry

Computershare Investor Services Limited45 St Georges Terrace, West Perth,Western Australia 6000Tel. + 61 8 9323 2000

To find a LogiCamms office visit www.logicamms.com.au/contact-us

annual report - logicamms · 2015 annual report 3 ... petromod which took effect from 1 july 2015....

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