2019

ANNUAL REPORT
 CORPORATE DIRECTORY OUR COMPANY

DIRECTORS SHARE REGISTER Boom Logistics Limited (“Boom” or “the

Company”) and its controlled entities is
Maxwell J Findlay (Chairman) Computershare Investor Services an Australian industrial services group
Tony Spassopoulos Pty Ltd (“the Group”) that provides superior
Melanie Allibon 452 Johnston Street crane logistics, labour and lifting
Jean-Pierre JAM Buijtels Abbotsford, Victoria, 3067 solutions for customers in the mining
Terrence C Francis Investor Enquiries 1300 850 505 and resources, wind, energy and utilities,
Terence A Hebiton infrastructure, industrial maintenance
ANNUAL GENERAL MEETING and telecommunications sectors.
COMPANY SECRETARY At Boom, we deliver the full package
Friday, 22 November 2019
Malcolm Ross at 11:00am of engineering know-how, specialised
KPMG lifting equipment and multi-skilled
Tower Two, Collins Square teams required to safely manage the
REGISTERED OFFICE
727 Collins Street lifting of large scale and complex tasks
Suite B Level 1, Melbourne, Victoria, 3000 for infrastructure, construction and
55 Southbank Boulevard shutdown maintenance customers.
Southbank Vic 3006 The Company seeks to be
Telephone (03) 9207 2500 Date of publication: 21 August 2019 recognised by our customers,
Fax (03) 9207 2400 employees, communities and
shareholders as the supplier of high-
value, reliable lifting solutions and labour
INTERNET ADDRESS services without injury.
www.boomlogistics.com.au
OUR PURPOSE
To safely and profitably grow our
business through the provision of
innovative customer lifting solutions and
specialised labour hire services in the
markets we serve to deliver returns and
value to our shareholders.

CONTENTS OUR VISION

To be recognised as the industry leader
in the provision of lifting services to the
Australian market.

Corporate Directory ii OUR VALUES

Operating and Financial Review 5
Chairman’s Report 5 The Boom values underpin and define
the way we do business.
Highlights 6
Managing Director’s Report 8 • Customer Focus – everything begins
Company Performance 12 with the customer.
Our People & Systems 18 • Safety Always – continue our journey
Our Health, Safety, Environment & Quality 22 towards zero harm.
Corporate Governance 25 • Developing our People –
commitment to our future.
Directors’ Report 28
• Teamwork – working together to
Remuneration Report 31 achieve our best.
Auditor’s Independence Declaration 45 • Innovation – looking for new ways to
Consolidated Statement of Comprehensive Income 46 do things.
Consolidated Statement of Financial Position 47 • Respect – for each other and all
Consolidated Statement of Cash Flows 48 stakeholders.
Consolidated Statement of Changes in Equity 49
The Boom values are an
Notes to the Consolidated Financial Statements 50 uncompromising foundation of our
Directors’ Declaration 80 organisation, guiding our decisions,
Independent Audit Report to Members of Boom Logistics Limited 81 our behaviours and the way we do
ASX Additional Information 85 business to maximise returns for our
shareholders.

IIii BOOM LOGISTICS ANNUAL REPORT 2019

 400 permanent Boom
employees and over

760 casual personnel of which the

majority are engaged by readi

250
cranes in all sizes, from 5 tonne up to
750 tonne

120 travel towers, from

12 metres up to 70 metres

A fleet of elevated work platforms

and support transport

13 depots across
Australia

A database of over

10,000 people available

through readi to service our
customers’ labour requirements

DELIVER LIFTING
SOLUTIONS, WITH SCALE
AND PRECISION, EVERY
TIME. MANAGING SAFETY
AND COMPLEXITY WITH
CONFIDENCE – THAT’S
THE PROMISE WE MAKE
TO OUR CUSTOMERS

BOOM LOGISTICS ANNUAL REPORT 2019 1

 OUR VALUE PROPOSITION

As a large-scale lifting project specialist, we seek to deliver innovation for our customers,
build shareholder value and ensure safety excellence. We continue to build our leading
reputation in the market as a trusted lifting, construction and maintenance solutions
partner for large scale infrastructure.

Boom’s customer value proposition is based on total lifting solutions and specialised
labour services involving:

EQUIPMENT
• A comprehensive and diverse fleet aligned to customer requirements in mining
and resources, wind, energy, utilities, infrastructure, industrial maintenance and
telecommunications.
• Well maintained fleet with maintenance records and Key Performance Indicator
reporting for customers.

OPERATIONAL CAPABILITY
• Highly experienced and trained workforce of supervisors, crane operators, riggers
and travel tower operators.
• Operational resources and infrastructure to support customers in our core markets.
• Planned and configured services involving operators, cranes, transport, travel towers
and other assets to meet complex customer requirements.
• The readi labour hire business delivers an integrated labour solution to both existing
and new customers. It currently supplies support to key Boom contracts and
continues to focus on expanding its offering of multiple trades and skills to external
customers.

ENGINEERING EXPERTISE
• Pre-lift customer site survey and analysis.
• Detailed engineering lift studies to drive safety, efficiency and cost effectiveness.
• Project planning and project management.
• Wind farm construction including lifting, mechanical and electrical installation and
maintenance.

SAFETY & QUALITY SYSTEMS

• Cultural alignment with our customer base, with an uncompromising safety focus.
• AS/NZS ISO 4801:2001 certification and transition to AS/NZS ISO 9001:2015
achieved.
• Investment to drive continuous improvement in our safety systems, processes and
organisation.

The Group’s distinctive and comprehensive value proposition provides a solid platform
for future growth to maximise returns to shareholders.

2 BOOM LOGISTICS ANNUAL REPORT 2019

 BOOM’S CUSTOMER
VALUE PROPOSITION
IS BASED ON TOTAL
LIFTING SOLUTIONS
AND SPECIALISED
LABOUR SERVICES

BOOM LOGISTICS ANNUAL REPORT 2019 3

 TO BE RECOGNISED
AS THE INDUSTRY
LEADER IN THE
PROVISION OF LIFTING
SERVICES TO THE
AUSTRALIAN MARKET

4 BOOM LOGISTICS ANNUAL REPORT 2019

OPERATING AND FINANCIAL REVIEW
CHAIRMAN’S REPORT
On behalf of the Board, I would like to present the Boom
Logistics Limited (“Boom”) annual report for the financial year
ended 30 June 2019 (“FY19”).

The 2019 financial year was one of significant consolidation

and restructuring for Boom as the leadership transitioned to
our new Managing Director and Chief Executive Officer, Tony
Spassopoulos at the end of Q1, FY19.

Boom delivered a statutory revenue result of $183m which led

to a net loss of $5.3m compared with a loss of $1.5 million in
FY18. The FY19 result was impacted by operating challenges
including a significant industrial relations dispute in NSW.

During FY19, a key capital management initiative to deliver value to shareholders was
the on-market buy back announced on 21 November 2018 to purchase and cancel
up to 10% of issued share capital over the next 12 months. I am pleased to report
the Company bought back 35.7m shares on-market and through a minimum holding
buyback equating to 7.5% of issued capital in the period to 30 June 2019. The Board
intends to continue with the on-market buy back following the release of FY19 results.

Boom successfully refinanced its loan facilities with an extended term and increased
debt capacity in January 2019 thereby improving Boom’s operational flexibility and ability
to execute further capital management initiatives in 2020. However, Boom remains
constrained under its loan facilities to paying dividends from net profits.

Boom continues to focus on improving return on capital through efficient capital

allocation. This was executed in FY19 by leasing a number of large cranes and
redeploying owned assets across the business to support growth. Older and under-
utilised cranes have been sold, thus reducing the average fleet age.

In our crane lifting business we are confident that contract wins in FY19 in the wind farm
sector and the renewal of long-standing contracts with key customers in mining maintenance
have positioned the crane business for improved volume and profitability in FY20.

The travel towers business was restructured during the year by expanding its sales team
to seize growth opportunities while reducing overhead through downsizing and closing
unprofitable depots and rationalising the travel towers fleet. The travel towers business is
now positioned to improve profitability and continue to support its core customers in the
mobile telecommunications and power sectors.

Our readi business has grown to become the main source of labour hire for Boom and is
now focused on growth through the supply of specialised labour to external customers.

The Board is delighted to welcome Melanie Allibon who has been appointed as an
independent Non-Executive Director. Ms. Allibon’s appointment reinforces our focus on
remuneration, industrial relations and safety, as well as enhancing our capability with
regards to human resources best practices. Ms. Allibon’s particular expertise in industrial
relations and human resources across the industrial services sector is expected to bring
extensive and valuable experience to Boom and enhance the Board’s overall mix of skills,
knowledge and capabilities.

Looking ahead, the business has completed considerable restructuring and consolidation
initiatives in FY19 and we expect this will underpin an improved operating result in FY20.

Finally, I would like to thank my fellow directors, together with our hard-working team,
led by Tony Spassopoulos. We look forward to overseeing their efforts to ensure Boom
continues on this path of progress and success.

Maxwell J Findlay
Chairman

BOOM LOGISTICS ANNUAL REPORT 2019 5

 OPERATING AND FINANCIAL REVIEW
HIGHLIGHTS
HEALTH, SAFETY,
QUALITY & n
Reported a Total Recordable Injury Frequency Rate (TRIFR) of 8.6 at the end of the year and
over 3.2 million labour hours worked without a Lost Time Injury (LTI).
ENVIRONMENT n Continued to deploy the three-year HSEQ Strategic Plan with focus on improving lifting
operations, verification of competency, training planning, assurance, induction and
transport activities.
n Maintained certification to AS/NZS 4801:2001, AS/NZS ISO 9001:2015, OHSAS 18001:2007.
Compliance with environmental management obligations continued with success.
n Extended our values to include innovation and respect, with an unwavering focus on safety,
our people, our customers and teamwork.

FINANCIAL &
OPERATIONS n Share buy-back program commenced. 35.7 million shares (7.5% of share capital) purchased
and cancelled in FY19.
n Delivered improved free cash flow of $8.8 million up from $8.4 million in FY18.
n Net debt reduced to $36.6 million (30 June 2018: $37.3 million).
n New long term finance facilities negotiated with increased debt capacity, reduced funding
costs and increased tenure with banks to January 2022.
n Reported revenue of $182.7 million (FY18: $183.1 million).
n Trading EBIT of $2.8 million (FY18: $2.9 million).
n Net loss after tax $5.3 million (FY18: loss of $1.5 million).
n FY19 results significantly impacted by industrial dispute in NSW.
n Strategic review of the travel towers business completed which effectively positions the
business to deliver improved returns in FY20 from a lower overhead base and rationalised
operating fleet and expanded sales team.

MARKETS &
GROWTH n The operating environment remained solid in each of the Group’s key industry sectors.
n Mining and Resources revenue was down $12.7 million on FY18 due to industrial action in
the Hunter Valley and non-recurrence of project work at BHP Olympic Dam. The business
renewed key maintenance contracts with BMA, Yancoal, Alcoa and Newmont Boddington
Gold. Demand from resources customers in Central Queensland has remained robust.
n Wind, Energy and Utilities successfully grew revenue by $8.3 million in FY19, as the wind
farm market remained strong and the pipeline continued to grow. Equipment delivered strong
utilisation and Boom was involved in turbine maintenance on four of Australia’s largest gas
turbine power stations.
n Infrastructure revenue was similar to FY18 however the sector presents opportunity buoyed
by major infrastructure projects in Melbourne in FY20.
n Industrial Maintenance delivered modest growth in revenue of $1.6 million. The Group is
focused on supplying readi specialised labour hire across its customer base, building on the
ongoing provision of labour to the oil and gas sector in Bass Strait.
n Telecommunications revenue increased by $3.1 million in FY19 securing key contracts with
tier two suppliers.

PEOPLE & SYSTEMS

n 80% of Boom’s permanent workforce directly interfaces with or provides a service to customers
including operators, supervisors, safety professionals, engineers and sales personnel.
n The total number of Boom employees was 1187 at 30 June 2019.
n Boom increased its flexible workforce and as at 30 June 2019, has over 760 casual and fixed
term employees. The majority of these employees are engaged through readi.
n The business continued to invest in its people to deliver efficiencies and develop leadership
across the organization, through internal and external training and development activities.
n Boom is delivering a Certificate IV in Frontline Leadership and Management course to
90 employees.

6 BOOM LOGISTICS ANNUAL REPORT 2019

 BOOM CONTINUES TO
EXPAND INTO NEW HIGH
GROWTH MARKETS,
WITH REVENUE
FROM WIND, ENERGY,
INFRASTRUCTURE AND
TELECOMMUNICATIONS
SECTORS

BOOM LOGISTICS ANNUAL REPORT 2019 7

 OPERATING AND FINANCIAL REVIEW
MANAGING DIRECTOR’S REPORT
as some mine sites have now opted for
multiple supplier arrangements to ensure TRAVEL TOWERS
continuity of crane services supply. The travel towers business recorded
revenue of $24.9 million in FY19,
The crane services revenue growth
improving by 24% on last year. The
was solid in Central Queensland, a
large travel towers were put to work
14% increase on last year. Growth
on the 5G network rollout for our
was underpinned by increased
telecommunications customers and
mining maintenance works with our
generated $13 million for FY19. With
key contracted customers at BMA,
major contracts in place, the 5G roll
Coronado, Glencore and Anglo Coal.
out is expected to continue throughout
Boom continued to build scale and scope
FY20. As previously announced, Boom
around its existing depot infrastructure
The last 12 months can be best undertook a strategic review of the
from major contractors in the region such
described as a year of establishing new travel towers business during the year.
as Downer, Thiess and Hastings Deering.
foundations to deliver sustainable profit As a result, several depots have been
growth and returns to shareholders. We In South Australia, a new EBA at Olympic restructured to reduce overhead costs
have positioned our business for growth Dam was agreed for the next three years, and fifty-five small under-utilised
in the mining resources sector, wind which is aligned with the current contract and obsolete travel tower assets have
farm and large-scale infrastructure and with BHP. In Western Australia, we been sold. 
construction projects. We are working renewed major contracts with Alcoa and
towards expanding the business into new Newmont Boddington Gold for a further READI
markets, adding new services and we three years and five years, respectively.
continue to build our leading reputation Our readi business continued to fulfil its
role as a major labour supplier for Boom’s
as a trusted lifting solutions partner.
PROJECTS customers during shutdowns. The focus
During the year, Boom achieved two Boom Projects continued to expand is now on securing new external revenue
years and over 3.2 million working hours, into new, high-growth markets, with through the Boom customer network in
without a Lost Time Injury (LTI) and a Total revenue from the wind farm, energy and the oil and gas, mining, construction and
Recordable Injury Frequency Rate (TRIFR) infrastructure sectors contributing $35.1m infrastructure sectors. Direct labour hire
of 8.6. Our goal is to lead the industry revenue in FY19, a 55% increase on revenue from Boom and readi contracts
on safety performance. Safety is always FY18. We completed the Mt Gellibrand was $27.1 million for FY19, representing
our priority at Boom, as we continue our wind farm project during the year and 12% growth over FY18. We see capacity
journey towards zero harm. were successful in securing two important tightening in the labour market and readi
contracts with GE Coopers Gap and is well placed to supply customers with
The 2019 financial results were below specialised labour hire, which is expected
Goldwind Cattle Hill. The value of these
expectations. Boom delivered a trading to provide a profitable non-capital revenue
new projects is $30 million revenue over
EBITDA of $20.1 million and trading stream for Boom in FY20.
FY19 and FY20, with work expected
EBIT of $2.8 million in FY19. The NSW
to be completed on both projects in
industrial action impacted these results Throughout the year we continued
December 2019.
by $4.5 million. to invest in our people. Key initiatives
Our fleet of heavy lift large mobile cranes undertaken include the commencement
CRANE SERVICES are also pursuing bridge, rail and civil of a leadership training program for our
frontline employees and managers.
infrastructure works, a sector with high
Crane services revenue of $95.6m growth prospects in FY20. Progress is being made on a youth and
was 18% below last year, impacted by apprenticeship training program for
industrial action in NSW in FY19 and riggers and operators, with Queensland
the non-recurrence of a major project at to commence by the end of 2019. This
Olympic Dam in FY18, which together new program is aiming to attract the
Travel Towers Labour Hire
represented $20m revenue. 14% 15%
“leaders of tomorrow” who can grow in
$25m $27m the business and forge a career path in
The industrial action in NSW was our industry.
resolved by agreeing to significant labour
cost increases. Boom is now rebuilding Projects
its presence in the Hunter Valley region FY19 19%
$35m
after closing the Newcastle depot
which became an unviable business
with the higher cost of labour and the Crane Services
Singleton depot has been restructured. 52%
$96m
Redundancy and restructuring costs at
both depots have been incurred. We are
pursuing new customers in the region

8 BOOM LOGISTICS ANNUAL REPORT 2019

 ACHIEVING PROFITABLE
REVENUE GROWTH
OUTLOOK PROVIDING VALUE
Boom is in a good position for FY20
and making positive progress towards ADDED SERVICES
diversifying its business with new value-
added services and targeting new growth
TO CUSTOMERS AND
markets. DELIVERING RETURNS
Achieving profitable revenue growth,
providing value-added services to
TO SHAREHOLDERS
customers and delivering returns to WILL REMAIN A
PRIORITY FOR THE
shareholders will remain a priority for the
business.

Market conditions in the resources sector BUSINESS

remain solid, which are likely to drive
increasing maintenance and support
higher levels of activity. We remain
focused on sustainable growth in the
mining sector and supplying new services
to our customers such as engineering
solutions, maintenance programs and
specialised labour skills.

With the strong pipeline of wind farm

projects, growing infrastructure sector
work and expansion of the 5G rollout
for telecommunications clients, the
outlook for FY20 is positive. The focus
is on improving labour productivity and
margins, increasing asset utilisation and
limiting capital expenditure to achieve a
solid return on capital for shareholders.

I would like to take this opportunity to

thank all our customers, suppliers, debt
providers and shareholders who have
supported us this past financial year.

In conclusion, I extend my thanks to our

dedicated employees for their continued
focus on safety and our customers. We
have loyal and passionate people in our
company who are committed to Boom’s
success.

Tony Spassopoulos
Managing Director

BOOM LOGISTICS ANNUAL REPORT 2019 9

 TIP HEIGHT 180M
HUB HEIGHT 115M
180

160

140

120
A380
WINGSPAN
100
79.5M
80

60

40

20

0
2000 2010 2014 2018

SUCCESSFUL IN
SECURING MAJOR
CONTRACTS WITH A
$415 MILLION WIND
FARM SALES PIPELINE
TO TENDER OVER THE
NEXT 3 YEARS

10 BOOM LOGISTICS ANNUAL REPORT 2019

GE RENEWABLES: A STRONG PARTNERSHIP CREATING
VALUE IN QUEENSLAND
Coopers Gap Wind Farm will be one Boom was awarded the contract to There were unique challenges to
of Australia’s largest wind farms upon undertake the lifting, mechanical and overcome with fluctuating weather
completion. It is a project that symbolises electrical installation of 56 wind turbine patterns and high wind speeds,
our spirit of endeavour. The Coopers generators (WTGs) on the Coopers Gap challenging terrain, and the wide
Gap Wind Farm will have a capacity of wind farm. Our work is scheduled for geographic spread of the towers.
453 MW and produce around 1,510,000 completion at the end 2019.
MWh of renewable energy, powering Despite these project complexities, Boom
approximately 264,000 average Boom delivered a Liebherr LG1750 tonne continues to deliver on time and on budget,
Australian homes. mobile crane for this project to perform with a consistent focus on health and
the major lifts which are up to 115 metres safety, delivering best-in-class engineering
Coopers Gap Wind Farm is 250 km north- high. In addition to the main crane, this skills and advice, and superior wind farm
west of Brisbane near Cooranga North, project utilises five other mobile cranes on construction experience. We are proud to
between Dalby and Kingaroy. The site site from the Boom fleet, including a 450 showcase our capabilities and contribute to
is located on land that is mainly used for tonne Grove GMK7450 and has a project local industry, communities and economies
cattle grazing and other farming activities. team of 40 people. in Queensland.

BOOM LOGISTICS ANNUAL REPORT 2019 11

 OPERATING AND FINANCIAL REVIEW
COMPANY PERFORMANCE
OVERVIEW
The Group reported a net loss after tax of $5.3 million for the year ended 30 June 2019
million (FY18: net loss of $1.5 million). As noted in the Managing Director’s Report, the
Group’s underlying trading EBIT performance was similar to the prior year.

The year was significantly impacted by an industrial dispute in the first half of the year,
and project delays in the second half of the year. The prior year included a significant
project at BHP Olympic Dam that did not recur.

Boom’s flexible asset rental model allows the Group access to new capital assets to win
new contracts and deliver growth with low capital requirements. The Group will continue
to grow its low capital specialised labour hire business, readi, targeting infrastructure
On behalf of the Board, I present a markets in the capital cities as well as expanding the successful partnership it has
review of Boom’s performance for the developed in the oil and gas industry.
year ended 30 June 2019.
Boom’s continued focus on capital discipline will allow both growth and capital
Boom is focused on sustainable growth management initiatives to continue in FY20 as the Company is focused on delivering
in each of its key markets, that is, mining returns to shareholders.
and resources, wind energy and utilities,
infrastructure and construction, industrial
maintenance and telecommunications. INCOME STATEMENT
The review sets out the Group’s 30-Jun-19 30-Jun-18 Change
operational performance for the 2019 $’m $’m %
financial year, together with a review of
operations, an update on the operating Revenue from Services 182.7 183.1 -0.2%
environment and outlook for each of Operating Costs (162.6) (162.0) 0.4%
Boom’s key industry sectors. Trading EBITDA 20.1 21.1 -4.7%
The review should be read in conjunction Depreciation and Amortisation (17.3) (18.2) -4.9%
with the financial statements, which are
presented on pages 27 to 84 of this Trading EBIT 2.8 2.9 -3.4%
annual report. Net Borrowing Costs (3.7) (4.0)
Trading Net Loss After Tax (0.9) (1.1)
Non-Trading Income 1.6 0.0
Non-Trading Expenses (2.0) (0.6)
Tim Rogers (Loss)/Profit on Sale of Assets (2.0) 0.1
Chief Financial Officer
Impairments to Property, Plant
and Equipment (2.0) 0.0

Net Loss After Tax (5.3) (1.5)

Statutory EBIT (1.6) 2.4

Statutory EBITDA 15.7 20.6

FINANCIAL PERFORMANCE
Revenue
Reported revenue of $182.7 million was in line with the prior year, with Boom
delivering revenue growth in the wind, energy and utilities, industrial maintenance
and telecommunications sectors, and only a slight decrease in revenue from the
infrastructure and construction sector, however this growth was largely offset by the
adverse impact of the industrial action in the mining and resources sector.

Earnings
Statutory earnings before interest expense, tax, depreciation and amortisation (EBITDA)
was $15.7 million (FY18: $20.6 million) whilst statutory earnings before interest expense
and tax (EBIT) was a loss of $1.6 million (FY18: profit of $2.4 million).

In terms of trading EBIT, the Group reported $2.8 million in trading EBIT for FY19, only
marginally down on the FY18 result of $2.9 million.

12 BOOM LOGISTICS ANNUAL REPORT 2019

 CONTINUE TO
BUILD OUR LEADING
REPUTATION IN
THE MARKET AS A
TRUSTED LIFTING,
CONSTRUCTION
AND MAINTENANCE
SOLUTIONS PARTNER

BOOM LOGISTICS ANNUAL REPORT 2019 13

 OPERATING AND FINANCIAL REVIEW
COMPANY PERFORMANCE CONT.
Trading EBIT is before recognising the higher labour cost was not The travel towers business is now
the following non-trading income and sustainable for the business. well placed to meet the demands of
expenses: • The impact of the strike continued its customers. FY20 is expected to
• Non-trading income of $1.6 million in the Hunter Valley through the deliver improved profitability in the
relating to the re-imbursement of third quarter with customers telecommunications sector, as the 5G
legal costs incurred in relation to the moving to dual suppliers. Whilst the network roll out program continues, and
18m Glove and Barrier legal claim. fourth quarter showed improved with growth in other key customers in the
The Group was awarded $2.7 million performance, one major customer power and utilities sector.
in FY17 in settlement of the claim has not resumed service which will
with the related legal expenses being have an on-going impact. Cash Flow
awarded by the court in FY19. • The impact of the industrial action to
Cash flow strengthened during the year
• Non-trading expenses of $2.0 million the Hunter Valley business for the full
delivering $13.2 million of operating cash
relating to: year was a circa $10 million decline in
flow, up $1.8 million on the prior year.
– $0.7m of redundancy costs revenue and $4.5 million loss in EBIT.
incurred in NSW as a result of Cash flow from investing activities was
the required restructuring of the Project Delays positively impacted by the sale of travel
business post-industrial action in towers during the second half of the
the second quarter of the year; During FY19 the Group commenced
two wind farm construction projects. year as well as the sale of a number of
– $0.4m of redundancy and other older, mostly small capacity crane assets.
costs incurred in the restructure Both projects experienced delays to their
expected start dates due to a number The asset sales realised $6.3 million of
of the travel tower business
of site access and weather delays. proceeds, with a further $1.2 million of
to improve profitability of the
Therefore, the FY19 projects did not proceeds to be received post year end.
business by reducing depot
overheads and operating fleet deliver to expectations, with a greater
than anticipated portion of the project Capital expenditure during the year
costs; included investment in smaller capacity
– $0.2m of legal costs incurred activity to be completed in FY20.
mobile crane assets to service contracts,
in the now closed 18m Glove transport assets to support the
and Barrier matter with a total Travel Towers Business mobilisation of assets brought in under
of $1.6m of fees expended over Restructure the Group’s flexible asset rental model,
the course of the case being The travel towers business has and on-going expenditure on routine ten-
reimbursed; and undergone significant change and year inspections.
– $0.7m of remuneration payable improvement during the FY19 year. The
in relation the retirement of the travel towers business was restructured The resulting free cash flow of $8.8
former Managing Director. at the beginning of FY19. Its management million (FY18: $8.4 million) generated
• Loss on sale of assets of $2.0 million is now able to focus on travel tower during the year enabled the Company to
from the sale of 55 underperforming, customers and growing in the markets fund the share buy-back program which
obsolete smaller travel tower assets. that the travel towers business currently commenced during the year.
Assets were sold in the second half of services.
the year at auction values which will Capital Management
enable the business to operate from A strategic review was successfully
smaller depot locations with reduced During the year the Group commenced
completed during the second half of
ongoing maintenance commitments capital management initiatives
the year and the business underwent a
and lower operating costs going demonstrating the Company’s
comprehensive restructure, positioning
forward. commitment to disciplined capital
it for improved profitability in FY20. In
• Impairment to damaged crane of $1.0 allocation with a focus on driving
particular, the travel tower operating fleet
million as a result of damage incurred shareholder returns.
was rationalised and depot overheads
to the boom of a 500t crane in the reduced through: During FY19 the Company bought back a
first half of the year. The crane has • Closure of the Tasmanian depot with total of 35.7 million shares or 7.5% of the
been repaired and returned to the Tasmanian based operations now
fleet at the start of FY20. share capital:
managed through the Melbourne • 1.1 million shares were acquired
• Impairment of $1.0 million to the depot;
owned depot property in Newman. through a minimum holding buy-back
• Reduction of depot costs by moving program; and
to a smaller depot site in Adelaide and • 34.6 million shares were acquired
FY19 REVIEW OF OPERATIONS co-locating its depot with the crane through an on-market buy-back
business in Perth; program.
Boom’s FY19 results were impacted by • Rationalisation of non-customer
the following significant events: facing roles with greater use of shared The $6.0 million cost of the share buy
services across the business to drive backs completed in the year was funded
Impact of industrial action efficiencies; from free cash flow. A further 11.4 million
• Industrial action in NSW in the second • Reduction of maintenance and other shares are available to buy back under the
quarter of FY19 impacted revenues operating costs resulting from a current on market buy-back program.
and profitability. smaller fleet; and
• The Newcastle crane business • Greater use of outsourced services to
was closed with jobs lost because complete routine maintenance.

14 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM’S SERVICE DELIVERY
MODEL INCLUDES OPERATORS
CRANES, TRAVEL TOWERS,
SPECIALISED LABOUR,
AND OTHER ASSETS TO
MEET COMPLEX CUSTOMER
REQUIREMENTS
BOOM LOGISTICS ANNUAL REPORT 2019 15
 OPERATING AND FINANCIAL REVIEW
COMPANY PERFORMANCE CONT.
Balance Sheet Hunter Valley region to the Cattle Hill Outlook
The balance sheet further strengthened wind farm and the growing Queensland The wind farm market remains strong
during the year with net current assets region to improve asset utilisation and and will continue to grow in FY20. Boom
increasing to $15.2 million (FY18: $14.1 profitability. maintains a strong pipeline of wind farm
million) and net debt reducing to $36.6 construction projects for FY20 and is
Demand from resources customers in
million (FY18: $37.3 million). targeting to win an additional wind farm
Queensland was robust during the period
and delivered significant growth to the project in the second half of the year. Boom
Return on Capital Employed (trading is expanding its service capacity in wind
EBIT/ Capital Employed) at 1.5% (FY18: Group.
farm maintenance with a further rented 750
1.6%) was marginally down on the prior tonne mobile crane asset to service new
In Western Australia and South Australia
year. The Group will continue to focus on
shutdown and general maintenance and current customers in South Australia
improving returns on capital employed
activity was steady throughout the year and Victoria. The travel towers business is
through FY20 and will continue to strictly
underpinned by long-standing customers working on opportunities to leverage our
manage capital.
engaging Boom at BHP Olympic Dam, relationships to win projects which connect
The Group’s model to rent larger assets Alcoa and Newmont Boddington wind farms to electrical sub-stations.
allows the business to bring in new crane Gold sites.
assets to match revenue opportunities Infrastructure and Construction
The Group is pleased to report that it
as they arise. The asset rental model Revenue in this sector was slightly down
renewed key maintenance contracts with
minimises the requirement for capital $0.4 million on FY18. Boom derives its
BMA, Yancoal, Newmont Boddington
expenditure, protects free cash flow revenue in this sector from higher value
Gold and Alcoa in the period.
and allows the Group to maintain a niche projects such as bridge builds and
conservatively geared balance sheet rail works.
whilst maintaining the capability to tender Outlook
for new profitable work. The Group expects resources revenue
to remain solid in FY20 and is pursuing Outlook
further growth in the following regions: Boom expects this sector to remain
Debt Management and strong in FY20, buoyed by major
• Hunter Valley: targeting new
Financing customers in the region who may infrastructure projects, and is targeting
During the year the Group extended be seeking a second supplier or are the Melbourne market as a new, growth
its finance facilities with its lenders on seeking to change their incumbent opportunity for FY20.
improved terms. The new facilities provide supplier as these suppliers are
additional flexibility with an extended term, required to renegotiate their labour Industrial Maintenance
increased debt capacity to support growth agreements over the coming months; This sector delivered slight growth in
and reduced funding costs. • Central Queensland: targeting revenue of $1.6 million for FY19. The
new customers and mine sites Group completed a large shutdown
The new finance package comprises: in the Moranbah region to further project in the Latrobe Valley in the
• $20 million, three-year syndicated strengthen and expand the Group’s first half of the year. This project offset
loan facility expiring January 2022; footprint in the region; and the foregone on-going revenue from
• $20 million, three-year trade • North West: the new mine a customer of the Newcastle crane
receivables facility expiring January construction projects in the North business, which closed during the year.
2022; and West are providing an opportunity
• $35 million asset finance facility, to re-enter the North West market
including new finance and operating Outlook
during FY20.
lease facilities with the previous The Group is contracted to supply
amortising loan facility rolled over on specialist labour to the oil and gas platforms
new terms. This facility amortises to Wind, Energy and Utilities on Bass Strait. Boom’s specialised
a $5 million residual balance at Boom successfully grew revenue by $8.3 labour hire business, readi, supplies the
August 2021. million in FY19 in this sector with key labour to Boom to fulfil the contract. This
highlights as follows: arrangement has been successful over
Operating Environment • Boom is currently carrying out the last two years and the Group is now
contracts for construction of two focussed on expanding this service offering
The operating environment remained to other customers in the industry.
wind farms that will continue through
strong in each of the Group’s key industry
the first half of FY20.
sectors.
• The Group successfully performed Telecommunications
maintenance work at ten windfarms Revenue derived from this sector
Mining and Resources during FY19; increased by $3.1 million in FY19. The
Revenue was down $12.7 million on • Continued involvement in turbine telecommunications market is mainly
FY18 in this sector due mainly to the maintenance on four of Australia’s serviced by the Group’s travel tower
impact of the NSW industrial action in largest gas turbine power stations; business.
the current year and the non-repeat of • Completion of several projects to
a major shut-down at Olympic Dam in string high voltage cables from wind
the prior year that contributed circa $10 Outlook
farm towers to electrical substations; The Group has contracts with the big
million revenue in FY18.
and ‘tier two’ contractors and expects the
In light of the changes to the market and • Supply of cranes and travel towers for telecommunications market to continue
customer practices in NSW, the Group routine maintenance works to utilities growing as the 5G roll-out program
relocated a number of assets from the businesses. accelerates in FY20.

16 BOOM LOGISTICS ANNUAL REPORT 2019

DEMAND FROM
OUR RESOURCE
AND RENEWABLE
CUSTOMERS IS
EXPECTED TO
REMAIN STRONG

BOOM LOGISTICS ANNUAL REPORT 2019 17

 OUR PEOPLE & SYSTEMS

A vital component of how we drive By improving flexible working Boom will continue to support
responsible growth is ensuring that arrangements and building the readi communities and its customers in
Boom is a great and safe place to work. business, Boom is able to deliver on developing Indigenous Programs in
We deliver on this commitment by customer expectations to provide skilled remote locations of Australia. Boom’s
recognising and rewarding performance, and qualified people to perform work National Indigenous Employment
ensuring an inclusive and safe workplace, safely and professionally as required by Framework provides a basis for localised
creating opportunities for our employees the customer. strategies to generate work opportunities
to develop and support our employees and support indigenous communities.
so they continue to thrive. Our workforce is well trained and on-

We recognise that our people are critical

boarded to ensure all employees work
in a safe, professional manner to the
TRAINING & DEVELOPMENT
to our success. We don’t believe in taking standards and expectations of Boom and Throughout the year, Boom engaged
short-cuts or putting business before our its customers. an external training provider to deliver
people’s safety. a Certificate IV in Leadership and
Boom’s managers work closely with Management to 90 employees across the
HIGHLIGHTS our employees to regularly identify
areas where workplace efficiencies and
business. The program provides practical
skills to develop strong and impactful
• Boom continues to invest in our improvements can be made. leaders.
business leaders to ensure they
effectively manage their people to In the coming financial year, the business The e-Learning Centre continues to
realise the Company’s full potential. will continue to invest in its people to support our people and improvement
• Boom continues to invest in training deliver efficiencies and develop leadership of capability within the Company.
and development for its operational across the business. This will be achieved Boom’s on-line induction, Life Saving
staff to ensure operating tickets are through formal internal and external Rules and compliance training through
maintained, safety standards are training and development initiatives. the e-Learning Centre provide a
upheld, customer site inductions comprehensive platform for on-boarding.
are current, and verification of INDIGENOUS PROGRAM Together with the New Employee Survey
competency is undertaken to meet conducted within the first three months of
the needs of our customers. We recognise the traditional rights of employment, Boom ensures employees
• Boom is continually focussing on Indigenous peoples and acknowledge are given every opportunity to succeed
sustainable labour models that their right to maintain their cultures, and provide candid feedback to enhance
increase workplace flexibilities and identities, traditions and customs. their journey.
efficiencies resulting in a positive
impact on profitability and the security
of employment.

BOOM CONTINUES
• readi is developing robust systems to
support the recruitment, on-boarding
and management of our people
engaged in our specialised labour TO INVEST IN OUR
supply business.
• Boom received over 70 customer PEOPLE TO DELIVER
commendations for the quality of our
people and our work.
EFFICIENCIES AND
DEVELOP LEADERSHIP
OVERVIEW
Boom’s workforce includes over 400
ACROSS THE BUSINESS
permanent employees across a range
of disciplines as at 30 June 2019.
The majority of Boom’s permanent
workforce directly interfaces with,
or provides a service to, customers
including: operators, supervisors, safety
professionals, engineers and sales
employees. The remaining permanent
workforce comprises management and
functional support.

At 30 June 2019, the total combined

number of Boom employees was
1187. Boom had over 760 casual and
fixed-term employees. The majority of
these employees are engaged through
readi, Boom’s specialised labour supply
business.
18 BOOM LOGISTICS ANNUAL REPORT 2019
BOOM LOGISTICS ANNUAL REPORT 2019 19
 CELEBRATING STRONG LOCAL
RELATIONSHIPS: NEW CRANE NAMED
AFTER THE GHUNGALOU NATION

20 BOOM LOGISTICS ANNUAL REPORT 2019

GHUNGALOU NATION PEOPLE
Boom is proud to count two Ghungalou
men on the local Blackwater team.

The team were delighted to host a

traditional welcome and smoking
ceremony for the naming of the newest
crane to arrive in their fleet. The crane
is a 300-tonne capacity all-terrain crane
and is the biggest crane based in Central
Queensland and is ready to undertake
the very biggest of lifting tasks.

The idea to name the crane was hatched

through discussions with the local
indigenous population to name it after
the Ghungalou Nation. Boom worked
closely with the Ghungalou Aboriginal
Corporation and was granted permission
to name and decorate the crane with
some very special artwork, the totem of
a rock wallaby that represents the men of
the tribe who traditionally travel to work.

The Ghungalou people own the area

bound by the Dawson Rover in the
East, the Comet River in the West, the
Mackenzie River in the North and Bigge
Range to the South. This is the land and
its traditional owners who Boom want
to honour and pay tribute through the
naming of the crane.

This event was an important symbol

that affirms our commitment to the
Ghungalou Nation people, who are the
traditional owners of the land in which we
are fortunate to work.

BOOM LOGISTICS ANNUAL REPORT 2019 21

 OUR HEALTH, SAFETY, ENVIRONMENT & QUALITY

HIGHLIGHTS SAFETY LEADERSHIP STRUCTURE

• Boom reported a Total Recordable At Boom, we take a four-tiered approach Personal Commitment
Injury Frequency Rate (TRIFR) of 8.6 to safety leadership. All operational managers commit to a
at the end of the financial year. range of consultative and interactive
• The Leadership Program described Health, Safety, Environment & activities which reinforce their personal
in the Training and Development Quality (HSEQ) Committee commitment and Boom’s corporate
section of this report also builds The HSEQ Committee, a sub-committee commitment to Health and Safety. Key
on the principles behind the of the Board, meets quarterly and metrics are measured and recorded in the
Safety Interactions undertaken by considers all aspects of Boom’s corporate HSEQ management database
management in recent years and safety environment. A summary of the and included in the monthly HSEQ
help leaders with their day to day committee’s responsibilities is set out in Report to the Board.
responsibilities and promotes the the Corporate Governance Statement.
value of visible leadership. Measurable activities include:
• Boom maintained AS/NZS • Safe Act Observations and Safety
Safety Leadership Team (SLT) Interactions which are an informal risk
4801:2001, OHSAS 18001:2007 and
AS/NZS ISO 9001:2015 Certifications. The Safety Leadership Team is chaired by management and assurance activity
Boom is actively pursuing transition Boom’s CEO and Managing Director and which generates positive safety-
to the new international Safety includes the General Manager HSEQ, related discussions with employees in
Standard ISO 45001. Compliance General Managers from each business the field;
with environmental management unit and the HSEQ leadership team. • HSEQ Internal Audits. These audits
obligations has also continued. The SLT prioritises and monitors include consultation and discussion
our safety environment and safety with employees; and
improvement activities. The SLT is • Involvement in consultative meetings
supported by our team of safety (such as Safety Committees),
professionals that operate nationally. delivering toolbox talks, delivering pre-
start meetings.

Training
Boom’s operational training program
contains a significant safety leadership
element for frontline supervisory
personnel and management that works
to embed good workplace safety as
an operational discipline. The training
CULTURAL ALIGNMENT emphasizes the importance of sustained
and visible leadership through employee
WITH OUR CUSTOMER engagement and safety interactions.

BASE, WITH AN
UNCOMPROMISING
SAFETY FOCUS

22 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS ANNUAL REPORT 2019 23
 OUR HEALTH, SAFETY, ENVIRONMENT & QUALITY CONT.

OUR SAFETY GOALS SAFETY ENVIRONMENT

Boom’s Health, Safety, Environment & Boom’s safety performance continues to Boom continues to meet its community
Quality (HSEQ) goals underpin our be a key operational focus with emphasis expectations and legal obligations in
vision to: on risk management, leadership and relation to environmental management.
• Exceed client and other stakeholders’ assurance. Our goal is to ensure our Boom complies with the National
HSEQ expectations by consistently employees and customers are free from Greenhouse and Energy Reporting
providing benchmarked high quality harm when we deliver lifting solutions, Act 2007.
and incident free services; with scale and precision, in a complex
– Boom’s internal audit processes and diverse operating environment. • Boom Environmental procedures
ensure a robust examination are mostly directed at waste
of performance and practice. Ensuring the safety and wellbeing of management. Disposal of waste oil,
Internal audits by a range of our people is an operational discipline batteries and tyres is by licensed
operational managers support that differentiates Boom from our disposal agents.
a sharing of insights across the competitors. It is a key component of • Boom has procedures and
business. Audits are monitored our value proposition and strengthens equipment to manage runoff and
and reported; our relationships with our customers and spills. Onsite work is conducted in
– Safety incidents are investigated employees alike. accordance with client procedures
by an operational manager. and regulations.
Actions arising from each Boom’s ongoing emphasis on safety • Energy usage minimisation initiatives
investigation are logged in the leadership, best practice safety systems are in place.
corporate incident management and our “Safety Always” culture builds • The current 3-year HSEQ Strategic
system and tracked to completion. confidence and trust with our customers Plan includes a review to ensure
Investigation outcomes are and employees around the predictable, Boom meets the expectations of
monitored, reported and reliable and consistent delivery of high ISO14001, but there is currently no
communicated widely; value lifting solutions. plan to be certified to this standard.
• Establish a positive and proactive
Boom’s three-year HSEQ Strategic Plan
safety culture with well-trained and
(2018–2020) was refreshed in FY19. QUALITY
competent people who demonstrate
The focus of the refreshed strategic plan The Company has continued Certification
Boom’s values and exceptional safety
is leadership, assurance and employee to AS/NZS ISO 9001:2015.
leadership;
wellbeing. The “One Boom” HSEQ
– The Leadership Program teaches
Management System continues to be
skills to foster a positive safety
developed and enhanced.
culture. Improvements are
measured with leading indicators; HSEQ Strategic Plan actions include:
– All personnel have induction • System improvements in the areas
and training programs to ensure of lifting operations, verification of
they build and maintain skills competency, training, assurance,
and compliance obligations. inductions and transport activities;
Compliance is measured and • A cultural improvement and
reported; and leadership program consistent
• Continue to develop and use excellent with the Boom belief that excellent
HSEQ processes and systems. leadership improves all aspects
of our business including HSEQ
performance;
• A wellbeing program aimed at
improving and maintaining the health
of employees during their career in
the industry;
• Review of the Boom approach to
sustainability and community;
• Review of the existing maintenance
system documentation; and
• Improved use of the hazard module
in the myosh incident management
software.

Certification to AS/NZS 4801:2001

and OHSAS 18001: 2007 have been
maintained.

24 BOOM LOGISTICS ANNUAL REPORT 2019

CORPORATE GOVERNANCE

OUR BOARD OF DIRECTORS

Maxwell John Findlay Tony Spassopoulos Melanie Jayne Allibon

(72) (54) (54)
BEcon, FAICD BBus (Management), MAICD
Independent, Non- MBA Independent, Non-
Executive Chairman Managing Director Executive Director
APPOINTED APPOINTED 20 APPOINTED
18 JULY 2016 SEPTEMBER 2018 19 JUNE 2019

Jean-Pierre Johannes Terrence Charles Terence Alexander

Andreas Maria Francis (73) Hebiton (68)
Buijtels (36) DBus (hon. causa), BE Independent, Non-
MSc (International (Civil), MBA, FIE Aust, Executive Director
Business) FAICD, FFin APPOINTED 22
Non-Independent, Independent, Non- DECEMBER 2000
Non-Executive Director Executive Director
APPOINTED 2 JUNE APPOINTED 13
2017 JANUARY 2005

BOOM LOGISTICS ANNUAL REPORT 2019 25

 CORPORATE GOVERNANCE CONT.

OUR EXECUTIVE TEAM

Tony Spassopoulos Tim Rogers Malcolm Ross

Managing Director & Chief Financial Officer General Counsel and
Chief Executive Officer Company Secretary

26 BOOM LOGISTICS ANNUAL REPORT 2019

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED
30 JUNE 2019

TABLE OF CONTENTS
Description Page
Directors’ Report 28
Remuneration Report 31
Lead Auditor’s Independence Declaration 45
Consolidated Statement of Comprehensive Income 46
Consolidated Statement of Financial Position 47
Consolidated Statement of Cash Flows 48
Consolidated Statement of Changes in Equity 49
About This Report 50

Section A: Financial Performance 51

1 Segment Reporting 51
2 Revenue from Contracts with Customers 53
3 Other Income and Expenses 54
4 Income Tax 55
5 Earnings Per Share 57
6 Dividends 57

Section B: Operating Assets and Liabilities 58

7 Property, Plant and Equipment 58
8 Impairment Testing of Assets 60
9 Reconciliation of the Net Cash Flows from Operations with Net Loss After Tax 61
10 Commitments 61

Section C: Funding Structures 63

11 Net Debt 63
12 Financial Risk Management 65
13 Contributed Equity 69

Section D: Other Disclosures 70

14 Subsidiaries 70
15 Deed of Cross Guarantee 71
16 Parent Entity 73
17 Key Management Personnel 73
18 Share-based Payments 74
19 Contingencies 76
20 Auditor’s Remuneration 76
21 Subsequent Events 77
22 New Accounting Policies and Standards 77

Directors’ Declaration 80
Independent Auditor’s Report to Members of Boom Logistics Limited 81
ASX Additional Information 85

BOOM LOGISTICS ANNUAL REPORT 2019 27

 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

DIRECTORS’ REPORT

Your Directors present their report on the consolidated entity (referred to hereafter as “the Group”) consisting of Boom Logistics Limited
(“Boom Logistics” or “the Company”) and the entities it controlled for the financial year ended 30 June 2019.

DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:

Maxwell John Findlay BEcon, FAICD (Independent, Non-executive Chairman) (appointed 18 July 2016)
Mr. Findlay was Managing Director and Chief Executive of industrial services company Programmed Group from 1990 until his
retirement from executive life in 2008. Since retiring as an executive, Mr. Findlay has engaged in various non-executive roles in industrial
services, engineering and government. He is currently Chairman of the Snowy Mountains Engineering Corporation and was previously
Director of EVZ Limited and The Royal Children’s Hospital. During the past three years, Mr. Findlay has held ASX listed public company
Directorships with EVZ Limited (2008 to 2017) and Skilled Group Ltd (2010 to 2015). Mr. Findlay is Chairman of the Boom Logistics
Risk Committee and Nomination & Remuneration Committee.

Tony Spassopoulos BBus (Management), MBA (Managing Director) (appointed 20 September 2018)
Mr. Spassopoulos has over 30 years experience in the equipment hire, industrial services, and the pallet/container pooling industries.
Prior to joining the Company, Mr. Spassopoulos was Director/General Manager of CHEP Asia Pacific – Reusable Plastics Containers
business and held other senior management positions during his 19 years in the Brambles Group. He joined the Company in 2008
and served as Director of Sales and Marketing and more recently Chief Operating Officer prior to his appointment as Managing
Director. During the past three years, Mr. Spassopoulos has not held any other ASX listed public company Directorships.

Melanie Jayne Allibon MAICD (Independent, Non-executive Director) (appointed 19 June 2019)
Ms. Allibon has an extensive background in human resources and operating risk, primarily in the manufacturing, FMCG, mining
and industrial services sectors. She has held senior executive positions with Newcrest Mining, Seven Group Holdings, Pacific
Brands, Amcor, Fosters Group and BHP. Ms. Allibon has held non-executive director positions with the Australian Mines and Metals
Association, Melbourne Water Corporation and Ardoch Youth Foundation Ltd. She is currently a member of World Vision’s Business
Advisory Council, Chief Executive Women and the International Women’s Forum. During the past three years, Ms. Allibon has not held
any other ASX listed public company Directorships.

Jean-Pierre Buijtels MSc (International Business) (Non-independent, Non-executive Director) (appointed 2 June 2017)
Mr. Buijtels is the portfolio manager of Gran Fondo Capital, a Dutch mutual fund. Since 2007 he has been investing in private equity and
public equity at 3i, Gimv and Strikwerda Investments. He has been involved at board level at several companies, currently as observer at
Constellation Software Netherlands Holding Coöperatief U.A (a subsidiary of Constellation Software Inc. and the indirect owner of Total
Specific Solutions). Since the date of appointment, Mr. Buijtels has not held any other ASX listed public company Directorships.

Terrence Charles Francis DBus (hon. causa), BE (Civil), MBA, FIE Aust, FAICD, FFin (Independent, Non-executive Director)
(appointed 13 January 2005)
Mr. Francis is currently a Non-executive Director of the Infrastructure Specialist Asset Management Limited (appointed 29 September
2006). He has over 20 years experience on government and private sector boards and he advises business and government on
infrastructure development. Previously Mr. Francis was Vice President of Continental Illinois Bank, Executive Director of Deutsche Bank
Australia, and Chief Executive Officer of Bank of America in Australia. During the past three years, Mr. Francis has not held any other
ASX listed public company Directorships. Mr. Francis is Chairman of the Boom Logistics Audit Committee.

Terence Alexander Hebiton (Independent, Non-executive Director) (appointed 22 December 2000)

Mr. Hebiton commenced his commercial career in the rural sector. In 1989, he acquired various business interests associated with
land and property rental developments. He is currently a Director of a number of private companies. He was a principal of Alpha Crane
Hire, one of the founding entities of Boom Logistics. Mr. Hebiton was the CEO of Boom Logistics at its formation and ceased being an
Executive Director in 2004. During the past three years, Mr. Hebiton has not held any other ASX listed public company Directorships.
Mr. Hebiton is Chairman of the Health, Safety, Environment & Quality Committee.

Brenden Clive Mitchell BSc (Chem), BBus (Multidiscipline) (Managing Director) (appointed 1 May 2008) (retired 20 September 2018)
Mr. Mitchell worked for over ten years leading multifaceted and multi-location businesses for Brambles in Australia and the UK. He has
previous experience in the fast moving consumer goods sector and upon moving to Brambles, Mr. Mitchell held senior positions in the
equipment hire and the high compliance waste industry. Mr. Mitchell’s last position for Brambles was leading the capital and people
intensive municipal business in the UK with revenue of $550 million and 6,000 employees. During the past three years, Mr. Mitchell has
not held any other ASX listed public company Directorships.

COMPANY SECRETARY
Malcolm Peter Ross BBus, LLB, LLM, GradDipACG, FGIA (appointed Company Secretary 22 September 2014)
Mr Ross joined the Company on 7 November 2011 as General Counsel and in addition to those responsibilities was appointed
Company Secretary on 22 September 2014. Following admission as a solicitor in Victoria in 1997, he worked with Harwood Andrews
and then Hall & Wilcox Lawyers. In 2002, he joined InterContinental Hotels Group Plc (FTSE-listed) based in Singapore where his final
position was Vice-President and Associate General Counsel with responsibility for leading the legal function across Asia Australasia.

28 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

DIRECTORS’ REPORT (continued)

DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

As at the date of this report, the interests of the Directors in the shares, rights and options of Boom Logistics Limited were:

Name Shares Rights Options

M.J. Findlay 250,000 - -
T. Spassopoulos 1,500,000 743,220 6,818,131
M.J. Allibon - - -
J-P. Buijtels a - - -
T.C. Francis 185,745 - -
T.A. Hebiton 547,995 - -
a Mr. Buijtels is employed by Rorema Beheer B.V., the fund manager (the Fund Manager) of the fund Gran Fondo Capital (the
Fund) which holds 35,380,332 shares in Boom Logistics Limited (the Company). Mr. Buijtels’ remuneration is partly linked to the
performance of the Fund, which is influenced by the performance of the shares of the Company as long as the Fund holds shares
in the Company. Mr. Buijtels holds a minority economic interest of less than 5% of the units of the Fund and thereby indirectly an
economic interest in the Company as long as the Fund holds shares in the Company. The Fund is open-ended and Mr. Buijtels
can redeem his units in the Fund against their net asset value minus redemption fee at each transaction day of the Fund. Mr.
Buijtels is not a director of the Fund Manager, and does not have the power to exercise votes, control the exercise of votes,
dispose of or control the disposal of the Fund’s shares in the Company. However, he can influence the decision-making process of
the director of the Fund Manager in his capacity as its portfolio manager.

DIRECTORS MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings
attended by each Director was as follows:
Nomination and Health, Safety,
Name of Remuneration Environment &
director Board of Directors Audit Committee Committee Quality Committee Risk Committee
Held Attended Held Attended Held Attended Held Attended Held Attended
M.J. Findlay 13 13 5 5 1 1 4 4 3 3
T. Spassopoulos a 11 11 - - 1 1 3 3 2 2
M.J. Allibon a 1 1 - - - - - - - -
J-P. Buijtels 13 13 - - 1 1 4 3 3 3
T.C. Francis 13 13 5 5 1 1 4 4 3 3
T.A. Hebiton 13 13 5 5 1 1 4 4 3 3
B.C. Mitchell b 2 2 - - - - 1 1 1 1
a Attendance from date of appointment
b Attendance prior to retirement

CORPORATE STRUCTURE
Boom Logistics is a company limited by shares that is incorporated and domiciled in Australia. Boom Logistics Limited has prepared
a consolidated financial report incorporating the entities that it controlled during the financial year, which are listed in note 14 to the
financial statements.

INDEMNIFICATION AND INSURANCE

The Company has entered into Deeds of Access, Indemnity and Insurance with each of the Directors and the Company Secretary, under
which the Company indemnifies, to the extent not precluded by law from doing so, those persons against any liability they incur in or arising
out of discharging their duties. No indemnity has been granted to an auditor of the Group in their capacity as auditor.

During the financial year, the Company has paid an insurance premium for the benefit of the Directors and officers of the Company
in accordance with common commercial practice. The insurance policy prohibits disclosure of the liability insured and the amount of
the premium.

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

During the year, the principal activity of the Group was the provision of lifting solutions and specialised labour services.

BOOM LOGISTICS ANNUAL REPORT 2019 29

 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

DIRECTORS’ REPORT (continued)

OPERATING AND FINANCIAL REVIEW

A review of Group operations and results for the financial year ended 30 June 2019 is set out in the operating and financial review
section of the Annual Report and in the accompanying financial statements.

CORPORATE GOVERNANCE
The Group recognises the need for the highest standards of corporate behaviour and accountability. The Directors of Boom Logistics
have accordingly followed the recommendations set by the ASX Corporate Governance Council. For further information on corporate
governance policies adopted by Boom Logistics Limited, refer to our website: www.boomlogistics.com.au/about-us/corporate-
governance and annual reports.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There have been no significant changes in the state of affairs other than that reported in the Operating and Financial Review section
disclosed above.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

The Directors are not aware of any other matter or circumstance that has arisen since 30 June 2019 that has significantly affected or
may significantly affect the operations of the Group in subsequent financial years, the results of those operations or the state of affairs
of the Group in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The Directors expect performance to improve as a result of building new revenue and expanding services in key geographies and
markets and further capitalising on the operational leverage that persists within Boom’s cost structure leading to improving margins.

The Directors are cognisant of the requirement to continuously disclose material matters to the market. At this time, other than
the matters addressed in this financial report there are no matters sufficiently advanced or at a level of certainty that would require
disclosure.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Board confirms that the Group has adequate systems and processes in place to manage and comply with environmental
regulations as they apply to the Group. This includes the National Greenhouse and Energy Reporting Act 2007 which requires the
Group to report energy consumption and greenhouse gas emissions for the 12 months ended 30 June 2019 and future periods.
There have been no significant known breaches of any environmental regulations to which the Group is subject.

30 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED

The Directors of Boom Logistics Limited present the Remuneration Report for the Company and the Group for financial year ended
30 June 2019 (“FY19”). This report outlines the remuneration arrangements in place for non-executive directors (“NEDs”) and the
Managing Director and Senior Executives (“Executive KMP”).

Key management personnel (“KMP”) are those persons who, directly or indirectly, have authority and responsibility for planning,
directing and controlling the major activities of the Company and Group.

Principles of Remuneration Practices

The Group’s remuneration practices are designed to maintain alignment with business strategy, shareholder interests and business
performance whilst ensuring remuneration is appropriate. The Executive KMP remuneration framework and KMP remuneration is
reviewed annually by the Board with the assistance of the Nomination & Remuneration Committee.

In conducting the Executive KMP remuneration review, the following principles are applied:
• Monitoring against external competitiveness, as appropriate using independent market survey data comparing the Group’s
remuneration levels against industry peers in terms of comparable job size and responsibility;
• Internal equity, ensuring Executive KMP remuneration across the Group is based upon a clear view of the scope of individual
positions and the respective responsibilities;
• A meaningful “at risk” component with entitlement dependent on achieving Group and individual performance targets set by the
Board of Directors and aligned to the Group’s strategy; and
• Reward for performance represents a balance of annual and longer term targets.

Nomination and Remuneration Committee

The Group is committed to ensuring remuneration is informed by market data and linked to the Group’s strategy and performance. In
doing so, the Board of Directors rely on the advice provided by the Nomination and Remuneration Committee including the review and
making recommendations:
• With regard to remuneration policies applicable to the Directors, Executive KMP and employees generally;
• In relation to the remuneration of Directors and Executive KMP;
• Of general remuneration principles, including incentive schemes, bonuses and share plans that reward individual and team
performance;
• With regard to termination policies and procedures for Directors and Executive KMP;
• In relation to the Group’s superannuation arrangements; and
• To the Board of Directors for the inclusion of the Remuneration Report in the Group’s annual report.

The Nomination and Remuneration Committee comprises a majority of independent directors and is chaired by the Chairman of the
Board of Directors. From time to time, the Nomination and Remuneration Committee also draws upon advice and market survey data
from external consultants in discharging its responsibilities.

Details of Key Management Personnel

The tables below set out the KMP and their movements during FY19.

Key Management Personnel (Executive)

Name Title Period as a KMP

Tony Spassopoulos * Chief Executive Officer & Managing Director All of FY19
Brenden Mitchell Former Chief Executive Officer & Managing Director Retired 20 September 2018
Tim Rogers Chief Financial Officer All of FY19
Malcolm Ross General Counsel & Company Secretary All of FY19
Shane Stafford General Manager – readi Resigned 30 June 2019

* Tony Spassopoulos was appointed Chief Executive Officer & Managing Director on 20 September 2018. Prior to this date, he was
the Chief Operating Officer which was still a KMP role.

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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Key Management Personnel (Non-executive Directors)

Committees
Health, Safety,
Nomination & Environment &
Name Position a Audit Remuneration Quality Risk
Maxwell Findlay Chairman Member Chairman Member Chairman
Melanie Allibon b
Non-executive Director - - - -
Jean-Pierre Buijtels Non-executive Director - Member Member Member
Terrence Francis Non-executive Director Chairman Member Member Member
Terence Hebiton Non-executive Director Member Member Chairman Member

a All non-executive directors are independent, except for Jean-Pierre Buijtels who is not independent.
b Melanie Allibon was appointed on 19 June 2019 and consequently, memberships of Board committees have yet to be determined
at 30 June 2019.

Remuneration Arrangements of Executive Key Management Personnel

In the normal course of business, remuneration comprises fixed remuneration (fixed annual reward) and variable or “at risk”
remuneration incentives. The Group’s revised remuneration structure for the Executive KMP comprises two main components:

Fixed annual reward

This element comprises base salary, any fringe benefits (e.g. motor vehicle allowance) and employer contributed superannuation.
Executive KMP have scope to vary the components that make up their FAR and can tailor their salary package to suit individual
requirements.

a) Salary sacrifice rights plan

Eligible executives will be permitted to salary sacrifice a portion of their pre-tax fixed annual remuneration to acquire equity in the
form of rights to fully paid ordinary shares in the Company.

Each right is a right to acquire one ordinary share in the Company. The exact number of rights to be granted is based on the
amount of salary sacrificed and the 5 day volume weighted average price prior each month. Rights do not carry any dividend or
voting rights. Rights will be granted twice a year following the announcement of the half-year and full-year results or in any event,
within twelve months of the Annual General Meeting (“AGM”). Rights will have a twelve month exercise restriction commencing
from the relevant grant dates. The rights to ordinary shares equivalent to the amount salary sacrificed in the period from the most
recent grant date will be granted following the announcement of the full-year results.

Variable remuneration
The Group has a number of variable remuneration arrangements as follows:

b) Short term incentive plan

Eligible executives will have the opportunity to receive short term incentives subject to meeting performance hurdles over the
financial year. 50% of the STIP outcome achieved for the financial year will be delivered in cash and 50% will be delivered in equity
in the form of rights to ordinary shares in the Company.

Each right is a right to acquire one ordinary share in the Company. The exact number of rights to be granted is based on 50% of
the STIP outcome divided by the 5 day volume weighted average price after the release of full year results. Rights do not carry any
dividend or voting rights. Rights will be granted following the announcement of the full-year results or in any event, within twelve
months of the AGM. Rights will have a six month exercise restriction commencing from the grant date.

The objectives of this plan are to:

• Focus Executive KMP on key annual business goals and reinforce the link between performance and reward;
• Allow scope to recognise exceptional performance through a sliding scale of reward;
• Encourage teamwork as well as individual performance in meeting annual goals; and
• Align reward with the Group’s values.

32 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Remuneration Arrangements of Executive Key Management Personnel (continued)
Variable remuneration (continued)
c) Long term incentive plan
Eligible executives will be granted options to acquire ordinary shares in the Company, subject to performance hurdles and some or
all may vest at the end of the three year period if the performance hurdles are met.

Each option is a right to acquire one ordinary share in the Company (or an equivalent cash amount) subject to payment of the
exercise price. The exact number of options to be granted will be the LTIP award divided by the option valuation using a Binomial
valuation methodology prior to grant date. The option exercise price is calculated based on the 5 day volume weighted average
price prior to the grant date. Options do not carry any dividend or voting rights. Options will be granted within twelve months of the
Annual General Meeting.

Options are subject to a performance hurdle based on absolute Earnings Per Share (“EPS”), which is measured over a three
year performance period. An absolute EPS hurdle must be achieved at the end of year three for any options to vest. The Board
of Directors retains a discretion to adjust the EPS hurdle as required to ensure plan participants are neither advantaged nor
disadvantaged by matters outside management’s control that materially affect absolute EPS (for example, by excluding one-off
non-recurrent items or the impact of significant acquisitions or disposals).

The following table shows the potential annual remuneration packages for Executive KMP during the financial year.

Fixed Variable
Name Title FAR STIP % of FAR LTIP % of FAR
Tony Spassopoulos Chief Executive Officer & Managing Director 600,000 40% 50%
Brenden Mitchell Former Chief Executive Officer & Managing Director 675,000 40% 45%
Tim Rogers Chief Financial Officer 323,269 20% 20%
Malcolm Ross General Counsel & Company Secretary 275,211 20% 20%
Shane Stafford General Manager – readi 257,115 30% 20%

Consequences of Performance on Shareholder Wealth

In considering the Group’s performance and benefits for shareholder wealth, the Nomination and Remuneration Committee have
regard to the following indices in respect of the current and previous financial years.

2019 2018 2017 2016 2015

$’000 $’000 $’000 $’000 $’000
Net loss attributable to members of $(5,330) $(1,547) $(22,630) $(30,219) $(36,874)
Boom Logistics Limited
Dividends paid $- $- $- $- $-
Share price at financial year end $0.15 $0.24 $0.09 $0.08 $0.12
Earnings per share $(0.01) $(0.00) $(0.05) $(0.06) $(0.08)
Return on capital employed (Trading EBIT/Capital Employed) 1.5% 1.6% (3.7%) (3.4%) (2.0%)

BOOM LOGISTICS ANNUAL REPORT 2019 33

 BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Remuneration Review
The review of KMP and general staff remuneration is conducted annually through a formal process.

KMP remuneration is reviewed by the Nomination and Remuneration Committee of the Board of Directors with input from the
Chief Executive Officer (“CEO”) in respect of KMP reporting directly to him. Market survey data provided combined with individual
performance appraisals to determine recommendations go to the Board of Directors for approval. This process occurs in June of each
year and remuneration adjustments take effect from the beginning of each financial year.

The Nomination and Remuneration Committee has direct responsibility for reviewing CEO performance against targets set by the
Board of Directors and recommending to the Board of Directors appropriate adjustments to his remuneration package.

Staff reviews are similarly conducted by the relevant Executives and General Managers, with overview from the CEO.

CEO & Managing Director Remuneration

Mr. Spassopoulos has an employment contract that has no fixed term. Both the Company and Mr. Spassopoulos are entitled to
terminate the employment contract on six month’s written notice, except in the case of serious misconduct or neglect of duty.
Contractual arrangements relating to a redundancy event are set out below.

Mr. Spassopoulos’ remuneration package as at 30 June 2019 comprised the following components:
• FAR of $600,000 per annum, inclusive of allowances and superannuation contributions in line with the Superannuation Guarantee
legislation. Mr. Spassopoulos’ FAR is reviewed annually effective 1 July each year taking into account the Group’s performance,
industry and economic conditions and personal performance.
– Mr. Spassopoulos has elected to salary sacrifice 20% of his FAR for rights to ordinary shares in the Company equating to an
annual value of $120,000;
• STIP equivalent to 40% of his FAR upon achievement of performance conditions set by the Board of Directors on an annual basis.
50% of the STIP outcome achieved for the financial year will be delivered in cash and 50% will be delivered in equity in the form of
rights to ordinary shares in the Company. The cash payment of any bonus under the STIP will take place after the annual audit of
the Group’s financial report which typically occurs in the first half of the following financial year. No STIP is awarded if performance
conditions are not met; and
• LTIP equivalent to 50% of his FAR is allocated in options of the Company with a performance hurdle based on absolute EPS over
a three year performance period subject to shareholder approval at the Company’s Annual General Meeting.

If his employment is terminated on the grounds of redundancy or where a diminution in responsibility occurs, Mr. Spassopoulos will be
entitled to receive:
• The lesser of the maximum amount permitted by the Corporations Act and 12 months pay calculated in accordance with his FAR
at the date of redundancy or diminution;
• Vested employee entitlements;
• STIP rights that have vested and if not exercised the exercise restrictions will be lifted. Where employment ceased prior to the STIP
outcome being determined, the Board of Directors may at its discretion determine a pro-rated STIP based on the proportion of the
performance period that has elapsed at the time of cessation. To the extent the relevant performance conditions are satisfied, the
STIP award will be paid in cash and no rights will be allocated;
• LTIP options that have vested. Where employment ceased before the options vest, unvested options will continue “on-foot”
and will be tested following the end of the original vesting date, and vesting to the extent that the relevant conditions have been
satisfied (ignoring any service related conditions);
• In the event a termination payment is made, no payment in lieu of notice will be made.

The Board of Directors also have a broader discretion to apply any other treatment that it deems appropriate in the circumstances.

In the event that Mr. Spassopoulos was to be summarily dismissed, he would be paid for the period served prior to dismissal and any
accrued leave entitlements. Mr. Spassopoulos would not be entitled to the payment of any bonus under the STIP or LTIP.

Mr. Spassopoulos is subject to restrictive covenants upon cessation of his employment for a maximum period of one year.

34 BOOM LOGISTICS ANNUAL REPORT 2019

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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Former CEO & Managing Director Remuneration on Retirement
Upon his retirement, Mr. Mitchell received all accrued entitlements in accordance with his contract including a retirement termination
payment of $675,000 which is based on his annual base pay. All entitlements provided to Mr. Mitchell under his retirement
arrangements are within the termination benefits limits prescribed by the Corporations Act 2001.

Mr. Mitchell will not be entitled to receive a short-term or long-term incentive in relation to the 2019 financial year. Mr. Mitchell’s long-
term incentives in relation to the 2017 financial year and 2018 financial year (tranche 1 and 2 only) will continue on foot and will vest to
the extent that the applicable conditions have been achieved at the end of the applicable vesting period.

Other Executive KMP (standard contracts)

All other Executive KMP have contracts with no fixed term. Either the Company or the Executive KMP may terminate the Executive
KMP employment agreement by providing three months written notice or providing payment in lieu of the notice period (based upon
the fixed component of the Executive KMP remuneration). If employment is terminated on the grounds of redundancy, in addition to
the notice period, all other Executive KMP will be entitled to receive up to 12 months pay calculated in accordance with their FAR.

On termination by notice of the Company or the Executive KMP, any STIP and LTIP that have vested will be awarded. Where
employment ceased prior to the STIP outcome being determined or LTIP options vest, the treatment will be the same as that disclosed
in the CEO & Managing Director Remuneration section above.

The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with
cause occurs, the Executive KMP is only entitled to that proportion of remuneration that is fixed, and only up to the date of termination.
On termination with cause, any unvested STIP rights and LTIP shares or options will lapse.

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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Total Remuneration of Executive KMP
Details of the cost to the Group relating to Executive KMP remuneration for the year ended 30 June 2019 are set out below.

Total
Short Term Employee Total
Post Benefits performance
Employment Share-based Payments b Long Term Expense related

Salary sacrificed rights

LTIP Annual &
Cash Cash a
Super- Retirement Not shares & long service
salary bonus Other annuation benefits granted Granted STIP rights c options leave d
Executives
Tony Spassopoulos (Chief Executive Officer
& Managing Director)
2019 421,539 24,000 27,827 25,000 - 40,000 65,000 24,000 7,510 33,276 668,152 8.3%
2018 394,038 69,280 27,827 25,000 - 15,000 - 69,280 78,080 (2,522) 675,983 32.0%
Brenden Mitchell (former Chief Executive
Officer & Managing Director)
2019 125,184 - 3,569 16,667 675,000 - 33,750 - (165,348) 16,435 705,257 -
2018 428,237 135,000 14,275 25,000 - 67,500 135,000 135,000 176,080 (17,116) 1,098,976 40.6%
Tim Rogers (Chief Financial Officer)
2019 262,321 6,465 5,065 25,000 - 10,776 20,108 6,465 (9,981) (5,805) 320,414 0.9%
2018 247,577 30,497 4,404 25,000 - 9,332 18,658 30,497 34,563 4,712 405,240 23.6%
Malcolm Ross (General Counsel and
Company Secretary)
2019 247,367 11,009 3,001 24,714 - - - 11,009 (9,364) 6,591 294,327 4.3%
2018 244,014 21,376 - 24,167 - - - 21,375 30,459 4,246 345,637 21.2%
Shane Stafford (General Manager – readi)
2019 233,200 - 5,617 24,574 - - 5,022 - (41,168) (8,181) 219,064 -
2018 204,287 14,834 1,404 22,817 - 6,696 13,390 14,832 29,167 18,911 326,338 18.0%
Total Remuneration: Executives
2019 1,289,611 41,474 45,079 115,955 675,000 50,776 123,880 41,474 (218,351) 42,316 2,207,214 -
2018 1,518,153 270,987 47,910 121,984 - 98,528 167,048 270,984 348,349 8,231 2,852,174 -

Refer to note 18 for further details.

a Other represents motor vehicle allowance and novated lease payments.

b Share-based payments represent a combination of rights, shares and options in Boom Logistics Limited granted under the
remuneration structures. Only the expense relating to the period has been recognised in accordance with the accounting policy
disclosed in note 18.
c Rights awarded as part of the STIP are expected to be granted after the announcement of the full year results and not later than 31
August 2019.
d Long term annual leave and long service leave amounts represent the net movement in balance sheet leave provisions recognised in
the statement of comprehensive income during the financial year.

36 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Non-executive Director Fees
Non-executive Director fees are determined by reference to external survey data, taking account of the Group’s relative size and
business complexity. No additional payments are made for serving on Board Committees. In addition, non-executive Directors have no
entitlement to STIP, no equity incentives are offered and no retirement benefits are payable. The maximum aggregate sum for non-
executive Director remuneration of $400,000 was approved by shareholders at the 2004 Annual General Meeting. There has been no
increase to the NED fee pool since 2004.
Details of non-executive Directors’ remuneration for the year ended 30 June 2019 are as follows:

Post Share-based Long

Short Term Employment Payments Term Total
Annual &
Salary Super- Retirement long service
& fees Cash bonus Other annuation benefits All leave
Non-Executive Directors
Maxwell Findlay
2019 128,750 - - 12,231 - - - 140,981
2018 120,000 - - 11,400 - - - 131,400
Melanie Allibon
2019 2,137 - - 203 - - - 2,340
Jean-Pierre Buijtels
a

Terrence Francis
2019 64,375 - - 6,116 - - - 70,491
2018 60,000 - - 5,700 - - - 65,700
Terence Hebiton
2019 64,375 - - 6,116 - - - 70,491
2018 60,000 - - 5,700 - - - 65,700
Total Remuneration: Non-Executive Directors
2019 259,637 - - 24,666 - - - 284,303
2018 240,000 - - 22,800 - - - 262,800
Total Remuneration: Non-Executive Directors and
Executives – Group
2019 1,549,248 41,474 45,079 140,621 675,000 (2,221) 42,316 2,491,517
2018 1,758,153 270,987 47,910 144,784 - 884,909 8,231 3,114,974

a Jean-Pierre Buijtels is not paid a Director’s fee. Instead, the Company pays for his travel and accommodation costs whilst attending
Board of Director and committee meetings in Australia up to a maximum of $65,700 per financial year.

BOOM LOGISTICS ANNUAL REPORT 2019 37

 BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Equity Instruments Held by KMP
Summary of equity instruments held by KMP at reporting date are as follows:

Name Shares SSRP Rights STIP Rights LTIP Options

Max Findlay 250,000 - - -
Tony Spassopoulos 1,500,000 427,162 316,058 6,818,131
Melanie Allibon - - - -
Jean-Pierre Buijtels - - - -
Terrence Francis 185,745 - - -
Terence Hebiton 547,995 - - -
Tim Rogers - 388,637 188,709 1,914,149
Malcolm Ross - - 185,232 1,651,191

Shareholdings of Directors and Executive KMP

Received on
Ordinary shares held in Boom exercise of Received on
Logistics Limited (number) Balance at salary sacrifice exercise of Net change Balance at
30 June 2019 start of year rights STIP rights other (i) end of year

Non-Executive & Executive Directors

Maxwell Findlay 250,000 - - - 250,000
Tony Spassopoulos 1,081,565 - - 418,435 1,500,000
Melanie Allibon - - - - -
Jean-Pierre Buijtels a - - - - -
Terrence Francis (ii) 185,745 - - - 185,745
Terence Hebiton 547,995 - - - 547,995
Brenden Mitchell b 3,057,235 - - - 3,057,235

Executives
Tim Rogers - - -
Malcolm Ross - - -
Shane Stafford - - -

Total 5,122,540 - - 418,435 5,540,975

(i) These amounts represent ordinary shares purchased or sold directly or indirectly by the directors and executives during the
financial year. These transactions have no connection with their roles and responsibilities as employees of the Group.
(ii) Includes shares held under a nominee or a related party.

a Mr. Buijtels is employed by Rorema Beheer B.V., the fund manager (the Fund Manager) of the fund Gran Fondo Capital (the
Fund) which holds 35,380,332 shares in Boom Logistics Limited (the Company). Mr. Buijtels’ remuneration is partly linked to
the performance of the Fund, which is influenced by the performance of the shares of the Company as long as the Fund holds
shares in the Company. Mr. Buijtels holds a minority economic interest of less than 5% of the units of the Fund and thereby
indirectly an economic interest in the Company as long as the Fund holds shares in the Company. The Fund is open-ended and
Mr. Buijtels can redeem his units in the Fund against their net asset value minus redemption fee at each transaction day of the
Fund. Mr. Buijtels is not a director of the Fund Manager, and does not have the power to exercise votes, control the exercise of
votes, dispose of or control the disposal of the Fund’s shares in the Company. However, he can influence the decision-making
process of the director of the Fund Manager in his capacity as its portfolio manager.
b Mr. Mitchell’s shareholding balance is as at date of resignation on 20 September 2018.

38 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

SSRP Outcomes of the Executive KMP
The following table shows the rights to ordinary shares granted to Executive KMP during the financial year under the salary sacrifice
rights plan.

Value of
rights
Fair value granted
Grant per right at Exercise during the
Name Year Grant date number grant date date Expiry date year
Tony Spassopoulos 2019 25 Feb 19 308,451 $0.1793 25 Feb 20 25 Feb 29 $55,000
2018 17 Aug 18 118,711 $0.2069 17 Aug 19 17 Aug 28 $25,000
Brenden Mitchell 2018 17 Aug 18 490,958 $0.2069 17 Aug 19 17 Aug 28 $101,250
Tim Rogers 2019 25 Feb 19 85,968 $0.1793 25 Feb 20 25 Feb 29 $15,442
2018 17 Aug 18 67,876 $0.2069 17 Aug 19 17 Aug 28 $13,998
Shane Stafford 2019 25 Feb 19 7,720 $0.1793 25 Feb 20 25 Feb 29 $1,674
2018 17 Aug 18 48,703 $0.2069 17 Aug 19 17 Aug 28 $10,044

SSRP rights are granted twice per annum during the trading window following the release of the half-year and full year results.
Amounts are salary sacrificed monthly and are held until granting of rights during a trading window.
The following table shows the potential rights to ordinary shares not yet granted to Executive KMP equivalent to the amount of salary
sacrificed to 30 June 2019 since the most recent granting of rights under the salary sacrifice rights plan.

Number of Value of
rights rights
not yet not yet
Name Year granted granted
Tony Spassopoulos 2019 254,051 $40,000
Tim Rogers 2019 68,439 $10,776

BOOM LOGISTICS ANNUAL REPORT 2019 39

 BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

SSRP Outcomes of the Executive KMP (continued)
Rights to ordinary
shares (number) Balance at Granted Balance at
30 June 2019 Grant date start of year during year Exercised end of year
Salary Sacrifice Rights
Tony Spassopoulos 25 Feb 19 - 308,451 - 308,451
17 Aug 18 - 118,711 - 118,711
- 427,162 - 427,162

Brenden Mitchell 17 Aug 18 - 490,958 (490,958) -

22 Feb 18 525,326 - (525,326) -
29 Aug 17 896,095 - (896,095) -
23 Feb 17 623,592 - (623,592) -
2,045,013 490,958 (2,535,971) -

Tim Rogers 25 Feb 19 - 85,968 - 85,968

17 Aug 18 - 67,876 - 67,876
22 Feb 18 74,201 - - 74,201
29 Aug 17 118,524 - - 118,524
23 Feb 17 42,068 - - 42,068
234,793 153,844 - 388,637

Shane Stafford 25 Feb 19 - 7,720 - 7,720

17 Aug 18 - 48,703 - 48,703
22 Feb 18 52,995 - (52,995) -
29 Aug 17 85,919 - (85,919) -
23 Feb 17 45,547 - (45,547) -

184,461 56,423 (184,461) 56,423

Total 2,464,267 1,128,387 (2,720,432) 872,222

40 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Determining the STIP Outcomes of the Executive KMP

For the FY2018 STIP, the following table shows the rights to ordinary shares granted to Executive KMP during the year.

Value of
rights
Fair value granted
Grant per right at Exercise during the
Name Year Grant date number grant date date Expiry date year
Tony Spassopoulos 2018 7 Sep 18 316,058 $0.2192 7 Mar 19 7 Sep 28 $69,280
Brenden Mitchell 2018 7 Sep 18 615,876 $0.2192 7 Mar 19 7 Sep 28 $135,000
Tim Rogers 2018 7 Sep 18 139,129 $0.2192 7 Mar 19 7 Sep 28 $30,497
Malcolm Ross 2018 7 Sep 18 97,514 $0.2192 7 Mar 19 7 Sep 28 $21,375
Shane Stafford 2018 7 Sep 18 67,669 $0.2192 7 Mar 19 7 Sep 28 $14,832

For the FY2019 STIP, the Nomination and Remuneration Committee conducted a review of the Executive KMP performance against
their set targets which resulted in the following potential maximum STIP being awarded to the Executive KMP. The STIP will be settled
50% in cash and 50% in rights to ordinary shares in the Company after the announcement of the full year results and approval by the
Board of Directors.

Maximum Total
STIP Weightinga Cost
Name Title $ % $
Tony Spassopoulos Chief Executive Officer & Managing Director 240,000 20.0% 48,000
Tim Rogers Chief Financial Officer 64,654 20.0% 12,930
Malcolm Ross General Counsel & Company Secretary 55,042 40.0% 22,018
Shane Stafford General Manager – readi 77,135 0.0% 0

a Weighting represents the percentage of total STIP entitlement awarded to Executive KMPs based on their financial, safety and
individual performance targets.

Rights to ordinary
shares (number) Balance at Granted Balance at
30 June 2019 Grant date start of year during year Exercised end of year
STIP Rights
Tony Spassopoulos 7 Sep 18 - 316,058 - 316,058
Brenden Mitchell 7 Sep 18 - 615,876 (615,876) -
Tim Rogers 7 Sep 18 - 139,129 - 139,129
27 Sep 17 49,580 - - 49,580
49,580 139,129 - 188,709
Malcolm Ross 7 Sep 18 - 97,514 - 97,514
27 Sep 17 87,718 - - 87,718
87,718 97,514 - 185,232
Shane Stafford 7 Sep 18 - 67,669 (67,669) -
27 Sep 17 121,743 - (121,743) -

121,743 67,669 (189,412) -

Total 259,041 1,236,246 (805,288) 689,999

BOOM LOGISTICS ANNUAL REPORT 2019 41

 BOOM LOGISTICS LIMITED
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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Determining the LTIP Outcomes of the Executive KMP
Set out below are options granted to the Executive KMP under the LTIP during the year including those granted in previous years.

Fair Value of
value per options
option granted
Grant at grant Exercise Vesting during the
Name Year Grant date number Vesting date date price Expiry date Benchmark year
Tony Spassopoulos 2019 28 Nov 18 4,838,710 31 Aug 21 $0.0620 $0.164 30 Sep 21 EPS > $0.03 $300,000
2018 30 Nov 17 1,979,421 31 Aug 20 $0.0700 $0.212 30 Sep 20 $0.025 EPS $138,559
2017 4 Nov 16 2,932,473 31 Aug 19 $0.0450 $0.108 4 Sep 19 $0.020 EPS $131,961
Brenden Mitchell 2018 30 Nov 17 4,339,286 31 Aug 20 $0.0700 $0.212 30 Sep 20 $0.025 EPS $303,750
2017 4 Nov 16 6,750,000 31 Aug 19 $0.0450 $0.108 4 Sep 19 $0.020 EPS $303,750
Tim Rogers 2019 28 Nov 18 1,042,803 31 Aug 21 $0.0620 $0.164 30 Sep 21 EPS > $0.03 $64,654
2018 30 Nov 17 871,346 31 Aug 20 $0.0700 $0.212 30 Sep 20 $0.025 EPS $60,994
2017 4 Nov 16 1,303,293 31 Aug 19 $0.0450 $0.108 4 Sep 19 $0.020 EPS $58,648
Malcolm Ross 2019 28 Nov 18 887,777 31 Aug 21 $0.0620 $0.164 30 Sep 21 EPS > $0.03 $55,042
2018 30 Nov 17 763,414 31 Aug 20 $0.0700 $0.212 30 Sep 20 $0.025 EPS $53,439
2017 4 Nov 16 1,152,947 31 Aug 19 $0.0450 $0.108 4 Sep 19 $0.020 EPS $51,883
Shane Stafford 2019 28 Nov 18 829,403 31 Aug 21 $0.0620 $0.164 30 Sep 21 EPS > $0.03 $51,423
2018 30 Nov 17 706,360 31 Aug 20 $0.0700 $0.212 30 Sep 20 $0.025 EPS $49,445
2017 4 Nov 16 1,066,778 31 Aug 19 $0.0450 $0.108 4 Sep 19 $0.020 EPS $48,005

The FY2017 options allocated to the Executive KMP did not vest as their vesting conditions were not met. In accordance with the LTIP
rules, the FY2017 options were treated as lapsed at reporting date.

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DIRECTORS’ REPORT (continued)

REMUNERATION REPORT – AUDITED (CONTINUED)

Determining the LTIP Outcomes of the Executive KMP (continued)
Balance at
Options held in Boom Logistics Balance at end
Limited (number) start of year of year
30 June 2019 Grant date Unvested Granted Lapsed Forfeited Unvested

Tony Spassopoulos 28 Nov 18 - 4,838,710 - - 4,838,710

30 Nov 17 1,979,421 - - - 1,979,421
4 Nov 16 2,932,473 - (2,932,473) - -
4,911,894 4,838,710 (2,932,473) - 6,818,131
Brenden Mitchell 30 Nov 17 4,339,286 - - (1,446,429) 2,892,857
4 Nov 16 6,750,000 - (6,750,000) - -
11,089,286 - (6,750,000) (1,446,429) 2,892,857
Tim Rogers 28 Nov 18 - 1,042,803 - - 1,042,803
30 Nov 17 871,346 - - - 871,346
4 Nov 16 1,303,293 - (1,303,293) - -
2,174,639 1,042,803 (1,303,293) - 1,914,149
Malcolm Ross 28 Nov 18 - 887,777 - - 887,777
30 Nov 17 763,414 - - - 763,414
4 Nov 16 1,152,947 - (1,152,947) - -
1,916,361 887,777 (1,152,947) - 1,651,191
Shane Stafford 28 Nov 18 - 829,403 - (829,403) -
30 Nov 17 706,360 - - (706,360) -
4 Nov 16 1,066,778 - - (1,066,778) -
1,773,138 829,403 - (2,602,541) -

Total 21,865,318 7,598,693 (12,138,713) (4,048,970) 13,276,328

Share Trading Policy

The Group Securities Trading Policy applies to all NEDs and Executive KMP. The policy prohibits KMP from dealing in the Company
securities while in possession of material non-public information relevant to the Group.

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DIRECTORS’ REPORT (continued)

LEAD AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS

The auditor’s independence declaration is set out on page 45 and forms part of the directors’ report for the financial year ended 30
June 2019.

NON-AUDIT SERVICES
The following non-audit services were provided by KPMG Australia, the Company’s auditor. The Directors are satisfied that the
provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

KPMG Australia received or are due to receive the following amounts for the provision of non-audit services:

Taxation services $82,778

Other services $0

Total remuneration for non-audit services $82,778

PROCEEDINGS ON THE BEHALF OF THE COMPANY

No 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.

ROUNDING
The amounts contained in this report and in the financial report are presented in Australian dollars and have been rounded to the
nearest $1,000 (where rounding is applicable) under the option available under ASIC Corporations Instrument 2016/191. The Group is
of a kind to which the Corporations Instrument applies.

Signed in accordance with a resolution of the Directors.

Maxwell Findlay Tony Spassopoulos

Chairman Managing Director

Melbourne, 21 August 2019

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Lead Auditor’s Independence Declaration under

Section 307C of the Corporations Act 2001
To the Directors of Boom Logistics Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Boom Logistics Limited for
the financial year ended 30 June 2019 there have been:
i. no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG Andrew Hounsell

Partner

Melbourne

21 August 2019

 
 
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG Liability limited by a scheme approved under
International Cooperative (“KPMG International”), a Swiss entity. Professional Standards Legislation.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year Ended 30 June 2019

Note 2019 2018

$’000 $’000

Revenue 2 182,722 183,046

Other income 3(a) 4,242 170

Salaries and employee benefits expense (96,579) (94,678)
Equipment service and supplies expense 3(b) (44,446) (48,992)
Operating lease expense (11,972) (6,476)
Other expenses 3(b) (15,159) (12,053)
Restructuring expense (1,117) (370)
Depreciation and amortisation expense (17,340) (18,203)
Impairment expense 8 (1,975) -

Loss / (profit) before financing expense and income tax (1,624) 2,444

Financing expense 11(f) (3,706) (3,991)

Loss before income tax (5,330) (1,547)

Income tax benefit 4(a) - -

Net loss attributable to members of Boom Logistics Limited (5,330) (1,547)

Other comprehensive loss

Items that may be reclassified subsequently to profit or loss
Cash flow hedges recognised in equity, net of tax (17) (60)

Other comprehensive loss for the year, net of tax (17) (60)

Total comprehensive loss for the year attributable

to members of Boom Logistics Limited (5,347) (1,607)

Basic losses per share (cents per share) 5 (1.2) (0.3)

Diluted losses per share (cents per share) 5 (1.2) (0.3)

The accompanying notes form an integral part of the Consolidated Statement of Comprehensive Income.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2019

Note 2019 2018

$’000 $’000

CURRENT ASSETS
Cash and cash equivalents 1,450 1,670
Trade receivables, contract assets and other receivables 35,524 37,067
Inventories, prepayments and other current assets 5,282 1,882
Assets classified as held for sale 250 815
Income tax receivable 4(c) 4,450 4,450

TOTAL CURRENT ASSETS 46,956 45,884

NON-CURRENT ASSETS
Property, plant and equipment 7 152,079 167,488
Deferred tax asset 4(b) 28 7

TOTAL NON-CURRENT ASSETS 152,107 167,495

TOTAL ASSETS 199,063 213,379

CURRENT LIABILITIES
Trade and other payables 13,868 14,594
Interest bearing loans and borrowings 11 5,167 3,131
Employee provisions 8,147 9,178
Other provisions and liabilities 4,539 4,844

TOTAL CURRENT LIABILITIES 31,721 31,747

NON-CURRENT LIABILITIES
Interest bearing loans and borrowings 11 32,709 35,443
Employee provisions 307 257
Other provisions and liabilities 344 657
Derivative financial instruments 110 85

TOTAL NON-CURRENT LIABILITIES 33,470 36,442

TOTAL LIABILITIES 65,191 68,189

NET ASSETS 133,872 145,190

EQUITY
Contributed equity 13(a) 312,057 318,065
Retained losses (180,601) (174,871)
Reserves 2,416 1,996

TOTAL EQUITY 133,872 145,190

The accompanying notes form an integral part of the Consolidated Statement of Financial Position.

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CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended 30 June 2019

Note 2019 2018

$’000 $’000

Cash flows from operating activities

Receipts from customers 203,836 194,568
Payments to suppliers and employees (187,269) (179,586)
Interest paid (3,333) (3,539)
Interest received 11 8
Income tax paid - -

Net cash provided by operating activities 9 13,245 11,451

Cash flows from investing activities

Purchase of property, plant and equipment (10,765) (5,516)
Proceeds from the sale of property, plant and equipment 6,346 2,442

Net cash (used in) investing activities (4,419) (3,074)

Cash flows from financing activities

Payments for shares bought back (5,978) -
Proceeds from borrowings 14,135 4,979
Repayment of borrowings (16,959) (13,844)
Payment of transaction costs related to share buy-back and borrowings (244) -

Net cash (used in) financing activities (9,046) (8,865)

Net decrease in cash and cash equivalents (220) (488)

Cash and cash equivalents at the beginning of the period 1,670 2,158

Cash and cash equivalents at the end of the period 1,450 1,670

The accompanying notes form an integral part of the Consolidated Statement of Cash Flows.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year Ended 30 June 2019

Employee
Cash Flow Equity
Issued Retained Hedge Benefits Total
Note Capital Earnings Reserve Reserve Equity
$’000 $’000 $’000 $’000 $’000

At 1 July 2017 318,065 (173,324) - 1,123 145,864

Loss for the year - (1,547) - - (1,547)

Other comprehensive loss - - (60) - (60)

Total comprehensive loss - (1,547) (60) - (1,607)

Transactions with owners in their

capacity as owners:
Cost of share based payments 18(b) - - - 933 933

At 30 June 2018 318,065 (174,871) (60) 2,056 145,190

Adjustment on initial application of
AASB 9 12(a) - (400) - - (400)

Adjusted balance at 1 July 2018 318,065 (175,271) (60) 2,056 144,790

Loss for the year - (5,330) - - (5,330)

Other comprehensive loss - - (17) - (17)

Total comprehensive loss - (5,330) (17) - (5,347)

Transactions with owners in their

capacity as owners:
Cost of share based payments 18(b) - - - 437 437
Share buy-back including transaction
costs and net of tax 13(a) (6,008) - - - (6,008)

At 30 June 2019 312,057 (180,601) (77) 2,493 133,872

The accompanying notes form an integral part of the Consolidated Statement of Changes in Equity.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year Ended 30 June 2019

ABOUT THIS REPORT

The financial report of Boom Logistics Limited and its subsidiaries (“the Group”) for the year ended 30 June 2019 was authorised for
issue in accordance with a resolution of the Board of Directors on 21 August 2019.

Boom Logistics Limited is a company domiciled in Australia and limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Stock Exchange.

The Group is a for-profit entity and the nature of its operations and principal activities are described in note 1.

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards
(AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial
report complies with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting
Standards Board (IASB).

The financial report has been prepared in accordance with the historical cost convention rounded to the nearest thousand dollars
($’000) in accordance with ASIC Corporations Instrument 2016/191 unless otherwise stated, except for derivative financial instruments
and assets classified as held for sale which are measured at fair value. The financial report is presented in Australian dollars which is
the Company’s functional currency.

Boom’s Directors have included information in this report that they deem to be material and relevant to the understanding of the
financial report. Disclosure may be considered material and relevant if the dollar amount is significant due to size or nature, or the
information is important to understand the:
• Group’s current year results;
• impact of significant changes in Boom’s business; or
• aspects of the Group’s operations that are important to future performance.

Disclosure of information that is not material may undermine the usefulness of the financial report by obscuring important information.

Accounting policies and critical accounting judgements applied to the preparation of the financial report have been moved to where
the related accounting balance or financial statement matter is discussed.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE

This section provides the information that is most relevant to understanding the financial performance of the Group during the financial year.

1. SEGMENT REPORTING
Description of operating segments
Management has determined the operating segments based on the reports reviewed by the Chief Operating Decision Maker
(“CODM”) to make decisions about resource allocation and to assess performance. The CODM who is responsible for allocating
resources and assessing performance of the operating segments is the Managing Director and CEO.
The business is considered from a product perspective and has two reportable segments:
• “Lifting Solutions”, which consists of all lifting activities including the provision of cranes, travel towers, access equipment and all
associated services; and
• “Labour Hire”, which includes the provision of skilled labour with a wide range of trades, such as, electricians, boiler makers,
mechanics, plus the traditional crane and travel tower operators, riggers, truck drivers.

The segment information provided to the CODM is measured in a manner consistent with that of the financial statements.
All inter-segment sales are carried out at arm’s length prices.

Segment information Lifting Labour

Note Solutions Services Other * Elimination Consolidated
Year ended 30 June 2019 $’000 $’000 $’000 $’000 $’000

Segment revenue

Total external revenue 180,516 2,206 - - 182,722

Inter-segment revenue - 22,543 - (22,543) -

Total segment revenue 180,516 24,749 - (22,543) 182,722

Other income 3(a) 4,242

Total revenue and other income 186,964

Segment result
Operating result 26,669 1,076 (6,263) - 21,482
Net profit on disposal of property, plant and
equipment (2,010) - - - (2,010)
Depreciation and amortisation (16,771) (8) (561) - (17,340)
Restructuring expense (1,117) - - - (1,117)
Employee benefit expense – retirement
provision - - (675) - (675)
Impairment of property, plant and equipment (1,975) - - - (1,975)

(Loss) / profit before net interest and tax 4,796 1,068 (7,499) - (1,635)

Net interest (3,695)

Income tax benefit -

Loss from continuing operations (5,330)

Segment assets and liabilities

Segment assets 191,159 1,949 7,704 (1,749) 199,063
Segment liabilities 58,492 928 5,771 - 65,191

Additions to non-current assets 12,461 - 464 - 12,925

* Other represents centralised costs including national office and shared services.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE (CONTINUED)

1. SEGMENT REPORTING (CONTINUED)
Segment information (continued) Lifting Labour
Note Solutions Services Other * Elimination Consolidated
Year ended 30 June 2018 $’000 $’000 $’000 $’000 $’000

Segment revenue

Total external revenue 180,372 2,674 - - 183,046

Inter-segment revenue - 19,530 - (19,530) -

Total segment revenue 180,372 22,204 - (19,530) 183,046

Other income 3(a) 170

Total revenue and other income 183,216

Segment result
Operating result 26,974 1,269 (7,396) - 20,847
Net profit on disposal of property, plant and
equipment 155 - 7 - 162
Depreciation and amortisation (17,681) (8) (514) - (18,203)
Restructuring expense (310) - (60) - (370)

Profit / (loss) before net interest and tax 9,138 1,261 (7,963) - 2,436

Net interest (3,983)

Income tax benefit -

Loss from continuing operations (1,547)

Segment assets and liabilities

Segment assets 205,699 2,849 7,576 (2,745) 213,379
Segment liabilities 62,448 866 4,875 - 68,189

Additions to non-current assets 5,380 - 1,140 - 6,520

* Other represents centralised costs including national office and shared services.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE (CONTINUED)

2. REVENUE FROM CONTRACTS WITH CUSTOMERS
(a) Disaggregation of revenue from contracts with customers
Boom Logistics Limited is domiciled in Australia and all core revenue is derived from customers within Australia. The Group derives
revenue from the transfer of services over time in the following industry segments:

Lifting Labour
Solutions Services Consolidated
Industry segment $’000 $’000 $’000

Year ended 30 June 2019

Mining & resources 87,333 44 87,377
Wind, energy, & utilities 34,161 - 34,161
Infrastructure & construction 23,822 951 24,773
Industrial maintenance 20,896 1,200 22,096
Telecommunications 13,176 - 13,176
Other 1,128 11 1,139

Total revenue from contracts with customers 180,516 2,206 182,722

Timing of revenue recognition

Services transferred over time 180,516 2,206 182,722

Year ended 30 June 2018

Mining & resources 98,750 1,335 100,085
Wind, energy, & utilities 25,898 - 25,898
Infrastructure & construction 24,992 148 25,140
Industrial maintenance 19,343 1,190 20,533
Telecommunications 10,037 - 10,037
Other 1,352 1 1,353

Total revenue from contracts with customers 180,372 2,674 183,046

Timing of revenue recognition

Services transferred over time 180,372 2,674 183,046

(b) Contract balances

Note 2019 2018
$’000 $’000

Trade and other receivables 29,382 36,352

Contract assets (i) 6,142 715

Total trade receivables, contract assets and other receivables 35,524 37,067

(i) Contract assets relate to the Group’s right to consideration for work completed but not billed at the reporting date. The contract
assets are transferred to trade receivables when the rights become unconditional. This usually occurs when the Group issues the
invoices to the customers.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE (CONTINUED)

2. REVENUE FROM CONTRACTS WITH CUSTOMERS (CONTINUED)
Recognition and measurement
Revenue from the hire of lifting/access equipment, labour and other services provided is recognised where the right to be
compensated for the services can be reliably measured. This typically occurs when the job dockets or timecards are approved by the
customers. If the services under a single arrangement are rendered in different reporting periods, then the consideration is allocated on
a relative fair value basis.

Revenue from the installation of wind towers is recognised by reference to the stage of completion of the contract. The stage of
completion is measured by reference to work completed on each stage of a wind tower unit calculated as a percentage of the total
wind towers included under the contract.

The total consideration in the services above is allocated based on their standalone selling prices. The stand-alone selling prices are
determined based on the list prices at which the Group sells the services in separate transactions. The fair value and the stand-alone
selling prices of both types of services are considered broadly similar.

Key estimate and judgement

Determining the stage of completion requires an estimate of the wind tower units completed to date as a percentage of the total wind
tower units under the contract. Where variations and claims are made to the contract, assumptions are made regarding the probability
that the customer will approve the variations and claims and the amount of revenue that will arise. Changes in these estimation
methods could have a material impact on the financial statements.

2019 2018
$’000 $’000

3. OTHER INCOME AND EXPENSES

(a) Other income
Profit on disposal of plant and equipment - 162
Interest income 11 8
Insurance settlement 2,589 -
Legal settlement 1,642 -
4,242 170

(b) Expenses
External equipment hire 10,249 8,385
External labour hire 3,895 9,398
Maintenance 9,957 11,703
Fuel 3,459 3,598
External transport 8,199 7,527
Employee travel and housing 2,275 1,053
Other reimbursable costs (on-charged to customers) 1,517 3,429
Other equipment services and supplies 4,895 3,899

Total equipment services and supplies expense 44,446 48,992

Employee related 3,397 3,736

Insurance and compliance 3,839 2,611
IT and communications 2,633 2,244
Occupancy 1,322 1,494
Other overheads 1,958 1,968
Loss on disposal of plant and equipment 2,010 -

Total other expense 15,159 12,053

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE (CONTINUED)

2019 2018
$’000 $’000

4. INCOME TAX
(a) Income tax benefit
Current income tax
Current income tax expense / (benefit) 134 10
Adjustments in respect of current income tax of previous years (120) (10)

Deferred income tax

Relating to origination and reversal of temporary differences (14) -

- -
A reconciliation between tax benefit and the accounting loss before income tax
is as follows:

Accounting loss before tax from continuing operations (5,330) (1,547)

At the Group’s statutory income tax rate of 30% (2018: 30%) (1,599) (464)
Expenditure not allowable for income tax purposes 35 40
Adjustments in respect of current income tax of previous years (120) (10)
Current year losses for which no deferred tax asset is recognised 569 70
Derecognition of tax losses recognised in previous years 1,115 364

Income tax benefit - -

Recognised
Opening in Income Recognised Closing
Balance Statement in Equity Balance
$’000 $’000 $’000 $’000
(b) Deferred income tax
Year ended 30 June 2019
– Employee leave provisions 2,831 (295) - 2,536
– Allowance for impairment on financial assets 123 50 - 173
– Liability accruals 735 (287) - 448
– Restructuring provisions 38 208 - 246
– Tax losses 7,523 (1,115) - 6,408
– Plant and equipment (11,269) 1,453 - (9,816)
– Derivative financial instruments 26 - 7 33

Net deferred tax asset / (liabilities) 7 14 7 28

Year ended 30 June 2018

– Employee leave provisions 2,360 471 - 2,831
– Allowance for impairment on financial assets 141 (18) - 123
– Liability accruals 224 511 - 735
– Restructuring provisions 112 (74) - 38
– Tax losses 7,887 (364) - 7,523
– Plant and equipment (10,743) (526) - (11,269)
– Derivative financial instruments - - 26 26

Net deferred tax asset / (liabilities) (19) - 26 7

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE (CONTINUED)

4. INCOME TAX (CONTINUED)
(c) Income tax receivable
Income tax receivable represents the anticipated tax refund in respect of the FY2019 year of $4.450 million (2018: $4.450 million)
which was paid prior to 30 June 2019 to offset a franking deficit position at that time. The prepayment of tax instalments will continue
until the franking deficit is permanently extinguished.

(d) Tax losses

The Group has total tax losses of $29.537 million tax effected (2018: $28.968 million). $6.408 million of these losses have been
recognised on balance sheet and $23.129 million has not been recognised as a deferred tax asset based on an assessment of the
probability that sufficient taxable profit will be available to allow the tax losses to be utilised in the near future. The unused tax losses
remain available indefinitely.

Recognition and measurement

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted by the balance sheet date.

Deferred tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.

Deferred tax assets and liabilities are recognised for all deductible / taxable temporary differences except where they arise from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive
income.

Tax consolidation legislation

Boom Logistics Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Boom Logistics Limited, and the controlled entities in the tax consolidated group have entered into a tax funding
agreement such that each entity in the tax consolidated group recognises the assets, liabilities, revenues and expenses in relation to its
own transactions, events and balances only.

Key estimate and judgement

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
profits will be available to utilise those temporary differences and losses, and the losses continue to be available having regard to their
nature and timing of origination. Judgement is required to determine the amount of deferred tax assets that can be recognised based
upon the likely timing and the level of future taxable profits. Utilisation of tax losses also depends on the ability of the Group to satisfy
certain tests at the time the losses are recouped.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION A: FINANCIAL PERFORMANCE (CONTINUED)

5. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary
shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the calculation of basic and diluted earnings per share:

Note 2019 2018

$’000 $’000

Net loss after tax (5,330) (1,547)

No. of shares
Weighted average number of ordinary shares used in calculating basic
earnings per share 462,894,795 474,868,764

Effect of dilutive securities:

– employee share awards (i) - -

Adjusted weighted average number of ordinary shares used in

calculating diluted earnings per share 462,894,795 474,868,764

Number of ordinary shares at financial year end 439,193,800 474,868,764

(i) The total number of granted rights and options at 30 June 2019 and 30 June 2018 were excluded from the diluted weighted
average number of ordinary shares calculation as their effect was anti-dilutive.

6. DIVIDENDS
There were no dividends paid or proposed during the year.

The amount of franking credits available for the subsequent financial year are:

– Franking credits as at the end of the financial year at 30% (2018: 30%) 2 2

– Franking deficits that will arise from the receipt of income tax receivable as at the
end of the financial year 4(c) (4,450) (4,450)

(4,448) (4,448)

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 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION B: OPERATING ASSETS AND LIABILITIES

This section provides information relating to the key operating assets used and liabilities incurred to support delivering the financial
performance of the Group.

Machinery,
Furniture, Freehold
Rental Motor Fittings & Land &
Note Equipment Vehicles Equipment Buildings Total
$’000 $’000 $’000 $’000 $’000
7. PROPERTY, PLANT
AND EQUIPMENT
Year ended 30 June 2019
Opening carrying amount 159,559 3,896 1,228 2,805 167,488
Additions 11,395 885 645 - 12,925
Disposals (i) (8,642) (76) (68) - (8,786)
Transfers (676) 282 162 (1) (233)
Impairment 8 (975) - - (1,000) (1,975)
Depreciation charge for the year (15,661) (909) (648) (122) (17,340)

Closing carrying amount 145,000 4,078 1,319 1,682 152,079

At cost 316,839 21,534 5,932 3,120 347,425

Accumulated depreciation (171,839) (17,456) (4,613) (1,438) (195,346)

Closing carrying amount 145,000 4,078 1,319 1,682 152,079

Year ended 30 June 2018

Opening carrying amount 169,121 4,879 699 2,927 177,626
Additions 4,261 998 1,261 - 6,520
Disposals (213) (140) (59) - (412)
Transfers 1,608 185 164 - 1,957
Depreciation charge for the year (15,218) (2,026) (837) (122) (18,203)

Closing carrying amount 159,559 3,896 1,228 2,805 167,488

At cost 350,753 19,855 6,011 3,120 379,739

Accumulated depreciation (191,194) (15,959) (4,783) (315) (212,251)

Closing carrying amount 159,559 3,896 1,228 2,805 167,488

(i) Disposals during the year totalled $9.584 million which comprises $8.786 million from property, plant and equipment
and $0.798 million from assets classified as held of sale. At reporting date, $1.2 million (2018: $nil) of proceeds from sale
had not been received and are disclosed in “Inventories, prepayments and other current assets” on the Consolidated
Statement of Financial Position.

58 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION B: OPERATING ASSETS AND LIABILITIES (CONTINUED)

7. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Property, plant and equipment with a carrying amount of $148.341 million (2018: $167.488 million) is pledged as securities for current
and non-current interest bearing loans and borrowings as disclosed in note 11. Additionally, plant and equipment held under finance
leases with a carrying value of $3.738 million (2018: $nil) is pledged as security against the finance lease contracts.

Assets classified as held for sale

The balance in the Group’s assets classified as held for sale account at 30 June 2019 is $0.250 million (2018: $0.815 million). All
assets classified as assets held for sale have been reviewed to ensure they are being carried at their recoverable amount less any
selling costs.

Recognition and measurement

Property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the asset. Land is measured at cost.

When a major overhaul is performed on an asset, the cost is recognised in the carrying amount of property, plant and equipment
only if the major overhaul extends the expected useful life of the asset or if the continuing operation of the asset is conditional upon
incurring the expenditure. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of property,
plant and equipment as a replacement only if it is eligible for capitalisation. The cost of the day-to-day servicing or the replacement of
consumable parts of property, plant and equipment is recognised in profit or loss as incurred.

Depreciation is recognised in the statement of comprehensive income on a straight line basis over the estimated useful life of each part
of an item of property, plant and equipment as follows:

Buildings 20 Years
Mobile Cranes 10 to 15 Years
Travel Towers 10 to 20 Years
Access and Ancillary Equipment 10 Years
Vehicles 5 to 10 Years
Office and Workshop Equipment 3 to 10 Years
Leasehold Improvements Lease term
Computer Equipment 3 to 5 Years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and at more regular intervals when there is
an indicator of impairment or when deemed appropriate.

Gains or losses on sale of property, plant and equipment are included in the statement of comprehensive income in the year the asset
is disposed of.

Key estimate and judgement

The Group determines the estimated useful lives of assets and related depreciation charges for its property, plant and equipment
based on the accounting policy stated above. These estimates are based on projected capital equipment lifecycles for periods up to
twenty years based on useful life assumptions.

Residual values are determined based on the value the Group would derive upon ultimate disposal of the individual piece of property,
plant and equipment at the end of its useful life. The achievement of these residual values is dependent upon the second hand
equipment market at any given point in the economic cycle.

Management will increase the depreciation charge where useful lives are less than previously estimated lives or there is indication that
residual values can not be achieved.

BOOM LOGISTICS ANNUAL REPORT 2019 59

 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION B: OPERATING ASSETS AND LIABILITIES (CONTINUED)

8. IMPAIRMENT TESTING OF ASSETS
Recognition and measurement
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets and inventories, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable
amount is estimated.

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 from other assets or groups of assets (the “cash-generating unit”).

Following the appointment of Tony Spassopoulos as CEO and Managing Director in the first half of 2019 financial year the Group has
completed the re-organisation and rationalisation of its reporting and operating structure. The Group’s asset hire businesses have been
organised by region under a responsible regional General Manager.

Consequently, the CGUs have been changed to a metropolitan region that services principally telecommunication, power and utilities
customers under national service agreements requiring travel tower assets. In the other regions, being East Coast, Southern and
Western Australia, service contracts within and across regions generally use a bundle of asset types with assets of the same capacity
generally interchangeable.

The labour hire business is maintained as a separate operating segment and CGU. Each region is supported by shared regional
resources in addition to national shared services comprising business development, fleet management, information technology,
finance and administration services. In making this change to CGU classification no prior period impairment risk has arisen.

The recoverable amount of an asset or cash-generating unit or a group of cash-generating units is the greater of its value in use and its
fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a
post-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 if the carrying amount of an asset, cash-generating unit or a group of cash-generating units exceeds
its recoverable amount. Impairment losses are recognised in the statement of comprehensive income. 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.

Key estimate and judgement

The carrying values of the CGU’s fixed assets were tested at 30 June 2019 by reference to management’s assessment of their fair
value less costs of disposal. Fair value was determined after considering information from a variety of sources including a valuation of
all cranes and travel tower assets obtained from an independent valuer dated 31 May 2019. The Group did not make any allowance
for costs to sell as they were deemed immaterial given the Group’s in house expertise and track record of successful asset sales. The
Group has classified the assessment as Level 2 in the fair value hierarchy (as per AASB 13) where “inputs other than quoted prices in
active markets that are observable for the asset either directly or indirectly”.

The independent valuation supported the carrying value of the CGU’s crane and travel tower assets as stated in the consolidated
statement of financial position. The evaluation is consistent with the Group’s assessment of the economic environment, lengthening
lead times for new equipment and second hand asset values. Consequently, no impairment adjustment to the carrying value of
operating fleet was considered necessary at 30 June 2019. An impairment charge of $1.975 million was recognised in the period of
which $0.975 million related to damage incurred to one particular crane asset that will be repaired and placed back into service, and
$1.0 million related to land and building in Newman Western Australia further to an assessment of the fair value of similar properties in
the region based on recent sale values. The carrying value of the land and building post impairment is $1.682 million.

60 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION B: OPERATING ASSETS AND LIABILITIES (CONTINUED)

Note 2019 2018
$’000 $’000

9. RECONCILIATION OF THE NET CASH FLOWS FROM OPERATIONS WITH NET LOSS AFTER TAX
Net loss after tax (5,330) (1,547)

Non cash items

Depreciation and amortisation of non-current assets 17,340 18,203
Impairment of property, plant and equipment 1,975 -
Borrowing costs – amortisation 11(f) 373 330
Net loss/(profit) on disposal of property, plant and equipment 3 2,010 (162)
Share based payments 18(b) 437 933

Changes in assets and liabilities

Decrease / (increase) in trade receivables, contract assets and other receivables 1,143 (6,695)
(Increase) in inventories, prepayments and other assets (2,181) (47)
(Increase) in current and deferred tax balances (21) (27)
(Decrease) / increase in trade and other payables (948) 175
(Decrease) / increase in provisions and other liabilities (1,553) 288

Net cash flow from operating activities 13,245 11,451

10. COMMITMENTS
(a) Operating leases commitments

The Group has entered into commercial leases on certain plant and equipment, motor vehicles
and property. These leases have terms ranging from 1 to 5 years.

Minimum lease payments

– within one year 13,646 6,569
– after one year but not more than five years 14,239 8,514

Aggregate operating lease expenditure contracted for at reporting date 27,885 15,083

(b) Finance leases commitments

The Group has finance lease commitments for certain plant and equipment for periods
between 4 to 5 years:
– within one year 741 193
– after one year but not more than five years 3,677 224

Total minimum lease payments 4,418 417

– future finance charges (692) (24)

Net liability 11(d) 3,726 393

BOOM LOGISTICS ANNUAL REPORT 2019 61

 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION B: OPERATING ASSETS AND LIABILITIES (CONTINUED)

2019 2018
$’000 $’000

10. COMMITMENTS (CONTINUED)

(c) Capital commitments

There is no capital expenditure contracted for at reporting date but not recognised in the
financial statements:

Property, plant and equipment

– within one year - 1,829

- 1,829

Recognition and measurement

Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight line basis over the
lease term.

Finance lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are recognised in financing expenses in the statement of
comprehensive income.

62 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES

This section provides information relating to the Group’s funding structure and its exposure to financial risk, how they affect the Group’s
financial position and performance and how the risks are managed.
2019 2018
$’000 $’000

11. NET DEBT

Current
Other loans 5,167 3,131

Total current interest bearing liabilities 5,167 3,131

Non current
Other loans 21,923 30,831
Secured bank loans 11,000 5,000
Prepaid borrowing costs (214) (388)

Total non-current interest bearing liabilities 32,709 35,443

Total interest bearing liabilities 37,876 38,574

Less: cash and cash equivalents (1,450) (1,670)

Net debt 36,426 36,904

(a) Debt facilities

At reporting date, the Group had the following debt facilities:

• $20 million, 3 year syndicated loan facility expiring on January 2022. The facility attracts a floating interest rate. The facility
limit amortises by between $nil and $2.5 million at each six month period on 1 January and 1 July dependant on the
earnings leverage ratio reported at the end of the preceding quarter. The Group does not expect any amortisation to apply to
the facility;

• $20 million, 3 year trade receivables loan facility expiring on January 2022. The facility incurs a fixed fee and floating interest
on funds drawn. There is no amortisation required over the life of this facility;

• $35 million asset finance facility with De Lage Landen, comprising finance and operating leases with varying expiry dates from
August 2021 to May 2024. The facility attracts fixed interest rates and drawn amounts amortise over a period of 2 to 5 years.

(b) Covenant position

The Group was in compliance with all financial and non-financial banking covenants throughout the reporting period and as
at 30 June 2019.

(c) Assets pledged as security

Fixed and floating charges are held over all of the Group’s assets, including cash at bank, trade receivables, contract assets
and other receivables, and assets classified as held for sale.

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 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

11. NET DEBT (CONTINUED)

(d) Terms and debt repayment schedule

2019 2018
Weighted
average Year of $’000 $’000
Currency interest rate maturity Carrying amount

Syndicated debt AUD 4.71% January 2022 11,000 5,000

Trade receivables loan AUD 8.46% January 2022 7,617 13,856
Finance lease AUD 5.98% 2023 to 2024 3,726 393
Finance arrangement AUD 6.22% August 2021 15,747 19,713
Prepaid borrowing costs (214) (388)

Total interest bearing liabilities 37,876 38,574

(e) Financing facilities available

At reporting date, the following financing facilities had been negotiated and were available:
2019 2018
$’000 $’000
Total facilities:
– bank overdraft 1,000 1,000
– bank loans and borrowings 75,000 51,356

76,000 52,356
Facilities drawn at reporting date:
– bank overdraft - -
– bank loans and borrowings 38,090 38,962

38,090 38,962
Facilities undrawn at reporting date:
– bank overdraft 1,000 1,000
– bank loans and borrowings (i) 28,619 12,394

29,619 13,394

(i) $7.2 million of the $35 million asset finance facility was undrawn at reporting date. $19.5 million was drawn as disclosed
above with a further $8.3 million utilised by operating lease commitments.

In addition, the Group has an existing $10.5 million working capital facility arrangement with National Australia Bank for letters
of credit, bank guarantees and credit card facilities. As at 30 June 2019, $7.609 million (2018: $5.487 million) was utilised.

(f) Financing expense

Interest expense 2,521 2,855
Borrowing costs – amortisation (non-cash) 373 330
Borrowing costs – other 812 806

Total financing expense 3,706 3,991

64 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

11. NET DEBT (CONTINUED)
Recognition and measurement
All loans and borrowings are initially recognised at fair value of the consideration received less directly attributable transaction costs. After
initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in the statement of comprehensive income when the liabilities are derecognised.

The fair value of all borrowings approximates their carrying amount at reporting date as the impact of any market discounting is not
significant.

12. FINANCIAL RISK MANAGEMENT

The Board of Directors has overall responsibility for the oversight of the Company’s risk management framework including the
identification and management of material business, financial and regulatory risks. Management reports regularly to the Risk
Committee and the Board of Directors on relevant activities.

Risk management guidelines have been further developed 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 guidelines are regularly reviewed to reflect changes
in market conditions and the Group’s activities.

The Group has exposure to the following risks from its use of financial instruments:
• Credit risk;
• Liquidity risk; and
• Market risk.

(a) Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade receivables, contract
assets and other receivables, and derivative instruments. The Group’s exposure to credit risk arises from potential default of
the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is
addressed in each applicable note.

The Group’s policy is to trade with recognised, creditworthy third parties. It is the Group’s practice that all customers who wish
to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an
ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Trade receivables and contract assets

The Group applies the simplified approach to measuring expected credit losses (“ECL”) which uses a lifetime expected loss
allowance for all trade receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit
risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the
same risk characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that the
expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.

The Group established a provision matrix based on the historical credit loss experience and adjusted for forward looking factors
specific to the debtors and the economic environment. The Group considers trade receivables and contract assets are at
risk when contractual payments are 120 days past invoice date, subject to other internal or external information that indicate
otherwise.

Collectability is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying
amount directly. An allowance for impairment is used when there is objective evidence that the Group will not be able to collect
all amounts due according to the original terms of the receivables.

BOOM LOGISTICS ANNUAL REPORT 2019 65

 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

12. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Credit risk (continued)
At reporting date, the credit risk exposure on the Group’s trade receivables and contract assets using a provision matrix is as follows:

ECL Trade Contract Loss

Rate Receivables * Assets Total Allowance
$’000 $’000 $’000 $’000
30 June 2019
Current 0.20% 16,055 6,142 22,197 41
30 days 0.25% 3,472 - 3,472 8
60 days 0.25% 3,389 - 3,389 8
90 days 0.75% 4,151 - 4,151 28
120 days 7.50% 739 - 739 50
+120 days 20.00% 1,082 - 1,082 197

28,888 6,142 35,030 332

* Trade receivables are net of specific transactions totalling $0.245 million that have been fully provided and excluded from
above general provision calculation.

Other receivables of $0.8 million (2018: $nil) related to the unpaid portion of the legal settlement as disclosed in note 3(a). The
legal settlement was awarded by the court and is not considered a credit risk.

The movement in the allowance for impairment in respect of trade receivables and contract assets during the financial year is
as follows:

2019
$’000

Balance at 1 July under AASB 139 409

Adjustment on initial application of AASB 9 400

Balance at 1 July under AASB 9 809

Impairment loss recognised 257
Amounts written-off and/or written back (489)

Balance at 30 June 577

Recognition and measurement

Trade receivables and contract assets are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for impairment. Trade receivables are generally due for settlement within
30 – 90 days.

The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When
a trade receivable or contract asset for which an allowance for impairment had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are
credited against other expenses in the statement of comprehensive income.

66 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

12. FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its financial obligations
as they fall due under both normal and stressed conditions without incurring unacceptable losses or damage to the Group’s
reputation. In order to meet these requirements management estimates the cash flows of the Group on a weekly, monthly and
three year rolling basis.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts,
bank loans, finance leases and trade receivables loan. At 30 June 2019, the Group’s balance sheet gearing ratio was 27% (net
debt / total equity) (2018: 25%).

The table below represents the undiscounted contractual settlement terms for financial liabilities based on the remaining period
at the reporting date to the contractual maturity date.

Carrying Contractual 6 mths 6–12 1–2 2–5

30 June 2019 amount cash flows or less mths years years
$’000 $’000 $’000 $’000 $’000 $’000

Trade and other payables 13,868 (13,868) (13,868) - - -

Derivatives 110 (110) (14) (28) (46) (23)

Other loans 27,090 (30,409) (3,577) (3,577) (7,153) (16,103)

Secured bank loans 11,000 (12,186) (230) (230) (459) (11,268)

52,068 (56,573) (17,689) (3,835) (7,658) (27,394)

Carrying Contractual 6 mths 6–12 1–2 2–5

30 June 2018 amount cash flows or less mths years years
$’000 $’000 $’000 $’000 $’000 $’000

Trade and other payables 14,594 (14,594) (14,594) - - -

Derivatives 85 (85) (38) (27) (20) -

Other loans 33,569 (38,042) (2,611) (2,611) (18,283) (14,537)

Secured bank loans 5,000 (5,265) (132) (132) (5,001) -

53,248 (57,986) (17,375) (2,770) (23,304) (14,537)

Recognition and measurement

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually payable within 60 days of recognition.

BOOM LOGISTICS ANNUAL REPORT 2019 67

 BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

12. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk
Market risk is the risk that changes in interest rates and foreign exchange rates will affect the Group’s income or the value of its
holdings of financial instruments.

Interest rate risk

At the reporting date, the interest rate profiles of the Group’s interest bearing financial instruments were:

Carrying amount
Note 2019 2018
$’000 $’000
Fixed rate instruments
Financial liabilities (i) (19,473) (20,106)

(19,473) (20,106)

Variable rate instruments

Financial assets – cash at bank and on hand 1,450 1,670
Financial liabilities (i) (18,617) (18,856)

(17,167) (17,186)
(i) Fixed and variable rate instruments represent interest bearing loans and borrowings of $38.090 million (2018: $38.962
million) as disclosed in note 11.

The Group’s main interest rate risk arises from short and long-term borrowings. Borrowings issued at variable rates expose the
Group to cash flow interest rate risk. This risk is managed by taking into consideration the current and expected future debt
profile, expectations regarding future interest rate movements, the mix between variable and fixed rate borrowings and the
potential to hedge against negative outcomes by entering into interest rate swaps.

In respect of variable rate instruments, a change of 100 basis points up or down in interest rates would have decreased or
increased the Group’s profit and loss before tax by $171,670 (2018: $171,860).

The Group will continue to monitor debt levels and assess the need to enter into further interest rate swap contracts, or other
derivative instruments, based on forecast debt levels and prevailing market conditions at that time.

Foreign exchange rate risk

Foreign exchange risk arises when future commercial transactions and recognised liabilities are denominated in a currency that
is not the entity’s functional currency. The Group has transactional currency exposures arising from operating lease of plant and
equipment denominated in Euros.

In order to protect against exchange rate movements, the Group has entered into forward exchange contracts to purchase
Euros. These contracts are hedging highly probable forecasted transactions and are timed to mature when payments are
scheduled to be made. The forward exchange contracts are considered to be fully effective cash flow hedges and any gain or
loss on the contracts is taken directly to equity.

The Group’s exposure to foreign exchange rate risk at reporting date, expressed in Australian dollars, was $0.299 million (2018:
$0.137 million) and the forward exchange contracts had a fair value of $0.018 million payable (2018: $0.085 million payable).

Sensitivity
Movements in the Australian dollar against the Euro would not result in a material difference to the balances stated in the
consolidated statements of changes in equity and comprehensive income.

68 BOOM LOGISTICS ANNUAL REPORT 2019

BOOM LOGISTICS LIMITED
A.B.N. 28 095 466 961

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

12. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk (continued)
Recognition and measurement
Derivatives designated as hedging instruments are classified as cash flow hedges.

At the inception of each hedging transaction, the Group documents the relationship between the hedging instruments and
hedged items, its risk management objectives and its strategy for undertaking the hedge transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in
hedging transactions have been and will continue to be highly effective in offsetting changes in fair value or cash flows of
hedged items.

The effective portion of changes in the fair value of the derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income and accumulated in the cash flow hedge reserve in equity. The gain or loss relating
to the ineffective portion is recognised immediately in profit or loss.

The Group does not speculate in the trading of derivative instruments.

Derivatives are carried at fair value and categorised as level 2 in the fair value hierarchy under AASB 13 where “inputs other than
quoted prices in active markets that are observable for the asset either directly or indirectly”.

13. CONTRIBUTED EQUITY

Note 2019 2018
No. of No. of
shares $’000 shares $’000

(a) Issued and paid up capital

Beginning of the financial year 474,868,764 318,065 474,868,764 318,065
Shares bought back on-market and cancelled (i) (35,674,964) (5,978) - -
Buy-back transaction costs - (44) - -
Tax credits recognised directly in equity - 14 - -

End of the financial year 439,193,800 312,057 474,868,764 318,065

(i) During the financial year, Boom purchased and cancelled 35,674,964 ordinary shares as a result of the following share
buy-back schemes. The total cost, including transaction costs, was $6,022,000. These costs were deducted from
contributed equity.

• Minimum share holding buy-back of 1,094,557 ordinary shares priced at $0.22 per share. This share buy-back
scheme has been completed.

• On market share buy-back of 34,580,407 ordinary shares priced between $0.15 and $0.19 per share. This share buy-
back scheme is currently on going and is expected to be completed by 5 December 2019 or earlier if the maximum
number of shares being 46 million shares is bought back prior to that date.

All issued shares are fully paid. Fully paid ordinary shares carry one vote per share and carry the right to dividends.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION C: FUNDING STRUCTURES (CONTINUED)

13. CONTRIBUTED EQUITY (CONTINUED)
(b) Capital Management
For the purposes of capital management, capital includes issued capital and all other equity reserves attributable to the equity
holders of the parent. The primary objective of the Group’s capital management policy is to maximise shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants included in its agreements with financiers. Adjustments to the Group’s capital structure
can be made subject to meeting the restrictions included in the Group’s financing agreements. These require the Group to
maintain the ratio of gross debt to trading EBITDA at less than 2.5 times with the aggregate total of distributions not exceeding
$15 million over the term of the facilities (to January 2022). Further, the total value of dividends paid in any financial year must
not exceed 50% of the net profit after tax earned in the prior financial year.

The Group monitors capital on the basis of the balance sheet gearing ratio. This ratio is calculated as net debt divided by total
equity. At 30 June 2019, the Group’s balance sheet gearing ratio was 27% (2018: 25%). The Group’s policy is to maintain a
gearing ratio of between 20%-30%.

The Group’s capital management, amongst other things, aims to ensure that it meets its financial covenants. The Group will
also manage its capital structure through returns to shareholders, as economic conditions and trading results improve.

SECTION D: OTHER DISCLOSURES

This section provides additional financial information that is required by the Australian Accounting Standards and management
considers relevant for shareholders.

14. SUBSIDIARIES
Name Country of Equity interest
incorporation 2019 2018
% %

AKN Pty Ltd Australia 100 100

Sherrin Hire Pty Ltd Australia 100 100
Shutdown Staffing Pty Ltd Australia 100 100
Boom Logistics (VIC) Pty Ltd Australia 100 100
Boom Logistics Limited is the ultimate parent company.

Recognition and measurement

The consolidated financial statements comprise the financial statements of Boom Logistics Limited and its subsidiaries as at
30 June each year.

Subsidiaries are entities controlled by the Group. Control exists 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. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies
adopted by the Group.

In the parent company financial statements, investments in subsidiaries are carried at cost less impairments.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group.

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

15. DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations Instrument 2016/785 (“Corporations Instrument”), the wholly owned subsidiaries listed below are
relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and Directors’ report.

It is a condition of the Corporations Instrument that Boom Logistics Limited and each of the subsidiaries enter into a Deed of Cross
Guarantee. The effect of the Deed is that Boom Logistics Limited guarantees to each creditor payment in full of any debt in the event
of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. The subsidiaries have also given similar
guarantees in the event that Boom Logistics Limited is wound up.

The subsidiaries subject to the Deed are:

• Sherrin Hire Pty Ltd (party to the Deed on 6 December 2005);
• AKN Pty Ltd (party to the Deed on 3 November 2006 by virtue of a Deed of Assumption);
• Shutdown Staffing Pty Ltd (party to the Deed on 23 November 2007 by virtue of a Deed of Assumption);

and together with Boom Logistics Limited, represent a “Closed Group” for the purposes of the Corporations Instrument.

The consolidated statement of comprehensive income and balance sheet of the entities that are members of the “Closed Group” are
as follows:
CLOSED GROUP
2019 2018
$’000 $’000

Consolidated Statement of Comprehensive Income

Revenue 170,980 170,210

Other income 4,242 162

Salaries and employee benefits expense (88,391) (86,051)
Equipment service and supplies expense (42,374) (46,512)
Operating lease expense (11,750) (6,235)
Other expenses (15,351) (11,584)
Restructuring expense (1,117) (370)
Depreciation and amortisation expense (16,573) (17,068)
Impairment expense (1,975) -
Financing expenses (4,251) (4,447)

Loss before income tax (6,560) (1,895)

Income tax benefit 164 138

Net loss for the year (6,396) (1,757)

Other comprehensive loss

Cash flow hedges recognised in equity (17) (60)

Other comprehensive loss for the year, net of tax (17) (60)

Total comprehensive loss for the year (6,413) (1,817)

Retained losses at the beginning of the year (185,114) (183,357)

Adjustment on initial application of AASB 9 (400) -

Retained losses at the end of the year (191,910) (185,114)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

15. DEED OF CROSS GUARANTEE (CONTINUED)
CLOSED GROUP
2019 2018
$’000 $’000

Consolidated Statement of Financial Position

Current assets
Cash and cash equivalents 1,435 1,659
Trade and other receivables 34,111 35,524
Inventories, prepayments and other current assets 5,282 1,875
Assets classified as held for sale 250 151
Income tax receivable 4,450 4,450

Total current assets 45,528 43,659

Non-current assets
Investments 599 599
Deferred tax asset 5,350 5,165
Property, plant and equipment 145,585 160,198

Total non-current assets 151,534 165,962

Total assets 197,062 209,621

Current liabilities
Trade and other payables 13,515 14,131
Interest bearing loans and borrowings 5,167 3,131
Employee provisions 7,214 8,222
Other provisions and liabilities 4,404 4,785

Total current liabilities 30,300 30,269

Non-current liabilities
Payables 10,736 7,967
Interest bearing loans and borrowings 32,709 35,443
Employee provisions 300 253
Other provisions and liabilities 344 657
Derivative financial instruments 110 85

Total non-current liabilities 44,199 44,405

Total liabilities 74,499 74,674

Net assets 122,563 134,947

Equity
Contributed equity 312,057 318,065
Retained losses (191,910) (185,114)
Reserves 2,416 1,996

Total equity 122,563 134,947

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

16. PARENT ENTITY
The individual financial statements for the parent entity show the following aggregate amounts:
2019 2018
$’000 $’000

Statement of financial position

Current assets 40,772 39,171

Total assets 231,430 244,142

Current liabilities 28,075 28,682

Total liabilities 127,450 123,359

Equity
Contributed equity 312,057 318,065
Reserves 2,416 1,996
Retained losses (210,493) (199,278)

Total equity 103,980 120,783

Net loss after tax for the year (10,815) (4,698)

Total comprehensive loss for the year (10,832) (4,758)

17. KEY MANAGEMENT PERSONNEL

Summary of key management personnel compensation in the following categories is as follows:

2019 2018
$ $

Short-term employee benefits 1,635,801 2,077,050

Post employment benefits 140,621 144,784
Other long term benefits 42,316 8,231
Retirement benefits 675,000 -
Share based payments (2,221) 884,909

Total compensation 2,491,517 3,114,974

Refer to the Remuneration Report in the Directors’ Report for detailed compensation disclosure on key management personnel.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

18. SHARE-BASED PAYMENTS

Three employee incentive schemes are in place to assist in attracting, retaining and motivating key employees as follows:
• Salary sacrifice rights plan;
• Short term incentive plan; and
• Long term incentive plan.

Information with respect to the number of rights and options allocated under the employee incentive schemes are as follows:

Salary Sacrifice Short Term Incentive Plan Long Term Incentive Plan
Rights Plan
Average
Average fair Average fair exercise
value per No. of value per No. of price per No. of
right rights right rights option options

At start of period $0.1326 2,464,267 $0.1008 1,313,227 $0.1483 28,636,852

Granted during the period $0.1971 1,128,387 $0.2192 2,397,878 $0.1643 10,728,789
Exercised during the period $0.1583 (2,720,432) $0.1767 (1,286,680) - -
Lapsed during the period - - - - $0.1080 (16,486,178)
Forfeited during the period - - - - $0.1748 (4,048,970)

At end of period $0.1358 872,222 $0.1776 2,424,425 $0.1869 18,830,493

Salary sacrifice rights plan

Eligible executives will be permitted to salary sacrifice a portion of their pre-tax fixed annual remuneration to acquire equity in the form
of rights to fully paid ordinary shares in the Company.

Each right is a right to acquire one ordinary share in the Company. The exact number of rights to be granted is based on the amount
of salary sacrificed and the 5 day volume weighted average price prior each month. Rights do not carry any dividend or voting rights.
Rights will be granted twice a year following the announcement of the half-year and full-year results or in any event, within twelve
months of the Annual General Meeting (“AGM”). Rights will have a twelve month exercise restriction commencing from the relevant
grant dates. The rights to ordinary shares equivalent to the amount salary sacrificed in the period from the most recent grant date will
be granted following the announcement of the full-year results.

Short term incentive plan

Eligible executives will have the opportunity to receive short term incentives subject to meeting performance hurdles over the financial
year. 50% of the STIP outcome achieved for the financial year will be delivered in cash and 50% will be delivered in equity in the form
of rights to ordinary shares in the Company.

Each right is a right to acquire one ordinary share in the Company. The exact number of rights to be granted is based on 50% of
the STIP outcome divided by the 5 day volume weighted average price after the release of full year results. Rights do not carry any
dividend or voting rights. Rights will be granted following the announcement of the full-year results or in any event, within twelve
months of the AGM. Rights will have a six month exercise restriction commencing from the grant date.

Long term incentive plan

Eligible executives will be granted options to acquire ordinary shares in the Company, subject to performance hurdles and some or all
may vest at the end of the three year period if the performance hurdles are met.

Each option is a right to acquire one ordinary share in the Company (or an equivalent cash amount) subject to payment of the exercise
price. The exact number of options to be granted will be the LTIP award divided by the option valuation using a Binomial valuation
methodology prior to grant date. The option exercise price is calculated based on the 5 day volume weighted average price prior to
the grant date. Options do not carry any dividend or voting rights. Options will be granted within twelve months of the Annual General
Meeting. Options are subject to a performance hurdle based on absolute Earnings Per Share (“EPS”), which is measured over a three
year performance period. An absolute EPS hurdle must be achieved at the end of year three for any options to vest. The Board of
Directors retains a discretion to adjust the EPS hurdle as required to ensure plan participants are neither advantaged nor disadvantaged
by matters outside management’s control that materially affect absolute EPS (for example, by excluding one-off non-recurrent items or the
impact of significant acquisitions or disposals).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

18. SHARE-BASED PAYMENTS (CONTINUED)

Long term incentive plan (continued)

Options granted have the following details and assumptions:

2019 2018 2017

Grant date 28 November 2018 30 November 2017 4 November 2016
Vesting date 31 August 2021 31 August 2020 31 August 2019
Expiry date 30 September 2021 30 September 2020 4 September 2019
Share price at grant date $0.165 $0.200 $0.115
Fair value at grant date $0.062 $0.070 $0.045
Exercise price $0.164 $0.212 $0.108
Expected life 2.8 years 2.8 years 2.8 years
Expected price volatility of Boom’s shares 55% 55% 55%
Risk-free interest rate 2.07% 1.87% 1.66%
Expected dividend yield 0% 0% 0%

(a) Carrying values

Note 2019 2018
$’000 $’000

Salary Sacrifice Rights Plan 600 425

Short Term Incentive Plan 721 196
Long Term Incentive Plan 1,172 1,435

Total employee equity benefits reserve 2,493 2,056

(b) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the financial year are as follows:

Shares issued under previous employee share schemes - (14)

Rights issued under employee rights plans 700 461
Options issued under employee option plan (263) 486

9 437 933

(c) Legacy employee incentive schemes

Two existing legacy employee incentive schemes are still in place but have been discontinued with only the ordinary shares
vested in previous financial years remaining in the share plans.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

18. SHARE-BASED PAYMENTS (CONTINUED)

(d) Employee share plan share holdings
Information with respect to the number of ordinary shares issued and allocated under the employee share plans is as follows:

2019 2018
Number of Number of
shares shares

At start of period 6,196,367 10,287,439

– issued for nil consideration (including unallocated shares in the employee
share schemes allocated during the year) 3,615,352 339,573
– sold / transferred during the year (3,186,957) (759,593)
– lapsed during the year (4,655,631) (3,671,052)

At end of period 1,969,131 6,196,367

Recognition and measurement

The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they are
granted using an appropriate valuation model.

In valuing equity settled transactions, the performance conditions are all non-market measures and as such, are not taken into
account in determining the fair values of the options.

The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the
award (the vesting period).

No expense is recognised for awards that do not ultimately vest.

19. CONTINGENCIES
Contingent liabilities
Performance guarantees totalling $3.436 million have been provided in relation to wind farm construction projects of which $2.700
million will expire within a year and the remainder by 1 May 2022. In addition, other bank guarantees totalling $4.040 million have
been provided to landlords and work cover authority. There are no other contingent liabilities identified at reporting date.

2019 2018
$ $

20. AUDITOR’S REMUNERATION

During the year the following fees were paid or payable for services provided by KPMG Australia:
Audit services
– audit and review of financial statements 287,546 200,131
Taxation, due diligence and other services
– taxation services 82,778 24,857
Total remuneration of KPMG Australia 370,324 224,988

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

21. SUBSEQUENT EVENTS

The Directors are not aware of any other matter or circumstance that has arisen since 30 June 2019 that has significantly affected or
may significantly affect the operations of the Group in subsequent financial years, the results of those operations or the state of affairs
of the Group in future financial years.

22. NEW ACCOUNTING POLICIES AND STANDARDS

(a) Changes in accounting policies
The principal accounting policies adopted in the preparation of the financial report are consistent with those of the previous
financial year, except for the adoption of the new accounting standards AASB 15 Revenue from Contracts with Customers
and AASB 9 Financial Instruments. The nature and effect of these new accounting standards are disclosed below.

Standards AASB 15 Revenue from Contracts with Customers

Nature of change AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue
is recognised. It replaces existing revenue recognition guidance, including AASB 118 Revenue, AABS 111
Construction Contracts and IFRIC 13 Customer Loyalty Programmes. It provides a five step model that
applies to all customer contracts and it aims to better reflect the consideration that an entity expects to
receive from customers in exchange for its goods and services.

The new standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer.
Effective date Mandatory for financial years commencing on or after 1 January 2018.

The Group elected to use the modified retrospective approach in adopting the new standard which
means that the cumulative impact has been recognised in retained earnings as of 1 July 2018 for
customer contracts that were not completed at the date of initial application and that comparatives have
not been restated.
Impact Rendering of services
Pre AASB 15, revenue from the hire of lifting/access equipment, labour and other services provided was
recognised where the right to be compensated for the services could be reliably measured. This typically
occurs when the job dockets or timecards were approved by the customers. If the services under a single
arrangement were rendered in different reporting periods, then the consideration was allocated on a
relative fair value basis.

Construction contracts
Pre AASB 15, revenue from the installation of wind towers was recognised by reference to the stage of
completion. The stage of completion was measured by reference to the wind tower units completed to
date as a percentage of the total wind tower units under the contract. When the contract outcome cannot
be measured reliably, revenue was recognised only to the extent that the expenses incurred are eligible to
be recovered.

Under AASB 15, the total consideration in the services above is allocated based on their stand-alone
selling prices. The stand-alone selling prices are determined based on the list prices at which the Group
sells the services in separate transactions.

Based on the Group’s assessment, the fair value and the stand-alone selling prices of both types of
services above are broadly similar. Consequently, at the date of initial application, there were no significant
differences in the timing of revenue recognition for these services which required the restatement of
opening retained earnings as of 1 July 2018.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

22. NEW ACCOUNTING POLICIES AND STANDARDS (CONTINUED)

(a) Changes in accounting policies (continued)

Standards AASB 9 Financial Instruments

Nature of change AASB 9 replaces the existing guidance in AASB 139 Financial Instruments: Recognition and
Measurement. AASB 9 includes revised guidance on the classification and measurement of financial
instruments, including a new expected credit loss model for calculating impairment on financial assets,
and the new general hedge accounting requirements. It also carries forward the guidance on recognition
and de-recognition of financial instruments from AASB 139.
Effective date Mandatory for financial years commencing on or after 1 January 2018.

The Group elected to use the modified retrospective approach in adopting the new standard which
means that the cumulative impact has been recognised in retained earnings as of 1 July 2018 and that
comparatives have not been restated.
Impact Impairment
The new standard did not have a significant impact on the classification and measurement of the Group’s
financial assets with the exception of impairment losses on trade receivables and contract assets. The
new standard replaces the incurred loss approach with a forward looking expected credit loss (“ECL”)
approach in measuring impairment losses.

The Group has applied the simplified approach and recorded lifetime expected losses on all trade
receivables and contract assets.

The Group established a provision matrix based on the historical credit loss experience and adjusted for
forward looking factors specific to the debtors and the economic environment. The Group considers trade
receivables and contract assets are in default when contractual payments are 90 days past due, subject
to other internal or external information that indicate otherwise.

Based on the assessments undertaken, the impairment losses on trade receivables increased by
$0.4 million and opening retained earnings as of 1 July 2018 was restated as such.

Hedge accounting
The new hedge accounting rules will align the accounting for hedging instruments more closely with the
Group’s risk management practices. As a general rule, more hedge relationships might be eligible for
hedge accounting, as the standard introduces a more principles-based approach.

At the date of initial application, all the Group’s existing hedging relationships were eligible to be treated as
continuing hedging relationships. Consistent with prior periods, the Group has continued to designate the
change in fair values of the entire forward contracts in the Group’s cash flow hedge relationships and, as
such, the adoption of the new hedge accounting rules had no significant impact on the Group’s financial
statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended 30 June 2019

SECTION D: OTHER DISCLOSURES (CONTINUED)

22. NEW ACCOUNTING POLICIES AND STANDARDS (CONTINUED)

(b) New accounting standards and interpretations not yet adopted
The following standards, amendments to standards and interpretations have been identified as those which may impact
the Group in the period of initial application. They are not yet effective and not adopted by the Group in preparing this
financial report.

New standards AASB 16 Leases

Nature of change The standard removes the classification of leases as either operating leases or finance leases for the
lessee, effectively treating all leases as finance leases. This will effectively move all off-balance sheet
operating leases onto the balance sheet that is similar to current finance lease accounting.
Effective date Mandatory for financial years commencing on or after 1 January 2019.

The Group intends to adopt the standard using the modified retrospective (option 2) approach which
means that the cumulative impact of the adoption will be recognised in retained earnings as of 1 July
2019 and that comparatives will not be restated.
Impact The Group has completed a preliminary assessment of the potential impact on the consolidated financial
statements resulting from the application of AASB 16 with respect to existing operating leases for
continuing operations as a lessee.

The standard will have an impact on key financial measures such as EBITDA, EBIT and net assets, due
to the standard replacing straight line operating lease expenses with a depreciation charge for the lease
asset and interest expense for the lease liability.

The actual impact of applying AASB 16 on the financial statements in the period of initial application
will depend on future economic conditions, including the Group’s borrowing rate at 1 July 2019, the
composition of the Group’s operating lease portfolio at that date, the Group’s latest assessment of
whether it will exercise any lease renewal options and the extent to which the Group chooses to use
practical expedients and recognition exemptions.

Based on the information currently available at reporting date, the Group estimates the impact of AASB 16
adoption at 1 July 2019 as follows:
• Right-of-Use asset of approximately $26.8 million;
• Lease liabilities of approximately $23.9 million;
• Make good provision and prepaid setup cost adjustment of approximately $2.9 million.

From a lessor perspective, the Group notes that there may be an impact from possible newly identified
embedded leases within contracts under AASB 16 and is working through the impact assessment.

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DIRECTORS’ DECLARATION

1. In the opinion of the Directors of Boom Logistics Limited (“the Company”):

(a) the Consolidated Financial Statements and notes that are set out on pages 46 to 79, and the Remuneration Report in the
Directors’ Report, set out on pages 31 to 43, are 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 2019 and of its performance for the
financial year ended on that date; and

(ii) complying with Accounting Standards, (including the Australian Accounting Interpretations) and Corporations Regulations
2001; and

(b) 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 draw attention to page 50 to the Consolidated Financial Statements which includes a statement of compliance with
International Financial Reporting Standards.

3. There are reasonable grounds to believe that the Company and the group entities identified in note 14 will be able to meet any
obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the
Company and those group entities pursuant to ASIC Corporations Instrument 2016/785.

4. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive
officer and chief financial officer for the financial year ended 30 June 2019.

Signed in accordance with a resolution of the Directors:

Maxwell Findlay Tony Spassopoulos

Chairman Managing Director

Melbourne, 21 August 2019

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BOOM LOGISTICS LIMITED This is the original version of the audit report over the financial statements signed by the
directors on 21 August 2019. Page references should be read as follows to reflect the correct
A.B.N. 28 095 466 961 references now that the financial statements have been presented in the context of the annual
report in its entirety: page references with respect to our Report on the Remuneration Report
as set out in the Directors’ report, should be updated to read pages 31 to 43.

 
 

Independent Auditor’s Report

 

To the shareholders of Boom Logistics Limited

Report on the audit of the Financial Report 

Opinion

We have audited the Financial Report of The Financial Report comprises:

Boom Logistics Limited (the Company).
 Consolidated statement of financial position as at 30
In our opinion, the accompanying June 2019
Financial Report of the Company is in  Consolidated statement of comprehensive income,
accordance with the Corporations Act Consolidated statement of changes in equity, and
2001, including: Consolidated statement of cash flows for the year then
 giving a true and fair view of the ended
Group's financial position as at 30  Notes including a summary of significant accounting
June 2019 and of its financial policies
performance for the year ended on  Directors' Declaration.
that date; and
The Group consists of the Company and the entities it
 complying with Australian Accounting controlled at the year-end or from time to time during the
Standards and the Corporations financial year.
Regulations 2001.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our
audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on this matter.
 

  KPMG, an Australian partnership and a member firm of the KPMG

network of independent member firms affiliated with KPMG Liability limited by a scheme approved under
International Cooperative (“KPMG International”), a Swiss entity. Professional Standards Legislation.

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Other Information

Other Information is financial and non-financial information in Boom Logistics Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

The Directors are responsible for:

 preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
 implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error
 assessing the Group and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

 to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
 to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.
This description forms part of our Auditor’s Report.

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ASX ADDITIONAL INFORMATION

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 19 August 2019.

(a) Distribution of Equity Securities

The number of shareholders, by size of holding, in each class of share are:
Ordinary shares
Number of Number of
holders shares

1 - 1,000 250 47,706

1,001 - 5,000 761 2,656,723
5,001 - 10,000 610 4,799,757
10,001 - 100,000 1,331 47,354,798
100,001 and over 351 384,334,816

3,303 439,193,800
The number of shareholders holding less than a marketable parcel of
shares are: 597 923,523

(b) Twenty Largest Shareholders

The names of the twenty largest holders of quoted shares are:
Listed ordinary shares
Percentage
Number of of ordinary
shares shares

1 HSBC Custody Nominees (Australia) Limited 53,516,551 12.2%

2 J P Morgan Nominees Australia Pty Limited 47,540,775 10.8%
3 National Nominees Limited 38,312,525 8.7%
4 BNP Paribas Noms (NZ) Ltd <drp> 26,205,598 6.0%
5 BNP Paribas Nominees Pty Ltd <ib au Noms Retailclient drp> 20,720,376 4.7%
6 Grove Investment Group Pty Ltd 8,680,889 2.0%
7 BNP Paribas Nominees Pty Ltd <Agency Lending drp a/c> 6,509,034 1.5%
8 Horrie Pty Ltd <Horrie Superannuation a/c> 5,769,505 1.3%
9 CPU Share Plans Pty Ltd <BOL Exec Rem Plan a/c> 5,482,774 1.2%
10 Horrie Pty Ltd <Horrie Superannuation a/c> 5,000,000 1.1%
11 Hillmorton Custodians Pty Ltd <The Lennox Unit a/c> 4,594,776 1.0%
12 Kismar Pty Ltd <The M Kisirwani Fam a/c> 4,000,000 0.9%
13 Gwynvill Trading Pty Ltd 3,965,411 0.9%
14 Morgan Stanley Australia Securities (Nominee) Pty Limited <no 1 account> 3,758,286 0.9%
15 Taverners No 11 Pty Ltd <Stoneyville Invest Unit a/c> 3,221,007 0.7%
16 Luton Pty Ltd 2,837,005 0.6%
17 Neweconomy Com Au Nominees Ptd Limited <900 Account> 2,818,068 0.6%
18 S I J Nominees Pty Ltd <The S I J Partnership a/c> 2,800,253 0.6%
19 Citicorp Nominees Pty Limited 2,794,782 0.6%
20 Stoneyville Pty Ltd <Peter Scanlon Family SF a/c> 2,760,559 0.6%

Top twenty shareholders 251,288,174 57.2%

Remainder 187,905,626 42.8%

Total 439,193,800 100.0%

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ASX ADDITIONAL INFORMATION (continued)

(c) Substantial Holders

Substantial holders in the Company are set out below:
Listed ordinary shares
Percentage
Number of of ordinary
shares shares

Rorema Beheer B.V. 35,380,332 8.1%

Greig & Harrison Pty Ltd 33,823,181 7.7%
Paradice Investment Management Pty Ltd 33,395,384 7.6%
Castle Point Funds Management 26,476,306 6.0%
Forager Funds Management Pty Ltd 22,543,977 5.1%

(d) Voting Rights

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

(e) Unquoted Securities

There are 3,296,647 rights granted under the Executive Remuneration Plan outstanding held by 23 holders.
There are 18,830,493 options granted under the Executive Remuneration Plan outstanding held by 10 holders.

86 BOOM LOGISTICS ANNUAL REPORT 2019

 Suite B Level 1, 55 Southbank Boulevard
SOUTHBANK VIC 3006
Telephone (03) 9207 2500
Fax (03) 9207 2400
www.boomlogistics.com.au

90 BOOM LOGISTICS ANNUAL REPORT 2019