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Lead Auditor's Independence Declaration Under Section 307C of the Corporations Act 2001

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Lead Auditor's Independence Declaration Under Section 307C of the Corporations Act 2001 LEAD AUDITOR’S INDEPENDENCE DECLARATION UNR DE SECTION 307C OF THE CORPORATIONS ACT 2001 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Orica Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Orica Limited for the financial year ended 30 September 2018 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 Penny Stragalinos Partner Melbourne 1 November 2018 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. 58 ORICA A NNUAL REPORT 2018 INCOME STATEMENT FRO THE YEAR ENDED 30 SEPTEMBER Consolidated 2018 2017 Notes $m $m Sales revenue (1) 5,373.8 5,039.2 Other income (1) 37.5 51.8 Expenses Raw materials and inventories (2,453.9) (2,229.1) Employee benefits expense (1,184.7) (1,051.1) Depreciation and amortisation expense (1) (266.9) (261.2) Purchased services (323.6) (348.0) Repairs and maintenance (155.9) (160.9) Impairment expense (9) (225.4) (0.1) Botany environmental provision expense (6) (114.7) – Outgoing freight (280.9) (272.8) Lease payments – operating leases (69.6) (46.1) Other expenses (117.6) (123.2) Share of net profit of associates accounted for using the equity method (14) 24.7 36.6 Total (5,168.5) (4,455.9) Profit from operations 242.8 635.1 Net financing costs Financial income 56.0 28.2 Financial expenses (177.3) (99.9) Net financing costs (121.3) (71.7) Profit before income tax expense 121.5 563.4 Income tax expense (11) (156.0) (164.0) Net (loss)/profit for the year (34.5) 399.4 Net (loss)/profit for the year attributable to: Shareholders of Orica Limited (48.1) 386.2 Non-controlling interests 13.6 13.2 Net (loss)/profit for the year (34.5) 399.4 cents cents Earnings per share Earnings per share attributable to ordinary shareholders of Orica Limited: Basic earnings per share (2) (12.7) 102.7 Diluted earnings per share (2) (12.7) 102.0 The Income Statement is to be read in conjunction with the accompanying notes to the financial statements. A NNUAL REPORT 2018 ORICA 59 STATEMENT OF COMPREHENSIVE INCOME FRO THE YEAR ENDED 30 SEPTEMBER Consolidated 2018 2017 Notes $m $m Net (loss)/profit for the year (34.5) 399.4 Other comprehensive income Items that may be reclassified subsequently to Income Statement: Exchange differences on translation of foreign operations Exchange gain on translation of foreign operations (11c) 208.2 12.1 Net gain/(loss) on hedge of net investments in foreign subsidiaries, net of tax (11c) (57.1) (118.0) Net exchange differences on translation of foreign operations 151.1 (105.9) Sundry items: Net cash flow hedges (11c) 24.3 13.8 Items that will not be reclassified subsequently to Income Statement: Net actuarial gain, net of tax (11c) 2.0 23.4 Other comprehensive income/(loss) for the period 177.4 (68.7) Total comprehensive income for the period 142.9 330.7 Attributable to: Shareholders of Orica Limited 139.9 322.1 Non-controlling interests 3.0 8.6 Total comprehensive income for the period 142.9 330.7 The Statement of Comprehensive Income is to be read in conjunction with the accompanying notes to the financial statements. 60 ORICA A NNUAL REPORT 2018 BALANCE SHEET AS AT 30 SEPTEMBER Consolidated 2018 2017 Notes $m $m Current assets Cash and cash equivalents (3b) 514.6 516.9 Trade receivables (5) 654.7 607.3 Other receivables 93.4 58.4 Inventories (5) 626.5 538.4 Other assets 71.1 63.8 Total current assets 1,960.3 1,784.8 Non-current assets Other receivables 82.7 97.6 Investments accounted for using the equity method (14) 213.3 184.6 Property, plant and equipment (7) 2,866.2 2,741.5 Intangible assets (8) 1,697.9 1,577.1 Deferred tax assets (11d) 268.7 323.1 Other assets 75.3 76.5 Total non-current assets 5,204.1 5,000.4 Total assets 7,164.4 6,785.2 Current liabilities Trade payables (5) 862.2 795.5 Other payables 336.7 264.3 Interest bearing liabilities (3a) 158.3 24.3 Provisions (6) 193.2 187.9 Other liabilities 61.0 25.3 Total current liabilities 1,611.4 1,297.3 Non-current liabilities Other payables 6.1 3.9 Interest bearing liabilities (3a) 2,004.6 1,933.5 Provisions (6) 485.8 397.3 Deferred tax liabilities (11d) 74.7 88.5 Other liabilities 13.8 101.2 Total non-current liabilities 2,585.0 2,524.4 Total liabilities 4,196.4 3,821.7 Net assets 2,968.0 2,963.5 Equity Ordinary shares (4a) 2,110.1 2,068.5 Reserves (439.2) (565.8) Retained earnings 1,232.3 1,459.6 Total equity attributable to ordinary shareholders of Orica Limited 2,903.2 2,962.3 Non-controlling interests (13) 64.8 1.2 Total equity 2,968.0 2,963.5 The Balance Sheet is to be read in conjunction with the accompanying notes to the financial statements. A NNUAL REPORT 2018 ORICA 61 STATEMENT OF CHANGES IN EQUITY FRO THE YEAR ENDED 30 SEPTEMBER Foreign currency Cash flow Non- Ordinary Retained translation hedge Other controlling shares earnings reserve reserve reserves Total interests Total equity $m $m $m $m $m $m $m $m 2017 Balance at 1 October 2016 2,025.3 1,247.1 (341.3) (62.9) (85.7) 2,782.5 0.7 2,783.2 Profit for the year – 386.2 – – – 386.2 13.2 399.4 Other comprehensive loss – 23.4 (101.3) 13.8 – (64.1) (4.6) (68.7) Total comprehensive income for the year – 409.6 (101.3) 13.8 – 322.1 8.6 330.7 Transactions with owners, recorded directly in equity Total changes in contributed equity 43.2 – – – – 43.2 – 43.2 Share-based payments expense – – – – 11.6 11.6 – 11.6 Divestment of non-controlling interests – – – – – – (0.3) (0.3) Dividends/distributions – (197.1) – – – (197.1) – (197.1) Dividends declared/paid to non-controlling interests – – – – – – (7.8) (7.8) Balance at the end of the year 2,068.5 1,459.6 (442.6) (49.1) (74.1) 2,962.3 1.2 2,963.5 2018 Balance at 1 October 2017 2,068.5 1,459.6 (442.6) (49.1) (74.1) 2,962.3 1.2 2,963.5 Profit/(loss) for the year – (48.1) – – – (48.1) 13.6 (34.5) Other comprehensive income – 2.0 161.7 24.3 – 188.0 (10.6) 177.4 Total comprehensive income for the year – (46.1) 161.7 24.3 – 139.9 3.0 142.9 Transactions with owners, recorded directly in equity Total changes in contributed equity 41.6 – – – – 41.6 – 41.6 Share-based payments expense – – – – 14.8 14.8 – 14.8 Acquisition of non-controlling interests – – – – (74.2) (74.2) 74.2 – Dividends/distributions – (181.2) – – – (181.2) – (181.2) Dividends declared/paid to non-controlling interests – – – – – – (13.6) (13.6) Balance at the end of the year 2,110.1 1,232.3 (280.9) (24.8) (133.5) 2,903.2 64.8 2,968.0 The Statement of Changes in Equity is to be read in conjunction with the accompanying notes to the financial statements. 62 ORICA A NNUAL REPORT 2018 STATEMENT OF CASH FLOWS FRO THE YEAR ENDED 30 SEPTEMBER Consolidated 2018 2017 $m $m Inflows/ Inflows/ Notes (Outflows) (Outflows) Cash flows from operating activities Receipts from customers 5,914.2 5,512.8 Payments to suppliers and employees (5,168.1) (4,823.6) Interest received 56.9 28.2 Borrowing costs (171.9) (127.6) Dividends received 24.9 34.5 Other operating income received 28.0 31.2 Net income taxes paid (69.3) (189.1) Net cash flows from operating activities (3b) 614.7 466.4 Cash flows from investing activities Payments for property, plant and equipment (189.2) (248.0) Payments for intangibles (132.9) (57.9) Payments for investments (13.3) (0.5) Proceeds from sale of, and other advances in relation to, property, plant and equipment 36.2 37.3 Payments for purchase of businesses/controlled entities (15) (250.2) – Proceeds from sale of investments/businesses disposed – 17.9 Disposal costs from sale of businesses/controlled entities (2.6) (3.6) Net cash flows used in investing activities (552.0) (254.8) Cash flows from financing activities Proceeds from long-term borrowings 1,981.2 1,638.4 Repayment of long-term borrowings (1,881.1) (1,165.3) Net movement in short term financing (23.5) (309.5) Dividends paid – Orica ordinary shares (143.2) (157.9) Dividends paid – non-controlling interests (13.5) (7.1) Payments for finance leases (1.3) (1.5) Proceeds from issue of ordinary shares 0.6 0.6 Net cash used in financing activities (80.8) (2.3) Net (decrease)/increase in cash held (18.1) 209.3 Cash at the beginning of the year 516.9 316.2 Effects of exchange rate changes on cash 12.6 (8.6) Cash at the end of the year (3b) 511.4 516.9 The Statement of Cash Flows is to be read in conjunction with the accompanying notes to the financial statements.
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