Annual Report 2020
A2B Australia Limited
ABN 99 001 958 390
Contents
There when you need us
Operations overview
Letter from the Chairman
Letter from the CEO
Supporting our communities
Board of Directors
Operating and Financial Review
Corporate Governance Statement
Directors' Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Financial Statements
Shareholder Information
Corporate Directory
2
4
6
8
10
12
14
28
42
46
64
65
118
120
1
There
when you
need us
Prompt and
decisive Cash
Preservation
$38M
OPERATING CASH FLOW
$23.7M
NET CASH POSITION
Sanitisation
Services
at all our
locations
$10.8M
DIRECTLY SUPPORTING
INDUSTRY PARTICIPANTS
2
a2b Annual Report 2020
Driven by
technology
A2B’s deep knowledge and
experience of payments in the
personal transport industry
coupled with its proprietary
technologies create a strong
foundation to deliver class leading
solutions on a global scale.
Innovation
that solves
transport
problems
In creating solutions our
technologists focus on user
centric techniques to clearly
understand and define what
works best for our customers.
Looking
ahead
A2B is broadening its
revenue streams, focusing
on the growth of its mobility
platform and extending its
payments capabilities beyond
the mobility sector.
3
NORTHERN
NORTHERN
TERRITORY
TERRITORY
QUEENSLAND
QUEENSLAND
WESTERN
WESTERN
AUSTRALIA
AUSTRALIA
SOUTH
SOUTH
AUSTRALIA
AUSTRALIA
NEWNEW
SOUTH
SOUTH
WALESWALES
AUSTRALIAN
AUSTRALIAN
CAPITAL
CAPITAL
TERRITORY
TERRITORY
TASMANIA
TASMANIA
NORTHERN
NORTHERN
TERRITORY
TERRITORY
QUEENSLAND
QUEENSLAND
WESTERN
WESTERN
AUSTRALIA
AUSTRALIA
SOUTH
SOUTH
AUSTRALIA
AUSTRALIA
Operations
overview
NEWNEW
SOUTH
SOUTH
WALESWALES
AUSTRALIAN
AUSTRALIAN
CAPITAL
CAPITAL
TERRITORY
TERRITORY
TASMANIA
TASMANIA
A2B is working closely with
clients to create customised
solutions across the globe.
MTI
MTI
MTI
KEY
Network
EFT EFT Solutions
MTI MTI
4
a2b Annual Report 2020
NORTHERN
TERRITORY
QUEENSLAND
WESTERN
AUSTRALIA
SOUTH
AUSTRALIA
NEW
SOUTH
WALES
MTI
EFT
MTI
EFT
AUSTRALIAN
CAPITAL
TERRITORY
TASMANIA
NORTHERN
TERRITORY
QUEENSLAND
WESTERN
AUSTRALIA
SOUTH
AUSTRALIA
NEW
SOUTH
WALES
MTI
EFT
MTI
EFT
AUSTRALIAN
CAPITAL
TERRITORY
TASMANIA
NORTHERN
NORTHERN
TERRITORY
TERRITORY
QUEENSLAND
QUEENSLAND
WESTERN
WESTERN
AUSTRALIA
AUSTRALIA
SOUTH
SOUTH
AUSTRALIA
AUSTRALIA
NEWNEW
SOUTH
SOUTH
WALESWALES
AUSTRALIAN
AUSTRALIAN
CAPITAL
CAPITAL
TERRITORY
TERRITORY
TASMANIA
TASMANIA
7
17
COUNTRIES
NEW REGIONS
36,000+
PAYMENT TERMINALS
19
OFFICES
5,000+
40,000+
NEW DRIVERS JOINED
13CABS DRIVERS
NORTHERN
TERRITORY
QUEENSLAND
WESTERN
AUSTRALIA
SOUTH
AUSTRALIA
NEW
SOUTH
WALES
MTI
EFT
MTI
EFT
AUSTRALIAN
CAPITAL
TERRITORY
TASMANIA
5
Letter from
the Chairman
2020 has been a year that has tested the
resilience of all Australians. As a nation
we have stood together and answered the
challenges raised by devastating bushfires
and the coronavirus pandemic.
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a2b Annual Report 2020
At A2B when meeting challenges
we carefully consider the impact on
all our stakeholders – our employees,
Operators, Drivers, Passengers,
Customers, communities where
we deliver our essential services
and shareholders.
From the outset of the coronavirus
outbreak our strong balance sheet
together with management’s swift
and decisive actions to preserve cash
enabled the payment in April of an
interim dividend of 4 cents per share
to shareholders. In addition, not only
was the Company able to maintain
investment in growth opportunities
despite the tightening restrictions
throughout 2020 but we also
extended assistance through a range
of initiatives to Operators, Drivers,
Passengers and Customers. One
example is our partnership with the
NSW State Government to sanitise
the vehicles of all participants in the
personal transport sector regardless
of affiliation as well as emergency
services vehicles promoting the
safe transport of Passengers and
contributing to the containment of
the coronavirus pandemic. In all other
States we are providing sanitisation
services to our fleets at no cost
to Drivers and Operators.
We recognise the efforts of Drivers
especially those in Victoria who have
continued to offer essential, accessible,
dependable and equitable transport
services to our community. We are also
grateful of Government recognition
that these services are vital for
businesses and residents (particularly
those with disabilities) and support
their connection with and participation
in the life of their communities.
Our world class technology offerings
have encouraged the continued
growth of our national footprint
and defines an important part
of our competitive advantage and
difference. These offerings have
also been pivotal in extending our
international presence and are being
used by a growing number of product
and service providers in sectors
outside personal transport.
On the governance front A2B continued
to maintain its high standards
that have been a leading indicator
of the growth and maturity of the
business. The clarity and transparency
of our disclosures encouraged 99%
of shareholders to approve our 2019
remuneration report. As Chairman
of the Audit and Risk Committee,
Rick Millen has been central to the
improvements in our financial reporting
processes and practices. Rick has
decided to retire from the Board after
the conclusion of this year’s Annual
General Meeting. A2B extends its
sincere thanks to Rick for his insights,
experience and passion for this
Company and industry. We all wish
Rick every success and thank him for
his outstanding contributions to A2B.
After a rigorous search and selection
process that took into account the
Board’s skills and diversity matrix,
the challenges and opportunities
presented by our developing
technological sophistication, and our
growing organisational footprint in
local and international markets I am
pleased to welcome two outstanding
new Directors to the A2B Board.
David Grant joined the A2B Board
on 2 June 2020. David has held
various senior executive roles including
Group M&A Director at Goodman
Fielder Limited and Chief Financial
Officer of Iluka Resources Limited.
With broad financial and commercial
experience David will be invited to
Chair the Audit and Risk Committee
after Mr Millen’s retirement.
As an experienced Non-executive
Director David is currently on the
Boards of Event Hospitality and
Entertainment Limited, Retail Food
Group Limited and The Reject Shop
Limited. David has a Bachelor
of Commerce from the University
of NSW, is a graduate of the
Australian Institute of Company
Directors and a member of Chartered
Accountants Australia & New Zealand.
Jennifer Horrigan was appointed
as a Director on 11 September
2020. Jennifer brings 25 years’
experience across investment
banking, financial communications
and investor relations. Formerly the
Chief Operating Officer in Australia
of the independent investment bank
Greenhill & Co, Jennifer has extensive
experience in enterprise management,
including the supervision and
management of compliance,
HR and financial management.
Holding a Bachelor of Business (QUT),
Graduate Diploma in Applied Finance
(FINSIA) and Graduate Diploma in
Management (AGSM), Jennifer is also
a Non-executive Director of APN Funds
Management Limited, QV Equities,
Yarra Funds Management Limited
and is Chairman of Redkite (national
cancer charity supporting children
with cancer and their families).
At A2B not only are we are proudly
Australian but we are equally proud
of the essential services that we provide
to the community. We are confident
that we have the right mix of people,
skills, experience and technologies
to address the fluctuations in the level
of travel and economic activity as the
world and Governments respond to and
emerge from the COVID-19 pandemic.
As the pandemic unwinds, we expect
the resumption of long term growth
rates as the market and population
expands. For A2B this will mean
payment turnover returning to
growth and our affiliated fleet size
returning to around 10,000 vehicles.
A2B is continuing to innovate,
raise service standards, and refine
its approaches to generating
traditional and new revenue streams.
Through the focused investment in
scalable value-creating technologies
A2B is primed to provide best in
class fully integrated payments and
mobility offerings on a global scale.
On behalf of the Board, I would like
to thank the A2B team for their efforts
this year and our customers and
shareholders for their ongoing support.
Paul Oneile
Chairman
77
Letter from
the CEO
A2B began 2020 on an exciting
footing. After a sustained focus
on raising service standards A2B
was positioned to benefit from
strengthening offerings in the
personal transport sector.
Enhanced performance in the
personal transport sector helps
generate returns for our payments
business which has built a strong
position in the sector over many
years. A2B’s operating footprint,
scale and addressable markets are
benefitting from the success of Mobile
Technologies International adding
to its global client base, EFT Solutions
developing new payment initiatives,
and the 13cabs offering being
embraced by industry participants
throughout Australia.
The decision to increase our
investment in technology and brands
three years ago is generating results.
Following three years of growth,
revenue reached record levels
(pre-COVID-19). The key drivers
of growth during this period were
network subscriptions and, in recent
times, an increasingly compelling
Spotto handheld payment terminal.
Meanwhile the acquisitions of Gold
Coast Cabs and Mobile Technologies
International are performing ahead
8
a2b Annual Report 2020
of expectations. Tough decisions
to raise Driver service and vehicle
standards came with short term
costs but are now flowing through
to strengthening brand sentiment and
higher feedback scores on our services,
and ongoing innovations in the 13cabs
app are consistently generating a class
leading 4.8 star rating.
In March A2B commenced
a comprehensive response to the
emergence of COVID-19 in Australia.
Health and Safety was, and remains,
first and foremost. We supported
Passengers and Drivers with
professional sanitisation services
and COVID-19 safety procedures and
education. Our sanitisation services
quickly caught the eye of media
and in turn the NSW Government,
leading to an opportunity to win
tenders for sanitisation services
that we anticipate will carry
through into several months of FY21.
We accelerated our development
of no touch payments, progressing
to the point we can confidently
require all app bookings to include
payment information, removing the
need for physical payment at the
end of each trip. These technologies
are being extended to web and other
booking channels.
A2B provided substantial financial
support for Taxi Operators and
Drivers, ranging from significant price
support on affiliation fees, deferral
of loans, and reduced lease rates
for vehicles and for taxi licences.
We committed to these initiatives
with the purpose of emerging from
the pandemic with the strongest
possible customers and the broadest
possible customer base. A2B’s strong
balance sheet and the long term cash
generating ability of its businesses
facilitated our robust stance on
stakeholder support. Nevertheless,
our stakeholder support initiatives
come at the expense of short
term profits, and we acknowledge
and are grateful for Shareholders
who stand with us as we focus
on long term growth. We also
acknowledge the many taxi licence
holders who have in effect directly
subsidised Taxi Operators through
temporarily reduced licence lease
fees in Queensland, New South Wales
and South Australia.
A2B directly supports the provision
of essential services throughout
Australia and, via Mobile Technologies
International, throughout the
world. The response of our staff
to the challenges of recent months
was fantastic. The business was
able to respond – and quickly – to
a host of new and sudden customer
imperatives. Many staff willingly
accommodated changes to their work
environments as we established new
safety protocols, socially distanced,
split teams to ensure continuity,
and reset business priorities. Focus,
creativity and commitment enabled
our team to implement initiatives
that not only supported clients
through the pandemic but also set
the business up for long term success.
Massive improvements to end of trip
payment processes and a pivot
into deliveries, including the launch
of 13things, are highlights from this
challenging period.
A2B is set to emerge from the
pandemic with a healthier and
bigger business. We are continuing
to innovate and raise service
standards. New features such
as MyDriver – enabling Passengers
to nominate their preferred Drivers
at the time of booking – are gaining
traction and supporting the growth
of our network businesses around
Australia. Since the beginning of
FY20, a combination of new bureau
partnerships and direct market
entry initiated by local demand have
extended our network offering into
Tweed Heads, Hervey Bay, Mackay,
Airlie Beach, Lakes Entrance, Albury,
Wodonga, Perth, Dubbo, Tuncurry,
Forster, Taree, Laurieton, Goondiwindi,
Townsville, Charters Towers, Darwin,
Toowoomba, Apollo Bay, Wellington,
Mareeba, Mandurah, Geraldton
and Wollongong. Globally, Mobile
Technologies International launched
new technology for clients in the
USA, Canada, Denmark and Finland,
finding a way to overcome the
logistical challenges of COVID-19 and
undertake successful commissioning
of new systems.
We are also refining our approach
to how we generate revenue. While
period on period growth of Spotto
turnover reached 28% pre-COVID-19,
we made substantial progress in
transitioning to a recurring revenue
model with almost 4,000 payment
terminals now contracted to generate
rental income. In July we were
delighted to announce that Transport
for NSW selected A2B to deliver
a digital smartcard payment solution
to support the NSW Taxi Transport
Subsidy Scheme. This important
milestone reflects our digital payment
credentials and mirrors longstanding
arrangements in Queensland,
Victoria, ACT, NT and Tasmania.
"A2B is set to emerge
from the pandemic
with a healthier and
bigger business.
We are continuing
to innovate and raise
service standards."
A2B is building capabilities that solve
real world problems, enabling us
to strengthen the value proposition
of our offerings across payments
and mobility. We are advancing our
strategy of expanding the reach
of our business, including bringing
unsurpassed fleet coverage across
Australia to the instant delivery
sector. Many of the advances we are
making in payments and technology
to drive our business forward in
Australia are equally beneficial for
mobility businesses throughout
the world and we anticipate
supporting our Mobile Technologies
International clients with a growing
range of solutions. With cash
in the bank and a new three year
funding arrangement in place A2B
is positioned to augment organic
growth with acquisition opportunities.
We deploy a disciplined approach to
scanning for opportunities that deliver
compelling value or a transformative
impact, particularly in payments.
Andrew Skelton
Chief Executive Officer
and Managing Director
9
Supporting
our communities
Responding to the pandemic
COVID-19 brought unexpected
changes and challenges to the
personal transport industry.
We quickly pivoted our operations
to leverage our widespread coverage
and technologies keeping people
and businesses connected during
these uncertain times.
To protect Passengers and the
community we launched four
sanitisation stations offering
professional sanitisation services
to all Taxis, rideshare and a selection
of Government vehicles in Sydney,
Newcastle, Albury and Prestons.
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a2b Annual Report 2020
13cabs delivered much needed
medical supplies and care packages
to local community organisations
such as Local Support in Sydney,
RACV Inverloch Club in Victoria
and Legacy in Brisbane. Around
the globe MTI used its unique and
scalable technology for the launch
of Taksi Helsinki’s MediTaksi service
which transports medicines direct
from pharmacy to customer and
to facilitate the launch of Glasgow
Taxis’ ‘Separated, Sanitised,
Safe campaign’.
"At A2B we believe
in the importance
of accessible,
dependable and
equitable transport."
Helping hands
A2B partners with and contributes
to community organisations and
outreach programs. This year 13cabs
supported the Melbourne Junior
Lord Mayor competition which helps
fund the education of thousands
of children, was a sponsor of the
AVEO Retirement Villages Open Day
and was again the Official Travel
Partner of the 2020 Murray Rose
Malabar Magic Ocean Swim.
We believe in creating events that
engage and support our local
communities: the annual 13cabs
Driver Partner Memorial Cup provides
a fun day out for our hard working
Taxi Drivers and raises money for the
Monash Children’s Hospital; and the
13cabs Gold Coast Annual Athletics
Championships provides children
with a disability their own athletics
carnival focused on participation
while at the same time providing
a valuable stepping stone for those
wishing to progress to higher levels
of competition.
We are proud to actively support
organisations like the Royal Children’s
Hospital, Royal Brisbane and
Women’s Hospital Foundation and
Guide Dogs Australia.
11
Board of
Directors
Paul was appointed as Chairman
in February 2017. He is a member of
the Remuneration and Nominations
Committee and a member of the Audit
and Risk Committee. Paul is currently
a Non-executive Director of Thorn Group
Limited. He was formerly the independent
Chairman of Intecq Limited from September
2012 to December 2016. Paul has over
30 years of executive experience across
many industries including leisure and
entertainment, retail, manufacturing,
property, software and technology. His
other executive roles included CEO and
Managing Director of Aristocrat Leisure
Limited (2003–2008), Chairman and CEO
of United International Pictures (1996–2003),
Non-executive Director of Village Roadshow
Limited (1990–1996), and Managing Director
of The Greater Union Organisation Pty Ltd
(1990–1996).
Paul holds a Bachelor of Economics
degree from the University of Sydney.
David was appointed as a Director
of A2B on 2 June 2020. He is a member
of the Audit and Risk Committee and
the Remuneration and Nominations
Committee. David is an experienced
Non-executive Director and currently
on the Boards of Event Hospitality and
Entertainment Limited, Retail Food Group
Limited and The Reject Shop Limited.
With broad financial and commercial
experience David has held various senior
executive roles including Group M&A
Director at Goodman Fielder Limited
and Chief Financial Officer of Iluka
Resources Limited.
David has a Bachelor of Commerce
from the University of NSW, is a graduate
of the Australian Institute of Company
Directors and a member of Chartered
Accountants Australia & New Zealand.
Jennifer was appointed as a Director
in September 2020. She is a member
of the Remuneration and Nominations
Committee and a member of the
Audit and Risk Committee. Jennifer
brings 25 years’ experience across
investment banking, financial
communications and investor relations.
Formerly the Chief Operating Officer in
Australia of the independent investment
bank Greenhill & Co, Jennifer has
extensive experience in enterprise
management, including the supervision
and management of compliance,
HR and financial management.
Jennifer is also a Non-executive Director
of APN Funds Management Limited,
QV Equities, Yarra Funds Management
Limited and is Chairman of Redkite
(national charity supporting children
with cancer and their families).
Jennifer’s qualifications include Bachelor
of Business (QUT), Graduate Diploma
in Applied Finance (FINSIA) and Graduate
Diploma in Management (AGSM).
Paul Oneile
Independent
Chairman
David Grant
Independent
Non-executive Director
Jennifer Horrigan
Independent
Non-executive Director
12
a2b Annual Report 2020
Louise was appointed as a Director
in August 2017. She is the Chairman of the
Remuneration and Nominations Committee
and a member of the Audit and Risk
Committee. Louise is currently the Chairman
of Grant Thornton Australia Limited and
a Non-executive Director of Credit Union
Australia Limited and the University of
Notre Dame Australia. Louise was previously
a Non-executive Director of Macquarie
Media Limited (2015–2019) and iiNet Limited
(2011–2015). Louise has over 25 years of
experience in media, publishing and market
research in Australia and internationally.
Her previous executive roles include CEO for
Asia and Managing Partner for Australia
for Hall & Partners (2009–2012), CEO and
Chairman of Research International (ANZ)
(2004–2009), and CEO of OzTAM Pty Ltd
(2001–2004).
Louise holds a Master of Management
from Macquarie Graduate School
of Management and is a fellow of the
Australian Institute of Company
Directors, the Institute of Managers and
Leaders, and the Royal Society for Arts,
Manufacturers and Commerce.
Rick was appointed as a Director in June
2014. He is the Chairman of the Audit
and Risk Committee and a member
of the Remuneration and Nominations
Committee. He also served as Chairman
from November 2016 to February 2017.
Rick has extensive experience in corporate
transactions, corporate finance and
accounting. He spent over 30 years with
PwC where his senior executive roles
included leading its first Corporate Finance
practice and subsequently the firms’
broader Advisory practice. Rick has a strong
background in corporate responsibility.
He led PwC’s internal Corporate
Responsibility agenda and is currently
a Director of Australia for UNHCR.
Rick holds an MA Hons Jurisprudence
(Law) from Oxford University, is a graduate
of the Australian Institute of Company
Directors and is a member of the Institute
of Chartered Accountants in Australia and
New Zealand.
Clifford was appointed as a Director
in August 2017. He is a member of
the Remuneration and Nominations
Committee and a member of the Audit
and Risk Committee. Clifford is currently
a Non-executive Director of Bid Corporation
Limited, Nearmap Limited and Technology
One Limited. Clifford was previously
a Non-executive Director of Afterpay
Limited (2017–2020) and has over 20 years
of experience in the digital space as an
entrepreneur and as an executive, with
specific experience in disrupting businesses.
His previous executive roles include Managing
Director, South-East Asia, Australia & New
Zealand for LinkedIn (2009–2017), Managing
Director of Yahoo! Australia & New Zealand
(2003–2006) and Founder and Managing
Director of iTouch Australia and New
Zealand, one of the largest mobile content
and application providers in Australia.
Clifford holds a Master of Science in
Management from the Ben Gurion University
of the Negev, and a Bachelor of Business
Science (Honours) in Economics and
Marketing from the University of Cape Town.
Louise McCann
Independent
Non-executive Director
Richard Millen
Independent
Non-executive Director
Clifford Rosenberg
Independent
Non-executive Director
Andrew was appointed CEO in June 2014
and Managing Director in December 2014.
Andrew was the Group Corporate Counsel
and Company Secretary from December
2011 until his appointment as CEO.
Andrew has over 20 years of experience
in the personal transport industry. He has
held senior management and executive
roles in Taxi Networks, payments and
operations, including as Chief Operating
Officer of Black Cabs Combined from 2005
to 2011. Prior to this Andrew was a lawyer
Andrew Skelton
Chief Executive Officer
and Managing Director
at K&L Gates in Melbourne specialising
in mergers and acquisitions.
Andrew holds an MBA, Bachelor of Laws,
Bachelor of Commerce and a Graduate
Diploma of Applied Corporate Governance.
13
13
Operating
and Financial
Review
A2B provides payment solutions, technologies,
products and support services that enable
the successful operation of personal transport
services and instant deliveries.
Background and Overview
A2B’s technologies support a broad range
broad mobility business currently contributes
of participants and stakeholders in the personal
the majority of A2B’s cashflow and serves
transport industry. A2B specialises in facilitating
as a proving ground for innovations and
bookings, trips and payments, including closed
technologies that A2B sells globally. A2B’s
loop digital payment systems. A2B’s capabilities
commitment to and involvement in the
in dispatch and payments technology are being
personal transport industry generates insights
leveraged by Taxi and private hire networks
and scale for the payments business, and A2B
globally. A2B’s payments capabilities extend
is a market leader in the provision of payment
beyond transport and are utilised by retailers
services to the mobility sector.
in Australia.
A2B has now entered the next phase of its
A2B began as a payments company that
transformational period which focuses
diversified into Taxi Networks beginning in 2002.
on growing revenues from the provision,
For the last three years a key focus has been
via Mobile Technologies International (MTI),
raising service standards and channelling
of its mobility platform to Taxi and private
additional investment in the technologies
hire businesses globally, and by building out its
and brands leveraged by A2B’s Taxi Networks.
EFT Solutions payments business in additional
During this period the Taxi Networks business
categories beyond mobility, initially in the
has grown significantly and begun achieving
Australian market.
benefits of scale as brands, technologies and
processes become increasingly standardised
in A2B networks throughout Australia. A2B
willingly shares its brands and technologies
with independent Taxi Networks, and these
‘Bureau Services’ have extended the coverage
and profile of the 13cabs brand across Australia.
A2B’s Taxi Networks operate a variety of related
mobility services, such as school buses and
couriers, and recently pivoted into instant
deliveries. Following steady expansion, this
14
a2b Annual Report 2020
Brands and activities
Taxi Network services, instant delivery services, sanitisation services, training, administration support, vehicle sales,
equipment provision, insurance and financing throughout Australia and in Manchester (UK).
The acquisition of MTI in 2018 evidences A2B’s commitment to supporting Taxi Networks globally. MTI provides dispatch
systems and related technologies that are core to the efficient operation of booking services including apps, contact
centre technologies and client and Driver relationship management tools. MTI’s technologies are utilised in each of A2B’s
Taxi Networks and by many networks overseas. The MTI business is transitioning to become a leading provider of software
focussed automotive dispatch, booking and payment solutions supporting personal transport providers throughout
Australia, New Zealand, USA, Canada, Finland, Sweden, Denmark and the UK.
Prior to the acquisition of MTI, A2B developed various technologies for use in its proprietary Taxi Networks. Examples of
these technologies include a 4.8 star rated booking app and the revolutionary MyDriver technologies that enable Passengers
to select their preferred Drivers. Products and technologies built for the 13cabs and related businesses are being steadily
transitioned across to MTI. This convergence of technologies under the MTI umbrella enables a best in breed approach for
end to end business management for MTI clients globally, including 13cabs.
The Cabcharge offering is similarly being transitioned so that it becomes available to MTI clients globally. Cabcharge
combines a world class client portal and innovative digital products for corporate and government travellers, enabling
unparalleled control, tracking, accountability and management of travel costs.
EFT Solutions provides payment services, consulting services and bespoke product innovation for payment terminal providers
including banks and retailers across Australia. EFT Solutions supports the provision of in-vehicle and handheld payment
terminals and payment processing for Taxi networks, Drivers and hire cars throughout Australia. EFT Solutions has partnered
with Fluid Management Technology to facilitate an end to end payment service for unattended payment terminals at fuel
pumps. EFT Solutions recently entered the generic payment terminal market with its first direct to merchant Flamingo
payment terminal.
15
Mobility
A2B provides Taxi Network services under brands including 13cabs,
Silver Service, Maxi Taxi, Lime Taxis, Apple Taxis and Champ to
Taxi Operators and Drivers across Australia. A2B also operates
the Mantax Black Cab network in the UK city of Manchester.
Services provided include facilitation of efficient booking dispatch
through world-class Apps, web and call centre operations,
instant delivery services, full Taxi fit outs (including branding
and installation of in-car Taxi equipment), sanitisation services,
repairs to assist Operators in managing a high-quality fleet of
cars, vehicle finance and insurance to assist Operators as small
business owners, and Driver education, training and uniforms
to support service levels to Passengers. Our Networks also broker
Taxi licence plates on behalf of the owner to Taxi Operators.
The fixed monthly fee received from Taxi Operators for
affiliation to a branded network represents the majority
of Taxi Network revenue. Brokered Taxi plate licence income
and payments to the licence owner are on a monthly fee basis
set by market conditions for each type of Taxi licence plate.
Other Taxi related services not provided as part of the Network
subscription fee generate revenue as the services are provided.
A2B owns and operates a fleet of 431 Taxis across its Networks
in Brisbane, Adelaide and Sydney. A2B receives income through
the rental of these vehicles by independent Drivers.
Global Mobility Platform
Outside the personal transport industry A2B develops software
solutions for clients in the banking and retail sectors (clients
include Australia Post, Woolworths, Westpac and Verifone).
This business is being transitioned to a payments facilitation
model aimed at generating recurring revenue streams.
Other activities
School bus route services in Adelaide generate revenue based
on contracts with the State Government. A2B also generates
income by providing processing services for State and Territory
Taxi transport subsidy schemes; courier services in Queensland;
and A2B owns a national portfolio of Taxi licence plates which
are leased at monthly rates set by market conditions for each
Taxi plate licence type.
Strategy and prospects
A2B’s vision is to be Australia’s leading personal transport
business and the first choice for personal and corporate
Passengers, the preferred payment and Network service partner
for Drivers and Taxi Operators and the employer of choice in the
personal transport sector.
Investment decisions at A2B are backed by a clear strategic focus:
•
Developing world class technologies and effective
marketing initiatives
•
Improving the value proposition for Passengers to capture
the growing demand for personal transport
MTI is a global provider of innovative dispatch and booking
•
Supporting Drivers and Operators in the personal
technology. With an industry-driven perspective and an
advanced SaaS automotive dispatch offering, MTI seeks
to equip its customers with the latest in innovative solutions.
MTI’s class leading dispatch technology coupled with A2B’s
innovative payment and passenger booking platforms provide
a scalable best in class fully integrated mobility offering.
Payments
A2B provides payment services to participants in the personal
transport industry in Australia, USA and Canada and to other
industries, including banks and large retailers, in Australia.
The personal transport payment services enable Passengers
to discharge their obligation to pay the Driver without using
cash. A2B provides Passengers with a range of payment
solutions to meet their personal transport needs. For Corporate
Clients A2B offers innovative products to charge Taxi
expenditure on account and delivers real time trip information
that facilitates efficient management of travel expenditure.
A2B receives service fee income on non-cash Taxi payment
transactions based on the value of fares processed by its
FAREWAYplus and Spotto payment terminals. A2B also receives
a monthly rental income for its Giraffe product (a handheld
terminal for Hire Car Drivers) and recently introduced monthly
rental plans for a portion of its FAREWAYplus payment
terminal fleet.
transport sector
•
Engaging with Taxi Networks globally through the supply
of world class technology and support services
•
Building a Payments business with recurring revenue and
growth prospects beyond the mobility category
During FY20 A2B maintained its commitment to investing
in marketing and technology; attracted 4,991 new Drivers
through a strong Driver value proposition; and strengthened
the 13cabs Network via geographic expansion across 12 new
locations while brand investment continued in pursuit of its
mission to be a leader in the growing personal transport sector.
In FY20 A2B made the following progress:
•
Technology Investment for Enhanced User Experience:
Continuous refinement and upgrade, such as introduction
of the revolutionary MyDriver technology enabling
Passengers to select their preferred Drivers, sustained the
class leading 4.8 star rating of the 13cabs booking app.
• Marketing and Brand Development: Marketing
investment continued to strengthen the 13cabs brand.
Marketing initiatives coupled with service improvements
are building positive momentum in brand recognition
and Net Promoter Score. In FY20 13cabs demonstrated
its commitment to service quality and safety through
the launch of professional vehicle sanitisation services
16
a2b Annual Report 2020
Operating and Financial Review (continued) in early March and by closing the loop on in car payments
Setting the scene for growth
providing a smooth and hygienic end of trip experience.
•
Stronger Driver/Operator Value Proposition: Continued
growth of our national footprint and Driver base. New
features and revenue opportunities were introduced
including the MyDriver technology and instant deliveries
through 13things.
At the end of 1H20 A2B was on track to deliver a second
record revenue result following a step up in technology and
brand investments that began in FY18. Financial momentum
was overshadowed in 2H20 as COVID-19 and Government
restrictions impacted travel and economic activity
generally, in addition to which A2B promptly introduced
• Growing Taxi Networks: The strength of the technology
a range of financially based stakeholder support initiatives.
and branding of 13cabs drove accelerating expansion
Internally, A2B responded swiftly and decisively to preserve
of the network’s national footprint. During FY20 13cabs
its financial resilience.
initiated bureau service arrangements for local Taxi
networks in Forster, Tuncurry, Taree, Laurieton, Dubbo,
Townsville, Mackay, Hervey Bay, Tweed Heads and
Goondiwindi. In response to demand from local operators,
13cabs has launched proprietary networks in Perth,
Albury/Wodonga, Toowoomba, Darwin and Wollongong.
These expansions are in addition to the acquisition
of Gold Coast Cabs in July 2019.
After a recent focus on standardising, scaling and raising
service standards in the mobility business, A2B has begun
making inroads into growing its international technology
business and building its payments business in Australia.
This diversification is projected to materialize through growth
of the MTI business globally and growth of the EFT Solutions
payments business, initially focussed in Australia.
Mobility
FY19 revenue
$146 million
Mobility
Platform
FY19 revenue
$42 million
Payments
FY19 revenue
$10 million
• Highly cash generative
•
Australia’s largest fleet of Taxis
• National footprint
•
Class leading technology
• Winning value proposition
• Opportunity for domestic growth
• Operations in Australia, USA, Canada, UK, Finland, Sweden,
and Denmark
•
Class leading product offering in a single platform through
amalgamation of A2B’s dispatch, payment, booking and
network management technologies
•
Differentiated offering creating growth opportunities
in overseas markets
•
Extension of payment services to global customer base.
• Our innovative software skills, payment infrastructure and
implementation experience provide a platform for expansion
into new categories in the Australian payments market
•
Support 37k terminals processing ~$1bn per annum
including ~$100m in North America
•
Transition from one-off consulting projects to
a product-centric recurring revenue model
•
Unique “digital pass” technology that allows us
to further differentiate
17
Financial Results
The COVID-19 pandemic has significantly impacted the communities and stakeholders that A2B serves. While the financial
impact was significant for A2B in FY20, the Group responded swiftly and decisively to support its stakeholders and to preserve
its financial resilience.
In the first half of the year A2B was on track to deliver its second consecutive year of record revenue following a step up
in technology and brand investment in FY18. Revenue in 1H20 ended at $105 million, up 4% on pcp. This improvement was
overshadowed as sudden revenue and earnings pressures were experienced following the impact of COVID-19 and A2B’s ensuing
stakeholder support initiatives.
In FY20 revenue decreased $27 million or 13.7% to $170.9 million (FY19 $197.9 million) while statutory loss after tax for the year
ended at -$23.7 million (FY19 $11.9 million profit).
Specific items influencing the company’s results include the impact of COVID-19, asset impairments of $15 million and $2.1 million
in asset write-offs and accelerated depreciation.
Unless otherwise stated, full year results disclosed in this Operating and Financial Review are underlying results from continuing
operations excluding significant items. Underlying profit is a non-statutory measure for the purpose of assessing the performance
of the group.
Underlying financial results
Revenue
Other income
Expenses
EBITDA
Depreciation & Amortisation
EBIT
Net interest
Profit before tax
Income tax
NPAT
EBITDA margin
EBIT margin
FY20
$m
170.9
9.0
(167.6)
12.3
(17.5)
(5.2)
(1.2)
(6.4)
1.9
(4.5)
7.2%
(3.0%)
Change
over PCP
(13.7%)
(66.2%)
(123.8%)
(130.0%)
(130.0%)
FY19
$m
197.9
0.3
(161.8)
36.4
(14.6)
21.8
(0.6)
21.3
(6.4)
14.9
18.4%
11.0%
Underlying earnings per share (AUD)
(3.7 cents)
12.4 cents
18
a2b Annual Report 2020
Operating and Financial Review (continued) Reconciliation of underlying profit to statutory profit
Underlying profit before tax
Acquisition and integration related costs (incl MTI retention costs)
Asset write-offs and accelerated depreciation
Once-off advisory costs
Rebranding cost
Taxi license plate impairment charges
Other Impairment charges
Employee separation cost
Other Write offs
Total items excluded from underlying profit before tax
Statutory profit before tax
Income tax
Statutory NPAT
FY20
$m
(6.4)
(1.1)
(1.7)
(0.5)
(0.1)
(14.5)
(0.5)
(0.7)
(0.4)
(19.5)
(25.9)
2.2
(23.7)
FY19
$m
21.3
(2.1)
–
–
(1.7)
–
–
(0.3)
–
(4.1)
17.2
(5.3)
11.9
Statutory earnings per share (AUD)
(19.7 cents)
9.9 cents
Change
over PCP
(130.0%)
(379.3%)
(250.9%)
299.8%
299.8%
COVID-19 impacts and responses
Revenue growth continued for A2B when entering 2H20 until the effects of COVID-19 emerged in March, significantly impacting
the markets in which A2B operates. Payment turnover dropped ~80% while active fleet levels contracted ~30% shortly after
Governments began applying restrictions on activity in March.
Declines in payment turnover and affiliated fleet had a direct impact on revenues in March and subsequent months. In addition,
A2B initiated a range of financial relief measures to support Drivers and Operators locally and to ensure continuity of services for
the community. These measures included:
•
•
•
•
A 60% temporary reduction in monthly network fees
A 3% bonus on electronic transactions processed through FAREWAYplus and Spotto
Taxi licence lease fee relief
Deferral of interest and principal payments on vehicle leases and business loans
A2B supported global clients of Mobile Technologies International (MTI) by initiating nominal support fees for April, May and June 2020.
Revenue in 2H20 declined $31 million or 32% to $65.9 million (2H19 $96.9 million). The adverse revenue impact following COVID-19
has been partially mitigated through a range of initiatives and measures.
•
Cash preservation
Rapid and disciplined response focussed on cost reduction and cash preservation. Initiatives were implemented in March and
included a temporary stand down of 350 staff members, termination of agreements with external contractors, temporary
closure of branch offices in Sydney and Melbourne, deferral of capital expenditure, suspension of a range of marketing
initiatives, and cessation of non-essential travel and consulting spend. A total benefit of $4.1 million was realised through these
initiatives in 2H20.
• Government incentives and subsidies
The Australian Federal Government’s JobKeeper package delivered $6.9 million and accelerated the return to work of the
majority of stood down staff. Separately, and having exited from membership of a number of State based Taxi Industry bodies,
A2B took the lead in advocating for direct industry support. Engagement with State Governments focussed on outcomes for
front line Taxi Industry participants. For example, A2B advocated for an increase in transport subsidies for Passengers with
a disability, a temporary waiver of Government levies and charges on Taxi trips, and the option for Drivers to retain the portion
of fares comprised of third party charges (eg tolls and airport charges). A2B’s advocacy efforts were ultimately successful
in some States. A2B has a vertically integrated strategy in NSW, Queensland and South Australia and received, alongside other
participants, $1.7 million to encourage the ongoing operation of our essential services such as wheelchair accessible taxis.
During the FY20 financial year A2B received $0.2 million in Government incentives for its MTI operations in the United Kingdom.
19
• New revenue initiatives
While cash preservation initiatives were put in place the organisation explored other revenue opportunities to further alleviate
the adverse impact of COVID-19. During the pandemic A2B won Government tenders for the provision of vehicle sanitisation
services for all Taxi and rideshare vehicles regardless of network affiliation and for a selection of Government fleet vehicles.
Currently A2B is providing sanitisation services on behalf of the NSW Government across four locations.
•
Expanding Operating Footprint
While short term revenue was sacrificed to support clients, MTI continued to expand its global footprint by signing up new
customers in the USA, Canada and Denmark. Locally the strength of the 13cabs offering drove accelerating expansion
of the network’s national footprint across NSW, Vic, Qld, WA and NT.
A2B’s strong balance sheet at the start of the pandemic coupled with early decisive action on cost and cash preservation have
positioned the company well. As at 30 June 2020 A2B had available cash of $25.8 million. In addition a $25 million finance facility
has been secured maturing 1 July 2023.
Impact of AASB 16 Leases
A2B is reporting full year results in accordance with the new leasing standard AASB 16 which impacts statutory results.
Comparative information has not been restated. The initial adoption of AASB 16 impacted the following items in the Consolidated
Statement of Financial Position on 1 July 2019:
•
•
Recognition of right-of-use assets: $19.9 million
Recognition of lease liabilities: $19.9 million
Under AASB 16 operating lease expenses are no longer recognised. Instead, depreciation of a right-of-use asset and financing costs
associated with lease liabilities are recognised in the Consolidated Statement of Comprehensive Income. The adoption of AASB 16
resulted in a favourable EBITDA impact of $3.2 million and an unfavourable impact on Net Profit After Tax of $0.4 million.
Revenue
A2B recorded total revenue of $170.9 million (FY19 $197.9 million), a decrease of $27 million or 13.7% compared to prior year.
In 1H20 total revenue for the Group ended at $105 million (1H19 $101 million), an increase of $4 million or 4%. In 2H20 total revenue
ended at $65.9 million (2H19 $96.9 million), a decrease of $31 million or 32%. The revenue decrease experienced in 2H20 is primarily
driven by the impact of COVID-19 and A2B’s ensuing stakeholder support initiatives.
The acquisitions of MTI (part year FY19) and Gold Coast Cabs contributed an additional $7.2 million in revenue compared to prior year.
Fleet
Affiliated fleet (vehicles)
9,471
9,547
7,004
FY18
FY19
FY20
Network subscription fee income decreased by $16 million or 20.9% to $60.7 million (FY19 $76.7 million). Decline in network subscription
fee income is primarily due to the impact of COVID-19.
20
a2b Annual Report 2020
Operating and Financial Review (continued) Affiliated fleet declined rapidly in March as Governments introduced restrictions on activity in response to an increasing number
of COVID-19 cases. As a result A2B experienced fleet declines across its network which were most pronounced in Sydney. In addition
A2B put a range of relief measures in place to support Drivers and Taxi Operators financially during this uncertain period, adversely
impacting near term network subscription fee income.
While a decline in affiliated fleet was experienced as a result of the pandemic geographical expansion continued as more Taxi
networks around the country recognised the strength of the 13cabs brand, technology and overall service offering. In FY20
an additional 292 cars joined under bureau agreements. In FY20 A2B’s Taxi network offering was extended to Forster/Tuncurry,
Taree, Laurieton, Dubbo, Wollongong, Townsville, Mackay, Hervey Bay, Toowoomba, Gold Coast, Tweed Heads, Goondiwindi,
Perth and Albury/Wodonga.
Brokered Taxi license plate income declined $5.2 million to $18.3 million (FY19 $23.5 million). This decline is primarily driven
by COVID-19 relief measures A2B put in place in April reducing monthly Taxi license plate fees to nominal amounts.
Taxi operating income increased $0.7 million or 6.1% to $12.3 million (FY19 $11.6 million). The improvement compared to prior
year is primarily driven by growth in operated fleet. A2B’s fleet operations grew by 68% in FY20 and now cover 431 vehicles across
Queensland 272, Adelaide 120 and Sydney 39.
Courier services income improved $0.2 million or 3.9% to $4.6 million (FY19 $4.4 million) being less impacted by the pandemic.
This income relates to the Yellow Couriers business in Queensland.
Car sales income decreased $0.8 million to $5.2 million (FY19 $6 million) with 152 cars sold in FY20.
Total Taxi fares processed ($m)
993
680
312
FY18
CAB a/cs
Bank Issued & 3rd Party
983
671
312
FY19
761
521
240
FY20
Taxi service fee income decreased by $9.3 million or 22% to $32.8 million (FY19 $42.1 million) while total Taxi fares processed
declined 23% compared to last year. In FY20 Cabcharge Payments processed a total of $761 million (FY19 $983 million) in Taxi fares.
Taxi fare volumes experienced a steep decline in March following the impact of COVID-19. Payment turnover declines exceeded 80%
in the early weeks of the pandemic. Payment turnover has been in recovery since 19 April with the pace of recovery moderating
since the last weeks of July.
The Spotto handheld channel continued to grow experiencing 24% growth through to February 2020. The pandemic adversely
impacted turnover in the last four months of the year bringing total volume 3.7% below last year.
During the year A2B’s payment terminal rental offering was expanded beyond our existing Giraffe (Hire Car) solution. As at 30 June
2020 a total of 3,361 payment terminals were attracting a monthly rental fee including 2,801 FAREWAYplus terminals.
Cabcharge corporate account volumes ended at $240 million (FY19 $312 million), a decrease of 23.2%. Volume impacts across
Cabcharge corporate accounts and Bank Issued and 3rd Party instruments were relatively consistent with a decrease of 23.2% and
22.4% respectively.
Taxi equipment rental income increased $1.2 million or 33.1% to $4.7 million (FY19 $3.5 million). This improvement is primarily driven
by an increase in payment terminals attracting a monthly rental fee (+$0.4 million) and the roll-out of new Taxi cameras primarily
in the Queensland fleet (+$0.4 million).
21
Revenue contribution from MTI totalled $7.6 million (FY19 $5.9 million). During the year MTI continued to grow its footprint
in overseas markets in both North America and Europe. In FY20, on a like-for-like basis, MTI increased its revenue 9% during the
pre-COVID-19 period. Revenues in 4Q20 were tempered following support measures that were put in place for customers globally.
Other income
In FY20 A2B recognised JobKeeper payments ($6.9 million), industry incentives ($1.7 million) and United Kingdom government
receipts ($0.2 million) in other income, driving the $8.7 million increase compared to last year.
Operating expenses
On a statutory basis total expenses increased $24 million or 13.3% to $204.4 million.
In FY20 A2B incurred $15 million in asset impairment charges, $2.1 million in asset write-offs and accelerated depreciation,
$1.1 million in acquisition and integration related costs, $0.7 million in employee separation costs and $0.6 million in other one-off
costs. These expenses totalling to $19.5 million (FY19 $4.1 million) are excluded from underlying operating expenses.
On an underlying basis total operating expenses increased $8.6 million or 4.9% to $185 million. This includes $8.4 million relating
to the impact of acquisitions and $4.7 million in additional doubtful debt provisions. Excluding these items underlying expenses
decreased $4.5 million or 2.6%.
Volume driven operating expenses
Volume driven operating expenses ended $1.6 million or 3.1% below last year at $49.1 million (FY19 $50.6 million). On a like-for-like
basis, excluding the impact of acquisitions, volume operating expenses decreased 5.8% or $2.9 million. This decrease is primarily
attributable to $3.4 million lower brokered Taxi license plate costs and $0.4 million lower processing fees paid to Taxi networks and
Drivers and $0.5 million lower costs of goods sold relating to reduction in vehicle sales partly offset by an increase of $1.2 million
in Taxi operating expenses.
Non-volume driven operating expenses
Non-volume driven operating expenses increased 6.5% or $7.2 million to $118.4 million (FY19 $111.2 million). On a like-for-like basis,
excluding the impact of acquisitions and the impact of AASB 16, non-volume operating expenses increased 3.1% or $3.3 million.
This increase includes $1.1 million in additional marketing expenses and $4.7 million in an increased doubtful debt provision.
Excluding the additional doubtful debt provision non-volume operating expenses decreased $1.4 million or 1.3% for the year.
A2B responded rapidly to the impact of the pandemic with a disciplined approach focussed on cost reduction and cash
preservation. In 2H20 total operating cash expenses (excluding additional doubtful debt provision) reduced $4.1 million or 7.9%.
This reduction was realised through a range of initiatives that were put in place in early March. Key cost reduction measures
included a temporary stand down of 350 staff members, termination of agreements with external contractors, temporary closure
of branch offices in Sydney and Melbourne, deferral of capital expenditure, suspension of a range of marketing initiatives, and
cessation of non-essential travel and consulting spend. A total benefit of $4.1 million was realised through these initiatives in 2H20.
Depreciation and amortisation
Total depreciation and amortisation charges increased 22.1% or $3.2 million primarily driven by the impact of AASB 16 ($3 million).
Excluding the impact of AASB 16 and acquisitions depreciation and amortisation charges increased 1.4% or $0.2 million.
Net finance costs
Net finance costs increased $0.7 million to $1.3 million (FY19 $0.6 million) this increase is primarily a result of the adoption of AASB 16.
Excluding this impact net finance costs were in line with prior year.
Income tax expense
A2B recorded an income tax benefit of $2.2 million (FY19 $5.3 million tax expense) resulting from a $25.7 million loss before income
tax adjusted for non-deductible items.
Profit after tax
Underlying net loss after tax was -$4.5 million (FY19 $14.9 million profit). A statutory net loss after tax of -$23.7 million was recorded
in FY20 (FY19 $11.9 million profit).
22
a2b Annual Report 2020
Operating and Financial Review (continued) Cashflow
A2B entered the coronavirus crisis period with a strong balance sheet and the operational leverage to adapt to the new uncertain
environment. As a result of a disciplined approach to cost and cash preservation A2B was able to pay the planned interim dividend
while improving its net cash position, continuing to invest in product development, and expanding into new markets and categories.
This disciplined approach to cost and cash preservation during the pandemic has put A2B in a strong financial position as at
30 June 2020.
In FY20 A2B generated $38 million (FY19 $26.4 million) in cash flow from operations and invested $17.2 million in capital expenditure
recording free cash flow of $20.7 million (FY19 $11.3 million). Total dividend payments of $9.7 million were distributed to shareholders
and a total of $3.4 million was invested in acquisitions primarily relating to Gold Coast Cabs.
$m
free cash flow
$20.7m
17.2
38.0
9.7
3.4
1.1
19.2
25.8
Total capital expenditure for FY20 was $17.2 million (FY19 $15.1 million). The increase compared to prior year was primarily driven
by an investment of $4.3 million in safety cameras that will be rolled-out across Qld, NSW and SA. Other capital expenditure
components include $5.4 million in software development, $3.5 million of in-car equipment and $2.2 million supporting the
expanded fleet operations.
As part of cash preservation initiatives capital expenditure was scaled back during 2H20. Total capital expenditure during the second
half of the year was $5.7 million inclusive of $2.4 million in software development and $1 million relating to the operated fleet.
A fully franked final FY19 dividend of 4 cents per share and an FY20 interim dividend of 4 cents per share were paid totalling
$9.7 million (FY19 $9.6 million). The FY20 interim dividend also includes $70k in dividends paid in relation to minority shareholders
in Tweed Heads Coolangatta Taxi Service.
FY20 Dividends
Cabcharge paid a fully franked interim dividend of 4 cents per share in April 2019. Given uncertainty around the current economic
environment and focus on channelling cash into growth opportunities the Board has decided not to declare a final FY20 dividend.
23
Financial position
Balance sheet
$m
Cash and cash equivalents
Other current assets
Total current assets
Property, plant and equipment
Taxi plate licences
Other non-current assets
Right of use asset
Total non-current assets
Total assets
Payables
Loans and borrowings
Other
Lease liabilities
Total current liabilities
Lease liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Total net assets
Net cash
30 Jun-20
statutory
AASB 16
impact
30 Jun-20
Pre-AASB 16
30 Jun-19
$m
25.8
41.2
67.0
39.7
3.3
62.9
17.8
123.7
190.7
29.5
2.0
8.3
2.3
42.1
15.9
1.3
17.3
59.4
131.3
23.7
0.0
0.0
0.0
0.0
0.0
0.0
(17.8)
(17.8)
(17.8)
0.0
0.0
0.0
(2.3)
(2.3)
(15.9)
0.0
(15.9)
(18.2)
0.4
0.0
25.8
41.2
67.0
39.7
3.3
62.9
–
105.9
172.9
29.5
2.0
8.3
–
39.8
–
1.3
1.3
41.1
19.2
81.3
100.5
38.2
17.5
58.8
114.5
214.9
37.9
2.7
8.6
–
49.3
–
1.6
1.6
50.8
131.8
164.1
23.7
16.5
The company’s net assets as at 30 June 2020 decreased to $131.3 million from $164.1 million at 30 June 2019. This reduction
is primarily due to the net loss of $23.7 million and dividends paid of $9.7 million in FY20.
A2B maintained its strong financial position and improved its net cash position by $7.2 million to $23.7 million as at 30 June 2020.
Total impairment charges incurred of $15 million relate to Taxi license plates ($14.5 million) and trademarks ($0.5 million).
During the year a total of $1.8 million in goodwill was recognised following the acquisition of Gold Coast Cabs, Corporate Cabs and
the change in control (increase) of our investment in Taxi Industry (Australia) Insurance Brokers Pty Ltd.
On 14 August 2020 A2B entered into an agreement to extend the current finance facility to 1 July 2023 at a reduced level of $25 million.
The current finance facility of $50 million was due to expire on 1 July 2021.
Investments
During the year A2B acquired the business operations of Gold Coast Cabs and Corporate Cabs for $2.5 million and $0.9 million
respectively. Gold Coast Cabs provides booking and dispatch services to approximately 380 Taxis on the Gold Coast while Corporate
Cabs operates a fleet of Taxis in Logan Queensland. Both acquisitions expand our footprint in Queensland and further advances
A2B’s strategy of offering service on a national basis.
24
a2b Annual Report 2020
Operating and Financial Review (continued) Outlook
A2B’s strong cash position enables the company to continue investing in growth initiatives in the year ahead.
The Company is prepared for the level of travel activity and the level of economic activity generally to fluctuate
for some time as the world and Governments respond to the COVID-19 pandemic. As the pandemic unwinds,
A2B expects:
•
Payment turnover to return to growth on the strength of our handheld payment terminal offerings and our
recent progress in linking bookings and payments
•
Affiliated fleet, a key driver of subscription revenues, to return to ~10,000 vehicles and resume long term
growth rates as the market and population expands
We can’t predict how long or to what extent the pandemic will impact A2B’s activities; but we do predict that,
relative to our competitors, we will emerge from the pandemic stronger than how we entered. In the meantime
A2B is continuing to innovate, raise service standards, and refine its approach to generating revenue. For example,
A2B has transitioned to a terminal rental model and, as at 30 June 2020, had 3,361 payment terminals generating
rental income that were previously not sufficiently utilised to generate a return.
There are two factors in play driving A2B’s expectation of improving its market position during the pandemic.
The first factor relates to the momentum in the business immediately preceding the pandemic. Examples
of momentum include strong growth in handheld payment terminals with Spotto volume up 22%, 19% growth
in app bookings, the MTI and Gold Coast Cabs acquisitions performing ahead of expectations and the ongoing
expansion of 13cabs’ footprint throughout Australia. The second factor relates to our standing, capabilities and
resilience to adapt to the challenges and opportunities presented by the advent of COVID-19. A2B launched
a number of stakeholder support initiatives while pivoting into the provision of vehicle sanitisation services from four
sites on behalf of the NSW Government, with all four operations expected to continue well into FY21. Cost continues
to be removed from the business and scale benefits are being captured more readily as the network business grows
and the enterprise, in its new format, matures.
A2B has continued its efforts to protect and preserve the value of its brands. In FY20 favourable court outcomes
have been achieved against 19 parties who were improperly leveraging brands such as Maxi Taxi, Silver Service and
13cabs to divert bookings. Through this process over 50 other businesses were successfully stopped from doing the
same. In these examples the bookings are now being repatriated to affiliated Drivers. The company also recently
litigated to protect the value of its ‘Lime’ brand.
Opportunities for growth in our mobility business include:
•
The ability of our improved service offerings such as Fixed Price Trips and automatic app payments to attract
new Passengers off rideshare apps
•
Professionally presented and sanitised vehicles being a catalyst to attract hygiene conscious travellers off public
transport and into affiliated vehicles
•
•
Continued expansion of the 13cabs network into more regions in Australia
Expansion of the 13things instant deliveries service
25
Outlook (continued)
Opportunities for growth in our mobility platform business (ie MTI) include:
•
Continuing to attract new clients building on the recent successful commissioning of MTI systems in Copenhagen,
Baltimore and Vancouver. Uber’s recently announced acquisition of Autocab, a UK based MTI competitor,
potentially amplifies this opportunity.
•
Expanding the MTI product suite to encapsulate the products and technologies previously built by other parts
of the enterprise, for example the Cabcharge Account System and the 13cabs MyDriver technologies
•
Providing end to end payment services to MTI clients globally
Opportunities for growth in our payments business include:
•
Scaling up a generic payment terminal offering to small business
• Winning recurring revenue contracts for end to end payment processing services (for example variations
of or expansion of the payment services provided to Fluid Management Technology)
•
Implementation of the digital smartcard solution for the NSW Taxi Transport Subsidy Scheme (announced
on 24 July 2020) and similar payment service contracts and extensions
The disciplined approach to m&a will continue. A2B has enhanced the value proposition of its existing services and
developed a proven ability to grow independently of acquisitions. Future opportunities will be tested for compelling
value or a transformative impact, particularly in the payments industry.
Material business risks
The COVID-19 pandemic has tested the financial strength of many companies and highlighted the required increased focus
on liquidity and credit risks. In the initial stages of the pandemic A2B put in place a program of work aimed at cash preservation.
In addition the Risk Working Group began regularly assessing COVID-19 specific related risks and reporting its findings to the Audit
and Risk Committee.
The company maintained its financial strength during 4Q20 and improved liquidity levels by $16 million. It closely monitored credit
balances while having the benefit of first access to cash from affiliated Operators through A2B’s payments system. Receivables
balances identified as representing a specific risk as at 30 June 2020 have been fully provided for in these accounts.
A2B’s efforts in preserving cash and maintaining its financial strengths have so far been productive. As at 30 June 2020 A2B had
available net cash of $23.7 million. A2B secured a three year $25 million finance facility on 14 August 2020.
The Board reviews material business risks on a regular basis. Risks that have the potential to impact the Company’s future financial
prospects and strategic imperatives are set out in the table below, together with mitigating actions to minimise those risks.
The risks are in no particular order and do not include common risks that affect all companies, such as key person risk. Nor do they
include general economic risks such as significant changes in economic growth, inflation, interest rates, consumer sentiment and
business confidence that could have a material impact on the future performance of the Company.
26
a2b Annual Report 2020
Operating and Financial Review (continued) Strategic Risk
Nature of Risk
Actions/Plans to Mitigate
Regulatory
changes
A2B’s operations are subject to State and Territory
Continue to work with Taxi Regulators on issues
regulation and control.
affecting the Taxi Industry.
New State Passenger levies were introduced.
Building administration tools that assist with levy
All states and territories have implemented a 5%
limit on payment service fees with the exception
collections and ensure Drivers and Operators have
the information they require in order to comply with
of Tasmania.
levy requirements.
More recently the Essential Services Commission
in Victoria announced that the service fee
limit will change from 5% to 4% for non-cash
payments with the exception of vehicle specific
Advocate for and deliver standards and controls that
result in maintaining or improving the standards
of Customer service and safety that are essential
to transport user confidence.
payment instruments. For vehicle specific payment
Maximise opportunities for A2B presented by
instruments a maximum service fee of 6% will apply.
regulatory frameworks.
It is possible that Taxi Regulators may impose
lower limits on the level of service fees able to be
charged to Cabcharge Customers thereby potentially
impacting revenue and earnings.
It is possible that Taxi Regulators may change rules
around required standards and quality control
aspects of Taxi Networks.
Taxi Regulators may affect the value of Taxi plate
licences through setting supply of new Taxi plate
licences and setting rates for Government leased
Taxi plate licences.
In addition, changes in Taxi regulation, including
establishing a regulatory environment for non-Taxi
transport can indirectly affect the value of Taxi
plate licences.
Taxi Regulators may also restrict the supply of Taxi
plate licences which limits growth opportunities for
the Taxi Industry.
Changes to
competitive
landscape/
changes to
IT environment
Competitors in personal transport who offer
Be at the forefront of technology development
alternative service and payment methods.
serving the personal transport industry. Development
Potential loss of business if the Company fails
to keep pace with technological change with respect
to Network Operations, bookings and payments.
and integrate bookings and payments.
Strategic acquisition-led growth to bolster existing
technology and resources and leverage scale.
Standardising, scaling and raising service standards
in the mobility business to be leveraged in Australia
and the overseas markets we operate in.
27
Corporate
Governance
Statement
The Board of A2B Australia Limited (the “Company“ or “A2B“) is responsible for the corporate
governance of the Company and its controlled entities (“Group“). The Board believes that robust
corporate governance practices, internal control systems and an effective risk management
framework will contribute to the responsible and sustainable creation of long-term value for the
Company’s shareholders.
Throughout the year ended 30 June 2020 (“FY20“), the Company’s corporate governance
arrangements were consistent with the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations (3rd edition) (“ASX Principles“).
The Board continually reviews the Company’s governance policies and practices to ensure that they
remain appropriate in light of changes in corporate governance expectations and developments.
For that purpose, the Company has continued its work to align its governance arrangements with
the 4th edition of the ASX Recommendations and as a result, many of the new recommendations
set out in the 4th edition of the ASX Principles are already embedded in the Company’s governance
arrangements. The Company will report against the 4th edition of the ASX Principles for its financial
year commencing 1 July 2020.
This Corporate Governance Statement is current as at 30 September 2020 and has been approved
by the Board.
Corporate governance highlights
The Company continued to focus on corporate governance during FY20,
reflecting the Board’s commitment to fostering a strong governance culture.
Key highlights included:
Establishment of Speak Up program: In the first half of FY20, the Board of
A2B adopted a comprehensive Speak Policy to encourage, support and protect
employees, contractors and suppliers who come forward with whistleblowing
disclosures. A2B is committed to fostering a workplace culture that is respectful
and which supports and reinforces high standards of conduct and behaviour.
For this reason the new Speak Up Policy and program is an important tool for
encouraging proactive disclosure of potential conduct issues and protecting
whistleblowers from detriment.
Modern slavery compliance: Since the enactment of the Modern Slavery Act
2018 (Cth), the Company has continued to review and improve its procurement
and supplier management practices with regard to mitigating potential risk areas
for modern slavery practices in its operations and supply chain. This has resulted
in enhancements to certain A2B contracts and supplier on-boarding processes,
following the implementation of A2B’s Supplier Code of Conduct, and mapping
of potential areas of modern slavery risk. The Company is currently preparing
its first modern slavery statement for the financial year ended 30 June 2020.
28
a2b Annual Report 2020
1. A2B’s values and culture
The Company has four core values as set out in A2B’s Code of Conduct. These values underpin all activities of the Group and are
embedded in its leadership. All Group representatives are expected to behave and conduct business in the workplace in a manner
which is consistent with these core values.
Integrity
For a fair go
Progression
Wellbeing
Engagement
Always look ahead
Every moment matters
Build trust
•
Customers can depend
• We continuously
• We care about and
• We believe we can build
on us
• Our staff follow through
on agreements and
promises to their
strive to improve the
customer experience
and performance of
our business
fulfil our role within the
a better A2B when
transport ecosystem and
we work as a team
the wider community
• Our staff are active
•
All our staff act
and proud members
colleagues
• Our workplace provides
with respect and
of our business
•
Suppliers and partners
can depend on us when
we are doing business
together
opportunities for
consideration towards
personal and professional
our customers, Drivers,
growth for our employees
colleagues and other
stakeholders
•
Through our actions
we seek to create
mutual benefit for
our stakeholders
• We are open to different
views and new ideas
to solve our greatest
challenges
• We continuously strive
to get better at what
we do
The Board sets and monitors A2B’s culture and adherence to its core values through ‘tone from the top’. Together with Management,
it monitors the Group’s culture and considers whether it appropriately reflects the Company’s values and identity. The Board
is committed to instilling a culture where its people are expected to behave in a lawful, ethical and socially responsible manner.
Further details on the standards of ethics and conduct that its representatives are expected to follow in all business and workplace
activities can be found in A2B’s Code of Conduct, available on the A2B website at https://www.a2baustralia.com/investor-
center/corporate-governance. The Board continuously monitors the appropriateness of the Code of Conduct and its alignment
with market best practice.
29
2. The board and its role
2.1 Responsibilities of the Board
The Board has overall accountability for the proper management of the Group. The Board reviews and approves the strategic
direction of the Company and oversees Management’s implementation of the Company’s business model and achievement
of the Company’s strategy.
The Board delegates responsibility to Management, through the CEO and Managing Director, for overseeing the day-to-day
operation of the Company. This includes oversight of the implementation of the Company’s strategy and ensuring that the
Company continues to operate within the risk parameters set by the Board.
The Board also delegates a number of responsibilities to its Committees.
The respective roles and responsibilities of the Board, its Committees and the CEO and Managing Director are set out in the
diagram below.
C h i e f E xecutive Officer
e C E O a n d h i s d e l egates (including members of th
t e a m ) h ave responsibility for the day
i v e
i o n s a n d management of the Com
c u t
o p e r a t
r d a n c e w i t h approved delegated authority
o
c
pan
e
y
c
y
e
h
x
e
a
t o d
i n a
Board
A
c
c
o
u
n
t
a
b
i
l
i
t
y
a
n
d
r
e
p
o
r
t
in
e
n
s
n
eratio
atio
mitte
min
R e m un
a n d No
C o m
The Board Charter sets out the Board’s
key responsibilities which include:
Selecting and evaluating the
performance of the CEO
–
Providing input and final
approval for corporate strategy
–
Approving and monitoring progress
of major capital expenditure, acquisitions
and divestitures, and overseeing
capital management
–
Developing and reviewing the
Company’s values, and monitoring
corporate culture, setting the tone
from the top
g
Board Commi t t e e s
t h e
Board Committees are establis h e d b y
Board and are responsibl e f o r s p e c i fi c
areas. The various power s , d u t i e s a n d
responsibilities of the Bo a r d m a y b e
delegated to a comm i t t e e
T
t
h
g
i
s
r
e
v
o
d
n
a
n
o
i
t
a
g
e
l
e
D
R
i
s
A
k
u
C
d
i
o
t
m
a
n
m
d
i
t
t
e
e
30
a2b Annual Report 2020
Corporate Governance Statement (continued)
The responsibilities of the Board and its Committees are set out in their Charters, which are available on the A2B website
at www.a2baustralia.com/investor-center/corporate-governance. The Board reviews the Charters at least annually, and more
frequently if required. A review of the Board and Committee Charters was conducted in FY20 and the Board considers that they
are in line with best practice and largely address new aspects of the 4th edition of the ASX Principles already.
The Company Secretary is responsible for the coordination of all Board business. This includes the preparation of agendas and
minutes, co-ordinating the completion and circulation of Board and Committee papers, and communications with regulatory
bodies and the ASX.
All Directors have access to the Company Secretary and the Company Secretary is accountable to the Board, through the
Chairman, on all matters to do with the proper functioning of the Board.
2.2 Composition of the Board
The Board currently comprises six Non-executive Directors and the Managing Director. Mr Grant and Ms Horrigan were appointed
to the Board as Non-executive Directors on 2 June 2020 and 11 September 2020, respectively.
The Board believes that its current composition represents a depth and breadth of skills and experience that will allow it to continue
operating effectively. The skills and attributes of the Board are discussed further in section 2.4.
The Directors in office as at the date of this Corporate Governance Statement are set out in the table below.
Director
Paul Oneile
Chairman
David Grant
Non-executive Director
Jennifer Horrigan
Non-executive Director
Louise McCann
Non-executive Director
Richard Millen
Non-executive Director
Clifford Rosenberg
Non-executive Director
Andrew Skelton
CEO and Managing Director
Independent
Date of appointment
Term in office
P
P
–
P
P
P
–
27 February 2017
2 June 2020
11 September 2020
29 August 2017
4 June 2014
29 August 2017
10 December 2014
3.5 years
4 months
1 month
3 years
6 years
3 years
6 years
Details of each Director’s experience, qualifications and Committee memberships are set out on pages 12 and 13 of the
Annual Report.
The number of Board and Committee meetings held during FY20 and the attendances of individual Directors and Committee
members at those meetings are set out on page 44 of the Annual Report.
2.3 Director independence and tenure
The Board has adopted the factors set out in Box 2.3 of the ASX Principles relevant for assessing the independence of a Director.
Those factors are set out in the Board’s Charter.
The Board has recently assessed the independence of each Non-executive Director and considers that, as at the date of this
Corporate Governance Statement, all of its Non-executive Directors, including the Chairman, are independent.
31
2.4 Skills and attributes of Directors
The Board has developed a skills and attributes matrix that sets out the collective mix of skills and attributes that the Board
would like to achieve.
The Remuneration and Nominations Committee (“RANC“) refers to the skills and attributes matrix when assessing and
selecting new Directors and also when considering professional development opportunities for current Directors.
The diagram below demonstrates the relevant skills, experience and attributes that the Board considers are possessed
by current Directors.
Skills and experience
Customer
service
Leadership
Technology
& online
platforms
Financial
acumen
Corporate
Governance
Public
company
experience
Teamwork
Personal
transport
Interstate
business
experience
Legal, risk &
compliance
Finance &
accounting
Marketing &
communications
Shareholder
engagement
Strategy
Gender
Gender
Female
29%
Age
61+
years
29%
Male
71%
Tenure
4–6
43%
41–50
years
14%
51–60
years
57%
0–3
57%
The Board is satisfied that the current Directors collectively possess the necessary mix of skills, expertise and industry knowledge
to meet the needs of the Company. The Board considers that the collective skills of the Directors will continue to enable the Company
to meet its strategic objectives, including those related to the implementation of marketing initiatives and digital platforms.
The Board recognises that there remains an opportunity to enhance the diversity (including gender) of the Board in future years
and considers diversity as a factor in assessing the relevant mix of skills and attributes on the Board. Further details about the
Company’s diversity policy is set out in section 5.1 of this Corporate Governance Statement.
32
a2b Annual Report 2020
Corporate Governance Statement (continued) 2.5 Succession planning and Director appointments
The Board, with the assistance of the RANC, is responsible for succession planning. The RANC assists the Board with identifying
potential Director candidates, having regard to the overarching principle that there should be a broad range of skills and attributes
represented on the Board, by reference to the Board’s skills and attributes matrix.
All shortlisted Director nominees are interviewed by the RANC and then by the other Directors. The final appointment decision
is made by the Board. Detailed background checks are carried out prior to all appointments.
New Directors are put forward to shareholders for election at the first Annual General Meeting following their appointment.
The Company will provide shareholders with all material information in the Company’s possession about a Director candidate
that is relevant to shareholders’ decision on that Director’s election and subsequent re-elections.
2.6 Induction and training
Non-executive Directors are given a letter of appointment setting out the terms of their appointment, time commitment envisaged
and the Company’s expectations. Directors are also expected to acquire a meaningful shareholding in the Company (being
a holding equivalent to 100% of their total annual base fee) within three years from the date of their appointment under the
Company’s Minimum Shareholding Requirement.
On appointment, Directors receive an induction package which includes the Company’s Constitution, the Board and Committee
Charters and other relevant governance documentation. All new Directors have the opportunity to meet with members
of Management and be formally briefed on the Group’s corporate strategy.
Directors are also encouraged to undertake programs of continuing professional development to ensure that they remain up to date
on developments relating to law and governance practices, as well as key changes within the personal transport industry generally.
The Company periodically reviews whether there is a need for existing Directors to undertake professional development to maintain
the skills and knowledge needed to perform their role as Directors effectively.
2.7 Access to information, independent advice and indemnification
Upon appointment, each Director enters into a Deed of Access, Indemnity and Insurance with the Company. The Deed provides
Directors with access to certain Company documents and insurance arrangements during their appointment and within a period
following their retirement as a Director of the Company.
Procedures are also in place to ensure that each Director has the right to seek independent professional advice at the Company’s
expense on matters pertaining to their role as a Director.
33
3. Board Committees
3.1 Audit and Risk Committee
Roles and responsibility
The Audit and Risk Committee (“ARC“) operates under a Charter. Its key responsibilities and functions are to oversee the Company’s:
•
•
•
•
•
Financial reporting process;
Relationship with the external auditor and the external audit function generally;
Relationship with the internal auditor and the internal audit function generally;
Processes for monitoring compliance with laws and regulations and its Code of Conduct; and
Processes for identifying and managing risk.
Membership
The ARC must consist of:
•
At least three members;
• Only Non-executive Directors;
•
•
A majority of independent Directors; and
An independent Director as Chairman, who is not the Chairman of the Board.
The ARC was comprised of the following members in FY20, all of whom were independent Non-executive Directors:
•
•
•
•
•
Richard Millen (Chairman)
Louise McCann
Clifford Rosenberg
Paul Oneile (from 12 December 2019)
David Grant (from 2 June 2020)
Selection and appointment of the external auditor
The ARC reviews the performance of the external auditor and recommends to the Board the approval of the terms of the external
audit engagement. The ARC also considers the independence of the external auditor and oversees the external audit partner rotation.
KPMG is the current external auditor of the Group and was appointed in 2007. The most recent external audit partner rotation took
place in the financial year ended 30 June 2019.
34
a2b Annual Report 2020
Corporate Governance Statement (continued) 3.2 Remuneration and Nominations Committee
Roles and responsibility
The RANC operates under a Charter. Its key responsibilities and functions are to review and make recommendations to the Board
in relation to:
•
The size and composition of the Board, including reviewing Board succession plans and the succession of the Chairman and
•
•
•
the CEO and Managing Director;
The criteria for nomination as a Director and the membership of the Board more generally;
The remuneration arrangements for the Chairman and other Non-executive Directors;
The arrangements for the CEO and Managing Director including contract terms, annual remuneration and participation in the
Company’s short and long term incentive plans; and
•
In consultation with the CEO and Managing Director, the policies and procedures related to remuneration, recruitment,
retention, termination and performance assessments of employees.
Membership
The RANC must consist of:
•
At least three members;
• Only Non-executive Directors;
•
•
A majority of independent Directors; and
An independent Director as Chairman.
The RANC was comprised of the following members in FY20, all of whom were independent Non-executive Directors:
•
•
•
•
•
Louise McCann (Chairman)
Richard Millen
Clifford Rosenberg
Paul Oneile (from 12 December 2019)
David Grant (from 2 June 2020)
Remuneration of Key Management Personnel
The RANC is responsible for overseeing and making recommendations to the Board in relation to remuneration of the CEO and
Managing Director and the Non-executive Directors. The CEO and Managing Director, in consultation with the RANC, makes
recommendations to the Board in relation to the remuneration and performance of his direct reports. The Company’s remuneration
policies appropriately reflect the different roles and responsibilities of Non-executive Directors compared with the CEO and
Managing Director and other executives.
The Company’s policies and practices in relation to the remuneration of KMP are set out in the Remuneration Report on pages 46
to 63 of the Annual Report.
The remuneration entitlements of each executive KMP (including superannuation entitlements) are contained in written
employment agreements between the executive and the Company. Each executive KMP’s employment agreement includes
a description of their position and responsibilities and their fixed remuneration which is benchmarked by independent
remuneration consultants.
Where appropriate, the Board will exercise its discretion to adjust remuneration arrangements and outcomes. During FY20, the
RANC gave careful consideration to the impact of the COVID-19 pandemic on the Company’s financial performance, position and
strategic priorities. As a result, the RANC exercised its discretion to make changes to remuneration arrangements for KMP, including
deferral of scheduled remuneration reviews and changes to the Company’s short-term incentive arrangements. Further details are
provided in the Company’s Remuneration Report on pages 46 to 63 of the Annual Report.
35
4. Performance evaluation
The process for the performance evaluation of the Board, its Committees, individual Directors and executive KMPs is guided by the
Company’s Performance Evaluation Policy, a summary of which is set out in the diagram below.
All suggestions for improvement and change arising out of the annual performance evaluation process are received by the Board,
through the RANC or the CEO and Managing Director (where appropriate). The Board or RANC may also engage an external
consultant to facilitate the annual performance evaluation process.
The Board
The Board as a whole
discusses and analyses its
own performance during the
year, including suggestions
Committees
The Chairman of each
Committee discusses
the performance of
the Committee with
for change or improvement.
its members. Directors
This process is facilitated
complete a questionnaire
Chairman of
the Board
Non-executive Directors
evaluate the performance
of the Chairman, led by the
Chairman of the Audit and
Risk Committee.
by the RANC.
relating to the role,
composition, procedures and
practices of the Board and
the Committees.
Directors
The Chairman conducts
interviews with each
Non-executive Director
separately to discuss
individual performance and
ideas for improvement.
Chief Executive
Officer
The RANC assesses the CEO’s
performance against targets
(which are set by reference
to the strategic objectives
of A2B for that year).
Senior Executives
The CEO assesses the
performance of each senior
executive, in light of the
operational and financial
responsibilities of the
executive and his or her
contribution to management
and leadership at A2B.
The CEO’s evaluation
is reviewed in consultation
with the RANC.
FY20 performance evaluations
In accordance with the Performance Evaluation Policy, the Company undertook performance evaluations of the Board, its Committees,
individual Directors and executive KMP for FY20.
The results of the performance reviews of executive KMP are reflected in their remuneration outcomes set out in the Remuneration
Report on pages 46 to 63 of the Annual Report.
36
a2b Annual Report 2020
Corporate Governance Statement (continued) 5. Corporate Governance and Group Policies
All of the Company’s policies referred to in this section are available on the A2B website at www.a2baustralia.com/investor-center/
corporate-governance.
5.1 Diversity
Policy and programs
A2B values diversity and inclusiveness in the workforce and recognises that diversity drives the Company’s ability to attract, retain,
motivate and develop the best talent and deliver the highest quality services to its customers. The Company recognises that its
greatest assets are its people, and is committed to creating an environment where all employees have an opportunity to realise
their potential and contribute to the success of the Company.
The Company’s vision for diversity relates to a broad range of areas. A2B’s diversity objectives include cultural background, religion,
sexual orientation, gender, age, disability, ethnicity and includes differences that have arisen as a result of varied experiences such
as education, problem solving skills, functional expertise and interpersonal skills.
The Company actively ensures that its diversity objectives and the Diversity Policy are followed by adopting initiatives, programs
and policies including the following:
Encouraging Management
to include at least one
female candidate on all
shortlists when looking for
appointees (and requiring
management to report to the
Board on outcomes).
Providing appropriate
facilities for our new parents
to assist with the transition
back to the workforce.
Providing an Employee
Assistance Program that
assists employees with
personal or work related
counselling and advice.
Providing corporate and
social responsibility, including
supporting R U OK Day,
our DVA Veterans and the
Royal Children’s’ Hospital.
Improving cultural awareness
through training and
employee engagement,
such as celebrating
various multicultural and
faith events.
Encouraging open
discussions about diversity
to promote awareness and
openness at all levels of the
A2B business.
In accordance with the Workplace Gender Equality Act, the Company has lodged its annual compliance report with the Workplace
Gender Equality Agency. The report contains the Company’s “Gender Equality Indicators”. A copy of the report is available on the
A2B website at https://www.a2baustralia.com/investor-center/corporate-governance/.
37
Gender diversity measurable objectives
In accordance with the Company’s Diversity Policy, the Board has set measurable objectives for achieving gender diversity and
is required to annually assess both the objectives and the Company’s progress in achieving them. These objectives and the
Company’s progress towards achieving them for FY20 are set out below.
Objective
Target
Outcome
Diversity awareness
A2B aims to create an environment
Staff members are provided with
The Diversity Policy is made available
in which individual differences are valued
the Diversity Policy on induction
to all employees through the A2B
and all staff have the opportunity to
and through further training to line
website. Employees are also invited
realise their potential and contribute to
managers on diversity and conscious
to provide feedback and comments
the success of A2B. Diversity objectives
versus unconscious bias.
on workplace gender equality.
are communicated to business units
and a diversity forum comprising
Management and team representatives
has been set up.
Recruitment
Efforts are made to identify prospective
Recruiter briefings to include
All roles attracted female applicants.
appointees who are female.
diversity requirements.
Efforts are made for any shortlist
Any shortlist of prospective
Female applicants successfully gained
of prospective appointees to include
appointees should include at least
employment in key managerial and
at least one female candidate.
one female candidate.
sales roles.
Retention
Pay parity has been assessed to ensure
Pay parity analysis performed
A pay parity exercise has been
females are not paid less than males for
to understand the extent of pay
undertaken and no roles identified
equivalent roles.
parity discrepancies.
where pay parity is of concern.
Workflow flexibility
A2B has flexible work arrangements
100% of employees offered workplace
All employees may request workplace
in place – compressed working weeks,
flexibility programs to the extent
flexibility. Each request is considered
flexible work, time in lieu, telecommuting,
possible for the particular role and the
on a case by case basis taking into
carer’s leave, unpaid leave and part
arrangement suits the business’ needs.
account the reasons for the request,
time work.
the individual’s requirements, business
needs, demands and flexibility.
38
a2b Annual Report 2020
Corporate Governance Statement (continued) 5.2 Securities dealing
The Company has adopted a Securities Dealing Policy which is intended to uphold shareholder, investment community, and public
confidence in the integrity of the market for A2B shares. The policy prohibits Directors, senior executives and other staff members
from trading in securities or directing the trade of securities on the basis of inside information or communicating inside information
to other people.
The policy allows trading by Directors, senior executives, and nominated employees in specified trading windows, subject
to complying with insider trading prohibitions and on the condition that prior notification of the intention to trade is provided.
The trading windows are:
•
The one month period commencing at 10.00am on the next trading day after the announcement to ASX of A2B’s
half-yearly results;
•
The one month period commencing at 10.00am on the next trading day after the announcement to ASX of the
preliminary final statement or full year results; and
•
Any other period the Board determines, from time to time.
The Board may determine at any time that a trading window is closed. Permission to trade outside of these windows may
only be given in exceptional circumstances.
In addition, the terms of the Company’s equity incentive schemes prohibit participants from entering into transactions that
limit the economic risk of equity-based remuneration (ie hedging and other arrangements).
5.3 Market disclosure and investor engagement
The Company has processes in place to ensure that the market is kept informed of material information by ensuring that all
employees across the Group are aware of their continuous disclosure obligations.
The Company has adopted a Market Disclosure and Investor Engagement Policy, which is designed to identify matters requiring
disclosure and to allow appropriate announcements to be made in a timely manner consistent with the ASX Listing Rules.
In particular, the policy:
•
Provides guidance on the type of information that must be disclosed and the procedures for internal notification and
external disclosure;
•
Details the procedures in place for promoting the understanding of continuous disclosure requirements, minimising risks
associated with selective disclosure and monitoring compliance against the Company’s disclosure obligations; and
•
Establishes procedures to ensure that all material matters which may potentially require disclosure are promptly reported
to the CEO and Managing Director through established reporting lines, including an immediate point of contact for all
employees through their immediate managers.
The Company keeps its employees informed of any relevant changes to the continuous disclosure regime established by the
ASX Listing Rules or the Corporations Act.
The Board is provided with copies of all material announcements promptly after they have been made.
39
5.4 Environmental, social and governance
The Company recognises the interdependence of financial returns, social benefits and environmental impacts and aims to create
sustainable value for all its stakeholders – customers, employees, shareholders, business partners and the communities which the
Company serves.
Environment
A2B seeks to minimise environmental harm in its business operations. Although A2B is not a substantial carbon emitter it seeks
to reduce usage and increase efficiencies in relation to waste, water and energy to reduce the Company’s carbon footprint.
A2B follows the principles of reduce, re-use and recycle and actively seeks to improve systems and processes to minimise the
operational impact of the Company on the environment. In addition, environmental considerations are now an integral part
of new product development.
Community
The Company has a strong interest in developing successful community partnerships. A2B recognises the importance of providing
its customers and the community more generally with services that are safe, accessible and efficient.
A2B actively seeks to become involved in the communities in which it operates and believes it is important to play a role in contributing
to the community, both directly, and through involvement in and support of personal transport industry initiatives.
Some of the initiatives the Company was involved in throughout FY20 are set out in A2B in the community section on pages 10
and 11 of the Annual Report.
5.5 Shareholder engagement
The Company is committed to facilitating two-way communications with shareholders, to ensure that shareholders have an understanding
of the Group’s business, governance and performance, and can provide the Company with their own views on such matters.
A summary of the Company’s Shareholder Communications Policy and communications practices to encourage shareholder
participation at general meetings are set out below.
Company policy
Communication practice
The Board’s commitment to shareholder engagement
•
The Company’s website contains all market
is reflected in the Company’s Shareholder
announcements, annual reports, important dates,
Communications Policy.
The purpose of the policy is to:
•
Give shareholders information about the Company
to enable them to exercise their rights as
shareholders in an informed manner;
• Make relevant information available to the market
so that the market for shares in the Company can
function in an informed manner; and
•
Develop a strong culture of disclosure and make
relevant information available to shareholders,
and important governance documents
•
The Company conducts periodic reviews of its
website with an aim to improve the effectiveness
of its electronic communications with shareholders
and stakeholders generally;
•
The Board encourages shareholders to receive
and send electronic communications via its share
registrar, Link Market Services;
•
All shareholders have the right to attend the
Company’s Annual General Meeting;
potential shareholders and other stakeholders
•
Shareholders are provided with a Notice of Meeting
in a timely and accurate manner.
and an explanatory statement of the resolutions
proposed. A copy of the Notice of Meeting is
lodged with the ASX and is included in the market
announcements feed on the Company’s website; and
•
The Company ensures that its external auditor
attends its Annual General Meeting, and allows
shareholders to submit questions directly to the
auditor prior to or at the Annual General Meeting.
40
a2b Annual Report 2020
Corporate Governance Statement (continued) In addition to the Policy, the Company also has a practice of putting substantive resolutions at general meetings to a poll, to ensure
that voting outcomes reflect the true will of the shareholders attending, both in person and by proxy.
6. Risk framework
6.1 Risk identification and management
The Board, in consultation with the ARC, is responsible for reviewing, ratifying and monitoring the Company’s systems
of risk management.
The ARC advises the Board on high-level risk related matters, and oversees processes to ensure that:
•
•
There is an adequate system of internal control and management of business risk; and
A regular review is undertaken of internal control systems and the operational effectiveness of the policies and procedures
related to risk and control.
The CEO and Managing Director and Management are responsible for developing and promoting the appropriate management
of risk and the ongoing maintenance of the control environment. Management are required to report to the ARC on the Company’s
risk management and internal control systems.
Annual risk management review and declaration
The ARC reviews A2B’s risk management framework at least annually to ensure that it continues to be sound and effectively
identifies all areas of potential risk. The ARC provides reports to the Board on the findings of its review.
During FY20 the Board undertook a review of the Company’s risk management framework. Based on the results of the review,
the Board is satisfied that the risk management framework is sound and continues to operate effectively.
Consistent with the ASX Principles, before the Board approves the Group’s financial statements, it receives from its CEO and
Managing Director and CFO a declaration that:
In their opinion and as required by the Corporations Act, the financial records of the Group have been properly maintained and the:
•
Financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position
and performance of the entity; and
•
That opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.
These declarations were received by the Board prior to the approval of the Group’s half year and full year financial statements for FY20.
Internal audit process
The ARC has appointed PwC to carry out the Group’s internal audit function. The internal auditor is independent of the external
auditor, KPMG. Representatives from the internal auditor meet with the ARC and key senior executives to understand the business
and the existing risk management framework and execute a process to identify and understand the current risks facing the business
in light of the strategic direction of the Company.
The ARC reviews and recommends to the Board the approval of the annual internal audit plan each financial year. The ARC and
Management meet with PwC regularly to consider and if necessary refine the internal audit plan.
Material economic, environmental and social sustainability risks
A2B monitors and seeks to manage material economic, environmental and social sustainability risks within the Company’s broader
risk management and internal control framework. This includes ensuring that information is effectively communicated between the
Board, the ARC, the internal audit function and Management.
As set out on pages 26 and 27 of the Annual Report, A2B continues to monitor risks related to changes to regulation,
the competitive landscape and technology environment within and outside its business, including as they relate to economic,
environmental and social sustainability risk areas. Developments relating to these or other risks that may impact A2B are escalated
within the business and to the executive team, the ARC and the Board as relevant. The Company uses a number of methods
to minimise and manage such risks, including by diversifying its operations and business activities, adopting contingency plans and
risk control frameworks and, where necessary, adapting the Company’s strategy to reduce its risk exposure.
41
The Directors present their report (including the Remuneration Report), together with the financial statements of the consolidated
entity being A2B Australia Limited (“A2B“ or the “Company“) and the entities it controls (the “Group“) for the financial year ended
30 June 2020.
Directors
The Directors of the Company at any time during or since the end of the financial year up to the date of this report are:
•
•
•
•
•
•
Paul Oneile (Chairman)
David Grant (appointed on 2 June 2020)
Louise McCann
Richard Millen
Clifford Rosenberg
Andrew Skelton (CEO and Managing Director)
The qualifications, experience and special responsibilities of current Directors of the Company are set out in the Board of Directors section.
1. Directorships of other listed companies
The directorships in other listed companies a Director has held at any time in the last three years immediately before the end of the
financial year are set out in the table below.
Director
Paul Oneile
David Grant
Louise McCann
Richard Millen
Name of listed company
Appointment date
Cessation date
Thorn Group Limited
14 October 2019
Event Hospitality & Entertainment Ltd
25 July 2013
Retail Food Group Limited
25 September 2018
The Reject Shop Ltd
Murray Goulburn Co-Op Ltd
MG Responsible Entity Ltd
1 May 2020
27 October 2017
27 October 2017
–
–
–
–
26 June 2020
26 June 2020
Macquarie Media Ltd
10 June 2015
30 October 2019
–
–
–
–
Clifford Rosenberg
Technology One Limited
27 February 2019
IXUP Limited
Afterpay Limited
Pureprofile Limited
Nearmap Limited
Andrew Skelton
–
2. Company Secretary
Adrian Lucchese
Group General Counsel and Company Secretary
29 September 2017
2 July 2019
30 March 2017
24 May 2020
12 June 2015
3 July 2012
–
28 February 2019
–
–
Adrian Lucchese was appointed as Group General Counsel and Company Secretary in October 2014. Adrian began his career with
Blake Dawson Waldron (now Ashurst) in 1988 and has held a number of senior management and executive roles including Group
General Counsel and Company Secretary of George Weston Foods Limited where, amongst other things, he was responsible for
many of the improvements to its competition compliance program. From August 2011 to October 2014, Adrian was Company
Secretary of AMP Capital Holdings Limited where he contributed to governance, structural and business improvement initiatives.
Adrian holds Bachelor degrees in both Science and Laws from the University of Sydney and a Master of Laws from the University
of Sydney.
42
a2b Annual Report 2020
Directors’ Report 3. Dividends
Dividends paid or declared for payment since the end of the previous financial year are set out in the table below.
Type
Final FY19
Interim FY20
Final FY20
Cents per share
Total paid or declared ($’000)
Payment date
4.0
4.0
–
4,817
4,817
–
31 October 2019
30 April 2020
–
4. Principal activities
The principal activities of the Group are included in the Operating and Financial Review (“OFR”) set out on pages 14 to 27.
Other than those mentioned in the OFR there were no other significant changes to the nature of the activities of the Group
during the year.
5. Review of operations
A review of the Group’s operations during the year and the results of those operations, together with its financial position,
are included in the OFR set out on pages 14 to 27. The Group’s business strategies and prospects for future financial years are
also included in the OFR.
6. Significant changes in state of affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group during the financial year,
other than those changes mentioned in the OFR.
7. Events subsequent to reporting date
On 14 August 2020 A2B entered into an agreement to extend the current finance facility to 1 July 2023 at a reduced level
of $25 million. The current finance facility of $50 million was due to expire on 1 July 2021.
Other than the matter above, there have been no events subsequent to the reporting date that significantly affects or may
significantly affect the Group’s operations in future years, the results of those operations in future years, or the Group’s state
of affairs in future years.
Likely developments
Information about likely developments in the Group’s operations is included in the “Outlook” section of the OFR on pages 25 and 26.
Environmental regulation
The Group’s operations are not subject to any particular and significant environmental regulations under a law of the
Commonwealth or of a State or Territory.
Directors’ interests and benefits
The relevant interests and benefits of each Director as at the date of this report are set out in the table below.
Director
Paul Oneile
David Grant
Louise McCann
Richard Millen
Clifford Rosenberg
Andrew Skelton
Interest in
shares
106,968
0
48,800
60,000
111,307
20,861
43
Mr Skelton has been granted performance rights under the Company’s Long Term Incentive (“LTI”) Plan
Grant period
FY17 grant
(for period ending 30 June 2020)
FY18 grant
(for period ending 30 June 2021)
FY19 grant
(for period ending 30 June 2021)
FY20 grant
(for period ending 30 June 2022)
Total
Remuneration Report
Performance
Rights
124,611
222,222
179,372
275,862
802,067
The Remuneration Report is set out on pages 46 to 63 and forms part of this Directors’ Report, has been audited as required
by section 308(3C) of the Corporations Act.
Directors’ meetings
The number of Directors’ meetings and attendance by each Director at those meetings during the financial year are set out
in the table below.
Director 1
Paul Oneile
David Grant 4
Louise McCann
Richard Millen
Clifford Rosenberg
Andrew Skelton
Board
Audit and Risk 2
Remuneration and
Nominations 2
Held 3
Attended
Held 3
Attended
Held 3
Attended
17
2
17
17
17
17
17
2
17
17
15
17
4
1
4
4
4
–
4
1
4
4
4
–
4
1
4
4
4
–
4
1
4
4
4
–
“Director” in the table means a Director who was a director of the Company at any time during the financial year.
1
2 All Directors are invited to and generally attend, Board Committee meetings. The “Attended” columns in the table reflect attendance
at meetings by Committee members.
The “Held” columns in the table reflect the number of meetings held during the period in which the Director held office.
3
4 David Grant was appointed on 2 June 2020.
Share options and performance rights
There were no options over unissued shares of the Company granted to the Directors or any executives during or since the end of the
financial year.
As at the date of this report there are 2,393,601 performance rights over unissued shares which have been granted to the CEO and
Managing Director and other senior executives under the Company’s LTI Plan. Further information on the LTI Plan is included in the
Remuneration Report on pages 46 to 63.
44
a2b Annual Report 2020
Directors’ Report (continued)
Indemnification and insurance of officers and auditors
The Company’s Constitution requires it to indemnify current and former Directors (including alternate directors), officers, and
auditors (if determined by the directors) of the Company against liabilities incurred by the person as an officer (or auditor
if determined by the Directors).
The Company has agreed to provide indemnities to and procure insurance for past and present Directors and officers of the
Company and its controlled entities. The indemnities provide broad indemnification against liabilities to another person (other
than the Company or related body corporate) and for legal costs that may arise from their position as Directors and officers
of the Company and its controlled entities. The indemnities are subject to certain exceptions such as where the liability arises out
of conduct involving a lack of good faith.
The Company has also paid insurance premiums for insurance policies providing the type of cover commonly provided to Directors,
officers and senior employees of listed companies such as the Company. As is commonly the case, the insurance policies prohibit
further disclosure of the nature of the insurance cover and the amount of the premiums.
There has been no indemnification of the current auditors, nor have any insurance premiums been paid in respect of the current
auditors since the end of the previous year.
Non-audit services by auditors
Details of the non-audit services provided by the Group’s auditor, KPMG, during the financial year including fees paid or payable for
each service, are set out in note 25 to the Consolidated Financial Statements.
The Board has considered the non-audit services provided during the year by KPMG and in accordance with written advice provided
by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services during the year by the
auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act for the
following reasons:
•
All non-audit services were subject to the corporate governance policies and procedures adopted by the Company and have
been reviewed by the Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; and
•
The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing
risks and rewards.
Lead auditor’s independence declaration
The lead auditor’s independence declaration required under section 307C of the Corporations Act is set out on page 64.
Rounding off
A2B is a company of the kind referred to in ASIC Corporation 2016/191 (Rounding in Financial/Directors’ Reports) Instrument.
In accordance with that Instrument, amounts in the Consolidated Financial Statements and the Directors’ Report have been
rounded off to the nearest thousand dollars, unless otherwise stated.
This Directors’ Report has been signed in accordance with a resolution of the Directors.
Paul Oneile
Chairman
25 August 2020
Andrew Skelton
CEO and Managing Director
25 August 2020
45
Remuneration Report
Letter from the Chairman of the Remuneration
and Nominations Committee
Dear Shareholders
On behalf of the Board, I am pleased to present the Remuneration Report for the year ended 30 June 2020.
During the year, the Remuneration and Nominations Committee supported the Board in recruiting two new Directors, Jennifer
Horrigan and David Grant and in the preparation of the Remuneration Report.
The Report provides an overview of our remuneration structures, policies and practices and is intended to demonstrate how
they align executives’ interests with the creation of long-term shareholder value and with the achievement of individual and
corporate performance as measured against specific targets.
The Remuneration and Nominations Committee assists the Board to evaluate the Company’s remuneration framework so that
it aligns, supports and drives achievement against our strategic focus areas as set out in the Operating and Financial Review.
Remuneration approach in FY20
This year the Remunerations and Nominations Committee and Board not only took into account the disruption caused by the
coronavirus but was also mindful of the continuing disruption and uncertainty for FY21 and the need to have our KMP’s highly
motivated, highly performing and aligned to the achievement of our critical strategic objectives.
The CEO and his Executive team have been extremely focused and have delivered stability during a difficult period. They have
also delivered significant performance against our strategic objectives, fast tracking, accelerating and commencing a number
of new initiatives to position A2B as strongly as possible to navigate the disruption and to recover post the pandemic.
As a result of the various disruptions the Committee and the Board has exercised its discretion with respect to the FY20 STI and
also to delaying a FAR review for the CEO and Executive.
Detailed information regarding remuneration outcomes for FY20 are outlined in section 4 of this Remuneration Report.
Committee activities in FY20
Key activities undertaken by the Remuneration and Nominations Committee during the year include:
•
•
•
•
Director succession planning and oversight of process of appointment for two new Directors;
Reviewing A2B’s Board and Committee Charters with respect to current market practice;
Deferring the executive FAR review to FY22 due to the impact of the COVID-19 pandemic; and
Setting performance measures for the achievement of financial targets and individual goals to take into account the
impact of COVID-19.
Outlook FY20
For FY21, the Committee will remain focused on ensuring that the Company maintains a robust remuneration framework that
is responsive to change and aligned with the Company’s strategic focus areas and values. The Committee will continue its
work enhancing our corporate governance arrangements.
On behalf of the Board, thank you for your ongoing support and we look forward to receiving your feedback on this report.
Yours faithfully
Louise McCann
Chairman of the Remuneration and Nominations Committee
46
a2b Annual Report 2020
Remuneration Report Remuneration Report
Table of contents
1. Overview
Who is covered by this report
Realised remuneration
Remuneration strategy
2. Remuneration governance
3. Executive KMP remuneration arrangements
Remuneration principles and link to Company strategy
Remuneration structure
Remuneration elements and incentive plans
Executive KMP contracts
4. Executive KMP remuneration outcomes for FY20
FAR
STI performance and outcomes
LTI performance and outcomes
Snapshot of Group performance
Executive remuneration in FY20
LTI awards held by executive KMP
5. Non-executive Director fee arrangements
Board and committee fees
Fees in FY20
NED remuneration in FY20
6. Additional disclosures relating to securities
Shares
Rights
7. Transactions with KMP and their related parties
8. Shareholder voting for the 2019 Remuneration Report
48
48
49
49
50
51
51
52
52
56
57
57
57
58
58
59
59
61
61
61
61
62
62
63
63
63
This Remuneration Report for the year ended 30 June 2020
outlines the remuneration arrangements of A2B Australia Limited
(“A2B” or “Company”) and is prepared in accordance with the
requirements of the Corporations Act 2001 (“Corporations Act”)
and the Corporations Regulations 2001. The information in sections 1
to 7 has been audited as required by section 308(3C) of the Act.
47
1. Overview
The Board of Directors present the Company’s Remuneration Report for the financial year ended 30 June 2020 (“FY20”). This report
details the Company’s remuneration framework and its alignment with the Company’s performance and strategy. It also sets out
the remuneration arrangements and outcomes for the Company’s key management personnel (“KMP”) who have authority and
responsibility for planning, directing and controlling the activities of the Company.
The Board in its deliberations on the performance of the KMP’s took into account the whole FY20 year and also the significant
disruption for the last four months of the FY20. In doing so the Board also considered the continuing disruption and uncertainty for
FY21. They considered not only the financial and strategic elements of STI and the need to have our KMP’s highly motivated, highly
performing and aligned during this period, but also the need for this to continue to maintain this level of uncertainty and respond
accordingly into the next 12 months.
The Board has been satisfied that the KMP Executives and the CEO have been extremely focused and have significantly performed
during this period, fast tracking, accelerating and commencing a number of new initiatives to position A2B as strongly as possible
to navigate the disruption and to recover post the pandemic. In addition, they have also operated in a manner that considered not
only the significant disruption to A2B and its various stakeholders but the boarder implications to other competitors in the sectors
in the overall spirit of A2B’s pandemic response. With this in mind the Board has exercised its discretion with respect to FY20 STI and
the overall FAR arrangements.
Who is covered by this report
The KMP covered by this report are listed in table 1 below.
Table 1: KMP included in this report
KMP
Role
Change in FY20
Non-executive Director
Paul Oneile
Louise McCann
Richard Millen
Clifford Rosenberg
David Grant
Executive
Andrew Skelton
Adrian Lucchese
Deon Ludick
Fred Lukabyo
Stuart Overell
Ton van Hoof
Independent Chairman
Independent Director
Independent Director
Independent Director
Independent Director
Managing Director and CEO
General Counsel and Company Secretary
Chief Technology Officer
Chief Operating Officer
Chief Operating Officer – Taxi Networks
Chief Financial Officer
Appointed on 2 June 2020
Resigned on 30 June 2020
48
a2b Annual Report 2020
Remuneration Report (continued)
Realised remuneration
The details of statutory executive KMP remuneration prepared in accordance with the Australian Accounting Standards can
be found in table 6 on page 59. Details of statutory Non-executive Director fee arrangements can be found in table 9 on page 61.
The table below provides shareholders with an understanding of remuneration earned by executive KMP in FY20. The amounts
disclosed in the table below are intended to provide an explanation of the pay for performance relationship in our remuneration
framework and are in addition to the information provided in the statutory executive KMP remuneration table prepared
in accordance with the Australian Accounting Standards.
Table 2: Executive remuneration earned in FY20 (non-statutory) (unaudited)
Executive
Andrew Skelton
Adrian Lucchese
Deon Ludick
Fred Lukabyo
Stuart Overell
Ton van Hoof
Fixed
remuneration 1
$
Termination
benefits
825,000
420,000
450,000
450,000
425,000
400,000
–
–
–
286,312 5
–
–
STI Earned for
FY20 & vesting
of deferred STI
$
246,850 2
85,000
72,500
N/A 4
68,250
71,625
LTI vested
in FY20 3
$
0
0
0
0
0
0
Total
$
1,071,850
505,000
522,500
736,312
493,250
471,625
Fixed remuneration means contracted remuneration amount for base salary and superannuation.
1
2 Under the STI arrangements, 25% of the CEO’s earned STI is deferred, with payment being made in equal instalments 12 and 24 months later.
This amount includes payment of the second (and last) instalment of FY18 deferred STI (being $44,350) and the first instalment of FY19 deferred
STI (being $45,000). It also includes 75% of the FY20 STI earned (being 157,500), which will be paid in September 2020 (with the remainder being
deferred and paid in cash in two equal instalments over the next 24 months).
The LTI rights awarded in FY17 are due to vest in September 2020. Further information on vesting is set out in the LTI section of this report.
3
4 Mr Lukabyo has resigned as an executive and his employment with the Company ceased on 30 June 2020.
5 Mr Lukabyo’s termination payment was made in FY21.
Remuneration strategy
The Board is committed to ensuring that A2B’s remuneration framework remains responsive, robust and reflective of current
market practice. The Company’s remuneration strategy continues to align with and support the Company’s business strategy,
while motivating and rewarding its executives. Adjustments will be introduced progressively, recognising both the need to remain
flexible and the ability to fine-tune the remuneration framework from time to time in an orderly and fair manner for both the
Company and its people.
49
2. Remuneration governance
The Board consults with the Remuneration and Nominations Committee (“Committee”), management and where necessary,
external advisors, when making remuneration decisions. The diagram below illustrates the remuneration decision-making process.
Board
•
•
Ensures remuneration is fair and competitive, and supports the Company’s strategic and operational goals
Approves remuneration policies, structures and arrangements after consideration of recommendations from
the Committee
•
Approves performance measures and outcomes after consideration of recommendations from the Committee
Remuneration and Nominations Committee
•
Comprises at least three members appointed by the Board
• Must have an independent chair and a majority of independent Directors
• Makes recommendations to the Board regarding remuneration policies, structures and arrangements
• Makes recommendations to the Board regarding performance measures and outcomes
•
The Committee met four times in FY20
For more detail on the Company’s charters and policies, see:
www.a2baustralia.com/investor-center/corporate-governance/
Management
External remuneration
consultants and advisors
•
CEO proposes individual remuneration
arrangements and performance outcomes for
•
Engaged and appointed by the Board or the
Committee as required
direct reports to the Committee
•
Advises the Committee and management
•
CEO not present when his remuneration is decided
to ensure that the Company is fully informed
when making decisions
• Mandatory disclosure requirements apply
to use of remuneration consultants under
the Corporations Act
50
a2b Annual Report 2020
Remuneration Report (continued) 3. Executive KMP remuneration arrangements
Remuneration principles and link to Company strategy
The Company has adopted the following principles to guide its remuneration strategy:
•
Align to the business strategy to encourage opportunities to be pursued and executives rewarded accordingly for the creation
•
•
of long-term shareholder value
Be supported by a governance framework
Provide that executive KMP and Non-executive Director remuneration is balanced and market competitive in order to recruit,
motivate, reward and retain skilled senior executives and Directors
•
Align the interests of executive KMP with the long-term interests of the Company and its shareholders with the use
of performance-based remuneration
•
Set short and long-term incentive performance hurdles that are challenging and linked to the creation of sustainable
shareholder returns
•
Ensure any termination benefits are justified and appropriate
Business
objectives
Remuneration
strategy objectives
Remuneration
structure
•
Attract and
Fixed annual remuneration (“FAR”)
•
Enhance and
expand operational
platform for
the creation
of a sustainable
business model
for future growth
•
Focus on creation
retain key talent
through balanced
remuneration,
market
competitive pay
and performance
focused STI and LTI
of shareholder value
•
Focus the executive
team on the key
strategic business
imperatives
•
Align interests of
executive KMP and
shareholders
•
Invite executive KMP
to participate in the
STI and LTI plans
Set with reference to job size and
organisations of similar complexity
and industry dynamics
Short-term incentive (“STI”)
Cash incentive comprising a group
financial performance target (60%)
and individual targets focused
on strategic priorities (40%)
Long-term incentive (“LTI”)
Equity incentive comprising
of performance rights vesting over
three years, subject to achievement
of an absolute total shareholder return
and an indexed total shareholder
return performance metrics
Executive arrangements
Executive services agreements
formalise incentive arrangements,
and include termination and
post-termination provisions
51
Remuneration structure
The Company aims to reward its executive KMP with a level and mix of remuneration appropriate to an individual’s experience,
position, responsibilities and performance.
The Board and the Committee regularly review the remuneration level and structure for the Company’s executive KMP and
make adjustments where appropriate to support the strategic initiatives of the business whilst ensuring that it remains market
competitive for recruiting and retaining skilled individuals.
In FY20, the executive KMP remuneration structure consisted of FAR and performance based at risk short term and long term
incentives awarded pursuant to STI and LTI plan rules. Adjustments or changes to remuneration arrangements made in FY20
are detailed under each remuneration element below.
The Board was scheduled to undertake an FY21 FAR review for executives. However, due to the impact of the COVID-19 pandemic,
this review has been deferred to FY22.
The following graphs summarise the CEO and other executive KMP remuneration mix for FY20.
CEO
Other executives
FAR
50%
STI maximum 25%
LTI maximum 25%
FAR
55%
STI maximum 19%
LTI maximum 26%
Remuneration elements and incentive plans
FAR
Details of executive KMP FAR are disclosed below.
What is FAR?
FAR is comprised of salary and other benefits provided to an executive on an ongoing basis,
such as superannuation contributions.
How is FAR
determined?
FAR is reviewed annually and our standard executive services agreements do not include any
guaranteed FAR increases.
When reviewing FAR for executives a number of factors are considered, including the individual’s skills
and experience relevant to their role, and internal and external factors.
The Company’s policy is to position FAR competitively with reference to companies and roles of a similar
complexity and industry dynamic to that of A2B.
Were any
changes made
in FY20?
Changes to FAR are typically implemented and take effect on 1 July of each year. The FAR for each
executive in FY20 is shown in table 6 on page 59.
Due to the impact of the COVID-19 pandemic, the Board has deferred the scheduled FY21 FAR review
for executives to FY22.
52
a2b Annual Report 2020
Remuneration Report (continued) STI
Details of executive KMP STI are disclosed below.
What is the
STI plan?
The STI plan provides participating executives with an opportunity to be rewarded for their individual
achievements, as well as the achievements of their business unit and the Company. This further
aligns their interests with the strategic priorities of the Company. All executive KMP are eligible and
participated in the STI plan in FY20.
What is the
format for
STI awards?
What is the
performance
period?
What is the
maximum
opportunity?
STI awards are delivered annually in the form of a cash payment that is subject to the satisfaction
of performance measures that are set at the beginning of each financial year. For the CEO, 25% of any
STI award is deferred and paid in two equal instalments over the next 24 months.
The performance period for the FY20 STI award is from 1 July 2019 to 30 June 2020.
The STI maximum opportunity is set individually and based upon market benchmarks for the
remuneration mix. This figure when referenced to FAR is: CEO: 48% of FAR and other executives:
on average 35% of FAR.
What are the
STI performance
measures?
The FY20 STI award vests subject to the achievement of a Group-wide financial performance measure
and individual performance measures. The financial performance measure continues to apply to all
executive KMP to ensure their common focus on the achievement of the Company’s financial objectives.
The individual performance measures for each executive are directly linked to the strategic imperatives
of the Company and the contributions of the relevant executive towards achieving them.
A summary of the FY20 performance measures is set out below.
Group-wide financial performance measure (60% of STI)
Having regard to the significant impact that the COVID-19 pandemic had on the Company in the
second half of FY20, including substantive changes to the business’ near term strategic priorities,
the Board determined that it would not be appropriate to continue with its usual approach to
Group-wide financial performance measures for FY20 STI.
Instead, to meaningfully assess performance in FY20, the Board exercised its discretion and separated
the year into two parts:
•
Eight pre-COVID-19 months, before the business was significantly impacted (July 2019 to February 2020)
– being 67% of the Group-wide performance component of the STI opportunity; and
•
Four months during the COVID-19 pandemic, where executives were expected to change focus
to supporting the Company’s immediate response to the pandemic (March 2020 to June 2020)
– being 33% of the Group-wide performance component of the STI opportunity.
In assessing performance across the two parts of FY20, the Board had particular regard to the aim of the STI
program to reward participants for the achievement of the Company’s strategic, financial and operational
goals (recognising that they had changed over the course of the year), as well as to retain and motivate
talent. This was considered particularly important in the current environment where increased competition,
business model and technical and regulatory disruption have been magnified and made more complex
by the evolving challenges presented by the coronavirus pandemic.
53
STI (continued)
What are the
STI performance
measures?
(continued)
How is
performance
tested?
What happens
on a change of
control or other
significant
events?
Does the
plan provide
for clawback?
What happens
on termination
of employment?
Individual performance measures (40% of STI)
Details regarding the STI outcomes for FY20, based on achievement of the performance measures
outlined above, are set out in section 4 of the Remuneration Report.
Role
CEO
Performance measure
•
•
•
Customer engagement and corporate culture (15%)
Grow the personal transport and payments business (15%)
Initiation and execution of strategic initiatives (10%)
Other
executive
KMP
Position-specific performance measures tailored for each executive having
regard to their role, responsibility and specific strategic goals over which they
have influence. Examples include:
•
•
•
•
•
•
Employee safety, remuneration and governance
Grow Cabcharge accounts
Risk management
Strengthen booked trips
Fleet growth
Enrich Driver engagement
The Committee considers the CEO’s performance against the performance measures set for the year
and provides a recommendation of the STI to be paid (if any) to the Board for approval. The CEO
considers the performance of other executive KMP against the performance measures set for the year
and, in consultation with the Committee, provides a recommendation of the STI to be paid (if any)
to the Board for approval. The Board may approve, amend or reject the recommendations.
If a change of control occurs before the end of the performance period, the Board will determine how
STI awards will be dealt with. If a change of control occurs before the Board makes a determination,
a pro rata amount of the STI award based on the proportion of the performance period that has
elapsed at the time of the change of control will be paid.
The Board has the discretion to vary the terms of STI awards so that executives are not unfairly
advantaged (or disadvantaged) by factors outside their control. Any variations will be disclosed and
explained in the Remuneration Report.
A2B has a clawback mechanism in place, which allows for the repayment of STI awards in cases
involving fraud, dishonesty, breach of obligations (including a material misstatement of financial
information), or any other omissions that result in an STI outcome. The Board may use its discretion
to ensure that no unfair benefit is obtained, subject to applicable laws.
Where employment ends prior to the end of the performance period by reason of resignation,
fraudulent or dishonest conduct, or termination for cause (including gross misconduct), any entitlement
to the STI award will be forfeited at termination of employment.
Where employment ends for any other reason, a pro rata portion of the STI award will remain on foot
and will be tested at the end of the original performance period.
The Board retains the discretion to vary the treatment set out above based on the specific
circumstances surrounding the termination of employment.
In respect of the deferred STI, when employment ends after payment of the initial STI instalment but
prior to payment of the deferred portion of an STI award:
•
By reason of fraudulent or dishonest conduct, or termination for gross misconduct, the entitlement
•
to the deferred portion of the STI award will be forfeited at termination of employment.
For any other reason, the deferred portion of the STI award will remain on foot and be paid in the
ordinary course.
Were any
changes made
in FY20?
The STI performance measures were reviewed to ensure that they continue to align with strategic goals.
To meaningfully assess performance in FY20 the year was separated into two parts; eight pre-COVID-19
months before the business was significantly impacted by the pandemic (July to February) and four
months during the COVID-19 pandemic (March to June).
54
a2b Annual Report 2020
Remuneration Report (continued) LTI
Details of executive KMP LTI are disclosed below.
What is the LTI
plan?
The LTI plan provides participating executives with an opportunity to share in the long-term growth
of A2B and aligns their interests with those of the Company’s shareholders. All executive KMP are
eligible and participated in the LTI plan in FY20.
What is the
format for LTI
awards?
What is the
performance
period?
What is the
maximum
opportunity?
What are the
LTI performance
measures?
LTI awards are delivered in the form of rights which are granted to participants for nil consideration.
LTI awards are granted annually. The FY20 awards are subject to a three-year performance period.
Rights vest at the end of the performance period, subject to the satisfaction of the performance
measures set out below. There is no retesting of performance. On vesting, each right converts into one
ordinary share (or if determined by the Board into the equivalent cash value). Any rights which do not
vest immediately lapse.
The performance period for the FY20 LTI award commenced on 1 July 2019 and will end on 30 June 2022.
Subject to the satisfaction of the relevant performance measures, the FY20 award vests following
testing of the performance measures, which is anticipated to occur following the release of the
Company’s audited financial results for the year ending 30 June 2022.
The maximum LTI opportunity is set individually and based upon market benchmarks for the
remuneration mix. This figure when compared to FAR is: CEO: 48% of FAR and other executives:
on average 47% of FAR.
The number of rights granted to individuals was calculated by dividing their maximum LTI opportunity
by the volume weighted average market price (“VWAP”) of the Company’s shares over the 5 trading
day period commencing 30 days after the date of the release of the Company’s audited financial results
for the year ended 30 June 2019. No discount is made for dividends foregone nor for performance
or other considerations.
The rights are subject to two performance metrics which are independent and will be tested separately.
1. Absolute total shareholder return
60% of the rights vest subject to absolute total shareholder return (“aTSR”) performance over the
performance period
The aTSR metric requires minimum threshold performance of at least 4% compounded annual growth
rate (“CAGR”) in total shareholder return (“TSR”) before any vesting will occur.
The percentage of rights subject to the aTSR metric that vest, if any, will be determined by the Board
in accordance with the following vesting schedule.
A2B aTSR CAGR performance
Rights that vest (% of tranche)
< 4%
= 4%
> 4% and < 12%
12% or more
0%
35%
Straight-line vesting between 35% and 100%
100%
55
LTI (continued)
What are the
LTI performance
measures?
(continued)
What happens
on a change
of control or
other significant
events?
Does the
plan provide
for clawback?
What happens
on termination
of employment?
Were any changes
made in FY20?
2. Indexed total shareholder return
40% of the rights vest subject to indexed total shareholder return (“iTSR”) performance over
the performance period.
The vesting of the rights subject to the iTSR metric will be determined by comparing the Company’s TSR
with the movement of the S&P/ASX 300 Index (“Index”) over the performance period.
The iTSR metric requires minimum threshold performance of at least 100% of the Index before any
vesting will occur.
The percentage of rights subject to the iTSR metric that vest, if any, will be determined by the Board
in accordance with the following vesting schedule.
A2B iTSR performance
Rights that vest (% of tranche)
< 100% of Index
= 100% of Index
> 100% of Index and < 100% of Index +8% CAGR
> 100% of Index +8% CAGR
0%
25%
Straight-line vesting between 25% and 100%
100%
Decisions regarding the level of performance achieved and relevant remuneration outcomes will be made
by the Board according to the above vesting schedules following the end of the performance period, with
the outcomes communicated to shareholders in the Remuneration Report.
Where a change of control event occurs, the Board has discretion to determine the proportion of LTI
awards to vest and may have regard to the executive’s tenure, the proportion of the performance period
that has elapsed, the extent to which the performance conditions have been satisfied at the time of the
change of control and the interests of the Company’s shareholders.
If a change of control occurs before the Board exercises its discretion, a pro rata number of unvested
LTI awards will vest based on the extent to which the performance conditions are satisfied (or are
estimated to have been satisfied) and the proportion of the performance period that has elapsed
at the time of the change of control.
The Board may adjust the terms of LTI awards in exceptional situations where participants may be unfairly
advantaged (or disadvantaged) by external factors outsiwde of their control. The Board in all
circumstances will ensure any variation takes into account the purpose of the LTI plan and achievement
against the relevant performance conditions up until the relevant time. Any variations will be disclosed
and explained in the Remuneration Report.
The Company has a clawback mechanism in place, which allows for the lapsing and/or clawback of LTI awards
in cases involving fraud, dishonesty, breach of obligations (including a material misstatement of financial
information), or any other act or omission that result in an inappropriate LTI outcome. The Board may use its
discretion to ensure that no unfair benefit is obtained by a participant, subject to applicable laws.
Where employment ends prior to the end of the performance period due to resignation, termination for
cause or poor performance, unvested LTI awards will lapse. Where the employment ends for any other
reason, unvested LTI awards will continue on-foot and be tested at the end of the original performance
period against the relevant performance conditions. However, the Board has an overriding discretion
to apply another treatment if it deems it appropriate.
No change to performance measures and period were made in FY20.
Executive KMP contracts
The Company has a contemporary standard executive service agreement. The remuneration arrangements for executive KMP
are formalised in these agreements.
Table 3: Executive KMP contract terms
Executive
Contract term
Notice period 1
Executive
Contract term
Notice period 1
Andrew Skelton
Adrian Lucchese
Deon Ludick
Ongoing
Ongoing
Ongoing
12 months
6 months
6 months
Fred Lukabyo 2,3
Stuart Overell
Ton van Hoof
Ongoing
Ongoing
Ongoing
9 months
6 months
6 months
1
2
The length of the notice period is the same for the executive KMP and the Company. The Board has the discretion to make payments to executive
KMP lieu of notice.
In relation to Mr Lukabyo’s notice period, up until 30 June 2020 both he and the Company are required to give nine months’ notice. From 1 July 2020
both Mr Lukabyo and the Company are required to give six months’ notice.
3 Mr Lukabyo has resigned as an executive and his employment with the Company ceased on 30 June 2020.
56
a2b Annual Report 2020
Remuneration Report (continued) 4. Executive KMP remuneration outcomes for FY20
The coronavirus pandemic has had a significant impact on economic activity and has had a material impact on the Company’s
business and operations. To meaningfully assess executive performance in FY20 the year was separated into two parts:
• Months pre-COVID-19 pandemic, before the business was significantly impacted (July 2019 to February 2020) (Pre-COVID‑19
Period); and
•
Four months during the COVID-19 pandemic, where executives were expected to change focus to supporting the Company’s
immediate response to the pandemic (March 2020 to June 2020) (COVID‑19 Affected Period).
In respect of the Pre-COVID‑19 Period, it was decided that no portion of the Group-wide financial component of the FY20 STI would
be awarded.
In respect of the COVID‑19 Affected Period, the Board assessed performance having regard to the outcomes and behaviours
of management in responding to the challenges resulting from the coronavirus pandemic. The Board had particular regard
to achievement against the changed strategic objectives of the business. This included the need to support the financial strength
and liquidity of the Company, as the essential components for the Company’s ability to sustain, improve and transform its business
to deliver shareholder value. Examples of the financial measures taken into account in this respect were:
•
•
•
Cash preservation;
Short and long term liquidity;
Delivering new revenue streams
Beginning in March 2020, the executive developed and implemented a COVID-19 financial strategy that was executed with powerful
effect. It focussed on:
•
•
•
•
•
•
Cash preservation and liquidity
Securing targeted support and contract opportunities with State Governments driving a $16 million improvement in liquidity
levels over 4Q20
Securing new revenue opportunities of over $10 million
Setting up sanitisation stations at its major operations sites and partnering with State Governments to deliver sanitisation
services to all participants in personal transport and emergency services to increase safety for Passengers and Drivers and
assisting in reducing the spread of coronavirus
Accelerated product development targeting COVID‑19 related opportunities (eg 13things, Fixed Price Trips)
Geographic expansion of the 13cabs network (eg Dubbo, Townsville, Toowoomba, Goondiwindi, Wollongong, Darwin)
The success of this program enabled the payment of the interim dividend to shareholders while the Company remained in a net
cash position. In addition, the business now has the financial strength to emerge from the challenges presented by the coronavirus
pandemic. It is an extraordinary result during unprecedented times and was only possible through a sustained, focused and
cohesive effort by each member of the executive team.
Accordingly, on the basis of this strong performance against the changed strategic objectives of the Company, the Board
determined to award 20% of the target STI opportunity in respect of the Group-wide financial performance measure for FY20
(being ‘at target’ achievement for the COVID‑19 Affected Period).
FAR
The fixed annual remuneration of executive KMP for FY20 is set out at table 2 on page 49. Due to the impact of the COVID-19
pandemic, the Board has decided to defer the scheduled FY21 FAR review for executives to FY22.
STI performance and outcomes
The CEO assessed the performance of each executive KMP against their individual FY20 STI performance measures with
recommendations presented to the Committee. The Committee also assessed the performance of the CEO with reference to his
STI performance measures and made recommendations to the Board.
The Board considered the material provided to the Committee, its recommendations, and the annual financial results. This year
the impact of the COVID-19 pandemic has also been a factor the Board has taken into account. The Board also agreed with the
recommendations in relation to the individual performance of each executive KMP and the applicable value payable.
57
In respect of the CEO’s FY20 STI outcomes, the Board approved the following.
FY20 STI Outcomes
Group-wide financial performance measure
Pre-COVID‑19 Period
COVID‑19 Affected Period
Individual strategic performance measures
Customer engagement and corporate culture
Grow the personal transport and payments business
Initiation and execution of strategic initiative
% outcome awarded
for FY20
% weighting of
FY20 STI opportunity
(at Target)
0%
100%
100%
50%
100%
Target 40%
Target 20%
Target 15%
Target 15%
Target 10%
The individual FY20 STI outcomes for each executive KMP, including percentages and values payable are detailed in the table below.
Table 4: FY20 STI award outcomes
Executive
Andrew Skelton
Adrian Lucchese
Deon Ludick
Fred Lukabyo 2
Stuart Overell
Ton van Hoof
Maximum FY20
STI opportunity
$
400,000
150,000
150,000
N/A
150,000
150,000
STI earned
in FY20
$
210,000 1
85,000
72,500
N/A
68,250
71,625
% of maximum
opportunity achieved
% of maximum STI
opportunity forfeited
53
57
48
N/A
46
48
47
43
52
N/A
54
52
1
25% of the STI earned in FY20 being $52,500 is deferred and paid in two equal instalments of $26,250 in July 2021 and $26,250 in July 2022.
2 Mr Lukabyo resigned as an executive and his employment with the Company ceased on 30 June 2020. His package took into account both
FAR and STI entitlements.
LTI performance and outcomes
The Company’s shareholders approved the LTI plan in November 2014. The second tranche of performance rights under the
LTI plan were granted for the performance period 1 July 2015 – 30 June 2019. The rights were tested in September 2019 and, due
to regulatory and market disruption and disruptors, did not vest and lapsed immediately as the performance conditions attached
to the rights, being an absolute TSR and a compound annual growth hurdle, were not achieved. Further details are shown in table 7
on page 60.
Snapshot of Group performance
Table 5: Performance outcomes for the last five years
Profit after tax from continuing operations
($m)
(Loss) Profit attributable to the owners of the Company
($m)
Dividend paid
Dividend paid per share fully franked
Closing share price at 30 June
Note: Opening share price in FY16 was $3.66.
($m)
(cents)
($)
FY20
(23.7)
(23.8)
9.6
8
0.81
FY19
11.9
11.8
9.6
8
1.77
FY18
(1.9)
(2.2)
16.9
14
2.4
FY17
13.8
(90.5)
120.4
100
2.53
FY16
10.3
25.6
24.1
20
3.19
58
a2b Annual Report 2020
Remuneration Report (continued)
Executive remuneration in FY20
The statutory remuneration of each executive KMP in FY20 is set out in the table below.
Table 6: FY20 executive KMP remuneration (statutory)
Short-term benefits
Post employment benefits
Share
based
payments
Salary and
fees
$
STI
$
Non-cash
benefits 1
$
Super-
annuation
contribu-
tions
$
Termination
benefits
$
Other
long-term
employee
benefits
$
Performance
related rem
% of total
rem 2
Total
$
LTI
$
Executive
Andrew
Skelton
Adrian
Lucchese
Deon
Ludick
Fred
Lukabyo
Stuart
Overell
Ton van
Hoof
Total
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
804,022
210,000 3
16,740
21,003
779,469
360,000 4
59,848
20,531
399,010
85,000
16,997
21,003
389,468
135,000
5,324
20,531
429,029
72,500
10,259
24,399
399,469
131,250
445,986
–
–
–
20,531
–
–
–
–
–
–
27,727
189,440
1,268,932
31.48%
53,413
82,404
1,355,665
32.63%
7,474
3,658
3,025
94,720
624,204
28.79%
46,428
600,409
30.22%
83,525
622,737
25.05%
658
45,732
597,640
29.61%
42,005
286,312
9,656
88,193
872,152
10.11%
429,469
110,000
13,394
20,531
404,014
68,250
394,509
110,000
–
–
21,003
20,531
379,020
71,625
26,839
21,003
329,468
133,125
15,296
20,531
–
–
–
–
–
12,604
49,003
635,001
25.04%
10,932
94,720
598,919
27.21%
–
46,428
571,468
27.37%
3,823
2,190
63,025
565,335
23.82%
25,232
525,842
30.11%
2020
2,861,081
507,375
70,835
150,416
286,312
62,637
613,623
4,552,279
24.62%
2019
2,721,852
979,375
93,863
123,186
–
72,523
295,227
4,286,025
29.74%
1 Movements in accruals for annual leave and reportable fringe benefits are disclosed as non-cash benefits. Other long-term employee benefits
represent provisions for long service leave.
This represents the percentage of the total remuneration that relates to performance.
$52,500 is deferred and will be paid in two equal instalments of $26,250 the first in July 2021 and the second in July 2022.
$90,000 is deferred and will be paid in two equal instalments of $45,000 the first in July 2020 and the second in July 2021.
2
3
4
LTI awards held by executive KMP
Details of all outstanding rights granted to executive KMP as LTI awards are set out in the table below. The tranche of performance
rights under the LTI plan granted for the performance period 1 July 2015 – 30 June 2019 were tested in September 2019 and, due
to regulatory and market disruption and disruptors, did not vest and lapsed immediately as the performance conditions attached
to the rights, being an absolute TSR and a compound annual growth hurdle, were not achieved. Further details are shown in table 11
on page 63.
59
Table 7: LTI rights held by executive KMP
Executive
Grant Date
Andrew Skelton
1 July 2020
21 February 2019
22 February 2018
30 January 2017
Adrian Lucchese
1 July 2020
21 February 2019
15 February 2018
30 January 2017
Deon Ludick
1 July 2020
21 February 2019
15 February 2018
30 January 2017
Fred Lukabyo
21 February 2019
15 February 2018
19 June 2017
Stuart Overell
1 July 2020
21 February 2019
15 February 2018
30 January 2017
Ton van Hoof
1 July 2020
21 February 2019
Performance
period
1 July 2019
– 30 June 2022
1 July 2018
– 30 June 2021
1 July 2017
– 30 June 2021
1 July 2016
– 30 June 2020
1 July 2019
– 30 June 2022
1 July 2018
– 30 June 2021
1 July 2017
– 30 June 2021
1 July 2016
– 30 June 2020
1 July 2019
– 30 June 2022
1 July 2018
– 30 June 2021
1 July 2017
– 30 June 2021
1 July 2016
– 30 June 2020
1 July 2018
– 30 June 2021
1 July 2017
– 30 June 2021
1 July 2016
– 30 June 2020
1 July 2019
– 30 June 2022
1 July 2018
– 30 June 2021
1 July 2017
– 30 June 2021
1 July 2016
– 30 June 2020
1 July 2019
– 30 June 2022
1 July 2018
– 30 June 2021
Number
of rights
granted
275,862
179,372
Performance conditions Vesting date
Absolute TSR hurdle
and indexed TSR
Absolute TSR hurdle
and indexed TSR
September 2022
September 2021
222,222
Absolute TSR hurdle
14 September 2021
124,611
137,931
89,686
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and indexed TSR
Absolute TSR hurdle
and indexed TSR
14 September 2020
September 2022
September 2021
111,111
Absolute TSR hurdle
14 September 2021
62,305
137,931
89,686
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and indexed TSR
Absolute TSR hurdle
and indexed TSR
14 September 2020
September 2022
September 2021
83,333
Absolute TSR hurdle
14 September 2021
31,153
89,686
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and indexed TSR
14 September 2020
September 2021
83,333
Absolute TSR hurdle
14 September 2021
46,729
137,931
89,686
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and indexed TSR
Absolute TSR hurdle
and indexed TSR
14 September 2020
September 2022
September 2021
111,111
Absolute TSR hurdle
14 September 2021
62,305
137,931
89,686
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and indexed TSR
Absolute TSR hurdle
and indexed TSR
14 September 2020
September 2022
September 2021
60
a2b Annual Report 2020
Remuneration Report (continued) 5. Non-executive Director fee arrangements
Board and committee fees
Non-executive Director (“NED”) fees are paid out of an aggregate fee pool of $1.3 million per annum which was approved
by shareholders on 26 November 2014. The fee pool is inclusive of statutory entitlements (including superannuation).
When recommending the aggregate fee pool for shareholder approval, the Board considers the fees required to attract and
retain NEDs with the necessary skills and experience whilst incurring a cost acceptable to our shareholders.
NED fees consist of Board fees and committee fees. The payment of additional fees for serving on a committee recognises
the additional time commitment required by NEDs. The Chairman of the Board is not eligible for additional fees for serving
on committees. Fees are not linked to performance and no STI or LTI is provided to NEDs.
Fees in FY20
In August 2019, the Committee reviewed the NED fees for FY20. Having taken into account the Committee’s recommendation,
the Board determined an increase in the RANC Chairman fees from $16,000 to $20,000 and a 2.5% NED fee increase (rounded
to the nearest thousand) for all Chairman and Member fees for FY20.
The table below summarises NED fees payable in respect of FY20.
Table 8: Board and committee fees
Board
Audit and Risk Committee
Remuneration and Nominations Committee
Chairman
$
226,000
21,000
21,000
Member
$
103,000
11,000
11,000
The Board and committee fees outlined in the table above include statutory superannuation contributions. NEDs do not receive
retirement benefits other than statutory superannuation.
NED remuneration in FY20
The statutory remuneration of each NED for FY20 is set out in the table below.
Table 9: FY20 NED remuneration (statutory)
Paul Oneile
Chairman
David Grant
Non-executive Director
Louise McCann
Non-executive Director
Richard Millen
Non-executive Director
Clifford Rosenberg 1
Non-executive Director
Total fees
Short-term
benefits
Salary and fees
$
Post-
employment
benefits
Superannuation
contributions
$
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
206,397
200,913
9,936
–
123,293
114,840
109,659
106,004
125,000
122,000
574,285
543,757
19,608
19,087
944
–
11,713
10,910
25,343
24,996
–
–
57,608
54,993
1 Mr Rosenberg’s fees were invoiced and paid monthly to Rosenberg Trading Pty Ltd, a personal services company nominated by him.
Total
$
226,005
220,000
10,880
–
135,006
125,750
135,002
131,000
125,000
122,000
631,893
598,750
61
6. Additional disclosures relating to securities
Shares
In order to align the interests of NEDs with the Company’s shareholders, the Board has adopted a policy that requires each
NED to accumulate a minimum shareholding equivalent to their annual base fee. NEDs who were members of the Board before
20 June 2016 have three years from this date to meet the expected level of share ownership. NEDs appointed after 20 June 2016
have three years from their appointment date to meet the expected level of share ownership.
In light of the COVID-19 pandemic, the Board resolved in April to suspend the requirement for NEDs to comply with a minimum
shareholding level under the policy for 12 months and re-evaluate the policy and requirement at that time.
Executive KMP are granted rights under the LTI plan which convert into shares on the achievement of performance measures.
The second tranche of performance rights under the LTI plan granted for the performance period 1 July 2015 – 30 June 2019 were
tested in September 2019 and, due to regulatory and market disruption and disruptors, did not vest and lapsed immediately as the
performance conditions attached to the rights, being an absolute TSR and a compound annual growth hurdle, were not achieved.
Further details are shown in table 11 on page 63.
The relevant interests of each KMP (and their related parties) in the share capital of the Company for FY20 are detailed in the
table below.
Table 10: Shareholdings of KMP and their related parties
Balance 1 July 2019
Received as remuneration
Net other change
Balance 30 June 2020
Direct
interest
Indirect
interest
Direct
interest
Indirect
interest
Direct
interest
Indirect
interest
Direct
interest
Indirect
interest
Non-executive Director
Paul Oneile 1
Louise McCann 2
Richard Millen 3
Clifford Rosenberg 4
David Grant
Executive
Andrew Skelton
Adrian Lucchese
Deon Ludick
Fred Lukabyo
Stuart Overell
Ton van Hoof
–
–
–
–
–
6,861
3,856
–
2,450
–
–
56,968
33,800
60,000
111,307
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
50,000
–
50,000
–
–
–
–
14000
–
–
–
–
10,565
15,000
–
–
–
–
–
–
–
–
–
–
–
–
–
20,861
3,856
–
2,450
–
10,565
56,968
48,800
60,000
111,307
–
–
–
–
–
–
–
1
2
3
4
56,968 fully paid ordinary shares held by PNM Management Pty Ltd atf the Kyambra Superannuation Fund.
48,800 fully paid ordinary shares held by Tyrrell McCann Pty Ltd atf the Tyrrell McCann Superannuation Fund.
60,000 fully paid ordinary shares held by Woor Pty Ltd atf the Millen Superannuation Fund.
111,307 fully paid ordinary shares held by Cliffro Pty Ltd atf the Cliffro Trust.
62
a2b Annual Report 2020
Remuneration Report (continued) Rights
The table below details the performance rights granted to executive KMP under the LTI plan as part of their remuneration.
Table 11: Rights granted under the LTI plan to executive KMP
Executive
Balance
1 July 2019
Number
of rights
granted
in FY20 1
Value
of rights
granted
in FY20
Net other
change
Vested
Value
of rights
vested
Andrew Skelton
604,829
275,862
400,000
Adrian Lucchese
Deon Ludick
Fred Lukabyo 2
Stuart Overell
Ton van Hoof
289,349
204,172
219,748
289,349
89,686
137,931
137,931
–
137,931
137,931
200,000
200,000
–
200,000
200,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Lapsed
78,624
26,247
–
–
Balance
30 June 2020
802,067
401,033
342,103
219,748
26,247
401,033
–
227,617
1
For performance rights granted as remuneration, the fair value is $680,276. The fair value has been calculated by an independent advisor
as at the date of grant, using a Monte Carlo simulation model for the total shareholder return ($0.79 per absolute TSR right and $0.87 per
relative TSR right).
2 Mr Lukabyo resigned on 30 June 2020.
7. Transactions with KMP and their related parties
No loans were made, guaranteed, or secured, to KMP or any of their related parties.
There were no transactions between the Company (or any of its controlled entities) and any KMP (or their related parties)
other than those within the normal employee, customer or supplier relationship on terms no more favourable than arms’
length. Information about these transactions would not adversely affect investment decisions by shareholders, or the
discharge of accountability by KMP.
8. Shareholder voting for the 2019 Remuneration Report
The Company received a “yes” vote on 99% of votes cast on its Remuneration Report for the 2019 financial year. The Board
is committed to ongoing and transparent engagement with all stakeholders. It will continue to review the effectiveness
of the Company’s remuneration practices and their alignment with strategic performance objectives to appropriately reward
its executives and deliver shareholder value.
63
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of A2B Australia Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of A2B Australia Limited for the financial year
ended 30 June 2020 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
Cameron Slapp
Partner
Sydney
25 August 2020
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
64
a2b Annual Report 2020
Auditor’s Independence Declaration Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
1. Reporting entity
2. Basis of preparation
3. Revenue and other income
4. Finance income
5.
Income tax expense
6. Trade and other receivables
7.
Inventories
8. Financial assets
9. Business combination
10. Property, plant and equipment
11. Deferred tax assets and liabilities
12. Taxi plate licences
13. Goodwill
14. Intellectual property
15. Contract liabilities, trade and other payables
16. Loans and borrowings
17. Provisions
18. Share capital and Reserves
19. Dividends
20. Earnings per share
21. Dividend franking balance
22. Parent entity disclosures
23. Deed of Cross Guarantee
24. Related Party and Key Management Personnel disclosures
25. Remuneration of auditors
26. Particulars relating to controlled entities
27. Capital expenditure commitments
28. Contingencies
29. Leases
30. Notes to the consolidated statement of cash flows
31. Financial instruments and financial risk management
32. Operating segment
33. Share-based payment – Long term incentive
34. Subsequent event
Directors’ Declaration
Independent Auditor’s Report
66
67
68
69
70
70
70
72
75
75
76
78
78
79
83
85
86
88
90
92
92
92
94
95
96
96
97
98
100
100
101
102
102
102
105
106
110
110
111
112
113
65
Consolidated Financial Statementsfor the year ended 30 June 2020 Revenue
Other income
Processing fees to taxi networks
Brokered taxi plate licence costs
Other taxi related costs
Taxi operating expenses
Courier service expenses
Employee benefits expenses
Cost of cars and hardware sold
General and administrative expenses
Depreciation
Amortisation
Impairment charges
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance costs
(Loss)/Profit before income tax
Income tax benefit/(expense)
(Loss)/Profit after tax for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences, net of tax
Items that will not be reclassified to profit or loss:
Net change in fair value of financial assets
Other comprehensive loss for the year, net of income tax
Total comprehensive (loss)/income for the year
Attributable to:
Owners of the Company
Non-controlling interest
Total (loss)/profit for the year
Owners of the Company
Non-controlling interest
Total comprehensive (loss)/income for the year
Earnings per share
Basic earnings per share
Diluted earnings per share
Notes
3
3
10 & 29
12 & 14
12 & 14
4
5
2020
$'000
2019
$'000
170,894
197,943
9,010
(6,461)
259
(6,707)
(18,592)
(21,963)
(5,572)
(8,985)
(3,198)
(6,322)
(7,057)
(3,048)
(66,696)
(62,179)
(6,330)
(40,198)
(14,051)
(3,720)
(14,983)
(15,653)
(6,559)
(40,165)
(11,069)
(3,481)
–
(11,883)
(24,535)
17,769
77
(1,416)
(1,339)
214
(804)
(590)
(25,874)
17,179
2,179
(5,296)
(23,695)
11,883
(52)
(83)
(477)
(529)
(498)
(581)
(24,224)
11,302
(23,820)
11,822
125
61
(23,695)
11,883
(24,349)
11,241
125
61
(24,224)
11,302
20
20
(19.8 cents)
9.8 cents
(19.8 cents)
9.8 cents
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the consolidated
financial statements.
66
a2b Annual Report 2020
Consolidated Statement of Comprehensive Income for the year ended 30 June 2020 Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total current assets
Non-current assets
Trade and other receivables
Financial assets
Property, plant and equipment
Right-of-use assets
Net deferred tax assets
Taxi plate licences
Goodwill
Intellectual property
Total non-current assets
Total assets
Current liabilities
Contract liabilities, trade and other payables
Loans and borrowings
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Other reserves
Profits reserve
Retained earnings
Total equity attributable to owners of the Company
Non-controlling interest
Total equity
Notes
30
6
7
6
8
10
29
11
12
13
14
15
16
29
17
29
17
18
18
2020
$'000
25,759
34,217
3,009
3,987
2019
$'000
19,172
72,559
3,401
5,324
66,972
100,456
5,624
1,298
39,740
17,820
6,122
3,275
27,487
22,328
4,880
2,186
38,923
–
4,111
17,459
25,708
21,185
123,694
190,666
114,452
214,908
29,509
2,031
2,262
4
8,267
42,073
15,926
1,345
17,271
59,344
37,913
2,701
–
1,120
7,527
49,261
–
1,561
1,561
50,822
131,322
164,086
138,325
138,325
433
18,823
(27,305)
71
–
25,513
130,276
163,909
1,046
177
131,322
164,086
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated financial statements.
67
Consolidated Statement of Financial Position as at 30 June 2020 Cash flows from operating activities
Receipts from customers and others
Payments to suppliers, licensees and employees
Dividends received
Interest received
Finance costs paid
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Payments for development of intellectual property
Acquisition of business assets, net of cash acquired
Proceeds from sale of property, plant and equipment
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payment of lease liabilities
Dividends paid to equity holders
Dividends paid to non-controlling interest in subsidiaries
Net cash (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Effect of movements in exchange rates on cash held
Cash and cash equivalents at 30 June
Notes
2020
$'000
2019
$'000
989,728
1,196,468
(949,794)
(1,166,085)
387
77
(1,165)
(1,258)
37,975
261
214
(681)
(3,786)
26,391
(11,542)
(10,084)
(5,694)
(3,363)
2,259
(6,135)
(4,406)
1,114
(18,340)
(19,511)
20,242
(21,002)
(2,597)
(9,634)
(70)
(13,061)
6,574
19,172
13
349
(700)
–
(9,634)
–
(9,985)
(3,105)
22,253
24
30
30
30
30
19
30
25,759
19,172
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial statements.
68
a2b Annual Report 2020
Consolidated Statement of Cash Flows for the year ended 30 June 2020 Balance at 1 July 2019
138,325
71
Share
capital
$'000
Other
reserves
$'000
Profits
reserves
$'000
Notes
Total comprehensive income
for the year
Profit for the year
Other comprehensive income
Total comprehensive income
for the year
Transactions with owners in their
capacity as owners
Transfer of reserves
Transfer to profits reserve
Share-based payments
Dividends to equity holders
Dividends to non-controlling interest
in subsidiaries
Changes in ownership interest
Acquisition of subsidiary with NCI
Balance at 30 June 2020
Balance at 1 July 2018
Effects of transition to AASB 9,
net of tax
Balance at 1 July 2018 after the
transition to AASB 9
Total comprehensive income
for the year
Profit for the year
Other comprehensive income
Total comprehensive income
for the year
Transactions with owners in their
capacity as owners
33
19
–
–
–
–
–
–
–
–
–
–
138,325
138,325
–
–
–
–
–
–
–
–
Share-based payments
Dividends to equity holders
33
19
Changes in ownership interest
Acquisition of subsidiary with NCI
Balance at 30 June 2019
138,325
138,325
348
Retained
earnings
$'000
25,513
Non-
controlling
interest
$'000
Total
equity
$'000
177
164,086
(23,820)
–
125
–
(23,695)
(529)
(23,820)
125
(24,224)
–
–
–
–
–
(541)
23,640
(23,640)
–
–
(4,817)
(4,817)
–
–
891
18,823
(28,998)
–
–
–
–
(70)
(70)
–
–
350
(9,634)
(70)
(9,354)
–
–
814
814
18,823
(27,305)
1,046
131,322
–
–
–
–
–
–
–
–
–
–
–
23,522
(197)
23,325
11,822
–
11,822
–
(9,634)
(9,634)
–
25,513
–
–
–
61
–
61
–
–
–
162,195
(197)
161,998
11,883
(581)
11,302
304
(9,634)
(9,330)
116
177
116
164,086
–
(529)
(529)
541
–
350
–
–
–
433
348
–
–
(581)
(581)
304
–
304
–
71
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated financial statements.
69
Consolidated Statement of Changes in Equity for the year ended 30 June 2020 1. Reporting entity
A2B Australia Limited (the “Company”) is a company domiciled in Australia. The address of the Company’s registered office
is 152-162 Riley Street, East Sydney. The Consolidated Financial Statements as at and for the year ended 30 June 2020 comprise
the Company and its subsidiaries (together referred to as the “Group”). The Group is a for-profit entity and during the year ended
30 June 2020 was involved in providing technology, payment and Taxi related services.
2. Basis of preparation
Statement of compliance
The Consolidated Financial Statements are general purpose financial statements which have 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 statements comply with International Financial Reporting Standards (“IFRSs”) adopted by the
International Accounting Standards Board (“IASB”).
The Consolidated Financial Statements were authorised for issue by the Board of Directors on 25 August 2020.
Going concern
The spread of novel coronavirus (COVID-19) was declared a public health emergency by the World Health Organisation
on 31 January 2020 and upgraded to a global pandemic on 11 March 2020. The rapid rise of the virus has seen an unprecedented
global response by Governments, regulators and industry sectors. The Australian Federal Government enacted its emergency plan
on 29 February 2020 which has seen the closure of Australian borders from 20 March, an increasing level of restrictions on corporate
Australia’s ability to operate, significant volatility and instability in financial markets and the release of a number of government
stimulus packages to support individuals and businesses as the Australian and global economies face significant slowdowns and
uncertainties. Subsequent to year end more stringent measures have been put in place across states in which the Group has
operations, and in particular Victoria. For the year ended 30 June 2020, COVID-19 has impacted the Group, specifically as follows:
•
Significant revenue reduction following a decline in Taxi fares processed and affiliated fleet. Total revenue reduced $27 million
or 13.7% vs FY19.
•
A number of financial support measures were put in place to assist Drivers and Operators in delivering an essential service
through these uncertain times.
• MTI supported its global customer base by charging nominal support fees in April, May and June 2020.
These impacts have been partially mitigated through cost reduction measures ($4.1 million), the Governments JobKeeper program
($6.9 million) and a range of other initiatives. Cost reduction measures included a temporary stand down of 350 staff members,
termination of agreements with external contractors, temporary closure of branch offices in Sydney and Melbourne, deferral
of capital expenditure, suspension of a range of marketing initiatives, and cessation of non-essential travel and consulting spend.
As of 30 June 2020, the Group had net working capital of $7.7 million, cash and cash equivalents of $25.8 million and had
a committed, undrawn finance facility of $50.0 million. On 14 August 2020 the Group renegotiated its debt facilities, with the new
facility replacing the existing facility from that date. The new finance facility has a limit of $25 million and expires on 1 July 2023.
The new facility also provides a waiver for the interest cover financial covenant for the 12-month period to 30 June 2021.
Management has prepared cash flow forecast scenarios that present plausible downside scenarios to the business arising from the
impacts of COVID-19 over the next 18 months. These forecasts demonstrate that the Group has sufficient cash and undrawn credit
facilities to enable the Group to meet its obligations as they fall due.
As such the directors believe that it remains appropriate to prepare the financial statements on a going concern basis and have
a reasonable expectation that the Group will comply with the requirements of its debt facilities during the next 18 months.
Basis of measurement
The Consolidated Financial Statements have been prepared on the historical cost basis except for financial assets (unlisted
investments), which are measured at fair value through other comprehensive income.
70
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 Functional and presentation currency
These Consolidated Financial Statements are presented in Australian dollars, which is the Company’s functional currency and the
functional currency of the majority of the Group entities.
The Company is of a kind referred to in ASIC Corporation Instrument 2016/191 (Rounding in Financial/Directors’ Reports) and
in accordance with that Instrument, amounts in the Consolidated Financial Statements and the Directors’ Report have been
rounded off to the nearest thousand dollars, unless otherwise stated.
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the
dates of the transactions.
Use of estimates and judgements
The preparation of Consolidated Financial Statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amount recognised in the Consolidated Financial Statements are described in the
following notes:
• Note 6
Trade and other receivables
• Note 8
Financial assets
• Note 12 Taxi plate licences
• Note 13 Goodwill
• Note 14
Intellectual property
• Note 17 Provisions
• Note 31 Financial instruments and financial risk management
The Group has specifically exercised judgement in evaluating the impact of COVID-19 on the areas noted above.
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing
the Consolidated Financial Statements. Unrealised gains arising from transactions with equity accounted investees are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment
Changes in accounting standards
The Group adopted AASB 16 Leases from 1 July 2019. The impact of this standard is described below:
AASB 16 Leases
AASB 16 removes the classification of leases as either operating leases or finance leases, resulting in almost all leases being
recognised on the balance sheet. Under the new standard an asset (the right to use the leased item) and a financial liability
to pay rentals are recognised. It replaces AASB 117 Leases.
The Group has adopted this standard using the modified retrospective approach, whereby the cumulative effect of adopting
AASB 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 July 2019, with no restatement
of comparative information. Previously, the Group classified property leases as operating leases under AASB 117. On transition,
lease liabilities are measured at the present value of the remaining lease payments, using the Group’s incremental borrowing rate
as at 1 July 2019. Right-of-use assets are measured at an amount equal to the lease liabilities.
71
The Group has elected to use the following practical expedient when applying AASB 16 to leases previously classified as operating
leases under AASB 117.
•
Applied a single discount rate to a portfolio of leases with similar characteristics.
The Group’s accounting for leases as a lessor remains unchanged under AASB 16.
Impact on the Consolidated Financial Statements
The Group has not adjusted comparative information and the Consolidated Financial Statements on initial application of the
standard have been adjusted as follows:
$’000
Non-current assets
Right-of-use asset
Current liabilities
Lease liabilities
Non-current liabilities
Lease liabilities
At 30 June 2019
(previously reported)
Effects on transition
to AASB 16
At 1 July 2019
(after the transition
to AASB 16)
–
–
–
19,872
19,872
(2,308)
(2,308)
(17,564)
(17,564)
During the year the Group recognised $2,965,000 of depreciation charges and $621,000 of interest costs from these leases, instead
of operating lease expenses.
When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments using its
incremental borrowing rate at 1 July 2019. The weighted-average rate applied is 3.21%.
Operating lease commitments at 30 June 2019 as disclosed under AASB 117 in the Group's
Consolidated Financial Statements
Discounted using the incremental borrowing rate at 1 July 2019
Variable lease payments based on an index or rate
Lease liabilities recognised at 1 July 2019
At 1 July 2019
$'000
23,205
18,901
971
19,872
There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
3. Revenue and other income
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf
of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.
The following is a description of the Group’s principal activities from which the Group generates its revenue:
Taxi service fee income
Taxi service fee income is derived from Taxi payments processed through the A2B Payment System and is disclosed net of Goods
and Services Tax (“GST”) and third party credit card fees. As the Group acts in the capacity of an agent, the revenue represents only
the fee received on the transaction, although the Group is exposed to credit risk on the full amount of the Taxi payments proceeds.
Taxi service fee income is recognised at the point in time when the payment is processed.
Network subscription fee and Taxi plate licence incomes
Network subscription fee and Taxi plate licence incomes are billed every month in advance. Revenue is recognised over the period
when the services are provided. Operating revenue receipts relating to services performed in the period beyond the current financial
year are shown in the Consolidated Statement of Financial Position as contract liabilities under the heading of Current liabilities
– Contract liabilities, trade and other payables, refer to Note 15.
72
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Other Taxi related services income
Other Taxi related services income is generated from fit-out of vehicles as Taxis, repair and replacement of in-vehicle Taxi
equipment. Revenue is recognised over the period when the services are provided, or a point in time when the Group has
transferred the control to the buyer through ownership, generally when the customer has taken delivery of the goods.
Taxi operating income
Taxi operating income is derived from the rental of vehicles to Independent Drivers. This revenue is recognised at a point in time
or over time when services are rendered, whichever is applicable.
Courier service income
Courier service income is generated from providing courier dispatch services to Customers, of which revenue is recognised at point
in time when services are rendered. Revenue is also generated from subscriptions by courier agents, which is recognised over the
period when the services are rendered.
Insurance commission revenue
Insurance commission revenue comprised of brokerage fees received from referral to insurance products. Revenue is recognised
at point in time when the referral has been fully rendered.
Hardware sales
Sales of hardware is recognised at point in time when the Group has transferred the control to the buyer through ownership,
generally when the customer has taken delivery of the goods. Hardware sales primarily relates to sale of Taxi equipment.
Car sales income
Car sales income is generated through the sale of cars to Taxi Operators. This revenue is recognised at a point in time when the
ownership of the car is transferred to Customers.
School bus route services revenue
School bus route services revenue is based on contracts for these services with State Government. It is billed weekly in arrears and
recognised over the period when services are rendered.
Taxi subsidy scheme revenue
The Taxi Subsidy Scheme (“TSS”) revenue is derived from providing services to issue TSS cards and process Taxi travel transactions
of TSS participants in some States and Territories. It is billed monthly in arrears and is recognised over the period when services
are rendered.
Software consulting and licence income
Software consulting and licence income is derived through the provision of a software license to a licensee for the return of a fixed
fee. Software consulting income is derived in relation to payment consulting and software development. It is recognised over time
when services are rendered.
Other revenue
Other revenue is generated from ancillary Taxi operations. It is recognised at a point in time or over time, whichever is applicable,
when services are rendered.
Interest on finance lease receivables
Interest earned on vehicle and insurance loans is recognised on a basis reflecting a constant periodic return based on the lessor’s
net investment outstanding in respect of the loan.
Taxi equipment and terminal rental income
Taxi equipment and terminal rental income is derived from the rental of Taxi equipment and payment terminals. This revenue
is recognised at a point in time or over time when services are rendered, whichever is applicable.
73
Revenues
Revenue from contracts with customers
Taxi service fee income
Network subscription fee income
Brokered taxi plate licence income
Owned taxi plate licence income
Other taxi related services income
Taxi operating income
Courier service income
Insurance commission revenue
Hardware sales
Car sales income
School bus route services income
Taxi Subsidy Scheme Revenue
Software consulting and licence income
Other
2020
$'000
32,806
60,735
18,300
3,207
5,172
12,349
4,564
1,064
769
5,246
5,758
1,845
6,063
7,045
2019
$'000
42,074
76,748
23,467
3,225
6,312
11,642
4,391
1,550
920
5,999
4,327
1,966
5,054
5,606
Total revenue from contracts with customers
164,923
193,281
Other revenue
Interest on finance lease receivables and others
Taxi equipment and terminal rental income
Total other revenue
Total revenue
1,256
4,715
5,971
1,120
3,542
4,662
170,894
197,943
For more information about receivables and contract liabilities from contract with customers, refer Note 6 and 15, respectively.
The Group has elected to apply the following practical expedient under AASB 15 whereby information on future performance
obligations has not been disclosed as performance obligations form part of a contract that has an original expected duration
of one year or less.
Other income
Government grants
Gain on disposal of property, plant and equipment
Total other income
Government grants
2020
$'000
8,716
294
9,010
2019
$'000
–
259
259
The Group has recognised grants from the Government at their fair value where there is a reasonable assurance that grants
will be received. Government grants (JobKeeper payment, payroll tax refunds and Taxi industry stimulus support package) are
presented as part of other income.
Total turnover
Total turnover does not represent revenue in accordance with Australian Accounting Standards. Total turnover represents the value
of Taxi hire charges (fares) paid through the Cabcharge Payment System plus Cabcharge’s Taxi service fee plus the Group’s revenue
from other sources. A2B’s credit risk is based on turnover rather than revenue.
The receipts from customers and others as disclosed in the consolidated statement of cash flows includes the total turnover.
74
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 4. Finance income
Finance income comprises interest income on funds invested and foreign currency gains. Interest income is recognised as it accrues
using the effective interest method.
Finance income
Gain on foreign exchange fluctuation
Interest income
Total finance income
5. Income tax expense
2020
$'000
2019
$'000
–
77
77
26
188
214
Income tax expense comprises current and deferred tax. Income tax expense is recognised except to the extent that it relates
to a business combination or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
A2B Australia Limited and its wholly owned Australian resident subsidiaries form a tax consolidated group. The current tax rate
applicable to the group is 30%.
Amounts recognised in profit and loss
Current income tax expense
Current year
Adjustment for prior years
Deferred tax expense
Origination and reversal of temporary differences
Derecognition of previously recognised tax losses
Total income tax (benefit)/expense
2020
$'000
(1,906)
(386)
(2,292)
(1,373)
1,486
(2,179)
2019
$'000
5,968
43
6,011
(715)
–
5,296
Amounts recognised in other comprehensive income
2020
Tax
(expense)
benefit
$'000
Before tax
$'000
Net of tax
$'000
Before tax
$'000
2019
Tax
(expense)
benefit
$'000
Net of tax
$'000
Items that may be reclassified
subsequently to profit or loss:
Foreign exchange translation
differences
Items that will not be reclassified
to profit or loss:
Net change in fair value of
financial assets
52
52
651
651
703
–
–
(174)
(174)
(174)
52
52
477
477
529
(83)
(83)
–
–
(83)
(83)
(712)
(712)
(795)
214
214
214
(498)
(498)
(581)
75
Numeric of reconciliation between tax expense and pre-tax profit
Profit before tax
Prima facie income tax using the corporate tax rate of 30% (2019: 30%)
Effect of tax rates in foreign jurisdiction
Add tax effect of:
Non-deductible depreciation
Non-allowable impairment charges
Other non-allowable items
Less tax effect of:
Rebateable fully franked dividends
Tax exempt dividends
Utilisation of previously unbooked tax losses
Adjustment for prior years – tax payable
Derecognition of previously recognised tax losses
Income tax (benefit)/expense
Effective tax rate on pre-tax profit
2020
$'000
(25,874)
(7,762)
(16)
101
4,495
82
(95)
(60)
(24)
(386)
1,486
(2,179)
8.4%
2019
$'000
17,179
5,154
(35)
102
–
194
(33)
(50)
(79)
43
–
5,296
30.8%
6. Trade and other receivables
Trade receivables are recognised initially at the value of the invoice sent to the Customer and subsequently at amortised cost using
the effective interest method. The amortised cost is reduced by impairment losses, interest income, foreign exchange gains and
losses and impairment are recognised in profit or loss. Any gains or losses on derecognition is recognised in profit or loss. The Group
derecognises a financial asset when contractual rights to the cash flows from the financial assets expire, or it transfers the rights
to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial
assets are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and
it does not retain control of the financial asset.
Finance lease receivables
When the Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to ownership
of an asset to the lessee, the arrangement is classified as a finance lease and a receivable equal to the net investment in the lease
is recognised and presented within trade and other receivables.
Impairment
For trade and other receivables (including the financial lease receivables), the Group recognises an allowance for expected credit
losses using the simplified approach allowed under AASB 9.
Expected credit losses are based on the difference between the contractual cash flows due and all the cash flows that the Group
expects to receive. The Group’s allowance for impairment reflects both specific doubtful debt provision and collective (portfolio)
loss impairment.
The collective loss allowance is determined based on the historical default percentage in each portfolio and adjusted for other
current observable and forward looking information as a means to estimate lifetime expected credit losses for assets.
In assessing the combined collective loss allowance and specific doubtful debts provision as at 30 June 2020, the Group has
considered the increased risk arising from the economic impacts of the COVID-19 pandemic. The Group has specifically assessed
the economic circumstances of individual customers in the current environment, resulting in a material year on year increase
in the level of accumulated losses relative to the gross trade receivables balance.
76
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering
a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and
amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery
from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order
to comply with the Group’s procedures for recovery of amounts due.
Current
Trade receivables
Accumulated impairment losses
Finance lease receivables
Other receivables
Non-current
Finance lease receivables
Movement in allowance for impairment
Opening balance
Effects of transition to AASB 9
Balance after the transition to AASB 9
Net remeasurement in allowance for impairment
Amount written off as uncollectable
Closing balance
Ageing of trade receivables
2020
$'000
2019
$'000
30,430
(6,323)
3,139
6,971
63,742
(2,275)
4,318
6,774
34,217
72,559
5,624
5,624
4,880
4,880
(2,275)
(1,365)
–
(2,275)
(6,199)
2,151
(282)
(1,647)
(1,360)
732
(6,323)
(2,275)
Not past due
Past due 1–30 days
Past due 31–60 days
Past due 61–90 days
Past due over 90 days
2020
2019
Gross
$'000
Impairment
$'000
Net
$'000
Gross
$'000
Impairment
$'000
19,733
(1,662)
18,071
53,594
2,566
1,608
1,840
4,683
30,430
(142)
(316)
(422)
(3,781)
(6,323)
2,424
1,292
1,418
902
5,211
2,703
501
1,733
Net
$'000
53,496
5,194
1,225
500
1,052
(98)
(17)
(1,478)
(1)
(681)
24,107
63,742
(2,275)
61,467
The Group’s credit risk management policies are outlined in Note 31. There have been no changes to the credit risk management
policies during the year.
77
Finance lease receivables
Less than one year
Between one and five years
2020
2019
Future
minimum
lease
payments
$'000
3,887
6,359
Interest
$'000
748
735
10,246
1,483
Present value
of minimum
lease
payments
$'000
3,139
5,624
8,763
Future
minimum
lease
payments
$'000
4,318
4,880
9,198
Present value
of minimum
lease
payments
$'000
3,540
4,160
7,700
Interest
$'000
778
720
1,498
There have been no unguaranteed residual values. No lease payments are considered uncollectable at the reporting date.
No credit terms have been re-negotiated with Customers. Collateral is held in the case of finance lease receivables, where the
Group holds a lien over the leased asset. The market value of such collateral is not expected to vary materially from the net
investment value of the finance lease receivables.
There has been no change in credit risk policies during the financial year.
7. Inventories
Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a first-in, first-out basis and include
direct materials and the cost of purchase. Net realisable value is the estimated selling price in the ordinary course of business, less
the estimated costs of completion and selling expenses.
Motor vehicles – at cost
Parts, safety cameras and sundries – at cost
2020
$'000
337
2,672
3,009
2019
$'000
1,064
2,337
3,401
In 2020, inventories of $9,315,000 (2019: $11,582,000) were recognised as an expense during the year and included in “cost of cars
and hardware sold” and “other taxi related costs”.
8. Financial assets
Unlisted equity investments are recognised initially and subsequently at each reporting date at fair value. Unrealised gains and
losses arising from changes in fair value are recognised in other comprehensive income and presented in the fair value reserve
in equity. There is no subsequent reclassification of fair value gains and losses to profit or loss on derecognition of the investment.
Dividends from these investments are recognised in profit or loss when the Group’s right to receive payments is established.
These unlisted investments are primarily investments in unrelated Taxi Network operations where the shareholding held by the
Group is not sufficient to demonstrate significant influence. The Group has no intention to dispose of these unlisted investments
in the foreseeable future.
Unlisted investments
Shares in other corporations
78
a2b Annual Report 2020
2020
$'000
2019
$'000
1,298
1,298
2,186
2,186
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 9. Business combination
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which
control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net recognised amount of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with
a business combination are expensed as incurred.
Gold Coast Cabs
On 2 July 2019 the Group acquired the business operations and various assets of Gold Coast Cabs (“GCC”) for a purchase
consideration of $2.4 million. GCC is the Taxi network and operations business of Regent Taxis Ltd and has been trading for over
80 years on the Gold Coast providing transport services from Coolangatta to Omeau. The assets of GCC include a 33.3% share
in Tweed Heads Coolangatta Taxi Service Pty Ltd (“THCT”).
The Group owned a 22.2% share in THCT prior to this acquisition. In accordance with AASB 10, the Group assessed that it had
control of THCT on 2 July 2019. The results of the acquired business have been consolidated in the Group results from 2 July 2019.
The Group incurred acquisition related costs of $145,000 included in general administrative expenses.
Goodwill of $1,199,000 is attributable to the knowledge and expertise of the workforce, the location of the business acquired and
the synergies expected to be achieved. None of the goodwill recognised is expected to be deductible for tax purposes.
79
The fair value of the identifiable net assets and liabilities acquired as at the date of acquisition were as follows:
Cash and cash equivalent
Trade and other receivables
Inventory
Other current assets
Investments
Net deferred tax assets
Property, plant and equipment
Right-of-use assets
Taxi plates
Trade and other payables
Bank borrowings
Lease liabilities
Current tax liabilities
Employee entitlements
Fair value of identifiable net assets acquired
Non-controlling interest 1
Fair value of previously held equity interest
Consideration paid, satisfied in cash
Goodwill (refer to Note 13)
2 July 2019
$'000
35
646
34
26
84
86
1,811
231
492
(441)
(90)
(231)
(8)
(286)
2,389
(781)
(391)
(2,416)
1,199
1 Based on their proportionate interest in the fair value of identifiable net assets acquired.
The remeasurement to fair value of the Group’s existing 22.2% interest in THCT resulted in a gain of $197,000. This amount has
been included in “other comprehensive income”.
Impact of acquisition on the results of the Group
The Consolidated Statement of Comprehensive Income includes revenue of $4,532,000 and a net profit after tax of $309,000
as a result of the acquisition of GCC and THCT.
80
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Corporate Cabs Pty Ltd business
On 15 January 2020 the Group acquired the business of Corporate Cabs Pty Ltd, for a consideration of $900,000.
Goodwill of $465,000 is attributable to the knowledge and expertise of the workforce, the location of the business acquired
and the synergies expected to be achieved. None of the goodwill recognised is expected to be deductible for tax purposes.
The fair value of the identifiable net assets and liabilities acquired as at the date of acquisition were as follows:
Inventory
Net deferred tax assets
Property, plant and equipment
Right-of-use assets
Lease liabilities
Employee entitlements
Fair value of identifiable net assets acquired
Consideration paid, satisfied in cash
Goodwill (refer to Note 13)
15 January
2020
$'000
38
50
514
886
(886)
(167)
435
(900)
465
Impact of acquisition on the results of the Group
The Consolidated Statement of Comprehensive Income includes revenue of $160,000 and a net (loss) after tax of ($165,000)
as a result of the acquisition of Corporate Cabs Pty Ltd business. The Group has determined it impractical to disclose revenue and
net profit/(loss) included in the Consolidated Statement of Comprehensive Income had the acquisition occurred at the beginning
of the reporting period. The Group assessed that an objective determination of the revenue and net profit since the beginning
of the reporting period was not able to be made and as such disclosure has not been made.
Taxi Industry (Australia) Insurance Brokers Pty Ltd (“TIAIB”)
On 1 June 2020 TIAIB cancelled 540 shares held by Black & White Holdings Limited by way of a selective-share buy-back for
a consideration of $100,000. Immediately following the selective-share buy-back and shares cancellation, the Group holds
a majority of TIAIB’s share capital (61.6%).
Goodwill of $115,000 resulted from this selective-share buy-back and cancellation of shares.
The fair value of the identifiable net assets and liabilities acquired as at the date of acquisition were as follows:
Cash and cash equivalent
Trade and other receivables
Other current assets
Investments in other company
Trade and other payables
Current tax liabilities
Fair value of identifiable net assets acquired
Non-controlling interest 1
Fair value of previously held equity interest
Goodwill (refer to Note 13)
1 June 2020
$'000
62
47
3
25
(35)
(18)
84
(32)
(167)
115
1 Based on their proportionate interest in the fair value of identifiable net assets acquired.
The remeasurement to fair value of the Group’s existing 45% interest in TIAIB resulted in a loss of $67,000. This amount has been
included in “other comprehensive income”.
81
Impact of acquisition on the results of the Group
The Consolidated Statement of Comprehensive Income includes revenue of $2,000 and a net profit after tax of $4,000 as a result
of the business combination of TIAIB.
The revenue and net profit included in the Consolidated Statement of Comprehensive Income had the acquisition occurred at the
beginning of the reporting period are $259,000 and $122,000 respectively.
Mobile Technologies International Pty Ltd
On 9 November 2018 the Group purchased all of the issued shares in Mobile Technologies International Pty Ltd (“MTI”) for
a purchase consideration of $6.6 million inclusive of $1.5 million in deferred employee retention payments. MTI is a leading global
provider of Software as a Service (SaaS) automotive dispatch and booking technologies. MTI has an established presence in North
America, Europe, Australia and New Zealand, and is also the owner and operator of ManTax Taxis, the largest network of Black Cabs
in Manchester, England.
The Group incurred acquisition related costs of $401,000 included in general administrative expenses and $600,000 in employee
retention related cost recorded in employee benefits expenses.
The acquisition will fast track the creation of innovative dispatch and payment tools to deliver seamless outcomes for the personal
transport industry. The acquisition provides an opportunity to expand A2B’s customer reach and increases A2B’s ability to compete
with other fully integrated personal transport companies.
Goodwill of $0.6 million is attributable to the knowledge and expertise of the workforce and the locations of the business acquired.
None of the goodwill recognised is expected to be deductible for tax purposes.
The fair value of the identifiable assets and liabilities acquired are as follows:
9 Nov 18
$'000
1,051
2,140
647
214
372
2,780
196
(2,116)
(89)
(749)
4,446
(5,056)
610
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Property, plant and equipment
Intellectual property
Deferred tax assets
Trade and other payables
Current tax liabilities
Employee entitlements
Fair value of identifiable net assets acquired
Consideration paid, satisfied in cash
Goodwill (refer to Note 13)
82
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 10. Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the item.
Depreciation
Items of property (excluding freehold land), plant and equipment are depreciated at rates based upon their expected useful lives
using the straight-line method. Leased assets are depreciated over the shorter of the lease term and their useful lives.
The estimated useful lives of each major class of asset for the current and comparative periods are:
•
•
•
•
Buildings
Leasehold improvements
40 to 50 years
10 years
Furniture, fittings, plant and equipment
3 to 8 years
EFTPOS Equipment
4 to 8 years
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment and are recognised net within other income/other expense in profit
or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.
83
Impairment testing
If the recoverable amount of property, plant and equipment is less than its carrying value, an impairment charge is recognised
in the profit or loss, and the carrying value of the asset written-down to its recoverable amount. Should the recoverable amount
increase in future periods the carrying value may be adjusted to the lower of the recoverable value or the amortised cost of the
asset had it not been impaired.
2020 year:
Cost
Opening balance
Additions
Additions through acquisition
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation expense
Disposals
Closing balance
Net Book Value
Opening balance
Closing balance
2019 year:
Cost
Opening balance
Additions
Additions through acquisition
Reclassification
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation expense
Disposals
Closing balance
Net Book Value
Opening balance
Closing balance
84
a2b Annual Report 2020
Furniture,
fittings,
plant and
equipment
$'000
Land &
buildings
$'000
Eftpos
equipment
$'000
Total
$'000
14,518
70,029
43,834
128,381
268
1,031
–
15,817
9,333
1,295
(2,969)
77,688
1,941
11,542
–
(1,866)
2,326
(4,835)
43,909
137,414
(4,036)
(51,497)
(33,925)
(89,458)
(823)
–
(6,820)
1,364
(3,443)
(11,086)
1,506
2,870
(4,859)
(56,953)
(35,862)
(97,674)
10,482
10,958
18,532
20,735
9,909
8,047
38,923
39,740
Furniture,
fittings,
plant and
equipment
$'000
Land &
buildings
$'000
Eftpos
equipment
$'000
Total
$'000
12,949
1,569
–
–
–
14,518
61,644
42,858
117,451
8,290
372
1,293
(1,570)
70,029
976
10,835
–
–
–
372
1,293
(1,570)
43,834
128,381
(3,657)
(47,196)
(28,298)
(79,151)
(379)
(5,063)
(5,627)
(11,069)
–
762
–
762
(4,036)
(51,497)
(33,925)
(89,458)
9,292
10,482
14,448
18,532
14,560
9,909
38,300
38,923
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 11. Deferred tax assets and liabilities
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
•
Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss;
•
Temporary differences relating to investments in subsidiaries and associates to the extent that the Group is able to control
the timing or reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
•
Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Deferred tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible
temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse
change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income
to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
85
Recognised deferred tax assets and liabilities and the movements in these balances are set out below:
Opening
balance
$'000
Charged
to income
$'000
Charged
to OCI
$'000
Charged
to equity
$'000
Acquisitions
$'000
Closing
balance
$'000
2020 year:
Accumulated impairment losses
– receivables
Financial assets (unlisted
investment)
Employee entitlements
Accruals
Tax losses
Prepayments
Intellectual property
Other taxable temporary differences
2019 year:
Accumulated impairment losses
– receivables
Financial assets (unlisted
investment)
Employee entitlements
Accruals
Tax losses
Prepayments
Intellectual property
Other taxable temporary differences
12. Taxi plate licences
683
1,107
–
–
214
3,067
140
1,455
(376)
(675)
(397)
–
(23)
89
604
(94)
137
83
174
(202)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
136
–
–
–
–
–
1,790
186
3,180
229
2,059
(470)
(538)
(314)
4,111
1,903
174
(202)
136
6,122
409
189
–
85
–
2,538
99
1,467
(458)
(875)
(279)
2,901
–
333
41
(12)
82
200
(118)
715
214
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
196
–
–
–
–
–
683
214
3,067
140
1,455
(376)
(675)
(397)
214
85
196
4,111
Taxi and other licences acquired separately are reported at cost less accumulated amortisation and impairment losses. Taxi and
other licences with finite useful lives are amortised on a straight-line basis over their estimated useful lives of 50 years in current and
comparative periods. Taxi and other licences with indefinite useful lives are not amortised. Such assets are tested for impairment
in accordance with the accounting policy.
Impairment testing
Taxi plate licences with indefinite useful lives are tested for impairment annually, and whenever there is any indication that the asset
may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount
of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss.
86
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Composition and movement
2020 year:
Cost
Opening balance
Additions
Additions through acquisition
Impairment
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Closing balance
Net book value
Opening balance
Closing balance
2019 year:
Cost
Opening balance
Additions
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Closing balance
Net book value
Opening balance
Closing balance
Impairment considerations
Indefinite life
Finite life
50 year
renewable
$'000
$'000
10 year
$'000
Total
$'000
15,756
3,709
3,319
22,784
–
455
(13,332)
2,879
–
–
(1,203)
2,506
–
37
–
–
492
(14,535)
3,356
8,741
–
–
–
(2,006)
(3,319)
(5,325)
(141)
–
(141)
(2,147)
(3,319)
(5,466)
15,756
2,879
1,703
359
–
37
17,459
3,275
15,756
3,709
3,319
22,784
–
–
–
–
15,756
3,709
3,319
22,784
–
–
–
(1,912)
(3,319)
(5,231)
(94)
–
(94)
(2,006)
(3,319)
(5,325)
15,756
15,756
1,797
1,703
–
–
17,553
17,459
After assessing the recoverable amount of Taxi plate licences based on value-in-use, using a discounted projected cash flow model,
the Group determined that an impairment charge of $14,535,000 was required (FY19 $nil). To determine value-in-use, five scenarios
of free cash flows have been prepared based on estimated Taxi plate licence income for the forthcoming year plus annual growth
of between 0% to 20% for years two to five with weights of between 10% to 50% (FY19 0% – single projected free cash flow)
and a long term growth rate of 0% after five years (FY19 2.1%). A pre-tax discount rate of 13.5% (FY19 13.7%) was applied
in determining recoverable amount. This long term growth rate reflects an estimation of the long term rental income growth for taxi
plates and the discount rate is based on comparable industry market assumptions for the risk free rate, the market risk premium,
the cost of debt, the beta and an additional risk weighting for these assets. Following the impairment charge, the recoverable
amount of Taxi plate licences approximates the carrying value. An increase of 100 basis points in pre-tax discount rate would
result in further impairment of $227,000 and a decrease of 100 basis points in the long term growth rate would result in further
impairment of $229,000.
87
13. Goodwill
Goodwill arising on the acquisition of a subsidiary is included in intangible assets. For the measurement of goodwill at initial
recognition, refer to Note 9. Goodwill is subsequently measured at cost less accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from
the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset
in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Following changes in the way the Taxi Network business is managed and at what level performance of goodwill is monitored, there
has been a change in the composition of cash generating units. Consequently, three (previously six) independent cash generating
units have been identified against which goodwill has been allocated and for which impairment testing has been undertaken.
Comparatives have been restated with the goodwill allocation to the new CGU’s presented below.
Impairment considerations
For the purpose of impairment testing, goodwill is allocated to groups of Cash Generating Units (“CGU”), according to business
operation and/or geography of operation, which represent the lowest level at which the goodwill is monitored for internal
management purposes.
Goodwill is allocated to the Group’s CGU’s as set out below and assessment of the recoverable amount for each CGU has been
performed on a value-in-use basis using discounted cash flow projections. Although this approach is consistent with prior years
some adjustments have been made to reflect current uncertainties about the impact of COVID-19 on the broader economy,
trajectory of the economic recovery and the impact on the Group.
The impairment tests of the goodwill allocated to each CGU as per 30 June 2020 was based on five different scenarios for the five-year
period FY21–FY25. A base case scenario was prepared based on the budgeted EBITDA for the forthcoming year, COVID-19 recovery
assumptions for years two and three and an annual growth rate of 2.1% for years four and five and a long-term growth rate of 2.1%
(FY19 2.1%). A pre-tax discount rate of 12.4% (FY19 12.4%) was applied in determining recoverable amount. The long term growth
rate reflects the general estimated long term Australian economic growth and the discount rate is based on comparable industry
market assumptions for the risk free rate, the market risk premium, the cost of debt and the beta.
Under two high case scenarios cash flow improvements of 10% and 20% relative to the base case have been assumed. Under two
low case scenarios cash flow declines of 20% and 40% relative to the base case have been assumed.
A probability of occurrence for each scenario based on the estimated medium-term impact of COVID-19 was applied. This probability
was used to calculate a weighted average VIU for each CGU.
Other than disclosed below, the Group believes that for all CGU’s any reasonably possible change in the key assumptions would not
cause the carrying value of the CGU’s to exceed their recoverable amounts.
The valuation of the Taxi Network CGU assumes growth driven by an increased fleet and associated revenue. The recoverable
amount of the Taxi Network CGU currently exceeds its carrying value. This is based on a compound annual growth rate of -1% for
EBITDA over the period from FY19 (being unaffected by COVID-19) to the FY25 terminal year, as used in the base case scenario
noted above. A number of scenarios have been analysed and based on the modelling and analysis performed the recoverable
amount of the Taxi Network CGU is expected to be greater than its carrying value.
Management has identified that a reasonably possible unfavourable change in the five year compound annual EBITDA growth rate,
long term growth rate and discount rate assumptions in isolation and in the absence of any mitigating factors would result in the
carrying value of the Taxi Network CGU becoming equal to the recoverable amount.
88
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Individual changes in key assumptions used in the base case model that would result in nil headroom would be a decrease to -2.5%
in the 6 year compound annual EBITDA growth rate, a decrease to 1.3% in the long term growth rate and an increase to 10.3%
in the post-tax discount rate.
Cabcharge Payments
Mobile Technologies International
Taxi Network
2020 year:
Cost
Opening balance
Additions through acquisition
Impairment loss
Closing balance
2019 year:
Cost
Opening balance
Additions through acquisition
Impairment loss
Closing balance
Goodwill allocated
Impairment loss
CGU
CAB
MTI
TNW
2020
$'000
3,923
610
22,954
27,487
2019
$'000
3,923
610
21,175
25,708
2020
$'000
2019
$'000
–
–
–
–
–
–
–
–
CAB
$'000
MTI
$'000
TNW
$'000
Total
$'000
3,923
610
–
–
–
–
21,175
1,779
–
25,708
1,779
–
3,923
610
22,954
27,487
3,923
–
–
3,923
–
610
–
610
21,175
25,098
–
–
610
–
21,175
25,708
For more information about the goodwill additions through acquisition, refer to Note 9.
89
14. Intellectual property
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination primarily relating to customer contracts, software, trademarks and brand
names are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair
values can be measured reliably. The cost of such intangible assets is their fair value at the acquisition date.
Trademarks are considered to have indefinite useful lives and such assets are tested for impairment in accordance with the policy below.
Capitalised development costs
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources
to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour,
borrowing and overhead costs that are directly attributable to preparing the asset for its intended use. Other development
expenditure is recognised in profit or loss when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses.
Amortisation
Items of intellectual property are amortised at rates based upon their estimated useful lives using the straight-line method, and this
amortisation is recognised in profit or loss.
The estimated useful lives for current and comparative periods are as follows:
•
•
•
Customer contracts
Software
5 to 8 years
5 years
Capitalised development costs
4 to 8 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Impairment testing
Intangible assets with indefinite useful lives are tested for impairment annually, and whenever there is any indication that the asset
may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately
in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss.
Impairment considerations
With consolidation of the taxi operations business nationally, the Group has determined that the future economic benefits
of certain trademarks will not be realised as previously expected. Consequently, the recoverable amount of these trademarks
are assessed to be lower than the carrying value and an impairment loss of $333,000 has been recognised (FY19:$nil). For other
trademarks, the Group derived the recoverable amount on a value-in-use basis and determined that an impairment charge
of $115,000 was required (FY19 $nil). In assessing the recoverable amount of trademarks and brand names, the Group has applied
pre-tax discount rate of 13.3% (FY19 13.6%), an annual growth rate of between 0% to 2% (FY19 2.1%) over the next five years and
long term growth rate of 0% to 2% (FY19 2.1%). An increase of 100 basis points in pre-tax discount rate would result in a further
impairment of $4,000 and a decrease of 100 basis points in the long term growth rate would result in further impairment of $5,000.
90
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Indefinite life
Finite life
Trademarks
$'000
Brands
$'000
Customer
contracts
$'000
Software
$'000
Capitalised
development
costs
$'000
2020 year:
Cost
Opening balance
1,392
759
5,684
2,700
Total
$'000
49,300
5,694
(448)
(524)
–
–
–
–
–
–
–
–
–
38,765
5,694
–
(524)
759
5,684
2,700
43,935
54,022
(584)
(175)
(759)
175
–
(3,063)
(711)
(3,774)
(347)
(550)
(897)
(24,121)
(28,115)
(2,143)
(3,579)
(26,264)
(31,694)
2,621
1,910
2,353
1,803
14,644
17,671
21,185
22,328
Opening balance
1,392
759
5,604
Additions – internally developed
Impairment
Written-off
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Closing balance
Net book value
Opening balance
Closing balance
2019 year:
Cost
–
(448)
–
944
–
–
–
1,392
944
Additions – internally developed
Additions through acquisition
Written-off
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Closing balance
Net book value
Opening balance
Closing balance
–
–
–
–
–
–
–
80
–
–
–
2,700
–
32,676
6,135
–
(46)
40,431
6,135
2,780
(46)
1,392
759
5,684
2,700
38,765
49,300
–
–
–
1,392
1,392
(249)
(335)
(584)
510
175
(2,297)
(766)
(3,063)
–
(22,182)
(24,728)
(347)
(347)
(1,939)
(3,387)
(24,121)
(28,115)
3,307
2,621
–
10,494
2,353
14,644
15,703
21,185
91
15. Contract liabilities, trade and other payables
Trade and other payables are recognised at the fair value of the invoice received from the supplier. The carrying value of trade and
other payables is considered to approximate fair value.
Trade payables
Security deposit
Other payables and accruals
Contract liabilities
2020
$'000
7,699
6,251
11,015
4,544
29,509
2019
$'000
11,433
5,547
11,842
9,091
37,913
16. Loans and borrowings
Loans and borrowings are recognised at the consideration received, less directly attributable transaction costs, with subsequent
measurement at amortised cost using the effective interest rate method.
For more information about the Group’s exposure to interest rate and liquidity risk, refer to Note 31.
Composition
Unsecured loans
Disclosure in the Consolidated Statement of Financial Position
Current liability
2020
$'000
2,031
2,031
2020
$'000
2,031
2,031
2019
$'000
2,701
2,701
2019
$'000
2,701
2,701
The unsecured loans are at-call and bear variable interest rates from 1.5% to 2% per annum. Bank borrowings bear interest rate
from 2.58% to 2.79% per annum.
On 14 August 2020 the Group renegotiated its debt facilities, with the new facility replacing the existing facility from that date.
The new finance facility has a limit of $25 million and expires on 1 July 2023. The new facility also provides a waiver for the interest
cover financial covenant for the 12-month period to 30 June 2021.
For more information about the Group’s exposure to interest rate and liquidity risk, refer to Note 31.
17. Provisions
Employee benefits and make good provisions
Wages, salaries and annual leave
Liabilities for employee benefits for wages, salaries and annual leave represent the present obligations resulting from employees’
services provided up to reporting date. The provisions have been calculated at undiscounted amounts based on expected wage
and salary rates that the Group expects to pay as at reporting date and include related on-costs, such as workers’ compensation
insurance and payroll tax. A liability is recognised in other payables for the amount expected to be paid under short-term cash
bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
92
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Long service leave
The provision for employee benefits for long service leave represents the present value of the estimated future cash outflows
to be made by the Group resulting from employees’ services provided up to the reporting date. The provision is calculated using
expected future increases in wage and salary rates including related on-costs and expected settlement dates based on turnover
history and is discounted using the rates attaching to corporate bonds at reporting date which most closely match the terms
of maturity of the related liabilities.
Superannuation plans
The Group contributes to defined contribution superannuation funds for the benefit of employees or their dependants
on retirement, resignation, disablement or death. The Group contributes a percentage of individual employees’ gross income
and employees may make additional contributions on a voluntary basis. Obligations for contributions to defined contribution
superannuation funds are recognised as an employee benefits expense in profit or loss in the periods during which services are
rendered by employees.
Make good provision
The make good provision represents the present value of the estimated future cash outflows to be made where the obligation
to restore the lease property to its original condition exists.
Composition
Employee benefit provision
– Annual leave provision
– Long service leave provision
Make good provision
Disclosure in the Consolidated Statement of Financial Position
Current provision
– Employee benefits provision
– Make good provision
Total current provision
Non-current provision
– Employee benefits provision
– Make good provision
Total non-current provision
Total provisions
Defined contribution superannuation funds
Contributions to defined contribution superannuation funds
2020
$'000
4,248
4,597
767
9,612
2020
$'000
7,982
285
8,267
863
482
1,345
9,612
2019
$'000
3,945
4,391
752
9,088
2019
$'000
7,258
269
7,527
1,078
483
1,561
9,088
2020
$'000
2019
$'000
5,130
4,554
93
18. Share capital and Reserves
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options
are recognised as a deduction from equity, net of any tax effects.
Profits reserve
The profits reserve represents profits of entities within the Group transferred to a separate reserve to preserve their profit character.
Such profits are available to enable payment of franked dividends in future years.
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements
of foreign operations.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of unlisted equity investments. On derecognition,
the Group transfers that part of the reserve related to the underlying investment that is derecognised directly to Retained earnings.
Employee Compensation Reserve
The fair value of Long Term Incentive plans granted is recognised in the employee compensation reserve over the vesting period.
Composition and movement in issued capital (number of shares)
Composition of issued capital
Fully paid ordinary shares
Composition and movement in share capital (dollars)
Composition of issued capital
Fully paid ordinary shares
Options over unissued shares
2020
(number)
2019
(number)
120,430,683
120,430,683
2020
$'000
2019
$'000
138,325
138,325
No options were granted during the year and there were no options outstanding at the end of the financial year. Performance rights
were awarded during the year and they may be converted into ordinary shares, subject to Board’s discretion.
Terms and conditions applicable to ordinary shares
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share
at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and
creditors and are fully entitled to any proceeds of liquidation. The Company does not have authorised capital or par value in respect
of its issued shares. All issued shares are fully paid.
94
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) Composition and movement in other reserves
Foreign
currency
translation
reserve
$'000
Fair value
reserve
$'000
Employee
compensation
reserve
$'000
2020 year:
Opening balance
Net change in fair value of financial assets, net of tax
Net change in fair value of financial assets transferred to retained
earnings
Foreign exchange translation differences, net of tax
Share-based payments
Closing balance
2019 year:
Opening balance
Net change in fair value of financial assets, net of tax
Foreign exchange translation differences, net of tax
Share-based payments
Closing balance
19. Dividends
Dividends are recognised as a liability in the period in which they are declared.
The following fully franked dividends were paid, franked at a tax rate of 30%.
Dividends paid
(83)
–
–
(52)
–
(135)
–
–
(83)
–
(83)
(498)
(477)
541
–
–
(434)
–
(498)
–
–
(498)
2020 year interim – 4.0 cents per share (from profits reserve)
2019 year final – 4.0 cents per share
2019 year interim – 4.0 cents per share
2018 year final – 4.0 cents per share
Total dividends paid
Dividends cents per share – paid
Interim
Final
Total
652
–
–
–
350
1,002
348
–
–
304
652
2020
$'000
4,817
4,817
–
–
9,634
2020
4.00
4.00
8.00
Total
$'000
71
(477)
541
(52)
350
433
348
(498)
(83)
304
71
2019
$'000
–
–
4,817
4,817
9,634
2019
4.00
4.00
8.00
Given uncertainty around the current economic environment and focus on cash preservation for growth opportunities the Board
has decided not to declare a final FY20 dividend.
95
20. Earnings per share
Basic earnings per share (“EPS”) is calculated by dividing the profit attributable to equity holders for the reporting period by the
weighted average number of ordinary shares outstanding during the period.
Diluted EPS is calculated by dividing the profit attributable to equity holders for the reporting period by the weighted average
number of ordinary shares outstanding including dilutive potential ordinary shares.
Consolidated (loss)/profit attributable to owners of the Company (in thousands of AUD)
(23,820)
11,822
Weighted average number of fully paid ordinary shares outstanding during the year used
in calculation of basic EPS (in thousands of shares)
120,431
120,431
2020
2019
Any potential dilution in A2B’s earnings per share which might arise following the exercise of the LTI awards is immaterial given the
number of existing shares on issue.
Basic EPS
Diluted EPS
21. Dividend franking balance
Balance at the end of the financial year including franking credits arising from income
tax payable in respect of the financial year.
2020
2019
(19.8 cents)
9.8 cents
(19.8 cents)
9.8 cents
2020
$'000
2019
$'000
33,564
37,564
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
a.
b.
c.
franking credits that will arise from the payment/receipt of the current tax liabilities/receivables;
franking debits that will arise from the payment of dividends recognised as a liability at the year-end;
franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated group at the
year-end; and
d.
franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The impact
on the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability is to reduce
it by $ nil (2019 $2,064,000). In accordance with the tax consolidation legislation, the Company as the head entity in the tax
consolidated group has also assumed the benefit of $33,564,000 (2019 $37,564,000) franking credits.
96
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 22. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2020 the parent entity of the Group was A2B Australia Limited.
Result of the parent entity
(Loss)/Profit for the year
Other comprehensive income, net of tax
Total comprehensive income for the year
Financial position of parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Profits reserve
Retained earnings
Total equity
2020
$'000
(16,181)
43
2019
$'000
5,168
16
(16,138)
5,184
45,508
72,623
262,948
264,574
308,456
337,197
25,269
30,763
138,743
136,218
164,012
166,981
138,325
138,325
712
18,823
668
–
(13,416)
31,223
144,444
170,216
Parent entity capital expenditure commitments and contingencies
At 30 June 2020 the parent entity has not made any capital expenditure commitments (2019 $nil). For the contingent liability
as at 30 June 2020 (2019 $nil), refer to Note 28.
Parent entity guarantees in respect of the debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect
of certain subsidiaries.
Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed are disclosed in Note 23.
97
23. Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785, the wholly-owned subsidiaries listed below are
relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and Directors’ reports.
It is a condition of the Instrument that the Company and each of the subsidiaries seeking relief enter into a Deed of Cross
Guarantee (“Deed”). The effect of the Deed is that the Company 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 Corporation Act. If a winding up occurs under other
provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full.
The subsidiaries have also given similar guarantees in the event that the Company is wound up.
The subsidiaries are subject to the Deed are:
•
•
•
•
•
•
Taxis Combined Services Pty Ltd
Black Cabs Combined Pty Ltd
Yellow Cabs (South Australia) Pty Ltd
Yellow Cabs Australia Pty Ltd
• Newcastle Taxis Pty Ltd
•
•
•
Austaxi Group Pty Ltd
Taxitech Pty Ltd
Arrow Taxi Services Pty Ltd
Combined Communications Network Pty Ltd
• North Suburban Taxis (Vic) Pty Ltd
EFT Solutions Pty Ltd
• Maxi Taxi (Australia) Pty Ltd
•
135466 Pty Ltd
•
•
ABC Radio Taxi Pty Ltd
Cabcharge Payments Pty Ltd
• Mobile Technologies International Pty Ltd
The Consolidated income statement and retained earnings for the Company and controlled entities which are a party to the Deed
is as follows:
Revenue
Expenses
Results from operating activities
Finance income
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Items that will not be reclassified to profit or loss:
Net change in fair value of financial assets
Income tax on other comprehensive income
Other comprehensive loss for the year, net of income tax
Total comprehensive income for the year
Retained earnings at beginning of year
Transfer to profits reserve
Profit for the year
Dividends provided for or paid
Retained earnings at end of year
98
a2b Annual Report 2020
2020
$'000
2019
$'000
159,891
190,978
(183,156)
(173,458)
(23,265)
17,520
76
(1,290)
187
(804)
(24,479)
16,903
2,319
(5,368)
(22,160)
11,535
(703)
174
(529)
(712)
214
(498)
(22,689)
11,037
29,120
27,219
(18,823)
(22,160)
(9,634)
–
11,535
(9,634)
(21,497)
29,120
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) The Consolidated financial position for the Company and controlled entities which are a party to the Deed is as follows:
Current assets
Cash and cash equivalents
Trade and other receivables
Current tax assets
Inventories
Other current assets
Total current assets
Non-current assets
Trade and other receivables
Investments
Property, plant and equipment
Right-of-use assets
Net deferred tax assets
Taxi plate licences
Goodwill
Intellectual property
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Loans and borrowings
Lease liabilities
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Profits reserve
Retained earnings
Total equity attributable to equity holders of the Company
2020
$'000
2019
$'000
22,922
43,063
2
2,855
3,509
17,680
79,526
–
3,108
4,855
72,351
105,169
5,624
2,928
35,004
17,438
6,293
3,237
26,838
22,058
4,880
2,295
35,786
–
4,068
17,459
25,708
21,157
119,420
111,353
191,771
216,522
27,779
2,031
2,174
–
8,097
37,180
2,701
–
1,107
7,401
40,081
48,389
15,624
1,345
16,969
57,050
–
1,561
1,561
49,950
134,721
166,572
137,304
137,304
91
18,823
148
–
(21,497)
29,120
134,721
166,572
99
24. Related Party and Key Management Personnel disclosures
Apart from the details disclosed in this note, no key management personnel (“KMP”) have entered into a material contract with the
Company or the Group since the end of the previous financial year and there are no material contracts involving key management
personnel interests existing at year end.
KMP compensation (including Non-executive Directors)
Short-term employee benefits – salary, fees, non-cash benefits and cash bonus
4,013,576
4,386,411
2020
$
2019
$
Post-employment benefits – superannuation
Other long-term benefits
Termination benefits
Share-based payment expense
Loans to Directors and other KMP
No loans are made to Directors or other KMP.
Transactions with Directors and other KMP
The Group has no transactions with related parties in the reporting period.
25. Remuneration of auditors
Audit and review of financial reports
Other services
Taxation services
Advisory services
208,024
182,698
62,637
72,524
286,312
–
613,623
295,227
5,184,172
4,936,860
2020
$
2019
$
415,000
478,000
224,550
154,350
22,212
54,000
661,762
686,350
100
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 26. Particulars relating to controlled entities
Group Interest % Group Interest %
2019
2020
13cabs Innovations Pty Ltd
135466 Pty Ltd
ABC Radio Taxi Pty Ltd
Access Communications Net Pty Ltd
Arrow Taxi Services Pty Ltd
Austaxi Group Pty Ltd
Black Cabs Combined Car Sales Pty Ltd
Black Cabs Combined Pty Ltd
Cab Access Pty Ltd
Cabcharge (Investments) Pty Ltd
Cabcharge Payments Pty Ltd
Carbodies Australia Pty Ltd
Champ Australia Pty Ltd
Champ NSW Pty Ltd
Champ Victoria Pty Ltd
Champ WA Pty Ltd
Combined Communications Network Pty Ltd
EFT Solutions Pty Ltd
Enterprise Speech Recognition Pty Ltd
Go Taxis Pty Ltd
Helpline Australia Pty Ltd
Kingscliff Tweed Coast Taxis Pty Ltd
Mact Franchise Pty Ltd
Mact Network Pty Ltd
Mact Rental Pty Ltd
Maxi Taxi (Australia) Pty Ltd
Melbourne Taxi Cab Service Pty Ltd
Mobile Technologies Developments Pty Ltd
Mobile Technologies International Pty Ltd
Newcastle Taxis Pty Ltd
North Suburban Taxis (Vic) Pty Ltd
Silver Service (Victoria) Pty Ltd
Silver Service Taxis Pty Ltd
South Western Cabs (Radio Room) Pty Ltd
Taxi Data Australia Pty Ltd
Taxi Industry (Australia) Insurance Brokers Pty Ltd
Taxi Services Management (Newcastle) Pty Ltd
TaxiProp Pty Ltd
Taxis Australia Pty Ltd
Taxis Combined Services (Victoria) Pty Ltd
Taxis Combined Services Pty Ltd
Taxitech Pty Ltd
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
56
100
100
100
100
100
100
100
100
100
100
100
100
68
62
100
100
68
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
22
100
100
100
100
100
100
100
100
100
100
100
100
68
37
100
100
68
100
100
100
101
Thirteen Hundred Pty Ltd
Tiger Taxis NSW Pty Ltd
Tiger Taxis Operations Pty Ltd
Tiger Taxis Pty Ltd
Tiger Taxis Queensland Pty Ltd
Tweed Heads Coolangatta Taxi Service Pty Ltd
Voci Asia Pacific Pty Ltd
Yellow Cabs (Queensland) Holdings Pty Ltd
Yellow Cabs Australia Pty Ltd
Yellow Cabs of Sydney Pty Ltd
Yellow Cabs South Australia Pty Ltd
Yellow Cabs Victoria Pty Ltd
Cabcharge New Zealand Limited
Cabcharge North America Limited
Manchester Taxi Division Limited
Mobile Technologies International Limited
Mobile Technologies International LLC
Group Interest % Group Interest %
2019
2020
100
100
100
100
100
56
100
100
100
100
100
100
100
93
100
100
100
100
100
100
100
100
22
100
100
100
100
100
100
100
93
100
100
100
27. Capital expenditure commitments
The Group has not entered into any contracts to purchase plant and equipment for which amounts have not been provided
as at 30 June 2020 (2019 $nil).
28. Contingencies
Certain recent court decisions, not involving A2B, regarding the correct application of various employee entitlements may have
implications for businesses in Australia that employ casual staff. The Group does not consider the majority of the principles
relating to these court decisions directly apply to the Group’s employment arrangements. No provision has therefore been
recognised in relation to these matters at 30 June 2020.
29. Leases
The Group leases various offices and Taxitech workshops. The leases run typically for a fixed period of one to 10 years, with an option
to renew the lease after that date.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Previously, these
leases were classified as operating leases under AASB 117.
Information about leases for which the Group is a lessee is presented below.
Right-of-use assets
The right-of-use assets are initially measured at cost, which comprises:
•
•
The amount of the initial measurement of the lease liability
Any lease payments made at or before the commencement date, less any lease incentives and any initial direct costs incurred
by the lessee
•
An estimate of the costs to dismantle and remove the underlying asset or to restore the underlying asset.
Subsequently the right-of-use asset is measured at cost less any accumulated depreciation and impairment losses and adjusted for
certain measurements of the lease liability.
102
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) The right-of-use asset is depreciated over the shorter period of the lease term and the economic useful life of the underlying asset.
If a lease transfers ownership of the underlying asset or the costs of the right-of-use asset reflects that the Group will exercise
a purchase option, the asset will be depreciated from the commencement date to the end of the useful life of the underlying asset.
The depreciation starts at the commencement date of the lease.
Where the initially anticipated lease term is subsequently reassessed, any changes are reflected in a remeasurement of the lease
liability and a corresponding adjustment to the asset.
If the recoverable amount of a right-of-use asset is less than its carrying value, an impairment charge is recognised in the profit
or loss, and the carrying value of the asset written-down to its recoverable amount. Should the recoverable amount increase
in future periods the carrying value may be adjusted to the lower of the recoverable value or the amortised cost of the asset had
it not been impaired.
2020 year:
Balance at 1 July
Depreciation
Additions
Derecognition 1
Balance at 30 June
1 Derecognition of the right-of-use assets during the 2020 is a result of lease cancellation.
Lease liabilities
Contractual undiscounted cash flows
One year or less
From one to five years
Over five years
Total undiscounted lease liabilities
Current
Non-current
Total lease liabilities
Equipment
$'000
Total
$'000
Land and
buildings
$'000
18,676
(2,853)
1,997
1,196
(112)
–
–
(1,084)
17,820
–
19,872
(2,965)
1,997
(1,084)
17,820
2020
$'000
2,809
8,407
10,752
21,968
2,262
15,926
18,188
The lease liability is initially measured at the present value of future lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or if this rate cannot be readily determined the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise:
•
•
•
•
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivables
Variable lease payments that depend on an index or a rate
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option
The amount expected to be payable under a residual value guarantee
Payments of penalties for termination of the lease, if the lease term reflects the lessee exercising an option to terminate
the lease.
103
Variable lease payments not included in the initial measurement of the lease liability are recognised directly in profit or loss.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use assets) whenever:
•
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment
of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments
using a revised discount rate
•
The lease payments change due to changes in an index or rate or a change in the amount expected to be payable under
a residual value guarantee
•
A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised
discount rate at the effective date of the modification.
Amounts recognised in the Consolidated Statement of Comprehensive Income
2020 year: Leases under AASB 16
Interest on lease liabilities
Depreciation
Expenses relating to variable lease payments not included in lease liabilities
2019 year: Leases under AASB 117
Lease expenses
Amounts recognised in the Consolidated Statement of Cash Flows
2020 year:
Total cash outflow for leases
Total
$'000
621
2,965
474
3,231
$'000
3,692
104
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) 30. Notes to the consolidated statement of cash flows
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form
an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose
of the Consolidated Statement of Cash Flows.
The carrying value of cash is considered to approximate fair value.
Reconciliation of net cash provided by operating activities with profit from ordinary
activities after income tax
(Loss)/Profit for the year attributable to owners of the Company
Adjustment for non-cash items:
Depreciation and amortisation
Net (profit) on disposal of property, plant and equipment
Share-based payments
Impairment charges
Acquisition related costs
Other non cash items
Changes in assets and liabilities, net of the effects of purchase of subsidiaries:
Change in trade and other debtors
Change in inventories
Change in creditors and accruals
Change in provisions
Change in income taxes payable
Change in deferred tax balances
Net cash provided by operating activities
Reconciliation of liabilities arising from financing activities
2020
$'000
2019
$'000
(23,820)
11,822
17,771
14,550
(294)
350
14,983
145
593
(259)
304
–
401
–
40,120
(5,919)
462
(9,343)
71
(1,229)
(1,834)
37,975
185
3,307
632
2,168
(800)
26,391
At 1 July
2019
2,701
AASB 16
Transition
adjustment
–
–
19,872
Changes
arising from
obtaining
NCI
90
–
Lease net
additions
and
remeasure
–
913
Net cash
flows
(760)
(2,597)
At 30 June
2020
2,031
18,188
2,701
19,872
90
(3,357)
913
20,219
$'000
Interest bearing loans
Lease liabilities
Total liabilities from financing
activities
Cash and cash equivalents
Cash on hand and at bank
Money market deposits
Balance per Consolidated Statement of Cash Flows
Restricted cash
There was no restricted cash at 30 June 2020 (30 June 2019 $nil).
2020
$'000
8,520
17,239
25,759
2019
$'000
10,620
8,552
19,172
105
31. Financial instruments and financial risk management
Overview
The Board of Director’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. The Board monitors the return on equity, which the Group defines as profit after tax
divided by total shareholders’ equity. The Board also determines the level of dividends to ordinary shareholders.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position. The Group’s target is to achieve a return exceeding its cost of equity
over the medium term.
There were no changes in the Group’s approach to medium term capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
The Group has exposure to the following risks from financial instruments:
•
•
Credit risk
Liquidity risk
• Market risk
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and processes for
measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout these
Consolidated Financial Statements.
Financial risk management objectives
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board
has established the Audit & Risk Committee, which is responsible for developing and monitoring risk management activities.
The Committee reports regularly to the Board of Directors on risk management.
Risk management practices are established to identify and analyse the risks faced by the Group, to set appropriate policies which
include risk limits and controls, and to monitor risks and adherence to policies. Risk management practices are reviewed regularly
to reflect changes in market conditions and the Group’s activities. The Group, through their training and management standards
and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Audit & Risk Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a Customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from Customers, investments with financial institutions
and securities. The carrying value of cash and cash equivalents, trade and other receivables and deposits with financial institutions
represents the maximum credit exposure of these assets.
Impairment losses on financial assets and contract assets recognised in the consolidated statement of comprehensive income were
as follows:
Impairment loss on trade receivables arising from contracts with customers
Impairment loss on financial assets measured at FVOCI
2020
$'000
2019
$'000
(6,199)
(1,360)
(581)
(727)
(6,780)
(2,087)
106
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) a) Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each Customer and in the current market
the broader impacts of COVID-19.
The Group minimises concentration of credit risk in relation to trade accounts receivable by undertaking transactions with a large
number of Customers.
Credit risk in trade receivables is managed in the following ways:
•
•
•
•
•
The Board has established delegated limits and authority for agreements, contracts and receivable write-off
Each new Customer is analysed individually for creditworthiness under a credit policy before the Group’s standard payment
and delivery terms and conditions are offered
Payment terms are 28 days
A risk assessment process is used for Customers over 90 days; and
Cash or bank guarantee is obtained where appropriate.
The Group assumes the credit risk for the full value of Taxi fares settled through the Cabcharge Payment System (refer to Note 3).
In assessing the combined collective loss allowance and specific doubtful debts provision as at 30 June 2020, the Group has
considered the increased risk arising from the economic impacts of the COVID-19 pandemic. The Group has specifically assessed
the economic circumstances of individual customers in the current environment, resulting in a material year on year increase in the
level of accumulated losses relative to the gross trade receivables balance.
b)
Investments
The Group limits its exposure to credit risk by placing deposits with major Australian banks.
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 liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group undertakes the following activities to ensure that there will be sufficient funds available to meet obligations:
•
Prepare budgeted annual and monthly cash flows;
• Monitor actual cash flows on a daily basis and compare to liquidity requirements;
• Maintain standby money market and commercial overdraft facilities; and
• Maintain committed borrowing facility in excess of budgeted usage levels.
There has been no change in liquidity risk policies during the financial year.
Maturity profile of financial liabilities by remaining contractual maturities
Carrying
amount
$'000
Contractual
cashflows
$'000
6 months
or less
$'000
6 to 12
months
$'000
1 to 2 years
$'000
2 to 5 years
$'000
2020 year
Contract liabilities, trade and other
payables
Loans and borrowings
2019 year
Contract liabilities, trade and other
payables
Loans and borrowings
29,509
2,031
29,509
2,075
29,509
2,075
31,540
31,584
31,584
37,913
2,701
37,913
2,865
37,913
2,865
40,614
40,778
40,778
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
107
Bank facilities
Revolving credit facility
Multi option facility
Total facility
Amount used at 30 June
Amount unused at 30 June
2020
$'000
2019
$'000
45,000
5,000
45,000
5,000
50,000
50,000
–
–
50,000
50,000
On 14 August 2020 the Group renegotiated its debt facilities, with the new facility replacing the existing facility from that date.
The new finance facility has a limit of $25 million and expires on 1 July 2023. The new facility also provides a waiver for the interest
cover financial covenant for the 12-month period to 30 June 2021.
Typically the Group ensures that it has sufficient cash on demand to meet expected current operational expenses, including the
servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted,
such as natural disasters. In addition, the Group maintains lines of credit as detailed in the above table.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
a) Currency risk
The Group has no significant exposure to foreign exchange risk in respect of the Company and the entities it controls.
b)
Interest rate risk
The principal risk to which financial assets and financial liabilities are exposed is the risk of loss from fluctuations in the future cash
flows or fair values of financial instruments because of a change in market interest rates.
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Financial assets – Finance lease receivables
Financial liabilities
Variable rate instruments
Financial assets – cash and cash equivalents
Financial liabilities – Loans and borrowings
2020
$'000
2019
$'000
8,763
7,700
–
–
8,763
7,700
25,759
(2,031)
19,172
(2,701)
23,728
16,471
As at 30 June 2020 the carrying value of financial assets and liabilities on the above table are considered to approximate their fair value.
c)
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, where applicable, are based on the government yield curve at the
reporting date plus an adequate credit spread, and were as follows:
Loans and borrowings
Finance lease receivables
108
a2b Annual Report 2020
2020
1.5% to 2.8%
2019
2%
7% to 12% 10% to 12%
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued) d)
Fair value hierarchy
To determine fair value, the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
is available, maximising the use of relevant observable inputs and minimising unobservable inputs. Fair value measurements that
are recognised in the Consolidated Financial Statements are categorised as follows:
•
•
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
•
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The fair value hierarchy of the investments is provided below:
30 June 2020
Unlisted equity investments
30 June 2019
Unlisted equity investments
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
–
–
–
–
1,298
1,298
2,186
2,186
The valuation techniques and significant unobservable inputs used to determine the fair value of on these unlisted equity investments
at 30 June 2020 is as follows:
Valuation techniques
Significant unobservable inputs
Future Maintainable Earnings (“FME”) methodology – the
Expected earnings at 30 June 2020, with an adjusted earnings
estimate of FME represents the fair value of the unlisted
multiple of 3.5x to 4.6x (weighted), derived from comparable
equity investments on a going concern and cash flow basis,
companies to the investee.
determined by capitalising the maintainable earnings of the
investee using an appropriate earnings multiple.
The estimate of the fair value will increase (decrease) if the
earnings and earnings multiple increases (decreases).
Net Tangible Assets approach – the estimate of fair value is
Minority discount of 20%. The estimate of the fair value will
determined by valuing the assets and liabilities of the investee
increase (decrease) if the discount rate decreases (increases).
at market value (excluding operating assets and liabilities).
The carrying amount of the unlisted equity investments is sensitive to possible changes in the significant unobservable inputs.
e)
Sensitivity analysis
i.
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore a change
in interest rates at the reporting date would not affect profit or loss.
ii.
Sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss
by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
The analysis is performed on the same basis for 2019.
2020
2019
Profit or loss
100 bp increase
$'000
100 bp decrease
$'000
(20)
(27)
20
27
109
32. Operating segment
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ operating results are regularly reviewed by the Group’s Chief Operating Decision Maker (“CODM”) to make decisions
about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
The Group operates predominantly in one business and geographic segment being the provision of taxi related services in Australia.
A subsidiary, MTI that was purchased by the Group on 9 November 2018, operates in other geographic segments including North America
and Europe. MTI’s overseas revenue of $4,276,000 was included in the Group’s Consolidated Statements of Comprehensive Income.
33. Share-based payment – Long term incentive
The Group has provided Long term incentive (“LTI”) awards to the CEO and other executives and granted them annually in the form
of Rights. The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognised
as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense
is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected
to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and
non-market performance conditions at the vesting date.
The total share-based payment expense for the year was $677,170 (FY19 $303,836).
Fair value
The fair value of the awards as at the valuation date is set out in the following table:
Grant date/employees entitled
Number
of Rights
Vesting conditions
Valuation
methodology
Fair Value
Expected
vesting date
Performance
Period
2020 year
Rights granted to CEO and
key management personnel
On 21 November 2019
Total number of Rights
2019 year
Rights granted to CEO and
key management personnel
On 21 February 2019
Rights granted to senior
management personnel
On 21 February 2019
Absolute Total
Shareholder Return
(market condition) 1
Relative Total
Shareholder Return
(non-market condition) 1
496,552
331,034
827,586
Monte Carlo
simulation
$0.79
15 September
2022
1 July 2019 to
30 June 2022
Monte Carlo
simulation
$0.87
Absolute Total
Shareholder Return
(market condition) 1
376,681
Monte Carlo
simulation
Relative Total
Shareholder Return
(non-market condition) 1
251,121
Absolute Total
Shareholder Return
(market condition)*
Relative Total
Shareholder Return
(non-market condition) 1
53,812
35,874
$0.82
15 September
2021
1 July 2018 to
30 June 2021
Monte Carlo
simulation
$0.88
Monte Carlo
simulation
$0.82
15 September
2021
1 July 2018 to
30 June 2021
Monte Carlo
simulation
$0.88
Total number of Rights
717,488
1 Details of the operation of LTI awards are outlined on pages 55 and 56 of this Annual Report.
110
a2b Annual Report 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (continued)
Key assumptions
The key assumptions adopted for valuation of the awards are summarised in the following table:
Share price at grant date
Expected life
Expected volatility
Dividend yield
Risk-free interest rate
Reconciliation
The reconciliation of outstanding rights is shown the following table:
Performance Rights reconciliation
Rights outstanding as at 1 July
Rights granted
Rights forfeited
Rights lapsed
Rights exercised
Rights outstanding as at 30 June
Rights exercisable as at 30 June
34. Subsequent event
Dividends
2020
21 November
2019
2019
21 February
2019
$1.61
3 years
37.5%
5.29%
0.72%
$2.02
3 years
40%
4.84%
1.60%
Number of Rights
2020
2019
1,813,066
1,212,324
827,586
717,488
–
–
(183,612)
(116,746)
–
–
2,457,040
1,813,066
–
–
Given uncertainty around the current economic environment and focus on channelling cash into growth opportunities the Board
has decided not to declare a final FY20 dividend.
Bank Facility
On 14 August 2020 the Group renegotiated its debt facilities, with the new facility replacing the existing facility from that date.
The new finance facility has a limit of $25 million and expires on 1 July 2023. The new facility also provides a waiver for the interest
cover financial covenant for the 12-month period to 30 June 2021.
Other than the matters above, there have been no events subsequent to the reporting date that would have had a material impact
on the Group’s financial statements as at 30 June 2020.
111
1.
In the opinion of the Directors of A2B Australia Limited (“Company”):
a.
the Consolidated Financial Statements and Notes set out on pages 65 to 111, and the Remuneration Report in the
Directors’ Report, set out on pages 46 to 63, are in accordance with the Corporations Act 2001 (Cth), including:
i.
giving a true and fair view of the consolidated entity’s financial position at 30 June 2020 and of the performance
for the financial year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
there are reasonable grounds to believe that the Company and the controlled entities identified in Note 23 as parties
to a Deed of Cross Guarantee 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 entities pursuant to ASIC Corporations
(Wholly owned Companies) Instrument 2016/785.
2.
The Consolidated Financial Statements and Notes comply with International Financial Reporting Standards as disclosed
in Note 2.
3.
The Directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required
by section 295A of the Corporations Act.
Signed in accordance with a resolution of the Directors
Paul Oneile
Chairman
25 August 2020
Andrew Skelton
Managing Director
25 August 2020
112
a2b Annual Report 2020
Directors’ Declaration To the shareholders of A2B Australia Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of A2B Australia Limited
The Financial Report comprises:
(the Company).
•
Consolidated statement of financial position as at
In our opinion, the accompanying Financial Report of the
30 June 2020;
Company is in accordance with the Corporations Act 2001,
•
Consolidated statement of comprehensive income,
including:
•
giving a true and fair view of the Group’s financial position
Consolidated statement of changes in equity, and
Consolidated statement of cash flows for the year
as at 30 June 2020 and of its financial performance for
then ended
the year ended on that date; and
• Notes including a summary of significant
•
complying with Australian Accounting Standards and the
accounting policies
Corporations Regulations 2001.
•
Directors’ Declaration.
The Group consists of A2B Australia Limited (the Company)
and the entities it controlled at the year-end or from time
to time during the financial year.
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 (including Independence
Standards) (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.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
113
Independent Auditor’s Report Key Audit Matters
The Key Audit Matters we identified are:
Key Audit Matters are those matters that, in our professional
•
•
Valuation of Taxi plate licences
Valuation of Goodwill
judgement, were of most significance in our audit of the
Financial Report of the current period.
These matters were addressed in the context of our audit
of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
Valuation of Taxi plate licences at 30 June 2020 ($3.3million)
Refer to Note 12: Taxi plate licences in the Financial Report
The key audit matter
How the matter was addressed in our audit
Valuation of taxi plate licences is a Key Audit Matter due to:
Our procedures included:
•
The level of judgement required by us in evaluating the
• Working with our valuation specialists, we independently
estimates determined by management for forecast
developed a range for the discount rate used to value the
revenues. This is a significant driver in the taxi plate
taxi plate licences. This included evaluating the key inputs
licence value in use model.
•
The level of growth in revenue for taxi companies
continues to be threatened by changes in consumer
to the discount rate, including the risk free rate, cost of
debt, market participant gearing levels and industry beta,
against published rates of comparable entities.
habits and government regulations. This is driven by the
• We challenged the short, medium and long term forecast
increased use of alternative platforms, including mobile
taxi plate licence rental revenue expectations by assessing
application based offerings and restrictions on taxi fee
the assumptions against published industry growth
incomes. These ongoing changes create uncertainty in the
expectations, adjusted for the impacts of COVID-19.
key assumptions used in the taxi plate licence value in use
model, and were a focus of our audit work, specifically:
–
–
–
–
Taxi plate licence rental revenue growth expectations:
short, medium and long term;
The discount rate;
Significantly higher estimation uncertainty from
the business disruption impact on taxi operations
generally and taxi licence rental revenue specifically
arising from the COVID-19 global pandemic; and
A recorded impairment charge of $14.5m increasing
the sensitivity of the model to small changes
in key assumptions
These conditions increase the risk of inaccurate forecasts
or a wider range of possible outcomes for us to consider.
• We assessed the historical accuracy of the Group’s
revenue forecasts, by comparing the forecasts used in the
prior year model to the actual revenue generated in the
current year, after considering the impacts of COVID-19.
We also considered the changes in the contracted price
for licences. These procedures enabled us to evaluate the
accuracy of forecasting the cash flows as included in the
value in use calculations.
• We assessed the mathematical accuracy of the Group’s
value in use model.
• We performed a sensitivity analysis on key assumptions,
in particular the discount rate and expected growth rates,
to assess the risk of bias or inconsistency in application.
• We assessed the disclosures in relation to the valuation
by comparing these disclosures to our understanding
of the valuation, the business and accounting
standards requirements.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
114
a2b Annual Report 2020
Independent Auditor’s Report (continued) Valuation of Goodwill at 30 June 2020 ($27.5milion)
Refer to Note 13: Goodwill in the Financial Report
The key audit matter
How the matter was addressed in our audit
The valuation of Goodwill is considered a key audit matter
Our audit procedures included:
due to the size of the balance and the significant audit
effort arising from:
• We assessed the basis for the Group’s changes to the
composition of CGUs, based on our understanding
•
The industry in which the Group operates being impacted
of how operations are monitored and where independent
by disruptive technologies. Further, there are changes
cash flows are generated, against the requirements of the
in government regulations impacting the taxi service
accounting standards.
fee that can be applied when processing payments.
These conditions increase the possibility of goodwill
being impaired;
•
Discount rates which are applied to determine the
Goodwill value are complicated in nature and vary
according to the conditions and environment the
specific cash generating unit (CGU) is subject to;
• We obtained the Group’s value in use model and checked
amounts to the Board approved FY21 budget and the
FY22–FY25 business plan.
• We assessed the growth rate assumptions for each
CGU based on industry data. We considered the impact
of COVID-19 and industry and regulatory changes on the
Group’s key assumptions, for indicators of bias and
•
Significantly higher estimation uncertainty from the
inconsistent application, using our industry knowledge.
business impact on all CGUs arising from the COVID-19
We also compared the compound annual growth rate
global pandemic; and
•
Changes to the composition of CGUs during the year
necessitating our consideration of the appropriateness
between FY19 and terminal year in the models to further
challenge the projected cash flows in a COVID-19
economic environment.
of those changes.
• We performed sensitivity analysis focusing on the forecast
These conditions necessitate additional scrutiny by us,
in particular to address the objectivity of sources used
for assumptions, and their consistent application.
cash flows, the discount rate and terminal growth rate,
to identify those assumptions which are at higher risk
of bias or inconsistency in application and to focus our
procedures. Our sensitivity analysis included various
scenarios for the forecast recovery from COVID-19.
• Working with our valuation specialists, we independently
developed a discount rate range using publicly available
data for comparable entities, adjusted by risk factors
specific to the Group and the industry it operates in.
• We assessed the allocation of corporate costs and
assets to CGUs by comparing the Group’s allocation
methodology to our understanding of the business and
the criteria in the accounting standards.
• We assessed the accuracy of previous forecasting for the
Group as an indicator to inform our evaluation of forecasts
included in the value in use models.
• We assessed the Group’s disclosures of the qualitative
and quantitative considerations in relation to the
valuation of goodwill, by comparing these disclosures
to our understanding of the matter and accounting
standard requirements.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
115
Other Information
Other Information is financial and non-financial information in A2B Australia 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 opinions.
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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
116
a2b Annual Report 2020
Independent Auditor’s Report (continued) Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of A2B Australia Limited
The Directors of the Company are responsible for the
for the year ended 30 June 2020, complies with Section 300A
preparation and presentation of the Remuneration Report
of the Corporations Act 2001.
in accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages
46 to 63 of the Directors’ report for the year ended 30 June 2020.
Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with
Australian Auditing Standards.
KPMG
Cameron Slapp
Partner
Sydney
25 August 2020
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
117
The information below was prepared as at 11 September 2020.
20 largest shareholders
Name
Number of shares held
% issued capital
1
2
3
4
5
6
7
8
9
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Pty Ltd
Comfortdelgro Corporation Limited
National Nominees Limited
Prudential Nominees Pty Ltd
Quotidian No 2 Pty Limited
Swan Taxis Pty Ltd
Legion Cabs (Trading) Co-operative Society Limited
10
BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C)
11 One Managed Invt Funds Ltd (Sandon Capital Inv Ltd A/C)
12 National Exchange Proprietary Ltd
13
14
15
BNP Paribas Noms Pty Ltd (DRP)
Portman Trading Pty Ltd
Sandhurst Trustees Limited (SISF A/C)
16 NewEconomy Com Au Nominees Pty Limited (900 Account)
17 Ms Faby Fielan Chong
Reyob Pty Ltd (DM Investment A/C)
AKAT Investments Pty Limited (Tag Family – Core A/C)
BNP Paribas Nominess Pty Ltd (IB AU Noms RetailClient DRP)
18
19
20
Total
Substantial shareholders
Name
Spheria Asset Mgt
Investors Mutual
Comfortdelgro
Edgbaston Investment Partners
Samuel Terry Asset Mgt
36,138,394
12,196,447
11,298,547
8,980,676
3,070,093
3,000,000
2,902,438
2,631,004
1,750,000
1,420,343
1,125,133
1,000,000
902,143
661,886
583,500
549,441
525,487
465,617
450,000
371,660
90,022,809
30.01
10.13
9.38
7.46
2.55
2.49
2.41
2.18
1.45
1.18
0.93
0.83
0.75
0.55
0.48
0.46
0.44
0.39
0.37
0.31
74.75
Number of shares held
% issued capital
21,950,883
13,667,109
11,611,680
7,361,324
6,490,793
18.23
11.35
9.64
6.11
5.39
Information included in the substantial shareholders table is sourced from substantial shareholder notices or the register that the
Company maintains in accordance with section 672DA of the Corporations Act 2001, in each case as at 11 September 2020.
118
a2b Annual Report 2020
Shareholder Information Spread of shareholders
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of holders
Number of shares held
% issued capital
1,634
1,175
540
631
46
886,673
4,508,800
3,754,732
17,186,654
94,091,824
120,430,683
0.74
3.74
3.12
14.27
78.13
100
701 shareholders hold less than a marketable parcel of shares in the Company based on the closing market price on 11 September 2020.
Voting rights
The voting rights of shareholders are set out in the Company’s Constitution. Each shareholder is entitled, either personally,
or by proxy, attorney or representative, to be present at any general meeting of the Company and to vote on any resolution
on a show of hands or on a poll. Every shareholder present in person, by proxy, or attorney or representative, has one vote for
every share held.
The Company has only one class of shares on issue (fully paid ordinary shares), each with the same voting rights.
ASX listing
The Company’s ordinary shares are quoted on the ASX under the trading code “A2B”, with Sydney being the Company’s
home exchange.
Details of trading activity are published in most daily newspapers and are also available on a 20 minute delayed basis,
on the Company’s website at www.a2baustralia.com/investor-center/share-price/.
The Company is not currently conducting an on-market buy-back of its shares.
Website
An electronic version of the Annual Report is available on the Company’s website at www.a2baustralia.com/investor-center/
reports/. A printed copy of the Annual Report will only be sent to shareholders who have elected to receive one.
119
Annual General Meeting
The 2020 Annual General Meeting of the
shareholders of A2B Australia Limited will be held
at 11.00am on Thursday 19 November 2020 online
at https://agmlive.link/A2B20.
Full details provided in the Notice of Meeting.
Registered Office
A2B Australia Limited
ABN 99 001 958 390
152–162 Riley Street
East Sydney NSW 2010
T: +61 2 9332 9222
F: +61 2 9361 4248
www.a2baustralia.com
Company Secretary
Adrian Lucchese
Auditor
KPMG
International Towers Sydney 3
300 Barangaroo Avenue
Sydney NSW 2000
Share Registry
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
T: 1300 724 911
www.linkmarketservices.com.au
120
a2b Annual Report 2020
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