2023 Annual Report
A2B Australia Limited
ABN 99 001 958 390
Contents
Executive Chairman’s Report
Board of Directors
Corporate Governance
Operating and Financial Review
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Financial Statements
Shareholder Information
Corporate Directory
2
5
6
8
17
22
37
38
96
98
A2B Annual Report 2023
Our Vision
The leading provider of personal transportation
services and solutions, committed to the success
of our customers, our people and our stakeholders.
Our Strategy
Improve
profitability
Grow core
business
Expand into
new markets
Our Purpose
Delivering a safe, reliable, sustainable
personalised transportation experience.
Our Values
Caring
Collaborative
Accountable
Authentic
Progressive
1
1
Executive
Chairman’s Report
Dear Shareholders,
The 2023 financial year was transformative for A2B. Our strategic and
operational focus not only returned the Company to profitability but
has also positioned A2B for further sustainable growth going forward.
A2B is in a much stronger operational and financial
position today than it was this time last year. This has
only been possible due to the hard work and strong
delivery by the A2B Team. I want to thank every
member of our Team, from taxi drivers and operators,
to our service, corporate office and our Board, for their
dedication and commitment that has underpinned the
successful turnaround in the business.
Our ‘Better Before Bigger’ strategy
has delivered
Implementing our ‘Better Before Bigger’ strategy over the
past 12 months, that focused on fleet size and fares as the
main drivers of A2B’s revenue growth, has underpinned
the strong turnaround in the business that has delivered
positive financial and operational results for FY23.
A2B’s nationwide fleet now centres on two top brands
– 13cabs and Silver Service. We have successfully
attracted new drivers, and transitioned drivers towards
these two well-known higher margin taxi brands.
As a result, our total fleet has grown by 972 cars
(or 14.2%) during the past 12 months to 7,803 cars as
at 30 June 2023. Underlying this, the 13cabs and Silver
Service brands experienced even more encouraging
growth, up 1,585 cars or 26.7%.
A2B serviced an average of 9.0 trips per day per car
in its fleets (up from 8.5 in FY22), with an increasing
number of trips generated from the 13cabs and Silver
Service booking channels. This increase reflected our
new app’s convenience and positive user experience,
combined with the value proposition these two
brands bring.
Increasing demand, combined with fare rises in most
states during FY23, translated to an increase in fares
processed of $247.5 million or 40.8%, with total fares
processed reaching $854.4 million (FY22 $606.9 million),
roughly 87% of pre-pandemic levels (FY19). Most
pleasingly, the increased fares processed and growing
fleet improved profitability for our drivers and operators.
A2B’s financial performance has significantly turned around
2023
$m
147.3
20.1
42.8
27.1
2022
$m
125.1
(9.4)
(22.3)
(27.8)
Change
$m
Change
%
22.2
29.5
65.1
54.9
18%
314%
292%
197%
Financial performance
Underlying revenue
Underlying EBITDA
Statutory EBITDA
Statutory net profit after tax
2
A2B Annual Report 2023
A2B is well poised for future growth,
building on the Team’s work during
the past 12 months and
improving industry
conditions.
Excluding the impact of one-off transactions to reflect
the operating performance of the business, revenue
is up $22.2 million (or 17.7% to $147.3 million). Both
underlying EBITDA and statutory net profit after tax
outperformed guidance, with underlying EBITDA
up $29.5 million to $20.1 million, and statutory net
profit after tax was up $54.9 million to $27.1 million.
One-off transactions, reflected in the statutory results,
include a pre-tax gain of $21.3 million relating to our
property transactions, and $1.6 million in compensation
from the NSW Government relating to taxi licence plates.
The right decisions, while challenging,
have realigned the business
In FY23, we focused on our core transportation business
and exited peripheral activities. Introducing new
technology has streamlined some of our processes,
including our contact centre. As a result, efficiency has
improved, with booking automation rates reaching 85%
in July 2023 (July 2022 51%), reducing our cost base and
improving customer experience.
While it was challenging to streamline core operations
and reduce employee numbers, it was necessary
to ensure we laid the foundations for a healthier, more
robust business capable of delivering sustainable growth
to our drivers, people, customers, and shareholders.
Our focus on improving our value proposition for drivers
and passengers continues. A key objective for FY24
is to implement further significant enhancements for
drivers via a $3.5 million investment to upgrade all in-car
technology to ensure the continuity of our payments
processing infrastructure (before 3G is switched off
in June 2024). This project will simplify our technology
platform and further enhance passenger and
driver experience.
Enhancing shareholder value – dividend
declared and capital growth
Two of the ‘Better Before Bigger’ strategy’s main goals
were for A2B’s core operations to deliver sustainable
profits by:
1) creating positive free cash flow; and
2) unlocking value through the return of capital
to shareholders from property divestments.
The strategy implemented has delivered significant
earnings and cash flow improvement.
In May 2022, a registered qualified valuer independently
valued A2B’s portfolio of three properties (two in Sydney
and one in Melbourne) between $102 million and
$114 million. During the course of FY23, we entered
into contracts to sell the two Sydney properties for
a combined value of $97 million and are now working
to sell the remaining property in Melbourne.
The total net proceeds from the sales of the two Sydney
properties (after deal costs and tax) are $92.8 million.
In addition to returning capital to shareholders, A2B will
use some of the proceeds to repay debt and for working
capital purposes.
The successful delivery of our strategy has enabled
the Board to pay a fully franked dividend of $0.05 per
share for FY23. In addition, the Board intends to declare
a further special fully franked dividend of $0.55 per
share following receipt of proceeds from the sale of
the O’Riordan Street property currently scheduled for
settlement in mid-December 2023.
The Board has set a dividend policy of providing
a minimum dividend payout of 50% underlying
attributable profit at every reporting period commencing
from the second half of FY24. The Board’s ability to make
these dividend commitments reflects the success of the
operational strategy we have implemented.
3
3
Executive Chairman’s Report (continued)
Board and leadership
Over the past year, A2B further strengthened its Board
and leadership team through the appointments of Brent
Cubis (Non-executive Director) and Howard Edelman
(General Counsel & Company Secretary).
With the Company’s balance sheet repaired, dividends
reinstated including a planned special dividend, and
successfully returning A2B to profitability by right-sizing
its cost structure, we are well placed to continue
growing in FY24 and beyond.
Mr Cubis joined the Board in October 2022 as an
independent non-executive director and Chair of the
Audit and Risk Committee. He brings more than 20
years of Board and advisory experience to A2B, having
been CFO at Cochlear, Nine Network Australia, and
Prime Media Limited.
In January 2023, Mr Edelman joined A2B’s senior
executive team. He has close to 30 years of corporate
experience at leading companies such as Australian
Super, Super Retail Group, AUB Group, and Real Pet
Food Company.
Positive outlook for continued growth
We remain committed to our vision to be the leading
provider of personalised transportation services and
solutions in Australia, dedicated to the success of our
customers, people, and stakeholders. A2B is well poised
for future growth, building on the Team’s work during
the past 12 months and improving industry conditions
post COVID-19.
As we head into FY24, fleet growth is continuing with
150 cars added since 30 June 2023. Positive factors
such as rising migration levels, an improvement in
vehicle supply, along with the removal of restrictions
on taxi license plates as a result of deregulation in
NSW, will assist with further growth. However, some
wider economic factors such as the recent decline in
consumer spending may soften fares in the near term.
Thank you
In closing, on behalf of the Board, I would like to thank
the A2B Team for its drive, dedication, and continued
focus as we complete our reset. Thanks also to the
drivers and operators partnering with A2B to deliver
a critical service to our communities. And finally, thank
you to our shareholders for your ongoing support as we
deliver on the Company’s full potential.
A2B is well placed to continue growing profitably and
be in a position to lead the personal transportation
sector in Australia. We have an exciting 12 months
ahead as we benefit from upcoming structural and
regulatory changes and underlying growth in demand
and supply.
Yours sincerely,
Mark Bayliss
Executive Chairman
4
A2B Annual Report 2023
Board of Directors
Mark Bayliss
Executive Chairman
Mark was appointed as Executive Chairman of the Company on 7 March 2022 and is also a non-executive
director of Ecofibre Limited. Mark was previously Executive Chairman and CEO of ASX listed business
technology group, CSG Ltd. His previous executive roles include being CEO of Grays eCommerce Group
Limited, and CEO of Quick Service Restaurants Holdings, a national fast-food chain of 630 restaurants. Mark
has spent four years as a Partner at Anchorage Capital, a private equity fund specialising in the turnaround
of underperforming businesses. Mark has also performed roles as Executive Chairman of Burger King (NZ),
and as Chief Financial Officer of Australian Discount Retail and Chief Financial Officer of Fairfax Media Limited.
Mark has a Bachelor of Science from the London School of Economics and is a member of the Institute
of Chartered Accountants in England and Wales and the Australian Institute of Company Directors.
Brent Cubis
Independent Non‑Executive Director
Brent was appointed as a Director of A2B on 3 October 2022. He is Chairman of the Audit and Risk
Committee. Brent is a highly experienced Non-executive Director, Advisory Board Member and CFO
mentor with over 30 years of board level experience in senior finance roles. Brent is currently a Non-
executive Director of ARN Media Limited, EML Payments Limited, SilverChain Group, Carbon Cybernetics,
and leading youth cancer charity Canteen Australia. His previous roles have included CFO of Cochlear Ltd,
CFO of Nine Network Australia and a Non-executive Director of Prime Media Group Limited.
Brent has a Bachelor of Commerce (Finance/Accounting and Information Systems) from the University
of New South Wales, is a Chartered Accountant and a Graduate Member of the Australian Institute
of Company Directors.
Jennifer Horrigan
Independent Non‑Executive Director
Jennifer was appointed as a Director in September 2020. She is Chair of the Remuneration and Nominations
Committee and a member of the Audit and Risk Committee. Jennifer brings 25 years of experience across
investment banking, financial communications and investor relations and was formerly the Chief Operating
Officer in Australia of the independent investment bank Greenhill Australia (previously Greenhill Caliburn).
Jennifer is Chairman of Dexus Asset Management Limited (includes Dexus Industria REIT (ASX: DXI) and
Dexus Convenience Retail REIT (ASX: DXC)) and a Director of unlisted AMP Capital Funds Management
Limited, AMP Investment Services Pty Limited and Yarra Funds Management Limited.
Jennifer’s qualifications include a Bachelor of Business (QUT), a Graduate Diploma in Applied Finance
(FINSIA) and a Graduate Diploma in Management (AGSM). She is a member of the Australian Institute
of Company Directors.
Clifford Rosenberg
Independent Non‑Executive Director
Clifford was appointed as a Director in August 2017. He is a member of the Audit and Risk Committee and
the Remuneration and Nominations Committee. Clifford is currently a Non-executive Director of JSE listed
Bid Corporation and ASX listed TechnologyOne Limited. Clifford was previously a Non-executive Director of
Afterpay Limited (2017–2020) and Nearmap Limited (2011–2022) and has over 25 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).
Clifford holds a Master of Science in Management (Honours) 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.
5
Corporate Governance
A2B 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.
CORPORATE GOVERNANCE HIGHLIGHTS
The Company continued to focus on corporate governance during FY23, reflecting the Board’s
commitment to fostering a strong governance culture. Key highlights included:
•
•
•
Succession planning and leadership: A key focus of the Board during FY23 was the
management of the leadership at the Company. Mark Bayliss continues in the role as
Executive Chairman following the short period of Daniella Fonterra acting as CEO &
Managing Director. Mark Bayliss will continue to lead the Company in the role of
Executive Chairman, for the foreseeable future.
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 continued enhancements
to certain A2B contracts and supplier on-boarding processes as reflected in the
Company’s most recent Modern Slavery Statement.
Board and Committee Charters: Updates to the Board and Committee Charters have
been approved by the Board.
Role of the Board
The Board is responsible for the corporate governance of the Group. 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.
The Board is committed to instilling a culture where its people are expected to behave in a lawful,
ethical and socially responsible manner. Details on the standards of ethics and conduct that the
Company’s representatives are expected to follow can be found in A2B’s Code of Conduct,
available on the A2B website.
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 has delegated responsibility for overseeing the day-to-day
operation of the Company to management.
Board Committees
The Board also delegates a number of responsibilities to its Committees, as set out in their respective
Charters.
The Audit and Risk Committee is responsible for overseeing the Company’s financial reporting
process, external and internal audit, processes for monitoring compliance with laws, regulations and
the Code of Conduct, and processes for identifying and managing risk.
The Remuneration and Nomination Committee is responsible for assisting the Board with Director
nominations and Board succession planning, and the Company’s remuneration framework.
6
A2B Annual Report 2023
6
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Board composition and performance
The Board currently comprises of three Non-executive Directors and one Executive Chairman.
The Board believes that its current composition represents a depth and breadth of skills and
experience that will allow it to continue operating effectively. For details about the Directors and
their experience, qualifications and Committee memberships, refer to page 5.
The Board as a whole discusses and analyses its performance during the year, including suggestions
for change or improvement. For more details about the process for the performance evaluation of
the Board, as well as its Committees, individual Directors and executive KMPs, refer to page 10 of
the 2023 Corporate Governance Statement and the Company’s Performance Evaluation Policy.
A2B’s Values and Culture
The Company has five 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.
Caring
Collaborative
Authentic
Accountable
Progressive
• We care about
our business, our
customers, each
other. We care
about safety,
quality, reliability
and having fun.
• We work
together as one
connected
Team, including
our customers
and our
partners.
• We are straight
up. We call it as
it is with respect
for each other.
• We keep our
• We are
word and take
responsibility
for our work.
innovative,
we keep
moving
forward and
are goal
oriented.
Governance policies
The Board has put in place a suite of policies, all of which are available on the A2B website. They
set out the Company’s governance arrangements in relation to matters such as speaking up,
securities trading, shareholder communication, market disclosures, anti-bribery and corruption, and
diversity. An overview of some of the key policies of the Company can be found on pages 11 to 16
of the 2023 Corporate Governance Statement.
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. Details about the Company’s measurable objectives and its
progress in achieving them in FY23 can be found on page 12 of the 2023 Corporate Governance
Statement.
Approach to risk management
The Board, in consultation with the Audit and Risk Committee, is responsible for reviewing, ratifying
and monitoring the Company’s systems of risk management. The Audit and Risk Committee 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 regular reviews of those
controls and relevant policies and procedures are undertaken.
The CEO and Managing Director (a role currently performed by the Executive Chairman) and
Management are responsible for developing and promoting the appropriate management of risk
and the ongoing maintenance of the control environment. Refer to pages 16 to 17 of the 2023
Corporate Governance Statement for additional information about the Company’s risk framework.
An overview of the material risks affecting the company can be found on pages 15 to 16.
Additional details about the Company’s corporate governance are available in the 2023 Corporate
Governance Statement, available on the Company’s website at www.a2baustralia.com/investor-
center/corporate-governance/.
7
7
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Operating and Financial Review
Principal activities
A2B’s principal activities are to serve Passengers, Drivers and Taxi Operators by facilitating taxi
bookings, trips and payments. A2B is a leader in the Australian personal transportation sector under
the “13cabs” and “Silver Service” brands. With approximately 8,000 vehicles in its networks across
Australia, A2B is a leading participant in Australia’s personal transportation market.
A2B has two core revenue streams – network subscription and payment processing. A2B receives a
fixed monthly fee from taxi operators for network subscriptions. Payments processing revenue is
generated on non-cash taxi payment services based on the value of the fare processed.
Basis of preparation
The FY23 statutory results, including the prior comparative results in the attached financial statements,
are reported in accordance with Australian Accounting Standards adopted by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001 including the leasing standard
AASB16.
The Company believes that its underlying results, while being a non-statutory measure, provide a
better indicator of Group performance. As such, unless otherwise stated, the full year results disclosed
in this Operating and Financial Review are underlying results on a pre-AASB16 basis excluding
significant items and the impact of one-off transactions.
Financial Results – return to profitability underpinned by our ‘BETTER BEFORE BIGGER’ strategy
The benefits from the focused execution of the Company’s ‘BETTER BEFORE BIGGER’ strategy are
reflected in the FY23 results, with A2B delivering a strong turnaround in financial performance,
returning to profitability and strengthening its balance sheet. In addition, A2B is successfully
executing its property portfolio strategy, selling both of its Alexandria properties in Sydney.
In May 2023, A2B completed the sale of its Bourke Road (Alexandria) property for $19.0 million. On
30 March 2023, A2B entered into an agreement for the sale of its O’Riordan Street (Alexandria)
property for $78.0 million, and this is expected to settle in December 2023. At 30 June 2023, a 12%
deposit ($9.4 million) for the sale of O’Riordan Street had been received and held in escrow.
On a statutory basis, A2B recorded an EBITDA of $42.8 million (FY22 EBITDA loss of $22.3 million) and
net profit after tax of $27.1 million (FY22 net loss after tax of $27.8 million). These statutory results
include the impact of the AASB16 accounting leasing standard, the net gain from the sale of the
Bourke Road Alexandria property, the net gain from a land swap transaction in relation to the
Alexandria property, and the taxi license plate compensation received from the NSW Government.
Further detail relating to these significant items are outlined below.
On an underlying basis, A2B recorded positive EBITDA of $20.1 million (FY22 loss of $9.4 million) and a
net profit after tax of $5.1 million (FY22 loss of $17.1 million). The $29.5 million year-on-year EBITDA
improvement was supported by revenue growth of $22.2 million and cost reductions of $9.7 million,
with FY22 including $2.3 million in COVID-19 related Government support that was not received in
FY23.
8
A2B Annual Report 2023
8
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Underlying financial results
(excl. AASB16 impact, significant items and one-off transactions)
Revenue
Other income
Expenses
EBITDA
Depreciation & Amortisation
EBIT
Finance costs
Profit before tax
Income Tax
NPAT
EBITDA margin
Earnings per share
Reconciliation of underlying profit to statutory profit
Underlying profit before tax
(excl. AASB16 impact, significant items and one-off transactions)
AASB16 impact
Net gain on property transactions
NSW taxi plate licence compensation
Impairments and asset write-offs
Termination and restructuring
Total items excluded from underlying profit before tax
Statutory profit before tax
Income Tax
Statutory NPAT
Statutory earnings per share
2023
2022
Change
$m
147.3
0.3
(127.5)
20.1
(9.6)
10.5
(3.1)
7.4
(2.3)
5.1
13.6%
4.2 cents
$m
125.1
2.6
(137.1)
(9.4)
(14.2)
(23.6)
(0.9)
(24.5)
7.3
(17.1)
(7.5%)
(14.1 cents)
over PCP
18%
(314%)
(145%)
(130%)
(130%)
2023
$m
2022
Change
$m
over PCP
7.4
(24.5)
-
-
-
-
21.3
1.6
- (9.7)
(5.6)
(15.3)
(39.7)
11.9
(27.8)
(22.9 cents)
(2.0)
20.9
28.3
(1.2)
27.1
22.4 cents
(130%)
(238%)
(171%)
(197%)
Revenue – up 17.7% to $147.3 million
A2B recorded total revenue of $147.3 million (FY22 $125.1 million), an increase of $22.2 million or 17.7%,
reflecting:
- Network subscription revenue, +$11.8 million or +27.9%
- Payment processing revenue, +$9.6 million or +37.4%
Taxi license plate income, +$2.5 million or +96.2%
-
School taxi and bus route services revenue, +$4.7 million or 73.2%
-
Taxi equipment hardware sales and rental income, +$5.6 million or 50.7%
-
Partly offset by:
- Vehicle sanitisation income, -$5.6 million, not recurring in FY23 (revenue stream during COVID)
- Courier service revenue, -$2.8 million, discontinued in FY23 in line with strategy
-
Taxi operating income, -$2.8 million, following the rationalisation of the operated fleet as per
our strategy
- Other revenues, -$0.8 million or -0.6%
9
9
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
A2B’s two core revenue streams, network subscription revenue and payments processing revenue
were the main contributors to the year-on-year revenue growth.
Network subscription revenue – up 27.9% to $54.2 million
Network subscription revenue is A2B’s largest revenue stream and is driven by the number of taxis
affiliated with its networks.
In line with A2B’s strategy, fleet growth was targeted at its core and higher yield networks – 13cabs
and Silver Service. During the past year, a range of initiatives were instigated to attract new drivers
to these two leading taxi brands, while also transitioning drivers from the lower-yielding CHAMP
brand.
A2B’s total fleet grew to 7,803 taxis as of 30 June 2023, an increase of 972 or 14.2% over 12 months.
The 13cabs and Silver Service brands experienced even more encouraging growth, up 1,585 taxis or
26.7%. As at 30 June 2023, 96% of the fleet was affiliated with either 13cabs or Silver Service,
compared with 86% one year earlier.
In addition to fleet growth, A2B also adopted a new pricing strategy for each State that enabled fee
increases during the year. Reflecting this, of the $11.8 million in network subscription revenue
improvement during FY23, $5.7 million was attributable to fleet growth and $6.1 million was
attributable to the improvement in fleet mix and fee increases.
Payments processing revenue – up 37.4% to $35.4 million
Payment processing revenue is A2B’s second largest revenue stream and is driven by the value of
taxi fares processed through A2B’s payment system.
Total taxi fares processed ended at $854.4 million in FY23, an increase of $247.5 million or 40.8% on
the prior period. Of the year-on-year growth in fares processed, 82% was attributable to an increase
in demand (i.e. volume impact) and 18% was attributable to higher average fares (i.e. price impact).
The price impact was supported by fare rises in most states throughout the year.
The encouraging recovery continued throughout the year with fares processed levels reaching 87%
of pre-COVID (FY19) levels.
10
A2B Annual Report 2023
10
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Fares processed – up 41% to $854.4 million
Strong year-on-year growth continued for the period from July 2022 to March 2023. In Q4, the strong
growth trend in taxi fares processed softened, as A2B cycled through a full quarter in a post COVID
environment and softening macroeconomic conditions started to impact consumer demand.
For the full year, all payment channels experienced double-digit growth with the in-app payment
channel and Spotto both reaching all-time highs. Recovery in Cabcharge fares continued,
supported by more people returning to the office and growth in airline activity. In FY23 Cabcharge
fares ended at 72% of pre-COVID levels while the total value of credit and debit cards processed
ended at 94% of pre-COVID levels.
Other income
In FY23 A2B recognised $0.3 million in other income, a decrease of $2.3 million from the comparative
period. The reduction in other income relates primarily to the JobSaver payments received in NSW in
FY22 which are not recurring.
On a statutory basis, other income was $23.2 million, this is an incremental $22.9 million gain
compared with the underlying other income mentioned above. This increase includes a net gain on
property transactions of $21.3 million and $1.6 million in relation to taxi license plate compensation
received from the NSW Government. Further details are included in Note 3 of the consolidated
financial statements.
Operating Expenses
Reflecting A2B’s focus on simplifying and streamlining its operations under the ‘BETTER BEFORE
BIGGER’ strategy, total statutory operating expenses (excluding depreciation and amortisation)
decreased by $23.4 million or 15.5% to $127.7 million (FY22 $151.1 million).
On an underlying basis, total operating expenses decreased by $9.7 million or 7.1% to $127.5 million.
Direct mobility and payment related expenses increased by $4.3 million or 13.5%. This increase was
driven by an associated revenue growth of $22.2 million or 17.7%. As a result, A2B’s net revenue
margin improved from 74.6% in FY22 to 75.5% in FY23.
Total indirect expenses were $91.5 million, down by $13.9 million or 13.2% compared with FY22. During
the year we completed the restructuring of A2B’s contact centres as part of the drive to streamline
its business and improve efficiency going forward.
11
11
A2B Australia Limited
and its Controlled Entities
Underlying EBITDA waterfall
Annual Financial Report
Year Ended 30 June 2023
A net revenue improvement of $17.9 million, a $2.3 million reduction in other income coupled with
$13.9 million lower indirect expenses resulted in an FY23 EBITDA improvement of $29.5 million
compared with FY22, returning an EBITDA margin of 13.6%.
Depreciation and amortisation
Total depreciation and amortisation charges were reduced by $4.6 million or 32.4% to $9.6 million,
primarily due to asset impairments in FY22 and a reduction in internally developed software. On a
statutory basis (including the impacts of AASB16), total depreciation and amortisation charges were
reduced by $5.2 million or 32.0%.
Net finance costs
Net finance costs increased by $2.2 million to $3.1 million (FY22 $0.9 million) due to higher interest
rates in FY23, and higher average debt levels compared to FY22. A portion of the proceeds from the
sale of the Alexandria properties will be used to pay down debt.
Income tax expense
On a statutory basis, A2B recorded an income tax expense of $1.2 million (FY22 income tax benefit
of $11.9 million) after the $28.3 million profit before income tax, adjusted for non-deductible items
and utilisation of prior period tax losses.
Profit after tax
Underlying net profit after tax was $5.1 million (FY22 loss of $17.1 million). A statutory net profit after
tax of $27.1 million was recorded in FY23 (FY22 loss of $27.8 million).
Cashflow
At 30 June 2023, A2B held $29.5 million cash, up by $17.2 million compared with the prior year.
On a statutory basis, A2B generated $10.4 million of cash flow from operations in FY23, an
improvement of $16.6 million compared with FY22’s operating cash outflow. In addition, FY22
benefited from a $5.3 million tax refund. On a like-for-like basis, cash flow from operations improved
by $21.9 million compared with FY22.
12
12
A2B Annual Report 2023
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Net cash flow from investing activities was $11.8 million, primarily reflecting the sale of A2B’s Bourke
Rd property for $19.0 million and Taxi license plate compensation of $1.6 million received from the
NSW Government. Excluding the impact of these items, net cash flow from investing activities was a
cash outflow of $8.8 million, an increase of $0.5 million compared with FY22.
Given the positive cash performance in FY23, A2B reduced its borrowings by $3.3 million.
Net cash flow from operations
Net cash flow from investing activities
Net cash flow from financing activities
Net change in cash position
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
2023
$m
10.4
11.8
(5.0)
17.2
12.3
29.5
2022
$m
(6.2)
(8.3)
15.0
0.4
11.9
12.3
Change
$m
16.6
20.1
(20.0)
16.8
0.4
17.2
On a like-for-like basis, free cash flow improved by $22.0 million during FY23, excluding the impact of
AASB 16 treatment and one-off transactions. Including the impact of one-off transactions free cash
flow improved by $42.6 million. Further detail is set out in the table below.
Free cash flow
Net cash flow from operations
Net cash flow from investing activities
Payment of lease liabilities
Free cash flow (excluding AASB16 impact)
One-off tax refund (Federal Government COVID relief)
Free cash flow excluding AASB16 and COVID relief
2023
$m
10.4
(8.8)
(1.5)
0.1
2022
$m
(6.2)
(8.3)
(2.1)
(16.6)
- (5.3)
(21.9)
0.1
YoY improvement in Operational free cash flow
One-off transactions (Bourke Road sale and NSW taxi licence
compensation
YoY improvement in Statutory free cash flow
22.0
20.6
42.6
An improvement in working capital management resulted in a strengthening of A2B’s balance sheet
as at 30 June 2023. An increased focus on collections resulted in a material reduction of trade
receivables, allowing A2B to rebalance and reduce its trade payables. In addition, $2.3 million in
restructuring costs relating to FY22 were paid during the year and $5.9 million in vehicles were
financed on behalf of operators who joined the 13cabs and Silver Service networks. At 30 June 2023,
net cash was $13.9 million, an improvement of $20.5 million compared with the prior year.
Net debt/cash movement
Net debt at 30 June 2022
Underlying EBITDA FY23
Sale of Bourke Road
NSW taxi plate licence compensation
Capital expenditure
Vehicle financing
Debt repayment
Restructuring cost
Other working capital movements
Total movement
Net cash at 30 June 2023
$m
(6.6)
20.1
19.0
1.6
(8.8)
(5.9)
(3.3)
(2.3)
0.1
20.5
13.9
13
13
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
A2B’s ability to generate cash is expected to further improve in FY24 on the back of improved
profitability, and a stronger working capital position, coupled with the decision to outsource any
future vehicle financing. In addition, the Group expects to receive the proceeds from the settlement
of O’Riordan Street in December 2023.
FY23 Dividends
No dividends were paid or declared during FY23.
Directors have declared a final FY23 fully franked dividend of $0.05 per share, scheduled for payment
on 26 October 2023. The record date for the FY23 final dividend is 29 September 2023.
Financial position
Balance sheet
A2B significantly improved its financial position during FY23. Positive cash generation coupled with a
reduction of $14.5 million in receivables, allowed for a reduction in trade and other payables by $17.7
million. As a result, the current ratio (excl. assets held for sale) improved from 1.2 at 30 June 2022 to
1.6 at 30 June 2023.
Assets held for sale as at 30 June 2023 relate to the O’Riordan Street property in Alexandria. Sale
contracts in relation to this property were exchanged in FY23, with settlement expected in December
2023. In addition, the Company has one property asset remaining on its balance sheet. This property
asset has a carrying value of $2.2 million (recorded in non-current assets) and was listed for sale in
July 2023.
Cash and cash equivalents
Trade and other receivables
Assets held for sale
Other current assets
Total current assets
Total non-current assets
Total assets
Trade and other payables
Loans and borrowings
Other current liabilities
Total current liabilities
Loans and borrowings
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Net cash / (debt)
30 June 2023
$m
29.5
45.8
10.4
6.6
92.3
92.5
184.8
30 June 2022
Change
$m
$m
12.3
17.2
(14.5)
60.3
- 10.4
(0.3)
7.0
12.8
79.6
(4.5)
98.5
8.3
178.1
38.2
0.6
12.0
50.8
15.0
4.8
19.8
70.6
55.9
1.6
10.2
67.7
17.3
7.0
24.3
92.0
(17.7)
(1.0)
1.8
(16.9)
(2.3)
(2.2)
(4.5)
(21.4)
114.2
13.9
86.1
(6.6)
27.9
20.5
Non-current borrowings were reduced by $2.3 million to $15.0 million. A2B currently has a working
capital facility in place with CBA, expiring in September 2024. In August 2023, post balance date, this
facility was extended to September 2026.
14
A2B Annual Report 2023
14
A2B Australia Limited
and its Controlled Entities
Outlook
Annual Financial Report
Year Ended 30 June 2023
We have experienced improved trust in our brands in FY23, with a strong increase in the 13cabs and
Silver Service fleets and total fares nearing pre-pandemic levels, along with improving efficiency
through healthy booking rates.
As we head into FY24, fleet growth is continuing with 150 cars added since 30 June 2023. Positive
factors such as rising migration levels, an improvement in vehicle supply, along with the removal of
restrictions on taxi license plates as a result of deregulation in NSW, will assist with further growth.
However, some wider economic factors such as the recent decline in consumer spending may soften
fares in the near term.
Another key focus for FY24 is improving our value proposition for drivers and passengers. In FY24 we
will undertake a major project by upgrading all in-car technology (before 3G is switched off in June
2024) to ensure the continuity and future growth of our payments processing volumes. We are
investing $3.5 million through (a one-off capital expenditure) to simplify our technology platform and
further enhance passenger and driver experience.
With the Company’s balance sheet repaired, dividends reinstated including a planned special
dividend, and successfully returning A2B to profitability by right-sizing its cost structure, we are well
placed to continue growing in FY24 and beyond.
Material business risks
The operating and financial performance of A2B is influenced by a variety of general common
economic and business conditions, including levels of consumer spending, inflation, interest and
exchange rates and access to debt and capital markets.
Risks that have the potential to materially affect the performance of the group are reviewed on a
regular basis by the Board and 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.
15
15
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Strategic Risk
Nature of Risk
Actions / Plans to Mitigate
Regulatory
changes
A2B’s operations are subject to state and
territory regulation and control.
Continue to work with Taxi Regulators on
issues affecting the Taxi Industry.
All states and territories have a 5% limit in place
on non-cash taxi payment service fees.
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.
More recently the NSW government introduced
a package of reforms for the point-to-point
transport industry. These reforms include freeing
up the supply of taxis by removing the limit on
the number of Taxi licences that are available.
These changes took effect from 1 August 2023.
Taxi licences will no longer be able to be bought
and sold.
It is possible that Taxi Regulators may change
rules around required standards and quality
control aspects of Taxi Networks.
Building administration tools that assist
with levy collections and ensure Drivers
and Operators have the information
they require in order to comply with levy
requirements.
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.
Maximise the opportunities for the A2B
regulatory
Group
frameworks, especially by bringing more
drivers into our networks.
presented
by
Taxi Regulators may affect the value of Taxi
plate licences by setting the supply of new Taxi
for
plate
Government leased Taxi plate licences in those
states where restrictions remain in place.
licences and setting
rates
the
Changes to
competitive
landscape /
changes to IT
environment
Existing and new competitors
in personal
transport who offer alternative service and
payment methods, both within and outside the
regulatory framework, or who are subject to less
stringent regulation.
Potential loss of business if the Company fails to
keep pace with technological change with
respect to Network Operations, bookings, and
payments.
Be at
the
forefront of
serving
technology
the personal
industry. Develop and
development
transport
integrate bookings and payments.
Strategic partnering to bolster existing
technology
and
leverage scale.
resources
and
Standardising,
scaling, and
raising
service standards in the mobility business
to be leveraged in Australia and the
overseas markets we operate in.
In-Vehicle
Technology
Roll-out
In FY24 A2B will undertake a major project by
upgrading all in-car technology (before 3G is
in June 2024) to ensure the
switched off
continuity and future growth of our payment
processing volumes. An IT project of this nature
for any company has inherent risks of delays.
Any material delays could affect our ability to
process in car payments.
Contingency plans are in place to
provide for the continued processing of
fares with the current system in case of
any delays in the roll-out of the new
technology platform.
16
A2B Annual Report 2023
16
A2B Australia Limited
and its Controlled Entities
Directors’ Report
Annual Financial Report
Year Ended 30 June 2023
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 2023.
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:
▪ Mark Bayliss
▪
Jennifer Horrigan
▪ Clifford Rosenberg
▪ Brent Cubis (appointed 3 October 2022)
▪ Daniela Fontana (appointed 1 March 2023 and stepped down on 27 April 2023)
▪ David Grant (stepped down on 3 October 2022)
The qualifications, experience and special responsibilities of current Directors of the Company are
set out in the Board of Directors section.
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
Name of listed company
Appointment date
Cessation date
Mark Bayliss
Jennifer Horrigan
EcoFibre Limited
Dexus Industria REIT
Dexus Convenience Retail REIT
QV Equities Limited
Clifford Rosenberg
Technology One Limited
Brent Cubis
Bid Corporation Limited
Nearmap Limited
ARN Media Limited
1 September 2022
3 December 2013
27 July 2017
26 April 2016
27 February 2019
September 2019
-
-
-
31 March 2023
-
-
3 July 2012
1 December 2022
14 June 2023
-
-
EML Payments Limited
25 November 2022
Prime Media Group Limited
15 April 2021
31 March 2022
Daniela Fontana1
None
-
Skelton1
David Grant1
Event Hospitality & Entertainment Ltd
25 July 2013
Retail Food Group Limited
25 September 2018
The Reject Shop Ltd
1 May 2020
-
-
-
-
1. Details listed are current as at the date the Director ceased being a Director of the Company.
17
17
A2B Australia Limited
and its Controlled Entities
Company Secretary
Howard Edelman
Annual Financial Report
Year Ended 30 June 2023
Howard Edelman was appointed Group General Counsel and Company Secretary on 23 January
2023 following the resignation of Adrian Lucchese. Howard has more than 30 years of corporate and
commercial experience and has previously worked as General Counsel and Company Secretary at
Real Pet Food Company, CSG Limited, AUB Group Limited, CIMB Australia and iSoft Group Limited.
He has also held senior roles with AustralianSuper and Super Retail Group. Howard sits on the National
Executive Committee for the Australian Association of Corporate Counsel (ACC) and is also Vice
President of ACC NSW.
Howard holds a Bachelor of Arts degree from Hamilton College and a Doctor of Law from Brooklyn
Law School.
Dividends
No dividends were paid or declared during FY23. In August 2023 the Board declared to pay a fully
franked dividend of $0.05 per share for FY23 with a record date of 29 September 2023 and a
payment date of 26 October 2023.
Principal activities
The principal activities of the Group are included in the Operating and Financial Review (“OFR”) set
out on pages 8 to 16. 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.
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 8 to 16. The Group’s business strategies
and prospects for future financial years are also included in the OFR.
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.
Events subsequent to reporting date
No other matter or circumstance has arisen since 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.
In August 2023 the Board declared to pay a fully franked dividend of $0.05 per share for FY23 with a
record date of 29 September 2023 and a payment date of 26 October 2023.
Following completion of the A2B property portfolio review, the Board resolved in July 2023 to sell its
remaining property located in Melbourne at Downing Street, Oakleigh. Marketing activities
commenced in July 2023.
Likely developments
Information about likely developments in the Group’s operations is included in the “Outlook” section
of the OFR on page 15.
18
A2B Annual Report 2023
18
A2B Australia Limited
and its Controlled Entities
Environmental regulation
Annual Financial Report
Year Ended 30 June 2023
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 current Director as at the date of this report are set out in
the table below.
Director
Mark Bayliss
Brent Cubis
Jennifer Horrigan1
Clifford Rosenberg2
Interest in
shares
800,000
0
102,122
111,307
1. The indirect shares are 102,122 fully paid ordinary shares held by Macdonald Horrigan Family Holdings as trustee for
Macdonald Horrigan Family Superannuation Fund.
2. The indirect shares are 111,307 fully paid ordinary shares held by the The Rosenberg Company Pty Ltd as trustee for The
Rosenberg Superannuation Fund.
Remuneration Report
The Remuneration Report is set out on pages 22 to 36 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.
Director2
Mark Bayliss
Jennifer Horrigan
Clifford
Rosenberg
Brent Cubis4
Daniela Fontana5
David Grant6
Board
Audit and Risk1
Remuneration and
Nominations1
Held3
Attended
Held3
Attended
Held3
Attended
13
13
13
11
1
2
13
13
13
11
1
2
5
5
5
3
0
2
5
5
5
3
0
2
3
3
3
2
0
1
3
3
3
2
0
1
1. All Directors are invited to and generally attend, Board Committee meetings. The “Attended” columns in the table
reflect attendance at meetings.
2. “Director” in the table means a Director who was a director of the Company at any time during the financial year.
3. The “Held” columns in the table reflect the number of meetings held during the period in which the Director held office.
4. Brent Cubis was appointed on 3 October 2022.
5. Daniela Fontana was appointed on 1 March 2023 and resigned on 27 April 2023.
6. David Grant retired on 3 October 2022.
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.
19
19
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
As at the date of this report, there are 2,470,371 Performance Rights over unissued shares which have
been granted to senior executives under the Company’s LTI Plan. Further information on the LTI Plan
and Performance Rights held by key management personnel are included in the Remuneration
Report on pages 22 to 36.
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, insurance policies prohibit further disclosure of the nature of the
insurance coverage 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 26 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 37.
20
A2B Annual Report 2023
20
A2B Australia Limited
and its Controlled Entities
Rounding off
Annual Financial Report
Year Ended 30 June 2023
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.
Mark Bayliss
Executive Chairman
22 August 2023
Brent Cubis
Director
22 August 2023
21
21
A2B Australia Limited
and its Controlled Entities
Remuneration Report
Annual Financial Report
Year Ended 30 June 2023
Letter from the Chairman of the Remuneration and Nomination Committee
Dear Shareholders,
Your Board is pleased to present the Remuneration Report for the year ended 30 June 2023. This
Report provides an overview of our remuneration structures, policies, and practices.
Our remuneration strategy is designed to ensure accountability for performance and to reward
outcomes achieved and shareholder value creation.
Consistent with this approach, shareholders will remember that, given A2B’s
loss-making
performance in FY22, no STI or LTI were awarded to executive KMP (other than the LTI incentives
approved by shareholders at the EGM on 28 April 2022 for the newly appointed Executive Chairman,
Mark Bayliss or the portion of STI paid to departing executives as part of their separation package).
Twelve months on, the 2023 financial year has achieved a major turnaround for A2B with the
company achieving an underlying EBITDA of $20.1 million, a significant achievement and
representing a $29.5 million turnaround from the $9.4 million loss in FY22.
The significant effort by the Team has returned the Company to profitability, for the first time since
FY19, and also delivered a streamlined and focused business that positions A2B for further sustainable
growth in the future. Your Board firmly believes these achievements should be recognised through
the FY23 remuneration outcomes.
Executive Remuneration
The remuneration outcomes for FY23 correctly reflect the significant effort by the executive team to
achieve this important turnaround and the significant value created for shareholders.
The executive remuneration arrangements are essential in retaining and rewarding key talent and
ensuring an aligned team, focused on continuing to deliver value to shareholders.
The overall mix between STI and LTI is weighted toward long-term incentives (70% of incentives), to
reflect long-term alignment with shareholders and value creation.
Of the 30% of incentives available as STI, 60% of the STI opportunity was dependent on the
achievement of an EBITDA gateway hurdle. The remaining 40% of the STI opportunity was assessed
based on the achievement of individual performance measures.
The LTI incentives represent a maximum opportunity of 70% of incentives and were awarded as
Performance Rights, subject to the same performance metrics approved by shareholders for the
Executive Chairman at the EGM on 28 April 2022 (share price hurdles of $1.70 VWAP, $2.00 VWAP
and $2.30 VWAP, with a 3-year sunset date of 30 June 2026). Should all three VWAP hurdles be met,
and the 600,000 Performance Rights (of which 358,000 were granted to KMP) convert to Shares, the
maximum dilution represents approximately 0.49% (0.30% relating to the KMP component) of the
current issued ordinary share capital of the Company, while significant value will have been created
for shareholders.
Detailed information regarding remuneration outcomes for FY23 are outlined in section 4 of this
Remuneration Report.
Non-Executive Director Remuneration & Arrangements
Given the wider turnaround and cost reduction initiatives across the business during FY23, the Board
implemented a 15% reduction to Non-Executive Director Board and Committee fee arrangements
for FY23. In addition, the Board agreed to decrease the number of Directors by one – taking the total
number of Non-Executive Directors to three and to also reduce the aggregate Non-Executive
22
22
A2B Annual Report 2023
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Director fee pool from $1.3 million per annum (which was approved by shareholders on 26 November
2014) to $1.0 million per annum.
The Board has elected to continue these Non-Executive Director fee arrangements through FY24.
Leadership
The Board would like to recognise the significant turnaround achieved under the dedicated
leadership of Executive Chairman Mark Bayliss during FY23. The Board also recognises that Mr Bayliss
consented to continue his role of Executive Chairman for the foreseeable future, following Ms Daniela
Fontana stepping down as CEO & Managing Director. In addition to A2B’s stronger operational and
financial position, other FY23 highlights include the successful property divestment achieved in line
with May 2022 independent valuations, despite sharply deteriorating property market conditions. This
transaction will allow significant value to be returned to shareholders via an expected $0.55 cent
special fully franked dividend, currently anticipated to be paid on settlement in December 2023.
Given these strong results led by Mr Bayliss and his agreement to extend his role as Executive
Chairman (and noting that an LTI was not awarded for Mr Bayliss in FY23), the Board has determined
to issue an additional cash bonus to Mr Bayliss of $200,000 (above the STI opportunity), to reflect the
outperformance achieved in FY23. The total FY23 Remuneration earned by Mr Bayliss is therefore
$1,125,112 (excluding Performance Rights and Incentive Shares granted in prior years).
FY24 Remuneration Approach
The remuneration framework in place for FY23 reflected the significant turnaround required and
underway across A2B. Now that a return to profitability has been achieved, the Board has prepared
a renewed remuneration framework for FY24 to reflect A2B’s focus on driving continued profitability
and growth.
The remuneration framework for FY24 will focus on rewarding growth in shareholder returns, while
ensuring remuneration outcomes are tied to robust return hurdles.
Full details of the FY24 incentives for the Executive Chairman Mark Bayliss will be available in the
Notice of Meeting for the 2023 AGM.
In conclusion, your Board is confident that the remuneration outcomes for FY23 and the proposals for
FY24 are robust, will appropriately reward executives for performance and are designed to achieve
long-term value creation and alignment with shareholders.
On behalf of the Board, thank you for your on-going support and we look forward to hearing your
feedback on this report.
Yours faithfully,
Jennifer Horrigan
Chairman
Remuneration & Nominations Committee
23
23
A2B Australia Limited
and its Controlled Entities
Remuneration Report - Audited
Annual Financial Report
Year Ended 30 June 2023
This Remuneration Report for the year ended 30 June 2023 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 8 has been audited as required by section 308(3C) of the Corporations
Act, unless otherwise stated.
1. Overview
The Board of Directors present the Remuneration Report for the year ended 30 June 2023 (FY23). This
Report provides an overview of our remuneration structures, practices and outcomes and their
alignment with the Company’s performance and strategy.
Who is covered by this report
The Key Management Personnel (KMP) covered by this report are listed in table 1 below.
Table 1: KMP included in this report
Key Management Personnel
Non-Executive Directors
Brent Cubis
Jennifer Horrigan
Clifford Rosenberg
David Grant
Executive
Mark Bayliss
Olivia Barry
Gary Becus
Role
Change in FY23
Independent Director
Appointed on 3 October 2022
Independent Director
Independent Director
Independent Director
Retired on 3 October 2022
Executive Chairman
Chief Operating Officer - B2C
Chief Operating Officer - B2B
Appointed on 1 July 2022
Ton van Hoof
Daniela Fontana
Chief Financial Officer
Chief Executive Officer & Managing Director
Appointed on 1 March 2023
Stepped down on 27 April 2023
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 33. Details of statutory Non-executive
Director fee arrangements can be found in table 9 on page 34.
The table below provides shareholders with an understanding of the actual remuneration earned by
executive KMP in FY23.
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 in table 6 prepared in accordance with the
Australian Accounting Standards.
24
A2B Annual Report 2023
24
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Table 2: Actual executive remuneration earned in FY23 (non-statutory) (unaudited)
Executive
Mark Bayliss
Olivia Barry
Gary Becus
Ton van Hoof
Daniela Fontana
Fixed
remuneration1
$
716,612
Termination
benefits
$
-
STI earned for
FY23
$
408,500
LTI vested in
FY232
$
-
375,862
351,724
451,724
101,199
-
-
-
143,750
120,000
80,000
108,000
-
-
-
-
-
Total
$
1,125,112
495,862
431,724
559,724
244,949
1. Fixed remuneration means contracted remuneration amount for base salary and superannuation during the period the
Executive was a KMP.
2. The LTI rights awarded in FY20 were tested in September 2022 and did not vest. Further information on vesting is set out
in the LTI section of this report.
2. Remuneration governance
The Board consults with the Remuneration and Nominations Committee (Committee), management,
and where necessary, external advisers, 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 and alignment with long-term value creation for shareholders
➢ 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 three times in FY23
Management
▪ CEO proposes
individual
remuneration
arrangements and performance outcomes
for his or her direct reports to the Committee
is not present when his or her
▪ CEO
remuneration is decided
External remuneration consultants and
advisers
▪ Engaged and appointed by the Board or
the Committee as required
▪ Advises the Committee and management
is fully
to ensure that the Company
informed when making decisions
▪ Mandatory disclosure requirements apply
to the use of remuneration consultants
under the Corporations Act
25
25
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
Use of remuneration consultants and advisors
No remuneration recommendations by a remuneration consultant as defined under the
Corporations Act were made during FY23.
For more detail on the Company’s charters and policies, see:
www.a2baustralia.com/investor-center/corporate-governance/
3. Executive Key Management Personnel 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 to be
rewarded for the creation of long-term shareholder value
▪ Be supported by a governance framework, to motivate, reward, and retain skilled 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, where incentive plans are offered to executive KMP
▪ Ensure any termination benefits are justified and appropriate.
Business objectives
Remuneration
strategy objectives
Remuneration structure
▪ Enhance and
expand the
operational
platform for the
creation of a
sustainable
business model for
future growth
▪ Focus on the
creation of
shareholder value
▪ Attract and retain key
talent through balanced
remuneration, market
competitive pay and
performance-focused
incentive awards
▪ Focus the executive team
on the key strategic
business imperatives
▪ Align interests of executive
KMP and shareholders
Invite executive KMP to
participate in incentive
plans where appropriate
▪
Fixed annual remuneration (“FAR”)
Set with reference to job size and
organisations of similar complexity and
industry dynamics
Variable remuneration
Equity-based incentive awards based
on the Company’s short- and long-term
performance and other vesting
conditions
Executive arrangements
Executive services agreements
formalise incentive arrangements, and
include termination and post-
termination provisions
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 adjust where appropriate to support the strategic initiatives of the
business, whilst ensuring that it remains market competitive for recruiting and retaining skilled
individuals.
In FY22, the Board adopted a new executive KMP structure for FY23. In FY23, the executive KMP
remuneration structure consisted of FAR and performance based short term and long-term incentives
awarded pursuant to STI and LTI plan rules and individual invitation letters.
26
26
A2B Annual Report 2023
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
How is the Executive
Chairman Rewarded?
The total reward for the Executive Chairman is comprised of fixed annual
reward and short and long term incentives.
How are the Executive
KMP Rewarded?
The total reward for each executive KMP is split across the following
elements:
• 50% fixed annual reward;
• 15% short-term incentive; and
• 35% long-term incentive.
Remuneration elements and incentive plans
Executive KMP 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 similar complexity and industry dynamic to that of
A2B.
The Board reviewed the FAR for each executive for FY23 and the only
change made was to increase Olivia Barry’s FAR from $351,724 to $400,000
to reflect her appointment as Chief Operating Officer B2C & Corporate
Transport on 1 January 2023 and the additional responsibilities that role
entails. Changes to FAR are typically implemented and take effect on 1
July of each year. The FAR for each executive in FY23 is shown in table 3
on page 31.
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
to participate in the STI plan in FY23.
Were any changes
made in FY23?
What is the STI plan?
What is the format
for STI awards?
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.
What is the
performance
period?
What is the
maximum
opportunity?
The performance period for the FY23 STI award is from 1 July 2022 to 30
June 2023.
The STI maximum opportunity is set individually and based upon market
benchmarks for the remuneration mix. This figure when referenced to FAR
is 30% of FAR with the limited exception of the additional STI awarded to
Mr Bayliss in FY23.
27
27
A2B Australia Limited
and its Controlled Entities
What are the STI
performance
measures?
Annual Financial Report
Year Ended 30 June 2023
The FY23 STI award vests subject to the achievement of a Group-wide
financial performance measure (60%) and individual performance
measures (40%). 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.
1.
Individual performance measures (40% of STI)
Role
Performance
Executive Chair
• Property strategy delivery
•
• Employee
Strengthen investor relations
engagement and
positive
corporate culture
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 engagement and positive
•
•
•
corporate culture
Improve the A2B corporate product
offering
Fleet and fare growth
Improved
passengers
In-vehicle technology replacement
for drivers and
service
•
• Risk management/compliance
•
Improvement in working capital
2. Group-wide financial performance measure (60% of STI)
Earnings before interest, tax, depreciation, and amortisation excluding
acquisitions, divestments and impairments (‘Gateway Hurdle’).
If the Gateway Hurdle is met, 100% of this portion of STI will be paid.
If the 90% minimum threshold is not met, no incentive payment will be
made. Straight line vesting occurs between 90% and 100% of the Gateway
Hurdle.
Details regarding the STI outcomes for FY23, based on achievement of the
approved performance measures are set out in section 4 of the
Remuneration Report.
for
set
The Committee considers the Executive Chairman’s performance against
the year and provides a
the performance measures
recommendation of the STI to be paid (if any) to the Board for approval.
The Executive Chairman 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 in its absolute discretion.
28
How is performance
tested?
28
A2B Annual Report 2023
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
What happens on a
change of control
or other significant
events?
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 decides, 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.
Does the plan
provide for
clawback?
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.
What happens on
termination of
employment?
Where employment ends prior to the end of the performance period by
reason of resignation, fraudulent or dishonest conduct, or termination for
cause, 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.
Were any changes
made in FY23?
The FY23 STI incentive plan was adopted by the Board in the last quarter
of FY22 and implemented in FY23. The performance framework has been
chosen as it more closely aligns with the focus of the Executive team to
deliver improved business results and shareholder value. No changes to
the plans were made in FY23.
FY23 LTI Plan:
Details of the 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 for FY23.
What is the format
for LTI awards?
LTI awards are delivered in the form of rights which are granted for nil
consideration. LTI awards are granted annually. The quantum granted is
dependent on the individual performance outcomes for each KMP.
Unvested rights will remain on foot until 30 June 2026 (Sunset date) and will
vest when the respective vesting conditions (outlined below) are met during
the performance period.
Any Performance Rights which are unvested on 30 June 2026 will lapse. On
vesting, each right converts into one ordinary share.
What is the
performance
period?
The performance period for the FY23 LTI award commenced on 1 July 2022
and will end on 30 June 2026. Subject to the satisfaction of the relevant
performance measures, the allocated portion of the FY23 awards vest
immediately.
29
29
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
What is the
maximum
opportunity?
The maximum LTI opportunity is set individually and based upon market
benchmarks for the remuneration mix. This figure when compared to FAR is
70% of FAR.
What are the LTI
performance
measures?
Performance Rights will vest upon satisfaction of the following vesting
conditions:
-
-
-
First tranche: 1/3 of Performance Rights will vest on A2B achieving a
20 day volume-weighted average price (VWAP) of at least $1.70,
Second Tranche: 1/3 of Performance Rights will vest on A2B
achieving a 20 day VWAP of at least $2.00, and
Third Tranche: 1/3 of Performance Rights will vest on A2B achieving
a 20 day VWAP of at least $2.30.
These performance conditions have been chosen because they incentivise
management to achieve increases in the Company’s share price, thereby
aligning their interests with the creation of shareholder value. A 20-day
VWAP method has been chosen for assessing the achievement of these
performance conditions because
impact of daily
fluctuations in the Company’s share prices and ensures that vesting would
only occur where sustained increases in the Company’s share price are
achieved.
reduces the
it
Unvested rights will remain on foot until 30 June 2026 and will vest when the
respective vesting conditions are met. Any Performance Rights which are
unvested on 30 June 2026 will lapse (Sunset Date).
The target VWAP specified above will be reduced by the amount of any
dividend or return of capital paid per share paid prior to the Sunset Date.
Decisions regarding the level of performance achieved and the relevant
remuneration outcomes will be made by the Board, in its absolute
discretion, with the outcomes communicated to shareholders in the
Remuneration Report.
Where a change of control event occurs, the Board has the 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 and 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 the LTI awards in exceptional situations
where participants may be unfairly advantaged (or disadvantaged) by
external factors outside 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.
With respect to Mr Bayliss’ existing Performance Rights, on a change of
control, any unvested Performance Rights will vest.
30
What happens on a
change of control or
other significant
event?
30
A2B Annual Report 2023
A2B Australia Limited
and its Controlled Entities
Does the plan
provide for
clawback?
What happens on
termination of
employment?
Were any changes
made in FY23?
Annual Financial Report
Year Ended 30 June 2023
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.
With respect to Mr Bayliss, on his resignation of his role or termination of his
appointment agreement by A2B for cause, any unvested Performance
Rights currently granted will lapse.
Change to performance measures and period
The FY23 LTI incentive plan was adopted by the Board in the last quarter of
FY22 and implemented in FY23. The performance framework chosen aligns
with the metrics approved by shareholders at the EGM for the Performance
Rights granted to the Executive Chairman. Additionally, it more closely
aligns the focus of the Executive team to deliver improved business results
and shareholder value. No changes to the plans were made in FY23.
For the terms applicable to prior-year STI and LTI grants, please refer to our Remuneration Report for
the relevant year, which is available at https://www.a2baustralia.com/investor-center/reports/.
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
Mark Bayliss
Olivia Barry
Gary Becus
Ton van Hoof
Daniela Fontana
Contract term
Notice period1
Ongoing
Ongoing
Ongoing
Ongoing
Stepped down on 27 April 2023
6 months
6 months
6 months
6 months
3 months
FAR
720,296
400,000
351,724
451,724
575,000
1. The Board has the discretion to make payments to executive KMP in lieu of notice. No other termination payments are
provided for under any KMP contract.
31
31
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
4. Executive KMP remuneration outcomes for FY23
FAR
The fixed annual remuneration of executive KMP for FY23 is set out at table 3 on page 31.
STI performance and outcomes
The Executive Chairman assessed the performance of each executive KMP against their individual
FY23 STI performance measures with recommendations presented to the Committee. The Committee
also assessed the performance of the Executive Chairman 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. The Board determined that the financial performance was in line with the
minimum threshold for the Gateway Hurdle. The Board also agreed with the recommendations in
relation to the individual performance of each executive KMP and the applicable value payable.
The individual FY23 STI outcomes for each executive KMP, including percentages and values payable
are detailed in the table below.
Table 4: STI award outcomes
Executive
Mark Bayliss *
Olivia Barry
Gary Becus
Ton van Hoof
Maximum FY23 STI
opportunity
$
208,500
STI earned in FY23
$
208,500
120,000
105,000
135,000
120,000
80,000
108,000
% of
maximum
opportunity
achieved
100%
% of
maximum STI
opportunity
forfeited
0%
100%
76%
80%
0%
24%
20%
* The Board determined to issue an additional cash bonus to Mr Bayliss of $200,000 (above the maximum STI opportunity), to
reflect the outperformance achieved in FY23.
Long Term Incentive Plan approved in 2014
The Company’s shareholders approved an earlier LTI plan in November 2014. The sixth tranche of
Performance Rights under the LTI plan was granted for the performance periods 1 July 2019 – 30 June
2022. The rights were tested in September 2022 and did not vest and lapsed immediately as the
performance conditions attached to the rights, being an absolute TSR and an indexed TSR hurdle,
were not achieved. Further details are shown in table 7 on page 33.
Snapshot of Group performance
Table 5: Performance outcomes for the last five years
Profit (Loss) after tax from continuing
operations ($M)
Profit (Loss) attributable to owners of the
Company ($M)
Dividend paid ($M)
Dividend paid per share fully franked (cents)
Closing share price at 30 June ($)
Note: Opening share price in FY19 was $2.40
32
A2B Annual Report 2023
FY23
FY22
FY21
FY20
FY19
27.1
(27.8)
(18.1)
(23.7)
26.8
-
-
1.49
(28.1)
-
-
1.10
(18.3)
-
-
1.26
(23.8)
9.6
8
0.81
11.9
11.8
9.6
8
1.77
32
A2B Australia Limited
and its Controlled Entities
Executive remuneration in FY23
Annual Financial Report
Year Ended 30 June 2023
The statutory remuneration of each executive KMP in FY23 is set out in the table below.
Table 6: FY23 executive KMP remuneration (statutory)
Salary and
fees $
Non-cash
benefits2
$
Super
contributions
$
Termination
benefits
$
STI
$
Other long
term
employee
benefits3
$
Non-cash
Fair value
Performance
Rights4
$
Non-cash
Fair value
Incentive
Shares4
$
Performance
related rem
% of total
rem5
Total
$
350,570
120,000
13,850
25,292
Executives:
Mark Bayliss1
2023
695,000
408,500
Olivia Barry
2022
2023
2022
231,668
-
38,502
-
Gary Becus6
2023
326,432
80,000
Ton van Hoof
2023
426,432
108,000
2022
426,432
Former executives:
Daniela Fontana7 2023
90,066
-
-
-
-
21,612
17,624
3,431
25,292
25,292
30,069
2,962
3,234
-
-
-
-
-
-
-
-
-
-
-
-
304,553
607,377 2,037,042
64.82%
101,518
424,623
775,433
67.85%
1,285
18,682
642
-
8,200
12,277
10,972
59,036
14,051
80,015
-
-
-
-
-
529,679
26.18%
45,537
0.00%
455,435
20.26%
629,732
26.52%
550,567
14.53%
11,133
143,750
-
-
-
244,949
0.00%
Total
2023
1,888,500
716,500
17,084
108,621
143,750
20,457
394,548
607,377 3,896,837
44.10%
2022
696,602
-
2,962
51,124
-
14,693
181,533
424,623 1,371,537
44.20%
1. Of the total remuneration recognised in FY23, $911,910 relates to Performance Rights and Incentive Shares earned from prior periods.
2. Movements in accruals for annual leave and reportable fringe benefits are disclosed as non-cash benefits.
3. Other long-term employee benefits represent provisions for long service leave.
4. Amounts disclosed in the table above for remuneration relating to Performance Rights and Incentive Shares are non-cash benefits and represent fair
value calculations in accordance with AASB 2 Share-based Payment. Further details are set out in Note 34 to the consolidated financial statements.
Total cash remuneration is shown in Table 2 above.
5. This represents the percentage of the total remuneration that relates to performance.
6. 2023 relates to the period from 1 July 2022 (being the date of Mr Becus' appointment as KMP) to 30 June 2023.
7. 2023 relates to the period from 1 March 2023 to 27 April 2023 (being the period of Ms Fontana's tenure as KMP).
Incentive awards held by executive KMP
Details of all outstanding share-based incentive awards granted to executive KMP are set out in the
table below. The maximum possible total value of each grant is the number of instruments granted
multiplied by the market value of shares in the Company. The minimum possible total value of each
grant is nil.
Table 7: Incentive awards held by executive KMP
Executive
Mark Bayliss
Olivia Barry
Gary Becus
Ton van Hoof
Type of award
Incentive
shares1
Performance
Rights
Performance
Rights
Performance
Rights
Performance
Rights
Performance
Rights
Grant date
28 April 2022
28 April 2022
Performance
period
1 July 2022 -
30 June 2026
1 July 2022 -
30 June 2026
1 September
2022
1 July 2022 -
30 June 2026
1 September
2022
1 July 2022 -
30 June 2026
1 September
2022
1 July 2022 -
30 June 2026
26 April 2021
1 July 2020 -
30 June 2023
Number
granted
200,000
Performance
conditions
Service
Vesting
date
July 2023
1, 500,000
Share price
140,000
Share price
92,000
Share price
126,000
Share price
185,185
Absolute TSR
hurdle and
indexed TSR
June 2026
sunset date
June 2026
sunset date
June 2026
sunset date
June 2026
sunset date
September
2023
1. Mr Bayliss’ incentive shares vested on 1 July 2023.
33
33
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
5. Non-executive Director fee arrangements
Fees in FY23
During FY23, Non-Executive Director (NED) fees were paid out of an aggregate fee pool of $1.0
million. The fee pool is inclusive of statutory entitlements (including superannuation).
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.
In June 2022, the Board reviewed the NED fees for FY23 and implemented a 15% reduction to Non-
Executive Director Board and Committee fee arrangements.
The table below summarises NED fees payable in respect of FY23.
Table 8: Board and Committee fees
Board
Audit and Risk Committee
Remuneration and Nominations Committee
Chairman $
Member $
200,000
20,000
20,000
90,000
10,000
10,000
No fees were paid for the Board Chairman role in FY23 given that Mr Bayliss was Executive Chairman
during FY23 and separately remunerated as highlighted in this Remuneration Report.
The Board and committee fees outlined in the table above include statutory superannuation
contributions. NEDs do not receive retirement benefits other than statutory superannuation.
Fees in FY24
For FY24, the Board has decided to leave the Board and Committee fees unchanged.
Non-executive Director remuneration in FY23
The statutory remuneration of each NED for FY23 is set out in the table below.
Table 9: FY23 NED remuneration (statutory)
Executive
Brent Cubis1
Non-executive Director
Jennifer Horrigan2
Non-executive Director
Clifford Rosenberg3
Non-executive Director
David Grant
Non-executive Director
Total fees
2023
2023
2022
2023
2022
2023
2022
2023
2022
Short term benefits
Post-employment benefits
Salary and fees $
Superannuation benefits $
90,000
120,000
134,509
110,000
130,342
32,485
177,973
352,485
442,824
-
-
-
-
-
3,411
15,490
3,411
15,490
Total $
90,000
120,000
134,509
110,000
130,342
35,896
193,463
355,896
458,314
1. Mr Cubis' fees were invoiced and paid monthly to Cubes Advisory Pty Ltd.
2. Ms Horrigan's fees were invoiced and paid monthly to Scarp Consulting Pty Ltd as trustee for The MacDonald Horrigan
Family Trust.
3. Mr Rosenberg’s fees were invoiced and paid monthly to Rosenberg Trading Pty Ltd, a personal services company
nominated by him.
34
A2B Annual Report 2023
34
A2B Australia Limited
and its Controlled Entities
Annual Financial Report
Year Ended 30 June 2023
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 have three years from their appointment date to meet the expected level of share
ownership.
Executive KMP’s are granted Performance Rights which convert into shares on the achievement of
performance measures. As indicated on page 36, no rights were vested during FY23.
The relevant interests of each KMP (and their related parties) in the share capital of the Company for
FY23 are detailed in the table below.
Table 10: Shareholdings of KMP and their related parties
Balance 1 July 2022
Received as
remuneration
Net other change
Balance 30 June 2023
Direct
interest
Indirect
interest
Direct
interest
Indirect
interest
Direct
interest
Indirect
interest
Direct
interest
Indirect
interest
Non-executive
Director
Brent Cubis
Jennifer Horrigan1
Clifford Rosenberg2
-
-
-
-
-
111,307
David Grant
35,000
Executive
Mark Bayliss
Olivia Barry
Gary Becus
Ton van Hoof3
800,000
3,807
-
-
-
-
-
-
14,139
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
102,122
-
-
-
-
-
-
-
-
-
-
102,122
111,307
35,000
800,000
3,807
-
-
-
-
-
-
14,139
1. The indirect shares are 102,122 fully paid ordinary shares held by Macdonald Horrigan Family Holdings as trustee for Macdonald Horrigan
Family Superannuation Fund.
2. The indirect shares are 111,307 fully paid ordinary shares held by The Rosenberg Company Pty Ltd as trustee for The Rosenberg
Superannuation Fund.
3. The indirect shares are 14,139 fully paid ordinary shares held by MLC Wrap Super Series 2 Fund.
35
35
A2B Australia Limited
and its Controlled Entities
Rights
Annual Financial Report
Year Ended 30 June 2023
The table below details the rights and incentive shares granted to executive KMP as part of their
remuneration during FY23 and LTI rights from an earlier LTI plan (2014) which lapsed during FY23.
Table 11: Rights granted to executive KMP
Balance
1 July
2022
1,500,000
-
Number
of rights
granted
in FY23
-
Value of
rights
granted
in FY231
-
140,000
$85,867
-
92,000
$56,427
Mark Bayliss
Olivia Barry
Gary Becus
Ton van Hoof2
323,116
126,000
$77,280
Net other
change Vested
-
-
Value
of rights
vested
-
Lapsed
Balance
30 June
2023
- 1,500,000
-
-
-
-
-
-
-
-
-
-
140,000
92,000
- 137,931
311,185
1. The fair values of the Performance Rights granted are detailed in Note 34 to the consolidated financial statements.
2. Includes Performance Rights under the earlier LTI Plan approved in November 2014.
3. As at the end of the reporting period, no member of the KMP was holding any vested and exercisable or vested and
unexercisable rights.
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 2022 Remuneration Report
The Company received a “yes” vote on 95% of votes cast on its Remuneration Report for the 2022
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.
36
A2B Annual Report 2023
36
Auditor’s Independence Declaration
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 2023 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
KPM_INI_01
PAR_SIG_01 PA_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01
Yours faithfully
KPMG
Cameron Slapp
Partner
Sydney
22 August 2023
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used unde r license by the
independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legisl ation.
37
37
Consolidated Financial Statements
Table of Contents
Consolidated statement of comprehensive income ............................................................................. 40
Consolidated statement of financial position ......................................................................................... 41
Consolidated statement of cash flows .................................................................................................... 42
Consolidated statement of changes in equity ....................................................................................... 43
Notes to the consolidated financial statements ..................................................................................... 44
1. Reporting entity...................................................................................................................................... 44
2. Basis of preparation .............................................................................................................................. 44
3. Revenue and other income ................................................................................................................ 47
4. Finance income ..................................................................................................................................... 50
5. Direct mobility and payment related expenses.............................................................................. 51
6. Income tax expense ............................................................................................................................. 52
7. Trade and other receivables ............................................................................................................... 53
8. Inventories ............................................................................................................................................... 55
9. Assets held for sale ................................................................................................................................ 55
10. Property, plant and equipment ...................................................................................................... 55
11. Taxi plate licences ............................................................................................................................. 57
12. Goodwill ............................................................................................................................................... 60
13. Intellectual property .......................................................................................................................... 62
14. Net deferred tax assets ..................................................................................................................... 64
15. Financial assets ................................................................................................................................... 66
16. Trade and other payables ............................................................................................................... 66
17. Loans and borrowings ....................................................................................................................... 66
18. Provisions .............................................................................................................................................. 67
19. Share capital and Reserves ............................................................................................................. 69
20. Dividends ............................................................................................................................................. 70
21. Earnings per share .............................................................................................................................. 71
22. Dividend franking balance .............................................................................................................. 71
23. Parent entity disclosures ................................................................................................................... 72
24. Deed of Cross Guarantee ................................................................................................................ 72
25. Related Party and Key Management Personnel disclosures .................................................... 75
26. Remuneration of auditors ................................................................................................................. 75
27. Particulars relating to controlled entities ....................................................................................... 76
28. Capital expenditure commitments ................................................................................................ 77
38
A2B Annual Report 2023
38
29. Contingencies .................................................................................................................................... 77
30. Right of use assets and lease liabilities ........................................................................................... 77
31. Notes to the consolidated statement of cash flows ................................................................... 79
32. Financial instruments and financial risk management ............................................................... 81
33. Operating segment ........................................................................................................................... 85
34. Share-based payment – Long term incentive ............................................................................. 88
35. Subsequent events ............................................................................................................................ 89
Directors’ Declaration............................................................................................................................... 90
Independent Auditor’s Report….…………………………………………………………………………………..91
39
39
Consolidated statement of comprehensive income
For the year ended 30 June 2023
Revenue
Other income
Direct mobility and payment related expenses
Employee benefits expenses
Advertising and marketing expenses
Technology and communications expenses
Depreciation and amortisation expenses
Impairment charges
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance costs
Profit/(Loss) before income tax
Income tax (expense) / benefit
Profit/(Loss) for the period
Notes
3
3
5
10, 12, 13
4
6
2023
$'000
147,251
23,194
170,445
2022*
$'000
126,138
2,637
128,775
(31,742)
(36,020)
(66,729)
(61,128)
(11,221)
(2,746)
(11,288)
(12,235)
(10,999)
(16,177)
- (10,249)
(19,869)
(15,555)
(38,500)
31,762
4
34
(1,222)
(3,538)
(1,218)
(3,504)
(39,718)
28,258
11,900
(1,195)
(27,818)
27,063
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences, net of tax
Other comprehensive income/(loss) for the period, net of income tax
Total comprehensive income/(loss) for the period
Attributable to:
Owners of the Company
Non-controlling interest
Total profit/(loss) for the period
Owners of the Company
Non-controlling interest
Total comprehensive income/(loss) for the period
Earnings per share
Total attributable to owners of the Company:
Basic earnings per share
Diluted earnings per share
88
88
27,151
(76)
(76)
(27,894)
26,792
271
27,063
(28,118)
300
(27,818)
26,880
271
27,151
(28,194)
300
(27,894)
21
21
22.1 cents
21.4 cents
(23.3 cents)
(23.3 cents)
* The comparative information has been re-stated and certain operating expenses have been reclassified to better reflect
the nature of the expenses. Refer to Note 2.
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the consolidated
financial statements.
40
A2B Annual Report 2023
40
Consolidated statement of financial position
As at 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Taxi plate licences
Goodwill
Intellectual property
Right-of-use assets
Net deferred tax assets
Financial assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Loans and borrowings
Lease liabilities
Current tax liabilities
Deferred income
Provisions
Total current liabilities
Non-current liabilities
Loans and borrowings
Lease liabilities
Deferred income
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Profits reserve
Retained losses
Total equity attributable to equity holders of the Company
Non-controlling interest
Total equity
Notes
2023
$'000
2022
$'000
31
7
8
9
7
10
11
12
13
30
14
15
16
17
30
18
17
30
18
19
19
19
29,541
45,762
3,157
3,490
10,438
92,388
12,295
60,254
3,667
3,322
-
79,538
5,598
16,730
1,341
27,487
13,468
4,123
22,740
963
92,450
184,838
5,303
23,673
1,349
27,487
12,722
6,517
20,507
977
98,535
178,073
38,193
602
1,195
3,096
118
7,580
50,784
55,880
1,649
1,556
310
118
8,112
67,625
15,000
3,453
118
1,257
19,828
70,612
114,226
17,274
5,530
236
1,268
24,308
91,933
86,140
138,325
3,230
45,615
(74,428)
112,742
1,484
114,226
138,325
2,016
18,823
(74,428)
84,736
1,404
86,140
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated financial
statements.
41
41
Consolidated statement of cash flows
For the year ended 30 June 2023
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) / received
Net cash provided by / (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Payments for development of intellectual property
Proceeds from sale of property
Proceeds from sale of plant and equipment
Government compensation for cancelling tradeable value
of Taxi licences
Net cash provided by / (used in) investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Payment of lease liabilities
Dividends paid to non-controlling interest in subsidiaries
Net cash (used in) / provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Effect of movements in exchange rate on cash held
Cash and cash equivalents at 30 June
Notes
2023
$'000
2022
$'000
1,023,208
(1,010,961)
-
32
(1,728)
(178)
10,373
733,673
(744,600)
167
1
(1,014)
5,529
(6,244)
(5,606)
(4,540)
19,000
1,322
(4,044)
(4,731)
-
449
1,630
11,806
-
(8,326)
5,000
(8,321)
(1,489)
(191)
(5,001)
17,178
12,295
68
29,541
17,347
(288)
(2,021)
(83)
14,955
385
11,874
36
12,295
31
31
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial statements.
42
A2B Annual Report 2023
42
Consolidated statement of changes in equity
For the year ended 30 June 2023
Balance at 1 July 2022
Total comprehensive income/(loss) for the
period:
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Transactions with owners in their capacity
as owners:
Transfer to profits reserve
Share-based payments
Dividends to non-controlling interest in
subsidiaries
34
Balance at 1 July 2021
Total comprehensive income/(loss) for the
period:
(Loss)/profit for the period
Other comprehensive (loss)
Total comprehensive (loss)/income for the
period
Transactions with owners in their capacity
as owners:
Share-based payments
Dividends to non-controlling interest in
subsidiaries
34
-
-
-
-
-
-
-
-
-
-
-
-
-
Notes
Share
capital
$'000
138,325
Other
reserves
$'000
Profit
reserves
$'000
Retained
losses
$'000
Non-
controlling
interest
$'000
2,016
18,823
(74,428)
1,404
Total
equity
$'000
86,140
27,063
88
27,151
-
1,126
(191)
935
114,226
-
88
88
26,792
-
26,792
-
-
-
26,792
(26,792)
1,126
-
-
1,126
3,230
26,792
(26,792)
45,615
(74,428)
271
-
271
-
-
(191)
(191)
1,484
-
(76)
(76)
1,133
-
1,133
2,016
-
-
-
-
-
-
(28,118)
300
(27,818)
-
-
(76)
(28,118)
300
(27,894)
-
-
-
-
1,133
(83)
(83)
(83)
1,050
18,823
(74,428)
1,404
86,140
Balance at 30 June 2023
138,325
138,325
959
18,823
(46,310)
1,187
112,984
Balance at 30 June 2022
138,325
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated financial
statements.
43
43
Notes to the consolidated financial statements
For the year ended 30 June 2023
1. Reporting entity
A2B Australia Limited (the Company) is a company domiciled in Australia. The address of the
Company's registered office is 9-13 O’Riordan Street, Alexandria. The Consolidated Financial
Statements as at and for the year ended 30 June 2023 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
2023 was involved in providing technology, booking, dispatch, 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 adopted by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001. The Consolidated Financial
statements comply with International Financial Reporting Standards (IFRS) adopted by the
International Accounting Standards Board (IASB).
The Consolidated Financial Statements were authorised for issue by the Board of Directors on 22
August 2023.
Going concern
The financial report has been prepared on a going concern basis. During FY23, the Company returned
to profitability, delivered on its ‘Better Before Bigger” turnaround strategy and returned to a net cash
position at 30 June 2023. The momentum gained in FY23 continued in the early months of FY24 and
management is confident that budget targets for FY24 showing revenue and earnings growth are
achievable with the Company experiencing continued profitable growth.
As of 30 June 2023, the Group had access to $29.5 million in liquidity and reported a net cash position
of $13.9 million. This is an improvement of $20.5 million compared with last year. At 30 June 2023, the
Group had access to a working capital facility of $15 million expiring in September 2024. This facility
has been renegotiated in August 2023 and extended to September 2026.
Management has prepared cash flow forecast scenarios based on A2B’s new strategic plan. The
business is expected to continue improving its cash flow position through sustainable growth,
supported by its recently implemented strategy and cost control initiatives. These cash flow forecasts
demonstrate that the Group has sufficient cash and credit facilities to enable the Group to meet its
obligations as they fall due.
Therefore, 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 12 months from the date of which the financial report
is authorised for issue.
Interests in land and buildings
A2B’s interests in land and buildings, excluding the properties held for sale, are accounted for under
Property, Plant and Equipment and are measured at cost less accumulated depreciation and
impairment losses. The book value of A2B’s interest in land and buildings, relating to one property
located in Melbourne, was $2.2 million as at 30 June 2023. Please refer to Note 10 for further
information.
44
A2B Annual Report 2023
44
During FY23 the Company entered into contracts to sell both of its properties located in Alexandria,
Sydney. The property at 9-13 Bourke Road settled on 29 May 2023 and the property located at 9-13
O’Riordan Street is expected to settle in December 2023. Refer to Note 9 for further information
concerning assets held for sale.
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.
Functional and presentation currency
These Consolidated Financial Statements are presented in Australian dollars, which is the Company's
functional currency and the functional currency for 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 7 Trade and other receivables
Note 10 Property, plant and equipment
Note 11 Taxi plate licences
Note 12 Goodwill
Note 13 Intellectual property
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.
45
45
Change in classification
During the year ended 30 June 2023, the Group updated the classification of certain operating
expenses to better reflect the nature of these expenses.
Comparative amounts in the consolidated statement of comprehensive income were re-stated as
follows:
Restated financial statement disclosure
Direct mobility and payment related
expenses
Payment processing costs
School taxi and bus route services cost
Other Taxi related costs
June 2022
$'000
(1,407)
(7,729)
(1,446)
(10,582)
Previous financial statement
disclosure
Other expenses
June 2022
$'000
Other expenses
(10,582)
(10,582)
Refer to Note 5 for further details of direct mobility and payment related expenses.
New accounting standards
(a) New and amended accounting standards adopted by the Group
During the year, the Group has applied a number of new and revised accounting standards issued
by the Australian Accounting Standards Board (AASB) that are mandatorily effective for an
accounting period that begins on or after 1 July 2022, as follows:
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and
Other Amendments, including:
▪ Amendments to AASB 137 – Onerous Contracts – Cost of Fulfilling a Contract.
▪ Amendments to AASB 116 – Property, Plant and Equipment: Proceeds before Intended Use.
▪ Reference to the Conceptual Framework (Amendments to AASB 3).
Based on AASB 137 Provisions, Contingent Liabilities and Contingent Assets, the full cost approach was
utilised and hence there was no impact on measurement of onerous contracts.
None of the above new and amended accounting standards have had a significant impact on the
Group’s consolidated financial statements.
(b) New accounting standards and interpretations not yet adopted
The following standards, amendments to standards and interpretations are relevant to current
operations. They are available for early adoption but have not been applied by the Group in this
Financial Report.
▪ AASB 2020-1 and 2020-6 Classification of liabilities as current or non-current.
▪ AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies
and Definition of Accounting Estimates.
▪ AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets
and Liabilities arising from a Single Transaction.
▪ AASB 17 Insurance Contracts.
▪ AASB 2020-5 Amendments to Australian Accounting Standards – Insurance Contracts.
▪ AASB 2022-1 Amendments to Australian Accounting Standards – Initial Application of AASB 17 and
AASB 9 Comparative Information.
▪ AASB 2022-5 Amendments to AASB 16 Leases – Lease Liability in a Sale and Leaseback.
46
46
A2B Annual Report 2023
▪ AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture.
▪ AASB 2022-7 Editorial Corrections to Australian Accounting Standards and Repeal of Superseded
and Redundant Standards.
▪ AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with
Covenants.
▪ AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements.
▪ AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar
Two Model Rules.
AASB 17 Insurance Contracts (AASB 17) will be first applicable to the Group for the financial year
commencing 1 July 2023 and must be applied retrospectively. Insurance contracts are defined as
contracts ‘under which one party (the issuer) accepts significant insurance risk from another party (the
policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the
insured event) adversely affects the policyholder’. AASB 17 establishes the principles for the
recognition, measurement, presentation and disclosure of insurance contracts.
Management is in the process of determining the impact and no material items have been identified
to date.
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:
Payment processing revenue
Payment processing revenue is derived from payments processed through the A2B Payment System
and is disclosed net of Goods and Services Tax (GST) and third party credit card fees. Payments
processed through the A2B taxi payment system relate to the total transaction value processed. 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 payments
processed. Payment processing revenue is recognised at the point in time when the payment is
processed.
Network subscription and Taxi plate licence income
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.
Other Taxi related services income
Other Taxi related services income is generated from the fit-out of vehicles as Taxis, and 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 on a straight-line basis over the time when services are rendered, whichever is applicable.
47
47
Courier service income
Courier service income was generated from providing courier dispatch services to Customers, of
which revenue is recognised at the point in time when services are rendered. Revenue was also
generated from subscriptions by courier agents, which was recognised over the period when the
services are rendered. This business was sold in August 2022.
Insurance commission revenue
Insurance commission revenue comprised of brokerage fees received from referrals to insurance
products. Revenue is recognised at the point in time when the referral has been fully rendered.
Hardware sales income
Sales of hardware are recognised at the 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 relate to the 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 taxi and bus route services revenue
School taxi and bus route services revenue is based on contracts for these services with Government
departments. It is billed 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 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.
48
A2B Annual Report 2023
48
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.
Revenues
Revenue from contracts with customers
Payment processing revenue
Network subscription income
Brokered Taxi plate licence income
Owned Taxi plate licence income
Other Taxi related services income
Taxi operating income
Courier service revenue
Insurance commission revenue
Car and hardware sales income
School taxi and bus route services revenue
Taxi Subsidy Scheme revenue
Software consulting and licence income
Other
Total revenue from contracts with customers
Other revenue
Interest on finance lease receivables and others
Taxi equipment and terminal rental income
Total other revenue
Total revenue
2023
$'000
2022
$'000
35,350
54,234
4,608
461
1,895
6,718
315
1,094
8,626
11,052
3,620
5,442
4,684
138,099
25,707
42,408
2,487
125
1,747
9,483
3,149
917
5,711
6,382
3,986
5,291
11,849
119,242
1,210
7,942
9,152
147,251
1610
5,286
6,896
126,138
For more information about receivables and contract liabilities from contracts with customers, refer to
Notes 7 and 16, respectively.
No information is provided about remaining performance obligations at 30 June 2023 or at 30 June
2022 that have an original expected duration of one year or less, as allowed by AASB 15.
Other income
Non-operating activities
Government grants
Gain on disposal of property, plant and equipment
Net gain on property transactions
NSW taxi plate licence compensation - impairment reversal
Total other income
2023
$'000
2022
$'000
215
83
21,274
1,622
23,194
2,496
141
-
-
2,637
49
49
Government grants
In FY23 the Group recognised $215,000 (FY22 $2,378,000) income from Government grants. There were
no new Government grants available to the Group in FY23.
Net gain on property transactions
Included in the gain on disposal of property, plant and equipment is the net gain from the sale of the
Bourke Road, Alexandria property in May 2023 and the net gain from a land swap.
NSW taxi plate licence compensation – impairment reversal
The Company has recognised as other income the reversal of the impairment resulting from
compensation received from the NSW Government to compensate owners of NSW taxi plate licences
following legislative changes in FY23.
Total turnover
Total turnover in FY23 was $1,002 million (FY22 $733 million) and 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.
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
Interest income
Total finance income
2023
$'000
2022
$'000
34
34
4
4
50
A2B Annual Report 2023
50
5. Direct mobility and payment related expenses
Direct mobility and payment related expenses
Payment processing costs
Brokered Taxi plate licence costs
Taxi operating expenses
School taxi and bus route services cost
Courier service expenses
Cost of cars and hardware sold
Other Taxi related costs
2023
$'000
2022
$'000
(6,982)
(4,198)
(2,769)
(9,028)
(191)
(7,756)
(5,096)
(36,020)
(5,098)
(2,059)
(5,333)
(5,090)
(1,979)
(5,507)
(6,676)
(31,742)
Payment processing costs
Payment processing costs are fees paid to Taxi Networks and Drivers relating to payments processed
through the A2B Payment System.
Brokered taxi license plate costs
Brokered taxi license plate costs consist of taxi licence plate fees paid to Taxi licence owners and
Government.
Taxi operating expenses
Taxi operating expenses are all running expenses related to operating A2B’s owned fleet of taxis. This
fleet makes up a small proportion (<5%) of all vehicles affiliated with A2B’s network.
School taxi and bus route services cost
School taxi and bus route services costs are those expenses incurred in providing transport services
contracted with Government departments.
Courier service expenses
Courier service expenses are all expenses incurred by the Group related to the provision of courier
dispatch services. This business was sold in August 2022.
Cost of cars and hardware sold
The cost of cars and hardware sold represents the cost of goods sold, the cost of acquiring cars and
hardware that the Group sells.
Other Taxi related costs
Other Taxi related costs include all costs related to fitting out of vehicles as Taxis.
51
51
6. Income tax expense
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 (benefit)
Current year
Capital losses utilised
Adjustment for prior years
Deferred tax expense
Origination and reversal of temporary differences
Utilisation of previously unbooked tax losses
Origination and reversal of temporary differences
Total income tax expense (benefit)
Numeric reconciliation between tax expense and pre-tax profit
Profit / (loss) before tax from continuing operations
Prima-facie income tax using the corporate tax rate of 30%
Effect of tax rates in foreign jurisdiction
Add tax effect of:
Non-deductible depreciation
Other non-deductible items
Less tax effect of:
Rebatable fully franked dividends
Capital losses utilised
Origination and reversal of temporary differences
Recognition of previously unbooked tax losses
Adjustment for prior years - tax payable
Income tax expense / (benefit)
Effective tax rate on pre-tax profit
2023
$'000
2022
$'000
7,592
(6,597)
(13,002)
-
- 34
(12,968)
995
976
1,296
- (228)
(776)
1,195
-
(11,900)
2023
$'000
2022
$'000
28,258
8,477
(186)
(39,718)
(11,915)
(117)
281
102
305
60
(39)
-
-
(106)
(6,597)
(776)
- (228)
- 34
(11,900)
1,195
30.0%
4.2%
52
A2B Annual Report 2023
52
Amounts recognised in other comprehensive income
2023
Tax (expense)
Benefit
$'000
Before tax
$'000
2022
Tax (expense)
Net of tax
$'000
Before tax
$'000
Benefit Net of tax
$'000
$'000
Items which may be
reclassified subsequently
to profit or loss:
Foreign exchange
translation differences
(88) - (88) 76 - 76
(88) - (88) 76 - 76
7. 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 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
The Group has specifically assessed the circumstances of individual customers in the current
environment. A specific doubtful debt provision accounts for most of the Group's allowance for
impairment as at 30 June 2023.
In addition, 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 collective
loss allowance is determined based on the historical default rate.
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.
53
53
Current
Trade receivables
Accumulated impairment losses
Finance lease receivables
Other receivables
Non-current
Finance lease receivables
Movement in allowance for impairment
Opening balance
Net remeasurement in allowance for impairment
Amount written off as uncollectable
Closing balance
Ageing of trade receivables
2023
$'000
2022
$'000
37,184
(3,551)
3,907
8,222
45,762
55,216
(6,937)
3,356
8,619
60,254
5,598
5,598
5,303
5,303
(6,937)
(235)
3,621
(3,551)
(7,366)
(1,973)
2,402
(6,937)
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due over 90 days
Gross
$'000
30,446
1,359
251
304
4,824
37,184
2023
Impairment
$'000
(187)
(42)
(84)
(73)
(3,165)
(3,551)
Net
$'000
30,259
1,317
167
231
1,659
33,633
Gross
$'000
44,056
3,162
739
354
6,905
55,216
2022
Impairment
$'000
(411)
(352)
(489)
(293)
(5,392)
(6,937)
Net
$'000
43,645
2,810
250
61
1,513
48,279
The Group’s credit risk management policies are outlined in Note 32. There have been no changes to
the credit risk management policies during the year.
Finance lease receivables
2023
2022
Future
minimum
lease
payments
$'000
4,713
6,326
11,039
Interest
$'000
806
728
1,534
Present
value of
minimum
lease
payments
$'000
3,907
5,598
9,505
Future
minimum
lease
payments
$'000
4,080
5,849
9,929
Present
value of
minimum
lease
payments
$'000
3,356
5,303
8,659
Interest
$'000
724
546
1,270
Less than one year
Between one and five years
There have been no unguaranteed residual values. No lease payments are considered uncollectable
at the reporting date.
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.
54
A2B Annual Report 2023
54
8. 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 in transit
Parts, safety cameras and sundries - at cost
2023
$'000
709
2,448
3,157
2022
$'000
769
2,898
3,667
In 2023, inventories of $9,708,000 (2022: $7,826,000) were recognised as an expense during the year
and included in “cost of cars and hardware sold” and “other taxi related costs”.
9. Assets held for sale
Non-current assets are classified as held for sale if it is highly probable that they will be recovered
primarily through sale rather than through continuing use. Such assets are generally measured at the
lower of their carrying amount and fair value less costs to sell.
Once classified as held for sale, property, plant and equipment is no longer depreciated.
On 29 May 2023, settlement took place on the sale of the Company’s property at 9-13 Bourke Road,
Alexandria for $19.0 million. The net gain from the sale of this property is reflected in ‘Other Income’
in the Consolidated Statement of Comprehensive Income, refer to Note 3.
On 30 March 2023. the Group exchanged contracts for the sale of its property at 9-13 O’Riordan Street,
Alexandria for $78 million. Settlement is expected in December 2023. Accordingly, the Group’s
interest in the O’Riordan Street property has been classified as an asset held for sale.
The sale prices for both Alexandria properties are in line with the independent valuation for the
property undertaken by a registered qualified valuer in May 2022.
Property, plant and equipment at cost
Accumulated depreciation
2023
$'000
2022
$'000
14,945
(4,507)
10,438
-
-
-
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.
55
55
The estimated useful lives of each major class of asset for the current and comparative periods are:
▪ Buildings
▪
▪
▪ EFTPOS Equipment
Leasehold improvements
Furniture, fittings, plant and equipment
40 to 50 years
10 years
3 to 8 years
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.
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.
Impairment testing
The property, plant and equipment is allocated to the two groups of Cash Generating Units (CGU)
according to business operation and assessed for impairment based on the methodology described
in Note 12.
If the recoverable amount of specific property, plant and equipment is identified to be less than its
carrying value, an impairment charge is recognised in the profit or loss and the carrying value of the
asset is 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.
Independent valuations of interests in land and buildings
In monitoring market values for the Group's interest in land and buildings the directors have relied upon
independent valuations from registered qualified valuers.
Amounts disclosed below represent the fair value of the Group's interest in land and buildings that
were not held for sale at 30 June 2023, as determined at the time of the most recent independent
valuation report. Independent registered qualified valuers are engaged to perform the valuations.
The values are determined based on the highest and best use of the property.
The fair value disclosure has been categorised as a Level 3 fair value based on certain unobservable
inputs to the valuation techniques used. The valuers have used either a capitalisation of net income
approach or a direct comparison approach to determine the fair value. The significant inputs to the
capitalisation of net income approach included the forecast net income, adopted capitalisation rate
and the discount rate. The significant inputs to the direct comparison approach included the land
value range per square metre and the estimated demolition costs.
The fair values determined by the independent registered qualified valuers are sensitive to changes
in these significant inputs, amongst others. However, overall the fair value of the Group's interest in
land and buildings is significantly higher than the book value of these interests.
The above market valuations do not consider the potential impact of capital gains tax.
Following the completion of A2B’s property portfolio review, the Board decided in July 2023 to also
market its remaining Melbourne property. Further detail can be found in Note 35, Subsequent Events.
56
A2B Annual Report 2023
56
Furniture,
fittings,
plant &
equipment
$'000
Land &
buildings
$'000
Eftpos
equipment
$'000
Total
$'000
15,976
5,247
(1,641)
(13,584)
5,998
78,925
4,622
(3,184)
(1,361)
79,002
135,898
40,997
10,876
1,007
- (4,825)
- (14,945)
127,004
42,004
(5,976)
(580)
751
4,254
(1,551)
(67,111)
(4,169)
2,444
253
(68,583)
(112,225)
(39,138)
(1,002)
(5,751)
- 3,195
- 4,507
(110,274)
(40,140)
10,000
4,447
11,814
10,419
1,859
1,864
23,673
16,730
16,292
262
(578)
78,045
3,640
(2,265)
- (495)
78,925
15,976
138,905
44,568
4,044
142
(3,713)
(6,556)
- (495)
135,898
40,997
(62,379)
(5,636)
(6,359)
(610)
270
1,483
- 144
(67,111)
(5,976)
(105,916)
(37,901)
(8,779)
(1,810)
573
2,326
- 144
(112,225)
(39,138)
10,656
10,000
15,666
11,814
6,667
1,859
32,989
23,673
2023 year:
Cost
Opening balance
Additions
Disposals
Assets held for sale
Closing balance
Accumulated depreciation
Opening balance
Depreciation expense
Disposals
Assets held for sale
Closing balance
Net book value
Opening balance
Closing balance
2022 year:
Cost
Opening balance
Additions
Impairment
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation expense
Impairment
Disposals
Closing balance
Net book value
Opening balance
Closing balance
11. Taxi plate licences
Taxi and other licences acquired separately are reported at cost less accumulated amortisation and
impairment losses. These assets are tested for impairment in accordance with the accounting policy.
Taxi plate licences which have indefinite useful lives are tested for impairment in accordance with the
policy below.
Taxi plate licences with 10 or 50 year lives are amortised over their respective useful life. These taxi
plate licences with a finite life are tested for impairment wherever there is any indication that the asset
may be impaired.
57
57
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 is estimated to be less than its carrying amount, the carrying
amount of the asset 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 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 in prior years. A reversal of an impairment loss is recognised immediately in
profit or loss.
During FY23, the NSW Government announced a compensation scheme for owners of NSW taxi plate
licences. The Company has previously impaired the value of NSW taxi licences. Following the
compensation announcement, a reversal of prior year impairment losses totalling $1,630,000 has been
recognised for those licences that the Company has received compensation for as at 30 June 2023.
A corresponding disposal of the NSW taxi plate licences has also been recognised in FY23 to reflect
the compensation received. Total compensation received by the Group was $1,630,000 with a net
gain of $1,622,000 recognised in FY23. The net gain is reported in Other Income, refer to Note 3.
58
A2B Annual Report 2023
58
Composition and movement
2023 year:
Cost
Opening balance
Additions
Impairment reversal
Disposals
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
2022 year:
Cost
Opening balance
Additions
Disposals
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
Indefinite life
Finite life
50 year
renewable
$'000
$'000
10 year
$'000
Total
$'000
1,311
-
1,630
(1,637)
1,304
2,195
-
-
(1)
2,194
3,356
- -
6,862
1,630
- (1,638)
6,854
3,356
- (2,194)
-
-
- (2,194)
-
-
(5,513)
(3,319)
- -
- -
(3,319)
(5,513)
1,311
1,304
1
37
- 37
1,349
1,341
1,311
-
-
1,311
2,195
-
-
2,195
- (2,194)
-
-
- (2,194)
-
-
6,862
3,356
- -
- -
3,356
6,862
(5,513)
(3,319)
- -
- -
(3,319)
(5,513)
1,311
1,311
1
1
37
37
1,349
1,349
59
59
Impairment considerations
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 no impairment charge was
required (FY22 $Nil). To determine value-in-use, 5 scenarios of free cash flows have been prepared
based on estimated Taxi plate licence income for the forthcoming year plus annual growth of
between -20% to 5% for years 2 to 5 based on expected market conditions with weights of between
10% to 30% (FY22 between -20% to 5% for years 2 to 5 with weights of between 10% to 30%) and a long
term growth rate of between -20% to 0% after 5 years (FY22 -20% to 0%). A post-tax discount rate of
12.5% (FY22 12.4%) was applied in determining the 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. An increase of 497 basis points
in the post-tax discount rate would be required before an impairment of more than $10,000 is incurred.
12. Goodwill
Goodwill arising on the acquisition of a subsidiary is included in intangible assets. 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.
The two groups of cash generating units are B2C and B2B. There have been no changes to the CGUs
during the year.
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 CGUs 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.
The impairment tests of the goodwill allocated to each CGU as per 30 June 2023 was based on base
case scenario for the period FY24-FY28. The base case scenario was prepared based on a forecast
EBITDA for the forthcoming year. For the base scenario, the assumed annual growth from FY24 - FY28
is 14.5% for B2C CGU and 14.6% for B2B CGU. The long-term terminal growth rate is 2.1% for both CGU’s.
A post-tax discount rate of 12.5% (FY22 12.4%) was applied in determining the 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.
60
A2B Annual Report 2023
60
The valuation of the B2C CGU assumes growth driven by an increased fleet and associated revenue.
The recoverable amount of the B2C CGU currently exceeds its carrying value in the base case model
by $94.8 million. This is based on a compound annual growth rate of 14.5% for EBITDA over the period
from FY24 to FY28 terminal year.
The valuation of the B2B CGU assumes growth driven by an increase in fares processed and associated
revenue. The recoverable amount of the B2B CGU currently exceeds its carrying value in the base
case model by $31.2 million. This is based on a compound annual growth rate of 14.6% for EBITDA over
the period from FY24 to FY28 terminal year.
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 B2C
and B2B CGUs becoming equal to the recoverable amount.
For B2C, individual changes in key assumptions used in the base case model that would result in nil
headroom would be a decrease to -10.0% in FY24-FY28 compound annual EBITDA growth rate, and
an increase to 31.9% in the post-tax discount rate.
For B2B, individual changes in key assumptions used in the base case model that would result in nil
headroom would be a decrease to -0.1% in FY24-FY28 compound annual EBITDA growth rate, and an
increase to 23.5% in the post-tax discount rate.
B2C
B2B
2023 year:
Cost
Opening balance
Additions through acquisition
Impairment loss
Closing balance
2022 year:
Cost
Opening balance
Additions through acquisition
Impairment loss
Closing balance
Goodwill allocated
Impairment loss
2023
$'000
22,954
4,533
27,487
2022
$'000
22,954
4,533
27,487
2023
$'000
-
-
-
B2C
$'000
B2B
$'000
2022
$'000
-
-
-
Total
$'000
22,954
4,533
- - -
- - -
4,533
22,954
27,487
27,487
22,954
-
-
22,954
4,533
4,533
27,487
-
-
27,487
61
61
13. 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.
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Group with the right to access the cloud
provider’s application software over the contract period. As such the Group does not receive a
software intangible asset at the contract commencement date.
The following table outlines the accounting treatment of costs incurred in relation to SaaS
arrangements:
Recognise as an operating expense over the
term of the service contract
Recognise as an operating expense as the
service is received
• Fee for use of application software
• Customisation costs
• Configuration costs
• Data conversion and migration costs
• Testing costs
• Training costs
Costs incurred for the development of software code that enhances or modifies, or creates additional
capability to, existing on-premise systems and meets the definition of and recognition criteria for an
intangible asset are recognised as intangible software assets.
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
(Internally developed applications) 4 to 8 years
62
A2B Annual Report 2023
62
Amortisation methods, useful lives and residual values are reviewed at each reporting date and
adjusted if appropriate.
Impairment testing
The intellectual property is allocated to the two groups of Cash Generating Units (CGU) according to
business operation and assessed for impairment based on the methodology described in Note 12.
Intangible assets with indefinite useful lives and capitalised development costs (under development)
are tested for impairment annually, and whenever there is any indication that the asset may be
impaired.
Intangible assets with finite useful lives and capitalised development costs (internally developed) are
tested for impairment whenever there is any indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and the 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 CGU) is estimated to be less than its carrying amount, the
carrying amount of the asset (CGU) 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 (CGU) 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 (CGU) in prior years. A reversal of an impairment loss is recognised
immediately in profit or loss.
63
63
Indefinite life
Finite life
Trademarks Brands
$'000
$'000
Customer
contracts
$'000
Software
$'000
Capitalised
development costs
Under
development
$'000
Internally
developed
$'000
Total
$'000
2023 year:
Cost
Opening balance
Additions - internally
developed
Disposals
Transfer
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
2022 year:
Cost
Opening balance
Additions - internally
developed
Impairment
Transfer
Closing balance
Accumulated depreciation
Opening balance
Amortisation expense
Impairment
Closing balance
Net book value
Opening balance
Closing balance
944
759
5,684
2,700
40,425
1,426
51,938
-
-
-
944
-
-
-
759
-
-
-
5,684
-
-
-
2,700
-
-
-
40,425
4,564
-
-
5,990
4,564
-
-
56,502
-
-
-
-
(759)
-
-
(759)
(4,832)
(398)
-
(5,230)
(1,935)
(540)
-
(2,475)
(31,690)
(2,880)
-
(34,570)
- (39,216)
(3,818)
-
-
-
- (43,034)
944
944
-
-
852
454
765
225
8,735
5,855
1,426
5,990
12,722
13,468
944
759
5,684
2,700
44,503
2,551
57,141
-
-
-
944
-
-
-
759
-
-
-
5,684
-
-
-
2,700
-
(7,727)
3,649
40,425
4,731
(2,207)
(3,649)
1,426
4,731
(9,934)
-
51,938
-
-
-
-
(759)
-
-
(759)
(4,334)
(498)
-
(4,832)
(1,415)
(520)
-
(1,935)
(31,219)
(4,386)
3,915
(31,690)
- (37,727)
(5,404)
-
-
3,915
- (39,216)
944
944
-
-
1,350
852
1,285
765
13,284
8,735
2,551
1,426
19,414
12,722
14. Net deferred tax assets
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 in 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
64
64
A2B Annual Report 2023
▪
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 and tax losses 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. Unrecognised capital losses at 30 June
2023 are $Nil (FY22 $6,154,712 gross).
Recognised deferred tax assets and liabilities and the movements in these balances are set out below:
2023 year:
Accumulated impairment losses - receivables
Financial assets (unlisted investment)
Employee entitlements
Accruals
Tax losses
Disposal of property
Prepayments
Intellectual property
Other taxable temporary differences
2022 year:
Accumulated impairment losses - receivables
Financial assets (unlisted investment)
Employee entitlements
Accruals
Tax losses
Prepayments
Intellectual property
Other taxable temporary differences
Opening
balance
$'000
Charged to
income
$'000
Closing
balance
$'000
(1,046)
2,057
(4)
286
548
2,926
81
519
17,121
(17,121)
- 19,554
1,011
282
3,474
600
-
19,554
(524)
(538)
(273)
251
- (538)
(1,340)
20,507
(30)
2,233
(1,370)
22,740
2,100
286
3,188
411
(43)
2,057
- 286
2,926
519
(262)
108
3,536
(369)
(538)
13,585
(155)
17,121
(524)
- (538)
(396)
8,218
(944)
12,289
(1,340)
20,507
65
65
15. 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
2023
$'000
2022
$'000
963
963
977
977
16. 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.
Contract liabilities primarily relate to the revenue arising from network subscription fee income,
brokered taxi plate licence income, owned taxi plate licence income, taxi Operating income, interest
on vehicle and insurance loans and taxi equipment and terminal rental which have been billed in
advance. This will be recognised as revenue when the services are provided to the customers in the
following month.
Trade payables
Security deposits
Other payables and accruals
Contract liabilities
17. Loans and borrowings
2023
$'000
11,913
7,375
16,658
2,247
38,193
2022
$'000
10,222
7,092
31,573
6,993
55,880
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 32.
66
A2B Annual Report 2023
66
Composition
Unsecured loans
Bank borrowings
Disclosure in the Consolidated Statement of Financial Position
Current liability
Non-current liability
Bank facilities
Working capital facility
Multi option facility
Total facility
Amount used at 30 June
Amount unused at 30 June
2023
$'000
602
15,000
15,602
2022
$'000
1,649
17,274
18,923
2023
$'000
602
15,000
15,602
2022
$'000
1,649
17,274
18,923
2023
$'000
15,000
1,600
16,600
15,000
1,600
2022
$'000
25,000
4,500
29,500
17,274
12,226
The unsecured loans are at-call and bear variable interest rates at 1.5% per annum.
At 30 June 2023, the bank working capital facility had a limit of $15,000,000 expiring in September 2024.
Bank borrowings bear interest, the interest rates are calculated as BBSY plus margin on the drawn loan
balance ranging between 2.95% and 5.19% in financial year 2023.
Post balance date the term of the working capital facility was extended to September 2026.
For more information about the Group’s exposure to interest rate and liquidity risk, refer to Note 32.
18. 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 the 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.
67
67
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 attached 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
income and employees may make additional
percentage of
contributions on a voluntary basis. Obligations
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.
individual employees' gross
for contributions
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 leased property to its original condition exists.
Composition
Employee benefit provisions
Annual leave provision
Long service leave provision
Redundancy provision
Make good provision
Disclosure in the Consolidated Statement of Financial Position
Current provision
Employee benefit provisions
Make good provision
Total current provision
Non-current provision
Employee benefit provisions
Make good provision
Total non-current provision
Total provisions
2023
$'000
2022
$'000
4,115
3,141
983
598
8,837
4,094
3,035
1,500
751
9,380
2023
$'000
2022
$'000
7,442
138
7,580
7,840
272
8,112
798
459
1,257
8,837
789
479
1,268
9,380
68
A2B Annual Report 2023
68
Provision movement
Balance at 1 July
Provisions made during the year
Provisions used during the year
Provisions reversed during the year
Balance at 30 June
Annual
leave
$'000
4,094
1,687
(1,666)
-
4,115
Long service
leave Redundancy
$'000
$'000
1,500
3,035
1,401
983
(1,500)
(1,295)
-
-
983
3,141
Make
good
$'000
751
129
(21)
(261)
598
Total
$'000
9,380
4,200
(4,482)
(261)
8,837
Defined contribution superannuation funds
Contributions to defined contribution superannuation funds
2023
$'000
5,060
2022
$'000
5,298
19. 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 the 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 (LTI) 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
2023
number
2022
number
121,230,683
121,230,683
69
69
Composition and movement in share capital (dollars)
Composition of issued capital
Fully paid ordinary shares
Options over unissued shares
2023
$'000
2022
$'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 the 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 shareholder meetings. In the event of a wind 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.
Composition and movement in other reserves
Foreign
currency
translation
reserve
$'000
Fair value
reserve
$'000
Employee
compensation
reserve
$'000
(83)
88
-
5
(7)
(76)
-
(83)
(667)
-
-
(667)
(667)
-
-
(667)
2,766
-
1,126
3,892
1,633
-
1,133
2,766
Total
$'000
2,016
88
1,126
3,230
959
(76)
1,133
2,016
2023 year:
Opening balance
Foreign exchange translation differences, net of tax
Share-based payments
Closing balance
2022 year:
Opening balance
Foreign exchange translation differences, net of tax
Share-based payments
Closing balance
20. Dividends
Dividends are recognised as a liability in the period in which they are declared.
Reflecting the strength of A2B’s operating performance and balance sheet, the Board has reinstated
the Company’s dividends, declaring a final FY23 fully franked dividend of $0.05 per share, scheduled
for payment on 26 October 2023. The record date for the FY23 final dividend is 29 September 2023.
70
A2B Annual Report 2023
70
21. 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 profit / (loss) attributable to owners of the Company (in thousands
of AUD)
26,792
(28,118)
Weighted average number of fully paid ordinary shares outstanding during the
year used in calculation of basic EPS (in thousands of shares)
121,231
120,556
Weighted average number of fully paid ordinary shares outstanding during the
year used in calculation of diluted EPS (in thousands of shares)
125,242
120,556
2023
2022
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
22. Dividend franking balance
2023
22.1 cents
21.4 cents
2022
(23.3 cents)
(23.3 cents)
2023
$'000
2022
$'000
Balance at the end of the financial year including franking credits / (debits)
arising from income tax payable / (receivable) in respect of the financial year
27,338
27,232
The above available amounts are based on the balance of the dividend franking account at year-
end adjusted for:
1.
2.
3.
franking credits / (debits) 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
4.
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 (FY22 $Nil). In accordance
with the tax consolidation legislation, the Company as the head entity in the tax consolidated group
has also assumed the benefit of $27,338,000 (FY22 $27,232,000) franking credits.
71
71
23. Parent entity disclosures
As at, and throughout, the financial year ended 30 June 2023 the parent entity of the Group was A2B
Australia Limited.
Results of the parent entity
Loss for the year
Total loss for the year
Financial position of the 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:
Share capital
Reserves
Profits reserve
Retained losses
Total equity
2023
$'000
2022
$'000
(18,898)
(18,898)
(19,523)
(19,523)
32,460
226,890
259,350
30,107
132,625
162,732
51,516
250,795
302,311
34,202
153,722
187,924
138,325
3,385
18,823
(63,915)
96,618
138,325
2,256
18,823
(45,017)
114,387
Parent entity capital expenditure commitments and contingencies
At 30 June 2023, the parent entity has not made any capital expenditure commitments (2022 $Nil).
For contingent liabilities as at 30 June 2023, 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 24.
24. 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.
72
A2B Annual Report 2023
72
The subsidiaries 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
▪ Combined Communications Network Pty Ltd
▪ EFT Solutions Pty Ltd
▪ Maxi Taxi (Australia) Pty Ltd
▪ 135466 Pty Ltd
▪ Newcastle Taxis Pty Ltd
▪ Austaxi Group Pty Ltd
▪
Taxitech Pty Ltd
▪ Arrow Taxi Services Pty Ltd
▪ North Suburban Taxis (Vic) 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
who are a party to the Deed is as follows:
Revenue and other income
Expenses
Results from operating activities
Finance income
Finance costs
Profit / (loss) before income tax
Income tax (expense) / benefit
Profit / (loss) for the year
Retained losses at beginning of year
Profit / (loss) for the year
Transferred to profit reserve
Retained losses at end of year
2023
$'000
156,597
(126,681)
29,916
20
(3,433)
26,503
(609)
25,894
2022
$'000
110,874
(150,125)
(39,251)
2
(1,131)
(40,380)
11,996
(28,384)
(69,638)
25,894
(25,894)
(69,638)
(41,254)
(28,384)
-
(69,638)
73
73
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
Inventories
Prepayments
Assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Property, plant and equipment
Taxi plate licences
Goodwill
Intellectual property
Right-of-use assets
Net deferred tax assets
Financial assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Loans and borrowings
Lease liabilities
Current tax liabilities
Deferred income
Provisions
Total current liabilities
Non-current liabilities
Loans and borrowings
Lease liabilities
Deferred income
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Profits reserve
Retained losses
Total equity attributable to equity holders of the Company
2023
$'000
2022
$'000
26,006
41,109
2,763
3,153
10,438
83,469
8,695
65,734
3,342
2,927
-
80,698
5,598
25,053
1,303
26,838
13,069
3,711
22,452
2,596
100,620
184,089
5,303
21,035
1,311
26,838
12,312
5,921
20,217
2,596
95,533
176,231
37,081
602
1,102
2,648
118
6,970
48,521
53,270
1,649
1,446
152
118
6,714
63,349
15,000
3,089
118
1,209
19,416
67,937
116,152
17,274
5,014
236
1,226
23,750
87,099
89,132
138,325
2,748
44,717
(69,638)
116,152
138,325
1,622
18,823
(69,638)
89,132
74
A2B Annual Report 2023
74
25. 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, cash bonus
Post-employment benefits - superannuation
Other long-term benefits
Termination benefits
Share-based payment expense
Incentive shares
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.
26. Remuneration of auditors
Audit and review of financial reports
Other services
Auditors of the Company - KPMG Australia
Taxation services
Other assurance services
2023
$
2,622,083
108,622
20,457
143,750
394,548
607,377
3,896,837
2022
$
2,656,584
180,013
40,693
1,277,768
708,277
424,623
5,287,958
2023
$
491,815
2022
$
453,000
273,868
25,157
790,840
255,521
-
708,521
The increase in non-audit services provided by KMPG primarily relates to tax advice that supported the property transactions
that were entered into during FY23.
75
75
27. Particulars relating to controlled entities
13cabs Innovations Pty Ltd
135466 Pty Ltd
A2B Corporate Services Pty Ltd (previously known as Voci Asia Pacific 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 NSW 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
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
Yellow Cabs (Queensland) Holdings Pty Ltd
Yellow Cabs Australia Pty Ltd
76
A2B Annual Report 2023
Group
interest %
2023
100
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
56
100
100
Group
interest %
2022
100
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
56
100
100
76
Yellow Cabs of Sydney Pty Ltd
Yellow Cabs South Australia Pty Ltd
Yellow Cabs Victoria Pty Ltd
Cabcharge NZ Limited (incorporated in NZ)*
Cabcharge North America Limited (incorporated in USA)
Manchester Taxi Division Limited (incorporated in UK)
Mobile Technologies International Limited (incorporated in UK)
Mobile Technologies International LLC (incorporated in USA)
Unless otherwise indicated, all Group companies are incorporated in Australia.
100
100
100
100
93
100
100
100
100
100
100
100
93
100
100
100
* Cabcharge NZ Limited was deregistered and removed from the NZ Companies Register on 3 August 2023.
The Group has lodged Form 6010 with ASIC for the deregistration of an additional 14 Australian entities in FY23. Confirmatio n
from ASIC of deregistration is outstanding at the date of this report.
28. 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 2023 (FY22 $Nil).
29. Contingencies
The Group had no material contingent liabilities at 30 June 2023 (FY22 $Nil)
30. Right-of-use assets and Lease liabilities
The Group leases various offices and Taxitech workshops. The leases run typically for a fixed period of
1 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. 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.
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 is 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.
77
77
2023 year:
Balance at 1 July
Depreciation
Additions
Derecognition *
Balance at 30 June
2022 year:
Balance at 1 July
Depreciation
Additions
Derecognition *
Balance at 30 June
Land and
buildings
$'000
Equipment
$'000
Total
$'000
6,517
(1,430)
351
(1,315)
4,123
- 6,517
- (1,430)
- 351
- (1,315)
- 4,123
12,716
(1,994)
459
(4,664)
6,517
- 12,716
- (1,994)
- 459
- (4,664)
- 6,517
* Derecognition of the right-of-use assets during 2022 and 2023 is a result of lease re-assessment
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
2023
$'000
1,478
3,766
97
5,341
2022
$'000
2,006
5,377
789
8,172
1,195
3,453
4,648
1,556
5,530
7,086
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.
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:
78
78
A2B Annual Report 2023
-
-
-
The lease term has changed or there is a significant event or change in circumstances resulting
in a change in the assessment of the 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
Interest on lease liabilities
Depreciation
Expenses relating to variable lease payments not included in lease liabilities
Amounts recognised in the Consolidated Statement of Cash Flows
Total cash outflow for leases
2023
$'000
314
1,430
267
2022
$'000
359
1,993
410
2023
$'000
1,803
2022
$'000
2,380
31. 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.
79
79
Reconciliation of net cash provided by operating activities with profit from ordinary activities after
income tax
Profit / (loss) for the year
Adjustment for non-cash items:
Depreciation and amortisation
Property, plant and equipment impairment charges
Capitalised development costs impairment charges
Net gain on disposal of property, plant and equipment
Share-based payments
Impairment reversal
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 from (used in) operating activities
Reconciliation of liabilities arising from financing activities
2023
$'000
27,063
2022
$'000
(27,818)
10,999
-
-
(21,357)
1,126
(1,622)
(595)
16,177
4,230
6,019
(97)
1,133
-
(118)
14,119
510
(19,741)
(682)
2,786
(2,233)
10,373
(14,789)
(396)
16,226
(436)
5,914
(12,289)
(6,244)
2023 year:
Balance at 1 July
Net cash flows
Lease net additions, derecognition and remeasure
Balance at 30 June
2022 year:
Balance at 1 July
Net cash flows
Lease net additions, derecognition and remeasure
Balance at 30 June
Cash and cash equivalents
Cash on hand and at bank
Balance as per Consolidated Statement of Cash Flows
Interest
bearing
loans
$'000
Lease
liabilities
$'000
Total
liabilities
from
financing
activities
$'000
18,923
(3,321)
-
15,602
7,086
(1,489)
(949)
4,648
26,009
(4,810)
(949)
20,250
13,316
1,864
17,059
(2,021)
- (4,209)
7,086
18,923
15,180
15,038
(4,209)
26,009
2023
$'000
29,541
29,541
2022
$'000
12,295
12,295
80
A2B Annual Report 2023
80
Restricted cash
There was no restricted cash at 30 June 2023 (2022 $Nil) which relates to current bank facilities. At 30
June 2023, $9.4 million is being held in escrow being the deposit for the sale of the O’Riordan Steet
property.
32. Financial instruments and financial risk management
Overview
The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor
and market confidence and to sustain the 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
81
81
equivalents, trade and other receivables and deposits with financial institutions represents the
maximum credit exposure of these assets.
Impairment losses and changes in financial assets recognised in the consolidated statement of
comprehensive income were as follows:
Impairment loss on trade receivables arising from contracts with customers
2023
$'000
(235)
(235)
2022
$'000
(1,973)
(1,973)
a) Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. 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 and other 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).
The Group has established an allowance for impairment that represents its estimate of expected losses
in respect of trade and other receivables and similar investments. The allowance for trade and other
receivables is the estimated irrecoverable amounts from billings. The main component of this
allowance is a collective loss component established for groups of similar assets in respect of losses
that have been incurred but not yet identified. The collective loss allowance is determined based on
historical data of payment statistics for similar financial assets
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 it to liquidity requirements;
▪ Maintain standby money market and commercial overdraft facilities; and
▪ Maintain committed borrowing facility in excess of budgeted usage levels.
82
82
A2B Annual Report 2023
There has been no change in liquidity risk policies during the financial year.
Maturity profile of financial liabilities by remaining contractual maturities
2023 year:
Contract liabilities, trade and other payables
Loans and borrowings
2022 year:
Contract liabilities, trade and other payables
Loans and borrowings
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
38,193
15,602
53,795
55,880
18,923
74,803
38,193
17,159
55,352
38,193
991
39,184
-
389
389
-
15,779
15,779
55,880
20,056
75,936
55,880
1,932
57,812
-
283
283
-
17,841
17,841
-
-
-
-
-
-
Typically the Group ensures that it has sufficient cash on demand and available liquidity 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 Note 17.
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.
83
83
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 - lease liabilities
Variable rate instruments
Financial assets - cash and cash equivalents
Financial liabilities - loans and borrowings
2023
$'000
2022
$'000
9,505
(4,648)
4,857
8,659
(7,086)
1,573
29,541
(15,602)
13,939
12,295
(18,923)
(6,628)
As at 30 June 2023, the carrying value of financial assets and liabilities in 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
d) Fair value hierarchy
2023
2.95% to 5.19%
8% to 12%
2022
1.5% to 3.28%
8% to 11%
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 2023
Unlisted equity instruments
30 June 2022
Unlisted equity instruments
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
- - 963
963
- - 977
977
84
A2B Annual Report 2023
84
The valuation techniques and significant unobservable inputs used to determine the fair value of these
unlisted equity investments at 30 June 2023 is as follows:
Valuation techniques
Significant unobservable inputs
Future Maintainable Earnings (FME) methodology –
the estimate of FME represents the fair value of the
unlisted equity investments on a going concern and
cash flow basis, determined by capitalising the
maintainable earnings of the investee using an
appropriate earnings multiple.
Expected earnings at 30 June 2023, with an adjusted
earnings multiple of 1x, derived from comparable
companies to the investee.
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 determined by valuing the assets and liabilities
of the investee at market value (excluding operating
assets and liabilities).
Minority discount of 20%. The estimate of the fair
value will increase (decrease) if the discount rate
decreases (increases).
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
2022.
2023
2022
33. Operating segment
Profit or loss
100 bp
increase
100 bp
decrease
$'000
(156)
(189)
$'000
156
189
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.
Identification of reportable segments
The Group’s operating segments are organised and managed separately according to the nature of
the products and services provided.
85
85
The Group previously operated under three operating segments comprising of Mobility Services,
Mobility Platforms and Payments. In financial year 2023, the Group was simplified into two operating
segments comprising B2C (Business to Consumer) and B2B (Business to Business). Each segment
represents a strategic business unit that offers different products and operates in different markets.
Comparative numbers have been restated to reflect this change.
Underlying EBITDA is the primary reporting measure used by A2B’s CODM. The CODM monitors the
operating results of the business units separately for the purpose of making decisions about resource
allocation and performance assessment.
Transfer prices between business segments are set on an arm’s length basis in a manner similar to
transactions with third parties. Segment revenue and expenses are eliminated on consolidation.
Segment description
Reportable segments under AASB 8 Operating Segments are as follows:
Reportable segment
Principal activities
B2C
B2B
Provides taxi network services to taxi operators, drivers, taxi license owners and
passengers nationally in Australia. These services include taxi booking services,
vehicle financing and insurance, full taxi fit-outs and repairs, driver training and
education as well as instant local deliveries.
B2C operates through a variety of brands including 13cabs, Silver Service and
Maxi Taxi. The majority of revenue comes from network subscriptions that are
charged monthly while revenue from related and ancillary services are
generated as and when the services are provided (e.g. car sales income,
interest on finance lease receivables and others, insurance commission
revenue or taxi equipment and terminal rental income not included in
subscriptions).
Provides services to taxi networks, independent operators, corporate clients
and governments both nationally and internationally. These services include
integrated booking, payment and dispatch technologies, corporate travel
solutions, consulting, licensing and other services. B2B operates through a
including Cabcharge, Spotto, Giraffe and Mobile
variety of brands
Technologies International (MTI).
Cabcharge provides corporate clients with a range of payment solutions to
charge trips on a designated account accompanied by detailed trip
information to enable efficient management of travel expenditure.
Cabcharge operates throughout Australia and receives service fee income
on non-cash payments based on the value of the fare processed.
Spotto and Giraffe represent our handheld offering for taxi and hire car
drivers. The current pricing model attracts a service fee based on the value
of transactions processed and/or a terminal rental fee.
MTI provides a SaaS booking, dispatch, payment, contact centre and vehicle
monitoring platform. MTI earns SaaS style subscription revenue from vehicles
accessing its technologies, income from bespoke software development,
and fees from project management, which are recorded under software
consulting and licence income. MTI operates throughout Australia, New
Zealand, North America, Europe and the United Kingdom.
86
A2B Annual Report 2023
86
Analysis by segment
June 2023:
External segment revenue and other income
Intersegment revenue and other income
Total segment revenue and other income
Underlying EBITDA
June 20222:
External segment revenue and other income
Intersegment revenue and other income
Total segment revenue and other income
Underlying EBITDA
B2C
$'000
B2B
$'000
Unallocated/
Eliminations1
$'000
Consolidated
$'000
88,024
2,552
90,576
10,989
59,306
1,756
61,062
9,094
86,487
69
86,556
(10,013)
40,711
3,251
43,962
(1,996)
23,115
(4,308)
18,807
-
1,577
(3,320)
(1,743)
2,566
170,445
-
170,445
20,083
128,775
-
128,775
(9,443)
1. Unallocated/Eliminations represents unallocated corporate costs, Government subsidies (including JobKeeper), gain on
property transactions and consolidation elimination entries.
2. June 2022 values have been adjusted to reflect the changes made to segments and in the calculation of underlying
EBITDA in June 2023.
Reconciliation of underlying EBITDA to statutory results from operating activities
Underlying EBITDA
Items not included in Underlying Profit Before Tax:
Net gain on property transactions
NSW taxi plate licence compensation, impairment reversal
Impairments and asset write-offs
Termination and restructuring
AASB16 depreciation, other items
Total items not included in underlying EBITDA
Depreciation and amortisation expenses
Results from operating activities
2023
$'000
20,083
20221
$'000
(9,443)
-
-
21,274
1,622
- (9,750)
(5,580)
(2,007)
2,450
1,789
(12,880)
22,678
(16,177)
(10,999)
(38,500)
31,762
1. 2022 values have been adjusted to reflect the changes made in the calculation of underlying EBITDA in 2023.
Segment assets and liabilities have not been disclosed as these
are not reported to the CODM and are not used by the CODM to assess performance and to make
resource allocation decisions.
Geographical information
The Group operates predominantly in one geographic segment with >95% of revenue generated in
Australia during the financial year.
Through its MTI and ManTax subsidiaries. the Group operates in other geographic segments including
North America, Europe and the United Kingdom. These foreign subsidiaries contributed $7.2 million in
revenue (FY22 $5.9 million) and non-current assets of $0.6 million (FY22 $0.6 million) to the Group’s
Consolidated Statements.
87
87
34. Share-based payment – Long term incentive
The Group has provided Long Term Incentive (LTI) awards to the KMP 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 $1,125,901 (FY22 $1,132,899).
Fair value
The fair value of the awards as at the valuation date is set out in the following table:
Grant date/employees entitled
2023 year
Performance Rights granted to Key
Management Personnel and senior
management on 1 September 2022
Total number of Rights
2022 year
Incentive shares granted to
Executive Chairman on 28 April
2022
Performance Rights granted to
Executive Chairman on 28 April
2022
Total number of Rights and
Incentive Shares
2021 year
Rights granted to CEO and key
management personnel on 19
November 2020
666,667
Total number of Rights
444,444
1,111,111
Number
of Rights
Vesting
conditions
Valuation
methodology
Fair
Value
Expected
vesting
date
Performance
Period
Share price
Share price
Share price
Trinomial
Lattice
methodology
$0.76
$0.60
$0.46
200,000
200,000
200,000
600,000
30 June
2026
1 July 2022 to
30 June 2026
400,000
Service
200,000
200,000
500,000
500,000
500,000
2,300,000
Monte Carlo
simulation
$1.29
30
September
2022
31 March
2023
1 July 2023
N/A
Monte Carlo
simulation
$1.02
$0.87
$0.74
30 June
2026
28 April 2022
to 30 June
2026
Monte Carlo
simulation
$0.68
15
September
2023
1 July 2020 to
30 June 2023
Monte Carlo
simulation
$0.69
Service
Service
Share price
Share price
Share price
Absolute
Total
Shareholder
Return
(market
condition)*
Relative
Total
Shareholder
Return (non-
market
condition)*
* Details of the operation of LTI awards are outlined in the Remuneration Report from page 22 to 36.
88
A2B Annual Report 2023
88
Key assumptions
The key assumptions adopted for the 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 in 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
35. Subsequent events
Dividends
2023
2022
1 September 2022
28 April 2022
$1.17
3.8 years
45%-55%
0.00%
3.26%
$1.29
3 years
37%
0.00%
2.68%
Number of Rights
2023
2022
4,412,850
3,178,743
600,000
2,300,000
-
-
(2,542,479)
(1,065,893)
-
-
2,470,371
4,412,850
-
-
In August 2023 the Board declared to pay a final fully franked dividend of $0.05 per share for FY23 with
a record date of 29 September 2023 and a payment date of 26 October 2023.
Property sale
Following completion of the A2B property portfolio review, the Board resolved in July 2023 to sell its
remaining property located in Melbourne at Downing Street, Oakleigh. Marketing activities
commenced in July 2023.
89
89
Directors’ Declaration
1)
In the opinion of the directors of A2B Australia Limited (the ‘Company’):
a) the Consolidated Financial Statements and notes that are set out on pages 38 to 89 and the
Remuneration Report in the Directors’ Report, set out on pages 22 to 36, are in accordance
with the Corporations Act 2001, including:
i) giving a true and fair view of the consolidated entity's financial position at 30 June 2023
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 will be able to pay its debts as
and when they become due and payable.
2) There are reasonable grounds to believe that the Company and the controlled entities identified
in Note 24 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.
3) The directors have been given the declarations required by Section 295A of the Corporations Act
2001 from the Executive Chairman and Chief Financial Officer for the financial year ended 30 June
2023.
4) The directors draw attention to Note 2 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors
Mark Bayliss
Executive Chairman
22 August 2023
Brent Cubis
Director
22 August 2023
90
A2B Annual Report 2023
90
Independent Auditor’s Report
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 Company).
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
•
•
giving a true and fair view of the Group’s
financial position as at 30 June 2023 and of its
financial performance for the year ended on
that date; and
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2023
• Consolidated statement of comprehensive income,
Consolidated statement of changes in equity, and
Consolidated statement of cash flows for the year
then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of 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 (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 global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks
used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation
91
91
Key Audit Matters
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit
of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on this matter
Valuation of Goodwill at 30 June 2023 ($ 27.5 million)
Refer to Note 12: 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 due to the size of the balance and the
significant audit effort arising from:
Our audit procedures included:
• The industry in which the Group operates being
impacted by disruptive technologies. Further,
there are changes in government regulations
impacting the taxi service fee which can be
applied when processing payments; and
• Estimation uncertainty on the ongoing recovery
of the CGUs in the Group from changing
customer behaviours following the COVID-19
global pandemic.
We focussed on the significant forward looking
assumptions the Group applied in their value in use
models, including:
• Discount rates are complicated in nature and vary
according to the conditions and environment the
specific cash generating unit (CGU) is subject to;
• Forecast growth rates and terminal growth rates.
In addition to the uncertainties described above, the
Group’s models are highly sensitive to small changes
in these assumptions, reducing available headroom.
This drives additional audit effort specific to their
feasibility and consistency of application to the
Group’s strategy.
• We considered the appropriateness of the value in
use method applied by the Group to perform the
annual test of goodwill for impairment against the
requirements of the accounting standards.
• We checked the forecast cash flows in the Group’s
value in use model to the Board approved FY24
budget.
• 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 challenged the Group’s forecast cash flow and
growth rate assumptions in light of the industry and
regulatory changes on the Group. We compared
forecast cash flow and growth rate assumptions for
the taxi industry against available industry data. We
considered the impact of the industry and regulatory
changes on the Group’s key assumptions, for
indicators of bias and inconsistent application using
our knowledge of the Group, business and
customers, and our industry experience. We checked
the consistency of the growth rates to the Group’s
revised plans and our experience regarding the
feasibility of these in the industry economic
environment in which they operate.
• We performed sensitivity analysis on the models by
varying key assumptions such as forecast cash flows
and terminal growth rate, within a reasonably
possible range. We did this to identify those
assumptions which are at higher risk of bias or
inconsistency in application.
92
A2B Annual Report 2023
92
These conditions increase the possibility of goodwill
being impaired, which necessitates additional
scrutiny by us, in particular to address the
objectivity of sources used for assumptions, and
their consistent application.
• 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 involved valuation specialists to supplement our
senior audit team members in assessing this key
audit matter.
• We analysed the Group’s internal reporting to assess
the Group’s monitoring and management of
activities, and the consistency of the allocation of
goodwill to CGUs.
• We assessed the Group’s allocation methodology of
corporate costs and assets to CGUs to our
understanding of the business and the criteria in the
accounting standards.
• 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 obtained
from our testing and accounting standard
requirements.
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 opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information, and
based on the work we have performed on the Other Information that we obtained prior to the date of this
Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error
• assessing the Group’s ability to continue as a going concern. 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 or to cease operations, or have no realistic alternative but to do so.
93
93
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.
94
A2B Annual Report 2023
94
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
A2B Australia Limited for the year ended 30
June 2023, complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages
24 to 36 of the Directors’ report for the year ended 30 June
2023.
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
22 August 2023
95
95
Shareholder Information
The information below was prepared as at 8 August 2023.
20 largest shareholders
Holder
1 CITICORP NOMINEES PTY LIMITED
2
PALM BEACH NOMINEES PTY LIMITED
3 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
4 COMFORTDELGRO CORPORATION LIMITED
5
6
7
8
9
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
PRUDENTIAL NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
BOND STREET CUSTODIANS LIMITED
SWAN TAXIS PTY LTD
10 NATIONAL EXCHANGE PTY LTD
10 PORTMAN TRADING PTY LTD
11 UBS NOMINEES PTY LTD
12 J S R T PTY LTD
13
T MITCHELL PTY LTD
14 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSI EDA
15 MARK BAYLISS
16 AKAT INVESTMENTS PTY LIMITED
17 NEWECONOMY COM AU NOMINEES PTY LIMITED
18 MS FABY CHONG
19 MR RONALD ALFRED BRIERLEY
19 BARADNIL PTY LIMITED
20 BNP PARIBAS NOMINEES PTY LTD
Total
Substantial shareholders
Holder
Spheria Asset Management
Sandon Capital
Investors Mutual
ComfortDelGro Corporation Limited
Pinnacle Investments Management Group Limited
Edgbaston Investment Partners
Number of shares held % issued capital
29,548,443
13,189,434
10,716,677
8,980,676
6,605,830
3,900,000
3,648,451
2,669,112
2,631,004
2,000,000
2,000,000
1,364,203
1,188,000
1,160,818
1,136,376
800,000
650,000
528,307
525,487
500,000
500,000
476,447
24.37
10.88
8.84
7.41
5.45
3.22
3.01
2.20
2.17
1.65
1.65
1.13
0.98
0.96
0.94
0.66
0.54
0.44
0.43
0.41
0.41
0.39
94,719,265
78.13
Number of shares held % issued capital
20,800,367
13,189,424
13,082,423
11,611,680
7,607,688
6,347,465
17.16
10.87
10.79
9.58
6.28
5.24
Information included in the substantial shareholders table is sourced from substantial shareholder
notices of the register that the Company’ maintains in accordance with section 672DA of the
Corporations Act 2001, in each case as at 8 August 2023.
96
A2B Annual Report 2023
96
Spread of shareholders
Size of holding
1 to 1000
1001 to 5000
5001 to 10000
10001 to 100000
100001 and Over
Total
Number of holders Number of shares held % of issued capital
1,396
1,299
380
458
60
3,135
731,459
3,421,884
2,676,902
12,678,984
101,721,454
121,230,683
0.60
2.82
2.21
10.46
83.91
100
The number of security investors holding less than a marketable parcel of securities is 540 and they
hold 66,090 securities.
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
www.a2baustralia.com/investor-center/reports/ .
is available on the Company’s website at
A printed copy of the Annual Report will only be sent to shareholders who have elected to receive
one.
97
97
Annual General Meeting
The 2023 Annual General Meeting of the shareholders of A2B Australia Limited will be held at 11am on
Thursday, 16 November 2023 in The Gold Melting Room, The Mint, 10 Macquarie Street, Sydney.
Full details provided in the Notice of Meeting.
Registered Office
A2B Australia Limited
ABN 99 001 958 390
9-13 O’Riordan Street
Alexandria NSW 2015
T: +61 2 9332 9222
www.a2baustralia.com
Company Secretary
Howard Edelman
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
98
A2B Annual Report 2023
98
99
A2B Australia Limited
ABN 99 001 958 390
100
A2B Annual Report 2023