For personal use only On 12 December 2014 the Company registered two entities in readiness to acquire the business and assets
of Shipstone Accident Repair Specialists along with BMB Prestige Collision Repairs and Browns Motors. Those
entities are Shipstone Holdings Pty Ltd (A.C.N. 49 603 350 787) and BMB Collision Repairs Pty Ltd (A.C.N. 35
603 350 223).
5. Details of entities over which control has been lost during the period
Previously discontinued operations that were not trading, Diesel Test Pty Ltd (A.C.N. 077 044 083) and
Emission Services Pty Ltd (A.C.N. 104 778 798) were both de-registered on 23/07/2014 at the request of the
directors of the company.
6. Details of individual and total dividends
A dividend, fully franked at 30%, of 1.6 cent per security was declared on 29 August 2014 with a payment
date of 3 December 2014.
2014 Dividend Declared
$5,348,015
The Directors are very pleased to announce that upon finalising the 2015 financials, they have
decided to declare a dividend, fully franked at 30%, of 1.7 cents per security with a payment date
of 30 October 2015.
2015 Dividend Declared
$6,957,266
7. Dividend reinvestment plan
Not applicable.
8. Details of associates and joint venture entities
Not applicable.
9.
Foreign entities
Not applicable.
10. Audit qualification or review
This report is based on the consolidated financial statements which have been audited by Shine Wing
Australia. The audit report is attached as part of the Annual Report.
11. Attachments
Annual Report for the year ended 30 June 2015 for AMA Group Limited is attached.
12. Signed
Ray Malone
Executive Chairman
AMA Group Limited
Dated: This 31st Day of August 2015
AMA GROUP LIMITED
APPENDIX 4E
(ii)
For personal use only
AMA GROUP LIMITED
ABN: 50 113 883 560
ANNUAL REPORT
2015
For personal use only
CONTENTS
_______________________________________________________________________________________
__________________________________________________________
AMA Group Limited
Annual report for the year ended 30 June 2015
__________________________________________________________
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
3
9
23
25
27
28
29
30
31
69
71
75
79
This document contains some statements which are by their very nature forward looking or predictive. Such
forward looking statements are by necessity at least partly based on assumptions about the results of future
operations which are planned by the Company and other factors affecting the industry in which the Company
conducts its business and markets generally. Such forward looking statements are not facts but rather represent
only expectations, estimates and/or forecasts about the future and thereby need to be read bearing in mind the
risks and uncertainties concerning future events generally.
There are no guarantees about the subjects dealt with in forward looking statements. Indeed, actual outcomes
may differ substantially from that predicted due to a range of variable factors.
AMA GROUP LIMITED
ANNUAL REPORT 2015
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CORPORATE GOVERNANCE
STATEMENT
2015
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ANNUAL REPORT 2015
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CORPORATE GOVERNANCE STATEMENT
______________________________________________________________________________________
A review of the Company's Corporate Governance Framework was undertaken during the 2014/15 year and a new
framework was adopted which is appropriate for the size, complexity and operations of the Company and its
subsidiaries.
Unless otherwise stated all Policies and Charters meet the ASX Corporate Governance Council's Best Practice
Recommendations. All Charters and Policies are available
from the Company or on its website at
www.amagroupltd.com
Principle 1: Lay solid foundations for management and oversight.
Role of the Board and Management
The Board's role is to govern the Company rather than to manage it. In governing the Company, the Directors
must act in the best interests of the Company as a whole. It is the role of senior management to manage the
Company in accordance with the direction and delegations of the Board and the responsibility of the Board to
oversee the activities of management in carrying out these delegated duties. The Board's responsibilities are
detailed in its Board Charter.
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a director, or putting that person
forward as a candidate to ensure that person is competent, experienced, and would not be impaired in any way
from undertaking the duties of director. The Company provides relevant information to shareholders for their
consideration about the attributes of candidates together with whether the Board supports the appointment or re-
election.
The terms of the appointment of a non-executive director, executive directors and senior executives are agreed
upon and set out in writing at the time of appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the
proper functioning of the Board, including agendas, Board papers and minutes, advising the Board and its
Committees (as applicable) on governance matters, monitoring that the Board and Committee policies and
procedures are followed, communication with regulatory bodies and the ASX and statutory and other filings.
Diversity
The Company is committed to increasing diversity amongst its employees, not just gender diversity. Our workforce
is employed based on the right person for the right job regardless of their gender, age, nationality, race, religious
beliefs, cultural background, sexuality or physical ability.
Executive and board positions are filled by the best candidates available without discrimination. The Company is
committed to increasing gender diversity within these positions when appropriate appointments become available.
It is also committed to identifying suitable persons within the organisation and where appropriate opportunities
exist, advance diversity and to support promotion of talented employees into management positions.
The Company has not set any gender specific diversity objectives as it believes that all categories of diversity are
equally as important within its organisation.
The following table demonstrates the Company’s gender diversity amongst employees and contractors as at 30
June 2015.
Women (Qty.) 2015
Women (Qty.) 2014
Board
0
0
Executive Team
1
1
Employees
50
28
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CORPORATE GOVERNANCE STATEMENT
______________________________________________________________________________________
Encourage Enhanced Performance
The performance of the Board, individual Directors and Executive Officers of the Company is monitored and
evaluated by the Board. The Board is responsible for conducting evaluations on a regular basis in line with these
policy guidelines.
A formal performance evaluation was conducted by the Board during the year. The evaluation has provided the
board with valuable feedback for future development.
During the year, all Directors have full access to all Company records and receive Financial and Operational Reports
at each Board Meeting.
Independent Advice
Directors collectively or individually have the right to seek independent professional advice at the Company's
expense, up to specified limits, to assist them to carry out their responsibilities. All advice obtained is made
available to the full Board.
Principle 2: Structure the Board to add value.
Structure and Composition of the Board
The Board has been formed so that it has an effective mix of personnel who are committed to discharging their
responsibilities and duties and being of value to the Company.
The names of the Directors, their independence, qualifications and experience are stated on pages 13 to 15 along
with the term of office held by each.
The Board believes that the interests of all Shareholders are best served by:
* Directors having the appropriate skills and experience;
*
* Some major Shareholders being represented on the Board.
A number of the Directors being independent as defined in the ASX Corporate Governance Guidelines; and
Where any Director has a material personal interest in a matter, the Director will not be permitted to be present
during discussion or to vote on the matter. The enforcement of this requirement is in accordance with the
Corporations Act and aims to ensure that the interests of Shareholders, as a whole, are pursued and that their
interest or the Director's Independence is not jeopardised.
The Board consists of four Directors of whom two Directors, Simon Doyle and Hugh Robertson, are considered to be
independent. The Board believes the existence of two independent directors on the Board provides sufficient
independent judgement to the Board at this time.
Until the resignation of Duncan Fisher in March 2015, the Company’s Chairman was an independent Director. The
Board is now Chaired by Ray Malone who is also the Company’s CEO. The Board believes that although Mr Malone
is not considered independent, he is the appropriate person to lead the Company. The Board has delegated certain
responsibilities from the Chairman to independent directors to minimize any conflict that may arise from the
Chairman and CEO roles being exercised by the same individual.
The Company currently has no Nomination Committee as it believes that due to the size of the Board and the
Company and the nature of the Company’s current activities, this function is best served by the full Board. The
Board is responsible for considering board succession issues and reviewing Board composition to assist in ensuring
the Board has the appropriate balance of skills, knowledge, experience and independence to enable it to discharge
its duties and responsibilities effectively.
The Board has a skills matrix covering the competencies and experience of each member. When the need for a
new director is identified, the required experience and competencies of the new director are defined in the context
of this matrix and any gaps that may exist.
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______________________________________________________________________________________
Board Skills Matrix
Industry
knowledge
Experience with
financial…
Strategic
expertise
10
8
6
4
2
0
Accounting and
finance
Legal
Managing risk
Rating
Induction of New Directors and Ongoing Development
Any new Directors will be issued with a formal Letter of Appointment that sets out the key terms and conditions of
their appointment, including Director's duties, rights and responsibilities, the time commitment envisaged, and the
Board's expectations regarding involvement with any Committee work.
A new director induction program is in place and Directors are encouraged to engage in professional development
activities to develop and maintain the skills and knowledge needed to perform their role as Directors effectively.
Principle 3: Act ethically and responsibly
Ethical and Responsible Decision-Making
As part of its commitment to recognising the legitimate interests of stakeholders, the Company has adopted a Code
of Conduct to guide compliance with legal and other obligations to legitimate stakeholders.
The Company has a share trading policy that regulates the dealings by Directors, Officers and Employees, in
shares, options and other securities issued by the Company. The policy has been formulated to ensure that
Directors, Officers, Employees and Consultants who work on a regular basis for the Company are aware of the legal
restrictions on trading in Company securities while in possession of unpublished price-sensitive information.
As a good Corporate Citizen, the Company encourages compliance with and commitment to appropriate corporate
practices that are fair and ethical, via its Code of Conduct.
Principle 4: Safeguard integrity in corporate reporting.
Audit Committee
The Company has a duly constituted Audit Committee currently consisting of two Non-Executive Directors, with the
Committee Chairman being an Independent Non-Executive Director. The current members of the Committee, as at
the date of this report, and their qualifications are detailed in the Directors' Profiles on page 13 and 14.
The ASX Corporate Governance Council’s Best Practice Recommendations are that an Audit Committee consists of
at least 3 members. The Company cannot comply with this due to the small number of Board members.
The Committee holds a minimum of two meetings a year. Details of attendance of the members of the Audit
Committee are contained on page 14.
The Company's external auditor attends each annual general meeting and is available to answer any questions with
regard to the conduct of the audit and their report.
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CORPORATE GOVERNANCE STATEMENT
______________________________________________________________________________________
CEO and CFO Declarations
The CEO and Group Accountant have provided the Board with a declaration that, in their opinion, the financial
records of the entity have been properly maintained and that the financial statements comply with the appropriate
accounting standards and give a true and fair view of the financial position and performance of the entity and that
the opinion has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
Principle 5: Making timely and balanced disclosure.
The Company has procedures in place to ensure that the Company’s Continuous Disclosure obligations under ASX
Listing Rules and Corporations Act are met and that the market is properly informed of matters which may have a
material impact on the price at which securities are traded.
The Board has designated the Company Secretaries as the person responsible for overseeing and co-ordinating
disclosure of information to the ASX as well as communicating with the ASX. In accordance with ASX Listing Rules,
the Company immediately notifies the ASX of information concerning the Company:
1
That a reasonable person would or may expect to have a material effect on the price or value of the
Company's securities; and
That would, or would be likely to, influence persons who commonly invest in securities in deciding whether to
acquire or dispose of the Company's securities.
2
Principle 6: Respect the rights of shareholders.
The Company is committed to providing current and relevant information to its shareholders.
The Company respects the rights of its Shareholders, and to facilitate the effective exercise of the rights, the
Company is committed to:
1 Communicating effectively with Shareholders through ongoing releases to the market via ASX information and
General Meetings of the Company;
2 Giving Shareholders ready access to balanced and understandable information about the Company and
Corporate Proposals;
3 Making it easy for Shareholders to participate in General Meetings of the Company; and
4 Requesting the External Auditor to attend the Annual General Meeting and be available to answer
Shareholder's questions about the conduct of the audit, and the preparation and content of the Auditor's
Report.
Any Shareholder wishing to make inquiries of the Company is advised to contact the registered office. All public
announcements made by the Company can be obtained from the ASX's website www.asx.com.au
Shareholders may elect to, and are encouraged to, receive communications from the Company and its securities
registry electronically.
The Company maintains information in relation to its corporate governance documents, Directors and senior
executives, Board and committee charters and annual reports on the Company’s website.
Principle 7: Recognise and managing risk.
The Board is committed to the identification, assessment and management of risk throughout the Company’s
business activities.
The Audit Committee operates pursuant to a charter which provides for risk oversight and management within the
Company. This is periodically reviewed and updated. Management reports risks identified to the Committee on a
periodic basis.
The Company’s Risk Management Policy recognises that risk management is an essential element of good corporate
governance and fundamental in achieving its strategic and operational objectives. Risk management improves
decision making, defines opportunities and mitigates material events that may impact security holder value.
The Board reviews the entity’s risk management framework at least annually to satisfy itself that it continues to be
sound. A review of the Company’s risk management framework was conducted during the 2015 financial year.
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CORPORATE GOVERNANCE STATEMENT
______________________________________________________________________________________
Management reports risks identified to the Board through regular operations reports, and via direct and timely
communication to the Board where and when applicable. During the reporting period, management has reported to
the Board as to the effectiveness of the Company’s management of its material business risks. The Company does
not have an internal audit function.
The Company faces risks inherent to its business, including economic risks, which may materially impact the
Company’s ability to create or preserve value for security holders over the short, medium or long term. The
Company has in place policies and procedures, including a risk management framework (as described in the
Company’s Risk Management Policy), which is developed and updated to help manage these risks. The Board does
not consider that the Company currently has any material exposure to environmental or social sustainability risks.
The Chief Executive Officer and Group Accountant have given a statement to the Board that the integrity of the
financial statements is founded on a sound system of risk management and internal compliance and controls based
on the Company's Risk Management policies.
Principle 8: Remunerate fairly and responsibly
Profiles of the members and details of meetings of the Remuneration Committee are detailed on pages 13 to 15
within the Director's Report. The Committee’s responsibilities are detailed in the Remuneration Committee Charter.
The Company is committed to remunerating its Senior Executives in a manner that is market-competitive and
consistent with “Best Practice” as well as supporting the interests of Shareholders. Senior Executives may receive
a remuneration package based on fixed and variable components, determined by their position and experience.
Shares and/or Options may also be granted based on an individual's performance, with those granted to Directors
subject to Shareholder approval.
Non-Executive Directors are paid their fees out of the maximum aggregate amount approved by Shareholders for
the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses
and do not participate in Equity Schemes of the Company without prior Shareholder approval.
Current remuneration is disclosed in the Remuneration Report and in Note 21: Key Management Personnel
Disclosures.
Key Management Personnel or closely related parties of Key Management Personnel are prohibited from entering
into hedge arrangements that would have the effect of limiting the risk exposure relating to their remuneration.
In accordance with the Company’s share trading policy, participants in any equity based incentive scheme are
prohibited from entering into any transaction that would have the effect of hedging or otherwise transferring the
risk of any fluctuation in the value of any unvested entitlement in the Company’s securities to any other person.
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DIRECTORS’ REPORT
2015
AMA GROUP LIMITED
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DIRECTORS’ REPORT
Your directors present their report on the consolidated entity (referred to hereafter as the ‘Company’, 'consolidated
entity' or ‘Group’) consisting of AMA Group Limited and the entities it controlled for the year ended 30 June 2015.
Directors
The following persons were directors of AMA Group Limited during the financial year and up to the date of this
report unless otherwise stated:
Chief Executive Officer and Executive Chairman
Ray Malone
Simon Doyle
Non-Executive Director
Ray Smith-Roberts Chief Operating Officer and Executive Director
Hugh Robertson
Duncan Fischer
Non-Executive Director (Appointed 2 June 2015)
Non-Executive Chairman (Retired 11 March 2015)
Corporate Structure
AMA Group Limited is a company limited by shares that is incorporated and domiciled in Australia.
Principal Activities
The consolidated entity’s principal activity and purpose is the operation and development of complementary
businesses in the automotive aftercare market sector. It focuses on vehicle protection products and accessories,
vehicle panel repair, automotive electrical and cable accessories and automotive component re-manufacturing.
During the financial year the Company focused on building existing businesses. It also identified and acquired
earnings accretive companies and businesses operating in the vehicle panel repairs segment. It investigated
various other opportunities for growth through acquisition and, late in the year, was able to reach agreement to
acquire Woods Accident Repair Centres operating in the vehicle panel repair segment which it took on the
management on 1 July 2014. The Company continues to focus on excellence in customer service, identifying and
maximising growth opportunities and developing shareholder wealth.
Dividends – AMA Group Limited
A dividend, fully franked at 30%, of 1.6 cent per security (2014: 1.6 cent per security 95% franked) was declared
on 29 August 2014 with a payment date of 3 December 2014.
2014 Dividend Declared
$5,348,015
The directors are very pleased to announce the declaration of a 1.7c per security (fully franked at 30%) dividend
for the year ended 30 June 2015.
2015 Dividend Declared
$6,957,266
The payment schedule for this dividend will be:-
Declared date:
Ex/Dividend date:
Record date:
Payment date:
31/08/2015
11/09/2015
15/09/2015
30/10/2015
Financial Results
The table on the following page highlights the significant improvement in the results which have been achieved
through the contribution of the earnings accretive acquisitions that we have made since November 2013 backed by
the continued strong performance of our six “foundation” businesses.
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DIRECTORS’ REPORT
30 Jun 2015
% Var. to
30 Jun 2014
30 Jun 2014
$'000
$'000
Revenue from Continuing Operations
95,774
+49.0%
64,259
EBITDA from Continuing Operations
14,410
+54.7%
EBITA from Continuing Operations
13,441
+51.8%
EBIT from Continuing Operations
13,096
+48.2%
Profit before tax from Continuing Operations
12,652
+45.3%
9,317
8,855
8,838
8,706
Net Profit After Tax
9,090
+60.8%
5,655
Normalised Net Operating Cash Flows
9,102
+50.9%
6,033
Net Operating Cash Flows
Earnings per Security
7,820
+29.6%
6,033
Cents
Cents
2.72
+60.4%
1.70
While the reported EBITDA level result is very pleasing, underlying earnings, excluding one-off acquisition,
restructuring and integration costs, were approximately $500,000 higher than reported at the EBITDA level. Given
the nature of our rapidly expanding divisions and the high level of recent and anticipated acquisition activity we
consider it appropriate to focus on the group’s EBITDA result going forward and for greater transparency we intend
to report underlying earnings from this point.
The IAG contracts in the panel repair division have been valued and amortised, resulting in a non-cash expense
and balance sheet adjustment of approximately $316,350 which is reflected in the reported EBIT.
Our net operating cash flows were impacted by the acquisition of working capital deficiency in excess of $1m as
part of the BMB & Browns acquisition consideration reductions. Normalised operating cash flows are much more in
line with the 54.7% movement in EBITDA. The net profit and earnings per share growth of 60.8% and 60.4%
respectively are very pleasing results.
Review of Operations, Likely Developments & Expected Results of Operations
Key Achievements
AMA has achieved a number of transformative milestones during the year. The entire AMA team has worked
extremely hard and we are delighted with what we have achieved.
The integration of the acquired businesses has delivered strong additional revenue and increased margins. Organic
growth across the group has also been strong. This is a credit to all of our people and shows that we have made
good acquisitions and are delivering for our shareholders in a space that we know very well.
Vehicle Panel Repair – Revenues achieved $42.5m (2014: $14.5m)
The panel division has grown substantially over the year increasing from 3 workshops to 29 workshops (with the
addition of Woods coming online Oct 2015). Revenue in panel has increased from $14.5 million to more than $85
million, including Woods on an annualised basis, and the integration of our acquired businesses is going very well.
One key acquisition, RMA, has performed exceptionally well and has finished the year approximately 15% ahead of
budget.
The acquisitions have expanded our foot print and relationships with vehicle manufacturers, becoming an
authorised repairer for Audi, Mercedes, Porsche, Bentley, Jaguar, Landrover, VW, Toyota amongst others, in
addition to our existing BMW arrangements.
Our Insurer and Fleet endorsements have seen a similar expansion.
The purchase of the Woods group, (settlement October 2015), gives us an exceptional geographical footprint
across Melbourne as well as two mechanical divisions.
Further vertical integration is occurring as our scale permits.
The size of the total motor vehicle body, paint and panel repair market in Australia is approximately $7 billion and
we have positioned ourselves very well strategically to participate in the consolidation taking place in this market.
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DIRECTORS’ REPORT
As we continue to grow the panel business the barriers to entry will continue to increase and we have worked to
diversify our business through expanding into differing geographical areas and all sectors of the panel space.
The recently completed capital raising of $45 million puts us in a strong position and we currently have significant
acquisitions on the table.
Vehicle Protection Products & Accessories – Revenues achieved $27.7m (2014: $24.7m)
The vehicle protection division achieved revenue growth of 12% ($3m) which was in line with our expectations and
was a strong result given the relevant segments of the new vehicle market declined slightly. Gross margin
continued to improve albeit many of the initial synergy benefits between ECB and Custom Alloy have already been
realised. An increased focus on expense management improved the contribution to overall EBITDA. Investments
in new tooling and equipment were made in FY15 and further cost saving initiatives are planned to provide earnings
growth in FY16.
Automotive Electrical and Cable Accessories – Revenues achieved $16.9m (2014: $17.8m)
A very tough market environment saw revenues from the electrical and cable accessories business decline by
$0.9m, with the falling Australian dollar also impacting margins. Nonetheless a number of new innovative products
contributed to performance and strengthened our market position. Whilst the results do not show growth, we
believe the segment is now stable. We have implemented a number of new management strategies, new channels
to market and product innovations that provide a solid base to work forward from and improve margins whilst this
segment remains in a tough market cycle.
Automotive Component Remanufacturing – Revenues achieved $9.4m (2014: $7.8m)
FluidDrive has continued to outperform and is a standout across our group. Revenue from the automotive
component remanufacturing division grew by 20% (1.6m) which exceeded our expectations. This very pleasing
growth has been achieved through taking advantage of key market opportunities. A range of management
strategies have also resulted in significant gross margin improvements being achieved (FY15:40% vs FY14:34%)
which is particularly pleasing.
This is a very solid result from this division, and whilst we do not necessarily expect the same growth for the FY16
year we see a range of further organic and acquisitive growth opportunities in this division in the future.
Significant Changes in the State of Affairs
On 1 July 2014 the Company acquired 100% of the shares of Repair Management Australia Pty Ltd (A.C.N. 158 201
444), Repair Management Australia Bayswater Pty Ltd (A.C.N. 162 337 724), Repair
Australia
Dandenong Pty Ltd (A.C.N. 162 337 715) and Phil Munday’s Panel Works Pty Ltd (A.C.N. 062 535 951).
Collectively, these four entities are referred to as “RMA”.
Management
On 23 December 2014 after negotiation with Westpac Bank, the Company further extended its bank facility to allow
the Company to draw-down up to $12m (an extension of $2m) on normal commercial terms and this funding
continues to be available to help fund earnings accretive acquisitions or other working capital needs.
On 1 January 2015 the Company acquired the business assets of Shipstone Accident Repair Specialists from
Bambank Pty Ltd and commenced operating the business under newly formed entity Shipstone Holdings Pty Ltd
(A.C.N. 603 350 787).
On 1 February 2015 the Company acquired the business assets of BMB Prestige Collision Repairs from Bencar
Nominees Pty Ltd and acquired the business assets of Browns Motors from Bencar Consultants Pty Ltd. These
assets commenced operating under newly formed entity BMB Collision Repairs Pty Ltd (A.C.N. 603 350 223).
On 13 May 2015 the Company announced that it had secured an option over Woods Accident Repair Centres,
involving management control that, if successful, would see the purchase of Woods by AMA. Following a successful
period of management of the Woods operations, we anticipate that the option will be exercised on or about the 1st
October 2015 with AMA paying the previously agreed purchase price and taking full ownership of the business.
There have been no other significant changes in the state of affairs during the financial year.
Outlook
Management accounts for the group for July and August show we have started the 2016 year strongly.
As our recently acquired panel operations are integrating, we are actively pursuing a number of compelling
acquisition opportunities. The Directors believe Shareholders can expect another very strong result from this
division.
Vehicle protection products has started the new financial year strongly. Key market segments are now growing
again, and opportunities in new segments are providing for a positive outlook for the FY16 year.
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DIRECTORS’ REPORT
The automotive electrical division continues to operate in a challenging market environment, but steps continue to
be taken to improve our competitive position.
Automotive component remanufacturing remains our smallest division but continues to perform well.
Matters Subsequent to the End of the Financial Year
Subsequent to the balance date AMA raised $45 million (before costs) by way of a share placement of 75 million
shares at $0.60. This additional capital puts AMA in a very strong position to continue to make valuable
acquisitions in FY16.
On 6 July 2015 the Bank Bills facility was paid off in full, following the receipt of the funds from the capital raising.
On 31 August 2015 the Directors declared a dividend, fully franked at 1.7 cents per security which is to be paid 30
October 2015.
We are currently in negotiations to determine an appropriately sized banking facility to assist with working capital
requirements and potential acquisitions.
No other matters or circumstances have arisen since 30 June 2015 that have significantly affected, or may
significantly affect the consolidated entity's operations in future financial years, the results of those operations in
future financial years, or the consolidated entity's state of affairs in future financial years.
Environmental Regulation
Management continues to work with local regulatory authorities to achieve, where practical, best practice
environmental management so as to minimise risk to the environment, reduce waste and ensure compliance with
regulatory requirements.
The consolidated entity had no adverse environmental issues during the year.
Information on Directors
Ray Malone
—
Executive Chairman and Chief Executive Officer
Appointed to the Board
Experience and expertise
—
—
23 January 2009. Appointed executive chairman 19 March 2015
Mr Malone has over 30 years work experience in the automotive panel
repair industry, progressing his career from a spray painter through to
business ownership and senior executive positions. He has developed
many strong relationships with key customers focussing on excellent
customer service. He has developed extensive business skills which he has
consistently applied to AMA’s development since 2009.
Interest in Shares and Options* —
80,417,619 shares and Nil options
Directorships held in other listed
entities
Special responsibilities
—
—
Nil
Nil
Simon Doyle
—
Non-Executive Director
Appointed to the Board
—
14 October 2009
Qualifications
— BA, LLB
Experience and expertise
—
Mr Doyle has many years of experience in Australia and overseas in
commercial law, company executive roles and non-executive director roles
with an emphasis on strategic direction, governance and compliance.
Previous executive roles
functions,
compliance, corporate affairs, human resources and company secretarial
as well as specific leadership roles in mergers, acquisitions, corporate
restructures, due diligence and initial public offering.
include responsibility
legal
for
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DIRECTORS’ REPORT
Previous non-executive roles include board positions in start-ups, mature
businesses, businesses in transition and Board member and Chairman in
the not for profit sector.
Interest in Shares and Options* —
4,161,470 shares and Nil options
Directorships held in other listed
entities
Special responsibilities
—
—
Nil
Chairman of the Audit Committee and Chairman of the Remuneration
Committee
Ray Smith-Roberts
—
Chief Operating Officer and Executive Director
Appointed to the Board
Experience and expertise
—
—
28 February 2014
Mr Smith-Roberts has over 25 years work experience in the automotive
industry. He joined ECB many years ago progressing to general manager
and then became managing director when the Company became part of
AMA and played the lead role in making the business a significantly
stronger business. Over the years he has attained valuable operational
knowledge and experience having been the Group COO since 2009. He is
well positioned to assist the board in developing strategy for the next
phase of the Company’s growth and development.
Interest in Shares and Options* —
8,167,746 shares and Nil options
Directorships held in other listed
entities
Special responsibilities
—
—
Nil
Nil
Hugh Robertson
—
Non-Executive Director
Appointed to the Board
Experience and expertise
—
—
2 June 2015
Mr Robertson has worked in stockbroking for over 30 years with a variety
of firms including Bell Potter, Investor First and more latterly Wilson HTM.
Among his areas of interest is a concentration on small cap industrial
stocks and he currently sits on the boards of Hub 24 Ltd and Oncard
International Ltd.
Interest in Shares and Options* —
230,000 shares and Nil options
Directorships held in other listed
entities
—
Mr Robertson currently sits on the boards of Hub 24 Ltd and Oncard
International Ltd.
Special responsibilities
—
Member of the Audit Committee and the Remuneration Committee
Duncan Fischer
—
Non-Executive Chairman
Appointed to the Board
Retired from the Board
Qualifications
Experience and expertise
—
—
—
—
14 October 2009
14 March 2015
FCA, FAICD
Mr Fischer has many years professional, business and board experience
in Australia and overseas.
He practiced as a Chartered Accountant in Australia from 1977 to 1992
retiring from the profession and joining Tattersall’s where he went on to
become Managing Director and Chief Executive Officer, a position he
retired from in 2006.
His experience covers all aspects of management, strategy, mergers,
new business start-ups and leading a major listing and IPO process and
has held a number of board positions. He is a past member of the
Australia Day Committee (Victoria) and has held a number of
AMA GROUP LIMITED
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committee and not for profit board roles, including Committee for
Melbourne and the Arts Angels Council.
Interest in Shares and Options as at
the date of retirement only*
—
9,133,334 shares and Nil options
Directorships held in other listed
entities
Special responsibilities
—
—
Nil
Member of the Audit Committee and
Member of the Remuneration Committee
*The relevant interest of each Director in the shares or options over shares issued by the companies within the economic entity and other related
body corporate as notified by the Directors to the Australian Securities Exchange in accordance with s 205G(1) of the Corporations Act 2001, as at
the date of this report.
Company Secretarial
The name and details of the Company Secretaries in office during the financial year and until the date of this report
are as follows. Secretaries were in office for the entire period unless otherwise stated.
Phillip Hains
—
Joint Company Secretary
Appointed
Experience
—
—
9 December 2009
Mr Hains is a Chartered Accountant and specialist in the public company
environment. He has served the needs of a number of public company
boards of directors and related committees. He has over 23 years’
experience in providing accounting, administration, compliance and
general management services. He holds a Masters of Business
Administration from RMIT and a Public Practice Certificate from the
Institute of Chartered Accountants.
Terri Bakos
—
Joint Company Secretary
Appointed
Experience
—
—
2 March 2010
Ms Bakos is a Chartered Secretary and holds a B. Bus (Accounting) from
RMIT University. She has over 20 years’ experience providing accounting
and compliance services to listed and unlisted public companies.
Meetings of Directors
The number of meetings of the Company's board of directors and of each board committee held during the year
ended 30 June 2015, and the numbers of meetings attended by each director were:
Board Meetings
Committee Meetings
Audit Committee
Remuneration Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
7
7
7
2
5
7
7
7
2
5
NA
3
NA
1
2
NA
3
NA
1
2
NA
1
NA
NA
NA
NA
1
NA
NA
NA
Ray Malone
Simon Doyle
Ray Smith-Roberts
Hugh Robertson
Duncan Fischer
Remuneration Report
The remuneration report is set out under the following main headings:
A
B
C
D
Principles used to determine the nature and amount of remuneration
Details of remuneration
Share-based compensation
Service agreements
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This remuneration report has been prepared by the Directors of AMA Group Limited to comply with the Corporations
Act 2001 and the Key Management Personnel (KMP) disclosures required under AASB 124 Related Party Disclosures.
A Principles used to determine the nature and amount of remuneration
Key Management Personnel
The following were Key Management Personnel of the entity at any time during the reporting period and unless
otherwise indicated were Key Management Personnel for the entire period:
Directors
•
•
•
•
•
- Chief Executive Officer and Executive Chairman
- Non-executive Director
- Chief Operating Officer and Executive Director
- Non-Executive Director (Appointed 2 June 2015)
- Chairman and Non-Executive Director (Retired 11 March 2015)
Ray Malone
Simon Doyle
Ray Smith-Roberts
Hugh Robertson
Duncan Fischer
Remuneration policies
The Board is responsible for reviewing the remuneration policies and practices of the Company, including the
compensation arrangements of Executive Directors, Non-Executive Directors and Senior Executives.
The objective of these policies is to:
•
•
•
•
•
Make AMA Group Limited and its subsidiaries an employer of choice.
Attract and retain the highest calibre personnel.
Encourage a culture of reward for effort and contribution.
Set incentives that reward short and medium term performance for the Company as a whole.
Encourage professional and personal development.
In the case of senior executives, any recommendation for compensation review will be made by the Chief Executive
Officer to the Remuneration Committee.
There is no direct link between remuneration of Executive Directors and other Key Management Personnel and the
share price movement. Remuneration is based on management key performance indicators, targets and other
benchmarks as determined by the Board or the Chief Executive Officer.
Non-executive Directors
The Board determines the Non-executive Directors’ remuneration based on independent market data for
comparative companies.
The remuneration payable from time to time to Non-executive Directors shall be in an amount not exceeding in
aggregate a maximum sum that is from time to time approved by resolution of the Company, currently $400,000
per annum.
Non-executive Directors’ retirement payments are limited to compulsory employer superannuation.
Executive Directors and Senior Management remuneration
The Company’s remuneration policy directs that the remuneration packages appropriately reflect the executives’
duties and responsibilities and that remuneration levels attract and retain high calibre executives with the skills
necessary to successfully manage the Company’s operations and achieve its strategic and financial objectives.
The total remuneration packages of Executive Directors and Senior Management is comprised of a base salary and
may include short term and long term incentives. The Company has a policy of rewarding extraordinary
contribution to the growth of the Company with the grant of an annual discretionary cash bonus, shares or options
under the Company’s Employee Share Option Plan.
Executives are also entitled to be reimbursed for their reasonable travel, accommodation and other expenses
incurred in the execution of their duties.
Remuneration packages for Executive Directors and Senior Executives can generally consist of three components:
•
•
•
Fixed remuneration which is made up of cash salary, salary sacrifice components and superannuation
Short term incentives which include the issue of shares or options or a cash bonus; and
Long term incentives which include issuing options.
Fixed remuneration
Senior Executives who possess a high level of skill and experience are offered a competitive base salary. The
performance of each executive will be reviewed annually. Following the review, the Board may in its sole discretion
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increase the salary based on that executive’s performance, productivity and such other matters as it considers
relevant.
Superannuation contributions by the Company are limited to the statutory level of 9.50% (FY2014: 9.25%) of
wages and salaries.
Short-term incentives
The remuneration of AMA Group Ltd Senior Executives includes short-term incentive bonuses, payable as cash or
equity, as part of their employment conditions based on achieving specific measured objectives. The Board may
however approve discretionary bonuses to executives in relation to certain milestones being achieved.
Long-term incentives
The Company has adopted a Share Option Plan for the benefit of Directors, full-time and part-time staff members
employed by the Company. There are currently no options on issue.
Performance based remuneration
Performance based remuneration is issued to reward individual performance in line with Group objectives.
Consequently, performance based remuneration is paid to an individual where the individual’s performance clearly
contributes to a successful outcome for the Group. This is regularly measured in respect of performance against
key performance indicators (KPI’s) and incentive bonuses are paid monthly, quarterly and yearly to reflect this.
KPI’s used to measure performance include, but are not limited to:
• Completion of set milestones.
•
EBIT target achievements.
• Sales target achievements.
KPI’s are set in advance in conjunction with Group targets and in consultation with Executives & employees. The
KPI’s chosen reflect the Group’s goals for the year and endeavour to increase shareholder wealth.
Assessment of KPI’s is undertaken by the Board and Management based on management accounts and year end
audited financial results.
All Executives and employees are eligible to receive incentives whether through employment contracts or by
recommendation of the Chief Executive Officer or Board. Performance based incentive payments are based on a
set monetary value or number of shares or options. There is no fixed portion between incentive and base
remuneration.
Remuneration policy versus Group Performance
The Group’s remuneration policy is based on industry practice. Executive performance based remuneration issued
during the 2015 financial year has been measured against the KPI’s set at the start of the year by the Board and/or
management to reflect the Group’s objectives for the year. The Board believes that the performance based
remuneration issued to executives during the year reflects the contribution that they have made to the Group’s
performance over the past 12 months.
Service agreements
The Group has entered into service agreements with Key Management Personnel.
No Executive during the term of their employment agreement shall perform work for any other person, corporation
or business without the prior written consent of the Company.
Termination of other Executives
Generally, the Company or the executive may terminate employment at any time by giving the other party
appropriate contractual notice in writing.
If either the Company or the Executive gives notice of termination, the Company may, at its discretion, choose to
terminate the Executive’s employment immediately or at any time during the notice period and pay the executive
an amount equal to the salary due for the residual period of notice at the time of termination.
The employment of each executive may be terminated immediately without notice or payment in lieu in the event
of any serious or persistent breach of the agreement, any serious misconduct or wilful neglect of duties, in the
event of bankruptcy or any arrangement or compensation being made with creditors, on conviction of a criminal
offence, permanent incapacity of the executive or a consistent failure to carry out duties in a manner satisfactory to
the Company.
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B
Details of remuneration
Details of the remuneration of the Directors, the Key Management Personnel of the consolidated entity (as defined
in AASB 124 Related Party Disclosures) are set out in the tables below:
2015
Short-term employee benefits
Salary
$
Bonus
$
Other
$
Long-term
employee
benefits
Long service
leave 1
$
Post-
employment
benefits
Equity Settled
Share based
payments
Superannuation
$
Shares 2
$
Total
$
Non-Executive Directors
Duncan Fischer*
Simon Doyle
Hugh Robertson**
83,692
100,000
5,000
-
-
-
-
-
-
-
-
-
7,951
9,500
-
-
-
-
91,643
109,500
5,000
Executive Directors
Ray Malone
Ray Smith-Roberts
731,500
144,122
-
410,874
-
20,956
13,079
1,738
35,000
30,000
116,000
20,000
895,579
627,330
1,064,314
410,874
20,956
14,817
82,451
136,000 1,729,052
1 Represents movement in the provision for long service leave for amounts accrued and not paid
2 Includes sign-on bonuses vested in current period – refer to section C and D (below & page 18)
* Retired 11 March 2015
** Appointed 2 June 2015
2014
Short-term employee benefits
Salary
$
Bonus
$
Other
$
Long-term
employee
benefits
Long service
leave 1
$
Post-
employment
benefits
Equity Settled
Share based
payments
Superannuation
$
Shares 2
$
Total
$
Non-Executive Directors
Duncan Fischer
Simon Doyle
131,100
100,000
-
-
-
-
-
-
-
9,250
-
-
131,100
109,250
Executive Directors
Ray Malone
Ray Smith-Roberts*
739,746
110,421
-
341,261
-
20,956
13,401
3,470
25,000
25,000
116,000
20,000
894,147
521,108
1,081,267
341,261
20,956
16,871
59,250
136,000 1,655,605
1 Represents movement in the provision for long service leave for amounts accrued and not paid
2 Includes sign-on bonuses vested in current period – refer to section C and D (below & page 18)
* Appointed 28 February 2014
C Share-based compensation
Ordinary shares
Ray Malone, one of AMA’s Key Management Personnel, was issued 2,000,000 ordinary shares as consideration for
him committing to an amendment and extension of his employment contract. As these shares are conditional to
him remaining employed and are being expensed over the 5 year term, the value of $116,000 has been included in
the 2014 and 2015 remuneration tables and a further $116,000 will be shown in each of the remuneration tables
for 2016-2017. These shares were issued in December 2012.
Ray Smith-Roberts, one of AMA’s Key Management Personnel, was issued 507,614 ordinary shares as consideration
for him committing to an extension of his employment contract. As these shares are conditional to him remaining
employed and are being expensed over the 5 year term, the value of $20,000 has been included in the 2014 and
2015 remuneration tables and a further $20,000 will be shown in each of the remuneration tables for 2016-2017.
These shares were issued in September 2012.
Options
There were no options issued to Key Management Personnel during the year or the previous year as part of their
compensation.
D Service agreements
The following Key Management Personnel have formalised service agreements in place as at 30th June 2015:
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Name:
Title:
Ray Malone
Executive Chairman and Chief Executive Officer
Agreement commenced:
4 July 2010
Agreement extended:
1 July 2012
Term of original agreement:5 Years
Term of extension:
5 Years to 30 June 2017
Termination period
and payout:
Other terms:
Mr Malone agreed not to resign within the first 2 years of the term. After 4 July 2012
Mr Malone may terminate the agreement with 6 months’ notice.
Where the Company terminates the agreement prior to the expiration of the term on
grounds other than serious misconduct, it must give notice of the balance of the term
or make payment in lieu of notice equal to the total fixed remuneration plus
superannuation and existing bonus that accrues over that period.
As part of the employment agreement variation, the clause in Mr Malone’s
employment agreement, dated 4 July 2010, allowing him the option from 4 July 2012
to transition to the role of Strategic Executive Director with a base remuneration of
not less than 50% of his remuneration at the date of transition, has been deleted.
As part of Mr Malone’s contract extension, he was granted 2,000,000 shares that
were issued following shareholder approval at the AGM held on 27 November 2012.
There is a claw-back clause in relation to these shares, which reads…
“In the event that the Employee resigns from his employment prior to the end of the
Extended Term (which does not include where the Employee dies or becomes
incapacitated) or the Company terminates this Agreement because of breach on the
part of the Employee prior to the end of the Extended Term, the Employee shall (at
his election) either:
(i) Consent to the redemption or cancellation of the following number of shares (in
the event only that the Share Issue has taken place) : Number of full years
remaining in the Extended Term at the Termination Date / 5 x 2,000,000; or
(ii) Pay to the Company the following amount in cash : Share Issue Value x number
of full years remaining in the Extended Term at the Termination Date / 5.”
Name:
Title:
Ray Smith-Roberts
Chief Operations Officer
Agreement commenced:
1 September 2010
Agreement extended:
1 July 2012
Term of original agreement:No fixed term
Term of extension:
5 Years
Termination Period:
6 months’ notice period
Termination payout:
6 months’ base salary
Other terms:
As part of Mr Smith-Roberts’ contract extension, he was granted $100,000 in shares
that were issued in September 2012 and this issue was subsequently ratified by the
shareholders at the AGM held on 27 November 2012. There is a claw-back clause in
relation to these shares, which reads…
“In the event that the Employee resigns from his employment prior to the end of the
Extended Term (which does not include where the Employee dies or becomes
incapacitated) or the Company terminates this Agreement because of breach on the
part of the Employee prior to the end of the Extended Term, the Employee shall (at
his election) either:
(i) Consent to the redemption or cancellation of the following number of shares :
Number of full years remaining in the Extended Term at the Termination Date / 5
x no of shares issued pursuant to the Share Issue; or
(ii) Pay to the Company the $100,000 x number of full years remaining in the
Extended Term at the Termination Date / 5.”
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Name:
Title:
Simon Doyle
Non-Executive Director
Agreement commenced:
14 October 2009
Term of agreement:
Ongoing
Termination period:
None
Termination payment:
Nil
Other terms:
None
Name:
Title:
Hugh Robertson
Non-Executive Director
Agreement commenced:
2 June 2015
Term of agreement:
Ongoing
Termination period:
None
Termination payment:
Nil
Other terms:
None
Shares Under Option
There were no unissued ordinary shares of AMA Group Limited under option at the date of this report.
Shares Issued on the Exercise of Options
No shares were issued on the exercise of options in the financial year ended 30 June 2015 or 30 June 2014.
Insurance of Officers
During the financial year, the Company paid a premium in respect of a contract to insure the directors of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of coverage and the amount of the premium.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of
taking responsibility, on behalf of the Company, for all or part of those proceedings.
Non-Audit Services
No non-audit services were provided by Shine Wing Australia.
Rounding of Amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the ‘rounding-off’ of amounts in the directors’ report. Amounts in the directors’ report have
been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the
nearest dollar.
Auditors' Independence Declaration
A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is
set out on page 24.
Auditor
Moore Stephens Melbourne became Shine Wing Australia and as such continues in office in accordance with section
327 of the Corporations Act 2001.
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DIRECTORS’ REPORT
This report is made in accordance with a resolution of the board of directors.
For And On Behalf Of The Board
Ray Malone
Executive Chairman
AMA Group Limited
Dated this 31st day of August 2015
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AMA GROUP LIMITED
ANNUAL REPORT 2015
22
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AUDITOR’S INDEPENDENCE
DECLARATION
2015
AMA GROUP LIMITED
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AUDITOR’S INDEPENDENCE DECLARATION
______________________________________________________________________________________
Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
to the directors of AMA Group Limited
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2015, there have
been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
SHINE WING AUSTRALIA
Chartered Accountants
Rami Eltchelebi
Partner
Melbourne, 31 August 2015
ShineWing Australia ABN 39 533 589 331. Liability limited by a scheme approved under Professional Standards Legislation. ShineWing Australia is an independent member of ShineWing
International Limited – members in principal cities throughout the world.
AMA GROUP LIMITED
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FINANCIAL STATEMENTS
2015
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FINANCIAL REPORT
for the year ended 30 June 2015
_______________________________________________________________________________________________________
Contents
Financial Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statement
Directors’ Declaration and Independent Auditor’s Report
Directors' Declaration
Independent Auditor's Report to the Members of AMA Group Limited
General Information
25
26
27
28
29
67
69
These financial statements cover the consolidated entity consisting of AMA Group Limited and its controlled entities.
The financial statements are presented in Australian currency.
AMA Group Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Suite 1
1233 High Street
Armadale VIC 3143
A description of the nature of the consolidated entity's operations and its principal activities is included in the
Directors' Report, which is not part of the financial statements.
The financial statements were authorised for issue by the Directors on 31 August 2015.
AMA GROUP LIMITED
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2015
_______________________________________________________________________________________________________
30 June 2015
30 June 2014
Note
$'000
$'000
Revenue from continuing operations
4
95,774
64,259
Raw materials and consumables used
Employee benefits expense
Occupancy expenses
Travel and motor vehicle
Advertising and marketing
Professional services
Insurance
Research and development
Communication expenses
Bad and doubtful debts expense
Other expenses
(41,944)
(28,602)
(5,727)
(1,106)
(926)
(1,102)
(312)
(274)
(313)
(12)
(1,046)
(29,441)
(18,741)
(3,279)
(917)
(709)
(455)
(318)
(177)
(159)
(48)
(698)
Earnings before interest, tax and depreciation and
amortisation (EBITDA)
14,410
9,317
Depreciation and amortisation expense
Earnings before interest and tax (EBIT)
Finance costs
(1,314)
13,096
(253)
Profit from continuing operations before fair value adjustments
12,843
Fair Value adjustments to financial liabilities
Profit before tax from continuing operations
(191)
12,652
(479)
8,838
(94)
8,744
(38)
8,706
Income tax expense
6
(3,562)
(2,830)
Profit after tax from continuing operations
Loss after tax from discontinued operations
32(b)
Profit after tax
9,090
-
9,090
5,876
(221)
5,655
Total comprehensive income for the Year
9,090
5,655
Profit attributable to members of AMA Group Limited
9,090
5,655
Total comprehensive income attributable to members of AMA
Group Limited
Earnings per share
From continuing operations
Basic earnings per share
Diluted earnings per share
From continuing and discontinued operations
Basic earnings per share
Diluted earnings per share
The accompanying notes form part of these financial statements
9,090
5,655
Cents
Cents
2.72
2.72
2.72
2.72
1.76
1.76
1.70
1.70
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2015
__________________________________________________________________________________
30 June 2015 30 June 2014
Note
$'000
$'000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax assets
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Total equity
The accompanying notes form part of these financial statements
7
8
9
10
11
12
13
10
14
15
6
16
15
17
16
14
2,197
11,683
7,952
1,048
2,098
8,572
6,595
1,121
22,880
18,386
8,098
48,571
1,682
1,957
2,777
31,013
1,363
2,509
60,308
37,662
83,188
56,048
10,702
8,330
949
3,781
6,506
5
1,830
2,482
23,762
10,823
11
862
251
9,931
11,056
16
346
235
-
597
34,818
11,420
48,370
44,628
18
74,904
(26,534)
74,904
(30,276)
48,370
44,628
AMA GROUP LIMITED
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STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2015
__________________________________________________________________________________
Contributed
Equity
$'000
Accumulated
Total
Losses
$'000
$'000
Balance at 1 July 2013
73,971
(30,615)
43,356
Shares issued net of costs
Dividends recognised for the period
Profit attributable to members of AMA Group Limited
Balance at 30 June 2014
Dividends recognised for the period
Profit attributable to members of AMA Group Limited
933
-
-
74,904
-
-
-
(5,316)
5,655
(30,276)
(5,348)
9,090
933
(5,316)
5,655
44,628
(5,348)
9,090
Balance at 30 June 2015
74,904
(26,534)
48,370
The accompanying notes form part of these financial statements
AMA GROUP LIMITED
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CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2015
__________________________________________________________________________________
CASH FLOWS RELATED TO OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other costs of finance paid
Income taxes paid
30 June 2015 30 June 2014
Note
$'000
$'000
101,901
(89,634)
4
(253)
(4,198)
72,531
(64,775)
164
(93)
(1,794)
NET OPERATING CASH FLOWS
28
7,820
6,033
CASH FLOWS RELATED TO INVESTING ACTIVITIES
Proceeds from sales of plant and equipment
Payment for purchases of plant and equipment
Payment for businesses acquired, net of cash acquired
Payments for intangible assets
74
(2,336)
(8,344)
(87)
30
(325)
(6,356)
(75)
NET INVESTING CASH FLOWS
(10,693)
(6,726)
CASH FLOWS RELATED TO FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Dividends paid
19
NET FINANCING CASH FLOWS
39,767
(31,447)
(5,348)
8,032
(19,050)
(5,316)
2,972
(16,334)
NET INCREASE IN CASH AND CASH EQUIVALENTS
99
(17,027)
Cash and cash equivalents at the beginning of the Financial year
2,098
19,125
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
7
2,197
2,098
The accompanying notes form part of these financial statements
AMA GROUP LIMITED
ANNUAL REPORT 2015
30
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Notes Index
Significant accounting policies ..................................................................................... 32
Note 1.
Critical accounting estimates and judgements ............................................................... 43
Note 2.
Segment information ................................................................................................. 43
Note 3.
Revenue ................................................................................................................... 46
Note 4.
Expenses from continuing operations ........................................................................... 46
Note 5.
Income tax expense .................................................................................................. 47
Note 6.
Cash and cash equivalents .......................................................................................... 47
Note 7.
Trade and other receivables ........................................................................................ 48
Note 8.
Note 9.
Inventories ............................................................................................................... 49
Note 10. Other assets ............................................................................................................. 49
Note 11. Property, plant and equipment .................................................................................... 49
Note 12. Intangible assets ....................................................................................................... 50
Note 13. Deferred tax asset ..................................................................................................... 52
Note 14. Trade and other payables ........................................................................................... 52
Note 15. Borrowings ............................................................................................................... 53
Note 16. Provisions ................................................................................................................. 54
Note 17. Deferred tax liability .................................................................................................. 54
Note 18. Equity - issued capital & to be issued ........................................................................... 55
Note 19. Equity - dividends ...................................................................................................... 55
Note 20. Financial instruments ................................................................................................. 55
Note 21. Key management personnel disclosures ....................................................................... 59
Note 22. Remuneration of auditors ........................................................................................... 60
Note 23. Contingent liabilities .................................................................................................. 60
Note 24. Commitments for expenditure ..................................................................................... 61
Note 25. Related party transactions .......................................................................................... 61
Note 26. Subsidiaries .............................................................................................................. 62
Note 27. Events occurring after the reporting period ................................................................... 65
Note 28. Reconciliation of profit after income tax to net operating cash flows ................................. 65
Note 29. Earnings per share..................................................................................................... 65
Note 30. Share-based payments .............................................................................................. 66
Note 31. Parent Information .................................................................................................... 66
Note 32. Discontinued Operations ............................................................................................. 66
Note 33. Class order disclosures ............................................................................................... 67
AMA GROUP LIMITED
ANNUAL REPORT 2015
31
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 1.
Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of accounting
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes
under Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the
financial statements comply with International Financial Reporting Standards (IFRSs).
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified where applicable
by the revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or
loss and certain classes of property, plant and equipment.
Critical accounting estimates
The preparation of these financial statements in conformity with Australian Accounting Standards requires the use
of certain critical accounting estimates. It also requires management to exercise its judgement in the process of
applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in
note 2.
New accounting standards for application in future periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such pronouncements on the Group when adopted in future
periods, are discussed below:
-
AASB 9: Financial Instruments and associated amending standards (applicable for annual reporting periods
commencing on or after 1 January 2018)
AASB 9 will be applicable retrospectively and includes revised requirements for the classification and
measurement of financial instruments, revised recognition and de-recognition requirements for financial
instruments and simplified requirements for hedge accounting.
The key changes made to the Standard that may affect the Group on initial application include certain
simplifications to the classification of financial assets.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments, including hedging activity, it is impracticable at this stage to provide a reasonable estimate of
such impact.
-
-
AASB 15: Revenue from Contracts with Customers (applicable for annual reporting periods commencing on or
after 1st January 2017)
This standard, when effective, will replace the current accounting requirements applicable to revenue with a
single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue
model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between
entities in the same line of business to facilitate sales to customers and potential customers. The core
principle of AASB 15 is that an entity will recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-step
model:
•
•
• determine the transaction price;
• allocate the transaction price to the performance obligations in the contract; and
• recognise revenue when (or as) the performance obligation is satisfied.
AASB 15 also requires enhanced disclosures regarding revenues.
This standard will require retrospective restatement and is available for early adoption.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group’s financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impacts.
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
AASB 2014-1: Amendments to Australian Accounting Standards (Parts D and E)
Part D of this Standard makes amendments to AASB 1 First-time Adoption of Australian Accounting Standards,
which arise from the issuance of AASB 14 Regulatory Deferral Accounts in June 2014. Part D is applicable for
annual reporting periods beginning on or after 1 January 2016.
Part E of this standard which is applicable from financial years beginning on or after 1 January 2015 inter-alia
defers the application date of AASB 9: Financial Instruments (December 2010) to annual reporting periods
beginning on or after 1st January 2018. This part also makes consequential amendments to hedge accounting
AMA GROUP LIMITED
ANNUAL REPORT 2015
32
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
disclosures set out in AASB 7 Financial Instruments: Disclosures and to AASB 132 Financial Instruments:
Presentation to permit irrevocable designation of ‘own use contracts’ as measured at fair value through profit
or loss if the designation eliminates or significantly reduces an Accounting mismatch.
-
-
-
-
-
-
-
AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in
Joint Operations (applicable for annual reporting periods commencing on or after 1 January 2016).
AASB 2014-3 amends AASB 11: Joint Arrangements to provide guidance on the accounting for acquisitions of
interests in joint operations in which the activity constitutes a business. The amendments require the acquirer
of an interest in a joint operation:
•
in which the activity constitutes a business, as defined in AASB 3 Business Combinations, to apply all of the
principles on business combinations accounting in AASB 3 and other Australian Accounting Standards
except for those principles that conflict with the guidance in AASB 11; and
• disclose the information required by AASB 3 and other Australian Accounting Standards for business
combinations.
Since this standard will apply only to acquisition of interests in Joint operations on or after 1st January 2016,
the management believes it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 2014-4: Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation
This Standard applies to annual reporting periods beginning on or after 1 January 2016 and is meant to clarify
that a revenue-based method to calculate the depreciation or amortisation of an asset is not appropriate and
that the expected pattern of consumption of the future economic benefits from the asset is a more appropriate
basis. However, this could be a rebuttable presumption in limited circumstances. These amendments are to be
prospectively applied on transition.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2014-5: Amendments to Australian Accounting Standards arising from AASB 15
This Standard makes consequential amendments
to Australian Accounting Standards (including
Interpretations) arising from the issue of AASB 15. This Standard applies to annual reporting periods
beginning on or after 1st January 2017, except that the amendments to AASB 9 (December 2009) and AASB 9
(December 2010) apply to annual reporting periods beginning on or after 1st January 2018. This Standard
shall be applied when AASB 15 is applied. Earlier application is permitted.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2014-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2014)
This Standard gives effect to the consequential amendments to Australian Accounting Standards (including
Interpretations) arising from the issue of AASB 9 (December 2014). More significantly, additional disclosure
requirements have been added to AASB 7 Financial Instruments: Disclosures that includes information on
credit risk exposures of the entity. It also makes various editorial corrections to Australian Accounting
Standards (including an Interpretation). This Standard applies to annual reporting periods beginning on or
after 1st January 2018. This Standard will be applied when AASB 9 (December 2014) is applied. Earlier
application is permitted.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2014-8: Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) -
Application of AASB 9 (December 2009) and AASB 9 (December 2010)
This Standard makes amendments to the earlier versions of AASB 9 (December 2014), namely AASB 9
(December 2009) and AASB 9 (December 2010) such that for annual Reporting periods beginning on or after
1st January 2015, an entity may apply AASB 9 (December 2009) or AASB 9 (December 2010) if, and only if,
the entity’s date of initial application (as described in the applicable Standard) is before 1 February 2015.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2014-9: Amendments to Australian Accounting Standards – Equity Method in Separate Financial
Statements
This Standard amends AASB 127, and consequentially amends AASB 1 and AASB 128, to allow entities to use
the equity method of accounting for investments in subsidiaries, joint ventures and associates in their
separate financial statements. It is applicable from annual reporting periods beginning on or after 1st January
2016. Earlier application is permitted. These amendments are to be prospectively applied on transition.
This Standard is not expected to significantly impact the Group’s Consolidated financial statements.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
This Standard amends AASB 10 and AASB 128 and requires:
(a) a full gain or loss to be recognised when a transaction involves assets that meet the definition of ‘business’
as per AASB 3 Business Combinations (whether it is housed in a subsidiary or not); and
(b) a partial gain or loss to be recognised when a transaction involves assets that do not constitute a
business, even if these assets are housed in a subsidiary.
AMA GROUP LIMITED
ANNUAL REPORT 2015
33
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
The above amendments are applicable only to transactions occurring in annual reporting periods beginning on
or after 1st January 2016 with earlier application being permitted.
This Standard is not expected to significantly impact the Group’s Consolidated financial statements.
-
-
-
AASB 2015-1: Amendments to Australian Accounting Standards – Annual Improvements to Australian
Accounting Standards 2012–2014 Cycle
This standard is applicable from annual reporting periods beginning on or after 1st January 2016 with earlier
application being permitted. Significant amendments to this standard that are to be prospectively applied
include the following:
a. Clarifications in AASB 5 Non-current Assets Held for Sale and Discontinued Operations that a change of
status from ‘Held for Sale’ to ‘Held for distribution to owners or vice versa does not mean discontinuation
of the original plan of proposal.
b. Additional guidance in AASB 7 on assessment of ‘continuing involvement’ (as provided in AASB 139 or
AASB 9) in servicing contracts for the purpose of disclosure requirements.
c. Amendments to AASB 119 Employee Benefits to allow references to government bonds to be made from a
currency perspective rather than from a regional perspective.
d. Permitting the disclosures pursuant to AASB 134.16A to be given by cross referencing from the interim
financial statements to some other statement (such as management commentary or risk report).
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2015-2: Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB
101
This standard is applicable from annual reporting periods beginning on or after 1st January 2016 with earlier
application being permitted. The amendments therein focus on clarifying the presentation and disclosure
requirements in AASB 101, such that entities are able to judge appropriately as to how and/or what
information is to be disclosed in their financial statements. Further, this standard also includes other
editorial/consequential amendments to other AASB standards.
This Standard is not expected to significantly impact the Group’s financial statements.
AASB 2015-3: Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031
Materiality
This Standard completes the AASB project regarding the withdrawal of AASB 1031 Materiality (July 2004), by
amending AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors to supersede AASB 1031
(July 2004) and deletes references to AASB 1031 in the Australian Accounting Standards listed in the
Appendix to this Standard. The standard is applicable from 1st July 2015 and until then, AASB 1031
(December 2013) (that was earlier re-issued in lieu of AASB 1031 (July 2004)) will continue to act as a
reference standard directing financial statement preparers to apply the materiality requirements in AASB 101
and AASB 108.
This Standard is not expected to significantly impact the Group’s financial statements.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of AMA Group Limited
('Company' or 'Parent Entity') as at 30 June 2015 and the results of all subsidiaries for the year then ended. AMA
Group Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'
or ‘group’. A list of the subsidiaries is provided in note 26.
The separate financial statements of the parent entity, AMA Group Limited, have not been presented within this
financial report as permitted by amendments made to the Corporations Act 2001 effective as at 28 June 2011.
Parent information has been disclosed in note 31 to the financial statements
Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than one-half of the voting rights. Subsidiaries
are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between companies in the consolidated
entity are eliminated in full.
Investments in subsidiaries are accounted for at cost less impairment, in the separate financial statements of the
parent entity.
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian
dollars, which is the parent entity’s functional and presentation currency.
AMA GROUP LIMITED
ANNUAL REPORT 2015
34
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair
values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of
comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the
statement of comprehensive income.
Revenue recognition
Sales revenue represents revenue earned from the sale of the consolidated entity’s products and services, net of
returns, trade allowances and duties and taxes paid.
In the majority of cases the simple process of delivery of goods or service to a customer, where the risks and
rewards of ownership pass to the customer, give rise to the recognition of income.
The revenue recognition policy follows AASB 118 and revenue is recognised when all of the following criteria are
met:
-
-
-
-
-
the consolidated entity has transferred to the buyer the significant risks and rewards of ownership of the
goods.
the consolidated entity retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold.
the amount of revenue can be measured reliably.
it is probable that the economic benefits associated with the transaction will flow to the consolidated entity.
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
All revenues are stated net of goods and services taxes.
Interest revenue is recognised using the effective interest method. It includes amortisation of any discount or
premium.
Other revenue is recognised when it is received or when the right to receive payment is established.
Grants and subsidies are recognised as income over the period to which they relate.
Income tax
The income tax expense/(income) for the year comprises current income tax expense/(income) and deferred tax
expense/(income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax
liabilities/(assets) are therefore measured at the amounts expected to be paid to/(recovered from) the relevant
taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well as unused tax losses.
Current and deferred income tax expense/(income) is charged or credited directly to equity instead of the profit or
loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
AMA GROUP LIMITED
ANNUAL REPORT 2015
35
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the
reporting period. Their measurement also reflects the manner in which management expects to recover or settle
the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
Tax consolidation
AMA Group Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under tax consolidation legislation. Each entity in the Group recognises its own current and deferred tax assets and
liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities
/(assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately
transferred to the head entity. The Group notified the Australian Taxation Office that it had formed an income tax
consolidated group to apply from 1 September 2006.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the statement of financial position.
Trade receivables
All trade receivables are recognised at the amounts receivable as they are due for settlement by no more than 90
days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off. A provision for impairment of receivables is raised when some doubt as to collection exists.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost
comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure.
Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.
Investments and other financial assets
Investments and other financial assets are stated at the lower of their carrying amount and fair value less costs to
sell. The fair values of quoted investments are based on current bid prices. For unlisted investments, the
consolidated entity establishes fair value by using valuation techniques. These include the use of recent arms-
length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis,
and option pricing models.
Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less any accumulated depreciation. The
carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable
amount from these assets.
Depreciation is calculated on either a straight line or diminishing value basis (class or asset must have either a
straight line or diminishing value not both) as considered appropriate to write off the net cost or re-valued amount
of each item of plant and equipment over its expected useful life to the consolidated entity. The expected useful
lives are as follows:-
AMA GROUP LIMITED
ANNUAL REPORT 2015
36
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Leasehold improvements
The cost of improvements to or on leasehold properties is amortised over the unexpired life of the lease or the
estimated useful life of the improvement to the consolidated entity, whichever is the shorter. The diminishing
value method of depreciation was used.
Plant and equipment
The expected useful life of purchased plant and equipment is two to fifteen years. Where items of plant and
equipment have separately identifiable components which are subject to regular replacement, those components
are assigned useful lives distinct from the item of plant and equipment to which they now relate. The diminishing
value method of depreciation was used.
Furniture and equipment
The cost of furniture and equipment is carried at cost or fair value less any accumulated depreciation. The
expected useful life of furniture and equipment is two to ten years. The diminishing value method of depreciation
was used.
Motor vehicles
The cost of motor vehicles is carried at cost or fair value less any accumulated depreciation. The expected useful
life of motor vehicles is four to eight years. The diminishing value method of depreciation was used.
Leases
A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially
all the risks and benefits incidental to ownership of leased non-current assets, and operating leases under which
the lessor effectively retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the present value of minimum lease
payments. Lease payments are allocated between the principal component of the lease liability and the finance
costs.
The leased asset is depreciated on a straight line basis over the term of the lease, or where it is likely that the
consolidated entity will obtain ownership of the asset, the life of the asset. Leased assets held at the reporting
date are being amortised over periods ranging from three to five years.
Other operating lease payments are charged to the statement of comprehensive income in the period in which they
are incurred, as this represents the pattern of benefits derived from the leased assets.
Intangible assets
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i)
(ii)
(iii)
the consideration transferred;
any non-controlling interest; and
the acquisition date fair value of any previously held equity interest,
over the acquisition date fair value of net identifiable assets acquired.
The value of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100%
interest will depend on the method adopted in measuring the aforementioned non-controlling interest. The Group
can elect to initially measure the non-controlling interest in the acquiree either at fair value (full goodwill method)
or at the non-controlling interest’s proportionate share of the subsidiary’s identifiable net assets (proportionate
interest method). The Group determines which method to adopt for each acquisition based on the entitlement of
non-controlling interest to a proportionate share of the subsidiary net assets.
Under the full goodwill method, the fair values of the non-controlling interests are determined using valuation
techniques which make the maximum use of market information where available. Under this method, goodwill
attributable to the non-controlling interests is recognised in the consolidated financial statements.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is
included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group’s cash generating units or groups of cash
generating units, which represent the lowest level at which goodwill is monitored but where such level is not larger
than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill
related to the entity sold.
AMA GROUP LIMITED
ANNUAL REPORT 2015
37
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the
carrying values of goodwill.
Research and Development
Expenditure on research activities, undertaken with the prospect of obtaining new or scientific or technical
knowledge and understanding, is recognised in the Statement of Comprehensive Income as an expense when it is
incurred.
Expenditure on development activities, being the application of research findings or other knowledge to a plan or
design for the production of new or substantially improved products or services before the start of commercial
product or use, is capitalised only when technical feasibility studies identify that the product or service will deliver
future economic benefits and these benefits can be measured reliably. Expenditure on development activities have
a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful
economic life of the product or service.
Patents and trademarks
Patents and trademarks are recognised at the cost of acquisition. Patents and trademarks have a finite life and are
carried at cost less accumulated amortisation and any impairment losses. Patents and trademarks are amortised
over their estimated useful life of 5 years.
Customer contracts
Customer contracts are recognised at the fair value at acquisition. Customer contracts have a finite life and are
carried at cost less accumulated amortisation and any impairment losses. Customer contracts are amortised over
the lesser of the remainder of the contract or their estimated useful life relevant to each specific contract.
Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information. If such an
indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset,
being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any
excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive
income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. The amounts are unsecured and are usually paid within 30-45 days of recognition.
Other payables not due within a year are measured less cumulative amortisation calculated using the effective
interest method.
Onerous leases
Represents contracts entered into in which the unavoidable costs of meeting the obligations under the contract
exceed the economic benefits expected to be received under it. The excess of the lease obligations over the
expected economic benefits is expensed in the period that the contract becomes onerous. The liability represents
the present value of the minimum lease payments and is held on the statement of financial position until it is
extinguished.
Borrowings
Loans are carried at their principal amounts which represent the present value of future cash flows associated with
servicing debt. Interest is accrued over the period it becomes due and unpaid interest is recorded as part of
current payables.
Interest free loans are recorded at their fair value. Discounted cash flow models are used to determine the fair
values of the loans.
Finance costs
Finance costs are recognised as expenses in the period in which they are incurred. Finance costs include interest
on:
-
-
Short term and long term borrowings
Finance leases
AMA GROUP LIMITED
ANNUAL REPORT 2015
38
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Provisions
Provisions are recognised when the consolidated entity has a present obligation (legal or constructive) as a result
of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligation.
Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within
12 months of the end of the reporting period are recognised in other payables and provisions in respect of
employees' services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled.
Long service leave
The liability for long service leave is recognised in provisions and is measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date at present
value. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service.
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by
use of the Black Scholes option pricing model. The expected value used in the model is adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions, other risk factors and
behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-
line basis over the vesting period, based on the consolidated entity’s estimate of shares that will eventually vest.
For cash-settled share-based payments, a liability equal to the portion of the goods or services received is
recognised at the current fair value determined at the end of the reporting period.
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for
the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the Company, on or before the end of the financial year but not distributed at the end of the reporting
period.
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses and results in the
consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving
entities or businesses under common control. The acquisition method requires that for each business combination
one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will
be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the
parent entity. At this date, the parent recognises, in the consolidated accounts, and subject to certain limited
exceptions, the acquisition date fair value of the identifiable assets acquired and liabilities assumed. In addition,
contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair
value can be reliably measured.
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted
for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised
in the acquiree where less than 100% ownership interest is held in the acquiree.
AMA GROUP LIMITED
ANNUAL REPORT 2015
39
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date
fair value of any previously held equity interest shall form the cost of the investment in the separate financial
statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by
the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income.
Where changes in the value of such equity holdings had previously been recognised in other comprehensive
income, such amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a contingent
consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a
financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of
consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value
through the statement of comprehensive income unless the change in value can be identified as existing at
acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
comprehensive income.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of acquisition
of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the ATO is included in other receivables or other payables in the Statement of
Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the ATO, are presented as operating cash flows.
Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to
either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled,
between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine
fair value. In other circumstances, valuation techniques are adopted.
AMA GROUP LIMITED
ANNUAL REPORT 2015
40
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Amortised cost is calculated as:
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
a.
b.
c. plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised
and the maturity amount calculated using the effective interest method; and
less any reduction for impairment.
d.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees,
transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably
predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or
financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value
with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to
the requirements of accounting standards specifically applicable to financial instruments.
i. Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as
such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets
is managed by key management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently measured at fair value with changes in
carrying value being included in profit or loss.
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within
12 months after reporting date. (All other loans and receivables are classified as non-current assets.)
iii. Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Group’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those that are expected to mature
within 12 months after reporting date, which are classified as current assets.
If during the period the Group sold or reclassified more than an insignificant amount of the held-to-maturity
investments before maturity, the entire held-to-maturity investments category would be tainted and
reclassified as available-for-sale.
iv. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed maturity
nor fixed or determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those that are expected to be
disposed of within 12 months after reporting date, which are classified as current assets.
v. Financial liabilities
All non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost except for the interest free loan, which was designated as a financial liability at fair value through profit
or loss. This is because the interest free loan:
(a) contains an embedded derivative in the form of a put option; and
(b) the embedded derivative has the potential to significantly modify the cash flows that otherwise would be
required by the loan contract by permitting the entity to put the loan back to the lender at a significant
discount to the original loan amount.
AMA GROUP LIMITED
ANNUAL REPORT 2015
41
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted financial instruments, including recent arm’s length transactions, reference
to similar instruments and option pricing models.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the
value of the instrument is considered to determine whether impairment has arisen. Impairment losses are
recognised in the statement of comprehensive income.
Financial guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial
liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount
initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue.
Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow
approach. The probability has been based on:
— the likelihood of the guaranteed party defaulting in a year period;
— the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting;
and
— the maximum loss exposed if the guaranteed party were to default.
De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are
discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies
items in its financial statements, a statement of financial position as at the beginning of the earliest comparative
period will be disclosed.
Non-current assets held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee benefits, financial assets and investment property that are
carried at fair value and contractual rights under insurance contracts, which are specially exempt from this
requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset
(or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date
of de-recognition.
AMA GROUP LIMITED
ANNUAL REPORT 2015
42
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group
classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the statement of financial position. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the statement of financial position.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-
ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively
with a view to resale. The results of discontinued operations are presented separately in the Statement of
Comprehensive Income.
Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the 'rounding-off' of amounts in the financial statements. Amounts in the financial
statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in
certain cases, the nearest dollar.
Note 2.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the consolidated entity and that are
believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The consolidated entity makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equate with the related actual results. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
Impairment of Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to
which goodwill has been allocated. The value in use calculation requires the consolidated entity to estimate the
future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate
present value. Refer to note 12 for details of key assumptions used to calculate the recoverable amount of
goodwill.
Critical judgements in applying the consolidated entity's accounting policies
We have applied a discount factor on the vendor payables to determine the amortised cost. We have applied a
discount factor and a probability factor on the earn-out components to determine the fair value. The interest
expense and the fair value adjustment have been taken to the Statement of Comprehensive Income.
The carrying value of the deferred vendor payables, including earn-outs incorporate a number of assumptions.
Refer to note 15 for further details.
Note 3.
Segment information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Chief Executive Officer (chief operating decision maker) in assessing performance and determining the allocation of
resources.
The Group is managed primarily on the basis of product category and service offerings since the diversifications of
the Group’s operations inherently have notably different risk profiles and performance assessment criteria.
Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered
to have similar economic characteristics with respect to the products sold and/or services provided by the segment.
AMA GROUP LIMITED
ANNUAL REPORT 2015
43
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Services Provided by Segments
• Vehicle Protection Products & Accessories – Manufacture & distribution of motor vehicle protective bars.
• Vehicle Panel Repair – Motor vehicle panel repairs.
• Automotive Electrical & Cable Accessories – Distribution of motor vehicle electrical & cable accessories.
• Automotive Component Remanufacturing – Motor vehicle component remanufacturing & repairs.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Chief Executive Officer as the chief decision maker with
respect to operating segments are determined in accordance with the Group’s accounting policies.
The gross margin of the panel repair segment, as presented to the Chief Executive Officer, does not include direct
labour costs or an allocation of overheads.
Inter-segment transactions
All inter-segment transactions are eliminated on consolidation for the Group’s financial statements.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority
of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis
of their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole
and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments, other than
for direct labour for panel segment, as they are not considered part of the core operations of any segment:
•
•
•
•
•
•
•
•
•
•
derivatives;
impairment of assets and other non-recurring items of revenue or expense;
income tax expense;
deferred tax assets and liabilities;
other financial liabilities;
fixed manufacturing & service costs and other cost of sales adjustments;
finance costs;
dividend payments;
intangible assets; and
discontinued operations.
Business segments
30 June 2015
Revenue
External Sales
Other Income
Total Sales & Other Income
Unallocated Revenue
Total Revenue
Result
Segment Gross Margin
Unallocated Expenses
Vehicle
Panel
Repair
$'000
Vehicle
Protection
Products &
Accessories
$'000
Automotive
Electrical &
Cable
Accessories
$'000
Automotive
Component
Remanufacturing
Total
$'000
$'000
42,465
2
42,467
26,766
933
27,699
16,812
132
16,944
9,022
344
9,366
26,171
11,527
5,538
3,777
95,065
1,411
96,476
(702)
95,774
47,063
(34,220)
12,843
Profit from continuing operations before impairment and fair value adjustments
(191)
Fair value adjustments
Profit from continuing operations before income tax expense
12,652
Note: Panel Repair Gross Margin does not include direct labour or an allocation for overheads. These costs are allocated to unallocated expenses.
AMA GROUP LIMITED
ANNUAL REPORT 2015
44
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
30 June 2015
Other
Vehicle
Panel
Repair
$'000
Vehicle
Protection
Products &
Accessories
$'000
Automotive
Electrical &
Cable
Accessories
$'000
Automotive
Component
Remanufacturing
Total
$'000
$'000
Acquisition of Non-Current Segment Assets
Unallocated
1,799
397
171
Depreciation and Amortisation of Segment
Assets
Unallocated
855
257
119
Other Non-Cash Segment Expenses
-
-
-
58
83
-
2,425
1
2,426
1,314
-
1,314
-
30 June 2015
Assets
Segment Assets
Unallocated Assets
Total Assets
Liabilities
Segment Liabilities
Unallocated Liabilities
Total Liabilities
Vehicle
Panel
Repair
$'000
Vehicle
Protection
Products &
Accessories
$'000
Automotive
Electrical &
Cable
Accessories
$'000
Automotive
Component
Remanufacturing
Total
$'000
$'000
13,795
13,542
6,497
2,912
7,587
2,922
1,642
1,496
36,746
46,442
83,188
13,647
21,171
34,818
Geographical segments:
The group only operates within one geographical area, Australia.
30 June 2014
Revenue
External Sales
Other Income
Total Sales & Other Income
Unallocated Revenue
Total Revenue
Result
Segment Gross Margin
Unallocated Expenses
Vehicle
Panel
Repair
$'000
Vehicle
Protection
Products &
Accessories
$'000
Automotive
Electrical &
Cable
Accessories
$'000
Automotive
Component
Remanufacturing
Total
$'000
$'000
14,467
31
14,498
23,808
923
24,731
17,725
230
17,955
7,477
306
7,783
8,469
11,508
6,625
2,703
63,477
1,490
64,967
(708)
64,259
29,305
(20,561)
8,744
(38)
8,706
Profit from continuing operations before impairment and fair value adjustments
Fair value adjustments
Profit from continuing operations before income tax expense
Note: Panel Repair Gross Margin does not include direct labour or an allocation for overheads. These costs are allocated to unallocated expenses.
30 June 2014
Other
Acquisition of Non-Current Segment Assets
Unallocated
Depreciation and Amortisation of Segment
Assets
Unallocated
Other Non-Cash Segment Expenses
Vehicle
Panel
Repair
$'000
Vehicle
Protection
Products &
Accessories
$'000
Automotive
Electrical &
Cable
Accessories
$'000
Automotive
Component
Remanufacturing
Total
$'000
$'000
6
16
203
175
89
-
184
116
87
-
400
-
400
476
3
479
-
AMA GROUP LIMITED
ANNUAL REPORT 2015
45
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
30 June 2014
Assets
Segment Assets
Unallocated Assets
Total Assets
Liabilities
Segment Liabilities
Unallocated Liabilities
Total Liabilities
Vehicle
Panel
Repair
$'000
Vehicle
Protection
Products &
Accessories
$'000
Automotive
Electrical &
Cable
Accessories
$'000
Automotive
Component
Remanufacturing
Total
$'000
$'000
2,937
14,833
6,236
2,413
2,084
3,220
1,637
1,122
26,419
29,629
56,048
8,063
3,357
11,420
Geographical segments:
The group only operates within one geographical area, Australia.
Major customers
The Group has a number of customers to whom it provides both products and services. The Group supplies a
single external customer in the vehicle panel repair segment who accounts for 20.8% of external revenue (2014:
11.1%). The next most significant client accounts for 4.5% (2014: 3.3%) of external revenue.
Note 4.
Revenue
From Continuing Operations
Sales Revenue
Sale of goods
Service and hire
Other Revenue
Interest Received
Other Revenue
Note
30 June 2015
$'000
30 June 2014
$'000
51,896
42,466
94,362
4
1,408
1,412
48,224
14,467
62,691
164
1,404
1,568
Revenue from Continuing Operations excluding fair value
adjustments
95,774
64,259
Note 5.
Expenses from continuing operations
Profit before income tax includes the following specific expenses:
Raw materials and consumables used
41,944
29,441
30 June 2015
$'000
30 June 2014
$'000
Finance costs
Interest and finance charges paid/payable
Rental expense relating to operating leases
Minimum lease payments
Defined contribution superannuation expense
Bad debts expense
Stock obsolescence expense
Loss/(Profit) on disposal of assets
253
94
4,146
2,325
20
20
25
2,319
1,354
48
212
(14)
AMA GROUP LIMITED
ANNUAL REPORT 2015
46
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 6.
Income tax expense
30 June 2015 30 June 2014
Note
$'000
$'000
Income tax expense
Deferred tax
Current year tax instalments paid during the year
Other
(Over)/Under provision in respect of prior year
Current tax payable
Aggregate income tax expense
Deferred income tax expense included in income tax expense comprises:
13
Decrease/(increase) in deferred tax assets
17
(Decrease)/increase in deferred tax liabilities
Numerical reconciliation of income tax expense to prima facie tax payable:
Profit before income tax (expense)/benefit
Tax at the Australian tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in
calculating taxable income:
Other non-deductible items
Recoupment of capital losses not previously brought to account
Adjustment to losses on debt forgiveness
(Over)/Under provision in respect of prior year
Income tax expense
Income tax expense attributable to continuing operations
Income tax expense attributable to discontinued operations
Income tax expense
32c
389
2,218
24
(18)
949
3,562
(127)
516
389
12,652
3,796
182
(398)
-
(18)
3,562
3,562
-
3,562
245
932
11
(142)
1,830
2,876
2,337
(2,092)
245
8,531
2,559
94
11
354
(142)
2,876
2,830
46
2,876
The applicable weighted average effective tax rates are as follows:
28.2%
33.7%
The consolidated entity is part of a tax consolidation group.
See the income tax accounting policy in note 1.
Note 7.
Cash and cash equivalents
Cash on hand
Cash at bank
30 June 2015
$'000
30 June 2014
$'000
10
2,187
2,197
8
2,090
2,098
Cash at the end of the period as shown in the Statement of Cash Flows is reconciled to the Statement of Financial
Position as follows:
Balances as above
Balance as per statement of cash flows
30 June 2015
$'000
30 June 2014
$'000
2,197
2,197
2,098
2,098
AMA GROUP LIMITED
ANNUAL REPORT 2015
47
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 8.
Trade and other receivables
Current
Trade receivables
Less provision for impairment of receivables
Other receivables
30 June 2015
$'000
30 June 2014
$'000
8,542
(50)
8,492
3,191
11,683
7,508
(93)
7,415
1,157
8,572
There were no non-current trade or other receivables in either reported year.
Bad and doubtful trade receivables
The consolidated entity has recognised a provision of $50,000 (2014: $93,000) in respect of bad and doubtful
trade receivables during the year ended 30 June 2015.
Impairment of receivables
The ageing of the provision for impairment of trade receivables recognised above is as follows:
3 to 6 months
Over 6 months
30 June 2015
$'000
30 June 2014
$'000
50
-
50
93
-
93
Movements in the provision for impairment of trade receivables are as follows:
Opening balance
Business acquisition
Additional provisions recognised/(released)
Receivables written off/(back-in) during the year as uncollectible
Closing balance
30 June 2015
$'000
30 June 2014
$'000
93
22
(140)
74
50
53
-
32
8
93
Past due but not impaired
Customers with balances past due but without provision for doubtful debts amount to $266,000 at 30 June 2015
(2014: $334,000). Management did not consider a credit risk on the aggregate balances after reviewing agency
credit information and recognising a tacit extension to the recorded credit terms of customers based on recent
collection practices.
The balances of receivables that remain within initial trade terms (as detailed in table) are considered to be of
high credit quality.
The ageing of the past due but not impaired receivables shown below:
1 to 3 months
3 to 6 months
Over 6 months
Closing balance
30 June 2015
$'000
30 June 2014
$'000
266
-
-
266
334
-
-
334
AMA GROUP LIMITED
ANNUAL REPORT 2015
48
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 9.
Inventories
Raw materials
Work in progress
Finished goods
All amounts are shown at the lower of cost or net realisable value
Note 10. Other assets
Current
Prepayments
Non-Current
Prepayments
Note 11. Property, plant and equipment
Leasehold improvements - at cost
less accumulated amortisation
Plant & equipment - at cost
less accumulated depreciation
Furniture & equipment - at cost
less accumulated depreciation
Motor vehicles - at cost
less accumulated depreciation
30 June 2015
$'000
30 June 2014
$'000
873
1,062
6,017
7,952
672
402
5,521
6,595
30 June 2015
$'000
30 June 2014
$'000
1,048
1,048
1,957
1,957
1,121
1,121
2,509
2,509
30 June 2015
$'000
30 June 2014
$'000
1,983
(283)
1,700
9,053
(3,604)
5,449
1,156
(585)
571
868
(490)
378
8,098
639
(108)
531
4,300
(2,406)
1,894
849
(641)
208
453
(309)
144
2,777
Reconciliations
Reconciliations of the fair values at the beginning and end of the current and previous financial year are set out
below:
Leasehold
improvements
Plant &
Equipment
Furniture
&
Equipment
Motor
vehicles
Total
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2013
Additions
Business acquisition
Disposals
Depreciation expense
Balance at 30 June 2014
185
63
319
-
(36)
531
1,137
238
872
(1)
(352)
1,894
179
11
46
-
(28)
208
60
13
133
(16)
(46)
144
1,561
325
1,370
(17)
(462)
2,777
AMA GROUP LIMITED
ANNUAL REPORT 2015
49
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Leasehold
improvements
Plant &
Equipment
Furniture
&
Equipment
Motor
vehicles
Total
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2014
Additions
Business acquisitions
Disposals
Depreciation expense
Balance at 30 June 2015
531
657
629
-
(117)
1,700
1,894
1,425
2,881
(110)
(641)
5,449
208
238
296
(26)
(145)
571
144
84
293
(76)
(67)
378
2,777
2,404
4,099
(212)
(970)
8,098
Note 12. Intangible assets
Goodwill - at cost
Less impairment
Patents & Trademarks
Less amortisation
Customer contracts
Less amortisation
30 June 2015
$'000
30 June 2014
$'000
71,584
(23,828)
47,756
131
(48)
83
1,048
(316)
732
48,571
54,762
(23,828)
30,934
99
(20)
79
-
-
-
31,013
Reconciliations
Reconciliations of the carrying amounts at the beginning and end of the current and previous financial year are set
out below:
Goodwill
$'000
Patents &
Trademarks
$’000
Customer
Contracts
$’000
Total
$,000
Balance at 1 July 2013
Additions
Amortisation expense
Balance at 30 June 2014
Additions and adjustment
Acquired
Amortisation expense
Balance at 30 June 2015
27,250
3,684
-
30,934
16,822
-
-
47,756
21
75
(17)
79
11
21
(28)
83
-
-
-
-
-
1,048
(316)
732
27,271
3,759
(17)
31,013
16,833
1,069
(344)
48,571
Goodwill is allocated to cash-generating units (CGU) which are based on the consolidated entity’s operating
segments as per the table on the following page:
Vehicle Protection Products & Accessories
Vehicle Panel Repair
Automotive Electrical & Cable Accessories
Automotive Component Remanufacturing
30 June 2015
$'000
30 June 2014
$'000
11,514
27,067
7,349
1,826
47,756
11,563
10,196
7,349
1,826
30,934
The recoverable amount of the consolidated entity’s goodwill has been determined by a value-in-use calculation
using a discounted cash flow model, based on 5-year cash projection budgets approved by the Board, using the
key assumptions detailed on the next page:
AMA GROUP LIMITED
ANNUAL REPORT 2015
50
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Automotive Electrical &
Cable Accessories
Automotive Component
Remanufacturing
Vehicle
Protection
Products &
Accessories
Vehicle Panel
Repair
Motor Vehicle
Accessory
Distribution
Cable &
Accessory
Distribution
Motor Vehicle
Transmission
Repair
All Other
Segments
Growth Rate %
Pre-tax discount rate %
0
8.22
0
8.22
0
8.97
0
9.72
0
9.47
0
11.22
The value in use calculations use historical weighted average growth rates to project revenue & costs and
management’s best estimates of what it believes will occur in future years. Due to the current effects of the
economic environment on the automotive industry, the Company has adopted a conservative approach and used
growth rates of 0%.
The discount rates of 8.22% to 11.22% pre-tax reflect management’s estimate of the time value of money and the
consolidated entity’s weighted average cost of capital adjusted for additional risk factors associated with each
segment.
Impact of possible changes in key assumptions
Vehicle Protection Products & Accessories Segment
If the base EBIT used in the value-in-use calculation for this CGU had decreased by 10% and then remained
constant with no further growth applied, the group would not be required to recognise any further impairment of
goodwill in relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than management’s estimates (9.22%
instead of 8.22%), the group would not be required to recognise any further impairment of goodwill in relation to
this CGU.
Vehicle Panel Repair Segment
If the base EBIT used in the value-in-use calculation for this CGU had decreased by 10% and then remained
constant with no further growth applied, the group would not be required to recognise any further impairment of
goodwill in relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than management’s estimates (9.22%
instead of 8.22%), the group would not be required to recognise any further impairment of goodwill in relation to
this CGU.
Automotive Electrical & Cable Accessories Segment – Motor Vehicle Accessory Distribution
If the base EBIT used in the value-in-use calculation for this CGU had decreased by 10% and then remained
constant with no further growth applied, the group would be required to recognise an impairment of goodwill of
$714,631 (2014: $112,770) in relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than management’s estimates (9.97%
instead of 8.97%), the group would be required to recognise an impairment of goodwill of $725,706 (2014:
$27,272) in relation to this CGU.
Automotive Electrical & Cable Accessories Segment – Cable & Accessory Distribution
If the base EBIT used in the value-in-use calculation for this CGU had decreased by 10% and then remained
constant with no further growth applied, the group would not be required to recognise an impairment of goodwill in
relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than management’s estimates (10.72%
instead of 9.72), the group would not be required to recognise an impairment of goodwill in relation to this CGU.
Automotive Component Remanufacturing Segment – Motor Vehicle Transmission Repair
If the base EBIT used in the value-in-use calculation for this CGU had decreased by 10% and then remained
constant with no further growth applied, the group would not be required to recognise any further impairment of
goodwill in relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than management’s estimates (10.47%
instead of 9.47%), the group would not be required to recognise any further impairment of goodwill in relation to
this CGU.
AMA GROUP LIMITED
ANNUAL REPORT 2015
51
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Automotive Component Remanufacturing Segment – All Other Segments
If the base EBIT used in the value-in-use calculation for this CGU had decreased by 10% and then remained
constant with no further growth applied, the group would not be required to recognise any further impairment of
goodwill in relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than management’s estimates (12.22%
instead of 11.22%), the group would not be required to recognise any further impairment of goodwill in relation to
this CGU.
Note 13. Deferred tax asset
The balance comprises temporary differences attributable to:
Amounts recognised in the statement of comprehensive income:
Doubtful debts
Employee benefits
Accrued expenses
Inventory
Other (S40-880)
Legal fees
Amounts recognised in equity:
Transaction costs on share issue
Deferred tax asset
30 June 2015
$'000
30 June 2014
$'000
15
1,315
107
130
46
1
1,614
68
68
1,682
28
879
129
138
16
3
1,193
170
170
1,363
At 30 June 2015 the consolidated entity has no un-recouped revenue losses. (2014: nil).
At 30 June 2015, the consolidated entity has estimated un-recouped capital losses of $3,747,900 (2014:
$5,072,900) none of which have been brought to account as a deferred tax asset.
The benefit of these losses will only be obtained if:
(i) The companies derive future assessable income of a nature and an amount sufficient to enable the benefits
from the deductions for the losses to be realised.
(ii) The companies continue to comply with the conditions for deductibility imposed by the law.
(iii) No changes in tax legislation adversely affect the companies in realising the benefit from the deductions for
the losses.
Note 14. Trade and other payables
Current
Trade payables
Deferred consideration - key vendors
Other payables
Non-current
Deferred consideration - key vendors
Note
30 June 2015
$'000
30 June 2014
$'000
14a
14a
7,266
323
3,113
10,702
9,931
9,931
4,304
196
2,006
6,506
-
-
a) The Company has deferred and contingent consideration to Key Vendors for $11,078,456 (2014: $196,250)
which, as per the relevant business purchase agreement includes amounts for performance based earn-outs
to be paid in a mixture of shares and cash. The present value of the liability is $10,453,714 (2014:
$196,250). Refer to note 20 for further information on how fair value has been determined for contingent
consideration.
AMA GROUP LIMITED
ANNUAL REPORT 2015
52
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 15. Borrowings
Current
Bank bills commercial loan
Lease liability
Non-current
Bank bills commercial loan
Lease liability
30 June 2015
$'000
30 June 2014
$'000
7,777
553
8,330
-
11
11
-
5
5
-
16
16
During the current financial year, the Company negotiated two further extensions of the commercial loan facility.
The current facility allows the company to draw-down up to $12m on an interest only basis until 31 December
2015 at which point the facility reduces to $10m through to 24 November 2016.
The amount outstanding at 30 June 2015 is reflected as a current liability because it was fully repaid on
6 July 2015.
The commercial facility includes the following covenants:-
-
-
-
provide copies of quarterly management financial reports
achievement of interest cover ratio targets
achievement of equity ratio targets
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank bills commercial loan
Lease liability
30 June 2015
$'000
30 June 2014
$'000
7,777
564
8,341
-
21
21
Assets pledged as security
The bank bills are secured by a fixed and floating charge over all of the assets and uncalled capital of AMA Group
Limited and all of its subsidiaries.
The lease liabilities were effectively secured as the rights to the leased assets recognised in the Statement of
Financial Position revert to the lessor in the event of default.
Financing arrangements
Unrestricted access was available at the end of the reporting period to the following lines of credit:
Bank bills commercial loan facility
Used at balance date
30 June 2015
$'000
30 June 2014
$'000
12,000
7,777
-
-
AMA GROUP LIMITED
ANNUAL REPORT 2015
53
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 16. Provisions
Current
Annual leave
Long service leave
Dividends
Non-current
Long service leave
30 June 2015
$'000
30 June 2014
$'000
2,070
1,592
119
3,781
251
251
1,439
974
69
2,482
235
235
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out
below:
Carrying amount at beginning of year
Arising during the year
Utilised
Carrying amount at end of year
Dividends
69
50
-
119
Total
69
50
-
119
Amounts not expected to be settled within the next 12 months
The current provision for annual leave is presented as current, since the consolidated entity does not have an
unconditional right to defer settlement. However, based on past experience, the consolidated entity does not
expect all employees to take the full amount of accrued leave within the next 12 months.
The current provision for long service leave includes all unconditional entitlements where employees have
completed the required period of service and also those where employees are entitled to pro-rata payments in
certain circumstances. The entire amount is presented as current, since the consolidated entity does not have an
unconditional right to defer settlement. However, based on past experience, the consolidated entity does not
expect all employees to take the full amount of accrued long service leave or require payment within the next 12
months.
The following amounts reflect leave that is classified as a current liability but is not expected to be taken within the
next 12 months:
Annual leave obligation expected to be settled after 12 months
Long service leave obligation to be settled after 12 months
Note 17. Deferred tax liability
Note
30 June 2015
$'000
30 June 2014
$'000
1,061
722
1,783
529
554
1,083
The balance comprises temporary differences attributable to:
Amounts recognised in statement of comprehensive income:
Sundry debtors
Sundry items
Deferred tax liability
30 June 2015
$'000
30 June 2014
$'000
843
19
862
330
16
346
AMA GROUP LIMITED
ANNUAL REPORT 2015
54
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 18. Equity - issued capital & to be issued
Note
30 June 2015
Shares
30 June 2014
Shares
30 June 2015 30 June 2014
$'000
$'000
Ordinary Shares - fully paid
18a
334,250,963
334,250,963
334,250,963
334,250,963
74,904
74,904
74,904
74,904
18a) Movements in ordinary share capital
Details
Date
Qty of Shares
Issue price
Opening Balance 1 July 2013
331,438,776
Shares issued to employees
Shares issued to employees
23/08/2013
16/10/2013
798,910
2,013,277
$0.3142
$0.3390
Closing Balance at 30 June 2014
334,250,963
No shares were issued during the year
Closing Balance at 30 June 2015
334,250,963
$'000
73,971
251
682
74,904
74,904
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy is entitled to one vote and, upon a poll, each share is entitled to
one vote.
Note 19. Equity - dividends
On 29 August 2014 the Company declared a dividend (fully franked at 30%) and $5.316 million was paid on 3
December 2014. (2014: On 17 September 2013 the Company declared a dividend (95% franked at 30%) and
$5.316 million was paid on 7 November 2013)
30 June 2015
$'000
30 June 2014
$'000
Franking credits available for subsequent financial years based on tax
rate of 30%
1,832
93
The aforementioned amounts represent the balance of the franking account as at the end of the reporting period,
adjusted for:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax
franking credits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Note 20. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk, and liquidity risk. The consolidated entity's overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the financial performance of the consolidated entity. The consolidated entity uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of
interest rate risk and ageing analysis for credit risk.
Risk management is carried out by senior management under policies approved by the board of directors.
Management identifies, evaluates and mitigates financial risks within the consolidated entity's operating units.
Market risk
Foreign currency risk
The consolidated entity continues to make purchases in US Dollars and therefore is exposed to foreign currency
risk through foreign exchange rate fluctuations.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial
liabilities at the end of the reporting period were as per the table on the following page:
AMA GROUP LIMITED
ANNUAL REPORT 2015
55
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Consolidated
US Dollar
Assets
Liabilities
30 June 2015
$'000
30 June 2014
$'000
30 June 2015
$'000
30 June 2014
$'000
-
-
-
-
393
393
209
209
The consolidated entity had liabilities denominated in US Dollars of AUD $393,000 as at 30 June 2015 (2014: AUD
$209,000). Based on this exposure, had the Australian Dollar weakened/strengthened by 10% against the US
Dollar with all other variables held constant, the consolidated entity's result for the year and equity would have
been $36,000 higher/lower.
There were no assets or liabilities denominated in any other foreign currencies, other than US Dollars as at 30 June
2015 or as at 30 June 2014.
The foreign exchange (loss)/gain for the year ended 30 June 2015 was ($3,000) (2014: $76,000 gain).
The consolidated entity does not employ foreign currency hedges and has no official foreign currency policy. If the
transactional value, net asset position and overall exposure were to increase it is likely that a policy will be adopted
to mitigate risk.
Price risk
The consolidated entity and parent entity are not exposed to any significant price risk.
Interest rate risk
The consolidated entity and parent entity's main interest rate risk arises from short and long-term borrowings. All
borrowings are issued at variable rates and this exposes the consolidated entity and parent entity to interest rate
risk. The consolidated entity and parent entity attempt to mitigate this interest rate risk exposure by maintaining
an adequate interest cover ratio and gearing ratio that ensures financing costs are not significant costs.
The consolidated entity had bank bills outstanding as at 30 June 2015 of $7,777,000 (2014: $Nil). The
consolidated entity has a commercial loan facility, now being interest only bank bills up to $12m. The consolidated
entity aims to minimise the finance costs by minimising the outstanding balance at all times.
Credit risk
Credit risk is managed on a consolidated entity basis. Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a
strict code of credit and obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to
credit risk, excluding the value of any collateral or other security, at the end of the reporting period to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
Statement of Financial Position and notes to the financial statements.
As at 30 June 2015 the consolidated entity had no significant concentration of credit risk.
Liquidity risk
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing
facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial
assets and liabilities.
The consolidated entity has a process of monitoring overall cash balances on a strategic long term basis and at an
operational level on a weekly basis. This is to ensure ongoing liquidity, prompt decision making and allow proactive
communication with its funders.
The consolidated entity’s current focus is to ensure it meets debt covenants, reduces debt, reduces costs and
focuses on its current operations in the automotive aftercare market.
Financing arrangements
On 29 August 2014 the Company extended the bank facility to allow the Company to draw-down up to $10m (an
extension of $2m) on normal commercial terms and on 23 December 2014 the Company further extended the
bank facility to allow the Company to draw-down up to $12m (an extension of $2m) on normal commercial terms
and this funding continues to be available to help fund earnings accretive acquisitions or other working capital
needs. During the 2015 financial year, the consolidated entity has met all of the obligations under the financing
arrangements.
AMA GROUP LIMITED
ANNUAL REPORT 2015
56
For personal use only
7,266
3,113
11,208
564
7,777
29,928
Total
contractual
maturities
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instruments. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the consolidated entity can be required to pay. The tables include both interest and principal cash flows,
disclosed as remaining contractual maturities and these totals differ from their carrying amount in the statement of
financial position for interest-bearing liabilities due to the interest component.
2015
Weighted
average
interest
rate
%
1 year or
less
Over 1 to 2
years
Over 2 to 5
years
Over 5
years
Total
contractual
maturities
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Deferred cash
consideration
Interest bearing - variable rate
Lease liability
Bank bills commercial loan
Total non-derivatives
6.76%
4.67%
7,266
3,113
330
553
11,262
10,878
10,878
11
7,777
7,788
2014
Weighted
average
interest
rate
%
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Deferred cash
consideration
Interest bearing - variable rate
Lease liability
Bank bills commercial loan
Total non-derivatives
6.76%
Fair value of financial instruments
1 year or
less
Over 1 to 2
years
Over 2 to 5
years
Over 5
years
$'000
$'000
$'000
$'000
$'000
4,304
2,006
196
5
-
6,511
-
-
-
5
-
5
-
-
-
11
-
11
-
-
-
-
-
-
4,304
2,006
196
21
-
6,527
The carrying amounts of financial instruments reflect their fair value.
The financial instruments recognised at fair value in the statement of financial position have been analysed and
classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements.
The fair value hierarchy consists of the following levels:
• quoted prices in active markets for identical assets or liabilities (Level 1);
•
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
•
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
2015
Financial Liabilities
Vendor loan
2014
Financial Liabilities
Vendor loan
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
-
10,454
10,454
10,454
10,454
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
196
196
-
-
196
196
AMA GROUP LIMITED
ANNUAL REPORT 2015
57
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
The fair value of the vendor loans included in Level 2 of the hierarchy has been determined using valuation
techniques incorporating observable direct and indirect market data relevant to the Company.
The fair value of the interest free loan included in Level 3 of the hierarchy has been determined using valuation
techniques incorporating observable direct and indirect market data relevant to the Company and an estimation of
the probability on paying the full amount of the calculate deferred settlements and earn-outs arising during the
year.
Level 3 items are reconciled below
Carrying amount at beginning of year
Arising during the year
Fair Value adjustment
Repaid 6 August 2013
Carrying amount at end of year
30 June 2015
$'000
30 June 2014
$'000
-
9,307
(856)
-
8,451
5,436
-
(5,436)
-
On 1 July 2014 the parent entity acquired RMA. In acquiring RMA, the Group incurred a contingent consideration
liability consisting of an obligation to provide shares in the parent entity and make an additional cash payment to
the vendor if the average profits of RMA for the 2015 to 2017 financial years exceed a pre-specified target level.
The fair value of the contingent consideration (2015: $6,030,697) is measured using a discounted cash flow
methodology and determined on the basis of the possible average profit figures of the subsidiary, weighted by the
probability of each scenario. The discount rate used is based on the Group’s weighted average cost of capital.
On 1 February 2015 the parent entity acquired BMB Prestige Collision Repairs & Browns Motors. In acquiring these
operations, the Group incurred a contingent consideration liability consisting of an obligation to provide shares in
the parent entity and make an additional cash payment to the vendor if the average profits of BMB Prestige
Collision Repairs & Browns Motors for the 36 months following acquisition exceed a pre-specified target level. The
fair value of the contingent consideration (2015: $3,276,305) is measured using a discounted cash flow
methodology and determined on the basis of the possible average profit figures of the subsidiary, weighted by the
probability of each scenario. The discount rate used is based on the Group’s cost of debt.
The following table provides quantitative information regarding the significant unobservable inputs, the ranges of
those inputs and the relationships of unobservable inputs to the fair value measurement:
Significant Unobservable Inputs Used
Range of Unobservable
Inputs Used
Estimated Sensitivity of Fair Value Measurement to
Changes in Unobservable Inputs
Anticipated annual growth rate in RMA profits
– 17.5% in 2016 and 7% in 2017
Anticipated annual growth rate in BMB profits
– 5%
16.5%– 18.5%
& 6% - 8%
4%– 6%
Discount rate (risk adjusted) –4.67%
4.57%– 4.77%
If expected annual growth rate is 1% higher/lower, the
fair value would increase/decrease by $Nil/$49,451
If expected annual growth rate is 1% higher/lower, the
fair value would increase/decrease by $37,947/$37,703
If discount rate is 0.1% (10 bps) higher/lower, the fair
value of the total deferred consideration would decrease/
increase by $20,237/$20,302
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimum
capital structure to reduce the cost of capital.
The consolidated entity’s capital includes ordinary share capital, a bank bills loan facility, vendor loans and lease
liabilities supported by financial assets. There are no externally imposed capital requirements.
Borrowings
Interest free vendor loans
Less: Cash & cash equivalents
Net (cash) / debt
Note
15
14a
7
30 June 2015
$'000
30 June 2014
$'000
8,341
10,454
(2,197)
16,598
21
196
(2,098)
(1,881)
AMA GROUP LIMITED
ANNUAL REPORT 2015
58
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Ordinary Shares (market price)
Total capital
Gearing ratio
200,551
217,148
8%
95,262
93,381
-
Ordinary share value calculated using closing share prices as at 30 June each year.
The consolidated entity may issue new shares or sell assets to either reduce debt or to invest in income producing
assets. This is decided on the basis of maximising shareholder returns over the long term.
Note 21. Key management personnel disclosures
Directors
The following persons were directors of AMA Group Limited during the financial year:
Ray Malone
Simon Doyle
Ray Smith-Roberts
Hugh Robertson
Duncan Fischer
Executive Chairman* and Chief Executive Officer
Non-Executive Director
Chief Operating Officer and Executive Director (appointed 28 February 2014)**
Non-Executive Director***
Non-Executive Chairman****
*Appointed as Executive Chairman 11 March 2015
**Prior to his appointment to the board, Ray Smith-Roberts was already the Chief Operating Officer of AMA Group Limited
***Appointed 2 June 2015
****Retired 11 March 2015
Other key management personnel
There are no other persons who also had authority and responsibility for planning, directing and controlling the
activities of the consolidated entity, directly or indirectly, during the financial year:
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term
benefits
Long-term
benefits
Post
employment
benefits
Share based
payments
$'000
$'000
$'000
$'000
2015 Aggregate
2014 Aggregate
1,496
1,444
15
17
82
59
136
136
Total
$'000
1,729
1,656
Shareholdings
The number of shares in the parent entity held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
2015
Balance as at
1 July 2014
Received as
remuneration
Received
during the
year on the
exercise of
options
Other
changes
Balance as at
30 June 2015
Duncan Fischer*
Simon Doyle
Ray Malone
Ray Smith-Roberts
Hugh Robertson**
9,133,334
4,161,470
80,417,619
8,167,746
101,880,169
-
-
-
-
-
-
-
-
-
-
-
-
(9,133,334)
-
-
-
230,000
(8,903,334)
-
4,161,470
80,417,619
8,167,746
230,000
92,976,835
* Retired 11 March 2015 (Balance at date of retirement removed from list)
** Appointed 2 June 2015 (Initial holdings at appointment date)
AMA GROUP LIMITED
ANNUAL REPORT 2015
59
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
2014
Balance as at
1 July 2013
Received as
remuneration
Received
during the
year on the
exercise of
options
Other
changes
Balance as at
30 June 2014
Duncan Fischer
Simon Doyle
Ray Malone
Ray Smith-Roberts
9,133,334
4,062,899
79,417,619
7,687,415
100,301,267
-
-
-
586,062
586,062
-
-
-
-
-
9,133,334
-
4,161,470
98,571
80,417,619
1,000,000
8,167,746
(105,731)
992,840 101,880,169
Options holding
None of the directors or other members of Key Management Personnel of the consolidated entity, including their
personally related parties, held any options over ordinary shares in the parent entity.
Further disclosures
The consolidated entity has applied the relief outlined in AASB 2008-4, by disclosing the full key management
personnel disclosures in the directors' report only, thus not duplicating that information in the financial report.
These transferred disclosures have been audited.
Note 22. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the Company’s auditors or its
related practices:
Audit or review of the financial reports – Shine Wing Australia
Note 23. Contingent liabilities
30 June 2015
$'000
30 June 2014
$'000
215
215
190
190
Unsecured guarantees, indemnities and undertakings have been given by the parent entity in the normal course of
business in respect of financial trade arrangements entered into by its discontinuing subsidiaries and a Deed of
Cross Guarantee (note 34) was entered into with its continuing subsidiaries during the financial year ended 30 June
2009. It is not practicable to ascertain or estimate the maximum amount for which the parent entity may become
liable in respect thereof. At 30 June 2015 no subsidiary was in default in respect of any arrangement guaranteed
by the parent entity and all amounts owed have been brought to account as liabilities in the financial statements.
Bank guarantees
30 June 2015
$'000
30 June 2014
$'000
649
649
326
326
AMA GROUP LIMITED
ANNUAL REPORT 2015
60
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 24. Commitments for expenditure
Note
30 June 2015
$'000
30 June 2014
$'000
Capital commitments - property, plant & equipment
Committed at the end of the reporting period but not
recognised as liabilities, payable:
Within one year
Lease commitments – operating
Committed at the end of the reporting period but not
recognised as liabilities, payable:
Within one year
One to five years
After more than five years
Lease commitments – finance
Committed at the end of the reporting period but not
recognised as liabilities, payable:
Within one year
One to five years
less future finance charges
Represented as:
Current commitment
Non-current commitment
15
15
-
-
-
-
4,497
5,275
785
10,557
2,484
3,220
1,017
6,721
553
11
564
-
564
553
11
564
5
16
21
-
21
5
16
21
Property leases periods 1 to 5 years (shown as operating leases) are non-cancellable with rent payable monthly in
advance. Contingent rental provisions within lease agreements generally require minimum lease payments be
increased by CPI or a percentage factor. Certain agreements have option arrangements to renew the lease for an
additional term and an option to purchase the premises at the market price at time of option exercise.
No operating leases have been recognised as onerous lease liabilities at 30 June 2015 nor at 30 June 2014.
Note 25. Related party transactions
Parent entity
The parent and ultimate holding entity is AMA Group Limited.
Subsidiaries
Interests in subsidiaries are set out in note 26.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 and the directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Payments were made during the year to the following director
related entities of Mr Ray Malone.
Silvan Bond Pty Ltd - Rental fees
Malone Superannuation Fund - Rental fees
Mr Gloss Pty Ltd - Vendor payments & incentives*
30 June 2015
$'000
30 June 2014
$'000
152
43
150
345
141
33
530
704
*$Nil (2014: $Nil) was paid and $Nil (2014: $Nil) was payable at the reporting date to a director related entity of Ray Malone for employee
incentive payments for Mr Gloss Holdings Pty Ltd (excluding any Key Management Personnel), a wholly owned subsidiary of AMA Group Limited.
During the 2014 year the amount of $70,100 previously reported as payable at 30 June 2013 was reversed as an agreed adjustment. $600,000 was
paid to Mr Gloss Pty Ltd during the 2014 year in satisfaction of the outstanding vendor loan liability.
AMA GROUP LIMITED
ANNUAL REPORT 2015
61
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Trade Receivable from and trade payable to related parties
There are no trade receivables from or trade payables to related parties at the end of the reporting period.
Loans to/from related parties
The following balances are outstanding at the end of the reporting period in relation to loans with related parties:
Loans from related parties:
Loan from Mr Gloss Pty Ltd
30 June 2015
$'000
30 June 2014
$'000
-
-
(150)
(150)
The loan from Mr Gloss Pty Ltd, a related entity to Mr Ray Malone, is the total value of outstanding vendor
payments payable to Mr Gloss Pty Ltd for the acquisition of the Mr Gloss panel beating business. Security for the
vendor loan is outlined at note 14a. The final repayment instalment of this loan was paid on 31 July 2014.
On 23 June 2015 the Company engaged the services of Wilson HTM Corporate Finance Limited to act as a joint
lead manager in the placement of 75,000,000 shares. Hugh Robertson is associated with this firm. The placement
was completed post year end with a fee payable to Wilson HTM Corporate Finance Limited.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates, except for loans to
subsidiaries which are non-interest bearing.
Note 26. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1:
Name of entity
Continuing Operations
Alanco Australia Pty Ltd
BMB Collision Repairs Pty Ltd
Custom Alloy Pty Ltd
ECB Pty Ltd
FluidDrive Holdings Pty Ltd
KT Cable Accessories Pty Ltd
Mr Gloss Holdings Pty Ltd
Perth Brake Parts Pty Ltd
Phil Munday’s Panel Works Pty Ltd
Repair Management Australia Pty Ltd
Repair Management Australia Bayswater Pty Ltd
Repair Management Australia Dandenong Pty Ltd
Shipstone Holdings Pty Ltd
Dis-continued Operations
Diesel Test Pty Ltd
Emission Services Pty Ltd
(a) Registered 12/12/2014
(b) Acquired 29/11/2013
(c) Acquired 01/07/2014
(d) De–registered 23/07/2014
Country of
incorporation
Equity holding
Note
2015
%
2014
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(a)
(b)
(c)
(c)
(c)
(c)
(a)
(d)
(d)
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
-
100
100
100
100
100
100
-
-
-
-
-
100
100
On 1 July 2014 AMA Group Limited acquired 100% of the ordinary shares of Phil Munday’s Panel Works Pty Ltd,
Repair Management Australia Pty Ltd, Repair Management Australia Bayswater Pty Ltd and Repair Management
Australia Dandenong Pty Ltd (collectively referred to as “RMA”) for the total consideration of $6,990,000 plus
conditional earn-outs which could total up to $6,000,000 in Shares in AMA Group Limited (valued at 30 day VWAP
immediately prior to 1 July 2014) plus up to $500,000 Supplementary Cash.
RMA consists of two rapid repair shops and two traditional shops, based in the outer Eastern suburbs of Melbourne,
Victoria. It has established two significant exclusive approved repairer contracts with RACV and does a lot of work
AMA GROUP LIMITED
ANNUAL REPORT 2015
62
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
for numerous other insurance companies. Geographically, it is complementary to our three Mr Gloss sites in
Eastern Melbourne and it was acquired to allow the group to increase its participation in the consolidation of the
panel industry and expand its presence in the rapid repair sector. We have already been able to obtain synergies
with our existing panel repair operations at Mr Gloss and have achieved significant efficiencies through knowledge
sharing and the implementation of improved control systems to increase customer satisfaction levels, productivity
and efficiency throughout all panel sites, and ultimately we have been able to boost profitability.
Following the acquisition we have now finalised all aspects of the acquisition fair value assessments and as such,
we have prepared this report using these amounts. The figures include the earn-out elements of the deferred
consideration valued at fair value using appropriate probability factors and discounting.
Details of the acquisition are as follows:-
Cash and cash equivalents
Trade receivables
Other current assets
Plant and equipment
Customer contracts
Other intangibles
Trade payables
Employee benefits
Other payroll related liabilities
Accrued expenses
Current tax payable
Other current liabilities
Net assets acquired
Goodwill
Acquisition-date value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Earn-Out Adjustment Shares
Earn-Out Supplementary Cash
Net Present Value Adjustments
Acquisition costs
$'000
(138)
473
71
2,009
1,048
21
(742)
(288)
(77)
(75)
(233)
(157)
1,912
10,921
12,833
6,990
6,000
500
(657)
12,833
129
Cash used to acquire business, net of cash acquired:
Acquisition-date value of the total consideration transferred
Add: net cash overdraft assumed
$’000
12,833
138
12,971
From the date of acquisition to 30 June 2015, RMA generated revenue of $18,527,667 and gross margin of
$12,338,568
On 1 January 2015 AMA Group Limited acquired the business assets of Shipstone Accident Repair Specialists for
the total consideration of $1,440,000.
Shipstone was founded by Col Shipstone in 1967 and is an award winning prestige accident repairer based in
Windsor on the north side of Brisbane with accreditation for Porsche, Audi, VW, Jaguar, Volvo, Infinity, Landrover &
Subaru. Shipstone also has strong relationships with a number of key insurers.
This acquisition is a strategic entry point into the Queensland panel repair market and the Shipstone business is
the considerable repair work that resulted from Brisbane’s recent hailstorm.
Following the acquisition we have now finalised all aspects of the acquisition fair value assessments and as such,
we have prepared this report using these amounts.
Details of the acquisition are as follows:-
Inventory – work in progress
Deferred tax assets
Other current assets
Plant and equipment
Employee benefits
Net assets acquired
Goodwill
Acquisition-date value of the total consideration transferred
$'000
5
51
115
374
(171)
374
1,066
1,440
AMA GROUP LIMITED
ANNUAL REPORT 2015
63
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Representing:
Cash paid or payable to vendor
1,440
Acquisition costs
Cash used to acquire business, net of cash acquired:
1,440
-
Acquisition-date value of the total consideration transferred
Add: net cash assumed
$’000
1,440
-
1,440
From the date of acquisition to 30 June 2015, Shipstone generated revenue of $3,435,543 and gross margin of
$1,716,233
On 1 February 2015 AMA Group Limited acquired the business assets of BMB Prestige Collision Repairs and Browns
Motors for the total consideration of $910,000 plus conditional earn-outs which could total up to $1,999,998 in
Shares in AMA Group Limited (valued at 30 day VWAP immediately prior to 1 February 2015) plus a cash amount
based on a calculation using the Actual Average EBIT achieved over the 3 years following acquisition.
Bruce Bennett founded BMB Prestige Collision Repairs (formerly Blackburn Motor Body) in 1977. With a continuous
emphasis on customer service and workmanship excellence, over nearly four decades Bruce has succeeded in
developing an expanding and pre-eminent collision repair operation, earning himself high esteem in the industry.
A life-long entrepreneur and innovator, his partnership with the AMA Group Ltd brings a network of businesses
including the flagship BMB Prestige in Blackburn and Browns Motors in Thornbury. We are delighted that Bruce
has agreed to stay on with the business as General Manager and we are confident that together we will be able to
strengthen our market position and grow our Panel segment successfully.
BMB specialise in the repair of prestige vehicles and are certified repairers for Audi, Mercedes-Benz, Lexus, Nissan
GTR, Infiniti and Subaru vehicles but also repair other makes such as BMW, Volkswagen, Holden, Mazda, Honda,
Toyota, Mitsubishi, Nissan, Ford and many others. Browns Motors has been operating in Thornbury since 1952.
Browns are approved repairers for many major insurance companies including RACV and Suncorp.
Following the acquisition we have finalised most aspects of the acquisition fair value assessments however, we
have prepared this report using provisional amounts as permitted by AASB3 Business Combinations.
Details of the acquisition are as follows:-
Trade receivables
Deferred tax assets
Plant and equipment
Trade payables
Lease liabilities
Employee benefits
Other current liabilities
Net liabilities acquired
Goodwill
Acquisition-date value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Earn-Out Adjustment Shares
Earn-Out Supplementary Cash
Net Present Value Adjustments
Acquisition costs
$'000
269
154
1,685
(1,551)
(722)
(512)
-
(636)
4,714
4,078
910
2,000
1,663
(495)
4,078
-
Cash used to acquire business, net of cash acquired:
Acquisition-date value of the total consideration transferred
Add: net cash assumed
$’000
4,078
-
4,078
From the date of acquisition to 30 June 2015, BMB generated revenue of $6,198,778 and gross margin of
$3,863,959
AMA GROUP LIMITED
ANNUAL REPORT 2015
64
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Note 27. Events occurring after the reporting period
From 1 July 2015 the Company agreed to manage the operations of Woods Accident Repair Centres with an option
to acquire 100% of the shares of the entity Ripoll Pty Ltd (A.C.N. 074 509 612) which currently operates the
Woods business.
On 6 July 2015 the Company successfully completed a capital raising by issuing 75 million shares at 60c per
security raising $45 million dollars before costs.
On 6 July 2015 the Company paid off the balance of the commercial loan facility with Westpac.
On 31 August 2015 the Directors declared a dividend, fully franked at 1.7 cents per security which is to be paid 30
October 2015.
We are currently in negotiations to determine an appropriately sized banking facility to assist with working capital
requirements and potential acquisitions.
No other matters or circumstances have arisen since 30 June 2015 that have significantly affected, or may
significantly affect the consolidated entity's operations in future financial years, the results of those operations in
future financial years, or the consolidated entity's state of affairs in future financial years.
Note 28. Reconciliation of profit after income tax to net operating cashflows
Profit after income tax
Depreciation and amortisation expense
Net loss/(profit) on sale of non-current assets
Equity issued in consideration of employment obligations
Doubtful debts
Stock Obsolescence
Fair value adjustments
(Increases)/Decreases in Accounts receivable
(Increases)/Decreases in inventories
(Increases)/Decreases in deferred tax assets
(Increases)/Decreases in prepayments
(Increases)/Decreases in other assets
Increases/(Decreases) in Accounts payable
Increases/(Decreases) in provision for income tax
Increases/(Decreases) in deferred tax liabilities
Increases/(Decreases) in employee benefits
Increases/(Decreases) in other provisions
Increases/(Decreases) in other liabilities
Net operating cash flows
Note 29. Earnings per share
30 June 2015
$'000
30 June 2014
$'000
9,090
1,314
25
-
12
27
191
(2,240)
(1,379)
(271)
726
-
346
(881)
516
344
-
-
7,820
5,655
479
(14)
933
40
(212)
38
1,221
358
2,337
(2,644)
-
(804)
849
(2,092)
376
(143)
(344)
6,033
Profit after income tax attributable to members of AMA Group Ltd
9,090
5,655
30 June 2015
$'000
30 June 2014
$'000
Weighted average number of ordinary shares used in calculating basic
earnings per share
Adjustments for calculation of diluted earnings per share
Earnings from consolidated operations:
Basic earnings per share
Diluted earnings per share
Number
Number
334,250,963
-
334,250,963
333,537,059
-
333,537,059
Cents
2.72
2.72
Cents
1.70
1.70
AMA GROUP LIMITED
ANNUAL REPORT 2015
65
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Discontinued operations:
Basic earnings per share
Diluted earnings per share
Note 30. Share-based payments
Cents
-
-
Cents
(0.06)
(0.06)
Options
The Company has adopted an Employee Share Option Plan for the benefit of executive and non-executive Directors
and full-time or part-time staff members employed by the Company. At the date of this report no options were on
issue pursuant to the Employee Share Option Plan.
No options were issued under the plan during the financial year ended 30 June 2015 and 30 June 2014 and there
were no options remaining at the end of either year reported.
Shares
At 30 June 2015, the Company had accrued an equity bonus entitlement for employees to the value of $45,656,
which appeared under employee benefits expense in the statement of comprehensive income. Subsequent to 30
June 2015, the employees elected to receive this bonus entitlement in cash rather than in shares.
At 30 June 2014, the Company had accrued an equity bonus entitlement for employees to the value of $62,134,
which appeared under employee benefits expense in the statement of comprehensive income. Subsequent to 30
June 2014, the employees elected to receive this bonus entitlement in cash rather than in shares.
Note 31. Parent Information
The following information has been extracted from the books and records of the parent and has been prepared in
accordance with accounting standards.
Assets
Current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Equity attributable to equity holders of the parent
Contributed equity
Accumulated losses
Total equity
Profit/(loss) for the year
Total comprehensive income /(loss)
Guarantees and contingent liabilities
Refer to note 23 for details of guarantees and contingent liabilities.
Contractual commitments
Refer to note 24 for details of contractual commitments.
Note 32. Discontinued Operations
30 June 2015
$'000
30 June 2014
$'000
945
46,005
2,600
69,655
794
25,306
3,011
37,643
(23,650)
(12,337)
74,904
(98,554)
(23,650)
74,904
(87,241)
(12,337)
30 June 2015
$'000
30 June 2014
$'000
(5,966)
(5,207)
(5,966)
(5,207)
(a) The following entities were classified as discontinued operations for the years ended 30 June 2015 and 2014:
Diesel Test Pty Ltd - De-registered 23/07/2014
Emission Services Pty Ltd – De-registered 23/07/2014
AMA GROUP LIMITED
ANNUAL REPORT 2015
66
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
(b) There was no profit or loss for the year ended 30 June 2015 from discontinued operations. The schedule over
the page shows details of the comparative period results:
Loss after tax from discontinued operations for the financial year (c)
30 June 2015
$'000
30 June 2014
$'000
-
-
221
221
(c) The following were the results for the discontinued operations for the financial year:
Revenue
Direct costs and overheads
Loss before tax
Income tax expense
Loss after tax from discontinued operations for the financial year
30 June 2015
$'000
30 June 2014
$'000
-
-
-
-
-
-
175
175
46
221
The net cash flows of the discontinued operations which have been incorporated into the statement of cash flows
are as follows:
Net cash inflow/(outflow) from operating activities
Net cash inflow/(outflow) from investing activities
Net cash inflow/(outflow) from financing activities
Net cash increase/(decrease) in cash generated by the discontinued division
-
-
-
-
(175)
330
(155)
(0)
30 June 2015
$'000
30 June 2014
$'000
Note 33. Class order disclosures
Closed group class order disclosures
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 1:
Name of entity
Alanco Australia Pty Ltd
ECB Pty Ltd
FluidDrive Holdings Pty Ltd
KT Cable Accessories Pty Ltd
Mr Gloss Holdings Pty Ltd
Perth Brake Parts Pty Ltd
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Equity holding
2015
%
100.0
100.0
100.0
100.0
100.0
100.0
2014
%
100.0
100.0
100.0
100.0
100.0
100.0
The trustee to this deed of cross guarantee is AMA 1 Pty Ltd which is not a member of the consolidated group.
Entities subject to class order relief
Pursuant to Class Order 98/1418, relief has been granted to the above entities from the Corporations Act 2001
requirements for preparation, audit and lodgement of their financial reports.
As a condition of the Class Order the above entities entered into a Deed of Cross Guarantee on 16 March 2009.
The effect of the deed is that AMA Group Limited has guaranteed to pay any deficiency in the event of winding up
of a controlled entity or if they do not meet their obligations under the terms of overdrafts, loans, leases or other
liabilities subject to guarantee. The controlled entities have also given a similar guarantee in the event that AMA
Group Limited is wound up or if it does not meet its obligations under the terms of overdrafts, loans, leases, or
other liabilities subject to the guarantee.
If the Deed of Cross Guarantee and the subsequent closed group disclosures were contained in the accounts of
AMA Group Limited, then an assessment would need to be made as to the fair value of the Deed of Cross
AMA GROUP LIMITED
ANNUAL REPORT 2015
67
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2015
__________________________________________________________________________________
Guarantee (as a financial guarantee to the Parent) and the details of the valuation and significant assumptions,
estimate and judgements used within that valuation would need to be disclosed. Please refer to the disclosure
surrounding financial guarantees in the financial statements of AMA Group Limited (see note 23) for further
information on financial guarantees.
The continuing entities and only the continuing entities are included in the deed of cross guarantee. The
Statement of Comprehensive Income of the entities that are members of the Closed Group is reflected in the
continuing entities Statement of Comprehensive Income. The consolidated statement of financial position of the
entities that are members of the Closed Group is as shown below:
Statement of Financial Position
As at 30 June 2015
Closed group
30 June 2015
$'000
30 June 2014
$'000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Receivables from related entities
Property, plant and equipment
Deferred tax assets
Intangibles
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Current tax payable
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax Liabilities
Provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Total equity
1,314
8,507
6,026
908
16,755
(5,532)
1,640
1,682
51,117
1,957
50,864
67,619
6,503
-
950
2,541
9,994
7,777
862
168
9,931
18,738
28,732
38,887
74,904
(36,017)
38,887
1,484
7,680
5,654
983
15,801
(302)
1,509
1,363
31,013
2,509
36,092
51,893
5,775
-
1,818
2,314
9,907
-
346
203
-
549
10,455
41,437
74,904
(33,467)
41,437
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DIRECTORS’ DECLARATION
2015
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ANNUAL REPORT 2015
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DIRECTORS’ DECLARATION
______________________________________________________________________________________
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 23 to 68 are in accordance with the Corporations
Act 2001 and:
(a) comply with Accounting Standards, which as stated in accounting policy note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
(b) give a true and fair view of the financial position as at 30 June 2015 and of the performance for the
year ended on that date of the consolidated entity;
2.
the Chief Executive Officer and Group Accountant have each declared that:
(a) the financial records of the consolidated entity for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view.
3.
in the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
The Company and a number of its subsidiaries have entered into a deed of cross guarantee under which the
Company and those subsidiaries guarantee the debts of each other. At the date of this declaration, there are
reasonable grounds to believe that the parties to this 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.
This declaration is made in accordance with a resolution of the Board of Directors.
Ray Malone
Executive Chairman
Dated this 31st day of August 2015
Melbourne
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INDEPENDENT AUDITOR’S REPORT
2015
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INDEPENDENT AUDITOR’S REPORT
______________________________________________________________________________________
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AMA GROUP LIMITED AND CONTROLLED ENTITIES
Report on the Financial Report
We have audited the accompanying financial report of AMA Group Limited and Controlled Entities (the
“consolidated entity”), which comprises the statement of financial position as at 30 June 2015, the statement
of comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors’ declaration of the consolidated entity comprising the company AMA Group
Limited and the entities it controlled at the year’s end or from time to time during the financial period.
Directors’ Responsibility for the Financial Report
The directors of AMA Group Limited are responsible for the preparation and fair presentation of the financial
report that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that is free from material misstatement, whether due to fraud or error. In
Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
in accordance with Australian Auditing Standards. Those standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial report in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
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ANNUAL REPORT 2015
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INDEPENDENT AUDITOR’S REPORT
______________________________________________________________________________________
Opinion
In our opinion:
a) the financial report of AMA Group Limited and Controlled Entities is in accordance with the Corporations
Act 2001, including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b) the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 20 of the directors’ report for the year
ended 30 June 2015. The directors of AMA Group Limited are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion the remuneration report of AMA Group Limited for the year ended 30 June 2015 complies with
section 300A of the Corporations Act 2001.
Matters relating to the Electronic Presentation of Audited Financial Report
The audit report relates to the financial report of the consolidated entity for the year ended 30 June 2015
included on the website of AMA Group Limited. The directors of AMA Group Limited are responsible for the
integrity of the website and we have not been engaged to report on its integrity.
This audit report refers only to the financial report identified above and its does not provide an opinion on any
other information which may have been hyperlinked to or from the financial report. If users of this financial
report are concerned about the inherent risks arising from the electronic data communications, they are
advised to refer to the hard copy of the audited financial report to confirm the information included in the
audited financial report presented on the consolidate entity’s website.
Shine Wing Australia (formerly Moore Stephens)
Chartered Accountants
Rami Eltchelebi
Partner
Melbourne, 31 August 2015
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SHAREHOLDER INFORMATION
2015
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SHAREHOLDER INFORMATION as at 25 August 2015
______________________________________________________________________________________
Number of holders of equity securities
409,250,963 fully paid ordinary shares are held by 2,435 individual holders.
There are no unquoted options over ordinary shares held.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1
1,001
5,001
10,001
to
to
to
to
1,000
5,000
10,000
100,000
100,001 and over
Total
Holding less than a marketable parcel
Equity security holders
Holders
98
537
439
1,076
285
2,435
69
Ordinary
Shares
43,168
1,677,913
3,560,391
36,774,940
367,194,551
409,250,963
14,623
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary Shareholder
Mr Gloss Pty Limited
UBS Nominees Pty Ltd
J P Morgan Nominees Australia Limited
RBC Investor Services Australia Nominees Pty Ltd
Citicorp Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Mr Raymond Malone & Mrs Leona Malone
Sandhurst Trustees Ltd
Mirrabooka Investments Limited
SRFE Pty Ltd
Jese Pty Ltd
Mr Richard John Calver
Citicorp Nominees Pty Ltd
Mr Stephen Matthew Shostak
Yerrus Holdings Pty Ltd
Altas Capital Pty Ltd
Mr Lachlan Alexandar McGillivray
Mr Ian Lindeman & Mrs Margaret Lindeman
Amcil Limited
Number held
67,961,015
25,355,305
22,367,222
18,515,960
18,506,333
17,346,856
12,568,739
8,490,335
8,111,706
6,243,298
6,086,062
5,822,195
5,602,600
5,128,000
4,949,642
4,947,404
4,161,470
3,720,388
3,600,001
3,272,192
252,756,723
% of total
shares held
16.61%
6.20%
5.47%
4.52%
4.52%
4.24%
3.07%
2.07%
1.98%
1.49%
1.53%
1.42%
1.37%
1.25%
1.21%
1.21%
1.02%
0.91%
0.88%
0.80%
61.77%
Substantial holders
The Company hold current substantial holder notifications in accordance with section 671B of the Corporations Act
for the following:
Thorney Opportunities Limited
20,987,503
6.28%
notified 26/06/2014
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
There are no other classes of equity securities.
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ANNUAL REPORT 2015
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SHAREHOLDER INFORMATION as at 25 August 2015
______________________________________________________________________________________
Listing rule 14.10.19
The entity used the cash and assets in a form readily convertible to cash that it had at the time of admission
consistently with its business objectives.
Shareholder enquiries
Shareholders with enquiries about their shareholdings should contact the share registry:
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street,
Abbotsford, Victoria 3067
Phone: +61 3 9415 4000
Fax: +61 3 9473 2500
Email: essential.registry@computershare.com.au
Change of address, change of name, consolidation of shareholdings
Shareholders should contact the Share Registry to obtain details of the procedure required for any of these
changes.
Annual report
Shareholders do not automatically receive a hard copy of the Company’s Annual Report unless they notify the
Share Registry in writing. An electronic copy of the Annual Report can be viewed on the Company’s website
www.amagroupltd.com
Tax file numbers
It is important that Australian resident shareholders, including children and corporate entities, have their tax file
number, ABN or exemption details noted by the Share Registry.
CHESS (Clearing House Electronic Sub-register System)
Shareholders wishing to move to uncertified holdings under the Australian Stock Exchange CHESS system should
contact their stockbroker.
Uncertified share register
Shareholding statements are issued at the end of each month that there is a transaction that alters the balance of
an individual/company’s holding.
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CORPORATE DIRECTORY
2015
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CORPORATE DIRECTORY
______________________________________________________________________________________
Executive Chairman and Chief Executive Officer
Executive Director and Chief Operating Officer
Non-Executive Director
Non-Executive Director
Directors
Ray Malone
Ray Smith-Roberts
Simon Doyle
Hugh Robertson
Company Secretarial
Phillip Hains
Terri Bakos
Registered Office
Suite 1,
1233 High Street,
Armadale, Victoria, 3143
Solicitors
Foster Nicholson Jones Lawyers
Level 6, 406 Collins Street,
Melbourne, Victoria, 3000
Auditors
Shine Wing Australia (formerly Moore Stephens)
Level 10, 530 Collins Street,
Melbourne, Victoria, 3000
Share Register
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street,
Abbotsford, Victoria, 3067
P: +61 3 9415 4000
F: +61 3 9473 2500
W: www.computershare.com.au
Bankers
Westpac Banking Corporation
Level 1, 439 Old Gympie Road,
Strathpine, Queensland, 4032
Quoted Securities
Ordinary Shares – ASX Code: AMA
Website and Email
W: www.amagroupltd.com
E: info@amagroupltd.com
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