26 August 2016
Company Announcements
For Immediate Release
ASX Code: AMA
APPENDIX 4E AND ANNUAL REPORT
In accordance with the Listing Rules of the Australian Securities Exchange (“ASX”), AMA Group
Limited encloses for immediate release the following information:
1. Appendix 4E, the Preliminary Final Report for the Year ended 30 June 2016; and
2. The Annual Report for the Year ended 30 June 2016.
If you have a query about any matter covered by this announcement, please contact Mr Ashley Killick
on ashley.killick@amagroupltd.com.
Ends.
AMA Group Limited (ACN 113 883 560)
Suite 1, 1233 High Street, Armadale, Victoria, 3143, Australia
PO Box 8694, Armadale, Victoria, 3143, Australia
Tel: + 61 3 9824 5254 Fax + 61 3 9822 7735
AMA GROUP LIMITED
(ACN 113 883 560)
ASX LISTING RULES – APPENDIX 4E
PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
The following information is presented in accordance with Listing Rule 4.3A of the Australian Securities
Exchange (“ASX”).
1.
Details of the reporting period and the previous corresponding period
Current reporting period
Previous corresponding period
- the year ended 30 June 2016
- the year ended 30 June 2015
2.
Results for announcement to the market
Year ended
30 Jun 2016
$’000
30 Jun 2015
$’000
Increase / (Decrease)
$’000
%
2.1 Revenues from continuing
operations (including joint venture
profit share)
Earnings before interest, tax
depreciation, amortization and
impairment from continuing
operations
Normalised earnings before interest,
tax, depreciation, amortization and
impairment from continuing
operations
264,284
93,197
171,087
183.57
24,672
14,194
10,478
73.82
31,921
14,194
17,727
124.89
2.2 Profit before tax from continuing
operations attributable to members
13,492
12,444
1,048
8.42
Normalised profit before tax from
continuing operations attributable to
members
2.3 Net profit for the period attributable
to members
2.4 Dividends (distributions)
23,695
12,444
11,251
90.41
7,219
9,090
(1,871)
(20.58)
Amount per
security
Franking
amount
per security
Conduit
foreign
income
per
security
2016 Final
1.70
100%
Nil
2.5 Record date for determining entitlements to the
dividend
15 September 2016
AMA GROUP LIMITED
(ACN 113 883 560)
ASX LISTING RULES – APPENDIX 4E
PRELIMINARY FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
2.6 Commentary on “Results for Announcement to the Market”
A brief explanation of any of the figures in 2.1 to 2.4 above, necessary to enable the figures to be
understood, is contained in the attached Financial Report for the Year ended 30 June 2016.
3.
Net Tangible Assets per Security
Year ended
30 Jun 2016
cents
30 Jun 2015
cents
Increase / (Decrease)
cents
%
Net tangible assets per security
(1.06)
(0.31)
(0.75)
(241.94)
4.
Details of entities over which control has been gained or lost during the period.
On 1 July 2015, 60% of the issued capital of Woods Auto Shops (Dandenong) Pty Ltd, the
operator of the Trackright businesses, was acquired.
On 1 October 2015, 100% of the issued capital of Gemini Accident Repair Centres Pty Ltd, the
operator of the Gemini businesses, was acquired.
On 1 November 2015, 100% of the issued capital of Ripoll Pty Ltd, the holding company for the
Woods Auto Shops business, was acquired.
On 4 February 2016, 100% of the issued capital of Micra Accident Repair Centre Pty Ltd was
acquired.
During the period, control was not lost over any entity.
5.
Details of individual and total dividends or distributions and dividend or distribution
payments.
Type
Record Date Payment Date Amount
per
Security
(cents)
Total
Dividend
($)
Franked
amount
per
security
Conduit
foreign
income
per
security
2015 Final
15 Sep 2015
30 Oct 2015
2016 Interim
7 Mar 2016
7 Apr 2016
1.70
0.50
6,957,267
2,353,940
100%
100%
Nil
Nil
Details of any dividend distribution reinvestment plans.
Not Applicable.
Details of any associates and joint venture entities
Ownership
Name of entity
30 Jun 2016
%
30 Jun 2015
%
Contribution to profit from
ordinary activities
30 Jun 2016
$’000
30 Jun 2015
$’000
Not Applicable
Foreign Entities, Accounting Standards used in compiling the report
Not Applicable.
Audit / Review of Accounts upon which this report is based and qualification of audit / review
The financial report has been subject to audit and is not subject to any dispute or qualification.
6.
7.
8.
9.
AMA GROUP LIMITED
ACN 113 883 560
Annual Report for the Year Ended
30 June 2016
AMA GROUP LIMITED
(ACN 113 883 560)
TABLE OF CONTENTS
Table of Contents
DIRECTORS’ REPORT ....................................................................................................................................... 1
AUDITORS’ INDEPENDENCE DECLARATION ............................................................................................... 19
CONSOLIDATED INCOME STATEMENT ........................................................................................................ 20
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................. 21
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................... 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................... 23
CONSOLIDATED STATEMENT OF CASHFLOWS ......................................................................................... 24
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................... 25
DIRECTORS’ DECLARATION .......................................................................................................................... 78
AUDITORS’ REPORT ....................................................................................................................................... 79
CORPORATE GOVERNANCE STATEMENT .................................................................................................. 81
SHAREHOLDER INFORMATION ..................................................................................................................... 87
CORPORATE DIRECTORY .............................................................................................................................. 90
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
DIRECTORS’ REPORT
Your Directors submit the consolidated interim financial statements of AMA Group Limited (“AMA” or the
“Company”) and its controlled entities (the “Group”) for the year ended 30 June 2016. In order to comply with
the provisions of the Corporations Act 2001, the Directors report as follows:
DIRECTORS AND OFFICERS
The names and particulars of the Directors and Company Secretaries of the Company in office at any time
during or since the end of the period are as follows:
Chairman and Executive Director
Mr Raymond Malone
Mr Raymond Smith-Roberts Executive Director
Mr Hugh Robertson
Mr Andrew Hopkins
Mr Brian Austin
Mr Leath Nicholson
Mr Simon Doyle
Non-Executive Director
Executive Director (Appointed – 17 December 2015)
Non-Executive Director (Appointed – 23 December 2015)
Non-Executive Director (Appointed – 23 December 2015)
Non-Executive Director (Resigned – 4 November 2015)
Mr Phillip Hains
Mrs Terri Bakos
Joint Company Secretary
Joint Company Secretary
REVIEW AND RESULTS OF OPERATIONS
Principal Activities
The principal activity of the Group is the operation and development of complementary businesses in the
automotive aftercare market. It focuses on the wholesale vehicle aftercare and accessories sector, including
vehicle panel repair, vehicle protection products & accessories, automotive electrical & cable accessories and
automotive component remanufacturing.
Achievements
AMA has achieved a number of important operational milestones in this reporting period:
•
•
•
In September 2015, the Company announced the acquisition of the Gemini Accident Repair Centres group
of companies. Gemini was the largest independent accident repair group in Australia operating with sites
across New South Wales, Queensland, Victoria, Australian Capital Territory and Western Australia. When
added to the existing AMA repair centre network this acquisition is an excellent fit and has allowed the
Group to build on its footprint to become the largest national repair group.
In October 2015, AMA announced the further expansion of its Vehicle Panel Repair division by finalising
the acquisition of the Woods Auto Shops business. AMA had been managing the business from July
2015. This acquisition was supplemented by the acquisition of a majority interest in the Trackright
mechanical damage repair business.
In January 2016, the Group also acquired additional Vehicle Panel Repair businesses being Micra
Accident Repair Centre, BDS Panels and Keswick Crash Repairs;
• During the financial period, the Group also continued its reorganisation of the Automotive Electrical &
Cable Accessories division. This business unit has traditionally operated numerous brands on a
geographic basis which Management believed could be strengthened by merging the operation to create
economies of scale and better marketing opportunities for all brands.
• The Group also undertook a reorganisation of the Vehicle Protection Products & Accessories division
during the reporting period by merging the operating facilities of East Coast Bullbars and Custom Alloy.
Management believe that these actions will improve marketing opportunities, operating efficiencies and
customer service and should deliver an improved gross margin.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
1
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
REVIEW AND RESULTS OF OPERATIONS cont..
The Directors continue to be proud of the team’s achievements which emphasise the Board’s strategy to
expand our business, take advantage of industry consolidation whilst ensuring shareholder value and returns
are given appropriate focus.
Capital Management
During this reporting period, the Group undertook a number of key capital management initiatives::
•
•
•
In July 2015, the Company completed a share issue which raised $45 million by placing 75 million shares
at 60 cents each with sophisticated and professional investors. This additional capital provided AMA with a
strong capital base with which to continue the business acquisition programme.
In October 2015, AMA paid the 2015 year final dividend of 1.7 cents per share fully franked at 30%. This
was an increase of 6.25% over the 2014 final dividend paid in 2014.
In April 2016, AMA paid the 2016 year interim dividend of 0.5 cents per share fully franked at 30%. The
Company did not previously pay an interim dividend.
Upon finalising the annual report, the Directors are pleased to announce they have decided to declare a final
dividend, fully franked at 30%, of 1.70 cents per share with a record date of 15 September 2016 and a
payment date of 31 October 2016.
Operating Results
Reported earnings before interest, tax, depreciation, amortisation and impairment expense (“EBITDA”) has
increased from $14.194 million to $24.672 million; a 73.82% increase. This result, however, has been
significantly impacted by several large non cash abnormal items. Restating this result for these abnormal
items results in normalised EBITDA increasing to $31.921 million; an increase of 124.89%. Importantly, this
normalised EBITDA result exceeds Management’s previous guidance of $28 million to $29 million.
Reported EBITDA
Costs associated with disposal of business
Employee equity plan expense
Business acquisition costs
Reorganisation of the Vehicle Protection & Products division
Reorganisation of the Automotive Electrical & Cable division
Site Integrations – Panel division
Site Closures – Panel division
Redundancies – Panel division
Normalised EBITDA
$’000
24,672
111
3,644
916
400
200
500
350
1,128
31,921
These abnormal items have also impacted on the Group’s reported net profit before tax from continuing
operations (“NPBT”) which has increased to $13.774 million. This result was also impacted by the large non
cash abnormal item relating to the impairment charges associated with the reorganisation of the Electrical
division of $2.954 million. After adjusting this result for the impact of these abnormal items, Normalised NPBT
becomes $23.977 million; an increase of 92.68%.
These large abnormal items also distort the effective tax rate. As such, the net profit after tax attributable to
members has decreased by 20.58% to $7.219 million. Given the abnormal nature of these items it is expected
that the future effective tax rate will return to a more normal level.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
2
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
REVIEW AND RESULTS OF OPERATIONS cont..
Excluding the abnormal items, our underlying results indicate that the key business operations continue to
deliver positive results:
• Vehicle Panel Repair has delivered significant revenue growth as expected with the investment in Woods
and Gemini providing a major boost to the segment results. Gemini has contributed to these results for
nine months (including December). The performance of the operations acquired over the past two years
has been to expectation and the integration of the businesses is now well advanced and the associated
synergistic benefits will provide excellent outcomes in the future.
• Vehicle Protection Products & Accessories shows moderate comparative growth in revenue but, with the
reorganisation of the operations of East Coast Bullbars and Custom Alloy, the operating result for the year
has been impacted. With the integration now completed we are confident that the benefits of this addition
will enable us to continue to grow.
• Automotive Electrical & Cable Accessories operates in a difficult market. The restructuring of the operation
resulted in some abnormal charges during the current year but will enable the merged operation to be
better positioned to capitalise on this changing market. It is anticipated that the introduction of new product
initiatives will also deliver alternative revenue streams in the future.
• With the disposal of Perth Brake Parts, the Automotive Component Remanufacturing division comprises
the Fluiddrive operation. It has continued to grow its results from the continued application of
Management’s strategies.
Financial Position
The capital raising in July together with the use of shares as vendor consideration has seen the contributed
equity base rise from $74.904 million to $172.149 million. The increased capital base has enabled the Group
to undertake the acquisition programme which has also resulted in an increased asset base; albeit most of
this growth is in intangibles reflecting the service industry businesses we have acquired.
At 30 June 2016, the cash balance was $22.888 million and subsequent to year end, the Company
established a new finance facility providing the Group with substantial financial reserves to fund the future
operations.
Cash Flow
AMA’s operating cash flows have, as expected, grown strongly during the period (up by 370.09% to $36.761
million). The execution of major supply contracts has also seen added cash flow benefits be derived in the
current period. The Investing cash flows reflect the business acquisitions and the capital expenditure
programme that has been implemented to restructure and integrate the business operations. The strong
operating cash flows and the capital raised have enabled us to reduce our level of borrowings and increase
the level of dividends paid. As a result we have been able to improve our closing cash balance to $22.888
million.
Business Strategies and Future Prospects
In recent years, the Board and Management have described the Strategic Direction of the Group as focusing
on the growth opportunities presenting themselves to our four key business divisions. It was believed that the
Group could exploit these opportunities with our:
Relatively strong financial position;
Market leading brands;
Strong relationships with customers and suppliers across multiple channels; and
Industry experienced management with a commitment to operating excellence.
It was anticipated that most business segments had organic growth potential but that given the consolidation
of the Vehicle Panel Repair industry there would be significant opportunities for strategic and accretive
acquisitions in this industry segment. To this end, Management then embarked on the business growth
programme.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
3
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
REVIEW AND RESULTS OF OPERATIONS cont..
The Directors believe that the strong financial performance of AMA in the current reporting period reflects the
ongoing outcomes of this strategic direction. The investments made have resulted in a significant increase in
the scale and scope of our operations. Whilst challenging market conditions have persisted across most of
the Group’s business segments, the results are in line with the Directors’ expectations, which show a
substantial increase in the Group’s operating revenue and EBITDA over the past two years.
The Board believes that there still exist significant growth opportunities for our businesses; especially in
Vehicle Panel Repair and Vehicle Protection Products & Accessories. As such, Management are focussed on
continuing the growth strategy outlined previously.
In executing this strategy, the Group has developed risk management strategies to address the various risks
that it encounters.
For example, there is the downward pressure on pricing in the Vehicle Panel Repair industry that is being
experienced as insurers seek to protect their margins. This risk impacts the Group’s operations less than
other industry participants as we have the scale and the relationships to partner with these work providers and
ensure that a balanced agreement is reached. This pricing pressure will however provide us with further
growth opportunities either through the acquisition or attrition of those organisations who are unable to
respond to these changes.
Another example is that a significant portion of our raw material purchases are sourced from overseas. The
movement in exchange rates therefore has an indirect impact on our cost structures. In response the Group
has developed strategic partnerships with key suppliers or new supply chain initiatives. The Group’s scale
and Management’s expertise in these areas enables us to mitigate potential negative price movements and
still derive synergy benefits in the medium term.
Whilst the economic outlook and market conditions across some business segments are likely to remain
challenging, AMA believes that its continued application of key management strategies combined with its
acquisition strategy will continue to boost future earnings.
The Board believe that there are still substantial growth opportunities presenting to our key business divisions.
The consolidation of the Vehicle Panel Repair industry continues and Management are actively involved in
negotiating the acquisition of existing businesses and new “greenfield” sites. The acquisition of further
businesses will provide further scale to our operations.
SUBSEQUENT EVENTS
On 24 August 2016, the Company entered into a new Facility Agreement with National Australia Bank Limited.
This facility has a tenor of three years and will allow the Company to draw-down up to $40 million in debt, $6.5
million in finance leases, $3 million in guarantees and $0.4 million in letters of credit. It is intended that this
facility will assist the Group in financing its future requirements for working capital, capital expenditure and
business acquisitions.
On 26 August 2016, the Directors declared a dividend, fully franked of 1.70 cents per security which is to be
paid 31 October 2016.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
4
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
MEETING 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 2016, 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
Raymond Malone
Raymond Smith-Roberts
Hugh Robertson
Andrew Hopkins
Brian Austin
Leath Nicholson
Simon Doyle
8
8
8
3
3
3
5
8
8
8
3
3
2
5
-
-
3
-
2
2
1
-
-
3
-
2
1
1
-
-
1
-
1
1
-
-
-
1
-
1
1
-
DETAILS OF DIRECTORS AND OFFICERS
The name and details of the Directors and Officers 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.
Raymond Malone
Chairman and Executive Director
Appointed to the Board
Appointed Executive Chairman
Experience and expertise
Interest in Shares and Options*
23 January 2009
19 March 2015
With over 30 years work experience in the automotive panel repair
industry, Mr Malone has progressed 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.
80,417,619 Fully Paid Ordinary Quoted shares and 10,000,000
options
Directorships held in other listed entities Chairman of Money3 Corporation Limited.
Special responsibilities
Chief Executive Officer - Group
Raymond Smith-Roberts
Executive Director
Appointed to the Board
Experience and expertise
Interest in Shares and Options*
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 Chief Operating Officer from 2009 to 2015. He is
well positioned to assist the board in developing strategy for the
next phase of the Company’s growth and development.
5,081,684 Fully Paid Ordinary Quoted shares and 2,000,000
options
Directorships held in other listed entities Nil
Special responsibilities
Chief Executive Officer - Automotive Components and Accessories
Divisions
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
5
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
DETAILS OF DIRECTORS AND OFFICERS cont..
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
several such companies.
230,000 Fully Paid Ordinary Quoted shares and Nil options
Interest in Shares and Options*
Directorships held in other listed entities Non-Executive Director of Centrepoint Alliance Limited, Primary
Special responsibilities
Opinion Limited, TasFoods Limited and Hub 24 Limited.
Member of the Audit Committee and the Remuneration Committee
Andrew Hopkins
Executive Director
Appointed to the Board
Experience and expertise
Interest in Shares and Options*
17 December 2015
Andrew founded the Gemini Group in Perth in 2009 and built the
Gemini brand into one of the largest privately owned consolidators
offering integrated claims management and repair services to the
insurer, corporate and consumer markets. Andrew brings
extensive management expertise to the AMA group. With over 35
years of experience in finance, acquisitions, strategy and building
insurance relationships, Andrew’s ability to continually innovate will
broaden AMA’s relationships with insurance companies both
domestically and internationally.
35,239,167 Fully Paid Ordinary Quoted shares, 15,102,500 Fully
Paid Ordinary Unquoted shares and Nil options
Directorships held in other listed entities Nil
Special responsibilities
Chief Executive Officer - Vehicle Panel Repair Division
Leath Nicholson
Non-Executive Director
Appointed to the Board
Experience and expertise
23 December 2015
Mr Nicholson holds a Bachelor of Economics (Hons), a Bachelor of
Law (Hons) and a Masters of Law (Commercial Law). He co-
founded Foster Nicholson Jones in 2008. He has a breadth of
experience with ASX listed entities and has particular expertise in
mergers and acquisitions; IT based transactions, and corporate
governance. He also has significant experience in corporate and
commercial based dispute resolution.
1,673,395 Fully Paid Ordinary Quoted shares and Nil options
Interest in Shares and Options*
Directorships held in other listed entities Non-Executive Director of Money3 Corporation Limited.
Special responsibilities
Member of the Audit Committee and the Remuneration Committee
Brian Austin
Non-Executive Director
Appointed to the Board
Experience and expertise
23 December 2015
With over 30 year’s industry experience, Mr Austin has held senior
executive positions in the insurance industry. Over that time he has
been instrumental in setting the strategy of capital raising and
acquisitions. He has been a Director of ASX listed entities,
enabling him to develop a global network of key relationships.
112,000 Fully Paid Ordinary Quoted shares and Nil options
Interest in Shares and Options*
Directorships held in other listed entities Chairman of PSC Insurance Group Limited
Special responsibilities
Member of the Audit Committee and the Remuneration Committee
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
6
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
DETAILS OF DIRECTORS AND OFFICERS cont..
Simon Doyle
Non-Executive Director
Appointed to the Board
Retired from the Board
Experience and expertise
14 October 2009
4 November 2015
Mr Doyle has a Bachelor of Arts and a Bachelor of Law. He 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.
Nil Fully Paid Ordinary Quoted shares and Nil options
Member of the Audit Committee and the Remuneration Committee
Interest in Shares and Options*
Directorships held in other listed entities Nil
Special responsibilities
Phillip Hains
Joint Company Secretary
Appointed
Experience and expertise
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 and expertise
2 March 2010
Ms Bakos is a Chartered Secretary and holds a Bachelor of
Business (Accounting) from RMIT University. She has over 20
years’ experience providing accounting and compliance services to
listed and unlisted public companies.
* The relevant interest in the shares or options over shares issued by the Company of each Director, and
other related body corporate, as notified by the Director to the Australian Securities Exchange in
accordance with s 205G(1) of the Corporations Act 2001, as at the date of this report.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
7
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
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
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
Chairman and Executive Director
Raymond Malone
Raymond Smith-Roberts Executive Director
Hugh Robertson
Andrew Hopkins
Brian Austin
Leath Nicholson
Simon Doyle
Non-Executive Director
Executive Director (Appointed 17 December 2015)
Non-Executive Director (Appointed 23 December 2015)
Non-Executive Director (Appointed 23 December 2015)
Non-Executive Director (Resigned 4 November 2015)
Executive Management
Ashley Killick
Chief Financial Officer (Appointed 29 September 2015)
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 Executive Management.
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 Executive Management, 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 Key Management Personnel and the share price movement.
Remuneration is based on 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
8
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
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 Executive 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 Company also 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 Equity 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 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
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 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% (2015: 9.50%) of
wages and salaries.
Short-term incentives
The remuneration of 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 an Employee Equity Plan for the benefit of Directors, full-time and part-time staff
members employed by the Company. Under this Plan there are currently 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
9
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
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 Executive 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 2016 financial year has been measured against the KPI’s set at the start of the year by the
Board and/or Executive 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. Details of these
agreements are contained in Part D of this report.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
10
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
B
Details of remuneration
Details of the remuneration of the Directors, the Key Management Personnel of the Group (as defined in
AASB 124: Related Party Disclosures) are set out in the tables below:
2016
Short-term benefits
Salary
$
Bonus Other
$
$
Long-term
benefits1
Post-
employment
benefits
Equity
settled
benefits2
Total
$
$
$
$
Non-Executive Directors
Hugh Robertson
Brian Austin3
Leath Nicholson3
Simon Doyle4
Executive Directors
Raymond Malone
Raymond Smith-Roberts
Andrew Hopkins6
Executive Management
Ashley Killick7
81,667
40,000
40,000
34,429
-
-
-
-
383,2505
-
300,000 270,416
-
495,000
167,822
-
1,542,168 270,416
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,271
-
-
-
-
81,667
40,000
40,000
37,700
5,845
21,349
-
35,000 2,066,000 2,490,095
410,000 1,031,765
30,000
495,000
-
-
187
15,900
206,000
389,909
27,381
84,171 2,682,000 4,606,136
Notes:
1 - Represents movement in the provision for long service leave for amounts accrued and not paid
2 - Represents the non-cash accounting charge to the Company’s operating result relating to prior year share issues, to compensate for
sign on bonuses, and options granted in the current year - refer to following sections for further details
3 - Appointed 23 December 2015
4 - Retired 4 November 2015
5 – In consideration of shareholders approving the issue of options to Mr Malone at the 27 November 2015 AGM, Mr Malone agreed not
to be paid a salary in the second half of the financial year.
6 - Appointed 17 December 2015
7 - Appointed 29 September 2015
2015
Short-term benefits
Salary
$
Bonus Other
$
$
Long-term
benefits1
Post-
employment
benefits
Equity
settled
benefits2
Total
$
$
$
$
Non-Executive Directors
Simon Doyle
Duncan Fischer3
Hugh Robertson4
Executive Directors
Raymond Malone
Raymond Smith-Roberts
100,000
83,692
5,000
-
-
-
-
-
-
-
-
-
9,500
7,951
-
- 109,500
91,643
-
5,000
-
731,500
144,122 410,874 20,956
-
-
13,079
1,738
35,000
30,000
116,000
20,000
895,579
627,690
1,064,314 410,874 20,956
14,817
82,451
136,000 1,729,412
Notes
1 - Represents movement in the provision for long service leave for amounts accrued and not paid
2 - Represents the non-cash accounting charge to the Company’s operating result relating to prior year share issues, to compensate for
sign on bonuses - refer to following sections for further details
3 - Retired 11 March 2015
4 - Appointed 2 June 2015
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
11
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
At the Annual General Meeting held on 27th November 2015, shareholders approved the issue of 10,000,000
options to Mr Raymond Malone and 2,000,000 options to Mr Raymond Smith-Roberts. The Company was
required under AASB 2 Share-based Payment to expense the notional cost of these options although the
individuals received no direct cash benefit. The Company had an independent valuer assess the theoretical
value of these options and expensed the resultant amount. The significant rise in the AMA share price
between the time when these options were granted and when the subsequent approval by shareholders was
received greatly impacted the theoretical value derived. The value of $1.950 million has been included in the
2016 remuneration report relating to the options issued to Mr Raymond Malone. The value of $0.390 million
has been included in the 2016 remuneration report relating to the options issued to Mr Raymond Smith-
Roberts.
On 25th April 2016, Mr Ashley Killick was issued with 2,000,000 options to acquire ordinary shares in the
Company. The Company was required under AASB 2 Share-based Payment to expense the notional cost of
these options although the individual received no direct cash benefit. The Company had an independent
valuer assess the theoretical value of these options and expensed the resultant amount. The value of $0.206
million has been included in the 2016 remuneration report relating to the options issued to Mr Ashley Killick.
In a previous financial year, Mr Raymond Malone and Mr Raymond Smith-Roberts, were issued ordinary
shares as consideration for them separately committing to an amendment and extension of their respective
employment contracts. These shares are conditional on them remaining employed by the group over the term
of the revised contracts. Under AASB 2 Share-based Payment the notional cost of these shares is being
expensed over this term.
The value of $116,000 has been included in the 2015 and 2016 remuneration tables for Mr Raymond Malone
and, assuming his continued employment, a further $116,000 will be shown in the remuneration tables for
next financial year. The value of $20,000 has been included in the 2015 and 2016 remuneration tables for Mr
Raymond Smith-Roberts and, assuming his continued employment, a further $20,000 will be shown in the
remuneration tables for next financial year.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
12
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
C Share-based compensation
Equity Holdings
Fully Paid Ordinary Quoted Shares
The number of shares in the Company held during the financial year by each director and other members of
Key Management Personnel of the Group, including their related parties, is set out below:
Opening
Balance
Balance on
Appointment
Balance on
Retirement
Other
Changes
Closing
Balance
2016
Raymond Malone
Raymond Smith-Roberts
Hugh Robertson
Andrew Hopkins
Brian Austin
Leath Nicholson
Simon Doyle
2015
80,417,619
8,167,746
230,000
-
-
-
4,161,470
-
-
-
19,524,1672
112,0003
1,673,3953
-
-
-
-
-
-
-
(4,161,470)4
-
(3,086,062)1
-
-
-
-
-
80,417,619
5,081,684
230,000
19,524,167
112,000
1,673,395
-
92,976,835
21,309,562
(4,161,470)
(3,086,062)
107,038,865
Raymond Malone
Raymond Smith-Roberts
Hugh Robertson
Simon Doyle
Duncan Fischer
80,417,619
8,167,746
-
4,161,470
9,133,334
-
-
230,0005
-
-
-
-
-
-
(9,133,334)6
101,880,169
230,000
(9,133,334)
-
-
-
-
-
-
80,417,619
8,167,746
230,000
4,161,470
-
92,976,835
Notes:
1 – Shares sold through open market trade on 21 April 2016
2 - Appointed 17 December 2015 (Initial holdings at appointment date)
3 - Appointed 23 December 2015 (Initial holdings at appointment date)
4 - Retired 4 November 2015 (Balance at date of retirement removed from list)
5 - Appointed 2 June 2015 (Initial holdings at appointment date)
6 - Retired 11 March 2015 (Balance at date of retirement removed from list)
Subsequent to year-end, a related entity to Mr Hopkins acquired a further interest in shares in AMA Group
Limited. The current interest of Mr Hopkins is 35,239,167 Fully Paid Ordinary Quoted shares.
Fully Paid Ordinary Unquoted Shares
On his appointment as an Executive Director, Mr Andrew Hopkins and his related parties, held an interest in
8,367,500 ordinary unquoted shares in the Company. At 30 June 2016, this balance was 8,367,500.
Subsequent to year-end, a related entity of Mr Hopkins acquired a further interest in shares in AMA Group
Limited. The current interest of Mr Hopkins is 15,102,500 Fully Paid Ordinary Unquoted shares.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
13
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
Options over Fully Paid Ordinary Quoted Shares
On 14 September 2015, the Board agreed to the issue of unquoted options to Directors as part of their
remuneration package. At the General Meeting held on 27th November 2015, the shareholders approved the
issue of 10,000,000 options to Mr Raymond Malone and 2,000,000 options to Mr Raymond Smith-Roberts.
The terms of the Options include a nil consideration price with an exercise price of $1.20 each. The Options
vest 12 months from the date of Shareholder Approval (i.e. 27th November 2017). They expire 3 years from
issue date. These Options are convertible into 1 fully paid ordinary Share in the Company. Upon exercise the
Shares issued will be quoted and will rank equally with all other fully paid ordinary Shares.
On 25th April 2016, Mr Ashley Killick was issued with 2,000,000 options to acquire ordinary shares in the
Company. The terms of the Options include a nil consideration price with an exercise price of $1.20 each.
The Options vest 12 months from the date of issue (i.e. 25th April 2017). They expire 3 years from issue date.
These Options are convertible into 1 fully paid ordinary Share in the Company. Upon exercise the Shares
issued will be quoted and will rank equally with all other fully paid ordinary Shares.
There were no options issued to Key Management Personnel during the previous financial year as part of
their compensation.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
14
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
D Service agreements
The Group has entered into service agreements with Key Management Personnel. It is a standard
requirement of these contracts that no individual, 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.
Specific details of the service agreements for Key Management Personnel in place as at 30th June 2016 are
as follows:
Name:
Raymond Malone
Executive Chairman and Chief Executive Officer
Title:
Agreement commenced:
Agreement extended:
Term of original agreement:
Term of extension:
Termination period and payout: 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.
4 July 2010
1 July 2012
5 Years
5 Years to 30 June 2017
Other terms:
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.”
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
15
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
Name:
Title:
Agreement commenced:
Agreement extended:
Term of extension:
Term of original agreement:
Termination Period:
Termination payout:
Other terms:
Raymond Smith-Roberts
Executive Director and Chief Executive Officer of Automotive Components
and Accessories
1 September 2010
1 July 2012
5 Years
No fixed term
6 months’ notice period
6 months’ base salary
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.”
Name:
Hugh Robertson
Title:
Agreement commenced:
Term of agreement:
Termination period:
Termination payment:
Other terms:
Non-Executive Director
2 June 2015
Ongoing
None
Nil
None
Name:
Andrew Hopkins
Title:
Agreement commenced:
Term of agreement:
Termination period:
Termination payment:
Other terms:
Executive Director and Chief Executive Officer of Vehicle Panel Repair
16 December 2015
5 Years
None
None
Mr Hopkins is employed as the Key Person under a consultancy services
agreement with an entity that is a related party to him.
Name:
Brian Austin
Title:
Agreement commenced:
Term of agreement:
Termination period:
Termination payment:
Other terms:
Non-Executive Director
23 December 2015
Ongoing
None
Nil
None
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
16
AMA GROUP LIMITED
(ACN 113 883 560)
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2016
Name:
Leath Nicholson
Title:
Agreement commenced:
Term of agreement:
Termination period:
Termination payment:
Other terms:
Non-Executive Director
23 December 2015
Ongoing
None
Nil
None
Generally, the Company or the individual may terminate employment at any time by giving the other party
appropriate contractual notice in writing.
If either the Company or the individual gives notice of termination, the Company may, at its discretion, choose
to terminate the individual’s employment immediately or at any time during the notice period and pay the
individual an amount equal to the salary due for the residual period of notice at the time of termination.
The employment of each individual 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 individual or a consistent failure to carry out duties in a manner
satisfactory to the Company.
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Date options granted
Expiry Date
Issue Price of Shares
Number under Option
27 Nov 2015
25 Apr 2016
27 Nov 2018
25 Apr 2019
1.20
1.20
12,000,000
6,875,000
No option holder has any right under the option to participate in any other share issue of the Company or any
other entity.
Included in these options were options granted as remuneration to Key Management Personnel. Details of
options granted to Key Management Personnel are disclosed in the audited remuneration report above.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
No shares were issued on the exercise of options in the financial year ended 30 June 2016 or 30 June 2015.
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.
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 Group had no adverse environmental issues during the year.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
17
AMA GROUP LIMITED (ACN 113 883 560) DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2016 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016 18 NON-AUDIT SERVICES No non-audit services were provided by Shine Wing Australia. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration, as required under Section 307C of the Corporations Act, in relation to the review for the Year ended 30 June 2016, is provided with this report. ROUNDING OF AMOUNTS The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities & Investments Commission, relating to the “rounding off” of amounts in the Directors’ report and financial report. Amounts in the Directors’ report and the Year financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, unless otherwise indicated. This report is made in accordance with a resolution of the Board of Directors. Director 26 August 2016 AMA GROUP LIMITED
(ACN 113 883 560)
AUDITORS’ INDEPENDENCE DECLARATION
AUDITORS’ INDEPENDENCE DECLARATION
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
19
AMA GROUP LIMITED
(ACN 113 883 560)
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED INCOME STATEMENT
Revenue from continuing operations
Raw materials and consumables used
Employment benefits expense
Occupancy expense
Travel and motor vehicle expense
Professional services expense
Advertising and marketing expense
Insurance expense
Research and development expense
Information technology expense
Communication expense
Other expense
Earnings before interest, tax, depreciation, amortisation and
impairment (EBITDA)
Depreciation and amortisation expense
Impairment expense
Earnings before interest and tax (EBIT)
Finance costs
Profit from continuing operations before fair value adjustments
Fair value adjustments to financial liabilities
Profit (loss) before income tax from continuing operations
Profit (loss) before tax from discontinued operations
Profit (loss) before income tax
Income tax benefit / (expense)
Net profit (loss)
Profit (loss) attributable to
Members of AMA Group Limited
Non-controlling interests
Earnings per Share
From continuing operations
Basic earnings per share
Diluted earnings per share
From continuing and discontinuing operations
Basic earnings per share
Diluted earnings per share
4
5
5
5
5
5
5
28
6
20
30
30
30
30
Note 30 Jun 2016 30 Jun 2015
$’000
$’000
264,284
(111,514)
(97,985)
(17,810)
(2,165)
(4,010)
(1,625)
(757)
(259)
(818)
(687)
(1,982)
24,672
(6,817)
(2,954)
14,901
(207)
14,694
(920)
13,774
(18)
13,756
(6,340)
7,416
7,219
197
7,416
93,197
(40,820)
(27,621)
(5,548)
(911)
(1,101)
(1,080)
(302)
(274)
(315)
(262)
(769)
14,194
(1,306)
-
12,888
(253)
12,635
(191)
12,444
208
12,652
(3,562)
9,090
9,090
-
9,090
Cents
Cents
1.58
1.55
1.58
1.55
2.68
2.68
2.72
2.72
20
The above consolidated income statement is to be read in conjunction with the attached notes.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
AMA GROUP LIMITED
(ACN 113 883 560)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note 30 Jun 2016 30 Jun 2015
$’000
$’000
Net profit (loss)
7,416
9,090
Other Comprehensive Income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income, net of tax
11
11
-
-
Total comprehensive income, net of tax
7,427
9,090
Total comprehensive income attributable to:
Members of AMA Group Limited
Non-controlling interests
7,230
197
9,090
-
7,427
9,090
The above consolidated statement of comprehensive income is to be read in conjunction with the attached
notes.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
21
AMA GROUP LIMITED
(ACN 113 883 560)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note
30 Jun 2016 30 Jun 2015
$’000
$’000
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Assets classified as held for sale
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Provisions
Income tax payable
Liabilities associated with assets held for sale
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings (deficit)
Total Group interest
Non – controlling interest
Total equity
7
8
9
10
28
11
12
13
10
14
15
16
6
28
15
16
17
14
18
19
20
22,888
22,781
15,402
1,690
-
62,761
34,963
149,531
5,227
3,639
193,360
256,121
47,694
601
9,358
1,828
-
59,481
308
4,375
2,720
42,458
49,861
109,342
146,779
172,149
3,059
(28,626)
146,582
197
146,779
2,086
11,293
7,479
1,269
1,302
23,429
8,074
48,046
1,682
1,956
59,758
83,187
10,462
8,330
3,670
949
356
23,767
11
246
862
9,931
11,050
34,817
48,370
74,904
-
(26,534)
48,370
-
48,370
The above consolidated statement of financial position is to be read in conjunction with the attached notes.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
22
AMA GROUP LIMITED
(ACN 113 883 560)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Note
Equity Reserves
$’000
$’000
Retained
Earnings
$’000
Total
$’000
Non
Control
Interest
$’000
Total
$’000
At 1 July 2014
74,904
-
(30,276)
44,628
Profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners:
Dividends recognised
21
-
-
-
-
-
-
-
-
-
-
9,090
-
9,090
-
9,090
9,090
(5,348)
(5,348)
(5,348)
(5,348)
As at 30 June 2015
74,904
-
(26,534)
48,370
At 1 July 2015
74,904
-
(26,534)
48,370
-
-
-
-
-
-
-
-
44,628
9,090
-
9,090
(5,348)
(5,348)
48,370
48,370
Profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners:
Non-controlling interest on
acquisition of subsidiary
Shares issued, net of costs
Issue of shares to employees
Issue of shares as
consideration for business
acquisition
Employee equity plan
remuneration
Dividends recognised
-
-
-
-
11
7,219
-
7,219
11
197
-
7,416
11
11
7,219
7,230
197
7,427
-
43,968
560
52,717
-
-
-
-
-
-
-
-
-
43,968
560
96
-
-
96
43,968
560
52,717
-
52,717
21
-
-
3,048
-
-
(9,311)
3,048
(9,311)
-
(96)
3,048
(9,407)
97,245
3,048
(9,311)
90,982
-
90,982
As at 30 June 2016
172,149
3,059
(28,626)
146,582
197
146,779
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
23
AMA GROUP LIMITED
(ACN 113 883 560)
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED STATEMENT OF CASHFLOWS
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other costs of finance paid
Income taxes paid
Note
30 Jun 2016
$’000
30 Jun 2015
$’000
262,973
(219,119)
361
(207)
(7,247)
101,901
(89,634)
4
(253)
(4,198)
Net cash flows used in operating activities
29
36,761
7,820
Cash flows from investing activities
Proceeds from sale of property plant and equipment
Proceeds from disposal of business
Payments for purchases of property plant and equipment
Payments for intangible assets
Payments for businesses acquired, net of cash acquired
Loans and other investments
25
841
(8,904)
(4)
(31,185)
1,020
74
-
(2,336)
(87)
(8,344)
-
Net cash flows (used in) / provided by investing activities
(38,207)
(10,693)
Cash flows from financing activities
Equity raised
Proceeds from borrowings
Repayment of borrowings
Dividends paid to AMA shareholders
Dividends paid to non-controlling shareholders
43,526
2,810
(14,803)
(9,311)
(96)
-
39,767
(31,447)
(5,348)
-
21
Net cash flows (used in) / provided by financing activities
22,126
2,972
Net (decrease) / increase in cash and cash equivalents
20,680
99
Cash and cash equivalents, at beginning of year
2,197
2,098
Effects of exchange changes on the balances held in foreign
currencies
11
-
Cash and cash equivalents, at the end of year
7
22,888
2,197
The above consolidated statement of cash flows is to be read in conjunction with the attached notes.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
24
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Index of Notes to the Financial Statements
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15
Note 16
Note 17
Note 18
Note 19
Note 20
Note 21
Note 22
Note 23
Note 24
Note 25
Note 26
Note 27
Note 28
Note 29
Note 30
Note 31
Note 32
Note 33
Significant Accounting Policies ..................................................................................................... 26
Critical Accounting Estimates and Judgements ............................................................................ 41
Segment Information ..................................................................................................................... 42
Revenue ........................................................................................................................................ 44
Expenses....................................................................................................................................... 44
Income Tax Expense .................................................................................................................... 45
Cash and Cash Equivalents .......................................................................................................... 46
Trade and Other Receivables ....................................................................................................... 46
Inventories ..................................................................................................................................... 47
Other Assets ................................................................................................................................. 47
Property, Plant and Equipment ..................................................................................................... 48
Intangible Assets ........................................................................................................................... 49
Deferred Tax Asset ....................................................................................................................... 51
Trade and Other Payables ............................................................................................................ 52
Borrowings .................................................................................................................................... 53
Provisions ...................................................................................................................................... 54
Deferred Tax Liability .................................................................................................................... 55
Contributed Equity ......................................................................................................................... 55
Reserves ....................................................................................................................................... 57
Non-Controlling Interests .............................................................................................................. 57
Dividends....................................................................................................................................... 57
Financial Instruments .................................................................................................................... 58
Share-Based Payments ................................................................................................................ 63
Related Party Transactions ........................................................................................................... 64
Contingent Liabilities ..................................................................................................................... 65
Commitments for Expenditure....................................................................................................... 66
Investments in Controlled Entities ................................................................................................. 67
Discontinued Operations ............................................................................................................... 71
Reconciliation of Profit after Tax to Operating Cash Flows .......................................................... 72
Earnings per Share ....................................................................................................................... 72
Parent Information ......................................................................................................................... 73
Class Order Disclosures ............................................................................................................... 74
Events Occurring after the Reporting Period ................................................................................ 77
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
25
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 1
Significant Accounting Policies
Basis of preparation
Basis of accounting
This general purpose financial report, for the year ended 30 June 2016, has 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, for AMA
Group Limited (“AMA” or the “Company”) and its controlled entities as a consolidated group (the “Group”).
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).
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all controlled entities in the
Group as at 30 June 2016 and the results of all controlled entities for the year then ended. A list of the
controlled entities is provided in Note 27 to these financial statements.
The separate financial statements of the Company have not been presented within this financial report as
permitted by amendments made to the Corporations Act 2001 effective as at 28 June 2011. Summarised
financial information relating to the Company has been disclosed in Note 31 to these financial statements.
Controlled entities are all those entities over which the Group has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than one-half of the voting rights.
Controlled entities are fully consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between controlled entities in the
Group are eliminated in full.
Investments in subsidiaries are accounted for at cost less impairment, in the separate financial statements of
the Company.
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.
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.
Rounding amounts
The Company is of a kind referred to in ASIC Class Order Co 98/100 and in accordance with that Class
Order, amounts in the financial statements have been rounded off to the nearest thousand dollars, or in
certain cases, to the nearest dollar.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
26
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 Group'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 to these financial statements.
Summary of principal 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.
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 Company’s functional and presentation currency.
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 Group’s products and services, net of returns,
trade allowances and duties and taxes paid. All revenues are stated net of goods and services taxes.
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 Revenue and revenue is recognised when all of the
following criteria are met:
•
•
•
•
•
the Group has transferred to the buyer the significant risks and rewards of ownership of the goods.
the Group 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 Group.
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
27
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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.
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
28
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 Group 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 Group. The expected useful
lives are as follows:-
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 Group, 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
29
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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
Group 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:
•
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
30
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
31
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable the Group 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 an 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 Group’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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
32
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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. the Company). 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 Company. At this date, the Company 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.
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
33
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 (i.e. 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. Quoted prices in an active market are used, where available,
to determine fair value. In other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
•
•
• 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.
•
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
34
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 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:
• contains an embedded derivative in the form of a put option; and
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
35
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
•
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.
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 Revenue.
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.
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
36
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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.
New accounting standards for application in future periods
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by
the Australian Accounting Standards Board (the “AASB”) that are relevant to their operations and effective for
annual reporting periods beginning on 1 July 2015.
The adoption of all new and revised Standards and Interpretations did not affect the amounts reported for the
current or prior periods. In addition, the new and revised Accounting Standards and Interpretations have not
had a material impact and not resulted in change to the Group’s presentation of or disclosure in these
financial statements.
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 2018)
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
37
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
To achieve this objective, AASB 15 provides the following five-step model:
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
•
•
• 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.
AASB 16: Leases (applicable for annual reporting periods commencing on or after 1st January 2019)
The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the
entity’s preliminary assessment, the likely impact on the first time adoption of the Standard for the year ending
30 June 2020 includes:
•
•
there will be a significant increase in lease assets and financial liabilities recognised on the balance sheet
the reported equity will reduce as the carrying amount of lease assets will reduce more quickly than the
carrying amount of lease liabilities
• EBIT in the statement of profit or loss and other comprehensive income will be higher as the implicit
interest in lease payments for former off balance sheet leases will be presented as part of finance costs
rather than being included in operating expenses
• operating cash outflows will be lower and financing cash outflows will be higher in the statement of cash
flows as principal repayments on all lease liabilities will be included in financing activities rather than
operating activities. Interest paid and received will also be included within financing activities.
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.
This Standard is not expected to significantly impact the Group’s financial statements.
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
38
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE 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 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 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
• 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.
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 financial statements.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
39
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE 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:
• 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.
• 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.
• 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.
• 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
40
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 Group and that are believed to
be reasonable under the circumstances.
Critical accounting estimates and assumptions
When preparing the financial statements, Management undertakes various judgements, estimates and
assumptions concerning the recognition and measurement of assets, liabilities, income and expenses. The
resulting accounting estimates will, by definition, seldom equate with the related actual results. The following
are significant judgements, estimates and assumptions made in applying the accounting policies of the Group
that have the most significant effect on the financial statements.
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 Group 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.
Fair value of financial instruments
Management uses valuation techniques to determine the fair value of financial instruments (where active
market quotes are not available). This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its assumptions on observable data as
far as possible but this is not always available. In that case, Management uses the best information available.
The carrying value of the deferred vendor consideration, payable as a result of the acquisition of businesses
and entities, incorporate a number of assumptions. In determining this value, Management 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
41
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 3
Segment Information
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.
The Group only operates within one geographical area, Australasia, and has historically been segmented by
the products it provides, being:
• Vehicle Panel Repair - Motor vehicle panel repairs.
• Vehicle Protection Products - Manufacture & distribution of motor vehicle protective bars.
• Automotive Electrical & Cable - Distribution of motor vehicle electrical & cable accessories.
• Automotive Component Remanufacturing - Motor vehicle component remanufacturing & repairs.
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.
All inter-segment transactions are eliminated on consolidation for the Group’s financial statements.
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.
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.
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:
income tax expense;
• derivatives;
• non-recurring items of revenue or expense;
•
• deferred tax assets and liabilities;
• other financial liabilities;
•
•
• dividend payments;
•
intangible assets; and
• discontinued operations.
fixed manufacturing & service costs and other cost of sales adjustments;
finance costs;
The Group has identified its operating segments based on the internal reports that are reviewed and used by
the Board and Executive Management in assessing performance and determining the allocation of resources.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
42
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Year to 30 June 2016
Revenue
External sales
Other income
Total sales & other income
Unallocated revenue
Total revenue
Result
Segment gross margin
Impairment expense
Unallocated expenses
Fair value adjustments
Profit from continuing operations before
income tax
Net assets
Segment assets
Unallocated assets
Total Assets
Segment liabilities
Unallocated liabilities
Total Liabilities
Year to 30 June 2015
Revenue
External sales
Other income
Total sales & other income
Unallocated revenue
Total revenue
Result
Segment gross margin
Unallocated expenses
Fair value adjustments
Profit from continuing operations before
income tax
Net assets
Segment assets
Unallocated assets
Segment liabilities
Unallocated liabilities
Panel
$’000
Protection
Electrical
Component
$’000
$’000
$’000
Total
$’000
211,549
571
212,120
27,591
977
28,568
123,730
12,579
15,030
208
15,238
4,393
(2,954)
7,732
282
8,014
3,203
197,823
21,024
11,553
3,577
(50,566)
(3,764)
(2,464)
(1,254)
42,465
4
42,469
26,752
955
27,707
16,128
132
16,260
6,468
292
6,760
26,184
12,014
5,118
2,687
13,795
13,542
6,497
2,912
(7,587)
(2,922)
(1,642)
(1,496)
261,902
2,038
263,940
344
264,284
143,905
(2,954)
(126,257)
(920)
13,774
233,977
22,144
256,121
(58,048)
(51,294)
(109,342)
91,813
1,383
93,196
1
93,197
46,003
(33,368)
(191)
12,444
36,746
46,441
83,187
(13,647)
(21,170)
(34,817)
Gross Margin for the Vehicle Panel Repair segment does not include direct labour or an allocation for overheads. These costs are
allocated to Unallocated.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
43
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 4
Revenue
From continuing operations
Sales revenue
Sale of goods
Service and hire
Other revenue
Interest received
Exchange rate gains / (loss)
Other revenue
30 Jun 2016 30 Jun 2015
$’000
$’000
50,352
211,550
261,902
361
102
1,919
49,348
42,465
91,813
4
(3)
1,383
2,382
1,384
Total revenue from continuing operations
264,284
93,197
Note 5
Expenses
30 Jun 2016 30 Jun 2015
$’000
$’000
Profit before income tax includes the following specific expenses:
Rental expense relating to operating leases (minimum lease payments)
Defined contribution superannuation expense
Executive equity plan expense
Consulting and advisory expense
Bad and doubtful debts expense / (recovery)
Inventory obsolescence expense
Loss / (profit) on disposal of assets
Depreciation and amortization expense
- Depreciation of property, plant & equipment
- Amortisation of intangible assets
Impairment expense
- Goodwill
- Other
Interest and finance charges paid / payable
Fees paid or payable to Shine Wing Australia (the Company’s Auditors) or its
related practices:
- Audit or review of the financial reports
- Other services
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
12,509
7,386
3,644
3,711
23
50
62
4,515
2,302
2,000
954
207
298
-
298
4,032
2,207
-
886
11
20
25
962
344
-
-
253
215
-
215
44
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 6
Income Tax Expense
Income tax expense
Current tax payable
Businesses acquired during the year
Current year tax instalments paid during the year
Deferred tax
Other
(Over)/Under provision in respect of prior year
30 Jun 2016 30 Jun 2015
$'000
$'000
1,828
(360)
6,400
(1,491)
-
(37)
949
-
2,218
389
24
(18)
Aggregate income tax expense
6,340
3,562
Deferred tax included in income tax expense comprises:
Decrease/(increase) in deferred tax assets
(Decrease)/increase in deferred tax liabilities
Reconciliation of prima facie tax payable to income tax expense:
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:
Employee equity plan
Impairment of intangible assets
Fair value adjustments
Non-deductible professional services fees
Recoupment of capital losses not previously brought to account
Other non-deductible items
(Over)/Under provision in respect of prior year
Income tax expense
Income tax expense attributable to:
- Continuing operations
- Discontinued operations
Income tax expense
Income tax expense attributable to:
- Members of the Company
- Non-controlling interests
Income tax expense
101
(1,592)
(1,491)
(127)
516
389
13,756
12,652
4,127
3,796
1,093
600
276
275
-
6
(37)
-
-
-
-
(398)
182
(18)
6,340
3,562
28
6,346
(6)
3,562
-
6,340
3,562
6,255
85
3,562
-
6,340
3,562
The applicable weighted average effective tax rates are as follows:
46.1%
28.2%
The Group is part of a tax consolidation group. See the income tax accounting policy in Note 1.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
45
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 7
Cash and Cash Equivalents
Cash on hand
Cash at bank
30 Jun 2016 30 Jun 2015
$'000
$'000
28
22,860
22,888
10
2,076
2,086
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
Balances attributable to discontinuing operations
Balance as per statement of cash flows
Note 8
Trade and Other Receivables
Current
Trade receivables
Less provision for impairment of receivables
Other receivables
22,888
-
22,888
2,086
111
2,197
30 Jun 2016 30 Jun 2015
$'000
$'000
18,704
(130)
18,574
4,207
8,382
(48)
8,334
2,959
22,781
11,293
There were no non-current trade or other receivables in either reported year.
Bad and doubtful trade receivables
The Group has recognised a provision of $130,000 (2015: $48,000) in respect of bad and doubtful trade
receivables during the year ended 30 June 2016.
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
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
30 Jun 2016 30 Jun 2015
$'000
$'000
130
-
130
48
-
48
46
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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
Discontinuing operation
Closing balance
Past due but not impaired
The ageing of the past due but not impaired receivables is shown below:
1 to 3 months
3 to 6 months
Over 6 months
Closing balance
48
69
20
(7)
-
130
93
22
(140)
74
(1)
48
30 Jun 2016 30 Jun 2015
$'000
$'000
4,772
-
-
4,772
266
-
-
266
Customers with balances past due but without provision for impairment at 30 June 2016 amount to
$4,772,000 (2015: $266,000). Management do not consider that there is any credit risk on the aggregate
balances after reviewing credit agency 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.
Note 9
Inventories
Raw materials and consumables
Work in progress
Finished goods
Note 10 Other Assets
Current
Prepayments
Non-Current
Prepayments
30 Jun 2016 30 Jun 2015
$'000
$'000
6,019
4,143
5,240
980
1,062
5,437
15,402
7,479
30 Jun 2016 30 Jun 2015
$'000
$'000
1,690
1,269
1,690
1,269
3,639
1,956
3,639
1,956
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
47
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 11 Property, Plant and Equipment
Leasehold improvements - at cost
less accumulated amortisation
Plant & equipment - at cost
less accumulated depreciation
Less impairment provision
Furniture & equipment - at cost
less accumulated depreciation
Motor vehicles - at cost
less accumulated depreciation
30 Jun 2016 30 Jun 2015
$'000
$'000
12,006
(3,824)
1,983
(283)
8,182
1,700
38,926
(14,330)
(1,651)
8,846
(3,414)
-
22,945
5,432
3,451
(1,807)
1,644
4,398
(2,206)
2,192
1,112
(548)
564
812
(434)
378
34,963
8,074
Movements in the fair values of Property, Plant & Equipment are set out below:
Leasehold
improvements
$'000
Plant &
Equipment
$'000
Furniture &
Fittings
$'000
Motor
vehicles
$'000
Total
$'000
Balance at 1 July 2014
Additions
Business acquisition
Disposals
Depreciation expense
Discontinued Operations
531
657
629
-
(117)
-
1,894
1,425
2,881
(110)
(641)
(17)
Balance at 30 June 2015
1,700
5,432
Balance at 1 July 2015
Additions
Business acquisitions
Disposals
Depreciation expense
1,700
3,830
2,798
(39)
(107)
5,432
4,971
16,802
(18)
(4,242)
208
238
296
(26)
(145)
(7)
564
564
523
676
(11)
(108)
144
84
293
(76)
(67)
-
378
378
481
1,411
(20)
(58)
2,777
2,404
4,099
(212)
(970)
(24)
8,074
8,074
9,805
21,687
(88)
(4,515)
Balance at 30 June 2016
8,182
22,945
1,644
2,192
34,963
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
48
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 12
Intangible Assets
Goodwill - at cost
Less impairment
Patents & Trademarks
Less amortisation
Customer contracts
Less amortisation
30 Jun 2016 30 Jun 2015
$'000
$'000
151,897
(8,545)
143,352
629
(192)
437
8,331
(2,589)
5,742
53,780
(6,545)
47,235
125
(46)
79
1,048
(316)
732
149,531
48,046
Movements in the carrying amounts of Intangible Assets are set out below:
Balance at 1 July 2014
Additions and adjustment
Acquired
Amortisation expense
Discontinuing operations
Balance at 30 June 2015
Additions and adjustment
Acquired
Impairment expense
Amortisation expense
Balance at 30 June 2016
Goodwill
Goodwill
$'000
Patents &
Trademarks
$’000
Customer
Contracts
$’000
Total
$,000
30,934
16,822
-
-
(521)
47,235
1,139
96,978
(2,000)
-
143,352
79
11
21
(28)
(4)
79
4
384
-
(30)
437
-
31,013
-
1,048
(316)
-
16,833
1,069
(344)
(525)
732
48,046
-
7,282
-
(2,272)
1,143
104,644
(2,000)
(2,302)
5,742
149,531
Goodwill is allocated to cash-generating units (“CGU”) which are based on the Group’s operating segments:
Vehicle Panel Repair
Vehicle Protection Products & Accessories
Automotive Electrical & Cable Accessories
Automotive Component Remanufacturing
30 Jun 2016 30 Jun 2015
$'000
$'000
125,285
11,414
5,349
1,304
27,067
11,515
7,349
1,304
143,352
47,235
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
49
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
During the current financial year, Management assessed the carrying value of the intangible assets of the
Automotive Electrical & Cable Accessories division following the internal restructure. Based on this
assessment of the current and prospective operating results for this unit and the prevailing market conditions
in which it operates, it was considered appropriate to impair this asset by $2.000 million.
The recoverable amount of the Group’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
following key assumptions:
Vehicle Panel
Repair
Vehicle
Protection
Products &
Accessories
Automotive
Electrical &
Cable
Accessories
Automotive
Component
Remanufacturing
Growth Rate %
Pre-tax discount rate %
0.00
7.50
0.00
8.00
0.00
8.80
0.00
8.80
The value in use calculations use 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 0.00%.
The pre-tax discount rates of 7.50% to 8.80% reflect Management’s estimate of the time value of money and
the Group’s weighted average cost of capital adjusted for additional risk factors associated with each
segment.
Impact of possible changes in key assumptions
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 (8.50%
instead of 7.50%), the group would not be required to recognise any further impairment of goodwill in relation
to this CGU.
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 (9.00%
instead of 8.00%), the group would not be required to recognise any further impairment of goodwill in relation
to this CGU.
Automotive Electrical & Cable 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 be not required to recognise any further impairment
of goodwill (2015: $714,631) in relation to this CGU.
If the estimated pre-tax discount rate for this CGU had been 1% higher than Management’s estimates (9.80%
instead of 8.80%), the group would be not required to recognise any further impairment of goodwill (2015:
$725,706) in relation to this CGU.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
50
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Automotive Component Remanufacturing 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 (9.80%
instead of 8.80%), 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:
Employee benefits
Provisions
Accrued expenses
Inventory
Doubtful debts
Other
Amounts recognised in equity:
Transaction costs on share issue
Deferred tax asset
30 Jun 2016 30 Jun 2015
$'000
$'000
3,102
1,070
394
134
39
100
1,315
-
107
130
15
47
4,839
1,614
388
388
68
68
5,227
1,682
At 30 June 2016, the Group has no un-recouped revenue losses (2015: $nil).
At 30 June 2016, the Group has estimated un-recouped capital losses of $3,747,900 (2015: $3,747,900) none
of which have been brought to account as a deferred tax asset.
The benefit of these losses will only be obtained if:
• 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.
• The companies continue to comply with the conditions for deductibility imposed by the law.
• No changes in tax legislation adversely affect the companies in realising the benefit from the deductions for
the losses.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
51
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 14
Trade and Other Payables
Current
Trade payables
Deferred income
Deferred vendor consideration
Other payables
Non-current
Deferred income
Deferred vendor consideration
Deferred Vendor Consideration
30 Jun 2016 30 Jun 2015
$'000
$'000
28,531
5,100
1,415
12,648
7,088
-
323
3,051
47,694
10,462
14,919
27,539
-
9,931
42,458
9,931
The Company has recorded deferred and contingent consideration to Business Vendors for $31.200 million
(2015: $11.215 million) 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
$28.954 million (2015: $10.254 million). Refer to Note 22 for further information on how fair value has been
determined for contingent consideration. An analysis of this liability by type of consideration follows:
Current
Cash Settlement
Share Settlement
Non-Current:
Cash Settlement
Share Settlement
Deferred Income
30 Jun 2016 30 Jun 2015
$’000
$’000
624
791
1,415
20,706
6,833
27,539
28,954
323
-
323
4,313
5,618
9,931
10,254
During the financial year, the Company has entered into an agreement with a key supplier. Under the terms of
this agreement, the Group purchases product and services from the supplier over an agreed period of time
and receives various preferential benefits; one of which is prepaid purchase rebates. To satisfy the
requirements of this agreement the Group must continue to purchase from this supplier or otherwise repay the
prepaid purchase rebate in accordance with agreed terms. The prepaid purchase rebate is being amortised as
the Group purchases products and services from the supplier. At year end, an amount of $5.100 million has
been classified as a current deferred income in relation to this rebate.
In previous financial years, similar agreements had been reached between other suppliers and the Group and
several of its controlled entities. The execution of the current year agreement resulted in the Group
terminating the agreements with these other suppliers and agreeing to repay the amounts outstanding under
these agreements.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
52
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 15 Borrowings
Current
Bank bills commercial loan
Lease liability
Non-current
Bank bills commercial loan
Lease liability
Total
Bank bills commercial loan
Lease liability
Financing arrangements
30 Jun 2016 30 Jun 2015
$'000
$'000
-
601
601
-
308
308
-
909
909
7,777
553
8,330
-
11
11
7,777
564
8,341
In January 2015, the Company renegotiated its finance facilities and extended the size and term of the
Westpac Bank Bill Business Loan facility. This extension was to assist with working capital requirements and
the funding of the acquisitions. The facility had a scheduled expiry of 24 November 2016 and was secured by
a fixed and floating charge over all of the assets and uncalled capital of the Company and its wholly owned
subsidiaries. It was subject to an annual review and included limited other reporting covenants. At year end,
the Company was in compliance with these covenants.
At year end the Group had unrestricted access to the following lines of credit:
Bank bills commercial loan facility
Used at balance date
30 Jun 2016 30 Jun 2015
$'000
$'000
12,000
12,000
-
7,777
On 24 August 2016, the Company entered into a new Facility Agreement with National Australia Bank Limited.
The key terms of this agreement are:
• a $40 million facility, with a tenor of 36 months, to assist in funding acquisitions and general corporate
needs;
• a $6.5 million lease facility to assist with the purchase of capital equipment;
• a $3.0 million bank guarantee facility to assist with securing property rental leases; and
• a $0.4 million letter of credit facility.
The Facility is secured by a fixed and floating charge over all of the assets of the Company and its wholly
owned subsidiaries and is subject to standard covenants.
The lease liabilities are 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
53
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 16 Provisions
Current
Annual leave
Long service leave
Dividends
Non-current
Long service leave
Make good
Onerous lease
Movements in provisions
30 Jun 2016 30 Jun 2015
$'000
$'000
6,603
2,604
151
2,002
1,549
119
9,358
3,670
1,132
1,865
1,378
4,375
246
-
-
246
Movements in each class of provision during the current financial year, other than employee benefits, are set
out below:
Dividends Make
Good
Onerous
Lease
Total
Carrying amount at beginning of year
119
-
-
119
Acquired
Arising during the year
Utilised
-
32
-
1,258
900
(293)
2,140
-
(762)
3,398
932
(1,055)
Carrying amount at end of year
151
1,865
1,378
3,394
Amounts not expected to be settled within the next 12 months
The current provision for annual leave is presented as current, since the Group does not have an
unconditional right to defer settlement. However, based on past experience, the Group 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 Group does not have an
unconditional right to defer settlement. However, based on past experience, the Group 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
30 Jun 2016 30 Jun 2015
$'000
$'000
4,728
365
1,061
722
5,093
1,783
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
54
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 17 Deferred Tax Liability
The balance comprises temporary differences attributable to:
Amounts recognised in statement of comprehensive income:
Sundry debtors
Customer contracts
Sundry items
Deferred tax liability
Note 18 Contributed Equity
30 Jun 2016 30 Jun 2015
$'000
$'000
997
1,723
-
2,720
843
-
19
862
Fully Paid Ordinary shares
Quoted
Unquoted
30 Jun 2016
Number
30 Jun 2015
Number
30 Jun 2016
$’000
30 Jun 2015
$’000
473,196,686
25,000,000
334,250,963
-
157,149
15,000
74,904
-
498,196,686
334,250,963
172,149
74,904
Quoted Fully Paid 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.
Unquoted Fully Paid Ordinary shares entitle the holder to all the same benefits and responsibilities of holders
of Quoted Fully Paid Ordinary shares with exception that they do not entitle the holder to participate in
dividends or vote at general meetings of the Company. As such they are not listed for trade on the ASX.
They have been issued as part consideration for the acquisition of Gemini Accident Repair Centres Pty Ltd
and are subject to a restriction period of two years. In the event that the business has met its earnings target
at the completion of this restriction period, the shares are then eligible to participate in dividends.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
55
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Movements in ordinary share capital
Date
Number
Issue Price
(Cents)
$’000
Quoted:
Opening balance
No shares were issued during the period
Opening balance
1 Jul 2014
1 Jul 2015
Share issued
Institutional placement
Employee share issue
Employee share issue
Employee share issue
Employee share issue
Vendor share issue
Vendor share issue
Vendor share issue
Vendor share issue
Vendor share issue
1 Jul 2015
15 Oct 2015
25 Apr 2016
19 May 2016
19 May 2016
6 Nov 2015
10 Dec 2015
4 Jan 2016
29 Jan 2016
19 May 2016
334,250,963
-
334,250,963
75,000,000
721,796
106,383
374,264
53,191
249,252
58,333,333
655,308
1,576,905
1,875,291
58.6
37.4
94.0
37.4
94.0
100.3
60.0
76.3
82.4
35.6
74,904
-
74,904
43,968
270
100
140
50
250
35,000
500
1,300
667
Closing balance
30 Jun 2016
473,196,686
157,149
Unquoted:
Opening balance
No shares were issued during the period
Opening balance
1 Jul 2014
1 Jul 2015
-
-
-
Share issued
Vendor share issue
10 Dec 2015
25,000,000
60.0
Closing balance
30 Jun 2016
25,000,000
Total
498,196,686
-
-
-
15,000
15,000
172,149
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
56
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 19 Reserves
Equity Based Remuneration Reserve
Foreign Exchange Translation Reserve
Note 20 Non-Controlling Interests
30 Jun 2016
$’000
30 Jun 2015
$’000
3,048
11
3,059
On 1 July 2015, the Group acquired 60.0% of the issued capital of Woods Auto Shops (Dandenong) Pty Ltd;
the operator of the Trackright businesses. The owners of the other 40.0% of issued capital are the
management of the Trackright business.
Opening Balance
Entity joins the Group
Share of result for the period
Dividends paid
Closing Balance
Note 21 Dividends
30 Jun 2016
$’000
30 Jun 2015
$’000
-
96
197
(96)
197
-
-
-
-
-
-
-
-
Dividends paid or declared during the period ended were:
Final dividend of 1.6 cents per share (fully franked), paid 3 Dec 2014
Final dividend of 1.7 cents per share, fully franked, paid 30 Oct 2015
Interim dividend of 0.5 cents per share, fully franked, paid 7 Apr 2016
30 Jun 2016
$’000
30 Jun 2015
$’000
-
6,957
2,354
9,311
5,348
-
-
5,348
Franking credits available for subsequent financial years based on tax
rate of 30%
4,748
1,832
On 29 August 2014, the Company declared a final dividend of 1.6 cents per share (fully franked at 30%) and
$5.316 million was paid on 3 December 2014.
On 31 August 2015, the Company declared a final dividend of 1.7 cents per share (fully franked at 30%) and
$6.957 million was paid on 30 October 2015.
On 26 February 2016, the Company declared an interim dividend of 0.5 cents per share (fully franked at 30%)
and $2.346 million was paid on 7 April 2016.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
57
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 22
Financial Instruments
Financial risk management
The Group's activities expose it to a variety of financial risks. These include market risk (including foreign
currency risk, price risk and interest rate risk), credit risk, and liquidity risk. The Group'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 Group. The Group 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 Executive Management under policies approved by the Board. Executive
Management identifies, evaluates and mitigates financial risks within the Group's operating units.
Market risk
Foreign currency risk
The Group continues to make purchases in foreign currencies and is therefore exposed to foreign currency
risk through foreign exchange rate fluctuations.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at
the end of the reporting period are set out below:
Consolidated
US Dollar
Assets
Liabilities
30 Jun 2016
$'000
30 Jun 2015
$'000
30 Jun 2016
$'000
30 Jun 2015
$'000
-
-
-
-
739
739
393
393
The Group had liabilities denominated in US Dollars of AUD $739,000 as at 30 June 2016 (2015: A$393,000).
Based on this exposure, had the Australian Dollar weakened/strengthened by 10% against the US Dollar with
all other variables held constant, the Group's result for the year and equity would have been $82,000
higher/lower (2015: A$36,000).
There were no assets or liabilities denominated in any other foreign currencies, other than US Dollars as at 30
June 2016 or as at 30 June 2015.
The foreign exchange (loss)/gain for the year ended 30 June 2016 was a gain of $102,000 (2015: $3,000
loss).
The Group 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 Group and the Company are not exposed to any significant price risk.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
58
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Interest rate risk
The Group and the Company's main interest rate risk arises from short and long-term borrowings. All
borrowings are issued at variable rates and this exposes the Group and the Company to interest rate risk.
The Group and the Company 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. At the end of the
financial year, the Group had bank bills outstanding of $Nil (2015: $7,777,000).
Credit risk
Credit risk is managed on a Group basis. Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group 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 the Notes to the Financial Statements.
As at 30 June 2016 the Group had no significant concentration of credit risk.
Liquidity risk
The Group 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 Group 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 Group’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 23rd December 2014, the Company extended its finance facility to allow the Group to draw-down up to $12
million (an extension of $2 million) on normal commercial terms and this facility continued to be available to
help fund earnings accretive acquisitions or other working capital needs. During the 2016 financial year, the
Group has met all of the obligations under the financing arrangements.
On 24 August 2016, the Company has executed a new finance Facility Agreement with the National Australia
Bank. This agreement has a tenor of 3 years and will allow the Company to draw-down up to $40.0 million in
debt, $6.5 million in finance leases, $3.0 million in guarantees and $0.4 million in letters of credit.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
59
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Remaining contractual maturities
The following table details the Group's remaining contractual maturity for its non-derivative 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 Group 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.
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
2016
Non-interest bearing
Trade payables
Other payables
Deferred cash consideration
Interest bearing - variable rate
Lease liability
Bank bills commercial loan
2015
Non-interest bearing
Trade payables
Other payables
Deferred vendor consideration
Interest bearing - variable rate
Lease liability
Bank bills commercial loan
28,531
12,648
1,455
-
-
10,429
-
-
19,316
5.76%
696
-
336
-
-
-
43,330
10,765
19,316
7,088
3,051
330
553
-
-
-
-
-
-
10,885
11
7,777
-
-
11,022
7,788
10,885
6.76%
4.67%
-
-
-
-
-
-
-
-
-
-
-
-
28,531
12,648
31,200
1,032
-
73,411
7,088
3,051
11,215
564
7,777
29,695
Fair value of financial instruments
The carrying value of financial instruments as shown in the Statement of Financial Position reflects their fair
value. These financial instruments 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).
•
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
60
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
2016
Financial Liabilities
Deferred Vendor Consideration
2015
Financial Liabilities
Deferred Vendor Consideration
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
-
-
-
-
-
28,954
28,954
28,954
28,954
10,254
10,254
10,254
10,254
The fair value of the financial instruments 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.
During the 2015 and 2016 financial years, the Group has acquired various operations. In undertaking these
acquisitions, the Group has incurred a contingent consideration liability consisting of an obligation to provide
shares in the Company and make an additional cash payment to the vendor if the average profits of the
acquisition for the earn-out period exceed a pre-specified target level. The fair value of this contingent
consideration is measured using a discounted cash flow methodology and determined on the basis of the
possible average profits of the acquisition, weighted by the probability of each scenario. The discount rate
used is based on the Group’s weighted average cost of capital.
The movement through these Level 3 items is reconciled below:
Carrying amount at beginning of year
Arising during the year
Fair Value adjustment
Payments
Charge to Profit
Carrying amount at end of year
30 Jun 2016
$'000
30 Jun 2015
$'000
10,254
21,057
(2,116)
(1,173)
932
-
11,539
(1,146)
(330)
191
28,954
10,254
During the 2016 financial year, the Group acquired Gemini Accident Repair Centres Pty Ltd (“Gemini”) and
Micra Accident Repair Centres Pty Ltd (“Micra”). In making these acquisitions the Group incurred a
contingent consideration liability consisting of an obligation to provide shares in the Company and make
additional cash payments to the vendors if the average profits of the acquired business exceeded a pre-
specified target level. For Gemini, this contingent consideration is capped at a maximum amount payable.
The fair value of this contingent consideration liability was measured using a discounted cash flow
methodology applying the Group’s cost of capital. In making this assessment, it has been assumed, that
where the arrangement is subject to a cap, the business will meet the pre-specified target and the maximum
will be payable. Where the arrangement is not subject to a cap, Management have determined an estimate of
the likely outcome, based on the possible average profit outcomes that may be achieved, weighted by the
probability of each scenario.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
61
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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
Unobservable Inputs
Used
Estimated Sensitivity of Fair Value Measurement
to Changes in Unobservable Inputs
If Gemini failed to meet its
earning target
Average EBITDA of
$13.333 million
The Gemini Discount rate
Discount rate of 3.3%
If the average EBITDA achieved over the period of
the earn out was 10.0% lower, the fair value of the
total deferred consideration would decrease by
$10.000 million
If discount rate was 0.1% (10 bps) higher, the fair
value of the total deferred consideration would
decrease by $47,000
If Micra failed to meet its
earning target
Anticipated growth rate
in EBIT of 5%
If growth rate was 1.0% higher / lower, the fair value
of the total deferred consideration would increase /
decrease by $87,000 / $86,000
The Micra Discount rate
Discount rate of 3.3%
If discount rate was 0.1% (10 bps) lower, the fair
value of the total deferred consideration would
increase by $12,000
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 Group’s capital includes ordinary share capital, debt facilities, vendor loans and lease liabilities supported
by financial assets. There are no externally imposed capital requirements.
Debt
Borrowings
Deferred Vendor Consideration
Cash & cash equivalents
Net debt
Fully Paid Ordinary Shares
Quoted (at market price)
Unquoted (at issue price)
Note
30 Jun 2016
$'000
30 Jun 2015
$'000
15
14
7
909
28,954
(22,888)
6,975
380,923
15,000
395,923
8,341
10,254
(2,086)
16,509
200,551
-
200,551
Total capital
402,898
217,160
Gearing ratio
Fully Paid Ordinary Shares Quoted value has been calculated using the closing share prices as at 30 June
each year.
1.73%
7.60%
The Group 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
62
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 23 Share-Based Payments
On 14 September 2015, the Company agreed to the new AMA Group Limited Employee Equity Plan (the
“Employee Equity Plan”). It was subsequently approved by shareholders at the annual general meeting held
on 27th November 2015. It replaces the old Employee Share Option Plan which was last approved by
Shareholders at the 2013 AGM. The Employee Equity Plan was adopted by the Board to ensure it meets the
July 2015 changes to Australian Taxation laws regarding deferred taxation on employee options and
performance rights and to adopt the requirements of ASIC Class Order 14/1000.
The Employee Equity Plan is for the benefit of all staff members employed by the Group, including Directors
and Executive Management. Under the Employee Equity Plan an eligible participant is invited to accept a
right to receive a share or option.
Shares
During the year ended 30 June 2016, the Company issued fully paid ordinary shares to employees in
consideration of these employees agreeing to enter into long term contracts with the Company and accepting
significant post-employment restraint provisions. The Shares were issued for non-cash consideration.
1,096,060 of these shares were issued at a deemed price of $0.374 per share while 159,574 were issued at a
deemed price of $0.940 per share.
At 30 June 2015, the Company had accrued an equity bonus entitlement for employees to the value $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.
Options
No options were issued during the financial year ended 30 June 2015 and there were no options remaining
unexercised at the end of that financial year.
During the year ended 30 June 2016, 18,875,000 options were issued and these options remained
unexercised at the end of that financial year. Each option vests after 12 months, is exercisable for $1.20 each
over the next 24 months and is convertible into 1 Fully Paid Ordinary Quoted Share in the Company. As
detailed in the Directors’ Report, 14,000,000 of these options had been issued to Key Management
Personnel. At the date of this report, 18,875,000 options remained unexercised.
The fair value of the options granted to employees is considered to represent the value of the employee
services over the vesting period. The fair value of these options was determined by an independent valuer
and calculated using a binomial option pricing methodology and the following assumptions:
November 2015 Options
April 2016 Options
Fair Value
Exercise Price
Current Share Price
Expected Life of the Option
Expected Volatility
Expected Dividend Yield
Risk Free Rate
$1.20
$1.00
2.6 years
40.0%
2.10%
2.09%
$0.10
$1.20
$0.87
2.6 years
40.0%
2.53%
1.98%
In calculating the fair value of these options, the independent valuer based on the historical volatility for the
Company’s shares sourced from the SIRCA data service. The binomial model used incorporates the Hull-
White adjustment. The Hull-White adjustment requires an assumption to be made that the options will be
exercised when the share price reaches a selected multiple of the option exercise price.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
63
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 24 Related Party Transactions
The Company
The ultimate holding entity is AMA Group Limited.
Controlled Entities
Investments in Controlled Entities are set out in Note 27.
Key Management Personnel
Further disclosures relating to Key Management Personnel are set out in the audited Remuneration Report
contained in the Directors' Report. The Group 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.
Compensation
The aggregate compensation made to Directors and other members of Key Management Personnel of the
Group is set out below:
Short-term employee benefits
Long-term benefits
Post-employment benefits
Share-based payments
Termination benefits
Total
Payments for Other Expenses
30 Jun 2016
$'000
30 Jun 2015
$'000
1,813
27
84
2,682
-
4,606
1,496
15
82
136
-
1,729
Payments were made during the year to the following related entities of Mr Raymond Malone.
Silvan Bond Pty Ltd - Rental fees
Malone Superannuation Fund - Rental fees
Mr Gloss Pty Ltd - Vendor payments & incentives
30 Jun 2016
$'000
30 Jun 2015
$'000
168
56
-
224
152
43
150
345
Payments were made during the year to the following related entities of Mr Andrew Hopkins.
AV Ventures Pty Ltd – Rental fees
Keyspace Developments Pty Ltd – Rental fees
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
30 Jun 2016
$'000
30 Jun 2015
$'000
130
308
438
-
-
-
64
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Payments were made during the year to the following related entities of Mr Raymond Smith-Roberts.
30 Jun 2016
$'000
30 Jun 2015
$'000
SFRE Pty Ltd – Rental Fees
155
-
On 23rd 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. Mr Hugh Robertson was, at that time, associated
with this firm. The placement was completed during July 2015 and a fee of $691,875 was paid to Wilson HTM
Corporate Finance Limited.
On 12th February 2016, the Company appointed PSC Insurance Brokers (Aust) Pty Ltd as its General
Insurance Broker. Mr Brian Austin is associated with this firm. No fee was paid by the Group for these
services during the financial year.
The Group utilises Foster, Nicholson Jones for legal and advisory services. Mr Leath Nicholson is associated
with this firm. Since the time of his appointment on 23rd December 2015, the Group has paid Foster
Nicholson Jones $435,264.
Trade Receivables from and Trade Payables 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
There are no loans with related parties outstanding at the end of the reporting period.
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 25 Contingent Liabilities
Unsecured guarantees, indemnities and undertakings have been given by the Company in the normal course
of business in respect of financial trade arrangements entered into by its subsidiaries and a Deed of Cross
Guarantee (Note 32) was entered into with its continuing subsidiaries during the financial year ended 30 June
2016. It is not practicable to ascertain or estimate the maximum amount for which the Company may become
liable in respect thereof. At 30 June 2016 no subsidiary was in default in respect of any arrangement
guaranteed by the Company and all amounts owed have been brought to account as liabilities in the financial
statements.
Bank guarantees
30 Jun 2016
$’000
30 Jun 2015
$’000
1,863
1,863
649
649
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
65
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 26 Commitments for Expenditure
Capital commitments - property, plant & equipment
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 – 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
After more than five years
less future finance charges
Represented as:
Current commitment
Non-current commitment
30 Jun
2016
$'000
30 Jun
2015
$'000
Note
1,970
-
-
1,970
-
-
-
-
12,800
22,869
5,607
4,497
5,275
785
41,276
10,557
696
336
-
1,032
(123)
553
11
-
564
-
909
564
601
308
909
553
11
564
15
15
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.
During the current financial year, the Group acquired businesses that had non-cancellable leases for property
that were deemed by Management to be onerous contracts. In these instances a provision was raised to
reflect the least net cost of exiting from the contract; which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it. This provision will unwind over the remaining period
of the lease terms. No operating leases had been recognised as onerous lease liabilities at 30 June 2015.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
66
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 27
Investments in Controlled Entities
Name of entity
Country of
incorporation
Class of
shares
Equity
holding
2016
%
Equity
holding
2015
%
A.C.N. 107 954 610 Pty Ltd (*) (a)
A.C.N. 122 879 814 Pty Ltd (*) (b)
A.C.N. 124 414 455 Pty Ltd (*)
AECAA Pty Ltd (c)
Custom Alloy Pty Ltd
ECB Pty Ltd
FluidDrive Holdings Pty Ltd
Mr Gloss Holdings Pty Ltd
Phil Munday’s Panel Works Pty Ltd (d)
Repair Management Australia Pty Ltd (d)
Repair Management Australia Bayswater Pty Ltd (d)
Repair Management Australia Dandenong Pty Ltd (d)
BMB Collision Repairs Pty Ltd (e)
Shipstone Holdings Pty Ltd (e)
Woods Auto Shops (Dandenong) Pty Ltd (f)
Gemini Accident Repair Centres Pty Ltd (g)
Gemini Accident Repair Centres Limited (g)
Ripoll Pty Ltd (*) (h)
Woods Auto Shops (Holdings) Pty Ltd (h)
Rapid Accident Management Services Pty Ltd (h)
Woods Auto Shops (Cheltenham) Pty Ltd (*) (h)
Micra Accident Repair Centre Pty Ltd (i)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
New Zealand Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
Note:
(*) Dormant
(a) Previously known as Alanco Australia Pty Ltd
(b) Previously known as Perth Brake Parts Pty Ltd. Name changed when business disposed on 1 February 2016
(c) Previously known as KT Cable Accessories Pty Ltd
(d) Acquired on 01 July 2015
(e) Registered on 12 December 2014
(f) Acquired on 01 July 2015
(g) Acquired on 01 October 2015
(h) Acquired on 1 November 2015
(i) Acquired 4 January 2016
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
67
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Business Combinations
During the financial year, the Group successfully acquired:
• On 1 July 2015, 60.0% of the issued capital of Woods Auto Shops (Dandenong) Pty Ltd; the operator of
the Trackright businesses;
• On 1 October 2015, 100% of the issued capital of Gemini Accident Repair Centres Pty Ltd; the operator of
the Gemini businesses;
• On 1 November 2015, 100% of the issued capital of Ripoll Pty Ltd; the holding company for the Woods
Auto Shops Group of businesses;
• On 4 January 2016, 100% of the issued capital of Micra Accident Repair Centre Pty Ltd; the operator of the
Micra business;
• And the following businesses:
o Auto Innovations on 1 July 2015;
o Stanleys Body Works on 9 October 2015;
o BDS Panels on 4 January 2016; and
o Keswick Crash Repairs on 1 February 2016.
Trackright is a specialist repairer of vehicles and has two facilities located in South East Melbourne, both
servicing Metropolitan Melbourne and regional locations. It provides specialist mechanical repairs, parts and
remanufacturing services for accident damaged steering, drive train and safety components. This acquisition
is expected to increase the Group’s product offering and market share and reduce costs through economies
of scale.
The Group acquired 60% of the issued capital for a cash payment of $750,000. The other 40% of issued
capital is controlled by Trackright management.
From the date of acquisition to 30 June 2016, this entity generated revenue of $5.272 million and gross
margin of $2.667 million.
Gemini’s repair centres are located across Australia and in New Zealand, and when added to AMA’s existing
repair centre presence in Victoria and Queensland, create a strong national footprint with 70 centres across
NSW, Queensland, Victoria, ACT and WA. Management believe that this deal has considerable strategic
value for the Group because:
•
•
•
•
it brings together two of the leading consolidators in the accident repair industry;
the combined group is extremely well placed to participate in the ongoing consolidation process;
it further cements the Group’s leading position in the accident repair market; and
it provides the Group with a step change growth opportunity.
The transaction payment was structured as follows:
• an upfront cash payment of $28.913 million (being $35.000 million less Gemini’s deficiency in working
capital);
• Two tranches of AMA shares will be issued at a price of 60 cents per share escrowed for 3.5 years:
o $35.000 million of ASX quoted shares. The holders of these shares will be entitled to dividends during
the escrow period;
o $15.000 million in non-quoted shares;
• An additional cash payment at the end of the escrow period;
• The two tranches of shares and the additional cash payment will be adjusted downwards if the
performance hurdle is not met during the escrow period.
From the date of acquisition to 30 June 2016, this entity generated revenue of $121.769 and gross margin of
$71.520 million.
In May 2015, the Group announced that it had entered into contractual arrangements to provide all the
management for the operations of Woods Auto Shops Group for six months and had secured an option to
acquire Woods at the end of that period. Subsequently it was announced that the Group had exercised its
option and acquired these operations.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
68
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Woods Auto Shops Group was one of the largest privately owned accident repair networks in Australia, with
fourteen branches located throughout metropolitan Melbourne. Management believe that the opportunity to
acquire Woods was very appealing because of the synergies that could be derived and the increased footprint
it provided the Group in Victoria.
The purchase price was settled by a cash payment of $1.006 million and the issuance of $250,000 of shares.
From the date of acquisition to 30 June 2016, this entity generated revenue of $17.356 million and gross
margin of $10.266 million.
Micra, (previously Longford Bodyworks), is a Vehicle Panel Repair business servicing the North Tasmania
market. It began in 1980 from a backyard garage and in 2008, the business relocated to its current location, a
state of the art facility specialising in large and small smash repairs, located near Launceston Airport,
Tasmania. The business has built strong relationships with various insurance groups, including Suncorp with
which it has a long term contract.
This acquisition was seen to be a strategic entry point into the Tasmanian Vehicle Repair market and
expanding the Group’s national footprint.
The total consideration for this acquisition includes initial cash consideration of $1.807 million and $500,000 of
shares that will be subject to escrow. The purchase price will also include an “earn out” component.
From the date of acquisition to 30 June 2016, this entity generated revenue of $3.368 million and gross
margin of $2.161 million.
During the financial year, the Group acquired various operating businesses. These acquisitions are expected
to increase the Group’s product offering and market share and reduce costs through economies of scale.
Auto Innovations is a Vehicle Panel Repair business operating in Braeside, Victoria. The business was
acquired for a cash payment of $74,000. The value of net tangible assets acquired through this transaction
was in excess of the consideration paid and therefore the Group has recorded a gain on acquisition of
$84,000.
BDS Panels is a Vehicle Panel Repair operation based in Mornington, Victoria. This business operates from
a two acre property, providing opportunity for expansion and is the premier site in this region. The purchase
price for this business was a cash payment of $865,000.
Stanley’s Body Works is a Vehicle Panel Repair business operating from two sites in the Western Suburbs of
Melbourne, Victoria. It was acquired for a cash payment of $100,000 and shares of $1.300 million.
Keswick Crash Repairs is a Vehicle Panel Repair business operating in Adelaide, South Australia. It was
acquired for cash consideration of $290,000.
From the date of acquisition to 30 June 2016, these acquisitions generated revenue of $8.855 million and
gross margin of $5.224 million.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
69
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Details of these acquisitions are as follows:
Gemini
$’000
Woods
$’000
Micra
$’000
Other
$’000
Total
$’000
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Plant and equipment
Deferred tax assets
Other non-current assets
Trade payables and accruals
Provisions
Income tax payable
Borrowings
Deferred tax liabilities
Non-controlling interests
2,333
9,152
3,393
1,033
16,208
1,411
2,044
(25,760)
(5,224)
(143)
(3,887)
(2,185)
-
(43)
1,443
1,776
78
2,909
525
-
(3,855)
(4,129)
-
-
-
-
288
355
21
16
967
41
681
(659)
(101)
(36)
(417)
-
-
37
696
114
13
1,512
158
-
(391)
(585)
(20)
(254)
(314)
(96)
2,615
11,646
5,304
1,140
21,596
2,135
2,725
(30,665)
(10,039)
(199)
(4,558)
(2,499)
(96)
Net assets acquired
(1,625)
(1,296)
1,156
870
(895)
Intangible
- Customer Contracts
- Goodwill
7,283
88,015
-
2,552
-
4,552
-
2,516
7,283
97,635
Total consideration
93,673
1,256
5,708
3,386
104,023
Representing:
Cash paid or payable
Shares issued
Cash to be paid
Shares to be issued
Fair Value Adjustments
28,913
50,000
16,100
-
(1,340)
1,006
250
-
-
-
1,807
500
3,216
600
(415)
1,986
1,300
100
-
-
33,712
52,050
19,416
600
(1,755)
93,673
1,256
5,708
3,386
104,023
Acquisition costs
423
183
41
21
668
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
70
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 28 Discontinued Operations
(a) Description
On 10 December 2015, the Company announced that it had entered into a binding contract to sell the
business and assets of Perth Brake Parts, a business based at 20 Bellows Street, Welshpool, Western
Australia. The sale of this business was completed on 1 February 2016.
Financial Information relating to this disposal group for the respective reporting periods has been classified as
a discontinued operation and is set out below.
(b) Financial Information
Operating Result
Revenue
Expenses
Profit before income tax
Income tax expense
Profit (loss) from discontinued operations
Financial Position
Cash and cash equivalents
Trade receivables
Inventories
Other current assets
Plant and equipment
Intangible assets
Trade and other payables
Provisions
Intercompany loans
Cash Flow
Net cash inflow (outflow) from ordinary activities
Net cash inflow (outflow) from investing activities
Net cash inflow (outflow) from financing activities
Net cash inflow (outflow)
1 Feb 2016 30 Jun 2015
$’000
$’000
1,437
(1,455)
(18)
6
(12)
2,602
(2,394)
208
(63)
145
39
131
452
12
26
524
111
158
473
12
24
524
1,184
1,302
180
96
276
287
563
621
(513)
831
(429)
(111)
240
116
356
400
756
546
258
(234)
-
24
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
71
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 29 Reconciliation of Profit after Tax to Operating Cash Flows
Profit after income tax
Non-controlling interest
Income tax expense
Income tax paid
Depreciation and amortisation expense
Impairment expense
Deferred income amortisation
Equity issued in consideration of employment obligations
Onerous leases
Fair value adjustments
Other
(Increases)/decreases in accounts receivable
(Increases)/decreases in inventories
(Increases)/decreases in prepayments
(Increases)/decreases in other assets
Increases/(decreases) in accounts payable
Increases/(decreases) in current provisions
Increases/(decreases) in non-current provisions
Increases/(decreases) in other liabilities
Net operating cash flows
Note 30 Earnings per Share
Profit after income tax attributable to members of AMA Group Ltd
- From continuing operations
- From discontinued operations
Weighted average number of ordinary shares used in calculating
basic earnings per share
Adjustments for calculation of diluted earnings per share
Continuing operations:
- Basic earnings per share
- Diluted earnings per share
Discontinued operations:
- Basic earnings per share
- Diluted earnings per share
Continuing and discontinued operations:
- Basic earnings per share
- Diluted earnings per share
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
30 Jun 2016
$'000
30 Jun 2015
$'000
7,134
282
6,340
(7,247)
6,825
2,954
(2,981)
3,644
(775)
920
24
305
(3,495)
(165)
643
8,222
(287)
(142)
14,560
36,761
9,090
-
3,562
(4,198)
1,314
-
-
-
-
191
64
(2,240)
(1,379)
726
-
346
344
-
-
7,820
30 Jun 2016
$'000
30 Jun 2015
$'000
7,242
(12)
7,230
8,945
145
9,090
Number
Number
457,536,805
10,777,397
334,250,963
-
468,314,202
334,250,963
Cents
Cents
1.58
1.55
-
-
1.58
1.55
2.68
2.68
0.04
0.04
2.72
2.72
72
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 31 Parent Information
The following information has been extracted from the books and records of the Company and has been
prepared in accordance with accounting standards.
30 Jun 2016
$'000
30 Jun 2015
$'000
17,456
109,385
11,819
51,139
945
46,005
2,600
69,655
58,246
(23,650)
172,149
3,048
(116,951)
74,904
-
(98,554)
58,246
(23,650)
(9,086)
(5,966)
(9,086)
(5,966)
Assets
Current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Profit/(loss) for the year
Total comprehensive income /(loss)
Guarantees and contingent liabilities
Refer to Note 25 for details of guarantees and contingent liabilities.
Contractual commitments
Refer to Note 26 for details of contractual commitments.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
73
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 32 Class Order Disclosures
The consolidated financial statements of the Group incorporate the assets, liabilities and results of the
controlled entities detailed in Note 27 prepared in accordance with the accounting policy described in Note 1.
Pursuant to Class Order 98/1418, relief has been granted from the Corporations Act 2001 requirements for
the preparation, audit and lodgement of financial reports for the controlled entities detailed below.
Name of entity
A.C.N. 124 414 455 Pty Ltd
Alanco Australia Pty Ltd
Custom Alloy Pty Ltd
ECB Pty Ltd
FluidDrive Holdings Pty Ltd
KT Cable Accessories Pty Ltd
Mr Gloss Holdings Pty Ltd
BMB Collision Repairs Pty Ltd
Shipstone Holdings Pty Ltd
Repair Management Australia Pty Ltd
Phil Munday’s Panel Works Pty Ltd
Repair Management Australia Bayswater Pty Ltd
Repair Management Australia Dandenong Pty Ltd
Gemini Accident Repair Centres Pty Ltd
Ripoll Pty Ltd
Woods Auto Shops (Holdings) Pty Ltd
Rapid Accident Management Services Pty Ltd
Woods Auto Shops (Cheltenham) Pty Ltd
Country of
incorporation
Equity holding
2016
%
2015
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
-
-
As a condition of the Class Order, the above entities entered into a Deed of Cross Guarantee on 31 March
2016. 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 detailed above or if they do not meet their obligations under the terms of
overdrafts, loans, leases or other liabilities subject to guarantee. The controlled entities detailed above 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.
The Trustee to this deed of cross guarantee is Ripoll Pty Ltd; which is a member of the consolidated group.
The Alternate Trustee to this deed of cross guarantee is Woods Auto Shops (Cheltenham) Pty Ltd; which is
also a member of the consolidated group. The continuing entities and only the continuing entities are included
in the deed of cross 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
Guarantee (as a financial guarantee to the Company) 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
25 for further information on financial guarantees).
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
74
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
The Statement of Comprehensive Income of the entities that are members of the Closed Group is shown
below.
Revenue from continuing operations
Raw materials and consumables used
Employment benefits expense
Occupancy expense
Travel and motor vehicle expense
Professional services expense
Advertising and marketing expense
Insurance expense
Research and development expense
Information technology expense
Communication expense
Other expense
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
Depreciation and amortisation expense
Impairment expense
Earnings before interest and tax (EBIT)
Finance costs
Profit from continuing operations before fair value adjustments
Fair value adjustments to financial liabilities
Profit (loss) before income tax from continuing operations
Profit (loss) before tax from discontinued operations
Profit (loss) before income tax
Income tax benefit / (expense)
Net profit (loss)
30 Jun 2016 30 Jun 2015
$’000
$’000
257,260
(108,146)
(95,756)
(17,518)
(2,124)
(3,781)
(1,607)
(741)
(259)
(806)
(674)
(1,410)
24,438
(6,767)
(2,954)
14,717
(205)
14,512
(920)
13,592
-
13,592
(6,128)
7,464
95,774
(41,944)
(28,602)
(5,727)
(1,106)
(1,102)
(926)
(312)
(274)
(315)
(313)
(743)
14,410
(1,314)
-
13,096
(253)
12,843
(191)
12,652
-
12,652
(3,562)
9,090
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
75
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
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 Jun 2016
$'000
30 Jun 2015
$'000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Intangibles
Investment in controlled entities
Receivables from related entities
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
Reserves
Accumulated losses
Total equity
22,751
21,907
15,209
1,708
61,575
34,463
5,228
148,938
605
391
3,640
1,314
8,507
6,026
908
16,755
1,640
1,682
51,117
-
(5,532)
1,957
193,265
50,864
254,840
67,619
47,022
601
1,792
9,335
58,750
308
2,715
4,375
42,458
49,856
108,606
146,234
172,149
3,039
(28,954)
6,503
-
950
2,541
9,994
7,777
862
168
9,931
18,738
28,732
38,887
74,904
-
(36,017)
146,234
38,887
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
76
AMA GROUP LIMITED
(ACN 113 883 560)
NOTES TO THE FINANCIAL STATEMENTS
Note 33 Events Occurring after the Reporting Period
As outlined in Note 22, the Company entered into a new Facility Agreement with National Australia Bank
Limited on 24 August 2016. It is intended that this facility will assist the Group in financing its future
requirements for working capital, capital expenditure and business acquisitions.
On 26 August 2016, the Directors declared a fully franked dividend of 1.70 cents per security, which is to be
paid on 31 October 2016.
No other matters or circumstances have arisen since 30 June 2016 that have significantly affected, or may
significantly affect the Group's operations in future financial years, the results of those operations in future
financial years, or the Group's state of affairs in future financial years.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
77
AMA GROUP LIMITED (ACN 113 883 560) DIRECTORS’ DECLARATION FOR THE YEAR ENDED 30 JUNE 2016 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016 78 DIRECTORS’ DECLARATION In the Directors' opinion: a. the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including: i. complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and ii. giving a true and fair view of the Group's financial position as at 30 June 2016 and of its performance for the financial Year ended on that date; and b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Directors made pursuant to section 303(5) of the Corporations Act 2001. On behalf of the Directors Director 26 August 2016 AMA GROUP LIMITED
(ACN 113 883 560)
AUDITORS’ REPORT
AUDITORS’ REPORT
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
79
AMA GROUP LIMITED
(ACN 113 883 560)
AUDITORS’ REPORT
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
80
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE GOVERNANCE STATEMENT
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 Executive 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 Executive 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 Executive 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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
81
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE GOVERNANCE STATEMENT
The following table demonstrates the Company’s gender diversity amongst employees and contractors as at
30 June 2016.
Board
Executive Team
Employees
Women (Qty.) 2016
Women (Qty.) 2015
0
0
Encourage Enhanced Performance
1
1
197
50
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 5 to 7
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;
A number of the Directors being independent as defined in the ASX Corporate Governance Guidelines;
and
Some major Shareholders being represented on the Board.
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 six Directors of whom three Directors, Hugh Robertson, Leath Nicholson and Brian
Austin, are considered to be independent. The Board believes the existence of three independent directors
on the Board provides sufficient independent judgement to the Board at this time.
The Board is chaired by Raymond Malone who is also the Company’s Chief Executive Officer. 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 Chief Executive Officer roles being exercised by
the same individual.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
82
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE GOVERNANCE STATEMENT
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.
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
83
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE GOVERNANCE STATEMENT
Principle 4: Safeguard integrity in corporate reporting.
Audit Committee
The Company has a duly constituted Audit Committee currently consisting of three 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 pages
5 to 7.
The Committee holds a minimum of two meetings a year. Details of attendance of the members of the Audit
Committee are contained on page 5.
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.
Chief Executive Officer and Chief Financial Officer Declarations
The Chief Executive Officer and Chief Financial Officer 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
2 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.
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
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
84
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE GOVERNANCE STATEMENT
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. Executive 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 2016
financial year.
Executive 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, Executive
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 the Chief Financial Officer 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 5 to 7
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 24: Related Party Transactions.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
85
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE GOVERNANCE STATEMENT
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
86
AMA GROUP LIMITED
(ACN 113 883 560)
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
In accordance with the ASX Listing Rules the following information, as at 18 August 2016, is provided:
Substantial holders
The Company hold current substantial holder notifications in accordance with section 671B of the
Corporations Act for the following:
Greencape Capital Pty Ltd (Notice dated 12 Feb 2016)
28,340,907
6.02%
Number of holders of equity securities
473,196,686 Fully Paid Ordinary Quoted shares are held by 2,709 individual holders.
25,000,000 Fully Paid Ordinary Unquoted shares are held by 11 individual holders; with all holders having in
excess of 100,000 units.
12,000,000 unquoted options over Fully Paid Ordinary Quoted shares exercisable at $1.20 each before 27
November 2018 held by 2 holders; with all holders having in excess of 100,000 units.
6,875,000 unquoted options over Fully Paid Ordinary Quoted shares exercisable at $1.20 each before 25 April
2019 held by 9 holders; with all holders having in excess of 100,000 units.
Voting rights
The voting rights attached to Fully Paid Ordinary shares are set out below:
Fully Paid Ordinary Quoted 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.
Fully Paid Ordinary Unquoted shares
No voting rights
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Holders
Ordinary
Shares
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Holding less than a marketable parcel
225
1,154
1,067
214
111,766
6,154,535
35,769,718
64,014,888
49 367,145,779
2,709 473,196,686
105
9,720
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
87
AMA GROUP LIMITED
(ACN 113 883 560)
SHAREHOLDER INFORMATION
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Shareholder
Number Held
% of Total
Shares Held
Mr Gloss Pty Limited
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Cedarfield Holdings Pty Ltd
National Nominees Limited
UBS Nominees Pty Ltd
RBC Investor Services Australia Nominees Pty Ltd
Citicorp Nominees Pty Ltd
Mr Raymond Malone & Mrs Leona Malone
Mirrabooka Investments Limited
Citicorp Nominees Pty Ltd
Sherdley Investments Pty Ltd
Mr Richard John Calver
Birdlake Holdings Pty Ltd
Yerrus Holdings Pty Ltd
BNP Paribas Nominees Pty Ltd
Amcil Limited
Magnacon Pty Ltd
Jese Pty Ltd
Mr Ian Charles Lindeman + Mrs Margaret Lindman
67,961,015
39,924,738
35,814,066
35,239,167
24,639,369
23,924,677
10,606,433
10,390,723
8,490,335
7,015,136
6,904,000
6,189,167
5,990,256
4,958,333
4,947,404
4,635,049
4,271,838
4,013,334
3,674,669
3,590,001
14.36
8.44
7.57
7.45
5.21
5.06
2.24
2.20
1.79
1.48
1.46
1.31
1.27
1.05
1.05
0.98
0.90
0.85
0.78
0.76
313,179,710
66.18%
Unquoted equity shareholders
The names of security holders who hold 20% or more of the unquoted equity share class are as follows:
Cedarfield Holdings Pty Ltd
15,102,500
60.41%
Securities subject to escrow
Class of Security
Number
Date Escrow period ends
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Quoted
Fully Paid Ordinary Unquoted
774,337
249,252
309,735
507,614
2,000,000
267,332
106,383
58,333,333
577,067
1,576,905
655,308
25,000,000
16 Oct 2016
5 Nov 2016
16 Jul 2017
21 Sep 2017
19 Dec 2017
1 Jan 2019
25 Apr 2019
9 Jun 2019
30 Jun 2019
28 Jul 2019
3 Jan 2020
9 Jun 2019
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
88
AMA GROUP LIMITED
(ACN 113 883 560)
SHAREHOLDER INFORMATION
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.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
89
AMA GROUP LIMITED
(ACN 113 883 560)
CORPORATE DIRECTORY
CORPORATE DIRECTORY
Directors
Mr Raymond Malone (Chairman and Executive Director)
Mr Brian Austin (Non-Executive Director)
Mr Leath Nicholson (Non-Executive Director)
Mr Hugh Robertson (Non-Executive Director)
Mr Andrew Hopkins (Executive Director)
Mr Raymond Smith-Roberts (Executive Director)
Executive Management
Mr Raymond Malone (Chief Executive Officer)
Mr Andrew Hopkins (Chief Executive Officer – Vehicle Panel Repair Division)
Mr Raymond Smith-Roberts (Chief Executive Officer - Automotive Components & Accessories Divisions)
Mr Ashley Killick (Chief Financial Officer)
Company Secretaries
Mr Phillip Hains
Mrs Terri Bakos
Registered Office
C/o The CFO Solution (ABN 30 128 557 068)
Suite 1, 1233 High Street, ARMADALE, VICTORIA, 3143, AUSTRALIA
PO Box 8694, ARMADALE, VICTORIA, 3143, AUSTRALIA
Telephone: +61 3 9824 5254
Facsimile: +61 3 9822 7735
Principal Place of Business
29 Snook Street, CLONTARF, QUEENSLAND, 4019, AUSTRALIA
P.O. Box 122, MARGATE, QUEENSLAND, 4019, AUSTRALIA
Telephone: +61 7 3897 5743
Facsimile: +61 7 3283 5743
Web: www.amagroupltd.com
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street, ABBOTSFORD, VICTORIA AUSTRALIA
GPO Box 2975, MELBOURNE VICTORIA 3001 AUSTRALIA
Telephone: +61 3 9415 4000
Telephone: 1300 787 272 (Within Australia)
Facsimile: +61 3 9473 2500
Auditor
Shine Wing
Level 10, 530 Collins Street, MELBOURNE VICTORIA 3000 AUSTRALIA
Solicitors
Foster Nicholson Jones
Level 7, 420 Collins Street, MELBOURNE VICTORIA 3000 AUSTRALIA
Bankers
National Australia Bank
Westpac Banking Group
Stock Exchange Listing
AMA Group Limited shares are listed on the Australian Securities Exchange, code AMA.
ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
90