More annual reports from AMA Group Limited:
2023 ReportPeers and competitors of AMA Group Limited:
Global PartnersWorld Class
Automotive Solutions
ANNUAL
REPORT
FOR THE YEAR ENDED 30 JUNE 2021
AMA GROUP LIMITED | ABN 50 113 883 560
SHAREHOLDERS INFORMATION
AMA GROUP LIMITED
ABN 50 113 883 560
Level 4, 130 Bundall Road
BUNDALL, QUEENSLAND, 4217
AUSTRALIA
Telephone: +61 7 5628 3272
Website: amagroupltd.com
Email: info@amagroupltd.com
Shareholder information and enquiries
All enquiries and correspondence regarding
shareholdings should be directed to
AMA Group’s share registry provider:
Computershare Investor Services Pty Limited
GPO Box 2975
MELBOURNE, VICTORIA, 3001
AUSTRALIA
Telephone: +61 3 9415 4000
Telephone: 1300 787 272
(Within Australia)
Website: computershare.com.au
Email: web.queries@computershare.com.au
Stock Exchange Listing
AMA Group Limited shares are listed on the
Australian Securities Exchange, code AMA.
2
WORLD CLASS AUTOMOTIVE SOLUTIONS ANNUAL
REPORT
FOR THE YEAR ENDED 30 JUNE 2021
TABLE OF CONTENTS
BUSINESS REVIEW
Chair of the Board and Chief Executive Officer’s Review
DIRECTORS’ REPORT
Introduction
Review and Results of Operations
Directors and Officers
Annual Statement by the People, Culture, Remuneration and Nomination Chair
Remuneration Report
Auditor’s Independence Declaration
FINANCIAL REPORT
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
OTHER INFORMATION
ASX Additional Information
4
8
9
13
18
19
38
39
45
105
106
114
This is an interactive PDF designed to enhance your experience. The best way to view this
report is with Adobe Reader. Click on the links on the contents pages to navigate the report.
Click the
AMA logo in the footer to return to this contents page.
3
AMA GROUP LIMITED | 30 JUNE 2021
CHAIR OF THE
BOARD AND
CHIEF EXECUTIVE
OFFICER’S
REVIEW
On behalf of the Board, it is our pleasure to present AMA Group Limited’s Annual Report
for the year ended 30 June 2021.
Carl Bizon
Group Chief Executive Officer
Anthony Day
Chair of the Board
i
i
w
w
e
e
v
v
e
e
R
R
s
s
s
s
e
e
n
n
i
i
s
s
u
u
B
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
4
WORLD CLASS AUTOMOTIVE SOLUTIONS
BUSINESS REVIEW
FY21 operational achievements
During the first half of FY21, the Group successfully
divested the ACAD and Fully Equipped businesses to
GUD Holdings. This strategic divestment provided the
opportunity for AMA Group to focus on the collision repair
industry and associated parts supply businesses.
The Heavy Motor division continues to be a strong
contributor to and growth area for our business. During
FY21, the Group completed the acquisition of Western
Trucks in Williamstown, Victoria and National Trucks
in Newcastle, New South Wales. These businesses
complement and expand the AMA Group network of
well‑established heavy motor repair operations.
In line with our strategy to realise the benefits of the
parts supply business, AMA Group acquired Perth Parts
Solutions during the first half of FY21. This strategic
investment expands our geographic reach for the
supply of recycled auto parts into Western Australia.
The health and safety of our employees is paramount and
through a continued focus, the business delivered a 50%
reduction in Lost Time Injury Frequency Rate (LTIFR)
in the year to 30 June 2021. We remain steadfast in our
commitment to the safety of our employees and ensuring
they have a safe place to work.
The business has adopted and continues to maintain
stringent health and safety measures for our employees
and customers during the COVID‑19 pandemic. The
business has implemented a comprehensive COVID‑19
management plan, which has seen zero transmission of
COVID‑19 at our sites.
FY21 Financial performance
The Group started the financial year ended 30 June
2021 (FY21) with challenging economic conditions
as Government restrictions relating to the COVID‑19
pandemic remained in place in certain Australian States
and New Zealand. While Victoria remained in
lockdown for most of the first quarter of FY21 and
further “snap” lockdowns continued across Australia,
the Group took prudent and proactive actions to
protect our employees and ensure we continued to
safely deliver our services to customers.
The Group reported Normalised EBITDAI of $71.5 million
and revenue and other income from continuing operations
of $919.9 million, an increase of 35% and 11% on the prior
year respectively. This result is largely attributable to a full
12 months of trading in respect of the Capital S.M.A.R.T
and ACM Parts acquisitions and the turnaround in the latter.
The Group reported a net loss after tax of $99.1 million for
FY21. Net loss after tax was significantly impacted by the
$90.6 million non‑cash impairment of goodwill related to
the Capital S.M.A.R.T acquisition. This impairment reflects
risk and uncertainty associated with COVID‑19 and related
allowances in respect of revenue projections.
Extended periods of lockdown due to the COVID‑19
pandemic and associated decreased repair volumes led
to the temporary stand down of staff and hibernation of
some of the most impacted sites. The Group received and
passed on wage subsidies from the Australian and
New Zealand Governments, which rolled off in the first
quarter of FY21. The Group also provided additional
support to our employees during this time. These actions
supported employee retention, enabling a return to
normal trading as quickly as possible once restrictions
and lockdowns lifted and volumes returned.
Synergies from the Capital S.M.A.R.T acquisition in
October 2019 were realised on a full year run rate and
normal volume basis in line with expectations, despite the
challenges associated with the integration rollout during
COVID‑19 lockdowns.
The Group reduced net debt by $53.8 million mainly out of
the proceeds of the sale of the ACAD and Fully Equipped
businesses, closing FY21 with net debt of $173.3 million
(excluding any contingent vendor consideration) and
$57.7 million in undrawn debt facilities.
5
AMA GROUP LIMITED | 30 JUNE 2021 FY22 ‑ a year of transition and transformation
The appointment of Carl Bizon as Group CEO in
February 2021 marked the beginning of a significant
transformation for the business, which is well underway
and continues into the 2022 financial year (FY22), with
the move towards “One AMA”.
During FY21, the Board appointed two new Independent
Non‑Executive Directors, Paul Ruiz and Kyle Loades.
Their combined experience, expertise and industry
knowledge adds significant value to the Board.
The Group also recently announced that Leath Nicholson
will step down as a Non‑Executive Director of the
Company at the November 2021 AGM and will assume
the role of outsourced General Counsel. The search for a
new Independent Non‑Executive Director is underway.
The continued enhancement of the Board positions the
Company to meet the longer‑term strategic objectives
of the Group.
Consistent with the Group’s direction to enhance
governance, diversity of management skill, leadership,
and industry experience, several senior executive
appointments were announced on 2 July 2021.
These included a Group Chief Operating Officer, Group
Chief Commercial Officer, Group Chief People Officer
and Director Investor Relations and Corporate Affairs.
The strengthened leadership team brings a wealth of
experience, commensurate to AMA Group’s current size
and future potential and consolidates individual roles
which were held within the various divisions.
Reflecting the significant growth and evolution of the AMA
Group since listing in 2006, new management reporting
segments were announced in July 2021. This new structure
will maximise the value in each business unit, paving the
way to unlock the value of AMA’s unique position in the
Australian and New Zealand collision repair industry:
• Drive ‑ Rapid repairs on cars that are still driveable,
includes Capital S.M.A.R.T and rapid repair businesses
previously part of AMA Panel
• Non‑Drive ‑ Larger, more complex repairs of cars with
more significant damage that are undrivable
• Heavy Motor – Truck and bus repairs
• Supply ‑ Parts, paint, and consumables.
Leveraging the existing depth of experience and expertise
in the senior team and to lead growth and development
of the business, several internal promotions were made to
support the new structure. David Marino’s portfolio was
expanded with his promotion to CEO of Capital S.M.A.R.T
and Executive General Manager – Drive. Campbell Jones
stepped into the role of Executive General Manager ‑
Non‑Drive, having demonstrated his leadership capability
as Interim CEO of AMA Panel Division and CEO of ACM
Parts, and Darren Wales’ proven track record of excellence
in heavy vehicle repairs sees him continue management
of this segment of the business, with his promotion to
Executive General Manager – Heavy Motor.
The core of the business is our people. Our commitment to
creating “One AMA” is reflected in a renewed focus during
this time of transformation on:
• Defining and consolidating the culture
•
Investing, developing, and retaining key industry skills
• Building the workforce of the future through
apprenticeships and other initiatives
• Using scale and culture to attract talent in an industry
with skills shortages.
Our expectation is that market conditions are likely to
remain uncertain and therefore challenging into FY22. As at
the time of writing, several Australian States are in, or have
recently ended lockdown. Our business leaders continue to
monitor the situation closely, responding on a case‑by‑case
basis and supporting our employees. A continued focus on
operational efficiencies and cost management programs
positions the business to navigate the ongoing impacts of
COVID‑19. During periods of no or limited lockdown, the
business has demonstrated its ability to resume operations
very quickly as repair volumes increase.
To provide sustained revenue generation and profitability
for the Group, we continue to work closely with our
major customers to mitigate any impact connected
with disruptions to labour or parts available to the
Group, including any abnormal costs rises. We are also
proactively managing the current skilled labour shortage
being experienced at this time, an issue exacerbated by
international border closures.
i
i
w
w
e
e
v
v
e
e
R
R
s
s
s
s
e
e
n
n
i
i
s
s
u
u
B
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
6
6
WORLD CLASS AUTOMOTIVE SOLUTIONS
CHAIR OF THE BOARD AND CHIEF EXECUTIVE OFFICER’S REVIEW
“The core of the business is our people. Our commitment
to creating ‘One AMA’ is reflected in a renewed focus
during this time of transformation...”
In FY22 our operational priorities are:
• Development of mutually beneficial customer
contracting arrangements, reflecting the post
COVID‑19 market environment
• Realisation of the benefits of the new business
structure by identifying and further enhancing
best practice operations
• Continued growth of the Supply business unit to
expand margins and secure supply
• Pursuit of organic and acquisition growth
opportunities
• Capitalisation on industry technology advancements
through innovation
• Ongoing effort to position AMA Group as ‘A Great
Place to Work’ through recruitment, development
and advancement of employees at every level of
the business.
The Board is committed to delivering shareholder value,
maintaining both adequate working capital and the ability
to invest in the growth of the business.
To ensure the Group is adequately capitalised and able to
realise investment opportunities, management continues
to explore a range of funding options. The Board has not
declared a final FY21 dividend.
With a network of almost 180 sites and over 3,700
employees, AMA Group is the leading collision repairer
in Australia and New Zealand, offering extensive service
capability and geographical reach to our customers.
Our workforce comprises highly skilled professionals
and operating technicians who drive the Group’s
performance outcomes. With steps already taken to
restructure the business and populate the senior leadership
team, we have laid the foundations for the acceleration of
the strategic direction and future growth of the Group to
deliver shareholder value.
We thank all our employees for the way in which they have
responded to the challenging circumstances experienced
over the last 18 months, and for the way they have adapted
to ensure the delivery of a quality service to our customers.
We also thank the Board, our customers, insurance
partners, investors, and all stakeholders for their ongoing
support of AMA Group throughout FY21.
In FY22, our sights are set on transforming the business,
capitalising on growth opportunities, being a great place to
work for our employees, and delivering shareholder value.
Anthony Day
Chair of the Board
Carl Bizon
Group Chief Executive Officer
7
AMA GROUP LIMITED | 30 JUNE 2021
DIRECTORS’
REPORT
INTRODUCTION
Your Directors present their report on the consolidated entity (referred to hereafter as the “Group”)
consisting of AMA Group Limited (“AMA” or the “Company”) and its controlled entities for the
Financial Year (FY) ended 30 June 2021.
This Directors’ Report has been prepared in accordance with the requirements of Division 1 of Part 2M.3 of
the Corporations Act 2001.
BOARD OF DIRECTORS
The Directors of AMA Group Limited during the year and up to the date of this report were:
Name
Position
Dates
Anthony Day
Chair of the Board and Non‑Executive Director
Full Financial Year
Leath Nicholson
Non‑Executive Director
Non‑Executive Director
Non‑Executive Director
Full Financial Year
Full Financial Year
Full Financial Year
Non‑Executive Director
Executive Director and Group Chief Executive Officer
Until 31 January 2021
From 1 February 2021
Non‑Executive Director
Non‑Executive Director
From 17 May 2021
From 24 May 2021
Simon Moore
Nicole Cook
Carl Bizon
Paul Ruiz
Kyle Loades
Andrew Hopkins resigned from the role of Executive Director and Group CEO on 31 January 2021.
His directorship was from the beginning of the financial year and ceased on 1 February 2021.
PRINCIPAL ACTIVITIES
The principal activity of the Group is the operation and development of complementary businesses in
the automotive aftercare market. The Group is a leader in the Australian and New Zealand collision repair
industry and a national supplier in vehicle parts.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
t
r
r
o
o
p
p
e
e
R
R
’
’
s
s
r
r
o
o
t
t
c
c
e
e
r
r
i
i
D
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
8
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
REVIEW AND RESULTS OF OPERATIONS
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 19 November 2020, following a strategic review of the Group’s business operations, the Board announced its intention
to divest of the ACAD and Fully Equipped businesses (excluding ACM Parts and FluidDrive). The sale to GUD Holdings
Limited was completed on 31 December 2020 for a gross purchase consideration of $70 million. The proceeds from the
transaction were principally used to repay debt and set the Group up for continued growth in its core operation of collision
repairs (see note E5).
The COVID‑19 pandemic and restrictions imposed by the Government continued to impact the trading performance of
the Group for the period ended 30 June 2021. These restrictions affected one of the key external drivers of our business,
kilometres travelled, resulting in challenging operating conditions.
KEY ACHIEVEMENTS
As noted above, on 31 December 2020, the Group completed the sale of the ACAD and Fully Equipped businesses to GUD
Holdings Limited. The divestment provides AMA with the opportunity to focus on the collision repairs segment providing
greater opportunities for investment and growth.
On 1 February 2021, the Group announced the appointment of Carl Bizon as Executive Director and Group Chief Executive
Officer. Since his appointment, Carl, a former Non-Executive Director of the Company, has reshaped and strengthened the
leadership team and enhanced processes around risk management, governance, reporting systems and people and
culture strategies.
The Group announced the appointment of two new, experienced, and Independent Non‑Executive Directors on 17 May
2021. The appointments of Paul Ruiz and Kyle Loades align with the Board’s ongoing commitment to ensure the Board
has the appropriate experience, skills, and expertise to meet the current and longer‑term strategic objectives of the
AMA Group.
The renewal and strengthening of Group leadership continued, with a number of senior appointments, adding a diversity of
industrial and corporate experience and ensuring the Group has the appropriate governance and depth of skills to deliver
the Board’s vision for the future of AMA.
During the year, the Group acquired the business and operating assets of Western Trucks and National Trucks. The Heavy
Motor business continues to be an area of investment, growth, and expansion for the Group.
The Group also focussed on realising the benefits of ACM Parts, an important part of the supply chain in the collision repairs
segment. During the period, ACM Parts acquired Perth Parts Solutions, a strategic investment to expand the geographic
presence of the parts business.
9
AMA GROUP LIMITED | 30 JUNE 2021 FINANCIAL RESULTS
The Group reported a statutory net loss after tax of
$99,079,000 for the period ended 30 June 2021 compared
to a net loss after tax of $71,468,000 reported for the
period ended 30 June 2020.
Revenue from external customers
(excluding other income)
Revenue from external customers (continuing operations)
increased from $824,127,000 for FY20 to $916,508,000 for
FY21 representing an increase of 11% and attributable to a
full twelve months trading for acquisitions such as Capital
S.M.A.R.T and ACM Parts. Refer to note B2 for disaggregation
of revenue and other income by reporting segment.
Raw materials and consumables used
Raw materials and consumables used in continuing
operations increased from $388,390,000 in FY20 to
$436,609,000 in FY21 representing an increase of 12% and
similar to the increase in revenue, largely attributable to a
full twelve months trading for acquisitions such as Capital
S.M.A.R.T and ACM Parts.
Raw materials and consumables used represents 48% of
revenue from external customers. Despite the impact of
COVID‑19 on the supply chain and an increase in parts
prices, this was only a marginal increase on the prior
year (FY20: 47%).
The Group is committed to the procurement of paint, parts
and consumables and securing the quality products needed
to execute operations on industry leading terms.
Employee benefits
The Group finished FY21 with approximately 3,700
employees (FY20: 4,000). The decrease is primarily due
to the divestment of ACAD and Fully Equipped businesses.
During the period, there have been several internal
promotions and new appointments to senior leadership
which will support operations and strategy delivery.
Gross employee benefits expense (before the benefit of
wage subsidies) for continuing operations increased 4% from
FY20. Gross employee benefits expense represents 37% of
revenue from external customers (FY20: 40%). The Group
proactively managed the headwinds of the skilled labour
shortage primarily driven by international border closures.
Similar to FY20, the Group benefited from the Australian
Federal Government’s JobKeeper Assistance Program
and the New Zealand Wage Subsidy. Participation in these
programs contributed $30,736,000 to the business to
support our workforce through this difficult trading period.
The assistance enabled the business to safeguard the jobs
of our employees and retain key skills during the COVID‑19
period of uncertainty (see note B3(C)).
Operating expenses
The Group manages its operating expenses by continuously
identifying appropriate cost savings.
Occupancy costs remain the largest fixed cost and consist
of items such as rates and taxes, electricity and gas, cleaning
and repairs and maintenance. Occupancy costs presented
in the Statement of Profit or Loss is after the impact of
AASB 16 Leases and therefore does not include the rent of
premises on the majority of the Group’s leases. Occupancy
costs have decreased by 11% compared to FY20, reflective
of a decrease in number of sites and the benefit of indirect
procurement strategies.
Professional services expense largely relates to compliance,
legal, audit, tax, and recruitment costs. In FY21, additional
professional services expenses were incurred in relation
to the legal fees and investigation costs associated with
whistleblower disclosures. In FY20, additional professional
services expenses were incurred relating to the acquisition of
Capital S.M.A.R.T and ACM Parts.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
t
r
r
o
o
p
p
e
e
R
R
’
’
s
s
r
r
o
o
t
t
c
c
e
e
r
r
i
i
D
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
10
Other expenses include items such as information
technology, operational expenditure, insurance, replacement
tools, registrations and subscriptions. Other expenses are
approximately 3% of revenue from external customers in
both FY21 and FY20.
Fair value adjustments on contingent
vendor consideration
In FY21, the Group recognised fair value adjustments on
contingent vendor consideration (continuing operations)
of $5,977,000.
Acquisition earn-outs are generally contingent on profit
measures such as EBITDA or EBIT. The net expense
represents the combination of businesses that have
performed better than originally anticipated at acquisition
date or the last reporting date. Any increase to contingent
vendor consideration results in a corresponding expense
recognised in fair value adjustments within the profit or loss.
Depreciation and amortisation
Depreciation and amortisation of $81,289,000 increased
by 17% compared to prior comparative period, largely due
to a full twelve months of trading for acquisitions such as
Capital S.M.A.R.T and ACM Parts. Depreciation expense
on right‑of‑use assets represents approximately half of the
total depreciation and amortisation expense. Amortisation
of intangibles, specifically the customer contract between
Capital S.M.A.R.T and Suncorp is 22% of the total
depreciation and amortisation expense (see note B3(A)).
Impairment expense
The Group has recognised a total impairment expense of
$102,465,000, of which $95,783,000 was recognised against
goodwill, $4,923,000 against non‑current assets such as
property, plant, and equipment and $1,428,000 against
right‑of‑use assets. Of the total impairment charge during
the year, $90,580,000 (88%) relates to the impairment of
goodwill allocated to Capital S.M.A.R.T. Further details of
impairment expense and intangible assets are set out in
notes B3(D) and C6.
Finance costs
Finance costs increased from $26,294,000 in FY20 to
$30,054,000 in FY21. The significant increase is due to
a full twelve months of trading for acquisitions such as
Capital S.M.A.R.T and ACM Parts. The majority of finance
costs relate to interest expense on lease liabilities which has
arisen upon adoption of AASB 16 Leases (see note B3(B)).
Interest and finance charges on the senior debt decreased
compared to the prior comparative period and the effective
interest rate on borrowings was 3% (FY20: 4%).
Income tax benefit
Income tax benefit for continuing operations was
$2,283,000 for the period. The Group has several permanent
differences and items which are not assessable or deductible,
including impairment expense, fair value adjustments on
contingent vendor consideration and the divestment of
ACAD and Fully Equipped group of businesses.
The Group has revenue losses of $9,688,000 and capital
losses of $10,154,000 (see note B4(F)).
Discontinued operations
The sale of ACAD and Fully Equipped businesses (excluding
ACM Parts and FluidDrive) to GUD Holdings Limited was
completed on 31 December 2020. The profit after tax
from discontinued operations of $12,151,000 includes the
operations of the divested businesses to 31 December 2020
and the gain on sale, net of transaction costs (see note E5).
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
NORMALISED EBITDAI
Normalised EBITDAI is used by the Group to define the underlying results, adjusted for abnormal and non-recurring costs
which are determined as not in the ordinary course of business.
Non-IFRS measures, including Normalised EBITDAI, are financial measures used by management and the Directors as the
primary measures of assessing the financial performance of the Group and individual segments. The Directors also believe
that these non‑IFRS measures assist in providing additional meaningful information for stakeholders and provide them with
the ability to compare against prior periods in a consistent manner.
The table below provides a reconciliation to Normalised EBITDAI for the Group and is unaudited, non-IFRS financial
information. There are no Normalisations for the impact of the COVID‑19 pandemic.
Reconciliation to Normalised EBITDAI
Unaudited, non‑IFRS Financial Information
Operating loss before interest and tax
Adjustments:
Depreciation, amortisation and impairment expense
Fair value adjustments on contingent vendor consideration
Occupancy costs and other income impacted by AASB 16 Leases
ACAD and Fully Equipped businesses sold on 31 December 2020
Pre‑AASB 16 Earnings before interest, tax, depreciation, amortisation, impairment,
and fair value adjustments (“Pre‑AASB 16 EBITDAI”, unaudited, non‑IFRS term)
Normalisations:
Supplier termination fee
Whistleblower investigation costs
Acquisition costs
Restructuring and reorganisation costs
Integration costs
Other costs
Total Normalisations
2021
$’000
2020
$’000
(83,459)
(48,788)
183,754
5,977
(51,868)
6,971
61,375
120,921
4,487
(44,195)
7,257
39,682
9,437
737
‑
‑
‑
‑
10,174
‑
‑
9,849
2,366
726
546
13,487
Normalised EBITDAI (unaudited, non‑IFRS term)
71,549
53,169
Normalised EBITDAI has increased by $18,380,000 or 35%. The increase can be largely attributed to a full twelve months
trading for acquisitions such as Capital S.M.A.R.T and ACM Parts. In addition, the financial performance of the Group in
the prior comparative period was impacted by challenging market conditions with decline in repair volumes and
pressure on pricing.
Normalisations for the period included $9,437,000 in respect of the PPG paint supplier termination fee. The supplier
termination fee was incurred as a result of Capital S.M.A.R.T’s paint transition. The integration was completed during FY21
and Capital S.M.A.R.T is well positioned to realise its synergy benefits. The Group has also normalised the costs incurred
(legal and investigative) relating to the whistleblower disclosures (see section 6.4 of Remuneration Report).
Normalised EBITDAI includes the contribution of $6,971,000 from the disposed businesses (ACAD and Fully Equipped) but
does not include the accounting gain on disposal ($7,397,000). Normalisations have been significantly reduced compared
to previous periods.
11
AMA GROUP LIMITED | 30 JUNE 2021 CAPITAL MANAGEMENT
The Group has maintained a sustainable balance sheet, and cashflow liquidity has been effectively managed across
the business.
The financial position of the Group is strong with net assets of $250,918,000. As at 30 June 2021, the Group had
$64,203,000 in cash and cash equivalents.
During the year, the Group received sale proceeds from the disposal of businesses (net of costs and cash disposed) of
$63,184,000. The Group repaid $102,500,000 of borrowings, using those sale proceeds and excess cash.
The Group purchased new businesses and paid earn‑outs in respect of existing acquisitions totalling $17,885,000.
In response to COVID-19, the Group’s financiers agreed to waive covenant testing until 31 December 2020 and provided a
more favourable covenant testing regime for the balance of FY21. No restrictions were imposed by the financiers during
the reporting period and the Group was compliant with all covenants during the period, including as at 30 June 2021.
The net debt calculation, which is presented consistently to the calculation requirements of the Group’s Syndicated Facility
Agreement is set out in the table below.
Net debt
Financial liabilities – drawn cash facilities
Cash and cash equivalents
Net Debt
Contingent vendor consideration – 50% of cash portion
Net debt used in covenant calculations
Jun
2021
$’000
237,500
(64,203)
173,297
7,010
180,307
Dec
2020
$’000
237,500
(86,397)
151,103
10,984
162,087
Jun
2020
$’000
340,000
(112,916)
227,084
12,611
239,695
The Group’s liquidity remains strong, with a net debt position as at 30 June 2021 of $173,297,000 and a further $57,720,000
of undrawn debt facilities.
DIVIDENDS
As a result of the prolonged and continuing impact of the COVID‑19
pandemic, and the Group’s target optimal capital structure, a
final dividend has not been declared. This decision also allows the
business to focus on capital management and other investment,
growth and expansion plans.
KEY RISKS
The Board is responsible for setting the overall risk culture of the
business. The Group has a risk management framework in place
to identify, understand and manage key strategic, financial and
operational risks.
The breadth of broader impacts as a result of the COVID‑19
pandemic continues to unfold and increase the risk landscape.
The Company continues to monitor government policies,
regulatory changes and industry trends.
OUTLOOK
The business environment remains challenging with continued
disruptions due to the prolonged impact of COVID‑19.
Additional outbreaks have resulted in business and mobility
restrictions during Q1 FY22, with mixed views on the timing and
extent of market recovery.
Volume rates continue to experience variability throughout the various States in which the Group operates, primarily
resulting from different levels of COVID‑19 restrictions imposed by each State.
The Company will continue to work to mitigate the effect of the current economic disruptions on its operations, which
primarily impact repair volumes and supply chain inputs. It is difficult to predict the severity and duration of these impacts.
The Board is confident in the capability and experience of the executive team and remains committed to implementing best
practices and system infrastructure to enhance profitability and achieve operational excellence.
Accretive growth will remain the Company’s long‑term focus, through both organic growth from the Group’s existing
operations and business acquisitions.
The Directors are confident that once normal trading conditions return, AMA Group will be well positioned for success
into the future.
EVENTS OCCURING AFTER THE REPORTING PERIOD
No other matters or circumstances have occurred subsequent to period end that have significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or
economic entity in subsequent financial years.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
t
r
r
o
o
p
p
e
e
R
R
’
’
s
s
r
r
o
o
t
t
c
c
e
e
r
r
i
i
D
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
12
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS AND OFFICERS
DIRECTORS’ REPORT
ANTHONY DAY
Non‑Executive Chair of the Board
since 1 September 2019
Non‑Executive Director
since 28 November 2018
CARL BIZON
Executive Director and Group Chief Executive Officer
since 1 February 2021
Non‑Executive Director
3 February 2020 to 31 January 2021
Background and experience:
Background and experience:
With over 35 years in the insurance industry, Anthony
has a breadth of experience in all areas of the
insurance industry.
His most recent role, until October 2017, was as the Chief
Executive Officer of Suncorp Group’s Insurance Business.
He brings to the Board leadership capability, business
judgement and an intimate understanding of our key
customers, Australasia’s auto insurance companies.
He has a 20‑year track record of producing
market-leading results in both growth and profitability,
whilst delivering continuous improvement in operations.
Anthony founded advisory business Elevate CEOs,
which focusses on developing leadership and
strategic skills of senior executives.
Board Committees:
Member of Audit and Risk Committee
since 1 February 2021
Member of People, Culture, Remuneration and
Nomination Committee
since 28 November 2018
Chair of People, Culture, Remuneration and
Nomination Committee
28 November 2018 to 17 December 2020
Carl’s career in the manufacturing and automotive
industries spans more than 25 years. Carl has held
senior executive roles with world leading manufacturing
and distribution businesses in various sectors of the
automotive industry.
Carl most recently served as President and CEO of
Horizon Global and prior to that was CEO of Jayco
Corporation and President and Managing Director of
TriMas Corporation’s Cequent subsidiaries in Asia Pacific,
Europe and Africa.
Carl’s expertise and experience extends to mergers
and acquisitions, manufacturing, operations, sales, large
scale project management and IT. Carl has successfully
led global businesses, improving profitability and
operational performance, delivering efficiencies and
increasing margins.
Board Committees:
Member of Audit and Risk Committee
3 February 2020 to 31 January 2021
13
AMA GROUP LIMITED | 30 JUNE 2021 DIRECTORS AND OFFICERS
LEATH NICHOLSON
SIMON MOORE
BEcon (Hons), LLB (Hons), LLM (Commercial Law)
BCom (Hons), LLB (Hons)
Non‑Executive Director
since 23 December 2015
Non‑Executive Director
since 28 November 2018
Background and experience:
Background and experience:
Leath was a Corporate Partner at a leading Melbourne
law firm, gaining experience with a breadth of ASX listed
entities, before co‑founding Foster Nicholson Jones
in 2008. Leath’s principal clients include ASX listed
companies and high net worth individuals.
Leath has an in‑depth knowledge of the automotive
repair industry. Leath also has particular expertise in
mergers and acquisitions, IT based transactions, and
corporate governance.
Board Committees:
Member of People, Culture, Remuneration and
Nomination Commitee
23 December 2015 to 16 August 2021
Member of Audit and Risk Committee
since 23 December 2015
Other listed company directorships in the
past three years Leath has served as:
Non‑Executive Chairman of Constellations
Technologies Limited
Non‑Executive Director of Money3 Corporation Limited
(until 15 November 2019)
Additional comments:
As announced on 11 August 2021, Leath will step off the
Board of Directors at the 2021 AGM to assume the role
of outsourced General Counsel to the Group.
Simon founded Colinton Capital Partners in 2017. He is
an experienced private equity investor with significant
public company Board experience.
Simon brings to the Board strong corporate finance skills
and experience having held senior roles in investment,
financial, private equity, investment banking and
academic sectors.
Simon has extensive experience in successfully
developing and implementing plans to assist the
growth potential of businesses.
Prior to founding Colinton Capital Partners, he was a
Managing Director and Global Partner of The Carlyle
Group for 12 years.
Board Committees:
Chair of Audit and Risk Committee
since 28 November 2018
Other listed company directorships in the
past three years Simon has served as:
Non‑Executive Director of Palla Pharma Limited
Non‑Executive Director of Alexium International
Group Limited
Non‑Executive director of Firstwave Cloud Technology
Limited (until 30 August 2019)
Non‑Executive Director of Megaport Limited
(until 23 September 2019)
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
t
r
r
o
o
p
p
e
e
R
R
’
’
s
s
r
r
o
o
t
t
c
c
e
e
r
r
i
i
D
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
14
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
NICOLE COOK
BA (Hons), MBA
Non‑Executive Director
since 1 December 2019
PAUL RUIZ
BSc (Economics), Fellow of the Institute of
Chartered Accountants in England and Wales.
Non‑Executive Director
since 17 May 2021
Background and experience:
Background and experience:
Paul is a highly regarded and well‑respected professional
with a 30 year career at KPMG including as a Senior
Partner specialising in the insurance and financial
services sectors. During his career at KPMG, Paul held
senior roles at KPMG Australia and Asia Pacific and was
Risk Management Partner for NSW.
Paul’s breadth of experience in the financial services
sector extends to Government, NGO’s and the health and
insurance sectors and his industry experience includes
manufacturing and motor industries.
Paul also serves as a Non‑Executive Director of Dai‑ichi
Life Australia/TAL Life and is Chair of the Audit
Committee, Fred Hollows Foundation and its controlled
entity Alina Vision. He also serves on the Audit & Risk
Committee of two NSW Government Organisations.
Board Committees:
Member of Audit and Risk Committee
since 17 May 2021
Nicole is an experienced executive and management
consultant having spent most of her career in
professional services roles in both established and
start‑up businesses, with a particular focus on the
Human Resources sector.
Nicole is currently CEO of SBE Australia. Prior to that,
as CEO of Jobs for NSW, Nicole focussed on driving
innovation through growing Australian businesses in
order to create jobs and skills of the the future. In her
role as Managing Director of innovative global
outsourced recruitment and HR firm PeopleScout,
she oversaw the delivery and growth of their solutions
in the APAC region.
Nicole has over 20 years’ experience growing
SaaS based technology businesses, is a trusted
management consultant, focuses on driving innovation
through technology and has deep domain expertise
in Human Resources, energy efficiency, supply chain,
FinTech and more.
Board Committees:
Chair of People, Culture, Remuneration and
Nomination Committee
since 18 December 2020
Member of People, Culture, Remuneration and
Nomination Committee
since 1 December 2019
Other listed company directorships in the
past three years Nicole has served as:
Non‑Executive Director of Intellihr Limited
(until 29 October 2020)
15
AMA GROUP LIMITED | 30 JUNE 2021 DIRECTORS AND OFFICERS
FORMER DIRECTORS
Andrew Hopkins resigned from the role of Executive
Director and Group CEO on 31 January 2021.
His directorship ceased on 1 February 2021. He had
served as an Executive Director since 17 December 2015.
KYLE LOADES
MBA
Non‑Executive Director
since 24 May 2021
FIONA VAN WYK
Company Secretary
since 25 November 2019
Background and experience:
Background and experience:
Kyle is a seasoned Non‑Executive Director and Advisory
Board Member with over 2 decades of Board experience
in a broad range of industry sectors including, financial
services, the automotive, mobility and transport sectors,
infrastructure, emergency services and technology.
Kyle has a depth of experience in developing and
implementing transformational growth strategies.
Most notably he was recently Chairman of the NRMA
where he led a significant and successful operational
and cultural transformation of the business.
Kyle also serves as Independent Chair of Active Super,
Non‑Executive Director of Great Southern Bank and
Non‑Executive Chair of Hunter Medical Research Institute.
Fiona has over 25 years company secretarial, corporate
governance and corporate compliance experience, most
notably as Company Secretary of the Mantra Group (ASX
200) for over 11 years. Fiona was integral to the listing
of Mantra Group on the ASX in 2014 and the sale of the
business to AccorHotels in 2018.
Fiona worked for KPMG in South Africa, where she
headed the Company Secretarial Department within the
Private Business Services Division. Fiona has also worked
in a variety of consultancy roles where she provided
advice to both private and public listed companies.
Fiona is a Member of Governance Institute of Australia
and the Australian Institute of Company Directors.
Board Committees:
Member of People, Culture, Remuneration and
Nomination Committee
since 16 August 2021
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
t
r
r
o
o
p
p
e
e
R
R
’
’
s
s
r
r
o
o
t
t
c
c
e
e
r
r
i
i
D
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
16
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
DIRECTORS INTERESTS
Directors’ interest in shares of AMA Group Limited as at the date of this report are set out in the table below.
Director
Anthony Day
Leath Nicholson
Simon Moore
Nicole Cook
Carl Bizon
Paul Ruiz
Kyle Loades
Ordinary Shares Number
519,324
1,616,873
30,577,186
55,000
400,000
271,739
43,297
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board committee held during the year ended
30 June 2021, and the number of meetings attended by each Director are as follows:
Anthony Day
Leath Nicholson
Simon Moore
Nicole Cook 1
Carl Bizon 2
Paul Ruiz 3
Kyle Loades 4
Andrew Hopkins 5
Board
meetings
Audit & Risk
Committee meetings
People, Culture, Remuneration and
Nomination Committee meetings
A
10
10
10
10
10
2
2
4
B
10
10
10
10
10
2
2
5
A
3
5
5
‑
2
2
‑
‑
B
3
5
5
‑
2
2
‑
‑
A
4
4
‑
4
‑
‑
‑
‑
B
4
4
‑
4
‑
‑
‑
‑
Key:
A Number of meetings attended.
B Number of meetings held during the time the Director held office or was a member of the committee during the period.
‑ Not a member of the relevant committee
1 Nicole Cook replaced Anthony Day as Chair of the PCRNC effective 18 December 2020.
2 Carl Bizon transitioned from Non‑Executive to Executive Director on 1 February 2021.
3 Paul Ruiz was appointed as a Non‑Executive Director and a member of the Audit and Risk Committee on 17 May 2021.
4 Kyle Loades was appointed as a Non‑Executive Director on 24 May 2021.
5 Andrew Hopkins ceased to be a Executive Director on 1 February 2021.
17
AMA GROUP LIMITED | 30 JUNE 2021 REMUNERATION REPORT
ANNUAL STATEMENT BY THE PEOPLE, CULTURE, REMUNERATION
AND NOMINATION CHAIR
On behalf of the Board, we are pleased to present the
remuneration report which focuses on our remuneration
approach and outcomes, in addition to our people
and culture highlights, for the financial year ended
30 June 2021.
The Board acknowledges the importance of embedding
a culture of leadership, inclusiveness, respect, high
performance, accountability and strong governance
throughout the organisation. It has taken significant
steps to reshape the executive team aimed at
improving the culture and conduct of our people.
PEOPLE AND CULTURE
The core of our business is our people and the increased
focus on People and Culture is key to driving superior
performance in our organisation and our commitment
to creating “One AMA”. As part of this commitment the
following initiatives were implemented during the year:
• a newly created role and appointment of a
Chief People Officer in June 2021 reporting to
the Group CEO
• an improved OH&S focus across the group with a
decrease in Lost Time Injury Frequency Rates (LTIFR)
from 10.6 in July 2020 to 5.7 in June 2021
• a coordinated approach to resolving COVID‑19
pandemic impacts on our workforce with a
focus on keeping our workforce safe physically
and psychosocially
• implementation of The Workplace Diversity Project,
Workwell Mental Health, which aims to develop,
implement and evaluate workplace projects to increase
diversity and inclusion within the Automotive Industry
• a focussed effort on building capability, employing
340 apprentices with 2 apprentices selected to
participate in the World Skills Program
• revision and adoption of governance policies to better
align with current best practice, including the Board
Charter, PCRNC Charter, Securities Trading Policy and
Continuous Disclosure Policy.
Important steps were also taken to articulate expected
behaviours and embed them within our management
teams, business processes, remuneration and employee
recognition systems.
GROUP CHIEF EXECUTIVE OFFICER
APPOINTMENT
The appointment of Carl Bizon, as Group Chief Executive
Officer is an important element of the Company’s
transformation. Carl transitioned from Non‑Executive
Director to Executive Director on 1 February 2021. He was
appointed following the resignation of Andrew Hopkins on
31 January 2021 following a forensic investigation. Further
information is provided in the remuneration report in
section 6.4.
In determining the remuneration structure for the
new CEO, the Board took into consideration his skills,
experience and industry knowledge and the remuneration
of CEOs of other ASX listed companies of similar size,
complexity and market capitalisation. Further information
is provided in the remuneration report in section 4.2.
NON‑EXECUTIVE DIRECTORS
Following a thorough recruitment process, Paul Ruiz and
Kyle Loades joined the Board in May 2021 as Independent
Non‑Executive Directors demonstrating the Board’s
long‑term strategy of growing the composition, capability
and independence of its members.
To ensure the organisation positions itself to retain and
attract Non‑Executive Directors with the appropriate
skills and expertise to meet the longer‑term objectives of
the Company, the PCRNC reviewed and benchmarked
its Non‑Executive Directors fees against companies
of a similar size, complexity and market capitalisation.
Considering the results of the benchmark and the goals
of the transformation strategy, the Board approved a
20% increase to member fees and introduced additional
Committee Chair fees in order to be more aligned with
market practice from 1 June 2021.
EXECUTIVE STI AND LTI
During the year, the Board enhanced key elements of
the STI Plan for Executives with the introduction of
performance metrics focussing on growth opportunities
and mastering the fundamentals for long‑term
sustainability of the business. These include key financial
measures and a range of people and customer‑centric
metrics focussed on cementing a purpose‑led organisation.
For FY21, the STI awarded to the Group CEO was 88% of
target STI, noting that the STI for Carl Bizon is based on
Carl being in the role as Group CEO and Executive Director
from 1 February 2021.
The average awarded STI for other Executive KMP
was 87.15% of target. We have worked to improve the
transparency of our STI disclosures in section 4.3 of this
year’s report.
The LTI Plan implemented in 2019 has been in place for
2 full years in its current form. The first grant under the
LTI plan will be performance tested at the end of FY22.
As such, no performance rights were tested or vested
during the year.
The Company is undertaking a review of its current
remuneration structure for FY22 in order to ensure that it
is appropriate for the new executive team and aligns with
the renewed strategic direction of the Company. Further
details will be disclosed in the FY22 Remuneration Report.
We trust this Remuneration Report provides insight
into the high priority the Board places on listening and
responding to our stakeholders as we work to ensure
that our framework and
outcomes consistently
deliver on our commitment
to responsible and effective
remuneration practices.
Nicole Cook
Chair of the People,
Culture, Remuneration
and Nomination Committee
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
18
WORLD CLASS AUTOMOTIVE SOLUTIONS
REMUNERATION
REPORT 2021
TABLE OF CONTENTS
1
1.1
1.2
1.3
1.4
2
2.1
2.2
2.3
3
3.1
3.2
3.3
3.4
3.5
4
4.1
4.2
4.3
4.4
4.5
5
5.1
5.2
5.3
5.4
6
6.1
6.2
6.3
6.4
INTRODUCTION
Key management personnel
Our remuneration approach
Our priorities for FY21
Looking forward to FY22
REMUNERATION GOVERNANCE
The role of the People, Culture, Remuneration and Nomination Committee
Governance framework
Remuneration framework
EXECUTIVE REMUNERATION IN DETAIL
Remuneration mix and composition
Executive employment agreements
Total fixed remuneration
Short‑term incentives
Long‑term incentives
PERFORMANCE AND REMUNERATION OUTCOMES FOR FY21
Company performance
Fixed remuneration outcomes
STI Outcomes
LTI Outcomes
Executive remuneration disclosures
NON‑EXECUTIVE DIRECTORS’ ARRANGEMENTS
Policy and approach to setting fees
Changes to Board composition
Current fee structure
Non‑Executive Directors’ remuneration disclosures
OTHER TRANSACTIONS AND BALANCES WITH KMP
Loans provided to KMP
Amounts recognised as expenses
Amounts recognised as assets and liabilities
Former CEO and Executive Director
20
21
21
21
22
23
24
25
25
25
26
27
28
28
28
30
30
32
32
32
33
34
34
35
35
Remuneration Report Glossary
AGM
ARC
CEO
CFO
EPS
KMP
Annual General Meeting
Audit and Risk Committee
LTI
Long‑term Incentive
PCRNC People, Culture, Remuneration and
Chief Executive Officer
Chief Financial Officer
Earnings Per Share
Key Management Personnel
Nomination Committee
Performance Rights Program
Short‑term Incentive
Total Fixed Remuneration
Total Shareholder Return
PRP
STI
TFR
TSR
19
AMA GROUP LIMITED | 30 JUNE 2021 REMUNERATION REPORT
Board ‑ Left to right:
Leath Nicholson, Carl Bizon,
Anthony Day, Paul Ruiz,
Kyle Loades, Nicole Cook,
Simon Moore.
1
INTRODUCTION
This Remuneration Report provides shareholders with an understanding of our remuneration strategy and outcomes for
our KMP for the year ended 30 June 2021.
This report is presented in accordance with the requirements of the Corporations Act 2001 and its regulations.
Information has been audited as required by Section 308 (3C) of the Corporations Act 2001.
KEY MANAGEMENT PERSONNEL
1.1
The KMP of the Group comprise all Directors (Executive and Non‑Executive) and other members of AMA Group’s Executive
Management who have authority and responsibility for planning, directing and controlling the activities of the Group.
The table below sets out the details of those persons who were KMP during FY21.
Name
Position
Dates
PCRNC
ARC
Non‑Executive Directors
Anthony Day 1
Chair of the Board and Non‑Executive Director
Full Financial Year
Leath Nicholson
Non‑Executive Director
Simon Moore
Nicole Cook 2
Carl Bizon 3
Paul Ruiz 4
Non‑Executive Director
Non‑Executive Director
Non‑Executive Director
Non‑Executive Director
Kyle Loades 4
Non‑Executive Director
Executive Directors
Carl Bizon
Group CEO and Executive Director
From 1 February 2021
Andrew Hopkins
Group CEO and Executive Director
Until 31 January 2021
Executive Management
Steven Becker 5
Group CFO
David Marino
CEO Capital Smart
Campbell Jones 6
CEO APAS
Steven Bubulj
CEO AMA Panel
Full Financial Year
Full Financial Year
Full Financial Year
Until 26 March 2021
1 Anthony Day was appointed a member of the ARC on 1 February 2021.
2 Nicole Cook was appointed Chair of the PCRNC on 18 December 2020.
3 Carl Bizon was a member of the ARC until his appointment as Group CEO and Executive Director on 1 February 2021.
4 Paul Ruiz and Kyle Loades were appointed as Independent Non‑Executive Directors on 17 May 2021 and 24 May 2021 respectively.
5 Steven Becker resigned on 2 July 2021, after the reporting date and before the date the Annual Report was authorised for issue.
6 Campbell Jones was appointed interim CEO AMA Panel on 26 March 2021.
Full Financial Year
Full Financial Year
Full Financial Year
Chair
‑
Chair
Until 31 January 2021
From 17 May 2021
From 24 May 2021
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
20
WORLD CLASS AUTOMOTIVE SOLUTIONS
REMUNERATION REPORT
DIRECTORS’ REPORT
OUR REMUNERATION APPROACH
1.2
The Board is committed to clear and transparent
communication of remuneration arrangements.
Our remuneration approach is focussed on appropriately
motivating and retaining Executives while ensuring
alignment with shareholder outcomes and delivery
against Group strategy.
Remuneration is competitive with Executives in
comparable companies and roles and is reviewed against
a mix of financial and non-financial measures designed
to reward the achievement of both short and long‑term
objectives. Our performance metrics are aligned with
the growth and development of all areas of the business
including operational performance, customer satisfaction
and our longer‑term people and culture strategy.
1.3
OUR PRIORITIES FOR FY21
The Board recognises the importance of embedding
a culture of inclusiveness, respect, high performance,
accountability, and an appropriate governance culture and
has taken important steps during the year to reshape the
executive team with the aim of improving the conduct and
culture throughout the business.
These steps include articulating our values, the
expectations on living those values, and embedding
them within our management teams, business processes,
remuneration and employee recognition systems.
These behaviours are reinforced by our employee Code
of Conduct policy. The Board has been deliberate in
ensuring the conduct and culture of the organisation,
including risk outcomes, are considered in our future
remuneration outcomes.
The appointment of Carl Bizon, as Group CEO and
Executive Director, has been an important element of
the Company’s transformation. Since his appointment,
Carl has reshaped and streamlined the leadership team
and addressed legacy issues by establishing robust
processes around risk management, governance, reporting
systems and people and culture strategies. Together these
systems are intended to build a culture which reflects the
Company’s underlying principles and purpose, with its core
focus on meeting our customers’ needs.
During the year the Board enhanced key elements
of the STI Plan for Executives with the introduction
of performance metrics focussing on smart growth
opportunities and mastering the fundamentals for
long‑term sustainability of the business. These include
a range of people and customer‑centric metrics focussed
on cementing a purpose‑led organisation.
LOOKING FORWARD TO FY22
1.4
The delivery of strategic goals and alignment with our
people and culture strategies will remain the focus in FY22.
The Board acknowledges the correlation between highly
engaged employees, a positive governance culture, and the
growth and development of the business, all of which are
aimed at increasing shareholder value.
The Board recognises that the key to our success lies in
retaining and attracting high performing people. A key
focus for FY22 is to build AMA’s leadership capability
by identifying and retaining key talent and promoting
diversity across the business. The business will maintain its
investment in leadership development, creating pathways
for high‑potential employees and fostering a pool of
succession candidates.
On 2 July 2021, the Group announced several internal
promotions and appointments to senior leadership roles
bringing a diversity of industrial and corporate experience
to the Company and ensuring the Group has the
appropriate governance and depth of skills to deliver the
Board’s vision for the future of AMA.
The appointment of Matthew Cooper as Group Chief
Operating Officer was announced on 2 July 2021.
Matthew’s extensive experience in branch networks and
the automotive parts industry will facilitate the acceleration
of the Group’s operational strategy. Matthew Cooper will
be recognised as a KMP in FY22.
On 2 July 2021, the Group announced the resignation of
Steven Becker as Group CFO. Steven will depart following
the release of the FY21 results. As announced on 2 August
2021, Darren Basford joined the Group as Interim Group
CFO on 3 August 2021.
The executive remuneration framework is being reviewed
for FY22 to ensure that the go‑forward structure is
fit-for-purpose taking into account the new executive
team, AMA’s people strategy and the overarching strategic
direction of the Company.
The PCRNC will play an active governance role through
remuneration alignment as the business continues its
journey of transformation.
21
AMA GROUP LIMITED | 30 JUNE 2021 REMUNERATION REPORT
2
REMUNERATION GOVERNANCE
THE ROLE OF THE PEOPLE, CULTURE, REMUNERATION AND NOMINATION COMMITTEE
2.1
The role of the PCRNC is to assist the Board in fulfilling its responsibilities in relation to the people, culture, remuneration
and nomination practices of the Company and its subsidiaries.
The PCRNC is responsible for reviewing, overseeing and making recommendations to the Board on all aspects of people
metrics of the business, which are not limited to, but include:
• the review and oversight of the Group’s key people and organisational culture strategies and their alignment with the
Group’s business strategy, values and vision;
• the review of principles and policies in relation to the attraction, development and retention, performance management
and succession planning of Executives;
• assisting the Chair of the Board in the annual performance review of the CEO and Executive Directors;
• reviewing the Company’s objectives, policies and measurable outcomes to assess the effectiveness of policies and
compliance in relation to equal opportunity, sexual harassment, diversity and disclosures in the Company’s Corporate
Governance Statement;
• the review and oversight of the Group’s remuneration framework and policies to provide alignment with AMA’s
strategic objectives, culture, values and risk appetite;
• reviewing and making recommendations on remuneration arrangements, including the fixed remuneration and
short‑term and long‑term incentives of Executives and the broader Group as applicable;
• reviewing and making recommendations to the Board regarding its composition, competencies and diversity, including
assessing the skill requirement for the current and future requirements of the business; and
• the evaluation of the performance of the Board and Board Committees.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
22
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
REMUNERATION REPORT
2.2 GOVERNANCE FRAMEWORK
The Group has a robust remuneration governance framework overseen by the Board. This ensures that remuneration
arrangements are appropriately managed and that the agreed frameworks and policies are applied across the Group.
The Board is supported by the PCRNC and ARC. Each committee has its own Charter setting out its role and
responsibilities, composition and how it operates. Further information on these committees is available on the
Company’s website: amagroupltd.com/corporate-governance
The diagram below provides an overview of the remuneration governance framework that has been established by the Group.
The Board maintains overall accountability for oversight of the Group’s remuneration policies.
The Board reviews, challenges, applies judgement and, as appropriate, approves the recommendations made by
the PCRNC. It approves the remuneration of Executive KMP and Non‑Executive Directors and the policies and
frameworks that govern both.
BOARD
PEOPLE, CULTURE, REMUNERATION AND
NOMINATION COMMITTEE
Is the main governing body for key people and remuneration strategies across the Group.
The role of the PCRNC is to provide advice and assistance to the Board in relation to people management and
remuneration policies, so that remuneration outcomes for Executives are appropriate and aligned to Company
performance and shareholder expectations.
SENIOR
MANAGEMENT
Provides recommendations on remuneration
design and outcomes to the PCRNC.
Implements remuneration policies.
INDEPENDENT EXTERNAL
REMUNERATION ADVISORS
The PCRNC may seek advice from independent
remuneration consultants in determining
appropriate remuneration polices for the Group.
OTHER GOVERNANCE PRACTICES
Use of
external
advisors
Clawback
policy and
discretion
Securities
trading
policy
To assist in performing its duties and making recommendations to the Board, the PCRNC has access
to independent external consultants to seek advice on various remuneration related matters as
required. Any recommendations made by consultants in relation to remuneration arrangements
for KMP must be made directly to the Board without any influence from management to ensure
any advice is independent of management. No remuneration recommendations as defined in the
Corporations Act 2001 (Cth) were provided to the PCRNC during FY21.
The Group’s LTI plans are subject to clawback. This enables the Board to claw back remuneration
outcomes in the event of material non-compliance with any financial reporting requirement,
misconduct, or breach of obligations. The Board retains discretion to adjust remuneration outcomes
upwards or downwards to ensure incentives are not provided where it would be inappropriate or
would provide unintended outcomes. The Board balances judgement on remuneration outcomes
with consideration to all stakeholders.
AMA has adopted a Securities Trading Policy that applies to all employees of the Group including
Non‑Executive Directors, Executive KMP and their associated persons. The policy ensures compliance
with insider trading laws, to protect the reputation of the Group and maintain confidence in trading
in AMA Group Limited securities. The policy also prohibits specific types of transactions being made
which are not in accordance with market expectations or may otherwise give rise to reputational risk.
Remuneration
Report
approval
The PCRNC will continue to encourage an open and constructive dialogue with shareholders and
their representative bodies and will consult with major stakeholders on any material changes to the
remuneration policy or how it is implemented. Of the eligible votes cast at the Company’s 2020 AGM,
98.68% were in favour of the FY20 Remuneration Report. The Company did not receive specific
feedback at the AGM on its remuneration practices.
23
AMA GROUP LIMITED | 30 JUNE 2021 i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
REMUNERATION REPORT
REMUNERATION FRAMEWORK
2.3
Our remuneration framework is designed to support the Group’s strategic priorities, attract, retain and motivate
appropriately skilled and talented Executives to drive the business forward, instill a strong performance and governance
culture, and provide a link between executive remuneration, group performance and shareholder return. The Group has a
clear set of principles which guide our remuneration decisions and design.
The Group reviews its remuneration framework regularly to ensure it continues to evolve and be fit-for-purpose ensuring
alignment to market expectations and the businesses strategic priorities.
OUR STRATEGIC PRIORITIES
ORGANIC
GROWTH
ACQUISITION
GROWTH
MARGIN
EXPANSION
CASHFLOW
GENERATION
GREAT PLACE
TO WORK
OUR REMUNERATION PRINCIPLES
FAIR AND
MARKET
COMPETITIVE
LINKED TO
OUR STRATEGIC
PRIORITIES
LINKED TO
PERFORMANCE
AND CULTURE
SIMPLE
AND
TRANSPARENT
ALIGNED
TO OUR
SHAREHOLDERS
OUR REMUNERATION FRAMEWORK FOR FY21
TFR
STI
LTI
Purpose
Link to
performance
Performance
measures
Attract and retain Executives
with the capability and
experience to deliver our
strategic objectives and
contribute to the Group’s
financial and operational
performance.
Appropriately compensate
Executives for driving a
performance and governance
culture and delivering on the
business strategy.
Considerations
• Skills and experience
• Accountability
• Role complexity
• Market competitive
Alignment
Attract and retain the best
people based upon the
competitive landscape
among relevant peers.
Reward Executives for
performance against agreed
annual objectives aimed at
achieving the financial and
strategic objectives of
the Group.
Align performance with the
long‑term business strategy
to drive sustained earnings
and long‑term shareholder
returns.
Strategic annual objectives are
embedded in each Executive’s
personalised performance
measures.
Financial gateway
A minimum Group Normalised
EBITDA of at least 75% of target
must be achieved before any
STIs are payable.
Financial criteria
Group and Divisional EBITDA:
59 ‑ 75%
Non‑financial criteria
Customer satisfaction: 10 ‑ 14%
Operational excellence: 5 ‑ 12%
People & culture initiatives:
10 ‑ 17%
STI at risk
Up to 50% of fixed remuneration
Reward year‑on‑year
performance in a balanced and
sustainable manner.
Performance hurdles are set
by the Board and tested at the
end of the three‑year period to
deliver sustained shareholder
value.
Performance measures are
independently tested.
Relative TSR
20% of LTI allocation
EPS
80% of LTI allocation
LTI at risk
Group CEO and Group CFO ‑
up to 150% of TFR
Divisional CEOs ‑
up to 100% of TFR
Performance conditions
must be satisfied before the
conditional rights vest.
Encourages sustainable,
long‑term value creation
through equity ownership.
Performance Rights with
allocation calculated at
Face Value.
Delivery
Competitive, market‑based
fixed remuneration. (Base salary,
statutory superannuation, long
service leave and other minor
fringe benefits)
Performance based incentives
delivered in cash.
24
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
REMUNERATION REPORT
3
EXECUTIVE REMUNERATION IN DETAIL
REMUNERATION MIX AND COMPOSITION
3.1
The level and mix of remuneration is designed to reward the achievement of both short and long‑term objectives of the
business. This provides strong alignment between Executive outcomes and performance.
The graph below represents the target remuneration mix for Executive KMP for FY21. The STI is provided at target
levels, and the LTI represents the maximum opportunity available for Executives assuming the performance
requirements are satisfied.
33%
67%
50%
17%
33%
40%
40%
20%
20%
40%
40%
Group CEO
Carl Bizon 1
Group CFO
Steven Becker
Capital Smart CEO
David Marino
APAS CEO
Campbell Jones
TFR
STI
LTI
1 The remuneration mix for the Group CEO reflects actual remuneration arrangements for FY21.
Had Carl Bizon held the role of Group CEO for the full year, Carl’s target remuneration mix would
have been 33% TFR, 17% STI and 50% LTI.
EXECUTIVE EMPLOYMENT AGREEMENTS
3.2
Remuneration and other terms of employment for Executive KMP are formalised in employment agreements and are
summarised in the table below.
KMP
Carl Bizon
Steven Becker
David Marino
Campbell Jones
Base salary inclusive of
statutory superannuation
$900,000
$575,000
$585,000
$425,000
Term of agreement
Ongoing contract
Ongoing contract
Ongoing contract
Ongoing contract
Notice period and
termination entitlement
Review period 1
6 months
3 months
12 months 2
6 months
Annual
Annual
Annual
Annual
1 This review will have regard to such matters as the responsibilities, performance, and remuneration of the employee.
2 David Marino’s notice period is on the same terms as David’s previous employment contract prior to the acquisition of Capital Smart.
Andrew Hopkins resigned from the role of Group CEO on 31 January 2021. Andrew Hopkins was on a base salary inclusive
of statutory superannuation of $1,200,000 with a notice period and termination entitlement of 3 months.
Steven Bubulj resigned from the role of CEO AMA Panel on 26 March 2021. Steven Bubulj was on a base salary inclusive of
statutory superannuation and other benefits of $400,000 with a notice period and termination entitlement of 3 months.
TOTAL FIXED REMUNERATION
3.3
Total Fixed Remuneration considers the complexity
and expertise required of individual roles. To assess
the competitiveness of fixed remuneration, the
PCRNC considers market data by reference to
appropriate independent and externally sourced
comparable benchmark information, as required.
Total Fixed Remuneration comprises cash salary,
superannuation and long service leave. Additional
annual benefits may include minor fringe benefits.
25
AMA GROUP LIMITED | 30 JUNE 2021 REMUNERATION REPORT
3.4
SHORT‑TERM INCENTIVES
STI’s are based on the Group’s business and growth
strategies and are set annually by the Board at the
beginning of the performance period. Executive KMP and
other eligible senior management are entitled to participate
in the STI Plan. The calculation of STI entitlements are
assessed after the end of each financial year and in
conjunction with the completion of the external audit of the
Group’s Financial Statements.
Any entitlements will be paid at a date determined by the
Board following the release of the Group’s financial results
to the ASX.
The below table summarises the objectives of the Group’s
STI plan and identifies the performance measures and
relevant weightings for FY21.
Purpose
Motivate and reward employees for contributing to the delivery of annual business performance.
Participation
Executive KMP and other eligible senior management.
Performance
period
Opportunity
The performance period is for the 12 months ended 30 June.
The target STI opportunity for Executive KMP is 50% of fixed remuneration. Where significant
outperformance is achieved the Board has discretion to pay above target amounts. A sliding
scale element is incorporated into the relevant performance measures to motivate Executives to
outperform base targets set by the Board.
Financial
gateway
A minimum Group budgeted EBITDA of at least 75% of target must be achieved before any
STIs are payable.
Performance
targets
The achievement of individual performance targets (once the financial gateway has been achieved)
shall determine the proportion of the potential incentive that will be awarded. Set out below are the
performance goals and weightings that were applied in respect of FY21. A weighting range has been
provided due to the different STI performance measure weightings for Group and divisional Executives.
Measures
Category
Weighting of STI
Performance Goals
Financial
Financial
and business
improvement
59% ‑ 75%
Achieve budgeted EBITDA, as relevant
on a Group and Divisional level 1
The weighting of financial outcomes at a minimum 50% maintains a strong link between actual
financial performance of the business and incentives awarded.
Non‑financial
Customer
satisfaction
10% ‑ 14%
Operational
excellence
5% ‑ 12%
People
and culture
initiatives
10% ‑ 17%
Represents how well the Group is
meeting the expectations of our customers
and key external stakeholders. Key
strategic measures include execution
of business strategy and delivery of key
business priorities.
Drives focus on continued process
improvement and the delivery of strong
operational discipline aligned to the
Group’s business strategy to create
sustainable value for shareholders.
Recognises that organisations with a
diverse, inclusive, and engaged workforce
deliver improved performance and
superior returns for shareholders.
1 Budgeted EBITDA is measured taking into account the financial impact of any acquisition, and any other significant restructuring cost or Normalisations within
the Group, or changes in accounting standards, in order that the target is measured on a comparable basis.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
26
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
REMUNERATION REPORT
LONG‑TERM INCENTIVES
3.5
The PRP is the long‑term incentive component of remuneration for Executives. The key aspects of the plan are summarised
in the table below.
Purpose
Eligibility
Instrument
Assist in attracting, motivating, and retaining Executive talent; focus Executives attention on driving
sustainable long‑term growth; and align the interest of Executives with those of shareholders.
LTI grants are generally restricted to Executive KMPs and senior management who are most able to
influence shareholder value. Non-Executive Directors are not eligible to participate in the LTI plan.
Awards under this plan are made in the form of performance rights which are granted by the
Company for nil consideration. A performance right is a right to acquire one fully paid AMA share
provided specified performance hurdles are met. No dividends/distributions are paid on unvested
LTI awards.
Allocation
methodology
The number of performance rights allocated to each participant is set by the Board. Accounting
standards require the estimated valuation of the grants be recognised over the performance period.
The maximum value is based on the estimated fair value calculated at the time of the grant and
amortised in accordance with the accounting standard requirements.
Opportunity
The maximum LTI opportunity is equivalent to 150% of fixed remuneration for the Group CEO and
Group CFO and up to 100% of fixed remuneration for Divisional CEO’s.
Performance
period
Performance
hurdles
Vesting
schedule
Vesting/
delivery
Performance measures are tested at the end of the three‑year period.
The PCRNC review the performance conditions annually to determine appropriate hurdles based on
the Group’s strategy and prevailing market practice. The following performance measures apply to
the LTI grants:
Relative TSR
(20% of LTI
Allocation)
Relative TSR is an objective measure of shareholder value creation and is widely
understood and accepted by various key stakeholders. Given AMA is a unique
business and there are limited directly comparable companies, the Group’s relative
TSR is measured relative to companies which operate in a similar industry to AMA.
The comparator group includes AP Eagers Limited, ARB Corporation Limited,
Bapcor Limited, GUD Holdings Limited and Super Retail Group Limited. The relative
TSR comparator group will be reviewed as part of the FY22 executive remuneration
framework review.
EPS
(80% of LTI
allocation)
Growth in EPS is a direct measure of Group performance and provides a strong
correlation with long‑term shareholder return. The current EPS growth calculation is
a three‑year compound annual growth rate (CAGR).
Relative TSR
EPS
Relative TSR
(percentile)
Percentage of relative
TSR‑tested rights to vest
EPS CAGR
Percentage of EPS‑tested
rights to vest
<50th
50th
>50 to 75th
Nil
50%
< 10%
10%
Nil
50%
Straight line pro‑rata vesting
from 50% to 100%
> 10% and
up to 20%
Straight line pro rata vesting
from 50% to 100%
Vesting of LTI grants is dependent on achieving relative TSR performance and EPS targets which
are tested at the end of the three‑year period. The performance rights will automatically vest
and exercise if, and when, the Board determines the performance conditions are achieved. If the
performance rights vest, entitlements may be satisfied by either an allotment of new shares to
participants or by the purchase of existing shares on‑market. Any performance rights that do not
vest at the end of the performance period will lapse. The terms of the performance rights do not
include re‑testing provisions.
Termination/
forfeiture
Executive KMP must be employed at the time of vesting to receive an entitlement to shares.
The Board has discretion on vesting of unvested performance rights where an employee leaves due
to retirement, retrenchment or redundancy, or termination by mutual consent. Where an employee
leaves due to resignation or termination all unvested performance rights will lapse.
27
AMA GROUP LIMITED | 30 JUNE 2021 REMUNERATION REPORT
4
PERFORMANCE AND REMUNERATION OUTCOMES FOR FY21
COMPANY PERFORMANCE
4.1
The Group has demonstrated increased Normalised EBITDAI over the past five years, with the exception of FY20
predominantly due to COVID‑19.
The table below shows historical Company performance across a range of key measures. Performance across earnings and
individual measures is reflected directly in STI awards. LTI outcomes are aligned with shareholder returns over the last three years.
Company Performance
Revenue and other income ($’000)
Net profit / (loss) ($’000)
Normalised EBITDAI ($’000)
Total Shareholder Return
Basic EPS (cents)
Annual TSR (%)
Dividends (cents)
Share price at 30 June ($)
FY17
FY18
FY19
FY20
FY21
382.2
17.4
41.1
3.3
22.8
2.50
0.97
509.8
15.4
52.2
2.9
10.8
2.50
1.05
606.7
21.7
58.2
3.4
38.8
2.75
1.43
825.4
(71.5)
53.2
(9.7)
(58.0)
‑
0.60
919.9
(99.1)
71.5
(14.8)
(4.2)
‑
0.58
FIXED REMUNERATION OUTCOMES
4.2
Carl Bizon was appointed Group CEO on 1 February 2021. Carl’s skills and experience, including his previous
Non‑Executive Directorship with the Company, align with the priority to reset our business and unlock value for
shareholders. In determining the remuneration structure for Carl, the Board took into consideration his skills, experience
and industry knowledge and the remuneration of CEOs of other ASX listed companies of similar size, complexity and
market capitalisation.
The remuneration structure for Carl Bizon includes a fixed remuneration component of $900,000 (inclusive of
superannuation); a maximum STI opportunity of up to 50% of fixed remuneration; and a maximum LTI opportunity of up to
150% of fixed remuneration. Carl Bizon’s fixed remuneration is $300,000 (25%) less than his predecessor, as a result, target
total remuneration has also reduced by 25%. Changes to the CEO’s remuneration arrangements have been made to more
closely align remuneration quantum with the market.
A market‑based increase of 28% in the remuneration of Group CFO, Steven Becker, was the only adjustment to Executive
KMP fixed remuneration in FY21. The increase was awarded in recognition for high performance, increased responsibilities
and delivery of business strategy.
The PCRNC considers that the current fixed remuneration for other Executive KMP appropriately reflects their skills and
experience at the time.
STI OUTCOMES
4.3
During the year the Board reviewed the appropriateness of
the performance measures linked to the STI’s for Executives.
A main area of the review focussed on identifying performance
metrics that were measurable, understood and appropriate,
aligned with the growth and development of the business,
and to the interests of our shareholders.
In addition to financial performance targets, including a
financial performance gateway of achieving 75% of budgeted
EBITDA, the Board introduced the following clear and
measurable non-financial performance metrics in order for
Executives to achieve their target STI:
• Customer satisfaction;
• Operational excellence; and
• People and culture initiatives aimed at attracting, developing,
motivating and retaining key talent required for the current
and future growth of the business
Futher information on the performance goals attached to these
non-financial performance metrics can be found in section 3.4.
STI outcomes for Group Executives including the Group CEO
and Group CFO are determined based on performance against
the Group STI scorecard. The following table outlines the Group
STI performance measures that applied to the FY21 STI, and
the performance achieved.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
28
WORLD CLASS AUTOMOTIVE SOLUTIONS
REMUNERATION REPORT
4.3
STI OUTCOMES (CONT.)
DIRECTORS’ REPORT
Weighting
(at target)
Overall
FY21
outcome
Weighted
outcome
(% of target)
Performance
assessment
The financial gateway was exceeded in FY21.
Group scorecard
category and
performance measures
Gateway
75% of Group Normalised
EBITDAI
Financial
• Group Normalised EBITDAI
75%
• Leverage
• Revenue
Customer
• Delivery of projects
10%
• Cost recovery /
management
• Growth in external sales
Operational excellence
• Synergy realisation
• Safety (Group LTIFR)
People
• Behaviour, conduct and
adherence to AMA’s
Company values
Group STI scorecard outcome
5%
10%
•
•
•
•
73.20%
• Group Normalised EBITDAI was $71.55m
which was between threshold and
target performance.
• Group leverage improved and
performance was better than target
for FY21.
• Revenue was below target for FY21.
0%
• Business was interrupted due to
COVID‑19 restrictions and Management
focussed on navigating the business
through the impacts.
• The synergy realisation targets in relation
to the acqusition of Capital Smart were
achieved in full during the year.
• Group LTIFR targets were exceeded
in FY21.
• The management team reinforced strong
code of conduct compliance, particularly
in the transition of the executive team.
5.25%
8.70%
87.15%
Key: FY21 outcome
Above target
At target
Between threshold
and target
Not achieved
STI outcomes for divisional Executives, including the CEO Capital Smart and CEO APAS, are determined based on a
combination of Group performance (55% weighting) and divisional performance (45% weighting).
For FY21, the CEO Capital Smart’s divisional STI performance measures included financial (40%), customer (20%), process
improvement (20%) and people (20%) measures. David Marino delivered strong performance across several performance
measures including divisional financial performance (divisional EBITDAI, cash flow and margin), customer (customer
infrastructure and integration), process and risk/governance improvements and people and culture measures including
safety and employee training and engagement. David Marino’s performance resulted in a divisional STI scorecard outcome
of 75.3% for FY21.
For the CEO APAS, divisional STI performance measures included financial (40%), strategy, customer and product (20%),
people learning & growth (25%) and performance improvement (15%) measures. Campbell Jones performed strongly
across a range of measures including achieving target performance across all divisional financial measures, developing
and improving APAS’s growth pipeline, building customer value and improving market penetration of APAS product
offerings. Recognising the importance of our people, during the year Campbell Jones built a strong and capable leadership
team, worked to enhance employee engagement, diversity & inclusion initiatives and ensured a safety culture was
embedded across APAS. In addition, Campbell Jones implemented a number of operational improvements to reduce
costs and improve margins, whilst ensuring risks were effectively managed. Campbell Jones’ additional responsibilities and
performance whilst acting as the CEO AMA Panel have also been considered when determining the STI outcome.
Campbell Jones’s performance resulted in a divisional STI scorecard outcome of 97% for FY21.
The following table outlines the FY21 STI outcomes for Executive KMP.
Executive KMP
Carl Bizon 1
Steven Becker
David Marino
Campbell Jones
Target STI as a
% of fixed remuneration
50%
50%
50%
50%
STI award
($)
$165,816
$239,877
$241,384
$196,115
% of target
STI awarded
% of target
STI forfeited
88%
83%
83%
92%
12%
17%
17%
8%
1 The STI award for Carl Bizon reflects his time and performance in the role of Group CEO and Executive Director from 1 February 2021.
29
AMA GROUP LIMITED | 30 JUNE 2021 REMUNERATION REPORT
4.4
LTI OUTCOMES
PERFORMANCE RIGHTS
The second allocation of performance rights under the PRP were granted on 23 November 2020. The grants were awarded
at no cost to the participants and are subject to performance conditions which will be tested at the end of the three‑year
performance period ending 30 June 2023.
Accounting standards require the estimated valuation of the grants be recognised over the performance period.
The maximum value is based on the estimated fair value calculated at the time of the grant and amortised in accordance
with the accounting standard requirements.
The first grant under the LTI plan will be performance tested at the end of FY22. No performance rights were tested or
vested during the current year.
For further details on the number of performance rights awarded to Executive KMP during the year refer to section 4.5.
4.5
EXECUTIVE REMUNERATION DISCLOSURES
FY21 EXECUTIVE REMUNERATION
The table below sets out the executive remuneration for FY21. Amounts represent the payments relating to the period
during which the individuals were KMP.
Salary 1
Bonus 2
Non‑
Monetary
benefits 3
Long‑
term
benefit 4
Post‑
employment
benefits 5
Equity
settled
benefits 6
Perform‑
ance
rights 7
Termination
benefits
Perform‑
ance
related %
Total
$
Executive Director
Carl
Bizon 8
2021
2020
386,836
165,816
‑
Former Executive Directors
Andrew
Hopkins 9
Raymond
Malone 10
Raymond
Smith‑
Roberts 10
2021
740,218
2020
1,146,698
2021
2020
2021
2020
‑
169,875
‑
Executive Management
113,082
92,431
Steven
Becker
David
Marino 11
Campbell
Jones 11
2021
2020
2021
2020
2021
2020
598,905
239,877
416,827
‑
573,796
241,384
354,283
‑
428,564
196,115
254,738
Former Executive Management
Steven
Bubulj 12
2021
2020
263,846
343,269
Consolidated Remuneration
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
32,192
‑
‑
‑
‑
641
2,525
‑
‑
‑
‑
‑
‑
‑
‑
‑
9,039
‑
12,655
14,002
‑
1,886
5,251
‑
‑
‑
‑
‑
‑
‑
‑
‑
13,715
25,000
250,000
‑
‑
(430,412)
430,412
‑
‑
‑
‑
‑
‑
‑
‑
‑
561,691
29.5%
‑
‑
322,461 (133.5%)
1,623,304
26.5%
‑
650,000
827,012
‑
‑
195,989
690,217
49.6%
‑
‑
‑
(557)
557
20,607
25,000
6,296
25,000
1,323
580
3,511
16,667
21,977
16,744
41,624
40,019
(333)
18,058
333
25,000
‑
‑
‑
‑
‑
‑
‑
(170,140)
170,140
(26,547)
69,630
(16,397)
42,141
(70,745)
70,745
‑
‑
‑
‑
‑
‑
‑
‑
689,333
615,049
10.1%
27.7%
819,929
26.2%
441,903
15.8%
630,839
28.5%
317,134
13.3%
252,450 (28.0%)
479,366
14.8%
2021
2,992,165
843,192
42,265
2020 2,798,772
92,431
74,736
5,986
21,325
107,336
‑
(714,241)
‑ 3,276,703
127,664
250,000
783,068
845,989 4,993,985
‑
‑
1 Salary includes short-term absences. 2020 salary reflects a 20% voluntary reduction in fixed salaries taken by Executive KMP in May and June 2020.
2 Bonuses represent the cash component of the STI awarded.
3 Non-monetary benefits represent the effective net cost to the Group, consisting of the taxable value of fringe benefits aggregated with the associated fringe
benefit tax payable of those benefits.
4 Long-term benefits represents the movement in the provision for long service leave for amounts accrued and paid.
5 Post-employment benefits represent amounts paid for pension and superannuation benefits.
6 Equity settled benefits represent the non-cash accounting charge to the Group’s operating result relating to prior year amortisation of sign-on bonus issued in
shares to Raymond Smith‑Roberts.
7 Performance Rights represents the accounting expense recognised in relation to performance rights granted in the year. For details on the valuation of the
performance rights including models and assumptions used, please refer to note F1(B)(iii) in the Consolidated Financial Statements.
These values may not represent the future value that the Executive KMP will receive, as the vesting of the Rights is subject to the achievement of performance
conditions. The probability of the performance conditions being satisfied is assessed at the end of each reporting period to reflect the most current
expectation of vesting. The FY21 amount includes the write‑back of the accounting expense recognised in FY20. This is as a result of either the service
condition not being met or a re‑assessment that the EPS hurdle will not be achieved.
The Performance Rights granted to Andrew Hopkins and Steven Bubulj were forfeited on cessation of employment. Any share‑based payment expense
previously recognised under AASB 2 Share‑based Payments in respect of the Performance Rights has been reversed.
Steven Becker resigned on 2 July 2021. The balance of the performance rights granted to Steve Becker remain on issue as at 30 June 2021 however the
share‑based expense previously recognised under AASB 2 Share‑based Payments has been reversed. As at 30 June 2021 there was a shared understanding
of Steven Becker not meeting the service condition.
8 Carl Bizon transitioned from Non‑Executive Director to Group CEO and Executive Director on 1 February 2021. The Executive remuneration included in the
above table is from 1 February 2021.
9 Andrew Hopkins resigned from the position of Group CEO and Executive Director on 31 January 2021. No termination benefits other than statutory
entitlements were made to Andrew.
10 Raymond Malone and Raymond Smith‑Roberts resigned from their positions as Executive Directors on 31 August 2019 and 20 November 2019 respectively.
11 David Marino and Campbell Jones were appointed KMPs on 1 November 2019.
12 Steven Bubulj was appointed a KMP on 1 July 2019 and resigned from the position of CEO AMA Panel on 26 March 2021.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
30
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
REMUNERATION REPORT
4.5
EXECUTIVE REMUNERATION DISCLOSURES (CONT.)
EXECUTIVE KMP SHAREHOLDINGS
The table below summarises the movements in holdings of interests in shares of AMA Group Limited relating to the period
during which individuals were KMP.
KMP
Executive Directors
Carl Bizon
Andrew Hopkins
Executive Management
Steven Becker
David Marino
Campbell Jones
Steven Bubulj
Total
Opening
balance
Balance on
appointment
Other changes
(net) 1
Balance on
resignation
Closing
balance
‑
37,790,269
61,112
‑
33,266
285,714
38,170,361
‑
‑
‑
‑
‑
‑
‑
400,000
‑
3,000,000 (40,790,269)
400,000
‑
‑
‑
‑
3,400,000
‑
‑
‑
(285,714)
(41,075,983)
61,112
‑
33,266
‑
494,378
1 Other changes (net) represent shares that were purchased or sold during the year.
EXECUTIVE KMP PERFORMANCE RIGHTS
The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting
period are set out in the table below:
KMP
Grant
Grant date 1
Performance
period
start date
Performance
period
end date
Vesting
date 2
Unvested
performance
rights as at
30 June 2021
Fair value
per
instrument 3
FY20
Share‑based
payment
expensed 4
TSR
EPS
($)
FY21
Share‑based
payment
expense /
(write‑back) 5
($)
Steven
Becker 6
David
Marino
Campbell
Jones
FY21
FY20 12/09/2019 01/07/2019 30/06/2022 01/07/2022
23/11/2020 01/07/2020 30/06/2023 31/08/2023
FY21
FY20 01/11/2019
01/07/2019 30/06/2022 01/07/2022
FY21
23/11/2020 01/07/2020 30/06/2023 31/08/2023
FY20 04/12/2019 01/07/2019 30/06/2022 01/07/2022
23/11/2020 01/07/2020 30/06/2023 31/08/2023 1,384,652 0.34 0.72
0.50
1.22
0.34 0.72
0.57
1.28
0.34 0.72
1.11
744,485
939,156
286,779
682,293
208,344 0.37
‑
170,140
‑
69,630
‑
42,141
‑
(170,140)
21,288
(47,835)
15,465
(31,862)
1 Grant date is the date on which there is a shared understanding of the terms and conditions of the share‑based payment arrangement.
2 Vesting date refers to the date at which the performance conditions are met.
3 The fair value of the performance rights at grant date is determined using appropriate models including a Monte‑Carlo simulation for the relative TSR
component and Black Scholes Model for the EPS component, and dependent on the vesting conditions. The value of each performance rights is recognised
evenly over the service period ending at the vesting date. For details on the valuation of the performance rights including models and assumptions used,
please refer to note F1(B)(iii) in the Consolidated Financial Statements.
4 The EPS tranche is re‑assessed annually based on the probability of the performance hurdle vesting. Based on current forecasts, the EPS CAGR hurdle is
not expected to be met and therefore the EPS tranche as at 30 June 2021 is valued at nil.
5 The FY21 share‑based payment write‑back represents the reversal of the accounting expense recognised in FY20 for the EPS tranche.
6 Steven Becker resigned on 2 July 2021. The balance of the performance rights granted to Steven remain on issue as at 30 June 2021 however the share‑based
expense previously recognised under AASB 2 Share‑based Payments has been reversed.
An allocation of performance rights to Carl Bizon, Group CEO and Executive Director will be included for approval at the
2021 AGM.
Andrew Hopkins, former Group CEO and Executive Director, ceased employment on 31 January 2021 and forfeited
1,985,295 performance rights granted to him in FY20 and a further 2,889,709 performance rights granted to him
during the current year. Steven Bubulj, former CEO AMA Panel, ceased employment on 26 March 2021 and forfeited
294,118 performance rights granted to him in FY20 and a further 642,158 granted to him during the current year.
The table below summarises the movements during the reporting period in the number of performance rights over
ordinary shares in AMA Group Limited held by each Executive KMP.
KMP
Executive Director
Andrew Hopkins 1
Executive Management
Steven Becker
David Marino
Campbell Jones
Steven Bubulj 2
Total
Opening
balance
Granted as
compensation
Lapsed
or forfeited
Closing
balance
Vested and
exercisable
1,985,295
2,889,709
(4,875,004)
‑
744,485
286,779
208,344
294,118
3,519,021
1,384,652
939,156
682,293
642,158
6,537,968
‑
‑
‑
(936,276)
(5,811,280)
2,129,137
1,225,935
890,637
‑
4,245,709
‑
‑
‑
‑
‑
‑
1 The Performance Rights held by Andrew Hopkins lapsed on 31 January 2021 at cessation of his employment.
2 The Performance Rights held by Steven Bubulj lapsed on 26 March 2021 at cessation of his employment.
OPTIONS OVER UNISSUED SHARES
No options were granted as remuneration during FY21. On 25 April 2021, 2,000,000 options on issue from a prior period
expired. As at 30 June 2021 there are no unvested or unexercised options held by Executive KMP.
31
AMA GROUP LIMITED | 30 JUNE 2021
REMUNERATION REPORT
5 NON‑EXECUTIVE DIRECTORS’ ARRANGEMENTS
POLICY AND APPROACH TO SETTING FEES
5.1
The remuneration policy for Non‑Executive Directors aims to ensure
the Group can attract and retain suitably skilled, experienced and
committed individuals to serve on the Board and remunerate them
appropriately for their time and expertise.
The remuneration policy is reviewed annually by the PCRNC,
taking into consideration the size and scope of the Group’s activities,
the responsibilities and liabilities of Directors, and demands placed
upon them.
During FY21, to ensure the Company positions itself to retain and attract
Non‑Executive Directors with appropriate skills and expertise to meet
the longer‑term objectives of the Company, the PCRNC benchmarked
its NED fees against companies of a similar size and complexity
based on AMA’s current and expected future market capitalisation.
With the exception of the Chair, the Board approved a 20% increase
in Non‑Executive Directors fees. In addition to Non‑Executive
Director base fee, and in line with general market practice, the Board
introduced an additional fee for serving as a Chair on the respective
Board Committees. The change to the remuneration structure of
Non-Executive Directors was effective from 1 June 2021.
CHANGES TO BOARD COMPOSITION
5.2
Andrew Hopkins ceased to be a Executive Director on 1 February 2021.
Carl Bizon transitioned from Non‑Executive Director to Executive
Director on 1 February 2021.
Following a thorough recruitment process aimed at enhancing the
diversity of skills and expertise of the Board, and to demonstrate the
Board’s long‑term strategy of growing the composition, capability
and independence of its members, Paul Ruiz and Kyle Loades were
appointed as Independent Non‑Executive Directors with effect from
17 May 2021 and 24 May 2021, respectively. Following appointment,
and in line with his experience and expertise, Paul Ruiz was appointed
a member of the Audit & Risk Committee.
The Board elected Nicole Cook to replace Anthony Day as Chair of
the PRCNC effective 18 December 2020.
CURRENT FEE STRUCTURE
5.3
Fees paid to Non‑Executive Directors are inclusive of superannuation
and reflect the commitment, demands and responsibilities of the
position. Fees are benchmarked against an appropriate group of
comparator companies and determined within the aggregate
Directors’ fee pool limit of $1,100,000, approved by shareholders
at the 2019 AGM.
Non‑Executive Directors do not receive variable remuneration.
Non‑Executive Directors are entitled to reimbursement for reasonable
business‑related expenses and are covered by the Group’s Directors
and Officers liability insurance policy.
Under the Group’s ‘Conflicts of Interest and Related Party Transaction
Policy’, Directors are prohibited from earning success and other
incentive fees from the provision of professional advisory services.
The table set out below provides a summary of the FY21 Board
and Committee fees (inclusive of superannuation). Fees for being a
Committee member are included in the Non‑Executive Director fee.
Position
Chair of the Board
Non‑Executive Director
Fee To
31 May 2021
$
275,000
100,000
Fee From
1 June 2021
$
275,000
120,000
Committee Chair
From 1 June 2021
$
None paid
15,000
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
32
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
REMUNERATION REPORT
5.4 NON‑EXECUTIVE DIRECTORS’ REMUNERATION DISCLOSURES
FY21 NON‑EXECUTIVE DIRECTORS’ REMUNERATION
The table below sets out the remuneration of Non‑Executive Directors of the Group. Amounts represent the payments
relating to the period during which the individuals were KMP.
Non‑Executive Directors
Anthony Day
Leath Nicholson
Simon Moore 2
Nicole Cook
Carl Bizon 3
Paul Ruiz 4
Kyle Loades 5
Former Non‑Executive Directors
Brian Austin 6
Consolidated remuneration
2021
$
2020 1
$
275,000
101,667
52,917
102,917
58,333
15,077
12,500
‑
618,411
222,083
96,667
50,000
55,000
38,333
‑
‑
66,667
528,750
In response to COVID‑19, the Non‑Executive Directors agreed to a 20% voluntary reduction in fees in May and June 2020.
1
2 Simon Moore waived his Non‑Executive Director fees for the period 1 January 2020 to 31 December 2020.
3 Carl Bizon transitioned from Non‑Executive Director to Group CEO and Executive Director on 1 February 2021. The NED remuneration included above is
up to 31 January 2021.
4 Paul Ruiz was appointed Non‑Executive Director on 17 May 2021.
5 Kyle Loades was appointed Non‑Executive Director on 24 May 2021.
6 Brian Austin resigned as Non‑Executive Director on 21 February 2020.
NON‑EXECUTIVE DIRECTORS’ SHAREHOLDINGS
The table below summarises the movements of interests in shares of AMA Group Limited relating to the period during
which individuals were KMP.
Opening
balance
Balance on
appointment
Balance on
retirement
Other changes
(net) 1
Balance on
retirement
Closing
balance
Non‑Executive Directors
Anthony Day
Leath Nicholson
Simon Moore
Nicole Cook
Carl Bizon
Paul Ruiz 2
Kyle Loades 3
Total
519,324
1,616,873
30,327,186
55,000
‑
‑
‑
32,518,383
‑
‑
‑
‑
‑
‑
43,297
43,297
1 Other changes (net) represent shares that were purchased or sold during the year.
2 Paul Ruiz was appointed Non‑Executive Director on 17 May 2021.
3 Kyle Loades was appointed Non‑Executive Director on 24 May 2021.
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
250,000
‑
‑
271,739
‑
521,739
‑
‑
‑
‑
‑
‑
‑
‑
519,324
1,616,873
30,577,186
55,000
‑
271,739
43,297
33,083,419
33
AMA GROUP LIMITED | 30 JUNE 2021
REMUNERATION REPORT
6 OTHER TRANSACTIONS AND BALANCES WITH KMP
In addition to specific disclosure requirements, the Group continuously re-assesses judgemental matters surrounding
relationships with KMP and completeness of its related party disclosures.
LOANS PROVIDED TO KMP
6.1
Loans outstanding at the end of the current and prior year include a loan to the former Group CEO and Executive Director,
Andrew Hopkins.
Andrew Hopkins’ loan accrues interest at a rate consistent to the ‘Indicator Lending Rates ‑ Bank variable housing loans
interest rate’ published by the Reserve Bank of Australia. Andrew Hopkins has defaulted on his loan and as at 30 June 2021,
the balance outstanding on his loan is $1,399,493 (2020: $1,339,130). The Group has not impaired the value of the loan
largely due to the existence of a recently signed loan deed and an assessment of the capacity of Andrew Hopkins to
repay the loan.
The movement from prior year to the current balance of $1,399,493 is due to interest accrued.
6.2 AMOUNTS RECOGNISED AS EXPENSES
A number of KMP hold directorships or are associated with other entities. During the year the Group transacted with
entities that were controlled or significantly influenced by members of the KMP.
The table below summarises the aggregate amounts that were recognised in the Consolidated Statement of Profit or Loss
in relation to the transactions which occurred between KMP and the Group.
Service, entity and nature of transaction
KMP
2021
$
2020
$
Legal and advisory services
The Group utilises Nicholson Ryan Lawyers for ongoing
legal and advisory services.
The Group engaged Colinton Capital Partners Pty Ltd to
provide financial advisory and transactional services in
relation to the acquisition of Capital Smart and ACM Parts,
and the related equity raise and debt refinance.
Property rental fees and outgoings
The Group has incurred rental fees and outgoing
expenses, and made payments to AV Ventures Pty Ltd,
A&R Property Developments Pty Ltd, A&R Development
Holdings Pty Ltd and Bundall Road Pty Ltd.
Leath Nicholson
930,697
1,541,683
Simon Moore
‑
3,150,000
Andrew Hopkins 1
1,357,234
2,035,353
The Group has incurred rental fees and outgoing
expenses, and made payments to Silvan Bond Pty Ltd
and Malone Superannuation Fund.
Raymond Malone 2
The Group has incurred rental fees and outgoing
expenses, and made payments to SFRE Pty Ltd.
Raymond Smith‑Roberts 3
‑
‑
39,609
125,074
Claims management
The Group transacts with A & R Insurance Management
(t/a Unity Specialised Services), a claims management
business which handles and allocates insurance claims
from a number of major insurers into vehicle accident
repair facilities around Australia.
Training and recruitment
The Group has incurred expenses and made payments
to I-CAR Australia, an industry based not-for-profit
organisation that provides training to the collision
repair industry and entities within the AMA Group.
Andrew Hopkins 1
437,983
653,544
Steven Bubulj 4
141,599
189,502
Total expenses
2,867,513
7,734,765
1 Amounts disclosed are for the period 1 July 2020 to 31 January 2021, which is the date Andrew Hopkins ceased being a KMP.
2 Amounts disclosed in relation to Raymond Malone are for the period to 31 August 2019 (prior comparative period), which is the date Raymond Malone ceased
being a KMP.
3 Amounts disclosed in relation to Raymond Smith‑Roberts are for the period to 20 November 2019 (prior comparative period), which is the date Raymond
Smith‑Roberts ceased being a KMP.
4 Amounts disclosed are for the period 1 July 2020 to 26 March 2021, which is the date Steven Bubulj ceased being a KMP.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
t
r
r
o
o
p
p
e
e
R
R
n
n
o
o
i
i
t
t
a
a
r
r
e
e
n
n
u
u
m
m
e
e
R
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
34
WORLD CLASS AUTOMOTIVE SOLUTIONS
REMUNERATION REPORT
6.3 AMOUNTS RECOGNISED AS ASSETS AND LIABILITIES
The table below summarises the aggregate amounts that were recognised in the Consolidated Statement of Financial
Position in relation to the transactions which occurred between KMP and the Group.
DIRECTORS’ REPORT
Classification and nature of transaction
KMP
Right‑of‑use assets
The Group leases site warehouses and office space from
AV Ventures Pty Ltd, A&R Property Developments Pty
Ltd, A&R Development Holdings Pty Ltd and
Bundall Road Pty Ltd.
Lease liabilities
The Group leases site warehouses and office space from
AV Ventures Pty Ltd, A&R Property Developments Pty
Ltd, A&R Development Holdings Pty Ltd and
Bundall Road Pty Ltd.
Trade and other payables
The Group utilises Nicholson Ryan Lawyers for ongoing
legal and advisory services.
Andrew Hopkins 1
Andrew Hopkins 1
2021
$
2020
$
‑
‑
14,400,516
14,942,611
Leath Nicholson
114,328
‑
The Group transacts with A & R Insurance Management
(t/a Unity Specialised Services), a claims management
business.
Andrew Hopkins 1
The Group transacts with I‑CAR Australia, an industry
based not-for-profit organisation.
Steven Bubulj 2
Net liabilities
‑
‑
17,760
19,000
114,328
578,855
1 2021 disclosure in relation to Andrew Hopkins is not shown as Andrew Hopkins was not a KMP as at 30 June 2021.
2 2021 disclosure in relation to Steven Bubulj is not shown as Steven Bubulj was not a KMP as at 30 June 2021.
FORMER CEO AND EXECUTIVE DIRECTOR
6.4
In late September 2020, the AMA Group Board of Directors received a protected disclosure from an individual employed by
the Company. On receipt of these allegations, in accordance with the Company’s Whistleblower Policy, the Group engaged
law firm Seyfarth Shaw Australia and leading forensic accounting firm McGrathNicol Advisory to undertake an independent
forensic investigation. The investigation was into the contents of the disclosure, which involved allegations in relation to the
conduct of the former Group CEO and Executive Director, Andrew Hopkins, during the period he was a senior executive
with the Group.
In January 2021, a report was received in respect of the independent forensic investigation and Andrew Hopkins’s
resignation was tendered on 31 January 2021, effective on that date. As disclosed in the half year report ended
31 December 2020, the Group had formally commenced a process to recover funds of approximately $1,000,000 based
on information at the date of that report.
Following the initial whistleblower disclosure and investigation, further whistleblower disclosures were made by a number
of individuals who each raised allegations about Andrew Hopkins’ conduct. The conduct primarily related to unauthorised
expenses. The unauthorised expenses are identified to have been incurred between FY16 and FY21, with the majority
incurred prior to FY20. A portion of these unauthorised transactions were capitalised in property, plant and equipment due
to the nature of the items. These have subsequently been written off to the profit or loss as impairment expense in FY21.
In May 2021, and as a result of McGrathNicol Advisory’s reports, the Company filed proceedings in the Federal Court of
Australia against Andrew Hopkins (and a company controlled by him) for the recovery of unauthorised expenses incurred
by or on behalf of Andrew Hopkins as CEO of the Company, and the repayment of an outstanding related party loan.
As noted in the FY20 Annual Report, Andrew Hopkins had a related party loan which dated back to FY16 and was acquired
as part of the Gemini Accident Repair Centres Pty Ltd acquisition. It was previously agreed to be extinguished against
future short‑term and long‑term incentives but under the agreement, it is immediately due and payable in the event that
Andrew Hopkins is no longer employed or contracted. Andrew Hopkins’s loan accrues interest and as at 30 June 2021, the
balance outstanding on his loan is circa $1,400,000. The Group has not impaired the value of the loan largely due to the
existence of a recently signed loan deed and an assessment of the capacity of Andrew Hopkins to repay the loan.
At the date of this report, the legal proceedings in the Federal Court of Australia remain on foot and the Group is seeking to
recover funds of approximately $3,000,000 relating to unauthorised expenses incurred by or on behalf of Andrew Hopkins
as CEO of the Company (circa $1,600,000) and the repayment of the outstanding loan which is in default and currently
due and payable (circa $1,400,000). At the date of this report, the Group has not yet received any funds.
Andrew Hopkins had been granted 4,875,004 performance rights under the Group’s PRP. The vesting requirements of the
performance rights are subject to service conditions. As the service conditions have not been met, the performance rights
lapsed on 31 January 2021.
During the financial year, the Group has incurred $737,000 in professional fees relating to investigating the whistleblower
disclosures and subsequent legal proceedings.
35
AMA GROUP LIMITED | 30 JUNE 2021 i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
t
r
r
o
o
p
p
e
e
R
R
’
’
s
s
r
r
o
o
t
t
c
c
e
e
r
r
i
i
D
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
OTHER ITEMS
CORPORATE GOVERNANCE STATEMENT
The Board believes that genuine commitment to good corporate governance is essential to the performance and
sustainability of the Company’s business.
The Board has given due consideration to the ASX ‘Corporate Governance Principles and Recommendations’, which offer a
framework for good corporate governance.
The Board has approved the Corporate Governance Statement for the year ended 30 June 2021 which can be viewed on
the Company’s website at amagroupltd.com/corporate-governance/
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.
INSURANCE OF OFFICERS AND INDEMNITIES
Insurance of officers
During the financial year, the Company paid a premium in respect of a contract insuring the directors, the company
secretaries, and all executive officers of the Company and of any related body corporate against a liability incurred as such
a director, secretary or executive officer to the extent permitted by the Corporations Act 2001.
The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect
of the directors’ and officers’ liability, costs and charges, as such disclosure is prohibited under the terms of the contract.
Indemnity of auditors
The Company has not during or since the end of the financial year, except to the extent permitted by law, indemnified or
agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as
such an officer or auditor.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
NON‑AUDIT SERVICES
Details of the amounts paid or payable to the auditor (KPMG) for audit and non‑audit services provided during the year are
set out in note F3 to the Consolidated Financial Statements.
The Board of Directors has considered the position and, in accordance with advice received from the Audit and Risk
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of
non‑audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• All non‑audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
• None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 38.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191,
relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off
in accordance with the instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This Directors’ Report is signed in accordance with a resolution of the Board of Directors.
Carl Bizon
Director
23 August 2021
36
WORLD CLASS AUTOMOTIVE SOLUTIONS
DIRECTORS’ REPORT
37
37
AMA GROUP LIMITED | 30 JUNE 2021 i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
38
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Adam Twemlow Partner Bundall23 August 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Adam Twemlow Partner Bundall23 August 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Adam Twemlow Partner Bundall23 August 2021 WORLD CLASS AUTOMOTIVE SOLUTIONS
FINANCIAL
REPORT
FOR THE YEAR ENDED 30 JUNE 2021
TABLE OF CONTENTS
FINANCIAL REPORT
Consolidated Statement of Profit or Loss
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
40
41
42
43
44
45
105
These Financial Statements are Consolidated Financial Statements for the Group consisting of AMA Group Limited and its controlled
entities. A list of controlled entities is included in note E2.
The Financial Statements are presented in the Australian currency.
AMA Group Limited is a Company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of
business is: Level 4, 130 Bundall Road, Bundall QLD 4217
The Financial Statements were authorised for issue by the Directors on 23 August 2021. The Directors have the power to amend and
reissue the Financial Statements.
All press releases, financial reports and other information are available at our Investor Centre on our website: amagroupltd.com/
39
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Adam Twemlow Partner Bundall23 August 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Adam Twemlow Partner Bundall23 August 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of AMA Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of AMA Group Limited for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Adam Twemlow Partner Bundall23 August 2021 AMA GROUP LIMITED | 30 JUNE 2021 CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2021
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
Revenue and other income from continuing operations
Raw materials and consumables used
Employee benefits expense
Occupancy expense
Supplier termination fee
Professional services expense
Other expense
Fair value adjustment on contingent vendor consideration
Depreciation and amortisation expense
Impairment expense
Operating loss before interest and tax
Finance costs
Loss before income tax from continuing operations
Income tax benefit
Loss after income tax from continuing operations
Profit / (loss) after income tax from discontinued operations
Loss for the period
Loss is attributable to:
Members of AMA Group
Non‑controlling interests
Earnings / (loss) per share
From continuing operations
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
From continuing and discontinued operations
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
Notes
B2
B3(C)
B3(A)
B3(D)
B3(B)
B4(A)
E5(A)
Notes
D2(C)
D2(D)
D2(C)
D2(D)
2021
$’000
2020 1
$’000
919,920
825,408
(436,609)
(388,390)
(314,189)
(22,207)
(9,437)
(8,198)
(23,008)
(5,977)
(81,289)
(102,465)
(83,459)
(30,054)
(113,513)
2,283
(111,230)
12,151
(99,079)
(298,166)
(24,919)
‑
(15,242)
(22,071)
(4,487)
(69,249)
(51,672)
(48,788)
(26,924)
(75,712)
5,575
(70,137)
(1,331)
(71,468)
(96,950)
(2,129)
(99,079)
(70,265)
(1,203)
(71,468)
2021
Cents
(14.78)
(14.78)
(13.13)
(13.13)
2020 1
Cents
(9.74)
(9.74)
(9.93)
(9.93)
1 Comparative information has been re‑presented in accordance with AASB 5 Non‑current Assets Held for Sale and Discontinued Operations ‑ refer note E5.
The above Consolidated Statement of Profit or Loss should be read in conjunction with the accompanying notes.
40
WORLD CLASS AUTOMOTIVE SOLUTIONS
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2021
Loss for the period
Other comprehensive income / (expense)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Changes in fair value of cash flow hedges
Other comprehensive income / (expense), net of tax
Notes
2021
$’000
2020
$’000
(99,079)
(71,468)
442
475
917
(269)
(185)
(454)
Total comprehensive loss, net of tax
(98,162)
(71,922)
Total comprehensive loss is attributable to:
Members of AMA Group Limited
Non‑controlling interests
E3(B)
(96,035)
(2,127)
(98,162)
(70,719)
(1,203)
(71,922)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
41
AMA GROUP LIMITED | 30 JUNE 2021 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
ASSETS
Current assets
Cash and cash equivalents
Receivables and contract assets
Inventories
Other financial assets
Tax receivable
Other assets
Total current assets
Non‑current assets
Property, plant and equipment
Right‑of‑use assets
Intangible assets
Other assets
Other financial assets
Deferred tax assets
Total non‑current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Tax payable
Total current liabilities
Non‑current liabilities
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Deferred tax liabilities
Total non‑current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Retained deficit
Total Group interest
Non‑controlling interests
Total equity
Notes
D6
C1
C2
C3
B4(C)
C4
C5
C7
C6
C4
C3
B4(E)
C8
C3, D7(B)
C7
C10
C9
B4(C)
C3, D7
C7
C10
C9
B4(E)
2021
$’000
2020
$’000
64,203
72,912
32,354
1,555
‑
6,019
177,043
72,729
306,877
551,912
‑
712
17,879
950,109
112,916
72,099
38,744
‑
3,338
10,295
237,392
93,090
345,409
694,087
605
1,878
15,160
1,150,229
1,127,152
1,387,621
119,169
32,547
33,784
32,773
14,007
1,456
117,596
22,015
35,207
33,466
15,613
‑
233,736
223,897
237,691
293,134
12,853
47,550
51,270
642,498
363,685
320,305
13,116
63,131
60,467
820,704
876,234
1,044,601
250,918
343,020
D4(A)
D5
E3(A)
424,404
568
(188,268)
236,704
14,214
417,117
880
(91,318)
326,679
16,341
250,918
343,020
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
42
WORLD CLASS AUTOMOTIVE SOLUTIONS
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Balance at 1 July 2019
Loss for the period
Other comprehensive expense
Total comprehensive expense for the period
Attributable to owners of AMA Group Limited
Share
capital
$’000
Other
reserves
$’000
Retained
deficit
$’000
Notes
Non‑
controlling
interests
$’000
Total
$’000
Total
equity
$’000
200,263
46
(8,128)
192,181
292
192,473
‑
‑
‑
‑
(70,265)
(70,265)
(1,203)
(71,468)
(454)
‑
(454)
‑
(454)
(454)
(70,265)
(70,719)
(1,203)
(71,922)
Transactions with owners in their
capacity as owners:
Shares issued, net of transaction costs
D4
216,854
Employee equity plan
Dividends provided for or paid
Non‑controlling interests on
acquisition of subsidiary
Transactions with
non‑controlling interests
Balance at 30 June 2020
F1(D)
D3
E3(C)
Notes
Balance at 1 July 2020
Loss for the period
Other comprehensive income
Total comprehensive income / (loss) for the period
‑
1,288
‑
‑
‑
‑
‑
216,854
1,288
‑
‑
216,854
1,288
(12,215)
(12,215)
(169)
(12,384)
‑
‑
17,544
17,544
(710)
(710)
(123)
(833)
‑
‑
‑
‑
216,854
417,117
1,288
(12,925)
205,217
17,252
222,469
880
(91,318)
326,679
16,341
343,020
Attributable to owners of AMA Group Limited
Share
capital
$’000
417,117
‑
‑
‑
Other
reserves
$’000
Retained
deficit
$’000
Non‑
controlling
interests
$’000
Total
$’000
Total
equity
$’000
880
(91,318)
326,679
16,341
343,020
‑
(96,950)
(96,950)
(2,129)
(99,079)
915
‑
915
2
917
915 (96,950)
(96,035)
(2,127)
(98,162)
Transactions with owners in their
capacity as owners:
Shares issued, net of transaction costs
Employee equity plan
Share buy‑back and fair value
adjustment on contingent
vendor consideration
D4
F1(D)
8,537
‑
‑
(1,227)
D4
(1,250)
‑
7,287
(1,227)
‑
‑
‑
‑
8,537
(1,227)
(1,250)
6,060
‑
‑
‑
‑
8,537
(1,227)
(1,250)
6,060
Balance at 30 June 2021
424,404
568 (188,268)
236,704
14,214
250,918
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
43
AMA GROUP LIMITED | 30 JUNE 2021 CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
Notes
2021
$’000
2020
$’000
Proceeds from disposal of business (net of costs and cash disposed)
E5
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Government grants received
Market incentive received (inclusive of GST)
Interest received
Interest and other costs of finance paid
Income taxes paid
Net cash inflows provided by operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Payments for purchases of property, plant and equipment
Payments for intangible assets
Payments for businesses acquired (including earn‑outs)
Cash acquired through business combinations
Net cash inflows / (outflows) from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Principal elements of lease payments
Payment of new borrowings transaction costs
Equity raised, net of transaction costs
Dividends paid to AMA shareholders
Dividends paid to non‑controlling shareholders
Net cash (outflows) / inflows from financing activities
1,042,324
(1,000,166)
B3(C)
43,891
B4(C)
D6(B)
‑
267
(26,969)
(7,243)
52,104
670
63,184
(12,514)
(191)
996,432
(916,566)
21,146
59,510
330
(27,536)
(10,858)
122,458
20
25
(13,285)
(510)
(17,885)
(451,597)
‑
19,488
33,264
(445,859)
‑
D6(C)
D6(C)
(102,500)
(31,560)
‑
‑
‑
‑
(134,060)
378,500
(119,068)
(29,552)
(4,926)
208,711
(9,310)
(169)
424,186
Net (decrease) / increase in cash and cash equivalents
(48,692)
100,785
Cash and cash equivalents, at the beginning of the financial year
Effects of exchange changes on the balances held in foreign currencies
Cash and cash equivalents, at end of the financial year
D6(A)
112,916
(21)
64,203
12,096
35
112,916
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
44
WORLD CLASS AUTOMOTIVE SOLUTIONS
CONTENTS OF
THE NOTES TO
THE FINANCIAL
STATEMENTS
A
A1
A2
A3
B
B1
B2
B3
B4
C
C1
C2
C3
C4
C5
C6
C7
C8
C9
C10
D
D1
D2
D3
D4
D5
D6
D7
D8
E
E1
E2
E3
E4
E5
E6
F
F1
F2
F3
F4
F5
F6
F7
BASIS OF PREPARATION
Basis of preparation
Significant accounting policies
Critical accounting estimates and judgements
PERFORMANCE FOR THE YEAR
Segment information
Revenue and other income
Other expense items
Taxes
ASSETS AND LIABILITIES
Receivables and contract assets
Inventories
Other financial assets and liabilities
Other assets
Property, plant and equipment
Intangible assets
Right‑of‑use assets and lease liabilities
Trade and other payables
Other liabilities
Provisions
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
Capital management
Earnings / (loss) per share
Dividends
Contributed equity
Other reserves
Cash and cash equivalents
Borrowings and contingent vendor consideration
Financial risk management
GROUP STRUCTURE
Parent entity information
Investments in controlled entities
Non‑controlling interests
Deed of cross guarantee
Discontinued operations
Business combinations
OTHER INFORMATION
Share‑based payments
Related party transactions
Auditors’ remuneration
Commitments
Contingent liabilities
Former CEO and Executive Director
Events occurring after the reporting period
46
47
48
49
51
53
54
58
59
60
61
62
64
69
72
72
73
75
76
77
77
78
79
81
83
89
90
91
92
94
96
98
100
102
103
103
104
104
45
AMA GROUP LIMITED | 30 JUNE 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A
BASIS OF PREPARATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards
and other pronouncements but is not immediately related to individual line items in the financial statements.
A1
A2
A3
BASIS OF PREPARATION
SIGNIFICANT ACCOUNTING POLICIES
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
A1 BASIS OF PREPARATION
This section describes the financial reporting framework within which the Consolidated Financial Statements
are prepared and a statement of compliance with the Corporations Act 2001 and Australian Accounting
Standards and Interpretations.
The Group is a for-profit entity which is incorporated and domiciled in Australia. The Consolidated Financial Report of
the Group for the year ended 30 June 2021 was authorised for issue in accordance with a resolution of directors on
23 August 2021.
The Consolidated Financial Statements have been prepared on the historical cost basis except for derivative financial
instruments and contingent vendor consideration which have been measured at fair value.
Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current
financial year presentation.
In accordance with AASB 5 Non‑current Assets held for Sale and Discontinued Operations, the following statements and
notes have been re-presented so that the disclosures relate to all operations classified as discontinued in the current
reporting period:
• Consolidated Statement of Profit or Loss
• Note B1 ‑ Segment information
• Note B2 ‑ Revenue and other income
• Note B3 ‑ Other expense items
• Note B4 ‑ Taxes
• Note D2 ‑ Earnings / (loss) per share
• Note E5 ‑ Discontinued operations
The Consolidated Financial Statements are presented in Australian dollars and amounts have been rounded to the nearest
thousand dollars unless otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191.
The Consolidated Financial Statements of the Group are general purpose financial statements which have been prepared in
accordance with the Corporations Act 2001, and Australian Accounting Standards and Interpretations.
Compliance with Australian Accounting Standards ensures that the Consolidated Financial Report complies with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Consequently, this Financial Report has been prepared in accordance with and complies with IFRS as issued by the IASB.
(A) GOING CONCERN
This general purpose Consolidated Financial Report has been prepared on a going concern basis, which assumes that the
Group will be able to meet its debts as and when they become due and payable.
During the year and subsequent to year end, authorities have responded to the COVID‑19 pandemic with travel restrictions,
such as border closures and lockdowns. These restrictions decrease traffic volumes and also have a negative effect on
costs inputs such as labour (decrease worker mobility and fewer skilled migrant workers), and supply chain inputs (parts
and consumables). These factors have impacted the Group’s revenue and profitability.
Despite the adverse conditions resulting from impacts of COVID-19, during FY21, the Group generated cash inflows
from operating activities of $52,104,000. Management has prepared cash flow forecasts for the next twelve months that
support the ability of the Group to continue as a going concern. The cash flow forecasts assume that the impacts of the
COVID‑19 pandemic will ease, and AMA will continue to work closely and constructively with its major customers.
The Board approved budget for FY22 is based on current experience and considered a range of scenarios and
management actions available to remain cash flow positive.
The Group’s liquidity remains strong, with a net debt position as at 30 June 2021 of $173,297,000 and a further
$57,720,000 of undrawn debt facilities (refer note D7). The Group used sale proceeds from the ACAD and Fully Equipped
divestment to delever during the period. As at 30 June 2021, the Group had $64,203,000 in cash and cash equivalents.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
46
WORLD CLASS AUTOMOTIVE SOLUTIONS
BASIS OF PREPARATION
A1
BASIS OF PREPARATION (CONT.)
(A) GOING CONCERN (CONT.)
As at 30 June 2021, the Group has current liabilities exceeding current assets by $56,693,000. This is impacted by the:
• repayment of debt during FY21 (repayment of $102,500,000);
• market incentive that will be amortised against future purchases from a key supplier that is included in other current
liabilities ($14,000,000, refer note C9(A));
• implementation of AASB 16 Leases (refer note C7) which requires of the right-of-use asset to be entirely classified
in non‑current, whilst future lease payments are split between current ($33,784,000) and non‑current, resulting
in a mismatch.
Management expects any working capital deficiency will be met out of operating cash flows.
The Group is required to comply with financial covenants under the terms of its borrowing facilities including a net leverage
ratio and a fixed charge cover ratio. In response to COVID-19, the Group’s financiers waived covenant testing until
31 December 2020 and provided a more favourable covenant testing regime for the balance of FY21. No restrictions were
imposed by the financiers during the reporting period and the Group was compliant with all covenants during the period,
including as at 30 June 2021.
Management’s forecasts for the next twelve months include the impacts of ongoing uncertainties of the COVID‑19
pandemic which indicate there are potential risks of non-compliance with financial covenants. Accordingly, the Group has
obtained covenant waivers for all financial covenants in respect to both the 30 September 2021 and 31 December 2021
testing periods.
The Group has agreed with its financiers to undertake a restructure of its debt facilities prior to 31 December 2021 to
address any potential non‑compliance after this date. In the event that this is not achieved, the Group may need to request
further waivers or deferrals in relation to covenant testing and restructuring of its debt facilities. Management may be able
to undertake alternative actions such as raising equity, securing additional financing, restructuring operations or the sale
of assets should financiers be unable to accommodate the need for waivers or deferrals as at 31 March 2022 and
subsequent dates.
Whilst the outcome of the debt facility restructure is inherently uncertain and so may cast significant doubt upon the
Group’s ability to continue as a going concern, Management believes that the range of actions available to it means that the
uncertainty is being managed to the extent events are within the control of management. In the event the Group does not
achieve the above outlined initiatives, it may not be able to continue its operations as a going concern and therefore may
not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in
the Consolidated Financial Report.
Despite the financial impacts of the COVID-19 pandemic on the Group and continued uncertainty as to future impacts,
in the Directors’ opinion the Group remains resilient and, as at the date of approving this report, that the cash flow
forecasts and potential funding alternatives available support the use of the going concern basis for the preparation of
the Consolidated Financial Report.
A2 SIGNIFICANT ACCOUNTING POLICIES
This section sets out the significant accounting policies upon which the Consolidated Financial Statements are
prepared as a whole. Where a significant accounting policy is specific to a note to the Consolidated Financial
Statements, the policy is described within that note. This section also shows information on new accounting
standards, amendments, and interpretations not yet adopted and the impact they will have on the
Consolidated Financial Statements.
(A) BASIS OF CONSOLIDATION
The Consolidated Financial Statements incorporate the assets and liabilities of all controlled entities in the Group as at
30 June 2021 and the results of all controlled entities for the year then ended. A list of the controlled entities is provided in
note E2 to these Financial Statements.
The Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date
that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
Non-controlling interests are shown separately in the Consolidated Statement of Profit or Loss, Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position and Consolidated Statement of Changes in Equity.
47
AMA GROUP LIMITED | 30 JUNE 2021 A NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
A2
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(B) GOODS AND SERVICES TAX (GST)
Revenues, expenses, assets and liabilities are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the taxation authority. 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 taxation authority is included with other receivables or payables in the
Consolidated 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 taxation authority, are presented as operating cash flows.
(C) NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
The Group has applied the following standards and amendments for the first time for their annual reporting period
commencing 1 July 2020:
• AASB 2018‑7 Amendments to Australian Accounting Standards - Definition of Material
• AASB 2018‑6 Amendments to Australian Accounting Standards - Definition of a Business
• AASB 2019‑3 Amendments to Australian Accounting Standards ‑ Interest Rate Benchmark Reform
• AASB 2019‑5 Amendments to Australian Accounting Standards ‑ Disclosure of the Effect of New IFRS Standards
Not Yet Issued in Australia.
• AASB 2020‑4 Amendments to Australian Accounting Standards ‑ Covid‑19 Related Rent Concessions
• Conceptual Framework for Financial Reporting and AASB 2019‑1 Amendments to Australian Accounting Standards ‑
References to the Conceptual Framework
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
(D) NEW AND AMENDED STANDARDS NOT YET ADOPTED BY THE GROUP
Certain new accounting standards and amendments to standards have been published that are not mandatory for reporting
periods commencing 1 July 2020 and have not been early adopted by the Group. These standards are not expected to have
a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
A3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
This section describes the critical accounting estimates and judgements that have been applied and may have a
material impact on the Consolidated Financial Statements.
In applying the Group’s policies, the Directors are required to make estimates, judgements, and assumptions that affect
amounts reported in this Consolidated Financial Report. The estimates, judgements, and assumptions are based on
historical experience, adjusted for current market conditions, and other factors that are believed to be reasonable under
the circumstances, and are reviewed on a regular basis. Actual results may differ from estimates.
The estimates and judgements which involve a higher degree of complexity or that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next period are included in the
following notes:
• Note A1(A) ‑ Going concern
• Note C6(B)(iv) ‑ Estimation of recoverable amounts of assets and CGUs
• Note C7(H) ‑ Estimation of lease term contracts with renewal options
• Note D7(B)(ii) ‑ Estimation of fair values of contingent vendor consideration
• Note E6(F) ‑ Estimation of fair values of assets and liabilities in business combinations where provisional amounts
have been recognised
• Note F1(E) ‑ Estimation of fair values of equity instruments issued in share‑based payments
Detailed information about each of these estimates and judgements is included in the specific notes together with
information about the basis of calculation for each affected line item.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
48
WORLD CLASS AUTOMOTIVE SOLUTIONS
PERFORMANCE FOR THE YEAR
B
PERFORMANCE FOR THE YEAR
This section provides information that is most relevant to explaining the Group’s performance during the year and
where relevant, the accounting policies that have been applied.
B1
B2
B3
B4
SEGMENT INFORMATION
REVENUE AND OTHER INCOME
OTHER EXPENSE ITEMS
TAXES
B1 SEGMENT INFORMATION
The Group identifies different business divisions that are regularly reviewed by the Board and executive
management in order to allocate resources and assess performance. These divisions offer different products
and services and are managed separately. The segment disclosures present the financial performance of each
division and other material items.
(A) DESCRIPTION OF SEGMENTS
The Group determines and presents its operating segments based on the internal reports that are reviewed and used by
the Chief Operating Decision Makers (CODM). The Board and executive management, identified as the CODM, assess the
performance of the Group and determine the allocation of resources.
The principal activity of the Group is the operation and development of complementary businesses in the automotive
aftercare market. The Group is a leader in the Australian and New Zealand collision repair industry and a national supplier
in vehicle parts.
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 has identified the following reportable segments:
• Vehicle Panel Repairs
• Automotive Parts and Accessories
Unless stated otherwise, all amounts reported are determined in accordance with the Group’s accounting policies.
All inter‑segment transactions are eliminated on consolidation for the Consolidated Financial Statements.
Comparative information has been re‑presented to exclude all operations that have been discontinued by the end of the
current reporting period.
49
AMA GROUP LIMITED | 30 JUNE 2021 B
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
B1
SEGMENT INFORMATION (CONT.)
(B) ADJUSTED EBITDAI FROM REPORTABLE SEGMENTS
In addition to using profit as a measure of the Group, the Board and CODM use adjusted EBITDAI as a measure to assess
the performance of the segments.
Adjusted EBITDAI excludes discontinued operations and the effects of significant items which may have an impact on
the quality of earnings such as depreciation, amortisation, finance costs, fair value adjustments on contingent vendor
consideration and impairment.
A reconciliation of adjusted EBITDAI to loss before income tax from continuing operations is provided below:
Revenue and other income
Revenue from customers
Inter‑segment revenue
Other income
Total segment revenue from external
customers and other income
Vehicle Panel
Repairs
Automotive Parts
and Accessories
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Total
2021
$’000
2020
$’000
852,201
787,528
85,533
47,423
‑
3,119
‑
(21,226)
(10,824)
999
115
126
937,734
(21,226)
3,234
834,951
(10,824)
1,125
855,320
788,527
64,422
36,725
919,742
825,252
Unallocated revenue and other income
Total Group revenue from external customers and other income
178
156
919,920
825,408
EBITDAI
AASB 16 Leases impact to occupancy
costs and other income
Adjusted segment EBITDAI
(excluding impact of AASB 16 Leases)
110,328
95,772
5,354
(48,168)
(41,838)
(3,700)
(2,076)
(2,357)
115,682
93,696
(51,868)
(44,195)
62,160
53,934
1,654
(4,433)
63,814
49,501
AASB 16 Leases impact to occupancy costs and other income
Unallocated expenses
Depreciation, amortisation and impairment expense
Finance costs
Fair value adjustments on contingent vendor consideration
Loss before income tax from continuing operations
51,868
(9,410)
44,195
(17,076)
(183,754)
(120,921)
(30,054)
(26,924)
(5,977)
(113,513)
(4,487)
(75,712)
(C) DISCONTINUED OPERATIONS
The discontinued operations disclosures in the current year relate to the sale of ACAD and Fully Equipped businesses,
which occurred on 31 December 2020. The prior year disclosures include those entities and three other businesses which
were discontinued or sold during FY20.
Total revenue and other income from discontinued operations for the year ended 30 June 2021 was $40,537,000
(2020: $67,073,000).
Statutory EBITDAI for the year ended 30 June 2021 was $6,906,000 (2020: $9,504,000). Adjusted EBITDAI (excluding
impact of AASB 16 Leases) for the year ended 30 June 2021 was $6,971,000 (2020: $6,407,000). The 2020 amount of
$6,407,000 is the net amount of $7,257,000 from ACAD and Fully Equipped entities disposed on 31 December 2020, and
$850,000 loss from three other businesses discontinued or sold in FY20.
SEGMENT ASSETS AND LIABILITIES
(D)
Segment assets and liabilities are not directly reported to the CODM when assessing the performance of the operating
segments and are therefore not relevant to the disclosure.
(E) GEOGRAPHICAL INFORMATION
The Group operates in two geographic locations, being Australia and New Zealand. The table below provides information
on the geographical location of revenue from external customers which is allocated to a geography based on the location
of the operation it was derived. Revenue related to discontinued operations has been excluded.
Australia
New Zealand
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Total
2021
$’000
2020
$’000
Revenue from external customers
895,023
809,234
21,485
14,893
916,508
824,127
Other income
3,407
1,278
5
3
3,412
1,281
Total Group revenue from external customers and other income
919,920
825,408
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
50
WORLD CLASS AUTOMOTIVE SOLUTIONS
PERFORMANCE FOR THE YEAR
B2 REVENUE AND OTHER INCOME
The Group is Australia’s largest vehicle accident repairer and generates revenue primarily from its panel repair
services. Other revenue is derived from the sale of automotive parts.
Set out below is the disaggregation of the Group’s revenue from external customers and other income. The Group derives
revenue from the transfer of goods and services over time and at a point in time.
Comparative information has been re‑presented into continuing or discontinued operations consistent to the end of the
current reporting period.
From continuing operations
Revenue from external customers
Vehicle Panel
Repairs
Automotive Parts
and Accessories
Unallocated
Total
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Vehicle panel repair services
852,201
787,528
‑
‑
Sale of goods
Other services
Total revenue from external
customers
‑
‑
‑
‑
63,977
36,256
330
343
852,201
787,528
64,307
36,599
Other income
Interest income
Other income
Total other income
142
2,977
3,119
297
702
999
6
109
115
13
113
126
‑
‑
‑
‑
178
‑
178
‑
‑
‑
852,201
787,528
63,977
36,256
330
343
‑ 916,508
824,127
156
‑
156
326
3,086
3,412
466
815
1,281
Revenue from external customers
and other income
855,320 788,527
64,422
36,725
178
156
919,920 825,408
Timing of recognition
Over time
At a point in time
852,201
787,528
330
‑
‑
63,977
Revenue from external customers
852,201
787,528
64,307
343
36,256
36,599
Geographical markets
Australia
New Zealand
830,716
772,635
64,307
36,599
21,485
14,893
‑
‑
Revenue from external customers
852,201
787,528
64,307
36,599
Total revenue and other income
from discontinued operations
‑
‑
40,537
67,073
In respect of vehicle panel repair services:
• approximately 80% is derived from insurers (2020: approximately 80%);
• the top two customers amount to $576,292,000 (2020: $496,809,000).
‑
‑
‑
‑
‑
‑
‑
‑
‑
852,531
787,871
63,977
36,256
‑ 916,508
824,127
‑ 895,023 809,234
‑
21,485
14,893
‑ 916,508
824,127
‑
40,537
67,073
51
AMA GROUP LIMITED | 30 JUNE 2021 B NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
B2
REVENUE AND OTHER INCOME (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Revenue
Revenue from contracts with customers is recognised to depict the transfer of promised goods or services to
customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services.
Revenue is recognised in accordance with the following five-step process:
1. Identifying the contract with the customer.
2. Identifying the performance obligations in the contract.
3. Determining the transaction price.
4. Allocating the transaction price to the performance obligations in the contract.
5. Recognising revenue as and when the performance obligations are satisfied.
Revenue is recognised for the major business activities as follows:
Vehicle Panel Repair Services
Revenue arising from these services relate to performance obligations satisfied over time and in future periods.
The output method, based on completed vehicle repairs, is used to recognise revenue from such contracts for
the services rendered during the period.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change.
Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period
in which the circumstances that give rise to the revision become known by management. Jobs completed not
invoiced are reflected as a contract asset within other receivables until billed.
Sale of goods
The Group manufactures and sells automotive parts and accessories online, in the wholesale market and through
retail premises. Sales are recognised when control of the goods has transferred, that is, when the goods are
delivered to the wholesaler or sold to the end customer.
Some goods are sold with retrospective volume discounts based on aggregate sales over a specified period.
Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume
discounts. Discounts are estimated based on experience using the expected value method, and revenue is only
recognised to the extent that it is highly probable that a significant reversal will not occur.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due.
Interest revenue
Interest revenue is recognised on a time proportional basis, taking into account the effective interest rates
applicable to the financial assets. It includes amortisation of any discount or premium.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
52
WORLD CLASS AUTOMOTIVE SOLUTIONS
PERFORMANCE FOR THE YEAR
B3 OTHER EXPENSE ITEMS
The Group has identified a number of items which are material due to the significance of their nature and/or amount.
They are listed separately below to provide a better understanding of the financial performance of the Group.
(A) DEPRECIATION AND AMORTISATION EXPENSE
Depreciation expense on property, plant and equipment
Depreciation expense on right‑of‑use assets
Amortisation on intangibles
Total depreciation and amortisation expense
2021
$’000
22,276
41,064
17,949
81,289
2020
$’000
19,458
37,486
12,305
69,249
Depreciation and amortisation expense from discontinued operations
2,018
3,933
(B)
FINANCE COSTS
Interest and finance charges
Interest expense on lease liabilities and make good provision
Amortisation of borrowing costs
Total finance costs
2021
$’000
8,943
19,801
1,310
2020
$’000
9,426
16,631
867
30,054
26,924
Interest expense on lease liabilities from discontinued operations
613
1,084
SIGNIFICANT ACCOUNTING POLICY
Finance costs
Finance costs are recognised as expenses in the period in which they are incurred. Finance costs comprise
interest on borrowings calculated using the effective interest method, interest expense on lease liabilities, and
amortisation of capitalised borrowing costs over the term of the borrowings.
(C) GOVERNMENT GRANTS
The Group is eligible for the Australian Federal Government’s JobKeeper Assistance Program and the New Zealand Wage
Subsidy as a result of the economic impact from COVID‑19.
The temporary wage subsidies are recognised as government grants. The Group recognises the amount received from the
respective governments as an offset to employee benefits expense.
The Group recognised the following government grants for the year ended 30 June 2021:
Balance at 1 July
Received in cash during the year
Charged to profit or loss - employee benefits expense
Charged to profit of loss - discontinued operations
Balance at 30 June
2021
$’000
13,155
(43,891)
28,350
2,386
‑
2020
$’000
‑
(21,146)
32,311
1,990
13,155
A reconciliation of the net employee benefits expense recognised in the Consolidated Statement of Profit or Loss is
provided below:
Employee benefits expense - gross
Government grants offset against employee benefits expense
Employee benefits expense ‑ net
2021
$’000
342,539
(28,350)
314,189
2020
$’000
330,477
(32,311)
298,166
SIGNIFICANT ACCOUNTING POLICY
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all
attached conditions will be complied with. The Group recognises the amount received from government grants
as an offset to the related expense item.
53
AMA GROUP LIMITED | 30 JUNE 2021 B NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
B3
OTHER EXPENSE ITEMS (CONT.)
IMPAIRMENT EXPENSE
(D)
The Group recognised the following non‑cash impairment expense for the year ended 30 June 2021:
Impairment of goodwill ‑ Capital Smart
Impairment of goodwill ‑ AMA Panel
Impairment of goodwill ‑ APAS
Impairment of non‑current assets
Impairment of right‑of‑use assets
Impairment of financial assets
Total impairment expense
Impairment of goodwill ‑ APAS
Impairment of right‑of‑use assets
Total impairment expense from discontinued operations
Notes
C6(B)
C6(B)
C6(B)
C5, C6(A)
C7(E)
2021
$’000
90,580
4,190
1,013
4,923
1,428
331
102,465
‑
‑
‑
2020
$’000
46,971
2,075
‑
‑
2,626
‑
51,672
3,700
973
4,673
During the year, the Group has recognised impairment charges in respect of goodwill against all three operating segments.
The carrying value of the CGUs have been reduced to the recoverable amount. Refer to note C6 for further details.
B4 TAXES
This section presents the total income tax expense charged to the Group in respect of amounts currently owing
for taxable profits and future income taxes recoverable or payable in respect of temporary differences. The Group
presents a reconciliation of accounting profit or loss to income tax and a summary of changes in future income tax
recoverable or payable by major category.
(A)
INCOME TAX BENEFIT
Current tax
Current tax expense
Adjustments for current tax of prior periods
Total current tax expense
Deferred tax
Decrease in deferred tax assets
Decrease in deferred tax liabilities
Total deferred tax benefit
2021
$’000
9,914
467
10,381
6,480
(17,648)
(11,168)
2020
$’000
3,493
(828)
2,665
1,704
(8,814)
(7,110)
Income tax benefit
(787)
(4,445)
Income tax benefit is attributable to:
Continuing operations
Discontinued operations
(2,283)
1,496
(787)
(5,575)
1,130
(4,445)
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
54
WORLD CLASS AUTOMOTIVE SOLUTIONS
PERFORMANCE FOR THE YEAR
B4
TAXES (CONT.)
(B)
RECONCILIATION OF ACCOUNTING PROFIT / (LOSS) TO INCOME TAX BENEFIT
Loss before tax from continuing operations
Profit / (loss) before tax from discontinued operations
2021
$’000
(113,513)
13,647
(99,866)
2020
$’000
(75,712)
(201)
(75,913)
Tax at the Australian tax rate of 30% (2020: 30%)
(29,960)
(22,774)
Tax effect of amounts which are not (assessable) / deductible in calculating
taxable income:
Non‑deductible impairment expense
Non‑deductible expenses
Fair value adjustments on contingent vendor consideration
Employee equity plan expense
Non‑assessable income on the gain on sale of discontinued operations
Adjustments for current tax of prior periods
Recognition of previously unrecognised tax losses
Derecognition of previously recognised deductible temporary differences
Effect of tax rates in foreign jurisdictions
Other
Income tax benefit
(C)
RECONCILIATION OF INCOME TAX PAYABLE / (RECEIVABLE)
Balance at 1 July
Movement:
Income taxes payable for the period
Adjustments for current tax of prior periods
Income tax paid
(Disposed) / acquired through business combinations
Balance at 30 June
(D) AMOUNTS RECOGNISED DIRECTLY THROUGH EQUITY
Hedging reserve
Share capital
Total recognised directly through equity
28,735
188
1,688
(368)
(2,219)
467
(205)
853
15
19
(787)
2021
$’000
(3,338)
9,914
2,154
15,824
1,518
1,350
588
‑
(828)
(113)
‑
‑
(10)
(4,445)
2020
$’000
4,713
3,493
(749)
(7,243)
(10,858)
(31)
1,456
2021
$’000
(194)
‑
(194)
63
(3,338)
2020
$’000
79
2,063
2,142
55
AMA GROUP LIMITED | 30 JUNE 2021 B NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
B4
TAXES (CONT.)
(E) DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES
Deferred tax assets
Deferred tax liabilities
Receivables and contract assets
Inventories
Property, plant and equipment
Right‑of‑use assets
Intangible assets
Trade and other payables
Lease liabilities
Provisions - employee benefits
Provisions ‑ other
Deferred income
Capitalised expenditure
Tax losses
Other items
2021
$’000
263
‑
1,662
‑
‑
1,775
97,901
11,309
3,034
‑
2,134
2,269
325
2020
$’000
261
189
286
‑
‑
2,022
106,358
11,182
2,300
‑
3,493
1,515
79
2021
$’000
‑
(696)
(1,324)
(91,841)
(60,027)
‑
‑
‑
‑
2020
$’000
‑
‑
(1,532)
(102,216)
(65,151)
‑
‑
‑
‑
(60)
(3,947)
‑
‑
‑
‑
(115)
(146)
Deferred tax assets / (liabilities) ‑ before set‑off
120,672
127,685
(154,063)
(172,992)
Set‑off of tax
(102,793)
(112,525)
Net deferred tax assets / (liabilities) ‑ after set‑off
17,879
15,160
102,793
(51,270)
112,525
(60,467)
Balance at 1 July
Movement:
Adoption of AASB 16 Leases
Adjustments for tax of prior periods
To profit or loss
Through equity
Acquired through business combinations
Disposals ‑ discontinued operations
Balance at 30 June
(F)
TAX LOSSES
127,685
13,210
(172,992)
(2,650)
‑
3,646
(6,480)
(194)
3,090
(7,075)
120,672
68,266
(1,777)
(1,704)
2,142
47,548
‑
‑
(68,266)
(1,980)
17,648
‑
(2,893)
6,154
416
8,814
‑
(111,306)
‑
127,685
(154,063)
(172,992)
Unused tax losses for which a deferred tax asset has been recognised
Unused revenue losses
Tax benefit at 30%
Unused tax losses for which no deferred tax asset has been recognised
Unused revenue losses
Unused capital losses
Total unused tax losses
2021
$’000
7,562
2,269
2,126
10,154
12,280
2020
$’000
5,049
1,515
2,798
6,081
8,879
Potential tax benefit at 30%
3,684
2,663
All unused tax losses can be carried forward indefinitely subject to the loss utilisation tests and have no expiry date.
The unused losses for which a deferred tax asset has been recognised represent revenue losses for the Company’s
partially‑owned subsidiary, Capital Smart Group Holdings Pty Ltd (refer to (G) on the following page). Management
considers it probable that future taxable profits would be available against which these tax losses can be recovered and,
therefore, the related deferred tax asset can be recognised.
The unused revenue losses for which no deferred tax asset has been recognised represent transferred revenue losses of the
Company and its wholly‑owned Australian resident entities. Management has determined that a deferred tax asset should
not be recognised for these losses as they have low available fractions which restrict the rate of utilisation.
The unused capital losses for which no deferred tax asset has been recognised represent capital losses of the Company
and its wholly‑owned Australian resident entities. Management has determined a deferred tax asset on unused capital
losses should not be recognised on the basis that it is not probable that future capital gains would be available against
which the capital losses can be utilised.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
56
WORLD CLASS AUTOMOTIVE SOLUTIONS
PERFORMANCE FOR THE YEAR
B4
TAXES (CONT.)
TAX CONSOLIDATION
(G)
The Company and its wholly‑owned Australian resident entities formed a tax consolidated group with effect from
1 September 2006. AMA Group Limited is the head entity of the tax consolidated group and has assumed the current tax
liabilities of the members in its the tax consolidated group.
The Australian resident entities of the Capital Smart Group of companies formed a separate tax consolidated group with
effect from 31 October 2019. Capital Smart Group Holdings Pty Ltd is the head entity of the tax consolidated group and has
assumed the current tax liabilities of the members in its tax consolidated group.
The Consolidated Financial Statements incorporate the tax balances of both tax consolidated groups.
Income tax expense or benefit, deferred tax assets, and deferred tax liabilities arising from temporary differences of the
members of the tax consolidated groups are recognised by each subsidiary where the subsidiary would have been able to
recognise the deferred tax asset or deferred tax liability on a standalone basis.
The members of the tax consolidated groups have entered into tax funding agreements with each head entity which sets
out the funding obligations in respect of income tax amounts. The agreements require payments by the subsidiaries to the
head entity equal to the income tax liability assumed by the head entity. The head entity is required to make payments to
the subsidiaries equal to the current tax asset assumed by the head entity.
In respect of carried forward tax losses brought into the tax consolidated groups on consolidation by subsidiary
members, the head entity will pay the subsidiary member for such losses when these losses are transferred to the tax
consolidated groups, where the subsidiary member would have been entitled to recognise the benefit of these losses on
a standalone basis.
SIGNIFICANT ACCOUNTING POLICIES
Income tax
Income tax expense in the Consolidated Statement of Profit or Loss for the period presented comprises current
and deferred tax.
Income tax is recognised in the Consolidated Statement of Profit or Loss except to the extent that it relates to
items recognised in other comprehensive income, or directly in equity, in which case the tax is also recognised in
other comprehensive income, or directly in equity, respectively.
Current tax
Current tax payable represents the amount expected to be paid to taxation authorities on taxable income for the
period, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable
in respect of previous periods.
Deferred tax
Deferred tax is calculated using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting and taxation purposes. Deferred tax is measured
at the rates that are expected to apply in the period in which the liability is settled, or asset realised, based on tax
rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition
(other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit or in relation to the initial recognition of goodwill.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the deductible temporary differences or unused tax losses and tax offsets can be utilised. Deferred
tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The benefit of intangible assets with an indefinite useful life will flow to the Group on an annual basis, therefore
the carrying amount will be recovered through use.
Deferred tax assets and liabilities are offset when there is a legally enforcable right to offset current tax assets
and liabilities, and they relate to income taxes levied by the same taxation authority and the same taxable entity.
57
AMA GROUP LIMITED | 30 JUNE 2021 B NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C
ASSETS AND LIABILITIES
This section provides information about the working capital of the Group and major balance sheet items including the
accounting policies, judgements and estimates relevant in understanding these items.
C1
C2
C3
C4
C5
C6
C7
C8
C9
C10
RECEIVABLES AND CONTRACT ASSETS
INVENTORIES
OTHER FINANCIAL ASSETS AND LIABILITIES
OTHER ASSETS
PROPERTY, PLANT AND EQUIPMENT
INTANGIBLE ASSETS
RIGHT‑OF‑USE ASSETS AND LEASE LIABILITIES
TRADE AND OTHER PAYABLES
OTHER LIABILITIES
PROVISIONS
C1 RECEIVABLES AND CONTRACT ASSETS
Receivables and contract assets predominantly consist of amounts owed to the Group by customers for sales of
goods and services in the ordinary course of business.
Trade receivables
Allowance for expected credit losses
Other receivables
Contract assets
2021
$’000
37,285
(304)
36,981
5,627
30,304
35,931
2020
$’000
31,725
(394)
31,331
19,367
21,401
40,768
Total receivables and contract assets
72,912
72,099
(A) ALLOWANCE FOR EXPECTED CREDIT LOSSES ON TRADE RECEIVABLES
As at 30 June 2021, current trade receivables of the Group were assessed for impairment. Movements in the allowance for
expected credit losses of receivables are set out below:
Balance at 1 July
Movement:
Acquired through business combinations
Additional expected credit losses (released) / recognised
Receivables (written back) / written off during the year as uncollectible
Disposals ‑ discontinued operations
Balance at 30 June
2021
$’000
394
‑
(68)
(1)
(21)
304
2020
$’000
190
103
78
23
‑
394
TRADE RECEIVABLES PAST DUE BUT NOT IMPAIRED
(B)
As at 30 June 2021, trade receivables of $13,337,000 (30 June 2020: $4,103,000) were past due but not impaired. These
relate to a number of customers for whom there is no recent history of default and for which full payment is expected.
An ageing analysis of trade and other receivables past due but not impaired is set out below:
Up to 3 months
3 to 6 months
Total
2021
$’000
10,131
3,206
13,337
2020
$’000
3,134
969
4,103
FAIR VALUE DISCLOSURE
(C)
Due to the short‑term nature of these receivables, their carrying amount is considered to approximate their fair value.
For information about the methods and assumptions used in determining the fair value of the Groups receivables refer
to note D8(D)(i).
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
58
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C1
RECEIVABLES AND CONTRACT ASSETS (CONT.)
RISK EXPOSURE
(D)
Information concerning the credit risk of receivables is set out in note D8(B)(ii).
SIGNIFICANT ACCOUNTING POLICIES
Trade and other receivables
Trade and other receivables are recognised initially at fair value and are subsequently measured at amortised
cost using the effective interest method, less an allowance for expected credit loss. They generally have credit
terms ranging from 30 to 60 days.
Allowance for expected credit losses on trade and other receivables
The Group assesses the expected credit losses associated with its trade and other receivables on a forward‑
looking basis. The Group applies the simplified approach to measuring expected credit losses, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. To measure the expected
credit losses, trade and other receivables that share similar credit risk characteristics and days past due are
grouped and then assessed for collectability as a whole.
Contract assets
The Group presents any unconditional rights to consideration separately as a receivable while those rights
arising from satisfaction of performance obligations in a contract are presented as contract assets. A right to
consideration is unconditional if only the passage of time is required before payment of that consideration is due.
Contract assets are measured at the actual amount of transaction price.
C2
INVENTORIES
Raw materials and consumables
Finished goods
Total inventories
2021
$’000
17,777
14,577
32,354
2020
$’000
17,900
20,844
38,744
Finished goods
The Group periodically reviews the value of items in inventory and records write‑downs or write‑offs based on its
assessment of slow moving or obsolete inventory. Allowances are recorded against finished goods for any such declines.
As at 30 June 2021, the Group has recognised a provision for inventory obsolescence of $2,428,000 (30 June 2020:
$3,080,000).
Finished goods ‑ gross
Provision for inventory obsolescence
Finished goods ‑ net
2021
$’000
17,005
(2,428)
14,577
2020
$’000
23,924
(3,080)
20,844
SIGNIFICANT ACCOUNTING POLICIES
Inventories
Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less estimated costs of completion necessary to make the sale.
Reviews are made periodically by management on inventories for excess inventories, obsolescence and decline
in net realisable value below cost. Allowances are recorded against inventories for any such declines based on
historical experience on obsolescence and slow‑moving inventory.
Costs incurred in bringing each product to its present location and condition are determined after deducting
rebates and discounts received or receivable and are accounted for, as follows:
• Raw materials - purchase cost on a first-in / first-out basis
• Finished goods ‑ cost comprises direct materials, direct labour and an appropriate proportion of variable
and fixed overhead expenditure.
59
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C3 OTHER FINANCIAL ASSETS AND LIABILITIES
Other financial assets and liabilities consist of loans provided to a former related party and other employees and
derivative financial instruments.
Other financial assets
Current
Loans provided to a former related party and other employees
Total current
Non‑current
Loans provided to a former related party and other employees
Derivative - financial instrument
Total non‑current
Total other financial assets
Other financial liabilities
Current
Derivative - financial instrument
Total current
Non‑current
Derivative - financial instrument
Total non‑current
Total other financial liabilities
2021
$’000
2020
$’000
1,555
1,555
‑
712
712
2,267
327
327
‑
‑
327
‑
‑
1,878
‑
1,878
1,878
231
231
65
65
296
LOANS PROVIDED TO A FORMER RELATED PARTY AND OTHER EMPLOYEES
(A)
Loans outstanding at the end of the current and prior year include a loan to the former Group CEO and Executive Director,
Andrew Hopkins. For further information refer to note F6.
(B) DERIVATIVES
The Group is party to derivatives in the normal course of business in order to hedge exposure to fluctuation in interest
rates. In accordance with the Group’s financial risk management policies, the Group does not hold or issue derivatives for
trading purposes.
The Group entered into interest rate swap contracts to fix the interest rate at 0.43% (excluding margin and line fees) on
$193,500,000 of borrowings. Interest is payable based on a margin over bank bill swap rate. The swap contract matures
on 30 October 2024.
(i) Fair value disclosures
The fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the
hedged item is more than 12 months. It is classified as a current asset or liability when the remaining maturity of the hedged
item is less than 12 months.
For information about the methods and assumptions used in determining the fair value of derivatives refer to note D8(D)(iii).
(ii) Risk exposure
For information about the Groups net exposure to cash flow interest rate risks refer to note D8(A)(ii).
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
60
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C3
OTHER FINANCIAL ASSETS AND LIABILITIES (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Loans provided to related parties
Loans provided to related parties are recognised initially at fair value plus transaction costs and, in subsequent
period are stated at amortised cost. The Group assess the expected credit losses associated with loans provided
to related parties on a forward-looking basis. The Group applies the simplified approach to measuring expected
credit losses, which requires expected lifetime losses to be recognised from initial recognition of the loan.
Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and subsequently
remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item
being hedged.
The Group designates its interest rate swap as a cash flow hedge. The Group documents at the inception
of the hedging transaction the relationship between hedging instruments and hedged items, as well its risk
management objective and strategy for undertaking various hedge transactions. The Group also documents
its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in a
hedging transaction have been and will continue to be highly effective in offsetting changes in fair values or
cash flows of hedged items.
C4 OTHER ASSETS
Current
Acquisition deposits
Prepayments and other assets
Total current
Non‑current
Acquisition deposits
Prepayments and other assets
Total non‑current
Total other assets
2021
$’000
600
5,419
6,019
‑
‑
‑
2020
$’000
5,000
5,295
10,295
600
5
605
6,019
10,900
SIGNIFICANT ACCOUNTING POLICIES
Other assets
Acquisition deposits are held primarily as an offset to contingent vendor consideration and will be released
when the respective earn-outs are finalised. Prepayments and other assets are capitalised expenses relating
to future periods.
61
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C5 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment represents the investment by the Group in tangible assets.
Leasehold
improvements
$’000
Plant and
equipment
$’000
Furniture
and fittings
$’000
2019
Cost
Accumulated depreciation
Net book amount
Movement:
Additions
Acquired through business combinations
Disposals
Depreciation
Effect of foreign exchange
Reclass to right‑of‑use asset
Asset reclassification
Reclass to intangible assets
Closing net book amount
2020
Cost
Accumulated depreciation
Net book amount
Movement:
Additions
Acquired through business combinations
Disposals
Disposals ‑ discontinued operations
Depreciation
Impairment
Effect of foreign exchange
Asset reclassification
Reclass to intangible assets
Closing net book amount
2021
Cost
Accumulated depreciation
Closing net book amount
21,111
(7,705)
13,406
1,895
5,423
(300)
(3,001)
12
(2,870)
246
(42)
79,535
(36,657)
42,878
5,565
(2,589)
2,976
10,369
34,823
(590)
(15,611)
17
(746)
(677)
(55)
313
2,131
(70)
(966)
(3)
‑
(551)
(266)
3,564
14,769
70,408
Motor
vehicles
$’000
8,037
(3,957)
4,080
311
333
(392)
(962)
(3)
‑
982
‑
4,349
Total
$’000
114,248
(50,908)
63,340
12,888
42,710
(1,352)
(20,540)
23
(3,616)
‑
(363)
93,090
34,903
(20,134)
14,769
155,949
(85,541)
70,408
8,421
(4,857)
3,564
9,197
(4,848)
4,349
208,470
(115,380)
93,090
2,268
‑
(5)
(1,153)
(3,873)
(828)
(4)
‑
‑
11,174
33,995
(22,821)
11,174
8,509
1,064
(222)
(3,795)
(15,731)
(3,490)
(16)
(686)
(414)
55,627
143,568
(87,941)
55,627
707
‑
‑
(339)
(1,154)
(187)
‑
(14)
(55)
2,522
922
44
(313)
(373)
(1,518)
(399)
(1)
700
(5)
3,406
12,406
1,108
(540)
(5,660)
(22,276)
(4,904)
(21)
‑
(474)
72,729
5,495
(2,973)
2,522
6,628
(3,222)
3,406
189,686
(116,957)
72,729
Property, plant and equipment are reviewed for impairment in accordance with AASB 136 Impairment of Assets. During the
year, the Group recognised an impairment charge of $4,904,000 relating to the carrying amount of property, plant and
equipment. The impairment charge is on assets which are no longer expect to generate future economic benefits primarily
due to closure of sites.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
62
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C5
PROPERTY, PLANT AND EQUIPMENT (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Property, plant and equipment
Each class of property, plant and equipment is carried at cost less any accumulated depreciation. Cost includes
expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs and maintenance are charged to the profit or loss during
the reporting period in which they are incurred.
Depreciation
Assets are depreciated from the date the asset is brought to use, or in business combinations, the date
of acquisition. Depreciation is calculated on either a straight line or diminishing value basis as considered
appropriate to write off the net cost of each item of plant and equipment over its expected useful life to the
Group. The expected useful lives are as follows:
• Plant and equipment: 2 to 15 years
• Motor vehicles: 4 to 8 years
• Furniture and fittings: 2 to 10 years
• Leasehold improvements: 5 to 15 years
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.
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 depreciation and amortisation rates are reviewed annually and adjusted if appropriate. As asset’s carrying
amount is written down to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.
Derecognition
An item of property, plant and equipment is derecognised when it is disposed of or no future economic benefits
are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with
the carrying amount and are recognised in the profit or loss.
Impairment
The carrying amounts of the Group’s property, plant and equipment are reviewed for impairment where there
is an indication that the asset may be impaired (assessed at least each reporting date) or when there is an
indication that a previously recognised impairment may need to be reversed.
63
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C6
INTANGIBLE ASSETS
Intangible assets represent goodwill, customer contracts, other intangibles and software. Goodwill arises when
the Group acquires a business where consideration exceeds the fair value of net assets acquired and represents
the future benefits expected to arise from the purchase.
(A) NET BOOK AMOUNTS AND MOVEMENTS IN INTANGIBLE ASSETS
Customer
contracts
$’000
Other
intangibles
$’000
Software
$’000
Total
$’000
2019
Cost
Accumulated amortisation and impairment
Net book amount
Movement:
Additions and adjustments
Acquired through business combinations
Disposals
Amortisation
Impairment
Effect of foreign exchange
Reclass from property, plant and equipment
Goodwill
$’000
270,015
(10,652)
259,363
1,264
266,197
‑
‑
(52,746)
(216)
‑
16,843
(13,193)
3,650
‑
223,200
‑
(11,543)
‑
‑
‑
155
(112)
43
‑
2,385
(20)
(166)
‑
‑
‑
Closing net book amount
473,862
215,307
2,242
2020
Cost
Accumulated amortisation and impairment
Net book amount
Movement:
Additions and adjustments
Acquired through business combinations
Disposals ‑ discontinued operations
Amortisation
Impairment
Effect of foreign exchange
Reclass from property, plant and equipment
537,260
(63,398)
473,862
240,043
(24,736)
215,307
(608)
8,733
(37,042)
‑
‑
‑
‑
(16,707)
(95,783)
47
‑
‑
‑
‑
2,517
(275)
2,242
‑
‑
(9)
(241)
‑
‑
‑
Closing net book amount
349,209
198,600
1,992
‑
‑
‑
287,013
(23,957)
263,056
655
2,494
(99)
(737)
‑
‑
363
2,676
1,919
494,276
(119)
(12,446)
(52,746)
(216)
363
694,087
7,721
(5,045)
2,676
787,541
(93,454)
694,087
‑
‑
(19)
(1,001)
(19)
‑
474
2,111
(608)
8,733
(37,070)
(17,949)
(95,802)
47
474
551,912
2021
Cost
Accumulated amortisation and impairment
Net book amount
499,456
(150,247)
349,209
240,043
(41,443)
198,600
2,400
(408)
1,992
7,874
(5,763)
2,111
749,773
(197,861)
551,912
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
64
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C6
INTANGIBLE ASSETS (CONT.)
(B) GOODWILL AND INDEFINITE LIFE INTANGIBLES
For the purpose of impairment testing, goodwill acquired through business combinations is allocated to each of the Group’s
CGUs (or group of CGUs) and represents the lowest level within the Group at which management monitors goodwill.
(i) Allocation of goodwill to groups of cash‑generating units
Goodwill has been allocated to the Group’s CGU’s (operating segments) as follows:
AMA Panel
Capital Smart
APAS
Total goodwill
2021
$’000
246,695
101,054
1,460
349,209
2020
$’000
242,520
191,634
39,708
473,862
(ii) Impairment of goodwill
Goodwill is assessed for impairment on an annual basis, or more frequently when there is an indication that the CGU to
which it belongs may be impaired. Where indicators exist, impairment testing is undertaken by comparing the carrying and
recoverable amounts of goodwill. Impairment losses are recognised in the profit or loss when carrying amounts are higher
than recoverable amounts.
An asset’s recoverable amount is the higher of an assets or CGU’s fair value less costs of disposal and its value in use.
The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified,
an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.
The Group completes a number of acquisitions every period. In most instances, the consideration is made up of an
upfront amount and a deferred amount based on profitability over a period. The deferred consideration is generally
contingent on profit measures such as EBITDA or EBIT. For any acquisition (business, share, individual site or group
of sites) where contingent vendor consideration is still outstanding, the measurement of that liability is an indication
that management monitors the goodwill at the acquisition level. Therefore, for any acquisition with contingent vendor
consideration outstanding, the Group has considered the recoverability of goodwill recorded in the acquisition accounting.
Any impairment loss recognised is a direct result of the contingent vendor consideration decreasing and offsets any
gain in the profit or loss recorded within fair value adjustments. Once the contingent vendor consideration period has
ended, goodwill in relation to the acquisition is aggregated with the remaining goodwill in the CGU.
AMA Panel
The Group has considered the recoverability of goodwill in conjunction with revaluing the contingent vendor consideration.
Within the AMA Panel division, four earn‑outs performed worse than originally anticipated at the date of acquisition and
as a result, the Group has recognised an impairment charge of $4,190,000 to the profit or loss. This impairment charge
offsets the gain in the profit or loss recorded within fair value adjustments for the same amount, and decreases the value of
goodwill in respect of these acquisitions.
No other impairment charge of goodwill or other intangibles has been recognised in respect of the AMA Panel division.
Capital Smart
The Group performed an annual impairment test to support the carrying value of goodwill. The recoverable amount was
calculated based on management’s assumptions using a fair value less cost of disposal methodology and considered a
number of probability weighted cashflow scenarios. Due to the risk and uncertainty associated with COVID-19 and related
allowances made in respect of revenue projections, Capital Smart’s recoverable amount was less than the carrying value.
As a result, Capital Smart Group Holdings Pty Ltd recognised an impairment charge in its profit or loss of $96,806,000.
The impairment charge was fully allocated to goodwill.
The Group elected to recognise the non‑controlling interests in respect of Capital Smart Group Holdings Pty Ltd as its
proportionate share of the acquired entity’s net identifiable assets. As a result, the Group has taken its proportionate share
of the impairment charge, with a net impact to the Group’s accounts of $90,580,000. The non‑controlling interests’ share
of the result for the period excludes the impairment charge recognised against goodwill.
No other impairment charge of goodwill or other intangibles has been recognised in respect of the Capital Smart division.
APAS
During the period, the Group sold the ACAD and Fully Equipped businesses (excluding ACM Parts and FluidDrive) and as a
result, derecognised a large portion of the goodwill previously reported in the APAS division ($37,042,000).
The Group performed an annual impairment test to support the carrying value of goodwill for the remaining businesses.
The recoverable amount was calculated based on management’s assumptions using a fair value less cost of disposal
methodology. Due to the low EBITDA margin in ACM Parts (including Perth Parts Solutions), the recoverable amount was
less than the carrying value. As a result, the Group recognised an impairment charge of $1,013,000 to the profit or loss.
The impairment expense was fully allocated to goodwill.
No other impairment charge of goodwill or other intangibles has been recognised in respect of the APAS division.
65
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C6
INTANGIBLE ASSETS (CONT.)
(B) GOODWILL AND INDEFINITE LIFE INTANGIBLES (CONT.)
(iii) Key assumptions used in the calculation of the recoverable amount
The Group’s annual impairment testing is performed using the fair value less costs of disposal methodology.
The recoverable amount was determined using a discounted cash flow (DCF) model. This was based on the present
value of cash flow projections over a five-year period with the period extending beyond five years extrapolated using an
estimated growth rate. Management has considered probability weighted cash flow scenarios and market evidence to help
corroborate the resulting value by comparing to relevant market multiples.
The value assigned to key assumptions represent management’s assessment of future trends in the industry and are based
on historical data from both external and internal sources. The approach and key assumptions used in the calculation of the
recoverable amount are summarised in the following table:
Assumption
Approach used to determine values
Pre‑tax
discount rates
FY22 (Year 1)
EBITDA
growth rate
The discount rate is a pre‑tax measure estimated based on past experience, industry average
weighted average cost of capital and adjusted to incorporate risks associated with each CGU.
The cash flows are discounted using the pre-tax discount rate at the beginning of the budget period.
FY22 EBITDA is based on the Board approved budget which is expected to be consistent with
a market participant’s perspective. This has been based on past and current experience, with
adjustments where future activities are expected to differ materially from past performance or
market participant’s perspective.
FY23 to FY26
EBITDA
FY23 to FY26 EBITDA is calculated using an EBITDA growth rate based on past experience,
industry trends and adjusted to reflect assumptions reasonably expected to be available to a
market participant.
Terminal
growth rate
Acquisition
growth
The terminal growth rate is used to extrapolate cash flows beyond the forecast period.
The terminal value is calculated using the Gordon Growth model.
The fair value less of cost of disposal approach is based on the highest and best use, and includes
expansionary capital expenditure and acquisition growth. Expansion and acquisition growth has
only been included if it is consistent with a market participant's perspective.
Costs of
disposal
The costs of disposal are estimated based on the Group's experience with disposal of assets and on
industry benchmarks.
AASB 16 Leases
impact
EBITDA used in the discounted cashflow model is based on a pre-AASB 16 basis, such that rental
payments are included in the cashflows. Right-of-use assets and lease liabilities have been included
in the carrying value of the CGU as it is assumed that a potential buyer or market participant would
assume both the right‑of‑use assets and lease liabilities.
The goodwill allocated to the CGU’s, and the values assigned to a number of key assumptions are as follows:
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
CGU
2021
AMA Panel
Capital Smart
APAS 1
2020
AMA Panel
Capital Smart
APAS
Goodwill
$’000
246,695
101,054
1,460
242,520
191,634
39,708
Terminal
growth rate
%
Pre‑tax
discount rate
%
Year 1 EBITDA
growth rate
%
2.5
2.5
2.5
2.5
2.5
2.5
10.9
10.9
12.4
11.3
11.3
13.3
(2.0)
10.0
(25.0)
24.0
64.4
331.6
1 APAS goodwill relates solely to FluidDrive Holdings Pty Ltd. As noted above, during the period an impairment charge of $1,013,000 was recognised against
the goodwill of ACM Parts (including Perth Parts Solutions). As a result, the goodwill is reduced to nil and any changes to the significant estimates would not
impact the goodwill and indefinite life intangibles. The assumptions provided above relate to FluidDrive Holdings Pty Ltd.
(iv) Critical accounting estimates and judgements
Determining whether goodwill is impaired requires an estimation of the value in use or fair value less cost of disposal of
the cash‑generating units to which goodwill has been allocated. The Group’s impairment testing estimates the future cash
flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value of
those cash flows.
66
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C6
INTANGIBLE ASSETS (CONT.)
(B) GOODWILL AND INDEFINITE LIFE INTANGIBLES (CONT.)
(v) Significant estimate: impact of possible changes in key assumptions
Management has determined the recoverable amount of the AMA Panel, Capital Smart and APAS divisions by assessing
the fair value less cost of disposal of the underlying assets. The valuation is considered to be level 3 in the fair value
hierarchy due to unobservable inputs used in the valuation.
The following table provides quantitative information regarding the key assumptions used for each CGU and the impact of
possible changes in key assumptions (with all other inputs remaining the same):
Key assumption
Change in key
assumption
Impact of possible change in key assumption
AMA Panel
Pre‑tax discount
rate of 10.9%
Pre‑tax discount
rate of 11.9%
If the pre‑tax discount rate of 10.9% was 1.0% higher, there would not be an
indicator of impairment.
FY22 EBITDA
decline rate of
2.0%
FY22 EBITDA
decline rate of
5.0%
If the FY22 EBITDA decline rate was 5.0%, with all other years' cash flows
remaining the same, there would not be an indicator of impairment.
Terminal growth
rate of 2.5%
Terminal growth
rate of 1.5%
If the terminal growth rate of 2.5% was 1.0% lower, there would not be an
indicator of impairment.
Capital Smart
Pre‑tax discount
rate of 10.9%
Pre‑tax discount
rate of 11.9%
If the pre‑tax discount rate of 10.9% was 1.0% higher, there would be an indicator
of impairment. The additional impairment charge would be $25,553,000,
reducing the goodwill to $75,501,000. If the pre‑tax discount rate of 10.9%
was 1.0% lower, there would not be an indicator of impairment.
FY22 EBITDA
growth rate of
10.0%
FY22 EBITDA
growth rate of
5.0%
If the FY22 EBITDA growth rate was 5.0%, with all other years' cash flows
remaining the same, there would be an indicator of impairment. The additional
impairment charge would be $602,000, reducing the goodwill to $100,452,000.
Terminal growth
rate of 2.5%
Terminal growth
rate of 1.5%
If the terminal growth rate of 2.5% was 1.0% lower, there would be an indicator
of impairment. The additional impairment charge would be $28,232,000,
reducing the goodwill to $72,822,000.
APAS ‑ FluidDrive Holdings
Pre‑tax discount
rate of 12.4%
Pre‑tax discount
rate of 13.4%
If the pre‑tax discount rate of 12.4% was 1.0% higher, there would not be an
indicator of impairment.
FY22 EBITDA
decline rate of
25.0%
FY22 EBITDA
decline rate of
30.0%
If the FY22 EBITDA decline rate was 30.0%, with all other years' cash flows
remaining the same, there would not be an indicator of impairment.
Terminal growth
rate of 2.5%
Terminal growth
rate of 1.5%
If the terminal growth rate of 2.5% was 1.0% lower, there would not be an
indicator of impairment.
67
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C6
INTANGIBLE ASSETS (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost and subsequently measured
at cost less accumulated amortisation and impairment losses. Where acquired in a business combination, cost
represents the fair value at the date of acquisition.
Intangible assets with finite lives are amortised on a straight-line basis over their estimated useful lives and tested
for impairment whenever there is an indication that they may be impaired. The amortisation period and method
are reviewed at each financial year-end. Intangible assets with indefinite lives are tested for impairment in the
same way as goodwill.
Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the
business combination less the net fair value of the acquired and identifiable assets, liabilities and contingent
liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
If fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group
recognises the gain in the profit or loss.
Customer contracts
Customer contracts are recognised at cost, being fair value at the date of 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. The Group amortises customer contracts using the straight‑line method over a period of 4 to 15 years.
Other intangibles
Other intangibles consist of customer relationships, brands, patents and trademarks and are recognised at the
cost, being fair value at the date of acquisition. These intangibles have a finite life and are carried at cost less
accumulated amortisation and any impairment losses. The Group amortises other intangibles using the
straight‑line method over 10 years.
Software
Costs associated with maintaining software programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by the group are recognised as intangible assets.
Directly attributable costs that are capitalised as part of the software include employee costs and an appropriate
portion of relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the
asset is ready for use.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
68
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C7 RIGHT‑OF‑USE ASSETS AND LEASE LIABILITIES
The Group leases various offices, warehouses, site premises, equipment and vehicles. Lease terms are negotiated
on an individual basis and contain a wide range of different terms and conditions including extension options.
Leases are recognised as a right‑of‑use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group.
THE GROUP’S LEASING ACTIVITIES
(A)
Property leases are generally 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 additional terms.
Contracts may contain both lease and non‑lease components. The Group allocates the consideration in the contract to the
lease and non‑lease components based on their relative stand‑alone prices.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by
the lessor. Leased assets may not be used as security for borrowing purposes.
(B) AMOUNTS RECOGNISED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
The Consolidated Statement of Financial Position includes the following amounts relating to leases:
Right‑of‑use assets
Leased properties
Leased equipment
Leased motor vehicles
Total right‑of‑use assets
Lease liabilities
Current
Non‑current
Total lease liabilities
2021
$’000
2020
$’000
306,691
344,943
153
33
369
97
306,877
345,409
33,784
293,134
326,918
35,207
320,305
355,512
The total additions to right‑of‑use assets for the year ended 30 June 2021 were $20,198,000 (30 June 2020: $24,084,000).
Refer to (E) on the following page.
(C) AMOUNTS RECOGNISED IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
The Consolidated Statement of Profit or Loss shows the following amounts relating to leases:
Depreciation charge on right‑of‑use assets
Leased properties
Leased equipment
Leased motor vehicles
Total
Impairment expense
Interest expense (included in finance costs)
COVID-19 rent concession (included as a benefit in occupancy expenses) 1
Expense relating to short‑term leases (included in occupancy expenses)
Expense relating to leases of low‑value assets (included in occupancy expenses)
Total
2021
$’000
2020
$’000
40,801
37,302
217
46
141
43
41,064
37,486
1,428
19,521
(1,536)
922
156
20,491
2,626
16,588
(566)
896
189
19,733
Depreciation, impairment and interest expense from discontinued operations
1,850
4,673
1 The Group has elected to apply the practical expedient to assess whether a COVID-19-related rent concession is a lease modification.
(D) AMOUNTS RECOGNISED IN THE CONSOLIDATED STATEMENT CASH FLOWS
The total cash outflow for leases for the year ended 30 June 2021 was $51,694,000 (30 June 2020: $47,224,000).
69
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C7
RIGHT‑OF‑USE ASSETS AND LEASE LIABILITIES (CONT.)
(E) NET BOOK AMOUNTS AND MOVEMENTS IN RIGHT‑OF‑USE ASSETS
Opening balance at 1 July 2019 on adoption of
AASB 16 Leases
Movement:
Acquired through business combinations
Additions
Disposals
Depreciation
Modification to lease terms
Variable lease payments reassessment
Impairment
Effect of foreign exchange
Closing net book amount
2020
Cost
Accumulated depreciation and impairment
Net book amount
Movement:
Acquired through business combinations
Additions
Disposals
Disposals ‑ discontinued operations
Depreciation
Modification to lease terms
Variable lease payments reassessment
Impairment
Effect of foreign exchange
Net book amount
2021
Cost
Accumulated depreciation and impairment
Net book amount
Leased
properties
$’000
232,190
Leased
equipment
$’000
Leased
motor vehicles
$’000
Total
$’000
‑
‑
232,190
138,755
23,970
(2,774)
(40,032)
2,148
(5,685)
(3,600)
(29)
344,943
390,719
(45,776)
344,943
9,642
20,198
(5,800)
(20,603)
(40,801)
13,499
(12,931)
(1,428)
(28)
306,691
384,570
(77,879)
306,691
415
95
‑
(141)
‑
‑
‑
‑
144
19
(23)
(43)
‑
‑
‑
‑
139,314
24,084
(2,797)
(40,216)
2,148
(5,685)
(3,600)
(29)
369
97
345,409
510
(141)
369
‑
‑
‑
‑
(217)
1
‑
‑
‑
153
455
(302)
153
123
(26)
97
‑
‑
(15)
‑
(46)
‑
(3)
‑
‑
33
98
(65)
33
391,352
(45,943)
345,409
9,642
20,198
(5,815)
(20,603)
(41,064)
13,500
(12,934)
(1,428)
(28)
306,877
385,123
(78,246)
306,877
SHORT‑TERM LEASES AND LEASES OF LOW‑VALUE ASSETS
(F)
The Group applies the recognition exemptions to its short‑term and low‑value leases of property, equipment and motor
vehicles. Short‑term leases are leases with a lease term of 12 months or less. Lease payments on short‑term leases and
leases of low‑value assets are recognised as an expense on a straight‑line basis over the lease term.
EXTENSION AND TERMINATION OPTIONS
(G)
Extension and termination options are included in a number of property and equipment leases across the Group.
These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and
termination options held are exercisable only by the Group and not by the respective lessor.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
70
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C7
RIGHT‑OF‑USE ASSETS AND LEASE LIABILITIES (CONT.)
(H) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group determines the lease term as the non‑cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
In determining the lease term, the Group applies judgement and considers all facts and circumstances that create an
economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not
terminated).
At the end of each lease term, the Group assumes the lease arrangements will be automatically renewed regardless of
whether the lease is no longer enforceable. The lease will remain in effect until one of the parties gives notice to terminate
with no more than an insignificant penalty.
The initial lease term assessment is reviewed if a significant event or a significant change in circumstances occurs which
affects this assessment and that is within the control of the lessee.
SIGNIFICANT ACCOUNTING POLICIES
Lease liabilities
At commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in substance
fixed payments) less any lease incentives receivable and variable lease payments that depend on an index or rate.
The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the
option to terminate. The variable lease payments that do not depend on an index or a rate are recognised
as an expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the
lease commencement date as the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the
assessment to purchase the underlying asset.
In May 2020, the International Accounting Standards Board (IASB) published ‘Covid‑19‑Related Rent Concessions
(Amendment to IFRS 16)’ amended the standard to provide lessees with an exemption from assessing whether
a COVID-19-related rent concession is a lease modification. The amendments introduce an optional practical
expedient that simplifies how a lessee accounts for rent concessions that are a direct consequence of COVID-19.
The Group has elected to apply the practical expedient to assess whether a COVID‑19‑related rent concession
is a lease modification. The practical expedient will only apply if:
• the revised consideration is substantially the same or less than the original consideration;
• the reduction in lease payments relates to payments due on or before 30 June 2022; and
• no other substantive changes have been made to the terms of the lease.
Right‑of‑use assets
The Group recognises right‑of‑use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right‑of‑use assets are measured at cost, less any accumulated depreciation and
impairment losses and adjusted for any remeasurement of lease liabilities.
The cost of the right‑of‑use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received.
The recognised right‑of‑use assets are depreciated on a straight‑line basis over the shorter of useful life and
the lease term.
Right‑of‑use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a
straight‑line basis.
Right‑of‑use assets are tested for impairment which replaces the previous requirement to recognise a provision
of onerous lease contracts. Any identified impairment loss is accounted for in line with the Groups accounting
policy for property, plant and equipment which is set out in note C5.
71
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C8 TRADE AND OTHER PAYABLES
Trade and other payables mainly consist of amounts owing to the Group’s suppliers that have been invoiced
or accrued.
Trade payables
Accrued expenses
Payroll and statutory liabilities
Other payables
Total trade and other payables
2021
$’000
86,939
17,880
10,101
4,249
119,169
2020
$’000
79,119
15,211
19,818
3,448
117,596
FAIR VALUE DISCLOSURE
(A)
Due to the short‑term nature, the carrying amount of trade and other payables is considered to approximate their fair
value. For information about the methods and assumptions used in determining the fair value of the Group’s payables
refer to note D8(D)(i).
SIGNIFICANT ACCOUNTING POLICIES
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.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the
reporting date. Other payables not due within a year are measured less cumulative amortisation calculated using
the effective interest method. The carrying amounts of trade and other payables are considered to be the same
as their fair values, due to their short‑term nature.
C9 OTHER LIABILITIES
Current
Market incentive
Deferred revenue
Total current
Non‑current
Market incentive
Deferred revenue
Total non‑current
Total other liabilities
2021
$’000
14,000
7
14,007
46,800
750
47,550
2020
$’000
12,100
3,513
15,613
62,331
800
63,131
61,557
78,744
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
(A) MARKET INCENTIVE
In a previous financial year, the Group entered into an agreement with a key supplier to purchase the supplier’s products
on an exclusive basis over an agreed period of time. In exchange for this exclusive arrangement, and subject to certain
conditions, the Group receives preferential benefits including the upfront payment of the market incentive and the ongoing
competitive price of the products.
The incentive is being amortised based on a percentage of the purchased product. Termination of the arrangement by the
Company, or the occurrence of an event of default requires the Company to repay all unamortised balances.
As at 30 June 2021, an amount of $14,000,000 (30 June 2020: $12,100,000) has been classified as current representing
the anticipated reduction in this incentive over the next twelve months.
A reconciliation of the movement of the market incentive liability is set out below:
Balance at 1 July
Movement:
Market incentive received (excluding GST)
Offset against inventory
Charged to profit or loss - raw materials and consumables used
Balance at 30 June
72
2021
$’000
74,431
‑
(340)
(13,291)
60,800
2020
$’000
28,561
54,100
(2,100)
(6,130)
74,431
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASSETS AND LIABILITIES
C10 PROVISIONS
Provisions are a liability recorded when there is uncertainty over the timing or amount that will be paid but the
expected settlement amount can be reliably estimated by the Group. The main provisions held are in relation to
employee benefits and make good onsite premises.
Current
Annual leave
Long service leave
Make good
Dividends
Total current
Non‑current
Long service leave
Make good
Total non‑current
Total provisions
2021
$’000
21,516
10,030
939
288
32,773
6,177
6,676
12,853
2020
$’000
20,765
10,759
1,654
288
33,466
5,783
7,333
13,116
45,626
46,582
(A) CARRYING AMOUNTS AND MOVEMENTS IN PROVISIONS
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
Balance at 1 July 2019
Movement:
Transfer to lease liabilities (AASB 16 Leases)
Acquired through business combinations
Additional provisions recognised
Unused amounts reversed
Amounts used during the year
Balance at 30 June 2020
Movement:
Additional provisions recognised
Unused amounts reversed
Amounts used during the year
Disposal ‑ discontinued operations
Balance at 30 June 2021
Dividends
$’000
289
Make good
$’000
6,117
‑
‑
‑
‑
(1)
288
‑
‑
‑
‑
288
‑
2,265
1,770
(2)
(1,162)
8,988
527
(109)
(725)
(1,066)
7,615
Total
$’000
6,824
(418)
2,265
1,770
(2)
(1,163)
9,276
527
(109)
(725)
(1,066)
7,903
(B) AMOUNTS NOT EXPECTED TO BE SETTLED WITHIN THE NEXT 12 MONTHS
The following amounts reflect employee benefits that are classified as a current liability, since the Group does not have an
unconditional right to defer settlement for this obligation, but are not expected to be taken within the next 12 months:
Annual leave obligation expected to be settled after 12 months
Long service leave obligation expected to be settled after 12 months
Total
2021
$’000
5,619
6,872
12,491
2020
$’000
6,973
8,914
15,887
73
AMA GROUP LIMITED | 30 JUNE 2021 C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
C10 PROVISIONS (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events, it is probable the Group will be required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Employee benefits
Short‑term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leave and leave
loading that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service, are recognised 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.
The short-term employee benefit obligations are recognised in the provision for employee benefits.
The current provision for employee benefits includes accrued annual leave and long service leave. Long service
leave includes all unconditional entitlements where employees have completed the required period of service.
Employee benefits are 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.
Other long‑term employee benefit obligations
The liability for long service leave that are not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service, are 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.
The non-current employee benefit represents a long-service leave provision which covers conditional
entitlements where employees have not completed their required period of service, adjusted for the probability
of likely realisation.
Make good
The Group is required to restore the leased premises of its sites to their original condition at the end of the
respective lease terms. A provision has been recognised for the present value of the estimated expenditure
required to remove any leasehold improvements. These costs have been capitalised as part of the cost
of leasehold improvements and are amortised over the shorter of the term of the lease and the useful life
of the assets.
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at
the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the
reporting period.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
74
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
DD
CAPITAL STRUCTURE, FINANCING
AND FINANCIAL RISK MANAGEMENT
Capital and financial risk management provides information about the capital management practices of the Group,
shareholder returns for the year and discusses the Group’s exposure and management to various financial risks.
D1
D2
D3
D4
D5
D6
D7
D8
CAPITAL MANAGEMENT
EARNINGS / (LOSS) PER SHARE
DIVIDENDS
CONTRIBUTED EQUITY
OTHER RESERVES
CASH AND CASH EQUIVALENTS
BORROWINGS AND CONTINGENT VENDOR CONSIDERATION
FINANCIAL RISK MANAGEMENT
D1 CAPITAL MANAGEMENT
This section provides a summary of the capital management activities of the Group during the period.
The Group manages its capital structure with the objective of enhancing long‑term shareholder value through
funding its business at an optimised weighted average cost of capital.
The Group’s objectives when managing capital are to:
• safeguard its ability to continue as a going concern, so as to provide returns for shareholders and benefits for
other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. As at 30 June 2021, the
gearing ratio was 29.4% (30 June 2020: 35.1%). The gearing ratio has been calculated with reference to net debt which is
presented in accordance with the requirements of the Group’s Syndicated Facility Agreement. Comparative information has
been recalculated based on current year presentation.
The Group’s capital includes ordinary share capital, financial liabilities at amortised cost (drawn facilities), cash and cash
equivalents and 50% of the cash portion of contingent vendor consideration (consistent with the calculation for debt
covenants under the Syndicated Facility Agreement). There are no externally imposed capital requirements.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares, secure additional financing, restructure operations or sell assets to
reduce debt. This is decided on the basis of maximising shareholder returns over the long‑term.
Net debt
Financial liabilities at amortised cost ‑ drawn facilities
Contingent vendor consideration ‑ 50% of cash portion 1
Cash and cash equivalents
Net debt used in covenant calculations
Fully paid ordinary shares
Quoted (at market price) 2
Unquoted (at issue price)
Total fully paid ordinary shares
Total capital
Gearing ratio
Notes
D7(A)
D7(B)
D6
D4(A)
2021
$’000
2020
$’000
237,500
340,000
7,010
(64,203)
180,307
427,262
5,000
432,262
612,569
29.4%
12,611
(112,916)
239,695
436,673
7,000
443,673
683,368
35.1%
1 Contingent vendor consideration for the year ended 30 June 2021 and 30 June 2020 have been represented to reflect 50% of expected cash settlement.
2 Fully Paid Ordinary Shares Quoted value has been calculated using the closing share prices as at 30 June each year.
75
AMA GROUP LIMITED | 30 JUNE 2021 D
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D2 EARNINGS / (LOSS) PER SHARE
Earnings / (loss) per share presents the amount of profit / (loss) generated for the reporting period attributable to
shareholders divided by the weighted average number of shares on issue. The potential for any share rights issued
by the Group to dilute existing shareholders’ ownership when the share rights are exercised are also presented.
Comparative information has been re‑presented to exclude all operations that have been discontinued by the end of the
current reporting period.
(A) RECONCILIATION OF EARNINGS USED IN CALCULATING
EARNINGS / (LOSS) PER SHARE
Profit / (loss) attributable to the ordinary equity holders of the Company:
Continuing operations
Discontinued operations
Total
2021
$’000
2020
$’000
(109,101)
12,151
(96,950)
(68,934)
(1,331)
(70,265)
(B) WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR
Weighted average number of shares used as denominator in calculating both basic and
diluted earnings / (loss) per share
738,271,511
707,528,631
BASIC EARNINGS / (LOSS) PER SHARE
(C)
Basic earnings / (loss) per share is calculated by dividing the profit / (loss) attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares outstanding during the period.
2021
Shares
2020
Shares
Continuing operations
Discontinued operations
Basic earnings / (loss) per share
2021
Cents
(14.78)
1.65
(13.13)
2020
Cents
(9.74)
(0.19)
(9.93)
(D) DILUTED EARNINGS / (LOSS) PER SHARE
Diluted earnings / (loss) per share adjusts the basic earnings / (loss) per share for the effects of any instruments that
could potentially be converted into ordinary shares. Potential ordinary shares shall be treated as dilutive when, and only
when, their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing
operations. The average market value of the Company’s shares for the purpose of calculating the dilutive effect of share
options and performance rights is based on quoted market prices for the period that the options and performance
rights were outstanding.
Continuing operations
Discontinued operations
Diluted earnings / (loss) per share
2021
Cents
(14.78)
1.65
(13.13)
2020
Cents
(9.74)
(0.19)
(9.93)
As at 30 June 2021, 37,235,847 potential ordinary shares (30 June 2020: 42,677,769) were excluded from the diluted
weighted‑average number of ordinary shares calculation because their effect is anti‑dilutive.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
76
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
D3 DIVIDENDS
Dividends are distributions of the Group’s profit after tax to shareholders and represent one of the ways the
Group distributes returns to its shareholders.
Declared and paid during the year (fully franked at 30%)
Final dividend for 2020: Nil (2019: 2.25 cents)
Interim dividend for 2021: Nil (2020: Nil)
Total
2021
$’000
‑
‑
‑
2020
$’000
12,215
‑
12,215
The Group has established a dividend reinvestment plan under which holders of ordinary shares can elect to have all or
part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash.
Dividends settled in cash
Dividend reinvestment plan
Total
Franking credit balance
Franking credits available for subsequent reporting period based on tax rate of 30%
2021
$’000
‑
‑
‑
2021
$’000
33,511
2020
$’000
9,310
2,905
12,215
2020
$’000
26,907
The above amounts represent the balances of the franking account as at the end of the financial year, adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax;
• franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
D4 CONTRIBUTED EQUITY
Contributed equity represents the number of ordinary shares on issue. A reconciliation is presented to show the
movement in ordinary shares on issue.
(A) ORDINARY SHARE CAPITAL
Fully paid ordinary shares
Quoted
Unquoted
Total share capital
(B) MOVEMENTS IN ORDINARY SHARES
Quoted
Opening balance
Placement and rights issue
Vendor share issue
Convert from Unquoted shares
Dividend reinvestment plan
Share buy‑back
Transaction costs, net of tax
Total quoted
Unquoted
Opening balance
Fair value adjustment on contingent shares 1
Convert to Quoted shares
Total unquoted
Total share capital
2021
Shares
2021
$’000
2020
Shares
743,063,799
419,404
733,903,518
6,139,929
5,000
7,179,430
749,203,728
424,404
741,082,948
2020
$’000
410,117
7,000
417,117
2021
Shares
2021
$’000
2020
Shares
2020
$’000
733,903,518
410,117
539,166,324
‑
8,711,730
1,039,501
‑
(590,950)
‑
‑
187,490,773
8,537
1,000
‑
(250)
‑
4,254,152
1,176,471
2,156,921
(341,123)
‑
743,063,799
419,404
733,903,518
7,179,430
‑
(1,039,501)
6,139,929
7,000
(1,000)
(1,000)
5,000
8,355,901
‑
(1,176,471)
7,179,430
749,203,728
424,404
741,082,948
192,163
215,614
3,175
1,100
2,905
‑
(4,840)
410,117
8,100
‑
(1,100)
7,000
417,117
1 Unquoted shares of 1,039,501 remain on issue. The value of these contingent shares has been reduced to nil consistent with a vendor buy‑back agreement.
The unquoted shares are expected to be bought back for nil consideration at the next AGM in November 2021.
77
AMA GROUP LIMITED | 30 JUNE 2021 D NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D4
CONTRIBUTED EQUITY (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
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.
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 various entities and are subject to a restriction period. In the
event that the business has met its earnings target at the completion of this restriction period, the shares are
then eligible to be converted to quoted fully paid ordinary shares.
D5 OTHER RESERVES
Other reserves represents the cumulative gains or losses that have been recognised in the Consolidated
Statement of Other Comprehensive Income.
Share‑based payments
Foreign currency translation
Hedging
Total other reserves
The nature and purpose of each reserve is as follows:
2021
$’000
214
64
290
568
2020
$’000
1,441
(376)
(185)
880
(i) Share‑based payments reserve
The share‑based payments reserve is used to recognise the fair value of equity‑settled share‑based payments issued to
employees, including key management personnel, as part of their remuneration. Equity instrument disclosures relating to
key management personnel can be found in note F1 and within the Remuneration Report.
(ii) Foreign currency translation reserve
The foreign currency translation reserve is used to recognise foreign currency translation differences arising on the
translation of financial statements of the Group’s foreign entities into Australian Dollars.
(iii) Hedging reserve
Records fair value movements in cash flow hedges to the extent the cash flow hedges are deemed effective. The balance is
reclassified to net profit when the hedged expense is recognised. Ineffective portions of cash flow hedges are recognised in
net profit immediately.
SIGNIFICANT ACCOUNTING POLICIES
Cash flow hedge
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair
value of the derivative is recognised in the Consolidated Statement of Comprehensive Income and accumulated
in the hedging reserve. Any ineffective portion of changes in the fair value of the derivative is immediately
charged to the profit or loss within finance costs.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated
or exercised, or the designation is revoked, the hedge accounting is discontinued prospectively. If the
forecast transaction is no longer expected to occur, then the amount accumulated in equity is recognised
in the profit or loss.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
78
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
D6 CASH AND CASH EQUIVALENTS
This section presents cash and cash equivalents in the Consolidated Statement of Financial Position and a
reconciliation of the Group’s profit for the period to net cash flows provided by operating activities.
(A) CASH AND CASH EQUIVALENTS AS PRESENTED IN THE CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
Cash at bank and cash equivalents
2021
$’000
64,203
2020
$’000
112,916
(B)
RECONCILIATION OF LOSS FOR THE PERIOD TO NET CASH FLOWS PROVIDED
BY OPERATING ACTIVITIES
Loss for the period
Adjustment for:
Non‑cash market incentive
Non‑cash employee remuneration
Fair value adjustments (including discontinued operations)
Amortised borrowing costs
Depreciation and amortisation (including discontinued operations)
Impairment (including discontinued operations)
(Gain) / loss on disposal of property, plant, equipment and leases
Gain on sale of discontinued operations, net of tax
Other
Income tax benefit (including discontinued operations)
Income tax paid
Total adjustments
(Increase) / decrease in assets:
Receivables and contract assets
Inventories
Other assets
Total decrease in assets
Increase / (decrease) in liabilities:
Trade and other payables
Provisions
Other liabilities
Total (decrease) / increase in liabilities
Notes
C9(A)
B3(B)
B3(A)
B3(D)
E5
B4(B)
B4(C)
2021
$’000
2020
$’000
(99,079)
(71,468)
(13,291)
(1,227)
5,602
1,310
83,307
102,465
(1,982)
(7,397)
(315)
(787)
(7,243)
160,442
(614)
6,816
1,766
7,968
1,574
(1,614)
(17,187)
(17,227)
(6,130)
1,960
4,501
867
73,182
56,345
1,178
‑
(79)
(4,445)
(10,858)
116,521
3,879
6,090
10,357
20,326
23,908
(14,067)
47,238
57,079
Net cash inflows provided by operating activities
52,104
122,458
79
AMA GROUP LIMITED | 30 JUNE 2021 D
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D6
CASH AND CASH EQUIVALENTS (CONT.)
CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
(C)
The following table provides a reconciliation between opening and closing balances on the face of the Consolidated
Statement of Financial Position arising from financing activities.
Lease
liabilities
Long‑term
borrowings
Derivative
liability
Total liabilities from
financing activities
Balance at 1 July
355,512
132
335,941
80,568
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Movement:
Cash inflows
‑
‑
‑
378,500
Cash outflows
(31,560)
(29,552)
(102,500)
(123,993)
Non‑cash additions
2,966
384,932
1,310
867
Balance at 30 June
326,918
355,512
234,751
335,942
2021
$’000
296
‑
‑
31
327
2020
$’000
2021
$’000
2020
$’000
‑
‑
‑
691,749
80,700
‑
378,500
(134,060)
(153,546)
296
296
4,307
386,095
561,996
691,749
SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents
Cash and cash equivalents include 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.
For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and
short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part
of the Group’s cash management.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
80
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
D7 BORROWINGS AND CONTINGENT VENDOR CONSIDERATION
This section provides a summary of the capital management activity of the Group during the period, including
the Group’s borrowings. The Group manages its liquidity requirements with a bank loan and interest rate swap.
Current
Contingent vendor consideration
Total current
Non‑current
Bank loan, net of capitalised borrowing costs
Contingent vendor consideration
Total non‑current
Total
(A) BORROWINGS
2021
$’000
32,220
32,220
2020
$’000
21,784
21,784
234,751
2,940
237,691
335,942
27,678
363,620
269,911
385,404
(i) Syndicated Facility Agreement
During the year, the Group’s Syndicated Facility Agreement decreased to $305,000,000 (30 June 2020: $375,000,00).
The Group repaid $102,500,000 of borrowings using sale proceeds from discontinued operations and excess cash.
As at 30 June 2021, Facility A has been permanently reduced by $70,000,000 to an amount of $72,500,000
(30 June 2020: $142,500,000). As at 30 June 2021, Facility C has been fully repaid. The Group, subject to approval from its
financiers, has the ability to redraw for acquisitive growth and general corporate purposes.
As at 30 June 2021, the Syndicated Facility was drawn exclusive of bank guarantees at $237,500,000
(30 June 2020: $340,000,000).
Facility
Facility A
Facility B
Facility C
Facility D
Limit
$’000
72,500
147,500
50,000
35,000
305,000
Cash drawn
$’000
72,500
147,500
‑
17,500
237,500
Guarantees
drawn 1
$’000
‑
‑
‑
9,780
9,780
Available
$’000
‑
‑
50,000
7,720
57,720
Maturity
Oct 2022
Oct 2024
Oct 2022
Oct 2024
1 The bank guarantee amount of $9,780,000 (30 June 2020: $12,414,000) is not included in the Consolidated Statement of Financial Position.
The Syndicated Facility Agreement contains an additional $50,000,000 Accordion Facility, with a tenure no earlier than
October 2024.
The Group is required to make interest payments on the drawn debt. The repayment of principal is at maturity date.
The effective interest rate on borrowings for the year ended 30 June 2021 was 3.10% (30 June 2020: 3.75%).
The Group is required to comply with financial covenants under the terms of its borrowing facilities including a net leverage
ratio and a fixed charge cover ratio. In response to COVID-19, the Group’s financiers waived covenant testing until
31 December 2020 and provided a more favourable covenant testing regime for the balance of FY21. No restrictions were
imposed by the financiers during the reporting period and the Group was compliant with all covenants during the period,
including as at 30 June 2021.
Management’s forecasts for the next twelve months include the impacts of ongoing uncertainties of the COVID‑19 pandemic
which indicate there are potential risks of non-compliance with financial covenants. Accordingly, the Group has obtained
covenant waivers for all financial covenants in respect to both the 30 September 2021 and 31 December 2021 testing periods.
The Group has agreed with its financiers to undertake a restructure of its debt facilities prior to 31 December 2021 to address
any potential non‑compliance after this date. In the event that this is not achieved, the Group may need to request further
waivers or deferrals in relation to covenant testing and restructuring of its debt facilities. Management may be able to
undertake alternative actions such as raising equity, securing additional financing, restructuring operations or the sale of assets
should financiers be unable to accommodate the need for waivers or deferrals as at 31 March 2022 and subsequent dates.
(ii) Security and fair value disclosures
The Syndicated Facility is secured by a fixed and floating charge over all of the assets of the Company and its wholly
owned subsidiaries.
The carrying amount of the Group’s borrowings approximates their fair values, as commercial rates of interest are paid, and
the impact of discounting is not significant. For information about the methods and assumptions used in determining the
fair value of the Groups borrowings refer to note D8(D)(i).
(iii) Risk exposures
Details of the Group’s exposure to risks arising from borrowings are set out in note D8(A)(ii).
81
AMA GROUP LIMITED | 30 JUNE 2021 D i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D7
BORROWINGS AND CONTINGENT VENDOR CONSIDERATION (CONT.)
(A) BORROWINGS (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost, using the effective interest rate method. Interest is accrued over the period it
becomes due and unpaid interest is recorded as part of current payables.
Borrowings are removed from the Consolidated Statement of Financial Position when the obligation specified
in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in the Consolidated Statement of Profit or Loss
as other income or finance costs.
(B)
CONTINGENT VENDOR CONSIDERATION
Contingent vendor consideration represents the fair value of amounts which may become payable in connection
with business combinations. Payment is dependent on achieving predetermined targets based on future
performance and profitability.
The Group has recorded contingent vendor consideration to business vendors in accordance with relevant business and
share purchase agreements. The amounts are performance based and can be paid in a mixture of shares and/or cash,
depending on the agreement. An analysis of this liability by type of consideration is set out below:
Current
Cash settlement 1
Share settlement
Total current
Non‑current
Cash settlement 1
Share settlement
Total non‑current
2021
$’000
11,080
21,140
32,220
2,940
‑
2,940
2020
$’000
15,524
6,260
21,784
9,698
17,980
27,678
Total contingent vendor consideration
35,160
49,462
1 The cash settlement amount disclosed above represents arrangements where some or all of the consideration may be paid in cash and/or shares. Such
contingent payment arrangements depend on the specific terms and conditions of the agreement and are only agreed when the earn-out period has finished.
(i) Movement in contingent vendor consideration
A reconciliation of the fair value of the contingent vendor consideration is provided below. Refer to note D8(D)(ii) for
further information on how the fair value has been determined.
Balance at 1 July
Movement:
Arising during the year
Cash settlements
Share settlements
Offset against other current assets
Charged to profit or loss - fair value adjustments
Total continuing operations
Arising during the year
Cash settlements
Charged to profit or loss - fair value adjustments and realised foreign currency
Total discontinued operations
Balance at 30 June
82
2021
$’000
49,462
5,163
(9,866)
(8,537)
(5,000)
6,977
(11,263)
2020
$’000
50,695
6,141
(11,739)
(3,175)
‑
4,487
(4,286)
‑
3,039
(2,674)
(365)
(3,039)
‑
14
3,053
35,160
49,462
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
D7
BORROWINGS AND CONTINGENT VENDOR CONSIDERATION (CONT.)
(B)
CONTINGENT VENDOR CONSIDERATION (CONT.)
(ii) Critical accounting estimates and judgements
The carrying value of the contingent 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
forecasted future profitability. The interest expense and the fair value adjustment have been taken to the Consolidated
Statement of Profit or Loss.
SIGNIFICANT ACCOUNTING POLICIES
Contingent vendor consideration
Contingent vendor consideration is classified as a financial liability and is recognised at fair value at the
acquisition date. Amounts classified as a financial liability that are subsequently not required to be paid at the
end of the earn‑out period or are re‑estimated during the period are recognised in the Consolidated Statement
of Profit or Loss.
D8 FINANCIAL RISK MANAGEMENT
This section provides a summary of the Group’s exposure to market, liquidity, and credit risks, along with the
Group’s policies and strategies in place to mitigate these risks.
Exposure to market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk arises in the
normal course of the Group’s business.
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 risk management of the Group is carried out by executive management and conducted in a manner consistent with
policies approved by the Board. Executive management identifies, evaluates and mitigates financial risks within the Group’s
operating units.
The Group holds the following financial instruments:
Financial assets at amortised cost
Cash and cash equivalents
Receivables and contract assets
Loans to a former related party and other employees
Acquisition deposits
Financial assets at fair value
Derivative - financial instrument
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Lease liabilities
Borrowings
Financial liabilities at fair value
Derivative - financial instrument
Contingent vendor consideration
Total financial liabilities
Notes
D6
C1
C3
C4
C3
C8
C7
D7(A)
C3
D7(B)
2021
$’000
64,203
72,912
1,555
600
2020
$’000
112,916
72,099
1,878
5,600
712
‑
139,982
192,493
119,169
326,918
234,751
327
35,160
716,325
117,596
355,512
335,942
296
49,462
858,808
83
AMA GROUP LIMITED | 30 JUNE 2021 D NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D8
FINANCIAL RISK MANAGEMENT (CONT.)
(A) MARKET RISK
Market risk is the risk that the fair value or future cash flows of a financial asset or financial liability will fluctuate because of
changes in market prices. Market risk comprises three types of risk: foreign exchange risk, interest rate risk and price risk.
The Group’s exposure to market risk arises from adverse movements in foreign exchange and interest rates which affect
the Group’s financial performance. The Group is not exposed to any significant price risk.
(i) Foreign exchange risk
Foreign exchange risk is the risk that a change in foreign exchange rates may negatively impact the Group’s cash flow or
profitability because the Group has an exposure to a foreign currency or has foreign currency denominated obligations.
The Group’s exposure to foreign exchange risk arises from its future commercial transactions, and recognised assets and
liabilities denominated in a currency that is not the entity’s functional currency.
The following table summarises the carrying amounts of the Group’s financial assets and liabilities that are denominated in
other foreign currencies and discloses the sensitivity of net profit before tax to a 10% change against the foreign currency
with all other variables held constant.
Assets
US Dollar
Liabilities
US Dollar
Carrying amount
Impact of ‑/+ 10% FX change on profit before tax
2021
$’000
921
921
1,513
1,513
2020
$’000
997
997
1,289
1,289
2021
$’000
(92)
(92)
(151)
(151)
2020
$’000
(100)
(100)
(129)
(129)
2021
$’000
2020
$’000
92
92
151
151
100
100
129
129
The Group is primarily exposed to changes in the US Dollar exchange rate. In assessing the sensitivity of the foreign
currency on the profit or loss, the Group applies the exchange rate as at 30 June 2021 being $1.33 (30 June 2020: $1.46),
and the average exchange rate used during the year being $1.40 (30 June 2020: $1.53).
The Group does not employ foreign currency hedges and has no formal 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.
The aggregate net foreign exchange gains / losses recognised in profit or loss were:
Net foreign exchange (loss) / gain in profit or loss
2021
$’000
(173)
2020
$’000
13
SIGNIFICANT ACCOUNTING POLICIES
Functional presentation currency
Items included in the Consolidated Financial Statements are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The Consolidated Financial
Statements are presented in Australian dollars (AUD).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates
are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges
and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the Consolidated Statement of
Profit or Loss, within finance costs. All other foreign exchange gains and losses are presented in the Consolidated
Statement of Profit or Loss on a net basis within other expenses.
Non‑monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example, translation differences on non‑monetary
assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part
of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as at
fair value through other comprehensive income are recognised in other comprehensive income.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
84
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
D8
FINANCIAL RISK MANAGEMENT (CONT.)
(A) MARKET RISK (CONT.)
SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Group companies
The results and financial position of foreign operations that have a functional currency different from the
presentation currency are translated in the presentation currency as follows:
• Assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at
the date of that statement of financial position;
• Income and expenses for each Statement of Profit or Loss and Statement of Comprehensive Income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions; and
• All relating exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities and
of borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and are translated at the closing rate.
(ii) Interest rate risk
The Group holds both interest‑bearing assets and interest bearing‑liabilities, and therefore the Group’s income and cash
flows are subject to changes in market interest rates.
The Group’s main interest rate risk arises from long‑term borrowings which expose the Group to interest rate risk.
Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose
the Group to fair value interest rate risk.
The Group uses derivative financial instruments to hedge its exposure to fluctuations in interest rates and manages its cash
flow interest rate risk by using floating to fixed interest rate swaps. The Group agrees to exchange, at specified intervals,
the difference between fixed and variable interest rate amounts calculated by reference to an agreed notional principal
amount. These swaps are designated to hedge interest costs associated with underlying debt obligations. The interest
swap contract is designated as a cash flow hedging instrument.
The Group entered into an interest rate swap contract in June 2020 to fix the interest rate at 0.43% (excluding margin and
line fees) on $193,500,000 of borrowings. Interest payments are net settled every 6 months.
At reporting date, the Group has exposure to the following variable rate borrowings and interest rate swap contracts:
Syndicated facility agreement 1
Interest rate swaps ‑ syndicated loans 2
Net exposure to cash flow interest rate risk
Interest rate
Interest rate
2021
%
0.13
0.43
2021
$’000
237,500
(193,500)
44,000
2020
%
0.14
0.43
2020
$’000
340,000
(193,500)
146,500
1
Interest rate for Syndicated facility agreement is BBSY at latest rate setting notice (22 March 2021 and 19 June 2020 respectively). The rate presented does not
include any margin and line fees applicable under the loan agreement.
2 The rate presented does not include any margin and line fees applicable under the loan agreement.
An analysis by maturities is provided in note D8(C)(i).
The following table summarises the impact of interest rate changes, relating to existing borrowings and financial
instruments, on net profit before tax and equity, net of tax. For the purpose of this disclosure, the sensitivity analysis is
isolated to a 50 basis points increase / decrease in interest rates assuming all other variables remain constant.
Floating rate
Increase of 50 bps
Decrease of 50 bps
(Increase) / decrease
on profit, before tax
(Increase) / decrease
on equity, net of tax
2021
$’000
1,447
(1,444)
2020
$’000
1,130
(1,192)
2021
$’000
1,489
(1,468)
2020
$’000
(2,091)
2,177
85
AMA GROUP LIMITED | 30 JUNE 2021 D NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D8
FINANCIAL RISK MANAGEMENT (CONT.)
CREDIT RISK
(B)
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group is exposed to credit risk from its operating activities (primarily receivables and contract assets) and from
its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other
financial instruments.
The maximum exposure to credit risk at the end of the reporting period is the carrying amount, net of any provisions for
impairment for each class of the following financial assets:
(i) Cash and cash equivalents
Credit risk from cash arises from balances held with counterparty financial institutions. Credit risk is managed by the
Group’s finance department which restrict the Group’s exposure to financial institutions by credit rating band. For banks
and financial institutions, only independently rated parties with a minimum rating of “A” are accepted.
(ii) Receivables and contract assets
Customer credit risk is managed by each division’s established policies, procedures and controls relating to customer
credit risk management. Credit risk arising on receivables and contract assets is monitored on an ongoing basis, mitigating
exposure to impairment of receivables and contract assets.
The Group applies the AASB 9 Financial instruments simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade receivables and contract assets. Historically, there has been no significant
change in customers’ credit risk and the lifetime expected loss assessment of the Group remains unchanged.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses
based on historical credit loss experience, adjusted for forward looking factors specific to the debtor and the economic
environment. The provision rates are based on days past due for groupings of various customer segments with similar
loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and
supportable information that is available at the reporting date about past events, current conditions and forecasts of
future economic conditions.
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include failure to make contractual payments for a period of greater than 60 days
past due. The Group does not hold any collateral in relation to these receivables.
The Group is exposed to material concentrations of credit risk with its top two customers representing approximately
27% of total trade receivables (30 June 2020: approximately 26%). The Group’s receivables are largely collected from
Australian regulated insurers who have strong long‑term credit ratings. The Group focuses largely on experienced payment
history and does not expect that these customers will fail to meet their obligations.
For the year ended 30 June 2021, the Group recognised an expected credit loss of $304,000 (30 June 2020: $394,000).
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
86
WORLD CLASS AUTOMOTIVE SOLUTIONS
CAPITAL STRUCTURE, FINANCING AND FINANCIAL RISK MANAGEMENT
D8
FINANCIAL RISK MANAGEMENT (CONT.)
LIQUIDITY RISK
(C)
Liquidity risk is the risk the Group will encounter difficulties in meeting the obligations associated with its financial liabilities.
The Group’s approach to managing liquidity is to ensure, as far as possible, sufficient liquidity is available to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to
the Group’s reputation.
Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the undrawn borrowing facilities and
cash and cash equivalents) on the basis of expected cash flows. This is generally carried out at an operational level on a
weekly basis in accordance with practice and limits set by the Group. This is to ensure ongoing liquidity, prompt decision
making, and allow proactive communication with its financiers.
Details of financing arrangements are disclosed in note D7(A). At the reporting date, the Group has total undrawn
committed facilities of $57,720,000 available (30 June 2020: $22,586,000). The Group, subject to approval from its
financiers, has the ability to draw for working capital, acquisitive growth and general corporate purposes.
(i) Maturities of financial instruments
The tables below provide an analysis of the Group’s financial assets and liabilities into relevant maturity groupings based
on the remaining period between the reporting date and the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of
discounting is not significant.
Contractual maturities of financial instruments
2021
Non‑derivatives
Financial assets realisable cash flows
Cash and cash equivalents
Receivables and contract assets
Loans to a former related party and other employees
Acquisition deposits
Total inflow on financial assets
Financial liabilities due for payment
Trade and other payables
Lease liabilities
Borrowings
Contingent vendor consideration ‑ cash settlement
Total outflow on financial liabilities
Derivatives
Interest rate swaps (net settled)
Total (outflow) / inflow on derivatives
Within
1 year
$’000
Between
1 and 5 years
$’000
Over
5 years
$’000
Total contractual
cash flows
$’000
64,203
72,912
1,555
600
139,270
(119,169)
(51,405)
(5,384)
(11,080)
(187,038)
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
(182,554)
(246,326)
(2,940)
(431,820)
‑
(195,329)
‑
‑
(195,329)
64,203
72,912
1,555
600
139,270
(119,169)
(429,288)
(251,710)
(14,020)
(814,187)
(327)
(327)
712
712
‑
‑
385
385
Total outflow on financial instruments
(48,095)
(431,108)
(195,329)
(674,532)
2020
Non‑derivatives
Financial assets realisable cash flows
Cash and cash equivalents
Receivables and contract assets
Loans to a former related party and other employees
Acquisition deposits
Total inflow on financial assets
Financial liabilities due for payment
Trade and other payables
Lease liabilities
Borrowings
Contingent vendor consideration ‑ cash settlement
Total outflow on financial liabilities
Derivatives
Interest rate swaps (net settled)
Total outflow on derivatives
112,916
72,099
‑
5,000
190,015
(117,596)
(56,582)
(8,510)
(15,524)
(198,212)
‑
‑
1,878
600
2,478
‑
‑
‑
‑
‑
112,916
72,099
1,878
5,600
192,493
‑
(206,722)
(358,725)
(9,698)
(575,145)
‑
(225,781)
‑
‑
(225,781)
(117,596)
(489,085)
(367,235)
(25,222)
(999,138)
(231)
(231)
(65)
(65)
‑
‑
(296)
(296)
Total outflow on financial instruments
(8,428)
(572,732)
(225,781)
(806,941)
87
AMA GROUP LIMITED | 30 JUNE 2021 D
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D8
FINANCIAL RISK MANAGEMENT (CONT.)
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
(D)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value of an asset or a liability is measured using the assumptions that
market participants would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The Group measures certain financial instruments at fair value at each reporting date using a hierarchy based on the lowest
level of input that is significant to the fair value measurement.
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 / liability, either directly
(as prices) or indirectly (derived from prices) (Level 2); and
• inputs for the asset / liability that are not based on observable market data (unobservable inputs) (Level 3).
There were no transfers between levels during the financial year.
(i) Carrying amount approximate fair values
The carrying amount of receivables and contract assets and trade and other payables are assumed to approximate their
fair values due to their short‑term nature. The fair value of non‑current borrowings is estimated by discounting the future
contractual cash flows at the current market interest rates that are available to the Group for similar financial instruments.
The carrying amount of the Group’s borrowings approximates their fair values, as commercial rates of interest are paid, and
the impact of discounting is not significant.
(ii) Fair value of contingent vendor consideration
During the financial year, the Group has acquired various entities and businesses. In undertaking these acquisitions, the
Group has incurred contingent vendor consideration which consists of an obligation to settle purchase consideration either
by shares or cash in the future.
The carrying value of the contingent vendor consideration reflects its fair value and is classified as Level 3 of the fair value
hierarchy. The fair value of the financial liabilities included in Level 3 of the hierarchy has been determined using valuation
techniques incorporating observable direct and indirect market data relevant to the Group.
Total contingent vendor consideration
2021
$’000
35,160
2020
$’000
49,462
The expected payment is determined separately in respect of each individual earn‑out agreement taking into consideration
the expected level of profitability of each acquisition.
The significant unobservable inputs are:
• Pre-specified earnings target, such as EBIT or EBITDA; and
• Discount rate in the range of 1.8% to 2.8% depending on the circumstances specific to each contingent vendor
consideration being measured.
Significant estimate: impact of possible changes in key assumptions:
The estimated fair value would increase / (decrease) if:
• the earnings (EBITDA or EBIT) growth was 10% higher; the gross value of the contingent consideration would
increase by $992,000.
• the earnings (EBITDA or EBIT) growth was 10% lower; the gross value of the contingent consideration would
decrease by $992,000.
• the discount rate was 1% higher; the present value of the contingent vendor consideration would decrease
by $290,000.
• the discount rate was 1% lower; the present value of the contingent vendor consideration would increase by $280,000.
(iii) Fair value of derivative financial instruments
The fair value of the interest rate swap is the estimated amount that the entity would receive or pay to terminate the
swap at the balance sheet date, taking into account current interest rates, forward interest yield curves and the current
creditworthiness of the swap counterparties. The fair value of the interest rate swap is calculated as the present value of
the estimated future cash flows and is classified as Level 2 under the fair value hierarchy. Refer to D8(A)(ii) for sensitivity on
floating interest rates.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
88
WORLD CLASS AUTOMOTIVE SOLUTIONS
GROUP STRUCTURE
E
GROUP STRUCTURE
Group structure provides information about subsidiaries and how changes have affected the financial position and
performance of the Company, AMA Group Limited.
E1
E2
E3
E4
E5
E6
PARENT ENTITY INFORMATION
INVESTMENTS IN CONTROLLED ENTITIES
NON‑CONTROLLING INTERESTS
DEED OF CROSS GUARANTEE
DISCONTINUED OPERATIONS
BUSINESS COMBINATIONS
E1 PARENT ENTITY INFORMATION
This section presents the stand-alone financial information of AMA Group Limited.
(A)
SUMMARY FINANCIAL INFORMATION
Assets
Current assets
Non‑current receivables from related entities
Total assets
Liabilities
Current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other reserves
Retained deficit
Total equity
Loss for the year
Total comprehensive loss
2021
$’000
2020
$’000
30,694
119,598
436,623
50,122
69,979
586,750
20,787
301,746
15,123
413,474
134,877
173,276
424,404
60,054
417,117
1,256
(349,581)
(245,097)
134,877
173,276
(104,484)
(104,959)
(39,808)
(39,623)
(B) GUARANTEES ENTERED INTO BY THE PARENT ENTITY
The Parent entity has given unsecured guarantees in respect of financial trade arrangements entered into by its
subsidiaries. It is not practical to ascertain or estimate the maximum amount for which the Company may become liable.
As at 30 June 2021, 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.
SIGNIFICANT ACCOUNTING POLICIES
Parent entity
Financial information for the parent entity has been prepared on the same basis as the Consolidated Financial
Statements with the exception of investments in controlled entities which are accounted for at cost less
any impairment.
89
AMA GROUP LIMITED | 30 JUNE 2021 E
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
E2
INVESTMENTS IN CONTROLLED ENTITIES
The following section sets out the list of the Group’s significant investments in controlled entities.
The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. The financial statements of controlled entities
are included in the Consolidated Financial Statements from the date on which control commences until the date on which
control ceases.
SIGNIFICANT INVESTMENTS IN CONTROLLED ENTITIES
(A)
The Consolidated Financial Statements incorporate the assets, liabilities and results of the following principal subsidiaries in
accordance with the accounting policy described in note A2(A):
Equity holding
Name of entity
A.C.N. 107 954 610 Pty Ltd 1,2
A.C.N. 124 414 455 Pty Ltd 1,2
A.C.N.624 895 772 Pty Ltd 1,2
A.C.N. 624 896 000 Pty Ltd 1,2
ACAD Limited 3
Accident Management Australia Pty Ltd 1
Accident Repair Management Pty Ltd 1
Accident Repair Management No. 2 Pty Ltd 1
Accident Repair Management No. 3 Pty Ltd 1
ACM Parts Pty Ltd 1
Alloy Motor Accessories Australia Pty Ltd 1,2
AECAA Pty Ltd 3
AMA1 Pty Ltd 1,2
AMA Fully Equipped NZ Holdings Pty Limited 3
AMA Group Solutions Pty Ltd 1
AMA Procurement Pty Ltd 1
Automotive Solutions Group Pty Ltd 1,2
BMB Collision Repairs Pty Ltd 1
Capital Smart Group Holdings Pty Ltd
Capital S.M.A.R.T. Repairs Australia Pty Ltd
Capital S.M.A.R.T. Repairs New Zealand Pty Ltd
Carmax Australia Pty Ltd 1,2
Carmax New Zealand Limited 2
Custom Alloy Pty Ltd 1,2
Deering Autronics Australia Pty Ltd 1,2
Direct One Accident Repair Centre Pty Ltd 1
ECB Pty Ltd 3
Fleet Alliance Pty Ltd 1,2
FluidDrive Holdings Pty Ltd 1
Fully Equipped Auckland Limited 3
Fully Equipped Group Limited 3
Fully Equipped Limited 3
Fully Equipped Wellington Limited 3
Geelong Consolidated Repairs Pty Ltd 1
Gemini Accident Repair Centres NZ Limited 2
Micra Accident Repair Centre Pty Ltd 1
Mr Gloss Holdings Pty Ltd 1
Mt Druitt Autobody Repairs Pty Ltd 1
Phil Munday’s Panel Works Pty Ltd 1
QPlus Production Pty Ltd 2
Rapid Accident Management Services Pty Ltd 1
Repair Management Australia Pty Ltd 1
Repair Management Australia Bayswater Pty Ltd 1
Repair Management Australia Dandenong Pty Ltd 1
Repair Management New Zealand Limited
Ripoll Pty Ltd 1,2
Roo Systems Australia Pty Ltd 1,2
Service Body Manufacturing Australia Pty Ltd 3
Shipstone Holdings Pty Ltd 1
Smash Repair Canberra Pty Ltd 1
Tuff Accessories Limited 3
Uneek 4x4 Australia Pty Ltd 3
Woods Auto Shops (Cheltenham) Pty Ltd 1,2
Woods Auto Shops (Dandenong) Pty Ltd 1
Woods Auto Shops (Holdings) Pty Ltd 1
Country of
incorporation
Class of
shares
2021
%
2020
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
New Zealand
New Zealand
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
‑
100
100
100
100
100
100
‑
100
‑
100
100
100
100
90
90
90
100
100
100
100
100
‑
100
100
‑
‑
‑
‑
100
100
100
100
100
100
90
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
100
100
100
100
100
90
90
90
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1 These companies are parties to the Deed of Cross Guarantee and members of the Closed Group as at 30 June 2021 (refer note E4).
2 These companies are dormant.
3 The Group divested of these companies on 31 December 2020.
SIGNIFICANT ACCOUNTING POLICIES
Unless otherwise stated, the Group’s controlled entities have share capital consisting solely of ordinary shares
that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held
by the Group. The country of incorporation or registration is also their principal place of business.
90
WORLD CLASS AUTOMOTIVE SOLUTIONS
GROUP STRUCTURE
E3 NON‑CONTROLLING INTERESTS
On 25 October 2019, the Group incorporated Capital Smart Group Holdings Pty Ltd with 90% of the issued capital held by
the Company. Capital Smart Group Holdings Pty Ltd is the head company of the Capital Smart group of entities.
Set out below is summarised financial information for this entity. The amounts disclosed are before intercompany
eliminations.
(A)
SUMMARISED STATEMENT OF FINANCIAL POSITION
Current assets
Current liabilities
Current net assets
Non‑current assets
Non‑current liabilities
Non‑current net assets
Net assets
Accumulated non‑controlling interests
(B)
SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
Revenue
Loss for the period
Other comprehensive income
Total comprehensive loss
Loss allocated to non‑controlling interests
Dividends paid to non‑controlling interests
(C)
SUMMARISED STATEMENT OF CASH FLOWS
Net cash inflows provided by operating activities
Net cash outflows used in investing activities
Net cash (outflows) / inflows from financing activities
Net (decrease) / increase in cash and cash equivalents
Balance at 1 July
Movement:
Dividends paid
Purchase of shares from non‑controlling interests
Non‑controlling interests on acquisition of subsidiary
Share of result for the period
Balance at 30 June
2021
$’000
41,279
(61,489)
(20,210)
433,668
(254,278)
179,390
2020
$’000
46,666
(59,568)
(12,902)
550,054
(259,891)
290,163
159,180
277,261
14,214
16,341
2021
$’000
334,445
2020
$’000
196,178
(118,091)
(62,228)
15
1
(118,076)
(62,227)
(2,127)
(1,203)
‑
169
2021
$’000
8,491
(6,344)
(9,987)
(7,840)
2021
$’000
16,341
‑
‑
‑
(2,127)
14,214
2020
$’000
11,035
(415,779)
433,082
28,338
2020
$’000
292
(169)
(123)
17,544
(1,203)
16,341
The Group elected to recognise the non‑controlling interests in respect of Capital Smart Group Holdings Pty Ltd as
the proportionate share of the acquired entity’s net identifiable assets. As part of the annual impairment test and given
the uncertainty surrounding COVID‑19, Capital Smart Group Holdings Pty Ltd recognised an impairment charge of
$96,806,000 against the carrying value of goodwill. The Group has taken its proportionate share of the impairment
expense, with a net impact to Group’s accounts of $90,580,000. The non‑controlling interest share of the result for the
period excludes the impairment charge recognised on goodwill.
91
AMA GROUP LIMITED | 30 JUNE 2021 E i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
E3
NON‑CONTROLLING INTERESTS (CONT.)
SIGNIFICANT ACCOUNTING POLICIES
Non‑controlling interest
The Group recognises non‑controlling interests in an acquired entity either at fair value or at the non‑controlling
interests’ proportionate share of the acquired entity’s net identifiable assets. The decision is made on an
acquisition‑by‑acquisition basis. For the non‑controlling interests in Capital Smart Group Holdings Pty Ltd
the Group elected to recognise the non‑controlling interest as its proportionate share of the acquired net
identifiable assets.
Where the non-controlling interests are acquired or sold without loss of control, any excess or deficit of
consideration paid over the carrying amount is recognised in equity transactions. The Group has elected to
recognise this effect in retained earnings.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and
any related non‑controlling interests and other components of equity. Any resulting gain or loss is recognised in
profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
E4 DEED OF CROSS GUARANTEE
The following section presents the Consolidated Statement of Profit or Loss and the Consolidated Statement
of Financial Position of the Company and certain wholly‑owned companies that are parties to a deed of
cross guarantee.
The Company and each of the Australian wholly-owned subsidiaries identified in note E2 (together referred to as the
Closed Group) has entered into a Deed of Cross Guarantee (the Deed), as defined in ASIC Corporations (Wholly‑owned
Companies) Instrument 2016/785 (the Instrument). The effect of the Deed is that each entity in the Closed Group
guarantees the payment in full of all debts of the other entities in the Closed Group in the event of their winding up.
The Closed Group has also given a similar guarantee in the event that the Company 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.
Pursuant to the Instrument, the wholly‑owned subsidiaries within the Closed Group are relieved from the requirement to
prepare, audit, and lodge separate financial reports. The Trustee to this deed of cross guarantee is Ripoll Pty Ltd, 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.
(A) CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND MOVEMENT IN RETAINED
DEFICIT OF THE CLOSED GROUP
Revenue and other income from continuing operations
Raw materials and consumables used
Employee benefits expense
Occupancy expense
Professional services expense
Other expense
Fair value adjustments on contingent vendor consideration
Depreciation and amortisation expense
Impairment expense
Operating loss before interest and tax
Finance costs
Loss before income tax from continuing operations
Profit / (loss) before tax from discontinued operations
Loss before income tax
Income tax (expense) / benefit
Loss for the period
Retained deficit at the beginning of the financial year
Loss for the period
Dividends ‑ AMA shareholders
Dividends ‑ Non‑controlling interests
Purchase of shares from non‑controlling interests
Retained deficit at the end of the financial year
92
2021
$’000
2020
$’000
572,096
683,839
(248,305)
(204,464)
(15,257)
(6,400)
(10,457)
(6,352)
(42,866)
(158,369)
(120,374)
(20,619)
(140,993)
13,315
(127,678)
(6,345)
(134,023)
2021
$’000
(73,347)
(134,023)
‑
‑
‑
(207,370)
(312,495)
(250,029)
(19,947)
(13,928)
(19,408)
(4,501)
(46,745)
(48,871)
(32,085)
(19,365)
(51,450)
(1,156)
(52,606)
125
(52,481)
2020
$’000
(8,342)
(52,481)
(12,215)
401
(710)
(73,347)
WORLD CLASS AUTOMOTIVE SOLUTIONS
GROUP STRUCTURE
E4
DEED OF CROSS GUARANTEE (CONT.)
(B)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE CLOSED GROUP
Current assets
Cash and cash equivalents
Receivables and contract assets
Inventories
Other financial assets
Tax receivable
Other assets
Receivables from related entities
Total current assets
Non‑current assets
Property, plant and equipment
Right‑of‑use assets
Intangible assets
Other assets
Other financial assets
Deferred tax assets
Receivables from related entities
Investments in controlled entities
Total non‑current assets
Total assets
Current liabilities
Trade and other payables
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Tax payable
Total current liabilities
Non‑current liabilities
Other financial liabilities
Lease liabilities
Provisions
Other liabilities
Total non‑current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other reserves
Retained deficit
Total equity
2021
$’000
2020
$’000
43,217
56,950
29,580
1,555
‑
3,762
1,641
83,685
54,869
35,418
‑
3,339
8,365
4,349
136,705
190,025
46,845
204,750
249,907
‑
712
17,868
101,581
118,706
740,369
61,120
238,976
276,538
600
1,878
15,039
101,566
276,886
972,603
877,074
1,162,628
75,924
32,547
24,830
23,162
14,007
1,511
171,981
237,691
193,480
9,598
46,800
487,569
78,587
21,784
24,520
24,974
12,344
‑
162,209
360,581
221,381
11,043
62,396
655,401
659,550
817,610
217,524
345,018
424,404
490
(207,370)
217,524
417,117
1,248
(73,347)
345,018
93
AMA GROUP LIMITED | 30 JUNE 2021 E NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
E5 DISCONTINUED OPERATIONS
This section presents the profit or loss from components of the Group that have either been disposed of or sold
during the year.
On 19 November 2020, following a strategic review of the Group’s business operations, the Board announced its intention
to divest of the ACAD and Fully Equipped businesses (excluding ACM Parts and FluidDrive).
The sale to GUD Holdings Limited was completed on the 31 December 2020 for a gross purchase consideration
of $70,000,000.
The ACAD and Fully Equipped businesses were not previously classified as held-for-sale or as discontinued operations.
The comparative Condensed Consolidated Statement of Profit or Loss has been re-presented to show the discontinued
operations separately from continuing operations.
FINANCIAL PERFORMANCE
(A)
Financial information relating to the discontinued operations for the period to the date of disposal is set out below.
Revenue and other income
Expenses
Elimination of expenses related to corporate management fees
Fair value adjustments on contingent vendor consideration
Total external expenses
Results from operating activities
Income tax expense
Results from operating activities, net of tax
Gain on sale of the discontinued operations, net of tax
Profit / (loss) from discontinued operations
Exchange differences on translation of discontinued operations
Other comprehensive loss from discontinued operations
2021
$’000
40,537
2020
$’000
67,073
(36,262)
(67,260)
1,600
375
‑
(14)
(34,287)
(67,274)
6,250
(1,496)
4,754
(201)
(1,130)
(1,331)
7,397
‑
12,151
(1,331)
(34)
(34)
‑
‑
CASH FLOW INFORMATION
(B)
Cash flow information relating to the discontinued operations for the period to the date of disposal is set out below.
Movement in cash flows:
Net cash inflows provided by operating activities
Net cash outflows used in investing activities
Net cash (outflows) / inflows from financing activities
Net (decrease) / increase in cash and cash equivalents
2021
$’000
2020
$’000
2,463
(3,563)
(3,423)
(4,523)
11,331
(12,321)
6,151
5,161
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
94
WORLD CLASS AUTOMOTIVE SOLUTIONS
E5
DISCONTINUED OPERATIONS (CONT.)
(C) DETAILS OF THE SALE OF THE DIVISION
Consideration received:
Cash received
Total disposal consideration
Carrying amount of net assets sold
Transaction costs
Gain on sale before income tax and reclassification of foreign currency translation reserve
Reclassification of foreign currency translation reserve
Income tax expense on gain
Gain on sale of discontinued operations, net of tax
GROUP STRUCTURE
2021
$’000
2020
$’000
68,269
68,269
(59,254)
(1,213)
7,802
(405)
‑
7,397
‑
‑
‑
‑
‑
‑
‑
‑
There was nil tax expense on the sale of discontinued operations, predominantly due to the accounting impairment of
goodwill recognised in prior periods. The disposal has resulted in carried forward capital losses for which no deferred tax
asset has been recognised.
In the event the discontinued operations achieve certain performance criteria during the period 1 July 2020 to 30 June
2021, as specified in an earn-out clause in the sale agreement, additional cash consideration of up to $4,220,000 will be
receivable. As at 31 December 2020, the fair value of the contingent consideration was determined to be $2,110,000 and
was recognised as a financial asset at fair value through profit or loss. As at 30 June 2021, the fair value of the contingent
consideration was reduced to nil as the performance criteria was not expected to be met. This fair value adjustment has
been recorded through the gain on sale of the discontinued operations.
The carrying amounts of assets and liabilities as at the date of sale are set out below.
Cash and cash equivalents
Receivables and contract assets
Inventories
Property, plant and equipment
Right‑of‑use assets
Intangible assets
Net deferred tax assets
Other assets
Total assets
Trade and other payables
Lease liabilities
Provisions
Total liabilities
Net assets
31 Dec
2020
$’000
3,872
8,230
10,719
6,081
20,133
37,262
688
2,415
89,400
6,448
20,379
3,319
30,146
59,254
SIGNIFICANT ACCOUNTING POLICIES
Discontinued operations
A discontinued operation is a component of the Group that represents a separate major line of business that is
part of a disposal plan.
A business is classified as a discontinued operation when a decision is made to dispose of, or close down, the
whole or a substantial part of that business unit. Assets and liabilities of the business unit are subsequently
measured at the lower of their carrying amount and fair value, less estimated costs to sell.
The results of discontinued operations are presented separately in the Consolidated Statement of Profit or Loss.
95
AMA GROUP LIMITED | 30 JUNE 2021 E NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
E6 BUSINESS COMBINATIONS
The following section provides a summary of the businesses acquired by the Group during the year including
details of the purchase consideration, net assets acquired and goodwill of each acquisition.
During the year, the Group acquired the operating assets of the following businesses:
• Western Trucks
• Perth Parts Solutions
• National Trucks
These acquisitions are expected to increase the Group’s market share, product offering and reduce costs through
economies of scale. The goodwill is attributable to the future profitability of the acquired business.
FINANCIAL INFORMATION FOR CURRENT YEAR ACQUISITIONS
(A)
Details of the purchase consideration, net assets acquired, and goodwill of each business acquired by the Group during the
year are presented in the following table.
Western
Trucks
$’000
Perth Parts
Solutions
$’000
National
Trucks
$’000
Consideration:
Cash paid
Contingent vendor consideration
Total consideration
Net assets acquired:
Receivables and contract assets
Inventories
Property, plant and equipment
Right‑of‑use assets
Lease liabilities
Provisions
Net deferred tax assets
Total net assets acquired
Goodwill
1,387
3,863
5,250
91
‑
425
5,501
(5,501)
(244)
73
345
4,905
821
‑
821
‑
360
52
1,284
(1,284)
(29)
9
392
429
Total
$’000
4,842
5,163
10,005
199
426
1,108
9,642
(9,642)
(658)
197
1,272
2,634
1,300
3,934
108
66
631
2,857
(2,857)
(385)
115
535
3,399
8,733
(B)
SUMMARY OF ACQUISITIONS
(i) Western Trucks
On 25 September 2020, the Group acquired the business and operating assets of Western Trucks. The acquisition bolsters
the Group’s heavy vehicle footprint in Victoria and aligns with the Group’s strategic direction of expanding into the heavy
vehicle collision repair industry.
(ii) Perth Parts Solutions
On 30 October 2020, the Group acquired the business and operating assets of Perth Parts Solutions. Perth Parts Solutions
is a leading supplier of used automotive parts to both the motor vehicle repair industry and the general public. In addition
to providing its customers with quality used and aftermarket automotive parts, it also operates a dismantling operation for
recycled auto parts in Western Australia. This strategic investment provides the Group with the opportunity to expand the
geographic presence of the parts business.
(iii) National Trucks
On 5 February 2021, the Group acquired the business and operating assets of National Trucks. The acquisition aligns with
the Group’s strategic direction of expanding into the heavy vehicle collision repair industry.
REVENUE AND PROFIT CONTRIBUTION
(C)
The revenue and profit contribution to the Group from acquisitions from date of acquisition to reporting date is
presented below:
Revenue
Profit before tax
Western
Trucks
$’000
5,419
1,459
Perth Parts
Solutions
$’000
1,885
114
National
Trucks
$’000
2,823
516
Total
$’000
10,127
2,089
From the date of acquisition to 30 June 2021, these acquisitions generated revenue and other income of $10,127,000 and
a profit before tax of $2,089,000. On a pro-rata basis, the Group expects that if the above businesses were acquired on
1 July 2020, the acquisitions would have generated revenue and other income of $16,819,000 and profit before tax
of $3,339,000.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
96
WORLD CLASS AUTOMOTIVE SOLUTIONS
GROUP STRUCTURE
E6
BUSINESS COMBINATIONS (CONT.)
(D) ACQUISITION RELATED COSTS
Acquisition costs are largely included in professional services expense in the Consolidated Statement of Profit
or Loss and in operating cash flows in the Consolidated Statement of Cash Flows. The acquisition related costs are
set out below:
Acquisition related costs
Western
Trucks
$’000
32
Perth Parts
Solutions
$’000
49
National
Trucks
$’000
56
Total
$’000
137
PROVISIONAL ASSESSMENT OF FAIR VALUE
(E)
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at acquisition date. The measurement period ends on
either the earlier of (i) 12 months from the date of acquisition or (ii) when the acquirer receives all the information possible
to determine fair value.
(i) Current year acquisitions
There were no changes between the provisional acquisition accounting recognised in the 31 December 2020 Interim
Financial Statements and the final acquisition accounting recognised in the 30 June 2021 Financial Statements.
(ii) Prior year acquisitions
During the current year, the Group has finalised the acquisition accounting for the following prior year acquisitions:
• BF Panels (acquired 31 December 2019)
• Fully Equipped (acquired 31 January 2020)
• Luxury Body Shop (acquired 24 February 2020)
• Graeme Hull Smash Repairs (acquired 6 March 2020)
The net assets recognised in the Group’s Consolidated Financial Statements for the year ended 30 June 2020 were based
on a provisional assessment of the fair value of each business acquired while the Group sought independent valuations for
tangible assets (namely property, plant and equipment).
The valuations were completed during the current year and resulted in the following changes to the acquisition accounting:
• Net increase to net identifiable assets acquired of $608,000
• Net decrease to goodwill of $608,000; and
• Nil movement to contingent vendor consideration.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
(F)
Business combinations are accounted for under AASB 3 Business Combinations and are initially accounted for on a
provisional basis. Acquisition accounting for business combinations requires identifiable assets to be valued at fair value
which often requires assumptions, estimates and judgements. Assumptions required may include but are not limited to
cash flows, weighted average cost of capital, replacement cost, useful lives and an assessment of the market terms on
leases. The Group often engages third-party experts to conduct independent valuations of identifiable assets. The Group
takes into consideration all available information at the date of acquisition and any fair value adjustments in the final
acquisition accounts are retrospectively applied back to the acquisition date.
SIGNIFICANT ACCOUNTING POLICIES
Business combinations
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
The group accounts for business combinations using the acquisition method when control is transferred to the
Group (refer note E2). The consideration transferred in the acquisition is generally measured at fair value, as are
the identifiable net assets acquired, and the amount of any non-controlling interests in the acquiree. For each
business combination, the Group elects whether to measure the non‑controlling interests in the acquiree at fair
value or at its proportionate share of the acquiree’s identifiable net assets.
Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in
profit or loss immediately.
Contingent vendor consideration is measured at fair value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of a financial instrument is classified as equity, then it is
not re‑measured and settlement is accounted for within equity. Otherwise, other contingent consideration is
remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent
vendor consideration are recognised in profit or loss.
97
AMA GROUP LIMITED | 30 JUNE 2021 E NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F
OTHER INFORMATION
This section of the notes includes other information that must be disclosed to comply with the accounting standards
and other pronouncements, but that is not immediately related to individual line items in the financial statements.
F1
F2
F3
F4
F5
F6
F7
SHARE‑BASED PAYMENTS
RELATED PARTY TRANSACTIONS
AUDITORS’ REMUNERATION
COMMITMENTS
CONTINGENT LIABILITIES
FORMER CEO AND EXECUTIVE DIRECTOR
EVENTS OCCURING AFTER THE REPORTING PERIOD
F1 SHARE‑BASED PAYMENTS
This section presents the Group’s benefits provided to employees through share-based incentives.
Eligible employees are remunerated for their services or incentivised for their performance in part through
shares or rights to shares.
The Employee Equity Plan ( the “Plan”) was approved by shareholders at the Annual General Meeting on 22 November
2018. The Plan is designed to align employee and shareholder interests through share ownership. The Plan is for the benefit
of all employees (including Executive Directors) of the Company. Awards under the Plan are issued to eligible participants
by way of:
• an Option;
• a Right;
• a Share;
• a Performance Share.
(A) OPTIONS GRANTED UNDER THE EMPLOYEE EQUITY PLAN
Options are granted under the Plan for no consideration and carry no dividend or voting rights. When exercisable, each
Option is converted into one fully paid ordinary share in the Company.
On the 25 April 2021, 2,000,000 unissued shares under Option expired. There were no Options granted during the current
financial year and as at 30 June 2021 there are no Options outstanding under the Plan.
(i) Movements during the year
Set out in the table below is a summary of movements in the number of Options under the Employee Equity Plan at the
end of the financial year.
Grant date
Balance at the
start of the year
Granted
during the year
Exercised
during the year
Forfeited
during the year
Balance at the
end of the year
Unvested at the
end of the year
26 November 2018
2,000,000
‑
‑
(2,000,000)
‑
‑
PERFORMANCE RIGHTS PROGRAM
(B)
The Performance Rights Program (PRP) was implemented in FY20 (in accordance with the Plan) and acts as the Group’s
long‑term incentive scheme to reward participants through variable remuneration. Under the PRP, Executives and other
eligible senior employees are invited to receive performance rights in the Company. Detailed remuneration disclosures
including the link between the PRP and shareholder wealth are provided in the Remuneration Report.
Under the PRP, each performance right enables the participant to acquire a share in the Company, at a future date, subject
to agreed vesting conditions. The number of performance rights allocated to each participant is set by the Board and
based on individual circumstances and performance.
(i) Movements during the year
The second allocation of performance rights under the PRP were granted on 23 November 2020. The grants were awarded
at no cost to the participants and are subject to performance conditions over a three‑year period ending 30 June 2023.
Set out in the table below is a summary of movements in the number pf performance rights under the PRP at the end of
the financial year.
Grant date
12 September 2019
21 October 2019
1 November 2019
20 November 2019
29 November 2019
4 December 2019
23 November 2020
Balance at the
start of the year
Granted
during the year
Exercised
during the year
Forfeited
during the year
Balance at the
end of the year
Unvested at the
end of the year
1,369,687
1,269,117
591,697
1,985,295
413,603
208,344
‑
5,837,743
‑
‑
‑
‑
‑
‑
11,737,277
11,737,277
‑
‑
‑
‑
‑
‑
‑
‑
(330,882)
1,038,805
1,038,805
(921,691)
(141,184)
(1,985,295)
(413,603)
347,426
450,513
347,426
450,513
‑
‑
‑
‑
‑
208,344
208,344
(5,528,977)
6,208,300
6,208,300
(9,321,632)
8,253,388
8,253,388
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
98
WORLD CLASS AUTOMOTIVE SOLUTIONS
OTHER INFORMATION
F1
SHARE‑BASED PAYMENTS (CONT.)
(B)
PERFORMANCE RIGHTS PROGRAM (CONT.)
(ii) Vesting conditions of rights
Vesting of the performance rights is subject to continued employment with the Group and achievement of performance
hurdles which are based on the Group’s relative TSR (20%) and EPS (80%) performance over a three‑year period.
Further details regarding these performance measures and how they are calculated can be found in the Remuneration
Report on page 27.
(iii) Fair value of rights granted
The fair value of the EPS rights has been determined based on a Black Scholes Model as they are subject to non‑market
performance conditions. Under this method the fair value is based on the share price at the valuation date with an
adjustment for the dividends foregone during the vesting period.
To reflect the impact of the market-based performance conditions, the fair value of the rights subject to the relative TSR
have been calculated using Monte‑Carlo simulation techniques. The variables in the table below are used as inputs into the
model to determine the fair value of performance rights.
Grant date 1
12 September 2019
21 October 2019
1 November 2019
20 November 2019
29 November 2019
4 December 2019
23 November 2020
Share price
on grant date
Share price
volatility 2
Risk free rate
Annual
dividend yield
Fair value
per TSR right
Fair value
per EPS right
$1.32
$1.37
$1.38
$1.27
$1.24
$1.20
$0.75
30%
30%
30%
30%
30%
30%
40%
0.88%
0.78%
0.78%
0.71%
0.65%
0.68%
0.91%
2.8%
2.8%
2.8%
2.8%
2.8%
2.8%
1.00%
$0.50
$0.56
$0.57
$0.42
$0.41
$0.37
$0.34
$1.22
$1.27
$1.28
$1.18
$1.15
$1.11
Vesting date
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2022
1 July 2022
$0.72
31 August 2023
1 For the purposes of valuation, the grant date is determined in accordance with AASB 2 Share‑based Payments.
2 The Company share price volatility is based on the Company’s average historical share price volatility at the grant date.
SERVICE RIGHTS GRANTED UNDER THE EMPLOYEE EQUITY PLAN
(C)
In June 2021, 909,090 service rights were granted to a senior Executive of the Group in lieu of fixed remuneration.
Each service right enables the participant to acquire a share in the Company at a future date and exercise price subject to
vesting conditions. The service rights were issued under two tranches.
(i) Movements during the year
Set out in the table below is a summary of movements in the number of service rights under the Employee Equity Plan at
the end of the financial year.
Grant date
28 June 2021
Balance at the
start of the year
Granted
during the year
Exercised
during the year
Forfeited
during the year
Balance at the
end of the year
Unvested at the
end of the year
‑
909,090
‑
‑
909,090
909,090
(ii) Vesting conditions of Service Rights
For both tranches, the service condition requires the participant to be continuously contracted/engaged to/by the
Company or a Group Company from 13 May 2021 to the Vesting Date. The service rights will expire if vesting conditions are
not satisfied. Service rights that vest are subject to the Company’s Securities Trading Policy.
Should the participant cease to be contracted to or engaged by the Company or a Group Company prior to the vesting
dates, the service rights will vest in relation to the number of days contracted to the Company on a straight‑line basis.
(iii) Fair value of rights granted
The Group uses the Black Scholes pricing methodology to measure the fair value of the service rights at grant date. Key
assumptions and judgements are set out in the table below.
Tranche
Tranche 1
Tranche 2
Grant date
28 June 2021
28 June 2021
Service rights
granted
Share price
on grant date
Risk free
rate
Annual
dividend yield
Fair value
per right
Vesting date
454,545
454,545
$0.56
$0.56
0.021%
0.021%
0.00%
0.00%
$0.56 13 November 2021
$0.56
1 July 2022
EXPENSES ARISING FROM SHARE‑BASED PAYMENT TRANSACTIONS
(D)
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Share‑based payments (write‑back) / expense
2021
$’000
(1,227)
2020
$’000
1,288
The share‑based payments expense for the year ended 30 June 2021 is a net write‑back. The probability of the
performance conditions being satisfied is assessed at the end of each reporting period to reflect the most current
expectation of vesting. The FY21 amount includes the write‑back of the accounting expense recognised in FY20. This is
as a result of either the service condition not being met or a re‑assessment that the EPS hurdle will not be achieved.
99
AMA GROUP LIMITED | 30 JUNE 2021 F NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F1
SHARE‑BASED PAYMENTS (CONT.)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
(E)
The cost of share‑based payments are determined on the basis of the fair value of the equity instrument at grant date.
Determining the fair value assumes choosing the most suitable valuation model for these equity instruments, by which the
characteristics of the grant have a decisive influence. The input into the valuation model includes relevant judgments such
as the estimated probability of vesting and the volatility of the underlying share.
SIGNIFICANT ACCOUNTING POLICIES
Share‑based payments
The grant date fair value of equity‑settled share‑based payments is recognised as an expense proportionally
over the vesting period, with a corresponding increase in equity.
The fair value of instruments with market‑based performance conditions (relative TSR) is calculated at the
date of grant using a Monte Carlo simulation model. The probability of achieving market‑based performance
conditions is incorporated into the determination of the fair value per instrument.
The fair value of instruments with non‑market‑based performance conditions (EPS) and service conditions are
calculated using a Black‑Scholes option pricing model.
At each Statement of Financial Position date, the entity revises its estimate of the number of options and
performance rights that are expected to become exercisable. The employee benefit expense recognised each
period takes into account the most recent estimate.
F2 RELATED PARTY TRANSACTIONS
This section highlights the Group’s transactions with its related parties and the extent these transactions
impacted the Group’s financial performance and position.
PARENT ENTITY
(A)
The ultimate holding entity is AMA Group Limited. Information about the Group’s structure, including details of the
controlled entities and holding company are set out in note E2.
KEY MANAGEMENT PERSONNEL COMPENSATION
(B)
The total remuneration for KMP of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Termination benefits
Other benefits
Equity settled benefits 1
Total KMP compensation
2021
$
2020
$
4,453,768
3,419,953
107,336
5,986
‑
42,265
(714,241)
3,895,114
127,664
21,325
845,989
74,736
1,033,068
5,522,735
1 The share-based payments expense for the year ended 30 June 2021 is a net write-back. The probability of the performance conditions being satisfied is
assessed at the end of each reporting period to reflect the most current expectation of vesting. The FY21 amount includes the write-back of the accounting
expense recognised in FY20. This is as a result of either the service condition not being met or a re‑assessment that the EPS hurdle will not be achieved.
Detailed remuneration disclosures and information regarding compensation of individual Key Management Personnel are
provided in the Remuneration Report on pages 19 to 35.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
100
WORLD CLASS AUTOMOTIVE SOLUTIONS
OTHER INFORMATION
F2
RELATED PARTY TRANSACTIONS (CONT.)
(C) AMOUNTS RECOGNISED AS EXPENSES
A number of KMP hold directorships or are associated with other entities. During the year the Group transacted with
entities that were controlled or significantly influenced by members of the KMP.
The table below summarises the aggregate amounts that were recognised in the Consolidated Statement of Profit or Loss
in relation to the transactions which occurred between KMP and the Group.
Service, entity and nature of transaction
Legal and advisory services
The Group utilises Nicholson Ryan Lawyers for ongoing legal and
advisory services.
The Group engaged Colinton Capital Partners Pty Ltd to provide
financial advisory and transactional services in relation to the
acquisition of Capital Smart and ACM Parts, and the related
equity raise and debt refinance.
Property rental fees and outgoings
The Group has incurred rental fees and outgoing expenses
and made payments to AV Ventures Pty Ltd, A&R Property
Developments Pty Ltd, A&R Development Holdings Pty Ltd and
Bundall Road Pty Ltd.
The Group has incurred rental fees and outgoing expenses
and made payments to Silvan Bond Pty Ltd and Malone
Superannuation Fund.
KMP
2021
$
2020
$
Leath Nicholson
930,697
1,541,683
Simon Moore
‑
3,150,000
Andrew Hopkins 1
1,357,234
2,035,353
Raymond Malone 2
‑
‑
39,609
125,074
The Group has incurred rental fees and outgoing expenses and
made payments to SFRE Pty Ltd.
Raymond
Smith‑Roberts 3
Claims management
The Group transacts with A & R Insurance Management
(t/a Unity Specialised Services), a claims management business
which handles and allocates insurance claims from a number of
major insurers into vehicle accident repair facilities around Australia.
Training and recruitment
The Group has incurred expenses and made payments to I‑CAR
Australia, an industry based not-for-profit organisation that
provides training to the collision repair industry and entities
within the AMA Group.
Andrew Hopkins 1
437,983
653,544
Steven Bubulj 4
141,599
189,502
Total other transactions with KMP
2,867,513
7,734,765
1 Amounts disclosed in relation to Andrew Hopkins are for the period to 31 January 2021, which is the date Andrew Hopkins ceased being a KMP.
2 Amounts disclosed in relation to Raymond Malone are for the period to 31 August 2019 (prior comparative period), which is the date Raymond Malone ceased
being a KMP.
3 Amounts disclosed in relation to Raymond Smith‑Roberts are for the period to 20 November 2019 (prior comparative period), which is the date
Raymond Smith‑Roberts ceased being a KMP.
4 Amounts disclosed in relation to Steven Bubulj are for the period to 26 March 2021, which is the date Steven Bubulj ceased being a KMP.
(D)
BALANCES OUTSTANDING TO ENTITIES CONTROLLED BY KEY MANAGEMENT
PERSONNEL
The table below summarises the aggregate amounts that were recognised in the Consolidated Statement of Financial
Position in relation to the transactions which occurred between KMP and the Group.
Service, entity and nature of transaction
KMP
Right‑of‑use assets
The Group leases site warehouses and office space from
AV Ventures Pty Ltd, A&R Property Developments Pty Ltd,
A&R Development Holdings Pty Ltd and Bundall Road Pty Ltd.
Andrew Hopkins 1
Lease liabilities
The Group leases site warehouses and office space from
AV Ventures Pty Ltd, A&R Property Developments Pty Ltd,
A&R Development Holdings Pty Ltd and Bundall Road Pty Ltd.
Andrew Hopkins 1
2021
$
2020
$
‑
‑
14,400,516
14,942,611
Trade and other payables
The Group utilises Nicholson Ryan Lawyers for ongoing legal
and advisory services.
Leath Nicholson
114,328
‑
The Group transacts with A & R Insurance Management
(t/a Unity Specialised Services), a claims management business.
Andrew Hopkins 1
The Group transacts with I‑CAR Australia, an industry based
not-for-profit organisation.
Steven Bubulj 2
‑
‑
17,760
19,000
Net liabilities to KMP related entities
114,328
578,855
1 2021 disclosure in relation to Andrew Hopkins is not shown as Andrew Hopkins was not a KMP as at 30 June 2021.
2 2021 disclosure in relation to Steven Bubulj is not shown as Steven Bubulj was not a KMP as at 30 June 2021.
101
AMA GROUP LIMITED | 30 JUNE 2021 F
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F2
RELATED PARTY TRANSACTIONS (CONT.)
LOANS PROVIDED TO A FORMER RELATED PARTY
(E)
Loans outstanding at the end of the current and prior year include a loan to the former Group Chief Executive Officer and
Executive Director, Andrew Hopkins.
Andrew Hopkins’ loan accrues interest at a rate consistent to the ‘Indicator Lending Rates ‑ Bank variable housing loans
interest rate’ published by the Reserve Bank of Australia. Andrew Hopkins has defaulted on his loan and as at 30 June 2021,
the balance outstanding on his loan is $1,399,493 (30 June 2020: $1,339,130).
The Group has not impaired the value of the loan largely due to the existence of a recently signed loan deed and an
assessment of the capacity of Andrew Hopkins to repay the loan. Refer to note F6 for further details.
The movement from prior year to the current balance of $1,399,493 is due to interest accrued.
There are no other loans with related parties outstanding as at the date of this report.
F3 AUDITORS’ REMUNERATION
This section presents the total remuneration of the Group’s external auditors for audit, assurance, and
other services.
During the year the following fees were paid or payable for services provided by KPMG:
Audit and other assurance services
Audit and review of financial statements - Group
Audit and review of financial statements - controlled entities
Other assurance services
Total remuneration for audit and other assurance services
Other non‑audit services
Transactional services
Tax compliance services
Other services
Total remuneration for other non‑audit services
Total auditors' remuneration
2021
$
2020
$
679,972
216,315
‑
896,287
657,705
219,000
2,277
878,982
888,160
39,093
‑
1,277,490
62,335
13,223
927,253
1,353,048
1,823,540
2,232,030
It is the Group’s policy to employ KPMG on assignments additional to their statutory audit duties where KPMG’s expertise
and experience with the Group are important. These assignments are principally tax advice and transactional services
(e.g. due diligence on acquisitions or services relating to sale of business). It is the Group’s policy to seek competitive
quotes for all major consulting projects.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
102
WORLD CLASS AUTOMOTIVE SOLUTIONS
OTHER INFORMATION
F4 COMMITMENTS
This section presents the Group’s contractual obligation to make a payment in the future in relation to purchases
of property, plant and equipment, and lease commitments.
Capital expenditure commitments
Committed at the end of the reporting period but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
Later than five years
Total capital expenditure commitments
Operating lease commitments
Commitments for minimum lease payments in relation to non‑cancellable operating leases
are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Total operating lease commitments
Total commitments for expenditure
F5 CONTINGENT LIABILITIES
2021
$’000
2020
$’000
21
‑
‑
21
161
341
‑
502
523
‑
‑
‑
‑
237
270
‑
507
507
Contingent liabilities are potential future cash payments where the likelihood of payment is not considered
probable or cannot be measured reliably.
(A) BANK GUARANTEES IN RESPECT OF CONTROLLED ENTITIES
Undertakings have been given by the Company in the normal course of business. It is not practicable to ascertain or
estimate the maximum amount for which the Company may become liable in respect thereof. As at 30 June 2021 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
2021
$’000
9,780
2020
$’000
12,414
LEGAL CLAIMS
(B)
During the period, a business vendor issued a Notice of Dispute against the Group in relation to their earn‑out calculation.
The parties agreed to mediate which at the date of this report is still ongoing. Management considers the claims brought
to be unjustified, and the probability that the settlement will exceed the amount already provisioned for, to be less than
probable. The Directors are of the view that no material losses will arise in respect of the legal claim at the date of these
Financial Statements. Further information on this contingency is omitted so as not to prejudice the Group’s position
in the related dispute.
103
AMA GROUP LIMITED | 30 JUNE 2021 F F6 FORMER CEO AND EXECUTIVE DIRECTOR
In late September 2020, the AMA Group Board of Directors received a protected disclosure from an individual employed by
the Company. On receipt of these allegations, in accordance with the Company’s Whistleblower Policy, the Group engaged
law firm Seyfarth Shaw Australia and leading forensic accounting firm McGrathNicol Advisory to undertake an independent
forensic investigation. The investigation was into the contents of the disclosure, which involved allegations in relation to the
conduct of the former Group CEO and Executive Director, Andrew Hopkins, during the period he was a senior executive
with the Group.
In January 2021, a report was received in respect of the independent forensic investigation and Andrew Hopkins’s
resignation was tendered on 31 January 2021, effective on that date. As disclosed in the half year report ended
31 December 2020, the Group had formally commenced a process to recover funds of approximately $1,000,000 based
on information at the date of that report.
Following the initial whistleblower disclosure and investigation, further whistleblower disclosures were made by a number
of individuals who each raised allegations about Andrew Hopkins’ conduct. The conduct primarily related to unauthorised
expenses. The unauthorised expenses are identified to have been incurred between FY16 and FY21, with the majority
incurred prior to FY20. A portion of these unauthorised transactions were capitalised in property, plant and equipment due
to the nature of the items. These have subsequently been written off to the profit or loss as impairment expense in FY21
In May 2021, and as a result of McGrathNicol Advisory’s reports, the Company filed proceedings in the Federal Court of
Australia against Andrew Hopkins (and a company controlled by him) for the recovery of unauthorised expenses incurred
by or on behalf of Andrew Hopkins as CEO of the Company, and the repayment of an outstanding related party loan.
As noted in the FY20 Annual Report, Andrew Hopkins had a related party loan which dated back to FY16 and was acquired
as part of the Gemini Accident Repair Centres Pty Ltd acquisition. It was previously agreed to be extinguished against
future short‑term and long‑term incentives but under the agreement, it is immediately due and payable in the event that
Andrew Hopkins is no longer employed or contracted. Andrew Hopkins’s loan accrues interest and as at 30 June 2021, the
balance outstanding on his loan is circa $1,400,000. The Group has not impaired the value of the loan largely due to the
existence of a recently signed loan deed and an assessment of the capacity of Andrew Hopkins to repay the loan.
At the date of this report, the legal proceedings in the Federal Court of Australia remain on foot and the Group is seeking to
recover funds of approximately $3,000,000 relating to unauthorised expenses incurred by or on behalf of Andrew Hopkins
as CEO of the Company (circa $1,600,000) and the repayment of the outstanding loan which is in default and currently
due and payable (circa $1,400,000). At the date of this report, the Group has not yet received any funds.
Andrew Hopkins had been granted 4,875,004 performance rights under the Group’s PRP. The vesting requirements of the
performance rights are subject to service conditions. As the service conditions have not been met, the performance rights
lapsed on 31 January 2021.
During the financial year, the Group has incurred $737,000 in professional fees relating to investigating the whistleblower
disclosures and subsequent legal proceedings.
F7 EVENTS OCCURRING AFTER THE REPORTING PERIOD
This section outlines events which have occurred between the reporting date and the date the Financial Report
is authorised for issue.
The Group continues to experience uncertainty and adverse conditions resulting from impacts of the COVID‑19 pandemic.
Authorities have responded to the latest outbreak with travel restrictions, border closures and lockdowns across the
East Coast of Australia. The Group continue to adapt to the restrictions and manage the associated risks appropriately.
No other matters or circumstances have occurred subsequent to period end that have significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or
economic entity in subsequent financial years.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
104
WORLD CLASS AUTOMOTIVE SOLUTIONS
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 2021 and of its
performance for the financial year ended on that date, and
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable, and
at the date of this declaration, there are reasonable grounds to believe that the members of the closed group will be
able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note E4.
Note A1 confirms that the Financial Statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors made pursuant to section 303(5) of the Corporations Act 2001.
Carl Bizon
Director
23 August 2021
105
105
AMA GROUP LIMITED | 30 JUNE 2021
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
106
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of AMA Group Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of AMA Group Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2021; • Consolidated statement of profit or loss, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors' Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Material uncertainty related to going concern We draw attention to Note A1, “Going Concern” in the financial report. The conditions disclosed in Note A1, indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. Our opinion is not modified in respect of this matter. In concluding there is a material uncertainty related to going concern we evaluated the extent of uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going concern. Our approach to this included: Evaluating the feasibility, quantum and timing of the Group’s plans to revise funding arrangements and/or raise additional funding to address going concern; Assessing the Group’s cash flow forecasts for incorporation of the Group’s future operations and plans to address going concern, in particular in light of forecasted potential breaches of debt covenants under the requirements of existing debt arrangements; and Determining the completeness of the Group’s going concern disclosures for the principle matters casting significant doubt on the Group’s ability to continue as a going concern, the Group’s plans to address these matters, and the material uncertainty. Key Audit Matters In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the Key Audit Matters: • Goodwill and intangible assets; and • Revenue. Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of AMA Group Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of AMA Group Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2021; • Consolidated statement of profit or loss, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors' Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. WORLD CLASS AUTOMOTIVE SOLUTIONS
107
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of AMA Group Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of AMA Group Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2021; • Consolidated statement of profit or loss, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors' Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Material uncertainty related to going concern We draw attention to Note A1, “Going Concern” in the financial report. The conditions disclosed in Note A1, indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. Our opinion is not modified in respect of this matter. In concluding there is a material uncertainty related to going concern we evaluated the extent of uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going concern. Our approach to this included: Evaluating the feasibility, quantum and timing of the Group’s plans to revise funding arrangements and/or raise additional funding to address going concern; Assessing the Group’s cash flow forecasts for incorporation of the Group’s future operations and plans to address going concern, in particular in light of forecasted potential breaches of debt covenants under the requirements of existing debt arrangements; and Determining the completeness of the Group’s going concern disclosures for the principle matters casting significant doubt on the Group’s ability to continue as a going concern, the Group’s plans to address these matters, and the material uncertainty. Key Audit Matters In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the Key Audit Matters: • Goodwill and intangible assets; and • Revenue. Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of AMA Group Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of AMA Group Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2021; • Consolidated statement of profit or loss, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Notes including a summary of significant accounting policies; and • Directors' Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. AMA GROUP LIMITED | 30 JUNE 2021 i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
108
Goodwill and intangible assets (Goodwill - $349.2m, Impairment - $95.8m) Refer to Note C6 to the financial report The key audit matter How the matter was addressed in our audit A key audit matter for us was the Group’s annual testing of goodwill assets for impairment, given the size of the balance (being 31% of total assets) and the significantly higher estimation uncertainty continuing from the business disruption impact of the ongoing COVID-19 global pandemic and turnover in senior members of management. Certain conditions impacting the Group increased the judgement applied by us when evaluating the evidence available. We focussed on the significant forward-looking assumptions the Group applied in their fair value less costs of disposal models including: Forecast cash flows, growth rates andterminal growth rates – the Group hasexperienced significant businessdisruption and incurred a loss during theyear. COVID-19 has continued to impactthe Group through the hibernation ofselected businesses, labour shortages,increase in parts costs and a reduction inthe demand for certain products andservices. There was also turnover insenior management during the yearwhich impacted the future operatingstrategies of the Group. These conditionsand the uncertainty of their continuationincrease the possibility of goodwill andintangible assets being impaired, plus therisk of inaccurate forecasts or asignificantly wider range of possibleoutcomes for us to consider. Wefocused on the expected rate of recoveryfor the Group and what the Groupconsiders as their future business modelas a result of expected synergies frombusiness acquisitions and pricingnegotiations when assessing thefeasibility of the Group’s forecast cashflows. Assumptions included in theGroup’s forecast cash flows are alsosensitive to market changes;Forecast growth rates and terminalWorking with our valuation specialists, our procedures included: We considered the appropriateness of the fairvalue less costs of disposal method applied by theGroup to perform the annual test of goodwill forimpairment against the requirements of theaccounting standards;We assessed the integrity of the fair value lesscosts of disposal models used, including theaccuracy of the underlying calculation formulas;We considered the Group’s determination of theirCGUs based on our understanding of theoperations of the Group’s business including thelevel at which management monitor goodwill andhow independent cash inflows were generated,against the requirements of the accountingstandards;We made enquires of management to understandthe continuing impact of COVID-19 to the Group;We compared the forecast cash flows contained inthe fair value less costs of disposal models toforecasts approved by the Board;We assessed the accuracy of previous Groupforecasts to inform our evaluation of forecastsincorporated in the models. We applied increasedscepticism to current period forecasts in areaswhere previous forecasts were not achieved and/orwhere future uncertainty is greater or volatility isexpected;We considered the sensitivity of the models byvarying key assumptions, such as expected rate ofrecovery for the Group, forecast growth rates,terminal growth rates and discount rates, within areasonably possible range. We considered theinterdependencies of key assumptions whenperforming the sensitivity analysis and what theGroup consider to be reasonably possible. We didthis to identify those CGUs at higher risk ofimpairment and those assumptions at higher risk ofWORLD CLASS AUTOMOTIVE SOLUTIONS
109
Goodwill and intangible assets (Goodwill - $349.2m, Impairment - $95.8m) Refer to Note C6 to the financial report The key audit matter How the matter was addressed in our audit A key audit matter for us was the Group’s annual testing of goodwill assets for impairment, given the size of the balance (being 31% of total assets) and the significantly higher estimation uncertainty continuing from the business disruption impact of the ongoing COVID-19 global pandemic and turnover in senior members of management. Certain conditions impacting the Group increased the judgement applied by us when evaluating the evidence available. We focussed on the significant forward-looking assumptions the Group applied in their fair value less costs of disposal models including: Forecast cash flows, growth rates andterminal growth rates – the Group hasexperienced significant businessdisruption and incurred a loss during theyear. COVID-19 has continued to impactthe Group through the hibernation ofselected businesses, labour shortages,increase in parts costs and a reduction inthe demand for certain products andservices. There was also turnover insenior management during the yearwhich impacted the future operatingstrategies of the Group. These conditionsand the uncertainty of their continuationincrease the possibility of goodwill andintangible assets being impaired, plus therisk of inaccurate forecasts or asignificantly wider range of possibleoutcomes for us to consider. Wefocused on the expected rate of recoveryfor the Group and what the Groupconsiders as their future business modelas a result of expected synergies frombusiness acquisitions and pricingnegotiations when assessing thefeasibility of the Group’s forecast cashflows. Assumptions included in theGroup’s forecast cash flows are alsosensitive to market changes;Forecast growth rates and terminalWorking with our valuation specialists, our procedures included: We considered the appropriateness of the fairvalue less costs of disposal method applied by theGroup to perform the annual test of goodwill forimpairment against the requirements of theaccounting standards;We assessed the integrity of the fair value lesscosts of disposal models used, including theaccuracy of the underlying calculation formulas;We considered the Group’s determination of theirCGUs based on our understanding of theoperations of the Group’s business including thelevel at which management monitor goodwill andhow independent cash inflows were generated,against the requirements of the accountingstandards;We made enquires of management to understandthe continuing impact of COVID-19 to the Group;We compared the forecast cash flows contained inthe fair value less costs of disposal models toforecasts approved by the Board;We assessed the accuracy of previous Groupforecasts to inform our evaluation of forecastsincorporated in the models. We applied increasedscepticism to current period forecasts in areaswhere previous forecasts were not achieved and/orwhere future uncertainty is greater or volatility isexpected;We considered the sensitivity of the models byvarying key assumptions, such as expected rate ofrecovery for the Group, forecast growth rates,terminal growth rates and discount rates, within areasonably possible range. We considered theinterdependencies of key assumptions whenperforming the sensitivity analysis and what theGroup consider to be reasonably possible. We didthis to identify those CGUs at higher risk ofimpairment and those assumptions at higher risk of growth rates – in addition to the uncertainties described above, the Group’s models are highly sensitive to small changes in these assumptions, reducing available headroom. This drives additional audit effort specific to their feasibility and consistency of application to the Group’s strategy; and Discount rates - these are complicated in nature and vary according to the conditions and environment the specific Cash Generating Unit (CGU) is subject to from time to time, and the models approach to incorporating risks into the cash flows or discount rates. The Group’s modelling is highly sensitive to small changes in the discount rate. We involve our valuations specialists with the assessment. The Group uses complex models to perform their annual testing of goodwill for impairment. The models are largely manually developed, use adjusted historical performance, and a range of internal and external sources as inputs to the assumptions. Complex modelling, using forward-looking assumptions tend to be prone to greater risk for potential bias, error and inconsistent application. These conditions necessitate additional scrutiny by us, in particular to address the objectivity of sources used for assumptions, and their consistent application. The Group has a large number of operating businesses necessitating our consideration of the Group’s determination of CGUs, based on the smallest group of assets to generate largely independent cash inflows. In addition to the above, the Group recorded an impairment charge of $90.6m against goodwill in relation to Capital Smart. This further increased our audit effort in this key audit area. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. bias or inconsistency in application and to focus our further procedures; We challenged the Group’s forecast cash flow and growth assumptions in light of the expected continuation of unprecedented uncertainty of business disruption and impacts of the COVID-19 global pandemic. We compared forecast growth rates and terminal growth rates to authoritative published studies of industry trends and expectations, and considered differences for the Group’s operations. We assessed key assumptions such as expected rate of recovery for the group and what the group considers as their future business model. We used our knowledge of the Group, business and customers, and our industry experience. We sourced authoritative and credible inputs from our specialists and market advisors; We checked the consistency of the growth rates to the Group’s plans and our experience regarding the feasibility of these in the industry in which they operate; We assessed the impact of business expansion and market changes on the Group’s key assumptions, specifically forecast EBIT growth expected to be achieved through identified synergies, EBIT contribution from identified growth initiatives, capital spend requirements and head office costs, for indicators of bias and inconsistent application, using our industry knowledge; We independently developed a discount rate range considered comparable using publicly available market data for comparable entities, adjusted by risk factors specific to the Group and the industry it operates in; We recalculated the impairment charge against the recorded amount disclosed; and We assessed the disclosures in the financial report using our understanding of the issue obtained from our testing and against the requirements of the accounting standards. AMA GROUP LIMITED | 30 JUNE 2021 i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
110
Revenue Recognition (Revenue and other income - $919.9m) Refer to Note B2 of the financial report The key audit matter How the matter was addressed in our audit The Group has revenue streams across each of its different operating segments. The Group’s significant revenue streams include: -Vehicle panel repair services; and-Sale of automotive parts andaccessories.Revenue recognition was a key audit matter due to the value of the balance, significant audit effort and judgment we have applied in assessing the Group’s recognition and measurement of revenue. This was driven from the: High volume of transactions of revenuerecognised;Complexity involved in applying therequirements of AASB15 Revenue fromContracts with Customers, includingconsideration of the timing of revenuerecognition based on underlyingarrangements with customers; andOpportunity for manual intervention, thehigh volume of transactions and theinterfaces of multiple systems with thegeneral ledger presenting conditions fortransactions to be recorded incorrectly.Our procedures included: Evaluating the appropriateness of the Group’s accounting policies for revenue recognition for each significant revenue stream against the requirements of AASB 15 and our understanding of the business;Reading a sample of customer contracts to understand the key terms of the arrangements and the performance obligations;On a sample basis, we tested the existence, accuracy and timing of revenue recognised by the Group. This involved agreeing transactions to underlying documentation such as signed customer collection notes, photographs of vehicles in stages of repair, invoices and customer prepared remittance statements. We also checked customer receipts to bank statements;Evaluating the adequacy of the disclosures made in Note B2 in light of the requirements of the accounting standards. Other Information Other Information is financial and non-financial information in AMA Group Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • Preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • Implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • Assessing the Group and Company's ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • To obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • To issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. WORLD CLASS AUTOMOTIVE SOLUTIONS
111
Revenue Recognition (Revenue and other income - $919.9m) Refer to Note B2 of the financial report The key audit matter How the matter was addressed in our audit The Group has revenue streams across each of its different operating segments. The Group’s significant revenue streams include: -Vehicle panel repair services; and-Sale of automotive parts andaccessories.Revenue recognition was a key audit matter due to the value of the balance, significant audit effort and judgment we have applied in assessing the Group’s recognition and measurement of revenue. This was driven from the: High volume of transactions of revenuerecognised;Complexity involved in applying therequirements of AASB15 Revenue fromContracts with Customers, includingconsideration of the timing of revenuerecognition based on underlyingarrangements with customers; andOpportunity for manual intervention, thehigh volume of transactions and theinterfaces of multiple systems with thegeneral ledger presenting conditions fortransactions to be recorded incorrectly.Our procedures included: Evaluating the appropriateness of the Group’s accounting policies for revenue recognition for each significant revenue stream against the requirements of AASB 15 and our understanding of the business;Reading a sample of customer contracts to understand the key terms of the arrangements and the performance obligations;On a sample basis, we tested the existence, accuracy and timing of revenue recognised by the Group. This involved agreeing transactions to underlying documentation such as signed customer collection notes, photographs of vehicles in stages of repair, invoices and customer prepared remittance statements. We also checked customer receipts to bank statements;Evaluating the adequacy of the disclosures made in Note B2 in light of the requirements of the accounting standards. Other Information Other Information is financial and non-financial information in AMA Group Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • Preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • Implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • Assessing the Group and Company's ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • To obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • To issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. AMA GROUP LIMITED | 30 JUNE 2021 i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
t
r
r
o
o
p
p
e
e
R
R
l
l
a
a
i
i
c
c
n
n
a
a
n
n
F
F
i
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
O
112
Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of AMA Group Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 19 to 35 of the Directors’ report for the year ended 30 June 2021. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.KPMGAdamTwemlowPartner Bundall23 August 2021 WORLD CLASS AUTOMOTIVE SOLUTIONS
113113
Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of AMA Group Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 19 to 35 of the Directors’ report for the year ended 30 June 2021. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.KPMGAdamTwemlowPartner Bundall23 August 2021 AMA GROUP LIMITED | 30 JUNE 2021 ASX ADDITIONAL INFORMATION
In accordance with the ASX Listing Rules the following information, as at 4 August 2021, is provided:
SUBSTANTIAL HOLDERS
The Company hold current substantial holder notifications in accordance with section 671B of the Corporations Act 2001
for the following:
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
DISTRIBUTION OF EQUITABLE SECURITIES
Range
1 ‑ 1,000
1,001 ‑ 5,000
5,001 ‑ 10,000
10,001 ‑ 100,000
100,001 Over
Total
Number of
shares held
% of total
shares held
205,462,498
157,169,027
37,722,910
33,933,855
24,369,285
27.52
21.05
5.05
4.55
3.26
Holders
568
1,299
691
1,453
Number of
shares held
302,217
3,608,420
5,377,648
46,721,013
287
690,512,600
4,298
746,521,898
There were 581 shareholders with less than a marketable parcel totalling 315,415 shares.
UNQUOTED EQUITY SECURITIES
There were 2,681,830 Fully Paid Ordinary Unquoted shares held by 2 individual holders; with all holders having in excess of
100,000 units.
There were 8,253,388 performance rights (with the potential to take up ordinary shares) issued to 11 participating
employees under the AMA Group Limited Performance Rights Program.
There were 909,090 service rights (with the potential to take up ordinary shares) issued to 1 participating employee under
the AMA Group Limited Employee Equity Plan.
There were nil unquoted options (with the potential to take up ordinary shares).
There are no voting rights attached to the unquoted equity securities.
QUOTED EQUITY SECURITIES
As at 4 August 2021 there were 4,298 individual holders (17 August 2020: 4,649).
The voting rights attaching to the ordinary shares are:
(a) On a show of hands every shareholder present at a meeting in person or by proxy shall have one vote; and
(b) Upon a poll, each share shall have one vote.
For details of registered office and share registry details refer to inside front cover – Shareholder Information.
i
w
e
v
e
R
s
s
e
n
i
s
u
B
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
t
r
o
p
e
R
l
a
i
c
n
a
n
F
i
n
n
o
o
i
i
t
t
a
a
m
m
r
r
o
o
f
f
n
n
I
I
r
r
e
e
h
h
t
t
O
O
114
WORLD CLASS AUTOMOTIVE SOLUTIONS
ASX ADDITIONAL INFORMATION
TOP 20 SHAREHOLDERS
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
Continue reading text version or see original annual report in PDF format above