BAU ART
H O
L
□
I N G
S
ABN 87 602 638 531
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2020
C O N T E N T S
Corporate Directory
Appendix 4E
Review of Operations
Directors' Report
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial
Position
Consolidated Statement of Changes in
Equity
Page
3
4
5
7
1 5
1 6
1 7
Consolidated Statement of Cash Flows
1 8
Condensed Notes to the Consolidated
Financial Statements
Directors' Declaration
Independent Auditor’s Report
Auditor’s Independence Declaration
Additional Information
1 9
4 9
5 0
55
56
Baumart Holdings Limited 2020 Annual Report
P a g e | 2
C O R P O R A T E D I R E C T O R Y
Directors
Mr Berthus Budiman – Executive Director
Mr Matthew Logan – Executive Director
Mr Michael Crichton – Non-Executive Director
Mr Anson Gan – Non-Executive Director
Company Secretary
Ms Natalie Teo
Principal Place of Business
15 McCabe Street
North Fremantle WA 6159
Telephone: +61 8 6558 0814
Website: www.baumart.com.au
Registered Office
15 McCabe Street
North Fremantle WA 6159
Telephone: +61 8 6389 2688
Facsimile: +61 8 6389 2588
Share Registry
Advanced Share Registry Services Pty Ltd
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
Auditor
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
Australian Securities Exchange
Australian Securities Exchange Limited
Level 40, Central Park,
152-158 St George’s Terrace
Perth WA 6000
ASX Code:
BMH
Baumart Holdings Limited 2020 Annual Report
P a g e | 3
A P P E N D I X 4 E
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
The following information is provided to the ASX under listing rule 4.3A
Company Name:
ABN:
Reporting Period:
Previous Reporting Period:
BauMart Holdings Limited (the Company)
87 602 638 531
Year ended 30 June 2020
Year ended 30 June 2019
RESULTS FOR ANNOUNCEMENT TO THE MARKET
$ Revenue from Ordinary Activities ($’000)
$ Profit (loss) from ordinary activities after tax ($’000)
$ Net profit (loss) attributable to members ($’000)
Net tangible assets per security
DIVIDENDS
30 June
2020
4,275
(258)
(258)
0.01
30 June
2019
4,325
(555)
(555)
0.01
Change up/
(down)
%
(1%)
54%
54%
0%
No dividends have been paid or declared by the Company since the beginning of the current reporting period. No
dividends were paid for the previous reporting period.
FOREIGN ENTITIES
Foreign entities included in the Group are outlined below:
Entity
Eco Pallets NZ Limited
FOR FURTHER INFORMATION
Country of
Incorporation
New Zealand
The Independent Auditor’s Review Report contains an emphasis of matter in relation to going concern.
Further information to assist in the understanding of the financial results presented above is provided throughout
this Annual Report.
Baumart Holdings Limited 2020 Annual Report
P a g e | 4
R E V I E W O F O P E R A T I O N S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0 ( F Y 2 0 )
FY20 was a challenging year with the ongoing COVID-19 pandemic affecting
every corner of the globe. But challenges present significant opportunity and this
resulted in a resilient set of results by the Group. During H2 FY20 and in line
with our strategy, the focus was to accelerate and invest resources for long-term
growth. Below are the Group highlights for FY20.
Group FY20 highlights
4th October 2019
Secured 3-year finance lease
contract for specialised
underground diamond mining
equipment
1st March 2020
Signed 1 year contract to
provide broad management
services to an industrial
distribution businesses
9th June 2020
Sale of glass processing assets
announced and subsequently
approved by shareholders at
the general meeting held on
20th July 2020
21st February 2020
Completed incorporation and
registrations of wholly owned
New Zealand subsidiary
31st March 2020
Strongest quarter of revenue
on record for the Group’s
materials handling division.
Eco Pallets bolstered by its
essential links to the supply
chain through the COVID-19
pandemic
30th June 2020
Strongest quarter of revenue on
record for Eco Pallets, beating
the previous record set 3
months earlier in March 2020
Group financial results
Group
Top line sales revenue
$4.27m
(1%)
Group
Net loss for the year
$0.26m
(54%)
Group
Other /net finance income
$1.23m
+433%
Group
Cash flow from operations
$0.83m
+968%
Group
Cash at bank
$0.27m
+51%
Group
Inventory value
$0.37m
(6%)
Baumart Holdings Limited 2020 Annual Report
P a g e | 5
R E V I E W O F O P E R A T I O N S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
Division highlights
Materials Handling
Top line sales revenue $3.95m (FY19: $3.49m)
13% growth compared to FY19
•
•
• Distribution of products that are considered essential links to Australia's
supply chain
• New products introduced during the year providing excellent growth
•
potential
Expansion into New Zealand to provide future growth through a proven
business model
FY21 and beyond
strategy
Sustainable
organic top line
revenue growth
Source and Procure
Top line sales revenue $115K (FY19: $nil)
•
• Newly established division with focus on delivering unique solutions to our
existing network of customers
• One of the key objectives for the division is to become the preferred
consumables supplier to the underground mining equipment project
Net tangible
asset growth
Building Materials
Top line sales revenue $205K (FY19: $833K)
75% decline compared to FY19
•
•
• Glass and wood composite distribution ceased during the year largely
explaining the variance to FY19
• Division is focused on further strengthening relationships with key resellers
in Queensland and Victoria via exclusive partnerships in these regions
Other and Net Finance Income
• Other income $1M (FY19: $227K)
• Net finance income $228K (FY19: $4K)
• Other income comprised rental from sub-letting of property, R&D rebates
and managed services contract income for a Perth based industrial
distribution business
The underground mining equipment project was affected by COVID-19
which resulted in delays of finance income from lease payments
The Company is working with our client to progressively repay the arrears
•
•
Glass Investment
•
•
Entered into a conditional agreement to sell Lisec glass processing
equipment for a dollar value of $3.5m
Sale was completed in July 2020 and the Company received 11,666,667
shares at a deemed issue price of $0.30 per share as part of the Ventus
Aqua Limited (VAQ) initial public offering onto the National Stock
Exchange of Australia (NSX)
The sale of the equipment is consistent with our strategic direction to
focus on opportunities in the supply and procurement sector
• Holding a strategic stake in VAQ presents opportunity for value
appreciation, both capital and dividend, along with providing
diversification and derisked benefits to the Group's portfolio
•
EBITDA
profitability
Leverage of
network for
cross selling
distribution
opportunities
New product
development
Acquisition of
highly
synergistic and
complementary
businesses
Baumart Holdings Limited 2020 Annual Report
P a g e | 6
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
The Directors present their report together with the consolidated financial statements of BauMart Holdings Limited
(the Company or Parent Entity) and its controlled entities (together referred to hereafter as the Consolidated
Entity or Group) for the year ended 30 June 2020 and the auditor’s report thereon.
DIRECTORS
The Directors of the Company at any time during or since the end of the year are:
Mr Berthus Budiman
Executive Director – appointed 31 October 2014
Mr Budiman has more than 29 years’ experience in the manufacturing, wholesale and distribution industry across
an extensive range of products such as building and raw materials, industrial products, pharmaceutical products
and consumer goods in South East Asia.
Prior to joining BauMart Holdings, Mr Budiman has held senior management positions with global corporations
such as Young Corporation (Young Indonesia Pratama, PT), Mahakam Group of Companies and SC Johnson &
Son (Indonesia). During his time with the Young Corporation as Vice President, he oversaw the establishment of
various distribution companies and manufacturing facilities in Asia Pacific, Europe, the Middle East and North and
South America.
Mr Budiman studied at the Christian University of Indonesia’s Faculty of Mechanical Engineering from 1967 to
1970.
Mr Matthew Logan
Executive Director, B. Com. – appointed 8 August 2016
Mr Logan graduated with a Bachelor of Commerce majoring in Accounting and Business Law from Curtin University
in Western Australia and is an experienced commercial manager in the industrial supplies and materials handling
industry.
He is responsible for the Eco Pallets Pty Ltd (Eco Pallets) business and has worked closely with BauMart since the
acquisition of Eco Pallets. He has also been instrumental in developing the Australia wide infrastructure for all
product distribution divisions of BauMart.
Mr Logan was formerly an associate of a private practice for over 10 years where he provided corporate and
accounting services to various ASX clients in the mining, energy, industrial and technology industries.
Mr Michael Crichton
Non-Executive Director - appointed 19 March 2015
Mr Crichton has been involved in the logistics and construction industry for over 20 years. He spent 12 years in
senior management positions at TNT Express Worldwide and DHL Worldwide Express in South Australia and
Western Australia.
Mr Crichton went on to establish new apprenticeship programs with MPA Skills (Master Plumbers and Painters
Association WA) before taking on a consulting role in the construction industry, specialising on apprenticeships, on
behalf of the Western Australian State Government for 10 years.
Mr Anson Gan
Non-Executive Director, B.Eng (Hons) – appointed 19 March 2015
Mr Gan is a registered electrical engineer with the Institution of Engineers (Malaysia). He has held a range of
project engineering and consulting positions with various engineering companies in Australia, Malaysia and China,
as well as establishing his own business specialising in green building design and green energy technology and
the supply of green building materials.
He is experienced in electrical engineering, project management and green building consultancy in large scale
residential and commercial construction projects in Malaysia.
Mr Gan has a Bachelor of Engineering with a major in Electrical Engineering from Curtin University, Western
Australia
Baumart Holdings Limited 2020 Annual Report
P a g e | 7
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
COMPANY SECRETARY
Ms Natalie Teo, B. Com. - appointed 19 March 2015
Ms Teo graduated with Bachelor of Commerce majoring in Marketing and Management and a Masters in
Accounting from Curtin University in Western Australia. She also holds a Graduate Diploma in Applied Corporate
Governance with the Governance Institute of Australia.
Ms Teo is a Chartered Secretary and an Associate of the Governance Institute of Australia. She is currently the
secretary to several ASX-listed entities and is working with a firm which provides company secretarial and
accounting services to both listed and unlisted entities.
DIRECTORSHIPS IN OTHER LISTED ENTITIES
Directorships of other listed entities held by Directors of the Company during the last 3 years immediately before
the end of the year are as follows:
Director
Company
Mr B Budiman
Mr M Logan
Mr M Crichton
Mr A Gan
Not Applicable
Not Applicable
Not Applicable
Not Applicable
DIRECTORS’ INTERESTS
Period of directorship
From
-
-
-
-
To
-
-
-
-
The relevant interests of each director in the securities of the Company at the date of this report are as follows:
Director
Shares
Options
Mr B Budiman
Mr M Logan
Mr M Crichton
Mr A Gan
1,000,001
3,200,000
1,000,000
8,500,000
-
-
-
-
DIRECTORS’ MEETINGS
The number of Directors’ meetings held and the number of meetings attended by each of the Directors of the
Company during the year are:
Director
Held
Attended
Board
Mr B Budiman
Mr M Logan
Mr M Crichton
Mr A Gan
PRINCIPAL ACTIVITY
5
5
5
5
5
5
5
3
The principal activity of the Consolidated Entity during the year included, but was not limited to:
Supply of industrial products, including plastic material handling unit load devices;
Supply of building products, including premium volcanic natural stones;
Sourcing, procurement and end-to-end supply chain services; and
-
-
-
- Managed services.
Baumart Holdings Limited 2020 Annual Report
P a g e | 8
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no ordinary fully paid shares issued during the year.
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial year.
Total shares on issue at 30 June 2020 were 144,744,757 fully-paid ordinary shares.
LIKELY DEVELOPMENTS
The Consolidated Entity will continue to develop its principal activities as described on page 8.
DIVIDENDS
No dividend has been declared or paid by the Company to the date of this report.
ENVIRONMENTAL REGULATION
The Directors are not aware of any particular and significant environment regulation under a law of the
Commonwealth, State or Territory relevant to the Consolidated Entity.
CORPORATE GOVERNANCE
The Company’s 2020 Corporate Governance Statement can be
www.baumart.com.au.
found on
the Company’s website:
EVENTS SUBSEQUENT TO REPORTING DATE
Other than the matters described in Note 28 to the financial statements, there has not arisen in the interval between
the end of the year and the date of this report any item, transaction or event of a material and unusual nature likely,
in the opinion of the Directors, to affect significantly the operations of the Consolidated Entity, the results of these
operations, or the state of affairs of the Consolidated Entity in future financial years.
SHARE OPTIONS
Options granted, exercised or lapsed
No options have been granted, exercised or lapsed since the end of the previous financial year and to the date of
this report.
Unissued shares under option
There were no options to subscribe for ordinary fully paid shares at the end of the year or at the date of this report.
Baumart Holdings Limited 2020 Annual Report
P a g e | 9
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
INDEMNIFICATION AND INSURANCE OF OFFICERS
Indemnification
The Company has agreed to indemnify the current Directors and Company Secretary of the Company against all
liabilities to another person (other than the Company or a related body corporate) that may arise from their position
as officers of the Company, except where the liability arises out of conduct involving a lack of good faith. The
agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and
expenses.
Insurance
The Company paid a premium during the year in respect of a director and officer liability insurance policy, insuring
the Directors of the Company, the Company Secretary, and all executive officers of the Company 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 in respect of the directors’ and officers’
liability and legal expenses’ insurance contracts, as such disclosure is prohibited under the terms of the contract.
The Company has not, during or since the year indemnified or agreed to indemnify the auditor of the Company or
any related entity against liability incurred by the auditor. During the year, the Company has not paid a premium in
respect of a contract to insure the auditor of the Company or any related entity.
NON-AUDIT SERVICES
The Company’s auditor, Stantons International, did not provide any non-audit services during the year.
Stantons International Audit and Consulting Pty Ltd
Amounts paid for audit services provided during the year are set out below:
Audit and review of financial reports
Total remuneration for audit services
AUDITOR’S INDEPENDENCE DECLARATION
30 June
2020
$
30 June
2019
$
54,563
39,000
54,563
39,000
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 55.
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 purposes of
taking responsibility on behalf of the Company for all or part of those proceedings.
Baumart Holdings Limited 2020 Annual Report
P a g e | 10
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
REMUNERATION REPORT - AUDITED
The remuneration report, which has been audited, outlines the key management personnel remuneration
arrangements for the Consolidated Entity, in accordance with the requirements of the Corporations Act 2001 and
its Regulations.
For the purposes of this report, key management personnel of the Consolidated Entity are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Consolidated
Entity, directly or indirectly, including any director (whether executive or otherwise) of the Company.
Key management personnel
The following were key management personnel of the Consolidated Entity at any time during the year and unless
otherwise indicated were key management personnel for the entire year:
Name
Position held
Mr B Budiman
Executive Director (appointed 31 October 2014)
Mr M Logan
Executive Director (appointed 8 August 2016)
Mr M Crichton
Non-executive Director (appointed 19 March 2015)
Mr A Gan
Non-executive Director (appointed 19 March 2015)
Principles of remuneration
The remuneration structures explained below are competitively set to attract, motivate and retain suitably qualified
and experienced candidates, reward the achievement of strategic objectives and achieve the broader outcome of
creation of value for shareholders.
The remuneration structures take into account:
•
•
•
the capability and experience of the key management personnel;
the key management personnel’s ability to control the achievement of strategic objectives;
the Consolidated Entity’s performance including:
the growth in share price; and
the amount of incentives within each key management person’s compensation.
o
o
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive directors’ remuneration is
clearly distinguished from that of executives and senior managers. Remuneration is determined by the Board as a
whole as the Company has not yet established a remuneration committee.
Non-executive director remuneration
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors
shall be determined from time to time by shareholders in general meeting. Total remuneration for all non-executive
directors, last voted upon by shareholders at a meeting held in February 2015, is not to exceed $300,000 per
annum. Directors’ fees cover all main board activities and membership of committees if applicable.
Non-executive directors do not receive any retirement benefits, other than statutory superannuation, nor do they
receive any performance-related compensation.
Non-executive directors’ fees as at the reporting date are as follows:
Name
Mr M Crichton
Mr A Gan
Non-executive directors’ fees
excluding superannuation
$20,000 per annum
$20,000 per annum
Please note the above directors are entitled to superannuation on top of the above directors’ fees.
Baumart Holdings Limited 2020 Annual Report
P a g e | 11
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
REMUNERATION REPORT – AUDITED (continued)
Executive remuneration
Remuneration for executives is set out in employment agreements. Details of the employment agreement with the
Executive Director are provided below.
Executive directors may receive performance related compensation but do not receive any retirement benefits, other
than statutory superannuation.
Fixed remuneration
Fixed remuneration consists of base compensation (which is calculated on a total cost basis and includes any FBT
charges related to employee benefits including motor vehicles) as well as employer contributions to superannuation
funds.
Fixed remuneration is reviewed annually by the Board through a process that considers individual and overall
performance of the Consolidated Entity.
Long-term incentive
Long-term incentives (LTI) may be provided to key management personnel in the form of options over ordinary
shares of the Company. LTI are considered to promote continuity of employment and provide additional incentive
to recipients to increase shareholder wealth. Options may only be issued to directors subject to approval by
shareholders in general meeting.
There were no options issued as LTI during the year.
The Company has introduced a policy that prohibits employees and Directors of the Company from entering into
transactions that operate or are intended to operate to limit the economic risk or are designed or intended to hedge
exposure to unvested Company securities. This includes entering into arrangements to hedge their exposure to
LTI granted as part of their remuneration package. This policy may be enforced by requesting employees and
Directors to confirm compliance.
Consolidated Entity performance and link to remuneration
There were no performance related remuneration transactions during the year.
The earnings of the Consolidated Entity for the year are summarised below:
Net loss for the year attributable to owners of the Company
Dividends paid
Change in share price
Share price at beginning of the year
Share price at end of the year
Loss per share
30 June
2020
30 June
2019
($258,643)
Nil
$0.24
$0.20
(0.18 cents)
($555,138)
Nil
$0.22
$0.24
(0.38 cents)
Baumart Holdings Limited 2020 Annual Report
P a g e | 12
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
REMUNERATION REPORT – AUDITED (continued)
Use of remuneration consultants
The Consolidated Entity did not engage the services of a remuneration consultant during the year.
Employment agreement
Executive Directors
The Company has entered into an employment agreement with its Executive Director, Mr Berthus Budiman,
effective from 1 December 2014 (Employment Agreement). The Employment Agreement outlines the
components of remuneration paid to Mr Budiman and will be reviewed on an annual basis. The Employment
Agreement specifies the duties and obligations to be fulfilled by Mr Budiman in the role of Executive Director. The
Company currently pays to Mr Budiman $80,000 per annum (exclusive of statutory superannuation) on the basis
of an approximate 28-hours work week for his services.
In addition, the company has another Executive Director, Mr Matthew Logan, effective from 8 August 2016
(Agreement). The Agreement outlines that remuneration paid to Mr Logan will be reviewed on an annual basis.
Furthermore, the Agreement states that the duties and obligations to be fulfilled by Mr Logan is in the role of
Executive Director, focusing towards the operational side of the company. The Company currently pays to Mr
Logan an annual salary of $100,000 per annum (exclusive of statutory superannuation) for his services.
Either Executive Director or BauMart Holdings may terminate the agreement at any time by giving three months’
written notice to the Company. Executive Directors have no entitlement to termination payment should they
terminate the agreement by written notice. BauMart Holdings may, by giving written notice to either Executive
Directors, immediately terminate the agreement should a number of specified occurrences happen, including a
serious breach of the agreement or serious misconduct. Executive Directors have no entitlement to termination
payment in the event of removal for misconduct.
Termination benefits are within the limits set by the Corporations Act 2001 such that they do not require shareholder
approval.
Remuneration of key management personnel
2020
Short-term
employment
benefits
Salary &
fees1
$
Other
$
Post-
employment
benefits
Superannuation
benefits
$
Share-
based
payments
Options
$
Total
$
Proportion of
remuneration
performance
related %
Executive Directors2
Mr B Budiman
Mr M Logan
2020
2019
2020
2019
Non-Executive Directors2
2020
Mr M Crichton
Mr A Gan
Total
Total
2019
2020
2019
2020
2019
80,000
80,000
100,000
100,000
20,000
20,000
20,000
20,000
220,000
220,000
-
-
-
-
-
-
-
-
-
-
7,600
7,600
9,500
9,500
1,900
1,900
1,900
1,900
20,900
20,900
-
-
-
-
-
-
-
-
-
-
87,600
87,600
109,500
109,500
21,900
21,900
21,900
21,900
240,900
240,900
-
-
-
-
-
-
-
-
-
-
1. Salary & fees include employee benefits paid during the year.
2. The Company paid $14,000 as a premium during the year in respect of a director and officer liability insurance policy.
Baumart Holdings Limited 2020 Annual Report
P a g e | 13
D I R E C T O R S ’ R E P O R T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
REMUNERATION REPORT – AUDITED (continued)
Share-based remuneration
There were no share-based remuneration transactions during the year.
Loans to key management personnel
There were no loans provided to key management personnel of the Consolidated Entity or their close family
members or entities related to them during the year.
Key management personnel equity holdings
Fully paid ordinary shares
The movement during the year in the number of ordinary shares in BauMart Holdings Limited held, directly,
indirectly or beneficially by each key management person, including their related parties, is as follows:
Key management person
Mr B Budiman
Mr M Logan
Mr M Crichton
Mr A Gan
Held at
30 June 2019
Held at date
of
appointment
1,000,001
3,200,000
1,000,000
8,500,000
N/A
N/A
N/A
N/A
Granted as
remuneration
Other
changes
Held at date
of resignation
Held at
30 June 2020
-
-
-
-
-
-
-
-
-
-
-
-
1,000,001
3,200,000
1,000,000
8,500,000
Held at
30 June 2018
Held at date
of
appointment
1,000,001
3,200,000
1,000,000
8,500,000
N/A
N/A
N/A
N/A
Granted as
remuneration
Other
changes
Held at date
of resignation
Held at
30 June 2019
-
-
-
-
-
-
-
-
-
-
-
-
1,000,001
3,200,000
1,000,000
8,500,000
Key management person
Mr B Budiman
Mr M Logan
Mr M Crichton
Mr A Gan
Share options
Directors did not hold any options at the beginning or end of the financial year.
This concludes the remuneration report, which has been audited.
This Directors’ Report is made out in accordance with a resolution of the Directors:
Dated at Perth, Western Australia this 27th day of August 2020
Matthew Logan
Executive Director
Baumart Holdings Limited 2020 Annual Report
P a g e | 14
C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S A N D O T H E R
C O M P R E H E N S I V E I N C O M E
F O R T H E Y E A R E N D E D 3 0 J U N E 2 02 0
Revenue and other income
Sale of goods
Total Revenue
Cost of sales
Total cost of sales
Gross profit
Other revenue
Net finance income / (expense)
Expenses
Corporate and administrative expenses
Operational expenses
Occupancy expenses
Marketing expenses
Depreciation and amortisation expenses
Reversal of Impairment of Plant & Equipment /
(Impairment of Plant & Equipment)
Provision for doubtful debts
Total expenses
Loss before income tax
Income tax benefit/(expense)
Net loss for the year
Note
8 (a)
8 (b)
8 (c)
12 & 13 & 16 (c)
12
30 June
2020
$
4,274,780
4,274,780
(3,541,637)
(3,541,637)
733,143
1,002,050
228,338
(765,806)
(161,742)
(305,554)
(203,673)
(1,005,303)
220,303
(399)
30 June
2019
$
4,325,348
4,325,348
(3,602,625)
(3,602,625)
722,723
226,774
3,780
(639,185)
(186,918)
(466,748)
(192,528)
(243,277)
220,000
241
(2,222,174)
(1,508,415)
(258,643)
(555,138)
7 (a)
-
-
(258,643)
(555,138)
Other comprehensive income
Items that will not be reclassified to profit or loss
Items that may be reclassified subsequently to profit or
loss
Other comprehensive income for the year, net of
tax
-
-
-
-
-
-
Total comprehensive loss
(258,643)
(555,138)
Loss attributable to:
Owners of the Company
Total comprehensive loss attributable to:
Owners of the Company
Basic and diluted loss per share attributable to the
ordinary equity holders of the Company
(258,643)
(258,643)
(258,643)
(258,643)
(555,138)
(555,138)
(555,138)
(555,138)
Basic and diluted loss per share (cents)
26
(0.18)
(0.38)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income
is to be read in conjunction with the accompanying notes.
Baumart Holdings Limited 2020 Annual Report
P a g e | 15
C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N
A S A T 3 0 J U N E 2 0 2 0
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventories
Accounts finance lease receivable
Total current assets
NON-CURRENT ASSETS
Property, plant & equipment
Intangibles
Other non-current assets
Right of use assets
Accounts finance lease receivable
Total non-current assets
Note
25 (c)
9
10
11
21
12
13
19
12 & 16 (a)
21
30 June
2020
$
268,504
813,020
138,657
372,299
1,308,670
2,901,150
286,086
3,583
-
2,281,854
1,168,184
3,739,707
30 June
2019
$
177,592
1,315,652
21,508
396,386
-
1,911,138
300,189
5,117
158,710
-
-
464,016
TOTAL ASSETS
6,640,857
2,375,154
CURRENT LIABILITIES
Trade and other payables
Employee benefits
Current tax liabilities
Lease liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Employee benefits
Lease liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
TOTAL EQUITY
14
15
16 (b)
15
16 (b)
3,039,941
47,869
2,943
726,729
3,817,482
-
1,642,377
1,642,377
897,760
25,520
2,943
-
926,223
9,290
-
9,290
5,459,859
935,513
1,180,998
1,439,641
17
18
8,251,219
(7,070,221)
1,180,998
8,251,219
(6,811,578)
1,439,641
The Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
Baumart Holdings Limited 2020 Annual Report
P a g e | 16
C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y
F O R T H E Y E A R E N D E D 3 0 J U N E 2 02 0
Issued
Capital
$
Accumulated
losses
$
Balance at 30 June 2019
Loss for the year
Total comprehensive loss for the year
Transaction with equity holders, in their capacity as equity
holders
Issue of ordinary shares, net of transaction costs
8,251,219
-
-
-
(6,811,578)
(258,643)
(258,643)
Total
$
1,439,641
(258,643)
(258,643)
-
-
Balance at 30 June 2020
Balance at 30 June 2018
Loss for the Year
Total comprehensive loss for the year
Transaction with equity holders, in their capacity as equity
holders
Issue of ordinary shares, net of transaction costs
8,251,219
(7,070,221)
1,180,998
8,251,219
-
-
-
(6,256,440)
(555,138)
(555,138)
1,994,779
(555,138)
(555,138)
-
-
Balance at 30 June 2019
8,251,219
(6,811,578)
1,439,641
The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
Baumart Holdings Limited 2020 Annual Report
P a g e | 17
C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
Cash flows from operating activities
Receipts in the course of operations
Government grants and tax incentives received
Payments in the course of operations
Interest received
Interest paid
Note
30 June
2020
$
30 June
2019
$
5,747,642
287,089
(5,332,435)
146,601
(21,791)
4,708,081
175,247
(4,982,333)
3,780
-
Net cash inflow / (outflow) from operating activities
25
827,106
(95,225)
Cash flows from investing activities
Purchase of property, plant, and equipment and intangibles
Lease payments received
Deposit on mining-equipment acquired and leased to a third party
Rental deposit used
Net (outflow) from investing activities
(5,595)
199,693
(1,091,329)
158,710
(738,521)
(8,002)
-
-
-
(8,002)
Net increase / decrease in cash and cash equivalents
88,585
(103,227)
Cash and cash equivalents as at beginning of year
Effect of movement in exchange rates on cash held
Cash and cash equivalents as at end of year
177,592
2,327
268,504
280,819
-
177,592
The Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.
Baumart Holdings Limited 2020 Annual Report
P a g e | 18
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
1. REPORTING ENTITY
BauMart Holdings Limited (BauMart or Parent Entity) is a public company limited by shares, whose shares are
publicly traded on the Australian Securities Exchange. The financial statements cover BauMart Holdings Limited as a
consolidated entity consisting of BauMart and its subsidiaries (together referred to as the Consolidated Entity or
Group) for the year ended 30 June 2020.
A description of the nature of the Consolidated Entity's operations and its principal activities are included in the
Directors' Report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 August 2020.
The directors have the power to amend and reissue the financial statements.
The following is a summary of the material accounting policies adopted by the Consolidated Entity in the preparation
of the financial statements. The accounting policies have been consistently applied, unless otherwise stated.
2. BASIS OF PREPARATION
Statement of compliance
These consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001. These consolidated financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).
Basis of measurement
The financial report is prepared on the accruals basis and the historical cost basis, modified, where applicable, by the
measurement at fair value of selected financial assets and financial liabilities.
The functional currency of the Company and subsidiaries are measured using the currency of the primary economic
environment in which the Company and subsidiaries operate; being Australian Dollars and New Zealand Dollars.
However, the financial statements are presented in Australia dollars and all values are rounded to the nearest dollar
unless otherwise stated.
Transactions in foreign currencies are initially recorded in the functional currency by applying exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the balance date. All exchange differences in the consolidated financial statements are
taken to profit or loss.
During the year, comparative figures have been adjusted and/or reclassified where necessary to conform to changes
in presentation for the current year.
Significant accounting policies
Except as noted below, the same accounting policies and methods of computation have been applied by each entity
in the Group and are consistent with those adopted and disclosed in the most recent annual financial report.
Baumart Holdings Limited 2020 Annual Report
P a g e | 19
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
2. BASIS OF PREPARATION (continued)
New and revised Accounting Standards and Interpretations adopted 1 July 2019
The adoption of new and amended standards and interpretations has not resulted in a material change to the financial
performance or position of the Consolidated Entity.
All new and amended Australian Accounting Standards and Interpretations mandatory as at 1 July 2019 to the
Consolidated Entity have been adopted and include:
• AASB 16 Leases
The nature and effect of the adoption of AASB 16: Leases on the Group’s financial statements and discloses
the new accounting policies that have been applied from 1 July 2019, where they are different to those
applied in prior periods.
The Group has adopted AASB 16: Leases using the modified retrospective transition approach.
At inception of a contract the Group assesses if the contract contains or is a lease. If there is a lease present,
a right-of-use asset and a corresponding liability are recognised by the Group where the Group is a lessee.
However, all contracts that are classified as short-term leases (i.e. leases with a remaining lease term of 12
months or less) and leases of low-value assets are recognised as an operating expense on a straight-line
basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at the commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows;
•
•
•
fixed lease payments less any lease incentives;
variable lease payments that depend on index or rate, initially measured using the index or rate at the
commencement date; and
the amount expected to be payable by the lessee under residual value guarantees.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease payments
made at or before the commencement date and any initial direct costs. The subsequent measurement of the right-of-
use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the costs of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset.
Initial Application of AASB 16: Leases
The Group has adopted AASB 16: Leases retrospectively with the cumulative effect of initially applying AASB 16
recognised as 1 July 2019. In accordance with AASB 16, the comparatives for the 2018 reporting period have not
been restated.
The Group has recognised a lease liability and right-of-use asset for all leases (with exception of short-term and low
value leases) recognised as operating leases under AASB 117: Leases where the Group is a lessee.
Lease liabilities are measured at the present value of the remaining lease payments. The Group’s incremental
borrowing rate as at 1 July 2019 was used to discount the lease payments.
The right-of-use assets were measured at their carrying values as if AASB 16 Leases had been applied since the
commencement date but discounted using the Group’s incremental borrowing rate per lease term as at 1 July 2019.
The right-of-use assets have been recognised in the statement of financial position as at 1 July 2019.
Baumart Holdings Limited 2020 Annual Report
P a g e | 20
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
2. BASIS OF PREPARATION (continued)
The following practical expedients have been used by the Group in applying AASB 16 Leases for the first time:
•
•
•
For a portfolio of leases that have reasonably similar characteristics, a single discount rate has been applied.
Leases that have remaining lease term of less than 12 months as at 1 July 2019 have been accounted for
in the same way as short-term lease.
The use of hindsight to determine lease terms or contracts that have options to extend or terminate.
The Group’s weighted average incremental borrowing rate on 1 July 2019 applied to the lease liabilities was 5%.
If the impact of adoption of AASB 16 is material, or the client has a number of leases, consider including the
Interpretation of AASB 16 as part of critical accounting estimates or judgment given the fact that leases involves the
exercise of professional judgment.
The impact of the adoption of AASB 16 on the Consolidated Statement of Financial Position as at
30 June 2020, is an increase in assets (right-of-use asset) of $2,281,854 and an increase in liabilities (lease liability)
of $2,369,106 ($726,729 current & $1,642,377 non-current). The impact on profit from continuing operations for the
year ended would be an increase in depreciation expense of $760,618 an increase in finance costs of $112,815 up to
the life of the lease and a decrease in operating lease expenses of $786,181.
3. USE OF JUDGEMENTS AND ESTIMATES
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements and estimates on historical experience and on other various factors it believes to be reasonable under the
circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements are
outlined below:
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection
rates and specific knowledge of the individual debtors’ financial position.
Impairment of plant and equipment
The Consolidated Entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
in accordance with the accounting policy stated in Note 4. The recoverable amounts of assets have been determined
based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount
rates based on the current cost of capital and growth rates of the estimated future cash flows. Details of assumptions
are included in Note 12.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience. The condition of the assets is
assessed at least once per year and considered against the remaining useful life. Depreciation charges are included
in Note 12.
Carrying value of assets
The glass processing equipment generates rental income from its operator’s usage of the equipment, which has a
direct effect on the carrying value of the asset. The glass processing equipment was divested in July 2020. The glass
processing equipment was fully impaired in the financial year ended 30 June 2018 due to no billing for the gross profit
portion during the financial year ended 30 June 2018. Refer to Note 28.
The plastic injection mould generates income from the units produced, which has a direct effect on the carrying value
of the asset.
Baumart Holdings Limited 2020 Annual Report
P a g e | 21
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
3. USE OF JUDGEMENTS AND ESTIMATES (continued)
Business combinations
Business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities
and contingent liabilities assumed are initially estimated by the Consolidated Entity taking into consideration all
available information at the reporting date. Fair value adjustments on the finalisation of the business combination
accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the
assets and liabilities, depreciation and amortisation reported cash flows.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been applied consistently by the Consolidated Entity throughout the year presented in these financial
statements.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated
Entity only. Supplementary information about the parent entity is disclosed in Note 24.
Basis of consolidation
The consolidated financial statements comprise the financial statements of BauMart Holdings Limited and its
subsidiaries (together referred to as the Consolidated Entity) as at 30 June each year.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an
entity when the Consolidated Entity 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 Consolidated Entity. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the
Consolidated Entity. Losses incurred by the Consolidated Entity are attributed to the non-controlling interest in full,
even if that results in a deficit balance.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The Consolidated Entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business
combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values
of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree, the
equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business
combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Consolidated Entity’s
operating or accounting policies and other pertinent conditions as at the acquisition date.
Baumart Holdings Limited 2020 Annual Report
P a g e | 22
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity
interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will
be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income. If the contingent
consideration is classified as equity, it shall not be remeasured.
The excess of the cost of the business combination over the net fair value of the Consolidated Entity’s share of the
identifiable net assets acquired is recognised as goodwill. If the cost of acquisition is less than the Consolidated Entity’s
share of the net fair value of the identifiable net assets of the subsidiary, the difference is recognised as a gain in the
Consolidated Statement of Comprehensive Income, but only after a reassessment of the identification and
measurement of the net assets acquired.
Going Concern
The financial report has been prepared on a going concern basis, which assumes continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Consolidated Entity incurred a net loss of $258,643 during the year (2019: $555,138). Included in trade and other
receivables at 30 June 2020 is an amount of $813,020 owed to the Consolidated Entity. The ability of the Consolidated
Entity to pay its debts as and when they fall due and to continue as a going concern is dependent upon the
Consolidated Entity’s ability to generate positive cash flows through its existing business and/or raise further equity.
The Directors believe there are reasonable grounds to believe the Consolidated Entity will be able to pay its debts as
and when they become due and payable, and therefore continue as a going concern after consideration of the following
factors:
•
•
•
•
•
The Consolidated Entity has a net deficiency in working capital of $916,332 including cash reserves of
$268,504 at 30 June 2020;
The Consolidated Entity has no loans or borrowings;
The directors are confident that the trade receivables amounts of $813,020 referred to in Note 9 are fully
recoverable following discussions with the debtors;
The budgets and forecasts reviewed and approved by the Directors for the next 12 months anticipate the
business will continue to produce improved results;
The mining-equipment transaction, announced in October 2019, for the 3-year period is expected to begin
generating positive cashflow in FY21 subject to the lessee being able to meet its lease obligations from time
to time; and
• While it is the Consolidated Entity’s intention to be cash flow positive through operations, the Consolidated
Entity may be required to raise additional capital either through equity or debt in order to continue as a going
concern. The Directors are confident that the Consolidated Entity will be able to raise further working capital
either through debt or equity as and when required to continue to support the business.
Income tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
(a) except where the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; and
(b)
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Baumart Holdings Limited 2020 Annual Report
P a g e | 23
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:
(a) except where the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
(b)
in respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Deferred tax assets in respect of tax losses have not been brought to account as it is not considered probable that
future taxable profits will be available against which they could be utilised.
Current and non-current classification
Assets and liabilities are presented in the Consolidated Statement of Financial Position based on current and non-
current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating cycle;
it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the reporting
period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right to defer
the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as
non-current.
Cash and cash equivalents
Cash and cash equivalents in the Consolidated Statement of Financial Position comprise cash at bank and in hand
and short-term deposits with an original maturity 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 purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above.
Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less
an allowance for impairment. Trade receivables are generally due for settlement no more than 90 days from the date
of recognition. Please refer to Note 9 for the ageing of the past due but not impaired.
As per AASB 9, an expected loss model is applied, not an incurred credit loss as per the previous standard applicable
(AASB 139). To reflect changes in credit risk, this expected credit loss model require the Group to account for expected
credit loss since initial recognition. The Group recognises a loss allowance for expected credit losses on trade and
other receivables using simplified approach, which does not require tracking of changes in credit risk at every reporting
period, but instead requires the recognition of lifetime expected credit loss at all times. In measuring the expected
credit loss, a provision matrix for trade receivables was used taking into consideration various data to get to an
expected credit loss.
Baumart Holdings Limited 2020 Annual Report
P a g e | 24
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Provisions and employee benefits
Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the reporting date.
Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including annual leave expected to be settled within 12 months of the reporting date
are recognised in respect of employees' services up to the reporting date. They are measured at the amounts expected
to be paid when the liabilities are settled. Expenses for sick leave are recognised when the leave is taken and are
measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date. Consideration is given to expected
future wage and salary levels, experience of employee departures, and periods of service. Expected future payments
are discounted using market yields at the reporting date on national government bonds with terms to maturity and
currencies that match, as closely as possible, the estimated future cash outflows.
(iii) Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
(iv) Share-based payments
The Consolidated Entity may provide benefits to employees (including Directors) and consultants of the Consolidated
Entity in the form of share based payment transactions, whereby services are rendered in exchange for shares or
rights over shares (“equity-settled transactions”). The cost of these equity-settled transactions with employees and
consultants is measured by reference to the fair value at the date at which they are granted. The fair value is
determined by an internal valuation using Black-Scholes or Binomial option pricing models.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the relevant recipients become fully
entitled to the award (“vesting date”). The cumulative expense recognised for equity-settled transactions at each
reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of
awards that, in the opinion of the Directors of the Consolidated Entity, will ultimately vest. This opinion is formed based
on the best available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon
a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award
is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a modification of the original award.
Trade and other payables
Trade and other payables are carried at amortised cost. They represent liabilities for goods and services provided to
the Consolidated Entity prior to the end of the year that are unpaid and arise when the Consolidated Entity becomes
obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured
and are usually paid within 30 days of recognition.
Baumart Holdings Limited 2020 Annual Report
P a g e | 25
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST
is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the ATO is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a net basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
Property, plant and equipment
Items of property, plant and equipment are measured at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Plant and equipment is depreciated using the straight line and units of production methods over the estimated useful
lives.
Depreciation rates used for each class of assets vary to the estimated useful lives at the time of acquisition, and are
typically:
Class of fixed asset
Depreciation rates
Method
Plant and equipment
- Glass Processing Equipment
Plastic Injection Mould
-
Motor vehicles
Office equipment
Pooled equipment
Fixtures and fittings
10%
Variable
33%
20% - 50%
20%
20% - 25%
Straight line
Units of production
Straight line
Straight line
Straight line
Straight line
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained
earnings.
Impairment of assets
At the end of each reporting period, the Consolidated Entity assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal sources of information. If such
an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset,
being the higher of the asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any
excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, in
accordance with AASB 136: Impairment of Assets unless the asset is carried at a revalued amount in accordance with
another Standard (e.g. in accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any
impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Entity estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not
yet available for use.
Baumart Holdings Limited 2020 Annual Report
P a g e | 26
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Goodwill
Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business
combination over the Consolidated Entity’s interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not
amortised. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances
indicate that the carrying value may be impaired.
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit
from the combination’s synergies. Impairment is determined by assessing the recoverable amount of the cash
generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than
the carrying amount, an impairment loss is recognised. Impairment losses for goodwill are not subsequently reversed.
Inventory
Finished goods are stated at the lower of cost and net realisable value. Cost in relation to finished goods comprises
delivery costs, direct labour and import duties or other taxes. Costs of purchased inventory are determined after
deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale. No provision for obsolete stock.
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not
the legal ownership, are transferred to the company are classified as finance leases. Finance leases are capitalised
by recording an asset and a liability at the lower of the amount equal to the fair value of the leased property or the
present value of the minimum lease payments, including any guaranteed residual values. Lease payments are
allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over their estimated useful lives or the lease term. Lease
payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as
expenses on a straight-line basis over the lease term. Lease incentives under operating leases are recognised as a
liability and amortised on a straight-line basis over the life of the lease term.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs
incurred. Borrowings are subsequently measured at amortised cost. Any difference between proceeds (net of
transaction costs) and the redemption amount is recognised in profit and loss over the period of borrowings using the
effective interest method. Borrowings are removed from the 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 assumed, is recognised in profit and loss as other income or finance costs.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date,
the loans or borrowings are classified as non-current.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed
in the period in which they are incurred.
Fair value measurement
A number of the Consolidated Entity’s accounting policies and disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. Where applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific to that asset or liability.
Baumart Holdings Limited 2020 Annual Report
P a g e | 27
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown
in equity as a deduction, net of tax, from the proceeds.
Earnings per share
Basic earnings per share is calculated by dividing the net earnings attributable to members of the Company for the
reporting period by the weighted average number of ordinary shares of the Company.
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions
of the financial instrument. Financial instruments (except for trade receivables) are measured initially at fair value
adjusted by transactions costs, except for those carried “at fair value through profit or loss”, in which case transaction
costs are expensed to profit or loss. Where available, quoted prices in an active market are used to determine the fair
value. In other circumstances, valuation techniques are adopted. Subsequent measurement of financial assets and
financial liabilities are described below.
Trade receivables are initially measured at the transaction price if the receivables do not contain a significant financing
component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or
when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when
it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement
Financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the
transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for
transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging
instruments, are classified into the following categories upon initial recognition:
•
•
•
amortised cost;
fair value through other comprehensive income (FVOCI); and
fair value through profit or loss (FVPL).
Classifications are determined by both:
•
•
The contractual cash flow characteristics of the financial assets; and
The entities business model for managing the financial asset.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated
as FVPL):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual
cash flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Baumart Holdings Limited 2020 Annual Report
P a g e | 28
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income (OCI)
The Group measures debt instruments at fair value through other comprehensive income if both of the following
conditions are met:
•
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding; and
The financial asset is held within a business model with the objective of both holding to collect contractual
cash flows and selling the financial asset.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses
or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets
measured at amortised cost. The remaining fair value changes are recognised in OCI.
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial Instruments:
Presentation and are not held for trading.
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated
upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the
Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses
recognised in profit or loss.
All interest-related charges and, if applicable, gains and losses arising on changes in fair value are recognised in profit
or loss.
Impairment
From 1 July 2018, the Group assesses on a forward-looking basis the expected credit losses associated with its debt
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there
has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach
permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the
receivables.
Baumart Holdings Limited 2020 Annual Report
P a g e | 29
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition
The Consolidated Entity generates its revenue from the following streams:
Sale of goods
The Group generates revenue from the sale of goods, which is recognised at a point in time when the goods are
delivered, the legal title has passed and/or the customer has accepted the goods. The amount of revenue recognised
for goods delivered is adjusted by expected returns.
The Group does not provide or offer any warranties for sale of goods.
Equipment rental
The division receives an annual fixed fee and a variable component contingent on gross profit performance of the
operator of the glass processing equipment. Revenue is deferred and recognised as revenue across the remaining
contract term. Consideration that is variable and uncertain continues to be recognised when the activity occurs.
Service revenue
Revenue from the provision of services is recognised in the period in which the services are rendered. The
performance obligation is the supply of services over the contractual terms. The terms represent distinct contracted
services that are substantially the same with the same pattern of transfer, such that they would be recognised over
time.
Adoption of new or revised accounting standards and interpretations
The Consolidated Entity has considered the implications of new and amended Accounting Standards applicable for
annual reporting periods beginning after 1 January 2020 but determined that their application to the financial
statements is either not relevant or not material.
Baumart Holdings Limited 2020 Annual Report
P a g e | 30
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
5. FINANCIAL RISK MANAGEMENT
Overview
Risk management is carried out under policies approved by the Board of Directors. The Board provides written
principles for overall risk management, as well as policies covering specific areas such as foreign exchange risk,
interest rate risk, credit risk, use of derivative financial instruments and non-derivative financials instruments and
investment of excess liquidity.
Financial risk management objectives
The Board monitors and manages the financial risk relating to the operations of the Consolidated Entity. The
Consolidated Entity’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (interest
rate risk, and currency risk). The overall risk management strategy focuses on managing these risks and seeks to
minimise potential adverse effects on the financial performance of the Consolidated Entity. Risk management is carried
out under the direction of the Board.
The Consolidated Entity holds the following financial instruments as at the reporting date:
Financial assets
Cash and cash equivalents
Restricted cash
Accounts finance lease receivable
Trade receivables1
Financial liabilities
Trade and other payables
Lease liabilities
1. Refer to Note 9
30 June
2020
$
268,504
-
2,476,854
813,020
3,558,378
3,039,941
2,369,106
5,409,047
30 June
2019
$
177,592
158,710
1,315,652
1,651,954
870,760
-
870,760
Baumart Holdings Limited 2020 Annual Report
P a g e | 31
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
5. FINANCIAL RISK MANAGEMENT (continued)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while optimising the
return.
Currency risk
The Consolidated Entity is exposed to currency risk on overseas purchases that are denominated in a currency other
than the functional currency of the Consolidated Entity, being the Australian dollar. The Consolidated Entity had the
following exposures as at the reporting date:
30 June 2020
Currency
Receivables
Sensitivity
Payables
Sensitivity
+10%
-10%
+10%
-10%
$1,705,330
$1,875,863
$1,534,797
$1,017,745
$1,119,520
$915,971
$9,820
$10,802
$8,838
$6,876
$7,563
$6,188
$803,836
-
-
$1,462,879
-
-
USD
NZD
AUD
30 June 2019
Currency
Receivables
Sensitivity
Payables
Sensitivity
+10%
-10%
+10%
-10%
USD
NZD
AUD
-
-
$1,315,652
-
-
-
-
-
-
$6,010
$6,611
$5,409
-
$844,707
-
-
-
-
The Consolidated Entity does not have any overseas borrowings. The Consolidated Entity does not currently hedge
any of its estimated foreign currency exposure in respect of forecast sales and purchases.
Baumart Holdings Limited 2020 Annual Report
P a g e | 32
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
5. FINANCIAL RISK MANAGEMENT (continued)
Interest rate risk
The following table sets out the interest rates applicable to financial instruments that are exposed to interest rate risk:
Consolidated
Financial assets
Cash and cash equivalents
Restricted cash
Accounts finance lease
receivable
Trade receivables
Total financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Total financial liabilities
Consolidated
Financial assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Total financial liabilities
Fixed
interest
rate
30 June
2020
$
200,037
-
2,476,854
-
2,676,891
100,874
2,369,106
2,469,980
Fixed
interest
rate
30 June
2019
$
150,047
158,710
-
308,757
Non-
interest
bearing
30 June
2020
$
68,467
-
-
813,020
881,487
2,939,067
-
2,939,067
Non-
interest
bearing
30 June
2019
$
27,545
-
1,315,652
1,343,197
Total
30 June
2020
$
268,504
-
2,476,854
813,020
3,558,378
3,039,941
2,369,106
5,409,047
Total
30 June
2019
$
177,592
158,710
1,315,652
1,651,954
-
-
870,760
870,760
870,760
870,760
Weighted
average
interest
rate
30 June
2020
%
0.05%
0.00%
14.32%
8.00%
5.00%
Weighted
average
interest
rate
30 June
2019
%
0.80%
2.50%
There is no interest rate applicable on trade receivables or trade and other payables. The Consolidated Entity has no
borrowings. Management believes a change of 5% in the interest rate will not have a material effect on the result of
operations or equity of the Consolidated Entity.
Credit risk
Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Consolidated Entity’s receivables from
customers.
Baumart Holdings Limited 2020 Annual Report
P a g e | 33
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
5. FINANCIAL RISK MANAGEMENT (continued)
Trade and other receivables
The Consolidated Entity’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. The Consolidated Entity regularly assesses customers’ creditworthiness. The Consolidated Entity is reliant
on one customer in respect of the Equipment Investments segments.
The Consolidated Entity’s maximum exposure to credit risk at the reporting date was:
5.
Financial assets
Cash and cash equivalents
Restricted cash
Accounts finance lease receivable
Trade receivables
The credit quality is assessed and monitored as follows:
Credit quality of financial assets
At 30 June 2020
Cash and cash equivalents
Restricted cash
Accounts finance lease receivable
Trade receivables – current
At 30 June 2019
Cash and cash equivalents
Restricted cash
Trade and other receivables – current
30 June
2020
$
268,504
-
2,476,854
813,020
3,558,378
Equivalent
S&P rating1
AA-
Internally
rated2
No default
268,504
-
-
268,504
177,592
158,710
-
336,302
-
-
2,476,854
813,020
3,289,874
-
-
1,315,652
1,315,652
30 June
2019
$
177,592
158,710
-
1,315,652
1,651,954
Total
268,504
-
2,476,854
813,020
3,558,378
177,592
158,710
1,315,652
1,651,954
The Consolidated Entity receives interest on its cash management deposits based on daily balances and at balance
date was exposed to a variable interest rate of 0.05% per annum (2019: 0.80% per annum). The Consolidated
Entity’s operating accounts do not attract interest.
1. The equivalent S&P rating of the financial assets represents that rating of the counterparty with whom the financial asset is
held rather than the rating of the financial asset itself.
2. Trade and other receivables represent sale of goods and rental income receivables (Refer Note 9)
Allowance for impairment loss
A provision for impairment loss is recognised when there is objective evidence that an individual receivable is
impaired.
There were no balances within trade and other receivables containing amounts that were impaired during
30 June 2020. The Consolidated Entity considered balances within trade and other receivables as impaired after
reviewing credit terms of customers based on collection practices. Refer to Note 9 for details of past due receivables.
Fair value measurement of financial instruments
Note 4 outlines the Consolidated Entity’s approach to fair value assessment of its assets and liabilities. The carrying
amounts of the Consolidated Entity’s financial instruments are assumed to approximate their fair value due to either
their short term nature or their terms and conditions.
Baumart Holdings Limited 2020 Annual Report
P a g e | 34
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
5. FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk
Liquidity risk arises from the financial liabilities of the Consolidated Entity and the Consolidated Entity’s subsequent
ability to meet their obligations to repay their financial liabilities as and when they fall due.
Ultimate responsibility for liquidity risk management rests with the Board of Directors. The Board has determined an
appropriate liquidity risk management framework for the management of the Consolidated Entity’s short, medium and
long-term funding and liquidity management requirements. The Consolidated Entity manages liquidity risk by
maintaining adequate reserves and continuously monitoring budgeted and actual cash flows and matching the maturity
profiles of financial assets, expenditure commitments and liabilities.
6. AUDITOR’S REMUNERATION
During the year, the following fees were paid or payable for services
provided by the auditor of the Company and its related practices:
Audit services – Stantons International Audit and Consulting Pty Ltd
Audit and review of financial statements
30 June
2020
$
30 June
2019
$
54,563
39,000
54,563
39,000
Baumart Holdings Limited 2020 Annual Report
P a g e | 35
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
7. INCOME TAX
(a) Income tax expense
(b) Numerical reconciliation between tax benefit and pre-tax net loss
30 June
2020
$
-
30 June
2019
$
-
Loss before income tax benefit
(258,643)
(555,138)
Income tax calculated at 27.5% (30 June 2019: 27.5%)
(71,127)
(152,663)
Tax effect of:
Non-deductible expenses and temporary differences
Section 40-880 deduction
Future income tax benefit not brought to account
Higher foreign tax rate
Income tax expense
(c) Tax losses
(106,632)
(7,377)
185,161
(25)
-
(104,967)
(19,237)
276,867
-
Unused tax losses for which no deferred tax asset has been recognised
(as recovery is currently not probable)
Potential at 27.5% (30 June 2019: 27.5%)
920,927
910,181
(d) Unrecognised temporary differences
Temporary differences for which deferred tax assets have not been
recognised at 27.5% (30 June 2019: 27.5%):
Provisions and diminution
Section 40-880 deduction
-
-
Unrecognised deferred tax assets relating to the above temporary
differences
(e) Tax rates
The potential tax benefit at 30 June 2020 in respect of tax losses not
brought into account has been calculated at 27.5% (30 June 2019:
27.5%)
344,812
7,119
351,931
366,653
14,495
381,148
Baumart Holdings Limited 2020 Annual Report
P a g e | 36
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
8. REVENUE AND EXPENSES
(a) Other revenue
Rental from sublet of property
R&D refund
Sundry revenue
Rental of equipment
ATO Cashflow Boost
(b) Net finance income / (expense)
Interest income
Interest income from finance lease
Interest expense
Interest expense from finance lease
Interest expense from unwinding of interest
(Note 16 (d))
(c) Occupancy expenses
Rental expense for warehouse
Rental expense for office premises
Rental income from sublease of premises
9. TRADE AND OTHER RECEIVABLES
Current
Trade receivables – normal activities
30 June
2020
$
598,898
253,251
25,432
50,000
74,469
1,002,050
3,448
381,296
(1,610)
(41,981)
(112,815)
228,338
226,843
78,711
-
305,554
30 June
2019
$
-
175,247
1,527
50,000
-
226,774
3,780
-
-
-
-
3,780
971,540
76,662
(581,454)
466,748
813,020
813,020
1,315,652
1,315,652
The Consolidated Entity’s exposure to credit risk related to trade and other receivables is disclosed in Note 5.
Past due but not impaired
Customers with balances past 90 days due but without provision for impairment of receivables amount to $72,373
as at 30 June 2020 (30 June 2019: $627,704). Although past 90 days overdue, as at 27 August 2020 the Group
has received $500,644 from its major customers. As a result, management has reviewed and assessed that no
provision for impairment will be provided.
The Consolidated Entity did not consider a credit risk on the aggregate balances after reviewing credit terms of
customers based on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
1-30 days
31-60 days
61-90 days
90+ days
463,616
139,409
137,622
72,373
813,020
379,621
199,110
109,217
627,704
1,315,652
Baumart Holdings Limited 2020 Annual Report
P a g e | 37
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
10. OTHER CURRENT ASSETS
Current
Deposits
Prepaid insurance
Prepaid inventory
Prepaid services
Sundry – ATO Cashflow Boost
Interest yet to be paid
11. INVENTORIES
Materials handling supply
Building materials supply
Source and Procure supply
30 June
2020
$
20,699
6,115
133
4,260
27,329
80,121
138,657
310,639
58,660
3,000
372,299
30 June
2019
$
8,784
1,213
-
11,511
-
-
21,508
245,872
150,514
-
396,386
Baumart Holdings Limited 2020 Annual Report
P a g e | 38
At 30 June 2020
Cost
Accumulated
depreciation
Impairment provision
Net book amount
At 30 June 2019
Cost
Accumulated
depreciation
Impairment provision
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
12. PROPERTY, PLANT & EQUIPMENT
Plant &
equipment
$
Furniture
& fittings
$
Office
equipment
$
Pooled
Assets
$
Right of
use asset
$
Total
$
2,580,636
22,706
31,649
3,796
3,042,472
5,681,259
(1,278,588)
(1,038,821)
263,227
(11,580)
-
11,126
(22,593)
-
9,056
(1,119)
-
2,677
(760,618)
-
2,281,854
(2,074,498)
(1,038,821)
2,567,940
2,580,636
22,706
24,415
2,285
(1,044,879)
(1,259,124)
(7,964)
-
(17,341)
-
(545)
-
-
-
-
-
2,630,042
(1,070,729)
(1,259,124)
300,189
Net book amount
276,633
14,742
7,074
1,740
Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the
current financial year.
Year ended 30 June
2020
Opening net book
amount
Additions
Depreciation charges
Impairment reversal
Disposals
Closing net book
amount
Year ended 30 June
2019
Opening net book
amount
Additions
Depreciation charges
Impairment charge
Disposals
Closing net book
amount
276,633
-
(233,709)
220,303
-
14,742
-
(3,616)
-
-
7,074
7,234
(5,252)
-
-
1,740
1,5111
(574)
-
-
-
3,042,472
(760,618)
-
-
300,189
3,051,217
(1,003,769)
220,303
-
263,227
11,126
9,056
2,677
2,281,854
2,567,940
290,146
-
(233,513)
220,000
-
17,077
1,089
(3,424)
-
-
7,533
4,621
(5,080)
-
-
2,197
-
(457)
-
-
276,633
14,742
7,074
1,740
-
-
-
-
-
-
316,953
5,710
(242,474)
220,000
-
300,189
1This amount of $1,511 relates to amounts previously accounted for as inventory and reallocated to pooled assets.
Baumart Holdings Limited 2020 Annual Report
P a g e | 39
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
12. PROPERTY, PLANT & EQUIPMENT (continued)
Impairment Test for Plant & Equipment
At each reporting date, the Consolidated Entity assesses whether there is any indication that an asset may be
impaired. Where an indicator of impairment exists, the Consolidated Entity makes a formal estimate of the
recoverable amount.
Where the carrying value of an asset exceeds its recoverable amount, the asset is considered to be impaired and
is written down to its recoverable amount. The impairment loss is recognised in profit or loss in the reporting period
in which the write-down occurs.
The Consolidated Entity has assessed the plant and equipment of plastic injection mould and impairment will be
considered if the present value of the expected cash flows is less than the carrying amount. Using the low and high
estimate discount factor, the recoverable amount has exceeded the carrying amount of the equipment. Therefore,
there will be no impairment of the plant and equipment of plastic injection mould for the year ended 30 June 2020.
Please refer to Note 28 for more information on the glass processing plant and equipment.
13. INTANGIBLES
Trademarks
Carrying amount at the beginning of the year
Amortisation
Net carrying value
Computer Software
Carrying amount at the beginning of the year
Additions
Amortisation
Net carrying value
Gross
Additions
Accumulated amortisation
Net carrying value
14. TRADE AND OTHER PAYABLES
Current
Trade payables – normal activities
Trade payables – supplier of mining equipment
Other payables
Other payables – accrued engineer fees
Other payables – accrued interest
21
21
21
The ageing of the past due trade payables – normal activities are as follows:
1-30 days
31-60 days
61-90 days
90+ days
30 June
2020
$
30 June
2019
$
3,016
(614)
2,402
2,101
-
(920)
1,181
8,412
-
(4,829)
3,583
1,434,395
1,297,159
131,250
76,263
100,874
3,039,941
504,243
470,053
249,797
210,302
1,434,395
3,628
(612)
3,016
-
2,292
(191)
2,101
6,120
2,292
(3,295)
5,117
844,707
-
53,053
-
-
897,760
412,181
240,199
164,456
27,871
844,707
The Consolidated Entity’s exposure to liquidity risk related to trade and other payables is disclosed in Note 5.
Baumart Holdings Limited 2020 Annual Report
P a g e | 40
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
15. EMPLOYEE BENEFITS
Current
Liability for annual leave and other entitlements
Non-Current
30 June
2020
$
47,869
30 June
2019
$
25,520
Liability for long service leave and other entitlements
-
9,290
16. LEASES
(a) Right-of-use assets
Rental Property balance at 1/7/2019
Additions
Depreciation
Rental Property balance at 30/6/2020
(b) Lease liabilities
Current
Non-current
-
3,042,472
(760,618)
2,281,854
726,729
1,642,377
2,369,106
(c) Depreciation charge of right-of-use asset
Depreciation expense per AASB 16
12
760,618
760,618
(d) Interest expense on lease liabilities (under net finance
income)
Interest expense from the unwinding of interest per AASB 16
8(b)
Total yearly cash outflows for leases
112,815
112,815
873,433
-
-
-
-
-
-
-
-
-
-
-
-
The sublet of the leased property has been treated as an operating lease and as a result of the above, the Group
receives rental income as per Note 8 (a).
17. ISSUED CAPITAL
144,744,757 fully paid ordinary shares (30 June 2019: 144,744,757)
8,251,219
8,251,219
(a) Ordinary shares
The following movements in ordinary share capital occurred during the year:
30 June
2020
number
30 June
2019
number
30 June
2020
$
30 June
2019
$
Balance at beginning of the year
144,744,757
144,744,757
8,251,219
8,251,219
Share issues
Balance at the end of the year
-
144,744,757
-
-
-
144,744,757
8,251,219
8,251,219
Ordinary shares entitle the holder to participate in dividends and the proceeds from winding up of the Company in
proportion to the number and amounts paid on the shares held.
On a show of hands every holder of ordinary securities present at a shareholder meeting in person or by proxy, is
entitled to one vote, and upon a poll each share is entitled to one vote.
Baumart Holdings Limited 2020 Annual Report
P a g e | 41
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
17. ISSUED CAPITAL (continued)
(b) Options
Options granted, exercised or lapsed
No options have been granted, exercised or lapsed since the end of the previous financial year and to the date of this
report.
Unissued shares under option
There were no options to subscribe for ordinary fully paid shares at the end of the year or at the date of this report.
(c) Capital risk management
The Consolidated Entity's objectives when managing capital is to safeguard its ability to continue as a going concern,
so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position although there is no formal policy
regarding gearing levels.
There were no changes in the Consolidated Entity’s approach to capital management during the year. The
Consolidated Entity is not subject to any externally imposed capital requirements.
18. ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Net loss for the year
Accumulated losses at the end of the year
19. OTHER NON-CURRENT ASSETS
Security Bond
30 June
2020
$
30 June
2019
$
(6,811,578)
(258,643)
(6,256,440)
(555,138)
(7,070,221)
(6,811,578)
-
158,710
The Consolidated Entity previously had a security bond in place amounting to $158,710 in favour of its landlord which
was called in to recover earlier non-payment of rent and outgoings.
20. CONTINGENCIES AND COMMITMENTS
The Consolidated Entity does not have any contingent liabilities or commitments at balance and reporting dates.
Baumart Holdings Limited 2020 Annual Report
P a g e | 42
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
21. FINANCE LEASE RECEIVABLE
During the year ended 30 June 2020 the Consolidated Entity secured a finance lease contract with Newfield
Resources Limited (ASX:NWF) (Newfield) to supply various underground mining equipment, including 2x Drill Rig
Jumbos, 2x Haul trucks and 2x LHD Loaders. The Consolidated Entity’s wholly owned subsidiary, Buildmart Services
Pty Ltd (Buildmart) has sourced and financed the purchase of mining equipment with a total value of ~AUD$3.6m.
As at 30 June 2020, Buildmart has a liability to pay to the manufacturer of $1,297,159 and accrued interest payable
of $100,874 at a rate of 8% on the 70% balance to be paid over 12 months (refer Note 14).
The initial contract term is for 3 years, subject to early termination and purchase options with an implied interest rate
of 14% per annum. The contract, in the form of a finance lease, will generate approximately AUD$1.2m in interest
income over its 3 year tenure.
Under the contract, Buildmart will provide service and maintenance support for the first 12 months. Newfield will
assume responsibility for servicing and maintenance of the equipment for the remainder of the term.
The equipment cost of ~AUD$2.3m has been funded through existing working capital and a 12 month accounts
payable credit term has been obtained from the manufacturer to assist with ongoing working capital requirements.
For accounting purposes, the transaction has been recorded as a finance lease. A finance lease receivable of
$2,476,854 is comprised of current and non-current assets of $1,308,670 and $1,168,184 respectively. Included in
$1,308,670 is the accrued interest receivable from Newfield of $219,753. The Consolidated Entity has not recognised
an asset since all risks and rewards have been transferred to Newfield at the commencement of the lease.
Due to supply chain delays, the instalments to be paid to the supplier in China were re-negotiated to commence from
March 2020 which was previously due to commence in January 2020. Additionally, the service and maintenance
support contract of which $76,263 was accrued (refer Note 14) has been put-on hold until further notice, due to the
COVID-19 pandemic travel restrictions.
The Consolidated Entity recognised interest income from the finance lease of $381,296 as at 30 June 2020.
22. KEY MANAGEMENT PERSONNEL DISCLOSURES
Compensation
The aggregate compensation made to Directors and other members of Key Management Personnel of the
Consolidated Entity during the year is set out below:
Short-term employee benefits
Post-employment benefits
30 June
2020
$
220,000
20,900
240,900
30 June
2019
$
220,000
20,900
240,900
Baumart Holdings Limited 2020 Annual Report
P a g e | 43
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
23. RELATED PARTY TRANSACTIONS
(a) Parent entity
BauMart Holdings Limited is the parent entity (Company).
(b) Subsidiaries
The Company’s interests in its subsidiaries for the year are set out below. Unless otherwise stated, the subsidiaries
have share capital consisting solely of ordinary shares that are held directly by the Company, and the proportion of
ownership interest held equals the voting rights held by the Company. The country of incorporation is also its principal
place of business.
Name of entity
Country of
incorporation
Ownership interest as at 30
June 2020
Equity
holding
2020
Equity
holding
2019
Buildmart Services Pty Ltd
Australia
100%
100%
BauMax Pty Ltd
Australia
100%
Eco Pallets Pty Ltd
Australia
Eco Pallets NZ Limited
New Zealand
100%
100%
100%
100%
Nil
Principal activities
Supply and installation of building
materials
IT related services
Materials handling product supply
Materials handling product supply
Loans made by the Company to its wholly-owned subsidiaries are contributed to meet required expenditure payable
on demand and are not interest bearing.
Subsequent to 30 June 2020, BauMax Pty Ltd was deregistered on 15 July 2020.
(c) Key management personnel compensation
The following were key management personnel of the Consolidated Entity at any time during the year and unless
otherwise indicated were key management personnel for the year:
Mr Berthus Budiman (Executive Director)
Mr Matthew Logan (Executive Director)
Mr Michael Crichton (Non-executive Director)
Mr Anson Gan (Non-executive Director)
Disclosures relating to key management personnel are set out in Note 22.
Baumart Holdings Limited 2020 Annual Report
P a g e | 44
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
24. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity for year ended 30 June 2020.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Total equity
30 June
2020
$
(644,520)
(644,520)
30 June
2019
$
(869,256)
(869,256)
459,392
1,080,144
3,345,769
1,311,224
1,219,541
2,861,917
182,852
182,852
8,251,219
(7,767,367)
8,251,219
(7,122,847)
483,852
1,128,372
(a) Guarantees entered into by the parent entity
Guarantees provided in prior year has been called upon this year as per Note 19.
(b) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities at year end.
(c) Contractual commitments for capital expenditure
The parent entity did not have any commitment in relation to capital expenditure contracted but not recognised
as liabilities as at balance date.
25. RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES
(a) Cash flows from operating activities
(Loss) for the year
Adjustments of non-cash/non-operating items:
Depreciation and amortisation
Impairment of plant and equipment / (reversal)
Doubtful debts expense
Net foreign exchange (gain)
Operating loss before changes in working capital and provisions
Change in trade and other receivables
Changes in inventories
Changes in prepayments
Change in trade and other payables
Change in employee benefits
Net cash provided by / (used in) operating activities
30 June
2020
$
30 June
2019
$
(258,643)
(555,138)
1,005,303
(220,303)
399
28,976
555,732
(502,632)
(24,087)
117,149
667,885
13,059
827,106
243,277
(220,000)
-
-
(531,861)
(250,249)
588,145
33,372
53,671
11,697
(95,225)
Baumart Holdings Limited 2020 Annual Report
P a g e | 45
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
25. RECONCILIATION OF CASH FLOWS USED IN OPERATING ACTIVITIES (continued)
(b) Non-cash investing and financing activities
There were no non-cash investing and financing activities during the year.
(c) Cash and cash equivalents
Cash on hand
Cash in bank
Cash and cash equivalents
26. EARNINGS/(LOSS) PER SHARE
Basic and diluted earnings/(loss) per share
30 June
2020
$
1,167
267,337
268,504
30 June
2019
$
1,141
176,451
177,592
The calculation of basic loss per share at 30 June 2020 was based on the following:
Loss attributable to ordinary shareholders
Net loss for the year attributable to owners of the Company
(258,643)
(555,138)
Weighted average number of ordinary shares
Balance at beginning of year
Balance at end of year
Number
Number
144,744,757
144,744,757
144,744,757
144,744,757
Diluted earnings/(loss) per share must be calculated where potential ordinary shares on issue are dilutive. There are
no potential ordinary shares outstanding as set out in Note 17.
27. SEGMENT INFORMATION
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors (chief operating decision makers) in assessing performance and determining the
allocation of resources. The Consolidated Entity is managed primarily on the basis of product category and service
offerings since the diversification of the Consolidated Entity’s operations inherently have notably different risk profiles
and performance assessment criteria. Operating segments are therefore determined on the same basis. Reportable
segments disclosed are based on aggregating operating segments where the segments are considered to have
similar economic characteristics and are also similar with respect to the products sold and/or services provided by
that segment.
Types of products and services by segment
Materials Handling Supply
The Materials Handling Supply division is focused on the Australia and New Zealand wide supply of plastic materials
handling unit load devices, such as plastic pallets and plastic crates.
Building Materials Supply
The Building Materials Supply division is focused on the supply and installation of building products and materials
procured from local and offshore suppliers to both the residential and commercial property construction markets.
Source & Procurement Supply
The Sourcing and Procurement division is focused on providing specialised procurement solutions to a broad range
of sectors.
Equipment Investments
The Equipment Investments division is focused on acquiring specialised equipment. The business model
contemplates the acquisition of specialised equipment with the intention of leasing the equipment to specialised
operators, providing the Consolidated Entity with lease income. This segment will be amended in FY21 following the
sale of the glass processing equipment.
Baumart Holdings Limited 2020 Annual Report
P a g e | 46
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
27. SEGMENT INFORMATION (continued)
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent to those adopted in
the annual financial statements of the Consolidated Entity.
All inter-segment loans payable and receivable are eliminated on consolidation for the Consolidated Entity’s financial
statements.
Segment Assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of
economic value from the asset. In the majority of instances segment assets are clearly identifiable on the basis of
their nature and physical location.
Segment Liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Consolidated Entity
and are not allocated. Segment liabilities include trade and other payables and certain borrowings.
Unallocated items
Items of revenue, expenses, assets and liabilities which are not considered part of the core operations of any segment
are allocated to Corporate and Administrative:
Segment Revenue
Segment Results
Segment Assets
Segment Liabilities
30 June
2020
$
30 June
2019
$
30 June
2020
$
30 June
2019
$
30 June
2020
$
30 June
2019
$
30 June
2020
$
30 June
2019
$
$3,954,692
$3,492,297
$203,860
$203,755
$1,278,783
$1,047,955
$1,114,575
$749,121
$205,272
$833,051
($800,943)
($75,630)
$2,331,121
$328,631
$2,861,918
$183,451
$496,112
-
$331,348
-
$2,572,202
-
$1,480,423
$50,000
$50,000
$39,080
$30,000
$58,016
$68,937
-
-
-
$799,092
$762,008
($31,988)
($713,263)
$400,735
$929,631
$2,943
$2,941
$5,505,168
$5,137,356
($258,643)
($555,138)
$6,640,857
$2,375,154
$5,459,859
$935,513
Materials
Handling
Supply
Building
Materials
Supply
Source &
Procurement
Supply
Equipment
Investments
Corporate &
Administrative
Consolidated
Entity (Total)
Baumart Holdings Limited 2020 Annual Report
P a g e | 47
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 0
28. EVENTS SUBSEQUENT TO REPORTING DATE
On 20th July 2020, the Company obtained shareholder approval for the sale of its glass processing assets to VAQ at
a general meeting. The 11,666,667 shares at a deemed issue price of $0.30 per share ($3,500,000.10) were allotted
and issued to the Company on 24th July 2020 and the initial public offering of VAQ was completed on 31st July 2020
and VAQ was admitted to the Official List of NSX on the same day. Please refer to the ASX announcement dated
9th June 2020 and Notice of General Meeting dated 19th June 2020 for further information.
Baumart Holdings Limited 2020 Annual Report
P a g e | 48
D I R E C T O R S ’ D E C L A R A T I O N
In the opinion of the directors of BauMart Holdings Limited:
(a)
the financial statements and notes, set out on pages 15 to 48, are in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2020 and its
performance for the financial year ended on that date; and
(ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(b)
(c)
the financial report also complies with International Financial Reporting Standards as issued by the International
Accounting Standards Board; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
This declaration has been made after receiving the declarations from the Executive Director required by section 295A of
the Corporations Act 2001 for the year ended 30 June 2020. In accordance with section 295A, those declarations were
that:
(a)
(b)
(c)
the financial records of the Consolidated Entity have been properly maintained in accordance with section 286
of the Corporations Act 2001;
the financial statements and notes comply with the Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001 in all material respects; and
the financial statements and notes give a true and fair view, in all material respects, of the financial position and
performance of the Consolidated Entity.
Signed in accordance with a resolution of directors made pursuant to section 295 (5) (a) of the Corporations Act 2001
(Cth).
Dated at Perth, Western Australia this 27th day of August 2020
Matthew Logan
Executive Director
Baumart Holdings Limited 2020 Annual Report
P a g e | 49
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
BAUMART HOLDINGS LIMITED
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Baumart Holdings Limited, the Company and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. 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 auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the
Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Emphasis of Matter
Material Uncertainty Regarding Going Concern
Without qualification to the opinion expressed above, attention is drawn to the following matter:
As referred to in Note 4 to the consolidated financial statements, the consolidated financial statements have
been prepared on a going concern basis. At 30 June 2020 the Group had cash and cash equivalents totalling
$268,504 and the working capital deficiency of $916,332 and had incurred a loss before tax for the year of
$258,643. The ability of the Company and Group to continue as going concerns is subject to the Group
returning to future profitability and future capital raisings. In the event that the Group is not successful in
returning to profitability or raising additional funds as required, the Company and its subsidiaries may not be
able to continue as going concerns and to meet their liabilities as and when they fall due, and the realisable
value of the Company’s and its subsidiaries’ assets may be significantly less than book values.
Our opinion is not modified with respect to this matter.
Liability limited by a scheme approved
under Professional Standards Legislation
Baumart Holdings Limited 2020 Annual Report
P a g e | 50
Key Audit Matters
We have defined the matters described below to be key audit matters to be communicated in our report. 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.
Key Audit Matters
How the matter was addressed in the audit
Completeness and accuracy of revenue under the
new revenue Standard AASB 15 Revenue from
Contracts with Customers
There is an inherent risk around the accuracy of
revenue recorded given the nature of the Group’s
activities.
The application of the new revenue accounting
standard involves certain key judgements relating to
identification of distinct performance obligations,
determination of transaction price of the identified
performance obligations, the appropriateness of the
basis used to measure revenue recognised over a
period. The group’s policy on revenue recognition is
set out in Note 4 to the financial statements under
the use of judgements and estimates.
Revenue recognition is a key audit matter as the
application of revenue recognition involves the
evaluation of the appropriateness of management’s
judgements and estimates, as well as
the
significance of the Revenue balance to the Group of
$4,274,780.
Inter alia, our audit procedures
following:
included
the
i.
ii.
iii.
iv.
v.
Assessing the Group’s process to identify the
impact of adoption of
revenue
accounting standard;
the new
Assessing the appropriateness of the Group’s
revenue recognition accounting policies and
the adequacy of
the
financial statements;
their disclosures
in
Testing the operating effectiveness of the key
controls over the revenue process;
Performing tests for accuracy, completeness
and cut-off of customer invoicing on a sample
basis; and
Performing substantive tests and analytical
procedures on revenue and costs of sales and
tests of detail on accounts
performed
receivable balances
the
in
recognised
statement of financial position at year-end.
Key Audit Matters
How the matter was addressed in the audit
AASB 16 Leases disclosure
As described in Note 16, AASB 16 Leases (AASB16)
is effective for the financial period commencing 1 July
2019 and will have a significant impact on the
Group’s Financial Report.
The Group has completed its assessment of the
impact of AASB 16. This resulted in an increase in
the Group’s lease assets and lease liabilities of
$2,281,854 and $2,369,106 respectively as at 30
June 2020.
The impact of the adoption of AASB 16 on the Group
is dependent on a number of key judgements and
estimates, primarily the determination of the lease
term and appropriate discount rate for the lease.
provided.
Inter alia, our audit procedures
following:
included
the
i. Understanding the Group’s accounting policy
the
the compliance with
and confirming
requirements of AASB 16.
ii. Evaluating
the key assumptions used
in
determining the impact of AASB 16 which
included:
-
-
Determining the lease term; and
Assessing the appropriateness and
consistency of the discount rate used
(i.e. incremental borrowing rate).
Baumart Holdings Limited 2020 Annual Report
P a g e | 51
to
lease
lease
the
iii. Agreeing
supporting
contract
terms
documentation. Recalculating
the expected
lease asset and lease liabilities for the lease in
order to assess the accuracy of management’s
AASB 16 calculation.
the original
other
or
iv. Testing
completeness
of management
calculation by confirming the inclusion of lease
from management lease agreement records
and the rent expense general ledger accounts.
v. Assessing
the
appropriateness
of
the
disclosures included in Note 16.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2020, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, 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.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are 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 the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and 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 this
financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and
fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity's internal control.
Baumart Holdings Limited 2020 Annual Report
P a g e | 52
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that achieves
fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in Internal control that we identify during our
audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance
in the audit of the consolidated financial report of the current period and are therefore key audit matters. We
describe these matters in our auditor's report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 14 of the directors’ report for the year
ended 30 June 2020.
In our opinion the Remuneration Report of Baumart Holdings Limited for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
Baumart Holdings Limited 2020 Annual Report
P a g e | 53
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 responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
27 August 2020
Baumart Holdings Limited 2020 Annual Report
P a g e | 54
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
27 August 2020
The Directors
Baumart Holdings Limited
15 McCabe St
North Fremantle WA 6159
Dear Sirs
RE: BAUMART HOLDINGS LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Baumart Holdings Limited.
As Audit Director for the audit of the financial statements of Baumart Holdings Limited for the year
ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
i.
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
ii.
any applicable code of professional conduct in relation to the audit.
Yours faithfully,
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LIMITED
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Baumart Holdings Limited 2020 Annual Report
P a g e | 55
A D D I T I O N A L I N F O R M A T I O N
Top holders
The 20 largest registered holders of each class of quoted equity security as at 25 August 2020 were:
Fully paid ordinary shares – quoted
Name
No. of Shares
%
28,333,334
23,050,000
20,807,256
8,500,000
7,500,000
6,577,500
5,000,000
5,000,000
4,000,000
3,200,000
3,100,000
2,850,000
2,476,361
2,250,000
2,200,000
2,000,000
1,659,329
1,450,000
1,100,000
1,010,000
19.57
15.92
14.38
5.87
5.18
4.54
3.45
3.45
2.76
2.21
2.14
1.97
1.71
1.55
1.52
1.38
1.15
1.00
0.76
0.70
132,063,780
91.21
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Wonder Holdings Pty Ltd
Jojo Krisnawan
Benny Lau
Mr Tze Fong Gan
QP & Co Pty Ltd
Anrinza Future Pty Ltd
Mr Robert Ang
Mr Hoong Ngai Christopher Lai
Mr Park On Lai
Mr Matthew Luke Mark Logan
Mr Robert Ang
Serng Yee Liew
Mr Evan Murray Retallack
Willy Masturi
Kuswandi Aman
BNP Paribas Nominees Pty Ltd
Goodrich Capital Pty Ltd
Sufenty
Sanny Nanang
Mr Sok Kiang Teoh
Distribution schedules
A distribution schedule of each class of equity security as at 25 August 2020:
Ordinary fully paid shares
Range
Holders
Units
%
-
-
-
-
-
1,000
5,000
10,000
100,000
Over
3
2
132
24
44
171
6,593
1,320,000
844,960
142,573,033
0.00
0.01
0.91
0.58
98.50
205
144,744,757
100.00
1
1,001
5,001
10,001
100,001
Total
Substantial shareholders
The names of substantial shareholders in the Company as at 25 August 2020, and the number of shares to which each
substantial shareholder and their associates have a relevant interest, as disclosed in substantial shareholding notices
given to the Company, are set out below:
Substantial shareholder
Number of Shares
Wonder Holdings Pty Ltd
Jojo Krisnawan
Benny Lau
Anson Gan
Robert Ang
QP & Co Pty Ltd
28,333,334
23,050,000
20,807,256
8,500,000
8,100,000
7,500,000
Baumart Holdings Limited 2020 Annual Report
P a g e | 56
A D D I T I O N A L I N F O R M A T I O N
Restricted securities or securities subject to voluntary escrow
As at 25 August 2020, the Company had no restricted securities on issue.
As at 25 August 2020, the Company had no securities subject to voluntary escrow.
Unmarketable parcels
Holdings less than a marketable parcel of ordinary shares (being 2,500 shares as at 25 August 2020):
Holders
3
Units
171
Voting Rights
The voting rights attaching to ordinary shares are:
On a show of hands, every member present in person or by proxy shall have one vote, and upon a poll, each share shall
have one vote.
Options do not carry any voting rights.
On-Market Buy Back
There is no current on-market buy-back.
Corporate Governance
The Board has adopted and approved the Company’s Corporate Governance Statement, which can be found on the
Company’s website at www.baumart.com.au.
Baumart Holdings Limited 2020 Annual Report
P a g e | 57