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Joyce Corporation Ltd
AND CONTROLLED ENTITIES
ABN: 80 009 116 269
Annual Report 2015
Joyce Corporation Ltd 2015 Annual Report I PAGE 1
Corporate Directory
Directors
Secretary
D A Smetana
Chairman
M A Gurry
T R Hantke
A Mankarios
K Gray
Notice of annual general meeting
The Annual General Meeting of Joyce Corporation Ltd
will be held at: Bedshed Central Office
Principal registered office
Share register
Auditors
Solicitors
Bankers
14 Collingwood Street
Osborne Park 6017
Western Australia
10:00am
24 November 2015
time:
date:
14 Collingwood Street,
Osborne Park, WA,
Australia, 6017
Tel: +61 8 9445 1055
Computershare Investor Services Pty Limited
Level 11
172 St Georges Terrace
Perth WA 6000
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Australia
MDS Legal
Level 2, 16 Irwin Street,
Perth WA 6000
Australia
St George Bank
Level 2 Westralia Plaza
167 St Georges Terrace
Perth WA 6000
Australia
Stock exchange listings
Joyce Corporation Ltd shares are listed on the Australian
Securities Exchange (ASX : JYC).
Website address
www.joycecorp.com.au
ABN:
80 009 116 269
Joyce Corporation Ltd 2015 Annual Report I PAGE 2
ANNUAL REPORT CONTENTS
ANNUAL REPORT CONTENTS ........................................................................................................................ 3
CHAIRMAN’S REPORT ..................................................................................................................................... 4
DIRECTORS’ REPORT ...................................................................................................................................... 7
AUDITOR'S INDEPENDENCE DECLARATION .............................................................................................. 19
CORPORATE GOVERNANCE STATEMENT .................................................................................................. 20
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............ 22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................... 23
CONSOLIDATED STATEMENT OF CASHFLOWS ......................................................................................... 24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................... 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ..................................................................... 26
CORPORATE INFORMATION ........................................................................................................... 26
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ................................................................. 26
2.
FINANCIAL RISK MANAGEMENT ..................................................................................................... 40
3.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS ........................................................... 45
4.
SEGMENT INFORMATION ................................................................................................................ 45
5.
REVENUE, INCOME AND EXPENSES ............................................................................................. 48
6.
INCOME TAX ..................................................................................................................................... 49
7.
DISCONTINUED OPERATIONS ........................................................................................................ 53
8.
EARNINGS PER SHARE ................................................................................................................... 54
9.
CASH AND CASH EQUIVALENTS .................................................................................................... 55
10.
TRADE AND OTHER RECEIVABLES ............................................................................................... 56
11.
INVENTORIES ................................................................................................................................... 56
12.
OTHER ASSETS ................................................................................................................................ 57
13.
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE ......................................................... 57
14.
OTHER FINANCIAL ASSETS ............................................................................................................ 57
15.
PLANT AND EQUIPMENT ................................................................................................................. 58
16.
INVESTMENT PROPERTY ................................................................................................................ 58
17.
INTANGIBLE ASSETS ....................................................................................................................... 59
18.
TRADE AND OTHER PAYABLES...................................................................................................... 60
19.
INTEREST BEARING LOANS AND BORROWINGS ......................................................................... 61
20.
PROVISIONS ..................................................................................................................................... 63
21.
CONTRIBUTED EQUITY ................................................................................................................... 64
22
RESERVES ........................................................................................................................................ 65
23.
CAPITAL AND LEASING COMMITMENTS ....................................................................................... 65
24.
25.
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS ..................................................... 66
FAIR VALUE MEASUREMENT OF NON FINANCIAL INSTRUMENTS ............................................67
26.
CONTINGENT LIABILITIES ............................................................................................................... 68
27.
RELATED PARTY DISCLOSURES ................................................................................................... 68
28.
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD ............................................... 69
29.
EVENTS SUBSEQUENT TO REPORTING DATE ............................................................................. 71
30.
AUDITORS’ REMUNERATION .......................................................................................................... 71
31.
DIVIDENDS ........................................................................................................................................ 71
32.
RECONCILIATION OF NET PROFIT AFTER TAX TO NET CASH FLOWS FROM OPERATIONS .. 72
33.
34.
NON-CASH INVESTING AND FINANCING ACTIVITIES .................................................................. 72
35
PARENT ENTITY DISCLOSURES ..................................................................................................... 73
DIRECTORS’ DECLARATION ......................................................................................................................... 74
INDEPENDENT AUDITOR’S REPORT ............................................................................................................ 75
ASX ADDITIONAL INFORMATION .................................................................................................................. 77
Joyce Corporation Ltd 2015 Annual Report I PAGE 3
CHAIRMAN’S REPORT
It is with great pleasure to report that the Company has recorded a profit after tax attributable to members at
30th June 2015 of $5,221,000 compared to $1,570,000 for the comparable prior year, up +232.5%.
The net profit before tax to 30th June 2015 was $8,195,000 up 258.3% from $2,287,000 at 30th June 2014.
Revenues for the group were up +174% to $34.73 Million (excluding network sales from franchised stores).
We are pleased to declare a final fully franked dividend of 3 cents per share payable on the 23rd of October
2015 with a record date of the 6th of October 2015. In addition, subject to the settlement of the Moorebank
property sale, a special fully franked dividend of 5 cents per ordinary share will be paid. In total this will result
in a (substantially franked) 10.5 cent per ordinary share dividend for the entire calendar year.
The Company’s Net Assets per share was 94 cents as at 30th June 2015. The Earnings per share (EPS) is
16.0 cents compared to 5.6 cents last year on a fully diluted basis for this same period.
I feel it is important to share the following information with shareholders. In order to adequately reward our
existing shareholders for their continuing support of the Company. We plan to pay a franked special dividend
of 5 cents each year for the next two years in addition to this year on top of our normal dividend. We feel that
the strategic plans the Company has developed will allow this special dividend to be relatively sustainable in
the next periods after the third payment subject to continued stable world economic and local trading
conditions continuing.
Given the current world economic and political climate, it is very positive that the Company is in a relatively
impregnable financial position, with ample wherewithal to take advantage of growth opportunities into the near
future with little downside risks.
The Company announced during this period that it had sold its 40,800 square metre industrial property in
Moorebank NSW for $25 Million and it is due to settle on or after the 30th September 2015. This result will
allow the Group to be debt free with ample cash to ensure our plans are completed. We have already received
a non refundable deposit of $2.5 Million regarding the Moorebank sale.
Subsequently, as an after balance date event, we have also announced the purchase of a substantial
commercial property of nearly 4,048, square metres in the highly sought after Osborne Park WA area for $4
Million plus GST. The Company plans to develop this site and has already reviewed initial development plans
for the site. This will soon house our corporate offices and warehousing and provide for potential additional
rental income streams allowing for an EBIT gain on our property in the near future.
The Company’s business units Bedshed and KWB group performed well and above expectations. The
Company continues to perform above our forecasts in the current period.
I would like to thank the entire Management Team and staff, including Mr Anthony Mankarios our Executive
Director and the Joyce and KWB Boards for a solid enviable performance and I have no hesitation
commending the Company as highly secure and with significant wherewithal for growth
We look forward to a positive future ahead.
Dan Smetana
Chairman
Joyce Corporation Ltd 2015 Annual Report I PAGE 4
EXECUTIVE DIRECTOR’S REPORT
Operational Review
Director’s Operational Review
The Company announced a statutory profit for the year after tax of $5.22M and a record EBITDA of $7.93M to
30th June 2015 compared with $2.8M in the prior period, up 183%. This result included provisions on
Moorebank, one off costs and goodwill impairment charges with the resulting adjusted provisions and costs
totalling $2.9M.
Bedshed Franchising (“Bedshed”)
The main cash flow generating business unit managed to improve the underlying like for like earnings on the
previous year. Total network written sales maintained modest growth on a like for like basis in a challenging
retail goods environment.
The Bedshed company owned stores traded well up on last year and earnings growth was also up in double-
digit growth.
The company store at Bundall QLD was closed in this period due to the end of its lease. A new franchise store
has now opened subsequent to year end in the Bundall area.
Bedshed Franchising managed to secure a new franchise in the ACT late in the period.
During the year two more stores were converted to the Bedshed “Evolution” store fit out and both stores have
since performed very strongly. The company has plans to fast track “Evolution” upgrades for the next two
years.
KWB Group Pty Ltd (“KWB”)
At the 30 June 2015 the company held 57% equity in the subsidiary KWB Group Pty Ltd. Total consolidated
revenue and profit increased accordingly, with profit up in triple-digit growth. This has resulted substantially
from restructuring initiatives.
Kitchen Connection and Wallspan kitchen and wardrobes’ retail stores were upgraded and some stores were
relocated during this year. The KWB stores have been fully upgraded to produce an inspiring contemporary
kitchen showroom experience for our customers. KWB currently operates in QLD, NSW and SA with 12
stores.
The Company is fully cash funded, with no bank debt and has considerable orders on its books. The cash
position is strong and this subsidiary managed to pay its first cash dividend during this period. We anticipate
this may produce better procurement opportunities.
The focus now is on additional new stores and the introduction of new lines and benefits to our customers.
The Company has already signed leases to open new stores in major centres for the next period.
Moorebank
The Company announced during the year it has secured a sale of its large industrial property at Moorebank
NSW. This asset is currently held in our books as a current asset and the associated bank debt liability is likely
to be repaid on settlement of this property.
The Sale Price was $25 Million. The settlement will be on or after the 30th September 2015. The deposit of
$2.5 Million was unconditionally released to Joyce prior to year end and the sale is unconditional.
The property asset value has previously been carried in our books on the basis of the sub-economic rent
valuations. Selling the property ensured net EBIT gain in our books of $6.6M. We have conservatively
provided for any expenses and associated one off costs.
Joyce Corporation Ltd 2015 Annual Report I PAGE 5
EXECUTIVE DIRECTOR’S REPORT (CONTINUED)
Future Outlook
The Company has concluded its recent restructure program of closing underperforming Bedshed Company
owned stores. The last remaining discontinuing store recorded a loss of $95K in the year. The remaining
company owned stores are all generating operating profits.
Cash flow is anticipated to improve as the remaining store-exit payments conclude this coming year. These
exit payments had a minor impact on cash in the fiscal 2015 year. This will have minor impact in the next year
and these costs are provided for in the company books in prior years.
The Company’s cash position has increased significantly and is due to increase with the pending settlement of
the Moorebank property. The sale is for $25 Million and will allow for repayment of all current bank debt and
will provide the opportunity for new business acquisitions to underpin the group’s activities and growth plans in
the near future.
The Company’s prospects are positive given the recent lift in activity in its core Bedshed business. Currently
operations are all meeting profit expectations in a challenging retail environment.
The Company has achieved successful earnings and cash flow development with its related company KWB
Group Pty Ltd and there is potential for this to expand initially within its existing geographical operational
areas.
KWB commenced cash dividend payments which will commence to be franked in the year ahead.
Joyce’s vision is to produce above market returns to its shareholders through partnering in various business
opportunities; it aims to eventually enhance the group by assisting with the expansion across Australia. We
anticipate that our retail footprint into the premium “do it for me” market of kitchen and wardrobe renovation will
grow significantly in the coming years.
The outlook remains positive whilst continuing to be subject to overall economic activity.
After Balance Date Events
The Company has announced that it has purchased a property in Osborne Park W.A. This is due to settle on
2nd of October 2015 for $4M plus GST. The Company is currently reviewing plans to develop this property. We
aim to consolidate our corporate offices and W.A. warehouse facilities to this site. In the future this is likely to
provide additional rental revenue streams and potential lifts in EBIT resulting from valuation gains and
incoming rent.
Anthony Mankarios
Executive Director
Joyce Corporation Ltd 2015 Annual Report I PAGE 6
DIRECTORS’ REPORT
Your Directors present their report on the Consolidated Entity, consisting of Joyce Corporation Ltd (“the Company”) and
the entities it controlled at the end of, or during, the year ended 30 June 2015.
DIRECTORS
The names of the Company’s Directors in office during the year ended 30 June 2015 and until the date of this report are
as below. Directors were in office for this entire period unless otherwise stated.
Chairman (non-executive)
Non-executive Director
Non-executive Director
Executive Director
Mr D A Smetana
Mr T R Hantke
Mr M A Gurry
Mr A Mankarios
SECRETARY
Mr K Gray
PRINCIPAL ACTIVITIES
During the year the principal continuing activities of the Consolidated Entity consisted of being:
(a) The franchisor of the Bedshed chain of retail bedding stores;
(b) An owner of a number of Bedshed retail stores;
(c) Property Investment; and
(d) Majority owner of KWB Group Pty Ltd with 57% from October 2014.
Other than the closure of a marginal store in Queensland in March 2015, the announced sale of the NSW Moorebank
property and becoming a majority owner of KWB Group, no other significant changes in the nature of the activities of
the Consolidated Entity occurred during the year.
REVIEW AND RESULTS OF OPERATIONS
During the year ended 30 June 2015 (“the Financial Year”) the Consolidated Entity, achieved revenue from continuing
operations of $34.7m (2014: $12.7m) and a profit from continuing operations before tax of $0.91m (2014: $0.62m) and
an overall net profit after tax of $5.22m (2014: $1.57m). The revenue increased significantly from the consolidation of
KWB Group Pty Ltd from November 2015. Like for like sales reduced marginally on the closure of a Queensland
company store due to the end of a lease term. A franchise store was subsequently opened in the vicinity of the
company owned store.
Profit was supported with revaluation of the investment property at Moorebank in NSW from an unconditional sale
contract with settlement due 30 September 2015.
.
Financial Position
At 30 June 2015 the Consolidated Entity had equity of $26.5m (2014: $22.7m); with dividend payments increasing from
$835k in 2014 to $1,273k in 2015. Cash and cash equivalents increased to $5.96m (2014: $0.82m). Unutilised debt
facilities were $3.5m (2014: $869k). Debt is likely to be fully repaid after settlement of the Moorebank property in
September 2015.
Bank Facility
The Board is pleased to advise that the Consolidated Entity has successfully extended its longer term debt funding
facility with St George Bank to 30 June 2019. The $1.24m multi option facility which is subject to annual review was
also extended for another year to June 2016.
Joyce Corporation Ltd 2015 Annual Report I PAGE 7
DIRECTORS’ REPORT (CONTINUED)
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Consolidated Entity will look to further develop the Bedshed business through the expansion of its network of
franchised stores whilst consolidating the improved financial performance of Company owned and operated stores. The
Board is completing a strategic review of all businesses to ensure maximum return on shareholders’ funds and during
the year converted convertible notes into to a majority equity stake in KWB Group Pty Ltd (KWB) a kitchen and
wardrobe sales and installation company based in Queensland, South Australia and New South Wales. The KWB
business is investing in additional stores and the expansion will see significant improvement in profits and an increase
profit from the investment of 51% KWB after the final bonus equity earnings for the period ended 30 June 2015 reduces
the Company interest in KWB from 57% from October 2015.
DIVIDENDS
Dividends declared or paid during the financial year are as follows:
Distributions paid or payable
Interim unfranked ordinary dividend of 1.0 (2012: 1.5 cents) cents per
share (Paid – 24 July 2013)
Final unfranked ordinary dividend of 2.0 (2013: 0.65) cents per share
(Paid 21 November 2013)
Interim unfranked dividend of 1.5 (2013: 1.0) cents per share
(Paid 31 July 2014)
Final unfranked ordinary dividend of 2.1 (2014: 2.0) cents per share
(Paid 21 November 2014)
Prior year dividends paid on partly paid shares (Paid 01 March 2015)
Interim unfranked dividend of 2.5 (2014: 1.5) cents per share
(Paid 31 March 2015)
2015
$000
2014
$000
-
-
420
587
11
699
280
559
420
-
-
-
1,717
1,259
The Board will continue to review the Company’s ability to pay dividends and will continue with the payment of regular
dividends as in line with the dividend policy and available liquidity.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
The Company converted the second tranche of convertible notes in KWB Group Pty Ltd from November 2014 to
achieve majority ownership. The management of KWB continue to hold minority equity and resulting from strong
performance to the 30 June 2015 their minority holding will increase to 49% in September 2015.
The Company has previously announced that the investment property was not part of the longer term strategy and
during the year negotiated a sale of the Moorebank property with an unconditional sale for $25 M which will settle on or
after 30 September 2015.
SIGNIFICANT AFTER REPORTING DATE EVENTS
After the reporting date, a franked dividend was declared on 27 August 2015 of 3 cents per share payable 23
October 2015. A further special dividend of 5 cents per share fully franked will be paid on the same date subject
to the settlement of the Moorebank property. Subsequent to year end the settlement date has been changed to
30 October 2015.
A contract to purchase a property for use by the Company allowing consolidation of a number of sites was made
on 2 July 2015 for $4M.
Other than disclosed above no event has occurred since the reporting date to the date of this report that has
significantly affected, or may significantly affect:
the Consolidated Entity’s operations, or
(a)
the results of those operations, or
(b)
the Consolidated Entity’s state of affairs.
(c)
Joyce Corporation Ltd 2015 Annual Report I PAGE 8
INFORMATION ON DIRECTORS
Mr D A Smetana Chairman - Non-executive. Age 71.
Dip Comm FCPA FAIM FAICD
Experience and expertise
Mr Smetana has been Chairman of Joyce Corporation Ltd since 1984. He is also the Chairman of Bedshed Franchising
Pty Ltd. He is a past President of the Industrial Foundation for Accident Prevention and remains a Director., Director of
Poly Metallica Minerals Ltd, a Director of St John of God Foundation and Chairman of the St John of God
Comprehensive Cancer Centre Fundraising Committee. Director of Korab Resources Limited.
His past board memberships include: Director of Edge Employment Solutions Inc, Deputy Chairman of Youth Focus Inc
(1998 - 2007), Deputy Chairman Western Power Corporation and Chairman of its Finance Committee until 2003,
Chairman and National Councillor of the Defence Reserves Support Council - WA (1997 - 2006), Director of WA
Symphony Orchestra until 2003. Vice President and Councillor of the WA Federation of Police and Community Youth
Centres (Inc.) and Chairman of the Department of Training and Employment, Science & Technology Advisory Group.
His awards include the 2003 Centenary Medal for Service to Commerce and the Community, the 2007 Ian Chisholm
Award for Distinguished Service to Occupational Health & Safety and the 1998 WA Business Executive of the Year
award.
Other current Directorships of listed companies
None
Former Directorships of listed companies in last 3 years
None
Special responsibilities
Chairman of the Board
Member of the Audit Committee
Interests in shares and options
-
-
9,850,696 beneficial fully paid ordinary shares in Joyce Corporation Ltd.
380,000 partly paid (issued at $1.955 and paid to $1.523) ordinary shares in Joyce Corporation Ltd.
Mr M A Gurry. – Independent, Non-executive Director. Age 68.
Bachelor of Science Dip AICD FAICD FAIM SF Fin
Experience and expertise
Mr Gurry was Managing Director of HBF from 1995 to 2007 and prior to that he was President Asia Pacific of the DMR
Group Ltd, an international consulting firm. From 1996 to 1999 he was Vice President of the Asian Association of
Management Organizations, from 1997 to 1999 National President of the Australian Institute of Management and from
1999 to 2008 Chairman of United Way WA Inc. Mr Gurry is currently Chairman of Foundation Housing Limited, former
Chairman of the Forest Products Commission, and former Chairman of Reignite Pty Ltd, a councilor of HBF Ltd and has
served on numerous Boards including the Australian Health Insurance Association, The Australian Information Industry
Association, The West Australian Ballet and Integrated Group Ltd.
Other current Directorships of listed companies
None
Former Directorships of listed companies in last 3 years
None
Special responsibilities
Chairman of the Audit Committee
Member of the Remuneration Committee
Interests in shares and options
None
Joyce Corporation Ltd 2015 Annual Report I PAGE 9
DIRECTORS’ REPORT (CONTINUED)
INFORMATION ON DIRECTORS (CONTINUED)
Mr T R Hantke. – Independent, Non-executive Director. Age 67.
Bachelor of Commerce, FAIM, FAICD
Experience and expertise
Mr Hantke is Managing Director of his own consulting practice, Franchising Solutions Pty Ltd. Prior to this he
was the CEO of Snap Franchising from 1988 - 2001. He has been a Director of Bedshed Franchising Pty Ltd
since February 2002 and was appointed to the Joyce Board in June 2006. He was a board member of the
Franchise Council of Australia 1989 - 1996; Member of the Franchise Policy Council 1997 - 2002; is currently a
Member of the ACCC's Franchise Consultative Committee; and Chairman of Central Purchasing Services Ltd,
an Alternate non-executive Director of Mrs. Macs Pty Ltd and a non-executive Director of Bentech Assistive
Technologies Inc. He also Chairs a peer group mentoring for CEO’s group for The Executive Connection and
undertakes commercial mediations. Mr Hantke has extensive managerial experience in both small and large
organizations and in various industries.
Other current Directorships of listed companies
None
Former Directorships of listed companies in last 3 years
None
Special responsibilities
Chairman of the Remuneration Committee
Member of the Audit Committee
Interests in shares and options
None
Mr A Mankarios. – Executive Director Age 48.
MBA, FAICD, CFTP
An Executive Director of Joyce Corporation Limited (JYC), Mr Mankarios is an experienced director and manager who
has played a key role in Joyce's underlying business growth performance since 2010. He is also a non-executive
director of KWB Group Pty Ltd, which is a fast growing Kitchen Connection and Wallspan business; and Chairman of
Man Investments and Consultants as well as being involved in a number of other private companies.
Mr Mankarios is currently a Non- Executive Director of Inventis Limited (IVT) and was the CEO of Oldfields Holdings Ltd
(prior to 2010).
His experience over the last 26 years spans a number of different sectors ranging from retail, wholesale and
distribution, manufacturing as well as furniture retail / Importing and Franchise businesses in Australia and in Asia.
Other current Directorships of listed companies
Inventis Limited
Former Directorships of listed companies in last 3 years
None
Special responsibilities
Member of the Remuneration Committee. Member of the Audit Committee.
Interests in shares and options
700,485
COMPANY SECRETARY
The Company Secretary is Mr K Gray.
Mr Gray was appointed to the position of Chief Financial Officer and Company Secretary on 19 January 2010. Mr Gray
holds a Bachelor of Economics and is a qualified CPA. An experienced Chief Financial Officer and Company Secretary
having acted in these roles with a number of listed companies in mining services, industrial wholesale and retail.
Joyce Corporation Ltd 2015 Annual Report I PAGE 10
DIRECTORS’ REPORT (CONTINUED)
MEETINGS OF DIRECTORS
The numbers of meetings of the Company’s Board of Directors and of each Board committee held during the year
ended 30 June 2015, and the numbers of meetings attended by each Director were:
Full meeting
of Directors
A
11
11
11
11
B
10
9
9
11
Meetings of committees
Audit
Remuneration
A
4
4
4
4
B
4
4
4
4
A
-
4
4
4
B
-
4
4
3
D A Smetana
M A Gurry
T R Hantke
A Mankarios
A =
B =
Number of meetings held
Number of meetings attended during the time the Director held office or was a member of the committee
during the year
A Mankarios did not attend one meeting of the remuneration Committee as this meeting related to his contract and
remuneration.
REMUNERATION REPORT - AUDITED
The remuneration report is set out under the following main headings:
A. Principles used to determine the nature and amount of remuneration.
B. Service agreements
C. Details of remuneration
D. Share-based compensation
E. Link between remuneration policy and Company performance
The information provided in this remuneration report is also included in the financial report which has been audited as
required by section 308(3C) of the Corporations Act 2001.
As well as the Directors previously mentioned in this Directors’ Report, other Key Management personnel of the Group
include:
G Culmsee Chief Operating Officer Bedshed Franchising Pty Ltd
K Gray
J Bourke Managing Director KWB Group Pty Ltd
C Palin
Chief Financial Officer Joyce Corporation Ltd
Finance Director KWB Group Pty Ltd
A. Principles used to determine the nature and amount of remuneration
Remuneration Committee
The Remuneration Committee Charter establishes the role of the Remuneration Committee which is to review and
make recommendations on Board remuneration: senior management remuneration; executive share plan participation;
human resource and remuneration policies; and senior management succession planning, appointments and
terminations.
The main responsibilities of the Remuneration Committee includes reviewing and making recommendations on
remuneration policies for the company including, in particular, those governing the directors and senior management.
The Remuneration Committee comprises a majority of non-executive directors and at least three members. The
Chairman of the committee is appointed by the Board and must be a non-executive director.
The Remuneration Committee is required to meet as and when required by the Chairman. The committee may invite
persons deemed appropriate to attend meetings and may take such independent advice as it considers appropriate.
Any committee member may request the Chairman call a meeting.
Joyce Corporation Ltd 2015 Annual Report I PAGE 11
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT – AUDITED (CONTINUED)
A. Principles used to determine the nature and amount of remuneration (continued)
The Remuneration Committee is required to assess its effectiveness periodically. In addition the Charter is required to
be revised annually and updated as required.
Remuneration Policies
The objective of the Consolidated Entity’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of
strategic objectives and the creation of value for shareholders, and conforms to market practice for delivery of reward.
The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation;
transparency; and
capital management.
In consultation with external remuneration consultants, where appropriate, the Consolidated Entity has structured an
executive remuneration framework that is market competitive and complementary to the reward strategy of the
organisation.
Alignment to shareholders’ interests:
has economic profit as a core component of plan design;
focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price,
and delivering constant return on assets as well as focusing the executive on key non-financial drivers
of value; and
attracts and retains high calibre executives.
Alignment to program participants’ interests:
rewards capability and experience;
reflects competitive reward for contribution to growth in shareholder wealth;
provides a clear structure for earning rewards; and
provides recognition for contribution.
Non-executive Directors
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the
Directors. Non-executive Directors’ fees and payments are reviewed annually by the Board. The Board considers,
where appropriate, the advice of independent remuneration consultants to ensure non-executive Directors’ fees and
payments are appropriate and in line with the market. The Chairman’s fees are determined independently to the fees of
non-executive Directors based on comparative roles in the external market. The Chairman is not present at any
discussions relating to determination of his own remuneration.
The current base remuneration was last independently reviewed with effect from 30 June 2011. The remuneration of
Directors was reduced in 2009 and has subsequently been reinstated without escalation during the 2013 to 2015
financial years. Executive Directors who are members of a committee do not receive additional yearly fees.
Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The maximum currently stands at $500,000 per annum and was approved
by shareholders at the Annual General Meeting on 22 November 2012.
Joyce Corporation Ltd 2015 Annual Report I PAGE 12
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (CONTINUED)
Executive pay
Fixed Remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and is competitive in the market. Fixed remuneration is reviewed annually by the Remuneration Committee and
the process involves the review of the Consolidated Entity and individual performance, and relevant comparative
remuneration in the market.
Variable Remuneration - Short Term Incentives
The goals consist of a number of key performance indicators (KPI's) covering both financial and non-financial, corporate
and individual measures of performance. Included in the measures are contributions to net profit before tax, cash
targets and departmental functional KPI's. At the end of the financial year the remuneration committee assesses the
actual performance of the Consolidated Entity, the relevant segment and individual against the KPIs set at the
beginning of the financial year. Should the Consolidated Entity, or the relevant segment, achieve the set KPIs, the
Board will reward the key management personnel with a bonus during the salary review. A percentage of a pre-
determined maximum amount is awarded depending on results. No bonus is awarded where performance falls below
the minimum. There are no long term incentives.
B. Service Agreements
This remuneration report outlines the director and executive remuneration arrangements of 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 (“KMP”) 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.
For the purposes of this report, the term "executive" encompasses the Executive Director, Senior Executives and
Company Secretary of the Consolidated Entity.
Details of key management personnel (including the Senior Executives of the Consolidated Entity):
Mr D A Smetana
Mr M A Gurry
Mr T R Hantke
Mr A Mankarios
Non-Executive Director and Chairman
Non-Executive Director - Chairman of Audit Committee
Non-Executive Director - Chairman of Remuneration Committee
Executive Director
Mr G Culmsee
Mr K Gray
Chief Operating Officer
Chief Financial Officer and Company Secretary
The employment conditions of all Key Management Personnel are formalised in contracts of employment. Other than
Directors, the Executive Director and the CFO, who were engaged by Joyce Corporation Ltd all other executives are
permanent employees of Bedshed Franchising Pty Ltd.
The Executive Director has a service contract which at the date of this report runs to 30 June 2016 at the rate current at
30 June 2015. This is a part time role which allows a Directors fee and hourly charge for work undertaken above this
and paid monthly. All out of pocket expenses in connection with carrying out the role are reimbursable.
Joyce Corporation Ltd 2015 Annual Report I PAGE 13
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT – AUDITED (CONTINUED)
Other Executives
All executives have rolling contracts. The Consolidated Entity can terminate each contract by providing from two
months to six months written notice or providing payment in lieu of the notice period (based on the fixed component of
the executives’ remuneration). The Consolidated Entity may terminate an executive for serious misconduct without
notice. Where termination with cause occurs the executive is only entitled to that portion of remuneration that is fixed up
to the date of termination.
C. Details of remuneration
Short-term
Employment benefits
Post-
Employment
benefits
Salary &
Fees
Cash
Bonus
Non-
Monetary
benefits
Superannuation
Long-
term
benefits
Term
Benefits
AL & LSL
Total
% relating to
performance
161,761
59,821
61,741
283,323
-
-
-
-
174,724
30,387
458,047
30,387
225,667
183,843
272,366
30,319
36,760
63,500
191,671
63,500
-
-
-
-
-
-
622
675
-
-
26,637
15,538
13,618
55,793
-
55,793
21,497
17,529
10,419
8,195
-
-
-
-
-
-
-
-
-
-
188,398
75,359
75,359
339,116
205,111
544,227
278,105
238,807
346,285
263,366
-
-
-
-
14.82%
10.90%
15.39%
18.34%
24.11%
873,547 194,079
1,297
57,640
- 1,126,563
1,331,594 224,466
1,297
113,433
- 1,670,790
13.43%
159,602
58,957
60,877
279,436
-
-
-
-
133,569
67,925
413,005
67,925
219,697
54,520
-
-
-
-
-
-
-
178,046
43,937
1,098
26,007
15,286
13,366
54,659
54,659
20,322
16,570
397,743
98,457
1,098
36,892
-
-
-
-
-
-
-
-
-
185,609
74,243
74,243
334,095
201,494
535,589
294,539
239,651
-
-
-
33.71%
18.51%
18.33%
534,190
-
30-Jun-15
Non-Executive Directors
Mr D A Smetana
Mr T R Hantke
Mr M A Gurry
Total Non-Executive
Directors
Executive Director
Mr A Mankarios1
Total Directors
Mr G Culmsee2
Mr K Gray2
Mr J Bourke3
Mr C Palin3
Total Other Key
Management personnel
Total Remuneration:
30-Jun-14
Non-Executive Directors
Mr D A Smetana
Mr T R Hantke
Mr M A Gurry
Total Non-Executive
Directors
Executive Director
Mr A Mankarios
Total Directors
Mr G Culmsee
Mr K Gray
Total Other Key
Management personnel
Total Remuneration:
810,748 166,382
1,098
91,551
- 1,069,779
15.56%
Joyce Corporation Ltd 2015 Annual Report I PAGE 14
DIRECTORS’ REPORT (CONTINUED)
C. Details of remuneration (continued)
1. Mr A Mankarios was paid a cash bonus based on key performance criteria which requires
performance meets or exceeds the group budget and also achieves successful completion of
predetermined events at the discretion of the Directors. He is contracted to 30 June 2016.
2. Bonuses paid to other key management personnel were at the discretion of the Directors.
3. Mr J Bourke and Mr C Palin were Directors of KWB Group Pty Ltd prior to KWB Group Pty Ltd
becoming a subsidiary of Joyce Corporation Ltd in November 2014, they continue as Directors of KWB
Group Pty Ltd at the date of this report. Their remuneration above is for the entire 2015 financial year.
Other Key Management Personnel were paid a cash bonus based on key performance criteria which requires
performance meets or exceeds the group budget and also achieves successful completion of predetermined
events.
D. Share-based compensation
There was no share-based compensation of Key Management Personnel during the year ended 30 June 2015 (2014:
Nil).
E. Equity instrument disclosures relating to key management personnel
i. Option and rights holdings granted as compensation
During the financial year ended 30 June 2015 no options (2014: Nil) were granted or vested as equity compensation
benefits to any director or executive of the Consolidated Entity.
ii. Option holdings
There were no options on issue to key management personnel during the year ended 30 June 2015 (2014: Nil).
iii. Share Holdings
The number of shares in the company held during the financial year by each director of the company and the other key
management personnel of the Group, including their personally related parties, are set out below. There were no shares
granted during the reporting period as compensation (2014: Nil).
2015
Mr D A Smetana*
Mr T R Hantke
Mr M A Gurry
Mr A Mankarios
Mr G Culmsee
Mr K Gray
Mr C Palin
Mr J Bourke
Total
Balance
01-Jul-14
Ord
Granted as
Remuneration
Ord
On Exercise of
Options Net Change Other
Ord
Ord
Balance
30-June-15
Ord
9,850,696
-
-
697,286
-
-
-
-
10,547,982
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,199
-
-
-
-
3,199
9,850,696
-
-
700,485
-
-
-
-
10,551,181
* Beneficial holding only. Mr Smetana controls 10,893,438 fully-paid ordinary shares (2014 10,893,438).
Joyce Corporation Ltd 2015 Annual Report I PAGE 15
DIRECTORS’ REPORT (CONTINUED)
iv. Partly Paid Ordinary Shares Share Holding
The number of partly paid ordinary shares in the company held during the financial year by each director of the
company and the other key management personnel of the Group, including their personally related parties, are set out
below. There were no shares granted during the reporting period as compensation (2014: Nil).
2015
Mr D A Smetana1
Mr T R Hantke
Mr M A Gurry
Mr A Mankarios
Mr G Culmsee
Mr K Gray
Mr C Palin
Mr J Bourke
Total
Granted
as
Remuner
ation
Ord
Balance
01-Jul-14
Ord
On Exercise of
Options Net Change Other
Ord
Ord
Balance
30-June-15
Ord
380,000
-
-
-
-
-
-
-
380,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
380,000
-
-
-
-
-
-
-
380,000
All equity transactions with specified directors and specified executives have been entered into under terms and
conditions no more favourable than those the entity would have adopted if dealing at arm’s length.
(1) Mr D A Smetana holds 380,000 partly paid (issued at $1.955 and paid to $1.523) (2014 paid to: $1.432) ordinary
shares of the Company.
Partly paid shares are unquoted until they become fully paid. Partly paid shares carry voting rights and rights to
participate in entitlement issues although any shares acquired under a rights issue cannot be quoted until the partly
paid shares become fully paid.
Joyce Corporation Ltd 2015 Annual Report I PAGE 16
DIRECTORS’ REPORT (CONTINUED)
F. Link between remuneration policy and Company performance
The Consolidated Entity provided executives with variable remuneration in the form of short-term incentives as
described in Part A of the Remuneration Report. These incentives are payable upon the achievement of certain goals
covering both financial and non-financial, corporate and individual measures of performance. Included in the measures
are contributions to net profit before tax, cash targets and departmental functional KPI's.
The following table shows the gross revenue, profits and dividends for the last five years for the Consolidated Entity, as
well as the share price at the end of the respective financial years.
Revenue (a)
Net Profit after tax
Share Price at Year-end $
Dividends (Cents) Paid
Dividend payout ratio %
2015
$000
36,544
4,472
1.05
6.10
38.2
2014
$000
15,056
1,570
0.52
3.00
52.6
2013
$000
18,921
668
0.40
2.15
90.0
2012
$000
19,956
3,035
0.42
2.00
18.2
2011
$000
24,441
2,914
0.45
2.00
14.0
(a) Revenue and net profit in respect of the 2015, 2014 and 2013 financial years include discontinued operations. The
2013 financial performance was impacted by a non-recurring provision for stores that are to be closed during the
financial year ending the 30 June 2013 and 2014 financial years.
G. Voting at the 2014 Annual General Meeting on the Remuneration report
The Remuneration report in the 2014 Annual Report to shareholders was approved by 99.9% of shareholders at the
2014 Annual General Meeting. No specific feedback was received at the Annual General Meeting or throughout the
year.
H. Independent Salary and Incentive Review
During the 2012 financial year the company undertook an independent management salary and incentive review
so as to benchmark existing salary and incentive policies and levels. The Review was undertaken by the
independent professional firm of Gerard Daniels Australia. In general the company policies and remuneration
levels were found to be consistent with the markets in which we operate, although some changes have been
made to ensure greater consistency in some aspects of our remuneration practices. During the financial year
ended 30 June 2015 the Company did not engage any remuneration consultants.
LOANS OR OTHER TRANSACTIONS TO DIRECTORS AND EXECUTIVES
There were no loans outstanding to Directors and executives as at 30 June 2015 (2014: nil).
There were no other transactions with key management personnel.
The Executive directors fees for Mr A Mankarios are paid to Starball Pty Ltd, a company in which Mr Mankarios has
significant influence - $205,111 (2014: $201,495). As at year end the amount owing to this related party was $19,437
(2014: $9,825).
A receivable from Pynland Pty Ltd, a company with shares held in trust by Dan Smetana for the suspended employee
share scheme, for $26,131 owing to Joyce Corporation Ltd for amounts paid on behalf of Pynland Pty Ltd (2014:
$26,131).
End of Audited Remuneration Report.
Joyce Corporation Ltd 2015 Annual Report I PAGE 17
DIRECTORS’ REPORT (CONTINUED)
INSURANCE OF OFFICERS
During the financial year, Joyce Corporation Ltd paid a premium to insure the Directors and secretaries of the Company
and its Australian-based controlled entities, and senior executives of the Consolidated Entity. A clause in the relevant
insurance policy prevents the disclosure of the amount of the premium.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Consolidated Entity, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that
arise from conduct involving a willful breach of duty by the officers or the improper use by the officers of their position or
of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not
possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to
other liabilities.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
PERFORMANCE IN RELATION TO ENVIRONMENTAL REGULATION
Joyce Corporation is party to licences issued by the Environmental Protection Authority and various other authorities
throughout Australia. These licences regulate the management of air and water quality, the storage and carriage of
hazardous materials and disposal of wastes associated with the Consolidated Entity’s properties. There have been no
new or material known breaches associated with the Consolidated Entity’s licence conditions.
NON-AUDIT SERVICES
There were no fees paid or payable to the auditors for non-audit services for the year ended 30th June 2015.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 19.
ROUNDING OF AMOUNTS
The Company has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in
the financial report have been rounded off to the nearest $1,000.
Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001.
D A Smetana
Chairman
Perth, 30 September 2015
Joyce Corporation Ltd 2015 Annual Report I PAGE 18
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF JOYCE CORPORATION
LIMITED
As lead auditor of Joyce Corporation Limited for the year ended 30 June 2015, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Joyce Corporation Limited and the entities it controlled during the
period.
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2015
Joyce Corporation Ltd 2015 Annual Report I PAGE 19
CORPORATE GOVERNANCE STATEMENT
Joyce Corporation Ltd (“the Company”) and the Board are committed to achieving and demonstrating a high
standard of corporate governance. Joyce Corporation Ltd have reviewed its corporate governance practices
against the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX
Corporate Governance Council.
The 2015 corporate governance policy and statement reflects the corporate governance practices in place
throughout the 2015 financial year. A description of the Company’s current corporate governance practices is
set out in the Company’s corporate governance statements which can be viewed at www.joycecorp.com.au
Joyce Corporation Ltd 2015 Annual Report I PAGE 20
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2015
Joyce Corporation Ltd 2015 Annual Report I PAGE 21
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Continuing operations
Revenue
Cost of sales
Gross Profit
Other income
Share of net profit of associate
Expenses from continuing operations
Administration expenses
Distribution expenses
Marketing expenses
Occupancy expenses
Finance costs
Impairment of intangible assets
Other expenses
Profit from continuing operations before income tax
Income tax (expense) / benefit
Profit from continuing operations after tax
Discontinued operations
Profit for the year from discontinued operations
Profit for the year
Profit is attributable :
Ordinary equity holders of the company
Non-controlling interests
Total Comprehensive Income for the year
Earnings per share for profit attributable to the members of
Joyce Corporation Ltd
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Earnings per share for profit from continuing operations
attributable to members of Joyce Corporation Ltd
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Notes
Consolidated
30 June 2015
$000
30 June 2014
$000
6
6
29
6
6
7
8
9
9
9
9
34,737
(17,478)
17,259
97
215
(10,492)
(850)
(1,273)
(2,366)
(262)
(1,375)
(45)
908
(782)
126
5,095
5,221
12,657
(4,103)
8,554
141
255
(5,138)
(948)
(488)
(1,307)
(341)
(150)
(36)
617
(243)
374
1,196
1,570
4,472
749
1,570
-
5,221
1,570
16.2
16.0
0.5
0.5
5.7
5.6
1.4
1.3
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction
with the notes to the consolidated financial statements set out on pages 26 to 73.
Joyce Corporation Ltd 2015 Annual Report I PAGE 22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Notes
Consolidated
30 June 2015
$000
30 June 2014
$000
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Other financial assets
Total Current Assets
Non-Current Assets
Trade and other receivables
Investments accounted for using the equity method
Deferred tax asset
Plant and equipment
Inventories
Investment property
Intangible assets
Total Non-Current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Provisions
Provision for income tax
Total Current Liabilities
Non-Current Liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Non-controlling interests
Retained earnings/(Accumulated losses)
TOTAL EQUITY
10
11
12
13
15
11
29
7
16
12
17
18
19
20
21
20
7
21
22
23
5,962
577
2,185
22,890
1,252
32,866
558
-
918
1,294
558
-
9,620
12,948
45,814
8,771
22
814
3,769
13,376
5,300
317
371
5,988
19,364
26,450
17,926
2,699
511
5,314
26,450
816
416
2,108
232
1,892
5,464
335
755
2,280
497
-
17,315
9,972
31,154
36,618
3,464
102
401
-
3,967
6,923
2,765
233
9,921
13,888
22,730
17,891
5,321
-
(482)
22,730
The consolidated statement of financial position is to be read in conjunction with the notes to the
consolidated financial statements set out on pages 26 to 73.
Joyce Corporation Ltd 2015 Annual Report I PAGE 23
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Notes
Consolidated
30 June 2015
$000
30 June 2014
$000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Operating cash flow
Store closure costs
Net cash flows from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Proceeds from sale of other assets
Proceeds from security deposit
Secured loan
Purchase of non-current assets
Cash acquired from business combination, net of cash
consideration
Payment to trust account
Net cash from / (used in) investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net cash (used in) financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Reconciliation of cash
Cash at bank and in hand
33
32
10
42,195
(37,714)
86
(262)
4,305
(137)
4,168
1
2,508
1,100
76
(564)
2,587
-
5,708
-
(2,803)
(1,927)
(4,730)
5,146
816
5,962
19,025
(17,631)
129
(341)
1,182
(665)
517
19
59
600
(240)
(51)
-
(716)
(329)
50
(69)
(835)
(854)
(666)
1,482
816
5,962
5,962
816
816
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements set out on pages 26 to 73.
Joyce Corporation Ltd 2015 Annual Report I PAGE 24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Contributed
Equity
Reserves
Note
$’000
17,845
$’000
5,321
Retained
Earnings /
(Accumulated
Losses)
$’000
(1,033)
(6)
1,570
-
531
(34)
(979)
(482)
(482)
2,622
4,472
-
6,612
Non-
controlling
Interest
Total
Equity
$’000
$’000
-
-
-
-
-
-
-
-
-
-
-
749
749
22,133
(6)
1,570
-
23,697
12
(979)
22,730
22,730
-
4,472
749
27,951
-
-
-
-
-
-
17,845
5,321
46
-
-
-
17,891
5,321
17,891
5,321
-
-
-
(2,622)
-
-
17,891
2,699
35
-
-
-
17,926
2,699
(11)
(1,287)
5,314
-
24
(238)
(1,525)
511
26,450
Balance at 1 July 2013
Transfers to and from retained
earnings
Total comprehensive income
for the period
Profit attributable to members of
the parent entity
Profit attributable to non-
controlling interests
Subtotal
Transactions with owners in their
capacity as owners
Payment partly paid shares
Dividends paid or provided for
32
Balance at 30 June 2014
Balance at 1 July 2014
Transfers to and from retained
earnings
Total comprehensive income
for the period
Profit attributable to members of
the parent entity
Profit attributable to non-
controlling interests
Subtotal
Transactions with owners in their
capacity as owners
Payment partly paid shares
Dividends paid or provided for
32
Balance at 30 June 2015
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated
financial statements set out on pages 26 to 73.
Joyce Corporation Ltd 2015 Annual Report I PAGE 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The consolidated financial statements of Joyce Corporation Ltd (“the Company”) for the year ended 30
June 2015 were authorised for issue in accordance with a resolution of the directors of the Company
dated 30 September 2015. Joyce Corporation Ltd is a Company incorporated in Australia and limited by
shares which are publicly traded on the Australian Securities Exchange.
The nature of the operation and principal activities of the Company and its controlled entities are
described in note 5.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements comprise the financial statements of Joyce Corporation Ltd and its
controlled subsidiaries (‘the Consolidated Entity’).
(a)
Basis of preparation
These general purpose financial statements for the year ended 30 June 2015 have been prepared in
accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards.
Joyce Corporation Ltd is a for-profit entity for the purpose of preparing the Financial Statements.
Compliance with IFRS
Australian Accounting Standards include Australian equivalents to International Financial Reporting
Standards (“AIFRS”). Compliance with AIFRS ensures that the financial report of the Consolidated Entity
complies with International Financial Reporting Standards (“IFRS”).
New and amended standards adopted by the Group
The Group has applied the following standards and amendments for the first time for their annual
reporting period commencing 1 July 2014:
Interpretation 21 Accounting for Levies
AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and
Continuation of Hedge Accounting
AASB 2014-1 Amendments to Australian Accounting Standards
None of the new Standards and amendments to Standards that are mandatory for the first time for the
financial year beginning 1 July 2014 affected any of the amounts recognised in the current period or any
prior period and is not likely to affect future periods. Additionally, they did not significantly affect the
entity’s accounting policies or any of the disclosures.
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical
accounting estimates. It also requires Management to exercise judgement in the process of applying the
Consolidated Entity’s accounting policies. Areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.
Functional and presentation currency
Items included in the financial statements of each of the Consolidated Entity’s entities are measured using
the currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian Dollars, which is the Consolidated
Entity’s presentation currency.
Joyce Corporation Ltd 2015 Annual Report I PAGE 26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New standards and interpretations not yet adopted
AASB 9 Financial Instruments
AASB 9 Financial Instruments (AASB 9) addresses the classification, measurement and derecognition of
financial assets and financial liabilities. Since December 2013 it also sets out new rules for hedge
accounting.
When adopted, the standard will affect the Group's accounting for its available-for-sale financial assets,
since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if
they relate to equity investments that are not held for trading. The Group does not have any such assets.
There will be no impact on the Group's accounting for financial liabilities, as the new requirements only
affect the accounting for financial liabilities that are designated at fair value through profit or loss and the
Group does not have any such liabilities.
The new hedging rules align hedge accounting more closely with the Group's risk management practices.
As a general rule it will be easier to apply hedge accounting going forward. The new standard also
introduces expanded disclosure requirements and changes in presentation.
Adoption of AASB 9 is only mandatory for the year commencing 1 January 2017.
AASB 15 Revenue from Contracts with Customers
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which
covers contracts for goods and services and AASB 111 which covers construction contracts.
The new standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer - so the notion of control replaces the existing notion of risks and rewards.
The standard permits a modified retrospective approach for the adoption. Under this approach entities will
recognise transitional adjustments in retained earnings on the date of initial application (eg 1 July 2017),
ie without restating the comparative period. They will only need to apply the new rules to contracts that
are not completed as of the date of initial application.
The Group does not anticipate there will be a material effect on the financial statements from the adoption
of this standards.
Adoption of AASB 15 is only mandatory for the year commencing 1 January 2018.
There are no other standards that are not yet effective and that would be expected to have a material
impact on the entity in the current or future reporting periods and on foreseeable future transactions.
Joyce Corporation Ltd 2015 Annual Report I PAGE 27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles of consolidation
(b)
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
investment with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. All controlled entities have a 30 June financial year end. The existence and effect
of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Consolidated Entity controls another entity.
A list of controlled entities is contained in Note 28 to the financial statements.
The consolidation accounting method used for the consolidated financial statements that include the
financial statements made up to the reporting date each year of the Company and its subsidiaries is
disclosed under the note on 'Business Combinations' below. Consolidated financial statements are the
financial statements of the Consolidated Entity presented as those of a single economic entity. The
consolidated financial statements are prepared using uniform accounting policies for like transactions and
other events in similar circumstances.
All significant intra-Consolidated Entity balances and transactions, including income, expenses and
dividends, are eliminated in full on consolidation. The results of the investees acquired or disposed of
during the financial year are accounted for from the respective dates of acquisition or up to the dates of
disposal. On disposal, the attributable amount of goodwill, if any, is included in the determination of the
gain or loss on disposal.
Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to
equity interests held by persons outside the group, are shown separately within the Equity section of the
consolidated Statement of Financial Position and in the consolidated Statement of Profit or Loss and
Other Comprehensive Income.
KWB Group Pty Ltd became a related party and has been consolidated into the Consolidated Entity from
1 November 2014. Up to this date KWB was accounted for on an equity accounting basis.
(c)
Segment reporting
Operating segments are identified on the basis of internal reports about components of the Consolidated
Entity that are regularly reviewed by the chief operating decision makers in order to allocate resources to
the segments and to assess their performance.
(d)
Foreign currency translation
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation, at year end exchange rates, of monetary assets
and liabilities denominated in foreign currencies are recognised in the statement of profit or loss and other
comprehensive income, except when they are deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Translation differences on non-monetary financial assets and liabilities are reported as part of the fair
value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities
held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial assets such as equities classified as available for sale
financial assets are included in the fair value reserve in equity.
All companies of the Consolidated Entity have Australian Dollars as a functional currency.
Joyce Corporation Ltd 2015 Annual Report I PAGE 28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition
(e)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Consolidated Entity and the revenue can be reliably measured. The following specific recognition criteria
must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer
of significant risks and rewards of ownership of the goods and the cessation of all involvement in those
goods.
Rendering of services
Revenue from the rendering of a service is recognised upon completion of the service to customers.
Interest income
Interest income is recognised using the effective interest rate method, which, for floating rate financial
assets is the rate inherent in the instrument.
Dividend income
Dividend income is recognised when the right to receive a dividend has been established.
Franchise revenue
Revenue from franchising activities is recognised based on business written sales from franchised stores.
Rental revenue
Rental revenue is recognised monthly as defined in the relevant lease agreements.
All revenue is stated net of the amount of goods and services tax (GST).
Joyce Corporation Ltd 2015 Annual Report I PAGE 29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income tax
(f)
The income tax expense or revenue for the period is the tax payable on the current period’s taxable
income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting, nor taxable profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the reporting date and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the parent entity is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse in
the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
Tax Consolidation
Joyce Corporation Ltd and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under tax consolidation legislation. Each entity in the group recognises its own
current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’
approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax
losses and tax credits in the subsidiaries are immediately transferred to the head entity.
The group notified the Australian Tax Office that it had formed an income tax consolidated group to apply
from 1 July 2003. The tax consolidated group has entered a tax funding arrangement whereby each
company in the group contributes to the income tax payable by the group in proportion to their
contribution to the group’s taxable income. Differences between the amounts of net tax assets and
liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are
recognised as either a contribution by, or distribution to the head entity.
Joyce Corporation Ltd 2015 Annual Report I PAGE 30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Hire purchases and leases
(g)
Hire purchases and leases of property, plant and equipment where the Consolidated Entity, as lessee,
has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases
are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present
value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are
included in other short term and long term payables. Each lease payment is allocated between the
liability and finance cost. The finance cost is charged to the statement of profit or loss and other
comprehensive income over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The property, plant and equipment acquired under
finance leases are depreciated over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Consolidated Entity as lessee are classified as operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged to the statement of profit or loss and other
comprehensive income on a straight line basis over the period of the lease.
Lease income from operating leases where the Consolidated Entity is a lessor is recognised as income on
a straight line basis over the lease term.
Impairment of non-financial assets
(h)
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment or more frequently if events or changes in circumstances indicate that they
might be impaired. Other assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of
assets (cash generating units). Non-financial assets other than goodwill that suffered impairment are
reviewed for possible reversal of the impairment at each reporting date.
Cash and cash equivalents
(i)
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value,
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of
financial position.
Trade receivables
(j)
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less a provision for impairment. Trade receivables are generally due
for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off. A provision for impairment of trade receivables is established when there is
objective evidence that the Consolidated Entity will not be able to collect all amounts due according to the
original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30
days overdue) are considered indicators that the trade receivable is impaired.
Joyce Corporation Ltd 2015 Annual Report I PAGE 31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Trade receivables (Continued)
(j)
The amount of the provision is the difference between the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to
short term receivables are not discounted if the effect of discounting is immaterial. The amount of the
provision is recognised in the statement of profit or loss and other comprehensive income in other
expenses.
Inventories
(k)
Inventories are stated at the lower of cost and net realisable value. Cost comprises expenditure incurred
in acquiring the inventories and in bringing them to their existing condition and location.
Costs are assigned to individual items of inventory on a basis of weighted average costs. Costs of
purchased inventory are determined after deducting rebates and discounts. 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.
Fair value estimation
(l)
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to
approximate their fair values due to their short term nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the Consolidated Entity for similar financial instruments.
(m)
Investments and other financial assets
Classification
The Consolidated Entity classifies its financial assets in the following categories: financial assets at fair
value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale
financial assets.
The classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and, in the case of assets classified as
held-to-maturity, re-evaluates this designation at each reporting date.
(i) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are
classified as held for trading unless they are designated as hedges. Assets in this category are classified
as current assets.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are included in current assets, except for those with maturities
greater than 12 months after the reporting date which are classified as non-current assets. Loans and
receivables are included in trade and other receivables in the statement of financial position.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and
fixed maturities that the Consolidated Entity’s management has the positive intention and ability to hold to
maturity. If the Consolidated Entity were to sell other than an insignificant amount of held-to-maturity
financial assets, the whole category would be tainted and reclassified as available-for-sale. Held-to-
maturity financial assets are included in non-current assets, except for those with maturities less than 12
months from the reporting date, which are classified as current assets.
Joyce Corporation Ltd 2015 Annual Report I PAGE 32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m)
Investments and other financial assets (Continued)
(iv) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives
that are either designated in this category or not classified in any of the other categories. They are
included in non-current assets unless management intends to dispose of the investment within 12 months
of the reporting date. Investments are designated as available-for-sale if they do not have fixed maturities
and fixed or determinable payments and management intends to hold them for the medium to long term.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date - the date on which the
Consolidated Entity commits to purchase or sell the asset. Investments are initially recognised at fair
value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial
assets carried at fair value through profit or loss, are initially recognised at fair value and transaction costs
are expensed in the statement of profit or loss and other comprehensive income. Financial assets are
derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Consolidated Entity has transferred substantially all the risks and rewards of
ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments
recognised in equity are included in the statement of profit or loss and other comprehensive income as
gains and losses from investment securities.
Subsequent measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective
interest method.
Available-for-sale financial assets and financial assets at fair value through profit and loss are
subsequently carried at fair value. Gains or losses arising from changes in the fair value of the 'financial
assets at fair value through profit or loss' category are presented in the statement of profit or loss and
other comprehensive income within other income or other expenses in the period in which they arise.
Dividend income from financial assets at fair value through profit and loss is recognised in the statement
of profit or loss and other comprehensive income as part of revenue from continuing operations when the
Consolidated Entity’s right to receive payments is established.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as
available-for-sale are analysed between translation differences resulting from changes in amortised cost
of the security and other changes in the carrying amount of the security. The translation differences
related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying
amount are recognised in equity. Changes in the fair value of other monetary and non-monetary securities
classified as available-for-sale are recognised in equity.
Impairment
The Consolidated Entity assesses at each reporting date whether there is objective evidence that a
financial asset or a group of financial assets is impaired. In the case of equity securities classified as
available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is
considered as an indicator that the securities are impaired. If any such evidence exists for available-for-
sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and
the current fair value, less any impairment loss on that financial asset previously recognised in profit or
loss - is removed from equity and recognised in the statement of profit or loss and other comprehensive
income. Impairment losses recognised in the statement of profit or loss and other comprehensive income
on equity instruments classified as available-for-sale are not reversed through the statement of profit or
loss and other comprehensive income.
Joyce Corporation Ltd 2015 Annual Report I PAGE 33
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m)
Investments and other financial assets (Continued)
Financial Guarantees
Where material, financial guarantees issued, which requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are
recognised as a financial liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the
amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118:
Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB
118.
The fair value of financial guarantee contracts has been assessed using a probability weighted discounted
cash flow approach. The probability has been based on:
–
–
–
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party
defaulting; and
the maximum loss exposed if the guaranteed party were to default.
(n)
Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. They are measured at the lower of their carrying amount and fair value less
costs to sell, except for assets such as deferred tax assets, assets arising from employee
benefits, financial assets and investment property that are carried at fair value and contractual rights
under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group)
to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to
sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by the date of the sale of the non-
current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised
while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for
sale are presented separately from the other assets in the Statement of Financial Position. The liabilities
of a disposal group classified as held for sale are presented separately from other liabilities in the
Statement of Financial Position.
A discontinued operation is a component of the entity that has been disposed of or is classified as held
for sale and that represents a separate major line of business or geographical area of operations, is
part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a
subsidiary acquired exclusively with a view to resale. The results of discontinued operations are
presented separately in the Statement of Profit or Loss and Other Comprehensive Income.
Derivatives and hedging activities
(o)
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so,
the nature of the item being hedged. The Consolidated Entity designates certain derivatives as either:
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value
hedges),
hedges of the cash flows of recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges), or
hedges of a net investment in a foreign operation (net investment hedges).
Joyce Corporation Ltd 2015 Annual Report I PAGE 34
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p)
Derivatives and hedging activities (continued)
The Consolidated Entity documents at the inception of the hedging transaction the relationship between
hedging instruments and hedged items, as well as its risk management objective and strategy for
undertaking various hedge transactions. The Consolidated Entity also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions
have been and will continue to be highly effective in offsetting changes in fair values or cash flows of
hedged items.
Property, plant and equipment
(q)
Land and buildings are shown at fair value, based on periodic, but at least triennial, valuations by external
independent valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the
date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is
restated to the revalued amount of the asset. All other property, plant and equipment are stated at
historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Consolidated Entity and the cost of the item can be measured reliably. The carrying amount of the
replaced part is derecognised. All other repairs and maintenance are charged to the statement of profit or
loss and other comprehensive income during the reporting period in which they are incurred.
Depreciation is calculated over the estimated useful life of the asset as follows:
Plant and equipment - 1 to 20 years;
Leased plant and equipment - over 5 to 6 years; and
Leasehold improvements – 3 to 20 years.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting
date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are
determined by comparing proceeds with the carrying amount. These are included in the statement of
profit or loss and other comprehensive income. When revalued assets are sold, it is the Consolidated
Entity’s policy to transfer the amounts included in other reserves in respect of those assets to retained
earnings.
Investment property
(r)
Investment property, which is property held to earn rentals and/or for capital appreciation (including
property under construction for such purposes), is measured initially at its cost, including transaction
costs. Subsequent to initial recognition, investment property is measured at fair value. Gains and losses
arising from changes in the fair value of investment property are included in profit or loss in the period in
which they arise.
Joyce Corporation Ltd 2015 Annual Report I PAGE 35
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s)
Intangible assets
Acquired both separately and from a business combination
Intangible assets acquired separately are capitalised at cost. Following initial recognition, the cost model
is applied to the class of intangible assets. Where amortisation is charged on assets with finite lives, this
expense is taken to the statement of profit or loss and other comprehensive income through the
‘amortisation expenses’ line item.
Intangible assets, excluding development costs, created within the business are not capitalised and
expenditure is charged against profits in the period in which the expenditure is incurred intangible assets
are tested for impairment where an indicator of impairment exists and in the case of indefinite lived
intangibles annually, either individually or at the cash generating unit level. Useful lives are also examined
on an annual basis and adjustments, where applicable, are made on a prospective basis.
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Consolidated Entity’s
share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill
on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is
included in investments in associates. Goodwill is not amortised. Instead, goodwill is tested for impairment
annually or more frequently if events or changes in circumstances indicate that it might be impaired, and
is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-
generating units represents the Consolidated Entity’s investment in each country of operation by each
operating segment. Cash-generating units to which goodwill is allocated is as follows:
Bedshed Franchising cash generating unit
Bedshed Stores cash generating unit
KWB Group Pty Ltd cash generating unit
(ii) IT development and software
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses
that will contribute to future period financial benefits through revenue generation and/or cost reduction are
capitalised to software and systems. Costs capitalised include external direct costs of materials and
service, direct payroll and payroll related costs of employees’ time spent on the project. Amortisation is
calculated on a straight-line basis over periods generally ranging from 3 to 5 years. IT development costs
include only those costs directly attributable to the development phase and are only recognised following
completion of technical feasibility and where the Consolidated Entity has an intention and ability to use the
asset.
Joyce Corporation Ltd 2015 Annual Report I PAGE 36
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Trade and other payables
(t)
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the
reporting date which are unpaid. The amounts are unsecured and are usually paid within 45 days of
recognition.
Provisions
(u)
Provisions for legal claims, service warranties and make good obligations are recognised when the
Consolidated Entity has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation and the amount has been reliably
estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item included in the same class of obligations
may be small.
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. The discount rate used to determine the present
value reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the passage of time is recognised as interest expense.
Employee benefits
(v)
(i) Wages and salaries and annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be
settled within 12 months of the reporting date are recognised in other payables in respect of employees'
services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits 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 using the projected unit credit method. 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 currency that match, as closely as possible, the estimated future cash outflows.
(iii) Profit-sharing and bonus plans
The Consolidated Entity recognises a liability and an expense for bonuses and profit-sharing based on a
formula that takes into consideration the profit attributable to the Company’s shareholders after certain
adjustments. The Consolidated Entity recognises a provision where contractually obliged or where there is
a past practice that has created a constructive obligation.
(iv) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or
when an employee accepts voluntary redundancy in exchange for these benefits. The Consolidated Entity
recognises termination benefits when it is demonstrably committed to either terminating the employment
of current employees according to a detailed formal plan without possibility of withdrawal or providing
termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due
more than 12 months after reporting date are discounted to present value.
Joyce Corporation Ltd 2015 Annual Report I PAGE 37
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Borrowings
(w)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in the statement of profit or loss and other comprehensive
income over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the
facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.
Bank loans are carried at amortised cost. Transaction costs are deducted against the outstanding
principal amount at amortised cost using the effective interest rate method.
Contributed equity
(x)
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares
or options for the acquisition of a business are not included in the cost of the acquisition as part of the
purchase consideration.
If the entity reacquires its own equity instruments, e.g. as the result of a share buy-back, those
instruments are deducted from equity and the associated shares are cancelled. No gain or loss is
recognised in the profit or loss and the consideration paid including any directly attributable incremental
costs (net of income taxes) is recognised directly in equity.
Dividends
(y)
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of the financial year but not distributed at reporting
date.
(z)
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential ordinary shares.
Comparatives
(aa)
When required by applicable accounting standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
(bb) Rounding of Amounts
The Company has applied the relief available to it under ASIC Class Order 98/100 and accordingly,
amounts in the financial report have been rounded off to the nearest $1,000.
Joyce Corporation Ltd 2015 Annual Report I PAGE 38
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(cc) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The Statement of Cash Flows includes cash flows on a gross
basis. The net amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the statement of financial position.
(dd)
Investments in associates
Investments in associates are accounted for using the equity method of accounting in the consolidated
financial statements. Under the equity method, the investment in the associate is carried in the
consolidated statement of financial position at cost plus post-acquisition changes in the Consolidated
Entity’s share of net assets of the associate. After application of the equity method, the Consolidated
Entity determines whether it is necessary to recognise any additional impairment loss with respect to the
Consolidated Entity’s net investment in the associate.
The Consolidated Entity's share of the associate post-acquisition profits or losses is recognised in the
statement of profit or loss and other comprehensive income. The cumulative post-acquisition movements
are adjusted against the carrying amount of the investment. When the Consolidated Entity's share of
losses in the associate equals or exceeds its interest in the associate, including any unsecured long-term
receivables and loans, the Consolidated Entity does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The reporting dates of the associate and the Consolidated Entity are identical and the associate’s
accounting policies conform to those used by the Consolidated Entity for like transactions and events in
similar circumstances.
(ee)
Business Combinations
The acquisition method of accounting is used to account for all business combinations, regardless
whether equity instruments or other assets are acquired. The consideration transferred for the acquisi
of a subsidiary comprises the
fair values of the assets transferred
liabilities incurred
equity interests issued by the group
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are, with limited exceptions, measured initially at their fair values at the acquisition date. The group
recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis
either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net
Identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the
consideration transferred,
amount of any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is
recognised directly in profit or loss as a bargain purchase.
Joyce Corporation Ltd 2015 Annual Report I PAGE 39
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or
loss.
AASB3(42) If the business combination is achieved in stages, the acquisition date carrying value of the
acquirer’s previously held equity interest in the acquire is remeasured to fair value at the acquisition date.
Any gains or losses arising from such remeasurement are recognised in profit or loss.
3. FINANCIAL RISK MANAGEMENT
The Consolidated Entity's activities expose it to a variety of financial risks: market risk (including currency
risk and interest rate risk), credit risk and liquidity risk. The Consolidated Entity's overall risk management
program focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the financial performance of the Consolidated Entity.
The Consolidated Entity makes occasional use of derivative financial instruments such as foreign
exchange contracts to manage foreign currency risk. Derivatives are exclusively used for hedging
purposes, i.e. not as trading or other speculative instruments. The Consolidated Entity uses different
methods to measure different types of risk to which it is exposed. These methods include sensitivity
analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit
risk.
Risk management is carried out by the CFO under the supervision of the Board of Directors. The Board
provides principles for overall risk management, as well as policies and supervision covering specific
areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments
and non-derivative financial instruments, and investment of excess liquidity.
The Consolidated Entity holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Interest-bearing loans and borrowings
Notes
Consolidated
30 June 2015
$000
30 June 2014
$000
10
11
15
19
20
5,962
1,135
1,252
8,349
8,771
5,322
14,093
816
751
1,892
3,459
3,464
7,024
10,488
Joyce Corporation Ltd 2015 Annual Report I PAGE 40
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk
(i) Foreign exchange risk
The Consolidated Entity makes purchases some of which are exposed to foreign exchange risk arising
from various currency exposures, primarily with respect to the US dollar, in the ordinary course of
business. Foreign exchange risk arises from future commercial transactions and recognised assets and
liabilities denominated in a currency that is not the Consolidated Entity’s functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting.
Management has a standard policy for dealing with foreign currency risk in the purchasing function of the
Consolidated Entity in order to manage foreign exchange risk against the Consolidated Entity’s functional
currency. Material purchase contracts which are denominated in foreign currency are regularly reviewed
by management and when it is considered necessary the currency risk exposure may be managed via the
use of foreign currency contracts. The current policy is to forward buy USD contracts equivalent to fifty
percent of six months forward US dollar denominated orders.
The Consolidated Entity’s had exposure to foreign currency risk with respect to the US Dollar at the at 30
June 2015 of US$200k.
(ii) Cash flow interest rate risks
The Consolidated Entity's main interest rate risk arises from long-term borrowings. Borrowings issued at
variable rates expose the Consolidated Entity to cash flow interest rate risk. The Consolidated Entity
policy is to manage both risks as appropriate in conjunction with considerations about minimising the
Consolidated Entity’s liquidity risk (see below), the current state of the yield curve and expectations about
interest rates in the medium term and the need for flexibility so as to minimise the Consolidated Entity’s
interest expense.
As at the reporting date, all of the Consolidated Entity had the following variable and fixed rate financial
instruments:
Weighted
Average
Interest rate
%
Weighted
Average
Interest
rate
%
30 June
2015
$000
30 June
2014
$000
Financial assets
Cash and cash equivalents
0.03%
5,962
4.14%
Financial liabilities
Overdraft – secured (i)
Commercial bill –secured – variable
Commercial bill –secured – variable (ii)
n/a
n/a
3.72%
5,962
-
-
5,300
5,300
n/a
n/a
3.84%
816
816
-
-
6,900
6,900
(i) The overdraft facility pays interest at variable interest rates plus a line fee and is renewed annually.
(ii) The Commercial bill facility is approved to 30 June 2019. This debt facility is bank bill based and
incurs a line fee on use.
An analysis by maturities is provided in (c) below.
Joyce Corporation Ltd 2015 Annual Report I PAGE 41
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
The Consolidated Entity analyses its interest rate exposure on a dynamic basis. Various scenarios are
modelled taking into consideration refinancing, renewal of existing positions, alternative financing and
hedging. Based on these scenarios, the Consolidated Entity calculates the impact on profit and loss of a
defined interest rate shift. The scenarios are run only for liabilities that represent the major interest-
bearing positions.
Based on the various scenarios, the Consolidated Entity manages its cash flow interest rate risk adopting
an appropriate mix of fixed versus variable rate debt and also an appropriate mix of debt maturities to
provide it with flexibility to repay debt as quickly as possible whilst having liquidity available to take
advantage of business opportunities as they arise.
Consolidated Entity sensitivity
The major debt facility drawn at 30 June 2015 is at a variable interest rate (see above). Variable interest
rates apply to the overdraft and cash and cash equivalents. On balances at 30 June 2015, if interest rates
had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, post-
tax profit for the year would have been $53k/$53k higher/lower (2014 - $69k/69k higher/lower), mainly as
a result of a higher/lower interest expense arising from borrowings offset by lower/higher interest income
from cash and cash equivalents. Equity would have been $53k/$53k higher/lower (2014 - $69k/$69k
higher/lower) for the same reasons as above.
(b)
Credit risk
Credit risk is limited to high credit quality financial institutions with which deposits are held and high credit
quality wholesale customers with which the Consolidated Entity trades.
Credit risk is managed on a Consolidated Entity basis. Credit risk arises from cash and cash equivalents,
derivative financial instruments and deposits with banks and financial institutions, as well as credit
exposures to wholesale customers, including outstanding receivables and committed transactions. For
banks and financial institutions, only independently rated parties with a minimum rating of 'A' are
accepted. If wholesale customers are independently rated, these ratings are used. Otherwise, if there is
no independent rating, risk control assesses the credit quality of the customer, taking into account its
financial position, past experience and other factors. Individual risk limits are set based on internal or
external ratings in accordance with limits set internally. The compliance with credit limits by wholesale
customers is regularly monitored by line management.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets
as summarised in each applicable note. For wholesale customers without credit rating the Consolidated
Entity generally retains title over the goods sold until full payment is received. For some trade receivables
the Consolidated Entity may also obtain security in the form of guarantees, deeds of undertaking or letters
of credit which can be called upon if the counterparty is in default under the terms of the agreement. The
Consolidated Entity does not hold any credit derivatives to offset its credit exposure. The Consolidated
Entity trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is
it the Consolidated Entity's policy to securitise its trade and other receivables.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings (if available) or to historical information about counterparty default rates:
Cash and cash equivalents
AA
Trade and other receivables
Non-rated
Other financial assets
Non-rated
CONSOLIDATED
2015
$000
5,962
1,135
2014
$000
816
751
1,252
1,892
8,349
3,459
Joyce Corporation Ltd 2015 Annual Report I PAGE 42
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed credit facilities and the ability to close
out market positions. The Consolidated Entity manages liquidity risk by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. Due to the
dynamic nature of the underlying businesses, the Consolidated Entity aims at maintaining flexibility in
funding by keeping committed credit lines available and, where possible, with a variety of counterparties.
Surplus funds are generally only invested in overnight deposits or used to repay debt.
Maturities of financial assets and financial liabilities
The tables below analyse the Consolidated Entity’s financial liabilities, net and gross settled derivative
financial instruments into relevant maturity groupings based on the remaining period at the reporting date
to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted
cash flows.
Consolidated disclosures
Year ended 30 June 2015
Consolidated financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Consolidated financial liabilities
Trade and other payables
Interest bearing loans & borrowings
Net maturity
Year ended 30 June 2014
Consolidated financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Consolidated financial liabilities
Trade and other payables
Interest bearing loans & borrowings
Net maturity
≤ 6 months
$000
6-12
months
$000
1-5 years
$000
>5
years
$000
5,962
1,114
1,252
8,328
8,771
22
8,793
(465)
-
-
-
-
-
-
-
-
-
21
-
21
-
5,300
5,300
(5,279)
-
-
-
-
-
-
-
-
≤ 6 months
$000
6-12
months
$000
1-5 years
$000
>5
years
$000
816
730
1,892
3,438
3,464
76
3,540
(102)
-
-
-
-
-
21
-
21
-
26
26
(26)
-
6,923
6,923
(6,902)
-
-
-
-
-
-
-
-
Total
$000
5,962
1,135
1,252
8,349
8,771
5,322
14,093
(5,744)
Total
$000
816
751
1,892
3,459
3,464
7,025
10,489
(7,030)
Joyce Corporation Ltd 2015 Annual Report I PAGE 43
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c)
Liquidity risk (continued)
Financing arrangements
The Consolidated Entity had access to the following undrawn bank borrowing facilities at the reporting
date:
30 June 2014
Consolidated
30 June 2015
Consolidated
Facility limit
$000
7,768
Used
$000
6,900
Available
$000
868
8,900
5,300
3,600
The Consolidated Entity had $3,500,000 of available overdraft and bank bill facilities to manage its
liquidity as at 30 June 2015 (2014: $868,000) represented by a $8,900,000 bank bill facility and overdraft
facility The consolidated entity had $5,962,000 (2014 $816,000) cash at bank as at the reporting date
including funds held in trust set out at note 10. In addition the Consolidated Entity had a net investment in
inventories of $2,185,000 as at 30 June 2015 (2014: $2,108,000). The Consolidated Entity has the ability
to draw additional bank guarantees against the available undrawn facility.
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes. The carrying value less impairment provision of trade
receivables and payables are assumed to approximate their fair values due to their short-term nature. The
fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the Consolidated Entity for similar
financial instruments. The fair value of forward exchange contracts is determined using forward exchange
market rates at the reporting date.
(e) Capital risk management
Management controls the capital of the Consolidated Entity in order to maintain a good debt to equity
ratio, provide the shareholders with adequate returns and ensure that the Consolidated Entity can fund its
operations and continue as a going concern. The Consolidated Entity’s debt and capital includes ordinary
share capital and financial liabilities, supported by financial assets. The Consolidated Entity is not subject
to any externally imposed capital requirements other than as disclosed in note 20 (e).
Management effectively manages the Consolidated Entity’s capital by assessing the Consolidated Entity’s
financial risks and adjusting its capital structure in response to changes in these risks and in the market.
These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the
Consolidated Entity since the prior year. This strategy is to ensure that the Consolidated Entity’s gearing
ratio remain below 40%. The gearing ratio for the year ended 30 June 2015 and 30 June 2014 is as
follows:
Bank Debt
Less Cash and cash equivalents
Plus cash held on trust
Gearing Ratio to Total Equity
CONSOLIDATED
2015
$000
5,300
(5,962)
1,252
590
2.2%
2014
$000
6,900
(816)
1,483
7,565
33.3%
Joyce Corporation Ltd 2015 Annual Report I PAGE 44
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.
The Consolidated Entity makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Impairment testing of goodwill
The Consolidated Entity assesses impairment at each reporting date by evaluating conditions specific to
the Consolidated Entity that may lead to impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Value-in-use calculations performed in assessing
recoverable amounts incorporate a number of key estimates. Impairment of $1,375,000 (2014: $150,000)
has been recognised in respect of goodwill for the year ended 30 June 2015. See note 18 for further
details.
Recognition of deferred taxation assets
The Consolidated Entity has deferred tax assets at 30 June 2015 of Nil (2014: Nil) which were not brought
to account, associated with tax losses arising in Australia the benefits of which will only be realised if the
conditions for deductibility are met.
Sale of investment property
An unconditional sale contract for the Moorebank property for $25M was entered into in March 2015. The
purchaser has paid a non-refundable $2.5M deposit directly to the Company. Settlement is due after 30
June 2015.As the contract is unconditional it is recorded as a sale in the year ended 30 June 2105 and
shown as a receivable
5. SEGMENT INFORMATION
(a) AASB 8 Operating segments
Operating Segments are identified on the basis of internal reports about components of the Consolidated
Entity that are regularly reviewed by the chief operating decision makers (The Board of Directors) in order
to allocate resources to the segments and to assess their performance.
The operating businesses are organised and managed separately according to the nature of the products
and services provided, with each segment representing a strategic business unit that offers different
products and serves different markets.
The Consolidated Entity has the following three operating segments:
The Bedshed retail bedding franchise operation;
The operation of Consolidated Entity owned Bedshed stores in Western Australia, Victoria, New
South Wales and Queensland; and
The operation of retail kitchen stores
Refer to note 8 for a description of discontinued operations. Transfer prices between operating segments
are set at an arms-length basis in a manner similar to transactions with third parties.
Joyce Corporation Ltd 2015 Annual Report I PAGE 45
5.
SEGMENT INFORMATION (CONTINUED)
Operating segments
The following table presents revenue and profit information and certain asset and liability information
regarding operating segments for the year ended 30 June 2015.
Continuing Operations
Discontinued
Operations
Bedshed
Franchise
$’000
Retail
Bedding
Stores
$’000
Retail
Kitchen
Stores
$’000
Invest
Prop /
Joyce
$’000
Total
‘$000
Store
Closures
$’000
Invest
Prop
$’000
Total
$’000
Year ended 30 June 2015
Revenue
Sales to external
customers
4,591
8,801
21,306
39 34,737
2,159
754 37,650
Inter-segment sales
-
-
-
-
-
-
-
-
Total segment revenue
4,591
8,801
21,306
39 34,737
2,159
754 37,650
Unallocated revenue
Total consolidated revenue
Result
97
-
-
97
34,834
2,159
754 37,747
Segment result
1,230
696
1,715
(1,352)
2,289
(95)
742
2,936
Unallocated expenses net
of unallocated income
Unallocated share of net
profit of associate
Profit before tax and
finance costs
Unallocated finance costs
Profit before income tax
Income tax expense
Net Profit for the year
Assets and liabilities
-
-
-
-
(1,334)
215
-
-
6,640
5,306
-
215
1,170
(95)
7,382
8,457
(262)
908
-
-
(262)
(95)
7,382
8,195
(782)
-
(2,192)
(2,974)
126
(95)
5,190
5,221
Segment assets
13,492
932
7,598
334 22,356
-
22,540 44,896
Unallocated assets
Total assets
918
23,274
Segment liabilities
2,329
939
5,385
5,577 14,230
Unallocated liabilities
Total liabilities
Other segment
information
Capital expenditure
Depreciation and
amortisation
Other non-cash segment
expenses / revaluation
4,086
18,316
-
-
-
684
302
-
10
23
-
313
146
361
133
-
-
-
-
-
-
-
-
12
-
-
918
22,540 45,814
1,048 15,278
-
4,086
1,048 19,364
684
314
-
-
-
Joyce Corporation Ltd 2015 Annual Report I PAGE 46
5. SEGMENT INFORMATION (CONTINUED)
Operating segments (continued)
The following table presents revenue and profit information and certain asset and liability information
regarding operating segments for the year ended 30 June 2014.
Continuing Operations
Bedshed
Franchise
$’000
Retail
Bedding
Stores
$’000
Retail
Kitchen
Stores
$’000
Discontinued
Operations
Invest Prop
/ Joyce
$’000
Total
‘$000
Store
Closures
$’000
Invest
Prop
$’000
Total
$’000
Year ended 30 June 2014
Revenue
Sales to external
customers
4,551
8,093
Inter-segment sales
-
-
Total segment revenue
4,551
8,093
1,542
-
398
-
Inter-segment elimination
Unallocated revenue
Total consolidated revenue
Result
Segment result
Unallocated expenses net
of unallocated income
Share of net profit of
associate
Profit before tax and
finance costs
Finance costs
Profit before income tax
Income tax expense
Net Profit (loss)for the year
Assets and liabilities
-
-
-
-
-
14 12,658
2,818
788 16,264
-
-
-
-
-
14 12,658
2,818
788 16,264
129
-
-
129
12,787
3,606
788 16,393
(1,377)
-
563
140
255
958
(341)
617
(243)
374
(50)
1,720
2,233
-
-
-
-
140
255
(50)
1,720
2,628
-
-
(341)
(50)
1,720
2,287
-
(474)
(717)
(50)
1,246
1,570
Segment assets
11,633
2,207
-
2,820 16,660
363
17,315 34,338
Unallocated assets
Total assets
2,280
18,940
-
-
2,280
363
17,315 36,618
Segment liabilities
2,477
762
-
3,767
7,006
233
3,884 11,123
Unallocated liabilities
Total liabilities
Other segment
information
Capital expenditure
Depreciation and
amortisation
Other non-cash segment
expenses / revaluation
2,765
9,771
-
-
2,765
233
3,884 13,888
17
10
-
34
132
-
-
-
-
-
-
-
51
142
949
-
12
-
-
51
154
-
949
949
Joyce Corporation Ltd 2015 Annual Report I PAGE 47
(b) Geographic segments
The Consolidated Entity operates in one principal geographical area namely that of Australia (country of
domicile).
(c) Information about major customers
No single customer of the Consolidated Entity generated more than 10% of the Consolidated Entity’s
revenue during the year ended 30 June 2015 (2014: None).
6.
REVENUE, INCOME AND EXPENSES
(a) Revenue, Income and Expenses from Continuing Operations
CONSOLIDATED
Revenue
Sale of goods
Provision of services
Total revenue
Other income
Interest received
Profit on disposal of assets
Other
Total other income
Finance costs
Bank loans and overdrafts
Finance charges payable under finance leases and hire
purchase contracts
Total finance costs
2015
$000
30,680
4,057
34,737
97
-
-
97
(259)
(3)
(262)
2014
$000
8,654
4,003
14,832
129
10
1
140
(334)
(7)
(341)
Depreciation and other significant items of expenditure included in statement of profit or loss and other
comprehensive income
Included in expenses:
Depreciation and amortisation
Impairment of goodwill
1 Includes depreciation for continued and discontinued operations.
(315)1
(1,375)
(154)1
(150)
(b) Lease payments and other expenses included in the statement of profit or loss and other
comprehensive income – continuing operations
Minimum lease payments - operating lease
(c) Employee benefits expense – continuing operations
Management bonus (admin)
Wages and salaries (admin costs)
Wages and salaries (included in distribution costs)
Defined contribution superannuation expense
Superannuation (included within distribution costs)
Other employee benefits expense (admin)
Other (included within distribution costs)
CONSOLIDATED
2015
$000
2,325
197
5,216
380
673
35
634
72
7,207
2014
$000
2,770
289
2,577
465
296
36
229
49
3,941
Joyce Corporation Ltd 2015 Annual Report I PAGE 48
7.
INCOME TAX
The major components of income tax expense for the year ended 30 June 2015 are:
Consolidated Statement of comprehensive income – continuing
operations
Current Income tax
Current income tax expense
Deferred income tax
Relating to origination and reversal of temporary differences
Utilisation of unused tax losses
Expense/(over) provision in respect of prior years
CONSOLIDATED
2015
$000
2014
$000
836
(1,661)
52
(9)
-
(239)
4
Income tax (expense)/benefit relating to continuing operations
(782)
(243)
Consolidated Statement of Profit or loss and Other
Comprehensive Income – discontinued operations
Income tax (expense)/benefit relating to discontinued operations
(2,192)
(474)
Income tax (expense)/benefit relating to overall operations
(2,974)
(717)
A reconciliation of income tax expense applicable to accounting profit before income tax at the statutory
income tax rate to income tax expense at the Consolidated Entity’s effective income tax rate for the years
ended 30 June 2015 and 30 June 2014 is as follows:
CONSOLIDATED
Profit before income tax
Income tax (expense)/benefit calculated at the statutory income tax
rate of 30% (2014: 30%)
Expenditure not allowable for income tax purposes
Impairment of stores not allowable for income tax purposes
Deferred tax asset losses not previously brought to account, now
brought to account
Under provision in respect of prior years
2015
$000
908
(272)
(141)
(412)
52
(9)
2014
$000
617
(185)
(62)
-
-
4
(782)
(243)
Income tax (expense)/benefit recognised in profit or loss – continuing
operations
(782)
(243)
Joyce Corporation Ltd 2015 Annual Report I PAGE 49
7.
INCOME TAX (CONTINUED)
Tax consolidation
Joyce Corporation Ltd and its 100% Australian owned subsidiaries are a tax Consolidated Entity.
Members of the Consolidated Entity have not entered into any tax sharing or tax funding arrangements. At
the reporting date, the possibility that the head entity will default on its tax payment obligations is remote.
The head entity of the tax Consolidated Entity is Joyce Corporation Ltd.
Measurement method adopted under UIG 1052 Tax Consolidation Accounting
The head entity and the controlled entities in the tax Consolidated Entity continue to account for their own
current and deferred tax amounts. The Consolidated Entity has applied the Consolidated Entity allocation
approach in determining the appropriate amount of current taxes and deferred taxes to allocate to
members of the tax Consolidated Entity. The current and deferred tax amounts are measured in a
systematic manner that is consistent with the broad principles in AASB 112 Income Taxes.
In addition to its own current and deferred tax amounts, the head entity also recognises current tax
liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits
assumed from controlled entities in the tax Consolidated Entity.
Tax consolidation contributions/ (distributions)
The Consolidated Entity has recognised no consolidation contribution adjustments.
Taxation of financial arrangements (TOFA)
Legislation is in place which changes the tax treatment of financial arrangements including the tax
treatment of hedging transactions. The Consolidated Entity has assessed the potential impact of these
changes on the Consolidated Entity's tax position. No impact has been recognised and no adjustments
have been made to the deferred tax and income tax balances at 30 June 2015 (2014: Nil).
Joyce Corporation Ltd 2015 Annual Report I PAGE 50
7. INCOME TAX (CONTINUED)
Deferred income tax
Deferred income tax at 30 June 2015 relates to the following:
Deferred tax liabilities
Investment property
Fair value gain
Other
Opening
balance
Charged to
income
Recognised
in Business
Combination
Closing
balance, 30
June 15
$000
$000
$000
$000
(2,425)
(260)
(80)
2,425
-
(28)
-
-
51
-
(260)
(57)
Balance at 30 June 2015
(2,765)
2,397
51
(317)
Deferred tax assets
Plant and equipment
Trade and other receivables
Pensions and other employer
obligations
Provisions
Other
Unused tax losses
$000
$000
$000
$000
74
1
128
183
279
1,615
(3)
11
100
52
(146)
(1,615)
65
-
125
49
-
-
136
12
353
284
133
-
918
Balance at 30 June 2015
2,280
(1,601)
239
The Consolidated Entity has deferred tax assets and liabilities of $Nil (2014: $Nil) which were not brought
to account.
Joyce Corporation Ltd 2015 Annual Report I PAGE 51
7.
INCOME TAX (CONTINUED)
Deferred income tax at 30 June 2014 relates to the following:
Deferred tax
liabilities
Investment property
Fair value gain
Other
Balance at 30 June 2014
Deferred tax assets
Plant and equipment
Trade and other
receivables
Pensions and other
employer obligations
Provisions
Other
Unused tax losses
Opening
balance
Charged
to income
Closing
balance,
30 June 14
$000
$000
$000
(2,130)
(260)
(9)
(295)
-
(71)
(2,425)
(260)
(80)
(2,399)
(366)
(2,765)
$000
$000
$000
55
5
91
347
345
1,786
19
(4)
37
(164)
(66)
(171)
74
1
128
183
279
1,615
Balance at 30 June 2014
2,629
(349)
2,280
Joyce Corporation Ltd 2015 Annual Report I PAGE 52
8. DISCONTINUED OPERATIONS
(a) Closure of Company owned store
A store in Queensland came to the end of a lease. The profit performance including all closure costs
resulted in a $95k loss during the year.
Subsequently a franchise store commenced within the locality of the closed store.
(b) Investment property sale
The investment property was contracted for unconditional sale in March 2015. As this business will cease
from 30 September 2015 the operation has been included as a discontinuing operation.
(c) Analysis of loss for the year from discontinued operations
The combined results of the discontinued operations (i.e. all the stores committed to the closure) included
in the statement of profit or loss and other comprehensive income are set out below.
Profit/(loss) for the year from discontinued operations
Revenue
Cost of sales
Gross profit
Other income
Sale of Investment Property
Revaluation of Investment Property
2015
Stores
Property
$000
1,807
(1091)
716
352
-
-
$000
-
-
-
753
6,640
-
2014
Stores
Property
Total
$000
1,807
$000
2,399
(1,091)
(1,451)
716
948
1,105
6,640
-
419
‐
‐
Total
$000
2,399
(1,451)
948
1,207
-
949
$000
-
-
-
788
‐
949
Expenses
(1,163)
(11)
(1,174)
(1,417)
(17)
(1,434)
from discontinued operations
Profit
before tax
(95)
7,382
7,287
(50)
Attributable income tax benefit
-
(2,192)
(2,192)
-
1,720
(474)
(95)
5,190
5,095
(50)
1,246
Other comprehensive income
-
-
-
-
-
1,670
(474)
1,196
-
for
Profit/(loss)
from
discontinued operations (attributable to
owners of Joyce Corporation Ltd)
year
the
(95)
5,190
5,095
(50)
1,246
1,196
Cash flows from discontinued operations
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Net cash flows
2015
$000
(76)
-
-
(76)
2014
$000
(38)
-
-
(38)
Joyce Corporation Ltd 2015 Annual Report I PAGE 53
9. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding during the
year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary
shareholders (after deducting interest on the convertible redeemable preference shares) by the weighted
average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options
and dilutive convertible non-cumulative redeemable preference shares).
The following reflects the income and share data used in the total operations basic and diluted earnings
per share computations:
Net profit/(loss) attributable to equity holders from
continuing operations for basic earnings per share
Effect of dilutive equity instruments
Net profit attributable to equity holders from continuing
operations for diluted earnings per share
Profit/(loss) attributable to equity holders from discontinued
operations
Profit for year
Non-controlling interests
Net profit attributable to ordinary shareholders for basic
earnings per share
Effect of dilutive equity instruments
Net profit attributable to ordinary shareholders for diluted
earnings per share
CONSOLIDATED
2015
$000
126
-
126
5,095
5,221
(749)
4,472
-
2014
$000
374
-
374
1,196
1,570
-
1,570
-
4,472
1,570
Number of
shares
Number of
shares
Weighted average number of ordinary shares for basic
earnings per share including partly paid
27,968,255
27,968,255
Adjusted weighted average number of ordinary shares for
diluted earnings per share including partly paid
27,968,255
27,968,255
Weighted average number of converted, lapsed or cancelled
potential ordinary shares included in diluted earnings per share
-
-
Weighted average number of partly paid ordinary shares
(issued at $1.955 and paid to $1.523) (2014:$1.432) included
in basic and diluted earnings per share.
380,000
380,000
Earnings per share are included at the foot of the Statement of Profit or Loss and Other Comprehensive Income.
Joyce Corporation Ltd 2015 Annual Report I PAGE 54
10. CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, cash and cash equivalents are comprised of the
following:
Cash at bank and in hand (a)
CONSOLIDATED
2015
$000
5,962
5,962
2014
$000
816
816
(a) Amounts held in trust for the Bedshed Approved Purposes funds
Included within the cash and cash equivalents balance are funds allocated for the specific use of
operating the Approved Purposes Fund activities on behalf of the Company’s franchisees.
At 30 June 2015 the total of this balance of the Bedshed Approved Purposes fund was $1,252,349 (30
June 2014: $1,483,138) and the bank account holding these funds are excluded from and released from
the registered charges and claims of Joyce Corporation Ltd bankers, St. George Bank.
The fund has a net balance that is taken up as commitment in the current liabilities of $1.35M.
11. TRADE AND OTHER RECEIVABLES
Current
Trade receivables*
Allowance for impairment loss (a)
Non-current
Trade receivables
Other receivables
(a) Allowance for impairment loss
616
(39)
577
21
537
558
419
(3)
416
21
314
335
Trade receivables are non-interest bearing and are generally on 30 day terms. A provision for impairment
loss is recognised when there is objective evidence that an individual trade receivable is impaired. An
impairment provision of $39k (2014: $3k) has been recognised by the Consolidated Entity.
At 30 June, the ageing analysis of current trade receivables is as follows:
Total
$000
616
0-30
Days
$000
419
31-60
Days
$000
119
61-90
Days
PDNI*
$000
18
61-90
Days
CI*
$000
-
+91
Days
PDNI*
$000
21
+91
Days
CI*
$000
39
2015 Consolidated
2014 Consolidated
419
270
90
13
-
43
3
* Past due not impaired ('PDNI')
Considered impaired ('CI')
Receivables past due but not considered impaired are: Consolidated Entity: $39,500 (2013: $56,066).
Payment terms on these amounts have not been re-negotiated however credit has been stopped until full
payment is made. Each operating unit has been in direct contact with the relevant debtor and is satisfied
that payment will be received in full. Other balances within trade and other receivables do not contain
impaired assets and are not past due. It is expected that these other balances will be received when due.
Joyce Corporation Ltd 2015 Annual Report I PAGE 55
11. TRADE AND OTHER RECEIVABLES (CONTINUED)
Movement in the provision for impairment of receivables is as follows:
Opening balance at 1 July
Charge for the year
Amounts written-off
Closing balance at 30 June
(b) Fair value and credit risk
CONSOLIDATED
2015
$000
3
36
-
39
2014
$000
41
-
(38)
3
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair
value. The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as
security, nor is it the Consolidated Entity's policy to transfer (on-sell) receivables to special purpose
entities.
(c) Foreign exchange and interest rate risk
Detail regarding foreign exchange and interest rate risk exposure is disclosed in note 3.
12. INVENTORIES
Current
Stock on hand at cost
Provision for impairment (a)
(a) Provision for impairment
CONSOLIDATED
2015
$000
2,325
(140)
2,185
2014
$000
2,208
(100)
2,108
Write-downs of inventories to net realisable value recognised as an expense during the year ended 30
June 2015 amounted to $140,091 (2014: $99,647). The reduction in provision has been written back to
cost of goods sold as losses were realised.
Non-current
Stock on hand at cost
Provision for impairment (a)
(a) Provision for impairment
647
(89)
558
-
-
-
Write-downs of inventories to net realisable value recognised as an expense during the year ended 30
June 2015 amounted to $89,592 (2014: Nil). The reduction in provision has been written back to cost of
goods sold as losses were realised.
Joyce Corporation Ltd 2015 Annual Report I PAGE 56
13. OTHER ASSETS
Current
Accrued revenue
Prepayments
Other receivables
Other receivables include $22,500 being the balance receivable on
sale of the Moorebank investment property
14. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Current
At 1 July
Plant and equipment additions
Disposals
At 30 June
15. OTHER FINANCIAL ASSETS
Current
Investment in convertible notes
Funds held in trust
Investments in listed shares at fair value through profit or loss
CONSOLIDATED
2015
$000
52
183
22,655
22,890
2014
$000
35
87
110
232
CONSOLIDATED
2015
$000
-
-
-
-
2014
$000
41
-
(41)
-
CONSOLIDATED
2015
$000
-
1,252
-
1,252
2014
$000
400
1,483
9
1,892
Joyce Corporation Ltd 2015 Annual Report I PAGE 57
16. PLANT AND EQUIPMENT
Year ended 30 June 2014
At 1 July 2013,
Net of accumulated depreciation
Additions
Disposals
Transfer to assets held for sale
Transfers
Depreciation charge for the year
At 30 June 2014,
Net of accumulated depreciation
At 30 June 2014
Cost
Accumulated depreciation and impairment
Net carrying amount
Year ended 30 June 2015
At 1 July 2014
Net of accumulated depreciation
Acquired from business combination net of
accumulated depreciation
Additions
Disposals
Depreciation charge for the year
At 30 June 2015
Net of accumulated depreciation
At 30 June 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
CONSOLIDATED
Leasehold
improvements
$000
Plant and
equipment
$000
Leased
Plant and
Equipment
$000
245
4
-
-
-
(57)
192
284
(92)
192
192
460
422
-
(160)
357
48
(5)
-
-
(95)
305
1,164
(859)
305
305
118
138
(26)
(155)
914
380
1,154
(240)
914
1,374
(994)
380
10
-
(8)
-
-
(2)
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$000
612
52
(13)
-
-
(154)
497
1,448
(951)
497
497
578
560
(26)
(315)
1,294
2,528
(1,234)
1,294
The carrying value of plant and equipment held under finance leases and hire purchase contracts at 30
June 2015 is $124,006 (2014: $177,152). Leased assets and assets under hire purchase contracts are
pledged as security for the related finance lease and hire purchase liabilities.
For assets pledged as collateral for the Consolidated Entity’s banking facilities refer to note 20.
17. INVESTMENT PROPERTY
CONSOLIDATED
Year ended 30 June
Balance at 1 July
Additions
Disposal
Fair value adjustments
Balance at 30 June
2015
$000
2014
$000
17,315
-
(17,315)
-
16,283
83
949
-
17,315
The investment property was contracted for sale in March 2015
unconditionally with a settlement date of 30 September 2015.
Joyce Corporation Ltd 2015 Annual Report I PAGE 58
18.
INTANGIBLE ASSETS
Goodwill (a)
CONSOLIDATED
2015
$000
2014
$000
9,620
9,972
9,620
9,972
An analysis of intangible assets is presented below:
CONSOLIDATED
Year ended 30 June 2015
At 1 July 2014
net of accumulated impairment
Acquired goodwill from business combination
Impairment
At 30 June 2015,
net of accumulated impairment
At 1 July 2014
Cost (gross carrying amount)
Accumulated impairment
Net carrying amount
At 30 June 2015
Cost (gross carrying amount)
Accumulated impairment
Net carrying amount
(a) Goodwill
2015
$000
2014
$000
9,972
1,023
(1,375)
10,122
-
(150)
9,620
9,972
10,569
(597)
9,972
10,995
(1,375)
9,620
10,569
(347)
10,222
10,569
(597)
9,972
Intangible assets as at 30 June 2015 reflects the value of the Bedshed activities for the Bedshed
Joondalup store which was purchased in May 2007, the Bedshed Claremont store that was purchased in
October 2008, the remaining 51% of Bedshed Franchising Pty Ltd purchased in 2006 and the 57%
interest in KWB Group purchased 31 October 2014.
(b) Impairment Disclosures
Goodwill is allocated to cash-generating units which are based on the Consolidated Entity’s operating
segments
CONSOLIDATED
Bedshed Franchising segment
Bedshed Stores segment
Kitchen Stores segment
Total
2015
$000
6,307
2,290
1,023
9,620
2014
$000
6,307
3,665
-
9,972
The recoverable amount of each cash-generating unit above is determined based on value-in-use
calculations. Value-in-use is calculated based on the present value of cash flow projections over a 5-year
period with the period extending beyond existing budgets for the 2014/15 and 2015/16 financial years
extrapolated using estimated growth rates. The cash flows are discounted using risk-adjusted pre-tax
discount rates.
Joyce Corporation Ltd 2015 Annual Report I PAGE 59
18. INTANGIBLE ASSETS (CONTINUED)
(b) Impairment Disclosures (continued)
The following assumptions were used in the value-in-use calculations:
Bedshed Franchising segment
Bedshed Stores segment
Pre –tax
Discount
Rate
Sales
Growth
Rate
Expense
Growth
Rate
11%
11%
3%
3-5%
3-5%
3-5%
The Consolidated Entity’s value-in-use calculations incorporated a terminal value component beyond the
5 year projection period for both the Bedshed Franchising and Bedshed Stores operating segments. The
principal assumption used to estimate the terminal value of each operating segment was a multiple of one
times earnings before interest, taxation, depreciation and amortisation for the year ended 30 June 2016
budget discounted at a rate of 11% per annum.
Impairment of Goodwill for the year ended 30 June 2015 was $1,375,000 (2014: $150,000), due to
changes in the estimates of future results and terminal value for the Bedshed stores segment.
(c) Impact of possible changes in key assumptions
Sensitivity analysis was conducted on the Bedshed stores segment:
-
-
If budgeted sales growth rate used in the value in use calculation has been 10% lower than
management’s estimates, the Consolidated Entity would have recognised further impairment of
$356,000.
If pre-tax discount rate applied was 10% higher than used in management’s estimates, then the
Consolidated Entity would have recognised further impairment of $26,000.
19. TRADE AND OTHER PAYABLES
Current
Unsecured liabilities
Trade payables
Accruals and other payables
Amounts held in trust for Bedshed marketing and other funds (a)
(a) Amounts held in trust for Bedshed marketing and other funds
CONSOLIDATED
2015
$000
1,748
5,673
1,350
8,771
2014
$000
534
1,408
1,522
3,464
Included within the cash and cash equivalents balance are funds allocated for the specific use of the
Bedshed Approved Purposes fund on behalf of the Consolidated Entity’s franchisee-owned and
Company-owned stores. Refer to note 10 for further information.
(b) Risk exposure
Information about the Consolidated Entity's exposure to foreign exchange risk is provided in note 3.
Joyce Corporation Ltd 2015 Annual Report I PAGE 60
20.
INTEREST BEARING LOANS AND BORROWINGS
Interest bearing loans and borrowings are comprised of the following:
Current
Finance leases
Shareholders Loan
Bank overdrafts – secured (a)
Non-current
Secured liabilities
Finance leases
Bank loans – secured (b)
Convertible Notes
CONSOLIDATED
2015
$000
22
-
-
22
-
5,300
-
5,300
5,322
2014
$000
52
50
-
102
23
6,900
-
6,923
7,025
(a)
Bank overdraft - secured
The overdraft facility attracts interest at variable interest rates plus a line fee is renewed annually. The
loan is drawn to nil at 30 June 2015 with $400,000 undrawn (2014: $486,669). The overdraft facility was
reduced late in the financial year and transferred to the longer term Commercial bill facility.
(b)
Bank loans - secured
The Commercial bill facility debt attracts interest at a variable interest rate and has a term which expires
on 30 June 2019. The outstanding is $5,300,000 (2014: $6,900,000) with $3,100,000 undrawn at 30 June
2015 (2014: $400,000).
(c)
Collateral provided
The available St George bank multi option overdraft and guarantee facility is $1,240,000 (2014:
$1,340,000). The unused cash facility at 30 June 2015 is $400,000 (2014: $468,000) with as cash and
cash equivalents held of $5,962,000. Further details on the facility are provided in note 3. There is first
registered real property mortgage over the investment property owned by the Consolidated Entity,
together with a fixed and floating charge over the Consolidated Entity assets and cross guarantees from
operating subsidiaries as security over the facility. On settlement of the investment property the
commercial bill facility is likely to be repaid in full.
The carrying amounts of non-current assets pledged as security are:
Freehold land and buildings
Other current receivables
Plant and equipment
CONSOLIDATED
2015
$000
-
8,540
1,294
9,834
2014
$000
17,315
-
497
17,812
Joyce Corporation Ltd 2015 Annual Report I PAGE 61
20. INTEREST BEARING LOANS AND BORROWINGS (CONTINUED)
(e)
Debt covenants
The covenants with St George bank includes:
an interest rate cover ratio of a minimum of 2.00 times where the cover is earnings before
interest, tax, depreciation, amortisation divided by interest charged.
a gearing ratio of a maximum of 2.0 times where gearing is Total Liabilities divided by Total
Equity; and
a limit on dividend payments made where these cannot be greater than 60% of net profit before
interest, tax, depreciation, amortisation and abnormal or one off transactions.
Lease liabilities are secured by the underlying leased assets.
Financial assets that have been pledged as part of the total collateral for the benefit of the bank debt are
as follows:
Cash and cash equivalents
Trade receivables
Other assets
(f)
Debt classification
CONSOLIDATED
2015
$000
5,962
577
22,500
29,039
2014
$000
816
416
-
1,232
There was no breach of the Company’s interest cover and gearing ratio debt covenants at 30 June 2015.
As a result, the Consolidated Entity’s bank debt which is due on 30 June 2019 has been classified as non-
current at 30 June 2015, in accordance with applicable accounting standards. A $1,240,000 facility is
available for issue of bank guarantees and overdraft. At the reporting date the overdraft component was
$400,000 with nil drawn.
(g) Risk exposure
Details of the Consolidated Entity's exposure to risks arising from current and non-current borrowings are
set out in note 3.
(h) Fair values
The carrying amount of the Consolidated Entity’s current and non-current borrowings approximate their
fair value.
Joyce Corporation Ltd 2015 Annual Report I PAGE 62
21. PROVISIONS
Provisions are comprised of the following:
Current
Employee benefits (a)
Sub-lease rental shortfall (b)
Store lease termination (c)
Total Current
Non-current
Employee benefits (a)
Sub-lease rental shortfall (b)
Environmental testing (d)
Total Non-Current
CONSOLIDATED
2015
$000
2014
$000
641
59
113
813
359
10
3
372
1,185
265
136
-
401
161
69
3
233
634
(a) Provision for employee benefits
A provision has been recognised for employee benefits relating to long service leave and annual leave. In
calculating the present value of future cash flows in respect of long service leave, the probability of long
service leave being taken is based on historical data. The measurement and recognition criteria relating to
employee benefits have been included in note 2 to this report.
(b) Provision for rental shortfall
A provision continues for the payment of rental shortfalls following the closure of a company owned store
as at 30 June 2013 which continues to August 2016.
(c) Provision for store lease termination costs
At the 30 June 2015, the Consolidated Entity provisioned for the estimated cost of repairs and
maintenance upon termination of store leases.
(d) Provision for environmental testing
As part of the ongoing testing of Joyce Corporation owned sites it was found that traces of a chemical
used by the lease, Joyce Foam Products, was detected in the groundwater at the South Australian and
New South Wales properties. The levels found were not high and to be prudent the Department of
Environment and Conservation were notified. The Department of Environment and Protection has not
required any remediation work due to the low level of risk. An an ongoing monitoring program has been
established to monitor the nature, extent and movement of the chemical found. The trace level of
chemical found has generally been decreasing according to independent environmental reports. The
costs of ongoing testing have been allowed for in the costs of sale of property.
.
Joyce Corporation Ltd 2015 Annual Report I PAGE 63
21. PROVISIONS (CONTINUED)
Sub-let
Provision
Store Lease
Termination
Employee
Benefits
Other
Total
$000
$000
$000
$000
$000
Consolidated Group
Opening balance at 1 July 2014
205
Additional provisions
Provisions acquired from
business combination
Amounts used
Balance at 30 June 2015
-
-
(136)
69
-
29
84
-
113
426
599
418
(443)
1,000
3
-
-
-
3
634
628
502
(579)
1,185
22.
CONTRIBUTED EQUITY
Ordinary shares carry one vote per share and carry the right to dividends.
27,588,255 (2014: 27,588,255) Issued and fully paid ordinary shares
17,347
17,347
CONSOLIDATED
2015
$000
2014
$000
380,000 (2014: 380,000) Partly paid ordinary shares, issued at $1.955
and paid to $1.523 (2014: $1.432) (a)
Movement in ordinary shares on issue
At 1 July 2014
Issued shares:
Payment partly paid shares
At 30 June 2015
(a) Partly-paid ordinary shares
579
544
17,926
17,891
2015
Number
27,588,255
-
-
27,588,255
2015
$000
17,891
-
35
17,926
Partly paid ordinary shares are unquoted until they become fully paid. Partly paid ordinary shares carry
voting rights and rights to participate in entitlement issues although any ordinary shares acquired under a
rights issue cannot be quoted until the partly paid ordinary shares become fully paid.
Joyce Corporation Ltd 2015 Annual Report I PAGE 64
23.
RESERVES
Financial assets reserve
Asset revaluation reserve
Balance at 30 June
Asset revaluation reserve
Opening Balance
Transfer to retained earnings upon
sale of investment property
CONSOLIDATED
2015
$000
2,698
-
2014
$000
2,698
2,623
2,698
5,321
2,698
(2,698)
2,698
-
Balance at 30 June
-
2,698
24.
CAPITAL AND LEASING COMMITMENTS
(a)
Finance lease and hire purchase commitments
The Consolidated Entity has finance leases and hire purchase contracts for various items of plant and
machinery, these leases have no terms of renewal or purchase options and escalation clauses.
Future minimum lease payments under finance leases and hire purchase contracts together with the
present value of the net minimum lease payments are as follows:
CONSOLIDATED
Within one year
After one year but not more than five
years
Total minimum lease payments
Less amounts representing finance
charges
Present value of minimum lease
payments
2015
2014
Minimum
payments
$000
Present
value of
payments
$000
Minimum
payments
$000
Present
value of
payments
$000
23
-
23
(1)
22
-
-
-
-
22
56
23
79
(4)
75
-
-
-
-
75
(b) Property lease receivable – Consolidated Entity as lessor
Within one year
After one year but not more than five years
More than five years
CONSOLIDATED
2015
$000
662
721
45
2014
$000
1,095
688
-
1,428
1,783
Joyce Corporation Ltd 2015 Annual Report I PAGE 65
24. CAPITAL AND LEASING COMMITMENTS (CONTINUED)
The property leases are non-cancellable leases expiring 2015 for a property New South Wales, with rent
receivable monthly in advance. Contingent rental provisions within the lease agreement require the
minimum lease payments to be increased by CPI per annum and or in accordance with a formula linked to
turnover of the lessee.
(c) Property lease payable – Consolidated Entity as lessee
Within one year
After one year but not more than five years
More than five years
CONSOLIDATED
2015
$000
3,415
10,014
2,373
2014
$000
2,206
4,302
2,672
15,802
9,180
Property leases are non-cancellable leases and have remaining terms of up to five years, with rent
payable monthly in advance. Provisions within the lease agreements require that the minimum lease
payments shall be increased by the CPI per annum. An option exists for most of the leases to renew the
lease at the end of the lease term for an additional term equal to the period of the original lease. If the
lease is renewed the rental rate is adjusted to market value.
(d) Motor vehicle lease payable – Consolidated Entity as lessee
Within one year
After one year but not more than five years
More than five years
CONSOLIDATED
2015
$000
2014
$000
11
-
-
11
11
-
-
11
Motor vehicle leases are non-cancellable leases for Consolidated Entity motor vehicles.
25.
FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
The Group has a number of financial instruments which are not measured at fair value in the Statement of
Financial Position.
Current Receivables
Loan
Non-current Receivables
Loan
Deposit
Non-current Borrowings
Carrying
Amount in
$’000
Fair Value
Amount in
$’000
77
186
50
77
186
50
Interest bearing loans & borrowings
5,322
5,322
Due to their short term nature, the carrying amount of the current receivables, current financial assets,
current assets and current borrowings are assumed to approximate their fair value.
Joyce Corporation Ltd 2015 Annual Report I PAGE 66
26. FAIR VALUE MEASUREMENT OF NON-FINANCIAL INSTRUMENTS
(i) Fair value hierarchy
This note explains the judgements and estimates made in determining the fair values of the non-financial
assets that are recognised and measured at fair value in the financial statements. To provide an indication
about the reliability of the inputs used in determining fair value, the group has classified its non-
financial assets and liabilities into the three levels prescribed under the accounting standards.
Level 1: The fair value is based on quoted market prices (unadjusted) in active markets for identical
assets or liabilities at the end of the reporting period.
Level 2: The fair value is determined using valuation techniques which maximise the use of observable
market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the asset is
included in level 3.
There were no assets measured using level 2 or level 3 fair value valuation techniques.
(ii) Valuation techniques used to determine level 3 fair values
The Consolidated Entity obtains independent valuations for its investment property at least every three
years.
(iii) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the period ended 30 June 2015 for recurring
fair value measurements:
Investment Property
$’000
Total
$’000
Opening balance 1 July 2014
Adoption of AASB 13
Disposals
Gains recognised in other income
Closing balance 30 June 2015
17,315
-
(17,315)
-
-
-
17,315
(17,315)
-
-
(iv) Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant unobservable inputs
used in recurring level 3 fair value measurement. See (ii) above for the valuation techniques adopted.
Description
Fair value at
30 June 2014
$’000
Unobservable
inputs
Range of inputs
Relationship of
unobservable
inputs to fair value
Investment property
17,315
Discount rate
Terminal yield
Capitalisation rate
Expected vacancy
rate
Rental growth rate
10% The higher the
n/a
discount rate and
terminal yield, the
lower the fair
value
9.25% The higher the
0%
capitalisation rate
and expected
vacancy rate, the
lower the fair
value
4.12% The higher the
rental growth rate,
the higher the fair
value
Joyce Corporation Ltd 2015 Annual Report I PAGE 67
27.
CONTINGENT LIABILITIES
(a) Rental Guarantees
Joyce Corporation Ltd has provided guarantees to third parties in relation to property leases for Bedshed
Company owned stores. These guarantees will be required while the stores remain company operated
and currently total $826,589 (2014: $871,330).
28.
RELATED PARTY DISCLOSURES
The consolidated financial statements include the financial statements of Joyce Corporation Ltd and the
subsidiaries listed in the following table.
Joyce Rural Pty Ltd
Bedding Investments Pty Ltd
Joyce Industries Pty Ltd
Furniture World Marketing Pty Ltd
Sierra Bedding Pty Ltd
Joyce Indpac Limited
Votraint No. 611 Pty Ltd
Bedshed Franchising Pty Ltd
Joyce International Pty Ltd
KWB Group Pty Ltd
Furniture World (HK) Pty Ltd
Country of
incorporation
% Equity interest
2014
2015
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
100
100
100
100
100
100
100
100
100
57
50
100
100
100
100
100
100
100
100
100
32
50
Joyce Corporation Ltd is the ultimate parent of the Consolidated Entity.
Transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
Transactions with related parties:
(i)
Disclosures relating to KMP:-
Those Directors or their Director-related entities received dividend payments, which were made
on the same basis as those made to other shareholders, during the year ended 30 June 2015.
(ii)
(iii)
Transactions entered into during the year between the Company and its controlled entities and
Directors of the Company and their Director-related entities were within normal customer or
employee relationships on terms and conditions no more favourable than those available to other
customers or employees.
The Executive directors fees for Mr A Mankarios are paid to Starball Pty Ltd, a company in which
Mr Mankarios has significant influence - $205,112 (2014: $201,495). As at year end the amount
owing to this related party was $19,437 (2014: $9,825).
(iv)
A receivable from Pynland Pty Ltd, a company owned by Dan Smetana, for $26,131 owing to
Joyce Corporation Ltd for amounts paid on behalf of Pynland Pty Ltd (2014: $26,131).
(v)
Key management personnel compensation
Short Term Benefits
Post Employment Benefits
Share Based Payment
2015
$000
1,557
113
-
1,670
2014
$000
978
92
-
1,070
Detailed remuneration disclosures are provided in the remuneration report on pages 11 to 17.
Joyce Corporation Ltd 2015 Annual Report I PAGE 68
28.
RELATED PARTY DISCLOSURES (CONTINUED)
(vi)
Loans to key management personnel
At 30 June 2015 or at any time during the financial year there were no loans (2014: Nil)
outstanding to specified directors and specified executives.
29.
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
The Company acquired 32% of KWB Group Pty Ltd as of February 2014 by converting $500K of $900K
of two tranches of convertible notes. The second tranche of the convertible notes of $400K was
converted as of November 2014. Total equity in KWB Group Pty Ltd increased to 57%. The total profit
reported by KWB Group Pty Ltd for the five months to 30 June 2014, after the first conversion, was
$796K of which 32% share represents $255K. The total profit reported KWB Group Pty Ltd for the four
months to 31 October 2014 was $672K of which 32% share represents $215K. KWB Group Pty Ltd has
surplus carried forward tax losses to absorb the current year income tax expense.
From November 2014 KWB Group Pty Ltd has been accounted for as a subsidiary of Joyce Corporation
Ltd.
Name of Entity Place of
Business/Country
of Incorporation
% of
Ownership
Interest
2015 2014
% %
Nature of
Relationship
Measurement
method
Quoted Fair
Value
Carrying
Amount
2015 2014
$’000 $’000
2015 2014
$’000 $’000
Australia
57 32
Associate** Equity
*n/a *n/a - 755
method
- 755
KWB Group
Pty Ltd
Total equity accounted investments
* Private entity – no quoted price available.
** Until 31 October 2014, from which KWB Group was treated as a subsidiary.
(i)
Contingent liabilities in respect of associate
Contingent liabilities - associate
Share of contingent liabilities incurred jointly with other investors
of the associate
Contingent liabilities relating to liabilities of the associate for which the
company is severally liable
2015
$’000
2014
$’000
-
-
-
-
-
-
Joyce Corporation Ltd 2015 Annual Report I PAGE 69
29.INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (CONTINUED)
Summarised financial information for associate
(ii)
The tables below provide summarised financial information for the
associate which is material to the group. The information disclosed
reflects the amounts presented in the financial statements of the former
associate and not Joyce Corporation Ltd.
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Reconciliation to carrying amounts
Opening net assets 1 July 2013
Issued shares
Profit for the period
Dividends paid
Closing net assets
Group’s share in %
Group’s share in $
Summarised statement of profit and loss and other
comprehensive income
Revenue
Profit from continuing operations
Profit for the period
Total comprehensive income
(iii)
Movement in Investment in Associate
Opening balance – 1 July 2014
32% equity interest on conversion of convertible note (tranche 1)
Fair value gain on acquisition*
25% equity interest on conversion of convertible note (tranche 2)
Dividends on 32% equity interest prior to 31 October 2014
Share of net profit of associate – 4 months to 31 October 2014
Closing balance – 31 October 2014
KWB
Group Pty
KWB
Group Pty
Ltd
2015
$’000
Ltd
2014
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,167
1,866
4,033
4,211
133
4,344
(311)
(1,210)
500
474
(75)
(311)
32%
(100)
KWB
Group Pty
KWB
Group Pty
Ltd
2015
$’000
-
-
-
-
2015
$’000
755
12
400
(128)
215
1,254
Ltd
2014
$’000
25,086
474
474
474
2014
$’000
-
500
-
-
-
255
755
* On acquisition date, the Directors reviewed the existing interest in KWB at fair value. This resulted in a $0.012m
fair value gain, included within Administration Expenses in the Statement of Profit or Loss and Other
Comprehensive Income.
From November 2014 KWB Group Pty Ltd has been accounted for as a subsidiary of Joyce Corporation
Ltd.
Joyce Corporation Ltd 2015 Annual Report I PAGE 70
30.
EVENTS SUBSEQUENT TO REPORTING DATE
A franked dividend of 3 cents per share was declared on 27 August 2015 and payable 23 October 2015.
A further special dividend of 5 cents per share fully franked will be paid subject to the settlement of the
Moorebank property. The settlement date has been changed to 30 October 2015.
A contract to purchase a property for use by the Company allowing consolidation of a number of sites was
made on 2 July 2015 for $4M.
Other than disclosed above no event has occurred since the reporting date to the date of this report that
has significantly affected, or may significantly affect:
(a)
(b)
(c)
the Consolidated Entity’s operations, or
the results of those operations, or
the Consolidated Entity’s state of affairs.
31.
AUDITORS’ REMUNERATION
Amounts received or due and receivable by the auditor’s for:
•
•
an audit or review of the financial report of the Consolidated Entity
other services in relation to the Parent Entity and any other entity
in the Consolidated Entity
(a) assurance related
32.
DIVIDENDS
Distributions paid or payable
Interim unfranked ordinary dividend of 1.0 (2012: 1.5 cents) cents per
share (Paid – 24 July 2013)
Final unfranked ordinary dividend of 2.0 (2013: 0.65) cents per share
(Paid 21 November 2013)
CONSOLIDATED
2015
$000
2014
$000
132
82
-
132
-
82
2015
$000
2014
$000
-
-
280
559
Interim unfranked dividend of 1.5 (2013: 1.0) cents per share
(Paid 31 July 2014)
420
420
Final unfranked ordinary dividend of 2.1 (2014: 2.0) cents per share
(Paid 21 November 2014)
Prior year dividends paid on partly paid shares (Paid 01 March 2015)
Interim unfranked dividend of 2.5 (2014: 1.5) cents per share
(Paid 31 March 2015)
587
11
699
-
-
-
1,717
1,259
To date the directors have not declared the payment of a final dividend out of retained profits at 30
June 2015 and will continue to monitor performance and review resources and liquidity to determine
when a dividend will be paid.
Dividends Paid
2015
$000
2014
$000
Cash payments in relation to dividends paid in the financial year
1,927
835
Joyce Corporation Ltd 2015 Annual Report I PAGE 71
33.
RECONCILIATION OF NET PROFIT AFTER TAX TO NET CASH FLOWS FROM
OPERATIONS
Reconciliation of net profit (loss) after tax to the net cash
flows from operations
CONSOLIDATED
Net profit after taxation
Adjustments for:
Depreciation and amortisation
Interest receivable
Other income
Goodwill – tax effect
Non-controlling interest
Impairment of goodwill
Revaluations of investment properties
Net loss / (profit) on disposal of plant and equipment
(Profit) on disposal of investment property
Share of net profit of associate
Changes in assets and liabilities
(increase)/decrease in inventories
(increase)/decrease in trade and other receivables
(increase)/decrease in other assets
(increase)/decrease in net deferred tax assets and liabilities
(decrease)/increase in trade and other payables
(decrease)/increase in provisions
Net cash flows used in operating activities
34.
NON-CASH INVESTING AND FINANCING ACTIVITIES
Contributed equity – partly paid shares
2015
$000
4,472
315
11
(12)
231
511
1,375
-
56
(6,640)
(215)
121
6
689
2,683
697
(132)
4,168
2014
$000
1,570
154
-
-
-
-
150
(949)
(10)
-
(255)
(148)
62
79
715
(192)
(659)
517
CONSOLIDATED
2015
$000
23
23
2014
$000
12
12
Joyce Corporation Ltd 2015 Annual Report I PAGE 72
35.
PARENT ENTITY DISCLOSURES
a. Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Retained earnings
Net Equity
b. Financial performance
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive profit/(loss)
As at 30 June
2015
$000
2014
$000
375
22,203
22,578
4,023
5,323
9,346
169
22,676
22,845
692
6,960
7,652
13,232
15,193
17,926
(4,694)
13,232
17,891
(2,698)
15,193
Year ended 30 June
2015
$000
(699)
-
(699)
2014
$000
(980)
-
(980)
c. Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
No such guarantees existed at 30 June 2015, other than security arrangement with St George Bank in
respect of interest bearing liabilities discussed in note 20.
d. Contingent liabilities of the parent entity.
No contingent liabilities existed within the parent entity as at 30 June 2015 (30 June 2014: Nil).
e. Commitments for the acquisition of property plant and equipment by the parent entity
Commitments for the acquisition of property plant and equipment by the parent entity existed as at 30
June 2015 for the value of $Nil (30 June 2014: Nil).
Joyce Corporation Ltd 2015 Annual Report I PAGE 73
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of Joyce Corporation Ltd, I state that:
(a) in the Directors’ opinion the financial statements and notes thereto of the Consolidated Entity has
been prepared in accordance with the Corporations Act 2001, including that they:
(i) comply with Australian Accounting Standards and Corporations Regulations 2001; and
(ii) give a true and fair view of the financial position of the Consolidated Entity as at 30 June 2015
and of its performance as represented by the results of its operations and its cash flows for the
year ended on that date; and
(b) the Directors have been given the declarations by the Executive Director and Chief Financial Officer
required by Section 295A;
(c) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable; and
(d) the financial report also complies with International Financial Reporting Standards as disclosed in
note 2(a).
Signed in accordance with a resolution of the Directors made pursuant to s.295 (5) of the Corporations
Act 2001.
D A Smetana
Chairman
Perth, 30 September 2015
Joyce Corporation Ltd 2015 Annual Report I PAGE 74
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Joyce Corporation Limited
Report on the Financial Report
We have audited the accompanying financial report of Joyce Corporation Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility 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 Note 2(a), the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’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 company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Joyce Corporation Ltd 2015 Annual Report I PAGE 75
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Joyce Corporation Limited, would be in the same terms if given to
the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a)
the financial report of Joyce Corporation Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2(a).
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2015. 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.
Opinion
In our opinion, the Remuneration Report of Joyce Corporation Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Glyn O'Brien
Director
Perth, 30 September 2015
Joyce Corporation Ltd 2015 Annual Report I PAGE 76
ASX ADDITIONAL INFORMATION
AS AT 28 SEPTEMBER 2015
Additional information required by the Australian Securities Exchange Limited‘s Listing Rules and not
disclosed elsewhere in this report. The information is provided below:
(a) Distribution of Shareholders
Category
As at 28 September 2015
Holders
Fully Paid
Ordinary Shares
1 - 1,000
1,001 – 5,000
5,001 - 10,000
10,001 – 100,000
100,001 – and over
Total
207
169
61
141
33
611
%
0.25
1.51
1.78
19.02
77.44
66,863
415,851
492,011
5,247,159
21,363,371
27,588,255
100.00
(b) Shareholdings - Substantial Shareholdings
The number of shares held or controlled at the report date by substantial shareholders was as follows:
Ordinary Shareholder
1. Mr D A Smetana* (including partly paid)
2. John Roy Westwood
Total
Fully Paid
Ordinary
Shares
10,829,326
2,350,000
%
38.7
8.4
13,179,326
47.1
* Mr Smetana has beneficial interest in 9,850,696 fully-paid ordinary shares (2014: 9,850,696) and
380,000 partly paid shares.
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
Joyce Corporation Ltd 2015 Annual Report I PAGE 77
ASX ADDITIONAL INFORMATION (CONTINUED)
AS AT 28 September 2015
(d)
Shareholdings - Twenty Largest Holders of Quoted Equity Securities - ungrouped
The number of shares held at the report date by the twenty largest holders of quoted equity securities:
Ordinary Shareholder
1. ADAMIC PTY LTD
2. UFBA PTY LTD
3. PEDUNCLE PTY LTD
4. SANDHURST TRUSTEES LTD
5. MCNEIL NOMINEES PTY LIMITED
6. MR DONALD TEO
7. MR DANIEL ALEXANDER SMETANA
8. STARBALL PTY LTD
9.
TREASURE ISLAND HIRE BOAT COMPANY PTY LTD
10. MOAT INVESTMENTS PTY LTD
11. MR DAN SMETANA
12. CONARD HOLDINGS PTY LTD
13.
BT PORTFOLIO SERVICES LIMITED
14. P B L INVESTMENTS PTY LTD
15. ASB NOMINEES LIMITED <208357 - ML A/C>
16. EPIC TRUSTEES LIMITED
17.
BELLPAM PTY LIMITED
18. JET INVEST PTY LTD
19. MAST FINANCIAL PTY LTD
20.
MAN INVESTMENTS (NSW) PTY LTD
Fully paid
Ordinary
Shares
7,711,568
2,328,000
1,948,312
1,373,803
1,000,000
990,000
563,726
430,029
425,291
419.000
354,022
347,940
324,700
270,203
248,120
220,245
207,500
188,364
175,000
167,456
%
27.95
8.44
7.06
4.98
3.62
3.59
2.04
1.56
1.54
1.52
1.28
1.26
1.18
0.98
0.90
0.80
0.75
0.68
0.63
0.61
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
Total Remaining Holders Balance
19,693,279
7,894.976
71.38
28.62
(e)
Unquoted Partly Paid Shares holdings greater than 20%
Ordinary Shareholder
Mr D A Smetana
Total
Partly Paid
Ordinary
Shares
380,000
380,000
%
100
100
Partly paid shares are unquoted until they become fully paid. Partly paid shares carry voting rights and
rights to participate in entitlement issues although any shares acquired under a rights issue cannot be
quoted until the partly paid shares become fully paid.
Joyce Corporation Ltd 2015 Annual Report I PAGE 78
ASX ADDITIONAL INFORMATION (CONTINUED)
AS AT 25 SEPTEMBER 2015
(f)
Company Secretary
Mr Keith Gray
(g)
Registered Office
14 Collingwood Street,
Osborne Park, WA,
AUSTRALIA, 6017
Tel: +61 8 9445 1055
(h)
Share Registry
Computershare Investor Services Pty Limited
Level 11,
172 St Georges Terrace
Perth, WA 6000
Tel: 1300 557 010
Joyce Corporation Ltd 2015 Annual Report I PAGE 79