2020
ANNUAL
REPORT
ABN: 80 009 116 269
CONTENTS
2020 Highlights
Chairman’s Letter
CEO’s Address
Who Are We?
Joyce
3
4
5
6
8
KWB Group
Bedshed
Board of Directors
Executive Team
Consolidated
Financial Reports
10
12
14
16
18
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2020
HIGHLIGHTS
We are pleased to present the results for the FY20 year and to report that the
Joyce group has continued to deliver increased earnings in its ongoing operations,
and have strengthened our cash position considerably. This is due primarily to the
commitment of our people. We have worked together to deliver on the strategic
and operational initiatives that we considered would add value during these
challenging times. This is testament to our Joyce Way business model.
We divested Lloyds Online Auctions. Together with the Lloyds team, we grew
the business threefold; the business now sits better with new owners.
In the year, we have continued to enact ‘good governance’ and follow a
prudent approach. This has led to a number of impairments which the Board
feel are justified in the current environment (for details see notes 16 and 18
in these financial statements).
SALES
EBIT
87,594
11,997
CASH IN THE
BUSINESS
10,643
84,205
9,969
78,092
8,554
6,975
6,215
FY18
FY19
FY20
FY18
FY19
FY20
FY18
FY19
FY20*
NET REVENUE ($000s)
FY18 - FY20 CAGR 5.9%
EBIT ($000s)
FY18 - FY20 CAGR 18.4%
CASH ($000s)
FY18 - FY20 CAGR 30.9%
From continuing activities
Excluding impairments
In uncertain times a key ‘risk mitigation’ strategy is to maximise cash within the
business and Joyce has delivered a significant increase with +52% increase in liquid
funds year on year.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD CHAIRMAN’S LETTER
We are pleased to report the Joyce
Corporation has had another successful
year with an increase in our Earnings
Before Impairment, Interest and
Tax of over 20%. It is pleasing the
company was able to safely navigate
the COVID-19 environmnent while
improving its underlying performance.
This has been a huge achievement
given what the organisation has been
through this year. I am mindful that
in my last address I referred to an
‘Economics Insights’ article published
by CommSec – the title of which read:
‘Slowest retail spending in 28 years’.
Today, that environment does not feel as
bad as the last six months. Despite this,
our underlying earnings have increased
and as a Group we have generated
significant levels of cash. Delivering on
key, short term initiatives has reduced
our risk in these turbulent times and
set the Group up to take advantage of
investment opportunities in the future.
This ongoing success is founded on
our business model, under which we
partner with business owners and for
all parties to benefit from the others’
strengths. Joyce benefits from the
specialised expertise, passion and
drive of these business owners, and
Joyce provides the structure, guidance
and strategy to maximise the earnings
potential of these businesses. In some
circumstances, where there are clear
benefits for all parties, we are able to
divest so the business can continue its
journey into the future and Joyce has
funds to re-invest in other opportunities.
In FY20, we divested Lloyds Online
Auctions and that business is
now in the hands of owners who
are committed to its growth in a
challenging environment. In the four
years we partnered with Lloyds,
we helped it realise the following
commercial outcomes:
• Grew the business to three times its
original size;
• Supported the establishment of
many new ‘verticals’, expanding into
new lines of business;
• Delivered a national presence with
geographic expansion into Victoria
and Western Australia; and
• In the past 18 months led a
restructure which reduced costs
by 26%.
These achievements occurred while
implementing an improved corporate
structure, stronger governance,
systems and effective reporting. We
continue to have a good relationship
with our now ex-partners and wish
them every success in the future.
Dividends
On 27 March,2020, Joyce updated
the market to advise that the Board
had taken a prudent approach to the
payment of the interim dividend, by
deferring the final date of payment
to 25 September, 2020. This ensured
cash was maximised through a period
of uncertainty thereby minimising risk
for the organisation. Through this and
a series of other initiatives the Group
finished the financial year with 52%
more cash than 12 months earlier.
With this in mind, the Board has
determined to pay a fully franked final
dividend of 2.7c per share, payable
on 16 November 2020. The Board
acknowledges that this is below previous
years, but believes it is prudent to
preserve cash in the business whilst
the uncertainty in markets related to
COVID-19 remains.
Acknowledgements
During the second half of the financial
year we have experienced a once in
a lifetime disruptive event, with the
arrival of the COVID-19 pandemic. This
required fast and decisive action to
protect the value of our business, and I
would like to acknowledge the role and
contribution my fellow Directors have
played and making those decisions,
which have seen the Company emerge
with renewed resilience and with sound
financial strength. Special thanks to
Jeremy Kirkwood, who chaired the
COVID-19 sub-committee through the
peak of the crisis. All of the Directors
contributed their time and leadership
generously to support our Executive
team, which also spent many long
hours through this period focusing
on ways to navigate through what
is a significant global, societal and
economic crisis.
Over the past two years, our Chief
Executive Officer Keith Smith has
worked tirelessly to deliver the necessary
building blocks required for Joyce
to be successful, and this has been
especially true during the COVID-19
crisis. Our current position and result
is testament to his ability to deliver for
the Group. Joyce is stronger for his
delivery and now is well-positioned
to step into an unfamiliar future. Keith
has decided to leave Joyce in pursuit
of other opportunities. Positively
for us, he has agreed to be flexible
and support the on-boarding of new
leadership for Joyce Corporation. We
wish him every success in the future.
I too have chosen to step aside
and pass on the role of Chair. As
communicated in our announcement
of 20 July 2020, this will be to Jeremy
Kirkwood who is well qualified to lead
the company’s future growth. I will be
staying on as a Non-Executive Director.
Our Divisional General Managers have
delivered extraordinary outcomes in
an environment that many have coined
‘extraordinary times’. We decided to
close the KWB operations for a short
period, and once conditions stabilised
rapidly reopened. Bedshed’s team
managed 32 franchisees through
the pandemic, as well as managing
company-owned stores, and Lloyds
has reinvented its business model.
It is clear we have exceptional leaders
in our operating units.
Finally, our wider team have gone above
and beyond what I and the Board could
have expected for Joyce. They have
supported Management in delivering
important and rapid changes, like the
deployment of our e-Commerce offering,
while delivering strong commercial
outcomes in a very difficult environment.
I thank you all for the contribution you
have made to Joyce in what was a very
difficult, but ultimately rewarding, FY20.
With best wishes,
Mike Gurry – Chairman
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ANNUAL REPORT 2020JOYCE CORPORATION LTD CEO ADDRESS
This year has been both a challenging
and rewarding time to be the CEO
of Joyce. COVID-19 threw up both
business and personal challenges for
everyone associated with the Company,
including our people, our partners, our
suppliers, and of course our customers.
I am proud to say that we have faced
these challenges with unity and
strength. As a result, we have closed
the year in a good position with a strong
balance sheet, including in excess of
$10.6m cash on hand, and the capacity
to borrow further funds. Given the
uncertainty in retail markets we faced at
the start of 2020, we took decisive action
to both preserve cash and position
ourselves to be flexible so we could
respond to both the constraints and
opportunities of the economic effects of
COVID-19. This was made possible by
the dedication and flexibility of the wider
team, and the leadership shown by all
the Divisional General Managers.
We have seen our Continuing Operations
progress down a path of growth, both
in sales (+4.0%) and in Earnings Before
Impairment, Interest and Tax (EBIT)
(+20.3%). This is consistent with what
we budgeted and was achieved in spite
of the economic turmoil.
Our Partner Organisations
KWB
In FY20, the team delivered an EBIT
result of $11.3 million, representing
a +18.9 per cent increase on the
prior financial year. There remains
significant geography to expand into
and drive earnings further because.
KWB’s current footprint only covers
25 per cent of the Australian
population.
The organisation, having closed all
showrooms for a short period, is
currently at order levels consistent with
pre-pandemic volumes. During this
period of rapid change, it was identified
that improvements could be made to
customer engagement, and this led to
the development of a central customer
engagement team now facilitating
seven days a week engagement with
customers.
On 1 July 2020 the new showroom at
Tweed Heads was opened as planned.
This additional presence in NSW
continues the geographic expansion
and further sites are planned for FY21.
We believe key sites will become
available in the wake of the pandemic,
principally in the Northern suburbs
of Sydney.
Bedshed
Bedshed continues to add value
to Joyce with earnings in the past
financial year growing by 48.2 per cent
to $3.6 million1, which follows the 13
per cent growth in earnings recorded in
the previous year.
This result was achieved despite
a significant drop off in trade during
April. We made the conscious decision
to continue to trade across the
company-owned store and franchise
network, while taking all the necessary
precautions to protect the health of our
people and our customers. This was
in contrast to our larger competitors
who closed all or large parts of their
networks. This provided us with two
distinct advantages - an ongoing ability
to read the market, and continued
engagement with our supply chain.
In May and June when demand
increased significantly, we were ahead
of the competition and able to increase
our market share.
During the year the Bedshed team
won the initial Large Format Retailers
award for best Marketing Campaign
of the Year, which is a huge accolade
and a testament to the capability of
the team. We also saw the rollout of
our new systems across the network
of 37 stores, which focuses on supply
chain and managing the ‘point of sale’
experience for the customer. In addition
to this we launched a new e Commerce
offering, the trading performance
of this route to market has already
exceeded our expectations.
Not surprisingly, many potential
franchisees put partnership plans on
hold until they understood the potential
effect of COVID-19 on the retail sector.
We are now starting to see these
opportunities re-emerge, but we are
still in the early stages of recovery
and this type of growth is more likely
to come in the medium term. The
Bedshed team will continue to execute
on its franchisee recruitment plan,
exceptional marketing and utilisation of
new reporting technology to maintain
earnings through what we expect to be
a very fluid FY21.
Lloyds
Having sold the investment in Lloyds
Online Auctions, Joyce continues to
engage and support Lloyds to ensure a
seamless separation.
Joyce
As a Group we have followed good
governance and applied a prudent
approach in assessing the carrying
value of the assets on the balance
sheet. This has led to impairments,
$4.4m in goodwill and $1.1m in assets
(principally the Howe St property
asset). A detailed review is supplied in
Note 16 and Note 18 in these accounts.
Joyce Corporation is now well placed
to take advantage of organic and
inorganic growth opportunities in the
future. We have increased our financial
strength and resilience despite the
commercial impacts of the pandemic.
Having delivered on what I had planned
for the CEO role I see this as a natural
point to hand over to a new CEO who
will take Joyce on to the next phase
of its journey. I would like to thank the
Board, Executive, Partners and Teams
for their support during my tenure and
wish the Company every success in
the future.
Sincerely,
Keith Smith
1 – excluding impairments
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WHO
ARE WE?
Joyce Corporation is a fast-growing
investment Group that partners with
quality, small to medium Australian
businesses that have a strong
potential to grow. We use our unique
capability in business development
and governance, and combine
that with our partners’ energy and
passion to create better businesses
that deliver increased value for all
our stakeholders.
Joyce Corporation aims to deliver
above average returns and a strong
dividend stream to its shareholders.
Our business model is built on high
ethical standards and a corporate
culture driven by relentless,
continuous improvement.
Our partners include the KWB
Group, a leader in the home
renovations market focusing
on kitchens and wardrobes.
Additionally, we have one of
Australia’s most recognised brands,
Bedshed, which is at the forefront
of Australia’s home furnishings
market. Until recently we partnered
with Lloyds Online Auctions,
growing that brand to become a
highly recognised Australian auction
house that carved out specialty
niches in classic cars and art.
In the four years we partnered with
Lloyds we achieve the following
together:
• Tripled the value of annual auction
Our partnership approach
sales;
We choose our business partners
based on dynamism, energy and
passion. While we commit to
ongoing, year on year growth, we
also look for opportunities that can
deliver immediate results.
• Researched and stood up multiple
new streams of business-like Art
which is now the third largest Art
auctioneer in Australia;
• Successfully restructured the
organisation, removing 26% of the
cost base at the time out of the
organisation; and
• Despite the current economic
landscape, improved moral.
We are constantly reviewing a
range of markets for opportunities
to create value for our partners
and shareholders. We also take
a disciplined approach to our
partnerships, which are regularly
reviewed to ensure that we are
aligned in delivering value for all of our
stakeholders. Where we can continue
to add value, we will, but we do not
assume that value can be added
indefinitely. Where others can add
greater value, we support businesses
like Lloyds move to a different path.
The Board and the Executive are
focused on growing our current
business divisions and attracting
new partners to support the growth
plans of the Group.
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50.5%
MALE
49.5%
FEMALE
Joyce believes that a
diverse workforce delivers
the best outcomes for the
Group, and the ability for us
to access input to decisions
from multiple viewpoints
and backgrounds achieves
the best outcomes. Our
inclusive view is reflected
in our gender balance.
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Joyce
The Group entity has finalised a lot of the development
projects that were underway in the year, and as a result
of this the whole Group was well placed to deal with the
demands of the pandemic. We had already established the
capability to have large parts of our workforce work from
home offices.
In the year, we incurred a number of ‘one time’ costs which by their nature
we do not anticipate will occur in FY21. The Executive team are focused on
operating a low-cost Group which is critical for Joyce’s current size and
complexity. To that end, as a part of the CEO transition, the Board have
commissioned a review of the corporate structures to establish the optimal
design for the Group going forwards.
There remains a lot of potential for the Group.
Our values
Internally, we describe these as the ‘Joyce Way’ and it defines how we do
business. We value business partners and staff alike, and we engage in an
open and honest way with everyone we do business with. Strong values make
great business sense. They help us maintain great relationships with our
people, our partners and our customers.
By being true to our values, we develop long term relationships with our
partners to drive growth and value for all parties. By developing our culture to
support these long term business outcomes, we expect to maximise future
earnings despite uncertainty in the broader economic environment.
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FY20 BUSINESS
UNIT PERFORMANCE
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JOHN BOURKE
MANAGING DIRECTOR - KWB GROUP
CHRIS PALIN
FINANCIAL DIRECTOR - KWB GROUP
KWB Group
KWB delivers outstanding solutions to customers looking
to renovate their homes. KWB’s kitchen and wardrobe
showroom network of 21 sites reaches approximately 25%
of Australia’s population.
The economic impact of the
COVID-19 pandemic and associated
government restrictions saw us
close our showroom network
for most of April. Despite the
closures, customer interest in our
offering was significantly higher
than expected. In response we
accelerated and expanded our
online and telephone channels
to maximise our interaction with
customers during this difficult time.
By the end of April, the KWB team
was confident demand would
continue to be robust enough to
enable a phased reopening of the
showroom network. Customers
rapidly re-engaged with the brand
and the levels of orders increased
quickly, with June orders returning
to pre-COVID-19 levels. We continue
to see strong demand for our high-
quality products and services.
We are pleased to report that as a
result KWB achieved its budgeted
EBIT growth, completing the FY20
year at $11.3m. This result is an
improvement on the prior year
of 18.9% and has been achieved
despite the short-term impact of
COVID-19.
The KWB management team
continues to focus on growing
earnings into the future. Principally,
this will be achieved by expanding
the number of showrooms in
the network. Our Tweed Heads
showroom opened as planned on
1 July 2020 – an important step in
growing our NSW footprint. Plans
to deploy more showrooms are in
place, targeting the rapidly growing
northern suburbs of Sydney. Timing
is being carefully considered given
the uncertainty around State
imposed restrictions associated
with the COVID-19 pandemic.
SALES
67,498
64,964
59,937
FY18
FY19
FY20
NET REVENUE ($000s)
FY18 - FY20 CAGR 6.1%
EBIT
11,269
9,480
8,372
FY18
FY19
FY20
EBIT ($000s)
FY18 - FY20 CAGR 16.0%
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ANNUAL REPORT 2020JOYCE CORPORATION LTD FY20 BUSINESS
UNIT PERFORMANCE
SALES
20,096
19,241
18,113
FY18
FY19
FY20
NET REVENUE ($000s)
FY18 - FY20 CAGR 5.3%
EBIT
1,998
3,593
2,424
FY18
FY19
FY20
EBIT ($000s)
FY18 - FY20 CAGR 34.1%
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In the year we exceeded the
earnings our strategic plan
called for with increases to our
EBIT number of 48.2%.
Gavin Culmsee
GENERAL MANAGER - BEDSHED
Bedshed
Bedshed is an Australian household name, delivering high quality bedroom furnishings.
The 37-store network is run and owned by franchisees, except for five company-owned
stores which operate in Queensland and Western Australia.
The franchisee model has proved
enormously successful for
Bedshed, and we see this as the
key opportunity to grow the overall
Bedshed business. Additional
resources were added to the team
in FY20 to focus on attracting new
franchisees. Significant interest
had been generated by the half
year and the team were engaging
with over 100 live enquiries. The
onset of COVID-19 has delayed
new franchisees coming on board,
however a good level of interest
remains.
At the half year, we shared the
growth in earnings compared to
the same period in the previous
year, which was +20.9% up. Growth
continued until late March, when
the impacts of the pandemic were
felt. The decision was made for the
whole network to stay open, subject
to a rigorous health and safety
regime to protect our customers
and staff.
This was in contrast to many of
our competitors who shut all or
significant parts of their networks.
The advantage for Bedshed was
threefold:
1. By being open we could get
first-hand indicators of the
rapidly changing demand and
react to them;
2. We could continue interaction
with our supply chain and
manage inventory coming
into the network, as well as
maintaining critical supply chain
and supplier relationships, and;
3. Having staff available to close
out key technology and process
projects.
The month of April was significantly
below the same period in the prior
year. Near the end of the month we
experienced a significant increase
in the level of orders. By being open
and trading we were able to react to
the change and resource our stores
appropriately, and most critically,
manage our supply chain. This
placed us ahead of the competition
and continues to be of benefit.
This rapid rise in orders continued
through May, resulting in a record
month of sales for the organisation.
This was followed by a new record for
sales in June. Some of this demand
is through a shift in consumer buying
patterns, however we have also
secured a gain in market share.
The spending shift is from consumers
spending less on holidays and
other services, and some of those
savings have been allocated to
spending on consumer goods. The
gain in share was supported by high
quality marketing campaigns in the
year, including the Bedroom Report
campaign which saw Bedshed win
a coveted ‘Marketing Campaign of
the Year’ Large Format Retailers
Association (LFRA) award.
Looking forward, it is highly unlikely
that demand will remain at these
elevated levels. We have recently
closed 10 franchisee stores in Victoria
in line with the State Government’s
lock down restrictions. Through these
changes the team and our franchisee
partners have demonstrated agility
and the ability to benefit from a rapidly
changing environment. We believe
these capabilities will place Bedshed
in the best position to navigate FY21,
which will be an unpredictable year.
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BOARD OF
DIRECTORS
MIKE GURRY AM
Chairman
KAREN GADSBY
Deputy Chair
DAN SMETANA
Non-Executive Director
Karen was appointed Deputy
Chair in May 2019 and has been a
Non-Executive Director since July
2017. She has 19 years Chair/Non-
Executive Director experience and
has held directorships across the
publicly listed, private, government
and not- for-profit sectors within
Australia, including Strategen
Environmental Consulting Pty
Ltd, Landgate, Forest Products
Commission, Western Health (Vic.),
Community First International and
GMHBA (Vic). She is currently a
Non-Executive Director of Talisman
Mining Limited and Mindful
Meditation Australia. Karen is a
Chartered Accountant who worked
as a senior executive with North
Limited for 13 years across finance,
commercial, risk, IT and human
resources.
Dan was Chair of Joyce Corporation
Ltd for 34 years, stepping down in Nov
2018, and he remains on the Board as
a Non-Executive Director. He has had
50 years Chair/Non-Executive Director
experience and has held directorships
across the publicly listed, private,
government and not-for-profit sectors
within Australia and internationally,
including Defence Reserves Support
Council – WA, Youth Focus, Western
Power, West Australian Symphony
Orchestra, Edge Employment, WA
Federation of PCYC and Korab
Resources Limited. Dan is a Certified
Practicing Accountant (FCPA) who
has worked across many industries
including mining, manufacturing and
retail. Dan was awarded the Centenary
Medal for Service to Commerce and
the Community in 2003.
Mike was appointed Chair in
Dec 2018 and has been a Non-
Executive Director since 2008. He
has 35 years Chair/Non-Executive
Director experience and has held
directorships across the publicly
listed, private, government and
not-for-profit sectors within
Australia and internationally,
including Foundation Housing
Ltd, Australian Health Insurance
Association (AHIA), the Australian
Information Industry Association
(AIIA), the West Australian Ballet
and Integrated Group Ltd. He is
currently a Non- Executive Director
of St John Ambulance WA. Mike
is a pure mathematician and
statistician who has worked as a
senior executive for IBM and CEO of
both an international management
consulting company and a large WA
based insurance company. He has
consulted to Government at both
State and Federal level, and worked
in numerous industries including
Banking, Insurance, Health,
Manufacturing, Mining, Transport
and Energy. Mike was awarded the
Order of Australia (AM) in 2018.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
TIM HANTKE
Non-Executive Director
JEREMY KIRKWOOD
Non-Executive Director
TRAVIS McKENZIE
Non-Executive Director
Tim has been a Non-Executive
Director since 2006. He has 30 years
Non-Executive Director experience
across the publicly listed, private,
government and not-for-profit sectors
within Australia, including Snap
Printing and Lifeline, as well as serving
on various advisory boards for the
Federal Government. He is currently
a Non-Executive Director of Mrs
Macs Pty Ltd and Bentech Assistive
Technologies Inc. Tim has a B Comm.
(UWA) degree, and is a Fellow Member
of AICD, AIM and a Member of AMA.
He has worked in a wide variety of
industries including building materials,
food manufacturing, government
relations, printing and franchising.
Jeremy was appointed a Non-Executive
Director in January 2020. He has
extensive experience as a Director of
listed and private companies. Jeremy
is currently a Director of Talisman
Mining Limited (Chair until July 2020),
Trustee of the RE Ross Trust and
Director of Hillview Quarries Pty Ltd,
Nurturecare Pty Ltd and Independent
Schools Victoria. He is a principal
of Pilot Advisory Group and was
previously a Managing Director at
Credit Suisse, Morgan Stanley and
Austock. He has extensive experience
in corporate strategy, merger and
acquisitions, investment banking and
global capital markets.
Travis was appointed a Non-Executive
Director in July 2019. He has had
6 years Executive Director experience
on private boards within Australia,
including Celsius Developments
Pty Ltd. He is currently an Executive
Director of Alma Road Rise Pty Ltd
and 78 Degrees Pty Ltd. Travis is a
qualified Lawyer who has worked
in derivatives and foreign exchange
trading in Europe and the Americas, as
well as in Australia. He has worked in
multiple industries and more recently
has focused on property and property
development.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
EXECUTIVE
TEAM
KEITH SMITH
CEO / Company Secretary
DEREK FOWLER
Chief Financial Officer
Derek was appointed Chief Financial
Officer of Joyce Corporation in
August 2019. He brings broad
financial, commercial and
operational experience, having led
finance and commercial functions
in global organisations across a
multitude of industries, including
Oil & Gas, Mining Services and
Engineering. These include Falck,
Oceaneering, and AGR. Derek holds
a Bachelor of Business from Curtin
University, a Certificate in Corporate
Governance, is a qualified CPA and
graduate of the AICD Company
Directors Course.
Keith joined the team in May 2018
and has previously worked across
Europe and the Americas, which
allows a global perspective to be
taken and the ability to present
different solutions to local issues.
Since coming to Australia, he has
led Finance, Technology, Operations
and Company Secretarial functions
for publicly listed and not-for-profit
(NFP) organisations. Exposure to
technology in its broadest form
and recent emerging technology
has provided Keith with unique
experiences and awareness of the
potential ‘digitalisation’ has for
commercial and NFP entities.
Keith has led divisions of a large
international Corporate during his
time in the United States. From
this, he has extensive experience in
successfully leading businesses in
diverse industries to achieve their
commercial and cultural goals.
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DIRECTORS’ REPORT
DIRECTORS’ REPORT
YEAR ENDED
30 JUNE 2020
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 2020 (“the Financial
Year”).
DIRECTORS
The names of the Company’s Directors in office during the Financial Year and until the date of this report are as
stated below. Directors were in office for this entire period unless otherwise stated.
Name
Position
Appointment date
Resignation date
Michael Gurry
Non-Executive Director (Chair) (a)
8 May 2007
Karen Gadsby
Non-Executive Director (Deputy Chair)
1 July 2017
Daniel Smetana
Non-Executive Director
30 November 1984
Timothy Hantke
Non-Executive Director
Travis McKenzie
Non-Executive Director
9 June 2006
1 July 2019
Jeremy Kirkwood
Non-Executive Director (a)
14 January 2020
-
-
-
-
-
-
Anthony Mankarios
Non-Executive Director (b)
1 July 2019
24 November 2019
(a) In the ASX announcement dated 20 July 2020, the Company communicated the planned transition of the
Chair. Michael Gurry announced that he will be standing down as Chair at this year’s Annual General Meeting in
November. Jeremy Kirkwood will take over as the Joyce Chair following the 2020 Annual General Meeting.
Michael Gurry will stay on as a Non-Executive Director.
(b) Change of role from Executive Director to Non-Executive Director as of 1 July 2019. Resigned 24 November
2019.
SECRETARIES
Keith Smith
Anita Hollenberg
Group Company Secretary (a)
Company Secretary
(a) In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised
his intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
PRINCIPAL ACTIVITIES
During the Financial Year the principal continuing activities of the Consolidated Entity consisted of being:
- Majority owner of 51% of KWB Group Pty Ltd, operator of retail kitchen and wardrobe showrooms;
-
- Owner of five Bedshed retail stores.
Franchisor of the Bedshed chain of retail bedding stores; and
The significant change in the nature of the principal activity of the Consolidated Entity was the disposal in June
2020 of the 56% majority ownership of Lloyds Online Auctions Pty Ltd, an online auctioneer and valuer.
REVIEW AND RESULTS OF OPERATIONS
During the Financial Year, the Consolidated Entity achieved revenue from continuing operations of $87.59 million
(2019: $84.20 million) and a profit from continuing operations before tax of $5.77 million (2019: $9.11 million)
and after tax of $2.67 million (2019: $6.38 million). These profit numbers were after deducting $5.52 million
(2019: nil) of impairments.
18
Joyce Corporation Ltd Annual Report 2020
18
ANNUAL REPORT 2020JOYCE CORPORATION LTD
DIRECTORS’ REPORT
Financial position
YEAR ENDED
30 JUNE 2020
At 30 June 2020, the Consolidated Entity had total equity of $21.65 million (2019: $26.21 million) including non-
controlling interest and dividend payments of $2.80 million in the Financial Year (2019: $3.55 million). Cash and
cash equivalents increased from $6.97 million at 30 June 2019 to $10.64 million at 30 June 2020. Unused finance
facilities were $4.41 million (2019: $0.28 million).
Bank facilities
The Consolidated Entity has a long-term debt funding facility with the Commonwealth Bank of Australia in place,
in addition to a short-term debt funding facility with the National Australia Bank. Refer to Note 23 in relation to
the limits and expiry dates.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Consolidated Entity will look to further develop the KWB business and continue to invest in additional stores
down the East Coast of Australia. The Bedshed business will develop through the expansion of its network of
franchised stores and improving the financial performance of the five company-owned stores. The Company
continues to pursue other investment opportunities.
DIVIDENDS
Dividends declared or paid during the Financial Year are as follows:
Dividends paid or payable
Ordinary shares:
FY18 final fully franked dividend of 6.0 cents per share
FY19 interim fully franked dividend of 5.0 cents per share
FY19 second interim fully franked dividend of 1.7 cents per share
FY19 final fully franked dividend of 5.0 cents per share
FY20 interim fully franked dividend of 5.0 cents per share (a)
Total dividends declared or paid
2020
$000
2019
$000
-
-
-
1,397
1,404
2,801
1,678
1,399
476
-
-
3,553
(a) The FY20 interim fully franked dividend of 5.0 cents per share resolved on 25 February 2020 is payable on 25
September 2020, (deferred from 6 May 2020 due to the commercial uncertainty surrounding the COVID-19
pandemic).
The Directors resolved that a FY20 final dividend of 2.7 cents per share, fully franked, be paid by Joyce Corporation
Limited on 16 November 2020 to all shareholders registered as at the record date of 10 November 2020.
Joyce Corporation Ltd Annual Report 2020
19
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
DIRECTORS’ REPORT
YEAR ENDED
30 JUNE 2020
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
A significant change in the principal activity of the Consolidated Entity was the disposal in June 2020 of the 56%
majority ownership of Lloyds Online Auctions Pty Ltd, an online auctioneer and valuer.
During the Financial Year the KWB Group closed 30 retail kitchen showrooms for a period of up to 4 weeks in
relation to concerns for the health and safety of its staff and customers during the Coronavirus (COVID-19)
pandemic.
The Bedshed franchising, Bedshed company-owned stores and online auctions business segments remained
open and fully operational within COVID-19 health and safety precautions during the Financial Year.
As a result of the COVID-19 pandemic, Directors, KMP and Executive of the Consolidated Entity agreed to modify
their remuneration arrangement to defer 50% of their director fee and/or salary until the trading environment
normalised. In each case, the fee and/or salary deferred during the COVID-19 pandemic period will be aggregated
and paid to the KMP or Executive once the trading environment has normalised. Refer to Note 30(a) in relation
to the amount owing to Directors, KMP and Executive at 30 June 2020 under this modification.
Other than the disclosed above, there were no other significant changes in the state of affairs of the Consolidated
Entity during the year ended 30 June 2020.
SIGNIFICANT AFTER REPORTING DATE EVENTS
The FY20 interim fully franked dividend of 5.0 cents per share resolved on 25 February 2020 is payable on 25
September 2020, (deferred from 6 May 2020 due to the commercial uncertainty surrounding the COVID-19
pandemic).
In July 2020, KWB Group Pty Ltd updated the expiry date of its bank guarantee facility and business markets loan
held with the National Australia Bank to 31 July 2021. All other limits and terms remain the same.
In the ASX announcement dated 20 July 2020, the Company communicated the planned transition of the Chair.
Michael Gurry announced that he will be standing down as Chair at this year’s Annual General Meeting in
November. Jeremy Kirkwood will take over as the Joyce Chair following the 2020 Annual General Meeting.
In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised his
intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
In August 2020, Derek Fowler left the Company as CFO, at the end of his fixed term contract.
The full impact of the COVID-19 pandemic continues to evolve at the date of this report. The Consolidated Entity
is therefore uncertain as to the full impact the pandemic will have on the wider economy and as a result on its
financial condition, liquidity, and future results of operations.
In August 2020 the 10 Bedshed stores located in Melbourne closed to the public for 6 weeks as per the
government directive, they have maintained a presence online.
The Directors resolved that a FY20 final dividend of 2.7 cents per share, fully franked, be paid by Joyce
Corporation Limited on 16 November 2020 to all shareholders registered as at the record date of 10 November
2020.
The Consolidated Entity is actively monitoring the global and national situation and its impact on the
Consolidated Entity’s financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily
evolution of the COVID-19 pandemic and government’s responses to curb its spread, at this point the
Consolidated Entity is not able to estimate the effects of the COVID-19 pandemic on its results of operations,
financial condition, or liquidity for the 2021 financial year.
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, the results of those
operations, or the Consolidated Entity’s state of affairs.
20
Joyce Corporation Ltd Annual Report 2020
20
ANNUAL REPORT 2020JOYCE CORPORATION LTD
YEAR ENDED
30 JUNE 2020
DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
Michael Gurry - Chair. Age 73.
Bachelor of Science (UWA), Dip AICD, FAIM, SF Fin, FAICD
Other current directorships of listed companies
None
Former directorships of listed companies in last 3 years
None
Special responsibilities
Chair of the Joyce Board (will be standing down as Chair at this year’s Annual General Meeting in November).
Chair of the Lloyds Board
Director Bedshed until 17 December 2019
Member of the Audit and Risk Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Chair KWB Board until 13 August 2019
Member KWB Board
Member Covid-19 Sub Committee from March to May 2020
Interests in shares and options held directly, indirectly, or beneficially
56,878 ordinary shares
Karen Gadsby – Deputy Chair. Age 57.
Bachelor of Commerce, FCA, MAICD
Other current directorships of listed entities
Talisman Mining Ltd
Former directorships of listed companies in the last 3 years
None
Special responsibilities
Deputy Chair from 1 May 2019
Chair KWB Board from 13 August 2019
Alternate Director Lloyds Online Auctions Pty Ltd Board until 3 March 2020
Director Bedshed until 17 December 2019
Chair of the Audit and Risk Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Member Covid-19 Sub Committee from March to May 2020
Interests in shares and options held directly, indirectly, or beneficially
20,000 ordinary shares
Joyce Corporation Ltd Annual Report 2020
21
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
DIRECTORS’ REPORT
YEAR ENDED
30 JUNE 2020
Daniel Smetana - Non-Executive Director, former Chair (January 1985 to November 2018). Age 76.
Dip Comm, FCPA, FAIM, FAICD
Other current directorships of listed companies
None
Former directorships of listed companies in last 3 years
Korab Resources Ltd
Special responsibilities
Director Bedshed until 17 December 2019
Member of the Audit and Risk Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Interests in shares and options held directly, indirectly, or beneficially
11,062,440 ordinary shares
Timothy Hantke – Non-Executive Director. Age 72.
Bachelor of Commerce, FAIM, FAICD
Other current directorships of listed companies
None
Former directorships of listed companies in last 3 years
None
Special responsibilities
Director Lloyds Online Auctions Pty Ltd Board until 3 March 2020
Director KWB Board until 28 February 2020
Chair Bedshed
Member of the Audit and Risk Committee
Chair of the Remuneration Committee
Chair of the Nomination Committee
Interests in shares and options held directly, indirectly, or beneficially
20,000 ordinary shares
Travis McKenzie – Non-Executive Director (appointed 1 July 2019). Age 42.
Bachelor of Law, Bachelor of Commerce, GAICD
Other current directorships of listed companies
None
Former directorships of listed companies in last 3 years
None
Special responsibilities
Alternate Director Bedshed from 17 December 2019
Member of the Audit and Risk Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Interests in shares and options held directly, indirectly, or beneficially
15,086 ordinary shares
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Joyce Corporation Ltd Annual Report 2020
22
ANNUAL REPORT 2020JOYCE CORPORATION LTD
DIRECTORS’ REPORT
YEAR ENDED
30 JUNE 2020
Jeremy Kirkwood – Non-Executive Director (appointed 14 January 2020). Age 57.
Bachelor of Commerce ANU
Other current directorships of listed entities
Talisman Mining Ltd
Kin Mining NL
Zenitas Healthcare Ltd
Former directorships of listed companies in the last 3 years
Special responsibilities
Chair Covid-19 Sub Committee from March to May 2020
Member of the Audit and Risk Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Interests in shares and options held directly, indirectly, or beneficially
Nil
Anthony Mankarios – Non-Executive Director (from 1 July 2019 to 24 November 2019). Age 53.
MBA, FAICD, CFTP
Other current directorships of listed companies
Inventis Ltd
Former directorships of listed companies in last 3 years
None
Special responsibilities
Director Lloyds Online Auctions Pty Ltd Board until 26 August 2019
Director KWB Board until 13 August 2019
Director Bedshed until 26 August 2019
Member of the Audit and Risk Committee until 24 November 2019
Member of the Remuneration Committee until 24 November 2019
Member of the Nomination Committee until 24 November 2019
Interests in shares and options held directly, indirectly, or beneficially
Nil ordinary shares
SECRETARIES
Keith Smith – Acting CEO (from 1 July 2019 to 30 March 2020), CEO (from 31 March 2020), Group Company
Secretary. Age 54.
Accounting BSc (Hons), ACA, CA ANZ, AICD, GIA (Cert)
In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised his
intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
Anita Hollenberg – Company Secretary (from 27 August 2019). Age 38.
Bachelor of Commerce, CA ANZ, GIA (Cert)
Joyce Corporation Ltd Annual Report 2020
23
23
ANNUAL REPORT 2020JOYCE CORPORATION LTD
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
YEAR ENDED
30 JUNE 2020
The numbers of meetings of the Company’s Board of Directors and of each Board Committee held during the
Financial Year, and the number of meetings attended by each Director were:
Directors
Board of
Directors
Audit & Risk
Committee
Remuneration
Committee
Nomination
Committee
Michael Gurry
Karen Gadsby
Daniel Smetana
Timothy Hantke
Travis McKenzie
Jeremy Kirkwood
Anthony Mankarios
A
15
15
15
15
15
11
2
B
13
15
15
15
14
11
2
A
4
4
4
4
4
3
1
B
4
4
4
4
4
3
1
A
2
2
2
2
2
1
1
B
2
2
2
2
2
1
1
A
2
2
2
2
2
2
-
B
2
2
2
2
2
2
-
A = Number of meetings held during the time the Director held office or was a member of the committee
during the Financial Year.
B = Number of meetings attended during the time the Director held office or was a member of the committee
during the Financial Year.
24
Joyce Corporation Ltd Annual Report 2020
24
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
REMUNERATION REPORT – AUDITED
YEAR ENDED
30 JUNE 2020
The remuneration report is set out under the following parts:
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
F. Voting at the 2019 Annual General Meeting
G. Independent salary and incentive review
H. Loans or other transactions with Directors and Key Management Personnel
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 KMP of the Consolidated Entity
include:
Key Management Personnel
Position Held
Keith Smith (a)
Derek Fowler
John Bourke
Chris Palin
Lee Hames
Gavin Culmsee
Acting CEO, Joyce Corporation Ltd to 30 March 2020
CEO, Joyce Corporation Ltd from 31 March 2020
Group Company Secretary, Joyce Corporation Ltd
CFO, Joyce Corporation Ltd from 19 August 2019 to
7 August 2020
Managing Director, KWB Group Pty Ltd
Finance Director, KWB Group Pty Ltd
Director and COO, Lloyds Online Auctions Pty Ltd
General Manager, Bedshed Franchising Pty Ltd
(a) In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised
his intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
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 include reviewing and making recommendations on
remuneration policies for the Consolidated Entity including those governing the Directors and the Key
Management Personnel.
The Remuneration Committee comprises a majority of Non-Executive Directors and at least three members.
The Chair of the Remuneration Committee is appointed by the Board and is a Non-Executive Director.
The Remuneration Committee meets as and when required by the Chair and at least twice annually. The
Committee may invite persons deemed appropriate to attend meetings and may take any independent advice
as it considers necessary or appropriate. Any Committee member may request the Chair to call a meeting.
During the year the Remuneration Committee reviewed and revised its Charter and Policy and reviewed its
effectiveness.
Joyce Corporation Ltd Annual Report 2020
25
25
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONTINUED)
Remuneration policies
The objective of the Consolidated Entity’s executive reward framework is to ensure reward 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 to organizational results;
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.
The framework aligns to shareholders’ interests by:
- Having economic profit as a core component of plan design;
-
Focusing 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
- Attracting and retaining high caliber executives.
It aligns to program participants’ interests by:
Rewarding capability and experience;
Reflecting competitive reward for contribution to growth in shareholder wealth;
Providing a clear structure for earning rewards; and
Providing recognition for contribution.
-
-
-
-
Non-Executive Director’s remuneration
Fees and payments to Non-Executive Directors reflect the demands that 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 Chair’s fees are determined
independently to the fees of Non-Executive Directors, based on comparative roles in the external market. The
Chair is not present at any discussions relating to the determination of their own remuneration.
The current base remuneration was last independently reviewed in December 2016. Executive Directors who
are members of a committee do not receive additional fees for membership of the committee. Non-Executive
Directors receive additional fees for the Chairing of a committee. Since that time fees have been increased by
the rate of CPI.
Non-Executive Directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The limit currently stands at $700,000 per annum and was
approved by shareholders at the Annual General Meeting on 30 November 2017.
26
Joyce Corporation Ltd Annual Report 2020
26
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONTINUED)
Executive remuneration
Fixed Component
The level of fixed remuneration is set 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, the relevant segment and individual
performance.
Variable Component – Short-Term Incentives
Goals are set at the start of each financial year and consist of one or more key performance indicators (KPI's)
covering both financial and non-financial, corporate and individual measures of performance. Included in the
measures are targets for profit, cash balances 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 KPI targets. When the Consolidated Entity, or the relevant segment, and
the individual achieve their KPIs, the Board will reward the KMP with a cash bonus paid after the end of the
financial year being assessed.
A percentage of a pre-determined maximum amount is awarded depending on the results achieved. No bonus
is awarded where performance falls below the minimum.
Variable Component - Long Term Incentives
The Remuneration Committee offers Performance Rights in the Long-Term Incentive Scheme.
B. SERVICE AGREEMENTS
This remuneration report outlines the Director and Executive remuneration arrangements with the
Consolidated Entity in accordance with the requirements of the Corporations Act 2001 and its regulations.
For the purposes of this report, KMP 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 Consolidated Entity.
For the purposes of this report, the term "Executive" encompasses the Directors, Key Management Personnel
and other senior executives of the organisation.
Joyce Corporation Ltd Annual Report 2020
27
27
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
B. SERVICE AGREEMENTS (CONTINUED)
Details of the Key Management Personnel (including the Executives) of the Consolidated Entity:
Name
Position held
Michael Gurry
Non-Executive Director, Chair of the Board
Karen Gadsby
Non-Executive Director, Deputy Chair of the Board, Chair of the Audit Committee
Daniel Smetana
Non-Executive Director
Timothy Hantke
Non-Executive Director, Chair of the Remuneration Committee
Travis McKenzie
Non-Executive Director from 1 July 2019
Jeremy Kirkwood
Non-Executive Director from 14 January 2020
Anthony Mankarios
Non-Executive Director to 24 November 2019
Keith Smith (a)
Derek Fowler
John Bourke
Chris Palin
Lee Hames
Acting CEO to 30 March 2020, CEO from 31 March 2020,
Group Company Secretary
CFO Joyce Corporation Ltd from 19 August 2019 to 7 August 2020
Managing Director KWB Group Pty Ltd
Finance Director KWB Group Pty Ltd
Director and COO of Lloyds Online Auctions Pty Ltd
Gavin Culmsee
General Manager Bedshed Franchising Pty Ltd
(a) In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised
his intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
The employment conditions of all KMP are formalised in contracts. The directors and CEO are engaged by Joyce
Corporation Ltd. All Executives, except for Derek Fowler (who had a fixed term contract), are permanent
employees of subsidiaries within the Consolidated Entity.
Contractual arrangements
Remuneration arrangements for KMP are formalised in employment agreements. Details of these contracts is
set out below.
Term of agreement
Notice period in
months
Termination
payment in months
Keith Smith
Derek Fowler
Chris Palin
John Bourke
Lee Hames
Gavin Culmsee
rolling
1 year
rolling
rolling
rolling
rolling
3
1
3
3
3
3
3
-
3
3
3
3
The Consolidated Entity can terminate each contract by providing the required written notice period or
providing payment in lieu of the notice period (based on the fixed component of the KMP’s remuneration). The
Consolidated Entity may terminate a KMP or 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.
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Joyce Corporation Ltd Annual Report 2020
28
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
B. SERVICE AGREEMENTS (CONTINUED)
Contractual arrangements (continued)
As a result of the COVID-19 pandemic, Directors, KMP and Executive of the Consolidated Entity agreed to
modify their remuneration arrangement to defer 50% of their director fee and/or salary until the trading
environment normalised. In each case, the fee and/or salary deferred during the COVID-19 pandemic period
will be aggregated and paid to the KMP or Executive once the trading environment has normalised.
Refer to part H in relation to the amount owing to Directors, KMP and Executive at 30 June 2020 under this
modification.
Refer to part C in relation to base salary and superannuation.
Related party transactions with Key Management Personnel
Refer to part H in relation to transactions with Key Management Personnel.
Joyce Corporation Ltd Annual Report 2020
29
29
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
C. DETAILS OF REMUNERATION
The remuneration summary of Key Management Personnel for the Financial Year is set out below.
Short-term benefits
Post
employment
benefit
Other
Long-term benefits
Salary &
Fees
Cash
Bonus
Non-Cash
Super
LSL & AL
Share-based
payment (e)
Performance
rights
Total
% relating to
performance
132,429
80,667
80,667
80,667
35,650
30,893
353,386
794,359
794,359
-
-
-
-
-
-
-
-
-
(a)
(b)
(c)(d)
-
-
-
-
-
-
-
-
-
296,347
154,545
361,492
284,831
171,923
270,320
120,000
-
98,084
77,518
47,620
59,270
-
-
-
-
7,057
-
12,581
7,663
7,663
7,663
3,387
2,935
8,305
50,197
50,197
28,153
14,682
43,660
34,509
14,745
25,680
-
-
-
-
-
-
-
-
-
24,869
12,821
-
-
-
27,552
1,539,458
402,492
7,057
161,429
65,242
-
-
-
-
-
-
189,474
189,474
189,474
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
145,010
88,330
88,330
88,330
39,037
33,828
551,165
-
-
-
-
-
-
-
1,034,030
1,034,030
0.0%
0.0%
-
-
-
-
-
19,833
469,369
182,048
503,236
396,858
241,345
402,655
25.6%
-
19.5%
19.5%
19.7%
19.6%
19,833
2,195,511
19.2%
2020
Non-executive
Directors
Michael Gurry
Karen Gadsby
Daniel Smetana
Timothy Hantke
Travis McKenzie
Jeremy Kirkwood
Anthony Mankarios
Total Non-Executive
Directors
Total Directors
Other Key
Management
Personnel
Keith Smith
Derek Fowler
John Bourke
Chris Palin
Lee Hames
Gavin Culmsee
Total Other Key
Management
Personnel
Total Remuneration
2,333,817
402,492
7,057
211,627
65,242
189,474
19,833
3,229,541
13.1%
(a) Appointed 1 July 2019.
(b) Appointed 14 January 2020.
(c) Change of role from Executive Director to Non-Executive Director as of 1 July 2019. Resigned 24 November 2019.
(d) Salary & fees being:
- Termination payment of $245,966
- Non-Executive Director fees of $107,420.
(e) Refer to Remuneration Report Part (D) in relation to details of the share-based payment.
30
Joyce Corporation Ltd Annual Report 2020
30
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
C. DETAILS OF REMUNERATION (CONTINUED)
The remuneration summary of Key Management Personnel for the prior financial year is set out below.
Short-term benefits
Post
employment
benefit
Other
Long-term benefits
Non-Cash
Super
LSL & AL
Share-based
payment
Performance
rights
2019
Michael Gurry
Karen Gadsby
Daniel Smetana
Timothy Hantke
Total Non-Executive
Directors
Executive Director
Anthony Mankarios
Total Directors
Other Key
Management
Personnel
Keith Smith
Keith Gray
John Bourke
Chris Palin
Andrew Webber
Lee Hames
Gavin Culmsee
Total Other Key
Management
Personnel
Salary &
Fees
Cash
Bonus
115,982
86,073
120,772
86,073
408,900
-
-
-
-
-
(a)
321,572
730,472
120,000
120,000
-
-
-
-
-
-
-
242,149
114,003
326,946
258,393
50,000
185,433
236,210
-
19,752
94,767
74,897
-
-
61,683
-
-
-
-
-
4,099
-
(b)
(c)
(c)
(d)
(e)
(b)
11,018
8,177
11,473
8,177
38,845
6,637
45,482
23,004
11,073
40,063
31,663
4,750
15,894
23,421
-
-
-
-
-
-
-
15,781
48,383
-
-
-
4,183
26,750
1,413,134
251,099
4,099
149,868
95,097
Total Remuneration
2,143,606
371,099
4,099
195,350
95,097
Total
% relating to
performance
127,000
94,250
132,245
94,250
-
-
-
-
447,745
0.0%
448,209
895,954
26.8%
13.4%
280,934
193,211
461,776
364,953
54,750
209,609
348,064
-
10.2%
20.5%
20.5%
-
-
17.7%
1,913,297
13.1%
2,809,251
13.2%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(a) Anthony Mankarios was paid a cash bonus at the start of the financial year based on the achievement of key performance criteria related to the
year ended 30 June 2018. These include profit goals and the successful completion of predetermined events set by the non-executive directors. For
the year ended 30 June 2019 the short-term incentive bonus performance targets were not met and no payment will be made related to this
incentive. Anthony was contracted to 30 June 2019; the Board have not renewed this contract. In the announcement made to the ASX on 24 July 2019
the Board indicated that the Performance Rights voted at the 2018 AGM had been cancelled.
(b) Cash bonuses paid to other KMP's were at the discretion of the directors and were based on key performance criteria, which required
performance to meet or exceed the group budget and successfully complete predetermined targets.
(c) John Bourke and Chris Palin are both directors of KWB Group Pty Ltd their cash bonuses are related to meeting key performance criteria related
to KWB Group Pty Ltd at the date of this report.
(d) Andrew Webber's consultancy company, was paid $190k for consulting services performed by his staff members for the Lloyds Online group of
companies.
(e) Lee Hames is a Director and COO of Lloyds Online Auctions Pty Ltd.
Joyce Corporation Ltd Annual Report 2020
31
31
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
C. DETAILS OF REMUNERATION (CONTINUED)
Achievement of the short-term employment benefits
STI - Cash Bonus
The achievement of the short-term employment benefits of Key Management Personnel for the Financial Year
is set out below.
2020
Non-executive
Directors
Michael Gurry
Karen Gadsby
Daniel Smetana
Timothy Hantke
Travis McKenzie
Jerermy Kirkwood
Anthony Mankarios
Total Non-Executive
Directors
Total Directors
Other Key
Management
Personnel
Keith Smith
Derek Fowler
John Bourke
Chris Palin
Lee Hames
Gavin Culmsee
Total Other Key
Management
Personnel
Short-term employment benefits - Cash bonus
100%
level
STI
$000
%
financial
conditions
%
non-
financial
conditions
STI
financial
condition
$000
STI
non-
financial
condition
$000
% of the
financial
condition
achieved
% of the
non-
financial
condition
achieved
STI
payable
$000
-
-
-
-
-
-
-
-
-
120,000
-
98,084
77,518
47,620
72,280
415,502
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
76%
100%
-
-
-
-
24%
-
-
98,084
77,518
47,620
54,933
120,000
-
-
-
-
17,347
-
-
100%
100%
100%
100%
100%
-
-
-
-
25%
278,155
137,347
-
-
-
-
-
-
-
-
-
120,000
-
98,084
77,518
47,620
59,270
402,492
402,492
Total Cash Bonus
415,502
278,155
137,347
The original STI targets set for Keith Smith became redundant as the Financial Year progressed. These were
updated multiple times, however by the year end all iterations had been superseded by the changing
circumstances of the business environment and his role requirements. The Board of the Company concluded a
specific fixed sum rewarding Keith Smith was more appropriate than attempting to allocate the STI based on
the multiple iterations of the targets.
The non-financial targets set in Gavin Culmsee’s STI related to onboarding new franchisees into the network
and improving reporting to more effectively manage the Bedshed operations.
32
Joyce Corporation Ltd Annual Report 2020
32
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
C. DETAILS OF REMUNERATION (CONTINUED)
Achievement of the short-term employment benefits
STI - Cash Bonus
The achievement of the short-term employment benefits of Key Management Personnel for the prior financial
year is set out below.
Short-term employment benefits - Cash bonus
2019
100% level
STI
$000
%
financial
conditions
%
financial
conditions
STI
financial
condition
$000
STI
financial
condition
$000
% of the
financial
condition
achieved
% of the
non-
financial
condition
achieved
STI
payable
$000
Non-executive
Directors
Michael Gurry
Karen Gadsby
Daniel Smetana
Timothy Hantke
Total Non-Executive
Directors
Executive Director
Anthony Mankarios
Total Directors
Other Key
Management
Personnel
Keith Smith
Keith Gray
John Bourke
Chris Palin
Lee Hames
Gavin Culmsee
Total Other Key
Management
Personnel
-
-
-
-
-
-
-
-
-
120,000
120,000
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120,000
120,000
100%
-
100%
100%
100%
-
88%
-
-
-
-
-
12%
-
19,752
94,767
74,897
-
70,095
259,511
-
19,752
94,767
74,897
-
61,683
-
-
-
-
-
8,411
251,099
8,411
-
100%
100%
100%
-
100%
Total Cash Bonus
379,511
251,099
128,411
-
-
-
-
-
-
-
-
-
-
-
0%
-
-
-
-
-
120,000
120,000
-
19,752
94,767
74,897
-
61,683
251,099
371,099
Joyce Corporation Ltd Annual Report 2020
33
33
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
D. SHARE-BASED COMPENSATION
Performance rights granted as compensation
During the Financial Year, 137,032 performance rights were issued to Keith Smith and 76,387 issued to Gavin
Culmsee. These are subject to continued employment and meeting predetermined performance criteria.
During the previous financial year, 263,158 ‘FY18 performance rights’ and 272,109 ‘FY19 performance rights’
were granted to Anthony Mankarios as compensation.
Recognition and measurement
The agreements in place can only be equity-settled and are accounted for accordingly. The cost of equity-
settled transactions with employees is measured using their fair value at the date which they were granted. In
determining the fair value, where non-market-based conditions are attached, no account is taken of any
performance conditions.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which any performance conditions are met, ending on the date on which the employee becomes
fully entitled to the award (vesting date).The cumulative expense recognised for these transactions at each
reporting date reflects the extent to which the vesting period has expired and the proportion of the awards
that are expected to ultimately vest.
No expense is recognised for awards that do not ultimately vest due to a performance condition not being met.
On conversion the performance right converts to one ordinary share which carries no voting or dividend rights.
Terms and conditions
Details of the performance rights on issue are summarised below.
Beneficiary
Number of Rights Granted
Fair Value per right
Total fair value
Grant date
Expected vesting date
Vesting conditions
No. of rights expected to vest
Expense recorded
Keith Smith (a)
Gavin Culmsee
137,032
$1.55
$212,400
76,387
$1.55
$118,400
1 July 2019
30 June 2022 (3 years)
Profit metric over 3 years as described below.
Nil
$Nil
38,194
$19,733
(a) In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised
his intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
34
Joyce Corporation Ltd Annual Report 2020
34
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
D. SHARE-BASED COMPENSATION (CONTINUED)
Performance rights granted as compensation (continued)
Reconciliation of performance rights
The reconciliation of the performance rights is set out below.
Year
granted
Balance
at start
of year
Number Number Number %
Granted
during
year
Vested
Rights to deferred shares
Anthony
Mankarios
Anthony
Mankarios
Keith
Smith
Gavin
Culmsee
FY18
263,158
FY19
272,109
-
-
FY20
FY20
-
-
137,032
76,387
-
-
-
-
-
-
-
-
Forfeited
Number
%
263,158 100%
272,109 100%
Balance
at end
of year
Number
Maximum
value yet
to vest
$
nil
nil
nil
nil
-
-
-
-
137,032
$212,400
76,387
$98,667
In the ASX announcement dated 24 July 2019 the Company communicated the Performance Rights allocated
to Anthony Mankarios at the 2018 AGM had been cancelled.
Keith Smith and Gavin Culmsee share-based payment
The expense recognised in respect of the performance rights is based on the Board’s assessment of the
probability that certain milestone earnings will be achieved, measured cumulatively over the three-year period
commencing 1 July 2019 and ending 30 June 2022. There are three milestones: “threshold”; “target”; and
“stretch and above”. Meeting these milestones results in, respectively, 25%, an additional 25%, and the final
50% of the rights vesting into ordinary shares.
Keith Smith - 137,032 performance rights (a)
Consolidated Entity net
profit after tax
cumulative over 3 years
greater than ($000):
Threshold
Target
Stretch and above
No. vesting
(%)
25%
25%
50%
Expected Probability of
occurring (%)
0%
0%
0%
Total number
expected to vest
Nil
Nil
Nil
$32,184
$35,760
$42,912
Total expense expected to be recorded over the three-year vesting period
$Nil
(a) In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised
his intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
Gavin Culmsee - 76,387 performance rights
Bedshed EBIT cumulative
over 3 years greater than
($000):
Threshold
Target
Stretch and above
No. vesting
(%)
25%
25%
50%
Expected Probability of
occurring (%)
100%
100%
0%
Total number
expected to vest
19,097
19,097
Nil
$6,570
$7,300
$8,760
Total expense expected to be recorded over the three-year vesting period
$59,200
Joyce Corporation Ltd Annual Report 2020
35
35
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
D. SHARE-BASED COMPENSATION (CONTINUED)
Anthony Mankarios fully paid ordinary share-based payment
In the 2019 Annual General Meeting on 25 November 2019, the members approved the issue of 131,579 fully
paid ordinary shares to Starball Pty Ltd. Starball Pty Ltd is an entity controlled by Anthony Mankarios, the
former Joyce Corporation Ltd Executive Director who held that position for nine years. In recognition of the
effort that Anthony Mankarios has put into the Consolidated Entity over that period, the members resolved it
was appropriate to issue 131,579 ordinary shares in the Company to Starball Pty Ltd.
The shares rank equally with the ordinary shares already on issue by the Company. No funds were received or
applied in the issue, as the shares were issued in recognition of Anthony Mankarios’ contribution to the
Company. The fair value of the shares is determined as per the spot rate on grant date, being $1.44 on 25
November 2019.
The cost of the share-based payment is recognised, together with a corresponding increase in equity, in the
period in which the shares were issued (December 2019). An expense of $189,474 was recognised in the
Consolidated Statement of Profit or Loss.
Option and holding rights granted as compensation
During the Financial Year no options were granted or vested as equity compensation benefits to any Director
or Executive of the Consolidated Entity (2019: nil).
Option holdings as compensation
During the Financial Year there were no options on issue to any Director or Executive of the Consolidated Entity
(2019: nil).
Partly paid ordinary shares as compensation
There were no partly paid ordinary shares held or granted during the Financial Year as compensation (2019:
nil).
36
Joyce Corporation Ltd Annual Report 2020
36
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
D. SHARE-BASED COMPENSATION (CONTINUED)
Share holdings
The number of shares in the Company held during the Financial Year by each Director and KMP of the
Consolidated Entity, including their personally related parties, are set out below.
During the Financial Year, 131,579 shares were granted as compensation to Anthony Mankarios (2019: nil).
2020
Michael Gurry
Karen Gadsby
Balance
1 July 2019
56,878
20,000
Daniel Smetana (a)
10,254,129
Granted as
remuneration
-
On exercise
of options
-
Timothy Hantke
Travis McKenzie
Jeremy Kirkwood
Anthony Mankarios (b)
Keith Smith
Derek Fowler
John Bourke
Chris Palin
Lee Hames
Gavin Culmsee
TOTAL
-
-
-
-
-
131,579
-
-
-
-
-
-
20,000
-
-
741,323
40,000
-
65,359
-
-
10,000
11,207,689
131,579
Other net
change
-
Balance
30 June 2020
56,878
-
20,000
772,311
11,026,440
-
15,086
-
(872,902)
22,500
-
-
-
-
20,000
15,086
-
-
62,500
-
65,359
-
-
10,000
20,000
(53,005)
11,286,263
-
-
-
-
-
-
-
-
-
-
-
-
-
(a) The Other net change reflects changes in indirect holdings of associated parties.
(b) Anthony Mankarios resigned on 24 November 2019.
E. LINK BETWEEN REMUNERATION POLICY AND COMPANY PERFORMANCE
The Consolidated Entity provided executives with variable remuneration in the form of short-term and long-
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 profit, cash targets and departmental functional
KPI's.
The following table shows the revenue, profit and dividends for the last five years for the Consolidated Entity,
as well as the share price at the end of the respective financial year. The dividend includes ordinary and special
dividends paid or payable in respect of each financial year.
FY20
$000
FY19
$000
FY18
$000
FY17
$000
FY16
$000
Revenue from continuing operations (a)
87,594
84,205
78,093
64,726
56,544
Profit from continuing operations after tax (a)
2,674
6,385
6,204
3,794
3,460
Share price at year-end $
Dividends (cents) paid or payable
1.10
10.0
1.53
12.7
1.42
11.0
1.60
11.5
1.01
16.0
(a) Revenue and profit exclude discontinued operations.
Joyce Corporation Ltd Annual Report 2020
37
37
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Remuneration REPORT – audited
YEAR ENDED
30 JUNE 2020
F. VOTING AT THE 2019 ANNUAL GENERAL MEETING ON THE REMUNERATION REPORT
The Remuneration Report in the 2019 Annual Report to shareholders was voted on in the November 2019
Annual General Meeting, 58.40% of the eligible votes were cast against the resolution, being the first strike
against the Company.
G. INDEPENDENT SALARY AND INCENTIVE REVIEW
During the prior financial year, the Company undertook an independent review of executive salary and
incentive levels to benchmark against market. The review was undertaken by the independent professional
firm of Godfrey Remuneration Group. The majority of the recommendations were enacted with the remaining
changes being the subject of an ongoing project.
H. LOANS OR OTHER TRANSACTIONS WITH DIRECTORS AND KEY MANAGEMENT PERSONNEL
There are no loans outstanding with any Director as at 30 June 2020 (2019: $nil).
During the Financial Year the entities of the Consolidated Entity entered into the following transactions with
related parties who are not members of the group:
Key Management Personnel
Type of transaction
(i) Key Management Personnel
Received dividend payments totalling $600,625.
(ii) Key Management Personnel
Director fee and/or salary deferred due to the COVID-19
pandemic. Amount owing to KMP and Executive at 30 June
2020 totalling $47,681.
Other than the items disclosed above, there are no other material transactions with KMP not in the ordinary
course of business.
End of Audited Remuneration Report.
38
Joyce Corporation Ltd Annual Report 2020
38
ANNUAL REPORT 2020JOYCE CORPORATION LTD
directors’ REPORT
INSURANCE OF OFFICERS
YEAR ENDED
30 JUNE 2020
During the Financial Year, Joyce Corporation Ltd paid a premium to insure the Directors, Secretaries and KMP
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 of 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 or more broadly to the Consolidated Entity. 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
taking responsibility on behalf of the Company for all or part of those proceedings.
PERFORMANCE IN RELATION TO ENVIRONMENTAL REGULATION
Joyce Corporation Ltd is party to licenses issued by the Environmental Protection Authority as per NGER Act
2007 and various other authorities throughout Australia. These licenses 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 license conditions.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the Financial Year
by the auditor are outlined in Note 33.
The Directors are satisfied that the provision of non-audit services during the Financial Year, by the auditor (or
by another person or firm on the auditor's behalf), is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in Note 33 do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
- All non-audit services have been reviewed and approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
- None of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a
management or decision-making capacity for the company, acting as advocate for the company or
jointly sharing economic risks and rewards.
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 41.
Joyce Corporation Ltd Annual Report 2020
39
39
ANNUAL REPORT 2020JOYCE CORPORATION LTD
directors’ REPORT
ROUNDING OF AMOUNTS
YEAR ENDED
30 JUNE 2020
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of
amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance
with the instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations
Act 2001.
M A Gurry
Chair
Perth, 27 August 2020
40
Joyce Corporation Ltd Annual Report 2020
40
ANNUAL REPORT 2020JOYCE CORPORATION LTD
auditor’s independance report
YEAR ENDED
30 JUNE 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 St at ion St reet
Subiaco, WA 6008
PO Box 700 West Pert h WA 6872
Aust ralia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF JOYCE CORPORATION LTD
As lead auditor of Joyce Corporation Lt d for t he year ended 30 June 2020, I declare t hat , t o t he best of
my knowledge and belief , t here have been:
1. No cont ravent ions of t he audit or independence requirement s of t he Corporat ions Act 2001 in
relat ion t o t he audit ; and
2. No cont ravent ions of any applicable code of professional conduct in relat ion t o t he audit .
This declaration is in respect of Joyce Corporation Lt d and t he ent it ies it cont rolled during t he period.
Neil Smit h
Direct or
BDO Audit (WA) Pt y Lt d
Pert h, 27 August 2020
BDO Audit (WA) Pt y Lt d ABN 79 112 284 787 is a member of a nat ional associat ion of independent ent it ies which are all members of BDO Aust ralia Lt d ABN 77 050 110 275,
an Australian company limit ed by guarant ee. BDO Audit (WA) Pt y Lt d and BDO Aust ralia Ltd are members of BDO Int ernat ional Lt d, a UK company limit ed by guarant ee, and
form part of t he int ernat ional BDO network of independent member firms. Liabilit y limit ed by a scheme approved under Professional St andards Legislat ion.
41
ANNUAL REPORT 2020JOYCE CORPORATION LTD directors’ REPORT
CORPORATE GOVERNANCE STATEMENT
YEAR ENDED
30 JUNE 2020
Joyce Corporation Ltd (“the Company”) and the Board are committed to achieving and demonstrating a high standard of
corporate governance. The Company has reviewed its corporate governance practices against the Corporate Governance
Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2020 corporate governance policy and statement reflects the corporate governance practices in place throughout
the 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.
42
Joyce Corporation Ltd Annual Report 2020
42
ANNUAL REPORT 2020JOYCE CORPORATION LTD
ANNUAL FINANCIAL REPORT
Annual Financial Report
YEAR ENDED
30 JUNE 2020
Joyce Corporation Ltd
AND CONTROLLED ENTITIES
ABN: 80 009 116 269
Annual Financial Report
For the Year Ended 30 June 2020
Joyce Corporation Ltd Annual Report 2020
43
43
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2020
Note
6
6
6
6
6
6
6
6
6
8
7
Continuing operations
Revenue
Cost of sales
Gross Profit
Other revenue
Variable costs
Contribution Margin
Expenses from continuing operations
Employment expenses
Occupancy expenses
Marketing expenses
Administration expenses
Profit before depreciation, impairment, interest, tax
Depreciation and amortisation
Profit before impairment, interest, tax
Impairment of non-financial assets
Profit before interest, tax
Net interest
Profit before tax
Income tax expense
Profit for the year from continuing operations
(Loss) / profit for the year from discontinued operations
Profit for the year
Profit is attributable to:
Continuing operations:
Ordinary equity holders of the company
Non-controlling interests
Discontinued operations:
Ordinary equity holders of the company
Non-controlling interests
* Refer to Note 2 in relation to details of restatement.
YEAR ENDED
30 JUNE 2020
Consolidated
2019
restated *
$000
84,205
(41,373)
42,832
1,545
(4,277)
40,100
(19,161)
(1,299)
(2,779)
(2,706)
14,155
(4,186)
9,969
-
9,969
(850)
9,119
(2,734)
6,385
126
2020
$000
87,594
(42,557)
45,037
3,938
(4,838)
44,137
(19,828)
(1,444)
(2,654)
(3,608)
16,603
(4,606)
11,997
(5,526)
6,471
(699)
5,772
(3,098)
2,674
(2,319)
355
6,511
(1,107)
3,781
2,674
(1,655)
(664)
(2,319)
3,281
3,104
6,385
70
56
126
The consolidated statement of profit or loss is to be read in conjunction with the notes to the consolidated financial statements
set out on pages 51 to 114.
44
Joyce Corporation Ltd Annual Report 2020
44
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 30 JUNE 2020
(Loss) / earnings per share (cents per share) for (loss) /
profit attributable to ordinary equity holders of the
Company:
Basic (loss) / earnings per share:
(Loss) / earnings from continuing operations
(Loss) / earnings from discontinued operations
Diluted (loss) / earnings per share:
(Loss) / earnings from continuing operations
(Loss) / earnings from discontinued operations
Basic earnings / (loss) per share excluding impairment expense amount:
Earnings from continuing operations
Earnings from discontinued operations
Note
10
10
10
* Refer to Note 2 in relation to details of restatement.
Consolidated
2019
restated *
$000
11.73
0.25
11.98
11.73
0.25
11.98
11.73
0.25
11.98
2020
$000
(3.95)
(5.90)
(9.85)
(3.95)
(5.90)
(9.85)
15.76
(5.90)
9.86
The consolidated statement of profit or loss is to be read in conjunction with the notes to the consolidated financial statements
set out on pages 51 to 114.
Joyce Corporation Ltd Annual Report 2020
45
45
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Profit for the year
Other comprehensive income
Items that will not be reclassified to profit or loss
Other comprehensive income for the year, net of tax
Note
Consolidated
2019
restated *
$000
6,511
-
-
2020
$000
355
-
-
Total comprehensive income for the year
355
6,511
Total comprehensive income for the year arises from:
Continuing operations
Discontinued operations
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
Continuing operations:
Ordinary equity holders of the company
Non-controlling interests
Discontinued operations:
Ordinary equity holders of the company
Non-controlling interests
* Refer to Note 2 in relation to details of restatement.
7
2,674
(2,319)
355
(1,107)
3,781
2,674
(1,655)
(664)
(2,319)
6,385
126
6,511
3,281
3,104
6,385
70
56
126
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the consolidated financial
statements set out on pages 51 to 114.
46
Joyce Corporation Ltd Annual Report 2020
46
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
ASSETS
Current assets
Cash and cash equivalents
Trade receivables
Inventories
Other receivables and prepayments
Other financial assets
Total current assets
Non-current assets
Other receivables and prepayments
Deferred tax assets
Right-of-use assets
Property, plant and equipment
Investment property
Intangible assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Dividend payable
Provisions
Loans and borrowings
Lease liabilities
Provision for income tax
Total current liabilities
Non-current liabilities
Loans and borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserve
Retained (losses) / earnings
Parent entity interest
Non-controlling interest
TOTAL EQUITY
Note
11
12
13
14
15
14
8
9
16
17
18
19
20
21
22
9
8
22
9
8
21
24
29(ii)
30(b)
Consolidated
2019
restated *
$000
6,975
2,355
3,185
1,459
31
14,005
399
6,202
12,503
11,501
9,623
18,369
58,597
72,602
14,197
-
1,751
694
4,401
128
21,171
9,622
10,069
4,508
1,016
25,215
46,386
26,216
18,090
-
5,258
23,348
2,868
26,216
2020
$000
10,643
886
2,974
4,168
179
18,850
157
5,564
10,195
8,807
9,623
7,510
41,856
60,706
12,774
1,405
1,575
521
3,370
484
20,129
5,230
8,587
3,851
1,256
18,924
39,053
21,653
18,280
20
(305)
17,995
3,658
21,653
* Refer to Note 2 in relation to details of restatement.
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated financial
statements set out on pages 51 to 114.
Joyce Corporation Ltd Annual Report 2020
47
47
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from / (used in) operating activities
Receipts from customers
Payments to suppliers and employees
Income tax paid
Interest paid
Net cash flows from operating activities
Cash flows from / (used in) investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of discontinued operations
Proceeds from sale of property, plant and equipment
Net cash flows from / (used in) investing activities
Cash flows from / (used in) financing activities
Dividends paid
Dividends paid to non-controlling interests
Proceeds from partly paid shares
Payment of lease liabilities
Proceeds from related party loan
Repayment of related party loan
Repayment of borrowings
Proceeds from borrowings
Net cash flows (used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Reconciliation of cash
Cash at bank and in hand relating to continuing operations
Cash at bank and in hand relating to discontinued operation
Total cash at bank and in hand
* Refer to Note 2 in relation to details of restatement.
Note
34
11
7
11
Refer to Note 7 in relation to the cash flows from the discontinued operations.
Consolidated
2019
restated *
$000
85,513
(68,482)
(3,363)
(850)
12,818
(1,250)
-
60
(1,190)
(3,552)
(3,609)
30
(3,692)
400
(400)
(575)
509
(10,889)
739
6,120
6,859
6,859
116
6,975
2020
$000
91,117
(73,525)
(3,535)
(700)
13,357
(645)
(180)
1,957
67
1,199
(1,398)
(1,465)
-
(3,711)
-
-
(16,498)
12,300
(10,772)
3,784
6,859
10,643
10,643
-
10,643
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements set out on pages 51 to 114.
48
Joyce Corporation Ltd Annual Report 2020
48
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Contributed
Equity Reserves
$000
$000
Note
Retained
Earnings /
(Losses)
$000
Non-
Controlling
Interest
$000
Total
Equity
$000
Balance at 1 July 2018 (as
previously reported)
Adjustment on adoption of AASB
9
Adjustment on adoption of AASB
16
Restated total equity at the
beginning of the financial
year *
2
Total comprehensive income /
(loss) for the year:
Profit attributable to members of
the parent entity
Profit attributable to non-
controlling interests
Total comprehensive income /
(loss) for the year
Transactions with owners in their
capacity as owners:
Transactions with non-controlling
interests
30(b)
Payment for partly paid shares
Dividends paid or provided for
24
30(b), 31
Balance at 30 June 2019
restated *
* Refer to Note 2 in relation to details of restatement.
18,060
-
-
18,060
-
-
-
-
30
-
18,090
-
-
-
-
-
-
-
-
-
-
-
6,975
3,073
28,108
(95)
(961)
-
(215)
(95)
(1,176)
5,919
2,858
26,837
3,351
-
3,351
-
3,160
3,160
3,351
3,160
6,511
(459)
459
-
-
(3,553)
-
(3,609)
30
(7,162)
5,258
2,868
26,216
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial
statements set out on pages 51 to 114.
Joyce Corporation Ltd Annual Report 2020
49
49
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Note
Contributed
Equity
$000
18,090
Reserves
$000
-
Retained
Earnings /
(Losses)
$000
5,258
Non-
Total
Controlling
Interest
$000
2,868
Equity
$000
26,216
Balance at 1 July 2019
Total comprehensive income /
(loss) for the year:
Loss attributable to members of the
parent entity
Profit attributable to non-
controlling interests
Total comprehensive income /
(loss) for the year
Transactions with owners in their
capacity as owners:
Carrying value of non-controlling
interests disposed
Shares issued
Share-based payments
Dividends paid or provided for
Balance at 30 June 2020
7,
30(b)
24
29(i)
30(b),
31
-
-
-
-
190
-
-
18,280
-
-
-
-
-
20
-
20
(2,762)
-
(2,762)
-
3,117
3,117
(2,762)
3,117
355
-
-
-
(862)
(862)
-
-
190
20
(2,801)
(1,465)
(4,266)
(305)
3,658
21,653
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 51 to 114.
50
Joyce Corporation Ltd Annual Report 2020
50
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The consolidated financial statements of Joyce Corporation Ltd (“the Company”) for the financial year ended
30 June 2020 were authorised for issue in accordance with a resolution of the Directors of the Company dated
27 August 2020. Joyce Corporation Ltd is a Company incorporated in Australia and limited by shares which are
publicly traded on the Australian Securities Exchange. The Company is a for-profit entity for the purpose of this
financial report.
The nature of the operation and principal activities of the Company and its controlled entities are described in
Directors’ Report.
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”). Below is a summary of significant accounting policies. More
accounting policies are presented in the notes following.
(a) Basis of preparation
These general-purpose financial statements for the financial year ended 30 June 2020 have been prepared in
accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards.
Historical cost convention
These financial statements have been prepared under the historical cost convention, except for the investment
property and certain other financial instruments which are measured at fair value.
New or revised standards and interpretations that are first effective in the current reporting year
A number of new or amended standards became applicable for the current reporting period and the
Consolidated Entity had to change its accounting policies as a result of the adoption of the following standards:
- AASB 16 Leases; and
- AASB Interpretation 23 Uncertainty over Income Tax Treatments.
The impact of the adoption of these standards and the new accounting policies is disclosed below.
Joyce Corporation Ltd Annual Report 2020
51
51
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(i) AASB 16 Leases
AASB 16 Leases replaces AASB 117 Leases and IFRIC 4 Determining whether an Arrangement Contains a Lease.
In accordance with the transitional provisions of AASB 16, the Consolidated Entity has elected to adopt AASB 16
using the Full Retrospective approach, with the date of initial application being 1 July 2019. AASB 16 is applied
retrospectively to each prior reporting period presented.
Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify
leases as either operating or finance leases using similar principles as in AASB 117. Therefore, AASB 16 does not
have an effect for leases where the Consolidated Entity is the lessor.
Consolidated Entity as lessee
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
-
-
Leases of low value assets; and
Leases with a term of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the
case) this is not readily determinable, in which case the Consolidated Entity’s incremental borrowing rate on
commencement of the lease is used. Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes
the variable element will remain unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
- Amounts expected to be payable under any residual value guarantee;
-
The exercise price of any purchase option granted in favour of the Consolidated Entity if it is reasonably
certain to exercise that option; and
- Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis
of the termination option being exercised.
52
Joyce Corporation Ltd Annual Report 2020
52
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(i) AASB 16 Leases (continued)
Right-of-use-assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
-
-
-
Lease payments made at or before commencement of the lease;
Initial direct costs incurred; and
The amount of any provision recognised where the Consolidated Entity is required to dismantle, remove
or restore the leased asset.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on
the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the lease or over the remaining economic life of the asset, if rarely,
this is judged to be shorter than the lease term.
When the Consolidated Entity revises its estimate of the term of any lease (because, for example, it re-assesses
the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the
lease liability to reflect the payments to be made over the revised term, which are discounted using a revised
discount rate (being the interest rate implicit in the lease for the remainder of the lease term or, if that cannot
be readily determined, the Consolidated Entity’s incremental borrowing rate at the re-assessment date). An
equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount
being amortised over the remaining (revised) lease term.
The carrying value of lease liabilities is also revised when the variable element of future lease payments
dependent on a rate or index is revised or there is a revision to the estimate of amounts payable under a residual
value guarantee. In both cases an unchanged discount rate is used. In both cases an equivalent adjustment is
made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the
remaining (revised) lease term.
When the Consolidated Entity renegotiates the contractual terms of a lease with the lessor, the accounting
depends on the nature of the modification:
-
-
-
If the renegotiation results in one or more additional assets being leased for an amount commensurate
with the standalone price for the additional rights-of-use obtained, the modification is accounted for as
a separate lease in accordance with the above policy;
In all other cases where the renegotiation increases the scope of the lease (whether that is an extension
to the lease term, or one or more additional assets being leased), the lease liability is remeasured using
the discount rate applicable on the modification date, with the right-of-use asset being adjusted by the
same amount; and
If the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease
liability and right-of-use asset are reduced by the same proportion to reflect the partial of full
termination of the lease with any difference recognised in profit or loss. The lease liability is then further
adjusted to ensure the carrying amount reflects the amount of the renegotiated payments over the
renegotiated term, with the modified lease payments discounted at the rate applicable on the
modification date. The right-of-use asset is adjusted by the same amount.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value
assets are items such as IT-equipment and small items of office furniture.
Joyce Corporation Ltd Annual Report 2020
53
53
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(i) AASB 16 Leases (continued)
Consolidated Entity as lessor
Leases in which the Consolidated Entity does not transfer substantially all the risks and rewards incidental to
ownership of an asset (or of a right-of-use asset) are classified as operating leases. Rental income arising is
accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit
or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as
rental income. Contingent rents are recognised as revenue in the period in which they are earned.
The effect of adopting AASB 16 is as follows:
54
Joyce Corporation Ltd Annual Report 2020
54
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(ii) AASB 16 Leases (continued)
Impact on the consolidated statement of profit and loss and other comprehensive income (increase / (decrease)):
Cost of sales
Gross profit
Other revenue
Contribution margin
Occupancy expenses
Earnings before depreciation, impairment, interest, tax
Depreciation and amortisation
Earnings before impairment, interest, tax
Earnings before interest and tax
Net interest expense
Earnings before tax
Income tax expense
Profit / (loss) from continuing operations after tax
Profit / (loss) from discontinued operations
Profit / (loss) for the year
Profit is attributable to:
Continuing operations
Ordinary equity holders of the Company
Non-controlling interests
Discontinued operations
Ordinary equity holders of the Company
Non-controlling interests
Earnings per share (cents per share) for profit attributable to ordinary
equity holders of the Company:
Basic earnings per share
Earnings from continuing operations
Earnings from discontinued operations
Diluted earnings per share
Earnings from continuing operations
Earnings from discontinued operations
2019
restated
$000
(381)
381
19
400
(3,174)
3,574
3,190
384
384
669
(285)
-
(285)
-
(285)
(145)
(140)
(285)
-
-
-
(0.52)
-
(0.52)
(0.52)
-
(0.52)
Joyce Corporation Ltd Annual Report 2020
55
55
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual Financial Report
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(i) AASB 16 Leases (continued)
Impact on the consolidated statement of financial position (increase / (decrease)):
Current assets
Other receivables and prepayments
Total current assets
Non-current assets
Deferred tax assets
Right-of-use assets
Property, plant & equipment
Total non-current assets
Total assets
Current liabilities
Interest bearing loans and borrowings
Lease liabilities
Provision for income tax
Total current liabilities
Non-current liabilities
Interest bearing loans and borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Retained (losses) / earnings
Parent entity interests
Non-controlling interests
Total equity
30 June 2019
restated
$000
1 July 2018
restated
$000
(126)
(126)
4,660
12,503
(394)
16,769
(13)
(13)
4,960
13,185
-
18,145
16,643
18,132
(198)
4,401
(3)
4,200
(187)
10,069
3,939
26
13,847
-
3,852
-
3,852
-
11,227
4,236
(7)
15,456
18,047
19,308
(1,404)
(1,176)
(1,075)
(1,075)
(329)
(1,404)
(961)
(961)
(215)
(1,176)
56
Joyce Corporation Ltd Annual Report 2020
56
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(i) AASB 16 Leases (continued)
Impact on the consolidated statement of changes in equity:
Contributed
equity
$000
18,060
-
-
At 1 July 2018 (as previously
reported)
Adjustment on adoption of AASB
9 (net of tax)
Adjustment on adoption of AASB
16 (net of tax)
At 1 July 2018 (as restated)
18,060
Retained
earnings
$000
Non-
controlling
interest
$000
Reserves
$000
Total
$000
-
-
-
-
6,975
3,073
28,108
(95)
-
(95)
(961)
(215)
(1,176)
5,919
2,858
26,837
Impact on the consolidated statement of cash flows (increase / (decrease)):
Cash flows from / (used in) operating activities
Payments to suppliers and employees
Interest paid
Net cash flows (used in) operating activities
Cash flows from / (used in) financing activities
Payment of lease liabilities
Net cash flows from financing activities
2019
restated
$000
(12,582)
892
(11,753)
4,334
4,334
Joyce Corporation Ltd Annual Report 2020
57
57
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New or revised standards and interpretations that are first effective in the current reporting year (continued)
(ii) AASB Interpretation 23 Uncertainty over Income Tax Treatments
AASB Interpretation 23 provides guidance on the accounting for current and deferred tax liabilities and assets in
circumstances in which there is uncertainty over income tax treatments. The Interpretation requires:
-
-
-
The Consolidated Entity to contemplate whether uncertain tax treatments should be considered
separately, or together as a Consolidated Entity, based on which approach provides better predictions
of the resolution;
The Consolidated Entity to determine if it is probable that the tax authorities will accept the uncertain
tax treatment; and
If it is not probable that the uncertain tax treatment will be accepted, measure the tax uncertainty based
on the most likely amount or expected value, depending on whichever method better predicts the
resolution of the uncertainty.
The adoption of AASB Interpretation 23 has not resulted in a change to the tax liabilities of the Consolidated
Entity. $Nil effect was recorded in retained earnings at the date of application being 1 July 2019.
58
Joyce Corporation Ltd Annual Report 2020
58
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Principles of consolidation
The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its
investment with the entity and can 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.
Refer to Note 30 in relation to the list of controlled entities.
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-group 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.
Non-controlling interests, being that portion of the profit or loss and net assets of subsidiaries attributable to
equity interests held by persons outside the Consolidated Entity, 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.
Amounts held on trust for the Bedshed ‘Marketing Fund’ and Bedshed ‘Approved Purposes Fund’ are not funds
of the Consolidated Entity and have not been consolidated.
(c) 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.
(d) Investments and other financial assets
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.
Subsequent measurement
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest
method.
(e) Comparatives
When required by accounting standards, comparative figures have been adjusted to conform with classification
and presentation for the current financial year.
Joyce Corporation Ltd Annual Report 2020
59
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of
amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance
with the instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
(g) 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 operation (‘the functional currency’). The
consolidated financial statements are presented in Australian dollar ($), which is the Company’s functional and
presentation currency.
(h) 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.
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.
(i) Presentation of government grants
Government grants relating to JobKeeper are recognised in profit or loss in other revenue over the period
necessary to match them with the costs that they are intended to compensate.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Consolidated Entity will comply with all attached conditions.
60
Joyce Corporation Ltd Annual Report 2020
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
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 receivables
Other receivables
Other financial assets
Financial liabilities
Trade and other payables
Loans and borrowings
Dividend payable
Lease liabilities
Note
11
12
14
15
19
22
20
9
Consolidated
2019
restated
$000
6,975
2,355
724
31
10,085
14,197
10,316
-
14,470
38,983
2020
$000
10,643
886
3,240
179
14,948
12,774
5,751
1,405
11,957
31,887
Joyce Corporation Ltd Annual Report 2020
61
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk
(i) Foreign exchange risk
The Consolidated Entity’s exposure to foreign currency risk is not material. It is principally limited to purchases
of goods in the five company-owned Bedshed stores.
(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’s polices seek to
manage both risks, interest rate and liquidity (see below), by assessment of the current state of the yield curve
and expectations about interest rates in the medium term and the Entity’s need for flexibility to minimise the
Consolidated Entity’s interest expense.
As at the reporting date, the Consolidated Entity had the following variable and fixed rate financial instruments:
2020
Average interest rate
Fixed
Variable
2019 restated
Average interest rate
Fixed
Variable
$000
Financial assets
Cash and cash equivalents
Financial liabilities
St George commercial bill
CBA market rate loan 1
CBA market rate loan 2
CBA business loan
0.01%
-
10,643
0.03%
-
3.12%
3.08%
-
-
-
-
-
-
4,751
1,000
-
5,751
4.73%
-
-
3.77%
-
-
-
-
-
$000
6,975
4,716
-
-
5,600
10,316
An analysis by maturities is provided in (c) below.
The Consolidated Entity analyses its interest rate exposure on a dynamic basis. Various scenarios are modelled
taking into consideration refinancing, renewal of existing positions and alternative financing. Based on these
scenarios, the Consolidated Entity calculates the impact on profit or 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 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 2020 is at a variable interest rate (see above).
On balances held at 30 June 2020, 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 $0.05 million higher or lower
(2019: $0.07 million). This is a result of a higher or lower interest expense arising from borrowings, offset by
higher or lower interest income from cash and cash equivalents.
Equity would have been $0.05 million higher or lower (2019: $0.07 million), for the same reasons.
62
Joyce Corporation Ltd Annual Report 2020
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(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, considering 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 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
Trade receivables
Other receivables
Other financial assets
AA-
Non-rated
Non-rated
Non-rated
Consolidated
2020
$000
10,643
886
3,240
179
14,948
2019
restated
$000
6,975
2,355
724
31
10,085
Joyce Corporation Ltd Annual Report 2020
63
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
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 invested
in term deposits or used to repay debt.
Financing arrangements
Refer to Note 23 in relation to the financing facilities available at reporting date.
Maturities of financial assets and financial liabilities
The tables below analyses 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.
Year ended 30 June 2020
Consolidated financial assets
Cash and cash equivalents
Trade receivables
Other receivables
Other financial assets
Consolidated financial liabilities
Trade and other payables
Loans and borrowings
Dividend payable
Lease liabilities
Net maturity
≤ 6 months
$000
6-12
months
$000
1-5
years
$000
>5 years
$000
10,643
886
3,083
179
14,791
12,774
521
1,405
1,786
16,486
(1,695)
-
-
-
-
-
-
-
157
-
157
-
-
-
1,584
1,584
(1,584)
-
5,230
-
8,531
13,761
(13,604)
-
-
-
-
-
-
-
-
56
56
(56)
Total
$000
10,643
886
3,240
179
14,948
12,774
5,751
1,405
11,957
31,887
(16,939)
64
Joyce Corporation Ltd Annual Report 2020
64
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c)
Liquidity risk (continued)
Year ended 30 June 2019
Consolidated financial assets
Cash and cash equivalents
Trade receivables
Other receivables
Other financial assets
Consolidated financial liabilities
Trade and other payables
Loans and borrowings
Lease liabilities
Net maturity
≤ 6 months
$000
6-12
months
$000
1-5
years
$000
>5 years
$000
Total
restated
$000
6,975
2,355
325
31
9,686
14,197
694
2,267
17,158
(7,472)
-
-
-
-
-
-
-
399
-
399
-
-
-
-
-
-
-
2,133
2,133
(2,133)
-
9,622
9,287
18,909
(18,510)
-
-
782
782
(782)
6,975
2,355
724
31
10,085
14,197
10,316
14,469
38,982
(28,897)
Joyce Corporation Ltd Annual Report 2020
65
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
3. FINANCIAL RISK MANAGEMENT (CONTINUED)
(d)
Capital risk management
Management controls the capital of the Consolidated Entity to maintain a good debt to equity ratio, to provide
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.
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, dividends 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 remains below 40%.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Consolidated Entity and that are
believed to be reasonable under the circumstances.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
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.
(a) Leases
Determining the incremental borrowing rate
Where the interest rate implicit in a lease is not known, the Consolidated Entity is required to determine the
incremental borrowing rate, being the rate of interest the Consolidated Entity would have to pay to borrow a
similar amount, over a similar term, with similar security to obtain an asset of similar value in a similar economic
environment. As this information may not be readily available, the Consolidated Entity is required to estimate its
incremental borrowing rate, using such information as is available, and making adjustments to reflect the
particular circumstances of each lease.
Determining the lease term
The Consolidated Entity has in place, a number of leases of property with terms that can be renewed for an
additional term, equal to the period of the original lease. In determining the lease term, the Consolidated Entity
is required to determine:
- Whether there is an actual or implied extension or renewal option. An implied extension or renewal
option will exist if both the lessee and lessor would incur a more than insignificant penalty if the lease
were not extended or renewed; and
- Whether the Consolidated Entity is reasonably certain to exercise any actual or implied extension
options, taking into account, all facts and circumstances relating to the lease.
(b) Nature of leasing activities
As a lessee
The Consolidated Entity leases a number of properties. The lease contracts provide for payments to increase
each year by a fixed percentage, to increase each year by inflation, to be reset periodically to market rental rates,
or to remain fixed over the lease term.
66
Joyce Corporation Ltd Annual Report 2020
66
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(c) Share-based payments
The Consolidated Entity initially measures the cost of equity-settled transactions with employees by reference
to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-
based payment transactions requires determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model as well as an
assessment of the probability of achieving non-market based vesting conditions. The probability of achieving
non-market based vesting conditions of performance options is assessed at each reporting period.
(d) Impairment of non-financial assets
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 and judgements or fair value less cost of disposal.
(e) Determining control of subsidiaries (AASB 10)
In determining whether the Consolidated Entity has control over subsidiaries that are not wholly owned,
judgement is applied to assess the ability of the Company to control the day-to-day activities of the partly owned
subsidiary and its economic outcomes. In exercising judgement, the commercial and legal relationships that the
Company has with other owners of partly owned subsidiaries are taken into consideration. Whilst the Company
is not able to control all activities of a partly owned subsidiary, the partly owned subsidiary is consolidated within
the Consolidated Entity where it is determined that the Company controls the day-to-day activities and economic
outcomes of a partly owned subsidiary. Changes in agreements with other owners of partly owned subsidiaries
could result in a loss of control and subsequently de-consolidation.
Upon acquisition of partly owned subsidiaries by the Company, judgement is exercised concerning the value of
net assets acquired on the date of acquisition. The non-controlling interest’s share of net assets acquired, fair
value of consideration transferred and subsequent period movements in value thereof, are disclosed as outside
equity interest.
(f) Net realisable value of inventory
In determining the number of write-downs required for inventory, the Consolidated Entity has made judgements
based on the expected net realisable value of that inventory. Historic experience and current knowledge of the
products has been used in determining any write-downs to net realisable value.
Joyce Corporation Ltd Annual Report 2020
67
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(g) Capital development investments
Discounted cash flow models are used for business cases, these include assumptions and estimates of business
outcomes and are used for capital investments, such as software. The Consolidated Entity has made an
assessment to amortise software development costs over 5 years. Refer to Note 18 in relation to the recognition
of intangible assets.
(h) Treatment of investment property in Lytton, QLD
The property located at 97 Trade Street, Lytton, QLD has the majority of the site rented to a third party at market
rates. KWB occupy a minority of the site (42%). The Consolidated Entity has determined the occupation of the
majority of the site by a third party is the key factor in determining its treatment as an investment property.
(i) Revaluation of investment property
The Consolidated Entity values the investment property at fair value. The fair value in the financial statements is
informed by valuation performed by either an independent external valuation or a Management valuation.
The market value of the investment property has been adopted as the fair value of that investment property in
the financial statements of the Consolidated Entity.
(j) Expected credit loss
Debtors in each part of the Consolidated Entity have been reviewed for the potential of non-recovery. The review
is based on, the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate
an overall expected credit loss rate for each group. These assumptions include recent sales experience, historical
collection rates, the impact of the COVID-19 pandemic and forward-looking information that is available. The
allowance for expected credit losses, as disclosed in Note 12 and 14, is calculated based on the information
available at the time of preparation. The actual credit losses in future years may be higher or lower.
The Consolidated Entity assessed the various circumstances of each group of debtors and determined that full
recovery has a high likelihood.
In assessing the debtor in relation to the disposal of Lloyds Online Auctions Pty Ltd, the Consolidated Entity has
recognised an expected credit loss of $0.21 million (2019: nil).
(k) COVID-19 pandemic
Judgement has been exercised in considering the impacts the COVID-19 pandemic has had, or may have, on the
Consolidated Entity based on known information. This consideration extends to the nature of the products and
services offered, customers, supply chain, staffing and geographic regions in which the Consolidated Entity
operates. Other than as addressed in specific notes, there does not currently appear to be either any significant
impact upon the financial statements or any significant uncertainties with respect to events or conditions which
may impact the Consolidated Entity unfavourably as at the reporting date or subsequently as a result of COVID-
19.
(l) Disposal transaction
Judgement has been exercised in treatment of the Lloyds Online Auctions Pty Ltd disposal on 2 March 2020 and
17 June 2020 as a single transaction due to the one commercial outcome intended.
68
Joyce Corporation Ltd Annual Report 2020
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
5. SEGMENT INFORMATION
(a) Operating segments
Operating Segments are identified based on internal reports about components of the Consolidated Entity that
are regularly reviewed by the chief operating decision makers (The Board of Directors and the CEO) 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 operating segments:
-
Bedshed retail bedding franchise operation;
-
Company-owned retail bedding stores;
- Operation of retail kitchen showrooms; and
- Operation of valuation, online and physical auction sites (became a discontinued operation on
17 June 2020).
Transfer prices between operating segments are set on an arms-length basis and in a manner consistent with
transactions with third parties.
Joyce Corporation Ltd Annual Report 2020
69
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
5. SEGMENT INFORMATION (CONTINUED)
(a) 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 2020.
Continuing operations
Continuing
operations
Discontinued
operations
Bedshed
Franchise
$000
2020
Retail Bedding
Stores
$000
2020
Retail Kitchen
Showrooms
$000
2020
5,833
-
5,833
140
5,693
5,833
14,263
-
14,263
14,263
-
14,263
67,498
-
67,498
67,498
-
67,498
1,992
(201)
11,269
Year Ended
Revenue
Revenue
Inter-segment sales
Total segment revenue
Timing of revenue recognition:
At a point in time
Over time
Unallocated revenue
Total consolidated revenue
Result
Segment result
Unallocated expenses net of
unallocated income
Income tax expense
Net consolidated profit/(loss) for
the year
Total
$000
2020
87,594
-
87,594
81,901
5,693
87,594
-
87,594
13,060
(7,288)
(3,098)
2,674
Total
$000
2020
15,595
-
15,595
15,595
-
15,595
-
15,595
(1,700)
(1,060)
441
(2,319)
As at
Assets and liabilities
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
30 Jun 2020
30 Jun 2020
30 Jun 2020
30 Jun 2020
30 Jun 2020
8,417
10,148
30,613
2,002
7,703
22,123
49,178
11,528
60,706
31,828
7,225
39,053
-
-
-
-
-
-
Other segment information for
the year ended
Capital expenditure on PPE and
intangibles
Depreciation and amortisation
30 Jun 2020
30 Jun 2020
30 Jun 2020
30 Jun 2020
30 Jun 2020
191
21
41
1,285
588
3,201
820
4,507
-
1,250
70
Joyce Corporation Ltd Annual Report 2020
70
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
5. SEGMENT INFORMATION (CONTINUED)
(a) 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 2019.
Continuing operations
Continuing
operations
Discontinued
operations
Year Ended
Revenue
Revenue
Inter-segment sales
Total segment revenue
Timing of revenue recognition:
At a point in time
Over time
Unallocated revenue
Total consolidated revenue
Result
Segment result
Unallocated expenses net of
unallocated income
Income tax expense
Net consolidated profit/(loss) for
the year
As at
Assets and liabilities
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Other segment information for the
year ended
Capital expenditure on PPE and
intangibles
Depreciation and amortisation
Bedshed
Franchise
Retail Bedding
Stores
Retail Kitchen
Showrooms
$000
2019
5,465
-
5,465
146
5,319
5,465
$000
2019
$000
2019
13,776
64,964
-
-
13,776
64,964
13,776
64,964
-
-
13,776
64,964
1,645
779
9,480
Total
$000
2019
84,205
-
84,205
78,886
5,319
84,205
-
84,205
11,904
(2,785)
(2,734)
6,385
Total
$000
2019
19,499
-
19,499
19,499
-
19,499
-
19,499
415
(228)
(61)
126
30 Jun 2019
30 Jun 2019
30 Jun 2019
30 Jun 2019
30 Jun 2019
7,376
11,245
30,972
1,295
6,562
24,448
49,593
7,330
56,923
32,305
9,371
41,676
14,959
720
15,679
4,269
441
4,710
30 Jun 2019
30 Jun 2019
30 Jun 2019
30 Jun 2019
30 Jun 2019
23
20
90
1,363
1,074
2,695
1,187
4,078
1,127
1,060
Joyce Corporation Ltd Annual Report 2020
71
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
5. SEGMENT INFORMATION (CONTINUED)
(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 2020 (2019: none).
6. REVENUE, INCOME AND EXPENSES
(a) Revenue from continuing operations
Revenue from contracts with customers
Sale of goods
Franchise revenue
Other revenue
Rental revenue
Freight recovered
Gain / (loss) on lease modification
Other revenue
Government grants
Consolidated
2020
$000
83,598
3,996
87,594
569
189
45
435
2,700
3,938
2019
restated
$000
80,748
3,457
84,205
438
142
-
965
-
1,545
Government grants
There are no unfulfilled conditions or other contingencies attaching to these grants. The Consolidated Entity
did not benefit directly from any other forms of government assistance.
Disaggregation of revenue
The Executive review the business at the level of disaggregation shown as per Note 5 Segment Information. The
disaggregation of revenue follows the operating segments identified, being revenue from the following activities
and arrangements:
-
-
Franchising, the majority of revenue is earnt through payments made by the Franchisees for the services
Bedshed provide in connection with the Franchise; and
Retail Bedding Stores and Retail Kitchen Showrooms, revenue is earnt at the point of product delivery.
In understanding the segments, the organisation rarely considers the geographic location of the customer as
being the driver to an increased understanding.
72
Joyce Corporation Ltd Annual Report 2020
72
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
6. REVENUE, INCOME AND EXPENSES (CONTINUED)
(a) Revenue from continuing operations (continued)
Disaggregation of revenue (continued)
In the Bedshed company-owned-stores entity, we have three trading locations in Queensland and two in Western
Australia. Their location is not the driver of understanding the business, greater insight comes from consideration
of the broader macro-economic factors in play that would influence demand, and in the case of company-owned
stores this would be the mining and resource cycle, housing market and consumer confidence.
KWB, an operator of retail kitchen and wardrobe showrooms is exposed to fluctuations in overall consumer
renovation spend.
There were no new revenue streams during the financial year ended 30 June 2020 (2019: nil).
The following table lays out the facts and circumstances that pertain to the Company’s contracts for continuing
operations with customers and depicts how the nature, amount, timing and uncertainty of revenue and cash
flows are affected by economic factors.
Bedshed Franchise
Franchise revenue -
Retail Bedding
Stores
Sale of goods
-
Retail Kitchen
Showrooms
Sale of goods
Operating
segment / Factor
Nature of the
revenue
Market
-
Economic drivers
of revenue
-
-
Franchising in
specialty retail
Consumer
confidence; and
- Growth in disposable
-
income.
Contractual
arrangements
Specific revenue
recognition
criteria
Contractual
assets or
liabilities
Standard form
contract
Recognition based on
business written
sales from franchised
stores
Nil
Specialty retail -
Renovations
Consumer
confidence;
-
Consumer
confidence;
- Growth in
disposable
income; and
- Mining cycle.
Standard form
contract
Recognition at
the point of
product delivery
-
- Growth in
disposable
income; and
Consumer-spend
on renovations.
Standard form
contract
Recognition at
the point of
product delivery
Bank guarantees,
customer
deposits
Bank guarantees,
customer
deposits
Joyce Corp
Rental revenue
Commercial real
estate
Property cycle.
-
-
-
Lease agreement
Recognition is
monthly as defined in
the relevant lease
agreement
Nil
The recognition of revenue for lease income from the investment property in Lytton, QLD and the
office/warehouse in Osborne Park, WA is made in line with the contractual terms laid out in the leasing
arrangements, principally paid on the first of the month in advance.
Joyce Corporation Ltd Annual Report 2020
73
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
6. REVENUE, INCOME AND EXPENSES (CONTINUED)
(b) Expenses from continuing operations
Cost of sales
Cost of goods
Cost of services
Total cost of sales
Variable costs
Freight
Wages - commissions
Warranty costs
Total variable costs
Employment expenses
Superannuation contributions
Payroll tax
Wages and other employee benefits
Total employment expenses
Impairment of non-financial assets
Bedshed Joondalup goodwill (Note 18)
Lloyds Online Auctions Pty Ltd goodwill (Note 18)
Howe St property (Note 16)
Total impairment of non-financial assets
Net interest income / (expense)
Interest income
Interest expense
Net interest expense
Depreciation and amortisation
Depreciation – property, plant & equipment
Amortisation – Right-of-use asset
Total depreciation and amortisation
Consolidated
2020
$000
(41,385)
(1,172)
(42,557)
(190)
(3,738)
(910)
(4,838)
(1,690)
(1,053)
(17,085)
(19,828)
(1,820)
(2,557)
(1,149)
(5,526)
30
(729)
(699)
(1,346)
(3,260)
(4,606)
2019
restated
$000
(40,147)
(1,226)
(41,373)
(239)
(3,240)
(798)
(4,277)
(1,675)
(1,049)
(16,437)
(19,161)
-
-
-
-
86
(936)
(850)
(989)
(3,197)
(4,186)
74
Joyce Corporation Ltd Annual Report 2020
74
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
6. REVENUE, INCOME AND EXPENSES (CONTINUED)
(b) Expenses from continuing operations (continued)
Administration expenses
IT, communications and network costs
Bank charges
Consultancy fees
Travel expenses
Postage and stationery
Insurance
Accounting and audit fees
Motor vehicle expenses
Legal fees
(Loss) / profit on sale of fixed assets
Other administration expenses
Expected credit loss (Note 14)
Low value asset lease expense
Total administration expenses
Consolidated
2020
$000
(1,001)
(527)
(130)
(400)
(79)
(243)
(319)
(62)
(60)
(14)
(562)
(210)
(1)
(3,608)
2019
restated
$000
(893)
(461)
(195)
(488)
(104)
(214)
(174)
(61)
12
10
(138)
-
-
(2,706)
Lease payments and other expenses included in the statement of profit or loss and other comprehensive
income – continuing operations
Lease payments
Minimum lease payments - operating lease
Consolidated
2020
$000
(3,711)
2019
restated
$000
(3,693)
Joyce Corporation Ltd Annual Report 2020
75
75
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
7. DISCONTINUED OPERATIONS
During the Financial Year the Consolidated Entity ceased ownership of its Online Auctions segment. The
subsidiary was sold in multiple transactions with effect from 17 June 2020 and is reported in the current year as
discontinued operations.
The comparative year, 30 June 2019 has been restated as a discontinued operation for comparability.
Disposal of 10% interest
On 2 March 2020, Joyce Corporation Ltd sold 10% of its interest in Lloyds Online Auctions Pty Ltd to the Lloyds
Legacy Trust for $1.44 million.
Disposal of 46% interest
On 17 June 2020, Joyce Corporation Ltd sold its remaining 46% interest in Lloyds Online Auctions Pty Ltd to Jacqst
Enterprises Pty Ltd as trustee for the Sarkis Family Trust No 6 (being an entity controlled by Steve Sarkis, a
Director of Lloyds Online Auctions Pty Ltd), for $3.80 million.
The material terms the transaction for the sale of the 46% interest are set out below:
-
-
-
Joyce Corporation Ltd through its wholly owned subsidiary, Joyce International Pty Ltd has agreed to
sell 3,151,830 fully paid ordinary shares in Lloyds Online Auctions Pty Ltd (representing a 46%
shareholding in Lloyds Online Auctions Pty Ltd) to Jacqst Enterprises Pty Ltd as trustee for the Sarkis
Family Trust No 6 (“the Buyer”).
The Buyer must pay an aggregate consideration of $3.80 million for the acquisition of the shares:
- A $0.50 million non-refundable deposit was payable by the Buyer to Joyce (“Deposit”) on
execution of the sale agreement.
- The remaining $3.30 million of the purchase price is payable by the Buyer to an escrow
account, with the full amount being payable by 24 September 2020.
The $3.3 million will be released to Joyce on completion of the transaction. The receivable amount is
secured via the share investment.
At reporting date, a total of $1.95 million had been received according to the payment schedule, being:
-
-
$1.44 million relating to the 10% interest; and
$0.51 million relating to the 46% interest.
These multiple transactions have been treated as a single event in the Financial Statements, as they were all
designed to achieve a single overall commercial effect.
76
Joyce Corporation Ltd Annual Report 2020
76
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
7. DISCONTINUED OPERATIONS (CONTINUED)
The financial performance and cash flow information are for the period 1 July 2019 to 17 June 2020 (2020
column) and the year ended 30 June 2019.
Discontinued operations
Revenue
Expenses
(Loss) / profit before income tax benefit / (expense)
Income tax benefit / (expense)
(Loss) / profit of discontinued operation after income tax
(Loss) on disposal of the division after income tax (a)
(Loss) / profit from discontinued operations
Consolidated
2019
restated
$000
19,499
(19,312)
187
(61)
126
-
126
2020
$000
15,595
(17,463)
(1,868)
358
(1,510)
(809)
(2,319)
The net cash flows of the discontinued division, which have been incorporated into the statement of
cash flows, are as follows:
Net cash inflow from operating activities
Net cash (outflow) from investing activities
Net cash (outflow) from financing activities
Net increase in cash generated by the discontinued
division
(a) Details of the disposal of the division:
Consideration received or receivable:
Received
Deferred
Total disposal consideration
Carrying amount of net assets sold (b)
Carrying amount of non-controlling interest
Goodwill
(Loss) on sale before income tax
Income tax (expense) / benefit
(Loss) on sale after income tax
Consolidated
2019
restated
$000
1,511
(1,078)
(413)
20
2020
$000
1,147
(198)
(309)
640
1,957
3,290
5,247
2,775
(862)
4,226
(892)
83
(809)
Joyce Corporation Ltd Annual Report 2020
77
77
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
7. DISCONTINUED OPERATIONS (CONTINUED)
(b) The carrying amount of assets and liabilities as at the date of disposal (17 June 2020) were:
Current assets
Current liabilities
Current net assets / (liabilities)
Non-current assets
Non-current liabilities
Non-current net assets / (liabilities)
Net assets
$000
2,698
(3,956)
(1,258)
5,104
(1,071)
4,033
2,775
78
Joyce Corporation Ltd Annual Report 2020
78
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
8. INCOME TAX
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.
The major components of income tax expense for the financial year ended 30 June are:
Current Income tax
Current income tax expense
Deferred income tax
Relating to origination and reversal of temporary differences
Utilisation of unused tax losses
Under / (over) provision in respect of prior years
Income tax expense relating to continuing operations
Income tax (benefit) / expense relating to discontinued operations
Income tax expense relating to overall operations
Consolidated
2020
$000
2019
restated
$000
3,619
2,822
(531)
26
(16)
3,098
(136)
37
11
2,734
(441)
61
2,657
2,795
Joyce Corporation Ltd Annual Report 2020
79
79
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
8. INCOME TAX (CONTINUED)
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 financial years ended
30 June 2020 and 30 June 2019 is as follows:
Profit before income tax – continuing operations
Income tax expense calculated at the statutory income tax rate of 30%
(2019: 30%)
Impairment expense
Other items not allowed / (not assessable) for income tax purposes
(Under) / over provision in respect of prior years
Income tax expense recognised in profit or loss – continuing operations
Consolidated
2020
$000
5,772
2019
restated
$000
9,119
1,732
2,736
1,658
(34)
(258)
3,098
-
(2)
-
2,734
Tax consolidation
Joyce Corporation Ltd and its 100% Australian owned subsidiaries are a tax group. Members of the group 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 group is Joyce Corporation
Ltd.
Measurement method adopted under UIG 1052 Tax Consolidation Accounting
The head entity and the controlled entities in the tax group continues to account for their own current and
deferred tax amounts. The group has applied the group allocation approach in determining the appropriate
amount of current taxes and deferred taxes to allocate to members of the tax group. 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 group.
Tax consolidation contributions / (distributions)
The Consolidated Entity has recognised no consolidation contribution or distribution adjustments.
Taxation of financial arrangements
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 2020 (2019: $nil).
80
Joyce Corporation Ltd Annual Report 2020
80
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
8. INCOME TAX (CONTINUED)
Deferred income tax
Deferred income tax at 30 June 2020 relates to the following:
De-
recognition
of Lloyds
Online
Auctions Pty
Ltd
$000
Consolidated
Closing
balance
30 June 2020
$000
Opening
balance
1 July 2019
$000
Recognised in
profit or loss
statement
$000
Deferred tax liabilities
Investment property
Trade & other receivables
Fair value gains on other intangible assets
Right-of-use asset
Balance at 30 June 2020
Deferred tax assets
Property, plant and equipment
Trade and other payables
Pensions and other employer obligations
Provisions
Lease liabilities
Other
Unused Tax losses
Balance at 30 June 2020
(304)
(5)
(260)
(3,939)
(4,508)
324
155
842
162
4,660
4
55
6,202
(28)
(179)
-
643
436
563
(30)
197
(20)
(774)
(40)
543
439
-
(20)
-
241
221
-
-
(245)
-
(306)
72
(598)
(1,077)
(332)
(204)
(260)
(3,055)
(3,851)
887
125
794
142
3,580
36
-
5,564
The Consolidated Entity has accounted for all deferred tax assets and liabilities.
Joyce Corporation Ltd Annual Report 2020
81
81
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
8. INCOME TAX (CONTINUED)
Deferred income tax (continued)
Deferred income tax at 30 June 2019 relates to the following:
Consolidated
Opening
balance
1 July 2018
restated
Recognised in
profit or loss
statement
Closing balance
30 June 2019
restated
$000
$000
$000
(291)
(3)
(260)
(4,237)
(4,791)
251
241
753
91
4,825
5
103
6,269
(13)
(2)
-
298
283
73
(86)
89
71
(165)
(1)
(48)
(67)
(304)
(5)
(260)
(3,939)
(4,508)
324
155
842
162
4,660
4
55
6,202
Deferred tax liabilities
Investment property
Trade & other receivables
Fair value gains on other intangible assets
Right-of-use asset
Balance at 30 June 2019
Deferred tax assets
Property, plant and equipment
Trade and other payables
Pensions and other employer obligations
Provisions
Lease liabilities
Other
Unused Tax losses
Balance at 30 June 2019
82
Joyce Corporation Ltd Annual Report 2020
82
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
8. INCOME TAX (CONTINUED)
Provision for income tax
Provision for income tax relates to the following:
Balance at 30 June
9. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
Right-of-use assets relates to the following:
Year ended 30 June 2020
At 1 July 2019, net of accumulated amortisation
(restated)
Additions
Amortisation charge for the year (a)
Modifications to lease terms
Variable lease payment adjustments
Disposals
At 30 June 2020, net of accumulated amortisation
(a) Relates solely to continuing operations.
Year ended 30 June 2019
At 1 July 2018, net of accumulated amortisation
(restated)
Additions
Amortisation charge for the year (a)
Variable lease payment adjustments
At 30 June 2019, net of accumulated amortisation
Consolidated
2020
$000
484
2019
restated
$000
128
Property and
buildings
$000
Plant and
equipment
$000
Total
$000
12,129
374
12,503
2,780
(3,246)
(164)
(327)
(1,024)
10,148
-
(14)
-
-
(313)
47
2,780
(3,260)
(164)
(327)
(1,337)
10,195
Property and
buildings
$000
Plant and
equipment
$000
Total
$000
13,185
2,206
(3,538)
276
12,129
-
13,185
497
(123)
-
374
2,703
(3,661)
276
12,503
(a) Being continuing operations of $3.20 million and discontinued operations of $0.46 million.
Joyce Corporation Ltd Annual Report 2020
83
83
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
9. RIGHT-OF-USE ASSETS (CONTINUED)
The following amounts relating to leased assets have been included as income or expense in the consolidated
statement of profit or loss and other comprehensive income during the year:
Rental income (included in Other income)
Gain / (loss) on lease modification (included in Other income)
Interest expense (included in Net interest expense)
Expense relating to short term leases (included in Occupancy
expenses)
Expense relating to leases of low value assets that are not short-
term leases (included in Administration expenses)
Expense relating to variable lease payments not included in lease
liabilities (included in Occupancy expenses
Lease liabilities relates to the following:
Current
Lease liabilities
Non-current
Lease liabilities
Consolidated
2020
$000
569
45
593
3
1
-
2019
restated
$000
439
-
671
-
-
-
Consolidated
2020
$000
2019
restated
$000
3,370
4,401
8,587
10,069
84
Joyce Corporation Ltd Annual Report 2020
84
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
10. EARNINGS / (LOSS) PER SHARE
Basic and diluted earnings per share are calculated based on a weighted average of any shares issued during the
financial year.
The following reflects the income and share numbers used in the continuing operations basic and diluted
earnings per share computations:
Consolidated
2020
2019
restated
Basic earnings per share:
Net (loss) / profit attributable to ordinary Joyce
shareholders from continuing operations
$000
(1,107)
3,281
Weighted average number of ordinary shares including
partly paid shares
Number
28,047,202
27,968,255
(Loss) / earnings per share
Cents per
share
(3.95)
11.73
Diluted earnings per share:
Net (loss) / profit attributable to ordinary Joyce
shareholders from continuing operations
$000
(1,107)
3,281
Weighted average number of ordinary shares including
partly paid shares (a)
Number
28,047,202
27,968,255
(Loss) / earnings per share
Cents per
share
(3.95)
11.73
Basic earnings per share excluding impairment expense
amount:
Net profit attributable to ordinary Joyce shareholders from
continuing operations excluding impairment expense
amount
$000
4,419
3,281
Weighted average number of ordinary shares including
partly paid shares
Number
28,047,202
27,968,255
Earnings per share
Cents per
share
15.76
11.73
(a) The Performance Rights have not been included in the denominator of the diluted shares.
(Loss) / earnings per share are included at the foot of the Consolidated Statement of Profit or Loss.
Movement in number of shares
In the 2019 Annual General Meeting on 25 November 2019, the members approved the issue of 131,579 fully
paid ordinary shares to Starball Pty Ltd. Refer to Note 29(i) in relation to details of the shared-based payment.
Joyce Corporation Ltd Annual Report 2020
85
85
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
11. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Refer to
Note 3 in relation to the management of financial risks of cash. Bank overdrafts are shown within borrowings in
current liabilities on the statement of financial position.
Funds held in Trust
Consolidated cash and cash equivalents balance exclude funds allocated for the specific use of operating the
Approved Purposes activities on behalf of the Company’s franchisees. Approved Purposes cash is included in
Other Financial Assets. At 30 June 2020, the total of this balance was $0.18 million (2019: $0.03 million).
For the purposes of the statement of cash flows, cash and cash equivalents are comprised of the following:
Cash at bank and in hand
12. TRADE RECEIVABLES
Current
Trade receivables
Allowance for expected credit loss
Total current trade receivables
Consolidated
2020
$000
10,643
2019
$000
6,975
Consolidated
2020
$000
892
(6)
886
2019
restated
$000
2,375
(20)
2,355
Trade and other receivables are non-interest bearing. Trade and other receivables are recognised at amortised
cost, less an allowance for expected credit loss. Each operating segment’s policy requires customers to pay in
accordance within agreed payment terms. Depending on the customer segment, trade receivables are generally
due for settlement within 30 days.
An allowance for the expected credit loss of $6,000 (2019: $20,000) has been recognised by the Consolidated
Entity in the Financial Year for trade and other receivables. This amount has been included in the other expenses
line item in the Consolidated Statement of Profit and Loss.
86
Joyce Corporation Ltd Annual Report 2020
86
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
12. TRADE RECEIVABLES (CONTINUED)
At 30 June, the ageing analysis of current trade receivables is as follows:
Within one year
Consolidated
2019
restated
$000
2,355
2020
$000
886
At reporting date, trade receivables with a carrying amount of $0.17 million (2019: $0.32 million) were past due
but not considered impaired. 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 debtors
and is satisfied that payment will be received in full.
Other balances within trade and other receivables are neither impaired nor past due. It is expected that these
other balances will be received when due.
Movements in the allowance for expected credit loss for trade and other receivables were as follows:
At 1 July
(Credit) / charge for the year
At 30 June
Consolidated
2019
restated
$000
6
14
20
2020
$000
20
196
216
Joyce Corporation Ltd Annual Report 2020
87
87
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
13. INVENTORIES
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 to make
the sale.
Current
Stock on hand at cost
Provision for impairment (a)
Consolidated
2020
$000
3,092
(118)
2,974
2019
restated
$000
3,283
(98)
3,185
(a) Write-downs of inventories to net realisable value recognised as an expense during the Financial Year
amounted to $20,000 (2019: $nil).
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
14. OTHER RECEIVABLES AND PREPAYMENTS
Current
Debtor – disposal of Lloyds Online Auctions Pty Ltd (a)
Allowance for expected credit loss (b)
Accrued revenue
Prepayments
Other receivables
Total current other assets
Non-current
Other receivables (c)
Consolidated
2020
$000
3,290
(210)
877
208
3
4,168
2019
restated
$000
-
-
807
327
325
1,459
157
399
(a) Refer to Note 7 in relation to the material terms of the disposal transaction.
(b) This allowance is for the expected credit loss associated with any shortfall on the debtor for the Lloyds Online
Auctions Pty Ltd sale made on 17 June 2020. The assumptions applied to this amount include historical collection
rates, the impact of the COVID-19 pandemic and forward-looking information that is available.
(c) Non-current other receivables are cash-backed rental deposits for the KWB Group.
15. OTHER FINANCIAL ASSETS
Current
Funds held in trust (Note 11)
16. PROPERTY, PLANT AND EQUIPMENT
Consolidated
2020
$000
179
2019
restated
$000
31
Land and buildings are shown at carrying value/cost, based on periodic, but at least triennial, valuations by
external, professionally qualified 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. In June 2020 an independent valuation was obtained
for the land & buildings. 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.
Refer to Note 28 in relation to the fair value measurement and valuation technique used.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
16. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Depreciation is calculated over the estimated useful life of the asset as follows:
-
-
-
-
Plant and equipment – 1 to 20 years;
Leasehold improvements – 3 to 15 years;
Buildings – 30 to 50 years; and
Motor Vehicles – 3 to 6 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 Consolidated Statement of Profit or Loss. On the
sale of revalued assets, the profit element of the revalued amount is taken through the Consolidated Statement
of Profit or Loss.
Consolidated
Property and
buildings (a)
$000
Plant and
equipment
$000
Leasehold
improvements
$000
Total
$000
6,709
2,557
2,235
11,501
-
(1,149)
-
(60)
337
-
(336)
(672)
308
-
(507)
(615)
645
(1,149)
(843)
(1,347)
5,500
1,886
1,421
8,807
6,845
(196)
(1,149)
5,500
4,269
(2,383)
-
1,886
3,777
(2,356)
-
1,421
14,891
(4,935)
(1,149)
8,807
Year ended 30 June 2020
At 1 July 2019At 1 July 2018,
At 1 July 2019, net of depreciation
(restated)
Additions
Impairment
Disposals
Depreciation charge for the year (b)
At 30 June 2020, net of accumulated
depreciation
At 30 June 2020
Cost
Accumulated depreciation
Accumulated impairment
Net carrying amount
(a) Property and buildings – leased includes an office/warehouse property which is owned by the Company and
is partially leased to unrelated third parties.
(b) Relates solely to continuing operations.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
16. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
YEAR ENDED
30 JUNE 2020
Consolidated
Year ended 30 June 2019
At 1 July 2019At 1 July 2018,
At 1 July 2018, net of depreciation
(restated)
Additions
Impairment
Disposals
Depreciation charge for the year (b)
At 30 June 2019, net of accumulated
depreciation
At 30 June 2019
Cost
Accumulated depreciation and
impairment
Property and
buildings (a)
$000
Plant and
equipment
$000
Leasehold
improvements
$000
Total
$000
6,768
2,013
1,965
10,746
6
-
-
(65)
914
-
(56)
(314)
880
-
-
(610)
1,800
-
(56)
(989)
6,709
2,557
2,235
11,501
6,844
3,973
4,063
14,880
(135)
(1,416)
(1,828)
(3,379)
Net carrying amount
6,709
2,557
2,235
11,501
(a) Property and buildings – leased includes property which is owned by the Company and is leased to
unrelated third parties.
(b) Relates solely to continuing operations.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
17. INVESTMENT PROPERTY
Balance at 30 June
Consolidated
2020
$000
9,623
2019
$000
9,623
In accordance with AASB 140 Investment Property, the KWB property located in Lytton, QLD is classified as an
investment property. An insignificant portion of the Lytton premise is owner-occupied, being 42%, as the
significant portion is under an operating lease to an external third-party manufacturer earning rental income.
Fair value measurement
The investment property is subject to an annual review to fair market value at each reporting period by either
an independent expert valuation or Management’s valuation. The aim of the valuation process is to ensure that
the investment property is held at fair value and the Consolidated Entity is compliant with applicable accounting
standards.
The independent valuation is performed by an external, professionally qualified valuer who holds a recognised
relevant professional qualification and has specialised expertise in the property being valued.
For the financial year ended 30 June 2020, the Directors of the Company performed an internal Management
valuation.
Refer to Note 28 in relation to the fair value measurement and valuation technique used.
18. INTANGIBLE ASSETS
Software development
Goodwill
Total intangible assets
Consolidated
2020
$000
180
7,330
7,510
2019
$000
2,437
15,932
18,369
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 Consolidated Statement of Profit or Loss through the ‘depreciation and amortisation’ expense 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 annually in the case of intangible assets with indefinite
lives, 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.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
18. INTANGIBLE ASSETS (CONTINUED)
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, it 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 (CGU’s) for impairment testing. Each of those CGU’s represents
the Consolidated Entity’s investment in Australia by each operating segment. CGU’s to which goodwill is allocated
as at 30 June 2020 are as follows:
-
-
Bedshed Franchising cash generating unit; and
KWB Group Pty Ltd cash generating unit.
Software development
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.
Impairment of non-financial assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are 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.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
18. INTANGIBLE ASSETS (CONTINUED)
Impairment of non-financial assets (continued)
An analysis of intangible assets is presented below.
Goodwill
Software
Development
Consolidated
2019
restated
$000
2020
$000
2019
restated
$000
2020
$000
2020
$000
2019
restated
$000
15,933
15,933
2,436
2,230
18,369
18,163
-
(4,377)
(4,226)
-
-
-
-
-
180
-
(2,436)
-
528
-
-
(322)
180
(4,377)
(6,662)
-
528
-
-
(322)
7,330
15,933
180
2,436
7,510
18,369
17,778
(4,226)
(6,222)
-
7,330
17,778
-
(1,845)
-
15,933
2,616
(2,436)
-
-
180
2,758
-
-
(322)
2,436
20,394
(6,662)
(6,222)
-
7,510
20,536
-
(1,845)
(322)
18,369
Year ended 30 June
Net of accumulated impairment
and amortisation at 1 July
Additions
Impairment
Disposals
Amortisation (a)
Net of accumulated impairment
and amortisation at 30 June
At 30 June
Cost (gross carrying amount)
Disposals
Accumulated impairment
Accumulated amortisation (a)
Net carrying amount
(a) Relates to discontinued operations.
Goodwill
Goodwill
Goodwill as at 30 June 2020 reflects the value of the Bedshed Franchising Pty Ltd activities, purchased in 2006
and the interest in the KWB Group, acquired in October 2014.
Software development
Software development as at 30 June 2020 reflects the value of the HarmoniQ point of sale system in the Bedshed
Franchise and Retail Bedding Stores segments.
As at 30 June 2019 software development reflects the value of the Auctionator platform, Lead Generation
Platform and the European Union Bidding Platform in the Online Auctions segment.
Impairment
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. Impairment of $4.38 million (2019: $nil) has been recognised in respect of
goodwill and impairment of $nil (2019: $nil) has been recognised in respect of software development for the
year ended 30 June 2020.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
18. INTANGIBLE ASSETS (CONTINUED)
Allocation of goodwill
Goodwill is allocated to cash-generating units which are based on the Consolidated Entity’s operating segments:
Consolidated
Bedshed Franchising segment
Bedshed Stores segment (a)
Kitchen Showrooms segment
Online Auctions segment (b)
Total goodwill
2020
$000
6,307
-
1,023
-
7,330
2019
$000
6,307
1,820
1,023
6,783
15,933
(a) Refer to ‘impairment of goodwill’ for movement during the Financial Year. The Bedshed Stores segment was
impaired by an amount of $1.82 million (2019: $nil).
(b) Refer to Note 7 in relation to the disposal of the Online Auctions segment and discontinued operation. The
Online Auctions segment was impaired by an amount of $2.56 million (2019: $nil), prior to disposal of the balance
of goodwill of $4.22 million on 17 June 2020.
Impairment of goodwill
The recoverable amount of each CGU 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 the existing budget for FY20 extrapolated using estimated growth rates. The cash flows are discounted
using risk-adjusted pre-tax discount rate.
The following assumptions were used in the value-in-use calculations:
Bedshed Franchising segment
Bedshed Stores segment
Kitchen Showrooms segment
Online Auctions segment (a)
Pre –tax
Discount
Rate
2020
9.7%
9.7%
9.7%
-
Pre –tax
Discount
Rate
2019
10.7%
10.7%
10.7%
10.7%
Sales
Growth
Rate
2020
2.0%
2.0%
5.0%
-
Sales
Growth
Rate
2019
5.0%
5.0%
5.0%
5.0%
Expense
Growth
Rate
2020
1.5%
1.5%
1.5%
-
Expense
Growth
Rate
2019
1.5%
1.5%
1.5%
1.5%
(a) Refer to Note 7 in relation to the disposal of the Online Auctions segment and discontinued operation.
The Online Auctions segment was assessed in the year ended 30 June 2019 using the discounted cashflow
method. For the year ended 30 June 2020, the fair value less cost of disposal method was used.
The Consolidated Entity’s value-in-use calculations incorporated a terminal value component beyond the 5-year
projection period for all the operating segments. The principal assumption used to estimate the terminal value
of each operating segment was a multiple of two to eight times earnings (Bedshed Stores 2, Franchising 3 and
Kitchen Showrooms 8) before interest, taxation, depreciation and amortisation for the financial year ended 30
June 2020.
Impairment of Goodwill for the financial year ended 30 June 2020 was $4.38 million (2019: $nil), due to changes
in the estimates of future results and terminal value for the Bedshed Stores segment and the sale of the majority
ownership of Lloyds Online Auctions Pty Ltd.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
18. INTANGIBLE ASSETS (CONTINUED)
Impact of possible changes in key assumptions
Sensitivity analysis was conducted on all CGU’s, from this the Bedshed Franchising segment was identified as
having the lowest headroom and is the only one reported. For the Bedshed Franchising segment:
-
-
If the pre-tax discount rate applied was 10% higher than used in the Consolidated Entity’s estimates,
then the Consolidated Entity would recognise an impairment of $nil.
If the growth rate applied was 10% lower than used in the Consolidated Entity’s estimates, then the
Consolidated Entity would recognise an impairment of $nil.
The discount rate above which an impairment could occur is 12.96%, which is above the rate used in both FY19
and FY20.
19. TRADE AND OTHER PAYABLES
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.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their
short-term nature.
Unsecured liabilities
Trade payables
Sundry creditors
Contract liabilities (a)
Accruals and other payables
Consolidated
2020
$000
2,227
35
7,980
2,532
12,774
2019
restated
$000
3,771
98
6,351
3,977
14,197
(a) These are deposits from customers for goods and services to be provided by the Consolidated Entity after
reporting date.
20. DIVIDEND PAYABLE
Dividend payable at 30 June
Consolidated
2020
$000
1,405
2019
$000
-
The FY20 interim fully franked dividend of $1.40 million resolved on 25 February 2020 is payable on 25 September
2020, (deferred from 6 May 2020 due to the commercial uncertainty surrounding the COVID-19 pandemic).
The Directors resolved that a FY20 final dividend of 2.7 cents per share, fully franked, be paid by Joyce
Corporation Limited on 16 November 2020 to all shareholders registered as at the record date of 10 November
2020.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
21. PROVISIONS
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 several 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.
Provision for fixed assets used in KWB showrooms
The provision relates to assets used in KWB’s retail kitchen and wardrobe showrooms and is reduced in value
over five years and at the time of sale.
Provision for employee benefits
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.
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 of corporate bonds at the reporting date, with terms to maturity and currency that match as
closely as possible, the estimated future cash outflows.
Provisions are comprised of the following:
Current
Make good provision
Employee benefits
Non-current
Make good provision
Employee benefits
Consolidated
2020
$000
60
1,515
1,575
288
968
1,256
2019
restated
$000
-
1,751
1,751
240
776
1,016
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
21. PROVISIONS (CONTINUED)
Provision for employee benefits (continued)
Calculation of 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.
Movement in provisions
The movement in provisions during the Financial Year is set out in the table below.
Opening balance at 1 July 2019
Additional / (amount released)
Closing balance at 30 June 2020
22. LOANS AND BORROWINGS
Current
Bank loans
Non-current
Bank loans
Total loans and borrowings
Employee Benefits
$000
2,528
(45)
2,483
Make good
provision
$000
240
108
348
Total
$000
2,768
63
2,831
Consolidated
2020
$000
2019
restated
$000
521
694
5,230
5,751
9,622
10,316
Secured liabilities and assets pledged as security
The bank loans are secured by first mortgages over the Consolidation Entity’s freehold land and buildings,
including those classified as investment properties. Refer to Note 23 in relation to facility details.
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements
revert to the lessor in the event of default. Refer to Note 9 in relation to lease liabilities.
Compliance with loan covenants
The Consolidated Entity has complied with the financial covenants of its borrowing facilities during the Financial
Year. The financier assesses the financial covenants bi-annually based on the audited annual report and reviewed
half-yearly report. There are no breaches of the facility as of the date of this report.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
23. FINANCING FACILITIES AVAILABLE
At reporting date, the following financing facilities had been negotiated and were available:
Total facilities:
CBA market rate loan 1
CBA market rate loan 2
CBA multi option facility
St George commercial bill
NAB business loan
CBA business loan
Total available facilities
Facilities used at reporting date:
CBA market rate loan 1
CBA market rate loan 2
CBA multi option facility
St George commercial bill
NAB business loan
CBA business loan
Total used facilities
Facilities unused at reporting date:
CBA market rate loan 1
CBA market rate loan 2
CBA multi option facility
St George commercial bill
NAB business loan
CBA business loan
Total unused facilities
Key terms of finance facilities
Facility
CBA market rate loan 1
CBA market rate loan 2
CBA multi option facility
NAB business loan
Consolidated
2020
$000
4,751
1,000
415
-
4,000
-
10,166
4,751
1,000
-
-
-
-
5,751
-
-
415
-
4,000
-
4,415
2019
restated
$000
-
-
-
5,000
-
5,600
10,600
-
-
-
4,716
-
5,600
10,316
-
-
-
284
-
-
284
Loan term
2 years
2 years
2 years
1 year
Expiry date
27/09/2021
27/09/2021
27/09/2021
31/07/2020 (a)
(a) Refer to Note 32 in relation to the extension of the expiry date after reporting date.
Joyce Corporation Ltd Annual Report 2020
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
24. ISSUED CAPITAL
Ordinary shares carry one vote per share and carry the right to dividends.
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.
Opening share capital
Issued and fully paid ordinary shares 27,588,255 (2018: 27,588,255)
Fully paid ordinary shares issued during the year
Closing share capital
Movement in ordinary shares on issue:
At 1 July 2019
Final payment on partly paid ordinary shares (a)
Fully paid ordinary shares issued during the year
At 30 June 2020
Consolidated
2020
$000
18,090
190
18,280
2019
$000
18,090
-
18,090
Number
27,968,255
131,579
28,099,834
Consolidated
$000
18,090
190
18,280
Unmarketable share sale facility
During the Financial Year, the Company offered a share sale facility of ordinary shares for holders of
unmarketable parcels, to assist those holders to sell their shares without having to use a broker or pay brokerage.
The final number of shares sold under the facility was 17,274 shares from 89 holders, which represents
approximately 11.6% of the total number of shareholders who held shares in the company prior to disposal of
the unmarketable parcels of shares.
25. CASH FLOW STATEMENT RECONCILIATIONS
Reconciliation of non-cash investing and financing activities
Consolidated
2020
$000
-
2019
restated
$000
377
Acquisition of property, plant and equipment by means of finance
leases
Non-cash investing and financing activities disclosed in other notes are:
- Acquisition of right-of-use assets, refer to Note 9.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
25. CASH FLOW STATEMENT RECONCILIATIONS (CONTINUED)
Reconciliation of net debt
Cash and cash equivalents
Loans and borrowings - repayable within one year
Loans and borrowings - repayable after one year
Net debt
Cash and liquid investments
Gross debt - floating
Net debt
Consolidated
2020
$000
10,643
(521)
(5,230)
4,892
10,643
(5,751)
4,892
2019
restated
$000
6,975
(694)
(9,622)
(3,341)
6,975
(10,316)
(3,341)
Reconciliation of net cash flow to movement in net debt:
Net debt at beginning of year
(3,341)
(4,276)
Increase / (decrease) in cash
Net repayment of / (increase) in short-term loans
Net repayment of / (increase) in long-term loans
Net repayment of / (increase) under finance leases
Other non-cash movements
Movements in net debt
3,668
-
4,565
-
-
8,233
760
-
175
-
-
935
Net debt at end of year
4,892
(3,341)
Reconciliation of lease liability
Current lease liability
Loans and borrowings - repayable within one year
Net debt
Reconciliation of net cash flow to movement in lease liability:
Lease liability at beginning of year
Lease (payments) in cash
s) in cash
Interest
Lease additions
Variable lease payment adjustments and modifications to leases
Leases associated with discontinued operations
Movements in lease liabilities
Consolidated
2020
$000
3,370
8,587
11,957
2019
restated
$000
4,401
10,069
14,470
14,470
15,078
(3,711)
583
2,754
(533)
(1,606)
(2,513)
(4,334)
783
2,666
277
-
(608)
Lease liabilities at end of year
11,957
14,470
Joyce Corporation Ltd Annual Report 2020
101
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
26. CAPITAL AND LEASING COMMITMENTS
There have been significant changes to commitments during the Financial Year. These are driven by the
following changes:
Retail Kitchen Showrooms segment:
- One new showroom lease;
-
-
The renewal of 3 leases for existing showrooms; and
The extension of 8 leases for existing showrooms related to agreements reached for rent assistance
during COVID-19 negotiations.
There were no significant changes to capital and leasing commitments in the Retail Bedding and Franchising
segments.
27. CONTINGENT LIABILITIES
Financial guarantees
Where material, financial guarantees are 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 amount determined in accordance with the
expected credit loss model under AASB 9 Financial Instruments and the amount initially recognised less, where
appropriate, cumulative amounts recognised in accordance with AASB 15 Revenue from Contracts with
Customers. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 15.
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.
At 30 June 2020, the Consolidated Entity had entered into the following guarantees:
(a) Bedshed Franchise and Bedshed Retail Stores have bank guarantees relating to payment of lease obligations
as at 30 June 2020 for $0.83 million (30 June 2019: $0.68 million).
(b) KWB Group has retail lease bank guarantees held against the equity in the 97 Trade Street, Lytton property
as at 30 June 2020 of $0.62 million (30 June 2019: $0.55 million).
No provision has been made in the financial statements in respect of these contingencies as the possibility of a
probable outflow under these guarantees is considered remote.
The KWB Group also has cash backed rental deposits supporting showroom leases as at 30 June 2020 of $98,000
(30 June 2019: $190,000). Refer to Note 14 in relation to the cash-backed rental deposits.
102
Joyce Corporation Ltd Annual Report 2020
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
28. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS
Fair value hierarchy
The Consolidated Entity uses various methods in estimating the fair value of instruments. The methods comprise:
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.
The fair value measurement, valuation technique and inputs used in fair valuing the non-financial instruments
are set out as follows:
Class of property
Property and buildings
Office and warehouse,
Osborne Park WA
Fair
value
hierarchy
Fair value
June
2020
$000
Level 2
5,500
Valuation
technique
Key
unobservable
inputs
Range of
unobservable
inputs
Independent
expert
valuation
Capitalisation
rate
5.25%-5.75%
Investment property
Office and factory, Lytton QLD
Level 2
9,623 Management
valuation
Capitalisation
rate
7.75%
The Consolidated Entity has a number of financial instruments which are not measured at fair value in the
Statement of Financial Position.
The carrying amount of trade receivables and payables are assumed to approximate their fair values due to their
short-term nature.
For the loans and borrowings, the fair values are not materiality different to their carrying values, since their
interest payable on these borrowings are wither close to market rates.
Joyce Corporation Ltd Annual Report 2020
103
103
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
29. SHARE-BASED PAYMENTS
(i) Starball Pty Ltd share-based payment
In the 2019 Annual General Meeting on 25 November 2019, the members approved the issue of 131,579 fully
paid ordinary shares to Starball Pty Ltd. Starball Pty Ltd is an entity controlled by Anthony Mankarios, the former
Joyce Corporation Ltd Executive Director who held that position for nine years. In recognition of the effort that
Anthony Mankarios has put into the Consolidated Entity over that period, the members resolved it was
appropriate to issue 131,579 ordinary shares in the Company to Starball Pty Ltd.
The shares rank equally with the ordinary shares already on issue by the Company. No funds were received or
applied in the issue, as the shares were issued in recognition of Anthony Mankarios’ contribution to the
Company. The fair value of the shares is determined as per the spot rate on grant date, being $1.44 on 25
November 2019.
Recognition and measurement
The cost of the share-based payment is recognised, together with a corresponding increase in equity, in the
period in which the shares were issued (December 2019). An expense of $189,474 was recognised in the
Consolidated Statement of Profit or Loss.
(ii) Key Management Personnel performance rights
The performance rights offered are designed to provide long-term incentives for Key Management Personnel to
deliver long-term shareholder returns. Under the agreement, participants are granted options which only vest if
certain performance standards are met.
Details of the performance rights issued are summarised below.
Beneficiary
Number of Rights Granted
Fair Value per right
Total fair value
Commencement date
Expected vesting date
Vesting conditions
No. of rights expected to vest
Expense recorded at reporting date
Keith Smith (a)
137,032
$1.55
$212,400
Gavin Culmsee
76,387
$1.55
$118,400
1 Jul 2019
30 June 2022 (3 years)
Profit metric over 3 years as described below.
Nil
$Nil
38,194
$19,833
(a) Refer to Note 32 in relation to significant events after reporting date.
104
Joyce Corporation Ltd Annual Report 2020
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ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
29. SHARE-BASED PAYMENTS (CONTINUED)
(ii) Key Management Personnel performance rights (continued)
The expense recognised in respect of the performance rights is based on the Board’s assessment of the
probability that certain milestone earnings will be achieved, measured cumulatively over the three-year period
commencing 1 July 2019 and ending 30 June 2022. There are three milestones: “threshold”; “target”; and
“stretch and above”. Meeting these milestones results in, respectively, 25%, an additional 25%, and the final 50%
of the rights vesting into ordinary shares.
Keith Smith - 137,032 performance rights (a)
Consolidated Entity net profit
after tax cumulative over 3
years greater than ($000):
Threshold
Target
Stretch and above
$32,184
$35,760
$42,912
No. vesting
(%)
Expected Probability of
occurring (%)
Total number
expected to vest
25%
25%
50%
0%
0%
0%
Total expense expected to be recorded over the three-year vesting period
Nil
Nil
Nil
$Nil
(a) In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised his
intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
Gavin Culmsee - 76,387 performance rights
Bedshed EBIT cumulative over
3 years greater than ($000):
Threshold
Target
Stretch and above
$6,570
$7,300
$8,760
No. vesting
(%)
25%
25%
50%
Expected Probability of
occurring (%)
100%
100%
0%
Total number
expected to vest
19,097
19,097
Nil
Total expense expected to be recorded over the three-year vesting period
$59,200
Recognition and Measurement
The schemes in place can only be equity-settled and are accounted for accordingly. The cost of equity-settled
transactions with employees is measured using their fair value at the date which they were granted. In
determining the fair value, no account is taken of any performance conditions.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which any performance conditions are met, ending on the date on which the employee becomes fully
entitled to the award (vesting date).The cumulative expense recognised for these transactions at each reporting
date reflects the extent to which the vesting period has expired and the proportion of the awards that are
expected to ultimately vest.
No expense is recognised for awards that do not ultimately vest due to a performance condition not being met.
Joyce Corporation Ltd Annual Report 2020
105
105
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
30. RELATED PARTY DISCLOSURES
Ultimate controlling entity
The ultimate controlling entity of the Consolidated Entity is Joyce Corporation Ltd.
Shares held by Joyce Corporation Ltd
The consolidated financial statements include the financial statements of Joyce Corporation Ltd and the
subsidiaries listed in the following table.
Joyce International Pty Ltd
Sierra Bedding Pty Ltd
Bedshed Franchising Pty Ltd
Joyce Investments 1 Pty Ltd
(previously named Joyce Industries Pty Ltd)
Joyce Investments 2 Pty Ltd
Joyce Investments 3 Pty Ltd
Joyce Investments 4 Pty Ltd
Joyce Consolidated Holdings Pty Ltd
KWB Group Pty Ltd
KWB Property Holdings Pty Ltd
Brisbane Investment Holdings Pty Ltd
Trade Gold Installations Qld Pty Ltd
Trade Gold Installations NSW Pty Ltd
Trade Gold Installations SA Pty Ltd
Lloyds EU Online Pty Ltd
Lloyds Online Auctions Pty Ltd
Lloyds Auctions & Valuers Pty Ltd
LAAV Group Pty Ltd
Country of incorporation
% Equity interest
Australia
Australia
Australia
2020
100
100
100
2019
100
100
100
Australia
100
100
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
51
51
51
51
51
51
-
-
-
-
-
-
-
100
51
51
51
51
51
51
45
56
56
56
(a)
(b)
(b)
(b)
(c)
(c)
(c)
(c)
(a) These entities were renamed on 29 July 2020.
(b) These entities were incorporated on 17 June 2020.
(c) These entities form the Lloyds Online Auctions Pty Ltd consolidated group. Joyce Corporation Ltd sold its
majority ownership of Lloyds Online Auctions Pty Ltd on 17 June 2020. Refer to Note 7 in relation to the
transaction details.
106
Joyce Corporation Ltd Annual Report 2020
106
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
30. RELATED PARTY DISCLOSURES (CONTINUED)
(a) Related Party Transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
During the Financial Year the entities of the Consolidated Entity entered into the following transactions with
related parties who are not members of the group:
Key Management Personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments (Note 29)
Amounts owing at 30 June 2020
2020
$
2019
$
2,743,365
2,518,804
211,627
65,242
209,307
195,350
95,097
-
3,229,541
2,809,251
As at 30 June 2020 an amount of $0.04 million (2019: $nil) was owing to Directors and Key Management
Personnel. As a result of the COVID-19 pandemic, Directors, KMP and Executive of the Consolidated Entity agreed
to modify their remuneration arrangement to defer 50% of their director fee and/or salary until the trading
environment normalised. In each case, the fee and/or salary deferred during the COVID-19 pandemic period will
be aggregated and paid to the KMP or Executive once the trading environment has normalised.
Other transactions
Dividends paid to KMP
2020
$
2019
$
600,625
1,423,376
Other than the items disclosed above, there are no other material related party transactions during the Financial
Year.
Joyce Corporation Ltd Annual Report 2020
107
107
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
30. RELATED PARTY DISCLOSURES (CONTINUED)
(b) Non-controlling interest
The effect on the equity attributable to the owners of Joyce Corporation Ltd during the year is as follows:
Carrying amount of non-controlling interests acquired
Transactions with non-controlling interests
Profits attributable to non-controlling interests
Carrying value of non-controlling interests disposed (Note 7)
Dividends paid to non-controlling interest
Closing carrying amount of non-controlling interest
2020
$000
2,868
-
3,117
(862)
(1,465)
3,658
2019
restated
$000
2,860
458
3,159
-
(3,609)
2,868
Acquisitions
On 22 January 2019, Joyce Corporation Ltd acquired an additional 5% of the issued capital in Lloyds Online
Auctions Pty Ltd for $1.15 million. The consideration for the acquisition was offset against the loan owed by
Lloyds Online Auctions Pty Ltd to the Company. Immediately prior to the purchase, the carrying amount of the
existing 49% non-controlling interest was $1.06 million.
Disposals
Refer to Note 7 in relation to the Consolidated Entity’s discontinued operations.
108
Joyce Corporation Ltd Annual Report 2020
108
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
30. RELATED PARTY DISCLOSURES (CONTINUED)
(b) Non-controlling interest (continued)
Set out below is summarised financial information for each subsidiary that has non-controlling interests that
are material to the Consolidated Entity. The amounts disclosed for each subsidiary are before inter-group
eliminations.
Statement of financial position
KWB Consolidated Group
Lloyds Consolidated Group
Current assets
Current liabilities
Current net assets
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Accumulated NCI
2020
$000
6,820
(13,122)
(6,302)
22,769
(9,001)
13,768
2019
restated
$000
6,129
(12,214)
(6,085)
23,818
(14,993)
8,825
7,466
2,740
3,658
1,343
2020
$000
-
-
-
-
-
-
-
-
2019
restated
$000
2,619
(3,456)
(837)
5,558
(1,255)
4,303
3,466
1,525
Statement of financial performance
KWB Consolidated Group
Lloyds Consolidated Group
(including discontinued operations)
Revenue
Profit / (loss) for the year
Total comprehensive income
2020
$000
67,498
7,717
7,717
2019
restated
$000
64,964
6,335
6,335
2020
$000
15,595
(1,510)
(1,510)
Profit allocated to NCI
3,781
3,104
(664)
Dividends paid to NCI
(1,465)
(3,609)
-
2019
restated
$000
19,499
126
126
55
-
Statement of cash flow
KWB Consolidated Group
Lloyds Consolidated Group
Cash flow from operating activities
Cash flow (used in) investing activities
Cash flow (used in) financing activities
Net increase / (decrease) in cash and cash
equivalents
2020
$000
11,769
(702)
(10,940)
2019
restated
$000
10,837
(1,507)
(9,363)
127
(33)
2020
$000
1,147
(198)
(309)
640
2019
restated
$000
1,511
(1,078)
(413)
20
Joyce Corporation Ltd Annual Report 2020
109
109
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
31. DIVIDENDS
Dividends declared or paid during the Financial Year are as follows:
Dividends paid or payable
Ordinary shares:
FY18 final fully franked dividend of 6.0 cents per share
FY19 interim fully franked dividend of 5.0 cents per share
FY19 second interim fully franked dividend of 1.7 cents per share
FY19 final fully franked dividend of 5.0 cents per share
FY20 interim fully franked dividend of 5.0 cents per share (a)
Total dividends declared or paid
2020
$000
-
-
-
1,397
1,404
2,801
2019
$000
1,678
1,399
476
-
-
3,553
(a) The FY20 interim fully franked dividend of 5.0 cents per share resolved on 25 February 2020 is payable on 25
September 2020, (deferred from 6 May 2020 due to the commercial uncertainty surrounding the COVID-19
pandemic).
The Directors resolved that a FY20 final dividend of 2.7 cents per share, fully franked, be paid by Joyce Corporation
Limited on 16 November 2020 to all shareholders registered as at the record date of 10 November 2020.
Franking account balance
The amount franking credits available for subsequent financial years from continued operations are:
Franking credits available for subsequent
financial years at 30%
2020
$000
5,539
Consolidated
Parent entity
2019 restated
$000
2020
$000
2019
$000
3,639
2,384
2,330
110
Joyce Corporation Ltd Annual Report 2020
110
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
32. SIGNIFICANT AFTER REPORTING DATE EVENTS
The FY20 interim fully franked dividend of 5.0 cents per share resolved on 25 February 2020 is payable on 25
September 2020, (deferred from 6 May 2020 due to the commercial uncertainty surrounding the COVID-19
pandemic).
In July 2020, KWB Group Pty Ltd updated the expiry date of its bank guarantee facility and business markets loan
held with the National Australia Bank to 31 July 2021. All other limits and terms remain the same.
In the ASX announcement dated 20 July 2020, the Company communicated the planned transition of the Chair.
Michael Gurry announced that he will be standing down as Chair at this year’s Annual General Meeting in
November. Jeremy Kirkwood will take over as the Joyce Chair following the 2020 Annual General Meeting.
In the ASX announcement dated 5 August 2020, the Company communicated that Keith Smith has advised his
intention to step down as Joyce CEO (and Group Company Secretary) later in the 2020 year.
In August 2020, Derek Fowler left as CFO at the end of his fixed term contract.
The full impact of the COVID-19 pandemic continues to evolve at the date of this report. The Consolidated Entity
is therefore uncertain as to the full impact the pandemic will have on the wider economy and as a result on its
financial condition, liquidity, and future results of operations.
In August 2020 the 10 Bedshed stores located in Melbourne closed to the public for 6 weeks as per the
government directive, they have maintained a presence online.
The Directors resolved that a FY20 final dividend of 2.7 cents per share, fully franked, be paid by Joyce
Corporation Limited on 16 November 2020 to all shareholders registered as at the record date of 10 November
2020.
Management is actively monitoring the global and national situation and its impact on the Consolidated Entity’s
financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the
COVID-19 pandemic and government’s responses to curb its spread, at this point the Consolidated Entity is not
able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity
for future financial years.
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, the results of those
operations, or the Consolidated Entity’s state of affairs.
33. AUDITOR’S REMUNERATION
Auditors of the Consolidated Entity
Audit or review of the financial statements:
Group
Total audit or review of the financial statements
Non-audit services:
Consulting services
Total non-audit services
Total services provided by BDO
Consolidated
2020
$000
2019
$000
118
118
10
10
128
115
115
-
-
115
Joyce Corporation Ltd Annual Report 2020
111
111
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
34. RECONCILIATION OF NET PROFIT AFTER TAX TO NET CASH FLOWS FROM CONTINUING OPERATIONS
Reconciliation of net profit / (loss) after tax to the net cash flows from
continuing operations
Net profit after taxation
Adjustments for:
Depreciation and amortisation
Issue of shares
Impairment of Howe St
Impairment of goodwill
Share-based payment
Changes in assets and liabilities:
Decrease in inventories
(Increase) in trade and other receivables (excluding receivable for
discontinued operations)
(Increase) / decrease in other assets
Decrease / (increase) in net deferred tax assets and liabilities
(Decrease) / increase in trade and other payables
Increase / (decrease) in provisions
Consolidated
2020
$000
2019
restated
$000
2,674
6,385
4,606
190
1,149
4,377
20
172
(282)
(148)
(437)
(87)
1,123
4,186
-
-
-
-
758
(213)
37
(629)
2,168
126
Net cash flows from operating activities
13,357
12,818
112
Joyce Corporation Ltd Annual Report 2020
112
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
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
Reserve
Retained earnings
Net equity
b. Financial performance
Profit for the year
Total comprehensive profit
As at 30 June
2020
$000
2,356
26,701
29,057
2,560
5,233
7,793
2019
restated
$000
1,001
23,726
24,727
1,136
4,024
5,160
21,264
19,567
18,280
20
2,964
21,264
18,090
-
1,477
19,567
Year ended 30 June
2020
$000
2,817
2,817
2019
restated
$000
2,962
2,962
c. Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
No such guarantees existed at 30 June 2020 (2019: $nil).
d. Contingent liabilities of the parent entity
No contingent liabilities existed within the parent entity as at 30 June 2020 (2019: $nil).
e. Commitments for the acquisition of property plant and equipment by the parent entity
No commitments existed for the acquisition of property plant and equipment by the parent entity as at 30 June
2020 (2019: $nil).
Joyce Corporation Ltd Annual Report 2020
113
113
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
36. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following new / amended accounting standards and interpretations have been issued but are not mandatory
for financial year ended 30 June 2020. They have not been adopted in preparing the financial statements for the
financial year ended 30 June 2020.
The following amended standards and interpretations are not expected to have a significant impact on the
Consolidated Entity’s consolidated financial statements.
- AASB 17 Insurance Contracts;
- AASB 2017-4 Amendments to Australian Accounting Standards – Uncertainty over Income Tax
Treatments (AASB 1 impact only);
- AASB 2017-6 Amendments to Australian Accounting Standards – Prepayment Features with Negative
Compensation;
- AASB 2017-7 Amendments to Australian Accounting Standards - Long-term Interests in Associates and
Joint Ventures;
- AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015-2017
Cycle;
- AASB 2018-2 Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or
Settlement;
- AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business; and
- AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material.
114
Joyce Corporation Ltd Annual Report 2020
114
ANNUAL REPORT 2020JOYCE CORPORATION LTD
Annual financial REPORT
YEAR ENDED
30 JUNE 2020
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 have been
prepared in accordance with the Corporations Act 2001, including that they:
(i)
comply with Australian Accounting Standards and Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(ii) give a true and fair view of the financial position of the Consolidated Entity as at 30 June 2020 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 CEO and Group Financial Controller 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 section 295(5) of the Corporations Act
2001.
M A Gurry
Chair
Perth, 27 August 2020
Joyce Corporation Ltd Annual Report 2020
115
115
ANNUAL REPORT 2020JOYCE CORPORATION LTD
auditor’s report
YEAR ENDED
30 JUNE 2020
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 St at ion St reet
Subiaco, WA 6008
PO Box 700 West Pert h WA 6872
Aust ralia
INDEPENDENT AUDITOR'S REPORT
To t he members of Joyce Corporat ion Lt d
Report on t he Audit of t he Financial Report
Opinion
We have audit ed t he f inancial report of Joyce Corporat ion Lt d (t he Company) and it s subsidiaries (t he
Group), which comprises t he consolidated st at ement of financial posit ion as at 30 June 2020, t he
consolidat ed st at ement of profit or loss, t he consolidat ed st at ement of comprehensive income, t he
consolidat ed st at ement of changes in equity and t he consolidat ed st at ement of cash f lows for t he year
t hen ended, and not es t o t he financial report , including a summary of significant account ing policies
and t he direct ors’ declarat ion.
In our opinion t he accompanying financial report of t he Group, is in accordance wit h t he Cor porat ions
Act 2001, including:
(i)
Giving a t rue and fair view of t he Group’ s financial posit ion as at 30 June 2020 and of it s
financial performance for t he year ended on t hat date; and
(ii)
Complying wit h Aust ralian Account ing St andards and t he Cor porat ions Regulat ions 2001.
Basis for opinion
We conduct ed our audit in accordance wit h Aust ralian Audit ing St andards. Our responsibilit ies under
t hose st andards are furt her described in t he Audit or’ s responsibilit ies for t he audit of t he Financial
Report sect ion of our report . We are independent of t he Group in accordance wit h t he Corporat ions
Act 2001 and the et hical requirement s of t he Account ing Professional and Et hical St andards Board’ s
APES 110 Code of Et hics f or Prof essional Account ant s (including Independence St andards) (t he Code)
t hat are relevant t o our audit of t he financial report in Aust ralia. We have also fulfilled our ot her
et hical responsibilit ies in accordance wit h t he Code.
We confirm t hat t he independence declarat ion required by t he Corporat ions Act 2001, which has been
given to t he direct ors of t he Company, would be in the same t erms if given t o t he direct ors as at t he
t ime of t his audit or’ s report .
We believe t hat t he audit evidence we have obt ained is sufficient and appropriate t o provide a basis
for our opinion.
Key audit mat t ers
Key audit mat t ers are t hose mat t ers t hat , in our professional j udgement , were of most signif icance in
our audit of t he financial report of t he current period. These mat t ers were addressed in t he cont ext of
our audit of t he financial report as a whole, and in forming our opinion t hereon, and we do not provide
a separate opinion on t hese matt ers.
BDO Audit (WA) Pt y Lt d ABN 79 112 284 787 is a member of a nat ional associat ion of independent ent it ies which are all members of BDO Aust ralia Lt d ABN 77 050 110 275,
an Australian company limit ed by guarant ee. BDO Audit (WA) Pt y Lt d and BDO Aust ralia Ltd are members of BDO Int ernat ional Lt d, a UK company limit ed by guarant ee, and
form part of t he int ernat ional BDO network of independent member firms. Liabilit y limit ed by a scheme approved under Professional St andards Legislat ion.
116
ANNUAL REPORT 2020JOYCE CORPORATION LTD auditor’s report
YEAR ENDED
30 JUNE 2020
Adoption of AASB 16 Leases
Key audi t mat t er
How t he mat t er was addr essed i n our audi t
On 1 July 2019, the Group adopted AASB 16 Leases
Our procedures included, but were not limit ed t o, t he
(“ AASB 16” ) which replaced AASB 117 Leases (“ AASB
following:
117” ).
As disclosed in notes 2, 4 and 9 in t he financial
st at ement s, t he Group applied the retrospective met hod
on adopt ion.
We considered t he adopt ion of AASB 16 t o be a key audit
mat t er due t o t he quantum of t he balances recognised,
it s significance t o t he Group, and t he complexit ies
inherent in t he new account ing st andard, including:
·
·
·
·
Det ermining whether cont ract ual arrangement s
const itut e a lease under t he st andards;
Det ermining the appropriate discount rat e t o
be applied in the calculat ion of right -of-use
asses and lease liabilit ies;
The likelihood of exercise of any lease renewal
options; and
Det ermining whether any rental concessions
received meet the pract ical expedient
requirement s.
·
·
·
·
·
·
Assessing t he appropriateness of key
assumpt ions applied in calculat ing the right -
of-use asset s and lease liabilit y, including
discount rates applied and the expected
lease period;
Verifying t he accuracy of t he underlying
lease calculat ions by agreeing a sample of
leases t o supporting document at ion;
Assessing t he mat hemat ical accuracy of t he
AASB 16 calculat ions for each lease sampled
t hrough recalculat ion of t he expect ed right -
of-use asset and lease liability;
Assessing t he accuracy of t he related int erest
and depreciat ion expense;
Assessing t he underlying nat ure of any rent al
concessions grant ed and t he account ing
t reat ment applied; and
Assessing t he appropriateness of t he
disclosures in notes 2, 4 and 9 in the
financial st at ement s.
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ANNUAL REPORT 2020JOYCE CORPORATION LTD auditor’s report
YEAR ENDED
30 JUNE 2020
Account ing for t he disposal of subsidiary
Key audi t mat t er
How t he mat t er was addr essed i n our audi t
During t he year ended 30 June 2020, t he Group disposed
Our procedures included, but were not limit ed t o, t he
of it s int erest s in it s controlled ent ity, Lloyds Online
following:
Auct ions Pt y Lt d and it s controlled ent it ies (“ Lloyds” ).
As disclosed in notes 4 and 7 in t he financial st atement s,
t he Group complet ed t he disposal in t wo t ransact ions
(“ t ransact ions” ) and present ed t he business unit ’ s
financial performance as a discontinued operat ion.
In addit ion, under t he transact ion t erms, considerat ion is
receivable by t he Group under a deferred payment
arrangement .
We considered account ing for t he disposal of Lloyds t o be
a key audit mat ter due t o:
·
·
·
The significance of t he t otal balances disposed;
The significance of t he receivable recognised at
30 June 2020 in relat ion t o the deferred payment
arrangement ;
The det erminat ion of whet her t he t wo disposal
t ransact ions were complet ed for a common
commercial outcome and t herefore eligible for
recognition as one t ransaction under t he
requirement s of AASB 10 Consolidat ed Financial
St at ement s (“ AASB 10” ); and
·
The level of procedures undert aken t o evaluate
·
·
·
·
·
·
·
Reviewing key execut ed transact ion
document s t o understand the key t erms and
conditions of t he t ransactions;
Agreeing t he cash considerat ion received t o
respect ive bank statement s;
Evaluat ing management ’ s assessment of t he
considerat ion received for t he disposal, t he
carrying amount of t he net asset s sold,
including any non-cont rolling int erest s, and
t he gain on disposal;
Evaluat ing t he appropriateness of t he
t ransact ions t o be recognised as a single
account ing t ransact ion;
Evaluat ing t he reasonableness of t he
discontinued operat ion crit eria sat isfact ion
det ermined by management ;
Evaluat ing t he reasonableness of
management ’ s expected credit loss
assessment for the receivable recognised;
and
Assessing t he appropriateness of t he
management ’ s application of t he requirement s of
disclosures in notes 4 and 7 in t he financial
AASB 5 Non-Current Asset s Held-f or-Sale and
st at ement s.
Discont inued Operat ions (“ AASB 5” ).
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ANNUAL REPORT 2020JOYCE CORPORATION LTD auditor’s report
YEAR ENDED
30 JUNE 2020
Carrying Value of Goodwill and Other Assets
Key audit matter
How the matter was addressed in our audit
The Group is required under Australian Accounting
Our procedures included, but were not limited to the
Standard AASB 136 Impairment of Assets (“AASB 136”), to
following:
perform an annual impairment test of the carrying value
of goodwill.
Evaluating the Group’s categorisation of
CGUs and the allocation of goodwill and
For the year ended 30 June 2020, impairment charges
other assets to the carrying value of the
have been recognised by the Group.
CGUs based on our understanding of the
As set out in notes 4, 16 and 18 in the financial
Group’s businesses; and
statements, the Directors’ assessment of the
Assessing the appropriateness of the
recoverability of goodwill using the value in use (“VIU”)
disclosures in notes 4, 16 and 18 in the
methodology requires the exercise of significant
financial statements.
judgement, in particular in estimating future growth
rates, discount rates and the expected cash flows of cash
generating units (“CGUs”) to which the goodwill has been
allocated.
In addition, where management applied the fair value less
cost to sell (“FVLCS”) methodology, significant estimation
is required.
For CGUs and individual assets supported by a VIU
model, our procedures included, but were not limited
to the following:
Evaluating management’s ability to
accurately forecast cash flows by assessing
the precision of the prior year forecasts
against actual outcomes;
Comparing the Group’s forecast cash flows to
the board approved budget;
Using our valuation specialists to assess
management’s discount rates based on
external data available;
Performing sensitivity analysis on the growth
and discount rates; and
Testing the mathematical accuracy of the
impairment models.
For CGUs and individual assets supported by
valuations at a FVLCS, our procedures included, but
were not limited to the following:
Agreeing the FVLCS of particular CGUs and
business units to underlying valuations; and
Assessing the Directors’ valuations at
reporting date, as supported by external
independent valuations for reasonableness.
119
ANNUAL REPORT 2020JOYCE CORPORATION LTD
auditor’s report
YEAR ENDED
30 JUNE 2020
Ot her informat ion
The direct ors are responsible for t he ot her informat ion. The ot her informat ion comprises t he
informat ion in t he Group’ s annual report for t he year ended 30 June 2020, but does not include t he
financial report and the auditor’ s report t hereon.
Our opinion on t he financial report does not cover t he ot her informat ion and we do not express any
form of assurance conclusion t hereon.
In connect ion wit h our audit of t he financial report , our responsibilit y is t o read t he ot her informat ion
and, in doing so, consider whet her t he ot her informat ion is mat erially inconsist ent wit h the financial
report or our knowledge obt ained in t he audit or ot herwise appears t o be materially misst at ed.
If , based on t he work we have performed, we conclude t hat t here is a mat erial misst at ement of t his
ot her informat ion, we are required t o report t hat fact . We have not hing t o report in t his regard.
Responsibilities of t he direct ors for t he Financial Report
The direct ors of t he Company are responsible for t he preparat ion of t he f inancial report t hat gives a
t rue and fair view in accordance wit h Aust ralian Account ing St andards and t he Corpor at ions Act 2001
and for such int ernal cont rol as t he direct ors det ermine is necessary t o enable t he preparat ion of t he
financial report t hat gives a t rue and fair view and is free f rom mat erial misst at ement , whet her due t o
fraud or error.
In preparing t he financial report , t he direct ors are responsible f or assessing t he ability of t he group t o
cont inue as a going concern, disclosing, as applicable, mat t ers relat ed to going concern and using t he
going concern basis of account ing unless t he direct ors eit her int end t o liquidat e t he Group or t o cease
operat ions, or has no realist ic alt ernat ive but t o do so.
Audit or’ s responsibilit ies for t he audit of t he Financial Report
Our obj ect ives are t o obtain reasonable assurance about whet her t he financial report as a whole is free
from mat erial misst at ement , whet her due t o fraud or error, and t o issue an audit or’ s report t hat
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarant ee t hat an
audit conduct ed in accordance wit h t he Aust ralian Audit ing St andards will always det ect a mat erial
misst at ement when it exist s. Misst at ement s can arise f rom fraud or error and are considered mat erial
if, individually or in t he aggregat e, t hey could reasonably be expect ed t o influence t he economic
decisions of users t aken on t he basis of t his financial report .
A furt her descript ion of our responsibilit ies for t he audit of t he financial report is locat ed at the
Audit ing and Assurance St andards Board websit e (ht t p:/ / www.auasb.gov.au/ Home.aspx) at :
ht t ps:/ / www.auasb.gov.au/ admin/ file/ cont ent 102/ c3/ ar1_2020.pdf
This descript ion forms part of our audit or’ s report .
120
ANNUAL REPORT 2020JOYCE CORPORATION LTD auditor’s report
YEAR ENDED
30 JUNE 2020
Report on t he Remunerat ion Report
Opinion on t he Remunerat ion Report
We have audit ed t he Remunerat ion Report included in pages 25 t o 38 of t he direct ors’ report for t he
year ended 30 June 2020.
In our opinion, t he Remunerat ion Report of Joyce Corporat ion Lt d, for t he year ended 30 June 2020,
complies wit h sect ion 300A of t he Corporat ions Act 2001.
Responsibilities
The direct ors of t he Company are responsible for t he preparat ion and present at ion of t he
Remunerat ion Report in accordance wit h sect ion 300A of t he Corporat ions Act 2001. Our responsibilit y
is t o express an opinion on t he Remunerat ion Report , based on our audit conduct ed in accordance wit h
Aust ralian Audit ing St andards.
BDO AUDIT (WA) PTY LTD
Neil Smit h
Director
Pert h, 27 August 2020
121
ANNUAL REPORT 2020JOYCE CORPORATION LTD asx additional information
YEAR ENDED
30 JUNE 2020
ASX ADDITIONAL INFORMATION
AS AT 27 AUGUST 2020
Additional information is required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report. The information is provided below.
(a)
Distribution of shareholders
Category
As at xx August 2020
1 - 1,000
1,001 – 5,000
5,001 - 10,000
10,001 – 100,000
100,001 – and over
Rounding
Total
(b)
Substantial shareholdings
Holders
192
228
108
176
30
Fully Paid
Ordinary Shares
93,434
614,214
878,398
5,161,594
21,352,194
734
28,099,834
%
0.33
2.19
3.13
18.37
75.99
-0.01
100.00
The number of shares held or controlled at the report date by substantial shareholders were as follows:
Ordinary Shareholder
Daniel Smetana (a)
UFBA – John Roy Westwood
Total
Fully Paid
Ordinary Shares
11,171,579
2,350,000
13,521,579
%
39.76
8.36
48.12
(a) As at 27 August 2020 Daniel Smetana has a direct interest in 10,254,129 fully paid ordinary shares (2019:
10,254,129).
(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.
122
Joyce Corporation Ltd Annual Report 2020
117
ANNUAL REPORT 2020JOYCE CORPORATION LTD
asx additional information
YEAR ENDED
30 JUNE 2020
ASX ADDITIONAL INFORMATION (CONTINUED)
AS AT 27 AUGUST 2020
(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
ADAMIC PTY LTD
UFBA PTY LTD
PEDUNCLE PTY LTD
ONE MANAGED INVT FUNDS LTD <1 A/C>
TRAFALGAR PLACE NOMINEES PTY LTD
DONALD TEO
DANIEL SMETANA
STARBALL PTY LTD
VANWARD INVESTMENTS LIMITED
DANIEL ALEXANDER SMETANA
TREASURE ISLAND HIRE BOAT COMPANY PTY LTD
KEITH KNOWLES
CONARD HOLDING PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MARTEHOF PTY LTD
MAN INVESTMENTS (NSW) PTY LTD
EPIC TRUSTEES LIMITED
FELIX SMETANA
DMX CAPITAL PARTNERS LIMITED
FLINGMO PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
Total Remaining Holders Balance
Fully paid
Ordinary Shares
7,711,568
2,328,000
1,948,312
1,000,000
990,233
990,000
734,022
665,610
607,474
1.60
563,726
504,291
354,501
347,940
220,005
213,800
207,292
201,695
190,050
174,362
167,106
20,119,987
7,979,847
%
27.44
8.28
6.93
3.56
3.52
3.52
2.61
2.37
2.16
2.01
1.79
1.26
1.24
0.78
0.76
0.74
0.72
0.68
0.62
0.59
71.60
28.40
Joyce Corporation Ltd Annual Report 2020
118
123
ANNUAL REPORT 2020JOYCE CORPORATION LTD
asx additional information
YEAR ENDED
30 JUNE 2020
ASX ADDITIONAL INFORMATION (CONTINUED)
AS AT 27 AUGUST 2020
(e)
Secretary
Keith Smith
Anita Hollenberg
Group Company Secretary
Company Secretary
(f)
Registered Office
75 Howe Street
Osborne Park, WA 6017
Tel: +61 8 9445 1055
(g)
Share Registry
Computershare Investor Services Pty Limited
Level 11
172 St Georges Terrace
Perth, WA 6000
(Within Australia) 1300 850 505
(Outside Australia) +61 3 9415 4000
(h)
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, WA 6008
Tel: +61 8 6382 4600
124
Joyce Corporation Ltd Annual Report 2020
119
ANNUAL REPORT 2020JOYCE CORPORATION LTD
ABN: 80 009 116 269
Email: investors@joycecorp.com.au
Website: joycecorp.com.au
Tel: +61 8 9445 1055
75 Howe Street
Osborne Park, WA 6017 Australia