MAAS Group Holdings Limited
ABN 84 632 994 542
Financial Report - 30 June 2020
MAAS Group Holdings Limited
Corporate directory
30 June 2020
Directors
Wesley J Maas - Executive Chairman
Craig G Bellamy - Executive Director
Damien J Porter - Executive Director
Company secretary
Wesley J Maas
Registered office
Principal place of business
Auditor
Solicitors
Bankers
Unit 3, 148 Brisbane Street
Dubbo
NSW 2830
20L Sheraton Road
Dubbo
NSW 2830
BDO Audit Pty Limited
Level 10, 12 Creek Street
Brisbane
QLD 4000
Jones Day
Level 31
Riverside Centre
123 Eagle Street
Brisbane
QLD 4000
Duffy Elliot
148 Brisbane Street
Dubbo
NSW 2830
Commonwealth Bank of Australia Limited
201 Sussex Street
Sydney
NSW 2000
Westpac Banking Corporation Limited
Level 3
275 Kent Street
Sydney
NSW 2000
Website
www.maasgroup.com.au
1
MAAS Group Holdings Limited
Directors' report
30 June 2020
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the
'consolidated entity') consisting of MAAS Group Holdings Limited (referred to hereafter as the 'company' or 'legal parent entity') and the
entities it controlled at the end of, or during, the year ended 30 June 2020.
MAAS Group Holdings Limited (MGH) was incorporated on 18 April 2019 and converted to a public company on 23 August 2019. MGH
was a shell company incorporated to complete a Merger Transaction and to be the new holding company for the merged group.
The year ended 30 June 2020 represented the first full year of operations of the merged group due to the merger transaction completing
on 30 June 2019. As a result, the comparative information for the year ended 30 June 2019 does not include the trading result of all of
the entities acquired under the Merger Transaction (refer below) in the Statement of Financial Performance and Statement of Cash
Flows for that year. Background as to the Merger Transaction and the accounting treatment is contained further in (a) and (b) below.
The following Merger Transactions occurred on 30 June 2019:
(a) MGH acquired the shares of the entities listed below, referred to as the MGPL group, through the issue of shares in MGH:
- MAAS Group Pty Ltd and its controlled entities;
- MAAS Group Developments Pty Ltd;
- Regional Hardrock Pty Ltd;
- Regional Hardrock (Dubbo) Pty Ltd;
- Regional Hardrock Unit Trust; and
- Eykan Holdings Pty Ltd.
As a consequence of this transaction, the MGPL group became wholly owned subsidiaries of MGH. These entities were under the
common control of shareholders’ Wesley Maas and his spouse, Emma Maas. This is based on Wesley and Emma Maas being
regarded as controlling each of the above entities, as a result of contractual arrangements, acting collectively in making relevant
decisions as to the management of these entities. As a result of the contractual arrangements they had the collective power to
govern the financial and operating policies of the above combining entities so as to obtain benefits from their activities.
As a result of the Merger Transaction (the transaction), MAAS Group Pty Ltd (MGPL) became a 100% owned subsidiary of MGH.
The Directors determined that the transaction did not represent a business combination as defined by AASB 3 'Business
combinations' since the transaction was considered to be a combination of entities under common control, hence outside the scope
of AASB 3. As there is no specific IFRS requirements on the treatment of such transactions, an accounting policy for the
transaction was required to be determined.
The “top-hatting” of the existing group with a newly incorporated holding company (MGH) and the consolidation of the common
controlled entities are a restructure of the existing business operations and therefore it was considered that the continuation
method of accounting (book value) was most appropriate.
MAAS Group Pty Ltd (MGPL) was the holding company for the civil and hire activities prior to the Merger Transaction and has
been identified as the ‘acquirer’ for accounting purposes. Accordingly, the consolidated financial statements have been prepared
as a continuation of the consolidated financials of MGPL and its controlled entities. The statement of profit or loss and other
comprehensive income and the statement of cash flows for the year ended 30 June 2019 represents the results of MGPL and its
controlled entities for the period from 1 July 2018 to 30 June 2019.
(b) MGH entered into agreements with the vendors of the entities listed below, and acquired all of the outstanding issued capital in the
following entities:
- MAAS Homes Pty Ltd (formerly Nigel Bourke Construction Pty Ltd);
- Machinery Sales Pty Ltd (formerly Rookharp Pty Ltd);
- Large Industries Pty Ltd;
- EMS Plant & Equipment Pty Ltd;
- EMS Group Pty Ltd and its controlled entities;
- EMS International Pty Ltd; and
- Regional Crushing and Screening Pty Ltd.
All entities listed in (b) above, joined the consolidated entity on 30 June 2019 with the exception of Regional Crushing and
Screening Pty Ltd which was already part of the MGPL group (a controlled entity of MAAS Group Pty Ltd) as described in (a)
above. MGPL owned 51% of Regional Crushing and Screening Pty Ltd. The remaining 49% shareholding was acquired by the
transaction referred to in (b) above.
The other entities party to the Merger Transaction (not under common control) listed in (b) above, except for Regional Crushing
and Screening Pty Ltd, are accounted for under AASB 3 as a business combination where applicable. As the merger transaction
occurred on 30 June 2019, their results are not included in the statement of profit or loss and other comprehensive income and
statement of cash flows for the year ended 30 June 2019. The statement of financial position as at 30 June 2019 represents that of
MGPL and its controlled entities and all the other entities party to the Merger Transaction as at that date.
The Merger Transaction was undertaken so as to facilitate the proposed listing of MGH on the Australian Securities Exchange.
2
MAAS Group Holdings Limited
Directors' report
30 June 2020
Directors
The following persons were directors of MAAS Group Holdings Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Wesley J Maas
Craig G Bellamy (appointed 22 August 2019)
Damien J Porter (appointed 22 August 2019)
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
●
●
●
●
●
●
●
Construction - civil infrastructure
Construction - residential
Electrical service
Labour hire and repairs
Sale of goods - plant, equipment, parts, road-base and aggregates
Land development and resale
Equipment and machinery hire
Dividends
Dividends paid during the financial year were as follows:
Dividends paid to the shareholders of MAAS Group Pty Ltd
Dividends paid to the shareholders of Eykan Holdings Pty Ltd
Dividends paid to the shareholders of Regional Crushing & Screening Pty Ltd
Consolidated
2020
$
2019
$
-
-
-
-
6,145,000
367,000
271,460
6,783,460
The 30 June 2019 dividend payments occurred prior to the Merger Transaction.
Review of operations and financial position
The profit for the consolidated entity after providing for income tax and non-controlling interest amounted to $20,693,573 (30 June 2019:
$9,220,253).
MGH has enjoyed its first year of operations as a merged entity. After completing the Merger Transactions as described above, MGH’s
focus was on the successful integration of these businesses and continued growth. MGH acquired other businesses and assets during
the year ended 30 June 2020 in the Tunnelling and Underground Services, Construction Materials and Real Estate Segments.
The consolidated entity’s underlying statutory EBITDA for the year amounted to $52,817,492 (2019: $14,436,108).
Profit before income tax expense
Depreciation and amortisation
Interest revenue
Finance costs
Gain on contingent and deferred consideration
Gain from bargain purchase in a business combination
Legal fees in connection with the proposed IPO
Legal fees relating to business combinations
Consulting expenses in connection with the proposed IPO
Stamp duty expensed on acquisitions
Underlying Statutory EBITDA
3
Consolidated
2020
$
2019
$
29,941,060
13,711,770
(113,394)
8,852,492
(1,040,524)
(1,194,898)
243,045
562,998
1,067,409
787,534
12,676,128
3,512,165
(1,439,934)
1,269,405
-
(1,581,656)
-
-
-
-
52,817,492
14,436,108
MAAS Group Holdings Limited
Directors' report
30 June 2020
Underlying Statutory EBITDA excludes the effects of significant items of income and expenditure which may have an impact on the
quality of earnings because of isolated or non-recurring events. It also excludes bargain purchases from business combinations. Interest
income and finance costs have been allocated to segments, however going forward this type of activity will be driven by a central
treasury function and will therefore not be allocated to segments. Refer to segment note 4 to the financial statements for further details of
the consolidated entity’s results which have been broken down to 5 segments: (1) Real Estate; (2) Civil and Construction; (3) Tunnelling
and Underground Services; (4) Construction Materials; and (5) Other.
The operations of the consolidated entity comprised equipment and machinery hire, civil construction, quarry operations and real estate
sales for the entire year. The consolidated entity continued to invest across all operating segments of the business during the financial
year either via business combination, asset acquisition or upgrade of existing plant and equipment.
The consolidated entity’s operations were impacted by the effects of the global pandemic COVID-19. The impacts arose due to initial
domestic and global government health responses which changed workplace practices, impacted global supply chains and caused a
decrease in consumer confidence. Although being exposed, like all businesses, to some initial impact, the impact of COVID-19 for the
consolidated entity has not caused any long standing operational issues for the entity as business has returned to normal. A list of initial
impacts included:
●
Changed workplace practices to ensure operations were COVID-19 compliant initially impacted productivity on some sites.
Productivity returned to normal levels as the new work practices became standard.
Initial slow down in residential property sales due to government enforced health measures including lockdown. Demand returned
to greater than pre COVID-19 levels.
Reduced real estate development during the initial COVID-19 period to reflect market conditions.
Initial delays in land registration process due to change in work practices from government agencies.
Initial delays in global supply chains for products sourced from Italy and China which caused some production delays for
manufacture of underground machinery in Vietnam.
Cross border travel restrictions.
●
●
●
●
●
Whilst there has been no material adverse impact on the financial performance of the consolidated entity from COVID-19, there is a risk
that any future economic downturn could impact the consolidated entity’s products and services offered, customers, supply chain,
staffing and geographical regions in which the group operates. Accordingly judgement has been exercised in considering the impacts
COVID-19 has had, or may have on the assets of the consolidated entity, in particular the inputs included in the value-in-use calculations
supporting recoverability of goodwill and non-current assets.
As a result of business combinations and asset acquisitions, $69,248,969 of net assets were acquired which contributed to the 27.5%
increase in the consolidated entity’s net assets from the prior year. Refer to note 40 to the financial statements for further details of the
business combinations that occurred during the year.
The acquired businesses contributed revenues of $25,703,788 and net profit of $3,247,612 to the consolidated entity from the dates of
their respective acquisitions to 30 June 2020.
Significant changes in the state of affairs
Significant changes in the state of affairs of the consolidated entity during the financial year were as follows.
The company issued convertible notes for $20 million during the year (see note 22). The net cash received from the issue of the
convertible notes was used principally to acquire Jacon and Bitizay (see note 40), for working capital and for costs associated with the
company's proposed IPO.
In July 2019, the new underground equipment manufacturing facility of VMS was opened in Vietnam.
On 7 August 2019, MAAS Group Pty Ltd (MGPL) acquired 100% of the ordinary shares in Millers Metals Forbes Pty Ltd and the
business assets of Millers Metals from Manso Holdings Pty Ltd, and acquired the land associated in West Wyalong and Forbes through
its wholly owned subsidiaries Regional Hardrock (West Wyalong) Pty Ltd and Regional Hardrock (Forbes) Pty Ltd respectively
(collectively referred to as "Millers Metals") for a total consideration of $33,510,772 (refer note 40).
The company became an unlisted public company on 22 August 2019, having previously been a proprietary company.
On 30 August 2019, MAAS Group Developments Pty Ltd (MGD) executed and completed a share purchase agreement with Rutherford
Holdings Pty Ltd (Rutherford) to acquire 100% of the shares in Bizitay Pty Ltd (Bizitay) for the total consideration of $11,723,181 (refer
note 40).
On 4 September 2019, EMS Group Pty Ltd, EMS International Pty Ltd and VMS Engineering Company Ltd acquired the business
operations of Jacon (with the exception of the operations in India for a total consideration of $11,138,560 (refer note 40).
On 20 December 2019, Regional Sands (Dubbo) Pty Ltd acquired the business known as Dubbo Sands for a cash consideration of
$6,906,467 (refer note 40).
4
MAAS Group Holdings Limited
Directors' report
30 June 2020
In May 2020 the company negotiated a new Corporate Finance Facility of $125m for its Australian operations under a common terms
deed arrangement (refer note 22).
On 5 June 2020 Regional Group Australia Pty Limited completed a share purchase agreement to acquire 100% of the shares in
Regional Group Resources Pty Limited (formerly known as See resources Pty Ltd) and the purchase of plant & equipment and inventory
from See Group Holdings Pty Ltd for a cash consideration of $4,775,091 (refer note 40).
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
On 6 October 2020, MAAS Group Holdings Limited (MGH) entered into a share purchase agreement for the acquisition of a business
which operates in the Construction Materials segment. The acquisition of the business is subject to MGH completing an initial public
offering by no later than 31 December 2020. Should the acquisition proceed, the purchase price of $8,977,931 will be settled by the
issue of shares in MGH with a total value of $2,693,373 and a cash payment of $6,284,558.
On 3 June 2020, Regional Hardrock Gilgandra Unit Trust entered into a contract to purchase the land and stock on hand of the Berakee
Quarry for a total consideration of $4,400,000 consisting of a cash settlement of $1,650,000 and vendor financing of $2,750,000 over a
period of 24 months. The contract settled on 17 August 2020 (refer to Commitments note 35).
On 25 August 2020, MGH entered into and completed a share purchase agreement for the shares in MAAS Group Properties Fairydale
Pty Limited. This company will operate in the real estate segment. Total consideration paid was $100. The company then acquired a
future 43 lot land subdivision at Mudgee for total consideration of $1,632,558.
Subsequent to the reporting date, MGH entered into an option agreement to purchase land for its real estate segment. The option is
required to be exercised if the development application over the land is approved. Upon this occurring MGH is required to pay
$3,200,000 for this land.
No other matter or circumstance has arisen since 30 June 2020 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 in future financial years.
Likely developments and expected results of operations
Likely developments in the operations of the consolidated entity that were not finalised at the date of this report included:
●
A proposed listing of MAAS Group Holdings Limited on the Australian Securities Exchange (ASX). The company is expected to
finalise its prospectus in the second half of calendar year 2020 in order to facilitate a listing on the ASX.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law other than
the following:
●
●
●
●
●
●
●
●
●
●
●
●
Biodiversity Conservation Regulation 2017
Biodiversity Conservation (Savings and Transitional) Regulation 2017
Environmental Planning and Assessment Regulation 2000
Local Government (General) Regulation 2005
Mining Regulation 2016
Natural Resources Access Regulator Regulation 2018
National Parks and Wildlife Regulation 2019
Protection of the Environment Operations (Clean Air) Regulation 2010
Protection of the Environment Operations (General) Regulation 2009
Protection of the Environment Operations (Noise Control) Regulation 2017
Protection of the Environment Operations (Waste) Regulation 2014
Roads Regulation 2018
The consolidated entity has conducted its operations in accordance with the legislation listed above and has not breached nor been
subject to any penalty by the relevant authority.
5
MAAS Group Holdings Limited
Directors' report
30 June 2020
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Wesley J Maas
Executive Chairman
None
Wes was 23 when he launched the business which started out with one Bobcat and a tipper
truck. A little over 15 years later, he has grown the business to incorporate a highly successful
plant hire operation of 300+ equipment, bulk earthworks, civil construction, quarry business and
also a crushing and screening contract hire, along with a residential and commercial property
division.
None
None
Chairman and Chief Executive Officer
160,633,241
Craig G Bellamy
Executive Director (appointed 22 August 2019)
Bachelor of Business (Accountancy), C.A
Craig joined MAAS Group in May 2019 as Chief Financial Officer and is responsible for all
financial aspects of the Group including accounting, treasury, budgeting and tax. Craig has
over 25 years’ experience and has previously held executive roles including Chief Executive
Officer and Chief Financial Officer for ASX Listed entities Devine Limited and Unity Pacific
Group Limited (formerly Trinity Group Limited).
None
None
Chief Financial Officer
None
Damien J Porter
Executive Director (appointed 22 August 2019)
None
With 20 years of experience in hire, operations and sales, Damien has a comprehensive
knowledge of the equipment and machinery industry. Damien spent a number of years working
for a major equipment hire company. Damien has been with MAAS since 2005 and oversees
upwards of 100 employees and items of machinery at any given time.
None
None
General Manager - Plant
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of
entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Wesley J Maas has held the position of company secretary from the date of incorporation. Wesley is the majority shareholder and
Executive Chairman of MAAS Group Holdings Limited.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2020, and the number of
meetings attended by each director were:
Wesley J Maas
Craig G Bellamy
Damien J Porter
Held: represents the number of meetings held during the time the director held office.
6
Full Board
Attended
Held
4
4
4
4
4
4
MAAS Group Holdings Limited
Directors' report
30 June 2020
Remuneration report
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of
the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate
for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value
for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors ('the
Board') ensures that executive reward satisfies the following key criteria for good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should seek to
enhance 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 or
increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
Non-executive directors remuneration
The company did not have any non-executive directors during the financial year ended 30 June 2020.
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has two components:
●
●
base pay and non-monetary benefits
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Executive
Chairman based on individual and business unit performance, the overall performance of the consolidated entity and comparable market
remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it
does not create any additional costs to the consolidated entity and provides additional value to the executive.
Use of remuneration consultants
The consolidated entity did not engage remuneration consultants during the year ended 30 June 2020.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
7
MAAS Group Holdings Limited
Directors' report
30 June 2020
The key management personnel of the consolidated entity consisted of the following directors of MAAS Group Holdings Limited:
● Wesley J Maas
●
●
Craig G Bellamy (appointed 22 August 2019)
Damien J Porter (appointed 22 August 2019)
2020
Executive Directors:
Wesley J Maas
Craig G Bellamy
Damien J Porter
Short-term benefits
Post-
employment
benefits
Cash salary
and fees
$
Annual leave
accrual
$
Non-
monetary
$
Super-
annuation
$
Total
$
90,000
255,143
152,713
497,856
-
10,108
6,065
16,173
31,334
-
8,415
39,749
8,550
24,115
14,469
47,134
129,884
289,366
181,662
600,912
2019
Wesley J Maas was the sole Director during the period from incorporation to 30 June 2019. Other than Wesley J Maas there were no
other key management personnel of the consolidated entity during this period. Wesley J Maas did not receive any remuneration during
the financial period to 30 June 2019.
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these
agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Wesley J Maas
Chief Executive Officer
Not applicable
Not applicable
Wes is the founder, major shareholder and Managing Director of MGH. There was no
employment agreement for Wes for the year ended 30 June 2020. Remuneration paid to Wes
during the period was approved by the Board. Wes entered into an employment agreement
with MGH in September 2020. Under the terms of his executive contract, Wes will be entitled
to a base salary of $360,000 plus superannuation and other non-monetary benefits. The term
of the contract is open-ended and requires Wes to provide 12 months notice in the event of
resignation. The company is required to provide Wes 6 months notice in the event of
termination.
Craig G Bellamy
Chief Financial Officer
May 2019
Initial term – 7 months
Craig is Chief Financial Officer of MGH. Craig was initially employed for a period of 7 months to
assist MGH in its preparation for an Initial Public Offering. Craig’s employment beyond this
period has been extended via mutual agreement and the extension was not governed by any
written agreement for the year, beyond the original agreement. Under the terms of his
agreement, Craig is paid a base salary of $300,000 per annum plus superannuation. Notice
periods between the parties are by mutual agreement.
Damien J Porter
General Manager - Plant Hire
1 July 2019
Open ended with no fixed term
Damien is the General Manager - Plant Hire for MGH. Damien’s employment contract
commenced on 1 July 2019 and is paid a base salary of $180,000 per annum plus
superannuation. Under the terms of his executive contract, Damien is to provide 12 months
notice in the event of resignation, with the company required to provide 6 months notice in the
event of termination.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
8
MAAS Group Holdings Limited
Directors' report
30 June 2020
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June
2020.
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of compensation that were
outstanding as at 30 June 2020.
There were no options over ordinary shares granted to or vested by directors and other key management personnel as part of
compensation during the year ended 30 June 2020.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management personnel
of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Wesley J Maas
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
other
Balance at
the end of
the year
160,633,241
160,633,241
-
-
-
-
-
-
160,633,241
160,633,241
Other transactions with key management personnel
Wesley Maas is a director of Property Maintenance Australia Pty Ltd (PMA). MGH engaged PMA to provide property consulting services
during the 2020 financial year. The contract was based on normal commercial terms and conditions.
MAAS Group Pty Ltd (a subsidiary of MGH) leased premises from Emma Maas, the wife of Wesley Maas, on a short-term and ad-hoc
basis. The rental charged was based on market rates.
MAAS Administration Pty Ltd (a subsidiary of MGH) leased premises from Damien Porter on a short-term and ad-hoc basis. The rental
charged was based on market rates.
Aggregate amounts of each of the above types of other transactions with key management personnel of MAAS Group Holdings Limited:
Amounts recognised as expense
Rent
Consulting fee
There were no other transactions with key management personnel.
2020
$
2019
$
19,100
270,000
289,100
-
-
-
9
MAAS Group Holdings Limited
Directors' report
30 June 2020
Loans to/from key management personnel
Details of loans provided by or made to directors of MAAS Group Holdings Limited and other key management personnel of the
consolidated entity, including their close family members and entities related to them, are set out below.
(a) Related party loan liabilities
Related party
entity
KMP related to
Choice
Investments
Dubbo Pty Ltd
Old Man
Investments Pty
Ltd
Wesley J Maas
Damien Porter
(b) Related party loan receivables
Loan balance
at date of
appointment
as a Director
$
Loans
receivable
offset against
loans
payable
$
Balance at
beginning of
the year
$
Transfer to
shareholder
loans
$
Purchase of
motor vehicle
$
Net loan
payment
$
Balance at
end of the
year
$
38,331,031
-
(9,622,201)
(4,000,000)
(56,516)
(630,784)
24,021,530
-
254,000
-
-
-
(97)
253,903
38,331,031
254,000
(9,622,201)
(4,000,000)
(56,516)
(630,881)
24,275,433
Related party entity
KMP related to
Regional Hardrock Forbes Unit Trust*
Regional Hardrock West Wyalong*
Wesley J Maas
Wesley J Maas
Balance at
beginning of
the year
$
Net loan
payment
$
Balance at end
of the year
$
15,990
34,470
(15,990)
(34,470)
50,460
(50,460)
-
-
-
*These entities were incorporated for the acquisition of the Forbes and West Wyalong quarries and were acquired by the consolidated
entity prior to settlement of the quarry acquisition.
All of the above loans were unsecured and non interest bearing. The loan to Choice Investments Dubbo Pty Ltd has been subordinated
in favour of bank debt. The loan to Old Man Investments Pty Ltd is repayable on demand.
This concludes the remuneration report.
Shares under option
There were no unissued ordinary shares of MAAS Group Holdings Limited under option outstanding at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of MAAS Group Holdings Limited issued on the exercise of options during the year ended 30 June 2020
and up to the date of this report.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any
related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any
related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the
company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined
in note 36 to the financial statements.
10
MAAS Group Holdings Limited
Auditor's independence declaration
30 June 2020
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY K L COLYER TO THE DIRECTORS OF MAAS GROUP HOLDINGS
LIMITED
As lead auditor of MAAS Group Holdings Limited for the year ended 30 June 2020, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of MAAS Group Holdings Limited and the entities it controlled during the
period.
K L Colyer
Director
BDO Audit Pty Ltd
Brisbane, 9 October 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
12
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050
110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited
MAAS Group Holdings Limited
Contents
30 June 2020
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of MAAS Group Holdings Limited
14
15
17
18
19
75
76
13
MAAS Group Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Other income
Interest revenue
Gain from bargain purchase in a business combination
Net fair value gain on investment properties
Expenses
Changes in inventories, including purchases of raw materials and consumables used
Bad debts
Employee benefits expense
Depreciation and amortisation expense
Stamp duty
Legal, audit, accounting and consultants
Motor vehicle expenses
Insurance and registration
Repairs and maintenance
Rent - short-term and low-value leases
Travel and accommodation
Other expenses
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Non-controlling interest
Owners of MAAS Group Holdings Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of MAAS Group Holdings Limited
Consolidated
Note
2020
$
2019
$
5
6
40
16
12
7
8
193,440,063
39,075,545
4,096,036
113,394
1,194,898
7,125,882
1,037,066
1,439,934
1,581,656
-
(85,929,078)
(432,988)
(40,389,490)
(13,711,770)
(787,534)
(5,180,134)
(5,550,641)
(2,154,782)
(5,898,524)
(313,397)
(1,451,716)
(5,376,667)
(8,852,492)
(8,259,129)
(30,086)
(8,857,432)
(3,512,165)
-
(881,072)
(2,864,790)
(523,525)
(3,142,053)
-
(371,694)
(746,722)
(1,269,405)
29,941,060
12,676,128
(8,998,586)
(3,455,875)
20,942,474
9,220,253
341,344
341,344
-
-
21,283,818
9,220,253
248,901
20,693,573
-
9,220,253
20,942,474
9,220,253
-
21,283,818
-
9,220,253
21,283,818
9,220,253
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes
14
MAAS Group Holdings Limited
Consolidated statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Financial assets at fair value through profit or loss
Non-current assets classified as held for sale
Other
Total current assets
Non-current assets
Trade and other receivables
Inventories
Investment properties
Property, plant and equipment
Intangibles
Deferred tax asset
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax
Employee benefits
Provisions
Other
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Deferred tax liability
Other
Total non-current liabilities
Total liabilities
Net assets
Consolidated
Note
2020
$
2019
$
9
10
11
12
13
14
15
10
12
16
17
18
19
15
20
21
22
23
25
26
27
22
23
24
28
27
12,453,302
27,352,806
11,421,354
54,000,152
-
6,963,615
2,641,481
114,832,710
3,368,099
22,711,806
3,055,685
32,326,408
93,086
-
3,325,811
64,880,895
-
21,785,561
14,416,086
168,220,572
40,314,489
2,458,576
139,749
247,335,033
12,423,457
27,750,033
2,010,010
99,659,225
34,833,371
775,546
68,161
177,519,803
362,167,743
242,400,698
27,240,980
7,103,044
30,302,892
41,597,571
2,529,790
2,362,115
811,696
333,333
112,281,421
111,553,914
22,971,403
1,843,174
14,088,605
666,667
151,123,763
17,746,670
2,848,426
67,974,973
28,087,063
4,933,935
995,072
1,640,182
-
124,226,321
13,712,494
16,448,277
-
10,534,865
-
40,695,636
263,405,184
164,921,957
98,762,559
77,478,741
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
15
MAAS Group Holdings Limited
Consolidated statement of financial position
As at 30 June 2020
Equity
Issued capital
Reserves
Retained profits
Equity attributable to the owners of MAAS Group Holdings Limited
Non-controlling interest
Total equity
Consolidated
Note
2020
$
2019
$
29
30
153,643,287
(108,658,802)
51,326,145
96,310,630
2,451,929
153,643,287
(109,000,146)
30,632,572
75,275,713
2,203,028
98,762,559
77,478,741
Refer to note 40, Business combinations and asset acquisitions, for details of the restatement of the comparative period for finalisation of
provisional accounting for a business combination.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
16
MAAS Group Holdings Limited
Consolidated statement of changes in equity
For the year ended 30 June 2020
Consolidated
Balance at 1 July 2018
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs (note
29)
Acquisition of subsidiaries
Reserve arising from business combinations under
common control
Dividends paid (note 31)
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interests
$
28,195,779
9,220,253
-
9,220,253
1,593
-
-
-
153,641,694
-
-
-
-
-
-
-
Total equity
$
-
-
-
-
28,197,372
9,220,253
-
9,220,253
-
-
-
2,203,028
153,641,694
2,203,028
-
-
(109,000,146)
-
-
(6,783,460)
-
-
(109,000,146)
(6,783,460)
Balance at 30 June 2019
153,643,287
(109,000,146)
30,632,572
2,203,028
77,478,741
Consolidated
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interests
$
Total equity
$
Balance at 1 July 2019
153,643,287
(109,000,146)
30,632,572
2,203,028
77,478,741
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
341,344
20,693,573
-
248,901
-
20,942,474
341,344
341,344
20,693,573
248,901
21,283,818
Balance at 30 June 2020
153,643,287
(108,658,802)
51,326,145
2,451,929
98,762,559
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
17
MAAS Group Holdings Limited
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers (inclusive of GST)
Dividends received
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from/(used in) operating activities
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments of contingent consideration
Payments for financial assets at fair value through profit or loss
Payments for investment property
Payments for property, plant and equipment
Payments for intangibles
Payments for deposits
Related party loans - net
Proceeds from disposal of financial assets at fair value through profit or loss
Proceeds from disposal of investment property
Proceeds from disposal of property, plant and equipment
Consolidated
Note
2020
$
2019
$
43
40
208,466,614
(166,851,955)
44,409,815
(50,591,101)
41,614,659
969
35,047
(5,321,027)
(8,953,494)
(6,181,286)
818,190
1,439,850
(1,265,274)
(4,015,241)
27,376,154
(9,203,761)
(29,777,796)
(558,466)
-
(11,383,113)
(15,550,613)
(3,424,045)
(365,564)
2,829,142
334,666
139,304
16,352,192
(968,325)
-
(1,221,709)
(2,010,010)
(59,198)
-
(2,097,236)
1,183,777
25,201,066
-
1,621,246
Net cash from/(used in) investing activities
(41,404,293)
21,649,611
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from/(payments of) borrowings and lease liabilities
Dividends paid
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
29
43
-
23,544,058
-
10
(9,528,065)
(638,460)
23,544,058
(10,166,515)
9,515,919
2,937,383
2,279,335
658,048
Cash and cash equivalents at the end of the financial year
9
12,453,302
2,937,383
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
18
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 1. General information
The financial statements cover MAAS Group Holdings Limited as a consolidated entity consisting of MAAS Group Holdings Limited and
the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is MAAS
Group Holdings Limited's functional and presentation currency.
MAAS Group Holding Limited (formerly MAAS Group Holdings Pty Ltd) was incorporated as a proprietary company on 18 April 2019 and
was converted to a public company limited by shares on 23 August 2019.
MAAS Group Holdings Limited is an unlisted public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business are:
Registered office
Unit 3, 148 Brisbane Street
Dubbo
NSW 2830
Principal place of business
20L Sheraton Road
Dubbo
NSW 2830
A description of the nature of the consolidated entity's operations and its principal activities are included in note 4 - Operating Segments.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 9 October 2020. The directors have
the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-
profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board ('IASB').
Comparatives
As part of the Merger Transaction on 30 June 2019, MAAS Group Holding Limited (MGH) acquired the shares of the following entities
under common control of shareholders’ Wesley Maas and his spouse, Emma Maas, through the issue of shares in MGH:
- MAAS Group Pty Ltd (MGPL) and its controlled entities;
- MAAS Group Developments Pty Ltd;
- Regional Hardrock Pty Ltd;
- Regional Hardrock (Dubbo) Pty Ltd;
- Regional Hardrock Unit Trust; and
- Eykan Holdings Pty Ltd.
(referred to as the “MGPL group”)
As a result of the Merger Transaction, MGPL became a 100% owned subsidiary of MGH. The above transaction did not represent a
business combination as defined by AASB 3 Business combinations since the transaction was considered to be a combination of entities
under common control, and therefore the continuation method of accounting (book value) was adopted.
MGPL was the holding company for the civil and hire activities prior to the Merger Transaction and was identified as the ‘acquirer’ for
accounting purposes. Accordingly, the consolidated financial statements were prepared as a continuation of the consolidation of the
common controlled entities listed above. The statement of profit or loss and other comprehensive income and the statement of cash
flows for the year ended 30 June 2019 represents the results of the MGPL group for the period from 1 July 2018 to 30 June 2019.
The other entities party to the Merger Transaction (not under common control) were accounted for under AASB 3 as a business
combination where applicable. As the merger transaction occurred on 30 June 2019, their results were not included in the statement of
profit or loss and other comprehensive income and statement of cash flows for the year ended 30 June 2019. The statement of financial
position as at 30 June 2019 represents that of MGPL group and all the other entities party to the Merger Transaction as at that date.
Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the
current financial year.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the consolidated entity for the annual reporting period ended 30 June 2020:
19
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Amendments to AASB 3 - Definition of a Business (effective 1 January 2020)
The AASB has issued amendments to the guidance in AASB 3 Business Combinations that revises the definition of a business.
Amendments to AASB 101 and AASB 108 - Definition of Material AASB 101 Presentation of Financial Statements and AASB 108
Accounting Policies, Changes in Accounting Estimates and Errors (effective 1 January 2020)
The AASB has made amendments to AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in
Accounting Estimates and Errors and consequential amendments to other Australian Accounting Standards (AAS) which:
i) use a consistent definition of materiality throughout AAS and the Conceptual Framework for Financial Reporting;
ii) clarify when information is material; and
iii) incorporate some of the guidance in AASB 101 about immaterial information.
Amendments to AASB 1054 - Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia (effective 1 January 2020)
The AASB has made amendments to AASB 1054 Australian Additional Disclosures which clarify that entities that intend to comply with
IFRS Standards will need to disclose the potential effect of new IFRS Standards that have not yet been issued by the AASB as
Australian Accounting Standards.
Amendments to AASB 101- Classification of Liabilities as Current or Non-current (effective 1 January 2022)
The AASB issued a narrow-scope amendment to AASB 101 Presentation of Financial Statements to clarify that liabilities are classified
as either current or non-current, depending on the rights that exist at the end of the reporting period.
These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable
future transactions.
Historical cost convention
The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the
measurement at fair value of financial assets at fair value through profit or loss, investment properties and derivatives at fair value.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 39.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MAAS Group Holdings Limited
('company' or 'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. MAAS Group Holdings
Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the
consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries in a business combination is accounted for using the acquisition method of accounting - refer note 40. A
change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred by
the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises
the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
20
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars ($), which is MAAS Group Holdings Limited’s functional and
presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. They are deferred in
equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment
in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss and other comprehensive
income, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss and other
comprehensive income on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the
fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain
or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or
loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as
equities classified as at fair value through other comprehensive income are recognised in other comprehensive income.
Group companies
The results and financial position of foreign operations that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
●
●
assets and liabilities are translated at the closing rate at the reporting date
income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the transactions), and
all resulting exchange differences are recognised in other comprehensive income.
●
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other
financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign
operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to
profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax
rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax
losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of
the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
●
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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be
recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable
profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable
entity or different taxable entities which intend to settle simultaneously.
21
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
MAAS Group Holdings Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their
own current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in
determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the
deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.
The group has not yet entered into a tax funding and tax sharing agreement. Currently wholly owned entities fully compensate the head
entity for any current tax payable assumed and are compensated by the head entity for any current tax receivable and deferred tax
assets relating to unused tax losses or unused tax credits that are transferred to the head entity under the tax consolidation legislation.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their
fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item being hedged.
Derivatives are classified as current or non-current depending on the expected period of realisation.
Financial instruments
Investments and other financial assets
Classification
The consolidated entity classifies its financial assets in the following measurement categories:
●
those to be measured subsequently at fair value (either through other comprehensive income ("OCI"), or through profit or loss),
and
those to be measured at amortised cost.
●
The classification depends on the consolidated entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For
investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity
instruments that are not held for trading, this will depend on whether the consolidated entity has made an irrevocable election at the time
of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). The consolidated
entity reclassifies debt investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, the consolidated entity measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely
payment of principal and interest. Measurement of cash and cash equivalents and trade and other receivables are measured at
amortised cost.
22
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Debt instruments
Subsequent measurement of debt instruments depends on the consolidated entity's business model for managing the asset and the
cash flow characteristics of the asset. There are three measurement categories into which the consolidated entity classifies its debt
instruments:
●
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses), together with foreign exchange gains and losses. Impairment losses are presented as a separate
line item in the statement of profit or loss and other comprehensive income.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken
through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses
which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised
in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets
is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other
gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss and other
comprehensive income.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in
which it arises.
●
●
Equity instruments
The consolidated entity subsequently measures all equity investments at fair value. The consolidated entity measures its investments in
equity instruments at FVPL. Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement
of profit or loss and other comprehensive income as applicable.
Impairment
The consolidated entity assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at
amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit
risk. For trade receivables and contract assets, the consolidated entity applies the simplified approach permitted by AASB 9, which
requires expected lifetime losses to be recognised from initial recognition of the trade receivables and contract assets.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss
allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is
possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss
recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the
instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other
comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's
carrying value with a corresponding expense through profit or loss.
Impairment of non-financial assets
At the end of each reporting period, the consolidated entity assesses whether there is any indication that an asset may be impaired. If
such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the
higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying
amount over its recoverable amount is recognised immediately in profit or loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated entity estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Finance costs
Finance costs are recognised as expenses in the period in which they are incurred, except where they are included in the costs of
qualifying assets. The capitalisation rate used to determine the amount of finance costs to be capitalised to qualifying assets is the
weighted average interest rate applicable to the entity’s borrowings during the period.
Finance costs include interest on bank overdrafts and short-term and long-term borrowings, amortisation of discounts or premiums
relating to borrowings, amortisation of ancillary costs incurred in connection with the arrangement of borrowings, finance lease charges
and certain exchange differences arising from foreign currency borrowings.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
23
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
24
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
(refer to the respective notes) within the next financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (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 the Coronavirus (COVID-19) pandemic.
Allowance for expected credit losses
The allowance for expected credit losses assessment for trade receivables and contract assets requires a degree of estimation and
judgement. It 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-10 pandemic and forward-looking information that is available.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some
other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or
technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
and other indefinite life intangible assets have suffered any impairment. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates
based on the current cost of capital and growth rates of the estimated future cash flows. Refer to note 18 for further information.
Investment properties
Investment properties are revalued annually by independent professional valuers. The critical inputs underlying the estimated fair value
of investment properties are contained in note 33. Any change in these inputs may impact the fair value of the investment properties.
The fair value assessment of the investment properties includes the best estimate of the impacts of the COVID-19 pandemic using
information available at the reporting date.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-
use calculations, which incorporate a number of key estimates and assumptions including the best estimate of the impacts of the
COVDI-19 pandemic using information available at the reporting date.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future
lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the
consolidated entity estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the
right-of-use asset, with similar terms, security and economic environment.
Derivative instruments - conversion feature of convertible notes
The fair value of the conversion feature of the convertible notes is estimated using present value techniques, by discounting the
probability-weighted estimated future cash outflows. The critical inputs underlying the estimated fair value of the conversion feature of
the convertible notes is contained in note 33. Any change in these inputs may impact the fair value of the derivative.
Business Combinations
(i) Fair value of consideration - merger transaction
The fair value consideration of the merger transaction has been assessed based upon a valuation of the merged entity as at 30 June
2019 using the capitalisation of future maintainable earnings. The valuation is based on an equity value that accrues to equity
holders. These calculations require the use of assumptions including future maintainable earnings, earnings multiples and premiums or
discounts that are applicable to the corporate structure of the consolidated entity as at 30 June 2019.
25
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
(ii) Deferred consideration
The deferred consideration liability is the difference between the total purchase consideration, usually on an acquisition of a business
combination, and the amounts paid or settled up to the reporting date, discounted to net present value. The consolidated entity applies
provisional accounting for any business combination. Any reassessment of the liability during the earlier of the finalisation of the
provisional accounting or 12 months from acquisition-date is adjusted for retrospectively as part of the provisional accounting rules in
accordance with AASB 3 Business Combinations. Thereafter, at each reporting date, the deferred consideration liability is reassessed
against revised estimates and any increase or decrease in the net present value of the liability will result in a corresponding gain or loss
to profit or loss. The increase in the liability resulting from the passage of time is recognised as a finance cost.
(iii) Fair value of net assets acquired
Business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent
liabilities assumed are initially estimated by the consolidated entity taking into consideration all available information at the reporting
date. Fair value adjustments on the finalisation of the business combination accounting is retrospective, where applicable, to the period
the combination occurred and may have an impact on the assets and liabilities, depreciation and amortisation reported.
Note 4. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into 4 operating segments: Real Estate; Civil and Construction; Tunnelling and Underground
Services and Construction Materials:
Segment
Description of segment
1. Real Estate
- Residential Development: develops, builds and sells residential housing estates
- Commercial Development and Investment: delivers commercial property and industrial
developments, and investing in commercial real estate
2. Civil and Construction
- Civil Construction: civil infrastructure construction, roads, dams and mining infrastructure
- Plant Hire and Sales: above ground plant hire for major infrastructure projects
- Electrical Services: electrical infrastructure, communications and specialised services
3. Tunnelling and Underground
Services
- Underground Equipment Manufacturing and Sales: supplies mobile equipment for civil tunnelling and
underground hard rock mining
- Underground Equipment Hire and Repair: hires, maintains, rebuilds and sells second-hand mobile
equipment for civil tunnelling and underground hard rock mining
4. Construction Materials
- Quarries: supply of quarry materials to construction projects
- Crushing and Screening: mobile crushing and screening for quarries, civil works and mining
5. All other segments
This segment includes investments in listed equity securities and head office.
The operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as
the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no
aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
Intersegment transactions
Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or
incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on
consolidation.
Segment assets
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the operations of
the segment and the physical location of the asset.
26
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 4. Operating segments (continued)
Segment liabilities
Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the operations
of the segment.
Major customers
During the year ended 30 June 2020, there was no single customer who contributed 10% or more to the consolidated entity's revenue.
For the financial year ended 30 June 2019, two customers within the Civil and Construction segment contributed approximately
$6,411,514 and $3,946,319 respectively to the consolidated entity's revenues.
Operating segment information
Consolidated - 2020
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Interest revenue
Total revenue
Adjusted EBITDA*
Depreciation and amortisation
Interest revenue
Finance costs
Gain on contingent and deferred
consideration
Gain from bargain purchase in a
business combination
Legal fees in connection with the
proposed IPO
Legal fees relating to business
combinations
Stamp duty expensed on
acquisitions
Consulting expenses in connection
with the proposed IPO
Profit/(loss) before income tax
expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Total assets includes:
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
Real Estate
$
Civil and
Construction
$
Tunnelling
and
Underground
Services
$
Construction
Materials
$
All other
segments
$
Eliminations
and
adjustments
$
Total
$
23,645,126
-
23,645,126
3,695,669
5,995
27,346,790
102,582,629
11,137,109
113,719,738
2,212,475
104,880
116,037,093
37,919,465
5,663,541
43,583,006
619,881
2,405
44,205,292
22,822,420
2,798,859
25,621,279
17,343
16
25,638,638
-
-
-
-
98
98
186,969,640
-
(19,599,509)
-
(19,599,509) 186,969,640
6,470,423
113,394
(19,674,454) 193,553,457
(74,945)
-
15,242,469
(17,615)
5,995
(897,857)
21,339,677
(3,870,733)
104,880
(1,607,702)
10,927,525
(7,438,365)
2,405
(1,443,686)
10,933,721
(2,385,057)
16
(885,849)
22,520,376
-
98
(3,429,371)
(28,146,276)
-
-
(588,027)
52,817,492
(13,711,770)
113,394
(8,852,492)
-
-
-
-
-
-
-
-
-
-
-
-
1,040,524
-
-
-
-
-
-
-
(243,045)
(500,000)
(62,998)
-
-
(787,534)
-
-
-
(1,067,409)
-
1,040,524
1,194,898
1,194,898
-
-
-
-
(243,045)
(562,998)
(787,534)
(1,067,409)
29,941,060
(8,998,586)
20,942,474
14,332,992
15,966,122
2,588,403
6,812,299
17,780,649
(27,539,405)
69,073,748
127,897,147
115,661,014
51,590,749
4,826,273
(6,881,188) 362,167,743
362,167,743
14,678,503
20,807,779
36,705,895
4,069,940
-
-
76,262,117
15,071,008
87,995,974
44,876,563
15,019,250
104,130,591
(3,688,202) 263,405,184
263,405,184
*
Adjusted EBITDA excludes the effects of significant items of income and expenditure which may have an impact on the quality of
earnings because of isolated or non-recurring events.
27
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 4. Operating segments (continued)
Consolidated - 2019
Revenue
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Interest revenue
Total revenue
Adjusted EBITDA*
Depreciation and amortisation
Interest revenue
Finance costs
Gain from bargain purchase in a
business combination
Profit/(loss) before income tax
expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Total assets includes:
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
Real Estate
$
Civil and
Construction
$
Tunnelling
and
Underground
Services
$
Construction
Materials
$
All other
segments
$
Eliminations
and
adjustments
$
Total
$
1,122,333
-
1,122,333
126,915
4
1,249,252
29,447,649
3,077,770
32,525,419
1,363,305
1,439,923
35,328,647
197,959
-
4
(4,991)
11,130,712
(3,584,820)
1,439,923
(1,058,249)
-
-
192,972
7,927,566
-
-
-
-
-
-
-
-
-
-
-
-
6,199,594
1,711,277
7,910,871
114,260
7
8,025,138
2,884,299
(29,437)
7
(206,324)
-
-
-
1,672,730
-
1,672,730
2,556,546
-
-
-
-
(4,789,047)
(4,789,047)
(971,241)
-
(5,760,288)
36,769,576
-
36,769,576
2,305,969
1,439,934
40,515,479
(2,333,408)
102,092
-
159
14,436,108
(3,512,165)
1,439,934
(1,269,405)
-
1,581,656
-
1,581,656
2,648,545
4,138,202
(2,231,157)
12,676,128
(3,455,875)
9,220,253
38,657,584
95,755,925
99,480,487
14,823,812
93,086
25,624,667
8,569,761
-
4,434,804
36,490,294
55,133,416
65,044,701
12,598,169
-
-
(6,410,196) 242,400,698
242,400,698
(227,562)
38,401,670
(4,344,623) 164,921,957
164,921,957
*
Adjusted EBITDA excludes the effects of significant items of income and expenditure which may have an impact on the quality of
earnings because of isolated or non-recurring events.
Geographical information
For the financial year ended 30 June 2020, revenue from external customers attributed to foreign countries amounted to $5,924,279
(Vietnam: $4,582,348 and Indonesia: $1,341,931). For the financial year ended 30 June 2019, revenue from external customers
attributed to foreign countries was not material.
The total non-current assets, other than financial instruments and deferred tax assets, located in Australia amounted to $233,556,666
(2019 - $155,497,296) and non-current assets located in foreign countries (Vietnam and Indonesia) amounted to $11,180,042 (2019 -
$7,618,263).
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to
operating segments and assessing their performance.
28
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 5. Revenue
Revenue from contracts with customers
Construction - civil infrastructure (i)
Construction - residential (i)
Electrical service (i)
Labour hire and repairs (i)
Sale of goods - plant, equipment, parts, road-base and aggregates (ii)
Land development and resale (ii)
Other revenue
Equipment and machinery hire
Management fees
Dividends and trust distributions
Rent
Other revenue
Consolidated
2020
$
2019
$
18,299,491
9,253,894
19,933,927
3,412,496
91,913,047
14,391,232
157,204,087
29,765,553
2,430,000
969
623,010
3,416,444
36,235,976
18,262,095
-
-
-
6,378,850
1,122,333
25,763,278
11,006,298
-
818,190
19,355
1,468,424
13,312,267
Revenue
193,440,063
39,075,545
Disaggregation of revenue
The consolidated entity derives revenue from the transfer of goods and services over time and at a point in time for all major revenue
sources indicated above. All revenue from contracts with customers is derived from the sale of goods and services to customers located
in Australia, Vietnam and Indonesia. Refer to note 4 for disaggregation of revenue by geographical region.
(i) Revenue recognised over time
(ii) Revenue recognised at a point in time
Included in the following tables are reconciliations of the disaggregated revenue and other income with the consolidated entity's
reportable segments (refer note 4).
Real Estate
$
Civil and
Construction
$
Tunnelling and
Underground
Services
$
Construction
Materials
$
Eliminations
$
Total
$
2020
Construction - civil infrastructure
Construction - residential
Electrical service
Labour hire and repairs
Sale of goods - plant, equipment,
parts, road-base and aggregates
Land development and resale
Revenue from contracts with
customers
-
9,253,894
-
-
28,336,526
-
19,933,927
1,163,708
-
-
-
2,248,788
-
-
-
-
(10,037,035)
-
-
-
18,299,491
9,253,894
19,933,927
3,412,496
-
14,391,232
44,936,716
-
29,817,452
-
25,621,279
-
(8,462,400)
-
91,913,047
14,391,232
23,645,126
94,370,877
32,066,240
25,621,279
(18,499,435)
157,204,087
Equipment and machinery hire
-
19,348,861
11,516,766
-
(1,100,074)
29,765,553
Total sales revenue per segment
23,645,126
113,719,738
43,583,006
25,621,279
(19,599,509)
186,969,640
29
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 5. Revenue (continued)
Real Estate
$
Civil and
Construction
$
Tunnelling and
Underground
Services
$
Construction
Materials
$
Eliminations
$
Total
$
2020
Other revenue
Equipment and machinery hire
disclosed in sales revenue per
segment
3,695,669
21,561,336
12,136,647
17,343
(1,175,019)
36,235,976
-
(19,348,861)
(11,516,766)
-
1,100,074
(29,765,553)
Total other revenue per segment
3,695,669
2,212,475
619,881
17,343
(74,945)
6,470,423
Real Estate
$
Civil and
Construction
$
Construction
Materials
$
Eliminations
$
Total
$
2019
Construction - civil infrastructure
Sale of goods - plant, equipment, parts, road-base
and aggregates
Land development and resale
Revenue from contracts with customers
-
21,223,624
-
(2,961,529)
18,262,095
-
1,122,333
1,122,333
179,256
-
21,402,880
7,910,871
-
7,910,871
(1,711,277)
-
(4,672,806)
6,378,850
1,122,333
25,763,278
Equipment and machinery hire
-
11,122,539
-
(116,241)
11,006,298
Total sales revenue per segment
1,122,333
32,525,419
7,910,871
(4,789,047)
36,769,576
Real Estate
$
Civil and
Construction
$
Construction
Materials
$
Other
$
Eliminations
$
Total
$
2019
Other revenue
Equipment and machinery hire
disclosed in sales revenue per
segment
126,915
12,485,844
114,260
1,672,730
(1,087,482)
13,312,267
-
(11,122,539)
-
-
116,241
(11,006,298)
Total other revenue per segment
126,915
1,363,305
114,260
1,672,730
(971,241)
2,305,969
Accounting policy for revenue recognition
Construction - civil infrastructure
The consolidated entity derives revenue from the construction of civil infrastructure projects, including roads, railways, tunnels, water,
energy and resources facilities across Australia. Contracts entered into may be for the construction of one or several separate stages in
a project (deliverables). The construction of each individual deliverable is generally taken to be one performance obligation. Where
contracts are entered for the building of deliverables, the total transaction price is allocated across each deliverable based on stand-
alone selling prices. The transaction price is normally fixed at the start of the project. It is normal practice for contracts to include bonus
and penalty elements based on timely construction or other performance criteria known as variable consideration, discussed below.
The performance obligation is fulfilled over time and as such revenue is recognised over time. As work is performed on the assets being
constructed they are controlled by the customer and have no alternative use to the consolidated entity, with the consolidated entity
having a right to payment for performance to date.
Generally, contracts identify various inter-linked activities required in the construction process. Revenue is recognised on the measured
output of each process based on appraisals that are agreed with the customer on a regular basis.
Revenue earned is typically invoiced monthly or in some cases on achievement of milestones or to match major capital outlay.
Invoices are paid on normal commercial terms, which may include the customer withholding a retention amount until finalisation of the
construction. Certain construction projects entered into receive payment prior to work being performed in which case revenue is deferred
on the statement of financial position.
30
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 5. Revenue (continued)
Construction - residential
The consolidated entity derives revenue from the construction of residential houses in the NSW area. Contracts entered into is for the
construction of a residential dwelling and is taken to be one performance obligation and the stand-alone selling price. The performance
obligation is fulfilled over time and as such revenue is recognised over time. As work is performed on the assets being constructed they
are controlled by the customer and have no alternative use to the consolidated entity, with the consolidated entity having a right to
payment for performance to date.
Generally, contracts identify various inter-linked activities required in the construction process. Revenue is recognised on the measured
input, being stage of completion of costs incurred against budgeted costs. Stage of completion is determined with reference to the
services performed to date as a percentage of total anticipated services to be performed.
Customers are invoiced based on the achievement of milestones (included in the contract). Payment is received following invoice on
normal commercial terms. At reporting date, the amounts invoiced are likely to differ from the stage of completion. The difference is
recognised as either a contract asset or contract liability.
Equipment and machinery hire
The consolidated entity generates revenue from the provision of dry hire and wet hire of plant and equipment to many infrastructure
projects throughout Australia. Contracts include separate mobilisation and demobilisation fees and a schedule of rates for the dry hire or
wet hire. Dry hire revenue is generated from hire of equipment only, no supply of driver, maintenance or fuel, whereas wet hire includes
a driver and can include maintenance services and fuel.
These form of contracts may vary in scope however all wet hires have one common performance obligation, being the provision of
equipment and driver to the customer which includes mobilisation and dismantling, and maintenance services and any ancillary materials
that are required to fulfil the obligation.
The mobilisation fees, maintenance services and ancillary materials are generally taken to be one performance obligation as the
customer does not benefit from these services on its own, are not considered distinct and therefore are grouped with other items in the
contract, being the hire of equipment.
Equipment and machinery rental periods are typically short-term and is recognised at fixed rates over the period of hire. Customers are
in general invoiced on a monthly basis and payment is received following invoice on normal commercial terms.
Electrical service revenue
The consolidated entity performs electrical services specialising in underground and overhead power line construction and High Voltage
and Low Voltage cable jointing for supply authorities and mining professionals. Contracts may include multiple processes required to be
performed for each milestone set in the project. Milestones may be performed by the Group or by other contractors employed by the
customer and as such are accounted for as separate obligations. The transaction price is allocated to each performance obligation
based on the stand-alone selling price. The total transaction price may include a variable pricing element which is accounted for in
accordance with the policy on variable consideration.
Performance obligations are fulfilled over time with revenue recognised in the accounting period in which the electrical services are
rendered based on the amount of the expected transaction price allocated to each performance obligation as the customer continues to
control the asset as it is enhanced.
Customers are typically invoiced on a monthly basis for an amount that is calculated on a schedule of rates that is aligned with the stand
alone selling prices for each performance obligation. Payment is received following invoice on normal commercial terms.
Service revenue: labour hire and repairs
The consolidated entity performs repairs to machinery and provides labour to customers in the underground mining, tunnelling, civil
construction and rail industries. Contracts include a schedule of rates that is aligned with the stand alone selling prices of the service
provided. The performance obligation is fulfilled over time and as such revenue is recognised over time because the customer
simultaneously receives and consumes the benefits provided by the entity’s performance. Revenue is recognised on the measured
output with reference to the services performed to date.
Customers are typically invoiced on a monthly basis for an amount that is calculated on a schedule of rates that is aligned with the stand
alone selling prices for each performance obligation. Payment is received following invoice on normal commercial terms.
Sales of goods – plant, equipment, parts, road-base and aggregates
The consolidated entity sells plant, equipment, parts, road-base and aggregates. Sale of these goods usually contains only one
performance obligation, with revenue recognised at the point in time when the material is transferred to the customer. The revenue is
measured at the transaction price agreed under the contract. In most cases, the consideration is due when the goods have been
transferred to the customer.
31
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 5. Revenue (continued)
Land development and resale
The consolidated entity develops and sells residential properties in NSW. Property revenue is recognised when control over the property
has been transferred to the customer. This is generally at the point when legal title has transferred to the customer as properties are not
developed based on the specific needs of individual customers. The revenue is measured at the transaction price agreed under the
contract.
Variable consideration
It is common for contracts to include performance bonuses or penalties assessed against the timeliness or cost effectiveness of work
completed or other performance related KPIs. Where consideration in respect of a contract is variable, the expected value of revenue is
only recognised when the uncertainty associated with the variable consideration is subsequently resolved, known as “constraint”
requirements. The consolidated entity assesses the constraint requirements on a periodic basis when estimating the variable
consideration to be included in the transaction price. The estimate is based on all available information including historic performance.
Where modifications in design or contract requirements are entered into, the transaction price is updated to reflect these. Where the
price of the modification has not been confirmed, an estimate is made of the amount of revenue to recognise whilst also considering the
constraint requirement.
Contract assets and liabilities
AASB 15 uses the terms ‘contract asset’ and ‘contract liability’ to describe what is commonly known as ‘accrued revenue’ and ‘deferred
revenue’. Contract assets are balances due from customers under contracts as work is performed and therefore a contract asset is
recognised over the period in which the performance obligation is fulfilled. This represents the entity’s right to consideration for the
services transferred to date. Amounts are generally reclassified to receivables when these have been certified or invoiced to a
customer. Contract liabilities arise where payment is received prior to work being performed.
Financing components
The consolidated entity does not expect to have any contracts where the period between the transfer of the promised goods or services
to the customer represents a financing component. As a consequence, the consolidated entity does not adjust any of the transaction
prices for the time value of money.
Warranties and defect periods
Generally construction and services contracts include defect and warranty periods following completion of the project. These obligations
are not deemed to be separate performance obligations and therefore estimated and included in the total costs of the contracts. Where
required, amounts are recognised accordingly in line with AASB 137 Provisions, Contingent Liabilities and Contingent Assets.
Loss making contracts
A provision is made for the difference between the expected cost of fulfilling a contract and the expected unearned portion of the
transaction price where the forecast costs are greater than the forecast revenue.
Dividends and interest
Dividend revenue is recognised when the right to receive a dividend has been established, and interest revenue is recognised using the
effective interest method.
Rent
Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease incentives granted are
recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.
Note 6. Other income
Net gain on disposal of property, plant and equipment
Net fair value gain on financial assets at fair value through profit or loss
Insurance recoveries
Net reimbursement of expenses
Gain on contingent and deferred consideration (refer note 41)
Other income
32
Consolidated
2020
$
2019
$
2,358,369
231,430
172,569
293,144
1,040,524
74,777
883,816
2,785
75,688
-
4,096,036
1,037,066
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 7. Expenses
Profit before income tax includes the following specific expenses:
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Superannuation expense
Defined contribution superannuation expense
Note 8. Income tax expense
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets (note 19)
Increase in deferred tax liabilities (note 28)
Deferred tax - origination and reversal of temporary differences
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Step down in inventory on consolidation
Non-deductible interest
Other non-assessable income
Adjustment recognised for prior periods
Difference in overseas tax rates
Income tax expense
33
Consolidated
2020
$
2019
$
6,194,136
2,658,356
339,989
929,416
8,852,492
1,269,405
2,979,980
496,967
Consolidated
2020
$
2019
$
7,737,570
2,260,124
(999,108)
3,169,730
286,145
-
8,998,586
3,455,875
(1,075,918)
3,336,042
(13,959)
300,104
2,260,124
286,145
29,941,060
12,676,128
8,982,318
3,802,838
818,648
635,942
41,339
10,478,247
(999,108)
(480,553)
454
-
(174,014)
3,629,278
-
(173,403)
8,998,586
3,455,875
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 9. Cash and cash equivalents
Current assets
Cash on hand
Cash at bank
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as
shown in the statement of cash flows as follows:
Balances as above
Secured:
Bank overdrafts (note 22)
Balance as per statement of cash flows
Consolidated
2020
$
2019
$
1,491
12,451,811
2,746
3,365,353
12,453,302
3,368,099
12,453,302
3,368,099
-
(430,716)
12,453,302
2,937,383
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents also
includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.
Note 10. Trade and other receivables
Current assets
Financial assets at amortised cost:
Trade receivables
Less: Allowance for expected credit losses
Other receivables
GST receivable
Non-current assets
Financial assets at amortised cost:
Loans due by director related entities
Loans due by non-related entities (i)
Consolidated
2020
$
2019
$
26,556,227
(760,000)
25,796,227
17,413,242
-
17,413,242
1,556,579
-
1,925,943
3,372,621
27,352,806
22,711,806
-
-
-
50,460
12,372,997
12,423,457
Total trade and other receivables
27,352,806
35,135,263
Accounting policy for trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of
business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All
other receivables are classified as non-current assets.
Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing
components, when they are recognised at fair value. The consolidated entity holds the trade receivables with the objective to collect the
contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
34
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 10. Trade and other receivables (continued)
(a) Fair values of trade and other receivables
Due to the short term nature of the current receivables, the carrying amount is considered to be the same as their fair value.
(b) Other financial assets at amortised cost
These amounts generally arise from transactions outside the usual operating activities of the consolidated entity. Interest is charged at
commercial rates where the repayment exceeds 12 months. Collateral is not normally obtained. The non-current receivables are due and
payable within 2 years from the end of the reporting period.
(c) Fair values of financial assets at amortised cost
For the non-current receivables, the fair values are not significantly different from their carrying amounts.
(d) Impairment and risk exposure
Note 32 sets out information of financial assets and exposure to credit risk.
Loans due by director related entities and non-related entities are denominated in Australian dollars, as a result there is no exposure to
foreign currency risk. Current trade and other receivables include balances denominated in Vietnamese Dong. Refer note 32 for the
consolidated entity's exposure to foreign currency risk.
(i) Included in interest revenue is $101,601 (2019: $1,117,929) relating to loans due by non-related entities.
Note 11. Contract assets
Current assets
Contract assets
Consolidated
2020
$
2019
$
11,421,354
3,055,685
The balance at 30 June 2019 includes contract assets of $3,042,685 acquired through business acquisitions in the 2019 financial year.
The main drivers for the increase in contract assets were the new international operations which contributed an increase of $2,814,788
in contract assets. Growth in the underground mining segment overall contributed to an additional $3,107,431 to the balance as at 30
June 2020.
Accounting policy for contract assets
Contract assets are recognised when the consolidated entity has transferred goods or services to the customer but where the
consolidated entity is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for
impairment purposes.
Note 12. Inventories
Current assets
Raw materials - at cost
Finished goods - at cost
Land held for development and resale
Machines held for resale - at cost
Non-current assets
Land held for development and resale
Total inventories
35
Consolidated
2020
$
2019
$
12,452,741
304,650
15,904,540
25,338,221
7,056,760
1,629,528
3,168,451
20,471,669
54,000,152
32,326,408
21,785,561
27,750,033
75,785,713
60,076,441
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 12. Inventories (continued)
Amounts recognised in profit or loss
Consolidated
2020
$
2019
$
Inventories recognised as an expense during the year included in cost of sales and cost of providing
services
89,195,024
8,259,129
Accounting policy for inventories
Inventories are carried at the lower of cost and net realisable value and comprise of the following:
- Land held for development and resale
Cost includes the costs of acquisition, development and holding costs such as rates, taxes and finance costs. Holding costs on property
developments not under active development are expensed as incurred. Land held for development and resale not expected to be
realised within the next 12 months has been classified as non-current.
- Raw materials, finished goods and parts
Raw materials, finished goods and parts are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct
labour and an appropriate proportion of variable and fixed overhead expenditure. Costs of purchased inventory are determined after
deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
Note 13. Financial assets at fair value through profit or loss
Consolidated
2020
$
2019
$
-
93,086
93,086
-
(324,516)
231,430
23,188,628
1,221,709
(25,201,067)
883,816
-
93,086
Consolidated
2020
$
2019
$
6,963,615
-
Current assets
Listed equity securities
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous financial year are
set out below:
Opening fair value
Additions
Disposals
Fair value gain
Closing fair value
Refer to note 33 for further information on fair value measurement.
Note 14. Non-current assets classified as held for sale
Current assets
Investment properties - at fair value
36
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 14. Non-current assets classified as held for sale (continued)
A residential property with a fair value of $190,015, situated in Emerald QLD.
The investment properties held for sale consist of:
(i)
(ii) Vacant land with a fair value of $145,000, situated in Muswellbrook NSW.
(iii) Two commercial properties with fair values of $540,000 and $3,000,000 respectively, situated in Rutherford NSW.
(iv) Two commercial properties with fair values of $1,280,000 and $408,600 respectively, situated in Emerald QLD.
(v) A commercial property with a fair value of $1,400,000, situated in Mackay QLD.
The residential property situated in Emerald QLD was sold after the reporting date for $190,015. All other properties are expected to be
sold within 12 months from the reporting date and sale negotiations are currently in progress. The properties are surplus to
requirements. The assets are presented within total assets of the Real Estate segment in note 4.
Accounting policy for non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value
less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for
immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair
value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current
assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to
the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on
the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current liabilities.
Note 15. Other
Current assets
Prepaid expenses
Deposits
Other current assets
Non-current assets
Security deposits
Bank guarantees
Total other assets
Consolidated
2020
$
2019
$
2,061,135
365,564
214,782
951,490
2,160,290
214,031
2,641,481
3,325,811
139,749
-
35,900
32,261
139,749
68,161
2,781,230
3,393,972
37
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 16. Investment properties
Non-current assets
Investment properties - at fair value
Investment properties under construction - at cost
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous financial
year are set out below:
Balance at 1 July
Additions
Classified as held for sale
Disposals
Fair value gain
Balance at 30 June
Amounts recognised in profit or loss for investment properties
Rental income
Direct operating expenses from property that generated rental income
Direct operating expenses from property that did not generate rental income
Consolidated
2020
$
2019
$
13,345,016
1,071,070
2,010,010
-
14,416,086
2,010,010
2,010,010
12,383,713
(6,963,615)
(139,904)
7,125,882
-
2,010,010
-
-
-
14,416,086
2,010,010
Consolidated
2020
$
2019
$
898,010
(450,973)
-
19,355
-
-
Valuations of investment properties
The investment properties are revalued annually based on independent assessments by a member of the Australian Property Institute
having recent experience in the location and category of investment property being valued. Valuations are based on current prices in an
active market for similar properties of the same location and condition, subject to similar leases and takes into consideration occupancy
rates and returns on investment.
Refer to note 33 for further information on fair value measurement.
Leasing arrangements
The investment properties are leased to tenants under operating leases with rentals payable monthly. Lease payments for some
contracts include CPI increases, but there are no other variable lease payments that depend on an index or rate. Where considered
necessary to reduce credit risk, the consolidated entity may obtain bank guarantees for the term of the lease.
Although the consolidated entity is exposed to changes in the residual value at the end of the current leases, the consolidated entity
typically enters into new operating leases and therefore will not immediately realise any reduction in residual value at the end of these
leases. Expectations about the future residual values are reflected in the fair value of the properties.
38
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 16. Investment properties (continued)
Minimum lease payments receivable on leases of investment properties are as follows:
Within 1 year
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Consolidated
2020
$
2019
$
430,896
360,000
360,000
360,000
360,000
1,870,896
-
-
-
-
-
-
Accounting policy for investment properties
Investment properties principally comprise of freehold land and buildings held for long-term rental and capital appreciation that are not
occupied by the consolidated entity. Investment properties are initially recognised at cost, including transaction costs, and are
subsequently remeasured annually at fair value. Movements in fair value are recognised directly to profit or loss.
Investment properties are derecognised when disposed of or when there is no future economic benefit expected.
Transfers to and from investment properties to property, plant and equipment are determined by a change in use of owner-occupation.
The fair value on the date of change of use from investment properties to property, plant and equipment are used as deemed cost for the
subsequent accounting. The existing carrying amount of property, plant and equipment is used for the subsequent accounting cost of
investment properties on the date of change of use.
Investment properties also include properties under construction for future use as investment properties. These are carried at fair value,
or at cost where fair value cannot be reliably determined and the construction is incomplete.
Note 17. Property, plant and equipment
Non-current assets
Quarry land - at cost
Less: Accumulated amortisation
Land and buildings - at cost
Less: Accumulated depreciation
Hire machinery and equipment - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Assets under construction - at cost
39
Consolidated
2020
$
2019
$
18,588,700
(226,768)
18,361,932
26,690,983
(3,042,798)
23,648,185
6,728,415
-
6,728,415
17,151,792
(1,805,009)
15,346,783
97,156,440
(18,690,876)
78,465,564
67,293,475
(11,442,120)
55,851,355
35,349,417
(10,866,732)
24,482,685
17,198,790
(8,088,276)
9,110,514
14,551,649
(3,961,370)
10,590,279
9,050,581
(2,966,369)
6,084,212
12,671,927
6,537,946
168,220,572
99,659,225
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 17. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Additions
Additions through business
combinations (note 40)
Disposals
Transfers in/(out)
Depreciation expense
Balance at 30 June 2019
Additions
Additions through business
combinations (note 40)
Disposals
Transfers to inventory
Transfers in/(out)
Depreciation expense
Quarry
land
$
Land and
Buildings
$
Hire
equipment
and
machinery
$
Plant and
equipment
$
Motor
vehicles
$
Assets under
construction
$
Total
$
4,428,415
2,300,000
216,556
1,992,545
27,582,663
6,123,457
4,262,074
359,755
2,879,465
2,001,246
-
-
39,369,173
12,777,003
-
-
-
-
13,638,154
-
(488,759)
(11,713)
24,306,125
(1,050,356)
798,594
(1,909,128)
5,051,008
(362,263)
488,759
(688,819)
2,222,149
(133,850)
15,364
(900,162)
6,537,946
-
-
-
51,755,382
(1,546,469)
813,958
(3,509,822)
6,728,415
460,285
15,346,783
8,625,983
55,851,355
29,044,611
9,110,514
616,689
6,084,212
5,425,686
6,537,946
17,776,271
99,659,225
61,949,525
11,400,000
-
-
-
(226,768)
2,562,664
(1,649,456)
-
-
(1,237,789)
3,475,000
(11,131,202)
(2,922,809)
11,397,365
(7,248,756)
23,597,093
(486,198)
(5,576,957)
-
(2,778,456)
1,187,000
(524,490)
(587,128)
-
(995,001)
-
(202,477)
(42,448)
(11,397,365)
-
42,221,757
(13,993,823)
(9,129,342)
-
(12,486,770)
Balance at 30 June 2020
18,361,932
23,648,185
78,465,564
24,482,685
10,590,279
12,671,927
168,220,572
Accounting policy for property, plant and equipment
All property, plant and equipment except for land and assets under construction, are measured on the cost basis and therefore carried at
cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of property, plant and equipment
is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount
and impairment losses are recognised through profit or loss. A formal assessment of recoverable amount is made when impairment
indicators are present.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from
the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
The cost of fixed assets constructed within the consolidated entity includes the cost of materials, direct labour, borrowing costs and an
appropriate proportion of fixed and variable overheads.
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. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including land improvements & buildings, but excluding freehold land, is depreciated on either
the diminishing value method or units of production method over the asset’s useful life to the consolidated entity commencing from the
time the asset is held ready for use. Estimated useful lives for each class of depreciable asset are as follows:
Buildings
Leasehold improvements
Hire equipment and machinery
Plant and equipment
Motor vehicles
2-10 years
20-25 years
3-10 years
3-10 years
4-8 years
Quarry land is amortised based on the rate of depletion of reserves as compared to the estimate of the total economically recoverable
reserves.
40
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 17. Property, plant and equipment (continued)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Buildings, plant and equipment, and motor vehicles under lease are depreciated over the unexpired period of the lease or the estimated
useful life of the assets, whichever is shorter. If the consolidated entity is reasonably certain to exercise a purchase option, the right of
use asset is depreciated over the underlying assets useful life.
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 gains and losses are recognised
in profit or loss in the period in which they arise.
Leased assets
Included in the above property, plant and equipment balances are assets under lease. Refer note 23 for details of right-of-use assets
and the respective lease liabilities.
Note 18. Intangibles
Non-current assets
Goodwill - at cost
Brand names - at cost
Customer contracts/relationships - at cost
Less: Accumulated amortisation
Extraction rights - at cost
Water licence - at cost
Consolidated
2020
$
2019
$
33,123,751
32,333,804
2,492,126
-
2,450,000
(1,225,000)
1,225,000
2,450,000
-
2,450,000
3,250,000
-
223,612
49,567
40,314,489
34,833,371
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Additions through business
combinations (note 40)
Balance at 30 June 2019
Additions
Additions through business
combinations (note 40)
Amortisation expense
Goodwill
$
Brand names
$
Customer
contracts/
relationships
$
Extraction
rights
$
-
32,333,804
32,333,804
-
-
-
-
-
-
2,450,000
2,450,000
-
Water licence
$
Total
$
-
-
49,567
49,567
-
34,783,804
-
3,250,000
49,567
174,045
34,833,371
3,424,045
789,947
-
2,492,126
-
-
(1,225,000)
-
-
-
-
3,282,073
(1,225,000)
Balance at 30 June 2020
33,123,751
2,492,126
1,225,000
3,250,000
223,612
40,314,489
41
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 18. Intangibles (continued)
Impairment testing for goodwill and intangibles with indefinite lives:
The calculations use cash flow projections based on cash flow forecasts covering a five-year period. The cash flows are based on past
results adjusted for current market conditions and known contracts. Cash flows beyond the five-year period are extrapolated using the
estimated growth rates stated below. These growth rates are consistent with forecasts included in industry reports specific to the industry
in which each CGU operates.
Goodwill and indefinite lived intangible assets are monitored by management at the following level:
MAAS Homes
Large Industries
Machinery Sales
Tunnelling and Underground Services
Construction Materials
Total goodwill and indefinite lived intangible assets
Consolidated
2020
$
2019
$
1,460,197
1,265,868
4,609,384
27,490,481
789,947
1,460,197
1,265,868
4,609,384
24,998,355
-
35,615,877
32,333,804
The following table sets out the key assumptions for the value in use:
Sales growth
rate
(a)
%
Fixed costs per
annum
(b)
$
Annual capital
expenditure
(c)
$
Long term
growth rate
(d)
%
Pre-tax
discount rate
(e)
%
2020
MAAS Homes
Large Industries
Machinery Sales
Tunnelling and Underground Services
Construction Materials
2019
MAAS Homes
Large Industries
Machinery Sales
Tunnelling and Underground Services
2%
2%
2%
2%
2%
1,000,000
5,900,000
1,300,000
8,400,000
2,300,000
-
900,000
-
4,300,000
4,500,000
1%
1%
1%
1%
1%
18%
18%
18%
18%
18%
Fixed costs per
annum
(b)
$
Annual capital
expenditure
(b)
$
Long term
growth rate
(d)
%
Pre-tax
discount rate
(e)
%
600,000
5,500,000
1,200,000
13,500,000
8,000
1,000,000
14,000
24,100,000
1%
1%
1%
1%
20%
16%
18%
17%
(a) The annual sales growth rate is based on past performance and management's expectations of market development.
(b) Fixed costs of the CGU, which do not vary significantly with sales volumes or prices. Management forecasts these costs based on
the current structure of the business, adjusting for inflationary increases but not reflecting any future restructurings or cost saving
measures. The amounts disclosed are the average operating costs for the five-year forecast period.
(c) Expected capital cash costs based on the historical experience of management, and the planned refurbishment expenditure. No
incremental revenue or cost savings are assumed in the value-in-use model as a result of this expenditure.
(d) This is the weighted average growth rate used to extrapolate cash flows beyond the budget period. The rates are consistent with
forecasts included in industry reports.
(e) Reflects specific risks relating to the relevant segments and the countries in which they operate. In performing the value-in-use
calculations for each CGU, the consolidated entity has applied post-tax discount rates to discount the forecast future attributable
post-tax cash flows. The equivalent pre-tax rates are disclosed in the table.
Whilst there has been no material adverse impact on the financial performance of the consolidated entity from COVID-19, there is a risk
that any future economic downturn could impact the consolidated entity’s products and services offered, customers, supply chain,
staffing and geographical regions in which the group operates. Accordingly judgement has been exercised in considering the impacts
COVID-19 has had, or may have on the assets of the consolidated entity, in particular the inputs included in the value-in-use calculations
supporting recoverability of goodwill and non-current assets.
42
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 18. Intangibles (continued)
Sensitivity
Management have made judgements and estimates in respect of impairment testing. Should judgements and estimates not occur, the
carrying value of goodwill may vary. Any reasonable change in the key assumptions on which the estimates and/or discount rate are
based would not cause the carrying amount of the CGU to exceed the recoverable amount.
Accounting policy for intangible assets
Intangible assets that are acquired are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently
measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any
impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the
difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively
by changing the amortisation method or period.
Brand names
Brand names acquired in a business combination that qualify for separate recognition are recognised as intangible assets at their fair
values. Brand names are not amortised on the basis that they have an indefinite life and are reviewed annually.
Customer contracts/relationships
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their expected benefit,
being their finite life of 3 years.
Extraction rights
Extraction rights are amortised as materials are extracted (volumes extracted during the period are compared with the estimated total
volume of deposits to be extracted from the quarry over its useful life) in order to reflect the decline in value due to depletion.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed. Goodwill acquired is allocated to
each of the Cash Generating Units (“CGU”) expected to benefit from the combination’s synergies. Impairment is determined by
assessing the recoverable amount of the CGU to which the goodwill relates. The recoverable amount of a CGU is determined based on
value-in-use calculations which require the use of assumptions.
Note 19. Deferred tax asset
Consolidated
2020
$
2019
$
467,213
774,808
681,407
510,594
24,554
-
298,521
450,028
-
26,997
2,458,576
775,546
775,546
1,075,918
607,112
57,230
13,959
704,357
2,458,576
775,546
Non-current assets
Deferred tax asset comprises temporary differences attributable to:
Property, plant and equipment
Employee benefits
Provisions
Transaction/issuance costs
Other
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss (note 8)
Additions through business combinations (note 40)
Closing balance
43
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 20. Trade and other payables
Current liabilities
Financial liabilities at amortised cost:
Trade payables
BAS payable
Other payables
Consolidated
2020
$
2019
$
12,668,306
1,983,400
12,589,274
13,833,147
-
3,913,523
27,240,980
17,746,670
Refer to note 32 for further information on financial instruments.
Accounting policy for trade and other payables
Trade payables are amounts due to suppliers for goods purchased or services provided in the ordinary course of business. Trade
payables are generally due for settlement within 30 days and therefore are all classified as current.
Other payables and accrued expenses generally arise from normal transactions within the usual operating activities of the consolidated
entity and comprise items such as employee taxes, employee on costs, GST and other recurring items.
A liability is recorded for goods and services received prior to balance date, whether invoiced to the consolidated entity or not. Trade
payables are normally settled within 30 days.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short term nature.
Note 21. Contract liabilities
Current liabilities
Contract liabilities
Lease income in advance
Consolidated
2020
$
2019
$
823,272
6,279,772
246,580
2,601,846
7,103,044
2,848,426
Under the terms of contract the consolidated entity is sometimes required to provide performance guarantees (refer note 34).
The balance at 30 June 2019 represents contract liabilities through the acquisition of the EMS Group. This balance was transferred to
revenue in the 2020 financial year.
The overall increase in contract liabilities of $4,254,618 was driven through a number of project related milestone prepayments in early
stages of commencement as at 30 June 2020.
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of the reporting
period was $7,103,044 as at 30 June 2020 ($2,848,426 as at 30 June 2019) and is expected to be recognised as revenue in future
periods as follows:
Within 6 months
Consolidated
2020
$
2019
$
7,103,044
2,848,426
44
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 21. Contract liabilities (continued)
Accounting policy for contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the consolidated entity recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the consolidated entity has transferred the goods or services to the customer.
Note 22. Borrowings
Current liabilities
Secured:
Bank overdrafts
Bank loans (a)
Multi-option facility (a)
Vendor financing (d)
Unsecured:
Loans due to shareholder related entities (c)
Loans due to director related entities (c)
Loans - other
Non-current liabilities
Secured:
Bank loans (a)
Vendor financing (d)
Unsecured:
Convertible notes (b)
Loans due to shareholder related entities (c)
Loans due to director related entities (c)
Total borrowings
Refer to note 32 for further information on financial instruments.
Consolidated
2020
$
2019
$
-
2,159,599
13,500,000
13,393,476
430,716
5,403,248
-
4,906,500
-
-
1,249,817
17,339,553
38,331,031
1,563,925
30,302,892
67,974,973
36,989,705
11,699,882
8,327,866
5,384,628
21,450,402
17,138,492
24,275,433
-
-
-
111,553,914
13,712,494
141,856,806
81,687,467
(a) Bank loans and multi-option facility
30 June 2020:
In May 2020 the company negotiated a new Corporate Finance Facility of $125m for its Australian operations under a common terms
deed arrangement. The purpose of the new facility was to refinance its existing facilities and to provide additional liquidity to the
consolidated entity. $60m of the $125m facility related to a hire purchase facility (refer note 22) whilst the balance of the facilities
comprised a term loan, and a multi-option cash advance and bank guarantee facility. The multi-option facility is an interchangeable bank
facility which allows the consolidated entity to change between cash advances and contract performance guarantees. The balance of the
contract performance guarantees as at 30 June 2020 amounted to $8,086,480 (refer note 34). The term loan has a 3-year term and is
non-amortising. The multi-option facility also has a 3-year term with an annual requirement to fully repay the cash advance component
for a period of 7 consecutive days. The repaid amount is then able to be redrawn after the 7 day period. The facilities are secured by a
combination of General Security Agreements and mortgages over Australian group assets and property interests. Interest on the bank
loans is calculated using the Bank Bill Swap (BBSY) Bid rate plus a relevant margin. Total transaction costs were $702,020 and
unamortised transaction costs of $661,680 have been offset against the bank loans at 30 June 2020.
Included in bank loans is a 131 billion VND facility in Vietnam which is secured by land use rights and related assets. The facility can be
denominated in the currencies of VND or USD and attracts interest rates of between 7% to 7.5% for VND and 3.5% to 4% for USD. The
loan is denominated in VND.
45
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 22. Borrowings (continued)
30 June 2019:
Current bank loans included an invoice finance facility of $4,328,215, a $8,000,000 loan facility to finance the acquisition of Bizitay and
various other bank loans. All loans had variable interest rates and were secured against all current and non-current assets of the
consolidated entity by floating charge. Covenants included a minimum capital adequacy of 45% as measured on a daily basis and
reported quarterly for the EMS Group. These facilities were refinanced in May 2020.
Non-current bank loans comprised three facilities secured over respective properties. All loans were interest only, had variable interest
rates, terms of 3 years (expiry dates of 29 April 2022, 28 March 2022 and 2 May 2022 respectively) and no financial covenants. These
loans were refinanced in May 2020.
(b) Convertible notes
On 1 July 2019, convertible notes were issued for $20,000,000. A $1,000,000 interest payment due in May 2020 was converted into a
further $1,000,000 in notes and the facility extended and subordinated to the bank debt. The key terms of the new facility is as follows:
●
●
●
●
●
Facility expiry date of 31 May 2023.
Interest payable at 10% per annum in the event IPO does not occur by 31 May 2021 prior interest rate moves to 12%.
Interest payable every 6 months.
The consolidated entity can elect to issue further notes in lieu of accrued interest payment.
In the event of an IPO, noteholders are entitled to receive a 10% discount on the issuance price. If an IPO occurs after 31
December 2020 the discount increases to 12.5%, after 31 December 2021 the discount increases to 15%.
The effect of the Deed of Subordination entered into and amendments to the Note Deed consented to by noteholders mean that
various financial covenants contained in the original note deed no longer have any effect.
Notes are unsecured.
●
●
The net cash received from the issue of the convertible notes was used principally to acquire Jacon and Bizitay (see note 40), for
working capital and for costs associated with the company's proposed IPO.
Movements:
Opening balance
Notes issued at inception
Derivative instrument - conversion feature (note 24)
Notes issued in lieu of accrued interest
Accrued interest
Closing balance
Consolidated
2020
$
2019
$
-
20,000,000
(1,843,174)
1,000,000
2,293,576
21,450,402
-
-
-
-
-
-
The derivative instrument was measured at fair value using inputs that are not based on observable market data.
(c) Loans due to shareholder and Director related entities
All loans due to shareholder and Director related entities are unsecured, non-interest bearing and have been subordinated to the bank
debt.
(d) Vendor Financing
Loans relate to land held for resale and development and are secured against the respective assets. Vendor financing loans comprise
the following:
Southlakes (i)
Bombira (ii)
Westwinds (iii)
Millers Metal Forbes (iv)
46
Consolidated
2020
$
2019
$
3,914,473
-
1,540,000
19,638,885
5,074,128
1,125,000
4,092,000
-
25,093,358
10,291,128
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 22. Borrowings (continued)
(i)
Southlakes - Fixed interest rate of 9.99% and annual repayments (principal and interest) of $1,000,000 and a final payment of
$2,000,000 on 6 August 2024.
(ii) Bombira - Interest free and fully repaid in the 2020 financial year.
(iii) Westwinds - Interest free. Paid $2,552,000 in the 2020 financial year and the value of land of $1,540,000 (inclusive of GST) to be
transferred on or before 27 February 2022.
(iv) Millers Metal Forbes - Interest free loan with penalty interest of 12% charged only on late payments. The facility is secured by
assets acquired and the loan is to be repaid in 2 instalments of $12,573,000 and $7,404,500 respectively which are due on the first
and second anniversary of the transaction completion date: 7 August 2020 and 7 August 2021.
Fair value
The fair values of borrowings are not materially different from their carrying amounts, since the interest payable on borrowings is either
close to current market rates or the borrowings are of a short term nature.
Compliance with loan covenants
The consolidated entity has complied with the financial covenants of its borrowing facilities during the 2020 and 2019 reporting period,
see note 29 for details.
Financing arrangements
The consolidated entity had access to the following undrawn borrowing facilities at the end of the reporting period:
Total facilities
Bank overdrafts
Bank loans*
Multi-option facility (including contract performance guarantees)**
Vendor financing
Loans due to shareholder related entities
Loans due to director related entities
Loans - other
Lease liability (Hire Purchase - refer note 23)
Convertible notes
Used at the reporting date
Bank overdrafts
Bank loans*
Multi-option facility (including contract performance guarantees)**
Vendor financing
Loans due to shareholder related entities
Loans due to director related entities
Loans - other
Lease liability (Hire Purchase - refer note 23)
Convertible notes
Unused at the reporting date
Bank overdrafts
Bank loans*
Multi-option facility (including contract performance guarantees)**
Vendor financing
Loans due to shareholder related entities
Loans due to director related entities
Loans - other
Lease liability (Hire Purchase - refer note 23)
Convertible notes
47
Consolidated
2020
$
2019
$
-
48,187,500
25,000,000
25,093,358
17,138,492
24,275,433
1,249,817
60,000,000
21,450,402
222,395,002
-
39,810,983
21,586,480
25,093,358
17,138,492
24,275,433
1,249,817
57,571,462
21,450,402
208,176,427
-
8,376,517
3,413,520
-
-
-
-
2,428,538
-
14,218,575
3,500,000
15,405,332
5,060,000
10,291,128
17,339,553
38,331,031
1,563,925
42,290,547
-
133,781,516
430,716
13,731,114
4,843,632
10,291,128
17,339,553
38,331,031
1,563,925
42,290,547
-
128,821,646
3,069,284
1,674,218
216,368
-
-
-
-
-
-
4,959,870
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 22. Borrowings (continued)
*
**
The used bank loan facility excludes borrowing costs capitalised.
The used multi-option facility includes performance guarantees of $8,086,480 (2019: $4,843,632) - refer note 34.
Accounting policy for borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds and the redemption amount is recognised in profit or loss over the period of the borrowings
using the effective interest method. Borrowing costs on the establishment of loan facilities are recognised as transaction costs of the loan
to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs.
Borrowings are removed from the consolidated statement of financial position when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss
as other income or finance costs.
Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer settlement of the liability
for at least 12 months after the reporting period.
Convertible notes:
On the issue of the convertible notes, where the conversion is a fixed number of shares for a fixed value there is an equity component,
otherwise the whole instrument is a financial liability.
When it is determined that the whole instrument is a financial liability and no equity instrument is identified, the conversion option is
separated from the host debt and classified as a derivative liability. The carrying value of the host contract, at initial recognition is
determined as the difference between the consideration received and the fair value of the embedded derivative. The host contract is
subsequently measured at amortised cost using the effective interest rate method. The embedded derivative is subsequently measured
at fair value at the end of each reporting period through the consolidated statement of profit or loss and other comprehensive income.
When it is determined that the instrument contains an equity component based on the terms of the contract, on issue of the convertible
notes, the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond. This amount is
classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption.
The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity. The carrying amount of the
conversion option is not re-measured in subsequent years.
Note 23. Lease liabilities
Consolidated
2020
$
2019
$
1,818,341
39,779,230
469,302
27,617,761
41,597,571
28,087,063
5,179,171
17,792,232
1,775,491
14,672,786
22,971,403
16,448,277
64,568,974
44,535,340
Current liabilities
Lease liability - land and buildings*
Lease liability - plant & equipment and motor vehicles
Non-current liabilities
Lease liability - land and buildings*
Lease liability - plant & equipment and motor vehicles
Total lease liabilities
* Represents right-of-use assets
Refer to note 32 for further information on financial instruments.
Refer to note 22 for details of the hire purchase facilities for plant & equipment and motor vehicles.
48
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 23. Lease liabilities (continued)
Right-of-use assets
Balance at 1 July 2018
Additions
Disposals
Depreciation expense
Additions through business combinations
Balance at 30 June 2019
Additions
Disposals
Transfers out
Depreciation expense
Additions through business combinations
Land and
buildings
$
Hire equipment
and
machinery
$
Plant and
equipment
$
Motor
vehicles
$
-
-
-
(11,713)
2,038,689
2,026,976
6,779,477
(1,621,896)
-
(1,019,732)
812,664
21,529,173
7,643,635
(1,939,138)
(1,310,365)
17,190,329
43,113,634
29,526,251
(5,555,764)
(819,061)
(6,273,699)
-
2,758,589
280,000
(333,841)
(410,086)
169,500
2,464,162
4,406,425
(221,783)
-
(445,832)
-
1,642,091
1,765,827
(93,890)
(626,435)
1,190,392
3,877,985
3,653,073
(121,807)
(41,797)
(422,111)
-
Total
$
25,929,853
9,689,462
(2,366,869)
(2,358,599)
20,588,910
51,482,757
44,365,226
(7,521,250)
(860,858)
(8,161,374)
812,664
Balance at 30 June 2020
6,977,489
59,991,361
6,202,972
6,945,343
80,117,165
Land and buildings
The consolidated entity has leases for warehouses and offices. Rental contracts are typically made for a fixed period of 3 - 5 years with
options to extend. With the exception of short-term leases and leases of low value underlying assets, each lease is reflected on the
statement of financial position. The consolidated entity classifies its right-of-use assets in a consistent manner to its property, plant and
equipment. Most extension options have been included in the lease liability.
Plant & equipment and motor vehicles
The consolidated entity leases various plant and equipment under finance lease, hire purchase and good mortgages. The leases are
secured over the individual motor vehicles and equipment that the lease relates to.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the
lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments (including in-
substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty
of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of
use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of
any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease
term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
49
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 24. Derivative financial instruments
Non-current liabilities
Conversion feature - convertible notes
Refer to note 32 for further information on financial instruments.
Refer to note 33 for further information on fair value measurement.
Consolidated
2020
$
2019
$
1,843,174
-
The conversion option amount represents the additional value provided to convertible note holders (refer note 22) compared to the same
corporate bond that would have no feature to convert the notes into shares in MAAS Group Holdings Limited at the end or during the
term of the notes. For accounting purposes such a conversion feature is accounted for separately from the convertible notes as a
derivative financial instrument and is carried at fair value.
Note 25. Employee benefits
Current liabilities
Annual leave
Accounting policy for employee benefits
Consolidated
2020
$
2019
$
2,362,115
995,072
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly within 12 months after
the end of the reporting period in which the employees render the related service are recognised in respect of employees' services up to
the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for
annual leave is presented as provision for employee benefits. All other short-term employee benefit obligations are presented as
payables.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Other long-term employee benefits
The liabilities for long service leave and annual leave which is not expected to be settled wholly within 12 months after the end of the
reporting period in which the employees render the related service 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 end of the reporting
period. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period on corporate bonds with terms and
currencies that match, as closely as possible, the estimated future cash outflows.
The consolidated entitys obligations for long-term employee benefits are presented as non-current provision for employee benefits the
consolidated statement of financial position, except where the consolidated entity does not have an unconditional right to defer
settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as a current provision
for employee benefits.
50
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 26. Provisions
Current liabilities
Onerous customer contracts
Warranties
Contingent consideration
Other provisions
Consolidated
2020
$
2019
$
27,502
300,000
484,194
-
930,182
-
660,000
50,000
811,696
1,640,182
Onerous contracts
The onerous customer contract provision is discounted using a pre-tax rate that reflects current markets assessments of the time value
of money and the risks specific to the liability.
Contingent consideration
Contingent consideration amounts of $434,194 and $50,000 relate to the acquisition of the Westelect and Jacon businesses
(respectively) by EMS Group Pty Ltd.
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the reporting date.
The provision is estimated based on historical warranty claim information, sales levels and any recent trends that may suggest future
claims could differ from historical amounts.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2020
Carrying amount at the start of the year
Additional provisions recognised
Additions through business combinations (note 40)
Amounts used
Payments
Transferred to trade creditors
Unused amounts reversed
Onerous
contracts
$
Warranties
$
Contingent
consideration
$
Other
$
930,182
128,656
-
(1,031,336)
-
-
-
-
300,000
-
-
-
-
-
660,000
-
2,300,000
-
(280,282)
(1,155,000)
(1,040,524)
50,000
-
-
(50,000)
-
-
-
Carrying amount at the end of the year
27,502
300,000
484,194
-
Accounting policy for provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is
probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material,
provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of
time is recognised as a finance cost.
Refer to note 40 for accounting policy on contingent consideration.
51
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 27. Other
Current liabilities
Deferred consideration
Non-current liabilities
Deferred consideration
The deferred consideration relates to the acquisition of Bizitay Pty Ltd (refer note 40).
Note 28. Deferred tax liability
Non-current liabilities
Deferred tax liability comprises temporary differences attributable to:
Property, plant and equipment
Customer contracts/relationships
Deferred tax liability
Movements:
Opening balance
Charged to profit or loss (note 8)
Additions through business combinations (note 40)
Closing balance
Note 29. Issued capital
Consolidated
2020
$
2019
$
333,333
666,667
1,000,000
-
-
-
Consolidated
2020
$
2019
$
13,721,105
367,500
9,799,865
735,000
14,088,605
10,534,865
10,534,865
3,336,042
217,698
3,611,755
300,104
6,623,006
14,088,605
10,534,865
Ordinary shares - fully paid
204,857,704
204,857,704
153,643,287
153,643,287
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
52
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 29. Issued capital (continued)
Movements in ordinary share capital
Details
Balance
Elimination of existing legal acquiree shares
Issue of shares on incorporation of MAAS Group Holdings
Ltd
Shares issued to acquire:
- MAAS Group Pty Ltd
- MAAS Group Developments Pty Ltd
- Regional Hardrock Pty Ltd
- Regional Hardrock (Dubbo) Pty Ltd
- Regional Crushing & Screening Pty Ltd
- Machinery Sales Pty Ltd
- Large Industries Pty Ltd
- EMS Group Pty Ltd
- EMS Plant & Equipment Pty Ltd
- EMS International Pty Ltd
- MAAS Homes Pty Ltd
Date
1 July 2018
18 April 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
30 June 2019
Shares
Issue price
$
1,593
(1,593)
10
82,698,526
59,046,400
2
3,250,000
340,716
9,441,600
4,342,250
32,084,327
317,673
10,575,000
2,761,200
$0.00
$1.00
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
$0.75
1,593
(1,593)
10
62,023,901
44,284,800
1
2,437,500
255,537
7,081,200
3,256,688
24,063,245
238,255
7,931,250
2,070,900
153,643,287
153,643,287
Balance
Balance
30 June 2019
204,857,704
30 June 2020
204,857,704
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a
limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of
capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year. The consolidated
entity monitors capital to ensure it maintains compliance with its various financial covenants. Refer (i) below for a summary of existing
financial covenants for the Australian senior debt facilities.
53
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 29. Issued capital (continued)
(i) Loan covenants
Under the terms of the major borrowing facilities, the consolidated entity is required to comply with the following financial covenants:
(a) A leverage ratio at each reporting date that will be less than or equal to 2.5 times.
(b) A debt service coverage ratio of more than or equal to 1.25 times.
(c) A tangible assets coverage ratio of 1.75 times for the period between 30 June 2020 and 31 March 2021 and 2 times from 30 June
2021 onwards.
(d) Shareholders' funds at each reporting date is not less than the greater of $125,000,000 or 80% of shareholders' funds for the
immediately preceding financial year. Shareholders' funds means, at any time, the aggregate of the amounts paid up or credited as
paid up on the issued ordinary share capital of the company and the amount standing to the credit of the reserves of the company,
including subordinated debt and retained earnings.
The consolidated entity has complied with these covenants throughout the reporting period from the date of commencement of the new
financing facilities.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
Note 30. Reserves
Foreign currency reserve
Business combinations under common control
Consolidated
2020
$
2019
$
341,344
(109,000,146)
-
(109,000,146)
(108,658,802)
(109,000,146)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to
Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.
Business combinations under common control
Any difference between the cost of the acquisition and the amounts at which the acquired assets and liabilities are recorded for business
combinations under common control have been recognised in the Business combinations under common control reserve.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Business combinations under common control
Balance at 30 June 2019
Foreign currency translation
Balance at 30 June 2020
Foreign
currency
reserve
$
Business
combinations
under common
control
$
Total
$
-
-
-
(109,000,146)
-
(109,000,146)
-
341,344
(109,000,146)
-
(109,000,146)
341,344
341,344
(109,000,146)
(108,658,802)
54
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 31. Dividends
Dividends
Dividends paid during the financial year were as follows:
Dividends paid to the shareholders of MAAS Group Pty Ltd
Dividends paid to the shareholders of Eykan Holdings Pty Ltd
Dividends paid to the shareholders of Regional Crushing & Screening Pty Ltd
The above dividend payments occurred prior to the Merger Transaction (refer note 2).
Franking credits
Consolidated
2020
$
2019
$
-
-
-
-
6,145,000
367,000
271,460
6,783,460
Consolidated
2020
$
2019
$
Franking credits available for subsequent financial years based on a tax rate of 30%
20,355,167
10,416,151
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
●
●
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Accounting policy for dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Note 32. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price 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 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, ageing analysis for credit risk.
The Board has overall responsibility for the determination of the consolidated entity’s risk management objectives and policies and,
whilst retaining ultimate responsibility for them, it has delegated the authority for day to day management of these risks to the Chief
Finance Officer. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting
the Group’s competitiveness and flexibility. Further details regarding these policies are set out below:
Market risk
Market risk arises from the use of interest bearing, tradeable and foreign currency financial instruments. It is the risk that the fair value or
future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates
(currency risk) or other market factors (other price risk).
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through
foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in
a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
55
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 32. Financial instruments (continued)
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the reporting
date, shown in Australian Dollars, were as follows:
Financial assets
Cash and cash equivalents (VND)
Trade and other receivables (VND)
Trade and other receivables (USD)
Trade and other receivables (EUR)
Financial liabilities
Bank Loans (VND)
Bank Loans (USD)
Bank Loans (EUR)
Intercompany Loan (VND)
Trade and other payables (VND)
Trade and other payables (USD)
Consolidated
2020
$
2019
$
-
3,011,041
1,556,727
104,866
4,672,634
218,721
9,459
6,373
2,350,000
1,016,977
689,474
4,291,004
195,743
2,384,237
-
-
2,579,980
-
-
-
-
-
-
-
Exchange rates over the 12 month period were analysed and a sensitivity determined to show the effect on profit and equity after tax if
the VND:AUD exchange rates at reporting date had been 10% basis higher or lower, with all other variables held constant. The following
sensitivity analysis is based on the foreign currency risk exposures in existence at the reporting date:
Impact on equity
+10.00%
-10.00%
Consolidated
2020
$
2019
$
38,163
(38,163)
110,867
(110,867)
The percentage change is the expected overall volatility of the significant currencies, which is based on management's assessment of
reasonable possible fluctuations taking into consideration movements over the last 12 months each year and the spot rate at each
reporting date.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the
consolidated entity to interest rate risk. Borrowings obtained at fixed rates expose the consolidated entity to fair value interest rate risk.
As at the reporting date, the consolidated entity had the following variable rate borrowings:
Bank overdraft
Bank loans and multi-option facility (excluding borrowing costs)
Net exposure to cash flow interest rate risk
Consolidated
2020
$
2019
$
-
53,310,983
430,716
13,731,114
53,310,983
14,161,830
56
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 32. Financial instruments (continued)
Impact on profit and equity
+1.00%
-1.00%
Consolidated
2020
$
2019
$
533,110
(533,110)
141,618
(141,618)
An analysis by remaining contractual maturities is shown in 'liquidity' below.
The percentage change is based on the expected volatility of interest rates using market data and analysts forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated
entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting
appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to
credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those
assets, as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not hold
any collateral.
The consolidated entity assess on a forward looking basis in estimating expected credit losses to trade receivables and contract assets.
The simplified approach to measuring expected credit losses has been applied. To measure the expected credit losses, trade
receivables have been grouped based on days past due. The provision is considered representative across all customers of the
consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a
debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater
than 1 year.
Liquidity risk
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
57
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 32. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are
required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore
these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
BAS payable
Other payables
Vendor financing
Interest-bearing
Bank loans
Multi-option facility
Vendor financing
Loans due to shareholder related entities
Loans due to director related entities
Other loans
Lease liability
Convertible notes
Total non-derivatives
Derivatives
Conversion feature of convertible notes
Total derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing
Bank overdraft
Bank loans
Vendor financing
Loans due to shareholder related entities
Loans due to director related entities
Other loans
Lease liability
Total non-derivatives
1 year or less
$
Between 1 and
5 years
$
Over 5 years
$
12,668,306
1,983,400
12,589,274
-
-
-
-
1,540,000
3,317,750
13,789,966
14,117,137
-
-
1,249,817
43,634,638
2,100,000
105,450,288
39,874,588
-
10,921,183
17,138,492
24,275,433
-
23,530,757
26,040,000
143,320,453
-
-
1,843,174
1,843,174
1 year or less
$
Between 1 and
5 years
$
Over 5 years
$
13,833,147
3,913,523
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
430,716
5,403,248
4,906,500
17,339,553
38,331,031
1,563,925
29,715,683
115,437,326
-
8,327,866
6,458,000
-
-
-
17,648,961
32,434,827
-
-
2,000,000
-
-
-
253,684
2,253,684
Remaining
contractual
maturities
$
12,668,306
1,983,400
12,589,274
1,540,000
43,192,338
13,789,966
25,038,320
17,138,492
24,275,433
1,249,817
67,165,395
28,140,000
248,770,741
1,843,174
1,843,174
Remaining
contractual
maturities
$
13,833,147
3,913,523
430,716
13,731,114
13,364,500
17,339,553
38,331,031
1,563,925
47,618,328
150,125,837
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments approximate their fair values.
58
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 33. Fair value measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2020
Assets
Investment properties
Total assets
Liabilities
Derivative instruments - conversion feature of convertible notes
Total liabilities
-
-
-
-
Level 1
$
Level 2
$
Level 3
$
Total
$
1,998,631
1,998,631
18,310,000
18,310,000
20,308,631
20,308,631
Consolidated - 2019
Assets
Listed equity securities
Investment properties
Total assets
Level 1
$
Level 2
$
93,086
-
93,086
-
-
-
-
-
(1,843,174)
(1,843,174)
(1,843,174)
(1,843,174)
Level 3
$
Total
$
-
2,010,010
2,010,010
93,086
2,010,010
2,103,096
Valuation techniques for fair value measurements categorised within level 1
The fair values of listed equity securities are based on quoted market prices at the end of the reporting period. The quoted market price
used for financial assets held by the consolidated entity is the bid price.
Valuation techniques for fair value measurements categorised within level 2 and level 3
- Investment properties
Investment properties are revalued annually based on independent assessments by a member of the Australian Property Institute having
recent experience in the location and category of investment property being valued. The valuers have considered valuation techniques
including direct comparison method, capitalisation approach and/or discounted cash flow analysis in arriving at the fair values as at the
reporting date.
The direct comparison method involves the analysis of comparable sales of similar properties and adjusting the sale prices to that
reflective of the investment properties. The capitalisation approach captures an income stream into a present value using revenue
multipliers or single-year capitalisation rates. The discounted cash flow method involves the estimation and projection of an income
stream over a period and discounting the income stream with an expected rate of return.
All resulting fair value estimates for properties are included in level 3. Investment properties that are held for sale at the reporting date
and which were valued at their selling price, have been included in level 2.
- Derivative instruments - conversion feature of convertible notes
The fair value of the conversion feature of the convertible notes is estimated using present value techniques, by discounting the
probability-weighted estimated future cash outflows.
59
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 33. Fair value measurement (continued)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Additions
Balance at 30 June 2019
Transfers out level 3
Gains recognised in profit or loss
Additions
Balance at 30 June 2020
Investment
properties
$
Derivative
instruments
$
Total
$
-
2,010,010
2,010,010
(1,998,631)
7,125,882
11,172,739
-
-
-
2,010,010
-
-
-
(1,843,174)
2,010,010
(1,998,631)
7,125,882
9,329,565
18,310,000
(1,843,174)
16,466,826
Total gains for the previous year included in profit or loss that relate to level 3 assets
held at the end of the previous year
-
Total gains for the current year included in profit or loss that relate to level 3 assets
held at the end of the current year
7,125,882
-
-
-
7,125,882
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Unobservable inputs
Range
(weighted average)
Sensitivity
Investment properties
(including investment
properties held for sale)
Capitalisation rate
6.75%-13% (10.4%)
Land rate (per sqm)
$0.80-$677 ($318)
Derivative instruments
Risk-adjusted discount
rate
10%
The estimated fair value would increase/(decrease) if
capitalisation rate was lower/(higher)
The estimated fair value would increase/(decrease) if
land rate was higher/(lower)
The lower the discount rate, the higher the fair value
For the derivative instruments, changing one or more of the unobservable inputs to reflect reasonably possible alternative assumptions
would not change fair value significantly.
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is
based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence
of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in
their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are
determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or
when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is
a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a
verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
60
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 34. Contingent liabilities
Contract performance guarantees
Consolidated
2020
$
2019
$
8,086,480
4,843,632
These contract performance guarantees are amounts that can be called on by customers or third parties to rectify works carried out that
have not been performed to the satisfaction of the customer or third party. Guarantees are issued to third parties to complete the
required infrastructure projects required for its land development activities.
Note 35. Commitments
During the year ended 30 June 2020, a share purchase agreement was signed to acquire the entire non-controlling interest in VMS
Engineering Company Ltd for the amount of VND42,470,000,000 (AUD2,513,000). The purchase is to settle in October 2020.
On 3 June 2020, Regional Hardrock Gilgandra Unit Trust entered into a contract to purchase the land and stock on hand of the Berakee
Quarry for a total consideration of $4,400,000 consisting of a cash settlement of $1,650,000 and vendor financing of $2,750,000. The
contract settled on 17 August 2020 (refer note 42).
Note 36. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by BDO Audit Pty Limited, the auditor of the
company, and its network firms:
Audit services
Audit or review of the financial statements
Other services
Due diligence services - independent accountants report
Due diligence services - business acquisitions
Tax consulting services - group structure review
Tax consulting services - advice and ACA calculations
Total remuneration of BDO - Australia
Audit services - network firms of BDO
Audit or review of the financial statements
Other services - network firms
Other services - Due diligence services
Consolidated
2020
$
2019
$
444,923
343,230
693,021
228,242
-
23,064
-
65,000
19,406
-
944,327
84,406
1,389,250
427,636
8,571
31,147
11,240
-
19,811
31,147
The audit fees paid/payable to BDO Audit Pty Ltd for the financial year ended 30 June 2019, includes fees paid/payable for the audit of
the MAAS Aggregated Group which was required to be audited for the proposed Initial Public Offering.
Note 37. Key management personnel disclosures
The following persons are considered key management personnel of the consolidated entity:
● Wesley J Maas - Executive Director (Chairman and Chief Executive Officer)
●
●
Craig G Bellamy - Executive Director (Chief Financial Officer)
Damien J Porter - Executive Director (General Manager - Plant)
61
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 37. Key management personnel disclosures (continued)
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out
below:
Short-term employee benefits
Post-employment benefits
Consolidated
2020
$
2019
$
553,778
47,134
600,912
-
-
-
At 30 June 2019 MAAS Group Holdings Limited was a proprietary company and Wesley J Maas was the sole Director and Chief
Executive Officer. Other than Wesley Maas there were no other key management personnel of the consolidated entity at 30 June 2019.
Wesley Maas did not receive any remuneration during the financial year ended 30 June 2019.
Note 38. Related party transactions
Subsidiaries
Interests in subsidiaries are set out in note 41.
Key management personnel
Disclosures relating to key management personnel are set out in note 37 and the remuneration report included in the directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
Consulting fee paid to entity controlled by key management personnel
Rent paid to key management personnel
All transactions were on commercial terms and conditions and at market rates.
Consolidated
2020
$
2019
$
270,000
19,100
-
-
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
62
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 38. Related party transactions (continued)
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
2020
Related party
entity
KMP related to
Wesley J Maas
Damien Porter
Wesley J Maas
Wesley J Maas
Related party
loan liabilities:
Choice
Investments
Dubbo Pty Ltd
Old Man
Investments Pty
Ltd
Related party
loan
receivables:
Regional
Hardrock Forbes
Unit Trust
Regional
Hardrock West
Wyalong
2019
Related party entity
KMP related to
Related party loan
liabilities:
Choice Investments
Dubbo Pty Ltd
Maas Family Trust
Maas Group Properties
Pty Limited
Wesley J Maas
Wesley J Maas
Wesley J Maas
Related party loan
receivables:
Regional Hardrock
Forbes Unit Trust
Regional Hardrock west
Wyalong
Wesley J Maas
Wesley J Maas
Loan balance
at date of
appointment
as a Director
$
Loans
receivable
offset against
loans
payable
$
Balance at
beginning of
the year
$
Transfer to
shareholder
loans
$
Purchase of
motor vehicle
$
Net loan
payment
$
Balance at
end of the
year
38,331,031
-
(9,622,201)
(4,000,000)
(56,516)
(630,784)
24,021,530
-
38,331,031
254,000
254,000
-
(9,622,201)
-
(4,000,000)
-
(56,516)
(97)
(630,881)
253,903
24,275,433
15,990
34,470
50,460
-
-
-
-
-
-
-
-
-
-
-
-
(15,990)
(34,470)
(50,460)
-
-
-
Balance at
beginning of
the year
$
Dividends
payable
$
Loan
reassigned
$
Addition
through
business
combination
$
Net loan
repayment
$
Balance at
end of the
year
$
30,536,911
1,200,127
6,145,000
-
8,617,199
-
327,750
-
(7,295,829)
(1,200,127)
38,331,031
-
8,617,199
40,354,237
-
6,145,000
(8,617,199)
-
-
327,750
-
(8,495,956)
-
38,331,031
-
-
-
-
-
-
-
-
-
-
-
-
15,990
15,990
34,470
50,460
34,470
50,460
All of the above loans were unsecured and non interest bearing. The loan to Choice Investments Dubbo Pty Ltd has been subordinated
in favour of bank debt. The loan to Old Man Investments Pty Ltd is repayable on demand.
Note 39. Parent entity information
Set out below is the supplementary information about the legal parent entity (MAAS Group Holdings Limited).
63
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 39. Parent entity information (continued)
Statement of profit or loss and other comprehensive income
Profit after income tax
Other comprehensive income for the year, net of tax
Total comprehensive income
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained profits
Total equity
Parent
2020
$
2019
$
19,727,265
-
19,727,265
-
-
-
Parent
2020
$
2019
$
134,183,285
10
151,754,548
153,643,277
285,937,833
153,643,287
15,056,948
97,510,333
112,567,281
-
-
-
173,370,552
153,643,287
153,643,287
19,727,265
153,643,287
-
173,370,552
153,643,287
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has provided guarantees in respect of banking facilities provided to the group (refer note 22).
Contingent liabilities
The parent entity had no other contingent liabilities as at 30 June 2020 that have not been disclosed in note 34. The parent entity had no
contingent liabilities at 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for the
following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an
impairment of the investment.
64
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 40. Business combinations and asset acquisitions
(a) Business acquisitions
Summary of acquisitions
Acquisition of Millers Metals
On 7 August 2019, MAAS Group Pty Ltd (MGPL) acquired 100% of the ordinary shares in Millers Metals Forbes Pty Ltd and the
business assets of Millers Metals from Manso Holdings Pty Ltd, and acquired the land associated in West Wyalong and Forbes through
its wholly owned subsidiaries Regional Hardrock (West Wyalong) Pty Ltd and Regional Hardrock (Forbes) Pty Ltd respectively
(collectively referred to as "Millers Metals"). Millers Metals own and operate quarries in Forbes and West Wyalong and have a
substantial fleet of vehicles, plant and machinery. Millers Metals provides mobile crushing and contract blasting, crushing and screening
services to private and council owned pits. Aligned with the MAAS Group business model the acquisition provides geographic expansion
in both its Construction Materials and Civil and Construction Hire business divisions.
The total consideration for the acquisitions was $33,510,772 consisting of a cash settlement of $14,465,121 and vendor financing of
$19,045,651. The vendor financing is payable in 2 instalments of $12,573,000 and $7,404,500 respectively which are due on the first
and second anniversary of the transaction completion date.
A discount on acquisition of $1,194,898 arose in this transaction due to the valuation of the equipment which was underutilised by the
previous owners and because of the requirement to present value the consideration amount payable.
Considering the integrated nature of the Miller business operations and the inter-dependency of the purchase agreements, the
transactions are considered linked for the purpose of the acquisition accounting, and the provisions of AASB3 Business combinations
have been applied as a combined transaction.
In accordance with accounting standards, the acquisitions have been completed on a provision basis and finalisation of the assessment
of fair values of the identifiable assets and liabilities acquired may result in adjustments to the amounts disclosed in the table below.
Acquisition of Jacon
On 4 September 2019, EMS Group Pty Ltd, EMS International Pty Ltd and VMS Engineering Company Ltd acquired the business
operations of Jacon (with the exception of the operations in India). The Jacon business operated through a number of legal entities
across different jurisdictions (Australia, Vietnam, Singapore and Indonesia). Jacon design, manufacture and supply concrete pumping,
spraying and transportation equipment to the global mining and construction industries, operating in Australia, Vietnam, Indonesia and
India. Aligned with the MAAS Group business model the acquisition provides geographic expansion in both its Construction Materials
and Civil and Construction Hire business divisions.
The total consideration for the acquisitions was $11,138,560 consisting of a cash settlement of $8,560,376, contingent consideration of
$2,300,000, and deferred consideration of $278,184. The contingent consideration is payable over 3 years of which $250,000 is related
to staff retention, $1,050,000 related to the retention of Eric Rutten, and $1,000,000 related to the recoverability of inventory and the
retention of Eric Rutten. Following the acquisition, the contingent and deferred consideration were reduced by $1,000,000 and $40,524
respectively, and the change in fair value recognised in the statement of profit or loss and other comprehensive income under 'Other
income'.
Although there are a number of vendors and purchasers the acquisition is treated as a single transaction for accounting purposes due to
the integrated contract and combined payment provisions.
In accordance with accounting standards, the acquisitions have been completed on a provision basis and finalisation of the assessment
of fair values of the identifiable assets and liabilities acquired may result in adjustments to the amounts in the table below.
Acquisition of Dubbo Sands
On 20 December 2019, Regional Sands (Dubbo) Pty Ltd acquired the business known as Dubbo Sands for a cash consideration of
$6,906,467. The business assets comprised a sand quarry, a farm, water licence and plant & equipment and is located near Dubbo
NSW. The business was acquired in accordance with the business strategy of the Construction Materials division.
65
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 40. Business combinations and asset acquisitions (continued)
Details of the acquisitions are as follows:
Cash and cash equivalents
Trade receivables
Prepayments
Inventories
Land and buildings
Plant and equipment
Brand names
Deferred tax asset
Trade and other payables
Other payables
Contract liabilities
Current tax liability
Deferred tax liability
Employee benefits
Warranty provision
Deferred revenue
Lease liability
Other liabilities
Net assets acquired
Goodwill
Net assets acquired
Representing:
Cash paid or payable to vendor
Contingent consideration
Vendor financing
Deferred consideration
Gain from bargain purchase
Millers Metals
Fair value
$
Jacon
Fair value
$
Dubbo Sands
Fair value
$
Total
$
154,168
1,918,479
67,770
454,456
10,850,000
21,600,000
-
50,257
-
(70,260)
-
(151,678)
-
(167,522)
-
-
-
-
-
-
-
9,473,875
812,664
3,129,093
2,492,126
548,976
(282,523)
-
(132,600)
-
(217,698)
(599,848)
(300,000)
(443,387)
(812,664)
(2,529,454)
-
-
-
304,905
2,300,000
3,530,000
-
7,879
-
-
-
-
-
(26,264)
-
-
-
-
154,168
1,918,479
67,770
10,233,236
13,962,664
28,259,093
2,492,126
607,112
(282,523)
(70,260)
(132,600)
(151,678)
(217,698)
(793,634)
(300,000)
(443,387)
(812,664)
(2,529,454)
34,705,670
-
11,138,560
-
6,116,520
789,947
51,960,750
789,947
34,705,670
11,138,560
6,906,467
52,750,697
14,465,121
-
19,045,651
-
1,194,898
8,560,376
2,300,000
-
278,184
-
6,906,467
-
-
-
-
29,931,964
2,300,000
19,045,651
278,184
1,194,898
34,705,670
11,138,560
6,906,467
52,750,697
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents
Less: payments to be made in future periods
Less: contingent consideration
33,510,772
(154,168)
(19,045,651)
-
11,138,560
-
(278,184)
(2,300,000)
6,906,467
-
-
-
51,555,799
(154,168)
(19,323,835)
(2,300,000)
Net cash used
14,310,953
8,560,376
6,906,467
29,777,796
Revenue and profit contribution
If the acquisitions had occurred on 1 July 2019, the consolidated pro-forma revenue and profit for the year ended 30 June 2020 would
have been as follows:
Millers Metals
$
Jacon
$
Dubbo Sands
$
Other
controlled
entities
$
Total
$
Revenue
8,829,302
20,540,909
2,370,118
167,184,725
198,925,054
Net profit/(loss) for the period after tax
2,212,885
538,190
785,473
17,471,892
21,008,440
66
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 40. Business combinations and asset acquisitions (continued)
The amounts in the above table have been calculated using the results of each subsidiary and adjusting them for:
●
●
differences in the accounting policies between the consolidated entity and the subsidiary, and
the additional depreciation and amortisation that would have been charged assuming the fair value adjustments to property, plant
and equipment and intangible assets had applied from 1 July 2019, together with the consequential tax effects.
The acquired businesses contributed the following revenues and net profit to the consolidated entity from the dates of their respective
acquisitions to 30 June 2020:
Millers Metals
$
Jacon
$
Dubbo Sands
$
Total
$
Revenue
7,264,484
17,161,202
1,278,102
25,703,788
Net profit/(loss) for the period after tax
1,573,970
1,198,851
474,791
3,247,612
Acquired receivables
Fair value of acquired receivables
Gross contractual amount due
Loss allowance recognised on acquisition
Millers Metals
$
Jacon
$
Dubbo Sands
$
Total
$
1,986,249
(1,986,249)
-
-
-
-
-
-
-
1,986,249
(1,986,249)
-
Acquisition-related costs
Acquisition-related costs (including stamp duty) totalling $1,350,532 that were not directly attributable to the issue of shares are included
in Legal, Accounting and Consultants expense ($562,998) and Other expenses ($787,534) in the statement of profit or loss and other
comprehensive income.
(b) Asset acquisitions
Acquisition of Bizitay Pty Ltd
On 30 August 2019, MAAS Group Developments Pty Ltd (MGD) executed and completed a share purchase agreement with Rutherford
Holdings Pty Ltd (Rutherford) to acquire 100% of the shares in Bizitay Pty Ltd (Bizitay) for the total consideration of $11,723,181
(including acquisition costs of $723,181). Bizitay Pty Ltd is an investment vehicle for a number of commercial properties in New South
Wales and Queensland. Bizitay generates earnings through short term leases on the properties however has no employees or operating
systems. MGD will assess individually the commercial properties acquired and either redevelop or divest them at the appropriate time.
The acquisition was funded by: a bank loan of $8,000,000, deferred consideration of $1,000,000 and a cash payment of $2,723,181
(including acquisition costs).
With reference to AASB 3 Business combinations, it has been determined that the acquisition of Bizitay by MGD is not a business
combination and will be accounted for as an asset acquisition. The cost of the acquisition, including the consideration paid to the vendor,
transaction costs, and liabilities assumed, will be allocated across the relative fair value of the assets acquired.
Acquisition of Regional Group Resources Pty Limited (formerly See Resources Pty Ltd)
On 5 June 2020, Regional Group Australia Pty Limited (RGA) completed a share purchase agreement with See Group Holdings Pty Ltd
to acquire 100% of the shares in Regional Group Resources Pty Limited (RGR) (formerly See Resources Pty Ltd ) plus the purchase of
plant and equipment and inventory for the total consideration of $4,775,091. RGR holds three leases over quarrying assets and options
to lease five quarrying assets in New South Wales. RGA will quarry these assets to produce construction materials for use by the group
or to sell to third parties. The acquisition was fully funded by cash.
(c) Summary of acquisition - finalisation of provisional accounting
On 30 June 2019, MAAS Group Holdings Limited entered in share exchange agreement to acquire 100% of the share capital of
Machinery Sales Pty Ltd, Large Industries Pty Ltd, EMS Group, EMS International Group and MAAS Homes Pty Ltd for a total
consideration of $46,844,566. This was part of the broader merger transaction as described in note 2.
For 30 June 2019, this business combination had initially been accounted for on a provisional basis in accordance with AASB 3 Business
combinations. Therefore the fair value of assets acquired and liabilities assumed were initially estimated by the consolidated entity taking
into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business combination
accounting is retrospective, where applicable, to the period the combination occurred and therefore may have an impact on the assets
and liabilities, depreciation and amortisation reported.
67
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 40. Business combinations and asset acquisitions (continued)
The consolidated entity has finalised the accounting for this business combination and in doing so reduced the fair value of inventories
and the fair value of hire machinery and equipment. These adjustments impacted the relevant tax balances and resulted in an increase
in goodwill being recognised. As noted above the finalisation accounting is retrospective and therefore the adjustment impacts the 30
June 2019 financial year. These adjustments had no impact on the 30 June 2019 statement of profit or loss and other comprehensive
income.
Details of the fair value of the net assets acquired as recorded on a provisional basis and the final position as impacting the fair value of
net assets assets acquired as at 30 June 2019, are as follows:
Inventories
Plant & equipment and hire machinery & equipment
Trade and other payables
Current tax liability
Deferred tax liability
Onerous contracts
Other net identifiable assets/(liabilities)
Net identifiable assets acquired
Goodwill
Net assets acquired
Provisional fair
value
$
Movement
$
Final fair value
$
32,400,342
30,212,192
(12,761,109)
(4,807,104)
(7,067,072)
(790,092)
(16,805,735)
20,381,422
(4,444,113)
(2,854,809)
(53,518)
1,152,504
469,366
(140,090)
-
(5,870,660)
27,956,229
27,357,383
(12,814,627)
(3,654,600)
(6,597,706)
(930,182)
(16,805,735)
14,510,762
26,463,144
5,870,660
32,333,804
46,844,566
-
46,844,566
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations, unless it is a combination involving entities or
businesses under common control, regardless of whether equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For
each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of
the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in
profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair
value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified
as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets
acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the
acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling
interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about
the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from
the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
68
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 40. Business combinations and asset acquisitions (continued)
Where the acquisition of entities that are deemed to be under common control occurs then consideration is required to determine the
accounting acquirer. A new entity formed to effect a business combination through the issue of equity interests will not be regarded as
the accounting acquirer, rather one of the combining entities that existed prior to the business combination shall be identified as the
accounting acquirer. The predecessor value method is adopted for business combinations under common control. Under the
predecessor method:
●
●
●
●
assets and liabilities of the acquired entities are recognised at their previous carrying amounts;
no adjustments are made to reflect fair values;
no new assets (including goodwill) and liabilities of the acquired entities are recognised at the date of the business combination;
any non-controlling interest is measured as a proportionate share of the book values of the related assets and liabilities (as
adjusted to achieve uniform accounting policies); and
comparative amounts are restated as if the combination had taken place at the beginning of the earliest comparative period
presented.
●
69
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 41. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 2:
Principal place of business /
Country of incorporation
Ownership interest
2019
2020
%
%
Name
MAAS Group Pty Ltd (formerly MAAS Group Holdings Pty
Ltd)
MAAS Administration Pty Ltd
MAAS Plant Hire Pty Ltd
MAAS Civil Pty Ltd
Hamcon Civil Pty Ltd
Hamcon Hire Pty Ltd
Machinery Sales Pty Ltd (formerly Rookharp Pty Ltd)
Large Industries Pty Ltd
JLE Admin Pty Ltd
JLE Engineering Pty Limited
JLE Group Holdings Pty Ltd
JLE Hire Pty Limited
JLE Manufacturing Pty Limited
JLE Electrical Projects Pty Limited
JLE Utilities Services Pty Limited
MAAS Group Developments Pty Ltd
MAAS Group Properties Durham Park Pty Ltd
Eykan Holdings Pty Ltd
MAAS Group Westwinds Pty Limited
MAAS Group Properties Ulan Pty Ltd
MAAS Group Properties Highlands Pty Ltd
MAAS Group Properties Magnolia Pty Ltd
MAAS Group Properties Bombira Pty Ltd
MAAS Group Properties Southlakes Pty Ltd
MAAS Group Properties Arcadia Pty Limited
Bizitay Pty Ltd
Southlakes Child Care Centre No1 Pty Ltd
Southlakes Child Care Centre No1 Unit Trust
MAAS Homes Pty Ltd (formerly Nigel Bourke Construction
Pty Ltd)
EMS Plant & Equipment Pty Ltd
EMS Group Pty Ltd
EMS Sales Pty Ltd
EMS Labour Hire Pty Ltd
EMS Repairs Pty Ltd
EMS Equipment Hire Pty Ltd
EMS Admin Pty Ltd
Regional Transport Spares Pty Ltd
EMS Mine Site Electrical Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
EMS International Pty Ltd (formerly EMS Vietnam Pty Ltd)
VMS Engineering Company Ltd
EMS Power Solutions UK Ltd
Australia
Vietnam
United Kingdom
Regional Group Australia Pty Ltd
Regional Hardrock (Dubbo) Pty Ltd
Regional Hardrock (Orange) Pty Ltd
Regional Hardrock Unit Trust
Regional Hardrock Pty Ltd
Regional Quarries Australia Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
70
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
-
100%
100%
100%
-
-
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 41. Interests in subsidiaries (continued)
Name
Regional Hardrock West Wyalong Unit Trust
Regional Hardrock (West Wyalong) Pty Ltd
Regional Hardrock Forbes Unit Trust
Regional Hardrock (Forbes) Pty Ltd
Regional Hardrock Gilgandra Unit Trust
Regional Crushing & Screening Pty Ltd
Regional Concrete Australia Pty Ltd
Regional Precast Australia Pty Ltd
Miller Metals Forbes Pty Ltd
Regional Sands Dubbo Unit Trust
Sands Quarry Australia
Regional Group Resources Pty Limited
PT JTech Jasa Pertambangan
Principal place of business /
Country of incorporation
Ownership interest
2019
%
2020
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Indonesia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
100%
-
-
-
-
-
-
-
Unless otherwise stated, the subsidiaries have share capital consisting solely of ordinary shares that are held directly by the
consolidated entity, and the proportion of ownership interests held equals the voting rights held by the consolidated entity.
Summarised financial information
Summarised financial information of the subsidiary with non-controlling interests that are material to the consolidated entity are set out
below:
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Other financial information
Accumulated non-controlling interests at the end of reporting period
Note 42. Events after the reporting period
VMS Engineering Company
Ltd
2020
$
2019
$
8,812,822
11,155,253
940,324
7,618,263
19,968,075
8,558,587
6,208,967
3,951,384
369,461
-
10,160,351
369,461
9,807,724
8,189,126
2,451,929
2,203,029
On 6 October 2020, MAAS Group Holdings Limited (MGH) entered into a share purchase agreement for the acquisition of a business
which operates in the Construction Materials segment. The acquisition of the business is subject to MGH completing an initial public
offering by no later than 31 December 2020. Should the acquisition proceed, the purchase price of $8,977,931 will be settled by the
issue of shares in MGH with a total value of $2,693,373 and a cash payment of $6,284,558.
On 3 June 2020, Regional Hardrock Gilgandra Unit Trust entered into a contract to purchase the land and stock on hand of the Berakee
Quarry for a total consideration of $4,400,000 consisting of a cash settlement of $1,650,000 and vendor financing of $2,750,000 over a
period of 24 months. The contract settled on 17 August 2020 (refer to Commitments note 35).
71
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 42. Events after the reporting period (continued)
On 25 August 2020, MGH entered into and completed a share purchase agreement for the shares in MAAS Group Properties Fairydale
Pty Limited. This company will operate in the real estate segment. Total consideration paid was $100. The company then acquired a
future 43 lot land subdivision at Mudgee for total consideration of $1,632,558.
Subsequent to the reporting date, MGH entered into an option agreement to purchase land for its real estate segment. The option is
required to be exercised if the development application over the land is approved. Upon this occurring MGH is required to pay
$3,200,000 for this land.
No other matter or circumstance has arisen since 30 June 2020 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 in future financial years.
Note 43. Cash flow information
Reconciliation of profit after income tax to net cash from/(used in) operating activities
Profit after income tax expense for the year
20,942,474
9,220,253
Consolidated
2020
$
2019
$
Adjustments for:
Depreciation and amortisation
Net gain on disposal of property, plant and equipment
Net fair value gain on financial assets
Net fair value gain on investment properties
Gain on contingent consideration
Interest income - non-cash
Gain on bargain purchase
Unwinding of interest on vendor financing
Interest on convertible notes
Expenses settled by the issue of convertible notes
Allowance for expected credit losses
Amortisation of borrowing costs
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in contract assets
Decrease/(increase) in inventories
Increase in deferred tax assets
Decrease/(increase) in prepayments
Decrease/(increase) in other operating assets
Increase/(decrease) in trade and other payables
Increase in contract liabilities
Decrease in provision for income tax
Increase in deferred tax liabilities
Increase in employee benefits
Decrease in other provisions
13,711,770
(2,358,369)
(241,580)
(7,125,882)
(1,040,524)
(78,347)
(1,194,898)
593,234
3,293,576
400,000
760,000
44,655
(6,926,729)
(8,365,669)
3,599,156
(1,075,918)
(1,041,875)
25,003
9,158,800
3,678,631
(2,555,823)
3,553,740
573,409
(952,680)
3,509,822
(74,777)
(883,815)
-
-
-
(1,581,656)
-
-
-
-
-
2,082,238
(13,000)
(20,346,180)
(13,959)
29,316
(61,746)
(746,041)
-
(699,391)
300,104
75,071
-
Net cash from/(used in) operating activities
27,376,154
(9,203,761)
Non-cash investing and financing activities - not previously disclosed
72
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 43. Cash flow information (continued)
Dividends credited to related party account
Shares issued to acquire MAAS Group Pty Ltd
Partial settlement of business combinations through the issue of shares
Shares issued to acquire minority interests in Regional Crushing and Screening Pty Ltd
Consolidated
2020
$
2019
$
-
-
-
-
6,145,000
108,746,202
44,641,538
255,537
73
MAAS Group Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 43. Cash flow information (continued)
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July
2018
Net cash from/(used
in) financing
activities
Land held for resale
Dividends credited
to related party loan
account
Acquisition of right-
of-use assets
Changes through
business
combinations (note
40)
Balance at 30 June
2019
Net cash from/(used
in) financing
activities
Loans receivable
offset against loans
payable
Interest capitalised
Bifurcation of
derivative
instrument
Convertible notes –
issued in lieu of
services and loan
conversion
Acquisition plant &
equipment by
means of finance
lease
Changes through
business
combinations (note
40)
Lease contracts on
property entered
into
Amortisation and
present value
unwinding
Balance at 30 June
2020
Bank loans
and Multi-
option facility
$
Vendor
financing and
deferred
consideration
$
Leases
$
Other loans
$
Derivative
instruments -
convertible
notes
$
Loans due to
shareholder
and director
related
entities
$
Convertible
notes
payable
$
Total
$
3,626,000
-
19,158,441
-
4,621,566
-
-
10,291,128
(5,992,439)
-
67,305
-
-
-
5,483,548
-
-
-
-
12,717,805
-
-
18,651,533
1,496,620
13,731,114
10,291,128
44,535,340
1,563,925
-
-
-
-
-
-
-
38,873,535
(4,836,655)
(25,144,256)
(314,108)
13,600,000
-
-
-
-
-
-
-
-
-
-
40,608,768
63,393,209
(8,224,497)
-
(9,528,065)
10,291,128
6,145,000
6,145,000
-
12,717,805
17,141,313
42,773,014
55,670,584
125,792,091
1,365,542
23,544,058
(9,622,201)
-
(9,622,201)
3,293,576
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,585,749
20,045,651
812,664
-
6,779,477
44,655
593,234
-
-
-
-
-
-
-
-
-
-
3,293,576
(1,843,174)
1,843,174
-
-
6,400,000
-
-
-
-
-
-
-
-
-
(6,000,000)
400,000
-
-
-
-
37,585,749
20,858,315
6,779,477
637,889
52,649,304
26,093,358
64,568,974
1,249,817
21,450,402
1,843,174
41,413,925
209,268,954
74
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of MAAS Group Holdings Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of MAAS Group Holdings Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of MAAS Group Holdings Limited, is in accordance with
the Corporations Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Other information
The directors are responsible for the other information. The other information obtained at the date of
this auditor’s report is information included in the Directors’ report and Remuneration report, but does
not include the financial report and our auditor’s report thereon.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
76
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd
K L Colyer
Director
Brisbane, 9 October 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
77