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5
MAXITRANS
INDUSTRIES
LIMITED
ANNUAL
REPORT
2015
Revenue ($m)
Net profit after tax ($m)2
363
352
329
277
202
26.00
17.10
12.33
3.71
6.30
2011
2012
2013
2014
2015
1
2011
2012
2013
2014
2015
FINANCIAL
OVERVIEW
2015
Earnings per share (Basic) (cents)2
Ordinary dividends declared per share (cents)
14.11
9.26
6.70
2.02
8.50
6.00
4.25
3.41
1.50
2.00
1
2011
2012
2013
2014
1
2015
2011
2012
2013
2014
2015
Cover Image A Freighter B-Double logging skel
servicing the Victorian forestry industry. Another
example of the diversity of the Company’s customer
base and the capability of MaxiTRANS’ engineers
to design and manufacture a wide range
of transport equipment.
1 Excludes impairment charges and restructuring costs 2 Underlying NPAT attributable to Equity Holders
Illustrated is a specialised waste ejector trailer. This trailer is filled
at a transfer station with compacted waste. It then transports that
waste to a landfill where it is safely ejected through the rear door
without the trailer having to tip. The unit illustrated is a special,
high capacity “PBS” unit with four axles, part of a large order
for a major waste management company.
MaxiTRANS has a range of designs ideally suited to waste transfer
including its High Volume Side Tipper, “Walking Floor” units,
hook-lift trailers and conventional tippers. Waste transfer
is a growth sector and a focus of MaxiTRANS’ sales efforts.
CHAIRMAN’S
AND
MANAGING
DIRECTOR’S
REVIEW
MaxiTRANS has delivered revenue of $329 million in
FY15, representing a 6.5% reduction from the previous
year. Underlying net profit after tax attributable to
MaxiTRANS equity holders of $6.3 million was in line with
the trading update provided to the market in April 2015.
However, as recently announced, an impairment charge
of $2.58m pre-tax has also been recognised against
the carrying value of the AZMEB intangible assets,
resulting in a reported net profit after tax attributable
to MaxiTRANS equity holders of $4.50 million.
The cyclical downturn experienced in FY14 continued
throughout FY15 together with further contraction in the
resources sector which adversely impacted most
segments of the Australian business.
TRAILER BUSINESS
Australia
Continuing slow Australian economic conditions, further
contraction in the resources sector and prolonged drought
conditions, particularly in Queensland, led to an overall
market decline in trailer registrations in 2015. MaxiTRANS’
trailer sales declined by 9.8% during FY15.
However, against this backdrop, MaxiTRANS increased
its share of the Australian trailer market during the year
through competitive pricing and a superior product offering.
Strong demand for refrigerated vans, combined with
competitive pricing made possible by the continuous
improvement cost reduction program resulted in sales
of Maxi-CUBE vans increasing by 24% in FY15. We expect
these market conditions to continue well into FY16 and this
is currently reflected in the strong order book.
The successful continuous improvement program is now
being extended to MaxiTRANS’ other products where
similar benefits are expected to be achieved.
1
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
CHAIRMAN’S
AND
MANAGING
DIRECTOR’S
REVIEW /
CONTINUED
An aggressive pricing strategy saw market share for
Freighter trailers increase during the year. However,
revenue declined 5% on prior year in what was considered
a declining trailer market.
In May 2015, MaxiTRANS launched the new VersaBOLT®
tipper product at the Brisbane Truck Show, a versatile
and cost-effective product aimed at increasing share
of the tipper market. This innovative product was awarded
‘Trailer of the Show’ and has so far received very positive
feedback from the market. The product is being
commercialised in FY16.
External market conditions most significantly impacted
sales of the tipper product range with sales down 53%
on the prior year. With the outlook for the resources sector
not expected to improve in the foreseeable future and
to ensure an optimal manufacturing model, subsequent
to the end of FY15 the Company decided to close the
Bundaberg manufacturing facility at which the AZMEB
product was produced and relocate production to its
other facilities.
New Zealand
We are delighted our New Zealand business capitalised
on strong market conditions and launched a number
of new Freighter products to achieve revenue growth of
39%, the second consecutive year of double digit growth.
The business is the market leader in refrigerated and
non-refrigerated vans in New Zealand and continued
to gain market share in FY15. Profit growth exceeded
revenue growth due to a favourable product mix and
continued realisation of procurement efficiencies.
PARTS & SERVICE BUSINESS
Revenue for the Parts & Service business decreased
6.7% from the prior year largely due to a weaker
performance from the MaxiPARTS business. However,
net profit before tax declined by 84% principally due to the
poor trading conditions and the product recall impacting
the MaxiPARTS business.
Australia
The MaxiPARTS business experienced a softening in
the truck and trailer parts market in FY15, in particular
in Queensland where further contraction in resources
activity and continued drought has had a significant
economic impact. MaxiPARTS derives approximately
one third of its revenue from Queensland and consequently
those conditions were a significant contributor to the
result. As a result, three under-performing stores in
Queensland were closed during the year. Furthermore,
the wholesale business was also impacted by lower sales
to other trailer manufacturers due to lower trailer sales
across the market, in particular in Western Australia.
MaxiPARTS was also adversely impacted by a product
recall initiated during the year which had a cost impact
of $2.45 million in FY15. The recall was in relation to a
third-party supplied suspension product of which
MaxiPARTS had experienced strong sales in recent years.
An alternate source of supply has been secured and sales
of the product resumed in late FY15.
China
The market for MTC’s refrigerated and dry freight panel
product softened over the year as the sales of heavy duty
trucks in China declined by 33%, particularly in the second
half of FY15. However, we remain confident that this
business will achieve strong growth as supply chains in
China continue to develop to support the growth in local
consumption.
2
The all new Hamelex White VersaBOLT®
tipper was released at the 2015 Brisbane
Truck Show where it won the “Trailer of
the Show” award for its innovative design.
Unlike conventional tippers that are
welded together, the Versabolt is bolted
or riveted together. It can be manufactured
in one location and then shipped in kit
form to its assembly location close to the
customer, thus reducing labour and
freight costs significantly. The VersaBOLT
incorporates a number of patents and a
registered design covering a wide range
of innovative features ranging from
hinges and door locks to its assembly
method. Innovation is a key platform
in MaxiTRANS’ product strategy.
MaxiTRANS New Zealand has been a strong performer in FY15 thanks to its successful strategy of
bringing the Freighter brand to the New Zealand market while also growing its share in the refrigerated
van sector. This has been facilitated by inter-country cooperation between various MaxiTRANS divisions
and also by the recently built, much larger, manufacturing facility in Auckland. Geographic
diversification is an important part of MaxiTRANS’ market strategy.
3
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED CHAIRMAN’S
AND
MANAGING
DIRECTOR’S
REVIEW /
CONTINUED
Whilst we expect the market in Australia in FY16 will
continue to be subdued, the strategies put in place are
aimed at increasing market share in all of its segments
and rigorous management of costs and the continuous
improvement program should deliver significant profit
improvement over FY15.
In our offshore markets, New Zealand should continue to
build on its momentum to further gain market share from
its expanding Freighter and Maxi-CUBE product range.
As Chinese markets start to improve and a number of
new, value added products are launched during the year
in both its local and export markets, our Chinese business
is well positioned to take advantage of improving
market conditions.
Notwithstanding the soft trading conditions experienced,
MaxiTRANS is putting strategies in place to deliver growth
ahead of its markets and capitalise on improving market
conditions.
Ian Davis
Chairman
Michael Brockhoff
Managing Director
DIVIDENDS
The Board has resolved that a final dividend for FY15 will
not be paid. The Company paid an interim fully franked
dividend of 2.0 cents per share in April, 2015, representing
a full year payout ratio of 82% of reported net profit after
tax attributable to MaxiTRANS shareholders (59% of
underlying net profit after tax attributable to MaxiTRANS
shareholders).
OUTLOOK
The Trailer business expects to benefit from the buoyant
market for refrigerated vans, which together with the
continued manufacturing efficiency initiatives will drive
growth of the Maxi-CUBE product in FY16. This is
supported by a strong order book for Maxi-CUBE as we
enter FY16. As product improvements and manufacturing
efficiencies are attained in the Freighter products, the
Company expects to grow market share in this market
segment as well. The launch of the VersaBOLT tipper
in FY16 should also bolster tipper sales in an otherwise
soft market.
The opening of our new Company-owned NSW trailer
dealership in early FY16 will build on the national
distribution network and will create opportunities
to further increase our share of the Australian
trailer market.
With the profit impact of the product recall in FY15 behind
us, we expect an improved contribution from the Parts
& Service business over the outlook period. A number
of new sales initiatives such as the MaxiPARTS online
purchasing portal launched in early FY16 and new, value
added service offerings to the major truck and trailer
fleets should see MaxiPARTS increase share in its market.
Growth in the product range including the relaunch of the
CS suspension product should also benefit the Parts
& Service business during FY16.
4
MaxiTRANS has produced more rigid truck
bodies in the past year to meet demand from
the growing parcel freight industry. The truck
body at right illustrates one unit of a large order
for StarTrack, a division of Australia Post.
MaxiTRANS is servicing emerging growth
sectors in the transport industry.
Illustrated is an extra-long, 26 pallet,
Maxi-CUBE PBS unit. Typically, such
a trailer would only have floor space
for 24 pallets. This PBS unit is also
available up to 28 pallet capacity.
PBS refers to “Performance Base
Standards” which allow trailer/truck
combinations to be larger than usual
provided safety standards are
maintained. PBS units are designed
to increase transport efficiency,
thus reducing net operating costs.
MaxiTRANS is the market leader in the
design and manufacture of PBS units
thanks to its large team of professional
engineers and draftspersons, providing
its customers with a market advantage.
MaxiPARTS has recently moved to an all new, purpose designed warehouse/office complex
in Melbourne. The new facility is designed to be more efficient and to cater for MaxiPARTS’
expanding operations. This new facility is also the management and distribution centre for
the new MaxiPARTS on-line sales portal.
5
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED OFFICES &
OFFICERS
Company Secretary
Mr. C. Richards
Registered Office
346 Boundary Road
Derrimut VIC 3030
Principal Place
of Business
346 Boundary Road
Derrimut VIC 3030
Contact numbers
Tel +61 3 8368 1100
Fax +61 3 8368 1178
Share Registry
Computershare Investor Services
Yarra Falls, 452 Johnston Street
Abbotsford VIC 3067
Solicitors
Minter Ellison
Level 23, Rialto Towers
525 Collins Street
Melbourne VIC 3000
Auditor
KPMG
147 Collins Street
Melbourne VIC 3000
Bankers
Australia and New Zealand
Banking Group Limited
Westpac Banking Corporation
Stock Exchange
The Company is listed on the
Australian Securities Exchange. The
Home Exchange is the Australian
Securities Exchange. The Company’s
home branch of the Australian
Securities Exchange is Melbourne.
Other Information
MaxiTRANS Industries Limited
ACN 006 797 173 incorporated and
domiciled in Australia, is a publicly
listed company limited by shares.
BOARD OF
DIRECTORS
Left to right:
Michael Brockhoff
Managing Director
Ian Davis
Chairman &
Non-Executive Director
Robert Wylie
Non-Executive Director
James Curtis
Deputy Chairman &
Non-Executive Director
Geoffrey Lord
Non-Executive Director
Joseph Rizzo
Non-Executive Director
6
Contents
8
9
28
Financial Summary
Report of the Directors
Directors’ Declaration
Consolidated Statement of Profit or Loss &
Consolidated Statement of Comprehensive Income 29
30
Consolidated Balance Sheet
31
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
33
Notes to the Consolidated Financial Statements 34
68
Independent Auditor’s Report
69
ASX Additional Information
REPORT OF THE
DIRECTORS AND
FINANCIAL REPORT
MaxiTRANS Industries Limited
ACN 006 797 173
and Controlled Entities
7
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED REPORT OF THE DIRECTORS
AND FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2015
Financial Summary
Revenue
$’000
202,476
276,767
362,534
351,968
329,165
EBITDA (excluding significant items)(2)
$’000
11,230
23,549
44,219
30,594
16,247
F2011
F2012
F2013
F2014
F2015
EBIT (excluding significant items)(2)
NPBT (excluding significant items)(2)
NPAT (excluding significant items)(2) (3)
Significant Items
NPAT – attributable to equity holders
Basic EPS
Ordinary dividends/share declared
Depreciation
Amortisation – leased assets
Amortisation – intangibles
Capex additions
Operating cash flow
NTA
Net assets
$’000
$’000
$’000
$’000
$’000
cents
cents
$’000
$’000
$’000
$’000
$’000
5,879
18,116
38,316
25,185
10,604
4,341
16,795
36,358
23,172
4,171
12,334
25,965
17,075
8,079
6,303
(70)
–
–
– (
1,806)(1)
4,171
12,334
25,965
17,075
4,497
2.27
1.50
6.70
4.25
3,697
3,818
874
780
835
780
14.11
8.50
3,309
1,446
1,148
9.26
6.00
2.43
2.00
3,600
3,967
690
550
1,119
1,126
3,888
4,701
6,706
13,239
10,893
9,058
17,567
23,543
16,612
12,138
$’000
64,652
55,033
71,662
75,876
78,380
$’000
91,722
98,695
115,764
121,813
120,612
Interest bearing liabilities
$’000
16,161
29,884
26,218
42,580
47,302
Finance costs
Total bank debt
Net debt/equity
$’000
1,538
1,321
1,958
2,013
2,525
$’000
12,700
26,000
23,013
39,713
45,196
%
11%
3.87
26%
13.71
21%
19.57
31%
12.51
36%
4.20
Interest cover (excluding significant items)(2)
times
(1) Relates to impairment loss on AZMEB intangible assets of $2.58m net of tax.
(2) EBIT, EBITDA, NPBT and NPAT excluding significant items are non-IFRS financial measures, which have not been subject to review or
audit by the Group’s external auditors. These measures are presented to enable understanding of the underlying performance of the
Group by users.
(3) Also referred to as underlying net profit after tax attributable to MaxiTRANS equity holders.
8
REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 30 JUNE 2015
Your directors submit their report together with the
consolidated financial report of MaxiTRANS Industries
Limited (“the Company”) and its subsidiaries (together
referred to as the "Group"), and the Group's interest in joint
ventures for the year ended 30 June 2015 and the auditor’s
report thereon.
Directors
Corporate Governance Statement
The Corporate Governance Statement of the Directors,
and the accompanying Appendix 4G, is separately
lodged with ASX, and forms part of this Directors’ Report.
It may also be found on the Company’s website at
www.maxitrans.com.
The names of directors in office at any time during or since
the end of the financial year are:
Environmental Regulation
Mr Ian R. Davis
Mr James R. Curtis
Mr Michael A. Brockhoff
Mr Geoffrey F. Lord
Mr Robert H. Wylie
Mr Joseph Rizzo
(Chairman since 1994)
(Deputy Chairman since 1994)
(Managing Director since 2000)
(Director since 2000)
(Director since 2008)
(Director since 2014)
Principal Activities
The principal activities of the Group during the year
consisted of the design, manufacture, sale, service and
repair of transport equipment and related components
and spare parts.
There were no changes in the nature of the Group’s
principal activities during the financial year.
Dividends
Dividends paid or declared for payment are as follows:
Ordinary shares
A fully franked dividend of 2.25 cents per share was paid
on 10 October 2014 totalling $4,164,206.
A fully franked dividend of 2.00 cents per share was paid
on 16 April 2015 totalling $3,701,513.
No final divided was proposed by the directors for year
ended 30 June 2015.
State of Affairs
There were no significant changes in the state of affairs
of the Group which occurred during the financial year.
Events Subsequent to Balance Date
There were no material events subsequent to balance date
impacting on the financial statements.
The Group’s environmental obligations are regulated
under Local, State and Federal Law. All environmental
performance obligations are internally monitored and
subjected to regular government agency audit and site
inspections. The Group has a policy of complying with its
environmental performance obligations. No breach of any
environmental regulation or law has been notified to the
Group during or since the year ended 30 June 2015.
Operating & Financial Review
REVIEW OF OPERATIONS
MaxiTRANS operates two types of businesses: the
manufacture and sale of trailing solutions in Australia and
New Zealand (the “Trailer business”); and a trailer service
and truck and trailer parts business down the eastern
seaboard of Australia (“the Parts and Service business”).
The Parts and Service business also has an 80% share in a
Chinese company, Yangzhou Maxi-CUBE Tong Composites
Co Ltd (“MTC”), that manufactures panels for refrigerated
and dry freight trailers in China. MTC sells these products
in both its domestic and export markets.
The cyclical downturn experienced in FY14 continued
throughout FY15 together with further contraction in the
resources sector which adversely impacted most
segments of the Australian business.
Trailer business
The Trailer business has a diverse portfolio of trailing
solutions with market leading brands and a reputation for
high quality with customers. Sales of products through our
dealer network, comprising both owned dealerships and
licenced dealerships provides a full solution including after
sales service and parts to those customers.
Continuing slow Australian economic conditions, further
contraction in the resources sector and prolonged drought
conditions, particularly in Queensland, led to an overall
market decline in trailer registrations in 2015.
9
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
MaxiTRANS’ trailer sales declined by 6.5% during FY15.
However, against this backdrop, notwithstanding the
overall market decline, MaxiTRANS increased its share
of the trailer market during the year through competitive
pricing and a superior product offering.
Vans, Trailers and Rigid Bodies (Australia)
Strong demand for refrigerated vans combined with
competitive pricing made possible by the continuous
improvement cost reduction program resulted in sales
of Maxi-CUBE vans increasing by 24% in FY15. We expect
these market conditions to continue well into FY16 and
this is currently reflected in the strong order book.
The success from the continuous improvement program
has now been extended to MaxiTRANS’ other products
where similar benefits are expected to be obtained.
Notwithstanding an aggressive pricing strategy to gain
market share, sales of Freighter trailers declined 5% on
prior year in what was considered a competitive trailer
market.
Tippers (Australia)
External market conditions most significantly impacted
sales of the tipper product range with sales down 53% on
prior year. With the outlook for equipment requirements
into the resources sector not expected to improve in the
foreseeable future and to ensure an optimal manufacturing
model in Australia, subsequent to the end of FY15, the
Board decided to close its Bundaberg manufacturing
facility at which the AZMEB product was produced and
relocate production to its other manufacturing facilities.
As a result of this outlook, an impairment charge of $2.6m
pre-tax has been made against the carrying value of the
AZMEB intangible assets.
In May 2015, MaxiTRANS launched the new VersaBOLT
tipper product at the Brisbane Truck Show, a versatile and
cost-effective product aimed at increasing share of the
tipper market. This innovative product was awarded
‘Trailer of the Show’ and has so far received positive
feedback from the market. The product is being
commercialised in FY16.
New Zealand
The New Zealand business capitalised on strong market
conditions and launched a number of new Freighter
products in achieving revenue growth of 39%, the second
consecutive year of double digit growth. This has led to the
business continuing to gain market share in FY15 and is
the market leader in refrigerated and non-refrigerated
vans in New Zealand. Profit growth exceeded revenue
growth due to favourable product mix and continued
realisation of procurement efficiencies.
Parts & Service business
The Parts & Service business sells truck and trailer parts
at both a wholesale and retail level in Australia. The retail
business sells parts to road transport operators as well as
truck and trailer service and repair providers mainly along
the eastern seaboard of Australia. The wholesale business
operates in Victoria, Queensland, New South Wales and
Western Australia. Wholesale customers are typically truck
dealers and trailer manufacturers. At the end of FY15,
MaxiPARTS operated 22 wholesale sites and retail stores.
As outlined above, the Parts & Service business also
includes the panel manufacturing operation in China
through our 80% shareholding in MTC.
Revenue for the Parts & Service business decreased 6.7%
from prior year largely due to a weaker performance from
the MaxiPARTS business. However, net profit before tax
declined 84% largely due to the poor trading conditions
and the product recall impacting the MaxiPARTS business.
Australia
The MaxiPARTS business experienced a softening in the
truck and trailer parts market in FY15, in particular in
Queensland where further contraction in resources activity
and continued drought has had a significant economic
impact. The MaxiPARTS business derives approximately
one third of its revenue in Queensland and consequently
those conditions were a significant contributor to the
result. As a result, three under-performing stores in
Queensland were closed during the year. Furthermore,
the wholesale business was also impacted by lower sales
to other trailer manufacturers due to lower trailer sales
across the market, in particular in Western Australia.
The MaxiPARTS business was also adversely impacted by
a major product recall initiated during the year which had
a cost impact of $2.45 million pre-tax. The recall was in
relation to a third party supplied suspension product of
which MaxiPARTS had experienced strong sales in recent
years. An alternate source of supply has been secured and
sales of the product have resumed.
10
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
China
The market for MTC’s refrigerated and dry freight panel
product softened over the year as the sales of heavy duty
trucks in China declined by 33%, particularly in the second
half of FY15. However, we remain confident that this business
will achieve strong growth as supply chains in China continue
to develop to support the growth in local consumption.
FINANCIAL REVIEW
Sales
Total revenue declined by 6.5% to $329 million for FY15,
down from $352 million in FY14.
The Trailer business achieved external sales revenue of
$200 million, a 6.5% decrease over FY14 revenue. A strong
performance from sales of Maxi-CUBE vans and continued
strong growth from the New Zealand business assisted
in mitigating the significant decline in the Australian
tipper business.
Financing costs of $2.5 million were higher than FY14
due to higher net borrowings arising from the lower
trading performance.
Cash Generation & Capital Management
Operating cash flow of $12.1 million was generated during
FY15 which was 27% lower than FY14 due to the weaker
trading results of both the Trailer business and the Parts
& Service business.
Working capital has improved on the prior year with a
particular focus on inventory management and this continues
to be rigorously managed.
Net cash outflows from investing activities were lower than
prior year. The major investment activity during the year
was associated with Project TRANSform. No businesses
were acquired during the year.
Due to the weaker operating cash flows, gearing levels
were higher at the end of FY15 than at the end of FY14.
Net debt for FY15 increased to 36% of equity, up from
31% in FY14.
The Parts & Service business recorded a 6.7% external
revenue decline to finish FY15 with revenue of $127.2 million.
External Financing Facilities
Profit
Reported net profit after tax and significant items
attributable to MXI equity holders was $4.5 million in FY15,
a decrease of 74% on FY14. Underlying net profit after tax
attributable to MXI equity holders was $6.3m, a decrease
of 63%.
Trading margins in the Australian Trailer business further
declined in FY15, due to lower production volumes and
continuing aggressive price competition in the market.
Profitability in the Parts & Service businesses declined
by 84% due to the following:
Lower sales volumes, particularly in the MaxiPARTS
Queensland stores;
Costs associated with the recall of a core suspension
product;
MaxiTRANS has syndicated debt facilities, totalling
$75 million with the ANZ Banking Group and Westpac
Banking Corporation. The facility is used to fund ongoing
business requirements and facilitate funding future growth
opportunities. The facility has both three year and five
year maturities.
These facilities are sufficient to support the business
in its current form.
The facilities have a number of covenant and ratio
requirements and the Group has complied with these
throughout FY15.
In addition, MTC has an RMB 20 million facility with China
Merchant Bank to support its ongoing requirements.
Subsequent to the end of the financial year, ANZ Banking
Group in China replaced China Merchant Bank and has
provided debt facilities guaranteed by the parent company
totalling RMB 25 million to MTC.
Further start-up losses on the greenfields MaxiPARTS
stores in Darwin and Mackay; and
Dividends
Costs of relocating to the new MaxiPARTS Victorian
warehouse.
The total dividend to shareholders for the year was
2.0 cents per share and was fully franked. The total
ordinary dividend of 2.0 cents per share compared with
6.0 cents per share in the prior year and represents an
82% pay out ratio of FY15 net profit after tax attributable
to MXI shareholders.
11
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
RISK
The Group has sought to mitigate this risk by:
The MaxiTRANS Audit & Risk Management Committee, a
sub-committee of the Board, governs the framework and
process for the identification and mitigation of material
business risks. A business risk is the threat that an event
or action will pose to MaxiTRANS' ability to meet its
business objectives or capture an opportunity.
This process requires the business to identify the material
business risks and classify them as between “very high”,
“high”, “medium” or “low” based on the consequences
arising from the occurrence of the risk and the likelihood
of it occurring. The business is then required to develop
action plans to mitigate these risks and determine action
plans in the event they occur.
Operational Risks
The Group has identified the following operational risks
as “very high” in its most recent risk assessment:
The Trailer business, which contributes in excess of
60% of Group revenue and net profit before tax, is
engaged in the manufacture and sale of high value
discretionary capital goods. The success of this business
is largely dependent on the prosperity of the economy
driving freight movement. There is a risk that any
decline in the domestic economy will reduce freight
movement and therefore the demand for new trailing
solutions and expanding customer fleets.
The Group has sought to mitigate this risk by:
ensuring that its products are of consistently
high quality;
expanding into other sectors;
expanding the Service & Parts business to provide
more stable recurring income; and
expanding into international markets including by
improving product offerings in New Zealand and
improving manufacturing capacity in China.
The risk of greater competition from competitors
selling imported trailers in the Australian market
resulting in a potential loss of market share.
ensuring that product quality remains high thereby
protecting its brands;
investigating low cost country sourcing
opportunities to maintain margins;
reducing the manufacturing cost base through
efficiencies to maintain margins; and
minimising lead times to delivery.
Foreign Exchange & Commodities Risk
The Group has exposure to the United States dollar
and the Euro. The Trailer business has exposures to these
currencies arising from the purchase of raw materials and
components consumed in the manufacture of trailers. The
Trailer business also has significant exposure to commodity
price fluctuations for steel and aluminium used in the
manufacturing process. Similarly, the Parts & Service
business also has exposure to these currencies as a
result of importing parts for sale.
The Group has a policy of only hedging foreign currency
cash flow risk utilising forward contracts to protect against
movements in short term committed expenditure. The
Group does not hedge against currency risk arising from
the translation of foreign operations.
Depreciation of the Australian dollar may:
adversely affect the operating cost base and therefore
margins. The Group currently hedges short term
committed foreign currency purchases. Some or
all of this risk may be further mitigated by price
management and efficiency improvement, however;
may also benefit the Group insofar as it also acts
as a potential barrier to entry for imports that may be
uncompetitive in price against locally produced products.
Conversely, an appreciating Australian dollar against
major currencies increases the risk of import competition.
The specialised and customised nature of the trailer
industry, together with demand for short delivery times,
reduces this risk.
12
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
HEALTH & SAFETY
In FY14, the Company commenced a major program to
step change the safety culture of the organisation and
provide a high level of care for all employees.
This program, known as “MaxiSAFE” will initially be
conducted over a three year period at eight principal
sites. It will equip and empower management to drive
improvements in health and safety and engage all
employees in a cultural shift in respect of work health
and safety. The same improvements will be progressively
implemented across all Company sites.
In FY15, the program yielded the lowest injury frequency
rate in a decade and is on track to achieve the aggressive
targets set at the commencement of the program. This has
also had a positive effect on organisational culture and
employee engagement.
The Board currently monitors, and will continue to
monitor, the Group’s health and safety performance
on a monthly basis.
STRATEGY
MaxiTRANS' strategy focuses on the following pillars
that will continue to drive superior shareholder returns:
continue to develop innovative products that improve
our customers’ business performance;
continuing to build the Parts & Service business
through a combination of organic and acquisitive
growth initiatives;
continuing to improve the efficiency and capacity of
manufacturing facilities;
continuing to diversify participation, both in terms of
industry sectors and geographic presence; and
identifying strategic acquisitions that continue to build
upon our vertically integrated business model and
integrating them successfully.
Successfully identifying and integrating acquisitions
The Group continually assesses acquisition opportunities
for their potential to diversify industry sector and
geographical participation, and will pursue those
opportunities as and when suitable, value accretive
targets become available.
Increasing the contribution of the Parts & Service
business
The Parts & Service business comprised 38% of the
Group’s revenue in FY15.
As previously outlined, the Parts business encountered a
number of challenges in FY15. However, notwithstanding
these challenges, the Group still supports the pursuit of
increasing the contribution from the Parts & Service
business.
To support the future growth of the Parts business,
the business opened a new, larger Victorian office
and warehouse on more favourable terms than its
previous facility.
The Group will continue to review future growth
opportunities for the Parts & Service business to satisfy
customer demand.
Improving manufacturing efficiency
MaxiTRANS' has undertaken significant capital investment
in its manufacturing facilities in recent years, including the
construction of a new facility in New Zealand in FY11 and
the completion of construction of the new facility in China
in FY14.
The focus now is optimising the utilisation of these
facilities by:
improving the efficiency of manufacturing
processes;
continually improving the quality of product
produced at these facilities; and
managing the volume and mix of products produced
at each facility.
Consistent with this strategy, the Company has decided
to relocate the production of its AZMEB products to its
other manufacturing facilities and close the Bundaberg
manufacturing facility in FY16 due to the poor outlook
for the resources sector into the foreseeable future.
The Company will continue to manufacture, sell and
support the AZMEB products in Australia and to explore
international opportunities.
13
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Expanding industry sector and geographical coverage
The current product portfolio provides the Company with
opportunities in most freight based industry sectors
throughout Australia.
The Board will continue to identify organic growth and
acquisition opportunities in both the product portfolio and
distribution channels to increase our geographic coverage.
During FY15, a new Company owned trailer dealership
commenced in NSW, replacing its former independent
dealer. The dealership will relocate to new premises in
early FY16 and will provide the company with improved
opportunities to further increase market share.
Business Transformation Program
Recognising the Company’s history of growth through
acquisitions, each with their own legacy systems the
Company has committed to a significant investment in
a business transformation program known as “Project
TRANSform”.
The program will replace thirteen outdated legacy IT
systems with a single enterprise resource planning
system across the business. This will allow the Company
to streamline many business processes, thus creating
operational efficiencies and mitigating business risk.
OUTLOOK
The Trailer business expects to benefit from the buoyant
market for refrigerated vans, which together with the
continued manufacturing efficiency initiatives, will drive
growth of the Maxi-CUBE product in FY16. This is supported
by a strong order book for Maxi-CUBE as we enter FY16.
As product improvements and manufacturing efficiencies
are attained in our Freighter products, we expect to grow
market share in this market segment as well. The launch
of the VersaBOLT tipper in FY16 should also bolster tipper
sales in an otherwise soft market.
The opening of our new Company owned NSW trailer
dealership in early FY16 will build on our national distribution
network and will create opportunities to further increase
our share of the Australian trailer market.
With the profit impact of the product recall in FY15 behind
us, we expect an improved contribution from the Parts &
Service business over the outlook period. A number of new
sales initiatives such as the MaxiPARTS online purchasing
portal launched in early FY16 and new, valued added
service offerings to the large truck and trailer fleets should
see MaxiPARTS increase share in its market. Growth in the
product range including the relaunch of the CS suspension
product should also benefit the Parts & Service business
during FY16.
Whilst we expect the market in Australia in FY16 will
continue to be subdued, the strategies put in place are
aimed at increasing market share in all of our segments
and rigorous management of costs should deliver
significant profit improvement over FY15.
In our offshore markets, New Zealand should continue to
build on its momentum to further gain market share from
its expanding Freighter and Maxi-CUBE product range.
As Chinese markets start to improve and a number of new,
value added products are launched during the year in both
its local and export markets, our Chinese business is well
positioned to take advantage of improving market conditions.
Notwithstanding the soft trading conditions experienced,
MaxiTRANS is putting the strategies in place to deliver
growth ahead of its markets and capitalise on improving
market conditions.
14
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Information of Directors
Mr. Ian R. Davis
Chairman, Independent Non-Executive, Age 70
Qualifications & Experience:
Law degree with honours from University of Melbourne.
Appointed Chairman 1994.
Head of Private Wealth and previously National Chairman of international law firm, Minter
Ellison, Mr. Davis has extensive experience in the corporate and commercial area of law
in which he practices. He was formerly a Non-Executive Director of Redflex Holdings Ltd
from October 2009 to February 2013, and is a former Non-Executive Chairman and
former Non-Executive Director of a number of publicly listed and private companies.
Special Responsibilities:
Chairman of Corporate Governance Committee, Remuneration Committee and
Nomination Committee. Member of Audit & Risk Management Committee.
Interest in Shares:
1,502,193 ordinary shares beneficially held.
Options over Ordinary Shares:
Nil
Mr. James R. Curtis
Deputy Chairman, Non-Executive, Age 80
Qualifications & Experience:
Appointed Deputy Chairman in 1994.
Mr. Curtis was one of the founders of the Group in 1972. He has over 50 years' experience
in the transport equipment industry and is a pioneer of fibreglass road transport
equipment in Australia.
Special Responsibilities:
Member of Corporate Governance Committee, Audit & Risk Management Committee,
Remuneration Committee and Nomination Committee.
Interest in Shares:
24,943,030 ordinary shares beneficially held.
Options over Ordinary Shares:
Nil
Mr. Michael A. Brockhoff
Managing Director, Executive, Age 62
Qualifications & Experience:
Appointed Managing Director in June 2000.
Thirty-eight years' experience in the road transport industry.
Special Responsibilities
Member of Nomination Committee
Interest in Shares:
3,090,172 ordinary shares beneficially held.
Options over Ordinary Shares:
Nil
15
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Mr. Geoffrey F. Lord
Independent Non-Executive Director, Age 70
Qualifications & Experience:
B. Econ. (Honours), M.B.A. (Distinction), ASSA, Fellow of the Australian Institute of
Company Directors. Appointed Director in October 2000.
Chairman and Chief Executive Officer of Belgravia Group. Chairman of Terrain Capital
Ltd. Former chairman of LCM Litigation Fund Pty Ltd. Former Chairman and current
Deputy Chairman of UXC Limited since September 2002. Deputy Chairman of Institute of
Drug Technology Limited since October 1998. Board member of the Melbourne Business
School. Formerly a Director of Northern Energy Corporation from December 2007 to
October 2011. Former Chairman/inaugural member of Melbourne Victory.
Special Responsibilities:
Member of Audit & Risk Management Committee, Corporate Governance Committee,
Remuneration Committee and Nomination Committee.
Interest in Shares:
1,049,604 ordinary shares beneficially held.
Options over Ordinary Shares:
Nil
Mr. Robert H. Wylie
Independent Non-Executive Director, Age 65
Qualifications & Experience:
Fellow of the Institute of Chartered Accountants in Australia, a member of the Institute
of Chartered Accountants of Scotland and a Fellow of the Australian Institute of Company
Directors. Appointed Director in September 2008.
Currently a Director of The Walter + Eliza Hall Institute of Medical Research, Mr. Wylie
has wide ranging experience in professional service in a variety of management roles with
Deloitte. He has previously held senior positions with Deloitte Touche USA LLP. Prior to this,
he was Deputy Managing Partner Asia Pacific. This followed a long career with Deloitte
Australia, including eight years as National Chairman. Mr. Wylie also served on the Global
Board of Directors and the Governance Committee of Deloitte Touche Tohmatsu and
the Global Board of Directors of Deloitte Consulting. Mr Wylie is also a former National
President of the Institute of Chartered Accountants in Australia. Formerly a Director of
Elders Limited from November 2009 to August 2012 and Director of both Centro Properties
Limited and CPT Manager Limited from October 2008 to December 2011.
Special Responsibilities:
Chairman of Audit & Risk Management Committee. Member of Corporate Governance
Committee and Nomination Committee.
Interest in Shares:
21,364 ordinary shares beneficially held.
Options over Ordinary Shares:
Nil
16
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Mr. Joseph Rizzo
Independent Non-Executive Director, Age 59
Qualifications & Experience:
Bachelor of Economics (Monash University), Executive Program (University of Michigan),
Graduate of the Australian Institute of Company Directors (GAICD). Appointed
Non-Executive Director 2014.
Formerly Managing Director of PACCAR Australia Pty Ltd with thirty-five years’ experience
in the road transport equipment manufacturing industry. Mr. Rizzo has a wide knowledge
of the industry generally along with strong manufacturing, sales and marketing experience
in a directly related field. Former Vice President of the Truck Industry Council.
Special Responsibilities:
Member of Audit & Risk Management Committee, Corporate Governance Committee,
Remuneration Committee and Nomination Committee.
Interest in Shares:
50,000 ordinary shares beneficially held.
Options over Ordinary Shares:
Nil
Company Secretaries
Mr. Campbell R. Richards
B. Bus. (Acc), CA
Appointed to the position of Company Secretary in June 2013.
Mr. David Poldrugovac
B. Eco. (Acc), CA
Appointed to the position of Assistant Company Secretary in March 2014.
17
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Details of attendances by directors at Board and committee meetings during the year are as follows:
Directors’
Meetings
Audit & Risk
Management
Committee
Remuneration
Committee
Nomination
Committee (i)
Corporate
Governance
Committee (ii)
Number Number Number Number Number Number Number Number Number Number
eligible attended eligible attended eligible attended eligible attended eligible Attended
to attend
to attend
to attend
to attend
to attend
Ian Davis
James Curtis
Michael Brockhoff
Geoffrey Lord
Robert Wylie
Joseph Rizzo
15
15
15
15
15
15
15
13
15
14
15
15
4
4
–
4
4
4
4
3
–
4
4
4
2
2
2
2
2
2
2
2
2
1
2
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(i) The Nomination Committee did not meet during the year.
(ii) The Corporate Governance Committee meeting for the year ended 30 June 2014 was held in July 2014.
Remuneration Report
Information contained in the Remuneration Report is audited.
Remuneration levels for directors, secretaries and
executives of the Company, and relevant group executives
of the Group (“the directors and senior executives”)
are competitively set to attract and retain appropriately
qualified and experienced directors and senior executives.
The Remuneration Committee obtains independent advice
on the appropriateness of remuneration of non-executive
directors and the Managing Director having regard to trends
in comparative companies and the objectives of the Group’s
remuneration strategy.
The remuneration structures explained below are
designed to attract suitably qualified candidates, reward
the achievement of strategic objectives, and achieve the
broader outcome of creation of value for shareholders.
The remuneration structures take into account:
The capability and experience of the directors and
senior executives;
The directors’ and senior executives’ ability to control
the relevant segment/s’ performance;
The Directors continue to be focussed on ensuring that
MaxiTRANS provides a remuneration structure which
genuinely attracts, motivates and retains executive talent
and aligns the interests of management and shareholders.
The following is a summary of the key elements of the
structure of remuneration for executive directors and senior
management:
the structure of executive director and senior
management remuneration includes a mix of fixed
and performance-linked components;
the mix of total remuneration between fixed and
performance-linked components to average 60%
and 40% respectively;
the performance-linked component of total
remuneration comprises a Short Term Incentive (‘STI’)
scheme and a Long Term Incentive (‘LTI’) scheme; and
the mix of performance-linked remuneration (as a
percentage of total remuneration) between STI and LTI
components to average 15% and 25% respectively;
The Group’s performance including the Group’s
earnings per share; and
The Directors are of the view that the remuneration structure
supports alignment between the Group and shareholders.
The amount of incentives within each director’s and
senior executive’s remuneration.
Each of the components of total remuneration for executive
directors and senior management are described in more
detail below.
18
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Fixed remuneration
Fixed remuneration consists of base remuneration,
including any FBT charges related to employee benefits
which have been salary sacrificed, as well as employer
contributions to superannuation funds.
Remuneration levels are reviewed annually by both the
Remuneration Committee and the Managing Director
through a process that considers individual, segment
and overall performance of the Group. In addition and as
required, external consultants may be engaged to provide
analysis and advice to ensure the directors’ and senior
executives’ remuneration is competitive in the market
place. A senior executive’s remuneration is also reviewed
on promotion.
Performance-linked remuneration
Performance linked remuneration includes both STI's
and LTI's and is designed to reward executive directors
and senior executives for meeting or exceeding specified
objectives. The STI includes an “at risk” incentive provided
in the form of cash.
The LTI is provided in the form of Performance Rights.
The MaxiTRANS Performance Rights Plan (‘PRP’) was
approved by the shareholders at the Annual General
Meeting held on 15 October 2010.
STI
Each year KPIs (key performance indicators) are set for
senior executives and executive directors. The KPIs generally
include measures relating to the Group, the relevant
segment, and the individual, and include financial, people,
customer, strategy and risk measures. The measures are
chosen as they directly align the individual’s reward to the
KPIs of the Group and to its strategy and performance.
The key financial performance objective is “net profit
before tax” compared to budgeted amounts. The non-
financial objectives vary with position and responsibility
and include measures such as achieving strategic
outcomes, safety and environmental performance,
customer satisfaction and staff development.
At the end of the financial year the actual performance
of the Group, the relevant segment and individual is measured
against the KPIs set at the beginning of the financial year.
The method of assessment was chosen as it provides an
objective assessment of the individual’s performance.
In line with the Group’s philosophy of rewarding employees
for performance, STI's based on the achievement of KPIs
are also available to staff other than executive directors
and senior management.
LTI
The LTI scheme available to executive directors and to
senior management is based on the annual grant of a
specified number of Performance Rights which can be
converted by executive directors and senior management
into a specified number of ordinary shares in the Company.
Performance Rights will vest and will be able to be
exercised upon the achievement of specified long term
performance targets in a period not less than three years
after the date upon which the Performance Rights are
granted to executive directors and senior management
provided they remain in the employment of the Group
throughout that period.
Traditionally, the Board has set a long term incentive
target for management to achieve an increase in the
Group's Return on Invested Capital ('ROIC'). During
financial year 2015 the Board introduced a secondary LTI
target based on Earnings Per Share growth. Both targets
are weighted equally and operate independently of the
other. The parameters that have been set by the Board
are set out in Note 15.
If the minimum ROIC target is reached, 50% of the
Performance Rights will vest. The percentage of
Performance Rights that vest increases on a sliding
scale once the minimum target is reached. 100% of the
Performance Rights will vest where the target is fully
achieved or exceeded. No director or senior executive
has entered a hedging arrangement with respect to the
value of unvested Performance Rights.
The Earnings Per Share target represents an absolute
hurdle with no sliding scale for achievement below
the target.
19
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Other benefits
Non-executive directors are not entitled to receive
additional benefits as a non-cash benefit. Non-executive
directors may receive a component of their directors’ fees
as superannuation.
Senior executives can receive additional benefits as
non-cash benefits, as part of the terms and conditions
of their appointment. Other benefits typically include
payment of superannuation, motor vehicles, telephone
expenses and allowances, and where applicable, the
Group pays fringe benefits tax on these benefits.
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for
shareholder wealth, the remuneration committee have
regard to the indices highlighted in the table on page 23.
Net profit before tax is considered as one of the financial
performance targets in setting the STI.
Service agreements
It is the Group’s policy that service contracts for executive
directors and senior executives be unlimited in term but
capable of termination on up to six months notice and
that the Group retains the right to terminate the contract
immediately, by making payment of up to twelve months’
pay in lieu of notice.
The Group has entered into service contracts with each
executive director and senior executive that entitle those
executives to receive, on termination of employment, their
statutory entitlements of accrued annual and long service
leave, together with any superannuation benefits.
The service contract outlines the components of
remuneration paid to the executive directors and senior
executives but does not prescribe how remuneration
levels are modified year to year. Remuneration levels
are reviewed each year to take into account cost-of-living
changes, any change in the scope of the role performed
by the senior executive and any changes required to
meet the principles of the remuneration policy including
performance related objectives if applicable.
Mr Michael Alan Brockhoff, Managing Director, has a
contract of employment with the Company dated 3 May 2000.
The contract specifies the duties and obligations to be
fulfilled by the Managing Director and provides that the
Board and Managing Director will early in each financial
year, consult and agree objectives for achievement during
that year. The service contract can be terminated either by
the Company or Mr Brockhoff providing six months notice.
The Company may make a payment in lieu of notice of six
months, equal to base salary, motor vehicle allowance
and superannuation. This payment represented market
practice at the time the terms were agreed. The Managing
Director has no entitlement to a termination payment in
the event of removal for misconduct or breach of any
material terms of his contract of employment.
Mr Campbell Richards, Company Secretary, has a contract
of employment with the Company dated 3 May 2013.
The contract can be terminated either by the Company or
Mr Richards providing three months notice. The Company
may make a payment in lieu of notice of three months,
equal to base salary and superannuation.
Non-executive directors
Total remuneration for all non-executive directors, last
voted upon by shareholders at the 2012 AGM, is not to
exceed $600,000 per annum and directors' fees are set
based on advice from external advisors with reference to
fees paid to other non-executive directors of comparable
companies. Directors’ base fees (inclusive of superannuation)
for the year were $75,000 per annum. The Chairperson
received $140,000 per annum. Non-executive directors
do not receive performance related remuneration and are
not entitled to either a STI or LTI. Directors’ fees cover all
main board activities and membership or chairing of all
committees. Non-executive directors are not entitled to
any retirement benefits.
Services of remuneration consultant
In keeping with the above policies, the Remuneration
Committee engaged Mercer as remuneration consultant
to review the amount of non-executive director and senior
executive remuneration during the year. Mercer was paid
$7,088 for the remuneration recommendations.
Remuneration recommendations regarding senior
executives were provided directly to the Remuneration
Committee. A declaration was received from Mercer
as part of its report that advice provided was made free
from undue influence of senior executives.
20
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Directors’ and executive officers’ remuneration
Details of the nature and amount of each major element of remuneration of each director of the Company and other key
management personnel of the Group:
Primary
Post
Equity
Other
Total
Salary
& fees (i)
$
STI
(ii)
$
Non-cash
benefits Super
$
$
Year
PR's
(iii)
$
2015
127,854
2014
128,146
2015
68,493
2014
68,650
2015
68,493
2014
68,650
2015
40,000
2014
40,000
2015
40,000
2014
3,574
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12,146
11,854
6,507
6,350
6,507
6,350
35,000
35,000
35,000
330
–
–
–
–
–
–
–
–
–
–
(iv)
$
–
–
20,000
–
–
–
–
–
–
–
Proportion of
remuneration
performance
related
Value of
PR's as
proportion of
remuneration
$
%
%
140,000
140,000
95,000
75,000
75,000
75,000
75,000
75,000
75,000
3,904
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
DIRECTORS
Non-executive
Mr I Davis
Chairman
Mr J Curtis (v)
Mr G Lord
Mr R Wylie
Mr J Rizzo
Executive
Mr M Brockhoff
2015
651,461
–
3,627
64,201 156,641 50,229
926,159
Managing Director
2014
657,407 175,000
20,169
78,842
181,159 58,261
1,170,838
16.9%
30.4%
16.9%
15.5%
EXECUTIVES
Mr C Richards
2015
351,360
Chief Financial Officer
2014
338,457
–
–
–
–
31,500 36,886
29,702
16,204
–
–
419,746
384,363
8.8%
4.2%
and Company Secretary
Mr A Wibberley
2015
300,293
–
2,291
30,633 67,297 37,451
Group General Manager
2014
253,974 39,360
27,488
27,690
70,309
9,543
437,965
428,364
15.4%
26.5%
– Manufacturing
Mr P Buttler
2015
231,469 28,253 14,258 26,086 57,324 21,636
General Manager
2014
228,028 34,602
34,220
23,587
57,475
6,567
379,026
384,479
21.9%
23.9%
– Ballarat
MaxiTRANS Australia Pty Ltd
Mr A McKenzie (vi)
2015
64,437
Group General Manager
2014
–
– Sales and Distribution
Mr S Harkin (vii)
2015
75,880
Group Supply Manager
2014
–
–
–
–
–
–
–
6,112
–
5,267
7,171
–
–
–
–
–
–
4,428
–
4,935
–
74,977
–
93,253
–
–
–
–
–
8.8%
4.2%
15.4%
16.4%
14.7%
14.9%
–
–
–
–
21
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Primary
Post
Equity
Other
Total
(iv)
Salary
& fees (i)
$
STI
(ii)
$
Non-cash
benefits Super
$
$
Year
PR's
(iii)
$
$
$
%
%
Proportion of
remuneration
performance
related
Value of
PR's as
proportion of
remuneration
EXECUTIVES (continued)
Mr N Zantuck (viii)
2015
214,971
General Manager
2014
200,403
– Vic Branch,
MaxiTRANS Australia Pty Ltd
Mr P Loimaranta
2015
275,890
General Manager
2014
264,658
– MaxiPARTS Pty Ltd
–
–
–
–
–
–
–
–
24,348
5,431
26,621
20,320
56,903
31,086
271,371
308,712
2.0%
18.4%
2.0%
18.4%
28,423 68,314 31,099
26,818
69,916
30,920
403,726
392,312
16.9%
17.8%
16.9%
17.8%
Notes in relation to table of directors’ and executive officers' remuneration
(i)
Includes the accrual of short-term statutory entitlements.
(ii)
STI entitlement is 15% of total remuneration for each of the individuals listed above. The short-term cash incentives
disclosed above are for performance for the 30 June 2014 financial year using the criteria set out in the Remuneration
Report. The amounts were determined after performance reviews were completed. The proportion of STI entitlements
which vested during the year were as follows based on the operating performance of the relevant business units to
which each individual belongs:
Mr P Buttler (50%).
The balance of STI entitlements was forfeited.
(iii) The fair value of performance rights (PR's) is calculated at the date of grant using the Monte Carlo simulation
model and allocated to each reporting period evenly over the period from grant date to vesting date, adjusted for
any changes in the probability of performance and service targets being achieved. The value disclosed is the portion
of the fair value recognised in this reporting period. In valuing the PR's, market conditions have been taken into
account. Further details in respect of PR's are contained on the following page of the Remuneration Report.
Details of PR’s vested during the period are contained in Note 15 – Share Based Payments.
(iv)
Includes the accrual of long-term statutory entitlements.
(v)
Other remuneration relates to the provision of consulting services to the Group.
(vi) Mr A McKenzie was appointed 20 April 2015.
(vii) Mr S Harkin was appointed 9 February 2015.
(viii) Mr N Zantuck resigned effective 27 May 2015. All PR’s held by Mr Zantuck at that time were cancelled.
22
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Analysis of share-based payments granted as remuneration
Details of the vesting profile of the PR's granted as remuneration to each of the Company directors and other key
management personnel of the Group during the reporting period are detailed below.
Directors
Mr M Brockhoff
Company executives
Mr C Richards
Consolidated entity executives
Mr A Wibberley
Mr P Buttler
Mr N Zantuck
Mr P Loimaranta
PR's granted
Fair value at
(no.)
Grant date
grant date ($)
Vesting date
Expiry date
437,113
31 Aug. 2014*
0.7683
31 Aug. 2017
31 Aug. 2021
196,456
31 Aug. 2014
0.7683
31 Aug. 2017
31 Aug. 2021
192,741
154,019
130,456
177,670
31 Aug. 2014
31 Aug. 2014
31 Aug. 2014
31 Aug. 2014
0.7683
0.7683
0.7683
0.7683
31 Aug. 2017
31 Aug. 2021
31 Aug. 2017
31 Aug. 2021
31 Aug. 2017
31 Aug. 2021
31 Aug. 2017
31 Aug. 2021
* PR's were issued to Mr Brockhoff subject to the approval of shareholders at the Annual General Meeting held on 24 October 2014.
The 2011 PR’s granted to the Company directors and key management personnel had a vesting date of November 2014.
53% of these PR’s vested during the current year and were exercised by the holders of the PR’s.
All PR's expire on the earlier of their expiry date or termination of the individual's employment. In order for PR's to vest,
holders must continue to be in the employment of the Group until vesting date. The PR's vest three years after the date they
were issued, subject to the satisfaction of performance hurdles. PR's may only be exercised during a four year period after
they have vested. Details of the performance criteria are included in the discussion on LTI's.
The estimated maximum value of PR's on issue for future years is the current share price. This is subject to future
movements in the share price. The estimated minimum value is $nil.
Unissued Shares Under Rights
At the date of this report there are no unissued ordinary shares of the Company relating to vested PR's.
Consolidated Results and Shareholder Returns
2015
2014
2013
2012
2011
Net profit/(loss) attributable
to equity holders of the parent
$4,497,000
$17,075,000
$25,965,000
$12,334,000
$4,171,000
Basic EPS
2.43¢
9.26¢
14.11¢
6.70¢
2.27¢
Dividends declared
$3,701,513
$11,104,542
$15,639,438
$7,819,719
$2,759,901
Dividends declared per share
2.00¢
Share price
39.5¢
6.00¢
97.0¢
8.50¢
$1.065
4.25¢
61.5¢
1.50¢
23.0¢
23
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Directors’ and executives’ holdings of shares
For key management personnel, the movements in shares held directly, indirectly or beneficially at the reporting date in the
Company are set out below:
Held at
1 July 2014
3,138,338
1,502,193
24,380,030
1,049,604
21,364
–
126,522
140,447
–
119,716
Held at
1 July 2013
2,642,500
1,502,193
24,205,030
1,049,604
21,364
–
–
–
–
Purchases
Sales
Held at
30 June 2015
451,834
–
563,000
–
–
50,000
162,123
170,083
145,321
142,085
500,000
–
–
–
–
–
27,929
89,023
–
–
3,090,172
1,502,193
24,943,030
1,049,604
21,364
50,000
260,716
221,507
145,321
n/a
Purchases
Sales
Held at
30 June 2014
495,838
–
175,000
–
–
–
126,522
140,447
119,716
–
–
–
–
–
–
–
–
–
3,138,338
1,502,193
24,380,030
1,049,604
21,364
–
126,522
140,447
119,716
2015 Shares
MaxiTRANS Industries Limited
Directors:
Mr M Brockhoff
Mr I Davis
Mr J Curtis
Mr G Lord
Mr R Wylie
Mr J Rizzo
Executives:
Mr P Loimaranta
Mr A Wibberley
Mr P Buttler
Mr N Zantuck
2014 Shares
MaxiTRANS Industries Limited
Directors:
Mr M Brockhoff
Mr I Davis
Mr J Curtis
Mr G Lord
Mr R Wylie
Mr J Rizzo
Executives:
Mr P Loimaranta
Mr A Wibberley
Mr N Zantuck
End of Remuneration Report
24
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Audit and Risk Management Committee
As at the date of this report, the Company had an Audit and Risk Management Committee of the Board of Directors that met
four times during the year. The details of the functions and memberships of the committees of the Board are presented in the
Corporate Governance Statement.
Indemnity
With the exception of the matters noted below the Company has not, during or since the end of the financial year, in respect
of any person who is or has been an officer or auditor of the Company or a related body corporate:
(i)
(ii)
Indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer, including
costs and expenses in successfully defending legal proceedings; or
Paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer for the
costs or expenses to defend legal proceedings.
The Group has entered into a contract of insurance in relation to the indemnity of the Group’s directors and officers. The
insurance policy relates to claims for damages, judgements, settlements or costs in respect of wrongful acts committed by
directors or officers in their capacity as directors or officers but excluding wilful, dishonest, fraudulent, criminal or malicious
acts or omissions by any director or officer. The directors indemnified are those existing at the date of this report. The officers
indemnified include each full time executive officer and secretary.
During the financial year, the Group paid premiums of $43,971 (2014: $44,006) in respect of directors’ and officers’ liability
insurance contracts.
Clause 98 of the Company’s constitution contains indemnities for officers of the Company.
The Company has entered into a deed of protection with each of the directors to:
(i)
Indemnify the director to ensure that the director will have the benefit of the indemnities after the director ceases
being a director of any group company;
(ii)
Insure the director against certain liabilities after the director ceases to be a director of any group company; and
(iii)
Provide the director with access to the books of group companies.
Share Options
Share options granted to directors and highly remunerated officers
No options were granted to any of the directors or the five most highly remunerated executives of the Company or Group
as part of their remuneration during or since the end of the financial year.
Shares Issued on the Exercise of Options
No options were exercised during the financial year.
Further details on the Group's Performance Rights Plan are detailed in Note 15 to the consolidated financial statements
and in the Remuneration Report.
25
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Non-Audit Services
During the year, KPMG, the Company’s auditor, performed certain other services in addition to their statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and in accordance with written
advice provided by resolution of the Audit and Risk Management Committee, is satisfied that the provision of those non-audit
services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
All non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed
by the Audit and Risk Management Committee to ensure they do not impact the integrity and objectivity of the auditor; and
The non-audit services provided do not undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work,
acting in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing
risks and rewards.
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is included in,
and forms part of this Report of the Directors on page 27.
Details of the amounts paid to the auditor of the Company, KPMG, for audit and non-audit services provided during the year
are set out below.
Remuneration of Auditor
Remuneration of the auditor of the Group for:
KPMG Australia:
– auditing and reviewing the financial statements
– other services (taxation & advisory)
Overseas KPMG Firms:
– auditing and reviewing financial statements
– other services (taxation, advisory & due diligence)
Total
Proceedings on Behalf of Company
Consolidated
2015
$
2014
$
286,200
55,590
229,900
225,497
341,790
455,397
76,350
28,916
105,266
65,503
7,897
73,400
447,056
528,797
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those
proceedings. The Company was not a party to any such proceedings during the year.
26
REPORT OF THE DIRECTORS (cont)
FOR THE YEAR ENDED 30 JUNE 2015
Rounding of Accounts
The parent entity has applied the relief available to it in ASIC Class Order 98/100 dated 10 July 1998 and, accordingly, amounts
in the financial statements and Report of the Directors have been rounded to the nearest thousand dollars unless specifically
stated to be otherwise.
This report has been made in accordance with a resolution of the Board of Directors.
Mr. Ian Russell Davis, Director
Mr. Michael Alan Brockhoff, Director
Dated this 21st day of August 2015
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act
2001
To: the directors of MaxiTRANS Industries Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2015 there
have been:
(i)
No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation
to the audit; and
(ii) No contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Melbourne
21 August 2015
Tony Romeo
Partner
KPMG, an Australian partnership and member firm of the KPMG
network of independent member firms affiliated with KPMG
Liability limited by a scheme approved under Professional
International Cooperative ("KPMG International"), a Swiss entity.
Standards Legislation
27
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2015
In the opinion of the directors of MaxiTRANS Industries Limited (“the Company”):
(a) the consolidated financial statements and notes as set out on pages 29 to 67, are 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 2015 and of its performance for the
financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
There are reasonable grounds to believe that the Company and the group entities identified in Note 19 will be able to meet
any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between
the Company and those group entities pursuant to ASIC Class Order 98/1418.
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive
officer and chief financial officer for the financial year ended 30 June 2015.
The directors draw attention to Note 1 to the consolidated financial statements, which includes a statement of compliance
with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors.
Mr. Ian Russell Davis, Director
Mr. Michael Alan Brockhoff, Director
Dated this 21st day of August 2015
28
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Sale of goods
Rendering of services
Raw materials and consumables used
Interest income
Employee expenses
Depreciation and amortisation expenses
Impairment loss on intangible assets
Finance costs
Other expenses
Share of net profits of joint ventures accounted
for using the equity method
Profit before income tax
Income tax expense
Profit for the year
Profit attributable to:
Equity holders of the company
Non-controlling interests
Note
6,7
7
9
20
Consolidated
2015
$’000
317,678
11,487
2014
$’000
338,516
13,452
(200,820)
(212,227)
97
(82,924)
(5,643)
(2,580)
(2,525)
(30,268)
997
5,499
91
(83,584)
(5,409)
–
(2,013)
(27,125)
1,471
23,172
3(a)
(1,036)
(6,027)
4,463
17,145
4,497
(34)
17,075
70
Earnings per share for profit attributable to the ordinary equity holders of the company:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
12
12
2.43¢
2.43¢
9.26¢
9.16¢
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the year
4,463
17,145
Other comprehensive income
Items that may subsequently be re-classified to profit or loss:
Net exchange difference on translation of financial
statements of foreign operations
Other sundry movements
Items that will never be re-classified to profit or loss:
Revaluation of land and buildings
Related tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income attributable to:
Equity holders of the company
Non-controlling interests
597
(81)
3,127
(917)
2,726
7,189
1,264
(6)
2,583
(775)
3,066
20,211
6,992
197
20,167
44
The consolidated statement of profit or loss and consolidated statement of comprehensive income is to be read in conjunction
with the accompanying notes to the consolidated financial statements.
29
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
CONSOLIDATED
BALANCE SHEET
FOR THE YEAR ENDED 30 JUNE 2015
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Other
Total Current Assets
Non-Current Assets
Investment in joint venture
Property, plant & equipment
Intangible assets
Deferred tax assets
Other
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Current tax liability
Provisions
Total Current Liabilities
Non-Current Liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Provisions
Other
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained earnings
Equity attributable to equity holders of the Company
Non-controlling interest
Total Equity
Note
4
5
3(c)
6
7
3(b)
8
9
3(c)
10
9
3(b)
10
Consolidated
2015
$’000
4,345
42,961
53,735
1,410
1,790
2014
$’000
5,041
43,031
54,587
–
2,418
104,241
105,077
3,926
73,354
42,232
933
1,156
3,994
63,197
45,938
–
818
121,601
113,947
225,842
219,024
43,216
5,266
362
12,694
61,538
42,036
260
1,152
244
43,692
105,230
41,040
4,399
231
10,608
56,278
38,181
1,561
1,070
121
40,933
97,211
120,612
121,813
11
56,386
15,583
46,805
56,386
13,069
50,457
118,774
119,912
1,838
1,901
120,612
121,813
The consolidated balance sheet is to be read in conjunction with the notes to the consolidated financial statements.
30
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Issued
capital
$’000
Asset
revaluation
reserve1
$’000
Retained
earnings
$’000
Non-
controlling
interest
$’000
Other
reserves2
$’000
Total
$’000
Note
Balance at 1 July 2013
56,386
8,028
48,142
1,857
1,351
115,764
Comprehensive income for the year
Profit for the year
Other comprehensive income
Net exchange differences on translation of
financial statements of foreign operations
Revaluation of land and buildings
Other sundry movements
Total comprehensive income for the year
Transactions with owners recorded
directly in equity
Dividends to equity holders
Share-based payment transactions
13
15
Total transactions with owners
–
–
–
–
–
–
–
–
–
17,075
70
–
17,145
–
1,808
–
–
–
–
1,808
17,075
–
–
–
(14,760)
–
(14,760)
(26)
1,290
1,264
1,808
(6)
–
(6)
1,284
20,211
–
(14,760)
598
598
598
(14,162)
–
–
44
–
–
–
Balance at 30 June 2014
56,386
9,836
50,457
1,901
3,233
121,813
1. Asset revaluation reserve
The asset revaluation reserve includes the net revaluation increments arising from the revaluation of land and buildings.
2. Other reserves
Other reserves comprises the foreign currency translation reserve, share based payment reserve and hedging reserve.
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated financial statements.
31
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Issued
capital
$’000
Asset
revaluation
reserve1
$’000
Retained
earnings
$’000
Non-
controlling
interest
$’000
Other
reserves2
$’000
Total
$’000
Note
Balance at 1 July 2014
56,386
9,836
50,457
1,901
3,233
121,813
4,497
(34)
–
4,463
Comprehensive income for the year
Profit for the year
Other comprehensive income
Net exchange differences on translation of
financial statements of foreign operations
Revaluation of land and buildings
Other sundry movements
Total comprehensive income for the year
Transactions with owners recorded
directly in equity
Dividends to equity holders
Share-based payment transactions
13
15
Total transactions with owners
–
–
–
–
–
–
–
–
–
–
2,210
–
–
–
–
2,210
4,497
–
–
–
(7,866)
(283)
(8,149)
231
–
–
197
(260)
–
(260)
366
–
(81)
285
597
2,210
(81)
7,189
–
19
19
(8,126)
(264)
(8,390)
Balance at 30 June 2015
56,386
12,046
46,805
1,838
3,537
120,612
1. Asset revaluation reserve
The asset revaluation reserve includes the net revaluation increments arising from the revaluation of land and buildings.
2. Other reserves
Other reserves comprises the foreign currency translation reserve, share based payment reserve and hedging reserve.
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated financial statements.
32
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers & employees
Interest received
Interest & other costs of finance paid
Income tax paid
Consolidated
Note
2015
$’000
2014
$’000
360,828
(341,211)
97
(2,525)
(5,051)
384,473
(352,451)
91
(2,013)
(13,488)
Net Cash Provided by/(Used in) Operating Activities
21(a)
12,138
16,612
Cash Flows from Investing Activities
Payments for property, plant & equipment
Dividends received
Proceeds from sale of property, plant & equipment
Acquisition of business
Net Cash Provided by/(Used in) Investing Activities
Cash Flows from Financing Activities
Proceeds from borrowings
Payment of finance lease liabilities
Dividends paid
Net Cash Provided by/(Used in) Financing Activities
Net increase/(decrease) in cash
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
–
13
(10,026)
1,065
218
(13,239)
1,307
1,564
(3,451)
(8,743)
(13,819)
5,219
(1,184)
(8,126)
(4,091)
(696)
5,041
4,345
17,383
(1,430)
(14,760)
1,193
3,986
1,055
5,041
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial statements.
33
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
MaxiTRANS Industries Limited (the ‘Company’) is
a company domiciled in Australia and its registered
office is 346 Boundary Road, Derrimut, Victoria.
The consolidated financial statements of MaxiTRANS
Industries Limited as at and for the year ended
30 June 2015 comprise the Company and its subsidiaries
(together referred to as the ‘Group’) and the Group’s
interest in joint ventures and jointly controlled entities.
The Group is a for-profit entity.
Basis of preparation
The financial report is a general purpose financial
report which has been prepared in accordance with
Australian Accounting Standards (‘AASBs’) adopted by
the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001. The financial report
also complies with International Financial Reporting
Standards ('IFRSs') adopted by the International
Accounting Standards Board ('IASB').
The financial report has been prepared on an accruals
basis and is based on historical costs and does not take
into account changing money values or, except where
stated, current valuations of non-current assets. Cost
is based on the fair values of the consideration given in
exchange for assets. These accounting policies have
been consistently applied to all periods presented in the
consolidated financial report by each entity in the Group
and are consistent with those of the previous year.
These consolidated financial statements are presented
in Australian dollars, which is the Company's
functional currency.
The Group has applied the relief available to it in ASIC
Class Order 98/100 dated 10 July 1998 and, accordingly,
amounts in the financial statements and Report of the
Directors have been rounded to the nearest thousand
dollars unless specifically stated to be otherwise.
The financial report was approved by the board of
directors on 21 August 2015.
Standards taking effect from 1 July 2015 and later
Revenue from contracts with customers
(Amendments to AASB 15) – applicable for annual
reporting periods beginning on or after 1 January 2017
– The standard contains a single model that
applies to contracts with customers and two
approaches to recognising revenue: at point in
time or over time. The model features a contract-
based five-step analysis of transactions to determine
whether, how much and when revenue is recognised.
IFRS 9 Financial Instruments – applicable for annual
reporting periods beginning on or after 1 January 2018
– The new standard includes revised guidance on the
classification and measurement of financial assets,
including a new expected credit loss model for
calculating impairment, and supplements the
new general hedge accounting requirements
previously published. It supersedes AASB 9
(issued in December 2009 – as amended) and
AASB 9 (issued in December 2010 – as amended).
The Group expect to adopt these standards in the
financial year they apply. The financial impact of
adopting the new or amended standards has not
yet been determined.
The following is a summary of the material accounting
policies adopted by the Group in the preparation of the
financial report.
(a) Principles of consolidation
The consolidated financial report comprises the
financial statements of MaxiTRANS Industries
Limited and all of its subsidiaries. A subsidiary
is any entity controlled by MaxiTRANS Industries
Limited or any of its subsidiaries. Control exists
where MaxiTRANS Industries Limited is exposed
to, or has rights to, variable returns from its
involvement with the entity and has the ability to
affect those returns through its power over the
entity. A list of subsidiaries is contained in Note 18
to the financial statements.
All inter-company balances and transactions
between entities in the Group, including any
unrealised profits or losses, have been eliminated
on consolidation.
Business combinations are accounted for using the
acquisition method as at the acquisition date, which
is the date on which control is transferred to the Group.
34
––
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Costs related to the acquisition, other than those
associated with the issue of debt or equity securities,
that the Group incurs in connection with a business
combination are expensed as incurred.
Any contingent consideration payable is recognised
at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not
remeasured and settlement is accounted for within
equity. Otherwise, subsequent changes to the fair
value of the contingent consideration are recognised
in profit or loss.
Where subsidiaries have entered or left the Group
during the year, their operating results have been
included from the date control was obtained or until
the date control ceased. The accounting policies of
subsidiaries have been changed when necessary to
align them with the policies adopted by the Group.
Joint ventures are those entities for which the Group
has joint control, but not control, whereby the Group
has rights to the net assets of the arrangement
rather than rights to its assets and obligations
for its liabilities. The financial statements include
the Group’s share of the total recognised gains and
losses of the joint venture on an equity accounted
basis, from the date that joint control commences
until the date that joint control ceases.
When the Group’s share of losses exceeds its
interest in an associate, the Group’s carrying
amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the
Group has incurred legal or constructive obligations
or made payments on behalf of a joint venture.
foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are
recognised in the consolidated statement of profit
or loss. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign
currency are translated using the exchange rate at
the date of the transaction. Non-monetary assets
and liabilities denominated in foreign currencies
that are stated at fair value are translated into
Australian dollars at foreign exchange rates ruling
at the dates the fair value was determined.
(ii) Financial statements of foreign operations
The assets and liabilities of foreign operations,
including goodwill and fair value adjustments
arising on consolidation, are translated into
Australian dollars at foreign exchange rates ruling
at the reporting date. The revenues and expenses
of foreign operations are translated into Australian
dollars at rates approximating the foreign exchange
rates ruling at the dates of the transactions. Foreign
exchange differences arising on translation are
recognised directly in a separate component of equity.
(c) Inventories
Inventories are valued at the lower of cost and net
realisable value. Costs are assigned on a weighted
average basis and include direct materials, direct
labour and an appropriate proportion of variable
and fixed factory overheads, based on the normal
operating capacity of the production facilities.
Net realisable value is determined on the basis
of each inventory line’s normal selling pattern.
(d) Property, plant and equipment
Unrealised gains arising from transactions with
associates are eliminated to the extent of the
Group’s interest in the joint venture.
(i) Owned assets
Land and buildings
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated
at the foreign exchange rate ruling at the date of
the transaction. Monetary assets and liabilities
denominated in foreign currencies at the reporting
date are translated into Australian dollars at the
Property whose fair value can be measured reliably
is carried at a revalued amount, being its fair value
at the date of the revaluation less any subsequent
accumulated depreciation and subsequent
accumulated impairment losses. Revaluations are
made with sufficient regularity to ensure that the
carrying amount does not differ materially from that
which would be determined using fair value at the
reporting date.
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(ii) Leased assets
Independent valuations were obtained at 30 June 2015
in relation to the majority of land and buildings.
These were considered by the directors in
establishing revaluation amounts.
If an asset’s carrying amount is increased as a
result of a revaluation, the increase is credited
directly to equity under the heading of Asset
Revaluation Reserve. However, the increase is
recognised in profit or loss to the extent that it
reverses a revaluation decrease of the same asset
previously recognised in profit or loss. If an asset’s
carrying amount is decreased as a result of a
revaluation, the decrease is recognised in profit
or loss. However, the decrease is debited directly
to equity under the heading of Asset Revaluation
Reserve to the extent of any credit balance existing
in the revaluation reserve in respect of that asset.
Changes to an asset’s carrying amount are brought
to account together with the tax effects applicable
to the revaluation amount. On realisation of any
amounts contained in the Asset Realisation Reserve,
the balance is transferred to retained earnings.
Plant and equipment
Items of plant and equipment are stated at cost or
deemed cost less accumulated depreciation and
impairment losses (see accounting policy (i)). The
cost of self-constructed assets includes the cost
of materials, direct labour, and an appropriate
proportion of production overheads. The cost
of self-constructed assets and acquired assets
includes (i) the initial estimate, at the time of
installation and during the period of use, when
relevant, of the costs of dismantling and removing
the items and restoring the site on which they are
located, and (ii) changes in the measurement of
existing liabilities recognised for these costs
resulting from changes in the timing or outflow
of resources required to settle the obligation or
from changes in the discount rate.
Where parts of an item of property, plant and
equipment have different useful lives, they are
accounted for as separate items of property, plant
and equipment.
Leases for which the Group assumes substantially
all of the risks and rewards of ownership are
classified as finance leases. The plant and equipment
acquired by way of a finance lease is stated at an
amount equal to the lower of its fair value and the
present value of the minimum lease payments at
inception of the lease, less accumulated depreciation.
Lease payments are accounted for as described in
accounting policy (v).
(iii) Depreciation
Depreciation is charged to the consolidated profit
and loss on a straight-line basis over the estimated
useful lives of each part of an item of property,
plant and equipment. Land is not depreciated. The
estimated useful lives are reflected in the following
rates in the current and comparative periods:
2015
2014
Buildings
2.5-4.0%
2.5-4.0%
Plant and equipment
5.0-50%
5.0-50%
Leased plant
and equipment
10.0-30%
10.0-30%
The residual value, the useful life and the
depreciation method applied to an asset are
reassessed at least annually.
(e) Intangibles
(i) Goodwill
All business combinations are accounted for by
applying the acquisition method. Goodwill represents
the difference between the consideration transferred
for the acquisition and the net recognised amount
(generally fair value of the identifiable assets
acquired and liabilities assumed), all measured
as of acquisition date.
Goodwill is stated at cost less any accumulated
impairment losses. Goodwill is allocated to
cash-generating units and is tested annually for
impairment (see accounting policy (i)). In respect of
joint ventures, the carrying amount of goodwill is
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
included in the carrying amount of the investment
in the joint venture.
Negative goodwill arising on an acquisition is
recognised directly in profit or loss.
(ii) Research and development
Expenditure on research activities, undertaken with
the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in the
profit and loss as an expense as incurred.
Expenditure on development activities, whereby
research findings are applied to a plan or design
for the production of new or substantially improved
products and processes, is capitalised if the product
or process is technically and commercially feasible
and the Group has sufficient resources to complete
development.
The expenditure capitalised includes the cost
of materials, direct labour and an appropriate
proportion of overheads. Other development
expenditure is recognised in the profit and loss as
an expense as incurred. Capitalised development
expenditure is stated at cost less accumulated
amortisation (see below) and impairment losses
(see accounting policy (i)).
(iii) Other intangible assets
Other intangible assets that are acquired by
the Group are stated at cost less accumulated
amortisation (see following) and impairment losses.
(iv) Amortisation
Amortisation of intangibles other than goodwill is
charged to the profit and loss on a straight-line
basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Goodwill
and intangible assets with an indefinite useful life
are tested for impairment at least at each annual
reporting date. Other intangible assets are amortised
from the date that they are available for use. The
estimated useful lives are reflected in the following
rates in the current and comparative periods:
Brand names
2015
0%
2014
0%
Intellectual property
0%-4.0%
0%-4.0%
Patents & trademarks 5.0%-12.0% 5.0%-12.0%
Amortisation methods, useful lives and residual
values are reviewed at each financial year end and
adjusted if appropriate.
(f) Non-current assets held for sale
Non-current assets that are expected to be
recovered primarily through sale or distribution
rather than through continuing use, are classified
as held for sale. Immediately before classification,
the assets are remeasured in accordance with the
Group's accounting policies. Thereafter, generally
the assets are measured at the lower of their
carrying amount and fair value less costs to sell.
Impairment losses on initial classification as
held for sale and subsequent gains or losses on
remeasurement are recognised in profit or loss.
Gains are not recognised in excess of any cumulative
impairment loss.
(g) Trade and other receivables
Trade and other receivables are stated at their
amortised cost less impairment losses (see
accounting policy (i)).
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash balances
and call deposits with an original maturity of three
months or less. Bank overdrafts that are repayable
on demand and form an integral part of the Group’s
cash management are included as a component of
cash and cash equivalents for the purpose of the
statement of cash flows.
(i) Impairment
The carrying amounts of the Group’s assets, other
than inventories (see accounting policy (c)) and
deferred tax assets (see accounting policy (p)),
are reviewed at each reporting date to determine
whether there is any indication of impairment. If
any such indication exists, the asset’s recoverable
amount is estimated.
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
An impairment loss in respect of goodwill is not
reversed.
For goodwill, assets that have an indefinite useful
life and intangible assets that are not yet available
for use, the recoverable amount is estimated at
least annually.
An impairment loss is recognised whenever the
carrying amount of an asset or its cash generating
unit exceeds its recoverable amount. Impairment
losses are recognised in the profit and loss unless
the asset has previously been revalued, in which
case the impairment loss is recognised as a reversal
to the extent of that previous revaluation with any
excess recognised through the profit and loss.
Impairment losses recognised in respect of
cash-generating units are allocated first to reduce
the carrying amount of any goodwill allocated to the
cash-generating unit (group of units) and then, to
reduce the carrying amount of the other assets in
the unit (group of units) on a pro rata basis.
In respect of other assets, an impairment loss is
reversed if there has been a change in the estimates
used to determine the recoverable amount.
An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed
the carrying amount that would have been
determined, net of depreciation or amortisation,
if no impairment loss had been recognised.
(l) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially
at fair value less attributable transaction costs.
Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any
difference between cost and redemption value being
recognised in the profit or loss over the period of the
borrowings on an effective interest basis.
(j) Calculation of recoverable amount
(m) Employee benefits
The recoverable amount of the Group’s receivables
carried at amortised cost is calculated as the present
value of estimated future cash flows, discounted at
the original effective interest rate (i.e., the effective
interest rate computed at initial recognition of these
financial assets). Receivables with a short duration
(less than 12 months) are not discounted.
The recoverable amount of other assets is the
greater of their fair value less costs to sell and value
in use. In assessing value in use, the estimated
future cash flows are discounted to their present
value using a pre-tax nominal discount rate that
reflects current market assessments of the time
value of money and the risks specific to the asset.
For an asset that does not generate largely
independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which
the asset belongs.
(k) Reversals of impairment
An impairment loss in respect of receivables carried
at amortised cost is reversed if the subsequent
increase in recoverable amount can be related
objectively to an event occurring after the impairment
loss was recognised.
(i) Defined contribution superannuation funds
Obligations for contributions to defined contribution
superannuation funds are recognised as an expense
in the profit or loss as incurred. During the year
superannuation contributions of $4,683,366
(2014: $4,969,762) were expensed.
(ii) Long-term service benefits
The Group’s net obligation in respect of long-term
service benefits, other than pension plans, is the
amount of future benefit that employees have
earned in return for their service in the current and
prior periods. The obligation is calculated using
expected future increases in wage and salary rates
including related on-costs and expected settlement
dates, and is discounted using the rates attached to
corporate bonds at the reporting date which have
maturity dates approximating the terms of the
Group’s obligations.
(iii) Share based payments transactions
MaxiTRANS Industries Limited grants performance
rights from time to time to certain employees under
the Performance Rights Plan.
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(o) Warranties
The fair value of performance rights granted
is recognised as an employee expense with a
corresponding increase in equity recorded over
the vesting period.
The fair value of the performance rights is
calculated at the date of grant using a Monte Carlo
simulation model and allocated to each reporting
period over the period from grant date to vesting
date. The value disclosed is the portion of the fair
value of the performance rights allocated to this
reporting period. Where relevant, in valuing the
performance rights, market conditions have been
taken into account in both the current and prior
period.
(iv) Wages, salaries, annual leave, sick leave and
non-monetary benefits
Liabilities for employee benefits for wages, salaries,
annual leave and sick leave represent present
obligations resulting from employees’ services
provided to reporting date, calculated at undiscounted
amounts based on remuneration wage and salary
rates that the Group expects to pay as at reporting
date including related on-costs, such as workers
compensation insurance and payroll tax. Non-
accumulating non-monetary benefits, such as
medical care, housing, cars and free or subsidised
goods and services, are expensed based on the net
marginal cost to the Group as the benefits are taken
by the employees.
(n) Provisions
A provision is recognised in the consolidated balance
sheet when the Group has a present legal or
constructive obligation as a result of a past event,
and it is probable that an outflow of economic
benefits will be required to settle the obligation.
If the effect is material, provisions are determined
by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments
of the time value of money and, when appropriate,
the risks specific to the liability.
A provision for warranties is recognised when
the underlying products or services are sold. The
provision is based on historical warranty data and
known warranty claims.
(p) Income tax
Income tax expense comprises current and deferred
tax. Income tax is recognised in the profit or loss
except to the extent that it relates to items recognised
directly in equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted
or substantially enacted at the reporting date,
and any adjustment to tax payable in respect of
previous years.
In determining the amount of current and deferred
tax, the Group takes into account the impact of
uncertain tax positions. The Group believes that its
accruals for tax liabilities are adequate for all open
tax years. This assessment relies on estimates and
assumptions and may involve judgements about
future events.
Deferred tax is provided using the balance sheet
liability method, providing for temporary differences
between the carrying amounts of assets and
liabilities for financial reporting purposes and the
amounts used for taxation purposes. The following
temporary differences are not provided for: goodwill,
the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit, and
differences relating to investments in subsidiaries
to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax
provided is based on the expected manner of
realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted
or substantially enacted at the reporting date.
A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will be
available against which the asset can be utilised.
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(r) Earnings per share
Deferred tax assets are reduced to the extent that it
is no longer probable that the related tax benefit will
be realised.
Additional income taxes that arise from the distribution
of dividends are recognised at the same time as the
liability to pay the related dividend.
(q) Tax consolidation
The Company and its wholly-owned Australian
resident entities have formed a tax-consolidated
group with effect from 1 July 2003 and are therefore
taxed as a single entity from that date. The head
entity within the tax consolidated group is MaxiTRANS
Industries Limited.
Due to the existence of a tax contribution agreement
between the entities in the tax consolidated group,
the parent entity recognises the tax effects of its
own transactions and the current tax liabilities and
the deferred tax assets arising from unused tax
losses and unused tax credits assumed from the
subsidiary entities.
Current tax income/expense, deferred tax liabilities
and deferred tax assets arising from temporary
differences of the members of the tax-consolidated
group are recognised in the separate financial
statements of the members of the tax consolidated
group using the ‘separate taxpayer within group’
approach by reference to the carrying amounts of
assets and liabilities in the separate financial
statements of each entity and the tax values
applying under tax consolidation.
In accordance with the tax contribution agreement,
the subsidiary entities are compensated/charged
for the assets and liabilities assumed by the parent
entity as intercompany receivables and payables
and for amounts which equal the amounts initially
recognised by the subsidiary entities.
Basic earnings per share (“EPS”) is calculated by
dividing the net profit attributable to members of
the parent entity for the reporting period, by the
weighted average number of ordinary shares of
the Company.
Diluted EPS is calculated by dividing the basic
earnings, adjusted by the after tax effect of financing
costs associated with dilutive potential ordinary
shares and the effect on revenues and expenses
of conversion to ordinary shares associated with
dilutive potential ordinary shares, by the weighted
average number of ordinary shares and dilutive
potential ordinary shares.
(s) Revenue
(i) Revenue from the sale of goods
Revenue from the sale of goods is recognised upon
the constructive delivery of goods to customers in
accordance with contracted terms, at which point
the significant risks and rewards of ownership are
transferred.
(ii) Revenue from the rendering of services
Revenue from the rendering of services is
recognised as the services are performed/rendered.
(iii) Other income
Interest income is recognised in the profit and loss
as it accrues, using the effective interest method.
(iv) Dividend income
Dividend revenue is recognised when the right to
receive a dividend has been established.
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(iii) Finance costs
(t) Goods and services tax
Revenues, expenses and assets are recognised net
of the amount of goods and services tax (GST),
except where the amount of GST incurred is not
recoverable from the Australian Tax Office (ATO).
In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part
of an item of the expense.
Finance costs comprise interest payable on
borrowings calculated using the effective interest
method, foreign exchange losses, and losses on
hedging instruments that are recognised in the
profit and loss. Borrowing costs that are directly
attributable to the acquisition, construction or
production of a qualifying asset are capitalised as
part of the cost of the asset. All other borrowing
costs are recognised in the profit and loss using
the effective interest method.
Receivables and payables are stated with the amount
of GST included.
(w) Derivative financial instruments
The net amount of GST recoverable from, or payable
to, the ATO is included as a current asset or liability
in the consolidated balance sheet.
Cash flows are included in the statements of cash
flows on a gross basis. The GST components of cash
flows arising from investing and financing activities
which are recoverable from, or payable to, the ATO
are classified as operating cash flows.
(u) Trade and other payables
Liabilities are recognised for amounts to be paid
in the future for goods or services received. Trade
accounts payable are normally settled within 60 days.
(v) Expenses
(i) Operating lease payments
Payments made under operating leases are
recognised in the profit or loss on a straight-line
basis over the term of the lease. Lease incentives
received are recognised in the profit or loss as an
integral part of the total lease expense and spread
over the lease term.
(ii) Finance lease payments
Minimum lease payments are apportioned between
the finance charge and the reduction of the
outstanding liability. The finance charge is allocated
to each period during the lease term so as to produce
a constant periodic rate of interest on the remaining
balance of the liability.
The Group from time to time uses derivative financial
instruments to hedge its exposure to foreign exchange
and interest rate risks arising from operational,
financing and investment activities. The Group does
not hold or issue derivative financial instruments for
trading purposes. However, derivatives that do not
qualify for hedge accounting are accounted for as
trading instruments.
Derivative financial instruments are recognised
initially at fair value. Subsequent to initial recognition,
derivative financial instruments are stated at fair
value. The gain or loss on remeasurement to fair
value is recognised immediately in profit or loss.
However, where derivatives qualify for hedge
accounting, recognition of any resultant gain or loss
depends on the nature of the item being hedged.
When a derivative is designated as a cash flow
hedging instrument, the effective portion of changes
in the fair value of the derivative is recognised in OCI
and accumulated in the hedging reserve. Any
ineffective portion of changes in the fair value of the
derivative is recognised in the profit or loss.
The amount accumulated in equity is retained in OCI
and reclassified to profit or loss in the same period
or periods during which the hedged item affects
profit or loss.
If the hedging instrument no longer meets the
criteria for hedge accounting, expires or is sold,
terminated or exercised, or the designation is
revoked, then hedge accounting is discontinued
prospectively. If the forecast transaction is no longer
expected to occur, then the amount accumulated in
equity is reclassified to profit or loss.
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(x) Accounting estimates and judgements
Management discussed with the Audit and Risk
Management Committee the development, selection
and disclosure of the Group’s critical accounting
policies and estimates and the application of these
policies and estimates. The estimates and
judgements that have a significant risk of causing
a material adjustment to the carrying amounts
of assets and liabilities within the next financial
year are discussed below.
(i) Impairment of goodwill and intangibles
Risk management policies are established to
identify and analyse the risks faced by the Group,
to set appropriate risk controls, and to monitor
risks and adherence to limits.
The Group does not enter into or trade financial
instruments, including derivative financial
instruments, for speculative purposes.
The Group’s activities expose it primarily to the
financial risks associated with changes in foreign
currency exchange rates and interest rates. The
carrying value of financial assets and financial
liabilities recognised in the accounts approximate
their fair value with the exception of borrowings
which are recorded at amortised cost.
The Group assesses whether goodwill and intangibles
with indefinite useful lives are impaired at least
annually in accordance with accounting policy (i).
There have not been any changes to the objectives,
policies and procedures for managing risk during
the current year or in the prior year.
These calculations involve an estimation of the
recoverable amount of the cash-generating units to
which the goodwill and intangibles with indefinite
useful lives are allocated.
(ii) Provisions
The calculation of the provisions for warranty
claims and impairment provisions for inventory
and receivables involves estimation and judgement
surrounding future claims and potential losses and
exposures based primarily on past experience, the
likelihood of claims or losses and exposures arising
in the future as well as management knowledge and
experience together with a detailed examination of
financial and non financial information and trends.
Refer accounting policy (n) for details of the
recognition and measurement criteria applied.
(y) Financial Risk Management
(i) Overview
The Group has exposure to credit, market and
liquidity risks associated with the use of financial
instruments.
The Board has delegated to the Audit and Risk
Management Committee responsibility for the
establishment of policies on risk oversight and
management.
(ii) Capital Management
The Board’s policy is to maintain a strong capital
base so as to maintain investor, creditor and market
confidence and to sustain future development of the
business.
The Board monitors the earnings per share and the
levels of dividends to ordinary shareholders together
with the net debt/equity ratio, which at 30 June 2015
was 36% (2014: 31%). The Dividend Reinvestment
Plan was suspended on 21 June 2011. The Board
seeks to maintain a balance between higher
returns that might be possible with higher levels
of borrowings and the advantages afforded by a
sound capital position.
(z) Segment reporting
Operating segments are identified and segment
information disclosed on the basis of internal
reports that are regularly provided to, or reviewed
by the Group's chief operating decision maker
which, for the Group, is the Managing Director.
In this regard, such information is provided using
different measures to those used in preparing
the consolidated statement of profit or loss and
consolidated balance sheet. Reconciliations of
such management information to the statutory
information contained in the financial report have
been included.
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
(iv) Non-derivative financial liabilities
Fair value, which is determined for disclosure
purposes, is calculated based on the present value
of future principal and interest cash flows, discounted
at the market rate of interest at the reporting date.
For finance leases the market rate of interest is
determined by reference to similar lease agreements.
(ab) Government grants
From time to time the Group becomes eligible for
government grants. These grants are accounted
for in accordance with AASB 120 Accounting for
Government Grants and Disclosure of Government
Assistance. The current grants relate to assets,
and have been presented in the balance sheet by
deducting the grant value from the cost of the asset
in arriving at the asset carrying amount.
As at 30 June 2015, the Group has accounted for two
government grants.
The first grant, relating to the relocation of the
Hamelex White manufacture and assembly
production line from Hallam to Ballarat, amounts to
$2.5 million. At 30 June 2015 $2.2 million has been
received. In accordance with the terms of the grant,
the Group is required to recruit and maintain certain
levels of employee numbers, and maintain and
operate the facility for a period of not less than
3 years from the date of completion. The grant has
been offset against the cost of setting up the new
production line within plant and equipment.
The second grant, relating to relocation
compensation for the MTC (China) facility amounts
to $3.42 million. At 30 June 2015 $3.38 million has
been received. Conditions relating to this grant have
been met, and the company has initially applied the
grant against the write off of the old facility ($0.8m),
and the balance of the grant has been applied
against the cost of the new facility ($2.58m).
(aa) Determination of fair values
A number of the Group’s accounting policies and
disclosures require the determination of fair value,
for both financial and non-financial assets and
liabilities. Fair values have been determined for
measurement and / or disclosure purposes based
on the following methods. When applicable, further
information about the assumptions made in
determining fair values is disclosed in the notes
specific to that asset or liability.
(i) Land and buildings
The fair value of property is based on market values.
The market value of property is the estimated
amount for which a property could be exchanged
on the date of valuation between a willing and
knowledgeable buyer and seller in an arm’s length
transaction after proper marketing.
(ii) Derivatives
The fair value of forward exchange contracts is
based on their listed market price, if available. If a
listed market price is not available, then fair value is
estimated by discounting the difference between the
contractual forward price and the current forward
price for the residual maturity of the contract.
The fair value of interest rate swaps is based
on broker quotes. Those quotes are tested for
reasonableness by discounting estimated future
cash flows based on the terms and maturity of
each contract and using market interest rates
for a similar instrument at the measurement date.
Fair values reflect the credit risk of the instrument
and include adjustments to take account of the
credit risk of the Group entity and counterparty
when appropriate.
(iii) Trade and other receivables
The fair value of trade and other receivables is
estimated as the present value of future cash flows,
discounted at the market rate of interest at the
reporting date. This fair value is determined for
disclosure purposes.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
2. PROFIT FROM ORDINARY ACTIVITIES
Net (income)/expenses from movements in provision for:
– employee entitlements
– warranty (1)
– other
Net (income)/expense resulting from movements in provisions
Rental expense on operating leases
Research and development expenditure
written off as incurred
Crediting as income:
Net gain on disposal of:
– property, plant and equipment
(1) Includes provision for product recall costs of $2.45m pre-tax.
3. TAXATION
(a) Income tax
Reconciliation of tax expense
Prima facie tax payable on profit before tax
at 30% (2014: 30%)
Add/(deduct) tax effect of:
Research & development allowance
Non-deductible/(deductible) expenses
Joint venture equity accounted income
Prior year adjustments
Impact of tax rates in foreign jurisdictions
Current year losses for which no deferred asset is recognised
Income tax expense in consolidated statement of profit or loss
Income tax expense attributable to operating
profit is made up of:
Current tax expense
Prior year adjustment – current tax
Deferred tax expense
– origination and reversal of temporary difference
– prior year adjustment – deferred differences
Income tax expense in consolidated statement of profit or loss
44
Consolidated
2015
$’000
2014
$’000
600
1,567
315
2,482
5,812
872
(47)
(566)
259
5,291
821
717
(43)
(238)
–
1,650
6,952
(400)
123
(299)
(19)
(19)
(614)
1,036
3,323
735
(2,268)
(754)
1,036
(348)
(126)
(441)
(149)
(20)
159
(925)
6,027
5,486
(149)
323
367
6,027
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
3. TAXATION (continued)
(b) Deferred tax assets/(deferred tax liabilities)
The deferred tax assets/(deferred tax liabilities) are made
up of the following estimated tax benefits:
– Provisions and accrued employee benefits
– Property, plant & equipment
– Leases
– Intangible assets
– Inventory
– Other
Net deferred tax asset/(liability)
Balance at beginning of year
Recognised in profit or loss
Acquired through business combination
Recognised in equity
Net deferred tax asset/(liability)
(c) Current tax asset/(liability)
Consolidated
2015
$’000
2014
$’000
6,166
(4,498)
(3)
(2,163)
654
517
673
(1,561)
3,075
(841)
673
3,924
(3,196)
(21)
(2,933)
533
132
(1,561)
(1,125)
235
51
(722)
(1,561)
–
The Group’s current tax asset of $1,409,887 (2014: $nil) and current tax liability of $362,328 (2014: $231,289) represents the
amount of income taxes receivable/(payable) in respect of current and prior financial periods.
4. TRADE AND OTHER RECEIVABLES
Impairment losses
Not past due
Past due 0 – 30 days
Past due 31 – 60 days
Past due over 61 days
Trade debtors
Other receivables
Total trade and other receivables
Consolidated 2015
Consolidated 2014
Gross
$’000
Impairment
$’000
Total
$’000
Gross
$’000
Impairment
$’000
Total
$’000
30,264
9,951
1,607
77
(200)
(51)
(11)
(56)
30,064
9,900
1,596
21
28,183
10,858
2,096
1,660
(140)
(65)
(11)
(358)
28,043
10,793
2,085
1,302
41,899
(318)
41,581
42,797
(574)
42,223
1,380
42,961
808
43,031
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
5.
INVENTORIES
Second–hand units – at net realisable value
Finished goods – at cost
Work in progress – at cost
Raw materials – at cost
Less: provision for impairment loss
Total inventories
6. PROPERTY, PLANT & EQUIPMENT
Land and buildings at fair value
Accumulated depreciation
Total land and buildings
Plant and Equipment
Plant & equipment at cost
Accumulated depreciation
Office equipment at cost
Accumulated depreciation
Leased plant & equipment
Accumulated depreciation
Capital work in progress
Total plant and equipment
Total property, plant and equipment
Consolidated
2015
$’000
2014
$’000
4,848
32,693
4,245
14,675
(2,726)
53,735
3,319
34,376
3,143
15,905
(2,156)
54,587
46,380
(728)
45,652
43,178
(202)
42,976
39,267
(28,234)
37,595
(28,466)
11,033
9,129
8,706
(6,174)
2,532
2,136
(663)
1,473
12,664
27,702
73,354
9,109
(6,086)
3,023
4,278
(2,444)
1,834
6,235
20,221
63,197
Independent valuations were obtained at 30 June 2015 in relation to the majority of land and buildings held at that time,
for use by the directors in assessing land and buildings at fair value.
Refer to Note 25(e) for details of security over land and buildings.
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
6. PROPERTY, PLANT & EQUIPMENT (continued)
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
Land and buildings
Carrying amount at the beginning of the financial year
Additions
Fair value increment
Transfers from capital works in progress
Disposals
Depreciation
Other sundry movements
Carrying amount at the end of the financial year
Plant and equipment
Carrying amount at the beginning of the financial year
Additions
Transfers from leased plant and equipment
Transfers from capital works in progress
Disposals
Depreciation
Other sundry movements
Carrying amount at the end of the financial year
Office equipment
Carrying amount at the beginning of the financial year
Additions
Transfers from capital works in progress
Disposals
Depreciation
Other sundry movements
Carrying amount at the end of the financial year
Leased plant and equipment
Carrying amount at the beginning of the financial year
Additions
Transfers to plant and equipment
Amortisation
Carrying amount at the end of the financial year
Capital works in progress
Carrying amount at the beginning of the financial year
Additions
Transfers to property, plant and equipment
Carrying amount at the end of the financial year
Consolidated
2015
$’000
2014
$’000
42,976
–
3,127
–
–
(874)
423
45,652
9,129
3,115
496
43
(163)
(1,955)
368
11,033
3,023
621
–
(12)
(1,138)
38
2,532
1,834
685
(496)
(550)
1,473
6,235
6,472
(43)
12,664
37,243
1,499
2,583
5,279
(2,950)
(714)
36
42,976
6,589
4,401
49
14
(182)
(1,885)
143
9,129
2,118
1,267
592
(7)
(1,001)
54
3,023
1,566
1,007
(49)
(690)
1,834
6,082
6,038
(5,885)
6,235
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
Consolidated
2015
$’000
2014
$’000
24,645
24,945
6,930
(691)
6,239
6,930
(691)
6,239
22,665
(11,673)
22,665
(10,935)
10,992
11,730
891
(535)
356
42,232
4,229
(1,205)
3,024
45,938
24,945
–
(300)
24,645
6,239
6,239
11,730
(738)
10,992
3,024
(388)
(2,280)
356
21,990
2,955
–
24,945
6,239
6,239
12,460
(730)
11,730
3,413
(389)
–
3,024
7.
INTANGIBLES
Goodwill at cost
Brand names at cost
Accumulated amortisation
Intellectual property at cost
Accumulated amortisation
Patents and trademarks at cost
Accumulated amortisation
Total Intangibles
Reconciliations
Reconciliations of the carrying amounts for each class of intangible assets are set out below:
Goodwill
Carrying amount at the beginning of the financial year
Acquisition through business combination
Impairment losses
Carrying amount at the end of the financial year
Brand names
Carrying amount at the beginning of the financial year
Carrying amount at the end of the financial year
Intellectual property
Carrying amount at the beginning of the financial year
Amortisation
Carrying amount at the end of the financial year
Patents and trademarks
Carrying amount at the beginning of the financial year
Amortisation
Impairment losses
Carrying amount at the end of the financial year
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
7.
INTANGIBLES (continued)
CGU
Freighter
Maxi–CUBE
Lusty EMS
AZMEB
Hamelex White
MaxiPARTS
Yangzhou Maxi–CUBE Tong Composites (China)
Transport Connection
–
–
–
Consolidated
Other Intangibles
Allocation
Goodwill
Allocation
2015
$’000
12,814
2,333
–
2,440
–
17,587
2014
$’000
13,220
–
2,530
2,624
2,619
–
–
–
20,993
2015
$’000
2,853
762
–
–
–
16,699
2,753
1,578
24,645
2014
$’000
2,853
762
–
300
–
16,699
2,753
1,578
24,945
Impairment tests for Goodwill and Other Intangibles
The recoverable amount of the CGU’s to which goodwill and other intangible assets with indefinite useful lives are allocated is
determined based on value–in–use calculations. These calculations use cash flow projections based on most recent budgeted
projections by key operational management. These projections are derived based on current market conditions, order intake
and expectations with regards to market share. Projections are extrapolated using estimated growth rates for a five year
period with a terminal growth rate of 2% which is below the long–term market average. The growth rate used for years 2-5
is 2.75% which is based on recent Australian Government GDP forecasts and the after-tax nominal discount rates used were
9.6% – 10.6% (2014: 11.8% – 12.8%).
As a result of this testing, the carrying amount of the AZMEB CGU was determined to be higher than its recoverable amount.
The decline in resources sector investment and mining activity has significantly reduced the demand for the AZMEB product,
with no material improvement in demand expected for these products into the foreseeable future. An impairment loss of
$2,580,000 has therefore been recognised for the year ended 30 June 2015, allocated $2,280,000 to Other Intangible Assets
and $300,000 to Goodwill.
The recoverable amount of all other CGUs, was found to be in excess of their respective carrying values. As such, no additional
impairment charges were required for the year ended 30 June 2015.
8. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Total trade and other payables
9.
INTEREST BEARING LOANS AND BORROWINGS
Current
Bank loans – secured
Lease liability
Total current interest bearing liabilities
Consolidated
2015
$’000
2014
$’000
31,871
11,345
43,216
29,613
11,427
41,040
25
4,196
1,070
5,266
2,463
1,936
4,399
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
9.
INTEREST BEARING LOANS AND BORROWINGS (continued)
Non Current
Bank loans
Lease liability
Total non–current interest bearing liabilities
Consolidated
2015
$’000
41,000
1,036
42,036
2014
$’000
37,250
931
38,181
25
Bank loans are subject to a floating interest rate. Interest rate swaps have been executed in respect of $13.5m
(2014: $29.0m) of this debt in order to mitigate interest rate risk. Refer to note 25(b) for further details.
Finance Costs:
– Interest on bank loans
– Finance lease charges
Total finance costs
10. PROVISIONS
Current
Employee entitlements
Warranty
Total current provisions
Non Current
Employee entitlements
Aggregate employee entitlements liability
11. ISSUED CAPITAL
Balance at 30 June 2014
Balance at 30 June 2015
2,359
166
2,525
1,778
235
2,013
9,485
3,209
8,967
1,641
12,694
10,608
1,152
10,637
1,070
10,037
Number of
Ordinary Shares
Share Capital
$’000
185,075,653
185,075,653
56,386
56,386
Ordinary shares
Subject to the Constitution of the Company, holders of ordinary shares are entitled to vote as follows:
Every shareholder may vote;
On a show of hands every shareholder has one vote;
On a poll every shareholder has:
(i) One vote for each fully paid share; and
(ii) For each partly paid share held by the shareholder, a fraction of a vote equivalent to the proportion which the amount
paid (not credited) is of the total amounts paid and payable (excluding amounts credited) on the share.
Subject to the Constitution of the Company, ordinary shares attract the right in a winding up to participate equally in the
distribution of the assets of the Company (both capital and surplus), subject only to any amounts unpaid on shares.
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
12. EARNINGS PER SHARE
Basic earnings per share
Earnings reconciliation
Net profit attributable to equity holders of the company
Basic earnings
Consolidated
2015 – $’000
2014 – $’000
4,497
4,497
17,075
17,075
2015 – Number
2014 – Number
Weighted average number of shares
Ordinary shares on issue at 1 July
Effect of shares issued during the year –
185,075,653
Weighted average number for basic earnings per share
185,075,653
183,993,392
326,161
184,319,553
Diluted earnings per share
The calculation of diluted earnings per share at 30 June 2015 is based on net profit attributable to equity holders of the
company of $4,497,000 and the weighted average number of ordinary shares outstanding after adjustment for the effects
of all dilutive potential ordinary shares of nil.
2015 – Number
2014 – Number
Weighted average number of shares (diluted)
Weighted average number of shares (basic)
Effect of Performance Rights on issue –
185,075,653
Weighted average number for diluted earnings per share
185,075,653
184,319,553
2,056,364
186,375,917
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
13. DIVIDENDS
Dividends paid
2015
Interim – ordinary
Total dividends paid
2014
Interim – ordinary
Final – ordinary
Total dividends paid
Dividends proposed
Cents per
share
Total amount
$’000
Date of
payment
Tax rate for
franking credit
Percent
franked
2.00
2.00
3.75
2.25
6.00
3,702
3,702
6,940
4,164
11,104
16 April 2015
30%
100%
17 April 2014
10 October 2014
30%
30%
100%
100%
No final dividend was proposed for the financial year ended 30 June 2015.
Dividend franking account
Franking credits available to shareholders of
MaxiTRANS Industries Limited for subsequent financial years
The Company
2015
$’000
2014
$’000
18,685
17,044
The ability to utilise the franking credits is dependent upon the ongoing solvency of the Company.
The impact on the dividend franking account of dividends proposed after the reporting date but not recognised as a liability
is to reduce it by $nil (2014: $1,784,658).
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
14. SEGMENT INFORMATION
It is the Group’s policy that inter–segment pricing is determined on an arm’s length basis. Segment results, assets and
liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items mainly comprise, interest–bearing loans, borrowings and expenses, and corporate assets and expenses.
Total finance costs of the Group are included in unallocated corporate costs.
Year ended 30 June 2015
Business Segments
Revenue
External segment revenue
Inter–segment revenue
Total segment revenue
Unallocated sundry revenue
Total revenue
Trailer &
Tipper Units
Parts &
Service
Eliminations
Consolidated
$’000
$’000
$’000
$’000
200,647
2,212
202,859
127,240
23,772
151,012
–
(25,984)
(25,984)
327,887
–
327,887
1,278
329,165
Segment Net profit before tax
6,475
1,570
–
8,045
Share of net profit of equity
accounted investments
Unallocated corporate expenses
Profit before related income
tax expense
Income tax expense
Net profit
Depreciation and amortisation
Unallocated depreciation
and amortisation
Total depreciation and amortisation
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
Capital expenditure(i)
Unallocated capital expenditure
Consolidated capital expenditure
2,814
2,570
–
124,336
70,490
–
12,787
26,049
–
1,409
3,216
–
997
(3,543)
5,499
(1,036)
4,463
5,384
259
5,643
194,826
31,016
225,842
38,836
66,394
105,230
4,625
6,268
10,893
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
14. SEGMENT INFORMATION (continued)
Year ended 30 June 2014
Business Segments
Revenue
External segment revenue
Inter–segment revenue
Total segment revenue
Unallocated sundry revenue
Total revenue
Trailer &
Tipper Units
Parts &
Service
Eliminations
Consolidated
$’000
$’000
$’000
$’000
214,503
1,825
216,328
136,438
23,127
159,565
–
(24,952)
(24,952)
350,941
–
350,941
1,027
351,968
Segment Net profit before tax
15,422
9,783
–
25,205
Share of net profit of equity
accounted investments
Unallocated corporate expenses
Profit before related income
tax expense
Income tax expense
Net profit
Depreciation and amortisation
Unallocated depreciation
and amortisation
Total depreciation and amortisation
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
Capital expenditure(i)
Unallocated capital expenditure
Consolidated capital expenditure
3,183
2,045
120,956
74,089
13,907
22,263
1,821
6,922
–
–
–
–
1,471
(3,504)
23,172
(6,027)
17,145
5,228
180
5,408
195,045
23,979
219,024
36,170
61,041
97,211
8,743
5,577
14,320
(i) Capital expenditure includes the acquisition of leased assets
Geographical segments
The Group’s external revenues are predominantly derived from customers located within Australia.
The customer base is sufficiently diverse to ensure the Group is not reliant on any particular customer.
The Group’s assets and capital expenditure activities are predominantly located within Australia.
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
15. SHARE BASED PAYMENTS
On 15 October 2010, the Group established the MaxiTRANS Performance Rights Plan (‘PRP’) that entitles executive directors
and senior management to receive a specified number of Performance Rights (‘PR’s’) which upon vesting can be converted
into a specified number of ordinary shares in the Company.
The terms and conditions relating to PR’s currently on issue are as follows:
Period
Grant date
Total PR's Issued
Total PR’s Forfeited
Total PR's remaining on issue
Vesting conditions
Base ROIC
Target increase in ROIC
1 July 2014 – 30 June 2017
1 July 2013 – 30 June 2016
1 July 2012 – 30 June 2015
30 September 2014
30 September 2013
30 September 2012
2,072,978
130,456
1,942,522
ROIC – 50%
EPS – 50%
1,532,292
98,824
1,433,468
1,831,097
419,096
1,412,001
ROIC – 100%
ROIC – 100%
9.62% (year ended
15.0% (year ended
10.1% (year ended
30 June 2014)
30 June 2013)
30 June 2012)
Average of 1.50% per annum
Average of 0.33% per annum
Average of 1.15% per annum
(4.50% over 3 years)
(1.00% over 3 years)
(3.45% over 3 years)
Percentage increase in base ROIC required
47%
7%
34%
Minimum % of ROIC target that must be
67% (i.e. average of 1.00%
Base ROIC of 15.0% must
70% (i.e. average of 0.81%
achieved for Performance Rights to vest
per annum)
be achieved
per annum)
Target EPS
Average 10.0% compound
growth over 2014
Basic EPS – 9.26%
n/a
n/a
Minimum service requirement
3 years from grant date
3 years from grant date
3 years from grant date
Details of 2011 PR’s exercised during the year:
Total PR's issued
Total PR’s forfeited
Total PR’s exercised
Measurement of fair value
2,893,613
1,593,349
1,300,264
The fair value of PR’s is calculated at the date of grant by an independent external valuer, Grant Thornton, using the
Monte Carlo simulation model and allocated to each reporting period evenly over the period from grant date to vesting date.
Expected volatility is estimated by considering historic average share price volatility.
PR’s are granted under a service condition and, for grants to key management personnel, non–market performance
conditions. Non–market performance conditions are not taken into account in the grant date fair value measurement
of the services received.
The inputs used in the measurement of the fair values at grant date of the PR’s are as follows:
2015
2014
2013
Fair value at grant date
76.83¢
$1.012
59.65¢
Share price at grant date
Expected volatility
Expected dividend yield
Risk–free rate of return
Liquidity discount
86.50¢
40.00%
6.50%
2.90%
15.00%
$1.325
40.00%
6.50%
3.60%
15.00%
76.50¢
40.00%
6.50%
2.50%
15.00%
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
15. SHARE BASED PAYMENTS (continued)
Expense recognised in profit and loss
PR's on issue
Total share based payment expense recognised as employee costs
16. RELATED PARTY DISCLOSURES
(a) Director and other key management personnel disclosures
Consolidated
2015
$’000
570
570
2014
$’000
598
598
Key management personnel have authority and responsibility for planning, directing and controlling the activities
of the Group. Key management personnel comprise the directors of the Company and executives for the Group.
The following were key management personnel of the Group at any time during the reporting period and unless
otherwise indicated were key management personnel for the entire period:
Non-executive directors
– Mr I Davis (Chairman)
– Mr J Curtis (Deputy Chairman)
– Mr G Lord
– Mr R Wylie
– Mr J Rizzo
Executive directors
– Mr M Brockhoff (Managing Director)
Executives
– Mr C Richards (Chief Financial Officer and Company
Secretary)
–
–
Mr A Wibberley (Group General Manager – Manufacturing)
Mr P Buttler (General Manager – Ballarat)
– Mr N Zantuck (General Manager – Vic Branch) – resigned
effective 27 May 2015
–
Mr P Loimaranta (General Manager – MaxiPARTS)
– Mr A McKenzie (Group General Manager – Sales and
Distribution) – appointed 20 April 2015
–
Mr S Harkin (Group Supply Manager) – appointed
9 February 2015
(b) Directors’ transactions in shares
Directors and their related entities acquired 1,064,834 existing ordinary shares in MaxiTRANS Industries Limited
during the year.
(c) Director and other key management personnel transactions
MaxiTRANS Industries Limited and controlled entities paid legal fees of $621,204 (2014: $769,147) to Minter Ellison
of which Mr I. Davis was a senior partner during the year. All dealings were in the ordinary course of business and
on normal commercial terms and conditions. Amounts owing at year end total $nil (2014: $nil).
MaxiTRANS Industries Limited and controlled entities paid consulting fees of $1,470,406 (2014: $2,369,566) to
UXC Red Rock Pty Ltd, a subsidiary of UXC Limited of which Mr G Lord is Deputy Chairman. All dealings were in
the ordinary course of business and on normal commercial terms and conditions. During the year, the contractual
arrangements between the parties came to an end. Amounts owing at year end total $nil (2014: $nil).
Apart from the details disclosed in this note, no key management personnel have entered into a material contract with
the Company or the Group since the end of the previous financial year and there were no material contracts involving
directors’ interests existing at year–end.
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
16. RELATED PARTY DISCLOSURES (continued)
(d) Transactions with joint venture
During the year the Group derived revenue from the joint venture of $35,668,496 (2014: $38,212,000) for the sale
of new units, parts and the provisions of services. Amounts receivable from the joint venture at year end total
$6,838,947 (2014: $3,772,000).
During the year the Group paid for services and parts from the joint venture totalling $1,268,351 (2014: $1,254,000).
Amounts owing at year end total $37,573 (2014: $55,000).
All dealings were in the ordinary course of business and on normal commercial terms and conditions.
(e) Key management personnel remuneration
The key management personnel remuneration (see Remuneration Report) is as follows:
Short–term employee benefits
Post–employment benefits
Share based payment benefits
Consolidated
2015
$’000
2,761
313
392
3,466
2014
$’000
2,719
267
452
3,438
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
17. PARENT ENTITY
As at 30 June 2015 and throughout the financial year ending on that date, the parent company of the Group was MaxiTRANS
Industries Limited.
Results of the parent company
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income
Financial position of the parent company
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Total equity of the parent company comprising of:
Issued capital
Reserves
Retained earnings
Total equity
Parent company investment in subsidiaries and joint ventures
–
Company
2015
$’000
11,659
11,659
36,763
83,863
400
400
2014
$’000
19,766
–
19,766
57,836
91,102
983
983
83,463
90,119
56,386
1,181
25,896
83,463
56,386
1,161
32,572
90,119
Investments in subsidiaries and joint ventures are carried at historical cost in the parent company less, where applicable,
any impairment charge.
Parent company contingencies
At any given point in time, the parent company may be engaged in defending legal actions brought against it. The directors
are not aware of any such actions that would give rise to a material contingent liability to the parent company.
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
18. CONTROLLED ENTITIES
Particulars in relation to controlled entities
Country of
incorp.
Class of
shares
Interest held
2015 %
2014 %
The Company:
MaxiTRANS Industries Limited
Controlled entities of
MaxiTRANS Industries Limited:
MaxiTRANS Australia Pty Ltd
– Transport Connection Pty Ltd
Transtech Research Pty Ltd
Trail Truck Parts Pty Ltd (i)
MaxiTRANS Industries (N.Z.) Pty Ltd
Peki Pty Ltd (i)
Ultraparts Pty Ltd (i)
MaxiTRANS Services Pty Ltd
MaxiTRANS Finance Pty Ltd (i)
Lusty EMS Pty Ltd
Hamelex White Pty Ltd (i)
MaxiPARTS Pty Ltd (formerly Colrain Pty Ltd)
– Colrain Queensland Pty Ltd
– Colrain (Albury) Pty Ltd
– Queensland Diesel Spares Pty Ltd (formerly Colrain
(Ballarat) Pty Ltd) (i)
– Colrain Pty Ltd (formerly Colrain (Geelong) Pty Ltd) (i)
– MaxiPARTS (Qld) Pty Ltd (formerly Queensland Diesel
Spares Pty Ltd)
MaxiTRANS Employee Share Plan Pty Ltd
MaxiTRANS (China) Limited (i)
Yangzhou Maxi–CUBE Tong Composites Co Ltd
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Hong Kong
China
(i) Dormant entity
19. DEED OF CROSS GUARANTEE
Ord.
Ord
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
100
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
The Company, together with its subsidiaries, MaxiTRANS Australia Pty Ltd, Transtech Research Pty Ltd, Lusty EMS Pty Ltd,
Peki Pty Ltd, MaxiTRANS Industries (N.Z.) Pty Ltd, MaxiPARTS Pty Ltd (effective 1 September 2008, previously ineligible) and
Queensland Diesel Spares Pty Ltd (effective 22 June 2012, previously ineligible) each of which are incorporated in Australia,
entered into a “Deed of Cross Guarantee” so as to seek the benefit of the accounting and audit relief available under Class
Order (98/1418) made by the Australian Securities & Investments Commission which was granted on 30 June 2006.
A consolidated statement of comprehensive income and consolidated balance sheet, comprising the Company and
controlled entities which are party to the Deed, after eliminating all transactions between parties to the Deed of Cross
Guarantee, for the year ended 30 June 2015 is set out as follows:
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
19. DEED OF CROSS GUARANTEE (continued)
Consolidated statement of comprehensive income
Total revenue
Raw materials and consumables used
Other income
Employee expenses
Depreciation and amortisation expenses
Impairment loss on intangible assets
Finance costs
Other expenses
Share of net profits of joint ventures accounted
for using the equity method
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Items that may subsequently be re-classified to profit or loss:
Net exchange difference on translation of financial
statements of foreign operations
Other sundry movements
Items that will never be re-classifed to profit or loss:
Revaluation of land and buildings
Related tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income for the year
Profit attributable to:
Equity holders of the company
Total comprehensive income attributable to:
Equity holders of the company
60
Consolidated
2015
$’000
2014
$’000
294,824
310,661
(172,807)
(176,203)
90
(79,809)
(4,857)
(2,580)
(2,322)
(27,671)
997
5,865
361
(81,413)
(4,959)
–
(1,939)
(25,516)
1,471
22,463
(1,197)
(5,628)
4,668
16,835
(558)
(81)
3,127
(917)
1,571
6,239
1,390
(6)
2,583
(775)
3,192
20,027
4,668
16,835
6,239
20,027
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
19. DEED OF CROSS GUARANTEE (continued)
Consolidated balance sheet
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total Current Assets
Non-Current Assets
Investment in joint venture
Investments in controlled entities
Property, plant & equipment
Intangible assets
Deferred tax assets
Other
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Current tax liability
Provisions
Total Current Liabilities
Non-Current Liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Provisions
Other
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained profits
Total Equity
Consolidated
2015
$’000
2,974
37,284
49,886
3,123
93,267
3,926
7,294
63,631
37,895
288
1,157
2014
$’000
2,942
37,131
50,501
2,371
92,945
3,994
7,294
54,321
41,601
–
818
114,191
108,028
207,458
200,973
35,686
1,069
291
11,747
48,793
42,036
311
1,152
244
43,743
92,536
32,163
1,936
89
9,826
44,014
38,181
1,714
1,012
119
41,026
85,040
114,922
115,933
56,386
13,612
44,924
56,386
12,222
47,325
114,922
115,933
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
20. INVESTMENT IN JOINT VENTURE
Name of Entity
Principal Activity
Trailer Sales Pty Ltd
Trailer retailer. Repairs and service provider.
Sale of spare parts within Australia,
which is the country of incorporation.
Ownership
2015
%
36.67
2014
%
36.67
$’000
2015
2014
Revenues
(100%)
Net
profit
after tax
(100%)
Share of
joint venture
profit
recognised
Total
assets
Total
liabilities
Net assets as
reported by
joint venture
64,765
71,667
2,718
4,012
997
1,471
23,069
22,081
13,489
12,315
9,580
9,766
Commitments
The share of the joint venture’s capital commitments contracted but not provided for or payable within one year was $nil
at 30 June 2015 (2014: $nil).
21. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a) Reconciliation of cash flows from operating activities with operating profit/(loss) after tax
Consolidated
2015
$’000
2014
$’000
4,463
17,145
5,643
2,580
(43)
(997)
(264)
(202)
269
584
2,316
(1,229)
(3,175)
2,193
5,409
–
(238)
(1,471)
598
(1,640)
627
715
3,370
(8,353)
(293)
743
12,138
16,612
Profit for the year
Non cash items in operating profit
Depreciation/amortisation of assets
Impairment loss on intangible assets
Profit on sale of fixed assets
Share of joint venture profit
Share based payments expense
Change in assets & liabilities
(Increase)/decrease in receivables
(Increase)/decrease in other assets
(Increase)/decrease in inventories
Increase/(decrease) in trade payables
and other liabilities
Increase/(decrease) in income tax payable
Increase/(decrease) in deferred taxes
Increase/(decrease) in provisions
Net cash flows from operating activities
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
21. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
(b) Non-cash financing and investing activities
Acquisition of plant & equipment by means of finance leases
These acquisitions are not reflected in the consolidated statement of cash flows.
22. CAPITAL AND LEASING COMMITMENTS
(a) Operating lease commitments
Future operating lease rentals not provided for in the financial statements and payable:
– not later than 1 year
– later than 1 year but not later than 5 years
– later than 5 years
Total operating lease commitments
Consolidated
2015
$’000
2014
$’000
684
1,007
4,907
8,789
4,452
4,616
7,316
228
18,148
12,160
The Group leases property under operating leases expiring from one to ten years. Leases generally provide the Group with
a right of renewal at which time all terms are renegotiated.
(b) Capital expenditure commitments
Payable
– not later than 1 year
– later than 1 year but not later than 5 years
Total capital expenditure commitments
23. CONTINGENT LIABILITIES
–
9,715
9,715
6,706
2,370
9,076
At any given point in time the Group may be engaged in defending legal actions brought against it. In the opinion of the
directors such actions are not expected to have a material effect on the Group’s financial position.
24. REMUNERATION OF AUDITOR
Remuneration of the auditor of the Company for:
$
$
KPMG Australia:
– auditing and reviewing the financial statements
– other services (taxation & advisory)
Overseas KPMG Firms:
– auditing and reviewing financial statements
– other services (taxation, advisory & due diligence)
Total
286,200
55,590
229,900
225,497
341,790
455,397
76,350
28,916
105,266
65,503
7,897
73,400
447,056
528,797
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
25. FINANCIAL INSTRUMENTS
(a) Risk management framework/policies
The Groups key activities include the design, manufacture, sale, service and repair of transport equipment and related
component and spare parts. These activities expose the Group to a variety of financial risks, including liquidity risk, credit
risk and market risk such as currency and interest rate risk.
The Group’s financial risk management program seeks to minimise the potential adverse effects of the unpredictability
of financial markets on the financial performance of the Group by utilising derivative financial instruments for purchase
of supplies and raw materials. The Group measures risk exposure through sensitivity analysis in the case of currency risk,
cash flow forecasting and ageing analysis for credit risk.
(b) Interest rate risk
The Group is exposed to interest rate risk as it borrows at both fixed and floating interest rates. The risk is managed by the
use of fixed interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined
risk appetite, ensuring optimal hedging strategies are applied, by either positioning the statement of financial performance
or protecting interest rate expense through different interest rate cycles.
As at reporting date the interest rate profile of the Group’s interest bearing financial instruments were:
Borrowings – fixed rate
Borrowings – floating rate
2015
$’000
21,070
26,232
47,302
2014
$’000
31,867
10,713
42,580
As at reporting date, if interest rates on borrowings had moved as illustrated in the table below, with all other variables held
constant, post tax profit for the year would have been affected as follows:
100bp increase
100bp decrease
(c) Currency risk
2015
$’000
(136)
136
2014
$’000
(110)
110
The Group is exposed to foreign currency risk on purchases that are denominated in foreign currency, primarily United
States Dollars. Derivative financial instruments (forward exchange contracts) are used by the Group to economically hedge
exposure to exchange rate risk associated with foreign currency transactions.
Forward exchange contracts
The following table summarises the US Dollar forward exchange contracts outstanding as at the reporting date:
Average Exchange Rate
Foreign Currency
Contract Value
Fair Value
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
Buy USD Dollar
0.8292
0.9278
2,637
4,337
3,180
4,675
297
(33)
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
25. FINANCIAL INSTRUMENTS (continued)
As at reporting date, if the Australian Dollar had moved against the US Dollar currency as illustrated in the table below,
with all other variables held constant, post tax profit for the year would have ben affected as follows:
USD 10.0 cents increase
(d) Credit risk
2015
$’000
2014
$’000
(87)
(318)
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group is exposed to credit risk from its operating activities, primarily from trade and other receivables
and financing activities, including deposits with financial institutions. The carrying amount of these financial assets at
year-end represented the Group’s maximum exposure to credit risk.
The Group has a policy of only dealing with creditworthy counterparties and obtaining sufficient security where
appropriate, as a means of mitigating the risk of financial losses from defaults. The Group does not have any significant
credit risk exposure to any single counter party. The majority of accounts receivable are due from entities within the
transport industry.
Guarantees
Performance guarantees of $1,414,194 (2014: $561,448) are held by Australia and New Zealand Banking Group Limited
on behalf of MaxiTRANS Australia Pty Ltd and MaxiPARTS Pty Ltd.
(e) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group
manages liquidity risk by maintaining adequate cash reserves, committed banking facilities and reserve borrowing
facilities and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities.
The Group’s liquidity management policies include Board approval of all changes to debt facilities including the terms of
fixed rate debt. The liquidity management policies ensure that the Group has a well diversified portfolio of debt, in terms
of maturity and source, which significantly reduces reliance on any one source of debt in any one particular year. Liquidity
risk is managed by the Group based on net inflows and outflows from financial assets and financial liabilities.
The following table summarises the maturities of the Group’s financial assets and liabilities based on the remaining
earliest contractual maturities, excluding net interest payable on borrowings.
30 June 2015
Carrying
Amount
$’000
6 months
or less
$’000
6–12
months
$’000
1–2
years
$’000
2–5
years
$’000
Trade and other payables and accruals
Borrowings
(43,216)
(47,302)
(43,216)
(4,767)
–
(499)
–
(30,701)
–
(11,335)
Effect of Derivative Instruments
– Forward exchange contracts
277
277
–
–
–
(90,241)
(47,706)
(499)
(30,701)
(11,335)
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
25. FINANCIAL INSTRUMENTS (continued)
30 June 2014
Carrying
Amount
$’000
6 months
or less
$’000
6–12
months
$’000
1–2
years
$’000
Trade and other payables and accruals
Borrowings
(41,040)
(42,580)
(41,040)
(2,342)
–
(2,057)
–
(30,389)
2–5
years
$’000
–
(7,792)
Effect of Derivative Instruments
– Forward exchange contracts
Finance facilities
(46)
(46)
–
–
–
(83,666)
(43,428)
(2,057)
(30,389)
(7,792)
At year end, the Group had the following financing facilities in place with its bankers:
Loan facility
Overdraft facility
Multi-option facility
Facility Amount
Utilised
Available
2015
$’000
2014
$’000
2015
$’000
2014
$’000
2015
$’000
2014
$’000
64,196
2,000
13,000
63,421
2,000
13,000
45,196
–
2,106
39,713
–
2,867
19,000
2,000
10,894
23,708
2,000
10,133
79,196
78,421
47,302
42,580
31,894
35,841
The loan, overdraft and other facilities are fully secured by a registered charge (mortgage debenture) over the whole of
the assets and undertakings of the Group and a registered mortgage over certain land and buildings of controlled entities.
Core Australian and New Zealand loan facilities of $75.0m mature as follows, subject to continuing compliance with the terms
of the facilities:
– $45.0m in December 2016;
– $30.0m in December 2018.
Interest rates are a combination of fixed and variable.
The MTC (China) core loan facility is an at-call facility of RMB 20.0m. Subsequent to the end of the financial year, ANZ
Banking Group in China replaced China Merchant Bank and has provided debt facilities guaranteed by the parent company
totalling RMB 25.0m to MTC.
The terms and conditions of the bank facilities contain covenants in relation to gearing ratio, interest cover and EBITDA ratio.
These covenants have been satisfied during the 2015 and 2014 financial years.
(f) Fair value
Determination of fair value
Net fair value has been determined in respect of financial assets and financial liabilities, with reference to the carrying
amount of such assets and liabilities in the consolidated balance sheet, determined in accordance with the accounting
policies disclosed in Note 1 to the financial statements.
The carrying amount approximates estimated net fair value for the Group’s financial assets and liabilities.
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015––
25. FINANCIAL INSTRUMENTS (continued)
Classification of fair value
Fair Value Measurement requires that financial and non-financial assets and liabilities measured at fair value (being forward
exchange contracts, interest rate swaps and land and buildings) be disclosed according to their position in the fair value
hierarchy. There were no transfers between levels within the fair value hierarchy at 30 June 2015.
Level 1 is based on quoted prices in active markets for identical items;
Level 2 is based on quoted prices or other observable market data not included in level 1;
Level 3 valuations are based on inputs other than observable market data.
Forward exchange contracts and interest rate swaps are classified as Level 2 and their fair value is determined by reference
to observable inputs from active markets or prices from markets not considered active. They are priced with reference to
an active yield or rate, but with an adjustment applied to reflect the timing of maturity dates.
The fair value of forward exchange contracts and interest rate swaps at balance date is as follows:
Derivative assets
Derivative liabilities
2015
$’000
22
–
2014
$’000
–
185
Land and buildings are classified as Level 3 and their fair value reflects the use of directly unobservable market inputs in their
valuation, including assumptions about rents, yields and discount rates obtained from analysed transactions.
Valuations have been performed at 30 June 2015 by external, independent property valuers, having appropriate recognised
professional qualifications and recent experience in the location and category of the property being valued. The valuation
technique is based on the highest and best use to market participants.
The following table present changes in the fair value of land and buildings during 2014/15, including changes to the unobservable
inputs.
Opening balance as at 1 July 2014
Fair value revaluation
Depreciation recognised in the statement of profit and loss
Exchange rate variance
Closing balance as at 30 June 2015
26. EVENTS SUBSEQUENT TO BALANCE DATE
Land and Buildings
$’000
37,174
3,127
(494)
(473)
39,334
There have been no events subsequent to the reporting date which would have a material effect on the Group’s financial
statements for the year ended 30 June 2015.
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont)FOR THE YEAR ENDED 30 JUNE 2015ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
INDEPENDENT AUDITOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2015
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF MAXITRANS INDUSTRIES LIMITED
REPORT ON THE FINANCIAL REPORT
We have audited the accompanying financial report of
MaxiTRANS Industries Limited (the Company), which
comprises the consolidated balance sheet as at 30 June 2015,
and consolidated statement of profit or loss, consolidated
statement of comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows
for the year ended on that date, notes 1 to 26 comprising
a summary of significant accounting policies and other
explanatory information and the directors’ declaration
of the Group comprising the Company and the entities
it controlled at the year’s end or from time to time during
the financial year.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the
preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards
and the Corporations Act 2001 and for such internal control
as the directors determine is necessary to enable the
preparation of the financial report that is free from material
misstatement whether due to fraud or error. In note 1,
the directors also state, in accordance with Australian
Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements of the Group
comply with International Financial Reporting Standards.
We performed the procedures to assess whether in all
material respects the financial report presents fairly, in
accordance with the Corporations Act 2001 and Australian
Accounting Standards, a true and fair view which is consistent
with our understanding of the Group’s financial position
and of its performance.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the
independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a) the financial report of the Group is in accordance
with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial
position as at 30 June 2015 and of its performance
for the year ended on that date; and
(ii) complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
(b) the financial report also complies with International
Financial Reporting Standards as disclosed in note 1.
Auditor’s responsibility
REPORT ON THE REMUNERATION REPORT
Our responsibility is to express an opinion on the financial
report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These
Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance
whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks
of material misstatement of the financial report, whether
due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the
entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation
of the financial report.
We have audited the Remuneration Report included in
pages 18 to 24 of the directors’ report for the year ended
30 June 2015. The directors of the Company are responsible
for the preparation and presentation of the remuneration
report in accordance with Section 300A of the Corporations
Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in
accordance with auditing standards.
Auditor’s opinion
In our opinion, the remuneration report of MaxiTRANS
Industries Limited for the year ended 30 June 2015,
complies with Section 300A of the Corporations Act 2001.
KPMG
Melbourne
21 August 2015
Tony Romeo
Partner
KPMG, an Australian partnership and member firm of the KPMG
Liability limited by a scheme approved under Professional
network of independent member firms affiliated with KPMG
Standards Legislation
International Cooperative ("KPMG International"), a Swiss entity.
68
AUSTRALIAN STOCK EXCHANGE
ADDITIONAL INFORMATION
FOR THE YEAR ENDED 30 JUNE 2015
Additional information required by the Australian Stock
Exchange Limited Listing Rules and not disclosed elsewhere
in this report.
Distribution of shareholders
(As at 31 July 2015)
Category – No of shares
No of shareholders
SHAREHOLDINGS
Substantial shareholders
The names of the substantial shareholders listed in the
Company’s register as at 31 July 2015 are:
Ordinary shares
Transcap Pty Ltd & related parties
HGT Investments Pty Ltd
25,547,972
19,250,000
Voting rights
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
568
1,348
862
1,603
192
4,573
Shareholders with less than a marketable parcel
As at 31 July 2015, there were 641 shareholders holding
less than a marketable parcel of 1,220 ordinary shares
($0.41 on 31 July 2015) in the Company totalling 422,583
ordinary shares.
As at 31 July 2015, there were 4,573 holders of ordinary
shares of the Company.
On market buy-back
There is no current on-market buy-back
Subject to the Constitution of the Company, holders
of ordinary shares are entitled to vote as follows:
(a) every shareholder may vote;
(b) on a show of hands every shareholder
has one vote;
(c) on a poll every shareholder has:
(i) one vote for each fully paid share; and
(ii) for each partly paid share held by the
shareholder, a fraction of a vote equivalent
to the proportion which the amount paid
(not credited) is of the total amounts paid
and payable (excluding amounts credited)
on the share.
As at 31 July 2015, there were no unquoted options over
unissued ordinary shares.
69
ANNUAL REPORT 2015MAXITRANS INDUSTRIES LIMITED
AUSTRALIAN STOCK EXCHANGE
ADDITIONAL INFORMATION (cont)
FOR THE YEAR ENDED 30 JUNE 2015
TWENTY LARGEST SHAREHOLDERS – ORDINARY SHARES AS AT 31 JULY 2015
Name
HGT Investments Pty Ltd
Transcap Pty Ltd
Citicorp Nominees Pty Ltd
Toroa Pty Ltd
J P Morgan Nominees Australia Limited
HSBC Custody Nominees Australia Limited
BKI Investment Company Limited
National Nominees Limited
De Bruin Securities Pty Ltd
Sandhurst Trustees Limited
John E Gill Trading Pty Ltd
Aust Executor Trustees Limited
Mr E D Ross
John E Gill Operations Pty Ltd
Mr J R Curtis
Mahata Pty Ltd
Navigator Australia Limited
Denvorcorp Holdings Pty Ltd
Tanerka Pty Ltd
Belgravia Strategic Equities Pty Ltd
TOTAL
Number of fully paid
ordinary shares held
Percentage held of
issued ordinary shares
19,750,000
17,935,549
12,146,097
4,968,592
4,515,926
3,629,978
2,800,000
2,275,123
2,129,773
2,128,958
1,821,645
1,618,863
1,406,540
1,391,657
1,328,439
1,315,392
1,303,665
1,302,193
1,276,100
939,604
10.67%
9.69%
6.56%
2.68%
2.44%
1.96%
1.51%
1.23%
1.15%
1.15%
0.98%
0.87%
0.76%
0.75%
0.72%
0.71%
0.70%
0.70%
0.69%
0.51%
85,984,094
46.43%
70
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MAXITRANS INDUSTRIES LIMITED
ANNUAL REPORT 2015
71
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