Looking closer
at the big picture
ANNUAL REPORT 2019
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MaxiTRANS Industries Limited
ACN 006 797 173
2019 Financial Highlights
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declared per share (cents)
You’ll see a company that is much
more than the sum of its parts
Contents
2019 Highlights
Who we are
Chairman’s Report
Managing Director’s Review
Our Strategy
Safety and People
MaxiPARTS
Australian Trailers
International
Board of Directors
Executive Leadership Team
Financial Report
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2019 Highlights
ANNUAL REPORT 2019
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O
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Total Recordable Injury Frequency Rate (TRIFR)
From FY18 to current rolling 12 month TRIFR
48%
Women in senior
management roles
24.4%
2018 Employee
Engagement Score
9%
Programs & systems launched
FY19 Revenue
• Launched leadership
development programs
for all frontline Managers,
as well as Executive and
Senior Management Teams
$352m
• Management ERP system
went live 2 October 2018
Capital Reallocation
• Launched employee recognition
program (recognising employees
living the MaxiTRANS values)
Sale of MTC
and acquisition
of Trout River
Australia
Manufacturing efficiency
MaxiPARTS Revenue
7%
in last 12 months
4.9%
on PCP
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MAxITRANS INDUSTRIES
We are Australasia’s largest trailer
equipment & support distribution network
Our businesses regional footprint
• One of the largest suppliers
of truck and trailer parts
to the road transport industry
in Australia through the
MaxiPARTS wholesale and
retail network
• Australia’s largest supplier
of locally manufactured,
high quality engineered road
transport trailer solutions
including trailer repairs,
service and rental
• A major player in the
New Zealand road transport
trailer industry
Trailer Dealers
MaxiPARTS Outlets
Our purpose
At MaxiTRANS, we are leading our
industry to become safer and more
efficient, so that our customers can
better deliver the needs of a nation
ANNUAL REPORT 2019
3
We are well positioned
and ready for growth
MaxiPARTS Business
Trailers Business
• A national store footprint in the
• Strong brand heritage and
right locations
reputation
• Technology enabled customer
solutions
• Scale benefits from being
associated with the largest
trailer manufacturer
• Broadest range of products,
national distribution and
service capability
• Innovation driving leadership
in product safety and quality
• Breadth of range and product
expertise
• Multiple manufacturing sites across
two Australian states and NZ
36%
FY19 Segment
Revenue Contribution
51%
FY19 Segment
Profit Contribution
64%
49%
Our values
Send all our people
home safely
A balanced focus on
customers and results
Enable and empower
people to achieve
results
Be honest, forthright
and ethical in our
dealings
Encourage collaboration
and deep seated
accountability
Become better every
day in all that we do
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MAxITRANS INDUSTRIES
Chairman’s Report
Dear Shareholder,
Last year we talked of our focus on
operations to improve efficiencies as
well as establishing the safety of our
people as a daily priority. We also set out
the pillars of our strategy and developing
a diverse organisation capable to carry
us forward into the next phase.
While our performance this year did not
meet our expectations, we did make
progress on these, which I will discuss
a little later.
Having experienced a difficult first half
due to the implementation of the ERP
System we expected a strong second
half. However the weak economic
conditions in our end markets resulted in
a downturn in orders with an associated
reduction in revenue. We regard the
annual result overall as unacceptable.
I feel it incumbent upon me to speak
in more depth about the TRANSform
project (new IT/ERP system). As you
are aware, the core of the new ERP
system has now been implemented
but not without significant costs to the
business, exacerbated by the amount
of time, that was not foreseen, to
complete its long overdue introduction.
The final module will be delivered in
FY20. The previous systems were at
an end of life point and replacement
was essential in order to mitigate
significant risk to the business.
However, once we embarked on
this journey, it became clear that the
trajectory could neither be adapted
midway, nor its costs curtailed. We
do remain bolstered by the fact that
the new system has removed the
existing risk to the business and has
been a necessary step in delivering
the benefits of our operational
excellence strategy in the longer-term.
As was the goal for FY19, manufacturing
efficiency improved in both NZ and
Ballarat plants and despite reducing
volumes the Ballarat plant recorded
excellent efficiencies in quarter
4 of the financial year. Perhaps even
more pleasing was a 48% reduction
in recordable injuries in the year, an
example of our value of “sending our
people home safely” in action.
Notwithstanding, it has indeed been a
challenging time, out of which we have
found ourselves entering into weaker
trading conditions with the drought,
difficult financing environments, housing
construction decline and reducing
consumer confidence impacting both
the Trailer and to a lesser extent the
MaxiPARTS businesses .
The decision not to pay an interim
dividend was driven by a combination
of heavy TRANSform Capital
expenditure over the prior year
and weaker trading due to a
challenging economic environment.
MaxiPARTS continues to grow in
strength and demonstrates itself
as a first class distribution asset
representing 49% of Group underlying
Net Profit Before Tax (NPBT) after
corporate allocation. This growth
goes some way in offsetting the softer
order intake for new trailers being
experienced during this downturn.
Moreover, we can be further confident
in relation to the introduction of Trout
River Live Bottom Trailers into the
group – expanding our portfolio of
market leading brands and meeting our
internal expectations since acquisition.
As self-regulation increases within the
infrastructure sector, it is resulting in
greater demand for safer solutions, such
as that provided by live bottom trailers.
In summary, the directors acknowledge
and accept that our shareholders will
be disappointed with this year’s result.
MaxiTRANS has experienced a challenging year and
recognizes the pain this is causing our shareholders.
In closing out the second half we have strengthened
our balance sheet position and the manufacturing
operations are now working well.
Looking ahead, the end market for trailers and parts is
challenging and we expect these external conditions to
continue for some time to come, we will be in a much better
position though to respond when conditions do change.
We thank you for your ongoing support.
We remain resolute and confident
that we are correctly positioned to
come through this period stronger and
better prepared and look forward to an
improving market.
Robert H. Wylie
Chairman
We are also committed to weathering
through the current environment as we
have done so many times before and
we maintain a level of focus to be ready
to take advantage of positive market
changes when they come as they
undoubtedly will.
The ability to be well positioned
for economic recovery, in part lies
with ensuring MaxiTRANS retains
and develops our diverse skillbase,
improving manufacturing technology and
continually improving other processes to
bring about further efficiencies.
In spite of the current difficult climate,
there are several positives about which
we can be confident and together still
deliver on our strategy of growth in
existing markets.
Managing Director’s Review
ANNUAL REPORT 2019
5
as a result of an increase in working
capital. This operating cash outflow
as well as the $8.5m reduction in net
debt and the continued investment
in the group’s core IT transformation
program have been funded through the
sale and leaseback of the Richlands
and New Zealand properties. Net debt/
equity at the end of FY19 was 26%,
a continued improvement on prior year
and when adjusted for the significant
non-cash impairment is 22%, reflecting
a significant improvement in the net
debt position over FY18. The group’s
financial position remains steady and
we have headroom in our debt facilities,
enabling the business to work through
the current decline in the trailer and
commercial parts markets.
MaxiPARTS Parts Business
The MaxiPARTS business experienced
continued revenue and profit growth
from ongoing success of its European
after-market truck parts and North
American after-market engine parts
as well as growth in its large fleet
customers supported by the continued
success of the MaxiSTOCK customer
inventory management system.
MaxiPARTS continues to operate as
a key supplier to our manufacturing
and service facilities, thus ensuring
parts and component procurement is
leveraging the company’s full scale,
procurement and logistics capability.
The strategic intent to drive sales
volume increase through our existing
national wholesale and retail network
of 20 locations together with tight cost
control resulted in continued growth
in profitability over the prior year.
The Group has continued its approach
to innovation during FY19 with the
acquisition of Trout River Live Bottom
Trailers in December 2018. The
operations have integrated well into
MaxiTRANS, meeting its business case
objectives for the current financial year
and continues the Group’s strategic
intent to develop in existing markets
and deliver ever safer, more efficient
transport solutions.
In October 2018, the Group launched
the new ERP system across the
manufacturing business. The Group
expected an operational decline
during the launch phase of the project,
the operational impact continued
into the third quarter of the year.
I am pleased to report that, as we
closed out the financial year, we have
resolved these operational issues
and are now delivering trailers at
levels of approximately 90% on-time
delivery. Traditionally a good long-run
value which has occurred in parallel
with excellent operating metrics for
efficiency and lost time.
Looking forward, the Group continues
to deliver on its manufacturing strategy
to mitigate the single point of reliance
on the Ballarat manufacturing facility.
A new Queensland manufacturing facility
is currently under development that will
see the next phase of capacity growth
in Queensland. Not only does this reduce
long-term strain on the Ballarat facility
but it enables MaxiTRANS to better
support the growing Northern NSW and
Queensland markets whilst realising
operating efficiency on the present
Queensland manufactured products.
International Business
Australian Trailer Business
New Zealand
The Australian trailer market has
seen a decline throughout FY19, most
significantly in the second half of the
year, driven by the macro economic
conditions across Australia affecting
consumer confidence and therefore
consumer spending across the
economy. In reviewing the Australian
trailer business’ performance through
FY19, the combination of the overall
market decline, a negative sales mix
and no longer having the one-off effect
of the Coles Supermarket order from
FY18 has seen a revenue decline of
19% to $223.9m for FY19.
The New Zealand business has
continued its growth in FY19 with better
labour efficiencies and the prior year
warranty issues put behind it. This
underlying business improvement was
partially offset by softening market
demand driven by some of its larger
customers putting off their fleet
replenishment in favour of other
capital projects. The first full year of
the Christchurch service facility has
been a great success and assisted the
New Zealand business to deliver a
125% year-on-year earnings growth.
MaxiTRANS has continued to see
outstanding results within Health
Safety Environment (HSE) and
wellbeing, with an all-time low total
injury frequency rate of 21. This is
a massive 48% decrease compared
to last year and continues the trend of
reductions in injuries since FY15. It is
a fantastic achievement and is helping
towards achieving our core value
of ‘Send all our people home safely’.
MaxiTRANS’ performance for the year
ended 30th June 2019 reflects the effects
of the depressed economic conditions
throughout the Australian economy,
the decline in housing construction
and the drought, on both MaxiTRANS
business segments. The Australian
trailer market has seen a continued
decline throughout the year resulting
in trailer sales being 100 to 150 units
below expectations. The Australian
commercial vehicle spare parts market
was between 5% and 10% below the
like for like period in FY18, however the
MaxiPARTS business has continued to
grow both revenue and profit year-on-
year through a number of initiatives
ranging across product, customers
and operational excellence.
From a financial perspective, revenue
decreased over the year, largely due
to the Australian trailer sales business
experiencing a combination of the
one-off effect of the Coles contract
in FY18, a negative mix effect and the
aforementioned market slowdown.
The MaxiPARTS business has actually
continued its revenue growth year on
year through the continued success of
its European aftermarket truck parts
and North American aftermarket
engine parts as well as continued
success in growing its large fleet
customers.
Operating cash outflow of $6.1m
represented a $25.9m decline in
cash generation over the prior year,
6
MAxITRANS INDUSTRIES
Managing Director’s Review (Cont.)
Outlook
It is expected market conditions in the
Australian trailer market will continue
to be slow as consumer confidence
and other macro-economic drivers
remain soft and operators continue to
age their fleets. This is likely to affect
performance in both the Australian
trailer business as well as the
underlying MaxiPARTS parts business.
Despite weaker underlying MaxiPARTS’
end markets, the organic growth
initiatives planned should more than
offset this over the full year.
In the short term, order intake remains
consistent, in the food and grocery
sectors, benefiting our Maxi-CUBE
products. Whilst the general freight and
tipper order intake is lower than the
last financial year. These product lines
are directly affected by the broader
economic conditions, the crop outlook
and the timing of commencement of
new housing and infrastructure projects.
The significant investment in the new IT
systems is substantially complete and
is expected to be completed over the
next financial year. This will be a key
enabler to driving operational efficiency
through the business resulting in strong
operating cashflow in future years.
The Group continues to execute upon
its corporate strategy to not only
improve the operational efficiency
in our current business but also to
pursue growth opportunities in our
existing markets, looking to identify
new market opportunities, all with the
aim of improving shareholder returns.
Underlying this will be a continued
focus on improving our safety
performance to not only ensure we
send our people home safely but that
MaxiTRANS’ products design also send
our customer’s people home safely.
Dean Jenkins
Managing Director and CEO
Our strategy to grow
OUR STRATEGY
VALUE ENABLERS
• Partner with
operators in
the freight
transport
business
to improve
efficiency and
effectiveness.
Add value
by reducing
customers’
operating risks.
ORGANISATIONAL
DEVELOPMENT AND
CORPORATE IMAGE
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An organisation
empowered to grow in
The MaxiTRANS Way
Build on industry
leadership position
focussing on safety,
reliability & efficiency
1
Embed The
MaxiTRANS Way
• Launched tailored
training programs
designed to build
leadership capability,
founded on our
core values and
competencies
• Launched employee
recognition program
• Send all our
people home safely.
48% reduction in our
Total Recordable
Injury Frequency Rate
(TRIFR) from FY18
to the current rolling
12 month TRIFR
• 9% increase in
employee engagement
from 2017
• Increased collaboration
through quarterly
Executive and Senior
Leadership workshops
• Monthly site
collaboration events
ANNUAL REPORT 2019
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VALUE GENERATORS
VALUE CREATION
OPERATIONAL EXCELLENCE
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Drive efficiency and margin improvement
1
2
3
Implement ERP system
and continuous
improvement initiatives
Implement common
end to end business
processes and quality
management system
Optimise supply
chain efficiencies and
footprint
• ERP system went live
in all MaxiTRANS
Australian manufacturing
sites in October 2018
• YOY savings at operating
level in excess of $2m
over NZ and Australia
manufacturing
• New warehouse in
Ballarat optimises
material flow
• Material savings
driving gross margin
improvement
GROWTH IN EXISTING MARKETS
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Revenue growth; improved asset utilisation
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2
3
Grow national market
share in trailers
Increase volume
in parts business
Grow share
in service
• Expand footprint:
• Product additions
• 3 new 24 hour
Trout River
• New products:
Base model now
approximately 19%
of General Freight
sales
outstripping internal
plans
• Integrated MaxiTRANS /
large fleet relationships
driving volume increase
breakdown vans
launched successfully.
• EBIT $500k up against
PCP on same revenue
Industry Leader
• Trusted
business
partner
• Safety &
efficiency
• Employer
of choice
Earnings & cash
flow growth
Improving return
on capital
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MAxITRANS INDUSTRIES
Safety and People
MaxiTRANS has continued to
see outstanding results within
Health Safety Environment (HSE)
and wellbeing.
Safety
• This is a massive 48% reduction over prior year.
MaxiTRANS has continued to see
outstanding results within Health
Safety Environment (HSE) and
wellbeing, with an all-time low total
injury frequency rate of 21.
This is a massive 48% decrease
compared to last year and continues
the trend of reductions in injuries since
FY15. It is a fantastic achievement and is
helping towards achieving our core value
of ‘Send all our people home safely’.
To achieve this result we have focused
on building systems, assessing risks,
enhancing leadership and improving our
culture to ensure sustainable change.
Safety Leadership Training has been
introduced amongst managers and
supervisors, outlining responsibilities;
driving cultural change and tips on
how to be good safety leaders. We have
implemented an Early Intervention
Program to treat minor injuries and
implemented stretching programs to
reduce Musculoskeletal Disorders (MSD).
MaxiTRANS has witnessed the culture
of undertaking safety observations
increase by 23% over FY18. Actively
having conversations with teammates
about safety and the emphasis on
the importance of safety has helped
bring about this systemic change and
assisted to increasingly embed Safety
into the business.
People
During this year, MaxiTRANS has
introduced several people processes
including recruitment, performance,
talent and succession in order to hire
more effectively, drive deep seated
• All-time low total injury frequency rate of 21
which is helping towards achieving our core value
of “Send all our people home safely”.
• Our culture of undertaking safety observations
has increased by 23% over FY18.
• We have implemented an Early Intervention
Program to treat minor injuries.
• Pilot research project initiated to understand
the culture of diversity within MaxiTRANS.
among our senior leaders about the
importance of diversity and what it
means for MaxiTRANS. A pilot research
project was also conducted amongst a
small number of females in a variety of
roles to understand their point of view
about the culture at MaxiTRANS around
diversity. The outcome of this research
has highlighted the need for us to
invest in further in-depth research to
understand the business challenges
around Diversity and in particular
retention. The insights gleaned
from the pilot research have formed
the foundation of the first phase of
initiatives to counter these challenges.
All of these are in plan for FY19/20.
accountability and to grow the right
people in the business. MaxiTRANS
has also invested and continues to
invest heavily in Leadership programs
across frontline, middle and senior
leadership levels that will help elevate
all leaders within the business by
instilling tools and skills that will
help these leaders drive a consistent
integrated culture within MaxiTRANS.
The outcome of this investment has
seen MaxiTRANS increase employee
engagement by 9% throughout 2018.
Diversity and gender balance
Our commitment to Diversity continues
to stay strong despite the retention
challenges we have encountered.
We have maintained a 24.4% female
presence amongst our senior
Leadership team. We have held a
number of educational sessions
ANNUAL REPORT 2019
9
The focus on “sending our people home safely” has helped bring about systemic change across the business.
Total Injury
Frequency Rate
48%
Women in Senior
Management Roles
24.4%
2018 Employee
Engagement Score
9%
10
MAxITRANS INDUSTRIES
MaxiPARTS
MaxiPARTS continues to grow and
become a significant high quality
distribution asset that’s helping drive
our business forward.
Despite a slowing market impacting
our underlying business, especially
in the second half of the year,
MaxiPARTS has continued to grow both
revenue and profit through a number
of key initiatives ranging across
product, customers and operational
excellence areas.
Product
FY19 saw a continued growth of our
Euro Truck and Bus range and our
North American Engine Programs.
Although these programs have resulted
in new customers, a majority of the
growth has been a result of introducing
these new ranges to existing customers.
• 20 locations nationally.
• Portfolio includes trailer parts, after-market
truck and engine parts/consumables.
• Parts portfolio includes many leading brands,
as well as specialty products, procured to
meet customers’ specific needs.
• Rejuvenation of portfolio has included
higher-margin, value added products.
• Euro Truck and bus range
Customers
38%
yoy growth
• North American Engine program
54%
yoy growth
Both of these programs have seen
strong growth in recent years, and
we expect further growth in FY20 as
we continue to expand our range and
customer base.
FY19 saw significant growth in our
sales to large fleet customers with
MaxiPARTS increasing its share of this
segment. The MaxiSTOCK inventory
management system continues to
be a key part of our fleet solutions
offering.
Like the product initiative, we expect to
see further growth in this area in FY20
with a number of discussions with some
larger accounts currently in progress.
Margin
During FY19 we undertook a significant
operational excellence program
focused on improving margin. We are
now seeing improving margin as a
result of better control of discounting
and targeted supply chain savings.
A majority of these benefits only
impacted during the second half of
FY19, therefore we expect further
improvements in FY20 as we not only
obtain the full year effect of the work
achieved to date, but also continue
to realise further improvements.
Outside of a potential additional site
in NSW, we believe our site footprint
is not only sufficient to cover the nation
but is market leading, particularly
given our ability to use the MaxiSTOCK
inventory system to reduce the reliance
on location for key customers. Having
the right footprint means we can focus
our attention on pushing more product
through the exiting sites, allowing
us to continue to grow gross profit
at a higher rate than overhead costs.
ANNUAL REPORT 2019
11
Revenue and profit growth are primarily due to a number of key initiatives including product, customers and operational excellence.
FY19 MaxiPARTS Revenue
$133.5m
FY19 MaxiPARTS EBITDA*
$11.2m
* Excluding corporate cost allocation
FY19 Revenue
by State
23% NSW
29% VIC
10% SA
5% WA
2% NT
31% QLD
12
MAxITRANS INDUSTRIES
Australian Trailers
Despite a challenging macro-economic
environment, MaxiTRANS is poised for
growth and continues to be Australia’s
largest road transport solutions provider.
Weaker economic conditions
throughout the Australian economy,
particularly through H2, had an impact
on trailer sales. The Australian trailer
business has experienced a decrease
in revenue over the year largely due
to a combination of the one off Coles
contract in FY18, a negative mix effect
and a subsequent market slowdown.
However, despite the lower volume
in H2, gross margin grew by over 1%
after taking account of the negative mix
effect in the half.
This was a direct result of product
development and production system
changes improving Ballarat plant
cost to manufacture in the half. Direct
labour efficiency FY19 versus FY18
improved by over 7%.
The initial launch of the ERP system in
October 2018, was indeed challenging.
Despite the intention to slow the build
rate at launch, the implementation
was much more complex, requiring an
extended hypercare period to support
the business. This meant the transition
did unfortunately continue for longer
than anticipated.
Whilst still in the early stages, the
implementation of the new ERP system
enables MaxiTRANS for the first time to
not only vastly improve its understanding
of key data within our business but also
to accelerate improvements across
the business over future years as our
organisation grows with this system.
Innovation
The most recent addition to the
MaxiTRANS family – Trout River Live
Bottom Trailers joined the product
portfolio in December 2018. The
• Direct labour efficiency improved by 7% FY19.
• Acquisition of Trout River – Leading manufacturer
and supplier of live bottom trailers in Australia.
• Acquisition is a key step in MaxiTRANS’
Growth in Existing Markets strategic initiative.
acquisition forms part of our strategic
intent to grow in existing markets and
aligns with our commitment to deliver ever
safer, more efficient transport solutions.
Trout River trailers offer an alternative
to standard chassis tippers and are
ideally suited to work sites, where
overhead obstacles are present or on
uneven/unstable ground where vehicle
roll over events present a higher risk.
Being able to provide an increased
offering to customers nationally is
exciting and we look forward to building
on the successes we have already
achieved with Trout River.
Customer Focus
In June of this year, MaxiTRANS was
pleased to announce the expansion of
its dealership footprint with Graham
Thomson Motors, (a subsidiary of
MaxiTRANS’ oldest dealer Mildura Truck
Centre) based in the Victorian regional
town of Shepparton, joining as a full
service dealer. The announcement was a
further demonstration of the importance
and value in which we hold our customers.
It shows our commitment to build and
develop a local support network for our
customers so that they can rest assured
they will receive the highest quality
support when and where they need it.
Moreover, MaxiAssist was launched
in May this year. MaxiAssist provides
two distinct avenues of support to our
customer base. Firstly, is the capability
to service customers on site at their
premises. This reduces downtime and
increases efficiency and when coupled
with MaxiTRANS’ range of available
fixed price service packages provides
customers with piece of mind when
investing in new capital assets for their
business. The second, is the MaxiAssist
24/7 Roadside Assist support service,
which provides around the clock access
to MaxiTRANS’ national dealer network
and authorised repairers to ensure we
meet the demands of our customers,
night and day.
Overall, despite a challenging macro-
economic environment, MaxiTRANS
is poised for growth when the market
improves. MaxiTRANS continue to be the
largest road transport solutions provider
in the market with the most diverse
and comprehensive range of products
and service capabilities designed to
exceed the ever changing and increasing
demands of road transport users.
ANNUAL REPORT 2019
13
Acquisition of Trout River aligns with our commitment to deliver ever safer, more efficient transport solutions.
FY19 Australian Revenue
$223.9m
FY19 Australian EBITDA
$15.4m
Product Revenue
Contribution from
new trailer sales
39%
General
Freight
34%
Food &
Grocery
27%
Bulk
Transport
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MAxITRANS INDUSTRIES
International
Our operational excellence program
and growth in our service work,
resulted in improved profitability.
New Zealand
FY19 saw trailer volumes lower than
normal with a number of larger
customers deferring their traditional
trailer replenishment cycle to allocate
capital into other specific projects.
However this was offset by the warranty
issues impacting the prior years not
recurring, and when combined with
good improvements in labour efficiency
from our operational excellence
program and growth in our service
work, resulted in improved profitability.
The set up of our Christchurch service
facility in December 2017 along with
additional labour capacity in Auckland
has allowed us to grow our service
business by 125% year-on-year. We
also have further plans in place that
will allow this area to continue to grow.
This growth will be achieved through
further increases in labour capacity as
well as an expansion of the services we
offer through these facilities.
At the end of FY19 we completed the
second phase of our New Zealand
operational excellence program.
These 2 phases have seen
• A revised quality inspection program
implemented that has seen our right
first time measure increase from
40% to 80% over the last 18 months.
We have also seen a significant
improvement in the quality of
the final product delivered to the
customers
• Changes to the production planning
process and sales to engineering
cycle that has seen our on time
delivery improve from an average
69% in FY18 to 88% over FY19.
• Our NZ service business has grown by
125% year-on-year since 2017.
• 5% year-on-year improvement in labour
efficiency levels.
• At the end of FY19 we completed the second
phase of our New Zealand operational
excellence program.
• No adverse change in warranty
assumptions since FY18.
As reported during the year we sold
our Auckland facility and negotiated
a long term lease on the site. That
lease includes MaxiTRANS holding a
development option with the landlord
that would see a new factory built on
undeveloped land on the site. This new
factory will allow us to create a small
flow line manufacturing facility that
will further improve labour efficiency in
our production area. More importantly,
it will allow us to use the current
facility to further expand our service
business in Auckland. Although we
are still working through the timing
of this development we currently expect
this option to be executed during the
FY20 year with the facility coming on
line in FY21.
• Improvements in labour efficiency
of 5% year-on-year.
In the last quarter of the financial year
we launched our upgraded MaxiCUBE
classic trailer to the market which
includes significant improvements in
both thermal efficiency and weight
compared to the previous model.
Feedback from customers with the
initial units has been very positive with
customers seeing the benefits from
improved thermal efficiency through
significantly lower operating costs of
their refrigeration units.
Further product development is in
process and we have recently created
a new dedicated Product Manager
function within the New Zealand
business. This new function will
allow us to accelerate our product
enhancement and development
program as well as better leverage
a number of recent initiatives released
in the Australian business.
ANNUAL REPORT 2019
15
During FY19, the second phase of New Zealand’s operational excellence program was completed.
FY19 New Zealand Revenue
FY19 New Zealand EBITDA
Efficiency Levels FY19
$16.3m
$0.8m
5%
16
MAxITRANS INDUSTRIES
Board of Directors
A
C
E
B
D
F
Robert Wylie (A) – Chairman, Non-Executive Director
James Curtis (B) – Deputy Chairman, Non-Executive Director
Dean Jenkins (C) – Managing Director and CEO
Samantha Hogg (D) – Non-Executive Director
Joseph Rizzo (E) – Non-Executive Director
Mary Verschuer (F) – Non-Executive Director
Executive Leadership Team
ANNUAL REPORT 2019
17
A
C
E
B
D
F
Tim Bradfield (A) – Chief Financial Officer
Andrew McKenzie (B) – Group GM, Sales and Marketing
Trevor Negus (C) – Group GM Manufacturing
Angelique Zammit (D) – Group Human Resources Manager
Peter Loimaranta (E) – Group GM, International
Jerry Cade (F) – Head of IT & Group Supply Manager
Dean Jenkins – Managing Director and CEO (pictured on page 5)
18
MaxiTRaNS iNduSTRieS
Report of the directors
and Financial Report
For The Year Ended 30 June 2019
Contents
Financial Summary
Report of the directors
auditor’s independence declaration
directors’ declaration
Consolidated Statement of Profit or Loss and
Consolidated Statement of Comprehensive income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in equity
19
20
36
37
38
39
40
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
independent auditor’s Report
australian Stock exchange additional information
Corporate directory
42
43
78
83
85
MaxiTRANS Industries Limited
aCN 006 797 173
and Controlled entities
Financial Summary
aNNuaL RePORT 2019
19
F2015
F2016
F2017
F2018
F2019
Revenue
$’000
329,165
340,179
340,072
409,312
352,537
eBiTda (excluding significant items)
eBiT (excluding significant items)
NPBT (excluding significant items)
(3)
(3)
(3)
$’000
$’000
$’000
NPaT (excluding significant items)
(3)(4)
$’000
16,247
19,219
21,439
20,931
14,157
10,604
14,199
16,836
16,133
8,079
6,303
11,840
14,520
13,659
8,752
10,695
10,077
8,378
5,687
4,809
Significant items (net of tax)
(1)(2)(6)
$’000
(1,806)
(3,517)
–
–
(22,514)
NPaT – attributable to equity holders
Basic ePS
(5)
Ordinary dividends/share declared
depreciation
amortisation – leased assets
amortisation – intangibles
Capex additions
Operating cash flow
NTa
Net assets
interest bearing liabilities
Finance costs
Total bank debt
Net debt/equity
interest cover (excluding
significant items)
(9.57)
0.0
3,116
212
2,205
7,838
(6,098)
5,235
10,695
10,077
(17,704)
2.83
3
5.78
3.5
5.44
3.5
3,583
3,541
3,713
4,497
2.43
2
3,967
550
1,126
$’000
cents
cents
$’000
$’000
$’000
$’000
$’000
$’000
662
775
10,893
9,530
12,138
21,196
562
500
8,354
4,445
586
499
14,486
19,767
78,380
86,278
91,210
98,801
77,544
$’000
120,612
123,337
128,727
135,819
121,841
$’000
$’000
$’000
47,302
43,152
47,697
50,661
43,925
2,525
2,359
2,316
2,474
2,643
45,196
41,465
46,214
49,500
43,500
%
36%
26%
32%
30%
times
4.2
5.75
7.27
8.62
26%
5.36
(1) Relates to impairment loss on aZMeB intangible assets of $2.58 million pre-tax (disclosed above net of tax).
(2) Relates to the impairment loss on Lusty eMS and Hamelex White intangible assets of $4.398 million pre-tax and the closure cost of
the Bundaberg facility of $0.626 million pre-tax (disclosed above net of tax).
(3) 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.
(4) also referred to as underlying net profit after tax attributable to MaxiTRaNS equity holders.
(5) includes both earnings from continued and discontinued operations.
(6) Relates to impairment loss on TRaNSform eRP system of $18.82 million, MTC loss on sale of business $1.56 million, eRP system
implementation expenses $1.30 million pre-tax, acquisition and disposal costs $0.53 million and restructuring (redundancy) costs
$0.30 million.
20
MaxiTRaNS iNduSTRieS
Report of the Directors
For The Year Ended 30 June 2019
Your directors submit their report together with the
consolidated financial report of MaxiTRaNS industries
Limited aCN 006 797 173 (“the Company”) and its
subsidiaries (together referred to as the “Group”), and
the Group’s interest in associates for the year ended
30 June 2019 and the auditor’s report thereon.
Directors
The names of directors in office at any time during
or since the end of the financial year are:
Mr Robert H. Wylie
Chairman since 30 June 2016)
Mr James R. Curtis
director since 1987 – deputy
Chairman since October 1994)
Mr Joseph Rizzo
(director since June 2014)
Ms Samantha Hogg
(director since april 2016)
Mr Dean Jenkins
Managing director since
1 March 2017)
Ms Mary Verschuer
(director since January 2019)
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
Nil dividends were declared at half year and full year.
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.
Environmental Regulation
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 2019.
Operating & Financial Review
REVIEW OF OPERATIONS
The Group operates two types of businesses: the
Trailer Solutions business comprising the design,
manufacture, sale and servicing of trailers in australia
and New Zealand; and the Parts business, MaxiPaRTS,
a trailer and truck parts business in australia.
The Group finalised the sale of its interest in Maxi-CuBe
Tong Composites Co Ltd (“MTC”) in October 2018 at a
loss of $1.6 million (inclusive of costs). This disposal
aligned with the Company’s ongoing strategy in the
Trailer Solutions business. in december 2018, the
Group re-invested $5.9 million of the funds from the
MTC disposal to acquire an 80% share of Trout River
australia, a leading manufacturer and supplier of live
bottom trailers in australia. in March, the Group
completed the sale and leaseback of the Richlands
manufacturing facility for $12.5 million and the auckland
manufacturing and service facility for NZ$17.2 million
(approx. $16.5 million). Both arrangements freed up
capital for the remaining business, with proceeds used
to pay down of debt and invest in the further development
of the MaxiTRaNS facilities in both locations in line with
our manufacturing strategy.
Parts Business – MaxiPARTS
The Parts business sells trailer and truck 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 in australia under the MaxiPaRTS brand.
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 FY19, MaxiPaRTS
operated 20 wholesale sites and retail stores.
The MaxiPaRTS business experienced revenue and profit
growth despite a slowing market. This growth was
generated from the continued success of european
aftermarket truck parts and North american aftermarket
engine parts. The MaxiSTOCK customer inventory
management system continued to be part of our fleet
solutions offering and provided significant support to the
growth of our large fleet customers, resulting in an
increased share of this segment.
MaxiPaRTS continues to operate as a key supplier to our
manufacturing and service facilities, thus ensuring parts
and component procurement is leveraging the Group’s
full scale, procurement and logistics capability.
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
Trailer Solutions Business
The Trailer Solutions business has a diverse portfolio of
trailers with market leading brands and a reputation for
high quality with customers. Sales of products through
our dealer network, comprising both owned dealerships
and licensed dealerships provides a full solution
including after sales service and parts to customers.
Australia
The australian trailer market softened in FY19, especially
in the second half of the year, led by a decline in consumer
confidence across the australian economy. The Group’s
diverse product portfolio assisted in maintaining its
strong market leading position and, excluding the sales
from the FY18 Coles contract, achieving flat year-on-year
unit volumes.
The revenue of the australian Trailer business has
decreased year-on-year as a result of the Coles contract
combined with a negative sales mix and declining
market. despite the declining market in the second half,
the Group has improved its gross margin by over 1%
on a like for like basis.
The investment in the new enterprise Resource Planning
(eRP) system associated with Project TRaNSform, our
substantial program to replace our ageing and end-of-
life iT systems continued during the year. TRaNSform
has now been deployed to the Manufacturing and
Corporate offices. in line with the budget assumptions
for FY19, short term inefficiencies were driven by the
roll-out of the new eRP system within the Manufacturing
operations, this lasted longer than expected. as we
closed out FY19, the Group was seeing improvement in
the underlying manufacturing operations, returning to
a more normalised run-rate and an approximate 90%
on-time delivery schedule of trailers. Over the next 3-5
years the Group expects to realise significant operating
efficiencies from the new systems and processes.
New Zealand
The New Zealand underlying business performance
improved year-on-year with better labour efficiencies
and the FY18 warranty issues being put behind us. This
was partially offset by a softening in trailer volumes with
a number of our larger customers deferring their normal
replenishment programs, instead allocating their capital
investments to other projects.
The service business grew by 125% in FY19 from
additional labour capacity in our auckland facility
coupled with a full year contribution from our
Christchurch facility.
aNNuaL RePORT 2019
21
FINANCIAL REVIEW
Sales
Total revenue decreased by 14% for the year to
$352.5 million.
The Parts business recorded a 4.9% external revenue
increase to finish FY19 with revenue of $106.9 million
and the Trailer business decreased external revenue
by 19% to finish FY19 at $240.2 million.
Profit
With the decline in revenue for the year and the non-cash
impairment of the TRaNSform eRP intangible asset of
$26.9 million pre-tax (refer below), net loss after tax
attributable to MaxiTRaNS equity holders was
$17.7 million in FY19.
underlying earnings declined year on year by 30% with
underlying eBiTda of $14.2 million.
The $38.0 million carrying value of the eRP asset has
been impaired to its estimated recoverable value less
amortisation and future costs required to complete
the rollout of $11.2 million at 30 June 2019. it should
be noted that:
• The eRP system is in-use and the directors expect
that it will continue to deliver on-going benefits to the
business broadly in-line with previous expectations;
• The impairment is non-cash and will not affect our
existing debt covenants with the banks;
• The write-down is a one-off event and does not affect
future earnings; and
• The Company is committed to the continued roll-out
of the eRP across the remaining Sales, Service and
Parts businesses and will continue to invest a further
$3 million completing this in FY20.
Cash Generation & Capital Management
Operating cash flow was negative $6.1 million in FY19
which represents a reduction of $25.9 million from the
cash generated in FY18.
in addition to the aforementioned profit movement, the
working capital has built up during FY19 resulting from
increases in creditors and debtors with a marginal offset
through a decrease in deferred revenue (i.e. customer
deposits received in advance). Management have
implemented processes in the second half of FY19 to
bring down the working capital requirement on the
business with a key focus on inventory which dropped
by $3.2 million in the second half.
22
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
during FY19, the Group disposed of the investment
in China (MTC) for $6.2 million and two properties for
$29.8 million pre-tax, allowing for the 80% investment
in Trout River australia for $5.9 million as well as the
partial repayment of the syndicated debt.
Net debt at 30 June 2019 was reduced to $32 million
from $40 million at 30 June 2018. This resulted in the
Net debt to equity ratio at 30 June 2019 being reduced to
26%, down from 30% in FY18. Without the impairment of
the eRP asset, the Net debt to equity ratio was reduced
to 22%.
External Financing Facilities
during FY17, MaxiTRaNS entered into debt facilities
totalling $70 million through a syndicated facility with
the Commonwealth Bank of australia and HSBC Bank.
The facility is used to fund ongoing business requirements
and facilitate the funding of future growth opportunities.
The original facility has both three years and five-year
maturities, has a number of covenant requirements
and is secured against property owned by the Group.
during FY19, the Group reduced the available facility
to $61.75 million. This facility is sufficient to support the
business in its current form.
RISK
MaxiTRaNS recognises that risk is inherent in its
business and that effective risk management is essential
to protecting the business value and delivering the
ongoing performance of the business.
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.
Operational Risks
during FY19, the Group updated its risk management
framework to address the latest requirements of global
risk management standard iSO31000:2009. as part of
this update, it developed a three-year risk management
maturity roadmap and completed a comprehensive
review of the risks across the Group.
The Group identifies risk based on likelihood and
materiality. By understanding and mitigating key risks,
we can:
• increase the likelihood of achieving our strategic
goals and objectives;
• improve our decision making and capital
allocation; and
• enhance corporate governance and
regulatory compliance.
The key operational risks identified are as follows:
• Health and Safety of our people
• Manufacturing process efficiency, iT systems,
quality and delivery schedule;
• Trailer sales pipeline management, pricing and
retention of key customers;
• MaxiPaRTS key customer retention and
competitiveness; and
• Finance and governance; management of working
capital; an appropriate funding model; internal
policies and procedures; changing regulatory
environment and maintenance of proper licences
to operate the business.
Management report to the audit & Risk Management
Committee on the ongoing status of activities in place
to mitigate each of these risks.
Foreign Exchange & Commodities Risk
The Group has exposure to movements in the australian
dollar against the united States dollar, the euro and the
Chinese Yuan.
The Trailer Solutions 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 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.
aNNuaL RePORT 2019
23
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
HEALTH & SAFETY
OUTLOOK
it is expected market conditions in the australian trailer
market will continue to be slow as consumer confidence
and other macro-economic drivers remain soft and
operators continue to age their fleets. This is likely to affect
performance in both the australian Trailer business as well
as the MaxiPaRTS parts business.
in the short term, order intake remains consistent, in the
food and grocery sectors, benefiting our Maxi-CuBe
products, whilst the general freight and tipper order intake
is lower than the last financial year. These product lines are
directly affected by the broader economic conditions, the
crop outlook and the timing of commencement of new
housing and infrastructure projects.
The significant investment in the new iT systems is
substantially complete and is expected to be completed
over the next financial year. This will be a key enabler to
driving operational efficiency through the business
resulting in strong operating cashflow in future years.
The Group continues to execute upon its corporate strategy
to not only improve the operational efficiency in our current
business but also to pursue growth opportunities in our
existing markets, looking to identify new market
opportunities, all with the aim of improving shareholder
returns. underlying this will be a continued focus on
improving our safety performance to not only ensure we
send our people home safely but that MaxiTRaNS’ products
design also send our customer’s people home safely.
MaxiTRaNS has continued to see outstanding results
within Health Safety environment (HSe) and wellbeing,
with an all-time low total injury frequency rate of 21.This
is a massive 48% decrease compared to last year and
continues the trend of reductions in injuries since FY15.
it is a commendable achievement and is helping towards
achieving our core value of ‘Send all our people
home safely’.
The Board continues to see the safety of our people as
a priority and currently monitors, and will continue to
monitor, the Group’s health and safety performance on
a monthly basis.
STRATEGY
MaxiTRaNS has undertaken a refresh of its corporate
strategy. The strategy focuses on the following pathways
that will drive superior shareholder returns:
• Operational excellence that will ensure the Group’s
systems and processes deliver high quality, cost
effective products and services;
• Leveraging its market leading position to optimise
growth opportunities in the markets in which it operates;
• Leveraging its expertise to diversify into new markets,
which given the current market conditions will be
deferred by 12 months;
• develop a comprehensive organisation development
model to continue to recruit, develop and retain the
best people; and
• ensure our corporate image accurately reflects its
market-leading position.
Business Transformation Program
The Group has committed to a significant investment
in a business transformation program known as
“Project TRaNSform”.
The program has been rolled out in Corporate and
Manufacturing and will be completed across the Sales,
Service and Parts business in FY20, replacing a number
of outdated legacy iT systems with a single enterprise
resource planning (“eRP”) system and other integrated
systems across the business. The eRP will allow the
Group to streamline many business processes, thus
creating operational efficiencies and as importantly
mitigating business risk.
24
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
Information of Directors
Mr. Robert H. Wylie Chairman, independent Non-executive, (appointed 30 June 2016), age 69
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 the Nomination Committee. Member of the audit & Risk Management
Committee and Remuneration & Human Resources Committee.
interest in Shares: 121,904 ordinary shares beneficially held.
Options over Ordinary Shares: Nil
Mr. dean S Jenkins Managing director, executive, age 47
Qualifications & experience: Managing director since 1 March 2017.
Bachelor of engineering (aero) Honours and a Graduate of the australian institute
of Company directors.
Most recently Chief Operating Officer & executive director of the Weir Group PLC,
one of the world’s leading engineering businesses. Prior to the Weir Group,
Mr Jenkins was CeO of uGL Rail from 2008 to 2010, australia’s largest supplier
and maintainer of rolling stock. He also spent 11 years in senior leadership roles
with QaNTaS, culminating in the role of Group General Manager – engineering,
Material and Logistics.
interest in Shares: 287,000 ordinary shares beneficially held.
Options over Ordinary Shares: Nil
Mr James R. Curtis deputy Chairman, Non-executive, age 84
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 audit & Risk Management Committee, Remuneration & Human
Resources Committee and Nomination Committee.
interest in Shares: 25,547,972 ordinary shares beneficially held.
Options over Ordinary Shares: Nil
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
aNNuaL RePORT 2019
25
Mr. Joseph Rizzo independent Non-executive director, age 63
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 June 2014.
Formerly Managing director of PaCCaR australia Pty Ltd with 35 years’ experience
in the road transport equipment manufacturing industry. Mr Rizzo is a director of
aMe Systems (Vic) Pty Ltd, an electrical solutions provider with manufacturing
facilities in australia and asia. 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: Chairman of the Remuneration & Human Resources Committee and Member
of the audit & Risk Management Committee and Nomination Committee.
interest in Shares: 180,711 ordinary shares beneficially held.
Options over Ordinary Shares: Nil
Ms. Samantha Hogg independent Non-executive director, age 52
Qualifications & experience: Bachelor of Commerce (Melbourne university) and a Graduate of the australian
institute of Company directors. appointed non-executive director april 2016.
Currently the Chair of Tasmanian irrigation and TasRail and a director of Hydro
Tasmania, australian Renewable energy agency and infrastructure australia.
Ms Hogg has previously held senior executive finance roles at the Transurban
Group, Vale inco and WMC Resources.
Special Responsibilities: Chairperson of the audit and Risk Management Committee and Member of the
Remuneration & Human Resources Committee and Nomination Committee.
interest in Shares: Nil ordinary shares beneficially held.
Options over Ordinary Shares: Nil
Ms. Mary Verschuer
independent Non-executive director, age 58
Qualifications & experience: Master of Business administration (Macquarie university), Bachelor of applied
Science (Chemistry) (uTS) and a Fellow of the australian institute of Company
directors. appointed non-executive director January 2019.
Currently the President of The infants’ Home, a provider of integrated early
childhood education, family day care, early intervention and health services,
and a Member of the advisory Board of TaFe NSW (Sydney Region). Ms Verschuer
was previously a non-executive director of THC Global Group Limited and Nuplex
industries Limited (now part of the allnex group), Ms Verschuer has over 25 years
of global senior management experience across a range of industries, including
leading the Minerals and Metals business for Schenck Process and the asian
business for Finnish listed packaging business Huhtamaki. in those roles,
Ms Verschuer had responsibility for manufacturing, supply chain and sales
operations in diverse geographies and cultures.
Special Responsibilities: Member of the audit and Risk Management Committee, Remuneration & Human
Resources Committee and Nomination Committee.
interest in Shares: 63,000 ordinary shares beneficially held.
Options over Ordinary Shares: Nil
26
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
details of attendances by directors at Board and committee meetings during the year are as follows:
Directors’
Meetings
Audit & Risk
Management Committee
Remuneration & Human
Resources Committee
Nomination
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Robert Wylie
James Curtis
Joseph Rizzo
Samantha Hogg
Mary Verschuer
dean Jenkins
16
16
16
16
9
16
16
15
15
16
9
16
4
4
4
4
2
4
4
4
3
4
2
4
3
3
3
3
2
3
3
3
3
3
2
3
1
1
1
1
–
–
1
1
1
1
–
–
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
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, the Managing
director and senior executives having regard to
labour market trends in comparative companies.
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 area of responsibility’s’ performance;
• The Group’s performance including the Group’s
Return on invested Capital; and
aNNuaL RePORT 2019
27
The directors are of the view that the remuneration
structure supports alignment between the Group
and shareholders.
each of the components of total remuneration for
executive directors and senior management are
described in more detail below.
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, relevant
area of responsibility and overall performance of the
Group. a senior executive’s remuneration is also
reviewed on promotion.
Performance-linked remuneration
Performance linked remuneration includes both STis
and LTis 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 amount of incentives within each directors and
The LTi is provided in the form of Performance Rights.
senior executives remuneration.
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 20% and 20% respectively.
in the case of the Managing director, the mix of
performance linked remuneration (as a percentage
of total remuneration) between STi and LTi
components is 15% and 25% respectively.
The MaxiTRaNS Performance Rights Plan (‘PRP’) was
approved by the shareholders at the annual General
Meeting held on 15 October 2010.
STI
each year Goals are set for senior executives and
executive directors. The goals generally include
measures relating to the Group and the relevant area
of responsibility. Goals and the respective weightings
change year on year according to Company priorities,
but they generally relate to Financials, People, Safety
and Strategy. The Board reviews and approves
goals annually.
Whereas, the key financial performance objectives for
the Managing director and the Chief Financial Officer
are “net profit after tax” and cash flow, the key financial
performance objectives for the other executives are
“net profit after tax” and “earnings before interest and
tax” compared to budgeted amounts. The non-financial
objectives particularly those relating to strategy and
associated measures vary by position. However, other
non-financial objectives like safety and people are
consistent across the group.
28
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
all these objectives are created as part of our new
Performance development Process whereby at the end
of each financial year the individual is reviewed against
the actual performance of the Group and of the relevant
area of responsibility. The outcome of that review is
calibrated across the group to ensure consistency and
objectivity. Merit increases and STi payment eligibility
are based on these calibrated performance outcomes.
in line with the Group’s philosophy of rewarding
employees for performance, STis based on the
achievement of specific goals are available to select
senior members of staff other senior than executives
who have a role that has a significant impact on the
achievement of the strategy.
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.
Grants are calculated by using a face value allocation
methodology – i.e. by reference to the volume weighted
average MaxiTRaNS share price (“VWaP”). under this
approach, the number of units is calculated as follows:
Number of units = intended LTi Value/unit Value
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.
The Board has set a long-term incentive target for
management to achieve an increase in the Group’s
Return on invested Capital (‘ROiC’).
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.
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 has
regard to the indices highlighted in the table on page 15.
Net profit after tax and net profit before tax are considered
as two of the financial performance targets in setting
the STi.
Employment agreements
it is the Group’s policy that employment 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 employment 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 employment 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 dean Jenkins, Managing director, has a contract
of employment with the Company dated 1 March 2017.
aNNuaL RePORT 2019
29
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 an
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.
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
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 employment contract can be terminated
either by the Company or Mr Jenkins 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 Tim Bradfield, Chief Financial Officer, has a contract
of employment with the Company dated 6 March 2019.
The contract can be terminated either by the Company
or Mr Bradfield providing three months’ notice.
The Company may make a payment in lieu of notice of
three months, equal to base salary and superannuation.
30
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
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
$
STI
(i)
$
Year
Non-
cash
benefits
$
Super
$
PRs (ii)
$
$
$
Proportion
of rem
performance
related
%
Value of
PRs as
proportion
of rem
%
DIRECTORS
Non-executive
Mr R Wylie
Chairman
Mr J Curtis
Mr J Rizzo
Ms S Hogg
2019 127,854
2018 127,854
2019
68,493
2018
68,493
2019
68,493
2018
68,493
2019
68,493
2018
68,493
Ms M Verschuer
(iii) 2019
30,119
2018
–
Executive
Mr D Jenkins
2019 690,594
Managing
director
2018 690,594
Mr M Brockhoff
2019
Former Managing
director
(iv) 2018
–
–
EXECUTIVES
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12,146
12,146
6,507
6,507
6,507
6,507
6,507
6,507
2,861
–
–
–
–
–
–
–
–
–
–
–
– 140,000
0.0%
– 140,000
0.0%
–
–
–
–
–
–
–
–
75,000
0.0%
75,000
0.0%
75,000
0.0%
75,000
0.0%
75,000
0.0%
75,000
0.0%
32,981
0.0%
–
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
678
69,406
(3,862) 40,000 796,816
–0.5%
–0.5%
150
75,132
36,460 100,274 902,610
4.0%
–
–
–
–
0.0%
4.0%
0.0%
85,251
726
23,199
– 109,176
78.1%
0.0%
Mr C Richards
(v) 2019 165,333
33,987
–
27,169 (38,449) 148,366 336,405
(1.3%)
(11.4%)
Former Chief
Financial Officer
and Company
Secretary
2018 339,868
41,447
Mr T Bradfield
(vi) 2019 113,974
Chief Financial
Officer
2018
–
Ms J De Martino
(vii) 2019 138,930
Former Chief
Financial Officer
2018
–
–
–
–
–
Mr A McKenzie
2019 304,027
37,291
–
–
–
–
–
44,297
1,138
84,967 511,718
8.3%
10,828
–
1,468
13,198
– 124,802
0.0%
–
–
0.0%
2,074 155,670
0.0%
0.2%
0.0%
0.0%
0.0%
–
–
–
0.0%
0.0%
34,515 (40,023) 22,000 357,811
(0.8%)
(11.2%)
Group General
Manager – Sales
and Marketing
2018 297,635
19,178
5,201
32,187
(27)
22,000 376,173
5.1%
0.0%
–
–
–
–
–
–
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
aNNuaL RePORT 2019
31
Primary
Post
Equity
Other
Total
Salary &
fees
$
STI
(i)
$
Year
Non-
cash
benefits
$
Super
$
PRs (ii)
$
$
$
Proportion
of rem
performance
related
%
Value of
PRs as
proportion
of rem
%
EXECUTIVES(continued)
Mr P Loimaranta
2019 288,554
20,414
203
31,756 (38,755) 25,305 327,477
(5.6%)
(11.8%)
Group General
Manager
– international
2018 280,899
26,942
Mr A Roder
2019
–
–
–
–
31,649
1,016
25,305 365,811
7.6%
–
–
–
–
0.0%
0.3%
0.0%
Former Group
General Manager
–Manufacturing
(viii) 2018 162,215
11,687
5,201
16,521
(15,169)
2,547 183,000
(1.9%)
(8.3%)
Mr T Negus
2019 372,603
73,059
–
42,338
13,302
– 501,302
17.2%
2.7%
Group General
Manager
– Manufacturing
(ix) 2018 183,117
–
Mr J O’Brien
(xi) 2019 238,557
46,880
General Manager
– MaxiParts
(x) 2018 233,348
28,484
–
–
–
17,396
–
– 200,513
0.0%
0.0%
32,880
(6,660) 60,667 372,323
10.8%
(1.8%)
27,939
6,660
32,265 328,696
10.7%
2.0%
Notes in relation to table of directors’ and executive officers’ remuneration
(i) 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 2018 financial year using the criteria set out in the Remuneration
Report. The amounts were determined after performance reviews were completed.
(ii) Performance rights (PRs) grants are calculated by using a face value allocation methodology, i.e. by reference to the
volume weighted average MaxiTRaNS share price (“VWaP”) 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. Further details
in respect of PRs are contained on the following page of the Remuneration Report. details of PRs vested during the
period are contained in Note 15 – Share Based Payments. during the period it was determined that the performance
and service conditions of the 2016 and 2017 PR scheme will not be met. as a result, the total amount recognised for
services received over the life of the PR scheme was reversed.
(iii) Ms M Verschuer was appointed on the 24 January 2019.
(iv) Mr M Brockhoff retired effective 31 July 2017. all PRs held by Mr Brockhoff at that time were cancelled.
(v) Mr C Richards resigned effective 21 december 2018. all PRs held by Mr Richards at that time were cancelled.
(vi) Mr T Bradfield was appointed on the 6 March 2019.
(vii) Ms J de Martino was appointed on the 8 October 2019 and resigned effective 15 March 2019. all PRs held by
Ms de Martino at that time were cancelled.
(viii) Mr a Roder resigned on 12 January 2018. all PR’s held by Mr Roder at that time were cancelled.
(ix) Mr T Negus was appointed on 1 January 2018.
(x) Mr J O’Brien was appointed to the role of General Manager – MaxiParts on 1 November 2017. From 1 July 2017
to the date of Mr O’Brien’s appointment, he was acting General Manager – MaxiParts.
(xi) Mr J O’Brien has resigned effective 2 august 2019 (resignation accepted prior to 30 June 2019). all PR’s held
by Mr O’Brien at that time were cancelled by 30 June 2019.
32
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
Analysis of share-based payments granted as remuneration
details of the vesting profile of the PRs 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 d Jenkins
Consolidated entity executives
Mr T Negus
Mr P Loimaranta
Mr a McKenzie
Mr J O’Brien(2)
Ms J de Martino(1)
PRs granted
(no.)
Grant date
Fair value at
grant date ($)
Vesting date
Expiry date
630,119
19-Oct-18
0.4391
30-Jun-21
01-Feb-26
257,089
19-Oct-18
0.4391
30-Jun-21
01-Feb-26
216,558
19-Oct-18
0.4391
30-Jun-21
01-Feb-26
224,994
19-Oct-18
0.4391
30-Jun-21
01-Feb-26
179,962
19-Oct-18
0.4391
30-Jun-21
01-Feb-26
234,594
19-Oct-18
0.4391
30-Jun-21
01-Feb-26
(1) On 15 March 2019, the date when Ms de Martino resigned, Ms de Martino’s PRs were cancelled.
(2) Mr J O’Brien has resigned effective 2 august 2019 (resignation accepted prior to 30 June 2019). all PR’s held by Mr O’Brien at that
time were cancelled by 30 June 2019.
Subject to the terms of the Performance Rights Plan, all PRs expire on the earlier of their expiry date or termination of
the individual’s employment. For the PRs to vest, holders must continue to be in the employment of the Group until vesting
date. The PRs vest three years after the date they were issued, subject to the satisfaction of performance hurdles. PRs
may only be exercised during a four year period after they have vested. details of the performance criteria are included
in the discussion on LTis.
The estimated maximum value of PRs on issue for future years is the current share price. This is subject to future
movements in the share price.
Unissued shares under rights
at the date of this report there are no unissued ordinary shares of the Company relating to vested PRs.
CONSOLIDATED RESULTS AND SHAREHOLDER RETURNS
Net profit/(loss) attributable
to equity holders of the parent
Basic ePS(1)
dividends declared
dividends declared per share
Share price
2019
2018
2017
2016
2015
($17,704,121)
$10,076,812
$10,694,940
$5,235,234
$4,496,951
(9.57¢)
5.44¢
5.78¢
2.83¢
2.43¢
–
$6,477,648
$6,477,648
$5,552,270
$3,701,513
0.0¢
29.0¢
3.50¢
51.0¢
3.50¢
67.0¢
3.00¢
45.0¢
2.00¢
39.5¢
(1) includes both continued and discontinued earnings.
aNNuaL RePORT 2019
33
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
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:
2019 Shares
MaxiTRANS Industries Limited
Directors:
Mr d Jenkins
Mr J Curtis
Mr R Wylie
Mr J Rizzo
Ms M Verschuer
Executives:
Mr P Loimaranta
Mr T Negus
Held at
1 July 2018
Purchases
Sales
Held at
30 June 2019
287,000
25,547,972
121,904
90,711
258,553
–
–
–
90,000
63,000
–
50,000
–
–
–
–
–
–
–
287,000
25,547,972
121,904
180,711
63,000
258,553
50,000
Ms Hogg, Mr Bradfield, Mr McKenzie and Mr O’Brien do not hold any shares as at 30 June 2019.
2018 Shares
MaxiTRANS Industries Limited
Directors:
Mr d Jenkins
Mr J Curtis
Mr R Wylie
Mr J Rizzo
Executives:
Mr P Loimaranta
Held at
1 July 2017
Purchases
Sales
Held at
30 June 2018
–
287,000
25,547,972
21,364
90,711
260,716
–
100,540
–
–
–
–
–
–
287,000
25,547,972
121,904
90,711
(2,163)
258,553
Ms Hogg, Mr Negus, Mr McKenzie and Mr O’Brien do not hold any shares as at 30 June 2018.
end of Remuneration Report
34
MaxiTRaNS iNduSTRieS
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
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)
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
(ii) 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 $58,852 (2018: $58,852) in respect of directors’ and officers’
liability insurance contracts.
Clause 101 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
No options were granted to any of the directors or key management personnel 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.
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 “Financial Summary” on page 19.
aNNuaL RePORT 2019
35
Report of the Directors (Cont.)
For The Year Ended 30 June 2019
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
KPMG Australia:
– auditing and reviewing the financial statements
– other services (taxation and advisory)
Overseas KPMG Firms:
– auditing and reviewing financial statements
– other services (taxation, advisory and due diligence)
Total auditor remuneration
Proceedings on Behalf of Company
Consolidated
2019
$
2018
$
456,212
292,830
18,836
188,254
475,048
481,084
53,940
10,015
63,955
86,849
9,554
96,403
539,003
577,487
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.
Rounding of Accounts
The parent entity has applied the relief available to it in aSiC Corporations (Rounding in Financial/directors Reports)
instruments 2016/191 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. Robert H Wylie, director
Mr. dean Stuart Jenkins, director
dated this 23rd day of august 2019
36
MaxiTRaNS iNduSTRieS
Auditor’s Independence Declaration
For The Year Ended 30 June 2019
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 of MaxiTRANS Industries
Limited for the financial year ended 30 June 2019 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Suzanne Bell
Partner
Melbourne
23 August 2019
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
aNNuaL RePORT 2019
37
Directors’ Declaration
For The Year Ended 30 June 2019
in the opinion of the directors of MaxiTRaNS industries Limited (“the Company”):
(a) the consolidated financial statements and notes as set out on pages “FiNaNCiaL ReVieW” on page 21 to 62, 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 2019 and of its performance for the
financial year ended on that date; and
(ii) complying with australian accounting Standards and the Corporations Regulations 2001.
(b) there are reasonable grounds to believe that the Group 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 18 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 (2016/785).
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 2019.
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. Robert H Wylie, director
Mr. dean Stuart Jenkins, director
dated this 23rd day of august 2019
38
MaxiTRaNS iNduSTRieS
Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income
For The Year Ended 30 June 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note
2(a)
2(a)
2(b)
9
7
21
3(a)
27
27
Continued Operations
Sale of goods
Rendering of services
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
interest income
Other income – sale of assets
employee and contract labour expenses
Warranty expenses
depreciation and amortisation expenses
Finance costs
Other expenses
impairment loss on intangible assets
Share of net profits of associates accounted for using the equity method
(Loss)/Profit before income tax
income tax benefit/(expense)
(Loss)/Profit from continued operations
Discontinued Operation
(Loss)/Profit from discontinued operation, net of tax
(Loss)/Profit on disposal of subsidiary, net of tax
(Loss)/Profit for the year
(Loss) attributable to:
equity holders of the Company
Non-controlling interests
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Loss)/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
Cashflow hedge reserve
Items that will never be re-classified to profit or loss:
Revaluation of land and buildings
Related income 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
Earnings/(Loss) 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)
Earnings/(Loss) per share from continued operations:
Basic earnings per share (cents per share)
diluted earnings per share (cents per share)
Consolidated
2019
$’000
2018
$’000
329,915
17,187
5,616
(211,206)
48
202
(98,168)
(3,014)
(5,533)
(2,643)
(31,806)
(26,882)
2,058
(24,226)
8,092
(16,134)
(2)
(1,568)
(17,704)
(17,704)
–
375,087
14,907
2,578
(241,132)
58
72
(100,976)
(3,770)
(4,073)
(2,328)
(27,750)
–
1,404
14,077
(3,734)
10,343
(332)
10,011
10,077
(66)
(17,704)
10,011
917
(342)
12,690
(3,807)
9,458
(8,246)
(8,233)
(13)
(9.57)
(9.57)
(8.72)
(8.72)
850
(35)
3,901
(1,136)
3,580
13,591
13,573
18
5.44
5.44
5.58
5.58
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.
Consolidated Statement of Financial Position
For The Year Ended 30 June 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Current Assets
Cash and cash equivalents
Trade and other receivables
inventories
Current tax assets
assets held for sale
Other
Total Current Assets
Non-Current Assets
investment in associate
Property, plant and equipment
intangible assets
deferred tax assets
Other
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Other Liabilities
interest bearing loans and borrowings
Current tax liability
Provisions
Liabilities held for sale
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
aNNuaL RePORT 2019
39
Note
4
5
3(c)
6
7
3(b)
8
9
3(c)
10
9
3(b)
10
11
Consolidated
2019
$’000
11,925
42,381
59,267
768
–
3,779
2018
$’000
9,692
39,120
57,700
2,237
19,813
1,584
118,120
130,146
11,356
41,680
44,297
10,858
–
108,191
226,311
44,635
3,133
255
–
11,743
–
59,766
43,670
–
1,034
–
44,704
104,470
121,841
56,386
15,278
50,177
121,841
–
4,826
93,733
34,265
–
1,249
134,073
264,219
47,327
4,090
752
–
13,126
9,550
74,845
49,908
2,409
1,141
97
53,555
128,400
135,819
56,386
20,998
57,097
134,481
1,338
121,841
135,819
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated
financial statements.
40
MaxiTRaNS iNduSTRieS
Consolidated Statement of Changes in Equity
For The Year Ended 30 June 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Asset
revaluation
reserve1
$’000
Issued
capital
$’000
Retained
earnings
$’000
Non-
controlling
interest
$’000
Other
reserves2
$’000
Total
$’000
Note
Balance at 1 July 2018
56,386
17,886
57,097
1,338
3,112
135,819
Comprehensive income for the year
Loss for the year
Other comprehensive income
Net exchange differences on
translation of financial statements
of foreign operations
Revaluation of land and buildings
Cashflow hedge reserve
Total comprehensive income
for the year
Transactions with owners
recorded directly in equity
dividends to equity holders
13
Final dividend to previous minority
shareholder
de-recognition of subsidiary
Total transactions with owners
Transfer to retained earnings on
disposal of property
Share-based payment
transactions
Other
15
–
–
–
–
–
–
–
–
8,883
–
(17,704)
–
–
–
–
–
–
–
–
(17,704)
–
(13)
930
917
–
–
–
8,883
(342)
(342)
–
8,883
(17,704)
(13)
588
(8,246)
–
–
–
–
–
–
–
–
–
–
(2,776)
–
–
–
–
–
–
(2,776)
–
(1,325)
(1,124)
(2,449)
–
(2,776)
(1,325)
(1,124)
(5,225)
(13,805)
13,805
–
–
–
(245)
–
–
–
–
–
(262)
–
(262)
(245)
Balance at 30 June 2019
56,386
12,964
50,177
–
2,314
121,841
1. asset revaluation reserve
The asset revaluation reserve includes the revaluation increments arising from the revaluation of land and buildings.
2. Other reserves
Other reserves comprise 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.
aNNuaL RePORT 2019
41
Consolidated Statement of Changes in Equity (Cont.)
For The Year Ended 30 June 2019
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Asset
revaluation
reserve1
$’000
Issued
capital
$’000
Retained
earnings
$’000
Non-
controlling
interest
$’000
Other
reserves2
$’000
Total
$’000
Note
Balance at 1 July 2017
56,386
15,121
53,539
1,321
2,360
128,727
Comprehensive income for the year
Profit for the year
–
–
10,077
(66)
–
10,011
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
Final dividend to previous minority
shareholder
Final payment for 20% minority
share purchased on 30 June 2017
Share-based payment
transactions
Other sundry movements
Total transactions with owners
13
19
15
–
–
–
–
–
–
–
–
–
–
–
2,765
–
–
–
–
85
–
–
765
–
(35)
850
2,765
(35)
2,765
10,077
19
730
13,591
–
(6,478)
–
–
–
–
–
(12)
(31)
–
2
(6,519)
–
–
–
–
(2)
(2)
–
(6,478)
–
–
22
–
(12)
(31)
22
–
22
(6,499)
Balance at 30 June 2018
56,386
17,886
57,097
1,338
3,112
135,819
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 comprise 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.
42
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows
For The Year Ended 30 June 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
interest received
interest and other costs of finance paid
income tax paid
Consolidated
2019
$’000
2018
$’000
Note
409,839
450,322
(411,384)
(422,870)
48
(2,594)
(2,007)
58
(2,474)
(5,269)
Net cash (used in) /provided by operating activities
22
(6,098)
19,767
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
dividends received
Proceeds from disposal of subsidiary (net of cash and costs)
acquisition of investment in associate
Proceeds from sale of property, plant and equipment
(7,867)
(5,858)
1,408
6,141
(5,880)
29,835
(14,485)
–
1,020
–
(31)
130
Net cash provided by /(used in) investing activities
17,779
(13,366)
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Payment of finance lease liabilities
dividends paid
Net cash used in financing activities
Net increase in cash
Cash and cash equivalents at beginning of year
*Less: cash held for sale
Cash and cash equivalents at end of year
13
(7,719)
1,709
(662)
(2,776)
(9,448)
2,233
9,692
–
11,925
(3,349)
9,610
(230)
(6,490)
(459)
5,942
6,140
(2,390)
9,692
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial statements.
aNNuaL RePORT 2019
43
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING
Accounting policies
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 2019 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.
The financial report contains comparative information
that has been adjusted to align with the presentation of
the current period, where necessary.
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
Corporations (Rounding in Financial/directors Reports)
instruments 2016/191 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 23 august 2019.
The relevant australian accounting Standards and
interpretations that became effective and that were
early adopted by the Group since 30 June 2018 were:
• aaSB 9 Financial instrument. Mandatory for years
beginning on or after 1 January 2018. This standard
replaces aaSB139.
• aaSB 15 Revenue from Contracts with Customers.
Mandatory for years beginning on or after
1 January 2018. it replaces existing revenue
recognition guidance, including aaSB 118 Revenue,
aaSB 111 Construction Contracts and aaSB
interpretation 13 Customer Loyalty Programmes
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 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.
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.
NCi are measured at their proportionate share
of the acquiree’s identifiable net assets at the date
of acquisition. Changes in the Group’s interest in a
subsidiary that do not result in a loss of control are
accounted for as equity transactions.
The Group’s interests in equity-accounted investees
comprise interests in associates. associates are
those entities in which the Group has significant
influence, but not control or joint control, over the
financial and operating policies.
interests in associates are accounted for using the
equity method. They are initially recognised at cost,
which includes transaction costs. Subsequent to
initial recognition, the consolidated financial
statements include the Group’s share of profit
44
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
or loss and OCi of equity-accounted investees, until
the date on which significant influence 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 an associate.
unrealised gains arising from transactions with
associates are eliminated to the extent of the Group’s
interest in the associate.
(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 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 price.
(d) Property, plant and equipment
(i) Owned assets
Land and buildings
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.
Fair value of land and buildings is assessed at
each reporting period.
independent valuations were obtained during the
financial year ending 30 June 2019 in relation to
all 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. 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.
aNNuaL RePORT 2019
45
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
(ii) Leased assets
(ii) Research and development
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 when it’s ready
for use. Land is not depreciated. The estimated
useful lives are reflected in the following rates
in the current and comparative periods:
2019
2018
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 the 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)).
Buildings
25-40 years
25-40 years
(iii) Brand names
Plant and
equipment
2-20 years
2-20 years
Leased plant
and equipment 3.33-10 years 3.33-10 years
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 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.
Brand names acquired by the Group have
indefinite useful lives and are measured at cost
less accumulated impairment. They are tested
annually for impairment, or more frequently
if events or circumstances indicate that they
might be impaired.
(iv) Intellectual Property
intellectual property acquired by the Group with
definite useful lives are measured at cost less
accumulated impairment. They are tested
annually for impairment, or more frequently
if events or circumstances indicate that they
might be impaired.
(v) Other intangible assets
Other intangible assets that are acquired by
the Group are stated at cost less accumulated
amortisation and impairment losses.
(vi) Amortisation
amortisation of intangibles other than goodwill
and indefinite life intangibles 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.
46
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
The estimated useful lives are reflected
in the following rates in the current and
comparative periods:
2019
2018
intellectual
property
0-20 years
0-20 years
Software
5-10 years
10 years
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 highly probable 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
The Group measures trade and other receivables
are stated at their amortised cost less impairment
losses (see accounting policy (i)) if both of the
following conditions are met:
• The financial asset is held within a business
model with the objective to hold financial assets
in order to collect contractual cash flows; and
• The contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding
if any such indication exists, the asset’s recoverable
amount is estimated.
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.
For trade and other receivables, the Group applies
a simplified approach in calculating expected credit
losses. Therefore, the Group does not track changes
in credit risk, but instead recognises a loss
allowance at each reporting date, based on known
issues on collectability of outstanding debt.
(j) Calculation of recoverable amount
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
post-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.
(h) Cash and cash equivalents
(k) Reversals of impairment
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.
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.
an impairment loss in respect of goodwill is
not reversed.
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.
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
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.
aNNuaL RePORT 2019
47
(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.
(m) Employee benefits
(i) Defined contribution superannuation funds
(n) Provisions
Obligations for contributions to defined
contribution superannuation funds are
recognised as an expense in the profit
or loss as incurred.
(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.
The fair value of performance rights granted
is recognised as an employee expense with a
corresponding increase in equity recorded
over the vesting period.
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.
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.
provision is recognised in the consolidated
statement of financial position 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.
(o) Warranties
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
48
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
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.
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.
(r) Earnings per share
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 transfer of
control, 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 completed.
(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.
(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.
Receivables and payables are stated with the amount
of GST included.
The net amount of GST recoverable from, or payable
to, the aTO is included as a current asset or liability
in the 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.
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
(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.
(iii) Finance costs
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.
(w) Derivative financial instruments
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.
derivatives are initially recognised at fair value.
Subsequent to initial recognition, derivative financial
instruments are stated at fair value, and changes
therein are recognised 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.
aNNuaL RePORT 2019
49
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.
(x) Accounting estimates and judgements
Management discussed with the Board 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
The Group assesses whether goodwill and
intangibles with indefinite useful lives are
impaired at least annually in accordance with
accounting policy (i).
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.
50
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
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.
There have not been any changes to the
objectives, policies and procedures for managing
risk during the current year or in the prior year.
(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 2019 was 28% (2018: 30%). 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.
(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 independent valuations.
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) 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.
(z) Segment reporting
(ab) Government grants
From time to time the Group becomes eligible for
government grants. These grants, which are related
to assets are accounted for in accordance with aaSB
120 accounting for Government Grants and
disclosure of Government assistance. The Group
has elected to recognise government grants by
reducing the carrying amount of the asset.
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.
(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.
aNNuaL RePORT 2019
51
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
2. NOTES TO THE STATEMENT OF PROFIT AND LOSS
in the following table, revenue from customers (excluding revenue related to discontinued operations) is classified by
major products and services lines and primary geographical market for the Groups Reportable segments (see Note 14).
2a. REVENUE
Segment
Trailer
Solutions MaxiPARTS
Segment
Trailer
Solutions MaxiPARTS
2019
Total
2018
Total
Type of Good or Service
Trailer Sales
Trailer Repairs and other services
222,972
17,187
–
–
222,972
276,041
17,187
14,907
–
–
276,041
14,907
Sale of parts
–
106,943
106,943
–
101,945
101,945
Total Group Revenue
240,159
106,943
347,102
290,948
101,945
392,893
Geographical Market
australia
NZ
China
223,909
106,943
330,852
267,524
101,945
369,469
16,250
–
–
–
16,250
20,525
–
–
–
–
20,525
–
Total Group Revenue
240,159
106,943
347,102
288,049
101,945
389,994
2b. EXPENSES
Employee and contract labour expenses:
– employee expenses
– contract labour expenses
Total employee and contract labour expenses
Consolidated
2019
$’000
2018
$’000
86,405
11,763
98,168
87,614
13,362
100,976
52
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
3. TAXATION
(a) Income tax
Reconciliation of tax (benefit)/expense
Prima facie tax payable on (loss)/profit before tax for continued
and discontinued operations at 30% (2018: 30%)
add/(deduct) tax effect of:
Research and development allowance
Non-assessable expenditure
associate equity accounted income
under/(over) provision in prior year
impact of tax rates in foreign jurisdictions
Tax losses utilised
Add/(deduct) Income tax attributable to discontinued operations
Consolidated
2019
$’000
2018
$’000
(7,739)
4,097
(204)
629
(617)
(52)
(13)
(97)
(354)
1
(268)
73
(421)
140
27
–
(449)
86
3,734
2,530
229
962
(72)
85
Income tax (benefit)/expense in consolidated statement of profit or loss
(8,092)
income tax (benefit)/expense attributable to (loss)/profit from continuing
operations is made up of:
Current tax expense
Prior year under/(over) provision
deferred tax expense
– origination and reversal of temporary difference
– prior year under/(over) – deferred differences
exclude discontinued operation current tax benefit/(expense)
2,027
200
(10,068)
(252)
1
Income tax (benefit)/expense in consolidated statement of profit or loss
(8,092)
3,734
(b) Deferred tax assets/(deferred tax liabilities)
The deferred tax assets/(deferred tax liabilities) are made up of the
following estimated tax benefits/(cost):
– Provisions and accrued employee benefits
– Property, plant and equipment
– intangible assets
– inventory
– Other
Net deferred tax asset/(liability)
Balance at beginning of year
Recognised in profit or loss
Recognised in equity
Transfer to assets held for sale
Net deferred tax asset/(liability)
4,702
5,049
390
499
218
10,858
(2,409)
10,068
3,199
–
10,858
4,857
(7,025)
(1,488)
1,134
113
(2,409)
(280)
(712)
(1,121)
(296)
(2,409)
aNNuaL RePORT 2019
53
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
(c) Current tax asset/(liability)
The Group’s current tax asset of $768,032 (2018: $2,237,282) and current tax liability of nil (2018: nil) represents the
amount of income taxes receivable/(payable) in respect of current and prior financial periods.
4. TRADE AND OTHER RECEIVABLES
Consolidated 2019
Consolidated 2018
Gross
$’000
Impairment
$’000
Total
$’000
Gross
$’000
Impairment
$’000
Total
$’000
Trade debtors
Not past due
Past due 0 – 30 days
Past due 31 – 60 days
Past due over 61 days
Trade receivables
Other receivables
Total trade and other receivables
5. INVENTORIES
26,202
9,156
4,013
3,299
42,670
Second–hand units – at net realisable value
Finished goods – at cost
Work in progress – at cost
Raw materials – at cost
Less: provision for decrease to net realisable value
Total inventories
26,202
25,586
(142)
25,444
(10)
(12)
(577)
(599)
9,146
4,001
2,722
8,856
1,981
3,305
42,071
39,728
(49)
(33)
(192)
(416)
310
42,381
Consolidated
2019
$’000
1,671
40,925
4,431
14,057
(1,817)
59,267
8,807
1,948
3,113
39,312
(192)
39,120
2018
$’000
1,162
38,016
4,661
15,863
(2,002)
57,700
54
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
6. PROPERTY, PLANT AND EQUIPMENT
Land and buildings at fair value
accumulated depreciation
Total land and buildings
Plant and Equipment
Plant and equipment at cost
accumulated depreciation
Subtotal plant and equipment
Office equipment at cost
accumulated depreciation
Subtotal office equipment
Leased property, plant and equipment
accumulated depreciation
Subtotal leased property, plant and equipment
Capital work in progress*
Total plant and equipment
Total property, plant and equipment
Consolidated
2019
$’000
24,300
–
2018
$’000
46,205
–
24,300
46,205
43,644
39,212
(30,067)
(28,191)
13,577
11,022
11,021
10,025
(8,935)
(8,367)
2,087
1,501
(787)
714
1,002
17,380
41,680
1,658
1,501
(575)
926
33,923
47,528
93,733
* The prior year comparative of PP&e includes $33 million relating to capital expenditure on the eRP system which has been
reclassified to intangible assets in the current year.
independent valuations/market assessments were obtained during 30 June 2019 in relation to all land and buildings held
at that time, for use by the directors in assessing land and buildings at fair value.
Refer to Note 26(e) for details of security over land and buildings.
aNNuaL RePORT 2019
55
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
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 revaluation
disposals
depreciation
Foreign currency movement
Consolidated
2019
$’000
46,205
163
4,687
(27,012)
(362)
619
2018
$’000
43,325
10
3,901
–
(539)
(492)
Carrying amount at the end of the financial year
24,300
46,205
Plant and equipment
Carrying amount at the beginning of the financial year
additions
Transfer to inventories
Transfers from capital works in progress
Transfer to assets held for sale
disposals
depreciation
Foreign currency movement
Carrying amount at the end of the financial year
Office equipment
11,021
1,195
(449)
5,189
–
(1,070)
(2,196)
(113)
13,577
13,782
1,757
–
1,071
(1,717)
(1,279)
(2,660)
67
11,021
Carrying amount at the beginning of the financial year
1,658
1,447
additions
Transfers from capital works in progress
Transfer to assets held for sale
depreciation
Foreign currency movement
Carrying amount at the end of the financial year
Leased property, plant and equipment
Carrying amount at the beginning of the financial year
additions
Transfer to assets held for sale
Other sundry movements
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 software/intangibles
Transfers to property, plant and equipment
Carrying amount at the end of the financial year
165
815
–
(558)
7
2,087
926
–
–
–
(212)
714
33,923
6,344
(33,261)
(6,004)
1,002
903
–
(191)
(518)
17
1,658
6,298
495
(5,562)
281
(586)
926
23,674
11,324
–
(1,075)
33,923
56
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
7. INTANGIBLES
Software at cost
impairment loss
accumulated amortisation
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:
Software
Carrying amount at the beginning of the financial year
Transfers from capital work in progress
additions
impairment losses
amortisation
Carrying amount at the end of the financial year
Goodwill
Carrying amount at the beginning of the financial year
Less goodwill classified as held for sale
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
Consolidated
2019
40,077
(26,882)
(1,995)
11,200
21,892
6,930
(691)
6,239
22,665
2018
958
–
(192)
766
21,892
6,930
(691)
6,239
22,665
(17,699)
(17,297)
4,966
891
(891)
–
5,368
891
(891)
–
44,297
34,265
766
33,261
5,858
(26,882)
(1,803)
11,200
21,892
–
21,892
6,239
6,239
5,368
(402)
4,966
862
–
–
–
(96)
766
24,645
(2,753)
21,892
6,239
6,239
5,771
(403)
5,368
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
Cash Generating Unit (CGU)
Trailers
MaxiPaRTS
Corporate
aNNuaL RePORT 2019
57
Consolidated
Other Intangibles
Goodwill
2019
$’000
11,205
–
11,200
22,405
2018
$’000
11,607
–
766
2019
$’000
5,193
2018
$’000
5,193
16,699
16,699
–
–
12,373
21,892
21,892
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 and are subsequently reviewed by the Board. Budgeted
eBiTda is based on expectations of future outcomes taking into account past experience, adjusted for anticipated revenue
growth. Revenue growth was projected considering 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 2.0%.
The growth rate used for years 2-5 is 2.1% which is based on recent australian Government GdP forecasts and the
after-tax nominal discount rates used were 10.9% (2018: 10.6%). The company reviews the impairment of its intangibles
on a regular basis. impairment would result from any adverse movement in discount rate or a decline in underlying
business performance (eBiTda) potentially driven by a variety factors including a softening of the end market.
The impairment review was conducted in accordance with aaSB 136. impairment was tested at the CGu level, being
Trailer Solutions and MaxiParts. For assets that are not able to be sensibly split between the CGu, these were assessed
at the Group level, namely the group eRP system held at $11.2 million as at year ended 30 June 2019 (2018: 33.62 million
was held in Property, Plant and equipment as Capital Work in Progress).
as at 30 June 2019, $26.9 million of intangible assets relating to capital expenditure accumulated for the eRP system was
deemed to be impaired at the Consolidated Group level. The remaining value of the TRaNSform asset has been
determined based on management’s estimate of the recoverable amount of an equivalent eRP system less the remaining
expenditure to complete the implementation and already amortised amounts.
The recoverable amount of the australian Trailers and MaxiParts CGu’s were found to be in excess of their respective
carrying amounts.
8. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Total trade and other payables
Consolidated
2019
35,821
8,814
44,635
2018
34,853
12,474
47,327
58
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
9. INTEREST BEARING LOANS AND BORROWINGS
Current
Lease liability
Total current interest bearing liabilities
Non-current
Bank loans – secured
Lease liability
Total non–current interest bearing liabilities
Bank loans are subject to a floating interest rate. interest rate swaps have
been executed in respect of $15.3 million (2018: $28.5 million) of this debt in
order to mitigate interest rate risk. Refer to note 26(b) for further details.
26(e)
Finance costs:
– interest on bank loans
– Finance lease charges
Total finance costs
10. PROVISIONS
Current
employee entitlements
Warranty
Other
Total current provisions
Non-current
employee entitlements
Other
Total non-current provisions
Aggregate employee entitlements liability
Warranty and other provisions at 30 June 2019 is analysed as follows:
Carrying amount at 1 July 2018
Provisions made during the year
Provisions utilised/released during the year
Foreign Currency exchange differences
Carrying amount at 30 June 2019
Consolidated
2019
2018
255
255
43,500
170
43,670
2,565
78
2,643
8,630
2,943
170
752
752
49,500
408
49,908
2,236
92
2,328
9,166
3,960
–
11,743
13,126
1,034
–
1,034
9,664
1,066
75
1,141
10,232
Warranty
$’000
Other
$’000
3,960
1,775
(2,835)
43
2,943
170
170
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
11. ISSUED CAPITAL
Balance at 30 June 2018
Balance at 30 June 2019
Ordinary shares
aNNuaL RePORT 2019
59
Number of
Ordinary Shares
Share Capital
$’000
185,075,653
185,075,653
56,386
56,386
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 one vote for each fully paid share.
The company does not have authorised capital or par value in respect of its issued shares.
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.
12. EARNINGS PER SHARE
Basic earnings per share
Earnings reconciliation
Net profit attributable to equity holders of the Company
Basic earnings
From continuing operations
From discontinued operations
Diluted Earnings
From continuing operations
From discontinued operations
Weighted average number of shares
Number of ordinary shares for basic earnings Per Share
Number of Ordinary Shares for Diluted earnings per share
Consolidated
2019
2018
(17,704)
(17,704)
(16,134)
(1,570)
(17,704)
(17,704)
(16,134)
(1,570)
10,077
10,077
10,343
(266)
10,077
10,077
10,343
(266)
(17,704)
10,077
2019
Number
2018
Number
185,075,653
185,075,653
185,075,653
185,075,653
60
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
13. DIVIDENDS
Dividends paid
2019
interim – ordinary
Total dividends paid
2018
interim – ordinary
Final – ordinary
Total dividends paid
Dividends proposed
Final – ordinary
Cents Per
Share
Total
Amount
$’000
Date of
Payment
Tax Rate for
Franking
Credit
Percent
Franked
0.00
0.00
2.00
1.50
3.50
–
–
3,702
2,776
6,478
30%
100%
–
–
13-apr-18
23-Oct-18
30%
30%
100%
100%
0.00
–
–
30%
100%
Dividend franking account
Franking credits available to shareholders of MaxiTRaNS industries Limited for
subsequent financial years
The Company
2019
$’000
2018
$’000
26,759
24,574
There is Nil (2018: $1,189,772) impact on the dividend franking account for dividends proposed after the reporting date
but not recognised as a liability.
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 corporate assets and expenses. Total finance
costs of the Group are included in unallocated corporate costs.
The MaxiTrans Group reports on two Cash Generating units (CGu’s): Trailer Solutions and Parts. The Trailer Solutions
business manufactures a diverse portfolio of trailers. The trailers are sold through our dealer network, comprising both
owned dealerships and licensed dealerships, providing full solution including after sales service and parts to our
customers. The Parts business sells trailer and truck parts at both a wholesale and retail level in australia.
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
aNNuaL RePORT 2019
61
Year Ended 30 June 2019
Business Segments
Revenue
Trailer
Solutions
$’000
Parts &
components
$’000
Corporate/
Eliminations
$’000
Total
continuing
activities
$’000
Discontinued
operation
$’000
Total
$’000
external segment revenue
240,159
106,943
–
347,102
5,435
352,537
inter-segment revenue
344
26,531
(27,483)
(608)
608
–
Total segment revenue
240,503
133,474
(27,483)
346,494
6,043
352,537
Total Revenue
Segment Result
Segment earnings pre associate,
interest and significant items
Share of net profit of equity
accounted investments
interest income
interest expense
Segment net profit before tax
(Excluding significant items)
Significant items, before tax
Gain/(loss) on disposal of subsidiary
eRP system implementation
expenses*
impairment – intangible software
Redundancy costs
acquisition/disposal
Transaction costs
Segment net profit before tax
(Including significant items)
income tax expense
Net profit after tax
depreciation and amortisation
Total Depreciation and amortisation
Assets
Segment assets
240,503
133,474
(27,483)
346,494
6,043
352,537
3,937
7,953
(5,662)
6,228
(52)
6,175
2,058
–
–
–
–
–
–
48
(2,643)
2,058
48
(2,643)
–
–
49
2,058
48
(2,594)
5,995
7,953
(8,257)
5,691
(3)
5,687
–
–
–
(39)
(226)
–
–
–
–
–
–
–
(1,568)
(1,568)
(1,860)
(1,860)
(26,882)
(26,882)
(381)
(420)
(528)
(754)
–
–
–
–
(1,860)
(26,882)
(420)
(754)
5,730
7,953
(37,909)
(24,226)
(1,571)
(25,797)
–
5,730
2,870
2,870
–
8,092
8,092
1
8,093
7,953
(29,817)
(16,134)
(1,570)
(17,704)
700
700
1,963
1,963
5,533
5,533
245
245
5,778
5,778
116,484
62,226
–
178,710
unallocated corporate assets
47,601
47,601
Consolidated total assets
116,484
62,226
47,601
226,311
Liabilities
Segment liabilities
32,568
16,595
–
49,163
unallocated corporate liabilities
–
–
55,307
55,307
Consolidated total liabilities
32,568
16,595
55,307
104,470
Capital expenditure
unallocated capital expenditure
Total capital expenditure
7,275
–
7,275
160
–
160
–
432
432
7,435
432
7,867
* non cash, non recurring
–
–
–
–
–
–
(29)
–
(29)
178,710
47,601
226,311
49,163
55,307
104,470
7,406
432
7,838
62
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
Year Ended 30 June 2018
Business Segments
Revenue
Trailer
Solutions
$’000
Parts &
components
$’000
Corporate/
Eliminations
$’000
Total
continuing
activities
$’000
Discontinued
operation
$’000
Total
$’000
external segment revenue
290,948
101,945
–
392,893
16,419
409,312
inter-segment revenue
7,553
25,477
(35,929)
(2,899)
2,899
–
Total segment revenue
298,501
127,422
(35,929)
389,994
19,318
409,312
Total Revenue
Segment Result
Segment earnings pre associate,
interest and significant items
Share of net profit of equity
accounted investments
interest income
interest expense
Segment net profit before tax
(Excluding significant items)
Significant items
income tax expense
Net profit after tax
depreciation and amortisation
Total Depreciation and amortisation
Assets
Segment assets
298,501
127,422
(35,929)
389,994
19,318
409,312
15,070
8,104
(8,230)
14,944
(419)
14,525
1,404
–
–
–
–
–
–
58
1,404
58
(2,328)
(2,328)
–
–
–
1,404
58
(2,328)
16,474
8,104
(10,500)
14,078
(419)
13,659
–
–
16,474
3,018
3,018
–
–
–
(3,561)
8,104
(14,061)
854
854
201
201
–
(3,561)
10,517
4,073
4,073
–
(87)
–
(3,648)
(506)
10,011
725
725
4,798
4,798
142,883
67,090
–
209,973
19,813
229,786
unallocated corporate assets
–
–
34,433
34,433
–
34,433
Consolidated total assets
142,883
67,090
34,433
244,406
19,813
264,219
Liabilities
Segment liabilities
60,088
16,840
–
76,928
9,550
86,478
unallocated corporate liabilities
–
–
41,922
41,922
–
41,922
Consolidated total liabilities
60,088
16,840
41,922
118,850
9,550
128,400
Capital expenditure
unallocated capital expenditure
Total capital expenditure
3,088
–
3,088
358
–
358
–
3,446
10,715
10,715
10,715
14,161
325
–
325
3,771
10,715
14,486
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.
aNNuaL RePORT 2019
63
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
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 (‘PRs’) which upon vesting can be
converted into a specified number of ordinary shares in the Company.
The terms and conditions relating to PRs currently on issue are as follows:
Period
Grant date
Total PRs issued
Total PRs forfeited
Total PRs remaining on issue
Vesting conditions
1 July 2018 – 30 June 2021
1 July 2017 –30 June 2020
19-Oct-18
2,240,646
582,419
1,658,227
30-Sep-17
1,819,520
1,819,520
–
ROiC – 100%
ROiC – 100%
Base Return on invested Capital (ROiC)
3 year average rate of 6%
3 year average rate of 6%
Target increase in ROiC
average of 0.65% per annum
(7.95% over 3 years)
average of 0.65% per annum
(7.95% over 3 years)
Percentage increase in base ROiC required
32.5%
32.5%
Minimum % of ROiC target that must be
achieved for Performance Rights to vest
66.67% (i.e. average of 0.43%
per annum)
66.67% (i.e. average of 0.43%
per annum)
Target ePS
n/a
n/a
Minimum service requirement
3 years from grant date
3 years from grant date
Details of PRs exercised:
2016/19 Plan
2017/20 Plan
2018/21 Plan
Total PRs issued
Total PRs forfeited
Total PRs exercised
Measurement of fair value
3,591,081
3,591,081
–
1,819,520
1,819,520
–
2,240,646
582,419
–
The fair value of PRs 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.
PRs 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 PRs on issue are as follows:
Fair value at grant date
Share price at grant date
2019
43.91¢
52.00¢
2018
58.79¢
67.00¢
expected volatility
40.00%
50.00%
expected dividend yield
Risk–free rate of return
Liquidity discount
5.00%
2.06%
6.50%
2.00%
n/a
15.00%
64
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
Expense/(income) recognised in profit and loss
Share based payments expense recognised
Share based payments reversed
Total share based payment expense/(income) recognised as employee costs
Consolidated
2019
$’000
255
(517)
(262)
2018
$’000
352
(330)
22
during the period it was determined that the performance and service conditions of the 2016 and 2017 PR scheme will not
be met. as a result, the total amount recognised for goods and services received over the life of the 2016 and 2017 scheme
was reversed. in addition, where an employee has left the business their PR expense was reversed. The reversal amount
is comprised of:
2016 PR scheme
2017 PR scheme
2018 PR scheme
$’000
261
235
21
16. RELATED PARTY DISCLOSURES
(a) Director and other key management personnel disclosures
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
Executives
• Mr J Curtis (deputy Chairman)
• Mr C Richards (CFO) – resigned 21 december 2018
• Mr R Wylie (Chairman)
• Ms J deMartino (CFO) – appointed 8 October 2018;
• Mr J Rizzo
• Ms S Hogg
• Ms M Verschuer – appointed 24 January 2019
Executive directors
• Mr d Jenkins (Managing director)
resigned 6 March 2019
• Mr P Loimaranta (Group General Manager – international)
• Mr a McKenzie (Group General Manager – Sales
and Marketing)
• Mr T Negus (Group General Manager – Manufacturing)
• Mr J O’Brien (General Manager – MaxiParts)
• Mr T Bradfield (CFO) – appointed 6 March 2019
aNNuaL RePORT 2019
65
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
(a) Directors’ transactions in shares
directors and their related entities acquired 203,000 (2018: 385,377) existing ordinary shares in MaxiTRaNS industries
Limited during the year.
(b) Director and other key management personnel transactions
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.
(c) Transactions with associate
during the year the Group derived revenue from the associate of $38,296,867 (2018: $40,488,567) for the sale of new units,
parts and the provisions of services. amounts receivable from the associate at year-end total $2,734,456 (2018: $3,925,567).
during the year the Group paid for services and parts from the associate totalling $2,422,069 (2018: $1,659,565). amounts
owing at year-end total $117,789 (2018: $120,977).
all dealings were in the ordinary course of business and on normal commercial terms and conditions.
(d) 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/(expense)
Consolidated
2019
$’000
2018
$’000
3,188,415
3,012,633
296,618
299,987
(114,446)
30,078
3,370,586
3,342,698
66
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
17. PARENT ENTITY
as at 30 June 2019 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
Consolidated
2019
$’000
2018
$’000
(24,791)
(3,427)
–
(24,791)
(3,427)
38,445
79,618
1,400
44,900
34,718
52,047
114,440
2,393
51,892
62,548
56,385
56,386
352
(22,019)
34,718
609
5,553
62,548
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.
aNNuaL RePORT 2019
67
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
18. CONTROLLED ENTITIES
Particulars in relation to controlled entities
Country of
Incorp.
Class of
Shares
2019
%
2018
%
Interest Held
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(ii)
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
aust.
Hong Kong
China
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
Ord.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
(i) dormant entity
(ii) as at 2 November 2018 the MaxiTRaNS industries Limited sold the 80% majority shareholding
19. ACQUISITION OF NON-CONTROLLING INTEREST ( NCI)
The Group has nil reportable NCi for FY2019. in June 2017, the Group acquired the additional 20% interest in Transport
Connection Pty Ltd for $536,405 in cash, increasing its ownership from 80% to 100%. a final payment of $31,201 was paid
in 2018 following the finalisation of the 30 June 2017 financial report of Transport Connection Pty Ltd.
Consideration paid to NCi
increase in equity attributable to owners of the Company
2019
$’000
–
–
2018
$’000
31
31
68
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
20. DEED OF CROSS GUARANTEE
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 (2016/785) 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 2019 is set out as follows:
Consolidated statement of comprehensive income
Total revenue
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Other income
employee expenses
Warranty expenses
depreciation and amortisation expenses
Finance costs
Other expenses
impairment loss on intangible assets
Share of net profits of joint ventures accounted for using the equity method
(Loss)/Profit before income tax
income tax benefit
Loss 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
Cashflow hedge reserve
Items that will never be reclassified 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
Note
Consolidated
2019
$’000
2018
$’000
325,137
362,979
6,270
2,433
(193,104)
(217,833)
250
72
(96,063)
(98,724)
(3,015)
(5,514)
(2,643)
(31,189)
(26,883)
2,058
(24,696)
8,092
(16,604)
973
(342)
12,690
(3,807)
9,514
(7,090)
(16,604)
(7,090)
(3,770)
(4,055)
(2,328)
(26,938)
–
1,404
13,240
(3,484)
9,756
429
(35)
3,901
(1,136)
3,159
12,915
9,756
12,915
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
Consolidated statement of financial position
aNNuaL RePORT 2019
69
Consolidated
2019
$’000
2018
$’000
Note
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
investments in controlled entities
Property, plant and equipment
intangible assets
deferred tax assets
Other NC assets
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
11,925
38,520
57,673
768
3,801
9,691
35,539
55,470
2,237
1,567
112,687
104,504
11,356
2,903
41,523
42,719
10,858
–
109,359
222,046
4,826
7,193
93,617
32,686
265
1,249
139,836
244,340
45,050
47,855
255
–
11,558
56,863
753
–
12,857
61,465
43,670
49,908
–
1,034
–
44,704
101,567
120,479
56,386
15,278
48,815
2,741
1,141
97
53,887
115,352
128,988
56,386
19,175
53,427
120,479
128,988
70
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
21. INVESTMENT IN ASSOCIATES AND JOINT VENTURES
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.
investment in
associate
Ownership
2019
%
36.67
2018
%
36.67
australasian Machinery
Sales Pty Ltd
Manufacturer and supplier of live
bottom trailers.
Joint Venture
80.00
–
Revenues
(100%)
Net Profit after
Tax 100%
Share of
Associate Profit
Recognised
71,004
70,740
4,762
3,829
2,058
1,404
Total
Assets
26,967
20,489
Total
Liabilities
12,914
8,453
Net Assets as
Reported by
Associate
14,054
12,035
$’000
2019
2018
Commitments
The share of the associate’s capital commitments contracted but not provided for or payable within one year was
$nil at 30 June 2019 (2018: $nil).
22. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
Reconciliation of cash flows from operating activities with operating profit/(loss) after tax
(Loss)/Profit for the year
Non-cash items in operating profit
depreciation and amortisation of assets
Gain on sale of property, plant and equipment
disposal of discontinued operation
impairment loss on intangibles assets
Share of net profits of associates accounted for using the equity method
Share based payments expense
Change in assets and 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 (used in)/provided by operating activities
Consolidated
2019
$’000
2018
$’000
(17,704)
10,011
5,533
(1,748)
1,568
26,882
(2,058)
(262)
(2,725)
(1,442)
(1,034)
(3,915)
1,283
(9,120)
(1,356)
(6,098)
4,798
73
–
–
(1,404)
22
(569)
61
2,739
3,161
(1,237)
741
1,371
19,767
aNNuaL RePORT 2019
71
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
23. 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
2019
$’000
2018
$’000
6,232
12,855
17,740
36,827
4,244
8,011
1,671
13,926
The Group leases property under operating leases expiring from one to twenty-two 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
24. CONTINGENT LIABILITIES
Consolidated
2019
$’000
7,028
–
7,028
2018
$’000
7,144
867
8,011
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.
25. REMUNERATION OF AUDITOR
Remuneration of auditor
KPMG Australia:
– auditing and reviewing the financial statements
– other services (taxation and advisory)
Overseas KPMG Firms:
– auditing and reviewing financial statements
– other services (taxation, advisory and due diligence)
Total auditor remuneration
Consolidated
2019
$
2018
$
456,212
292,830
18,836
188,254
475,048
481,084
53,940
10,015
63,955
86,849
9,554
96,403
539,003
577,487
72
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
26. FINANCIAL INSTRUMENTS
(a) Risk management framework/policies
The Group’s 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
Consolidated
2019
$’000
15,255
28,670
43,925
2018
$’000
15,161
35,500
50,661
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
2019
$’000
(201)
201
2018
$’000
(218)
218
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
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
Buy uSd dollar
0.7020
0.7498
5,038
7,028
7,177
9,373
(12)
134
aNNuaL RePORT 2019
73
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
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 been affected as follows:
uSd 10.0 cents increase
uSd 10.0 cents decrease
(d) Credit risk
Consolidated
2019
$’000
(626)
626
2018
$’000
(699)
699
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 credit worthy
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 $2,625,945 (2018: $723,768) are held by Commonwealth Bank of australia (2018:
Commonwealth Bank of australia and australian 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 liabilities based on the remaining earliest
contractual maturities, excluding net interest payable on borrowings.
30 June 2019 – Consolidated
Carrying
Amount
$’000
6 months
or Less
$’000
Trade and other payables and accruals
(44,635)
(44,635)
Borrowings
(43,925)
(255)
6–12
Months
$’000
–
–
1–2
Years
$’000
–
2–5
Years
$’000
–
(170)
(43,500)
Effect of derivative instruments
Forward exchange contracts
–
inflow
– outflow
8,877
7,527
(8,889)
(7,515)
(88,572)
(44,878)
1,350
(1,374)
(24)
–
–
–
–
(170)
(43,500)
74
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
30 June 2018 – Consolidated
Carrying
Amount
$’000
6 months
or Less
$’000
6–12
Months
$’000
Trade and other payables and accruals
(47,327)
(47,327)
–
1–2
Years
$’000
–
2–5
Years
$’000
–
Borrowings
(50,660)
(630)
(122)
(22,245)
(27,663)
Effect of derivative instruments
Forward exchange contracts
–
inflow
– outflow
Finance facilities
9,880
(9,746)
9,880
(9,746)
–
–
–
–
–
–
(97,853)
(47,823)
(122)
(22,245)
(27,663)
at year end, the Group had the following financing facilities in place with its bankers:
Consolidated
Loan facility
Overdraft facility
Multi-option facility
Less borrowings
included in liabilities
Facility Amount
Utilised
Available
2019
$’000
2018
$’000
2019
$’000
2018
$’000
51,750
64,655
43,500
52,568
5,000
5,000
–
61,750
1,000
9,000
(4,655)
70,000
–
2,626
–
46,126
–
1,395
(3,068)
50,895
2019
$’000
8,250
5,000
2,374
–
15,624
2018
$’000
12,087
1,000
7,605
(1,587)
19,105
On 29 June 2017, the Group refinanced its financing facilities. Commonwealth Bank of australia and HSBC Bank
are the Group’s new banking partners.
The loan, overdraft and other facilities are fully secured by a registered mortgage over certain land and buildings
of the controlled entities with a fair value of $24,300,370 as at 30 June 2019.
Core australian and New Zealand loan facilities of $61.75 million mature as follows, subject to continuing compliance
with the terms of the facilities:
• $30.00 million in July 2021
• $21.75 million in June 2022
• $10.00 million in June 2020
The net cash used in financing activities excluding dividends paid (totalling –$6.735 million) as disclosed in the Statement
of Cash Flows, consist of the movement in interest bearing loans and borrowings as per note 9.
interest rates are a combination of fixed and variable.
The terms and conditions of the bank facilities contain covenants in relation to gearing ratio, interest cover and leverage ratio.
at half year, 31 december 2018, the Group breached its leverage ratio and accordingly the debt was classified as current
at 31 december 2018. The Group’s Lenders provided a waiver of the 31 december 2018 covenant breach and varied the
terms of the covenants. as at 30 June 2019, the Group satisfied the leverage ratio covenants with all debt being reported
as non-current as at 30 June 2019. The Group’s forecast indicates that Group will comply will all covenants in the next
12 months.
aNNuaL RePORT 2019
75
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
(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.
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 2019.
• 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
Consolidated
2019
$’000
349
2018
$’000
41
–
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 and assessments against current market prices have been performed at 30 June 2019 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 2018/19, including changes to the
unobservable inputs.
Opening balance as at 1 July 2018
Fair value revaluation
additions
disposals
depreciation recognised in the statement of profit and loss
exchange rate variance
Closing balance as at 30 June 2019
Consolidated Land
and Buildings
46,205
4,687
163
(27,012)
(362)
619
24,300
76
MaxiTRaNS iNduSTRieS
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
27. DISCONTINUED OPERATION
On 2 November 2018 MaxiTRaNS industries Limited sold its 80% share of Yangzhou Maxi-CuBe Tong Composites Co Ltd
(MTC) which forms part of the Parts & Components segment. MTC was classified as held-for-sale as at 30 June 2018.
The comparative consolidated statement of profit or loss and OCi has been restated to show the discontinued operation
separately from continuing operations.
(a) Results of Discontinued Operation
Sale of goods
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
employee and contract labour expenses
depreciation and amortisation expenses
Finance costs
Other expenses
Profit/(loss) from discontinued operation before tax
income tax expense
Profit/(loss) from discontinued operation
Loss on sale of discontinued operation
Less: Non-Controlling interest
Profit/Loss from discontinued operations, net of tax
Basic earnings (loss) per share (cents per share)
diluted earnings (loss) per share
2019
$’000
5,435
1
2018
$’000
19,317
178
(4,220)
(15,862)
(276)
(245)
(49)
(649)
(3)
1
(2)
(1,568)
–
(1,570)
(0.85)
(0.85)
(852)
(725)
(146)
(2,329)
(419)
87
(332)
0
66
(266)
(0.14)
(0.14)
The loss from the discontinued operation of $2 thousand (2018: loss of $332 thousand) is 80% attributable to the owners
of the Company.
(b) Cash flows from (used in) Discontinued Operation
Net cash used in operating activities
Net cash from investing activities
Net cash used in financing activities
Net cash flows for the year
2019
$’000
(492)
(29)
(840)
(1,361)
2018
$’000
1,652
(318)
(389)
945
Consolidated Statement of Cash Flows (Cont.)
For The Year Ended 30 June 2019
28. STANDARDS ISSUED BUT NOT YET
EFFECTIVE
a number of new standards are effective for annual
reporting periods beginning after 1 July 2019 and earlier
application is permitted; however, the Group has not
early adopted the new or amended standards in
preparing these consolidated financial statements.
The following standards are expected to have an
impact on the Group’s financial statements in the
period of initial application.
(a) AASB 16 Leases
The Group is required to adopt aaSB 16 Leases from
reporting periods commencing after 1 January 2019.
aaSB 16 introduces a single, on-balance sheet lease
accounting model for lessees. a lessee recognises a
right-of-use asset representing its right to use the
underlying asset and a lease liability representing its
obligation to make lease payments. There are recognition
exemptions for short-term leases and leases of low-
value items. Lessor accounting remains similar to
the current standard – i.e. lessors continue to classify
leases as finance or operating leases.
(i) Transition
as a lessee, the Group can either apply the standard
using a:
• retrospective approach; or
• modified retrospective approach with optional
practical expedients.
The lessee applies the election consistently to all of
its leases.
The Group has chosen to measure the right-of-use
assets at an amount equal to the lease liability, adjusted
by the amount of any prepaid or accrued lease payments
relating to that lease recognised in the statement of
financial position immediately before the date of initial
application. The Group plans to apply aaSB 16 initially
on 1 July 2019, using the modified retrospective approach.
Therefore, the cumulative effect of adopting aaSB 16 will
be recognised as an adjustment to the opening balance
assets and liabilities at 1 July 2019, with no restatement
of comparative information.
(ii) Leases in which the Group is a lessee
The Group will recognise new assets and liabilities for its
operating leases of rental properties, motor vehicle fleet
and other equipment lease agreements. The nature of
expenses related to those leases will now change because
the Group will recognise a depreciation charge for the
right-of-use assets and interest expense on lease liabilities.
Previously, the Group recognised operating lease
expense on a straight-line basis over the term of the
lease, and recognised assets and liabilities only to the
extent that there was a timing difference between actual
lease payments and the expense recognised.
aNNuaL RePORT 2019
77
in additional, the Group will no longer recognise
provisions for operating leases that it assesses to be
onerous. instead, the Group will include the payments
due under the lease in its lease liability.
No significant impact is expected for the Group’s
finance leases.
Based on the information currently available the Group
estimates that it will recognise additional right-of-use asset
between $43.3 million to $51.2 million as at 1 July 2019.
The Group does not expect the adoption of aaSB 16
to impact its ability to comply with the existing
leverage covenants.
(iii) Leases in which the Group is a lessor
The Group is not required to make any adjustments
for leases in which it is a lessor.
(b) AASB 112 Income Taxes
The amendments clarify that the income tax
consequences of dividends are linked more directly to
past transactions or events that generated distributable
profits than to distributions to owners. Therefore, an
entity recognises the income tax consequences of
dividends in profit or loss, other comprehensive income
or equity according to where the entity originally
recognised those past transactions or events.
an entity applies those amendments for annual reporting
periods beginning on or after 1 January 2019, with early
application permitted. When an entity first applies those
amendments, it applies them to the income tax
consequences of dividends recognised on or after the
beginning of the earliest comparative period. Since the
Group’s current practice is in line with these amendments,
the Group does not expect any effect on its consolidated
financial statements.
(c) AASB 123 Borrowing Costs
The amendments clarify that an entity treats as part
of general borrowings any borrowing originally made
to develop a qualifying asset when substantially all
of the activities necessary to prepare that asset for
its intended use or sale are complete.
an entity applies those amendments to borrowing costs
incurred on or after the beginning of the annual reporting
period in which the entity first applies those amendments.
an entity applies those amendments for annual reporting
periods beginning on or after 1 January 2019, with early
application permitted. Since the Group’s current practice
is in line with these amendments, the Group does not
expect any effect on its consolidated financial statements.
29. EVENTS SUBSEQUENT TO BALANCE DATE
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 2019.
78
MaxiTRaNS iNduSTRieS
Independent Auditor’s Report
For The Year Ended 30 June 2019
Independent Auditor’s Report
To the shareholders of MaxiTRANS Industries Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
MaxiTRANS Industries Limited (the
Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
giving a true and fair view of the
Group’s financial position as at 30
June 2019 and of its financial
performance for the year ended on
that date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
Consolidated statement of financial position as at 30
June 2019
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
then ended
Notes including a summary of significant accounting
policies
Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Independent Auditor’s Report (Cont.)
For The Year Ended 30 June 2019
aNNuaL RePORT 2019
79
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
Impairment of the ERP software ($26.9m) and recoverability of goodwill and other intangible
assets ($44.3m)
Refer to Note 7 Intangibles
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s
annual testing of the ERP software system
(software), goodwill and other intangible assets
for impairment, given the:
size of the balance (being 19.5% of total
assets); and
market capitalisation of the Group being
below the carrying amount of the net
assets of the Group at year-end, increasing
the possibility of software, goodwill and
other intangible assets being impaired and
increasing our audit effort in this area.
In relation to the carrying value of the software,
goodwill and other intangible assets we
focused on the significant forward-looking
assumptions the Group applied in their value in
use models, including:
forecast cash flows, growth rates and
terminal growth rates - the Group has
experienced competitive market conditions
in the current year and incurred a loss
during the year;
discount rate - these are complicated in
nature and vary according to the conditions
and environment the specific CGU is
subject to from time to time, and the
model’s approach to incorporating risks into
the cash flows or discount rates.
In addition to the above, the Group recorded an
impairment charge of $26.9m against the
software.
Our procedures included:
We considered the appropriateness of the
value in use method applied by the Group to
perform the annual test of software, goodwill
and other intangible assets for impairment
against the requirements of the accounting
standards.
We assessed the integrity of the value in use
models used, including the accuracy of the
underlying calculation formulas.
We compared the forecast cash flows
contained in the value in use models to Board
approved budget.
We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
incorporated in the models.
We challenged the forecast cash flows by
comparing the financial year 2020 forecast
cash flows to the historical actual growth in
sales, gross profit and EBITDA. We used our
knowledge of the Group, their past
performance, business and customers.
We inspected post year-end management
reporting accounts to compare actual
performance to date against forecast for
financial year 2020.
We considered the sensitivity of the models
by varying key assumptions, such as financial
year 2020 forecast cash flows, growth rates,
terminal growth rates and discount rates,
within a reasonably possible range, to identify
80
MaxiTRaNS iNduSTRieS
Independent Auditor’s Report (Cont.)
For The Year Ended 30 June 2019
We involved valuation specialists to supplement
our senior audit team members in assessing
this key audit matter.
those CGUs at higher risk of impairment and
to focus our further audit procedures.
We compared forecast growth rates and
terminal growth rates to published studies of
industry trends and expectations. We used our
knowledge of the Group, their past
performance, business and customers, and
our industry experience.
Working with our valuation specialists we
independently developed a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted
by risk factors specific to the Group and the
industry it operates in.
We compared the trading multiples from
comparable companies to the multiples from
the Group’s value in use models.
We assessed the Group’s reconciliation of
differences between the year-end market
capitalisation and the carrying amount of the
net assets by comparing the trading multiples
from the models to trading multiples of
comparable entities.
We recalculated the impairment charge for the
software against the recorded amount
disclosed.
We assessed the respective disclosures in the
financial report using our understanding
obtained from our testing and against the
requirements of the accounting standards.
Other Information
Other Information is financial and non-financial information in MaxiTRANS Industries Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
Independent Auditor’s Report (Cont.)
For The Year Ended 30 June 2019
aNNuaL RePORT 2019
81
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error
assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our Auditor’s Report.
82
MaxiTRaNS iNduSTRieS
Independent Auditor’s Report (Cont.)
For The Year Ended 30 June 2019
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of MaxiTRANS Industries Limited for the
year ended 30 June 2019, complies with
Section 300A of the Corporations Act
2001.
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 responsibilities
We have audited the Remuneration Report included in
pages 10 to 16 of the Directors’ report for the year
ended 30 June 2019.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Suzanne Bell
Partner
Melbourne
23 August 2019
ANNUAL REPORT 2019
83
Australian Stock Exchange Additional Information
For The Year Ended 30 June 2019
For The Year Ended 30 June 2019
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere
in this report.
SHAREHOLDINGS
Substantial shareholders
The names of the substantial shareholders as at 31 July 2019 are:
Transcap Pty Ltd and related parties
HGT Investments Pty Ltd
Spheria Asset Management
Greig & Harrison Pty Ltd
TelstraSuper Pty Ltd
Voting rights
Ordinary
Shares
25,547,972
20,900,000
13,614,114
9,356,501
9,260,831
As at 31 July 2019, there were 3,327 holders of ordinary shares of the Company.
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 2019, there were no unquoted options over unissued ordinary shares.
Distribution of shareholders
As at 31 July 2019
Range of Units
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and Over
Rounding Total
Ordinary Fully Paid Shares
Total holders
402
834
596
1,293
202
3,327
84
MaxiTRaNS iNduSTRieS
Australian Stock Exchange Additional Information (Cont.)
For The Year Ended 30 June 2019
Shareholders with less than a marketable parcel
as at 31 July 2019, there were 556 shareholders holding less than a marketable parcel of 1,725 ordinary shares
($0.29 on 31 July 2019) in the Company totalling 420,898 ordinary shares.
On market buy-back
There is no current on-market buy-back.
Top Holders
Name
1. HGT investments Pty Ltd
2. Transcap Pty Ltd
3. HSBC Custody Nominees (australia) Limited
4. J P Morgan Nominees australia Pty Limited
5. Citicorp Nominees Pty Limited
6. Toroa Pty Ltd
7. Transcap Ptt Ltd
8. Horrie Pty Ltd
9. de Bruin Securities Pty Ltd
10. debuscey Pty Ltd
11. John e Gill Trading Pty Limited
12. Mr eric dean Ross
13. John e Gill Operations Pty Ltd
14. BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd drp
15. James R Curtis
16. Hillmorton Custodians Pty Ltd
17. Mahata Pty Ltd
18. aJT Holdings Pty Ltd
19. Tanerka Pty Ltd
20. Mr Peter andrew Ronalds
Units
% of Units
21,000,000
14,940,739
11,204,527
10,362,987
9,352,677
4,286,241
2,994,810
2,165,000
2,129,773
1,797,056
1,571,933
1,406,540
1,391,657
1,352,164
1,328,439
1,311,000
1,222,392
1,200,000
1,102,620
919,132
11.35
8.07
5.81
5.60
4.69
2.32
1.62
1.17
1.15
0.97
0.85
0.76
0.75
0.73
0.72
0.71
0.66
0.65
0.60
0.50
Totals: Top 20 Holders Of Ordinary Fully Paid Shares (Total)
Total Remaining Holders Balance
91,917,923
93,157,730
49.67
50.33
Corporate Governance Statement
The Corporate Governance Statement of the
directors and the accompanying appendix 4G is
separately lodged with the aSx and forms part
of this directors’ Report. it may also be found on
the Company’s website at www.maxitrans.com.
ANNUAL REPORT 2019
85
Corporate Directory
Company Secretary
Share Registry
Stock Exchange
Amanda Jones
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
The Company is listed on the
Australian Securities Exchange.
Other Information
MaxiTRANS Industries Limited
ACN 006 797 173
maxitrans.com
Computershare Investor Services
Yarra Falls, 452 Johnston Street
Abbotsford VIC 3067
Tel 1300 850 505 (within Australia)
Tel
+61 3 9415 4000
(outside Australia)
Auditor
KPMG
Tower Two
Collins Square
727 Collins Street
Melbourne VIC 3000
www.colliercreative.com.au #MAX0037
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