More annual reports from MaxiPARTS:
2023 ReportPeers and competitors of MaxiPARTS:
DeliverooPART
OF EVERY
JOURNEY
Annual Report 2022
SETTING
THE PATHWAY
TO GROWTH
Contents
02 FY22 and The Journey Ahead
03 The Chairman’s Report
04 Managing Director Report
06 Business Overview
08 Truckzone Group Acquisition
12 Online Acceleration
14 Board and Leadership Team
18 Financial Report
19 Report of the Directors
IBC Corporate Directory
Why MaxiPARTS
MaxiPARTS is one of the largest distributors
of commercial truck and trailer parts in Australia.
With 27 stores conveniently situated across Australia,
we are committed to providing our customers with
high-quality products and exceptional customer service.
In addition to our own brands MAXUS and Exxel,
we have developed strategic relationships with
some of the world’s leading automotive suppliers,
ensuring we have a wide range of options available
in both OEM and aftermarket products.
2022 Financial Highlights
Revenue
$157.4m
MaxiPARTS Segment Profit
excluding corporate cost ($14.5m)
Net Cash Position
+14.7%
+11.6%
+$1.9m
01
ANNUAL REPORT 2022 FY22 and The Journey Ahead
In FY22 the business
saw significant change
and undertook a major
transformation as it began
the journey to set itself
up on a path that would
enable it to capitalise
on the foundations of being
a pure play, commercial
parts focused business;
setting a pathway for
future growth.
In a year full of change, the first milestone
began in August 2021 when MaxiTRANS
sold off its ‘big brother’ in the Trailer solutions
business to the private market.
Separating the businesses required significant
effort both commercially and through the
separation of the joint supply and business
functions. Post-sale of the business the Group
went through a name change from MaxiTRANS
to MaxiPARTS. In the end through the sale of the
business and associated properties, the Group
was able to reduce the ongoing Group’s debt and
pay out a special dividend of 62.5 cents per share.
The outcome of the separation resulted in
letting the ‘jewel’ of the business come
out of the shadows and establish itself
with its peers as a pure play, commercial parts
business with renewed focus and access to
capital for executing its growth plans.
Post-separation the business remained
focused and committed to providing our
customers with quality parts and great
service, resulting in further Revenue and
Profit growth in the underlying business.
With the Group refocused and energised for
further accelerated growth, MaxiPARTS followed
its strategic rationale and core strategy which
led to the second major milestone of the year
in February 2022 with the acquisition of
Truckzone Group only a few months after
separation. For more information regarding
the Truckzone Acquisition, refer to page 08.
The acquisition of the Truckzone business
so early in our journey as a dedicated parts
distribution business has accelerated our
strategic growth plans surrounding network and
core product expansion, allowing us to remain
well-positioned as one of the industry leaders.
The Group remains focused to execute on
the growth synergies expected from the
Truckzone acquisition and financially strong to
continue to add value through further organic
and inorganic strategic growth projects that
are in-line with the Group’s strategic rationale.
Value Proposition
To provide our Customers
with quality products and
exceptional service.
MaxiPARTS adds value by partnering with
customers to meet individual supply chain
needs and leverage its national footprint,
providing cost-effective solutions.
02
MaxiPARTS Limited
The Chairman’s Report
Dear Shareholders,
The Managing Directors report will focus in some
detail on the trading performance, however, I would like
to highlight the fact that despite the business working
through significant projects in respect of the disposal of
the Trailer solutions business and then the acquisition
of the Truckzone business, as well as managing the
significant short term challenges presented through
the year in terms of staff isolations (COVID-19), global
supply chain disruption and significant weather events,
the underlying MaxiPARTS business continued to
deliver growth at both a Revenue and Profit level.
This ability to deliver consistent growth,
profit improvement, enhanced cash generation
and higher valuation multiples was the
fundamental reason the company completed
the disposal of the Trailer solutions business
and is now positioned as a market leader
in the commercial vehicle parts industry
and pure distribution business.
The acquisition of the Truckzone business,
so early in our journey as a pure distribution
business is exciting. With this acquisition
allowing us to accelerate our growth over
the coming years through two key strategic
areas of network and core product expansion.
To find an opportunity that covered both of
these areas, in a business with some scale
made the acquisition extremely well aligned
with the stated strategy we presented to the
market earlier in the year.
The support we received from all different
size and types of shareholders through the
capital raising process that allowed us to
complete the acquisition, was very strong.
As a Board and business we thank you for
your trust and support through this process.
With the changes seen in our business,
along with an overall business landscape
that is changing at a rate rarely (if ever) seen,
we have reviewed our previous plans and
updated our strategic plan to take the business
forward. As illustrated in recently released
investor packs, our strategic plan focuses
on four key pillars of activity being:
• Network
• People
• Product
• Systems and Solutions
The focused initiatives within these pillars are
designed to not only drive growth in the business,
but to ensure the foundations remain in place
to support this growth over a sustained period.
After a number of periods where the
business had not been electing to pay dividends
to address the capital constraint the business
worked through, we are pleased to have
completed the significant capital return to
shareholders in the first half through the special
dividend of 62.5 cents (allowing higher than
normal utilisation of franking credits) and
declare a FY22 H2 dividend of 2.5 cents,
in line with our previously stated dividend
distribution intention.
Finally, as previously outlined, the Board has
been working through a Board renewal program
on the basis of finding the balance between
maintaining stability and continuity at a Board
level as well as bringing in new Directors with
fresh, innovative ideas and different experiences
that are closely aligned to the core operations
of the distribution business. This program has
progressed well during the year with Gino Butera
and Debra Stirling joining the Board and
Mary Verschuer being appointed Deputy Chair
as part of this Board renewal process.
The Board and I thank you for your support,
in what has been a year of significant change
for the business.
Regards,
Rob Wylie
Chairman
03
ANNUAL REPORT 2022
Managing Director Report
FY22 was a year of significant change for the
business and one that provided many challenges to
our employees. As has been the case over the last two
years, our employees once again adapted, prioritised,
and remained focus on meeting our customers’ needs
in a very challenging environment so I would like to
thank them all for their support and contribution.
During the year, the business worked through
various projects to ensure our safety program
was suitable for the distribution business that
we are today, as well as ensuring we integrated
the Truckzone business to quickly lift the safety
standards of those new sites to be in-line with
the larger Group.
The traditional parts business incurred four
recordable injuries in the financial year which
although disappointing, is consistent with the
average over the past 3 years. That said, on
a positive note, the last 7 months of the year
saw zero injuries recorded demonstrating that
real progress has been made. There were two
recordable injuries in the newly acquired
Truckzone sites over the 4 months of operation,
which was a significant reduction over the
historical performance of those sites and once
again, we saw strong improvement at the end
of the year with May and June being injury free.
Until we are injury free, we will never be happy
with our safety performance, but we do believe
we have made strong improvements over the
year and are well placed as we move forward.
The second half of the year (particularly Q3)
saw short-term periods of high disruption for
MaxiPARTS and our customer base in terms
of staffing shortages due to COVID-19 as well as
several significant weather events in QLD and
NSW driving localised flooding. Through strong
COVID-19 operating protocols and quickly moving
staff around the network, the business has
not lost a trading day due to the pandemic and
although we had a small number of sites isolated
and unable to operate through parts of the
floods, we did not see any damage or long-term
impacts. Demonstrating the adaptability of the
business and the industry in general, we saw
the business quickly rebound to see the sales
per day average in Q4 reach record levels.
As has been well published, the global supply
chain disruption continued through the period
with general expectations being it will continue
for some time yet. Through a combination
of strong internal processes and long and
established supply relationships we managed
to minimise these impacts and maintained
average fill rates over the period.
Despite both the short and longer-term
challenges described above, the transport
industry and the market we operate in remained
extremely resilient and continues to demonstrate
the essential role it plays in our communities
and economy.
Year in Review
Cash and Debt
The business ended the year with a closing
cash balance of $11.9m and a positive net
cash/debt position of $1.9m.
As a result of both the sale of the Trailer solutions
business and the Truckzone acquisition there
were several larger financing events in the
year including:
• Cash received from the sale of the
Trailer solutions business and associated
properties ($30.5m);
• Payment of a 62.5 cent special
dividend, ($22m);
• Renegotiation of the Group’s debt facility
post the Trailer sale with a net debt reduction
of ($7.25m) in the year (new $10m facility
in place);
• Capital raising to fund the Truckzone
acquisition ($23.7m net of fees); and
• Acquisition of the Truckzone business
($18.3m).
11.6%
MaxiPARTS
segment profit
excluding corporate
cost ($14.5m)
04
MaxiPARTS Limited
The above combined with ($11.7m) negative
operating cash flow with:
• the discontinued operations generating
negative ($11.6m); and
• negative cash flow from the continuing
MaxiPARTS operations of ($0.1m).
Operating cash flow from the MaxiPARTS
operations was impacted by an investment
in inventory in H1 as the business filled supply
gaps from the prior year and adjusted inventory
management settings to help manage the
ongoing supply disruption. These inventory levels
were maintained in H2, and the business started
to recover the excess inventory identified through
the Truckzone acquisition ($1.3m recovered over
Q4). The supply to the Trailer solutions business
also transitioned to an external trade account
that drove a one-off lag impact to operating
cash flow.
Debtors days remained in line with expectations
with the business experiencing an incredibly low
amount of bad debt during the period.
Operating Results
Total Revenue from the continuing operations
was $157.4m with $13.6m of this revenue coming
from the Truckzone sites acquired at the end of
February 2022 and $143.8m generated through
the traditional MaxiPARTS business, being a
record sales result for the Group.
Sales to the previously owned Trailer business
tracked as expected post separation with volume
into the manufacturing business increasing
marginally year on year on the back of higher
production rates being offset by a reduction
through to the service area. The reduction in
service was accompanied by a change in
operating structure that saw both operating
costs and inventory move to the Trailer
operations resulting in no material change
in profit allocations between the businesses.
The remaining revenue base, being non-
Truckzone/non-Trailer business related increased
by 8.3% year on year through a combination of
price increases to recover increased supply
costs and volume gains.
Despite various supplier increases combining
with importation costs remaining high, we were
able to recover supply cost increases through
pricing adjustments to maintain margin levels
materially in line with the prior year.
The net profit after tax from the continued
operations was $4.9m for the year. The reported
loss for the year of ($4.9m) was impacted by
a variety of items including the discounted
Trailer operations and costs associated with
the disposal, changes in corporate cost
allocations and abnormal costs related
to the Truckzone acquisition.
Outlook
As outlined above, the transport industry
generally and the parts distribution businesses
that operate within it (including MaxiPARTS)
have proven to be very resilient over the various
economic cycles so despite the ongoing
inflationary challenges facing the economy
and the uncertainty around the impact of
higher petrol prices that significantly impacts
our customer base, we expect to deliver
ongoing revenue and profit improvements
in the coming period.
We do expect to see a reduction in low margin
sales to the formerly owned Trailer solutions
business in FY23-H2 as both businesses look
to reduce reliance on each other. This reduction
in sales would also drive a reduction in cost
and inventory holdings.
$143.8m was generated
through the traditional
MaxiPARTS business,
being a record sales
result for the Group.
The business will be focused on realising the
cost and revenue synergies associated with the
Truckzone acquisition and will potentially look
at further network expansion over the course
of the year.
On the back of planned site relocations in
Brisbane and Adelaide during the year and some
one-off Capital expenditure related to the final
items of the Truckzone acquisition the business
does expect to have a higher than traditional
capital expenditure year.
Peter Loimaranta
Managing Director & CEO
ANNUAL REPORT 2022
05
Business Overview
SUPPORTING OUR
CUSTOMERS NATIONALLY
With an existing national, company-owned network
and plans to further expand this in future periods,
MaxiPARTS is well placed to support customers
at either a local or national level.
Over 250
employees
06
MaxiPARTS Limited
MaxiPARTS is one of Australia’s leading independent
commercial vehicle parts distribution companies.
National footprint with 28 stores
(as of June 2022) with two further store
consolidations to take place in Q1
Distributor of leading genuine brands
as well as having an extensive range of
aftermarket commercial vehicle parts
One of Australia’s largest
importers of aftermarket
commercial vehicle parts
$45m of inventory and over 45,000 different
stock keeping units throughout the network
Over 11,500 individual account customers
(excluding cash) customers
Two established private label brands
Strategic supply partnerships with some
of the world's leading automotive suppliers.
Revenue
by Customer
Type
Revenue
by Product
Group
Fleet 22%
Trailer OE 19%
Workshops 11%
Resellers 7%
Cash and other 41%
Axles, Suspensions, Tyres, Wheels, Brakes 39%
Other General Products 31%
Trailer Products 14%
Truck, Engine, Filtration, Oil, Lubricants,
Consumables 13%
Japanese Truck Products 3%
* Revenue data based on March to June 2022 (including Truckzone acquisition).
07
ANNUAL REPORT 2022 Truckzone Group Acquisition
Strategic Rationale
Immediate Geographical
Expansion
Expansion of Core
Product Range
• Positions MaxiPARTS as one of the
largest independent multi-site commercial
vehicle parts only businesses in Australia
with a strong geographic footprint.
• Significantly expands existing
geographic footprint and provides
further scale in existing markets.
– Additional 7 sites added to the
MaxiPARTS portfolio (post store
rationalisation).
• Ability to consolidate three
Truckzone metro stores into existing
MaxiPARTS branches to increase
scalability.
• Rapid expansion to the core product
range underpinning future growth.
• Provides access to new range of quality
high margin products including an
established Japanese parts program.
• Combining the core product range
strengths of MaxiPARTS and Truckzone
offers an expanded product range
throughout the enlarged business.
• Immediately increases the MaxiPARTS
customer base and reduces key
customer reliance risk.
Aligns with Company
Core and M&A Strategy
Accreative Opportunity
with Identified Financial
Synergies
• Commercial truck and trailer parts
provider with a national store network.
• Ideal in terms of size and allows
consolidation of one of the largest
non-listed groups in the market.
• Attractive acquisition multiple and
identified synergies to be realised
within 2 years.
• Compatible culture to facilitate
corporate fit and integration.
• Highly complementary acquisition
with mid-to-high single digit EPS
accretion expected in FY24 inclusive
of cost synergies.
• Cost synergies related to site
consolidation and supply chain savings
of $2.5m (fully realised in FY24 –
excluding implementation costs).
• In addition, revenue synergies are
expected to be realised through the
expanded core product range and
network expansion.
• Strategic fixed asset acquisition
with minimal goodwill included as
part of the transaction.
On the 1st February 2022,
MaxiPARTS announced
it had entered into an
Asset Sale Agreement
with Truckzone Group to
acquire the businesses
known as Truckzone,
Coburg Truck Parts and
Parts Peek.
The transaction was subsequently completed
on 21st February 2022 and significantly
expanded MaxiPARTS’ operations. This was
the first major strategic growth project since
the MaxiPARTS business separated from the
Trailer solutions business in August 2021.
Since the acquisition, all former Truckzone
operations have been successfully integrated
into MaxiPARTS and the combined businesses
are now trading under the MaxiPARTS brand.
The strategic rationale for acquiring the
Truckzone business was compelling and
represented an exceptionally strong match
to our stated M&A criteria.
08
MaxiPARTS Limited
Aligns with Core M&A Strategy
MaxiPARTS M&A Criteria
Truckzone Acquisition
Operating in commercial vehicle parts market
Commercial trailer and trucking parts supplier
Enhances product range and geographies
Clear post-acquisition integration and growth strategy
Adds significant geographical scale and enhances core
product range
Detailed integration planning is in process and strong growth
synergies identified
Cultural and Corporate fit
Compatible culture to facilitate corporate fit and integration
Experienced Leadership Team
Attractive valuation and earnings accretive
Strong leadership team with a track record of building
commercial truck and trailer parts and accessories businesses
Strong synergies identified, minimal goodwill and ability to
recover inventory over time creating an accretive opportunity
The Truckzone Acquisition sits in the ‘sweet spot’ of MaxiPARTS’ M&A criteria
Geographic Expansion
Increases network by
7 sites post consolidation
Current site
New site
Site to be consolidated
09
ANNUAL REPORT 2022 Truckzone Group Acquisition continued
10
MaxiPARTS Limited
Whether you are looking
at the connection of network,
product range or staff, the
outcome results in the same
answer – MaxiPARTS is now
a stronger business with
a great opportunity to add
value to our customers and
shareholders as a result
of the Truckzone acquisition.
Expansion of Core
Product Range
Although a significant amount of the core
products groups crossed over, combining the
businesses has improved supplier scale and
purchasing benefits in addition to providing
a stronger overall core offering with
MaxiPARTS traditional strength in Trailer
products combining with the Truckzone
strengths in the Truck segment.
People
Whilst network and product expansion are
beneficial, it is the staff that has made both
MaxiPARTS and Truckzone successful over
the years. The joining of these teams has
already started to show real benefits for the
Group, with enhancements in technical skills
and internal product knowledge.
MaxiPARTS stores to benefit from
integration of Truckzone product range
Truckzone products to be integrated into MaxiPARTS stores
Enhanced benefits to both
MaxiPARTS and Truckzone
product range
MaxiPARTS products to be integrated into Truckzone stores
Truckzone stores to benefit from integration
of MaxiPARTS product range
11
ANNUAL REPORT 2022 Online Acceleration
Turning back the clock
to the start of 2020,
MaxiPARTS had a limited
online presence, which
was common practice
across the industry.
The adoption of providing
customers with an
e-Commerce offering
was slow.
As COVID-19 came and endured, it was clear
that the pandemic had accelerated the adoption
of e-Commerce, and whilst the MaxiPARTS retail
stores were still operational as an essential
business, there was a noticeable shift in our
customers’ buying behaviour. It became evident
businesses that had already invested in such
solutions were well-placed to cope with
increased demand and become a reliable
online retailer for a growing customer base.
Many customers turned to online purchasing
initially out of necessity during COVID-19
protocols, however the strong year-on-year
growth we experienced suggests the shift is
here to stay. Our e-Commerce sales channel
is currently smaller than our traditional retail
network, we expect to see a continued growth
and sales increase in the next 12 months that
will see monthly revenue equal to that of our
smaller retail stores.
Thankfully, considerable progress was already
underway to enhance our current e-Commerce
offerings. In October 2020, we commenced a
project to update our B2C and B2B e-Commerce
platform to maximise our existing offering.
The investment into the new system improved
the customer experience and ease in which
they could transact and fully integrated with
our ERP system – Momentum Pro, allowing for
live product data feeds, pricing, and availability
across tens of thousands of products.
In September 2021, the new e-Commerce
platform launched, providing customers with a
strong omnichannel offering through improved
website useability and intuitive flow, along
with an expanded product range and effective
product cataloguing processes in place.
To date, the MaxiPARTS website has over
15,000 products catalogued and available
for purchasing online, with the mandate to
keep expanding this range.
Building a solid e-Commerce strategy to capture
this fast-growing market will undoubtedly
be a challenge but also provides a massive
opportunity to increase scale and profitability
potential. We must continue investing in
our online presence as more customers are
choosing to purchase their parts online.
Our strategy surrounding this is simple –
become a one-stop online shop for truck
and trailer parts; the investments we have
made to date ensure we are in a strong
position to capitalise on emerging trends
and drive growth within this space.
12
MaxiPARTS Limited
In September 2021, the new
e-Commerce platform launched
Over 15,000 products catalogued
on the MaxiPARTS website
Find My Part function with search
by interactive product drawings
B2C and B2B offering
13
ANNUAL REPORT 2022 Board and Leadership Team
Executive Leadership Team
As a result of strong succession and talent management processes of the Group, all new
Executive Leadership roles were internally filled after the sale of the Trailer solutions business by
a combination of managers from both MaxiPARTS operational and corporate support departments.
The acquisition of Truckzone Group also enabled us to look internally for key roles as we made
adjustments to suit the expanded business.
Board and Management Transition
With the sale of the Trailer solutions business in August 2021, the core operations of the Group
changed into what is now a dedicated and focused commercial parts distribution business.
These changes led to the formation of a new Executive Leadership Team as well as the Board
ensuring it has used the previously planned Director transitions to ensure the skills and experience
of the Board match the new core operations.
14
MaxiPARTS Limited
Executive Leadership Team
Peter Loimaranta
Chief Executive Officer and
Managing Director
Appointed to role in September 2021.
17+ years at MXI, including 12 + years
running MaxiPARTS.
Neil Auld
GM – Product and Procurement
Joined MaxiPARTS from Truckzone as
part of the acquisition in February 2022.
20+ years’ experience within the Heavy
Transport Parts industry in Operational
Management, Product Development and
Sales Management Roles.
Experience working for both larger
aftermarket suppliers and various Truck OE’s.
Narelle Banfield
GM – People, Safety and Culture
Appointed to the role in May 2022 after 2 years
at MXI within various HR leadership roles.
Previously, 20+ years of Senior HR & Cultural
Change roles across a variety of industries
Australia wide including retail, mining and
construction, hospitality, manufacturing,
logistics and FMCG.
Liz Blockley
Chief Financial Officer and
Company Secretary
Appointed to the role in September 2021 after
2.5 years at MXI as Group Financial Controller.
Previously, 20 years of experience in variety
of finance and commercial roles, including
most recently CFO of Mastermyne (ASX:MYE).
Heath Mooney
GM – Sales and Distribution
Appointed to role in September 2021
after 5+ years at MXI, including 3 years
as National Operations Manager.
Previously, 20 years’ experience in various
branch, regional management, and
commercial roles in parts businesses.
ANNUAL REPORT 2022
15
Board and Leadership Team continued
Board of Directors
Over the last 18 months, the Board has been working through a planned Director transition process.
This has provided a balance between maintaining stability and continuity at a Board level as well as
bringing in new Directors with fresh, innovative ideas and different experiences that are closely aligned
to the core operations of the distribution business we have today. These changes have seen Gino
Butera and Debra Stirling join as Directors over the last year.
In April 2022, the Group announced the appointment of Mary Verschuer as Deputy Chair as part of
this Board renewal process. Rob Wylie previously stated he would not stand for re-election when his
current term ends at the 2023 AGM.
16
MaxiPARTS Limited
Board of Directors
Robert Wylie
Chairman,
Independent
Non-Executive
Director
Currently a Director of The Walter and 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 8 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.
Mary Verschuer
Deputy Chair,
Independent
Non-Executive
Director
Ms. Verschuer is an experienced Non-Executive Director and is currently President of The Infants’
Home, a provider of integrated early childhood education, family day care, early intervention,
and health services. 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 Huhtamaki. In those roles, Ms. Verschuer had responsibility
for manufacturing, supply chain and sales operations in diverse geographies and cultures.
Gino Butera
Independent
Non-Executive
Director
Mr. Butera is an experienced Executive with a distinguished career at Cummins Inc., one of the
world’s largest manufacturers and providers of Diesel Engines and associated spare parts over
multiple industrial end markets. Mr. Butera final role was based in the USA leading the Global
Power Generation business for Cummins. During his career he has also worked in Australia, Africa,
the Middle East, and the USA including periods leading regions with some of Cummins largest
spare parts distribution businesses.
Debra Stirling
Independent
Non-Executive
Director
Ms. Stirling’s executive career saw her hold various senior executive roles related to Corporate Affairs,
Investor Relations, People, Communications and Environment at Newcrest Mining, Rinker, CSR, and
Coles Myer. Ms. Stirling is currently a Director of Scotch College and is a Director & Chair of the
People, Culture and Remuneration Committee of Mission Australia. Ms. Stirling previously sat on the
Boards of Vicinity Centres Limited, Monash University Mining and Resources Advisory Board (Chair),
MegaRail, the PNG Government, Lae Technical Training Centre of Excellence Task Force, and the
Victorian Government Resources Roundtable.
Peter Loimaranta
Chief Executive
Officer and
Managing
Director
Mr. Loimaranta was appointed Managing Director and CEO of MaxiPARTS in 2021 following
the disposal of the MaxiTRANS Trailer Solutions business. Before his current appointment,
Mr. Loimaranta held the roles of Group General Manager – International before returning to
the MaxiPARTS business as General Manager – MaxiPARTS and International. Prior to joining
MaxiTRANS he held various finance and corporate development in roles with global construction
material companies Hanson and Holcim in Australia and various parts of Asia.
17
ANNUAL REPORT 2022 Contents
19 Report of the Directors (re‑issued)
34 Lead Auditor’s Independence Declaration
35 Directors’ Declaration
36 Financial Report Re‑issued Consolidated Statement of Profit or
Loss and Consolidated Statement of Comprehensive Income
37 Consolidated Statement of Financial Position
38 Consolidated Statement of Changes in Equity
40 Consolidated Statement of Cash Flows
41 Notes to the Consolidated Financial Statements
76
Independent Auditor’s Report
81 Australian Stock Exchange Additional Information
18
MaxiPARTS Limited
Report of the Directors (re‑issued)
For the year ended 30 June 2022
Your Directors submit their report together with the consolidated financial report of MaxiPARTS Limited (formerly 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 2022 and the auditor’s report thereon.
Report of the Directors and Financial Report (re‑issued)
The Report of the Directors and financial report have been re‑issued due to a correction to the Remuneration Report, section 10. Amounts of remuneration
and a correction to the Financial Report, Note 16(c), that displayed information from an incorrect draft version.
With the exception of the changes to section 10 of the Remuneration Report, changes to Note 16(c) to the Financial Report changes to the Report of the
Directors to reflect the appointment of Ms Debra Stirling as a Director on 29 August 2022 and updates to the date of the Directors’ Report, Directors’
declaration, Auditor’s Independence Declaration and the date the financial report was approved by the Board of Directors, there have been no other changes
to the reports.
Directors
The names of Directors in office at any time during or since the end of the financial year are:
Mr Robert H. Wylie
(Director since September 2008 – Chair since 30 June 2016)
Mr James R. Curtis
(Director since 1987 – Deputy Chair since October 1994, resigned 3 November 2021)
Ms Mary Verschuer
(Director since 24 January 2019, Deputy Chair since 27 April 2022)
Mr Dean Jenkins
(Managing Director since 1 March 2017, position made redundant 3 September 2021, separated on 30 November 2021)
Mr Peter Loimaranta
(Managing Director since 6 September 2021)
Mr Greg Sedgwick
(Director since 19 March 2021, resigned 27 April 2022)
Mr Gino Butera
(Director since 17 September 2021)
Ms Debra Stirling
(Director since 29 August 2022)
Principal Activities
The principal activities of the Group during the year consisted of distribution and sale of commercial Truck and Trailer Parts. The principal activities relating
to the Trailer Solutions business, including design, manufacture, sale, service and repair of Trailers and related components and spare parts were divested
during the financial year, effective 31 August 2021.
Dividends
A fully franked special dividend of 62.5 cents per share was paid on 24 December 2021 totalling $23,134,766 following the completion of the sale of the
Trailer Solutions business.
A fully franked final dividend of 2.5 cents per share has been proposed by the Directors after reporting date for payment on 19 September 2022. The financial
effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2022 and will be recognised in subsequent
financial reports.
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 2022.
19
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
Operating & Financial Review
Review of Operations
MaxiPARTS
MaxiPARTS sells commercial vehicle parts at both a wholesale and trade level in Australia.
The wholesale business operates in Victoria, Queensland, New South Wales and Western Australia. Wholesale customers are typically part resellers and
trailer manufacturers. On the sale of Trailer Solutions business to ATSG, the account has transitioned to a wholesale customer and a Supply Agreement was
established for a minimum term of 3 years to continue supply to the ATSG manufacturing and service facilities.
The trade business sells parts to road transport operators as well as commercial vehicle service and repair providers in Australia under the MaxiPARTS brand.
At the end of FY22, MaxiPARTS operated from 28 sites, an increase of 8 stores from the end of FY21, through the net addition of 10 sites added from the
Truckzone acquisition and offset with two site consolidation in Melbourne locations.
On 21 February 2022, the Group acquired the inventory and assets of the Truckzone Group. The acquisition added 10 stores to the Group’s network, of which
7 stores are planned to continue long‑term. One store has already been consolidated within the existing MaxiPARTS network, and a further two stores are
planned for consolidation early in FY23. The Group has started the process of rebranding all acquired stores as MaxiPARTS.
Along with the expansion in the MaxiPARTS network, the acquisition will enable MaxiPARTS to accelerate growth over the coming years by leveraging the
core product strengths of each business to drive through core product expansion. The Group is also targeting additional EBITDA % improvement through the
integration of the businesses, site consolidations and optimising the combined supply chain.
The MaxiPARTS business experienced a 14.8% growth in total revenue, including revenue from the Truckzone acquired sites. The Group reported a 6%
growth in revenue in H1 FY22, and a full year underlying sales growth of 8.3% for the year, when excluding the sales from the Truckzone acquisition and the
net change to the revenue attributable to the previously owned Trailer business. This growth is consistent with what has been achieved in prior periods from
the MaxiPARTS business and is a strong annual result for the Group, particularly given the third quarter which experienced higher than normal short‑term
periods of disruption for MaxiPARTS and our customer base in terms of staffing shortages due to COVID‑19 as well as a number of significant weather events
driving localised flooding. Through strong COVID‑19 protocols and quickly moving staff around the network, the business has not lost a trading day due to the
pandemic and although we had a small number of sites isolated and unable to operate through parts of the floods in QLD and NSW, we did not see any
damage or long‑term impacts with activity levels in Q4 being the highest of the financial year.
The global supply chain disruption continued through the period and is expected to continue for some time yet. Through a combination of strong internal
processes and long and established supply relationships we managed to minimise these impacts and maintain service levels.
Despite both the short and longer‑term challenges described above, the transport industry and the market we operate in remained extremely resilient and
demonstrates the essential role it plays in our communities.
MaxiPARTS national footprint and significant breadth and depth of stock holdings continued to be a point of difference when compared to smaller
competitors and this benefit became more apparent throughout the recent COVID‑19 related global supply chain challenges.
Inventory levels in the traditional MaxiPARTS business increased in H1 as the business filled earlier supply gaps created by the global supply chain challenges
and adjusted inventory management settings to help manage the ongoing disruption. Inventory levels in the traditional MaxiPARTS sites were maintained
during H2 and the business has started to recover excess inventory identified through the Truckzone acquisition.
Sale of the Trailer Solutions business
Effective 31 August 2021 the Group completed the transaction for the sale of the Trailer Solutions business and Ballarat property to Australian Trailer
Solutions Group Pty Ltd (ATSG) for cash proceeds of $14.7m and a deferred purchase price of $4.0m (the deferred receivable has a maximum term of
two years from the completion date of 31 August 2021, with interest chargeable at 3% pa for the first 6 months, 5% pa for the next 6 months and 8% pa
thereafter). The Group subsequently completed the sale of both the Derrimut and Hallam properties, both utilised for the Trailer Solutions business,
to a third party for cash consideration of $18.05m.
The assets of the Trailer Solutions business were classified as held for sale at the last reporting date, at 30 June 2021. On 1 July 2021 the Group acquired
20% of the shares and voting interests in Trout River and as a result, the Group’s equity interest in Trout River increased from 80% to 100%, granting it
control of Trout River. Trout River was included in the sale of Trailer Solutions business to ATSG.
The Trailer Solutions business reported a loss from discontinued operations net of tax of ($9.8m) for the year ended 30 June 2022. The loss for the period
included (post‑tax): ($2.5m) loss on sale of discontinued operations; ($6.1m) exit/separation costs and pre‑sale year to date trading; and ($1.2m) write‑off
for the unrecoverable deferred tax asset in the foreign NZ entity. The consolidated statement of financial position at 30 June 2022 includes a receivable of
$2.5m in relation to the completion accounts process between MaxiPARTS and ATSG. The receivable is in dispute with ATSG and it is currently going through
the dispute resolution process available under the Asset Sale Agreement. An independent accountant has been appointed to determine the validity of the
disputed amount, and the Group expects this process to be concluded during the early stages of FY23.
20
MaxiPARTS Limited
Report of the Directors (re‑issued) continued
The sale of the assets of the Trailer Solutions business has transformed the Group into a dedicated commercial parts distribution business, and as part of this
transformation the Group has changed its name to MaxiPARTS Limited and, at this time, completed a share consolidation of MXI shares of 1 share for every
5 previously held.
Financial Review
Sales – MaxiPARTS segment
MaxiPARTS total revenue of $157.4m represents a 14.8% increase over the pcp revenue of $137.1m (both periods include previously recorded internal sales
to the Trailer business). Excluding revenue generated from the Truckzone acquisition and net sales change in the sales attributable to the previously owned
Trailer business, the Group reported a sales growth of 8.3% for the year.
Profit – MaxiPARTS segment/continued operations
MaxiPARTS segment profit (excluding significant items) of $11.4m represents a 7.5% increase over the pcp segment profit of $10.6m.
Profit before tax from continuing operations of $7.3m includes significant items (pre‑tax) for the period of $1.4m, resulting in a profit before significant items
and tax of $8.7m.
The MaxiPARTS segment profit (excluding significant items) of $11.4m to continuing operations profit before income tax of $7.3m can be bridged as follows:
($2.7m) of unallocated corporate costs and ($1.4m) of significant items.
Cash Generation & Capital Management
The Group entered into a new bank facility agreement on the 1 September 2021, upon sale of the Trailer Solutions business, establishing a $10.0m loan
facility. This facility is sufficient to support the business in its current form. The facility is currently fully drawn at $10.0m and with a cash balance of $11.9m,
the Group ended the year with a positive net cash position of $1.9m.
The Group utilised the proceeds from the sale of the Trailer Solutions business and buildings, in part, to reduce the previous banking facility limits, a net
reduction in loans of ($7.25m) and paid a Special Dividend to the Group’s shareholders of 62.5 cents per share resulting in a cash outflow of ($22.0m)
excluding take‑up on the DRP.
During the period, the Group acquired the inventory and assets of Truckzone Group for a total cash consideration of $18.3m, including $15.8m of inventories
(including prepaid inventory) and $1.1m of other assets and liabilities. The transaction has resulted in the recognition of $1.4m of Goodwill. The purchase
price has been settled in full and was settled in two tranches, with $10.0m payment on acquisition date (paid 21 February 2022) and the final payment
payable following agreement of the Inventory amount (i.e. post stocktakes) and completion accounts (paid 3 May 2022). There is no deferred consideration
associated with this transaction.
To fund the Truckzone acquisition of $18.3m, MaxiPARTS undertook a $25.0m equity raise through a combined placement and an accelerated
non‑renounceable entitlement offer. Cash proceeds net of capital raising fees was $23.7m. The proceeds of the equity raise were used to fully fund the
acquisition of Truckzone Group and associated transaction and integration costs, while also providing the Group with working capital flexibility and funding
for further organic growth initiatives.
Operating cash outflow for the period of ($11.7m) included ($11.6m) outflow from the discontinued operations that included ($3.6m) of exit, separation,
cyber fraud and litigation costs, ($2.5m) outstanding payment from ATSG in relation to the completion accounts process (that is expected to be recovered
in FY23 following review from the appointed independent accountant as part of the agreed dispute process), and ($5.5m) due to the operating performance
of the Trailer Solutions business that impacted both cash generation and working capital movements associated with the sale of the business.
Excluding the operating cashflow from the discontinued operations, the operating cashflow for the continued operations was ($0.1m). Consistent with
the growth in inventory seen at half‑year, the operating cashflow includes a net increase in inventory for the period of $2.2m to ensure service levels are
maintained and to support continued growth of the MaxiPARTS operations during this time of global supply chain uncertainty, and offsetting this total
increase was the partial realization of a targeted reduction in the stock acquired from the Truckzone acquisition. The supply to the Trailer Solutions business
also transitioned to an external Trade Account for a one‑off lag impact to operating cash flow.
Risk
MaxiPARTS 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 MaxiPARTS Audit & Risk Management Committee, a sub‑committee of the Board, governs the framework and process for the identification and
mitigation of material business risks.
21
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
Operational risks
During FY22, the Group continued to deliver its risk management maturity roadmap to address the latest requirements of global risk management standard
ISO31000:2009. A detailed review was completed upon the divestment of the Trailer Solutions business reviewing materiality levels and the appropriateness
of the risks based on the stand‑alone MaxiPARTS business.
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:
• COVID‑19 effect on the Group’s operations, customers, suppliers, and the global economy
• Health and Safety of our people
• MaxiPARTS key customer retention and competitiveness
• Reliability and supportability of IT Systems
• Proficiency and stability of key business process and systems; 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 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.
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.
Health & Safety
MaxiPARTS has continued its focus of improving health and safety outcomes for our people. Over the year, the business worked through projects to ensure
our safety program was suitable for the distribution business that we are today, as well as ensuring we integrate the Truckzone business and ensure we
quickly lifted the safety standards of those new sites to be in line with the larger group.
Although the traditional parts business incurred four recordable injuries in the financial year which is consistent with the average over the past 3 years, the
last 7 months of the year saw zero injuries recorded. There were two recordable injuries in the newly acquired Truckzone sites over the 4 and a bit month of
operation which represents a significant reduction over its prior performance and once again, we saw strong improvement at the end of the year with May
and June being injury free.
Until we are injury free we will never be happy with our safety performance but we do believe we have made strong improvements over the year and are
well placed as we move forward.
Strategy
With the changes seen in our business, along with an overall business landscape that is changing at a rate rarely (if ever) seen, the board and management
have reviewed our previous plans and updated our strategic plan to take the business forward. This plan focuses on four key pillars of activity being:
• Network
• People
• Product
• Systems and Solutions
The focused initiatives within these pillars are designed to not only drive growth in the business, but to ensure the foundations remain in place to support
this growth over a sustained period.
The business will continue to implement a range of organic projects in line with the above however, we will also continue to explore further acquisition
opportunities if we believe they meet the underlying strategic rationale and make financial sense.
22
MaxiPARTS Limited
Report of the Directors (re‑issued) continued
Outlook
MaxiPARTS, along with the transport industry generally and the parts distribution businesses that operate within it, have proven to be very resilient
over the various economic cycles.
In the upcoming year we are expecting to see ongoing inflationary challenges facing the economy (and our business) and expect many of our customers
to continue to be impacted by higher fuel prices.
As seen within the industry and MaxiPARTS over recent years, we expect to be able to continue to pass on our product‑based inflation through price
increases across our product range maintaining a consistent gross margin percentage and while we are expecting inflationary increases in our selling
and admin cost base, we remain focused on delivering ongoing revenue and profit improvements in the coming period.
The business will be focused on realising the cost and revenue synergies associated with the Truckzone acquisition. Many of the cost‑based initiatives have
been underway since late in H2 FY22, such as site consolidation and optimising purchasing across the combined business and will start contributing to the
Group’s profit performance this year. The targeted revenue synergies are well planned and expected to start delivering top line growth in FY23, though many
of the initiatives will take 2‑3 years to reach maturity.
The Group intends to look at potential further network expansion over the course of the year and will continue to assess organic versus acquired options as
part of this process.
The Group is expecting a higher than traditional capital expenditure year, due to multiple planned site relocations in Brisbane, Perth and Adelaide and some
one‑off Capital expenditure related to the final aspects of the Truckzone acquisition.
Information of Directors
Mr. Robert H. Wylie
Chair, Independent Non‑Executive, (appointed 30 June 2016), Age 72 Director (appointed 2 September 2008)
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.
Special Responsibilities:
Chairman of the Nomination Committee. Member of the Audit & Risk Management Committee and
Remuneration & Human Resources Committee.
Interest in Shares:
60,431 ordinary shares beneficially held
Options over Ordinary Shares:
Nil
Mr. Peter Loimaranta
Managing Director, Executive (appointed 6 September 2021), Age 45
Qualifications & Experience:
Mr Loimaranta was appointed Managing Director and CEO of MaxiPARTS in 2021 following the disposal of the
MaxiTRANS Trailer Solutions business. Before his current appointment, Mr Loimaranta held the roles of General
Manager MaxiPARTS and International and Group General Manager – International. Prior to joining MaxiTRANS
he held various finance and corporate development roles with global construction material companies Hanson
and Holcim in Australia and various parts of Asia.
Interest in Shares:
65,868 ordinary shares beneficially held
Options over Ordinary Shares:
Nil
23
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
Information of Directors (continued)
Ms. Mary Verschuer
Deputy Chair, Independent Non‑Executive Director (appointed Deputy Chair 27 April 2022, appointed as
Director 24 January 2019), Age 60
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 a NED and Chair of Audit and Risk at Forestry Corporation of NSW a state owned corporation,
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 (now Epsilon Healthcare
ASX:EPN) and Nuplex Industries Limited (ASX:NPX) (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:
Chair of the Audit and Risk Management Committee, Member of the Remuneration & Human Resources
Committee and Nomination Committee.
Interest in Shares:
20,046 ordinary shares beneficially held
Options over Ordinary Shares:
Nil
Mr. Gino Butera
Independent Non‑Executive Director (appointed 17 September 2021), Age 59
Qualifications & Experience:
Mr Butera is an experienced executive with a distinguished career at Cummins Inc., one of the world’s largest
manufacturers and providers of Diesel Engines and associated spare parts over multiple industrial end markets.
Mr. Butera final role was based in the USA leading the Global Power Generation business for Cummins. During
his career he has also worked in Australia, Africa, the Middle East and the USA including periods leading regions
with some of Cummins largest spare parts distribution businesses.
Special Responsibilities:
Chair of Remuneration & Human Resources Committee, member of the Audit & Risk Management Committee
and Nomination Committee.
Interest in Shares:
50,000 ordinary shares beneficially held
Options over Ordinary Shares:
Nil
Ms. Debra Stirling
Independent Non‑Executive Director (appointed 29 August 2022), Age 64
Qualifications & Experience:
Ms. Stirling’s executive career saw her hold various senior executive roles related to Corporate Affairs,
Investor Relations, People, Communications and Environment at Newcrest Mining, Rinker, CSR, and Coles Myer.
Ms. Stirling is currently a Director of Scotch College and is a Director & Chair of the People, Culture and
Remuneration Committee of Mission Australia. Ms. Stirling previously sat on the Boards of Vicinity Centres
Limited, Monash University Mining and Resources Advisory Board (Chair), MegaRail, the PNG Government,
Lae Technical Training Centre of Excellence Task Force, and the Victorian Government Resources Roundtable.
Special Responsibilities:
Member of Remuneration & Human Resources Committee, Audit & Risk Management Committee and
Nomination Committee.
Interest in Shares:
Options over Ordinary Shares:
Nil
Nil
24
MaxiPARTS Limited
Report of the Directors (re‑issued) continued
Company Secretary
Ms. Liz Blockley
Bachelor Commerce, CPA, GIA (Affiliated)
Appointed to the position of Company Secretary on 19 May 2022.
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
Mary Verschuer
Greg Sedgwick
Gino Butera
Peter Loimaranta
Dean Jenkins
13
5
13
12
10
10
3
13
4
13
12
10
10
3
4
2
4
4
2
4
2
4
2
4
4
2
4
2
4
2
4
4
2
4
2
4
1
4
4
2
4
2
2
1
2
2
1
2
1
2
1
2
2
1
2
1
Remuneration Report – Audited (Re‑issued)
Dear Shareholders,
On behalf of the Board, I am pleased to present the FY22 Remuneration Report. This report sets out the remuneration information for our Non‑Executive
Directors and Key Management Personnel (“KMP”) and describes our approach to remuneration. Our remuneration approach has been set to align with our
broader business strategy to grow the business and deliver shareholder value. Through short and long‑term variable reward programmes, it aims to reward
Executives for delivering target financial outcomes and improved shareholder value.
As we moved into FY22 and divested the Trailer Solutions business and looked to execute the plan for the simpler MaxiPARTS business, the Remuneration
and Human Resources Committee updated the Group’s objectives, priorities and conditions of the remuneration of our KMPs to focus on the growth
objectives of the MaxiPARTS business.
The audited Remuneration Report was re‑issued due a correction to Section 10. Amounts of Remuneration that displayed information from an incorrect draft
version. There were no other changes to the Remuneration Report.
Gino Butera
Chair, Remuneration & Human Resources Committee
25
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
1. Approach to remuneration
MaxiPARTS’ remuneration approach is set in line with the business and talent strategy in order to ensure MaxiPARTS attracts and retains the right talent
to drive the business forward. The Executive package is based on three remuneration components, that make up the Total Remuneration Package (details of
each component are explained in the table below). Our approach is reviewed every year to ensure that it is still relevant and competitive. During FY22 the
approach was as follows:
Remuneration Component
Description
Objectives
Priorities & Conditions
Fixed
Includes fixed pay and
superannuation.
Intended to be market competitive
to attract and retain talented
Executives.
Short Term Incentive (STI)
A variable, at‑risk cash incentive
calculated by reference to current
year performance (for continuing
operations).
Designed to drive performance
across Company priorities year
on year.
Long Term Incentive (LTI)
An annual grant of Performance
Rights which, if they vest on the
achievement of specific long‑term
performance hurdles, give the right
to be issued a number of ordinary
shares in the Company.
Designed to incentivise executives
to manage the business in a way
that drives sustainable long‑term
growth in shareholder value.
2. Alignment of FY22 variable remuneration outcomes to performance
Rem Component & Conditions
Link to Company Performance
Based on skills and experience.
Recognises level of the Executive’s
contribution based on the size of
the organisation.
Three key priorities were set
around profit, cashflow and safety.
This program is subject to the Group
meeting its budgeted net profit
after tax (“NPAT”) before any
incentive is payable.
An Economic Value Added (EVA)
target for the 3 year period from
date of grant.
See section 3 below for further detail.
STI – Drives annual Company performance against
three priorities – Profit, Cashflow and Safety
LTI – A return on invested capital “ROIC” and Economic
Value added “EVA” targets are set to drive Executives to manage
the business in a way that creates long term shareholder value
The net profit after tax hurdle was set on the MaxiPARTS continued
operations and was achieved, leading to all performance targets being
assessed on their actual result to target. Discretion was considered but
there were no matters warranting a change to the formulaic calculation.
The performance rights issued in 2019 are due to vest this year. The target
ROIC was reset to 11.53% following the sale of the Trailer Solutions
business, and the Managing Director is the only participant remaining on
this scheme. The actual ROIC was 12.59%. Therefore, the Performance
Rights granted in 2019 will vest at 100% of grant.
3. Long Term Incentive Program (LTI Program)
(a) Who participates?
At the discretion of the Board, Senior Managers and Executive Directors of the Company are invited to participate in the LTI Program.
(b) What type of awards are granted?
Performance rights are granted to participants. Each performance right will, on its exercise, entitle the holder to receive one fully paid ordinary share in
the Company, which will rank equally with all other existing fully paid ordinary shares. The exercise of a performance right is subject to certain performance
hurdles being met.
(c) How is the size of the award calculated?
An award of performance rights is calculated by reference to a participant’s remuneration package. In FY22 the Managing Director received performance
rights equal to 33.3% of their total fixed remuneration package. For other participating executives, the value of their performance rights was 17.5% of their
total fixed remuneration package.
26
MaxiPARTS Limited
Report of the Directors (re‑issued) continued
(d) How is the number of rights to be awarded calculated?
The number of performance rights a participant receives is calculated on a “face value” basis by dividing the participant’s performance right entitlement by
the Company’s share price. The share price is determined using the volume weighted average price (VWAP) over the first month of the financial year in which
the rights are granted (i.e., for rights granted with a FY23 base, the July 2022 VWAP is used). This is on the basis that the start of the financial year is the
starting point for measuring the achievement of the LTI Program target.
(e) What is the performance period?
Performance rights are tested over a three year period. Awards made in FY22 will be tested over the period 1 July 2021 to 30 June 2024.
(f) What is the performance hurdle?
Following the sale of the Trailer business, the Board has reassessed the appropriate performance hurdles to attach to future grants of performance rights.
In the past, the performance hurdle for all performance rights on issue was return on invested capital (ROIC). However, the Board is of the view that a more
appropriate performance hurdle for the MaxiPARTS business is Economic Value Added (EVA). This is because the current ROIC of MaxiPARTS would be
above the assessed weighted average cost of capital of the Group and the Board considered that a focus on continued generation of improvements in
economic value is better aligned to shareholder value than an increase in ROIC.
For FY22, the Performance Rights target set is to achieve a cumulative EVA result of $6,220,000 over the period from 1 July 2021 to 30 June 2024.
The target and result are measured on continuing operations, and the target was set to reflect a 6% compound annual improvement.
A sliding scale will apply for partial attainment of the performance hurdle. The minimum target is 67% of the targeted improvement in EVA that must be
achieved before any of the Performance Rights will vest, at which point 50% of the Performance Rights will vest. 100% of the Performance Rights will vest
where the target EVA is fully achieved or exceeded.
The Vesting Date for the Performance Rights will be no later than one month after the announcement of the result for the year ended 30 June 2024, or such
other date as the Company determines.
Up to and including FY21, the performance rights will vest and be exercisable only if the performance hurdle attached to the performance rights is satisfied.
The performance hurdle for all performance rights on issue is return on invested capital (“ROIC”). ROIC is calculated by taking a company’s net operating
profit less adjusted taxes (“NOPLAT”) and dividing it by the invested capital. Following the sale of the Trailer Business, the Board exercised its discretion to
increase the performance hurdle to one more relevant to the MaxiPARTS business, the previous ROIC target for both the FY20 and FY21 issue was 6.95%.
The new ROIC target for the FY20 issue is 11.53% and for the FY21 issue is 12.50% and is based on continuing operations.
The performance hurdle for the FY19 and FY20 performance rights on issue is to achieve the target ROIC over a period of 3 years. A sliding scale will apply
for partial attainment of the performance hurdle. The minimum target is 67% of the targeted improvement in ROIC, which must be achieved before any of the
performance rights vest, at which point 50% of the performance rights will vest. 100% of the performance rights will vest if the target ROIC is fully achieved
or exceeded.
Any unvested performance rights will lapse.
(g) Other key features
The Board has discretion to determine award outcomes for participants in certain circumstances, such as when an Executive retires.
4. FY22 LTI Outcomes
Performance rights granted in 2019 were tested against the ROIC performance hurdle over the period 1 July 2019 to 30 June 2022 with a ROIC target
in FY22 of 11.53%. The actual ROIC for FY22 was 12.59%. Therefore, the Performance Rights granted in 2019 will vest at 100% of grant.
5. Managing Director Remuneration Mix
The Managing Director’s, Mr P Loimaranta, total annualised available remuneration of $774,915 (“TAR”) consists of:
• Fixed component of $465,135 (Total employment cost ‘TEC’ inclusive of superannuation and allowances) with
• STI component, comprising 33.3% of TEC; and
• LTI component, comprising 33.3% of TEC.
27
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
6. FY22 Managing Director STI Outcomes
The Managing Director’s, Mr P Loimaranta, STI for FY22 are summarised below:
Objective
Measure
STI Weighting
Performance
Overall hurdle
Deliver budgeted NPAT for the Group (MaxiPARTS continuing operations)
NPBT
Cash
Safety
NPBT exceeding set budget (continuing operations)
Cash generated from Operating activities (continued operations) exceeds the budget
Implementation of an approved MaxiPARTS safety improvement plan
Hurdle
50%
35%
15%
Met
50%
35%
0%
Mr P Loimaranta, Managing Director, has been awarded an STI of 85% of target and will be paid $131,633 in relation to FY22. There was no STI remuneration
assessed to Mr D Jenkins during the year.
FY22 STI outcome – other KMP:
STI’s were awarded to all KMPs in relation to their performance during the FY22 period. The total of STIs awarded to KMP’s (other than the Managing Director)
for the FY22 performance is $67,959. There was no STI remuneration assessed to KMP who were no longer employed with the Group as at 30 June 2022.
7. Relationship between remuneration and company performance
The following table sets out Company performance and the average STI payments (as a % of the maximum payment) made to KMP over the last 5 years.
Reported NPAT ($’000)
NPAT (continuing operations and excluding significant items ($’000)
STI awarded to MD
FY22
($4,932)
$8,718
85.0%
FY21
$4,584
$10,487
137.5%
FY20
($35,492)
$486
Nil
FY19
($27,040)
$4,809
Nil
FY18
$10,077
$10,077
Nil
8. 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 reviewed with reference to fees paid to Non‑Executive Directors of comparable companies.
Directors’ base fees (inclusive of superannuation) for the year were $75,000 per annum for Non‑Executive Directors (other than the Chair and unchanged from
previous year) and $120,000 for the Chair (reduced from $140,000 in October 2021). Total fees paid for the year of $225,544 for Non‑Executive Directors
(other than the Chair) and $125,160 for the Chair.
Non‑Executive Directors do not receive performance related remuneration and are not entitled to participate in the STI or LTI programs. Directors’ fees cover
all main Board activities and membership or chairing of all Committees. Non‑Executive Directors are not entitled to any retirement benefits.
9. Details of remuneration and service contracts
It is the Group’s policy that Employment agreements 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 six months’ pay in lieu of notice.
The Group has entered into employment agreements 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 Director and senior Executives but does not prescribe how
remuneration levels are modified year to year. Remuneration levels are reviewed each year and 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 Group’s Executive Remuneration Policy including
performance related objectives if applicable.
Mr Peter Loimaranta, Managing Director, has a contract of employment with the Company dated 6 September 2021. 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 agreement can be terminated either by the Company or Mr Loimaranta 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
represents general market practice. The Managing Director has no entitlement to a termination payment, other than those minimal entitlements required by law
(including any leave entitlements and superannuation) in the event of removal for misconduct or breach of any material terms of his contract of employment.
Ms Liz Blockley, Chief Financial Officer, has a contract of employment with the Company dated 6 September 2021. The contract can be terminated either
by the Company providing six months’ notice or by Ms Blockley providing three months’ notice. The Company may make a payment in lieu of notice of six
months, equal to base salary and superannuation. The Chief Financial Officer has no entitlement to a termination payment, other than those minimal
entitlements required by law (including any leave entitlements and superannuation) in the event of removal for misconduct or breach of any material
terms of her contract of employment
28
MaxiPARTS Limited
Report of the Directors (re‑issued) continued
10. Amounts of remuneration
Details of the nature and amount of each major element of remuneration for each Director of the Company and other Key Management Personnel of the Group
(this table has been re‑issued due a correction in FY22 information, that previously displayed information from an incorrect draft version):
PRIMARY
POST
EQUITY OTHER(XIII)
TOTAL
Salary
& fees
Non‑cash
benefits
STI(I)
Super
PRS(II)
PROPORTION
OF REM
PERFORMANCE
RELATED
VALUE
OF PRS AS
PROPORTION
OF REM
DIRECTORS
Year
$
$
%
%
2022
2021
2022
2021
2021
2021
2022
2021
2022
2021
2022
(iii)
(iv)
(v)
(vi)
(vii)
113,782
125,723
23,621
67,352
33,105
48,472
68,493
67,352
57,078
19,494
55,848
$
–
–
–
–
–
–
–
–
–
–
–
(viii)
(xiv)
2022
restated
408,056
131,633
2021
321,638
129,060
(ix)
(xiv)
2022
restated
300,840
–
Non‑Executive
Mr R Wylie
Chairman
Mr J Curtis
Mr J Rizzo
Ms S Hogg
Ms M Verschuer
Mr G Sedgwick
Mr G Butera
Executive
Mr P Loimaranta
Managing Director
(former Group GM
– MaxiPARTS and
New Zealand)
Mr D Jenkins
Former Managing
Director
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$
11,378
11,944
2,362
6,398
3,145
4,605
6,849
6,398
5,708
1,852
5,585
$
–
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
–
125,160
137,667
25,983
73,750
36,250
53,077
75,342
73,750
62,785
21,346
61,433
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
41,253
56,866
4,477
642,284
29.3%
32,960
62,461
155,934
702,052
27.3%
69,851
–
766,159 1,136,851
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
8.9%
8.9%
2021
681,696
280,500
174
68,561
(96,170)
40,000
974,760
0.0%
18.9%
0.0%
–9.9%
29
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
PRIMARY
POST
EQUITY OTHER(XIII)
TOTAL
PROPORTION
OF REM
PERFORMANCE
RELATED
VALUE
OF PRS AS
PROPORTION
OF REM
EXECUTIVES
Ms L Blockley
Chief Financial Officer
Mr T Bradfield
Former Chief
Financial Officer
Mr T Negus
Former Group
GM – Manufacturing
Salary
& fees
$
STI(I)
$
257,420
67,959
65,210
–
Year
2022
restated
2022
restated
(x)
(xiv)
(xi)
(xiv)
2021
346,949
143,336
(xii)
(xiv)
2022
restated
69,421
–
2021
369,354
33,709
Non‑cash
benefits
$
–
–
–
–
–
Super
PRS(II)
$
$
31,348
12,308
$
–
$
%
369,036
21.8%
27,109
–
310,729
403,047
32,960
(8,550)
130,900
645,595
28,712
–
344,438
442,570
35,089
(39,238)
–
398,914
0.0%
20.9%
0.0%
–1.4%
%
3.3%
0.0%
–1.3%
0.0%
–9.8%
(i)
(ii)
FY22 STI entitlement is 33.3% of total fixed remuneration for the Managing Director, Mr P Loimaranta and 20% of total fixed remuneration for Ms L Blockley.
The short‑term cash incentives disclosed above are for the amounts to be paid within 12 months of year‑end relating to services received during the year.
The amounts were determined after performance reviews were completed.
Performance rights (PRs) grants are calculated by using a face value allocation methodology, i.e. by reference to the volume weighted average MaxiPARTS 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. An adjustment may result in a negative value to
reflect the change from the prior period of the number estimated to vest. Further details in respect of PRs are contained in section 3 of the Remuneration Report.
Details of PRs vested during the period are contained in Note 15 – Share Based Payments.
(iii) Mr J Curtis resigned on the 3 November 2021.
(iv) Mr J Rizzo resigned on the 23 November 2020.
(v) Ms S Hogg resigned on the 19 March 2021.
(vi) Mr G Sedgwick resigned on the 27 April 2022.
(vii) Mr G Butera was appointed on the 17 September 2021.
(viii) Mr P Loimaranta position was appointed on the 6 September 2021.
(ix) Mr D Jenkins position was made redundant effective 3 September 2021, with separation effective 30 November 2021.
(x) Ms L Blockley position was appointed on the 6 September 2021 (salary reported from date appointed as KMP).
(xi) Mr T Bradfield position was made redundant effective 3 September 2021.
(xii) Mr T Negus position was made redundant effective 3 September 2021.
(xiii) Other payments for the year ended 30 June 2022 for Mr D Jenkins, Mr T Bradfield and Mr T Negus are for redundancy payments and for the year end 30 June 2021
for Mr P Loimaranta and Mr T Bradfield included a retention payment that was put in place to ensure continuity of service during the Board’s strategic review.
Mr P Loimaranta had a car allowance prior to appointment as Managing Director on 6 September 2022. Mr D Jenkins had a car allowance.
(xiv) Amounts are restated for FY22 from the previously released version due to a correction in FY22 information, that previously displayed information from an incorrect
draft version.
30
MaxiPARTS Limited
Report of the Directors (re‑issued) continued
Share based payments granted as remuneration
Details of the vesting profile of the Performance Rights granted as remuneration to each of the Company Directors and other key management personnel
of the Group at the report date are set out below.
Mr P Loimaranta
Ms L Blockley
Date Granted
03 Nov 2021
23 Nov 2020
25 Oct 2019
03 Nov 2021
Number
Granted
Vesting Date
49,965
31 Oct 2024
190,723
22 Nov 2023
85,682
24 Oct 2022
19,182
31 Oct 2024
Number
vested during
the year
Fair value at
grant date
Nil
Nil
85,682
Nil
$3.63
$1.80
$1.09
$3.63
The performance rights held by Mr Loimaranta from FY20 and FY21 has had the performance hurdles updated to acknowledge the different expectations of
the MaxiPARTS business. See section 3 above in relation to the terms of Performance Rights.
The estimated maximum value of Performance Rights on issue for future years is the current share price. This is subject to future movements in the share
price. The estimated minimum value is $nil.
Unissued shares under rights
At the date of this report there are 85,682 unissued ordinary shares of the Company relating to vested Performance Rights.
Directors’ shareholdings
The movements in holdings of shares in the Company held directly, indirectly or beneficially at the reporting date are set out below:
2022 SHARES
MaxiPARTS Limited
Directors:
Mr R Wylie
Ms M Verschuer
Mr P Loimaranta
Mr G Butera
* Or at date of appointment as a Director.
End of Audited Remuneration Report
Held at
1 July 2021*
Purchases
Sales
Held at
30 June 2022
50,098
12,600
59,711
–
10,333
7,446
6,157
50,000
60,431
20,046
65,868
50,000
31
ANNUAL REPORT 2022 Report of the Directors (re‑issued) continued
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
The Company has indemnified the Directors and Executives of the Company for costs incurred, in their capacity as a Director or Executive, for which they
may be held personally liable, except where there is a lack of good faith.
During the year the Company has paid premiums in respect of Directors’ and Executive Officers’ insurance. The contracts contain prohibitions on disclosure
of the amount of the premiums and the nature of the liabilities under the policies.
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 Lead 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 34.
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 – Group
– auditing and reviewing the financial statements – controlled entities
– other services (taxation and advisory)
Overseas KPMG firms:
– other services (taxation and advisory)
Total auditor remuneration
32
MaxiPARTS Limited
CONSOLIDATED
2022
$
370,969
–
80,596
451,565
9,261
9,261
460,826
2021
$
451,718
37,084
261,696
750,498
18,090
18,090
768,588
Report of the Directors (re‑issued) continued
Proceedings on Behalf of Company
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
Dated this 2nd day of September 2022
Mr. Peter Loimaranta, Director
33
ANNUAL REPORT 2022
Lead Auditor’s Independence Declaration
under Section 307C of the Corporations Act 2001
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of MaxiPARTS Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of MaxiPARTS Limited for the
financial year ended 30 June 2022 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
Vicky Carlson
Partner
Melbourne
2 September 2022
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation
34
MaxiPARTS Limited
Directors’ Declaration
For the year ended 30 June 2022
In the opinion of the Directors of MaxiPARTS Limited (“the Company”):
(a) the consolidated financial statements and notes as set out on pages 36 to 75, 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 2022 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 19 will be able to meet any obligations or liabilities to
which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those Group entities pursuant to ASIC Class
Order (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 2022.
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
Dated this 2nd day of September 2022
Mr. Peter Loimaranta, Director
35
ANNUAL REPORT 2022
Financial Report Re‑issued
Consolidated Statement of Profit or Loss and
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2022
Continuing Operations
Sale of goods
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Other income
Employee and contract labour expenses
Warranty reversals/(expenses)
Depreciation and amortisation expenses
Finance costs
Other expenses
Profit before income tax from continuing operations
Income tax expense
Profit from continuing operations
Loss from discontinued operations net of tax
(Loss)/profit for the year
(Loss)/Profit attributable to:
Equity holders of the Company
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
Related tax
Items that will never be re‑classified to profit or loss:
Revaluation of land and buildings
Related income tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive (loss)/income for the year
Note
2(a)
2(d)
2(b)
10
2(c)
2(c)
2(c)
3(b)
25
2022
$’000
152,767
2,013
(110,756)
116
(22,609)
422
(4,553)
(1,419)
(8,644)
7,337
(2,429)
4,908
(9,840)
(4,932)
2021
$’000
114,588
39
(76,633)
7,238
(19,735)
(39)
(4,017)
(2,198)
(10,918)
8,325
(2,636)
5,689
(1,105)
4,584
(4,932)
4,584
(4,932)
4,584
(64)
218
(65)
–
–
89
(4,843)
18
326
(98)
(396)
119
(31)
4,553
Total comprehensive income attributable to: Equity holders of the Company
(4,843)
4,553
** The comparative information for number of ordinary shares is restated due to share consolidation of 1 share for every 5 previously held. See note 12. Earnings per share
been restated accordingly.
Earnings/(Loss) per share:
Basic and Diluted earnings per share (cents per share) – Total
Basic and Diluted earnings per share (cents per share) – Continuing operations
Basic and Diluted earnings per share (cents per share) – Discontinued operations
Weighted average number of shares:
Number for basic earnings per share
Number for diluted earnings per share
2022
(11.83)
11.99
(24.04)
2021**
12.30
15.37
(2.98)
12
12
Number
40,928,976
40,928,976
Number**
37,015,621
37,015,621
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.
36
MaxiPARTS Limited
Consolidated Statement of Financial Position
For the year ended 30 June 2022
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Other
Assets held for sale
Total Current Assets
Non‑Current Assets
Property, plant and equipment
Intangible assets
Right of use asset
Financial asset
Deferred tax assets
Total Non‑Current Assets
Total Assets
Current Liabilities
Trade and other payables
Current tax liability
Provisions
Lease liability
Liabilities held for sale
Total Current Liabilities
Non‑Current Liabilities
Interest bearing loans and borrowings
Provisions
Lease liability
Total Non‑Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Other reserves
Accumulated Loss
Profits Reserve
Equity attributable to equity holders of the Company
Total Equity
Note
4
5
3(d)
6
7
21
25(d)
3(c)
8
3(d)
10
21
9
10
21
11
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated financial statements.
30 Jun 22
$’000
30 Jun 21
$’000
11,852
28,190
45,124
743
327
–
86,236
3,360
9,026
23,265
4,000
19,741
59,392
145,628
25,819
–
5,460
4,491
–
35,770
10,000
319
19,980
30,299
66,069
79,559
81,288
2,688
(74,956)
70,539
79,559
79,559
22,442
33,068
27,148
–
261
110,924
193,843
1,901
7,633
16,846
–
20,924
47,304
241,147
44,522
576
3,201
3,379
75,186
126,864
17,250
269
14,264
31,783
158,647
82,500
56,386
16,182
(52,006)
61,938
82,500
82,500
37
ANNUAL REPORT 2022 Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Note
Issued
capital
$’000
56,386
Asset
revaluation
reserve1
$’000
Accumulated
Loss
$’000
Profits
Reserve*
$’000
Other
reserves2
$’000
13,719
(52,005)
61,936
2,464
Balance at 30 June 2021
Comprehensive income for the year
Loss for the year
Other comprehensive income
Net exchange differences on
translation of financial statements
of foreign operations
Cashflow hedge reserve (net of tax)
Total comprehensive income
for the year
Transactions with owners
recorded directly in equity
Dividend reinvestment
Issue of share capital
Share‑based payment transactions
15
Transfer of Asset revaluation
reserve to profits reserve on
disposal of properties
Transfer to accumulated losses
Dividends paid
Total transactions with owners
Balance at 30 June 2022
–
–
–
–
1,167
23,735
–
–
–
–
24,902
81,288
–
–
–
–
–
–
–
(13,719)
–
–
(13,719)
–
–
–
–
–
–
–
–
–
(22,951)
–
(22,951)
(74,956)
(4,932)
–
–
(4,932)
(1,167)
–
–
13,719
22,951
(21,968)
13,535
70,539
–
(64)
153
89
–
–
135
–
–
–
135
2,688
Total
$’000
82,500
(4,932)
(64)
153
(4,843)
–
23,735
135
–
–
(21,968)
1,902
79,559
* Amounts transferred to/from the profits reserve characterise profits available for distribution as dividends in future years and reflects the amounts transferred by
individual entities in the Group and is therefore not necessarily equivalent to the consolidated Group loss for the year
1. Asset revaluation reserve
The asset revaluation reserve includes the revaluation increments arising from the revaluation of land and buildings. On disposal of these properties during the year
ended 30 June 2022, amounts contained in the asset revaluation reserve have been transferred to profits reserve
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.
38
MaxiPARTS Limited
Consolidated Statement of Changes in Equity continued
For the year ended 30 June 2022
Note
Issued
capital
$’000
56,386
Asset
revaluation
reserve1
$’000
Accumulated
Loss
$’000
Profits
Reserve*
$’000
Other
reserves2
$’000
13,997
(45,631)
50,978
2,351
Total
$’000
78,081
Balance at 30 June 2020
Comprehensive income for the year
Profit for the year
Other comprehensive income
Net exchange differences on
translation of financial statements
of foreign operations
Revaluation of land and buildings
(net of tax)
Cashflow hedge reserve (net of tax)
Total comprehensive income
for the year
Transactions with owners
recorded directly in equity
Dividends to equity holders
Total transactions with owners
Share‑based payment transactions
15
Transfer to accumulated losses
Balance at 30 June 2021
–
–
–
–
–
–
–
–
–
–
–
(278)
–
(278)
–
–
–
–
56,386
13,719
–
–
–
–
–
–
–
–
4,584
–
4,584
–
–
–
4,584
–
–
–
18
–
228
246
–
–
(133)
–
2,464
18
(278)
228
4,552
–
–
(133)
–
82,500
(6,374)
(52,005)
6,374
61,936
* Amounts transferred to/from the profits reserve characterise profits available for distribution as dividends in future years and reflects the amounts transferred by
individual entities in the Group and is therefore not necessarily equivalent to the consolidated Group loss for the year
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.
39
ANNUAL REPORT 2022 Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest and other costs of finance paid
Net cash (used in)/provided by operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Dividends received
Acquisition of new business
Acquisition of Trout River, net of cash
Proceeds from sale of Trailer Solutions business, net of cash*
Proceeds from sale of land and buildings
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Proceeds from issue of share capital
Dividends paid
Payment of leases
Net cash used in financing activities
Net decrease in cash
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
20
2022
$’000
2021
$’000
217,241
(228,639)
(334)
(11,732)
(822)
–
385
(18,288)
(472)
4,973
25,500
11,276
(17,250)
10,000
23,735
(21,968)
(4,651)
(10,134)
(10,590)
22,442
11,852
413,878
(380,871)
(1,181)
31,826
(6,147)
(1,046)
2,626
–
–
–
–
(4,567)
(20,250)
–
–
–
(10,090)
(30,340)
(3,081)
25,523
22,442
*
Proceeds from sale of Trailer Solutions business, net of cash of $4.9m represent total proceeds of $7.3m, offset by $2.3m of cash disposed of in Trout River.
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated financial statements and includes cash flows
from both continuing and discontinued operations. Refer to note 25 for the cash flows relating to discontinued operations.
40
MaxiPARTS Limited
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
MaxiPARTS Limited (the ‘Company’) is a company domiciled in Australia and its registered office is 22 Efficient Drive, Truganina, Victoria. The consolidated
financial statements of MaxiPARTS Limited as at and for the year ended 30 June 2022 comprise the Company and its subsidiaries (together referred to as
the ‘Group’) and the Group’s interest in associates. The Group is a for‑profit entity.
Financial Report Re‑issued
The financial report has been re‑issued due to a correction in the Remuneration Report, section 10. Amounts of remuneration and Note 16(c) to the
Financial Report, that displayed information from an incorrect draft version. With the exception of the update to Note 16(c), an update to the date of the
Directors’ declaration and the date the financial report was approved by the Board of Directors, there are no other changes to the financial report.
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 2 September 2022.
Going Concern
The consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to pay its debts as and when
they become due and payable.
Accounting Policies
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 MaxiPARTS Limited and all its subsidiaries. A subsidiary is any entity controlled by
MaxiPARTS Limited or any of its subsidiaries. Control exists where MaxiPARTS 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.
Non‑controlling interest 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.
41
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
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 or loss and OCI of equity‑accounted investees and reduced by
dividends received, 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.
Land and buildings were recorded as assets held for sale as at 30 June 2021 and have been subsequently sold.
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 profits reserve.
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.
(i) Leased assets
Lease assets are accounted for as described in accounting policy (ac).
42
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(ii) 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 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:
Buildings
Plant and equipment
Leased plant and equipment
2022
N/A
2021
25–40 years
2–20 years
2–20 years
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.
(ii) Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the
profit and loss as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and
processes, is capitalised if the product or process is technically and commercially feasible and the Group has sufficient resources to complete 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)).
(iii) Brand names
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.
The estimated useful lives are reflected in the following rates in the current and comparative periods:
Intellectual property
Software
Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
2022
2021
0–20 years
5–10 years
0–20 years
5–10 years
43
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(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 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.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable
on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the
statement of cash flows.
(i) Impairment
The carrying amounts of the Group’s assets, other than inventories (see accounting policy (c)) and deferred tax assets (see accounting policy (p)), are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
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 and review of
history/previous trends.
(i) 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.
(ii) Reversals of impairment
An impairment loss in respect of receivables carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related
objectively to an event occurring after the impairment loss was recognised.
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.
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.
(j) Interest‑bearing borrowings
Interest‑bearing borrowings are recognised initially at fair value less attributable transaction costs.
44
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
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.
(k) Employee benefits
(i) Defined contribution superannuation funds
Obligations for contributions to defined contribution superannuation funds are recognised as an expense in the profit or loss as incurred.
(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
MaxiPARTS 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.
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.
(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.
(l) Provisions
A 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.
(m) 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.
(n) Income tax
Income tax expense comprises current and deferred tax. Income tax is recognised in the profit or loss except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions. The Group believes that its
accruals for tax liabilities are adequate for all open tax years. This assessment relies on estimates and assumptions and may involve judgements about
future events.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill, the initial
recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that
they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement
of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
45
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
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.
(o) 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 MaxiPARTS 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.
(p) 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.
(q) Revenue
(i) Revenue from the sale of goods
Revenue from the sale of goods is recognised at a point in time upon satisfaction of the performance obligation by transferring control of the promised good
to the customer.
(ii) Revenue from the rendering of services
Revenue from the rendering of services is recognised at a point in time 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.
(r) 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.
(s) 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 30‑60 days.
46
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(t) Expenses
(i) 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.
(u) 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.
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.
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.
(v) 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. Refer note 7.
(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, management knowledge and
experience together with a detailed examination of financial and non‑financial information and trends. Refer accounting policy (l) for details of the recognition
and measurement criteria applied.
The consolidated statement of financial position at 30 June 2022 includes a receivable (recognised within trade and other receivables) of $2.5m in relation
to the completion accounts process between MaxiPARTS and ATSG. The receivable is in dispute with ATSG and it is currently going through the dispute
resolution process available under the Asset Sale Agreement. An independent accountant has been appointed to determine the validity of the disputed
amount, and the Group expects this process to be concluded in first part of H1 FY23. There is estimation uncertainty at 30 June 2022 in relation to the
recoverability of the receivable.
COVID‑19
The ongoing COVID‑19 pandemic has increased the uncertainty, generally, due to the impact of the following factors:
• the extent and duration of actions by governments, businesses and consumers to contain the spread of the virus; and
• a general increase in economic uncertainty. This includes the potential for disruption to capital markets, deteriorating credit, higher unemployment,
and changes in consumer discretionary spending behaviours;
While the Directors are cautious in the current COVID‑19 environment, sales activity and operations remain largely unaffected by COVID‑19 impacts.
47
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
Financial risk management
(iii) 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.
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.
(iv) 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 2022 was ‑6% (2020: 17%). The Dividend Reinvestment Plan was reinstated on 1 October 2021 (previously suspended since 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.
(w) Segment reporting
Operating segments are identified, and segment information disclosed on the basis of internal reports that are regularly provided to or reviewed by the
Group’s chief operating decision maker which, for the Group, is the Managing Director. In this regard, such information is provided using different measures
to those used in preparing the consolidated statement of profit or loss and consolidated balance sheet.
Reconciliations of such management information to the statutory information contained in the financial report have been included.
(aa) Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non‑financial assets and liabilities.
Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about
the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
(i) Land and buildings
The fair value of property is based on market values. The market value of property is the estimated amount for which a property could be exchanged on
the date of valuation between a willing and knowledgeable buyer and seller in an arm’s length transaction after proper marketing.
(ii) Derivatives
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is
estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract.
The fair value of interest rate swaps is based on 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.
(iv) Assets and liabilities held for sale
Assets and liabilities held for sale are measured at the lower of their carrying value and fair value less costs to sell. The fair value reflects the use of directly
unobservable market inputs including assumptions about working capital.
48
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(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.
Amounts received under Government COVID‑19 related stimulus schemes are recognised as other income when confirmation that the payments will be
made is received and the Group has satisfied its obligations under the respective scheme. All such amounts are recorded in the consolidated statement
of profit or loss on a gross basis.
(ac) Leases
The Group recognises a right‑of‑use asset and a lease liability at the lease commencement date. The right‑of‑use asset is initially measured at cost, and
subsequently at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurements of the lease liability. The lease
liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing
rate as the discount rate.
The lease liability is subsequently increased by the interest cost and decreased by lease payments made. It is remeasured when there is a change in
future lease payments, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the
assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options.
(ad) Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the
Group and represents a separate major line of business or geographic area of operations, is part of a single co‑ordinated plan to dispose of a separate major
line of business or geographical area of operations or is a subsidiary acquired exclusively with the view to resale.
Classification as a discontinued operation occurs at the earlier of the disposal or when the operation meets the criteria to be classified as held‑for‑sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re‑presented as if the operation had
been discontinued from the start of the comparative year.
(ae) Disposal group held for sale
Non‑current assets and disposal groups (total assets and their associated liabilities) 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 asset and disposal groups are remeasured in accordance with the Group’s accounting policies. Thereafter, generally
the assets and disposal groups 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.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal group is available for immediate
sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that
the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year
from the date of the classification. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
49
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(af) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired.
The consideration transferred for the acquisition of an acquiree comprises the fair values of the assets transferred, the liabilities incurred and the equity
interests issued. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement
and the fair value of any pre‑existing equity interest in the subsidiary.
Acquisition‑related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are, with limited exceptions, measured initially at their fair values at the acquisition‑date. On an acquisition‑by‑acquisition basis, any non‑controlling interest
in the acquiree is recognised either at fair value or at the non‑controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred and the amount of any non‑controlling interest in the acquiree over the fair value of the net identifiable assets
acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement
of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of
exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair
value with changes in fair value recognised in profit or loss.
(i) Critical accounting judgements, estimates and assumptions
Business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent liabilities assumed
are initially estimated by the consolidated entity taking into consideration all available information at the reporting date. Fair value adjustments on the
finalisation of the business combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact
on the assets and liabilities, depreciation and amortisation reported.
(ii) Measurement principle
The following measurement principles have been applied to the asset classes purchased:
Asset Class
Property, plant and equipment
Inventories
Right of Use Asset
Deferred Tax Assets
Lease Liability
Employee Entitlements
Measurement
Fair value
Fair value
AASB 16 Leases
AASB 12 Income Taxes
AASB 16 Leases
AASB 19 Employee Benefits
50
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
2. NOTES TO THE STATEMENT OF PROFIT AND LOSS
2a. Revenue
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.
Type of Good or Service
Sale of parts (point in time sale)
Total Group Revenue
Geographical Market
Australia
Total Group Revenue
2b. Employee and Contract Labour Expenses
Employee and contract labour expenses:
Employee expenses
Contract labour expenses
Total employee and contract labour expenses
2c. Depreciation & Amortisation, Finance Costs and Other Expenses
Depreciation and Amortisation
Depreciation
Lease depreciation
Total Depreciation and Amortisation
Finance Costs
Interest expenses
Lease interest
Total Finance Costs
Other expenses
Significant items
Other expenses
Total other expenses
2d. Other Income
Legal settlement
Other income
Total Other Income
CONSOLIDATED
2022
$’000
152,767
152,767
152,767
152,767
CONSOLIDATED
2022
$’000
21,922
687
22,609
CONSOLIDATED
2022
$’000
583
3,970
4,553
327
1,092
1,419
1,381
7,263
8,644
CONSOLIDATED
2022
$’000
–
116
116
The Company agreed to settle legal proceedings in relation to the TRANSform Enterprise Resource Planning system for $7.20m in June 2021
2021
$’000
114,588
114,588
114,588
114,588
2021
$’000
19,138
597
19,735
2021
$’000
546
3,471
4,017
1,177
1,021
2,198
2,043
8,875
10,918
2021
$’000
7,200
38
7,238
51
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
3. TAXATION
(a) Income tax
Reconciliation of tax expense/(benefit)
CONSOLIDATED
2022
$’000
2021
$’000
Prima facie tax payable/(benefit) on profit/(loss) before tax at 30% (2021: 30%)
(1,417)
1,566
Add/(deduct) tax effect of:
Research and development allowance
Non‑deductible expenditure
Associate equity accounted income
Under/(over) provision in prior year
Unrecoverable deferred tax asset write‑off (NZ entity)
Impact of tax rates in foreign jurisdictions
Income tax expense in consolidated profit or loss
Income tax expense attributable to the Group’s profit is made up of:
Current tax benefit
Prior year under/(over) provision
Deferred tax expense
– origination and reversal of temporary difference
– prior year under/(over) – deferred differences
Income tax expense in consolidated profit or loss
(b) Income tax expense is made up of:
Income tax expense on continuing operations
Income tax benefit on discontinued operations
Income tax expense on consolidated profit or loss
(c) 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
– Leases
– Intangible assets
– Inventory
– Other
– Tax losses carried forward
Net deferred tax asset/(liability)
Balance at beginning of year
Recognised in profit or loss
Recognised in equity
Tax losses carried forward
Net deferred tax asset/(liability)
(d) Current tax asset/(liability)
–
754
–
(228)
1,208
(112)
1,622
205
(13,440)
(251)
13,873
23
205
2,429
(2,224)
205
1,113
3,157
6,165
(5,138)
854
900
12,690
19,741
20,924
(13,873)
–
12,690
19,741
(856)
371
(837)
399
–
(7)
(930)
636
(840)
241
1,078
157
636
2,636
(2,000)
636
5,268
13,081
6,186
(4,873)
486
776
–
20,924
19,846
893
185
–
20,924
The Group’s current tax asset of $743k (2021: nil), relating to New Zealand taxes, and current tax liability of nil (2021: $576k) represents the amount of income
taxes receivable/(payable) in respect of current and prior financial periods.
52
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
4. TRADE AND OTHER RECEIVABLES
CONSOLIDATED 2022
CONSOLIDATED 2021
Gross
$’000
Impairment
$’000
15,733
8,926
1,316
104
26,079
–
–
(70)
(104)
(174)
Total
$’000
15,733
8,926
1,246
–
25,905
2,285
28,190
Gross
$’000
Impairment
$’000
19,975
4,519
6,416
2,304
33,215
–
(19)
–
(457)
(476)
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
Finished goods – at cost
Less: provision for decrease to net realisable value
Total inventories
6. PROPERTY, PLANT AND EQUIPMENT
Plant and Equipment
Plant and equipment at cost
Accumulated depreciation and impairment losses
Subtotal plant and equipment
Office equipment at cost
Accumulated depreciation and impairment losses
Subtotal office equipment
Leased property, plant and equipment
Accumulated depreciation and impairment losses
Subtotal leased property, plant and equipment
Capital work in progress
Total property, plant and equipment
Total
$’000
19,975
4,500
6,416
1,847
32,738
330
33,068
2021
$’000
28,440
(1,292)
27,148
2021
$’000
5,687
(4,485)
1,202
4,392
(3,801)
591
147
(147)
–
108
CONSOLIDATED
2022
$’000
46,275
(1,151)
45,124
CONSOLIDATED
2022
$’000
6,776
(4,992)
1,784
4,011
(3,371)
640
531
(45)
486
450
3,360
1,901
53
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
6. PROPERTY, PLANT AND EQUIPMENT continued
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
CONSOLIDATED
2022
$’000
1,202
926
–
72
(66)
(350)
–
–
1,784
591
478
36
(248)
(217)
–
–
640
–
574
(16)
–
(72)
486
108
450
(108)
–
450
2021
$’000
570
2,860
(112)
2,784
(1,333)
(986)
30
(2,611)
1,202
158
736
716
–
(487)
12
(544)
591
34
30
(154)
90
–
–
3,003
2,521
(3,500)
(1,916)
108
Plant and equipment
Carrying amount at the beginning of the financial year
Additions
Transfer to inventories
Transfers from capital works in progress
Disposals
Depreciation
Foreign currency movement
Transfer to held for sale
Carrying amount at the end of the financial year
Office equipment
Carrying amount at the beginning of the financial year
Additions
Transfers from capital works in progress
Disposals
Depreciation
Foreign currency movement
Transfer to held for sale
Carrying amount at the end of the financial year
Leased property, plant and equipment
Carrying amount at the beginning of the financial year
Additions
Amortisation
Transfer to held for sale
Disposals
Carrying amount at the end of the financial year
Capital works in progress
Carrying amount at the beginning of the financial year
Additions
Transfers to property, plant and equipment
Transfer to held for sale
Carrying amount at the end of the financial year
54
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
7. INTANGIBLES
Goodwill at cost
Impairment losses
Total intangibles
Goodwill
Carrying amount at the beginning of the financial year
Additions
Carrying amount at the end of the financial year
CONSOLIDATED
2022
$’000
18,091
(9,065)
9,026
7,633
1,393
9,026
2021
$’000
16,698
(9,065)
7,633
7,633
–
7,633
Goodwill cost and impairment losses have been adjusted to remove the amounts relating to discontinued operations.
Impairment tests for Goodwill and Other Intangibles
Management has considered the requirements under the accounting standards with regards to the Truckzone acquisition and concluded that the assets
purchased will consolidate into the MaxiPARTS CGU and operating segment, primarily due to the similarities of the core business and seamless consolidate
of the management, operational and key business processes into the existing MaxiPARTS business.
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. Value‑in‑use was determined by discounting the future cash flows expected to be generated from the continuing use of the assets.
Value‑in‑use as at 30 June 2022 was determined similarly to the 30 June 2021 goodwill impairment test and was based on the following key assumptions:
• Most recent forecast projections by management for FY23 and subsequently reviewed by the Board
• Growth rates for year 2‑5 of 3.0%, 3.0%, 2.5% and 2.5% (annually) (30 June 2021: year 2‑5 of 2.5%, 2.1%, 2.1% and 2.1%)
• Terminal growth rate of 2.0% (30 June 2021: 2.0%); and
• Pre‑tax nominal discount rate of 14.0% (30 June 2021: 12.3%).
The values assigned to the key assumptions represent the Group’s assessment of future trends in the industry and are based on historical data from both
external sources and internal sources.
The recoverable amount of the MaxiPARTS CGU was found to be in excess of its carrying value.
8. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Total trade and other payables
CONSOLIDATED
2022
$’000
19,966
5,853
25,819
2021
$’000
35,658
8,864
44,522
55
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
9. INTEREST BEARING LOANS AND BORROWINGS
Non‑current
Bank loans – secured
Total non‑current interest bearing liabilities
Bank loans are subject to a floating interest rate.
Finance costs:
– Interest on bank loans
– Finance lease charges
Total finance costs
10. PROVISIONS
Current
Employee entitlements
Warranty MaxiPARTS
Warranty Trailer Solutions Business
Total current provisions
Non‑current
Employee entitlements
Total non‑current provisions
Note
23(e)
Note
25(e)
CONSOLIDATED
2022
$’000
10,000
10,000
CONSOLIDATED
2022
$’000
327
–
327
CONSOLIDATED
2022
$’000
3,131
329
2,000
5,460
319
319
2021
$’000
17,250
17,250
2021
$’000
1,177
3
1,180
2021
$’000
2,561
640
–
3,201
269
269
Aggregate employee entitlements liability
3,450
2,830
Warranty provision at 30 June 2022 is analysed as follows:
Carrying amount at 1 July 2021
Provisions made during the year
Provisions released during the year
Carrying amount at 30 June 2022
56
MaxiPARTS Limited
Warranty
$’000
640
2,111
(422)
2,329
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
11. ISSUED CAPITAL
Balance at 30 June 2021*
Dividend reinvestment
Issue of share capital
Balance at 30 June 2022
Number of
Ordinary
Shares
37,015,621
379,905
10,001,456
47,396,982
Share Capital
$’000
56,386
1,167
23,735
81,288
*
The comparative information for weighted average number of shares is restated due to share consolidation for 1 share for every 5 previously held
Ordinary shares
Subject to the Constitution of the Company, holders of ordinary shares are entitled to vote as follows:
• Every shareholder may vote;
• On a show of hands every shareholder has one vote;
• On a poll every shareholder has 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.
The Group completed a share consolidation of 1 share for every 5 previously held with an effective date of 27 August 2021 and paid a special dividend of
62.5c per share (fully franked), and this included offering eligible shareholders the opportunity to reinvest their dividends in additional fully paid shares in the
Company. The special dividend ensured that the shareholders received a direct benefit from the sale of the Trailer Solutions Business and the Derrimut and
Hallam properties. 379,905 shares were issued during the period from shareholders electing to participate in the Dividend Reinvestment Plan, with an issued
date of 24 December 2021.
The Group completed an equity raise of $23.7m through a combined placement and an accelerate non‑renounceable entitlement offer. 8,165,154 shares were
issued to institutional shareholders on 9 February 2022, and a further 1,836,302 shared were issued on 10 March 2022 to retail shareholders.
12. EARNINGS PER SHARE
Earnings reconciliation
Net profit/(loss) attributable to equity holders of the Company
Basic earnings
From continuing operations
From discontinued operations
Diluted Earnings
From continuing operations
From discontinued operations
CONSOLIDATED
2022
$’000
(4,932)
(4,932)
4,908
(9,840)
(4,932)
(4,932)
4,908
(9,840)
(4,932)
2021
$’000
4,584
4,584
5,689
(1,105)
4,584
4,584
5,689
(1,105)
4,584
57
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
12. EARNINGS PER SHARE continued
Weighted average number of shares
Number of ordinary shares for basic Earnings Per Share
Number of Ordinary Shares for Diluted earnings per share
2022
Number
2021*
Number
40,928,976
40,928,976
37,015,621
37,015,621
*
The comparative information for the number of ordinary shares is restated due to share consolidation for 1 share for every 5 previously held
13. Dividends
Dividends paid
2022
Special dividend
Total dividends paid
Dividends proposed
Final – ordinary
Cents Per
Share
Total Amount
$’000
Date of
Payment
Tax Rate for
Franking
Credit
Percent
Franked
62.50
62.50
23,135
23,135
24–Dec–21
30%
100%
2.50
1,185
19–Sep–22
30%
100%
The above dividend was determined after the end of the financial year and will be paid on 19 September 2022. The financial effect of this dividend has not
been brought to account in the financial statements for the year ended 30 June 2022 and will be recognised in subsequent financial statements.
Dividend franking account
Franking credits available to shareholders of MaxiPARTS Limited for subsequent financial years
The ability to utilise the franking credits is dependent upon the ability to declare dividends.
THE COMPANY
2022
$’000
7,918
2021
$’000
17,668
The impact on the dividend franking account of dividends proposed after the reporting date but not recognised as a liability is to reduce it by $498k.
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 MaxiPARTS Group reports on two Segments: 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 Trailer Solutions segment is classified as discontinued operations and has been disposed of during the year,
refer to note 25 for further details. The Parts business sells trailer and truck parts at both a wholesale and retail level in Australia.
58
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
14. SEGMENT INFORMATION continued
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.
YEAR ENDED 30 JUNE 2022
Business Segments
Revenue
External segment revenue
Inter‑segment revenue
Total segment revenue
Total Revenue
Segment Result
Segment earnings/(loss) pre associate, interest
and significant items
Interest income
Interest expense
Segment net profit/(loss) before tax (excluding significant items)
Significant items, before tax
Acquisition / Disposal / Transaction / Litigation costs
Segment net profit/(loss) before tax (Including significant items)
Income tax expense
Net profit/(loss) after tax
Depreciation and Amortisation
Total Depreciation and Amortisation
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
Capital expenditure
Unallocated capital expenditure
Total capital expenditure
*
The Trailer Solutions segment is a discontinued operation. Refer to note 25 for further details.
Trailer
Solutions
Business*
$’000
43,542
485
44,027
MaxiPARTS
$’000
Corporate/
Eliminations
$’000
153,070
4,280
157,350
–
(4,765)
(4,765)
Total
$’000
196,612
–
196,612
44,027
157,350
(4,765)
196,612
(6,702)
–
(664)
(7,366)
(4,601)
(11,967)
–
(11,967)
–
–
–
–
–
–
–
–
–
–
–
12,517
–
(1,092)
11,425
(735)
10,690
–
10,690
4,534
4,534
118,820
–
118,820
52,300
–
52,300
2,428
–
2,428
(2,704)
127
(227)
(2,804)
(646)
(3,450)
(205)
(3,655)
19
19
–
26,808
26,808
–
13,769
13,769
–
–
–
3,111
127
(1,983)
1,255
(5,982)
(4,727)
(205)
(4,932)
4,553
4,553
118,820
26,808
145,628
52,300
13,769
66,069
2,428
–
2,428
59
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
14. SEGMENT INFORMATION continued
Trailer
Solutions
Business
$’000
236,623
1,921
238,544
MaxiPARTS
$’000
Corporate/
Eliminations
$’000
Total
$’000
116,145
20,993
137,138
–
352,768
(22,914)
(22,914)
–
352,768
238,544
137,138
(22,914)
352,768
10,940
2,791
(2,668)
11,063
(13,589)
–
–
(2,526)
–
(2,526)
3,254
3,254
121,872
–
121,872
98,654
–
98,654
5,863
–
5,863
11,621
–
(1,020)
10,601
–
–
–
10,601
–
10,601
3,901
3,901
67,245
–
67,245
36,801
–
36,801
236
–
236
(6,828)
–
(1,183)
(8,011)
–
7,200
(2,043)
(2,854)
(636)
(3,491)
1,434
1,434
–
52,030
52,030
–
23,192
23,192
–
47
47
15,733
2,791
(4,871)
13,653
(13,589)
7,200
(2,043)
5,221
(636)
4,584
8,589
8,589
189,117
52,030
241,147
135,455
23,192
158,647
6,100
47
6,147
YEAR ENDED 30 JUNE 2021
Business Segments
Revenue
External segment revenue
Inter‑segment revenue
Total segment revenue
Total Revenue
Segment Result
Segment earnings/(loss) pre associate, interest
and significant items
Share of net profit of equity accounted investments
Interest expense
Segment net profit/(loss) before tax (excluding significant items)
Significant items, before tax
Impairment loss – other non‑financial assets
Litigation settlement
Acquisition / Disposal / Transaction / Litigation costs
Segment net profit/(loss) before tax (including significant items)
Income tax expense
Net profit/(loss) after tax
Depreciation and Amortisation
Total Depreciation and Amortisation
Assets
Segment assets
Unallocated corporate assets
Consolidated total assets
Liabilities
Segment liabilities
Unallocated corporate liabilities
Consolidated total liabilities
Capital expenditure
Unallocated capital expenditure
Total capital expenditure
60
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
14. SEGMENT INFORMATION continued
Reconciliation of information on reportable segments to the amounts reported in the financial statements
Revenue
Total revenue for reportable segments
Elimination of discontinued operations
Consolidated Revenue
Profit before tax
Total (Loss)/Profit before tax for reportable segments
Elimination of discontinued operations
Unallocated amounts:
– Other corporate expenses
Consolidated profit before tax from continuing operations
COMPANY
2022
$’000
2021
$’000
196,612
(43,845)
152,767
352,768
(238,180)
114,588
(1,277)
12,064
(3,450)
7,337
8,075
3,105
(2,854)
8,325
15. SHARE BASED PAYMENTS
On 15 October 2010, the Group established the MaxiPARTS 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
Target return on invested capital
Minimum % of ROIC target that must be achieved for Performance Rights to vest
Minimum Economic Value Add (EVA)
Target increase in EVA
Minimum % of EVA target that must be achieved for Performance Rights to vest
Minimum service requirement
Details of PRs exercised
Total PRs issued
Total PRs forfeited
Total PRs exercised
Total PRs remaining on Issue
1 July 2021
– 30 June 2024
1 July 2020
– 30 June 2023
1 July 2019
– 30 June 2022
3 Nov 2021
23 Nov 2020
25 Oct 2019
113,349
29,439
83,910
N/A
N/A
$4.17m
$6.220m
67.0%
1,227,601
1,036,879
190,723
12.50%
67.0%
N/A
N/A
N/A
606,620
520,938
85,682
11.53%
67.0%
N/A
N/A
N/A
3 years from
grant date
3 years from
grant date
3 years from
grant date
1 July 2021
– 30 June 2024
1 July 2020
– 30 June 2023
1 July 2019
– 30 June 2022
113,349
29,439
–
83,910
1,227,601
1,036,879
–
190,723
606,620
520,938
85,682
–
61
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
15. SHARE BASED PAYMENTS continued
Measurement of fair value
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
Expected volatility
Expected dividend yield
Risk–free rate of return
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
16. RELATED PARTY DISCLOSURES
(a) Director and other key management personnel disclosures
2022
$3.628
$3.850
65.00%
2.00%
0.90%
2022
$’000
195
(60)
135
2021
$1.795
$1.800
65.00%
0.00%
0.10%
CONSOLIDATED
2021
$’000
399
(532)
(133)
2020
$1.094
$1.100
55.00%
0.00%
0.71%
2020
$’000
168
(19)
149
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel
comprise the Directors of the Company and Executives for the Group.
The following were key management personnel of the Group at any time during the reporting period and unless otherwise indicated were key management
personnel for the entire period:
Non‑Executive Directors
– Mr R Wylie (Chair)
– Ms M Verschuer (Deputy Chair)
Executives
– Ms L Blockley (Chief Financial Officer, appointed 6 September 2021)
– Mr T Bradfield (Former CFO, position made redundant 3 September 2021)
– Mr G Butera (appointed 17 September 2021)
– Mr T Negus (GM – Manufacturing, position made redundant
– Mr J Curtis (Deputy Chair, resigned 3 November 2021)
– Mr G Sedgwick (resigned 27 April 2022)
Executive Directors
3 September 2021)
– Mr P Loimaranta (Managing Director appointed 6 September 2021, prior GM – MaxiPARTS and New Zealand)
– Mr D Jenkins (Managing Director, position made redundant 3 September 2021, separated on 30 November 2021)
Directors’ transactions in shares
Directors and their related entities acquired 73,936 (2021: nil) existing ordinary shares in MaxiPARTS Limited during the year.
62
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
16. RELATED PARTY DISCLOSURES continued
(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) 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/(income)
CONSOLIDATED
2022
Restated*
2021
3,045,163
2,994,747
230,156
69,174
203,912
(81,497)
3,344,493
3,117,162
* Amounts are restated for FY22 from the previously released version due to a correction in FY22 information, that previously displayed information from an incorrect draft version.
17. PARENT ENTITY
As at 30 June 2022 and throughout the financial year ending on that date, the parent company of the Group was MaxiPARTS Limited.
Results of the parent company
Profit/(loss) for the year
Total comprehensive income
Financial position of the parent company
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent company comprising of:
Issued capital
Reserves
Retained earnings
Total equity
Parent company contingencies
COMPANY
2022
$’000
(4,244)
(4,244)
89,645
125,736
3,734
13,768
2021
$’000
78,600
78,600
92,714
132,979
1,419
18,669
111,968
114,310
81,288
498
30,182
111,968
56,386
363
57,561
114,310
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.
63
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
18. CONTROLLED ENTITIES
MaxiPARTS Limited
Controlled entities of MaxiPARTS Limited
MaxiPARTS Australia Pty Ltd (formerly MaxiTRANS Australia Pty Ltd)
– ACN 159 813 733 Pty Ltd (formerly Transport Connection Pty Ltd)
– MaxiPARTS Services Pty Ltd
Transtech Research Pty Ltd
Trail Truck Parts Pty Ltd (formerly MaxiTRANS Panels Pty Ltd)(i)
MaxiPARTS Industries (N.Z.) Pty Ltd
(formerly MaxiTRANS Industries (N.Z.) Pty Ltd)
ACN 066 671 805 Pty Ltd (formerly Peki Pty Ltd)(i)
Ultraparts Pty Ltd(i)
MaxiPARTS Finance Pty Ltd (formerly MaxiTRANS Finance Pty Ltd)(i)
ACN 073 705 263 PTY LTD (formerly Lusty EMS Pty Ltd)
ACN 108 302 110 Pty Ltd (formerly Hamelex White Pty Ltd)(i)
MaxiPARTS Operations Pty Ltd (formerly MaxiPARTS Pty Ltd/formerly
Colrain Pty Ltd)
– Colrain Queensland Pty Ltd
– Colrain (Albury) Pty Ltd
– MaxiPARTS (Qld) Pty Ltd (formerly 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)
MaxiPARTS Employee Share Scheme Pty Ltd (formerly MaxiTRANS
Employee Share Plan Pty Ltd)
MaxiPARTS International Holdings Pty Ltd (formerly MaxiTRANS
(China) Limited)(i)
(i) Dormant entity
Country of
Incorp
Class of
Shares
2022
%
2021
%
INTEREST HELD
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Aust.
Hong Kong
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
64
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
19. DEED OF CROSS GUARANTEE
The Company, together with its subsidiaries, MaxiPARTS Australia Pty Ltd, Transtech Research Pty Ltd,
ACN 073 705 263 Pty Ltd, ACN 066 671 805 Pty Ltd, MaxiPARTS Industries (N.Z.) Pty Ltd, MaxiPARTS Operations Pty Ltd (effective 1 September 2008,
previously ineligible) and MaxiPARTS (Qld) 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 2022 is set out as follows:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Continuing Operations
Total revenue
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Other income
Employee expenses
Warranty reversals/(expenses)
Depreciation and amortisation expenses
Finance costs
Other expenses
Profit before income tax from continuing operations
Income tax expense
Profit from continuing operations
Discontinued operations
Loss from discontinued operations before income tax
Income tax benefit from discontinued operations
(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 reclassified to profit or loss:
Revaluation of land and buildings
Related tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive (loss)/income for the year
(Loss)/profit attributable to:
Equity holders of the company
Total comprehensive (loss)/income attributable to: Equity holders of the company
2022
$’000
152,767
2,013
(110,756)
116
(22,609)
422
(4,553)
(1,419)
(8,644)
7,337
(2,429)
4,908
(12,299)
2,224
(5,167)
(64)
153
–
–
89
(5,078)
(5,167)
(5,078)
2021
$’000
114,588
39
(76,633)
7,238
(19,735)
(39)
(4,017)
(2,198)
(10,918)
8,325
(2,636)
5,689
(4,146)
2,000
3,545
18
227
(397)
119
(33)
3,512
3,545
3,512
65
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
19. DEED OF CROSS GUARANTEE continued
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax assets
Other
Assets held for sale
Total Current Assets
Non‑Current Assets
Investments in controlled entities
Property, plant and equipment
Intangible assets
Right of use asset
Financial asset
Deferred tax assets
Total Non‑Current Assets
Total Assets
Current Liabilities
Trade and other payables
Current tax liability
Provisions
Lease liability
Liabilities held for sale
Total Current Liabilities
Non‑Current Liabilities
Interest bearing loans and borrowings
Provisions
Lease liability
Total Non‑Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained profits/(accumulated losses)
Total Equity
66
MaxiPARTS Limited
2022
$’000
11,852
24,461
45,124
743
325
–
82,505
–
3,360
9,026
23,265
4,000
19,741
59,392
141,897
25,819
–
5,460
4,491
–
35,770
10,000
319
19,980
30,299
66,069
75,828
78,369
2,688
(5,229)
75,828
2021
$’000
22,442
27,741
27,148
–
262
109,685
187,278
2,903
1,901
7,632
16,845
–
20,924
50,205
237,483
43,200
576
3,201
3,379
73,436
123,792
17,250
269
14,264
31,783
155,575
81,908
56,386
16,182
9,340
81,908
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
20. NOTE TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES WITH OPERATING PROFIT/(LOSS) AFTER TAX
CONSOLIDATED
Profit/(loss) for the year
Non‑cash items in operating profit
Depreciation and amortisation of assets
(Gain)/loss on sale of property, plant and equipment
Loss on sale of discontinued operations
Gain on sale of land and buildings
AASB16 lease Interest
Gain on derecognition of ROU asset
Impairment loss
Share of net profits of associates accounted for using the equity method
Share based payments (income)/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 current tax assets
Increase/(decrease) in provisions
Increase/(decrease) in deferred taxes
Net cash provided by/(used in) operating activities
The reconciliation includes operating cash flows from both continued and discontinued operations.
21. CAPITAL AND LEASING COMMITMENTS
(a) Right‑of‑use assets
Balance at 1 July 2021
Additions during the year
Disposals during the year
Depreciation charge for the year
Balance as at 30 June 2022
2022
$’000
(4,932)
4,553
141
3,623
(306)
1,648
(2)
–
–
135
879
(66)
(2,157)
(13,484)
(1,230)
1,552
(2,086)
(11,732)
CONSOLIDATED
Other assets
$’000
1,556
1,087
(58)
(829)
1,756
Land and
buildings
$’000
15,289
11,253
(1,892)
(3,141)
21,509
2021
$’000
4,584
8,589
1,333
–
–
3,691
(1,936)
13,589
(2,791)
(133)
(6,522)
156
2,051
5,805
2,176
1,839
(605)
31,826
Total
$’000
16,845
12,340
(1,950)
(3,970)
23,265
67
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
21. CAPITAL AND LEASING COMMITMENTS continued
Balance at 1 July 2020
Additions during the year
Disposals during the year
Depreciation charge for the year
Transfer to held for sale
Balance as at 30 June 2021
(b) Lease liabilities
Balance at 1 July 2021
Additions during the year
Interest expense
Payments
Disposals during the year
Balance as at 30 June 2022
Balance at 1 July 2020
Additions during the year
Interest expense
Payments
Transfer to held for sale
Balance as at 30 June 2021
(c) Amounts recognised in profit or loss
Depreciation expense of right‑of‑use assets
Interest expense on lease liabilities
Total
CONSOLIDATED
Other assets
$’000
2,386
6,784
(494)
(1,285)
(5,834)
1,556
Land and
buildings
$’000
22,845
29,580
–
(4,309)
(32,828)
15,289
Total
$’000
25,231
36,364
(494)
(5,594)
(38,661)
16,846
CONSOLIDATED
Total
$’000
17,643
12,486
1,092
(4,651)
(2,099)
24,471
CONSOLIDATED
Total
$’000
47,050
14,082
3,691
9,912
(57,092)
17,643
2021
$’000
3,471
1,021
4,492
CONSOLIDATED
2022
$’000
3,970
1,092
5,062
22. CONTINGENT LIABILITIES
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.
68
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
23. FINANCIAL INSTRUMENTS
(a) Risk management framework/policies
The Group’s key activities include the sale and distribution of commercial parts 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 floating interest rates.
As at reporting date the interest rate profile of the Group’s interest‑bearing financial instruments were:
Borrowings – floating rate
CONSOLIDATED
2022
$’000
10,000
10,000
2021
$’000
17,250
17,250
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
2022
$’000
(70)
70
2021
$’000
(121)
121
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
Buy USD Dollar
2022
$’000
0.6892
2021
$’000
0.7638
2022
$’000
4,121
2021
$’000
6,777
2022
$’000
5,979
2021
$’000
8,873
2022
$’000
9
2021
$’000
135
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
CONSOLIDATED
2022
$’000
530
(710)
2021
$’000
719
(719)
69
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
23. FINANCIAL INSTRUMENTS continued
(d) Credit risk
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. 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 broad road transport industry.
Guarantees
Performance guarantees of $2,166,231 (2021: $3,431,180) are held by Commonwealth Bank of Australia.
(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’s liquidity management policies include
Board approval of all changes to debt facilities as well as robust management practices in short and long term cashflow management.
The Group has reduced debt over the last financial year, which has seen a net cash position (total borrowings less cash on hand) of $1,852k at 30 June 2022.
The following table summarises the maturities of the Group’s financial liabilities based on the remaining earliest contractual maturities.
Carrying
amount
$’000
(25,819)
(10,000)
(24,471)
Total
$’000
(25,819)
(10,918)
(31,733)
6 months
or less
$’000
(25,819)
(204)
(2,595)
6–12
Months
$’000
–
(204)
(2,453)
1–2
Years
$’000
–
(408)
(4,377)
2–5
Years
$’000
–
(10,102)
(10,732)
5+
Years
$’000
–
–
(11,576)
8,619
(8,656)
8,619
(8,656)
8,619
(8,656)
–
–
–
–
–
–
–
–
(60,327)
(68,507)
(28,655)
(2,657)
(4,785)
(20,834)
(11,576)
Carrying
amount
$’000
(44,522)
(17,250)
(17,643)
Total
$’000
(44,522)
(18,722)
(21,840)
6 months
or less
$’000
6–12
Months
$’000
(44,522)
(589)
(2,103)
–
(589)
(2,021)
1–2
Years
$’000
–
(17,544)
(3,703)
2–5
Years
$’000
–
–
5+
Years
$’000
–
–
(8,050)
(5,963)
13,048
(13,192)
13,048
(13,192)
(79,559)
(85,228)
13,048
(13,192)
(47,358)
–
–
–
–
–
–
–
–
(2,610)
(21,247)
(8,050)
(5,963)
30 June 2022 – Consolidated
Trade and other payables
and accruals
Borrowings
Lease liability
Effect of derivative
instruments
Forward exchange contracts
– inflow
– outflow
30 June 2021 – Consolidated
Trade and other payables
and accruals
Borrowings
Lease liability
Effect of derivative
instruments
Forward exchange contracts
– inflow
– outflow
70
MaxiPARTS Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
23. FINANCIAL INSTRUMENTS continued
Finance facilities
At year end, the Group had the following financing facilities in place with its bankers:
Consolidated
Loan facility
Overdraft facility
Multi‑option facility
FACILITY AMOUNT
UTILISED
AVAILABLE
2022
$’000
10,000
1,000
2,600
13,600
2021
$’000
24,000
4,960
5,040
34,000
2022
$’000
10,000
–
2,166
12,166
2021
$’000
17,250
–
3,431
20,681
2022
$’000
–
1,000
434
1,434
2021
$’000
6,750
4,960
1,609
13,319
Commonwealth Bank of Australia is the Group’s banking partner.
The Group established a new bank facility agreement with the Commonwealth Bank of Australia on 1 September 2021. The previous syndicated bank facility
agreement with Commonwealth Bank of Australia and HSBC Bank ceased on 31 August 2021, at the same time as the sale of the Trailer Solutions business
and properties.
Australian loan facilities of $13.6m mature as follows, subject to continuing compliance with the terms of the facilities:
– $1m in September 2022 (overdraft facility)
– $2.6m in September 2022 (performance guarantees)
– $10m in September 2024 (loan facility)
Interest rates are variable for the Group’s loan facilities.
The terms and conditions of the bank facilities contain covenants in relation to adjusted Earnings before interest, tax, depreciation and amortisation
and Tangible Asset ratio.
The Group was not in breach of any debt covenants in the financial reporting period ending 30 June 2022; the Group’s forecast indicates that the Group
will continue to comply with all covenants in the next 12 months.
(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 2022.
• 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.
71
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
23. FINANCIAL INSTRUMENTS continued
The fair value of forward exchange contracts and interest rate swaps at balance date is as follows:
Derivative assets
Derivative liabilities
24. REMUNERATION OF AUDITOR
Remuneration of auditor
KPMG Australia:
– auditing and reviewing the financial statements – Group
– auditing and reviewing the financial statements – controlled entities
– other services (taxation and advisory)
Overseas KPMG Firms:
– other services (taxation and advisory)
Total auditor remuneration
CONSOLIDATED
2022
$’000
38
–
CONSOLIDATED
2022
$
370,969
–
80,596
451,565
9,261
9,261
460,826
2021
$’000
–
73
2021
$
451,718
37,084
261,696
750,498
18,090
18,090
768,588
25. DISCONTINUED OPERATIONS
On 31 August 2021 the Group completed the transaction for the sale of the Trailer Solutions business and Ballarat property to Australian Trailer Solutions
Group Pty Ltd (ATSG), and subsequently completed the sale of both the Derrimut and Hallam properties, both utilised for Trailer Solutions business, to another
third party. The assets of the Trailer Solutions business were classified as held for sale as at 30 June 2021.
(a) Statement of Profit or Loss
Discontinued operation
Revenue
Other income
Impairment loss – remeasurement of disposal group
Loss on sale of discontinued operations
Gain on sale of land and buildings
Lease interest
Expenses
Loss before income tax
Income tax benefit
Loss from discontinued operation, net of tax
72
MaxiPARTS Limited
2022
$’000
43,845
98
–
(3,623)
306
(556)
(52,134)
(12,064)
2,224
(9,840)
2021
$’000
238,180
10,492
(13,589)
–
–
(2,670)
(235,518)
(3,105)
2,000
(1,105)
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
25. DISCONTINUED OPERATIONS continued
(b) Cash flows from discontinued operation
Discontinued operation
Net cash inflows/(outflows) from operating activities
Net cash inflows/(outflows) from investing activities
Net cash inflows/(outflows) from financing activities
Net cash from discontinued operation
2022
$’000
(11,583)
29,927
(861)
17,483
2021
$’000
13,529
(4,410)
(3,337)
5,783
Cash inflows generated from the sale of Trailer Solutions business and land and buildings was utilised by the Group for the pay down of debt and for
distribution to the shareholders by way of a 62.5c per share special dividend.
(c) Effect of disposal on the financial position of the Group
Cash and cash equivalents
Trade and other receivables
Property, plant and equipment
Inventories
Prepayments
Investment in associates
Land and buildings
Intangible assets
Deferred tax assets (NZ entity)
Right of use asset
Total Assets
Trade and other payables
Other liabilities
Current tax
Provisions
Lease liability
Total Liabilities
Net Assets
2022
$’000
(2,328)
(1,878)
(4,929)
(36,667)
(1,435)
(3,122)
(25,193)
(15,085)
(1,208)
(30,744)
(122,589)
657
1,640
215
11,762
56,447
70,721
(51,868)
(d) Other receivables in relation to the sale of the Trailer Solutions business
The consolidated statement of financial position at 30 June 2022 includes a receivable (recognised within trade and other receivables) of $2.5m in relation
to the completion accounts process between MaxiPARTS and ATSG. The receivable is in dispute with ATSG and is currently going through the dispute
resolution process available under the Asset Sale Agreement. An independent accountant has been appointed to determine the validity of the disputed
amount, and the Group expects this process to be concluded early in the first half of financial year ending 30 June 2023.
The consolidated statement of financial position at 30 June 2022 includes a deferred consideration receivable (recognised within financial assets) from
ATSG for $4.0m, the receivable has a maximum term of two years from the completion date of 31 August 2021, with interest chargeable at 3% pa for
the first 6 months, 5% pa for the next 6 months and 8% pa thereafter.
73
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
25. DISCONTINUED OPERATIONS continued
(e) Other liabilities or contingent liabilities related to the sale of the Trailer Solutions business
ATSG assumed all liabilities of the Trailer Solutions business with the exception of Trade Creditors which have subsequently been paid by the Group, and
a cap limiting the amount of Customer Warranties exposure to ATSG to $2.35m. The Group has also taken up an additional Customer Warranty provision
of $2.0m to account in FY22, effectively taking the total expected warranty expenditure to $4.35m. The additional provision is reported in the results of
discontinued operations for the period, and the amount was estimated based on analysis of the Trailer warranty expenditure incurred to date and applying
the expenditure profile to the Trailers for the remaining warranty period.
The Asset Sale Agreement for the sale of the Trailer Solutions business also included the customary warranties and indemnities, which are subject to usual
limitations. The Group’s liability for claims under the warranties is capped at the purchase price.
26. BUSINESS COMBINATION
On 21 February 2022, the Group acquired the inventory and assets of Truckzone Pty Ltd for a total cash consideration of $18.2m.
Included in the identifiable assets and liabilities acquired at the date of acquisition are inputs (a head office, fixed assets, inventory, and an established
customer base), processes and an organised workforce. The Group has determined that together the acquired inputs and processes significantly contribute
to the ability to create revenue, the Group has concluded that the acquired set is a business.
The Truckzone assets will be consolidated into the MaxiPARTS CGU and operating segment. The core business of the acquired assets of commercial
Truck and Trailer parts is the same core business as MaxiPARTS; post acquisition, the Truckzone operations have been quickly integrated into the greater
MaxiPARTS Group, this includes consolidation of the management structure, optimisation of the site network, including the consolidation of one store within
the Melbourne region, with two more stores to be consolidated in early FY23, and the amalgamation of the business onto the MaxiPARTS ERP and joining
of purchasing and shared services functions. Furthermore, the Group has initiated several cost and revenue synergy projects.
To this point the Group sees it as impracticable to report the amounts of revenue and profit or loss of the acquired stand‑alone Truckzone business since
the acquisition date or the annualised contribution of the Truckzone Group of assets and not representative of the combined value in integrating the Truckzone
assets into the consolidated Group. As an indicative amount, the Group estimates that Truckzone contributed $13m‑$14m in revenue for the part period since
acquisition and the profit contribution was negligible.
(a) Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired, and liabilities assumed at the date of acquisition.
Property, plant and equipment
Inventories
Right to Use Asset
Deferred Tax Assets
Lease Liability
Employee Entitlements
Net Assets
2022
$’000
1,606
15,819
9,727
227
(9,727)
(757)
16,895
The fair value of material assets acquired are measured consistent with the Group’s accounting policies detailed in note 1 statement of significant accounting policies.
(b) Goodwill
Goodwill arising from the acquisition of Truckzone is as follows:
Consideration transferred
Fair value of identifiable net assets
Goodwill
74
MaxiPARTS Limited
2022
$’000
18,288
16,895
1,393
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements continued
For the year ended 30 June 2022
The goodwill is attributable mainly to the skills and technical talent of Truckzone’s work force and the synergies expected to be achieved from integrating
the company into the Group’s existing business. None of the goodwill recognised is expected to be deductible for tax purposes.
27. STANDARDS ISSUED BUT NOT YET EFFECTIVE
A number of new standards are effective for annual reporting periods beginning after 1 July 2022 and earlier application is permitted; the following amended
standards and interpretations have not been early adopted by the Group and are not expected to have a significant impact on the Group’s consolidated
financial statements.
(a) Business Combinations (Amendments to AASB 3)
This amendment updates the reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business
combinations.
(b) Financial Instruments (Amendments to AASB 9)
This amendment clarifies that – for the purpose of performing the ‘10 per cent test’ for derecognition of financial liabilities – in determining those fees
paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either
the borrower or lender on the other’s behalf.
(c) Property, Plant and Equipment (Amendments to AASB 116)
This amendment requires an entity to recognise the sales proceeds from selling items produced while preparing property, plant and equipment for its
intended use and the related cost in profit or loss, instead of deducting the amounts received from the cost of the asset.
(d) Provisions, Contingent Liabilities and Contingent Assets (Amendments to AASB 137)
This amendment requires an entity to specify the costs that are included when assessing whether a contract will be loss‑making.
(e) Other standards
The following new and amendment standards are not expected to have a significant impact on the Group’s consolidated financial statements.
• Presentation of Financial Statements (Amendments to AASB 101)
• Classification of debt with covenants (Amendments to AASB 101)
• Classification of Liabilities as Current or Non‑current (Amendments to AASB 101)
• AASB 17 Insurance Contracts and amendments to AASB 17 Insurance Contracts
• Amendments on accounting policy disclosures (Amendments to AASB 101)
• Recognising deferred tax on leases (Amendments to AASB 12)
28. EVENTS SUBSEQUENT TO BALANCE DATE
Apart from the dividend declared, 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 2022.
75
ANNUAL REPORT 2022 Independent Auditor’s Report
For the year ended 30 June 2022
Independent Auditor’s Report
To the shareholders of MaxiPARTS Limited
Report on the audit of the Financial Report - Reissued
Opinion
We have audited the Financial Report -
Reissued of MaxiPARTS Limited (the
Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
•
•
its
giving a true and fair view of the
Group's financial position as at 30
financial
June 2022 and of
performance for the year ended on
that date; and
complying with Australian Accounting
the Corporations
Standards and
Regulations 2001.
Basis for opinion
The Financial Report – Reissued comprises:
• Consolidated statement of financial position as at
30 June 2022;
• Consolidated statement of profit or
loss and
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; and
• 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.
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 (including Independence Standards) (the Code) that are relevant to our audit of the Financial
Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation
76
MaxiPARTS Limited
Independent Auditor’s Report continued
Emphasis of matter – Re-issuance of the Financial Report and Report of the Directors, including
Remuneration Report
We draw attention to Note 1 of the Financial Report – Reissued which describes that Directors have
amended and reissued the previously issued Financial Report due to the correction of an error in that
Financial Report and the Report of the Directors, including Remuneration Report. As a consequence, this
Auditor’s Report supersedes our previous Independent Auditor’s Report to the shareholders of MaxiPARTS
Limited dated 18 August 2022 on the Financial Report and the Remuneration Report for the year ended 30
June 2022, signed and approved by the Directors on 18 August 2022. Our opinion on the Financial Report
is not modified in respect of this matter.
Key Audit Matters
The Key Audit Matters we identified
are:
• Sale of Trailer Solutions business
and Ballarat, Derrimut and Hallam
properties; and
• Business combination.
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.
These matters were 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 these
matters.
Sale of Trailer Solutions business and Ballarat, Derrimut and Hallam properties (Loss on sale of
discontinued operations ($3,623k) and gain on sale of land and buildings ($306k))
Refer to Note 25 Discontinued Operations
The key audit matter
How the matter was addressed in our audit
The sale of the Trailer Solutions business and
Ballarat, Derrimut and Hallam properties is a
key audit matter due to:
•
•
sale being
the
the
understanding of the financial performance
and financial position of the Group; and
significant
to
the size of the loss on sale of discontinued
operations.
These factors and the complexity of the
disposal accounting required significant audit
effort and involvement of senior audit team
members,
in
assessing this key audit matter.
including our
specialists,
Our procedures included:
• We read the terms of the underlying transaction
terms and
to understand
the
agreements
conditions of the disposals.
• We evaluated the substance of the sale using the
terms and conditions of the underlying transaction
agreements against the criteria for discontinued
operations in accounting standards.
• We assessed
if
the purchase consideration
recognised by the Group had been recognised in
accordance with the terms and conditions of the
underlying
the
requirements of the accounting standards.
transaction agreements and
• We assessed whether the Group accurately
determined the value of assets and liabilities
derecognised as at the date of sale and whether
the operating result to the point of sale was
77
ANNUAL REPORT 2022
Independent Auditor’s Report continued
correctly recorded.
• We read and considered available information in
connection with the completion accounts process
and challenged management on the recoverability
of amounts receivable from the vendor that is
currently going through the dispute resolution
process.
• We checked the loss on sale of discontinued
operations by re-performing a comparison of the
carrying value of the attributed disposal assets and
liabilities from the trial balance amounts to the
consideration recognised.
• With the assistance of our taxation specialists, we
evaluated the associated tax implications of the
sale against the requirements of the tax legislation.
• We evaluated
including
the disclosures
the
presentation as a ‘discontinued operation’ against
the requirements of the accounting standards. We
challenged the inclusion or not of amounts using
their features and their role in the continuing
business.
Business combination (Goodwill ($1,393k) and Identifiable net assets acquired ($16,895k))
Refer to Note 26 Business combination
The key audit matter
How the matter was addressed in our audit
Our procedures included:
• We read the underlying transaction agreement
related to the acquisition to understand the
structure, key terms and conditions and nature of
the purchase consideration.
• We evaluated the acquisition accounting against the
requirements of the accounting standards.
• We evaluated the accounting treatment of the
purchase consideration against the criteria in the
accounting standards.
• We evaluated
the Group’s assessment of
identifiable intangible assets, using due diligence
information and our knowledge of the industry.
• We evaluated the Group’s fair value adjustments to
tangible assets acquired and liabilities assumed by
information,
checking these to due diligence
contracts, board papers, subsequent transactions
and our knowledge of the industry.
The acquisition of the inventory and assets of
for consideration of
Truckzone Pty Ltd
$18,288k and accounted for as a business
combination is a key audit matter due to the:
•
•
size of the acquisition having a significant
impact
financial
statements; and
the Group’s
on
significant
judgement required to be
exercised by us in assessing the Group’s
accounting for the acquisition, including:
-
-
identification
the
intangible assets; and
of
acquired
fair value of tangible assets acquired
and liabilities assumed.
These factors and the complexity of the
acquisition accounting required significant
audit effort and involvement of senior audit
team members in assessing this key audit
78
MaxiPARTS Limited
Independent Auditor’s Report continued
matter.
Other Information
• We recalculated the goodwill balance recognised as
a result of the transaction and compared it to the
goodwill amount recorded by the Group.
• We assessed the Group’s disclosures in relation to
the business acquisition, by comparing these
disclosures to our understanding from our testing
and the requirements of the accounting standards.
Other Information is financial and non-financial information in MaxiPARTS 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 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; and
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.
79
ANNUAL REPORT 2022
Independent Auditor’s Report continued
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our Auditor’s Report.
Report on the Remuneration Report – Re-issued
Opinion
Directors’ responsibilities
In our opinion, the Remuneration
Report – Re-issued of MaxiPARTS
Limited
the
30 June 2022, complies with Section
300A of the Corporations Act 2001.
year
for
ended
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report -Re-
issued in accordance with Section 300A of the Corporations Act
2001.
Our responsibilities
We have audited the Remuneration Report – Re-issued
included in pages 8 to 12 of the Report of the Directors – re-
issued for the year ended 30 June 2022.
Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Emphasis of matter – Re-issuance of the Financial Report and Report of the Directors, including
Remuneration Report
We draw attention to pages 1 and 8 of the Report of the Directors – re-issued, including Remuneration
Report – Re-issued which describes that Directors have amended and reissued the previously issued Report
of the Directors, including Remuneration Report due to the correction of an error in those reports and the
Financial Report. As a consequence, this Auditor’s Report supersedes our previous Independent Auditor’s
Report to the shareholders of MaxiPARTS Limited dated 18 August 2022 on the Financial Report and the
Remuneration Report for the year ended 30 June 2022, signed and approved by the Directors on 18 August
2022. Our opinion on the Remuneration Report is not modified in respect of this matter.
KPMG
Vicky Carlson
Partner
Melbourne
2 September 2022
80
MaxiPARTS Limited
Australian Stock Exchange Additional Information
For the year ended 30 June 2022
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report.
Shareholdings
Substantial shareholders
The names of Company’s substantial shareholders and the number of shares in which each has a relevant interest, as disclosed in substantial holding notices
received by the Company as at 31 July 2022 are:
Ordinary
Shares
8,801,348
5,717,447
5,052,371
4,805,976
% of units
18.6%
12.1%
10.7%
10.1%
Naos Asset Management Ltd
James Curtis
HGT Investments Pty Ltd
Spheria Asset Management Pty Limited
Voting rights
As at 31 July 2022, there were 2,727 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 2022, there 85,682 unissued ordinary shares of the Company relating to vested Performance Rights.
Distribution of shareholders
As at 31 July 2022
Category – no. of shares
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – over
Total
No. of
shareholders
1,139
966
258
329
35
Units
466,361
2,477,899
1,890,072
8,683,359
33,879,291
% of issued
capital
1.0%
5.2%
4.0%
18.3%
71.5%
2,727
47,396,982
100.0%
Shareholders with less than a marketable parcel
As at 31 July 2022, there were 436 shareholders holding less than a marketable parcel of 233 ordinary shares (based on the closing share price of $2.15 on
31 July 2022) in the Company totalling 45,282 ordinary shares.
On market buy‑back
There is no current on‑market buy‑back.
81
ANNUAL REPORT 2022 Australian Stock Exchange Additional Information continued
TWENTY LARGEST SHAREHOLDERS – ORDINARY SHARES AS AT 31 JULY 2022
Name
Units
% of Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
NATIONAL NOMINEES LIMITED
HGT INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
TRANSCAP PTY LTD
ANACACIA PTY LTD
Continue reading text version or see original annual report in PDF format above