2023 Annual Report
2023 Annual Report Contents
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CONTENTS
Our Year in Review
Chair and CEO Report
Management Summary
New Zealand and Australian Market Review
Board of Directors
Senior Leadership Team
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Independent Auditor’s Report
Corporate Governance
Remuneration Report
Statutory Information
Company Directory
OUR YEAR
$186.7m
$76.8m
+5%
+32%
NEW ZEALAND
REVENUE
$6.4m (-14%)
EBIT1
AUSTRALIAN GLASS
GROUP REVENUE
$6.4m +$6.7m
EBIT
$263.5m
GROUP REVENUE
(FY22: $236.1m )
$11.8m
$60.1m
Group EBIT1
(FY22: $5.9m)
Net Debt
(FY22: $52.3m)
3.2x
Leverage Ratio2
(FY22: 3.8x)
$6.4m
Capex
(FY22: $11.9m)
2
1 Earnings before interest, tax and significant items
2 Net debt to EBITDA, measured on a pre-IFRS-16 basis
2023 Annual Report Our Year in Review
IN REVIEW
+31%
AUSTRALIAN GLASS GROUP
DOUBLE GLAZING SALES
GROWTH
Customer survey results show
sustained satisfaction1
7.3
7.6
7.3
7.9
7.8
8.1
7.9
7.9
8.0
8.0
8.1
7.7
7.8
7.7
7.7
8.0
JUN
2019
NOV
2019
JUN
2020
NOV
2020
MAY
2021
DEC
2021
MAY
2022
NOV
2022
JUN
2019
NOV
2019
JUN
2020
NOV
2020
MAY
2021
DEC
2021
MAY
2022
NOV
2022
New Zealand
Australian Glass Group
1 Survey question: “On a scale of 1 to 10, how likely are you to recommend Metroglass to a friend or colleague?”
3
CHAIR
AND CEO
REPORT
PETER GRIFFITHS
Chair
SIMON MANDER
CEO
margin improvements and cost saving
initiatives bolstered the New Zealand
business. Group EBIT before significant
items rose 100% to $11.8 million.
Net debt increased from $52.3 million to
$60.1 million at 31 March 2023, reflecting
the higher value of inventory and trade
receivables, a greater stock quantity on
hand to cover the lack of reliability in the
supply chain and the increased working
capital requirements to support the
growth in the AGG business.
Positioning New Zealand for
a changing market
The business made good progress to
address the inflationary pressures and
supply chain volatility. While the challenges
are expected to continue, our focus
remains firmly on operational efficiency
and positioning the company to meet the
needs of a changing market dynamic.
In the year, we reset the business
structure; ceasing manufacturing at
the Bay of Plenty plant, corporate
restructuring and reducing headcount.
These changes will achieve annual
savings of $8.0 to $9.0 million in FY24.
Gross profit margin has progressively
recovered through quarter four as supply
chain disruption reduced, international
freight costs began to ease and cost-out
initiatives were implemented.
Our investments to increase furnacing
capacity ‘debottlenecked’ our
manufacturing network, increased
capability for processing Low Emissivity
(Low E) glass and improved quality. We also
launched a first for the residential market
product, SunX™ Grey, which is the latest
in solar control technology. These positive
steps will satisfy the growing demand for
high-performing Low E glass in line with the
H1 building code changes which apply now.
Australian Glass Group (AGG)
turnaround and the decision
to explore divestment
In FY23 AGG has performed well, even
with disruptions to supply chains and
labour availability. AGG’s improved
profitability delivered a 32% increase
in revenue to $76.8 million and EBIT of
$6.4 million, an improvement of $6.7 million
on the prior year.
The last year was yet
another challenging one
for the Metro Performance
Glass Group.
The New Zealand supply chain continued
to be disrupted by the flow-on effects
of the pandemic, cost inflation appeared,
and the early signs of a construction
sector down-turn became apparent.
The New Zealand business took a series
of actions to manage these challenges.
Australian Glass Group (AGG) delivered
a milestone year, achieving revenue
growth and a return to profitability.
The focus for both businesses remains
on supporting customers by delivering
quality products that meet the changing
requirements of the market and the
increasing need for high-performing glass.
Financial performance
Group revenue for the year to 31 March
2023 of $263.5 million was 12% higher than
the prior year, supported by 32% growth in
Australia and a modest 5% in New Zealand.
Operational and financial performance
in AGG supported the significant increase
in profitability this year, as progressive
4
2023 Annual Report The FY23 result is a positive payback for
consistent operational stability. Customers
have remained supportive, the Australian
construction sector has strengthened
and AGG’s domestic raw material supply
was able to recover quickly from disruption.
Marked improvements in market pricing
offset inflationary pressures, which
also reflected the increased need for
high-performing double glazing in the
Australian markets.
In February 2023 Metroglass announced
its intention to explore divestment options
for the Australian business. This process
continues to progress and is expected to
take a number of months.
AGG has solid fundamentals and a strong
growth plan that leverages the adoption
of double glazing in the south-east of
Australia in line with National Construction
Code changes. As AGG enters the next
phase of its growth strategy and serving
increasing demand for double glazing
across the Australian residential market, it
is now an appropriate time to consider the
options for this business.
The proceeds from any transaction will be
directed towards the reduction of debt.
Metroglass is targeting a leverage ratio of
1.0x net debt to EBITDA. This net debt level
will significantly improve the resilience of
the New Zealand business as it manages
the dynamics of a changing cycle.
Capital management
Metroglass’ net debt increased by $7.8 million
to $60.1 million during the year, driven by
working capital. Its net debt to EBITDA (on
a pre-IFRS 16 basis) ratio decreased to
3.2x at 31 March 2023 from 3.8x.
Working capital grew by 22% to $43.2
million at 31 March 2023. This was the
result of higher-value inventory and
trade receivables, a greater safety stock
quantity on hand and the working capital
requirements of a growing business in AGG.
Metroglass has begun to reduce working
capital commitments in line with the
improving reliability of the international
supply chain and this is expected to
materially reduce working capital
requirements through the first half
of FY24.
During the year, Metroglass concluded an
extension of its current syndicated banking
facilities out to the end of October 2024
(previously October 2023).
Chair and CEO Report
An improvement in the financial
performance of the New Zealand business
in the first half of FY24, an unwinding
of working capital and a continued
contribution from AGG will allow for
a meaningful reduction in net debt in the
first half of FY24. Net debt is expected
to be below $55.0 million at the half year.
As announced in March 2023, for the
12 months to 31 March 2024 management
forecasts are for AGG to achieve revenue,
EBITDA and EBIT of approximately
AUD 79.0 million, AUD 11.5 million and
AUD 7.5 million1 respectively.
Despite the signalled declines in economic
conditions, Metroglass continues to
operate well, and through a combination
of the price increases to recover rising
input costs, cost-saving initiatives and
building code changes that will support
sales of higher-value products, Metroglass
is well positioned to continue improving
its performance.
To conclude, we’d like to take this
opportunity, on behalf of the board and
management team, to thank our employees,
customers, suppliers and shareholders for
their continued commitment and support.
PETER GRIFFITHS
Metro Performance Glass Chair
SIMON MANDER
Metro Performance Glass
Chief Executive Officer
Market outlook
The 12-month rolling number of residential
consents issued in New Zealand has
declined from its peak through the first
quarter of 2023. Activity levels in the
beginning of FY24 have remained within
expectations and customers continue
to indicate a stable pipeline of work in
the near term. However, the economic
outlook presents significant uncertainty
for the number of consents issued and the
dwellings ultimately constructed in FY24.
As a consequence of the forecasted
lower construction activity, a review of
the carrying values of Metroglass’ assets
resulted in a $10.0 million impairment
on New Zealand goodwill, which initially
arose from acquisitions completed in 2012
(pre-IPO). This non-cash charge has no
impact on the company’s bank covenants
and is presented as a significant item in
the FY23 financial statements.
As international freight costs and
disruption moderate through the next
six months, combined with the increasing
demand for Low E products driven by the
new H1 building code, the level of financial
performance in the first half of FY24 in
New Zealand is expected to be better
than the prior comparable period.
Economic headwinds from inflation,
lower house prices and other external
pressures are likely to accelerate the
decline in building activity through the
second half of FY24. Metroglass continues
to monitor a range of scenarios and has
appropriate plans to continue to improve
the profitability of the New Zealand
business. The cost-out programme and
restructuring of the New Zealand business
announced in November 2022 will continue,
delivering operational and financial benefits
throughout FY24.
The focus for both businesses
remains on supporting
customers by delivering quality
products that meet the
changing needs of the market
and the increasing need for
high-performing glass.
1 Excluding Group Management fee of NZD 0.5 million.
5
MA NAGEM ENT
SU MM ARY
Metroglass is the
largest glass processor
in New Zealand and
operates a diversified
channel strategy across
residential, commercial
glazing and retrofit.
In FY23 the Group made positive steps
forward. The capital invested in furnace and
glass-processing improvements positions
the business well ahead of supportive
regulatory changes in both countries,
we have begun to progressively recover
margins as the elevated freight cost and
supply chain disruption eases, and we
restructured the New Zealand business as
the market dynamic changes.
Group revenue of $263.5 million was an
increase of 12% over the prior comparable
period and Group EBIT2 increased 100%
to $11.8 million.
The carrying values of the company’s
intangible assets were reviewed in
the context of a declining outlook on
construction activity and resulted in a
$10.0 million impairment to New Zealand
goodwill, which initially arose from
acquisitions completed in 2012 (pre-IPO).
This non-cash charge has no impact on the
company’s bank covenants and is presented
as a significant item in the FY23 financial
statements. As a result, statutory net loss
after tax (NLAT) was $(10.5) million.
2 Earnings before interest, tax and significant items
6
2023 Annual Report Management Summary
Good progress was made on customer-
focused initiatives during the year. Our
collaborative efforts with customers
to remain connected and support our
integrated supply chains were positive.
While Metroglass experienced some
service performance challenges, the most
recent customer survey in November 2022
continued to reflect strong results with
the New Zealand business achieving 7.9/10
and AGG 8.0/10.
The safety of our teams is paramount and
underlines our efforts to ensure our people
are staying safe and living well. Our multi-year
safety and wellbeing programme continues to
make good progress and achieved
improvements in safety performance in FY23.
For the New Zealand business, there were the
Total Recordable Injury Frequency Rate
(TRIFR) reducing to 2.5 in FY23, from 5.5 in
the prior year. While we will continue to drive
this number lower, we are pleased that the
improvements in tools, processes and
systems are having positive effects on
our people.
The labour market remains tight in both
New Zealand and Australia. We continue
to emphasise our internal training and
apprenticeship programme to build
capability and provide opportunities for
our people to grow and this is developing a
strong pipeline of senior leaders within the
business. We continue to see ongoing skill
development with 20 apprentices qualifying
this year.
12%
$263.5m
$236.1m
Group revenue by segment
5%
6%
10%
(5%)
$115.6m
$122.2m
$33.5m $36.9m
$28.9m $27.6m
32%
$76.8m
$58.1m
Residential NZ
Commercial
Glazing NZ
Retro NZ
Australian Glass Group
Total group revenue
FY22
FY23
Group EBIT
New Zealand
Australia
Other
5.9
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7
New Zealand segmental review
The New Zealand business delivered
revenue of $186.7 million, up 5%, primarily
as a result of the additional trading days
and steady operational execution of its
forward work.
In the residential segment, revenue
of $122.2 million was 6% above the
prior year. Commercial glazing activity
remained resilient as revenue rose 10%
to $36.9 million; however, profit margins
in fixed-price contracts were impacted by
rising glass costs. After consecutive years
of growth retrofit revenue declined 5%
to $27.6 million as homeowners reassessed
household spending.
In the Highbrook and Christchurch
plants, we commissioned furnaces to
‘debottleneck’ production capacity
and enhance our capabilities in the
processing of high-performing Low E glass.
As dwellings under the new H1 changes
begin to be built we expect the proportion
of Low E in our sales mix to significantly
increase and our investments ensure we
can satisfy this demand.
The business has begun its recovery
of gross margin and working capital
reductions as supply chain disruptions and
rising input costs abate. Price increases
introduced in FY23 partially offset elevated
input costs and progressively improved
gross margins. This is expected to continue
through the first half of FY24.
Completion of the cost-out programme
at the end of 2022 delivered incremental
cost savings in factory costs (gross profit),
administration expenses and distribution
and glazing costs. Annualised savings of
$8.0 million to $9.0 million are expected
in FY24. Overall, EBIT of $6.4 million was
down 14% compared to the prior year.
NZ revenue
$186.7m
+5%
NZ EBIT
$6.4m
(-14%)
8
2023 Annual Report New Zealand and Australian Market Review
Australian Glass Group (AGG)
review
AGG successfully delivered its turnaround
with stable operating performance and a
significant improvement in market pricing,
despite ongoing disruptions and cost
inflation. EBIT of $6.4 million reflects an
improvement of $6.7 million year-on-year.
This was supported by the increase in
revenue and gross profit margin, partially
offset by an increase in variable costs to
service the growth in demand.
Throughout the year, market conditions
have remained positive in the construction
sector and AGG’s reputation as a
specialised high-performance double-
glazing processor continues to strengthen.
As operational performance continues
to improve and disruptions to supply and
resource availability abate, AGG is well
prepared for further growth as double-
glazing adoption increases with the
National Construction Code (NCC) changes.
The NCC changes in energy efficiency will
impact AGG and the Australian glazing
industry. This amendment increases the
thermal performance requirements for
new residential buildings and will result
in a minimum standard of double glazing in
colder climate zones, for example Canberra,
the majority of Victoria and all of Tasmania.
Currently compliance with the industry
standard and construction code is satisfied
through single-glazed windows. In addition,
where standard aluminium frames are used
in colder climates (which is the majority of
our market), there will be higher demand in
more advanced high Low E double glazing.
9
AGG revenue
$76.8m
+32%
AGG EBIT
$6.4m
+$6.7m compared
to prior year
BOARD O F
DIRECTO R S
PETER GRIFFITHS
Independent, Non-Executive Chair
and Member of the People and
Culture Committee
Appointed: September 2016
After a career in the energy industry
Peter has become a professional
director. His last executive position
was as Managing Director of BP Oil
New Zealand, retiring in 2009. He has
previously served on a number of boards
including Z Energy, Marsden Maritime
Holdings, The New Zealand Refining
Company, and New Zealand Oil and Gas.
He is also Chair of the New Zealand
Business and Parliament Trust and has
private interests in general aviation.
Peter holds a Bachelor of Science
(Honours) from Victoria University
of Wellington.
JULIA MAYNE
Independent, Non-Executive Director,
Member of the Audit and Risk Committee
JENN BESTWICK
Independent, Non-Executive Director,
Member of the Audit and Risk Committee
Appointed: September 2021
Appointed: May 2022
Julia is Sydney based and is currently the
Head of Commercial at Scottish Pacific
Business Finance. Prior to this, she
completed several consulting, programme
management and Acting CEO roles
focused on business improvement. From
2001 to 2015, Julia held senior financial
leadership positions across the Fletcher
Building Group, including the roles of
General Manager Finance – Building
Products division, the CFO of the Crane
Division, and Divisional Finance Manager
– Stramit Building Products. Julia is a
qualified CPA, has a CPA MBA from Deakin
University, a Bachelor of Commerce
(Honours) from the University of NSW
and a Bachelor of Commerce from the
University of Wollongong.
Jenn’s background is in strategy and
organisational performance and she
has previously held a number of senior
management roles and performed
various reviews for government agencies.
Jenn currently works across sectors
as diverse as science and Innovation,
education, tourism, engineering and
environment. She is also the Chair
of Tonkin + Taylor Group Limited, Chair
of the Tertiary Education Commission,
and holds directorships for Invercargill
City Holdings Limited and Antarctica
New Zealand. Jenn has a Bachelor of
Laws from the University of Nottingham,
UK, and is a Member of the Institute
of Directors.
10
2023 Annual Report Board of Directors
RHYS JONES
Independent, Non-Executive
Director, Member of the People
and Culture Committee
Appointed: April 2018
Rhys has had a 30-year career working
in the Australasian building material and
packaging industries. He is currently the
Managing Director and CEO of Vulcan
Steel Limited, a dual-listed trans-
Tasman steel distributor with over 30
business units across Australasia. He
is also a director of Carbine Aginvest
Corporation Limited (formally Tru-
Test Corporation Limited) and Ridley
Corporation Limited. Prior to joining
Vulcan Steel in 2006, Rhys has held
senior roles, in particular with Carter
Holt Harvey Ltd and Fletcher Challenge,
including as Chief Operating Officer of
the Pulp, Paper and Packaging business
of Carter Holt Harvey. He holds a Master
of Business Studies from Massey
University and a Bachelor of Science
from Victoria University of Wellington.
GRAHAM STUART
Independent, Non-Executive Director,
Chair of the Audit and Risk Committee
Appointed: December 2019
Graham has over 30 years’ experience in
senior executive and governance roles
in New Zealand and internationally. He
was previously the CEO of Sealord Group
from 2007 to 2014 and prior to that was
CFO and Director of Strategy with the
Fonterra Co-operative Group from 2001
to 2007. Graham is the Chair of EROAD
Limited, an independent director and
Chair of the audit committee of Tower
Limited and independent director and
Chair of Northwest Healthcare Property
Management Limited. He is a Fellow
of Chartered Accountants Australia
& New Zealand. Graham has a Master
of Science from Massachusetts Institute
of Technology and a Bachelor of Commerce
from the University of Otago.
MARK EGLINTON
Independent, Non-Executive
Director, Chair of the People
and Culture Committee
Appointed: April 2020
Mark is currently the Group CEO and
a director of NDA Group, a leading
international engineering and fabrication
business. Prior to this, he was the CEO
of Tenon Limited (NZX listed at that time)
from 2005 to 2009 and held several senior
positions with Fletcher Building, including
the role of Managing Director of Fletcher
Aluminium & Plyco Doors from 1999 to
2001. Mark has a Bachelor of Commerce
and a Bachelor of Laws from the University
of Otago.
11
SEN IOR
LEA DERSHIP
TEA M
12
2023 Annual Report SIMON MANDER
Chief Executive Officer
Simon has broad leadership expertise at
senior levels across industries ranging
from ag-tech, building products, to
flexible and fibre-based packaging.
During Simon’s career, he has specialised
in performance improvement, as well as
in strategy development and execution.
He has worked internationally in a
number of industries and has recent
experience in the New Zealand and
Australian building products market.
Simon joined Metroglass from Tru-Test
Corporation Limited, a world-leading
New Zealand-based ag-tech company
where he was CEO. Prior roles have been
with well-known companies such as
Fletcher Building, DS Smith, Carter Holt
Harvey, Partners in Performance, Lion
Nathan and McKinsey. He was also a
director of NZX-listed Wellington Drive
Technologies for 10 years.
Simon has a trade background in aircraft
engineering and holds a Bachelor of
Engineering (Mech) from the University
of Auckland. In addition, he represented
New Zealand in yachting on a number of
occasions including in the International
470 class at the 1988 Olympic Games.
BRENT MEALINGS
Chief Financial Officer
Brent was appointed as Chief Financial
Officer in January 2020. He joined Metroglass
following a 17-year career with Fonterra
Co-operative Group where he held various
leadership positions, most recently Director
Commercial Global Operations. Prior to
Fonterra Brent worked within New Zealand
and internationally in other industries
including brewing, management consulting,
electricity generation and gold mining.
Brent is a Chartered Accountant and holds
a Master of Business Administration from
the University of Canterbury.
ROBYN GIBBARD
General Manager
Upper North Island
Robyn leads the Upper North Island region
for Metroglass and has worked in the
business for more than 20 years. She has
previously led Metroglass’ sales force
nationally and held many customer-facing
roles across commercial glazing, branch
management and sales management.
ANDREAS PAXIE
General Manager
Lower North Island
Andreas leads the Lower North Island
region and joined the company in March
2022. He has a strong background in
commercial sales, project management and
general management across a wide variety
of industries and was most recently
National Sales Manager for Securely and
General Manager for the Lower North
Island for Wormald. Andreas has also been
a senior leader for a diverse range of
other companies including IBM, Pacific
Wallcoverings and ACCO brands.
He holds a Bachelor of Technology
(Operations Research) from Massey
University, and a postgraduate Diploma in
Business from Henley Management College.
NICK HARDY-JONES
General Manager South Island
Nick leads the South Island region for
Metroglass and has been with the company
since 2016. He previously spent five years
in leadership roles within Metroglass’ South
Island Commercial and Glazing businesses.
Prior to working in the glass industry,
Nick held category, product and sales
management roles within the commercial
and residential roofing and cladding
industries.
He holds a Bachelor of Commerce from the
University of Canterbury.
AMANDEEP KAUR
Group Safety and Wellbeing Manager
Amandeep leads Group Health and Safety
across both our New Zealand and
Australian businesses, responsible for
the development and implementation of
our health and safety strategy. She
brings with her a wealth of experience,
with strengths in creating and
implementing a high-performing safety
culture. Before joining the company,
Amandeep held senior health and safety
roles at Harrison Grierson, Sinclair
Knight Merz, and Compass Group, after
starting her career in quality assurance
with Nestlé, Frucor and Real Foods.
Amandeep holds a Master in Food
Science Technology as well as a
Graduate Diploma in Occupational
Health and Safety.
Senior Leadership Team
DAYNA ROBERTS
Human Resources Director
Dayna leads Metroglass’ Human Resources
team nationally. She has over 10 years’
experience in HR, Talent and Recruitment,
spending eight years at Fletcher Building
before commencing with Metroglass.
Dayna holds a Bachelor of Business in
Marketing and Management and a
New Zealand Diploma in Business from
the Auckland University of Technology.
RUBEN FERGUSON
General Manager – Market Strategy
Ruben leads Metroglass’ Marketing,
National Sales and Technical teams and
has been with the company since 2019.
He joined Metroglass from Fletcher
Building, where he held a variety of roles
ranging from commercial finance, business
Transformation, through to national sales
and distribution leadership.
Earlier in his career, Ruben gained
commercial finance experience in the media
industry, leading project
development throughout New Zealand,
the UK and China.
Ruben holds a Bachelor of Commerce
from the University of Otago.
13
Non-GA AP Fina ncia l Informat i o n
NON-GAAP FINANCIAL INFORMATION
Metroglass’ standard profit measure prepared under New Zealand Generally Accepted Accounting Practice (GAAP) is profit for the
period, or net profit after tax. Metroglass has used non-GAAP measures which are not prepared in accordance with New Zealand
International Financial Reporting Standards (NZ IFRS) when discussing financial performance in this document. The directors and
management believe that these non-GAAP financial measures provide useful information to readers to assist in the understanding
of the Group’s financial performance, financial position or returns, and used internally to evaluate the performance of business units
and to establish operational goals. These measures should not be viewed in isolation, nor considered as a substitute for measures
reported in accordance with NZ IFRS. Non-GAAP financial measures may not be comparable to similarly titled amounts reported
by other companies.
Definitions of non-GAAP financial measures used in this report:
* EBITDA: Earnings before interest, tax, depreciation and amortisation.
* NPATA: Profit for the Period before the amortisation of acquisition-related intangibles and its associated tax effect.
GAAP TO NON-GAAP RECONCILIATION
Full year to 31 March
Profit for the period before significant items
Less: Impairment of intangible assets
Less: NZ restructuring, and Australian divestment
Profit for the period (GAAP)
Add: taxation expense
Add: net finance expense
Earnings before interest and tax (EBIT) (GAAP)
Add: depreciation & amortisation
EBITDA
EBIT (GAAP)
Add: Impairment of intangible assets
Add: NZ restructuring, and Australian divestment
EBIT before significant items
EBITDA
Add: Impairment of intangible assets
Add: NZ restructuring, and Australian divestment
EBITDA before significant items
Profit for the period (GAAP)
Add back: amortisation of acquisition-related intangibles and its associated tax effect
NPATA
FY22
($M)
1.5
(10.0)
(2.0)
(10.5)
(0.0)
10.3
(0.2)
19.0
18.7
(0.2)
10.0
2.0
11.8
18.7
10.0
2.0
30.7
(10.5)
–
(10.5)
FY21
($M)
(0.5)
–
–
(0.5)
0.0
6.3
5.9
18.7
24.6
5.9
–
–
5.9
24.6
–
–
24.6
(0.5)
1.2
0.7
14
OUR
RES ULTS
CONTENTS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
1. Basis of Preparation
2. Financial Performance
3. Working Capital
4. Long-Term Assets
5. Debt and Equity
6. Other
16
17
18
19
21
21
22
26
35
41
45
15
Co nsolidated Stat eme n t of Co m pr ehens i ve Income
for th e ye ar end ed 3 1 Ma rch 2 0 23
Revenue
Cost of sales
Gross profit
Distribution and glazing-related expenses
Selling and marketing expenses
Administration expenses
Share of profits of associate
Other income and gains
Profit before significant items, interest and tax
Significant items
Profit before interest and tax
Finance expense
Finance income
Loss before income taxation
Income tax benefit/(expense)
Loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss in the future:
Exchange differences on translation of foreign operations
Change in fair value of hedging instruments (net of tax)
Total comprehensive loss for the year attributable to shareholders
Earnings per share
Basic and diluted earnings per share (cents per share)
The Board of Directors authorised these financial statements for issue on 14 June 2023.
For and on behalf of the Board:
NOTES
CONSOLIDATED CONSOLIDATED
2023
$'000
263,520
(158,453)
105,067
(47,269)
(12,796)
(33,935)
414
303
11,784
(12,032)
(248)
(10,870)
537
(10,581)
33
(10,548)
(424)
536
(10,436)
2022
$'000
236,063
(142,472)
93,591
(45,441)
(13,160)
(32,446)
–
3,367
5,911
–
5,911
(6,327)
–
(416)
(43)
(459)
(474)
612
(321)
(5.7)
(0.2)
2.1
2.3
2.1
2.3
2.3
2.3
4.4
2.6
2.4
2.7
6.1
3.5
2.5
Peter Griffiths
Chairman
Graham Stuart
Director
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
16
2023 Annual Report Conso lidated St ate me n t of F i n anci a l Pos i ti on
at 3 1 M arc h 2023
NOTES CONSOLIDATED CONSOLIDATED
2023
$'000
2022
$'000
(Restated)1
ASSETS
Current assets
Cash and cash equivalents
Trade receivables
Inventories
Derivative financial instruments
Current income tax asset
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Investment in associate
Financial assets at fair value through profit or loss
Intangible assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Deferred income
Income tax liability
Derivative financial instruments
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Interest-bearing liabilities
Derivative financial instruments
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Group reorganisation reserve
Share-based payments reserve
Foreign currency translation reserve
Hedge reserve
Total equity
1 Certain comparative amounts have been restated; refer note 6.7
3.1
3.2
3.5
3.7
4.1
4.2
6.2
4.4
3.5
4.3
3.7
3.3
3.4
3.5
5.2
3.6
5.1
3.5
5.2
3.6
5.3
6.3
6.3
7,300
38,083
31,826
251
1
3,237
80,698
50,674
65,335
10,398
2,512
–
44,336
650
173,905
254,603
27,208
2,054
–
107
7,452
633
37,454
67,370
–
70,432
3,880
141,682
179,136
75,467
307,198
(61,901)
(170,665)
1,358
(383)
(140)
75,467
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
13,064
35,799
27,402
68
–
2,570
78,903
54,748
70,505
10,965
–
2,098
54,710
1,051
194,077
272,980
30,626
3,450
518
274
6,535
1,920
43,323
65,319
274
74,745
3,790
144,128
187,451
85,529
307,198
(51,735)
(170,665)
1,366
41
(676)
85,529
17
Co nsolidated Stat eme n t of Ch a n ges i n E q uity
for th e ye ar end ed 3 1 Ma rch 2 0 23
CONSOLIDATED 2023
Contributed
equity
$'000
Reserves
$'000
Accumulated
losses
$'000
Notes
Opening balance at 1 April 2022
Loss for the year
Movement in foreign currency translation reserve
Other comprehensive income for the year
Total comprehensive income/(loss) for the year
Expiry of share-based payments
Movement in share-based payments reserve
Total transactions with owners, recognised directly in equity
307,198
(169,934)
–
–
–
–
–
–
–
–
(424)
536
112
(382)
374
(8)
Total
$'000
85,529
10,548)
(424)
536
(51,735)
(10,548)
–
–
(10,548)
(10,436)
382
–
382
–
374
374
Balance at 31 March 2023
307,198
(169,830)
(61,901)
75,467
Opening balance at 1 April 2021
Loss for the year
Movement in foreign currency translation reserve
Other comprehensive income for the year
Total comprehensive income/(loss) for the year
Expiry of share-based payments
Movement in share-based payments reserve
Total transactions with owners, recognised directly in equity
CONSOLIDATED 2022
Contributed
equity
$'000
Reserves
$'000
Accumulated
losses
$'000
Notes
307,198
(170,226)
–
–
–
–
–
–
–
–
(474)
613
139
(295)
448
153
(51,571)
(459)
–
–
(459)
295
–
295
Total
$'000
85,401
(459)
(474)
613
(320)
–
448
448
Balance at 31 March 2022
307,198
(169,934)
(51,735)
85,529
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
18
2023 Annual Report Conso lidated St ate me n t of Ca s h F l ow s
for t he yea r e nd ed 31 Mar ch 2 0 23
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Government wage subsidy and grants received
Repayment of balance due from associate
Interest received
Interest paid
Interest paid on leases
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Payments for property, plant and equipment
Payments for intangible assets
Net cash outflow from investing activities
Cash flows from financing activities
Lease liability principal payments
Drawdown of borrowings (net)
Repayment of other financing
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
CONSOLIDATED CONSOLIDATED
2023
$'000
2022
$'000
259,338
(244,547)
157
850
41
(5,749)
(4,847)
(113)
5,130
528
(6,734)
(76)
(6,282)
(6,873)
3,000
(794)
(4,667)
(5,819)
13,064
55
7,300
235,939
(218,051)
2,470
–
100
(3,448)
(3,139)
(617)
13,254
358
(10,399)
(89)
(10,130)
(6,940)
10,257
(803)
2,514
5,638
7,530
(104)
13,064
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
The table below sets out the annual movement in net debt:
Opening balance of interest-bearing liabilities at 1 April
Drawdown/(repayment) of borrowings (net)
Other financing movement (net)
Foreign exchange and other adjustments
Closing balance of interest-bearing liabilities at 31 March
Less: cash and cash equivalents
Net debt at 31 March
CONSOLIDATED CONSOLIDATED
2023
$'000
65,319
3,000
(794)
(155)
67,370
(7,300)
60,070
2022
$'000
55,519
10,257
(803)
346
65,319
(13,064)
52,255
19
Co nsolidated Stat eme n t of Ca s h F l ow s ( co nti nu e d)
for th e ye ar end ed 3 1 Ma rch 2 0 23
Reconciliation of profit/(loss) after income tax to net cash inflow from operating activities
Loss for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangible assets
Share-based payments expense
COVID-19 rent relief
Gain on disposal of assets
Movement in financial asset at fair value through profit or loss and associated non-cash income
Lease modification
Share of profit from associate
Other
Impact of changes in working capital items
Trade and other receivables
Inventory
Related party receivables
Other current assets
Trade accounts payable and employee entitlements
Deferred income
Interest accruals
Provisions
Movement in deferred tax
Movement in credit loss provision
Income tax liability
Net cash inflow from operating activities
CONSOLIDATED CONSOLIDATED
2023
$'000
2022
$'000
(10,548)
(459)
18,960
10,000
374
–
(146)
–
(1)
(414)
160
18,687
–
448
(138)
(42)
(789)
(222)
–
451
28,933
18,395
(2,942)
(4,477)
353
(623)
(3,277)
(1,396)
(51)
(1,197)
341
559
(545)
(1,262)
(5,073)
–
(293)
1,817
1,375
(69)
195
(751)
(635)
14
(13,255)
(4,682)
5,130
13,254
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
20
2023 Annual Report Notes to the Con sol id at e d Fi n a nc i al St at ement s
1 BASIS OF PREPARATION
Reporting entity
These financial statements are for Metro Performance Glass Limited (‘the Company’ or ‘the parent entity’) and its subsidiaries
(together, ‘the Group’). The Group supplies processed flat glass and related products primarily to the residential and commercial
building sectors.
Statutory base
The Company is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is
5 Lady Fisher Place, East Tamaki, Auckland.
Basis of preparation
These consolidated financial statements have been approved for issue by the Board of Directors on 14 June 2023.
The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice
in New Zealand (NZ GAAP). The Group is a for-profit entity for the purposes of complying with NZ GAAP and has operations and sales
in New Zealand and Australia. The consolidated financial statements comply with New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS), other New Zealand accounting standards and authoritative notices that are applicable to entities that
apply NZ IFRS. The consolidated financial statements also comply with International Financial Reporting Standards (IFRS).
Metro Performance Glass Limited is registered under the New Zealand Companies Act 1993 and is a Financial Market Conduct
reporting entity under Part 7 of the Financial Markets Conduct Act 2013. The financial statements of the Group have been prepared in
accordance with the requirements of the New Zealand Stock Exchange (NZX) Main Board Listing Rules.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial
assets and financial liabilities at fair value.
Principles of consolidation
The financial statements incorporate the assets and liabilities of all subsidiaries of Metro Performance Glass Limited as at
31 March 2023 and the results of all subsidiaries for the year then ended.
Subsidiaries are all entities over which the Group has control. It is a controlled entity of the Group if the Group is exposed and has
a right to variable returns from the entity and is able to use its power over the entity to affect those returns. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated unless the transaction provided evidence of the impairment of the asset transferred.
Goods and Services Tax (GST)
The statement of comprehensive income has been prepared so that all components are stated exclusive of GST. All items in the
statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed in each accounting note as appropriate.
The critical accounting estimates and judgements at 31 March 2023 include:
• economic lives of intangible assets and property, plant and equipment (refer: 4.1 Property, plant and equipment)
• goodwill (refer: 4.3 Intangible assets).
Going concern
The net debt increased from $52.3 million at 31 March 2022 to $60.1 million at 31 March 2023, the adjusted EBITDA (used for the
Group’s financial covenants) increased from $13.9 million in the year ended 31 March 2022 to $18.7 million in the year ended 31 March
2023 (note 5.3).
The Directors have considered the forecast cash flows and covenant compliance for the foreseeable future and have concluded that
the Group will be able to comply with those covenants with reasonable headroom for the 12 months following the date of approval of
the consolidated financial statements.
21
Notes to the Consolidated Financial Statements Further detail on the Group’s forecasts, which reflect the matters referred to above and are used in the assessment of both forecast
financial covenant compliance and the carrying value of goodwill, is provided in note 4.3.
The Group’s loan facilities have been renewed and extended to October 2024. There is no indication that these will not be able to be
renewed or refinanced at that time. This period of time provides the Group with various options to refinance its borrowings.
Taking regard of the above and while acknowledging the uncertainties around forecasting in the current environment, the Directors
consider these uncertainties do not represent material uncertainties that would cast significant doubt on the Group’s ability to
continue as a going concern. Accordingly, the financial statements are prepared on a going concern basis.
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in New Zealand dollars, which is the Company’s functional and presentation
currency, and rounded where necessary to the nearest thousand dollars.
Transactions and balances
Foreign currency transactions are translated using the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. They are deferred in equity if they
relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a
foreign operation.
The results and financial position of foreign operations that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions);
• all resulting exchange differences are recognised in ‘Other comprehensive income’.
• on consolidation, exchange differences arising from the translation of any net investment in foreign entities, and the borrowings
and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a
foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are
reclassified to profit or loss, as part of the gain or loss on sale.
Changes in accounting policy and disclosures
New and amended standards adopted by the Group
The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2022, and as
described in those annual financial statements.
2 FINANCIAL PERFORMANCE
2.1 Segment information
Operating segments of the Group at 31 March 2023 have been determined based on financial information that is regularly reviewed
by the Board in conjunction with the Chief Executive Officer and Chief Financial Officer, collectively known as the Chief Operating
Decision-maker for the purpose of allocating resources, assessing performance and making strategic decisions.
Substantially all of the Group’s revenue is derived from the sale of glass and related products and services. This revenue is split by
channel only at the revenue level into commercial glazing, residential and retrofit. Commercial glazing revenue reflects sales through
four specific commercial glazing operations in New Zealand. Retrofit revenue reflects sales through four specific retrofit operations in
New Zealand and the retrofit channel sales from all (Metro Direct) branches across New Zealand. Residential revenue reflects all other
sales channels. The allocation of sales between residential and commercial can be difficult as the Group does not always know the
end-use application. Following the acquisition of Australian Glass Group Pty Ltd (AGG) on 1 September 2016 the Group operates in two
geographic segments, New Zealand and Australia.
In the tables below:
• Group costs consist of insurance, professional services, director fees and expenses, listed company fees and share incentive
scheme costs.
• Refer to note 2.4 for details of significant items.
22
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Group
$'000
36,945
198,965
27,610
263,520
105,067
31,683
(939)
30,744
(18,960)
11,784
(12,032)
(248)
Group
$'000
33,457
173,665
28,941
236,063
93,591
25,747
(1,149)
24,598
(18,687)
5,911
–
5,911
CONSOLIDATED 2023
New Zealand
$'000
Australia
$'000
Eliminations
and Other
$'000
Commercial glazing
Residential
Retrofit
Total revenue
Gross profit
Segmental EBITDA before significant items
Group costs
Group EBITDA before significant items
Depreciation and amortisation
EBIT before significant items
Significant items
EBIT
Segment assets
Segment non-current assets (excluding deferred tax assets)
Segment liabilities
36,945
122,191
27,610
186,746
78,787
20,080
–
(13,725)
6,355
(11,878)
(5,523)
307,901
117,023
88,745
–
76,774
–
76,774
26,280
11,603
–
–
–
–
–
–
–
(939)
(5,235)
6,368
(154)
6,214
70,501
46,484
25,975
–
(939)
–
(939)
(123,799)
254,603
–
64,416
163,507
179,136
CONSOLIDATED 2022
New Zealand
$'000
Australia
$'000
Eliminations
and Other
$'000
Commercial glazing
Residential
Retrofit
Total revenue
Gross profit
Segmental EBITDA before significant items
Group costs
Group EBITDA before significant items
Depreciation and amortisation
EBIT before significant items
Significant items
EBIT
Segment assets
Segment non–current assets (excluding deferred tax assets)
Segment liabilities
2.2 Revenue
33,457
115,592
28,941
177,990
77,107
21,189
–
(13,822)
7,367
–
7,367
326,989
135,316
98,679
–
58,077
–
58,077
16,488
4,558
–
(4)
–
(4)
(4)
–
–
(1,149)
(4,865)
(307)
–
(307)
69,997
47,796
26,968
–
(1,149)
–
(1,149)
(124,006)
272,980
–
61,804
183,112
187,451
Accounting policy
Revenue comprises the value of the consideration received for the sale of goods and services, net of GST, rebates and discounts, and
after eliminating sales within the Group.
The Group derives revenue from the sale of customised glass products. Revenue is recognised at a point in time when a Group entity
has transferred control, which is when it has delivered the glass products to the customer, the customer has accepted the products
and collectability of the related receivables is highly probable.
The Group also provides glazing services along with the sale of its glass products. Revenue is recognised for the glazing and associated
glass products when the glazing services have been completed, the customer has approved the installation services and collectability
of the related receivables is highly probable.
23
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) 2.3 Operating expenditure
Raw materials and consumables used
Employee benefit expenses
Subcontractor costs
Depreciation and amortisation
Transportation and logistics
Occupancy costs
Advertising
Repairs and maintenance
Electricity
Insurance
Other expenses
CONSOLIDATED CONSOLIDATED
2023
$'000
86,643
99,750
7,401
18,960
9,423
2,076
757
5,515
4,007
1,756
16,165
2022
$'000
72,421
100,239
6,220
18,687
9,221
1,405
938
4,795
4,032
1,487
14,074
Total cost of sales, distribution and glazing-related expenses,
selling and marketing expenses, and administration expenses
252,453
233,519
Amortisation of intangible assets is included within administration expenses as reported in the consolidated statement of comprehensive income.
Audit and review of financial statements
Audit of financial statements - PwC - current year
Audit of financial statements - PwC - prior year
Other services performed by PwC
Tax advice relating to the long-term incentive plan
Assurance report relating to the Group’s covenant compliance certificate
Agreed upon procedures relating to the Group's covenant compliance certificate
Agreed upon procedures relating to financial information attached to a visa application
2.4 Significant items
Impairment of New Zealand intangible assets
Restructure of the New Zealand operations
Australian divestment
Total significant items before taxation
Tax benefit on above items
Total significant items after taxation
CONSOLIDATED CONSOLIDATED
2023
$'000
699
18
–
–
6
4
2022
$'000
581
–
5
6
–
–
727
592
CONSOLIDATED CONSOLIDATED
2023
$'000
10,000
1,878
154
12,032
(570)
11,462
2022
$'000
–
–
–
–
–
-
Accounting policy
Significant items are a non-GAAP measure and are based on the Group’s internal policy as follows. Transactions considered for
classification as significant items are material restructuring costs, acquisition and disposal costs, impairment or reversal of impairment
of assets, business integration, and transactions or events outside of the Group’s ongoing operations that have a significant impact on
reported profit.
24
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Additional detail on impairment charges can be seen in the Intangible Assets Note 4.3.
The Australian divestment costs include those professional service costs incurred for the investigation of initial sale process
undertaken in the period ended 31 March 2023.
On 18 November 2022 the Group announced the initiation of a cost out programme to ensure that the business capacity and resources
are appropriate to service demand as the contruction sector cycle changes, including a comprehensive review of its organisational
structure and manufacturing footprint. This review culminated in the closure of the manufacturing facility in Bay of Plenty in December
2022, closure of the hardware procurement function, and other staff restructuring costs. The costs of this programme that were
incurred in the period ended 31 March 2023 are included in the 'Restructure of NZ operations' significant item. The nature of the costs
incurred include redundancy payments, loss on disposal of inventory, and costs incurred transporting and re-commissioning assets.
2.5 Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit or loss after tax of the Group by the weighted average number of ordinary
shares outstanding during the period. Due to the losses the diluted earnings per share are the same as the basic earnings per share.
Profit/(loss) after tax ($'000)
Weighted average number of ordinary shares outstanding ('000s)
Basic earnings per share (cents per share)
CONSOLIDATED CONSOLIDATED
2023
(10,548)
185,378
(5.7)
2022
(459)
185,378
(0.2)
Net tangible assets
Net tangible assets per share is a non-GAAP measure that is required to be disclosed by the NZX Listing Rules.
The calculation of the Group’s net tangible assets per share and its reconciliation to the consolidated balance sheet is presented below:
Total assets ($’000)
Less: intangible assets
Less: total liabilities
Net tangible assets ($’000)
Shares on issue at the end of the period (‘000s)
Net tangible assets per share (cents per share)
2.6 Other income and gains and losses
NZ Government Wage Subsidy and Grants
Financial assets at fair value through profit or loss – fair value movement and income receipts
from the investment
Gain on disposal of asset
Other
Total Other income and gains and losses
CONSOLIDATED CONSOLIDATED
2023
254,603
(44,336)
(179,136)
31,131
185,378
16.79
2022
272,980
(54,710)
(187,451)
30,819
185,378
16.62
CONSOLIDATED CONSOLIDATED
2023
$'000
157
–
146
–
303
2022
$'000
2,470
889
–
8
3,367
NZ Government Wage Subsidy and Grants
Grants from the Government are recognised at their fair value where there is reasonable assurance that the grant will be received and
when the Group will comply with the attached conditions. Government grants relating to income are deferred and recognised in profit
or loss over the period necessary to match them with the conditions that they are intended to compensate.
25
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) 2.7 Finance expenses
Interest on borrowings and derivatives
Interest on lease liabilities
Unrealised foreign currency gains and losses on borrowings and other finance expenses
Total finance expenses
3 WORKING CAPITAL
CONSOLIDATED CONSOLIDATED
2023
$'000
5,706
4,960
204
10,870
2022
$'000
3,628
3,302
(603)
6,327
3.1 Trade receivables
The following table summarises the impact of the credit loss provision on the trade receivables balance:
Trade receivables
Credit loss provision
Total trade receivables
1. Certain comparative amounts have been restated; refer note 6.7.
Movements in the credit loss provision are as follows:
Opening balance
Provision increased/(reversed) during the year
Receivables written off during the year as uncollectable
Balance at the end of the year
CONSOLIDATED CONSOLIDATED
2023
$'000
39,321
(1,238)
38,083
2022
$'000
Restated1
36,478
(679)
35,799
CONSOLIDATED CONSOLIDATED
2023
$'000
679
1,055
(496)
1,238
2022
$'000
1,317
(141)
(497)
679
Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, and credit exposures to wholesale and
retail customers, including outstanding receivables and committed transactions, and is managed at Group level.
The table below sets out information about the credit quality of trade receivables net of the expected credit loss provision:
CURRENT
0–59 DAYS
60–89 DAYS
90 DAYS
AND LATER
$'000
31,055
51
–
0.16%
51
$'000
5,561
22
21
0.77%
43
$'000
758
13
37
6.60%
50
$'000
1,947
10
1,084
56.19%
1,094
TOTAL
$'000
39,321
96
1,142
3.15%
1,238
31 March 2023
Gross carrying amount
Baseline
Specific
Total expected credit loss rate
Credit loss provision
26
Notes to the Consolidated Financial Statements (continued)2023 Annual Report 31 March 2022
Gross carrying amount
Baseline
Specific
Total expected credit loss rate
Credit loss provision
CURRENT
0–59 DAYS1
60–89 DAYS
90 DAYS
AND LATER
TOTAL
$'000
27,128
50
–
0.18%
50
$'000
5,629
27
–
0.48%
27
$'000
1,172
28
–
$'000
2,549
66
508
2.39%
22.52%
28
574
$'000
36,478
171
508
1.86%
679
1. Certain comparative amounts have been restated, refer note 6.7
The Group extends credit to its customers based on an assessment of creditworthiness. Terms differ by customer and may extend to
60 days past invoice date. Ageing is based on agreed credit terms and at balance date, a portion of the Group’s receivables are also
subject to contractual retentions which can last up to and exceed 12 months.
As of 31 March 2023, allowing for retention balances of $1.2 million (2022: $1.5 million), trade receivables of $5.9 million (2022: $6.4 million)
were past due but not impaired.
Estimates and judgements
Credit loss provision
To measure expected credit losses, trade receivables have been grouped and reviewed on the basis of the number of days past due.
The credit loss provision has been calculated by considering the impact of the following characteristics:
• The baseline loss rate takes into account the write-off history of the Group over a five-year period as a predictor of future
conditions and applies an increasing expected credit loss estimate by trade receivables ageing profiles.
• Specific credit loss provisions are made based on any specific customer collection issues that are identified. Collections and
payments from the Group’s customers are continuously monitored and a credit loss provision is maintained to cover any specific
customer credit losses anticipated.
Accounting policy - trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for estimated
uncollectable amounts and expected credit losses. The carrying amount of the asset is reduced through the use of provision accounts,
and the amount of the loss is recognised in the statement of comprehensive income within ‘Administration expenses’. Individual
debtor accounts are reviewed for impairment and a provision is raised based on management’s best estimate of recoverability. Trade
receivables are also assessed for credit risk on a forward-looking basis with a provision raised where a credit loss is considered likely.
When a trade receivable is uncollectable, it is written off against the provision account for trade receivables. Subsequent recoveries
of amounts previously written off are credited to the income statement against the impairment losses on receivables.
3.2 Inventories
Raw materials, primarily flat glass stock-sheets
Spare parts
Work in progress
CONSOLIDATED CONSOLIDATED
2023
$'000
23,890
5,083
2,853
31,826
2022
$'000
19,122
4,616
3,664
27,402
The cost of inventories recognised as an expense and included in ‘Cost of sales’ amounted to $86.5 million (2022: $72.4 million). As
part of an operational change to outsource the procurement of hardware via a third party, during the year ended 31 March 2023 the
Group sold $2.5 million of (hardware) raw materials held at 31 March 2022 to the third party, incurring a $0.5 million loss on sale (refer
note 2.4).
Accounting policy - inventories
Raw materials, spare parts, and work in progress are stated at the lower of cost and net realisable value. Cost comprises direct
materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the
basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net
realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. Inventories also comprise spare parts, which are used to maintain service to, and repair,
the Group’s plant assets. Spare parts are stated at the lower of weighted average cost and net realisable value.
27
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) 3.3 Trade and other payables
Trade accounts payable
Employee entitlements
GST payable
Other interest accruals
Management incentive accrual
Total trade and other payables
CONSOLIDATED CONSOLIDATED
2023
$'000
17,756
7,545
1,124
241
542
27,208
2022
$'000
21,952
8,209
173
292
–
30,626
Trade accounts payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period which are
unpaid. The carrying amount represents fair value due to their short-term nature.
Employee entitlements
Liabilities for wages and salaries, including non-monetary benefits, annual leave and leave in lieu, are recognised in respect of employees’
services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Management incentive accrual
The Group recognises a liability and an expense for bonuses on a formula that takes into consideration the profit attributable to the
Group’s shareholders. The Group recognises a provision where contractually obliged or where there is a past practice that has created
a constructive obligation.
3.4 Deferred income
The Group recognises a contract liability when a deposit is received before the product or service is transferred to the customer.
Deposits are required from Retrofit and Retail customers in advance. Deposits are typically held for approximately three to four months.
Customer contract liabilities
Deferred income
1. Certain comparative amounts have been restated; refer note 6.7.
CONSOLIDATED CONSOLIDATED
2023
$'000
2,054
2,054
2022
$'000
Restated1
3,450
3.450
$3.4 million of the deferred income at the 31 March 2022 balance date has been recognised as revenue in the year ended 31 March 2023.
3.5 Financial instruments
Financial instruments
Management determines the classification of the Group’s financial assets and liabilities at initial recognition. The Group’s financial
liabilities for the periods covered by these consolidated financial statements consist of overdrafts, loans, trade and other payables,
interest rate swaps and forward exchange contracts. The Group’s financial assets for the periods covered by these consolidated
financial statements include cash, accounts receivable, and those that are classified at fair value through profit or loss (FVTPL), rather
than cost.
The Group measures all financial liabilities, with the exception of interest rate swaps and forward exchange contracts, at amortised
cost. Interest rate swaps and forward exchange contracts are measured at fair value with changes in fair value recognised in ‘Other
comprehensive income’.
Financial liabilities measured at amortised cost are non-derivative financial liabilities with fixed or determinable payments that are
not quoted in an active market. Trade and other payables, bank overdrafts and loans are classified as financial liabilities measured at
amortised cost.
28
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Fair value measurement of financial assets and liabilities
The Group’s financial assets and liabilities by category are summarised as follows:
Cash and cash equivalents
These are short term in nature and their carrying value is equivalent to their fair value.
Trade and other receivables
These assets are short term in nature and are reviewed for impairment; their carrying value approximates their fair value.
Trade payables and borrowings
The fair value of trade and other payables approximates carrying value due to their short-term nature. The carrying value of the
Group’s bank borrowings also represents the fair value of the borrowings due to management’s assessment that the interest rates
approximate the market interest rate for a commercial loan of a comparable lending period.
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow
interest rate risk), credit risk and liquidity risk. The Group’s overall financial risk management is carried out by a central finance function
(the head-office finance team) under policies approved by the Board of Directors, including the Treasury policy. The head-office finance
team focuses on the unpredictability of financial markets and identifies, evaluates and seeks to hedge financial risks in close co-
operation with the Group’s operating units to minimise potential adverse effects on the financial performance of the Group. The Board
approves policies covering foreign exchange risk, interest rate risk and credit risk. The Group uses derivative financial instruments such
as foreign exchange contracts and interest rate swaps to hedge certain risk exposures. The Group uses different methods including
sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk to measure risk.
Leases
The Group has leases for property, vehicles and equipment. Contracts are usually for fixed periods, but there may be options to extend.
Right-of-use assets and lease liabilities arising from a lease are initially measured on a present-value basis of remaining lease payments,
discounted using a discount rate derived from the incremental borrowing rate. Right-of-use assets are depreciated using the straight-
line method from the commencement date to the end of the lease term.
Derivatives and hedging activity
The Group holds hedging instruments to hedge its foreign currency exposure and interest costs. The Group has designated forward
exchange contracts and interest rate swap derivatives as cash flow hedges. In October 2021, the Group designated its AUD bank
borrowings, which are in a New Zealand entity, as a hedge of the net investment in the Australia business (net investment hedge).
Cash flow hedge instruments hedge the exposure to variability in cash flows that (i) is attributable to a particular risk associated with a
recognised asset or liability or a highly probable forecast transaction and (ii) could affect profit or loss.
At 31 March 2023 and 31 March 2022, all derivatives measured at fair value (interest rate swaps and forward exchange contracts) were
valued using valuation techniques where all significant inputs were based on observable market data. Accordingly they are categorised
as level 2.
Specific valuation techniques used to value the Group’s derivatives are as follows:
• The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with
the resulting value discounted back to present value.
• The fair value of interest rate swap contracts is determined using forward interest rates at the balance sheet date, with the
resulting value discounted back to present value.
These fair values are based on valuations provided by the Westpac Banking Corporation and ASB Bank Limited as at 31 March 2023 and
31 March 2022.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
instrument (the portion of the AUD bank borrowings designated as the hedging instrument) relating to the effective portion of the
hedge is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective
portion is recognised immediately in profit or loss with finance expenses. Gains and losses accumulated in equity are reclassified to
profit or loss when the foreign operation is partially disposed of or sold.
The gains and losses from the AUD bank borrowings arise from the translation of these foreign currency borrowings to NZD at the
period end spot exchange rates.
29
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) The Group's hedging reserves relate to the following hedging instruments:
CONSOLIDATED 2023
Spot component
of currency
forwards
$'000
Interest rate
swaps
$'000
Net investment
hedge
$'000
Total hedge
reserve
$'000
Opening balance 1 April 2022
Change in fair value of hedging instrument recognised
in ‘Other comprehensive income’ (OCI)
Deferred tax
Balance at 31 March 2023
147
(188)
55
14
194
(436)
127
(115)
335
(131)
37
241
676
(755)
219
140
CONSOLIDATED 2022
Spot component
of currency
forwards
$'000
Interest rate
swaps
$'000
Net investment
hedge
$'000
Total hedge
reserve
$'000
Opening balance 1 April 2021
Change in fair value of hedging instrument recognised
in ‘Other comprehensive income’ (OCI)
Deferred tax
Balance at 31 March 2022
167
(32)
12
147
1,121
(1,301)
374
194
–
1,288
465
(130)
335
(868)
256
676
The effects of the foreign-currency-related hedging instruments on the Group’s financial position and performance are as follows:
Foreign currency forwards
Carrying amount asset/(liability)
Notional amount
Maturity date
Hedge ratio1
Change in discounted spot value of outstanding hedging instruments since 1 April
Change in value of hedged item used to determine hedge effectiveness
Weighted average hedged EUR/NZD rate for the year (including forward points)
Weighted average hedged USD/NZD rate for the year (including forward points)
Weighted average hedged EUR/AUD rate for the year (including forward points)
Weighted average hedged USD/AUD rate for the year (including forward points)
CONSOLIDATED CONSOLIDATED
2023
$'000
(18)
12,188
2022
$'000
(206)
23,277
Apr 23-Mar 24
Apr 22-Mar 23
1:1
(188)
188
0.5792
0.6214
–
0.9836
1:1
(32)
32
0.6088
0.6897
0.6317
0.7292
1. The foreign currency forwards are denominated in the same currency as the highly probably future inventory purchases (USD and EUR); therefore, the hedge is 1:1.
30
Notes to the Consolidated Financial Statements (continued)2023 Annual Report The effects of the interest rate swaps on the Group’s financial position and performance are as follows:
Interest rate swaps
Carrying amount of asset/(liability)
Notional amount
Maturity date
Hedge ratio
Change in fair value of outstanding hedging instruments since 1 April
Change in value of hedged item used to determine hedge effectiveness
Average proportion of debt hedged during the year
CONSOLIDATED CONSOLIDATED
2023
$'000
162
23,196
Aug 23
1:1
(436)
436
35.03%
2022
$'000
(274)
23,284
Aug 23
1:1
(1,301)
1,301
38.70%
The effects of the net investment hedge on the Group’s financial position and performance are as follows:
Net investment hedge
NZD carrying amount of non-current interest-bearing liabilities
AUD carrying amount of non-current interest-bearing liabilities
Hedge ratio
Change in fair value of hedging instrument recognised in OCI for the year
Change in value of hedged item used to determine hedge effectiveness
Financial instruments by category
CONSOLIDATED CONSOLIDATED
2023
$'000
2022
$'000
(16,044)
(15,000)
1:1
(131)
131
(16,176)
(15,000)
1:1
465
(465)
Assets as per statement of financial position
Cash and cash equivalents
Derivatives – foreign exchange contracts
Derivatives – interest rate swaps
Financial assets at fair value through profit or loss
Other non-current assets
Trade and other receivables
Balance at 31 March 2023
CONSOLIDATED 2023
Assets at
amortised
cost
$'000
Asset at fair
value through
profit or loss
$'000
Derivatives used
for hedging
$'000
7,300
–
–
–
915
38,083
46,298
–
–
–
–
–
–
–
–
89
162
–
–
–
251
Total
$'000
7,300
89
162
–
915
38,083
46,549
31
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) Total
$'000
13,064
68
2,098
1,268
35,799
52,297
Total
$'000
24,569
107
–
67,370
77,884
Assets as per statement of financial position
Cash and cash equivalents
Derivatives – foreign exchange contracts
Financial Assets at fair value through profit or loss
Other non-current assets
Trade and other receivables
Balance at 31 March 2022
CONSOLIDATED 2022
Assets at
amortised
cost
$'000
Asset at fair
value through
profit or loss
$'000
Derivatives
used for
hedging
$'000
13,064
–
–
1,268
35,799
50,131
–
–
2,098
–
–
2,098
–
68
–
–
–
68
CONSOLIDATED 2023
Liabilities at
amortised cost
$'000
Derivatives used
for hedging
$'000
Liabilities as per statement of financial position
Trade and other payables excluding non-financial liabilities
Derivatives – foreign exchange contracts (current liabilities)
Derivatives – interest rate swaps (non-current liabilities)
Interest-bearing liabilities
Lease liabilities
Balance at 31 March 2023
24,569
–
–
67,370
77,884
169,823
–
107
–
–
–
107
169,930
Liabilities as per statement of financial position
Trade and other payables excluding non-financial liabilities
Derivatives – foreign exchange contracts (current liabilities)
Derivatives – interest rate swaps (non-current liabilities)
Interest-bearing liabilities
Lease liabilities
Balance at 31 March 2022
CONSOLIDATED 2022
Liabilities at
amortised cost
$'000
Derivatives used
for hedging
$'000
30,168
–
–
65,319
81,280
176,767
–
274
274
–
–
548
Total
$'000
30,168
274
274
65,319
81,280
177,315
Accounting policy - hedging
On initial designation of a derivative as a cash flow hedging instrument or a foreign currency borrowing as a net investment hedging
instrument, the Group formally documents the relationship between the hedging instrument and hedged item, including the risk
management objectives and strategy in undertaking the hedge transaction. Documentation includes the nature of the risk being
hedged, together with the methods that will be used to assess the hedging instrument's effectiveness. The Group also documents its
assessment, both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging instruments are
expected to be highly effective in offsetting the changes in cash flows or net investment of the respective hedged items.
The effective portion of the changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in ‘Other comprehensive income’ and presented in the hedging reserve in equity. The gain or loss relating to the ineffective portion is
recognised immediately in the profit or loss section of the statement of comprehensive income.
32
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and purchases of recognised assets are denominated in a currency
that is not New Zealand Dollars (NZD) which is the company’s functional currency. Approximately 95% of annual flat-sheet glass raw
materials are purchased in foreign currencies, being United States Dollar (USD), Euro (EUR) and Australian Dollar (AUD). In accordance
with the Company’s Treasury policy, foreign exchange risk is managed prospectively over a period to a maximum period of 12 months
with allowable limits of coverage up to 100% over the six-month term, reducing to 50% up to the 12-month term. Where deemed
acceptable by the directors, coverage can be extended over a longer period.
Exposure to foreign exchange risk
31 March 2023
Cash and cash equivalents
Trade receivables
Trade accounts payable
Balance at 31 March 2023
31 March 2022
Cash and cash equivalents
Trade receivables
Trade accounts payable
Balance at 31 March 2022
CONSOLIDATED 2023
AUD
$'000
1,271
11,862
(5,334)
7,799
USD
$'000
734
–
(2,358)
(1,624)
CONSOLIDATED 2022
AUD
$'000
3,253
9,157
(6,235)
6,175
USD
$'000
425
–
(2,478)
(2,053)
EUR
$'000
965
–
(237)
728
EUR
$'000
1,023
–
(1,005)
18
Cash flow hedge reserve movement shown in the statement of comprehensive income reflects the tax-affected change in fair value
of forward foreign exchange currency contracts during the reporting period.
Sensitivity analysis
The following table details the Group’s sensitivity to a 10% strengthening/weakening of the NZD against the following currencies
at the reporting date. The table shows the (decrease)/increase in profit or loss and equity as a result of the 10% movements.
The analysis assumes that all other variables, in particular interest rates, remain constant. The same basis has been applied for all
periods presented.
Profit or loss
10% strengthening of the NZD against:
AUD
USD
EUR
10% weakening of the NZD against:
AUD
USD
EUR
CONSOLIDATED CONSOLIDATED
2023
$’000
2022
$’000
(709)
148
(66)
867
(180)
81
(561)
187
(2)
686
(228)
2
33
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) Equity
10% strengthening of the NZD against:
USD
EUR
10% weakening of the NZD against:
USD
EUR
CONSOLIDATED CONSOLIDATED
2023
$’000
2022
$’000
(1,062)
50
1,298
50
(1,702)
222
2,080
222
Profit or loss movements are mainly attributable to the exposure outstanding on AUD trade receivables at the end of the reporting
period. Equity movements are the result of changes in fair value of derivative instruments designated as hedging instruments in cash
flow hedges.
Commodity cost risk
The primary raw material used by the Group is flat glass which is imported from suppliers around the world. While there are numerous
manufacturers of flat sheet glass, the Group is exposed to commodity price risk and therefore manages access to supply through
close relationships with suppliers. Cost is an important variable in the determination of supply, and the Group is clearly exposed to
changes in the cost of glass.
3.6 Provisions
Warranty
provision
$’000
Employee
expenses
$’000
Lease
make-good
$’000
Carrying amount at the beginning of the year
Increase in balance
Settled or utilised
Carrying amount at the end of the year
115
53
–
168
1,795
–
(1,330)
465
Current portion
Non-current portion
Carrying amount at the end of the year
3,800
102
(22)
3,880
2023
$’000
663
3,880
4,513
Total
$’000
5,710
155
(1,352)
4,513
2022
$’000
1,972
3,790
5,762
Accounting policy - provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, where it is probable that a cost will be
incurred to settle the obligation and a reliable estimate of that obligation is able to be made.
Warranty provisions represent an estimate of potential liability for defective products that are shipped out and the defect is identified
within the short term, and products that fail over a long time, but within their product life cycle.
The employee expenses provision recognises the remediation payments to settle historical Holidays Act compliance matters.
Make-good provisions represent the estimated cost to return a leased property to its original condition at the end of the lease.
34
Notes to the Consolidated Financial Statements (continued)2023 Annual Report 3.7 Other current assets and other non-current assets
Prepaid expenses
Related party receivable (5R Solutions Ltd)
Other receivables
Total other current assets
Related party receivable (5R Solutions Ltd)
Total other non-current assets
CONSOLIDATED CONSOLIDATED
2023
$’000
1,972
265
1,000
3,237
650
650
2022
$’000
1,859
217
494
2,570
1,051
1,051
Other receivables includes sundry debtor balances and outstanding amounts at 31 March 2023 for the sale of the hardware inventory
to a third party during the period ended 31 March 2023.
4 LONG-TERM ASSETS
4.1 Property, plant and equipment
Opening balance
Cost
Accumulated depreciation
Net book value at 1 April 2022
Reclassificaton
Cost
Accumulated depreciation
Net book value at 1 April 2022
Additions
Disposals
Depreciation expense
Foreign exchange impact
Closing net book value at 31 March 2023
Represented by:
Cost
Accumulated depreciation
Net book value at 31 March 2023
CONSOLIDATED 2023
Plant and
equipment
$'000
Furniture,
fittings and
equipment
$'000
Motor vehicles
$'000
96,074
(48,567)
47,507
(2,524)
2,108
(416)
5,516
(265)
(8,013)
(82)
44,247
98,720
(54,473)
44,247
4,911
(3,997)
914
680
(263)
417
316
(50)
(598)
48
1,047
5,904
(4,857)
1,047
12,718
(6,391)
6,327
57
(58)
(1)
603
(284)
(1,267)
2
5,380
13,095
(7,715)
5,380
Total
$'000
113,703
(58,955)
54,748
(1,787)
1,787
–
6,435
(599)
(9,878)
(32)
50,674
117,719
(67,045)
50,674
Following the implementation of new financial accounting software for AGG, a reclassification of asset category was required for a
number of AGG assets.
35
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) CONSOLIDATED 2022
Plant and
equipment
$'000
Furniture,
fittings and
equipment
$'000
Motor vehicles
$'000
Total
$'000
87,099
(41,359)
45,740
9,236
(64)
(7,208)
(197)
47,507
96,074
(48,567)
47,507
4,378
(3,451)
927
533
–
(546)
–
914
4,911
(3,997)
914
10,882
(5,082)
5,800
2,135
(267)
(1,308)
(33)
6,327
12,718
(6,391)
6,327
102,359
(49,892)
52,467
11,904
(331)
(9,062)
(230)
54,748
113,703
(58,955)
54,748
Opening balance
Cost
Accumulated depreciation
Net book value at 1 April 2021
Additions
Disposals
Depreciation expense
Foreign exchange impact
Closing net book value at 31 March 2022
Represented by:
Cost
Accumulated depreciation
Net book value at 31 March 2022
Critical estimates and judgements
Economic lives of intangible assets and property, plant and equipment
Property, plant and equipment are long-lived assets that are amortised/depreciated over their estimated useful lives. The estimated
useful lives are reviewed annually and may change if necessary. The actual useful life of an asset may be shorter or longer than what
had been estimated, which will affect amortisation, depreciation and the carrying values of these assets.
Accounting policy
All property, plant and equipment is stated at historical cost less depreciation and impairment. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Depreciation of property, plant and equipment is calculated using the straight-line value method to allocate the cost of assets over
their expected useful lives. The rates are as follows:
Plant and equipment
Motor vehicles
Furniture, fixtures and fittings
Depreciation
rate
Depreciation
basis
7 – 15%
Straight line
12 – 20%
Straight line
20 – 25%
Straight line
36
Notes to the Consolidated Financial Statements (continued)2023 Annual Report 4.2 Right-of-use assets
Opening balance
Cost
Accumulated depreciation
Net book value at 1 April 2022
Additions
Disposals
Depreciation expense
Foreign exchange impact
Closing net book value at 31 March 2023
Represented by:
Cost
Accumulated depreciation
Net book value at 31 March 2023
Opening balance
Cost
Accumulated depreciation
Net book value at 1 April 2021
Additions
Disposals
Depreciation expense
Foreign exchange impact
Closing net book value at 31 March 2022
Represented by:
Cost
Accumulated depreciation
Net book value at 31 March 2022
CONSOLIDATED 2023
Property
$'000
Motor vehicles
$'000
Equipment
$'000
Total
$'000
101,013
(37,076)
63,937
1,277
(1,118)
(6,972)
(39)
57,085
100,827
(43,742)
57,085
7,894
(1,598)
6,296
3,594
(66)
(1,763)
3
8,064
11,419
(3,355)
8,064
358
(86)
272
–
–
(86)
–
186
358
(172)
186
109,265
(38,760)
70,505
4,871
(1,184)
(8,821)
(36)
65,335
112,604
(47,269)
65,335
CONSOLIDATED 2022
Property
$'000
Motor vehicles
$'000
Equipment
$'000
Total
$'000
83,280
(34,973)
48,307
23,211
(766)
(6,730)
(85)
63,937
101,013
(37,076)
63,937
2,765
(554)
2,211
5,138
(4)
(1,049)
–
6,296
7,894
(1,598)
6,296
210
(102)
108
284
(28)
(92)
–
272
358
(86)
272
86,255
(35,629)
50,626
28,633
(798)
(7,871)
(85)
70,505
109,265
(38,760)
70,505
In determining the lease term, the Group includes any periods covered by options to the extent where the Group is reasonably certain
to exercise that option.
Accounting policy
The Group leases mainly relate to buildings which are typically made for fixed periods of 1 to 16 years but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. The lease agreements do not
impose any covenants, but leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present-value basis. Lease liabilities include the net present value
of the following lease payments:
• fixed payments, less any lease incentives receivable; and
• variable lease payments that are based on an index or a rate.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability and any restoration
costs. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small
items of office furniture with a purchase cost below $1,000.
37
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) 4.3 Intangible assets
Opening balance
Cost
Accumulated amortisation and impairment
Net book value at 1 April 2022
Additions
Disposals
Amortisation expense
Impairment
Foreign exchange impact
Closing net book value at 31 March 2023
Represented by:
Cost
Accumulated amortisation and impairment
Net book value at 31 March 2023
Opening balance
Cost
Accumulated amortisation and impairment
Net book value at 1 April 2021
Additions
Amortisation expense
Foreign exchange impact
Closing net book value at 31 March 2022
Represented by:
Cost
Accumulated amortisation and impairment
Net book value at 31 March 2022
CONSOLIDATED 2023
Customer
relationships
$'000
Goodwill on
acquisitions
$'000
Computer
software
$'000
13,055
(13,055)
–
–
–
–
–
–
–
149,364
(95,128)
54,236
–
–
–
(10,000)
(190)
44,046
13,014
(13,014)
–
149,103
(105,057)
44,046
6,588
(6,114)
474
77
–
(261)
–
–
290
9,606
(9,316)
290
CONSOLIDATED 2022
Customer
relationships
$'000
Goodwill on
acquisitions
$'000
Computer
software
$'000
13,055
(11,847)
1,208
–
(1,208)
–
–
13,055
(13,055)
–
149,712
(95,221)
54,491
–
–
(255)
54,236
149,364
(95,128)
54,236
9,493
(8,560)
933
61
(547)
27
474
6,588
(6,114)
474
Total
$'000
169,007
(114,297)
54,710
77
–
(261)
(10,000)
(190)
44,336
171,723
(127,387)
44,336
Total
$'000
172,260
(115,628)
56,632
61
(1,755)
(228)
54,710
169,007
(114,297)
54,710
Critical estimates and judgements: Goodwill
The Group tests intangible assets for impairment to ensure they are not carried at above their recoverable amounts:
• at least annually for goodwill with indefinite lives; and
• where there is an indication that the assets may be impaired (which is assessed at least at each reporting date).
Impairment tests are performed by assessing the recoverable amount of each individual asset or Cash-generating unit (CGU). The
recoverable amount is determined as the higher amount calculated under a value-in-use (VIU) or a fair value less costs of disposal
(FVLCD) calculation. Both methods utilise pre-tax cash flow projections based on financial projections approved by the directors.
38
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Impairment tests for goodwill
The Group's segments and cash generating units (CGU's) have been classified as New Zealand and Australia aligning with the way the
business is reviewed. The New Zealand goodwill balance arose prior to the Group's Initial Public Offering (IPO) in July 2014.The Australian
goodwill arose in August 2016 with the acquisition of AGG. Goodwill balances are as follows:
New Zealand
Australia
Total goodwill balances
CONSOLIDATED CONSOLIDATED
2023
$'000
20,879
23,167
44,046
2022
$'000
30,879
23,357
54,236
Impairment testing for both CGUs was completed using the VIU method.
Key assumptions in the 31 March 2023 impairment assessment (VIU) calculations (and the equivalent assumptions in the 31 March 2022
calculations) are as follows:
Compound annual revenue growth – 3 years
Long-term growth rate
Discount rate (pre tax, post IFRS 16)
Discount rate (post tax, post IFRS 16)
CONSOLIDATED
CONSOLIDATED
2023
2022
New Zealand
Australia
New Zealand
Australia
(4.9%)
2.0%
14.6%
10.5%
5.7%
1.3%
12.9%
9.0%
7.1%
1.3%
13.2%
9.5%
14.3%
1.3%
11.9%
8.3%
Cash flow projections
The impairment testing used pre-tax cash flow projections for both CGUs based on financial projections approved by the directors
covering a three-year period. In forming these projections, the directors considered the views of several economic forecasters,
observable market data points (including building consents), feedback from customers, analysis of existing forward books of work,
anticipated customer wins and/or losses and other competitive dynamics.
The directors have referenced longer term independent forecast estimates in a consistent way compared to previous years.
New Zealand
Disruptions to the supply chain for the New Zealand CGU have eased and are expected to improve in the medium-term earnings
outlook. The number of new homes consented has declined from the historically elevated levels and the expectation is that consenting
levels will continue to decline in the short term before flattening out. The value of non-residential building consents softened on
last year but are not expected to decline at the same rate as residential work. The changes to the building code (H1 Standards)
are progressively effective from November 2022 require an increase in the thermal properties of window units as part of a suite of
changes designed to improve the thermal performance of New Zealand homes. Earnings performance for the NZ CGU is expected to
improve compared to F23 even with the anticipated reducing building activity driven by a reduction in global supply chain freight rates,
the successful implementation of the cost out programme and the gradual adoption of the H1 building code. The medium-term outlook
for the NZ CGU is for current consenting levels to progressively decline, offset to some degree by the positive impact from the change
in the H1 standards and other planned cost out initiatives. Within the next three-year period, the business would be at the bottom of
the forecast building cycle with no consenting recovery assumed for the New Zealand CGU, which is also reflected in the extrapolation
of the terminal year.
The impairment test of the New Zealand goodwill balance has resulted in an impairment of $10.0 million, which is presented in the
consolidated statement of comprehensive income as a significant item (note 2.4) and in the New Zealand segment (note 2.1). The
recoverable amount of the New Zealand CGU was determined to be $84.6m.
Impairment testing for the New Zealand CGU was completed using both the VIU and FVLCD methods, with the VIU discounted cash flow
method showing the higher recoverable amount. The VIU test used the same assumptions as the FVLCD test. The FVLCD calculation
has been determined using level three in terms of the fair value hierarchies in NZ IFRS 13.
Australia
On 24 February 2023 the Group announced their intention to explore the divestment of the Australian CGU. The business has made
significant improvements in its operational and financial performance and remains well placed for growth in the coming years as the
penetration of double-glazing increases alongside changing construction codes and consumer preferences. At 31 March 2023 the
process is in the early stages and is ongoing. It is not possible to estimate the fair value of AGG that is likely to be achieved through
sale, and therefore the VIU method is used when testing if the goodwill associated with the Australian CGU is impaired.
39
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) Long-term growth rate
Cash flows beyond the three-year period are extrapolated using an estimated long-term growth rate. The long-term growth rate
assumptions have typically been supported by long-term population growth rates in New Zealand and Australia and the increased use
and prevalence of glass products in the Group's markets. The long-term growth rate for the NZ CGU has been increased to reflect the
long-term inflation expectation at 2%, being the mid-point of the RBNZ target range and based on historical inflation rates. The long-
term growth rates have been left unchanged in the 2023 testing for the Australian CGU (1.3%)
Discount rate
The discount rate (post tax) represents the current market assessment of the risks specific to the CGU, taking into account the time
value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount
rate calculation is based on the specific circumstances of the CGU and its operating segments and is derived from its weighted
average costs of capital (WACC).
The discount rates used are supported by independent third-party expert advice. The discount rates at 31 March 2023 were higher
than the prior year on account of market increases in interest rates (risk-free rates) and the consideration of market-specific risks.
Market capitalisation comparison
The Group compares the carrying amount of net assets with the market capitalisation value at each balance date. The share price at
31 March 2023 was $0.171 equating to a market capitalisation of $31.7 million. This market value excludes any control premium and may
not reflect the value of all of the Group's net assets. The carrying amount of the Group's net assets at 31 March 2023 was $75.5 million
($0.41 per share). Management and the Directors have considered the reasons for this difference and concluded all relevant factors
had been allowed for in their VIU model.
Sensitivity to changes in key assumptions
New Zealand CGU impairment test
Base assumption
+0.5% Discount rate
-0.5% Discount rate
+0.5% Change to forecast revenue in each year (with associated changes to cost of materials)
-0.5% Change to forecast revenue in each year (with associated changes to cost of materials)
+0.25% Long-term growth rate
-0.25% Long-term growth rate
IMPAIRMENT
VARIANCE
TO BASE
ASSUMPTION
$'000
$'000
(10,000)
(16,200)
(3,100)
(4,900)
(15,100)
(6,300)
(13,500)
(6,200)
6,900
5,100
(5,100)
3,700
(3,500)
The results of the assessment of impairment testing calculations for the New Zealand CGU are most sensitive to assumed compound
revenue contraction over the forecast period, the discount rate and the terminal growth rate. The implied position of the construction
cycle following year three (FY26) is also important as this supports the cashflow element of the terminal value calculation, which could
also impact the applicable terminal growth rate.
Whilst acknowledging the uncertainties around forecasting, it is the considered view of the directors that the forecast revenue
assumptions and resulting outcome is reasonable. This is based on their understanding of the market, supplemented by third-party
forecasts, and a consensus of the range of expected market trajectories considered. Therefore, an impairment to the goodwill balance
of $10.0 million has been recognised at 31 March 2023.
The impairment assessments confirmed that, for the Australian business units, the recoverable amount exceed carrying values as at
31 March 2023.There are no reasonably possible changes in key assumptions used in the determination of the recoverable value of
Australian CGU’s that would result in a material impairment to the Group.
Accounting policy
Goodwill
Goodwill represents the excess of the consideration paid for an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Any goodwill arising on acquisitions of subsidiaries is included
in intangible assets. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
40
Notes to the Consolidated Financial Statements (continued)2023 Annual Report The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs
of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed
For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each group of the CGUs that is
expected to benefit from the synergies of the combination. Each unit to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal management purposes.
Computer software
Acquired computer software licences that are not defined as a ‘software as a service’ arrangement are capitalised on the basis of the
costs incurred to acquire and bring to use the specific software. Costs that are directly associated with the production of identifiable
and unique software products controlled by the Group are recognised as intangible assets when management intends to use the
software and anticipate it will generate probable future economic benefits.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs
and an appropriate portion of relevant overheads.
Amortisation of computer software is calculated on a straight-line basis over a useful life of four years.
Contractual customer relationships
Contractual customer relationships acquired in a business combination are recognised at fair value at the acquisition date.
The contractual customer relationships acquired are estimated to have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated on a straight-line method over the expected life, being 10 years of the customer relationship
in New Zealand.
4.4 Investment in associates
5R Solutions Limited
Total investments in associates
Carrying amount at the beginning of the year
Additions
Share of profits of associate
Disposals
Carrying amount at the end of the year
CONSOLIDATED CONSOLIDATED
2023
$'000
2,512
2,512
2022
$'000
–
–
CONSOLIDATED CONSOLIDATED
2023
$'000
–
2,098
414
–
2,512
2022
$'000
–
–
–
–
–
Accounting policy - associates
Associates are those entities in which the Group has significant influence, but not control, over financial and operating policies.
Associates are accounted for under the equity method of accounting.
In the year ended 31 March 2022 the Group’s interest in 5R Solutions Limited was recognised as fair value through the profit or loss. On
1 April 2022 an option was exercised with the Group becoming a 50% owner of 5R Solutions Limited. The Group has 33.3% voting rights
for 5R Solutions Limited. There were no dividends received from 5R Solutions Limited in the year ended 31 March 2023.
Cash flows for repayments of balances due from associates are included in operating activities within the consolidated statement
of cash flows, while the share of profits from associates is equity accounted and disclosed in the consolidated statement of
comprehensive income.
Management is comfortable that there are no indicators requiring an impairment of the asset.
41
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) 5 DEBT AND EQUITY
5.1 Interest-bearing liabilities
Bank borrowings
Other asset financing
Total interest-bearing liabilities
CONSOLIDATED CONSOLIDATED
2023
$'000
65,172
2,198
67,370
2022
$'000
62,296
3,023
65,319
Bank borrowings are secured by a first-ranking composite general security deed. The Group’s bank borrowing facilities were amended
on 18 November 2022 to comprise a syndicated revolving loan facility of $75 million for a three-year term expiring in October 2024, a
$5 million standby facility that will expire in October 2024, as well as overdraft and bank guarantees totalling $11.9 million. The Group
received temporary covenant amendments during the year. The Group complied with all covenants throughout the year.
Other asset financing comprises outstanding balances of third-party financing for the purchase of motor vehicles and ‘software as a
service’ application. In the period ended 31 March 2020, the Group concluded two sale and leaseback agreements relating to the New
Zealand vehicle fleet, but retained ownership of the heavy truck bodies.
Assets pledged as security
The bank loans are secured under both a General Security Deed and Specific Security Deed which results in registered charges over
assets of the Group. In addition, there are positive and negative pledge undertakings through shares held of various subsidiaries.
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is expensed in the statement of
comprehensive income over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the statement of financial position date.
Other asset financing is treated as a financing arrangement, with assets remaining in the Group’s asset register and remaining useful
life adjusted to mirror the lease term. A finance liability is recognised equal to the sale proceeds. Interest expense is recognised over
the term of the lease where applicable.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities and the ability to close-out market positions.
As at 31 March 2023 the Group had cash of $7.3 million (2022: $13.1 million). Information in respect of negotiated credit facilities is
shown below.
Committed credit facilities pursuant to syndicated facility
Drawdown at balance date
Available credit facilities
CONSOLIDATED CONSOLIDATED
2023
$'000
88,458
(69,995)
18,463
2022
$'000
83,145
(66,664)
16,481
The table below analyses both of the Group's non-derivative financial liabilities and derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are
included in the analysis if their contractual maturities are essential for an understanding of cash flows. Where relevant, cashflows
include both interest and principal payments.
42
Notes to the Consolidated Financial Statements (continued)2023 Annual Report CONSOLIDATED 2023
Less than
1 year
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
> 5 years
$'000
Interest-bearing liabilities and interest owing
Interest rate swap
Foreign exchange contracts
Lease liabilities
Trade accounts payable
Total at 31 March 2023
5,436
(162)
107
11,840
17,756
34,977
68,314
–
–
840
–
–
727
–
–
11,656
27,959
58,887
–
–
–
79,970
28,799
59,614
203,360
162,955
Total
$'000
75,317
(162)
107
110,342
17,756
Carrying
amount
$’000
67,370
(162)
107
77,884
17,756
CONSOLIDATED 2022
Less than 1
year
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
> 5 years
$'000
Total
$'000
Carrying
amount
$’000
Interest-bearing liabilities and interest owing
3,452
64,139
866
1,228
69,685
65,319
Interest rate swap
Foreign exchange contracts
Lease liabilities
Trade accounts payable
Total at 31 March 2022
–
274
11,072
21,952
36,750
274
–
–
–
–
–
10,828
28,213
67,941
–
–
–
274
274
118,054
21,952
274
274
81,280
21,952
75,241
29,079
69,169
210,239
169,099
Interest rate risk
The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest
rate risk. During the period, the Group’s borrowings at variable rates were denominated in both NZD and AUD. If interest rates in
New Zealand and Australia increased by 10% the impact would be an additional cost of $0.49 million and a subsequent decrease of
$0.49 million if rates decreased by 10%. (In 2022 an interest rate increase of 10% would have resulted in additional costs of $0.26 million
and a subsequent decrease of $0.26 million if rates decreased by 10%.)
The Group adopts a policy of ensuring that its exposure to changes in interest rates on borrowings is on a fixed-rate basis by entering
into interest rate swaps.
5.2 Lease liabilities
CONSOLIDATED CONSOLIDATED
Opening lease liabilities recognised at 1 April
Additions
Termination
Interest for the period
COVID-19 rent relief
Lease payments made
Foreign exchange impact
Lease liabilities at 31 March 2023
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
2023
$'000
81,280
4,880
(1,303)
4,819
–
(11,699)
(93)
77,884
7,452
70,432
77,884
2022
$'000
60,601
28,613
(799)
3,201
(138)
(10,091)
(107)
81,280
6,535
74,745
81,280
43
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) Lease liabilities maturity analysis
Within one year
One to five years
Beyond five years
Lease liabilities at 31 March 2023
Within one year
One to five years
Beyond five years
Lease liabilities at 31 March 2022
Minimum lease
payments
$'000
11,840
39,616
58,887
110,343
Minimum lease
payments
$'000
11,071
39,041
67,941
118,053
Interest
$'000
Present value
$'000
(4,388)
(13,772)
(14,299
(32,459)
7,452
25,844
44,588
77,884
Interest
$'000
Present value
$'000
(4,536)
(14,788)
(17,449)
(36,773)
6,535
24,253
50,492
81,280
Estimates and judgements: Incremental borrowing rates and lease terms
Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group’s
incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain
an asset of similar value in a similar economic environment with similar terms and conditions.
5.3 Contributed equity
Opening balance
Closing balance
CONSOLIDATED CONSOLIDATED
2023
$'000
307,198
307,198
2022
$'000
307,198
307,198
At 31 March 2023 the Company had issued 185,378,086 fully-paid ordinary shares (2022: 185,378,086 fully-paid ordinary shares).
No shares were issued or cancelled during the year (2022: nil). Ordinary shares entitle the holder to participate in dividends, and
to share in the proceeds of winding up the Company in proportion to the number of shares held. Every holder of ordinary shares
present at a meeting in person or by proxy is entitled to one vote, and on a poll each share in entitled to one vote. The Company
does not have a limited amount of authorised capital.
Accounting policy
Ordinary shares are classified as equity.
Incremental costs directly attributable to the Group’s issue of new shares or acquiring its own shares are shown in equity as a
deduction, net of tax, from the proceeds.
Dividends
Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance date.
Dividend distribution to Group shareholders is recognised as a liability in the Group’s financial statements in the period in which the
dividends are declared by the board.
Metro Performance Glass paid no dividends in 2022 and 2023.
Capital management
The Group’s syndicated revolving loan facility agreement restricts the Group from making a distribution to shareholders unless
the leverage ratio before and after the distribution is below 2.0 (up to 31 December 2021: below 1.5).
The Group and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern,
so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
44
Notes to the Consolidated Financial Statements (continued)2023 Annual Report The Group is subject to capital requirements imposed by the bank syndicate through covenants agreed as part of the lending facility
arrangements. The Group met all externally imposed capital requirements for the twelve months ended 31 March 2023.
The following summarises the key banking covenants:
1.
Interest cover ratio no less than 2.75x to the quarter ended June 2023 and no less than 3.0x for reporting periods thereafter.
2.
The leverage ratio (net debt to pre-NZ IFRS 16 EBITDA, calculated in accordance with the bank syndicate agreement) no greater
than 3.25x to the quarter ended June 2023 and no greater than 2.75x for reporting periods thereafter.
The covenant testing for 2023 is to be normalised by excluding the costs associated with the restructure of the New Zealand business.
The Group's gearing ratio (not part of the banking covenants) and the leverage ratio at 31 March 2023 were as follows:
Interest-bearing liabilities
Add: Prepaid financing costs
Less: Cash and cash equivalents
Adjusted net debt
Equity
Gearing ratio
Interest-bearing liabilities
Add: Prepaid financing costs
Less: Cash and cash equivalents
Adjusted net debt
Adjusted profit before interest, tax, depreciation and amortisation1
Leverage ratio
1. Calculated on pre-IFRS 16 basis, excluding significant items as per bank covenant definitions.
6 OTHER
6.1 Income taxation
(Loss)/Profit before income taxation
Income taxation benefit at the Group's effective tax rate
Tax effect of (non-deductible) and non-assessable items
Prior year adjustment
Income tax benefit/(expense)
Represented by:
Current taxation
Deferred taxation
CONSOLIDATED CONSOLIDATED
2023
$'000
67,370
372
(7,300)
60,442
75,467
44.5%
2022
$'000
65,319
380
(13,064)
52,635
85,529
38.1%
CONSOLIDATED CONSOLIDATED
2023
$'000
67,370
372
(7,300)
60,442
18,720
3.23 : 1
2022
$'000
65,319
380
(13,064)
52,635
13,921
3.78 : 1
CONSOLIDATED CONSOLIDATED
2023
$'000
(10,581)
2,849
(2,826)
10
33
405
(372)
33
2022
$'000
(416)
116
44
(203)
(43)
(794)
751
(43)
45
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) Imputation credit account
The amount of imputation credits at balance date available for future distributions is $28.4 million at 31 March 2023 ($28.3 million
at 31 March 2022).
6.2 Deferred taxation
Consolidated deferred tax assets and liabilities are attributable to the following:
CONSOLIDATED 2023
Assets
$'000
Liabilities
$'000
–
–
108
85
73
21,674
3,478
4,518
29,936
(1,350)
(18,154)
–
(34)
–
–
–
–
(19,538)
CONSOLIDATED 2022
Assets
$'000
–
–
29
269
146
22,526
3,693
5,426
32,089
Liabilities
$'000
(1,731)
(19,393)
–
–
–
–
–
–
(21,124)
Net
$'000
(1,350)
(18,154)
108
51
73
21,674
3,478
4,518
10,398
Net
$'000
(1,731)
(19,393)
29
269
146
22,526
3,693
5,426
10,965
CONSOLIDATED 2023
Opening balance
1 Apr 2022
$'000
Recognised in
profit or loss
$'000
Recognised in
OCI
$'000
Balance
31 Mar 2022
$'000
(1,731)
(19,393)
29
269
146
22,526
3,693
5,426
10,965
324
1,211
79
–
(73)
(850)
(200)
(863)
(372)
57
28
–
(218)
–
(2)
(15)
(45)
(195)
(1,350)
(18,154)
108
51
73
21,674
3,478
4,518
10,398
Property, plant and equipment
Right-of-use assets
Inventory and receivables
Cash flow hedge
Intangibles
Lease liabilities
Provisions and accruals
Tax losses
Property, plant and equipment
Right-of-use assets
Inventory and receivables
Cash flow hedge
Intangibles
Lease liabilities
Provisions and accruals
Tax losses
Movement in temporary differences during the year:
Property, plant and equipment
Right-of-use assets
Inventory and receivables
Cash flow hedge
Intangibles
Lease liabilities
Provisions and accruals
Tax losses
46
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Property, plant and equipment
Right-of-use assets
Inventory and receivables
Cash flow hedge
Intangibles
Lease liabilities
Provisions and accruals
Tax losses
CONSOLIDATED 2022
Opening balance
1 Apr 2020
$'000
Recognised in
profit or loss
$'000
Recognised in
OCI
$'000
Balance
31 Mar 2021
$'000
(1,855)
(13,701)
32
524
(360)
16,409
3,810
5,779
10,638
552
(5,724)
(3)
–
168
6,149
(99)
(292)
751
(428)
32
(0)
(255)
338
(32)
(18)
(61)
(424)
(1,731)
(19,393)
29
269
146
22,526
3,693
5,426
10,965
Accounting policy
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it
relates to items recognised in ‘Other comprehensive income’ (OCI) or directly in equity. In this case, the tax is also recognised in OCI or
directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. No deferred tax liability was recognised on initial recognition of goodwill. Deferred income
tax is determined using tax rates (and laws) that have been enacted, or substantively enacted, by the statement of financial position
date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised for unused tax losses and deductible temporary differences to the extent that it is
probable that future taxable profit will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and liabilities relate to income tax levied by the same taxation authority
on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
6.3 Group reserves
Group reorganisation reserve
On acquisition of Metroglass Holdings Limited in July 2014, the assets and liabilities acquired were measured at their pre-combination
carrying amounts without fair value uplift. The difference between the consideration transferred and the carrying value of the assets
and liabilities acquired of $170.7 million (2022: $170.7 million) was recorded in the group reorganisation reserve.
Accounting policy
Where an acquisition occurs through Group reorganisation, the identifiable assets and liabilities acquired are measured at their
pre-combination carrying amounts without fair value uplift. No new goodwill is recorded. Any difference between the consideration
transferred and the carrying value of the assets and liabilities acquired is recorded in equity.
Share-based payments reserve
The Group currently has a long-term incentive (LTI) plan for selected employees. The plan’s participants are members of the Senior
Leadership Team and other selected senior managers. The reserve is used to record the accumulated value of the plan which
has been recognised in the statement of comprehensive income.
The plan is designed to secure those employees’ retention in Metro Performance Glass and to reward performance that underpins
the achievement of Metro Performance Glass’ business strategy and long-term shareholder wealth creation. Participants are offered
an annual award of a specified number of both performance rights and share options in Metro Performance Glass (in accordance with
the plan rules).
The performance rights enable participants to acquire shares in Metro Performance Glass with no consideration payable, subject
to Metro Performance Glass achieving set performance hurdles and meeting certain vesting conditions.
The share options enable participants to acquire shares in Metro Performance Glass at a market-based exercise price, subject
to Metro Performance Glass achieving set performance hurdles and meeting certain vesting conditions.
47
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) In the event that the respective performance hurdles are not met on the vesting date, retesting will be permitted after a further
six and twelve months from the measurement date.
The following share options and performance share rights (PSR) have been issued and had not lapsed or been exercised at
31 March 2023.
Plan name
2020 LTI plan
2021 LTI plan
2022 LTI plan
2023 LTI plan
Date issued
23-May-19
19-Jun-20
21-May-21
27-May-22
Number of
options
Number of
PSR
Options
exercise price
3,434,556
2,704,717
1,563,033
3,480,717
1,287,961
1,442,516
808,464
1,740,361
$0.45
$0.20
$0.42
$0.25
Vesting date
6-Jun-22
3-Jul-23
4-Jun-24
10-Jun-25
Accounting policy
The long-term incentive plan is an equity-settled share-based payment which provides eligible employees with the opportunity to
acquire shares in the Group, accounted for under NZ IFRS 2. The fair value of shares granted is recognised as an employee benefit
expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the vesting period.
The fair value of the plan has been assessed by an independent valuer.
Share-based payments reserve
Opening balance
Transfer to equity on vesting of employee share purchase scheme
Movement in share-based payments reserve
Closing balance
6.4 Related party transactions
CONSOLIDATED CONSOLIDATED
2023
$'000
1,366
(382)
374
1,358
2022
$'000
1,212
(294)
448
1,366
5R Solutions Limited
5R Solutions Limited (an associate, note 4.4) provides glass waste removal and recycling services to the Group. This arrangement has
not changed following 5R Solutions Limited becoming an associate of the Group during the year ended 31 March 2023. 5R Solutions
Limited charged the Group $1.3 million for services in the year ended 31 March 2023.
The payables balance in relation to services from 5R Solutions Limited was $0.05 million at 31 March 2023.
In addition the Group has a receivable from 5R Solutions Limited in relation to a dividend declared but unpaid in the year ended 31
March 2022. During the year ended 31 March 2023 5R Solutions paid the Group $0.85 million in relation to this previously declared
dividend and there was a balance remaining to be paid of $0.9 million at 31 March 2023 (note 3.7).
Subsidiaries
The Group’s principal subsidiaries at 31 March 2023 and 31 March 2022 are set out below. Unless otherwise stated, they have share
capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interest held equals
the voting rights held by the Group. The country of incorporation or registration is also their principal place of business.
Name of entity
Metropolitan Glass & Glazing Limited
Metroglass Finance Limited
Australian Glass Group Holding Pty Ltd
Australian Glass Group Finance Pty Ltd
Country of
incorporation
New Zealand
New Zealand
Australia
Australia
2023 Interest
2022 Interest
100%
100%
100%
100%
100%
100%
100%
100%
Directors
The names of persons who were directors of the Company at any time during the financial period are as follows: Peter Griffiths,
Angela Bull, Rhys Jones, Graham Stuart, Mark Eglinton, Jenn Bestwick and Julia Mayne.
Angela Bull retired on 4 April 2022. Jenn Bestwick was appointed on 1 May 2022.
48
Notes to the Consolidated Financial Statements (continued)2023 Annual Report Key management and Board of Directors’ compensation
Key management comprises members of the Executive Team, being direct reports of the CEO. The compensation paid to key
management for employee service is shown below:
Salaries and other short-term employee benefits
Management incentive1
Share-based payments
1. Relates to amounts paid pursuant to prior year financial and operating performance.
Board of Directors’ compensation
Directors' fees
6.5 Contingencies
At 31 March 2023 the Group had no contingent liabilities or assets.
6.6 Commitments
At 31 March 2023 the Group had no commitments (2022: $1.1 million).
6.7 Prior period adjustments
Impact on the statement of financial position at 31 March 2022
Trade receivables
Total current assets
Total assets
Deferred income
Total current liabilities
CONSOLIDATED CONSOLIDATED
2023
$'000
2,428
–
333
2,761
2022
$'000
2,459
819
220
3,498
CONSOLIDATED CONSOLIDATED
2023
$'000
602
602
2022
$'000
605
605
2022
as reported
$'000
Debtors
reclassification
change
$'000
34,957
78,061
272,138
2,608
42,481
842
842
842
842
842
2022
Restated
$'000
35,799
78,903
272,980
3,450
43,323
The debtors reclassification arose from a review of the process to identify and reclassify customer deposits from trade receivables to
the deferred income balance. During the current year, this review identified that there was a further $842,000 of deposits that had not
been reclassified to deferred income as at 31 March 2022. There is no impact on the consolidated statement of comprehensive income
or consolidated statement of cash flows as a result of this reclassification.
6.8 Subsequent events
There are no significant subsequent events.
49
Notes to the Consolidated Financial StatementsNotes to the Consolidated Financial Statements (continued) Independent auditor’s report
To the shareholders of Metro Performance Glass Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Metro Performance Glass
Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects,
the financial position of the Group as at 31 March 2023, its financial performance and its cash flows for
the year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
What we have audited
The Group's consolidated financial statements comprise:
●
●
●
●
●
the consolidated statement of financial position as at 31 March 2023;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include significant accounting
policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of agreed upon procedures relating to the
Group’s covenant compliance certificate and financial information attached to a visa application and,
subsequent to 31 March 2023, a comparison of the Group's long-term incentive plan to market
practice. The provision of these other services have not impaired our independence as auditor of the
Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
PricewaterhouseCoopers, 15 Customs Street West, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
50
2023 Annual Report
Description of the key audit matter
How our audit addressed the key audit matter
New Zealand cash generating unit
goodwill impairment test
During the year ended 31 March 2023 an
impairment of $10.0 million was
recognised in relation to the goodwill
balance to reduce the carrying amount of
the Group’s New Zealand cash
generating unit (NZ CGU). Following the
impairment, as at 31 March 2023, the
carrying amount of the NZ CGU’s
goodwill balance amounted to $20.9
million (note 4.3).
This impairment was calculated using a
recoverable amount determined by
management on a ‘value in use’ basis.
The value in use model was based on
discounted future cash flows.
The key assumptions in the impairment
assessment were the compound annual
revenue growth rate over the next three
years, the discount rate and the long-
term growth rate.
As part of the impairment assessment
process, management performed a
comparison of the Group’s net assets to
the market capitalisation of the Company
and prepared an analysis and
explanation of the difference.
Management considered the reasons for
this difference in finalising their
assessment of the recoverable amounts
of the Group’s CGUs.
The impairment testing of the NZ CGU’s
goodwill is considered a key audit matter
due to the materiality of the goodwill
balance, the presence of impairment
indicators, and the significant level of
management estimation and judgement
applied in determining key assumptions
used in the impairment assessment.
Our audit focused on assessing and challenging the
key assumptions used by management in their
impairment assessment. Our procedures included:
● evaluating the appropriateness of the identification
of the Group’s CGUs;
● considering whether the valuation methodology
applied was appropriate;
● agreeing the cash flows included in management’s
impairment model to the board approved plans;
● assessing the Group’s forecasting accuracy by
comparing historical forecasts to actual results and
considering the impact on the current impairment
test’s cash flow forecasts;
● discussing with management the basis for the cash
flow forecasts and the key drivers of change in the
forecasts, including internal and external factors;
● engaging our valuation expert to assist us with:
-
-
assessing whether the discount rates and long-
term growth rates used by management are
reasonable in the context of the forecasts; and
considering management’s paper comparing
the net assets and the market capitalisation of
the Company, in the context of our stand back
assessment of the impairment test;
testing the accuracy of the calculations in
management’s impairment model, and checking
that the carrying amount for the CGU’s net assets
was correctly included in the impairment
assessment;
●
● evaluating the reasonableness of management’s
forecast cash flows by constructing a top-down
forecast based on evidence from external sources
and trends in the Group's operational data and
financial information;
● performing sensitivity analyses for the effect of
reasonably possible changes in key assumptions
on the impairment assessment;
● assessing whether a ‘fair value less costs of
disposal’ approach to the impairment test would
result in a lower or no impairment;
● evaluating the effect of the trading results up to the
date of our report; and
● considering the appropriateness of disclosures in
the consolidated financial statements.
PwC
51
Description of the key audit matter
How our audit addressed the key audit matter
Forecast compliance with bank
financial covenants
As at 31 March 2023 the Group’s net
debt was $60.1 million. Notes 1.1, 5.1
and 5.3 to the consolidated financial
statements explain that the Group’s bank
borrowings comprise a syndicated
revolving loan facility, with certain
financial covenants. This facility expires
in October 2024.
During the year the Group obtained
temporary financial covenant
amendments to ease its financial
covenants on future test dates and as a
result the Group complied with all
financial covenants throughout the year.
As disclosed in note 1.1, the Group has
forecast compliance with these financial
covenants for the foreseeable future and
the Directors have concluded that the
Group will be able to comply with those
financial covenants for at least 12 months
after the approval of the consolidated
financial statements.
Forecast compliance with bank financial
covenants is considered a key audit
matter due to the significant level of
management judgement applied in
estimating the future performance of the
Group which is used to calculate financial
covenant compliance in the future.
We have read the syndicated revolving loan facility
agreement and the amendments to that agreement.
We obtained the Group’s financial covenant
compliance forecast for the next 12 months from the
date of the approval of the consolidated financial
statements. Our procedures included:
● assessing the reasonableness of management’s
forecasts in light of historical performance, our
analysis of the forecasts used in the goodwill
impairment tests, the trading results for the month
of April 2023 and the preliminary financial
information for the month of May 2023;
● calculating the thresholds required to comply with
the financial covenants for the next 12 months and
the headroom between those thresholds and
management’s forecasts;
● evaluating the level of forecasting risk at each test
date by comparing the available headroom against
our sensitivities and stress tests of significant
assumptions regarding forecast earnings, interest
expense and net debt levels; and
reading the disclosures in notes 1.1, 5.1 and 5.3 to
ensure they accurately reflect our understanding of
the circumstances.
●
PwC
52
2023 Annual Report
Our audit approach
Overview
Overall group materiality: $772,000, which represents approximately
2.5% of earnings before interest, tax, depreciation, amortisation and
significant items (impairment of intangible assets and restructuring
and divestment expenses) (EBITDA).
We chose EBITDA as the benchmark because, in our view, it
provides a more stable measure of the performance of the Group
without the impact of significant and irregular expenses. EBITDA is
also a key measure of the performance of the Group.
Following our assessment of the risk of material misstatement, we
performed:
● full scope audits on the Group’s two trading entities
● substantive audit procedures on selected significant balances in
the remaining non-trading entities and on consolidation entries, and
● analytical review procedures on all the remaining non-trading
entities.
As reported above, we have two key audit matters, being:
● New Zealand cash generating unit goodwill impairment test
● Forecast compliance with bank financial covenants
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
PwC
53
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
We performed audit procedures over components considered financially significant in the context of
the Group (full scope audit) or in the context of individual primary statement account balances (audit of
specific account balances). The materiality levels used for the audits of the full scope audits were
calculated by reference to a portion of Group materiality appropriate to the relative scale of these
entities. We visited a selection of locations in New Zealand and Australia for stocktake procedures,
management interviews and performing other audit procedures.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the consolidated financial statements
and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are 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 ISAs (NZ) and ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
PwC
54
2023 Annual Report
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Troy Florence.
For and on behalf of:
Chartered Accountants
14 June 2023
Auckland
PwC
55
CORPOR ATE
GOVERN ANC E
METRO PERFORMANCE GLASS LIMITED:
FY23 CORPORATE GOVERNANCE STATEMENT
Securities Trading Policy
The company’s Securities Trading Policy
governs trading in the company’s shares
and any associated financial products
(during the reporting period these were
Metroglass’ NZX- and ASX-listed shares).
The policy applies to all directors,
employees and contractors of
Metroglass and its subsidiaries
(“Metroglass Personnel”). The policy is
a critical part of ensuring all Metroglass
Personnel are aware of their obligations
and legal requirements and takes into
account the insider trading prohibitions
in the Financial Markets Conduct Act
2013 (NZ) and the Corporations Act 2001
(Australia), and the company’s obligations
under the NZX Code.
The policy also sets out a set of more
stringent rules which apply to directors
and certain employees of Metroglass
when dealing in Metroglass Securities
(“Restricted Persons”). These additional
rules include trading being prohibited
during the “blackout” periods set out in
the policy and consent being obtained
prior to trading with the Restricted
Person required to confirm they hold
no material information.
The policy is reviewed at least every
two years and was last reviewed in
September 2021.
PRINCIPLE 1: CODE OF
ETHICAL BEHAVIOUR
“Directors should set high standards of
ethical behaviour, model this behaviour,
and hold management accountable
for these standards being followed
throughout the organisation.”
Code of Ethics
Metroglass has a Code of Ethics
that establishes a framework of
standards by which the directors,
employees, contractors and advisors
of Metroglass are expected to carry
out their responsibilities. It is not an
exhaustive list of acceptable behaviour;
rather it facilitates decision-making
that is consistent with Metroglass’
values, business goals and legal and
policy obligations.
The Code of Ethics also imposes a
number of obligations on directors,
including requirements that they give
proper attention to the matters before
them; be up to date on their regulatory,
legal, fiduciary and ethical obligations;
undertake training; manage breaches
of the Code of Ethics; and act honestly
and in the best interests of the issuer,
shareholders and stakeholders and as
required by law.
Metroglass monitors compliance
with the Code of Ethics through
its management processes as
well as through the whistleblowing
procedures set out in the Code of
Ethics and separate Whistleblower
Protection Policy. The Code of Ethics
and Whistleblower Protection Policy
were both reviewed and updated in
November 2021.
Metro Performance Glass’
(Metroglass, the company)
board and Senior Leadership
Team (SLT) recognise the
importance of sound corporate
governance and consider it
core to ensuring the creation,
protection and enhancement
of shareholder value.
Together, the board and SLT are
committed to making sure that the
company applies and adheres to
practices and principles that ensure
good governance and maintain the
highest ethical standards to protect the
interests of all stakeholders.
This corporate governance statement
reflects a summary of the company’s
corporate governance framework,
policies and procedures and how
they comply with the NZX Corporate
Governance Code (the Code). The full
corporate governance framework has
been approved by the board and key
policies and charters are available in the
Investor Centre section of the company’s
website at http://www.metroglass.co.nz/
investorcentre/governance/
The information in this section is
current as at 14 June 2023 and has
been approved by the board. Metroglass
considers that, during the year to
31 March 2023 (reporting period),
the company materially complied with
the Code.
Metroglass’ shares are also listed on the
Australian Securities Exchange (ASX)
with ASX Foreign Exempt Listing status.
Given this status, the ASX requires the
company to comply with the NZX Main
Board Listing Rules and confirm its
adherence to these rules annually, and to
comply with a specific subset of the ASX
Listing Rules.
56
2023 Annual Report PRINCIPLE 2: BOARD COMPOSITION
AND PERFORMANCE
“To ensure an effective board,
there should be a balance of
independence, skills, knowledge,
experience and perspectives.”
The board has ultimate responsibility
for the strategic direction of
Metroglass and for overseeing
Metroglass’ management for the
benefit of its shareholders.
Metroglass’ constitution provides
for a minimum of four directors and,
subject to this limitation, the number
of directors to hold office shall be
fixed from time to time by the board.
At least two directors must be ordinarily
residents of New Zealand and at least
two must be independent directors.
The Chair of the board cannot be the
CEO or the Chair of the Audit and
Risk Committee.
The directors bring a wide range of
skills to the board including expertise
in corporate strategy, national and
international business and financial
management, sales, marketing, mergers
and acquisitions, legal, capital markets,
industry experience and corporate
governance. As at 29 May 2023, the
board comprised six independent
directors. Director profiles and length of
service are detailed on pages 10 and 11
of this report.
Board Charter
The board operates under a written
Charter, which describes the board’s
authority, duties, responsibilities,
composition and framework for
operation. This Charter also affirms
that the board, in performing its
responsibilities, should act at all times
in a manner designed to create and
build sustainable value for shareholders
and in accordance with the duties and
obligations imposed on the board by
Metroglass’ constitution and by law.
The Charter is reviewed at least every
two years and was last reviewed in
April 2021.
Management of Metroglass on a day-
to-day basis is undertaken by the CEO
and senior managers through a set
of delegated authorities that clearly
define the CEO and senior managers’
responsibilities and those retained
by the board.
Metroglass’ board-and CEO-delegated-
authority policies are reviewed at least
annually and were last reviewed in
December 2022. The board meets its
responsibilities by receiving reports and
plans from management and through
its annual work programme. The board
uses committees to address issues
that require detailed consideration.
Committee work is undertaken by
directors; however, the board retains
ultimate responsibility for the functions
of its committees and determines their
responsibilities.
Nomination and appointment
of directors
The provisions regarding the election and
retirement of directors are contained in
the Metroglass constitution.
Metroglass strives to ensure that the
company has the right mix of skills and
experience it requires to enable it to
achieve its strategic aims in a prudent
and responsible manner. The board
will review its composition from time
to time and will identify and evaluate
suitable individuals for appointment as
a director as and when an appointment
is to be made. In evaluating a candidate
for appointment as a director, the board
will consider criteria including the skill
sets required at the time as well as the
individual’s experience and professional
qualifications. To support the board in
its deliberations, the directors consider
a skills matrix that sets out the mix of
skills and diversity of the directors and
evaluates whether the collective skills
and experience of the directors meet
Metroglass’ requirements both now
and into the future.
New directors provide the company
with a written consent to act as a
director and receive a formal Letter of
Appointment that sets out the Terms
and Conditions of Appointment and
Remuneration Schedule. It also sets
out the expectations of the company,
the director’s duties, responsibilities
and powers, insurance and indemnity
arrangements, and rights of access
to information. All new board members
are also provided with an extensive
briefing on the company and industry-
related matters within a thorough
induction process.
Selection of Chair
The Metroglass constitution
provides that the directors may elect
a chairperson of the company and also
determine the period for which the
chairperson is to hold office. Peter
Griffiths is an independent director and
is currently the appointed chairperson.
Retirement and re-election
The company’s constitution and NZX
Main Board Listing Rules require a
newly appointed director to stand for
election at the next Annual Shareholders’
Meeting (ASM). Julia Mayne and Jenn
Bestwick were elected as directors
of Metro Performance Glass at the
company’s ASM on 9 August 2022.
Graham Stuart and Mark Eglinton will
each retire by rotation and stand for
re-election at the company’s 2023 ASM.
Director independence
Directors are considered to be
independent if they are non-executive
and do not have an interest or
relationship that could be perceived
to unreasonably influence their
decisions relating to the company or
interfere with their ability to act in the
company’s best interests. An individual
being appointed as an independent
director must be independent according
to NZX definitions and not have any
disqualifying relationships as defined
in the Board Charter.
Directors are required to ensure
that they immediately advise the
board of any relevant new or changed
relationships to enable the board to
consider and determine any impact on
the director’s independence.
As at 14 June 2023, all six directors
are considered by the board to be
independent directors in accordance
with the NZX Main Board Listing Rules.
Information in respect of each director’s
ownership interests are detailed on
page 71 of this report. Metroglass’
directors are not formally required
to own Metroglass shares but are
encouraged to do so.
Director training
The company encourages directors to
continue to develop their knowledge
and skills as a director. With the prior
approval from the Chair, directors
may attend appropriate courses or
seminars for continuing education
at the company’s cost.
57
Corporate Governance Board, director and committee evaluation
In accordance with the Board and Committee Charters, the board annually reviews its performance, policies and practices. It also
reviews annually the performance of each director and board committee. These reviews are carried out both formally and informally.
The last full board performance review was completed in May 2021 with the assistance of governance services firm Propero
Consulting. The next review will take place during the current financial year. The Audit and Risk Committee was last reviewed in
March 2023 and the People and Culture Committee was last reviewed in May 2023.
Directors’ skills matrix as at 31 March 2023
Strategic board skills
Building products and manufacturing
Australian market knowledge
Safety
Commercial/risk – former CEO
Financial expert
Strategic investment banking
B2B marketing and customer insight
People and culture
Governance
Diversity (gender, age, ethnicity etc.)
Key
High capability
Moderate capability
Number of
directors
with high and
moderate
capabilities
Area of future
learning or
potential
appointment
As at 31 March 2023 (and 31 March 2022 for the prior comparative period), the mix of gender among the company’s board and
SLT was:
31 March 2023
Board
Senior Leadership Team
31 March 2022
Board
Senior Leadership Team
58
Female
2
3
Male
4
5
Total
% Female
6
8
33%
38%
Female
Male
Total
% Female
2
3
4
6
6
9
33%
33%
2023 Annual Report • Continuing to build on the progress
made to date with each hiring manager
receiving unconscious bias training.
• Introducing and rolling out a flexible
workplace policy – implemented in
May 2022.
Diversity and inclusion
Metroglass and its board believe that
an equal opportunity workplace in which
differences in gender, age, ethnicity,
nationality, religion, sexual orientation,
physical ability, marital status, experience
and perspective are well represented
results in a competitive advantage and
helps the company to better connect
with its diverse set of customers and
other stakeholders.
The company believes that an ability to
attract and retain a diverse and inclusive
workforce broadens the recruitment
pool of high-calibre candidates, enhances
innovation and improves business
performance. A copy of the company’s
Diversity and Inclusion Policy is available
on the company’s website.
Metroglass has an ethnically diverse
workforce, reflective of the communities
in which it operates, represented by
employees from over 20 countries.
Metroglass is committed to providing
an inclusive and diverse environment
throughout the company. The company’s
focus in FY24 is on making deliberate
and conscious steps towards building a
greater awareness of the importance of
diversity and inclusion in the workplace.
In the 2023 financial year the diversity
and inclusion objectives were:
• To review current recruitment
practices, remove any bias in vacancy
wording or imagery and tell the
Metroglass story by developing videos
showcasing employee diversity.
How is our workforce made up?
Gender (March 2023)
Male: 86%
Female: 14%
Age (March 2023)
25%
25%
10%
21%
15%
16-24
25-34
35-44
45-54
55-65
Note: Workforce diversity data sourced from staff surveys
4%
65+
59
Corporate Governance PRINCIPLE 3: BOARD COMMITTEES
“The board should use committees where this will enhance its effectiveness in key areas, while still retaining board responsibility.”
In the year to 31 March 2023, the board had two standing committees, being the Audit and Risk Committee and the People and
Culture Committee.
Board and Committee Composition and Attendance 12 Months to 31 March 2023
Director
Meetings held
Standing directors
Peter Griffiths
Mark Eglinton
Rhys Jones
Graham Stuart
Julia Mayne
Jenn Bestwick
Past directors
Angela Bull
(c) indicates Chair
Board meetings
attended
Audit and Risk
Committee
meetings attended
People and Culture
Committee meetings
attended
Appointed/
Resigned
6
5/6
6/6(c)
4/4
15
15/15(c)
14/15
15/15
14/15
9/9
15/15
4
4/4(c)
4/4
Appointed: 02/09/16
Appointed: 01/04/20
Appointed: 01/04/18
Appointed: 01/12/19
Appointed: 01/09/21
Appointed 01/05/22
4/4
Appointed: 05/05/17
Resigned: 04/04/22
The Audit and Risk Committee Charter
is reviewed at least every two years and
was last reviewed in November 2022.
The People and Culture Committee is
comprised of at least two, and not more
than four, independent directors.
Takeover protocol
Metroglass has adopted a Takeover
Response Policy to assist in guiding the
board and management in the event
that the company receives an offer or
an approach by a potential acquirer for
a controlling stake in Metroglass. This
policy is reviewed at least every three
years and was last approved by the
board in December 2020.
Members of the Audit and Risk
Committee are appointed by the
board and comprise a minimum of three
members who are each non-executive
directors of Metroglass. A majority of
members must be independent directors
and at least one director must have an
accounting or financial background.
People and Culture Committee
The People and Culture Committee’s
mandate is to assist the board in
ensuring the elements of people,
organisation and culture support the
company’s strategy and business plan.
The committee achieves its goals by
considering capability of the organisation
at the senior levels, the remuneration
strategy required to secure the desired
level of organisational capability,
company values and policies related to
people, and the nominations process for
the appointment and succession planning
of the CEO. The People and Culture
Committee Charter is reviewed at least
every two years and was last reviewed
in April 2023.
The board periodically reviews the
need for additional committees. Each
committee operates under charters
approved by the board, and any
recommendation committee members
make are directed to the board.
Management attendance at committee
meetings is by invite only.
The board’s committees and their
members as at 13 June 2023 were: :
• Audit and Risk Committee:
Graham Stuart (Chair), Jenn Bestwick
and Julia Mayne
• People and Culture Committee:
Mark Eglington (Chair),
Peter Griffiths and Rhys Jones.
Audit and Risk Committee
The Audit and Risk Committee is
responsible for overseeing the risk
management framework, treasury,
insurance, accounting and audit activities
of Metroglass. It reviews the adequacy
and effectiveness of internal controls,
reviews the performance of external
auditors, oversees internal audit
matters, and makes recommendations
on financial and accounting policies.
60
2023 Annual Report PRINCIPLE 4: REPORTING AND
DISCLOSURE
“The board should demand integrity in
financial and non-financial reporting,
and in the timeliness and balance of
corporate disclosures.”
Metroglass is committed to providing
financial reporting that is balanced, clear
and objective and informs shareholders
(both current and prospective) and
market participants of all information
that might have a material effect on the
price of its traded financial products.
The quality, integrity and timeliness of
external reporting and the company’s
compliance with the disclosure and
reporting obligations imposed under
the Listing Rules of NZX, ASX, the
Companies Act and other relevant
legislation are overseen by the Audit
and Risk Committee.
The company’s full-year statements,
which have been prepared in accordance
with the relevant financial standards,
are set out from pages 14 to 49 of
this Annual Report.
Market Disclosure Policy
The board has adopted a Market
Disclosure Policy, available on the
company’s website, which sets out
how the company will comply with its
disclosure and reporting obligations.
Metroglass is committed to ensuring
the timely disclosure of material
information about the Metroglass
Group and to making sure that the
company complies with NZX Main Board
Listing Rules. The Board of Directors
is ultimately responsible for ensuring
Metroglass complies with the Market
Disclosure Policy and continuous
disclosure obligations. The board has
established a Disclosure Committee to
achieve this. The board also considers
at each board meeting whether any
information discussed at the meeting
requires disclosure.
The policy is reviewed at least every two
years and was last reviewed in May 2021.
Non-financial reporting
Metroglass is committed to providing
non-financial disclosures on matters
including strategic and operational
priorities for the year, risk management,
safety and wellbeing, and diversity and
inclusion. In the last year the company
has undertaken work to understand its
carbon emissions profile and has begun to
develop an understanding of climate risk.
The Environmental Sustainability Policy
can be found on the company’s website.
The Group continues to integrate
Environmental, social, and governance
(ESG) principles into its business
operations and will continue to develop
these in future reporting.
assesses risks against all relevant
areas of material business risk.
Metroglass’ main risks and mitigation
plans are reviewed every six months.
Metroglass holds insurance policies to
meet its insurable risks.
The company engages external expertise
where relevant to ensure risks are
adequately understood and managed.
PRINCIPLE 5: REMUNERATION
Safety and wellbeing
“The remuneration of directors and
executives should be transparent,
fair and reasonable.”
The Metroglass board believes its
practices ensure fair and reasonable
remuneration. The company’s
remuneration policies are aimed
at ensuring that the remuneration
of directors and all staff properly
reflects each person’s accountabilities,
duties, responsibilities and their level
of performance. They are also aimed
at making sure that remuneration
is competitive in attracting, motivating
and retaining staff of the highest calibre.
The company’s remuneration policies
and disclosures are covered in the
Remuneration section on pages 64 to 67
of this Annual Report.
PRINCIPLE 6: RISK MANAGEMENT
“Directors should have a sound
understanding of the material risks
faced by the issuer and how to manage
them. The board should regularly
verify that the issuer has appropriate
processes that identify and manage
potential and material risks.”
The identification and effective
management of the company’s risks is
a priority of the board. It is responsible
for identifying the principal risks
of Metroglass’ business, ensuring
an appropriate system of internal
compliance and control in managing and
mitigating risks is in place and monitoring
internal and external reporting, including
reporting to stakeholders.
The board has made the CEO
accountable for all operational and
compliance risks across the Group
including safety and wellbeing (see
below). The Chief Financial Officer (CFO)
has management accountability for the
implementation of the risk framework
across all the company’s businesses.
As part of its risk management
framework, Metroglass continually
The safety and wellbeing of the
company’s people is fundamental to the
business. Accordingly, all regular board
meetings and risk reviews specifically
look at safety and wellbeing matters.
Metroglass has a clearly articulated
safety and wellbeing vision and strategy
which is understood and recognised
throughout the business. This vision is
underpinned by a clear set of principles
and a workplan to embed a strong safety
and wellbeing management system.
The company maintains a safety
and wellbeing risk register for both
New Zealand and Australia, which is
reviewed at least annually. During the
year a comprehensive and systematic
risk assessment of all operations across
the business was completed providing
a considered view of the most critical
safety risks to the business. Also
introduced was a very comprehensive
and structured internal assessment of
all processes and practices that are
important to delivery of safe outcomes.
This ensures focus in the right areas.
Metroglass believes that all injuries
are preventable and that its people
should get home safe every day. The
company has placed focus on mitigating
risks by automating activities and
providing mechanical assistance where
possible to reduce the manual handling
required across the business. The use
of appropriate personal protective
equipment and training in correct manual
handling practices also contributes to
reducing injuries.
Metroglass continues to focus on
other factors affecting the safety
and wellbeing of staff in their working
environment, such as noise and air
quality. A series of environmental
monitoring exercises took place during
the year ensuring staff are working in
safe environments. The company also
offers staff health and wellbeing checks
with occupational health experts.
61
Corporate Governance Group Safety Performance
20.01
10.37
7.24
F19
AGG
15.33
7.94
6.31
F18
NZ
15.74
8.03
6.28
F20
Group
8.68
5.48
4.76
F21
Annual Shareholders’ Meeting
Shareholders have the opportunity
to ask questions of the board and
of the external auditors, who attend
the Annual Shareholders’ Meeting.
The external auditors are available to
answer questions from shareholders
in relation to the conduct of the
audit, the independent audit report
and the accounting policies adopted
by Metroglass.
7.52
5.89
5.89
6.00
3.38
2.50
F22
F23
PRINCIPLE 8: SHAREHOLDER RIGHTS
AND RELATIONS
“The board should respect the
rights of shareholders and foster
constructive relationships with
shareholders that encourage them
to engage with the issuer.”
Metroglass endeavours to keep its
shareholders informed of important
developments concerning the company
and encourages them to follow its
announcements. Metroglass believes
that effective engagement with
investors will benefit both the company
and investors. The Investor Centre
section of the company website
provides easy access to information.
Metroglass also communicates with
its shareholders through periodic
market announcements, periodic
investor briefings or site tours and
annual and interim reports. These are
released in accordance with NZX and
ASX disclosure requirements. The board
welcomes questions at the Annual
Shareholders’ Meeting.
The company’s Chair, CEO, CFO and
Investor Relations Officer currently lead
engagement with shareholders and, in
line with Metroglass’ Market Disclosure
Policy, aim to be responsive, to provide
clear, accurate and timely disclosures,
and to provide meaningful insight into
the company and the industry.
Electronic communications
Shareholders are encouraged to
receive communications from, and
send communications to, the company
and its security registry electronically.
The shareholder contact point at the
company is: glass@metroglass.co.nz.
.
Total Reportable Incident Frequency Rate (TRIFR) is measured by calculating the number of medical treatment cases and
lost-time injuries per 200,000 hours worked.
Climate-related financial risk
PRINCIPLE 7: AUDITORS
Metroglass recognises the importance of
building resilience in its business strategy
and operations, while overlaying the
potential long-term implications of
climate change and the important role its
products play in reducing the operating
carbon within New Zealand’s buildings.
The Group has commenced a programme
of work to ensure that the process and
systems to incorporate climate change
are appropriate for the business and
align with the External Reporting Board’s
standards. In the coming 12 months
Metroglass will focus on developing an
understanding of the potential risks and
opportunities of climate change and
reporting thereof.
The key focus areas in the next year
are to:
• incorporate climate-related risks
into Metroglass’ Enterprise Risk
Management framework
• collection of the Metroglass FY23
greenhouse gas emissions profile
• develop Metroglass’ climate-related
risks and opportunities that can
impact business operations and
strategy
• consider potential and appropriate
metrics and targets
“The board should ensure the quality
and independence of the external
audit process.”
The Metroglass Audit and Risk
Committee is charged with overseeing
all aspects of the external and internal
audit of the company. The Audit and Risk
Committee monitors the independence,
quality and performance of the external
auditors and recommends any change in
auditor appointment or audit fees.
The company does not have a stand-
alone internal audit function. External
advisors are employed to evaluate
and improve the effectiveness of the
company’s risk management and internal
processes. Progress and results on
these projects are reported regularly
to the Audit and Risk Committee or
the board.
The Audit and Risk Committee is
authorised by the board, at Metroglass’
expense, to obtain such outside legal
or other independent information
and advice including market surveys
and reports, and to consult with such
management consultants and other
outside advisors as it views necessary
to carry out its responsibilities.
On at least one occasion each year,
the Audit and Risk Committee meets
with the external auditors without
management present.
62
2023 Annual Report Annual Report
Metroglass’ Annual Reports and
Interim Reports are all available on
the company’s website at: http://www.
metroglass.co.nz/investor-centre/
annual-interim-reports. Shareholders
can elect to receive a printed copy
of these reports by contacting the
company’s share registrar, Link Market
Services. Any shareholder who does
request a hard copy of the Metroglass
Annual Report will be sent one in the
regular post.
Shareholder voting rights
In accordance with the Companies Act
1993, Metroglass’ Constitution and
the NZX Main Board Listing Rules, the
company refers major decisions which
may change the nature of the company
to shareholders for approval.
Metroglass conducts voting at its
shareholder meetings by way of a
poll and on the basis of one share,
one vote. Further information on
shareholder voting rights is set out
in Metroglass’ Constitution.
Notice of Annual Meeting
Metroglass’ previous annual meeting was
held on 9 August 2022. The notice of the
meeting was released to the market on
12 July 2022. Minutes of the meeting are
available on the company’s website at:
https://www.metroglass.co.nz/investor-
centre/annual-shareholders-meeting/.
The 2023 Annual Shareholders’ Meeting
is expected to be held on 1 August 2023
in Auckland. The time and place will be
provided by notice to all shareholders
nearer to that date.
63
Corporate Governance REMUN E RATION
REPORT
DIRECTOR REMUNERATION
The company distinguishes the structure of non-executive directors’ remuneration from that of executive directors. Non-executive
directors are paid a fixed fee in accordance with the determination of the board. The total amount of remuneration and other
benefits received by each director during the year ended 31 March 2023 is set out below.
Director
Standing Directors
Peter Griffiths
Mark Eglinton
Rhys Jones
Graham Stuart
Julia Mayne
Jenn Bestwick
Total
Responsibilities
2023 Directors’ Fees
Chair of the Board, Member of the Audit and Risk Committee
Director, Chair of the People and Culture Committee
Director, Member of the People and Culture Committee
Director, Chair of the Audit and Risk Committee
Director, Member of the Audit and Risk Committee
Director, Member of the Audit and Risk Committee
$160,000
$85,000
$85,000
$100,000
$90,000
$82,500*
$602,500
*
Jenn Bestwick was appointed to the board on 1 May 2022, and as a member of the Audit and Risk Committee with effect from 1 May 2022.
The Chair of the board receives $160,000 per annum (with no additional committee fees paid) and the non-executive directors receive
$80,000 per annum. The Chair of the Audit and Risk Committee receives an additional $20,000 per annum and other members of the
Audit and Risk Committee receive an additional $10,000 per annum. The Chair and members of the People and Culture Committee
receive an additional $5,000 per annum. Directors may also seek the board’s approval for special remuneration should the specific
circumstances justify this (2023: Nil). The company currently has no executive directors on the board.
The board reviews its fees on a periodic basis. The maximum aggregate amount of remuneration payable by Metroglass to the non-
executive directors (in their capacity as directors) is set at $614,000. This fee pool was last changed in May 2017.
Directors’ fees exclude GST, where appropriate. No retirement or termination benefits are paid to non-executive directors. Directors
are entitled to be refunded for reasonable travel and other expenses incurred by them in connection with their attendance at
board or shareholder meetings, or otherwise in connection with the Metroglass business. The company does not offer an equity-
based remuneration scheme for directors. The board considers that director and executive remuneration is appropriate and is not
excessive.
Directors and officers also have the benefit of Directors and Officers’ Liability insurance. This covers risks normally included in such
policies arising out of acts or omissions of directors and employees in their capacity as such. The insurance cover is supplemented by
the provision of director and officer indemnities from the company but this does not extend to criminal acts.
Executive remuneration
The remuneration of members of senior management (CEO, SLT and certain direct reports) is designed to promote a higher-
performance culture, to secure the participant’s retention in Metroglass and to reward performance that underpins the
achievement of Metroglass’ business strategy and long-term shareholder wealth creation. The board is assisted in delivering its
responsibilities and objectives for executive remuneration by the People and Culture Committee.
The CEO’s performance is reviewed annually by the board. The CEO reviews the performance of the SLT and makes recommendations
to the board for approval in relation to the team’s remuneration and achievement of key performance indicators (KPIs).
The compensation structures of the CEO and senior management are made up of three elements:
• a fixed base salary
• a discretionary short-term incentive (STI)
• a long-term incentive (LTI).
64
2023 Annual Report Short-term incentives
Short-term incentives (STI) are at-risk payments designed to motivate and reward for performance, typically within that particular
financial year. The target value of an STI payment is set annually, usually as a percentage of the participant’s base salary. For the
2023 financial year, the relevant percentages varied from 10% to 50%.
The STI plans relate to achievement of annual performance metrics which aim to align executives to a shared set of KPIs based on
business priorities for the next 12 months.
In the 2023 financial year, the sole metric driving the STI plans for both New Zealand and Australia was:
Target
Weighting
FY23 result: NZ
FY23 result: Australia
Earnings before interest and tax (EBIT)
performance
Net Debt
75%
25%
Not Achieved
Not Achieved
Achieved
Not Achieved
The payable rewards for each STI KPI target are determined by the level of performance achieved and are calculated on a
linear scale increasing from the ‘Minimum performance target’ and receiving 25% of the specified reward, up to the ‘Maximum
performance target’ and receiving 100% of the specified reward.
For the FY23 plan, a multiplier was available dependent on overall TRIFR (Total Recordable Injury Frequency Rate) improvement
measured against the FY22 result with a target being a minimum 10% improvement. The safety performance multiplier was set
between 90% and 110% dependent on performance against the 10% improvement target.
The board retains discretion on the payment of STI awards and will consider additional factors. For example, STI payments may be
withheld if there was a death or permanent material disability of any worker (exceptions may be made for a motor accident and
acts of God beyond management control).
Long-term incentives (LTI)
The company’s LTI plan for the 2023 financial year was announced on 4 July 2022. The LTI plan is made up of both performance share
rights and share options. The LTI is designed to secure those employees’ retention in Metroglass and to reward performance that
underpins the achievement of Metroglass’ business strategy and long-term shareholder wealth creation. The key features of the
2023 LTI plan are as follows:
• Participants will be offered an annual award of a specified number of both performance rights and share options in Metroglass
(in accordance with the LTI rules).
• The performance rights will enable participants to acquire shares in Metroglass with no consideration payable, subject to
Metroglass achieving set performance hurdles and meeting certain vesting conditions.
• The share options enable participants to acquire shares in Metroglass at a specified exercise price, subject to Metroglass
achieving set performance hurdles and meeting certain vesting conditions.
A total of 13,409,083 share options and 6,235,998 performance share rights remain outstanding pursuant to the 2020, 2021, 2022
and 2023 LTI plans as at 13 June 2023.
Chief Executive Officer’s remuneration
Metroglass’ CEO Simon Mander joined the company on 19 November 2018.
Fixed CEO remuneration for the past five financial years (12 months to 31 March):
Financial year
FY23
FY22
FY21
FY20
FY19
* Pro-rated for a partial year.
** Other benefits include medical insurance and KiwiSaver.
Fixed remuneration
CEO
Current
Current
Current
Current
Current
Salary
$650,000
$650,000
$650,000
$650,000
$214,166*
Other
benefits**
Total fixed
remuneration
$28,194
$29,203
$26,132
$25,682
$8,173
$678,194
$679,203
$676,132
$675,682
$222,339
65
Remuneration Report Description of CEO’s remuneration for performance for the year ended 31 March 2022:
Plan
STI
LTI
Description
Set at 50% of fixed remuneration for FY23
the STI targets were not achieved
Performance measures
75%: EBIT performance
25%: Net Debt performance
Issued 27 May 2022. The first vesting date is
10 June 2025 and no instruments have yet
had the chance to vest
50% share options require Metroglass’
Total Shareholder Return (TSR) to exceed
a compound annual pre-tax rate that is 1%
above the company’s cost of equity
50% performance share rights measured
against NZX 50 Group TSR hurdle
Percentage
of maximum
awarded
Nil
n/a
n/a
Financial year of STI payment
CEO
FY24
FY23
FY22
FY21
FY20
FY19
FY18
Current
Current
Current
Current
Current
Former
Former
Pay for performance – short-term incentives
Relevant
performance
period
% STI awarded
against
maximum
FY23
FY22
FY21
FY20
FY19
FY18
FY17
0%
0%
99.5%
0%
59%
0%
10%
STI paid
$0
$0
$323,276
$0
$96,364*
$0**
$28,563
* Pro-rated for 4 months out of 12 following the CEO joining in November 2018.
** A separate one-off incentive payment was awarded to the departing CEO in the 2019 financial year as described in detail in the 2018 Annual Report.
Pay for performance – long-term incentives
FY23
FY22
FY21
FY20
FY19
FY18
FY17
CEO
Current
Current
Current
Current
Current
Former
Former
LTI
(initial grant
values)*
% LTI
vested against
maximum
162,500
162,500
162,500
162,500
Nil
125,000
125,000
n/a
n/a
n/a
n/a
n/a
Nil**
Nil**
Span of LTI
performance periods
11/06/22 – 10/06/25
05/06/21 – 04/06/24
04/07/20 – 03/07/23
07/06/19 – 06/06/22
n/a
08/06/17 – 08/06/20
10/06/16 – 10/06/19
* These are LTI grant values (not payments), which require relevant hurdles to be met over specific performance periods. Performance with regard to the FY20 LTI scheme will be tested
in the FY24 year.
** These holdings were cancelled when the former CEO left the company (the three-year holding hurdle was not met).
66
2023 Annual Report Employees’-remuneration
The number of employees or former employees (including employees holding office as directors of subsidiaries) who received
remuneration and other benefits in their capacity as employees, the value of which was at or in excess of $100,000 and was paid to
those employees during the financial year ended 31 March 2023, is specified in the table below.
The remuneration figures shown in the “Remuneration” column include all monetary payments actually paid during the course of the
2023 financial year. This includes salary, STI payments that were paid during the year, and the value of performance share rights and
share options (LTI) expensed during the financial year. Remuneration shown below includes settlement payments and payments in
lieu of notice with respect to certain employees on their departure from the company but does not include any amounts paid post
31 March 2023 that relate to the year ended 31 March 2023.
Remuneration
$100,000-110,000
$110,000-120,000
$120,000-130,000
$130,000-140,000
$140,000-150,000
$150,000-160,000
$160,000-170,000
$170,000-180,000
$180,000-190,000
$190,000-200,000
$200,000-210,000
Number of employees
Remuneration
Number of employees
41
37
29
18
21
16
12
2
6
4
1
$210,000-220,000
$220,000-230,000
$230,000-240,000
$240,000-250,000
$250,000-260,000
$260,000-270,000
$300,000-310,000
$330,000-340,000
$340,000-350,000
$470,000-480,000
$810,000-820,000
5
2
1
4
1
1
1
1
1
1
1
67
Remuneration Report STATU TORY
INFORMATIO N
SECURITIES EXCHANGE LISTING
Metroglass’ shares are listed on the New Zealand Securities Exchange (NZX) and Australian Securities Exchange (ASX).
Shares on issue as at 31 March 2023:
Register
New Zealand
Australia
Total
Security
MPG (NZX)
MPP (ASX)
MPG (Dual)
Holders
Units
2,619
110
2,729
183,255,501
2,122,585
185,378,086
Securities issued, and still outstanding, under the 2017 – 2022 long-term incentive plans as at 31 March 2023:
Long-Term Incentive Scheme
2019 Performance Share Rights
2019 Share Options
2020 Performance Share Rights
2020 Share Options
2021 Performance Share Rights
2021 Share Options
2022 Performance Share Rights
2022 Share Options
2023 Performance Share Rights
2023 Share Options
Security
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
MPG (NZX)
Holders
24
24
27
27
9
9
11
11
11
11
Units
374,275
1,193,009
1,287,961
3,434,556
1,442,516
2,704,717
808,464
1,563,033
1,536,997
3,073,991
68
2023 Annual Report Top 20 Shareholders
Metroglass’ top 20 registered shareholders as at 31 March 2023 were as follows:
Rank
Investor name
1
2
3
4
5
6
7
8
9
10
11
12
13
13
13
14
15
16
16
16
Masfen Securities Limited
HSBC Nominees (New Zealand) Limited1
Takutai Limited
Accident Compensation Corporation1
New Zealand Depository Nominee
Custodial Services Limited
Hui Wen Yang
Da Wei Chu Su
FNZ Custodians Limited
ASB Nominees Limited
William Orr & Amy Amelia Orr
Leveraged Equities Finance Limited
Trevor John Logan
Daniel Charles Skinner
Eric Francis Barratt & Hyun Ju Barratt
Kevin John Summersby
Quant Advisory Limited
Jonathan Mapp
Gmh 38 Investments Limited
Bowenvale Investments Limited
Shares at
31 March 2023
25,401,929
21,799,080
20,289,230
%
Shares
13.70
11.76
10.94
9,576,778
4,440,738
2,399,239
1,768,999
1,720,000
1,659,793
1,522,267
1,500,000
1,411,324
1,400,000
1,248,788
1,200,000
1,101,500
1,100,000
1,001,000
1,000,000
1,000,000
5.17
2.40
1.29
0.95
0.93
0.90
0.82
0.81
0.76
0.76
0.67
0.65
0.59
0.59
0.54
0.54
0.54
Totals: Top 20 registered holders of ordinary shares
102,540,665
55.31%
Totals: Remaining holders’ balance
82,837,421
44.69%
1 Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial depository service which allows electronic trading of securities by its
members and does not have a beneficial interest in these shares. As at 31 March 2023, a total of 33,750,854 Metroglass shares (or 18.21% of the ordinary shares on issue) were held
through NZCSD.
Substantial shareholders
According to the records kept by the company under the Financial Markets Conduct Act 2013 the following were substantial
holders in the company as at 31 March 2023. Shareholders are required to disclose their holdings to Metroglass and to its share
registrar by giving a ‘Substantial Shareholder Notice’ when:
• they begin to have a substantial shareholding (5% or more of Metroglass’ shares)
• there is a subsequent movement of 1% or more in a substantial holding, or if they cease to have a substantial holding
• there is any change in the nature or interest in a substantial holding.
Investor name
Masfen Securities Limited
Takutai Limited
Bain Capital Credit, LP
Accident Compensation Corporation
Number of shares
as at 31 March 2022
25,401,929
20,289,230
21,162,862
9,576,778
%
13.70
10.94
11.42
5.17
Date of most
recent notice
17/02/20
16/12/22
30/11/18
19/08/22
69
Statutory Information Distribution of shareholders
As at 31 March 2023:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 50,000
50,001 – 100,000
Greater than 100,000
Total
Voting rights
Number of
holders
231
864
476
822
156
180
%
8.46
31.66
17.44
30.12
5.72
6.6
Number of
shares
149,979
2,483,842
3,901,518
20,233,762
11,623,337
146,985,648
%
0.08
1.34
2.10
10.91
6.27
79.29
2729
100.00%
185,378,086
100.00%
Section 15 of the company’s constitution states that a shareholder may vote at any meeting of shareholders in person or through
a representative. Metroglass conducts voting by way of a polls; using this method every shareholder present (or through their
representative) has one vote per fully-paid-up share they hold. Unless the board determines otherwise, shareholders may not
exercise the right to vote at a meeting by casting postal votes. More detail on voting can be found in Metroglass’ constitution
available on the company’s website at: www.metroglass.co.nz/investor-centre/governance/.
Trading statistics
Metroglass is listed on both the NZX and ASX. The trading ranges for the period 1 April 2022 to 31 March 2023 are as follows:
Minimum:
Maximum:
Range:
Total shares traded
NZX (NZD)
ASX (AUD)
$0.163 (28/03/23)
$0.17 (14/11/22)
$0.305 (6/04/22)
$0.295 (1/04/22)
$0.163 – $0.305
$0.12 – $0.295
196,389,446
366,222
1 Trading in Metroglass shares on the ASX is less liquid than it is on the NZX. The final date on which shares were traded on the ASX during the 12 months to 31 March 2023 was
02 March 2023.
Dividend Policy
Dividends and other distributions with respect to the shares are only made at the discretion of the board of Metroglass.
Any dividend can only be declared by the board if the requirements of the Companies Act 1993 are also satisfied. The board’s
decision to declare a dividend (and to determine the quantum of the dividend) for shareholders in any financial year will depend on,
among other things:
• all statutory or regulatory requirements
• the financial performance of Metro Performance Glass
• one-off or non-recurring events
• metroglass’ capital expenditure requirements
• the availability of imputation credits
• prevailing business and economic conditions
• the outlook for all of the above
• any other factors deemed relevant by the board.
Over the past 5 financial years, the company has prioritised debt reduction. As the economic and construction cycle is expected to
decline, the company is working towards a leverage ratio for the group (as measured by net debt to rolling 12-month EBITDA) at the
lower end of its 1-2x range. At 31 March 2023, this ratio was 3.2x (on a pre-IFRS 16 basis).
No dividends have been declared in respect of the 2023 financial year.
70
2023 Annual Report NZX and ASX waivers
Metroglass does not have any waivers from the requirements of the NZX Main Board Listing Rules and has waivers in place with the
ASX that are standard for a New Zealand company listed on the ASX.
Metroglass has an ASX Foreign Exempt Listing on the ASX. This category is based on a principle of substituted compliance,
recognising that for secondary listings, the primary regulatory role and oversight rest with the home exchange. Metroglass
continues to have a full listing on the NZX Main Board.
Disclosure of directors’ interests
Directors disclosed, under section 140(2) of the New Zealand Companies Act 1993, the following interests as at 31 March 2023:
Director and company
Mark Kenneth Eglinton
NDA Group Limited
Sail City No. 36 Limited
Snapper Rock International Limited
Young Enterprise Trust
Peter Ward Griffiths
Another New Plane Co Limited
Great Barrier Airlines Limited
New Zealand Business and Parliament Trust
NZDS Properties (No. 2) Limited
Resin & Wax Holdings Limited
Rhys Jones
Resin & Wax Holdings Limited
Ridley Corporation Limited
Vulcan Steel Limited
Vulcan Steel Pty Limited
Lisa Julia Mayne
5R Solutions Pty Limited
Graham Robert Stuart
EROAD Limited
Leroy Holdings Limited
Northwest Healthcare Properties Management Limited
Tower Limited
Vinpro Limited
H4G Limited
Jenn Elizabeth Bestwick
Tonkin & Taylor Group Limited
Jenn Bestwick Limited
Arrow Irrigation Company Limited
Ministry of Housing and Urban Development
Position
Director / Shareholder / Officer
Director / Shareholder
Chair
Trustee
Director / Shareholder
Director / Shareholder
Chair / Trustee
Director / Shareholder
Director
Director / Shareholder
Director
Director / Shareholder
Director / Shareholder
Director
Chair
Director / Shareholder
Chair
Director
Director
Chair
Director
Director / Shareholder
Director
Chair of Risk and
Assurance Committee
71
Statutory Information Subsidiaries and subsidiary directors
Section 211(2) of the Companies Act 1993 requires the company to disclose, in relation to its subsidiaries, the total remuneration
and value of other benefits received by the directors and former directors, together with particulars of entries in the interests
registers made, during the year ended 31 March 2023.
No Group employee appointed as a director of Metro Performance Glass Limited or its subsidiaries receives or retains any
remuneration or other benefits in their capacity as a director, and each is a full-time Group employee. The remuneration and
other benefits of such employees and former employees (received as employees) totalling NZD 100,000 or more during the year
ended 31 March 2023 is included in the remuneration bandings disclosed on page 67 of this Annual Report.
As at 31 March 2023, Metroglass’ subsidiary companies and subsidiary directors were:
Company
Australian Glass Group (Holdings) Pty Limited
Australian Glass Group Finance Company Pty Limited
Australian Glass Group Investment Company Pty Limited
Canterbury Glass & Glazing Limited
Christchurch Glass & Glazing Limited
Hawkes Bay Glass & Glazing Limited
I G M Software Limited
Metroglass Finance Limited
Metroglass Holdings Limited
Metropolitan Glass & Glazing Limited
Taranaki Glass & Glazing Limited
Directors
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Simon Mander, Brent Mealings
Directors’ shareholding in Metroglass
The directors’ respective interests in Metroglass shares as at 31 March 2023 are as follows::
Number of shares
in which a relevant
interest is held Acquisition dates
Disposal dates
40,000 28/05/21
321,164 Twelve dates between 16/05/16 and 01/07/22
58,000 31/08/18
100,000 28/02/20
25,000 23/02/22
n/a
n/a
n/a
n/a
n/a
Mark Eglington
Peter Griffiths
Rhys Jones
Graham Stuart
Julia Mayne
Donations
For the year ended 31 March 2023, Metroglass, including its subsidiaries, made donations of $7,223 (2022: $6,965).
Net tangible assets per security
Net tangible assets per security at 31 March 2023: 16.79 cents (31 March 2022: 16.62 cents).
Currency
Within this Annual Report, all amounts are in NZD unless otherwise specified.
Credit rating
Metroglass has not requested a credit rating.
72
2023 Annual Report Company Directory
COMPA NY
DIRECTO RY
Registered Office
5 Lady Fisher Place
East Tamaki
Auckland 2013
New Zealand
Email: glass@metroglass.co.nz
Phone: +64 927 3000
Board of Directors
Peter Griffiths – Chair and Member of the People and
Culture Committee
Rhys Jones – Non-Executive Director and Member of the
People and Culture Committee
Graham Stuart – Non-Executive Director
and Chair of the Audit and Risk Committee
Mark Eglinton – Non-Executive Director
and Chair of the People and Culture Committee
Julia Mayne - Non-Executive Director
and Member of the Audit and Risk Committee
Jenn Bestwick - Non-Executive Director
and Member of the Audit and Risk Committee
Senior Leadership Team
Simon Mander – Chief Executive Officer
Brent Mealings – Chief Financial Officer
Ruben Fergusson – GM Market Strategy
Robyn Gibbard – GM Upper North Island
Nick Hardy-Jones – GM South Island
Amandeep Kaur – Group Safety and Wellbeing Manager
Andreas Paxie – GM Lower North Island
Dayna Roberts – Human Resources Director
Auditor
PricewaterhouseCoopers
15 Customs Street West
Auckland 1010
New Zealand
Lawyers
Bell Gully
Vero Centre
48 Shortland Street
Auckland 1140
New Zealand
Bankers
ASB Bank Limited
Westpac New Zealand Limited
Westpac Banking Corporation
Share registrar
Link Market Services
Level 30, PwC Tower
15 Customs Street West
Auckland 1010
PO Box 91976, Auckland 1142
New Zealand
Further information online
This Annual Report, all our core governance documents
(our constitution, some of our key policies and charters), our
Investor relations policies and all our announcements can be
viewed on our website:
www.metroglass.co.nz/investor-centre/
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Investor calendar
2023 Annual Shareholders’ Meeting
1 August 2023
2024 Half Year balance date
30 September 2023
2024 Half Year results announcement
November 2023
2024 Full Year balance date
31 March 2024
2024 Full Year results announcement
May 2024
73
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