ANNUAL REPORT
2022
NTAW’s vision is to be the tyre
and wheel industry leader in
digital transformation
iii
Contents
Chairman’s letter
Managing Director’s report
Director’s report
Auditor’s independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report
Shareholder information
Corporate directory
iii
iv
vi
2
21
22
23
24
25
26
70
71
76
78
Chairman’s letter
Dear Shareholder
Your Company enjoyed unusually favourable trading conditions throughout the 2021 financial year and, as expected, these did not
prevail in 2022. In a less favourable market, the Group delivered an operating net profit after tax but before amortisation of $15.6
million in 2022 (2021: $21.9 million).
Enhancing customer experiences through value-adding services remains the focus of NTAW’s business units. We entered 2022
executing various projects that are expected to provide competitive advantages and growth well into the future. During the year,
two significant but largely unexpected opportunities were secured – the acquisition of Black Rubber in Australia and Carter’s in
New Zealand.
These new businesses have a proven track record of profitability based on delivering value-adding services to commercial
customers. These services are centred on truck and bus tyre performance management, enabling customers to predict the cost of
their tyre consumption and understanding the value of tyre choices. In some cases, this translates to arrangements where
customers pay a cents per kilometre fee for the use of a tyre instead of buying it. These capabilities fit well with our Group wide
strategic objectives.
Projects driving towards organic growth include our vision to lead the industry in digital transformation – a major investment in a
new enterprise resource planning platform that will help our B2B customers grow from useful information that makes sense to
them; support for the virtual interactions they have with their customers; and participation in a digital environment that will save
costs and improve cash flows.
We understand that most things do not happen at a distance in the tyre industry and we are maintaining our personal interactions
with all our customers. We continue to focus on building the brands of our exclusive suppliers and enabling consumers to make
the right choice of tyre, at the right place and time. After a period of detailed review, and following the acquisitions this year, we
see great opportunity to grow the Group’s commercial retail business.
Directors were pleased to declare an interim dividend of 3.00 cents per share and a final dividend of 1.50 cents per share (both
fully franked) which were paid to shareholders on 8 April 2022 and 7 October 2022, respectively. The full year dividend represents
a payout ratio of 54% of net profit after tax but before amortisation, which is in line with Company policy of paying out 40% - 60%
of NPATA.
Your Board, management and other employees have worked diligently and constructively during the year and that effort is
appreciated.
Your Company is expected to benefit from the recent acquisitions and various projects launched over the past 18 months,
including digital transformation, warehouse consolidations, cross-selling between business units and other integration initiatives.
I would like to thank our staff, customers, suppliers and shareholders for the support they have delivered over the past year.
Yours faithfully
Murray Boyte
Chairman
iv
Chairman’s letter (cont)
Enhancing customer
experiences through value
adding services remains the
focus of NTAW
v
Managing Director’s report
Introduction
Retail
W/sale
Budget
Consol
Adjusted
87
23
26
36
157
53
40
422
Retail % of NTAW
16%
4%
5%
6%
28%
9%
7%
75%
Wolsale
87
23
26
36
157
During the 2022 financial year, your Company achieved significant milestones, cementing its position as the largest independent
tyre and wheel wholesaler in Australia and New Zealand and making advances towards its goal of leading the industry in digital
transformation.
AU Market
NTAW
NZ Market
NTAW
5,000
93
2%
1,000
58
6%
3,250
329
10%
650
66
10%
NTAW1 remains committed to constantly improving customer experiences by supplying a complete assortment of goods and
53
services through multiple distribution channels, meeting the needs of B2B and B2C customers.
40
104%
93
During the year, progress towards these goals was achieved as NTAW:
NTAW Total
329
22
Consol
Budget
4%
continued to grow and diversify via the acquisition of Black Rubber and Access Alloys in Australia, as well as Carter’s in
10%
8%
New Zealand;
22%
Australia Revenue
NZ Revenue
South Africa
AU Market
NTAW
17
4
21%
422
124
14
560
44
66
embarked on the first phase of an important digital transformation project, building the foundations of a Group-wide
14
3%
enterprise resource planning platform;
60
4%
244
100%
27%
316
73%
4
ETD AU
ETD NZ
T4U AU
T4U NZ
DWC
-
24
20
ETD NZ
86
Carters
71
T4U NZ
NEW ZEALAND
-
TLS
restructured the Tyres4U and Tyreright businesses with a new management team focused on improving the profitability
of both wholesale and retail operations, while recognising the mutually beneficial dependencies that exist between them;
104%
329
SWT
TRT
BR
Carters
26
18
18
Australia Revenue
continued to grow the Tyreright retail platform to 60 with 7 new Licensees, while reducing the number of company
NZ Revenue
23
owned Tyreright stores from 31 to 20, improving profits in that business; and
South Africa
44
66
NTAW REVENUE COUNTRY SEGMENTATION
consolidated warehouses in Sydney and Melbourne and signed agreements to lease new premises to consolidate
warehouses in Perth and Brisbane.
New Zealand
14
19%
154.55
240.45
96.85
54.15
546
4%
10%
37.7
8%
20.3
22%
22
58
44
124
12
29.15
23.85
South Africa
2%
21%
30
10
3%
4%
14
58
22
14
NZ Market
NTAW
NTAW Total
Adjusted
87
23
26
36
157
53
40
422
Retail % of NTAW
16%
4%
5%
6%
28%
9%
7%
75%
53
40
93
75%
Wolsale
22%
87
3%
23
26
36
157
58
22
58
ETD AU
44
DWC
124
IOE
SWT
T4U AU
14
TR
560
BR
AUSTRALIA
-
-
-
104
27
26
36
217
53
44
507
IOE
22
70
44
136
17
4
60
4
12
97
87
22
AUSTRALIA
ETD AU
DWC
IOE
SWT
T4U AU
TR
BR
ETD NZ
Carters
T4U NZ
TLS
NEW ZEALAND
Commercial Wholesale
Consumer Wholesale
Commercial Retail
Consumer Retail
South Africa
New Zealand
Australia
Commercial Wholesale
Consumer Wholesale
Commercial Retail
Consumer Retail
104
27
26
36
217
53
44
507
22
70
44
136
14
657
11439
104771
441699
154.55
240.45
96.85
54.15
546
Operations - Overview
657
100%
NTAW operates 12 business units specialising in wholesale and retail sales of commercial and consumer tyres and wheels. The
commercial category includes heavy and light truck and bus tyres, agricultural and off-the-road tyres, industrial tyres (e.g. forklifts)
and tyre and wheel original equipment packages. The consumer category includes passenger, SUV and 4WD tyres and wheels.
T4U AU
ETD AU
T4U NZ
Carters
ETD NZ
Australia
79%
DWC
SWT
27%
73%
560
244
316
TRT
IOE
BR
97
NTAW business unit revenue segmentation amongst these categories, and amongst Australia, New Zealand and South Africa, can
37.7
be summarised as follows:
20.3
29.15
23.85
30
10
22
87
23
NTAW REVENUE COUNTRY SEGMENTATION
86
71
24
20
18
18
26
Retail
W/sale
5,000
93
2%
1,000
58
6%
3,250
329
10%
650
66
10%
422
124
14
560
75%
22%
3%
154.55
240.45
96.85
54.15
546
Commercial Wholesale
Consumer Wholesale
Commercial Retail
Consumer Retail
South Africa
New Zealand
Australia
REVENUE SEGMENTATION
11439
Consumer Retail
104771
10%
441699
Commercial Retail
18%
Commercial Wholesale
Consumer Wholesale
Commercial Retail
Consumer Retail
154.55
240.45
96.85
54.15
546
Commercial
Wholesale
28%
Consumer
Wholesale
44%
South Africa
2%
New Zealand
19%
Australia
79%
1 National Tyre & Wheel Limited and its controlled entities, the “Company” or the “Group”
REVENUE SEGMENTATION
1
Consumer Retail
10%
vi
Commercial Retail
18%
Commercial
Wholesale
28%
Consumer
Wholesale
44%
Managing Director’s report (cont)
Each business unit focusses on a winnable segment of the tyre and wheel industry, operating as a separate legal entity.
Each business unit focusses on a winnable segment of the tyre and wheel industry, operating as a separate legal entity.
Each business unit focusses on a winnable segment of the tyre and wheel industry, operating as a separate legal entity.
DYNAMIC
Wheel Co.
Hottest and toughest
Commercial and
consumer wholesale
(Australia and New
Zealand)
Consumer wheel
wholesale in Australia
and New Zealand
B2B product expertise, operational support, value adding services,
values assurance to end users - Black Rubber in Australia, Solid Plus
in ANZ and Carter’s in New Zealand
Building Leading Brands
Consumer wholesale with
a focus on 4WD products in
Australia, New Zealand and
South Africa
Consumer and
commercial retail
Original equipment
solutions for caravan and
trailer manufacturers in
Australia
Cost leadership, operational
excellence in budget tyres
(South Australia and Western
Australia)
The business units are supported by shared service units, comprising of marketing, people and culture, supply chain and logistics,
The business units are supported by shared service units, comprising of marketing, people and culture, supply chain and logistics,
The business units are supported by shared service units, comprising of marketing, people and culture, supply chain and logistics,
innovation and IT and finance and administration.
innovation and IT and finance and administration.
innovation and IT and finance and administration.
A new logistics unit is being established to manage the Group’s distribution platform of 26 distribution centres (with 5 integrated
A new logistics unit is being established to manage the Group’s distribution platform of 26 distribution centres (with 5 integrated
A new logistics unit is being established to manage the Group’s distribution platform of 26 distribution centres (with 5 integrated
retreading factories) in three countries.
retreading factories) in three countries.
retreading factories) in three countries.
NTAW GROUP : DISTRIBUTION FOOTPRINT
WESTERN
AUSTRALIA
NORTHERN
TERRITORY
SOUTH
AUSTRALIA
QUEENSLAND
NEW SOUTH
WALES
NEW ZEALAND
DISTRIBUTION CENTRES & WAREHOUSES
VICTORIA
WAREHOUSE CONSOLIDATIONS
BLACK RUBBER RETREADS
TASMANIA
SOUTH AFRICA
NTAW imports over 2.7 million tyres and wheels per annum, with activities supported by a workforce of 890 people.
NTAW imports over 2.7 million tyres and wheels per annum, with activities supported by a workforce of 890 people.
NTAW imports over 2.7 million tyres and wheels per annum, with activities supported by a workforce of 890 people.
Products are sold through a number of B2B and B2C channels, reflecting the mix of consumer and commercial customers. NTAW
Products are sold through a number of B2B and B2C channels, reflecting the mix of consumer and commercial customers. NTAW
Products are sold through a number of B2B and B2C channels, reflecting the mix of consumer and commercial customers. NTAW
sells over 100 brands with about 50,000 separate stock keeping units. Many exclusive supplier relationships have existed for more
sells over 100 brands with about 50,000 separate stock keeping units. Many exclusive supplier relationships have existed for more
sells over 100 brands with about 50,000 separate stock keeping units. Many exclusive supplier relationships have existed for more
than 25 years, some underpinned by formal agreements and others by a lengthy tenure. In all cases, NTAW strives to create and
than 25 years, some underpinned by formal agreements and others by a lengthy tenure. In all cases, NTAW strives to create and
than 25 years, some underpinned by formal agreements and others by a lengthy tenure. In all cases, NTAW strives to create and
meet reasonable supplier expectations. Customer concentration is also low, with the largest customer representing 3% of revenue
meet reasonable supplier expectations. Customer concentration is also low, with the largest customer representing 3% of revenue
meet reasonable supplier expectations. Customer concentration is also low, with the largest customer representing 3% of revenue
and no other customer accounting for more than 2% of revenue.
and no other customer accounting for more than 2% of revenue.
and no other customer accounting for more than 2% of revenue.
vii
2
2
2
AU & NZ
AU & NZ
AU & NZ
AU & NZ
Cooper & Mastercraft
Mickey Thompson
Dynamo
Terrafirma
Prinx Chengshan
Federal
Dynamic steel and alloy wheels
Raceline Wheels (new for 2021)
40 # brands
Sales
53,755,398
28,434,946
11,299,890
3,178,948
???
ETD
ETD
ETD
ETD
ETD
ETD
DWC
DWC
DWC
DWC
DWC
DWC
DWC
DWC
DWC
DWC
DWC
DWC
OE
SWT
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UAU
T4UNZ
T4UNZ
T4UNZ
BR
BR
BR
BR
BR
BR
BR
Procomp Wheels
Dirty Life wheels
ION wheels
MT Wheels
ICON
ELITE
Spyder
DC Wheels
American Outlaw
General Tire AT/X
MPC
Mazzini
GT Radial / Giti
Arivo
Double Coin
Sunwide
Tracmax
Radar
Advance
Boto
Alliance
Nokian
Wanda
Mitas
Falken
Pirelli Truck
Nexen
Michelin
Aeolus
Joyall
Ovation
Windpower
BFG
Recamic
CARTERS Goodyear OTR
Cooper family (Ex. MT)
Mickey Thompson
Other exclusive brands
Proprietary brands
Other suppliers
Managing Director’s report (cont)
53,755,398
28,434,946
245,556,934
32,993,456
197,168,266
557,909,000
10%
5%
44%
6%
35%
FY22 Supplier Mix by Revenue
FY22 SUPPLIER MIX BY REVENUE
Cooper family (Ex. MT)
Cooper family (Ex. MT)
Mickey Thompson
Mickey Thompson
5,992,644
32,993,456
Other suppliers
Other suppliers
Proprietary brands
Proprietary brands
Other exclusive brands
Other exclusive brands
Sample of suppliers
PLT & TBR
PLT & TBR
PLT & TBR & Ind
PLT
PLT
PLT
TBR
TBR & Ind
Industrial
Industrial
6%
T4UNZ
21,087,880
20,340,338
T4UAU
6,563,786
18,815,021
10,639,363
1,883,462
1,809,632
27,100,730
5,158,894
17,595,720
4,409,109
11,186,999
9,073,393
4,457,798
897,055
2,755,065
9,989,840
3,366,806
2,041,850
6,966,111
23,821,864
1,057,643
2,240,143
8,446,899
1,681,840
3,726,048
433,802
1,164,926
860,604
139,528
1,211,467
166,398
500,000
41,428,218
6,563,786
29,454,384
3,693,094
11,186,999
9,073,393
32,259,624
4,457,798
22,004,829
-
897,055
2,755,065
9,989,840
3,366,806
2,041,850
2,453,426
24,035,470
360,740,734
557,909,000
65%
viii
3
NTAW Sales Channels
Managing Director’s report (cont)
NTAW Sales Channels
NTAW Sale Channels
Building Leading Brands
DYNAMIC
Wheel Co.
Hottest and toughest
B2B - End User
Operations - 2022 Financial Year
Customer Mix
B2B - Reseller
Customer Mix
B2C - Retail
Customer Mix
• Caravan, truck trailer and farm equipment manufacturers
• Tyre speciality retail stores (chains and independents)
• Consumers
• Commercial truck and bus fleet operators
• Mechanical service businesses
• Commercial customers
• Hire car fleet operators
• Forklift and industrial equipment operators
• Large scale farmers
• Car dealers
• Online re-sellers
Operations - 2022 Financial Year
During the 2022 financial year, NTAW substantially enhanced its capacity to grow commercial tyre sales by acquiring Black Rubber
in Australia (November 2021) and Carter’s in New Zealand (January 2022)2.
Black Rubber operates retail fleet tyre management centres and retread factories in Perth and Sydney, along with another retread
factory in Brisbane. More than 60% of Black Rubber’s revenue comes from selling truck, bus and agricultural tyres to commercial
fleets and other B2B customers.
Carter’s is the largest independent commercial tyre re-seller in New Zealand. It has a nationwide network of tyre retail stores
spanning 40 locations, including 23 company owned stores, 11 licensed stores and 6 agents, as well as 2 retreading factories.
During the 2022 financial year, NTAW substantially enhanced its capacity to grow commercial tyre sales by acquiring Black Rubber
in Australia (November 2021) and Carter’s in New Zealand (January 2022)2.
Carter’s supplies a range of commercial products and tyre management solutions for truck and bus fleets as well as off-the-road
and agribusiness vehicles. It has achieved a leading market position by remaining focused on these segments of the tyre market.
Black Rubber operates retail fleet tyre management centres and retread factories in Perth and Sydney, along with another retread
factory in Brisbane. More than 60% of Black Rubber’s revenue comes from selling truck, bus and agricultural tyres to commercial
Commercial customers include truck fleet operators who prefer to deal with suppliers capable of an expansive product and service
fleets and other B2B customers.
offering covering, amongst other things: pricing based on a cents per kilometre solution; tyre performance monitoring; fitting at
customer depots; and retreading capabilities. Black Rubber and Carter’s specialise in offering these value-adding services.
Carter’s is the largest independent commercial tyre re-seller in New Zealand. It has a nationwide network of tyre retail stores
spanning 40 locations, including 23 company owned stores, 11 licensed stores and 6 agents, as well as 2 retreading factories.
Black Rubber and Carter’s also give NTAW access to tyre recycling via 3 retread factories in Australia and 2 in New Zealand,
delivering a boost to NTAW’s sustainability credentials. This is a strategically important extension of NTAW’s capabilities, with this
Carter’s supplies a range of commercial products and tyre management solutions for truck and bus fleets as well as off-the-road
market segment expected to grow as demand for recycled products increase.
and agribusiness vehicles. It has achieved a leading market position by remaining focused on these segments of the tyre market.
These acquisitions introduced Michelin and Goodyear as substantial suppliers to NTAW of new tyres and retread materials.
Commercial customers include truck fleet operators who prefer to deal with suppliers capable of an expansive product and service
offering covering, amongst other things: pricing based on a cents per kilometre solution; tyre performance monitoring; fitting at
customer depots; and retreading capabilities. Black Rubber and Carter’s specialise in offering these value-adding services.
2 “FY22 acquisitions” refers to the acquisitions of Black Rubber, Carter’s and Access Alloys (in November 2021).
Black Rubber and Carter’s also give NTAW access to tyre recycling via 3 retread factories in Australia and 2 in New Zealand,
delivering a boost to NTAW’s sustainability credentials. This is a strategically important extension of NTAW’s capabilities, with this
market segment expected to grow as demand for recycled products increase.
4
These acquisitions introduced Michelin and Goodyear as substantial suppliers to NTAW of new tyres and retread materials.
2 “FY22 acquisitions” refers to the acquisitions of Black Rubber, Carter’s and Access Alloys (in November 2021).
ix
4
Managing Director’s report (cont)
NTAW also acquired the assets of Access Alloys in November 2021, increasing alloy wheel sales via the exclusive distribution of the
American Outlaw and ELITE Off Road brands in Australia. These brands have load ratings and design elements not available from
NTAW’s existing alloy wheel portfolio.
NTAW spent $54 million on the FY22 acquisitions after working capital and other adjustments. Funding came from cash reserves,
increased debt facilities, share issues to vendors, an underwritten share placement to substantial shareholders and shares issued
under a share purchase plan.
Other projects and the FY22 acquisitions curtailed initiatives to increase cross-selling between business units during the year.
Promotional activity remained subdued during the year as business units responded to supply chain disruption and pandemic
lockdowns that continued into 2H22. While demand for agricultural tyres was strong and commercial demand remained stable,
consumer demand fell from FY21 levels.
NTAW has had a long-standing supply agreement with Cooper Tire, a manufacturer acquired by Goodyear in June 2021. NTAW and
Cooper have continued to trade on a business-as-usual basis since then, with targets and support programs agreed for the 2022
and 2023 calendar years. Unless otherwise agreed, targets increase at 3.5% per annum until renewal of the agreement, which is to
be tabled in 2027.
Service level enhancements appeared from the warehouse consolidations in Melbourne and Sydney, with further scope for
improvement following the establishment of a logistics management team dedicated to efficiency and cost effectiveness across all
distribution centres. A tightening of the labour market and COVID-related absenteeism resulted in the Group missing some of its
service level improvement targets in FY22.
The restructure of Tyres4U and Tyreright (Tyres4U’s retail arm), continued during the year with 7 company owned stores
transferred to new licensees. This process is designed to improve the performance of the licensed stores under the stewardship of
owner-managers. It also paves the way for Tyreright Operations, established as a separate business unit from Tyres4U in April
2021, to grow the market share of the Tyreright network, which now comprises 20 company owned and 40 licensed stores.
NTAW intends to lead the tyre and wheel industry in digital transformation, with non-recurring expenditure of $2.5 million on this
project in FY22. A substantial internal team of IT people is supporting this effort. The first phase, to be completed in FY23, involves
putting all NTAW business units on the same financial and operating platform, facilitating enhanced CRM and logistics capabilities.
The second phase, to commence in FY23 and be completed in FY24, involves an array of value-adding services, culminating in
NTAW being the industry’s preferred supplier with an “always on” portal to the NTAW range.
Outcomes for NTAW and customers from digital transformation
Focus on Phase 2 Value Adding Platforms to increase sales, win new
business and improve customer loyalty.
•
Low code programming
Outcomes for NTAW and customers from digital transformation
•
Application program interfaces
•
•
•
•
•
•
•
Data security
Virtual reality tools
Data management
Robotic process automation
Artificial intelligence
Single source of truth
Virtual ecosystems
• Marketplaces
•
•
•
•
•
•
•
•
•
•
Creating a new industry ecosystem that will
deliver outstanding customer experiences, drive
customer loyalty, enhance cross-selling between
business units, targeting improved returns for all
stakeholders and driving down costs to service
Digital Transformation
x
5
Managing Director’s report (cont)
FY22 Financial Results
FY22 Financial Results
FY22 Financial Results
Your Company delivered operating net profit after tax and before amortisation of $15.6 million in FY22 (FY211: $21.9 million).
Your Company delivered operating net profit after tax and before amortisation of $15.6 million in FY22 (FY211: $21.9 million).
Your Company delivered operating net profit after tax and before amortisation of $15.6 million in FY22 (FY211: $21.9 million).
Revenue amounted to $558 million (FY21: $462 million), with recent acquisitions taking NTAW’s annualised revenue to
Revenue amounted to $558 million (FY21: $462 million), with recent acquisitions taking NTAW’s annualised revenue to
Revenue amounted to $558 million (FY21: $462 million), with recent acquisitions taking NTAW’s annualised revenue to
approximately $590 million.
approximately $590 million.
approximately $590 million.
Operating EBITDA 3 was $44.9 million (FY21: $46.7 million). Earnings per share was 12.7 cents per share based on Operating NPATA
Operating EBITDA 3 was $44.9 million (FY21: $46.7 million). Earnings per share was 12.7 cents per share based on Operating NPATA
Operating EBITDA 3 was $44.9 million (FY21: $46.7 million). Earnings per share was 12.7 cents per share based on Operating NPATA
(FY21: 19.4 cents per share). NTAW’s statutory NPATA mounted to $11.1 million (FY21: $21.1 million).
(FY21: 19.4 cents per share). NTAW’s statutory NPATA mounted to $11.1 million (FY21: $21.1 million).
(FY21: 19.4 cents per share). NTAW’s statutory NPATA mounted to $11.1 million (FY21: $21.1 million).
Depreciation increased by $5.5 million in FY22, reflecting an increase in property leases that are classified as right-of-use assets in
Depreciation increased by $5.5 million in FY22, reflecting an increase in property leases that are classified as right-of-use assets in
Depreciation increased by $5.5 million in FY22, reflecting an increase in property leases that are classified as right-of-use assets in
accordance with AASB 16 Leases. Following the FY22 acquisitions, NTAW now occupies 72 leased premises and only those with a
accordance with AASB 16 Leases. Following the FY22 acquisitions, NTAW now occupies 72 leased premises and only those with a
accordance with AASB 16 Leases. Following the FY22 acquisitions, NTAW now occupies 72 leased premises and only those with a
term of less than 12 months are treated as occupancy costs.
term of less than 12 months are treated as occupancy costs.
term of less than 12 months are treated as occupancy costs.
The FY22 result was mixed with contributions from newly acquired businesses and strong performances from agricultural tyres,
The FY22 result was mixed with contributions from newly acquired businesses and strong performances from agricultural tyres,
The FY22 result was mixed with contributions from newly acquired businesses and strong performances from agricultural tyres,
original equipment supplies, wheels and budget tyres offset by supply chain disruption and lower gross profit margins in some
original equipment supplies, wheels and budget tyres offset by supply chain disruption and lower gross profit margins in some
original equipment supplies, wheels and budget tyres offset by supply chain disruption and lower gross profit margins in some
other business units, particularly in 2H22.
other business units, particularly in 2H22.
other business units, particularly in 2H22.
The following table summarises key financial metrics for the Group:
The following table summarises key financial metrics for the Group:
The following table summarises key financial metrics for the Group:
Operating costs as a % of revenue
Financial Highlights
Gross profit margin
EBITDA ($ million)
EBITDA margin
NPATA ($ million)
Basic EPS (cents)
Dividend per share (cents)
Net debt ($ million)
Net debt:debt+equity
NTA per share (cents)
Operating cash flow ($ million)
Interest cover (times)
FY22
28.7%
21.4%
40.5
7.3%
11.1
7.7
4.5
60.0
28.8%
48.8
11.8
8.1x
FY21
29.8%
19.8%
46.1
10.0%
21.1
17.9
8.0
16.0
11.7%
64.8
22.7
15.6x
Financial Highlights
Financial Highlights
Financial Highlights
Financial Highlights
Gross profit margin
Gross profit margin
Gross profit margin
Gross profit margin
Operating costs as a % of revenue
Operating costs as a % of revenue
Operating costs as a % of revenue
Operating costs as a % of revenue
EBITDA ($ million)
EBITDA ($ million)
EBITDA ($ million)
EBITDA ($ million)
EBITDA margin
EBITDA margin
EBITDA margin
EBITDA margin
NPATA ($ million)
NPATA* ($ million)
NPATA* ($ million)
NPATA* ($ million)
Basic EPS (cents)
Basic EPS (cents)
Basic EPS (cents)
Basic EPS (cents)
Dividend per share (cents)
Dividend per share (cents)
Dividend per share (cents)
Dividend per share (cents)
Net debt ($ million)
Net debt ($ million)
Net debt ($ million)
Net debt ($ million)
Net debt:debt+equity
Net debt:debt+equity
Net debt:debt+equity
Net debt:debt+equity
NTA per share (cents)
NTA per share (cents)
NTA per share (cents)
NTA per share (cents)
Operating cash flow ($ million)
Operating cash flow ($ million)
Operating cash flow ($ million)
Operating cash flow ($ million)
Interest cover (times)
Interest cover (times)
Interest cover (times)
Interest cover (times)
FY22
FY22
FY22
28.7%
28.7%
28.7%
21.4%
21.4%
21.4%
40.5
40.5
40.5
7.3%
7.3%
7.3%
11.1
11.1
11.1
7.7
7.7
7.7
4.5
4.5
4.5
60.0
60.0
60.0
28.8%
28.8%
28.8%
48.8
48.8
48.8
11.8
11.8
11.8
8.1x
8.1x
8.1x
FY22
FY21
FY21
FY21
29.8%
29.8%
29.8%
19.8%
19.8%
19.8%
46.1
46.1
46.1
10.0%
10.0%
10.0%
21.1
21.1
21.1
17.9
17.9
17.9
8.0
8.0
8.0
16.0
16.0
16.0
11.7%
11.7%
11.7%
64.8
64.8
64.8
22.7
22.7
22.7
15.6x
15.6x
15.6x
28.7%
21.4%
40.5
7.3%
11.1
7.7
4.5
60.0
28.8%
48.8
11.8
8.1x
FY21
29.8%
19.8%
46.1
10.0%
21.1
17.9
8.0
16.0
11.7%
64.8
22.7
15.6x
The following table reconciles Statutory EBITDA to Operating EBITDA. The one-off costs include $2.5 million related to IT projects
The following table reconciles Statutory EBITDA to Operating EBITDA. The one-off costs include $2.5 million related to IT projects
The following table reconciles Statutory EBITDA to Operating EBITDA. The one-off costs include $2.5 million related to IT projects
and $1.2 million related to warehouse consolidation and relocations.
and $1.2 million related to warehouse consolidation and relocations.
and $1.2 million related to warehouse consolidation and relocations.
Reconciliation of Reported EBITDA to Operating EBITDA
$'000
Reconciliation of Reported EBITDA to Operating EBITDA
Reconciliation of Reported EBITDA to Operating EBITDA
Reconciliation of Reported EBITDA to Operating EBITDA
Reconciliation of Reported EBITDA to Operating EBITDA
$'000
$'000
$'000
Net profit after tax
Net profit after tax
Net profit after tax
Net profit after tax
Depreciation and amortisation
Depreciation and amortisation
Depreciation and amortisation
Depreciation and amortisation
Finance costs (net)
Finance costs (net)
Finance costs (net)
Finance costs (net)
Income tax expense
Income tax expense
Income tax expense
Income tax expense
Reported EBITDA
Reported EBITDA
Reported EBITDA
Reported EBITDA
Gain on bargain purchase
Gain on bargain purchase
Gain on bargain purchase
Gain on bargain purchase
Acquisition costs
Acquisition costs
Acquisition costs
Acquisition costs
One-off warehouse consolidation and
One-off warehouse consolidation and
One-off warehouse consolidation and
One-off warehouse consolidation and
IT project implementation costs
IT project implementation costs
IT project implementation costs
IT project implementation costs
Unrealised FX loss/(gain)
Unrealised FX loss/(gain)
Unrealised FX loss/(gain)
Unrealised FX loss/(gain)
Operating EBITDA
Operating EBITDA
Operating EBITDA
Operating EBITDA
FY22
FY22
FY22
9,569
9,569
9,569
20,904
20,904
20,904
5,010
5,010
5,010
4,995
4,995
4,995
40,478
40,478
40,478
-
-
-
736
736
736
3,729
3,729
3,729
(85)
(85)
(85)
(85)
44,858
44,858
44,858
44,858
FY22
9,569
20,904
5,010
4,995
40,478
-
736
3,729
$'000
Net profit after tax
Depreciation and amortisation
Finance costs (net)
Income tax expense
Reported EBITDA
Gain on bargain purchase
Acquisition costs
One-off warehouse consolidation and
IT project implementation costs
Unrealised FX loss/(gain)
Operating EBITDA
FY22
9,569
20,904
5,010
4,995
40,478
-
736
3,729
(85)
44,858
FY21
20,540
14,278
2,949
8,378
46,145
(596)
1,449
-
(321)
46,677
FY21
FY21
FY21
FY21
20,540
20,540
20,540
20,540
14,278
14,278
14,278
14,278
2,949
2,949
2,949
2,949
8,378
8,378
8,378
8,378
46,145
46,145
46,145
46,145
(596)
(596)
(596)
(596)
1,449
1,449
1,449
1,449
-
-
-
(321)
(321)
(321)
46,677
46,677
46,677
(321)
46,677
-
The following chart presents a bridge from FY21 Statutory NPATA to FY22 Statutory NPATA, highlighting the impact of the FY22
The following chart presents a bridge from FY21 Statutory NPATA to FY22 Statutory NPATA, highlighting the impact of the FY22
The following chart presents a bridge from FY21 Statutory NPATA to FY22 Statutory NPATA, highlighting the impact of the FY22
acquisitions on EBITDA, noting that FY22 included a full year of results attributable to Tyres4U and Tyreright (11 months in FY21).
acquisitions on EBITDA, noting that FY22 included a full year of results attributable to Tyres4U and Tyreright (11 months in FY21).
acquisitions on EBITDA, noting that FY22 included a full year of results attributable to Tyres4U and Tyreright (11 months in FY21).
3 Refer to table on following page
3 Refer to table on following page
3 Refer to table on following page
xi
6
6
6
FY22 Financial Results
Your Company delivered operating net profit after tax and before amortisation of $15.6 million in FY22 (FY211: $21.9 million).
Managing Director’s report (cont)
Revenue amounted to $558 million (FY21: $462 million), with recent acquisitions taking NTAW’s annualised revenue to
approximately $590 million.
Operating EBITDA 3 was $44.9 million (FY21: $46.7 million). Earnings per share was 12.7 cents per share based on Operating NPATA
(FY21: 19.4 cents per share). NTAW’s statutory NPATA mounted to $11.1 million (FY21: $21.1 million).
Depreciation increased by $5.5 million in FY22, reflecting an increase in property leases that are classified as right-of-use assets in
accordance with AASB 16 Leases. Following the FY22 acquisitions, NTAW now occupies 72 leased premises and only those with a
term of less than 12 months are treated as occupancy costs.
The FY22 result was mixed with contributions from newly acquired businesses and strong performances from agricultural tyres,
original equipment supplies, wheels and budget tyres offset by supply chain disruption and lower gross profit margins in some
other business units, particularly in 2H22.
The following table summarises key financial metrics for the Group:
Financial Highlights
FY22
FY21
Gross profit margin
Operating costs as a % of revenue
EBITDA ($ million)
EBITDA margin
NPATA* ($ million)
Basic EPS (cents)
Dividend per share (cents)
Net debt ($ million)
Net debt:debt+equity
NTA per share (cents)
FY22
Operating cash flow ($ million)
Acquisitions
alone
Interest cover (times)
Excludes FY22
Acquisitions
28.7%
21.4%
40.5
7.3%
11.1
7.7
4.5
60.0
28.8%
48.8
11.8
8.1x
29.8%
19.8%
46.1
10.0%
21.1
17.9
8.0
16.0
11.7%
64.8
22.7
15.6x
NTAW Group, includes
FY22 Acquisitions
The following table reconciles Statutory EBITDA to Operating EBITDA. The one-off costs include $2.5 million related to IT projects
and $1.2 million related to warehouse consolidation and relocations.
NTAW has a strong balance sheet with total assets of $405 million and net assets of $112 million at 30 June 2022 (Jun-21: $92
million). The net debt position at 30 June 2022 was $60 million (Jun-21: $16 million, prior to the FY22 acquisitions) and a net debt
to EBITDA ratio of 1.5 times.
Reconciliation of Reported EBITDA to Operating EBITDA
During the 2022 financial year, 2.47 million shares were issued to the vendors of Black Rubber and Carter’s. 14.74 million shares
were issued via a share placement and share purchase plan completed in December 2021 and January 2022, respectively, to raise
$19.3 million.
Fully franked dividends of 4.5 cents per share were declared from FY22 earnings. The Company has $19.4m of available franking
credits. NTAW’s dividend history is summarised in the flowing chart:
$'000
Net profit after tax
Depreciation and amortisation
Finance costs (net)
Income tax expense
Reported EBITDA
Gain on bargain purchase
Acquisition costs
One-off warehouse consolidation and
IT project implementation costs
Unrealised FX loss/(gain)
Operating EBITDA
FY22
9,569
20,904
5,010
4,995
40,478
-
736
FY21
20,540
14,278
2,949
8,378
46,145
(596)
1,449
3,729
(85)
44,858
-
(321)
46,677
The following chart presents a bridge from FY21 Statutory NPATA to FY22 Statutory NPATA, highlighting the impact of the FY22
acquisitions on EBITDA, noting that FY22 included a full year of results attributable to Tyres4U and Tyreright (11 months in FY21).
3 Refer to table on following page
6
7
xii
Managing Director’s report (cont)
Outlook
Outlook
NTAW continues to re-align sell out prices to reflect increases in COGS encountered throughout FY22.
NTAW continues to re-align sell out prices to reflect increases in COGS encountered throughout FY22.
Improvements in gross profit margins will naturally occur from the introduction of additional retail revenue from Black Rubber and
Carter’s for a full year in FY23. Further gross margin improvement is expected from more stable import prices as raw material and
freight costs plateau and from increased support from suppliers.
Improvements in gross profit margins will naturally occur from the introduction of additional retail revenue from Black Rubber and
Carter’s for a full year in FY23. Further gross margin improvement is expected from more stable import prices as raw material and
freight costs plateau and from increased support from suppliers.
Adverse supply chain issues are showing signs of abating.
Adverse supply chain issues are showing signs of abating.
NTAW remains focused on executing the following strategic initiatives to deliver earnings growth:
NTAW remains focused on executing the following strategic initiatives to deliver earnings growth:
cross-selling between business units;
•
•
•
•
•
•
•
selling value-adding services supplied by Carter’s and Black Rubber to other NTAW commercial customers;
cross-selling between business units;
additional support from Cooper Tire to improve market share following constrained promotional activity and supply
chain disruption in FY22;
selling value-adding services supplied by Carter’s and Black Rubber to other NTAW commercial customers;
improved service levels flowing from warehouse consolidations and a separate logistics business unit;
additional support from Cooper Tire to improve market share following constrained promotional activity and supply
chain disruption in FY22;
sales growth and lower costs from the digital transformation project;
improved service levels flowing from warehouse consolidations and a separate logistics business unit;
removing duplication of activity and unnecessary costs, with increased integration based on commercial/consumer and
wholesale/retail functions; and
sales growth and lower costs from the digital transformation project;
capturing other synergies from the Tyres4U, Black Rubber and Carter’s acquisitions.
These initiatives are expected to underpin earnings growth over the next two financial years.
removing duplication of activity and unnecessary costs, with increased integration based on commercial/consumer and
wholesale/retail functions; and
capturing other synergies from the Tyres4U, Black Rubber and Carter’s acquisitions.
•
•
•
•
•
•
•
These initiatives are expected to underpin earnings growth over the next two financial years.
8
8
xiii
Managing Director’s report (cont)
Acknowledgements
It has been another busy year for your Company defending market share in difficult trading conditions while also completing
significant acquisitions and undertaking substantial internal projects that will deliver competitive advantages well into the future.
The demands on our people to operate in this environment while also embracing change have been challenging. Their enthusiastic
and diligent response has been crucial, providing an excellent platform for further business improvements to come. This effort is
both acknowledged and greatly appreciated.
The Group enjoys continuing support from suppliers and customers, reciprocated by our Group-wide commitment to building up
our product brands and enhancing customer experiences.
The Company also received welcome assistance from shareholders subscribing for new shares to help fund the FY22 acquisitions.
The NTAW Board and senior management team is very grateful for the support received from all stakeholders.
Yours faithfully
Peter Ludemann
xiv
9
Managing Director’s report (cont)
NTAW remains focused on
executing strategic initiatives
expected to underpin earnings
growth over the next two
financial years
xv
FINANCIAL REPORT
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the
“Group”) consisting of National Tyre & Wheel Limited (referred to hereafter as the “Company”, “NTAW”, or “parent entity”) and
the entities it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were directors of National Tyre & Wheel Limited during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Murray Boyte
Peter Ludemann
Terry Smith
Bill Cook
Robert Kent
Non-Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Principal activities
The principal activity of the Group during the financial year ended 30 June 2022 was the distribution and marketing of motor vehicle
tyres, wheels, tubes and related products throughout Australia, New Zealand and South Africa.
NTAW is the holding company for the following operating subsidiaries:
Exclusive Tyre Distributors Pty Ltd (“ETD”);
Exclusive Tyre Distributors (NZ) Limited (“ETDNZ”);
Integrated OE Pty Ltd (“OE”);
Statewide Tyre Distribution Pty Ltd (“Statewide”);
Top Draw Tyres Proprietary Limited t/a Tyrelife Solutions (“TLS”);
•
•
• Dynamic Wheel Co. Pty Limited (“Dynamic”);
•
•
•
• NTAW Logistics Pty Ltd;
•
•
•
• Black Rubber Pty Ltd & Black Rubber Sydney Pty Ltd (collectively “Black Rubber”); and
•
Tyres4U Pty Ltd (“T4UAU”);
Tyres4U (NZ) Ltd (“T4UNZ”);
Tyreright Operations Pty Ltd (“TRT”);
Carters Tyre Service Limited, C.O. Tire & Retreading Co Limited & Tyre Distributors New Zealand Limited (collectively
“Carter’s”).
Apart from the acquisitions, detailed below, which increased the Group’s retail operations, there have been no other significant
changes in the nature of the Group’s activities during the year.
Dividends
Dividends paid during the financial year were as follows:
Final dividend
Interim dividend
2022
$'000
5,715
3,950
9,665
2021
$'000
-
3,425
3,425
At the date of signing these financial statements, the Company has declared a fully franked final dividend of 1.50 cents per share
with a record date of 12 September 2022 and a payment date of 7 October 2022. The total dividend payable is $1,979,000. The
financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2022 and
will be recognised in subsequent financial reports.
2
2
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Operating and financial review
Review of operations
On 2 November 2021, NTAW acquired all the issued capital of Black Rubber Pty Ltd and Black Rubber Sydney Pty Limited
(collectively, “Black Rubber”). The consideration for this purchase was $27.9m, including deferred consideration of $5.3m and
1,071,430 fully paid ordinary shares in NTAW at an issue price of $1.12 per share.
Black Rubber focusses on selling truck, bus and surface mining tyres to B2B customers, particularly commercial fleets. Black Rubber
also gives NTAW access to tyre recycling via three retread factories in WA, QLD and NSW, delivering a boost to NTAW’s sustainability
credentials.
On 30 November 2021, Dynamic Wheel Co. Pty Limited (“Dynamic”), a wholly owned subsidiary of NTAW, acquired certain assets
from the Brisbane based Alacad Pty Ltd trading as Access Alloys (“Access Alloys”). Dynamic paid $1.1m for these assets, which
include the exclusive distribution of American Outlaw and ELITE Off Road brands in Australia.
On 7 January 2022, NTAW acquired all the issued capital of Carters Tyre Service Limited, C.O. Tire & Retreading Co Limited and Tyre
Distributors New Zealand Limited (collectively, “Carter’s”). The consideration for this purchase was $30.6m including 1,394,222
fully paid ordinary shares in NTAW at an issue price of $1.35 per share (equivalent to $ $2,000,000 NZD on the completion date).
Carter’s is the largest independent commercial tyre re-seller in New Zealand. It has a nationwide network of tyre resale stores
throughout the North and South Islands, spanning 40 locations, including 23 company owned stores, 11 licensed stores and 6
agents, as well as 2 retreading factories.
Carter’s supplies a range of commercial products and tyre management solutions for truck and bus fleets as well as off-the-road
(“OTR”) and agribusiness vehicles. It has achieved a leading market position by remaining focused on these segments of the tyre
market.
The cash component of these acquisitions was funded by NTAW’s cash reserves, an increased debt facility from Commonwealth
Bank of Australia and the issue of 14.74m shares to raise $19.3m via a Share Placement and Share Purchase Plan in December 2021
and January 2022, respectively.
The acquisitions of Black Rubber, Access Alloys and Carter’s in FY2022 delivered:
•
•
•
a new B2B retail sales channel for commercial tyres in Australia and New Zealand (elevating NTAW to be the largest
independent distributor in NZ);
retread tyre manufacturing plants and customers in Australia and New Zealand; and
new supplier relationships for new markets (premium commercial tyres, retreads and alloy wheels).
In FY2022, the Group:
•
•
•
•
operated 12 different business units, functioning as separate entities, focused on winnable market segments with diversity
and scale mitigating market risk.
This effort was supported by shared services business units in Finance and Administration, Supply Chain and Logistics, People
and Culture, Marketing and Innovation and IT;
reached a share of the wholesale market in both Australia and New Zealand of approximately 10%, with wholesale and retail
sales represent 77% and 23% respectively of NTAW turnover (annualising FY2022);
sold over 100 brands and 50,000 SKUs from 26 warehouses in Australia and New Zealand, relying on a fleet of 38 vehicles and
over 150 logistics contractors; and
had 890 employees entering FY2023.
Based on annualised FY2022 results, Australian and New Zealand businesses accounted for 75% and 23% of Group revenue
respectively with 2% of revenue derived from TLS, NTAW’s 50% owned subsidiary in South Africa.
2
3
3
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
In FY2022, gains made in original equipment, agricultural, industrial and commercial retail tyres were, to an extent, offset by lower
volume and margins from premium 4WD tyres and lower margins from general wholesale activities. While rural economies and
commercial activity remained buoyant, changing market conditions in FY2022 included supply chain disruption, pandemic
lockdowns, higher COGS (including freight) and lower consumer confidence.
As retailers, Black Rubber and Carter’s generally earn higher gross margins than NTAW’s wholesale businesses. Despite this higher
contribution during the year, NTAW achieved a gross profit margin of 28.7% compared to 29.8% in FY2021. The size and cadence
of higher import prices and freight costs, unusually high demurrage costs and a fall in the AUD:USD exchange rate adversely affected
gross margins in FY2022 as sell out prices, influenced by competitor behaviour and customer expectations, could not keep pace
with higher COGS.
The Group’s cost base increased significantly in FY2022 compared to FY2021 due to:
•
•
•
•
•
additional costs from operating Black Rubber, Carter’s and Access Alloys, as well as associated transaction costs;
a full year of the Tyres4U operations (compared to 11 months in FY2021);
costs incurred in connection with the relocation of warehouses in Sydney and Melbourne;
continuing investment in NTAW’s digital transformation project; and
higher people costs and the full year effect of hiring new people in FY2021 to operate shared services business units (in
response to the substantial increase in scale coming from the Tyres4U acquisition).
NTAW continued the separation of Tyres4U and Tyreright, with the number of Company owned Tyreright stores falling from 31 to
20 at 30 June 2022. Other synergies from recent acquisitions remain a significant opportunity for NTAW, with few being realised in
FY2022 as the management team was fully occupied with the acquisitions during the year, restructuring Tyres4U and supply chain
constraints.
Results highlights
NTAW has reported total revenue of $557.9m (2021: $461.5m) for the financial year, an increase of $96.4m (20.9%) on the prior
year.
NTAW’s statutory profit for the Group after providing for income tax and non-controlling interests amounted to $9.6m (2021:
$20.5m).
NTAW has a strong balance sheet with net assets of $112.5m (Jun-21: $91.8m). The net debt position was $60.0m (Jun-21:
$16.0m) and a ‘net debt to equity + debt’ ratio of 28.8% (Jun-21: 11.7%).
Key operating metrics
Gross profit margin
Operating costs as % of total revenue
Reported EBITDA1 margin
Operating EBITDA2 margin
1 EBITDA means earnings before interest, tax, depreciation and amortisation.
2 Refer to reconciliation between Reported EBITDA and Operating EBITDA below.
FY2022
FY2021
28.7%
21.4%
7.3%
8.0%
29.8%
19.8%
10.0%
10.1%
NTAW has reported a gross profit margin of 28.7% and an Operating EBITDA margin of 8.0%, with gross profit margin and
Operating EBITDA margin decreasing from that achieved in the prior year resulting from significant price rises from suppliers and
unfavourable exchange rates between the AUD and USD. The Group’s operating costs as a percentage of sales of 21.4% was
greater than prior year due to the change in the business structure (acquisition of retail operations in Black Rubber and Carter’s)
and the investment made to pursue the Group’s goal of being the tyre and wheel industry leader in digital transformation.
4
4
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Key financial results
$'000
Sales revenue
Gross profit
Reported EBITDA
Operating EBITDA
NPATA attributable to NTAW 1
FY2022
FY2021
557,909
160,107
40,478
44,858
11,076
461,533
137,510
46,145
46,677
21,142
1 NPATA excludes non-controlling interests and amortisation on a tax effected basis.
Operating EBITDA
The Group has reported an EBITDA of $40.5m (2021: $46.1m). The result for FY2022 includes $0.7m of acquisition costs incurred in
the year and $3.7m in non-recurring costs associated with the installation of a new ERP platform and consolidation of warehouses.
Unrealised foreign exchange gain on foreign exchange contracts and foreign currency denominated suppliers of $0.1m (2021:
$0.3m) was recognised during the year.
After taking into account the above items, an Operating EBITDA of $44.9m was earned in the reporting period (FY2021: $46.7m)
as shown in the following table:
$'000
FY2022
FY2021
Net profit after tax
Depreciation and amortisation
Finance costs (net)
Income tax expense
Reported EBITDA
Gain on bargain purchase
Acquisition costs
One-off warehouse consolidation and IT project implementation costs
Unrealised foreign exchange (gains)/losses
Operating EBITDA
Financial Position
Key financial information in relation to the Group’s financial position at year end is shown below:
Total assets ($’000)
Net assets ($’000)
Net debt ($’000)
Shares on issue (‘000)
Dividends per security (cents)
9,569
20,904
5,010
4,995
40,478
-
736
3,729
(85)
44,858
20,540
14,278
2,949
8,378
46,145
(596)
1,449
-
(321)
46,677
30 June 2022
30 June 2021
405,494
112,466
59,968
131,936
4.50
268,438
91,813
15,989
114,295
8.00
Significant balance sheet movements during the financial year were as follows:
• Net debt has increased by $44.0m;
•
•
14.7m shares were issued as part of the Share Placement and Share Purchase Plan and 2.5m shares were issued as part of the
Black Rubber and Carter’s acquisitions;
Total assets have significantly increased due to the expanded operations of the Group; and
• A final dividend of 1.50 cents has been declared in respect of the year (FY2021: 5.00 cents), with an interim dividend of 3.00
cents being declared during FY2022 (FY2021: 3.00 cents).
4
5
5
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Outlook
NTAW’s vision is to be the tyre and wheel industry leader in digital transformation. The Group will achieve this goal by harnessing
technology to deliver innovative value-adding solutions for all stakeholders. At the same time, NTAW will bring about an alignment
of culture within the Group based on core aspirations of decency, innovation, collaboration and energy.
NTAW’s operating environment changed significantly in FY2022 when compared to FY2021 – consumer confidence and demand
appears to have diminished, supplier prices and freight costs rose faster than the general rate of inflation, shipping delays resulted
in more missed opportunities and people related issues including high Covid-related absenteeism, labour scarcity and increased
costs.
Given this environment, NTAW has resolved to manage its capital to ensure it can meet changing supply chain requirements and
fund projects to deliver synergies and earnings growth, as such no final dividend has been declared for FY2022.
NTAW remains focused on executing the following strategic initiatives:
•
•
•
•
•
the digital transformation project (sales growth and lower costs);
cross-selling between business units;
selling value-adding services supplied by Carter’s and Black Rubber to other NTAW commercial customers;
improved service levels flowing from warehouse consolidations and a separate logistics business unit; and
capturing other synergies from the Tyres4U, Black Rubber and Carter’s acquisitions.
Significant changes in the state of affairs
Other than the acquisition of Black Rubber and Carter’s, there were no significant changes in the state of affairs of the Group
during the financial year.
Matters subsequent to the end of the financial year
Apart from the dividend declared as disclosed above, no other matter or circumstance has arisen since 30 June 2022 that has
significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of
affairs in future financial years.
Likely developments and expected results of operations
The Group will continue to pursue growth in revenue in the next financial year as it seeks to leverage the diversity and scale built
up in recent years in addition to the realisation of revenue and cost synergies throughout the Group in FY2023 and beyond.
6
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Material business risks
The Board is committed to monitoring and mitigating business risks faced by the Group, including the following key risks that have
the potential to materially impact its financial prospects:
•
•
Supplier risk – the Group is party to a long-term formal distribution and licence agreement with Cooper Tire & Rubber
Company (“Cooper Tires”) for the supply of Cooper and Mastercraft branded products in passenger, SUV and 4WD
segments. The Group owns customer relationships and controls the marketing of brands, but it relies on rights under
formal long-term agreements granted by Cooper Tires to access the Cooper brand. Goodyear Tire and Rubber Company
purchased Cooper Tires during FY2021 and there is some risk that the change in ownership will impact the Group’s long-
term relationship with Cooper Tires. The recent acquisitions of Tyres4U, Black Rubber and Carter’s introduces the Group
to many new suppliers, significantly reducing the risk of supplier dependency on Cooper Tires with the Cooper family of
brands (excluding Mickey Thompson) accounting for approximately 10% of revenue and 12% of gross profit for FY2022.
The Group exclusively imports 45 brands in various product segments and many of these exclusive importation and
distribution agreements have existed for more than 20 years. As these agreements do not have long-term tenure, the
Group relies on meeting or exceeding supplier expectations. This strategy has served the Group well, with all supplier
relationships surviving decades despite there being no formal long-term tenure.
Foreign exchange risk – a significant proportion of the Group’s costs and expenses are transacted in foreign currencies.
Adverse movements between the Australian Dollar, New Zealand Dollar and South African Rand against the US Dollar may
increase the price at which the Group acquires its trading stock and result in volatility in profitability to the extent that the
Group may or may not be able to pass on price changes to its customers (after allowing for the impact inventory cycles
have on the time it takes for exchange rate movements to impact on cost of goods sold and the behaviour of competitors).
The Group also seeks to use foreign exchange contracts to mitigate its foreign exchange exposures. The effect of foreign
currency translation on operating results from offshore operations remains inherent in the Group’s business.
• Business integration risk – the Group has acquired interests in several businesses in recent years with the successful
integration and capturing of synergies from the acquisitions and managing growth being critical to the Group’s continued
performance and earnings. The Group’s Board and management is experienced in acquiring and integrating businesses,
conducts comprehensive due diligence and ensures an integration plan is followed.
• Retention of key personnel – the Group’s future success is significantly dependent on the expertise and experience of its
key personnel and management. The loss of services of key members of management, and any delay in their replacement,
or the failure to attract additional key managers to new roles could have a material adverse effect on NTAW’s financial
performance and ability to deliver on its growth strategies.
•
Customer risk – the Group is dependent on its ability to retain its existing customers and attract new customers. Although
customer concentration is low, sales revenue would be adversely affected if all members of a chain or group decided not
to purchase products from the Group. Although this risk has been further reduced as a consequence of the recent
acquisitions, the Group proactively manages its customer relationships and has established value-adding customer loyalty
programs.
• Risk of competition – the tyre and wheel wholesale market is highly competitive. Competition is based on factors including
price, service, quality, performance standards, range and the ability to provide customers with an appropriate range of
quality products in a timely manner. A failure by the Group to effectively compete with its competitors may adversely
affect the Group’s future financial performance and position.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
6
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Information on Directors
Name:
Title:
Experience and expertise:
Other current directorships:
Murray Boyte
Independent, Non-Executive Chairman
Mr Boyte has over 35 years' experience in merchant banking and finance, undertaking
company reconstructions, mergers and acquisitions in Australia, New Zealand, North
America and Hong Kong. In addition, he has held executive positions and Directorships in the
transport, horticultural, financial services, investment, health services and property
industries.
Eureka Group Holdings Limited (ASX: EGH); Hillgrove Resources Limited (ASX: HGO);
Eumundi Group Limited (ASX: EBG)
Former directorships (last 3 years): Abano Healthcare Group Limited (NZX: ABA)
Special responsibilities:
Member of Audit and Risk Committee; Member of Remuneration and Nominations
Committee
240,206 ordinary shares
Nil
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options and rights:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Peter Ludemann
Chief Executive Officer (“CEO”) and Managing Director
Degrees in Law and Commerce (Marketing) from University of New South Wales
Mr Ludemann joined the Group as a director in 2012 and became full time CEO of NTAW in
July 2013. He has worked as a commercial lawyer, a director of numerous private
companies, the Managing Director of a Life Science Investment firm and as a Private Equity
Investment Manager at AMP Capital. He has been the driving force behind the evolution of
NTAW from a closely held family trust carrying on a niche 4WD tyre wholesale business to
a more widely held entity operating in many tyre and wheel segments. He has managed the
acquisition and integration of all the subsidiaries in that time and was responsible for the
execution of a succession plan for NTAW founders that has included the distribution of
retained earnings, the creation of a public company corporate structure, the IPO and listing
of NTAW as well as generational change within the Group.
Nil
Nil
Nil
2,759,928 ordinary shares
350,000 options and 228,590 rights
Terry Smith
Independent, Non-Executive Director
Mr Smith has over 40 years' experience in tyre importing, wholesaling and retailing. Terry’s
career is one of successful entrepreneurship, as he and wife Susanne, were responsible for
taking Exclusive Tyre Distributors from a start-up business to one of the largest independent
national tyre wholesalers in Australia.
Nil
Nil
Member of Remuneration and Nominations Committee
27,321,966 ordinary shares
Nil
8
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Bill Cook
Independent, Non-Executive Director
Mr Cook is an Independent Non-Executive Director of NTAW. Mr Cook commenced his
career at Ford Motor Company in finance. He worked for Consolidated Press Holdings with
the late Kerry Packer from 1983 to 1996 as Head of M&A and worldwide reporting. After
two years as General Manager of Qantas Flight Catering’s Sydney business he undertook
Private Equity investment consulting roles, and subsequently joined AMP Capital as an
investment manager in the Private Equity team. Since leaving AMP, Mr Cook has served as
non-executive director for a number of companies, including NTAW since 2013.
Nil
Nil
Chair of Audit and Risk Committee; Member of Remuneration and Nominations
Committee
451,032 ordinary shares
Nil
Robert Kent
Independent, Non-Executive Director
Bachelor of Business degree (Marketing) from the Queensland University of Technology
and is a Graduate of the Australian Institute of Company Directors.
Mr Kent was the Managing Director of Publicis Mojo (Queensland), part of a global
advertising firm, from 2000 to 2017. He was also a member of the Publicis National Board
of Management. Rob is an experienced marketing executive who has managed many
campaigns involving sales, promotion and brand building. He was also Managing Director of
Personalised Plates Queensland from 2013 to 2017.
Nil
Nil
Chair of Remuneration and Nominations Committee; Member of Audit and Risk
Committee
324,734 ordinary shares
Nil
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other
types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretaries
Jason Lamb
Mr Lamb is the Chief Financial Officer and joint Company Secretary. Mr Lamb has over 20 years’ accountancy experience. He is a
Certified Practicing Accountant with a Bachelor of Commerce (Accounting) and a Bachelor of Economics from the University of
Queensland. Mr Lamb was responsible for setting up the financial accounting systems for NTAW. He has also been responsible for
all financial due diligence work relating to business acquisitions and the establishment of financial reporting systems for those
operating entities. He participates in all Board meetings for NTAW and each operating entity as well as overseeing the production
of financial reports for all entities.
Hugh McMurchy
Mr McMurchy is the Group Financial Controller and joint Company Secretary. Mr McMurchy is a Chartered Accountant with over
10 years’ experience in public accounting before joining NTAW in 2020.
8
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Meetings of directors
The number of meetings of the Company's Board of Directors (“the Board”) and of each Board committee held during the year
ended 30 June 2022, and the number of meetings attended by each director were:
Board
Remuneration and Nominations
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Murray Boyte
Peter Ludemann
Terry Smith
Bill Cook
Robert Kent
20
20
20
17
20
20
20
20
20
20
5
5*
4
5
5
5
5*
5
5
5
2
2*
2*
2
2
2
2*
2*
2
2
*Attended by invitation only
Remuneration Report (audited)
The remuneration report details the key management personnel (“KMP”) remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and Corporations Regulations 2001.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
a) Principles used to determine the nature and amount of remuneration
b) Details of remuneration
c) Relationship between remuneration and Company performance
d) Service agreements
e) Share-based compensation
f) Equity instruments held by key management personnel
g) Other transactions with key management personnel
(a) Principles used to determine the nature and amount of remuneration
The objective of the Group's executive remuneration framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive remuneration with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform with accepted market practice for remuneration and
reward. The Board of Directors ensures that executive remuneration satisfies the following key criteria for good remuneration
governance practices:
•
•
•
•
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation; and
transparency.
The Remuneration and Nominations Committee is responsible for reviewing remuneration arrangements for its directors and
executives and making recommendations to the Board for consideration and approval. The performance of the Group depends on
the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and
high-quality personnel.
The Remuneration and Nominations Committee has structured an executive remuneration framework that is market competitive
and complementary to the reward strategy of the Group, as determined by the Board.
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
The reward framework is designed to align executive reward to shareholders' interests. The Board considers that it should seek to
enhance shareholders' interests by:
•
•
•
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives' interests by:
•
•
•
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
Since the Company’s listing on the Australian Securities Exchange (“ASX”), in accordance with best practice corporate governance,
the structure of non-executive director and executive director remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees
and payments are reviewed annually by the Remuneration and Nominations Committee. The chairman's fees are determined
independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not
present at any discussions relating to the determination of his own remuneration. The non-executive directors do not receive share
options or other incentives.
Under NTAW’s constitution, the directors decide the total amount paid to all directors as remuneration for their services. However,
under the ASX listing rules, the aggregate non-executive directors' remuneration (i.e. excluding the Managing Director and
executive directors, if any) for a financial year must not exceed the amount fixed by the Company in general meeting. This amount
has been fixed at $750,000 per annum. Any changes to the aggregate remuneration will be put to a general meeting where the
shareholders will be asked to approve a maximum annual aggregate remuneration.
The annual base non-executive director fees paid by the Company are $125,000 per annum (2021: $90,000) for the chairman and
$80,000 per annum (2021: $70,000) for other non-executive directors. An additional fee of $12,000 per annum (2021: $10,000) has
been paid to the chairman of each Board committee. Directors may also be reimbursed for all travelling and other expenses incurred
in connection with their Company duties. Total annual fees payable to non-executive directors for FY2022 is $413,369 (FY2021:
$250,000). Terry Smith was classified as an Executive Director in FY2021.
Executive director remuneration
Fees and payments to executive directors reflect the demands and responsibilities of their role. Executive directors' fees and
payments are reviewed annually by the Remuneration and Nominations Committee.
Executive remuneration
The Group aims to reward executives based on their position and responsibilities, with a level and mix of remuneration which has
both fixed and variable components. The executive remuneration framework includes the following components:
•
•
Fixed remuneration – comprising base salary, superannuation contributions and other benefits, having regard to
comparable market benchmarks. Executives may receive their fixed remuneration in the form of cash or other fringe
benefits (for example motor vehicle benefits) where it does not create any additional costs to the Group and provides
additional value to the executive;
Short-term incentive (“STI”) program – an ‘at risk’ component of remuneration where, if individual, business unit and
Group performance measures are met, senior executives will be awarded cash bonuses equal to a percentage of their
fixed remuneration. Performance measures include a financial gateway hurdle and non-financial key performance
indicators (“KPIs”). The percentage of fixed remuneration received is capped, but may vary, between individuals and
depending on the level of performance achieved; and
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
•
Long-term incentive (“LTI”) program – an ‘at risk’ component of remuneration where senior executives are awarded rights
which are subject to a total shareholder return (“TSR”) performance condition and a service condition. The number of
rights to be awarded will be determined by the Board having regard to the overall amount of executive remuneration and
the annual profit impact of the rights awarded.
The combination of these comprises an executive's total remuneration. The Board believes this remuneration framework ensures
that remuneration outcomes link to Company performance and the long-term interests of Shareholders.
2022 STI Program
During FY2022, senior executives’ entitlement to an STI was based on achievement of agreed performance objectives including:
•
Financial performance;
• Operational performance;
•
Strategy and innovative initiatives;
• Workplace health and safety; and
•
Stakeholder satisfaction.
Actual performance criteria varied between executives, having regard to their roles and responsibilities.
The Board applies the following general principles when determining and measuring performance targets and any STI
incentive:
STI Pool
The size of the STI pool is determined by the Board, upon advice from the Remuneration and Nominations
Committee, having regard to individual employment contracts. In consultation with the Remuneration and
Nominations Committee, the Board assesses the Group’s financial performance and the performance of key
management personnel against agreed performance objectives.
The STI available is split between the achievement of financial gateway hurdles (at a group and/or individual
operating entity level) and non-financial KPIs. The proportion of the STI between financial and non-financial varies
between key management personnel.
The financial gateway hurdles are based on Operating EBITDA which the Board believes is an acceptable proxy for
overall operating performance. Operating EBITDA is calculated by adjusting Reported EBITDA for the impact of
the adoption of AASB 16 Leases and non-operational related items.
The achievement of financial and non-financial KPIs vary between key management personnel. The Board retains
discretion in relation to the impact that non-recurring or unusual items may have on achievement of the STIs.
Structure
Achievement
The actual amount received by key management personnel, as a result of achieving the pre-determined financial hurdles and non-
financial KPIs, are listed in the remuneration tables below.
2022 LTI Program
Rights may be granted under the Employee Equity Plan (“EEP”) which was adopted on 3 November 2021. Each right entitles the
participant to receive one ordinary share in the Company on exercising. The specific terms relevant to the grant of options are set
out in an offer from the Company to the Eligible Person which contains details of the application price (which must not be for more
than nominal consideration), the expiry date, the exercise price, the vesting date, any applicable performance conditions and other
specific terms relevant to those options.
During FY2022, 1,125,802 rights were granted to senior executives, including 457,180 issued to certain key management personnel,
pursuant to the EEP on the specific key terms:
•
•
The Vesting Date of the options is 30 September 2024, subject to meeting the Performance Conditions.
The Performance Period for the Performance Conditions is the period from the Grant Date until the Vesting Date
(inclusive of each of those dates).
12
12
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
•
The performance conditions were as follows:
1) Total Shareholder Return (“TSR”) condition – the Compound Annual Growth Rate (“CAGR”) in the Company’s Total
Shareholder Return will be tested on the Vesting Date and the Rights will vest in accordance with the following TSR CAGR
hurdles:
TSR CAGR
Less than 7%
At least 7% but less than 10% p.a.
At least 10% but less than 15% p.a.
At least 15% p.a.
% of Rights to vest
0%
50%
70% to 100% on a straight-line basis
100%
•
•
TSR CAGR means the TSR compound annual growth rate as against the Base VWAP.
TSR means the total shareholder return to a shareholder of the Company, inclusive of Share Price Appreciation,
capital returns and dividends.
Share Price Appreciation means the difference between the Base VWAP and Vesting VWAP.
•
• Base VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined in
the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2021
financial report. The 2021 financial report was released on 31 August 2021 and the Base VWAP has been calculated at
$1.25.
• Vesting VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined
in the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2024
financial report, expected to be on or about 30 August 2024.
2) Service condition – continuous employment of the employee with NTAW or one of its subsidiaries from the Grant Date until
the Vesting Date.
•
•
The Expiry Date of the options was 30 September 2026, which is two years after the Vesting Date, if not lapsed earlier.
If the Performance Conditions are not met before the end of the Performance Period, the options will lapse.
(b) Details of remuneration
The Board acknowledge that the Company was out of step with comparable ASX listed entities with 8 Executive KMP in FY2021.
Historically, NTAW disclosed the MD/CEO of all operating subsidiaries and Group CFO (the direct reports to the Group MD/CEO) as
KMP. To provide more focused disclosure in the Remuneration Report, the Board has reviewed the definition of KMP and has
reduced the number of Executive KMP effective from 1 July 2021.
The key management personnel of the Group in FY2022 consisted of the following directors of National Tyre & Wheel Limited:
Peter Ludemann – Managing Director and Chief Executive Officer
Terry Smith – Non-Executive Director
• Murray Boyte – Chairman
•
•
• Bill Cook – Non-Executive Director
• Robert Kent – Non-Executive Director
And the following persons:
•
•
Jason Lamb – Chief Financial Officer and Joint Company Secretary
Colin Skead – Chief Executive Officer, T4UAU (Jan-22 to present) (NTAW Chief Operating Officer, Jul-21 – Dec-21)
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits
Cash salary
and fees1
$
Cash
Bonus
$
Non-
monetary
$
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits
Share-based
payments
Long service
leave
$
Equity-
settled
$
Total
$
2022
Non-Executive Directors:
M Boyte
T Smith
W Cook
R Kent
113,637
95,027
83,636
83,636
Executive Director:
P Ludemann
581,321
Other Key Management Personnel:
J Lamb
C Skead
343,804
337,175
1,638,236
1 Including movement in annual leave provisions.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,363
9,503
8,364
8,203
-
-
-
-
-
-
-
-
125,000
104,530
92,000
91,839
27,500
32,318
90,310
731,449
26,935
25,913
117,781
25,510
3,846
61,674
60,906
59,015
210,231
457,155
425,949
2,027,922
Short-term benefits
Cash salary
and fees1
$
Cash
bonus
$
Non-
monetary
$
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits
Share-based
payments
Long service
leave
$
Equity-
settled
$
Total
$
2021
Non-Executive Directors:
M Boyte
W Cook
R Kent
82,192
73,060
80,000
-
-
-
Executive Directors:
T Smith
P Ludemann
86,227
514,477
-
226,665
Other Key Management Personnel:
275,451
J Lamb
299,363
C Skead
C Hummer2
335,666
G Schramm2
316,543
T Wren2
197,573
L Decelis2
525,901
2,786,453
136,640
141,666
133,844
-
87,302
-
726,117
1 Including movement in annual leave provisions.
2 No longer classified as key management personnel effective 1 July 2021.
-
-
-
-
-
7,808
6,940
-
-
-
-
-
-
-
90,000
80,000
80,000
8,192
24,144
-
14,094
-
18,302
94,419
797,682
-
-
-
-
11,575
-
11,575
24,491
24,471
24,215
-
24,548
23,215
168,024
5,059
2,605
15,557
-
5,506
15,424
58,245
16,770
15,964
15,964
8,470
15,964
-
91,434
458,411
484,069
525,246
325,013
342,468
564,540
3,841,848
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
The relative proportion of the total remuneration opportunity of key management personnel of the Group is as follows:
Name
Non-Executive Directors:
M Boyte
T Smith1
W Cook
R Kent
Executive Directors:
P Ludemann
Other Key Management Personnel:
J Lamb
C Skead
1 Executive Director in FY2021.
Name
Executive Director:
P Ludemann
Other Key Management Personnel:
J Lamb
C Skead
1 Forfeited cash bonuses are not accrued in the relevant year’s result.
Fixed remuneration
2022
2021
At risk - STI
2022
2021
At risk - LTI
2022
2021
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
61%
67%
30%
31%
9%
62%
62%
66%
67%
28%
28%
30%
30%
10%
10%
-
-
-
-
2%
4%
3%
Cash bonus paid/payable
Cash bonus forfeited1
2022
2021
2022
2021
-
-
-
100%
100%
100%
100%
100%
100%
-
-
-
(c) Relationship between remuneration and Company performance
The table below summarises the Group’s performance and correlates it to the total key management personnel remuneration for
the financial year:
Metric
FY2022
FY2021
FY2020
FY2019
FY2018
Sales revenue ($’000)
NPAT attributable to shareholders
($’000)1
Operating EBITDA ($’000)
Share price at end of year ($)
Basic earnings per share (cents)
Dividends paid (cents per share)
KMP remuneration2 ($)
557,909
9,398
44,858
0.97
7.65
4.50
2,027,922
461,533
20,255
46,677
1.06
17.90
8.00
3,841,848
158,857
168,365
153,402
4,551
6,391
9,314
11,786
0.38
4.12
1.25
2,904,077
12,728
0.37
6.22
4.80
2,354,957
12,016
1.23
5.25
3.30
3,650,352
1 FY2018 is the pro-forma net profit after tax attributable to shareholders as disclosed in the 2018 financial report.
2 The number of executive KMP reduced in FY2022 as detailed above.
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Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
(d) Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements with no fixed
tenure requirements. Details of these agreements for FY2022 were as follows:
Name:
Title:
Details:
Name:
Title:
Details:
Name:
Title:
Details:
Peter Ludemann
Managing Director and Chief Executive Officer
Mr Ludemann has an annual total fixed remuneration (TFR) of $604,400 consisting of base salary,
superannuation and other benefits. Under the terms of his employment contract, he is eligible to
receive short term incentives (STI) with a maximum opportunity of 50% of TFR per annum (at
maximum performance levels). The STI will be in the form of an annual cash bonus, subject to the
achievement of key performance indicators as determined by the Board. Subject to shareholder
approval, Mr Ludemann will also be awarded long term incentives (LTI) under NTAW’s Employee
Equity Plan. He has statutory leave entitlements and is entitled to 5 weeks annual leave per year.
Either party may terminate the contract on 6 months’ notice. In the case of termination by NTAW,
NTAW may provide payment in lieu of notice. Mr Ludemann’s employment contract does not
contain any express redundancy provisions. Mr Ludemann’s contract contains a 5 year non-
compete restraint within Australia and New Zealand and a 12-month non-solicitation of employees,
contractors and clients who deal with NTAW.
Jason Lamb
Chief Financial Officer and joint Company Secretary
Mr Lamb has an annual total fixed remuneration (TFR) of $375,000 consisting of base salary,
superannuation and a car allowance. Under the terms of his employment contract, he is eligible to
receive short term incentives (STI) with a maximum opportunity of 45% of TFR per annum (at
maximum performance levels). The STI will be in the form of an annual cash bonus, subject to the
achievement of key performance indicators as determined by the Board. Mr Lamb will also be
awarded long term incentives (LTI) under NTAW’s Employee Equity Plan. He is eligible for short
term incentives as determined by the Board. Mr Lamb has statutory leave entitlements. Either
party may terminate the contract on 6 months’ notice. In the case of termination by NTAW, NTAW
may provide payment in lieu of notice. He is entitled to redundancy pay in accordance with NTAW’s
legal obligations. Mr Lamb’s contract contains a 6 month non-compete restraint within Australia
and a 6-month non-solicitation of employees, contacts and clients with whom he has contact with,
or influence over.
Colin Skead
Chief Executive Officer, T4UAU
Mr Skead has an annual total fixed remuneration (TFR) of $375,000 consisting of base salary,
superannuation and other benefits. Under the terms of his employment contract, he is eligible to
receive short term incentives (STI) with a maximum opportunity of 45% of TFR per annum (at
maximum performance levels). The STI will be in the form of an annual cash bonus, subject to the
achievement of key performance indicators as determined by the Board. Mr Skead will also be
awarded long term incentives (LTI) under NTAW’s Employee Equity Plan. He has statutory leave
entitlements. Either party may terminate the contract on 3 months’ notice. In the case of
termination by ETD, ETD may provide payment in lieu of notice. Mr Skead is entitled to redundancy
pay in accordance with the Company’s legal obligations. Mr Skead’s contract contains a 6 month
non-compete restraint within as specified geographical area and a 6-month non-solicitation of
employees, contacts and clients with whom he has contact with, or influence over.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
All key management personnel are required to keep information obtained during their employment confidential, both during their
employment and after their employment ends. Employment contracts contains an assignment of intellectual property created
during the course of their employment.
16
16
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
(e) Share-based compensation
There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30
June 2022 (2021: nil).
The terms and conditions of each grant of Rights to ordinary shares affecting remuneration of directors and other key management
personnel in this financial year are as follows:
Name
P Ludemann1
J Lamb
C Skead
Number of
options
granted
Grant date
Vesting date and
exercise date
228,590
114,295
114,295
17 Dec 21
17 Dec 21
17 Dec 21
30 Sep 24
30 Sep 24
30 Sep 24
Expiry date
30 Sep 26
30 Sep 26
30 Sep 26
Exercise
price
Fair value
per Right
at grant date
$0.00
$0.00
$0.00
$1.22
$1.22
$1.22
1 Approval for the issue of these options was obtained in accordance with ASX Listing Rule 10.14.
(f) Equity instruments held by key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at
the start of
the year
Ceased to be
KMP
Additions -
Share Purchase
Plan
Additions -
DRP
Additions/
(Disposals) -
On-market
Balance at
the end of
the year
Ordinary shares
M Boyte
T Smith
B Cook
R Kent
P Ludemann
J Lamb
C Skead
C Hummer1
T Wren1
L DeCelis1
203,163
27,255,297
403,132
282,133
2,759,928
363,722
3,500
4,652,522
655,737
209,595
-
-
-
-
-
-
-
(4,652,522)
(655,737)
(209,595)
22,223
66,669
22,223
22,223
-
-
-
-
-
-
14,820
-
5,677
20,378
-
-
-
-
-
-
-
-
20,000
-
-
(288,304)
-
-
-
-
240,206
27,321,966
451,032
324,734
2,759,928
75,418
3,500
-
-
-
36,788,729
(5,517,854)
133,338
40,875
(268,304)
31,176,784
1 No longer classified as key management personnel effective 1 July 2021.
16
17
17
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
Options
The number of options over ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the Group, including their personally related parties, is set out below:
Options
M Boyte
T Smith
B Cook
R Kent
P Ludemann
J Lamb
C Skead
C Hummer1
G Schramm1
T Wren1
Balance at
the start of
the year
Ceased to be
KMP
Granted /
Lapsed
Exercised
Balance at
the end of
the year
-
-
-
-
350,000
320,000
305,000
305,000
150,000
305,000
-
-
-
-
-
-
-
(305,000)
(150,000)
(305,000)
1,735,000
(760,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
350,000
320,000
305,000
-
-
-
975,000
1 No longer classified as key management personnel effective 1 July 2021.
All options on issue remain unvested as at 30 June 2022.
Rights
The number of Rights to ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the Group, including their personally related parties, is set out below
Balance at
the start of
the year
Granted
as part of
remuneration
Exercised
Lapsed
Balance at
the end of
the year
Rights
M Boyte
T Smith
B Cook
R Kent
P Ludemann
J Lamb
C Skead
-
-
-
-
-
-
-
-
-
-
-
-
228,590
114,295
114,295
457,180
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
228,590
114,295
114,295
457,180
All Rights on issue remain unvested as at 30 June 2022.
18
18
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Remuneration report (audited) (continued)
(g) Other transactions with key management personnel
Related party leases
During the reporting period, the Group leased business premises owned by a closely related party of an employee previously
classified as a KMP member. The lease expires on 30 May 2023 and has two 5-year renewal options. Rent payments for FY2022
totalled $179,335 (2021: $176,694), with $nil outstanding at 30 June 2022 (2021: $nil).
Loans to key management personnel
At 30 June 2022, there was an unsecured loan receivable from an employee previously classified as a member of KMP of $82,032
(2021: $82,032). No interest was paid on or payable during FY2022 in relation to this loan. $9,065 of interest would have been
charged if the loan was on an arms-length basis. No write down or allowance for doubtful receivables has been recognised in
relation to this loan. The loan is repayable on cessation of employment of the KMP.
This concludes the Remuneration Report, which has been audited.
Shares under option
There were 3,695,000 unissued ordinary shares of National Tyre & Wheel Limited under option outstanding at the date of this
report. These options were issued in three tranches with 1,775,000, 1,680,000 & 240,000 options outstanding, respectively; have
an exercise price of $0.3735, $0.5745 & $0.5745, respectively; and expire on 07/11/2024, 30/09/2025 & 30/09/2025, respectively.
The option holders have no right to participate in any share issue prior to exercising the options.
There were 1,125,802 unquoted rights to unissued ordinary shares of National Tyre & Wheel Limited outstanding at the date of
this report. These rights have a nil exercise price and expire on 30/09/2026. Further details of these rights and the KMP they were
granted to during FY2022 are included in the Remuneration Report.
Shares issued on the exercise of options
There were no ordinary shares of National Tyre & Wheel Limited issued on the exercise of options during the year ended 30 June
2022 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or
executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of
the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company
or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or
any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of
the Company for all or part of those proceedings.
18
19
19
Directors’ report 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2022
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are
outlined in note 31 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person
or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001.
The directors are of the opinion that the services as disclosed in note 31 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making
capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of Pitcher Partners
There are no officers of the Company who are former partners of Pitcher Partners.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
_____________________
Murray Boyte
Chairman
30 August 2022
Brisbane
20
20
Directors’ report 30 June 2022
The Directors
National Tyre & Wheel Limited
Level 2, 385 MacArthur Avenue
HAMILTON QLD 4007
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2022, to the best of my knowledge and
belief there have been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act 2001;
and
No contraventions of APES 110 Code of Ethics for Professional Accountants (including
Independence Standards).
This declaration is in respect of National Tyre & Wheel Limited and the entities it controlled during the
year.
PITCHER PARTNERS
WARWICK FACE
Partner
Brisbane, Queensland
30 August 2022
Brisbane Sydney Newcastle Melbourne Adelaide Perth
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
pitcher.com.au
NIGEL FISCHER
MARK NICHOLSON
PETER CAMENZULI
JASON EVANS
KYLIE LAMPRECHT
NORMAN THURECHT
BRETT HEADRICK
WARWICK FACE
COLE WILKINSON
SIMON CHUN
JEREMY JONES
TOM SPLATT
JAMES FIELD
DANIEL COLWELL
ROBYN COOPER
FELICITY CRIMSTON
CHERYL MASON
KIERAN WALLIS
MURRAY GRAHAM
ANDREW ROBIN
KAREN LEVINE
21
National Tyre & Wheel Limited and its controlled entities
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Statement of profit or loss and other comprehensive income for the year ended 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
2022
$'000
Note
2021
$'000
Note
5
6
30
5
6
30
7
7
8
7
7
8
Revenue from contracts with customers
Other income
Gain on bargain purchase
Revenue from contracts with customers
Other income
Expenses
Gain on bargain purchase
Cost of goods sold
Employee benefits and other related costs
Expenses
Depreciation and amortisation
Cost of goods sold
Occupancy
Employee benefits and other related costs
Computer and software costs
Depreciation and amortisation
Motor vehicle costs
Occupancy
Marketing
Computer and software costs
Insurance
Motor vehicle costs
Professional fees and acquisition costs
Marketing
Other
Insurance
Finance costs
Professional fees and acquisition costs
Other
Profit before income tax expense
Finance costs
Income tax expense
Profit before income tax expense
Profit after income tax expense
Income tax expense
Other comprehensive income
Profit after income tax expense
Items that may be reclassified subsequently to profit or loss
Other comprehensive income
Foreign currency translation
Items that may be reclassified subsequently to profit or loss
Other comprehensive income for the year, net of tax
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year
Profit for the year is attributable to:
Non-controlling interest
Profit for the year is attributable to:
Owners of National Tyre & Wheel Limited
Non-controlling interest
Owners of National Tyre & Wheel Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Total comprehensive income for the year is attributable to:
Owners of National Tyre & Wheel Limited
Non-controlling interest
Owners of National Tyre & Wheel Limited
Basic earnings per share
Diluted earnings per share
Basic earnings per share
Diluted earnings per share
25
25
25
25
557,909
2022
$'000
805
-
557,909
461,533
2021
$'000
1,357
596
461,533
805
-
(397,802)
(77,856)
(20,904)
(9,139)
(6,956)
(5,584)
(4,316)
(3,824)
(2,904)
(9,774)
(5,091)
(397,802)
(77,856)
(20,904)
(9,139)
(6,956)
(5,584)
(4,316)
(3,824)
(2,904)
(9,774)
(5,091)
14,564
1,357
596
(324,023)
(58,612)
(14,278)
(7,984)
(3,733)
(3,715)
(6,178)
(3,070)
(3,530)
(6,439)
(3,006)
(324,023)
(58,612)
(14,278)
(7,984)
(3,733)
(3,715)
(6,178)
(3,070)
(3,530)
(6,439)
(3,006)
28,918
(4,995)
14,564
(8,378)
28,918
(4,995)
9,569
(8,378)
20,540
9,569
20,540
(2,853)
740
(2,853)
(2,853)
740
740
(2,853)
6,716
740
21,280
6,716
21,280
171
9,398.
171
9,398.
9,569.
285.
20,255.
285.
20,255.
20,540.
9,569.
20,540.
171
6,545
171
6,545
6,716.
285.
20,995.
285.
20,995.
21,280.
6,716.
Cents
21,280.
Cents
7.65
7.41
Cents
7.65
7.41
17.90
17.56
Cents
17.90
17.56
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
22
22
22
National Tyre & Wheel Limited and its controlled entities
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Statement of financial position
National Tyre & Wheel Limited and its controlled entities
Statement of financial position
As at 30 June 2022
Revenue from contracts with customers
Other income
Gain on bargain purchase
Assets
Current assets
Expenses
Cash and cash equivalents
Cost of goods sold
Trade and other receivables
Employee benefits and other related costs
Inventories
Other financial assets
Depreciation and amortisation
Prepayments
Occupancy
Current tax asset
Computer and software costs
Total current assets
Motor vehicle costs
Marketing
Insurance
Professional fees and acquisition costs
Other
Finance costs
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other financial assets
Deferred tax
Total non-current assets
Profit before income tax expense
Income tax expense
Total assets
Profit after income tax expense
Other comprehensive income
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Current tax liability
Total current liabilities
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Non-controlling interest
Owners of National Tyre & Wheel Limited
Non-current liabilities
Payables
Borrowings
Lease liabilities
Provisions
Deferred tax
Total non-current liabilities
Total liabilities
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of National Tyre & Wheel Limited
Net assets
Equity
Issued capital
Reserves
Retained earnings
Equity attributable to the owners of National Tyre & Wheel Limited
Non-controlling interest
Basic earnings per share
Diluted earnings per share
Note
Note
5
6
30
9
10
11
12
7
13
14
15
12
8
7
8
16
17
18
19
16
17
18
19
8
20
21
25
25
as at 30 June 2022
2022
$'000
557,909
2022
$'000
805
-
35,826
(397,802)
98,425
(77,856)
127,133
1,455
(20,904)
5,154
(9,139)
1,216
(6,956)
269,209
(5,584)
(4,316)
(3,824)
16,817
(2,904)
65,081
(9,774)
53,764
(5,091)
623
-
14,564
136,285
(4,995)
405,494
2021
$'000
461,533
2021
$'000
1,357
596
28,905
(324,023)
71,807
(58,612)
101,025
835
(14,278)
4,265
(7,984)
-
(3,733)
206,837
(3,715)
(6,178)
(3,070)
10,167
(3,530)
33,544
(6,439)
15,698
(3,006)
116
2,076
61,601
28,918
(8,378)
268,438
9,569
20,540
106,066
7,550
(2,853)
16,016
13,238
(2,853)
-
142,870
6,716
171
9,398.
2,600
88,244
51,581
2,047
5,686
150,158
9,569.
293,028
171
6,545
112,466
82,335
2,954
9,496
11,904
1,138
107,827
740
740
21,280
-
41,940
285.
24,472
20,255.
2,386
-
20,540.
68,798
176,625
285.
20,995.
91,813
6,716.
21,280.
Cents
93,122
(2,107)
17,941
108,956
3,510
7.65
7.41
Cents
70,204
62
17.90
18,208
17.56
88,474
3,339
22
Total equity
112,466
91,813
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
The above statement of financial position should be read in conjunction with the accompanying notes
22
23
23
for the year ended 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Statement of changes in equity
Statement of profit or loss and other comprehensive income
National Tyre & Wheel Limited and its controlled entities
For the year ended 30 June 2022
Statement of changes in equity
For the year ended 30 June 2022
Revenue from contracts with customers
Issued
Other income
Gain on bargain purchase
capital
$'000
Foreign
currency
translation
reserve
$'000
Share-based
payments
reserve
$'000
Expenses
Balance at 1 July 2020
Cost of goods sold
Employee benefits and other related costs
Profit after income tax expense for
Depreciation and amortisation
the year
Occupancy
Other comprehensive income for
Computer and software costs
the year, net of tax
Motor vehicle costs
Total comprehensive income for
Marketing
the year
Insurance
Professional fees and acquisition costs
Transactions with owners in their
Other
capacity as owners:
Finance costs
Shares issued as consideration in
acquisition (note 20 and note 30)
Profit before income tax expense
Share-based payments (note 24)
Income tax expense
Dividends paid (note 22)
-
-
-
4,858
-
74
-
740
740
-
-
-
-
-
-
-
181
-
Note
5
Retained
earnings
6
$'000
30
2022
$'000
Non-
557,909
controlling
interest
805
-
$'000
3,054
285
-
285
(397,802)
(77,856)
(20,904)
(9,139)
(6,956)
(5,584)
(4,316)
(3,824)
(2,904)
(9,774)
(5,091)
14,564
-
-
-
7
20,255
-
20,255
7
-
-
8
(3,425)
(4,995)
65,272
(914)
55
1,378.
Profit after income tax expense
Balance at 30 June 2021
Other comprehensive income
70,204
(174)
236
18,208
Items that may be reclassified subsequently to profit or loss
Balance at 1 July 2021
Foreign currency translation
70,204
(174)
-
Profit after income tax expense for
Other comprehensive income for the year, net of tax
the year
Other comprehensive income for
Total comprehensive income for the year
the year, net of tax
Total comprehensive income for
Profit for the year is attributable to:
the year
Non-controlling interest
Owners of National Tyre & Wheel Limited
Transactions with owners in their
capacity as owners:
-
-
-
(2,853)
(2,853)
236
18,208.
-
-
-
9,398
-
9,398
Shares issued (note 20)
Total comprehensive income for the year is attributable to:
Share-based payments (note 24)
Non-controlling interest
Dividends paid (note 22)
Owners of National Tyre & Wheel Limited
22,401
517
-
-
-
-
-
684
-
-
-
(9,665)
9,569
3,339
3,339
(2,853)
(2,853)
171
6,716
-
171
171
9,398.
9,569.
-
-
-
171
6,545
2021
$'000
461,533
Total equity
1,357
596
$'000
68,845
(324,023)
(58,612)
(14,278)
20,540
(7,984)
(3,733)
740
(3,715)
(6,178)
21,280
(3,070)
(3,530)
(6,439)
(3,006)
4,858
28,918
181
(8,378)
(3,351)
20,540
91,813
91,813
740
740
9,569
21,280
(2,853)
6,716
285.
20,255.
20,540.
22,401
684
285.
(9,148)
20,995.
Balance at 30 June 2022
93,122
(3,027)
920
17,941
3,510
6,716.
112,466
21,280.
Basic earnings per share
Diluted earnings per share
Cents
7.65
7.41
Cents
17.90
17.56
25
25
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
The above statement of changes in equity should be read in conjunction with the accompanying notes
22
24
24
National Tyre & Wheel Limited and its controlled entities
Statement of cash flows
Statement of profit or loss and other comprehensive income
National Tyre & Wheel Limited and its controlled entities
For the year ended 30 June 2022
Statement of cash flows
For the year ended 30 June 2022
for the year ended 30 June 2022
Revenue from contracts with customers
Cash flows from operating activities
Other income
Receipts from customers
Gain on bargain purchase
Payments to suppliers and employees
Net cash from operating activities
Expenses
Interest received
Cost of goods sold
Interest and other finance costs paid
Employee benefits and other related costs
Income taxes paid
Depreciation and amortisation
Occupancy
Computer and software costs
Motor vehicle costs
Marketing
Insurance
Professional fees and acquisition costs
Other
Finance costs
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Transfers to term deposits
Net cash used in investing activities
Profit before income tax expense
Income tax expense
Cash flows from financing activities
Proceeds from share issue
Payment of capital raising costs
Profit after income tax expense
Proceeds from borrowings
Repayment of borrowings
Other comprehensive income
Repayment of lease liabilities
Dividends paid
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Net cash from financing activities
Other comprehensive income for the year, net of tax
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Total comprehensive income for the year
Cash and cash equivalents at the end of the financial year
Profit for the year is attributable to:
Non-controlling interest
Owners of National Tyre & Wheel Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of National Tyre & Wheel Limited
Basic earnings per share
Diluted earnings per share
Note
Note
5
6
30
7
23
30
7
8
9
25
25
2022
$'000
2022
$'000
557,909
2021
$'000
2021
$'000
461,533
805
614,601
-
(591,005)
23,596
81
(4,855)
(6,985)
(397,802)
(77,856)
(20,904)
(9,139)
(6,956)
(5,584)
(4,316)
(48,496)
(3,824)
(5,132)
(2,904)
1,548
(9,774)
(483)
(5,091)
11,837
1,357
486,769
596
(454,286)
32,483
57
(2,859)
(7,015)
(324,023)
(58,612)
(14,278)
(7,984)
(3,733)
(3,715)
(6,178)
(36,496)
(3,070)
(2,554)
(3,530)
31.
(6,439)
(140)
(3,006)
22,666
(52,563)
14,564
(4,995)
19,904.
(585)
9,569
48,068.
-
(13,376)
(9,148)
(2,853)
44,863
(2,853)
4,137
28,451
6,716
188
32,776
171
9,398.
(39,159)
28,918
(8,378)
-.
-
20,540
38,164.
(6,095)
(9,664)
(3,352)
740
19,053
740
2,560
25,859
32
21,280
28,451
285.
20,255.
9,569.
20,540.
171
6,545
285.
20,995.
6,716.
21,280.
Cents
7.65
7.41
Cents
17.90
17.56
24
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
The above statement of cash flows should be read in conjunction with the accompanying notes
22
25
25
27
27
36
37
37
37
38
39
40
40
40
41
41
42
43
44
45
46
47
48
49
49
50
51
57
57
58
58
62
62
65
65
66
66
67
69
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 1. General information
Note 2. Significant accounting policies
Note 3. Critical accounting judgements, estimates and assumptions
Note 4. Operating segments
Note 5. Revenue from contracts with customers
Note 6. Other income
Note 7. Expenses
Note 8. Income tax
Note 9. Cash and cash equivalents
Note 10. Trade and other receivables
Note 11. Inventories
Note 12. Other financial assets
Note 13. Property, plant and equipment
Note 14. Right-of-use assets
Note 15. Intangible assets
Note 16. Trade and other payables
Note 17. Borrowings
Note 18. Lease liabilities
Note 19. Provisions
Note 20. Issued capital
Note 21. Reserves
Note 22. Dividends
Note 23. Cash flow information
Note 24. Share-based payments
Note 25. Earnings per share
Note 26. Key management personnel disclosures
Note 27. Related party transactions
Note 28. Financial instruments
Note 29. Fair value measurement
Note 30. Business combinations
Note 31. Remuneration of auditors
Note 32. Contingent liabilities
Note 33. Interests in subsidiaries
Note 34. Parent entity information
Note 35. Deed of cross guarantee
Note 36. Events after the reporting period
26
26
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 1. General information
The financial statements cover National Tyre & Wheel Limited as a Group consisting of National Tyre & Wheel Limited (“Company”
or “parent entity”) and the entities it controlled at the end of, or during, the year (“Group” or "NTAW”). The financial statements
are presented in Australian Dollars (“AUD”), which is National Tyre & Wheel Limited's functional and presentation currency.
National Tyre & Wheel Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 2, 385 MacArthur Avenue
Hamilton QLD 4007
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not
part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 August 2022. The directors
have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board (“IASB”).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of
financial assets and liabilities at fair value through profit or loss and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in
note 3.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board that are mandatory for the current reporting period.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 34.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of National Tyre & Wheel Limited as
at 30 June 2022 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are de-consolidated from the date that control ceases.
26
27
27
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without
the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the
book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses incurred by the
Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair
value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the
internal reports provided to the Chief Operating Decision Makers (“CODM”). The CODM is responsible for the allocation of
resources to operating segments and assessing their performance.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into Australian Dollars 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
financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or
loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian Dollars using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated into Australian Dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in
other comprehensive income through the foreign currency translation reserve in equity.
The foreign currency translation reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer;
identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of
variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the
basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as
each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates
and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined
using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a
constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in
the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are recognised as a refund liability.
28
28
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally
at the time of delivery.
Services revenue
Revenue from services performed is recognised when the services are rendered. No services performed include multiple
deliverables.
Other income
Interest income
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount
of the financial asset.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants are recognised when conditions attached to the grants have been complied with and the right to receive the
grant has been established. Government grants received during the financial year were limited to funds received from the
Australian Government under the JobKeeper Payment scheme. These have been classified as other income.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income
tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences,
unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets
are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying
amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are
future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current
tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the
same taxable entity or different taxable entities which intend to settle simultaneously.
National Tyre & Wheel Limited (the 'head entity') and its wholly owned Australian subsidiaries (Exclusive Tyre Distributors Pty Ltd,
Dynamic Wheel Co Pty Limited, Integrated OE Pty Ltd, Statewide Tyre Distribution Pty Ltd, Tyres4U Pty Ltd, Tyreright Operation Pty
Ltd, NTAW Logistics Pty Ltd, Black Rubber Pty Ltd and Black Rubber Sydney Pty Ltd), have formed an income tax consolidated group
under the tax consolidation regime. The head entity and subsidiary in the tax consolidated group continue to account for their own
current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in
determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
28
29
29
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and
the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated
group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge
equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily
for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to
defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents
also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach under AASB 9 Financial Instruments to measuring expected credit losses, which uses
a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Expected credit losses are based on a review of receivable balances and identification of specific debtors, based on historical credit
loss experience, and adjusted for factors that are specific to the receivable balance, as well as current and forward-looking economic
conditions affecting the ability of the customers to settle the receivables.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Inventories
Finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises of purchase and
delivery costs, net of rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of rebates
and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
30
30
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured
to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Group has not satisfied the documentation, designation and effectiveness tests required by Australian Accounting Standards,
as such they do not qualify for hedge accounting and gains or losses arising from changes in fair value are recognised immediately
in profit or loss.
Derivatives are classified as current or non-current depending on the expected period of realisation.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on a diminishing value basis to write off the net cost of each item of property, plant and equipment over
their expected useful lives as follows:
Leasehold improvements
Plant and equipment
Motor vehicles
2.5% to 15%
5% to 60%
13.5% to 30%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the shorter of the unexpired period of the lease or the estimated useful life of the
assets.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date
net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an
estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of
the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term,
the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
30
31
31
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Lease liabilities
Lease liabilities are recognised at the commencement date of a lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which
they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there
is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the
date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not
amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at
cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of
intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset.
The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption
or useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or
more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Brand names
Brand names are assessed as having an indefinite useful life on the basis of brand strength, ongoing expected profitability and
continuing support. Brand names are not amortised, but are instead tested for impairment annually, or more frequently if events
or changes in circumstances indicate that it might be impaired.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected
benefit, being their finite useful life of 7 to 10 years.
Importation rights
Importation rights acquired are amortised on a straight-line basis over the term of the distribution agreement, being 9 years.
Importation rights are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the
rights might be impaired (e.g. compliance with the terms of the rights agreement including achieving minimum annual purchase
volume levels).
Accreditations
Accreditations acquired in a business combination are assessed as having an indefinite useful life on the basis the accreditation is
maintained. Accreditations are not amortised, but are instead tested for impairment annually, or more frequently if events or
changes in circumstances indicate that it might be impaired.
32
32
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating
unit (“CGU”) to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-
generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which
are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period
in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled
wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled wholly within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to the
reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods
of service. Expected future payments are discounted using market yields at the reporting date on high-quality corporate bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, which are provided to employees in exchange for the
rendering of services.
32
33
33
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either
the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the Group
receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period.
The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number
of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period
is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the
share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any
remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated
as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value
is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they
act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use.
Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels
are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable,
with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from
the proceeds.
34
34
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of National Tyre & Wheel Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax (“GST”) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from,
or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which
are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Comparative information
Comparatives have been reclassified, where applicable, to align with current year presentation. There was no impact on the results
or financial position of the Group.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
No Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have been early adopted by the Group for the annual reporting period ended 30 June 2022. These Standards and Interpretations
are not expected to have a material impact on the Group in the current of future reporting periods and on foreseeable future
transactions.
34
35
35
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of future events, management believes to be reasonable
under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The
judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities (refer to the respective notes) within the next financial year are discussed below.
Recognition of identifiable intangible assets on acquisition
Brand names, importation rights, customer relationships and accreditations have been recognised on the acquisition of subsidiaries
in the reporting period and prior period. The valuation of these assets is based on the acquisition date present value of expected
future cash flows associated with the brand and the recurring current customers covering a period of 5 to 12 years (2021: 5 to 12
years). These cash flows have been calculated using annual growth rates of between 2.0%-6.3% (2021: 3.0%-6.3%), a terminal
growth rate of 2.0%-2.5% (2021: 2.5%) and a pre-tax discount rate between 13.0%-20.0% (2021: 17.0%-20.0%).
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and
other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 2. The
recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require
the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated
future cash flows (refer to note 15).
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is determined. This involves value-in-use calculations, which
incorporate a number of key estimates and assumptions. No impairment trigger was present in the 2021 and 2022 financial years.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by using the Binomial model taking into account the terms and
conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-
based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but
may impact profit or loss and equity.
Share-based payments expense under the employee share option plan has been recognised over the expected vesting period of
the options. The share-based payment expense incurred is equal to the value of the options and management have assessed the
fair value of the options using a Binominal model with the following key criteria: pre-determined exercise price, share price at grant
date based on estimated enterprise value of the company, risk-free rate, volatility of share price and assumed vesting period from
grant date (refer to note 24 for further details of each group of options issued).
Warranty provision
In determining the level of provision required for warranties the Group has made judgements in respect of the expected
performance of the products, the number of customers who will actually claim under the warranty and how often, and the costs
of fulfilling the conditions of the warranty (refer to note 19).
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the
provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which
the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's
current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such
differences will impact the current and deferred tax provisions in the period in which such determination is made (refer to note 8).
36
36
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 4. Operating segments
Identification of reportable operating segments
The Group's operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are
identified as the Chief Operating Decision Makers (“CODM”)) in assessing performance and in determining the allocation of
resources.
The Directors are of the opinion that there is one reportable segment in the Group as the CODM reviews results, assesses
performance and allocates resources at a Group level.
As the information reported to the CODM is the consolidated results of the Group, the segment results are shown throughout these
financial statements and are not duplicated here.
Non-current assets
As at 30 June 2022, $116,524,000 (2021: $49,614,000) of the Group's non-current assets (excluding deferred taxes) were held in
Australia, with $19,650,000 held in New Zealand (2021: $9,605,000) and $343,000 (2021: $306,000) held in South Africa,
respectively.
Major customers
During FY2022, none of the Group's external revenue was derived from sales of greater than 10% to any customer (2021: none).
Note 5. Revenue from contracts with customers
Sale of goods and services revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers by geographic region is as follows:
Australia
New Zealand
South Africa
2022
$'000
2021
$'000
557,909
461,533
557,909
461,533
441,699
104,771
11,439
378,593
70,968
11,972
557,909
461,533
During the 2022 and 2021 financial years, all revenue from sale of goods was recognised as the goods were transferred at a point
in time and revenue from services was recognised as the service was performed over time.
Note 6. Other income
Government grants
Recovery of bad debts
Interest income
Other income
2022
$'000
-
217
81
507
805
2021
$'000
974
33
57
293
1,357
36
37
37
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 7. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Motor vehicles
Right-of-use assets
Total depreciation
Amortisation
Customer relationships
Importation rights
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable for financial liabilities
Interest and finance charges paid/payable for lease liabilities
Other interest and finance charges paid/payable
Finance costs expensed
Net foreign exchange loss/(gain)
Expense relating to leases
Expense relating to short-term leases
Expense relating to leases of low value assets
2022
$'000
2021
$'000
180
1,600
1,460
15,494
70
1,331
966
10,870
18,734
13,237
1,641
529
2,170
512
529
1,041
20,904
14,278
3,288
1,784
19
5,091
1,445
1,382
-
1,382
1,877
1,099
30
3,006
(848)
3,486
8
3,494
Superannuation expense
Defined contribution superannuation expense
4,928
3,709
38
38
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 8. Income tax
Income tax expense
Current tax
Deferred tax
Under/(over) provision in prior years
Income tax expense
Deferred tax included in income tax expense comprises:
(Increase)/decrease in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Sundry items
Adjustment recognised for prior periods
Difference in overseas tax rates
Income tax expense
Deferred tax
Net deferred tax comprises temporary differences attributable to:
Capital raising costs
Acquisition costs
Provisions
Property, plant and equipment
Intangibles
Right-of-use assets
Other
Lease liabilities
Foreign currency exchange
2022
$'000
4,714
168
113
4,995
2021
$'000
8,088
534.
(244)
8,378
168
534
14,556
28,918
4,367
8,675
623
55
4,927
8,730
113
(108)
4,995
10
19
4,613
(3,940)
(6,603)
(18,949)
(377)
19,822
(281)
(244)
(108)
8,378
354
128
3,662
(485)
(1,454)
(9,541)
(184).
9,678
(82).
Deferred tax (liabilities)/asset
(5,686)
2,076
Movements:
Opening balance
Recognition of deferred taxes on acquisition (note 30)
Credited/(charged) to profit or loss
(Under)/over provision in prior year
Foreign exchange differences
Closing balance
2,076
(5,697)
(168)
(1,881)
(16)
(5,686)
900
2,302
(534)
(595)
3
2,076
38
39
39
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 9. Cash and cash equivalents
Cash at bank
2022
$'000
2021
$'000
35,826
28,905
35,826
28,905
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement of cash
flows as follows:
Balances as above
Bank overdraft (note 17)
Balance as per statement of cash flows
Note 10. Trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
35,826.
(3,050)
28,905.
(454)
32,776.
28,451.
98,426
(1,197)
97,229
1,196
71,818
(448)
71,370
437
98,425
71,807
Allowance for expected credit losses
The Group has recognised a net loss of $487,000 (2021: $156,000) in profit or loss in respect of the expected credit losses. Trade
receivables past due but not impaired amount to $11,408,000 (2021: $7,169,000).
At 30 June 2022 an ageing analysis of those trade receivables are as follows:
Not overdue
1 to 30 days overdue
31 to 60 days overdue
61 plus days overdue
Refer to note 28 for further information on financial instruments.
Note 11. Inventories
Finished goods - at cost
Less: Provision for impairment
Stock in transit - at cost
40
40
85,821
8,237
1,675
1,496
64,201
4,209
1,499
1,461
97,229
71,370
115,628
(737)
114,891
88,745
(433)
88,312
12,242
12,713
127,133
101,025
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 12. Other financial assets
Current
Forward foreign exchange contracts
Lease receivables
Term deposits
Non-Current
Term deposits
Lease receivables
Refer to note 29 for further information on fair value measurement of forward foreign exchange contracts.
2022
$'000
1,340
115
-
1,455
623
-
623
2021
$'000
587
108
140
835
-
116
116
Note 13. Property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
1,786
(429)
1,357
22,177
(12,283)
9,894
19,675
(14,109)
5,566
1,568
(1,136)
432
21,220
(15,204)
6,016
19,127
(15,408)
3,719
16,817
10,167
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Leasehold
improvements
$'000
Plant and
equipment
$'000
Motor
vehicles
$'000
Total
$'000
Balance at 1 July 2020
Additions as part of acquisition (note 30)
Additions
Disposals
Depreciation expense
Foreign exchange differences
Balance at 30 June 2021
Additions as part of acquisition (note 30)
Additions
Disposals
Depreciation expense
Foreign exchange differences
359
107
24
-
(70)
12
432
371
794
(189)
(180)
129
1,726
4,610
1,074
(110)
(1,331)
47
6,016
3,661
2,766
(722)
(1,600)
(227)
1,530
1,943
1,454
(261)
(966)
19
3,719
2,193
1,572
(339)
(1,460)
(119)
3,615
6,660
2,552
(371)
(2,367)
78
10,167
6,225
5,132
(1,250)
(3,240)
(217)
Balance at 30 June 2022
1,357
9,894
5,566
16,817
40
41
41
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 14. Right-of-use assets
Land and buildings - right-of-use
Less: Accumulated depreciation
Plant and equipment - right-of-use
Less: Accumulated depreciation
Motor vehicles - right-of-use
Less: Accumulated depreciation
2022
$'000
90,148
(29,881)
60,267
1,128
(332)
796
5,258
(1,240)
4,018
2021
$'000
47,826
(15,993)
31,833
553
(146)
407
1,757
(453)
1,304
65,081
33,544
Reconciliations
Reconciliations of the written down values at the beginning and end of the current year are set out below:
Balance at 1 July 2020
Additions as part of acquisition (note 30)
Additions
Lease modifications
Disposals
Depreciation expense
Foreign exchange differences
Balance at 30 June 2021
Additions as part of acquisition (note 30)
Additions
Lease modifications
Depreciation expense
Foreign exchange differences
Balance at 30 June 2022
Land and
buildings
$'000
Plant and
equipment
$'000
Motor vehicles
$'000
Total
$'000
11,486
27,935
1,923
1,016
-
(10,529)
2.
31,833
12,808
25,543
5,018
(14,500)
(435)
60,267
115
52
308
-
-
(73)
5.
407
89
613
-
(188)
(125).
796
199
320
1,056
-
(12)
(266)
7.
1,304
2,949
694
-
(806)
(123)
4,018
11,800
28,307
3,287
1,016
(12)
(10,868)
14.
33,544
15,846
26,850
5,018
(15,494)
(683).
65,081
42
42
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 15. Intangible assets
Goodwill
Less: Accumulated impairment loss
Customer relationships
Less: Accumulated amortisation and impairment loss
Importation rights
Less: Accumulated amortisation and impairment loss
Brand names
Accreditations
2022
$'000
30,311
(1,311)
29,000
17,484
(3,984)
13,500
12,106
(9,352)
2,754
8,310
200
2021
$'000
8,878
(1,311)
7,567
4,798
(2,343)
2,455
12,106
(8,823)
3,283
2,393
-
53,764
15,698
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Goodwill
$'000
Customer
relationships
$'000
Importation
rights
$'000
Brand
Names
$'000
Accreditations
$'000
Total
$'000
Balance at 1 July 2020
Amortisation expense
Balance at 30 June 2021
Additions (note 30)
Amortisation expense
Foreign exchange differences
7,567
-
7,567
22,023
-
(590)
2,967
(512)
2,455
12,817
(1,641)
(131)
3,812
(529)
3,283
-
(529)
-
2,393
-
2,393
6,077
-
(160)
Balance at 30 June 2022
29,000
13,500
2,754
8,310
-
-
-
200
-
-
200
16,739
(1,041)
15,698
41,117
(2,170)
(881)
53,764
Impairment testing
For the purpose of impairment testing, goodwill and brand names are allocated to the respective cash-generating units:
Goodwill
CGU:
- Tyres and wheels
- OE
- Black Rubber
- Carter’s
Brand names
CGU:
- OE
- Black Rubber
- Carter’s
6,002
2,339
7,680
12,979
29,000
2,393
2,400
3,517
8,310
5,228
2,339
-
-
7,567
2,393
-
-
2,393
42
43
43
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 15. Intangibles assets (continued)
The Group tests whether goodwill and brand names have suffered any impairment on an annual basis. The recoverable amount of
the CGUs was determined based on value-in-use calculations which require the use of assumptions. The calculations are conducted
using a discount cash flow methodology based on financial budgets approved by the Board of Directors for the 2023 financial year.
The FY2023 cashflow budgets have then been extrapolated using estimated annual growth rates, together with terminal growth
rates. These growth rates are considered reasonable in light of the 2022 base cashflows and are consistent with forecasts included
in industry reports specific to the industry in which each CGU operates.
The following table sets out the key assumptions for those CGUs that have significant goodwill and brand names allocated to them,
which have not been impaired during the year:
Tyres and
wheels
%
Average annual growth rate (%)
Terminal growth rate (%)
Pre-tax discount rate (%)
2.0%
2.0%
13.3%
2022
2021
OE
%
2.0%
2.0%
15.3%
Black
Rubber
%
2.0%
2.0%
14.1%
Carter’s
%
2.0%
2.0%
15.8%
Tyres and
wheels
%
2.0%
2.0%
16.1%
OE
%
2.0%
2.0%
16.0%
Management has determined the value assigned to each of the above key assumptions as follows:
Assumption
Approach used to determine values
Annual growth rate
Terminal growth rate
Discount rate
Average annual growth rate over the five-year forecast period beyond the 2023 financial year is based
on the cashflow budgets, past performance and management’s expectations of market development.
Terminal growth rate was based on the 2023 forecast cashflows and management’s expectations of
long-term growth.
A post-tax estimate based on NTAW’s weighted average cost of capital.
Significant estimate: Impact of possible changes in key assumptions
A sensitivity analysis was performed on key assumptions in the 2022 and 2021 financial years, as follows:
• Average annual growth rates – reduction by 1%
•
• Discount rate – increase by 1%
Terminal growth rate – reduction by 1%
• No impairment in any CGU.
• No impairment in any CGU.
• No impairment in any CGU.
Note 16. Trade and other payables
Current
Trade payables
Accruals and other payables
Deferred consideration
Non-current
Deferred consideration
Refer to note 28 for further information on financial instruments.
44
44
2022
$'000
74,793
28,673
2,600
2021
$'000
60,140
22,195
-
106,066
82,335
2,600
2,600
-
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 17. Borrowings
Current
Bank overdraft
Bank facility
Non-current
Bank facility
Total secured liabilities
The total secured liabilities are as follows:
Bank overdraft
Bank facility
The bank facility has an expiry date of 28 October 2024.
Refer to note 28 for further information on financial instruments.
2022
$'000
3,050
4,500
7,550
2021
$'000
454
2,500
2,954
88,244
41,940
88,244
41,940
3,050
92,744
454
44,440
95,794
44,894
Assets pledged as security
The bank facility is secured over the assets of National Tyre & Wheel Limited and all subsidiaries except Top Draw Tyres Proprietary
Limited.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft
Bank facility
Bank guarantee
Used at the reporting date
Bank overdraft
Bank facility1
Bank guarantee
1 Includes lease liabilities which were funded by the bank facility.
Unused at the reporting date
Bank overdraft
Bank facility
Bank guarantee
3,514
104,000
10,000
117,514
3,050
94,718
8,305
106,073
464
9,282
1,695
11,441
5,454
56,500
7,692
69,646
454
45,445
7,692
53,591
5,000
11,055
-
16,055
44
45
45
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 18. Lease liabilities
Current
Property leases
Equipment leases
Motor vehicle leases
Non-current
Property leases
Equipment leases
Motor vehicle leases
2022
$'000
14,655
301
1,060
16,016
48,355
272
2,954
2021
$'000
8,889
129
478
9,496
23,353
262
857
51,581
24,472
The Group has leases for warehouse and office facilities, warehouse equipment and motor vehicles. Leases are either non-
cancellable or may only be cancelled by incurring a substantive termination fee. All variable payments are linked to an index. The
lease liabilities are secured by the related underlying asset.
Leasing activities
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset.
Right-of-use asset
No. of
leases
Range of
remaining
term (yrs)
Average
remaining
term (yrs)
No. of leases
with
extension
options
No. of leases
with
purchase
options
No. of leases
with variable
payments
linked to an
index
No. of leases
with
termination
options
Land and buildings
Plant and equipment
Motor vehicles
74
13
76
0.1 – 10.0
1.4 – 4.1
0.1 – 6.4
3.1
3.0
2.9
52
-
-
-
2
34
45
-
-
-
-
-
The total cash outflow for leases in the 2022 financial year was $15,160,000 (2021: $10,763,000).
46
46
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 19. Provisions
Current
Employee benefits
Warranties
Make-good
Non-current
Employee benefits
Warranties
Make-good
2022
$'000
12,089
754
395
2021
$'000
10,139
964
801
13,238
11,904
836
861
350
2,047
617
1,105
664
2,386
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have completed the required
period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount
is presented as current, since the Group does not have an unconditional right to defer settlement. Based on past experience, the
Group expects all employees to take the full amount of accrued leave or require payment within the next 12 months.
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the reporting
date. The provision is estimated based on historical warranty claim information, sales levels and any recent trends that may suggest
future claims could differ from historical amounts
Make-good
The provision represents the present value of the estimated expenditure required to restore leased premises to their original
condition at the end of the lease term . These costs have been capitalised as part of the cost right-of-use assets once a reliable
estimate of the cost can be made and are amortised over the term of the lease.
Movements in provisions
Movements in each class of provision (current and non-current) during the current financial year, other than employee benefits,
are set out below:
Warranties
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
Carrying amount at the end of the year
Make-good
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
Carrying amount at the end of the year
2022
$'000
2,069
201
(655)
1,615
1,465
19
(739)
745
46
47
47
Notes to the financial statements 30 June 2022
$'000
65,272
4,858
74
70,204
205
1,200
8,507
1,882
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 20. Issued capital
Ordinary shares - fully paid
131,936,002
114,294,863
93,122
70,204
2022
Shares
2021
Shares
2022
$'000
2021
$'000
Movements in ordinary share capital
Details
Balance
Date
Shares
Issue price
1 Jul 2020
102,891,313
Shares issued as consideration in acquisition (note 30)
Shares issued per Dividend Reinvestment Plan
4 Aug 2020
9 Apr 2021
11,315,903
87,647
$0.4293
$0.8500
Balance
Shares issued per Dividend Reinvestment Plan
Shares issued as consideration in Black Rubber
acquisition (note 30)
Shares issued per Placement, net of capital raising costs
Shares issued as consideration in Carter’s acquisition
(note 30)
Shares issued per Share Purchase Plan, net of capital
raising costs
Shares issued per Dividend Reinvestment Plan
30 June 2021
114,294,863
15 Oct 2021
2 Nov 2021
21 Dec 2021
7 Jan 2022
188,447
1,071,430
6,666,666
1,394,222
$1.0900
$1.1200
$1.3500
$1.4300
28 Jan 2022
8,077,023
$1.3500
10,812
8 Apr 2022
243,351
$1.2805
312
Balance
30 June 2022
131,936,002
93,122
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not
have a limited amount of authorised capital.
By way of a poll each share shall have one vote at a meeting.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns
for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value-adding relative to
the current Company's share price at the time of the investment. The Group is actively pursuing additional investments in the short
term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
48
48
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 21. Reserves
Foreign currency translation reserve
Share-based payments reserve
2022
$'000
(3,027)
920
(2,107)
2021
$'000
(174)
236
62
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations
to Australian Dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.
Share-based payments reserve
The share-based payments reserve is used to recognise the value of equity benefits provided to employees as part of their
remuneration. Share-based payments reserve is transferred to share capital upon exercising of options and is transferred to
retained earnings upon lapsing or forfeiture of options.
Note 22. Dividends
Dividends paid during the financial year were as follows:
Final dividend
Interim dividend
5,715
3,950
9,665
-
3,425
3,425
Refer to note 20 for details of shares issued pursuant to the Company's Dividend Reinvestment Plan during the 2022 financial year.
At the date of signing these financial statements, the Company has declared a fully franked final dividend of 1.50 cents per share
with a record date of 12 September 2022 and a payment date of 7 October 2022. The total dividend payable is $1,979,000. The
financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2022 and
will be recognised in subsequent financial reports.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
19,364
20,651
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits
or debits that will arise from the payment or refund of the amount of the provision for income tax or income tax refundable at the
reporting date.
48
49
49
Notes to the financial statements 30 June 2022
2022
$'000
9,569
20,904
684
487
(299)
-
(2,041)
(12,100)
(12,448)
(424)
10,332
(837)
(4,139)
2,149
2021
$'000
20,540
14,278
181
156
(70)
(596)
(1,225)
(15,755)
(11,009)
(1,005)
15,304
504
237
1,126
11,837
22,666
78,408
34,692
32,109
15,829
(697)
24,693
22,405
3,139
28,625
(454)
160,341
78,408
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 23. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities:
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Impairment of receivables
Net loss/(gain) on disposal of property, plant and equipment
Gain on bargain purchase
Foreign exchange differences
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Increase/(decrease) in current tax liability
Decrease/(increase) in deferred tax liabilities/assets
Net cash from operating activities
Liabilities from financing activities: Borrowings and Lease liabilities
Balance at the start of the year
Net cash flows
New lease liabilities
Lease liabilities assumed as part of acquisition (note 30)
Foreign exchange differences
Balance at the end of the year
Non-cash investing and financing activities disclosed in other notes are:
• Acquisition of right-of-use assets (note 14)
•
• Dividends satisfied by the issue of shares under the DRP (note 20)
Shares issued as consideration in acquisitions (note 30)
50
50
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24. Share-based payments
Employee Equity Plan (“EEP”)
The Company adopted an employee equity plan on 3 November 2021. The details of the EEP are summarised as follows:
Under the Plan, eligible employees or contractors of a group company, directors (including non-executive directors) and other
persons who are declared by the Board to be eligible to receive awards and who otherwise meet the criteria of an eligible participant
under ASIC Class Order 14/1000 may be offered rights, options, exempt share awards, salary sacrifice share awards and
performance share awards.
Participation in the EEP is at the Board’s discretion and no individual has a contractual right to participate in it or to receive any
guaranteed benefits.
Rights, options and performance share awards are non-transferable.
Rights and/or options may only be exercised if:
•
•
the rights and/or options vest in accordance with the applicable performance conditions; and
the exercise conditions (if any) have been met.
Any right or option that has not vested may not be exercised, unless (subject to applicable laws) the Board exercises its absolute
discretion, in circumstances where the Board considers it to be in the best interests of the Company to:
•
•
vary or waive the relevant performance conditions and/or exercise conditions, and declare the rights and/or options to
have vested; or
bring forward the date upon which rights and/or options may be exercised.
Performance share awards may only vest in accordance with the applicable performance conditions (if any), unless (subject to
applicable laws) the Board exercises its absolute discretion, in circumstances where it considers it to be in the best interests of the
Company, to:
•
•
vary or waive the relevant performance conditions, and declare the performance share awards to have vested; or
bring forward the date upon which the performance share awards may vest.
If instructed to do so in writing by the Board, each participant will take all necessary actions and enter into all necessary
documentation to give effect to the re designation of a performance share award that has vested to be a share.
An invitation may only be made under the EEP if the number of shares that may be acquired on exercise of the awards to which
the invitation relates, when aggregated with:
•
•
the number of shares which could be issued if each outstanding invitation or award under the EEP or any other employee
equity incentive scheme of the Company (covered by the Class Order or an individual instrument made by ASIC in terms
similar to the Class Order) was accepted or exercised; and
the number of shares issued during the previous three years pursuant to the EEP or any other employee equity incentive
scheme of the Company (covered by the Class Order or an individual instrument made by ASIC in terms similar to the Class
Order),
but disregarding any invitation given, award acquired or share issued by way of or as a result of:
•
•
•
an offer to a person situated outside of Australia at the time of receipt of the offer;
an offer which did not require disclosure to investors under the Corporations Act; or
an offer made under a disclosure document (within the meaning of the Corporations Act),
does not exceed 5% of the total number of issued shares at the time the invitation was made.
A right or an option may only be exercised if at the time of exercise:
•
•
•
The right or option has become vested under the EEP;
The right or option has not lapsed or been forfeited under the EEP; and
The exercise price (if any) has been paid to the Company in such manner approved by the Board
50
51
51
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24. Share-based payments (continued)
Any right, option or performance share held by a participant will not give any right to the participant:
•
•
to receive any dividends declared by the Company; or
to receive notice of, or to vote or attend at, a meeting of the shareholders of the Company,
until the participant's shares are issued or transferred (as the case requires) to, and registered in the name of, the participant before
the record date for determining entitlements to the dividend or the date of the meeting of shareholders (as the case may be).
The Company may grant share awards for no consideration or at a purchase price that is a discount to the then market value of
shares, with the intention that up to $1,000 (or such other amount that is exempted from tax under the Income Tax Assessment
Act 1997 (Cth) as applicable and amended from time-to-time) of the total value or discount received by each participant will be
exempt from tax. The Company must offer the share awards on a non-discriminatory basis in accordance with Division 83A of the
Income Tax Assessment Act 1997 (Cth) as amended from time-to-time.
Share awards may be offered under a salary sacrifice arrangement in accordance with the terms of the invitation.
Any participant’s share may be subject to a holding lock of up to a maximum of 10 years from the grant date at the Board’s absolute
discretion. The Board may remove the holding lock applying to a participant’s shares at its discretion.
Rights and options will lapse, and performance share awards will be forfeited, if those awards have not vested (and have not
otherwise been forfeited) by the last date on which awards are able to vest as specified under the invitation to a participant.
The Board may waive any vesting conditions where a participant ceases to be employed by the Company or its related bodies
corporate as the result of a qualifying event, being either death, serious injury or illness that prohibits continued employment,
retirement, retrenchment, or such other circumstances that result in a participant leaving the employment of the Company or its
related bodies corporate and that the Board determines (in its absolute discretion) is a qualifying event.
Rights, options and performance share awards will be forfeited where:
•
•
the Board determines in its absolute discretion that a participant has acted fraudulently or dishonestly, or is in material
breach of his or her obligations to the Company or its related bodies corporate; or
a participant ceases to be employed by the Company or its related bodies corporate other than as a result of a qualifying
event, whether or not those awards have vested.
Rights and options that have vested and that have not been exercised will lapse on the date specified on the invitation to a
participant as the last date on which awards are able to be exercised unless those awards have otherwise been forfeited or unless
that date has been extended.
Each participant’s shares issued under an award granted pursuant to the EEP will rank equally in all respects with all existing shares
from the date of issue. A participant will have a vested and indefeasible entitlement to any dividends declared and distributed by
the Company on participant’s shares that, at the books closing date for determining entitlement to those dividends, are standing
to the account of the participant. A participant may exercise any voting rights attaching to a participant’s shares registered in the
participant’s name or, in the case of exempt share awards or salary sacrifice share awards, registered in the name of a trustee, once
those share awards are allocated to the participant.
A participant has the right to participate in rights issues and bonus issues by the Company:
•
•
in relation to a participant’s shares that are registered in the participant’s name; or
in the case of exempt share awards or salary sacrifice share awards, that are registered in the name of a trustee, once
those share awards are allocated.
The EEP may be suspended or terminated at any time by resolution of the Board. Suspension or termination of the EEP will not
prejudice the accrued rights of participants.
The Board will:
•
•
reduce the exercise price of rights and/or options (if any) in the event of a new issue; and/or
change the number of underlying shares to which awards relate in the event of a bonus issue, in accordance with the ASX
Listing Rules.
52
52
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24. Share-based payments (continued)
In the event of a reorganisation of the Company’s share capital, the Board will review and modify the terms of the awards if required
by, and in accordance with, the ASX Listing Rules.
Subject to the ASX Listing Rules and the law, the Board may at any time by resolution amend or add to the rules of the EEP. However,
no amendment to the rules may be made which materially reduces the rights of participants in respect of Awards which they have
accepted prior to the amendment (except for certain changes, including changes for the purpose of complying with laws or the ASX
Listing Rules).
Employee Share Option Plan (“ESOP”)
The Company adopted an employee share option plan on 6 November 2017. The details of the ESOP are summarised as follows:
Options may be granted under the ESOP to any person who is, or is proposed to be, a full-time or part-time employee, a non-
executive director, a contractor (40% full-time equivalent (“FTE”)) or a casual employee (40% FTE) of the Company or any of its
associated bodies corporate, and whom the Board determines to be an eligible person for the purposes of participation in the ESOP
(referred to as an 'Eligible Person').
An option may not be granted under the ESOP if, immediately following its grant, the shares to be received on exercise of the
option, when aggregated with the number of shares which would be issued if each unvested option granted under the ESOP or any
other employee incentive scheme of the Company were to vest and be exercised and the number of shares issued in the previous
3 years under the ESOP or any other employee incentive scheme of the Company, exceeds 5% of the total number of issued shares
at the time of grant (or any varied limit if permitted under the Corporations Act 2001, ASX Listing Rules and ASIC
instruments). Certain offers of options may be excluded from calculation as permitted under Class Order 14/1000, including
excluded offers under section 708 of the Corporations Act 2001 and offers under a disclosure document.
Each option entitles the participant to subscribe for one ordinary share in the Company.
The specific terms relevant to the grant of options are set out in an offer from the Company to the Eligible Person which contains
details of the application price (if any) (which must not be for more than nominal consideration), the expiry date, the exercise price,
the vesting date, any applicable performance conditions and other specific terms relevant to those options.
Unless otherwise specified in the offer of an option, if a “Change of Control Event” occurs before the vesting date of an option, that
option immediately vests and ceases to be subject to any performance condition to which it was subject. A Change of Control Event
means the occurrence of one or more of the following events:
•
•
•
•
a person who has offered to acquire all shares in the Company acquires Control (as defined in section 50AA of the
Corporations Act 2001) of the Company;
any other event occurs which causes a change in Control of the Company;
unless the Board determines otherwise, a takeover bid is recommended by the Board or a scheme of arrangement which
would have a similar effect to a full takeover bid is announced by the Company; and
any other event which the Board reasonably considers should be regarded as a Change of Control Event.
Options may only be transferred:
•
•
to a legal personal representative on the death of the participant or to the participant’s trustee in bankruptcy on the
bankruptcy of the participant; or
pursuant to an off-market takeover bid, in various compulsory acquisition scenarios under Chapter 6A of the Corporations
Act 2001, under a creditor’s scheme of arrangement under section 411 of the Corporations Act 2001 or if approved by the
Board.
An option does not confer any rights to participate in a new issue of shares by the Company.
If the Company conducts a rights issue, the exercise price of options will be adjusted in accordance with the adjustment formula
for pro rata issues set out in the Listing Rules.
52
53
53
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24. Share-based payments (continued)
If the Company makes a bonus issue of securities to holders of shares, the rights of a holder in respect of an unexercised option will
be modified such that the participant will receive, upon exercise of an option, one Share plus such additional securities which the
participant would have received had the participant exercised the option immediately before the record date for that bonus issue
and participated in the bonus issue as the holder of the share.
If the Company’s issued capital is reorganised (including consolidation, subdivision, reduction, or return), then the number of
options, the exercise price or both or any other terms will be reorganised in a manner determined by the Board which complies
with the Listing Rules.
Any shares issued under the ESOP rank equally in all respects with the Shares of the same class on issue, subject to the restrictions
on the transfer of shares.
Shares issued on exercise of options are not transferable for the period (if any) specified in the offer from the Company to the
Eligible Person.
An unvested option lapses upon the first to occur of the following:
•
•
•
•
•
•
its expiry date;
any applicable performance condition not being satisfied prior to the end of any prescribed performance period;
a transfer or purported transfer of the option in breach of the rules;
30 days following the day the participant ceases to be employed or engaged by the Company or an associated body
corporate by resigning voluntarily and not recommencing employment with the Company or an associated body corporate
before the expiration of that 30 days;
30 days following the day the participant ceases to be employed or engaged by the Company or an associated body
corporate by reason of his or her death, disability, bona fide redundancy, or any other reason with the approval of the
Board and the participant has not recommenced employment with the Company or an associated body corporate before
the expiration of those 30 days, however the Board has a discretion to deem all or any of the options to have vested; or
termination of the participant’s employment or engagement with the Company or an associated body corporate on the
basis the participant acted fraudulently, dishonestly, in breach of the participant’s obligations or otherwise for cause.
A vested but unexercised option lapses upon the first to occur of the following:
•
•
•
its expiry date;
a transfer or purported transfer of the option in breach of the rules; or
termination of the participant’s employment or engagement with the Company or an associated body corporate on
the basis the participant acted fraudulently, dishonestly, in breach of the participant’s obligations or otherwise for
cause.
Subject to the ASX Listing Rules and the law, the Board may at any time by resolution amend or add to the rules of the
ESOP. However, the consent of a participant is required for any change to the rules or option terms which prejudicially affects the
rights of the participant in relation to the option (except for certain changes, including changes to benefit the administration of the
Plan or to comply with laws, ASX Listing Rules or regulations).
Set out below are summaries of options and rights granted:
2022
Grant date
Expiry date
Exercise
price
Balance at
start of year
Granted
Lapsed
Exercised
17/12/2021
24/09/2021
25/02/2021
08/11/2019
30/09/2026
30/09/2025
30/09/2025
07/11/2024
$0.0000
$0.5745
$0.5745
$0.3735
-
-
1,680,000
1,775,000
1,125,802
320,000
-
-
-
(80,000)
-
-
3,455,000
1,445,802
(80,000)
Balance at
end of year
1,125,802
240,000
1,680,000
1,775,000
4,820,802
-
-
-
-
-
54
54
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24. Share-based payments (continued)
2021
Grant date
Expiry date
Exercise
price
Balance at
start of year
Granted
Lapsed
Exercised
25/02/2021
08/11/2019
30/09/2025
07/11/2024
$0.5745
$0.3735
-
1,845,000
1,680,000
-
-
(70,000)
At 30 June 2022, nil rights and options were exercisable (2021: nil).
1,845,000
1,680,000
(70,000)
Balance at
end of year
-
-
-
1,680,000
1,775,000
3,455,000
The weighted average remaining contractual life of rights and options outstanding at the end of the financial year was 3.12 years
(2021: 3.74 years). Options lapsed during the reporting period as the performance conditions were not met.
The performance conditions for the rights granted on 17 December 2021 were as follows:
1. Total shareholder return (“TSR”) condition – the Compound Annual Growth Rate (“CAGR”) in the Company’s Total
Shareholder Return will be tested on the Vesting Date and the Rights will vest in accordance with the following TSR
CAGR hurdles:
TSR CAGR
Less than 7%
At least 7% but less than 10% p.a.
At least 10% but less than 15% p.a.
At least 15% p.a.
% of Rights to vest
0%
50%
70% to 100% on a straight-line basis
100%
•
•
TSR CAGR means the TSR compound annual growth rate as against the Base VWAP.
TSR means the total shareholder return to a shareholder of the Company, inclusive of Share Price Appreciation, capital
returns and dividends.
Share Price Appreciation means the difference between the Base VWAP and Vesting VWAP.
•
• Base VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined in the
Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2021 financial
report. The 2021 financial report was released on 31 August 2021 and the Base VWAP has been calculated at $1.25.
• Vesting VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined in
the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2024 financial
report, expected to be on or about 30 August 2024.
2. Service condition – continuous employment of the employee with NTAW or one of its subsidiaries from the Grant Date
until the Vesting Date.
54
55
55
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24. Share-based payments (continued)
The performance conditions for the options granted on 25 February 2021 and 24 September 2021 were as follows:
1. Earnings per share (“EPS”) condition – the Company’s earnings per share for the year ended 30 June 2021 is at least 10%
higher than its EPS for the year ended 30 June 2020 or if this is not achieved, the Company’s EPS for the year ended 30
June 2022 is at least 10% higher than its EPS for the year ended 30 June 2020.
Calculation of the EPS growth rate is based upon the EPS results reported in NTAW’s financial statements for the above
years.
The base EPS for the year ended 30 June 2020 will be 5.51 cents per share. This is based upon the Company’s 2020 net
profit after providing for income tax and non-controlling interests and excluding amortisation (NPATA) attributable to
Shareholders of $5.665 million. The target EPS based on NPATA attributable to Shareholders for the 2021 year or if this is
not achieved, the 2022 year is, therefore, 6.06 cents per share.
The EPS results to be used for the 2021 and 2022 years will be based upon the Company’s audited financial statements
for that year. However, the EPS may be adjusted for items which the Board, in its discretion, considers should be included
in, or excluded from, this result. The EPS condition will be measured over two years if required to allow for uncertainty
regarding the ongoing impact of COVID-19 on execution of the Company’s growth strategies and the timing of synergies
to be realised from the acquisition of Tyres4U in August 2020.
2. Service condition – continuous employment of the employee with NTAW or one of its subsidiaries from the Grant Date
until the Vesting Date.
The performance conditions for the options granted on 8 November 2019 were as follows:
1. Earnings per share condition – Company’s EPS for the year ended 30 June 2021 was to be at least 10% higher than its EPS
for the year ended 30 June 2019.
Calculation of the EPS growth rate is based upon the EPS results reported in NTAW’s audited financial statements for the
above years. The Basic EPS reported may be adjusted for items which the Board, in its discretion, considers should be
included in, or excluded from, the result.
The Board determined that the FY2019 base EPS for the Options would be 7.74 cents per share. This was based upon the
Company’s 2019 NPATA attributable to NTAW shareholders. The target EPS for the 2021 financial year (based upon the
Company’s NPATA attributable to NTAW shareholders) is 8.51 cents per share.
2. Service condition – continuous employment of the employee with NTAW or one of its subsidiaries from the Grant Date
until the Vesting Date.
Valuation model inputs
For the rights and options granted during FY2022 and FY2021, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
Volatility1
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
17/12/2021
24/09/2021
25/02/2021
30/09/2026
30/09/2025
30/09/2025
$1.4300
$1.1200
$0.8900
$0.0000
$0.5745
$0.5745
56.90%
58.10%
61.60%
5.59%
7.14%
5.67%
1.00%
0.02%
0.12%
$1.2236
$0.5635
$0.4280
1 The expected volatility is based on the historic volatility (based on the period from the date the Company listed on the ASX to the relevant grant date), adjusted for any expected
changes to future volatility due to publicly available information.
56
56
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 24 Share based payments (continued)
Expenses recognised from share-based payment transactions
The expense recognised in relation to the share-based payment transactions was recognised within employee benefit expense
within the statement of profit or loss as follows:
Rights issued under the Employee Equity Plan and
Options issued under the Employee Share Option Plan
Total expense recognised from share-based payment transactions
Note 25. Earnings per share
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of National Tyre & Wheel Limited
2022
$'000
684
684
9,569
(171)
9,398
2021
$'000
181
181
20,540
(285)
20,255
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
122,775,176
113,173,063
4,071,326
2,185,780
Weighted average number of ordinary shares used in calculating diluted earnings per share
126,846,502
115,358,843
Basic earnings per share
Diluted earnings per share
Note 26. Key management personnel disclosures
Cents
7.65
7.41
Cents
17.90
17.56
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
2021
$
2022
$
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
1,638,236
117,781
61,674
210,231
3,524,145
168,024
58,245
91,434
2,027,922
3,841,848
56
57
57
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 27. Related party transactions
Parent entity
National Tyre & Wheel Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report included in the directors'
report.
Transactions with related parties
During the reporting period, the Group leased business premises owned by a closely related party of an employee previously
classified as a KMP member. The lease expires on 30 May 2023 and has two 5-year renewal options. Rent payments for FY2022
totalled $179,335 (2021: $176,694), with $nil outstanding at 30 June 2022 (2021: $nil).
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
At 30 June 2022, there was an unsecured loan receivable from an employee classified as a member of KMP of $82,032 (2021:
$82,032).
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates except for the loan detailed above
which is an interest-free loan.
Note 28. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial
instruments such as forward foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for
hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives (“finance”) under policies approved by the Board of Directors. These
policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance reports to the Board on a
monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow
forecasting.
58
58
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 28. Financial instruments (continued)
In order to protect against exchange rate movements, the Group has entered into forward foreign exchange contracts. These
contracts are hedging highly probable forecasted cash flows for the ensuing financial year. Most of the Group’s transactions are
carried out in AUD. Exposures to currency exchange rates arise from the Group’s overseas purchases, which are primarily
denominated in US Dollars (“USD”). To mitigate the Group’s exposure to foreign currency risk, non-AUD cash flows are monitored,
and forward exchange contracts are entered into in accordance with the Group’s risk management policies. The usual length of
forward contracts entered into are short term and cover known USD exposures. Where the amounts to be paid and received in a
specific currency are expected to largely offset one another, no further hedging activity is undertaken.
At 30 June 2022, the Group had forward foreign exchange contracts to acquire USD $19,141,000 (2021: USD $19,698,000). These
are due to mature within 5 months of balance date. The fixed exchange rates on these contracts ranged from 0.6891 to 0.7718
(2021: 0.7463 to 0.7854).
The Group's exposure to foreign currency risk at the end of the reporting period, expressed in AUD, was as follows:
Cash
Trade payables
Buy foreign currency (held for trading)
2022
$’000
237
(25,324)
1,336
2021
$’000
374
(31,440)
587
(23,751)
(30,479)
2022
USD
2021
USD
AUD strengthened
Effect on
profit before
tax
% change
Effect on
equity
% change
AUD weakened
Effect on
profit before
tax
Effect on
equity
10%
2,159
1,511
10%
(2,639)
(1,847)
AUD strengthened
Effect on
profit before
tax
% change
Effect on
equity
% change
AUD weakened
Effect on
profit before
tax
Effect on
equity
10%
2,771
1,940
10%
(3,387)
(2,371)
The percentage change is the expected overall volatility of the significant currencies, which is based on management's assessment
of reasonable possible fluctuations. The actual foreign exchange loss for the year ended 30 June 2022 was $1,455,000 (2021: gain
of $848,000).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the Group to
interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
58
59
59
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 28. Financial instruments (continued)
As at the reporting date, the Group had the following variable rate borrowings outstanding:
Bank overdraft
Bank facility
Net exposure to cash flow interest rate risk
2022
$'000
3,050
93,325
2021
$'000
454
44,440
96,375
44,894
An analysis by remaining contractual maturities in shown in 'liquidity risk below.
The outstanding bank facility at 30 June 2022, totalling $93,325,000, is comprised of a trade finance facility ($64,075,000) and a
loan ($29,250,000) (2021: $44,440,000 bank facility). An official increase/decrease in interest rates of 100 (2021: 50) basis points
would have an adverse/favourable effect on profit before tax of $933,000 (2021: $222,000) per annum. The percentage change is
based on the expected volatility of interest rates using market data and analysts’ forecasts. Minimum principal repayments of
$4,500,000 (2021: $2,500,000) are due during the subsequent 12-month period, although in accordance with the facility
agreement, the trade finance facility limit will be increased equal to the value of the principal repayments made.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate
credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the
reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the
use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all
customers of the Group based on recent sales experience, historical collection rates and forward-looking information that is
available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a
period greater than 1 year.
Cash and cash equivalents are held with Commonwealth Bank of Australia, ASB Bank (New Zealand) and Nedbank Limited (South
Africa), all of which has a short-term Standard & Poor’s credit rating of A-1+.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft
Bank facility
Bank guarantee
464
9,282
1,695
5,000
11,056
-
11,441
16,056
60
60
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 28. Financial instruments (continued)
The bank overdraft facility trade finance facility may be drawn at any time and terminates on 28 October 2024. The bank guarantee
facilities may be drawn at any time and have a weighted average maturity of 4.26 years (2021: 2.62 years).
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities
are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and
therefore these totals may differ from their carrying amount in the Statement of financial position.
2022
$'000
$'000
$'000
$'000
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
Non-derivatives
Non-interest bearing
Trade and other payables
Deferred consideration
Interest-bearing - variable
Bank overdraft
Bank facility
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
103,466
2,600
3,050
4,500
-
2,600
-
4,500
-
-
-
84,325
18,819
132,435
15,999
23,099
28,793
113,118
11,273
11,273
74,884
279,925
Derivatives
Forward foreign exchange contracts net
settled
Total derivatives
1,336
1,336
-
-
-
-
2021
$'000
$'000
$'000
$'000
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Bank overdraft
Bank facility
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Derivatives
Forward foreign exchange contracts net
settled
Total derivatives
82,335
-
-
454
2,500
10,386
95,675
587
587
-
2,500
8,502
11,002
-
-
-
39,777
14,369
54,146
-
-
Remaining
contractual
maturities
$'000
-
-
-
-
103,466
5,200
3,050
93,325
-
-
-
-
-
1,336
1,336
Remaining
contractual
maturities
$'000
82,335
454
44,777
2,956
2,956
36,213
163,779
-
-
587
587
60
61
61
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 29. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three-level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being:
•
•
•
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
2022
Forward foreign exchange contracts - derivatives
Total assets
2021
Forward foreign exchange contracts - derivatives
Total assets
There were no transfers between levels during the financial year.
Level 1
$'000
-
-
Level 1
$'000
-
-
Level 2
$'000
1,336
1,336
Level 2
$'000
587
587
Level 3
$'000
-
-
Level 3
$'000
-
-
Total
$'000
1,336
1,336
Total
$'000
587
587
The carrying amounts of cash, trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature. The carrying amounts of borrowings and lease liabilities are assumed to approximate their
fair values given they were entered into at market rates.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Derivative financial instruments have been valued using third party quoted rates, adjusted as appropriate. This valuation technique
maximises the use of observable market data where it is available and relies as little as possible on entity specific estimates.
Note 30. Business combinations
2022
Black Rubber
On 2 November 2021, the Group acquired 100% of the issued capital of Black Rubber Pty Ltd and Black Rubber Sydney Pty Ltd
(collectively, “Black Rubber”). Total consideration for the acquisition was $27,928,000, including $21,377,000 in cash consideration,
$5,351,000 in deferred consideration and $1,200,000 in Company shares, issued at time of the acquisition. The acquired business
has contributed revenue of $32,491,000 and profit before tax of $3,099,000 to the Group from the date of acquisition to 30 June
2022. If the acquisition occurred on 1 July 2021, the full year contribution would have been revenue of $46,445,000 and profit
before tax of $4,454,000. Transaction costs of $263,000 were incurred during the year in relation to the acquisition. These costs
are included in Professional fees expenditure in the Statement of profit or loss and other comprehensive income. To assist with this
acquisition and the acquisition of Carter’s (refer below), the Company renegotiated its debt facilities with Commonwealth Bank of
Australia increasing the total debt facility to $116,500,000. The assets and liabilities assumed in the above business combination
have been accounted for on a provisional basis at year end.
62
62
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 30. Business combinations (continued)
Carter’s
On 7 January 2022, the Group acquired 100% of the issued capital of Carters Tyre Service Limited, C.O. Tire & Retreading Co Limited
and Tyre Distributor New Zealand Limited (collectively, “Carter’s”). Total consideration for the acquisition was $30,602,000,
including $28,717,000 in cash consideration and $1,886,000 in Company shares, issued at time of the acquisition. The acquired
business has contributed revenue of $34,405,000 and profit before tax of $1,939,000 to the Group from the date of acquisition to
30 June 2022. If the acquisition occurred on 1 July 2021, the full year contribution would have been revenue of $72,413,000 and
profit before tax of $3,755,000. Transaction costs of $416,000 were incurred during the year in relation to the acquisition. These
costs are included in Professional fees expenditure in the Statement of profit or loss and other comprehensive income. To assist
with this acquisition and the acquisition of Black Rubber (refer above), the Company renegotiated its debt facilities with
Commonwealth Bank of Australia increasing the total debt facility to $116,500,000. The assets and liabilities assumed in the above
business combination have been accounted for on a provisional basis at year end.
Details of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Property, plant & equipment
Right-of-use assets
Customer relationships
Brand names
Accreditations
Trade and other payables
Current tax liabilities
Lease liabilities
Provisions
Deferred tax liability
Net assets acquired
Goodwill
Black Rubber
Fair value
$'000
Carter’s
Fair value
$'000
1,847
6,329
5,921
442
3,216
4,759
9,800
2,400
200
(3,993)
(1,341)
(4,592)
(600)
(4,140)
20,248.
7,680)
872
9,103
7,438
16
2,969
11,087
3,017
3,677
-
(6,659)
(463)
(11,237)
(1,229)
(1,557)
17,034.
13,569
Acquisition-date fair value of total consideration
27,928
30,603
Representing:
Cash paid
Deferred consideration
Shares issued (note 20)
Total consideration
Cash used to acquire business; net of cash acquired:
Total consideration
Less: cash and cash equivalents acquired
Less: deferred consideration
Less: shares issued
Net cash used
21,377
5,351
1,200
28,720
-
1,882
27,928
30,602
27,928
(1,847)
(5,351)
(1,200)
30,602
(872)
-
(1,882)
19,530
27,848
62
63
63
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 30. Business combinations (continued)
On 30 November 2021, the Group acquired certain assets (inventories of $307,000 and plant and equipment of $40,000) and the
workforce from Alacad Pty Ltd t/a Access Alloys. Total consideration for the acquisition was $1,121,000, paid in cash. The acquired
assets have been incorporated in Dynamic Wheel Co. Goodwill of $774,000 has been recognised in relation to the acquisition.
2021
On 4 August 2020, the Group acquired 100% of the business assets and operations of Tyres4U in Australia and New Zealand. The
primary reason for the acquisition was to continue the Group’s strategic objective of diversification and seeking scale through
acquisitions. Total consideration for the acquisition was $48,678,000, including $43,820,000 in cash consideration and $4,858,000
in Company shares, issued at time of the acquisition. The business assets were acquired by newly incorporated subsidiaries, Tyres4U
Pty Ltd and Tyres4U (NZ) Ltd. The acquired business has contributed revenue of $264,581,000 and profit before tax of $8,686,000
to the Group from the date of acquisition to 30 June 2021. If the acquisition occurred on 1 July 2020, the full year contribution
would have been revenue of $289,286,000 and profit before tax of $8,551,000. The acquisition resulted in a gain on bargain
purchase being recognised as the vendors accepted the purchase consideration less than the fair value of the business assets.
Transaction costs of $1,449,000 were incurred during FY2021 in relation to the acquisition. These costs are included in Professional
fees and insurance expenditure in the Statement of profit or loss and other comprehensive income. To assist with the acquisition,
the Company renegotiated its debt facilities with Commonwealth Bank of Australia increasing the total debt facility to $68,500,000
at the time of the acquisition.
Details of the acquisition are as follows:
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other assets
Property, plant & equipment
Right-of-use assets
Deferred tax asset
Trade and other payables
Lease liabilities
Provisions
Net assets acquired
Gain on bargain purchase
Acquisition-date fair value of total consideration
Representing:
Cash paid
Shares issued (note 20)
Total consideration
Cash used to acquire business; net of cash acquired:
Total consideration
Less: cash and cash equivalents acquired
Less: shares issued
Net cash used
64
64
Fair value
$'000
7,324
32,658
48,529
33
1,659
6,660
28,307
2,302
(42,103)
(28,625)
(7,470)
49,274.
(596)
48,678
43,820
4,858
48,678
48,678
(7,324)
(4,858)
36,496
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 31. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Pitcher Partners, the auditor of the
Company, and its network firms:
Audit services - Pitcher Partners
Audit or review of the financial statements
Other services - Pitcher Partners
Transaction services
Tax compliance services
IT consulting services
Audit services - network firms
Audit or review of the financial statements
Other services - network firms
Transaction services
Tax compliance services
2022
$
2021
$
369,035
335,000
100,250
58,785
-
270,668
71,540
3,600
159,035
345,808
528,070
680,808
16,323
12,284
116,723
50,436
-
32,499
167,159
32.499
183,482
44,783
Note 32. Contingent liabilities
The Group has given bank guarantees as at 30 June 2022 of $9,269,000 (2021: $7,692,000) to various landlords and suppliers for
standby letters of credit.
64
65
65
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 33. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with
the accounting policy described in note 2:
Name
Exclusive Tyres Distributors Pty Ltd
Dynamic Wheel Co. Pty Limited
Integrated OE Pty Ltd
Statewide Tyre Distribution Pty Ltd
Tyres4U Pty Ltd
Tyreright Operations Pty Ltd
NTAW Logistics Pty Ltd
Black Rubber Pty Ltd
Black Rubber Sydney Pty Ltd
NTAW Holdings (NZ) Ltd
Exclusive Tyres Distributors (NZ) Limited
Tyres4U (NZ) Ltd
Carters Tyre Service Limited
C.O. Tire & Retreading Co Limited
Tyre Distributors New Zealand Limited
Top Draw Tyres Proprietary Limited
Note 34. Parent entity information
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
South Africa
Ownership interest
2022
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
2021
%
100%
100%
100%
100%
100%
100%
-
-
-
100%
100%
100%
-
-
-
50%
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Retained earnings
Total equity
66
66
Parent Entity_.___.
2021
$’000
2022
$’000
8,372
8,372
40,962
40,962
5,372
2,223
199,527
126,697
11,116
92,443
93,122
920
7,298
101,340
3,156
47,665
70,204
236
8,592
79,032
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 34. Parent entity information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had a deed of cross guarantee in place in relation to certain subsidiaries at 30 June 2022 and 30 June 2021. Refer
to note 35.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
•
•
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
indicator of an impairment of the investment.
Note 35. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
Exclusive Tyres Distributors Pty Ltd;
Exclusive Tyres Distributors (NZ) Limited;
• National Tyre & Wheel Limited;
•
•
• Dynamic Wheel Co. Pty Limited;
•
•
•
•
• NTAW Logistics Pty Ltd (not party to the deed in the prior year);
• Black Rubber Pty Ltd (not party to the deed in the prior year); and
• Black Rubber Sydney Pty Ltd (not party to the deed in the prior year).
Integrated OE Pty Ltd;
Statewide Tyre Distribution Pty Ltd;
Tyres4U Pty Ltd;
Tyreright Operations Pty Ltd (not party to the deed in the prior year);
By entering into the deed, the Australian wholly owned entities have been relieved from the requirement to prepare financial
statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties
to the deed of cross guarantee that are controlled by National Tyre & Wheel Limited, they also represent the 'Extended Closed
Group'.
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67
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 35. Deed of cross guarantee (continued)
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position of
the 'Closed Group'.
Statement of profit or loss and other comprehensive income
Revenue
Other income
Gain on bargain purchase
Cost of goods sold
Employee benefits and other related costs
Depreciation and amortisation
Occupancy
Computer and software costs
Motor vehicle costs
Marketing
Insurance
Professional fees and acquisition costs
Other
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
Other comprehensive income
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Equity – retained earnings
Retained earnings at the beginning of the financial year
Profit after income tax expense
Dividends paid
Opening retained earnings of entities joining the Closed Group
Closed Group_____
2021
$'000
2022
$'000
458,911
714
-
(329,890)
(65,045)
(16,966)
(8,245)
(6,500)
(4,132)
(3,194)
(3,161)
(2,742)
(9,957)
(3,769)
404,035
3,911
596
(284,942)
(49,372)
(11,743)
(6,477)
(3,428)
(2,971)
(4,980)
(2,535)
(3,353)
(5,638)
(2,446)
6,024
30,657
(2,634)
(8,564)
3,390
22,093
(194)
(194)
3,196
21,405
3,390
(9,665)
(1,565)
(49)
(49)
22,044
78
22,093
(3,425)
2,659
Retained earnings at the end of the financial year
13,565
21,405
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68
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2022
Note 35. Deed of cross guarantee (continued)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Prepayments
Current tax asset
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other financial assets
Deferred tax
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Current tax liability
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Deferred tax
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Closed Group_____
2021
$'000
2022
$'000
26,071
83,492
100,268
1,287
3,373
1,731
216,222
11,477
52,227
34,587
54,633
-
152,924
19,143
60,660
76,243
694
2,940
-
159,680
4,919
28,365
15,698
32,166
2,526
83,764
369,146
243,354
93,634
6,537
11,963
11,471
-
123,605
2,600
88,244
42,481
2,047
2,893
138,265
65,966
2,500
7,981
10,109
835
87,391
-
41,940
20,735
1,475
-
64,150
261,870
151,541
107,276
91,813
93,122
589
13,565
107,276
70,204
204
21,405
91,813
Note 36. Events after the reporting period
Apart from the dividend declared as disclosed in note 22, no other matter or circumstance has arisen since 30 June 2022 that has
significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of
affairs in future financial years.
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69
Notes to the financial statements 30 June 2022
Directors’ declaration
National Tyre & Wheel Limited and its controlled entities
Directors' declaration
30 June 2022
In the directors' opinion:
30 June 2022
•
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2022
and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group
will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note 35 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
On behalf of the directors
_______________________
Murray Boyte
Chairman
30 August 2022
Brisbane
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7070
Notes to the financial statements 30 June 2022
Independent Auditor’s Report to the Shareholders of National
Tyre & Wheel Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of National Tyre & Wheel Limited (“the Company”) and its
controlled entities (“the Group”), which comprises the consolidated statement of financial position as
at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, notes to the financial statements including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) “the Code” that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
7070
Brisbane Sydney Newcastle Melbourne Adelaide Perth
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
pitcher.com.au
NIGEL FISCHER
MARK NICHOLSON
PETER CAMENZULI
JASON EVANS
KYLIE LAMPRECHT
NORMAN THURECHT
BRETT HEADRICK
WARWICK FACE
COLE WILKINSON
SIMON CHUN
JEREMY JONES
TOM SPLATT
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JAMES FIELD
DANIEL COLWELL
ROBYN COOPER
FELICITY CRIMSTON
CHERYL MASON
KIERAN WALLIS
MURRAY GRAHAM
ANDREW ROBIN
KAREN LEVINE
Key Audit Matter
How our audit addressed the key audit matter
Our procedures included amongst others:
Understanding and evaluating management’s
processes and controls;
Reading the sale and purchase agreement to
understand key terms and conditions;
Evaluating the assumptions and methodology
used by management in determining the fair
values of net assets acquired;
Comparing the Group’s final fair value
adjustments at 30 June 2022 to the
previously reported values at 31 December
2021, and performing testing on certain fair
value adjustments to confirm that they related
to new information obtained about facts and
circumstances that existed on acquisition
date, therefore were eligible for recognition;
and
Assessing the adequacy of the Group’s
disclosures in respect of business
combinations.
Our procedures included amongst others:
Understanding and evaluating management’s
processes and controls;
Reading the sale and purchase agreement to
understand key terms and conditions;
Evaluating the assumptions and methodology
used by management in determining the fair
values of net assets acquired;
Assessing the adequacy of the Group’s
disclosures in respect of business
combinations.
Acquisition of Black Rubber
Refer to Note 30: Business combinations
During the year the Group acquired 100% of
the issued capital of Black Rubber Pty Ltd and
Black Rubber Sydney Pty Ltd in Australia for
gross purchase consideration of $27.928
million. This was considered a significant
purchase for the Group.
Accounting for this transaction is a complex and
judgemental exercise, requiring management to
determine the fair value of acquired assets
liabilities.
As the purchase consideration exceeded the
acquisition date fair value of net assets
acquired, goodwill of $7.680 million was
recorded.
It is due to the size of the acquisition and the
estimation process involved in accounting for it
that this is a key area of audit focus.
Acquisition of Carters
Refer to Note 30: Business combinations
During the year the Group acquired 100% of
the issued capital of Carters Tyre Service
Limited and C.O. Tire & Retreading Co Limited
in New Zealand for gross purchase
consideration of $30.603 million. This was
considered a significant purchase for the
Group.
Accounting for this transaction is a complex and
judgemental exercise, requiring management to
determine the fair value of acquired assets
liabilities.
As the purchase consideration exceeded the
acquisition date fair value of net assets
acquired, goodwill of $13.569 million was
recorded.
It is due to the size of the acquisition and the
estimation process involved in accounting for it
that this is a key area of audit focus.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
72
Key Audit Matter
How our audit addressed the key audit matter
Impairment of goodwill and separately identifiable intangible assets
Refer to Note 15: Intangibles
As part of business combinations completed
during the current and prior years, the Group
recognised goodwill and other intangible assets
valued at $29.000 million and $24.764 million
respectively.
These intangible assets relate to the acquisition
of various subsidiaries of National Tyre &
Wheel Limited, with these subsidiaries being
the basis of management’s determination of
Cash-Generating Units (“CGU”) in the Group.
The carrying amount of goodwill and the
intangible assets is supported by value-in-use
calculations prepared by management which
are based on budgeted future cash flows, key
estimates and significant judgements such as
the annual growth rates, discount rate and
terminal value growth rate.
This is a key area of audit focus as the value of
the intangible assets is material and the
evaluation of the recoverable amount of these
assets requires significant judgement in
determining the key estimates supporting the
expected future cash flows of the CGUs and
the utilisation of the relevant assets.
Our procedures included amongst others:
Understanding and evaluating management’s
processes and controls;
Assessing management’s determination of
the Group’s CGUs based on our
understanding of the nature of the Group’s
business and the identifiable groups of cash
generating assets;
Comparing the cash flow forecasts used in
the value-in-use calculations to Board
approved budgets for the 2023 financial year
and the Group’s historic actual performance;
Assessing the significant judgements and key
estimates used for the impairment
assessment, in particular, the annual growth
rates, discount rate and terminal value growth
rate;
Checking the mathematical accuracy of the
impairment testing model and agreeing
relevant data to the latest budgets;
Performing sensitivity analysis by varying
significant judgements and key estimates,
including the annual growth rates, discount
rate and terminal value growth rate, for the
CGUs to which goodwill and indefinite useful
life intangible assets relate; and
Assessing the adequacy of the Group’s
disclosures in respect of impairment testing of
goodwill and indefinite useful life intangible
assets.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2022, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, 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.
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Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
74
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 – 19 of the directors’ report for the
year ended 30 June 2022. In our opinion, the Remuneration Report of National Tyre & Wheel Limited,
for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
PITCHER PARTNERS
WARWICK FACE
Partner
Brisbane, Queensland
30 August 2022
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Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Shareholder information
National Tyre & Wheel Limited and its controlled entities
Shareholder information
30 June 2022
The shareholder information set out below was applicable as at 15 August 2022.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
ST Corso Pty Ltd
EM Australia 2021 Pty Ltd (The TWA A/C)
Sandhurst Trustees Ltd (Collins St Value Fund A/C)
J P Morgan Nominees Australia Pty Limited
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP)
Roshan Charles Chelvaratnam
Strategic Value Pty Ltd (Tal Super A/C)
Mr John Peter Ludemann
National Nominees Limited
Citicorp Nominees Pty Limited
SCJ Pty Limited (Jermyn Family A/C)
HSBC Custody Nominees (Australia) Limited
Exldata Pty Ltd
Narlack Pty Ltd (Piperoglou Pension A/C)
Exldata Pty Ltd
G R Hari Trustee Limited & Garry Paul Carter & Robynn Janet Carter
Micpip Nominees Pty Ltd (Micpip Super Fund A/C)
Mrs Christine Lorraine Hummer
Mrs Christine Lorraine Hummer
Mr Christopher John Hummer
30 June 2022
Number
of holders
of ordinary
shares
% of total
shares
issued
315
602
337
648
102
2,004
152
0.1
1.2
2.0
16.5
80.2
100.0
0.0
Ordinary shares
Number held
% of total
shares
issued
26,750,297
10,587,107
9,685,856
5,357,462
3,208,967
3,201,034
3,148,632
2,589,928
2,343,100
2,066,624
2,000,000
1,996,127
1,895,900
1,603,704
1,561,752
1,394,222
1,196,297
1,071,152
1,048,928
1,048,928
83,756,017
20.28
8.02
7.34
4.06
2.43
2.43
2.39
1.96
1.78
1.57
1.52
1.51
1.44
1.22
1.18
1.06
0.91
0.81
0.80
0.80
63.48
Unquoted equity securities
There are 3,695,000 unquoted unissued ordinary shares of National Tyre & Wheel Limited under option at the date of this report.
There are 1,125,802 unquoted rights to unissued ordinary shares of National Tyre & Wheel Limited at the date of this report.
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77
Notes to the financial statements 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Shareholder information
30 June 2022
Substantial holders
Substantial holders in the Company are set out below:
ST Corso Pty Ltd atf the Smith Trading Trust, Terence Smith & Susanne Smith (together Smith
Group)
EM Australia 2021 Pty Ltd (TWA A/C)
Sandhurst Trustees Ltd (Collins St Value Fund A/C)
Anthony Young
Ryan Young
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
By way of a poll each share shall have one vote at a meeting.
There are no other classes of equity securities on issue at the date of this report.
Securities subject to voluntary escrow
Class
Expiry date
Ordinary shares
1 November 2022
Ordinary shares
Number held
26,750,297
10,587,107
9,685,856
8,264,652
6,727,152
% of total
shares
issued
20.28
8.02
7.34
6.26
5.10
Number
of shares
1,071,430
1,071,430
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77
Shareholder information 30 June 2022
National Tyre & Wheel Limited and its controlled entities
Corporate directory
30 June 2022
Directors
Murray Boyte - Chairman
Peter Ludemann - Managing Director and Chief Executive Officer
Terry Smith
Bill Cook
Robert Kent
Company secretaries
Jason Lamb
Hugh McMurchy
Registered office and principal
place of business
Level 2
385 MacArthur Avenue
Hamilton QLD 4007
Telephone: (07) 3212 0950
Facsimile: (07) 3212 0951
Share register
Auditor
Solicitors
Bankers
Computershare Investor Services Pty Limited
Level 4
60 Carrington Street
Sydney NSW 2000
Telephone: 1300 787 272
Pitcher Partners
Level 38
345 Queen Street
Brisbane QLD 4000
Bentleys Legal (NSW)
Level 14
60 Margaret Street
Sydney NSW 2000
Commonwealth Bank of Australia
Ground Floor, Tower 1
201 Sussex Street
Sydney NSW 2000
Stock exchange listing
National Tyre & Wheel Limited shares are listed on the Australian Securities Exchange (ASX
code: NTD)
Website
https://www.ntaw.com.au
Corporate Governance
Statement
The Company’s directors and management are committed to conducting the Group’s business
in an ethical manner and in accordance with the highest standards of corporate governance.
The Company has adopted and substantially complies with the ASX Corporate Governance
Principles and Recommendations (4th Edition) (“Recommendations”) to the extent
appropriate to the size and nature of the Group’s operations.
The Company has prepared a Corporate Governance Statement which sets out the corporate
governance practices that were in operation since listing, identifies any Recommendations
that have not been followed, and provides reasons for not following such Recommendations.
The Company’s Corporate Governance Statement and policies, which is approved at the same
time as the Annual Report, can be found on its website:
https://www.ntaw.com.au/investors-asx-announcements/corporate-governance
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Corporate directory 30 June 2022
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