ANNUAL REPORT
2023
NTAW’s vision is going further
to help our businesses &
customers win
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
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Chairman’s letter
Dear Shareholders
The 2023 financial year has been one of contrasting halves. Your Board is able to report that your
Company achieved a full year operating net profit after tax and before amortisation of $8.0 million
for the 2023 financial year (2022: $15.5 million), with $6.6 million being generated in the second half
Dear Shareholders
of the year.
The 2023 financial year has been one of contrasting halves. Your Board is able to report that your Company achieved a
Your Company entered the 2023 financial year in difficult economic circumstances including
full year operating net profit after tax and before amortisation of $8.0 million for the 2023 financial year (2022: $15.5
substantial increases in cost of goods and freight, as well as a disorderly supply chain environment.
million), with $6.6 million being generated in the second half of the year.
These factors transitioned to a positive reversal during the year, with lower supplier prices, lower
international freight costs and a less erratic supply chain. This, combined with initiatives undertaken
Your Company entered the 2023 financial year in difficult economic circumstances including substantial increases in
by management, resulted in the improved earnings in the second half of the financial year.
cost of goods and freight, as well as a disorderly supply chain environment. These factors transitioned to a positive
reversal during the year, with lower supplier prices, lower international freight costs and a less erratic supply chain.
Your Company restructured its Australian commercial truck and bus fleet tyre business with the
This, combined with initiatives undertaken by management, resulted in the improved earnings in the second half of
Tyreright network (comprising company owned and licensee stores) and the Black Rubber business
the financial year.
partnering to become the primary supplier of new and retreaded tyres, as well as tyre management
Your Company restructured its Australian commercial truck and bus fleet tyre business with the Tyreright network
services, to the Group’s commercial truck and bus fleet customers. Black Rubber’s partnership with
(comprising company owned and licensee stores) and the Black Rubber business partnering to become the primary
Michelin to establish new commercial retail service centres is another important element of our
supplier of new and retreaded tyres, as well as tyre management services, to the Group’s commercial truck and
pursuit of growth in this sector.
bus fleet customers. Black Rubber’s partnership with Michelin to establish new commercial retail service centres is
another important element of our pursuit of growth in this sector.
As the largest independent tyre and wheel importer and wholesale distributor in Australia and New
Zealand, your Company understands that success depends on providing an industry leading
As the largest independent tyre and wheel importer and wholesale distributor in Australia and New Zealand, your
customer experience and to that end, is constantly developing its market offering through significant
Company understands that success depends on providing an industry leading customer experience and to that end,
advancement of its systems, facilities and human resources.
is constantly developing its market offering through significant advancement of its systems, facilities and human
resources.
To preserve cash to invest in working capital requirements, reduce debt levels and fund necessary
projects, no dividend was declared for the 2023 financial year. Dividends in the 2024 financial year
To preserve cash to invest in working capital requirements, reduce debt levels and fund necessary projects, no
dividend was declared for the 2023 financial year. Dividends in the 2024 financial year will depend on profits
will depend on profits generated in the year.
generated in the year.
Your Company’s balance sheet is strong with a net debt position of $60.2 million at 30 June 2023 and
Your Company’s balance sheet is strong with a net debt position of $60.2 million at 30 June 2023 and a net debt to
a net debt to equity + debt ratio of 28.9%.
equity + debt ratio of 28.9%.
While the economic outlook in Australia is characterised by uncertainty, National Tyre & Wheel has
While the economic outlook in Australia is characterised by uncertainty, National Tyre & Wheel has actioned a
actioned a range of strategic initiatives that will enable it to meet the challenges ahead with
range of strategic initiatives that will enable it to meet the challenges ahead with confidence and to ensure it is well
confidence and to ensure it is well positioned to enhance its brand and market position. Your
positioned to enhance its brand and market position. Your Company is well placed to benefit from the structural
changes occurring in the industry.
Company is well placed to benefit from the structural changes occurring in the industry.
Your Company is committed to executing initiatives to increase earnings, whilst maintaining an interest in new
Your Company is committed to executing initiatives to increase earnings, whilst maintaining an
strategic acquisitions and alliances which provide profitable growth to the business.
interest in new strategic acquisitions and alliances which provide profitable growth to the business.
Your Board, management and other employees have worked diligently and constructively during the year and that
Your Board, management and other employees have worked diligently and constructively during the
effort is appreciated.
year and that effort is appreciated.
I would like to thank our staff, customers, suppliers and shareholders for the support they have delivered over the
I would like to thank our staff, customers, suppliers and shareholders for the support they have
past year.
delivered over the past year.
Yours faithfully
Yours faithfully
Murray Boyte
Chairman
iv
Providing an industry leading
customer experience remains
the focus of NTAW
v
Managing Director’s report
Dear Shareholders
Dear Shareholders
Introduction
Dear Shareholders
Introduction
NTAW has embraced a new vision, Going further to help our businesses & customers win. This vision has three key
pillars:
During the 2023 financial year (“FY2023”), National Tyre & Wheel Limited and its controlled entities (“NTAW” or
“Company” or “Group”) navigated difficult trading conditions, responding with new initiatives and setting the
Company on the path to improved profitability.
During the 2023 financial year (“FY2023”), National Tyre & Wheel Limited and its controlled entities (“NTAW” or
Introduction
“Company” or “Group”) navigated difficult trading conditions, responding with new initiatives and setting the
Company on the path to improved profitability.
During the 2023 financial year (“FY2023”), National Tyre & Wheel Limited and its controlled entities (“NTAW” or
“Company” or “Group”) navigated difficult trading conditions, responding with new initiatives and setting the
NTAW has embraced a new vision, Going further to help our businesses & customers win. This vision has three key
Company on the path to improved profitability.
pillars:
NTAW has embraced a new vision, Going further to help our businesses & customers win. This vision has three key
• enabling entrepreneurship within each of the Group’s business units;
pillars:
•
• building the value of product brands the Group imports and distributes exclusively.
• enabling entrepreneurship within each of the Group’s business units;
•
• building the value of product brands the Group imports and distributes exclusively.
• enabling entrepreneurship within each of the Group’s business units;
•
• building the value of product brands the Group imports and distributes exclusively.
improving customer service; and
Operations - Overview
Operations - Overview
improving customer service; and
improving customer service; and
NTAW operates 12 business units in Australia, New Zealand and South Africa specialising in wholesale and retail sales
of commercial and consumer tyres and wheels. The commercial category includes heavy and light truck & 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.
NTAW operates 12 business units in Australia, New Zealand and South Africa specialising in wholesale and retail sales
Operations - Overview
of commercial and consumer tyres and wheels. The commercial category includes heavy and light truck & bus tyres,
agricultural and off-the-road tyres, industrial tyres (e.g. forklifts) and tyre and wheel original equipment packages.
NTAW operates 12 business units in Australia, New Zealand and South Africa specialising in wholesale and retail sales
The consumer category includes passenger, SUV and 4WD tyres and wheels.
of commercial and consumer tyres and wheels. The commercial category includes heavy and light truck & bus tyres,
agricultural and off-the-road tyres, industrial tyres (e.g. forklifts) and tyre and wheel original equipment packages.
NTAW’s FY2023 business unit revenue segmentation amongst these categories, and amongst Australia, New Zealand
The consumer category includes passenger, SUV and 4WD tyres and wheels.
and South Africa, can be summarised as follows:
NTAW’s FY2023 business unit revenue segmentation amongst these categories, and amongst Australia, New Zealand
and South Africa, can be summarised as follows:
NTAW’s FY2023 business unit revenue segmentation amongst these categories, and amongst Australia, New Zealand
and South Africa, can be summarised as follows:
COMMERCIAL / CONSUMER
Commercial / Consumer Revenue Segmentation
REVENUE SEGMENTATION
COMMERCIAL / CONSUMER
REVENUE SEGMENTATION
Consumer Retail
8%
COMMERCIAL / CONSUMER
REVENUE SEGMENTATION
Consumer Retail
8%
Consumer Retail
Commercial
8%
Retail
21%
Commercial
Retail
21%
Commercial
Retail
21%
Commercial
Wholesale
30%
Commercial
Wholesale
30%
Commercial
Wholesale
30%
Consumer
Wholesale
41%
Consumer
Wholesale
41%
Consumer
Wholesale
41%
COUNTRY REVENUE SEGMENTATION
COUNTRY REVENUE SEGMENTATION
Country Revenue Segmentation
South Africa
2%
COUNTRY REVENUE SEGMENTATION
South Africa
2%
South Africa
2%
New Zealand
23%
New Zealand
23%
New Zealand
23%
Australia
75%
Australia
75%
Australia
75%
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.
The Australian tyre & wheel industry is estimated to generate revenue of approximately $5.6 billion in 2023 from the
sale of more than 20 million tyres and wheels. The wholesale sector of the industry is estimated to generate revenue
of approximately $3.7 billion.
Each business unit focusses on a winnable segment of the tyre and wheel industry, operating as a separate legal
The Australian tyre & wheel industry is estimated to generate revenue of approximately $5.6 billion in 2023 from the
entity.
sale of more than 20 million tyres and wheels. The wholesale sector of the industry is estimated to generate revenue
of approximately $3.7 billion.
The Australian tyre & wheel industry is estimated to generate revenue of approximately $5.6 billion in 2023 from the
sale of more than 20 million tyres and wheels. The wholesale sector of the industry is estimated to generate revenue
The industry is typically segmented according to vehicle type and purpose, which dictate different types of tyres &
of approximately $3.7 billion.
wheels (the vertical segments in the chart below) and customers based on different buying behaviours (the
horizontal segments in the chart below). Each of the Group’s business units specialise in offering different products
The industry is typically segmented according to vehicle type and purpose, which dictate different types of tyres &
that are fit for different vehicles and provide services that meet the diverse needs of customers with distinct buying
wheels (the vertical segments in the chart below) and customers based on different buying behaviours (the
behaviours.
horizontal segments in the chart below). Each of the Group’s business units specialise in offering different products
that are fit for different vehicles and provide services that meet the diverse needs of customers with distinct buying
behaviours.
The industry is typically segmented according to vehicle type and purpose, which dictate different types of tyres &
wheels (the vertical segments in the chart below) and customers based on different buying behaviours (the
horizontal segments in the chart below). Each of the Group’s business units specialise in offering different products
that are fit for different vehicles and provide services that meet the diverse needs of customers with distinct buying
behaviours.
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1
Managing Director’s report (cont)
Organising Group activities according to this segmentation of the industry enables each business unit to focus
Organising Group activities according to this segmentation of the industry enables each business unit to focus
on a winnable segment of the market, seeking a high share of each target market segment. The Group focusses
on a winnable segment of the market, seeking a high share of each target market segment. The Group focusses
on business units buying well, meeting service level expectations, being easy to deal with and providing loyalty
on business units buying well, meeting service level expectations, being easy to deal with and providing loyalty
incentives, all essential requirements for competing effectively.
incentives, all essential requirements for competing effectively.
The Group’s business units are distinguished by various factors, including:
The Group’s business units are distinguished by various factors, including:
• Product choice & differentiation;
• Operational excellence;
• Expertise;
• Exclusive and preferred re-seller programs;
• Customer intimacy;
• Tyre performance management (including retreading capability);
• Access to a national distribution footprint; and
• An agile and entrepreneurial culture.
• Product choice & differentiation;
• Operational excellence;
• Expertise;
• Exclusive and preferred re-seller programs;
• Customer intimacy;
• Tyre performance management (including retreading capability);
• Access to a national distribution footprint; and
• An agile and entrepreneurial culture.
NTAW distributes a diversified portfolio of fit for purpose products with more than 40 brands being exclusively
imported with many of these supplier relationships having existed for more than 25 years. The Group’s ability to
NTAW distributes a diversified portfolio of fit for purpose products with more than 40 brands being exclusively
promote brands from multiple suppliers differentiates it from major manufacturer suppliers whose product
imported with many of these supplier relationships having existed for more than 25 years. The Group’s ability to
offering is necessarily limited to the single brand they produce.
promote brands from multiple suppliers differentiates it from major manufacturer suppliers whose product
offering is necessarily limited to the single brand they produce.
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2
2
FY23 SUPPLIER MIX BY REVENUE
Managing Director’s report (cont)
Cooper family (Ex. MT)
FY23 Supplier Mix by Revenue
Other suppliers
FY23 SUPPLIER MIX BY REVENUE
Mickey Thompson
Cooper family (Ex. MT)
Mickey Thompson
Other suppliers
FY23 SUPPLIER MIX BY REVENUE
Cooper family (Ex. MT)
Mickey Thompson
Other suppliers
Proprietary brands
Proprietary brands
Sample of Suppliers
Sample of suppliers
Proprietary brands
Other exclusive
brands
Other exclusive
brands
Other exclusive
brands
Sample of suppliers
Sample of suppliers
DYNAMIC
Wheel Co.
Hottest and toughest
iOE
INTEGRATED OE
TYRE & WHEEL SOLUTIONS
The business units are supported by shared service units, comprising supply chain & logistics, innovation & IT and
finance & administration.
The Group employs over 850 people mainly in logistics, sales & marketing, trades and other support services.
Operations - 2023 Financial Year
The business units are supported by shared service units, comprising supply chain & logistics, innovation & IT and
finance & administration.
NTAW reported a net loss after tax and before amortisation of $0.5 million for the six months ended 31 December
2022. Your Company executed several initiatives in the second half of the financial year in response to these
conditions, contributing to an improved financial performance of the Group, reporting a net profit after tax and
before amortisation of $6.0 million in 2H23, totalling $5.5 million for FY2023.
The Group employs over 850 people mainly in logistics, sales & marketing, trades and other support services.
Operations - 2023 Financial Year
NTAW reported a net loss after tax and before amortisation of $0.5 million for the six months ended 31 December
2022. Your Company executed several initiatives in the second half of the financial year in response to these
conditions, contributing to an improved financial performance of the Group, reporting a net profit after tax and
before amortisation of $6.0 million in 2H23, totalling $5.5 million for FY2023.
The business units are supported by shared service units, comprising supply chain & logistics, innovation & IT and
finance & administration.
3
The Group employs over 850 people mainly in logistics, sales & marketing, trades and other support services.
viii
Operations - 2023 Financial Year
3
NTAW reported a net loss after tax and before amortisation of $0.5 million for the six months ended 31 December
2022. Your Company executed several initiatives in the second half of the financial year in response to these
conditions, contributing to an improved financial performance of the Group, reporting a net profit after tax and
before amortisation of $6.0 million in 2H23, totalling $5.5 million for FY2023.
3
Managing Director’s report (cont)
This lower result compared to previous years, and an unusual seasonality of earnings, reflecting a difficult operating
environment in 1H23, arising from:
• unprecedented increases in the cost of goods attributable to a significant rise in oil prices;
• unprecedented increases in shipping costs attributable to pandemic related shortages of ships, dislocation of
containers, volatile demand and higher fuel costs;
supply chain disruption attributable to post pandemic supply and demand imbalance; and
labour shortages having adverse impacts on costs and service levels.
•
•
The size and cadence of increases in the cost of goods was too large to be covered, in a timely manner by higher
selling prices, and gross profit margins suffered in 1H23. Unpredictable lead times meant inventory was often either
too low or too high with adverse impacts on volume and revenue throughout the year.
The Group’s operating environment improved in 2H23 – shipping costs fell as rapidly as they had risen, selling price
rises went some way to recovering lost margin (assisted by an improvement in the AUD/USD exchange rate), oil
prices declined, suppliers offered more attractive prices and labour market shortages became less severe.
Operational and strategic initiatives undertaken by your Company during the year included:
• entering into a partnership agreement with Michelin which, together with a new alliance between Tyres4U,
Tyreright and Black Rubber, is designed to grow the Group’s commercial truck and bus fleet business;
focussing on exclusive imported brands, offering products covering multiple price points;
•
• pursuing improved customer service via:
o decentralisation of Marketing and People & Culture activities;
o completing warehouse consolidation in Brisbane with the consolidation of Perth warehouses to be
completed in 1H24; and
o consolidated freight management arrangements for all business units;
continuing the migration of all business units to the same finance & administration, data management and IT
platform;
continuing to roll out more sophisticated procurement processes; and
further rationalisation and cost reduction via the sale/closure of Tyreright stores.
•
•
•
Your Company is fostering a culture of entrepreneurship in the operating business units, with the aim of improving
customer service levels and offering a select group of exclusive, imported brands in the winnable segments of the
marketplace.
Financial Results – 2023 Financial Year
Your Company delivered operating net profit after tax and before amortisation (“NPATA”) of $8.0 million in FY2023
(FY2022: $15.5 million). Revenue amounted to $582 million (FY2022: $556 million).
Operating EBITDA1 was $38.8 million (FY2022: $44.9 million). Earnings per share was 5.7 cents based on Operating
NPATA (FY2022: 12.7 cents per share). The Group’s statutory NPATA attributable to NTAW shareholders mounted to
$5.5 million (FY2022: $11.1 million).
Finance costs increased from the prior year due to higher debt levels for the entire financial year and rising interest
rates.
The following table summarises the key financial metrics for the Group:
1Refer to table on the next page.
1 Refer to table below.
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4
Managing Director’s report (cont)
Financial Highlights
Financial Highlights
Gross profit margin
Gross profit margin
Operating costs as a % of revenue
Operating costs as a % of revenue
EBITDA ($ million)
EBITDA ($ million)
EBITDA margin
EBITDA margin
NPATA ($ million)
NPATA* ($ million)
Operating NPATA ($ million)
Operating NPATA** ($ million)
Basic EPS (cents)
Basic EPS (cents)
Dividend per share (cents)
Dividend per share (cents)
Net debt ($ million)
Net debt ($ million)
Net debt:debt+equity
Net debt:debt+equity
NTA per share (cents)
NTA per share (cents)
Operating cash flow ($ million)
Operating cash flow ($ million)
Interest cover (times)
Interest cover (times)
FY23
FY23
28.1%
28.1%
21.9%
21.9%
36.3
36.3
6.2%
6.2%
5.5
5.5
8.0
8.0
2.5
2.5
-
-
60.2
60.2
28.9%
28.9%
50.9
50.9
24.2
24.2
4.3x
4.3x
FY22
FY22
28.7%
28.5%
21.2%
21.4%
40.5
40.5
7.3%
7.3%
11.1
11.1
15.5
15.5
7.7
7.7
4.5
4.5
60.0
60.0
28.8%
28.8%
48.8
48.8
11.8
11.8
8.1x
8.1x
The following table reconciles Statutory EBITDA to Operating EBITDA, adjusting for $2.6 million of non-recurring costs
in FY2023.
Reconciliation of Reported EBITDA to Operating EBITDA
$'000
Net profit after tax
Income tax expense
Net profit before tax
Finance costs (net)
Reported EBIT
Depreciation and amortisation
Reported EBITDA
IT project implementation costs
Store disposals and redundancy costs
Warehouse consolidation costs
Unrealised FX loss/(gain)
Acquisition costs
Operating EBITDA
FY23
2,895
960
3,855
8,379
12,234
24,040
36,274
1,203
710
457
185
-
38,829
FY22
9,569
4,995
14,564
5,010
19,574
20,904
40,478
2,522
-
1,207
(85)
736
44,858
The following chart presents a bridge from 1H23 Operating NPATA to 2H23 Operating NPATA, highlighting the
turnaround experienced during the year with improved gross margin (albeit with reduced sales volumes) and
significant reduction in employee benefits expense.
x
5
Managing Director’s report (cont)
NTAW has a strong balance sheet with total assets of $376.0 million and net assets of $115.3 million at 30 June 2023
(Jun-22: $112.5 million). The net debt position at 30 June 2023 was $60.2 million (Jun-22: $60.0 million) and a net
debt to Equity + debt ratio of 28.9%.
No dividend has been declared for FY2023, with your Company preserving cash in a low growth environment. The
Company has $19.0 million worth of available franking credits.
Outlook
The Group expects that deeper relationships with core brands should lead to more engagement in product
development as well as more favourable pricing and terms.
The Australian retail sector is dominated by small businesses owned by baby boomers approaching retirement and
the Group expects this will lead to a generational change of store ownership. New owners will be particularly
attuned to the role of online purchase pathways and the importance of digital assets, presenting opportunities for
the Group to build deeper customer relationships via collaborations responding to these trends.
Tyre consumers are becoming more knowledgeable about products, and more aware of sources of information
beyond the tyre shop counter. Interrupting or informing the virtual part of the consumer purchase journey will be
increasingly important and NTAW is investing in services to assist its B2B customers’ response to this trend.
NTAW is positioning the Group to ensure that it can benefit from opportunities that may emerge from these market
dynamics.
xi
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).
In particular, your Company remains focused on executing the following strategic initiatives:
Depreciation increased by $5.5 million in FY22, reflecting an increase in property leases that are classified as right-of-use assets in
•
concentrating on exclusive, imported brands and reducing substitutable products in the Group’s portfolio;
accordance with AASB 16 Leases. Following the FY22 acquisitions, NTAW now occupies 72 leased premises and only those with a
•
increasing revenue from the re-organisation of the Group’s commercial fleet business and leverage from
term of less than 12 months are treated as occupancy costs.
retreading capabilities;
improving service levels to customers;
The FY22 result was mixed with contributions from newly acquired businesses and strong performances from agricultural tyres,
•
original equipment supplies, wheels and budget tyres offset by supply chain disruption and lower gross profit margins in some
• gaining cost and time efficiencies, and improve service levels, from warehouse consolidations;
other business units, particularly in 2H22.
• managing all discretionary expenditure; and
The following table summarises key financial metrics for the Group:
• optimising business structures and operating methods in a decentralised model.
These initiatives are expected to underpin earnings growth for the 2024 financial year.
Financial Highlights
FY22
FY21
Acknowledgements
Gross profit margin
Operating costs as a % of revenue
EBITDA ($ million)
EBITDA margin
NPATA* ($ million)
Basic EPS (cents)
Dividend per share (cents)
Net debt ($ million)
Net debt:debt+equity
NTA per share (cents)
Operating cash flow ($ million)
Interest cover (times)
28.7%
21.4%
40.5
It has been a year of difficult trading conditions for your Company, particularly in the first six months, which in turn
7.3%
creates new and additional challenges for our people. The workforce embraced the challenges and changes required
11.1
during the 2023 financial year, which has been critical in your Company achieving the financial result achieved, as
7.7
4.5
well as providing an excellent platform for further business improvements to come. This effort is both acknowledged
60.0
and greatly appreciated.
28.8%
48.8
11.8
8.1x
NTAW employees have had to deal with an extremely challenging operating environment in FY2023, testing their
The following table reconciles Statutory EBITDA to Operating EBITDA. The one-off costs include $2.5 million related to IT projects
resolve and commitment. It has been very gratifying to see them pass those tests with distinction, ensuring that the
and $1.2 million related to warehouse consolidation and relocations.
Group finished the year on a much better trajectory. The continuing support and patience of our suppliers,
customers and shareholders helped the Group navigate difficult times and that has also been very gratifying.
The Group enjoys continuing support from suppliers and customers, reciprocated by enhancing customer
experiences and our Group-wide commitment to building up our product brands.
29.8%
19.8%
46.1
10.0%
21.1
17.9
8.0
16.0
11.7%
64.8
22.7
15.6x
Reconciliation of Reported EBITDA to Operating EBITDA
The NTAW Board and senior management team is very grateful for the support received from all stakeholders.
$'000
FY22
FY21
Yours faithfully
Peter Ludemann
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
9,569
20,904
5,010
4,995
40,478
-
736
3,729
20,540
14,278
2,949
8,378
46,145
(596)
1,449
-
(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
NTAW is focussed on exclusive
imported brands, offering
products covering multiple
price points
xiii
FINANCIAL REPORT
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
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 2023.
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-Independent, Non-Executive Director
Non-Executive Director
Non-Executive Director (July 2022 – January 2023);
Executive Director (February 2023 – June 2023)
Principal activities
The principal activity of the Group during the financial year ended 30 June 2023 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”);
•
•
• Dynamic Wheel Co. Pty Limited (“Dynamic”);
•
•
•
•
•
•
• Black Rubber Pty Ltd & Black Rubber Sydney Pty Ltd (collectively “Black Rubber”); and
•
Integrated OE Pty Ltd (“OE”);
Statewide Tyre Distribution Pty Ltd (“Statewide”);
Top Draw Tyres Proprietary Limited t/a Tyrelife Solutions (“TLS”);
Tyres4U Pty Ltd (“Tyres4U AU”);
Tyres4U (NZ) Ltd (“Tyres4U NZ”);
Tyreright Operations Pty Ltd (“TRT”);
Carters Tyre Service Limited, C.O. Tire & Retreading Co Limited & Tyre Distributors New Zealand Limited (collectively
“Carter’s”).
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
2023
$'000
1,981
-
1,981
2022
$'000
5,715
3,950
9,665
At the date of signing these financial statements, there has been no dividend’s declared in respect of the 2023 financial year by
the Company and no dividend’s payable.
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Operating and financial review
Review of operations
NTAW experienced difficult trading conditions in 1H23 as:
•
•
•
•
•
the cost of goods rose dramatically in response to steep increases in the price of oil, a substantial raw material in tyre
manufacture;
inbound freight costs rose at an unprecedented rate;
outbound freight costs also rose with higher fuel prices and a shortage of drivers;
supplier lead times became unusually volatile, particularly for USA sourced products; and
labour shortages had a negative impact on service levels.
The Group’s selling prices increased throughout FY23 at a rate that the market could tolerate, being slower than the speed at which
the cost of goods and freight rose, resulting in a substantial reduction on 1H23 earnings, compared to 1H22.
NTAW responses included the aforementioned selling price rises, a review of freight management, cost savings and a shift away
from digital transformation to a focus on customer service levels.
In 2H23, the cost of freight fell dramatically, there was a modest decline in cost of goods, higher selling prices improved gross
margins and overhead expenses reduced. As a result, NTAW’s financial performance improved in 2H23, illustrated in the following
bridge analysis:
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Between 1H23 and 2H23, gross profit margin was 2% higher, people costs reduced by $3.9 million (despite wages growth) and
Operating NPATA increased by $5.2m (370%).
In FY23, NTAW achieved revenue of $582.3 million, including a full year contribution of Carter’s (6 months in FY22) and Black
Rubber (8 months in FY22). Revenue from Australian wholesale operations fell due to constrained supply in 1H23 (which continued
in 2H23 for USA sourced products), the volume impact of price rises and the shift to selling less at a higher gross margin. Revenue
losses were mostly offset by improved gross profit margins.
In July 2023, the Group announced a partnership agreement had been reached with Michelin to facilitate a re-organisation of the
commercial fleet activities of Black Rubber, Tyreright and Tyres4U. This partnership is designed to enhance the value of the Group’s
truck and bus fleet proposition, with a range of fit-for-purpose tyres, environmentally sustainable retread manufacture as well as
related services and tyre performance management.
The migration of all NTAW business units to common finance & administration and data management IT platforms continued
during the year and is expected to be completed by December 2023 when all business units will be on the same platform.
The Group’s gross debt of $93.2m at 30 June 2023 stayed relatively consistent during FY2023 which, with rising interest rates, saw
the Group’s FY2023 finance costs increase by $3.3m (65%) compared to FY2022.
Results highlights
NTAW has reported total revenue of $582.3m (2022: $555.5m) for the financial year, an increase of $26.8m (4.8%) on the prior
year.
NTAW’s statutory profit for the Group after providing for income tax and non-controlling interests amounted to $2.9m (2022:
$9.6m).
NTAW has a strong balance sheet with net assets of $115.3m (Jun-22: $112.5m). The net debt position was $60.2m (Jun-22:
$60.0m) and a ‘net debt to equity + gross debt’ ratio of 28.9% (Jun-22: 28.8% ).
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.
FY2023
FY2022
28.1%
21.9%
6.2%
6.7%
28.5%
21.2%
7.3%
8.1%
NTAW has reported a gross profit margin of 28.1% and an Operating EBITDA margin of 6.7%, with gross profit margin and
Operating EBITDA margin decreasing from that achieved in the prior year. The Group’s operating costs as a percentage of sales of
21.9% was slightly greater than prior year due to the full year impact of acquired retail operations (Black Rubber and Carter’s) in
FY2022 offsetting cost savings measures undertaken.
Key financial results
$'000
Sales revenue
Gross profit
Reported EBITDA
Operating EBITDA
NPATA attributable to NTAW 1
1 NPATA excludes non-controlling interests and amortisation on a tax effected basis.
FY2023
FY2022
582,284
163,821
36,273
38,828
5,490
555,549
158,571
40,502
44,882
11,076
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Operating EBITDA
The Group has reported an EBITDA of $36.3m (2022: $40.5m). The result for FY2023 includes non-recurring costs of $2.4m
associated with the implementation of IT projects, disposal of retail stores and redundancy costs and the consolidation of
metropolitan warehouses. Unrealised foreign exchange loss on foreign exchange contracts and foreign currency denominated
suppliers of $0.2m (2022: $0.1m gain) was recognised during the year. After taking into account the above items, an Operating
EBITDA of $38.8m was earned in the reporting period (FY2022: $44.9m) as shown in the following table:
$'000
FY2023
FY2022
Net profit after tax
Depreciation and amortisation
Finance costs (net)
Income tax expense
Reported EBITDA
IT project implementation costs
Store disposal and redundancy costs
Warehouse consolidation costs
Acquisition costs
Unrealised foreign exchange (gains)/losses
Operating EBITDA
2,895
24,040
8,379
960
36,274
1,203
710
457
-
185
38,829
9,569
20,904
5,010
4,995
40,478
2,522
-
1,207
736
(85)
44,858
Financial Position
Key financial information in relation to the Group’s financial position at year end is shown below:
Total assets ($’000)
Net assets ($’000)
Net debt ($’000)
Shares on issue (‘000)
Dividends per security (cents)
30 June 2023
30 June 2022
376,047
115,340
60,206
133,271
-
385,673
112,466
59,968
131,936
4.50
Significant balance sheet movements during the financial year were as follows:
• Net debt has increased by $0.2m;
• Net assets have slightly increased by $2.9m;
•
1.3m shares were issued under the dividend reinvestment plan for the FY2022 final dividend; and
• No final or interim dividend has been declared in respect of the year (FY2022: 1.50 cents and 3.00 cents, respectively).
4
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Outlook
NTAW has set a new vision “Going further to help our businesses and customers win” by emphasising customer service and enabling
an entrepreneurial mindset amongst the Group’s businesses as they pursue distinct visions that suit the market segments in which
they operate.
NTAW is focused on executing the following strategic initiatives:
•
•
•
•
•
focusing on exclusive, imported brands and reducing substitutable products in the Group’s portfolio;
increase revenue from the re-organisation of the Group’s commercial fleet business and leverage from retreading capabilities;
capitalise on opportunities to negotiate lower import prices with suppliers;
improve service levels and continue to provide leading technical support to customers;
gain cost and time efficiencies from warehouse consolidations;
• manage all discretionary expenditure; and
•
optimising business structures and operating methods in a decentralised model.
NTAW believes these strategies and tactics are appropriate having regard to expectations for relatively low levels of economic
growth and the effect that may have on demand for its products and services.
Significant changes in the state of affairs
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
No matter or circumstance has arisen since 30 June 2023 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 gross profit improvement and additional cost reductions in the next financial year as it seeks to
leverage the diversity and scale built up in recent years.
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
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 exclusively imports more than 40 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 with the exception
of the 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. The acquisitions in recent years 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 10% of gross profit for FY2023.
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
increases 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 increases 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 would 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 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
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) (appointed 24 November 2017); Hillgrove
Resources Limited (ASX: HGO) (appointed 10 May 2019); Eumundi Group Limited (ASX:
EBG) (appointed 1 March 2021)
Former directorships (last 3 years): Abano Healthcare Group Limited (NZX: ABA) (resigned 22 December 2021)
Special responsibilities:
Member of Audit and Risk Committee; Member of Remuneration and Nominations
Committee
245,211 ordinary shares
Nil
Interests in shares:
Interests in options and rights:
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 and rights:
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, 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
2,817,425 ordinary shares
350,000 options and 228,590 rights
Terry Smith
Non-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.
Mr Smith is a Non-Executive Director but is not considered independent as he is a substantial
holder of the Company.
Nil
Nil
Member of Remuneration and Nominations Committee
27,891,171 ordinary shares
Nil
8
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options and rights:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options and rights:
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
460,427 ordinary shares
Nil
Robert Kent
Independent, Non-Executive Director (July 2022 – January 2023); Executive Director
(February 2023 – June 2023)
Bachelor of Business (Marketing) from Queensland University of Technology and is a
Graduate of the Australian Institute of Company Directors.
Mr Kent was Managing Director of Publicis Mojo (Queensland), part of the global Publicis
Groupe, from 2000 to 2017. During this time he was also a member of the Publicis National
Board of Management. Mr Kent is a career advertising and marketing executive who has
managed innumerable campaigns involving sales promotion and brand building across both
traditional and digital channels. Concurrently with his advertising role, Mr Kent was
Managing Director of leading digital marketing businesses, Personalised Plates Queensland
from 2013 to 2017 and KiwiPlates (NZ) from 2016 to 2017, after winning the tender to
operate each. Mr Kent is currently the Chair of the Company’s Remuneration and
Nominations Committee and a member of the Audit and Risk Committee.
Mr Kent provided consulting services to ETD during the 2023 financial year (commencing in
February 2023 and ceasing in August 2023) and as such was not considered an Independent
Non-Executive Director of the Company for that period of the financial year. Mr Kent
reverted to being a Non-Executive Director at the end of his consulting services.
Nil
Nil
Chair of Remuneration and Nominations Committee; Member of Audit and Risk
Committee
331,500 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.
8
9
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
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 a
Bachelor of Commerce (Accounting and Finance) from The University of Queensland. Mr McMurchy has over 10 years’ experience
in public accounting before joining NTAW in 2020.
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 2023, 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
14
14
13
13
14
14
14
14
14
14
2
1*
2
2
2
2
2*
2
2
2
3
3*
3*
3
3
3
3*
3*
3
3
*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
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
(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.
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 $131,808 per annum (2022: $125,000) for the chairman and
$84,366 per annum (2022: $80,000) for other non-executive directors. An additional fee of $12,644 per annum (2022: $12,000) 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 FY2023 is $313,185 (FY2022:
$413,369), noting that Robert Kent is considered executive for FY2023.
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
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
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.
2023 STI Program
During FY2023, 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.
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Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
2023 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 rights 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.
No rights were granted to any key management personnel or other senior executives during FY2023.
(b) Details of remuneration
The key management personnel of the Group in FY2023 consisted of the following directors of National Tyre & Wheel Limited:
Peter Ludemann – Managing Director and Chief Executive Officer
Terry Smith – Non-Independent, Non-Executive Director
• Murray Boyte – Non-Executive Chairman
•
•
• Bill Cook – Non-Executive Director
• Robert Kent – Non-Executive Director (July 2022 – January 2023); Executive Director (February 2023 – June 2023)
And the following persons:
•
Jason Lamb – Chief Financial Officer and Joint Company Secretary
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits3
Cash salary
and fees1
$
Cash
Bonus
$
2023
Non-Executive Directors:
M Boyte
T Smith
W Cook
119,283
76,350
87,792
Executive Directors:
P Ludemann
R Kent
678,863
87,792
Other Key Management Personnel:
J Lamb
403,041
1,453,121
-
-
-
-
-
Post-
employment
benefits
Super-
annuation
$
Long-term
benefits
Share-based
payments
Long service
leave
$
Equity-
settled
$
12,525
8,017
9,218
-
-
-
-
-
-
Other2
$
-
-
-
Total
$
131,808
84,367
97,010
-
102,773
25,385
9,218
30,804
-
130,510
-
865,562
199,783
20,000
20,000
-
102,773
25,439
89,802
32,909
63,713
78,475
208,985
559,864
1,938,394
1 Including movement in annual leave provisions.
2 The Group engaged in consulting services by R Kent in FY2023.
3 There were no non-monetary benefits paid during FY2023.
12
13
13
Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
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
$
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.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
125,000
104,530
92,000
91,839
11,363
9,503
8,364
8,203
-
-
-
-
-
-
-
-
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
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 Smith
W Cook
Executive Directors:
P Ludemann
R Kent
Fixed remuneration
2022
2023
At risk - STI
At risk - LTI
2023
2022
2023
2022
100%
100%
100%
59%
100%
100%
100%
100%
61%
100%
-
-
-
-
-
-
29%
-
30%
-
-
-
-
12%
-
-
-
-
9%
-
Other Key Management Personnel:
J Lamb
61%
62%
27%
28%
12%
10%
Name
Executive Director:
P Ludemann
Other Key Management Personnel:
J Lamb
1 Forfeited cash bonuses are not accrued in the relevant year’s result.
Cash bonus paid/payable
2023
2022
Cash bonus forfeited1
2022
2023
-
11%
-
-
100%
100%
89%
100%
14
14
Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
(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
FY2023
FY2022
FY2021
FY2020
FY2019
Sales revenue ($’000)
NPAT attributable to shareholders ($’000)
Operating EBITDA ($’000)
Share price at end of year ($)
Basic earnings per share (cents)
Dividends paid (cents per share)
582,284
3,331
38,828
0.57
2.51
-
555,549
9,398
44,882
0.97
7.65
4.50
461,533
20,255
46,677
1.06
17.90
8.00
158,857
4,551
11,786
0.38
4.12
1.25
168,365
6,391
12,728
0.37
6.22
4.80
(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 FY2023 were as follows:
Name:
Title:
Details:
Name:
Title:
Details:
Peter Ludemann
Managing Director and Chief Executive Officer
Mr Ludemann has an annual total fixed remuneration (TFR) of $624,947 consisting of base
salary, superannuation and car allowance. 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 $415,631, consisting of base salary and
superannuation. 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.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
14
15
15
Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
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.
(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 2023 (2022: nil).
(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 -
Dividend
Reinvestment
Plan (“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 Skead1
240,206
27,321,966
451,032
324,734
2,759,928
75,418
3,500
-
-
-
-
-
-
(3,500)
31,176,784
(3,500)
1 No longer classified as key management personnel effective 1 July 2022.
-
-
-
-
-
-
-
-
5,005
569,205
9,395
6,766
57,497
-
-
647,868
-
-
-
-
-
-
-
-
245,211
27,891,171
460,427
331,500
2,817,425
75,418
-
31,821,152
16
16
Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
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 Ludemann1
J Lamb2
C Skead3
Balance at
the start of
the year
-
-
-
-
350,000
320,000
305,000
Ceased to be
KMP
Granted /
Lapsed
Exercised
-
-
-
-
-
-
(305,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
975,000
(305,000)
1 On 30 September 2022, 180,000 options which were granted on 8 November 2019 had vested. These remain exercisable at 30 June 2023 and at the date of this report.
2 On 30 September 2022, 160,000 options which were granted on 8 November 2019 had vested. These remain exercisable at 30 June 2023 and at the date of this report.
3 No longer classified as key management personnel effective 1 July 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 end of
the year
-
-
-
-
350,000
320,000
-
670,000
Balance at
the end of
the year
-
-
-
-
228,590
114,295
-
342,885
Rights
M Boyte
T Smith
B Cook
R Kent
P Ludemann
J Lamb
C Skead1
Balance at
the start of
the year
-
-
-
-
228,590
114,295
114,295
Ceased to be
KMP
Granted /
Lapsed
Exercised
-
-
-
-
-
-
(114,295)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
All Rights on issue remain unvested as at 30 June 2023.
457,180
(114,295)
16
17
17
Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
Remuneration report (audited) (continued)
(g) Other transactions with key management personnel
Related party transactions
During the reporting period, the Group leased business premises from a KMP member. The lease expires on 28 February 2025
with no renewal options. Rent payments for FY2023 totalled $276,276 (2022: $92,092), with $nil outstanding at 30 June 2023
(2022: $nil.)
The Group also engaged in consulting services of $102,773 from a KMP member which has been included as a short term benefit
in section (b) above (2022: $nil).
Loans to/from key management personnel
At 30 June 2023 and 30 June 2022, there were no loans to and/or from KMP.
This concludes the Remuneration Report, which has been audited.
Shares under option
There were 3,475,000 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 1,635,000, 1,680,000 & 160,000 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 1,002,364 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.
Shares issued on the exercise of options
During the year and in accordance with their terms, 140,000 options with an expiry date of 7 November 2024 were exercised. As a
result, 90,996 of the 140,000 options were net settled and the remaining 49,004 options were exercised, resulting in the issuance
of 49,004 ordinary shares.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Group 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 Group
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 Group
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
Group, or to intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the
Group for all or part of those proceedings.
18
18
Directors’ report 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Directors' report
30 June 2023
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 Group, acting as advocate for the Group 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 Group 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
29 August 2023
Brisbane
18
19
19
Directors’ report 30 June 2023
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 2023, 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
ANDREW ROBIN
Partner
Brisbane, Queensland
29 August 2023
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
EDWARD FLETCHER
ROBERT HUGHES
20
Directors’ report 30 June 2023
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 2023
National Tyre & Wheel Limited and its controlled entities
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
2022
$'000
Note
2021
$'000
Revenue from contracts with customers
Other income
Gain on bargain purchase
Revenue from contracts with customers
Expenses
Other income
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
Motor vehicle costs
Insurance
Marketing
Professional fees and acquisition costs
Insurance
Other
Professional fees and acquisition costs
Finance costs
Other
Finance costs
Profit before income tax expense
Profit before income tax expense
Income tax expense
Income tax expense
Profit after income tax expense
Profit after income tax expense
Other comprehensive income
Note
5
6
7
7
8
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation
Other comprehensive income for the year, net of tax
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:
Total comprehensive income for the year is attributable to:
Non-controlling interest
Non-controlling interest
Owners of National Tyre & Wheel Limited
Owners of National Tyre & Wheel Limited
Basic earnings per share
Basic earnings per share
Diluted earnings per share
Diluted earnings per share
25
25
25
25
5
6
30
7
7
557,909
461,533
2023
$'000
2022
$'000
805
-
1,357
596
582,284
555,549
370
(397,802)
(77,856)
(20,904)
(9,139)
(6,956)
(5,584)
(4,316)
(3,824)
(2,904)
(9,774)
(5,091)
(418,463)
(84,407)
(24,040)
(7,763)
(6,705)
(6,686)
(5,187)
(4,104)
(2,137)
(10,885)
(8,422)
14,564
811
(324,023)
(58,612)
(14,278)
(7,984)
(3,733)
(3,715)
(6,178)
(3,070)
(3,530)
(6,439)
(3,006)
(396,978)
(77,856)
(20,904)
(9,139)
(6,956)
(5,584)
(4,316)
(3,824)
(2,904)
(8,244)
(5,091)
28,918
8
3,855
(4,995)
14,564
(8,378)
(960)
9,569
(4,995)
20,540
2,895
9,569
(2,853)
(2,853)
6,716
305
305
(2,853)
(2,853)
740
740
21,280
3,200
6,716
171
9,398.
9,569.
(436)
3,331.
2,895
171
6,545
6,716.
Cents
7.65
7.41
(436)
3,636
3,200.
Cents
2.51
2.42
285.
20,255.
20,540.
285.
20,995.
21,280.
Cents
17.90
17.56
171
9,398
9,569
171
6,545
6,716
Cents
7.65
7.41
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
21
21
21
Statement of financial position
National Tyre & Wheel Limited and its controlled entities
Statement of financial position
As at 30 June 2023
as at 30 June 2023
Note
2023
$'000
2022
$'000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Prepayments
Current tax asset
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Other financial assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Current tax liability
Total current liabilities
Non-current liabilities
Payables
Borrowings
Lease liabilities
Provisions
Deferred tax
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Equity attributable to the owners of National Tyre & Wheel Limited
Non-controlling interest
Total equity
9
10
11
12
13
14
15
12
16
17
18
19
16
17
18
19
8
20
21
33,040
76,743
129,788
1,550
4,111
-
245,232
16,791
61,216
51,265
1,543
130,815
35,826
78,472
127,266
1,576
5,154
1,216
249,510
16,831
65,081
53,764
487
136,163
376,047
385,673
83,055
4,961
15,902
11,339
129
115,386
-
88,285
51,000
2,250
3,786
145,321
86,245
7,550
16,016
13,238
-
123,049
2,600
88,244
51,581
2,047
5,686
150,158
260,707
273,207
115,340
112,466
94,068
(1,093)
19,291
112,266
3,074
93,122
(2,107)
17,941
108,956
3,510
115,340
112,466
The above statement of financial position 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
22
Statement of changes in equity
National Tyre & Wheel Limited and its controlled entities
Statement of changes in equity
For the year ended 30 June 2023
for the year ended 30 June 2023
Foreign
currency
translation
reserve
$'000
Issued
capital
$'000
Share-based
payments
reserve
$'000
Retained
earnings
$'000
Non-
controlling
interest
$'000
Total equity
$'000
Balance at 1 July 2021
70,204
(174)
236
18,208.
3,339
91,813
Profit after income tax expense for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
-
-
-
-
(2,853)
(2,853)
Transactions with owners in their
capacity as owners:
Shares issued (note 20)
Share-based payments (note 24)
Dividends paid (note 22)
22,401
-
517
-
-
-
Balance at 30 June 2022
93,122
(3,027)
-
-
-
-
684
-
920
9,398
-
9,398
-
-
(9,665)
171
-
171
-
-
-
9,569
(2,853)
6,716
22,401
684
(9,148)
17,941
3,510
112,466
Balance at 1 July 2022
93,122
(3,027)
920
17,941
3,510
112,466
Profit after income tax expense for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive income for
the year
Transactions with owners in their
capacity as owners:
Redemption of share options (note
20)
Share-based payments (note 24)
Dividends paid (note 22)
-
-
-
20
-
926
-
305
305
-
-
-
-
-
-
3,331
(436)
2,895
-
-
305
3,331
(436)
3,200
(20)
729
-
-
-
(1,981)
-
-
-
-
729
(1,055)
Balance at 30 June 2023
94,068
(2,722)
1,629
19,291
3,074
115,340
22
The above statement of changes in equity 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
23
23
Statement of cash flows
National Tyre & Wheel Limited and its controlled entities
Statement of cash flows
For the year ended 30 June 2023
for the year ended 30 June 2023
Note
2023
$'000
2022
$'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment of deferred consideration
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
Cash flows from financing activities
Proceeds from share issue
Payment of capital raising costs
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Dividends paid
Net cash (used in)/from financing activities
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
23
30
656,716
(622,900)
33,816
43
(8,172)
(1,515)
630,440
(606,844)
23,596
81
(4,855)
(6,985)
24,172
11,837
(2,600)
-
(4,110)
687
(226)
-
(48,496)
(5,132)
1,548
(483)
(6,249)
(52,563)
-.
-
4,292
(4,500)
(16,774)
(1,055)
19,904.
(585)
51,568.
(3,500)
(13,376)
(9,148)
(18,037)
44,863
(114)
32,776
(83)
4,137
28,451
188
Cash and cash equivalents at the end of the financial year
9
32,579
32,776
The above statement of cash flows should be read in conjunction with the accompanying notes
The above statement of cash flows should be read in conjunction with the accompanying notes
24
24
Notes to the financial statements
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
for the year ended 30 June 2023
26
26
35
36
36
36
37
38
39
39
39
40
40
41
42
45
45
47
48
49
50
50
51
52
58
59
59
61
65
65
67
67
68
68
69
71
24
25
25
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 for-profit 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 29 August 2023. 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. The new accounting standards, interpretations and
amendments that are relevant to the activities of the Group have not had a material impact on the financial statements of the
Group.
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 2023 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
26
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
26
27
27
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 and finance income on the net investment in leases
Interest income and finance income on the net investment in leases 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.
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, Black Rubber Pty Ltd, Black Rubber Sydney Pty Ltd, Solid Plus Operations Pty and NTAW Logistics Pty Ltd), have formed an
income tax consolidated group under the tax consolidation regime. In FY2023, NTAW Holdings (NZ) Ltd (the ‘head entity’) and its
wholly owned New Zealand subsidiaries (Exclusive Tyres Distributors (NZ) Limited, Tyres4U (NZ) Ltd, Carters Tyre Service Limited,
C.O. Tire & Retreading Co Limited and Tyre Distributors New Zealand Limited) formed an income tax consolidated group under the
tax consolidation regime. In both consolidated income tax groups, 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
28
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 includes 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.
28
29
29
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
30
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
30
31
31
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
32
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
32
33
33
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 2023. 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
34
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 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. These cash flows have been
calculated using annual growth rates of between 2.0%-6.3% , a terminal growth rate of 2.0%-2.5% and a pre-tax discount rate
between 13.0%-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.
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).
34
35
35
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 2023, $112,331,000 (2022: $116,524,000) of the Group's non-current assets (excluding deferred taxes) were held in
Australia, with $18,152,000 held in New Zealand (2022: $19,650,000) and $333,000 (2022: $343,000) held in South Africa,
respectively.
Major customers
During FY2023, none of the Group's external revenue was derived from sales of greater than 10% to any customer (2022: 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
2023
$'000
2022
$'000
582,284
555,549
582,284
555,549
441,587
130,948
9,749
439,339
104,771
11,439
582,284
555,549
During the 2023 and 2022 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
Recovery of bad debts
Interest income
Finance income on the net investment in the lease
Other income
15
30
13
312
370
217
81
-
513
811
36
36
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
Foreign exchange loss
Realised foreign exchange loss
Unrealised foreign exchange loss/(gain)
Net foreign exchange loss
Expense relating to leases
Expense relating to short-term leases
Expense relating to leases of low value assets
2023
$'000
2022
$'000
282
1,957
1,288
17,655
180
1,600
1,460
15,494
21,182
18,734
2,330
528
2,858
1,641
529
2,170
24,040
20,904
6,282
2,105
35
8,422
1,804
185
1,989
1,385
-
1,385
3,288
1,784
19
5,091
1,530
(85)
1,445
1,382
-
1,382
Superannuation expense
Defined contribution superannuation expense
5,120
4,928
36
37
37
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 8. Income tax
Income tax expense
Current tax
Deferred tax
(Over)/under 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 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
Deferred tax liabilities
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
38
38
2023
$'000
2,857
(1,075)
(822)
960
2022
$'000
4,714
168
113
4,995
(1,075)
168
3,855
1,156
14,556
4,367
703
623
1,859
4,990
(822)
(77)
960
-
(7)
4,471
(3,355)
(6,304)
(18,110)
(421)
19,940
-
113
(108)
4,995
10
19
4,613
(3,940)
(6,603)
(18,949)
(377)
19,822
(281)
(3,786)
(5,686)
(5,686)
-
1,075
822
3
2,076
(5,697)
(168)
(1,881)
(16)
(3,786)
(5,686)
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 9. Cash and cash equivalents
Cash at bank
2023
$'000
2022
$'000
33,040
35,826
33,040
35,826
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
33,040.
(461)
35,826.
(3,050)
32,579
32,776.
77,220
(1,304)
75,916
78,565
(1,197)
77,368
827
1,104
76,743
78,472
Allowance for expected credit losses
The Group has recognised a net loss of $358,000 (2022: $487,000) in profit or loss in respect of the expected credit losses. Trade
receivables past due but not impaired amount to $11,509,000 (2022: $11,408,000).
At 30 June 2023 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
65,711
9,055
1,180
1,274
67,157
8,237
1,675
1,496
77,220
78,565
118,232
(612)
117,620
115,761
(737)
115,024
12,168
12,242
129,788
127,266
38
39
39
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 12. Other financial assets
Current
Term deposits
Net investment in leases
Forward foreign exchange contracts
Non-Current
Term deposits
Net investment in leases
2023
$'000
151
1,128
271
1,550
76
1,467
1,543
2022
$'000
136
115
1,325
1,576
487
-
487
The Group subleases a warehouse that it commenced leasing in 2015. The Group has classified the sublease as a finance lease
because the sublease is for a significant portion of the remaining term of the head lease.
The following table sets out a maturity analysis of the lease receivables, showing the undiscounted lease payments to be received
after the reporting date.
Less than one year
One to two years
Two to three years
Total undiscounted lease payments receivable
Unearned finance income
Net investment in leases
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
1,238
1,297
224
2,759
(164)
2,595
2,227
(931)
1,296
24,008
(14,296)
9,712
21,806
(16,023)
5,783
115
-
-
115
-
115
1,786
(429)
1,357
22,191
(12,283)
9,908
19,675
(14,109)
5,566
16,791
16,831
40
40
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 13. Property, plant and equipment (continued)
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
6,016
3,661
2,780
(722)
(1,600)
(227)
9,908
2,203
(469)
(1,957)
27
3,719
2,193
1,572
(339)
(1,460)
(119)
5,566
1,609
(153)
(1,288)
49
Total
$'000
10,167
6,225
5,146
(1,250)
(3,240)
(217)
16,831
4,110
(706)
(3,527)
83
9,712
5,783
16,791
2023
$'000
89,246
(32,375)
56,871
1,145
(399)
746
5,461
(1,862)
3,599
2022
$'000
90,148
(29,881)
60,267
1,128
(332)
796
5,258
(1,240)
4,018
61,216
65,081
432
371
794
(189)
(180)
129
1,357
298
(84)
(282)
7
1,296
Balance at 30 June 2021
Additions as part of acquisition (note 30)
Additions
Disposals
Depreciation expense
Foreign exchange differences
Balance at 30 June 2022
Additions
Disposals
Depreciation expense
Foreign exchange differences
Balance at 30 June 2023
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
40
41
41
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 14. Right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current year are set out below:
Balance at 30 June 2021
Additions as part of acquisition (note 30)
Additions
Depreciation expense
Foreign exchange differences
Balance at 30 June 2022
Additions
Disposals
Depreciation expense
Foreign exchange differences
Balance at 30 June 2023
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
Land and
buildings
$'000
Plant and
equipment
$'000
Motor vehicles
$'000
Total
$'000
31,833
12,808
30,561
(14,500)
(435)
60,267
20,700
(8,039)
(16,268)
211
56,871
407
89
613
(188)
(125).
796
191
(27)
(208)
(6)
746
1,304
2,949
694
(806)
(123)
4,018
817
(102)
(1,179)
45
33,544
15,846
31,868
(15,494)
(683).
65,081
21,708
(8,168)
(17,655)
250
3,599
61,216
2023
$'000
30,556
(1,311)
29,245
17,212
(5,993)
11,219
12,106
(9,880)
2,226
2022
$'000
30,311
(1,311)
29,000
17,484
(3,984)
13,500
12,106
(9,352)
2,754
8,375
8,310
200
200
51,265
53,764
42
42
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 15. Intangible assets (continued)
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 30 June 2021
Additions (note 30)
Amortisation expense
Foreign exchange differences
Balance at 30 June 2022
Amortisation expense
Foreign exchange differences
7,567
22,023
-
(590)
29,000
-
245
2,455
12,817
(1,641)
(131)
13,500
(2,330)
49
Balance at 30 June 2023
29,245
11,219
3,283
-
(529)
-
2,754
(528)
-
2,226
2,393
6,077
-
(160)
8,310
-
65
8,375
-
200
-
-
200
-
-
200
15,698
41,117
(2,170)
(881)
53,764
(2,858)
359
51,265
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
2023
$'000
2022
$'000
6,002
2,339
7,680
13,224
29,245
2,393
2,400
3,582
8,375
6,002
2,339
7,680
12,979
29,000
2,393
2,400
3,517
8,310
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 2024 financial year.
The FY2024 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 2023 base cashflows and are consistent with forecasts included
in industry reports specific to the industry in which each CGU operates.
42
43
43
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 15. Intangible assets (continued)
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
%
2.0%
2.5%
11.6%
Tyres and
wheels
%
2.0%
2.0%
13.3%
2023
Black Rubber
Carter’s
%
%
2.0%
2.5%
15.4%
2.0%
2.5%
14.6%
2022
Black Rubber
Carter’s
%
%
2.0%
2.0%
14.1%
2.0%
2.0%
15.8%
OE
%
2.0%
2.5%
15.7%
OE
%
2.0%
2.0%
15.3%
Average annual growth rate (%)
Terminal growth rate (%)
Pre-tax discount rate (%)
Average annual growth rate (%)
Terminal growth rate (%)
Pre-tax discount rate (%)
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 2024 financial year is based
on the cashflow budgets, past performance and management’s expectations of market development.
Terminal growth rate was based on the 2024 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 2023 and 2022 financial years, as follows:
• Average annual growth rates – reduction
• No impairment in any CGU.
by 1%
Terminal growth rate – reduction by 1%
•
• Discount rate – increase by 1%
• No impairment in any CGU.
• No impairment in any CGU.
44
44
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
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.
2023
$'000
2022
$'000
61,286
19,169
2,600
58,954
24,691
2,600
83,055
86,245
-
-
2,600
2,600
461
4,500
4,961
3,050
4,500
7,550
88,285
88,244
88,285
88,244
461
92,785
3,050
92,744
93,246
95,794
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 t/a Tyrelife Solutions (“TLS”). The total value of TLS’ assets as at 30 June 2023 is $10,430,000.
Compliance with loan covenants
The Group has complied with the financial covenants of its borrowing facility during the 2023 and 2022 reporting period.
44
45
45
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 17. Borrowings (continued)
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
2023
$'000
2022
$'000
2,961
101,750
10,000
114,711
461
94,298
8,277
103,036
3,514
104,000
10,000
117,514
3,050
94,718
8,305
106,073
2,500
7,452
1,723
11,675
464
9,282
1,695
11,441
46
46
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 18. Lease liabilities
Current
Property leases
Equipment leases
Motor vehicle leases
Non-current
Property leases
Equipment leases
Motor vehicle leases
2023
$'000
14,438
265
1,199
2022
$'000
14,655
301
1,060
15,902
16,016
48,213
320
2,467
48,355
272
2,954
51,000
51,581
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
63
10
60
0.1 – 9.7
0.1 – 4.3
0.4 – 6.8
3.0
2.2
2.7
49
-
-
-
1
31
39
-
-
-
-
-
The total cash outflow for leases in the 2023 financial year was $19,881,000 (2022: $15,160,000).
46
47
47
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 19. Provisions
Current
Employee benefits
Warranties
Make-good
Non-current
Employee benefits
Warranties
Make-good
2023
$'000
10,504
716
119
2022
$'000
12,089
754
395
11,339
13,238
641
822
787
836
861
350
2,250
2,047
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
48
48
2023
$'000
1,615
689
(766)
1,538
745
435
(273)
907
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 20. Issued capital
2023
Shares
2022
Shares
2023
$'000
2022
$'000
Ordinary shares - fully paid
133,271,318
131,936,002
94,068
93,122
Movements in ordinary share capital
Details
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
Date
Shares
Issue price
$'000
1 Jul 2021
114,294,863
15 Oct 2021
2 Nov 2021
188,447
1,071,430
21 Dec 2021
7 Jan 2022
6,666,666
1,394,222
$1.0900
$1.1200
$1.3500
$1.4300
70,204
205
1,200
8,507
1,882
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
Shares issued per Dividend Reinvestment Plan
Redemption of share options (note 24)
Redemption of share options (note 24)
7 Oct 2022
14 Oct 2022
22 June 2023
1,286,312
29,752
19,252
$0.7200
$0.3735
$0.3735
Balance
30 June 2023
133,271,318
93,122
926
10
10
94,068
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 2022 Annual Report.
48
49
49
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 21. Reserves
Foreign currency translation reserve
Share-based payments reserve
2023
$'000
(2,722)
1,629
2022
$'000
(3,027)
920
(1,093).
(2,107).
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 for the year ended 30 June 2022 (2022: 30 June 2021) of 1.50 cents (2022: 5.00
cents) per ordinary share
Interim dividend for the year ended 30 June 2023 (2022: 30 June 2022) of $nil (2022: 3.00
cents) per ordinary share
1,981
-
1,981
5,715
3,950
9,665
Refer to note 20 for details of shares issued pursuant to the Company's Dividend Reinvestment Plan during the 2023 financial year.
At the date of signing these financial statements, there has been no dividend’s declared by the Company and no dividend’s
payable.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
19,027
19,364
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.
50
50
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
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/asset
Decrease/(increase) in deferred tax liabilities
2023
$'000
2,895
24,040
729
358
39
2,063
1,370
(2,522)
1,042
(3,190)
(2,097)
1,337
(1,892)
2022
$'000
9,569
20,904
684
487
(299)
(2,041)
3,738
(12,448)
(424)
(5,506)
(837)
(4,139)
2,149
Net cash from operating activities
24,172
11,837
Liabilities from financing activities: Borrowings and Lease liabilities
Balance at the start of the year
Net cash flows
Recognition of lease liabilities
Derecognition of 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)
160,341
(16,982)
21,036
(4,980)
-
272
78,408
34,692
32,109
-
15,829
(697)
159,687
160,341
50
51
51
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
52
52
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
52
53
53
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 24. Share-based payments (continued)
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.
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.
54
54
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 24. Share-based payments (continued)
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.
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.
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.
The Rules of the ESOP allow participants to utilise a cashless exercise facility where a Participant can set-off the Exercise Price
against the number of shares which the participant is entitled to receive upon exercise of the participant’s options. By using the
cashless exercise facility, the participant will receive shares to the value of the surplus after the exercise price has been set-off. If
a participant elects to use the cashless exercise facility, the participant will only be issued that number of shares (rounded down
to the nearest whole number) as are equal to the value of the difference between the exercise price otherwise payable for the
options and the then market value of the shares at the time of exercise (which is determined as the volume weighted average
price of Shares on the ASX over the five trading days prior to exercise).
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).
54
55
55
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 24. Share-based payments (continued)
Set out below are summaries of outstanding options granted on 8 November 2019, 25 February 2021 and 24 September 2021 and
outstanding rights granted on 17 December 2021:
2023
Grant date
Expiry date
Exercise
price
Balance at
start of year
Granted
Lapsed
Exercised1
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
1,125,802
240,000
1,680,000
1,775,000
4,820,802
-
-
-
-
-
(123,438)
(80,000)
-
-
-
-
-
(140,000)
Balance at
end of year
1,002,364
160,000
1,680,000
1,635,000
(203,438)
(140,000)
4,477,364
1 During FY2023 and in accordance with the terms, 140,000 options were exercised by two option holders, 70,000 each. As a result, 90,996 options were net settled and the
remaining 49,004 options were converted into ordinary shares. This resulted in a lower dilution of the issued capital of the Company on conversion. The weighted average share
price at the date of exercise of Options during FY2023 was $0.5975 (FY2022: not applicable).
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)
-
-
At 30 June 2023, 1,635,000 options were exercisable at an exercise price of $0.3735 (2022: nil).
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
The weighted average remaining contractual life of rights and options outstanding at the end of the financial year was 1.91 years
(2022: 3.12 years). The weighted average exercise price of the rights and options outstanding at the end of the financial year was
$0.3725 (2022: $0.3663). 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.
56
56
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 24. Share-based payments (continued)
• 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 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.
56
57
57
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 24. Share-based payments (continued)
Valuation model inputs
The valuation model inputs used to determine the fair value at the grant date for the rights and options below, 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
30/09/2026
30/09/2025
$1.4300
$1.1200
$0.0000
$0.5745
56.90%
58.10%
5.59%
7.14%
1.00%
0.02%
$1.2236
$0.5635
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.
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
2023
$'000
729
729
2,895
436
3,331
2022
$'000
684
684
9,569
(171)
9,398
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Weighted number of Options over ordinary shares
132,898,616
122,775,176
4,553,098
4,071,326
Weighted average number of ordinary shares used in calculating diluted earnings per share
137,451,714
126,846,502
Basic earnings per share
Diluted earnings per share
Cents
2.51
2.42
Cents
7.65
7.41
58
58
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 26. Key management personnel disclosures
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short-term benefits1
Post-employment benefits
Long-term benefits
Share-based payments
2023
$
1,575,894
89,802
63,713
208,985
2022
$
1,638,236
117,781
61,674
210,231
1,938,394
2,027,922
1 The Group engaged in consulting services from a KMP member. Consulting fees for FY2023 totalled $102,773 (2022: $nil), with $29,700 outstanding at 30 June 2023 (2022: $nil).
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 remuneration are set out in note 26.
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 Ludemann1
J Lamb2
C Skead3
Balance at
the start of
the year
-
-
-
-
350,000
320,000
305,000
Ceased to be
KMP
Granted /
Lapsed
Exercised
-
-
-
-
-
-
(305,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
975,000
(305,000)
Balance at
the end of
the year
-
-
-
-
350,000
320,000
-
670,000
1 On 30 September 2022, 180,000 options which were granted on 8 November 2019 had vested. These remain exercisable at 30 June 2023 and at the date of this report.
2 On 30 September 2022, 160,000 options which were granted on 8 November 2019 had vested. These remain exercisable at 30 June 2023 and at the date of this report.
3 No longer classified as key management personnel effective 1 July 2022.
58
59
59
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 27. Related party transactions (continued)
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
Rights
M Boyte
T Smith
B Cook
R Kent
P Ludemann
J Lamb
C Skead1
Balance at
the start of
the year
-
-
-
-
228,590
114,295
114,295
Ceased to be
KMP
Granted /
Lapsed
Exercised
-
-
-
-
-
-
(114,295)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year
-
-
-
-
228,590
114,295
-
342,885
457,180
(114,295)
1 No longer classified as key management personnel effective 1 July 2022.
All Rights on issue remain unvested as at 30 June 2023.
Transactions with related parties
During the reporting period, the Group leased business premises from a KMP member. The lease expires on 28 February 2025
with no renewal options. Rent payments for FY2023 totalled $276,276 (2022: $92,092), with $nil outstanding at 30 June 2023
(2022: $nil.)
The Group also engaged in consulting services of $102,773 from a KMP member which has been included as part of the FY2023
short term benefits disclosed in note 26 (2022: $nil).
Receivable from and payable to related parties
There were no trade receivables from related parties at the current reporting date (2022: $nil).
Loans to/from related parties
At 30 June 2023 and 30 June 2022, there were no loans to and/or from related parties.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
60
60
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents (a)
Trade and other receivables (a)
Other financial assets (a)(b)
Financial liabilities
Trade and other payables (c)
Borrowings (c)
Lease liabilities (c)
Note
9
10
12
16
17
18
2023
$‘000
33,040
76,743
3,093
112,876
82,672
93,246
67,285
243,203
2022
$‘000
35,826
78,472
2,063
116,361
88,845
95,794
67,597
252,236
(a) Financial assets at amortised cost
(b) Forward foreign exchange contract assets at fair value through profit and loss
(c) Other financial liabilities at amortised cost
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.
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.
60
61
61
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 28. Financial instruments (continued)
At 30 June 2023, the Group had forward foreign exchange contracts to acquire USD $25,916,000 (2022: USD $19,141,000). These
are due to mature within 4 months of balance date. The fixed exchange rates on these contracts ranged from 0.6078 to 0.6800
(2022: 0.6891 to 0.7718).
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)
2023
USD
2022
USD
2023
$’000
10
(34,761)
271
2022
$’000
237
(25,324)
1,336
(34,480)
(23,751)
AUD weakened
Effect on
profit before
tax
Effect on
equity
AUD strengthened
Effect on
profit before
tax
% change
Effect on
equity
% change
10%
3,135
2,194
10%
(3,831)
(2,682)
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)
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 2023 was $1,989,000 (2022: loss
of $1,455,000).
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.
As at the reporting date, the Group had the following variable rate borrowings outstanding:
Bank overdraft
Bank facility
2023
$'000
461
93,117
2022
$'000
3,050
93,325
Net exposure to cash flow interest rate risk
93,578
96,375
62
62
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
Note 28. Financial instruments (continued)
An analysis by remaining contractual maturities in shown in 'liquidity risk below.
The outstanding bank facility at 30 June 2023, totalling $93,117,000, is comprised of a trade finance facility ($68,367,000) and a
loan ($24,750,000) (2022: $93,325,000 bank facility). An official increase/decrease in interest rates of 100 (2022: 100) basis points
would have an adverse/favourable effect on profit before tax of $928,000 (2022: $933,000) 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 (2022: $4,500,000) are due during the subsequent 12-month period.
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+.
Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract to meet their
obligations. The credit risk exposure to forward exchange contracts is the net fair value of these contracts.
The credit risk for net investment in leases relates to the ability of the lessee to pay the contractual cash flows stipulated within
the lease.
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
2023
$'000
2,500
7,452
1,723
2022
$'000
464
9,282
1,695
11,675
11,441
62
63
63
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 3.02 years (2022: 4.26 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.
2023
$'000
$'000
$'000
$'000
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
$'000
80,455
2,600
461
92,785
271
271
Remaining
contractual
maturities
$'000
83,645
5,200
3,050
93,325
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
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
80,455
2,600
461
4,500
-
-
-
-
-
4,500
-
83,785
-
-
-
-
16,758
104,774
14,461
18,961
27,133
110,918
13,786
13,786
72,138
248,439
Derivatives
Forward foreign exchange contracts net
settled
Total derivatives
271
271
-
-
-
-
-
-
2022
$'000
$'000
$'000
$'000
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
83,645
2,600
3,050
4,500
-
2,600
-
4,500
-
-
-
84,325
-
-
-
-
18,819
112,614
15,999
23,099
28,793
113,118
11,273
11,273
74,884
260,104
Derivatives
Forward foreign exchange contracts net
settled
Total derivatives
1,336
1,336
-
-
-
-
-
-
1,336
1,336
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
64
64
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
2023
Forward foreign exchange contracts - derivatives
Total assets
2022
Forward foreign exchange contracts - derivatives
Total assets
Level 1
$'000
-
-
Level 1
$'000
-
-
Level 2
$'000
271
271
Level 2
$'000
1,336
1,336
Level 3
$'000
-
-
Level 3
$'000
-
-
Total
$'000
271
271
Total
$'000
1,336
1,336
There were no transfers between levels during the financial year.
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 and the borrowings are at variable 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
2023
There were no business combinations during the 2023 financial year.
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 FY2022 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 FY2022 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.
64
65
65
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 FY2022 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 FY2022 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.
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
66
66
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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.
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
2023
$
2022
$
350,000
369,035
-
36,670
100,250
58,785
36,670
159,035
Total remuneration of services provided by Pitcher Partners
386,670
528,070
Audit services - network firms
Audit or review of the financial statements
Other services - network firms
Transaction services
Tax compliance services
Total remuneration of services provided by Pitcher Partner’s
network firms
Note 32. Contingent liabilities
8,565
16,323
-
22,809
116,723
50,436
22,809
167,159
31,374
183,482
The Group has given bank guarantees as at 30 June 2023 of $8,277,000 (2022: $9,269,000) to various landlords and suppliers for
standby letters of credit.
67
67
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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:
Ownership interest
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
Black Rubber Pty Ltd
Black Rubber Sydney Pty Ltd
Solid Plus Operations Pty Ltd
NTAW Logistics 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
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
South Africa
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
68
68
2023
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
2022
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
Parent Entity
2023
$’000
295
295
2022
$’000
8,372
8,372
7,617
5,372
198,367
204,899
5,771
11,116
95,254
103,559
94,068
1,629
7,416
93,122
920
7,298
103,113
101,340
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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 2023 and 30 June 2022. Refer
to note 35.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
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;
Integrated OE Pty Ltd;
Statewide Tyre Distribution Pty Ltd;
Tyres4U Pty Ltd;
Tyreright Operations Pty Ltd;
• National Tyre & Wheel Limited;
•
•
• Dynamic Wheel Co. Pty Limited;
•
•
•
•
• Black Rubber Pty Ltd;
• Black Rubber Sydney Pty Ltd;
•
Solid Plus Operations Pty Ltd;
• NTAW Logistics Pty Ltd;
• NTAW Holdings (NZ) Ltd (not party to the deed in the prior year);
•
•
•
•
Tyres4U (NZ) Ltd (not party to the deed in the prior year);
Carters Tyre Service Limited (not party to the deed in the prior year);
C.O. Tire & Retreading Co Limited (not party to the deed in the prior year); and
Tyre Distributors New Zealand Limited (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'.
69
69
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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'.
Closed Group
Statement of profit or loss and other comprehensive income
Revenue
Other income
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
2023
$'000
572,535
327
(409,917)
(83,365)
(23,991)
(7,714)
(6,655)
(6,598)
(4,786)
(4,004)
(2,084)
(10,672)
(8,349)
4,727
(960)
3,767
856
856
4,623
15,897
3,767
(1,981)
3,240
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)
6,024
(2,634)
3,390
(194)
(194)
3,196
21,405
3,390
(9,665)
767
Retained earnings at the end of the financial year
20,923
15,897
70
70
Notes to the financial statements 30 June 2023
National Tyre & Wheel Limited and its controlled entities
Notes to the financial statements
30 June 2023
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
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
2023
$'000
2022
$'000
32,681
75,153
121,688
1,537
4,094
-
235,153
16,468
61,210
51,265
5,712
134,655
26,071
67,653
100,268
1,287
3,373
1,731
200,383
11,477
52,227
34,587
56,965
155,256
369,808
355,639
77,348
4,500
15,895
11,265
129
109,137
-
88,285
51,000
2,250
3,837
145,372
77,795
6,537
11,963
11,471
-
107,766
2,600
88,244
42,481
2,047
2,893
138,265
254,509
246,031
115,299
109,608
94,068
308
20,923
93,122
589
15,897
115,299
109,608
Note 36. Events after the reporting period
No matter or circumstance has arisen since 30 June 2023 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.
71
71
Notes to the financial statements 30 June 2023
Directors’ declaration
National Tyre & Wheel Limited and its controlled entities
Directors' declaration
30 June 2023
In the directors' opinion:
30 June 2023
•
•
•
•
•
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 2023
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
29 August 2023
Brisbane
72
7272
Notes to the financial statements 30 June 2023
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 2023, 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 2023 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.
7272
73
73
73
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
EDWARD FLETCHER
ROBERT HUGHES
Key Audit Matter
Impairment of goodwill and separately identifiable intangible assets
How our audit addressed the key audit matter
Refer to Note 15: Intangible assets
As part of business combinations completed
during prior years, the Group recognised
goodwill and other intangible assets valued at
$29.245 million and $22.020 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 the design and
implementation of 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 2024 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 directors’ report for the year ended 30 June 2023, 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.
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
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.
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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.
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 to 18 of the directors’ report for the
year ended 30 June 2023. In our opinion, the Remuneration Report of National Tyre & Wheel Limited,
for the year ended 30 June 2023, 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
ANDREW ROBIN
Partner
Brisbane, Queensland
29 August 2023
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.
76
Shareholder information
National Tyre & Wheel Limited and its controlled entities
Shareholder information
30 June 2023
The shareholder information set out below was applicable as at 15 August 2023.
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)
Strategic Value Pty Ltd (Tal Super A/C)
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP)
Mr Roshan Charles Chelvaratnam
Mr John Peter Ludemann
J P Morgan Nominees Australia Pty Limited
SCJ Pty Limited (Jermyn Family A/C)
National Nominees Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Exldata Pty Ltd
Narlack Pty Ltd (Piperoglou Pension A/C)
Exldata Pty Ltd
Mr Stephen Criag Jermyn (Jermyn Family S/Fund A/C)
G R Hari Trustee Limited & Garry Paul Carter & Robynn Janet Carter
Micpip Nominees Pty Ltd (Micpip Super Fund A/C)
Mrs Christine Lorraine Hummer
Mr Christopher John Hummer
30 June 2023
Number
of holders
of ordinary
shares
% of total
shares
issued
279
536
304
561
116
1,796
189
0.1
1.1
1.8
13.4
83.6
100.0
0.0
Ordinary shares
Number held
% of total
shares
issued
27,307,594
10,697,389
10,023,791
5,201,332
3,451,507
3,201,034
2,643,884
2,515,867
2,500,000
2,343,000
2,178,119
1,960,755
1,699,788
1,637,114
1,507,735
1,500,000
1,394,222
1,221,219
1,071,152
1,048,928
20.49
8.03
7.52
3.90
2.59
2.40
1.98
1.89
1.88
1.76
1.63
1.47
1.28
1.23
1.13
1.13
1.05
0.92
0.80
0.79
85,104,430
63.87
76
77
77
Notes to the financial statements 30 June 2023
Shareholder information
National Tyre & Wheel Limited and its controlled entities
Shareholder information
30 June 2023
30 June 2023
Unquoted equity securities
There are 3,475,000 unquoted unissued ordinary shares of National Tyre & Wheel Limited under option at the date of this report.
There are 1,002,364 unquoted rights to unissued ordinary shares of National Tyre & Wheel Limited at the date of this report.
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
Number held
% of total
shares
issued
ST Corso Pty Ltd atf the Smith Trading Trust, Terence Smith & Susanne Smith (together Smith
Group)
EM Australia 2021 Pty Ltd (TWA A/C)
Anthony Young
Sandhurst Trustees Ltd (Collins St Value Fund A/C)
Ryan Young
27,891,171
20.93
10,697,389
10,341,891
10,023,791
8,725,225
8.03
7.76
7.52
6.55
Voting rights
The voting rights attached to ordinary shares are 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.
There are no equity securities subject to voluntary escrow at the date of this report.
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National Tyre & Wheel Limited and its controlled entities
Corporate directory
30 June 2023
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 3
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://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://ntaw.com.au/investors-asx-announcements/corporate-governance
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Corporate directory 30 June 2023