2021
Annual
Report
Value every journey
SG FL EE T G R O U P L IMI T ED
A B N 4 0 167 5 5 4 574
SG Fleet is a
leading provider
of integrated
mobility solutions
Contents
IFC
About
SG Fleet
Group
10
Chairman’s
report
15
Directors’
report
34
Financial
report
92
Corporate
directory
04
Sustainability
statement
11
CEO’s report
33
Auditor’s
independence
declaration
90
Shareholder
information
Our Purpose
To be the leading provider of mobility
solutions in our chosen markets.
We offer highly efficient, and socially, environmentally and ethically
responsible products and services to meet our customers’ mobility needs.
About SG Fleet Group
SG Fleet Group Limited is a leading provider of integrated mobility solutions, including fleet
management, vehicle leasing and salary packaging services.
SG Fleet has a presence across Australia, as well as in New Zealand and the United Kingdom.
The company employs over 700 staff worldwide and has approximately 140,000 vehicles
under management. SG Fleet listed on the Australian Securities Exchange in March 2014.
The company has a unique position in the marketplace, built on the experience and product
expertise of its team, its innovation capability, and a customer-centric approach to service delivery.
SG Fleet actively contributes to the global discussion about the future of transport and is shaping
the new mobility landscape in cooperation with all levels of government, as well as leading
corporates. SG Fleet continuously evolves its highly advanced fleet management capabilities
and flexible mobility solutions, and selectively invests in new technologies and business models
that are changing the way we move.
In the 2021 financial year, the company stepped up its involvement in the move towards lower
emission mobility, driving the adoption of hybrid and electric vehicles (EVs) across fleets in Australia,
New Zealand and the UK, and participating in a number of ground-breaking projects.
At the forefront of innovation
1
An innovative mindset is core to SG Fleet’s recognised ability
to continuously add value for its customers.
SG Fleet was
instrumental in the
early introduction
of hydrogen, or
fuel cell, electric
vehicles (FCEVs).
During the 2021 financial year, the
company partnered with Hyundai
Motors to register and manage the
first hydrogen fleet in Australia for
the ACT Government.
FCEVs are expected to become
an integral part of Australia’s
longer-term fleet landscape,
including for commercial transport
purposes. As the country’s first
hydrogen fleet manager, SG Fleet
has again demonstrated its ability to
lead the way in the development and
adoption of cutting-edge technologies.
Adding value for
customers relies on the
ability to develop a clear
vision for the future of
mobility and translate that
vision into solutions that
will cater to needs that
are yet to fully emerge.
SG Fleet’s approach to this process is
best demonstrated by its involvement
in the REVS project, which investigates
how EVs can contribute to energy
stability by transferring power back
and forth into the electricity grid
(vehicle-to-grid or V2G). The use of
EVs for this purpose may unlock
economic benefits and make the
vehicles a more viable and appealing
option for fleet operators. SG Fleet is
the exclusive mobility solutions provider
in the REVS project, which received
funding from the Australian Renewable
Energy Agency (ARENA) and is due to
complete in 2022.
In 2015, SG Fleet set
out to play a leading role
in developing a more
efficient and therefore a
more socially responsible
solution for integrated
mobility needs.
In the 2021 financial year, SG Fleet
continued to evolve a number of the
tech solutions it developed in-house to
achieve this goal, moving towards the
provision of Mobility-as-a-Service.
Spurred on by developments across
the globe, 2021 was the year in which
Low Emission Vehicles (LEVs) became
front of mind more than ever. As an
innovator, SG Fleet recognised the
need for a solution that would facilitate
their adoption, launching its eStart Zero
Emission Vehicle Transition Planning
service in 2019. Since then, eStart
has helped numerous corporate and
government organisations map out
and implement a road towards an
environmentally responsible approach
to transport. eStart is now recognised
as a benchmark-setting solution in all
of SG Fleet’s markets.
Fleetintelligence Bookingintelligence
TradeAdvantage
2021 Annual Report 2
A year in numbers
Financial
$198.2m
Net Revenue
$51.6m
NPAT 1
15.0%
41.8%
12.585cps
Dividend
25.9%
Operational
138,797
vehicles under management2
47%
increase in number of low
emission vehicles managed3
1.2 million+
Bookingintelligence
transactions
1 billion+
kilometres travelled by
managed fleet
52.7
NPS Score4
1 Underlying
2 Group
3 AU/NZ
4 AU Novated – 11/2020
320,000+
repairs managed
87%
of fuel card orders via
Robotic Process Automation
SG Fleet Group Limited Creating long-term value for all
3
SG Fleet aims to create long-term value for all of its stakeholders by
applying its strengths to the disciplined execution of a well-defined
strategy across its chosen markets.
Our Strengths
We have successfully
established a unique
market position
Unrivalled
expertise
Innovative
mindset
Customer-
centricity
What we do
We are a leading
provider in all of our
operational segments
Fleet
management
Vehicle
leasing
Employee
benefits
SG Fleet offers a full
range of tailored fleet
management solutions
for corporate and
government customers.
SG Fleet can advise on
the most appropriate
fleet funding for
your business or
organisation.
SG Fleet is a preferred
employee benefits
provider in Australia and
the United Kingdom.
Our Stakeholders
Our People
Customers
Partners
Shareholders
Community
Our commitment
Our people are our
most valued resource.
We commit to providing
a safe, nurturing
and rewarding work
environment, in which
our staff can grow their
skills and their careers.
Our commitment
A strong customer
focus is one of the
defining characteristics
of our company.
We commit to
continuously pursuing
further improvements
in the way we deliver
for our customers.
Our commitment
We believe that our
service performance
relies on strong
partnerships. We
commit to building
mutually-beneficial
relationships with our
partners, based on
efficiency, respect
and trust.
Our commitment
Investors provide us
with the necessary
capital to grow our
business. We commit to
pursue the creation of
sustainable, long-term
performance and
returns for our
shareholders.
Our commitment
We recognise that we
are given the social
license to operate from
the communities in
which we are based.
We commit to reward
that trust by giving back
wherever possible.
2021 Annual Report 4
Sustainability statement
SG Fleet’s approach to long-term value creation
for all of its stakeholders is driven by the principle
that industry-leading environmental, social and
governance behaviours should be integrated into
daily business practices.
SG Fleet established a Sustainability Committee, governed by a Charter,
in 2019. Our aim is to move towards an Integrated Reporting approach ahead
of the introduction of relevant regulation.
The company determines its sustainability reporting categories by considering
the nature of its business operations, which are predominantly the provision
of services in an office-based environment. These categories are then
cross-referenced against globally recommended reporting standards as
set out by a number of international bodies, including the Global Reporting
Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
The 2021 Sustainability Statement outlines the relevant actions taken by
the company during the 2021 financial year.
Environment
SG Fleet ensures its day-to-day
operations minimise resource
consumption, waste and emissions.
In addition, we work with our customers
and business partners to assist
them with their environmental impact
reduction initiatives.
Minimising our environmental impact
The company is targeting a significant reduction
in its environmental impact across a number of
measures, including energy efficiency, waste
management, and reduction in CO2 emissions.
Key Highlights
ISO27001
standards framework
implementation
28%
reduction Scope 1
and 2 CO2 emissions
UN Global
Compact
signatory
During the 2021 financial year, we transitioned
all office lighting in our Australian offices
to LED. This resulted in a 70% reduction
of lighting-related electricity consumption,
or a 14% net reduction in energy
consumption overall.
In order to reduce the use of consumables,
measures were introduced to significantly lower
the amount of printing and promote the use of
handheld devices in meetings. This resulted in
a 30% reduction in paper usage, equivalent to
ca. 4 tonnes of CO2 emissions.
SG Fleet Group Limited As SG Fleet does not produce meaningful
levels of CO2 in its day-to-day business
operations, our reduction efforts have
primarily targeted emissions related to travel.
During the 2021 financial year, air travel was
reduced by 90%, equating to a reduction in
CO2 emissions by about 250 tonnes. Road
mileage by our staff (excluding commuting)
was reduced by 20% during the year, a further
reduction of CO2 emission by approximately
77 tonnes. Where motor travel is essential,
we are proactively increasing the proportion
of low or zero-emission vehicles in our own
fleet. Currently, 12% of our own fleet uses
lower emission propulsion technology.
This percentage is increasing rapidly as
we replace older vehicles. Overall, we
achieved a 28% reduction in Scope 1 and 2
emissions during the 2021 financial year.
Future Focus
SG Fleet is significantly stepping up its
environmental initiatives for future years.
In the 2022 financial year, we will introduce
our Australian Environmental Impact and
Performance Policy, which will further
structure our efforts in this area and set
clear targets for reductions in energy and
consumables usage, and CO2 emissions.
This policy will complement the existing UK
Environmental Policy. It is our intention to
achieve certified carbon neutrality for our
Australian business, which accounts for
three quarters of our group revenues, for the
full financial period. Separately, we will also
explore further options for recycled waste
collection across our offices.
2021 Annual Report
55
“We view it as our
duty to deploy our
knowledge and help
others reduce the
impact of their transport
activities and make a
positive contribution
to the environment.”
327 tonnes
reduction in air and road
travel-related CO2 emissions
Helping our customers minimise
their environmental impact
Vehicle expertise is SG Fleet’s lifeblood.
We view it as our duty to deploy our knowledge
and help others reduce the impact of their
transport activities and make a positive
contribution to the environment. We were one
of the first providers to recognise the positive
potential of lower emission vehicles in a fleet
context and launched our eStart Zero Emission
Vehicle Transition Planning service a number of
years ago. As a result of our ability to plan and
execute the transition from internal combustion
to lower emission vehicles for our customers’
fleets, we have seen a sharp rise in the use
of more environmentally friendly transport
solutions across the fleets we manage. At the
end of the 2021 financial year, we achieved a
47% year-on-year increase in the number of low
emission vehicles managed in our Australian
and New Zealand fleets. In our novated
business, we also offer drivers the possibility
to carbon-offset their own vehicle.
Future Focus
Encouraged by the rapid increase in EV
interest, SG Fleet has put in place a group
EV strategy, and is the lead-contributor to
an industry whitepaper, to further promote
take-up of zero emission vehicles amongst its
customers as well as in the wider community.
Encouraging and supporting our business
partners’ environmental initiatives
We offer our customers our unique expertise
and services just as we rely on the specific skill
sets of our business partners. We share with
them the desire to operate in a responsible and
ethical fashion and this extends to environmental
practices. For this reason, we ask all our
preferred suppliers to develop and submit their
strategies and initiatives to reduce emissions.
2021 Annual Report
6
“Safety is an important
aspect of transport
and mobility, and many
of our solutions are
specifically targeted
at protecting our
customers’ wellbeing.”
Social
SG Fleet respects and seeks to further
the interests of its customers, its
employees and the wider communities
in which we operate. Our culture is
one of respect, care and responsibility,
and we aim to instil these values in all
our interactions with every individual,
as well as with community groups.
Protecting customer privacy and
ensuring data security
To be able to create value for its customers
and conduct its business in an efficient
manner, SG Fleet needs to collect and process
certain personal and business information.
The way we collect, use and retain this
information is governed by strict protocols
and detailed processes.
SG Fleet complies with all applicable privacy
laws in each jurisdiction in which we operate
(Australia, the United Kingdom and New
Zealand) and processes customer information
in accordance with our privacy policies.
These policies are available to the public online.
The SG Fleet Group Personal Data Protection
Policy sets out how we protect the personal
data we collect.
The hosting and management of data, including
Disaster Recovery services and infrastructure
management, is supported by external providers
that hold all required certification. As an extra
layer of protection, a Security Operations
Centre provides 24/7 monitoring of the data
environment and can alert the company to
any cyber security threats. Formal Disaster
Recovery and Business Continuity Plan policies
are in place and tested on a regular basis.
Penetration testing is also conducted on a
regular basis by an independent provider.
The day-to-day management of the data
environment involves standard safety processes
such as encryption, two-factor authentication
for remote access, geo-blocking to limit network
access and multiple threat-detection layers.
The awareness of the importance of customer
privacy and the need for secure handling of data
is reinforced at the individual employee level
through regular staff updates and continuous
training via our e-learning portal.
Relevant modules include:
• Electronic communication
• Privacy awareness
• Cyber security awareness
• Email phishing awareness
Future Focus
Further enhancements of SG Fleet’s
relevant processes will be introduced as
the cyber security environment continues
to evolve. Currently, we are in the
process of implementing the ISO27001
framework across the SG Fleet group,
with full certification expected early in
the 2022 financial year.
Focusing on our customers’
satisfaction and safety
SG Fleet thrives as a business because we are
able to create value for our customers. We aim
to understand our customers’ needs and how
those needs evolve. Our innovative thinking
also ensures we are able to anticipate future
needs, develop solutions and bring them to
market rapidly. To this process we then apply
a second layer of value-add, made possible by
the ability to create flexible, tailor-made solutions
addressing specific needs of our customers.
Feedback is invaluable to us and we ensure this
information is collected and analysed to further
improve how we deliver for our customers.
We utilise Net Promoter Scores to track how we
are doing. For the majority of the 2021 financial
year, our NPS scores were near the 50 mark,
a sign of strong customer satisfaction.
In addition to service delivery excellence, the
quality of our products and solutions is the
cornerstone of our reputation as a leader in
our field. Before we bring new products to
market, a lengthy assessment and development
process is conducted to ensure these products
deliver on our promise to help improve how our
customers move.
Safety is an important aspect of transport
and mobility, and many of our solutions are
specifically targeted at protecting our customers’
wellbeing. We provide the ability to monitor
driver behaviour and offer driver safety training
to correct driving techniques. Reinforcing a
responsible approach to sharing the roads in
this way not only protects our customers but
all members of the public.
SG Fleet’s Inspect365 is Australia’s most
complete safety inspection solution for heavy
vehicles. It helps our customers improve
inspections and manage their compliance
responsibilities. Inspect365’s ‘closed loop’
system provides an objective record of actions
taken, which is a critical part of ensuring
vehicle safety and demonstrating compliance.
This safety focus is embedded in all the
services we offer.
SG Fleet Group Limited
7
“SG Fleet celebrates
the diverse range of
cultural backgrounds
and experiences of
its employees and is
committed to providing
equal employment
opportunities and a
work environment that
is free from harassment,
discrimination and
workplace bullying.”
As a part of SG Fleet’s recruitment process,
vacancies are evaluated for their suitability
for flexible work arrangements and for
arrangements other than full time.
Around 12% of employees are currently
accessing formal flexible work arrangements
including part-time work. This excludes informal
team-based flexibility. Requests for formal
flexibility within the financial year fluctuated
in line with the prevalence of remote working
environments resulting from COVID-19 response
measures. Eligible employees continue to
be able to participate in a ‘Purchase Annual
Leave’ program to assist with balancing family
commitments. Employer-funded paternal leave
was introduced in the previous financial year.
Safety in the workplace is of paramount
importance to SG Fleet. In addition to providing
our staff with a healthy work environment, we
conduct regular e-training on a range of topics
that can impact their wellbeing.
These modules include:
• Sexual harassment prevention
• WH&S awareness
• Workplace bullying and occupational
violence
• Discrimination and Equal Employment
Opportunity
In the previous financial year, we also introduced
a Group Exposure Control Policy and a
COVID-19 awareness e-learning module.
In addition to risk mitigation education, we
encourage our staff to proactively look after their
physical and mental wellbeing. The company
provides access to a range of staff wellness
benefits and activities.
At SG Fleet, we believe that our solutions
must always be fit-for-purpose and meet
the specific requirements of our customers.
We take great care to fully understand their
needs and we make sure they are properly
informed about every aspect of our products.
Responsible selling practices are something
we will not compromise on. In offering a
product to a prospective customer, we provide
fully transparent and detailed information,
highlighting the range but also the limitations
of its capabilities.
Future Focus
SG Fleet’s unique in-house innovation
capability ensures we are able to create
and develop new products quickly and
efficiently. The company plans to bolster this
capability in future years as we continue to
broaden our products and services offering.
Supporting our people
SG Fleet’s business success is built on the
expertise of its people. We recognise the
importance of being an inclusive employer and
have a strong commitment to equal opportunity
and diversity, with a focus on gender diversity.
Diversity drives the company’s ability to attract,
retain and develop the best talent, create
an engaged workforce, deliver the highest
quality of service to customers, and achieve
sustainable growth.
SG Fleet celebrates the diverse range of
cultural backgrounds and experiences of its
employees and is committed to providing
equal employment opportunities and a work
environment that is free from harassment,
discrimination and workplace bullying.
The priority when recruiting is to ensure an
appropriate mix of experience, expertise, and
qualifications, regardless of age, nationality,
gender, sexuality, religious beliefs or
physical ability.
SG Fleet complies fully with the Workplace
Gender Equality Act (2012) and is a complying
employer with the Workplace Gender Equality
Agency. As at 30 June 2021, the Company’s
workforce was made up of 46% women and
54% men. During the 2021 financial year, there
was a 25% increase in female employees being
promoted to management positions. SG Fleet
continues its focus on the development of
female leaders with its Women and Leadership
Development Program.
2021 Annual Report
8
SG Fleet is committed to support the
continued growth of its people. We have a
reputation within the industry of developing
the best available talent and expertise. Our
staff are given access to internal and external
development opportunities, such as training
programs and courses.
The success of our initiatives to support our
people in their professional growth, workplace
wellbeing, and personal mental and physical
health, as well as our approach to supporting
staff through the COVID-19 pandemic, have
been reflected consistently in our engagement
measures. In our latest ‘pulse’ survey, our
people reported strong positive sentiments
around general wellbeing and resilience.
Our community involvement
SG Fleet has operations in Australia, New
Zealand and the United Kingdom. We interact
with local communities as a significant employer
and as a purchaser of goods and services.
However, we firmly believe that we have a
responsibility to the communities in which we
operate, as well as people elsewhere, to give
back and make a positive contribution in other
areas wherever we can.
SG Fleet supports a number of initiatives across
a wide range of areas. As a company, our
community contribution comes in the form of
financial support, and the provision of goods or
vehicles. Our people also contribute generously
by collecting donations or by volunteering in
their own communities or for charitable activities
of their choice. Wherever possible, we look to
deploy our mobility expertise to the advantage
of organisations or individuals who have
limited access to transport, or to support road
safety initiatives.
“We are a proud member
of Supply Nation, which
aims to promote and
support procurement
through indigenous
organisations and
create a more inclusive
economy, and we
currently source a
number of goods from
these businesses.”
30+
charitable causes
supported across
Australia, New Zealand,
and the United Kingdom
During the 2021 financial year, we supported
the following initiatives, amongst others:
In Australia
National
Road Safety
Week 2021
In New Zealand
In the United Kingdom
In Australia, SG Fleet is committed to furthering
the cause of Aboriginal and Torres Strait Islander
communities wherever possible. In addition to
offering employment opportunities, we are also
actively supporting their business ventures.
We are a proud member of Supply Nation, which
aims to promote and support procurement
through indigenous organisations and create a
more inclusive economy, and we currently source
a number of goods from these businesses.
Future Focus
We believe that supporting communities
starts with understanding their history,
their challenges and their strengths. With
respect to indigenous Australians, we
intend to introduce educational programs
at SG Fleet that will help us build the right
perspective amongst our leadership and our
people to develop an effective and impactful
Reconciliation Action Plan in the near future.
SG Fleet Group Limited
9
Modern Slavery Policy and Statements
SG Fleet does not tolerate any form of
enslavement or exploitation and we are
committed to ensure measures are in place
to minimise the risk of modern slavery in our
business and in our supply chain. The company
has voluntarily put in place a Modern Slavery
Policy, which outlines our overall approach
to combatting modern slavery. We also issue
Modern Slavery Statements overviewing
our initiatives during the respective reporting
periods in Australia (pursuant to the Modern
Slavery Act 2018 (Cth)) and the United Kingdom
(pursuant to the Modern Slavery Act 2015 (UK)).
UN Global Compact
During the 2021 financial year, SG Fleet became
a signatory to UN Global Compact. We are
committed to the UN Global Compact corporate
responsibility initiative and its principles in the
areas of human rights, labour, the environment
and anti-corruption.
“We are committed to
the UN Global Compact
corporate responsibility
initiative and its
principles in the areas
of human rights, labour,
the environment and
anti-corruption.”
Procurement practices
Voluntary introduction of
Modern
Slavery
Policy
We view it as our responsibility to promote
ethical behaviour not just within our business
operations, but also at supplier level. Across the
group, we take great care in selecting suppliers
of goods and services and we expect our
suppliers to operate to recognised national and
international standards, and appropriate codes
of practice.
In order to do so, we have put in place a
Supplier Code of Conduct and a Procurement
Policy. These policies set out the requirements
we set out for our suppliers in the areas of:
ethical business practice, anti-competitive
conduct, labour and human rights, work health
& safety, environment, and confidentiality and
provision of information.
Future Focus
SG Fleet intends to introduce further policies,
standards and processes to support its
environmental, social and governance
practices. In the 2022 financial year, we
will adopt, amongst others, the ISO 20400
Sustainable Procurement and ISO 26000
Social Responsibility standards.
Visit the Governance section of our
Investor Centre to read our Corporate
Governance Statement.
Governance
Across our organisation, we ensure
we adopt responsible business
practices and policies in all aspect
of our operations. As a listed
entity, SG Fleet Group Limited also
reports against the ASX Corporate
Governance Council’s Principles and
Recommendations (4th Edition) via
its Corporate Governance Statement.
This statement describes the rules,
systems and processes we have in
place to manage our company and
our operations in a responsible manner.
In addition to the requirements set out by the
ASX Corporate Governance Council, we have a
number of policies in place to instil and promote
ethical behaviour across the organisation,
as well as our supply chain. SG Fleet also
ensures its people are aware and observant
of these policies by conducting regular
e-learning sessions.
Code of Conduct
Our people are expected to conduct themselves
in a manner consistent with current community
and the company’s own standards, and in
compliance with all relevant legislation. The
Code of Conduct outlines how the company
expects its representatives to behave and
conduct business in the workplace on a range
of issues. It includes legal compliance and
guidelines on appropriate ethical standards.
Whistleblowing Policy
The Whistleblowing Policy is in place to
encourage our people to raise concerns and flag
reportable conduct where there are reasonable
grounds to support such actions. We are
committed to ensuring that serious misconduct
or malpractice is identified and addressed
appropriately.
Anti-bribery and Corruption Policy
SG Fleet prohibits bribery and corruption in
any form, whether direct or indirect, and in
any country in which it operates. We take
appropriate steps to ensure that we do not,
directly or indirectly, offer, promise, give, accept
or demand a bribe or other undue advantage in
order to obtain or retain business. The company
promotes employee awareness of, and
compliance with, company policies against
bribery and corruption through appropriate
dissemination of our own procedures, policies
and training programmes.
2021 Annual Report
10
Chairman’s
report
Dear Shareholder
I have the pleasure of presenting you with
the SG Fleet Group Limited Annual Report
for the year ended 30 June 2021.
“For many of our
customers, the 2021
financial year will be
remembered as a
period during which
SG Fleet was there to
help more than ever.”
Andrew Reitzer
Chairman
16 August 2021
Sydney
In the 2021 financial year, your Company has
operated in an environment that continued
to be influenced by the COVID-19 pandemic.
Throughout the period, the management team
and people across the organisation proved their
exceptional resilience by learning, adapting and
responding to the new and diverse challenges
faced by your Company and our customers.
Thanks to this team effort, we have been able
to maintain the progress made at the end of
the previous financial year and then improve
your Company’s fortunes further as the year
progressed. This allowed your Board to reinstate
the dividend payout ratio to its previous levels
at the end of the first period and declare a fully
franked final dividend of 5.393 cents per share,
bringing the total dividend for the 2021 financial
year to 12.585 cents per share.
While COVID-19 remained a factor, our focus
quickly turned to business as usual as we
developed the necessary processes to manage
disruptions in the workplace and in the supply
chain. However, the year was not just about
adversity. Our strong service focus allowed
your Company to step up to the task and help
our customers by being both aware of their
evolving needs and agile in how we responded
to them. For many of our customers, the 2021
financial year will be remembered as a period
during which SG Fleet was there to help more
than ever, a year in which we provided new and
flexible solutions to help move people safely and
assist individual drivers and organisations with
their cash flow management challenges.
There is no doubt that our service performance
over the past few periods has been recognised
by our customers. Evidence of that is the steady
upward trend in Net Promoter Scores, which
measure customer satisfaction, in the Novated
segment in the second half of the 2020 calendar
year, when the impact of COVID-19 on people’s
financial situation was at its worst. Equally, there
is ample evidence that the commendable efforts
of our people helped us retain our existing
accounts and record an impressive number of
additional customer wins during the year. At the
same time, the efficiency of the solutions we
offer and the value-add they create resulted in
a wider take-up of our products and services
offering across existing and new accounts.
Our focus remains on evolving these products
and services through continuous innovation and
via selective investments in new capabilities.
This strategy is part of your Company’s evolution
into a Mobility-as-a-Service, or MaaS provider.
MaaS is a concept that I first introduced to you,
our Shareholders, in the 2015 Annual report.
Since then, we have continued to build our
capabilities in the areas of fleet, vehicle and trip
management. The next step in this process, the
integration of these capabilities, will firmly put us
in a leadership position in our industry in terms
of end-to-end MaaS provision.
A further focal point of our innovation efforts in
recent years has been low- and zero-emission
vehicles. The introduction of alternative power
sources is part of a growing awareness in the
community of our environmental responsibilities.
We view it as our duty to deploy our expertise
in this area and help others reduce the impact
of their transport activities and make a positive
contribution in that regard. I encourage you to
read our Sustainability Statement in this Annual
Report. It outlines our actions, as well as the
work we do with our customers and suppliers,
to further improve our processes in the areas
of environmental management, social capital,
and governance.
Finally, I would like to turn to what is a truly
momentous milestone in the growth journey
of your Company. On the 31st of March of this
year, we announced our intention to acquire
the Australian and New Zealand businesses of
LeasePlan. While at the time of writing to you,
we are yet to fully complete the acquisition, there
is no doubt this will be a transformational step
in our history, allowing us to create significant
long-term value for all our stakeholders. I look
forward to reporting on the acquisition and its
integration in next year’s report.
I would like to thank everyone at SG Fleet for
another year of committed effort in a challenging
environment, as well as the Directors of
the Board for supporting the Company’s
achievements. My thanks also go to Super
Group, our majority shareholder, for actively
supporting our strategy. Most importantly,
I thank you, our Shareholders, for your continued
support as we are set to embark on an exciting
new phase in your Company’s history.
SG Fleet Group Limited 11
“We take pride
in our continued
resilience in the face
of these challenges
as it allowed us to
progress as the
year went on.”
Chief Executive Officer’s
report
Dear Shareholder
I am pleased to report on the financial
performance of SG Fleet Group Limited
for the year ended 30 June 2021.
My review of this financial year will refer for
comparison to the financial figures for the year
ended 30 June 2020. Detailed financial data can
be found in the full annual report.
A significant improvement in
financial performance
The 2021 financial year still stood in the context
of the COVID-19 pandemic. Disruptions
continued to occur, impacting consumer
sentiment and consequently demand for
novated leases, particularly in the first half.
However, its effects became less pronounced
as time passed. We take pride in our continued
resilience in the face of these challenges as it
allowed us to progress as the year went on.
Lower deliveries in the Novated segment during
the first quarter of the financial year were offset
by the strong performance of our Corporate
segment in Australia, as well as the UK and New
Zealand. Since then, novated orders recovered
in line with improving consumer sentiment,
despite COVID-19 still impacting employment
in some industries. Again, as a Group we
benefited from our diversification and the natural
hedge of our business portfolio. This hedge
manifested itself in the strong growth in end
of lease income as the value of used vehicles
remained at exceptional levels in all three
countries because of supply issues and higher
demand. This constraint however also meant
that, throughout the year, delivering the growing
number of orders we won was a challenge. As
a consequence, the order pipeline at financial
year-end almost doubled on the previous year,
which means a significant number of orders will
spill into the 2022 financial year.
Tender, as well as other business opportunity
activity, rose throughout the year. Across the
Group, we have again done an exceptional job
retaining our existing customers and we added
a significant number of accounts by winning the
majority of tenders we pursued. At the same
time, we have been able to upsell our products
and services further, with more than half of our
customers now taking up multiple products.
I am happy to report that as a result of this
continued progress, we produced a significant
improvement in our financial performance in
the 2021 financial year. Total net revenue for the
full financial year was $198.2 million, up 15%
on the previous year. Net profit after tax for the
reported period was $43.7 million. Underlying
net profit after tax, which excludes $7.9 million
in costs related to the LeasePlan acquisition,
was $51.6 million, a 41.8% improvement on the
2020 financial year. Reported earnings per share
was 16.22 cents, up 16.8% on the previous
corresponding period, while Underlying cash
earnings per share was up 31.6% to 21.75 cents.
New vehicle orders growth exceeded 25%, but
frustratingly, the disruptions to new car supply
meant that our growth in new funded deliveries
was limited to 8.6%. The remainder of these
vehicle orders banked up in our order pipeline.
Fleet size reduced by 3.1% on the previous year.
This reduction mostly came from the Novated
segment as a result of early terminations from
employees in the airline and university sectors,
who were particularly impacted by COVID-19,
and our inability to deliver ordered vehicles
because of the supply chain challenges I
referred to earlier.
Management and maintenance revenue
declined marginally, to $82.5 million, in line
with the reduction in fleet under management.
Additional products and services revenue and
finance commissions, at $99.3 million and
$36.1 million, down 9.2% and 8.8% respectively,
were both impacted by the reduction in novated
deliveries. The inability to deliver new orders
meant that a large number of customers
extended their leases. Finance commissions
on these extensions are lower than those
received on a new vehicle. As mentioned earlier,
the natural hedge in our business portfolio
meant that the new vehicle supply disruptions,
coupled with increased demand for used
vehicles, translated into unprecedented net
end of lease income, which more than tripled to
$43.9 million. Finally, net rental income grew by
17.8% to $16.1 million because of an increase in
on-balance sheet lending, predominantly from
the UK, with a small contribution from our new
securitisation program.
2021 Annual Report 12
Continued strength in Corporate businesses
The Corporate segment performed well across Australia,
New Zealand and the United Kingdom, building further on
the progress made in the second half of the 2020 financial
year. Fleet additions in the parcel delivery space in particular,
the consequence of the boom in online shopping, were of an
unprecedented size. Sale and leaseback arrangements again
were a very popular option as many companies continued to
look for cash flow management benefits.
Throughout the period, we have been very agile in how we
support our customers. This has undoubtedly contributed to
the noted increase in interest in our growing range of products
and services. There was a particularly strong demand for
solutions that allow our customers to ensure they use their fleet
as efficiently and safely as possible. Customers are also looking
for flexible arrangements, such as subscription services and
shorter-term leases.
In the context of the demand growth we saw in this segment,
delivering orders remained our biggest challenge as vehicle
supply did not recover during the period. Fortunately for us,
we have always nurtured our relationships with our business
partners and there is no doubt this helped us source a
significant amount of available stock from dealers.
Novated orders pass pre-COVID-19 levels
In the July to September quarter of the 2021 financial year,
demand in the Novated segment was still affected by COVID-19,
but as restrictions were lifted, we saw leads and subsequently
orders starting to rebound. We continued to work very hard with
our lenders and with drivers in industries most affected by the
pandemic to manage the impact of redundancies on drivers with
novated leases. Unfortunately, some drivers had to early-terminate
their leases, which affected total fleet numbers.
There is no doubt that we have been able to improve our
reputation further by providing customers with the advice and
help they needed through these challenging times. A greater
prominence of educational content aimed at communicating
the cost and flexibility benefits of novated leases was combined
with the digitisation of processes across the full spectrum of
customer interaction. The resulting improvement in the customer’s
digital experience also allowed us to become more targeted in
our approach.
As the environment improved during the year, we made a
significant effort to maximise the benefits of improving consumer
sentiment. Combined with the very strong retention of existing
accounts and additional wins, this led to a sustained recovery in
demand for our product. Initially, this manifested itself in a rebound
in leads, and subsequently in the form of firm new orders, which
passed pre-COVID-19 levels by financial year-end. In addition,
we increased our share of wallet per lease by increasing the
penetration of accessory products.
UK performs strongly throughout challenging period
The economic situation in the United Kingdom evolved rapidly
as the country started getting control of COVID-19. At the
beginning of the year, the UK was facing a far more challenging
environment than that seen in Australia and New Zealand, with
multiple lockdowns leading to a stop-start economy. Since then,
the country started to open up, helped by aggressive financial
support from its government.
Nevertheless, cash flow management remained front of mind
for many companies and this led to strong interest in sale and
leasebacks. Demand for light commercial vehicles was also
particularly strong and as we operate in that segment with a
well-targeted niche product, we did very well out of that trend.
In terms of business development, we continued to register good
wins across the corporate, SME and Employee Benefits segments,
with the latter doing particularly well as consumer sentiment
improved rapidly in the second half. Significant progress was made
in terms of upsell of a wider range of our products and services,
both with new account wins and with existing customers.
For reasons similar to those seen in Australia, second-hand car
values were very strong in the UK and this obviously benefited us.
However, inevitable supply challenges meant we continued to see
extended lead times and a further lengthening of the order book.
Nevertheless, our UK business was extraordinarily resilient during
the worst of the COVID-19 period, performing strongly throughout
and now benefiting from the opening up of the country.
New Zealand order pipeline at record levels
New Zealand responded early and hard to the COVID-19 crisis
and reaped the benefits of that in economic terms. General
business sentiment improved, and our business largely operated
on a business-as-usual basis. Tender activity remained steady,
with competitive behaviour fairly rational.
As in our other markets, balance sheet optimisation efforts
manifested themselves in a greater appetite for funding and sale
and leasebacks. As a consequence, we converted a number
of accounts from managed-only to funded. New business
opportunities continued to emerge throughout the year. The main
challenge for the business was to clear the order pipeline, which
remained at record levels at year-end. As was the case in Australia
and the UK, stock availability was a problem. In line with that,
used vehicle pricing remained exceptionally strong.
Environment creates stronger interest in products
and services offering
Evidence that the Company kept is stride despite the unique
external environment can also be seen in one of the features
of the 2021 financial year, namely the rapid evolution and the
accelerating take-up of our products and services offering.
The unique requirements coming out of the COVID-19 crisis
undoubtedly accelerated a number of trends that were starting
to emerge in previous years, and many of our existing products
helped solve a wide range of problems our customers faced.
Examples of that include a greater need to manage so-called grey
fleets via asset management solutions such as Bookingintelligence
as the reluctance to utilise shared transport and the move
to work-from-home arrangements has led to the use of
personal vehicles for work-related transport. Not surprisingly,
Bookingintelligence use grew rapidly, with booking transactions
tripling during the 2021 financial year to over 1.2 million. Infection
concerns also led to greater interest in DingGo’s digital contactless
repair management process, which has now been integrated into
our own service offering. We noticed an uptick in interest in short-
term and more flexible arrangements, such as the subscription
service offered by Carly. Elsewhere, the expansion of eCommerce
boosted the demand for delivery vehicles. At a financial level, a
renewed focus on balance sheet optimisation led to greater interest
in outsourcing, sale and leasebacks and greater fleet efficiency.
These demand trends are likely to remain present long after the
pandemic has been brought under control.
SG Fleet Group Limited 13
“The ultimate goal is to
bring our innovation
in the areas of vehicle
technology and
management, enhanced
fleet management and
trip management more
broadly together to offer
a Mobility-as-a-Service
capability.”
Robbie Blau
Chief Executive Officer
16 August 2021
Sydney
Evolving our capabilities
A transformational year
During the year, we also witnessed a global shift
towards greater acceptance and penetration
of low- and zero-emission vehicles (LEVs and
ZEVs), including in corporate fleets. The electric
vehicle (EV) conversation is certainly high on the
agenda with many of our larger customers.
We were one of the first providers to recognise
the positive potential of lower emission vehicles
in a fleet context and launched the eStart Zero
Emission Vehicle Transition Planning service
a few years ago. In the past year, in addition
to our work with government customers,
some of the biggest names in Corporate
Australia approached us for assistance
with the development of their own low- and
zero-emission strategies. eStart effectively
wraps up the entire EV universe for our
customers, from development of the transition
process to implementation of the EV strategy.
In the first half of the financial year, we were
also the first in Australia to register a fleet of
fuel-cell or hydrogen powered cars.
Not surprisingly, this work led to a sharp rise
in the use of more environmentally friendly
transport solutions across the fleets we
manage. At the end of the 2021 financial year,
we achieved a 47% year-on-year increase in
the number of low emission vehicles managed
in Australia and New Zealand. In the UK, low or
zero-emission vehicles now account for about
one-fifth of our fleet. Currently, 12% of our
internal fleet uses lower emission technology.
This percentage is increasing rapidly as we
replace older vehicles.
Our innovation in these areas continues. We are
also participating as the only mobility solutions
provider in the ground-breaking REVS project,
which is doing pioneering research to reduce
the overall cost of EVs while at the same time
supporting the electricity grid. We have carved
out a strong reputation for ourselves in this lower
emission vehicle space and as these trends
accelerate, we will be in a leading position
to provide existing and new customers with
market-leading solutions.
The ultimate goal is to bring our innovation in the
areas of vehicle technology and management,
enhanced fleet management and trip
management more broadly together to offer a
Mobility-as-a-Service capability. We will manage
the full mobility process, from journey planning,
transport data and access, to booking and
payment. Developing this capability is a journey
we have been leading in our industry over the
past six years and I look forward to sharing more
about this exciting journey in coming years.
The 2021 financial year has been another
momentous period in our journey as a company,
both in terms of the environment we operated
in and the many exciting developments within
the business.
Our Australian Corporate segment continued its
strong performance, helped by strong interest
in new products and solutions. Used car values
remained very supportive throughout the period.
In the Novated segment, while the impact of
COVID-19 was still felt in the beginning of the
financial year, sentiment recovered steadily
despite the occasional lockdown. The UK’s
fortunes improved significantly in the last six
months of the financial year and evidence of that
was most pronounced in our employee benefits
business there. In New Zealand, we continued
to pick up blue-chip accounts. Retention levels
in our businesses were close to 100% and we
reported further gains in terms of tender win
rates and customer penetration.
Interest in low and zero-emission vehicles is
growing in all geographies and an increasing
number of large customers are enlisting our
help to organise and implement their vehicle
transition processes. The solutions we have
already brought to market and are currently
under development are paving the way towards
the creation of an end-to-end integrated
Mobility-as-a-Service capability. Because these
solutions generate revenue on an ongoing basis,
they are also further shifting our revenue profile
towards recurring income.
At the time of writing this report, we were
nearing the completion of the LeasePlan
acquisition, which we announced during the
2021 financial year. The acquisition will be a truly
transformational moment for SG Fleet, and we
look forward to delivering on the benefits the
acquisition will create for us, once completed.
Combined with the excellent progress we have
achieved across the Group during the financial
year, and the rapid evolution of our products and
services offering, it is a very exciting time for both
businesses to come together and the future holds
great promise for the combined entity.
My heartfelt thanks and appreciation go to my
Executive team and my colleagues across the
Group. This year, more than ever before, we
stood up together to the challenges we faced,
and I firmly believe this has made SG Fleet
stronger. With the continued support of you, our
Shareholders, we will further build our industry
leadership and grow the value we are creating
for our customers, for our shareholders, and for
all our stakeholders.
2021 Annual Report 14
Contents
Directors’ report
Auditor’s independence declaration
Statement of profit or loss
Statement of other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
15
33
34
35
36
37
38
39
83
Independent auditor’s report to the shareholders of SG Fleet Group Limited 84
Shareholder information
Corporate directory
90
92
SG Fleet Group Limited Directors’ report
30 June 2021
15
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’)
consisting of SG Fleet Group Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of,
or during, the year ended 30 June 2021.
Directors
The following persons were Directors of the Company during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Andrew Reitzer (Chairman)
Robert (Robbie) Blau
Cheryl Bart AO
Graham Maloney
Peter Mountford
Edwin Jankelowitz
Kevin Wundram
Colin Brown (alternate for Peter Mountford)
Details of the Directors are set out in the section ‘Information on Directors’ below.
Principal activities
During the financial year, the principal continuing activities of the Group consisted of motor vehicle fleet management, vehicle leasing,
short-term hire, consumer vehicle finance and salary packaging services.
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2020 of 3.053 cents per ordinary share paid on
6 October 2020 (2020: Final dividend for the year ended 30 June 2019 of 9.520 cents)
Interim dividend for the year ended 30 June 2021 of 7.192 cents per share paid on 13 April 2021 (2020:
Interim dividend for the year ended 30 June 2020 of 6.943 cents)
Consolidated
2021
$’000
2020
$’000
8,004
24,958
18,855
26,859
18,201
43,159
On 16 August 2021, the Directors declared a fully franked final dividend for the year ended 30 June 2021 of 5.393 cents per ordinary
share, to be paid on 9 September 2021 to eligible shareholders on the register on 26 August 2021. This equates to a total estimated
distribution of $16,039,000, based on the number of ordinary shares on issue as at 30 June 2021. The financial effect of dividends
declared after the reporting date are not reflected in the 30 June 2021 financial statements and will be recognised in subsequent
financial reports.
2021 Annual Report
16
Directors’ report
30 June 2021
Review of operations
The profit for the Group after providing for income tax amounted to $43,705,000 (30 June 2020: $36,381,000).
The fleet size of the Group as at 30 June 2021 was 138,797 (30 June 2020: 143,278).
Refer to Chairman’s report and Chief Executive Officer’s report for further commentary on the review of operations.
Significant changes in the state of affairs
On 31 March 2021, the Group entered into an agreement to acquire the LeasePlan Australian and New Zealand businesses from
LeasePlan Corporation N.V. for a cash consideration of $273,000,000 and a 13% post-acquisition equity interest in the Company.
In addition to the purchase consideration, pre-completion profits, surplus cash on the LeasePlan ANZ Balance sheet and capital
invested in the lease portfolio will be released to LeasePlan Corporation N.V. subject to a floor value of $207,000,000.
The acquisition is expected to complete late in the third quarter or early in the fourth quarter of 2021. The cash consideration will
be funded by a capital raising of $86,329,000 made during the current financial year (refer to note 27 of the financial statements),
an increase in corporate debt of $175,000,000 and surplus cash resources.
Matters subsequent to the end of the financial year
Apart from the dividend declared and the pending LeasePlan acquisition as discussed above, no other matter or circumstance
has arisen since 30 June 2021 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
Likely developments in the operations of the Group and the expected results of those operations are contained in the Chairman’s report
and Chief Executive Officer’s report.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Title:
Andrew Reitzer
Independent Non-Executive Director and Chairman
Qualifications:
Bachelor of Commerce and a Master of Business Leadership from the University of South Africa
Experience and expertise: Andrew has over 40 years of global experience in both the retail and wholesale industry. He has
served as the Chief Executive Officer (‘CEO’) of Metcash Limited between 1998 and 2013. Prior to his
appointment as CEO of Metcash, Andrew held various management roles at Metro Cash & Carry Limited
and was appointed to lead the establishment of Metro’s operations in Israel and Russia and served as
the Group Operations Director.
Other current directorships: None
Former directorships
(last 3 years):
Non-executive Chairman of Webcentral Group Limited (ASX: WCG) – resigned on 10 November 2020
and Non-executive Chairman of Amaysim Australia Limited (ASX: AYS) – delisted on 6 April 2021.
Special responsibilities:
Chairman of the Nomination and Remuneration Committee and Chairman of the Innovation and
Technology Committee
Interests in shares:
94,461 ordinary shares in the Company
SG Fleet Group Limited 17
Name:
Title:
Qualifications:
Robert (Robbie) Blau
Executive Director and Chief Executive Officer (‘CEO’)
Bachelor of Commerce (Accounting and Law), Bachelor of Laws (Cum Laude) from the University of the
Witwatersrand, Higher Diploma in Tax Law from Johannesburg University
Experience and expertise: Robbie was appointed CEO of SG Fleet in July 2006 and has significant experience in the fleet management
and leasing industry. Robbie has overall responsibility for the strategic development of the Group and
manages its relationships with financial services partners. Previously, Robbie was Managing Director of
Nucleus Corporate Finance in South Africa, which he founded in 1999. During his time at Nucleus Corporate
Finance, Robbie advised South African listed entity Super Group Limited on corporate advisory and strategic
projects. He also spent a year working with the Operations Director of South African Breweries Limited and
practised as a commercial attorney for five years at Werksmans Attorneys in South Africa.
Other current directorships: Carly Holdings Limited (previously Collaborate Corporation Ltd) (ASX: CL8)
Former directorships
(last 3 years):
None
Special responsibilities:
Member of the Innovation and Technology Committee
Interests in shares:
7,862,588 ordinary shares in the Company
Interests in options:
2,653,020 options over ordinary shares in the Company
Interests in rights:
222,904 performance rights over ordinary shares in the Company
Name:
Title:
Qualifications:
Cheryl Bart AO
Independent Non-Executive Director
Bachelor of Commerce and Bachelor of Laws from the University of New South Wales, Fellow of the
Australian Institute of Company Directors
Experience and expertise: Cheryl is a qualified lawyer and company director with experience across industries including financial
services, utilities, energy, renewable energy, television and film. Cheryl previously worked as a lawyer
specialising in Banking and Finance at Mallesons Stephen Jaques (now King & Wood Mallesons). Cheryl is
currently a director of Shaw Australia Pty Ltd, Chairman of Powering Australian Renewables and Chairman of
TEDxSydney. Cheryl is immediate past Chairman of ANZ Trustees Ltd, the Environment Protection Authority of
South Australia, the South Australian Film Corporation, Adelaide Film Festival and the Foundation for Alcohol
Research and Education (‘FARE’). She is the 31st person in the world to complete The Explorer’s Grand Slam,
and is a Patron of SportsConnect. Cheryl has also previously been a director of Football Federation Australia,
ME Bank, The Prince’s Trust Australia, Australian Himalayan Foundation and Invictus Games Sydney 2018.
Other current directorships: Audio Pixels Holdings Limited (ASX: AKP)
Former directorships
(last 3 years):
Special responsibilities:
None
Member of the Audit, Risk and Compliance Committee, member of the Nomination and Remuneration
Committee and member of the Innovation and Technology Committee
Interests in shares:
30,665 ordinary shares in the Company
Name:
Title:
Qualifications:
Graham Maloney
Independent Non-Executive Director
Bachelor of Arts from the University of Sydney, Associate of the Institute of Actuaries of Australia, Fellow
of the Australian Institute of Company Directors
Experience and expertise: Graham has over 40 years of experience in financial services, including superannuation, life insurance,
commercial banking, investment banking and stockbroking. He is the CEO of Stratagm, which he
established in 2009 to provide strategic and financial advisory services to both businesses and
individuals. He is also the Chair of Connective Group, a leading mortgage aggregation business.
Graham’s experience includes roles as Division Director at Macquarie Capital and as Group Treasurer
at National Australia Bank and director at Shadforth Financial Group and Circus OZ Australia Ltd.
Other current directorships: None
Former directorships
(last 3 years):
None
Special responsibilities:
Chairman of the Audit, Risk and Compliance Committee
Interests in shares:
31,487 ordinary shares in the Company
2021 Annual Report 18
Directors’ report
30 June 2021
Name:
Title:
Qualifications:
Peter Mountford
Non-Executive Director
Bachelor of Commerce and Bachelor of Accountancy from the University of the Witwatersrand,
Chartered Accountant, Higher Diploma in Taxation from the University of Witwatersrand and MBA
(With Distinction) from Warwick University
Experience and expertise: Peter is the nominee for Super Group Limited, has over 25 years of senior management experience and
since 2009 has served as the CEO of Super Group Limited. Prior to becoming the CEO of Super Group
Limited, he served as the Managing Director of Super Group’s Logistics and Transport division and later
its Supply Chain division. Peter’s experience also includes six years as the CEO of Imperial Holdings
Limited’s Consumer Logistics division and as Managing Director of South African Breweries Limited’s
Diversified Beverages. He is currently a Director of The Road Freight Association in South Africa and
Bluefin Investments Limited (Mauritius).
Other current directorships: Super Group Limited (JSE: SPG)
Former directorships
(last 3 years):
Special responsibilities:
None
Member of the Audit, Risk and Compliance Committee and member of the Nomination and
Remuneration Committee
Interests in shares:
580,000 ordinary shares in the Company
Name:
Title:
Edwin Jankelowitz
Non-Executive Director
Qualifications:
Bachelor of Commerce from the University of the Witwatersrand, Chartered Accountant (South Africa)
Experience and expertise:
Edwin has spent over 40 years in corporate offices and has been Chairman of a number of listed
companies. He was a member of the Income Tax Special Court in South Africa for 20 years. Prior to
joining the Group, Edwin was Finance Director of Metcash Trading Limited and Metcash Limited from
May 1998 to January 2011, and a Non-Executive Director of the company until August 2015. Edwin held
the positions of Finance Director, Managing Director and then Chairman at Caxton Limited from 1983
to 1997. Edwin was a consultant in business management and tax between 1980 and 1983. Edwin was
with Adcock Ingram Ltd from 1967 to 1979 in the Head Office and was promoted over time to Group
Company Secretary and then Finance Director.
Other current directorships: None
Former directorships
(last 3 years):
None
Special responsibilities:
Member of the Audit, Risk and Compliance Committee
Interests in shares:
22,688 ordinary shares in the Company
SG Fleet Group Limited 19
Name:
Title:
Qualifications:
Kevin Wundram
Executive Director, Chief Financial Officer (‘CFO’) and Head of Risk
Bachelor of Commerce from the University of the Witwatersrand, Honours Bachelor of Accounting
Science degree from the University of South Africa, Chartered Accountant
Experience and expertise: Kevin has been CFO of SG Fleet Group since July 2006 and has significant experience in the fleet
management and leasing industry. He is responsible for the effective management of the finance,
treasury, risk and corporate governance functions across the Group. Prior to joining the Group, Kevin was
responsible for special projects at Super Group Limited, including the execution of acquisitions, disposals
and due diligence. Kevin was also a member of the management committees of the Automotive Parts,
Commercial Dealerships and Supply Chain Divisions. Prior to joining Super Group, Kevin worked in the
audit and corporate finance divisions of KPMG South Africa for six years.
Other current directorships: Alternative Director for Robbie Blau at Carly Holdings Limited (previously Collaborate Corporation Ltd)
Former directorships
(last 3 years):
(ASX: CL8)
None
Special responsibilities:
Member of the Innovation and Technology Committee
Interests in shares:
803,713 ordinary shares in the Company
Interests in options:
994,882 options over ordinary shares in the Company
Interests in rights:
83,589 performance rights over ordinary shares in the Company
Name:
Title:
Qualifications:
Colin Brown
Alternate Director for Peter Mountford
Bachelor of Accounting Science degree from the University of South Africa (‘UNISA’), Honours Bachelor
of Accounting Science degree from UNISA, Certificate in the Theory of Accounting from UNISA,
Chartered Accountant (South Africa), Master in Business Leadership degree from the UNISA School
of Business Leadership
Experience and expertise: Colin provided support services to Super Group Limited’s treasury activities in Johannesburg from
June 2009 to February 2010, and was appointed to the Super Group Limited’s board as CFO in
February 2010. Prior to that, Colin was CFO and a member of the board of Celcom Group Limited, a
business in the mobile phone industry and previously listed on the Alternative Exchange (‘AltX’) of the
Johannesburg Stock Exchange (‘JSE’). Colin has also held the Financial Director position at Electronic
Data Systems (‘EDS’) Africa Limited and Fujitsu Services South Africa, both multi-national companies
in the information technology services industry and Bluefin Investments Limited (Mauritius).
Other current directorships: Super Group Limited (JSE: SPG)
Former directorships
(last 3 years):
None
Special responsibilities:
Alternative director and member of the Audit, Risk and Compliance Committee for Peter Mountford
Interests in shares:
122,639 ordinary shares in the Company
‘Other current directorships’ set out above are current directorships for listed entities only and exclude 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 exclude
directorships of all other types of entities, unless otherwise stated.
2021 Annual Report 20
Directors’ report
30 June 2021
Company secretary
Tawanda Mutengwa (Bachelor of Laws (with distinction), University of Witwatersrand, Master of Laws, UNSW, AGIA) has held the role
of company secretary since 10 December 2019. Tawanda first practised law at Bowman Gilfillan in South Africa before taking on legal,
governance and secretariat roles at Macquarie Bank, Chubb Insurance, Elanor Investors and most recently at PwC Australia.
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 2021, and the number of meetings attended by each Director were:
Andrew Reitzer
Robbie Blau
Cheryl Bart AO
Graham Maloney
Peter Mountford
Edwin Jankelowitz
Kevin Wundram
Andrew Reitzer
Robbie Blau
Cheryl Bart AO
Kevin Wundram
Board of Directors
Audit, Risk and Compliance
Committee
Nomination and
Remuneration Committee
Attended
Held
Attended
Held
Attended
Held
13
13
13
13
13
13
13
13
13
13
13
13
13
13
–
–
4
4
4
4
–
–
–
4
4
4
4
–
5
–
5
–
5
–
–
5
–
5
–
5
–
–
Innovations and Technology
Committee
Attended
Held
2
2
2
2
2
2
2
2
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant committee.
Colin Brown did not attend any meetings in his capacity as an Alternate Director during the financial year.
SG Fleet Group Limited 21
Remuneration report (audited)
The remuneration report, which has been audited, details the Key Management Personnel (‘KMP’) remuneration arrangements for the
Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or
indirectly, including all directors.
The remuneration report is set out under the following main headings:
• Principles used to determine the nature and amount of remuneration
• Details of remuneration
• Service agreements
• Share-based compensation
• Additional information
• Additional disclosures relating to KMP
Principles used to determine the nature and amount of remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results
delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders,
and conforms to market best practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for
good reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage/alignment of executive compensation; and
•
transparency.
The main role of the Nomination and Remuneration Committee (‘NRC’) is to assist the Board in fulfilling its corporate governance
responsibilities and to review and make recommendations in relation to the remuneration arrangements for its Directors and executives.
The NRC comprises two independent Non-Executive Directors and one Non-Executive Director and meets regularly throughout the
financial year. The CEO and CFO attend certain committee meetings by invitation, where management input is required. The CEO and
CFO are not present during any discussions related to their own remuneration arrangements.
The performance of the Group depends on the quality of its Directors and executives. The remuneration philosophy is to attract,
motivate and retain high performing, quality executives.
The remuneration framework has been structured to be market competitive and complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders’ interests. The Board has considered that it should seek
to enhance shareholders’ interests by:
• having economic profit as a key 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 the achievement of strategic objectives and contribution to growth in shareholder wealth; and
• providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of Non-Executive Directors and executive remunerations are separate.
2021 Annual Report 22
Directors’ report
30 June 2021
Non-Executive Directors’ remuneration
Fees and payments to Non-Executive Directors reflect the demands that are made on, and the responsibilities of, these Directors.
Non-Executive Directors’ fees and payments are reviewed annually by the NRC. The NRC may, from time to time, receive advice from
independent remuneration consultants to ensure Non-Executive Directors’ fees and payments are appropriate and in line with the
market. 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 determination of his own remuneration. Non-Executive
Directors do not receive retirement benefits, share options or other cash incentives.
The remuneration of Non-Executive Directors consists of Directors’ fees and committee fees. The Chairman of the Board attends all
committee meetings but does not receive committee fees in respect of his role as Chairman or member of any committee.
ASX listing rules require the aggregate Non-Executive Directors remuneration be determined periodically by a general meeting. The most
recent determination was at the Annual General Meeting held on 12 February 2014, where the shareholders approved the aggregate
remuneration be fixed at a maximum of $1,000,000 per annum.
Non-Executive Director fees (Directors’ fees and committee fees) (inclusive of superannuation) are summarised as follows:
Name – Position
Andrew Reitzer – Independent Non-Executive Chairman
Cheryl Bart AO – Independent Non-Executive Director
Graham Maloney – Independent Non-Executive Director
Peter Mountford – Non-Executive Director
Edwin Jankelowitz – Independent Non-Executive Director
Fees per
annum
$200,004
$117,502
$120,000
$117,502
$110,002
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both
fixed and variable components.
The executive remuneration and reward framework has four components:
• base salary and non-monetary benefits;
• short-term performance incentives;
• share-based payments; and
• other remuneration, such as superannuation and long service leave.
The combination of these comprise the executive’s total remuneration.
Total Fixed Remuneration (‘TFR’) consisting of base salary, annual leave, superannuation and non-monetary benefits, is reviewed
annually by the NRC, based on individual performance and comparable market remunerations.
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.
SG Fleet Group Limited 23
Short-term incentives
The short-term incentives (‘STI’) program is designed to align the targets of the business units with the performance hurdles of
executives. The STI program has a non-financial component and a financial component.
Non-financial component of STI
The non-financial component comprises 20% of the STI and the financial component 80%.
An individual performance gateway applies in relation to the award of the STI. For an executive to receive payment under the STI
program, their performance must be assessed as being fully satisfactory. This includes their individual contribution to the Group’s
organisational culture and demonstrating and upholding the shared values that underpin the Group’s purpose and ambition.
Upon successfully passing through the performance gateway, in order to earn the non-financial component of their STI, the Executive is
appraised according to the achievement of key performance indicators (KPI’s) as well as the achievement of key strategic initiatives.
KPI’s include productivity and product profitability measures. Key Strategic Initiatives are defined annually as part of the Group’s strategic
planning and each year an assessment is made of the achievements against the initiatives set twelve months before. Strategic Initiatives
include for example, new product development, significant technology and business systems development, innovation, customer wins
and internal efficiency initiatives.
Group performance and link to remuneration – Financial component of STI
At the beginning of each year, the NRC sets the growth target for the business units and for the Group as a whole for the purpose of
the STI. A minimum profit growth gateway of 60% of the target growth rate applies in order for an executive to be entitled to the financial
component of the STI.
The performance condition for the financial component of the STI is based on the compound annual growth rate (‘CAGR’) of the Group’s
earnings per share (‘EPS’). EPS is determined by dividing the Company’s NPAT (‘net profit after tax’) by the weighted average number
of ordinary shares on issue during the financial year. The growth achieved for the year, and the achievement against the performance
conditions for the purpose of the STI is determined by the Board in its absolute discretion, having regard to any matters that it considers
relevant. To determine EPS for the purposes of the STI, the Board typically exercises its discretion to adjust the NPAT for the impact of
non-recurring or significant transactions.
The STI is subject to a 12 month payment deferral in equity in respect of 25% of amount determined as payable.
Long-term incentives
Long-term incentives (‘LTI’) are typically granted annually to KMP (‘Participants’) in order to align remuneration with the creation of
shareholder value over the long term. LTI include long service leave and share-based payments.
LTI awards to Participants are made under the Equity Incentive Plan (‘EIP’) and are currently delivered in the form of share options
and performance rights (‘LTI Instruments’). The number of LTI Instruments granted is based on a fixed percentage of the relevant
Participant’s TFR and is issued to the Participant at no cost.
LTI Instruments currently granted to KMP typically vest over a three year period although from time to time the Board may approve a two
year vesting period when deemed appropriate (the ‘Performance Period’).
The 2020 LTI offer will be assessed over a Performance Period of 1 July 2020 to 30 June 2022 with vesting to occur in August 2022
if the performance conditions are met.
The 2021 LTI offer will be assessed over a Performance Period of 1 July 2020 to 30 June 2023 with vesting to occur in August 2023
if the performance conditions are met.
The 2020 LTI and 2021 LTI to the Executive Directors were approved by the shareholder’s at the Annual General Meeting held on
27 October 2020. The 2020 LTI and 2021 LTI were granted to KMP other than the Executive Directors on 25 November 2019 and
28 October 2020 respectively.
2021 Annual Report 24
Directors’ report
30 June 2021
Group performance and link to remuneration – LTI
The performance conditions for the LTI Instruments are based on the compound annual growth rate (‘CAGR’) of the Group’s earnings
per share (‘EPS’). EPS was selected as the performance condition for the LTI since it is a measure of economic profit and is a key driver
of the share price which is a key component in delivering sustained growth in shareholder wealth.
EPS is determined by dividing the Company’s NPAT (‘net profit after tax’) by the weighted average number of ordinary shares on issue
during the financial year. The CAGR, and the achievement against the performance conditions for the purpose of the LTI is determined by
the Board in its absolute discretion, having regard to any matters that it considers relevant. To determine the EPS CAGR for the purposes
of the LTI, the Board typically exercises its discretion to adjust the NPAT for the impact of non-recurring or significant transactions.
The Performance Period and applicable performance conditions for any future LTI opportunities will be determined by the Board and
specified in the relevant offer document.
For the current LTI offers, the percentage of options that vest and become exercisable, if any, is determined by reference to the vesting
schedule, summarised as follows:
CAGR of EPS over the Performance Period
% of options that become exercisable
Less than 3%
3% (Threshold performance)
Between 3% and 7%
Nil
60%
Straight-line pro-rata vesting between 60% and 100%
7% or above (Stretch performance)
100%
Any LTI Instruments that remain unvested at the end of the Performance Period will lapse immediately. The Participant is entitled to
receive one share for each right that vests. The Participant is entitled to receive one share for each option that vests and is exercised.
The Participant must exercise any vested options within 3 years of vesting. After 3 years, any unexercised options will lapse. The Board
may make an equivalent cash payment in lieu of providing shares to the participant. Any cash payment is at the Group’s discretion only.
The Board may determine to implement a cashless exercise arrangement under which, in lieu of paying cash, the Board may permit a
participant to pay the exercise price by forfeiting some of the vested options or forgoing some of the shares that would otherwise be
allocated to the participant on exercise.
The LTI Instruments do not carry dividends or voting rights prior to vesting and exercise. Participants must not sell, transfer, encumber,
hedge or otherwise deal with the options.
The EIP provides the Board with broad ‘clawback’ powers if, amongst other things, the Participant has: acted fraudulently or dishonestly,
engaged in gross misconduct or has acted in a manner that has brought the Group into disrepute; or there is a material financial
misstatement; or the Group is required or entitled under law or Company policy to reclaim remuneration from the Participant; or the
Participant’s entitlements vest as a result of fraud, dishonesty or breach of obligations of any other person and the Board is of the opinion
that the incentives would not have otherwise vested.
If the Participant ceases employment for cause, the unvested LTI Instruments automatically lapse unless the Board determines
otherwise. In other circumstances, the LTI Instruments will remain on issue with a broad discretion for the Board to vest or lapse some
or all of the LTI Instruments. The Board will ordinarily lapse LTI Instruments in the case of resignation.
Where there may be a change of control event, the Board has the discretion to accelerate vesting of some or all of the LTI Instruments
and the Board will notify the Participant of the date on which any vested but unexercised options will expire. Where only some of the LTI
Instruments are vested on a change of control event, the remainder of the LTI Instruments will immediately lapse.
The EIP also provides flexibility for the Group to grant, subject to the terms of individual offers, restricted shares.
Use of remuneration consultants
During the financial year ended 30 June 2021, the Group engaged Egan Associates to perform a remuneration benchmarking review for
Executive Directors and other KMP. The benchmarking review report was issued after the end of the financial year and remains subject
to Board review and deliberation.
Voting and comments made at the Company’s 2020 Annual General Meeting (‘AGM’)
At the 2020 AGM, the shareholders voted to approve the adoption of the remuneration report for the year ended 30 June 2020.
The feedback the Company received in the lead up to the AGM regarding its remuneration practices has been reflected in this
remuneration report.
SG Fleet Group Limited 25
Details of remuneration
Amounts of remuneration
Details of the remuneration of the KMP of the Group are set out in the following tables.
The KMP of the Group consisted of the Directors of SG Fleet Group Limited and the following persons:
• Andy Mulcaster – Managing Director, Australia
• Geoff Tipene – Managing Director, New Zealand
• Peter Davenport – Managing Director, United Kingdom
Short-term benefits
Cash
salary
and fees
$
Deferred
bonus from
previous
year
$
Current
year
bonus
$
182,652
107,308
120,000
117,502
100,459
–
–
–
–
–
–
–
–
–
–
2021
Non-Executive
Directors:
Andrew Reitzer
(Chairman)
Cheryl Bart AO
Graham Maloney
Peter Mountford
Edwin Jankelowitz
Executive Directors:
Robbie Blau (CEO)
1,043,629
(23,917)
781,365
Kevin Wundram (CFO)
510,984
(13,046)
279,551
Other KMP:
Andy Mulcaster
Geoff Tipene*
Peter Davenport*
430,070
269,907
300,866
4
3
400
189,787
116,314
133,188
3,183,377
(36,556)
1,500,205
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Non-
monetary
$
Super-
annuation
$
Leave
benefits
$
Equity-
settled
$
Total
$
17,352
10,194
–
–
9,544
21,694
21,694
21,694
8,097
–
–
–
–
–
–
–
–
29,183
2,013
31,196
–
–
–
–
–
–
–
–
–
–
200,004
117,502
120,000
117,502
110,003
25,244
12,092
641,739
2,489,754
240,652
1,051,927
9,584
–
–
11,363
55,109
34,004
35,988
706,248
457,508
483,818
110,269
58,283
1,007,492
5,854,266
*
Total remuneration in local currency paid to Geoff Tipene amounts to NZ$490,573. Total remuneration in local currency paid to Peter Davenport amounts
to £267,987.
Colin Brown (Alternate Director) received no remuneration during the year ended 30 June 2021.
2021 Annual Report 26
Directors’ report
30 June 2021
Short-term benefits
Cash
salary
and fees
$
Deferred
bonus from
previous
year
$
Current
year
bonus
$
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Non-
monetary
$
Super-
annuation
$
Leave
benefits
$
Equity-
settled
$
Total
$
168,954
99,260
111,000
108,690
92,925
984,677
482,402
400,965
257,248
291,030
–
–
–
–
–
50,519
27,556
18,420
10,114
(928)
2,997,151
105,681
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
26,608
12,513
39,121
16,051
9,430
–
–
8,828
21,003
21,003
21,003
7,717
–
–
–
–
–
–
–
–
–
–
185,005
108,690
111,000
108,690
101,753
36,526
16,901
(365,379)
(130,493)
727,346
417,369
19,923
–
(39,311)
(21,515)
421,000
280,172
–
1,719
29,149
333,483
105,035
75,069
(527,549)
2,794,508
2020
Non-Executive
Directors:
Andrew Reitzer
(Chairman)
Cheryl Bart AO
Graham Maloney
Peter Mountford
Edwin Jankelowitz
Executive Directors:
Robbie Blau (CEO)
Kevin Wundram (CFO)
Other KMP:
Andy Mulcaster
Geoff Tipene*
Peter Davenport*
*
Total remuneration in local currency paid to Geoff Tipene amounts to NZ$293,917. Total remuneration in local currency paid to Peter Davenport amounts
to £176,488.
The remuneration of the Non-Executive Directors, Executive Directors and other KMP was reduced for the period April to June 2020 in
line with the Group’s response to the adverse financial impact of COVID-19. As a result of the non-vesting of Tranche 2 of the 2018 LTI,
the share-based payment accrual in respect of Equity-settled remuneration was reversed.
Colin Brown (Alternate Director) received no remuneration during the year ended 30 June 2020.
Non-Executive Directors’ salaries are 100% fixed. The fixed proportion and the proportion of remuneration linked to performance of
Executive Directors and KMP are as follows:
Name
Executive Directors:
Robbie Blau
Kevin Wundram
Other KMP:
Andy Mulcaster
Geoff Tipene
Peter Davenport
Fixed remuneration
At risk – STI
At risk – LTI
2021
2020
2021
2020
2021
2020
44%
52%
65%
68%
65%
95%
95%
96%
97%
92%
30%
25%
27%
25%
28%
5%
5%
4%
3%
–
26%
23%
8%
7%
7%
–
–
–
–
8%
SG Fleet Group Limited 27
Cash bonus paid/
payable
Cash bonus forfeited
2021
2020
2021
2020
74%
53%
42%
42%
43%
7%
10%
13%
12%
14%
26%
47%
58%
58%
57%
93%
90%
87%
88%
86%
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
Robbie Blau
Kevin Wundram
Other KMP:
Andy Mulcaster
Geoff Tipene
Peter Davenport
Service agreements
KMP are employed under individual employment agreements. The agreements are continuous (i.e. not of a fixed duration) unless
otherwise stated. These agreements provide for a total compensation including a base salary, superannuation contribution and incentive
arrangements; variable notice and termination provisions; provisions for redundancy.
Details of these agreements are provided below:
Robbie Blau – CEO
• Total fixed remuneration (‘TFR’) of $1,061,208 per annum, which includes base salary, statutory superannuation contributions and any
salary sacrifice arrangements
• Participate in the STI with a maximum STI opportunity of 98% of TFR
• Participate in the LTI with a maximum LTI opportunity of 60% of TFR
Kevin Wundram – CFO
• TFR of $530,604 per annum, which includes base salary, statutory superannuation contributions and any salary sacrifice
arrangements
• Participate in the STI with a maximum STI opportunity of 70% of TFR
• Participate in the LTI with a maximum LTI opportunity of 45% of TFR
Other KMP
• Other KMP have employment agreements setting out the terms and conditions of their employment. The agreements are not
of a fixed duration.
• Total compensation inclusive of a base salary and statutory superannuation contributions and any salary sacrifice arrangements
• Eligibility to participate in the STI with a maximum STI Opportunity of 56% of TFR
• Eligibility to participate in the LTI with a maximum LTI Opportunity of 30% of TFR
Terms of STI payments:
STI payments are granted to Executive Directors based on specific financial targets and an appraisal of the executive’s performance and KPI’s.
The growth achieved for the year, and the achievement against the performance conditions for the purpose of the STI is determined by
the Board in its absolute discretion, having regard to any matters that it considers relevant. To determine EPS for the purposes of the
STI, the Board typically exercises its discretion to adjust the NPAT for the impact of non-recurring or significant transactions.
The STI determined annually for each of the above KMP is subject to a 12 month payment deferral in equity in respect of 25% of the
amount determined as payable.
Terms of termination:
In general the contract is terminated by providing 4 weeks’ notice by the Company and 3 months’ notice by the KMP. The KMP have
no entitlement to termination payments in the event of removal for misconduct.
2021 Annual Report 28
Directors’ report
30 June 2021
Share-based compensation
Issue of shares
There were no shares issued to Directors and other KMP during the year ended 30 June 2021 as a result of the exercise of options as
part of compensation (2020: Nil).
Option holding
The number of options over ordinary shares in the Company held during the financial year and at the date of this report by each Director,
members of the KMP and other employees of the Group, including their personally related parties, is set out below:
Options over
ordinary shares
Robbie Blau
Kevin Wundram
Andy Mulcaster
Geoff Tipene
Peter Davenport
Balance at
the start of
the year
Granted
Exercised
512,931
2,653,020
183,190
994,882
306,966
184,384
281,250
173,542
126,657
183,665
Total Directors and other KMP 1,314,128
4,286,359
Non-KMP
Total options
785,624
773,292
2,099,752
5,059,651
Expired/
forfeited/
other
Balance at
the end of
the year
(512,931) 2,653,020
(183,190)
994,882
(115,928)
472,288
(67,400)
290,526
–
310,322
(879,449)
4,721,038
(259,323) 1,299,593
(1,138,772) 6,020,631
Expired/
forfeited
after
30/06/2021
Vesting
after
30/06/2021
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance
at the
Directors’
report
date
2,653,020
994,882
472,288
290,526
310,322
4,721,038
1,299,593
6,020,631
Options:
The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors, KMP and other employees
in this financial year or future reporting years are as follows:
Granted
Exercised
Balance at
the start of
the year
1,138,772
960,980
–
–
–
–
1,823,951
3,235,700
2,099,752
5,059,651
Expired/
forfeited/
other
Balance at
the end of
the year
(1,138,772)
–
–
–
–
960,980
1,823,951
3,235,700
(1,138,772) 6,020,631
Expired/
forfeited
after
30/06/2021
Vesting
after
30/06/2021
–
–
–
–
–
–
–
–
–
–
Balance
at the
Directors’
report
date
–
960,980
1,823,951
3,235,700
6,020,631
Vesting date and
exercisable date
Expiry date
18/08/2020
17/08/2023
21/08/2022
21/08/2022
20/08/2025
20/08/2025
21/08/2023
20/08/2026
Exercise
price
Fair value
per option
at grant date
$3.66
$2.35
$1.68
$1.68
$1.08
$0.70
$0.45
$0.46
Grant date
25/10/2017 (a)
25/11/2019 (b)
28/10/2020 (c)
28/10/2020 (d)
Grant date of options
25/10/2017 (a)
25/11/2019 (b)
28/10/2020 (c)
28/10/2020 (d)
Options granted carry no dividend or voting rights and can be exercised only once the vesting conditions have been met until their expiry
date. The share option plan is subject to a service condition and a performance condition. The performance condition is based on the
compound annual growth rate (‘CAGR’) of the Group’s earnings per share.
–
–
–
–
–
–
–
–
–
–
–
–
–
SG Fleet Group Limited 29
Performance rights holding:
The number of performance rights over ordinary shares in the Company held during the financial year and at the date of this report
by each Director, members of the KMP and other employees of the Group, including their personally related parties, is set out below:
Performance rights
over ordinary
shares (LTI)
Balance at
the start of
the year
Granted
Vested
Expired/
forfeited/
other
Balance at
the end of
the year
Expired/
forfeited
after
30/06/2021
Vesting
after
30/06/2021
Robbie Blau
Kevin Wundram
Andy Mulcaster
Geoff Tipene
Peter Davenport
Total Directors and
other KMP
Non-KMP
45,910
16,397
26,371
15,828
10,605
222,904
83,589
24,457
15,091
15,971
115,111
577,732
362,012
916,070
Total rights (LTI)
692,843
1,278,082
–
–
–
–
–
–
–
–
(45,910)
(16,397)
(10,376)
(6,033)
–
222,904
83,589
40,452
24,886
26,576
(78,716)
398,407
(23,211)
1,470,591
(101,927)
1,868,998
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Performance rights
over ordinary
shares (STI)
Balance at
the start of
the year
Granted
Vested
Expired/
forfeited/
other
Balance at
the end of
the year
Expired/
forfeited
after
30/06/2021
Vesting
after
30/06/2021
Robbie Blau
Kevin Wundram
Andy Mulcaster
Geoff Tipene
Peter Davenport
Total Directors
and other KMP
Non-KMP
Total rights (STI)
20,817
11,355
9,595
5,824
7,418
55,009
98,564
153,573
–
–
–
–
–
–
–
–
(20,817)
(11,355)
(9,595)
(5,824)
(7,418)
(55,009)
(89,373)
(144,382)
–
–
–
–
–
–
(9,191)
(9,191)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance
at the
Directors
report
date
222,904
83,589
40,452
24,886
26,576
398,407
1,470,591
1,868,998
Balance
at the
Directors
report
date
–
–
–
–
–
–
–
–
2021 Annual Report 30
Directors’ report
30 June 2021
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors, KMP and other
employees in this financial year or future reporting years are as follows:
Granted
Vested
Expired/
forfeited/
other
Balance at
the end of
the year
Expired/
forfeited
after
30/06/2021
Vesting
after
30/06/2021
Balance at
the Director’
report
date
Grant date
LTI
25/10/2017 (e)
25/11/2019 (f)
28/10/2020 (g)
28/10/2020 (h)
Balance at
the start of
the year
101,927
590,916
–
–
–
–
147,888
1,130,194
Total rights (LTI)
692,843
1,278,082
STI
–
–
–
–
–
(101,927)
–
–
–
–
590,916
147,888
1,130,194
(101,927)
1,868,998
–
–
–
–
–
–
–
–
–
–
–
–
–
590,916
147,888
1,130,194
1,868,998
–
19/09/2019 (i)
153,573
–
(144,382)
(9,191)
–
Grant date of rights
25/10/2017 (e)
25/11/2019 (f)
28/10/2020 (g)
28/10/2020 (h)
19/09/2019 (i)
Vesting
date and
exercisable
date
18/08/2020
21/08/2022
21/08/2022
21/08/2023
01/07/2020
Expiry
date
Exercise
price
Fair value
per right at
grant date
N/A
N/A
N/A
N/A
N/A
$0.00
$0.00
$0.00
$0.00
$0.00
$3.70
$2.46
$1.55
$1.47
$3.02
Performance rights granted carry no dividend or voting rights and will vest when the performance conditions have been met.
The performance rights are subject to a service condition and a performance condition. The performance condition is based on the
compound annual growth rate of the Group’s earnings per share.
Additional information
The earnings of the Group for the five years to 30 June 2021 are summarised below:
Revenue
Profit after income tax
Dividends paid
2021
$’000
2020
$’000
2019
$’000
2018
$’000
2017
$’000
482,080
452,896
509,722
515,207
293,225
43,705
26,859
36,381
43,159
60,462
47,035
67,455
46,440
59,592
38,338
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)
2021
3.00
16.22
2020
1.60
13.88
2019
2.95
23.20
2018
3.70
26.30
2017
3.80
23.58
SG Fleet Group Limited 31
Additional disclosures relating to KMP
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of KMP of the Group,
including their personally related parties, is set out below:
Ordinary shares
Andrew Reitzer
Cheryl Bart AO
Graham Maloney
Peter Mountford
Edwin Jankelowitz
Colin Brown
Robbie Blau
Kevin Wundram
Andy Mulcaster
Geoff Tipene
Peter Davenport
Balance at
the start of
the year
Received
as part of
remuneration
Additions*
Disposals/
other
83,269
27,032
27,756
540,540
20,000
108,108
6,910,184
697,132
534,846
701
352,656
–
–
–
–
–
–
20,817
11,355
9,595
5,824
7,418
11,192
3,633
3,731
39,460
2,688
14,531
931,587
95,226
73,177
–
–
9,302,224
55,009
1,175,225
–
–
–
–
–
–
–
–
–
–
–
–
Balance at
the end of
the year
94,461
30,665
31,487
580,000
22,688
122,639
7,862,588
803,713
617,618
6,525
360,074
10,532,458
*
Additions relate to participation in the rights issue.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of SG Fleet Group Limited under option at the date of this report are as follows:
Grant date
25/11/2019
28/10/2020
28/10/2020
Expiry date
Exercise
price
Number
under option
20/08/2025
$2.35
960,980
20/08/2025
$1.68
1,823,951
20/08/2026
$1.68
3,235,700
6,020,631
Shares under performance rights
Unissued ordinary shares of SG Fleet Group Limited under performance rights at the date of this report are as follows:
Grant date
25/11/2019
28/10/2020
28/10/2020
Vesting date
21/08/2022
21/08/2022
Number
under rights
590,916
147,888
21/08/2023
1,130,194
1,868,998
2021 Annual Report
32
Directors’ report
30 June 2021
Shares issued on the exercise of options
There were no ordinary shares of SG Fleet Group Limited issued
on the exercise of options during the year ended 30 June 2021
and up to the date of this report.
Shares issued on the exercise of
performance rights
There were no ordinary shares of SG Fleet Group Limited issued
on the exercise of performance rights during the year ended
30 June 2021 and up to the date of this report.
144,382 performance rights exercised during the year were settled
through the on-market purchase of the Company’s shares.
The Directors are of the opinion that the services as disclosed
in note 33 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 undermines the general principles relating
to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants (including Independence
Standards) issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor’s
own work, acting in a management or decision-making
capacity for the Company, acting as an advocate for the
Company or jointly sharing economic risks and rewards.
Indemnity and insurance of officers
The Company has indemnified the Directors, executives and
employees of the Company for costs incurred, in their capacity
as a director, executive or employee, for which they may be held
personally liable, except where there is a lack of good faith.
The Company’s subsidiary, SG Fleet Australia Pty Limited on
behalf of the Company paid a premium in respect of a contract
to insure the Directors and executives of the Company and of any
related bodies corporates defined in the insurance policy, against
a liability to the extent permitted by the Corporations Act 2001.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial
year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the
auditor. The Company has not paid a premium in respect of a
contract to insure the auditor of the Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the
Company is a party for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
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 33 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.
Officers of the Company who are former
partners of KPMG
There are no officers of the Company who are former partners
of KPMG.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument
2016/191, issued by the Australian Securities and Investments
Commission, relating to ‘rounding-off’. Amounts in this report
have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases,
the nearest dollar.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 immediately
follows 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
Andrew Reitzer
Chairman
16 August 2021
Sydney
Robbie Blau
Chief Executive Officer
SG Fleet Group Limited
Auditor’s independence declaration
33
25 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of SG Fleet Group Limited I declare that, to the best of my knowledge and belief, in relation to the audit of SG Fleet Group Limited for the financial year ended 30 June 2021 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG John Wigglesworth Partner Sydney 16 August 2021 2021 Annual Report 34
Statement of profit or loss
For the year ended 30 June 2021
Revenue
Interest revenue calculated using the effective interest method
Total revenue
Expenses
Fleet management costs
End of lease cost of sale
Employee benefits expense
Occupancy costs
Depreciation and amortisation
Impairment of intangible assets
Technology costs
Other expenses
Finance costs
Total expenses
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners
of SG Fleet Group Limited
Basic earnings per share
Diluted earnings per share
Refer to note 4 for detailed information on Restatement of comparatives.
Consolidated
2021
$’000
2020
$’000
(Restated)
481,580
451,616
500
1,280
482,080
452,896
(91,474)
(99,262)
(173,702)
(163,494)
(80,942)
(2,439)
(32,899)
–
(10,947)
(14,584)
(11,551)
(73,523)
(2,256)
(32,078)
(70)
(11,747)
(10,333)
(8,130)
(418,538)
(400,893)
63,542
(19,837)
52,003
(15,622)
43,705
36,381
Cents
16.22
16.17
Cents
13.88
13.86
Note
6
7
7
7
8
41
41
The above statement of profit or loss should be read in conjunction with the accompanying notes.
SG Fleet Group Limited
Statement of other comprehensive income
For the year ended 30 June 2021
35
Consolidated
2021
$’000
2020
$’000
(Restated)
Profit after income tax expense for the year attributable to the owners of SG Fleet Group Limited
43,705
36,381
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation difference for foreign operations
Effective portion of changes in fair value of cash flow hedges, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners
of SG Fleet Group Limited
1,277
2,271
3,548
(433)
(649)
(1,082)
47,253
35,299
The above statement of other comprehensive income should be read in conjunction with the accompanying notes.
2021 Annual Report 36
Statement of financial position
As at 30 June 2021
Assets
Cash and cash equivalents
Finance, trade and other receivables
Inventories
Prepayments
Investments in financial assets at fair value through profit or loss
Leased motor vehicle assets
Deferred tax
Property, plant and equipment
Intangibles
Right-of-use assets
Total assets
Liabilities
Trade and other payables
Derivative financial instruments
Income tax
Deferred tax
Employee benefits
Provisions
Lease portfolio borrowings
Borrowings
Lease liabilities – right-of-use assets
Vehicle maintenance funds
Contract liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
Refer to note 4 for detailed information on Restatement of comparatives.
Note
9
10
11
12
13
14
8
15
16
17
18
19
8
8
20
21
22
23
24
25
26
27
28
Consolidated
2020
$’000
(Restated)
2019
$’000
(Restated)
2021
$’000
231,117
66,303
10,719
8,844
2,627
94,176
4,328
5,461
111,115
54,746
16,341
9,163
1,742
64,115
1,435
3,167
100,492
72,945
10,120
9,918
240
57,258
–
4,092
411,603
13,586
401,006
405,822
8,690
12,119
833,271
679,765
680,254
100,793
1,877
4,701
–
10,967
13,691
65,041
80,665
4,085
390
–
9,566
12,568
57,854
108,656
3,157
5,659
1,645
8,768
10,528
46,178
125,841
125,140
125,320
9,015
82,542
40,617
455,085
378,186
376,661
(116,772)
118,297
378,186
12,039
69,313
37,905
409,525
270,240
291,370
(122,581)
101,451
270,240
13,931
42,273
35,608
401,723
278,531
290,592
(120,290)
108,229
278,531
The above statement of financial position should be read in conjunction with the accompanying notes.
SG Fleet Group Limited Statement of changes in equity
For the year ended 30 June 2021
37
Consolidated
Balance at 1 July 2019
Issued
capital
$’000
Reserves
$’000
Retained
profits
$’000
Total equity
$’000
290,592
(120,296)
108,874
279,170
Adjustment for change in accounting policy (note 4)
–
6
(645)
Balance at 1 July 2019 – restated
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:
Share-based payments (note 42)
Transfer on vesting of performance rights
Other changes
Dividends paid (note 29)
Balance at 30 June 2020
Refer to note 4 for detailed information on Restatement of comparatives.
Consolidated
Balance at 1 July 2020
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:
Contributions of equity, net of transaction costs (note 27)
85,291
Share-based payments (note 42)
Other changes
Dividends paid (note 29)
Balance at 30 June 2021
291,370
(122,581)
101,451
270,240
(43,159)
(43,159)
290,592
(120,290)
–
–
–
–
778
–
–
–
(1,082)
(1,082)
(178)
(778)
(253)
–
Issued
capital
$’000
Reserves
$’000
291,370
(122,581)
–
–
–
–
–
–
–
3,548
3,548
–
2,321
(60)
–
108,229
36,381
–
36,381
–
–
–
Retained
profits
$’000
101,451
43,705
–
43,705
–
–
–
(26,859)
(639)
278,531
36,381
(1,082)
35,299
(178)
–
(253)
Total equity
$’000
270,240
43,705
3,548
47,253
85,291
2,321
(60)
(26,859)
378,186
376,661
(116,772)
118,297
The above statement of changes in equity should be read in conjunction with the accompanying notes.
2021 Annual Report
38
Statement of cash flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Payment for investments
Proceeds from disposal of lease portfolio assets
Acquisition of lease portfolio assets
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities – right-of-use assets
Other payments
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
Consolidated
Note
2021
$’000
2020
$’000
(Restated)
532,624
(387,012)
500
(11,551)
(19,039)
115,522
(2,746)
28,520
(73,316)
(3,980)
161
(3,397)
(54,758)
86,329
(1,483)
53,581
(47,906)
(4,696)
(60)
(26,859)
58,906
119,670
111,115
332
40
14
14
15
16
27
40
40
40
29
527,548
(419,010)
1,280
(8,121)
(23,695)
78,002
(2,295)
29,642
(53,178)
(824)
44
(4,052)
(30,663)
–
–
71,857
(58,756)
(5,809)
(253)
(43,159)
(36,120)
11,219
100,492
(596)
111,115
Cash and cash equivalents at the end of the financial year
9
231,117
The above statement of cash flows should be read in conjunction with the accompanying notes.
SG Fleet Group Limited Notes to the financial statements
30 June 2021
39
Going concern
The Group prepares and reviews cash flow forecasts quarterly and
in recent months due to the impact of COVID-19 has been doing so
monthly. These forecasts demonstrate that the Group has sufficient
cash, other liquid resources and undrawn credit facilities to enable
the Group to meet its obligations as they fall due. As such the
directors considered it appropriate to adopt the going concern
basis of accounting in preparing the financial report.
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 certain financial instruments measured
at fair value.
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.
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 37.
Note 1. General information
The financial statements cover SG Fleet Group Limited as a Group
consisting of SG Fleet Group Limited (the ‘Company’ or ‘parent
entity’) and the subsidiaries it controlled at the end of, or during,
the year (the ‘Group’). The financial statements are presented in
Australian Dollars, which is SG Fleet Group Limited’s functional
and presentation currency.
SG Fleet Group Limited is a listed public company limited by
shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 2, Building 3
20 Bridge Street
Pymble NSW 2073
During the financial year, the principal continuing activities of
the Group consisted of motor vehicle fleet management, vehicle
leasing, short-term hire, consumer vehicle finance and salary
packaging services.
The financial statements were authorised for issue, in accordance
with a resolution of Directors, on 16 August 2021. 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.
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 (‘AASB’) that are mandatory
for the current reporting period.
Any new or amended Accounting Standards or Interpretations
that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations adopted
during the year are most relevant to the Group:
Conceptual Framework for Financial Reporting
(Conceptual Framework)
The Group has adopted the revised Conceptual Framework from
1 July 2020. The Conceptual Framework contains new definition
and recognition criteria as well as new guidance on measurement
that affects several Accounting Standards, but it has not had a
material impact on the Group’s financial statements.
2021 Annual Report 40
Notes to the financial statements
30 June 2021
Note 2. Significant accounting policies
continued
Principles of consolidation
The consolidated financial statements incorporate the assets
and liabilities of all subsidiaries of SG Fleet Group Limited as
at 30 June 2021 and the results of all subsidiaries for the year
then ended.
Subsidiaries are all those entities over which the Group has control
at the end of, or during the year. 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 deconsolidated from the date
that control ceases.
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 common control subsidiaries is accounted
for using the common control method. The acquisition of other
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.
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 are responsible for the
allocation of resources to operating segments and assessing
their performance.
Foreign currency translation
The financial statements are presented in Australian Dollars, which
is SG Fleet Group Limited’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into the entity’s
functional currency 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 rate at the date of the transaction,
for the period. All resulting foreign exchange differences are
recognised in other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when
the foreign operation or net investment is disposed of.
Revenue recognition
Revenue is recognised when it is probable that the economic
benefit will flow to the Group and the revenue can be reliably
measured. Revenue is measured at the fair value of the
consideration received or receivable.
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 initially
recognised as a contract liability.
Management and maintenance income
Fleet management income and management fees are brought
to account over time on a straight-line basis over the term of the
lease, due to the continuous service received by customers over
the term of lease.
Maintenance income is recognised for each performance obligation
at a point in time when the service is provided and obligation
fulfilled. Maintenance costs are expensed as and when incurred.
SG Fleet Group Limited Additional products and services
Revenue from the sale of additional products and services is
recognised when it is received or when the right to receive payment
is established and the performance obligation has been satisfied.
Specifically, upfront establishment fees levied to the customer to
establish the contract for the services to be provided for the term of
the contract, are recognised over the term of the contract. Revenue
related to the waiver of the lessee’s wear and tear obligations is
recognised at the point in time, being at the end of the lease term.
Funding commissions
Introductory commissions earned are recognised in profit or loss
in full at a point in time, being in the month in which the finance is
introduced to the relevant financier. Trailing commissions earned
for the collection and distribution of ongoing customer rentals to
the financier are recognised over time.
End of lease income
Income earned after the expiry of the lease is recognised when it
is received or when the performance obligation, being the sale of
vehicle, transferring the risk and reward to the end buyer, has been
satisfied and the right to receive payment is established. The gross
selling price of the vehicle is recognised as End of Lease income
and the value of the vehicle at the end of the lease period payable
to the financier, is recognised as End of Lease cost of sale.
Rental income
Rental income from operating leases is recognised in profit or loss
over time, on a straight-line basis over the lease term.
Other income
Other income is recognised when it is received or when the right
to receive payment is established.
Interest
Interest revenue 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.
Government grants
Grants from the government are recognised at their fair value
when there is reasonable assurance that the grant will be received
and that the Group will comply with all attached conditions.
41
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.
SG Fleet Group Limited (the ‘head entity’) and its wholly-owned
Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime. The head entity
and each 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.
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.
2021 Annual Report 42
Notes to the financial statements
30 June 2021
Cash flow hedges
Cash flow hedges are used to cover the Group’s exposure
to variability in cash flows that is attributable to particular
risks associated with a recognised asset or liability or a firm
commitment which could affect profit or loss. The effective
portion of the gain or loss on the hedging instrument is
recognised in other comprehensive income through the
hedging reserve in equity, whilst the ineffective portion is
recognised in profit or loss. Amounts taken to equity are
transferred out of equity and included in the measurement of
the hedged transaction when the forecast transaction occurs.
When a hedging instrument expires, or is sold or terminated, or
when a hedge no longer meets the criteria for hedge accounting,
any cumulative deferred gain or loss in equity at that time remains
in equity until the forecast transaction occurs. When the forecast
transaction is no longer expected to occur, the cumulative gain or
loss and deferred costs of hedging that were classified in equity
are immediately reclassified to profit or loss.
Property, plant and equipment
Plant and equipment are 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 straight-line basis to write off the
net cost of each item of property, plant and equipment over their
expected useful lives as follows:
Leasehold improvements
five years
Computer hardware and
office equipment
three to eight years
Motor vehicles
four years
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired
period of the lease or the estimated useful life of the assets,
whichever is shorter.
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.
For leased motor vehicles see the ‘Leases – Group as lessor –
leased motor vehicles assets’ accounting policy.
Note 2. Significant accounting policies
continued
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.
Finance, 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 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.
For finance lease and contract purchase agreements see the
‘Leases – Group as lessor’ accounting policy.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
Inventories
End-of-term operating lease assets are stated at the lower of cost
and net realisable value. Cost comprises purchase and delivery
costs, net of rebates and discounts received or receivable.
Net realisable value is the lower of (i) estimated selling price
in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale
and (ii) cost less residual value provision.
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.
At inception of the hedge relationship, the Group documents the
economic relationship between hedging instruments and hedged
items including whether changes in the cash flows of the hedging
instruments are expected to offset changes in the cash flows
of hedged items. The Group documents its risk management
objective and strategy for undertaking its hedge transactions.
The Group has elected to adopt the general hedge accounting
model in AASB 9. This requires the Group to ensure that hedge
accounting relationships are aligned with its risk management
objectives and strategy and to apply a more qualitative and
forward-looking approach to assessing hedge effectiveness. Where
derivative instruments do not qualify for hedge accounting, changes
in the fair value are recognised immediately in profit or loss.
SG Fleet Group Limited 43
Leases
Group as lessee
At inception of a contract, the Group assesses whether a contract
is, or contains, a lease based on whether the contract conveys the
right to control the use of an identified asset for a period of time in
exchange for consideration, and the Group obtains substantially
all the economic benefits of the use of the assets.
The Group has elected to apply the practical expedient to account
for each lease component and any non-lease components as a
single lease component.
Right-of-use assets
The Group recognises a right-of-use asset and a lease liability at
the lease commencement date. The right-of-use asset is initially
measured at cost 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 lease incentives
received, any initial direct costs incurred, and an estimate of
costs required for dismantling and removing the underlying
asset, site restoral and asset restoral. Right-of-use assets are
subsequently measured applying a cost model such that the
asset is depreciated and impaired as required or adjusted for
any remeasurement of the lease liability.
Where the lease transfers ownership of the asset to the lessee
by the end of the lease term, or if the cost of the asset reflects
that the lessee will exercise a purchase option, the lessee shall
depreciate the right-of-use asset to the end of the asset’s useful
life, otherwise, the assets are depreciated to the earlier of the end
of their useful lives or the lease term using the straight-line method
as this most closely reflects the expected pattern of consumption
of the future economic benefits.
The lease term represents the non-cancellable period of the lease
and includes periods covered by an option to extend if the Group
is reasonably certain to exercise that option. Lease terms shall
only be revised if there is a change in the non-cancellable period
or there is a reassessment upon a significant event or a change
in circumstances that is both within the control of the lessee and
affects whether or not the lessee is reasonably certain to exercise
an option. Lease terms range from 1 to 14 years. In addition, the
right-of-use assets are periodically reduced by impairment losses,
if any, and adjusted for certain remeasurements of the lease liability.
Lease liabilities – right-of-use assets
The lease liability is initially measured at the present value of the
lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as
the discount rate.
Lease payments comprise fixed lease payments less incentives
receivable, variable lease payments, residual value guarantees
payable, exercise price of purchase options where exercise is
reasonably certain, and any anticipated termination penalties
made over the expected term of the lease which includes optional
periods where option exercise is considered reasonably certain.
Variable lease payments include those dependent upon an index,
interest rate or market but are included only using the index or rate
existing at commencement date.
The variable lease payments that do not depend on an index
or a rate are expensed in the period in which they are incurred.
Variable lease payments include rent concessions in the form
of rent forgiveness or a waiver as a direct consequence of the
Coronavirus (COVID-19) pandemic and which relate to payments
originally due on or before 30 June 2021.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or
rate, if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, or
there is a change in lease term such as if the Group changes its
assessment of whether it will exercise a purchase, extension or
termination option. When the lease liability is remeasured in this
way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or to the profit or loss to the extent that
the carrying amount has been reduced to zero. Interest on the
lease liability and variable lease payments not included in the
measurement of the lease liability are recognised in profit or loss.
The Group has elected to apply the practical expedient not to
recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases
of low-value assets. The lease payments associated with these
leases are recognised as an expense on a straight-line basis over
the lease term.
Group as lessor
A lease is classified as a finance lease if it transfers all the risks and
rewards incidental to ownership of the assets. A lease is classified
as an operating lease if it does not transfer substantially all the risks
and rewards incidental to ownership of underlying assets.
Amounts due from customers under finance leases and contract
purchase agreements are recorded as receivables. Finance
and contract purchase receivables are initially recognised at an
amount equal to the present value of the minimum instalment
payments receivable plus the present value of any unguaranteed
residual value expected to accrue at the end of the contract term.
Interest income is allocated to accounting periods so as to reflect
a constant periodic rate of return on the Group’s net investment
outstanding in respect of the contracts.
Group as lessor – leased motor vehicle assets
Full maintenance lease assets are stated at historical cost less
accumulated depreciation. The cost of full maintenance lease
assets includes the purchase cost including non-refundable
purchase taxes and other expenditure that is directly attributable
to the acquisition of the assets to bring the assets held-for-use in
the lease asset portfolio to working condition for the intended use.
The depreciable amount of the asset is depreciated over its
estimated useful life of two to five years on a straight-line basis.
Lease rentals receivable and payable on operating leases are
recognised in profit or loss in periodic amounts over the effective
lease term on a straight line basis.
2021 Annual Report 44
Notes to the financial statements
30 June 2021
Note 2. Significant accounting policies
continued
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 of amortisation and the 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
Where an entity or operation is acquired in a business combination,
that is not a common control transaction, the identifiable net assets
acquired are measured at fair value. The excess of the fair value
of the cost of the acquisition over the fair value of the identifiable
net assets acquired is brought to account as goodwill. 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.
Customer contracts
The customer contracts acquired in a business combination are
amortised on a straight-line basis over the period of their expected
benefit, being their finite useful lives of ten years.
Software
Significant costs associated with software are deferred and
amortised on a straight-line basis over the period of their expected
benefit, being their finite useful lives of between two and eight years.
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
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.
Contract liabilities
Contract liabilities represent the Group’s obligation to transfer
goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises
a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods
or services to the customer.
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.
Maintenance deferred income liability
Maintenance income is recognised for each performance obligation
at the point in time when the service is provided and the obligation
is completed. Maintenance costs are expensed when incurred.
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.
Residual values
The Group has entered into various agreements with its financiers
that govern the transfer of the residual value risk inherent in
operating lease assets from the financier to the Group at the end
of the underlying lease agreement. These agreements include
put/call options, sale direction deeds and guaranteed buyback
arrangements. The residual value provision is created on an
onerous pool basis to cover future shortfalls on the disposal of
these vehicles. Assets are grouped into homogenous groups
which are then analysed further into maturity pools. A provision
is raised for a maturity pool if the forecast loss on disposal of
the assets in the pool exceeds the future fee income that the
pool will generate between the reporting date and the maturity
date. Maturity pools in a net profit position are not offset against
maturity pools in a net loss position.
SG Fleet Group Limited 45
Employee benefits
Short-term employee benefits
Employee benefits expected to be settled 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 employee benefits not expected to be settled within
12 months of the reporting date is measured as 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
based 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, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions is 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 is 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 are 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 interest. 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 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.
2021 Annual Report 46
Notes to the financial statements
30 June 2021
Note 2. Significant accounting policies
continued
Vehicle maintenance funds
Vehicle maintenance funds represents amounts collected from
customers for vehicles under management, with such amounts
subsequently used for payments for ongoing vehicle maintenance
expenses such as fuel, service cost, registration and other
charges. Any unused amounts at the end of the lease period are
refunded to the customers.
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.
Dividends
Dividends are recognised when declared during the financial year
and are no longer at the discretion of the Company.
Business combinations
The acquisition method of accounting is used to account for
business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date
fair values of the assets transferred, equity instruments issued or
liabilities incurred by the acquirer to former owners of the acquiree
and the amount of any non-controlling interest in the acquiree.
For each business combination, the non-controlling interest in the
acquiree is measured at either fair value or at the proportionate
share of the acquiree’s identifiable net assets. All acquisition costs
are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the
financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual
terms, economic conditions, the Group’s operating or accounting
policies and other pertinent conditions in existence at the
acquisition-date.
Where the business combination is achieved in stages, the Group
remeasures its previously held equity interest in the acquiree at the
acquisition-date fair value and the difference between the fair value
and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is
recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified
as an asset or liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured and its
subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets
acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the
fair value of any pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the pre-existing
fair value is less than the fair value of the identifiable net assets
acquired, being a bargain purchase to the acquirer, the difference is
recognised as a gain directly in profit or loss by the acquirer on the
acquisition-date, but only after a reassessment of the identification
and measurement of the net assets acquired, the non-controlling
interest in the acquiree, if any, the consideration transferred and the
acquirer’s previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional
basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during
the measurement period, based on new information obtained about
the facts and circumstances that existed at the acquisition-date.
The measurement period ends on either the earlier of (i) 12 months
from the date of the acquisition or (ii) when the acquirer receives all
the information possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of SG Fleet Group 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.
Comparatives
Comparatives in the financial report have been realigned to
the current period presentation. For clearer presentation, the
Group has changed the disclosure within Revenue product
lines of $20,412,000 from ‘End of Lease income’ to ‘Additional
products and services’ and $3,553,000 from ‘Management and
maintenance income to ‘Rental income’ and also realigned the
expense of $19,028,000 from ‘End of lease cost of sales’ to ‘Fleet
management costs’. There has been no effect on the comparative
period profit, net assets or equity.
SG Fleet Group Limited 47
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.
Revenue from maintenance income
As discussed in note 2, the Group estimates the maintenance
income to be recognised for each performance obligation at
a point in time when the service is provided and the obligation
fulfilled. These calculations require the use of assumptions,
including an estimation of the profit margin to be achieved over
the life of the contract for each performance obligation.
New Accounting Standards and Interpretations not
yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet mandatory, have
not been early adopted by the Group for the annual reporting
period ended 30 June 2021. The adoption of these Accounting
Standards and Interpretations is not expected to have any
significant impact on the Group’s financial statements.
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.
Coronavirus (COVID-19) pandemic
The Group has applied significant critical judgements in the
preparation of the financial statements, incorporating the Board’s
best estimates of the foreseeable impact of COVID-19 on the
Group’s statement of profit or loss and other comprehensive
income and statement of financial position. This consideration
extends to the nature of the products and services offered,
customers, supply chain, staffing and geographic regions in
which the Group operates.
Goodwill
The Group tests annually, or more frequently if events or changes
in circumstances indicate impairment, whether goodwill has
suffered any impairment, in accordance with the accounting policy
stated in note 2. The recoverable amounts of cash-generating
units, to which these assets belong, 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 16 for further information.
Residual values
As discussed in note 2, the Group has entered into various
agreements with its financiers relating to residual value risk
inherent in operating lease assets being transferred to the Group
at the end of the underlying lease agreement. A provision is
raised where the forecast loss on disposal of the assets in the
pool exceeds the expected future fee income that the pool will
generate. The expected future income is estimated based on past
experience and likely market conditions at the time of disposal of
the assets.
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.
2021 Annual Report 48
Notes to the financial statements
30 June 2021
Note 4. Restatement of comparatives
Change in accounting policy
Software as a Service (SaaS) arrangements
The Group’s accounting policy has historically been to capitalise all costs related to the customisation and configuration of SaaS
arrangements as intangible assets in the statement of financial position. During the year, the International Financial Reporting Standards
Interpretations Committee (‘IFRIC’) issued a clarification regarding accounting for expenses due to SaaS arrangements. In accordance
with the IFRIC clarification, the Group has changed its accounting policy retrospectively to account for such arrangements as an
expense in the statement of profit or loss.
The impact of the retrospective adoption of the accounting policy is summarised below:
Statement of profit or loss and other comprehensive income
Extract
Expenses
Depreciation and amortisation
Technology costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable
to the owners of SG Fleet Group Limited
Other comprehensive income for the year, net of tax
Consolidated
2020
$’000
Reported
$’000
Adjustment
2020
$’000
Restated
(32,279)
(11,192)
52,357
(15,622)
36,735
(1,082)
201
(555)
(354)
–
(354)
–
(32,078)
(11,747)
52,003
(15,622)
36,381
(1,082)
Total comprehensive income for the year attributable to the owners of SG Fleet
Group Limited
35,653
(354)
35,299
Basic earnings per share
Diluted earnings per share
Cents
Reported
Cents
Adjustment
Cents
Restated
14.01
14.00
(0.13)
(0.14)
13.88
13.86
Statement of financial position at the beginning of the earliest comparative period
Extract
Assets
Intangibles
Total assets
Net assets
Equity
Reserves
Retained profits
Total equity
Consolidated
2019
$’000
Reported
$’000
Adjustment
2019
$’000
Restated
412,242
680,893
279,170
(120,296)
108,874
279,170
(639)
(639)
(639)
6
(645)
(639)
411,603
680,254
278,531
(120,290)
108,229
278,531
SG Fleet Group Limited 49
Consolidated
2020
$’000
Reported
$’000
Adjustment
2020
$’000
Restated
406,815
680,758
271,233
(122,587)
102,450
271,233
(993)
(993)
(993)
6
(999)
(993)
405,822
679,765
270,240
(122,581)
101,451
270,240
Statement of financial position at the end of the earliest comparative period
Extract
Assets
Intangibles
Total assets
Net assets
Equity
Reserves
Retained profits
Total equity
Statement of cash flows:
In accordance with the above, comparatives in the statement of cash flows have been restated to reflect changes in accounting policy
with regard to recognition of Software as a Service (SaaS) arrangements. Accordingly, payments for intangibles have been reduced
by $555,000 with a corresponding increase in payments to suppliers and employees. As a result of this, net cash used in operating
activities increased by $555,000 with a corresponding impact on net cash used in investing activities.
Note 5. Operating segments
Identification of reportable operating segments
The Group is organised into geographic operating segments: Australia, New Zealand, United Kingdom and Corporate. These 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. There is no aggregation
of operating segments.
The CODM review underlying EBITDA (earnings before interest, tax, depreciation, amortisation, impairment and other non-recurring or
significant transactions). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the
financial statements.
The information regarding products and services are detailed in note 6.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that
earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated
on consolidation.
Major customers
There are no major customers that contributed more than 10% of revenue to the Group.
2021 Annual Report 50
Notes to the financial statements
30 June 2021
Note 5. Operating segments continued
Operating segment information
Consolidated – 2021
Revenue
Revenue from contracts with customers
Rental income
Total sales revenue
Interest income
Total revenue
Underlying EBITDA
Depreciation and amortisation
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Consolidated – 2020
Revenue
Revenue from contracts with customers
Rental income
Total sales revenue
Interest income
Total revenue
Underlying EBITDA
Depreciation and amortisation
Impairment of assets
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Australia
$’000
New Zealand
$’000
United
Kingdom
$’000
Corporate
$’000
Total
$’000
345,822
12,277
358,099
497
358,596
82,459
(15,566)
(8,003)
58,890
10,173
3,094
13,267
2
13,269
4,403
(2,587)
(1,081)
735
79,624
30,590
110,214
1
110,215
27,253
(14,746)
(2,467)
10,040
649,295
17,233
166,743
325,815
11,696
117,574
–
–
–
–
–
(6,123)
–
–
(6,123)
–
–
435,619
45,961
481,580
500
482,080
107,992
(32,899)
(11,551)
63,542
(19,837)
43,705
833,271
833,271
455,085
455,085
Australia
$’000
New Zealand
$’000
United
Kingdom
$’000
Corporate
$’000
Total
$’000
(Restated)
333,848
9,858
343,706
1,268
344,974
70,286
(15,082)
(70)
(5,555)
49,579
8,284
3,635
11,919
3
11,922
4,368
(2,989)
–
(377)
1,002
67,158
28,833
95,991
9
96,000
18,653
(14,007)
–
(2,198)
2,448
521,465
18,945
139,355
295,255
14,109
100,161
–
–
–
–
–
(1,026)
–
–
–
(1,026)
–
–
409,290
42,326
451,616
1,280
452,896
92,281
(32,078)
(70)
(8,130)
52,003
(15,622)
36,381
679,765
679,765
409,525
409,525
SG Fleet Group Limited 51
Consolidated
2021
$’000
82,502
99,312
36,113
217,570
122
2020
$’000
(Restated)
83,250
109,315
39,612
176,168
945
435,619
409,290
45,961
481,580
42,326
451,616
Consolidated
2021
$’000
2020
$’000
(Restated)
58,983
131,349
245,287
435,619
71,763
134,191
203,336
409,290
Note 6. Revenue
Revenue from contracts with customers
Management and maintenance income
Additional products and services
Funding commissions
End of lease income
Other income
Other revenue
Rental income
Revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Timing of revenue recognition
Revenue transferred at a point in time – upfront
Revenue transferred over time
Revenue transferred at a point in time – end of life
Revenue from external customers by geographic regions is set out in note 5 operating segments.
2021 Annual Report 52
Notes to the financial statements
30 June 2021
Note 7. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Computer hardware and office equipment
Motor vehicles
Leased motor vehicle assets
Right-of-use assets
Total depreciation
Amortisation
Customer contracts
Software
Total amortisation
Total depreciation and amortisation
Impairment
Intangibles – customer contracts
Finance costs
External borrowing costs for corporate debt
External borrowing costs for lease portfolio
Net foreign exchange losses (gains)
Net movement in fair value of derivatives
Interest on lease liabilities – right-of-use assets
Interest on lease make good
Total finance costs
Net fair value loss
Net fair value loss on investments
Superannuation expense
Defined contribution superannuation expense
Consolidated
2021
$’000
2020
$’000
(Restated)
58
1,412
186
16,326
5,071
23,053
5,796
4,050
9,846
60
1,496
164
15,579
5,383
22,682
5,864
3,532
9,396
32,899
32,078
–
70
5,270
4,772
21
991
433
64
5,298
2,291
(7)
(21)
532
37
11,551
8,130
1,861
793
5,398
5,132
During the year, the Group refunded, on a voluntary basis, the grant of $223,000 received from the UK Government in 2020 with respect
to support for furloughed employees. The Group was not entitled to the Australian Government’s JobKeeper wage subsidy program.
Deal costs in relation to the LeasePlan acquisition of $8,994,000 have been expensed in the statement of profit or loss in the current
year. $5,211,000 is included within other expenses and $3,783,000 in finance costs.
SG Fleet Group Limited Note 8. Income tax
Income tax expense
Current tax
Deferred tax – origination and reversal of temporary differences
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Non-deductible expenses
Other
Difference in overseas tax rates
Adjustment recognised for prior periods
Assessed loss
Income tax expense
Amounts charged/(credited) directly to equity
Deferred tax assets
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at statutory tax rates
53
Consolidated
2021
$’000
23,354
(3,517)
19,837
2020
$’000
(Restated)
18,391
(2,769)
15,622
(3,517)
(2,769)
63,542
19,063
7
2,265
–
21,335
(1,119)
(331)
(48)
52,003
15,601
92
(92)
106
15,707
(292)
301
(94)
19,837
15,622
Consolidated
2021
$’000
2020
$’000
587
(310)
13,334
2,534
13,178
2,504
The above potential tax benefit for tax losses and temporary differences, relating to United Kingdom, has not been recognised in the
statement of financial position.
2021 Annual Report 54
Notes to the financial statements
30 June 2021
Note 8. Income tax continued
Deferred tax asset
Deferred tax asset/(liability) comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Allowance for expected credit losses
Contract liabilities
Employee benefits
Accrued expenses
Provisions
Assessed loss
Property, plant and equipment
Prepayments
Intangibles
Amounts recognised in equity:
Transaction costs on share issue
Derivative financial instruments
Deferred tax asset
Amount expected to be settled after more than 12 months
Movements:
Opening balance
Credited to profit or loss
Credited/(charged) to equity
Exchange differences
Closing balance
Provision for income tax
Provision for income tax
Amount expected to be settled within 12 months
Consolidated
2021
$’000
2020
$’000
355
4,907
3,286
2,849
3,469
–
(3,281)
(1,701)
(7,236)
2,648
345
1,335
1,680
4,328
4,328
1,435
3,517
(587)
(37)
4,328
Consolidated
2021
$’000
4,701
4,701
386
4,367
2,866
1,640
3,753
(2)
(2,280)
(1,903)
(8,776)
51
–
1,384
1,384
1,435
1,435
(1,645)
2,769
310
1
1,435
2020
$’000
390
390
SG Fleet Group Limited Note 9. Cash and cash equivalents
Cash at bank
Secured deposits
Amount expected to be recovered within 12 months
55
Consolidated
2021
$’000
202,394
28,723
231,117
231,117
2020
$’000
82,999
28,116
111,115
111,115
In April 2021 the Group raised $86,329,000 as a result of the issue of new share capital to partially fund the acquisition of the LeasePlan
Australia and New Zealand businesses. As at 30 June 2021, this acquisition had not completed and as such this additional capital had
not been deployed.
Secured deposits represent cash held by the Group as required under certain funding and insurance arrangements between the Group,
the financiers under its lease portfolio facilities and its insurance providers. The secured deposits, which is short-term in nature, are not
available as free cash for the purpose of operations of the Group.
Note 10. Finance, trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Finance lease receivables
Amount expected to be recovered within 12 months
Consolidated
2021
$’000
67,033
(783)
66,250
53
66,303
66,303
2020
$’000
55,584
(838)
54,746
–
54,746
54,746
Allowance for expected credit losses
The Group has recognised a reversal of credit loss of $69,000 (2020: credit loss of $366,000) in profit or loss in respect of the expected
credit losses for the year ended 30 June 2021.
The Coronavirus (COVID-19) pandemic driven market conditions that prevailed at 30 June 2020 have improved in the Australian and
New Zealand markets, which is reflected in the decrease in the allowance for expected credit loss.
The ageing of the receivables and allowance for expected credit losses using the simplified method is provided for above are as follows:
Consolidated
Not overdue
0 to 30 days overdue
30 to 60 days overdue
60 to 90 days overdue
90 to 120 days overdue
Over 120 days overdue
Expected credit loss rate
Carrying amount
2021
%
–
–
39.3%
39.4%
53.1%
52.7%
2020
%
–
–
29.1%
30.7%
40.2%
23.7%
2021
$’000
53,050
12,286
649
188
177
683
2020
$’000
46,844
6,041
1,363
947
351
38
67,033
55,584
Allowance for expected
credit losses
2021
$’000
2020
$’000
–
–
255
74
94
360
783
–
–
397
291
141
9
838
2021 Annual Report 56
Notes to the financial statements
30 June 2021
Note 10. Finance, trade and other receivables continued
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Unused amounts reversed
Exchange difference in foreign subsidiary
Closing balance
Note 11. Inventories
End-of-term operating lease assets held for disposal
Less: Provision for impairment
Amount expected to be recovered within 12 months
Consolidated
2021
$’000
838
–
(69)
14
783
Consolidated
2021
$’000
10,968
(249)
10,719
10,719
2020
$’000
480
366
–
(8)
838
2020
$’000
18,129
(1,788)
16,341
16,341
The market conditions as a result of COVID-19 prevalent as at 30 June 2020 have improved and this is reflected in the reduction of the
impairment required.
Note 12. Prepayments
Prepayments
Amount expected to be recovered within 12 months
Note 13. Investments in financial assets at fair value through profit or loss
Investments in listed equity securities
Investments in other companies
Amount expected to be recovered after more than 12 months
Refer to note 31 for further information on fair value measurement.
Consolidated
2021
$’000
8,844
8,844
Consolidated
2021
$’000
1,297
1,330
2,627
2,627
2020
$’000
9,163
9,163
2020
$’000
1,412
330
1,742
1,742
SG Fleet Group Limited Note 14. Leased motor vehicle assets
Leased motor vehicle assets – at cost
Less: Accumulated depreciation
Less: Impairment
Amount expected to be recovered within 12 months
Amount expected to be recovered after more than 12 months
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Disposals
Revaluation decrements
Exchange differences
Depreciation expense
Balance at 30 June 2020
Additions
Disposals
Revaluation decrements
Exchange differences
Depreciation expense
Balance at 30 June 2021
57
Consolidated
2021
$’000
121,718
(27,116)
(426)
94,176
9,350
84,826
94,176
2020
$’000
90,262
(25,942)
(205)
64,115
5,204
58,911
64,115
Leased
assets
$’000
57,258
53,178
(29,642)
(34)
(1,066)
(15,579)
64,115
73,316
(28,520)
(212)
1,803
(16,326)
94,176
2021 Annual Report 58
Notes to the financial statements
30 June 2021
Note 15. Property, plant and equipment
Leasehold improvements – at cost
Less: Accumulated depreciation
Computer hardware and office equipment – at cost
Less: Accumulated depreciation
Motor vehicles – at cost
Less: Accumulated depreciation
Amount expected to be recovered after more than 12 months
Consolidated
2021
$’000
966
(569)
397
8,528
(5,379)
3,149
2,235
(320)
1,915
5,461
5,461
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2020
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2021
Leasehold
improvements
$’000
Computer
hardware
and office
equipment
$’000
314
159
–
(5)
(60)
408
37
–
10
(58)
397
3,347
481
–
(1)
(1,496)
2,331
2,225
–
5
(1,412)
3,149
Motor
vehicles
$’000
431
184
(20)
(3)
(164)
428
1,718
(80)
35
(186)
1,915
2020
$’000
1,083
(675)
408
8,401
(6,070)
2,331
733
(305)
428
3,167
3,167
Total
$’000
4,092
824
(20)
(9)
(1,720)
3,167
3,980
(80)
50
(1,656)
5,461
SG Fleet Group Limited Note 16. Intangibles
Goodwill – at cost
Customer contracts – at cost
Less: Accumulated amortisation
Less: Accumulated impairment
Software – at cost
Less: Accumulated amortisation
Amount expected to be recovered after more than 12 months
59
Consolidated
2021
$’000
2020
$’000
(Restated)
357,880
356,465
60,012
(32,493)
(70)
27,449
25,605
(9,928)
15,677
401,006
401,006
59,613
(26,514)
(70)
33,029
27,699
(11,371)
16,328
405,822
405,822
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Exchange differences
Impairment of assets
Amortisation expense
Balance at 30 June 2020
Additions
Exchange differences
Amortisation expense
Balance at 30 June 2021
Goodwill
$’000
356,829
–
(364)
–
–
356,465
–
1,415
–
357,880
Customer
contracts
$’000
38,962
–
1
(70)
(5,864)
33,029
–
216
(5,796)
27,449
Software
$’000
15,812
4,052
(4)
–
(3,532)
16,328
3,397
2
(4,050)
15,677
Total
$’000
(Restated)
411,603
4,052
(367)
(70)
(9,396)
405,822
3,397
1,633
(9,846)
401,006
2021 Annual Report
60
Notes to the financial statements
30 June 2021
Note 16. Intangibles continued
Goodwill acquired through business combinations have been allocated to the following cash-generating units (‘CGUs’):
Australian CGU
United Kingdom CGU
Total
Consolidated
2021
$’000
305,771
52,109
357,880
2020
$’000
305,771
50,694
356,465
Impairment testing for goodwill
The impairment test was based on a value-in-use approach. The recoverable amount was determined to be higher than the carrying
amount and therefore no impairment loss was recognised. Value-in-use was determined by discounting the future cash flows based
on the following key assumptions:
• Cash flows were projected based on actual operating results and the four-year business plan. Cash flow beyond Year 5 was
projected at a growth rate of 0% (2020: 0%) for both CGUs;
• Revenue growth was projected at 6.2% (2020: 4.8%) per annum for the Australian CGU and 5.9% (2020: 6.5%) per annum for
the United Kingdom CGU;
• Direct costs were forecast based on the margins historically achieved by the business;
• Overheads were forecast based on current levels adjusted for inflationary increases; and
• The Company’s pre-tax weighted average cost of capital was applied in determining the recoverable amount. The discount rate
of 8.24% (2020: 8.64%) was used for the Australian CGU and 6.19% (2020: 6.74%) for the United Kingdom CGU.
The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on
both external and internal data sources. Projected cash flows represent management’s best estimate of the foreseeable impact of the
uncertainties on the business operations in the short-term due to COVID-19.
Sensitivity analysis
Management estimates that any reasonable changes in the key assumptions would not have a significant impact on the value-in-use
of intangible assets and goodwill that would require the assets to be impaired.
SG Fleet Group Limited 61
Consolidated
2021
$’000
23,744
(15,054)
8,690
8,690
2020
$’000
22,062
(9,943)
12,119
12,119
Total
$’000
13,586
3,946
(9)
(21)
(5,383)
12,119
1,560
(12)
94
(5,071)
8,690
Note 17. Right-of-use assets
Right-of-use assets – at cost
Less: Accumulated depreciation
Amount expected to be recovered after more than 12 months
Reconciliation
Reconciliation of the written down values at the beginning and end of the current financial year are set out below:
Consolidated
Balance at 1 July 2019
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2020
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2021
Office
premises
$’000
12,402
3,318
–
(25)
(4,406)
11,289
1,099
–
92
(4,367)
8,113
Motor
vehicles
$’000
Others
$’000
929
602
(9)
4
(833)
693
461
(12)
2
(610)
534
255
26
–
–
(144)
137
–
–
–
(94)
43
For other AASB 16 lease-related disclosures refer to the following:
• note 7 for details of interest on lease liabilities and other lease expenses;
• note 24 and note 40 for details of lease liabilities at the beginning and end of the reporting period;
• note 30 for the maturity analysis of lease liabilities; and
• consolidated statement of cash flows for repayment of lease liabilities.
2021 Annual Report 62
Notes to the financial statements
30 June 2021
Note 18. Trade and other payables
Trade payables
Accrued expenses
Amount expected to be settled within 12 months
Refer to note 30 for further information on financial instruments.
Consolidated
2021
$’000
83,869
16,924
100,793
100,793
2020
$’000
70,049
10,616
80,665
80,665
Trade payables include residual values payable to financiers, which are secured by the underlying operating lease asset, cash lock-up
of $28,741,000 (2020: $28,134,000).
Note 19. Derivative financial instruments
Interest rate swap contracts
Amount expected to be settled after more than 12 months
Refer to note 30 for further information on financial instruments.
Refer to note 31 for further information on fair value measurement.
Note 20. Employee benefits
Annual leave
Long service leave
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Consolidated
2021
$’000
1,877
1,877
2020
$’000
4,085
4,085
Consolidated
2021
$’000
5,251
5,716
10,967
10,012
955
10,967
2020
$’000
4,429
5,137
9,566
8,731
835
9,566
SG Fleet Group Limited
Note 21. Provisions
Lease make good
Residual value risk
Other provisions
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
63
Consolidated
2021
$’000
1,105
11,686
900
13,691
5,564
8,127
13,691
2020
$’000
1,056
10,704
808
12,568
5,880
6,688
12,568
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of the
respective lease terms.
Residual value risk provision
The provision is to recognise the future liability relating to residual value exposures as described in note 2 and note 3.
Other provisions
The provision represents the potential loss arising from overdrawn vehicle running cost accounts in relation to novated leases.
Movements in provisions
Movements in the provision during the current financial period is set out below:
Consolidated – 2021
Carrying amount at the start of the year
Additional provisions recognised
Exchange differences
Unwinding of discount
Unused amounts reversed
Lease
make
good
$’000
1,056
–
2
64
(17)
Residual
value
risk
$’000
10,704
943
39
–
–
Other
provision
$’000
808
92
–
–
–
Carrying amount at the end of the year
1,105
11,686
900
2021 Annual Report 64
Notes to the financial statements
30 June 2021
Note 22. Lease portfolio borrowings
Lease portfolio borrowings – non-securitised
Lease portfolio borrowings – securitised
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Consolidated
2021
$’000
64,241
800
65,041
17,162
47,879
65,041
2020
$’000
57,854
–
57,854
26,843
31,011
57,854
Refer to note 30 for further information on financial instruments.
The lease portfolio borrowings are secured by the underlying funded assets and lease agreements, together with an irrevocable letter of
credit, cash lock-ups and guarantees. These facilities are interest-bearing and are repaid monthly in accordance with the amortisation
schedule of the underlying assets.
Lease portfolio borrowings – securitised
During the financial year, the Group established a $100,000,000 limited recourse securitisation warehouse trust with commitments from
external financiers totalling $92,500,000. All amounts owing to parties to the warehouse are secured by fixed and floating charges over
all assets of the warehouse, including cash balances and lease receivables and related leased motor vehicles. The financiers to the
warehouse have no recourse to the Group, other than in relation to their role as originator and servicer of assets to the warehouse.
As at 30 June 2021, the Group had utilised $800,000 of securitised lease portfolio borrowings.
Note 23. Borrowings
Bank loans
Amount expected to be settled after more than 12 months
Refer to note 30 for further information on financial instruments.
Consolidated
2021
$’000
125,841
125,841
2020
$’000
125,140
125,140
SG Fleet Group Limited Total secured liabilities
The total secured liabilities are as follows:
Bank loans
Lease portfolio borrowings – non-securitised (note 22)
Lease portfolio borrowings – securitised (note 22)
65
Consolidated
2021
$’000
125,841
64,241
800
2020
$’000
125,140
57,854
–
190,882
182,994
Corporate borrowings
The corporate borrowings comprise of bank loans and ancillary facilities which are secured by guarantees and indemnities as well as
fixed and floating charges or composite guarantees issued by the Group. The facilities are repayable in full on the maturity date being
14 December 2022.
Financing arrangements
The Group has access to the following lines of credit:
Total facilities
Corporate borrowings
Lease portfolio borrowings – non-securitised
Lease portfolio borrowings – securitised
Used at the reporting date
Corporate borrowings
Lease portfolio borrowings – non-securitised
Lease portfolio borrowings – securitised
Unused at the reporting date
Corporate borrowings
Lease portfolio borrowings – non-securitised
Lease portfolio borrowings – securitised
Consolidated
2021
$’000
2020
$’000
186,572
87,029
92,500
177,234
79,938
–
366,101
257,172
137,602
64,241
800
129,654
57,854
–
202,643
187,508
48,970
22,788
91,700
47,580
22,084
–
163,458
69,664
2021 Annual Report 66
Notes to the financial statements
30 June 2021
Note 24. Lease liabilities – right-of-use assets
Lease liabilities – right-of-use assets
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Note 25. Vehicle maintenance funds
Vehicle maintenance funds
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Note 26. Contract liabilities
Contract liabilities
Amount expected to be settled within 12 months
Amount expected to be settled after more than 12 months
Reconciliation
Reconciliation at the beginning and end of the current and previous financial year are set out below:
Opening balance
Transfer to revenue – included in the opening balance
Increase in cash received excluding amounts recognised as revenue during the year
Closing balance
Consolidated
2021
$’000
9,015
3,592
5,423
9,015
2020
$’000
12,039
4,276
7,763
12,039
Consolidated
2021
$’000
82,542
27,729
54,813
82,542
2020
$’000
69,313
21,913
47,400
69,313
Consolidated
2021
$’000
40,617
21,124
19,493
40,617
37,905
(18,822)
21,534
40,617
2020
$’000
37,905
20,863
17,042
37,905
35,608
(18,917)
21,214
37,905
SG Fleet Group Limited 67
Note 27. Issued capital
Consolidated
2021
Shares
2020
Shares
2021
$’000
2020
$’000
Ordinary shares – fully paid
297,396,370
262,159,900
376,661
291,370
Movements in ordinary share capital
Details
Balance
Date
Shares
1 July 2019
261,896,269
Issue
price
Shares issued on vesting of performance rights
1 July 2019
132,323
$0.00
Shares issued on vesting of performance rights
Transfer from share-based payment reserve on vesting
of performance rights
Balance
Shares issued
Shares issued
Share issue transaction costs, net of tax
Balance
21 August
2019
131,308
$0.00
–
$0.00
30 June 2020
262,159,900
13 April 2021
29,247,880
30 April 2021
5,988,590
30 June 2021
297,396,370
–
$2.45
$2.45
$0.00
$’000
290,592
–
–
778
291,370
71,657
14,672
(1,038)
376,661
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders should the
Company be wound up, in proportions that consider both the number of shares held and the extent to which those shares are paid up.
The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group’s objectives when managing capital are 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. The Group
monitors capital on the basis of its gearing ratio. 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 debts.
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.
The Group is subject to certain financing arrangements covenants and meeting these are given priority in all capital risk management
decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2020 Annual Report.
2021 Annual Report 68
Notes to the financial statements
30 June 2021
Note 28. Reserves
Foreign currency reserve
Hedging reserve – cash flow hedges
Share-based payments reserve
Capital reserve
Consolidated
2021
$’000
262
(496)
2,620
2020
$’000
(1,015)
(2,767)
359
(119,158)
(116,772)
(119,158)
(122,581)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to
Australian Dollars.
Hedging reserve – cash flow hedges
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is determined to be an
effective hedge.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and
other parties as part of their compensation for services.
Capital reserve
The reserve is used to recognise contributions from or to SG Fleet Group Limited and its controlled subsidiaries by shareholders.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Change in accounting policy (note 4)
Foreign currency translation
Share-based payments
Movement in hedges – gross
Deferred tax
Transfer to share capital
Other changes
Balance at 30 June 2020
Foreign currency translation
Share-based payments
Movement in hedges – gross
Deferred tax
Other changes
Balance at 30 June 2021
Foreign
currency
$’000
Cash flow
hedge
$’000
Share-based
payments
$’000
Capital
$’000
Total
$’000
(588)
6
(433)
–
–
–
–
–
(1,015)
1,277
–
–
–
–
262
(2,118)
1,568
(119,158)
(120,296)
–
–
–
(960)
311
–
–
(2,767)
–
–
3,203
(932)
–
(496)
–
–
(178)
–
–
(778)
(253)
359
–
2,321
–
–
(60)
–
–
–
–
–
–
–
6
(433)
(178)
(960)
311
(778)
(253)
(119,158)
(122,581)
–
–
–
–
–
1,277
2,321
3,203
(932)
(60)
2,620
(119,158)
(116,772)
SG Fleet Group Limited
Note 29. Dividends
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2020 of 3.053 cents per ordinary share paid on
6 October 2020 (2020: Final dividend for the year ended 30 June 2019 of 9.520 cents)
Interim dividend for the year ended 30 June 2021 of 7.192 cents per share paid on 13 April 2021
(2020: Interim dividend for the year ended 30 June 2020 of 6.943 cents)
69
Consolidated
2021
$’000
2020
$’000
8,004
24,958
18,855
26,859
18,201
43,159
On 16 August 2021, the Directors declared a fully franked final dividend for the year ended 30 June 2021 of 5.393 cents per ordinary
share, to be paid on 9 September 2021 to eligible shareholders on the register on 26 August 2021. This equates to a total estimated
distribution of $16,039,000, based on the number of ordinary shares on issue as at 30 June 2021. The financial effect of dividends
declared after the reporting date are not reflected in the 30 June 2021 financial statements and will be recognised in subsequent
financial reports.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
Consolidated
2021
$’000
59,104
2020
$’000
53,107
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
The franking credits above excludes exempting credits.
2021 Annual Report 70
Notes to the financial statements
30 June 2021
Note 30. Financial instruments
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency 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 Board has overall responsibility for the establishment and oversight of the risk management framework. The Audit, Risk and Compliance
Committee, a sub-committee of the Board, has responsibility for managing risk. The Committee reports to the Board on its activities.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities. The Group through its training and management standards and procedures, aims to
develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
Market risk
Foreign currency risk
The Group is not exposed to any significant foreign currency risk, except for translation of financial assets and liabilities of foreign
subsidiaries into the presentation currency.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group’s main interest rate risk arises from its borrowings and cash at the bank. Borrowings and cash at bank-issued at variable
rates expose the Group to interest rate risk. Borrowings issued at fixed rates expose the Group to fair value risk. The policy is to ensure
that at least 60% of its exposure to changes in interest rates on general borrowings, unless approved by the Board, other than lease
portfolio borrowings, is on a fixed rate basis. Lease portfolio borrowings are entered into on a fixed interest rate basis, except for lease
portfolio borrowings utilised to fund lease portfolio assets in inertia and funding obtained through securitisation which are entered into on
a variable rate basis. The Group will periodically enter interest rate swaps in which the securitisation trust will pay a fixed rate of interest
and receive a variable rate of interest based on the expected amortisation profile of the securitised portfolio of leases.
As at the reporting date, the Group had the following variable rate bank accounts and other facilities after impact of hedging instruments:
Consolidated
Bank loans
Lease portfolio facilities
Cash at bank
Secured deposits
Net exposure to cash flow interest rate risk
2021
Balance
$’000
2020
Balance
$’000
(25,168)
(25,028)
–
202,394
28,723
205,949
(356)
82,999
28,116
85,731
An official increase/decrease in interest rates of 50 (2020: 50) basis points would have a favourable/adverse effect on profit before tax
and equity of $1,030,000 (2020: $429,000) per annum. The percentage change is based on the expected volatility of interest rates using
market data and analyst’s forecasts.
SG Fleet Group Limited 71
Derivatives interest rate swap
The Group has entered into interest rate swap contracts with notional/principal value as at 30 June 2021 of $106,696,000
(2020: $109,059,000). The interest rate swap contract hedges the Group’s risk against an increase in variable interest rate. The contract
is over a three year period maturing in December 2022. Weighted average fixed rate is 1.91% (2020: 1.93%).
The Group has entered into deal contingent amortising interest rate swap contracts in order to hedge the variable rate finance to
be entered into as part of the LeasePlan acquisition. The amortising interest rate swap contracts which have a notional value as at
30 June 2021 of $1,135,958,000 will commence on the completion date of the LeasePlan acquisition date and will mature in May 2025.
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 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. As disclosed in note
10, due to the Coronavirus (COVID-19) pandemic, the calculation of expected credit losses has been revised.
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.
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. Typically, the Group ensures that it has
sufficient cash or facilities on demand to meet expected operational expenses for a period of 90 days, including the servicing of financial
obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
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:
Corporate borrowings
Lease portfolio borrowings – non-securitised
Lease portfolio borrowings – securitised
Consolidated
2021
$’000
48,970
22,788
91,700
2020
$’000
47,580
22,084
–
163,458
69,664
2021 Annual Report 72
Notes to the financial statements
30 June 2021
Note 30. Financial instruments continued
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.
Consolidated – 2021
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing – variable
Bank loans
Interest-bearing – fixed rate
Bank loans
Lease portfolio facilities – non-securitised
Lease portfolio facilities – securitised
Lease liabilities – right-of-use assets
Total non-derivatives
Derivatives
Interest rate swaps inflow
Total derivatives
Consolidated – 2020
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing – variable
Bank loans
Lease portfolio liabilities – non-securitised
Interest-bearing – fixed rate
Bank loans
Lease portfolio facilities – non-securitised
Lease liabilities – right-of-use assets
Total non-derivatives
Derivatives
Interest rate swaps inflow
Total derivatives
1 year or less
$’000
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
Over 5 years
$’000
83,869
–
435
25,386
1,811
18,831
52
3,382
101,579
19,159
826
1,595
108,380
148,545
–
–
1,877
1,877
–
–
–
29,963
–
2,466
32,429
–
–
–
–
–
–
–
2,045
2,045
–
–
1 year or less
$’000
Between
1 and 2 years
$’000
Between
2 and 5 years
$’000
Over 5 years
$’000
70,049
450
361
1,800
27,920
4,674
105,254
–
–
–
450
–
1,800
11,543
2,813
16,606
4,085
4,085
–
25,253
–
101,012
20,896
3,823
150,984
–
–
–
–
–
–
–
1,550
1,550
–
–
Remaining
contractual
maturities
$’000
83,869
25,821
103,390
67,953
878
9,488
291,399
1,877
1,877
Remaining
contractual
maturities
$’000
70,049
26,153
361
104,612
60,359
12,860
274,394
4,085
4,085
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
SG Fleet Group Limited 73
Note 31. 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.
Consolidated – 2021
Assets
Investments in listed equity securities
Investment in other companies
Total assets
Liabilities
Derivative financial instruments – Interest rate swap contracts
Total liabilities
Consolidated – 2020
Assets
Investments in listed equity securities
Investment in other companies
Total assets
Liabilities
Derivative financial instruments – Interest rate swap contracts
Total liabilities
There were no transfers between levels during the financial year.
Level 1
$’000
Level 2
$’000
Level 3
$’000
1,297
–
1,297
–
–
–
–
–
1,877
1,877
–
1,330
1,330
–
–
Level 1
$’000
Level 2
$’000
Level 3
$’000
1,412
–
1,412
–
–
–
–
–
4,085
4,085
–
330
330
–
–
Total
$’000
1,297
1,330
2,627
1,877
1,877
Total
$’000
1,412
330
1,742
4,085
4,085
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade receivables
and trade payables approximate their fair values due to their short-term nature. The fair value of financial liabilities is estimated by discounting
the remaining contractual maturities at the current market interest rate that is available for similar financial instruments.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Unquoted investments have been valued using a discounted cash flow model.
Derivative financial instruments have been valued using observable market rates. This valuation technique maximises the use of observable
market data where it is available and relies as little as possible on entity specific estimates.
2021 Annual Report 74
Notes to the financial statements
30 June 2021
Note 32. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2021
$
2020
$
4,678,222
3,141,955
110,269
58,283
105,033
75,069
1,007,492
(527,549)
5,854,266
2,794,508
Note 33. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by KPMG, the auditor of the Company:
Audit services – KPMG
Audit or review of the financial statements
Other services – KPMG
Tax services
Corporate advisory
Note 34. Commitments – operating lease receivable
Committed at the reporting date, receivable:
Within one year
One to two years
Two to three years
Three to four years
Four to five years
Consolidated
2021
$
2020
$
569,410
492,676
84,017
1,390,214
1,474,231
2,043,641
119,384
26,392
145,776
638,452
Consolidated
2021
$’000
2020
$’000
19,849
12,725
9,398
5,031
939
47,942
12,880
8,771
5,174
3,181
1,141
31,147
Future minimum rentals receivable includes contracted amounts for motor vehicles under non-cancellable operating leases between one
and five years.
SG Fleet Group Limited 75
Note 35. Contingent liabilities
The Group has entered into agreements with its lease portfolio financiers under which the residual value risk inherent in operating leases
is transferred from the financier of the asset to the Group at the end of the lease. Under these agreements, at the end of the contractual
lease term for each vehicle, the Group is obliged to pay the guaranteed residual value amount to the financier. The Group then sells the
vehicles and realises a profit or loss on sale. Bank guarantees, letters of credit and cash lock-ups have been issued to lease portfolio
financiers as security for these obligations.
An amount of $11,686,000 (30 June 2020: $10,704,000) has been recognised as a residual value provision and an amount of
$426,000 (30 June 2020: $205,000) has been recognised as an impairment provision respectively, calculated on an onerous pool
basis, to cover potential shortfalls on the disposal of these vehicles.
The Group has executed certain guarantees and indemnities, as well as fixed and floating charges over the assets of the Group in favour
of funders as security for banking and lease portfolio facilities provided to the Group.
Note 36. Related party transactions
Parent entities
SG Fleet Group Limited is the parent entity. The ultimate parent entity is Super Group Limited, incorporated in South Africa and listed
on the Johannesburg Stock Exchange.
Subsidiaries
Interests in subsidiaries are set out in note 38.
Key management personnel
Disclosures relating to key management personnel are set out in note 32 and the remuneration report included in the Directors’ report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
2021 Annual Report 76
Notes to the financial statements
30 June 2021
Note 37. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Total equity
Parent
2021
$’000
(5,831)
(5,831)
2020
$’000
(718)
(718)
Parent
2021
$’000
–
2020
$’000
–
543,068
534,963
4,698
(40)
223,587
268,083
587,049
501,758
(267,568)
(234,878)
319,481
266,880
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and its subsidiaries are party to a deed of cross guarantee under which each company guarantees the debts of the
others. No deficiencies of assets exist in any of these subsidiaries. Refer to note 39 for further details.
The parent entity has also provided guarantees and indemnities for bank facilities. Refer to note 23 for further details.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
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:
•
investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity; and
• dividends received from subsidiaries are recognised as other income by the parent entity.
SG Fleet Group Limited
77
Note 38. 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
SG Fleet Solutions Pty Limited
SG Fleet Holdings Pty Limited
SG Fleet Finance Pty Limited
SG Fleet Investments Pty Ltd
SG Fleet Management Pty Limited
SG Fleet Australia Pty Limited
Fleet Care Services Pty Limited
SG Fleet Salary Packaging Pty Limited
Beta Dimensions Pty Limited
SMB Car Sales Pty Limited
NLC Pty Limited
NLC Finance Pty Ltd
NLC Insurance Pty Ltd
Vehicle Insurance Underwriters Pty Ltd
NLC Administration Pty Limited
Kerr Reinehr Group Pty Limited
NLC Services Pty Limited
SG Fleet NZ Limited
SG Fleet UK Limited
SG Fleet UK Holdings Limited
Fleet Hire Holdings Limited
SG Fleet Solutions UK Limited
Fleet Hire Limited
Car Salary Exchange Limited
Motiva Group Limited*
Motiva Vehicle Contracts Limited*
Mway Vehicle Rentals Limited*
Motiva Direct Limited*
Motrak Limited*
*
Subsidiary deregistered during the year.
Principal place of business/
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
2021
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
–
–
–
–
–
2020
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021 Annual Report 78
Notes to the financial statements
30 June 2021
Note 39. 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:
SG Fleet Group Limited (holding entity)
SG Fleet Solutions Pty Limited*
SG Fleet Holdings Pty Limited*
SG Fleet Finance Pty Limited*
SG Fleet Investments Pty Ltd*
SG Fleet Management Pty Limited*
SG Fleet Australia Pty Limited*
Fleet Care Services Pty Limited*
SG Fleet Salary Packaging Pty Limited*
Beta Dimensions Pty Limited*
SMB Car Sales Pty Limited*
NLC Pty Limited*
NLC Finance Pty Ltd*
NLC Insurance Pty Ltd
Vehicle Insurance Underwriters Pty Ltd
NLC Administration Pty Limited*
Kerr Reinehr Group Pty Limited*
NLC Services Pty Limited*
SG Fleet NZ Limited
SG Fleet UK Limited
SG Fleet UK Holdings Limited
Fleet Hire Holdings Limited
SG Fleet Solutions UK Limited
Fleet Hire Limited
Car Salary Exchange Limited
By entering into the deed, the entities (denoted above by an asterisk (*)) have opted to obtain relief from the requirement to prepare
financial statements and Directors’ report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission (‘ASIC’).
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 SG Fleet Group Limited, they also represent the ‘Extended Closed Group’.
The statement of profit or loss, statement of other comprehensive income and statement of financial position for the Closed Group
are the same as the Group and therefore have not been separately disclosed.
SG Fleet Group Limited Note 40. 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
Impairment of intangibles
Net fair value loss on investments
Finance costs – non-cash
Net gain on sale of non-current assets
Share-based payments
Leased motor vehicles – fair value decrements
Net movement in fair value of derivatives
Change in operating assets and liabilities:
Decrease/(increase) in finance, trade and other receivables
Decrease/(increase) in inventories
Increase in deferred tax assets
Decrease in prepayments
Increase/(decrease) in trade and other payables
Increase in contract liabilities
Increase/(decrease) in provision for income tax
Decrease in deferred tax liabilities
Increase in employee benefits
Increase in other provisions
Net cash from operating activities
Non-cash investing and financing activities
Shares issued under employee share plan
Additions and disposals of right-of-use assets
79
Consolidated
2021
$’000
2020
$’000
43,705
36,381
32,899
32,078
–
1,861
–
(81)
2,321
212
63
(11,557)
5,622
(2,448)
319
33,059
2,712
4,311
–
1,401
1,123
70
793
9
(24)
(178)
34
300
18,199
(6,221)
(1,435)
755
(943)
2,297
(5,269)
(1,645)
798
2,003
115,522
78,002
Consolidated
2021
$’000
–
1,548
1,548
2020
$’000
778
3,937
4,715
2021 Annual Report 80
Notes to the financial statements
30 June 2021
Note 40. Cash flow information continued
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2019
Net cash (used in)/from financing activities
Non-cash additions and disposals
Exchange differences
Balance at 30 June 2020
Net cash (used in)/from financing activities
Non-cash additions and disposals
Exchange differences
Balance at 30 June 2021
Note 41. Earnings per share
Profit after income tax attributable to the owners of SG Fleet Group Limited
Lease
portfolio
borrowings
$’000
46,178
13,101
–
(1,425)
57,854
5,675
–
1,512
65,041
Lease
liabilities –
right-of-use
assets
$’000
13,931
(5,809)
3,937
(20)
12,039
(4,696)
1,548
124
9,015
Bank
loans
$’000
125,320
–
–
(180)
125,140
–
–
701
125,841
Total
$’000
185,429
7,292
3,937
(1,625)
195,033
979
1,548
2,337
199,897
Consolidated
2021
$’000
2020
$’000
43,705
36,381
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
269,507,503
262,141,603
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Performance rights over ordinary shares
163,585
640,867
–
303,520
Weighted average number of ordinary shares used in calculating diluted earnings per share
270,311,955
262,445,123
Basic earnings per share
Diluted earnings per share
Cents
16.22
16.17
Cents
13.88
13.86
SG Fleet Group Limited
81
Note 42. Share-based payments
The Group has a share option plan and performance rights to incentivise certain employees and Key Management Personnel.
The share-based payment expense for the year was $2,321,000 (2020: credit of $178,000).
Share option plan
The share option plan is subject to a service condition and a performance condition. The performance condition is based on the compound
annual growth rate (‘CAGR’) of the Group’s earnings per share.
Set out below are summaries of options granted under the plan:
2021
Grant date
25/10/2017
25/11/2019
28/10/2020
28/10/2020
Weighted average
exercise price
2020
Grant date
25/10/2017
25/10/2017
25/11/2019
Weighted average
exercise price
Expiry date
17/08/2023
20/08/2025
20/08/2025
20/08/2026
Exercise
price
$3.66
$2.35
$1.68
$1.68
Balance at
the start of
the year
1,138,772
960,980
Granted
Exercised
–
–
–
–
1,823,951
3,235,700
2,099,752
5,059,651
Expired/
forfeited/
other
(1,138,772)
–
–
–
Balance at
the end of
the year
–
960,980
1,823,951
3,235,700
(1,138,772)
6,020,631
–
–
–
–
–
$3.06
$1.68
$0.00
$3.66
$1.79
Expiry date
21/08/2022
17/08/2023
20/08/2025
Exercise
price
$3.66
$3.66
$2.35
Balance at
the start of
the year
596,826
1,138,772
–
1,735,598
Granted
Exercised
–
–
960,980
960,980
–
–
–
–
Expired/
forfeited/
other
(596,826)
–
–
Balance at
the end of
the year
–
1,138,772
960,980
(596,826)
2,099,752
$3.66
$2.35
$0.00
$3.66
$3.06
Outstanding options exercisable as at 30 June 2021 was nil (2020: nil). The weighted average remaining contractual life of options
outstanding at the end of the financial period was 2.5 years (2020: 2.8 years).
Performance rights
The performance rights are subject to a service condition and a performance condition. The performance condition is based on the
compound annual growth rate of the Group’s earnings per share. Rights do not carry a right to receive any dividends. If rights vest and
are exercised to receive shares, these shares will be eligible to receive dividends.
2021 Annual Report
82
Notes to the financial statements
30 June 2021
Note 42. Share-based payments continued
Set out below are summaries of performance rights granted under the plan:
2021
Grant date
25/10/2017
19/09/2019
25/11/2019
28/10/2020
28/10/2020
2020
Grant date
20/03/2017
25/10/2017
25/10/2017
30/08/2018
19/09/2019
25/11/2019
Vesting date
18/08/2020
01/07/2020
21/08/2022
21/08/2022
21/08/2023
Vesting date
22/08/2019
22/08/2019
18/08/2020
01/07/2019
01/07/2020
21/08/2022
Balance at
the start of
the year
101,927
153,573
590,916
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
–
–
–
–
(101,927)
(144,382)
(9,191)
–
–
–
–
–
–
–
–
590,916
147,888
1,130,194
–
–
147,888
1,130,194
846,416
1,278,082
(144,382)
(111,118)
1,868,998
Balance at
the start of
the year
229,485
48,998
101,927
160,047
–
–
540,457
Granted
Exercised
–
–
–
–
157,426
590,916
748,342
(131,308)
–
–
(160,047)
–
–
Expired/
forfeited/
other
(98,177)
(48,998)
–
–
(3,853)
–
Balance at
the end of
the year
–
–
101,927
–
153,573
590,916
846,416
(291,355)
(151,028)
Performance rights exercisable as at 30 June 2021 was nil (2020: nil). The weighted average remaining contractual life of performance
rights outstanding at the end of the financial period was 33 months (2020: 29 months).
For the options granted during the current financial period, the Black-Scholes valuation model inputs used to determine the fair value
at the grant date, are as follows:
Grant date
28/10/2020
28/10/2020
Vesting date
21/08/2022
21/08/2023
Share price
at grant date
Exercise
price
Estimated
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
$1.69
$1.69
$1.68
$1.68
49.00%
49.00%
5.10%
5.10%
0.11%
0.13%
$0.450
$0.460
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Grant date
28/10/2020
28/10/2020
Vesting date
21/08/2022
21/08/2023
Share price
at grant date
$1.69
$1.69
Exercise
price
$0.00
$0.00
Dividend
yield
Fair value
at grant date
5.10%
5.10%
$1.550
$1.470
Note 43. Events after the reporting period
On 31 March 2021, the Group entered into an agreement to acquire the LeasePlan Australian and New Zealand businesses from
LeasePlan Corporation N.V. The acquisition is expected to complete late in the third quarter or early in the fourth quarter of 2021.
Apart from the dividend declared as disclosed in note 29 and the pending LeasePlan acquisition disclosed above, no other matter or
circumstance has arisen since 30 June 2021 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.
SG Fleet Group Limited Directors’ declaration
30 June 2021
83
In the Directors’ opinion:
•
•
•
•
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 2021 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 39 to the financial statements.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Officer
and Chief Financial Officer.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
Andrew Reitzer
Chairman
16 August 2021
Sydney
Robbie Blau
Chief Executive Officer
2021 Annual Report
84
Independent auditor’s report
to the shareholders of SG Fleet Group Limited
76 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the shareholders of SG Fleet Group Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of SG Fleet Group Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • consolidated statement of financial position as at 30 June 2021; • consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows for the year then ended; • notes including a summary of significant accounting policies; and • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Company in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. SG Fleet Group Limited 85
77 Key Audit Matters The Key Audit Matters we identified are: • valuation of goodwill; • recognition of residual value risk provision; and • measurement of deferred maintenance income. 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. Valuation of goodwill (AUD $357.9m) Refer to Note 16 to the Financial Report The key audit matter How the matter was addressed in our audit Valuation of goodwill is a Key Audit Matter due to: • the size of the balance (being 43% of total assets); and • the high level of judgement involved by us in assessing the inputs to the Group's annual assessment of impairment model, and the higher estimation uncertainty continuing from the business disruption impact of the COVID-19 global pandemic. We focused on the significant forward-looking assumptions the Group applied in its value in use model, including: • forecast cash flows, including the impact of COVID-19 on market conditions and underlying growth rates, which can vary based on the rate of economic recovery from the COVID-19 pandemic, which can vary based on a number of factors such as the number and fleet size of new customer wins, residual values, industry growth projections and inflation expectations. The Group operates across different geographies with varying market pressures, which increases the risk of inaccurate forecasts; and • the discount rates, which are complicated in nature and may vary according to the conditions and environment the specific Our procedures included: • assessing the appropriateness of the value in use method applied by the Group to perform the annual test of goodwill for impairment against the requirements of the accounting standards; • assessing the integrity of the value in use model, including the accuracy of the underlying calculation formulas; • assessing the accuracy of previous Group forecasts to inform our evaluation of forecasts incorporated in the model. We considered factors such as the number and fleet size of new customer wins, residual values, industry growth, inflation experienced and historical trends where varying market pressures existed across different geographies and how they impacted the business, for use in further testing; • working with our valuation specialists in assessing the Group's discount rates against publicly available data for a group of comparable entities and independently developing a discount rate range considered comparable using this data, taking into account impacts from the COVID-19. We adjusted this range by risk 2021 Annual Report 86
Independent auditor’s report
to the shareholders of SG Fleet Group Limited
78 cash generating units (CGUs) are subject to from time to time. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. factors specific to the Group and the industry it operates in; • meeting with management/those charged with governance to understand changes in the Group’s plans resulting from COVID-19, and potential future impacts to the Group; • challenging the Group's cash flow forecast and growth assumptions in light of the continuation of uncertainty of business disruption and impacts of the COVID-19 global pandemic, including those related to fleet size and growth assumptions across different geographies, using our knowledge of the Group and its industry. This included comparing the Group's growth assumptions to external data, such as industry growth projections and inflation expectations across different geographies; • considering the sensitivity of the model by varying key assumptions, such as discount rates and forecast growth rates, within a reasonably possible range. This allowed us to identify assumptions with a higher risk of bias or inconsistency in application, and to assess the presence of indicators of impairment; • assessing the disclosures in the Financial Report using our understanding obtained from our testing and against the requirements of the accounting standards. Recognition of residual value risk provision (AUD $11.7m) Refer to Note 21 to the Financial Report The key audit matter How the matter was addressed in our audit The recognition of the residual value risk provision is considered to be a Key Audit Matter. This is owing to the significant audit effort required and the high degree of judgement applied by us in assessing the Our procedures included: • assessing the accounting treatment of the Group’s residual value risk provision methodology to the relevant accounting SG Fleet Group Limited 87
79 Group’s residual value risk provision. We focused on gathering evidence on the completeness of the residual value calculation and other key inputs used by the Group to determine the residual value risk provision. The Group has entered into agreements with financiers which requires the transfer of the asset ownership and the associated residual value risk inherent in operating lease assets from the financier to the Group at the end of the operating leases. The determination of the probable residual value risk provision is based on the Group’s judgement in determining shortfalls on the disposal of these assets once ownership is transferred to the Group. It also takes into account market conditions and macroeconomic factors, such as inherent volatility of the asset’s disposal value due to changes in market conditions between the balance date and future date at which the assets will be disposed. It is the Group’s policy to recognise a provision if the forecast sale proceeds of the asset is less than the residual value payable to the financier. This requires us to use our judgement when considering the Group’s assessment, as the ultimate sale proceeds are subject to the condition of the asset and market conditions at the end of the lease. standards; • testing the key control for the Group's residual value risk provision process being the quarterly evaluation and authorisation of the residual value calculation by senior management; • comparing the market conditions and economic factors underpinning the Group's determination of the probable residual values against published market reports and statistical economic information, a key determinant in the residual value risk provision, for use in further testing. Our procedures included comparing the continuing impact of COVID-19 on used car sales prices against publicly available industry literature and other credible information; • assessing the Group's ability to accurately estimate residual values at the end of the lease term. This is performed by comparing the historical residual valuation of a sample of vehicles to the actual sale proceeds received from previous disposals from comparable vehicle classes; and • comparing a sample of the current residual valuation of the motor vehicles against the current market value of these motor vehicles using recent external auction prices achieved for comparable assets. Measurement of deferred maintenance income (AUD $40.6m) Refer to Note 26 to the Financial Report The key audit matter How the matter was addressed in our audit It is the Group’s policy that periodic payments received from customers for maintenance services are initially recognised on the balance sheet as deferred maintenance income. Revenue is subsequently recognised when maintenance work is completed and supplier costs incurred. The amount released from deferred maintenance income and recognised as revenue is determined based on the stand-alone selling price of the maintenance service provided. Our procedures included: • assessing the Group's revenue recognition policy against AASB 15 Revenue from Contracts with Customers requirements; • assessing the historical accuracy of the Group's estimates of life of contract costs by comparing past estimates to actual costs incurred; • analysing vehicle maintenance costs and developing expectations of maintenance 2021 Annual Report 88
Independent auditor’s report
to the shareholders of SG Fleet Group Limited
80 The measurement of deferred maintenance income is a Key Audit Matter. This is due to the audit effort and judgement involved in assessing the Group's estimations, which includes consideration of key inputs to the Group’s internal pricing cost and margin calculations, and supplier costs. expense which is a key input to the stand alone selling price of maintenance services. We used our knowledge of the Group, the composition of the Group’s fleet (e.g. vehicle makes, types and condition), and other key metrics such as number of vehicles in the fleet. We compared this to the maintenance expenses recorded by the Group; • developing expectations of the deferred maintenance income per vehicle against actual experience as obtained from our testing above. We compared this to the deferred maintenance income recorded by the Group; and • assessing the additions to deferred maintenance income by comparing a sample of entries to the underlying maintenance services billed to customers and against the amount specified in the lease. Other Information Other Information is financial and non-financial information in SG Fleet Group Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting SG Fleet Group Limited 89
81 unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of SG Fleet Group Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001. Directors’ 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 responsibilities We have audited the Remuneration Report included in pages 11 to 22 of the Directors’ report for the year ended 30 June 2021. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 KPMG John Wigglesworth Partner Sydney 16 August 2021 2021 Annual Report 90
Shareholder information
The shareholder information set out below was applicable as at 31 July 2021.
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:
Bluefin Investments Limited
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd (DRP)
National Nominees Limited
J P Morgan Nominees Australia Pty Limited
HSBC Custody Nominees (Australia) Limited
Netwealth Investments Limited (wrap Services A/C)
Robert Pinkas Blau
Misamada Nominees Pty Limited (Misamada A/C)
MDJZ Fernandes Pty Ltd (MDJZ Fernandes A/C)
Shevin Pty Limited (The Shevin A/C)
BNP Paribas Nominees Pty Ltd (IOOF Invmt Mngt Ltd DRP)
HSBC Custody Nominees (Australia) Limited
Insync Investments Pty Ltd (Weekley Super Fund No 1 A/C)
Peter Mountford
Mulcaster Super Fund Pty Ltd (Mulcaster Super Fund A/C)
NCH Pty Ltd
Macdonald Gilbert Bell
Tynong Pastoral Co Pty Ltd (Tynong Pastoral A/C)
Tark Family Holdings Pty Ltd (Tark Family A/C)
Ordinary shares
Number
of holders
% of total
shares
issued
451
535
298
476
47
1,807
147
0.06
0.49
0.74
4.00
94.71
100.00
–
Ordinary shares
Number held
178,828,160
33,889,512
13,503,364
9,559,230
9,539,473
8,521,883
7,541,966
5,961,523
1,901,065
1,330,845
779,732
760,000
737,416
595,565
580,000
567,204
469,407
465,960
465,108
441,253
% of total
shares
issued
60.13
11.40
4.54
3.21
3.21
2.87
2.54
2.00
0.64
0.45
0.26
0.26
0.25
0.20
0.20
0.19
0.16
0.16
0.16
0.15
276,438,666
92.98
SG Fleet Group Limited
91
Number
on issue
Number
of holders
6,020,631
1,868,998
10
78
Unquoted equity securities
Options over ordinary shares
Performance rights over ordinary shares
The following person holds 20% or more of unquoted equity securities:
Name
Robbie Blau
Class
Options over ordinary shares
Number held
2,653,020
Substantial holders
Substantial holders in the Company are set out below:
Bluefin Investments Limited
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number held
% of total
shares
issued
178,828,160
60.13
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy, attorney or corporate representative shall have one vote
and upon a poll each share shall have one vote.
Restricted securities
As at 30 June 2021, there are no restricted securities.
Share buy-back
There is no current on-market share buy-back.
2021 Annual Report
92
Corporate directory
Directors
Andrew Reitzer – Independent Non-Executive Chairman
Robbie Blau – Chief Executive Officer
Cheryl Bart AO – Independent Non-Executive Director
Graham Maloney – Independent Non-Executive Director
Peter Mountford – Non-Executive Director
Kevin Wundram – Chief Financial Officer
Edwin Jankelowitz – Independent Non-Executive Director
Colin Brown – Alternate Director for Peter Mountford
Company secretary
Tawanda Mutengwa
Notice of annual general meeting* The details of the annual general meeting of SG Fleet Group Limited are:
The Barnet Room
Fullerton Hotel
1 Martin Place
Sydney, NSW 2000
3:00 PM on Tuesday 26 October 2021
Registered office and
Principal place of business
Level 2, Building 3
20 Bridge Street
Pymble NSW 2073
Share register
Auditor
Telephone: +61 2 9494 1000 Facsimile: +61 2 9391 5656
E–mail: globalenquiries@sgfleet.com
The Registrar
Boardroom Pty Ltd
Level 12, 225 George Street, Sydney, NSW 2000
Telephone: 1300 737 760
E–mail: enquiries@boardroomlimited.com.au
Website: www.boardroomlimited.com.au
KPMG
International Tower 3
300 Barangaroo Avenue
Sydney NSW 2000
Stock exchange listing
SG Fleet Group Limited shares are listed on the Australian Securities Exchange (ASX code: SGF)
Website
www.sgfleet.com
Corporate Governance Statement The Directors and management are committed to conducting the business of SG Fleet Group
Limited in an ethical manner and in accordance with the highest standards of corporate
governance. SG Fleet Group Limited has adopted and has substantially complied with the ASX
Corporate Governance Principles and Recommendations (Fourth Edition) (‘Recommendations’)
to the extent appropriate to the size and nature of its operations.
The Group’s Corporate Governance Statement, which sets out the corporate governance
practices that were in operation during the financial year and identifies and explains any
Recommendations that have not been followed and ASX Appendix 4G are released to the
ASX on the same day the Annual Report is released. The Corporate Governance Statement
can be found on the company’s website at
http://investors.sgfleet.com/Investors/?page=Corporate–Governance–Statement.
Enquiries
investorenquiries@sgfleet.com
* Venue details may change in line with COVID-19 restrictions imposed at the time of meeting.
SG Fleet Group Limited www.sgfleet.com