Teaminvest Private Group Limited
ABN 74 629 045 736
Annual Report for the period 26 September 2018 - 30 June 2019
Teaminvest Private Group Limited
Contents
30 June 2019
Corporate directory
Chairman's letter
Chief Executive Officer's report
Our philosophy
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Teaminvest Private Group Limited
Shareholder information
2
3
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Teaminvest Private Group Limited
Corporate directory
30 June 2019
Directors
Katherine Woodthorpe - Chair
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Company secretary
Anand Sundaraj
Notice of annual general meeting
The details of the annual general meeting of Teaminvest Private Group Limited are:
Macquarie Graduate School of Management
Level 24, 123 Pitt Street
Sydney NSW 2000
10 am on 22 November 2019
Registered office
Share register
Auditor
Solicitors
1001A/53 Walker Street
North Sydney NSW 2060
Tel: 02 9955 9540
Computershare Investor Services Pty Ltd
452 Johnston Street
Abbotsford VIC 3067
Tel: 1300 850 505
HLB Mann Judd
Level 19, 207 Kent Street
Sydney NSW 2000
Sundaraj & Ker
Level 36, Australia Square
264 George Street
Sydney NSW 2000
Stock exchange listing
Teaminvest Private Group Limited shares are listed on the Australian Securities
Exchange (ASX code: TIP)
Website
http://www.teaminvestprivate.com.au
Business objectives
Teaminvest Private Group Limited has used cash and cash equivalents held at the
time of listing, in a way consistent with its stated business objectives.
Corporate Governance Statement
The directors and management are committed to conducting the business of
Teaminvest Private Group Limited in an ethical manner and in accordance with the
highest standards of corporate governance. Teaminvest Private Group Limited has
adopted and has substantially complied with the ASX Corporate Governance
Principles and Recommendations (Third Edition) ('Recommendations') to the extent
appropriate to the size and nature of its operations.
The Group’s Corporate Governance Statement, which was approved by the Board of
Directors at the same time as the Annual Report, sets out the corporate governance
practices that were in operation during the financial period and identifies and explains
any Recommendations that have not been followed. The Corporate Governance
Statement and Corporate Governance Compliance Manual can be found on the
Company’s website at https://www.teaminvestprivate.com.au/investor-information
2
Teaminvest Private Group Limited
Chairman's letter
30 June 2019
Dear Shareholders,
On behalf of the Board of Directors, I am delighted to present you with our first Annual Report as a listed company.
At heart, Teaminvest Private Group Limited is a specialist private equity firm that seeks to:
•
assist successful business owners grow their business and enhance their legacy;
• mentor the next generation of Australian business leaders; and
•
support Australian business by filling a missing piece in the funding landscape.
These three goals are the reason we exist, and we make all decisions with them top of mind. Our listing provides an
important platform to ensure that we can deliver them.
As a business focussed on delivering more than just increases in profit, we are guided by our operating philosophy. A copy
was attached to the Prospectus and an updated copy is included in this Annual Report. Our philosophy guides us, and we
intend to keep providing a copy to you, our owners, in all future Annual Reports to ensure that you have all the tools you
need to understand your business and contribute to this vital mission.
We trust that you will find this Annual Report a valuable tool to understand your Company better. Perhaps you will even
have suggestions in ways it can be improved in future. If so, please do not hesitate to let us know, and we will include them
if it is practical to do so.
Finally, if you have not yet considered participating in your Company as a Selected Shareholder, I would urge you to
consider it. Being a Selected Shareholder gives you a unique insight into what we do and allows you to share your
knowledge with the next generation of Australian business leaders. We find it highly rewarding and are confident that you
will too.
Yours sincerely,
___________________________
Dr Katherine Woodthorpe AO
Independent Chair
27 September 2019
Sydney
3
Teaminvest Private Group Limited
Chief Executive Officer's report
30 June 2019
Year in review
Financial year 2019 was a year of change for Teaminvest Private Group Limited (‘TIP’).
We completed a transformational restructure and listed the Company on the ASX. For many companies this would have
been the result of years of hard work, yet our incredible teams at head office and in our Portfolio Companies achieved it all
in under a year from concept to completion.
As CEO I am incredibly proud to work with people of this calibre and dedication. As a shareholder I feel exceptionally
fortunate to own a small piece of the incredible businesses developed, delivered and continually improved by this Group of
exceptional managers and mentors.
Financial results at a glance
At TIP we take the view that shareholders, as the owners of our business, must be kept as informed as possible about our
results.
To help you better understand your Company, we report our results by Segment and as Statutory Comprehensive Income
(‘SCI’). Each has its benefits and disadvantages, so between them we think you can understand the business better. It may
be overkill, but we would rather help you understand more than less about the Company you own.
Segment results
This is the revenue and EBITDA for each segment in which we invest. This measure provides shareholders with the most
granular information about our operating performance.
Whilst this is valuable in understanding the performance of each segment, you should be aware that due to accounting rules
around consolidation, ownership percentages and one-off gains and losses, it is not always true that aggregating segment
results will sum to our SCI. This is discussed more below.
($m)
Company
Engineering
Services
Revenue
FY17 FY18 FY19
EBITDA
FY17 FY18 FY19
57.7
59.6
61.6
64.1
66.0
69.7
(0.7)
1.5
4.6
3.8
3.6
3.6
Of particularly positive note are the efforts taken by the leadership team at Icon Metal (part of our Engineering segment)
during the year. I would like to publicly commend them and their board for their group focussed attitude and the efforts they
have expended to develop an enhanced depth of leadership whilst enhancing moats and attacking new markets. Their focus
on developing a mix of engineering and human moats has paid off in FY19 where they saw revenue growth of 55%, with
profit gains expected to flow through in FY20 when jobs are completed.
The leadership team at East Coast Traffic (part of our Services segment) also deserves praise for the cultural change they
have enacted. Three years ago they inherited a business that was on the decline and losing money, with a damaged culture
and a sense of futility. Today it is a dynamic business that is well on its way to delivering outstanding profit growth. Positive
cultural change is not easy and I am particularly excited to see how this young leadership team have revitalised the
business and created a great platform for rapid growth. Whilst profits were flat on FY18, we expect to see significant profit
growth in FY20 and beyond as the company expands.
I would also like to mention the team at Multimedia Technology (‘MMT’, Services segment). Whilst MMT is only partly owned
by TIP, and thus comes in “below the line”, the leadership and board of MMT have spent considerable effort this year in
enhancing career prospects for staff and building the foundations of enhanced management capacity. Their profit growth of
14% for the year has reflected this and I think they are well on their way to achieving bigger and better things in coming
years. In the year ahead I hope to see MMT’s people development strategies replicated across more and more of our
Group.
On the other side of the spectrum, our segment results were adversely affected by Graham Lusty Trailers (‘GLT’),
DecoGlaze and Colour Capital in FY19.
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Teaminvest Private Group Limited
Chief Executive Officer's report
30 June 2019
GLT sits within our Engineering segment and is a leading innovator in the logistics space. The incredible team of engineers
at GLT continue to push the boundaries of what trailers can do. In FY19, significant investment in research and development
(‘R&D’) affected our bottom line as we developed, tested, prototyped and sold two new world firsts in trailer design. Not only
were these brand new designs, with significant advantages for users, but they were for two new markets in trailer
suspension and waste management. The potential to capitalise in these new markets is very exciting and we are hopeful
that our world leading designs will result in substantial growth in the next few years as we begin to penetrate these new
markets.
DecoGlaze, like GLT, is an innovator within our Engineering segment. During FY19, the team at DecoGlaze automated the
majority of their manufacturing process to improve health and safety outcomes and increase production capacity. We
consider this investment in technology to be a very worthwhile use of funds, however the cost and distraction has had an
impact on this year’s results. A new CEO, with a revitalised sales focus, was appointed to address the concerns this change
exposed, and the run-rate at the end of FY19 appears to have things moving back in the right direction. We expect an
improved FY20 will follow.
Colour Capital invested in building capacity in FY19, increasing revenue but at a decreasing margin as they scale up to size.
Colour Capital is a franchise management business and they spent much of FY19 investing in an expanded team to assist
franchisee development and to integrate new brands as they become available due to likely consolidation in the sector.
Shareholders should be aware that there is a lag between franchise development and ultimate profit: first the franchisee
must grow before Colour Capital’s earnings increase on the back of higher franchisee revenue. As revenue grows beyond
the point of the higher costs, we expect to see Colour Capital return to (and exceed) their FY18 high.
Statutory comprehensive income
SCI is the profit accruing to the Company based on the relevant accounting standards. It encompasses consolidation
accounting where we own 50% or more of a business, equity accounting where we own a substantial share of between 20%
and 50%, and investment accounting where we own less than 20%.
As owners of the business, it is important that you are aware that SCI relates only to Teaminvest Private Group Limited.
Anything that occurred prior to the restructure (under which TIP acquired the various shareholdings in the Portfolio
Companies), is excluded. In FY19, this means SCI includes only a few months of revenue, coupled with the entirety of head
office, restructure and IPO costs.
Whilst SCI is likely to be a good measure of the consolidated results of the Group in future years, the timing of the
restructure and the application of accounting rules means that it provides a very limited picture in FY19.
I would urge shareholders to be aware of the limitations of SCI when considering this measure in comparison to the
segment results. The table below sets out our SCI for FY19, as well as a summary balance sheet. As TIP Group did not
exist as an entity prior to FY19, we cannot present comparable figures for prior years.
($m)
P&L
Revenue
EBITDA
Depreciation and amortisation
EBIT
Interest
PBT
Tax
NPAT
FY19
28.3
(1.3)
(0.3)
(1.6)
(0.2)
(1.8)
0.2
(1.6)
($m)
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Equity
Net cash / (debt)
FY19
27.7
78.0
105.7
19.9
0.9
20.8
85.0
1.5
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Teaminvest Private Group Limited
Chief Executive Officer's report
30 June 2019
One-off items affecting SCI this year
Restructure, IPO and consolidation expenses
The total cost of our IPO and restructure was $1.3m, and this is reflected in our FY19 statutory financial statements. There
were no fees paid to brokers to support the listing as we did not proactively encourage investment from outside our existing
shareholder and customer base.
As part of the restructure, we incurred $1.6m of consolidation expense adjustments. These are non-cash profit reductions
related to the application of tax and accounting rules around the restructure and consolidation. Slightly offsetting these one-
off expenses, is a one-off consolidation gain of $0.4m due to related party debt write-offs that occurred as part of the
restructure. The net difference of $1.2m sits within our statutory financial statements for FY19.
We have taken the full impact of the IPO and restructure in FY19 so we can present you with a clean set of accounts next
year. It also has the added benefit of providing the Group with a net carry forward tax loss of approximately $2.5m which we
can utilise in the future.
FY20 windfall gain
As part of the restructure we have identified approximately $0.7m of cash unlocked with the unwinding of the old trust
structure that will return to the Group as a one-off gain in FY20. This does not appear in the FY19 segment results or SCI.
Adoption of AASB15
The adoption of AASB 15 for the first time across the Group resulted in substantial changes to the accounting policies
adopted by our Portfolio Companies. In particular, AASB 15 adopts a significantly more conservative approach to how
engineering companies must account for revenue on unfinished jobs when compared to historic accrual accounting. As
conservative investors, we believe that AASB 15 is a significant improvement on the prior system and we are pleased to see
it adopted across our Group.
The result of this change in policy is that $0.8m of profit that would, under the old standard, have been booked in FY19
across our Portfolio Companies has now been deferred to FY20. This reduces FY19 profits (both at our segment results and
SCI) but provides a “free kick” for next year.
Why is there no consolidated ‘Pro Forma’ result?
Astute readers will have noticed that my letter does not contain a consolidated ‘Pro Forma’ FY19 P&L that is directly
comparable to the Group results in our prospectus.
We had intended to provide a Pro Forma (or ‘like for like’) comparison to FY17 and FY18, but the accounting rules have
prevented us from doing so without many lines of normalisations and adjustments. When confronted with reporting our
results in this obtuse manner, we have taken the advice of Warren Buffett and Charlie Munger that owners should be wary
of the second half of the first word in “underlying results”.
Whilst we have not provided a Pro Forma P&L, I do not think shareholders would be too far off the mark if they simply
summed our segment results. This would not take into account head office, restructure and IPO costs, or other one-off
gains, but as our operating segments present the vast bulk of our income and expenses in any year, an aggregation of them
would be a reasonable “guesstimate” of Group results on a continuing basis.
Personally, I am looking forward to FY20 where accounting rules will allow a much more meaningful presentation of our
Statutory Comprehensive Income!
Year ahead
With our IPO complete, FY20 is expected to be a year of exciting development for the TIP Group.
We are confident that our outstanding Portfolio Company management and boards are looking forward to enhancing their
businesses in FY20, aided by our new and improved listed structure. Our Portfolio Companies are led by great management
and are supported by teams of volunteer Selected Shareholders who are focussed on mentoring them to new heights.
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Teaminvest Private Group Limited
Chief Executive Officer's report
30 June 2019
Some of these great teams delivered outstanding results in FY19, whilst others had challenges. My hope is that next year
they will all have more ups than downs, but I also know that the world does not always work that way. It is impossible to
predict the future, but I am confident that the hard work, great ethics and dedication of our growing team of business leaders
will deliver long term success regardless of any bumps they experience in the road on the way.
At head office we have developed a great team who are devising new and exciting profit centres for the Group, as well as
continually examining new investment opportunities. During FY19 we considerably improved the financial assistance we can
provide our Portfolio Companies via a corporate restructure and the employment of our new CFO Dean Robinson. Dean
brings a wealth of knowledge to the Group, and we are already seeing the benefit in those Portfolio Companies who have
leaned on him for advice developing vastly streamlined and more profitable administrative processes.
We have also recently hired three outstanding young(er) business leaders to help Portfolio Companies develop new income
streams. As it is still early in this process we don’t think it is appropriate to say more, but we encourage you to stay tuned as
I am sure these new executives will become a great asset to TIP and develop profitable new income streams.
In addition to growing our existing segments, we expect to recommence our acquisition path in FY20, aided by our new
listed structure and an ever-growing team of Selected Shareholders. As owners of the business, we encourage you to look
into this unique facet of our business and consider applying so that you too can pass on your knowledge to the next
generation of outstanding Australian business leaders. Selected Shareholders can become involved in all stages of our
investment cycle from initial analysis through to serving on Portfolio Company boards: it is a highly rewarding experience
and I encourage you to consider if you would find it as enjoyable as we do.
Long term goals
Our mission at TIP is to facilitate the profitable transfer of knowledge between generations. To do this we partner with
outstanding niche businesses and, through the provision of strategic advice, Selected Shareholders, and our balance sheet,
assist them to develop as leaders and as companies.
Looking forward ten years we want to develop and grow an ever-increasing portfolio of entrepreneurial CEOs who think
differently to their competition and enhance society whilst delivering outstanding profits. Whenever we look at acquiring a
new business, or mentoring an existing one, we do so through a lens of growing management and business capability: our
people and our moats.
Ten years from now I would like to see a group that:
• has over 20 portfolio investments; with
•
• provides a growing and rewarding career opportunity for entrepreneurial, profit-driven, leaders.
substantially increased recurring profits; that
The scale of this challenge is large. Today we have eight portfolio investments, and we have only just begun to examine
Group and divisional career development opportunities. It will require a mix of substantial organic growth from our
outstanding existing businesses, as well as acquiring complementary new investments led by talented leaders who share
our values. As we enable our best leaders to develop their skills and the areas they control, I expect to see our profits rising
at an increasing rate. It won’t be easy, but we have the foundation of a team of outstanding leaders that can deliver.
I expect you will ask why we have set such an ambitious goal. Our answer is that we believe continued growth is imperative
to reward our shareholders for their support and to create space for outstanding leaders within our Group to rise beyond
their current roles. If we develop the skills of our people, whilst providing support and tools, then I have every confidence
that we will meet our twin goals of intergenerational development and profit growth.
A final word
Whilst each year presents new challenges and opportunities, in the long run we are confident that a mix of successful
management teams, surrounded by dedicated mentors, with access to our Group philosophy and balance sheet will deliver
outstanding results for the legacy of the businesses in which we invest, and reward our shareholders for their support.
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Teaminvest Private Group Limited
Chief Executive Officer's report
30 June 2019
I remind all of our shareholders that we are, at our core, a natural acquirer and developer of executives and SMEs. If you
are the owner or leader of an SME, or know of one, who has reached a stage in their development where access to the
mentorship, support and the balance sheet that TIP can provide will help you take your business to the next level, we would
like to hear from you. Owners looking to sell out completely, or financial advisers looking to make a quick buck, need not
apply.
I look forward to seeing as many of you as possible at our AGM or subsequent events.
Best wishes
___________________________
Andrew Coleman
Managing Director and Chief Executive Officer
27 September 2019
Sydney
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Teaminvest Private Group Limited
Our philosophy
30 June 2019
1. Glossary
Term
BESM
Company
Executives
Definition
Break-even safety margin
Teaminvest Private Group Limited (‘TIP’), ABN 74 629 045 736
The executive team of a Portfolio Company. Usually the Chief Executive Officer,
Chief Financial Officer and Chief Operating Officer.
Founders
The founders of a Portfolio Company.
Group
KPI
The Company, TIP, each Portfolio Company and their respective subsidiaries.
Key performance indicator.
Management
The management team of a Portfolio Company encompassing the Executives and
their managerial reports.
Portfolio Company
A private Australian business which the Company has (or, historically, TIP’s
members have) invested in.
Selected
Shareholders
A Shareholder who has been selected by the Company to participate in the
Company’s investment process or ongoing management.
Shareholder
A holder of shares in the Company.
SMaRT
SMEs
TIP
TIPBars
TIPRep
TIPTool
full day meeting convened between a potential
A
management and attended by select investors.
investment’s board and
Small and medium-sized enterprises.
Teaminvest Private Group Limited.
The Teaminvest Private Board accounting reporting system, a management tool
used by the Company for assessing the financial performance of Portfolio
Companies.
A Selected Shareholder who has been nominated by the Company (from time-to-
time) to act as a nominee director of on the board of a Portfolio Company.
A proprietary financial analysis tool used by the Company for assessing the financial
impact of various Portfolio Company decisions.
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Teaminvest Private Group Limited
Our philosophy
30 June 2019
2. Guidance for investors
2.1 Portfolio approach
Diversification is a cost-effective way to reduce risks and improve returns in financial markets. We consider it wise to spread
our investments over a portfolio of underlying companies, rather than investing in only one – no matter how much we may
like the company and the management. Over time, this should provide better returns at lower risk.
2.2 Risks and opportunities over 5 years
Companies do not commonly run for 5 years without disappointments or ‘bad’ news on the sector, their market or the
general economy. Our Portfolio Companies also expect short-term disappointments and ‘bad’ news. Being smaller than our
group as a whole, they may experience larger ups and downs than we do. Investing in the Company is not risk-free. We
expect our Investment Committee, TIPReps and Strategy Committee will keep a keen eye out for structural or long-term
negative news that may be a sign of an eventual capital killer, but we are human and could miss them or fail to act
appropriately.
2.3 Long-term investments
In private equity, it takes several years before we can begin to consider the success of an investment. When you choose to
make an investment in the Company, we suggest a similar logic applies. Some shareholders may trade in-and-out of our
shares regularly, however we believe value creation has a different cadence and does not move daily. We consider an
investment in the Company is best held for the medium or long term.
2.4 Guidance for Selected Shareholders
In addition to being a passive shareholder of the Company, Shareholders may apply to participate directly in our investment
process by applying to be appointed a Selected Shareholder. A Shareholder may wish to become a Selected Shareholder
for a number of reasons including:
• passing their knowledge and experience to a younger generation;
• mentoring an already successful CEO as they develop their business;
•
• giving back to the Australian business community.
seeking more intellectual stimulation than possible from passive investing; or
Any shareholder may apply to become a Selected Shareholder. Before being accepted, they are required to undertake a
rigorous selection process and must demonstrate the appropriate skills, alignment and acumen to either participate in the
investment process, or to provide guidance and mentorship. The role can be highly rewarding, but it comes with significant
responsibilities as outlined throughout this document.
This section provides a detailed overview of the Company’s philosophy towards Selected Shareholders.
2.5 Ways Selected Shareholders can contribute to the Group
Participation as a Selected Shareholder may involve:
Participating in SMaRT meetings: Selected Shareholders may be invited to participate in management meetings with
potential investments. SMaRT meetings improve our initial analysis on whether or not to invest and, if an investment
proceeds, also improve how we manage the Portfolio Company in future years. The application of collective wisdom at
SMaRT meetings is a crucial stage of the Group’s investment process.
Commercial due diligence: Selected Shareholders may be invited to participate as members of the committee formed to
conduct due diligence on a potential investment. Commercial due diligence is designed to confirm the initial assessment of
the SMaRT meeting, to confirm the moats identified, to confirm there are no misunderstood or significant risks, and to
confirm that Portfolio Company management are suitable for investment by the Group. This committee forms a key risk
mitigation step for our investment process.
Strategy days: Selected Shareholders may be invited to attend strategy days attended by the Board, Company
management, the management of Portfolio Companies and TIPReps. Strategy days are designed to provide insights and
ideas for future growth.
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Teaminvest Private Group Limited
Our philosophy
30 June 2019
Adviser, Consultant or Interim Executive: Selected Shareholders – depending on their professional experience and
mentoring skills – can help increase value for the Group by becoming a TIPRep or providing assistance in other ways, for
example as an adviser, consultant or interim executive to a Portfolio Company. Once TIPReps understand the most
important profit-levers in a particular business, (assisted by our TIPBars reporting system), they can assist our investments
to deliver outstanding returns.
2.6 Compliance with policies
Selected Shareholders are required to agree to be bound by all Company policies including our investment philosophy,
confidentiality obligations and the Company’s securities trading policy. In particular, Selected Shareholders will be subject to
the same trading restrictions that apply to the Company’s Board and management. An investor seeking to become a
Selected Shareholder should seek their own advice before applying to ensure they are familiar with all relevant legal and
compliance obligations.
3. Guidance for TIPReps
3.1 Introduction
Investing in TIP opens the opportunity for select shareholders to be a non-executive board member (‘TIPRep’) of a Portfolio
Company. The following section provides guidance for shareholders who may be interested in applying for the role of
TIPRep. It is not an attempt to take into account legal obligations as a board member. For that, we refer you to the
Australian Institute for Company Directors, ASIC and ASX Governance documents, amongst others.
Our approach draws on how Warren Buffett and Charlie Munger stimulate the management of their private businesses to
grow profits organically and via bolt-on acquisitions.
TIPReps are appointed to instil our philosophy into our Portfolio Companies. We expect them to deliver:
1. A clear and obvious path to significant capital gain over the longer-term; while
2. Providing attractive periodic dividends to the Company in return for the funds we have invested
We expect TIPReps to transfer wisdom and experience to our executives – enabling them to grow as CEOs, generate
increasing free cash, and materially increase the value of the business. This is often accomplished by providing an attractive
vision to keep creative juices flowing and enthusiasm high.
3.2 The role of a TIPRep
TIPReps have five roles for which they are appointed and against which their performance is judged. These are to:
1. Mentor executives;
2. Allocate capital within the business;
3. Strengthen moats and reduce risks;
4. Ensure compliance with all laws, regulations and governance requirements; and
5. Deliver regular dividends to TIP.
The best TIPReps are those who regularly examine and improve upon these objectives. TIPReps that fail to do so will be
replaced over time as they are letting themselves, our executives, and our shareholders down.
Mentoring executives: TIPReps are responsible for mentoring executives. Mentorship is distinct from managing: it involves
guiding, educating and encourage executives to think differently to enhance their skill set and grow the business in a
visionary manner. It does not include getting involved in day-to-day decision making or short-term tactical considerations
which are the role of executives. Executives are responsible for delivering monthly results and, if TIPReps become
concerned that executives are not delivering appropriately, they should look to enhance or replace the executive team rather
than becoming quasi-executives themselves. TIPReps should ensure that they understand the distinction between acting as
a director or a member of the executive team.
Allocating capital: TIPReps are responsible for examining and approving capital allocation within the business. Capital can
be used in three main ways: funds for organic growth towards the long-term strategy of building value; funds for bolt-on
acquisitions that can increase future dividends and capital value; and returning capital to TIP via attractive dividends. TIP
expects that all companies should deliver a combination of increased value and attractive dividends over time.
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Teaminvest Private Group Limited
Our philosophy
30 June 2019
Strengthening moats and reducing risks: One of the key responsibilities of a TIPRep is to continually seek ways to
strengthen moats and reduce risks. Strengthened moats allow the business to increase profitability and grow faster.
Reduced risks ensure that profits and dividends can continue to grow without undue stress. TIPReps would do well to
remember that the simplest way to reduce risk is to improve the Break-Even Safety Margin (‘BESM’), and one of the key
tasks of a board is to ensure that the BESM continues to increase over time.
Ensuring compliance: One of the biggest risks to any business is damage to reputation or the advent of litigation. Ensuring
a culture of compliance to the highest possible standards helps to protect each Portfolio Company and the Group as a
whole. As the saying goes: “it takes a lifetime to make a reputation, and one oversight to ruin it”.
Delivering regular dividends to TIP: When TIP agrees to acquire a share of a business we do so on the expectation it will
deliver returns to our shareholders for the use of their funds, the effort they put in as mentors, and the belief they place in
executives and TIPReps. The best proof of success of any Portfolio Company and its TIPReps is delivering on this
expectation.
3.3 Preparation before becoming a TIPRep
Application: If you have experience or other wisdom to offer, please make your interest known to the Company. Following a
formal selection process, we may appoint you to the board of one of our Portfolio Companies as a TIPRep. TIPReps serve
at the pleasure of the Company and can be removed or replaced at any time.
Compliance obligations: TIPReps are bound by the same legal and compliance obligations as Selected Shareholders.
This includes adherence to the Company’s investment philosophy, confidentiality obligations and securities trading policy.
Desirable experience: Whilst there is no set formula for a great TIPRep, candidates should have run a larger business (in
terms of staff, revenue and profits) than the business on which they serve. This enables them to better mentor executives
and grow the company. TIPReps should enjoy thinking about visionary opportunities as this is one of the key roles of a
board or mentor. An understanding of accounting, corporate law and governance are valuable but not a prerequisite.
Prior participation in the SMaRT and due diligence process: It is preferable for potential TIPReps to have previously
participated in SMaRT and due diligence processes. This enables them to better understand our philosophy and the ways
they can add value. We consider it advantageous for TIPReps to have participated in the SMaRT and due diligence process
for the business to which they are appointed. This provides a greater understanding of the moats the company should
enhance (to drive profits), the future risks the company should mitigate or prepare for (to avoid or minimise losses) and the
personalities involved. If a potential TIPRep has not participated in the specific SMaRT and due diligence, we will usually
require them to attend board meetings as an observer before we confirm their appointment.
SMaRT and due diligence reports: Before their first board meeting, TIPReps should review the SMaRT and due diligence
reports. These contain analysis of the rationale behind our investment, and the moats and risks identified. Knowledge of
these is a pre-requisite to adding value as a board member.
Terms of acquisition: TIPReps should ensure they understand the key acquisition terms. These differ by company and
may include performance hurdles, conditional payments, remuneration packages, debt funding arrangements, vendor
financing and succession plans. TIPReps should periodically review progress against the terms of acquisition and keep TIP
informed.
TIPBars and TIPTool: TIPReps must be familiar with TIPBars and TIPTool, our two proprietary financial analysis tools.
TIPBars provides a standardised set of board financial reporting across the group. It also contains built-in audit functions to
enhance the integrity of financial reporting. TIPTool allows the board to easily model alternative paths for substantially
increasing profits. If substantially increasing profits were easy, executives would already have done so. TIPTool allows
board and management to have an accurate and robust discussion about the most practical path to achieve their targets.
3.4 Common learnings
TIPReps have experienced the following common learnings:
1. Many creative entrepreneurs are wonderfully successful through inspiring and motivating their staff to work ‘miracles’
and their clients to pay highly for their products. However, many see financial record-keeping and reporting to a board
as a distraction. TIPReps must work to address this concern by showing how regular reporting and discussions can
increase profits and enhance decision making: in other words create an environment where the board encourages
profitable action, not just rear-view examination. TIPReps who are most familiar with TIPBars and TIPTool will find they
can manage this cultural shift fastest as these two tools will immediately help executives gain value from their board.
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2. SMEs rarely have a superb team of decision-makers reporting to the CEO. They will have an organisation chart, but we
can expect most decisions are taken by the founder who built the business. Our Portfolio Companies executives may
not yet have management to whom they can delegate or may not yet feel comfortable delegating responsibilities.
TIPReps should aim to progress towards more delegation to quality management. This will free our Portfolio Companies
to work on more exciting profit opportunities - thus delivering higher profits.
3. A year may elapse between when our Portfolio Companies approach a broker to market their business, to when we
finalise contracts and appoint TIPReps. Sales and profits may become secondary to ‘doing the deal’. Working with a
board may also initially distract our Portfolio Companies. Together this may cause revenue and profits to disappoint -
until TIPReps once again focus our Portfolio Companies on driving the profits.
4. After parting with part of their baby, Portfolio Company executives may wonder if they made the right decision. If there is
more than one senior executive or founder, one may feel regret more keenly, causing internal friction. TIPReps should
provide a vision of a more attractive and growing baby via a roadmap over time for substantial personal growth and
profit growth.
5. Executives working ‘in the business’ rarely have time to think in a visionary way ‘outside of the business’. Day-to-day
issues keep them busy and are most likely to be reported to the board. TIPReps should not involve themselves in day-
to-day business and instead should constantly work on suggesting substantial profit opportunities or alleviating major
risks. A TIPRep who finds themselves involved in day-to-day decision making, is doing a disservice to executives and
their fellow shareholders.
3.5 Interacting with executives
First meeting with executives: Once all contracts are signed, TIPReps should formally meet executive board members to
learn ‘what makes executives tick’. It is easier to build profits with someone we understand. This provides a first opportunity
to learn more about the business, discuss with our executives the moats and risks identified during the SMaRT and Due
Diligence, and to find out what they have already done to strengthen moats and eliminate, mitigate or manage risks.
Understanding the business: It takes time for TIPReps to understand the most important Key Performance Indicators
(‘KPIs’) that drive profits. Executives should already know what is most important to measure. In early months, TIPReps
would be wise to ask: “What are the most important things you think we should know about the business this month?” Once
TIPReps feel they understand the major profit drivers, they should set ranges with the CEO for KPIs in TIPBars.
Outside consultants: TIPReps should not recommend ‘outside consultants’ or ‘outside professional help’. A key strength of
our model is that the Company can add value that Portfolio Companies would otherwise pay for. If executives suggest the
need for outside consultants, TIPReps should first seek advice from the Company or Selected Shareholders. This costs
nothing and is preferable to seeking outside assistance.
Long-term focus: Executives should continue focusing on profitably running the business. TIPReps should explore longer-
term opportunities to strengthen the moats, reduce capital killing risks, substantially increase net profit margins, and add
material long-term value to the business.
Executive remuneration: On acquisition, Portfolio Company founders make a conscious trade-off between a smaller
payment for their shares combined with higher ongoing remuneration, and a larger payment with more modest ongoing
remuneration. Therefore, it is not recommended to re-balance this equation shortly after acquisition. The multiplier effect of
the normalised acquisition multiple invariably causes our Portfolio Company founders to choose the higher payment for their
shares, combined with modest ongoing remuneration – less than they could have expected were they simply employees.
The multiple paid indicates the number of years before remuneration need usually be reviewed, but rapid profit growth will
shorten this time. TIPReps, in turn, contribute to the business for an honorarium while other Selected Shareholders may
advise at zero cost. Any increase in remuneration for executives should be tied to increased profits and the achievement of
higher dividends.
Succession planning: Risks associated with key management personnel are front-of-mind when the board interacts with
management. This risk scores highly in every SMaRT. TIPReps should ameliorate this risk by encouraging our Portfolio
Company executives to delegate and to develop an executive team. Within a few years of investment in a Portfolio
Company, the board and CEO should have identified an appropriate successor for an emergency - or should the CEO retire.
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Growth planning: Most valuable is for TIPReps to assist Portfolio Company founders to develop a team of talented reports
who enjoy doing what our Portfolio Company founders enjoys least. This will free up the time of our CEOs for strategic
thinking to add value in conjunction with their board, rather than being immersed in day-to-day management.
Focus on BESM: A powerful way of reducing risks is by increasing the gap between sales revenue and the Break-even
Point of the business. This increases the BESM (Break-Even Safety Margin). Replacing fixed costs with variable costs
increases BESM and reduces risk. Focussing on increasing BESM is a key hallmark of a successful business.
Size of companies and expected volatility: Our Portfolio Companies are predominantly SMEs. Missteps by management
or TIPReps can wipe out short-term profits, while good decisions can hugely lift short-term profits. Even when long-term
profits are excellent, short-term profits may vary between disappointing and enthusing. Experience shows us that the most
effective way to reduce volatility is by increasing BESM.
Trustworthiness: It is a pre-requisite that the executives who manage the business are trustworthy. If TIPReps are ever
concerned that this is changing, they should inform the Strategy Committee immediately and in the strongest possible terms.
Frequency of board meetings: Board meetings should be held monthly. Meetings should be face-to-face with an option to
join by teleconference. If board meetings are taking full days, chances are TIPReps are becoming involved in issues best
left to management. A few days prior to the board meeting, each CEO should provide the monthly TIPBars financial report
plus a short explanation on any issues on which they seek input.
Helping our Portfolio Companies grow: TIPReps should inspire, mentor, and act as a sounding board for our executives.
They should regularly ask themselves three questions: “What visionary ideas can we suggest to substantially grow profits?”
and “How can we help make the CEO’s role simpler?” and “How can we assist the CEO make faster and more profitable
decisions?”
Mindful they have sold ‘part of their baby’: Portfolio Company founders have sold ‘part of their baby’ which they loved
and nurtured for years. Nothing will faster demotivate them, and destroy the value of our investment, than giving the
impression ‘the baby is ugly and needs cosmetic surgery’. It is natural for one or more executives to initially experience
some vendor remorse. This should dissipate once they realise we are working towards growing the business and
substantially increasing profits.
Financial terminology: Executives of SMEs may appear unsophisticated in the use of financial terminology or reporting
procedures. Fortunately, financial terminology and detailed reporting are not a pre-requisite for building a great niche
business. However, they become more important as the business grows. TIPBars will provide financial information most
useful to TIPReps. Executives can provide any other information they know is important. Meetings can then focus on “what
can we do to build free cash and profits” and testing this in TIPTool.
Instructing management: The board as a whole may instruct executives. Individual board members should never do so.
3.6 Capital management and board strategies
Dividends and cash buffers: The boards of our Portfolio Companies have a responsibility to return part of profits as free
cash to the Company via periodic dividends. This should be balanced with having a sufficient cash buffer in the business
after paying off external debt. A more cyclical business should hold a larger cash buffer.
Bolt-on acquisitions or disposals of divisions: Each board should continually monitor their markets for a substantial
increase of profitability via a bolt-on acquisition. Conversely, they may conclude that the business would be more profitable
after the disposal of an unwanted division. Such major capital allocation decisions should be referred to the Strategy
Committee for assistance.
More capital or debt: It is our philosophy that debt increases risk. Boards should avoid raising debt unless it is for highly
profitable organic growth or accretive acquisitions.
Focus on high margin revenue: Market share is vanity, profits are sanity and free cash flow is reality! We acquire niche
businesses that make higher profits and generate more cash from increasing margins, than from chasing market share. This
can be quickly tested using TIPTool. Good strategy often involves turning away low-margin business. If a business is short
of cash, the chances are the margins are too low. In niche businesses, it’s often easier to increase value through increasing
margins than increasing size.
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Moats and outside circumstances: ‘Circumstances beyond our control’ are often blamed for a profit downturn. TIPReps
should look beyond this and seek ways the company can increase profits even in a downturn. If profits disappoint, and
TIPReps can’t immediately find a way to fix this, raise it with the Strategy Committee quickly, so we can brainstorm ways of
benefiting from adversity – whether real or perceived. Outside influences can often be overcome by a concerted effort to
strengthen moats.
Deal with causes not symptoms: Niche businesses may experience cash-flow challenges from time to time. TIPReps and
executives must strengthen the businesses by dealing with the cause of cash-flow problems, rather than dealing with
symptoms. TIPTool can be useful for this. Eliminating causes of cash-flow challenges can add huge value to any
investment.
Leverage technology: Technology, data and online connectivity are rapidly changing the world. Every business will be
affected. Those that remain stuck in the past find competitors able to offer similar outcomes cheaper or faster, or superior
products at the same prices. Those that embrace ‘modernisation’ benefit via higher margins. TIPReps should continually
seek to modernise everything our Portfolio Companies do to stay ahead, and to improve margins against the competition.
The outcomes of any costs and margin improvement can easily be checked in TIPTool.
Use our tools: TIPBars and TIPTool allow the board to model the various alternative paths for substantially increasing
profits. TIPReps should frequently use TIPTool to strengthen the business by testing the likely increased profits from the
choices of increased sales, decreased fixed or variable costs, and increased prices. No path is likely to be easy, but
choosing the best path to profit is made easier using TIPTool.
3.7 Culture
Skills available: An incredible range of skills and experiences are available from Selected Shareholders. TIPReps should
regularly contact the Strategy Committee to seek advice about the challenges they face.
We are all in it together: Boards of profitable niche businesses work as a non-hierarchical team. To maximise profits, board
members should ensure a culture of open, frank and enjoyable cooperation between executives (who know the business
very well), non-executives (who know business principles well) and the Strategy Committee.
Serving while you add value: TIPReps should stay on a board while they remain enthusiastic about the business and feel
they can help deliver excellent returns. When considering whether to serve another year on the same board, you should
assess how you have added value to date, and how you can add further value in the coming year.
Comfort with executives: TIPReps and Portfolio Company executives must get along well professionally to be successful.
If a TIPRep is uncomfortable with an executive for personal reasons they should inform the Strategy Committee and seek to
be replaced. If a majority of TIPReps are uncomfortable with an executive, they should inform the Strategy Committee
immediately so that we can replace that executive (if we control the Portfolio Company) or find a timely exit (if we are a
minority shareholder).
Making improvements: Businesses of the size of our Portfolio Companies are unlikely to have the resources to implement
more than one ‘improvement’ at any time. A board that successfully implements one substantial profit improvement in any
half-year has provided excellent value. Asking a CEO to implement several ‘improvements’ simultaneously, risks
overwhelming executives and almost certainly ensuring the ‘improvements’ won’t happen.
Cash flow is king: The value of a business is in the cash it generates. If the business is paying attractive half-yearly
dividends to the Company, and earnings are growing, TIPReps and executives are doing an excellent job. However, if this is
not happening, then TIPReps and management are letting down shareholders and themselves. If the TIPReps can’t see a
way to deliver attractive dividends, they should request the help of the Strategy Committee or request to be replaced.
3.8 Reporting to TIP
Strategy Committee: TIPReps report to the Strategy Committee. The Strategy Committee will meet with each board on a
quarterly basis to assess performance and provide advice.
Annual reports and reporting to TIP: Each company must report regularly to the Strategy Committee and produce an
annual report. Whilst annual reports are not widely distributed, they are an important strategic tool that disciplines each
company to regularly set and track results against their targets. They are also invaluable should we one day decide to raise
capital for, divest, or spin-out one of our Portfolio Companies.
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Budgets and cash flow projections: Whilst detailed budgets and cash flow projections have been shown to improve
results in large corporations they can be detrimental to profits in smaller entrepreneurial companies when they shift focus
from ‘acting’ to ‘reporting’. A simple high-level target, accompanied by a report on the main variables (‘KPIs’) contributing to
the Break-Even Point (‘BEP’) and the approximate net profits at any level of sales above the BEP significantly improves
profit generation in smaller niche companies. TIPBars and TIPTool automatically provide the BEP, Profit, and Break-even
Safety Margin (‘BESM’) for all possible scenarios. The Strategy Committee will work with each Portfolio Company to
establish appropriate long term profit and cash flow targets.
Strategy days: Twice yearly, TIPReps and executives are required to attend Strategy Days. Each Portfolio Company is
expected to develop their plans for one or more of the four ways for delivering shareholder value: 1. Maximising half-yearly
dividends; 2. Organic Growth or a new division using the current assets of the business; 3. Bolt-on acquisitions or growth
that may require additional capital at attractive returns; 4. Combining with another Portfolio Company to enhance the returns
from each.
4. Guidance for executives
4.1 The role of executives
Executives have four roles for which they are appointed and against which their performance is judged. These are to:
1. Deliver monthly profits;
2. Manage the cash;
3. Mentor younger managers and develop good culture; and
4.
Increase BESM.
The best executives are those who regularly work on fostering a high performing culture to deliver growing profits and
margins. TIPReps are there to mentor management to deliver on these key goals, but ultimately it is the responsibility of
executives to manage day-to-day operations and deliver monthly profits.
Monthly profits: Good businesses are designed such that they rarely make a loss in any month. Great businesses are
those that never do. The primary role of an executive is to ensure that the business is designed and operated such that
monthly profits are expected and delivered year in, year out. Executives should seek guidance from TIPReps and the
Strategy Committee if they are ever unsure how better to ensure this.
Managing the cash: Cash flow is the lifeblood of any business. Great executives look at ways of not only growing profits
but enhancing cash flow which can then be made available for reinvestment or delivering healthy dividends to shareholders.
Building a healthy cash buffer ensures executives can sleep easy knowing that they are protected from any unexpected
headwind. It also allows for healthy dividends which is the fastest way for executives to gain promotion within the group or
receive a pay rise. Conversely, an executive that regularly needs to “mine shareholders wallets” for cash will soon find
themselves without a role.
Culture and mentoring: Just as it is the role of TIPReps to mentor and grow the skills of executives, it is the role of
executives to mentor and grow the skills of their staff. Good executives look to constantly improve and educate their team:
either by enhancing staff members existing skills, or hiring high achievers. A focus on mentorship and the development of a
high performance culture is key to making the role of an executive less stressful, and it is the simplest long-term path to
higher earnings.
Increasing BESM: The most effective way for executives to increase profits whilst reducing risk is by working to increase
BESM. Building a culture of understanding BESM within an organisation will allow younger managers to similarly provide
ideas to enhance the business. Those executives who regularly increase BESM will most likely be offered larger roles within
the Group.
4.2 Economic moats are the oath to higher profits
Economic moats: Businesses generate attractive returns when they build and maintain economic moats. During the
SMaRT and Due Diligence, the Company assessed and scored the promising economic moats of the business. This list
won’t be complete - some scores may not be accurate. Executives should discuss these moats with their board and make
an accurate list. Then they can continually seek ways to maintain and strengthen moats – and find ways to develop new
ones.
Test for economic moats: Warren Buffett tells the CEOs of his many businesses to frequently ask themselves: “Would we
have to call a prayer meeting before increasing prices to our customers?” Ask yourself the same question. If the answer is
‘yes’ then you have not yet built strong economic moats. If the answer is ‘no’ then you can increase prices and be proud of
the strong moats you have built.
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4.3 Capital management
Capital allocation: A sure path to increasing returns is to allocate capital to the most profitable parts of the business.
Minimise costs in those parts of the business that generate low profits or don’t directly generate income. For example, a
good extra salesperson should generate more profit than cost, while larger premises often eat more profit than they
generate. Property expense also adds risk since a mistake can be time consuming to undo. A mistake in hiring can be
quickly reversed.
Capital for growth: The Company can provide additional capital when executives find opportunities to grow profits at
attractive rates of return via geographic expansion, acquisition of another business, or adding a profitable division. When
such an opportunity offers outstanding returns (greater than 15% per annum), please inform the Strategy Committee in a
timely manner.
Dividends matter: In order to make cash available for the most profitable opportunities, the Company looks to receive funds
from our investments via dividends. These funds are then allocated to those who can use them best. If you have a profitable
opportunity that requires further investment, you should write a succinct business case and put this to the Strategy
Committee. In this way, opportunities can be compared across the group and funds allocated to those offering the best
returns.
Capital for turnarounds: The Company has an aversion to providing capital to help a business out of difficulty. Getting into
financial distress is a key symptom of executives either failing to develop an appropriate BESM, being blindsided by
changes in their market, or a result of a significant error in judgement. Only where executives can demonstrate a clear path
to returning a business to profitability, and are prepared to agree to strict conditions around the use of cash, will Group funds
be made available. Asking for cash to “save a business” is the largest indicator of an executive team that has failed in their
role. Whilst we understand that everyone may make mistakes, the decision to invest Group money to save a once profitable
business is perhaps the most serious decision the Strategy Committee can make. In effect it is asking those who have
performed well to use their hard earned cash to subsidise the bad decisions of another.
4.4 Financial reporting
Financial reporting and TIPBars: The best financial reports help boards and CEOs make large improvements in profits for
the least effort. Before we invest, most executives use financial reports designed for accountants and the tax office. These
focus on the past, but rarely point the way to increasing profits. We have developed TIPBars to improve profits with the least
amount of work, while highlighting dangerous risks. TIPBars is produced every month and shows where each business is
working well financially, where hidden risks may be lurking, and where financial improvements should be made.
Break-even safety margin: TIPBars highlights the trend in Break-even Safety Margin (‘BESM’): whether the business is
becoming less risky (as we prefer), or more risky (a dangerous trend). Should the trend show increasing risk, TIPBars
shows where you and your board can fix this well before the business loses money. Standard accounting usually highlights
losses after the money is gone.
Easiest path to improve profits: TIPTool allows board and executives to quickly ascertain which levers can be pulled to
most easily improve profits. When joining TIP, each business is required to provide general ledger data for the previous 12
months. This allows TIPBars and TIPTool to be implemented immediately. Used properly, TIPBars and TIPTool can add
considerably to profit every year.
Audits: Upon joining the Group, each Portfolio Company is required to participate in the Company’s regular audits. Rather
than seeing this as an imposition on executive time, each Portfolio Company should see it as a way of learning how to better
improve systems and processes so that greater returns can be made in the future. What seems like a frustration at first can
add profound value if used to address weaknesses in company systems.
4.5 Building a stronger executive team
Stronger executive team: The Company can help each Portfolio Company develop a stronger executive team. That way
more can be achieved with less time from executives and board members. This increases the value of the business;
produces bigger half-yearly profits and dividends; allows executives and board to be more relaxed and makes shareholders
happier.
The ‘perfect’ chief executive: It is virtually impossible to be the ‘perfect’ Chief Executive. A perfect Chief Executive would
have expertise in leadership, production, general management, marketing, sales, finance, administration, accounting,
people management and business management. The Strategy Committee can advise how to surround the CEO with quality
executives reporting to them who can add missing strengths.
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Why an executive team: CEOs of outstanding niche businesses live in a gruelling combination of being the Chief
‘Enthusiasm’ Officer and the Chief ‘Operating’ Officer. As Enthusiasm Officer they must inspire their team to greatness and
inspire their clients to provide a good margin for their wonderful work. As Operating Officer, they must ensure work is
efficient, of the highest standard, and systems are scalable for doubling and tripling volume and profits. This is a gruelling
task and limits the growth of the organisation.
What to delegate to grow: As a business grows, these dual roles become exhausting. As a first step to working less hard
for more profit, the CEO will benefit from either an outstanding Operating Officer to take off their shoulders much of the
thinking about day-to-day business. Or they will benefit from an ‘Enthusiasm’ Officer to reduce their role of thinking about
inspiring staff and customers to maximise profits. In choosing which to delegate first, choose the role they find less
enjoyable. Once the business becomes larger, the company may need one of each reporting to the CEO.
Functional executives: When a business grows at 20% per year, after 10 years it will be six times the size. To avoid
executives having to work impossibly harder, the business eventually needs an executive (not simply a manager) to take
responsibility for each functional area: production, marketing, sales, finance, administration and accounting. TIPReps and
executives should act before the CEO becomes overwhelmed by rapid growth. Then look to promote or recruit an executive
to relieve some of the load and facilitate further expansion. Our aim should be to make the business more profitable and
less stressful.
Develop or recruit: Businesses develop a superior culture when they develop and promote internal candidates rather than
recruiting externally. If the business has not had previous success with developing internal management, do not despair.
Several of our Selected Shareholders have extensive experience in building organisations around rapid management
development and can advise if asked. Similarly, if the business has not had positive experience recruiting external
candidates, you are not alone. Several of our Selected Shareholders have considerable experience in hiring executives for
entrepreneurial companies and can advise if asked.
Replacing a successful CEO: If tempted to seek one person to take over from a successful CEO, including all the thinking
they do about the business, ask two questions: “How easily will we find someone who can handle both roles of Chief
Enthusiasm Officer and Chief Operating Officer?” and “If a candidate seems capable of handling everything superbly, why
aren’t they running their own business – one at least as big and profitable as ours?” It is likely that we will need several
outstanding executives to replace a successful CEO: one to provide enthusiasm; and one or more responsible for
operations. Provided the board does this while the successful CEO is still engaged, they will have time to mould their
thinking and ensure a smooth transition.
4.6 Cashflow and dividends
Dividends: From 12 months onwards, the Company will expect an attractive dividend yield on the capital we contributed to
each Portfolio Company or paid to its owners. If the business is growing fast, we will be content with a smaller yield. If the
business is growing slowly, we will expect a higher dividend yield as recompense for our capital.
Fast action as CEO: The primary responsibility of a CEO is to look after cash and keep the business running profitably
every month and every quarter. The Company trusts executives and TIPReps will take immediate action should a Portfolio
Business ever fall into a loss. Fast action to bring the business back to profit is always better than delaying for discussion.
4.7 Continuing roles and responsibilities
Continuing roles: As an executive, the role of profitably running the business remains largely unchanged after becoming
part of the Group. Executives gain access to our tools, balance sheet, TIPReps and Selected Shareholders, but they are still
responsible for the results of the business. In exchange they are expected to regularly report to their board, and follow the
advice of the Strategy Committee. The board and Strategy Committee are there to help mentor and guide executives to
grow the business: but executives are still responsible for ensuring results and will be judged accordingly.
Reporting to a board: Reporting to a board can be daunting for those not used to it. Executives should ask three questions
before including anything in a report to their board: “Could input from the board be helpful on this?”, “Could this be financially
material?” and “Could this provide an opportunity to substantially increase profits?” If the answer is “yes” to any one of these
questions, include it in the meeting agenda. If the answer to all three is “no”, omit it.
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Continuous and immediate disclosure: A key principle of the Company, and the ASX, is that of continuous and immediate
disclosure of all material information. This means that if executives become aware of anything that could have a material
impact on the business they must immediately inform their board. Where the board agrees, they must immediately inform
the Strategy Committee who, in conjunction with the Board of the Company, will determine if the item requires disclosure to
the market.
4.8 Gaining most benefit from a board
Using a board effectively: Our Portfolio Companies derive most benefit from their board when they share half-formed
ideas, major dilemmas and concerns, knowledge of their business and why they run it as they do. Well briefed, TIPReps can
arrange a host of free contacts with expertise the business could not otherwise access.
Briefing the board: A week prior to the meeting, executives should provide a report from the CEO, including a short
explanation of any issues on which they would like input, plus TIPBars and any other important reports, so everyone is
properly briefed. If board meetings regularly take longer than half a day, executives are probably involving the board in
matters best left to management.
Forward looking discussion: TIPReps add most value when executives use TIPBars and TIPTool to provide a helicopter
view of the past month and then provide forward looking key indicators to show where the business is heading. These
include activity indicators driving sales or revenue in coming months; sales driving profits in coming months; and actions
building moats to improve future margins. The board adds most value when focused on factors that improve these leading
indicators.
Questions at board meetings: TIPReps will ask challenging questions to identify where and how they can assist
executives to generate higher cash profits. The better they understand the business, the more they can make profitable
suggestions; and the more they will be able to introduce executives to shareholders who can add value. If questions get into
minutiae, say so: boards are most valuable when focused on big picture items that increase capital value.
Thinking in a visionary way: Until the CEO has built an executive team to free up their time, they will continue working in
the business. TIPReps will think along lines like: “How could the business make larger profits without doing more work?” or
“How could this business expand into other business or geographic areas?” or “How could this business combine with
another TIP Company to increase profits for both?” Executives should ask their TIPReps for these ideas at meetings so they
can implement the best one or two each year.
Governance: Governance is, and should be seen as, a powerful way to enhance the performance of a company. Good
governance grows sustainable profits rather than being a dead weight. To ensure good governance, and assist our
Companies to develop sustainable profits, TIP provides each board with a ‘governance checklist’ as a customisable
template to keep track of many regulatory and governance requirements. The updated checklist should be discussed at the
meeting following each calendar quarter.
4.9 Gaining most value from the Company
Responsibility: Executives and board are responsible to the Company and our shareholders. When considering any major
decision, the board should ask: “Will this increase the regular dividends we pay to the Company?” If the answer is ‘no’, ask:
“Will this increase the capital value of the business?” If the answer is still ‘no’, ask: “Will this strengthen an economic moat or
reduce a risk?” If the answer is still ‘no’ ask: “Why are we considering this?”
Strategy Committee: Each quarter, executives and TIPReps must present a short report (1-2 pages) to the Strategy
Committee. The report should contain a brief overview of progress in the business as well as a copy of the quarterly TIPBars
showing financial results. Each company can use this opportunity to ask the Strategy Committee for contacts or assistance
with any challenges they are facing. The Strategy Committee is also likely to ask challenging questions aimed at improving
the business or assessing performance.
Strategy days: TIP holds half-yearly strategy days: one in February and the other after the conclusion of the financial year.
Executives and TIPReps must attend the Strategy Days. During the day, each company presents their plans for one (or
more) of the four ways for delivering shareholder value: 1. Maximising profits and dividends without sales growth; 2. Growth
or a new division using the current assets of the business; 3. Bolt-on acquisitions or growth that may require extra capital; 4.
Working with another Portfolio Company to enhance returns.
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Annual conference: After the conclusion of the financial year, the Company holds an annual conference for all Executives,
TIPReps and Selected Shareholders. During the annual conference, each underlying business provides a report, including
the annual TIPBars. The boards will be asked questions about the business, how they are building moats, the dividends the
Company can expect, and what the business is doing to increase the value of the business. Selected Shareholders may
also offer contacts or suggestions for expansion.
Value from other Portfolio Companies: The Company invests in an increasing number of businesses – all of them run by
talented people. Portfolio Companies should work together to generate increased profits. This can vary from being suppliers
to one another, quoting together where a wider range of skill sets is needed, sharing executive or staff expertise, pooling
marketing ideas, or combining to create a larger company with more depth of management.
Economies of scale: Through the Group, each business has access to considerable buying power. This can save money
on insurance, vehicle financing, accounting, legal costs and other services. If you are considering a merger, acquisition or
divestment, the Company can save substantial legal, accounting, secretarial, compliance and distribution costs.
Delivering value
Benchmark profitability: Portfolio Companies should be among the most profitable businesses: they were founded by
talented executives and have a shareholder that can provide access to expertise and capital. Over time, our Portfolio
Companies should aim to achieve Net Profit Margins of 10% to 15% of revenue. Above 15% they should feel proud. Below
10% they are letting down the Company and themselves.
Focus on building moats: Building economic moats enables businesses to earn more profits than competitors. To test
whether a business has developed economic moats the board should ask: “Can we increase prices faster than inflation
without having to call a prayer meeting?” If the answer is ‘yes’, then they have built at least one strong economic moat. If the
answer is ‘no’, think: “How can we build at least one economic moat to increase our profit percentage?”
Increasing margins or increasing sales: Niche businesses increase profits more via a small increase in margins, than via
a large increase in sales. Executives can use TIPTool to see the relative uplift in profits from increases in margins, increases
in sales and reductions in costs. Test scenarios to find the fastest way to increase profits with the least additional work.
Fixed versus variable expenses: The best businesses should never record a loss. Reduce the risk of losses by building
the business around a higher proportion of variable expenses (which go up or down as sales revenue goes up or down) and
a lower proportion of fixed expenses. Fixed expenses such as long leases on premises, increase the risk of losses while
reducing flexibility for growth. For fastest growth with lowest risk, minimise fixed costs by converting them to variable
expenses.
The world is changing fast: Technology, data and online connectivity are changing the world. All businesses will be
affected. Those stuck in the past will find competitors offering similar outcomes cheaper or faster, or superior products at the
same prices. Those embracing ‘modernisation’ will thrive via higher margins. Modernise the business to stay ahead of the
competition and improve margins. Use TIPTool to check the improved profit from higher margins after any planned ‘costs of
modernisation’.
Profiting from inflation: Inflation is both an opportunity and threat. Business inflation is generally above CPI. A business
that doesn’t develop and maintain economic moats is hurt as input and labour costs rise before the business can increase
prices. Businesses without moats grow weaker still. Some go broke. Executives can ensure their business thrives by
strengthening existing moats and building new moats. This enables the business to dominate its industry by increasing
prices faster than inflation, building a war chest, and seizing opportunities to acquire competitors.
Profit growth matters: When profits are growing quickly, the best employees can see opportunities for advancement and
higher income. This motivates them to produce better quality work. When profits cease growing, the best staff seek
employment elsewhere, staff quality goes down and output suffers. This makes it imperative that executives continue
growing their profits.
Sales team: To grow profits substantially, it is almost certain the business will need a dedicated sales team. Hire only those
who are highly enthusiastic. Poor salespeople cost more than any profit they generate. The right salespeople generate far
more profit than they cost.
20
Teaminvest Private Group Limited
Our philosophy
30 June 2019
4.10 Long term aims
Long term aim: The Company invests for many years at a time. We aim to assist executives to grow profits and dividends
attractively each year. For new Portfolio Company founders, a substantial way of increasing wealth is by exchanging shares
owned in an underlying business for shares in the Company. At the right exchange, this increases the value of both their
shares and ours. It also improves access to finance, adds liquidity and makes it easier to buy competitors and dominate the
industry.
Succession planning: Although our executives plan to continue leading our businesses for many years, a major
responsibility of senior executives is to develop a top-quality leadership team. A quality executive team helps a business
grow faster and ensures it is preserved should anything happen to senior executives. To reduce risk, the board should
identify an emergency successor and ensure that key staff are aware of the decision so they can act quickly and with
reduced impact if anything untoward occurs.
Expertise available: TIPReps and Selected Shareholders are available to provide advice, inspiration, and suggestions for
executives to build value beyond what would be possible alone.
sales revenue for the period (month, quarter, year to date);
4.11 Reporting to TIP and the company board
Reporting to the company board: Each month, the company board will want to know:
•
• profitability for the period;
• how this translated to free cash;
• how executives are building, maintaining or strengthening moats to improve margins;
• any OH&S issues - and that they have been dealt with appropriately; and
•
the view of executives on how the business is tracking.
Reporting to the Strategy Committee: The Strategy Committee will want to know each quarter what the board and
executives have done to:
•
•
•
•
• make progress towards building a stronger executive team.
strengthen the profit-enabling moats of our business;
reduce the likelihood or severity of any risks to the business;
increase the net profit of our business;
increase dividends; and
Bad news and good news: Material good and bad news should be reported to the board immediately. Good news so we
can share the success, and bad news so that we can act quickly to solve the problem. When communicating bad news, a
good executive team will also provide potential ways of addressing the problem. This is so the board may act quickly in
advising the best path to mitigate damage and turn the bad news into a new opportunity.
Loss making quarter: Should the business report a loss for a calendar quarter, the company board must immediately
arrange a meeting with the Strategy Committee and Board of the Company. The purpose of the meeting is to seek advice or
assistance, and discuss what changes, if any, are necessary to get the business back to acceptable profit. We will be
happier with the Portfolio Company when they also inform us how they have already ensured the loss will not be repeated. If
acceptable changes are not made, the Strategy Committee would expect to replace the executives and TIPReps.
Compliance and culture: Executives are expected to comply with all of the Company’s corporate governance policies, and
to instil a culture of acting entrepreneurially, ethically and responsibly.
21
Teaminvest Private Group Limited
Directors' report
30 June 2019
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Teaminvest Private Group Limited (referred to hereafter as the 'Company' or 'parent entity') and
the entities it controlled at the end of, or during, the period ended 30 June 2019.
Directors
The following persons were directors of Teaminvest Private Group Limited during the whole of the financial period and up
to the date of this report, unless otherwise stated:
Katherine Woodthorpe - Chair
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Appointed on 26 February 2019
Appointed on 26 September 2018
Appointed on 26 September 2018
Appointed on 26 February 2019
Appointed on 26 September 2018
Principal activities
During the financial period the principal continuing activities of the Group consisted of investing in Australian privately-
owned businesses.
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Review of operations
The loss for the Group after providing for income tax amounted to $1,624,000.
The Group's results are for the 4 month period from 1 March 2019 to 30 June 2019 when the Company acquired the
entities as detailed below. From the date of incorporation on 26 September 2018 to 28 February 2019 the Company did not
trade.
Refer to the 'Chief Executive Officer's report' for further details of operations and commentary on the results.
Significant changes in the state of affairs
On 26 September 2018, the Company was incorporated.
On 28 February 2019, the Company acquired one management entity and six portfolio entities by issuing 81,766,977
ordinary shares. See note 32 to the financial statements for further details.
On 28 February 2019, the Company invested in two associate entities by issuing 20,494,549 ordinary shares and
$1,000,000 cash. See note 12 to the financial statements for further details.
On 22 May 2019, the Group was admitted to the official list of Australian Securities Exchange ('ASX') and raised
$7,021,000 by issuing 7,785,167 ordinary shares.
There were no other significant changes in the state of affairs of the Group during the financial period.
Matters subsequent to the end of the financial period
No matter or circumstance has arisen since 30 June 2019 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
Refer to the 'Report of Chief Executive Officer' section for details of likely developments and expected results of
operations.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
22
Teaminvest Private Group Limited
Directors' report
30 June 2019
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Katherine Woodthorpe
Independent Chair
AO PhD FAICD FTSE
Katherine has significant public company board experience, including as a former
Non-Executive Director of Sirtex Medical Ltd and a former director of other ASX and
NASDAQ listed companies. She has had large private and government board
experience including as Chair of the National Climate Science Advisory Committee,
Chair of Fishburners Ltd, Chair of the Antarctic Science Foundation, Chair of the
Bushfire and Natural Hazards Cooperative Research Centre ('CRC') and Member of
the National Health and Medical Research Council. She also has significant
experience in venture capital and private equity including as Chair of Fishburners,
and Chief Executive Officer of the Australian Venture Capital and Private Equity
Association ('AVCAL').
Katherine holds a Doctor of Philosophy ('PhD') in Organic Chemistry from the
University of Leicester, UK and an Honorary Doctorate from University of Technology,
Sydney. She was appointed an Officer in the Order of Australia in 2017 for her
distinguished service to business through venture capital, research and innovation.
None
Other current directorships:
Former directorships (last 3 years): Former Non-Executive Director of Sirtex Medical Ltd (ASX: SRX) (2015 to 2018)
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
None
None
None
None
Name:
Title:
Qualifications:
Experience and expertise:
Andrew Coleman
Managing Director and Chief Executive Officer ('CEO')
B.Ec (Hons)
Andrew is a Co-Founder of Teaminvest Private and is responsible for sourcing,
structuring and overseeing investments and general management. Prior to joining
Teaminvest Private, Andrew worked in Sydney as an investment banker for Credit
Suisse. Andrew advised and assisted clients on significant corporate deals in
Australia and internationally with a specific focus on mergers and acquisitions and
capital raising activity. He is also a co-author of 'Relative Performance Incentives and
Price Bubbles in Experimental Asset Markets' published in the Southern Economic
Journal.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Member of the strategy committee and investment committee
5,427,000 ordinary shares direct and indirectly held
None
None
23
Teaminvest Private Group Limited
Directors' report
30 June 2019
Name:
Title:
Qualifications:
Experience and expertise:
Howard Coleman
Non-Executive Director
BSc in Physics
Howard has over 40 years’ experience as a founder and CEO in the areas of sales,
marketing, consumer finance, and language and mathematics education in Australia,
South Africa and the UK. His extensive background and experience are invaluable for
assessing the strengths and weaknesses of companies. This particularly applies to
identifying their future risks, and the ability and strategies of the board and senior
management to deal with them.
He is a graduate of the Harvard Business School Owner/President Management
Program and completed the Australian Institute of Company Directors’ program for
company directors. He is a director of a number of private companies and has won
many business awards including the prestigious Speaker of The Year Award from
The Executive Connection. Howard regularly appears as a guest commentator on
Sky Business and is a founding director of Teaminvest, Teaminvest Private and
Conscious Capital.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Member of strategy committee
14,810,909 ordinary shares direct and indirectly held
None
None
Name:
Title:
Qualifications:
Experience and expertise:
Ian Kadish
Independent Non-Executive Director
MBBCH MBA
Ian has a wealth of experience including outstanding public company board and
executive experience as CEO and Managing Director of ASX listed Integral
Diagnostics Limited; CEO and Managing Director of ASX listed Pulse Health Group;
CEO and Managing Director of private equity owned Healthcare Australia Limited and
Executive Director of JSE listed Network Healthcare Holdings Limited. In addition to
his public company experience, he has served as a senior executive and board
member of large private businesses owned and operated by private equity and listed
equity, including CEO of Laverty Pathology, Chief Operating Officer of Greencross
Vets Limited, and Co-founder and Non-Executive Director of Digital Healthcare
Solutions.
Ian holds an Master of Business Administration ('MBA') from the Wharton Business
School at the University of Pennsylvania, United States of America, and a Bachelor of
Medicine and Surgery from the University of Witwatersrand, South Africa. In addition
to his executive career in the United States, South Africa and Australia, Ian has also
worked as a consultant for McKinsey and as an advisor to boards on executing and
integrating mergers and acquisitions.
Integral Diagnostics Limited (ASX: IDX)
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Chairman of the strategy committee
67,500 ordinary shares directly held
None
None
24
Teaminvest Private Group Limited
Directors' report
30 June 2019
Name:
Title:
Qualifications:
Experience and expertise:
Regan Passlow
Non-Executive Director
MA, Mgmt
Regan has worked as an executive director for nearly 40 years for both national and
multi-national companies. His focus has been primarily on strategic business
development, administration and back office systems.
He has over 40 years’ experience in senior management and governance roles in
private organisations. He is the former co-founder of WebProfit.com.au, a business
established in the 1990’s to provide executives of small and medium-sized
enterprises ('SMEs') with strategic advice on the use of the Internet and e-commerce.
He is also the co-founder of retail lender EM Finance Corporation and a founding
director of Teaminvest, Teaminvest Private and EM Commercial Finance. He has
historically chaired the investment committee and has held directorships on five
portfolio companies.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Chairman of the investment committee
1,038,438 ordinary shares directly and indirectly held
None
None
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Anand Sundaraj is a corporate lawyer with over 19 years’ experience and is currently a principal at Sundaraj & Ker, a
Sydney-based law firm. Anand specialises in advising on mergers and acquisitions, and capital raisings for both publicly
listed and privately held entities. He also advises on funds management and general securities law matters including listing
rule compliance and corporate governance.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held during the period ended 30 June 2019, and
the number of meetings attended by each director were:
Katherine Woodthorpe
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Full Board
Attended
Held
2
2
2
2
2
2
2
2
2
2
Held: represents the number of meetings held during the time the director held office.
The Company has not constituted an Audit and Risk Committee nor a Nomination and Remuneration Committee given the
size of the Board and the nature and scale of the Group’s operations. The Board as a whole fulfils the functions normally
delegated to these Committees, in accordance with the relevant Committee Charter.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the Company, directly or indirectly, including all directors.
25
Teaminvest Private Group Limited
Directors' report
30 June 2019
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 key management personnel
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 it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('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 Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to attract,
motivate and retain high performance and high quality personnel. The Board determines its remuneration policies having
regard to the Company’s earnings and the consequences of the Company’s performance on shareholder wealth.
The Board has structured an executive remuneration framework that is 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 considers that it should
seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
●
Additionally, the reward framework seeks to enhance executives' interests by:
●
●
●
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Board. The chair's fees are determined independently to the
fees of other non-executive directors based on comparative roles in the external market. The chair is not present at any
discussions relating to the determination of her own remuneration. Non-executive directors do not receive share options or
other incentives.
The annual non-executive directors' fees currently agreed to be paid by the Company are set out below:
Director
Katherine Woodthorpe
Howard Coleman
Ian Kadish
Regan Passlow
Director's fees
$100,000 per annum (including superannuation).
$70,000 per annum (including superannuation).
$70,000 per annum (including superannuation).
$70,000 per annum (including superannuation).
26
Teaminvest Private Group Limited
Directors' report
30 June 2019
Each non-executive director has agreed with the Company that half of their remuneration will be accrued but not paid
during each financial year. If shareholder approval is received at the annual general meeting following the end of each
financial year, this accrued remuneration will be issued as ordinary shares. If shareholder approval is not received, the
accrued remuneration will be paid as cash.
Australian Securities Exchange ('ASX') listing rules require the aggregate non-executive directors' remuneration be
determined periodically by a general meeting. As the Group has just been recently listed on the ASX, the maximum
aggregate non-executive directors' remuneration approved by the Constitution is $500,000. Any changes to this amount
will be approved by shareholders in the annual general meeting.
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 pay 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 comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board based on individual and business unit performance, the overall performance of the Group 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.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance
indicators ('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership contribution and
product management. The KPI for the period ended 30 June 2019, in relation to Andrew Coleman and Dean Robinson STI
of $50,000 was awarded for successfully listing the Company as a public company on the ASX.
The long-term incentives ('LTI') include long service leave, share-based payments and performance rights. Shares are
awarded to executives over a period of four years based on long-term incentive measures. These include the
comprehensive value of the Group for each financial year.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group as part of the LTI. Subject to
shareholder approval, the Company will issue four tranches of $300,000 performance rights to Andrew Coleman and four
tranches of $250,000 performance rights to Dean Robinson. Each tranche of performance rights will be converted into
ordinary shares upon the achievement of the comprehensive income per share targets set out below.
Remuneration under LTI consists of performance shares with an income per share target. The Board chose these
securities linked to income per share targets as they represent substantial increases in shareholder value as represented
by earnings per share and that these targets best aligned the interests of management with shareholders in a business
making regular acquisitions. The Board believed that these targets would avoid the risk of management increasing
earnings while decreasing shareholder wealth if the relevant performance target was measured purely on profit numbers.
The Board also chose targets based on income per share over total shareholder return as it represents long-run earnings
growth and removes the risk of management attempting to influence the share price. These reasons are also relevant for
its assessment on whether such targets are met.
The first tranche of performance share targets represents a significant premium to the current income per share. Each
subsequent tranche represents a further large increase in income per share.
27
Teaminvest Private Group Limited
Directors' report
30 June 2019
Comprehensive income per share target
Dollar value of performance rights
that vest (Andrew Coleman)
Dollar value of performance rights
that vest (Dean Robinson)
$0.0675
$0.0810
$0.0945
$0.1080
$300,000
$300,000
$300,000
$300,000
$250,000
$250,000
$250,000
$250,000
At the end of each financial year, following the receipt of the audited financial statements, the Board will assess whether
one or more targets have been met. Each target can only be met once and more than one target can be met in the same
financial year. The number of ordinary shares to be issued if a tranche of performance rights vest will be determined by
dividing the dollar value of the performance rights that have vested by the volume weighted average price of shares over
the 10 business days to 30 June during the relevant financial year. The financial year ending 30 June 2023 ('FY23') is the
last year in which the targets can be met. After the audit for FY23 has been completed, any unvested performance rights
will lapse.
Use of remuneration consultants
During the financial period ended 30 June 2019, the Group did not engage the use of remuneration consultants, to review
its existing remuneration policies and provide recommendations on how to improve both the STI and LTI programs.
Details of remuneration
The key management personnel of the Group consisted of the following directors of Teaminvest Private Group Limited:
●
●
●
●
●
Katherine Woodthorpe - Independent Chair
Howard Coleman - Non-Executive Director
Ian Kadish - Independent Non-Executive Director
Regan Passlow - Non-Executive Director
Andrew Coleman - Managing Director and Chief Executive Officer ('CEO')
And the following person:
●
Dean Robinson - Chief Finance Officer ('CFO')
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
Cash
bonus
Non-
Super-
monetary annuation
Long
service
leave
Equity-
settled
$
$
$
$
$
$
Period from 26 Sep 2018 to
30 Jun 2019
Non-Executive Directors:
Katherine Woodthorpe
Howard Coleman
Ian Kadish
Regan Passlow
Executive Directors:
Andrew Coleman
Other Key Management
Personnel:
Dean Robinson
Total
$
-
-
-
-
24,451
11,442
17,115
11,442
-
121,596
73,000
73,000
194,596
380,642
22,330
10,449
15,630
10,449
-
-
-
-
65,384
50,000
65,384
189,626
50,000
100,000
-
-
-
-
-
-
-
2,121
993
1,485
993
6,212
6,212
18,016
-
-
-
-
-
-
-
28
Teaminvest Private Group Limited
Directors' report
30 June 2019
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Katherine Woodthorpe
Howard Coleman
Ian Kadish
Regan Passlow
Executive Directors:
Andrew Coleman
Other Key Management Personnel:
Dean Robinson
Fixed
remuneration
Period from
26 Sep 2018
to 30 Jun
2019
At risk - STI
Period from
26 Sep 2018
to 30 Jun
2019
At risk - LTI
Period from
26 Sep 2018
to 30 Jun
2019
100%
100%
100%
100%
-
-
-
-
59%
41%
74%
26%
-
-
-
-
-
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Katherine Woodthorpe
Independent Chairperson
26 February 2019
Ongoing
$100,000 per annum (including superannuation)
Howard Coleman
Non-Executive Director
1 March 2019
Ongoing
$70,000 per annum (including superannuation)
Ian Kadish
Non-Executive Director
26 February 2019
Ongoing
$70,000 per annum (including superannuation)
Regan Passlow
Non-Executive Director
1 March 2019
Ongoing
$70,000 per annum (including superannuation)
Andrew Coleman
Managing Director and Chief Executive Officer
26 February 2019
Ongoing
$219,000 per annum (including superannuation). Employment notice is 3 months.
Dean Robinson
Chief Finance Officer
1 November 2018
Ongoing
$200,000 per annum
29
Teaminvest Private Group Limited
Directors' report
30 June 2019
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the period
ended 30 June 2019 are set out below:
Name
Date
Shares
Issue price
$
Dean Robinson
26 February 2019
91,250
$0.80
73,000
Dean Robinson was issued these shares in lieu of him receiving cash remuneration between commencing his role and
completion of the restructure (under which the Company acquired the various shareholdings in the portfolio companies).
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2019.
There were no options over ordinary shares granted to or vested by directors and other key management personnel as part
of compensation during the period ended 30 June 2019.
Additional information
The earnings of the Group since listing are summarised below:
Revenue from contracts with customers
Earnings before interest and taxation ('EBIT')
Loss after income tax
Statutory comprehensive loss
Additional disclosures relating to key management personnel
2019
$'000
28,007
(1,641)
(1,624)
(1,624)
Shareholding
The number of shares in the Company held during the financial period by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the period
remuneration Additions*
Disposals/
other
Balance at
the end of
the period
Ordinary shares
Howard Coleman
Ian Kadish
Regan Passlow
Andrew Coleman
Dean Robinson
-
-
-
-
-
-
- 14,810,909
-
67,500
1,038,438
-
5,427,000
-
41,667
91,250
91,250 21,385,514
- 14,810,909
67,500
-
1,038,438
-
-
5,427,000
132,917
-
- 21,476,764
*
Additions include shares issued as consideration for the acquisition of businesses.
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of Teaminvest Private Group Limited under option outstanding at the date of this
report.
30
Teaminvest Private Group Limited
Directors' report
30 June 2019
Shares issued on the exercise of options
There were no ordinary shares of Teaminvest Private Group Limited issued on the exercise of options during the period
ended 30 June 2019 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial period, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial period, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial period, 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 period by the
auditor are outlined in note 27 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial period, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 27 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Group,
acting as advocate for the Group or jointly sharing economic risks and rewards.
●
Officers of the Company who are former partners of HLB Mann Judd
There are no officers of the Company who are former partners of HLB Mann Judd.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001.
31
Teaminvest Private Group Limited
Directors' report
30 June 2019
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 Coleman
Managing Director and Chief Executive Officer
27 September 2019
Sydney
32
Auditor’s Independence Declaration
To the directors of Teaminvest Private Group Limited:
As lead auditor for the audit of the consolidated financial report of Teaminvest Private Group Limited for the
period from 26 September 2018 to 30 June 2019, I declare that, to the best of my knowledge and belief,
there have been no contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit;
and
(b)
any applicable code of professional conduct in relation to the audit.
This declaration is in relation to Teaminvest Private Group Limited and the entities it controlled during the
period.
Sydney, Australia
27 September 2019
N J Guest
Director
33
Teaminvest Private Group Limited
Statement of profit or loss and other comprehensive income
For the period ended 30 June 2019
Revenue
Share of profits of associates accounted for using the equity method
Other income
Interest revenue calculated using the effective interest method
Expenses
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Impairment of receivables
Net loss on disposal of property, plant and equipment
Occupancy expense
Initial public offering ('IPO') listing expense
Other expenses
Finance costs
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit for the period attributable to the owners of Teaminvest Private
Group Limited
Other comprehensive income for the period, net of tax
Total comprehensive loss for the period attributable to the owners of Teaminvest Private
Group Limited
Basic earnings per share
Diluted earnings per share
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
Note
5
28,384
6
6
7
270
18
3
(14,255)
(11,399)
(323)
(9)
(16)
(754)
(1,266)
(2,291)
(144)
(1,782)
158
(1,624)
-
(1,624)
Cents
36
36
(3.43)
(3.43)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
34
Teaminvest Private Group Limited
Statement of financial position
As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Deposits and prepayments
Total current assets
Non-current assets
Investments accounted for using the equity method
Property, plant and equipment
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Income tax
Employee benefits
Warranty provision
Total current liabilities
Non-current liabilities
Borrowings
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Total equity
Consolidated
Note 30 Jun 2019
$'000
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
6,694
7,720
5,699
7,497
80
27,690
17,499
4,198
54,934
1,416
78,047
105,737
11,386
1,489
4,554
1,051
1,362
20
19,862
598
304
902
20,764
84,973
86,597
(1,624)
84,973
The above statement of financial position should be read in conjunction with the accompanying notes
35
Teaminvest Private Group Limited
Statement of changes in equity
For the period ended 30 June 2019
Consolidated
Balance at 26 September 2018
Loss after income tax benefit for the period
Other comprehensive income for the period, net of tax
Total comprehensive loss for the period
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 23)
Balance at 30 June 2019
Issued
capital
$'000
Accumulated
losses
$'000
Total equity
$'000
-
-
-
-
-
-
(1,624)
-
(1,624)
-
(1,624)
(1,624)
86,597
-
86,597
86,597
(1,624)
84,973
The above statement of changes in equity should be read in conjunction with the accompanying notes
36
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
Note
25,940
(31,611)
(5,671)
167
3
395
(144)
(391)
34
(5,641)
32
13
14
23
35
35
35
5,351
(1,000)
(751)
(8)
(50)
(16)
3,526
7,021
719
(34)
263
7,969
5,854
-
5,854
Teaminvest Private Group Limited
Statement of cash flows
For the period ended 30 June 2019
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers (inclusive of GST)
Dividends received
Interest received
Other revenue
Interest and other finance costs paid
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Net cash acquired on acquisition of subsidiaries
Payments for investment in associates
Payments for property, plant and equipment
Payments for intangibles
Loans from/(to) related and other parties
Proceeds from disposal of property, plant and equipment
Net cash from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of lease liabilities
Proceeds from invoice discounting
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial period
Cash and cash equivalents at the end of the financial period
8
The above statement of cash flows should be read in conjunction with the accompanying notes
37
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 1. General information
The financial statements cover Teaminvest Private Group Limited as a Group consisting of Teaminvest Private Group
Limited ('Company' or 'parent entity') and the entities it controlled at the end of, or during, the period (referred to in these
financial statements as the 'Group'). The financial statements are presented in Australian dollars, which is Teaminvest
Private Group Limited's functional and presentation currency.
Teaminvest Private Group Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
1001A/53 Walker Street
North Sydney, NSW 2060
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The Company was incorporated on 26 September 2018. On 24 May 2019, the Company was listed on the Australian
Securities Exchange (‘ASX’) with the code 'TIP'.
The Group's results are for the 4 month period from 1 March 2019 to 30 June 2019 when the Company acquired the
entities as detailed in note 32. From the date of incorporation on 26 September 2018 to 28 February 2019 the Company
did not trade.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 September 2019.
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.
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 are most relevant to the Group:
AASB 9 Financial Instruments
The Group has adopted AASB 9 from incorporation date of 26 September 2018. The standard introduced new
classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is
held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on
specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other
comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect
contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on
the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless
the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are
not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income
('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through
profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value
through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk
to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are
intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment
requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-
month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in
which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses
using a lifetime expected loss allowance is available.
38
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 from incorporation date of 26 September 2018. The standard provides a single
comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue
to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based
revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is
described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted
against revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability,
a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's
payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset
and amortised over the contract period.
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.
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.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Teaminvest Private Group
Limited as at 30 June 2019 and the results of all subsidiaries for the period then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
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.
39
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the design, manufacture and installation of the products listed below are recognised at the point in time
when the customer obtains control of the goods, which is generally at the time of installation.
●
●
●
underground and overhead electrical network extensions and upgrades;
glass splashbacks, glass bathroom walls and toughened mirrors; and
semi-trailers.
Rendering of services
Revenue from a contract to provide traffic management services and logistic support services is recognised at a point in
time when the services are rendered based on a fixed price.
Revenue from the design, development and installation of architectural metal work in exchange for a fixed fee is
recognised over time. Due to the high degree of interdependence between the various elements of these projects, they are
accounted for as a single performance obligation. The performance obligation is based on the 'output method', where
progress is measured against internally predetermined project milestones, being the most faithful depiction of the transfer
of goods and services to each customer based on historical experience. As the performance obligation is generally
completed within 12 months, the Group has used the practical expedient not to adjust the for the effects of financing.
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.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
40
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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.
Teaminvest Private 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.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the
statement of financial position.
41
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is
yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in first
out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an
appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where
applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after
deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in
the Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from
associates reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and
recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of
the retained investment and proceeds from disposal is recognised in profit or loss.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
Plant and equipment under lease
Motor vehicles
over the term of the lease
1-10 years
2-5 years
4 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
42
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Leasehold improvements and plant and equipment under lease 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.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the
risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower,
the present value of minimum lease payments. Lease payments are allocated between the principal component of the
lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's
useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease
term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation
method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at
cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the
period of their expected benefit, being their finite useful life of 10 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 life of 5 years.
Impairment of non-financial assets
Goodwill is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes in
circumstances indicate that it 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.
43
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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 period
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.
Finance costs
Finance costs are expensed in the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
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.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
44
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
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 Teaminvest Private Group Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the financial period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
45
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
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 2019. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group,
are set out below.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions,
a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12
months or less and leases of low-value assets (such as personal computers and small office furniture) where an
accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit
or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or
dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the
leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit
or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into
both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases.
At the reporting date, the Group has non-cancellable operating lease commitments as disclosed in note 29. A preliminary
assessment indicates that these arrangements will meet the definition of a lease under AASB 16, and hence the Group will
recognise a right-of-use asset and a corresponding liability in respect of all these leases unless they qualify for low value or
short-term leases upon the application of AASB 16. The Group assessed that, using the transitional rules available,
operating lease commitments as disclosed in note 29 will be recognised as right-of-use assets and related lease liabilities
at the date of adoption on 1 July 2019.
New Conceptual Framework for Financial Reporting
A revised Conceptual Framework for Financial Reporting has been issued by the AASB and is applicable for annual
reporting periods beginning on or after 1 January 2020. This release impacts for-profit private sector entities that have
public accountability that are required by legislation to comply with Australian Accounting Standards and other for-profit
entities that voluntarily elect to apply the Conceptual Framework. Phase 2 of the framework is yet to be released which will
impact for-profit private sector entities. The application of new definition and recognition criteria as well as new guidance on
measurement will result in amendments to several accounting standards. The issue of AASB 2019-1 'Amendments to
Australian Accounting Standards – References to the Conceptual Framework', also applicable from 1 January 2020,
includes such amendments. The Group will apply the revised conceptual framework from 1 July 2020 and is yet to assess
its impact.
46
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
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.
Revenue recognition over time
For performance obligations satisfied over time, management uses judgement to select a method for measuring its
progress towards complete satisfaction of that performance obligation. In exercising that judgement, management selects
a method that depicts its performance in transferring control of goods or services to the customer. For the provision of
architectural metal work, management has determined that progress should be measured by internally predetermined
project milestones (an output method). Specifically this method involves estimating the progress towards satisfying
performance obligations within the contract and contract costs expected to be incurred to satisfy the performance
obligations.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that
affect inventory obsolescence.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be
written off or written down.
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 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.
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.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
47
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Business combinations
As discussed in note 2, business combinations are initially accounted for on a provisional basis. The fair value of assets
acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking into consideration all
available information at the reporting date. Fair value adjustments on the finalisation of the business combination
accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the
assets and liabilities, depreciation and amortisation reported.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into two operating segments based on the whether it manufactures ('Engineering') or provide
services ('Services'). 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. Further details is as follows:
Segment name
Description
Engineering segment
Services segment
The engineering segment includes four wholly-owned subsidiaries of the Group: DecoGlaze
Holdings Pty Ltd; Lusty TIP Trailers Pty Ltd; Icon Metal Pty Ltd; and Coastal Energy Pty Ltd.
The services segment includes two wholly-owned subsidiaries; East Coast Traffic
Controllers Pty Ltd and Kitome Pty Ltd and two associate entities: Colour Capital Pty Ltd
and Multimedia Technology Pty Ltd.
There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
Intersegment transactions
There were no intersegment transactions.
Intersegment receivables, payables and loans
There were no intersegment receivables, payables and loans.
Major customers
During the period ended 30 June 2019, the Group did not have sales to a single external customer that amounted to 10%
or more of the Group's revenues.
48
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 4. Operating segments (continued)
Operating segment information
Consolidated - Period from 26 Sep 2018 to 30 Jun 2019
Engineering Services
$'000
$'000
Total
$'000
Revenue
Sales to external customers
Other revenue
Total revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Corporate overheads
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
Material items include:
Share of profits of associates
Assets
Segment assets
Unallocated assets:
Deferred tax asset
Corporate assets
Total assets
Total assets includes:
Investments in associates
Liabilities
Segment liabilities
Unallocated liabilities:
Provision for income tax
Corporate liabilities
Total liabilities
Note 5. Revenue
Revenue from contracts with customers
Sale of goods
Rendering of services
Other revenue
Other revenue
Revenue
49
20,211
164
20,375
7,796
213
8,009
151
448
28,007
377
28,384
599
(323)
3
(144)
(1,917)
(1,782)
158
(1,624)
-
270
270
74,112
23,743
97,855
1,416
6,466
105,737
-
17,499
17,499
14,704
4,714
19,418
1,051
295
20,764
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
15,600
12,407
28,007
377
28,384
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 5. Revenue (continued)
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Consolidated - Period from 26 Sep 2018 to 30 Jun 2019
Engineering Services
$'000
$'000
Total
$'000
Geographical regions
Australia
Timing of revenue recognition
Goods transferred at a point in time
Services transferred at a point in time
Services transferred over time
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Motor vehicles
Total depreciation
Amortisation
Software
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
50
20,211
7,796
28,007
15,600
472
4,139
-
7,796
-
15,600
8,268
4,139
20,211
7,796
28,007
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
5
62
216
283
40
323
121
23
144
710
667
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 7. Income tax benefit
Income tax benefit
Current tax
Deferred tax - origination and reversal of temporary differences
Aggregate income tax benefit
Deferred tax included in income tax benefit comprises:
Increase in deferred tax assets (note 15)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Income tax benefit
Note 8. Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Cash on deposit
Reconciliation to cash and cash equivalents at the end of the financial period
The above figures are reconciled to cash and cash equivalents at the end of the financial period as shown
in the statement of cash flows as follows:
Balances as above
Bank overdraft (note 18)
Balance as per statement of cash flows
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
67
(225)
(158)
(225)
(1,782)
(535)
377
(158)
Consolidated
30 Jun 2019
$'000
4
6,352
338
6,694
6,694
(840)
5,854
51
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 9. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Loan receivable
Receivable from employees
Other receivables
Receivable from related parties
Consolidated
30 Jun 2019
$'000
7,823
(208)
7,615
15
9
24
80
1
7,720
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected
credit loss
rate
Allowance
Gross
for expected
carrying
credit losses
amount
30 Jun 2019 30 Jun 2019 30 Jun 2019
$'000
$'000
%
-
0.11%
0.33%
58.24%
5,492
1,676
303
352
7,823
-
2
1
205
208
Consolidated
30 Jun 2019
$'000
-
117
229
(138)
208
Consolidated
Not overdue
Under three months overdue
Three to six months overdue
Over six months overdue
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Additions through business combinations (note 32)
Unused amounts reversed
Closing balance
52
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 10. Current assets - contract assets
Contract assets
Consolidated
30 Jun 2019
$'000
5,699
Reconciliation
Reconciliation of the written down values at the beginning and end of the current financial period are set out
below:
Opening balance
Additions
Additions through business combinations (note 32)
Closing balance
Note 11. Current assets - inventories
Raw materials - at cost
Work in progress - at cost
Finished goods - at cost
Note 12. Non-current assets - investments accounted for using the equity method
Investment in associates
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current financial period are set out
below:
Opening carrying amount
Profit after income tax
Additions
Dividends received
Closing carrying amount
-
258
5,441
5,699
Consolidated
30 Jun 2019
$'000
94
4,868
2,535
7,497
Consolidated
30 Jun 2019
$'000
17,499
-
270
17,396
(167)
17,499
53
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 12. Non-current assets - investments accounted for using the equity method (continued)
Interests in associates
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are
material to the Group are set out below:
Name
Principal place of business /
Country of incorporation
Colour Capital Pty Ltd*
Multimedia Technology Pty Ltd**
Australia
Australia
Ownership
interest
30 Jun 2019
%
33.30%
30.00%
*
**
On 28 February 2019, the Company purchased 33.30% of Colour Capital Pty Ltd for a total consideration of
$7,887,000. This is a franchise management business and operates as franchisor of Raw Energy Café brand and
master franchisor or GJ Gardner Homes (NSW, ACT and WA).
On 28 February 2019, the Company purchased 30.00% of Multimedia Technology Pty Ltd for a total consideration of
$9,509,000. Multimedia Technology Pty Ltd is an importer of information technology hardware to approximately
10,000 qualified resellers across Australia.
54
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 12. Non-current assets - investments accounted for using the equity method (continued)
Summarised financial information for the year ended 30 June 2019 is as follows:
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other comprehensive income
Revenue
Expenses
Profit before income tax
Income tax expense
Profit after income tax
Other comprehensive income
Total comprehensive income
Reconciliation of the Group's carrying amount
Acquisition price
Share of profit/(loss) after income tax (from date of acquisition)
Share of dividends received
Closing carrying amount
Colour
Capital
Multimedia
Technology
30 Jun 2019 30 Jun 2019
$'000
$'000
675
2,535
32,752
676
3,210
33,428
460
332
792
15,106
5,083
20,189
2,418
13,239
11,146
(9,800)
140,219
(135,602)
1,346
(608)
4,617
(1,386)
738
3,231
-
-
738
3,231
7,887
(43)
(167)
9,509
313
-
7,677
9,822
55
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 13. Non-current assets - property, plant and equipment
Land - at cost
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
Consolidated
30 Jun 2019
$'000
144
164
(5)
159
2,298
(62)
2,236
1,875
(216)
1,659
4,198
Reconciliations
Reconciliations of the written down values at the beginning and end of the current financial period are set out below:
Consolidated
Land
$'000
Leasehold
improvements
$'000
Plant and
equipment
$'000
Motor
vehicles
$'000
Total
$'000
Balance at 26 September 2018
Additions
Additions through business combinations (note
32)
Depreciation expense
Balance at 30 June 2019
-
-
144
-
144
-
-
164
(5)
159
-
32
2,266
(62)
-
719
1,156
(216)
-
751
3,730
(283)
2,236
1,659
4,198
Property, plant and equipment secured under finance leases
Refer to note 29 for further information on property, plant and equipment secured under finance leases.
Note 14. Non-current assets - intangibles
Goodwill - at cost
Patents and trademarks - at cost
Software - at cost
Less: Accumulated amortisation
56
Consolidated
30 Jun 2019
$'000
54,724
78
172
(40)
132
54,934
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 14. Non-current assets - intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current financial period are set out below:
Consolidated
Balance at 26 September 2018
Additions
Additions through business combinations (note 32)
Amortisation expense
Balance at 30 June 2019
Goodwill
$'000
Patents and
trademarks
$'000
Software
$'000
Total
$'000
-
-
54,724
-
54,724
-
8
70
-
78
-
-
172
(40)
132
-
8
54,966
(40)
54,934
Impairment testing
Goodwill has been allocated to the cash-generating units ('CGUs') as follows:
Goodwill allocated to engineering segment:
Coastal Energy
DecoGlaze
Icon Metal
Lusty TIP Trailers
Engineering segment
Goodwill allocated to services segment:
East Coast Traffic Controllers
Kitome
Services segment
Total goodwill
Consolidated
30 Jun 2019
$'000
5,929
8,738
11,553
13,735
39,955
3,968
10,801
14,769
54,724
The recoverable amount of the Group's goodwill has been determined by a value-in-use calculation using a discounted
cash flow model, based on management approved budget and the application of a growth rate for a 5 year projection
period , together with a terminal value.
The following assumptions were used in the discounted cash flow models for the period subsequent to management's
approved budget:
Coastal Energy
DecoGlaze
Lusty TIP Trailers
Icon Metal
East Coast Traffic Controllers
Kitome
Earnings
growth
rate
%
Discount rate
(pre-tax)
%
Terminal
growth
rate
%
4.0%
6.3%
3.0%
3.0%
3.7%
7.0%
12.4%
10.8%
11.5%
11.8%
12.3%
10.7%
2.7%
2.7%
2.7%
2.7%
2.7%
2.7%
57
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 14. Non-current assets - intangibles (continued)
Key assumption
Approach used to determine values
Earnings growth rate
Discount rate
Terminal growth rate
Management believes the projected weighted average earnings growth rate is
prudent and justified, based on the general market, in which the relevant CGU
operates.
Pre-tax discount rate reflects management’s estimate of the time value of
money and the relevant portfolio company’s weighted average cost of capital
adjusted for the risk free rate and the volatility of the relevant portfolio
company’s industry relative to market movements.
Management have estimated that the terminal growth rate will be in line with
the Reserve Bank of Australia ('RBA') expected gross domestic products
('GDP') growth rate.
Based on the above the recoverable amount exceeds the carrying amount and therefore, goodwill is not considered to be
impaired.
Sensitivity
As disclosed in note 3, the directors have made judgements and estimates in respect of impairment testing of goodwill.
Should these judgements and estimates not occur the resulting goodwill carrying amount may decrease. The recoverable
amount of the CGU would equal its carrying amount if the key assumptions were to change as follows:
Coastal Energy
DecoGlaze
Lusty TIP Trailers
Icon Metal
East Coast Traffic Controllers
Kitome
Earnings
growth rate
decrease by
%
Discount rate
increase by
%
6.0%
4.0%
12.0%
9.0%
11.5%
3.3%
1.7%
1.0%
2.9%
2.2%
3.0%
1.5%
This sensitivity analysis assumes all other assumptions remain constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of goodwill
is based would not cause the CGU's carrying amount to exceed its recoverable amount.
58
Consolidated
30 Jun 2019
$'000
215
663
448
6
61
13
271
(313)
52
1,416
-
225
353
838
1,416
Consolidated
30 Jun 2019
$'000
6,883
2,872
484
1,147
11,386
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 15. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Allowance for expected credit losses
Employee benefits
Provision for warranties
Accrued expenses
Borrowing costs
Formation expenses
Inventories
Contract assets
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss (note 7)
Additions through business combinations (note 32)
Additional deferred tax on entering tax consolidated group
Closing balance
Note 16. Current liabilities - trade and other payables
Trade payables
Accrued expense
BAS payable
Other payables
Refer to note 25 for further information on financial instruments.
59
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 17. Current liabilities - contract liabilities
Contract liabilities
Consolidated
30 Jun 2019
$'000
1,489
Reconciliation
Reconciliation of the written down values at the beginning and end of the current financial period are set out
below:
Opening balance
Payments received in advance
Additions through business combinations (note 32)
Transfer to revenue - from additions through business combinations
Transfer to revenue - from advance payments received during the period
Closing balance
-
6,709
1,993
(1,705)
(5,508)
1,489
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the end of
the reporting period was $1,489,000 as at 30 June 2019 and is expected to be recognised as revenue in future periods as
follows:
Within 6 months
6 to 12 months
Note 18. Current liabilities - borrowings
Bank overdraft
Bank loans
Invoice discounting
Payable to related parties
Lease liability
Refer to note 21 for further information on assets pledged as security and financing arrangements.
Refer to note 25 for further information on financial instruments.
Note 19. Current liabilities - income tax
Provision for income tax
60
Consolidated
30 Jun 2019
$'000
1,111
378
1,489
Consolidated
30 Jun 2019
$'000
840
719
478
1,363
1,154
4,554
Consolidated
30 Jun 2019
$'000
1,051
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 20. Current liabilities - employee benefits
Annual leave
Long service leave
Note 21. Non-current liabilities - borrowings
Lease liability
Refer to note 25 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank overdraft
Bank loans
Invoice discounting
Lease liability
Consolidated
30 Jun 2019
$'000
911
451
1,362
Consolidated
30 Jun 2019
$'000
598
Consolidated
30 Jun 2019
$'000
840
719
478
1,752
3,789
Assets pledged as security
The bank loans are secured by first mortgages over certain specific plant and equipment.
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the statement of financial
position, revert to the lessor in the event of default.
Invoice discounting is secured by the trade receivables.
61
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 21. Non-current liabilities - borrowings (continued)
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft
Bank loans
Used at the reporting date
Bank overdraft
Bank loans
Unused at the reporting date
Bank overdraft
Bank loans
Note 22. Non-current liabilities - employee benefits
Long service leave
Note 23. Equity - issued capital
Ordinary shares - fully paid
Movements in ordinary share capital
Consolidated
30 Jun 2019
$'000
2,700
2,000
4,700
840
719
1,559
1,860
1,281
3,141
Consolidated
30 Jun 2019
$'000
304
Consolidated
30 Jun 2019 30 Jun 2019
Shares
$'000
111,046,693
86,597
Details
Date
Shares
$'000
Balance
Issue of shares - founding shares
Issue of shares - acquisition of associates
Issue of shares - acquisition of subsidiaries
Issue of shares - wholesale
Issue of shares - IPO
26 September 2018
26 September 2018
28 February 2019
28 February 2019
24 May 2019
24 May 2019
-
1,000,000
20,494,549
81,766,977
3,815,417
3,969,750
-
-
16,396
63,180
3,052
3,969
Balance
30 June 2019
111,046,693
86,597
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
62
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 23. Equity - issued capital (continued)
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 is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial period.
Note 24. Equity - dividends
There were no dividends paid, recommended or declared during the current financial period.
Note 25. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and
liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate
and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating
units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group is not exposed to any significant foreign currency risk.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the
Group to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
63
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 25. Financial instruments (continued)
As at the reporting date, the Group had the following variable rate borrowings outstanding:
Consolidated
Bank overdraft and bank loans
Net exposure to cash flow interest rate risk
30 Jun 2019
Weighted
average
interest rate
%
Balance
$'000
8.28%
1,559
1,559
An analysis by remaining contractual maturities in shown in 'liquidity risk' below.
For the Group the bank overdraft and loans outstanding, totalling $1,559,000, are principal and interest payment loans. An
official increase/decrease in interest rates of 100 basis points would have an adverse/favourable effect on profit before tax
of $16,000 per annum. The percentage change is based on the expected volatility of interest rates using market data and
analysts forecasts.
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 expected credit losses of those assets, as disclosed in the statement of financial position
and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and forward-
looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than one 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.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft
Bank loans
Consolidated
30 Jun 2019
$'000
1,860
1,281
3,141
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the
continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time.
64
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 25. 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 - 30 Jun 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Bank overdraft
Bank loans
Invoice discounting
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
-
-
8.61%
7.49%
7.72%
6.51%
6,883
1,147
840
719
478
1,160
11,227
-
-
-
-
-
564
564
-
-
-
-
-
37
37
-
-
-
-
-
-
-
6,883
1,147
840
719
478
1,761
11,828
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 26. Fair value measurement
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
Note 27. Remuneration of auditors
During the financial period the following fees were paid or payable for services provided by HLB Mann Judd, the auditor of
the Company:
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$
182,500
48,000
223,914
271,914
454,414
Audit services - HLB Mann Judd
Audit or review of the financial statements
Other assurance services - HLB Mann Judd
Other assurance services
Other audit services
65
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 28. Contingent liabilities
The Group has given bank guarantees of $65,000 as at 30 June 2019.
Contingent liability for unsettled claims against the Group is $130,000 as at 30 June 2019.
Note 29. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
Lease commitments - finance
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
More than five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
Representing:
Lease liability - current (note 18)
Lease liability - non-current (note 21)
Consolidated
30 Jun 2019
$'000
1,562
2,562
27
4,151
1,160
564
37
1,761
(9)
1,752
1,154
598
1,752
Operating lease commitments includes contracted amounts for various retail outlets, warehouses, offices and plant and
equipment under non-cancellable operating leases expiring within one to six years with, in some cases, options to extend.
The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Finance lease commitments includes contracted amounts for various plant and equipment with a written down value of
$1,199,000 under finance leases expiring within one to six years. Under the terms of the leases, the Group has the option
to acquire the leased assets for predetermined residual values on the expiry of the leases.
Note 30. Related party transactions
Parent entity
Teaminvest Private Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Associates
Interests in associates are set out in note 12.
Key management personnel
Disclosures relating to key management personnel are set out in note 31 and the remuneration report included in the
directors' report.
66
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 30. Related party transactions (continued)
Transactions with related parties
There were no transactions with related parties during the financial period.
Receivable from and payable to related parties
Current receivables:
Receivables from other related party
Current payables:
Payables to other related party
Loans to/from related parties
There were no loans to or from related parties at the reporting date.
Note 31. Key management personnel disclosures
Consolidated
30 Jun 2019
$
1,001
1,363,712
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
Share-based payments
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$
289,626
18,016
73,000
380,642
67
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 32. Business combinations
Acquisition of management entity
On 28 February 2019, the Company acquired 100% of the ordinary shares of Teaminvest Private Pty Ltd ('TIP') for the total
consideration transferred of $14,400,000. This is an investment management business and operates in the corporate and
managed investments division of the Group. The acquired business contributed revenues of $nil and loss after tax of $nil to
the Group for the period from 1 March 2019 to 30 June 2019. If the acquisition occurred on 1 July 2018, the full year
contributions would have been revenues of $399,000 and income after tax of $6,000. The values identified in relation to the
acquisition are provisional as at 30 June 2019.
Details of the acquisition are as follows:
Plant and equipment
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Teaminvest Private Group Limited shares issued to vendor
Fair value
$'000
3
3
14,397
14,400
14,400
The goodwill is attributable to the workforce and the assembled management know-how within one reporting structure, in
addition to the synergies obtainable as a Group as a whole. The goodwill has been allocated to the CGUs as detailed in
note 14. It will not be deductible for tax purposes.
68
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 32. Business combinations (continued)
Acquisition of six portfolio entities
On 28 February 2019, the Company acquired 100% of the ordinary shares (directly or indirectly) of six portfolio entities
below:
Entity
Details
Coastal Energy Pty Ltd
('Coastal Energy')
Acquired for the total consideration transferred of $5,968,000. This entity designs and
installs underground and overhead electrical network extensions and upgrades for major
government and corporate clients (including property developers) in South East
Queensland and operates in the engineering segment of the Group. The acquired business
contributed revenues of $4,337,000 and profit after tax of $64,000 to the Group for the
period from 1 March 2019 to 30 June 2019.
DecoGlaze Holdings Pty Ltd
and controlled entities
('DecoGlaze')
Acquired for the total consideration transferred of $7,837,000. This entity is a premier
manufacturer and installer of glass splashbacks, glass bathroom walls and toughened
mirrors throughout New South Wales and Victoria and operates in the engineering segment
of the Group. The acquired business contributed revenues of $1,634,000 and loss after tax
of $170,000 to the Group for the period from 1 March 2019 to 30 June 2019.
East Coast Traffic Controllers
Pty Ltd ('ECT')
Acquired for the total consideration transferred of $4,114,000. This entity provides traffic
management services to government, local council and corporate clients in Queensland and
operates in the services segment of the Group. The acquired business contributed
revenues of $3,341,000 and loss after tax of $134,000 to the Group for the period from 1
March 2019 to 30 June 2019.
Icon Metal Pty Ltd ('Icon
Metal')
Kitome Pty Ltd ('Kitome')
Lusty TIP Trailers Pty Ltd
('Lusty TIP')
Acquired for the total consideration transferred of $10,285,000. This entity designs,
engineers, fabricates and installs architectural metalwork, miscellaneous metalwork,
balustrades and structural metal features and glass for Tier 1 clients in New South Wales
and operates in the engineering segment of the Group. The acquired business contributed
revenues of $4,151,000 and loss after tax of $442,000 to the Group for the period from 1
March 2019 to 30 June 2019.
Acquired for the total consideration transferred of $7,475,000. This entity is a provider of
logistics support to owner builders and rural and regional building firms across Australia and
operates in the services segment of the Group. The acquired business contributed
revenues of $4,671,000 and profit after tax of $13,000 to the Group for the period from 1
March 2019 to 30 June 2019.
Acquired for the total consideration transferred of $13,101,000. This entity designs and
manufactures aluminium semi-trailers including tippers, fracking tankers, performance
based standards ('PBS') body and dogs, bottom dumps, belly tankers, flat tops, dollies,
racing car transporters and horizontal discharge trailers and operates in the engineering
segment of the Group. The acquired business contributed revenues of $10,253,000 and
loss after tax of $421,000 to the Group for the period from 1 March 2019 to 30 June 2019.
69
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 32. Business combinations (continued)
Details of the acquisitions are as follows:
Coastal
Energy
DecoGlaze
Icon Metal
Fair value Fair value Fair value Fair value Fair value Fair value Fair value
$'000
Lusty TIP
Kitome
$'000
$'000
$'000
$'000
$'000
$'000
Total
ECT
Cash and cash equivalents
Trade receivables *
Other receivables
Contract assets
Raw materials
Work in progress
Finished goods
Prepayments and other assets
Land and buildings
Leasehold improvements
Plant and equipment
Motor vehicles
Patents and trademarks
Software
Deferred tax asset
Trade payables
Other payables
Contract liabilities
Provision for income tax
Employee benefits
Warranty provision
Bank overdraft
Finance facility
Lease liability
Other liabilities
Net assets/(liabilities) acquired
575
2,299
-
35
-
270
253
-
-
-
229
696
-
-
-
(1,256)
(169)
(273)
(78)
(177)
-
-
-
(604)
-
1,800
863
300
2
-
74
23
30
2
-
-
423
29
-
94
84
(121)
(93)
(23)
(82)
(193)
-
-
-
-
-
1,412
55
1,418
-
-
-
-
-
22
-
-
992
35
-
-
-
(272)
(337)
-
223
(36)
-
-
(215)
(441)
(83)
1,361
-
860
-
5,356
30
-
-
21
-
52
183
156
-
-
(11)
(457)
(466)
-
268
(228)
-
(310)
-
(233)
(3,454)
1,767
1,399
346
1
50
-
-
20
61
144
80
78
23
2
78
63
(952)
(1,441)
(573)
(152)
(347)
-
-
-
-
-
(1,120)
2,769
369
89
-
-
5,360
1,834
97
-
32
358
217
68
-
217
(3,631)
(1,616)
(1,124)
(716)
(562)
(20)
-
-
(508)
-
3,233
5,661
5,592
92
5,441
104
5,653
2,137
203
144
164
2,263
1,156
70
172
353
(6,689)
(4,122)
(1,993)
(537)
(1,543)
(20)
(310)
(215)
(1,786)
(3,537)
8,453
Goodwill
4,168
6,425
2,753
8,518
8,595
9,868
40,327
Acquisition-date fair value of
the total consideration
transferred
Representing:
Teaminvest Private Group
Limited shares issued to
vendors
Cash used to acquire
business, net of cash acquired:
Add: bank overdraft
Less: cash and cash
equivalents
5,968
7,837
4,114
10,285
7,475
13,101
48,780
5,968
7,837
4,114
10,285
7,475
13,101
48,780
-
-
-
310
-
-
310
Net cash used/(received)
(575)
(863)
(575)
(863)
(55)
(55)
-
(1,399)
(2,769)
(5,661)
310
(1,399)
(2,769)
(5,351)
*
The fair value of trade receivables is $5,592,000. The gross contractual amount for trade receivables due is
$5,821,000, of which $229,000 is not expected to be collected.
The fair values identified in relation to the above portfolio entity acquisitions are provisional as at 30 June 2019.
70
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 32. Business combinations (continued)
The goodwill is attributable to the workforce and the high profitability of the acquired businesses. It will not be deductible for
tax purposes.
Fair value of Teaminvest Private Group Limited shares issued to vendors
The Group issued 81,766,977 shares as consideration for the acquisitions made during the period. The fair value of the
shares at the date of acquisitions was $0.80 per share and was based on the most recent capital raise.
Note 33. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Principal place of business /
Country of incorporation
Ownership
interest
30 Jun 2019
%
Australia
Teaminvest Private Pty Ltd
Australia
Coastal Energy Pty Ltd
DecoGlaze Holdings Pty Ltd and its controlled entities: Australia
Australia
-DecoGlaze Franchising Pty Ltd
Australia
-DecoGlaze Intellectual Property Pty Ltd
Australia
-DecoGlaze Pty Limited
Australia
-DecoGlaze Surface Cleaner Pty Ltd
Australia
-DecoGlaze Surface Cleaner Unit Trust
Australia
East Coast Traffic Controllers Pty Ltd
Australia
Icon Metal Pty Ltd
Australia
Kitome Pty Ltd
Australia
Lusty TIP Trailers Pty Ltd
Australia
TIP CC Newco Pty Ltd
Australia
TIP CE Newco Pty Ltd
Australia
TIP DG Newco Pty Ltd
Australia
TIP DG 2 Newco Pty Ltd
Australia
TIP ECT Newco Pty Ltd
Australia
TIP GLT Newco Pty Ltd
Australia
TIP Icon Newco Pty Ltd
Australia
TIP KTM Newco Pty Ltd
Australia
TIP MMT Newco Pty Ltd
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
71
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 34. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax benefit for the period
Adjustments for:
Depreciation and amortisation
Net loss on disposal of property, plant and equipment
Share of profit - associates
Dividends received - associates
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in contract assets
Decrease in inventories
Increase in deferred tax assets
Decrease in prepayments
Increase in other operating assets
Decrease in trade and other payables
Decrease in contract liabilities
Increase in provision for income tax
Increase in employee benefits
Net cash used in operating activities
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
(1,624)
323
16
(270)
167
(2,036)
(258)
397
(1,063)
138
(15)
(1,921)
(132)
514
123
(5,641)
Note 35. Changes in liabilities arising from financing activities
Consolidated
Balance at 26 September 2018
Net cash from/(used in) financing activities
Changes through business combinations (note 32)
Balance at 30 June 2019
Bank loan
$'000
Lease
liabilities
$'000
Invoice
discounting
$'000
Total
$'000
-
719
-
719
-
(34)
1,786
1,752
-
263
215
478
-
948
2,001
2,949
72
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 36. Earnings per share
Loss after income tax attributable to the owners of Teaminvest Private Group Limited
Consolidated
Period from
26 Sep 2018
to 30 Jun
2019
$'000
(1,624)
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
47,309,367
Weighted average number of ordinary shares used in calculating diluted earnings per share
47,309,367
Basic earnings per share
Diluted earnings per share
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 loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Total equity
73
Cents
(3.43)
(3.43)
Parent
Period from
26 Sep 2018
to 30 Jun
2019
$'000
(805)
(805)
Parent
30 Jun 2019
$'000
4,567
86,088
296
296
86,597
(805)
85,792
Teaminvest Private Group Limited
Notes to the financial statements
30 June 2019
Note 37. Parent entity information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019.
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.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 38. Events after the reporting period
No matter or circumstance has arisen since 30 June 2019 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.
74
Teaminvest Private Group Limited
Directors' declaration
30 June 2019
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
2019 and of its performance for the financial period ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
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 Coleman
Managing Director and Chief Executive Officer
27 September 2019
Sydney
75
Independent Auditor’s Report to the Members of Teaminvest Private Group Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Teaminvest Private Group Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the statement of financial position as at 30 June 2019, the statement
of profit or loss and other comprehensive income, the statement of changes in equity and the statement of
cash flows for the period from 26 September 2018 to 30 June 2019 of the consolidated group, and notes to
the financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial
performance for the period from 26 September 2018 to 30 June 2019; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001 has been given to the
directors of the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
76
Key Audit Matter
How our audit addressed the key audit matter
Business combinations
Note 32: Business Combinations
During the period the Group acquired 100% of the
equity interests in a number of entities for total
consideration of $63,180,000. As detailed in Note
32 the acquisitions are accounted for on a
provisional basis at 30 June 2019.
Accounting for these acquisitions is a complex and
judgemental exercise, requiring management to
calculate the fair value of consideration applied and
identify and determine the fair value of the
identifiable assets and liabilities acquired.
Management was also required to determine and
allocate purchase consideration to identified
intangible assets and goodwill.
We have identified the business combinations as a
key audit matter given the significance of the
acquisitions and the degree of complexity and
judgement involved in the application of the
accounting standards.
Carrying amount of intangible assets
Note 14: Intangibles
As a result of the business combinations that
occurred during the period, goodwill has been
recognised to reflect the excess of the purchase
consideration over the fair value of the identified
assets acquired and liabilities assumed. On
acquisition goodwill was allocated to identified Cash
Generation Units (“CGUs”).
The Group’s goodwill balance as at 30 June 2019 is
$54,724,000.
•
As required by Australian Accounting Standards an
impairment assessment of the recoverable amount
of the CGU’s to which the Goodwill relates has
been performed by management.
Management’s impairment assessment of the CGU
recoverable amounts utilises value in use
calculations, which involve a significant level of
judgement in respect of factors such as:
• Estimated future operating revenue and costs;
• Appropriate discount and growth rates; and
• Terminal values of CGU.
We considered this to be a key audit matter due to
the significant judgement involved in estimating the
carrying amount of the goodwill assets and the
potentially material impact on the financial
statements.
Our audit procedures included but were not limited to
the following:
• Assessed the Group’s determination and
application of the business combination
accounting standards to the acquisition
transactions.
• Assessed the reasonableness of the adopted
acquisition date and the fair value of purchase
consideration by agreeing to the relevant
purchase deeds and supporting documents.
• Performed audit procedures to evaluate the
reasonableness of the identification and fair
value of the acquisition date assets acquired
liabilities assumed.
• Assessed the accuracy of the allocation of
purchase consideration in excess of the
identifiable assets acquired and liabilities
assumed.
• Assessed the adequacy of the Group’s
disclosures in the financial statements relating
to the business combinations.
Our audit procedures included but were not limited
to the following:
• Assessed the identification and determination
of the Group’s CGUs based on our
understanding of the nature of the Group’s
business and the allocations of assets and
liabilities to the CGU’s, including goodwill.
Tested the integrity and mathematical
accuracy of the discounted cash flow models
used by management for value in use
assessments.
• Evaluated and assessed key assumptions and
methodologies applied to the underlying
cashflow forecasts with reference to
representations from management,
documented business plans and historical
results of the business operations.
• Assessed the Group’s assumptions in
developing the discount and terminal growth
rates with reference to external sources.
• Performed sensitivity analysis and evaluated
whether a reasonably possible change in
assumptions could cause the carrying amount
of a CGU to exceed its recoverable amount.
• Assessed the adequacy of disclosures
included in Note 14 to the financial statements.
77
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the period from 26 September 2018 to 30 June 2019, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
78
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 25 to 30 of the directors’ report for the period
from 26 September 2018 to 30 June 2019.
In our opinion, the Remuneration Report of Teaminvest Private Group Limited for the period ended 30 June
2019 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd Assurance (NSW) Pty Ltd
Chartered Accountants
N J Guest
Director
Sydney, Australia
27 September 2019
79
Teaminvest Private Group Limited
Shareholder information
30 June 2019
The shareholder information set out below was applicable as at 18 September 2019.
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
Number
of holders Number
of ordinary of ordinary
shares
shares
16,548
21
317,849
100
575,157
65
193
7,913,316
119 102,223,823
498 111,046,693
3
1,207
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
Number held
12,600,000
6,723,198
5,601,113
5,425,000
5,276,919
4,363,049
2,671,709
2,449,116
2,176,659
1,633,395
1,503,570
1,502,835
1,491,923
1,491,923
1,425,435
1,392,363
1,386,541
1,380,628
1,319,455
1,318,546
shares
issued
11.35
6.05
5.04
4.89
4.75
3.93
2.41
2.21
1.96
1.47
1.35
1.35
1.34
1.34
1.28
1.25
1.25
1.24
1.19
1.19
63,133,377
56.84
Teaminvest Pty Ltd
Pluto Mining Pty Ltd
Kitome Pastoral Pty Limited
Mr Andrew Coleman
Theta Asset Management Ltd (TDGF A/C)
Crooks Pty Ltd
Pribula Family Pty Ltd
DecoGlaze Australia Pty Ltd
Electronic Marketing Pty Ltd
Le Grand Pty Ltd
BNP Paribas Nominees Pty Ltd (IB AU Noms RetailClient DM)
Hunters Hill Consulting and Counselling Pty Ltd
Malonga Pty Ltd
Willberg Investments Pty Ltd
Josamba Pty Ltd (WR&P Gibson Super Fund A/C)
Mr Malcolm Oliver Thompson + Ms Elizabeth Thompson
Mr Malcolm Murray Jones + Mrs Lynnette Anne Jones (Relm A/C)
Robert Breit
Baxtero Pty Limited (Carmichael Superfund A/C)
Penmark Super Pty Ltd (Penmark Super Fund A/C)
Unquoted equity securities
There are no unquoted equity securities.
80
Teaminvest Private Group Limited
Shareholder information
30 June 2019
Substantial holders
Substantial holders in the Company are set out below:
Teaminvest Pty Ltd
Pluto Mining Pty Ltd
Kitome Pastoral Pty Ltd
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
shares
issued
Number held
12,600,000
6,723,198
5,601,113
11.35
6.05
5.04
Ordinary shares
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.
There are no other classes of equity securities.
Securities subject to escrow
Type of escrow
Escrow period
Number
of shares
Voluntary escrow - ordinary shares
Voluntary escrow - ordinary shares
From the period commencing on the date of official
quotation (24 May 2019) and ending 12 months after
the date of quotation
24,076,424
From the period commencing on the date of official
quotation (24 May 2019) and ending 24 months after
the date of quotation
24,076,433
48,152,857
81