Teaminvest Private Group Limited
(ASX:TIP)
ACN 629 045 736
CEO letter
For the year ended 30 June 2021
Noble purpose: Transferring knowledge between generations
Mission: Assist successful business owners to enhance their legacy; and mentor the next generation of business leaders
Vision: To build a society where the knowledge we accumulate over a lifetime isn’t lost to retirement, forcing the next
generation to learn it all again
Record operating performance in FY21
It is my pleasure to present the CEO report for the year ended 30 June 2021 (FY21) for Teaminvest Private Group
Limited (TIP) and the strong and resilient operating performance it contains.
FY21 was a record Segment Result for the group: a pleasing achievement considering the ongoing coronavirus
pandemic and ever-changing restrictions. Our portfolio leadership teams have again risen to the challenge and, as
owners of our business, you should be proud of their accomplishments.
Segment Results
Segment Results are the normalised revenue and EBITDA for each segment of our Group. They provide shareholders
with the best approximation of our operating performance, and it is the figure that we (as management) spend most
time discussing. Whilst we find Segment Results to be the most useful measure of our performance, they often differ
from Statutory Consolidated Income reported in accordance with accounting standards. This is discussed further
below.
Segment Revenue
($m)
Segment EBITDA
($m)
Group Segment EBITDA was
up 9% on FY20 to $14.7m, a
new record for the Group
(pre-abnormals). Whilst we
regard
less
revenue
important than profit (as the
saying goes: “revenue
is
vanity while profit is sanity”),
Segment Revenue was also a
record, growing by 5% to
$144.6m.
as
trailer
Our world-leading
engineering business Graham
Lusty Trailers (GLT) (Engineering Division, 100% owned) delivered a third consecutive record year in FY21. GLT’s focus
on market-leading innovation, quality and efficiency saw revenue (up 4% compared to FY20) and EBITDA (up 52%)
grow substantially from already record highs. GLT’s unique designs command a substantial premium in the transport
market, and their never-ending quest for innovation continues to enhance their reputation as the “Rolls Royce” of
bulk haulage. Happily, the use of a GLT trailer adds so much to most haulage companies’ bottom line, that customers
now place orders up to a year in advance just to secure a booking in GLT’s busy Brisbane facility.
East Coast Traffic Control (ECT) (Services Division, 100% owned) similarly delivered a third consecutive record year,
achieving excellent improvements in revenue (up 16% compared to FY20) and EBITDA (up 55%). ECT’s focus on
innovation, safety and client delivery continues to grow their scale and reputation. As ECT looks to grow beyond
Queensland, their nimble depot model and strict adherence to the highest ethical standards gives us confidence that
the enthusiastic team will continue to deliver scale and profit improvements. It has also been particularly pleasing to
watch the leadership team grow and transition over the course of the second half of FY21.
($m)RevenueEBITDASegmentFY17FY18FY19FY20FY21Δ%FY17FY18FY19FY20FY21Δ%Engineering57.761.666.067.966.5(2%)(0.7)4.63.67.77.93%Services59.664.169.769.678.112%1.53.83.65.96.817%Pre-abnormal117.3125.7135.7137.5144.65%0.88.47.213.614.79%Abnormal3.5(0.1)3.5(2.2)Total117.3125.7135.7141.0144.52%0.88.47.217.112.5(27%)57.761.666.067.966.559.664.169.769.678.1FY17FY18FY19FY20FY21EngineeringServices(0.7)4.63.67.77.91.53.83.65.96.8FY17FY18FY19FY20FY21EngineeringServices(0.7)4.63.67.77.91.53.83.65.96.8FY17FY18FY19FY20FY21EngineeringServices
Icon Metal (Engineering Division, 100% owned) also delivered a third consecutive record revenue and earnings in FY21.
As in FY20, this growth was primarily driven through improvements in second tier management capability, enabling
Icon Metal to take on larger and more complex projects. Revenue (up 21% compared to FY20) and EBITDA (up 28%)
continue to grow as Icon Metal impresses their clients whilst securing and training even more talented engineering
staff. The successful execution of these projects by Icon Metal’s talented and energetic team secures their position as
the architectural metalwork firm of choice for Tier 1 construction projects in Sydney.
Multimedia Technology (MMT) (Services Division, 30% owned), our only Melbourne headquartered business,
pleasingly achieved a third consecutive year of record results in FY21. Despite interruptions from COVID lockdowns,
supply constraints and operating limitations, MMT grew revenue (up 4% compared to FY20) and EBITDA (up 30%).
Growth was primarily driven by MMT’s agility in navigating the stressful and ever-changing environment. The
leadership displayed by the company’s founder and CEO, John Hassall, cannot be understated in this outstanding
result. MMT continues to build this mindset of agility and opportunity beyond John’s direct oversight, allowing the
business to gain market share and margins at the expense of more hidebound competitors.
Rounding out the fifth of our Portfolio Companies to deliver a third consecutive record result is Colour Capital (Services
Division, 33% owned). Colour Capital is a franchise management business that operates the GJ Gardner home building
master franchises for NSW/ACT and WA, the Gold’s Gym’s business in Australia and New Zealand and the Raw Energy
café’s business in Australia. Despite the impact of COVID on all three arms of the business, Colour Capital delivered
record revenue (up 38% compared to FY20) and EBITDA (up 62%).
On the other side of the ledger from these excellent Portfolio Company results was the poor performance of Coastal
Energy (Engineering Division, 100% owned). I wrote in my half-yearly letter that we had been disappointed with the
former management and had made changes to improve the culture. Unfortunately, these changes came too late to
avoid the loss of the company’s Energex license in April and the need for a drastic company restructure. The result is
that we booked an operating EBITDA loss from Coastal Energy of $1.5m for FY21 and took a further non-operating
charge of $5.2m (discussed further below). Whilst the Energex rating has not yet been returned, the new leadership
team has successfully restructured the business and our staff are back at work with a strict focus on safety, integrity,
and respect. Whilst the learnings of FY21 have been painful, we expect that Coastal Energy will ultimately recover
stronger from the experience.
Acquisitions, mergers and disposals
In FY21 we acquired two new Portfolio Companies: Automation Group and Teaminvest. We also merged four of our
existing Portfolio Companies (Kitome, DecoGlaze, The Step Ahead Builders Assistant and Forever Glass Art) into one
new entity (TIP Residential Group, Services Division) with a united leadership to capitalise on synergies between the
businesses.
No disposals of Portfolio Companies occurred in FY21.
Automation Group
Automation Group (Engineering Division, 100% owned) is a niche distribution and support business that works to
empower a smarter future with state-of-the-art remote industrial monitoring and control technology used in defence,
power, gas, mining, rail, transport and water industries. Integrating Automation Group increases our technical abilities
in the fast-growing industries of automation, artificial intelligence, robotics and remote management.
Whilst it remains early days, Automation Group generated a pleasing $4.2m in Revenue and $0.5m in EBITDA for the
nine months since we acquired the business in September 2020. In addition, Automation Group has begun working
with other Portfolio Companies to develop new moats. Some examples of projects in examination include ‘smart
trailers’ in conjunction with GLT, augmented reality applications in conjunction with TIP Residential Group, and
advanced traffic management solutions with ECT.
Teaminvest
On the 30th of June 2021, the last day of FY21, we acquired our former ‘parent’ Teaminvest (Services Division, 100%
owned).
Established in 2007, Teaminvest is an educational business founded on the noble purpose of “educating those who
wish to manage their wealth wisely, rather than paying others to do it badly for them”. Acquiring Teaminvest gives us
access to a growing annuity stream of highly profitable revenue from the existing education business; and the ability
to leverage the Teaminvest intellectual property to form the foundation of a new financial services division in
conjunction with our existing investments in the insurance and trustee/managed fund industries.
Because of the timing of this acquisition our Segment Results include only one day’s worth of the $3.9m in revenue
and $1.4m in EBITDA generated by Teaminvest during FY21. Commencing in FY22, we expect to see the revenue and
EBITDA from this new acquisition contribute to our performance.
TIP Residential Group
In September 2020, we elected to merge the existing Portfolio Companies Kitome, DecoGlaze, The Step Ahead Builders
Assistant (TSABA) and Forever Glass Art into one new business called TIP Residential Group (TIPRG). TIPRG is now able
to offer clients a much broader suite of services from architectural design to manufacture and construction of the
home. Moreover, the combined TIPRG now has the financial strength to be able to offer these services to developers
and trade customers, not only retail clients.
Whilst it is early days, we expect the decision to merge these businesses will turbocharge growth as we develop a
broader residential construction business within the group.
Statutory Comprehensive Income (SCI)
Unlike Segment Results, which are compiled on a normalised (i.e. operating) basis, SCI is calculated in accordance with
the technical accounting standards in force at any time. It encompasses consolidation accounting where we own 50%
or more of a business, equity accounting where we own a substantial share of between 20% and 50%, and investment
accounting where we own less than 20%. Because it reflects accounting standards, and not operating performance,
SCI is also regularly affected by one-off items, changes in accounting rules, and technical quirks.
Whilst SCI is the official published result of the Group, shareholders should be aware of its limitations when using it to
draw conclusions about operating performance. The table below sets out our SCI and a summary balance sheet.
($m)($m)P&LFY19FY20FY21Balance SheetFY19FY20FY21Revenue28.4 89.0 91.4 Current assets27.035.038.7Operating expenses(28.4)(77.3)(78.4)Non-current assets68.272.993.8EBITDA(0.0)11.7 13.1 Total assets95.2108.0132.5D&A(0.3)(2.5)(7.1)Current liabilities21.623.324.8EBIT(0.3)9.2 5.9 Non-current liabilities0.93.59.1Interest income / (expense)(2.3)(0.3)(0.1)Total liabilities22.526.833.9PBT(2.7)8.9 5.8 Equity72.781.298.6Tax income / (expense)0.2 (0.6)(0.6)Statutory NPAT(2.5)8.3 5.2 Cash6.710.812.3Abnormal items-(3.3)1.7 Total debt (traditional)5.21.52.2Operating NPAT(2.5)5.0 6.9 Total debt (AASB 16)5.25.66.0
Comparing SCI across periods
letter,
I have again
Following the positive response to my half-
yearly
included a
reconciliation of Statutory NPAT with
Operating NPAT (left). This shows the after-
tax effect of the various ‘abnormal’ items in
FY20 (the insurance payout and windfall
gain) and FY21 (the ECT payment, the
Coastal Energy restructuring charge and
impairment, and the Teaminvest acquisition
– all discussed below). Positive abnormal
items refer to one-off costs that should be
added back to compare Operating NPAT,
and negative items refer to one-off gains that should be removed.
From the table you can see that Operating NPAT grew 39% in FY21 to a new record of $6.9m. In contrast, Statutory
NPAT reported in our SCI and Appendix 4D shows a 37% decline, after including all non-operating items.
Yet more reason why owners should read our announcements in full, not just the summary front page!
Explanation of one-off items
ECT long-term reward
When TIP was listed in May 2019, we took over the employment agreement in place with the CEO of East Coast Traffic
Control (Services Division, 100% owned). Under the terms of that agreement, the CEO of ECT was to be awarded a
bonus equivalent to 10% of the share capital in ECT upon achieving a successful turn-around.
After stellar performance the hurdle was met in December, resulting in a one-off payment of $535,000. This welcome
payment and its associated costs appear as an ‘abnormal’ amount in our Segment Results for FY21 (as it was a one-off
event), and in full in our SCI.
More information about the ECT long-term reward can be found in my letter for the first half of FY21.
Coastal Energy non-operating charges
As discussed in the operating section of this report, Coastal Energy had its Energex rating suspended in April. The loss
of this rating forced the business to undertake an immediate stand-down and restructure. As part of this restructure
we incurred one-off costs of $0.9m, predominantly comprising employee redundancies and legal fees.
As the rating had not been returned by 30 June, we also elected to take a non-cash impairment charge of $4.3m. The
effect of this impairment is to reduce both goodwill and SCI by this amount. The impairment means that TIP no longer
carries any goodwill on our balance sheet associated with Coastal Energy.
These abnormal items totalling $5.2m are excluded from our Segment Results but included in SCI.
Teaminvest acquisition
Whilst the acquisition of Teaminvest had no impact on Segment Results during FY21, it did have a one-off impact on
our SCI for the period.
Accounting rules require us to record the fair value of all assets acquired on our balance sheet as of the date of
acquisition. The fair value was calculated by EverEdge Global, a global leader in intellectual asset valuation; and
audited by KPMG. As the fair value of the intellectual property we acquired exceeded the acquisition value (what the
accounting rules eloquently term a ‘bargain purchase’), we are required to book a one off gain of $3.7m to our SCI
this year.
($m)ComparisonFY20FY21Δ%Statutory NPAT8.3 5.2 (37%)-insurance payout(2.8)-- FY20 windfall gain(0.5)-- ECT one-off bonus-0.4-Coastal Energy restructuring charge-0.6-Coastal Energy non-cash impairment-4.3-Teaminvest 'bargain purchase'-(3.7)-Other small items-0.2Operating NPAT5.06.939% Like the Coastal Energy impairment, this one-off gain is a non-cash item that appears on our balance sheet and in SCI
but is excluded from our Segment Results.
One-off items in FY20
During our comparison period (FY20) the Group recorded one-off abnormal gains associated with an insurance payout
and our IPO restructure. If you would like more information about these abnormal items, greater detail can be found
in the FY20 CEO letter.
Year ahead
FY22 promises to be exciting. We are confident that our talented Portfolio Company management and boards will
again find new ways to enhance their businesses and grow their profits. When challenges inevitably arise, we are lucky
that within our Group we have a deep pool of resources available to address them.
As I wrote in FY20: “My hope is that each future period will also have more ups than downs, but (as we have just seen)
the world does not always work that way: and we can’t always prepare for momentous unplanned events such as the
ongoing global emergencies. Fortunately, in this instance we have been largely unaffected, but this may not always be
the case in the future. However, I am confident that the talent, 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.”
Our results in FY21 again bear this out. During the year:
▪ We acquired two new Portfolio Companies that both increase our stock of valuable intellectual property and
should generate substantial and growing profits; and
▪ Seven of the ten Portfolio Companies we owned for the full year increased earnings by more than 25% despite
the challenges of a pandemic, travel restrictions, consumer uncertainty and a shifting set of global rules.
For these outstanding results our leadership teams throughout the Group deserve our praise and admiration.
In the few cases where our teams have struggled, our pool of 88 Selected Shareholders has provided invaluable advice
and mentorship; made connections and offered referrals; brainstormed and acted as a sounding board (during the day
and well into the night!); and in a demonstration of being prepared to go above and beyond what can be expected of
volunteers, some even rolled up their sleeves and assisted in helping to resolve the messy situation at Coastal Energy.
For these contributions I know I speak on behalf of everyone at TIP when I say a heartfelt “thank you”.
It is this shared philosophy of acquiring great businesses, rewarding talent, creating space for opportunity in adversity,
and providing mentorship and support via our Selected Shareholders, that gives TIP our unique edge. It is the “special
sauce” that drives our results and generates shareholder wealth. It’s also what makes me so proud to be part of this
amazing organisation.
Long term goals
In 2019 I wrote that:
“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.”
Following the merger of Kitome, DecoGlaze, TSABA and Forever Glass Art into TIP Residential Group during FY21, we
now have twelve Portfolio Companies. They span industries as diverse as heavy manufacturing to financial services,
but they all share the same goal: to transfer knowledge between generations and enhance our society.
We have taken further steps to promote staff across Portfolio Companies to ensure that we can attract, retain, develop
and reward the best talent: and we are looking forward to further advances on this front every year. Creating
opportunity and transferring knowledge to the next generation is, after all, embedded in TIP’s DNA.
The scale of our noble purpose is large, and this is what makes it so exciting. As our outstanding businesses grow
organically, we must continue to support them with an ever-increasing pool of Selected Shareholders who can provide
mentorship and support. If we develop the skills of our people, whilst providing space for them to grow into greater
roles, then we should comfortably meet our long-term goals.
A final word
Whilst each period 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, achieve our noble purpose and reward our shareholders handsomely for their support.
If you are excited by our noble purpose, and would like to participate in our unique organisation, please apply to
become a Selected Shareholder. The application form, followed by our operating philosophy, follows this letter. The
knowledge you bring, and the value you add, will accelerate our future growth.
I would also like to remind all 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 financial capacity that TIP provides will 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.
Best wishes,
Andrew Coleman
CEO
Teaminvest Private Group Limited
Application to become a Selected Shareholder
Name of applicant
Phone number
Email address
Qualifications
Condensed resume
Areas of interest
Analysis of investment opportunities
Mentorship of Portfolio Companies
Directorship of Portfolio Companies
Acknowledgement
By applying to become a Selected Shareholder, I acknowledge that:
▪
▪
▪
I have read the Company’s Securities Trading Policy and agree to be
bound by it if accepted;
I understand that serving as a mentor or director carries specific legal
responsibilities; and
I understand that there is no guarantee that my application will be
accepted.
Signature
Date
Please send this form, along with a complete copy of your resume, to either:
▪ By email:
▪ By post:
andrew.coleman@tipgroup.com.au
Teaminvest Private Group Limited
Suite 302, 80 Mount Street
North Sydney, NSW 2060
GUIDANCE FOR INVESTORS
Our Noble Purpose drives every decision we make
We have long held the belief that businesses perform best when they act in the service of others. It is why we started
Teaminvest Private, and why we developed our unique Selected Shareholder model. Our noble purpose, mission and
vision are core to who we are and what we do. They are:
Noble purpose: Transferring knowledge between generations
Mission: Assist successful business owners to enhance their legacy; and mentor the next generation of business
leaders
Vision: To build a society where the knowledge we accumulate over a lifetime isn’t lost to retirement, forcing the next
generation to learn it all again
It is core to our being that we will never take an action that could be detrimental to the long-term delivery of our noble
purpose. Similarly, we are always prepared to invest in areas that will see our ability to deliver our noble purpose
increase: even if doing so comes at a short-term cost.
Our noble purpose is core to who we are and what we do. As part owners in our business, we trust all our investors
share our passion.
It takes time for share prices to reflect intrinsic value
Time is the enemy of poor businesses, and the friend of the good business. Research by Dr John Price (and Teaminvest)
have proven this truism over and over. While the market can move on momentum for a while, in the end price must
always tend towards the formula “Price = Earnings * P/E ratio”.
Whilst P/E ratios can fluctuate wildly for days, weeks, months or even a few years, over the course of an economic
cycle they will (by definition) gravitate towards the market average. In Australia this has usually been around 4x for a
private company and 17.5x for a listed company.
Therefore, the only way for a company to dramatically increase its share price in the long-term is through consistently
increasing earnings. Any business that grows earnings consistently will, over time, see a corresponding increase in
share price and value. Conversely. any company with declining profits will have a decrease in value.
As investors you should therefore be aware that we measure, reward and focus our executives on growing the earnings
generated by our Portfolio Companies. We have no rewards based on share price, P/E ratio or “market reputation”.
We do this because, as long-term investors we want concrete earnings increases: not the value gains driven by
sentiment that can come and go with the newest fad.
You will also note that our letters to investors will never talk about moves made to “gain exposure” or “increase
institutional awareness”: but they will talk about concrete steps taken to increase profits generated. This will mean
that our share price may, for long periods, deviate from our intrinsic value as we focus on profits not media exposure.
This can create great opportunities for those investors who seek to increase their holdings when Mr Market offers our
stock at a price below what they consider is the intrinsic value driven by our earnings. This however is up to you: we
don’t intend to intervene in the market or put fluff pieces in the press: doing so would just be a distraction from our
single focus of delivering our noble purpose and growing our earnings over time.
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.
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.
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.
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;
▪
seeking more intellectual stimulation than possible from passive investing; or
▪ giving back to the Australian business community.
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.
Ways Selected Shareholders can contribute to the Group
This section provides a detailed overview of the Company’s philosophy towards Selected Shareholders. 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.
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.
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.
GUIDANCE FOR TIPREPS
Introduction
Investing in TIP opens the opportunity for Selected 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.
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 immediately notify
the Strategy Committee so that TIP can 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 up to
the amounts set out in the TIP Group Limits of Authority policy. 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.
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.
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.
Common learnings
TIPReps have experienced the following common learnings:
1. You can’t have valuable board meetings without best-practice financial reporting: 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.
Since our formation in 2012, we have learned that it is impossible for boards to add value to Executives without
the benefit of best-practice financial reporting. Worse, if there are concerns about the veracity of reporting, the
board will quickly become dysfunctional, and profits will decline as trust breaks down. TIPReps must therefore
work to address this concern as one of their highest priorities by either:
a. Encouraging the Portfolio Company to hand financial reporting over to TIP head office. This will ensure that
Executives and TIPReps can focus on strategy without being concerned or distracted about the preparation,
and accuracy, of financial reporting and the six-monthly audit process. It is also likely to be financially beneficial
due to the costs saved by harnessing group economies of scale. Portfolio Companies who were not already
audited for a number of years prior to partnering with TIP, or who don’t already have the benefit of a highly-
educated, multi-person, financial team will benefit most from this approach; or
b. Showing how best practice record keeping, reporting and discussions can increase profits and enhance
decision making: enhancing company internal structures and creating an environment where the board can
encourage profitable action based on forward looking projections, not just rear-view examination. This
approach is best available to Portfolio Companies who already have robust, audit ready, systems in place with
a highly-educated CFO leading discussions. TIPReps in this situation can immediately focus on TIPBars and
TIPTool, confident that the forward looking analysis is meaningful for strategic discussion.
2. True leadership rarely extends below one or two key executives: SME’s rarely have top quality executives below
the C-level. This is simply a function of their size: supremely talented people are unlikely to be attracted to a
smaller organisation with limited career development opportunities. Therefore, in order for the business to grow,
or the founder to reduce their hours, a key requirement will be attracting the right kind of talent into the right
roles. In particular we have found that:
a. Existing employees rarely have the drive or skill required to step up to C-level in an SME. This is a function of
self-selection, ambitious and talented employees are unlikely to remain in a business where they cannot see
opportunities for rapid advancement. In smaller businesses this career path caps out by about the age of 30,
so most supremely talented staff either move on to bigger companies, or remain only if their ambition has
declined. With ambition being one of the three key requirements for leadership success (the other two being
passion and intelligence), fishing in the existing pool is likely to be unrewarding, and may well be why the
founder was attracted by TIP’s promise to help “transfer knowledge between generations”;
b. When external hires are considered, they are almost always the wrong kind. One of the great hiring fallacies
is that we look to hire people with already demonstrated experience in the role for which they are applying.
This sounds seductive, but it is a big mistake: someone who has demonstrated success in a role, is almost
never looking to take on the same role again in a smaller organisation. The only reason they would be prepared
to take such a role is if they know they had failed. Hiring “with experience” is almost certain to result in hiring
the wrong calibre of employee.
c. As we get older we forget just how young we were when we first took a leadership role. Most successful CEO’s
got their first real leadership break in their 20’s, and by their 30’s were running teams of 30 or more. Yet when
we look for leadership hires these same 20 and 30 year olds (as we once were) often appear brash, uncultured
and inexperienced, so we gloss over them for older hires. This plays into two traps: firstly it means that we
never hire the best talent – because a supremely talented 30 year old who is passed over for a role at your
company is running something far too large by 40 for us to ever get them; and secondly it means we miss out
on the well-documented fact that ambition and passion decline from middle-age onwards. Whilst a 50 year
old is likely to know more than a 25 year old, they are unlikely to be prepared to throw themselves in with the
ambition and passion required to drive transformational growth… and they are certainly unlikely to do so if
they still report upwards to another Executive!
3. Distractions kill. 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. This can result in a downward spiral unless (and until) TIPReps once again make
driving the profits of the business the core focus of the Executive team.
4. Vendor remorse is normal but must be addressed head-on. It is natural that after selling part of their baby,
founders and executives will 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 address this head on by
discussing the issue to give comfort, and immediately working on creating a company-wide Noble Purpose,
Mission, Vision and Big Hairy Audacious Goal. By setting these as a team early, we harness the power of passion
to drive results and overcome any fear or concern about the decision to sell. A clear path to “growing their baby
together” is the fastest and most effective way of motivating Executives and giving comfort that they made the
right decision to partner with TIP.
5. Focus board time on delivering the Noble Purpose, not working on the day to day. 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 focussing Executives on the steps needed to achieve the company’s Noble
Purpose. By doing so you will get most out of the board meeting and drive double digit growth. Discussions will
focus on major opportunities, new moats and mitigating risks, not the daily grind. A TIPRep who finds themselves
involved in day-to-day decision making, is doing a disservice to executives and their fellow shareholders.
Interacting with executives
Learn what ‘makes them tick’: Before joining a board, TIPReps should meet with Executives and other board members
informally to learn ‘what makes them tick’. It is easier to mentor and build profits with people we understand. Meeting
in an informal setting allows a prospective TIPRep to see what interests and cultural values they have in common with
the Executives (critical for mentoring and driving profit) and their prospective fellow directors (critical for defining long
term goals and maintaining passion towards achieving them). You should also use this opportunity to find out more
about the business, discuss moats and risks identified during the SMaRT and Due Diligence, and to find out what has
already done to strengthen moats and eliminate, mitigate or manage risks. With a good starting point a TIPRep is
certain to add more value than coming in blind and learning on the job.
Understanding the business: It takes time for a relative outsider to understand the most important Key Performance
Indicators (KPIs) that drive profits. Executives with a history of profitable leadership in the business should already
know what is most important to measure: even if they may not always communicate it with clarity. TIPReps would
therefore be wise to ask lots of “Why” questions. “Why did we do X?”, “Why do you consider Y worth measuring?”,
“Why do you think this is a good or bad idea?”. Asking lots of Why questions (instead of What or How questions) is the
fastest way to build a deep and intuitive understanding of the key drivers of the business. And as a board member you
need that intuitive understanding to better mentor the CEO and make fast decisions.
Noble Purpose and long-term goals: It is the responsibility of Executives to ensure a profitable business every month.
Providing the Executives are doing so, the key responsibility of TIPReps becomes focussing on mentoring and
developing executives to achieve the Noble Purpose and long term goals of the Portfolio Company. TIPReps should
therefore spend the majority of their time with Executives focussed on exploring how the company can grow it’s
moats, reduce it’s risks and deliver it’s Noble Purpose.
Executive remuneration: Executive remuneration is set by the Strategy Committee and follows TIP’s principles of
handsomely rewarding performance, and penalising failure. In particular, TIPReps should be aware that executives are
remunerated with three components:
▪ A low base salary, of sufficient size to keep the lights on but small enough that a poor performing Executive
will quickly look for a job elsewhere;
▪ A monthly bonus paid for every month that is profitable, to incentivise Executives to design and operate the
business in such a way that it never loses money; and
▪ A share of the audited NPAT of the business, providing an outsized reward for stellar performance.
Any changes in remuneration for Executives is therefore linked entirely to their performance. TIPReps should be aware
of this, and take actions that encourage the Executives to achieve their monthly bonus every month (e.g. focussing on
BESM), whilst ensuring a path to meaningful long term profit growth. In this way both the Executive and TIP’s
shareholders will win together.
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.
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.
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 is covered in detail in the Group Distribution Policy. TIPReps
should be familiar with this policy, and in particular its focus on the mix between paying down debt, reinvesting for
growth and paying dividends.
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. If debt is needed, it must first be approved by the Strategy
Committee.
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.
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.
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.
Reporting to TIP
Strategy Committee: TIPReps report to the Strategy Committee. The Strategy Committee meets with each board on
a quarterly basis to assess performance and provide advice. In particular, each Portfolio Company is required to fill out
a quarterly board self-assessment sheet (focussed on the performance of the board) and a Quarterly Traction Report
(focussed on the performance of the company towards it’s Noble Purpose and growth targets). The Strategy
Committee will use the performance of the Portfolio Company, and the results of these quarterly assessments to
tweak the TIPRep mix to achieve the best results for the Group.
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.
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 via the Quarterly Traction
Report.
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.
GUIDANCE FOR EXECUTIVES
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. Develop a great 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 who regularly “mines shareholders
wallets” will soon find themselves without a role.
Culture and mentoring: Just as it’s 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.
Economic Moats are the Path 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.
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.
Fast action: 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.
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.
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.
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.
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.
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.
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.
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.
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 their board self-assessment and Quarterly
Traction Report to the Strategy Committee. 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.
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.
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.
Reporting to TIP and the company board
Reporting to the company board: Each month, the company board will want to know:
▪
sales revenue for the period (month, quarter, year to date);
▪ 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:
▪
▪
▪
▪
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
▪ make progress towards building a stronger executive team.
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.
Teaminvest Private Group Limited
ABN 74 629 045 736
Annual Report - 30 June 2021
Teaminvest Private Group Limited
Contents
30 June 2021
Corporate directory
Directors’ report
Auditor’s independent 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
18
19
20
21
22
23
68
69
76
1
Teaminvest Private Group Limited
Corporate directory
30 June 2021
Directors
Malcolm Jones - Chair
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Company secretary
Anand Sundaraj
Registered office
Share register
Auditor
Solicitors
Suite 302
80 Mount Street
North Sydney NSW 2060
Computershare Investor Services Pty Ltd
452 Johnston Street
Abbotsford VIC 3067
Tel: 1300 850 505
KPMG
Level 38, Tower Three, International Towers Sydney
300 Barangaroo Avenue
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
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
operations.
extent
appropriate
nature
size
and
the
its
of
to
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 for the year ended 30 June 2021 and the Group’s
corporate governance policies can be found on the Company’s website at
https://www.teaminvestprivate.com.au/investor-information.
2
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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 year ended 30 June 2021.
Directors
The following persons were directors of Teaminvest Private Group Limited during the whole of the financial year and
up to the date of this report, unless otherwise stated:
• Malcolm Jones - Chair
• Andrew Coleman
• Howard Coleman
•
Ian Kadish
• Regan Passlow
Principal activities
During the financial period the principal continuing activities of the Group consisted of investing in Australian businesses.
Dividends
There were no dividends paid, recommended, or declared during the current or previous financial year.
Review of operations
The profit for the Group after providing for income tax amounted to $5,201,000 (30 June 2020: $8,306,000).
The Group as a whole has delivered another solid performance increasing NPAT on a comparable basis (excluding
insurance recoveries) to FY20. Whilst some individual subsidiaries have been affected by COVID-19, previous years
bushfires and trade disruptions from international suppliers, the impact has been to the revenue line. The majority of
the Group have effectively managed to increase profit as a result of Management’s strategy of capitalising on
opportunities that have arisen from the pandemic.
Coastal Energy has been adversely impacted due to being suspended as a rated service provider by Energex
Corporation Limited, resulting in a loss of $6,100,000. The portfolio structure of our Group has enabled the results to
continue along the growth path expected as a whole. The new management have a key focus on reinvigorating the
business model, operations, and safety practices of Coastal Energy. While the performance of Coastal Energy
detracted from the Group performance significantly, swift action has been taken to limit the future impact.
Refer to the 'CEO report' for further details of operations and commentary on the results.
Significant changes in the state of affairs
On 17 September 2020, the Group acquired 100% of the shares in Automation Group Investments Pty Ltd for
the initial purchase price of $2,660,000 and a contingent consideration of $400,000 based on a percentage of revenue
generated under a key contract for financial year 2021 payable after completion of the 2021 financial year audit. Refer
to note 34 to the financial statements for further information.
On 30 June 2021, the Group acquired 100% of the shares in Teaminvest Pty Ltd and other related entities, through
the issue of shares in the Group, for a non-cash purchase price of $8,110,000. Refer to note 34 to the financial
statements for further information.
There were no other significant changes in the state of affairs of the Group during the financial year.
3
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Matters subsequent to the end of the financial year
The impact of the COVID-19 pandemic is ongoing and whilst individual subsidiaries have been impacted differently, the
net effect on the Group's results remain within a reasonable bound compared to 30 June 2021. It is not practicable to
estimate the potential impact, positive or negative, after the reporting date as the situation attributed to the Delta variant
is evolving. Any future estimate is dependent on measures imposed by both State and Australian Governments, such
as lockdowns, quarantine, travel restrictions and any economic stimulus that may be provided.
Likely developments and expected results of operations
Refer to the 'CEO letter' 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.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Malcolm Jones
Independent Chair
FCA
Malcolm has experience in managing large organisations. He has held
positions as a member of the Group Management Board Zurich Financial
Services in Switzerland, CEO Zurich Financial Services Asia Pacific, CEO
Zurich Financial Services Australia Ltd, CEO NRMA Ltd & NRMA Insurance
Ltd and CEO State Government Insurance commission of South Australia.
Prior to these executive roles Malcolm was a Partner at Ernst & Young where
he had worked for 18 years.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
None
None
Member of Strategy Committee and Audit Committee
2,169,359
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:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
None
None
Member of the Strategy Committee and Investment committee
12,250,092
None
None
4
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
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
language and
sales, marketing, publishing, consumer
mathematics education in Australia, South Africa and the UK. Howard has held
Board positions in a number of private companies in several countries
including South Africa, UK, Australia and Canada . 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.
finance, and
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 has regularly appeared as a guest commentator on Sky Business and
Ausbiz. Howard is a founding director of Teaminvest, Teaminvest Private and
Conscious Capital.
None
None
Member of the Strategy Committee
17,173,795
None
None
Ian Kadish
Independent Non-Executive Director
MBBCH MBA
Experience and expertise: 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 a Master's 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.
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
Integral Diagnostics Limited (ASX: IDX)
None
Chairman of the Strategy Committee and member of Audit Committee
236,459
None
None
5
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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:
Former directorships (last 3 years):
Special responsibilities:
Interest in shares:
Interest in options:
Contractual rights to shares:
None
None
Chairman of the Investment Committee and member of Audit Committee
3,622,448
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 20 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.
6
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during
the year ended 30 June 2021, and the number of meetings attended by each director were:
Malcolm Jones
Andrew Coleman
Howard Coleman
Ian Kadish
Regan Passlow
Full Board
Attended
12
12
12
12
12
Held
12
12
12
12
12
Investment Committee
Held
-
24
-
-
24
Attended
-
21
-
-
22
Strategy Committee
Held
12
12
12
12
-
Attended
12
12
12
12
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Audit Committee
The Company has established an Audit Committee which has three members, two of whom are independent
(including an independent Chair):
- Dr Ian Kadish, independent chair of the committee;
- Mr Malcolm Jones, independent member of the committee; and
- Mr Regan Passlow, non-executive member of the committee.
The number of meetings of the Audit Committee held during the year ended 30 June 2021, and the number of
meetings attended by each director were:
Malcolm Jones
Ian Kadish
Regan Passlow
Audit Committee
Attended
3
3
3
Held
3
3
3
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
Risk and Compliance Committee
The Company has established a Risk and Compliance Committee which has seven members comprising Mr Dean
Robinson, the CFO of the Company and chair of the committee, and six Selected Shareholders. The Risk and
Compliance Committee’s function is to continuously review the risk, compliance framework and corporate governance
policies of the Group’s Portfolio Companies to inculcate and improve operations. The Risk and Compliance Committee
meets on a monthly basis.
Nomination and Remuneration Committee
The Company has not constituted a Nomination and Remuneration Committee given the nature and scale of the Group’s
operations. The Board as a whole fulfils the functions normally delegated to a Nomination and Remuneration Committee.
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.
7
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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 Group’s earnings and the consequences of the Group’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 their 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 Director's fees
Malcolm Jones $100,000 per annum (including superannuation).
Howard Coleman $70,000 per annum (including superannuation).
Ian Kadish $70,000 per annum (including superannuation).
Regan Passlow $70,000 per annum (including superannuation).
8
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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. 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
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by
the Board based on individual and business unit performance and the overall performance of the Group. The fixed
remuneration is set below comparable market remunerations. A greater percentage of total executive remuneration is
available through short term and long term incentives based on performance.
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, annual leave 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 2020, in relation to Andrew Coleman and Dean Robinson
STI of $50,000 (inclusive of super) was awarded for successfully managing the Group, enabling a positive collaborative
environment and enhancing the growth of the Group through difficult economic times. The STI Program has not been
continued in period ended 30 June 2021.
9
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Period up to 30 June 2020
Remuneration for certain individuals is directly linked to the performance of the Group as part of the LTI. After
shareholder approval, the Company issued four tranches of $300,000 performance rights to Andrew Coleman and four
tranches of $250,000 performance rights to Dean Robinson, over four years. Each tranche of performance rights was
converted into ordinary shares upon the achievement of the comprehensive income per share targets set out below.
The last two tranches have lapsed due to change in remuneration policy as approved by shareholders in the 2020
annual general meeting.
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
Remuneration under LTI consists of performance shares with an income per share target.
The first tranche of performance share targets represented a significant premium to the income per share at listing.
Each subsequent tranche represented a further large increase in income per share.
Period from 01 July 2020
The Board introduced incentive based on Net Profit After Tax as described below.
An annual bonus equal to 3.5% of the Group’s audited comprehensive income for the financial year (before expensing
the cost of the bonus) comprising:
• 50% to be paid in cash (Cash Component); and
• 50% to be issued as shares in the Company (Share Component).
The cash component of the bonus is determined twice each financial year:
1. 50% is paid after the half year review; and
2. 50% is paid after the audited full year results.
The share component is to be determined after the audited full year results, the shares are issued at a 10-day VWAP
as at 30 June. In addition, any shares issued in satisfaction of the Share Component will be subject to escrow for 30
months from the end of the financial year
Use of remuneration consultants
During the financial period ended 30 June 2021, 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:
• Malcolm Jones - Independent Chair
• Howard Coleman - Non-Executive Director
•
• Regan Passlow - Non-Executive Director
• Andrew Coleman - Managing Director and Chief Executive Officer ('CEO')
Ian Kadish - Independent Non-Executive Director
And the following person
• Dean Robinson - Chief Finance Officer ('CFO')
10
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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
Cash
salary
and fees
Cash
bonus
Annual
leave
Superannuation
Long-
term
benefits
Long
service
leave
Share-based payment
Equity
unsettled*
LTI
unsettled
Total
30 June 2021
$
$
$
$
$
$
$
$
Non-Executive
Directors:
Malcolm Jones
45,662
Howard
Coleman
31,963
Ian Kadish
31,963
Regan
Passlow
31,963
-
-
-
-
-
-
-
-
8,676
6,073
6,073
6,073
-
-
-
-
45,662
31,963
31,963
31,963
-
-
-
-
100,000
70,000
70,000
70,000
Executive
Directors:
Andrew
Coleman
Other Key
Management
Personnel:
Dean
Robinson
200,000
97,858
15,385
23,338
3,333
97,858
-
437,772
200,000
97,858
15,385
23,338
-
97,858
541,552
195,716
30,770
73,571
3,333
337,268
-
-
434,439
1,182,210
* share based payments represent half of non-executive directors' remuneration and half of executive director and other
key management personnel's bonuses, that have been accrued and not paid during the financial year. These payments
are to be settled in share based payments subject to Board approval and shareholder vote at the AGM. If approval is
not granted, these will be paid in cash.
11
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Short-term benefits Post-Employment benefits
Cash
bonus
Annual
leave
Superannuation
Long-
term
benefits
Long
service
leave
Share-based payments
Equity
settled****
Equity
unsettled#
LTI
unsettled
Total
$
$
$
$
$
$
$
$
-
-
-
-
-
-
-
-
4,765
6,073
6,073
6,073
2,147
-
-
-
-
-
-
25,077
17,500
14,464
23,333
8,631
23,333
8,631
22,789
-
-
-
-
-
-
54,919
70,000
70,000
71,834
45,578
Cash
salary
and
fees
$
25,077
31,963
30 June 2020
Non-
Executive
Directors:
Malcolm
Jones*
Howard
Coleman
Ian Kadish
31,963
Regan
Passlow
Katherine
Woodthorpe**
31,963
20,642
Executive
Directors:
Andrew
Coleman***
Other Key
Management
Personnel:
Dean
Robinson***
200,000
45,662
15,385
23,338
3,333
-
-
600,000
887,718
200,000
45,662
15,385
23,338
-
-
-
500,000
784,385
543,276
91,324
30,769
71,974
3,333
86,955
56,803
1,100,000 1,984,435
*
**
***
****
#
Remuneration disclosed is for the period from 13 December 2019 to 30 June 2020.
Remuneration disclosed is for the period from 1 July 2019 to 13 December 2019.
The long-term incentive amounts were met, and the board resolved on 31/08/2020 that the first two
tranches were vested.
Share based payments – Equity settled portion were approved at the 2019 AGM by Shareholder
vote.
Share based payments represent half of non-executive directors’ remuneration were accrued and not
paid during the financial year. Payments were settled in share-based payments subsequent to a
Shareholder vote at the AGM.
12
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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:
Malcolm Jones
Independent Chairperson
13 December 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
$219,000 per annum
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Leave entitlements are accrued on top of the annual salary.
13
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021 are set out below:
30 June 2021
Shares issued to KMP
Shares issued to directors
30 June 2020
Shares issued to directors*
Issue Date
Number of Shares
Issue
Price
Total Value
04/09/2020
04/12/2020
2,080,181
107,416
$0.53
$0.53
1,100,000
56,803
27/11/2019
184,259
$0.84
154,999
The shares were issued in lieu of 50% of the directors' fees accrued but not paid to non-executive directors during the
30 June 2019 and 30 June 2020 financial years. There were no options over ordinary shares granted to or vested by
directors and other key management personnel as part of compensation during the year ended 30 June 2021.
Additional information
The earnings of the Group for the two years to 30 June 2021 are summarised below:
EBITDA
Statutory comprehensive income/(loss) - pre-bonus
Profit/(loss) after tax
2021
$13,058,000
$5,592,000
$5,201,000
2020
$11,834,000
$9,076,000
$8,306,000
Statutory comprehensive income/(loss) per share - pre-bonus
LTI % achieved
n/a
n/a
$0.082
50%
14
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Ordinary
shares
Malcolm
Jones
Howard
Coleman
Ian
Kadish
Regan
Passlow
Andrew
Coleman
Dean
Robinson
Balance at
the start of
the year
Received
as part of
remuneration
Additions Disposals/other
Balance at
the end of
the year
2,121,937
47,422
-
-
2,169,359
16,777,525
16,321 12,979,949
(12,600,000)*
17,173,795
149,107
27,352
60,000
1,077,045
16,321
2,529,082
11,022,744
1,134,644
92,704
-
-
-
-
236,459
3,622,448
12,250,092
1,078,455
132,917
31,281,275
945,538
-
2,187,598 15,661,735
(12,600,000)
36,530,608
* Related to the Teaminvest Pty Ltd and related entities acquisition as per note 34.
This concludes the remuneration report, which has been audited.
15
Teaminvest Private Group Limited
Directors’ report
30 June 2021
Shares under option
There were no unissued ordinary shares of Teaminvest Private Group Limited under option outstanding at the date of
this report.
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 year
ended 30 June 2021 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives
of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 29 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 29 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting
Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a
management or decision-making capacity for the Group, acting as advocate for the Group or jointly sharing
economic risks and rewards.
Officers of the Company who are former partners of KPMG
There are no officers of the Company who are former partners of KPMG.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
16
Teaminvest Private Group Limited
Directors’ report
30 June 2021
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
KPMG continues in office in accordance with section 327 of the Corporations Act 2001.
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
26 August 2021
Sydney
17
To the Directors of Teaminvest Private Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Teaminvest Private
Group Limited for the financial year ended 30 June 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPM_INI_01
KPMG
Tony Nimac
Partner
Sydney
26 August 2021
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
© 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks
used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
18
Teaminvest Private Group Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Consolidated
Note
30 Jun 2021
$'000
30 Jun 2020
$'000
Revenue
Revenue from contracts with customers
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 goodwill
Impairment of receivables
Net loss on disposal of property, plant and equipment
Occupancy expense
Initial public offering ('IPO') listing expense
Other expenses
Finance costs
Profit before income tax
Income tax expense
Profit after income tax for the year attributable to the owners
of Teaminvest Private Group Limited
5
13
6
7
16
7
8
91,443
2,867
6,803
261
(40,332)
(39,524)
(2,869)
(4,260)
(360)
-
(627)
-
(7,212)
(399)
89,002
1,858
5,747
93
(41,676)
(35,661)
(2,514)
-
(302)
(60)
(1,227)
(42)
(5,898)
(399)
5,791
8,921
(590)
(615)
5,201
8,306
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the
owners of Teaminvest Private Group Limited
5,201
8,306
Basic earnings per share
Diluted earnings per share
37
37
Cents
4.46
4.43
Cents
7.47
7.32
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
19
Teaminvest Private Group Limited
Statement of financial position
As at 30 June 2021
Consolidated
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Prepayments and other deposits
Total current assets
Non-current assets
Investments accounted for using the equity method
Other financial assets
Property, plant and equipment
Right-of-use assets
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax
Employee benefits
Provisions
Deferred consideration
Total current liabilities
Non-current liabilities
Lease liabilities
Deferred taxes
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained profits
Total equity
Note
30 Jun 2021
$'000
30 Jun 2020
$'000
9
10
11
12
13
14
15
16
17
18
19
20
21
23
8
24
25
12,346
8,959
8,049
8,379
938
38,671
21,412
111
5,618
3,606
63,044
93,791
10,777
8,397
9,033
6,612
228
35,047
19,124
4
4,200
3,817
45,770
72,915
132,462
107,962
13,780
4,877
1,323
1,997
191
2,168
193
258
24,787
2,694
5,996
377
9,067
33,854
98,608
87,597
11,011
98,608
15,759
3,117
379
1,976
2
1,790
248
-
23,271
3,196
6
293
3,495
26,766
81,196
75,386
5,810
81,196
The above statement of financial position should be read in conjunction with the accompanying notes
20
Teaminvest Private Group Limited
Statement of changes in equity
For the year ended 30 June 2021
Consolidated
Note
Issued
capital
$'000
Retained
profits/
(accumulated
losses)
$'000
Total
equity
$'000
Balance at 1 July 2019
75,231
(2,496)
72,735
Profit after income tax for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Issue of ordinary shares for directors' fees'
Issue of ordinary shares for bonuses
-
-
-
155
-
155
8,306
-
8,306
-
8,306
8,306
-
-
-
155
-
155
Balance at 30 June 2020
75,386
5,810
81,196
Consolidated
Note
Issued
capital
$'000
Retained profits
$'000
Total
equity
$'000
Balance at 1 July 2020
75,386
5,810
81,196
Profit after income tax for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Issue of ordinary shares for settlement of share based
payments
Issue of ordinary shares related to business combinations
Issue of ordinary shares for directors' fees'
Issue of ordinary shares for bonuses
34
Balance at 30 June 2021
-
-
-
1,100
10,769
57
285
12,211
87,597
5,201
-
5,201
-
5,201
5,201
-
-
-
-
-
1,100
10,769
57
285
12,211
11,011
98,608
The above statement of changes in equity should be read in conjunction with the accompanying notes
21
Teaminvest Private Group Limited
Statement of cash flows
For the year ended 30 June 2021
Consolidated
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Other receipts
Interest received
Dividends received
Interest and other finance costs paid
Income taxes refunded/(paid)
Net cash from operating activities
Cash flows from investing activities
Net cash acquired from business combinations
Payments for investment in associates
Payments for other financial assets
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of lease liabilities
Loans from/(to) related and other parties
Repayment of invoice discounting
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Note
30 Jun 2021
$'000
30 Jun 2020
$'000
36
34
14
16
92,745
(92,311)
3,947
261
653
(399)
500
93,645
(88,180)
5,221
93
233
(399)
(576)
5,396
10,037
1,188
(74)
-
(2,622)
(468)
95
(60)
-
(4)
(1,131)
(124)
61
(1,881)
(1,258)
43
(2,269)
-
(35)
(340)
(1,663)
(1,375)
(478)
(2,261)
(3,856)
1,254
10,777
4,923
5,854
Cash and cash equivalents at the end of the financial year
9
12,031
10,777
Represented by:
Cash and cash equivalents
Less: bank overdraft
12,346
(315)
10,777
-
12,031
10,777
The above statement of cash flows should be read in conjunction with the accompanying notes
22
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
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:
Suite 302, 80 Mount 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.
For the purposes of the consolidated financial statements, Teaminvest Private Pty Ltd has been identified as the
accounting parent (legal acquiree) and the Group as the legal parent (accounting acquiree).
The financial statements were authorised for issue, in accordance with a resolution of directors, on 26 August 2021.
The directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
Group, are set out below.
New Conceptual Framework for Financial Reporting
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the Group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the Group may need to review such policies under the revised framework.
At this time, the application of the Conceptual Framework is not expected to have a material impact on the Group's
financial statements.
23
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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, unless otherwise stated.
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 39.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Teaminvest Private
Group Limited as at 30 June 2021 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.
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.
24
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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 is typically recognised at the point
in time when the customer obtains control of the goods, which is generally at the time of installation or delivery.
• glass splashbacks, glass bathroom walls and toughened mirrors;
•
• automation and remote monitoring products.
semi-trailers; and
Revenue from the design, development and installation of electrical network extensions and upgrades work in exchange
for a fixed fee is recognised over time.
Rendering of services
Revenue from a contract to provide 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 and traffic management services in
exchange for a fixed fee, are 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 for the effects of financing.
The revenue from subscription and education services is recognised over the respective deemed benefit period.
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.
25
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that
it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
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.
26
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation
purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current
liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach 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
has yet to issue an invoice. 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.
27
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the
assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where
included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the
underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment
or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or
loss as incurred.
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.
Customer contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 6 to 15 years, unless determined otherwise.
28
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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, unless determined otherwise.
Formation costs
Costs in relation to the formation of the Group are capitalised as an asset. These costs are not subsequently amortised.
Patents, licence and trademarks
Significant costs associated with patents, licenses, brands, and trademarks, if with a finite life, are deferred and
amortised on a straight-line basis over the period of their expected benefit, being their finite useful life or 10 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.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is
the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the
asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped
together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when
a customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to
consideration (whichever is earlier) before the Group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise
of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate,
amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise
of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used;
residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of
the right-of-use asset is fully written down.
29
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the
amount of cash is determined by reference to the share price.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and
a comparison, where applicable, with external sources of data.
30
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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.
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. Acquisition costs are expensed
as incurred.
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 acquiree.
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.
When two or more entities combine through an exchange of equity interests, AASB 3 requires one of the entities to be
deemed the acquirer under a reverse acquisition. In a ‘reverse acquisitions’, the issuing entity is the deemed to be the
acquiree (legal parent) and the acquirer is deemed to be the subsidiary. In identifying the acquirer in a reverse acquisition
the consideration is given in facts and circumstances including (a) the relative voting rights in the combined entity after
the business combination; (b) the existence of a large minority voting interest in the combined entity if no other owner
or organised group of owners has a significant voting interest; (c) the composition of the governing body of the combined
entity; (d) the composition of the senior management of the combined entity and (e) the terms of the exchange of equity
interests. The acquirer is usually the combining entity whose relative size (measured in, for example, assets, revenues
or profit) is significantly greater than that of the other combining entity or entities.
31
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 2. Significant accounting policies (continued)
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 year, adjusted for bonus elements in ordinary shares issued during the financial
year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
Comparative information
Comparatives have been restated, where appropriate, to conform to changes in presentation in the current year and to
enhance comparability. There was no net effect on the net asset position.
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.
32
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
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.
COVID-19 pandemic
Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on the
Group based on known information. This consideration extends to the nature of the products and services offered,
customers, supply chain, staffing and geographic regions in which the Group operates. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which has impacted the Group unfavourably as at the
reporting date or subsequently as a result of the COVID-19 pandemic.
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, historical collection rates, the impact
of the COVID-19 pandemic and forward-looking information that is available
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.
33
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 3. Critical accounting judgements, estimates and assumptions(continued)
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.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date.
Such a rate is based on what the Group estimates it would have to pay a third party to borrow the funds necessary to
obtain an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
34
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
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 provides
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 are as follows:
Segment name
Description
Engineering segment
Services segment
The engineering segment includes three wholly-owned subsidiaries of the Group: Lusty
TIP Trailers Pty Ltd; Icon Metal Pty Ltd; Automation Group Investments Pty Ltd and
Coastal Energy Pty Ltd.
The services segment includes five wholly-owned subsidiaries; East Coast Traffic
Controllers Pty Ltd, Teaminvest Private Residential Group Pty Ltd (aggregation of
DecoGlaze Holdings Pty Ltd (previously under Engineering segment), Kitome Pty Ltd,
Boutique Portraits Pty Ltd, and The Step Ahead Builder’s Assistant Pty Ltd), Valuestream
Investment Management Limited and Teaminvest Pty Ltd and three associate entities:
Colour Capital Pty Ltd, Multimedia Technology Pty Ltd and Teaminvest Private Insurance
Services 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 material intersegment transactions.
Intersegment receivables, payables and loans
There were intersegment receivables, payables and loans amounting to $nil (2020 $nil).
Major customers
During the period ended 30 June 2021, the Group had sales to a construction customer that amounted to $13,250,249
(2020: $9,175,000).
35
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 4. Operating segments (continued)
Consolidated - 30 June 2021
Engineering
$'000
Services
$'000
Total
$'000
Revenue
Sales to customers
Other revenue
Total
EBITDA
Depreciation and amortisation expense
Interest revenue
Other income
Gain on business combinations
Government grants
Finance costs
Impairment of intangibles
Corporate overheads
Profit before income tax expense
Income tax
Profit after income tax expense
Assets
Segment assets
Unallocated assets:
Corporate assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities:
Provision for income tax
Deferred tax liability
Deferred consideration
Corporate liabilities
Total liabilities
64,210
286
64,496
26,259
371
26,630
90,469
657
91,126
5,111
3,922
9,033
(2,869)
261
317
3,734
2,522
(399)
(4,294)
(2,514)
5,791
(590)
5,201
55,865
70,774
126,639
5,823
132,462
18,067
7,625
25,692
191
5,996
258
1,717
33,854
36
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 4. Operating segments (continued)
Consolidated - 30 June 2020
Engineering
$'000
Services
$'000
Total
$'000
Revenue
Sales to customers
Other revenue
Total
EBITDA
Depreciation and amortisation expense
Interest revenue
Other income
Gain on business combinations
Government grants
Finance costs
Corporate overheads
Profit before income tax expense
Income tax
Profit after income tax expense
Assets
Segment assets
Unallocated assets:
Corporate assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities:
Provision for income tax
Deferred tax liability
Corporate liabilities
Total liabilities
61,895
381
62,276
25,635
363
25,998
87,530
744
88,274
5,963
7,275
13,238
(2,514)
93
728
594
1,096
(399)
(3,915)
8,921
(615)
8,306
54,826
49,560
104,386
3,576
107,962
18,395
6,783
25,178
2
6
1,580
26,766
37
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 5. Revenue from contracts with customers
Consolidated
Revenue from contracts with customers
Sale of goods
Rendering of services
Other revenue
Other sales revenue
Revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
30 Jun 2021
$'000
30 Jun 2020
$'000
39,805
50,664
90,469
974
91,443
48,827
38,703
87,530
1,472
89,002
Consolidated - 30 June 2021
Geographical Regions
Australia
Timing of Revenue recognition
Goods transferred at a point in time
Goods transferred over time
Services transferred at a point in time
Services transferred over time
Consolidated - 30 June 2020
Geographical Regions
Australia
Timing of Revenue recognition
Goods transferred at a point in time
Goods transferred over time
Services transferred at a point in time
Services transferred over time
Engineering
$'000
Services
$'000
Total
$'000
64,210
26,259
90,469
35,486
6,902
604
21,218
4,319
-
9,647
12,293
39,805
6,902
10,251
33,511
64,210
26,259
90,469
Engineering
$'000
Services
$'000
Total
$'000
61,895
25,635
87,530
30,242
13,523
438
17,692
5,063
-
10,085
10,487
35,305
13,523
10,523
28,179
61,895
25,635
87,530
38
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 6. Other income
Consolidated
Gain on bargain purchase
Government grants
Insurance recoveries
Reimbursement of expenses
Other
Net gain on disposal of property, plant, and equipment
Other Income
30 Jun 2021
$'000
30 Jun 2020
$'000
3,734
2,522
-
84
368
95
6,803
594
1,096
4,020
37
-
-
5,747
Government grants (COVID-19)
The Group as a whole has delivered another solid performance increasing NPAT on a comparable basis to FY20.
Whilst some individual subsidiaries have been affected by COVID-19, previous years bushfires and trade disruptions
from international suppliers, the impact has been to the revenue line. The remainder of the group, due to strength of
management have been able to capitalise on the opportunities presented by the pandemic and have grown revenue
and managed overheads to be able to increase profits. The portfolio structure of our Group has enabled the results
to continue along the growth path expected as a whole.
As the result of the loss of the founder of a subsidiary in July 2019 the group received an insurance payout of $4,020,000
under two keyman policies.
Refer to the 'CEO report' for further details of operations and commentary on the results.
39
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 7. Expenses
Consolidated
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Motor vehicles
Buildings right-of-use assets
Plant and equipment right-of-use assets
Motor vehicles right-of-use assets
Total depreciation
Amortisation
Patents and trademarks
Customer contracts
Software
Formation costs
Total amortisation
Total depreciation and amortisation
Finance costs
Interest paid on borrowings
Interest paid on lease liabilities
Finance costs expensed
Leases
Short-term lease payments
Low-value assets lease payments
30 Jun 2021
$'000
30 Jun 2020
$'000
98
470
360
1,419
32
49
2,428
94
249
66
32
441
2,869
159
240
399
68
-
68
66
335
374
1,054
48
32
1,909
1
601
3
-
605
2,514
243
156
399
858
17
875
40
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 8. Income tax
Consolidated
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Aggregate income tax expense
Numerical reconciliation of income tax expense/(benefit) and tax at the statutory
rate
Profit before income tax
Tax at statutory rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Insurance recoveries
Gain on bargain purchase
Other non-taxable income
Share of profits - associates
Non-deductible expenses
Adjustment recognised for prior periods
Income tax expense
30 Jun 2021
$'000
30 Jun 2020
$'000
208
590
(208)
(522)
1,024
113
590
615
5,791
8,921
1,737
2,676
-
(1,120)
(258)
(860)
1,299
798
(208)
590
(1,206)
(178)
(281)
(551)
46
502
113
615
41
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 8. Income tax (continued)
Consolidated
Deferred tax asset/(liability)
Deferred tax asset/(liability) comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Allowance for expected credit losses
Rights-of-use
Contract liabilities
Employee benefits
Provision for warranties and claims
Accrued expenses
Retention receivable
Prepayments
Contract assets
Inventories
Intangible assets
Property, plant, equipment
Other
Deferred tax asset/(liability)
Movements:
Opening balance
Credited/(charged) to profit or loss
Additions through business combinations (note 34)
Other
Closing balance
30 Jun 2021
$'000
30 Jun 2020
$'000
767
36
66
802
795
40
(18)
(683)
(54)
(1,558)
(11)
(5,781)
(125)
(272)
(5,996)
(6)
(590)
(5,128)
(272)
(5,996)
640
91
79
1,482
1,074
60
39
(460)
(41)
(2,150)
(11)
(707)
(102)
-
(6)
995
(1,024)
-
23
(6)
42
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 9. Current assets – cash and cash equivalents
Cash on hand
Cash at bank
Cash on deposit
30 Jun 2021
$'000
30 Jun 2020
$'000
4
12,081
261
12,346
2
8,466
2,309
10,777
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement
of cash flows as follows:
Balances above
Bank overdraft
Balance as per statement of cash flows
Note 10. Current assets - trade and other receivables
Trade receivables
Allowance for expected credit losses
Loan receivable
Receivable from employees
Receivable from related parties
Other Receivables
12,346
(315)
12,031
10,777
-
10,777
30 Jun 2021
$'000
30 Jun 2020
$'000
9,259
(398)
8,861
69
11
80
-
18
8,959
8,215
(302)
7,913
-
8
8
13
463
8,397
43
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 10. Current assets – trade and other receivables (continued)
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
Gross
carrying
amount
Carrying Amount
Allowance for expected
credit losses
30 June
2021
%
30 June
2020
%
30 June
2021
$'000
30 June
2020
$'000
30 June
2021
$'000
30 June
2020
$'000
-
-
7,473
5,768
-
18.18%
100%
-
11.45%
61.12%
1,407
110
269
9,259
1,512
262
673
8,215
-
-
20
378
398
-
-
30
272
302
Consolidated
Not overdue (less than 1
month)
Between 1 to 3 months
Between 3 to 6 months
Over 6 months*
*Higher expected credit losses rate attributed to Coastal Energy.
Movements in the allowance for expected credit losses are as follows:
Consolidated
Opening balance
Additional provisions recognised
Additions through business combinations
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Note 11. Current assets - contract assets
Consolidated
Contract assets
Opening balance
Additions
Additions through business combinations
Transfer to trade receivables
Closing balance
30 Jun 2021
$'000
30 Jun 2020
$'000
302
360
40
(77)
(227)
398
443
26
-
(165)
(2)
302
30 Jun 2021
$'000
30 Jun 2020
$'000
8,049
9,033
9,033
35,906
(2)
(36,888)
8,049
5,699
34,335
3
(31,004)
9,033
44
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 12. Current assets – inventories
Consolidated
Raw materials - at cost
Work in progress - at cost
Finished goods - at cost
30 Jun 2021
$'000
30 Jun 2020
$'000
3,687
2,531
2,161
8,379
100
3,789
2,723
6,612
Note 13. Non-current assets - investments accounted for using the equity method
Consolidated
30 Jun 2021
$'000
30 Jun 2020
$'000
Investment in associates
21,412
19,124
Reconciliation
Reconciliation of the Group’s carrying amounts at the beginning and end of the current and previous financial year are
set out below:
Consolidated
Opening carrying amount
Profit after income tax
Additions
Dividends received
Closing carrying amount
30 Jun 2021
$'000
30 Jun 2020
$'000
19,124
2,867
74
(653)
17,499
1,858
-
(233)
21,412
19,124
Detailed Reconciliation:
A detailed reconciliation of the Group’s carrying amounts at the beginning and end of the current and previous financial
year are set out below:
Colour Capital
Multimedia
Technology
30 Jun
2021
$'000
30 Jun
2020
$'000
30 Jun
2021
$'000
30 Jun
2020
$'000
Teaminvest
Private Insurance
30 Jun
30 Jun
2020
2021
$'000
$'000
Reconciliation of the Group's carrying amount
Beginning balance/acquisition price
Share of profit/(loss) after income tax
Share of dividends received
8,096
1,006
(500)
7,677 11,038
1,859
(150)
502
(83)
9,822
1,366
(150)
Closing carrying amount
8,602
8,096 12,747
11,038
64
2
(3)
63
-
(10)
-
-
45
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 13. Non-current assets - investments accounted for using the equity method (continued)
Interest in associates
Name
Principal place of
business/Country of
incorporation
Colour Capital Pty Ltd
Multimedia Technology Pty Ltd
Teaminvest Private Insurance Services Pty Ltd
Australia
Australia
Australia
Ownership interest
30 Jun 2021
%
30 Jun 2020
%
33.30%
30.00%
50.00%
33.30%
30.00%
50.00%
Summarised statement of financial position of the current and previous financial year are set out below
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Colour Capital
Multimedia
Technology
Teaminvest
Private
Insurance
30 Jun
2021
$'000
30 Jun
2020
$'000
30 Jun
2021
$'000
30 Jun
2020
$'000
30 Jun
2021
$'000
30 Jun
2020
$'000
4,417
2,391
3,269
2,276
37,935
3,392
29,520
4,048
211
-
6,808
5,545
41,327
33,568
211
1,610
4
1,827
41
15,754
-
9,954
6,396
137
-
1,614
1,868
15,754
16,350
137
66
4
70
76
-
76
Net assets/(liabilities)
5,194
3,677
25,573
17,218
74
(6)
Summarised statement of profit or loss and other comprehensive income are set out below:
Colour Capital
Multimedia
Technology
Teaminvest
Private
Insurance
30 Jun
2021
$'000
30 Jun
2020
$'000
30 Jun
2021
$'000
30 Jun
2020
$'000
30 Jun
2021
$'000
30 Jun
2020
$'000
Summarised statement of profit or loss and
other comprehensive income
Revenue
Expenses
16,084
(11,976)
11,505
(9,071)
151,025
(142,170)
144,838
(138,354)
Profit/(loss) before income tax
Income tax (expense)/benefit
4,109
(1,091)
2,434
(928)
8,855
(2,656)
6,484
(1,931)
Profit/(loss) after income tax
3,018
1,506
6,199
4,553
Other comprehensive income/(loss)
-
(1)
-
-
Total comprehensive income/(loss)
3,018
1,505
6,199
4,553
105
99
6
(2)
4
-
4
60
(74)
(14)
4
(10)
-
(10)
46
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 14. Non-current assets - property, plant and equipment
Land - at cost
Leasehold improvements
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Motor vehicles - at cost
Less: Accumulated depreciation
30 Jun 2021
$'000
54
30 Jun 2020
$'000
54
673
(138)
535
4,045
(1,026)
3,019
2,596
(586)
2,010
5,618
211
(42)
169
2,458
(402)
2,056
2,250
(329)
1,921
4,200
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 30 June 2019
Additions
Disposals
Reclassifications
Impairment of assets
Depreciation expense
Balance at 30 June 2020
Additions through business combinations
Additions
Disposals
Reclassifications
Impairment of assets
Depreciation expense
Balance at 30 June 2021
Land
$'000
Leasehold
Improvements
$'000
Plant and
Equipment
$'000
Motor
Vehicles
$'000
Total
$'000
159
154
(33)
(45)
-
(66)
169
-
495
(31)
-
-
(98)
535
2,013
803
(14)
(411)
-
(335)
2,056
19
1,432
(16)
-
(2)
(470)
3,019
1,711
174
(14)
456
(32)
(374)
1,921
4
695
(247)
-
(3)
(360)
2,010
3,937
1,131
(61)
-
(32)
(775)
4,200
23
2,622
(294)
-
(5)
(928)
5,618
54
-
-
-
-
-
54
-
-
-
-
-
-
54
47
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 15. Non-current assets - right-of-use assets
Consolidated
Land & Buildings - right-of-use
Accumulated Depreciation
Plant & Equipment -right-of-use
Accumulated Depreciation
Motor Vehicles-right-of-use
Accumulated Depreciation
30 Jun 2021
$'000
30 Jun 2020
$'000
6,445
(2,912)
3,533
93
(35)
58
43
(28)
15
3,606
4,760
(1,054)
3,706
-
-
-
159
(48)
111
3,817
Additions to the right-of-use assets during the period were $1,788,000
The Group leases land and buildings for its offices, warehouses and retail outlets under agreements of between 1 to 5
years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the
leases are renegotiated. The Group also leases plant and equipment under agreements of between 1 to 5 years. The
Group leases office equipment under agreements of less than 1 year. These leases are either short-term or low-value,
so have been expensed as incurred and not capitalised as right-of-use assets.
Note 16. Non-current assets – intangibles
Consolidated
Goodwill at cost
Patents and trademarks - at cost
less: accumulated amortisation
Customer Contracts - at cost
less: accumulated amortisation
Software - at cost
less: accumulated amortisation
Formation costs
less: accumulated amortisation
Other intangibles
30 Jun 2021
$'000
30 Jun 2020
$'000
42,279
42,619
575
(95)
480
3,420
(884)
2,536
638
(159)
479
302
(32)
270
17,000
63,044
543
(1)
542
2,957
(601)
2,356
259
(43)
216
37
-
37
-
45,770
48
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 16. Non-current assets – intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Patents and
Trademarks
$'000
Customer
Relationships
$'000
Software
$'000
Formation
Costs
$'000
Other
Intangibles
$'000
Total
$'000
Consolidated
Goodwill
Balance at 30 June
2019
Additions
Additions through
business
combinations
Amortisation expense
Balance as at 30
June 2020
Additions
Additions through
business
combinations
Impairment
Amortisation expense
Balance at 30 June
2021
$'000
42,619
-
-
-
42,619
-
3,920
(4,260)
-
42,279
Other intangible assets include:
Intangible Asset
Confidential information and know-how
Technology-based intangible asset - website
Content
Regulatory approval
Networks and relationships
Brand
Separately Identified Assets Acquired
78
-
465
2,957
132
-
-
87
-
(1)
(601)
(3)
542
32
-
-
(94)
480
2,356
-
463
(34)
(249)
216
171
158
-
(66)
-
37
-
-
37
265
-
-
(32)
- 45,786
-
-
-
124
465
(605)
- 45,770
-
468
17,000 21,541
-
-
(4,294)
(441)
2,536
479
270
17,000 63,044
Fair value
$’000
5,926
6,702
150
300
2,166
1,756
17,000
49
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 16. Non-current assets – intangibles (continued)
Impairment testing
Goodwill has been allocated to the cash-generating units ('CGUs') as follows:
Consolidated
Goodwill allocated to engineering segment:
Coastal Energy
Icon Metal
Lusty TIP Trailers
Automation Group Investments
Engineering segment
Goodwill allocated to services segment:
East Coast Traffic Controllers
Teaminvest Private Residential Group
Services Segment
30 Jun 2021
$'000
30 Jun 2020
$'000
-
8,595
10,462
3,689
22,746
3,057
16,476
19,533
4,260
8,595
10,462
-
23,317
2,826
16,476
19,302
Coastal Energy has been adversely impacted due to being suspended as a rated provider by Energex Corporation
Limited. However, in light of the adverse effect on the Coastal Energy operations and outlook, the directors have
impaired Coastal Energy’s goodwill of $4,260,000 and carrying value of the customer relationship intangibles of $34,000.
50
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 16. Non-current assets – intangibles (continued)
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:
2021
Revenue
growth rate
%
5.61%
4.56%
7.64%
4.94%
8.13%
-
-
2021
Discount
rate
(pre-tax)
%
10.60%
10.00%
11.00%
2021
Terminal
growth
rate
%
2.75%
2.75%
2.75%
9.90%
10.60%
2.75%
2.75%
-
-
-
-
2020
Revenue
growth
rate
%
10.00%
5.80%
-
9.20%
-
8.00%
5.40%
2020
Discount
rate
(pre-tax)
%
11.05%
9.52%
-
2020
Terminal
growth
rate
%
2.75%
2.75%
-
9.35%
-
10.54%
11.04%
2.75%
-
2.75%
2.75%
Icon Metal
Lusty TIP Trailers
Automation Group Investments
East Coast Traffic Controllers
Teaminvest Private Residential
Group
Kitome
DecoGlaze
The Group performed a restructure of business operations of DecoGlaze and Kitome during the year ended 30 June
2021. The restructure included combining product offerings from Kitome and DecoGlaze into a single contract and a
single management overseeing Teaminvest Private Residential Group Pty Ltd. As a result, impairment testing was
performed treating Teaminvest Private Residential Group Pty Ltd as a single cash generating unit.
Key assumption
Revenue growth rate
Discount rate
Terminal growth rate
Approach used to determine values
Management believes revenue growth is appropriate
based on market conditions and outlook with businesses
being driven by top line results with limited fixed costs,
stable cost of goods sold when considering 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, other than Coastal Energy which has been fully impaired, the recoverable amount of the
remaining CGUs exceed the carrying amount and therefore, goodwill is not considered to be further impaired.
51
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 16. Non-current assets – intangibles (continued)
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:
Icon Metal
Lusty TIP Trailers
Automation Group Investments
East Coast Traffic Controllers
Teaminvest Private Residential Group
Kitome
DecoGlaze
2021
Revenue
growth rate
decrease by
%
23.89%
18.86%
22.77%
31.60%
18.27%
-
-
2021
Discount rate
increases by
%
10.88%
20.81%
19.18%
20.29%
17.39%
-
-
2020
Revenue
growth rate
decrease by
%
18.57%
14.65%
-
20.75%
-
4.80%
3.87%
2020
Discount rate
increases by
%
12.32%
15.02%
-
23.72%
-
3.12%
3.77%
52
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 17. Current liabilities - trade and other payables
Consolidated
Trade payables
Accrued expenses
BAS payable
Other payables
Refer to note 27 for further information on financial instruments.
Note 18. Current liabilities – contract liabilities
Consolidated
Contract Liabilities
Opening balance
Payments received in advance
Additions through business combinations
Transfer to revenue - from additions through business combinations
Transfer to revenue - from advance payments received during the period
Closing balance
30 Jun 2021
$'000
30 Jun 2020
$'000
7,009
4,682
981
1,108
13,780
6,138
6,848
966
1,807
15,759
30 Jun 2021
$'000
30 Jun 2020
$'000
4,877
3,117
3,117
11,012
1,919
-
(11,171)
4,877
1,489
15,415
14
(5)
(13,796)
3,117
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 $4,877,000 as at 30 June 2021 ($3,117,000 as at 30 June 2020) and is expected to be
recognised as revenue in future periods as follows:
30 Jun 2021
$'000
30 Jun 2020
$'000
2,564
2,313
4,877
2,911
206
3,117
30 Jun 2021
$'000
30 Jun 2020
$'000
315
422
(35)
621
1,323
-
379
-
-
379
Consolidated
Within 6 months
6 to 12 months
Total
Note 19. Current liabilities – borrowings
Consolidated
Bank overdraft
Bank loans
Invoice discounting
Payable to other parties
Refer to note 27 for further information on financial instruments.
Invoice discounting is secured by the trade receivables.
53
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 20. Current liabilities - lease liabilities
Consolidated
Lease liability
Lease liability (under AASB 16)
Refer to note 27 for further information on financial instruments.
Note 21. Current liabilities - employee benefits
Consolidated
Annual leave
Long service leave
Note 22. Financing facilities
30 Jun 2021
$'000
495
1,502
1,997
30 Jun 2020
$'000
680
1,296
1,976
30 Jun 2021
$'000
1,693
475
2,168
30 Jun 2020
$'000
1,428
362
1,790
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
Total facilities
Bank overdraft
Bank loan
Invoice discounting
Used at the reporting date
Bank overdraft
Bank loan
Invoice discounting
Unused at the reporting date
Bank overdraft
Bank loan
Invoice discounting
30 Jun 2021
$'000
30 Jun 2020
$'000
2,150
2,154
500
4,804
315
422
(35)
702
1,835
1,732
535
4,102
4,400
700
800
5,900
-
379
-
379
4,400
321
800
5,521
54
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 23. Non-current liabilities - lease liabilities
Consolidated
Lease liability
Lease liability (under AASB 16)
Note 24. Non-current liabilities - employee benefits
Consolidated
Long service leave
Note 25. Equity - issued capital
30 Jun 2021
$'000
30 Jun 2020
$'000
372
2,322
2,694
461
2,735
3,196
30 Jun 2021
$'000
30 Jun 2020
$'000
377
293
30 Jun
2021
Shares
30 Jun
2020
Shares
30 Jun
2021
$'000
30 Jun
2020
$'000
Ordinary shares - fully paid
130,499,310 111,230,952
87,597
75,386
Movements in ordinary share capital
Details
Date
Shares
Balance
Issue of ordinary shares for settlement of share based
payments
Issue of ordinary shares related to business combinations
Issue of ordinary shares for directors' fees'
Issue of ordinary shares for bonuses
Issue of ordinary shares related to business combinations
Balance
01-Jul-20 111,230,952
2,080,181
04-Sep-20
17-Sep-20
04-Dec-20
29-Dec-20
30-Jun-21
4,001,708
107,416
388,072
12,690,981
30-Jun-21 130,499,310
Issue
Price
0.5288
0.6644
0.5288
0.7344
0.6390
$'000
75,386
1,100
2,659
57
285
8,110
87,597
Ordinary Shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should the Company be wound up, in proportions that consider both the number of shares held and the extent to which
those shares are paid up. The fully paid ordinary shares have no par value and the Company does not have a limited
amount authorized capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group’s objectives when managing capital 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.
55
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 25 – Equity issued capital (continued)
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group is actively looking for accretive
acquisitions to grow in alignment with the Group’s investment mandate.
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 year.
Note 26. Equity – dividends
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Consolidated
30 Jun 2021
$'000
30 Jun 2020
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
2,339
1,454
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting
date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
56
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 27. 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') in conjunction with the Risk and Compliance
committee ('RCC'). 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 its long-term borrowings. Borrowings obtained at variable rates expose
the Group to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
As at the reporting date, the Group had the following variable rate borrowings outstanding:
Consolidated
30 June 2021
Weighted average
interest rate
%
Balance
$'000
Bank overdraft and bank loans
4.23%
702
702
30 June 2020
Weighted average
interest rate
%
5.95%
Balance
$'000
379
379
An analysis by remaining contractual maturities in shown in 'liquidity risk' below.
For the Group, the bank overdraft and loans outstanding, totalling $702,000 (2020: $379,000), are principal and interest
payment loans. An official increase/decrease in interest rates of 100 (2020: 100) basis points would have an
adverse/favourable effect on profit before tax of $7,020 (2020: $3,790) per annum. The percentage change is based on
the expected volatility of interest rates using market data and analysts' forecasts.
57
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 27 – Financial instruments (continued)
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 loan
Invoice discounting
30 Jun 2021
$'000
1,835
1,732
535
4,102
30 Jun 2020
$'000
4,400
321
800
5,521
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.
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.
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
58
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 27 – Financial instruments (continued)
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
-
-
2.95%
5.95%
4.21%
4.00%
6.65%
4.50%
7,009
6,771
422
315
(35)
621
495
1,502
-
-
-
-
-
-
-
-
-
-
164
1,090
208
1,232
17,100
1,254
1,440
-
-
-
-
-
-
-
-
7,009
6,771
422
315
(35)
621
867
3,824
19,794
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
-
-
5.45%
-
7.20%
5.00%
5.00%
6,138
1,807
379
-
-
680
1,296
-
-
-
-
-
-
6,138
1,807
-
-
-
354
1,305
-
-
-
107
1,271
-
-
-
-
159
379
-
-
1,141
4,031
10,300
1,659
1,378
159
13,496
Consolidated - 30
Jun 2021
Non-derivatives
Non-interest
bearing
Trade payables
Other payables
Interest-bearing -
variable
Bank loans
Bank overdraft
Invoice discounting
Other loans
Lease liability
Lease liability
(AASB 16)
Total non-
derivatives
Consolidated - 30
Jun 2020
Non-derivatives
Non-interest
bearing
Trade payables
Other payables
Interest-bearing -
variable
Bank loans
Bank overdraft
Invoice discounting
Lease liability
Lease liability
(AASB 16)
Total non-
derivatives
Note 28. 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.
59
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 29. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by KPMG, the auditor of the
Company:
Audit Services - KPMG
Audit or review of financial statements
Other services - KPMG
Tax compliance services
Non-Audit Services - Software license charges
30 Jun 2021
$
30 Jun 2020
$
181,000
153,675
25,000
-
25,000
-
58,759
58,759
206,000
212,434
Note 30. Contingent liabilities
The Group has given bank guarantees $1,368,643 as at 30 June 2021 (2020: $498,000).
Contingent liability for unsettled claims against the Group is $nil as at 30 June 2021 (2020: $nil).
Note 31. Commitments
Consolidated
Lease commitments - operating
Within one year
Total
Lease commitments - finance (repayments)
Within one year
One to five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
30 Jun 2021
$'000
30 Jun 2020
$'000
68
68
269
679
948
(81)
867
31
31
727
488
1,215
(74)
1,141
60
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 31 – Commitments (continued)
Operating lease commitments represent short term and low value leases only.
Finance lease commitments includes contracted amounts for various plant and equipment with a written down value of
$867,000 as of 30 June 2021 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.
With the application of AASB 16, these are now recognised as right-of-use assets with corresponding current and non-
current lease liabilities (see note 15, note 20 and note 23).
Note 32. Related party transactions
Parent entity
Teaminvest Private Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 35.
Associates
Interests in associates are set out in note 13.
Key management personnel
Disclosures relating to key management personnel are set out in note 33 and the remuneration report included in the
directors' report.
Transactions with related parties
There were no transactions with related parties during the current year (30 June 2020: 13,218).
Receivable from and payable to related parties
Consolidated
Current receivables:
Receivables from other related parties
Note 33. Key management personnel disclosures
30 Jun 2021
$
30 Jun 2020
$
-
13,218
Compensation
The aggregate compensation paid to directors and other members of key management personnel of the Group is set
out below:
Consolidated
Short-term employee benefits
Post employment benefits
Long-term benefits
Share based payments
Long-term incentives - settled
Long-term incentives - unsettled
30 Jun 2021
$
30 Jun 2020
$
768,038
73,571
3,333
337,268
-
-
1,182,210
665,369
71,974
3,333
143,758
-
1,100,000
1,984,434
61
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 34. Business Combinations
Acquisition of Automation Group Investments Pty Ltd
On 17 September 2020, the Group acquired 100% of the shares in Automation Group Investments Pty Ltd for the non-
cash purchase price of $2,660,000 through the issue of Company shares and a contingent consideration of $400,000,
based on a percentage of revenue generated under a key contract for financial year 2021 payable after completion of
the 2021 financial year. This operates in the Engineering segment of the Group. The acquired business contributed
revenues of $4,213,761 and profit after tax of $290,022 to the Group for the period from 18 September 2020 to 30 June
2021. If the acquisition occurred on 1 July 2020, the full-year contributions would have been revenues of $5,360,271
and income after tax of $388,776. The values identified in relation to the acquisition are finalised as at 30 September
2020.
Acquisition of Teaminvest Pty Ltd
On 30 June 2021, the Group acquired 100% of the shares in Teaminvest Pty Ltd and related entities for the non-cash
purchase price of $8,110,000 through the issue of Company shares. This business operates in the Services segment
of the Group. The acquired business contributed revenues of $10,650 and profit after tax of $1,653 to the Group for the
period on 30 June 2021. If the acquisition occurred on 1 July 2020, the full-year contributions would have been revenues
of $3,890,496 and profit after tax of $1,375,000. The values identified in relation to the acquisition are finalised as at 30
June 2021.
The transaction was completed in two steps:
1.
2.
the acquisition of Teaminvest Pty Ltd; and
the “pass-through” of 12.6 million shares owned by Teaminvest Pty Ltd. to the vendors, via a selective buy-
back, cancellation and issuance of new shares.
Both steps were approved at the EGM on 29 June 2021.
Automation
Group
Fair value
$'000
Teaminvest
Pty Ltd
Fair value
$'000
39
613
745
51
23
30
463
3
-
(587)
(116)
(220)
(1,531)
(31)
(30)
(81)
(629)
3,689
3,060
2,660
400
3,060
1,149
95
-
472
-
-
-
17,155
101
(178)
(1,803)
(49)
-
-
(5,098)
-
11,844
(3,734)
8,110
8,110
-
8,110
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
Plant and equipment
Right-of-use assets
Customer contracts
Other intangibles*
Other financial assets
Trade payables and other payables
Contract liabilities
Employee benefits
Borrowings
Lease liability
Deferred tax liability
Other liabilities
Net (liabilities)/assets acquired
Goodwill/(gain on bargain purchase)
Acquisition-date fair value of the total consideration transferred
Representing:
Teaminvest Private Group Limited shares issued to vendor
Deferred consideration
62
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 34 – Business Combinations (continued)
*The income approach / excess earning method was used to determine the fair value of Teaminvest Pty Ltd’s intangible
assets. Within the income method, it used the discounted cash flow (DCF), the Relief-from-Royalty and the with-or-
without (based on DCF) methods. The asset-based approach (replication method) was utilised as a secondary cross-
check for technology-based intangible asset.
External valuer was engaged to assist with the valuation of Teaminvest Pty Ltd. The value in use was determined by
discounting the future cash flows to be generated from the Teaminvest Pty Ltd and is based on the following key
assumptions:
• Average net annual membership growth of 5.12% was used for revenue projections. This growth was referenced
against the average annual historical growth rates over the past 5 years;
• Average churn rate of 15% was used as part the revenue projection forecast. This rate was referenced against
the average annual historical churn rates over the past 5 years;
• Long term growth rate of 2.50% was used in reference to the average growth forecast of the industry;
• A pre-tax discount rate of 12% based on the weighted average cost of capital.
Note 35. 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
Teaminvest Private Pty Ltd
Coastal Energy Pty Ltd
DecoGlaze Holdings Pty Ltd and its controlled entities:
-DecoGlaze Franchising Pty Ltd
-DecoGlaze Intellectual Property Pty Ltd
-DecoGlaze Pty Limited
-DecoGlaze Surface Cleaner Pty Ltd
-DecoGlaze Surface Cleaner Unit Trust
East Coast Traffic Controllers Pty Ltd
Icon Metal Pty Ltd
Kitome Pty Ltd
Lusty TIP Trailers Pty Ltd
Boutique Portraits Pty Ltd
The Step Ahead Builder’s Assistant Pty Ltd
Valuestream Investment Management Limited
Teaminvest Private Residential Group Pty Ltd
Automation Group Investments Pty Ltd
Automation Group Limited
Radtel Engineering Pty Ltd
Teaminvest Pty Ltd
Conscious Investor Pty Ltd
Teaminvest Limited (NZ)
Teaminvest Australia Pty Ltd
Principal place of
business
Country of incorporation
Ownership interest
30 Jun
2021
%
30 Jun
2020
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
New Zealand
Australia
100%
100%
-
-
-
-
-
100%
100%
-
100%
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
Teaminvest Private Residential Group Pty Ltd is aggregation of DecoGlaze Holdings Pty Ltd (previously under
Engineering segment), Kitome Pty Ltd, Boutique Portraits Pty Ltd, and The Step Ahead Builder’s Assistant Pty Ltd.
63
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 36. Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities
Consolidated
Profit after income tax expense
Adjustments for:
Depreciation, amortisation and impairment
Share based payments
Dividends received - associates
Net gain on disposal of PPE
Share of profit - associates
Gain on bargain purchase
Change in operating assets and liabilities:
Change in trade and other receivables
Change in contract assets
Change in inventories
Change in deferred tax assets
Change in prepayments
Change in other operating assets
Change in trade and other payables
Change in contract liabilities
Change in provision for income tax
Change in deferred tax liabilities
Change in employee benefits
Change in other provisions
Working capital adjustments from business combinations
30 Jun 2021
$'000
5,201
30 Jun 2020
$'000
8,306
7,129
285
653
(95)
(2,867)
(3,734)
(562)
984
(1,767)
-
(710)
-
(1,979)
1,760
189
862
462
(55)
(360)
2,514
155
233
-
(1,858)
(594)
(641)
(3,334)
408
995
(107)
(41)
4,007
1,628
(1,070)
6
(156)
(414)
-
Net cash from operating activities
5,396
10,037
64
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 37. Earnings per share
Profit after income tax attributable to the owners of Teaminvest Private Group
Limited
Weighted average number of ordinary shares used in calculating basic earnings per
share
Adjustments for calculation of diluted earnings per share:
Shares issued for bonuses and fees
30 Jun 2021
$'000
5,201
30 Jun 2020
$'000
8,306
Number
116,701,908
Number
111,230,952
652,892
2,188,475
Weighted average number of ordinary shares used in calculating diluted earnings
per share
117,354,800
113,419,427
Basic earnings per share
Diluted earnings per share
Note 38. Share-based payments
Cents
4.46
4.43
Cents
7.47
7.32
Details of shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021 and 30 June 2020 are set out below:
30 June 2021
Shares issued to KMP
Shares issued to directors
30 June 2020
Shares issued to directors*
Issue Date
Number of Shares
Issue
Price
Total Value
04/09/2020
04/12/2020
2,080,181
107,416
$0.53
$0.53
1,100,000
56,803
27/11/2019
184,259
$0.84
154,999
65
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 39. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Total comprehensive profit/(loss)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued Capital
Accumulated losses
Total Equity
30 Jun 2021
$'000
30 Jun 2020
$'000
(6,444)
(6,444)
(2,475)
(2,475)
30 Jun 2021
$'000
30 Jun 2020
$'000
5,354
77,895
463
894
87,597
(10,596)
77,001
3,288
74,891
3,529
3,657
75,386
(4,152)
71,234
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had guarantees of $1,368,643 in relation to the debts of its subsidiaries as at 30 June 2021
($498,000 as at 30 June 2020).
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June
2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for
the following:
•
Investments in subsidiaries are accounted for at cost, or fair value should a bargain purchase be acquired 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.
66
Teaminvest Private Group Limited
Notes to the financial statements
For the year ended 30 June 2021
Note 40. Events after the balance date
The impact of the COVID-19 pandemic is ongoing and whilst individual subsidiaries have been impacted differently, the
net effect on the Group's results remain within a reasonable bound compared to 30 June 2021, it is not practicable to
estimate the potential impact, positive or negative, after the reporting date as the situation attributed to COVID-19 and
its Delta variant is evolving and is dependent on measures imposed by the State Governments, Australian Government
and other countries, such as lockdowns, quarantine, travel restrictions and any economic stimulus that may be provided.
67
Teaminvest Private Group Limited
Directors’ declaration
For the year ended 30 June 2021
In the directors' opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30
June 2021 and of its performance for the financial year ended on that date; 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
26 August 2021
Sydney
68
To the shareholders 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).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
giving a true and fair view of the Groups
financial position as at 30 June 2021 and of
its financial performance for the year ended
on that date; and
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
The Financial Report comprises:
Statement of financial position as at 30 June
2021
Statement of profit or loss and other
comprehensive income, Statement of changes in
equity, and Statement of cash flows for the year
then ended
Notes including a summary of significant
accounting policies
Directors' Declaration.
The Group consists of the Company and the entities
it controlled at the year-end or from time to time
during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditors responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Boards APES 110 Code of Ethics for
Professional Accountants (including the Independence Standards) (the Code) that are relevant to our audit
of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with
the Code.
© 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks
used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
69
Key Audit Matters
The Key Audit Matters we identified
are:
Revenue recognition
Carrying value of intangibles
Business combinations
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.
Revenue recognition
Refer to note 5 of the Financial Report ($91.4m)
The key audit matter
How the matter was addressed in our audit
Recognition of revenue is a key audit matter
due to:
The significance of revenue to the Financial
Report; and
The Group has entered a large number of
contracts across its different businesses,
operating in multiple industries, with a wide
range of customers. These contracts may
have numerous performance measurement
events which occur over the course of the
contracts life. This may also result in
judgmental revenue recognition from
rendering of services contracts and
therefore significant audit effort is required
to gather sufficient audit evidence.
Our procedures included:
We obtained an understanding of the Groups
process of recognising revenue for rendering of
services and sale of goods;
We evaluated the appropriateness of the Groups
revenue recognition policies against the
requirements of AASB 15 Revenue from
contracts with customers;
We selected a sample of contracts for testing,
across businesses, industries and customer
types, focusing on key revenue streams where
revenue is recognised over time. For each
contract selected, we read the contract terms
and conditions to evaluate the individual
characteristics of each contract for consistency
with the Groups method of measuring
performance and revenue to date;
We used statistical sampling to select a sample
of transactions recognising revenue through
rendering of services and examined either
progress claim certificates or managements
assessment of progress against project plans.
We obtained signed contracts and checked the
performance milestones against the value of
service revenue recognised.
We used statistical sampling to select a sample
of sale of goods transactions and examined
delivery dockets and sales invoices;
70
We selected a sample of revenue transactions
from rendering of services immediately before
and immediately after year end. We examined
the underlying contract, project plan and other
supporting documentation and compared this to
the timing of the revenue recognised;
We selected a sample of revenue transactions
from sale of goods immediately before and
immediately after year end. We examined the
supporting documentation including date of
delivery and compared this to the timing of the
revenue recognised.
Carrying value of intangibles
Refer to note 16 of the Financial Report ($63.1m)
The key audit matter
How the matter was addressed in our audit
A key audit matter was the Groups annual
testing of intangibles for impairment, given
the size of the balance (being 46% of total
assets) and the impairment charge recorded
in respect of the Coastal Energy business of
$4.3m. We focused on the significant
forward-looking assumptions the Group
applied in its value in use models, including:
forecast cash flows and growth rates
(including terminal growth rates) applied
to the forecasts in light of market
conditions in the current year and the
impacts of COVID-19. These conditions
increase the both the possibility of
goodwill being impaired, as well as the
risk of inaccurate forecasts or a wider
range of outcomes. We focused on the
Groups business model when assessing
the feasibility of the Groups forecast
cashflows.
discount rates, as they can be complex in
nature and vary according to the
conditions and environment in which the
Cash Generating Unit (CGUs) operate.
The Group operates in various industries
Working with our valuation specialists, our
procedures included:
We considered the appropriateness of the
value-in-use method applied by the Group to
perform its annual impairment testing of
intangibles against the requirements of the
relevant accounting standards.
We assessed the integrity of the value in use
models used, including the accuracy of the
underlying calculation formulas.
We inquired with management to understand
the impact of COVID-19 to the Group, the
impact to the FY21 results, and implications
for forecasting.
We compared the forecast cash flows and
capital expenditure contained in the value in
use models to Board approved 2022 forecasts.
For subsequent years, we have compared
growth rates applied to historical results and
managements plans for the business.
We challenged the Groups forecast cash flow
and growth assumptions in light of market
conditions. We assessed key assumptions
such as what the Group considers as its future
71
business model. We used our knowledge of
the Group, business and customers, and our
industry experience. We sourced authoritative
and credible inputs from our specialists.
We assessed the Groups underlying
methodology and documentation for the
allocation of corporate costs to the forecast
cash flows in the value in use model, for
consistency with our understanding of the
business and the criteria in the accounting
standards.
We assessed the Groups determination of its
CGUs based on our understanding of the
operations of the Groups business, including
how independent cash inflows are generated,
against the requirements of the accounting
standards.
We considered the sensitivity of the models
by varying key assumptions, such as the
Groups forecast growth rates, terminal
growth rates and discount rates, within a
reasonably possible range. We considered the
interdependencies of key assumptions when
performing the sensitivity analysis and what
the Group consider to be reasonably possible.
We did this to identify those CGUs at higher
risk of impairment and to focus our further
procedures.
We assessed the disclosures in the financial
report using our understanding obtained from
our testing against the requirements of the
accounting standards.
and is therefore subject to different
discount rates for each CGU. This drives
additional audit effort in challenging the
assumptions used by the Group in
determining the discount rate for each
CGU. We involved our valuations
specialist with the assessment.
the models sensitivity to assumptions
adopted by the Group, including forecast
growth rates and terminal growth rates
applied to each identified CGU. Such
assumptions have a significant impact on
the recoverable amount of the assets
within the identified CGUs. This drives
additional audit effort specific to their
feasibility and consistency of application
to the Groups strategy.
In addition to the above:
The Group has a large number of
operating businesses necessitating our
consideration of the Groups
determination of CGUs, based on the
smallest group of assets to generate
largely independent cash inflows.
The Group uses complex models to
perform its annual impairment testing of
goodwill. The models are largely manually
prepared and use a range of internal and
external sources as inputs to the
assumptions. Complex modelling,
particularly those containing highly
judgemental forward-looking assumptions
tend to be prone to greater risk of
potential bias, error and inconsistent
application. Such conditions necessitate
additional scrutiny by us, in particular to
address the objectivity of sources used to
derive assumptions, and their consistent
application.
72
Business combinations
Refer to note 34 of the Financial Report
The key audit matter
How the matter was addressed in our audit
During the year, the Group acquired two
businesses, Automation Group Investments Pty
Limited and its controlled entities and
Teaminvest Pty Ltd and related entities.
Accounting for the acquisition of a business can
be complex and accounting standards require
the Group to identify all assets and liabilities of
the newly acquired businesses and estimate
the fair value of each item.
We determined that the acquisitions were a key
audit matter because of the size of the
transactions and the high level of judgment
used by the Group in determining:
consideration payable for the acquisition
including the fair value of the contingent
consideration;
the identification of acquired intangible
assets;
the assumptions and estimates used when
performing intangible assets valuations,
including estimated future cash flows,
growth rates and discount rates;
in respect of the Teaminvest Pty Ltd
acquisition a bargain purchase gain of
$3.8m; and
appropriate disclosure in the financial
statements.
Management used external experts to assist
with the identification and valuation of the
intangible assets acquired.
Our procedures included:
We obtained an understanding of the
acquisitions during the year through reading the
transaction documents related to the acquisitions
to understand the structure, key terms and
conditions;
We considered the appropriateness of the
business combination performed by the Group
against the requirements of AASB 3 Business
Combinations;
We worked with our valuation specialists to
assess and challenge key assumptions used in
the Groups external valuation of acquired
intangible assets by:
o
o
o
assessing the scope, objectivity and
competency of the independent valuer
engaged by the Group;
comparing key assumptions, such as growth
rates, membership and customer churn,
discount rates and costs assumptions, used
by the Groups independent valuer against
historical performance and external
evidence; and
challenging the Groups independent
valuers approach and methodology to
valuing their assets by comparing to the
requirements of the accounting standards.
We considered the sensitivity of the external
valuation by varying key assumptions, such as
the Groups forecast growth rates, membership
and customer churn rates, discount rates and
costs assumptions, within a reasonably possible
range. We considered the interdependencies of
key assumptions when performing the sensitivity
analysis and what the Group consider to be
reasonably possible;
We audited the opening balance sheet of the
businesses acquired as at acquisition dates; and
73
We assessed the disclosures in the financial
report using our understanding obtained from our
testing and against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in Teaminvest Private Group Limiteds annual
reporting which is provided in addition to the Financial Report and the Auditors Report. The Directors are
responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditors Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001:
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error: and
assessing the Group and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
74
Auditors responsibilities for the audit of the Financial Report
Our objective is:
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditors Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditors Report.
Report on the Remuneration Report
Opinion
Directors responsibilities
In our opinion, the Remuneration
Report of Teaminvest Private Group
Limited for the year ended 30 June
2021, complies with Section 300A of
the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 7
to 15 of the Directors report for the year ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
PM_INI_01
KPM
_INI_01
KPMG
Tony Nimac
Partner
Sydney
26 August 2021
75
Teaminvest Private Group Limited
Shareholder information
The shareholder information set out below was applicable as at 20 August 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Number
of holders
of ordinary
shares
Number
of ordinary
shares
Percentage
43
123
87
271
151
27,940
378,031
748,982
12,325,347
117,019,010
0.02%
0.30%
0.57%
9.44%
89.67%
675
130,499,310
100%
Holding less than a marketable parcel
23
9,343
Equity security holders
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
shares
issued
Number held
14,680,285
7,555,345
6,624,644
5,625,448
4,363,049
3,361,599
3,361,599
2,821,615
2,696,117
2,671,709
2,612,010
1,642,443
1,633,395
1,615,900
1,504,862
1,491,923
1,485,067
1,421,541
1,380,628
1,318,546
11.25
5.79
5.08
4.31
3.34
2.58
2.58
2.16
2.07
2.05
2.00
1.26
1.25
1.24
1.15
1.14
1.14
1.09
1.06
1.01
69,867,725
53.54
ELECTRONIC MARKETING PTY LTD (COLFAM A/C)
V MARK PTY LTD (MORELAND PROPERTY A/C)
MR ANDREW COLEMAN
ONE FUNDS MANAGEMENT LIMITED (TDGF A/C)
CROOKS PTY LTD
CS THIRD NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 13 A/C)
PLUTO MINING PTY LTD
PRICE VALUE PTY LIMITED (PRICE VALUE A/C)
KITOME PASTORAL PTY LIMITED
PRIBULA FAMILY PTY LTD (PRIBULA FAMILY A/C)
REGAN GEORGE PASSLOW
BNP PARIBAS NOMINEES PTY LTD (IB AU NOMS RETAILCLIENT DRP)
LE GRAND PTY LTD
DECOGLAZE AUSTRALIA PTY LTD
BAXTERO PTY LIMITED (CARMICHAEL SUPERFUND A/C)
MALONGA PTY LTD (THE G DOOLAN FAMILY A/C)
MR MALCOLM OLIVER THOMPSON + MS ELIZABETH THOMPSON
MR MALCOLM MURRAY JONES + MRS LYNNETTE ANNE JONES (RELM A/C)
ROBERT BREIT
PENMARK SUPER PTY LTD (PENMARK SUPER FUND A/C)
Equity securities
Ordinary securities (quoted): 130,499,310
Performance rights (unquoted): Nil
76
Teaminvest Private Group Limited
Shareholder information
Substantial holders
Substantial holders in the Company are set out below:
Mark Moreland
Graham Lusty
Howard Harry Coleman
Andrew Joseph Coleman
Securities subject to escrow
Ordinary shares
Number held
9,229,868
6,733,198
17,173,795
12,250,092
% of total
shares
issued
7.07
5.15
13.16
9.39
Type of escrow
Escrow period
Number of shares
Nil
Nil
Nil
Voting rights
The voting rights attached to equity securities are set out below:
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.
Performance rights
Performance rights do not have voting rights.
77