TIL Logistics Group 2019 Annual Report
ANNUAL REPORT 2019
FOR THE YEAR ENDED
30 JUNE 2019
23TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
On behalf of Board and Management, we are pleased to
present the TIL Logistics Group Limited Annual Report
for the year ended 30 June 2019.
Trevor D Janes Alan Pearson
Chairman Chief Executive Officer
24 September 2019
OUR BUSINESS 4
FY19 SNAPSHOT 7
CHAIRMAN & CEO’S REPORT 8
DIVISIONAL PERFORMANCE 16
OUR BOARD 20
LEADERSHIP 22
FINANCIAL STATEMENTS 24
NOTES TO THE FINANCIAL STATEMENTS 30
INDEPENDENT AUDITORS REPORT 66
ADDITIONAL STATUTORY INFORMATION 71
CORPORATE GOVERNANCE 79
GLOSSARY 84
DIRECTORY 85
OUR PEOPLE
Nelson’s Operational Projects Manager,
Grant Thorn, has worked for TIL since 1978,
more than 40 years. ¢
45TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
OUR BUSINESS
T
IL Logistics Group is one
of the largest freight and
logistics companies in
New Zealand. We have a
nationwide network of branches,
depots, cross docks and warehouses
and a dedicated team of more than
1,600 employees and contractors.
We provide a comprehensive end to end supply chain
service, across Freighting, Bulk Liquids, Warehousing
& Logistics, Specialist Lifting and Transport, and
International Freight Forwarding.
Every year, our trucks travel more than 50 million
kilometres, delivering product to over 30,000 sites and
we store goods for our customers in more than 192,000
square metres of warehouse capacity.
We are investing in technology and IT that is making our
business more efficient, further enhancing our customer
experience and strengthening the safety of our people
and the wider community.
We remain committed to reducing our environmental
impact and are a signatory to the Climate Leaders
Coalition.
Our goal is to run our company in a way that offers
value, not just to our customers but to our staff, our
investors and all those involved in the supply chain. ¢
AUCKLAND
NELSON
HAMILTON
HAWERA
WANGANUI
OTAKI
PALMERSTON NORTH
NEW PLYMOUTH
WHANGAREI
GISBORNE
MT MAUNGANUI
TAURANGA
NAPIER
HASTINGS
FREIGHT
WAREHOUSING
INTERNATIONAL
BULK LIQUIDS
SPECIALIST
BLENHEIM
MASTERTON
WELLINGTON
RAI VALLEY
CHRISTCHURCH
DUNEDIN
TIMARU
INVERCARGILL
TAKAKA
WESTPORT
OUR BUSINESSOUR BUSINESS
67TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
FY19 SNAPSHOT
KEY EVENTS
¡ Acquisition of Specialised Lifting
and Transport Group (SLTG),
strengthening existing offer
and providing entry into a new
sector. Provided an eight-month
contribution to the Group and
delivered a performance ahead of
expectations.
¡ Significant investment in
expansion and development of
new warehousing facilities to meet
future demand. Completion and
relocations of three facilities with
additional two facilities due to open
in FY20.
¡ Organisational restructure into
five operating divisions, including
separation of NZL into freighting
and logistics services.
¡ Bundled transport and logistics offer
is starting to show dividends and
market share is growing, with new
customers and increasing demand
from existing customers.
¡ Number of major customer wins,
with results reflecting initial start-
up expenses for major Bulk Liquids
haulage contracts.
¡ Establishment of Senior Leadership
Team with Divisional CEOs, creation
of new CIO, Group HR and Group
Safety roles and appointment of Lee
Banks as Chief Financial Officer.
¡ Signatory to Climate Leaders
Coalition and signing of
Memorandum of Understanding
with Hiringa Energy to investigate
hydrogen fuel cell technology
transport solutions.
FY19 was a period of business growth and
increasing sales across all divisions, with
results reflecting investment into growth
initiatives and a higher cost base.
SALES REVENUE
$355.1M
Sales revenue continues to
trend upwards, with uplift in
all sectors
EBITDA
$25.4M
ADJUSTED EBITDA
$28.0M
Adjusted EBITDA up 7%
on the prior year, despite
increased cost base and
investment into growth
initiatives
N PAT
$4.0M
ADJUSTED NPAT
$6.6M
First half in line with
expectations with 2H19
earnings gains offset by
increased costs and $2.6m of
additional expenses related
to deferred acquisition
consideration
FY19 DIVIDEND
5.0 CENTS PER
SHARE
Full year fully imputed
dividend increased to 5.0
cents per share
TECHNOLOGY
Technology is a big enabler for the company,
from Warehouse and Transport Management
Systems to in-cab technology, safety apps and
supply chain solutions. ¢
FY19 SNAPSHOT
89TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
I
t has been more than 150 years
since the first delivery was made
by Hookers’ oxen and dray in
1869. While our delivery modes
may have advanced, our DNA is still
to serve and to do so to the best of
our ability. We have achieved a lot
over the past years and we will no
doubt achieve a lot more over the
next century.
Technology has significantly changed during this time
and TIL has always been at the forefront of adopting
commercially viable technology in order to fulfill our
service promise to our customers. 2019 was no different
with the company investing in significant IT initiatives
such as commissioning a new Transport Management
System (TMS), tablet in-cab technologies, safety
technology such as Autosense, as well as extending the
coverage of our Warehouse Management system across
our new warehouses. Truck technology is undergoing
significant evolution with the introduction of Electric
vehicles and we are one of the leading participants
in the eventual introduction of Hydrogen fuel cell
technology into New Zealand.
Today we serve our customers with an end to end
supply chain offering a range of services and utilising
modern technologies. Our goal is to run our company
in a way that offers value, not just to our customers but
to our staff and all those involved in the supply chain.
With increasing regulatory requirements, the use of
digital technology, rising fuel prices, wage pressures
and growing demand from customers for an integrated
freighting, logistics and warehousing service, only
those businesses that have best practice as their goal,
significant scale and access to capital will succeed.
TIL is well positioned to grow both organically and
through carefully selected acquisitions. Opportunities
have been identified across all sectors to build our
business, improve volumes and utilisation, expand the
offer and drive efficiencies.
As we have done for over 100 years, we run our
business with the long term in mind and will continue to
leverage our strengths to gain market share and deliver
value to our shareholders.
FY19 WAS A YEAR OF BUSINESS EXPANSION
WITH INCREASED CAPACITY, ACQUISITIONS,
NEW BUSINESS WINS AND ORGANIC GROWTH.
Highlights for the FY19 year included the acquisition of
Specialised Lifting and Transport Group , the renewal
of two major customer contracts with Z Energy and
Farmlands and the opening of three new warehouses in
the second half of the year.
Our commitment to reducing our environmental
impact continues and we are a signatory to the Climate
Leaders Coalition and have signed a memorandum of
understanding with Hiringa Energy to develop hydrogen
fuel cell technology transport solutions.
The higher operating cost environment has persisted
and is being managed closely, including fluctuating
fuel prices, road user charges and regional fuel taxes,
increased wage costs and higher costs for parts and
equipment due to the lower exchange rate. Unexpected
demurrage costs were also incurred in 2H19.
To better reflect TIL’s business operations, segment
reporting has been changed to five divisions –
Freighting; Warehousing & Logistics; Bulk Liquids;
Specialist; and International.
A significant focus for management in FY19 was
the continuing amalgamation of TIL’s brands and
businesses into a cohesive group organisation, which
allows us to offer our customers an end to end supply
chain offer. The NZL business, which was previously
part of the warehousing division, has now been split
into two streams – Freighting and Warehousing. This
restructuring had a cost impact in FY19, but benefits will
be seen in FY20 and onwards.
We saw strong growth in the first half of the year,
with revenue gains across all divisions and particularly
strong growth from Warehousing & Logistics as new
warehousing capacity came online in the second half
of the year. The specialist sector grew significantly
following the acquisition of Specialised Lifting and
Transport Group, which delivered additional revenue of
$11.8m.
Pleasingly, the Bulk Liquids division also delivered a
year on year increase in sales revenue despite a strong
prior year that included one off revenue gains from
the pipeline disruption. Multiple long term fuel delivery
contracts were secured in FY19, underpinning the
business going forward.
Operating costs increased to $332.6m, reflecting the
higher cost environment and a full year of being a listed
provider with associated corporate and governance
costs. Growth initiatives have also had a cost impact,
with increased property rent costs (particularly due to
expanded warehousing capacity); wages and fleet lease
costs; establishment of the Senior Leadership Team;
and higher repairs and maintenance due to new fleet
decisions being delayed into FY19 while new contracts
were finalised and tightening legislation.
Earnings Before Interest, Tax, Depreciation and
Amortisation (EBITDA) was up on the prior year to
$25.4m with an increase in adjusted EBITDA to $28.0m.
Earnings growth was primarily seen in the first half,
with Freighting, Specialist and International divisions
all delivering full year improvements. Warehousing
& Logistics and Bulk Liquids both reflect the costs
associated with growth initiatives that will provide
long term value for the business, particularly new
warehousing capacity and set up costs prior to major
new customer contracts commencing.
A profit improvement was delivered in the first half, with
the second half profit gains offset by increased finance
costs, depreciation and the $2.6m additional expenses
for the deferred acquisition consideration related to
MOVE Logistics. Excluding the deferred acquisition
consideration, adjusted NPAT was $6.6m.
The Board declared a final fully imputed dividend of
2.5 cents per share (cps), taking full year dividends to
5.0 cps.
Further information on our financial results can be
viewed in the FY19 Results Presentation available
on our website https://www.til.kiwi/investor-area/
presentations/.
GROWTH INITIATIVES ARE HAVING A POSITIVE
IMPACT, PARTICULARLY THE ACQUISITION OF
SPECIALISED LIFTING AND TRANSPORT GROUP
AND INVESTMENT INTO ADDITIONAL WAREHOUSE
CAPACITY.
Acquisition of Specialised Lifting and Transport Group
We acquired Specialised Lifting and Transport Group
in November 2018, adding scale to what had previously
been a very small and unprofitable part of our
business. The acquisition led the division to a standout
performance in FY19, lifting revenue by more than 400%
and returning to profitability.
Heavy haulage – the transport of exceptionally large,
unusually-shaped or heavy items such as transformers,
bridges, boats and silo tanks – involves specialised
equipment and highly skilled, knowledgeable and
dedicated people. Meanwhile, Machinery Movers, which
was part of the acquisition, is a new area for TIL –
moving heavy equipment from place to place within an
existing business or transporting it across New Zealand.
The four different businesses now under TIL’s umbrella
complement one another so that resources can be
deployed to those units with the heaviest workloads.
We have high expectations of this division for FY20 and
it has started the year well, securing a major windfarm
project at Turitea Windfarm Project in Manawatu that
consists of transporting 33 turbines onto the site.
New Customer Wins
We continue to win new business on the back of
our end to end supply chain offer and reputation for
consistent quality service delivery. Of particular note
during the year was the renewal of two major customer
contracts with Z Energy and Farmlands.
In October 2018, we renewed our partnership with Z
Energy for a further five years, with the signing of a
long term, exclusive, strategic supply contract, with
increased volumes and wider distribution coverage. The
renewed contract covers the North and South Islands
and includes cartage of petroleum and aviation fuel for
both of Z Energy’s brands, Z and Caltex.
In addition, in November 2018 we renewed our fuel
transport and distribution contract with Farmlands
Co-operative, a rural co-operative with 82 stores
nationwide. This contract covers the North and South
Islands and includes fuel transport to all Farmlands
Fuel customers, including the Challenge petrol station
network.
CHAIRMAN AND CEO’S
REPORT
CHAIRMAN AND CEO’S REPORTCHAIRMAN AND CEO’S REPORT
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SPECIALIST TRANSPORT
Investment into wind energy is ramping
up and TIL’s Specialist division is ideally
suited for transporting wind turbines and
equipment to challenging sites. ¢
CHAIRMAN AND CEO’S REPORTCHAIRMAN AND CEO’S REPORT
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Expanding our Capacity
MOVE Logistics has strengthened its position in the
logistics and warehousing sector even further with the
completion and relocations of three facilities in FY19
and two additional warehouses planned for FY20.
Combined, these will deliver 25% additional capacity for
future growth and will position MOVE to be one of the
largest warehouse service providers (by capacity) in the
country.
The first of the new warehouse spaces in FY19 was in
Highbrook Drive in Auckland, a busy industrial area.
The extension of the existing warehouse has delivered a
doubling in pallet storage to 19,000 pallets, an extended
container yard space and better site access. Just down
the road in East Tamaki, is another new warehouse with
the potential for 18,000 pallets. This is located in close
proximity to Lion Nathan’s brewing and bottling plant,
one of MOVE’s larger customers.
The third new warehouse is in Rolleston, Christchurch,
with stage one completed earlier this year and stage
2 due for completion in early 2020. The Rolleston
development is very much a strategic move to create
capacity, grow our sector presence, attract a new range
of customers and to broaden our services to customers.
There are a number of potential benefits for our existing
customers including reduced container transport costs,
container triangulation benefits and reduced supply
chain costs.
There is constant demand for high quality warehousing
and we will continue to look for opportunities to expand
or develop new sites in targeted areas.
Our People
Our business is successful because of our people.
From the truck drivers on the road to our warehouse
personnel, accounts and support office staff, logistics
managers and leaders. We would like to thank them all
for the services they have provided and the role they
continue to play in our ongoing success.
Our positive culture is reflected in the high number of
long service employees within the group, with
approximately 15% who have been with the company for
more than 10 years and 6% who have more than 30 years
of service. While this may sound small, in today’s transient
employment market, it’s a number we’re proud of.
With our transition to an NZX-listed company, FY19
was a natural time to establish a new Leadership Team
structure. Some of our long-serving senior staff took the
opportunity to retire and we would like to acknowledge
and thank them for their significant contributions in
building TIL to the leading company it is today. A new
generation has stepped up, both from within our ranks
and externally, and we are encouraged by the high
calibre of the people we have been able to promote and
attract.
Recruitment of truck drivers and, surprisingly, of
warehouse staff remains challenging. We have a
number of recruitment programmes underway including
becoming an accredited employer able to offer a
pathway to NZ residency in order to address skill
shortages. We are also looking to offer cadetships for
younger people into the industry and are planning for
additional training to build skills and support internal
promotion within our business.
Health and Safety
Across our business, we travel over 50 million kilometres
each year on New Zealand’s roads, delivering product
to over 30,000 sites while operating within 51 of our
own sites with over 500 forklifts. Overlaying this is our
responsibility to deliver millions of litres of fuel to 60%
of service stations and farms, and gas to all locations
not served by pipeline. This environment is hazardous
and calls for constant vigilance on all matters of safety.
We take the safety and wellbeing of our employees,
contractors, owner drivers and communities very
seriously. Health & Safety (H&S) remains a priority
and an essential component to everything we do.
We continue to make strides in improving our safety
culture and performance, in particular making use of the
opportunities technology provides for greater efficiency,
reporting and oversight.
In the past year, we have made significant investment
to improve the safety of staff and the wider community,
including into training, technology and staff
engagement. We also appointed a new Group Safety &
Environmental Manager, Dwane Feehely.
In FY19, our Lost Time Injury Frequency Rate was 24
and the Medical Treatment Frequency Rate was 22. Our
focus is on reducing these and we remain committed to
our goal of zero harm.
Technology
Technology is a big enabler for our business and will
be a major area of investment for us in FY20 as we
implement new IT systems for Freighting and Bulk
Liquids. These Transport Management Systems are
world class and will help drive efficiencies and improve
the customer experience. They will operate alongside
other technology systems such as our new Warehouse
Management System (Paperless) and various support
systems in Finance, HR and CRM.
In Bulk Liquids, Pacific Fuel Haul has partnered with our
largest customer Z Energy to implement a new Ortech
technology that will deliver a superior supply chain
solution when introduced in FY20.
We are also using technology to enhance other areas
of our business, particularly around health and driver
safety. In FY19, we invested further into in-cab services
and safety systems to help keep our drivers safe, with
agreements signed with ERoad and with Autosense for
driver training and in-cab technology.
Environment
We acknowledge that our business has an
environmental impact and we are committed to
reducing our carbon emissions. The road to where we
want to be is long and challenging as the shift from the
internal combustion engine to alternate technologies is
still evolving. We believe that there will be a hybrid of
technologies introduced over time with the replacement
of internal combustion engines, with electric cars and
light commercials occurring quicker then heavy trucks
and other modes of transport. From our perspective
we will invest in environment improving technology
as it becomes available and fulfil our dream of being
Oceania’s leading environmental transport and logistics
company.
We completed a CEMARS review in July 2019 and have
developed an Emissions Management and Reduction
Plan with annual targets for consumption.
Our carbon footprint is dominated by diesel fuel and
many of our initiatives are focused around what we can
do to reduce our use of diesel. Some examples include
better route planning, low rolling resistance tyres to
improve aerodynamics, vehicle selection and driver
training.
We have solidified our forklift partnership with two
major suppliers and this will see the gradual upgrade
of our 500+ fleet over time to safer, more efficient and
lower carbon emission equipment.
We are also investigating alternative fuel options,
including our partnership with Hiringa to investigate
development of hydrogen cell fuel technology. This
continues to proceed and the joint venture received
regional funding support to complement the support we
and our partners have committed to the project.
Our Customers
Each of our Divisions has performed well over the year.
We appreciate that without our customers we would
not have had the opportunity to do so. We would
like to recognise and thank the many customers who
support our company through our various business
activities and brands. They enable us to employ and
provide income to our 1,600 employees and contractors
and deliver approximately $200m into other various
suppliers and tax income for New Zealand.
Outlook
THE TRANSPORT AND LOGISTICS SECTOR
REMAINS FRAGMENTED AND TIL IS WELL
POSITIONED TO BUILD BOTH ORGANICALLY AND
THROUGH CAREFULLY SELECTED ACQUISITIONS.
OPPORTUNITIES HAVE BEEN IDENTIFIED ACROSS
ALL SECTORS TO IMPROVE VOLUMES AND
UTILISATION, EXPAND THE OFFER AND DRIVE
EFFICIENCIES.
Our focus for the current FY20 year is on organic
growth – realising the opportunities and potential
within our existing businesses. Growth opportunities
have been identified for all TIL’s divisions, particularly
in Specialised, International and non-fuel Bulk Liquid
haulage.
While we expect New Zealand’s economic growth
to continue in line with current rates of 2%, we
acknowledge the recent indications of curtailment in
economic activity. We are confident of our own future,
however, we will be watching business confidence and
the economy closely. We have seen high demand from
the food, rural and building & construction sectors and
expect this to be ongoing.
CHAIRMAN AND CEO’S REPORTCHAIRMAN AND CEO’S REPORT
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The benefits of FY19 growth initiatives will start
to be seen in FY20, with additional warehousing
capacity due to come online later this year, full
year benefits from new customer contracts that
commenced in late FY19 and a full year contribution
from SLTG. In addition, the restructure of NZL into
separate freighting and transport services will
deliver synergy and cost benefits in FY20.
Significant projects will include the opening of a
further two warehouses as well as site expansion
in Auckland and implementation of new IT systems
for Freighting and Bulk Liquids, which will drive
efficiencies and improve the customer experience.
We are expecting an improved performance in
FY20, driven by new customer contracts, additional
warehousing capacity, organic growth and the
benefits of FY19 investment into growth initiatives
including the full year benefits of SLTG.
We look forward to the many opportunities before
us and serving our customer needs whether it be by
electric vehicles, rail, sea, air or spaceship. Just like
we have done for 150 years. ¢
Trevor Janes Alan Pearson
Chairman Chief Executive Officer
EXPANDING OUR CAPACITY
Stage one of the new Rolleston warehouse opened in April
2019 and has a footprint of 10,000 sqm and is fully racked with
17,000 pallet positions. Stage 2 will add a further 10,000sqm
and is due for completion in March 2020. ¢
CHAIRMAN AND CEO’S REPORTCHAIRMAN AND CEO’S REPORT
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TIL OPERATES
ACROSS FIVE DIVISIONS
FREIGHTING
Revenue $149.2m ▲4%
EBITDA $8.2m ▲43%
¡ Focused effort on margin is
delivering improved result
¡ Continual investment in fleet
upgrades to ensure best in
class safety, reduced emissions
and increased fleet availability
¡ Increased lease costs with
more trucks now being leased
rather than purchased outright
¡ Investment into technology
including in cab digitised
services and safety systems for
driver fatigue
¡ Implementation of new
Transport Management System
in FY20 will support track
and trace visibility, improving
customer experience
¡ Opportunity for growth due
to market consolidation and
through expansion of existing
services
WAREHOUSING &
LOGISTICS
Revenue $106.7m ▲10%
EBITDA $9.1m ▼5%
¡ Opening of three new
warehouses in FY19 and
investment into three
additional/expanded
warehouses planned for FY20
¡ Combined, new warehouses
will deliver 25% additional
capacity for future growth. Will
position MOVE to be one of
the largest warehouse service
providers (by capacity) in the
country
¡ Capital and set up expense of
new warehouses will be seen in
FY20, with revenue upside in
subsequent years
¡ NZL separated into
warehousing and freighting
services; cost impact in 2H19
with benefits from FY20
¡ FY19 results impacted by
increased property costs, the
closure of a major customer
impacting on NZL and the NZL
restructure, and an unplanned
increase in demurrage costs
BULK LIQUIDS
Revenue $78.1m ▲5%
EBITDA $8.3m ▼20%
¡ Renewal of two key customer
contracts – with Z Energy and
Farmlands
¡ Results reflect increased cost
base to support renewed
customer contracts; more
leasing of trucks leading to
higher lease costs, lower
consumer demand due to
high fuel prices and lower sale
proceeds from used trucks
¡ Identified significant
opportunity associated with
non-fuel bulk liquid transport,
such as new ethanol transport
contract. Sector opportunities
include Industrial, Edible,
Chemical and Fuel
¡ Division rebranded to Pacific
Liquid Logistics in order
to leverage the business
into other non-fuel market
segments
¡ Will continue to build on long
term strategic partnerships
with key customers and grow
service delivery associated
with non-fuel Bulk Liquid
transport
INTERNATIONAL
Revenue $8.0m ▲8%
EBITDA $1.5m ▲31%
¡ Positive year with increased
activity in the sector
¡ ISO Tank & Shipping services
increased revenue with greater
demand for ISO equipment &
services
¡ Exploring acquisition
opportunities
¡ Further specialist logistics
services being investigated to
increase footprint
¡ Cross Group benefits with
increased volumes driving
warehousing and transport
demand
SPECIALIST
Revenue $13.1m ▲445%
EBITDA $2.6m ▲
PY:$(0.4)m
¡ Specialised Lifting and
Transport Group acquired in
November 2018
¡ Stand out performance
with results meeting high
expectations
¡ Provided synergies and support
for the previously
sub-scale Multi-Trans business
¡ Offers significant opportunity
for TIL to grow market share
¡ New contract wins to service
windfarm transport needs
¡ FY20 looks promising with a
number of major projects being
considered
FREIGHTING;
WAREHOUSING &
LOGISTICS; BULK
LIQUIDS; SPECIALIST
AND INTERNATIONAL
TIL OPERATES ACROSS FIVE DIVISIONSTIL OPERATES ACROSS FIVE DIVISIONS
1819TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
OUR PEOPLE
Truck driver, Cyril Komene has
been working for TIL Logistics’
Bulk Liquids division in the
South Island since 2015 and
takes pride in looking after his
customers. ¢
2021TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
At TIL Logistics Group, we believe
that good corporate governance
is essential to protect the
interests of investors and create
and enhance value over the short
and long term. We are committed
to conducting business in the
right way, ethically and in line
with our legal and regulatory
obligations.
The Board has adopted corporate
policies and procedures that
reflect best practice and we
follow the principles and
recommendations of the NZX
Corporate Governance Code (the
Code). You can read about our
corporate governance practices in
FY19 on pages 79 to 84. ¢
TREVOR JANES
INDEPENDENT CHAIR
BCA, FCA, FCFIP, CFinstD
APPOINTED 6 DECEMBER 2017
Trevor Janes has significant
governance experience and holds
a number of board positions with
private and public companies.
He is a member of the NZX
Markets Disciplinary Tribunal and
chairs the Tokelau International
Investment Fund. His career
has been in investment banking
and financial analysis and he is
a Fellow of INFINZ and of CA
ANZ, a Member of the Chartered
Financial Analysts Institute (USA),
and a Chartered Fellow of the
Institute of Directors.
JAMES (JIM) RAMSAY
EXECUTIVE DIRECTOR
FCILT
APPOINTED 6 DECEMBER 2017
Jim has extensive experience
in the New Zealand transport
industry and has spent some 45
years in lead management roles
with Hookers, TNL/Newmans
Group and TIL. He has been
responsible for building TIL from
a local New Plymouth trucking
operation into a New Zealand
wide transport force. He has
served as Chair of TIL and several
associated companies, and
has played a significant part in
transport industry matters. He
has been honoured with Life
Membership in his local Road
Transport Association and is a
Fellow of the Chartered Institute
of Logistics and Transport. In 2013
Jim was inducted into the NZ
Road Transport Hall of Fame.
LORRAINE WITTEN
INDEPENDENT DIRECTOR,
CHAIR AUDIT & RISK COMMITTEE
BMS (HONS), CA
APPOINTED 6 DECEMBER 2017
Lorraine Witten is an experienced
executive and entrepreneur with
extensive commercial experience
in high growth and high change
environments. Her skills are in
technology, ICT, construction,
services and network economics,
where she has 30 years’
experience in senior management
and finance roles. Lorraine has 20
years of governance experience
and is a Fellow of the Institute of
Directors. She currently sits on
the board of a number of private
and public companies including
Horizon Energy Group and Rakon.
She is Chair of the Audit & Risk
committee for the Department of
Corrections.
DANNY CHAN
INDEPENDENT DIRECTOR
BCA (HONS), ACA, FCSAP, MINSTD
APPOINTED 6 DECEMBER 2017
Danny is an experienced New
Zealand director with extensive
accounting, finance and investment
management and education
experience. He holds a number
of directorships with companies
including Academic Colleges
Group, Abano Healthcare
Group, Farmers’ Mutual Group,
Marlborough Wines Estate and
Auckland Tourism Events and
Economic Development Limited,
as well as numerous companies
associated with his private
investments both in New Zealand
and Asia. He is a member of the NZ
China Executive Advisory Council
and the NZ Markets Disciplinary
Tribunal, and was a member of the
Department of Prime Minister and
Cabinet - China Project Advisory
Group.
OUR BOARD
OUR BOARDOUR BOARD
2223TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
The leadership team was
strengthened during the year with
new executives recruited either
into new roles or to fill roles where
some senior managers had retired.
As was expected some of the
founders and pioneers of TIL, Alan
Terris and Greg Whitham, chose to
retire from their executive roles as
GM Marketing & International and
CFO respectively. Andy Stanley
Divisional CEO for PFH also chose
to semi-retire.
New executives including Lee
Banks, Maurice Corkery, Stephen
Owles, Clayton Imbs, Warwick
Bell and Dwane Feehely were all
appointed to complement the
existing executive team.
Following year end, Dean Crackett
and Dallas Guilford have been
appointed on a temporary basis
to the roles of GM Marketing and
GM Group HR while permanent
replacements are recruited. ¢
For profiles of each executive,
please visit https://www.til.kiwi/
about-us/management/
GROUP EXECUTIVE TEAMDIVISIONAL CEOS
LEADERSHIP
ALAN PEARSON
CEO
STEPHEN OWLES
DCEO BULK LIQUIDS
CLAYTON IMBS
DCEO INTERNATIONAL
DWANE FEEHELY
GROUP SAFETY AND
ENVIRONMENTAL MANAGER
DALLAS GUILFORD
ACTING GROUP HR MANAGER
LEE BANKS
CFO
JON KYLE
DCEO TIL FREIGHTING
RICHARD MATHER
DCEO WAREHOUSING &
LOGISTICS
WARWICK BELL
DCEO SPECIALIST LIFTING
MAURICE CORKERY
CIO
DEAN CRACKETT
ACTING GROUP MARKETING
LEADERSHIPLEADERSHIP
2425TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2019
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
2627TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019FINANCIAL STATEMENTS FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2019
NOTES
30 JUNE 2019
$000
30 JUNE 2018
$000
ASSETS
Current Assets
Cash and cash equivalents 12.16,3892,881
Inventories 301279
Trade and other receivables 12.251,03746,578
Tax receivable160269
Advances to associates 12.3581603
Total Current Assets 58,46850,610
Non-Current Assets
Property, plant and equipment 13.192,31374,616
Intangible assets 13.223,90924,613
Investments in associates 16.21,6921,879
Total Non-Current Assets 117,914101,108
TOTAL ASSETS 176,382151,718
EQUITY
Share capital1435,44928,107
(Accumulated losses) (2,364)(1,295)
Equity attributable to owners of the parent 33,08526,812
Non-controlling interest in equity1,2371,157
TOTAL EQUITY 34,32227,969
LIABILITIES
Current Liabilities
Trade and other payables 12.439,34831,670
Deferred revenue344-
Borrowings 12.55,1853,432
Employee entitlements 12.612,95711,751
Provision for other liabilities and charges13.42252,192
Total Current Liabilities 58,05949,045
Non-Current Liabilities
Borrowings 12.579,13270,447
Deferred income tax liability 13.34,1023,471
Provisions for other liabilities and charges 13.4767786
Total Non-Current Liabilities84,00174,704
TOTAL LIABILITIES 142,060123,749
TOTAL EQUITY & LIABILITIES 176,382151,718
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS &
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
NOTES
30 JUNE 2019
$000
30 JUNE 2018
$000
Revenue 7355,139325,552
Gains on disposal of assets 8731,921
Dividends received 2152
Rents received 2,9043,068
Other income 1,470981
Total Income 360,601331,524
Transport costs(147,742)(139,731)
Employee costs(127,338)(114,902)
Lease expenses(34,405)(31,805)
Other operating expenses(23,115)(18,898)
Share based payment expense -(11,593)
IPO / listing costs -(6,545)
Changes in contingent consideration / advisor fees(2,600)(1,191)
Depreciation / amortisation expenses 13.1/13.2(13,610)(12,417)
Impairment of goodwill-(159)
Total Operating Expenses 8(348,810)(337,241)
Finance costs - interest on borrowing(4,156)(3,431)
Interest income on short term deposit116102
Operating surplus / (deficit) before income tax7,751(9,046)
Share of (loss) of associates 16.2(361)(127)
Profit / (Loss) Before Income Tax 7,390(9,173)
Income tax expense 9(3,026)(2,490)
PROFIT / (LOSS) FOR THE PERIOD FROM CONTINUING
OPERATIONS
4,364(11,663)
Profit / (Loss) attributable to:
Owners of the company4,004(12,191)
Non-controlling interests16.2360528
4,364(11,663)
Other comprehensive income:
Comprehensive Income / (Loss) for the Period, Net of Tax --
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE
PERIOD, NET OF TAX
4,364(11,663)
Earnings per share for profit / (loss) attributable to the
ordinary equity holders for the company
CENTSCENTS
Basic and diluted earnings / (loss) per share 115.18(14.98)
The above consolidated statement of profit or loss & other comprehensive income should be read in conjunction with the accompanying
notes.
Trevor Janes - Chairman
22 August 2019
Lorraine Witten - Director
22 August 2019
2829TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
ATTRIBUTABLE TO OWNERS OF THE
COMPANY
INVESTED CAPITALSHARE CAPITALRETAINED EARNINGS/(ACCUM. LOSSES)TOTAL NON-CONTROLLING INTERESTTOTAL EQUITY
$000$000$000$000$000$000
Balance as at 1 July 2017102,012--102,012806102,818
Comprehensive income 1 July to 6 December
(Loss)/profit for the period4,668--4,668-4,668
Other comprehensive income------
Total comprehensive income 1 July to 6 December4,668--4,668-4,668
Transactions with owners in their capacity as
owners:
Equity transactions with Bowker 99127--12777204
Dividends provided or paid------
Total transactions with owners prior to reverse
listing
127--12777204
Reverse listing on 7 December 2017(106,807)5,473101,334---
Balance on reverse listing-5,473101,334106,807883107,690
Comprehensive income 7 December 2017 to 30
June 2018
(Loss)/profit for the period--(16,859)(16,859)528(16,331)
Other comprehensive income------
Total comprehensive income 7 December 2017 to
30 June 2018
--(16,859)(16,859)528(16,331)
Transactions with owners in their capacity as
owners:
Deemed consideration for the acquisition of TIL
Logistics Group Limited (formerly Bethunes)
-678-678-678
Equity-settled share-based payments-10,596-10,596-10,596
Issues of ordinary shares in a public offer-11,360-11,360-11,360
Distribution to owners as part of reverse listing--(85,770)(85,770)-(85,770)
Dividends provided for or paid----(254)(254)
Total transactions with owners on/after reverse
listing
-22,634(85,770)(63,136)(254)(63,390)
Balance as at 30 June 2018-28,107(1,295)26,8121,15727,969
Balance as at 1 July 2018 as previously reported
-28,107(1,295)26,8121,15727,969
Adoption of IFRS 15
--(571)(571)-(571)
Adoption of IFRS 9
--(499)(499)-(499)
Revised balance as at 1 July 2018
-28,107(2,365)*25,7421,15726,899
Comprehensive income
Profit for the period
--3,8414,0043604,364
Other comprehensive income
------
Total comprehensive income
-28,1071,47629,7461,51731,263
Transactions with owners:
Equity settled acquisition
-4,000-4,000-4,000
Dividends and dividend reinvestment plan
-3,342(4,003)(661)(280)(941)
Balance as at 30 June 2019
-35,449(2,527)33,0851,23734,322
*See note 20 for details regarding the adoption of new accounting policies.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
NOTES
30 JUNE 2019
$000
30 JUNE 2018
$000
Cash flows from operating activities
Receipts from customers 354,330323,035
Interest received 116102
Dividends received 1522
Payments to suppliers and employees (329,045)(306,283)
Interest paid (3,885)(3,286)
Income tax paid (2,286)(3,218)
Net cash generated from operating activities 15.119,38210,352
Cash flows used in investing activities
Purchase of business, net of cash acquired17(15,000)(3,200)
Purchase of property, plant and equipment(22,848)(13,174)
Proceeds from sale of property, plant and equipment13,67614,366
Purchase of intangible assets(775)(1,107)
Advances to associates (152)11
Net cash used in investing activities (25,099)(3,104)
Cash flows from financing activities
Repayment of borrowings15.2(5,834)(16,432)
Proceeds from borrowings15.216,00090,000
Proceeds from share issue-11,510
Capital distribution to company shareholders-(92,156)
Dividends paid to shareholders / non-controlling interests(941)(255)
Net cash flow from financing activities9,225(7,333)
Net increase in cash and cash equivalents3,508(85)
Cash and cash equivalents at beginning of period 2,8812,966
Cash and cash equivalents at end of period12.16,3892,881
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
3031TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. GENERAL INFORMATION
1.1. REPORTING ENTITY
The core operations of TIL Logistics Group Limited
(“TIL Logistics” or the “Company”) and its subsidiaries
(collectively “the Group”) are in the New Zealand
transport sector. These include general transport,
bulk liquids, heavy haulage, shipping, storage and
distribution, national and international household
removals and storage.
The Company is incorporated and domiciled in New
Zealand, registered under the Companies Act 1993 and
is a FMC Reporting Entity under the Financial Markets
Conduct Act 2013. The Company is listed on the NZX
Main Board.
The registered office of the Company is at 330 Devon
Street East, New Plymouth, New Zealand.
The consolidated financial statements of the Company
as at, and for the year ended, 30 June 2019, comprise
the Company and its subsidiaries (refer note 16.1), and
acquired assets from Transport Investments Limited,
together referred to as the “Group”.
These financial statements were authorised by the
Board of Directors on 22 August 2019.
1.2. BASIS OF PREPARATION
These financial statements have been prepared on a
historical cost basis.
The preparation of financial statements in conformity
with NZ IFRS 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 where
assumptions and estimates are significant to the
consolidated financial statements are disclosed in
note 4.
The principal accounting policies adopted in the
preparation of the financial statements are selected and
applied in a manner which ensures that the resulting
financial information satisfies the concepts of relevance
and reliability, thereby ensuring that the substance of
the underlying transaction and other events is reported.
These policies have been consistently applied to all the
periods presented, unless otherwise stated.
1.3. STATEMENT OF COMPLIANCE
The Group is a for-profit entity. Its financial statements
have been prepared in accordance with, and comply
with, New Zealand Generally Accepted Accounting
Practice (NZ GAAP). They comply with New Zealand
Equivalents to International Financial Reporting
Standards and other applicable Financial Reporting
Standards and Authoritive Notices, as appropriate for
for-profit entities. The financial statements comply with
International Financial Reporting Standards (IFRS).
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
2.1. CONSOLIDATION
a. Subsidiaries
Subsidiaries are all 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.
The Group uses the acquisition method of accounting
to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the
fair value of the assets transferred, the liabilities
incurred and the equity interest issued by the Group.
The consideration transferred includes the fair value
of any asset or liability resulting from a contingent
consideration arrangement.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination
are measured initially at their fair values at the
acquisition date. On an acquisition by acquisition basis,
the Group recognises any non-controlling interest in the
acquisition either at fair value or at the non-controlling
interests proportionate share of the acquiree’s net
assets. The excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree,
and the acquisition-date fair value of any previous
equity interest in the acquiree over the fair value of the
Group’s share of the identifiable net assets acquired, is
recorded as goodwill.
Contingent consideration is classified either as equity
or a financial liability. Amounts classified as a financial
liability are subsequently re-measured to fair value with
changes in fair value recognised in profit or loss.
Inter-company transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of
the transferred asset. Accounting policies of subsidiaries
have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated
statement of profit or loss & other comprehensive
income, statement of changes in equity and balance
sheet respectively.
b. Associates
Associates are all entities over which the Group
has significant influence but not control, generally
accompanying a shareholding of between 20% and 50%
of the voting rights. Investments in associates are
accounted for using the equity method of accounting
after initially being recognised at cost. The Group’s
investment in associates includes goodwill identified on
acquisition, net of an accumulated impairment loss. The
Group’s share of its associates post-acquisition profits
or losses is recognised under ‘Share of (loss) / profit
of associates’ in the statement of profit or loss & other
comprehensive income, and its share of post-acquisition
movements in reserves is recognised in reserves. The
cumulative post-acquisition movements are adjusted
against 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 other
unsecured receivables, the Group does not recognise
further losses, unless it has incurred obligations or made
payments on behalf of the associate.
Unrealised gains on transactions between the Group
and its associates are eliminated to the extent of the
Group’s interest in the associates. Unrealised losses
are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Accounting policies of associates have been changed
where necessary to ensure consistency with the policies
adopted by the Group.
2.2. FOREIGN CURRENCY TRANSLATION
a. Functional and presentation currency
Items included in the financial statements of each of
the Group’s entities are measured using the currency
of the primary economic environment in which the
entity operates (‘the functional currency’). The financial
statements are presented in New Zealand dollars
(rounded to thousands), which is the functional and the
presentation currency of all companies in the Group.
b. Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of
such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in
profit or loss.
2.3 NEW ACCOUNTING STANDARDS
Except as disclosed below, the accounting policies
adopted are consistent with those in the previous
financial year and corresponding interim reporting
period. Changes to accounting policies have been made
following the adoption of new and amended standards
which came into effect during the period:
NZ IFRS 9 Financial Instruments, and
NZ IFRS 15 Revenue from Contracts with Customers.
The impact of the adoption of these standards and the
new accounting policies are disclosed in note 20. There
have been no changes in other accounting standards
that would have a material impact on the financial
statements.
2.4. STANDARDS ISSUED BUT NOT YET ADOPTED
A number of new standards, amendments to standards
and interpretations are effective for annual periods
beginning on or after 1 July 2019, and have not been
applied in preparing these consolidated financial
statements.
NZ IFRS 16 Leases - The standard requires lessees to
account for all leases under a single on-balance sheet
model (subject to certain exemptions) in a similar way
to finance leases under NZ IAS 17. Lessees recognise a
liability to pay rentals with a corresponding asset, and
recognise interest expense and depreciation separately.
Lessor accounting is substantially the same as NZ IAS
17’s dual classification approach. Application of NZ IFRS
16 is required for periods beginning on or after 1 January
2019 with early adoption permitted. Management has
performed a preliminary assessment of the impact of
NZ IFRS 16 (refer note 20). The Group’s main significant
operating leases relate to fleet and property.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3233TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
3. FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise bank loans and overdrafts, cash, trade creditors and accruals and
trade debtors. The main purpose of these financial instruments is to raise and provide working capital for the Group’s
operations.
This note explains the Group’s exposure to financial risks and how these risks affect the Group’s future financial
performance.
RiskExposure arising fromMeasurement
Credit riskCash and cash equivalents and trade receivablesAging analysis & credit ratings
Market risk - interest rateLong term borrowing at variable ratesSensitivity analysis
Liquidity riskBorrowings and other liabilitiesRolling cash flow forecast
The Group’s risk management is carried out by a central treasury department (Group Treasury) under policies approved
by the board of directors. Group treasury identifies, evaluates and manages financial risks in close co-operation with the
group’s operating units. The board provides written principles for overall risk management, as well as policies covering
specific areas, such as foreign exchange risk, funding risk, interest rate risk, credit risk and use of derivative financial
instruments and non-derivative financial instruments.
3.1. CREDIT RISK MANAGEMENT
In the normal course of business the Group incurs credit risk from trade debtors and transactions with financial
institutions. The Group has a credit policy that it uses to manage this risk. As part of this policy limits on exposures with
counter-parties have been set and approved by the Board of Directors and are monitored on a regular basis.
The Group has no significant concentrations of credit risk. The Group does not require any collateral or security to
support financial instruments due to the quality of the financial institutions and trade debtors dealt with. The Group
normally gives 30 or 60 days credit on its trade receivables.
At 30th June the Group’s credit risk exposure is equal to the carrying value of its financial assets.
2019
$000
2018
$000
Trade and other receivables
Current receivables40,66136,241
Outstanding 30 to 60 days6,2067,315
Outstanding 60 to 90 days916892
Outstanding more than 90 days2,254687
Total trade and other receivables50,03745,135
Sundry receivables467276
Advances to associates581603
Cash and short term bank deposits
Bank with AA credit rating6,3892,881
a. Impaired trade receivables
Individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The
other receivables are assessed collectively to determine whether there is objective evidence that an impairment has been
incurred but not yet been identified. For these receivables the estimated impairment losses are recognised in a separate
provision for impairment. The Group considers that there is evidence of impairment if any of the following indicators are
present:
• significant financial difficulties of the debtor
• probability that the debtor will enter bankruptcy or financial reorganisation, and
• default or delinquency in payments (more than 60 days overdue).
Receivables for which an impairment provision was recognised are written off against the provision when there is no
expectation of recovering additional cash.
Impairment losses are recognised in profit or loss within other expenses. Subsequent recoveries of amounts previously
written off are credited against other expenses.
3.1 CREDIT RISK MANAGEMENT (CONTINUED)
Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are as
follows:
2019
$000
2018
$000
At 1 July351750
Provision for impairment recognised during the year105121
NZ IFRS 9: Increase provision for trade receivables499-
Provision for impairment recognised from balance sheet during the year216-
Receivables written off during the year as uncollectible(306)(520)
At 30 June 865351
During the year, the following gains/(losses) were recognised in profit or loss in relation to impaired receivables.
2019
$000
2018
$000
Impairment losses
Individually impaired receivables921
Movement in provision for impairment 96100
Total105121
As at 30 June 2019 trade receivables of $2,305,000 (2018: $1,228,000) were past due (over 60 days) but not impaired.
These relate to a number of independent customers for whom there is no recent history of default. The aging analysis of
these trade receivables is as follows:
2019
$000
2018
$000
Up to 3 months past due916892
3 to 6 months past due1,389336
The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on the
credit history of these other classes, it is expected that these amounts will be received when due. The Group does not
hold any collateral in relation to these receivables.
3.2. INTEREST RATE RISK
The Group’s main interest rate risk arises from long term borrowing with variable rates which expose the Group to cash
flow interest rate risk.
Sensitivity analysis
The effect of a 1% increase or decrease in the floating interest rates for the Group would be a decrease/increase in profit
and equity of $847,000 (2018: $745,000.).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3435TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
3.3. LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate
amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, the Group maintains
flexibility in funding through having flexible funding lines available to them. Management monitors rolling forecasts of
the Group’s liquidity reserve, which comprises its undrawn borrowing facility and cash and cash equivalents (note 12.1) on
the basis of expected cash flows.
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
2019
$000
2018
$000
Expiring within one year (bank overdraft)5,00010,000
Expiring beyond one year (bank loans)2,7504,300
Total7,75014,300
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying balances or the impact of discounting is not significant.
Less than 1
year
Between 1 and
2 years
Between 3 and
5 years
Total
contractual
cash flows
Carrying
amount
(assets)/
liabilities
$000$000$000$000$000
2018
Borrowings6,9763,25072,40582,63173,879
Trade and other payables31,670--31,67031,670
Employee entitlements
11,751--11,75111,751
Contingent consideration
2,192--2,1922,192
Total52,5893,25072,405128,244119,492
2019
Borrowings8,88779,3321,49889,71784,317
Trade and other payables39,348--39,34839,348
Employee entitlements12,957--12,95712,957
Contingent consideration225--225225
Total 61,41779,3321,498142,247136,847
Bank Guarantee
Transport Investments Limited provides (via ASB Bank) guarantees.
2019
$000
2018
$000
Bank guarantees7,8375,730
3.4. CAPITAL RISK MANAGEMENT
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in
order to maintain an optimal capital structure to reduce the cost of capital.
The Group’s capital structure is managed and adjustments are made, with Board approval, to the structure in the light of
economic conditions at the time. There were no changes to objectives, policies or processes during the year.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
a. Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amounts of cash-generating
units have been determined based on value-in-use calculations. These calculations require the use of estimates. Refer to
note 13.2 for further details.
5. RECONCILIATION TO GAAP MEASURE - ADJUSTED EBITDA
Additional reporting measures have been referred to in the notes to the financial statements. The following non-GAAP
measures are relevant to the understanding of the Group’s financial performance:
EBITDA (a non-GAAP measure) represents profit before income taxes (a GAAP measure), excluding interest income,
interest expense, depreciation and amortisation, share of (loss)/profit of associates and impairment of goodwill, as
reported in the financial statements.
Adjusted EBITDA (a non-GAAP measure) represents EBITDA adjusted for non trading costs.
In order to show a meaningful representation of the Group’s financial results the Group presents a reconciliation showing
the financial results after adjustment for non-trading costs. The inclusion of this non-GAAP measure, in the Directors’
opinion, will assist users to understand the performance of the Group and promote comparison with the wider industry.
Reconciliation to GAAP measure 12 months to
June 2019
12 months to
June 2018
Net profit / (loss) before income tax (GAAP measure)7,390(9,173)
Add back:
Share of loss of associates 361127
Impairment of goodwill-159
Finance costs / (interest income)4,0403,329
Depreciation & amortisation 13,61012,417
EBITDA (non-GAAP measure) 25,4016,859
Non trading transaction costs:
Share based payments -11,593
Listing costs -6,545
Deferred consideration and advisor costs expensed* 2,6001,191
Adjusted EBITDA (non-GAAP measure) 28,00126,188
*The increase in deferred consideration relates to a prior period business acquisition. The Directors believe adjustment for this item assists
the users to gain a better understanding of the underlying performance of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3637TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
6. SEGMENT INFORMATION (CONTINUED)
The segment information provided to the Group CEO for the year ended 30 June 2019 is as follows:
InternationalSpecialistFreightingWarehousing
& Logistics
Bulk LiquidsCorporate Total
$000$000$000$000$000$000$000
Year ended 30 June 2018 -
Re-presented
Total segment revenue 7,3442,678148,106101,25385,564-344,945
Inter-segment revenue (5)(269)(4,050)(3,880)(11,189)-(19,393)
Revenue from external
customers
7,3392,409144,05697,37374,375-325,552
EBITDA1,183(404)5,7809,78510,294(19,779)6,859
Adjusted EBITDA (refer note 5) 1,183(404)5,7809,58210,294(247)26,188
Adjusted EBIT
1
1,039(529)9784,8367,861(415)13,770
Assets5,3034,48553,11064,28519,1535,382151,718
Liabilities3,33892419,73414,42410,45374,876123,749
Year ended 30 June 2019
Total segment revenue 7,96113,487153,879110,07783,221-368,625
Inter-segment revenue -(346)(4,682)(3,348)(5,110)-(13,486)
Revenue from external
customers
7,96113,141149,197106,72978,111-355,139
EBITDA1,5492,6468,2399,0718,253(4,357)25,401
Adjusted EBITDA (refer note 5)1,5492,6468,2399,0718,253(1,757)28,001
Adjusted EBIT
1
1,3881,2493,4194,1316,531(2,327)14,391
Assets6,04424,99051,42362,31018,76412,851176,382
Liabilities4,3102,81121,28014,32311,27988,057142,060
1
Adjusted EBIT (a non-GAAP measure) represents profit before income taxes (a GAAP measure), excluding interest income, interest expense, share of (loss)/profit
of associates, impairment of goodwill and non trading costs, as reported in the financial statements.
Interest income and expense are not allocated to segments, as this type of activity is driven by the central treasury
function, which manages the cash position of the Group.
Sales between segments are eliminated on consolidation. The amounts provided to the CODM with respect to segment
revenue are measured in a manner consistent with that of the financial statements.
The Group has a diverse range of customers from various industries, with only one customer contributing more than 10%
of the Group’s revenue.
6. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision
Maker (CODM). The CODM, is responsible for allocating resources and assessing performance of the operating segments.
Following a change in the Chief Operating Decision Maker (CODM), assessed as the Group CEO, there has been a
change to the operating structure of the Group during the reporting period. The reportable operating segments have
been revised to align with the new structure. This is consistent with reporting at the Company’s interim balance date, 31
December 2018.
The Group has made the decision that the thirteen operating segments that form part of the reporting to the Group CEO
can be aggregated into six reporting segments. Reportable segments have been determined by having regards to the
nature of the services, the processes the various business units undertake to service customers, the type of customers
serviced and the nature of the distribution channels.
In addition to GAAP measures, the Group CEO also uses non-GAAP measures (EBITDA and adjusted EBITDA) to assess
the commercial performance of the segments. The revised reportable operating segments have been determined as:
INTERNATIONAL
This segment includes international freight forwarding and shipping agency services across a broad range of industries.
SPECIALIST
This segment provides transport and lifting solutions for oversized and large items. They also carry out specialist moving
jobs.
FREIGHTING
This segment provides nationwide general freight transport services with regional strength. It is able to transport a wide
range of freight types.
WAREHOUSING & LOGISTICS
This segment specialises in warehousing and supply chain capabilities which enable comprehensive supply chain
solutions to customers.
BULK LIQUIDS
This segment includes the service for delivery of various bulk liquid goods.
CORPORATE
This segment includes our corporate services function.
Comparative information has been re-presented from that presented in the 30 June 2018 annual report. This is to provide
comparative information aligned with the newly determined reporting segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3839TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
7. REVENUE & OTHER SOURCES OF INCOME
Revenue comprises the fair value of the consideration received or receivable for the sale of services in the ordinary
course of the Group’s activities. Revenue is shown net of GST, returns, rebates and discounts and after eliminating sales
within the Group.
a. Sale of services
Freight Services
The Group performs transportation services. Revenue is recognised over the time of delivery, being from the time of
acceptance of the goods to delivery to the final destination.
A receivable is recognised when the customer’s products have been delivered by the Group. Payment is due in
accordance with contractual terms, usually 30 days from invoice date.
Logistics Services (Warehousing and Trading)
The logistics function provides warehousing and storage services. Revenue from providing these services is recognised
in the accounting period in which the services are rendered. Some contracts include multiple deliverables. However,
these are easily identifiable and are accounted for as separate performance obligations.
For fixed priced contracts, revenue is recognised based on the actual service provided to the end of the reporting period
as a proportion of the total services to be provided. This is because the customer receives and uses the benefits of the
service simultaneously.
Customers are invoiced on a daily, weekly or monthly basis and consideration is payable when invoiced. There are no
significant financing arrangements for any of the Group’s revenue streams.
The Group derives the following types of revenue:
2019
$000
2018
$000
Freight302,139280,714
Warehousing44,04636,831
Trading8,9548,007
Total Revenue355,139325,552
Timing of revenue recognition
June 2019June 2018
$000$000
Over time
355,139325,552
At a point in time
--
Total Revenue
355,139325,552
b. Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
c. Dividend income
Dividend income is recognised when the right to receive payment is established.
d. Rental income
Lease income from operating leases where the group is a lessor is recognised as rental income on a straight-line basis
over the lease term.
e. Financing Component
The Group does not expect to have any contracts where the period between the transfer of the promised service to the
customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the
transaction prices for the time value of money.
f. Contract Liability
The Group recognises a contract liability (deferred revenue) when the Group has received consideration for performance
obligations yet to be fulfilled. The opening balance has been recognised in revenue in the current year. There is no
material revenue recognised in the current year related to performance obligations met in previous periods. The average
timing of satisfaction of performance obligation in relation to the payment of the contract liability is between 1 and 5
days.
8. OPERATING EXPENSES BY NATURE
2019
$000
2018
$000
Transport costs
1
147,742139,731
Employee expenses (note 8.1)127,338114,902
Property lease expenses19,37818,873
Operation lease expenses15,02712,932
Trading and warehousing expenses6,2033,345
Communications4,0813,460
Occupancy costs5,0543,990
Bad Debts105121
Foreign exchange loss922
Remuneration paid to principal auditors (PwC)
Assurance services
Audit and review of financial statements, including associated disbursements300303
Other assurance services
2
-213
Non assurance services
Acquisition due diligence
3
-207
Other advisory services related to the IPO
4
-292
Other advisory services related to remuneration benchmarking and executive
compensation
5
59-
Donations1778
Directors fees 417321
Depreciation and amortisation13,61012,417
Share based payment expense-11,593
IPO / listing costs-5,833
Impairment of goodwill-159
Net increase in contingent consideration and advisor costs
6
2,6001,191
Other expenses6,8707,258
Total operating expenses348,810337,241
1
Includes costs relating to transportation including road user charges (RUC), fuel, tyres, repairs and maintenance, owner
driver and subcontractor costs.
2
Other assurance services relate to the provision of a limited assurance investigating accountants report in respect of the
Group’s listing documents. The provision of other assurance services, against recognised assurance standards, does not
typically create an independence risk.
3
Financial, tax and IT due diligence was provided to the Group in respect of business combinations that occurred in the
prior period. A team separate to the audit team was used to undertake this engagement. The work related to review of
historic financial information of the targets. Accounting advice in respect to purchase price accounting was not provided.
As such, no self review threat exists.
4
Other advisory services relate to the Group’s reverse acquisition and listing on the NZX. As part of the reverse listing
process the Group appointed PwC to provide tax and other advisory services. The services provided were performed by
a team separate to the audit. They related to providing comment on the listing documents. At all times the Group was
responsible for decision making.
5
Other advisory services relate to remuneration benchmarking and executive compensation. This amount excludes
advisory services related to financial due diligence for business acquisitions as these have been capitalised, being
$84,000 (2018: nil). The services provided were performed by a team separate to the audit. At all times the Group was
responsible for decision making.
6
The net increase in contingent consideration and advisor costs is the result of the final determination of the amount
payable relating to the MOVE Logistics business acquired in June 2017.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4041TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
8. OPERATING EXPENSES BY NATURE (CONTINUED)
8.1. EMPLOYEE BENEFITS EXPENSE
a. Superannuation benefits
The Group operates a defined contribution superannuation scheme. The scheme is funded through employee and Group
contributions to a trustee-administered fund. The Group has no further payment obligations once contributions have
been paid. Contributions are recognised as an employee benefits expense when they are due.
TIL Freighting Limited has a historic defined contribution company superannuation scheme that has been operating for a
number of years. The Company has contribution rates from 4% - 10%.
Members contribute a minimum of 4% of their salary/wage and can go as high as 15%. The Company contributions are
vested to the member at the rate of 20% per year of service with the Company i.e. 100% after five years of service.
b. Other employee benefits
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave are expected to be
settled within 12 months. They are measured at the amounts expected to be paid when the liabilities are settled.
c. Long service leave
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service. They are therefore measured at the present value
of expected future payments to be made in respect of services provided by employees up to the end of the reporting
period using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of services. Expected future payments are discounted using market
yields at the end of the reporting period of high-quality corporate bonds with terms and currencies that match, as closely
as possible, the estimated future cash outflows. Re-measurement as a result of experience adjustments and changes in
actuarial assumptions are recognised in profit or loss.
d. Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into
consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a
provision where contractually obliged or where there is a past practice that has created a constructive obligation.
2019
$000
2018
$000
Wages and salaries & other related costs124,066112,071
Superannuation fund contributions2,7552,455
Fringe benefit tax517376
Total127,338114,902
9. INCOME TAX EXPENSE
The tax expense for the year comprised current and deferred tax. Tax is recognised in the profit or loss component of the
statement of profit or loss & other comprehensive income except to the extent that it relates to items recognised directly
in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or equity respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance
sheet date in the countries where the Company and its subsidiaries operate and generate taxable income.
2019
$000
2018
$000
Current tax on profit / (loss) for the year(2,337)(2,754)
Adjustments in respect to prior years(58)(7)
Deferred tax(631)271
(3,026)(2,490)
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense
in the financial statements as follows:
2019
$000
2018
$000
Profit / (loss) before income tax7,390(9,173)
Add back:
Impairment of goodwill-159
Share of loss of associates361127
7,751(8,887)
Prima facie tax (payable) / receivable at 28%(2,170)2,488
Tax effects of:
Income not subject to tax20560
Timing differences not in deferred tax(9)(63)
Expenses not deductible(809)(5,468)
Prior year adjustment(58)(7)
Income tax expense(3,026)(2,490)
Imputation credits
2019
$000
2018
$000
Imputation credits available for use in subsequent periods4,9774,417
* Does not include impact of post year end dividend declaration.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4243TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
10. DIVIDENDS PAID AND PROPOSED
Dividends to the company shareholders are recognised in the Group’s financial statements in the period in which the
dividends are declared.
2019
$000
2018
$000
Recognised Amounts
Final fully imputed dividend for 2018: 2.3 cents (2017: 0 cents)1,874-
Interim fully imputed dividend for 2019: 2.5 cents (2018: 0 cents)2,129-
Dividends not recognised at the end of the reporting period
Since year end the Directors have recommended the payment of a final dividend
of 2.5 cents per fully paid ordinary share (2018: 2.3 cents). The dividend will be
fully imputed. The aggregate amount of the proposed dividend that will be paid
out of retained earnings at 30 June 2019 is not yet recognised as a liability at year
end.2,1591,874
11. EARNINGS PER SHARE
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is computed based
on the weighted average number of ordinary shares outstanding during the period. Diluted EPS is computed based on
the weighted average number of ordinary shares plus the effect of dilutive potential ordinary shares outstanding during
the period. The Group has no outstanding ordinary shares (2018: nil).
12 months to 30 June 201912 months to 30 June 2018
Earnings
Earnings
(excluding
non-trading
transactions)
Earnings
Earnings
(excluding
non-trading
transactions)
$000$000$000$000
Profit / (loss) for the year 4,3644,364(11,663)(11,663)
Share based payments -11,593
Listing costs -6,545
Deferred consideration and advisor costs
expense
2,6001,191
Earnings, excluding non-trading transaction
impact
6,9647,666
Weighted average number of shares84,328,64877,843,590
CentsCentsCentsCents
Basic & diluted earnings / (loss) per share 5.18(14.98)
Basic & diluted earnings per share, excluding
non-trading impact*
8.269.85
*Note this is a non-GAAP disclosure (refer note 5 for reconciliation). The Directors provide the non-GAAP information as the Company’s
dividend policy is based on the NPAT excluding non trading costs.
12. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The Group classifies its financial assets at amortised cost. The classification depends on the purpose for which the
financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
Financial assets are included in current assets, except for those with maturities greater than 12 months after the reporting
date which are classified as non-current assets. The Group’s financial assets comprise ‘Trade and other receivables’
and ‘Cash and cash equivalents’ and ‘Advances to associates’ in the balance sheet. Financial assets that are stated at
amortised cost are reviewed individually at balance date to determine whether there is objective evidence of impairment.
Any impairment losses are recognised in profit or loss in the statement of comprehensive income.
This note provides information about the Group’s financial instruments, including:
• An overview of all financial instruments held by the Group
• Specific information about each type of financial instrument
• Information about determining the fair value of the instruments, including judgements and estimations of
uncertainty involved.
The Group holds the following financial instruments:
AMORTISED COST
(2018: LOANS AND RECEIVABLES)
Financial AssetsNotes
2019
$000
2018
$000
Cash and cash equivalents
12.1
6,3892,881
Trade and other receivables
1
12.2
49,63945,060
Advances to associates
12.3
581603
Total56,60948,544
1
excluding prepayments
FINANCIAL LIABILITIES AT AMORTISED COST
Financial LiabilitiesNotes
2019
$000
2018
$000
Trade Payables
2
12.4
37,68729,596
Borrowings
12.5
84,31773,879
Employee entitlements
12.6
12,95711,751
Contingent consideration
12.7
2252,192
Total135,186117,418
2
excluding non financial liabilities
The Group’s exposure to various risks associated with the financial instruments is discussed in note 3. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above, other than for trade and other receivables where the maximum credit risk is the balance before
impairment, being $50,396,000 (2018: $45,411,000).
12.1. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, deposits held on call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.
Cash and cash equivalents include the following for the purpose of the cash flow statement:
2019
$000
2018
$000
Cash and cash equivalents6,3892,881
Bank overdrafts (note 12.5)--
Total6,3892,881
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4445TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
12.2. TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method less provision for expected credit loss.
The Group assesses on a forward looking basis the expected credit losses associated with trade receivables carried at
amortised cost. The Group applies the simplified approach permitted by NZ IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables. Impairment of trade receivables is recognised in profit
or loss.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable
has been impaired. The amount of the provision is the difference between the asset’s carrying amount and the present
value of the estimated future cash flows, discounted at the original effective interest rate.
2019
$000
2018
$000
Trade receivables49,75245,099
Trade receivables related parties 28536
Less expected credit loss(865)(351)
Net trade receivables49,17244,784
Sundry receivables467276
Financial assets at amortised cost49,63945,060
Prepayments1,3981,518
Total trade and other receivables51,03746,578
Trade receivables are generally due for settlement within 30 to 60 days.
12.3. ADVANCES TO ASSOCIATES
2019
$000
2018
$000
ATL Limited275275
TNL International Australia Pty Limited3111
Eamonn Stephen Farrell86-
UNITE Logistics Limited217217
Total581603
These advances are due on demand and are non-interest bearing.
12.4. TRADE AND OTHER PAYABLES
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
2019
$000
2018
$000
Trade payables23,57123,527
Trade payables related parties762496
GST payable1,6612,074
Lease incentive190259
Accrued expenses13,1645,314
Total39,34831,670
Trade payables are unsecured and are usually paid within 30 to 60 days of recognition.
12.5. BORROWINGS
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost using the effective interest method. Any borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Borrowing costs are expensed as incurred, unless they relate to the acquisition, construction or production of a qualifying
asset in which case the borrowing costs are capitalised.
On 31 October 2018, the Group entered into a new floating interest rate term loan facility for $15m to fund the purchase
of a business (refer note 17). The loan is with the same lender as the current facility and is for a term of three years. The
facilities are secured by way of a first ranking general security over the Group’s assets and undertaking including the
newly acquired business.
The facility includes a revolving committed cash facility of $75 million, an overdraft facility of $5 million, a term loan of
$15 million and a bank guarantee facility of $7.8 million (refer note 3.3).
30 June
2019
$000
30 June
2018
$000
Non-Current
Secured Loan ASB 78,99670,346
Secured Loan Mainland Capital / De Lage Landen136101
79,13270,447
Current
Secured Loan ASB 5,1133,400
Secured Loan Mainland Capital / De Lage Landen7232
5,1853,432
Total84,31773,879
The facilities are secured by way of a first ranking general security over the Group’s assets and undertakings.
The Group has complied with these covenants through the period. These include the following:
Group Coverage Ratio where the Total Tangible Assets and EBITDA of the guaranteeing group must not be less than 90%
of the consolidated group
Interest Cover Ratio must be greater than 3.00x
Debt Service Cover Ratio must be greater than 1.20x
Leverage Ratio must be less than 3.50x
The covenant testing for 2019 is to be normalised by excluding costs associated with the contingent consideration.
The Group leverage ratio is to be normalised for the acquisition.
12.6 EMPLOYEE ENTITLEMENTS
2019
$000
2018
$000
Leave provision8,3207,816
Payroll accruals4,6373,935
Total12,95711,751
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4647TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
13. NON-FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Group’s non-financial assets and liabilities, including specific information
about each type of non-financial asset and non-financial liability:
Property, plant and equipment (note 13.1)
Intangible assets (note 13.2)
Deferred tax balances (note 13.3)
Provisions and other liabilities (note 13.4)
Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill and software under development, are not subject to
amortisation and are tested annually for impairment. Assets that are subject to depreciation and amortisation are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to dispose and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that suffered an impairment
are reviewed for possible reversal of the impairment at each reporting date.
13.1. PROPERTY, PLANT AND EQUIPMENT
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation on assets is calculated using the diminishing value (DV) or straight-line (SL) method, as follows:
Leasehold improvements9.5% to 48%DV
Trucks 14 yearsSL
Trailers18 yearsSL
Plant and equipment 7.5% to 42%DV
Motor vehicles 18% to 36%DV
Office equipment 12% to 60%DV
Furniture and fittings9.5% to 60%DV
The assets’ useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised
within ‘Gains on disposal of assets’ in the statement of profit or loss & other comprehensive income.
12.7 RECOGNISED FAIR VALUE MEASUREMENTS
This section explains the judgement and estimates made in determining the fair values of the financial instruments that
are recognised and measured at fair value in the financial statements.
Level 1Level 2Level 3Total
$000$000$000$000
Recurring fair value measurements
At 30 June 2018
Contingent consideration--(2,192)(2,192)
At 30 June 2019
Contingent consideration--(225)(225)
The following table presents the changes in level 3 items for the periods ended 30 June 2018 and 30 June 2019:
Contingent
consideration
$000
Opening balance 1 July 2017(572)
Acquisitions(450)
(Losses) recognised in other expenses(1,170)
Closing balance 30 June 2018(2,192)
Amounts reclassified to payables3,500
(Losses) recognised in other expenses(1,533)
Closing balance 30 June 2019(225)
Valuation processes
The finance department of the Group performs the valuations of non-property items required for financial reporting
purposes including level 3 fair values. This team reports directly to the Chief Financial Officer (CFO) and the Risk
Assurance and Audit Committee (RAAC). Discussions of valuation processes and results are held between the CFO,
RAAC and the valuation team at least once every six months, in line with the Group’s half yearly reporting periods.
The main level 3 inputs used by the Group is derived and evaluated as follows:
Contingent consideration
The inputs to this valuation require judgement. The main level 3 inputs used by the Group was revenue forecasts for the
acquired entity.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4849TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
13.1. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land and
buildings
Motor
vehicles
Office
equipment
and F&F
Plant and
equipment
Work in
progress
Total
$000$000$000$000$000$000
At 1 July 2017
Cost or valuation380141,5574,07513,2452,100161,357
Accumulated depreciation(238)(71,509)(2,950)(7,077)-(81,774)
Net book amount14270,0481,1256,1682,10079,583
Year ended 30 June 2018
Additions252,69346177412,16216,115
Acquisition of subsidiaries-2,2901340-2,343
Disposals-(6,408)(50)(21)(6,348)(12,827)
Transfers-5,0074792(5,146)-
Depreciation charge(12)(9,010)(448)(1,128)-(10,598)
Closing net book amount15564,6201,1485,9252,76874,616
At 1 July 2018
Cost or valuation404139,6103,47614,0812,768160,339
Accumulated depreciation(249)(74,990)(2,328)(8,156)-(85,723)
Net book amount15564,6201,1485,9252,76874,616
Year ended 30 June 2019
Additions1993,2716441,40417,85923,377
Acquisition of subsidiaries-15,410233,746-19,179
Disposals-(4,797)(9)(161)(7,761)(12,728)
Transfers-9,0991971,919(12,065)(850)
Depreciation charge(10)(9,222)(531)(1,518)-(11,281)
Closing net book amount34478,3811,47211,31580192,313
13.2 INTANGIBLE ASSETS
a. Goodwill
Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree, and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the
Group’s share of the identifiable net assets acquired. Goodwill on acquisitions of subsidiaries is included in ‘Intangible
assets’ in the balance sheet. Goodwill on acquisitions of associates is included in ‘Investments in associates’ in the
balance sheet and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested
annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not
reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination on
which the goodwill arose.
b. Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised, using the diminishing value method at a rate of 48% and recognised in the
profit or loss. Costs associated with maintaining computer software programmes are recognised as an expense when
incurred.
c. Customer contracts and lists
Acquired customer contracts and lists are recognised at their fair value at the date of acquisition and are subsequently
amortised on a straight-line basis over six years. Amortisation expense is recognised in the profit or loss.
Goodwill
Computer
software
Customer listsTotal
$000$000$000$000
At 1 July 2017
Cost17,0501,9278,82427,801
Accum. amortisation and impairment(1,974)(1,501)(252)(3,727)
Net book amount15,0764268,57224,074
Year ended 30 June 2018
Additions-1,107-1,107
Acquisition of subsidiary102-1,3071,409
Amortisation/impairment charge(158)(236)(1,583)(1,977)
Closing net book amount 15,0201,2978,29624,613
At 1 July 2018
Cost15,0202,15110,13227,303
Accum. amortisation and impairment-(854)(1,836)(2,690)
Net book amount15,0201,2978,29624,613
Year ended 30 June 2019
Additions-775-775
Transfers-850-850
Amortisation/impairment charge-(676)(1,653)(2,329)
Closing net book amount15,0202,2466,64323,909
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5051TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
13.2 INTANGIBLE ASSETS (CONTINUED)
The Group has classified its goodwill into the following cash generating units (CGUs):
2019
$000
2018
$000
TIL Freighting Ltd1,0271,027
Alpha Customs Ltd776776
MOVE Logistics Ltd12,49212,492
TNL International Ltd170170
McAuley’s Transport Ltd555555
Total15,02015,020
The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations are
pre-tax cash flow projections based on Board approved financial budgets and a further four year forecast period using
conservative growth levels of less than 2% per annum.
An assumed terminal real growth rate of 2% (2018: 0%) has been used in the valuations. The Group has applied
discounted pre-tax cash flows using rates in the range of 11.4% - 18.2% to reflect the risks associated with each subsidiary
(2018: 11.5%).
The Group completed sensitivity testing on the CGU’s impairment models as follows: growth rate +/- 1.0%, terminal
growth rate +/- 1.0%, and discount rates +/- 1.0%. Sensitivity testing demonstrated no issues with impairment headroom
in all cases.
13.3. DEFERRED INCOME TAX
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle
the balances on a net basis.
Temporary differences arise from the following:
Deferred tax assets/(liabilities)
Opening
balance
Recognised in
profit or loss
Acquisition of
subsidiaries
Closing
balance
$000$000$000$000
2018
Property, plant and equipment(5,810)239(366)(5,937)
Provisions and accruals2,43432-2,466
Total deferred income tax(3,376)271(366)(3,471)
2019
Property, plant and equipment(5,937)(591)-(6,528)
Provisions and accruals2,466(40)-2,426
Total deferred income tax(3,471)(631)-(4,102)
13.4. PROVISIONS FOR OTHER LIABILITIES AND CHARGES
Provisions for make good obligations are recognised when the Group has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount
can be reliably estimated.
Provisions are measured at the present value of Management’s best estimate of the expenditure required to settle the
present obligations at the end of the reporting period.
Lease restoration
Contingent
consideration for
business combination
Total
$000$000$000
At 1 July 20177985721,370
Additional provisions-1,8451,845
Released to profit or loss(12)(225)(237)
At 30 June 20187862,1922,978
At 1 July 20187862,1922,978
Additional provisions511,5331,584
Released to profit or loss(70)(3,500)(3,570)
At 30 June 2019767225992
30 June 2019
Current-225225
Non-current767-767
a. Information about individual provisions and significant estimates
Make good lease provision
The Group is required to restore the leased premises of its depot and warehouses to their original condition at the end of
the respective lease terms. A provision has been recognised for the present value of the estimated expenditure required.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5253TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
14. SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax from the proceeds.
The assessed value of the share based payments and the shares issued in the public offer during the year ended 30 June
2018 was $1.50 per share. The value was independently determined as fair and reasonable by Grant Samuel & Associates
using the capitalisation of earnings approach. This was deemed the most appropriate method as the Group has relatively
stable cash flows and a predictable capital expenditure profile.
30 June 201930 June 2018
Shares$000Shares$000
Issued & paid-up capital - ordinary shares
Balance at the beginning of the period81,459,48328,10772,833,334 5,473
Share based payments:
- Deemed consideration for acquisition of Bethunes452,810 678
- Issued to Directors500,000 750
- Issued to advisors100,000 150
- Issued to Kern Group and associates 9,696
Total share based payments 1,052,810 11,274
Shares issued in public offer7,573,33911,360
Shares issued - dividend reinvestment plan2,221,4583,342--
Shares issued - business acquisition2,666,6674,000--
Balance at the end of the period86,347,60835,44981,459,483 28,107
DIVIDEND REINVESTMENT PLAN
Under the Dividend Reinvestment Plan (DRP), applied to the dividend paid on 28 September 2018, the Company issued
1,048,065 shares at $1.61 per share.
The issue price was determined, in accordance with the DRP, as the volume weighted average sale price (rounded to the
nearest cent) for all TIL Logistics Group shares sold through the NZX Main Board (excluding special trades) over the five
trading days immediately following 14 September 2018, less a 3% discount.
The plan also applied to the dividend paid on 27 March 2019 where the company issued 1,173,393 shares at $1.41 per
share.
The issue price was determined, in accordance with the DRP, as the volume weighted average sale price (rounded to the
nearest cent) for all TIL Logistics Group shares sold through the NZX Main Board (excluding special trades) over the five
trading days immediately following 15 March 2019, less a 3% discount.
15. CASH FLOW INFORMATION
15.1 CASH GENERATED FROM OPERATIONS
2019
$000
2018
$000
Reported surplus / (loss) after tax4,364(11,663)
Non-cash items
Depreciation expense11,28110,598
Amortisation expense2,3291,819
Bad debts105121
Amortisation of bank fees272145
Share based payments & IPO costs-17,714
(Profit)/loss on disposal of property, plant & equipment(75)382
Impairment-159
Foreign exchange losses on operating activities922
18,28519,297
Impact of changes in working capital
Tax receivable / deferred tax740(854)
Trade and other receivables(5,183)(7,086)
Creditors and accruals/employee entitlements6,6023,781
Creditors relating to purchase of PPE(528)(2,941)
Inventories(22)(51)
19,89412,146
Items classified as investing or financing activities
Profit on disposal of property, plant and equipment(873)(1,921)
Loss for associates361127
Net cash flow from operating activities19,38210,352
15.2 NET DEBT RECONCILIATION
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
2019
$000
2018
$000
Cash and cash equivalents6,3892,881
Borrowings - repayable within one year (including overdraft)(5,185)(3,432)
Borrowings - repayable after one year(79,132)(70,447)
Net debt(77,928)(70,998)
Cash and liquid investments6,3892,881
Gross debt - fixed interest rates(101)(133)
Gross debt - variable interest rates(84,216)(73,746)
Net debt(77,928)(70,998)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5455TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
15.2 NET DEBT RECONCILIATION (CONTINUED)
Cash/bank
overdraft
$000
Borrowing due
within 1 year
$000
Borrowing due
after 1 year
$000
Total
$000
Net debt as at 1 July 20172,966(32)(133)2,801
Cash flows(85)(2,900)(70,668)(73,653)
Other non-cash movements-(500)354(146)
Net debt as at 30 June 20182,881(3,432)(70,447)(70,998)
Cash flows3,508(1,928)(8,839)(7,259)
Other non-cash movement-175154329
Net debt as at 30 June 20196,389(5,185)(79,132)(77,928)
16. INTEREST IN OTHER ENTITIES
16.1 MATERIAL SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilites and results of the following subsidiaries in
accordance with the accounting policy described in note 2.1. All subsidiaries are incorporated in New Zealand.
All subsidiaries results up to 30 June 2019 have been incorporated in the consolidated financial statements.
Shareholding
30 June 2019
Shareholding
30 June 2018
Balance
date
Principal activity
TIL Freighting Ltd100%100%30 JuneTransport operator
Pacific Fuel Haul Ltd100%100%30 JuneTransport operator
Alpha Custom Services Ltd60%60%30 JuneInternational freight forwarder
Pacific Asset Leasing Ltd100%100%30 JuneAsset leasing
Hookers Shipping Ltd100%100%30 JuneShipping agent and logistics
McAuley’s Transport Ltd100%100%30 JuneTransport operator
MOVE Logistics Ltd100%100%30 JuneWarehousing and distribution
Southern Fleet Leasing Ltd100%100%30 JuneAsset leasing
NZL Group Ltd100%100%30 JuneWarehousing and distribution
Multi-Trans HeavyHaul Ltd
1
-100%30 JuneTransport operator
TNL International Ltd50%50%30 JuneInternational freight forwarder
Appian Transport Ltd100%100%30 JuneNon trading
Global Logistics Group Ltd100%100%30 JuneNon trading
Specialist Lifting and
Transport Group Ltd
2
100%100%30 JuneHeavy Haulage
TNL Logistics Ltd100%100%30 JuneNon trading
Transport Nelson Ltd100%100%30 JuneNon trading
Transport Investments Ltd100%100%30 JuneCorporate services
Pacific Liquid Logistics Ltd100%-30 JuneNon trading
1
This company was amalgamated into Specialist Lifting and Transport Group Ltd on 17 April 2019.
2
This company was previously named TNL Freighting Ltd and was renamed on 17 October 2018 when we acquired the heavy haul assets (refer note 17)
16.2 INTERESTS IN ASSOCIATES
Set out below are the associates of the Group as at 30 June 2019 which, in the opinion of the Directors, are material to
the Group. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by
the Group. The country of incorporation or registration is also their principal place of business, and the proportion of
ownership interest is the same as the proportion of voting rights held.
Place of
business/
country of
incorporation
% of ownership
interest
Nature of
relationship
Measurement
method
Investment in
associates
20192018
2019
$000
2018
$000
UNITE Logistics LimitedNew Zealand50%50%AssociateEquity method876899
ATL LimitedNew Zealand50%50%AssociateEquity method605962
Emerald Truck Services LimitedNew Zealand33.3%0%AssociateEquity method193-
Immaterial associates1818
Total1,6921,879
Investment in associates
2019
$000
2018
$000
Beginning of the year1,8792,144
Dividends received-(143)
Acquisition174-
Amalgamation-(40)
Impairment of investment(165)(165)
Earnings from associates(196)83
Total1,6921,879
The Group’s results of its principal associates, all of which are unlisted, and total assets (including goodwill) and liabilities,
are as follows. The Group equity accounts for these associates based on management reporting for the year end to 30
June (the Group’s balance date).
AssetsLiabilitiesRevenueProfit
Interest
held
Balance
date
$000$000$000$000%
2018
UNITE Logistics Limited
3,0942,4736,09815350%31 March
ATL Limited
6,2403,7638,4292350%31 August
Emerald Truck Services Limited
------
Total
9,3346,23614,527176
2019
UNITE Logistics Limited
3,2862,3128,13228750%
31 March
ATL Limited
5,6903,9268,171(714)50%
31 August
Emerald Truck Services Limited
1,4107212,017 6833.3%
31 March
Total
10,3866,95918,320(359)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5657TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
17. BUSINESS COMBINATIONS
The Group acquired on 31 October 2018 the assets of three businesses for a total cash consideration of $15m and share
allocation of $4m. The acquisition was made by a 100% owned subsidiary of the Group, Specialist Lifting and Transport
Limited (previously named TNL Freighting Limited). The acquisition allowed the Group to become the leader in the heavy
haulage industry.
The table below summarises the consideration paid by the Group and the fair value of assets acquired and liabilities
assumed:
$000
Purchase consideration (shares)4,000
Purchase consideration (cash) 15,000
Total consideration 19,000
Fair value of assets acquired and liabilities assumed
Property, plant and equipment 19,179
Employee entitlements(179)
There were no contingent assets or liabilities acquired as part of the transaction.
The acquired business contributed revenues of $11,753,133 and a profit before tax of $1,421,454 to the Group for
the period 1 November 2018 to 30 June 2019. If the acquisition had occurred on 1 July 2018, the revenue and profit
contributed by the acquired businesses for the 12 months ended 30 June 2019 would have been $17,626,699 and
$2,132,181 respectively.
The Group also acquired a 33% equity interest in the business activity and assets of Emerald Truck Services Limited for
$174,000. This acquisition was a joint venture with McAuley’s Transport and two other parties.
18. CONTINGENCIES
The Group has bank guarantees of $7,837,000 as at 30 June 2019 (2018: $5,730,000).
19. COMMITMENTS
a. Capital commitments
Capital expenditure contracted for at the reporting date but not yet incurred is as follows:
2019
$000
2018
$000
Trucks and trailers
7,367
11,235
Other assets
143
-
Total
7,510
11,235
b. Operating lease commitments
Operating leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to profit or loss on a straight-line basis over the period of the lease.
The Group leases various property, plant and equipment under non-cancellable operating lease agreements. The
property lease terms are between 1 and 15 years, and the majority of lease agreements are renewable at the end of the
lease period at market rate.
19. COMMITMENTS (CONTINUED)
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
2019
$000
2018
$000
Within one year
29,949
25,768
Between one and two years
27,993
20,627
Between two and five years
71,362
47,612
More than five years
152,806
63,808
Total282,110157,815
Sub-lease payments2019
$000
2018
$000
Future minimum lease payments expected to be recovered in relation
to non-cancellable sub-leases of operating leases
2,4163,110
20. ACCOUNTING STANDARDS
Except as described below, the accounting policies applied are consistent with those of the annual financial statements
for the period ended 30 June 2018.
There were two new standards applied during the period. This note explains the impact of the adoption of NZ IFRS 9
Financial Instruments and NZ IFRS 15 Revenue from Contracts with Customers on the Group’s financial statements and
discloses the new accounting policies that have been applied from 1 July 2018. It also describes the expected impact of
the new standards that are not yet effective.
IMPACT ON THE FINANCIAL STATEMENTS
The Group has elected to adopt the new accounting standards with cumulative transition adjustments being recognised
in the opening equity balance at transaction date. As a result comparative information has not been impacted and has
not been restated, in line with the permitted transitional provisions.
The following tables show the adjustments recognised for adoption of the new standards.
Equity reconciliation$000
Closing accumulated losses at 30 June 2018(1,295)
NZ IFRS 9: Increase provision for trade receivables(499)
NZ IFRS 15: Deferral of revenue on unfulfilled performance obligations(571)
Opening accumulated losses at 1 July 2018(2,365)
NZ IFRS 9 FINANCIAL INSTRUMENTS - IMPACT OF ADOPTION
This standard replaces NZ IAS 39 and addresses the classification, measurement and recognition of financial assets and
liabilities, introduces new rules for hedge accounting (not currently relevant to the Group) and a new impairment model
for financial assets.
The Group has adopted the new standard on 1 July 2018 and notes the following impacts of the new standard.
Adoption of NZ IFRS 9 has resulted in the reclassification of cash and cash equivalents, trade receivables and advances
to associates from loans and receivables under NZ IAS 39 to being classified as measured at amortised cost under NZ
IFRS 9. Management has assessed there is no change to the measurement basis of the financial assets as a result of the
reclassification.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5859TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
20. ACCOUNTING STANDARDS (CONTINUED)
NZ IFRS 9 replaces the ‘incurred loss’ model in NZ IAS 39 with an ‘expected credit loss’ (ECL) model. The expected
credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at
each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for
a credit event to have occurred before credit losses are recognised. The new impairment model applies to the Group in
relation to financial assets classified at amortised cost, being the Group’s trade receivables and advances to associates.
For the current period, the Group has applied the standard’s simplified approach and has calculated ECLs for trade
receivables and advances to associates that are exposed to credit losses based on a lifetime of expected credit losses.
The Group has established a provisions matrix that is based on the Group’s historical credit loss experience adjusted
for forward looking factors specific to these balances and the economic environment. To measure the expected credit
losses, trade receivables and advances to associates that are exposed to credit losses have been grouped based on
shared credit risk characteristics and the days past due.
Based on the Group’s assessment it has assessed there to be an impairment on its trade receivables of $499,000 which
has been adjusted through retained earnings. The loss allowances for trade receivables as at 30 June 2018 reconcile to
the opening loss allowances on 1 July 2018 as follows:
Trade
Receivables
$000
At 30 June 2018 - calculated under NZ IAS 39351
Amounts restated through opening retained earnings499
Opening loss allowance as at 1 July 2018 - calculated under NZ IFRS 9850
There is no impact on the Group’s accounting for financial liabilities in the current period.
ECL in respect to advances to associates has been assessed as immaterial.
NZ IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS – IMPACT OF ADOPTION
The Group has adopted NZ IFRS 15 Revenue from Contracts with Customers from 1 July 2018 which resulted in changes
in accounting policies and adjustments to the amounts recognised in the financial statements. In accordance with the
transition provisions in NZ IFRS 15, the Group has adopted the new rules using the modified retrospective option and has
not restated comparatives for the 2018 financial year. In summary, the following adjustments were made to the amounts
recognised in the accumulated losses at the date of initial application (1 July 2018):
NZ IAS 18 carrying
amount
30 June 2018
Re-measurements
restated through
accumulated losses
NZ IFRS 15 carrying
amount
1 July 2018
$000$000$000
Deferred revenue-571571
Change in timing of revenue recognition
Revenue from the freighting services provided by the Group was previously recognised when the goods were collected.
The new standard requires that revenue is only recognised over time as the delivery is being performed. This has resulted
in an adjustment for revenue relating to the freighting jobs that were not delivered as at 30 June 2018.
20. ACCOUNTING STANDARDS (CONTINUED)
NZ IFRS 16 LEASES (EFFECTIVE FOR REPORTING PERIOD COMMENCING 1 JULY 2019)
This standard replaces the current guidance in NZ IAS 17. Under NZ IFRS 16, a contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Under NZ IAS 17, a lessee was required to make a distinction between a finance lease (on balance sheet) and an operating
lease (off balance sheet). NZ IFRS 16 now requires a lessee to recognise a lease liability reflecting future lease payments
and a ‘right-of-use’ (ROU) asset for virtually all lease contracts. Included is an optional exemption for lessees in respect
of certain short-term leases and leases of low value assets.
From the effective date of adoption, the income statement will also be impacted by the removal of operating lease
expenses, the recognition of an interest expense applicable to the future lease payment obligations and the recognition
of a depreciation expense in respect of the ROU asset.
This standard will change the accounting for the Group’s operating leases. As at the reporting date, the Group had non-
cancellable operating lease commitments of $282 million (refer Note 19). Upon adoption, NZ IFRS 16 will have a material
impact on a number of elements of the Group’s balance sheet and income statement, but no material impact on the
Group’s statement of cash flows.
Through the use of a technology solution designed for the management of leases, the Group has developed a model to
calculate the impact of their current operating leases under NZ IFRS 16 as at 1 July 2019, being the date of adoption. The
model requires management to make some key judgements including:
incremental borrowing rate (IBR) used to discount the ROU assets and the future lease payment obligations;
lease terms, including any rights of renewal expected to be exercised;
application of practical expedients and recognition exemptions allowed by the new standard, including in respect
low value assets and short-term leases exemptions, of which none were applied for the purposes of the initial
assessment.
The new standard allows a choice of transition methods. Management has determined that the most appropriate
approach for the Group at this point in time, will be to use the simplified modified retrospective transition method. The
Group has calculated the initial ROU asset as the equal amount of the initial lease liability recognised (which is calculated
as the present value of the remaining lease payments from the date of adoption). Using this transition method will mean
a neutral net asset outcome upon adoption of the new standard. The Group, at this stage, does not intend to restate
comparative amounts for the financial year prior to the first year of adoption.
The estimated potential impact on the balance sheet is estimated to be between $232 to $252 million increase in both
assets and liabilities equally, following the recognition of the ROU asset and the discounted future lease obligations,
respectively.
The financial impact on the income statement for the year of adoption is estimated to be an approximate reduction in net
profit before tax of $5.3 to $5.8 million. The following approximate changes to the current treatment of operating leases
in the financial statements have been estimated for the year the new standard is adopted:
a $29.2 to $29.7 million decrease in operating lease rental expenses (removed);
a $25.5 to $26.0 million increase in depreciation (relating to ROU assets); and
a $9.0 to $9.5 million increase in interest expense (relating to lease liability finance costs).
There will be no changes applicable to the Group’s cash flows as a result of adopting the new standard, as operating
lease payments will continue to be paid as usual. The adjustments above are only for financial reporting purposes.
The estimated potential financial adjustments above are expected to change at the time of adopting the new standard on
1 July 2019 for the following reasons:
finalisation of managements judgements and subsequent movements in the incremental borrowing rate (interest rates);
new lease contracts entered into by the Group;
any changes to existing lease contracts; and
change in managements judgement to exercise rights of renewals under lease agreement.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6061TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
21. RELATED-PARTY TRANSACTIONS
21.1 TRANSACTIONS WITH KEY MANAGEMENT
a. Dividend reinvestment plan
The below table shows the shares that were issued to key management personnel under the dividend reinvestment plan
for the dividend paid on 28 September 2018 and 27 March 2019 (refer note 14).
# SharesAmount
$000
Dividend reinvestment plan - Directors314,490452
Dividend reinvestment plan - Key management employees5,0118
b. Key Management Compensation
Key management includes Directors, the MD, the CEO and his direct reports:
2019
$000
2018
$000
Salaries and other short term employee benefits
1
3,2131,974
Directors Fees416321
Share based payments - Directors-750
Share based payments - Kern Group Ltd and associates-9,696
* 2019 includes the full year impact of the new Group CEO role and the addition of several new executive roles.
21.2 TRANSACTIONS WITH OTHER RELATED PARTIES
The following transactions occurred with related parties:
2019
$000
2018
$000
Sales and purchases of goods and services
Sales of services to associates511287
Purchases of services from associates3,2602,632
Purchases from entities controlled by key management personnel
1
991,550
1
The Group leased properties from entities that are controlled by members of the Group’s key management personnel. The balance for 2018
includes rental payments made to carved out property subsidiaries prior to the reverse listing. Only $82,000 relates to ongoing rental payments
with key management personnel.
2019
$000
2018
$000
Outstanding balances arising from sales and purchases of services
Trade receivables 28536
Trade payables762496
2019
$000
2018
$000
Advances to/from related parties
ATL Limited275275
UNITE Logistics Limited217217
TNL International Australia Pty Limited3111
Eamonn Stephen Farrell86-
22. EVENTS AFTER THE REPORTING DATE
Subsequent to year end the Board of Directors have approved payment of the dividend recommended (refer note 10).
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION
The Group’s Investment Statement and Prospectus dated 17 November 2017 included prospective financial statements
from 1 July 2017 to 30 June 2019. Below is the actual year’s trading result covering the period 1 July 2018 to 30 June 2019,
which is compared to the prospective financial statements.
PROSPECTIVE CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME
YEAR ENDED 30 JUNE 2019
Explanation
of material
movements
ACTUAL
30 JUNE 2019
$000
PROSPECTIVE
30 JUNE 2019
$000
Revenue a.355,139332,966
Gains on disposal of assets b.873-
Dividends received 215-
Rent received / other incomeb.4,3742,578
Total Income 360,601335,544
Operating expensesc.(332,600)(304,388)
Changes in contingent considerationd.(2,600)-
Depreciation / amortisation expenses e.(13,610)(12,286)
Total Operating Expenses (348,810)(316,674)
Finance costs - interest on borrowing e.(4,156)(3,562)
Interest income on short term deposit116157
Operating surplus before income tax 7,75115,465
Share of (loss) / profit of associates (361)228
Profit Before Income Tax 7,39015,693
Income tax expense (3,026)(4,369)
PROFIT FOR THE PERIOD FROM CONTINUING
OPERATIONS
4,36411,324
Profit attributable to:
Owners of the company4,00411,105
Non-controlling interests360219
4,36411,324
Other comprehensive income:
Comprehensive Income for the Period, Net of Tax --
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD,
NET OF TAX
4,36411,324
Adjusted EBITDA28,00131,157
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6263TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
PROSPECTIVE CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2019
Explanation
of material
movements
ACTUAL
30 JUNE 2019
$000
PROSPECTIVE
30 JUNE 2019
$000
ASSETS
Current Assets
Cash and cash equivalents 6,3897,859
Inventories 301227
Trade and other receivables f.51,03741,270
Tax receivable160-
Advances to associates 581477
Total Current Assets 58,46849,833
Non-Current Assets
Property, plant and equipment f.92,31374,166
Intangible assets 23,90922,827
Investments in associates 1,6922,584
Total Non-Current Assets 117,91499,577
TOTAL ASSETS 176,382149,410
EQUITY
Share capital35,44930,223
(Accumulated losses) / Retained earnings (2,364)5,367
Equity attributable to owners of the parent 33,08535,590
Non-controlling interest in equity1,2371,247
TOTAL EQUITY 34,32236,837
LIABILITIES
Current Liabilities
Trade and other payables f.39,34834,997
Deferred revenue344-
Borrowings g.5,185-
Employee entitlements h.12,95710,012
Provision for other liabilities and charges225-
Tax payable -375
Total Current Liabilities 58,05945,384
Non-Current Liabilities
Borrowings g.79,13263,801
Deferred income tax liability 4,1023,388
Provisions for other liabilities and charges 767-
Total Non-Current Liabilities84,00167,189
TOTAL LIABILITIES 142,060112,573
TOTAL EQUITY & LIABILITIES 176,382149,410
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
PROSPECTIVE CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEAR ENDED 30 JUNE 2019
Explanation
of material
movements
ACTUAL
30 JUNE 2019
$000
PROSPECTIVE
30 JUNE 2019
$000
Cash flows from operating activities
Receipts from customers a.354,330334,517
Interest received 116157
Dividends received 153-
Payments to suppliers and employees c.(329,046)(303,580)
Interest paid (3,885)(3,261)
Income tax paid (2,286)(4,296)
Net cash generated from operating activities 19,38223,537
Cash flows used in investing activities
Purchase of business, net of cash acquiredg.(15,000)-
Net purchase of property, plant and equipmenti.(9,172)(7,492)
Purchases of intangible assets(775)(211)
Advances to associates (152)-
Net cash used in investing activities (25,099)(7,703)
Cash flows from financing activities
Repayment of borrowingsg.(5,834)(12,000)
Proceeds from borrowingsg.16,000-
Dividends paid to shareholders / non-controlling interestsj.(941)(6,010)
Net cash flow from financing activities9,225(18,010)
Net increase in cash and cash equivalents3,508(2,176)
Cash and cash equivalents at beginning of period 2,88110,035
Cash and cash equivalents at end of period6,3897,859
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6465TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
23. COMPARISON TO PROSPECTIVE FINANCIAL INFORMATION (CONTINUED)
EXPLANATIONS OF VARIANCES
a. The current year includes sales relating to the acquisition of the Specialist Lifting and Transport Group (refer note 17)
which was not in the Prospective Financial Information (PFI). Warehousing and storage revenue was also higher than PFI
levels due to the opening of several new facilities.
b. There were no gains on disposals of assets anticipated in the PFI. The Group entered into several sale and leaseback
transactions during the year relating to fleet. The PFI also did not include any subleasing of properties relating to NZL
Group and MOVE Logistics.
c. Operating costs were higher than anticipated due to the impact of the Specialist Lifting and Transport Group
acquisition (refer note 17). The Group also had higher vehicle lease costs above PFI level due to more fleet being leased
rather than purchased. Direct wages and occupancy costs were also higher than anticipated levels due to the new
warehousing facilities not known at the time of the PFI. The Group has also developed its senior leadership team since
listing and several of these roles were not included in the PFI.
d. There was no provision for additional contingent consideration for the acquisition of MOVE Logistics and Southern
Fleet Leasing included in the PFI. The acquired businesses have traded above expected levels which resulted in an
additional amount payable.
e. Depreciation and interest expenses are higher due to the acquisition of the Specialist Lifting and Transport Group
(refer note 17).
f. Trade receivables, trade payables and property plant and equipment are higher than forecast levels due to the
acquisition noted above. Trade receivables has also been impacted by several large customers who have contracted
extended payment terms not planned in the PFI. There were also several material customers who did not pay their
accounts due at the end of June 2019 which, still remain collectible.
g. Borrowings are higher than levels in PFI due to additional funding required to purchase Specialist Lifting and Transport
Group (refer note 17). Due to the lower levels of profit achieved when compared to the PFI the cash available to reduce
debt was impacted in this financial year.
h. Employee entitlements are above PFI levels due to the acquisition of the Specialist Lifting and Transport Group (refer
note 17) and also the timing of payroll accruals/payments not accounted for in the PFI.
i. Higher levels of capital expenditure relating to the fit out of the new warehouses were not accounted for in the PFI.
j. The Company has been operating a Dividend Reinvestment Plan which has a high participation level which was not
included in the PFI.
24. FURTHER INFORMATION ON BASIS OF PREPARATION FOR COMPARATIVE
FINANCIAL STATEMENTS
Carve-out and reverse listing
To facilitate a listing of the transport and logistics business of Transport Investments Limited (subsequently renamed
Bowker Holdings 99 Limited), “the Business”, together with the shares in a related entity, Global Logistics Limited, were
acquired by TIL Logistics Group Limited (formerly Bethunes Investments Limited), a listed non-trading company. The
acquisition was satisfied by TIL Logistics Group Limited issuing shares and paying cash to the former owners of the
Business.
As a result of the transaction, the former owners of the Business obtained control of TIL Logistics Group Limited. Due
to this, Management considered it appropriate to account for the transaction as a ‘reverse acquisition’. The ‘carved out’
Business of Transport Investments Limited (including Global Logistics Limited) was identified as the accounting acquirer,
and TIL Logistics Group Limited, the listed non-trading entity, was identified as the accounting acquiree.
Consequently, the consolidated financial statements, although under the name of TIL Logistics Group Limited, the legal
parent, represent a continuation of the carved out business operations of Transport Investments Limited. The carved out
Business of Transport Investments Limited, being the accounting acquirer, is deemed to have issued shares to obtain
control of the acquiree, TIL Logistics Group Limited. However, because TIL Logistics Group Limited, the accounting
acquiree, is not a business, the transaction is not a business combination within the scope of NZ IFRS 3. The difference
between the fair value of the shares deemed to have been issued to obtain control of TIL Logistics Group Limited, and
the fair value of TIL Logistics Group Limited’s identifiable net assets has been recognised as an equity-settled share
based payment for services received in the form of a stock exchange listing.
The comparative financial statements reflect the results of the carved out business operations of Transport Investments
Limited for the period from 1 July 2017 to 6 December 2017 and the results of the TIL Logistics Group Limited group
(which includes the transport and logistics business of Transport Investments Limited acquired) from 7 December 2017
to 30 June 2018. The equity of the ‘carved out’ Business prior to the listing transaction has been presented as ‘Invested
capital’ as the Business was not legally part of the TIL Logistics Group prior to this date. Upon listing, invested capital
has been reallocated to share capital and other reserves, being retained earnings only. The amount recognised as
share capital uses the share capital of the previous Transport Investments Limited group as a proxy, with the balance
recognised within retained earnings.
The carved out financial information has been prepared on a basis that reflects the business and assets of Transport
Investments Limited legally acquired by TIL Logistics Group Limited on 6 December 2017. Specifically, it excludes the
results and financial position of a subsidiary of Transport Investments Limited not acquired as part of the transaction. It
also excludes debt of Transport Investments Limited that was not part of the liabilities acquired, together with interest
thereon, such that the carved out results and financial position of Transport Investments Limited reflect a debt-free
business. This is not reflective of the position following the transaction, which involved TIL Logistics Group Limited
entering into a new banking facility to fund the payment of cash consideration to the former owners of the Business
acquired, together with transaction costs and the working capital requirements of the Group.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6667TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of TIL Logistics Group Limited
We have audited the consolidated financial statements which comprise:
the consolidated balance sheet as at 30 June 2019;
the consolidated statement of profit or loss and other comprehensive income for the year then
ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include a summary of significant
accounting policies.
Our opinion
In our opinion, the accompanying consolidated financial statements of TIL Logistics Group Limited
(the Company), including its subsidiaries (the Group), present fairly, in all material respects, the
financial position of the Group as at 30 June 2019, its financial performance and its cash flows for the
year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in theAuditor’s responsibilities for the audit of the consolidated financial
statementssection of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners(PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’Code of Ethics for
Professional Accountants(IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of remuneration benchmarking,
executive compensation services and financial due diligence for business acquisitions. The provision of
these other services has not impaired our independence as auditor of the Group.
PwC42
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the
consolidated financial statements are free from material misstatement.
Overall Group materiality: $694,000, which represents approximately 2.5%
of earnings before interest, tax, depreciation and amortisation, adjusted for
expenses recognised in respect of contingent consideration on business
combinations.
We chose earnings before interest, tax, depreciation and amortisation,
adjusted for the previously mentioned transaction because, in our view, it is
the most appropriate benchmark to assess the performance of the Group for
the period.
We have determined that there is one key audit matter:
Carrying value of Move Logistics Goodwill.
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the consolidated financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the consolidated financial
statements and our application of materiality. As in all of our audits, we also addressed the risk of
management override of internal controls including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
INDEPENDENT AUDITOR’S REPORTINDEPENDENT AUDITOR’S REPORT
6869TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
PwC43
Key audit matterHow our audit addressed the key audit matter
Carrying value of Move Logistics
Goodwill
The Group has recognised $15 million of
goodwill on its balance sheet. Of this
balance, $12.5 million relates to goodwill
arising on the Group’s acquisition of Move
Logistics Limited (Move Logistics).
Due to the significance of the balance and
the judgement required in determining
the value-in-use (VIU) of Move Logistics
we have determined this area to be a key
audit matter.
Annually, the Group is required to assess
whether goodwill is impaired by
comparing the carrying value against the
recoverable amount. To meet this
requirement the Group has prepared a
discounted cash flow valuation on a VIU
basis for Move Logistics.
Management’s VIU calculation uses Board
approved budgets for FY20, an estimate of
growth across the remaining four year
forecast period, and a terminal growth
rate of 2%. Management then discount
these forecast cash flows to present day.
Management exercise significant
judgement in undertaking these VIU
calculations, specifically with respect to
determining the forecast cash flows,
including forecast capital requirements,
terminal growth rate, and discount rate.
Management concluded that the carrying
value of the Move Logistics goodwill was
not impaired.
Disclosure of the Group’s impairment
assessment of Move Logistics is contained
in note 13.2.
Calculating value-in-use (VIU)
To assess the accuracy of the VIU calculation used by
management we:
tested the mathematical accuracy of the valuation
model, and
used our valuation specialist to review the
structure of the model and the methodology used
within the calculation.
Assessing the reasonableness of significant
assumptions used in the VIU model
We performed the following procedures to assess the
reasonableness of the forecast cash flows assumptions
used by management to calculate VIU:
challenged management on key assumptions
including sales growth and terminal growth rate,
agreed cash flows to the Board approved budget,
considered the reasonableness of the Group’s
discount rate by comparison to a discount rate
developed by our internal valuation expert,
assessed the Group’s forecasting accuracy by
comparing historical cash flow forecasts to actual
results,
performed a sensitivity analysis over key
assumptions to assess the impact of reasonably
possible changes, and
reviewed the consolidated financial statements to
ensure appropriate identification and disclosure of
key assumptions.
Because of the subjectivity involved in determining
VIU, there is a range of values, which can be
considered reasonable when evaluating the carrying
value of the goodwill. Based on the above procedures
there were no matters to report.
PwC44
Information other than the consolidated financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the consolidated financial
statements does not cover the other information included in the annual report and we do not and will
not express any form of assurance conclusion on the other information.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard, except that not all other information was available to us at the date of our signing.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1/
This description forms part of our auditor’s report.
INDEPENDENT AUDITOR’S REPORTINDEPENDENT AUDITOR’S REPORT
71TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 201970TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
PwC45
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Nathan Wylie.
For and on behalf of:
Chartered Accountants
22 August 2019
Auckland
ADDITIONAL STATUTORY INFORMATION
ADDITIONAL STATUTORY
INFORMATION
DIRECTORS
The following persons were Directors of TIL Logistics as at 30 June 2019:
Director
Trevor JanesIndependent Chairman
Lorraine WittenIndependent Director
James RamsayExecutive Director
Danny ChanIndependent Director
The following persons were Directors of TIL Logistics and ceased to hold office during the year ended
30 June 2019:
DirectorDate Ceased
Greg Kern18 April 2019
INDEPENDENT AUDITOR’S REPORT
7273TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
ADDITIONAL STATUTORY INFORMATION
GENERAL DISCLOSURE OF INTERESTS BY DIRECTORS
In accordance with Section 140(2) of the Companies Act 1993, and the Financial Markets Conducts Act 2013, the
Company maintains an interests register in which all relevant transactions and matters involving Directors are recorded.
The Directors named below have made a general disclosure of interests current to 30 June 2019.
Director Name of Business or Entity Nature of Activities
of that Business or Entity
Nature and Extent
of Your Interest
Trevor Janes Abano Healthcare Ltd Dental Provider Director and Chair of
RAAC Committee
NZ Markets Disciplinary Tribunal NZX Regulator Member
Postal Network Access CommitteePostal Regulation Member
Tokelau International Investment Fund Investment Chair
Lorraine Witten Rakon LimitedGlobal Technology Business Director, Shareholder and
Chair of Audit and Risk
vWork LimitedSoftware for Mobile Workforce Chair and Shareholder
Simply Security Security Guard Services Chair and Shareholder
Corrections DepartmentNZ Prison ServiceAdvisor to Audit & Risk
Horizon Energy GroupEnergy Distribution CompanyDirector and Chair of
Audit and Risk
Danny Chan Farmers Mutual Group InsuranceDirector
SimTutor Limitede-learningDirector/Shareholder
Superthriller Jet Sprint LimitedEntertainmentShareholder
Fastcom LimitedIT ServicesShareholder
iMonitor Intellectual Property Ltd Temperature MonitoringShareholder
The Digital Café LimitedDigital Promotion/MarketingShareholder
QEX Logistics LimitedLogisticsDirector
Flowerzone International LtdFlower ExporterDirector/Shareholder
Abano Healthcare LtdDental ProviderDirector
Marlborough Wine Estates Group LtdWine ManufacturerDirector
Auckland Tourism Events and
Economic Development Ltd
Economic DevelopmentDirector
NZ Markets Disciplinary TribunalNZX RegulatorMember
Orient Pacific Management Limited Financial ServicesDirector/Shareholder
James RamsayHooker Bros Investments LtdInvestmentDirector/Shareholder
Bowker Holdings 99 LtdInvestmentDirector
Hooker Bros (1989) LimitedInvestmentDirector/Shareholder
Hooker Bros (2019) LimitedInvestmentDirector/Shareholder
No entries were made in the interests register of any subsidiary companies during the year ended 30 June 2019.
ADDITIONAL STATUTORY INFORMATION
DIRECTORS SHARE DEALINGS
In accordance with the Companies Act 1993 and the Financial Markets Conduct Act 2013, the Board has received
disclosures from the Directors named below of acquisitions or dispositions of relevant interest (as defined in the Financial
Markets Conduct Act 2013) in the Company between 1 July 2018 and 30 June 2019, and details of those dealings were
entered in the Company’s interests register.
Director TransactionNumber of
Shares
Price per
Share
Date
Trevor Janes Dividend Reinvestment Plan 20183,988$1.6128 September 2018
Trevor JanesDividend Reinvestment Plan 2019 Interim Dividend5,015$1.4127 March 2019
Trevor JanesOff Market Acquisition250,000$1.2018 April 2019
Trevor Janes
1
Dividend Reinvestment Plan 20189,523$1.6128 September 2018
Trevor Janes
1
Dividend Reinvestment Plan 2019 Interim Dividend11,989$1.4127 March 2019
Danny ChanDividend Reinvestment Plan 201810,191$1.6128 September 2018
Danny ChanDividend Reinvestment Plan 2019 Interim Dividend12,816$1.4127 March 2019
Danny ChanOff Market Acquisition465.696$1.2018 April 2019
Lorraine WittenDividend Reinvestment Plan 20181,329$1.6128 September 2018
Lorraine WittenDividend Reinvestment Plan 2019 Interim Dividend1,671$1.4127 March 2019
James Ramsay
2a
Dividend Reinvestment Plan 20188,862$1.6128 September 2018
James Ramsay
2b
Dividend Reinvestment Plan 20188,862$1.6128 September 2018
James Ramsay
5
Off Market Disposal2,468,900$1.5010 October 2018
James Ramsay
5
Dividend Reinvestment Plan 2018880,757$1.6128 October 2018
James Ramsay
5
Off Market Disposal of Shares150,000$1.5021 November 2018
James Ramsay
3a
Acquisition by in specie distribution1,078,628$1.6130 November 2018
James Ramsay
3a
Acquisition by in specie distribution1,078,628$1.6130 November 2018
James Ramsay
4
In specie distribution55,262,522$1.6130 November 2018
James Ramsay
3b
Acquisition by in specie distribution5,905,85631 January 2019
James Ramsay
3b
Acquisition by in specie distribution5,146,64931 January 2019
James Ramsay
2a
Dividend Reinvestment Plan 2019 Interim Dividend120,121$1.4127 March 2019
James Ramsay
2b
Dividend Reinvestment Plan 2019 Interim Dividend120,121$1.4127 March 2019
James RamsayOff Market Acquisition200,000$1.2018 April 2019
Gregory Kern
6a
Dividend Reinvestment Plan 201862,824$1.6128 September 2018
Gregory Kern
6a
Off Market Disposal1,000,000$1.5028 September 2018
Gregory Kern
6a
Off Market Disposal1,000,000$1.5010 October 2018
Gregory Kern
6a
Off Market Disposal150,000$1.5021 November 2018
Gregory Kern
6a
Dividend Reinvestment Plan 2019 Interim Dividend61,589$1.4127 March 2019
Gregory Kern
6b
Dividend Reinvestment Plan 2019 Interim Dividend2,817$1.4127 March 2019
Gregory Kern
6c
Dividend Reinvestment Plan 2019 Interim Dividend2,267$1.4127 March 2019
Gregory Kern
6a
Off Market Disposal4,148,232$1.2018 April 2019
Gregory Kern
6b
Off Market Disposal189,754$1.2018 April 2019
Gregory Kern
6c
Off Market Disposal152,710$1.2018 April 2019
7475TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
ADDITIONAL STATUTORY INFORMATION
Notes to Director Share Dealings
1
Shares held by Selenium Corporation Limited - Trevor Janes has a relevant interest in shares in TIL Logistics Limited
held by Selenium Corporation Limited.
2a
Shares held by James Ramsay, Nerida Joy Ramsay & RMY Trustees (2010) Limited as trustees of the James Ramsay
Family Trust.
2b
Shares held by James Ramsay, Nerida Joy Ramsay & RMY Trustees (2010) Limited as trustees of the Nerida Joy Ramsay
Family Trust.
3a
Shares previously held by Bowker Holdings 99 Limited transferred to James Ramsay, Nerida Joy Ramsay & RMY
Trustees (2010) Limited as trustees of the James Ramsay Family Trust and the Nerida Joy Ramsay Family Trust.
3b
Shares previously held by Hooker Bros Entities transferred to James Ramsay, Nerida Joy Ramsay & RMY Trustees
(2010) Limited as trustee of the James Ramsay Family Trust and the Nerida Joy Ramsay Family Trust.
4
Shares held by Hooker Bros Entities - James Ramsay has a relevant interest in shares in the Company held by Hookers
Bros Entities (Hooker Bros. Investments Limited and Hooker Bros. (1989) Limited).
5
Shares held by Bowker Holdings 99 Limited - James Ramsay has a relevant interest in shares in the Company held by
Bowker Holdings 99 Limited.
6a
Shares held by Kern Group (Logistics) Pty Limited - Gregory Kern has a relevant interest in shares in the Company held
by Kern Group (Logistics) Pty Ltd.
6b
Shares held by Kern Group Pty Limited - Gregory Kern has a relevant interest in shares in the Company held by Kern
Group Pty Ltd.
6c
Shares held by Kern Consulting Group Super Fund - Gregory Kern has a relevant interest in shares in the Company
Kern Consulting Group Super Fund.
Greg Kern resigned as a Director with effect from 18 April 2019.
DIRECTORS SHAREHOLDINGS INTERESTS
As at 30 June 2019
DirectorTotal Shares Held
Trevor Janes1,247,182
Lorraine Witten103,000
Danny Chan1,255,370
James Ramsay15,001,266
USE OF COMPANY INFORMATION
There were no notices from Directors of the Company pursuant to section 145 of the Companies Act 1993 requesting to
use Company information received in their capacity as directors that would not otherwise have been available them.
ADDITIONAL STATUTORY INFORMATION
REMUNERATION OF DIRECTORS
The table below sets out the total of the remuneration and the value of other benefits received by each Director.
Director Board FeesAudit & Risk Committee FeesGovernance & Remuneration Committee FeesTotal Remuneration FY19Total Remuneration FY18
Trevor Janes130,000--130,000525,833
Lorraine Witten70,00010,000-80,000196,666
James Ramsay70,000--70,00040,833
Greg Kern
1
58,333-8,33366,6679,742,171
Danny Chan70,000--70,000190,833
1
Greg Kern resigned from the Board in April 2019
SUBSIDIARY COMPANY DIRECTORS
The following persons held office in subsidiary companies as at 30 June 2019. Employee directors of subsidiary
companies appointed by the Group do not receive director’s fees or other benefits in their capacity as director. The
remuneration of such employees, received as employees, are included in the relevant bands for remuneration disclosed
under Employee Remuneration on page 76.
Company Directors
Alpha Customs Services LimitedClayton Imbs Alan Terris Lee Banks
Appian Transport Limited James RamsayLee BanksAlan Pearson
Global Logistics Group Limited James Ramsay Alan Terris Lee Banks
Hookers Shipping Lmited James RamsayAlan Terris Lee BanksAlan Pearson
McAuley's Transport Limitd James RamsayAlan PearsonLee Banks
MOVE Logistics Limited James RamsayAlan Terris Lee BanksAlan Pearson
NZL Group Limited James RamsayAlan Terris Lee Banks
Pacific Asset Leasing Limited James RamsayAlan Terris Lee BanksAlan Pearson
Pacific Fuel Haul Limited James RamsayAlan Terris Lee BanksAlan Pearson
Southern Fleet Leasing LimitedJames RamsayAlan Terris Lee BanksAlan Pearson
Transport Investments Limited Danny ChanTrevor JanesJames RamsayLorraine Witten
TIL Freighting Limited James RamsayAlan Terris Lee BanksAlan Pearson
Specialist Lifting and Transport Group LimitedJames RamsayAlan PearsonLee Banks
TNL Logistics Limited James RamsayAlan Terris Lee Banks
TNL International Limited Clayton Imbs John LowdenShayne MiersAlan Terris
Transport Nelson Limited James RamsayGregory Whitham Lee BanksAlan Pearson
Pacific Liquid Logistics LimitedLee BanksAlan PearsonJames Ramsay
During the year of 30 June 2019 Gregory Whitham resigned as Director of Alpha Customs Services Limited, Appian
Transport Limited, Global Logistics Limited, Hookers Shipping Limited, McAuley’s Transport Limited, MOVE Logistics
Limited, NZL Group Limited, Pacific Asset Leasing Limited, Pacific Fuel Haul Limited, Southern Fleet Leasing Limited, TIL
Freighting Limited, Specialist Lifting and Transport Group Limited, TNL Logistics Limited.
Gregory Kern resigned as a Director during the year from Global Logistics Group Limited and Transport Investments
Limited.
Russell Daly resigned as a Director during the year from Global Logistics Group Limited.
7677TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019ADDITIONAL STATUTORY INFORMATION
CEO REMUNERATION DISCLOSURE
FY19
SalaryBenefitsFixed Remuneration SubtotalShort Term Incentive (STI)Long Term Incentive (LTI)Incentive Subtotal Total Remuneration (single figure)
$$$$$$$
Alan Pearson440,00040,306480,306190,000-190,000670,306
FY18
James Ramsay100,00014,345114,345---114,345
Alan Pearson126,9238,727135,650---135,650
Notes to CEO Remuneration
1. Alan participates in a short term incentive (STI) scheme and a long-term incentive (LTI) performance share rights plan. The STI that
applies is based on operational performance and qualitative factors. The LTI is yet to be finalised.
EMPLOYEE REMUNERATION
The number of employees of the Company (not being directors of the Company) who received remuneration and other
benefits in their capacity as employees during the year ended 30 June 2019 that in value was or exceeded $100,000 per
annum was as follows:
Remuneration No. of Employees
$100,000 - $109,99978
$110,000 - $119,99981
$120,000 - $129,99929
$130,000 - $139,99918
$140,000 - $149,9999
$150,000 - $159,9994
$160,000 - $169,9991
$170,000 - $179,9993
$180,000 - $189,9992
$190,000 - $199,9991
$210,000 - $219,9991
$220,000 - $229,9991
$240,000 - $249,0002
$250,000 - $259,0001
$300,000 - $309,9991
$670,000 - $679,9991
SPREAD OF SECURITY HOLDERS
As at 30 June 2019
Size of Shareholding Number of HoldersTotal Shares Held % of Shares
1-1000797149,6870.17%
1100-500083238,5480.28%
5001-1000037301,2630.35%
10001-100000521,804,1412.09%
100001 or more 5183,853,96997.11%
1,02086,347,608100.00%
SHAREHOLDER INFORMATION
The names and holdings of the twenty largest registered shareholders in the Company as at 30 June 2019 were:
Total Shares Held % of Shares
Gregory Whitham 12,682,667 14.69%
Kevin Garnet Smith11,921,53713.81%
Larry William Stewart & Kaylene Joy Stewart & SR Taranaki Trustees Limited11,921,53613.81%
Alan Terris11,235,06613.01%
James Ramsay & Nerida Joy Ramsay & RMY Trustees (2010) Limited 7,400,5318.57%
James Ramsay & Nerida Joy Ramsay & RMY Trustees (2010) Limited 7,400,530 8.57%
New Zealand Central Securities Depository Limited4,139,8484.79%
David Gregory Carr & Lynette Maree Duncan2,666,6673.09%
Danny Chan 1,255,3701.45%
Alan Paul Terris & Moya Ruth Terris & Terris Trustees Limited 1,200,0111.39%
Barry Francis Walker1,164,2711.35%
Selenium Corporation Limited 938,1791.09%
Rangatira Limited700,0000.81%
Kerry Girdwood698,5830.81%
GEO Stephen520,4980.60%
Graeme Finch442,0880.51%
Brian Finch442,0750.51%
Alan Pearson 381,6680.44%
Brendan Gerard Paul Prendergast & Joanne Maree Prendergast 333,334 0.39%
Catrina Gabrielle Jane Daly332,0370.38%
ADDITIONAL STATUTORY INFORMATION
7879TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019ADDITIONAL STATUTORY INFORMATION
SUBSTANTIAL PRODUCT HOLDERS
The following substantial product holder information is given pursuant to section 293 of the Financial Markets Conduct
Act 2013. As at 30 June 2019, details of the substantial product holders in the Company and their relative interests in the
Company’s ordinary shares are shown in the table below. The total number of listed voting securities (ordinary shares) of
the Company as at 30 June 2019 was 86,347,608.
Date of Notice Number of Shares
James Ramsay, Nerida Joy Ramsay & RMY Trustees (2010) Limited18 April 201914,801,061
James Ramsay
1
18 April 201915,001,263
Gregory Peter Whitham18 April 201912,682,667
Alan Paul Terris
2
18 April 201912,435,077
Kaylene Stewart, Larry Stewart & SR Taranaki Trustees Limited4 February 201911,728,033
Kevin Garnet Smith4 February 201911,728,034
1
This includes the 14,801,061 shares held by James Ramsay, Nerida Joy Ramsay & RMY Trustees (2010) Limited referred to above.
2
This includes 1,200,011 shares held by Alan Paul Terris, Moya Ruth Terris & Terris Trustee Limited.
OTHER INFORMATION
Auditor’s Fees
PwC has continued to act as auditor of TIL Logistics Group and its subsidiaries. The amount is payable by TIL Logistics
Group.
During the year ended 30 June 2019, the amount payable by TIL Logistics Group to PwC as audit and review fees was
$300,000. The amount of fees payable to PwC for non-audit work during the year ended 30 June 2019 was $143,000.
This is detailed in Note 8 of the Financial Statements section of the Annual Report.
Donations
The Company and its subsidiaries made donations totalling $17,000 during the year ended 30 June 2019.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
At TIL Logistics, we believe that good corporate governance is essential to protect the interests of investors and create
and enhance value over the short and long term. We are committed to conducting business in the right way, ethically and
in line with our legal and regulatory obligations.
The Board has adopted corporate policies and procedures that reflect best practice and we follow the principles and
recommendations of the NZX Corporate Governance Code (the Code). We believe that the Company’s corporate
governance practices in FY19 are materially in line with the Code, with further work being undertaken in some areas to
ensure full compliance. The following pages summarise our corporate governance practices and progress in FY19.
TIL Logistics takes a continuous improvement approach to corporate governance and policies are reviewed on a regular
basis in line with best practice. Key governance policies and charters can be viewed on the TIL Logistics website at
https://www.til.kiwi/investor-area/governance/
ETHICAL BEHAVIOUR
TIL Logistics expects its Directors and staff to act with integrity and professionalism and undertake their duties in the
best interests of the Company. The Company’s Code of Ethics is available on the Company website and is available to all
staff.
The Code of Ethics is included in the New Employee Induction pack and all employees are required to attest that they
have reviewed and understand the scope of relevant governance policies.
TIL Logistics encourages employees to speak out if they have concerns about any area of the Company. The avenues for
doing so are detailed in the Company’s Whistleblower Policy which is on the Company website.
The Securities Trading Policy, along with the Financial Markets Conduct Act 2013, imposes limitations and requirements
on Directors and employees in dealing in the Company’s shares. These limitations prohibit dealing in shares while in
possession of inside information and impose requirements for seeking consent to trade.
BOARD COMPOSITION AND PERFORMANCE
The TIL Logistics Board comprises three independent Directors and one Executive Director. Each Director has
experience, skills and expertise that are of value to the Company. Profiles of Directors are available on the Company
website. Directors’ interests are disclosed on page 72 of the Annual Report.
In order for a Director to be independent, the Board has determined that he or she must not be an executive of TIL
Logistics Group and must have no disqualifying relationships. Independence will be determined by the NZX Listing Rules
and having had regard to the factors described in the NZX Corporate Governance Code.
The roles and responsibilities of the Board are detailed in the Board Charter, which is reviewed at least every two years
and is available on the Company website. The Board’s primary objective is to enhance shareholder value and protect the
interests of other stakeholders by improving corporate performance and accountability.
The Board has delegated authority for day to day leadership and management of the business to the Group CEO, who in
turn has sub-delegated authority to other Company management with specified financial and non-financial limits. There
is a Delegations of Authority Policy, which is reviewed annually by the Board.
The number of elected Directors and the procedure for their retirement and election at Annual Meetings is determined in
accordance with the Company Constitution and NZX Listing Rules.
All Directors are involved in the consideration of Board composition and nominations and take into account a number of
factors including qualifications, capability, experience, judgement and skills, and the ability to work with other Directors.
Shareholders may also nominate candidates for election to the Board. Reference checks are carried out on all candidates
and key information about candidates is provided to shareholders to assist their decision as to whether or not to elect or
re-elect a candidate. New Board members enter into written agreements with TIL Logistics, outlining the terms of their
appointment.
TIL Logistics’ Chair is required to be an independent Director. The Board supports the separation of the roles of Chair and
CEO and the appointment of an Independent Chair.
8081TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019CORPORATE GOVERNANCE
Directors are encouraged to undertake appropriate training and education to ensure they remain current on how to
best perform their duties. In addition, management provide regular updates on relevant industry and Company issues,
including briefings from senior executives.
All Directors have access to executives to discuss issues or obtain information on specific areas in relation to matters
to be discussed at Board meetings, or other areas as they consider appropriate. The Board Committees and Directors,
subject to the approval of the Board Chair, have the right to seek independent professional advice at the Company’s
expense, to enable them to carry out their responsibilities.
The Company has arranged a policy of Directors’ and Officers’ liability insurance which is underwritten by Vero Liability
Insurance Limited. This ensures that any monetary loss suffered by Directors and Officers, as a result of actions
undertaken by them as Directors or Officers, is capped to specified limits (subject to legal requirements or restrictions).
The Board monitors its own performance and will, from time to time, commission an external review to assess the
performance of individual Directors and the Board’s effectiveness.
The Company has written agreements with each Director, outlining the terms of their appointment.
The Board is satisfied that each Director has the necessary time available to devote to the position, broadens the Board’s
expertise and has a personality that is compatible with the other Directors.
DIVERSITY
Diversity at TIL Logistics refers to characteristics of individuals and includes factors such as gender, marital status,
religious belief, colour, race, ethnic or national origin, disability, age, political opinion, employment status, family status
or sexual orientation. It encompasses the ways our people differ in terms of their education, life experience, job function,
work experience, personality, location and career responsibilities. The key aspects that we are seeking are diversity
of thinking and skills, as these attributes are most likely to assist TIL Logistics in delivering better outcomes for our
stakeholders.
Diversity at TIL Logistics is about the commitment to equal employment opportunities and treating all individuals fairly
and with respect. TIL Logistics has a diverse workforce and we recognise that everyone has individual differences which
can be leveraged to create stronger teams and which will ultimately drive stronger business performance.
Our approach to diversity is outlined in the Diversity Policy, which is available on the Company website.
Key areas of focus are:
Recruitment and retention of a diverse workforce
Supportive working environment
People development
Recognition and reward based on merit
As at 30 June 2019, females represented 18% (2018: 8%) of Directors and Officers of the Company (an officer is a person
who reports directly to the CEO). Females represented 16% (2018: 15%) of all employees of the Company.
FY19FY18
Female MaleFemaleMale
Directors 1314
Officers21108
All Employees 2421,2692141,189
Measurable objectives to be set under our Diversity Policy are yet to be finalised.
BOARD COMMITTEES
The Board has delegated a number of its responsibilities to Committees to assist in the execution of the Board’s
responsibilities. The use of Committees allows issues requiring detailed consideration to be dealt with separately by
members of the Board with specialist knowledge and experience, thereby enhancing the efficiency and effectiveness of
the Board. However, the Board retains ultimate responsibility for the functions of its Committees and determines their
responsibilities.
The Committees meet as required and have terms of reference (Charters), which are approved and reviewed by the
Board.
CORPORATE GOVERNANCE
Minutes of each Committee meeting are forwarded to all members of the Board, who are all entitled to attend any
Committee meeting. Each Committee is empowered to seek any information it requires from employees in pursuing its
duties and to obtain independent legal or other professional advice.
The membership and performance of each Committee is reviewed annually.
Management attendance at Committee meetings is by invite only.
Special purpose Committees may be formed to review and monitor specific projects with senior management. In the
case of a takeover offer, TIL Logistics would engage expert legal and financial advisors to provide advice on procedure.
Formal Takeover protocols are being developed and will be available in FY20. As a result, TIL Logistics is not in full
compliance with Recommendation 3.6 of the NZX Corporate Governance Code.
The Board committees as at 30 June 2019 were:
CommitteeRoleMembers
Risk Assurance and Audit CommitteeAssist the Board in its oversight of the integrity
of financial reporting, financial management and
controls, external audit quality and independence,
and the risk management framework.
Lorraine Witten (Chair)
Trevor Janes
James Ramsay
Danny Chan
Governance and Remuneration
Committee
Assist the Board to establish and maintain a strong
governance framework overseeing the management
of the company’s people, remuneration and
diversity policies.
Trevor Janes
James Ramsay
Attendance at Board and Committee Meetings
Board
Risk Assurance
and Audit
Committee
Governance &
Remuneration
Committee
TOTAL MEETINGS HELD1292
Trevor Janes 1292
Lorraine Witten 118-
James Ramsay 1282
Danny Chan1292
Greg Kern (resigned 18 April 2019)982
REPORTING AND DISCLOSURE
TIL Logistics is committed to keeping investors and the market informed of all material information about the Company
and its performance, in a timely manner. In addition to all information required by law, we also seek to provide sufficient
meaningful information to ensure stakeholders and investors are well informed.
The Company’s Continuous Disclosure Policy sets out the principles and requirements of this commitment to timely and
balanced disclosures.
Key corporate governance policies are available on TIL Logistics’ website at
https://www.til.kiwi/investor-area/governance/
Financial Reporting
For the financial year ended 30 June 2019, the Directors believe that proper accounting records have been kept which
enable, with reasonable accuracy, the determination of the financial position of the Company and facilitate compliance
of the financial statements with the Financial Markets Conduct Act 2013. The Chief Executive Officer and Chief Financial
Officer have confirmed in writing that TIL Logistics Group’s external financial reports present a true and fair view in all
material aspects.
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Non-financial reporting
TIL Logistics has a number of initiatives supporting its focus on the environment, people and communities. A process
to measure carbon emissions and develop a formal ESG framework is currently underway and the Company will report
against this at the end of the next financial year. As a result, TIL Logistics is not in full compliance with Recommendation
4.3 of the NZX Corporate Governance Code. TIL Logistics discusses its strategic objectives and its progress against these
in the Chair and CEO’s commentary in shareholder reports.
REMUNERATION
Remuneration of Directors and senior executives is the key responsibility of the Governance and Remuneration
Committee. External advice has been sought to ensure remuneration is benchmarked to the market for senior
management positions and Board positions.
Details of Director and Executive Remuneration in FY19 are provided on pages 75 to 76.
RISK MANAGEMENT
The Board has overall responsibility for the Company’s system of risk management and internal control and has
procedures in place to provide effective control within the management and reporting structure.
In addition, the Risk Assurance and Audit Committee (RAAC) provides an additional and more specialised oversight of
Company risks. The RAAC Charter details the specific responsibilities of the Committee regarding Risk Assurance.
Financial statements are prepared monthly and are reviewed by the Board progressively throughout the year to monitor
management’s performance against budget goals and objectives, and the Board requires managers to identify and
respond to risk exposures.
A structured framework is in place for capital expenditure, including appropriate authorisation and approval levels which
place a high emphasis on the commercial logic for the investment. The Board has set limits to management’s ability to
incur expenditure, enter contracts and acquire or dispose of assets.
Risk profiles which identify, assess, monitor and report the Company’s key business risks are formally reviewed by the
Board annually. These risk profiles also identify the key risk mitigation strategies which are in place. A summary is below:
Key RiskMitigation
CompetitionTIL is focused on continually improving its offer to customers and enhancing
the customer experience. Investment is being made into IT and capacity
to further strengthen TIL’s end to end supply chain offer and enhance the
customer experience.
Financial risksManaging financial risk is an ongoing process in all businesses.
A key focus for business managers is cash flow management. Financial
policies and procedures are in place and monitored to ensure the business is
managed within the limits on a continuous basis. This risk is managed by the
Board Risk & Assurance and Audit Committee.
Crisis EventsNatural disasters and other crisis events in New Zealand can have an impact
on how we operate our business. The Group is implementing a proactive
risk management approach for each Division in the areas of supply chain,
employees and business infrastructure in case of a natural disaster. Business
Continuity Plans are in place for each business and pre- and post-disaster
planning reviews are conducted.
EconomyWe carefully monitor economic trends and each business is tasked with
identifying potential risks and developing strategic plans which take these
into account.
Cyber SecurityThe company has data security systems and protocols in place, which are
continuously reviewed and updated for improvement.
Cyber Security Audits are undertaken on a regular basis.
Health & SafetyWe have a programme and policies focused on identifying and mitigating
health and safety risks within the business. We monitor and measure key
metrics and report on these regularly to the Board. Preventative and recovery
processes and controls are implemented across the business.
CORPORATE GOVERNANCE
Crisis plans have been developed along with agreed protocols on actions to be taken and external and internal
communication protocols.
Occupational Health and Safety statistics and reported data from each business are reviewed at each Board meeting.
This includes serious and minor incidents along with near misses and corrective actions and internal training schemes.
The Board as a whole is responsible for monitoring corporate risk assessment processes and this is not delegated to a
subcommittee.
HEALTH AND SAFETY
Staying safe, keeping others safe, and being corporately responsible are fundamental to what we are as an organisation.
Operating our business in this way helps us deliver on our vision of “No Harm to People, the Environment or Assets”.
Paying close attention to safety, wellbeing, sustainability, ethics and integrity go hand in hand with that vision.
The Board is committed to taking all reasonably practicable steps to ensure a high quality, safe and healthy environment
for all TIL Logistics people, our visitors, partners and those we interact with on the road. This means, we make the safety
and wellbeing of our employees, contractors and communities our priority.
People safety is a key priority, one of our core values and an essential component to everything we do. Our ambition is
zero fatalities. We are committed to developing, improving and reinforcing our safety culture. The key to this is improving
leadership capacity and simplifying our tools and systems.
We track safety performance to identify patterns to help prevent incidents – for example, by determining fatigue trends
we can schedule activities to avoid particular times of the day when we know incidents are more likely to occur. “Health,
Safety and Sustainability” results and reported data from each Business Unit and at a Group level, are reviewed Monthly
at each National Health & Safety Committee Meeting and at each Board meeting. This includes training, serious accident,
incident and minor event data as well as near misses, observations and corrective actions.
Over the next year we will be taking steps to operationalise our safety and sustainability teams with a revised focus and
functional framework, using improved measurement and analytics tools, “in cab” technologies and other technology
that move us beyond traditional safety metrics – bringing factors like weather and vehicle data into the picture – to
identify leading indicators of injuries and illness and factoring our learnings into revised safety practices in all parts of our
business.
AUDITORS
External audit
For the year ended 30 June 2019, PricewaterhouseCoopers was the external auditor of TIL Logistics Group Limited.
The Risk Assurance and Audit Committee monitors the ongoing independence, quality and performance of the external
auditors and audit partner rotation. The Committee pre-approves any non-audit work undertaken by PwC. The non-audit
services in the year ended 30 June 2019 are set out in the Annual Report. Those services were provided in accordance
with the company’s External Auditor Independence Policy and were assessed by the Risk Assurance and Audit
Committee as not affecting PwC’s independence. The fees paid for audit and non-audit services in FY19 is identified on
page 78 of the Annual Report. The external auditors will attend the 2019 Annual Shareholders Meeting.
Internal Audit
TIL Logistics has a number of internal controls, including controls for computerised information system, security, business
continuity management, insurance, health and safety, conflicts of interest, and prevention and identification of fraud. A
formal Internal Audit function and framework is being developed and will be fully implemented in FY20 with it having
conducted internal audits in FY19 using external resources.
8485TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
SHAREHOLDER RIGHTS AND RELATIONS
The Board is committed to open and regular dialogue and engagement with shareholders. TIL Logistics has developed
an investor relations programme which includes regular dialogue with investors, analysts and investor meetings, and
earnings announcements. The programme is designed to provide shareholders and other market participants the
opportunity to obtain information, express views and ask questions.
Shareholders are actively encouraged to attend the Annual Meeting and may raise matters for discussion at this event,
and vote on major decisions which affect TIL Logistics. Voting is by poll, upholding the ‘one share, one vote’ philosophy.
Shareholders are also able to vote by proxy ahead of meetings without having to physically attend those meetings.
Shareholders are encouraged to communicate with the Company and its share registry electronically.
In addition to shareholders, TIL Logistics has a wide range of stakeholders and maintains open channels of
communication for all audiences, including brokers, the investing community and the New Zealand Shareholders’
Association, as well as its staff, suppliers and customers.
TIL Logistics has a number of policies which uphold stakeholder interests Including but not limited to the Securities
Trading Policy, Market Disclosure Policy and Code of Conduct.
GLOSSARY
Non-GAAP financial information: TIL Logistics Group uses several non-GAAP measures when discussing financial
performance. These include Earnings Before Interest, Tax, Depreciation and Amortisation, Share of (Loss)/Profit of
Associates and Impairment of Goodwill (EBITDA), adjusted EBITDA excluding non-trading costs and adjusted Net Profit/
Loss After Tax (NPAT/NLAT) excluding non-trading costs. Management believes that these measures provide useful
information on the underlying performance of TIL Logistics’ business.
EBITDA refers to Earnings Before Interest, Tax, Depreciation and Amortisation excluding income from associates. EBITDA
is a non-GAAP profit measure.
NPAT/NLAT refers to net profit/loss after tax.
Adjusted EBITDA/Adjusted NPAT: Removes the impact of non-trading costs. The Board believes this provides a better
reflection of the company’s underlying performance.
CORPORATE GOVERNANCE
DIRECTORS
Danny Chan
Appointed 6 December 2017
Trevor Janes
Appointed 6 December 2017
James Ramsay
Appointed 6 December 2017
Lorraine Witten
Appointed 6 December 2017
RISK ASSURANCE & AUDIT COMMITTEE
Lorraine Witten (chair)
Trevor Janes
James Ramsay
Danny Chan
GOVERNANCE AND REMUNERATION
COMMITTEE
Trevor Janes
James Ramsay
REGISTERED OFFICE AND ADDRESS
FOR SERVICE
330 Devon Street East
New Plymouth
AUDITORS
PricewaterhouseCoopers
PwC Tower
Level 22
188 Quay Street
Auckland
BANKERS
ASB Bank
North Wharf
12 Jellicoe Street, Auckland
SOLICITORS
Harmos Horton Lusk Limited
Vero Centre
48 Shortland Street, Auckland
SHARE REGISTRAR
Link Market Services Limited
Deloitte Centre
80 Queen St, Auckland
DIRECTORY
DIRECTORY
8687TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019TIL LOGISTICS GROUP LIMITED ANNUAL REPORT 2019
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.