Motor Trade Association Incorporated Group
Notes to the Special Purpose Consolidated Financial Statements
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
For the year ended 30 June 2024
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Summary of accounting policies
Reporting entity
Motor Trade Association Incorporated ("MTA") is incorporated under the Incorporated Societies Act 1908, and its subsidiaries (together the "Group") under the Companies Act 1993. Its principal products and services relate to providing support and benefits to its members who operate in the motor industry within New Zealand.
In addition to AABSL Limited, the AABSL group also includes SAM Computer Systems Limited (SAM), Systime Automotive Solutions (SAS), TSI SAM PTY Ltd and TSI Systime PTY Ltd. These companies provide software and software related services including licensing, support, maintenance, implementation, customisations and training.
Statement of compliance
The financial statements for the year ended 30 June 2024 and prior year comparatives have been prepared in accordance with the Group's special purpose financial reporting framework, referred to as special purpose financial reporting. These special purpose consolidated financial statements have been prepared in accordance with the requirements of NZ IFRS RDR and Generally Accepted Accounting Practice in New Zealand ("NZ GAAP") as appropriate for profit oriented entities, with the exception of:
(i) NZ IFRS 9: Financial Instruments
The Group has elected not to fair value the Dekra Put and Call Options (the Options) commencing as at 30 June 2022 year as is required under NZ IFRS RDR. The impact of adopting special purpose financial reporting was that the carrying value of the Options as at 30 June 2021 (net liability of $3.421m) has been transferred directly to retained earnings in the 2022 financial year and the Options have not been recognised as a financial instrument in accordance with NZ IFRS 9.
The special purpose consolidated financial statements were authorised for issue by the Directors on 1 October 2024.
Basis of preparation
The special purpose consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments outlined below.
Cost is based on the fair value of the consideration given in exchange for assets.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.
The accounting policies set out below have been applied in preparing the special purpose consolidated financial statements for the year ended 30 June 2024.
The presentational and functional currency is New Zealand Dollar (NZ$). The amounts in the special purpose consolidated financial statements are rounded to the nearest thousand dollar ($'000).
Critical judgments in applying the entity’s accounting policies
In the application of the group accounting policies the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.
1. Summary of accounting policies continued
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
The following judgements have been made in preparation of the special purpose consolidated financial statements for the year ended 30 June 2024 which have the most significant effect on the special purpose consolidated financial statements (except for those involving estimations which are dealt with below):
- Useful lives of tangible and intangible assets.
- Recoverability of debtors / doubtful debts provision, considered using historical delinquency rate and expected credit losses overlay as required by IFRS 9. Refer to note 5.
- Classification of investment in Dekra New Zealand Limited. Refer to Note 9.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:
Gift vouchers : per Note 1(g), the gift vouchers in circulation are recognised as a liability. Annually, the Board approves a write back to profit a portion of unredeemed gift vouchers based on an estimate of those that are unlikely to be redeemed. The value of the liability and estimated write back may differ to actual redemptions.
Going concern Significant accounting policies
The directors have, at the time of approving the special purpose consolidated financial statements, a reasonable expectation that the Group have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the special purpose consolidated financial statements.
The following significant accounting policies have been adopted in the preparation and presentation of the special purpose consolidated financial statements.
(a) Principles of consolidation
The Group special purpose consolidated financial statements are prepared by combining the special purpose consolidated financial statements of all the entities that comprise MTA Group, being MTA (the parent entity) and its subsidiaries. A list of subsidiaries appears in Note 22 to the special purpose consolidated financial statements. Consistent accounting policies are employed in the preparation and presentation of the special purpose consolidated financial statements. Control is achieved when MTA:
- has power over the investee;
- is exposed, or has rights, to variable returns from its involvement with the investee; and
- has the ability to use its power to affect its returns.
MTA reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
1
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of accounting policies continued
For the year ended 30 June 2024
1. Summary of accounting policies (continued)
Intangible assets
Intangible assets not yet ready for use and intangible assets with indefinite useful lives are not subject to amortisation and are therefore tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. For impairment assessment purposes, assets are generally grouped at the lowest levels for which there are largely independent cash flows ('cash generating units'). Accordingly, most assets are tested for impairment at the cash-generating unit level.
Assets other than intangible assets not yet ready for use and intangible assets with indefinite useful lives are assessed for impairment whenever events or circumstances arise that indicate the asset may be impaired. An impairment loss is recognised when the carrying amount of an asset or cash generating unit exceeds the asset's or cash generating unit's recoverable amount. The recoverable amount of an asset or cash generating unit is defined as the higher of its fair value less costs to sell and value in use (where ‘value in use’ is determined as the present value of the future cash flows expected to be derived from an asset or cash-generating unit).
Impairment losses in respect of individual assets are recognised immediately in profit or loss unless the asset is measured at a revalued amount, in which case the impairment loss is treated as a revaluation decrease and is recognised in other comprehensive income to the extent that it does not exceed the amount in the revaluation surplus for the same asset. Impairment losses in respect of cash generating units are allocated first against the carrying amount of any goodwill attributed to the cash generating unit with any remaining impairment loss allocated on a pro rata basis to the other assets comprising the relevant cash generating unit.
A reversal of an impairment loss for an asset measured at cost is recognised in profit or loss. A reversal of an impairment loss for an asset measured at a revalued amount is treated as a revaluation increase and is recognised in other comprehensive income, except to the extent that an impairment loss on the same asset was previously recognised in profit or loss, in which case a reversal of that impairment loss is also recognised in profit or loss.
Subsidiaries
The special purpose consolidated financial statements include the information and results of each subsidiary from the date on which MTA obtains control and until such time as MTA ceases to control such subsidiary.
In preparing the special purpose consolidated financial statements, all inter-company balances and transactions, and unrealised profits arising within MTA Group are eliminated in full.
Investments in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in the Group special purpose consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are initially carried in the special purpose consolidated Statement of Financial Position at cost, and adjusted thereafter for the change in the Group's share of net assets of the associate and any impairment. Dividends received from an associate are recognised as a reduction in the carrying amount of the investment.
The carrying amount of equity investments is tested annually for impairment at the end of each reporting period.
Sale of goods
Revenue from the sale of goods is recognised when the Group has transferred control of the goods to the buyer.
Membership subscriptions
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Summary of accounting policies continued
Membership subscriptions are recognised over the subscription period for services provided to members. Membership subscriptions invoiced in advance for the new subscription year are recorded in the Special Purpose Consolidated Statement of Financial Position as a liability. Membership subscriptions are recognised over time.
Sale of Software and associated services (licencing, instillation, support, maintenance and right to upgrade)
SAM Computers Systems ("SAM") Limited offers 3 distinct software products (SAM, Orion and Synergy). It sells licenses, implementation and support. Sometimes these are sold as individual items and other times they are sold as a package.
NZ IFRS15 establishes 2 methods for recognising revenue: either over time or at a point in time. A performance obligation is satisfied over time if one of the following conditions is met:
a) the customer simultaneously receives and consumes the benefits provided by the entity's performance as the entity performs.
b) the entity's performance creates or enhances an asset (e.g. work in progress) that the customer controls as the asset is created or enhanced.
c) the entity's performance does not create an asset with alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.
Where SAM software and implementation are sold outright or rented monthly, revenue is taken at a point in time. For SAM software support (which is optional), revenue is taken over time (in line with the delivery of the support obligation).
Orion and Synergy software differ s to SAM in that the support is compulsory. This means that the licencing, implementation and support are viewed as a single performance obligation. As such, revenue is taken over time in line with the delivery of this combined performance obligation.
Systime Automotive Solutions Limited ("SAS") offers the Keyloop Autoline product, with the customers having the option of outright purchase or a monthly rental.
While SAS sells the licencing, installation and support of the Keyloop Autoline product, it does not own the underlying software. It is considered to be a principal and not an agent as SAS controls the implementation, upgrades and support of the software. The software is provided as part of an integrated solution or service to the end customer.
Keyloop Autoline is sold as a solution which incorporates licencing, implementation and support, as such this is viewed as a single performance obligation and revenue is taken over time in line with the expected contract life (which equates to an anticipated period of required support).
Dividend and interest income
Dividend income is recognised on a receivable basis when the shareholder's right to receive payment has been established, except where received from an associate. Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
(c) Foreign currency transactions
All foreign currency transactions during the financial year are brought into account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Exchange differences on monetary items are recognised in the Special Purpose Consolidated Statement of Comprehensive Income in the year in which they arise.
(d) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except for receivables and payables which are recognised inclusive of GST.
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
Cash flows are included in the Special Purpose Consolidated Cash Flow Statement on a net basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to the taxation authority is classified as operating cash flows.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of any outstanding bank overdrafts.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Summary of accounting policies continued
1. Summary of accounting policies (continued)
(f) Inventories
Inventories are valued at the lower of cost and net realisable value, on a first in first out basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distributing.
(g) Financial Instruments
Financial assets and financial liabilities are recognised in the Group’s special purpose consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial Assets
Financial assets are classified into two measurement categories. Those at fair value and those at amortised cost. The classification of financial assets depends on the business model in which the financial instruments are measured.
Financial assets through fair value profit or loss
Investments held at fair value through profit or loss are measured initially at fair value excluding any transaction costs. Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments at fair value through profit or loss are measured at fair value with changes in their fair value recognised in profit or loss.
Previously, the put option was classified as a financial asset and carried at fair value with changes in value being recognised through profit or loss. In the 2022 financial year, under special purpose financial reporting, the put option has not been recognised as an asset and the carrying balance as at 30 June 2021 has been transferred directly to retained earnings in the 2022 financial year, as described in the statement of compliance in Note 1 above.
Financial assets at amortised cost
(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
(b) the contractual terms of the financial asset give rise on specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Any impairment loss is recognised through the profit and loss in the Special Purpose Consolidated Statement of Comprehensive Income. The impairment allowance on receivables is assessed based on historical delinquency rates and losses. Bad debts are written off when identified.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss and other comprehensive income. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Derecognition of financial assets
between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
1. Summary of accounting policies continued
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
For the year ended 30 June 2024
For the year ended 30 June 2024
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.
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Financial liabilities
Financial liabilities
A financial liability is classified as a financial liability at fair value through profit or loss if it meets one of the following conditions:
A financial liability is classified as a financial liability at fair value through profit or loss if it meets one of the following conditions:
- It is held for trading, or
- It is held for trading, or
- It is designated by the entity as at fair value through profit or loss (note that such a designation is only permitted if specified conditions are met).
- It is designated by the entity as at fair value through profit or loss (note that such a designation is only permitted if specified conditions are met).
A financial liability is held for trading if it meets one of the following conditions:
A financial liability is held for trading if it meets one of the following conditions:
- It is incurred principally for the purpose of repurchasing it in the near term, or
- It is incurred principally for the purpose of repurchasing it in the near term, or
- On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual
- On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual
pattern of short-term profit-taking, or
- It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).
- It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).
Previously, the call option was classified as a financial liability and carried at fair value with changes in value being recognised through profit or loss. In the 2022 financial year, under special purpose financial reporting, the call option has not been recognised as a liability and the carrying balance as at 30 June 2021 has been transferred directly to retained earnings in the 2022 financial year, as described in the statement of compliance in Note 1 above.
Previously, the call option was classified as a financial liability and carried at fair value with changes in value being recognised through profit or loss. In the 2022 financial year, under special purpose financial reporting, the call option has not been recognised as a liability and the carrying balance as at 30 June 2021 has been transferred directly to retained earnings in the 2022 financial year, as described in the statement of compliance in Note 1 above.
Financial liabilities at amortised cost:
Financial liabilities at amortised cost:
Financial liabilities at amortised cost are initially recognised at fair value plus or minus transaction costs that are directly attributable to the acquisition of the financial liability and subsequently measured at amortised cost.
Financial liabilities at amortised cost are initially recognised at fair value plus or minus transaction costs that are directly attributable to the acquisition of the financial liability and subsequently measured at amortised cost.
Interest and dividends
Interest and dividends
Interest and dividends are classified as expenses or as distributions of profit consistent with the Special Purpose Consolidated Statement of Financial Position classification of the related debt or equity
Interest and dividends are classified as expenses or as distributions of profit consistent with the Special Purpose Consolidated Statement of Financial Position classification of the related debt or equity
Interest and dividends are classified as expenses or as distributions of profit consistent with the Special Purpose Consolidated Statement of Financial Position classification of the related debt or equity instruments.
Trade payables and other accounts payable are recognised at amortised cost when the Group becomes obliged to make future payments resulting from the purchase of goods and services.
Trade payables and other accounts payable are recognised at amortised cost when the Group becomes obliged to make future payments resulting from the purchase of goods and services.
vouchers in circulation
vouchers in circulation
The liability represents the face value of gift vouchers sold less those redeemed and less an estimate of those gift vouchers that will never be redeemed.
The liability represents the face value of gift vouchers sold less those redeemed and less an estimate of those gift vouchers that will never be redeemed.
Gift cards in circulation
Gift cards in circulation
The liability represents the amount initially loaded onto the gift card when it was activated less the amount redeemed.
The liability represents the amount initially loaded onto the gift card when it was activated less the amount redeemed. pattern of short-term profit-taking, or
Derecognition of financial liabilities
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of accounting policies continued
For the year ended 30 June 2024
1. Summary of accounting policies (continued)
(h) Property, plant and equipment
Plant and equipment, motor vehicles, leasehold improvements, furniture and fittings and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.
Depreciation is calculated on a straight line basis so as to write off the cost of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
- Motor vehicles 3 years
- Furniture, fittings and equipment 2-10 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
(i) Leases
The Group has reviewed its contracts to see if they are or contain a lease. Where a lease exists the Group has created a right-of-use asset with a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short term leases (defined as leases with a lease term of less than 12 months) and leases of low value assets. For these leases the group recognises the lease payments as an operating expense on a straight line basis over the term of the lease, unless another systematic basis is more representative of the time pattern in which the economic benefit from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments, that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined the Group uses its incremental borrowing rate (IBR). The IBR is defined as the rate of interest that the lessee would have to pay to borrow over a similar term and with a similar security the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment. For the implementation of the standard the Group used an incremental borrowing rate based on commercial mortgages from ANZ (the Groups transactional banker), for an equivalent term and asset type.
Lease payments included in the measurement of the lease liability comprise:
Lease payments included in the measurement of the lease liability comprise:
- Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
- Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
- The amount expected to be payable by the lessee under residual value guarantees;
- The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
- Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the Special Purpose Consolidated Statement of Financial Position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
For the year ended 30 June 2024
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
- A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
- A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
Page 7
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under NZ IAS 37. To the extent that the costs relate to a right-of use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
MOTOR TRADE
ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of accounting policies continued
For the year ended 30 June 2024
For the year ended 30 June 2024
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
- A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
- A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under NZ IAS 37. To the extent that the costs relate to a right-of use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under NZ IAS 37. To the extent that the costs relate to a right-of use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the special purpose consolidated statement of financial position.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the special purpose consolidated statement of financial position.
(j) Intangible assets
(j) Intangible assets
Internally generated intangible assets.
Internally generated intangible assets.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally generated asset arising from development is recognised if, and only if, all of the following conditions have been demonstrated:
An internally generated asset arising from development is recognised if, and only if, all of the following conditions have been demonstrated:
- the technical feasibility of completing the intangible asset so that it will be available for use or sale;
- the technical feasibility of completing the intangible asset so that it will be available for use or sale;
- the intention to complete the intangible asset and use it or sell it;
- the intention to complete the intangible asset and use it or sell it;
- the ability to use or sell the intangible asset;
- the ability to use or sell the intangible asset;
- how the intangible asset will generate probable future economic benefit;
- how the intangible asset will generate probable future economic benefit;
- the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
- the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
- the ability to measure reliably the expenditure attributable to the intangible asset during its development.
- the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally generated assets is the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above.
The amount initially recognised for internally generated assets is the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above.
Where no internally generated intangible asset can be recognised, development expenditure is recognised in the profit and loss in the period in which it is incurred.
Where no internally generated intangible asset can be recognised, development expenditure is recognised in the profit and loss in the period in which it is incurred.
Subsequent to the initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Subsequent to the initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Intangible assets acquired in a business combination.
Intangible assets acquired in a business combination.
Intangible Assets acquired in a Business Combination and recognised separately from goodwill are recognised initially at their fair value at the acquisition date.
Intangible Assets acquired in a Business Combination and recognised separately from goodwill are recognised initially at their fair value at the acquisition date.
Subsequent to the initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Subsequent to the initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
For the AABSL acquisition, SAM, Orion and Synergy Software has been determined to have an estimated useful life of 5 years. All other intangibles are regarded as indefinite useful lives.
For the AABSL acquisition, SAM, Orion and Synergy Software has been determined to have an estimated useful life of 5 years. All other intangibles are regarded as indefinite useful lives.
Intangible assets acquired separately.
Intangible assets acquired separately.
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
Intangible Assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and impairment losses. Amortisation is recognised on a straight line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with an indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
Intangible Assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and impairment losses. Amortisation is recognised on a straight line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with an indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
For the year ended 30 June 2024
Derecognition of intangible assets
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Summary of accounting policies continued
1. Summary of accounting policies (continued)
(k) Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets (including goodwill) with an indefinite useful life are tested for impairment at least annually and whenever there is an indication at the end of a reporting period that the asset may be impaired.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease and to the extent that the impairment loss is greater than the related revaluation surplus, the excess impairment loss is recognised in profit or loss. Any impairment is first allocated to goodwill and any excess is allocated to the remaining assets in the CGU.
Where an impairment loss subsequently reverses (other than goodwill), the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss to the extent that it eliminates the impairment loss which has been recognised for the asset in prior years. Any increase in excess of this amount is treated as a revaluation increase.
For the AABSL group acquisition SAM and SAS are both cash generating units, and are both subject to at least annual impairment testing.
(l) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the year. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Current tax for current and prior years is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
MTA is liable for taxation to the extent that MTA generates income from trading activities. The activities of MTA Group Investments Limited (MGIL) and the AABSL group (including SAM Computer Systems Limited & Systime Automotive Solutions Limited and their subsidiaries) are taxed as normal trading entities.
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the special purpose consolidated financial statements and the corresponding tax base of those items.
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
In principle, deferred tax liabilities are recognised for all taxable temporary differences.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
For the year ended 30 June 2024
1. Summary of accounting policies continued
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax is recognised as an expense or income in profit or loss except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.
(m) Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits which are not expected to be settled within 12 months are based on the future estimated cash outflows to be made by the Group in respect of services provided by employees up to reporting date.
Defined contribution plans
Contributions to defined contribution superannuation plans are recognised as an expense when the employees have rendered service entitling them to the contributions.
(n) Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
(o) Special Purpose Cash Flow Statement
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
The definition of the terms used in the Special Purpose Consolidated Cash Flow Statement is as follows:
For the year ended 30 June 2024
Operating activities
Operating activities are the principal revenue producing activities and other activities that are not investing or financing activities. Interest received and interest paid are included in operating activities (except for interest paid on building leases which is classified as financing activities).
11
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
For the year ended 30 June 2024
1. Summary of accounting policies continued
1. Summary of accounting policies (continued)
1. Summary of accounting policies (continued)
1. Summary of accounting policies (continued)
Investing activities
Investing activities
Investing activities
Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment, intangible assets, managed fund units and investment
Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment, intangible assets, managed fund units and investment properties. Dividends received are included in investing activities.
Dividends received are included in investing activities.
Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment, intangible assets, managed fund units and investment properties. Dividends received are included in investing activities.
Financing activities
Financing activities
Financing activities
Financing activities are those activities that result in changes in the size and composition of the capital structure of the Group. This includes debt not falling within the definition of
Both
and
Financing activities are those activities that result in changes in the size and composition of the capital structure of the Group. This includes debt not falling within the definition of cash. Both interest and non interest payments on building lease are classified as financing activities.
interest payments on building lease are classified as financing activities.
Financing activities are those activities that result in changes in the size and composition of the capital structure of the Group. This includes debt not falling within the definition of cash. Both interest and non interest payments on building lease are classified as financing activities.
(p) Standards or interpretations effective in the current period
(p) Standards or interpretations effective in the current period
In the current year, the Group has adopted all mandatory new and amended standards.
(p) Standards or interpretations effective in the current period
In the current year, the Group has adopted all mandatory new and amended standards.
In the current year, the Group has adopted all mandatory new and amended standards.
(q) Changes in accounting policies
(q) Changes in accounting policies
(q) Changes in accounting policies
There has been no change in accounting policies in the 2024 2023 nil).
There has been no change in accounting policies in the 2024 2023 nil).
There has been no change in accounting policies in the 2024 2023 nil).
(r) Comparatives
(r) Comparatives
(r) Comparatives
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
Notes to Special Purpose Consolidated Financial Statements
2. Revenue
2. Revenue
2. Revenue
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
(b) i. Gains and losses on financial instruments at fair value through profit and loss
(b) i. Gains and losses on financial instruments at fair value through profit and loss
(b) i. Gains and losses on financial instruments at fair value through profit and loss
ii. Other gains and losses
5. Trade and other receivables
The average credit period on sales of goods and services is 30 days (2023: 30 days).
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established using a forward-looking expected credit loss model which requires expected credit losses to be returned on a 12 month or life time basis. The credit loss is the difference between all contractual cash flows that are due and all cash flows expected to be received, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited in profit or loss. The expected credit losses have been assessed as negligible.
6. Other financial assets
Investment on behalf of MTA (Northern Region) Incorporated amounting to $1,112m is contained within this figure (2023 $1,075m) - also see Note 14(b)
MTA values its managed funds investments at fair value and classifies its investments in the following fair value measurement hierarchy:
Level 1 - Quoted prices unadjusted in active markets for identical assets.
Level 2 - Inputs that are observable for the asset either directly or indirectly.
Level 3 - Inputs for asset that are not based on observable market data.
The following table shows the fair value hierarchy:
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
- continued
7. Inventories
Stock is carried at cost on a FIFO basis. The carrying value of is net of $34k (2023: $96k) obsolete stock written off as part of the financial year end review.
8. Taxation
(a) Income tax recognised in the Special Purpose Consolidated Statement of Comprehensive Income
Deferred tax expense/(income) relating to the origination and reversal of temporary differences
Adjustments for deferred tax recognised in prior years Other
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in the special purpose consolidated financial statements as follows:
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024
17 MOTOR TRADE ASSOCIATION INCORPORATED GROUP
provision of income tax in previous year
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
8. Taxation (continued)
(b) Current tax assets and liabilities
(c) Deferred tax balances
temporary differences arise from the following:
TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
- continued
As at 30 June 2024, the Group has tax losses available to carry forward of $8.47m (2023: $8m).
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
- continued
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
9. Investment in associate companies
Investment in Dekra NZ (Closing Balance)
Investment in Dekra NZ (Opening Balance) in note 1(a). Pursuant to a shareholder agreement, the Company has the right to cast 40 per cent of the votes at shareholder meetings of Dekra NZ.
The above associate is accounted for using the equity method in these special purpose consolidated financial statements as set out in the Group’s accounting policies
For the purposes of applying the equity method of accounting, the financial statements of Dekra NZ for the year ended 31 December 2023 have been used, and appropriate
adjustments have been made for the effects of share of profits between that date and 30 June 2024, and this has been done consistently in prior periods.
10. Goodwill
Balance at 30 June 2023
Balance at 30 June 2024
As at 30 June 2023
At 30 June 2024 the Group has no Goodwill. ( 2023 - The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. At 30 June 2023 the AABSL board reviewed the Goodwill relating to SAM Computer Systems Limited (SAM) and Systime Automotive Solutions Limited (Systime) and concluded that the SAM goodwill of $1.81m is fully impaired and furthermore whilst Systime goodwill of $0.6m exhibited no signs of impairment that the board and management decided to write off all Goodwill in the 2023 year).
11. Property, plant and equipment
Notes - continued
At 30 June 2024 the Group has no Goodwill. ( 2023 - The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. At 30 June 2023 the AABSL board reviewed the Goodwill relating to SAM Computer Systems Limited (SAM) and Systime Automotive Solutions Limited (Systime) and concluded that the SAM goodwill of $1.81m is fully impaired and furthermore whilst Systime goodwill of $0.6m exhibited no signs of impairment that the board and management decided to write off all Goodwill in the 2023 year).
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
11. Property, plant and equipment
For the year ended 30 June 2024
21
The Group tests tangible assets for signs of impairment annually, there were no signs of impairment. Page 22
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
12. Intangibles assets
Additions (capitalised) from internal developments
Additions (capitalised) from separate acquisitions
Transfer from WIP to Software
Additions
Accumulated amortisation
Software is amortised over the expected useful life.
Intangible assets not yet ready for use and intangible assets with indefinite useful lives are not subject to amortisation and are therefore tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. For impairment assessment purposes, assets are generally grouped at the lowest levels for which there are largely independent cash flows ('cash generating units'). Accordingly, most assets are tested for impairment at the cash-generating unit level.
The recoverable amount of intangible assets is based on value in use calculations. These calculations are based on projected cash flows prepared by Management covering a period of 10 years approved by the Board of Directors. Management’s determination of cash flow projections and gross margins are based on past performance and its expectation for the future. Considering the present economic circumstances, there remains uncertainty in the short term with respect to the impact on forecast cash flows and in turn the carrying value of intangible assets. The recoverability of intangible assets with indefinite useful lives is based on the assumption that Management's projected cash flows will be achieved.
Management believes that no reasonably possible changes in any of the key assumptions used in the projected cash flows would cause the carrying value of the intangible assets to be materially lower than its recoverable amount.
the Board of Directors. Management’s determination of cash flow projections and gross margins are based on past performance and its expectation for the future. Considering the present economic circumstances, there remains uncertainty in the short term with respect to the impact on forecast cash flows and in turn the carrying value of intangible assets. The recoverability of intangible assets with indefinite useful lives is based on the assumption that Management's projected cash flows will be achieved.
Management believes that no reasonably possible changes in any of the key assumptions used in the projected cash flows would cause the carrying value of the intangible assets to be materially lower than its recoverable amount.
Notes - continued
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
13. Trade and other payables
Region Funds (contribution from branches)
No interest is charged on the trade payables unless the amounts payable fall overdue, at the discretion of the vendor. MTA Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
14.
(i) Gift vouchers in circulation represents the obligation in respect of gift vouchers still to be returned for redemption. (ii) Gift cards in circulation represents the obligation in respect of the unused balance on activated gift cards. (b) Others
(Northern Region) Incorporated (formerly known as
15. Other liabilities
16. Members' funds
Each general member is entitled to one voting right in MTA. The current number of general members at balance date is 4,114 (2023: 3,811).
Upon the winding up of MTA any property remaining after the satisfaction of all debts and the costs, charges, and expenses of the winding up, shall be transferred to such other association or organisation having objects similar to the objects of MTA or in such other manner as may be determined by the general meeting at which the winding up is approved.
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
17. Reserves
Special funds are funds set aside by the Board to use for membership projects and Customer Promise.
18. Retained earnings
19. Commitments
The Group has invested in private equity and has the following uncalled capital commitments as outlined below:
19. Commitments
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024
The Group has invested in private equity and has the following uncalled capital commitments as outlined below:
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024
Prior to 30 June 2023, MTA entered into agreements to lease in two locations, AIA House in Wellington, effective 1 February 2023 and Great South Road in Auckland, effective 1 August 2022. Consequently, as at 30 June 2023, the Right-of-Use (ROU) asset and corresponding liability have been written out of the special purpose consolidated statement of financial position and the lease surrender payment has been accrued. The table below discloses the gross carrying amount and accumulated depreciation for the Group.
With the acquisition of SAM Computer Systems Limited & Systime Automotive Solutions Limited during the 2021 year, the Group has identified additional obligations. One for a portion of the ground floor of Shamrock House at 485 Great South Road, Auckland, the other related to the lease of IT Infrastructure at a Data centre (Plan B).
The 485 Great South Road lease is due to end on the 30th of November 2024. While MTA holds an option to extend for two further two year periods, this has not been included in the right-of-use calculation as no decision has been taken yet to exercise the extension option. The asset is depreciated on a straight line basis over the life of the lease.
The Plan B Equipment Lease ended on the 31st of December 2023 and the asset and accumulated depreciated were written back.
In October 2023 MTA entered into a 3 year lease agreement for Kofax licenses. The asset is depreciated on a straight line basis over the life of the lease. Notes - continued
The 485 Great South Road lease is due to end on the 30th of November 2024. While MTA holds an option to extend for two further two year periods, this has not been included in the right-of-use calculation as no decision has been taken yet to
Notes - continued
The Plan B Equipment Lease ended on the 31st of December 2023 and the asset and accumulated depreciated were written back. In October 2023 MTA entered into a 3 year lease agreement for Kofax licenses. The asset is depreciated on a straight line basis over the life of the lease.
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024
21. Lease liability
28
The lease liability for the buildings has been calculated as the present value of the future lease payments. The incremental borrowing rate for this calculation ranges from 4.56% to 7.25% and the annual rental is $440,805 (excluding GST) per annum (2023: 7.25% and $266,571 per annum).
The Plan B equipment lease ended on the 31st of December 2023, The lease liability had been calculated as the present value of the future lease payments. The incremental borrowing rate for this calculation was 4.56% and the annual rental was $30,600 (excluding GST) per annum (2023: 4.56% and $61,200).
A new 3 year lease of Kofax licenses started on the 31st of October 2023, The lease liability has been calculated as the present value of the future lease payments. The incremental borrowing rate for this calculation is 7.25 % and the annual rental is $17,988 (excluding GST).
Notes - continued
A new 3 year lease of Kofax licenses started on the 31st of October 2023, The lease liability has been calculated as the present value of the
22. Contingent liabilities
There are no significant contingent liabilities as at 30 June 2024 (2023: nil).
23. Subsidiaries and associates
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2024
All subsidiaries have a balance date of 30 June.
23. Subsidiaries and associates (continued) Associates:
Following the sale of 60% of Vehicle Testing Group Limited (VTGL) and its subsidiaries on 31 October 2013, the balance date changed to 31 December for those companies, which are all incorporated in New Zealand. See note 9 above.
* DEKRA New Zealand Limited holds 100% of shares of Vehicle Testing New Zealand Limited.
Following the sale of 60% of Vehicle Testing Group Limited (VTGL) and its subsidiaries on 31 October 2013, the balance date changed to 31 December for those companies, which are all incorporated in New Zealand. See note 9 above.
Notes - continued
* DEKRA New Zealand Limited holds 100% of shares of Vehicle Testing New Zealand Limited.
24. Related party disclosures
Members of the group conduct transactions between themselves, as described below. There are no amounts receivable from related parties at balance date.
Equity interest in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 23 to the special purpose consolidated financial statements.
MTA (Northern Region) Incorporated
Per note 6 $1.112m (2023: $1.075m) of the $34.685m (2023: $39.158m) funds under management is held on behalf of MTA (Northern Region) Incorporated. A similar amount is disclosed as a liability under note 14(b).
Other transactions involving related parties
The compensation of the Directors and executives, being the key management personnel of the entity, is set out below:
MOTOR TRADE ASSOCIATION INCORPORATED GROUP
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
Summary of changes during the financial year
1- Chairman (Australasian Automotive Business Solutions Limited - from 1 November 2023 until 15 May 2024) and Executive Director (Australasian Automotive Business Solutions Limited - from 16 May 2024)
2- Member (Motor Trade Association Incorporated Group Finance Committee - from 1 November 2023)
3- President (Australasian Automotive Business Solutions Limited - until 31 October 2023 and again from 15 May 2024) and Director (AABSL - November 2023 until 15 May 2024)
4- Director (Motor Trade Association Incorporated Group - until 31 August 2023)
5- Member (Motor Trade Association Incorporated Group Remuneration Committee - from 1 November 2023)
6- Director (Motor Trade Association Incorporated Group - until 31 October 2023)
7- Director (Motor Trade Association Incorporated Group - from 1 November 2023)
8- Director (Australasian Automotive Business Solutions Limited - from 1 October 2023)
related party debts have been written off or forgiven during the year.
Summary of changes during the financial year
1- Chairman (Australasian Automotive Business Solutions Limited - from 1 November 2023 until 15 May 2024) and Executive Director (Australasian Automotive Business Solutions Limited - from 16 May 2024)
2- Member (Motor Trade Association Incorporated Group Finance Committee - from 1 November 2023)
3- President (Australasian Automotive Business Solutions Limited - until 31 October 2023 and again from 15 May 2024) and Director (AABSL - November 2023 until 15 May 2024)
4- Director (Motor Trade Association Incorporated Group - until 31 August 2023)
5- Member (Motor Trade Association Incorporated Group Remuneration Committee - from 1 November 2023)
6- Director (Motor Trade Association Incorporated Group - until 31 October 2023)
7- Director (Motor Trade Association Incorporated Group - from 1 November 2023)
8- Director (Australasian Automotive Business Solutions Limited - from 1 October 2023)
No related party debts have been written off or forgiven during the year.
25. Financial Instruments
Market Risk and Managements Objectives
The Group’s activities expose it primarily to financial risks of changes in foreign currency exchange rates, changes in interest rates and other price risk. MTA Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The use of financial derivatives is approved by the Board of Directors.
Foreign Currency Risk Management
Foreign Currency risk relates to transactions denominated in foreign currencies; and exposures to exchange rate fluctuations arise. MTA has no hedge or use forward rates as the amount of trade in foreign currency is minimal.
Interest Rate Risk Management
Interest rate risk relates to risks on movement of interest rates on borrowed funds. The Group currently has no externally borrowed funds.
Other Price Risk Management
The Group is exposed to equity price risks arising from equity investments.
Some of the equity investments are in unlisted entities (private equity providers) while are held for investment purposes, the Group does not actively trade these investments.
The Group has a balanced portfolio split between income and equities. These investments are approved by the Investment sub committee (of the Board) in line with the SIPO . In accordance with the policy, the Group invests through professional fund managers and with the advice of a professional investment advisor.
There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured.
GROUP NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
25. Financial Instruments (continued)
NOTES TO THE SPECIAL PURPOSE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
Notes - continued
Total liabilities 21,604
26. Subsequent events
On the 2nd of July 2024 the Motor Trade Association Incorporation (MTA) re-registered under the Incorporated Societies Act 2022 and a new Constitution for it came into force on that date. From the FY25 year onwards MTA will be required to produce fully compliant NZ IFRS RDR financial statements.
On the 27th August 2024 the Motor Group Investments Limited (MGIL) board resolved to provide $1m of product development funding during the FY25 year to it's 100% owned subsidiary AABSL.
On the 25th September 2024 MTA received from it's associate, Dekra a cash dividend of $1.8m which was fully imputed.
(2023-On the 25th July 2023 the Motor Group Investments Limited (MGIL) board provided a letter of comfort to it's 100 % owned subsidiary AABSL, that it would fund to AABSL, over the period to 31st December 2024, up to $2.25M for the purposes of a Product Modernisation Project (Build Phase). This funding is subject to the adherence of project related milestones and criteria. Dekra declared a dividend on the 22nd of June 2023 amounting to $1.72m which was paid to MGIL on the 25th of September 2023.)
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