MOTORCYCLE HOLDINGS L IM ITED ANNUAL REPORT 2020 3MotorCyle Holdings Limited – Annual Report 2020MotorCyle Holdings Limited – Annual Report 2020 2 Contents 04 Chair’s Report 06 Managing Director’s Report 10 Directors’ Report 26 Lead Auditor’s Independence Declaration 28 Consolidated Statement of Profit or Loss and Other Comprehensive Income 29 Consolidated Statement of Financial Position 30 Consolidated Statement of Changes in Equity 31 Consolidated Statement of Cash Flows 32 Notes to and Forming Part of the Consolidated Financial Statements 67 Directors’ Declaration 68 Independent Auditor’s Report 74 Additional Information 77 Corporate Directory MotorCycle Holdings Limited (MTO:ASX) performed strongly during the year in challenging conditions, driven by a solid increase in demand for new and used motorcycles, a lower cost structure, expanded product offering and improved dealer network. 5MotorCyle Holdings Limited – Annual Report 2020MotorCyle Holdings Limited – Annual Report 2020 4 Chair’s Report MotorCycle Holdings Limited (ASX: MTO), achieved a strong performance for the year to 30 June 2020 driven by a solid increase in sales for new and used bikes, a lower cost structure, expanded product offering, improved dealer network and COVID-19 government support programs. The financial year was characterised by challenging trading conditions, however the company’s performance in the last quarter exceeded expectations and was primarily driven by a sales resurgence in recreation and leisure products on the back of COVID-19 restrictions. Due to the improved trading conditions, your Directors have decided to declare a special dividend of 5 cents per share. Directors have not declared an ordinary dividend and intend to maintain strong cash reserves to protect against short term volatility and provide capacity for opportunities that may arise. Key features of the company’s financial performance for the year included sales revenue increasing 10.3% to $363,712,000 (2019: $329,887,000) with Underlying EBITDA increasing 53.6% to $27,617,000 (2019: $17,985,000). The company ended the year in a strong cash position increasing to $39,494,000 from $9,175,000 in 2019, so we have taken the opportunity to pay down debt by $20,000,000 in August. Net Profit after Tax and before impairment increased 81.9% to $15,176,000 up from $8,345,000 for the previous year. We decided to take a non-cash impairment of $24,296,000 against the carrying value of the wholesale segment’s intangible assets, principally goodwill from the Cassons acquisition. There is no impact on the company’s debt facilities or compliance with our banking covenants as an outcome of this impairment. This non-cash impairment impacted our profit result resulting in a net loss after tax of $9,120,000. Operationally, the company continued to outperform the market with overall motorcycle sales, including both new and used motorcycles, increasing 13.8% to 21,095 units for the year ended 30 June 2020, up from 18,536 units achieved in the previous year. New motorcycle sales increased 16.3% to 11,013 units (2019: 9,468 units), compared with the national market increase in new motorcycle sales of approximately 11.1%. Like for like new motorcycle sales increased 7.5%. The company grew its market share by securing approximately 11.1% of national new bike sales during the financial year, compared with 10.6% in the prior year. Used motorcycles sales increased 11.2% to 10,082 units (2019: 9,068 units) with sales improving across all brands. Retail accessories and parts revenue increased 4.1% and servicing and repair revenue increased 5.9%. Finance, insurance and mechanical protection plan income increased 5.8%. Cassons maintained profitability despite the challenging market and while there was pressure on margins, this business’ performance improved in the second half with sales up 7.4% for the year. While good progress was made in reducing operating expenses and excess accessory stock throughout the year, Directors decided to book a non cash stock obsolescence charge of $591,000 against excess inventory. There is no doubt the company’s strategy for the past three years of growth through acquisitions has diversified our revenue streams and strengthened the resilience of the company, which has been a crucial factor in enabling it to withstand the current uncertain trading conditions. The company’s solid performance in this year’s challenging environment is an outcome of the management team’s agile response to these uncertain market conditions combined with a disciplined focus on improving operational productivity and lowering the company’s cost structure and driving sales performance across the network. We employ more than 700 staff nationally who have been instrumental in delivering this strong performance, while also successfully integrating new dealerships into the business. David Foster CHA IR The company’s focus for this forthcoming year will be to continue to improve the productivity of its dealerships, drive new bike sales with additional brands, add additional suppliers to the wholesale distribution business, and continue to improve its online sales presence. Your Directors are cautiously optimistic about the forthcoming year due to the renewed interest in motorcycles as a great leisure product however the current heightened sales demand momentum is expected to temper particularly if there are future shutdowns driven by the COVID-19 pandemic. I would like to sincerely thank the company’s management team and employees for their commitment, as well as our shareholders and customers for their continued support as we drive the business forward during these uncertain times. David Foster Chair Due to the improved trading conditions, your Directors have decided to declare a special dividend of 5 cents per share. 7MotorCyle Holdings Limited – Annual Report 2020MotorCyle Holdings Limited – Annual Report 2020 6 Managing Director’s Report Without doubt financial year 2020 has been a most challenging year. With motorcycle sales falling for most of the year we went into the COVID-19 pandemic with considerable concern. I am pleased to confirm that we were able to expand the network, reduce costs extensively across the group, and significantly grow our underlying EBITDA and profit after tax for the year. Importantly, we were able to improve our net debt position considerably and finished the year with $39,494,000 in cash, up from $9,175,000 the previous year. These results have come from a tremendous effort by our management team and staff, and I must say that I couldn’t be prouder of their achievements during these trying times. In late March early April, we saw a dramatic slow down in sales. Virtually overnight our sales reduced by 50%. We took immediate and significant action to protect the business from the sudden change in conditions. These actions not only helped to limit the immediate impact to profitability, but also to set us up to benefit from the upturn in sales that we saw in May and June. Aggressive cost savings, both before and during the COVID-19 crisis, combined with aggressive marketing and JobKeeper assistance, all helped to achieve an exceptional result, given the challenging circumstances. Despite the immediate challenges we continued to expand the network by adding six new Indian dealerships to our existing sites, and building and relocating a new Harley Davidson dealership in Melbourne, in the second half. Two new dealerships were added to the network in the first half of the year, Northside Harley Davidson in Melbourne, and Canberra Motorcycle Centre. Both additions performed well and have exceeded our expectations so far. We have continued to increase our offering in the recreational, leisure and agricultural markets, by adding Polaris Off Road vehicles to two of our Sydney MCAS locations, as well as Yamaha WaveRunners and Stihl power products to our Cairns dealership. Despite the difficult trading conditions, we were able to grow new motorcycle sales by 16.3% to 11,013 units, which increased our market share to 11.1% of the total market, up from 10.6% the previous year. Used motorcycle sales grew by 11.2% to 10,082 units. Both divisions saw an increase in retained margins and a considerable increase in gross profit. External wholesale accessories sales through Cassons grew by 7.4% but profit was impacted by unfavourable exchange rates and an additional write down of excess stock. Retail accessories grew by 4.1% with gross down 2.7%. Service gross grew by 5.8% and retail finance and insurance commission by 5.1%. Our wholesale finance investment in the joint venture with Allied Credit has had to increase provisions for potential losses due to COVID-19 and is now expected to return a profit in FY21. Over the course of the year we continued our program of refurbishing dealerships as required and invested in new showrooms to cater for new brands added to the group. Despite the partial closure of six of our Victorian dealerships in recent weeks we are still cautiously optimistic of growing the business group. Our broad product offering and diversified geographical locations, combined with a renewed interest in leisure products and a lower cost base, gives us reason to believe that we can continue to grow the business. Significant sales in entry level motorcycles will help to create demand in future years as customers move up to larger models. It is still of course a very changeable market, but we believe we have an agile management team that is capable of moving quickly to not only protect the business going forward, but also of taking advantage of the opportunities as they arise. David Ahmet Managing Director David Ahmet MANAGING D IRECTOR “Despite the difficult trading conditions, we were able to grow new motorcycle sales by 16.3% to 11,013 units, which increased our market share to 11.1% of the total market, up from 10.6% the previous year.” 9MotorCyle Holdings Limited – Annual Report 2020MotorCyle Holdings Limited – Annual Report 2020 8 Results and Operational Overview Revenue increased 10.3% to $363,712,000 (2019: $329,887,000) Underlying EBITDA increased 53.6% to $27,617,000 (2019: $17,985,000) Special dividend of 5 cents per share declared amounting to $3,085,000 Cash position increased strongly to $39,494,000 (2019: $9,175,000) Total motorcycle sales increased 13.8% to 21,095 units (2019: 18,536 units) National market share for new bike sales grew to approx 11.1% from 10.6% New motorcycle sales increased 16.3% to 11,013 units (2019: 9,468 units) Used motorcycles sales increased 11.2% to 10,082 units (2019: 9,068 units) Added 6 Indian, 2 Polaris, 2 Husqvarna, 4 Royal Enfield, Peugeot, and Benelli showrooms to MCA and TeamMoto stores Now sell 16 top global motorcycle brands Net Profit after Tax and before impairment increased 81.9% to $15,176,000 (2019: $8,345,000) Non cash impairment of $24,296,000 recognised on goodwill from Cassons acquisition > > > > > > “Despite the immediate challenges we continued to expand the network by adding six new Indian dealerships to our existing sites…” 11 MotorCyle Holdings Limited – Annual Report 2020MotorCyle Holdings Limited – Annual Report 2020 10 The
directors present their report together with the consolidated financial
statements of MotorCycle Holdings Limited (‘the Company’) and its controlled entities (‘the Group’) for the year ended 30 June 2020 and the auditor’s report thereon. Directors The directors of the Company at any time during or since the end of the financial year are: DAVID FOSTER Chair, Independent Non-Executive Director Appointed 8 March 2016 (Non-Executive Director) Appointed 22 July 2016 (Interim Chair) Appointed 23 August 2016 (Chair) David has over 25 years’ experience in the financial services industry, with experience spanning across management, distribution, technology and marketing in retail banking. David is currently a non-executive director of Genworth Mortgage Insurance Australia Limited, G8 Education and Bendigo and Adelaide Bank Limited and was previously CEO of Suncorp Bank. David has a Master of Business Administration, a Bachelor of Applied Science, is a Senior Fellow with Financial Services Institute of Australasia and a Graduate of the Australian Institute of Company Directors. Current Directorships of Other Listed Entities G8 Education (appointed January 2016, effective from February 2016) Genworth Mortgage Insurance Australia Limited (appointed May 2016) Bendigo and Adelaide Bank Limited (appointed September 2019) Directorships of Listed Entities Over Last 3 Years Kina Securities Limited (appointed April 2015, ceased April 2018) Thorn Group Limited (appointed December 2014, ceased October 2019) DAVID AHMET Managing Director and Chief Executive Officer Appointed 30 June 2011 David is the Founder, Managing Director and Chief Executive Officer of MotorCycle Holdings. David has successfully led the expansion of MotorCycle Holdings since 1989 from 1 location to over 40 locations. David has over 30 years’ experience in motorcycle dealerships and is responsible for leading the management team and direction of the business, as well as maintaining relationships with the Company’s suppliers and manufacturers. David also sits on the Board of MotorCycle Finance Pty Ltd, as a representative of the Company. Current Directorships of other Listed Entities Nil Directorships of Listed Entities over last 3 years Nil Directors’ Report WARREN BEE Independent Non-Executive Director Appointed 30 June 2011 Warren has been a director of MotorCycle Holdings since June 2011 and from 2007 to 2011 chaired the Company’s advisory board. Warren also currently serves on the board of LEP Colour Printers. Warren has also held chief executive officer and line management roles across a range of industries. Warren is a Fellow of the Institute of Chartered Accountants Australia and a member of the Australian Institute of Company Directors. Committee Membership Chair of the Nomination and Remuneration Committee Member of the Audit and Risk Committee Current Directorships of other Listed Entities Nil Directorships of Listed Entities over last 3 years Nil RICK DENNIS Independent Non-Executive Director Appointed 23 August 2016 with effect from 1 September 2016 Rick joined the Board of the Company on 1 September 2016 after a 34-year career with Ernst and Young in Australia and the Asia-Pacific. He was Queensland Managing Partner from 2001-07 and again for 2014. Rick established and led EY Australia’s China Business Group in 2005 and was CFO and Deputy COO in the Asia-Pacific from 2010-13. Rick sat on the firm’s inaugural Asia-Pacific executive board and a number of EY global boards and committees. Rick is currently non-executive director of listed entity Apiam Animal Health Limited and a member of the Queensland Advisory Board for Australian Super and EWM Group. Committee Membership Chair of the Audit and Risk Committee Member of the Nomination and Remuneration Committee Current Directorships of other Listed Entities Apiam Animal Health Limited (appointed November 2016) Directorships of Listed Entities over last 3 years Omni Market Tide Limited (appointed March 2016, ceased August 2017) Shine Corporate Limited (appointed August 2017, ceased January 2019) 13 MotorCyle Holdings Limited – Annual Report 2020 Directors’ Report continued… MotorCyle Holdings Limited – Annual Report 2020 12 PETER HENLEY Independent Non-Executive Director Appointed 1 March 2017 Peter has a long and distinguished career in financial services and in particular consumer and commercial finance. Peter previously held senior management positions at AGC Limited, CEO of Nissan Finance Corp Ltd and CEO of GE Money in Australia and in South East Asia. Since retiring from executive roles in October 2006, Peter has been an Independent Non-Executive Director of Adtrans Group, MTA Insurance Ltd, Thorn Group Ltd and more recently AP Eagers Ltd where he has served on the Audit and Risk committ
ee since 2006. Peter is a Fellow of the Australian Institute of Management and a member of the Australian Institute for Company Directors. Committee Membership Member of the Nomination and Remuneration Committee Member of the Audit and Risk Committee Chair of MotorCycle Finance Joint Venture Committee (appointed 1 April 2018) Current Directorships of other Listed Entities Nil Directorships of Listed Entities over last 3 years Nil ROB CASSEN Non-Independent Non-Executive Director Appointed 31 October 2017 (Executive Director) Appointed 21 December 2018 (Non-Executive Director) Rob has 34 years’ experience in the motorcycle industry. He joined the Board as part of the Company’s acquisition of the Cassons Group, one of Australia’s largest motorcycle and bicycle clothing and accessory distribution companies. Rob has developed strong supplier relationships with major international and world leading brands and manufacturers and has created one of the market leading private label brands in Australia. Committee Membership Member Nomination and Remuneration Committee (appointed 21 December 2018) Member Audit and Risk Committee (appointed 21 December 2018) Current Directorships of other Listed Entities Nil Directorships of Listed Entities over last 3 years Nil Company Secretary Nicole
Spink (FCPA FGIA FCG(CS)) was appointed as Company Secretary on 28 May
2018. Nicole also holds the role of Group Financial Controller and
has held CFO and other senior finance roles in both the retail and
automotive industries. Nicole is a Fellow of CPA Australia, a Fellow of the Governance Institute of Australia, and a Fellow of the Chartered Governance Institute. Directors’ meetings The
number of Directors’ meetings (including meetings of committees of
Directors) and number of meetings attended by each of the Directors of the Company during the financial year are: Director Board Meetings Audit & Risk Committee (ARC) Meetings Nomination and Remuneration Committee (NRC) Meetings Attended Held Attended Held Attended Held David Foster 16 16 – – – – David Ahmet 16 16 – – – – Warren Bee 16 16 3 3 3 3 Rick Dennis 16 16 3 3 3 3 Peter Henley 16 16 3 3 3 3 Rob Cassen 16 16 3 3 3 3 Principal activities The Company’s registered office and principal place of business is 68 Moss Street, Slacks Creek, Queensland, 4127. The
principal activities of the Group during the year were the ownership
and operation of motorcycle dealerships engaging in the sale of new motorcycles,
used motorcycles, accessories and parts, finance, insurance as well as
service and repair and the ownership and operation of motorcycle accessories businesses engaging in the wholesaling and retailing of motorcycle accessories. Operating and financial review MotorCycle
Holdings Limited (ASX:MTO) performed strongly during the year in
challenging conditions, driven by a solid increase in demand for
new and used motorcycles, a lower cost structure, expanded product
offering and improved dealer network. Performance in the last
quarter exceeded expectations following a resurgence in demand for
recreation and leisure products upon the easing of COVID-19 restrictions. Key
features of the company’s financial result include sales revenue
increasing 10.3% to $363,712,000 (2019: $329,887,000) with underlying EBITDA increasing 53.6% to $27,617,000 (2019: $17,985,000). The company ended the year with a strong cash position of $39,494,000, up from $9,175,000 in 2019. Net profit after tax and before impairment increased 81.9% to $15,176,000, up from $8,345,000 for the previous year. A
$24,296,000 non-cash impairment of goodwill which arose on the
acquisition of Cassons has been recognised. This impairment charge had no impact on the company’s debt facilities or compliance with banking covenants. The
company continued to outperform the market with total motorcycle sales
increasing 13.8% to 21,095 units for the year ended 30 June 2020 (2019: 18,536 units). 15 MotorCyle Holdings Limited – Annual Report 2020 Directors’ Report continued… MotorCyle Holdings Limited – Annual Report 2020 14 New motorcycle sales increased 16.3% to 11,013 units (2019: 9,468 units), compared with the national market increase in new motorcycle sales of approximately 11.1%. Like for like new motorcycle sales increased 7.5%. The company grew its market share by securing approximately 11.1% of national new bike sales during the financial year, compared with 10.6% in the prior year with sales improving across all brands. Used motorcycles sales increased 11.2% to 10,082 units (2019: 9,068 units). Retail accessories and parts revenue increased 4.1% and servicing and repair revenue increased 5.9%. Finance, insurance and mechanical protection plan income increased 5.8%. Cassons maintained profitability in a challenging market. Whilst there was pressure on gross profit margins, Cassons’ performance improved in the second half with external sales up 7.4% for the year. Good progress was made in reducing excess inventory, however an additional one-off non-cash stock obsolescence charge of $591,000 has been recognised due to uncertainty caused by the COVID-19 pandemic. Directors are cautiously optimistic about the forthcoming year however the recent increased sales momentum is expected to temper, particularly if there are further restrictions introduced as a result of the COVID-19 pandemic. Dividends Declared and Paid during the Financial Year There were no dividends declared or paid during the Financial Year. Declared after the end of the Financial Year Directors have declared a special dividend of 5 cents per share amounting to $3,085,000 payable on 30 September 2020 with a record date of 9 September 2020. There is no dividend re-investment plan in operation. Events Subsequent to Reporting Date There continues to be significant uncertainty relating to the future impacts of the pandemic, with a number of states still experiencing high case numbers. There has been no significant impact of the pandemic on the Group’s operations subsequent to 30 June 2020 but management continue to closely monitor the potential impacts on the Group. Likely developments The Group will continue to pursue its policy of increasing profitability and market share in the markets within which it operates during the next financial year. Environmental regulation The Group is subject to various environmental regulations under both Commonwealth and State legislation. The Directors believe that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any significant breach of those environmental requirements as they apply to the Group during the period covered by this report. Indemnification and Insurance of Officers and Auditors The Company has indemnified the Directors and Officers for costs incurred in their capacity as a Director or Officer, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the Company paid insurance premiums in respect of a contract to insure the Directors and Officers of the Company against a liability to the extent permitted by the Corporations Act 2001. The insurance contract prohibits disclosure of the nature of liability and the amount of the premium. During or since the end of the financial year the Company has not indemnified or made a relevant agreement to indemnify an auditor of the Company or of any related body corporate against a liability incurred as such an officer of auditor. In addition, the Company has not paid, or agreed to pay, a premium in respect of a contract insuring against a liability incurred by an auditor. Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. Underlying EBITDA Underlying
EBITDA is a non-GAAP financial measure, and is calculated as earnings
before non-bailment interest, taxation, depreciation, amortisation
and acquisition expenses. A reconciliation between net profit after tax
and Underlying EBITDA is presented as follows: 30 Jun 2020 $’000 30 Jun 2019 $’000 Net profit after tax (9,120) 8,345 Add: Bank interest expense 1,529 2,121 Income tax expense 6,702 3,702 Depreciation1 and amortisation 3,787 3,790 Impairment 24,296 – Acquisition costs 423 27 Underlying EBITDA 27,617 17,985 1 Excludes depreciation on ROU assets Non-audit services During
the year KPMG, the Group’s auditor, has performed certain other
services in addition to the audit and review of the financial statements. The total remuneration of the auditor is disclosed in Note 30 of the Financial Report. For
those activities, the board has considered the non-audit services
provided during the year by the auditor and in accordance with written advice
provided by the Audit and Risk Committee, is satisfied that the
provision of those non-audit services by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons: all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the auditor, and the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risk and reward. Details of the amounts paid to KPMG for non-audit services provided during the year are set out below: 2020 $ Services other than audit and review of financial statements: Tax compliance services 72,000 Indirect tax compliance services 11,000 Total non-audit services 83,000 17 MotorCyle Holdings Limited – Annual Report 2020 Directors’ Report continued… MotorCyle Holdings Limited – Annual Report 2020 16 Lead Auditor’s Independence Declaration A
copy of the Auditor’s Independence Declaration as required under
section 307C of the Corporations Act 2001 is attached on page 26 and forms part of this report. Rounding Off The
Company is of a kind referred to in ASIC Corporation Instrument
2016/191, relating to the ‘rounding off’ of amounts in the Directors’ Report
and the consolidated financial statements which have been rounded off
to the nearest thousand dollars, unless otherwise stated, in accordance with that Instrument. Deeds of Cross Guarantee At
the date of this report and during the Financial Year, the Company is
within the class of companies affected by ASIC Corporations (Wholly owned
Companies) Instrument 2016/785. The nature of the deed of cross
guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee. Directors’ Interests The
relevant interest of each Director in the shares and rights or options
over such shares issued by the Company, and other related bodies corporate,
as notified by the Directors to the ASX in accordance with section
205G(1) of the Corporations Act 2001 at the date of this report is as follows: Name Ordinary Shares Rights Over Ordinary Shares David Foster 44,949 – Warren Bee 38,958 – Rick Dennis – – Peter Henley 25,534 – Rob Cassen 3,363,833 – David Ahmet 11,288,994 446,323 Remuneration Report – Audited The
information provided in this Remuneration Report has been prepared in
accordance with section 300A of the Corporations Act 2001 (Cth). Key Management Personnel The
Remuneration Report outlines remuneration for those people considered
to be Key Management Personnel (KMP) of the Group during the
Reporting Period. KMP are persons having authority and responsibility
for planning, directing and controlling the activities of MotorCycle Holdings Limited. KMP consist of: non-executive directors; and executive directors and senior executives. The table below summarises details of KMP of the Group for the financial year ended 30 June 2020, their roles and appointment/ cessation dates. Key Management Personnel during the Reporting Period Name Role Appointment Date Non-Executive Directors David Foster Chair, Independent, Non-Executive Director 8 March 2016 Warren Bee Independent, Non-Executive Director 30 June 2011 Rick Dennis Independent, Non-Executive Director 23 August 2016 Peter Henley Independent, Non-Executive Director 1 March 2017 Rob Cassen Non-Independent, Non-Executive Director 21 December 2018 Executive Directors and Senior Executives David Ahmet Managing Director 30 June 2011 Bob Donovan Chief Financial Officer 20 May 2019 Remuneration Governance The
following diagrammatic representation shows the framework the Board has
in place to establish and review remuneration for KMP and employees of the Group: Management provides information relevant to remuneration decisions and makes recommendations to the NRC. Management Nomination & Remuneration Committee Board NRC is delegated to review and make recommendations to the Board on remuneration policies for non-executive directors, senior executives and all employees including incentive arrangements and awards. The NRC can appoint remuneration consultants and other external advisors to provide independent advice. Approves the overall remuneration framework and policy, ensuring it is fair, transparent and aligned with long term outcomes. Approves incentive arrangements and awards for Executive Directors and Senior Executives. Approves remuneration of non- executive directors within the shareholder approved fee cap. 19 MotorCyle Holdings Limited – Annual Report 2020 Directors’ Report continued… MotorCyle Holdings Limited – Annual Report 2020 18 Non-Executive Director Remuneration Policy A
copy of the remuneration policy for non-executive Directors is
available on the Company’s website. The Board’s Non-Executive Director remuneration policy is to: Provide a clear fee arrangement that avoids potential conflicts of interest associated with performance incentives; Remunerate Directors at market rates for their commitment and responsibilities; and Obtain independent external remuneration advice when required. Non-Executive
directors receive remuneration for undertaking their role. They do not
participate in the Company’s incentive plans or receive any variable remuneration. Non-Executive Directors are not entitled to retirement payments. The
aggregate Non-Executive Director remuneration cap approved by
shareholders prior to listing is $600,000 per annum (inclusive of superannuation
contributions). The Board determines the distribution of Non-Executive
Director fees within the approved remuneration cap. Remuneration of Non-Executive Directors The following table sets out the Annual Board and Committee fees (inclusive of superannuation) as at the date of this Report: Non-Executive Directors Board Member Board Chair Audit & Risk Committee Nomination & Remuneration Committee MotorCycle Finance JV Committee Total Fees $ David Foster 80,000 95,000 – – – 175,000 Warren Bee 70,000 – 5,000 10,000 – 85,000 Rick Dennis 70,000 – 10,000 5,000 – 85,000 Peter Henley 70,000 – 5,000 5,000 10,000 90,000 Rob Cassen 70,000 – 5,000 5,000 – 80,000 Total 360,000 95,000 25,000 25,000 10,000 515,000 Executive Director and Senior Executive Remuneration Policy The Board’s policy for determining the nature and amount of remuneration for the Executive Director and Senior Executives is: Provide for both fixed and performance-based remuneration; Provide a remuneration package based on an annual review of employment market conditions, the Group’s performance and individual performance; and Obtain independent external remuneration advice when required. Remuneration
and other terms of employment for Senior Executives are forma