Summary of Board Meetings – Global Motor Manufacturers Australia Pty Ltd

Work-Paper
Completed by Audit Manager, Jessica Lee

Aim:
Identify operational and strategic decisions and which have the potential to impact the financial statements.

Method:
Collect minutes from board meetings throughout the financial period and summarise key items which have
the potential to impact the financial statements.

The following list outlines the board meetings held throughout the year:

Meeting Date
Meeting 1 - 15 July
Meeting 2 - 15 September
Meeting 3 - 15 November
Meeting 4 - 15 January
Meeting 5 - 15 March
Meeting 6 - 15 May
Work Performed:

Meeting Date Summary (Key Points)

Meeting 1 - 15 July
- Legal Counsel has provided an update regarding the
potential recall of windscreens. The Board was notified
that the potential cost of the recall is approximately
$22m and is expected to commence in the following
financial year.

- The CFO has provided the board with options around

investing cash balances. The Board decided that the
stability and risk profile of term deposits was in the best
interests of the company, even though the returns are
at a historic low.

- No other items of significance noted.

Meeting 2 - 15 September
- The COO provided the board with an update of the
“production line optimisation project”.
- The project is aimed at modernising the production
line by investing in new robotics and improving the
safety record of the company.
- This project is expected to reduce total headcount
on the production line by 15%, however these
people will be reallocated to other areas within the
company due to their depth of experience and
knowledge.
- The total cost of the project is $40m and it is
expected to be completed within 12 months.
- The ongoing cost of managing the new production
line system will be around $18m per year.

- No other items of significance noted.

Meeting 3 - 15 November - No items of significance noted.

Meeting 4 - 15 January - The CFO provided a mid-year financial update to the

board which highlighted the following points:
- The company’s largest competitor, Alan Key’s
Spares entered into liquidation in August and the
company has seen an increase of 30% in new
customers.
- Performance in the previous 6 months has been
above expectation with the company experiencing
little disruption from the “production line
optimisation project’.
- Occupancy expenses for the main production
plant increased in line with the lease agreement
(approximately 3.5%).
- Employee salaries are due to increase by 2.5%
over the coming 12 months to ensure they remain
competitive with the market.

- No other items of significance noted.

Meeting 5 - 15 March - Due to unprecedented growth a piece of vacant land

located in Brisbane has been purchased and is due to
settle in May. Construction on the new site is not due
to commence for a further 6 months. The new site will
be partially bank-funded via a $10m interest only loan.
The company will need to provide $6m in cash to
successfully complete the transaction.

- A Government grant for $5m has been awarded to the

company for further investment and research into
advancements in Australia’s manufacturing industry.
The Grant will be received on 31 March.

- No other items of significance noted.

Meeting 6 - 15 May - The COO provided a further update of the “production

line optimisation project” and highlighted that it has
been delivered under budget and ahead of time. No
other items of significance noted.

- No other items of significance noted.