annual report
Annual Financial Statements 30 June 2023
Acumentis Group Limited (ASX: ACU)
ABN 50 102 320 329
TABLE OF CONTENTS
1. Introduction
4. Risk
Chairman’s Report ..................................... 08
Significant Estimates & Judgements ........ 67
CEO’s Report.............................................. 10
Financial Risk Management ...................... 67
Capital Management ................................. 72
2. Financial statements
Directors’ Report ....................................... 16
5. Group structure
Auditor’s Independence Declaration ....... 33
Business Combinations ............................. 77
Statement of Profit or Loss and Other
Comprehensive Income ............................ 34
Statement of Financial Position ................ 35
Statement of Changes in Equity ................ 36
Statement of Cash Flows .......................... 37
3. Notes to consolidated financial
statements
How the Numbers are Calculated ............. 40
Revenue ..................................................... 40
Material Profit or Loss Items ..................... 41
Other Income and Expense Items ............ 41
Income Tax Expense ................................. 42
Financial Assets and Liabilities ................. 43
Non Financial Assets and Liabilities ......... 50
Equity ......................................................... 62
Other Reserves .......................................... 64
Cash Flow Information .............................. 65
Interests of Other Entities ........................ 80
6. Unrecognised items
Contingent Liabilities ................................ 83
Commitments ............................................ 83
Events occurring after the
reporting period......................................... 84
7. Other information
Related Party Transactions ....................... 87
Share-based Payments ............................. 88
Remuneration of Auditors ......................... 90
Earning Per Share ...................................... 90
Parent Entity Financial Information .......... 92
Going concern ........................................... 92
Summary of Significant
Accounting Policies ................................... 93
7. Directors’ declaration
Directors’ Declaration ..............................107
Independent Auditor’s Report .................108
ASX Additional Information .....................112
Introduction
ASX:ACU FY22-23
ACUMENTIS 2023 ANNUAL REVIEW
Acumentis continues its unwavering commitment to delivering service excellence and ensuring decision
certainty for our valued clients nationwide. Homeowners, lenders, and corporations consistently rely on
Acumentis for trusted property valuations and expert guidance.
The past year has been marked by a rapidly changing property market, post pandemic recovery, and the
influence of significant cash rate increases. In response, the Acumentis team has shown remarkable
agility while maintaining a steadfast focus on our strategic objective: diversification.
Our primary focus throughout FY23 has centred on diversifying our services and strengthening our team’s
capabilities to align with this continuing transformation.
Acumentis has been delivering property valuation expertise since 1905 to financial
institutions, governments, companies, and individuals across Australia. Acumentis provides
this expertise nationwide from 45 metropolitan, regional and rural locations, with a team
of over 330 property professionals.
Acumentis Annual Report 2023
Pg 5
OUR SERVICES
At Acumentis, we remain resolute in our commitment to diversify our service offerings. This commitment
has not only shaped our marketing and business development strategies but has also driven our
recruitment efforts. Recognising the evolving needs of our clients and the dynamic market conditions, and
we have responded accordingly.
Our dedication to understanding the unique challenges faced by our professional services and government
clients has fostered deeper engagement and collaboration. This has enabled us to modify and customise
our services to meet their specific requirements, resulting in the creation of effective and efficient solutions
and streamlined internal processes.
Throughout the financial year, we have consistently invested in refining our services, bolstering internal
training and processes, nurturing meaningful relationships, and increasing awareness across various
segments, including family law, tax depreciation, strata, self-managed super funds, asset advisory, and
insurance valuations. These efforts have been rewarded by increased fees from private and corporate
clients, as well as a broader recognition of the Acumentis brand within these diverse audiences.
OUR PEOPLE
Externally, FY23 has seen an unwavering focus on client relationships and the client experience. We have
embraced technological enhancements, including IT&T infrastructure, to drive operational efficiencies
and we are striving to deliver service excellence at every interaction.
Internally, our commitment extends to the growth and reward of our dedicated team members. We have
refined structures, enhanced training programs, and provided robust professional development support.
This dedicated focus on upskilling aims to foster national consistency in our operational approach,
ensuring that our clients receive the same high level of service, regardless of location.
Our commitment to working as ONE TEAM and upholding our Guiding Principles remains at the core of the
Acumentis culture and is celebrated through our internal awards and promotions programs. This company
culture continues to attract and retain talented team members in a restricted labour market.
AT ACUMENTIS OUR PURPOSE IS TO PROVIDE:
• Decision certainty for our clients
• Career certainty for our people
•
Investment certainty for our shareholders
Pg 6
Acumentis Annual Report 2023
OUR GUIDING PRINCIPLES
Our values system acts like our compass, guiding us in the right direction and navigating us in times of
uncertainty. Our team use our Guiding Principles in their daily interactions and decision making.
Never Quit: As individuals and a team, we continue to grow, improve and innovate. We consider all available
options before committing to a decision, then go the extra mile to ensure we have decision certainty. We
are resilient, and dependable, no matter how tough the problem.
Embrace Equality: We strive to make available opportunities accessible equally by all.
Support our People: Our decisions are always made with our people and clients at front-of-mind, to create
a positive and lasting impact. We all benefit and succeed.
Walk the Talk: We do what we say we are going to do. We act with integrity and are accountable for our
actions and decisions. We behave professionally whenever and wherever we conduct business.
As we move forward into FY24, we do so with a sense of purpose, an unwavering commitment to our
clients, and an agile mindset that empowers us to navigate the evolving landscape of the property market.
Acumentis remains dedicated to delivering the highest standards of service excellence and decision
certainty, and we are excited to share our continued progress and achievements.
Acumentis Annual Report 2023
Pg 7
CHAIRMAN’S REPORT
Pg 8
“ My fellow Board members continue
to work tirelessly setting and
refining the strategic direction of
the company, maintaining strong
governance and enabling the
business to achieve its goals.”
Dear Shareholders,
It is with pleasure I present my Chairman’s report for the FY23.
Several years ago, Acumentis embarked on an ambitious strategy to reimagine the then loosely structured,
predominantly mortgage valuation business into a national business, under single ownership, with less
reliance on mortgage valuations and diversified both geographically and by the professional services we
offer.
The business invested heavily in its new branding and marketing strategies, acquisitions to complete the
geographical footprint and consolidate ownership, its people and its IT&T systems. At the same time,
executive management has worked to restructure the business to deliver an agile, efficient and purposeful
business that delivers exceptional service and value to its growing list of clients.
The business has faced many challenges over this period and has weathered these due to the resilience
and clear focus of its management and employees.
FY23 can be seen as turning point in the delivery of this strategy with the business delivering an improved
second half result despite a challenging economic environment including a steep tightening of interest
rates and high inflation.
Despite the strong second half result, there is still more to do. The business must continue to further
diversify its services and focus on revenue growth, thereby enabling Acumentis to deliver appropriate
levels of return to our shareholders now and well into the future.
The Board, senior executives and staff are driven by clear strategies and goals for the business and expect
to deliver on these through FY24 and beyond to cement Acumentis as the premier, Australian owned,
property advisory business.
The achievements over the last few years, and FY23 in particular, would not have been possible without the
incredible hard work, focus and professionalism of our staff across the country and the senior leadership
group headed by our CEO Tim Rabbit and CFO John Wise.
My fellow Board members continue to work tirelessly setting and refining the strategic direction of the
company, maintaining strong governance and enabling the business to achieve its goals.
I would like to personally thank our many stakeholders that have supported Acumentis over many years
including our clients, ongoing and new, and of course our loyal shareholders.
Keith Perrett
Acumentis Chairman
Acumentis Annual Report 2023
Pg 9
CEO’S REPORT
Dear Shareholders
I am pleased to present my 2023 CEO’s Report to shareholders following a year in which Acumentis
has delivered a much improved financial performance built on the strategies implemented over the last
several years.
DIVERSIFICATION OF SERVICES
Throughout FY2023, we continued to diversify our services away from a reliance on mortgage valuation
work, and this strategy supported us well as mortgage valuations fell throughout the year as interest rates
rose. Our fees from corporate and private clients increased significantly and our revenues from financial
institutions have stabilised.
CORPORATE & PRIVATE
Jul 2 0 2 1
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GOVERNMENT
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FINANCIAL INSTITUTIONS
Jul 2 0 2 1
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Pg 10
Acumentis Annual Report 2023
Mortgage related work has fallen from 72% of fees in FY22 to 61% of fees in FY23 and we expect this
trend to continue as we successfully build our non-mortgage advisory services.
NON-MORTGAGE FEE GROWTH
M ar 2 0 2 3
A pr 2 0 2 3
M ay 2 0 2 3
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Fe b 2 0 2 3
Mortgage Related Other % Other
“
Throughout FY2023, we continued to
diversify our services away from a reliance
on mortgage valuation work, and this
strategy supported us well as mortgage
valuation volumes fell throughout the year
as interest rates rose”
Timothy Rabbitt - Managing Director & CEO
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Pg 11
COST OPTIMISATION
Through FY23, as well as driving revenue growth and diversification, we have focussed on delivering a
more streamlined, agile business with a focus on achieving efficiencies across service delivery and support
functions.
This has seen over $2M reduction in employee expenses and almost $1M reduction in overhead expenses
compared to FY22.
FY23 PERFORMANCE
Despite a $1.7M reduction in fees, we have seen our EBITDA improve 70% from $2.0M in FY22 to $3.4M
in FY23.
FY22 V FY23 EBITDA
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
FY22 EBITD A
Reduction in e m ploy m ent expense
Reductoin in revenue
Reduction in insurance expense
Reduction in IT&T expenses
Increase in other expenses
FY23 EBITD A
The success of our strategies is further demonstrated by the strong second half results where EBITDA
reached 11% and PBT 6% of revenues.
Pg 12
Acumentis Annual Report 2023
Revenue
27,426
27,943
55,369
26,767
26,933
53,700
1st Half
$’000
2nd Half
$’000
FY2022
$’000
1st Half
$’000
2nd Half
$’000
FY2023
$’000
Gain on de-recognition of investment in
associated entity
EBITDA
Operating profit / (loss)
Gain on de-recognition of investment in
associated entity
Acquisition costs expensed
Profit / (loss) before tax
1,539
-
1,539
-
-
-
28,965
27,943
934
(214)
56,908
2,035
38
26,767
26,933
53,700
580
(771)
2,835
1,498
3,415
727
-
1,539
(18)
(232)
(156)
1,421
-
-
-
-
-
-
(771)
1,498
727
1,101
252
1,539
(138)
1,653
MARKET OUTLOOK
While the tightening interest rates and high inflation pressures have dampened the mortgage valuation
market, population growth, lack of supply and the need to refinance a large number of fixed rate loans
established 2-3 years ago are expected to provide support through FY24.
With all levels of Government continuing to invest in infrastructure and a renewed focus on delivering the
required increase in dwellings over the medium term, the opportunities for Acumentis to successfully
deliver on its strategies are expected to remain.
EXPECTATIONS FOR FY24
The company anticipates continued growth in revenues and tight cost control leading to improved returns
to shareholders through FY2024 and beyond.
As we wrap up our reporting for FY2023, I would like to personally thank our Board of Directors, senior
executives and all our exceptional staff for their hard work over many years during which the business
weathered many challenges and is now emerging as a stronger business, with a renewed focus on
delivering value to our clients and stakeholders.
I would also like to thank our many loyal, long term, clients as well as the growing number of new clients
that have demonstrated via engaging with Acumentis, the value and decision certainty that our services
provide.
Finally, I would like to express my continued appreciation to our shareholders who have supported the
business through the challenges of the last few years and assisted the business rebuild and expand.
Timothy Rabbitt
Managing Director & CEO
Acumentis Annual Report 2023
Pg 13
Pg 13
Financial
statements
ASX:ACU FY22-23
Pg 14
Acumentis Annual Report 2023
TABLE OF CONTENTS
Directors’ report ....................................................................................................................................16
Remuneration report – audited .............................................................................................................22
Auditor’s independence declaration .....................................................................................................33
Consolidated statement of profit or loss and other comprehensive income .......................................34
Consolidated statement of financial position .......................................................................................35
Consolidated statement of changes in equity ......................................................................................36
Consolidated statement of cash flows ..................................................................................................37
Notes to the consolidated financial statements ...................................................................................38
How numbers are calculated ................................................................................................................40
Risk.........................................................................................................................................................66
Group structure .....................................................................................................................................76
Unrecognised items ...............................................................................................................................82
Other information ..................................................................................................................................86
Directors’ declaration ..........................................................................................................................106
Independent auditor’s report to the members ..................................................................................108
ASX additional information .................................................................................................................112
Acumentis Annual Report 2023
Pg 15
DIRECTORS’ REPORT
The Directors present their report together with the financial report of the Consolidated Entity, being
Acumentis Group Limited (“the Company”) and its controlled entities, for the year ended 30 June 2023
and the auditor’s report thereon.
Directors & Company Secretary
The Directors & Company Secretary of the Company in office at any time during or since the end of the
financial year are:
Keith Perrett
Independent Director
Chair of the Board
25/05/18 – current
Non-Executive director
01/02/18 - current
Audit & Risk Committee
22/02/18 – 21/11/19
21/02/21 – 22/04/21
Chair of Audit & Risk
Committee
08/11/22 – current
Nominations & Remuneration
Committee
22/02/18 – 21/11/19
21/02/21 – 22/04/21
08/11/22 - current
Chair of Nominations &
Remuneration Committee
25/05/18 – 21/11/19
Les Wozniczka
Non-Executive Director
13/04/21 – current
Nominations & Remuneration
Committee
22/04/21 – current
Audit & Risk Committee
22/04/21 – 07/11/22
Keith Perrett brings to the board strong experience in strategy development,
government relations, stakeholder engagement and business development.
He also has a strong business and government network, particularly within
New South Wales & Queensland.
He is currently Non-Executive Chairman of Silver Mines Ltd (ASX:SVL) and
has previously held positions as the Chairman of the Grains Research and
Development Corporation (GRDC), the National Rural Advisory Council
(NRAC), the Wheat Research Foundation (WRF), and President of the Grains
Council of Australia.
Directorships of Other Listed Entities in Last 3 Years
Silver Mines Ltd, 21/06/16 - current
Les Wozniczka has been an active private investor since retiring as Chief
Executive of Futuris Corporation in 2008 and currently holds a 11.9% stake in
Acumentis Group Limited.
He has been a director of public companies and is experienced in the
management of regulated entities.
Prior to Futuris Corporation, Les was a founding shareholder in Corporate
Governance International, a partner in The Partners Group offering corporate
advice, a Potter Partners partner and investment banker and international
currency and bond manager.
Les has an MBA and BSc (Psych) from UNSW and DipEd from the University
of Adelaide.
Pg 16
Acumentis Annual Report 2023
Andrea Staines OAM
Independent Director
Non-Executive director
26/09/19 - current
Chair of Nominations &
Remuneration Committee
21/11/19 – current
Audit & Risk Committee
21/11/19 – current
Timothy Rabbitt
Managing Director
Executive director
10/12/20 – current
Andrea Staines OAM has been a professional Non-Executive Director in excess
of fifteen years on a range of Australian and New Zealand entities and is
currently on the board of social enterprise UnitingCare Queensland.
Andrea has experience in the property sector through her time on the board of
QIC. She has extensive experience from being on the boards of entities with
operations distributed nationwide including social enterprise Goodstart Early
Learning, ASX-listed Aurizon & Kelsian Group, Australia Post and Australian
Rail Track Corporation.
Andrea is a former CEO of Australian Airlines (mark II), a Qantas subsidiary
flying between Asia and Australia, which she co-launched. During this time,
she was also a member of the Qantas Executive Leadership Team. Prior to
this, Andrea led Qantas Revenue Management - a team that optimized Qantas
passenger revenue using mathematical techniques. Before joining Qantas,
Andrea worked in various financial and strategy roles with American Airlines at
their Dallas headquarters.
Andrea has an MBA from the University of Michigan and a Bachelor of Economics
from the University of Queensland. She is a Fellow of the Australian Institute
of Company Directors (AICD) and a Member of Chief Executive Women (CEW).
Directorships of Other Listed Entities in Last 3 Years
Kelsian Group Limited (previously SeaLink Travel Group Limited)
15/02/16 – 25/10/22
Tim has worked with Acumentis since 1992 (then Taylor Byrne) and been in
the CEO role since September 2019 and was appointed Managing Director in
December 2020.
Tim led Taylor Byrne from 2013 until the merger with LMW in 2019 and
was instrumental in the transition of the company from a partnership into a
corporate structure.
As CEO of Acumentis Tim holds overall responsibility for the management
of the business, including risk management, governance, strategic planning
and financial management. He has worked across the commercial, industrial
and specialised rural property sectors throughout Queensland, the Northern
Territory, New South Wales and Western Australia.
A Certified Practicing Valuer, Tim specialises in litigation and acquisition
matters and has been involved in numerous gas, mining and powerline
easement acquisition projects throughout Queensland and New South Wales.
He has regularly acted as an Expert Witness in various courts, and been involved
in negotiations for the acquisition of properties for roads, rails, dams, mines,
powerline and gas and water pipeline easements, and gas infrastructure.
Tim has served as the Queensland President of the Australian Property
Institute, is a member of the Valuation Board of Review for the Northern
Territory, the Royal Institute of Chartered Surveyors, the International Right of
Way Association, and the Australian Institute of Company Directors.
Acumentis Annual Report 2023
Pg 17
Patrice Sherrie
Independent Director
Non-Executive director
01/11/20 – 08/11/22
Audit & Risk Committee
01/11/20 – 08/11/22
Chair of Audit & Risk
Committee
01/11/20 – 08/11/22
Nominations & Remuneration
Committee
01/11/20 – 08/11/22
John Wise
Company Secretary
27/09/16 – current
Patrice is an experienced executive and director with over 35 years’
experience in chartered accounting and commerce. She has diverse industry
experience including property, infrastructure, finance, childcare, retail and
the arts.
Patrice sits on several different Boards including City of Brisbane Investment
Corporation Pty Ltd, Brisbane Sustainability Agency, Andersen’s Floor
Coverings, Millovate and The Lord Mayors Charitable Trust (Brisbane).
Patrice provides considered input around the board table and offers refined
governance skills; finance and accounting skills and the ability to elevate the
profile of the organisation via her well-developed networks across property,
finance and government.
Patrice brings energy, commitment and a strong work ethic to companies
she is involved with. She has held senior executive roles in growing
businesses so understands the challenges and how to develop strategies to
grow businesses.
Patrice brings years of experience as a director to any appointment and has
been the Chair or member of a number of sub committees.
John joined Acumentis in September 2016 as Chief Financial Officer and
Company Secretary.
John has had extensive experience in the property services sector having
previously held the position of CFO & Company Secretary at Savills from 1999
until 2016.
John trained with Price Waterhouse in the UK and also worked in Hungary
before emigrating to Australia in 1990.
John has a Bachelor of Science, Honours Degree in Mathematics and is a fellow
of the Institute of Chartered Accountants in England and Wales (ICAEW).
Pg 18
Acumentis Annual Report 2023
Directors’ Meetings
The number of directors’ meetings held, and the number of meetings attended by each of the directors
(when a director) of the Company during the financial year were as follows:
Director
Keith Perrett
Andrea Staines
Patrice Sherrie
Timothy Rabbitt
Les Wozniczka
Board
Audit & Risk
Committee
Nominations &
Remuneration Committee
Held
Attended
Held
Attended
Held
Attended
11
11
4
11
11
11
9
4
10
10
3
6
3
-
6
3
6
3
-
6
3
4
1
-
4
3
4
1
-
4
Company particulars
Acumentis Group Limited is incorporated in Australia.
The address of the registered office is Level 7, 283 Clarence Street, Sydney, NSW 2000.
Corporate Governance Statement
Acumentis Group Limited and the board are committed to achieving and demonstrating the highest
standards of corporate governance. Acumentis Group Limited has reviewed its corporate governance
practices against the Corporate Governance Principles and Recommendations (4th edition) published by
the ASX Corporate Governance Council.
The 2023 Corporate Governance Statement
is dated as at 30 June 2023 and reflects the
corporate governance practices in place at the end of the 2023 financial year. The 2023 Corporate
Governance Statement was approved by the board on 14th August 2023 and can be viewed at:
https://www.acumentis.com.au/investor-center/corporate-governance/
https://www.acumentis.com.au/investor-center/corporate-governance/
Principal activities
The principal activity of the Consolidated Entity during the course of the financial year was property
valuation. There were no significant changes in the nature of the activities of the Consolidated Entity
during the year.
Acumentis Annual Report 2023
Pg 19
Review of operations
Revenue
Continuing operations
Gain on de-recognition of investment in associated entity
Profit before tax
Operating profit from continuing operations
Gain on de-recognition of investment in associated entity
Acquisition costs expensed
Income tax (expense) / benefit
Net profit after tax from continuing operations
Year ended
30 June 2023
$000s
Year ended
30 June 2022
$000s
Increase /
(Decrease)
$’000
% Change
53,700
-
53,700
727
-
-
727
(298)
429
55,369
1,539
56,908
38
1,539
(156)
1,421
24
1,445
(1,669)
(1,539)
(3,208)
689
(1,539)
156
(694)
(322)
(1,016)
(3%)
(100%)
(6%)
1,813%
(100%)
(100%)
(49%)
(1,342%)
(70%)
The results for the year ended 30 June 2023 reflect the success of the strategies to diversify revenues
geographically, focussing on development of government, corporate and private clients as well as non-
finance related valuation and advisory services.
With the increase in interest rates throughout the year, fees earned from financial institutions related to
lending decreased by 19% year on year but Acumentis was successful in offsetting this fall with a 78%
year on year increase in fees from government clients and a 14% year on year increase in fees from
corporate and private clients.
Whilst overall revenues fell 3%, operating profits from continuing operations increased significantly as a
result of restructuring undertaken in 2022 improving gross margins and lowering overhead costs.
The company delivered an operating profit of $727K (FY22 $38K) and a profit before tax of $727K (FY22
$1,421K).
The result for the year ended 30 June 2023 includes the following significant items:
Expenses
Redundancy and termination costs
Business Overview
225,000
The business continues to diversify its revenues streams geographically with growth in revenues in WA
and SA in particular following the acquisition of these businesses during the previous financial year.
Whilst the current financial year saw a reduction in fees from financial institutions, this was offset by
strong growth in fees derived from government, corporate and private clients.
The business now has a more diversified fee base with non-finance related fees making up circa 40% of
total fees.
Pg 20
Acumentis Annual Report 2023
Outlook
The Board expects economic conditions in FY24 to remain challenging with high interest rates and
inflation as well as the risk of recession adversely impacting business and consumer confidence. Despite
the challenges, the business is in a position to grow and deliver improved profitability.
Dividends
The Board has not declared any dividends with respect to FY23 (FY22: none).
No dividends were paid by the Company since the end of the previous financial year.
Events subsequent to the end of the reporting period
There were no significant events subsequent to the end of the reporting period.
State of affairs
There have been no significant changes in the state of affairs of the Consolidated Entity that occurred
during the year under review.
Likely Developments
Refer to the Outlook included in this Directors’ Report above.
Environmental regulation
The operations of the Consolidated Entity are not subject to any significant environmental regulation
under a law of the Commonwealth or of a State or Territory.
Acumentis Annual Report 2023
Pg 21
REMUNERATION REPORT – AUDITED
Nominations & Remuneration Committee
A major role of the Nominations & Remuneration Committee is to ensure that the remuneration policies
and outcomes achieve an appropriate balance between the interests of Acumentis Group shareholders
and rewarding and motivating executives and employees in order to achieve their long-term commitment
to the Consolidated Entity. The committee meets as required but generally at least twice per year. The
members of the Nominations & Remuneration Committee during the year were:
Name
Current members
Andrea Staines (Member & Chair from 21 November 2019)
Leslie Wozniczka (Member from 22 April 2021)
Keith Perrett (Member from 8 November 2022)
Independent
Non-executive
Y
N
Y
Y
Y
Y
Remuneration strategy
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced
directors and senior executives.
The remuneration of the Consolidated Entity’s senior executives includes a mix of fixed components and
performance-based incentives comprising short term incentives (“STI’s”) and long term incentives (“LTI’s”).
Component
Fixed
STI
LTI
Settled
Cash
Cash
Share Based
How Measured
Market rates, reviewed annually.
The performance of the Consolidated Entity and the individual
performance of the executives based on achievement of specific key
performance indicators (KPI’s) which include financial and non-
financial targets. STI’s and the associated KPI’s are reviewed and set
annually with STI payments, if any, being made post finalisation of the
annual external audit.
The performance of the Consolidated Entity and the individual
performance of the executives. The performance of the Consolidated
Entity is based on total shareholder return and earnings per share.
LTI’s have a minimum period of 3 years and are forfeited if the
executive ceases to be employed by the Consolidated Entity.
The board considers that the performance-based incentive is appropriate as it directly aligns the individuals
reward with the Consolidated Entity’s performance.
Pg 22
Acumentis Annual Report 2023
In considering the Consolidated Entity’s performance, the board has regard to the following indices in respect of
the current financial year and previous years.
Revenue from rendering services
EBITDA1
Net profit / (loss) to equity holders of the
Company
Earnings / (loss) per share (cents)
2023
$000
53,519
3,420
429
0.23
2022
$000
55,163
2,035
2021
$000
44,043
4,902
2020
$000
36,666
(38)
2019
$000
41,493
(1,612)
1,445
(9,688)
(2,555)
(15,148)
0.83
(6.19)
(1.76)
(18.36)
1.
EBITDA excludes gain on de-recognition of investment in associated company (note 13 (a)) and gain on disposal of non-current assets.
The factors that are considered to affect total shareholders return are summarised below.
Dividends declared (per share)
2023
$000
-
2022
$000
-
2021
$000
-
2020
$000
-
2019
$000
-
Share price at the end of the period
$0.061
$0.095
$0.115
$0.080
$0.180
Non-executive directors are paid an annual fee for their service on the board and committees which is determined
by the Nominations & Remuneration Committee. Aggregate remuneration for all non-executive directors is not
to exceed $400,000 per annum as approved by the shareholders. Non-executive directors’ aggregate salary
& fees for the year were $273,000. These fees include statutory superannuation. Non-executive directors
do not receive bonuses nor are they entitled to be issued with options or performance rights on securities in
the Consolidated Entity. Non-executive directors do not receive any retirement benefits other than statutory
superannuation payments. Non-executive directors do not receive separate fees for committee memberships.
The Consolidated Entity has a policy that prohibits those that are granted share-based payments as part of their
remuneration from being compensated for changes in value of the underlying securities.
Acumentis Annual Report 2023
Pg 23
Directors’ and senior executive officers’ remuneration
Details of the nature and amount of each major element of the remuneration of each member of key
management personnel are:
Short term
Post-employment
Long term
Total $
Performance
Related %
Share
Based
%
Name
Year
Salary &
Fees
$
Super-
annuation
benefits
$
STI
(b)
$
Termination
benefits
$
Movement
in long
term
benefits
$
Share
based
payments
$
Non-executive directors
K Perrett
2023
120,000
2022
120,000
A Staines
2023
58,823
2022
59,546
P Sherrie1
2023
20,814
2022
59,546
L Wozniczka
2023
65,000
2022
65,500
-
-
-
-
-
-
-
-
Executive directors
T Rabbitt
2023
378,361
34,792
2022
387,559
80,500
Other key management personnel
J Wise
2023
252,904
22,986
2022
256,559
35,455
-
-
6,177
5,954
2,186
5,954
-
-
25,292
23,568
25,711
25,269
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
120,000
120,000
65,000
65,500
23,000
65,500
65,000
65,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,793)
(13,659)3
415,993
6,409
52,140
550,176
8%
15%
-3%
9%
3,410
3,675
15,716
320,727
8,455
329,413
7%
11%
5%
3%
1.
2.
3.
Appointed 1 November 2020 and resigned 8 November 2022
Other directors and senior executive officers were employed throughout both financial years
Includes the effect of lapse of FY21 tranche of rights due to the performance condition not being met
Notes in relation to the table of directors’ and executive officers’ remuneration
(a)
Analysis of options & performance rights included in remuneration
Option & Performance Rights – Share Based Payments
The directors at their discretion allocate share options or performance rights that entitle key management
personnel and senior employees to be issued shares in the Company. The terms of the options including
vesting conditions and performance criteria vary depending upon the incentive arrangements appropriate
for key management personnel and senior employees and are a part of an approved Employee Share
Acquisition Scheme, which was initially approved by shareholders at the 2018 Annual General Meeting
and renewed for a further 3 years at the 2021 Annual General Meeting.
Pg 24
Acumentis Annual Report 2023
Options
There were no options held by key management personnel outstanding at the date of this report (2022:
nil).
Performance Rights
Performance rights may be granted under the Acumentis Group Performance Rights and Option Plan
which was first approved by shareholders at the 2018 Annual General Meetings and the approval was
renewed for a further 3 years at the 2021 Annual General Meeting. The Plan allows the Company to grant
options or rights to selected senior executives to acquire ordinary shares in the Company. Participants
are required to satisfy performance and service conditions at the time of the offer. The exercise price for
performance rights is nil. Rights cannot be transferred and are not quoted on the ASX.
Performance rights on issue are as follows:
Tranche Date
Transaction
FY21
15 Oct 20 Grant
Chief
Executive
Officer
1,000,000
30 Jun 23
Lapse (market & performance conditions not met)
(1,000,000)
FY22
20 Sep 21 Grant
28 Oct 21 Grant
8 Apr 22 Forfeit (service condition not met)
10 Jun 22 Forfeit (service condition not met)
19 May 23 Forfeit (service condition not met)
FY23
25 Oct 22 Grant
Chief
Financial
Officer
Other
employees
-
-
-
-
-
-
Total
1,000,000
(1,000,000)
-
240,000
1,200,000
1,440,000
-
-
-
-
-
240,000
(144,000)
(144,000)
(120,000)
(120,000)
(240,000)
(240,000)
-
-
240,000
-
-
-
240,000
240,000
696,000
1,176,000
405,000
300,000
435,000
1,140,000
405,000
300,000
435,000
1,140,000
Total
645,000
540,000
1,131,000
2,316,000
1.
Further information on performance rights can be found at note 19(a) to the financial statements.
Acumentis Annual Report 2023
Pg 25
Vesting conditions are as follows:
Number of rights on issue
Service Condition
Market Condition
The executive must remain employed for 3 years to
the finalisation of the statutory audit for the financial
year ended. If the service condition is not met none of
the performance rights will vest.
50% of the performance rights will vest if the total
shareholder return (“TSR”) for Acumentis is at least
equal to the TSR for the ASX300 for the period
FY21
FY22
FY23
-
1,176,000
1,140,000
30 Jun 23
30 Jun 24
30 Jun 25
1 Jul 20 –
30 Jun 23
1 Jul 21 –
30 Jun 24
1 Jul 22 –
30 Jun 25
Performance Condition
50% of the performance rights will vest pro-rata
based on the earnings per share of Acumentis Group
Limited being between
2.4 cents &
3.2 cents for
FY23
2.5 cents &
3.4 cents for
FY24
2.6 cents &
3.5 cents for
FY25
The Board has the discretion to adjust the number of rights that ultimately vest and/or the service
condition period if it forms the view that the unadjusted outcome is not appropriate to the circumstances
that prevailed over the measurement period.
The Board has discretion to determine that some or all unvested rights held lapse on a specified date if
allowing the rights to vest would, in the opinion of the Board, result in an inappropriate benefit to the rights
holder. Such circumstances would include joining a competitor or actions that harm the Consolidated
Entities’ stakeholders.
In the case of fraud or misconduct, all unvested rights will be forfeited.
Vesting and exercise of performance rights issued during prior years
No performance rights vested during the year ended 30 June 2023 (2022: none).
(b)
Analysis of short term incentives included in remuneration
Short-term incentive cash payments were awarded to the CEO Timothy Rabbitt and CFO John Wise.
The performance-based component for the CEO is a cash payment based on both financial and non-
financial KPI’s and qualitative assessment of performance.
The performance-based component for the CFO is a cash payment based on non-financial KPI’s and
qualitative assessment of performance.
Director / Key Management
Personnel
Vesting date
Cash STI
Paid / Payable
Cash STI Forfeited
Financial Year the cash STI
was paid / is payable
Timothy Rabbitt
30 June 2023
15%
John Wise
30 June 2023
50%
85%
50%
2024
2024
Pg 26
Acumentis Annual Report 2023
Contracted Commitment
Timothy Rabbitt (CEO) and John Wise (CFO) are employed by the Company under ongoing employment
contracts. The notice periods and termination payments provided for under these contracts are as follows:
Director / Key Management Personnel
Notice Period
Months
Termination Payment
$
Timothy Rabbitt
John Wise
6
3
212,500
75,000
The termination payments are not provided for in the financial statements.
Acumentis Annual Report 2023
Pg 27
BENEFICIAL INTEREST OF DIRECTORS AND KEY
MANAGEMENT PERSONNEL IN SHARES & OPTIONS
Movement in shareholdings
The movement during the reporting period in the number of ordinary shares in the Company held directly,
indirectly, or beneficially by each director or key management person including their personally related
entities is as follows:
Held at
1 July 2022
Purchases
Sales
Appointment
/ (Retirement)
from Board
Held at
30 June 2023
John Wise
265,884
200,856
2023
Non-Executive Directors
Keith Perrett
Andrea Staines
Patrice Sherrie
Les Wozniczka
Executive Directors
Timothy Rabbitt
Key Management Personnel
2022
Non-Executive Directors
Keith Perrett
Andrea Staines
Patrice Sherrie
Les Wozniczka
Executive Directors
Timothy Rabbitt
Key Management Personnel
418,577
822,857
-
-
-
-
19,810,755
6,142,858
1,477,479
394,612
Held at
1 July 2021
418,577
-
-
19,810,755
-
-
-
-
1,463,479
14,000
John Wise
222,515
43,369
Purchases
Sales
Appointment /
(Retirement)
from Board
Held at
30 June 2022
-
-
-
-
-
-
-
-
-
-
-
-
1,241,434
-
-
25,953,613
1,872,091
466,740
-
-
-
-
-
-
-
-
-
-
-
-
418,577
-
-
19,810,755
1,477,479
265,884
The executive officers named are those who are directly accountable and responsible for the strategic
direction and operational management of the Consolidated Entity. The directors are of the opinion that
only the executive officers detailed above meet the definition of key management personnel as set out in
AASB 124 Related Party Disclosures.
Pg 28
Acumentis Annual Report 2023
Transactions with Director-Related Entities
The Consolidated Entity did not enter into any transactions with any director-related entities, except for
payment of non-executive directors’ fees to some directors, in either of the years ended 30 June 2022 or
30 June 2023.
END OF REMUNERATION REPORT
Acumentis Annual Report 2023
Pg 29
PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY
During the financial year and in the interval between the end of the financial year and the date of this
report the Consolidated Entity has made no application for leave under Section 237 of the Corporations
Act 2001.
No person has applied for leave of court to bring proceedings on behalf of the Consolidated Entity or intervene
in any proceeding to which the Consolidated Entity is a party for the purpose of taking responsibility on
behalf of the Consolidated Entity for all or any part of these proceedings. The Consolidated Entity was not
a party to any such proceedings during the year.
Directors’ Interests
The relevant interest of each director in the shares issued by the Company as notified by the Directors to
the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date
of this report is as follows:
Keith Perrett
Andrea Staines
Timothy Rabbitt
Les Wozniczka
Share Options
Shares under option
Ordinary Shares
1,241,434
-
1,872,091
25,953,613
There were 2,500,000 unissued ordinary shares of Acumentis Group Limited under option at the date of
the report (2022: 2,500,000). Refer to note 7 for further details.
Shares issued on exercise of options
There were no options exercised during the year (2022: Nil).
Indemnification and Insurance of Officers and Auditors
Officers
The Company has agreed to indemnify all current Directors of Acumentis Group Limited to the maximum
extent permitted by law against any liability incurred by them by virtue of their holding office as an officer
of the Consolidated Entity other than:
•
•
•
a liability owed to the Consolidated Entity or a related body corporate of the Company;
a liability for a pecuniary penalty order under section 1317G of the Law or a compensation order
under section 1317H of the Law; or
a liability owed to a person other than the Consolidated Entity that did not arise out of conduct in good
faith.
Pg 30
Acumentis Annual Report 2023
Since the end of the previous financial year, the Consolidated Entity has paid premiums in respect of
Directors and Officers liability insurance, for all past, present, or future directors, secretaries, officers
or employees of the Consolidated Entity. Conditions of the Insurance policy restrict disclosure of the
premium amount.
The insurance premiums relate to:
•
•
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or
criminal and whatever their outcome
other liabilities that may arise from their position, with the exception of conduct involving a wilful
breach of duty or improper use of information or position to gain a personal advantage.
Further details of insurance policies have not been disclosed as the policies prohibit such disclosure.
Auditors
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a third-party liability incurred by the auditor.
During the year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Rounding of Amounts
The Consolidated Entity has applied the relief available under ASIC Instrument 2016/191 and accordingly,
amounts in the financial statements and directors’ report have been rounded to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
Auditors Independence Declaration under Section 307C of the Corporations Act 2001
The auditor’s independence declaration is set out on page 33 and forms part of the Directors’ Report for
the financial year ended 30 June 2023.
Non-audit Services
During the year, William Buck, the Company’s auditor, has performed certain other services in addition to
their statutory duties.
The board has considered the non-audit services provided during the year by the auditor and in accordance
with written advice provided by resolution of the Audit & Risk Committee, is satisfied that the provision of
those non-audit services during the year 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 were subject to the corporate governance procedures adopted by the
Consolidated Entity and have been reviewed by the Audit & Risk Committee to ensure that they do not
impact the integrity and objectivity of the auditors; 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 (including
Independence Standards), as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision-making capacity for the Consolidated Entity, acting as an advocate for
the Consolidated Entity or jointly sharing risks and rewards.
Acumentis Annual Report 2023
Pg 31
Details of the amounts paid to the auditors of the Consolidated Entity, William Buck, and its related
practices for audit and non-audit services provided during the year are set out below:
Statutory and other audit services
Full year audit
Half year review
Service other than statutory audit
Preparation & lodgement of taxation returns
Tax advice:
• Acquisition due diligence
2023
2022
174,000
60,000
234,000
9,790
-
9,790
160,000
60,000
220,000
13,740
13,500
27,240
This report is made in accordance with a resolution of the directors.
Keith Perrett
Director
Dated at Sydney this 14th day of August 2023
Pg 32
Acumentis Annual Report 2023
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF ACUMENTIS GROUP
LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2023 there have
been:
— no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the audit.
Yours faithfully
William Buck
Accountants & Advisors
ABN: 16 021 300 521
Domenic Molluso
Partner
Sydney, 14 August 2023
Level 29, 66 Goulburn Street, Sydney NSW 2000
Level 7, 3 Horwood Place, Parramatta NSW 2150
+61 2 8263 4000
nsw.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
16
Acumentis Annual Report 2023
Pg 33
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
Revenue from rendering of services
Gain on de-recognition of investment in associated company
Other income
Expenses from operating activities:
Employee expenses
Software, printing & stationary expenses
Marketing expenses
Communications expenses
Insurance expenses
Administration expenses
Occupancy expenses
Depreciation and amortisation expenses
Other expenses from operating activities
Results from operating activities
Finance income
Finance expense
Profit before tax
Income tax (expense) / benefit
Profit for the year attributable to owners of the parent
Notes
1
13(b)
3(a)
2023
$000
2022
$000
53,519
55,163
-
181
1,539
206
53,700
56,908
39,022
2,657
824
311
2,490
1,021
699
2,287
3,309
41,336
2,805
765
555
2,897
1,234
648
1,935
3,030
52,620
55,205
1,080
1,703
35
(388)
(353)
36
(318)
(282)
727
1,421
(298)
429
24
1,445
3(b)
3(b)
4
Total comprehensive profit for the year attributable to owners of the parent
429
1,445
Basic earnings per share
Diluted earnings per share
21(a)
21(b)
0.23 cents
0.83 cents
0.22 cents
0.81 cents
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
Pg 34
Acumentis Annual Report 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Assets
Cash and cash equivalents
Term deposits
Trade and other receivables
Other financial assets
Other current assets
Total current assets
Other financial assets
Term deposits
Deferred tax assets
Plant and equipment
Right of use assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Deferred consideration
Employee benefits
Total current liabilities
Borrowings
Lease liabilities
Deferred consideration
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Other reserves
Total equity
Notes
5(a)
5(b)
5(c)
5(d)
6(f)
5(d)
5(b)
6(e)
6(a)
6(b)
6(c)
5(e)
5(f)
5(g)
6(d)
5(h)
6(g)
5(f)
5(g)
5(h)
6(g)
6(h)
7
8
2023
$000
1,697
1
5,916
371
1,064
9,049
284
913
2,545
737
2,505
22,140
29,124
38,173
3,834
8
1,765
-
143
4,897
10,647
39
1,566
1,263
446
142
3,456
14,103
24,070
2022
$000
856
42
6,287
349
1,361
8,895
653
887
2,835
934
2,489
22,245
30,043
38,938
4,162
908
1,561
28
406
5,229
12,294
1,448
2,271
1,406
509
182
5,816
18,110
20,828
22,208
19,433
1,697
165
1,268
127
24,070
20,828
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Acumentis Annual Report 2023
Pg 35
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Retained
Earnings /
(Accumulat-
ed Deficit)
$000
Other
Reserves
$000
Notes
Share Capital
$000
Balance at 1 July 2021
Shares issued
Share based payments expense
7(a)
8
Total comprehensive profit attributable to members
of the parent entity
Corporations Act 2001 s258F reduction in capital
7(b)
Balance at 30 June 2022
Balance at 1 July 2022
Shares issued
Share based payments expense
7(a)
8
Total comprehensive profit attributable to members
of the parent entity
44,887
(27,600)
1,969
-
-
(27,423)
19,433
19,433
2,775
-
-
-
-
1,445
27,423
1,268
1,268
-
-
429
Total
Equity
$000
17,318
1,969
96
1,445
-
31
-
96
-
-
127
20,828
127
-
38
-
20,828
2,775
38
429
Balance at 30 June 2023
22,208
1,697
165
24,070
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Pg 36
Acumentis Annual Report 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Cash receipts in the course of operations
Lease receipts
Cash payments in the course of operations
Interest received
Interest paid
Income tax paid
Notes
3(b)
3(b)
2023
$000
2022
$000
59,591
59,867
350
241
(56,228)
(58,109)
32
(388)
(36)
36
(318)
(170)
Net cash provided by operating activities
9(a)
3,321
1,547
Cash flows from investing activities
Payments for plant and equipment
Payments for intangible assets
Purchase of investments
- Acquisition of incorporated entities
- Deferred consideration paid
- Refund of previously paid consideration
Decrease / (increase) in security deposits invested
Loans advanced
Loans repaid
6(a)
6(c)
13(a), (b)
5(h), 13(a), (b)
(331)
(450)
-
(406)
-
15
-
-
(447)
(617)
(805)
(61)
27
(87)
(189)
20
Net cash used in investing activities
(1,172)
(2,159)
Cash flows from financing activities
Shares issued (net of costs)
Repayment of borrowings
Repayment of lease liabilities
Dividends paid
Net cash provided from financing activities
Net increase / (decrease) in cash and cash equivalents held
Cash and cash equivalents at beginning of the year
7(a)
5(f)
2,775
(2,309)
(1,774)
-
-
(440)
(1,668)
(110)
(1,308)
(2,218)
841
856
(2,830)
3,686
Cash and cash equivalents at the end of the year
5(a)
1,697
856
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Acumentis Annual Report 2023
Pg 37
Notes to the
consolidated
financial
statements
ASX:ACU FY22-23
Pg 38
Acumentis Annual Report 2023
TABLE OF CONTENTS
How numbers are calculate .................................................................................................. 40
1
2
3
4
5
6
7
8
9
Revenue ............................................................................................................................40
Material profit or loss items..............................................................................................41
Other income and expense items ....................................................................................41
Income tax expense .........................................................................................................42
Financial assets and financial liabilities ...........................................................................43
Non-financial assets and liabilities ..................................................................................50
Equity ................................................................................................................................62
Other reserves ..................................................................................................................64
Cash flow information .......................................................................................................65
Risk ............. ....................................................................................................................... 66
10
11
12
Significant estimates and judgements .............................................................................67
Financial risk management ..............................................................................................67
Capital management ........................................................................................................72
Group structure ................................................................................................................... 76
13
14
Business combinations - acquisitions..............................................................................77
Interests in other entities .................................................................................................80
Unrecognised items .............................................................................................................. 82
15
16
17
Contingent liabilities .........................................................................................................83
Commitments ...................................................................................................................83
Events occurring after the reporting period .....................................................................84
Other information ................................................................................................................ 86
18
19
20
21
22
23
24
Related party transactions ...............................................................................................87
Share-based payments ....................................................................................................88
Remuneration of auditors .................................................................................................90
Earnings per share ............................................................................................................90
Parent entity financial information ...................................................................................92
Going concern ...................................................................................................................92
Summary of significant accounting policies ....................................................................93
Acumentis Annual Report 2023
Pg 39
HOW NUMBERS ARE CALCULATED
This section provides additional information about those individual line items in the financial statements
that the directors consider most relevant in the context of the operations of the entity, including:
a) Accounting policies that are relevant for an understanding of the items recognised in the financial
statements. These cover situations where the accounting standards either allow a choice or do not
deal with a particular type of transaction;
b) Analysis and sub-totals, including segment information; and
c) Information about estimates and judgements made in relation to particular items.
1
Revenue
Revenue from rendering of services
Recovery of disbursements
Recharge of shared services to licensees
2023
$000
53,423
75
21
53,519
2022
$000
55,114
20
29
55,163
(a)
Revenue from rendering of services
Revenue from the rendering of services to clients is recognised when the individual performance obligation
under the applicable contract is satisfied and at the price agreed in the contract. For the large majority
of contracts, there is a single performance obligation at the completion of the service and revenue is
recognised at this point.
(b)
Recovery of disbursements
Where the contract with the client allows the recovery of disbursements incurred in delivering the
services, these are billed to the client at the time the performance obligation in the contract is satisfied or
in accordance with an agreed billing schedule as appropriate.
(c)
Recharge of shared services to licensees
Revenue relating to the provision of shared services to licensees is billed and recognised on a monthly
basis over the term of the agreement relating to the provision of such services.
Further information on the measurement and timing of recognition of revenues may be found in note
24(e).
Pg 40
Acumentis Annual Report 2023
2
Material profit or loss items
The Consolidated Entity has identified a number of items which are material due to the significance of
their nature and/or amount. These are listed separately here to provide a better understanding of the
financial performance of the Consolidated Entity.
Income
Gain on de-recognition of investment in associated company
Notes
13(a)
Expenses
Redundancy and termination costs
Acquisition costs expensed
IT&T MSP migration non-recurring costs
2023
$000
-
225
-
-
2022
$000
1,539
248
156
395
3
Other income and expense items
This note provides a breakdown of the items included in ‘other income’ and ‘finance income and expenses’.
Information about specific profit and loss items (such as gains and losses in relation to the sale of plant &
equipment) is disclosed in the related statement of financial position notes.
(a)
Other income
Licence fee income
Sundry income
2023
$000
159
22
181
2022
$000
181
25
206
Licence fee income represented fees charged to non-controlled entities which had been licenced to use
the Acumentis brand and systems. Licence fees were charged as a percentage of revenue earned by the
licensee.
Acumentis Annual Report 2023
Pg 41
(b)
Finance income and expense
Finance income
- Employee loans - $3K capitalised (2022 $Nil)
- Lease income from sublease
- Term deposits
Finance expenses
- Borrowings
- Leases
- Overdrafts
- Insurance premium finance
2023
$000
11
22
2
35
(100)
(177)
(49)
(62)
(388)
2022
$000
4
27
5
36
(79)
(186)
(26)
(27)
(318)
Finance income comprises interest income on funds invested. Interest income is recognised using the
effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument.
Interest income is recognised as it accrues in the Statement of Profit & Loss and Other Comprehensive
Income, using the effective interest method.
Finance expenses comprise interest expense on borrowings, leases and unwinding of the discount
on financial assets. All borrowing costs are recognised in the Statement of Profit & Loss and Other
Comprehensive Income using the effective interest method.
4
Income tax expense
This note provides an analysis of the Consolidated Entity’s income tax expense, shows what amounts are
recognised directly in equity and how the tax expense is affected by non-assessable and non-deductible
items. It also explains significant estimates made in relation to the Consolidated Entity’s tax position.
Pg 42
Acumentis Annual Report 2023
(a)
Income tax expense / (benefit)
Current tax
Current year tax payable
Utilisation of brought forward tax losses
Adjustments for prior years
Total current tax expense
Deferred income tax
Decrease / (increase) in deferred taxes (note 6(e))
Total deferred tax expense / (benefit)
Income tax expense / (benefit)
2023
$000
105
(105)
8
8
290
290
298
2022
$000
98
(98)
19
19
(43)
(43)
(24)
(b)
Reconciliation of income tax benefit to prima facie tax payable
Profit from continuing operations before tax
2023
$000
727
2022
$000
1,421
Prima facie income tax benefit calculated at 30% on profit (2021: 30%)
218
426
Increase / (decrease) in income tax expense due to:
Non-deductible expenses
- Entertainment
- Other expenses
Effect of non-assessable gain on de-recognition of investment in associated company
Adjustments for prior years
Restatement of future tax benefit from 26% to 30%1 (note 6(e))
Income tax expense / (benefit)
1.
to reflect expected revenues exceeding $50M and the entity no longer qualifying for lower tax rate
21
-
-
239
59
-
298
17
-
(462)
(19)
14
(19)
(24)
5
Financial assets and financial liabilities
This note provides information about the Consolidated Entity’s financial instruments, including:
• An overview of all financial instruments held by the Consolidated Entity;
•
Specific information about each type of financial instrument;
• Accounting policies; and
•
Information about determining the fair value of the instruments, including judgements and estimation
uncertainty involved.
Acumentis Annual Report 2023
Pg 43
The Consolidated Entity holds the following financial instruments:
Financial assets at amortised cost
Cash and cash equivalents
Term deposits
Trade and other receivables
Other financial assets
Financial liabilities at amortised cost
Trade and other payables
Borrowings
Lease liabilities
Deferred fixed consideration
Financial liabilities at fair value
Deferred contingent consideration
(a)
Cash and cash equivalents
Note
5(a)
5(b)
5(c)
5(d)
5(e)
5(f)
5(g)
5(h)
2023
$000
1,697
914
5,916
655
9,182
3,834
47
3,331
143
7,355
2022
$000
856
929
6,287
1,002
9,074
4,162
2,356
3,832
549
10,899
5(h)
1,263
1,263
Cash at bank and on hand
Receivables finance facility
Cash and cash equivalents in the Statement of Cash Flows
2023
$000
1,275
422
1,697
2022
$000
856
-
856
The receivables finance facility is able to be drawn drown without notice and funds are immediately
available. Receipts from trade receivables are banked into a specific bank account which is swept each
day to credit the receivables finance account. As a result, the receivables finance account balance often
fluctuates between being positive to being negative.
The receivables finance account forms an integral part of the Consolidated Entity’s cash management and
is operated as though it was a bank account with an overdraft facility.
The receivables finance facility account is therefore included in cash and cash equivalents in accordance
with the requirements and definitions in Australian Accounting Standard AASB107 Cash Flow Statements.
Pg 44
Acumentis Annual Report 2023
Access was available at the reporting date to the following lines of credit:
Available
Receivables finance facility
Bank bill & loan facility
Bank overdraft
Unused at reporting date
Receivables finance facility
Bank bill & loan facility
Bank overdraft
2023
$000
3,000
-
-
3,000
3,000
-
-
3,000
2022
$000
-
2,300
1,700
4,000
-
-
1,700
1,700
During the year, the Consolidated Entity’s approach to capital management changed. Following the capital
raise in February/March 2023, the Consolidated Entity repaid outstanding bank bills and replaced its
$1.7M overdraft facility with a $3M receivables facility which carries a lower interest rate.
The receivables finance facility may be drawn at any time, may be terminated by the bank without notice
and is secured via floating charges over the trade receivables of the Consolidated Entity together with
fixed and floating charges of the other assets and business of the Consolidated Entity.
The facility carries interest at the 30 day bank bill rate plus a margin of 2.1%. The current rate is 7.47%.
A line fee of 1% is also charged.
The facility is subject to annual review with the next review in October 2023.
(b)
Term deposits
Current
Term Deposits
Non-current
Term Deposits
2023
$000
1
913
2022
$000
42
887
Term deposits are held to provide security for bank guarantees, which are required for property leases and a
customer contract. Property leases are typically for fixed periods of up to 7 years but may include extension
options. Term deposits have maturities ranging from 1 to 12 months, however will be rolled over for as long
as bank guarantees are required to be kept.
Acumentis Annual Report 2023
Pg 45
(c)
Trade and other receivables
Current
Trade receivables
Less: provision for expected credit losses
Other receivables
2023
$000
5,931
(152)
137
5,916
2022
$000
6,522
(299)
64
6,287
(i)
Classification as trade and other receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of
business. Other receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. If collection of the amounts is expected in one year or less they
are classified as current assets. If not, they are presented as non-current assets. Trade receivables are
generally due for settlement within 30 days and therefore are all classified as current. The Consolidated
Entity’s impairment and other accounting policies for trade and other receivables are outlined in notes
11(a) and 24(k) respectively.
(ii)
Fair values of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is considered to be the
same as their fair value.
(iii)
Impairment and risk exposure
Information about the impairment of trade and other receivables, their credit quality and the Consolidated
Entity’s exposure to credit risk, foreign currency risk and interest rate risk can be found in note 11(a).
(d)
Other financial assets
Current
Lease receivable - right of use assets
Non-Current
Lease receivable – right of use assets
Employee loans (note 18(d))
2023
$000
371
95
189
284
2022
$000
349
467
186
653
Pg 46
Acumentis Annual Report 2023
(e)
Trade and other payables
Current
Trade payables
Other payables and accrued expenses
2023
$000
705
3,129
3,834
2022
$000
1,262
2,900
4,162
Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of
trade and other payables are considered to be the same as their fair values, due to their short-term nature.
(f)
Borrowings
Current
Commercial bank loans
Motor vehicle loan
Non-Current
Commercial bank loans
Motor vehicle loan
2023
$000
-
8
8
-
39
39
2022
$000
900
8
908
1,400
48
1,448
During the year, the Consolidated Entity’s approach to capital management changed. Following the
capital raise in February/March 2023, the Consolidated Entity repaid the outstanding bank bills totalling
$2,300,000.
Movement in bank loans and bills
Balance as at 1 July 2021
Acquisition of controlled entity
Repayments
Balance as at 30 June 2022
Balance as at 1 July 2022
Advances
Repayments
Balance as at 30 June 2023
Short-term
loan
$’000
Motor vehicle
loan
$’000
Bank bills and
loans
$’000
-
137
(137)
-
-
-
-
-
-
59
(3)
56
56
-
(9)
47
2,600
-
(300)
2,300
2,300
-
(2,300)
-
Total
$’000
2,600
196
(440)
2,356
2,356
-
(2,309)
47
Acumentis Annual Report 2023
Pg 47
Secured liabilities
The motor vehicle loan carries fixed interest at 3.49% and has total repayments of $836 per month. The
motor vehicle loan is secured by fixed charge over the related motor vehicle. The loan is not subject to
review.
The bank loan carried a floating interest rate of BBSY + 2.6% plus a 1% facility fee and had capital
repayments of $75,000 per month. The bank loan was secured by fixed and floating charges over the
assets and business of the Consolidated Entity. The loan was repaid in March 2023 and replaced with a
receivables finance facility (note 5(a)).
(g)
Lease liabilities
Current
Lease liabilities – right of use assets
Non-Current
Lease liabilities – right of use assets
Total
Payable as follows
Within one year
One year or later and no later than five years
Later than five years
Future finance charges
Recognised as a liability
Secured liabilities
2023
$000
1,765
1,566
3,331
1,878
1,636
-
3,514
(183)
3,331
2022
$000
1,561
2,271
3,832
1,691
2,353
-
4,044
(212)
3,832
Lease liabilities are effectively secured as the interests in the right of use assets recognised in the financial
statements revert to the lessor in the event of default.
Pg 48
Acumentis Annual Report 2023
(h)
Deferred consideration
Deferred consideration relates to the acquisition of Acumentis (WA) Holdings Pty Ltd (“ACU WA”) on 1 July
2021 and the acquisition Acumentis (SA) Pty Ltd (“ACU SA”) on 1 February 2022.
Current
Fixed consideration
ACU SA paid in two equal instalments on 10 Aug 2022 & 10 Feb 2023
ACU WA paid in two equal instalments on 23 Jul 2022 & 23 Jan 2023
ACU SA payable 10 Aug 2023
Non-Current
Fixed consideration
ACU SA paid 10 Aug 2023
Contingent consideration
Total
2023
$000
-
-
143
143
-
1,263
1,263
1,406
2022
$000
286
120
-
406
143
1,263
1,406
1,812
(i)
Contingent consideration
Contingent consideration of $797,000 was recognised for the acquisition of ACU WA (note 13(a))
and $466,000 for the acquisition of ACU SA (note 13(b)).
The fair value of the contingent consideration is based upon estimates of average profits before
tax of the entities to June 2025. These estimates are based on parent profit levels, revenue growth
of between 3% and 5%, overheads maintained at current levels with 3% annual increases from
FY2024 and increase in employment expenses calculated as 55% of the increase in revenue in
the years after.
Contingent consideration has not been discounted to its present value as the effect is not material.
Balance at 1 July
Arising on acquisitions:
• Acumentis (WA) Pty Ltd (note 13(a))
• Acumentis (SA) Pty Ltd (note 13(b))
(Gain) / loss recognised in other comprehensive income
• Acumentis (WA) Pty Ltd
• Acumentis (SA) Pty Ltd
Balance at 30 June
2023
$000
1,263
-
-
-
-
1,263
2022
$000
-
797
466
-
-
1,263
Acumentis Annual Report 2023
Pg 49
The deferred contingent consideration liability represents the fair value of amounts which may
become payable in August 2025 in connection with the acquisition of subsidiaries. The amount
payable is dependent on the acquired businesses performance for the three years ending 30
June 2025.
The deferred consideration was measured as at 30 June 2023 and no adjustment was required to
be recorded in other comprehensive income for the year ended 30 June 2023.
6
Non-financial assets and liabilities
This note provides information about the Consolidated Entity’s non-financial assets and liabilities, including:
•
Specific information about each type of non-financial asset and non-financial liabilit:
- Plant and equipment (note 6(a))
- Right of use assets (note 6(b))
- Intangible assets (note 6(c))
- Current tax liabilities (note 6(d))
- Deferred tax balances (note 6(e))
- Other current assets (note 6(f))
- Employee benefit obligations (note 6(g))
- Provisions (note 6(h))
• Accounting policies; and
•
Information about determining the fair value of the assets and liabilities, including judgements and
estimation uncertainty involved.
(a)
Plant & equipment
Cost
Balance at 1 July 2021
Additions – cash
Acquisition of controlled entities
Disposals
Balance at 30 June 2022
Balance at 1 July 2022
Additions – cash
Disposals
Balance at 30 June 2023
Accumulated Depreciation
Balance at 1 July 2021
Acquisition of controlled entities
Depreciation charge for the year
Disposals
Balance at 30 June 2022
Balance at 1 July 2022
Depreciation charge for the year
Disposals
Balance at 30 June 2023
Office
Equipment
$000
Furniture and
Fittings
$000
Leasehold
Improvements
$000
Motor Vehicles
$000
1,393
400
375
(163)
2,005
2,005
246
(53)
2,198
1,005
303
254
(163)
1,399
1,399
345
(53)
1,691
574
46
57
(16)
661
661
67
(155)
573
475
49
57
(16)
565
565
48
(147)
466
446
1
164
-
611
611
18
(208)
421
221
120
90
-
431
431
69
(163)
337
-
-
68
-
68
68
-
-
68
-
10
6
-
16
16
13
-
29
Total
$000
2,413
447
664
(179)
3,345
3,345
331
(416)
3,260
1,701
482
407
(179)
2,411
2,411
475
(363)
2,523
Pg 50
Acumentis Annual Report 2023
Carrying Amounts
1 July 2021
30 June 2022
1 July 2022
30 June 2023
388
606
606
507
99
96
96
107
225
180
180
84
-
52
52
39
712
934
934
737
(i)
Recognition and measurement
Items of plant and equipment are stated at cost less accumulated depreciation (see below) and
impairment losses (see accounting policy note 24(m)).
When parts of an item of plant and equipment have different useful lives, they are accounted for
as separate items (major components) of plant and equipment.
Gains and losses on disposal of an item of plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of plant and equipment and are recognised
net within “other income” in the Statement of Profit & Loss and Other Comprehensive Income.
(ii) Depreciation
Depreciation is charged to the Statement of Profit & Loss and Other Comprehensive Income
on a straight-line basis over the estimated useful lives of each part of an item of plant and
equipment. Leased assets are depreciated over the shorter of the lease term and their useful
lives, unless it is reasonably certain that the Consolidated Entity will obtain ownership by the
end of the lease term.
The estimated useful lives in the current and comparative periods are as follows:
•
•
•
•
•
Office equipment
Furniture and fittings
2-5 years
4-5 years
Leasehold improvements
lesser of life of the lease or 10 years
Right of use assets
life of the underling lease
Motor vehicles
5 years
The residual value, the useful life and the depreciation method applied to an asset are reassessed
at least annually.
Acumentis Annual Report 2023
Pg 51
(b)
Right of use assets
(i)
Amounts recognised in the balance sheet.
Cost
Balance at 1 July 2021
Additions
Acquisition of controlled entities
Disposals
Balance at 30 June 2022
Balance at 1 July 2022
Additions
Disposals
Balance at 30 June 2023
Accumulated Depreciation
Balance at 1 July 2021
Acquisition of controlled entities
Depreciation charge for the year
Disposals
Balance at 30 June 2022
Balance at 1 July 2022
Depreciation charge for the year
Disposals
Balance at 30 June 2023
Carrying Amounts
1 July 2021
30 June 2022
1 July 2022
30 June 2023
Lease liabilities
Current
Non-current
Buildings
$000
Office Equipment
$000
7,273
1,724
171
(4,252)
4,916
-
208
-
-
208
Total
$000
7,273
1,932
171
(4,252)
5,124
-
-
-
4,916
1,273
(1,924)
4,265
4,701
62
1,054
(3,251)
2,566
2,566
1,188
(1,924)
1,830
2,572
2,350
2,350
2,435
208
-
-
208
-
-
69
-
69
69
69
-
138
-
139
139
70
2023
$000
1,765
1,566
3,331
5,124
1,273
(1,924)
4,473
4,701
62
1,123
(3,251)
2,635
2,635
1,257
(1,924)
1,968
2,572
2,489
2,489
2,505
2022
$000
1,561
2,271
3,832
Pg 52
Acumentis Annual Report 2023
(ii) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation and impairment charge of right of use assets
Buildings
Office equipment
Interest expenses (included in finance cost)
Expenses relating to short term leases (included in occupancy expenses)
The total cash outflow for leases in 2023 was $1,774,000 (2022: $1,668,000).
2023
$000
1,188
69
1,257
177
210
2022
$000
1,054
69
1,123
186
369
(iii) The Consolidated Entities leasing activities and how these are accounted for
The Consolidated Entity leases offices, equipment and software. Contracts are typically for
fixed periods of up to 7 years but may include extension options.
Contracts may contain both lease and non-lease components. The Consolidated Entity
allocates the consideration in the contract to the lease and non-lease components based on
their relative stand alone prices, however for leases of real estate for which the Consolidated
Entity is the lessee, it has elected not to separate lease and non-lease components and
instead accounts for these as a single lease component.
Lease terms are negotiated on an individual basis and contain a wide range of different terms
and conditions. These agreements do not impose covenants other than the security interests
in the leased assets that are held by the lessor. Leased assets may not be used as security for
borrowing purposes.
Leases are recognised as a right of use asset and a corresponding liability at the date at which
the leased asset is available for use by the Consolidated Entity.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
• fixed payments, less incentives receivable;
•
variable payments that are based on an index or rate, initially measured using the index or
rate as at the commencement date; and
• amounts expected to be payable under residual value guarantees.
Lease payments to be made under reasonably certain extension options are also included in
the measurement of liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate
cannot be determined, the lessee’s incremental borrowing rate is used.
Lease payments are allocated between principal and finance cost with the finance cost
charged to the profit and loss over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each period.
Acumentis Annual Report 2023
Pg 53
Right of use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of the lease liability;
any lease payments made at or before the commencement date less any lease incentives
received;
any initial direct costs; and
restoration costs.
Right of use assets are generally depreciated over the shorter of the asset’s useful life and the
lease term on a straight line basis.
Payments associated with short term leases (with a term of 12 months or less) or low value
assets are recognised on a straight line basis as an expense in the profit or loss.
(c)
Intangible assets
Goodwill
Computer software
Trademarks
Notes
(i) – (iv)
(v)
(vi)
2023
$000
20,324
1,575
241
22,140
2022
$000
20,324
1,680
241
22,245
(i) Goodwill
The acquisition method of accounting is used to account for all business combinations, regardless
of whether equity instruments or other assets are acquired. The consideration transferred for
the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities
incurred and the equity interests issued by the Consolidated Entity.
Where the acquired subsidiary has significant long-term contracts or other customer relationships
the future value of these relationships is assessed and is included as an asset in the fair value,
above, of assets transferred.
Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is not
amortised but it is tested for impairment annually or more frequently if events or changes
in circumstances indicate that it might be impaired and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of an entity include the carrying amount
of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the
purpose of impairment testing. The allocation is made to those cash generating units or groups
of cash generating units that are expected to benefit from the business combination in which the
goodwill arose.
(ii) Subsequent expenditure
Subsequent expenditure on capitalised intangible assets excluding goodwill is capitalised only
when it increases the future economic benefits embodied in the specific asset to which it relates.
All other expenditure is expensed as incurred.
Pg 54
Acumentis Annual Report 2023
(iii) Impairment tests for goodwill
Goodwill has an indefinite useful live and is not amortised. The goodwill amounts are tested for
impairment annually by estimating the recoverable amount of the cash generating units based
on value in use.
The following cash generating units have significant carrying amounts for goodwill:
Goodwill
Residential valuations
Regional valuations
WA Business
SA Business
Movement in Goodwill
Balance at 1 July
Acquisition of incorporated businesses (note 13(a) and 13(b))
Impairment charge
Reduction of previously recognised goodwill
Balance at 30 June
2023
$000
3,016
9,486
6,393
1,429
2022
$000
3,016
9,486
6,393
1,429
20,324
20,324
20,324
-
-
20,324
12,529
7,822
-
(27)
20,324
(iv) Impairment review and charge
The Company tests whether goodwill has suffered any impairment on a six monthly basis. The
recoverable amount of cash generating units is determined based on value in use calculations
which require the use of assumptions.
The calculations use cash flow projections based on financial forecasts approved by
management covering the 12 months post reporting date. Cash flows beyond the 12 month
period are extrapolated using the estimated growth rates stated below.
30 June 2023
Annual increase in revenues
Increase in employee expenses as a % of
increased revenues
Annual increase in overheads
Terminal growth rate
Discount rate
30 June 2022
Annual increase in revenues
Increase in employee expenses as a % of
increased revenues
Annual increase in overheads
Terminal growth rate
Discount rate
Residential
Business
Regional
Business
WA Business
SA Business
3.0%
55.0%
3.0%
2.0%
14.6%
2.0%
55.0%
3.0%
2.0%
13.7%
3.0%
55.0%
3.0%
2.0%
14.6%
2.0%
55.0%
3.0%
2.0%
13.7%
3.0%
55.0%
3.0%
2.0%
14.6%
3.0%
55.0%
3.0%
2.0%
13.7%
5.0%
55.0%
3.0%
2.0%
14.6%
5.0%
55.0%
3.0%
2.0%
13.7%
Acumentis Annual Report 2023
Pg 55
Management has determined the values assigned to each of the key assumptions as follows
Assumption
Approach used to determine values
Revenues
Annual growth rate based on past performance, current and expected
market conditions and management’s expectations of business development
opportunities and likelihood of success.
Employee
expenses
Overheads
Based on past performance and management’s expectations for the future.
Fixed and semi-variable costs of the cash generating units, which do not
vary significantly with revenue. Management forecasts these costs based on
the current structure of the business, adjusting for anticipated inflationary
increases and known restructuring and cost-saving measures.
Terminal
growth rate
This is conservatively set at a level below the long term inflation rate in
Australia. The Company operates in a mature market sector and accordingly
long term growth will be achieved via diversification in services, client base
and geographies rather than long term growth of existing business lines.
Discount rate
The pre-tax rate discount rate adopted is based on the risk-free interest
rate and business specific risk factors, market borrowing rates and investor
expected returns.
Impact of reasonably possible changes in key assumptions
The recoverable amount of the Regional business cash generating unit is estimated to exceed
the carrying amount of the cash generating unit at 30 June 2023 by $5,380,000 (30 June 22:
$4,980,000).
The recoverable amount at 30 June 2023 would equal its carrying amount if the key assumptions
were to changes as follows:
Annual increase in revenues
Annual increase in overheads
Discount rate
From
3.0%
3.0%
14.6%
To
0.8%
6.2%
20.0%
Reasonably possible changes in key assumptions for other cash generating units would not result
in the recoverable amounts equalling their carrying values.
Pg 56
Acumentis Annual Report 2023
(v) Computer software
Movement in computer software
Balance at 1 July
Acquisition of controlled entities
Additions
Amortisation
Disposals
Balance at 30 June
2023
$000
1,680
-
450
(555)
-
1,575
2022
$000
1,467
1
617
(405)
-
1,680
Costs incurred in developing products or systems and costs incurred in acquiring software and
licences that will contribute to future period financial benefits through revenue generation and/
or cost reduction are capitalised to software and systems.
Costs capitalised include external direct costs of materials and service and direct payroll and
payroll related costs of employees’ time spent on the project.
Amortisation is calculated on a straight-line basis over periods generally ranging from 3 to 5
years.
IT development costs include only those costs directly attributable to the development phase
and are only recognised following completion of technical feasibility and where the Consolidated
Entity has an intention and ability to use the asset.
(vi) Trademarks
Movement in trademarks
Balance at 1 July
Disposals
Balance at 30 June
2023
$000
241
-
241
2022
$000
241
-
241
Trademarks have indefinite useful lives and are not amortised. Trademarks are tested for
impairment annually by estimating the recoverable amount of the cash generating units based
on value in use.
Acumentis Annual Report 2023
Pg 57
(d)
Current tax liabilities
Current
Tax liability
2023
$000
-
2022
$000
28
The current tax liability for the Consolidated Entity of $Nil (2022: $28,000) represents the amount of
income taxes payable in respect of current and prior financial periods. The 2022 liability relates to pre-
acquisition profits of Acumentis (SA) Pty Ltd (note 13(b)), which following the acquisition has been added
to the tax consolidation group. In accordance with the tax consoled ation legislation, Acumentis Group
Limited as the head entity of the Australian tax-consolidated group has assumed responsibility for the
current tax asset/liability initially recognised by the members in the tax-consolidated group.
Income tax on the Statement of Profit & Loss and Other Comprehensive Income for the year comprises
current and deferred tax. Income tax is recognised in the Statement of Profit & Loss and Other
Comprehensive Income except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of
previous years.
The Company and its wholly owned Australian resident entities have formed a tax-consolidated group
with effect from 1 July 2003 and are therefore taxed as a single entity from that date. Newly acquired
wholly owned entities are immediately added to the tax-consolidation group. The head entity within the
tax-consolidated group is Acumentis Group Limited.
(i)
Tax consolidation
Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary
differences of the members of the tax-consolidated group are recognised in the separate financial
statements of the members of the tax-consolidated group using the group allocation approach by
reference to the carrying amounts of assets and liabilities in the separate financial statements of
each entity and the tax values applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the
subsidiaries are assumed by the head entity in the tax-consolidated group and are recognised as
amounts payable (receivable) to (from) other entities in the tax-consolidated group in conjunction
with any tax funding arrangement amounts (refer below). Any difference between these amounts
is recognised by the Company as an equity contribution or distribution.
The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated
group to the extent that it is probable that future taxable profits of the tax-consolidated group will
be available against which the tax losses can be utilised.
Any subsequent period adjustments to deferred tax assets arising from unused tax losses as
a result of revised assessments of the probability of recoverability are recognised by the head
entity only.
Pg 58
Acumentis Annual Report 2023
(ii) Nature of tax funding arrangements and tax sharing arrangements
The head entity, in conjunction with other members of the tax-consolidated group, has entered
into a tax funding arrangement which sets out the funding obligations of members of the tax-
consolidated group in respect of tax amounts. The tax funding arrangements require payments
to/from the head entity equal to the current tax liability (asset) assumed by the head entity
and any tax-loss deferred tax asset assumed by the head entity, resulting in the head entity
recognising an inter-entity receivable (payable) equal in amount to the tax liability (asset)
assumed. Any such inter-entity receivables (payables) are at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement
and reflect the timing of the head entity’s obligation to make payments for tax liabilities to the
relevant tax authorities.
The head entity in conjunction with other members of the tax-consolidated group has also
entered into a tax sharing agreement. The tax sharing agreement provides for the determination
of the allocation of income tax liabilities between the entities should the head entity default on
its tax payment obligations. No amounts have been recognised in the financial statements in
respect of this agreement as payment of any such amounts under the tax sharing agreement is
considered remote.
(e)
Deferred tax balances
Deferred tax assets and liabilities are attributable to the following:
Recognised deferred tax assets
Right of use assets
Employee provisions
Provision for expected credit losses
Accruals
Make good provisions
s40-880 ITAA 1936 “black hole” expenditure
Income tax losses carried forward
Finance lease assets
Plant and equipment
Other
2023
$000
248
1,309
45
151
42
95
757
(140)
(12)
50
2,545
2022
$000
403
1,354
90
152
54
143
862
(245)
(16)
38
2,835
Acumentis Annual Report 2023
Pg 59
Movement in temporary differences during the year
Deferred tax assets
Right of use assets
Employee provisions
Doubtful debts
Accruals
Make good provisions
S40-880 “black hole” expenditure
Income tax losses carried forward
Finance lease assets
Plant and equipment
Other
Deferred tax assets
Right of use assets
Employee provisions
Doubtful debts
Accruals
Make good provisions
S40-880 “black hole” expenditure
Income tax losses carried forward
Finance lease assets
Plant and equipment
Other
(f)
Other current assets
Prepaid expenses
Balance
1 July 22
$000
403
1,354
90
152
54
143
862
(245)
(16)
38
2,835
Balance
1 July 21
$000
266
1,114
46
112
54
119
955
-
-
9
2,675
Aquisition
of
Businesses
$000
Recognised
in Profit &
Loss
$000
Change in
Tax Rate
$000
Balance
30 June 23
$000
-
-
-
-
-
-
-
-
-
-
-
(155)
(45)
(45)
(1)
(12)
(48)
(105)
105
4
12
(290)
-
-
-
-
-
-
-
-
-
-
-
248
1,309
45
151
42
95
757
(140)
(12)
50
2,545
Acquisition
of
Businesses
$000
Recognised
in Profit &
Loss
$000
Change in
Tax Rate
$000
Balance
30 June 22
$000
-
147
2
-
-
-
-
-
(16)
(16)
117
-
23
-
-
-
-
-
-
(2)
(2)
19
137
70
42
40
-
24
(93)
(245)
2
47
24
2023
$000
1,064
403
1,354
90
152
54
143
862
(245)
(16)
38
2,835
2022
$000
1,361
Pg 60
Acumentis Annual Report 2023
(g)
Employee benefit obligations
Current
Annual leave
Long service leave
Performance pay
Non-Current
Long service leave
2023
$000
2,062
1,856
979
4,897
446
2022
$000
2,223
1,781
1,225
5,229
509
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long
service leave where employees have completed the required period of service and also for those employees who
are entitled to pro-rata payments in certain circumstances. The entire amount of the annual leave provision is
presented as current, since the group does not have an unconditional right to defer settlement for any of these
obligations.
The non-current portion of the long service leave liability is measured based on the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period.
Consideration is given to expected future wage and salary increases and past experience of employee retention.
Expected future payments are discounted using market yields at the end of the reporting period of high-quality
corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in
profit or loss.
Based on past experience, the group does not expect all employees to take the full amount of accrued leave or
require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken
or paid within the next 12 months.
Current obligations expected to be settled after 12 months
2023
$000
1,621
2022
$000
1,649
Acumentis Annual Report 2023
Pg 61
(h)
Provisions
Non-Current
Make Good
Movement in provisions
Balance at 1 July
Utilised during year
Decrease during year
Balance at 30 June
2023
$000
142
182
(27)
(13)
142
2022
$000
182
Make Good
$000
182
-
-
182
The provision has not been discounted to its present value as the effect is not material. It is expected that
the expense will be incurred within a 5-year period.
7
(a)
Equity
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share on a poll at meetings of the Company. On a show of hands, every shareholder present at a
meeting or by proxy is entitled to one vote. There are currently 218,174,605 ordinary fully paid shares on issue
(2022: 175,317,445). Shares have no par value, and the Company does not have a limited amount of capital.
Share capital
Balance at 30 June 2022
Issue of shares as part consideration for the acquisition of:
Acumentis (WA) Holdings Pty Ltd
Acumentis (SA) Pty Ltd
Shares issued to settle corporate advisory fees in relation to the
acquisition of:
Acumentis (WA) Holdings Pty Ltd
Acumentis (SA) Pty Ltd
Corporations Act 2001 – s258F Capital Reduction
Balance at 30 June 2022
Capital raise
Placement of shares
Placement of shares to directors
Share Placement Plan (SPP)
Placement of SPP Shortfall shares
Costs of capital raise
Balance at 30 June 2023
Note
Number
13(a)
13(b)
13(a)
13(b)
7(b)
159,005,153
13,820,096
1,463,339
967,243
61,614
-
175,317,445
21,928,571
6,642,857
3,685,732
10,600,000
-
218,174,605
$000
44,887
1,609
237
113
10
(27,423)
19,443
1,535
465
258
742
(225)
22,208
Pg 62
Acumentis Annual Report 2023
On 23 July 2021, the Company issued 13,820,096 ordinary shares at 11.64 cents per share as partial
consideration for the acquisition of the remaining 57.2% of the issued share capital of Acumentis (WA)
Holdings Pty Ltd. An additional 967,243 ordinary shares were issued at 11.64 cents per share to settle
corporate advisory fees in relations to the acquisition.
On 10 February 2022, the Company issued 1,463,339 ordinary shares at 16.23 cents per share as partial
consideration for the acquisition of 100% of the share capital of Acumentis (SA) Pty Ltd. An additional
61,614 ordinary shares were issued at 16.23 cents per share to settle corporate advisory fees in relations
to the acquisition.
On 9 February 2023, the Company issued 21,928,571 ordinary shares at 7 cents per share under a
placement to institutional, professional and sophisticated investors under ASX Listing Rule 7.1.
On 17 March 2023, the Company issued 6,642,857 ordinary shares at 7 cents per share to directors of the
Company, under a placement with the issue to directors approved at an Extraordinary General Meeting held
on 10 March 2023.
On 17 March 2023, the Company issued 3,685,732 ordinary shares at 7 cents per share to existing
shareholders under a Share Purchase Plan (SPP).
On 24 March 2024, the Company issued 10,600,000 ordinary shares at 7 cents per share to institutional,
professional and sophisticated investors under a placement of the SPP Shortfall with the placement of the
shortfall approved by shareholders at an Extraordinary General Meeting held on 10 March 2023.
(b)
Capital Reduction
On 30 June 2022, Acumentis Group Limited reduced its share capital by $27,423,000 in accordance with
section 258F of the Corporations Act 2001, reducing accumulated losses deemed to be of a permanent
nature by the same amount.
There is no impact on shareholders from the capital reduction as no shares have been cancelled or rights
varied, and there is no change in the net asset position of the Company. There is also no impact on the
availability of the Company’s tax losses from this capital reduction.
The losses deemed to be of a permanent nature were as follows:
Year ended 30 June
Impairment of goodwill
Impairment of customer relationships
Impairment of leased assets
Consultants’ costs re cyber-attacks
Acquisition costs expensed
2009
$’000
2017
$’000
195
-
220
-
-
415
-
-
-
-
262
262
2019
$’000
12,284
-
-
407
528
2020
$’000
-
-
497
791
-
2021
$’000
1,904
10,000
131
204
-
Total
$’000
14,383
10,000
848
1,402
790
13,219
1,288
12,239
27,423
Acumentis Annual Report 2023
Pg 63
(c)
Options to acquire ordinary shares
The holders of options are not entitled to receive dividends nor are they entitled to vote at meetings of the
Company.
Options
Balance at 1 July
Balance at 30 June
2023
Number
2,500,000
2,500,000
2022
Number
2,500,000
2,500,000
On 23 August 2019, 2,500,000 options were issued to the underwriter and lead manager of the share
offer in part consideration of the services provided. These options have an exercise price of $0.12 and an
expiry date of 23 August 2023.
8
Other Reserves
Share-based payments
Balance at 1 July
Performance rights expense
Balance at 30 June
2023
$000
127
38
165
2022
$000
31
96
127
Pg 64
Acumentis Annual Report 2023
9
(a)
Cash flow information
Reconciliation of profit after income tax to net cash inflow from operating activities
Notes
2023
$000
2022
$000
429
1,445
Profit for the period after tax
Adjustments for the period
Depreciation & amortisation
Loss on disposal of fixed assets
Gain on de-recognition of investment in associated company
13(a)
Gain on disposal of right of use asset
Expenses settled via issue of shares
Performance rights expense
Changes in assets & liabilities during the period net of amounts
relating to acquisition of controlled entities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other financial assets
(Increase)/decrease in deferred tax assets
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provision for income tax
Increase/(decrease) in employee benefit obligations
Increase/(decrease) in provisions
Net cash from operating activities
7(a)
5(c)
5(d)
6(e)
6(f)
5(e)
6(d)
6(g)
6(h)
2,287
53
-
-
-
38
2,807
371
347
290
297
(328)
(28)
(395)
(40)
3,321
1,935
-
(1,539)
(56)
123
96
2,004
(861)
321
(43)
(343)
326
(151)
294
-
1,547
Acumentis Annual Report 2023
Pg 65
Risk
ASX:ACU FY22-23
Pg 66
Pg 66
Acumentis Annual Report 2023
Acumentis Annual Report 2023
RISK
This section of the notes discusses the Consolidated Entity’s exposure to various risks and shows how
these could affect the Consolidated Entity’s financial position and performance.
10
Significant estimates & judgements
The preparation of financial statements requires the use of accounting estimates which, by definition,
will seldom equal the actual results. Management also needs to exercise judgement in applying the
Consolidated Entity’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity,
and of items which are more likely to be materially adjusted due to estimates and assumptions turning
out to be wrong. Detailed information about each of these estimates and judgements is included in notes
1 to 7 together with information about the basis of calculation for each affected line item in the financial
statements.
The areas involving significant estimates or judgements and which have the potential for material impact
to the financials are:
• Deferred contingent consideration (note 5(h))
•
•
Intangible assets (note 6(c))
Employee benefits (note 6(g))
11
Financial risk management
This note explains the Consolidated Entity’s exposure to financial risks and how these risks could affect
the Consolidated Entity’s future financial performance. Current year profit and loss information has been
included where relevant to add further context.
Risk
Exposure arising from
Measurement
Management
Credit risk
Cash and cash equivalents, trade
receivables and debt investments and
contract assets
Ageing analysis
Credit ratings
Diversification of bank
deposits
Credit limits
Liquidity risk
Borrowings and other liabilities
Rolling cash flow
forecasts
Availability of borrowing
facilities
Interest rate risk
Long-term borrowings at variable rates
Sensitivity analysis
Accept risk given low
levels of debt
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Chief Executive Officer and Chief Financial Officer are responsible for developing and
monitoring risk management policies.
Risk management policies are established to identify and analyse the risks faced by the Consolidated
Entity, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and
the Consolidated Entity’s activities. The Consolidated Entity, through their training and management
Acumentis Annual Report 2023
Pg 67
standards and procedures, aim to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations.
The Consolidated Entity’s Audit Committee oversees how management monitors compliance with the
Consolidated Entity’s risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Consolidated Entity.
(a)
Credit Risk
Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Consolidated Entity’s
receivables from wholesale and retail clients.
Trade and other receivables
The Consolidated Entity’s exposure to credit risk is influenced mainly by the individual characteristics of
each customer. The demographics of the Consolidated Entity’s customer base, including the default risk
of the industry and country, in which clients operate, has less of an influence on credit risk.
The Consolidated Entity has established a credit policy under which each new customer is analysed
individually for creditworthiness before the Consolidated Entity’s standard payment and delivery terms
and conditions are offered. Credit limits are established for each customer, these limits are reviewed
regularly. Clients which fail to meet the Consolidated Entity’s benchmark creditworthiness are placed on a
restricted customer list and may transact with the Consolidated Entity only on a prepayment basis.
In monitoring customer credit risk, clients are grouped according to their credit characteristics, including
whether they are an individual or legal entity, whether they are a wholesale, retail or end-user customer,
geographic location, industry, ageing profile, maturity and existence of previous financial difficulties. The
Consolidated Entity’s trade and other receivables relate mainly to the Consolidated Entity’s retail clients.
The Consolidated Entity does not require collateral in respect of trade and other receivables.
The Consolidated Entity has established an allowance for credit losses that represents their estimate of
expected credit losses in respect of trade and other receivables.
Exposure to credit risk
The carrying amount of the Consolidated Entity’s financial assets represents the maximum credit risk
exposure.
The Consolidated Entity’s maximum exposure to credit risk at the end of the reporting period was:
Trade and other receivables
Other financial assets
Cash and cash equivalents
Term deposits & other
Note
5(c)
5(d)
5(a)
5(b)
2023
$000
5,916
655
1,697
914
9,182
2022
$000
6,287
1,002
856
929
9,074
Pg 68
Acumentis Annual Report 2023
The Consolidated Entity’s maximum exposure to credit risk for trade and other receivables before
impairment losses at the end of the reporting period by type of customer was:
Financial clients
Non-financial clients
Government non-financial clients
The Consolidated Entity’s most significant clients included the following amounts
within trade and other receivables carrying amounts:
An Australian financial client
An Australian non-financial client
An Australian Government non-financial client
2023
$000
3,657
1,710
701
6,068
928
146
239
2022
$000
4,259
1,878
449
6,586
1,002
286
94
Impairment Losses
The aging of the Consolidated Entity’s trade and other receivables at the end of the reporting period was:
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121 days or more
Gross
2023
$000
5,019
663
108
278
6,068
Impairment
2023
$000
7
2
2
141
152
Gross
2022
$000
5,176
696
420
294
6,586
Impairment
2022
$000
6
5
20
268
299
The movement in the allowance for impairment in respect of trade receivables during the year was as
follows:
Balance at 1 July
(Decrease) / Increase during year
Balance at 30 June
2023
$000
299
(147)
152
2022
$000
153
146
299
The Consolidated entity applies the AASB 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowances for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics and the days past
due.
Acumentis Annual Report 2023
Pg 69
The expected loss rates are based on payment profiles of sales over a 5 year period ended 30 June 2022
and the corresponding historical credit losses experienced over this period and to 30 June 2023 (for
invoices raised prior to 30 June 2022). The historical loss rates are adjusted to reflect current and forward-
looking macro-economic factors that might impact the ability of customers to settle the receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include, amongst others, the failure of the debtors to
engage in a repayment plan and the failure to make contractual payments for a period of greater than 120
days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit.
Subsequent recoveries of amounts written off are credited against the same line item.
(b)
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they
fall due. The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Consolidated Entity’s reputation.
Typically, the Consolidated Entity ensures that it has sufficient cash on demand to meet expected
operational expenses for a period of 45 to 60 days, including the servicing of financial obligations; this
excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as
natural disasters.
The following are the contractual maturities of financial liabilities, including estimated interest payments
and excluding the impact of netting arrangements:
Non-derivative financial liabilities
Note
Carrying
Amount
$000
Contractual
cash flows
$000
Payable
6 months
or less
$000
Payable
between
6 and 12
months
$000
Payable after
12 months
$000
30 June 2023
Trade and other payables
Short and long term loans
Lease liabilities
Deferred consideration
30 June 2022
Trade and other payables
Short and long term loans
Lease liabilities
Deferred consideration
5(e)
5(f)
5(g)
5(h)
5(e)
5(f)
5(g)
5(h)
3,834
47
3,331
1,406
8,618
4,162
2,356
3,832
1,812
3,834
47
3,331
1,406
8,618
4,162
2,356
3,832
1,812
3,834
4
865
143
4,846
4,162
454
878
203
-
4
900
-
904
-
454
683
203
12,162
12,162
5,697
1,340
-
39
1,566
1,263
2,868
-
1,448
2,271
1,406
5,125
Pg 70
Acumentis Annual Report 2023
(c)
Interest risk
Interest rate risk is the risk that changes in interest rates will affect the Consolidated Entity’s income
and expenses or the value of its holdings of financial instruments and financial liabilities. The objective
of interest rate risk management is to manage and control interest rate risk exposures within acceptable
parameters, while optimising the return.
Interest rate risk is managed by seeking to maximise the yield achieved on cash held at bank and minimise
the interest rates incurred on borrowings.
At the end of the reporting period the interest rate profile of the Consolidated Entity’s interest-bearing
financial instruments and borrowings was:
Variable rate instruments
Assets
- Cash and cash equivalents
- Non-current financial assets
Liabilities
- Current borrowings
- Non-current borrowings
Fixed rate instruments
Assets
- Term deposits
- Current financial assets
- Non-current financial assets
Liabilities
- Current lease liabilities
- Non-current lease liabilities
Note
5(a)
5(d)
5(f)
5(f)
5(b)
5(d)
5(d)
5(g)
5(g)
2023
$000
1,697
189
8
39
914
371
95
1,765
1,566
2022
$000
856
186
908
1,448
929
349
467
1,561
2,271
(d)
Cash flow sensitivity analysis for rate instruments
The impact of interest rate changes on the profitability of the Consolidated Entity is likely to be immaterial.
(e)
Fair values
The Directors consider that the fair value of financial assets and financial liabilities of the Consolidated
Entity approximate their carrying amount.
(f)
Financial instruments at fair value
The Consolidated Entity has adopted the following fair value hierarchy in relation to its financial instruments
that are carried in the balance sheet at fair value:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
Level 3
Inputs, other than quoted prices included within Level 1, that are observable for the asset
or liability either directly (as prices) or indirectly (derived from prices).
Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Acumentis Annual Report 2023
Pg 71
The following table sets out the fair value of liabilities that are measured at fair value:
30 June 2023
Deferred contingent consideration (note 5(h))
-
-
1,263
1,263
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
30 June 2022
Deferred contingent consideration (note 5(h))
Level 1
$000
-
Level 2
$000
-
Level 3
$000
1,263
Total
$000
1,263
The fair value of the deferred contingent consideration is determined based on the expected payment which is
dependent upon the average profit before tax for the acquired businesses for the three years ended 30 June
2025. This unobservable input is estimated by applying various growth factors to current and forecast revenues
and costs (consistent with those utilised for testing impairment of the goodwill related to these acquisition –
refer note 6(c)(iv)) which results in a weighted average annual growth in profit of 44% over the remaining two
years of the three year measurement period.
If the weighted average growth in profit changed then the deferred consideration would change as follows:
• Growth in profit increased by 10%, deferred consideration would increase by $89,000
• Growth in profit decreased by 10%, deferred consideration would decrease by $92,000
The amount is not discounted due to the immaterial impact that discounting would have.
12
(a)
Capital management
Risk management
The Company’s objectives when managing capital are to:
•
•
Safeguard their ability to continue as a going concern, so they can continue to provide returns to shareholders
and benefits to other stakeholders;
To maintain a capital structure that is appropriate for a professional services firm with limited tangible
assets; and
•
To reduce the overall cost of capital.
In order to maintain or adjust capital structure, the Company may adjust the level of dividends to shareholders,
return capital to shareholders, issue new shares, source new debt finance or repay debt finance.
Pg 72
Acumentis Annual Report 2023
The Company monitors capital on the basis of the following gearing ratio:
Net debt (borrowings minus cash or cash equivalents) / total equity
Borrowings
Cash or cash equivalents
(Net cash) / net debt
Total Equity
Net debt to equity ratio
Note
5(f)
5(a)
2023
$000
47
(1,697)
(1,650)
24,070
(7%)
2022
$000
2,356
(856)
1,500
20,828
7%
The Company also monitors net working capital calculated as follows:
Cash or cash equivalents
Trade and other receivables
Trade and other payables
Current borrowings
Current tax liabilities
Current deferred consideration
Current employee benefit obligations
- Total
- Expected to be settled after 12 months
Note
5(a)
5(c)
5(e)
5(f)
6(d)
5(h)
6(g)
6(g)
2023
$000
1,697
5,916
2022
$000
856
6,287
(3,834)
(4,162)
(8)
-
(143)
(4,897)
1,621
352
(908)
(28)
(406)
(5,229)
1,649
(1,941)
The net working capital increased during the year as a result of the capital raise and resultant retirement
of debt and the benefits of the restructuring undertaken in calendar 2022 resulting in a lower employee
cost base.
During the year, the Consolidated Entity’s approach to capital management changed. Following the capital
raise in February/March 2023, the Consolidated Entity repaid outstanding bank bills and replaced its
$1.7M overdraft facility with a $3M receivables facility which carries a lower interest rate.
As a result of the restructure of the borrowing facilities, the Consolidated Entity is no longer required to
comply with any financial covenants or capital restrictions.
Acumentis Annual Report 2023
Pg 73
(b)
Dividends
(i)
Ordinary shares
Dividends recognised in the current and prior years by the Company are:
2023
No dividends declared
2022
No dividends declared
Cents per
share
Total amount
$000
Franked/
unfranked
Date of
Payment
-
-
-
-
-
-
-
-
(ii)
Franked dividends
After the end of the reporting period, the directors have not declared a final dividend.
Dividend franking account
30% franking credits available to shareholders of Acumentis Group Limited for
subsequent financial years
Company
2023
$000
Company
2022
$000
2,079
2,079
The above available amounts are based on the balance of the dividend franking account at the
end of the reporting period adjusted for:
a)
b)
c)
Franking credits that will arise from the payment of the current tax liabilities;
Franking debits that will arise from the payment of dividends recognised as a liability at
the year-end; and
Franking credits that will arise from the receipt of dividends recognised as receivables by
the tax consolidated group at the year-end.
The ability to utilise the franking credits is dependent upon there being sufficient available profits
to declare dividends. As there is no dividend declared for 2023, there is no impact on the dividend
franking account for dividends proposed after the end of the reporting period but not recognised
as a liability (2022: nil).
Pg 74
Acumentis Annual Report 2023
THIS PAGE IS AN INTENTIONALLY BLANK PAGE
Acumentis Annual Report 2023
Pg 75
Group
structure
ASX:ACU FY22-23
Pg 76
Pg 76
Acumentis Annual Report 2023
Acumentis Annual Report 2023
GROUP STRUCTURE
This section provides information which will help users understand how the group structure affects the financial
position and performance of the Consolidated Entity as a whole. In particular, there is information about::
•
•
•
Changes to the structure that occurred during the year as a result of business combinations and the
disposal of a discontinued operation;
Transactions with non-controlling interests; and
Interests in joint operations.
A list of significant subsidiaries is provided in note 14(a). This note also discloses details about the Consolidated
Entity’s equity accounted investments.
13
(a)
Business combinations - Acquisitions
Acumentis (WA) Holdings Pty Ltd and its controlled entities (“ACU WA”)
Summary of acquisition
Effective 1 July 2021, the Company acquired the remaining 57.8% of issued shares in ACU WA thereby
taking its holding to 100%.
Up to 30 June 2021, the Company’s existing 42.2% investment had been accounted for using the equity
method. The associated asset was de-recognised and a gain representing the difference between fair
value and the carrying value of the investment at 30 June 2021 was recorded as follows:
Fair value of net assets of Acumentis (WA) Holdings Pty Ltd
Acumentis’ 42.2% share
Dividend paid prior to completion of acquisition
Carrying value of associate
Gain on de-recognition of asset
ACU WA
$000
6,281
2,653
80
(1,194)
1,539
Acumentis Annual Report 2023
Pg 77
Details of the purchase consideration, the net assets acquired, and goodwill were as follows:
Details of the consideration transferred
Cash paid ($1,834,000 to vendors and $2,000 to vendors’ advisors)
Cash payable within 12 months (in 2 equal installments on 23 Jan 2022 and 23 Jul 2022)
Cash payable greater than 12 months (payable on 23 Jan 2023)
Contingent consideration1
Shares issued (13,820,096 ordinary shares at $0.1164 per share) (note 7(a))
Fair value of existing shareholding
Fair value of assets and liabilities acquired
Cash and cash equivalents
Term deposits
Trade and other receivables
Other current assets
Deferred tax assets
Property, plant & equipment
Right of use assets
Intangible assets
Trade and other payables
Dividend payable2
Tax payable
Borrowings
Lease liabilities
Employee benefits
Goodwill3
Net cashflows from acquisition
Cash paid
Cash and cash equivalents acquired
$000
1,836
122
61
797
1,609
4,425
2,653
7,078
1,263
34
727
110
111
121
109
1
(729)
(190)
(151)
(137)
(111)
(473)
685
6,393
7,078
(1,836)
1,263
(573)
1.
The contingent consideration is calculated as 4.5X the average profit before tax for the three years ended 30 June 2025 minus the initial and fixed deferred
considerations already paid. Any contingent consideration payable will be satisfied 55% in cash and 45% via the issue of Acumentis Group Limited ordinary
shares. Contingent consideration will be settled following finalisation of the FY2025 audit (expected in August 2025).
2.
The dividend relates to pre-acquisition profits and was paid in July 2021 with $110,000 paid to previous shareholders and paid $80,000 to Acumentis Group
Limited.
3.
The goodwill is attributable to the workforce and the profitability of the acquired business. It will not be deductible for tax purposes.
The fair value of the ordinary shares issued as part consideration was based on the volume weighted
average published share price for the 15 trading days prior to 18 May 2021 when the acquisition was
agreed and announced to the Australian Stock Exchange.
Pg 78
Acumentis Annual Report 2023
Acquisition costs
Acquisition costs of $23,000 are included in other expenses in the statement of profit or loss and in
operating cash flows in the statement of cashflows.
Fees paid to the Company’s corporate advisor of $113,000 are included in other expenses in the statement
of profit or loss and were settled via the issue of ordinary shares (see note 7(a)) and so does not appear in
the statement of cashflows.
(b)
Acumentis (SA) Pty Ltd (“ACU SA”)
Summary of acquisition
Effective 1 February 2022, the Company acquired 100% of the issued share capital of ACU SA which had previously
operated as a franchisee of the wholly owned Western Australian Acumentis business.
Details of the purchase consideration, the net assets acquired, and goodwill were as follows:
Details of the consideration transferred
Cash paid – consideration
- Paid on settlement
- Payable in 3 equal instalments 6, 12 & 18 months after settlement
Contingent consideration1
Shares issued (1,463,339 ordinary shares at $0.1623 per share) (note 7(a))
Provisional fair value of assets and liabilities acquired
Cash and cash equivalents
Trade and other receivables
Deferred tax assets
Property, plant & equipment
Trade and other payables
Tax payable
Lease liabilities
Employee benefits
Goodwill2
Net cashflows from acquisition
Cash paid
Cash and cash equivalents acquired
2022
$000
419
428
466
237
1,550
187
129
6
61
(84)
(28)
(59)
(91)
121
1,429
1,550
(419)
187
(232)
1.
The contingent consideration is calculated as 3X the average profit before tax for the three years ended 30 June 2025 minus the initial and fixed deferred
considerations already paid. Any contingent consideration payable will be satisfied 75% in cash and 25% via the issue of Acumentis Group Limited ordinary
shares. Contingent consideration will be settled following finalisation of the FY2025 audit (expected in August 2025).
2.
The goodwill is attributable to the workforce and the profitability of the acquired business. It will not be deductible for tax purposes.
Acumentis Annual Report 2023
Pg 79
The fair value of the ordinary shares issued as part consideration was based on the volume weighted average
published share price for the 15 trading days prior to 31 January 2022 when the acquisition was agreed and
announced to the Australian Stock Exchange.
Acquisition costs
Acquisition costs of $11,000 are included in other expenses in the statement of profit or loss and in operating cash
flows in the statement of cashflows.
Fees paid to the Company’s corporate advisor of $10,000 are included in other expenses in the statement of profit
or loss and were settled via the issue of ordinary shares (see note 7(a)) and so does not appear in the statement
of cashflows.
(c)
Revenue & Profit Contribution
The acquired entities / business contributed the following revenues and profits between the effective date of
acquisition and the end of the financial year:
Acquisition date
Revenue
Net profit before tax
2022
ACU WA
$000
2022
ACU SA
$000
1 Jul 2021
1 Feb 2022
7,583
857
780
57
2022
Total
$000
8,363
914
If the acquisitions had occurred on 1 July 2021, consolidated revenue and loss before tax would have been:
Revenue
Net profit / (loss) before tax
14
(a)
Interests in other entities
Subsidiaries
2022
$000
57,885
1,581
The Consolidated Entity’s subsidiaries at 30 June 2023 are set out below. Unless otherwise stated, they have share
capital consisting solely of ordinary shares that are held directly by the Consolidated Entity, and the proportion of
ownership interests held equals the voting rights held by the Consolidated Entity. All entities are incorporated and
operate in Australia only.
Pg 80
Acumentis Annual Report 2023
Ownership interest
held by the
Consolidated Entity
Ownership interest
held by non-
controlling interests
Name of entity
2023
%
2022
%
2023
%
2022
%
Principal activities
Acumentis Pty Ltd
Acumentis Brisbane Pty Ltd
Acumentis Gold Coast Pty Ltd
Acumentis Melbourne Pty Ltd
Acumentis Statutory Services Pty Ltd
Taylor Byrne Holdings Pty Ltd
Acumentis Regional Pty Ltd
Lane Infrastructure Pty Ltd
Acumentis Australia Pty Ltd
LMW Group Pty Ltd 1
Acumentis Joint Venture Pty Ltd 1
Acumentis Management Pty Ltd
Acumentis Advisory Pty Ltd
MVS National Pty Ltd 1
Cosgrave & Eastoe Pty Ltd 1
Hoolihan Valuations Pty Ltd
Acumentis (WA) Holdings Pty Ltd
Acumentis (WA) Pty Ltd
Acumentis (WA) Advisory Pty Ltd
HPG Nominees Pty Ltd
WA Property Valuers Pty Ltd
Acumentis (SA) Pty Ltd
100
100
100
100
100
100
100
100
100
-
-
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Valuations
Commercial valuations
Commercial valuations
Commercial valuations
Government valuations
Non-trading
Regional valuations
Property advisory services
- National valuation contracting entity
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-trading
Non-trading
Group employer
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Valuations
Property advisory services
Franchisor
Non-trading
Valuations
1.
These entities were de-registered on 26 October 2022
Acumentis Annual Report 2023
Pg 81
Unrecognised
items
ASX:ACU FY22-23
Pg 82
Pg 82
Acumentis Annual Report 2023
Acumentis Annual Report 2023
UNRECOGNISED ITEMS
This section of the notes provides information about items that are not recognised in the financial statements
as they do not (yet) satisfy the recognition criteria.
15
Contingent liabilities
In 2019, the Company was the victim of two cyber-attacks which resulted in significant losses. The Company’s
cyber insurance policy responded and paid $1.1M to external consultants and $2.0M to the Company.
On 17 December 2021, the Company’s cyber insurers notified the Company that they now consider that the
two cyber-attacks should be aggregated as a single claim and accordingly have requested repayment of $1.1M.
Based on insurance specialist legal advice the Directors have rejected the repayment request.
The Directors believe that the Company will be successful in rebutting the insurers proposition and accordingly
do not expect to repay any portion of the insurance benefits received and therefore no amounts have been
provided for in the accounts as at 30 June 2023.
The Directors do not believe that legal costs that may be incurred in relation to this matter will have a material
impact on the financial result for the FY23.
The Consolidated Entity, from time to time, is involved in matters of litigation in the normal course of business
in undertaking valuation services. At 30 June 2023 there are no open litigated claims that are expected to
have a material impact on the results of the Consolidated Entity. The Consolidated Entity has professional
indemnity insurance, and under the terms of the insurance policy, each claim has an excess which is required
to be paid by the Consolidated Entity. It was not practical to estimate the maximum contingent liability arising
from litigation; however, in a worst-case situation there could be a material adverse effect on the Consolidated
Entity’s financial position. In the directors’ opinion, disclosures of any further information in relation to litigation
would be prejudicial to the interests of the Consolidated Entity.
16
Commitments
Capital expenditure
The Consolidated Entity does not have any capital expenditure commitments at the end of the reporting period.
Operating lease commitments
Within one year
One year or later and no later than five years
Later than five years
2023
$000
247
-
-
247
2022
$000
259
-
-
259
Under accounting standard AASB16 – Leases, except for leases with terms of 12 months or less or where
the value of the leased asset does not exceed $5,000, commitments under leases are now recorded on the
statement of financial position.
Where the Consolidated Entity leases property and equipment under non-cancellable operating leases with
lease terms less than or equal to 12 months or with asset values less than or equal to $5,000 the leases
continue to be accounted for off balance sheet with operating lease commitments disclosed in the above table.
Acumentis Annual Report 2023
Pg 83
Guarantees
Acumentis Group Limited has not entered into any guarantees, in the current or previous financial year, in
relation to the debts of its subsidiaries.
17
Events occurring after the reporting period
There were no events occurring after the reporting period that have a material impact on the financial
statements or the operating activities of Acumentis Group Limited.
Pg 84
Acumentis Annual Report 2023
THIS PAGE IS AN INTENTIONALLY BLANK PAGE
Acumentis Annual Report 2023
Pg 85
Other
information
ASX:ACU FY22-23
Pg 86
Acumentis Annual Report 2023
OTHER INFORMATION
This section of the notes includes other information that must be disclosed to comply with the accounting
standards and other pronouncements, but that is not immediately related to individual line items in the
financial statements.
18
(a)
Related party transactions
Subsidiaries
Interests in subsidiaries are set out in note 14(a).
(b)
Key management personnel compensation
Executive directors and other key management personnel
Short term employee benefits
Post-employment benefits
Long-term benefits
Share based payments
2023
$
2022
$
953,680
1,064,665
59,366
(5,383)
2,057
60,745
10,084
60,595
1,009,720
1,196,089
Detailed remuneration disclosures are provided in the remuneration report on pages 22 to 29.
(c)
Transactions with other related parties
The following transactions occurred with related parties:
Dividends received from associate
Group management fee income from associates & franchisees
2023
$
-
21,450
2022
$
80,248
29,150
Acumentis Annual Report 2023
Pg 87
(d)
Loans to related parties
Executive directors and other key management personnel
Balance at 1 July
Acquisition of controlled entities
Loans advanced1
Interest charged
Loan & interest repayments received
Balance at 30 June
2022
$
185,991
-
-
10,487
(7,500)
188,978
2021
$
-
16,289
189,745
4,903
(24,946)
185,991
1.
The employee loan was advanced to a vendor shareholder of Acumentis (WA) Holdings Pty Ltd to enable retirement of debt secured against that shareholder’s
investment in Acumentis (WA) Holdings Pty Ltd. The loan carries interest at market rates, equal to the 6 monthly bank bill swap rate plus 2.6% and is repayable
in full on the date of payment of any contingent consideration for the acquisition being August 2025. The loan is secured by the 2,606,565 ordinary shares in
Acumentis Group Limited issued to the vendor as part consideration for the acquisition.
19
(a)
Share-based payments
Employee option & performance rights plans
The directors at their discretion allocate share options or performance rights that entitle key management
personnel and senior employees to purchase shares in the entity. The terms of the options including vesting
conditions and performance criteria vary depending upon the incentive arrangements appropriate for key
management personnel and senior employees and are a part of an approved Employee Share Acquisition
Scheme, which was approved by shareholders at the 2018 Annual General Meeting and renewed at the
2021 Annual General Meeting.
Movements in options during the period were as follows:
As at 1 July
Exercised during the year
As at 30 June
2023
Average
Exercise
Price
-
-
-
2023
Number of
Options
-
-
-
2022
Average
Exercise
Price
-
-
-
2022
Number of
Options
-
-
-
Performance rights were granted under the Acumentis Group Performance Rights and Option Plan which
was approved by shareholders at the 2018 Annual General Meeting and renewed at the 2021 Annual
General Meeting.
The Plan allows the Company to grant options or rights to selected key employees to acquire ordinary
shares in the Company. Participants are required to satisfy performance and service conditions at the
time of the offer. The exercise price for performance rights is nil. Rights cannot be transferred and are not
quoted on the ASX.
Pg 88
Acumentis Annual Report 2023
Movements in performance rights during the period were as follows:
As at 1 July
Granted during the year
Forfeited during year
Failure to meet service condition
Failure to meet performance and market conditions
Vested and exercised during the year
As at 30 June
2023
Number of
Rights
2,416,000
1,140,000
2022
Number of
Rights
1,000,000
1,680,000
(240,000)
(264,000)
(1,000,000)
-
-
-
2,316,000
2,416,000
Tranche
Grant date(s)
Number of rights on issue
FY21
FY22
FY23
15 Oct 20
20 Sep 21 &
28 Oct 21
25 Oct 22
-
1,176,000
1,140,000
Weighted average fair value at grant date1
11.83 cents
13.25 cents
6.92 cents
Service Condition
Market Condition
The executive must remain employed for 3 years
to the finalisation of the statutory audit for the
financial year ended. If the service condition is
not met none of the performance rights will vest.
50% of the performance rights will vest of the
total shareholder return (“TSR”) for Acumentis
is at least equal to the TSR for the ASX300 for
the period
30 Jun 23
30 Jun 24
30 Jun 25
1 Jul 20 –30
Jun 23
1 Jul 21 –
30 Jun 24
1 Jul 22 –30
Jun 25
Performance Condition
50% of the performance rights will vest pro-rata
based on the earnings per share (“EPS”) of
Acumentis Group Limited being between
2.4 cents & 3.2
cents for FY23
2.5 cents & 3.4
cents for FY24
2.6 cents & 3.5
cents for FY25
1.
Rights granted subject to TSR condition are valued using Monte Carlo Simulation. Rights granted subject to EPS condition are valued using the Black-Scholes
model. Expected dividends were not incorporated into these measurements.
The Board has the discretion to adjust the number of rights that ultimately vest and/or the service
condition period if it forms the view that the unadjusted outcome is not appropriate to the circumstances
that prevailed over the measurement period.
The Board has discretion to determine that some or all unvested rights held lapse on a specified date
if allowing the rights to vest would, in the opinion of the Board, result in an inappropriate benefit to the
rights holder. Such circumstances would include joining a competitor or actions that harm the Company’s
stakeholders.
In the case of fraud or misconduct, all unvested rights will be forfeited.
Acumentis Annual Report 2023
Pg 89
(b)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense were as follows:
Options
Performance rights
20
Remuneration of auditors
Audit services
Auditor of the Consolidated Entity – William Buck
Audit and review of the financial reports
Other services
Other William Buck related entities
Acquisition due diligence
Taxation and other services
Total services
2023
$
-
38,000
38,000
2022
$
-
96,115
96,115
2023
$
2022
$
234,000
220,000
-
9,790
13,500
13,740
243,790
247,240
21
(a)
Earnings per share
Basic earnings per share
The calculation of basic earnings per share was calculated as follows:
Profit / (loss) attributable to ordinary shareholders
2023
$000
429
2022
$000
1,445
Weighted average number of shares used as the denominator
Number
Number
Issued Ordinary Shares at 1 July
Shares issued during year
Issued Ordinary Shares at 30 June
175,317,445
159,005,153
42,857,160
16,312,292
218,174,605
175,317,445
Weighted average number of ordinary shares at 30 June
189,605,747
173,444,588
Calculated basic earnings per share
0.23 cents
0.83 cents
Pg 90
Acumentis Annual Report 2023
(b)
Diluted earnings per share
The calculation of diluted earnings per share was calculated as follows:
Profit / (loss) attributable to ordinary shareholders
Weighted average number of ordinary shares and potential
ordinary shares used as the denominator
Issued Ordinary Shares at 1 July
Shares issued during year
Issued Ordinary Shares at 30 June
Weighted average number of ordinary shares at 30 June
Options on issue at 30 June (note 7(c))
Performance rights on issue at 30 June (note 19(a))
2023
$000
429
2022
$000
1,445
Number
Number
175,317,445
159,005,153
42,857,160
16,312,292
218,174,605
175,317,445
189,605,747
173,444,588
2,500,000
2,316,000
2,500,000
2,416,000
Weighted average number of ordinary shares and potential ordinary shares at 30 June
194,421,747
178,360,588
Calculated diluted earnings per share
0.22 cents
0.81 cents
As at the date of this report there are 2,500,000 options over ordinary shares and 2,316,000 performance
rights in the Company.
Acumentis Annual Report 2023
Pg 91
22
Parent entity financial information
The following information has been extracted from the books and records of the parent and has been
prepared in accordance with the accounting standards.
(a)
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained earnings
Other reserves
Total equity
(b)
Statement of profit & loss and other comprehensive income
Total profit / (loss)
Total comprehensive income / (loss)
23
Going concern
2023
$000
2,532
57,019
59,551
26,957
1,382
28,339
2022
$000
31,136
57,950
89,086
55,738
2,999
58,737
31,212
30,349
22,208
8,839
165
31,212
19,433
10,789
127
30,349
2023
$
1,950
1,950
2022
$
(13,528)
(13,528)
The directors are satisfied that the going concern basis of preparation is appropriate and therefore the
financial information does not include any adjustments relating to the recoverability or classification of
recorded asset amounts or to the amounts or classification of liabilities that might be necessary should
the company not be able to continue as a going concern.
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Acumentis Annual Report 2023
24
Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these
consolidated financial statements to the extent they have not already been disclosed in the other notes
above. These policies have been consistently applied to all the years presented, unless otherwise stated.
The financial statements are for the Consolidated Entity consisting of Acumentis Group Limited and its
subsidiaries.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations
Act 2001. Acumentis Group Limited is a for-profit entity for the purpose of preparing the financial
statements.
(i)
Compliance with IFRS
The consolidated financial statements also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii)
Historical cost convention
The financial statements have been prepared on a historical cost basis.
(iii)
New and amended standards adopted by the Consolidated Entity
No new or amended standards were applicable to the Consolidated for the current financial year.
(iv)
New standards and interpretations not yet adopted
The AASB has issued new and amended accounting standards and interpretations that have
mandatory application dates for future reporting periods and which the Consolidated Entity
has decided not to early adopt. These standards are not expected to have a material impact
on the Consolidated Entity in the current or future reporting periods and on foreseeable future
transactions.
(b)
Principles of consolidation and equity accounting
(i)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity
has control. The Consolidated Entity controls an entity when the Consolidated Entity is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Consolidated Entity. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the
Consolidated Entity (refer to note 24(h)).
Acumentis Annual Report 2023
Pg 93
Intercompany transactions, balances and unrealised gains on transactions between companies
within the Consolidated Entity are eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Consolidated Entity.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss, statement of comprehensive income, statement of
changes in equity and balance sheet respectively.
(ii)
Associates
Associates are all entities over which the Consolidated Entity has significant influence but not
control or joint control. This is generally the case where the Consolidated Entity holds between
20% and 50% of the voting rights. Investments in associates are accounted for using the equity
method of accounting (see (iii) below), after initially being recognised at cost.
(iii)
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and
adjusted thereafter to recognise the Consolidated Entity’s share of the post-acquisition profits
or losses of the investee in profit or loss, and the Consolidated Entity’s share of movements in
other comprehensive income of the investee in other comprehensive income. Dividends received
or receivable from associates and joint ventures are recognised as a reduction in the carrying
amount of the investment.
When the Consolidated Entity’s share of losses in an equity-accounted investment equals
or exceeds its interest in the entity, including any other unsecured long-term receivables, the
Consolidated Entity does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Unrealised gains on transactions between the Consolidated Entity and its associates and joint
ventures are eliminated to the extent of the Consolidated Entity’s interest in these entities.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the asset transferred. Accounting policies of equity accounted investees have been changed
where necessary to ensure consistency with the policies adopted by the Consolidated Entity.
The carrying amount of equity-accounted investments is tested for impairment in accordance
with the policy described in note 24(l).
(iv)
Changes in ownership interests
The Consolidated Entity treats transactions with non-controlling interests that do not result
in a loss of control as transactions with equity owners of the Consolidated Entity. A change in
ownership interest results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the subsidiary. Any difference
between the amount of the adjustment to non-controlling interests and any consideration paid
or received is recognised in a separate reserve within equity attributable to owners of Acumentis
Group Limited.
When the Consolidated Entity ceases to consolidate or equity account for an investment because
of a loss of control, joint control or significant influence, any retained interest in the entity is
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Acumentis Annual Report 2023
remeasured to its fair value with the change in carrying amount recognised in profit or loss. This
fair value becomes the initial carrying amount for the purposes of subsequently accounting for
the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Consolidated Entity had directly disposed of the related assets or liabilities. This
may mean that amounts previously recognised in other comprehensive income are reclassified
to profit or loss.
If the ownership interest in an associate is reduced but joint control or significant influence
is retained, only a proportionate share of the amounts previously recognised in other
comprehensive income are reclassified to profit or loss where appropriate.
(c)
Functional and presentation currency
These consolidated financial statements are presented in Australian dollars which is the Company’s
functional currency and the functional currency of all entities within the Consolidated Entity.
(d)
Segment reporting
The Consolidated Entity’s operations and clients are located entirely in Australia.
The Consolidated Entity’s operating segments have been identified based on the segments analysed
within management reports. Based on these criteria, it has been determined that the Consolidated Entity
only operates in the Valuation segment, which provides valuation, research and advice services in relation
to property and businesses.
Accordingly, no separate segment reporting is required.
(e)
Revenue recognition
Revenue is recognised at an amount that reflects the consideration to which the Consolidated Entity is
expected to be entitled to receive for the provision of services to clients.
For each contract with a client, the Consolidated Entity identifies the contract, the performance obligations
in the contract and the total price for the services. The total price is then allocated to the separate
performance obligations under the contract and each part of the total price is recognised as revenue when
the associated performance obligation is satisfied.
For the large majority of contracts with clients, the Consolidated Entity has a single performance obligation
being the delivery of the service and so the revenue is recognised at this point in time.
The specific accounting policies for the Consolidated Entity’s main types of revenue are explained in note 1.
(f)
Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Acumentis Annual Report 2023
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Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition
of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities. Current tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
(g)
Leases
The Consolidated Entity accounts for leases in line with the requirements of AASB 16.
AASB 16 introduced a single lessee accounting model that requires all leases to be accounted for on
balance sheet. A lessee is required to recognise an asset representing the right to use the underlying asset
during the lease term (i.e. right-of-use asset) and a liability to make lease payments (i.e. lease liability).
Two exemptions are available for leases with a term less than 12 months or if the underlying asset is of
low value.
When a new lease is entered into, the net present value of the contracted rental payments is calculated
using the interest rate implicit in the lease, or if this is not able to be reliably estimated, the Consolidated
Entity’s incremental borrowing rate. This amount is capitalised as a right of use asset and depreciated on
a straight line basis over the term of the lease. An offsetting lease liability is recorded. Over the term of
the lease, interest costs are expensed and added to the lease liability and lease payments are deducted
from the liability.
(h)
Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the acquisition
of a subsidiary comprises the:
•
•
•
•
•
Fair values of the assets transferred;
Liabilities incurred to the former owners of the acquired business;
Equity interests issued by the Consolidated Entity;
Fair value of any asset or liability resulting from a contingent consideration arrangement; and
Fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are, with limited exceptions, measured initially at their fair values at the acquisition date. The Consolidated
Entity recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis
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Acumentis Annual Report 2023
either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net
identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred plus the amount of any non-controlling interest in the acquired
entity and the acquisition-date fair value of any previous equity interest in the acquired entity over the fair
value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the business acquired, the difference is recognised directly in profit
or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit
or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains
or losses arising from such re-measurement are recognised in profit or loss.
(i)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they
might be impaired. Other assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-
generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period.
(j)
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in the balance sheet.
(k)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method, less provision for expected credit losses. See note 5(c) for further information
about the Consolidated Entity’s accounting for trade receivables and note 11(a) for a description of the
Consolidated Entity’s impairment policies.
Acumentis Annual Report 2023
Pg 97
(l)
Investments and other financial assets
(i)
Classification
The Consolidated Entity classifies its financial assets in the following categories:
•
•
Those to be measured subsequently at fair value; and
Those to be measured at amortised cost.
The classification depends on the business model for managing the financial assets and the
contractual terms of the cash flows. See note 5 for details about each type of financial asset.
(ii)
Recognition and derecognition
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit
or loss. Such assets are subsequently measured at either amortised cost or fair value depending
on their classification. Classification is determined based on both the business model within
which such assets are held and the contractual cash flow characteristics of the financial asset
unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset,
it’s carrying value is written off.
(iii)
Financial assets at fair value through profit and loss
Financial assets not measured at amortised cost or at fair value through other comprehensive
income are classified as financial assets at fair value through profit or loss.
Typically, such financial assets will be either:
(i)
held for trading, where they are acquired for the purpose of selling in the short-
term with an intention of making a profit; or
(ii)
designated as such upon initial recognition where permitted.
Fair value movements are recognised in profit or loss.
(iv)
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments
which the consolidated entity intends to hold for the foreseeable future and has irrevocably
elected to classify them as such upon initial recognition.
Details on how the fair value of financial instruments is determined are disclosed in note 5(c).
(v)
Impairment
The Consolidated entity applies the AASB 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowances for all trade receivables. To measure
the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due.
The expected loss rates are based on payment profiles of sales over the previous 3 years. The
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historical loss rates are adjusted to reflect current and forward-looking macro-economic factors
that might impact the ability of customers to settle the receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators
that there is no reasonable expectation of recovery include, amongst others, the failure of the
debtors to engage in a repayment plan and the failure to make contractual payments for a period
of greater than 120 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating
profit. Subsequent recoveries of amounts written off are credited against the same line item.
(vi)
Income recognition
Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired,
the Consolidated Entity reduces the carrying amount to its recoverable amount, being the estimated
future cash flow discounted at the original effective interest rate of the instrument, and continues
unwinding the discount as interest income. Interest income on impaired loans is recognised using
the original effective interest rate.
Dividends
Dividends are recognised as revenue when the right to receive payment is established. This applies
even if they are paid out of pre-acquisition profits. However, the investment may need to be tested
for impairment as a consequence, refer note 24(l)(v).
(m)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains
or losses on qualifying cash flow hedges of foreign currency purchases of plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Consolidated Entity and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred.
The depreciation methods and periods used by the Consolidated Entity are disclosed in note 6(a)(ii).
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss. When revalued assets are sold, it is Consolidated Entity policy to transfer any
amounts included in other reserves in respect of those assets to retained earnings.
Acumentis Annual Report 2023
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(n)
Intangible assets
(i)
Goodwill
Goodwill is measured as described in note 6(c). Goodwill on acquisitions of subsidiaries is
included in intangible assets. Goodwill is not amortised but it is tested for impairment annually,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to
benefit from the business combination in which the goodwill arose. The units or groups of units are
identified at the lowest level at which goodwill is monitored for internal management purposes.
(ii)
Trademarks, licences and customer contracts
Separately acquired trademarks and licences are shown at historical cost. Trademarks, licenses
and customer contracts acquired in a business combination are recognised at fair value at the
acquisition date. Where they are assessed as having a finite useful life they are subsequently
carried at cost less accumulated amortisation and impairment losses.
(iii)
Software
Costs associated with maintaining software programmes are recognised as an expense as
incurred. Development costs that are directly attributable to the design and testing of identifiable
and unique software products controlled by the Consolidated Entity are recognised as intangible
assets when the following criteria are met:
•
•
•
•
•
•
It is technically feasible to complete the software so that it will be available for use;
Management intends to complete the software and use or sell it;
There is an ability to use or sell the software;
It can be demonstrated how the software will generate probable future economic benefits;
Adequate technical, financial and other resources to complete the development and to
use or sell the software are available; and
The expenditure attributable to the software during its development can be reliably
measured.
Directly attributable costs that are capitalised as part of the software include employee costs and
an appropriate portion of relevant overheads.
Capitalised development costs are recorded as intangible assets and amortised from the point at
which the asset is ready for use.
(iv)
Amortisation methods and periods
Refer to note 6(c) for details about amortisation methods and periods used by the Consolidated
Entity for intangible assets.
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(o)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the
end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their fair value and subsequently
measured at amortised cost using the effective interest method.
(p)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction
costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Consolidated Entity has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period.
(q)
Borrowing costs
Borrowing costs are expensed in the period in which they are incurred.
(r)
Provisions
Provisions for legal claims and make good obligations are recognised when the Consolidated Entity
has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are
not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any one item included in the same class of obligations
may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine the
present value is a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision due to the passage of time is recognised as
interest expense.
Acumentis Annual Report 2023
Pg 101
(s)
Employee benefits
(i)
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related
service are recognised in respect of employees’ services up to the end of the reporting period and
are measured at the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet.
(ii)
Other long-term employee benefit obligations
The liabilities for long service leave and annual leave are not expected to be settled wholly within
12 months after the end of the period in which the employees render the related service. They are
therefore measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields
at the end of the reporting period of high-quality corporate bonds with terms and currencies that
match, as closely as possible, the estimated future cash outflows. Re-measurements as a result
of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have
an unconditional right to defer settlement for at least twelve months after the reporting period,
regardless of when the actual settlement is expected to occur.
(iii)
Post-employment obligations
The Consolidated Entity operates various defined contribution pension plans.
Pension obligations
For defined contribution plans, the Consolidated Entity pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The
Consolidated Entity has no further payment obligations once the contributions have been paid.
The contributions are recognised as employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the
future payments is available.
(iv)
Share-based payments
Share-based compensation benefits are provided to employees via the Acumentis Group
Employee Option & Performance Rights Plan and an employee share scheme. Information relating
to these schemes is set out in note 19.
Employee options and performance rights
The fair value of options and performance rights granted under the Acumentis Group Limited
Employee Option and Performance Rights Plan is recognised as an employee benefits expense
with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options and performance rights granted:
•
Including any market performance conditions (e.g. the entity’s share price);
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Acumentis Annual Report 2023
•
•
Excluding the impact of any service and non-market performance vesting conditions (e.g.
profitability, sales growth targets and remaining an employee of the entity over a specified
time period); and
Excluding the impact of any non-vesting conditions (e.g. the requirement for employees
to save or holdings shares for a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of
the specified vesting conditions are to be satisfied. At the end of each period, the entity revises
its estimates of the number of options and performance rights that are expected to vest based
on the non-market vesting and service conditions. It recognises the impact of the revision to
original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The Employee Option and Performance Rights Plan is administered by the Acumentis Employee
Share Trust, which is not consolidated. When the options or performance rights are exercised,
the trust transfers the appropriate number of shares to the employee. The proceeds received
net of any directly attributable transaction costs are credited directly to equity.
(v) Profit-sharing and bonus plans
The Consolidated Entity recognises a liability and an expense for bonuses and profit-sharing
based on a formula that takes into consideration the profit attributable to the company’s
shareholders after certain adjustments. The Consolidated Entity recognises a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
(vi) Termination benefits
Termination benefits are payable when employment is terminated by the Consolidated Entity
before the normal retirement date, or when an employee accepts voluntary redundancy in
exchange for these benefits. The Consolidated Entity recognises termination benefits at the
earlier of the following dates: (a) when the Consolidated Entity can no longer withdraw the offer
of those benefits; and (b) when the entity recognises costs for a restructuring that is within the
scope of AASB 137 and involves the payment of terminations benefits. In the case of an offer
made to encourage voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Benefits falling due more than 12 months
after the end of the reporting period are discounted to present value.
(t)
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
(u)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of the reporting period but not distributed at the end
of the reporting period.
Acumentis Annual Report 2023
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(v)
Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
The profit attributable to owners of the Company, excluding any costs of servicing equity
other than ordinary shares; and
By the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the year.
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per
share to take into account:
•
•
The after income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares; and
The weighted average number of additional ordinary shares that would have been
outstanding assuming the conversion of all dilutive potential ordinary shares.
(w)
Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding
off’ of amounts in the financial statements. Amounts in the financial statements have been rounded off
in accordance with the instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
(x)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables
in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as
operating cash flows.
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Acumentis Annual Report 2023
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Acumentis Annual Report 2023
Pg 105
Directors’
declaration
ASX:ACU FY22-23
Pg 106
Acumentis Annual Report 2023
DIRECTORS’ DECLARATION
1
In the opinion of the directors of Acumentis Group Limited (‘the Company’):
(a)
the financial statements and notes set out on pages 34 to 105 and the remuneration
disclosures of the Remuneration report in the Directors’ report, set out on pages 22 to 29,
are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the financial position of the Company and the Consolidated
Entity as at 30 June 2023 and of its performance, for the financial year ended on that
date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
(b)
the financial report also complies with International Financial Reporting Standards as
discussed in note 24(a);
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable
2
The directors have been given the declarations required by Section 295A of the Corporations Act
2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June
2023.
Dated at Sydney this 14th day of August 2023
Signed in accordance with a resolution of the directors:
Keith Perrett
Director
Acumentis Annual Report 2023
Pg 107
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
Acumentis Group Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Acumentis Group Limited (the Company and its subsidiaries (the
Consolidated Entity)), which comprises the consolidated statement of financial position as at 30 June 2023,
the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Consolidated Entity, is in accordance with the
Corporations Act 2001, including:
i. giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Consolidated Entity in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Level 29, 66 Goulburn Street, Sydney NSW 2000
Level 7, 3 Horwood Place, Parramatta NSW 2150
+61 2 8263 4000
nsw.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
Pg 108
Acumentis Annual Report 2023
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Impairment assessments – Goodwill
Area of focus
Refer also to notes 6 (c) and 24 (i) & (n)
The Consolidated Entity’s net assets include a
significant amount of intangible assets, the majority
of which have originated from acquisitions in the
current and prior years.
As at 30 June 2023 the Consolidated Entity’s net
assets include Goodwill of $20.3 million (2022:
$20.3 million).
There is a risk that the Consolidated Entity may not
trade in line with initial expectations and forecasts,
resulting in the carrying amount of intangible
assets exceeding the recoverable amount and
therefore requiring impairment.
In accordance with the requirements of AASB 136
Impairment of Assets, the Consolidated Entity is
required to test goodwill for impairment annually
and whenever there is an indicator of impairment.
The recoverable amount for each Cash Generating
Unit (CGU) to which goodwill has been allocated
has been calculated based on value-in-use
models, which use discounted cash flow forecasts.
The Directors make judgements over certain key
inputs including, but not limited to, revenue growth,
gross margins, discount rates, long term growth
rates and inflation rates.
Due to the high degree of judgement and
estimation involved in the determination of the
recoverable amount of each CGU, and the
significance of the carrying amounts involved, we
have determined that this is an area of significance
in our audit of the financial report.
How our audit addressed it
Our audit procedures included:
— Giving consideration to and performing an
assessment of management’s determination of
CGUs;
— A detailed evaluation of the Consolidated
Entity’s budgeting procedures upon which the
forecasts are based and testing the principles
and integrity of the discounted future cash flow
models;
— Testing the accuracy of the calculation derived
from each forecast model and assessing key
inputs to the calculations such as revenue
growth, gross margins, discount rates and
working capital assumptions;
— Engaging our own valuation specialists to
critically evaluate the appropriateness of the
discount rates and the long-term growth rates
used in the discounted cash flow model;
— Reviewing the historical accuracy of the
forecasts by comparing actual results with the
original forecasts from prior years
— Performing sensitivity analysis of the
calculations; and
— Assessing whether disclosure in the financial
report is appropriate.
Acumentis Annual Report 2023
Pg 109
Other Information
The directors are responsible for the other information. The other information comprises the information
contained in the Directors’ Report but does not include the financial report and the auditor’s report thereon,
which we obtained prior to the date of this auditor’s report, and the annual report, which is expected to be
made available to us after this date.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Consolidated
Entity to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity
or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our independent auditor’s report.
Pg 110
Acumentis Annual Report 2023
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 29 of the directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Acumentis Group Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Yours faithfully
William Buck
Accountants & Advisors
ABN: 16 021 300 521
Domenic Molluso
Partner
Sydney, 14 August 2023
Acumentis Annual Report 2023
Pg 111
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed
elsewhere in this report is set out below.
The Company was admitted to the Australian Stock Exchange under rule 1.3.2(b).
Shareholdings
Shareholding details are as at 28 July 2023.
Substantial shareholders
The number of shares held by substantial shareholders and their associates are set out below:
Shareholder
Redbrook Nominees Pty Ltd
Newport Shipping Company Pty Limited
Citicorp Nominees Pty Ltd
Voting rights
Number of Ordinary Shares
Percentage
31,108,042
25,953,613
25,884,062
14.3%
11.9%
11.9%
Ordinary shares
Holders of ordinary shares are entitled to one vote per share at shareholder meetings.
Options
There are no voting rights attached to options
Distribution of equity security holders
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 50,000
50,001 – 100,000
100,001 and over
Total
Number of Shareholders
Number of shares
55
205
166
253
75
162
916
16,608
731,546
1,350,484
6,439,645
5,519,725
204,116,597
218,174,605
As at 30 June 2023 there were 218,174,605 ordinary shares on issue (note 7(a)).
On-market buy back
There is no current on-market buy back.
Unmarketable Parcels
The number of shareholders holding less than a marketable parcel of 6,489 shares (based on closing
price of $0.073 on 28 July 2023 is 292 and they hold 998,072 securities.
Pg 112
Acumentis Annual Report 2023
Twenty largest shareholders
Name
CITICORP NOMINEES PTY LIMITED
NEWPORT SHIPPING COMPANY PTY LTD
REDBROOK NOMINEES PTY LTD
ACRES HOLDINGS PTY LTD
KIUT INVESTMENTS PTY LTD
ENABLE INVESTMENT MANAGER PTY LTD
MR LESLIE PETER WOZNICZKA
STIBBCO INVESTMENTS PTY LTD
CAROSSAH PTY LTD
WHITE VALUATIONS PTY LTD
MS LYNETTE JANE ELLIS & MR JEFFREY GEORGE KEANE
GOGORM SUPER PTY LTD
KEVIN KING PTY LTD
CONTINUUM PROPERTY CONSULTANCY
BLAKE FRANCIS DEAN LIESCHKE
ARKMIST PTY LTD
MR STEWART ANDREW SMITH
VENTURA RESOURCES PTY LTD
TONY MICHAEL GORMAN
NATHAN ALEXANDER KING
Number of Ordinary Shares
Percentage
25,884,062
19,555,041
14,339,068
10,352,537
10,054,536
6,323,817
5,720,000
4,585,753
4,411,112
3,600,000
3,558,334
3,182,494
3,136,069
3,033,212
2,747,576
2,645,712
2,629,851
2,622,199
2,606,565
2,507,063
11.9%
9.0%
6.6%
4.7%
4.6%
2.9%
2.6%
2.1%
2.0%
1.7%
1.6%
1.5%
1.4%
1.4%
1.3%
1.2%
1.2%
1.2%
1.2%
1.1%
133,495,001
61.2%
Company Secretary
John Wise
Principal registered office
Level 7, 283 Clarence Street
Telephone
Facsimile
Website
Sydney NSW 2000
02 8823 6300
02 8823 6399
www.acumentis.com.au
Location of share registry
Automic Registry Services
Level 5, 126 Phillip Street
Sydney NSW 2000
Telephone 1300 288 664 (toll free within Australia)
+61 2 9698 5414 (outside Australia)
Email hello@automic.com.au
Stock exchange
The company is listed on the Australian Stock Exchange (“ACU”)
Other information
Acumentis Group Limited, incorporated and domiciled in Australia, is a publicly
listed company limited by shares.
Acumentis Annual Report 2023
Pg 113
team acumentis!
Liability limited by a scheme approved under Professional Standards Legislation.
www.acumentis.com.au