2021
ANNUAL
REPORT
AERISON GROUP LIMITED
A B N 7 7 6 1 4 7 3 5 4 7 4
OUR PURPOSE
We are focused on building a successful and
sustainable business that operates with integrity,
fairness and transparency with our people, our
clients, our suppliers and the community.
OUR VISION
To position Aerison as a leading multi-disciplined
engineering design, construction and asset
maintenance service provider, enhancing the
performance of our customers by understanding their
needs and delivering our core services to the highest
quality, safely and to schedule.
OUR DEILVERY
To operate as One Team, providing
safe, seamless delivery.
1
CONTENTS
AERISON AND OUR OPERATIONS
3
Year in a Glance
4
Our Business
5
Our Operations
7
Chair’s Report
8
Chief Executive Officer’s Report
9
Chief Operating Officer’s Report
11
Financial Review
13
Risk Management
16
People
18
Safety
19
GOVERNANCE
21
Our Board
25
Directors' Report
28
Remuneration Report
37
Independence Declaration
38
FINANCIALS
38
Financial Statements
38
Notes to the Financial Statements
43
Audit Opinion
70
Directors' Declaration
72
APPENDICES
73
Appendix A - ASX Shareholder Information
74
Appendix B - Corporate Directory and Glossary
75
AERISON ANNUAL REPORT 2021
2
AERISON AND
OUR OPERATIONS
3
For the year ended 31 December 2021, revenue and underlying EBITDA achieved guidance.
GROUP WORKFORCE
ORDER BOOK
REPORTED NPAT
BASIC EPS
REVENUE
UNDERLYING EBITDA
545
$402.0m $5.4m 1.96cps
$134.9m $12.5m
YEAR AT A GLANCE
4
OUR BUSINESS
OUR HISTORY
Established in 1988, Aerison specialised in the design
and construction of environmental solutions, such as air
pollution control and noise abatement systems, to reduce
the harsh impacts of industry on the environment. Its
namesake, a combination of the Latin words for air and
noise - "aerius" and "sonus" - pays homage to its roots.
Since 1988, Aerison has grown from a specialist
environmental, private company into a broad-based
engineering, design and construction company self-
performing multi-disciplined EPC, engineering and
design, construction and maintenance services to
various industries and customers across Australia.
In July 2021, Aerison Group Limited publicly listed
on the Australian Securities Exchange, marking a
significant milestone in its corporate evolution.
Aerison is headquartered in West Perth and operates
a well-equipped 10,800m2 industrial fabrication and
assembly facility in Forrestfield, Western Australia.
Aerison has a workforce of 545 employees, including
125 qualified engineers, construction management
specialists and supporting professionals and 420
site-based construction personnel.
In July 2021,
Aerison Group Limited
publicly listed on the
Australian Securities
Exchange, marking a
significant milestone in its
corporate evolution.
5
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
AERISON ANNUAL REPORT 2021
3. FINANCIALS
4. APPENDICES AND REFERENCES
OUR BUSINESS (CONTINUED)
OUR CAPABILITIES
Aerison has a proven history of delivering turnkey solutions to our customers which are
safe, on-time and on-budget. Our capabilities may be broadly explained as follows:
ENGINEERING, PROCUREMENT AND CONSTRUCTION PROJECTS
Aerison provides engineering and design, procurement, fabrication and site construction
services to deliver turnkey solutions for our customers. Aerison adapts to the contracting
model required by our customers, such as full EPC or single discipline service delivery.
Our multi-disciplined EPC expertise also extends to environmental solutions, including
systems concerning wet and dry dust collection systems, greenhouse gas reduction
systems, noise abatement and waste water treatment solutions.
SUSTAINING CAPITAL, MAINTENANCE AND SHUTDOWN SERVICES
Specialising in the structural, mechanical, piping, electrical and instrumentation
disciplines, Aerison’s services include scoping of works, planning, procurement supervision
and execution of routine, preventative, planned and unplanned maintenance services on
process and non-process assets.
ELECTRICAL AND CONTROL INFRASTRUCTURE
Aerison offers a wide-ranging suite of Electrical, Instrumentation and Control (EIC) services
with significant expertise in control systems across all industries. Our expertise includes:
Design, fabrication, fit-out and installation of low, medium and high voltage modular
switch and control rooms, kiosks and ring main units.
Design, supply and installation of standby, black-start and back-up power generation
and battery energy storage solutions.
Aerison has complete electrical, instrumentations and controls capability with our team of
highly qualified and experienced EIC personnel.
6
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
AERISON ANNUAL REPORT 2021
4. APPENDICES AND REFERENCES
OUR OPERATIONS
Western Turner Syncline Iron Ore Mine (Rio Tinto)
Robe Valley Iron Ore Mine (Rio Tinto)
Tom Price Conveyor Installation (Rio Tinto)
Yandi Chiller Installation (Rio Tinto)
Kwinana Nickel Refinery (BHP)
Saline Water Reverse Osmosis Plant (Roy Hill)
Ultrafine Iron Recovery Project (Roy Hill)
West Angelas Iron Ore Mine (Rio Tinto)
Paraburdoo Iron Ore Mine (Rio Tinto)
Roy Hill Iron Ore Mine (Roy Hill)
Yandi Iron Ore Mine (Rio Tinto)
Christmas Creek Iron Ore Mine (Fortescue Metals)
Boddington Gold Mine (Newmont)
Sino Iron Iron Ore Mine (Citic Pacific)
Fabrication of Pipe Rack Modules (Covalent Lithium)
Toxic Fume Extraction and Scrubbing System (KCGM)
Horizon Power Switchrooms (Avid)
Dust Collection Modularisation System (Laing O'Rourke)
Iron Bridge Switchrooms (Eaton)
Compressor Station Switchrooms (APA Ambania)
METRONET Battery Boxes Fabrication (Alstom)
Battery Energy Storage Facility (EDL)
Esperance Tonnes to Port Project (CBH)
East Rockingham to Energy Project (Acciona)
Wagerup Alumina Refinery Switchrooms (Alcoa)
WA
Key projects and services in delivery or completed
during 2021 include:
1
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8
8
15
15
2
2
9
9
16
16
3
3
10
10
17
17
4
4
11
11
18
18
22
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5
12
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AERISON ANNUAL REPORT 2021
7
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
CHAIR’S REPORT
It is my pleasure to present the 2021 Annual Report
for Aerison Group Limited. During the year, Aerison
continued to execute its growth strategies whilst
delivering record revenues and underlying earnings.
We continued to deliver tailored solutions for our
customers and reacted swiftly to manage the impacts of
the COVID-19 pandemic and a constrained labour market.
Established in Perth, Western Australia, in 1988, Aerison
has evolved from a specialist environmental outfit to
a company which engineers, procures and constructs
turnkey complex infrastructure and environmental
solutions, together with routine shutdown maintenance
services. Following successful admission for official
quotation on the ASX in July 2021, Aerison has built
on this significant milestone to continue to grow the
business for the benefit of shareholders. The success
of our fully-subscribed initial public offering speaks to
a demonstrated history of repeat custom from leading
Australian companies for our consistently high-quality
service offering, our strong financial position and the
quality and experience of our people.
Aerison’s fully-subscribed initial public offering raised
$13.500 million, comprising an offer of 37,500,000
new shares at an issue price of $0.20 each and the
sale of 30,000,000 existing shares from its foundation
shareholders at a sale price of $0.20 each. The funds
raised from the 37,500,000 new shares has supported the
working capital requirements of our business, enabling us
to secure new contracts and expand our service delivery
to existing clients.
This has enabled Aerison to focus on executing its
double-digit growth strategy for shareholders. For the
year ending 31 December 2021, Aerison achieved revenue
of $134.886 million (representing revenue growth of
34.2% on the prior year) and underlying earnings before
interest, tax, depreciation and amortisation of $12.505
million (representing earnings growth of 19.6% on the
prior year).
The Company is pleased to forecast another year of
double-digit revenue growth, with current revenue
guidance for 2022 sitting at $180.0 million. This
forecast revenue is fully secured and includes works
under contract, repeat revenue from master service
agreements and expected recurring revenue streams.
The continued growth in revenue and earnings is
attributed to Aerison’s strong operational and financial
performance to date and details of our operating
performance and growth are set out in Daniel Hibbs’ Chief
Operating Officer’s Report.
In closing, Aerison has made a promising start as a
listed company, exceeding the forecast guidance in our
Prospectus despite challenging operating environments.
I am both confident and excited in what the future holds
for the Company. On behalf of the Board, I would also like
to recognise our people for their ability to successfully
navigate an unprecedented 2021, responding to every
challenge and opportunity that arose to deliver an
exceptional outcome for our shareholders.
Bronwyn Barnes
Non-Executive Chair
28 February 2022
Perth
AERISON ANNUAL REPORT 2021
8
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
CEO'S REPORT
Aerison successfully navigated through
a challenging 2021 to deliver a 34.2 per
cent increase in revenue to $134.886
million and expects to continue this
trend with 2022 revenue guidance of
$180.0 million fully secured.
Aerison successfully navigated through a challenging
2021 to close out the year ended 31 December 2021
with another year of double-digit growth in revenue
increasing 34.2% on the previous year at $134.886
million. Following this trend, underlying earnings before
interest, tax, depreciation and amortisation (EBITDA)
increased to $12.505 million, a 19.6% increase on the
prior period. Underlying EBITA excludes non-recurring
initial public offering (IPO) costs of $0.986 million.
Since the successful IPO and ASX listing in July 2021,
the Company’s order book has grown 33.3% to $402.0
million from $300.0 million. In addition, we start the
new financial year in a strong position with our revenue
guidance for 2022 of $180.0 million fully secured.
A stringent focus on expanding the scope and scale of
our service offering to existing customers, together
with fostering new relationships with some of Australia’s
leading mining companies, highlights the success of our
growth strategy.
FINANCIAL
A strong financial performance in 2021 positions Aerison
favourably for 2022:
Revenue of $134.886 million, increasing 34.2% on 2020.
Underlying EBITDA of $12.505 million, increasing
19.6% on 2020.
Net profit after taxes of $5.358 million, increasing
5.9% on 2020.
Cash and available undrawn facilities of $18.307
million, improving 15.9% on 2020.
Net assets of $33.781 million, increasing 87.3% on 2020.
Net debt of $6.494 million, improving 34.9% on 2020.
CAPITAL EXPENDITURE
Capital expenditure of $1.854 million, increasing $1.481
million from 2020, was incurred in 2021. This significant
investment highlights:
The transition of our in-house fabrication
operations to a larger, well-equipped industrial
facility in Forrestfield, Western Australia, to support
growth in the volume of our secured work in hand.
The expansion and replacement of our motor
vehicle and plant and equipment.
The implementation of next-generation IT
platforms, such as the Rapid Crews mobilisation
and AERISAFE HSEQ systems, and computer
equipment to better support our day-to-day
operations with real-time, data-enabled decisions.
CASH FLOW AND FUNDING
Aerison continues to benefit from the ongoing support
of our external banking partners and shareholders
in achieving our growth targets. Key achievements
included:
In March 2021, Aerison increased its existing and
secured banking facilities to $41.000 million,
increasing 69.3% on 2020.
In July 2021, Aerison successfully raised $7.500
million from the issue of 37,500,000 ordinary shares
as part of the IPO.
In November 2021, Aerison entered a new surety
bonding facility arrangement for $15.500 million to
support our new contract wins.
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
The sum of our bank guarantee and surety bond
facilities was $31.500 million at 31 December 2021, of
which $28.757 million was utilised. As Aerison continues
to grow, further external bank guarantee facilities will
be required to support future growth.
PEOPLE AND CULTURE
Strong demand for our services, combined with
Western Australian travel restrictions and tight labour
availability, focussed our attention on employee
retention. Pleasingly, our retention initiatives
culminated in an increase in our workforce to
545 employees (2020: 534 people). Our continued
investment in employee professional development,
market-competitive pay and reward and recognition
programs has positioned Aerison to successfully
execute its work in hand in 2022.
SAFETY AND WELL BEING
Aerison’s Total Recordable Injury Frequency Rate
improved 29 per cent to 3.8 incidents per million
hours worked, out-performing industry benchmarks.
Quality and data-driven safety and health initiatives,
underscored by a commitment to a zero-harm culture
and the mental health and wellbeing of our people,
drove this improvement.
OUTLOOK
Buoyant economic conditions in the resources, energy
and infrastructure sectors in the coming years continue
to provide Aerison with a strong pipeline of tender
opportunities. The outlook for the Australian iron ore
industry is strong, with significant levels of sustaining
capital and operating expenditure to sustain high
levels of production driving strong demand. Similarly,
maintenance activity is expected to grow steadily on
the back of aging assets and customers deferring
discretionary works in prior periods.
Separately, Australia’s transition to clean energy
continues to gain momentum. Aerison is actively
involved with network power providers and critical
battery mineral processors and is well placed to
continue to provide services related to hybrid renewable
power, such as the design and construct liquid energy
storage systems, chemical manufacturing plants and
environmental control systems.
Against this backdrop, and at the date of this CEO’s
Report, the gross pipeline of opportunities available
to Aerison is $2.239 billion. Going into 2022, Aerison
has secured revenue of $180.000 million. Combined
with strong upside potential from active tenders where
Aerison is a short-listed candidate and our strategy
of selectively tendering for opportunities without
comprising on margins, Aerison is well placed to
continue on its growth trajectory.
On behalf of the Board, I would like to take this
opportunity to thank our employees, contractors,
customers and shareholders for their ongoing loyalty
and support.
Giuseppe Leone
Managing Director and Chief Executive Officer
28 February 2022
Perth
CEO'S REPORT (CONTINUED)
Going into
2022, Aerison has
secured revenue of
$180.000 million.
10
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
AERISON ANNUAL REPORT 2021
The year ended 31 December 2021 presented significant
challenges for all businesses, but the disciplined
execution of our growth strategy allowed Aerison to
deliver on target with continued double-digit growth in
its revenue and underlying earnings.
The key projects which underscored our operating
activities and financial success for 2021 included:
WESTERN TURNER SYNCLINE TWO
SUSTAINING PROJECT
Provision of SMPE&I and commissioning support
for Rio Tinto at their Western Turner Syncline iron
ore mine, Western Australia.
ROBE VALLEY SUSTAINING PROJECT
Provision of SMPE&I and commissioning support
for Rio Tinto at their Mesa J iron ore mine, Western
Australia.
SALINE WATER REVERSE OSMOSIS PLANT
Design, supply and construction of water treatment
facilities at the Roy Hill iron ore mine, Western
Australia.
ULTRAFINE IRON RECOVERY
Fabrication and installation of pipework as part of
the WHIMS plant expansion at the Roy Hill iron ore
mine, Western Australia.
KWINANA NICKEL REFINERY
Construction of chemical processing facilities at
the BHP Nickel West powder leach nickel sulphate
plant at Kwinana, Western Australia.
SHUTDOWNS, ROY HILL
Shutdown services to facilitate sustaining capital,
routine maintenance and emergency repairs at the
Roy Hill iron ore mine, Western Australia.
SHUTDOWNS, RIO TINTO
Shutdown services to facilitate general and
shutdown maintenance activities for Rio Tinto at
their West Angelas, Paraburdoo and Yandicoogina
iron ore mines, Western Australia.
SHUTDOWNS, NEWMONT
Shutdown services to facilitate general and
shutdown maintenance activities at the Boddington
gold mine, Western Australia, for Newmont.
PIPE RACK MODULES FABRICATION
Manufacture and supply of steel pipe rack modules
for Covalent Lithium for their Kwinana lithium
refinery, Western Australia.
AIR POLLUTION CONTROL
Design, supply and installation of a toxic fume
extraction scrubber system for KCGM at their
Fimiston gold mine, Western Australia.
COMPRESSOR SWITCHROOMS
Design, fabrication and supply of four switchrooms
for APA Ambania at their Goldfields compressor
station, Western Australia.
COO'S REPORT
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
BATTERY ENERGY STORAGE
Design, fabrication and installation of a battery energy storage system connected
to the Wiepa Power Station, Queensland, for EDL Energy.
GUDAI-DARRI DUST COLLECTORS
Supply, fabrication and installation of three dust collector units for Laing O’Rourke
at the Gudai-Darri iron ore mine, Western Australia.
TOM PRICE DUST COLLECTORS
Design, fabrication and installation of a screenhouse dust collection and disposal
system for Rio Tinto at the Tom Price iron ore mine, Western Australia.
IRON BRIDGE SWITCHROOMS
Design, fabrication and supply of seven switchrooms for Eaton Corporation at the
Iron Bridge iron ore mine, Western Australia.
METRONET RAILCAR PROGRAM
Design, fabrication and supply of battery boxes as part of the construction of the
Perth METRONET railcars for Alstom.
The profile of our key projects delivered in 2021 illustrates our sustained focus on multi-
asset mining customers seeking high-quality solutions that are on-budget and delivered
safely. Scalable diversification across the energy, iron ore, nickel, lithium, chemical and
electrical infrastructure sectors with new customers is an ongoing priority.
Daniel Hibbs
Chief Operating Officer
28 February 2022
Perth
COO'S REPORT (CONTINUED)
12
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
AERISON ANNUAL REPORT 2021
4. APPENDICES AND REFERENCES
FINANCIAL REVIEW
FROM OPERATIONS
1H21
$’000
2H21
$’000
2021
$’000
2020
$’000
Revenue
62,349
72,537
134,886
100,527
Underlying EBITDA
5,210
7,295
12,505
10,455
Underlying EBIT
3,951
5,898
9,849
8,402
Underlying NPAT
1,963
4,085
6,048
5,059
Statutory NPAT
1,963
3,395
5,358
5,059
Note: But for revenue and statutory NPAT, these financial measures are not defined under IFRS and are unaudited. These financial measures are derived from the audited financial statements.
80,058
100,527
134,886
2019
2020
2021
150
100
50
0
REVENUE ($'M)
9,121
10,455
12,505
2019
2020
2021
10
11
12
13
8
9
7
UNDERLYING EBITDA ($'M)
7,285
8,402
9,849
2019
2020
2021
10
8
9
7
UNDERLYING EBIT ($'M)
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
FINANCIAL REVIEW (CONTINUED)
PROFIT OR LOSS
The Group delivered its revenue and underlying EBITDA targets in line with its publicly
stated guidance. Revenue increased by 34.2% to $134.886 million (2020: $100.527
million) for the year ended 31 December 2021. This increase highlights growth in the
scale of operating activities, with new significant contracts including the Western
Turner Syncline and Robe Valley Sustaining Capital Works projects with Rio Tinto, the
Saline Water Reverse Osmosis Plant and Ultrafine Iron Recovery projects with Roy
Hill, combined with shutdown maintenance works under long-term Master Service
Agreements at mine sites such as Roy Hill, Sino Iron, Paraburdoo, Yandicoogina and
Boddington. The design, manufacture and installation of air pollution control systems,
dust collectors, energy storage facilities and electrical switchrooms also contributed to
increased revenue.
Underlying EBITDA increased by 19.6% to $12.505 million (2020: $10.455 million) for
the year ended 31 December 2021, highlighting the increase in the number of active
contracts in hand. EBITDA margins were partly impacted by increasing recruitment
costs, occupancy costs and higher employee headcount in support of growth in
operating activities and higher and more comprehensive insurance premiums.
Underlying EBITDA excludes significant, non-recurring arising from the initial public
offering and expensed to profit or loss of $0.986 million (2020: Nil).
DEPRECIATION AND AMORTISATION
Depreciation and amortisation increased by 29.4% to $2.656 million (2020: $2.053
million) for the year ended 31 December 2021. Capital expenditure of $1.854 million (2020:
$0.373 million) on property, plant and equipment and the initial recognition of right-of-
use assets of $3.096 million (2020: $3.550 million) contributed to higher depreciation.
TAXES
The Group reported an income tax expense of $1.292 million (2020: $1.649 million) and
an effective tax rate of 19.4% (2020: 24.6%) for the year ended 31 December 2021. The
income tax expense is weighted to the recognition of a deferred tax expense on contract
assets of $2.706 million.
BALANCE SHEET
At 31 December 2021, the Group’s net tangible assets (NTA) increased to $33.781 million
(2020: $18.035 million). NTA includes deferred tax balances and right-of-use assets
and lease liabilities. NTA per share increased to 11.0 cents per share (2020: 7.5 cents
per share).
WORKING CAPITAL
At 31 December 2021, the Group’s working capital was $33.676 million (2020: $21.795
million). The increase in working capital mirrors the increase in scale of operating
activities, driving a $26.609 million increase in trade and other receivables and $14.259
million increase in trade and other payables.
NET DEBT
At 31 December 2021, the Group’s net debt was $6.494 million (2020: $9.976 million). Net
debt comprises cash on hand of $13.219 million (2020: $7.754 million) offset by lease
liabilities of $5.177 million (2020: $2.780 million) and interest-bearing loans of $14.536
million (2020: $14.950 million). The debt service coverage ratio, being net debt to
underlying EBITDA, improved to 0.52 times (2020: 0.95 times).
The $3.482 million decrease in net debt is attributed to:
Net cash inflows of $6.741 million, including cash receipts of $7.500 million from
the issue of 37,500,000 fully paid ordinary shares to the subscribers of the initial
public offering
Net drawdowns of $5.267 million against the $15.000 million secured trade finance
loan. The trade finance loan is a revolving credit facility which is secured against
the face value of trade receivables with recourse.
Conversion of convertible notes of $3.900 million to 27,078,106 fully paid ordinary
shares. No convertible notes were settled in cash.
Recognition of lease liabilities related to our Forrestfield fabrication facility
($2.632 million) and motor vehicles ($0.464 million), offset by principal lease
payments of $1.096 million.
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
FINANCIAL REVIEW (CONTINUED)
In March 2021, the Group increased its $24.500 million secured banking facilities
to $41.000 million.
In November 2021, the Group also entered into a $15.500 million surety bond facility,
which was $13.728 million drawn on 31 December 2021.
At 31 December 2021, the Group had available undrawn banking facilities and cash and
cash equivalents of $18.307 million (2020: $15.798 million) of at its disposal.
CASH FLOWS
OPERATING CASH FLOWS
For the year ended 31 December 2021, cash outflows from operating activities were
$1.647 million (2020: $0.403 million).
Net cash outflows of $1.647 million is attributed to the increase in trade and other
receivables of $26.812 million for the year ended 31 December 2021. The increase
arises from estimates of variable consideration, recognised as contract assets, which
are enforceable under the contract but for which settlement is within the process of
negotiation, review and certification with the customer.
INVESTING CASH FLOWS
Capital expenditure on plant and equipment was $1.854 million (2020: $0.373 million) for
the year ended 31 December 2021. Capital expenditure was weighted to the fit-out of the
Forrestfield fabrication facility, acquisition of motor vehicles and plant and equipment
and investment in next generation computer equipment and software.
FINANCING CASH FLOWS
For the year ended 31 December 2021, cash inflows from financing activities were $9.931
million (2020: ($2.255) million) and comprises:
On 12 July 2021, Aerison Group Limited was admitted for quotation on the
Australian Stock Exchange. 37,500,000 fully paid ordinary shares were issued
to the subscribers of the initial public offering for cash consideration of $7.500
million. Proceeds from the issue of fully paid ordinary shares were offset by share
issue costs of $1.761 million.
Net drawdowns of $5.267 million against the $15.000 million secured trade finance
loan, offset by principal lease payments of $1.096 million.
Purchase of 605,969 treasury shares for $0.120 million for later use in employee
share-based payment arrangements.
DIVIDENDS
Dividends of $287,000 for Class B and C preference shares were declared and paid
in 2021. On 10 May 2021, the Class B and C preference shares were transferred to the
Company.
AERISON ANNUAL REPORT 2021
15
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
RISK MANAGEMENT
Aerison defines risk management as the identification, assessment and management of risks that may materially impact its operations, employees, reputation and financial
performance. Given the nature of the industries in which the Group operates, multiple risk factors may materially impact on the Group. Whilst the Board and management
proactively manages known risk factors where it is efficient and practicable to do so, there is no guarantee these efforts will be successful.
An overview of material risks facing Aerison are set out below. These risks are not listed in order of importance and are not exhaustive. Rather, these are the most significant
risks that, in the opinion of the Board, should be considered and monitored by existing and potential shareholders in the Company. Additional risks which are not presently known,
or which are regarded as immaterial or manageable, may also adversely affect the Group’s operations.
CONTEXT
RISK
RESPONSE
Communicable disease outbreaks, including
the COVID-19 pandemic
The ongoing COVID-19 pandemic may lead to interruptions in
operations, such as mine site closures and an inability to source
materials and consumables. Further, the Group’s operations are
dependent on the health and productivity of its workforce.
The Group implemented risk mitigation strategies (as well as following
customer directed strategies where required to do so on remote sites) to
manage the COVID-19 pandemic, comprising practicing social distancing and
mask wearing, staggered breaks, proof of vaccination and additional hygiene
measures. Management continues to provide clear guidelines to employees
and contractors on actions to minimise the potential for infection.
The COVID-19 pandemic did not materially impact the financial performance of
the Group; however, prolongation of the pandemic may materially impact the
Group in future periods.
The possibility of health and safety accidents,
including life-changing events
The Group’s operations are subject to many hazards inherent in
the construction and maintenance activities. Although the Total
Recordable Injury Rate (TRIFR) of the Group decreased in 2021,
it is possible the Group may experience accidents or fatalities
in the future.
The Group is committed to zero-harm working conditions for its employees
and contractors. The Group supports a safety conscious culture through
appropriate training, supervision and resources to promote and embed safe
operating practices throughout the Group.
The Group operates an ISO 45001 certified HSE management system, which
works to eliminate hazards and minimise health and safety risks.
Labour costs and availability of skilled people
The Group is exposed to increased labour costs and retention
constraints in markets where labour demand is strong, which
is pronounced on the back of Western Australian travel
restrictions. Changes to labour laws and regulations may limit
productivity and increase labour costs, adversely impacting
operating margins.
The Group recognises that its profitability, productivity and ability to effect
planned growth initiatives is contingent on its ability to attract and retain
skilled and experienced employees. To this end, the Group’s remuneration
structures are market competitive, comprising annual salary benchmarking
and Group wide reward programs. Further, the Group is invested in the training
and development and internal promotion of employees, which reduces the
need to recruit new employees.
AERISON ANNUAL REPORT 2021
16
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
RISK MANAGEMENT (CONTINUED)
CONTEXT
RISK
RESPONSE
Key customers from the resources
sector contribute more than 80 per
cent to revenue
The Group is primarily influenced by the prospects of the
resources sector. Any future deterioration in the outlook of the
resources sector may adversely impact the Group’s financial
position or financial performance.
The Group has sought to mitigate reliance on the resources sector as follows:
Pursuing an end-to-end service offering capturing the entire lifecycle of
the asset, from front-end engineering and design activities to sustaining
maintenance activities.
Pursuing a diversified portfolio of customers operating in different industries.
During 2021, the Group had more than 75 different customers (2020: 75 customers).
Increased competition from new and
existing competitors
A significant proportion of construction activities is dependent on
successful competitive tenders. Despite a strong success rate, there
is no assurance that the Group will continue to successfully tender
for new contracts against current or future competition.
The Group’s demonstrated history of executing contracted works to a high standard,
combined with a highly skilled workforce, continues to offer a compelling value proposition
to existing and potential customers. This value proposition supports long-term contractual
relationships with key customers, illustrated by recurring revenue streams under multiple
long-term Master Service Agreements.
Unforeseen delays in the execution of
contracted works
The Group operates in harsh conditions and remote locations
where environmental events, such as inclement weather, may delay
contract performance or result in a complete shutdown of a project
for an unknown period of time.
The diversity of Group’s customers and sites ensure the Group is not heavily leveraged at
any one location should an unforeseen shutdown occur.
Contract variations and claims
The nature of construction services gives rise to contract variations
for reasons including, but not limited to, excusable delays and
scope variations. There is a risk that the Group’s claims for contract
variations are disputed and not ultimately agreed.
The Group’s accounting policy for the determination of the revenue arising from contract
variations is the most likely amount which is highly probable of not reversing in a future
period. The Group’s determination of this amount requires management to exercise
significant judgement. At arriving to a position, the Group is informed by experienced
General Managers, independent time and cost experts and legal counsel, as appropriate.
Tender pricing
The Group is equipped with a skilled workforce when pricing
contracts and employs all reasonable efforts to ensure tender
pricing reflects the scope of work. Despite this safeguard, there
is no assurance that the tender estimate is not reflective of actual
work performed, which may cause cost overruns and the ability to
maintain existing contracts or win future contracts.
The application of the Group’s tender work procurement and approval process maximises
the likelihood that tendered margins will be achieved. As part of this process, tender pricing
is reviewed by an experienced General Manager, Chief Operating Officer and Managing
Director.
In addition, sustaining capital contracts are ordinarily structured around a schedule of
rates with no fixed pricing. The schedule of rates is informed by a demonstrated history of
profitable contracts.
Compliance with debt covenants
The Group holds external banking facilities with investment grade
financial institutions. A default under external banking facilities may
result in the withdrawal of financial support or an increase to the
future cost of financing.
The Group ensures compliance with our Group Finance and Reporting Manual, which
outlines key controls which govern our financial risk management practices. Cash flow
forecasting also enables the ongoing monitoring and management of debt covenant
compliance.
No external finance facilities were called during the year ended 31 December 2021.
AERISON ANNUAL REPORT 2021
17
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
PEOPLE
PEOPLE MANAGEMENT AND RETENTION
Aerison is focussed on building a successful, sustainable business which operates with integrity, fairness and
transparency in the way in which we conduct ourselves with our people, contractors who work on our behalf,
customers, suppliers and the community. We recognise the crucial role that our people play in the success of
our business. In doing so, we retain and attract highly competent employees who are culturally aligned with our
Company’s INSPIRE values.
Increasing demand for construction and maintenance services, combined with Western Australian travel
restrictions, caused tightening labour availability and higher turnover rates in the industries in which Aerison
operates. Aerison has introduced various strategies to attract and retain our people through open and
continuous employee engagement, including:
mitigation of critical succession risk by focusing on the personal development of emerging talent
recognising high-performing employees with reward and recognition initiatives, comprising employee
share schemes, bonuses and our Inspire Awards program as well as referral incentive programs
driving a market-competitive pay for performance culture, benchmarked to annual salary reviews
investment in frontline leadership training programs
interstate and international recruitment campaigns on social media, radio and high-transit locations
implementation of the AERISAFE HSE system to drive high performance in people management
and safety
On balance, Aerison promotes an inclusive culture where people are respected and safe and providing
job-specific and career development training programs. Aerison recognises that whilst our strategies are
important, our people drive outcomes.
Skilled Trades
and Supervision
Casual
Corporate and
Administration
Full-time
Technical
and Support
420
332
213
98
27
545
EMPLOYEES
545
EMPLOYEES
AERISON ANNUAL REPORT 2021
18
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
SAFETY
SAFETY, HEALTH AND WELLBEING
Aerison understands that the safety, health and wellbeing of our people and the
contractors who work on our behalf is paramount to our long-term success.
Aerison promotes a zero-harm culture, committed to zero fatalities and preventing
serious and catastrophic events causing life-changing injuries which may adversely
impact the lives and livelihoods of our people, their families and those that work around
us. Safety is at the core of our operations by aligning our safety strategy and initiatives
with our strategic and business goals.
The alignment of strategies, goals and outcomes is driven by senior management
through Aerison’s in-house AERISAFE HSE system. Coupled with a strong incident
reporting culture from our workers and contractors, Aerison is empowered to drive
quality and data-driven safety and health decisions. Regular communication with
our people and contractors is key, comprising Safety Alerts on serious incidents
with corrective actions, Good to Shares capturing proactive behaviours, continuous
improvement updates on our internal HSEQ procedures and ongoing HSEQ training.
INJURY FREQUENCY RATES
Aerison measures safety performances with reference to Lost Time Injury Frequency
Rate (LTIFR) and Total Recordable Injury Frequency Rate (TRIFR). Safety measures
markedly improved in 2021, notwithstanding an increase in the scale of our operating
activities. Importantly, Aerison had no fatalities or permanent disabling injuries.
Aerison achieved a LTIFR of 0.0 (2020: 0.0) for 2021. The last lost-time injury was
recorded in February 2017.
Aerison achieved a TRIFR of 3.8 (2020: 5.1) for 2021, which included three restricted work
injuries. Our TRIFR continues to significantly out-perform industry benchmarks.
0
0
2017
2017
2018
2018
5.8
5.7
0.6
-
-
-
-
3.2
4.5
1.7
5.1
3.8
9.2
9.5
2019
2019
2020
2020
2021
2021
2
2
4
4
6
6
8
8
10
10
12
12
Aerison
Mining industry
benchmark
Construction
industry benchmark
LTIFR
TRIFR
AERISON ANNUAL REPORT 2021
19
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
SAFETY (CONTINUED)
COVID-19 RESPONSE
Aerison adapted its day-to-day operations to prioritise the health
and wellbeing of our people and contractors when the COVID-19
pandemic began. The development of our COVID-19 risk mitigation
strategies was informed by directives from Commonwealth agencies
and included corporate and site-based risk assessments, restricted
travel, staggered site breaks, working-from home arrangements,
practicing social distancing and mask wearing, proof of vaccination
mandates and additional personal hygiene methods. Management
continues to provide clear guidelines to its employees and
contractors on actions to minimise the potential for infection.
AUDITING AND ISO CERTIFICATION
Our quality, health and safety management systems are accredited
under the relevant Australian and International standards, including:
ISO 14001 Environmental Management Systems
ISO 45001 Occupational Health and Safety Management Systems
ISO 9001 Quality Management Systems
AS/NZS 4801 Safety Management Systems
Our external HSEQ auditor, British Standards Institution, completed a
re-certification audit of our ISO accreditations in 2021. The outcome
of the audit included no major non-conformities and a minor non-
conformity, which was subsequently remedied. This positive outcome
demonstrates our commitment to our zero-harm culture at Aerison.
In addition, Aerison is in the process of achieving the Office of Federal
Safety Commissioner Accreditation (OFSCA). The OFSCA enables
participation in government funded infrastructure and defence
contracts in future periods.
20
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
AERISON ANNUAL REPORT 2021
3. FINANCIALS
4. APPENDICES AND REFERENCES
GOVERNANCE
21
OUR BOARD
BRONWYN BARNES B.A., Grad Dip Bus, GAICD
Independent Non-Executive Chair
EXPERIENCE AND EXPERTISE:
Ms. Barnes was appointed to the Board on 1 April 2021.
Ms. Barnes has more than three decades of director and senior leadership
experience in the resources industry. Ms. Barnes currently holds a number of
director roles with ASX listed companies, private companies and Government
trading entities.
Ms. Barnes was previously a member of Executive Leadership Team at BHP
Nickel West, Deputy Chief Executive Officer of Alliance Mining Commodities
Pty Ltd and Executive Chairman of Windward Resources Ltd (ASX: WIN). She
has also held a variety of Non-Executive Director roles with MOD Resources
Ltd (ASX: WIN), the Geraldton Fisherman’s Co-operative, Martu People
Limited, Winja Dajarra Barna Limited and as a Committee or Council member
of the 500 Club, Curtin University Graduate School of Business Advisory Board
and St Mary’s Anglican Girls School.
CURRENT DIRECTORSHIPS:
Indiana Resources Limited (ASX: IDA)
Scorpion Minerals Limited (ASX: SCN)
Synergy (Electrical Generation and Retail Corporation)
Perth Racing (West Australian Turf Club)
FORMER DIRECTORSHIPS IN THE PREVIOUS THREE YEARS:
MOD Resources Limited (ASX: MOD)
Auris Minerals Limited (ASX: AUR)
JC International Group Limited (ASX: JCI)
Interest in ordinary shares: None
Interest in performance rights: 1,000,000
GIUSEPPE LEONE BCom
Managing Director and Chief Executive Officer
EXPERIENCE AND EXPERTISE:
Mr. Leone was appointed to the Board on 9 September 2016.
Mr. Leone has more than two decades of executive experience in senior
leadership roles at multinational listed and private companies across the
energy, mining and electrical infrastructure industries in Australia and South-
East Asia.
Previously, Mr. Leone was the Chief Financial Officer of Tempo Australia
Limited (ASX: TPP) and Chief Financial Officer of Cape PLC (Far East and
Pacific Rim). In addition, Leone has also served as a Non-Executive Director
of Definitiv Group.
CURRENT DIRECTORSHIPS:
None.
FORMER DIRECTORSHIPS IN THE PREVIOUS THREE YEARS:
None.
Interest in ordinary shares: 78,143,999
Interest in performance rights: 10,250,000
AERISON ANNUAL REPORT 2021
22
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
OUR BOARD (CONTINUED)
PETER IANCOV FIEAust, FAIB, FAIM, SMIEEE, MAICD, CSE
Independent Non-Executive Director
EXPERIENCE AND EXPERTISE:
Mr. Iancov was appointed to the Board on 15 April 2021.
Mr. Iancov is a qualified engineer with more than three decades of senior
leadership experience in the energy, mining, construction, electrical
infrastructure and defence industries. Mr. Iancov holds the position of
Managing Director of Zinfra Pty Ltd.
Prior to his role at Zinfra Pty Ltd , Mr. Iancov served as the Chief Executive
Officer of Doric Group Holdings Pty Ltd where he was instrumental in securing
and delivering major contracts and responsible for the management,
construction and operation of critical energy infrastructure of assets in
excess of $4.3 billion.
Mr. Iancov has also served on the Board as a Non-Executive Director of
Valmec Limited, KML Limited, Western Power, Robe River Kuruma Aboriginal
Corporation RNTBC, the Southern Ports Authority and ASC Pty Ltd.
CURRENT DIRECTORSHIPS:
CHRONOS Advisory Pty Ltd
Australian Naval Infrastructure Pty Ltd
Zinfra Pty Ltd
FORMER DIRECTORSHIPS IN THE PREVIOUS THREE YEARS:
Electricity Networks Corporation (trading as Western Power)
KML Limited
Valmec Limited (ASX: VMX)
Robe River Kuruma Aboriginal Corporation
Interest in ordinary shares: None
Interest in performance rights: 750,000
DANIEL HIBBS
Executive Director and Chief Operating Officer
EXPERIENCE AND EXPERTISE:
Mr. Hibbs was appointed to the Board on 9 September 2016.
Mr. Hibbs has more than two decades of experience in the Australian
construction industry, specialising in tendering, risk assessment and
project execution.
Previously, Mr. Hibbs was the Chief Operating Officer of Tempo Australia
Limited (ASX: TPP). Mr. Hibbs has also hold roles with Leighton Contractors,
John Holland and McFee Construction, a subsidiary of Paladio Group Limited
(ASX: PDO).
CURRENT DIRECTORSHIPS:
None.
FORMER DIRECTORSHIPS IN THE PREVIOUS THREE YEARS:
None.
Interest in ordinary shares: 78,143,999
Interest in performance rights: 10,250,000
AERISON ANNUAL REPORT 2021
23
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
OUR BOARD (CONTINUED)
MICHAEL FENNELL BCom
Independent Non-Executive Director
EXPERIENCE AND EXPERTISE:
Mr. Fennell was appointed to the Board on 7 June 2019.
Mr. Fennell has been in the finance and stockbroking industry since 2008
and holds a Bachelor of Commerce in Accounting and Finance from
the University of Notre Dame Australia. Specialising as a private client
investment adviser, Mr. Fennell works primarily with high-net-worth
individuals and institutional clients.
CURRENT DIRECTORSHIPS:
None.
FORMER DIRECTORSHIPS IN THE PREVIOUS THREE YEARS:
None.
Interest in ordinary shares: 75,000
Interest in performance rights: 750,000
AERISON ANNUAL REPORT 2021
24
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
DIRECTORS REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report of Aerison Group Limited (the Company) and its
controlled entities (the Group) as at and for the year ended 31 December 2021.
DIRECTORS
The names and details of the Company’s directors in office at the date of this report and
for the year ended 31 December 2021 are as follows:
NAME
POSITION
TERM AS KMP
B Barnes
Non-Executive Chair
Full calendar year
P Iancov
Non-Executive Director
Appointed 15 April 2021
M Fennell
Non-Executive Director
Full calendar year
Q Qiao
Non-Executive Director
Ceased 29 March 2021
G Leone
Chief Executive Officer
Full calendar year
D Hibbs
Chief Operating Officer
Full calendar year
The qualifications, experience and other details of the directors in office at the date of
this report appear on pages 22 and 24 of the 2021 Annual Report.
COMPANY SECRETARIES
A BELL
A Bell was appointed Chief Financial Officer and Joint Company Secretary for the
Company in March 2021. A Bell is a chartered accountant and holds a Bachelor of
Commerce from the University of Auckland and a Master of Finance from Griffith
University. A Bell has more than 20 years of experience in contracting operating across
Australia and New Zealand in the transportation, infrastructure, utilities, industrial
engineering and resources industries.
K GARVEY
K Garvey was appointed Joint Company Secretary for the Company in December 2020.
K Garvey has been a practicing lawyer for more than 15 years and holds a Bachelor of
Laws and a Bachelor of Arts from the University of Notre Dame.
MEETINGS OF DIRECTORS
The following table sets out the number of directors’ meetings held during the year
ended 31 December 2021 and the number of meetings attended by each director.
BOARD OF DIRECTORS
ELIGIBLE TO ATTEND1
ATTENDED2
B Barnes
5
5
P Iancov
5
4
M Fennell
5
5
Q Qiao
-
-
G Leone
5
5
D Hibbs
5
5
1. Number of meetings held whilst the director was a member of the Board.
2. Number of meetings attended.
DIRECTORS’ SHAREHOLDINGS
The following tables set out each of the directors’ interest, direct, indirect or beneficial,
in ordinary shares and performance rights of the Company as at the date of this report.
FULLY PAID
ORDINARY SHARES
PERFORMANCE RIGHTS
B Barnes
-
1,000,000
P Iancov
-
750,000
M Fennell
75,000
750,000
G Leone
78,143,999
10,250,000
D Hibbs
78,143,999
10,250,000
REMUNERATION REPORT (AUDITED)
The audited remuneration report set out on pages 28 to 36 and forms part of this
Directors’ Report.
AERISON ANNUAL REPORT 2021
25
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
DIRECTORS REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
UNISSUED SHARES
At the date of this Directors Report, there were 32,950,000 contingently issuable
ordinary shares, comprising performance rights, share rights and share options. The
Remuneration Report sets out further details on performance rights and share rights
outstanding for key management personnel.
There were no contingently issuable ordinary shares exercised during the year ended
31 December 2021.
PRINCIPAL ACTIVITIES
During the year ended 31 December 2021, the principal activities of the Group comprised
(1) construction services related to the supply and construct, or engineer, procure
and construct of complex infrastructure and (2) routine, preventative, mechanical and
electrical maintenance services, including minor sustaining capital works.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 12 July 2021, the Company successfully listed on the Australian Securities Exchange.
As part of the initial public offering, 37,500,000 fully paid ordinary shares were issued
for cash proceeds of $7,500,000 or $0.20 per share. Other than the initial public offering,
there were no other significant changes in the Group’s state of affairs.
DIVIDENDS
Preference dividends declared and paid by the Company for Class B and C preference
shares for the year ended 31 December 2021 were as follows:
$/SHARE
$’
Class B preference shares1
72,000
144,000
Class C preference shares1
72,000
144,000
1.
Class B and C preference shares were transferred to Aerison Group Limited on 10 May 2021.
There were no dividends declared and paid in respect of fully paid ordinary shares during
the year ended 31 December 2021 or declared after 31 December 2021.
REVIEW OF OPERATIONS
A review of the operations of the Group is contained on pages 11 to 12 and forms part of
this Directors’ Report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Group in future periods and the expected
results of those operations have been included generally in the 2021 Annual Report.
SIGNIFICANT EVENTS AFTER BALANCE DATE
No matters or circumstances have arisen subsequent to 31 December 2021 that has
significantly affected, or may significantly affect, the Group’s operations, the results of
those operations, or the Group’s state of affairs in future period.
ENVIRONMENTAL REGULATIONS
The operations of the Group are subject to environmental regulations under Western
Australian and Commonwealth law. There were no significant known breaches of any
environmental regulations to which the Group is subject.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified its directors for costs incurred, in their capacity as a
non-executive or executive director, for which they may be held personally liable, except
where there is a lack of good faith.
For the year ended 31 December 2021, the Company paid a premium to insure directors
of the Company against a liability to the extent permitted by the Corporations Act 2001.
The insurance contract prohibits disclosure of the nature of the liability and the amount
of the premium.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for
leave to bring proceedings on behalf of the Company, or to intervene in any proceedings
to which the Company is party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
AERISON ANNUAL REPORT 2021
26
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
DIRECTORS REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
AUDITOR
RSM Australia continues in office as the external auditor of the Group in accordance with
section 327 of the Corporations Act 2001.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, RSM
Australia, as part of the terms of its audit engagement agreement against claims by third
parties arising from the audit (for an unspecified amount). No payment has been made to
indemnify RSM Australia during or since the year ended 31 December 2021.
NON-AUDIT SERVICES
The following non-audit services were provided by the Group’s auditor, RSM Australia.
The directors are satisfied that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001.
The nature and scope of each type of non-audit service provided means that auditor
independence was not comprised.
RSM Australia received or are due to receive the following amounts for the provision of
non-audit services for the year ended 31 December 2021:
$
Audit and review of the financial statements
178,000
Taxation services
69,068
Information technology shared services
186,850
Procurement of computer equipment and software
606,245
1,040,163
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the
Corporations Act 2001 is set out on page 37.
ROUNDING OF AMOUNTS
The amounts contained in the financial report have been rounded to the nearest $1,000
(where rounding is applicable) where noted ($’000) under the option available to the
Company under ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument
2016/191. The Company is an entity to which this legislative instrument applies.
This report is made in accordance with a resolution of the directors pursuant to section
298(2)(a) of the Corporations Act 2001.
B Barnes
Non-Executive Chair
28 February 2022
Perth
AERISON ANNUAL REPORT 2021
27
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED
FOR THE YEAR ENDED 31 DECEMBER 2021
CONTENTS
1. REMUNERATION REPORT OVERVIEW
2. OVERVIEW OF EXECUTIVE REMUNERATION
3. OVERVIEW OF NON-EXECUTIVE REMUNERATION
4. REMUNERATION GOVERNANCE
5. STATUTORY REMUNERATION
6. SHARE-BASED COMPENSATION
7. EQUITY INSTRUMENTS
8. OTHER TRANSACTIONS WITH KMPS AND THEIR RELATED PARTIES
1. OVERVIEW
The Directors of Aerison Group Limited (the Company or the Parent) present the
Remuneration Report (the Report) for the Company and its subsidiaries (the Group)
for the year ended 31 December 2021. This Report forms part of the Directors’ Report
and was audited in accordance with section 300A of the Corporations Act 2001.
This Report details the remuneration arrangements of Key Management Personnel (KMP)
of the Group, comprising Non-Executive Directors (NED) and the Executive Leadership
Team (ELT).
KMP are those persons who, directly or indirectly, have authority and responsibility for
planning, directing and controlling the major activities of the Company and the Group.
KMP of the Group and their movements during 2021 are set out below:
NAME
POSITION
TERM AS KMP
Non-Executive Directors
B Barnes
Non-Executive Chair
Full calendar year
P Iancov
Non-Executive Director
Appointed 15 April 2021
M Fennell
Non-Executive Director
Full calendar year
Q Qiao
Non-Executive Director
Ceased 29 March 2021
Executive Leadership Team
G Leone
Chief Executive Officer (CEO)
Full calendar year
D Hibbs
Chief Operating Officer (COO)
Full calendar year
A Bell
Chief Financial Officer (CFO)
Appointed 8 March 2021
AERISON ANNUAL REPORT 2021
28
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
2. OVERVIEW OF EXECUTIVE REMUNERATION
EXECUTIVE REMUNERATION POLICY AND FRAMEWORK
The Group’s remuneration policy ensures the ELT are rewarded fairly and responsibly.
The Group’s remuneration policy is premised on the principles set out below:
Remuneration levels are set at a level to attract, retain and incentivise the calibre
of executives required to execute its strategic objectives effectively and manage
the Group’s operations.
Total fixed remuneration is structured to best reflect the executives’ duties and
responsibilities.
Remuneration packages are structured to promote the creation of shareholder
value by aligning shareholder and executive interests.
The Company engages external remuneration advisors to ensure competitive
positioning of remuneration packages relative to prevailing market conditions.
To this end, the remuneration package offered to the ELT comprises two components:
A market-competitive total fixed remuneration (TFR).
A long-term incentive (LTI) dependent on the performance of the Group across
multiple years.
Each element of remuneration is discussed in turn.
ELEMENTS OF REMUNERATION – TOTAL FIXED REMUNERATION
TFR comprises cash, superannuation and non-monetary benefits. Non-monetary
benefits comprise allowances to allow the executive of effectively discharge their
duties and may include the provision of motor vehicles, plus related incidentals, and
mobile phones.
The determination of TFR takes into consideration the scope of the executive’s role, their
skills, experience and qualifications and individual performance.
ELEMENTS OF REMUNERATION – LONG-TERM INCENTIVES
The LTI offered to the ELT comprises performance rights and share rights issued under
the Aerison Equity Plan (collectively, the Rights). The Rights may vest into fully paid
ordinary shares in the Company for no consideration, subject to the achievement of
a total shareholder return performance condition and/or continuous employment
service condition.
The purpose of the LTI is to attract and retain the highest calibre of credentialed
executives to drive sustained increases in shareholder wealth over the long-term, whilst
preserving cash on hand. In doing so, the LTI aligns shareholder and executive interests
to the creation of shareholder value.
AERISON ANNUAL REPORT 2021
29
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
2. OVERVIEW OF EXECUTIVE REMUNERATION (CONTINUED)
ELEMENTS OF REMUNERATION – LONG-TERM INCENTIVES (CONTINUED)
The LTI was approved by shareholders at the Extraordinary General Meeting on
29 October 2021.
Key terms and conditions of the Rights awarded during 2021 are tabulated below:
AERISON EQUITY PLAN
DIRECTORS’ PERFORMANCE RIGHTS
Participants
Chief Financial Officer
Chief Executive Officer, Chief Operating
Officer and Non-Executive Directors
Performance
condition
Continuous employment with
the Group for no less than
24 months from 12 July 2021.
Total Shareholder Return, measured as the
first occasion the 20-day VWAP increases
to $0.35 or more within 24 months of
26 November 2021.
Basis for
performance
condition
To assist in the reward,
retention and motivation of
the participant.
Total Shareholder Return focuses KMP on
shareholder value creation and is widely
accepted and understood by shareholders.
Resignation
If the KMP resigns or is terminated for cause, any unvested Rights are
forfeited, unless otherwise determined by the Board.
The treatment of vested and unexercised Rights will be determined by the
Board with reference to the circumstances of the cessation of employment.
Change of
control
If a change of control occurs in relation to the Company, the Board may
exercise discretion as to whether any Rights on issue will vest, in full or part
thereof, and irrespective of whether the conditions attached to the Rights
were satisfied.
Dividend and
voting rights
The Rights do not hold any dividend or voting rights. Ordinary shares allocated
on vesting of the Rights will rank equally with other ordinary shares on issue.
EXECUTIVE EMPLOYMENT SERVICE AGREEMENTS
Each KMP has entered into an employment contract with the Company which is
ongoing and has no fixed termination date. However, these contracts may be
terminated by notice of either party.
Key terms of employment contracts for the current ELT are set out below:
TFR
($)
NOTICE PERIOD TO
TERMINATE
TERMINATION
PAYMENTS
G Leone
549,000
12 months’ notice by either
party or party in lieu, except in
certain circumstances such as
misconduct where no notice
period applies.
Statutory entitlements,
plus
any unvested performance
rights or share rights
held by the executive
lapses upon termination
or resignation, unless the
Board in its discretion
determines otherwise
D Hibbs
549,000
A Bell
345,000
3 months’ notice by either
party or party in lieu, except in
certain circumstances such as
misconduct where no notice
period applies.
AERISON ANNUAL REPORT 2021
30
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
2. OVERVIEW OF EXECUTIVE REMUNERATION (CONTINUED)
OVERVIEW OF COMPANY PERFORMANCE
The table below illustrates measures of the Group’s financial performance and shareholder wealth for the past five years, up to and including 2021, as required under the Corporations
Act 2001.
$’000
2021
2020
2019
2018
2017
Revenue
134,886
100,527
80,058
50,485
30,291
EBITDA
11,519
10,455
9,134
3,549
(264)
Net profit before taxes
6,650
6,708
5,913
2,036
(1,206)
Net profit after taxes
5,358
5,059
4,115
1,256
(913)
Total shareholder return
-
N/A
N/A
N/A
N/A
Basic EPS (cps)
1.96
N/A
N/A
N/A
N/A
Closing share price ($)
0.20
N/A
N/A
N/A
N/A
AERISON ANNUAL REPORT 2021
31
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
3. NON-EXECUTIVE DIRECTOR REMUNERATION
The Company’s NED fee policy is designed to attract and retain high calibre directors
who can discharge the roles and responsibilities required in terms of strong governance
and oversight, independence and objectivity. NEDs receive fixed fees and participate in
performance incentive awards. NED fees reflect the demand and responsibilities of the
directors.
BOARD FEES
From April 2021, board fees payable to NEDs for 2021, inclusive of superannuation, are set
out below:
BOARD FEES
$
Chair
88,000
NED
52,800
NEDs may also be reimbursed for expenses reasonably incurred in attending to the
affairs of the Group. The Board has confirmed there will be no increases in Board fees for
2022.
MAXIMUM AGGREGATED NED FEE POOL
NED fees are determined within an aggregate NED fee pool limit, which was
initially established under the Company’s Constitution and periodically approved by
shareholders. The maximum aggregate amount that may be paid to NEDs for their
services is $250,000 for any calendar year.
The Board will not seek to increase the aggregate NED fee pool limit at the 2021 AGM.
PERFORMANCE RIGHTS
The Company’s NEDs participate in performance incentive awards, which is separately
described in Section 2 “Overview of Executive Remuneration”.
4. REMUNERATION GOVERNANCE
The Company does not have a separate Nomination and Remuneration Committee.
Instead, ELT and NED remuneration is reviewed by the Board, without the affected
member participating in the review process. The Board may also consider advice
concerning the remuneration mix and quantum from external advisors when
undertaking this review. A Nomination and Remuneration Committee will be created
when the Company’s activities are of the scale that a separate Nomination and
Remuneration Committee is warranted.
USE OF REMUNERATION ADVISORS
The Board engaged BDO to provide remuneration recommendations regarding the
quantum and remuneration mix for the CEO and COO. Both BDO and the Board are
satisfied that the advice received from BDO is free from undue influence from the CEO
and COO.
The remuneration recommendation concerning total fixed remuneration was approved
by the Board. Other remuneration recommendations, such as the creation of a short-
term incentive scheme, were deferred for consideration in future periods.
The fees paid to BDO for the remuneration recommendations was $10,000. No other
services were provided by BDO to the Group for 2021.
CLAWBACK OF REMUNERATION
In the event of serious misconduct, the Board has the discretion to cancel unvested or
vested and unexercised share rights and performance rights.
SHARE TRADING POLICY
The Group’s Securities Trading Policy applies to all KMPs. The policy prohibits a KMP from
dealing in AE1 securities while in possession of material non-public information relevant
to the Group.
In addition, KMPs must not enter into any hedging arrangements over unvested share
rights or performance rights. The Group would consider a breach of this policy as gross
misconduct, which may lead to disciplinary action and potentially dismissal.
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
AERISON ANNUAL REPORT 2021
32
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
5. STATUTORY REMUNERATION
Details of the nature and value of each major element of remuneration provided to KMP of the Group during 2021 are set out below:
SHORT-TERM BENEFITS1
LONG-TERM
BENEFITS4
POST-EMPLOYMENT
BENEFITS
SHARE BASED
PAYMENTS
SALARIES
AND FEES
$
NON-MONETARY
BENEFITS2
$
LEAVE
ENTITLEMENTS
$
SUPERANNUATION
$
PERFORMANCE
AND SHARE RIGHTS5
$
TOTAL
REMUNERATION
$
PERFORMANCE
RELATED
%
Non-Executive Directors
B Barnes
2021
55,982
-
-
5,518
21,408
82,908
26%
2020
4,566
-
-
434
-
5,000
0%
P Iancov
2021
30,000
-
-
3,051
16,057
49,108
33%
2020
-
-
-
-
-
-
0%
M Fennell
2021
22,600
-
-
2,260
16,057
40,917
39%
2020
-
-
-
-
-
-
0%
Q Qiao
2021
19,000
-
-
-
-
19,000
0%
2020
-
-
-
-
-
-
0%
Executive Leadership Team
G Leone
2021
494,000
30,000
33,178
25,000
32,112
614,290
5%
2020
12,000
-
80,2443
155,5453
-
247,789
0%
D Hibbs
2021
494,000
30,000
33,178
25,000
32,112
614,290
5%
2020
12,000
-
80,2443
141,4313
-
233,675
0%
A Bell
2021
255,944
1,325
15,049
17,208
1,965
291,491
1%
2020
-
-
-
-
-
-
0%
1.
There were no short-term incentives, such as discretionary cash bonuses, paid or payable to KMP for the years ended 31 December, 2021 and 2020.
2. Non-monetary benefits includes the cost to the Group for providing allowances, such as mobile phones, vehicles and vehicle related incidentals.
3. For the years ended 31 December, 2017 to 2020, the CEO and COO received salaries of $12,000 per annum, plus superannuation, to preserve the cash and cash equivalents of the Group. On 31 December 2020, the Board approved
the payment of a discretionary, non-recurring of $452,938 to the CEO and COO in lieu of leave entitlements ($158,242) and superannuation ($294,696) forgone across the years ended 31 December, 2017 to 2020.
4. Long-term benefits include the accrual in leave entitlements, comprising annual leave and long service leave, for each KMP and was calculated under AASB 119 Employee Benefits.
5. The value of share-based payments represents the grant date fair value of performance rights and share rights recognised to date across the related vesting period and was calculated under AASB 2 Share-based Payments.
AERISON ANNUAL REPORT 2021
33
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
6. SHARE-BASED COMPENSATION
The table below details the fair value and vesting profiles of performance rights and share rights in the Company and held by KMP, directly, indirectly or beneficially, including their
related parties, as of 31 December 2021:
AWARD
DATE
NUMBER
AWARDED
FAIR VALUE
AT AWARD DATE
($/RIGHT)
VESTING
DATE
EXERCISE
PRICE
EXPIRY
DATE
TOTAL VALUE
GRANTED
$
TOTAL VALUE
EXERCISED
$
B Barnes
2021
29/10/2021
1,000,000
$0.1585
29/10/2023
Nil
29/10/2028
158,500
-
P Iancov
2021
29/10/2021
750,000
$0.1585
29/10/2023
Nil
29/10/2028
118,875
-
M Fennell
2021
29/10/2021
750,000
$0.1585
29/10/2023
Nil
29/10/2028
118,875
-
G Leone
2021
29/10/2021
1,500,000
$0.1585
29/10/2023
Nil
29/10/2028
237,750
-
2020
28/07/2020
250,000
$0.1990
12/07/2021
Nil
17/10/2022
49,750
-
D Hibbs
2021
29/10/2021
1,500,000
$0.1585
29/10/2023
Nil
29/10/2028
237,750
-
2020
28/07/2020
250,000
$0.1990
12/07/2021
Nil
17/10/2022
49,750
-
A Bell
2021
10/12/2021
300,000
$0.1850
12/07/2023
Nil
12/07/2023
55,500
-
AERISON ANNUAL REPORT 2021
34
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
7. EQUITY INSTRUMENTS
The number of shares in the Company held directly, indirectly or beneficially, during the year by each KMP of the Group, including their related parties, are set out below. No shares
were granted to any KMP during the year as compensation.
BALANCE AT
31 DECEMBER 2020
SHARE SPLIT ON RATIO
OF 1:175.787998
RECEIVED ON
EXERCISE OF RIGHTS
PURCHASE
OF SHARES
NET CHANGE
OTHER1
BALANCE AT
31 DECEMBER 2021
B Barnes
-
-
-
-
-
-
P Iancov
-
-
-
-
-
-
M Fennell
-
-
-
75,000
-
75,000
Q Qiao2
343,250
59,995,980
-
-
(15,000,000)
45,339,230
D Hibbs
500,000
87,393,999
-
250,000
(10,000,000)
78,143,999
G Leone
500,000
87,393,999
-
250,000
(10,000,000)
78,143,999
A Bell
-
-
-
-
-
-
1.
Collectively, Q Qiao, D Hibbs and G Leone sold 30,000,000 shares as part of the initial public offering on 12 July 2021.
2. Q Qiao ceased as a NED on 29 March 2021. Closing details are at the date of his cessation as a KMP.
The number of performance rights or share rights held directly, indirectly or beneficially during the year by each KMP of the Group, including their related parties, is set out below:
BALANCE AT
31 DECEMBER 2020
SHARE SPLIT ON
RATIO
OF 1:175.7879982
GRANTED IN
THE YEAR
LAPSED
IN THE YEAR
NET CHANGE
OTHER
BALANCE AT
31 DECEMBER 2021
VESTED AND
EXERCISABLE
VESTED BUT NOT
EXERCISABLE
B Barnes
-
-
1,000,000
-
-
1,000,000
-
-
P Iancov
-
-
750,000
-
-
750,000
-
-
M Fennell
-
-
750,000
-
-
750,000
-
-
G Leone
250,000
43,697,000
1,500,000
-
(35,197,000)
10,250,000
-
8,750,000
D Hibbs
250,000
43,697,000
1,500,000
-
(35,197,000)
10,250,000
-
8,750,000
A Bell
-
-
300,000
-
-
300,000
-
-
2. On 28 July 2020, 500,000 performance rights were issued to the spouses of the G. Leone and D. Hibbs in return for the provision of unlimited personal guarantees in favour of Export Finance Australia, which provided a $4.960
million guarantee facility to the Group. During 2021, the number of performance rights on issue increased from 500,000 to 87,894,000 to reflect the share split on a ratio of 1:175.787998. Thereafter, 70,394,000 performance rights
were immediately cancelled. On 12 July 2021, the performance rights vested with the admission of the ordinary shares of the Company for quotation on the ASX. The performance rights may not be exercised until 12 October 2022.
AERISON ANNUAL REPORT 2021
35
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
REMUNERATION REPORT – AUDITED (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
8. OTHER TRANSACTIONS WITH KMP AND THEIR RELATED PARTIES
On 1 November 2021, the Group entered into a Surety Bond Facility (the Facility) with Asset Insure Pty as agent for Swiss Re for $15.500 million. A condition of the Facility
required both the CEO and COO to provide unlimited personal guarantees in favour of Asset Insure.
The Board determined that it was appropriate for the CEO and COO to be compensated an amount equal to 0.8% per annum of the face value of the Facility drawn for the
duration for which the unlimited personal guarantees were provided.
For the year ended 31 December 2021, an amount of $23,110 was expensed to profit or loss in consideration for the provision of the unlimited personal guarantees by the CEO
and COO. At 31 December 2021, $23,110 was payable to the CEO and COO.
On 26 March 2021, $340,000 was reimbursed to M. Lu in consideration for expenses incurred in her capacity as a Non-Executive Director in a prior period. M. Lu is a related
party of Q Qiao.
AERISON ANNUAL REPORT 2021
36
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting
and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Aerison Group Limited for the year ended 31 December
2021, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
TUTU PHONG
Dated: 28 February 2022
Partner
AERISON ANNUAL REPORT 2021
37
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
FINANCIAL
REPORT
38
AERISON ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTE
2021
$'000
2020
$'000
Revenue
3
134,886
100,527
Expenses
Construction and material costs
(52,780)
(25,828)
Employee benefits expense
4
(63,827)
(61,092)
Depreciation and amortisation
4
(2,656)
(2,053)
Other expenses
4
(6,760)
(3,152)
Operating profit
8,863
8,402
Finance income
3
11
Finance costs
4
(2,216)
(1,705)
Profit before income taxes
6,650
6,708
Income tax expense
5
(1,292)
(1,649)
Profit after income taxes
5,358
5,059
Other comprehensive income
-
-
Total comprehensive income
5,358
5,059
Earnings per share attributable equity holders of AE1
Basic earnings per share
16
1.96
2.10
Diluted earnings per share
16
1.75
1.95
AERISON ANNUAL REPORT 2021
39
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
NOTE
2021
$'000
2020
$'000
Assets
Current assets
Cash and cash equivalents
6
13,219
7,754
Trade and other receivables
7
64,718
38,109
Inventories
54
508
Total current assets
77,991
46,371
Non-current assets
Deferred tax assets
5
-
1,121
Trade and other receivables
7
174
-
Property, plant and equipment
8
2,591
2,403
Right-of-use assets
9
4,672
2,692
Total non-current assets
7,437
6,216
Total assets
85,428
52,587
Liabilities
Current liabilities
Lease liabilities
9
1,315
670
Trade and other payables
10
28,464
14,205
Employee benefits
11
2,503
2,559
Borrowings
12
14,536
14,950
Total current liabilities
46,818
32,384
Non-current liabilities
Lease liabilities
9
3,862
2,110
Employee benefits
11
129
58
Deferred tax liability
5
838
-
Total non-current liabilities
4,829
2,168
Total liabilities
51,647
34,552
Net assets
33,781
18,035
NOTE
2021
$'000
2020
$'000
EQUITY
Issued capital
13
13,496
3,329
Reserves
14
608
100
Accumulated surplus
19,677
14,606
TOTAL EQUITY
33,781
18,035
AERISON ANNUAL REPORT 2021
40
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTE
2021
$'000
2020
$'000
Receipts from customers
109,206
96,182
Payments to suppliers and contractors
(44,476)
(33,783)
Payments to employees
(62,221)
(61,108)
Finance costs paid
(3,140)
(1,694)
Income taxes paid
(1,016)
-
Cash flows used in operating activities
6
(1,647)
(403)
Payments for plant and equipment
(1,854)
(373)
Proceeds from sale of plant and equipment
310
-
Cash flows used in investing activities
(1,542)
(373)
Proceeds from issue of ordinary shares
7,500
-
Purchase of treasury shares
(120)
-
Net proceeds from borrowings
12
5,695
(1,706)
Convertible note repayment
-
(2,228)
Convertible note proceeds
-
3,156
Payment of lease liabilities
12
(1,096)
(901)
Share issue costs paid
(1,761)
-
Dividends paid
15
(287)
(576)
Cash flows from / (used in) financing activities
9,931
(2,255)
Movement in cash and cash equivalents
6,741
(3,031)
Opening cash and cash equivalents
6
6,477
9,508
Closing cash and cash equivalents
6
13,219
6,477
AERISON ANNUAL REPORT 2021
41
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
NOTE
ISSUED
CAPITAL
$'000
SHARE BASED
PAYMENT
RESERVE
$’000
TREASURY
RESERVE
$'000
ACCUMULATED
SURPLUS
$’000
TOTAL
EQUITY
$’000
Balance at 1 January 2021
3,329
100
-
14,606
18,035
Net profit after taxes
-
-
-
5,358
5,358
Other comprehensive income, net of taxes
-
-
-
-
-
Total comprehensive income for the period
-
-
-
5,358
5,358
Conversion of convertible notes to equity
12
3,900
-
-
-
3,900
Issue of fully paid ordinary shares
13
7,500
-
-
-
7,500
Transaction costs arising on share issue
13
(1,233)
-
-
-
(1,233)
Treasury shares purchased for incentive plans
14
-
-
(120)
-
(120)
Dividends
15
-
-
-
(287)
(287)
Share-based payment expense
17
-
628
-
-
628
Balance at 31 December 2021
13,496
728
(120)
19,677
33,781
Balance at 1 January 2020
3,329
-
-
10,123
13,452
Net profit after taxes
-
-
-
5,059
5,059
Other comprehensive income, net of taxes
-
-
-
-
-
Total comprehensive income for the period
-
-
-
5,059
5,059
Dividends
15
-
-
-
(576)
(576)
Share-based payment expense
17
-
100
-
-
100
Balance at 31 December 2020
3,329
100
-
14,606
18,035
AERISON ANNUAL REPORT 2021
42
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 – GENERAL INFORMATION
ABOUT THIS REPORT
Aerison Group Limited (the Company or the Parent) is a for-profit company incorporated
and domiciled in Australia. The Company is registered under the Corporations Act 2001
and is publicly listed on the Australian Securities Exchange (ASX). The principal activities
and operations of the Company and its subsidiaries (the Group) is described in the
“Aerison and Our Operations” section on pages 4 to 20.
The consolidated financial report of the Group for the year ended 31 December 2021 was
authorised for issue in accordance with a resolution of the Directors on 28 February
2022. The Directors have the power to amend and re-issue the financial report.
The financial report is a general purpose financial report which:
has been prepared in accordance with the requirements of the Corporations Act
2001, Australian Accounting Standards and other authoritative pronouncements
of the Australian Accounting Standards Board (AASB) and International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB),
has been prepared on a historical cost basis, unless otherwise stated,
is presented with values rounded to the nearest thousand dollars ($’000) in
accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, unless otherwise stated,
is presented in Australian dollars, which is the functional currency of the Group.
The Group does not have any foreign operations, being entities of the Group which
operate outside of Australia,
adopts all new and amended Accounting Standards and Interpretations issued by
the AASB that are relevant to the Group and effective for reporting periods starting
on or before 1 January 2021,
does not early adopt Accounting Standards and Interpretations that have been
issued or amended but are not yet effective, unless otherwise stated.
SIGNIFICANT ESTIMATES OR JUDGEMENTS
In applying the Group’s accounting policies, management continually evaluate
judgements, estimates and assumptions based on experience and other factors,
including expectations of future events that may have an impact on the Group. All
judgements, estimates and assumptions made are believed to be reasonable based
on the most current set of circumstances known to management. Actual results may
differ from expected results.
Significant judgements, estimates and assumptions which are material to the financial
statements are found in the following notes:
PAGE
NOTE
SIGNIFICANT ESTIMATE OR JUDGEMENT
45
Note 3
Revenue recognition
53
Note 9
Lease term and discount rate
55
Note 11
Valuation of the provision for long service leave
56
Note 12
Fair value hierarchy
57
Note 12
Valuation of the provision for expected credit losses
Estimates are designated by a
symbol in the notes to the financial statements.
SIGNIFICANT ACCOUNTING POLICIES
Accounting policies are disclosed within each of the applicable notes to the
financial statements.
Accounting policies are designated with a
symbol.
The Group’s accounting policies have been applied consistently to all periods
presented in these financial statements, and have been applied consistently by
Group entities, unless otherwise stated.
To ensure consistency with the current period, comparative figures have been
amended to confirm with the current period presentation where appropriate.
AERISON ANNUAL REPORT 2021
43
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2 – SEGMENT DISCLOSURES
The Group’s segments are organised and managed separately according to the nature of the service provided, with each segment representing a strategic business unit of the Group.
The Executive Leadership Team (“the Chief Operating Decision Maker”), comprising the Chief Executive Officer and Chief Operating Officer, monitor the operating results of the
business units separately for the purpose of resource allocation and performance assessment. Assets, liabilities, depreciation and amortisation and net finance costs are managed on
a consolidated basis.
OPERATING SEGMENTS
The operating segments of the Group, including the nature of services provided,
are as follows:
Specialist Projects and Engineering and Asset Projects
Specialist Projects and Engineering and Asset Projects operations comprises
supply and construct, or engineer, procure and construct services for customers
involved in the construction of complex infrastructure. Examples of contracted
works include switchrooms, dust collectors, gas scrubbers, conveyor belts and
saline water reverse osmosis plants.
Asset Services
Asset Services renders routine and preventative, mechanical and electrical
maintenance services, including minor sustaining capital works. Asset Services
specialises in the maintenance of chutes, bins, conveyors and material handling
equipment on mine sites.
Eliminations and Other
Other includes central support functions, such as treasury and human resources,
and other corporate expenses. Corporate is not considered an operating segment
and includes activities that are not allocated to other operating segments.
AGGREGATION OF OPERATING SEGMENTS
The Specialist Projects and Engineering and Asset Projects operating segments were
aggregated into a single “Construction Services” reportable segment.
In aggregating the two operating segments into one reportable segment, the Group
concluded that the Specialist Projects and Engineering and Asset Projects operating
segments exhibit similar long-term economic characteristics, such as gross profit
margins. In support of this view:
The nature of construction activities is weighted to the execution of structural,
mechanical and piping or electrical and instrumentation works.
The majority of revenues from construction services are generated from the
same customers, comprising listed Australian mining companies with market
capitalisations exceeding $5 billion.
Operating risks arising from construction contracts are similar, such as the
availability of blue-collar labour, health and safety hazards, subcontractor
defaults and customer change orders (e.g. excusable delays and scope
variations).
The execution of construction activities operates under the same regulatory
environment, including independently accredited quality management systems
and enterprise awards.
CONSTRUCTION SERVICES
ASSET SERVICES
ELIMINATIONS AND OTHER
TOTAL
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
2021
$’000
2020
$’000
Segment revenue
126,124
87,760
8,762
12,767
-
-
134,886
100,527
Segment EBITDA
23,891
14,634
291
1,079
(11,677)
(5,258)
12,505
10,455
Initial public offering costs
(986)
-
Depreciation and amortisation
(2,656)
(2,053)
Net finance costs
(2,213)
(1,694)
Profit before income taxes
6,650
6,708
Capital expenditure
1,532
373
-
-
341
-
1,873
373
AERISON ANNUAL REPORT 2021
44
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3 – REVENUE
MAJOR CUSTOMERS
Revenue from three customers, which individually contributed at least 10 per cent
to total revenue, amounted to $105.858 million (2020: Three customers amounted to
$83.807 million). 100 per cent (2020: 91 per cent) of this revenue was attributed to the
Construction Services reportable segment.
KEY ESTIMATES AND JUDGEMENTS: REVENUE RECOGNITION
STAGE OF COMPLETION
Determining the stage of completion of a contract requires an estimate of
actual costs incurred to date as a percentage of total estimated contract costs.
VARIABLE CONSIDERATION
Variable consideration comprises performance bonuses and penalties,
variations, claims and contract modifications. Where consideration in respect
of a contract is variable, the “expected value” or “most likely amount” of revenue
is only recognised to the extent that it is highly probable that it will not result in
a significant reversal of revenue in future periods.
For construction and maintenance contracts, revenue from variations and
claims is recognised to the extent it is approved or enforceable under the
contract. In making this assessment, the Group considers factors including
nature of the claim, formal or informal acceptance by the customer of the
validity of the claim, stage of negotiations or the historical outcome of similar
claims to determine whether the enforceable and “highly probable” threshold
has been met.
Revenue in relation to modifications, such as a change in the scope of the
contract, is brought to account when it is approved by the parties to the
contract or the modification is enforceable and the amount becomes highly
probable. Modifications may be recognised when client instruction has been
received in line with customary business practice for the customer.
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group, the performance obligations are satisfied (partially
or in full) and revenue may be reliably measured, regardless of whether payment
is received. Revenue is measured at the fair value of the consideration received
or receivable.
CONSTRUCTION REVENUE
The Group generates revenue from the construction of complex infrastructure
in Australia. The supply and construction, or engineer, procurement and
construction, of each project is taken as one performance obligation to the
extent that contracted activities either creates or enhances an asset that the
customer controls as the asset is created or enhanced. As a result, construction
revenue is recognised over time with regard to the stage of completion of the
contract.
MAINTENANCE REVENUE
The Group generates revenue from the provision of maintenance services,
including minor sustaining capital works, in Australia. Maintenance services
is taken as one performance obligation to the extent that the customer
simultaneously receives and consumes the benefits of the contracted activities
as maintenance works are executed. Maintenance revenue is recognised over
time with reference to the stage of completion of the contract.
2021
$'000
2020
$'000
Revenue by major service line
Construction revenue
126,124
87,760
Maintenance revenue
8,762
12,767
134,886
100,527
AERISON ANNUAL REPORT 2021
45
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4 – EXPENSES
2021
$’000
2020
$’000
Remuneration, bonuses and on-costs
60,203
57,355
Superannuation
3,453
3,637
Share-based payment expense
171
100
Employee benefits expense
63,827
61,092
Depreciation
1,540
1,104
Depreciation of right-of-use assets
1,116
949
Depreciation and amortisation
2,656
2,053
Insurance
1,583
728
Consultants and legal services
1,120
577
Initial Public Offering costs
986
-
Occupancy outgoings and utilities
854
440
Information technology costs
799
713
Loss on disposal of property, plant and equipment
214
55
Other
1,204
639
Other expenses
6,760
3,152
Interest expense on borrowings and bank guarantees
1,868
1,237
Interest expense on lease liabilities
271
201
Amortisation of borrowing costs
77
-
Redemption premium on convertible notes
-
267
Finance costs
2,216
1,705
EMPLOYEE BENEFITS EXPENSE
The Group’s accounting policy for liabilities associated with employee benefits and
share-based payments is set out in notes 11 and 17, respectively.
All employees of the Group are party to a defined contribution superannuation scheme and
receive fixed contributions from the Group. Contributions to defined contribution funds are
recognised as an expense as they become payable. Prepaid contributions are recognised as
an asset to the extent that a cash refund or a reduction in future payment is available.
DEPRECIATION AND AMORTISATION
The Group’s accounting policy for depreciation on property, plant and equipment and right-
of-use assets is set out in notes 8 and 9, respectively.
INITIAL PUBLIC OFFERING COSTS
The costs of an initial public offering (IPO) which involve both the issue of new ordinary
shares and a stock market listing on the ASX are accounted for as follows:
incremental costs that are directly attributable to issuing new shares are deducted
from issued capital, net of any income tax benefit, or
costs that relate to the initial public offering, or are otherwise not incremental and
directly attributable to issuing new shares, are expensed to profit or loss.
Costs that relate to both the issue of ordinary shares and the IPO are allocated between
those functions on a rational and consistent basis.
On 12 July 2021, the ordinary shares of the Company were admitted for quotation on the
ASX. IPO costs were assigned as a deduction to issued capital or profit or loss based on the
proportion of new and existing ordinary shares offered to subscribers of the IPO.
FINANCE COSTS
Finance costs comprises interest expense on borrowings and leases. Finance costs are
recognised as an expense in the period in which those costs are incurred. Fees paid on the
establishment of banking facilities are recognised as transaction costs of the loan. Such
fees are amortised across the term of the banking facility.
AERISON ANNUAL REPORT 2021
46
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5 – INCOME TAXES
RECOGNITION AND MEASUREMENT
Current tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the Australian Tax Office. Deferred tax assets and liabilities are measured
at the tax rates expected to apply in the period in which the asset is realised or the
liability is settled. Tax balances are calculated on tax rates and laws that have been
enacted or substantially enacted at balance date. Taxes relating to items recognised
directly in equity are recognised in equity.
CURRENT TAXES
Current tax expense is the expected tax payable on the taxable income for the year and
any adjustment to tax payable in respect of previous years.
DEFERRED TAXES
Deferred tax expense represents movements in the temporary differences between
the carrying amount of an asset or liability in the statement of financial position
and its tax base. Deferred tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are recognised for deductible temporary differences,
unused tax losses and tax credits only if it is probable that sufficient future taxable
income will be available to utilise those temporary differences and losses. Deferred
tax is not recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of assets and liabilities in a
transaction that affects neither accounting profit nor the taxable profit.
OFFSETTING DEFERRED TAX BALANCES
Deferred tax assets and liabilities are offset only if there is a legally enforceable
right to offset current tax assets and liabilities and when they relate to income taxes
levied by the same taxation authority on either the same taxable entity or different
taxable entities that the Group intends to settle its current tax assets and liabilities
on a net basis.
UNCERTAIN TAX POSITIONS
There were no uncertain tax positions as of 31 December 2021 and 2020.
TAX CONSOLIDATION
Aerison Group Limited and its wholly-owned Australian subsidiaries implemented the tax
consolidation legislation as of 10 May 2021. Aerison Group Limited is the head entity of
the tax consolidated group.
Aerison Group Limited and its subsidiaries in the tax consolidated group continue to
account for their own current and deferred tax amounts. The Group has applied the
Group allocation approach in determining the appropriate amount of current taxes and
deferred taxes to allocate to members of the tax consolidated group. The current and
deferred tax amounts are measured in a systematic manner that is consistent with the
broad principles in AASB 112 Income Taxes.
In addition to its own current and deferred tax amounts, Aerison Group Limited also
recognises the current tax liabilities (or assets) and the deferred tax assets arising
from unused tax losses and unused tax credits assumed from its subsidiaries in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated
entities are recognised as amounts receivable from or payable to other entities in the
Group. Any difference between the amounts assumed and amounts receivable or payable
under the tax funding agreement are recognised as a contribution to (or distribution
from) wholly-owned tax consolidated entities.
AERISON ANNUAL REPORT 2021
47
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5 – INCOME TAXES (CONTINUED)
INCOME TAX EXPENSE
The income tax expense, including a numerical reconciliation of accounting profit to the income tax expense, for 2021 and 2020, is set out below:
2021
$’000
2020
$’000
Current tax expense
Current period
(667)
667
Deferred tax expense
Origination and reversal of temporary differences
1,696
1,321
Adjustments for the prior period
263
(339)
1,959
982
Income tax expense
1,292
1,649
2021
$’000
2020
$’000
Reconciliation of effective tax rate
Profit before taxes
6,650
6,708
Income tax at current rate of 30 per cent
1,995
2,012
Non-deductible expense
(3)
11
Blackhole expenditure
(296)
-
Adjustments for prior period
(404)
(374)
Income tax expense
1,292
1,649
DEFERRED TAX EXPENSE
The net deferred tax assets/(liabilities), including deferred tax benefit/(expense) recognised to profit or loss or other comprehensive income for 2021 and 2020, is reconciled below:
PROPERTY, PLANT
AND EQUIPMENT
$’000
CONTRACT
ASSETS
$’000
EMPLOYEE
BENEFITS
$’000
TRADE AND
OTHER PAYABLES
$’000
OTHER
ASSETS
$’000
UNUSED
TAX LOSSES
$’000
TOTAL
$’000
At 1 January 2020
(17)
-
130
233
45
1,712
2,103
Charged to profit or loss
(125)
-
381
471
3
(1,712)
(982)
At 31 December 2020
(142)
-
511
704
48
-
1,121
Charged to profit or loss
(96)
(2,706)
278
(368)
635
298
(1,959)
At 31 December 2021
(238)
(2,706)
789
336
683
298
(838)
AERISON ANNUAL REPORT 2021
48
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and short-term deposits with
an original maturity of three months or less from the date of acquisition. Cash and
cash equivalents are stated at face value in the statement of financial position.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are amounts due from customers for services rendered
in the ordinary course of business. Trade and other receivables are financial assets
classified and measured at amortised cost, less an allowance for expected credit
losses.
Trade and other receivables are short-term in nature and their carrying amounts are
held to be a reasonable approximation of fair value.
CONTRACT ASSETS
Contract assets represent the Group’s right to consideration for unbilled and completed
services for which settlement is contingent on the passage of time. Contract assets
are reclassified to trade receivables when those services are certified by and invoiced
to the customer. The timing of customer invoicing is linked to a claim period (ordinarily
a calendar month) or the achievement of performance milestones.
NOTE 7 – TRADE AND OTHER RECEIVABLES
2021
$’000
2020
$’000
Trade receivables
16,061
11,812
Contract assets
45,871
25,009
Prepayments
1,138
576
Income taxes receivable
1,017
-
Other receivables
805
712
64,892
38,109
Current
64,718
38,109
Non-current
174
-
2021
$’000
2020
$’000
Cash at bank
8,806
2,722
Short-term deposits
4,413
5,032
Cash and cash equivalents
13,219
7,754
Bank overdraft
-
(1,277)
Cash and cash equivalents for the cash flow statement
13,219
6,477
Reconciliation of net profit after taxes to net cash flows
from operations:
Net profit after taxes
5,358
5,059
Non-cash items
Depreciation and amortisation
2,656
2,053
Loss on disposal of property, plant and equipment
214
55
Share issue costs
986
-
Share-based payment expense
171
100
Change in assets and liabilities
Increase in trade and other receivables
(26,812)
(5,660)
Decrease/(increase) in inventories
454
(367)
Increase/(decrease) in trade and other payables
14,515
(4,318)
Increase in employee entitlements
536
1,026
Decrease in current and deferred tax balances
275
1,649
Net cash flows used in operating activities
(1,647)
(403)
AERISON ANNUAL REPORT 2021
49
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT
RECOGNITION AND MEASUREMENT
Property, plant and equipment is measured at cost, less accumulated depreciation and impairment losses. Costs comprises:
the consideration paid on acquisition of the asset,
the cost of materials, direct labour and other directly attributable costs in bringing the asset to a working condition for its intended use,
the costs of dismantling the asset, and
borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset.
The capitalisation of costs ceases when the asset is available for use, at which point in time depreciation commences. Subsequent expenditure which increases the economic
benefits derived from an asset is capitalised.
Capital works in progress of $322,000 (2020: $2,000) is included within the appropriate category of property, plant and equipment.
DEPRECIATION
Depreciation of property, plant and equipment, other than land, is calculated on a diminishing value basis and expensed over the useful life of the asset. Depreciation methods, useful lives
and residual values are re-assessed at least annually. Leasehold improvements are depreciated over the shorter of their lease term and estimated useful lives on a straight-line basis.
Estimated useful lives (in years) by class of asset are as follows:
2021
2020
Plant and equipment
4.0 – 5.5 years
4.0 – 5.5 years
Computer equipment and software
1.3 –3.0 years
1.3 – 3.0 years
DERECOGNITION
Property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is expected to bring no future economic benefits. Any gain or loss from
derecognising the asset is recognised to profit or loss in the period the asset is disposed.
IMPAIRMENT
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at balance date to determine whether there is any indication
of impairment. An impairment loss is recognised where the carrying amount of an asset, or the cash generating unit to which the asset belongs, exceeds its recoverable amount,
which is the greater of its value in use and fair value less costs to sell. No indicators of impairment which would trigger impairment testing were identified for the years ended
31 December 2021 and 2020.
AERISON ANNUAL REPORT 2021
50
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
2021
2020
LEASEHOLD
IMPROVEMENTS
$’000
PLANT AND
EQUIPMENT
$’000
COMPUTER
EQUIPMENT
AND SOFTWARE
$’000
TOTAL
$’000
LEASEHOLD
IMPROVEMENTS
$’000
PLANT AND
EQUIPMENT
$’000
COMPUTER
EQUIPMENT
AND SOFTWARE
$’000
TOTAL
$’000
At 1 January
199
1,283
921
2,403
89
1,188
1,177
2,454
Additions
331
856
759
1,946
145
705
255
1,105
Disposals and write-offs
-
(214)
(4)
(218)
(2)
(35)
(15)
(52)
Depreciation
(119)
(813)
(608)
(1,540)
(33)
(577)
(494)
(1,104)
At 31 December
411
1,112
1,068
2,591
199
1,281
923
2,403
Cost
713
4,654
3,351
8,718
381
4,370
2,746
7,497
Accumulated depreciation
and impairment
(302)
(3,542)
(2,283)
(6,127)
(182)
(3,089)
(1,823)
(5,094)
Carrying amount at
31 December
411
1,112
1,068
2,591
199
1,281
923
2,403
AERISON ANNUAL REPORT 2021
51
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9 – RIGHT OF USE ASSETS AND LIABILITIES
RIGHT-OF-USE ASSETS
Right-of-use assets are recognised at the commencement date of the lease, being
the date on which the underlying asset is available for use. Right-of-use assets are
initially measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets as follows:
the estimated useful lives of right-of-use land and building assets are between
one and five years,
the estimated useful lives of right-of-use plant and equipment is between one
and four years.
If ownership of the leased asset transfers to the Group at the end of the lease term
or the cost reflects the exercise of a purchase option, depreciation is calculated
using the estimated useful life of the asset.
Right-of-use assets are also subject to impairment testing. To this end, the Group’s
impairment policy is separately set out in note 8.
LEASE LIABILITIES
Lease liabilities are recognised by the Group at the commencement date of the lease.
Lease liabilities are measured at the present value of lease payments across the
lease term.
Lease payments include fixed payments, variable lease payments that depend on an
index or rate and amounts expected to be paid under residual value guarantees. Lease
payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group. Variable lease payments that do not depend on an index or a rate
are recognised as expenses in the period in which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental
borrowing rate at the lease commencement date where the interest rate implicit in the
lease is not readily determinable. After the commencement date, the lease liability is
increased to reflect the accretion of interest and reduced for lease payments made. The
carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the lease payments (e.g. changes to future payments
resulting from a change in an index or rate used to determine such lease payments) or a
change in the assessment to purchase the underlying asset.
Lease liabilities are classified as current liabilities unless the Group has an unconditional
right to defer settlement of the liability for more than 12 months after balance date.
SHORT-TERM LEASES AND LEASES OF LOW-VALUE ASSETS
The Group applies the short-term lease recognition exemption to its short-term leases,
which are defined as those leases that have a lease term of 12 months or less from the
commencement date. It also applies the lease of low-value assets recognition exemption
to leases that are considered to be low value. Lease payments on short-term leases and
leases of low-value assets are recognised as expenses on a straight-line basis over the
lease term.
AERISON ANNUAL REPORT 2021
52
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9 – RIGHT OF USE ASSETS AND LIABILITIES (CONTINUED)
KEY JUDGEMENTS AND ESTIMATES: LEASES
DETERMINATION OF LEASE TERM
The lease term is the minimum non-cancellable period of the lease, plus periods
captured under an extension option. An extension option is brought to account where
an economic incentive for extension exists, and it is reasonably certain that the
Group will exercise that option. Economic incentives include material penalties for
early termination, the uniqueness of the underlying asset and whether the quantum
of leasehold improvements is significant. After the commencement of the lease,
the lease term is reassessed on the occurrence of a significant event or change in
circumstances. The Group has not brought to account extension options as part of the
valuation of right-of-use assets and lease liabilities.
DETERMINATION OF INCREMENTAL BORROWING RATES
The Group determines its incremental borrowing rate (IBR) by evaluating published
rates from external financial institutions, adjusting for the tenure and currency of the
lease. At 31 December 2021, the IBR on lease liabilities ranged between 8.3% to 2.9%
(2020: 8.3% to 3.0%).
RIGHT-OF-USE ASSETS
Amounts recognised as right-of-use assets at 31 December 2021 and 2020 are tabulated below:
2021
2020
LAND AND
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
TOTAL
$’000
LAND AND
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
TOTAL
$’000
At 1 January
2,614
78
2,692
302
-
302
Additions
2,632
464
3,096
3,465
85
3,550
Disposals and write-offs
-
-
-
(211)
-
(211)
Depreciation and impairment
(1,016)
(100)
(1,116)
(942)
(7)
(949)
At 31 December
4,230
442
4,672
2,614
78
2,692
At cost
5,487
542
6,029
3,394
85
3,479
Accumulated depreciation and
impairment
(1,257)
(100)
(1,357)
(780)
(7)
(787)
At 31 December
4,230
442
4,672
2,614
78
2,692
AERISON ANNUAL REPORT 2021
53
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9 – RIGHT OF USE ASSETS AND LIABILITIES (CONTINUED)
LEASING ACTIVITIES
The Group leases land and buildings, principally related to the West Perth corporate office and Forrestfield fabrication and assembly facility, and motor vehicles. Land and building
leases are for periods between 1 to 5 years, plus extension options. Plant and equipment leases are for periods between 1 to 4 years, with no extension options. Rent is either fixed or
reset periodically based on an index or rate. Rent may be adjusted on the basis of annual fixed percentage increases or market reviews.
LEASE LIABILITIES
Amounts recognised as lease liabilities at 31 December 2021 and 2020 is set out below:
2021
2020
LAND AND
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
TOTAL
$’000
LAND AND
BUILDINGS
$’000
PLANT AND
EQUIPMENT
$’000
TOTAL
$’000
Current
1,099
216
1,315
651
19
670
Non-current
3,602
260
3,862
2,046
64
2,110
PRESENT VALUE OF FUTURE RENTALS PAYABLE
The maturity profile of lease liabilities at 31 December 2021 and 2020 is set out below:
2021
2020
PRINCIPAL
$’000
INTEREST
$’000
GROSS
$’000
PRINCIPAL
$’000
INTEREST
$’000
GROSS
$’000
Less than one year
1,315
237
1,552
670
270
940
Between two and five years
3,862
348
4,210
1,874
390
2,264
More than five years
-
-
-
236
3
239
Total
5,177
585
5,762
2,780
663
3,443
AERISON ANNUAL REPORT 2021
54
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 10 – TRADE AND OTHER PAYABLES
TRADE AND OTHER PAYABLES
Trade and other payables are recognised when goods and services are received,
whether or not billed to the Group, prior to the end of the reporting period.
Trade and other payables are financial liabilities classified and measured at
amortised cost.
Trade and other payables are short-term in nature and their carrying amounts are
held to be a reasonable approximation of fair value.
CONTRACT LIABILITIES
Contract liabilities arise where advance payments are received prior to services
being performed. Advance payments are allocated to the performance obligations
under the contract and recognised as revenue when those performance obligations
are fulfilled.
RECOGNITION AND MEASUREMENT
Employee entitlements in respect of annual leave and long service leave is the
amount of future benefit that employees have earned in return for their service in
the current and prior periods. These liabilities are measured as the present value
of estimated future payments using the projected unit credit method.
Employee entitlements which are not expected to be settled within one year after
balance date are recognised as non-current liabilities.
KEY ESTIMATES AND JUDGEMENTS: PROVISION FOR LONG
SERVICE LEAVE
Long service leave is discounted using market yields on high quality Australian
corporate bonds at balance date with terms to maturity which closely match
the estimated future cash flows. Management exercises judgement over
key assumptions used in the long service leave calculation, which includes
future increases in salaries and wages, on-cost rates and attrition rates of
current employees.
NOTE 11 – EMPLOYEE ENTITLEMENTS
2021
$’000
2020
$’000
Trade payables
15,871
5,525
Accrued expenses
7,105
3,825
Accrued salaries and wages
2,387
1,527
Contract liabilities
1,326
1,502
Income taxes payable
-
667
Other payables
1,775
1,159
28,464
14,205
2021
$’000
2020
$’000
Annual leave
1,883
2,096
Long service leave
749
521
2,632
2,617
Current
2,503
2,559
Non-current
129
58
AERISON ANNUAL REPORT 2021
55
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12 – FINANCIAL INSTRUMENTS
CLASSIFICATION AND MEASUREMENT OF FINANCIAL ASSETS
Financial assets are classified into three categories depending on their contractual
cash flow characteristics and the Group’s business model for managing the
financial assets. These categories are:
Amortised cost
Fair value through profit or loss
Fair value through other comprehensive income
A financial asset which is a debt instrument is measured at amortised cost only if
both of the following conditions are met:
it is held within a business model whose objective is to hold assets in order to
collect contractual cash flows, and
the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest.
However, the Group may choose at initial recognition to designate a debt
instrument that meets the amortised cost criteria at fair value through profit or
loss if doing so eliminates or significantly reduces an accounting mismatch.
CLASSIFICATION AND MEASUREMENT OF FINANCIAL LIABILITIES
Financial liabilities are classified at either amortised cost or fair value through
profit or loss. The Group may choose at initial recognition to designate a financial
liability as at fair value through profit or loss if doing so eliminates or significantly
reduces an accounting mismatch. All financial liabilities of the Group are measured
at amortised cost, except for derivative financial instruments, which are measured
at fair value. The Group does not carry any derivative financial liabilities.
KEY ESTIMATE OR JUDGEMENT: FAIR VALUE HIERARCHY
When measuring the fair value of an asset or liability, the Group uses observable
market data as far as possible. Fair values are categories into different levels in a
fair value hierarchy based on inputs used in the valuation techniques as follows:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets
or liabilities
Level 2 – Inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices)
Level 3 – Inputs for the asset and liability are not based on observable
market data (unobservable inputs)
If the inputs used to measure the fair value of an asset or liability fall into
different levels of the fair value hierarchy, then the fair value measurement is
categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
FINANCIAL RISK MANAGEMENT
Exposure to credit and liquidity risks arises in the ordinary course of business for the
Group and are explained on the following pages. Financial risks related to interest rates
and foreign currencies are not substantive as follows:
RISK
EXPOSURE
Interest
rates
The secured trade finance loan securitises 81 per cent of the face value of trade
receivables with recourse. The settlement of drawdowns against the trade
finance loan is linked to the settlement of the underlying trade receivable,
which ordinarily occurs between 30 to 45 days after invoicing. The exposure to
changes in the fair value or future cash flows of the trade finance loan arising
from changes in the BBSY is not significant.
Foreign
currencies
Customer contracts are negotiated and billed in Australian dollars. Costs to
perform contracted works are denominated in Australian dollars. The Group
does not hold foreign denominated financial assets or liabilities.
AERISON ANNUAL REPORT 2021
56
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12 – FINANCIAL INSTRUMENTS (CONTINUED)
CREDIT RISK MANAGEMENT
Credit risk is the risks that a customer or counterparty will not meet its obligation
under a financial instrument or customer contract, leading to a financial loss to the
Group. Credit risk arises from the financial assets of the Group, comprising cash
and cash equivalents and trade and other receivables.
The Group does not require collateral in respect of trade and other receivables.
Rather, the Group manages its credit risk on trade receivables by contracting
with counterparties with investment grade credit ratings. Credit evaluations are
performed for all customers where contract values exceed $10,000. Ageing of trade
receivables is monitored on an ongoing basis. As a result, the Group’s exposure to
bad debts is not significant.
Cash and cash equivalents are held with reputable financial institutions with
investment grade credit rating of no less than A-.
KEY ESTIMATE AND JUDGEMENTS: PROVISION FOR EXPECTED
CREDIT LOSSES
The Group applies the simplified approach to providing for expected credit
losses, which permits the use of a lifetime provision for expected credit losses
for all trade receivables.
To determine the provision for expected credit losses, the Group allocates its
exposure to a credit risk considering data which is predictive of the risk of
loss, such as external credit ratings, audited financial statements, publicly
available press information and receivables ageing. Expected credit losses also
incorporate forward looking information and pertinent macroeconomic factors.
CONCENTRATION OF CREDIT RISK
At 31 December 2021, the Group had three customers (2020: four customers) that owed
the Group more than $1 million each and accounted for 80% (2020: 71%) of all trade
receivables. Payment terms are between 30 to 45 days, limiting credit exposure to a
short period of time.
The status of trade receivables at the reporting date is as follows:
GROSS
TRADE
RECEIVABLES
2021
$'000
ALLOWANCE
FOR EXPECTED
CREDIT LOSSES
2021
$'000
GROSS
TRADE
RECEIVABLES
2020
$'000
ALLOWANCE
FOR EXPECTED
CREDIT LOSSES
2020
$'000
Not past due
15,902
-
11,435
-
Past due 0 – 30 days
78
-
55
-
Past due 31 – 120 days
81
-
21
-
Past due 121 – 365 days
-
-
301
-
Past due more than
one year
-
-
-
-
16,061
-
11,812
-
CREDIT RISK
MAXIMUM EXPOSURE TO CREDIT RISK
The carrying amount of financial assets represents the Group’s maximum credit
exposure as follows:
2021
$'000
2020
$'000
Cash and cash equivalents
13,219
7,754
Trade receivables
16,061
11,812
Other receivables
805
712
Contract assets
45,871
25,009
Maximum credit exposure
75,956
45,287
The Group has not renegotiated the terms of any financial assets which would result in
the carrying amount no longer past due or avoid a possible past due status.
AERISON ANNUAL REPORT 2021
57
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12 – FINANCIAL INSTRUMENTS (CONTINUED)
LIQUIDITY MANAGEMENT
Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to repay those financial liabilities as and when they fall due.
The liquidity position of the Group is managed to ensure sufficient funds are available to satisfy its financial obligations as and when they fall due. The Group’s evaluates its liquidity
requirements on a daily basis, which involves the review of cash flow forecasts to determine expected liquidity positions. The Group generates sufficient cash flows from its operating
activities to meet its obligations arising from its financial liabilities and has bank overdrafts in place to cover potential shortfalls.
At 31 December 2021, the Group had $18,307,000 (2020: $15,798,000) of available undrawn facilities and cash and cash equivalents at its disposal.
LIQUIDITY RISK
The following table sets out the contractual and expected cash flows for all financial liabilities:
2021
STATEMENT OF
FINANCIAL
POSITION
$'000
CONTRACTED
CASH FLOWS
$'000
6 MONTHS
OR LESS
$'000
6 TO 12
MONTHS
$'000
1 TO 2
YEARS
$'000
2 TO 5
YEARS
$'000
MORE THAN
5 YEARS
$'000
Trade payables
15,871
15,871
15,871
-
-
-
-
Borrowings
14,950
15,460
15,266
194
-
-
-
Total financial liabilities
30,821
31,331
31,137
194
-
-
-
2020
STATEMENT OF
FINANCIAL
POSITION
$'000
CONTRACTED
CASH FLOWS
$'000
6 MONTHS
OR LESS
$'000
6 TO 12
MONTHS
$'000
1 TO 2
YEARS
$'000
2 TO 5
YEARS
$'000
MORE THAN
5 YEARS
$'000
Trade payables
5,525
5,525
5,525
-
-
-
-
Borrowings
14,957
15,034
15,017
17
-
-
-
Total financial liabilities
20,482
20,559
20,542
17
-
-
-
AERISON ANNUAL REPORT 2021
58
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12 – FINANCIAL INSTRUMENTS (CONTINUED)
Borrowings are recognised initially at fair value, net of directly attributable transaction costs. Borrowings are subsequently measured at amortised cost under the effective
interest rate method.
LIQUIDITY RISK (CONTINUED)
BORROWINGS
2021
$'000
2020
$'000
Secured trade finance loan
14,912
9,729
Unsecured premium funding loan
548
120
Bank overdraft
-
1,277
Convertible notes
-
3,908
Gross borrowings
15,460
15,034
Prepaid borrowing costs
(924)
(84)
Borrowings
14,536
14,950
Facilities, interest rate ranges, maturity dates and balances of banking facilities are as follows:
2021
2020
FACILITY
$'000
DRAWN
$'000
EXPIRY
INTEREST
RATE
FACILITY
$'000
DRAWN
$'000
EXPIRY
INTEREST
RATE
Borrowings
Secured trade finance loan
15,000
14,912
March 2022
BBSW + 1.75%
15,000
9,729
February 2021
BBSW + 1.75%
Bank overdraft
5,000
-
March 2022
OIR – 1.08%
4,000
1,227
February 2021
OIR – 1.08%
20,000
14,912
19,000
10,956
Guarantees and bonds
Bank guarantees
16,000
15,029
March 2022
2.50%
8,000
7,697
February 2021
2.50%
Surety bonds
15,500
13,728
November 2022
2.95 – 3.30%
-
-
-
-
31,500
28,757
8,000
7,697
AERISON ANNUAL REPORT 2021
59
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12 – FINANCIAL INSTRUMENTS (CONTINUED)
LIQUIDITY RISK (CONTINUED)
Changes in liabilities from financing cash flows for the year ended 31 December 2021 are as follows:
$’000
LEASE
LIABILITIES
PREMIUM
FUNDING
CONVERTIBLE
NOTES
TRADE
FINANCE LOAN
TOTAL
At 31 December 2020
2,781
120
3,908
9,728
16,537
Payment of lease liabilities
(1,096)
-
-
-
(1,096)
Net drawings of borrowings
-
428
-
5,267
5,695
Conversion to issued capital
-
-
(3,900)
-
(3,900)
New leases
3,096
-
-
-
3,096
Other
396
-
(8)
(83)
305
At 31 December 2021
5,177
548
-
14,912
20,637
The ‘Other’ column includes the effect of accrued but not yet paid interest on interest-bearing borrowings, including lease liabilities. The Group classifies interest paid as cash flows
from operating activities.
CAPITAL MANAGEMENT
The Group’s debt and capital comprises ordinary shares and financial liabilities, supported by financial assets. The Group’s capital management policy is to achieve a sustainable
debt to equity ratio to generate shareholder value, ensure the Group may fund sustainable growth in its operations and continue as a going concern. Adjustments to the capital
structure of the Group to achieve these goals may include debt raisings, distributions to shareholders and ordinary share issues. The Group is not exposed to any externally imposed
capital requirements, but for a 15 per cent placement capacity on new equity raisings set out in ASX Listing Rules Chapter 7.
The allocation of capital between operating segments and activities is, to a large extent, driven by optimisation of the return achieved on the capital allocated. The process of
allocating capital to operating segments and activities is undertaken independently of those responsible for the operation. The Group’s capital management and allocation policies
are regularly reviewed by the Board.
There were no material changes in the Group’s management of capital during 2021.
AERISON ANNUAL REPORT 2021
60
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13 – ISSUED CAPITAL
NOTE 14 – RESERVES
Ordinary shares are classified to equity and recorded at the value of consideration
received, less transaction costs arising from the issue of new shares.
NUMBER OF
SHARES
#
$’000
Shares on issue on 31 December 2019
1,373,014
3,329
Shares on issue on 31 December 2020
1,373,014
3,329
Share split on a ratio of 1:175.787998
239,986,368
-
Shares on issue on 31 December 2020
241,359,382
3,329
Conversion of convertible notes to issued capital1
27,078,106
3,900
Issue of fully paid ordinary shares2
37,500,000
7,500
Less:
Transaction costs arising on share issue
-
(1,233)
Shares on issue on 31 December 2021
305,937,488
13,496
1.
On 30 June 2021, convertible notes of $3.900 million were converted to 27,078,106 fully paid ordinary shares.
2. On 6 July 2021, 37,500,000 fully paid ordinary shares were issued to subscribers of the initial public offering.
All ordinary shares are single class with equal rights to dividends, capital, distributions
and voting. The Company does not have authorised capital nor par value in relation to its
issued shares.
2021
$’000
2020
$’000
Share based payments reserve
728
100
Treasury share reserve
(120)
-
608
100
The nature and purpose of reserves is explained below:
Share based payments reserve
This reserve comprises the fair value of equity instruments granted to employees
and non-employees under long-term incentive arrangements separately described
in note 17.
Treasury share reserve
This reserve comprises the Group’s own equity instruments, which are required for
later use in employee share-based payment arrangements, which are deducted
from equity. No gain or loss is recognised in profit or loss on the purchase, sale,
issue or cancellation of the Group’s own equity instruments.
The Group held 605,969 treasury shares in trust at 31 December 2021 (2020: Nil).
AERISON ANNUAL REPORT 2021
61
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15 – DIVIDENDS
NOTE 16 – EARNINGS PER SHARE
The Company declared and paid cash dividends on Class B and C preference shares1 as
follows:
2021
$’000
2020
$’000
Fully franked dividends paid on preference shares
Final dividend of $72,000 per share (2020: $144,000)
287
576
Dividend franking account
Franking credits available for subsequent periods
3,333
2,440
1.
S2S Investment Holdings Pty Ltd, as trustee for S2S Investment Trust, and Arioso Financial Investments Pty
Ltd, as trustee for the Hibbs Family Trust, held two Class B and C preference shares in Aerison Holdings Pty
Ltd. The preference shares were transferred to Aerison Group Limited on 10 May 2021.
The Company declared and paid cash dividends on Class B and C preference shares
as follows:
2021
2020
Profit attributable to equity holders of the Company ($’000)
5,358
5,059
Basic EPS (cps)
1.96
2.10
Weighted average number of ordinary shares (million)2
273,474,312
241,359,382
Diluted EPS (cps)
1.75
1.95
Weighted average number of ordinary shares (million)2
273,474,312
241,359,382
Plus:
Contingently issuable shares
32,950,000
17,500,000
2.
The weighted average number of ordinary shares presented for 2020 was retrospectively restated for the
2021 share split on a ratio of 1:175.787998. Refer to note 13 for further details.
There have been no transactions involving ordinary shares between balance date and the
date of completion of these financial statements.
The calculation of basic and diluted earnings per share is explained as follows:
Basic earnings per share
Basic earnings per share is calculated as net profit attributable to members
of the Company, adjusted to exclude any costs of servicing equity (other than
dividends), divided by the weighted average number of ordinary shares.
Diluted earnings per share
Diluted earnings per share is calculated as per basic earnings per share with an
adjustment for the weighted average number of ordinary shares that would be
issued on conversion of all dilutive potential ordinary shares.
Dilution arises as a result of share rights and performance rights issued to
employees and non-employees as part of long-term incentive arrangements
separately described in note 17.
AERISON ANNUAL REPORT 2021
62
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 17 – SHARE BASED PAYMENTS
RECOGNITION AND MEASUREMENT
The cost of equity-settled transactions with employees and non-employees
is measured using their fair value at the date on which they are granted.
In determining the fair value, only performance conditions linked to the
price of Aerison Group Limited (market conditions) are considered.
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period on which performance conditions
(excluding market conditions) are met, ending on the date on which employees
become fully entitled to the award (vesting date). The cumulative expense
recognised for equity-settled transactions at each reporting date until vesting
date reflects the extent to which the vesting period has expired and the proportion
of awards that are expected to ultimately vest. No expense is recognised for
awards that do not ultimately vest due to a non-market performance condition not
being met. The expense is recognised in full if the awards do not vest (or are not
exercised) due to a market performance condition not being met.
MODIFICATION
Where the terms of an equity-settled awards are modified, as a minimum,
an expense is recognised as if the terms had not been modified. An expense
is recognised for any increase in the value of a transaction as a result of the
modification, as measured at the date of modification.
CANCELLATION
Where an equity-settled award is cancelled, it is treated as if it had vested on
the date of cancellation, and any expense not yet recognised for the award is
recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification to the
original award.
The nature of equity-settled share-based payment arrangements may be explained
as follows:
Aerison Equity Plan (AEP)
The AEP was introduced on 29 October 2021. Under the 2021 AEP, 3,950,000 share
rights were issued to employees and consultants identified as being retention critical
to the Group. A share right issued under the AEP entitles the participant to receive a
fully paid ordinary share on vesting, which occurs either one to two years after grant
date, and subject to a continuous employment service condition. Participants do not
make any payment in respect of the share rights at grant date or upon vesting.
Director Incentive Plan (DIP)
The DIP was introduced on 29 October 2021. Under the 2021 DIP, the Board of Directors
received in aggregate 5,500,000 performance rights in the Company.
Each performance right entitles a Board member to receive a fully paid ordinary
share for no consideration, subject to a market-based performance condition
requiring a 20-day volume weighted average price of $0.35 per share or more during
the 24 months ended 29 November 2023. Upon vesting, the Board member has five
years to exercise the performance right, subject to the earlier termination of their
directorship.
Lead Manager Performance Rights (LPR)
On 6 July 2021, 6,000,000 share options were issued to Peloton Capital in
consideration for managing the Company’s initial public offering. The exercise price of
the share options was $0.30, being a 50 per cent premium on the initial public offering
price of $0.20 per share. The share options are exercisable within three years of
12 July 2021.
Guarantor Performance Rights (GPR)
On 28 July 2020, 500,000 performance rights were issued to the spouses of
G. Leone and D. Hibbs in return for providing unlimited personal guarantees in favour
of Export Finance Australia, which provided a $4.960 million guarantee facility to
the Group. Each performance right entitles the spouse to a fully paid ordinary share
for no consideration and no earlier than 15 months after a Liquidity Event.
On 12 July 2021, the performance rights vested with the admission of the ordinary
shares of the Company for quotation on the ASX, which met the definition of a
Liquidity Event. The performance rights cannot be exercised until 12 October 2022.
AERISON ANNUAL REPORT 2021
63
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 17 – SHARE BASED PAYMENTS (CONTINUED)
EXPENSE DURING THE YEAR
The share-based payment expense recognised for employee and non-employee services
received during the year is set out below. There were no cancellations to awards in 2021
or 2020.
2021
$’000
2020
$’000
Aerison Equity Plan
53
-
Director Incentive Plan
118
-
Lead Manager Performance Rights1
203
-
Guarantor Performance Rights
-
100
374
100
1.
The total fair value of the Lead Manager Performance Rights was $458,000, comprising:
$255,000 was deducted against issued capital as a transaction cost for the issue of 37,500,000 fully paid
ordinary shares on 6 July 2021.
$203,000 was treated an initial public offering cost, recognised in other expenses in profit or loss.
MOVEMENTS DURING THE YEAR
The number and weighted average exercise prices (WAEP) of, and movements in,
performance rights and share rights set out below:
2021
NUMBER
2021
WAEP
2020
NUMBER
2020
WAEP
Outstanding at 1 January
500,000
-
-
-
Net change other2
17,000,000
-
-
-
Granted during the year
15,450,000
0.12
500,000
-
Outstanding at 31 December
32,950,000
0.05
500,000
-
Exercisable at 31 December
-
-
-
-
2. During 2021, the number of Guarantor Performance Rights increased from 500,000 to 87,894,000 to reflect
the share split on a ratio of 1:175.787998. Thereafter, 70,394,000 performance rights were cancelled.
MEASUREMENT OF GRANT DATE FAIR VALUES
The fair value of share-based payment arrangements was calculated by independent,
accredited valuation specialists. The following table lists inputs to the models used as
part of the valuation of performance rights and share rights issued during 2021:
2021
AEP
2021
DIP
2021
LPR
Fair value at grant date ($)
$0.185
$0.159
$0.076
Share price at grant date ($)
$0.185
$0.200
$0.200
Exercise price ($)
-
-
$0.300
Dividend yield (%)
-
-
-
Expected volatility (%)
80.00%
80.00%
80.00%
Risk-free interest rate (%)
0.54%
0.19%
2.09%
Grant date
29/10/21
29/10/21
06/07/21
Vesting date
12/07/23
29/11/23
Immediately
Expiry date
12/07/23
29/11/28
06/07/24
Valuation model
Trinomial
Trinomial
Trinomial
The Company was admitted to quotation on the ASX as part of its initial public offering
on 12 July 2021. As a result, expected volatility was benchmarked against the historical
volatility of comparable companies over a period similar to the life of the performance
rights and share rights granted. This assessment assumes the historical volatility of
comparable companies is indicative of future trends, which may not necessarily be the
actual outcome.
AERISON ANNUAL REPORT 2021
64
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 18 – CONTINGENT LIABILITIES
NOTE 19 – GROUP ENTITIES AND BASIS OF CONSOLIDATION
2021
$’000
2020
$’000
Bank guarantees and surety bonds
28,965
8,027
The Group has guarantees with its banking partners. Guarantees are provided to
customers in the ordinary course of business as security against non-performance by
the Group of its contracted obligations. In this respect, the Group treats guarantees as
contingent liabilities until such time it is probable that the Group will be required to
make payments under the guarantees. It is not expected that these guarantees will
be called upon.
In addition, the Group is managing claims and disputes arising from construction and
maintenance contracts in the ordinary course of business. These claims and disputes
may involve adjudication, arbitration or litigation. Due to the uncertainty in relation to the
quantum or timing of the resolution of these claims, no amounts were recognised in the
financial statements in respect of these matters.
The Group comprises the Company and the subsidiaries listed below. All members of the
Group are incorporated and operate solely in Australia.
NAME
2021
INTEREST
(%)
2020
INTEREST
(%)
PRINCIPAL ACTIVITIES
Aerison Holdings Pty Ltd
100
100
Holding company
Aerison Pty Ltd
100
100
Construction company
Aerison Services Pty Ltd
100
100
Construction company
Aerison EPC Pty Ltd
100
100
Construction company
Aerison Mechanical and
Electrical Technology Pty Ltd
100
25
Dormant
Subsidiaries are entities controlled by the Group. The Group controls an entity
when it is exposed to, or has the rights to, the variable returns from involvement
with the entity and has the ability to affect those returns through its power over
the entity.
The financial statements of subsidiaries are included in the financial statements
from the date on which control commences to the date on which control ceases.
Intra-group balances and transactions, including any unrealised income and
expenses arising from intra-group transactions, are eliminated on consolidation.
If the Group loses control over a subsidiary, it derecognises the related assets,
liabilities, non-controlling interest and other components of equity, while any
resultant gain or loss is recognised in profit or loss. Any investment retained is
recognised at fair value.
AERISON ANNUAL REPORT 2021
65
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 20 – PARENT ENTITY
NOTE 21 – DEED OF CROSS GUARANTEE
Supplementary financial information of Aerison Group Limited in its capacity as the
ultimate parent entity of the Group is as follows:
2021
$’000
2020
$’000
Current assets
1,038
12
Total assets
15,960
10,362
Current liabilities
(3,322)
(6,933)
Total liabilities
(4,313)
(6,933)
Net assets
11,647
3,429
Issued capital
13,496
3,329
Accumulated losses
(2,457)
-
Reserves
608
100
Total equity
11,647
3,429
Loss of Aerison Group Limited
(2,457)
-
Total comprehensive loss of Aerison Group Limited
(2,457)
-
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, Aerison
Group Limited and its subsidiaries entered into a deed of cross guarantee (the Deed) on
21 December 2021. The effect of the Deed is that Aerison Group Limited guaranteed to
pay any deficiency in the event of winding up any subsidiary or if any subsidiary does
not meet their obligations under the terms of the overdrafts, loans, guarantees, leases
or other liabilities subject to the Deed. Similarly, the subsidiaries of the Group provided
the same guarantees in the event Aerison Group Limited is wound up or cannot meet its
obligations as and when they fall due.
Aerison Group Limited had no contingent liabilities or capital commitments at balance
date (2020: Nil).
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, relief was
granted to Aerison Holdings Pty Ltd and Aerison Pty Ltd from the preparation, audit and
lodgement of financial reports under the Corporations Act 2001.
As a condition of the Instrument, both Aerison Holdings Pty Ltd and Aerison Pty Ltd are
parties to a Deed of Cross Guarantee with Aerison Group Limited. The effect of the Deed
is described in note 20.
All subsidiaries of Aerison Group Limited, which are listed in note 19, are party to
the Deed. As a result, the consolidated financial statements of the Group mirror the
consolidated financial statements of the Closed Group.
AERISON ANNUAL REPORT 2021
66
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 22 – RELATED PARTIES
Transactions with related parties have been entered into the ordinary course of business
and undertaken on normal commercial terms.
Material transactions and receivables with related parties associated with directors
of the Group are as follow:
REVENUE FROM
RELATED PARTIES
$’000
RECEIVABLE FROM
RELATED PARTIES1
$’000
Other Directors’ interests
2021
845
15
2020
293
100
1.
Amounts are classified as trade and other receivables at note 7.
During 2021 and 2020, the Group rendered construction services to Synergy (Electrical
Generation and Retail Corporation). The Group shares a common director with Synergy
(Electrical Generation and Retail Corporation).
Sales to related parties are on terms equivalent to those that prevail in arm’s length
transactions. Trade receivables at the end of the reporting period are unsecured,
interest-free and settled in cash. There were no guarantees provided on receivables for
any related party receivables.
Material transactions and payables with significant shareholders of the Group
were as follow:
EXPENSES
FROM RELATED PARTIES
PAYABLES
DUE TO RELATED PARTIES
$’000
$’000
Significant shareholders
2021
353
382
2020
25
-
2. Amounts are classified as trade and other payables at note 10.
The nature of material transactions with key management personnel of the Group are as
follow:
On 1 November 2021, the Group entered into a Surety Bond Facility (the Facility)
with Asset Insure Pty as agent for Swiss Re for $15.500 million. A condition of the
Facility required both the CEO and COO to provide unlimited personal guarantees
in favour of Asset Insure.
The Board determined that it was appropriate for the CEO and COO to be
compensated an amount equal to 0.8% per annum of the face value of the
Facility drawn for the duration for which the unlimited personal guarantees were
provided.
For the year ended 31 December 2021, an amount of $23,000 was expensed
to profit or loss in consideration for the provision of the unlimited personal
guarantees by the CEO and COO. At 31 December 2021, $23,000 was payable to the
CEO and COO.
On 26 March 2021, $340,000 was reimbursed to M. Lu in consideration for
expenses incurred in her capacity as a Non-Executive Director in a prior period.
AERISON ANNUAL REPORT 2021
67
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 23 – KEY MANAGEMENT PERSONNEL COMPENSATION NOTE 24 – AUDITORS’ REMUNERATION
Key management personnel compensation included in employee benefits expense in
profit or loss comprises:
2021
$’000
2020
$’000
Short term employee benefits
1,432
29
Long term employment benefits
81
160
Post-employment benefits
78
297
Share based payments
120
-
1,711
486
The external auditor of the Group was RSM Australia for the years ended
31 December 2021 and 2020. Amounts received or due and receivable by RSM
Australia are set out below:
2021
$
2020
$
Audit and review of the financial statements
178,000
87,000
Taxation services
69,068
40,021
Information technology shared services
186,850
96,580
Procurement of computer equipment and software
606,245
372,915
1,040,163
596,516
NOTE 25 – SUBSEQUENT EVENTS
There were no subsequent events.
AERISON ANNUAL REPORT 2021
68
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26 – OTHER ACCOUNTING POLICIES
CURRENT AND NON-CURRENT CLASSIFICATION
Assets and liabilities are presented in the statement of financial position based on
current and non-current classification. An asset is current when it is:
Expected to be realised or intended to be sold or consumed in the normal
operating cycle,
Held primarily for the purpose of trading,
Expected to be realised within 12 months after the reporting period, or
Cash or cash equivalent, unless restricted from being exchanged or used to
settle a liability at least 12 months after the reporting period.
All other assets are classified as non-current.
A liability is current when it is:
Expected to be settled in the normal operating cycle,
Held primarily for the purpose of trading,
Expected to be settled within 12 months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least
12 months after the reporting period.
The terms of the liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification.
The Group classifies all other liabilities are non-current.
INVENTORIES
Inventories are stated at the lower of cost and net realisable value.
Cost is calculated under the weighted average cost method and captures direct
materials, direct labour and an allocation of production overheads necessary
to bring inventories to the present location and condition. Costs arising from
extraordinary wastage are expensed as incurred.
Net realisable value is the estimated selling price in the ordinary course of business,
less estimated costs to completion and selling expenses.
GOODS AND SERVICES TAX (GST)
Revenue, expenses and assets are recognised net of the amount of GST, except:
When the GST incurred on a sale or purchase of asset or services is not payable
to or recoverable from the Australian Taxation Office (ATO), in which case the
GST is recognised as part of the revenue, expense or as part of the cost of the
acquisition of the asset, as applicable.
When receivables are payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to the ATO, is included as
part of trade receivables or trade payables in the statement of financial position.
Contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the ATO.
Cash flows are includes in the statement of cash flows on a gross basis and the GST
component of cash flows arsing from investing and financing activities, which is
recoverable from, or payable to, the Australian Taxation Office, is classified as part
of operating cash flow
CONVERTIBLE NOTES
The component of convertible notes that exhibits characteristics of a liability
is recognised as a liability in the statement of financial position, net of
transaction costs.
On issue of the convertible notes, the fair value of the liability component is
determined using a market rate for an equivalent non-convertible bond. The fair
value of the liability component is carried as a liability on an amortised cost basis
until extinguished on conversion or redemption. The increase in the liability due to
the passage of time is recognised as a finance cost.
The remainder of the convertible note proceeds are allocated to the conversion
option that is recognised in equity as a reserve, net of transaction costs.
The carrying amount of the conversion option is not remeasured in subsequent
years. The corresponding interest on convertible notes is expensed to profit or loss.
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting
and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AERISON GROUP LIMITED
Opinion
We have audited the financial report of Aerison Group Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 31 December 2021, 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 the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 31 December 2021 and of its financial
performance for the year then ended; 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 Group 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 (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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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.
Key Audit Matter
How our audit addressed this matter
Revenue
Refer to Note 3 in the financial statements
The Group has recognised revenue of $134,886,000
from contracts with customers. As disclosed in Note
3, these revenues are recognised over time as
performance obligations are fulfilled.
Construction contracts, engineering and related
services revenue is recognised by management
after assessing all factors relevant to each contract,
including specifically the following as applicable:
•
Determination of the stage of completion and
measurement of progress towards performance
obligations;
•
Estimation of total contract revenue and costs
including the estimation of cost contingencies;
•
Determination of contractual entitlement and
assessment of the probability of customer
approval of variations and acceptance of claims;
and
•
Estimation of project completion date.
This area is a key audit matter due to the number
and type of estimation events over the course of the
contract life, the unique nature of individual contract
conditions, leading to complex and judgmental
revenue recognition from contracts with customers.
Our audit procedures included:
•
Reviewing contractual terms with customers and
substantiated project revenues and costs incurred
against underlying supporting documents;
•
Assessing
management’s
assumptions
in
determining
the
stage
of
completion
and
challenging
project
managers
and
finance
personnel on various assumptions used to
determine
total
contract
revenue
and
total
estimated costs;
•
Checking mathematical accuracy of revenue
recognised during the year based on the stage of
completion;
•
Testing a sample of costs incurred to date and
agreeing these to supporting documents;
•
Reviewing
customer
and
subcontractor
documentation and discussed the progress of the
projects with project managers for any potential
disputes, variation order claims, known technical
issues or significant events that could impact the
total contract revenue and total estimated costs;
•
Evaluating the probability of recovery of outstanding
amounts by reference to the status of contract
negotiations,
historical
recoveries
and
other
supporting documentation; and
•
Reviewing
management’s
assessment
and
assessed the reasonableness of the provision for
foreseeable losses provided by management.
AERISON ANNUAL REPORT 2021
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1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 31 December 2021 but does not include the financial report and
the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly 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 Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the 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 the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 31 December
2021.
In our opinion, the Remuneration Report of Aerison Group Limited, for the year ended 31 December 2021,
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.
RSM AUSTRALIA PARTNERS
Perth, WA
TUTU PHONG
Dated: 28 February 2022
Partner
AERISON ANNUAL REPORT 2021
71
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Aerison Group Limited, I state that:
In the opinion of the directors:
(a)
the consolidated financial statements and notes of Aerison Group Limited for the year ended 31 December 2021 comply with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its performance for the year ended on that date; and
(ii)
complying with Australian Accounting Standards, including Australian Accounting Interpretations, and the Corporations Regulations 2001;
(b)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1 of the consolidated financial statements; and
(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
This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the
year ended 31 December 2021.
In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group, comprising Aerison Group
Limited and its controlled entities identified in note 19, will be able to meet any obligations or liabilities to which they may or may become subject to by virtue of the Deed of
Cross Guarantee referred to in note 20 and 21.
On behalf of the Board,
B Barnes
Non-Executive Chair
28 February 2022
Perth
AERISON ANNUAL REPORT 2021
72
CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
CONTENTS
APPENDIX A - ASX SHAREHOLDER INFORMATION
74
APPENDIX B - CORPORATE DIRECTORY AND GLOSSARY
75
APPENDICES
73
APPENDIX A – ASX SHAREHOLDER INFORMATION
Additional information required by the Australian Stock Exchange and not disclosed
elsewhere in this Annual Report is set out below. This information is current as of
11 February 2022.
SHAREHOLDER SUMMARY
The following details of the shareholders of Aerison Group Limited have been
summarised from the share register as of 11 February 2022 as follows:
305,937,488 fully paid ordinary shares are held by 518 individual shareholders
3,950,000 share rights are held by 20 individual right holders
6,000,000 share options are held by one individual option holder
23,000,000 performance rights are held by seven individual right holders.
Only issued ordinary shares carry one vote per share and carry a right to dividends.
The number of shareholders, by size of holding, in each class are as follows:
ORDINARY
SHARES
SHARE
RIGHTS
SHARE
OPTIONS
PERFORMANCE
RIGHTS
1 – 1,000
15
-
-
-
1,001 – 5,000
69
-
-
-
5,001 – 10,000
74
-
-
-
10,001 – 100,000
218
13
-
-
100,001 and over
142
7
1
7
Total
518
20
1
7
VOLUNTARY ESCROW SHARES
201,127,228 fully paid ordinary shares are held in voluntary escrow and are due to be
released on 12 July 2022.
ON-MARKET SHARE PURCHASES FOR AERISON EQUITY PLAN
During 2021, Pacific Custodians Pty Ltd purchased 605,969 shares in trust at an average
price of $0.20 per share for the purposes of satisfying the entitlements of share right
holders under the Aerison Equity Plan.
ORDINARY SHAREHOLDERS
NUMBER
PERCENTAGE
ARAOSC FINANCIAL INVESTMENTS PTY LTD
77,893,999
25.46
S2S INVESTMENT HOLDINGS PTY LTD
77,893,999
25.46
MR QIUDONG QIAO
45,339,230
14.82
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
7,226,000
2.36
METECH SUPER PTY LTD
5,004,218
1.64
MISS YEDAN WU
4,900,000
1.60
HOLICARL PTY LIMITED
2,842,903
0.93
BFB HOLDINGS PTY LTD
2,812,903
0.92
HYLEC CONTROLS PTY LTD
2,000,322
0.65
FLUE HOLDINGS PTY LTD
2,000,000
0.65
SUNSET CAPITAL MANAGEMENT PTY LTD
2,000,000
0.65
BASS FAMILY FOUNDATION PTY LTD
1,980,576
0.65
MR CALCIDON CAMILLERI
1,937,903
0.63
LINDA CAMPOS & LUIS CAMPOS
1,845,774
0.60
FESTIVA HOLDINGS PTY LTD
1,845,774
0.60
MR GEOFFREY JOHN FENNELL & MRS CARMEL ANN
FENNELL
1,800,000
0.59
CS FOURTH NOMINEES PTY LIMITED
1,650,166
0.54
MR DOMINIC OHANLON & MRS KAREN OHANLON
1,500,000
0.49
MEURER INVESTMENTS PTY LTD
1,250,161
0.41
NORTHMEAD HOLDINGS PTY LTD
1,250,000
0.41
DAHIMA PTY LTD
1,225,161
0.40
MR STEPHEN KAM LO TONG & MRS PATSY LIN HAP TONG
1,150,161
0.38
PW SADDINGTON & SONS PTY LTD
1,125,161
0.37
Total
248,474,411
81.22
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES
APPENDIX B – CORPORATE DIRECTORY AND GLOSSARY
AS AT 11 FEBRUARY 2022
DIRECTORS
B Barnes (Non-executive Chair)
G Leone (Managing Director and Chief Executive Officer)
D Hibbs (Chief Operating Officer)
P Iancov (Non-executive Director)
M Fennell (Non-executive Director)
JOINT COMPANY SECRETARIES
A Bell (Chief Financial Officer)
K Garvey (Company Secretary)
PRINCIPAL REGISTERED OFFICE
Level 1, 56 Ord Street
West Perth WA 6005
Phone: +61 (08) 9352 5900
SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
SECURITIES EXCHANGE
Aerison is listed on the Australian Securities Exchange with an ASX code of “AE1”
AUDITOR
RSM Australia Partners
Level 32/2 The Esplanade
Perth WA 6000
OTHER INFORMATION
Aerison Group Limited is a publicly listed company limited by shares, incorporated and
domiciled in Australia.
GLOSSARY
EBIT
Earnings before finance costs and income tax expense
EBITDA
Earnings before finance costs, income tax expense, depreciation and
amortisation
NPAT
Net profit after taxes
NPBT
Net profit before taxes
LTIFR
Lost time injury frequency rate
TRIFR
Total recordable injury frequency rate
SPE
Specialist Projects and Engineering
AP
Asset Projects
AS
Asset Services
AERISON ANNUAL REPORT 2021
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CONTENTS
1. AERISON AND OUR OPERATIONS
2. GOVERNANCE
3. FINANCIALS
4. APPENDICES AND REFERENCES