APPENDIX 4E
Results for Announcement to
the Market and Annual Report
2021
BSA Limited
50 088 412 748
FOR THE YEAR ENDED 30 JUNE 2021
Image courtesy of Sydney Football Stadium
CONTENTS
- APPENDIX 4E
- ANNUAL REPORT
RESULTS FOR ANNOUNCEMENT TO THE MARKET
FOR THE PERIOD ENDED 30 JUNE 2021
PREVIOUS CORRESPONDING PERIOD 30 JUNE 2020
APPENDIX 4E
Revenue from ordinary activities
Down
(14%)
Profit from ordinary activities after income tax attributable to members
Down
(81%)
Net profit for the period attributable to members
Up
n/a
to
to
to
Basic earnings per share
Diluted earnings per share
Net tangible asset backing per ordinary share
(1) Comparative information reflects reclassification between Property, plant & equipment and Intangible assets, refer to note C3.
2021
cents
0.341
0.340
(0.26)
$’000
418,346
1,479
1,479
2020
cents
(0.222)
(0.222)
0.99(1)
DIVIDENDS
Interim dividend (fully franked)
Final dividend (fully franked)
Franked amount per
Amount per security
security at 30% tax
(cents)
(cents)
0.50
0.50
0.50
0.50
Record date for determining entitlement to dividends
5 October 2021
Payment date of dividend
Total dividend payable
None of this dividend is foreign sourced.
3 November 2021
$2,170,000
The Company’s Dividend Reinvestment Plan (DRP) will be in operation for this dividend. Holders of ordinary shares may elect to have all or part of their
dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. Shares will be allotted or transferred under the DRP
for a price which is equal to the arithmetic average of the daily volume weighted average market price (rounded to the nearest whole cent) of all fully paid
shares of that class sold on the ASX (excluding special crossings and other categories reasonably determined by the Directors as distorting the fair market
value of the shares) during the ten trading days commencing on the second trading day following the relevant Record Date, determined by reference to
such information as the Directors approve for the purpose from time to time.
The last date for the receipt of an election notice for participation in the DRP is 15 October 2021.
This report is based on the consolidated financial statements which have been audited by Deloitte Touche Tohmatsu, with the Independent Auditor’s Report
included in the consolidated financial statements.
BSA LIMITED RESULTS FOR ANNOUNCEMENT TO THE MARKET
BSA Limited
Annual Report
2021
Contents
Chairman’s Report - 4
CEO Report - 6
Directors’ Report - 12
Remuneration Report - 14
Auditor’s Independence Declaration - 26
Financial Statements - 27
Directors’ Declaration - 64
Independent Auditor’s Report - 65
Shareholder Information - 72
Corporate Directory - 74
BSA is proud to be protecting the Sydney Football
Stadium by providing Fire and Life Safety systems.
Image courtesy of Sydney Football Stadium
Cover Image courtesy of Crown Resorts
Westconnex3A Tunnel - Roadway.
BSA are installing deluge pipework over 16
kilometres of road way in 10 separate tunnels.
Image courtesy of WestConnex
2021 Key
Highlights*
$422.5
million
Revenue
$23.1
million
EBITDA
$6.6
million
Net Profit
* Underlying (refer page 5)
4
4
BSA LIMITED ANNUAL REPORT 2021
Chairman’s
Report
Last year I wrote to you amidst the unprecedented effect of the COVID-19
pandemic. A year on and we are all still navigating the effects of this ongoing
health and economic crisis. Nevertheless, the BSA management team has had
an extremely effective year on a number of fronts, which I will address below.
On behalf of the Board, I commend our workforce for their resilience and adaption
to a new way of working. As a business, we have embraced some of these changes
whilst ensuring the safety of our employees, subcontractors and clients remains our
upmost priority. In accordance with health orders across the majority of our states
and territories, many of our staff have continued to work remotely for extended
periods. As we cautiously continue to welcome back office-based employees, we
have adopted a progressive approach of a hybrid-working environment (without
compromising productivity) for those employees choosing to do so. The Board
supports this model and we have invested in technology and programs to ensure
our workforce remains engaged and connected.
BSA LIMITED ANNUAL REPORT 2021 Michael Givoni
Globally, society has taken significant steps to combat how COVID-19
Our financial performance has remained consistent and we have
impacts the way we work and live. The vaccine rollouts have been
managed to deliver according to our guidance announced to the
positive with early signs of countries returning to a newfound norm.
market on 8 February 2021. The margins at underlying EBITDA line has
The disease unfortunately continues to play a pivotal role in Australia
improved from 5.28% to 5.5%. Also the cash conversion has remained at
and continues to impact businesses and economic confidence in our
an excellent level of 77%.
country. With lock downs continuing in the first months of the financial
year across most states and territories, our business is not immune
to the effects of these changes. Whilst its impact is manageable, it
does inevitably delay timing on major strategic initiatives, whether it
The Board has been very focused on pre-tax margins, cash conversion
and using technology investment prudently to drive these metrics in a
positive way.
be the mobilization on major new contract wins, scheduling routine
These high-level financial results are:
maintenance for customers, or progressing acquisition discussions. In
summary the commercial and legal work is completed but accurately
:
predicting when the earnings are delivered has proved challenging.
BSA managed to secure very significant contracts in the last twelve
months, which will set the platform for growth in next 3 to 5 years.
Major customers such as NBN, Foxtel and Telstra have written long-term
contracts with us. Arguably our most successful year in securing new
work, on record.
Revenue
Statutory Continuing NPAT
Underlying EBITDA
Underlying NPAT
Operating cash flow(1)
We also workshopped and reinvigorated our vision and values during the
Net cash
year. Our vision and values were Executive Leadership Team (‘ELT’) led
Underlying earnings per share (cps)
FY2021
FY2020
$’000
$’000
422,546
486,535
1,479
23,122
6,646
(4,588)
11,900
1.53
7,802
25,880
9,826
31,285
32,720
2.28
with input from employee focus groups. Your Board also participated to
guide and encourage a set of values and culture that supported our wish
to see sustained and significant growth in the planning horizon.
It is BSA’s Vision to be our clients’ indispensable partner for the
design, delivery and management of innovative asset solutions.
Collectively the business agreed on the following:
In February 2021, we announced to the market our strategic goals,
which included targeted revenue of $750 million with greater than
5% returns by FY2024. I am pleased to note that whilst COVID-19 lock
downs posed challenges for everyone, we used the time productively to
ensure we remain committed and on track to achieving this target. The
Board recognizes that this target will require a combination of organic
and acquisitive initiatives.
The Catalyst ONE acquisition which was completed in January this year,
has integrated well and delivered on its projections. It was an important
tactical bolt on, as it opened the CUI division to the mobile tower
market, which is a significant area of the telecommunications sector
that we previously have not been able to access.
(1) Includes COVID-19 related deferral measures (FY2021: $13,740 thousand of
repayments, FY2020: $14,340 thousand of deferrals)
The CEO’s report outlines these results in more detail.
Board changes in FY2021 include the following:
As announced during our AGM, Mark Lowe has retired from the Board
of Directors. On behalf of the Board, I would like to again acknowledge
Mark’s tremendous contribution to BSA. He has held leadership roles at
BSA for over 13 years, both as a senior executive, and more recently, as
a valued Non-executive Director.
In May 2021, Michelle Cox was invited to the Board and subsequently
appointed as a Non-executive director. Michelle brings with her a wealth
of experience in various entrepreneurial roles, with contemporary
technology and marketing skill sets. I would like to formally welcome
Michelle and look forward to working with her.
Finally, I would like to thank my fellow Directors, the Executive
Leadership Team and the BSA workforce for their commitment this year
as we continue to strive towards our FY2024 strategic plan targets.
Michael Givoni
Chairman | 20 August 2021
5
BSA LIMITED ANNUAL REPORT 2021 CEO Report
Timothy Harris
Managing Director and
Chief Executive Officer
OPERATIONAL AND FINANCIAL RESILIENCE
BSA continues to execute on its strategic initiatives despite a
challenging period. During the financial year, we have made significant
progress on a number of items:
Renewal and extension of key contracts (Foxtel & nbn OMMA) August 2020
with underlying EBITDA of $23,122 thousand (2020: $25,880 thousand)
equating to a 0.2% higher percentage return. Net profit from operations
declined to $1,479 thousand (FY2020: $7,802 thousand). Operating
cash inflow before interest and tax remained strong at $11,035 thousand
(FY2020: $18,832 thousand) adjusted for COVID-19 related deferral
measures (FY2021: $13,740 thousand of repayments, FY2020: $14,340
thousand of deferrals) with Net Cash at year-end of $11,900 (thousand).
Entering the wireless market through the acquisition of
Catalyst ONE
December 2020
Securing new contracts (nbn Unified Field Services &
Telstra Field Operations)
December 2020
BSA continues to deliver shareholder returns through consistent
dividend distributions as outlined in our dividend policy. In FY2021, we
paid out three dividends of 0.5 cents per share (March 2020 interim
dividends were deferred to July 2020), with a final dividend of 0.5 cents
Finalising the roll out of our world class technology platform December 2020
declared for FY2021 payable in November 2021.
Refreshed group strategy and targets
February 2021
Our near term priorities will ensure that we continue to successfully
deliver value to customers and stakeholders through technology.
Optimisation review & execution
May 2021
Ongoing group priorities include the following:
In the first half of FY2021, we secured a solid base of contracts for the
future. During the second half, we shifted our focus towards optimisation
and execution of those contracts and our operations, with all new
contracts now mobilised. Concurrently we evolved our internal delivery
• Excellence in Delivery,
• Grow and Diversify Contract Base,
• New Complimentary Revenue Stream (Third Pillar),
• Investment in people, and
model and structures to further optimise client service whilst ensuring
• Technology enablement.
internal efficiency, scalability, and a strong platform for growth.
These key focus areas and refreshed management structures will set the
We do need to acknowledge the economic impact of COVID-19, which
platform for success in FY2022 and beyond.
has affected BSA’s overall performance. Tender progress was slower
than expected and market confidence impacted customer spend
patterns. Fortunately, these were concentrated to specific sectors, such
as retail and tertiary education and we are in a good position to perform
WORKPLACE HEALTH AND SAFETY
The health, safety and wellbeing of our people underpinned the way
we did business throughout FY2021 as we continued to navigate the
suspended work once discretionary spend and client confidence
impact of COVID-19.
improves. Government subsidies in the form of JobKeeper, worth $11,261
thousand were accessed during FY2021, and has had the desired effect;
allowing BSA to maintain its workforce.
We undertook a collaborative review of our values to ensure they are
reflective of our workforce and support our strategy. They are as follows:
We Work Safe & Go Home Safe | We Enable Our Customers’ Success | We
Unfortunately, the new financial year has already seen lockdowns across
Embrace Diverse Thinking and Solutions | We Always Do the Right Thing.
several states highlighting the ongoing impact of the disease. We are
continually assessing the impact whilst ensuring our workforce remains
safe and that public health advice is followed at all times.
A key initiative in FY2021 was the completion of the Health and Safety
(“HSE”) Index. This represents the results of a feedback survey across the
group’s workforce on health, safety and wellbeing matters and enables
In FY2021, our core business continued to generate cash backed annuity
us to measure, focus and act on specific Health, Safety and Wellbeing
style revenue and profits. Whilst the economic climate did not allow
programs for our people. The results of this survey placed us ahead of the
us to achieve our targets, we maintained returns similar to prior years.
average scores amongst comparable companies whilst also highlighting
Group revenue is $422,546 thousand (FY2020: $486,535 thousand)
some targeted focus areas for us to improve further in FY2022 and beyond.
6
BSA LIMITED ANNUAL REPORT 2021 “In FY2021, our core business
continues to generate cash backed
annuity style revenue and profits”
BSA delivered a 1.12MW solar installation with
cloud camera technology at the Gateway
Shopping Centre (Darwin) in December 2020.
On operational safety, we successfully implemented a number of
Another initiative close to our values is the participation in the Gold
initiatives during the year centred on the pillars of:
Coast University Hospital Christmas Party. BSA could not attend in
• Systems,
• Risk Management,
• HSE Capability, and
• Health and Wellbeing.
Key initiatives during the year included participation in Safe Work
Australia month in October and BSA’s Annual Stop for Safety Day
highlighting the importance of health and safety for the Group.
These sessions were conducted virtually allowing participation to be
significantly larger than previous years.
Group wide initiatives were taken to increase reporting of all incidents
to underpin our safety culture and as a result reporting has increased.
Frequency rates marginally increased in Lost Time Injuries (LTIFR) and
Total Recordable Injuries (TRIFR). LTIFR and TRIFR moved from 1.58 to
person but managed to donate gifts to vulnerable children. We are
hopeful to celebrate the festive season in person this year.
DIVERSITY
Diversity and Inclusion (“D&I”) is one of BSA’s key business priorities. It
recognises the value that having a workforce reflecting the membership
of the communities brings to our business, employees, customers and
the community in which we operate.
We continually seek to build and retain a culture of diversity and
inclusion through four key approaches:
1. Creating a workplace culture that embraces and respects diversity
and includes,
2. Addressing gender diversity in all areas of the organisation,
2.77 and 7.12 to 7.76, respectively.
3.
Improving overall diversity in recruitment, and
During the year we successfully transitioned to the International
Standard for Occupational Health and Safety Management Systems
(ISO 45001: 2018) and maintained accreditations Quality (AS/NZS:
9001), Environment (ISO: 14001) and certification with the Office of
Federal Safety Commissioner (OFSC).
4. Committing to a series of transparent checks and balances.
In FY2021, we focused on gender diversity to improve female
participation across our workforce. This focus has resulted in achieving
our FY2021 targets through the addition of a female Board member and
the retention of the female Group Executives. This focus will continue
Our goal throughout FY2022 will be to improve our HSE Index score
more broadly across the business in FY2022.
through targeted focus areas.
COMMUNITY SUPPORT
We continued to support a number of charities during the year, which
include donations to the Children’s Cancer Institution, White Ribbon
Australian and RU OK?. Our key focus area was mental health and
wellbeing during a time where social interaction has been limited.
Group
Board
Target FY2021
Actual FY2021
Female
Male
Female
Male
14.0%
86.0%
14.3%
85.7%
Group Executive
33.0%
67.0%
37.5%
62.5%
Where possible we introduced “This is a conversation starter” work
BSA is a “relevant employer” under the Workplace Gender Equality Act
wear with the main purpose to do just that, start a conversation and
and the most recent “Gender Equality Indicators”, as defined in and
being open about the impacts of mental health.
published under that Act. Both are available on our website to view.
7
BSA LIMITED ANNUAL REPORT 2021 CEO REPORT
Communications & Utility
Infrastructure (CUI)
BSA | Communications & Utility Infrastructure (“CUI”) successfully
into the future. In addition, BSA successfully signed a new three year
delivered on a number of its strategic and tactical goals designed to set
Foxtel contract in September 2020 increasing our market share from
a strong platform for further growth. These include extending existing
50% to 100%.
contracts at higher market share and securing new contracts extending
over several years.
CUI full year revenue decreased by ($59,822 thousand), impacted by
reduced overall market volumes in nbn compared to the roll out peak
in FY2020 and client driven tender timeline delays. To a lesser extent,
the division has been impacted by COVID-19 throughout the year
due to volatility in customer demand and the impact of government
The division diversified its customer base by securing Telstra as a new
key strategic client for an initial three year period through a contractual
arrangement with Kordia Australia and expanded our strong fixed line
product offering into the wireless market through the acquisition of
Catalyst ONE in December 2020.
Significant revenue growth continues within the smart electricity
metering field services business throughout FY2021, increasing revenue
restrictions on operations albeit EBITDA return increased by 0.3% due
to $11,937 thousand (57% increase), with continued growth expected
to the successful implementation of cost optimisation programs.
through FY2022.
A new 4 year nbn services and installation agreement was secured
The impact of the majority of these significant achievements however
in December 2020; which increased our market share from 26% to
will be reflected predominantly from FY2022 onwards as these
circa 36% and positions BSA as a key strategic delivery partner to nbn
contracts were mobilised throughout FY2021.
KEY AREAS OF FOCUS FOR
FY2022 INCLUDE:
• Organic fixed line growth by increasing
scopes and geographies with our
existing platinum customer base,
• Expanding our fixed line customer
base,
• Further wireless expansion by
capitalizing on our acquisition of
Catalyst ONE,
• On-going investments in people,
processes and systems to optimise
performance and margin,
• Continuing to lead the market with our
Customer Experience Program, and
•
Investing in a technology enabled
future operating model.
BSA Technician connecting patch
cord to Vocus Port.
Image courtesy of Buxtonography
8
BSA LIMITED ANNUAL REPORT 2021 BSA | CUI
$211.1 million
$16.9 million
BSA provides nbn network activation and assurance
services in Victoria and New South Wales under a
new Unified Field Operations agreement.
Image: Buxtonography
Revenue
Underlying EBITDA
[FY2020: $270.9 million]
[FY2020: $21.0 million]
9
BSA LIMITED ANNUAL REPORT 2021 CEO REPORT
Advanced Property Solutions (APS)
BSA | APS
$211.4 million
Revenue
[FY2020: $215.6 million]
$9.4 million
Underlying EBITDA
[FY2020: $8.6 million]
WestConnex3A Tunnel - Cross Passages.
BSA are installing 714 deluge control
valves in 10 separate tunnels.
Image courtesy of WestConnex
In FY2021, BSA | Advanced Property Solutions (“APS”), significantly
a one-stop shop for maintenance and optimisation of all their facility’s
changed the structure of the business in order to build for future growth.
hard assets. Combined with this service capability and footprint, the
This included recruiting two regional General Managers with impressive
following new projects wins and completed projects will further support
records of profitable growth, and investing in additional sales resources.
building the installed base of service customers for APS.
This has resulted in a pipeline of future opportunities in excess of $1.0 billion.
APS’ full year revenue decreased by $4,167 thousand, due in large part to
the continued impact of the COVID-19 pandemic on our service business’
NEW CONSTRUCTIONS AND PROJECTS
• Caboolture Hospital, Lend Lease - Fire Detection and Suppression (QLD)
customers, especially in the tertiary education and retail sectors. At the
• CDC E4 Data Centre Eastern Creek, Hindmarsh - Fire Detection and
same time, full year EBITDA increased by $806 thousand which includes
Suppression (NSW)
JobKeeper support due to the reduced year on year revenues.
• Chadstone Shopping Centre, Hickory - Fire Detection/Suppression
We continued with new project and contract wins across the entire
and Mechanical (VIC)
business, including expanding our fire projects business into Victoria. The
• Kew Aquatic Centre, ADCO - Fire Detection/Suppression and Solar
division has also secured new key service customers in Telstra and CBA.
energy (VIC)
Operationally, we realised our investment in a new asset management
platform, BSA Lightning (supported by Salesforce), and rolled this out
• Sydney Football Stadium, John Holland - Fire Detection and
Suppression (NSW)
to all of our service businesses, totalling over 1,200 customers across
• Tweed Hospital, Lend Lease - Fire Detection and Suppression (QLD)
over 4,000 sites.
• Waterloo Metro, John Holland - Fire Detection and Suppression (NSW)
Key new clients and projects for the year are outlined below.
We have successfully completed various projects, including the following:
SERVICE CONTRACTS
• CBA Facilities, CBA - Multi-service (VIC/Southern NSW)
• Crown Towers Sydney, Crown Resorts - Fire Systems Service (NSW)
• Crown Towers Sydney, Crown Resorts/Lend Lease - Fire Detection
and Suppression (NSW)
• Wynyard Place, Multiplex - Fire Detection and Suppression (NSW)
• Telstra Land & Buildings, Telstra - Multi-service (VIC/TAS)
Looking forward, FY2022 will see us capitalise on the BSA Lightning
These new service contracts help to cement APS’ credentials as a true
multi-service provider nationally, being able to provide our customers with
platform to enable data driven asset management. This will allow APS
to provide services to our customers which reduce their overall costs, by
increasing equipment uptime and reducing reactive service requirements.
10
BSA LIMITED ANNUAL REPORT 2021 CEO REPORT
KEY AREAS OF FOCUS FOR FY2022 INCLUDE:
• Additional investment in sales and business
development resources
• Standardising service delivery processes across the
expanding installed base
• Expanding our Defence and Data Centre customer base
DISCLOSING NON-IFRS FINANCIAL INFORMATION
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA)*
Profit for the year from continuing
operations
Add back
Income tax expense
Net finance costs
Depreciation & amortisation expenses
EBITDA
Significant Items (see note B3)
FY2021
FY2020
$’000
$’000
1,479
7,802
1,250
2,091
10,921
15,741
7,381
3,055
1,756
10,375
22,988
2,892
Underlying EBITDA
23,122
25,880
* From continuing operations.
OUTLOOK & GROWTH
In February 2021, the Group committed to a target of $750 million
revenue with at least 5% EBITDA returns by FY2024 and we remain
committed to this.
Achieving the target will be through a combination of organic and
inorganic strategies. Our key criteria for inorganic growth are:
•
•
•
•
Alignment to BSA’s DNA through synergies,
Financially sensible and EPS accretive,
Diversification of clients, sectors with long-term growth
fundamentals, and
Meaningful scale and margins.
Business development continues to evolve to ensure that we pre-empt
our customer’s needs. Our core services offering of collaborating with our
customers to offer end-to-end asset lifecycle solutions has not changed
and we continue to refine and enhance our capabilities.
Our ability to use technology to drive improvements in delivery,
workforce engagement, end-customer experience and financial returns
is a fundamental piece of our organic strategy for FY2022 and beyond.
Unfortunately, COVID-19 remains a factor in our economy and will do
so until a new ‘norm’ is established. At BSA, we continue to monitor the
situation and its impacts, always keeping the safety of our workforce as
the number one priority.
Timothy Harris | CEO
BSA | Fire is John Holland’s chosen partner to design and construct the
Fire Life Safety Systems on the Sydney Football Stadium redevelopment.
Image courtesy of Sydney Football Stadium
11
BSA LIMITED ANNUAL REPORT 2021 DIRECTORS’ REPORT
THE BOARD OF DIRECTORS PRESENTS ITS REPORT
The Directors of BSA Limited (the ‘Company’) present their report on the Company and its subsidiaries (the ‘Group’ or ‘BSA’) for the financial year
ended 30 June 2021.
AS AT 30 JUNE 2021 AND AT REPORTING DATE
MICHAEL GIVONI
CHAIRMAN (NON-EXECUTIVE)
NICHOLAS YATES
NON-EXECUTIVE DIRECTOR
Mr Givoni has had extensive executive experience
Mr Yates graduated with a Bachelor of Engineering
in the business-to-business (B2B) areas of
commerce. His particular area of expertise is in
strategy, business development and mergers and
(Mechanical) from the University of Sydney and went
on to forge an extensive career in the construction,
building services and facilities management
acquisitions. Michael has held senior executive roles in listed companies
industries. Commencing as a site engineer overseeing mechanical services
including Spotless Group Limited. Prior to his executive career, Michael
installations, Nicholas then progressed through various management
was a partner in a prominent Melbourne legal practice. Michael joined
roles within Lend Lease and eventually moved on to become CEO of
BSA as a Non-executive Director on 23 March 2005 and was appointed as
APP Corporation Pty Limited, Australia’s leading Construction Project
Chairman from 29 April 2015. He holds a number of other Non-executive
Management consulting business. When APP was acquired by Transfield
Director and Chair roles in significant privately owned businesses
Services, Nicholas moved into a series of leadership roles within Transfield
including Winslow Group, RSEA, First5Minutes and Buzz Products.
Services, most recently Chief Executive Officer, Infrastructure ANZ. Nicholas
As at 30 June 2021 and at reporting date Michael is a member of the
Remuneration Committee and the Audit Committee and holds 1,687,853
shares in BSA (nil options or rights).
TIMOTHY HARRIS
MANAGING DIRECTOR AND CHIEF EXECUTIVE
OFFICER
Mr Harris has been with the company for over four
years and has driven a program of operational
excellence leading to steady increases in margin,
sits on the Boards of a number of listed and private companies. He was
appointed Managing Director and Chief Executive Officer of BSA Limited
on 13 March 2014 and retired from that position on 9 March 2020. Nicholas
remains on the Board as a Non-executive Director.
Nicholas was appointed as a Non-executive Director of Saunders
International Limited (ASX:SND) on 16 September 2020.
As at 30 June 2021 and at reporting date Nicholas is a member of
the Remuneration Committee and the Audit Committee and holds
4,253,483 shares in BSA (nil options or rights)
improving working capital performance and customer satisfaction.
Tim has also built a strong leadership team across both operations and
support areas that has set a platform for long term sustainable growth.
Tim has over 25 years experience in senior operational and finance roles
both domestically and internationally. Prior to joining BSA, Tim was Chief
Financial Officer of CPB (previously Leighton Contractors) and before that
held senior executive roles at Westfield, Brookfield and Transfield Services.
DAVID PRESCOTT
NON-EXECUTIVE DIRECTOR
Mr Prescott is the founder and Managing Director
of Lanyon Asset Management, a value-oriented
equities fund manager. He has over 20 years
investing and financial analysis experience working
for firms in Australia and the UK. David was previously Head of Equities
As at 30 June 2021 Tim held 550,831 shares in BSA and 751,274 rights over
at institutional fund manager, CP2 (formerly Capital Partners). David
shares in BSA (nil options). Since 30 June 2021 Tim has exercised 495,616
has an Economics degree from the University of Adelaide, a Graduate
rights into shares.
PAUL TEISSEIRE
NON-EXECUTIVE DIRECTOR
Mr Teisseire is a professional independent Non-
executive Director. He spent over 20 years in private
practice as a corporate lawyer specialising in
business and corporate law with a special interest in
Diploma in Applied Finance and Investment from the Securities Institute
of Australia (FINSIA) and is a CFA Charterholder. David was appointed
as a Non-executive Director on 3 June 2019.
As at 30 June 2021 and at reporting date David is the Chairman of the
Remuneration Committee and a member of the Audit Committee and
is the Managing Director of Lanyon Asset Management which holds
96,003,649 shares in BSA (nil options or rights).
corporate governance. He is a Non-executive Director and Audit Committee
Chairman of Drake Supermarkets Pty Limited and is a Non-executive board
member of Flinders Foundation Inc and a member of its Audit Committee.
Paul was appointed as a Non-executive Director on 23 March 2005.
As at 30 June 2021 and at reporting date Paul is a member of the
CHRISTOPHER HALIOS-LEWIS
NON-EXECUTIVE DIRECTOR
Mr Halios-Lewis has over 20 years accounting and
financial experience in auditing, public practice
and industry. He is currently Chief Financial Officer
Remuneration Committee and the Chairman of the Audit Committee and
and member of the executive team of the WIN
holds 680,012 shares in BSA (nil options or rights).
Group and Birketu Pty Limited. Christopher is heavily involved with
12
BSA LIMITED ANNUAL REPORT 2021
DIRECTORS’ REPORT
strategy and business development, sits on a number of Boards as a
consultancy firm The Linchpin Company. She is also a shareholder in the
director and is Company Secretary for all WIN and Birketu companies
marketing communications agency group Bastion Collective.
and Illawarra Community Foundation. Christopher is a member of the
Finance Committee of Free TV and director of Wollongong Wolves
Football Club. Before joining WIN, Christopher was Group Financial
Accountant at ASX listed Goodman Group. He graduated with a
Bachelor of Science Accounting degree with honours from University
of Wales, College, Cardiff in 1996 and having joined the audit team of
Deloitte in 1999, gained ACCA qualification in 2002. Christopher was
appointed as a Non-executive Director on 2 September 2019.
As at 30 June 2021 and at reporting date Christopher is a member of
the Remuneration Committee and the Audit Committee and is Chief
Financial Officer of Birketu Pty Limited which holds 73,175,760 shares
in BSA (nil options or rights).
MICHELLE COX
NON-EXECUTIVE DIRECTOR
(Appointed 30 July 2021)
Mrs Cox is a professional independent Non-
executive Director and has held executive
Implementing cultural and strategic change while improving bottom-line
results and motivating teams to peak performance are areas of particular
strength. Michelle is also an award winning author, podcast host and
ceramist - her creative endeavours found under the business called The
Wabi Sabi Series. Michelle has an Associate Diploma in Applied Science
(Victoria University) and is a Graduate of the Australian Institute of
Company Directors.
Upon her appointment as a Non-executive Director on 30 July 2021
and as at reporting date Michelle held nil shares, options or rights in
BSA and is a member of the Remuneration and Audit Committees.
MARK LOWE
NON-EXECUTIVE DIRECTOR
(Retired 25 November 2020)
Mr Lowe was appointed as a Director of BSA on 1
August 2007 upon completion of the acquisition
of the Triple ‘M’ Group. Mark brought a wealth of
knowledge to the Company from his 30 years’ experience in the installation
leadership roles in a variety of sectors with over 25
and maintenance of Air-Conditioning and Fire Protection Services. He is a
years experience. Michelle has multi-national experience in marketing,
former Director of Construction Information Systems Limited (NATSPEC)
communications, travel, tourism, hospitality and acquisitions. Previous
and a former National President of the Air-Conditioning Mechanical
appointments include Executive Director, Mergers and Acquisitions for
Contractors Association of Australia. Following his retirement from
Bastion Collective; Managing Director, Asia Pacific for STA Travel and
executive duties Mark was appointed a Non-executive Director on 2 March
General Manager Marketing for the APT Group.
2012 and retired from the Board on 25 November 2020.
Michelle is currently a Non-executive Director on the board of tourism
Prior to his retirement as a Non-executive Director on 25 November
adventure company Experience Co (ASX:EXP) (appointed 1 January
2020, Mark was the Chairman of the Remuneration Committee and a
2020), has held a Director role on the Board of Tourism Tasmania for the
member of the Audit Committee and held 10,315,403 shares in BSA
past six years and continues to be a shareholder in the tourism marketing
(nil options or rights) at his retirement.
DIRECTOR INDEPENDENCE
The Board considers three of BSA’s current Directors independent, as
defined under the guidelines of the ASX Corporate Governance Council,
being: Michael Givoni, Paul Teisseire and Michelle Cox. In addition, prior
to his retirement on 25 November 2020 Mark Lowe was considered an
independent director.
In assessing the independence of Directors, the Board follows the ASX
guidelines as set out in the Corporate Governance Statement on the
Company’s website.
PERFORMANCE OF DIRECTORS
In accordance with Principle 1.6 of the ASX Corporate Governance
Principles and Recommendations, the Board conducts a review of
the performance of its Directors and the Board’s function as a whole
each year. The evaluation of Directors is carried out in accordance
with the process established by the Board, led by the Chairman of the
Remuneration Committee.
COMPANY SECRETARY
Mr Graham Seppelt held the role as the Company’s Secretary for the
entire year and has had extensive experience as a contract accountant
and in corporate advisory roles. He is currently Company Secretary for
Erinbar Limited.
ENVIRONMENTAL REGULATION AND PERFORMANCE
BSA was not subject to any particular or significant environmental
regulations of the Commonwealth, individual states, or territories, during
the financial year.
CORPORATE GOVERNANCE
BSA continued to follow best practice recommendations as set out by the
ASX Corporate Governance Council. Where the Company has not followed
best practice for any recommendation, explanation is given in the Corporate
Governance Statement which is available on the Company’s website at
www.bsa.com.au/about/corporate-governance/.
REVIEW OF OPERATIONS
Information relating to the operations of BSA including a description
of principal activities, a review of operations, significant changes in
activities and affairs during the year and likely future developments and
prospects can be found in the Chairman’s Report and CEO’s Report on
pages 4 to 11.
BSA LIMITED ANNUAL REPORT 2021
1313
BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
CONTENTS - REMUNERATION REPORT
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Overview of the Remuneration Report
Remuneration governance
Remuneration policy
Incentive plan operation
Business Performance and At-risk Remuneration Outcomes
FY2021 at-risk remuneration outcomes
KMP service agreements
FY2021 Remuneration outcomes
Other Statutory disclosures
1.
OVERVIEW OF THE REMUNERATION REPORT
The Directors present the Remuneration Report for the Company and its controlled entities (the ‘Group’ or ’BSA’) for the year ended 30 June 2021
(‘FY2021’). This report forms part of the Directors’ Report and has been audited in accordance with section 308(3C) of the Corporations Act 2001
and Australian Accounting Standards. The report sets out the remuneration arrangements for the Group’s Key Management Personnel (‘KMP’),
comprising its Non-executive Directors (‘NED’), Chief Executive Officer (‘CEO’) and Chief Financial Officer (‘CFO’), who together have the authority and
responsibility for planning, directing and controlling the activities of the Group.
The KMP of BSA in FY2021 are listed below.
Name
Position
Term as KMP in FY2021
Non-executive Directors
Michael Givoni
Paul Teisseire
Nicholas Yates
David Prescott
Christopher Halios-Lewis
Michelle Cox
Mark Lowe
Executive Director
Timothy Harris
Group Executives
Arno Becker
Chair
Director
Director
Director
Director
Director
Director
Full year
Full year
Full year
Full year
Full year
Commenced 30 July 2021(1)
1 July 2020 to 25 November 2020
Chief Executive Officer
Full year
Chief Financial Officer
Full year
(1) Michelle commenced as a Director subsequent to 30 June 2021 and received no remuneration prior to commencement
For the remainder of this report the CEO and CFO are referred to as KMP.
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BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
2.
REMUNERATION GOVERNANCE
The remuneration of NED and KMP is ultimately approved by the Board. Recommendations for the
remuneration of NED and KMP is provided by the Remuneration Committee.
BOARD
REMUNERATION COMMITTEE
The Remuneration Committee is the key governing body with respect to remuneration matters
within the Group. It oversees NED, KMP and Group-wide remuneration quantum and structure. The
Corporate Governance Statement and the Remuneration Charter provides further information on the
role of this committee.
MANAGEMENT
Makes recommendations and provides relevant information to
the Remuneration Committee and undertakes work as directed
by the Remuneration Committee, including the use of external
advisers where appropriate.
EXTERNAL ADVISERS
The Remuneration Committee engages and considers advice
from independent remuneration consultants where appropriate
in relation to KMP remuneration matters and NED fees.
During the year, no remuneration recommendations as defined in section 9B of the Corporations Act 2001 were provided.
3.
REMUNERATION POLICY
As outlined in section 2 the Remuneration Committee oversees the structure and quantum of NED and KMP remuneration. Key principles involved in the
determination of structure and quantum of the NED and KMP framework are outlined below.
Principle
Application
Competitiveness and
reasonableness
NED remuneration reflects the demands that are made of the Directors and their responsibilities. The Chairman’s fees are
determined independently to the fees of other NEDs. All fees are based on the Director’s experience and comparative roles
in the external market. The Chairman is not present at any discussions relating to determination of his remuneration.
Shareholder alignment
by shareholders. The maximum currently stands at $600,000 per annum and was last approved by shareholders at the
Annual General Meeting (‘AGM’) on 26 November 2007. There has been no change to the aggregate fee pool for 14 years.
NED fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval
NED remuneration is not linked to the Group’s financial performance as variable remuneration is not consistent with the
Performance linkage of
principles of remuneration for those acting in a role of oversight and governance. NEDs receive fixed remuneration which
compensation
includes fees and statutory superannuation and are not eligible for any other retirement schemes or benefits. The NEDs
are entitled to participate in the Non-executive Director Fee Sacrifice Equity Plan (‘NED Plan’) as outlined in section 4.
Transparency
The current base remuneration for NED was last reviewed and determined on 26 June 2012, therefore there has been no
increase in the base remuneration paid to a Director for nine years. NED fees include the requirement to sit on at least
two Board committees for the duration of their tenure. A Director’s expected time commitment is a minimum ten hours
per month.
15
BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
Non-executive Director
Role
Chair
Other Non-executive Directors
Key Management Personnel
Fees
$
153,136
83,616
Superannuation
Total
$
14,548
7,944
$
167,684
91,560
The KMP, along with NEDs have the authority and responsibility for planning, directing and controlling the activities of the Group. The Group’s
remuneration framework for KMP reflects the following key principles:
Princple
Application
Competitiveness and
reasonableness
Remuneration structures and quantum are designed to address the following key drivers of competitiveness and
reasonableness:
• Rewards capability and experience: remuneration quantum and mix is reviewed from time to time for market
competitiveness given the nature of the roles and experience of the KMP’s undertaking those roles.
• Reflects competitive reward for contribution to financial performance: primary driver of target variable at-risk
remuneration is Group financial performance.
• Provides a clear structure for earning rewards: Key Performance Indicators (‘KPIs’) are clearly defined and
approved by the Remuneration Committee, with any variable at-risk reward paid (including any discretionary
award) approved by the Remuneration Committee.
• Provides recognition for contribution: Fixed Remuneration comprises 62% - 76% of KMP remuneration to reflect
baseline expectations of the role with target variable at-risk remuneration of between 24% - 38% in recognition of
expectations of strong performance against KPIs.
Remuneration structures and quantum are designed to address the following key drivers of shareholder alignment:
• Achievement of target financial profit as a core component of performance reward: payment of any variable at-
risk remuneration is based on a Group financial performance gateway.
Shareholder alignment
• Focusing each executive on key performance metrics relevant to the role: KPIs are clearly defined and approved
by the Remuneration Committee, with any variable at-risk reward paid (including any discretionary award)
approved by the Remuneration Committee.
• Attracts and retains high caliber executives: remuneration quantum and mix is reviewed from time to time for
market competitiveness given the nature of the roles and experience of the KMP’s undertaking those roles. In
addition, Deferred Incentives include retention requirements for up to three years from the commencement of the
financial year on which the at-risk variable reward is determined.
Remuneration structures and quantum are designed to address the following key drivers of performance linkage of
compensation:
• Achievement of target financial profit as a core component of performance reward: payment of any target
variable at-risk remuneration is based on a Group financial performance gateway.
Performance linkage of
compensation
• Focusing each executive on key performance metrics relevant to the role: KPIs are clearly defined and approved
by the Remuneration Committee, with any variable at-risk reward paid (including any discretionary award)
approved by the Remuneration Committee.
• Provides recognition for contribution: Fixed Remuneration comprises 62% - 76% of KMP remuneration to reflect
baseline expectations of role with target variable at-risk remuneration of between 24% - 38% in recognition of
expectations of strong performance against KPIs.
The Remuneration Report is disclosed in the Annual Report and is subject to a vote at the Group’s AGM. The FY2020
Remuneration Report received 98.7% affirmative votes at the 25 November 2020 AGM.
Transparency
16
BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
As a result of the above principles and framework the KMP target remuneration is as follows:
KMP Target Remuneration
CEO
62%
19%
19%
CFO
76%
12%
12%
-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Fixed
STI
Deferred Incentive
The components of KMP target remuneration are outlined below.
Component
Description
Fixed remuneration is structured as a total employment cost package which may be delivered as a combination of cash,
post-employment benefits (superannuation), and prescribed non-financial benefits at the KMP discretion. KMP are
Fixed
offered a base pay that is reviewed annually to ensure it is competitive with the market and reflects the responsibilities
of the position. There are no guaranteed base pay increases included in the KMP terms of employment. All KMP receive
statutory superannuation benefits which are included in their fixed remuneration.
KMP remuneration includes participation in the BSA Performance Reward Plan (‘PRP’), an incentive based on
achievement of KPIs across safety, financial, people and customer metrics for the Group. An Earnings Before Interest
and Tax (‘EBIT’) Gateway must be achieved to trigger payments under the plan to ensure variable at-risk reward is only
available when value has been created for shareholders. The Remuneration Committee is responsible for assessing
whether the targets are met. Targets are set at the beginning of each financial year and are set for the year. Incentive
payments are adjusted in line with actual performance versus target performance levels.
STI
The PRP incentive is comprised of two components:
• Short Term Incentive (‘STI’) which is paid to the KMP in cash after the final audited results on which the EBIT is
calculated have been released in the Annual Report, and
• Deferred Incentive, which is outlined below.
Actual outcomes of the PRP incentive plan operations are outlined in section 4.
To the extent an incentive is awarded to the KMP under the PRP outlined above, 50% of the incentive is paid in cash and the
remainder is awarded via a Deferred Incentive. This Deferred Incentive is subject to a service condition of 24 months (two
financial years after the end of the year in respect of which the award is calculated) I.e. for those incentives based on FY2021
performance, the KMP must remain employed by the Group until at least the end of FY2023 to receive the award.
The Deferred Incentive is primarily via an issue of Service Rights which convert to shares once the KMP has met the
service vesting conditions. These Service Rights are governed by the BSA Limited Rights Plan Rules. Under the Plan rules
the Remuneration Committee retains discretion to award the Deferred Incentive as either cash or as Service Rights.
Actual outcomes of the PRP incentive plan operations are outlined in section 4.
Deferred Incentive
The Remuneration Committee retains the ability to pay a discretionary award. With any award made under discretionary considerations outlined in
section 4.
17
BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
4.
INCENTIVE PLAN OPERATION
Employee Performance Rights Plan
The BSA Performance Reward Plan (‘PRP’) provides KMP the opportunity to earn an incentive that is contingent upon performance against a
combination of agreed financial and non-financial performance targets, which are set by the Board in consultation with the CEO at the start of each
financial year.
Feature
Delivery
Description
Delivered as a combination of cash (50%) and deferred equity (50%).
Performance period
Annual financial year, 1 July to 30 June the following year.
Eligibility
The KMP participate in the PRP. Various other senior management within the Group are also eligible for the PRP.
An Earnings Before Interest and Tax (‘EBIT’) Gateway must be achieved to trigger any payments under the PRP. These
metrics are as follows:
Threshold
Below 85% Group budgeted EBIT
85% Group budgeted EBIT
100% Group budgeted EBIT
136% Group budgeted EBIT
PRP bonus available (% of target available for assessment
against KMP KPIs)
0%
40%
100%
120%
Performance measures
Once the EBIT gateway is met and scaled as noted above, a participant’s individual PRP award is determined based on
individual KPIs. For both KMP these KPI are as follows:
KPI
CEO Weighting (%)
CFO Weighting (%)
Safety: site visits and inspections and incident deep dives
Financial: Group EBIT
Financial: Group EPS
Financial: Cash Conversion
People: Retention and engagement
Other project specific individual KPIs
10%
40%
10%
10%
10%
20%
10%
20%
-
15%
10%
45%
Target setting
Targets are set based upon Board approved budgets.
The PRP opportunities for KMP are outlined below:
Position
Below threshold
Threshold
(% Fixed Remuneration)
Reward opportunities
CEO
CFO
0%
0%
24%
12%
Target
60%
30%
Maximum
72%
36%
The above reward opportunity is split 50% cash paid within 4 months of the end of the financial year and 50% issued as
deferred Service Rights which vest into shares two financial years after the end of the year in respect of which the award
is calculated, subject to the KMP meeting the service vesting conditions.
Deferred Incentive vesting
criteria
The deferred Service Rights are conditional and only vest if the KMP remains employed by the Group up to and including
two financial years after the end of the year in respect of which the award is calculated (i.e. for FY2021 deferred service
rights the KMP is required to be employed up to and including 30 June 2023).
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BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
Feature
Description
Valuing deferred awards
volume weighted average price (‘VWAP’) of the Group’s ordinary shares over the 10 trading days subsequent to the
The number of Service Rights issued to participants is calculated by dividing 50% of the PRP award dollar value by the
release of the Annual Report for the relevant financial year on which the PRP outcomes was determined.
Board discretion
The Board may exercise discretion to adjust the PRP outcomes to more appropriately reflect the performance of the
Group. The Board also retains discretion to adjust vesting outcomes in any circumstances to ensure they are appropriate.
Non-executive Director Fee Sacrifice Equity Plan
The Non-executive Director Fee Sacrifice Equity Plan (‘NED Plan’) purpose is to:
•
facilitate the acquisition of equity in the Group by NEDs serving on the board because it provides NEDs with “skin in the game” and aligns
their interests with shareholders,
•
preserve the independence of NEDs by ensuring that NEDs participate in a separate equity plan from the employee BSA Limited Rights Plan
for which the NEDs set vesting conditions, and
•
overcome the challenges faced by NEDs in acquiring equity on-market due to governance and regulatory issues in a manner that is intended
to demonstrate good governance.
The NED Plan allows for eligible NEDs, subsequent to AGM approval, to sacrifice a portion of their NED fees for an equivalent number of deferred Rights
which covert into shares of the Group. The deferred Rights are issued within 30 days of the NED application and convert to shares 90 days after the
issue of the deferred Rights. The shares are held in the NEDs name and are restricted from trading until the earlier of 15 years from grant date or the
date the NED no longer serves on the Board of the Group.
As the NED Plan allows for the sacrifice of NED fixed remuneration for a fixed value of shares this plan is considered a type of fixed remuneration share-
based payment.
5.
BUSINESS PERFORMANCE AND AT-RISK REMUNERATION OUTCOMES
The charts below show the Group’s performance and percentage of Remuneration which was performance related in the five-year period ended
30 June 2021.
Net Profit
EBITDA
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
30.0%
30.0
25.0%
25.0
20.0%
20.0
15.0%
15.0
10.0%
10.0
5.0%
5.0
0.0%
-
FY2017
FY2018
FY2019
FY2020
FY2021
FY2017
FY2018
FY2019
FY2020
FY2021
Underlying NPAT ($'m)
Statutory NPAT ($'m)
Performance related bonuses (%)
Underlying EBITDA ($'m)
Statutory EBITDA ($'m)
Performance related bonuses (%)
EBITDA & NPAT Margins
Earnings per Share
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
3.5
3
2.5
2
1.5
1
0.5
0
FY2017
FY2018
FY2019
FY2020
FY2021
FY2017
FY2018
FY2019
FY2020
FY2021
Underlying EBITDA (% Revenue)
Underlying NPAT (% Revenue)
Performance related bonuses (%)
Underlying EPS (cps)
Statutory EPS (cps)
Performance related bonuses (%)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
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BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
Other Group performance metrics over the last five years were as follows:
Financial Year
FY2017
FY2018
FY2019
FY2020
FY2021
Closing Share Price ($)
Dividends declared per share (cents)
Performance related bonuses (%)
0.340
0.5
10.6%
0.305
0.5
15.6%
0.325
0.5
3.8%
0.325
1.0
25.8%
0.325
1.0
10.8%
•
•
•
Underlying and Statutory NPAT, EBITDA and Earnings per Share excludes the financial performance of discontinued HVAC Build operations.
Revenue from continuing operations excludes revenue from discontinued HVAC Build operations.
Performance related bonuses are calculated as: performance related cash and share-based payments as a percentage of total KMP
remuneration as disclosed in the Remuneration Report.
•
Closing share price 30 June 2016: $0.245.
As noted in the CEO Report FY2021 has been a year of securing a solid base of contracts for the future and optimisation and execution of those
contracts and our operations. The benefits of this work will be realised in FY2022 and onwards with limited impact on FY2021 performance. As a
result of this Underlying EPS has declined 25%. This decline in Underlying EPS; a key driver of shareholder value is reflected in the decline in KMP
at-risk remuneration paid, which has decreased from 25.8% in FY2020 to an estimated amount of 10.8% for FY2021.
6.
FY2021 AT-RISK REMUNERATION OUTCOMES
FY2021 PRP outcomes
As noted in Section 4 the PRP plan includes a Group EBIT Gateway whereby at least 85% of Budgeted EBIT must be achieved prior to the KMP’s
performance against their Board approved KPIs being assessed. In FY2021 the Group EBIT of $4,820 thousand was below the 85% threshold and
as such $nil was payable with all the PRP incentive forfeited.
FY2021 Other KMP incentive outcomes
KMP other incentive outcomes below are based on current estimates, with final remuneration decisions to be made in September 2021 in
accordance with the Group’s standard performance remuneration reward cycles.
As noted above the Group EBIT was below the 85% EBIT threshold, however it was noted that Underlying Group EBIT of $12,201 thousand would
result in KMP PRP rewards of 78% of target. To reflect this the Remuneration Report reflects an estimated discretionary incentive to the KMP for
25% of their target PRP outcome to be paid consistent with the mechanisms in the PRP (50% cash, 50% Deferred Incentive). All amounts not
paid as a discretionary incentive were forfeited. This incentive is reflected in the key remuneration tables as follows:
KMP
CEO
CFO
FY2021 incentive
Prior periods
Cash Bonus
Share-based payments(1)
Share-based payments(1)
52,500
13,125
17,500
4,375
50,588
(3,250)
(1) This is the portion of the share-based payment for which the three-year service condition has been met in FY2021.
FY2021 NED Plan outcomes
In FY2021 Michael Givoni (Chairman) salary sacrificed $70,000 of his Director’s fees under the NED Plan. He was in turn granted 226,025 deferred
Rights on 23 March 2021 which vested into restricted shares on 23 June 2021.
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BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
7.
KMP SERVICE AGREEMENTS
Rights Issued to NED and KMP
The following table outlines rights on issue to NED and KMP during the year:
Name
Agreement term
KMP notice
Group notice
Redundancy
Timothy Harris
Arno Becker
Permanent appointment
26 weeks
26 weeks
Amounts required under applicable law(1)
Permanent appointment
3 months
3 months
Amounts required under applicable law
(1) Additional 26 weeks’ severance payment if made redundant as a result of change of control.
In the event of cessation of employment, a KMP’s unvested PRP Deferred Incentive will ordinarily lapse if within the first twelve months of service
post issue of the Incentive, will vest in a pro-rata basis for the subsequent twelve month period and will not be forfeited if they are to be made
redundant. The intended vesting outlined above is subject to Board discretion which may be exercised in circumstances such as death, disability,
retirement, redundancy or special circumstances.
8.
FY2021 REMUNERATION OUTCOMES
FY2021
Short-term
Benefits
Post
Long-term
Share-based
Employment
Benefits
payments
Name
& Fees
Cash Bonus
Superannuation
Leave
Rights
Rights
Total
Related
Cash, Salary
Long Service
Performance
$
$
$
$
$
%
$
%
Non-executive Directors
Michael Givoni (1)
Paul Teisseire
Nicholas Yates
David Prescott
Christopher Halios-Lewis
Mark Lowe (2)
Other Key Management Personnel
Chief Executive Officer
Timothy Harris
Chief Financial Officer
Arno Becker
83,136
83,616
83,616
83,616
83,616
33,952
451,552
-
-
-
-
-
-
-
14,548
7,944
7,944
7,944
7,944
3,225
49,549
-
-
-
-
-
-
-
70,000
41.7%
167,684
-
-
-
-
-
-
-
-
-
-
91,560
91,560
91,560
91,560
37,177
70,000
12.3%
571,101
-
-
-
-
-
-
-
706,252
52,500
21,694
8,483
68,088
7.9%
857,017
14.1%
343,901
13,125
21,694
6,542
1,125
0.3%
386,387
3.7%
1,050,153
65,625
43,388
15,025
69,213
5.6% 1,243,404
10.8%
Total
1,501,705
65,625
92,937
15,025
139,213
7.7%
1,814,505
7.4%
(1) Mr Givoni’s NED Plan rights are not performance related but are the sacrifice of Director fees.
(2) Mr Lowe retired on 25 November 2020.
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BSA LIMITED ANNUAL REPORT 2021 REMUNERATION REPORT
FY2020
Short-term
Benefits
Post
Long-term
Employment
Benefits
Share-based
payments
Long
Name
& Fees
Bonus
Superannuation
Leave
Benefits
Rights
Rights
Total
Related
Cash, Salary
Cash
Service
Termination
Performance
$
$
$
$
$
$
%
$
%
Non-executive Directors
Michael Givoni (1)
Paul Teisseire
Mark Lowe
Nicholas Yates (2) (4)
David Prescott (3)
Christopher Halios-Lewis (2)
Graeme Barclay (5)
89,063
91,560
91,560
-
31,356
-
41,808
345,347
-
-
-
-
-
-
-
-
8,461
7,944
7,520
-
2,979
-
6,128
33,032
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,000
41.8%
167,524
-
-
-
-
-
-
-
-
-
-
-
-
99,504
99,080
-
34,335
-
47,936
70,000
15.6%
448,379
-
-
-
-
-
-
-
-
Other Key Management Personnel
Executive Director
Nicholas Yates (4)
Chief Executive Officer
356,356
247,285
21,003
3,559
394,749
-
-
1,022,952
24.2%
Timothy Harris (6)
590,037
177,669
21,003
9,701
-
95,406
10.7%
893,816
30.6%
Chief Financial Officer
Arno Becker (7)
90,047
-
8,258
1,960
-
-
-
100,265
-
1,036,440
424,954
50,264
15,220
394,749
95,406
4.7% 2,017,033
25.8%
Total
1,381,787
424,954
83,296
15,220
394,749
165,406
6.7% 2,465,412
21.1%
(1) Mr Givoni’s NED Plan rights are not performance related but are the sacrifice of Director fees.
(2) Mr Halios-Lewis and Mr Yates did not receive NED fees in FY2020, but commenced receiving them in FY2021.
(3) Mr Prescott commenced receiving NED fees in January 2020.
(4) Mr Yates transitioned from Chief Executive Officer to a Non-executive Director on 9 March 2020.
(5) Mr Barclay retired 15 December 2019.
(6) Mr Harris transitioned from Deputy Chief Executive Officer to Chief Executive Officer on 9 March 2020.
(7) Mr Becker commenced as Chief Financial Officer on 9 March 2020.
22
BSA LIMITED ANNUAL REPORT 2021
REMUNERATION REPORT
9.
OTHER STATUTORY DISCLOSURES
Movements in Rights
Movements in rights issued under the NED and PRP plans outlined in section 4 is presented below:
Name
Plan
Tranche Grant Date
Date
Expiry Date
2020
FY2021
FY2021
FY2021
Jun 2021
Vesting
at 30 Jun
in
Vested in
ed in
at 30
Balance
Granted
Forfeit-
Balance
Fair Value
per Right
at Grant
Date
Total
Fair
Value
Number
Number
Number
Number
Number
Number
Consolidated and parent entity
Michael Givoni
NED Plan
FY2021
23 Mar 2021
23 Jun 2021
23 Mar 2036
-
226,025
(226,025)
Timothy Harris
PRP Plan
FY2018
28 Jun 2019
30 Jun 2020
1 Mar 2034
175,440
Timothy Harris
PRP Plan
FY2019
27 Nov 2019
30 Jun 2021
27 Nov 2034
495,616
Timothy Harris
PRP Plan
FY2020
25 Nov 2020 30 Jun 2022
25 Nov 2035
255,658
Arno Becker
PRP Plan
FY2020
25 Nov 2020 30 Jun 2022
25 Nov 2035
63,941
Timothy Harris(1)(2)
PRP Plan
FY2021
Arno Becker (1)
PRP Plan
FY2021
TBA
TBA
30 Jun 2023
30 Jun 2023
TBA
TBA
-
-
-
-
-
-
-
-
(175,440)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.310
0.371
70,000
65,088
495,616
0.385
190,812
255,658
0.260
66,471
63,941
0.260
16,625
-
-
-
-
97,572
24,393
Total
990,655
226,025
(401,465)
-
815,215
530,961
(1) Service Rights for the FY2021 PRP Plan will be issued in FY2022 with the number of rights to be issued to be based upon the 10 day VWAP subsequent to the
release of the FY2021 Annual Report.
(2) Granting of Mr Harris’ FY2021 PRP is subject to AGM approval given his role as a Director.
Rights are granted over ordinary shares and nil is payable upon exercise.
Approval for securities under the NED Plan was obtained under Listing Rule 10.14.
Balance at 30
Jun 2020
Number
Rights
exercised
Number
Acquired
on-market
Other
Transactions
Balance at 30
Jun 2021
Balance at
Report Date
Number
Number
Number
Number
Movement in Shares
Name
Non-executive Directors
Michael Givoni (1)
Paul Teisseire
Nicholas Yates (4)
David Prescott (3)
Christopher Halios-Lewis (2)
1,461,828
680,012
4,200,958
-
-
226,025
-
-
-
-
-
Mark Lowe (5)
10,315,403
Key management personnel
Timothy Harris
Arno Becker
Total
375,391
175,440
-
-
17,033,592
401,465
-
-
-
-
-
-
-
-
-
-
-
1,687,853
1,687,853
680,012
680,012
52,525
4,253,483
4,253,483
-
-
(10,315,403)
-
-
-
-
-
-
-
-
550,831
550,831
-
-
(10,262,878)
7,172,179
17,487,582
(1) Includes 665,428 restricted ordinary shares issued under the NED Plan.
(2) Mr Halios-Lewis is the Chief Financial Officer of Birketu Pty Limited which holds 73,175,760 ordinary shares in BSA Limited.
(3) Mr Prescott is the Investment Manager of Lanyon Asset Management Pty Limited which holds 96,003,649 ordinary shares in BSA Limited.
(4) Other transactions includes shares issued under the Dividend Reinvestment Plan (‘DRP’).
(5) Retired 25 November 2020, other transactions represents his shareholding at retirement date.
Other Matters
Apart from the matters disclosed in the above no other transactions have been undertaken with NED or KMP or their related parties during the period.
End of Audited Remuneration Report
23
BSA LIMITED ANNUAL REPORT 2021
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The number of meetings of BSA’s Board of Directors and each Board committee held during the year ended 30 June 2021, and the number of
meetings attended by each Director were:
Board Meetings
Audit Committee Meetings
Remuneration Committee Meetings
Meetings
Attended during
tenure
Meetings Held
during tenure
Meetings
Attended during
tenure
Meetings Held
during tenure
Meetings
Attended during
tenure
Meetings Held
during tenure in
Michael Givoni
Timothy Harris
Paul Teisseire
Nicholas Yates
David Prescott
Christopher Halios-Lewis
Michelle Cox (1)
Mark Lowe (2)
14
14
13
13
14
14
-
7
14
14
14
14
14
14
-
7
2
-
2
2
2
2
-
2
2
-
2
2
2
2
-
2
2
-
2
2
2
2
-
1
2
-
2
2
2
2
-
1
(1) Commenced as a Non-executive Director on 30 July 2021.
(2) Retired as a Non-executive Director on 25 November 2020.
RETIREMENT, ELECTION AND CONTINUATION
IN OFFICE OF DIRECTORS
Directors are subject to retirement by rotation and election by
shareholders at a general meeting. No Director, other than the
Grant Type
Grant Date
Date of Expiry
Number
under Right
Fair value at
grant date
Managing Director, may remain on the Board for more than three
PRP Plan (SR)
27-Nov-19
26-Nov-34
37,092
years without re-election. Where a Director is appointed during
PRP Plan (SR)
1-Sep-20
31-Aug-35
143,369
the year, the Director will hold office until the next Annual General
Meeting (AGM) and then be eligible for election.
PRP Plan (SR)
25-Nov-20
24-Nov-35
1,088,365
Total
1,370,196
PRP Plan (PR)
27-Nov-19
26-Nov-34
101,370
0.385
0.385
0.270
0.260
INDEMNIFYING OFFICERS OR AUDITORS
During the year, the Company paid a premium for a contract insuring
all Directors, secretaries, Executive officers and officers of the
Company, and of each related body corporate of the Company. The
insurance does not provide cover for the independent auditors of the
Company, or of a related body corporate of the Company.
In accordance with usual commercial practice, the insurance contract
prohibits disclosure of details of the nature of the liabilities covered by
the insurance, the limit of indemnity and the amount of the premium
paid under the contract.
No liability has arisen under this indemnity as at the date of this report.
RIGHTS
As at the date of this report, the unissued ordinary shares of the
Company, under right, are as follows:
All of the above rights have a $nil exercise price. During the year ended
30 June 2021, 708,240 rights were exercised. Since 30 June 2021, 734,227
rights have been exercised. No person entitled to exercise the right had,
or has, any right by virtue of the right to participate in any share issue of
any other body corporate.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the court under section 237 of the Corporations
Act 2001 (Cth) for leave to bring proceedings on behalf of the Company,
or to intervene in any proceedings to which the Company is a party, for the
purpose of taking responsibility on behalf of the Company for all, or part, of
those proceedings.
NON AUDIT SERVICES
The Company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s expertise
and experience with the Group are important.
24
BSA LIMITED ANNUAL REPORT 2021 DIRECTORS’ REPORT
Details of the amounts paid or payable to the auditor (Deloitte
AUDITOR’S INDEPENDENCE DECLARATION
Touche Tohmatsu) for audit and non-audit services during the year
are set out below.
The lead auditor’s independence declaration for the year ended 30 June
2021 as required under section 307c of the Corporations Act 2001 (Cth)
The Board of Directors has considered the position and in accordance
has been received and can be found on page 25 of this report.
with the advice received from the Audit Committee, is satisfied that
the provision of non-audit services by the auditor, as set out below,
did not compromise the auditor independence requirements of the
ROUNDING OF AMOUNTS
Corporations Act 2001 (Cth) for the following reasons::
The Company is a company of the kind referred to in ASIC
•
All non-audit services have been reviewed by the Audit
Committee to ensure they do not impact the impartiality and
objectivity of the auditor, and
Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with that
Corporations Instrument amounts in the Directors’ Report and
the Financial Statements are rounded off to the nearest thousand
•
None of the services undermine the general principles
dollars, unless otherwise indicated.
relating to auditor independence as set out in Professional
Statement APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the auditors
own work, acting in a management or a decision making
capacity for the Company, acting as advocate for the
Company or jointly sharing economic risk and rewards.
Signed in accordance with a resolution of the Board of Directors.
AUDITOR’S REMUNERATION
Michael Givoni
Chairman
FY2021
FY2020
20 August 2021
$
$
Amounts due for the financial year to Deloitte Touche Tohmatsu for:
Auditing or reviewing the financial report
383,000
385,000
Taxation services
Other non-audit services
129,335
996,706
15,000
12,300
527,335
1,394,006
Fibre Splicer setting up 12F joint
for a Telstra wideband program.
Image courtesy of Buxtonography
25
BSA LIMITED ANNUAL REPORT 2021 AUDITOR’S INDEPENDENCE DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Phone: +61 2 9322 7000
www.deloitte.com.au
The Board of Directors
The Board of Directors
BSA Limited
BSA Limited
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
24 August 2020
20 August 2021
Dear Directors,
Auditor’s Independence Declaration to BSA Limited
Dear Directors,
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of BSA Limited.
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo BBSSAA LLiimmiitteedd
As lead audit partner for the audit of the consolidated financial report of BSA Limited for the year
ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
contraventions of:
declaration of independence to the directors of BSA Limited.
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
As lead audit partner for the audit of the consolidated financial report of BSA Limited for the year
ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
Yours sincerely
(ii) any applicable code of professional conduct in relation to the audit.
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
DELOITTE TOUCHE TOHMATSU
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
AG Collinson
Partner
Chartered Accountants
DELOITTE TOUCHE TOHMATSU
AG Collinson
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
26
BSA LIMITED ANNUAL REPORT 2021
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2021
BSA LIMITED ABN 50 088 412 748
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
A
B
C
D
E
F
A1
A2
B1
B2
B3
B4
B5
B6
C1
C2
C3
C4
C5
D1
D2
D3
D4
E1
E2
E3
E4
F1
F2
Company information
Key considerations
Segment information
Revenue and other income
Other operating expenses
Income tax
Earnings Per Share
Cash flow information
Trade and other receivables
Trade and other payables
Property, plant and equipment
Intangible assets
Provisions
Financial liabilities
Equity
Contingent liabilities
Financial risk management
Group companies
Business combinations
Parent entity financial information
Related party transactions
Share-based payments
Other accounting policies
28
29
30
31
32
32
33
34
36
38
39
40
41
42
43
45
47
48
49
51
52
56
57
59
60
61
63
27
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
BSA LIMITED ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Revenue
Other income
Subcontractors and raw materials used
Employee benefits expense
Depreciation and amortisation expense
Finance costs
Other expenses
Profit before income tax
Income tax expense
Profit for the year from continuing operations, after tax
Profit/(loss) from discontinued operation, after tax
Profit/(loss)for the period
Other comprehensive income for the year, net of tax
Total comprehensive income for the period
Earnings per share from continuing operations
Basic earnings per share
Diluted earnings per share
Note
B2
B2
B4
B5
B5
2021
$’000
2020
$’000
418,346
486,107
4,200
(320,918)
(52,741)
(10,921)
(2,091)
(33,146)
2,729
(1,250)
1,479
-
1,479
-
1,479
428
(367,917)
(57,334)
(10,375)
(1,762)
(38,290)
10,857
(3,055)
7,802
(8,762)
(960)
-
(960)
0.341 cents
0.340 cents
1.811 cents
1.805 cents
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
28
BSA LIMITED ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
Profit reserve
Share-based payment reserve
TOTAL EQUITY
Note
C1
B2
C3
C4
B4
C2
B2
D1
D1
C5
C2
D1
C5
D2
2021
$’000
12,821
66,611
8,010
1,450
88,892
11,053
25,658
5,454
42,165
131,057
61,001
9,628
-
4,473
847
12,526
88,475
1,210
4,745
6,663
12,618
101,093
29,964
100,861
(74,368)
2,044
1,427
29,964
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2020
$’000
37,742
57,570
3,550
1,748
100,610
18,824
20,407
7,611
46,842
147,452
73,495
2,482
2,116
5,384
1,582
13,854
98,913
-
8,966
7,285
16,251
115,164
32,288
100,390
(74,368)
4,898
1,368
32,288
29
BSA LIMITED ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 JUNE 2021
Attributable to owners of BSA Limited Consolidated
Note
Issued
Accumulated
Capital
$’000
Losses
$’000
Profit
Reserve
$’000
Share-based
Payment
Reserve
$’000
Total
Equity
$’000
Balance at 1 July 2019
98,894
(73,408)
9,204
1,868
36,558
Loss for the period
Total comprehensive income for the period
-
-
(960)
(960)
-
-
-
-
(960)
(960)
Transactions with owners in their capacity
as owners:
Dividends provided for or paid
Issue of shares
Share-based payment expense
D2
D2
598
898
-
1,496
-
-
-
-
(4,306)
-
-
(4,306)
-
(898)
398
(500)
(3,708)
-
398
(3,310)
Balance at 30 June 2020
100,390
(74,368)
4,898
1,368
32,288
Attributable to owners of BSA Limited Consolidated
Note
Issued
Accumulated
Capital
$’000
Losses
$’000
Profit
Reserve
$’000
Share-based
Payment
Reserve
$’000
Total
Equity
$’000
Balance at 1 July 2020
100,390
(74,368)
4,898
1,368
32,288
Profit for the period
Total comprehensive income for the period
Transactions with owners in their capacity
as owners:
Dividends provided for or paid
Issue of shares
Share-based payment expense
Transfers between reserves
D2
D2
F1
-
-
70
292
-
109
471
-
-
-
-
-
-
-
1,479
1,479
-
-
1,479
1,479
(4,333)
-
-
-
(4,333)
-
(167)
335
(109)
59
(4,263)
125
335
-
(3,803)
Balance at 30 June 2021
100,861
(74,368)
2,044
1,427
29,964
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
30
BSA LIMITED ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities:
Receipts from customers
Payments to suppliers and employees
Net interest paid
Income taxes paid
Net cash (outflow) / inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Payments for acquisition of subsidiary
Payments discontinued operations
Proceeds discontinued operations
Proceeds from sale of property, plant and equipment
Net cash (outflow) from investing activities
Cash flows from financing activities:
Proceeds from borrowings
Proceeds from repayments of executive loans
Repayments of borrowings
Principle elements of lease payments
Dividends paid to company's shareholders
Net cash (outflow) from financing activities
Note
B6
C3
C4
C3
D2
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2021
$'000
441,395
(444,100)
(1,050)
(833)
(4,588)
(1,636)
(5,094)
(1,493)
-
-
2,892
(5,331)
5,161
4
(5,910)
(7,909)
(6,348)
(15,002)
(24,921)
37,742
12,821
Consolidated
2020
$'000
536,514
(503,342)
(1,231)
(656)
31,285
(2,974)
(7,389)
-
(4,415)
4,400
181
(10,197)
3,156
359
(2,806)
(4,373)
(1,623)
(5,287)
15,801
21,941
37,742
31
BSA LIMITED ANNUAL REPORT 2021
A
NOTES TO THE FINANCIAL STATEMENTS
ABOUT THIS REPORT
A1. COMPANY INFORMATION
BSA Limited (‘the Company’) and its controlled entities (‘BSA’ or ‘the Group’) is an Australian Securities Exchange (ASX) listed Company whose principal
activities are focused on providing services across communications and utilities infrastructure and property solutions. BSA is the ultimate parent company of
the Group and is a for-profit listed company limited by shares, incorporated and domiciled in Australia.
The Company’s principal place of business and registered office is Level 7, 3 Thomas Holt Drive, Macquarie Park NSW, 2113.
Financial statement characteristics
The financial statements have been approved and authorised for issue by the Board of Directors on 20 August 2021.
The financial statements are general purpose financial statements that:
• have 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),
•
include the assets and liabilities of all subsidiaries of the Company as at 30 June 2021 and the results of the subsidiaries for the year then ended. Inter-
entity transactions with, or between subsidiaries are eliminated in full on consolidation,
• have been prepared on a historical cost basis, and
• are measured and presented in Australian dollars which is the Company’s functional and presentation currency with all values rounded to the nearest
thousand dollars unless otherwise stated, in accordance with ASIC Legislative Instrument 2016/191.
Subsequent events
On 20 August 2021, the Director’s declared a dividend of 0.50 cents per share.
Other than as detailed above, the Directors are not aware of any significant events since the end of the reporting period.
A2. KEY CONSIDERATIONS
In preparing financial reports certain judgements and estimates have been made by the Group. The material estimates and judgments applied in preparing the
financial report are outlined in detail in the following notes:
Note
B2 Revenue
Key judgement or estimate
Estimates of the costs to complete construction contracts
B3 Other Operating Costs
The impact of COVID-19 on the Group’s financial position and performance
C4 Intangible Assets
Recognition of Software development on services not located on the Group’s servers as Intangible Assets
E2 Business Combinations
Deferred consideration payable and identified intangible assets recognised on the date of acquisition
32
BSA LIMITED ANNUAL REPORT 2021 B
NOTES TO THE FINANCIAL STATEMENTS
BUSINESS PERFORMANCE
B1 SEGMENT INFORMATION
Description of segments
The Group has two operating segments based upon the products and services offered by business units within each segment. The Group presents the below
financial information to the Board of Directors on a monthly basis. The Group’s reportable segments are as follows:
•
•
BSA | Communications & Utility Infrastructure (CUI): provides services to the telecommunications, subscription television and utility
industries. This includes the delivery of bundled services over fixed line and wireless networks, the installation of subscription television
and the installation of smart meters,
BSA | Advanced Property Solutions (APS): provides the design, installation, maintenance, and optimisation of building services for
all hard assets in facilities and infrastructure, including: Fire Detection and Suppression, Mechanical Services, Heating, Ventilation, Air
Conditioning, Refrigeration, Electrical, and Building Management Systems, and
•
Other: corporate support services provided across the Group.
Segment performance is disclosed below.
Revenue and other income
Segment Profit/Loss
Year Ended
Year Ended
Communications & Utility Infrastructure
Advanced Property Solutions
Other
Revenue and underlying EBITDA results
Significant items (see note B3)
Reported EBITDA
Depreciation and amortisation expense
Earnings before interest and tax (EBIT)
Finance costs
Profit before tax from continuing operations
Income tax expense - continuing operations
Profit after tax from continuing operations
2021
$’000
211,157
211,389
-
422,546
2020
$’000
270,979
215,556
-
486,535
2021
$’000
16,961
9,368
(3,207)
23,122
(7,381)
15,741
(10,921)
4,820
(2,091)
2,729
(1,250)
1,479
2020
$’000
21,047
8,562
(3,729)
25,880
(2,892)
22,988
(10,375)
12,613
(1,756)
10,857
(3,055)
7,802
The Group has a number of customers to whom it provides both products and services. The Group supplies a single external customer in the CUI segment who
accounts for 33% of external revenue (2020: 39%). The Group's next most significant customer is in the CUI segment and accounts for 9% of external revenue
(2020: 7%).
33
BSA LIMITED ANNUAL REPORT 2021 B
BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
B2. REVENUE
Key Estimates and Judgements: Revenue Recognition
Recognition of construction contract revenue and contract assets and liabilities involve the following key judgements and estimates:
• management estimates of the costs incurred to date as a percentage of the total costs required to complete the prescribed construction contract, this
is used to determine the stage of completion and accordingly recognise revenue on that basis,
• modifications to the scope of the construction contract are recognised when the Group has an enforceable right to payment, revenue in relation to
claims and variations is only included in the total contract value when the amount claimable becomes highly probable. Management uses judgement in
determining whether an approved enforceable right exists, and
• Determining the amount of variable consideration requires an estimate based on either the “expected value” or the “most likely amount”. The estimate
of variable consideration can only be recognised to the extent it is highly probable that a significant revenue reversal will not occur in the future.
Significant changes in the above estimates and judgements could have a material impact on the financial performance and position of the Group.
Revenue
Other income(1)
Total Revenue
2021
$'000
418,346
4,200
Consolidated
2020
$'000
486,107
428
422,546
486,535
(1) Other income includes $3,084 thousand (2020: $nil) in relation to the gain on the surrender of right-of-use assets over the Figtree rental premises and sale and
leaseback profit of $854 thousand (2020: $nil). See note F2 for further information on the sale and leaseback.
Assets and liabilities related to contracts with customers
The group has recognised the following assets and liabilities related to contracts with customers:
Current contract assets
Current contract liabilities
2021
$'000
8,010
(9,628)
Consolidated
2020
$'000
3,550
(2,482)
Net contract assets/(liabilities)
(1,618)
1,068
Revenue recognised in relation to contract liabilities
Revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period was $1,654 thousand (2020: $1,974
thousand). There was no revenue recognised in the current reporting period that related to performance obligations that were satisfied in a prior year.
Accounting Policy
Revenue is measured at the fair value of the consideration received or receivable. The revenue is recognised when a customer obtains control of the goods or
services. Determining the timing of the transfer of control and the fair value of consideration receivable requires judgement.
Classification and recognition
Maintenance revenue
The Group performs maintenance services for a variety of different industries. This revenue stream is recognised on a basis consistent with when the related
services are provided to the customer. Customers are in general invoiced on a monthly basis for an amount that is calculated on either a schedule of rates or a cost
plus basis that are aligned with the stand alone selling prices for each performance obligation. Payment is received following invoice on normal commercial terms.
34
BSA LIMITED ANNUAL REPORT 2021 BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
B
Installation revenue
The benefits from this category of work type do not transfer to the customer until the completion of the installation and as such revenue is recognised upon
completion. Customers are in general invoiced on a monthly basis for an amount that is calculated on either a schedule of rates or a cost plus basis that are
aligned with the stand alone selling prices for each performance obligation. Payment is received following invoice on normal commercial terms.
Construction revenue
The Group provides the design and installation of building services for commercial and industrial buildings including mechanical services, air conditioning, heating
and ventilation, refrigeration and fire services. Contracts entered into may be for the construction of one or several separate inter-linked pieces of large infrastructure.
The construction of each individual piece of infrastructure is generally taken to be one performance obligation. Where contracts are entered for the building of several
projects the total transaction price is allocated across each project based on relative stand-alone selling prices. The transaction price is normally fixed at the start of the
project. It is normal practice for contracts to include bonus and penalty elements based on timely construction or other performance criteria (variable consideration).
The performance obligation is fulfilled over time and as such revenue is recognised over time. As work is performed on the assets being constructed they are
controlled by the customer and have no alternative use to the Group, with the Group having a right to payment for performance to date. Generally, contracts
identify various inter-linked activities required in the construction process. Revenue is recognised on an input basis. Revenue earned is typically invoiced monthly
or in some cases on achievement of milestones or to match major capital outlay. Invoices are paid on normal commercial terms, which may include the customer
withholding a retention amount until finalisation of the construction. Certain construction projects entered into receive payment prior to work being performed in
which case revenue is deferred and recognised as a contract liability on the statement of financial position.
Other income
Primarily relates to gains on sales of property, plant and equipment or right-of-use assets. These gains are recognised as income when control of the underlying
asset is transferred to the counterparty.
Measurement
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to
a customer. For each contract with a customer, the Group: identifies the relevant contract with the customer; identifies the performance obligations in the contract;
determines the transaction price, which takes into account estimates of variable consideration and the time value of money (excluding credit risk); allocates the
transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicters the transfer to the customer of the goods or services promised.
Variable consideration
It is common for contracts to include performance bonuses or penalties assessed against the timeliness or cost effectiveness of work completed or other
performance related KPIs. Where consideration in respect of a contract is variable, the expected value of revenue is recognised when the uncertainty associated
with the variable consideration is highly probable of being resolved. The Group assesses the constraint requirements on a periodic basis when estimating the
variable consideration to be included in the transaction price.
The estimate is based on all available information including historic performance. Where modifications in design or contract requirements are entered into, the
transaction price is updated to reflect these. Where the price of the modification has not been confirmed, an estimate is made of the amount of revenue to
recognise whilst also considering the constraint requirement.
Contract Assets and Liabilities
When the contract value recognised to date (revenue less costs incurred) is greater than progress billings to the customer, the surplus is shown as Contract assets
on the statement of financial performance. For contracts where progress billings exceed the contract value recognised to date, the surplus is shown as Contract
liabilities on the statement of financial performance. Amounts billed for work performed but not yet paid by the customer are included in the statement of financial
position as trade receivables.
Contract fulfilment costs
Costs incurred prior to the commencement of a contract may arise due to mobilisation/site setup costs, feasibility studies, environmental impact studies and
preliminary design activities as these are costs incurred to fulfil a contract. Where these costs are expected to be recovered, they are capitalised and amortised
over the course of the contract consistent with the transfer of service to the customer. Where the costs, or a portion of these costs, are reimbursed by the
customer, the amount received is recognised as deferred revenue and allocated to the performance obligations within the contract and recognised as revenue
over the course of the contract.
Loss making contracts
A provision is made for the difference between the expected cost of fulfilling a contract and the expected unearned portion of the transaction price where the
forecast costs are greater than the forecast revenue.
35
BSA LIMITED ANNUAL REPORT 2021 B
BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
B3. OTHER OPERATING EXPENSES
Key Estimates and Judgements: COVID-19 impact
On 27 February 2020, the Australian government declared COVID-19 a national pandemic. The Governor General of Australia on 18 March 2020 soon after
declared COVID-19 a Human Biosecurity Emergency. Governmental measures aimed at suppressing the transmission of coronavirus in Australia have had a
consequential impact on economic activity generally across the markets in which the Group conducts business in both the 2020 and 2021 financial years.
The impacts of COVID-19 and related relief packages are as follows:
• Government grants, in the form of JobKeeper wage subsidies of $11,261 thousand (2020: $3,890 thousand) have been recognised in the 2021
financial year in accordance with government guidelines to maintain the Group’s workforce.
• As reflected in the changes in trade and other payables in note B6 Commonwealth and State government initiatives aimed at alleviating cash
flow pressures, including the deferment of indirect tax payments applied to the Group during the 2020 financial year. The Group deferred $14,340
thousand of payments in 2020, with $13,740 of these being repaid in the 2021 financial year. The remaining $600 thousand were repaid early in the
2022 financial year.
• As reflected in note C1, the assessment of expected credit losses included a consideration of the possible implications that COVID-19 may have on
customer’s ability to pay.
• As outlined in note C4, the assessment of the recoverable value of goodwill included a consideration of the possible implications that COVID-19 may
have on future economic value of the relevant cash-generating unit.
The operations of the Group demonstrate a high degree of resilience due to the sizeable proportion of the business that qualify as an essential service.
Significant changes in the above judgements could have a material impact on the financial performance and position of the Group.
Significant Items
Profit for the period includes the following items:
Legal and professional fees relating to legacy issues
Business reorganisation and restructure costs
Acquisition related costs
Total significant items
Discontinued operations
FY2021 includes $nil associated with discontinued operations (FY2020: $8,762 thousand).
2021
$’000
2,775
4,244
362
7,381
Consolidated
2020
$’000
2,892
-
-
2,892
36
BSA LIMITED ANNUAL REPORT 2021
BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
B
COVID-19 impact
Employee benefits expense has been reduced by $11,261 thousand in FY2021 to reflect government assistance received (JobKeeper wage subsidy) in
accordance with government guidelines to maintain BSA's workforce.
Commonwealth and State government initiatives aimed at alleviating cash flow pressures, including the deferment of indirect tax payments, have applied to
BSA during FY2021. The JobKeeper government assistance received in FY2020 totaling $3,890 thousand was reclassified as a reduction in employee benefits
expense in the FY2020 comparative information presented. In addition $2,665 thousand disclosed as cash receipts from government assistance in 2020 have
been reclassified as a reduction in payments to suppliers and employees.
Government assistance received is primary comprised of the JobKeeper wage subsidy and has been utilised to ensure employees can be retained during
uncertain operational conditions. The Group has continued to ensure suitable health and safety protocols are in place with suitable working condition
amendments made for all employees.
In March 2020 to June 2020, the group utilised COVID-19 payment deferral measures made available by government agencies to navigate near-term
uncertainties. These are being progressively repaid with $13,740 thousand of deferred payments paid to tax authorities in FY2021 and $600 thousand repaid
early in the 2022 financial year.
While there has been a number of delays and restricted capacity considerations in the construction sector, the Group considers that our products and services
are likely to be in high demand once certainty returns and client spend patterns return to normal levels and as a consequence of infrastructure spending
announced by federal and state governments.
Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, BSA Limited, its related practices and non-
related audit firms:
2021
$
Consolidated
2020
$
Audit and review of financial reports
383,000
385,000
Other services
Tax services
Other
Total services provided
The auditor of the group is Deloitte Touche Tohmatsu.
Accounting Policy
Government grants
129,335
15,000
527,335
996,706
12,300
1,394,006
JobKeeper government grants are recognised as a reduction in the employee expenses for which the grants are intended to compensate. Grant amounts are
recognised in profit or loss when the grant amount is known and the Group has confirmed it has complied with the conditions attached to the grant.
Significant items
Significant items are amounts incurred in the financial period which are significant in size and nature and relate to factors that are either not expected to be
incurred in future periods or are not related to core on-going operational activities of the Group.
Discontinued operations
Discontinued operations are a major line of business (HVAC Build) that has been disposed of in FY2019. No discontinued operations costs have been incurred in
FY2021.
37
BSA LIMITED ANNUAL REPORT 2021 B
BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
B4. INCOME TAX
Income tax expense
Income tax expense is attributable to:
Profit from continuing operations
Loss from discontinued operation
Total income tax expense
Reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Profit from discontinued operation before income tax expense
Profit/(Loss) before income tax expense
Tax using the Group's statutory tax rate
Adjusted for:
Prior year underprovision
Non-deductible goodwill disposal
Non-deductible share-based payment
Other
Income tax expense
Deferred tax balances
The balance comprises temporary differences attributable to:
Employee benefits
Provisions and accruals
Intangible assets
Other
Net deferred tax assets
38
2021
$’000
1,250
-
1,250
2021
$’000
2,729
-
2,729
819
236
-
101
94
1,250
2021
$’000
3,420
2,763
(649)
(80)
5,454
Consolidated
2020
$’000
3,055
(2,176)
879
Consolidated
2020
$’000
10,857
(10,938)
(81)
(24)
-
1,199
100
(396)
879
Consolidated
2020
$’000
3,413
4,553
(118)
(237)
7,611
BSA LIMITED ANNUAL REPORT 2021
BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
B
Accounting Policy
Income tax expense comprises current and deferred income tax. It is recognised in profit or loss except to the extent that it relates to a business combination or
items that are recognised directly in equity. Calculation of tax is based on tax rates and tax laws that are in place at the reporting date.
Tax consolidated group
The Company and all of its subsidiaries as outlined in note Group structure have formed an income tax consolidated group under the tax consolidation regime.
The head entity within that tax consolidated group is the Company. Consequently, the Group is taxed as a single entity and the deferred tax assets and liabilities
of these entities are offset in the consolidated financial statements.
Current tax
Current tax liabilities are taxation obligations to the Australian Taxation Office that are unpaid at the reporting date. Current tax is payable on taxable profit,
which differs from profit or loss in the consolidated financial statements (accounting profit).
Deferred tax
Deferred tax assets and liabilities are recognised where there is a difference in timing between the accounting recognition of the asset or liability and the tax
timing of the same asset or liability. This method is used for all differences between tax and accounting basis except for:
•
initial recognition of goodwill, or
•
if the transaction has no impact on accounting or taxable profit.
In addition, a deferred tax liability is not recognised if the reversal of the difference is under the control of the Group, it relates to investments in subsidiaries or
associates and the Group does not intend to take any action to trigger a change in ownership of the subsidiary or associate in the foreseeable future.
Deferred tax assets are recognised up to the value that it is probable that there will be sufficient taxable profits in future years to offset the asset reversals; this
is based on forecasts the Group’s future taxable profits and the timing of the reversal of the temporary differences. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised, such reductions are reversed when the
probability of future taxable profits improves.
Deferred tax liabilities are always provided for in full. Deferred tax assets and liabilities are offset only when the Group has the legal ability and intent to settle
these amounts on a net basis with the same taxation authority.
B5. EARNINGS PER SHARE
(a) Basic earnings per share
From continuing operations
From discontinued operations
Total basic earnings per share
(b) Diluted earnings per share
From continuing operations
From discontinued operations
Total diluted earnings per share
2021
Cents
0.341
-
0.341
2021
Cents
0.340
-
0.340
Consolidated
2020
Cents
1.811
(2.033)
(0.222)
Consolidated
2020
Cents
1.805
(2.027)
(0.222)
39
BSA LIMITED ANNUAL REPORT 2021 B
BUSINESS PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2021
(c) Weighted average number of shares used as the denominator
2021
Number
Consolidated
2020
Number
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
433,213,060
430,911,121
Adjustments for calculation of diluted earnings per share:
Performance rights outstanding
Weighted average number of ordinary and potential ordinary shares used as the denominator
in calculating diluted earnings per share
1,697,612
1,434,964
434,910,672
432,346,085
B6. CASH FLOW INFORMATION
Cash generated from operations
Profit/(loss) for the period
Adjustments for:
Depreciation and amortisation
Derecognition of goodwill on sale of business
Share-based payments
Net (gain)/loss on sale of non-current assets
Interest on ROU liabilities
Payments recognised in equity
Change in operating assets and liabilities
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease/(increase) in deferred tax assets
Decrease/(increase) in other operating assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in other operating liabilities
Increase/(decrease) in current tax liabilities
Increase/(decrease) in other provisions
2021
$'000
1,479
10,921
-
335
(1,116)
1,335
(60)
(9,041)
298
2,157
(4,460)
(12,494)
7,897
(735)
(1,104)
Consolidated
2020
$'000
(960)
10,375
4,000
398
(412)
524
1
7,424
(750)
1,371
3,583
(10,997)
13,140
(1,224)
4,813
Net cash generated by operating activities
(4,588)
31,286
40
BSA LIMITED ANNUAL REPORT 2021 C
NOTES TO THE FINANCIAL STATEMENTS
OPERATING ASSETS AND LIABILITIES
C1. TRADE AND OTHER RECEIVABLES
The Group’s Trade and other receivables are presented below.
Current assets
Trade receivables
Expected credit losses
Total trade receivables
Accrued revenue
Other receivables
Prepayments
Executive share plan receivables
Total other receivables
2021
$'000
47,767
(1,538)
46,229
16,390
1,038
2,591
363
20,382
Consolidated
2020
$'000
41,289
(2,096)
39,193
16,475
-
1,535
367
18,377
Total trade and other receivables
66,611
57,570
Expected Credit Losses
The average credit period for the Group is 30 days (2020: 32 days). No interest is charged on overdue receivables. Before accepting a new customer, the Group
uses an external credit scoring system to assess the potential customer's credit quality and defines credit limits by customer.
Age analysis of trade receivables that are past due but not impaired at the reporting date is outlined below.
More than 30
More than 60
More than 90
Current
days past due
days past due
days past due
$’000
$’000
$’000
$’000
FY2021
Gross carrying amount – trade receivables
Loss allowance
FY2020
Gross carrying amount – trade receivables
Loss allowance
33,836
(742)
31,984
(363)
8,158
(226)
3,911
(161)
Consolidated
Total
$’000
47,767
(1,538)
2,440
(54)
3,333
(516)
1,968
(19)
3,425
(1,553)
41,289
(2,096)
41
BSA LIMITED ANNUAL REPORT 2021
C
OPERATING ASSETS AND LIABILITIES
FOR THE YEAR ENDED 30 JUNE 2021
The loss allowances for trade receivables reconcile to the opening loss allowances as follows:
Opening loss allowance
Increase in loan loss allowance recognised in profit or loss during the year
Receivables written off during the year as uncollectible
Unused amount reversed
Closing loss allowance
2021
$'000
2,096
258
(53)
(763)
Consolidated
2020
$'000
1,705
699
(308)
-
1,538
2,096
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group
and a failure to make contractual payments for a period of greater than 90 days past due.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts
previously written off are credited against the same line item.
Accounting Policy
Trade receivables and expected credit losses
See accounting policy in note D4.
Accrued revenue
Accrued revenue represents amounts receivable from customers for which all revenue recognition obligations have been met but an invoice is yet to be raised.
Accrued revenue is based on the expected invoice amount to be raised for the services completed.
C2. TRADE AND OTHER PAYABLES
Current liabilities
Trade payables
Other payables
Deferred consideration for the acquistion of Catalyst ONE
Note
E2
2021
$'000
26,645
33,300
1,056
Consolidated
2020
$'000
21,810
51,685
-
61,001
73,495
Non-current liabilities
Deferred consideration for the acquistion of Catalyst ONE
E2
1,210
1,210
-
-
Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of current trade and other payables are considered to
be the same as their fair values, due to their short-term nature. Non-current other payables are recognised at amortised cost and are discounted based on the
interest rate implicit in the arrangement.
42
BSA LIMITED ANNUAL REPORT 2021 OPERATING ASSETS AND LIABILITIES
FOR THE YEAR ENDED 30 JUNE 2021
C
Accounting Policy
Trade payables
See accounting policy in note D4.
Other payables
Primarily comprised of accrued expenses which represents amounts payable to suppliers for which all expense recognition criteria have been met but an
invoice is yet to be received. Accrued expenses are based on the expected invoice amount to be received.
C3. PROPERTY, PLANT AND EQUIPMENT
Leasehold
Land and
Improve-
Plant &
Right-of-use
Right-of-use
Assets Under
Buildings
ments
Equipment
vehicles
premises
Construction
Non-current
$’000
$’000
$’000
$’000
$’000
$'000
Year ended 30 June 2020
Opening net book amount
Additions
Disposals
Transfers
Depreciation charge
Initial adoption of AASB 16
Closing net book amount
At 30 June 2020
Cost or fair value
Accumulated depreciation
Net book amount (1)
Year ended 30 June 2021
542
-
-
-
(16)
-
526
663
(137)
526
1,649
1,108
-
-
7,393
1,714
3,618
745
(1,792)
(2,894)
166
(1,718)
(3,770)
-
1,039
-
3,711
-
(1,176)
5,976
6,269
6,697
35,676
(5,658)
(31,965)
1,039
3,711
15,254
(8,985)
6,269
Opening net book amount
526
1,039
Acquisition of subsidiary
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2021
Cost or fair value
Accumulated depreciation
Net book amount
-
-
-
(17)
509
663
(154)
509
3,711
111
839
(16)
6,269
-
785
(855)
-
7
-
(490)
(2,408)
(2,663)
556
2,237
3,536
4,602
27,722
(4,046)
(25,485)
556
2,237
11,559
(8,023)
3,536
509
2,817
(216)
-
(2,015)
6,113
7,208
9,968
(2,760)
7,208
7,208
-
602
(283)
(3,312)
4,215
10,570
(6,355)
4,215
166
71
-
(166)
-
-
71
71
-
71
71
-
-
(71)
-
-
-
-
-
Consolidated
Total
$’000
13,877
6,455
(4,902)
-
(8,695)
12,089
18,824
68,329
(49,505)
18,824
18,824
111
2,233
(1,225)
(8,890)
11,053
55,116
(44,063)
11,053
(1) Plant & Equipment accumulated depreciation was adjusted through a $1,804 thousand transfer from software accumulated amortisation in the 2020 comparative
information presented.
43
BSA LIMITED ANNUAL REPORT 2021
C
OPERATING ASSETS AND LIABILITIES
FOR THE YEAR ENDED 30 JUNE 2021
Accounting Policy
Property, Plant and Equipment
Land and Buildings, Leasehold Improvements and Plant & Equipment are recognised at the cost of the asset less accumulated depreciation.
Right-of-use Assets
Right-of-use assets are initially measured with reference to the value determined for the associated right-of-use liability (refer note D1), less direct costs and any
lease incentives. Expected end of lease costs such as make good are included in the right-of-use asset value determined at lease inception.
Throughout the lease term (including extended terms where judged appropriate), right-of-use assets are depreciated and periodically assessed for impairment.
Depreciation begins when control of the leased asset by the Group occurs up until the date when control ends. In the event of changes to the lease, the right-
of-use asset is remeasured with reference to the remeasurement of the right-of-use liability.
Expected useful lives
The expected useful life and depreciation methods used are listed below.
Asset
Land
Buildings
Leasehold Improvements
Plant & Equipment
Right-of-use vehicles
Right-of-use property
Assets Under Construction
Useful life
n/a
25 years
4 to 5 years
3 to 10 years
3 to 5 years
1 to 5 years
Depreciation method
n/a
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line
To be determined
To be determined
Depreciation is recognised so as to write off the cost (other than freehold land) less their residual values over their useful lives, using the straight-line method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.
Right-of-use assets are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that
ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of
the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in profit or loss.
Impairment
Property, Plant and Equipment is tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs of disposal and value in use within its cash generating unit.
44
BSA LIMITED ANNUAL REPORT 2021 OPERATING ASSETS AND LIABILITIES
FOR THE YEAR ENDED 30 JUNE 2021
C
C4. INTANGIBLE ASSETS
Key Estimates and Judgements:
The Group has a large number of software assets, these operate in various states including on in-house servers, on designated third party servers and in cloud
computing environments. A number of these software assets relate to the integration, interfacing and bespoke customisation of additional capability of cloud-
based computer 'Software as a Service' (SaaS) arrangements. These integration, interfacing and customisation costs incurred provide significant operational
and financial benefits to the Group, and as such are recognised as an intangible asset. The judgements over the nature of these assets and the benefits
they provide are key to their classification as intangible assets. At 30 June 2021, a carrying amount of $10,400 thousand (2020: $5,809 thousand) has been
recognised as intangible assets with respect to SaaS arrangements.
In April 2021 the IFRS Interpretations Committee (‘IFRIC’) released an agenda decision clarifying its interpretation of how current accounting standards apply to
SaaS arrangements. Due the nature and timing of the IFRIC decision and the complexity of historical SaaS projects, the Group is still in the process of obtaining
the required information to analyse the impact on the Group in respect of these SaaS arrangements. As the historical analysis of SaaS projects is completed
over the coming months potential derecognitions of amounts previously capitalised may occur. The restatement of the accounting policy and quantum of any
derecognitions will presented in the financial report for the half-year ending 31 December 2021.
Significant changes in the above judgements; including the application of the Group’s revised accounting policy to SaaS projects currently capitalised as
software assets could have a material impact on the financial performance and position of the Group
At 30 June 2020
Cost
Accumulated amortisation and impairment
Net book amount(1)
Year ended 30 June 2021
Opening net book amount
Additions
Acquisition of business
Amortisation charge
Transfers
Closing net book amount
At 30 June 2021
Cost
Accumulated amortisation and impairment
Net book amount
Software
assets under
Customer
lists and
Goodwill
construction
Software
contracts
$’000
$’000
$’000
$’000
Total
$’000
52,721
(41,536)
11,185
11,185
-
75
-
-
11,260
1,691
-
1,691
1,691
4,680
-
-
(4,771)
1,600
11,260
1,600
-
-
11,260
1,600
7,994
(855)
7,139
10,079
72,485
(9,687)
(52,078)
392
20,407
7,139
392
20,407
-
-
(1,273)
4,771
10,637
12,765
(2,128)
10,637
-
2,527
(758)
-
4,680
2,602
(2,031)
-
2,161
25,658
12,606
79,767
(10,445)
(54,109)
2,161
25,658
(1) Software accumulated amortisation totalling $1,804 thousand was transferred into accumulated depreciation under plant & equipment in the 2020 comparative
information presented.
45
BSA LIMITED ANNUAL REPORT 2021 C
OPERATING ASSETS AND LIABILITIES
FOR THE YEAR ENDED 30 JUNE 2021
Goodwill impairment assessment
Goodwill is not amortised but assessed for impairment at least once a year (and when there is evidence of impairment). The Group uses the Fair Value Less
Costs to Sell (FVLCTS) to determine the amount which the business could be sold for (less sale related expenses). This FVLCTS amount is then compared to the
carrying amount of assets to determine if there is any impairment.
Impairment testing is completed at a cash generating unit (CGU) level, which is the lowest level at which the Group generates discrete and separate cash
inflows and outflows. Goodwill is allocated to the following CGUs:
Segment
APS
CUI
CGU
APS - Fire Build
CUI
2021
$’000
11,185
75
2020
$’000
11,185
-
The assessment of impairment of goodwill FVLCTS models include the following considerations:
• EBITDA forecast and expected EBITDA multiples incorporate the impact of the ongoing COVID-19 pandemic into the assumptions,
• EBITDA for the CGUs are broadly consistent with the 30 June 2022 financial year budgeted EBITDA, and
• EBITDA multiples for arm’s length transactions of businesses similar in size and nature to the CGUs within recent financial periods.
The resulting FVLCTS models are consistent with level 3 instruments in the fair value hierarchy. No reasonably possible changes would unfavourably impact the
models to the extent that the related goodwill would be impaired.
Accounting Policy
Goodwill
Goodwill arising on the acquisition of subsidiaries has an infinite useful life and is measured at cost less accumulated impairment losses. On disposal of a
business unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal
Other intangible assets
Other intangible assets, including software and customer lists and contracts are acquired or developed by the Group and have finite useful lives are measured at
cost less accumulated amortisation and any accumulated impairment losses.
Impairment
Other intangible assets including software and customer lists and contracts are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use.
Expected useful lives
The expected useful life and amortisation methods used are listed below.
Asset
Goodwill
Software
Customer lists and contracts
Software assets under construction
Useful life
indefinite
2 to 8 years
1 to 9.5 years
Amortisation method
n/a
Straight-line
Straight-line
To be determined
To be determined
Amortisation methods and useful lives are reviewed at each reporting date and adjusted if appropriate.
In June 2020 the Group launched significant software systems as part of the on-going strategy to use technology to drive delivery excellence, improve margins,
increase client/customer experience and transform workforce management and deployment. As part of this deployment the estimated useful lives of a number
of software assets have been revised; with the updated useful lives reflected in 2021. Core software assets are expected to have useful lives of up to 8 years
(previously 2 – 5 years). This revision has reduced the Group’s amortisation expense by $825 thousand in the financial year ended 30 June 2021.
46
BSA LIMITED ANNUAL REPORT 2021 OPERATING ASSETS AND LIABILITIES
FOR THE YEAR ENDED 30 JUNE 2021
C
C5. PROVISIONS
Employee benefits
Other provisions
Movements in other provisions in the current financial year are as follows:
2021
Current
Non-current
$’000
$’000
10,017
2,509
12,526
1,381
5,282
6,663
Total
$’000
11,398
7,791
19,189
2020
Current
Non-current
Total
$’000
$’000
$’000
10,114
3,740
13,854
1,261
11,375
6,024
9,764
7,285
21,139
Office of
Make good
Onerous
Contract
Restructuring
State Revenue
provision
Leases
Provisions
provision
Total
$’000
$’000
$’000
$’000
$’000
$’000
Consolidated
1,328
1,518
1,806
-
-
-
(1,328)
-
13
-
-
-
1,531
-
-
-
(940)
866
5,112
-
1,210
(2,231)
(551)
3,540
-
-
9,764
-
1,854
3,077
-
-
(2,231)
(2,819)
1,854
7,791
Carrying amount at start of year
Charged/(credited) to profit or loss
- additional provisions recognised
- unused amounts reversed
Amounts used during the year
Carrying amount at end of year
Other provisions relate to the following matters:
Provision
Matter
Office of State Revenue
A legacy NSW payroll tax issue which has been fully paid in the current year in accordance with the agreed repayment plan.
Make good provision
Estimated costs required to restore lease properties to a contractually defined condition at the end of the lease term.
The remaining contractual costs over the lease term for under utilised leased premises space with the sale of the HVAC Build
business in 2019.
The expected cost of obligations under various construction contracts recognised at the Directors' best estimate of the
expenditure to settle the Group's obligation.
The expected costs associated with organisational change restructures. These amounts primarily relate to headcount
changes, with all affected employees notified prior to 30 June 2021.
Onerous leases
Contract provisions
Restructuring provision
Accounting Policy
Employee benefit liabilities
Employee benefits are included in current provisions at their face value if the Group expects to settle it within the next twelve months. Employee benefits
payable later than one year are included in non-current provisions and have been measured at the present value of the estimated future cash outflows to be
made for those benefits. The present value is determined using market yields on high quality corporate bonds with terms to maturity that match the expected
timing of employee benefit cash flows.
Other provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be
required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
47
BSA LIMITED ANNUAL REPORT 2021 D
NOTES TO THE FINANCIAL STATEMENTS
CAPITAL AND FINANCING STRUCTURE
D1. FINANCIAL LIABILITIES
Borrowings
Current borrowings
Total borrowings
Assets pledged as security
The carrying amounts of assets pledged as security for borrowings are:
Current
Cash and cash equivalents
Receivables
Inventories
Total current assets pledged as security
Non-current
Property, plant and equipment
Deferred tax assets
Total non-current assets pledged as security
Total assets pledged as security
Lease Liabilities
Current
Non-current
Note
C1
C3
B4
2021
$'000
-
-
2021
$'000
12,821
47,767
1,450
62,038
11,053
5,454
16,507
78,545
2021
$'000
4,473
4,745
9,218
Consolidated
2020
$'000
2,116
2,116
Consolidated
2020
$'000
37,742
41,288
1,748
80,778
18,824
7,611
26,435
107,213
Consolidated
2020
$'000
5,384
8,966
14,350
At 30 June 2021, there were $921 thousand (2020: $2,906 thousand) of finance and hire purchase liabilities as determined under the accounting standard AASB
117 leases that applied prior to 1 July 2019.
Lease liabilities are effectively secured as the rights to the assets revert to the financier in the event of default. Interest rates for lease liabilities outstanding
during the year ranged between 4.47% and 5.97%.
48
BSA LIMITED ANNUAL REPORT 2021 CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
D
Accounting Policy
Borrowings
See accounting policy in note D4.
Lease liabilities
Initial recognition
Initially lease liabilities are measured as the present value of future lease payments discounted using the interest rate implicit in the lease or if that is not known
then rate at which the Group could borrow similar cashflows over a similar term. Determination of future lease payments includes consideration of the impact of
lease incentives (such as rent free periods), incremental increases during the lease term (such as CPI or fixed lease rate increases), lease extension options (where
reasonably certain that will occur) and residual value guarantees expected to be paid.
Certain leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. Where practicable,
the Group seeks to include extension options (by the Group not the lessor) in new leases to provide operational flexibility. The Group has assessed at lease
commencement whether it is reasonably certain to exercise the extension options, and where it is reasonably certain, the extension period has been included in
the lease liability.
Subsequent measurement
Over the lease term, payments made by the Group to the lessor reduce the liability balance while applicable interest is recognised as interest expense and increases
the liability balance.
Lease liabilities are re-assessed and remeasured in line with the initial recognition criteria above when substantive elements of the lease change. These elements
can include changes to the lease term through exercise or otherwise of lease extension options or significant variations to amounts payable under the lease.
Periodically, the Group reassesses whether it is reasonably certain that extension options will be exercised if there is a significant event or change in circumstances.
D2. EQUITY
Issued Capital
Movements in the Group’s issued capital are outlines below:
Opening balance 1 July 2019
Dividend reinvestment plan issues
Exercise of performance rights
Exercise of Non-executive Director rights
Balance at 30 June 2020
Dividend reinvestment plan issues
Exercise of performance rights
Transfers between reserves
Exercise of Non-executive Director rights
Balance at 30 June 2021
Number of
shares
(thousands)
Consolidated
Total
$'000
428,241
98,894
1,230
2,182
206
528
898
70
431,859
100,390
522
482
537
226
135
157
109
70
433,626
100,861
The Group’s issued capital is wholly comprised of ordinary shares. These ordinary shares entitle the holder to participate in dividends and the proceeds on
winding up of the Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to
one vote.
No options are held over the Group’s issued capital, with share-based payments rights in relation to the Group’s issued capital outlined in note F1.
49
BSA LIMITED ANNUAL REPORT 2021 CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
D
Dividends
Dividends paid
Final dividend
Interim dividend
2021
$'000
2,166
2,167
Consolidated
2020
$'000
2,152
2,154
Total dividends provided for or paid
4,333
4,306
The 30 June 2019 financial year interim dividend of 0.50 cents per share was distributed on 8 July 2020 (recognised in 2020 however distribution was
deferred due to economic uncertainty as a result of COVID-19). $2,092 thousand was paid as cash with the remaining $69 thousand settled via the dividend
reinvestment plan.
The fully franked dividend for the financial year ended 30 June 2020 of 0.50 cents per share was distributed on 3 November 2020.
Dividends not recognised at the end of the period
In addition to the above dividends, since year end the directors have recommended the payment of a final dividend of 0.50 cents per fully paid ordinary share
(2020: 0.50 cents). The aggregate amount of the proposed dividend of $2,170 thousand (2020: $2,163 thousand) is expected to be paid on 3 November 2021
out of retained earnings at 30 June 2021.
Dividend reinvestment plan
The Group has a Dividend Reinvestment Plan (DRP) in place and has been utilised as follows:
DRP shares issued
DRP per share
DRP dividend payment
Dividend
Number (thousands)
FY2021 interim dividend (April 2021)
FY2020 final dividend (November 2020)
FY2020 interim dividend (July 2020)
FY2019 final dividend (November 2019)
85
191
246
1,230
$
0.29
0.27
0.28
0.43
$’000
25
51
69
528
In the prior year, the distribution resulted in $1,624 thousand being paid in cash and $528 thousand being raised by the DRP through the issue of 1,230 thousand
securities at $0.43 in November 2019.
Franking credits
The final dividend recommended after 30 June 2021 will be fully franked utilising existing franking credits. As at 30 June 2021 based on the current tax rates of
30% the Group has $11,735 thousand franking credits available for future dividends (2020: $12,533 thousand).
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for franking credits and debits that
will arise from the settlement of liabilities or receivables for income tax and dividends after the end of the year.
50
BSA LIMITED ANNUAL REPORT 2021 CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
D
Capital Management
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a
combination of capital growth and distributions. In order to achieve this objective, the Group seeks to maintain a gearing ratio that balances risks and returns at
an acceptable level and also to maintain a sufficient funding base to enable the Group to meet its working capital and strategic investment needs.
In making decisions to adjust its capital structure to achieve these aims, either through altering its dividend policy, new share issues or the reduction of debt,
the Group considers not only its short-term position but also its long-term operational and strategic objectives.
It is the Group’s policy to review its gearing ratio to ensure adequate funds are available to meet its obligations. The Group’s gearing ratio at reporting date is
shown below:
Net (cash)/debt
Total equity
Gearing ratio
2021
$'000
(11,900)
29,964
Consolidated
2020
$'000
(32,720)
32,288
(39.7)%
(101.3)%
Net (cash)/debt excludes right-of-use lease liabilities and includes debt classified as finance lease liabilities had the legacy accounting standard AASB 117
Leases been applied.
Gearing levels were maintained at a healthy position. It is the Board's intention to monitor gearing levels going forward to ensure flexibility. There have been no
changes to the Group's capital management objectives, policies and processes in the year nor has there been any change in what the Group considers to be its
capital
D3. CONTINGENT LIABILITIES
The group had contingent liabilities at 30 June 2021 in respect of:
Matter
Description
Bank guarantees and Insurance bonds
SE for guarantees issued to various clients for satisfactory contract performance, secured by cross guarantees
Established in favour of National Australia Bank, the Commonwealth Bank of Australia and Swiss Re International
Independent contractors class action
from all wholly owned group members amounting to $32,923 thousand (2020: $33,405 thousand).
On 10 August 2020, the Group was served with a class action proceeding in relation to its contracting
arrangements, specifically with independent contractors and whether they are properly classified as such. It is
not possible to determine the ultimate impact, if any, of the proceedings on the Group. The Group continues to
vigorously defend the proceedings.
Claims against the Group
in the ordinary course of business. In addition, the Group has an on-going matter with SafeWork NSW which it is
Certain claims, including those arising out of construction contracts, have been made by, or against, the Group
defending accordingly.
The Directors do not consider the outcome of any of these claims will be materially different to the position taken in the financial accounts of the Group.
51
BSA LIMITED ANNUAL REPORT 2021 D
CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
D4. FINANCIAL RISK MANAGEMENT
General objectives, policies and processes
In common with all other businesses, the Group is exposed to financial risks that arise. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or
the methods used to measure them from previous periods unless otherwise stated in this note.
The Board has overall responsibility for the determination of the Group’s risk management objectives and polices and, whilst retaining ultimate responsibility
for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the
Group's finance function. The Group's risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the
results of the Group where such impacts may be material. The Board receives monthly reports from the Finance Department through which it reviews the
effectiveness of the processes put in place and the objectives and policies it sets. The overall objective of the Board is to set policies that seek to reduce risk as
far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below.
Credit Risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the Group incurring a financial loss. This
usually occurs when debtors fail to settle their obligations owing to the Group.
Trade receivables consist of a large number of customers. The Group does not have significant credit risk exposure to any single counterparty or group of
counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities.
Included in trade receivables, the most significant customer accounts for 5.8% of trade receivables at balance date (2020: 6.6%).
BSA only trades in Australia, as such the maximum exposure to credit risk at balance date on a country level is limited to Australia.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management
framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity
risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and
by matching the maturity profiles of financial assets and liabilities. The table below sets out details of additional undrawn facilities that the Group has at its
disposal to further reduce liquidity risk.
52
BSA LIMITED ANNUAL REPORT 2021 CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
Financing arrangements
The following financing facilities were available at balance date:
Credit stand-by arrangements
Borrowing Base Facility
Facility Limit
Used
Unused
Cash Advance Facility
Facility Limit
Used
Unused
Master Asset Finance Facility
Facility Limit
Used
Unused
2021
$'000
37,500
-
37,500
6,000
-
6,000
921
(921)
-
D
Consolidated
2020
$'000
37,500
-
37,500
6,000
-
6,000
3,050
(2,909)
141
Total unused facilities at balance date
43,500
43,641
In addition to the above arrangements the group has bank guarantee facilities of $26,500 thousand (2020: $26,500 thousand) of which $15,703 thousand
(2020: $14,664 thousand) was utilised.
In addition to the above facilities the group has a surety bond facility with Swiss Re International SE of $20,000 thousand (2020: $30,000 thousand) which was
utilised to $17,220 thousand (2020: $18,741 thousand).
The following table details the Group's remaining contractual maturity for its financial liabilities with agreed repayment periods. The table has been drawn
up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both
interest and principal cash flows. To the extent that interest flows are at floating rate, the undiscounted amount is derived from interest rate curves at the end of
the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay.
53
BSA LIMITED ANNUAL REPORT 2021 D
CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
Carrying
Contractual
Amount
Cash Flows
< 6 mths
6-12 mths
1-3 years
> 3 years
$’000
$’000
$’000
$’000
$’000
$’000
Consolidated
26,645
26,645
26,645
-
9,218
35,863
21,810
2,116
14,350
38,276
-
10,047
36,692
21,810
2,116
15,426
39,352
-
2,862
29,507
21,810
2,116
2,705
26,631
-
-
2,400
2,400
-
-
2,705
2,705
-
-
4,519
4,519
-
-
10,015
10,015
-
-
266
266
-
-
-
30 June 2021
Trade payables
Borrowings
Lease liabilities
Total
30 June 2020
Trade payables
Borrowings
Lease liabilities
Total
Accounting Policy
Classification of financial instruments
The Group classifies its financial instruments as follows:
Category
AASB 9 Classification
Cash and cash equivalents
Trade receivables
Net other receivables
Trade and other payables
Borrowings
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Recognition and measurement
Under AASB 9 Financial Instruments, a financial asset shall be measured at amortised cost; Fair Value through Profit & Loss (FVTPL); or Fair Value through
Other Comprehensive Income (FVOCI) as classification of financial assets is generally based on the business model in which a financial asset is managed and
its contractual cash flow characteristics. Measurement of financial liabilities are also based on the business model and are classified and measured either at
amortised cost or FVTPL.
Subsequent measurement
54
BSA LIMITED ANNUAL REPORT 2021
CAPITAL AND FINANCING STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
D
Category
Measurement
Financial assets at FVTPL
Financial assets at FVOCI
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognised in profit or loss.
These assets are subsequently measured at fair value. Net gains and losses are recognised in other comprehensive
income, except for interest or dividend income, which are recognised in profit or loss.
These assets are subsequently measured at amortised cost using the effective interest method. The amortised
Financial assets at amortised cost
cost is reduced by impairment losses. Interest income and impairment are recognised in profit or loss. Any gain or
loss on derecognition is recognised in profit or loss.
Financial liabilities at amortised cost
These liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense
is recognised in profit or loss with any gain or loss on derecognition is recognised in profit or loss.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument,
to the net carrying amount on initial recognition.
Derecognition
Financial assets are derecognised when the rights to the cashflows associated with the asset have expired. Financial liabilities are derecognised when the
cashflows associated with the liability have been repaid or expired. Any gain or loss on derecognition (being the difference between the carrying value and the
consideration received, if any) is recognised in profit or loss.
Impairment
Impairment requirements use an Expected Credit Loss (‘ECL’) model under which credit losses are recognised earlier than incurred. The impairment model
applies to financial assets measured at amortised cost and contract assets. The Group measures loss allowances at an amount equal to lifetime ECLs for all
applicable assets. The Group considers amortised cost financial assets with the counterparty being ‘investment grade’ to have low credit risk when its credit risk
rating is equivalent to be AA- or higher per Standard & Poor’s.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses with the key exposure being in relation to trade receivables and contract assets. ECLs for trade
receivables and contract assets are determined after considering specific provisions against the financial asset and uses an expected loss percentage
from recorded historic credit losses for that specific population. The key disaggregation of the balances is between those that are with investment grade
counterparties and the age of the financial asset outstanding in 30-day tranches up to more than 121 days overdue. These expected loss percentages are then
modified for forward-looking economic factors, such as the impact of the COVID-19 pandemic. The Group exercises considerable judgement about how the
forward-looking economic factors impact each tranche independently, and applies a premium as deemed appropriate to adjust the historically determined
default rates to present the total expected credit losses on the current balances.
Presentation of impairment
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
55
BSA LIMITED ANNUAL REPORT 2021 E
NOTES TO THE FINANCIAL STATEMENTS
GROUP STRUCTURE
E1. GROUP COMPANIES
Controlled entities
The Group’s subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held
directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. All entities in the Group are registered in and
have their principal place of business in Australia.
Ownership interest held by the group (%)
2021
2020
Name of entity
BSA Advanced Property Solutions (ACT) Pty Ltd
BSA Advanced Property Solutions (Administration) Pty Ltd
BSA Advanced Property Solutions (ECR) Pty Ltd
BSA Advanced Property Solutions (Essential Services) Pty Ltd
BSA Advanced Property Solutions (FIRE) Pty Ltd
BSA Advanced Property Solutions (Holdings) Pty Ltd
BSA Advanced Property Solutions (NSW & ACT) Pty Ltd
BSA Advanced Property Solutions (NSW) Pty Ltd
BSA Advanced Property Solutions (NT) Pty Ltd
BSA Advanced Property Solutions (VIC) Pty Ltd
BSA Advanced Property Solutions Australia Pty Ltd (formerly BSA
Advanced Property Solutions (WA) Pty Ltd
Triple M Group Pty Ltd
066 059 809 Pty Ltd
ACN 085 921 615 Pty Ltd
BSA Equity Plans Pty Ltd
BSA Networks Pty Ltd
BSA Transmission Solutions Pty Ltd
Mr Broadband Pty Ltd
Satellite Receiving Systems (QLD) Pty Ltd
Catalyst ONE Pty Ltd
Jamik (AUS) Pty Ltd
BSA Communications and Utility Infrastructure Pty Ltd
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
Deed of cross guarantee
All controlled entities are parties to the Deed of Cross Guarantee and are members of the Closed Group, where relief is obtained from preparing individual
financial reports under ASIC Instrument 2016/785. Under the deed, BSA Limited agrees to support the liabilities and obligations of the controlled entities.
56
BSA LIMITED ANNUAL REPORT 2021 GROUP STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
E
Accounting policy
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control
is achieved when the Company:
• has power over the investee,
•
is exposed, or has rights, to variable returns from its involvement with the investee, and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements
of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other
comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
The parent entity carries its investment in subsidiaries at cost less impairment (if any).
E2. BUSINESS COMBINATION
Key judgement - Fair value of assets acquired
When the Group obtains control over a new acquisition (acquiree) it is required to determine the value of assets and liabilities it has acquired. This value is
based upon assessment of the fair value of the rights and obligations transferred to the Group and involves estimates and judgements in relation to the:
• date control was obtained over the acquiree by the Group (acquisition date),
•
the acquisition price paid, including any non-cash, contingent or deferred consideration,
• assets and liabilities already recognised by the acquiree,
• amounts recognised by the acquiree and whether they are representative of the fair value of the assets and liabilities, and
•
fair value of assets and liabilities not previously recognised including internally generated intangible assets.
These factors are complex and the determination of key assumptions requires a high degree of judgement. In the case of large or complex business
combinations, external specialists are used to assist in determining the fair value of assets and liabilities resulting from the business combination.
If new information obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date, identified adjustments
to the fair value, then the amounts recognised as at the acquisition date are retrospectively revised.
Acquisition of Catalyst ONE
Effective 22 December 2020, the Group acquired 100% of the issued shares in Catalyst ONE Pty Ltd and its wholly owned subsidiary Jamik (AUS) Pty Limited
(Catalyst ONE), for $3,600 thousand net consideration which includes contingent consideration of between $nil and $2,108 thousand payable as 75% cash and
25% variable equity.
The contingent consideration is based on the achievement of agreed EBITDA targets over a one- and two-year period and is payable in March 2022 and March
2023. Based on current provisional accounting assessments the full $2,108 thousand of contingent consideration is expected to be paid.
Catalyst ONE provides integrated project solutions and infrastructure services across the Wireless Telecommunications market. The acquisition provides the
Group with a strategic entry point into the Wireless Telecommunications market, which strongly complements the Group's existing strengths across Fixed Line
Telecommunications Services.
Revenue of $4,597 thousand and net profit after tax of $63 thousand was recognised by the Group for the financial year; if Catalyst ONE had been held for the
entire year, it would have contributed revenue and net profit after tax of $7,388 thousand and $931 thousand respectively. Total expenses of $362 thousand
were included in acquisition-related expenses in relation to the Catalyst ONE business combination.
57
BSA LIMITED ANNUAL REPORT 2021 E
GROUP STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
Acquisition values
• Goodwill associated with the acquisition primarily relates to synergies due to scale and operational efficiencies through the sharing of operational
expertise throughout the Group and is not expected to be tax deductible,
• acquired receivables are recorded at their contractual cash flow amounts which are consistent with their fair values at acquisition date, and
• acquisition accounting remains provisional with minor changes to deferred consideration possible prior to the completion of the 12-month provisional
accounting window on 22 December 2021.
Details of the purchase consideration and acquisition date fair values are as follows:
Purchase consideration
Cash consideration paid
Deferred cash consideration payable in March 2022 and 2023
Deferred variable BSA Limited share consideration payable in March 2022 and 2023
Less: cash and cash equivalents acquired
Total purchase consideration
Fair value of net assets acquired
Trade and other receivables
Contract assets
Property, plant and equipment
Goodwill recognised on acquisition by the Group
Intangible assets recognised on acquisition by the Group (Customer order book, contracts and
relationships)
Trade and other payables
Lease liabilities
Provisions
Deferred Tax Liabilities
Net identifiable assets acquired
$'000
3,636
1,581
527
(2,144)
3,600
1,645
1,226
124
75
2,527
(679)
(6)
(309)
(1,003)
3,600
Purchase consideration includes $3,636 thousand cash paid and variable consideration of between $nil and $2,108 thousand payable as a mix of 75% and 25%
BSA shares in March 2022 and March 2023. The variable consideration is subject to EBITDA performance over the one- and two-year periods post acquisition
on 22 December 2020.
Accounting policy
Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the business less accumulated impairment
losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units)
that is expected to benefit from the synergies of the combination.
58
BSA LIMITED ANNUAL REPORT 2021 GROUP STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
E
E3. PARENT ENTITY FINANCIAL INFORMATION
Summary financial information
The individual financial statements for the parent entity, BSA Limited, show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Shareholders' equity
Issued capital
Reserves
Accumulated losses
Profit reserve
Share-based payments
Total Equity
Profit / (loss) for the period
Total comprehensive income
Guarantees entered into by the parent entity
Directly relating to the parent entity
Secured by cross guarantee by all wholly owned group members
Contingent liabilities of the parent entity
Given the deed of cross guarantee, refer to Contingent liabilities at note D3.
2021
$'000
36,804
44,782
81,586
35,814
15,808
51,622
29,964
Consolidated
2020
$'000
71,109
46,842
117,951
70,351
15,312
85,663
32,288
100,861
100,390
-
(82,157)
9,833
1,427
29,964
1,448
1,448
2021
$'000
9,616
23,307
32,923
-
(82,188)
12,718
1,368
32,288
(5,493)
(5,493)
Consolidated
2020
$'000
6,915
26,490
33,405
59
BSA LIMITED ANNUAL REPORT 2021
E
GROUP STRUCTURE
FOR THE YEAR ENDED 30 JUNE 2021
E4. RELATED PARTY TRANSACTIONS
The Group’s related parties are considered to have a special relationship with the Group as such additional disclosures are made to users of the Annual Report
to draw attention to the possibility that its financial position and performance may have been affected related parties. Except from the amounts disclosed
below there have been no other related party transactions in current or prior financial years.
Related Party Remuneration
The below outlines total remuneration paid to the Group’s key management personnel, being the Non-executive Directors, CEO and CFO. Detailed disclosures
by person and the determination of remuneration structures are outlined in the Remuneration Report section of this Annual Report.
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Related Party Rights and Shareholdings
Related party rights and shareholdings are outlined in detail in the Remuneration Report section of this Annual Report.
2021
$
1,567,330
92,937
15,025
-
139,213
Consolidated
2020
$
1,806,741
83,296
15,220
394,749
165,406
1,814,505
2,465,412
60
BSA LIMITED ANNUAL REPORT 2021 F
NOTES TO THE FINANCIAL STATEMENTS
OTHER
F1. SHARE-BASED PAYMENTS
Equity settled share-based payments expense
Share-based payments equity reserve
2021
$'000
335
1,427
Consolidated
2020
$'000
398
1,368
The following share-based payment (SBP) rights were on issue during the financial year:
Plan
Grant Date
Vesting Date
Number
Number
Number
Number
Balance at
30 Jun 2020
Granted in 2020
Vested in 2020
Balance at
30 Jun 2021
Consolidated and parent entity
PRP Plan (SR)
28 Jun 2019
30 Jun 2020
PRP Plan (SR)
19 Nov 2019
19 Nov 2020
PRP Plan (PR)
27 Nov 2019
30 Jun 2019
PRP Plan (PR)
27 Nov 2019
30 Jun 2020
PRP Plan (PR)
27 Nov 2019
30 Jun 2021
PRP Plan (SR)
27 Nov 2019
30 Jun 2021
PRP Plan (SR)
1 Sep 2020
1 Sep 2021
PRP Plan (SR)
25 Nov 2020
30 Jun 2022
NED Plan
23 Mar 2021
23 Jun 2021
175,440
108,108
98,666
100,001
101,370
771,319
-
-
-
-
-
-
-
-
-
143,369
1,088,365
226,025
(175,440)
(108,108)
(98,666)
(100,001)
-
-
-
-
(226,025)
-
-
-
-
101,370
771,319
143,369
1,088,365
-
1,354,904
1,457,759
(708,240)
2,104,423
All the SBP rights outlined above are equity settled and have a $nil exercise price and expire 15 years after their grant date. No rights were forfeited in 2021.
The key characteristics of rights issued during the current financial year are as follows:
Risk Free
Valuation Inputs
Granted in 2020
per Right (1)
Total Fair Value
Grant Date
Interest Rate
Volatility
Dividend Yield
Number
Cents
Number
Consolidated
Fair Value
1 Sep 2020
25 Nov 2020
23 Mar 2021(2)
0.10%
0.25%
-
50%
49%
-
3.6%
3.6%
-
143,369
1,088,365
226,025
27.0
26.0
31.0
39
283
70
(1) All of the above use the share price at grant date, historical dividend payout rates and historical volatility for the same duration as the time between grant
and vesting dates as key inputs to a Black-Scholes model to determine the fair value per right.
(2) NED Plan deferred rights include no service or performance conditions and are thus considered to vest on grant date, as such grant date salary sacrificed
fees is considered to be fair value.
61
BSA LIMITED ANNUAL REPORT 2021 F
OTHER
FOR THE YEAR ENDED 30 JUNE 2021
Employee Performance Reward Plan
The Group performance reward plan includes a subset for the issuing of rights to select participants under the BSA Limited Rights Plan. The BSA Limited Rights
Plan ('PRP Plan') was approved by shareholders at the 2008 AGM. The PRP Plan was established to reward selected eligible employees and to:
• provide an incentive for the creation of, and focus on, shareholder wealth,
• enable the Group to recruit and retain the talented people needed to achieve the Group’s business objectives,
•
link the reward of key employees with the achievement of strategic goals and the Group’s performance,
• align the financial interests of participants with the Group’s shareholders, and
• ensure the remuneration packages of employees are consistent with market practice.
Securities may be offered under the Plan and the Board has discretion to determine who is offered the opportunity to participate.
PRP Plan (SR)
Within the PRP Plan is a subset of Service Rights (SR). Service rights issued under the PRP Plan are only subject to service conditions, whereby the employee
must remain employed by the Group until the vestment date. This is subject to a number of exceptions (including death, cessation of employment, takeovers
and schemes of arrangement). Service Rights are typically used in the following instances by the Group:
• As part of senior management short-term incentive payments, to encourage continued service and alignment of employee and shareholder interests.
Senior management incentive payments generally include two components:
-
-
an upfront cash payment for 50% of the reward, and
a PRP Plan (SR) portion which grants employees service rights which vest 24 months post the relevant financial performance period with the
number of service rights granted calculated based on the 10-day Volume Weighted Average Price (VWAP) of the Group’s shares after the
release of the Group’s annual report for the relevant financial performance period.
• As a method of retention of key employees who have joined the Group to ensure their remuneration packages are in-line with market practice in their
first financial period prior to earning short-term incentives.
PRP Plan (PR)
Within the PRP Plan is a subset of Performance Rights (PR). Performance rights issued under the PRP Plan are subject to both non-market performance
conditions and service conditions. Performance Rights are typically used to:
•
incentivise financial performance of section of the Group’s operations over the long-term, and
• encourage continued service and alignment of employee and shareholder interests.
Non-executive Director Fee Sacrifice Equity Plan
The Non-executive Director (‘NED’) Fee Sacrifice Equity Plan (‘NED Plan’) purpose is to:
•
facilitate the acquisition of equity in the Group by NEDs serving on the board because it provides NEDs with “skin in the game” and aligns their
interests with shareholders,
• preserve the independence of NEDs by ensuring that NED participate in a separate equity plan from the PRP plan in which executives of the Group
participate and for which NEDs set performance vesting conditions, and
• overcome the challenges faced by NEDs in acquiring equity on-market due to governance and regulatory issues in a manner that is intended to
demonstrate good-governance.
The NED Plan allows for eligible NEDs, subsequent to AGM approval can sacrifice a portion of their NED fees for an equivalent number of deferred rights,
which covert into shares of the Group. The deferred rights are issued within 30 days of the NED application and convert to shares 90 days after the issue of
the deferred rights. The shares are held in the NEDs name and are restricted from trading until the earlier of 15 years from grant date and the date the NED no
longer serves on the Board of the Group.
As the NED Plan allows for the sacrifice of NED Fixed remuneration for a fixed value of shares this plan is considered a type of fixed remuneration share-
based payment.
62
BSA LIMITED ANNUAL REPORT 2021 OTHER
FOR THE YEAR ENDED 30 JUNE 2021
F
Accounting Policy
Equity-settled share-based payments are measured at the value an independent third party would pay for them on the date they were granted (fair value). This
fair value along with an estimate of how many of them are expected to be transferred to the employee at the end of the arrangement is expensed on a straight-
line basis from when the employee commenced working for them until the end of the arrangement (vesting). At the end of each reporting period, the Group
revises its estimate of the number of equity instruments expected to vest with a corresponding increase in equity. The impact of the change in estimate, is
recognised in profit or loss such that the total expense recognised over the arrangement to date reflects the revised estimate, with a corresponding adjustment
to the equity-settled employee benefits reserve.
F2. OTHER ACCOUNTING POLICIES
Reclassifications
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
Significant reclassifications include:
• JobKeeper government grants received were reclassified from other income to employee expenses ($3,890 thousand, refer to note B3), and
• Reclassifications between Property, Plant and Equipment and Intangible Assets ($1,804 thousand, refer to notes C3 and C4).
Sale and leaseback
In the 2021 financial year the Group undertook a sale and leaseback transaction (‘S&LB’) to free up capital in 78 motor vehicles for more efficient use in the
Group’s operations. The S&LB involved the payment of existing finance lease liabilities on the vehicles totalling $1,351 thousand for vehicles with a carrying
value of $487 thousand. These motor vehicles were then sold to a third party fleet provider for $1,910 thousand resulting in a gain on sale of $854 thousand and
new right-of-use assets of $222 thousand and right-of-use liabilities of $791 thousand being recognised as at 30 June 2021.
New accounting standards and interpretations
April 2021 IFRIC agenda decision: Configuration or Customisation Costs in a Cloud Computing Arrangement
As outlined in the key estimates and judgements section of note C4 the Group has a large number of software assets. The assessment of the impact of the
April 2021 IFRIC agenda decision on the Group’s accounting policies is currently underway and will be completed over the coming months. This assessment
and consequential changes in accounting policy may result in derecognitions of amounts previously capitalised as software assets. The restatement of the
accounting policy and quantum will presented in the financial report for the half-year ending 31 December 2021.
Other new accounting standards effective in the current year
Other than the IFRIC agenda decision outlined above no new standards or amendments to accounting standards applicable to the current reporting period had
a significant impact on the Group's financial statements.
New accounting standards not yet effective
At the date of authorisation of the financial report no Standards and Interpretations that were issued but not yet effective are anticipated to have a material
impact on the Group’s financial statements.
Finance costs
Finance costs relate to right-of-use liabilities, financial institution borrowing costs and bank guarantee costs and are recognised in profit or loss in the period in
which they are incurred.
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount is not recoverable from the
taxation authority. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are presented in the consolidated statement of cash flow on a gross basis. The GST component of cash flows arising from investing and financing
activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows.
63
BSA LIMITED ANNUAL REPORT 2021 DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2021
The Directors declare that:
(a)
In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable,
(b)
in the Directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as
stated in note A1 to the financial statements,
(c)
In the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
consolidated entity, and
(d)
The Directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the
deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in
accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order
applies, as detailed in note E1 to the financial statements will, as a group, be able to meet any obligations or liabilities to which they are, or
may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors.
Michael Givoni
Chairman
Sydney
20 August 2021
64
BSA LIMITED ANNUAL REPORT 2021
Civil Contractor on site in Kilmany,
Conduit being prepared to be back
hauled through a 120m Drill Shot.
Image courtesy of Marta Gola
65
BSA LIMITED ANNUAL REPORT 2021 INDEPENDENT AUDITOR’S REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Independent Auditor’s Report to the
Members of BSA Limited
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
We have audited the financial report of BSA Limited (the “Company”) and its subsidiaries (the “Group”) which
comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of BSA Limited or 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 30 June 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 & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the “Code”) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We 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 for 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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
66
BSA LIMITED ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
KKeeyy AAuuddiitt MMaatttteerr
RReeccooggnniittiioonn ooff rreevveennuuee oonn FFiirree BBuuiilldd ccoonnssttrruuccttiioonn
ccoonnttrraaccttss
One of the Group's significant sources of revenue is
from Fire Build construction projects. Revenue is
derived from a number of contracts and recognised
based on the stage of completion of each contract.
Stage of completion of the construction work is
determined with reference to the work completed,
i.e. the percentage of work performed up to the
reporting date compared to the total anticipated
contract work to be performed.
The recognition of revenue is dependent on the
following key factors:
•
•
•
•
Determination of stage of completion;
Estimation of total contract revenue and
contract cost 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.
Page 2
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy
AAuuddiitt MMaatttteerr
Our procedures included, but were not limited to:
•
Evaluated management’s processes and controls
over
revenue,
recognition of contract
the
including;
-
-
Obtained an understanding of the key
controls, in particular the estimation and
review of costs to complete; and
Understood the project review control that
is undertaken by Group management on a
monthly basis.
For a sample of contracts selected based on
quantitative and qualitative characteristics our
procedures included:
-
-
-
-
-
Obtained an understanding of the contract
terms and conditions and inspected signed
contracts to evaluate whether contract
terms were reflected
in management’s
estimate of forecast costs and revenue;
Challenged the forecast costs to complete,
as well as
supporting
documentation for Contracted costs such as
materials, subcontractors and labour;
inspection of
Tested contractual entitlement, variations
and claims recognised in contract revenue;
For loss making contracts, recalculated the
expected loss at completion and verified that
the appropriate loss was recorded; and
Evaluated significant exposures to liquidated
damages for late delivery of contract works.
CCoolllleeccttaabbiilliittyy ooff ttrraaddee rreecceeiivvaabblleess aanndd ccoonnttrraacctt
aasssseettss oonn FFiirree BBuuiilldd ccoonnssttrruuccttiioonn ccoonnttrraaccttss
The Group recognises contract assets in respect of
the progressive valuation of work completed as well
as trade receivables which represent amounts
invoiced to customers.
Fire Build contract assets (or work in progress) are
amounts due to the Group from customers that
have not been invoiced. Some of these project
receivables are made up of claims and variations,
both approved and not approved by the customer.
Management assesses the likelihood of recovery
prior to recognising the amount due from the
customer.
Credit risk and collectability of trade receivables and
amounts due from customers under construction
contracts are subject to estimation and judgement
•
Assessed the appropriateness of the disclosures in
the financial statements.
Our procedures included, but were not limited to:
•
•
•
Evaluated management’s processes and controls
over
trade
the collectability of Fire Build
receivables and contact assets;
Assessed the completeness and accuracy of the
aged debtor (including ageing analysis) and work in
progress reports at year end, and on a sample
basis, agreed to the subsequent receipt of cash;
For the trade receivable balances that were not
collected prior to the
issue of the financial
statements, evaluated on a sample basis the
probability of recovery of outstanding amounts by
reference to the status of contract negotiations,
correspondence with the customers, external and
supporting
advice
internal
legal
and
67
BSA LIMITED ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
and are required to be monitored by management
on an ongoing basis.
documentation, historical recoveries and other
supporting documentation;
Page 3
•
•
Confirmed that unbilled work in progress amounts
at year end were subsequently billed to the
customer;
to
the
customer we
For the work in progress amounts that were not
billed
challenged
management’s assessment of the recoverability of
these amounts via
inquiry of management,
inspection of internal and external legal advice, or
inspection of subsequent billing approved by the
client; and
•
Assessed the appropriateness of the disclosures in
the financial statements.
LLiittiiggaattiioonn aanndd ccllaaiimmss
Our procedures included, but were not limited to:
The Group is party to legal proceedings and claims
brought by third parties as a result of normal
business operations. Management have assessed
each of these legal matters and determined, with
the assistance of external legal counsel where
relevant, whether there is a requirement to provide
for expected exposures or disclose a contingent
liability in the consolidated financial report.
Judgement is applied when determining the likely
litigation and claims. The most
settlement of
significant legal claims are related to:
•
•
•
Payroll tax liability with the State Revenue Office
(“OSR”) in New South Wales, Queensland and
Victoria;
Research & development
concession; and
(“R&D”)
tax
Class action
in relation
contracting arrangements.
to the Group’s
•
Evaluated management’s processes and controls
to assess the likely financial impact of legal
proceedings;
• Obtained the Group’s litigation reports and making
enquiries about the status of litigation matters
with Group management and external
legal
advisors;
•
•
•
Reviewed minutes of meetings of those charged
with governance to identify their consideration of
legal proceedings as relevant and correspondence
between the Group and its external legal advisors;
Assessed management’s determination of the
provisions recorded for potential litigation losses
and claims; and
Assessed the appropriateness of the disclosures in
the financial statements.
AAccqquuiissiittiioonn ooff CCaattaallyysstt OONNEE
Our procedures included but were not limited to:
On 22 December 2020, the Group acquired 100% of
the issued shares in Catalyst ONE Pty Ltd and its
wholly owned subsidiary Jamik (AUS) Pty Limited
(“Catalyst ONE”).
The Catalyst ONE acquisition
is a complex
transaction and involves a number of significant
judgements (as disclosed in Note E2. Business
Combination) and requires management to ensure
compliance with the requirements of AASB 3
Business Combinations, including determining the
purchase price allocation and the fair value of
identifiable intangible assets, which are recognised
separately from goodwill.
•
•
•
68
Reviewed the purchase and sale agreement to
understand the terms and conditions of the
evaluated management’s
transaction
application of the relevant accounting standards
including determining whether the acquisition was
in substance a business combination;
and
Assessed whether the purchase price has been
correctly determined and appropriately allocated
across the acquisition fair values of the net assets
acquired;
Challenged the appropriateness of the valuation
methodologies adopted by management
in
determining the fair value of the net assets
identified,
including the assessment of the
independent
identifiable
intangible assets;
appraisal of
the
BSA LIMITED ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
Page 4
•
•
Assessed how transaction costs have been
accounted for; and
Assessed the appropriateness of the disclosures in
the financial statements.
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 30 June 2021 but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
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BSA LIMITED ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
Page 5
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 23 of the Directors’ Report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of BSA Limited, for the year ended 30 June 2021, complies with section
300A of the Corporations Act 2001.
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BSA LIMITED ANNUAL REPORT 2021
INDEPENDENT AUDITOR’S REPORT
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.
Page 6
DELOITTE TOUCHE TOHMATSU
AG Collinson
Partner
Chartered Accountants
Sydney, 20 August 2021
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BSA LIMITED ANNUAL REPORT 2021
SHAREHOLDER INFORMATION
THE SHAREHOLDER INFORMATION SET OUT BELOW WAS APPLICABLE AS AT 31 JULY 2021
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
Number of
Holders
Ordinary
Shares
Percentage
Number of
Performance
Percentage
Held
Holders
Rights
Held
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and above
204
553
302
670
182
1,911
59,788
1,692,506
2,328,735
26,842,949
402,701,899
433,625,877
0.01%
0.39%
0.54%
6.19%
92.87%
100.00%
10
0
0
5
1
16
694,251
50.67%
-
-
-
-
420,287
255,658
30.67%
18.66%
1,370,196
100.00%
B. EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name of Holder
NATIONAL NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
BIRKETU PTY LTD
SANDHURST TRUSTEES LTD
SAMLOWE PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
EMELWIN PTY LTD
HGT INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
EDINGTON PTY LIMITED
CTSF PTY LTD
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
MISS YAN LI
MR NICHOLAS KELVIN YATES
VANWARD INVESTMENTS LIMITED
MRS SUSAN ELIZABETH MCGREGOR
MR GRAEME LESLIE HERRING + MRS JOAN HERRING
MR MICHAEL GIVONI
W & S SEJA INVESTMENTS PTY LTD
MR LEASTON PAULL
Top 20 Shareholders
Total Shares Issued
72
Ordinary Shares
Number
Percentage
Held
of Issued
139,454,589
96,261,365
73,175,760
22,213,723
10,115,403
8,047,040
2,993,959
2,599,488
2,500,125
1,769,376
1,675,945
1,563,177
1,400,000
1,259,524
1,194,807
1,092,742
1,090,656
891,453
882,351
738,981
32.16%
22.20%
16.88%
5.12%
2.33%
1.86%
0.69%
0.60%
0.58%
0.41%
0.39%
0.36%
0.32%
0.29%
0.28%
0.25%
0.25%
0.21%
0.20%
0.17%
370,920,464
85.54%
433,625,877
100.00%
BSA LIMITED ANNUAL REPORT 2021
SHAREHOLDER INFORMATION
THE SHAREHOLDER INFORMATION SET OUT BELOW WAS APPLICABLE AS AT 31 JULY 2021
C. SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are set out below:
Ordinary Shares
NAOS ASSET MANAGEMENT LIMITED
LANYON ASSET MANAGEMENT PTY LIMITED
BIRKETU PTY LTD
SANDHURST TRUSTEES LIMITED
D. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
Number Held
Percentage
136,304,465
96,003,649
73,175,760
22,213,723
31.45%
22.14%
16.88%
5.12%
(a) Ordinary shares
On a show of hands every member present at a meeting in person, or by proxy, shall have one vote and upon a poll each share shall have one vote.
(b) Rights over an ordinary share
No voting rights.
E. ON MARKET BUY-BACK
There is currently an on-market buy back enabling the company to buy-back shares over a 12 month period commencing 19 November 2020.
73
BSA LIMITED ANNUAL REPORT 2021 CORPORATE DIRECTORY
BSA Limited - Corporate
Registered Office (Sydney)
Advanced Property Solutions (APS)
Communications & Utility Infrastructure (CUI)
Level 7, 3 Thomas Holt Drive
Macquarie Park NSW 2113
+61 2 9763 6200
P
+61 2 9763 6201
F
corporate@bsa.com.au
E
www.bsa.com.au
W
Share Registry
Computershare Investor Services
GPO Box 2975
Melbourne VIC 3001 Australia
1300 85 05 05
P
+61 3 9415 4000
P
+61 3 9473 2500
F
Auditor
Deloitte Touche Tohmatsu
225 George Street
Sydney NSW 2000
Financier
Commonwealth Bank of Australia
201 Sussex Street
Sydney NSW 2000
www.bsa.com.au
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BSA LIMITED ANNUAL REPORT 2021