Table of Contents
Corporate Information ………….………………………...3
Financial Report …………………………………………..4
Corporate Governance Policy…………………………..75
Share and Shareholders Information ………………….76
Corporate information
ACN: 137 363 636
Directors
Murray Bleach - Non-Executive Chairman
Nitin Singhi – Independent Non-Executive Director
Paul Meehan – Non-Executive Director
Bruce Macfarlane – Executive Director (appointed 25 February 2021)
Company Secretary
Kim Bradley-Ware
Registered Office and principal place of business
Level 5, 56 Station Street
Parramatta NSW 2150
Share Register
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
Energy Action Limited shares (EAX) are listed on the Australian Securities Exchange (ASX)
Solicitors
DLA Piper
No 1 Martin Place
Sydney NSW 2000
Bankers
Commonwealth Bank of Australia
Level 3, 101 George Street
Parramatta NSW 2150
Auditors
RSM Australia Partners
Level 13, 60 Castlereagh Street
Sydney, NSW 2000
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 3
Financial Report for the year ended 30 June 2021
Table of Contents
Directors’ Report .................................................................................................................................................. 5
Auditor’s Independence Declaration .................................................................................................................. 18
Remuneration Report (Audited) ......................................................................................................................... 19
Financial Statements ......................................................................................................................................... 28
Consolidated Statement of Comprehensive Income ......................................................................................... 28
Consolidated Statement of Financial Position ................................................................................................... 29
Consolidated Statement of Changes in Equity .................................................................................................. 30
Consolidated Statement of Cash Flow .............................................................................................................. 31
Notes to the Financial Statements for year ended 30 June 2021 ..................................................................... 32
Note 1: Corporate Information ....................................................................................................................................... 32
Note 2: Summary of Significant Accounting Policies ..................................................................................................... 32
Note 3: Significant Accounting Judgements, Estimates and Assumptions .................................................................... 42
Note 3: Significant Accounting Judgements, Estimates and Assumptions (Continued) ................................................ 43
Note 6: Income Tax Expense ........................................................................................................................................ 46
Note 7: Earnings per Share ........................................................................................................................................... 47
Note 8: Dividends .......................................................................................................................................................... 48
Note 9: Cash and Cash Equivalents .............................................................................................................................. 49
Note 10: Trade and Other Receivables ......................................................................................................................... 49
Note 11: Property Plant and Equipment ........................................................................................................................ 51
Note 12: Intangible Assets ............................................................................................................................................. 52
Note 13: Other Assets ................................................................................................................................................... 53
Note 13(a): Right-of-use Assets .................................................................................................................................... 54
Note 14: Trade and Other Payables .............................................................................................................................. 55
Note 14(a): Lease Liability ............................................................................................................................................. 55
Note 15: Tax .................................................................................................................................................................. 56
Note 16: Provisions and other liabilities ......................................................................................................................... 57
Note 17: Loans and Borrowings .................................................................................................................................... 57
Note 19: Capital and Leasing Commitments ................................................................................................................. 62
Note 20: Cash Flow Information .................................................................................................................................... 63
Note 21: Related Party Disclosures ............................................................................................................................... 64
Note 22: Financial Risk Management ............................................................................................................................ 65
Note 23: Auditors’ Remuneration ................................................................................................................................... 68
Note 24: Information relating to Energy Action Limited (“the parent entity”) .................................................................. 69
Note 25: Events After the reporting period .................................................................................................................... 69
Independent audit report to members of Energy Action Limited ....................................................................... 71
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 4
Directors’ Report
Your Directors present their report, together with the financial statements for Energy Action Limited (the “Company”) and its
consolidated entities (the “Group”), for the financial year ended 30 June 2021.
Directors
The names and details of the Company’s Directors in office during the financial year and until the date of this report are as
follows. Directors were in office for this entire period unless otherwise stated.
Murray Bleach (Non-Executive Chairman)
Qualifications – Bachelor of Arts (Financial Studies) and Master of Applied Finance - Macquarie University, Institute of
Chartered Accountants, Graduate Member of the Australian Institute of Company Directors.
Experience – Board Member since 2012, Chairman since 2015
Special Responsibilities – Member of each of the Audit & Risk Management and Nomination & Remuneration Committees
Directorships held in other listed entities currently and during the three prior years to the current year:
Carlton Investments Ltd – Independent Non-Executive Director (appointed 2 December 2014)
Other Directorships and interests - Partner in Alfred Street Investment Partners, Chairman of AddVenture Fund and Tidal
Ventures, Non-executive Director of Green Collar group, Consultant to Australian Super.
Paul Meehan (Non-Executive Director)
Qualifications – Diploma of Law (SAB), University of Sydney
Experience – Board member since 2003
Special Responsibilities – Member of each of the Audit & Risk Management and Nomination & Remuneration Committees.
Directorships held in other listed entities currently and during the three prior years to the current year: nil
Other Directorships and interests - Director of Meehans Solicitors Pty Ltd, Non-executive Director of Commercial First Realty
Pty Ltd T/as LJ Hooker Commercial Macarthur.
Nitin Singhi (Independent Non-Executive Director)
Qualifications – Bachelor of Economic and Master of Laws – University of Sydney, Member of the Australian Institute of
Company Directors
Experience – Board Member since 2015
Special Responsibilities – Chairman of each of the Audit & Risk Management and Nomination & Remuneration Committees.
Directorships held in other listed entities currently and during the three prior years to the current year: nil
Other Directorships and interests - Managing Director of Horizon Private Capital Partners, Director of TiE Sydney, Director of
Sport and Leisure Education Group Pty Limited.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 5
Bruce Macfarlane (Executive Director, appointed 25 February 2021)
Qualifications – Bachelor of Engineering (Mining), University of Auckland. Masters of Commerce (Economics), University of
Canterbury
Experience – Board Member since 2021
Special Responsibilities – Member of each of the Audit & Risk Management and Nomination & Remuneration Committees,
project management of business improvement projects
Directorships held in other listed entities currently and during the three prior years to the current year: nil
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of Energy Action Limited were:
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane
Company Secretary
Number of ordinary
shares
Number of options over
ordinary shares
5,100,700
4,792,846
3,000
2,937,786
-
-
-
-
The following person held the position of Company Secretary at the end of the financial year:
Kim Bradley-Ware – Bachelor of Commerce (Lincoln University), LLB (UTS), CPA Australia
An experienced corporate governance professional with more than 20 years financial, commercial and company secretarial
experience gained from in-house roles.
Dividends recommended:
Cents per share
Ordinary shares
Final 2021 dividend
Interim 2021 dividend
Final 2020 dividend
Operating and Financial Review
NIL
NIL
NIL
$
NIL
NIL
NIL
The Board presents the 2021 Operating and Financial Review, which has been designed to provide shareholders with a clear
and concise overview of Energy Action’s operations, financial position, business strategies and prospects. The review also
provides contextual information, including the impact of key events that have occurred during the FY21 financial year and
material business risks faced by the business so that shareholders can make an informed assessment of the results and
prospects of the Group.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 6
Our Business Model
At Energy Action we believe the status quo is no longer acceptable.
• Our mission is to make energy simpler, cleaner, and lower cost.
• Our goals are to invest in technology that simplifies the sector. And to provide clear and low-cost paths to Net Zero
for clients looking to build sustainable businesses in a changing world.
• Our vision is to drive down energy costs. To simplify its complexity. And to protect the world our children will inherit.
What We Offer
We identify the money businesses could be saving and the emissions they could be preventing. We help our clients with:
• Energy Buying: We offer a range of energy procurement techniques to drive competition for our clients energy spend.
• Energy Management: We manage client energy contracts. Identifying the energy being wasted. The emissions that
can be prevented. And the money that could be saved.
• Embedded Networks: We help clients create new revenue streams by assisting them with setup, onselling, and
ongoing management of an Embedded Network.
How we’re different
We’re the trusted, independent energy partner for over 7,000 clients across 20,000 sites. We started in Sydney, Australia, and
we’re now a national team. We combine 20+ years of experience with our smart technology and data-led insights to make our
clients’ energy cheaper, easier, and cleaner.
At its core Energy Action is a technology business. We’re rebuilding the software that made our business. Building smart
technology that uses our in-depth energy-market knowledge and customer insights. Through it, we source and transform utility
data and deliver high-quality services at scale that drive down energy prices, and help businesses reach affordable Net Zero
targets.
We are Net Zero. From our CEO to our analysts, and from our sales staff to our developers, we’re all committed to delivering
positive financial and environmental outcomes.
Our Strategy
Energy Action's focus going forward is sustainable, profitable growth. Our priorities are:
• Customer growth. We have 20-year customer relationships and our customers use ~10% of the total commercial
national electricity market. Organic sales growth is our top priority.
•
Technology investment. Give our customers easy to use energy management software. To retain and win customers.
• Net Zero. We are Net Zero. We will help our customers lower their emissions with our energy buying and energy
management services.
Initially founded in 2000, Energy Action listed on the Australian Securities Exchange on 13 October 2011.
Operational Performance
During the business delivered a $1m loss primarily as a result of a slowdown in sales momentum, contracted revenue
declines, and impairments from unused leases and legacy technology contracts. Reduced revenues were offset in part by
improved expense management. Details for these items are:
• Slowdown in sales momentum and growth – During the prior 18 months Energy Action has enjoyed strong double-
digit sales growth for core Energy Buying and Energy Management. During the 2H FY21 these gains were lost with
gross sales for FY21 at the same level similar to FY20. Auctions increased compared to pcp 18% in 1H FY21,
however dropped 26% in the second half with total auctions for the year 4% down. Market pricing declined 28% pcp,
significantly impacting sales order values. In addition to COVID-19 impact, the forward contracting undertaken by
many customers to take advantage of historically low energy rates has reduced the opportunity in the market for new
contracting. New business growth was lower than expected, with the pipeline not strong enough to achieve growth,
despite improved retention rates for existing clients.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 7
• Contracted revenue declines – whilst this impact is largely behind Energy Action and the contracted base is
stabilised, the lower-than-expected new sales in 2H FY21 further reduced the contracted future revenue to $15.4
million from a prior low of $15.7 million in May 2020.
• Persistent low prevailing market prices seeing reductions of 28%, significantly impacting revenue by over $1 million
compared to prior year.
• Operating cost reduction of 22% (OPEX and COGS) was achieved. However, additional technology development to
achieve planned efficiency and reliability were delayed, impacting on additional cost reductions required for improved
EBITDA.
Whilst Net Sales were essentially flat, and future revenue declined slightly, there was pleasing improvements in client
retention rates, sites under management for Energy Buying, service delivery, client satisfaction with record net promoter
scores, and the highest level of metrics sales recorded for over 5 years. In addition, the growth in the small market Energy
Buying and services was strong with 141% growth in this segment achieved. The Corporate market, representing the Group’s
largest customers, saw strong growth of 26% in the last year, representing a strong turnaround in sales and service in client
retention and acquisition.
The bank facility was renewed for a 3 year period ending October 2023 with the terms of the agreement including agreed
Gearing, Interest and Asset covenants, and an amortisation schedule resulting in a reduction of the facility by $1 million
between March 2022 and September 2023, with the remaining terms and conditions substantially the same. Welcome
government cash relief of over $1.1million was received offset by the repayment of deferred cash payments of $1.2 million
from the previous fiscal year.
The company has made significant progress in building the technology platform, with stabilisation of legacy systems,
enhanced technology infrastructure (delivering annualised saving of more than $1 million) and commencing the next
generation energy management platform. These improvements are evident in client feedback and net promoter scores,
however the burden of legacy systems has delayed the opportunity to achieve further cost reductions and remains a priority in
the business.
Financial Performance
The Group made a statutory net profit/(loss) after tax (NPAT) of ($1.0) million for the year ended 30 June 2021 an
improvement compared to a statutory NPAT of ($2.49) million for the year ended 30 June 2020. Operating net profit after tax
has decreased to a loss of ($0.42) million compared to FY20 $0.02 million driven by an operating net loss of $0.15 million in
the first half and continuing loss in the second half of $0.27 million. The increased loss in the second half was driven from
lower revenues primarily Auctions and Energy Management somewhat offset by continuing cost reduction.
A reconciliation of the Group’s Statutory NPAT to Operating NPAT and EBITDA is shown in the table below:
NPAT
EBITDA
$
30-Jun-21
30-Jun-20
Variance
30-Jun-21
30-Jun-20
Variance
Statutory results
(1,000,258)
(2,486,756)
60%
(506,502)
(1,491,768)
66%
Add back Significant Items
after tax:
Restructuring cost
Accelerated D&A1
Impairment of Intangibles2
Other items
333,022
-
374,524
14,236
328,265
148,423
2,618,365
23,394
Government Assistances3
(599,664)
(607,738)
-1%
100%
86%
39%
-1%
450,029
452,780
-
506,113
19,239
-
3,611,538
32,269
(810,357)
(838,260)
Onerous contracts & leases 4
Operating profit after tax
458,580
(419,560)
-
-100%
23,953
-1,852%
619,703
278,225
-
1,766,558
1%
-
86%
40%
-3%
-100%
-84%
1 Accelerated Depreciation & Amortisation on specific items of Software
2 Impairment of Right of Use Asset (FY21), customer and contract management platform in CRM (FY20)
3 Jobkeeper, Cashboost & payroll tax relief
4 Onerous Contracts relating to technology infrastructure and rental premises
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 8
Key Financial Metrics
Revenue
Operating EBITDA
Operating EBITDA margin
Operating NPAT
Operating Cash flow1
Statutory NPAT
FY21
$14.36m
$0.28m
1.9%
-$0.42m
-$.06m
-1.00m
FY20
$19.78m
$1.77m
8.9%
$0.02m
$2.4m
-$2.49m
Variance
-27%
-84%
-7% ppt
-1,852%
-103%
60%
1Operating Cash Flow is defined as Operating Cash Flow before Interest, Tax and Significant Items
Revenues
Total revenues declined by 27% versus the previous period. Energy Buying revenue declined 16%, Energy Management
declined 32% and Other revenues declined 97%. Embedded Networks remained unchanged.
Revenue $
Energy Buying
Energy Management
Embedded Networks
Other
Total Revenue
Repositioned Advisory Products
Total Revenue less Repositioned
Advisory Products
FY21
5,490,400
7,511,386
1,334,067
23,258
14,359,111
21,743
FY20
6,544,171
11,012,682
1,339,394
885,482
19,781,729
885,481
vs FY20 $
-1,053,771
-3,501,296
-5,327
-862,224
-5,422,618
-863,739
14,337,368
18,896,248
-4,558,879
vs FY20 %
-16%
-32%
-0%
-97%
-27%
-98%
-24%
Revenue for the full year decreased from $19.8 million to $ 14.4 million mainly as a result of the following:
Energy Buying revenues were down 16% overall with:
− Decline in Auctions Electricity of 31%, driven predominately by 5-year lows in market pricing, seeing a 28% decline in
the $/Mwh pricing and negatively impacting revenue by more than $1 million. In addition, the number of Auctions
declined 4% to 727 (down from 759), impacted by disappointing volumes in 2H FY21, despite strong retention rates.
There was a small decrease in the average annualized MWh’s per AEX down 2% to 1,102 and contract duration was
30.7 months, an increase of 1.3mths from pcp. In a continuing low-price environment, many customers have taken the
opportunity to secure contracts into the future periods at an earlier time than prior year trends.
− A decline in Auctions Gas down 25% with lower volumes and lower market pricing.
− Tenders – down 21% with decline in volume somewhat offset by pricing and partially with some large corporate
customers switching to Auction renewals and utilising the Auction platform.
− Tariffs saw a significant increase of 139% contributing $1.3 million and successful gains in volume and market share
from key acquisition strategies and maintaining good retention of existing customer base.
− Structured and Procurement consultancy saw declines in revenue with customers contracting long in low price
environments and less opportunity in a low price and low volatility environment.
− Broking of Solar and Energy projects is yet to see expected volumes contracted from the launch of Solar Auctions
however the strategy is seeing demand, however longer than expected progress to completion. The first Solar Auction
was completed in June 21, with the new experience and strong pipeline expected to see growth in the coming fiscal
period.
Energy Management revenue declined by 32% with a decline of -841 in sites under management to 5,604. Significant
growth in Metrics large and small sites sales orders of 20%, from high levels of retention and strong attachment rates to
Auction volume, is building the future book for Metrics. First Half growth in Metrics sales orders saw record growth of
98%, however these gains were partially offset by disappointing 2H sales orders of -40% resulting in overall annual
growth of 20%. During the year the SME Metrics (small sites) saw significant growth of more than 1000 sites in particular
for 1 corporate customer, seeking whole of portfolio solution. However, this sales growth was offset by losses from 1 large
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 9
multisite corporate customers in Metrics and Metrics Sustain environmental reporting, service issues with technology
stabilisation, site closures with COVID-19 and the continued roll off of multiple small customers <10 sites, contracted over
a 5 year period and now ending.
Embedded Networks revenue was stable with some growth in sites in retail billing from existing customer expansion offset
by decline in Embedded Network sites predominately due to COVID-19 site closures.
Other – a decline of 98% related to the repositioning of Advisory. However, the impact on overall profit as a result of
repositioning these services is positive, with reduced COGS, wages and other costs also reduced.
Operating Expenditure and Cost of Goods Sold (COGS)
Operating overheads (net of significant items) and COGS totalled $14.1 million, compared to $18 million in FY20, a reduction
of $3.90 million (22%), with reduced operating costs predominantly related to employment costs. The reduction in costs has
partially offset the decline in revenue resulting a decline in EBITDA margin to 1.9%, down from 8.9%. In particular:
Employment costs were $1.3 million lower than pcp primarily as a result of:
− A reduction of FTE with improved integration and efficiency and as a result of the repositioning of the Advisory
business, reducing COGS (internal resources) and Operating expenditure
− Expansion of its offshore resources replacing onshore transactional roles as appropriate
− A voluntary salary reduction of 20% adopted by the Directors, Senior Leadership team and the vast majority of staff
impacting FY21 for a 3 month period ending 30 September 2021.
− Reduced sales commission with introduction of policy to capitalise commissions for annuity revenue and expense over
the average life of sales contracts.
− Reduced internal software capitalisation with reduced internal CAPEX spend in FY21.
Computer Maintenance – reduction by $0.9 million across technology infrastructure with transition to centralise service
provider and reduction and efficiency in requirements.
Reduction of rental occupancy costs $0.4 million with:
− Annualised savings from the consolidation of office locations in Sydney and Melbourne
− New lease in Melbourne treated as Right of Use assets (AASB16 Leases) from August 2020, reducing rent expense
and increasing amortisation of Right of Use Asset.
− Due to COVID-19 costs for serviced offices have reduced and some rental savings achieved in fixed tenanted
locations.
COVID-19 related cost savings with reduced travel, conference and entertainment
Ongoing strict cost control across all discretionary spend
Depreciation & Amortisation (D&A)
D&A decreased $0.8 million predominately as a result of the impairment of software in FY20 relating to the customer and
contract management platform in CRM.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 10
Cashflows
Operating Cash flow was ($0.06) million, down 103% on pcp, resulting in an operating cash flow conversion of -21% to
operating EBITDA. Operating cashflow was impacted by a significant decline in operating EBITDA -$1.5 million, the
repayment of FY20 COVID-19 deferred payments (PAYG, GST, FBT, Payroll tax, Rent) $1.2 million, payments for onerous
contracts and restructure costs, offset somewhat by government grants received $1.1 million. The Company has continued to
focus on working capital management with strong debtors collection, negatively impacted by the new company policy for
capitalisation of paid commissions onto the balance sheet along with negative trade payables impact.
Reconciliation of Operating Cash Flow before interest, tax and significant items
Statutory operating cash flow
Add back:
Taxes paid/(received)
Interest paid / (received)
Cash flows related to significant items
Significant items working capital – government relief, government assistance &
others
Operating cash flow before interest, tax and significant items
Operating EBITDA
Operating cash flow as % of Operating EBITDA
30 June 2021
30 June 2020
Restated*
(569,344)
3,383,948
(18,777)
207,259
155,472
(18,517)
311,654
88,505
476,282
(1,409,954)
(60,052)
278,225
-22%
2,355,636
1,766,558
133%
*Restated from prior year published results with Repayment Lease Liability reclassified into Cash Flows from Financing Activities
The group incurred capital expenditure of $0.83 million during the year predominately on software, in particular next
generation energy management platform.
During FY21, the Company and Commonwealth Bank of Australia have agreed to an extension of the $7.55 million facility
agreement to October 2023. Funds can be provided under the facility as loans, bank guarantees or as letters of credit with
$7.3 million available to be utilised for liquidity purposes. The terms of the agreement include agreed Gearing, Interest and
Asset covenants, and an amortisation schedule resulting in a reduction of the facility by $1 million between March 2022 and
September 2023, with the remaining terms and conditions substantially the same.
As at 30 June 21, the Company had utilised $7.15 million of the facility comprising a loan of $7.0 million and bank guarantees
principally in relation to a rental property The Group had $2.4 million of unrestricted cash at bank at 30 June 21, and total
undrawn facilities and cash of approximately $2.6 million. Net debt increased to $4.73 million as at 30 June 21, an increase of
$1.54 million over pcp.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 11
Other
A Nil dividend was declared in FY21 with a priority of managing net debt, investing in value added technology, service and
delivery, expand customer value and continue to see growth in customer sales and revenue.
The Group incurred significant items net of tax effect totaling $580,698 including:
Costs relating to onerous contracts $458,580 from long term technology infrastructure and printers, and additional costs
identified in relation to the closure of the ACT rental premises.
Government assistance of $599,664 including Jobkeeper payment and cashboost grant, before tax representing
$810,357 and cash received of $1.1 million in FY21.
Costs associated with an organisational restructure of $333,022 relates to the reduction of roles from a combination of
improved integration, efficiency, and offshoring.
Impairment of Right of Use Asset of $374,524. With COVID-19 and associated restrictions on mobility and increased
employee flexibility the occupancy of leased premises both during the fiscal period and for the remainder of the leases is
significantly impacted. Therefore, an assessment of the carrying value of the assets in Sydney, Melbourne and Brisbane
were undertaken, resulting in an impairment.
Costs associated with other items is $14,236.
Operational Key Performance Indicators
Energy Buying
No. of successful AEX auctions
Average AEX contract duration (months)
TWhs sold via Auction (annualised equivalent)
Average annualised MWhs per successful AEX
Average $/MWh
Total Auction bid value1
No. of electricity tender events
No. of gas tender events
Managed & Embedded Networks
Sites under current contract2
Total Energy Management sites under contract
Average Metrics contract duration (months)
Retailer and Embedded Network tenancies
Total sites
Ongoing Services future contracted revenue
Current Revenue not Invoiced
Non-Current Revenue not Invoiced
Total Revenue not Invoiced
1 Electricity component of contract only, i.e. excluding network and other charges
2 Does not include contracts which are signed, but yet to commence service delivery
3 Some comparable key performance indicators have been restated
FY21
FY20
% change
727
30.7
0.80
1,102
$54.6
$115m
23
21
759
29.4
0.80
1,124
$75.4
$154m
31
29
-4.2%
+1.3 mths
0%
-2.0%
-27.6%
-25.3%
-25.8%
-27.6%
30 June 2021
30 June 20203
Variance
5,604
38
3,629
9,233
$15.4m
$3.4m
$2.8m
$6.2m
6,445
41
3,570
10,015
$16.7m
$3.2m
$3.0m
$6.2m
-841
-3 mths
+59
-782
-$1.3m
+$0.2m
-$0.2m
$0m
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 12
Forward contracted revenue
While revenues continue to decline, future contracted revenue has been stabilising after many years of decline. 1H FY21 saw
growth for the first time in 5 years with 98% growth in gross Metrics sales contracts to a balance at the end of Dec 20 of
$17.3million. However, the future contracted revenue balance reverted to a position of $15.4 million at 30 June 21. This
reduction was the result of -40% growth of Metrics Sales contracts, the loss of 1 major corporate customer and retail billing
renewals at end of contract, therefore these renewals have lower forward contracted revenue balances until renewal in the
next 6 months.
The Company continues to focus on improving acquisitions, retentions, customer service and enhancing the Energy
Management offering with a key strategy to see growth in future contract revenue for annuity based revenue streams.
Revenue Not Invoiced
Revenue from Auction, Commission based tenders and Tariff revenues are recognised upfront once the Auction is complete
and the contract signed between the retailer and customer. The payments are received over the life of the contract. A contract
asset called “Revenue not Invoiced” holds the balance of $6.2 million to be received as cash in the future for revenue
recognised in current and previous fiscal periods. The balance of $6.2 million remains stable over 2 years, with growth in new
sales orders offsetting the reduction in the balance from invoicing to retailers.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 13
Business Priorities
Energy Action's focus going forward is sustainable, profitable growth. Key priorities are:
1. Customer growth. We have 20-year customer relationships, and our customers use ~10% of the total commercial
national electricity market. Organic sales growth is our top priority.
2. Technology investment. Give our customers easy to use energy management software. To retain and win customers.
3. Net Zero. We are Net Zero. We will help our customers lower their emissions with our energy buying and energy
management services.
COVID-19
The Energy Action team has continued to demonstrate incredible resilience in a period of significant uncertainty and
change for all organisations during the COVID-19 pandemic.
However, revenue has been impacted by COVID-19 as clients deferring decisions, especially in Victoria with prolonged
lockdown. In Embedded Networks we saw COVID-19 impacting large shopping centres and other corporate tenancies,
with reduced sites under management.
Operationally the organisation is operating effectively despite prolonged lockdowns across the company sites in Sydney,
Melbourne and Clark in the Philippines. Jobkeeper payments continued to be received for the period ending 30 September
2020, and the deferred payments relating to GST, PAYG, payroll tax and FBT from the previous fiscal period has reduced
cash in FY21 as expected.
The impact of the COVID-19 pandemic and associated lockdowns, in conjunction with system issues that necessitated
additional manual processes, delayed the preparation and audit of the Company’s financial statements for the year
ending 30 June 21.
Outlook
Energy Action's focus going forward is sustainable, profitable growth. With a focus on organic sales growth, technology
investment, and providing our clients with Net Zero services. However, the Group will not be providing Guidance at this time
due to the prolonged and unclear impact of COVID-19.
Risks to achieving financial outcomes in relation to future prospects
Energy Action identifies major risks using an enterprise wide risk program. Energy Action faces a wide variety of risks due to
the nature of the industry in which it operates. In relation to each risk, Energy Action has in place actions to reduce the
likelihood of the risk eventuation and / or to reduce, as far as practicable, the adverse consequences of the risk should it
occur. Many of the risks are influenced by factors external to, and beyond the control of Energy Action. Details of Energy
Action’s main risks and the related mitigations are set out below:
Risk
Risk Description
Potential consequences and mitigation strategies
Customer
Retention/Ac
quisition
Failure to attract and retain
sufficient customers to
sustain the business
Increasing
competition
The risk that Energy Action
is unable to differentiate
from competitors.
Continued focus on acquisitions and retention rates. Ongoing review of
retention continues to examine all aspects of sales activity, identifying
actions that are required from operations and administration to improve
customer retention. Strong pipeline management and Sales Plan to
drive acquisitions growth and market share. Leadership in transition to
Net Zero.
Review of service offerings undertaken during FY21 led to the
repositioning of product lines. Continuing innovation in core Energy
Buying and Energy Management products in particular focused on
innovation for “Green Energy” and focus to make energy simpler,
cleaner and lower cost. The competitor scan indicated EAX performed
well against other competitor offerings with price and products
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 14
Risk
Risk Description
Failure to
deliver
against
customer
obligations.
The risk that Energy Action
is unable to meet its
contractual obligations to
customers for the delivery
of services.
Earnings and
Cash Flow
The risk of failing to
maintain adequate earnings
and funding to finance
growth objectives and to
generate adequate returns
for shareholders.
Occupational
Health &
Safety
(OH&S)
The risk of not operating
safely and in accordance
with relevant legislation
leading to an employee
injury.
Employee
engagement
and
performance
The risk of failing to attract
and retain the best talent
available.
Loss of key
staff
Legal risk –
Competition
and
consumer
law or terms
of the
company’s
AFS licence.
Cyber
Security Risk
The risk of company
performance declining due
to key staff either leaving or
being unavailable
unexpectedly or due to high
turnover of non-key staff
hampering performance
due to training lead times.
The risk of legal action
following a breach of the
Competition and Consumer
Act or the terms of Energy
Action’s Australian
Financial Services Licence.
Cyber-attack or similar
event involving
unauthorised access to
EAX’s IT systems leading
to denial of systems and/or
corruption of data.
Potential consequences and mitigation strategies
remaining competitive and new product Green Auction first to market
offering.
Potential earnings and reputational impact from failure to deliver
contracted services has been mitigated by repositioning from
unprofitable markets, improved business processes for delivery of
ongoing services, including the replacement of Energy Action’s core
Customer and Contract Management platforms, and increased risk
management planning for customer outcomes. Energy Action initiates
and collects analysis of core product NPS scores and brand on an
ongoing basis.
Mitigated by implementation of a focused back to basics strategy and to
establish the core foundations for growth. This includes a leaner
management structure, improve sales growth, company capability,
service delivery and employee engagement through building a high
performance culture. In addition, mitigated by improved visibility of key
performance indicators and drivers of performance, timely and
transparent market disclosures, and maintenance of strong relationships
with banking partners and shareholders..
Potential for employee injury and Company reputation addressed by
OH&S systems and practices. Whole of company reporting includes
safety, increase risk of wellbeing and health risk. COVID-19 was
mitigated and managed by and Emergency Response Team which
provided ongoing training and updates to OH&S policies and office
locations and processed. The OH&S risk has also reduced with limited
requirements to attend sites for projects with the discontinuation of the
Advisoy business.
Impacts on performance due to unavailability of talent or alternatively
the departure or disengagement of talent. This is mitigated by staff
development plans, succession plans and remuneration strategies. It is
monitored by regular staff engagement surveys and exit interviews to
monitor and gather insights for action. Engagement scores remain at 5
year high.
Mitigated by organisational talent review, staff reviews, identification of
points of vulnerability, cross training, succession planning and
appropriate remuneration strategies. It is monitored by regular staff
engagement surveys and staff exit interviews to monitor and gather
insights for action. Engagement scores remain at 5 year high.
Likelihood of breaches reduced by training of all outward facing staff in
Consumer and Competition Law requirements. AFSL compliance
system in place. Procedures in place for monitoring and reporting of
breaches and potential breaches.
Procedures for systems recovery are in place including off site storage
of data. Systems restoration has been completed within 24 hours where
a cyber breach has occurred. Business Continuity Plan (BCP) in place,
in-house development & support team, control over infrastructure
through cross training, migration of platforms & offsite hosting of IT.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 15
Environmental - Our Commitment to Net Zero
Energy Action remains committed to contributing to the achievement of the UN Sustainability Development Goals and leading
our clients to Net Zero, recognising its obligations both locally and globally, to the present and succeeding generations.
Energy Action is leading in defining best practice for renewable energy sourcing and will set its own demanding standards of
its operations where none exist.
Energy Action has invested significantly this year in raising the environmental awareness of the public, governments, industry,
and the general community by promoting the concept of Net Zero and by openly recognising the need to drive change in the
energy markets to support ongoing renewable energy investment.
During the year the Company has launched a capability for commercial and industrial energy users to conduct a frictionless
reverse Solar Auction for behind the meter solar projects, and brought to market a new contract standard for commercial and
industrial energy buyers to procure a renewable energy supply agreement through our Green Auction process. The Company
has baselined our own emissions for FY20 and we are in the process of securing Climate Active status as a Carbon Neutral
organisation.
The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of
a state or territory. However, Energy Action is committed to implementing the requirements of all applicable Commonwealth,
State and local environmental legislation and regulations and, where possible, exceeding any relevant minimum requirements.
Meetings of Directors
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of
meetings attended by each Director was as follows:
Board
Meeting
Audit & Risk
Committee
Nomination and Remuneration
Committee
No. Eligible
to attend
No. Attended
No. Eligible
to attend
No. Attended
No. Eligible
to attend
No. Attended
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane
(appointed 25/2/2021)
13
13
13
7
13
13
13
7
4
4
4
1
4
4
4
1
3
3
3
1
3
3
3
1
Indemnifying Officers or Auditor
During or since the end of the financial year, the Company has given an indemnity or entered into an agreement to indemnify,
or paid or agreed to pay insurance premiums as follows:
The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by
them in defending legal proceedings arising from their conduct while acting in the capacity of Director of the Company,
other than conduct involving a wilful breach of duty in relation to the Company.
To the extent permitted by law, the Company has agreed to indemnify its auditors, RSM Australia Partners, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify RSM Australia Partners during or since the financial year.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 16
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those
proceedings. The Company was not a party to any such proceeding during the year.
As detailed in Contingent Liabilities a proceeding in the Federal Court of Australia has been filed against the Company.
Non-audit Services
The Board of Directors, in accordance with advice from the audit and risk management committee, is satisfied that the
provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external
auditor’s independence for the following reasons:
all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not
adversely affect the integrity and objectivity of the auditor;
the nature of the services provided does not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board; and
no fees were paid or payable to RSM Australia for non-audit services provided during the year ended 30 June 2021.
Corporate Governance Policy
Energy Action Limited (“Energy Action”) is committed to the achievement of superior financial performance and long-term
prosperity, while meeting stakeholders’ expectations of sound corporate governance practices. The Energy Action Board
determines the corporate governance arrangements. As with all its business activities, Energy Action is proactive in respect
of corporate governance and puts in place those arrangements which it considers are in the best interests of shareholders,
and consistent with its responsibilities to other stakeholders.
This statement:
reports against the 3rd edition of the ASX Corporate Governance Council’s Principles and Recommendations
(ASX Principles) and the practices detailed in this Statement are current as at 16 October 2020; and
has been approved by the Board and is available of Energy Action’s website at
http://www.energyaction.com.au/about/corporate-governance
Events after the Reporting Period
The impact of COVID-19 and extended lockdowns across Australia since 30th June 2021, in particular New South Wales and
Victoria has seen clients deferring decisions, and connection and collaboration with customers and employees more difficult.
The Company has qualified for the NSW 2021 COVID-19 Jobsaver scheme expecting to receive $.05 million for each week of
lockdown in NSW estimated to be 11 weeks, equivalent to $0.55 million.
No other matters or circumstances have arisen since the end of the half-year which significantly affected or could significantly
affect the operations of the consolidated group, the results of those operations, or the state of affairs of the consolidated group
in future financial years.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 17
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Energy Action 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:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
C J Hume
Partner
Sydney, NSW
Dated: 23 September 2021
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Remuneration Report (Audited)
The directors present the Remuneration Report for Energy Action Limited (“Company”) and its consolidated entities (“Group”)
for the year ended 30 June 2021.
Remuneration Framework
1.1
Role of the Remuneration Committee
The Remuneration Committee ensures that the remuneration of directors and senior executives is consistent with market
practice and sufficient to ensure that the Group can attract, develop and retain the best individuals. The committee review
directors’ fees, and remuneration of the CEO and senior executives against the market, Group and individual performance.
The committee consisted of four directors, namely Nitin Singhi (Chairman), Murray Bleach, Bruce Macfarlane (appointed 25
February 2021) and Paul Meehan. The committee charter is available on the Group’s website.
The committee oversees governance procedures and policy on remuneration including:
General remuneration practices,
Performance management,
Bonus and incentive schemes, and
Recruitment and termination.
Through the committee, the board ensures the company’s remuneration philosophy and strategy continues to be designed to:
Attract, develop and retain Board and executive talent,
Create a high-performance culture by driving and rewarding executives for achievement of the Group’s strategy and
business objectives, and
Link incentives to the creation of shareholder value.
In undertaking its work, the committee seeks advice as required.
1.2
Key Management Personnel
Key Management Personnel (“KMP”) are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including any director of the Company or subsidiaries. The following
persons were KMPs during the financial year. Unless otherwise indicated, they were KMPs for the entire year.
1.2.1. Directors
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Executive Director (appointed 25 February 2021)
1.2.2. Senior executives
John Huggart
Chief Executive Officer
Tracy Bucciarelli Chief Financial Officer
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 19
1.3
Remuneration Consultants
Where necessary, the Board seeks advice from independent experts and advisors including remuneration consultants.
Remuneration consultants are used to ensure that remuneration packages are appropriately structured and are consistent
with comparable roles in the market. Remuneration consultants are approved by, and recommendations provided directly to,
non-executive directors (the remuneration committee). When remuneration consultants are engaged, the remuneration
committee ensures that the appropriate level of independence exists from the Group’s management. No remuneration
consultants were used this year.
1.4
Long term incentive scheme
Purpose and type of equity awarded
The Group operates a long-term incentive scheme (LTI) for its senior executives. The LTI is governed by the Performance
Rights and Options Plan (PROP), under which performance options are granted to participants. Each performance right
entitles the participant to one share in Energy Action at the time of vesting subject to meeting the conditions and financial
consideration as outlined below.
The LTI aligns key employee awards with sustainable growth in shareholder value over time. It also plays an important role in
employee recruitment and retention.
Number of instruments awarded
On 30 June 2020, 777,000 performance options were granted to senior executives under the LTI Performance rights and
option plan. As at 30 Jun 2021, 582,750 performance options are remaining. Energy Action forfeited performance options for
senior executives who left prior to vesting date. The total number of remaining options granted is divided into five equal
tranches, which will be tested against a performance hurdle at staggered intervals.
Valuation
All tranches have a strike price of 41 cents.
Performance hurdles
The number of options that ultimately vest (if any) is subject to satisfaction of a performance hurdle. Testing of options against
the performance hurdles will occur annually, with the possibility of re-testing if hurdles are not satisfied in the first instance.
The performance hurdle is written around Total Shareholder Return (TSR). In Order for some options to vest, the minimum
TSR target is 20% p.a. If the stretch TSR target of 40% p.a. is reached, all options will vest. In between minimum and stretch
targets, the proportion of options that vests increases linearly between 50% and 100% of the options granted.
Performance Criteria
Proportion of Options Vesting
If TSR is less than 20% pa
If TSR is equal to 20% pa
No options vest
50% of the options vest
If TSR lies between 20% and 40% pa
The proportion of options that vests increase linearly from 50% to 100%
If TSR equals or exceeds 40% pa
100% of the options vest
Note: In calculating the TSR over the respective vesting periods, a starting base price of 37 cents will be used.
Vesting of the options is also subject to a service condition which requires the recipient to remain continuously employed with
Energy Action through to the vesting date. This report assumes that the service condition will be fully satisfied.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 20
LTI Outcomes
In respect of the performance rights granted to senior executives and certain other employees on 12 March 2018 under the
Performance Rights & Options Plan (PROP), vesting only occurs when and if service and performance conditions are met.
Neither the TSR nor EPS hurdles were met for the year ending 30 June 2021 for such performance rights. Therefore, no rights
will vest in 2021.
In respect of the performance options granted to senior executives on 30 June 2020, Performance Rights & Options Plan
(PROP), vesting occurs based on TSR performance conditions. During the year ended 30 June 2021 the performance
conditions were not met and therefore, no rights will verst in 2021.
Number of instruments awarded
As at 30 June 2021, the PROP accounted for nil% (FY20 Nil) of issued securities of the Group, made up of nil (FY20 Nil)
performance rights. This was due to no performance hurdle has been met in respect of the rights issued.
Remuneration
1.5
Fees payable to Directors
Fees paid to non-executive directors reflect the demands which are made on, and the responsibilities of, directors. Directors’
fees are reviewed annually by the board. Directors who chair or are members of a committee do not receive fees for these
services.
When required, the board considers the advice of independent remuneration consultants to ensure directors’ fees are
appropriate and in line with the market. The chairman’s fees are determined independently to the fees of directors and are
based on comparative roles in the market. The chairman is not present at any discussion relating to the determination of his
remuneration. Directors’ fees are determined within an aggregate fee pool limit approved by shareholders. This is currently set
at $400,000 per annum.
The annual fee structure for directors for the year ended 30 June 2021, including superannuation, was as follows:
Base fee
Non-Executive
Chairman
Non-Executive
Director 1
Non-Executive
Director 2
Executive Director*
$ FY21
$ FY20
25/02/21-30/6/21 1/10/20-30/6/21
45,000
-
1/7/20-30/9/20
32,000
1/4/20-30/6/20
32,000
1/7/19-31/3/20
45,000
-
-
36,000
36,000
36,000
25,600
36,000
-
-
36,000
25,600
-
36,000
36,000
-
* Bruce Macfarlane was appointed as an executive director on 25th Feb 2021.
The above fees include committee membership. The tables at the end of this remuneration report provide details of fees and wages paid
during the financial year to each executive and non-executive director.
In FY 21 the executive director, non-executive directors, and chairman continued to receive fees reduced by 40%. Due to the
impact that COVID-19 has on the business, the directors and chairman fees was temporarily reduced by a further 20% for this
pool for 3 months until 30 Sep 2020.
1.6
Senior executives
The framework for the remuneration of senior executives consists of a mix of fixed and variable remuneration. The
components are:
Base remuneration package and benefits, inclusive of superannuation (Total Fixed Remuneration)
Short-Term Incentive – based on the Group’s, team and individual performance and results delivered against pre-
determined Key Performance Indicators (KPIs)
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 21
Long Term Incentive – governed by the Performance Rights and Options Plan (PROP)
The combination of the above components comprises the executive’s total remuneration.
The Group undertakes a market benchmarking analysis and provide recommendations. The market analysis considers the
target total remuneration opportunity as well as its core components and the mix of those components. In addition, the
information also contains a view on market and emerging trends in executive remuneration structures and the mix of fixed and
performance-based remuneration arrangements. The agreed remuneration mix for the CEO and CFO for the year ended 30
June 2021 was:
Chief Executive Officer
Chief Financial Officer
81%
84%
18%
15%
1%
1%
Fixed Component
STI Bonus Component
LTI Component
Long Term Incentive (LTI)
The LTI component percentage set out above as part of the annual remuneration is based on the fair value of the options
granted for the CEO and CFO (see detailed explanation below). The Performance Options granted for the benefit of the CEO
and CFO vest in equal proportions over a five-year vesting period on the basis of share price appreciation.
Short-Term Incentive (STI)
The STI is based upon performance against the Group financial performance and results from the Group’s performance
review process. Mid-year and final year performance reviews measure performance against established KPI’s and criteria
which are compiled in a matrix comprising Group and individual components. The specific company measures include
profitability, revenue growth and customer satisfaction. Individual measures are developed having regard to functional plans
and targets, aligned to the company strategy.
The outcome of the performance review process is a rating, applied to each of these three components for an individual,
culminating in a percentage (capped at 100%). The final percentage allocated to each person is then applied to the STI
potential to determine the actual STI payment to be made to an individual.
The performance matrix used to determine actual STI earnings against the STI potential for the CEO and CFO is:
Chief Executive Officer
Chief Financial Officer
Company
70%
70%
Individual
30%
30%
The company 70% is made up of Company NPAT 40%, Sales Orders and Auction Volume 10%, Client NPS 10% and
Employee engagement 10%.
The Board is responsible for assessing the performance of the CEO. The CEO is responsible for assessing the performance
of other executives.
Bonus payments are made annually, where applicable, in September in relation to the preceding year.
The actual percentage of STI potential and LTI potential earned by the CEO and CFO for the year ended 30 June 2021 was:
Chief Executive Officer
Chief Financial Officer
0%
0%
0%
0%
% of Bonus Potential
% LTI Potential
The STI potential for each individual is set at the beginning of the year, having regard to service agreement terms and
conditions, and relates to the appropriate extent of the at-risk component of the executive’s remuneration. The broader
company performance criteria ensure that an overall management focus is maintained by the executives, however the
inclusion of individual criteria is also necessary to ensure that each person is recognised and rewarded for their individual
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 22
contribution and efforts. Payment of any individual KPI achievement is conditional on the Group meeting a minimum threshold
Operating Profit.
Service agreements
On appointment, all directors enter into an agreement which outlines obligations and minimum terms and conditions.
Remuneration and other terms of employment for the CEO and other key management personnel are formalised in
employment agreements. Each of these agreements specify the components of remuneration to which they are entitled and
outline base salary, eligibility for incentives and other benefits including superannuation.
Key terms for the CEO and CFO are as follows:
Name
Term of agreement
Termination*
John Huggart
On-going (no fixed term)
Tracy Bucciarelli
On-going (no fixed term)
3 months base salary termination by company or 3 months
termination by executive
3 months base salary termination by company or 3 months
termination by executive
* Termination benefits are payable at the option of the company in lieu of notice, other than termination for cause.
Remuneration tables
1.7
Remuneration table for the year ended 30 June 2021
Details of remuneration of directors and executive KMP of the Group for the 2021 financial year are set out in the following
table. The executive KMP are considered to be the CEO, CFO and Executive Director only.
Short term benefits
Directors
Cash
salary and
fees
Additional
fees
Cash
bonus
Non
monetary
benefits
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane1
40,572
30,502
32,877
70,668
Sub-total
174,619
Executives
John Huggart
322,958
Tracy Bucciarelli
218,319
Sub-total
Total
541,277
715,896
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post
employ
ment
benefits
Super
3,622
2,898
3,123
6,713
16,356
21,694
20,740
42,434
Long term benefits
Terminatio
n benefits
Long
service
leave
Share
based
payment
s
Performan
ce rights
-
-
-
3,207
3,207
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
58,790
3,207
Total
Total
44,194
33,400
36,000
80,588
194,182
344,652
239,059
583,711
777,893
1Bruce Macfarlane appointed as director effective 25 February 2021. The above cash salary & fees for Bruce Macfarlane includes Directors
fess of $11,252.46 director fees and salary of $62,622.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 23
1.8
Remuneration table for the year ended 30 June 2020
Details of remuneration of directors and KMP of the Group for the 2020 financial year are set out in the following table. The
KMP are considered to be the CEO and COO/CFO only.
Short term benefits
Post
employment
benefits
Long term benefits
Share
based
payments
Total
Additional
fees
Cash
bonus
Non
monetary
benefits
Super
Termination
benefits
Long
service
leave
Performance
rights
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,571
-
25,571
25,571
-
-
-
-
-
-
-
-
-
3,622
2,898
3,123
2,603
12,246
21,003
20,383
41,386
53,632
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44,194
33,400
36,000
30,000
143,594
368,665
234,939
603,604
747,198
Cash
salary
and
fees
40,572
30,502
32,877
27,397
131,348
322,092
214,555
536,647
667,995
Directors
Murray Bleach
Paul Meehan
Nitin Singhi
Mark de Kock 1
Sub-total
Executives
John Huggart
Tracy Bucciarelli
Sub-total
Total
Notes 1 Mark de Kock resigned 30 April 2020
Relative Proportion of Remuneration
The relative proportion of remuneration of KMP that was linked to performance and those that were fixed are as follows:
Fixed Remuneration
At Risk – Cash Bonus/Other
At Risk - Securities
Directors
2021
20202
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane1
Executives
John Huggart
Tracy Bucciarelli
%
100
100
100
100
100
100
%
100
100
100
N/A
100
100
1Appointed as Director effective 25 February 2021
2 Restated
2021
%
20202
%
-
-
-
-
-
-
-
-
-
-
-
-
2021
%
N/A
N/A
N/A
N/A
-
-
20202
%
N/A
N/A
N/A
N/A
-
-
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 24
Performance rights of key management personnel
No Performance Options were granted to key management personnel as at 30 June 2021 (FY20 582,750).
Fair value of Performance Options
The fair value of each Performance Option is determined on the date the Performance Options are granted using a Monte
Carlo Simulation valuation model. For details on the valuation of the Performance Options, including models and assumptions
used, please refer to Note 18.
All Performance Options granted for the benefit of the CEO and CFO vest in equal proportions over a five-year vesting period.
The Performance Options are exercisable immediately at vesting date, subject to achievement of the relevant performance
hurdles.
The tables below disclose the number of Performance Options available to KMP. No performance options were issued in
2021. Performance Options do not carry any voting or dividend rights and can only be exercised once the vesting conditions
have been met, until their expiry date.
Total value of Performance Options issued:
30-Jun-21
Granted
Balance at
1-Jul-20
$
John Huggart
12,113
Tracy Bucciarelli
6,057
Total
18,170
Grant
Date
Options
vested &
transferred
Options
cancelled/
forfeited/
other
Options
expired
without
exercise
Net
change
Balance at
end of
period
$
-
-
-
-
-
-
$
-
-
-
$
-
-
-
$
-
-
-
$
-
-
-
$
12,113
6,057
18,170
Total number of Performance Options issued:
30-Jun-21
Granted
Grant Date
Balance at
1-Jul-20
Options
vested &
transferred
Options
cancelled/
forfeited/
other
Options
expired
without
exercise
Net
change
Balance at
end of
period
No.
No.
No.
No.
No.
No.
No.
John Huggart
388,500
Tracy Bucciarelli
194,250
Total
582,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
388,500
194,250
582,750
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 25
There were no alterations to the terms and conditions of Performance Options awarded as remuneration since their grant
date.
Shareholdings of Directors and Key Management Personnel
30-Jun-21
Directors
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane1
Executives
John Huggart
Tracy Bucciarelli
Total
Balance
1 July 2020
Net change
Transfer from
Eplan
KPM resigned
Balance
30 June 2021
5,100,700
4,792,846
3,000
-
-
-
1,903,303
1,034,483
50,000
-
-
-
11,849,849
1,034,483
-
-
-
-
-
1,245
1,245
-
-
-
-
-
-
-
5,100,700
4,792,846
3,000
2,937,786
50,000
1,245
12,885,577
1 Bruce Macfarlane appointed as director 25 February 2021
30-Jun-20
Directors
Murray Bleach
Paul Meehan
Nitin Singhi
Mark de Kock2
Executives
John Huggart
Tracy Bucciarelli
Total
Balance
1 July 2019
Net change
Transfer from
Eplan
KPM resigned
Balance
30 June 2020
2,700,700
2,400,000
4,792,846
3,000
50,000
-
-
-
-
(50,000)
50,000
-
7,546,546
2,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,100,700
4,792,846
3,000
-
50,000
-
9,946,546
2 Mark de Kock resigned as director effective 30 April 2020
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 26
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available
to other parties unless otherwise stated. Outstanding balances at year end are unsecured and interest free. No guarantees
have been provided or received.
The following transactions occurred with related parties:
Key Management Personnel
Meehans Solicitors1
Horizon Services Trust2 – business consulting
Total Key Management Personnel
Consolidated Group
2021
$
2020
$
-
11,137
11,137
990
36,300
37,290
1 The Group procures legal advice from Meehans Solicitors. Paul Meehan is the Principal of Meehans Solicitors and his firm provided legal services to the value of
nil in FY21 (FY20 $990).
2 The Group procures management services from Horizon Private Capital Partners. Nitin Singhi is director of Horizon Private Capital Partners. $11,137 was paid
in FY21 (FY20 $36,300). Horizon provided consulting advice in relation to the introduction of new partners.
1.9
Company Performance
The Group results for the financial year ended 30 June 2021 was a Statutory loss after tax of $1 million compared to a loss of
$2.5 million in the prior year.
FY21
FY20
FY19
FY18
(Restated)
FY17
Revenue & other income ($000’s)
14,359
19,782
24,801
31,767
32,957
Net profit / (loss) after tax ($000’s)
(1,000)
(2,487)
(12,093)
3,261
1,773
Operating profit after tax ($000’s)
(420)
24
1,005
3,261
2,521
Earnings per share – Operating
-1.55 cents
0.09 cents
3.87 cents
12.56 cents
9.71 cents
Market capitalisation
$7.2m
$4.2m
$10.4m
$18.2m
$19.5m
Closing share price
$0.265
$0.16
$0.40
$0.70
$0.75
This director’s report is signed in accordance with a resolution of the Board of Directors.
Murray Bleach
Director
Dated: 23 September 2021
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 27
Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
Revenue
Total Revenue
Cost of goods and services sold
Employee benefits expense
Rental expense
Travel costs
Administration expenses
Impairment of software
Impairment of right-of-use assets
Restructuring cost
Onerous contracts & leases
Depreciation and amortisation expense
Accelerated Depreciation and amortisation expense
Financing costs
Profit/(Loss) before income tax
Income tax (expense)/benefit
Loss for the period attributable to owners of the parent entity
Note
Consolidated Group
2021
$
2020
$
14,359,111
19,781,729
14,359,111
19,781,729
(600,936)
(1,573,075)
(9,318,086)
(10,558,047)
(385,067)
(42,884)
(2,942,795)
-
(506,113)
(450,029)
(619,703)
(556,645)
-
(282,617)
(709,090)
(185,513)
(4,151,188)
(3,611,538)
-
(485,046)
-
(1,369,955)
(204,722)
(339,773)
(1,345,764)
(3,406,218)
345,506
919,462
(1,000,258)
(2,486,756)
5.1
5.2
5.3
12
13(a)
5.4
5.5
5.6
6
Other comprehensive loss net of income tax that may be reclassified
subsequently to profit and loss
Exchange differences on translation of foreign operations
Total comprehensive loss for the period attributable to owners of the parent
entity
(1,654)
(1,152)
(1,001,912)
(2,487,908)
Loss per share:
Basic loss per share for the year attributable to ordinary equity holders of the parent
Diluted loss per share for the year attributable to ordinary equity holders of the
parent
Cents
(3.71)
Cents
(9.58)
(3.71)
(9.58)
7
7
The accompanying notes form part of these financial statements
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 28
Consolidated Statement of Financial Position
For the year ended 30 June 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Current Tax Asset
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Other assets
Other Intangible assets
Deferred tax asset
Right of Use Asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Short-term provisions
Loans & Borrowings
Lease liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Other long-term provisions
Loans and Borrowings
Deferred tax liability
Lease liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share based payments reserve
Retained earnings
Dividend profit reserve
Foreign currency translation reserve
TOTAL EQUITY
Note
Consolidated Group
2021
$
2020
$
9
10
15
13
10
11
13
12
15
13a
14
16
17
14a
14
16
17
15
14a
18b
18c
18g
18d
2,423,004
1,431,227
152,695
4,458,581
8,465,507
69,141
101,609
3,003,618
1,028,219
281,473
264,766
4,748,826
13,214,333
2,308,409
630,228
230,226
447,806
3,616,669
65,692
185,042
6,731,783
-
133,970
7,116,487
10,733,156
2,481,177
3,195,898
2,402,416
21,450
4,231,544
9,851,308
81,948
137,057
2,983,425
514,695
85,989
640,519
4,443,633
14,294,941
3,354,514
743,709
-
336,896
4,435,119
-
173,828
6,176,175
-
336,126
6,686,129
11,121,248
3,173,693
6,837,906
175,072
(11,256,519)
6,723,064
6,537,906
167,832
(10,256,261)
6,723,064
1,654
1,152
2,481,177
3,173,693
The accompanying notes form part of these financial statements
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 29
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Consolidated Group
Note
Balance at 30 June 2019
Profit/(Loss) attributable to
owners of parent entity
Foreign currency translation
reserve
Total comprehensive income
Dividend profit reserve
Interest rate hedging reserve
Share based payments
18d
18g
18f
18c
Dividends paid or provided for
8
Ordinary
Issued
Share
Capital
Share
Based
Payments
Reserve
Retained
Earnings
Dividend
Profit
Reserve
$
$
$
6,537,906
170,833
(1,006,800)
-
-
-
-
-
(2,486,756)
(39,641)
(2,526,397)
-
-
-
-
-
-
-
-
-
-
-
(3,001)
-
(6,723,064)
6,723,064
-
-
-
-
-
-
Foreign
currency
translation
reserve
Interest
Swap
Reserve
$
$
Total
$
1,430
(9,610)
5,693,759
-
-
(2,486,756)
(278)
(278)
-
-
-
-
-
-
-
9,610
-
-
-
(39,918)
(2,526,674)
-
9,610
(3,001)
-
3,173,693
Balance at 30 June 2020
6,537,906
167,832
(10,256,261)
6,723,064
1,152
Balance at 30 June 2020
Profit/(Loss) attributable to
owners of parent entity
Foreign currency translation
reserve
Total comprehensive income
Issue of share capital
Dividend profit reserve
Interest rate hedging reserve
Share based payments
18d
18b
18g
18f
18c
Dividends paid or provided for
8
6,537,906
167,832
(10,256,261)
6,723,064
1,152
-
3,173,693
-
-
-
300,000
-
-
-
-
-
(1,000,258)
-
-
-
-
-
7,240
-
-
(1,000,258)
-
-
-
-
-
(11,256,519)
-
-
-
-
-
-
-
-
-
-
(1,000,258)
502
502
-
-
-
-
-
-
-
-
-
-
-
-
(502)
(999,756)
300,000
-
-
7,240
-
6,723,064
1,654
-
2,481,177
Balance at 30 June 2021
6,837,906
175,072
The accompanying notes form part of these financial statements
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 30
Consolidated Statement of Cash Flow
For the year ended 30 June 2021
Note
Consolidated Group
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Restructuring costs
Government assistance
Onerous Contracts
Interest received
Interest paid
Income tax (paid)/refunded
Net cash (used in) / provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Software development costs
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Capital raised
Repayment of Lease Liability
Bank loan drawn down/(repayment)
Net cash (used in) / provided by financing activities
Net (decrease)/increase in cash held
Cash (including restricted cash) at beginning of financial year
Cash (including restricted cash) at end of financial year
2021
$
2020
Restated *
$
16,811,386
22,964,303
(17,662,305)
(19,212,767)
(225,973)
(619,568)
1,103,500
545,117
(407,470)
1,065
-
4,611
(208,324)
(316,265)
18,777
18,517
(569,344)
3,383,948
(69,299)
(36,599)
(757,130)
(1,866,030)
(826,429)
(1,902,629)
300,000
-
(477,121)
(370,215)
800,000
622,879
476,279
106,064
(772,894)
1,587,383
3,195,898
1,608,515
2,423,004
3,195,898
20a
11
12
18b
20b
9
9
The accompanying notes form part of these financial statement
* Reclassification of repayment of Lease liability to Cashflows from Financing Activities
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 31
Notes to the Financial Statements for year ended 30 June 2021
Note 1: Corporate Information
The consolidated financial statements and notes represent those of Energy Action Limited and its Controlled Entities (the
“consolidated group” or “group” or ‘’EAX’’) for the year ended 30 June 2021. The financial statements were authorised for
issue in accordance with a resolution of the directors on 23 September 2021.
Energy Action Limited (“the Parent”) is a company limited by shares incorporated in Australia whose shares are publicly traded
on the Australian Securities Exchange. The Group is a for profit entity.
The nature of the operation and principal activities of the Group are described in the directors’ report.
Note 2: Summary of Significant Accounting Policies
2.1 Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001.
Material accounting policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The
financial report is presented in Australian dollars. The functional currency is also Australian dollars.
The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
2.2 Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 24.
2.3 New Accounting Standards and interpretations
(i) New or amended accounting standards and interpretations adopted
The accounting policies adopted are consistent with those of the previous financial year except as follows :
The Group has adopted a change in accounting policy in relation to commissions paid to Sales Representatives and external
Channel Partners. From 1 July 2018, commissions paid were expensed directly to commissions expense at the time of the
sales contract being entered into with the customer. From 1 July 2020, the Group has moved to capitalise the commissions
expense relating to annuity revenue, and expense this commission over a period of time. The percentage of commissions
expense relating to annuity revenue is determined to be 62%, based on 12 months historical revenue. The capitalised
commissions is subsequently expensed over a period of 30 months, aligned with the average length of managed service
contracts sold during a 12 month period. The remainder of commissions paid 32% is expensed immediately in line with
commercial payment to the Sales representative or external channel partner. The policy has been adopted as at 1 July 20 with
no change to comparison period.
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 32
Note 2: Summary of Significant Accounting Policies (Continued)
(ii) Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and
have not been adopted by the Group for the annual reporting period ending 30 June 2021 are outlined in the table below:
AASB 2020-5 Amendments to Australian Accounting Standards – Insurance
Contracts
Effective for the
annual reporting
period beginning
on
January 1, 2021
Expected to be
initially applied
in the financial
year ending
Jun 30,2022
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate
Benchmark Reform – Phase 2
January 1, 2021
Jun 30,2022
These accounting standards do not expect to have material impact for Energy Action.
Going concern assessments and solvency
The Company expects to comply with going concern and solvency assessments given the outlook for operating EBITDA and
operating cash.
There is no other material impact in relation to accounting standards and ASIC focus for Energy Action in FY21.
2.4 Key Accounting Policies
a.
Principles of Consolidation
The consolidated financial statements are comprised of the financial statements of the Group and its subsidiaries as at 30
June 2021. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
The contractual arrangement(s) with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
The Group re-assesses 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. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date the
Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 33
Note 2: Summary of Significant Accounting Policies (Continued)
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest
and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is
recognised at fair value.
b.
Income Tax and other taxes
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the
reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or
loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be
utilised, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset
or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss
In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in
joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be
utilised
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in OCI or directly in equity.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 34
Note 2: Summary of Significant Accounting Policies (Continued)
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are
recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a
reduction in goodwill (as long as it does not exceed goodwill) if it reflects new information obtained about facts and
circumstances that exist at the acquisition date that, if known, would have affected the amount recognised at that date where
recognised during the measurement period or recognised in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current
tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax
liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
When the GST incurred on a sale or purchase of assets or services in not payable to or recoverable from the taxation
authority, in which case the GST is recognised as part of the revenue or the expense item or as part of the cost of
acquisition of the asset, as applicable
When receivables and payables are stated with the amount of GST included
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the statement of financial position. Commitments and contingencies are disclosed net of the amount of GST recoverable from,
or payable to, the taxation authority.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of
operating cash flows.
c.
Plant and Equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any
accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable
amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are
recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a re-valued asset.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be
received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their
present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the
financial period in which they are incurred.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 35
Note 2: Summary of Significant Accounting Policies (Continued)
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is
depreciated on a straight-line basis over the asset’s useful life to the consolidated group commencing from the time the asset
is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or
the estimated useful lives of the improvements
The depreciation rates used for each class of depreciable assets are
Class of Fixed Asset
Depreciation Rate
Computer equipment
25% - 33.3%
Furniture and fittings
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the statement of comprehensive income. When re-valued assets are sold, amounts included in the revaluation
surplus relating to that asset are transferred to retained earnings.
d.
Right-of-use assets
The right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as appropriate, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred and except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life
of the asset, whichever is shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for
any remeasurement of leased liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for the short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
e.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the consolidated entity’s incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if
there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written
down.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 36
Note 2: Summary of Significant Accounting Policies (Continued)
f.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity’s normal operating cycle; it is held primarily for the purpose of trading. It is expected to be realised within
12 months after the reporting period or the asset is cash or cash equivalent unless restricted from being exchanged or used to
settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity’s normal operating cycle; it
is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current
g.
Financial Instruments
Financial assets – initial recognition and subsequent measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.
The Group recognises an allowance for expected credit losses (ECLs) for all receivables and contract assets. ECLs are
recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a
12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial
recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the
timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group
does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date.
The Group has established a provision matrix that is based on its historical credit loss experience, the impact of the
Coronavirus (COVID-19) pandemic and adjusted for forward-looking factors specific to the debtors and the economic
environment.
The Group adopted AASB 9 effectively moves from an “incurred losses” model to an “expected losses” model, which requires
a forward-looking assessment of potential default events and losses over the life of these assets. The Group’s trade
receivables do not contain a significant financing component, lifetime expected credit losses can be recognised right on initial
recognition. The Group elected to use the simplification method hence a provision matrix can be used.
The Group’s trade and other receivables are exposed to credit risk with ageing analysis and impairment provided for thereon.
Amounts are considered as “past due” when the debt has not been settled, with the terms and conditions agreed between the
Group and the customer or counterparty to the transaction. Receivables that are past due are assessed for impairment by
ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may
not be fully repaid to the Group.
Financial Liabilities – Loans and borrowings
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the Effective Interest Rate method. Gains and losses are recognised in profit
or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 37
Note 2: Summary of Significant Accounting Policies (Continued)
h.
Impairment of Non-financial Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An
asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its
value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded subsidiaries or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for
each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally
cover a period of five years. Long-term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categories consistent
with the function of the impaired asset, except for properties previously revalued with the revaluation taken to Other
Comprehensive Income (OCI). For such properties, the impairment is recognised in OCI up to the amount of any previous
revaluation.
For assets excluding goodwill and intangibles with indefinite useful life, an assessment is made at each reporting date to
determine whether there is an indication that previously recognised impairment losses may no longer exist or may have
decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount.
A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the
asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the
statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a
revaluation increase.
The following assets have specific characteristics for impairment testing:
Intangible assets
Intangible assets with indefinite useful lives are tested for impairment annually as at 30 June at the CGU level, as appropriate,
and when circumstances indicate that the carrying value may be impaired. Intangible assets with finite lives are amortised
over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for any intangible asset with a finite useful life is reviewed at least at
each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a
change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in the Statement
of Comprehensive Income in the expense category consistent with the function of the intangible asset.
i.
Intangible assets other than Goodwill
Software, research and development costs
Research costs are expensed as incurred. Development expenditures including website development costs on an individual
project are recognised as an intangible asset when the Group can demonstrate:
The technical feasibility of completing the intangible asset so that it will be available for use or sale
Its intention to complete and its ability to use or sell the asset
How the asset will generate future economic benefits
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 38
Note 2: Summary of Significant Accounting Policies (Continued)
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated
impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is
amortised over the period of expected future benefit. Amortisation is expensed through the profit and loss. During the period of
development, the asset is tested for impairment annually.
The useful life of development costs is finite. It is amortised on a straight-line basis over its expected useful life. The
development costs are internally developed. The amortisation rates are as follows:
Software development costs
20%
j.
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the
reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts
expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the
present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is
given to employee wages increases and the probability that the employee may satisfy vesting requirements. Those cash flows
are discounted using market yields on high quality corporate bonds with terms to maturity that match the expected timing of
cash flows.
k.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result, and that outflow can be reliably measured. When the Group expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a
separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is present in the
income statement net of any reimbursement. Provisions are measured using the best estimate of the amounts required to
settle the obligation at the end of the reporting period.
Onerous contracts
An onerous contract is considered to exist where the company has a contract under which the unavoidable cost of meeting the
contractual obligations exceed the economic benefits estimated to be received. Present obligations arising under onerous
contracts are recognised as a provision to the extent that the present obligation exceeds the economic benefits estimated to
be received.
Restructuring
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has
raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or
announcing its main features to those affected by it. Future operating losses are not provided for.
l.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are reported within short-
term borrowings in current liabilities in the statement of financial position. For the statement of cash flows presentation
purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on
the statement of financial position.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 39
Note 2: Summary of Significant Accounting Policies (Continued)
m.
Revenue and Other Income
The Group is in the business of providing Energy Buying services, Energy Management, Embedded Networks and other
services (Major Product Lines) predominately in Australia. Revenue from contracts with customers is recognised when
controls of the services are transferred to the customer at an amount that reflects the consideration to which the Group
expects to be entitled in exchange for those services.
Revenue from Auction and Commission based tenders are recognised upfront once the Auction is complete and contracts
signed between the retailer and the customer. The commercial and payment terms of the contract term remain unchanged
with payments being received over the life of the contract. Accordingly, a contract asset called “Revenue not invoiced” has
been created to recognise the difference between revenue recognised and the amount invoiced.
Auction contracts provide a customer with a right to cancel during the contract period. The Group estimates cancellation of
Auction revenue during the contract period of approximately 5.2% based on the last 2 years of history in addition to specific
provision of some aged items. Accordingly it was assessed that 5.2% of the total values of contracts entered into should be
provided for on the balance sheet as a provision for cancellations on an ongoing basis. This has the effect of reducing revenue
and providing for the risk of cancellation, for the period between recognising revenue and invoicing the retailer.
Other Energy Buying and Energy Management revenue, Embedded Networks revenue are recognised in the accounting
period in which services are rendered and/or in accordance with the percentage of completion of the project. (Revenue is
transferred over time)
n.
Capitalised Commissions Paid
The Group has moved to capitalise the commissions expense relating to annuity revenue, and expense this commission over
a period of time. The percentage of commissions expense relating to annuity revenue is determined to be 62%, based on 12
months historical revenue. The capitalised commissions is subsequently expensed over a period of 30 months, aligned with
the average length of managed service contracts sold during a 12 month period. The remainder of commissions paid 32% is
expensed immediately in line with commercial payment to the Sales representative or external channel partner.
o.
Foreign Currency Transaction
The Group’s consolidated financial statements are presented in Australian dollars, which is also the Parent’s functional
currency. For each entity the Group determines the functional currency and items included in the financial statements of each
entity are measured using that functional currency. The Group uses the direct method of consolidation and has elected to
recycle the gain or loss that arises from using this method.
(i) Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot
rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of
exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or
loss with the exception of monetary items that are designated as part of the hedge of the Group’s net investment of a foreign
operation. These are recognised in other comprehensive income until the net investment is disposed of, at which time, the
cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those
monetary items are also recorded in other comprehensive income.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 40
Note 2: Summary of Significant Accounting Policies (Continued)
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also
recognised in other comprehensive income or profit or loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the
derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction
is the date on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance
consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each
payment or receipt of advance consideration.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets
and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot
rate of exchange at the reporting date
(ii) Group companies
On consolidation, the assets and liabilities of foreign operations are translated into dollars at the rate of exchange prevailing at
the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the
transactions. The exchange differences arising on translation for consolidation are recognised in other comprehensive income.
On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation
is recognised in profit or loss.
p.
Trade & other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within the due date.
q.
Work-in-progress
When the outcome of a contract can be estimated reliably, contract revenue and contract costs are recognised as revenue
and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date. When it is
probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense
immediately as an onerous contract.
At the end of each accounting period the long-term contracts percentage or milestone completion is assessed individually, and
any unbilled completion is recognised as work in progress income for the period.
r.
Share based payments
The Group provides benefits to employees in the form of equity settled share-based payments, whereby employees render
services in exchange for shares or rights over shares. The fair value of rights granted to eligible employees under the Energy
Action Performance Rights & Options Plan (PROP) is recognised as an employee benefits expense, with a corresponding
increase in the employee equity benefits reserve. The fair value is measured at grant date and recognised over the period in
which the employee becomes entitled to the PROP grant. The fair value at grant date is determined by an independent valuer.
Details of the fair value of share-based payment plans are set out in Note 18 (c).
At the end of each reporting period, the Group revises its estimate of the numbers of rights expected to vest. The amount
recognised as an expense is only adjusted when the rights do no vest due to non-market related conditions.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 41
Note 2: Summary of Significant Accounting Policies (Continued)
s.
Interest Rate Hedging
The Group uses derivative financial instruments, such as interest rate swaps to hedge its interest rate risks. Such derivative
financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.
At the inception of the hedge relationship, the Group formally designates and documents the hedge relationship to which it
wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The
documentation includes identification of the hedging instrument, the hedge item, the nature of the risk being hedged and how
the entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes
in the hedged item’s fair value or cash flows attributable to the hedged risk.
At the end of each reporting period, the Group assesses the hedge effectiveness between hedged item and hedging
instrument to determine whether the risk management objective for the hedging relationship has changed.
The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
t.
Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
u.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Note 3: Significant Accounting Judgements, Estimates and Assumptions
Impairment of intangible assets
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group
that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use
calculations which incorporate various key assumptions.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with suppliers with reference to the fair value of the equity
instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires
determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate
also requires determining the most appropriate inputs to the valuation model including the expected life of the share option,
volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value
for share-based payment transactions are disclosed in Note 18 (c).
Development costs
Development costs are capitalised in accordance with the accounting policy in Note 2(i). Initial capitalisation of costs is based
on management’s judgement that technological and economic feasibility is confirmed, usually when a product development
project has reached a defined milestone according to an established project management model. In determining the amounts
to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount
rates to be applied and the expected period of benefits. This includes significant investments in the development of software.
The software is being enhanced and /or developed for use within the business, improving operational efficiency.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 42
Note 3: Significant Accounting Judgements, Estimates and Assumptions (Continued)
Onerous Contracts
Energy Action’s policy for onerous contracts is stated in Note 2(i). The application of this policy requires management to make
certain estimates and assumptions as to future events and circumstances in relation to costs to meet contractual obligations.
Employee benefits
Employee benefits are predominantly annual leave and long service leave. In determining these provisions, management
makes assumptions in regard to future wage increases, and the probability that employees may satisfy vesting requirements
for long service leave.
Work in progress
Energy Action performs services under contracts that last longer than one reporting period. For these contracts, revenue and
costs are recognised on a percentage of completion or milestone basis. Percentage of completion or milestone by contract is
estimated by relevant service delivery manager based on their assessment of completion versus milestones.
Revenue not invoiced and Provision for Cancellation
The Group adopted the full retrospective approach to implement AASB 15 Revenue from Contracts with Customers from 1
July 2018. The revenue is recognised upfront once the auction is complete and contracts signed between the retailer and the
customer. An asset “Revenue not invoice” has been created to recognise the difference between revenue recognised and the
amount invoiced. The total value of contracts entered into historically experienced cancellation of auction revenue during the
contract period. A provision for cancellations of 5.2% has been provided at adoption to reduce the risk of cancellation. The
assessment of historical cancellations is reviewed at each reporting period and revised accordingly. As at 30 June 2021, a
provision of 5.2% of the total value of revenue not invoiced has been calculated based on historical cancellation over the past
24 months in addition to specific provision for some aged items.
Capitalised Commissions
The Group has moved to capitalise the commissions expense relating to annuity revenue, and expense this commission over
a period of time. The percentage of commissions expense relating to annuity revenue is determined to be 62%, based on 12
months historical revenue. The capitalised commissions is subsequently expensed over a period of 30 months, aligned with
the average length of managed service contracts sold during a 12 month period. The remainder of commissions paid 32% is
expensed immediately in line with commercial payment to the Sales representative or external channel partner.
Note 4: Segment information
Identification of reportable segments
The Group has identified one reportable operating segment, which provides electricity and gas procurement services, energy
management, and retail billing services in Australia. The types of services provided are detailed below.
Types of Services
Energy Action’s principal activities are providing integrated energy management services to a diverse base of Commercial,
Industrial and small and medium sized business customers. The business has previously reported business units comprising
Energy Buying, Contract Mgt and Environmental Reporting and PAS (or Advisory). Due to the repositioning of Advisory and
the growth of Embedded Networks the business line reporting has been aligned to the following services:
Energy Buying – Broking or Consulting using a range of procurement methodologies including auctions (via the
Australian Energy Exchange), tenders (small and large market), progressive and structured purchasing, corporate power
purchase agreements, and broking of Solar and Energy projects.
Energy Management – Managed client energy contracts and environmental reporting, including account management,
liaison with their retailer, validating their bill, ensuring the right tariff and helping them to understand how they are using
energy.
Embedded Networks – Support for retailers and embedded network operators with retail billing, management and
reporting.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 43
Note 4: Segment information (Continued)
Other – in the past 2 years, Energy Action has repositioned away from building monitoring, audits and energy efficiency
initiatives, building ratings and energy generation or efficiency projects including solar.
The Australian Energy Exchange (AEX) electricity and gas procurement service is an online, real time and reverse auction
platform for business customers which provides the opportunity to competitively obtain energy supply contracts from various
energy providers.
Energy Metrics is an independent Energy Management Services platform which transforms energy data into usable business
intelligence that is easy to understand and essential for improving overall business efficiency.
The types of energy management services include energy consumption monitoring and costing, energy emissions monitoring,
contract administration, detailed technical reporting, desktop energy efficiency review and additional reporting and monitoring.
Embedded Networks included both embedded networks and retailer onboarding, meter reading, billing, standing data
management, receivables management and performance reporting. In addition, Energy Action provides consultancy and
onboarding services for Embedded Network operators.
In the past 2 years, Energy Action has repositioned away from building monitoring, audits, and energy efficiency initiatives,
building ratings and energy generation or efficiency projects including solar. The Group has completed or novated the order
book related to these activities as at 30 June 2021.
In Note 5 revenue is analysed by service line, however over all the performance of the business is monitored as one.
Accounting Policies and inter-segment transaction
The accounting policies used by the Group in the reporting segment internally are the same as those contained in Note 2 to
the accounts.
Revenue by customer
There is no revenue with a single external customer that contributes more than 10% of total revenue.
Note 5: Revenue, Other Income and Expenses
Year-ended 30-Jun-21
Energy Buying
Energy
Management
Embedded
Networks
$
$
$
Others
$
Total
$
Revenue from Contract
with Customer
5,490,400
5,490,400
7,511,386
1,334,067
23,258
14,359,111
7,511,386
1,334,067
23,258
14,359,111
Year-ended 30-Jun-20
Energy Buying
Energy
Management
Embedded
Networks
$
$
$
Others
$
Total
$
6,544,171
11,012,682
1,339,394
885,482
19,781,729
6,544,171
11,012,682
1,339,394
885,482
19,781,729
Revenue from Contract
with Customer
5.1
Timing of Revenue Recognition
Services transferred at a point in time
Services transferred over time
Total Revenue from contracts with customers
All material revenues are generated in Australia.
Consolidated Group
2021
$
2020
$
4,405,322
5,034,539
9,953,789
14,747,190
14,359,111
19,781,729
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 44
Note 5: Revenue, Other Income and Expenses (continued)
Note
Consolidated Group
2021
$
2020
$
5.2
Employee benefits
Salaries
Commissions
Superannuation
Share based payment expenses
Other
Government assistance
Total Employment benefits
5.3
Administrative costs
Accounting, audit and tax fees
Advertising
Legal and professional fees
Telephone and internet
Computer maintenance costs
Bad debt expense
Recruitment Costs
Insurance Costs
Subscription
Entertainment & sustenance costs
FBT expense
Consulting
Other expenses
Total Administrative costs
5.4
Depreciation and amortisation
Depreciation
Lease depreciation
Amortisation - Software
Total Depreciation & Amortisation
5.5
Accelerated Depreciation and amortization and write down
Accelerated Amortisation – Software
Accelerated Depreciation - Furniture and Fitting
Total Depreciation & Amortisation
5.6
Financing costs / (income)
Interest income
Interest expenses
Borrowing costs
Lease interest
Total Financing costs / (income)
8,424,651
9,192,017
235,471
848,532
16,131
603,658
460,656
954,276
(3,001)
792,359
(810,357)
(838,260)
9,318,086
10,558,047
185,339
303,426
71,242
24,809
202,062
286,334
87,378
90,146
1,189,396
2,081,979
20,332
54,377
227,522
111,609
60,271
57,767
190,006
446,699
22,005
91,917
166,366
138,622
84,307
107,400
152,589
640,083
2,942,795
4,151,188
104,726
208,313
243,606
156,824
351,846
861,285
556,645
1,369,955
-
-
-
(1,065)
210,731
25,746
47,205
282,617
204,722
-
204,722
(4,611)
276,187
17,324
50,873
339,773
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 45
Note 6: Income Tax Expense
a.
The components of tax expense comprise:
Current tax
Current tax – under/(over) prior year
Tax rate change
Deferred tax – Current Year
Deferred tax – Prior Year
b.
The prima facie tax on profit from ordinary activities before income tax is
reconciled to the income tax as follows:
Prima facie tax (benefit) / payable on profit / (loss) from ordinary activities
before income tax at 26.0% (2020: 27.5%)
Add Tax effect of:
Permanent Differences
—
—
—
—
—
—
—
—
Tax rate change
Share based payments/trust
Government Incentives
Goodwill impairment
Other permanent differences
DTA Not Recognised / Recognised
Prior year adjustments
Loss carry back effective rate impact
Less Tax effect of:
Deductible Expense
—
Unbooked tax losses
Income tax attributable to entity
Note
Consolidated Group
2021
$
2020
$
(557,506)
16,516
(11,259)
16,416
18,256
4,960
222,264
(940,656)
(15,521)
(18,438)
(345,506)
(919,462)
15
15
(349,899)
(936,710)
11,259
-
(26,000)
-
4,961
123
-
-
14,677
11,353
-
(888)
5,345
-
993
(182)
-
-
(345,506)
(919,462)
The applicable weighted average effective tax rates are as follows:
27.15%
26.99%
Energy Action Limited and its 100% owned subsidiaries formed a tax consolidated group with effect from 3 March 2009.
Energy Action Limited is the head entity of the tax consolidated group.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 46
Note 7: Earnings per Share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary
shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic diluted earnings per share computations:
2021
$
2020
$
Net loss attributable to ordinary equity holders of the parent from continuing operations
(1,000,258)
(2,486,756)
Net loss attributable to ordinary equity holders of the parent for basic earnings
(1,000,258)
(2,486,756)
Net loss attributable to ordinary equity holders of the parent adjusted for the effect of dilutions
(1,000,258)
(2,486,756)
2021
No.
2020
No.
Weighted average number of ordinary shares for basic earnings per share
26,988,600
25,954,117
Effect of dilution:
Performance rights
-
-
Weighted average number of ordinary shares adjusted for the effect of dilution
26,988,600
25,954,117
Basic earnings / (loss) per share (Statutory)
Diluted Earnings / (loss) per share (Statutory)
(3.71)
(3.71)
(9.58)
(9.58)
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and
the date of completion of these financial statements.
Under the accounting standards, losses are not diluted.
Refer also to the Directors’ Report for further information on the calculation of Operating Profit.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 47
Note 8: Dividends
Dividends paid:
Interim 2021 franked dividend of NIL cents per share
Final 2020 franked dividend of NIL cents per share
a.
b.
Proposed final 2021 franked dividend of NIL cents per share
(Final 2020 franked dividend of NIL cents per share)
Balance of franking account at year end adjusted for franking credits arising
from:
— Opening balance
— Opening balance adjustment
— Payment/(Refund) of provision for income tax
— Dividends recognised as receivables and franking debits arising from
payment of proposed dividends, and franking credits that may be
prevented from distribution in subsequent financial years
Subsequent to year end, the franking account would be reduced by the proposed
dividend reflected per (a) as follows:
Tax rates
The tax rates at which paid dividends have been franked is:
•
•
•
30% - Prior to 1 July 2018
27.5% - from 1 July 2018 – 30 June 2020
26% - 1 July 20 – 30 June 21
Dividends proposed from 1 July 2021 will be franked at the rate of 25%.
Consolidated Group
Note
2021
$
2020
$
-
-
-
-
-
-
-
-
7,535,418
7,553,936
-
-
(18,784)
(18,518)
-
-
7,516,634
7,535,418
-
-
7,516,634
7,535,418
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 48
Note 9: Cash and Cash Equivalents
Cash at bank*
Restricted cash**
Note
Consolidated Group
2021
$
2020
$
2,415,726
3,181,876
7,278
14,022
Total Cash
3,195,898
*Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three
months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
**Refers to cash held in the Energy Action Employee Share Trust; an entity used to manage employee equity plans as well as cash bank guarantee held by the
bank.
2,423,004
22
Note 10: Trade and Other Receivables
CURRENT
Trade receivables
Provision for expected credit loss
Total current trade receivables
NON-CURRENT
Bonds and security deposits
Note
22
22
Consolidated Group
2021
$
2020
$
1,662,216
2,701,714
(230,989)
(299,298)
1,431,227
2,402,416
69,141
81,948
a.
Provision for Impairment of Receivables
Current trade and term receivables are non-interest bearing and generally on 30 to 90-day terms.
Credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties
other than those receivables specifically provided for and mentioned within Note 10. The class of assets described as “trade
and other receivables” is considered to be the main source of credit risk related to the Group.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit
enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as “past due” when the
debt has not been settled, with the terms and conditions agreed between the Group and the customer or counterparty to the
transaction.
The Group policy stipulates that the receivable accounts with an administrator appointed or in liquidation or with 90 days+
outstanding – fully (100%) provided for except where a reasonable estimate can be made of the recoverable amount.
Accounts assigned to a debt collector – 50% provided. Direct customers – expected credit loss (ECL) model based on risk
associated with different ageing bucket. Retailers and Metering companies – no provision required; historical evidence shows
immaterial write-off of debt. Partially due to the pre-approval process for many of the retailers which results in the amounts
validated prior to invoicing. Disputed amounts owing which are in the process of litigation will be provided for on a case by
case basis depending on the probability of recovery.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 49
Note 10: Trade and Other Receivables (Continued)
ECL rates are applied to gross receivable balances after adjusting for any specific bad debts.
Past due but not impaired (days overdue)
Within
Trade
Terms
$
Total
$
< 30
$
31–60
61–90
$
$
91+
$
2021
Trade and term receivables
1,662,216
1,384,699
19,685
116,907
(54,129)
195,054
Expected credit loss allowance
230,989
37,030
Expected credit loss rate
13.9%
2.7%
1,170
5.9%
10,858
9.3%
1,873
-3.5%
1,431,227
1,347,669
18,515
106,049
(56,002)
2020
Trade and term receivables
2,701,714
2,032,343
127,530
Expected credit loss allowance
Expected credit loss rate
299,298
11.1%
38,500
1.9%
842
0.7%
2,402,416
1,993,843
126,688
65,279
3,801
5.8%
61,478
46,382
13,741
29.6%
32,641
180,058
92.3%
14,996
430,180
242,414
56.4%
187,766
Neither the Group nor parent entity holds any financial assets with terms that have been renegotiated, which would otherwise
be past due or impaired.
Revenue not invoiced is shown as net of provision for cancellation in Note 13.
Movements in the allowance for expected credit loss allowance
Consolidated Group
2021
$
299,298
20,332
(44,641)
(44,000)
2020
$
272,062
61,212
(25,168)
(8,808)
230,989
299,298
Opening Balance
Additional provision recognised
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
b.
Collateral Held as Security
Current trade and term receivables are non-interest bearing and generally on 30 to 90-day terms.
No collateral or security is held by the company for loans or receivables.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 50
Note 11: Property Plant and Equipment
Computer equipment:
At cost
Accumulated depreciation
Furniture and fittings:
At cost
Accumulated depreciation
Total Plant and Equipment
Consolidated Group
2021
$
2020
$
2,092,221
2,060,913
(2,008,905)
(1,976,440)
83,316
84,473
1,293,439
1,424,826
(1,275,146)
(1,372,242)
18,293
101,609
52,584
137,057
a.
Movements in Carrying Amounts
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the
current financial year
Consolidated Group:
Balance at 1 July 2019
Additions
Assets disposed
Depreciation expense
Accelerated Depreciation
Balance at 30 June 2020
Additions
Assets disposed
Depreciation expense
Accelerated Depreciation
Balance at 30 June 2021
Note
Computer
Equipment
Furniture and
Fittings
$
$
146,284
34,772
-
110,999
1,827
-
Total
$
257,283
36,599
-
5.4
5.5
5.4
5.5
(96,583)
(60,242)
(156,825)
-
84,473
69,299
-
-
52,584
-
(21)
-
137,057
69,299
(21)
(70,456)
(34,270)
(104,726)
-
-
-
83,316
18,293
101,609
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 51
Note 12: Intangible Assets
Software development costs
Software Impairment
Accumulated amortisation
Net carrying value
Total intangibles
Consolidated Group:
Year ended 30 June 2019
Balance at the beginning of year
Internal development
Disposal
Impairment
Amortisation charge
Accelerated Amortisation
Closing value at 30 June 2020
Year ended 30 June 2020
Balance at the beginning of year
Internal development
Disposal
Impairment
Amortisation charge
Accelerated Amortisation
Closing value at 30 June 2021
5.4
5.5
5.4
5.5
Consolidated Group
2021
$
2020
$
12,193,743
11,518,790
(4,861,538)
(4,861,538)
(6,303,986)
(6,142,557)
1,028,219
514,695
1,028,219
514,695
Software
Development
costs
Total
Intangibles
$
$
3,264,423
3,264,423
1,935,785
1,935,785
(7,967)
(7,967)
(3,611,538)
(3,611,538)
(861,286)
(861,286)
(204,722)
(204,722)
514,695
514,695
514,695
757,130
514,695
757,130
-
-
-
-
(243,606)
(243,606)
-
-
1,028,219
1,028,219
Intangible assets, excluding goodwill, have finite useful lives. The current amortisation charges for intangible assets are
included under depreciation and amortisation expense in the statement of comprehensive income.
Refer to Note 2 for capitalisation policy.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 52
Note 12: Intangible Assets (continued)
12 (a) Impairment testing of goodwill and other intangible assets
AASB 136 (9) “Impairment of Assets” requires an entity to assess at the end of each reporting period whether there is any
indication that impairment exists, and if there are indicators of impairment to reassess the assets recoverable amount. The
recoverable amount is defined in AASB 136 as the higher of fair value less cost to sell, and value in use.
12 (b) Accelerate amortisation
For the year ended 30 June 2021, the Company performed a review of the software assets and reassessed the useful life of
the software asset pool. As a result, it was deemed no additional amortisation was required. In June 2020 some software
assets were assessed to have reduced useful life to 30 June 2020, resulting in an accelerated amortisation of the $0.20 million
processed as a one off.
12 (c) Impairment of software
The Company has made a large investment in business software to replace its legacy applications with Microsoft CRM. As at
30 June, CRM book value was $3,611,538.
Due to extended delays and rework, the project experienced significant increase in implementation cost. The extended project
duration and cost has reduced the opportunity to realise additional future benefits and the completed CRM project will now
incur regular maintenance.
As at 30 June 2020, the Company has assessed that the CRM software assets has a nil valued as at 30 June 2020 and the
Company has impaired this asset by the value of $3,611,538.
Note 13: Other Assets
CURRENT
Prepayments
Other receivables
Work in progress*
Revenue not invoiced*
NON CURRENT
Other receivables
Revenue not invoiced*
* These represents conditional contract asset
Consolidated Group
2021
$
2020
$
465,100
240,165
333,835
283,062
293,143
470,111
3,419,481
3,185,228
4,458,581
4,231,544
246,598
-
2,757,020
2,983,425
3,003,618
2,983,425
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 53
Note 13(a): Right-of-use Assets
NON CURRENT
Right of use asset:
At cost
Impairment
Accumulated depreciation
Consolidated Group:
Year ended 30 June 2019
Balance at the beginning of year
Additions
Depreciation
Impairment
Closing value at 30 June 2020
Year ended 30 June 2020
Balance at the beginning of year
Additions
Depreciation
Impairment
Closing value at 30 June 2021
Consolidated Group
2021
$
2020
$
1,331,038
992,365
(506,113)
-
(560,159)
(351,846)
264,766
640,519
Total Right of
Use Assets
$
-
992,365
(351,846)
-
640,519
640,519
338,673
(208,313)
(506,113)
264,766
During the year the company entered into a lease agreement in Melbourne for a period of 3 years ending 31 July 2023.
Due to COVID the premises in Sydney, Brisbane and Melbourne were unoccupied for the majority of the fiscal period and with
flexible working from home arrangement now in place, the Right-of-use Assets were assessed as being impaired in all
locations to the value of $506,113.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 54
Note 14: Trade and Other Payables
CURRENT
Unsecured liabilities:
Trade payables
Goods & Services tax
Commissions payable
Rebates to customers
Makegood provision
Onerous contracts
Other payables and accrued expenses
NON CURRENT
Unsecured liabilities:
Onerous contracts
a.
Financial liabilities at amortised cost classified as trade and other
payables
Trade and other payables:
- Total current
- Total non current
Consolidated Group
2021
$
2020
$
617,593
158,457
164,037
237,609
90,989
174,169
865,555
535,831
657,550
190,962
28,188
96,525
-
1,845,458
2,308,409
3,354,514
65,692
65,692
-
-
2,308,409
3,354,514
65,692
-
Financial liabilities as trade and other payables
22
2,374,101
3,354,514
Terms and conditions of the above financial liabilities:
– Trade payables are non-interest bearing and are normally settled on 30 or 60 days terms
Other payables are non-interest bearing and have an average term of six months
Note 14(a): Lease Liability
CURRENT
Closing Lease Liability Current
NON CURRENT
Closing Lease Liability Non - Current
Consolidated Group
2021
$
2020
$
447,806
336,896
133,970
336,126
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 55
Note 15: Tax
CURRENT
Current tax asset
NON-CURRENT
Consolidated Group
Deferred Tax 2021
Provisions
Accruals
Fixed assets
Prepaid commissions
Work in progress
Share Based Payments
Sundry
Tax Losses
Revenue not invoiced
Right of Use Asset
Deferred Tax 2020
Provisions
Accruals
Fixed assets
Prepaid commissions
Work in progress
Share Based Payments
Sundry
Consolidated Group
2021
$
2020
$
152,695
21,450
Opening
Balance
$
Tax rate
change
$
Adj Prior
year
$
Charged to
Income
$
Closing
Balance
$
457,080
352,195
1,247,023
(13,344)
(96,838)
-
25,403
-
(1,718,995)
(166,535)
85,988
Opening
Balance
$
493,986
282,623
379,244
(18,379)
(234,187)
948
48,399
320,123
336,458
888,166
(44,362)
-
-
16,281
460,812
(1,629,814)
(66,191)
281,473
Closing
Balance
$
457,080
352,195
(12,805)
(13,458)
(35,527)
1,775
-
-
-
-
-
-
-
-
(19,085)
(15,521)
-
65,193
2,648
-
-
-
(11,259)
(15,521)
(124,152)
(2,279)
(323,330)
(32,793)
96,838
-
25,484
460,812
23,988
97,696
222,264
Tax rate
change
$
(26,370)
(20,319)
(71,944)
770
5,587
-
(1,465)
99,173
9,608
(4,960)
Adj Prior
year
$
Charged to
Income
$
(272,900)
262,365
303,913
(214,023)
-
-
-
-
(12,575)
939,723
1,247,023
4,266
131,762
(948)
(8,956)
(13,344)
(96,838)
-
25,403
-
-
2,610
(1,718,995)
(176,143)
(166,535)
18,438
940,656
85,989
Revenue not invoiced
(1,820,778)
Right of Use Asset
-
(868,145)
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 56
Note 16: Provisions and other liabilities
Analysis of total provisions
Current
Restructuring Provision
Annual leave
Long service leave
Non-current
Long service leave
Consolidated Group
2021
$
202,696
268,017
159,515
630,228
2020
$
-
486,350
257,359
743,709
185,042
185,042
173,828
173,828
Provision for Long-term Employee Benefits
A provision has been recognised for employee entitlements relating to long service leave. In calculating the present value of
future cash flows in respect of long service leave, the probability of long service leave being taken is based on historical data.
The measurement and recognition criteria relating to employee benefits have been included in Note 2.
Note 17: Loans and Borrowings
CURRENT
Market Rate Loan Facility
Less capitalised debt establishment fees
NON CURRENT
Market Rate Loan Facility
Less capitalised debt establishment fees
Utilisation of the facility is summarised in the following table:
Financing facilities
Loan facilities (excluding corporate card facility)
Amounts utilised
Borrowings
Bank guarantees – non-cash
Total amounts utilised
Total amounts unutilised
Consolidated Group
Note
22
2021
$
250,000
(19,774)
230,226
2020
$
-
-
-
6,750,000
6,200,000
(18,217)
(23,825)
22
6,731,783
6,176,175
Consolidated Group
2021
$
2020
$
7,300,000
7,300,000
7,000,000
6,200,000
145,347
176,670
7,145,347
6,376,670
154,653
923,330
As at 30 June 2021, Energy Action had utilised $7.0 million of market rate loan and $0.15 million bank guarantees. The
carrying value of the loans and borrowings materially approximate fair value. Funds advanced under the facility are secured by
a charge over the assets of the Group and includes Interest Cover, Gearing ratio, and asset covenants.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 57
Note 18: Issued Capital and Reserves
Fully paid ordinary shares
a.
Ordinary Shares (number)
At the beginning of the reporting period:
Movement in the year:
-
Shares issued
At the end of the reporting period
Consolidated Group
2021
$
2020
$
6,837,906
6,537,906
6,837,906
6,537,906
Consolidated Group
2021
No.
2020
No.
25,954,117
25,954,117
1,034,483
-
26,988,600
25,954,117
Consolidated Group
2021
$
2020
$
b.
Ordinary Shares ($)
At the beginning of the reporting period:
6,537,906
6,537,906
Movement in the year
-
Shares issued*
At the end of the reporting period
*Issued at $0.29 per share on 09 February 2021
300,000
-
6,837,906
6,537,906
Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of
shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder
has one vote on a show of hands.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 58
Note 18: Issued Capital and Reserves (Continued)
c.
Share based payments reserve
Share-based payment transactions:
The share-based payment reserve is used to recognise the value of equity-settled share-based payment provided to
employees.
On 30 June 2020, 777,000 performance options were granted to senior executives under the 2020 LTI Performance rights and
option plan. The total number of options granted is divided into five equal tranches, which will be tested against a performance
hurdle at staggered intervals. All tranches have a strike price of 41 cents.
However during the year ending 30 June 2021, 194,250 performance options were forfeited due to service criteria not met,
and 582,750 remaining performance options as at 30 June 2021.
The number of options that ultimately vest (if any) is subject to satisfaction of a performance hurdle. Testing of options against
the performance hurdles will occur annually, with the possibility of re-testing if hurdles are not satisfied in the first instance.
The performance hurdle is written around Total Shareholder Return (TSR). In Order for some options to vest, the minimum
target is 20% p.a. If the stretch target of 40% p.a. is reached, all options will vest. In between minimum and stretch targets, the
proportion of options that vests increases linearly between 50% and 100% of the options granted.
Performance Criteria
Proportion of Options Vesting
If TSR is less than 20% pa
No options vest
If TSR is equal to 20% pa
50% of the options vest
If TSR lies between 20% and 40% pa
The proportion of options that vests increase linearly from 50% to 100%
If TSR equals or exceeds 40% pa
100% of the options vest
Note: In calculating the TSR over the respective vesting periods, a starting base price of 37 cents will be used.
Vesting of the options is also subject to a service condition which requires the recipient to remain continuously employed with
Energy Action through to the vesting date. This report assumes that the service condition will be fully satisfied.
A Monte Carlo simulation valuation technique has been adopted to value the performance rights at grant date.
The grant date share price was based on the EAX closing share price of 16 cents as at 30 June 2020 and the option exercise
price for all tranches of options is 41 cents.
The 12 March 2018 performance rights granted to senior executives and certain other employees under the Performance
Rights & Options Plan (PROP), vesting only occurs when and if service and performance conditions are met. As at 30 June
2020 all of these performance rights have been cancelled or forfeited.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 59
Note 18: Issued Capital and Reserves (Continued)
c.
Share based payments reserve (continued)
For the year ended 30 June 2021, the Group has recognised $7,240 of share-based payment expense in the statement of
comprehensive income (30 June 2020: ($3,001)). Share based payments expense is net of reversals due to non-achievement
of targets (EPS targets) and forfeitures in the case of terminated employees.
Share Based Payment Reserve
At the beginning of the reporting period
Share based payment expenses
Prior year adjustments
Employee shares
PROP payment
Transfer Cash to Employee Share Trust
Movement in the year
At the end of the reporting period
Consolidated Group
2021
$
2020
$
167,832
170,833
16,131
(8,891)
-
-
-
(3,001)
-
-
-
-
7,240
(3,001)
175,072
167,832
Note 18: Issued Capital and Reserves (Continued)
d.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation
reserve, as described in Note 2. The reserve is recognised in profit or loss when the net investment is disposed of.
Foreign Currency Translation Reserve
At the beginning of the reporting period
Foreign currency translation reserve write off
Foreign currency translation entry (current period)
Movement in the year
At the end of the reporting period
e.
Capital Management
Consolidated Group
2021
$
1,152
-
502
502
1,654
2020
$
1,430
-
(278)
(278)
1,152
The Group’s capital includes ordinary share capital. Management controls the capital of the Group in order to maintain a
prudent debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations
and continue as a going concern. This includes adjusting dividend payments to shareholders and equity attributable to the
entity holders of the parent.
There is an externally imposed capital requirement of $50,000 to be held in cash, as a requirement of holding an Australian
Financial Services Licence.
The way management controls Group’s capital is by assessing the Group’s financial risks and adjusting its capital structure in
response to changes in those risks and in the market. The responses include the management of debt levels, distributions to
shareholders and share issues.
f.
Interest Rate Hedging Reserve
Exposure to interest rate risk arises on financial assets recognised at reporting date whereby a future change in interest rates
will affect future cash flows or the fair value of fixed rate financial instruments. The Group’s exposure to the risk of changes in
market interest rates relates primarily to the Group’s borrowings balances with floating interest rates. Interest rate risk is
managed primarily using floating interest rates on bank borrowings.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 60
Note 18: Issued Capital and Reserves (Continued)
f.
Interest Rate Hedging Reserve (Continued)
At the end of each reporting period, the Group assesses the hedge effectiveness between hedged item and hedging
instrument to determine whether the risk management objective for the hedging relationship has changed as described in note
2. For the year ended 30 June 2021, the interest rate hedging reserve was NIL (FY20: NIL)
Interest Rate Hedging Reserve
at the beginning of the reporting period
Interest rate hedging entry (reverse prior period)
Interest rate hedging entry (current period)
Movement in the year
At the end of the reporting period
Consolidated Group
2021
$
-
-
-
-
-
2020
$
(9,610)
9,610
-
9,610
-
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
The Group includes within net debt, trade and other payables including provision for income tax, less cash and cash
equivalents. Bank guarantees are excluded from this calculation. The gearing ratios for the year ended 30 June 2021 and 30
June 2020 are as follows:
Bank loans
Less cash and cash equivalents
Net debt / (cash)
Total Equity
Gearing percentage (%)
Note
17
9
Consolidated Group
2021
$
2020
$
6,962,009
6,176,175
(2,423,004)
(3,195,898)
4,539,005
2,980,277
2,481,177
3,173,693
183%
94%
Gearing as measured by total net debt divided by total equity was 183% as at 30 June 2021 and 94% at 30 June 2020.
g.
Dividend Profit Reserve
During the year ended 30 June 2020, some subsidiaries of the Group resolved to reserve current and prior year profits as a
dividend profit reserve. These reserves held in the subsidiaries of Energy Action Australia Pty Limited and Exergy Australia
Limited for the potential future dividend distribution to the Parent Company, Energy Action Limited.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 61
Note 19: Capital and Leasing Commitments
The Company holds a lease commitment as at 30 June 21 for the following locations :
-
Paramatta – ending 30 June 21 – held as Lease Liability (AASB16)
- Melbourne - ending July 2023 – held as Lease Liability (AASB16)
- Canberra – ending Nov 21 – with all costs held as an Onerous Lease provision
The Group has provided the following bank or cash guarantees at 30 June 2021 for regional offices:
– Parramatta office
– Brisbane office
– Melbourne office
*Restated to include cash guarantee in relation to Melbourne office
Consolidated Group
2021
$
145,347
-
26,312
171,659
2020*
$
145,347
31,323
26,312
202,982
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 62
Note 20: Cash Flow Information
a.
Reconciliation of Cash Flow from Operations with Profit after Income Tax
Loss after income tax
– Depreciation and amortisation
–
Loss/(Gain) on disposal of fixed assets
–
Unrealised FX Revaluation
– Share based payments expense
– Amortisation of borrowing costs
–
Impairment
– Restructuring costs
– Onerous Contracts
– Other Significant Items
–
Government assistance
Changes in assets and liabilities, net of the effects of purchase and disposal of
subsidiaries:
–
–
–
–
–
–
(increase)/decrease in trade and term receivables
(increase)/decrease in prepayments and other assets
increase/(decrease) in trade payables and accruals
increase/(decrease) in deferred taxes
increase/(decrease) in loans
increase/(decrease) in provisions
Consolidated Group
2021
$
2020
Restated*
$
(1,000,258)
(2,486,756)
556,645
1,574,677
21
502
7,240
115,272
506,113
224,056
212,233
(2,203)
-
-
(3,001)
33,876
3,611,538
50,000
-
-
-
(293,143)
976,148
1,204,401
(239,384)
(1,232,764)
(326,730)
(39,913)
(326,322)
369,698
(254,255)
(900,946)
-
477,859
Cash flow (used in)/from operations
(569,344)
3,383,948
b.
Reconciliation of liabilities arising from financing activities
Total liability from
financing activities
Opening
Balance
Cash flow
Acquisition
FY21
Long term borrowings
$
$
6,200,000
800,000
$
-
Lease Liability
673,022
(477,123)
385,877
FY20*
Long term borrowings
Lease Liability
5,723,721
476,279
-
-
(370,215)
1,043,237
Non-cash changes
Foreign
exchange
movement
Fair value
changes
Closing Balance
$
-
-
-
-
$
-
-
-
-
$
7,000,000
581,776
6,200,000
673,022
* Reclassification of Lease payment relating to Right of use assets from Operating Activities to Financing Activities
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 63
Note 21: Related Party Disclosures
The financial statements include the financial statements of the Group and the subsidiaries listed in the following table:
a.
Controlled Entities Consolidated
Country of Incorporation
Percentage Owned (%)*
Subsidiaries of Energy Action Limited:
2021
2020
Eactive Consulting Pty Limited
Australia
100%
100%
Energy Action (Australia) Pty Limited
Australia
100%
100%
EAIP Pty Limited
Australia
100%
100%
ACN 087 790 770 Pty Limited
Australia
100%
100%
Exergy Holdings Pty Limited
Australia
100%
100%
Exergy Australia Pty Limited
Australia
100%
100%
Exergy New Zealand Limited
New Zealand
100%
100%
Energy Advice Pty Ltd
Australia
100%
100%
Employee Share Trust
Australia
100%
100%
* Percentage of voting power is in proportion to ownership
b.
i.
The Group’s main related parties are as follows:
Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or
indirectly, including any director (whether executive or otherwise) of that entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to the Remuneration Report contained in the Director’s
Report.
ii.
Other related parties:
Other related parties include entities controlled by the ultimate parent entity and entities over which key management
personnel exercise significant influence.
The Group procures management services from Horizon Private Capital Partners. Nitin Singhi is a director of Horizon Services
Trust, which was paid $11,137 in FY21 (FY20 $36,300). Horizon provided consulting advice in relation to the introduction of
new partners.
The Group procures legal advice from Meehans Solicitors. Paul Meehan is the Principal of Meehans Solicitors and his firm
provide legal services to the value of $NIL in FY21 (FY20 $990).
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 64
Note 21: Related Party Disclosures (Continued)
a.
Compensation of Key Management Personnel (KMP)
Refer to the Remuneration Report contained in the Director’s Report for details of the remuneration paid or payable to each
member of the Group’s key management personnel for the year ended 30 June 2021.
The totals of remuneration paid to KMP of the Group during the year are as follows:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits – superannuation
Total Compensation
Consolidated Group
2021
$
2020
$
715,896
693,566
3,207
58,791
777,894
-
53,632
747,198
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period relating to KMP.
b.
The ultimate parent
Energy Action Limited is the ultimate parent based and listed in Australia.
Note 22: Financial Risk Management
The Group’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial
liabilities is to finance the Group’s operations. The Group has trade and other receivables, and cash and short-term deposits
that arrive directly from its operations.
The totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting
policies to these financial statements, are as follows:
Financial assets
Cash and cash equivalents, including restricted cash
Receivables
Bond and security deposits
Revenue not invoiced
Work in Progress
Total financial assets
Financial liabilities
Loans and Borrowings
Trade & Other payables
Total financial liabilities
Note
9
10
10
13
13
17
14
Consolidated Group
2021
$
2020
$
2,423,004
3,195,898
1,431,227
2,402,416
69,141
81,948
6,176,501
6,168,653
333,835
470,111
10,433,708
12,319,026
6,962,009
6,176,175
2,374,101
3,354,514
9,336,110
9,530,689
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 65
Note 22: Financial Risk Management (Continued)
Financial Risk Management Policies
The Audit and Risk Management Committee (ARMC) has been delegated responsibility by the Board of Directors for, amongst
other matters, monitoring and managing financial risk exposures of the Group. The ARMC monitors the Group’s financial risk
management policies and exposures and approves financial transactions within the scope of its authority. It also reviews the
effectiveness of internal controls relating to financing risk and interest rate risk. The ARMC meets at least three times a year
and minutes of the ARMC are reviewed by the Board.
The ARMC’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while
minimising potential adverse effects on financial performance. Its functions include the review of the credit risk policies and
future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting
of interest rate risk.
a.
Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its
financing activities, including deposits with banks and financial institutions, and other financial instruments.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the
approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the
financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and
counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for
impairment. Credit terms are generally 30 to 90 days from the invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating. The institutions
selected are determined by the Board.
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period excluding the
value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net
of any provisions) as presented in the statement of financial position.
The Group has no significant concentrations of credit risk with any single counterparty or group of counterparties. Details with
respect to credit risk of trade and other receivables are provided in Note 10.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality. Aggregates of
such amounts are as detailed in Note 10.
b.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile;
managing credit risk related to financial assets;
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 66
Note 22: Financial Risk Management (continued)
Within 1 Year
1 to 5 years
Over 5 years
Total
2021
2020
2021
2020
2021
2020
2021
2020
$
$
$
$
$
$
$
$
Consolidated
Group
Financial
liabilities due for
payment
Bank loans
230,226
-
6,731,783
6,176,175
-
-
6,962,009
6,176,175
Trade and other
payables
(excluding est.
annual leave)
Total expected
outflows
Financial assets
— cash flows
realisable
Cash and cash
equivalents
Restricted cash
Trade, term and
loans receivables
Work in progress
Bonds and security
deposits
Revenue not
invoiced
Total anticipated
inflows
Net (outflow)/inflow
on financial
instruments
2,308,409
3,354,514
65,692
-
-
-
2,374,101
3,354,514
2,538,635
3,354,514
6,797,475
6,176,175
-
-
9,336,110
9,530,689
2,415,726
3,181,876
7,278
14,022
1,431,227
2,402,416
333,835
470,111
-
-
-
-
-
-
-
-
-
-
69,141
81,948
3,419,481
3,185,228
2,757,020
2,983,425
7,607,547
9,253,653
2,826,161
3,065,373
-
-
-
-
-
-
-
-
2,415,726
3,181,876
-
7,278
14,022
-
1,431,227
2,402,416
-
-
333,835
470,111
69,141
81,948
-
6,176,501
6,168,653
-
10,433,707
12,319,026
5,068,912
5,899,139
(3,971,314)
(3,110,802)
-
-
1,097,597
2,788,337
c.
Interest rate risk
Interest rate risk arises as a result of changes in market interest rates and will affect the future cash flows. The Group
manages its interest rate risk by having a variety of loan rollover terms from 30 days to 180 days. Cash and cash equivalents
are all on short term deposits. As at 30 June 2021, the Group had bank loans of $7 million on 90-day terms at (line fee of
2.0%, usage fee of 1.40% and 0.08% interest rate).
d.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market prices for Energy Action Limited comprise interest rate risk. Financial instruments affected by interest
risk include cash at bank.
1)
Interest Rate Risk
Exposure to interest rate risk arises on financial assets recognised at reporting date whereby a future change in interest rates
will affect future cash flows or the fair value of fixed rate financial instruments. The Group’s exposure to the risk of changes in
market interest rates relates primarily to the Group’s borrowings balances with floating interest rates net of cash.
The company has insignificant other balances that have interest payment terms.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 67
Note 22: Financial Risk Management (Continued)
2)
Sensitivity Analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The table indicates the impact
on how profit and equity values reported at balance date would have been affected by changes in the relevant risk variable
that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable
is independent of other variables, and the other assumptions remain consistent with prior years.
Year ended 30 June 2021
Year ended 30 June 2020
Consolidated Group
Increase/decrease in basis points
$
Profit before tax
$
+/- 100
+/- 100
-/+ 65,068
-/+ 61,385
The assumed movement in basis points for the interest rate sensitivity analysis is based on currently observable market
environment, showing a significantly lower volatility than in prior years.
Note 23: Auditors’ Remuneration
The auditor for Energy Action Limited is RSM
Amounts received or due and receivable by Ernst & Young (Australia)
(resigned 30 June 2019) for:
—
An audit or review of the financial report of the entity and any other entity in the
consolidated group
Amounts received or due and receivable by RSM (Australia)
(appointed 1 July 2019) for:
—
An audit or review of the financial report of the entity and any other entity in the
consolidated group
Consolidated Group
2021
$
2020
$
-
25,000
132,200
110,000
132,200
135,000
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 68
Note 24: Information relating to Energy Action Limited (“the parent entity”)
The following information has been extracted from the books and records of the parent and has been prepared in accordance
with Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Reserves
Prior year adjustment*
Retained earnings
Total Equity
Profit/(loss) of the parent entity
Total comprehensive income/(loss) of the parent entity
Parent
2021
$
2020
$
19,004,658
16,082,200
15,113,895
15,013,084
34,118,553
31,095,284
(10,833,569)
(10,077,676)
(6,829,544)
(8,773,999)
(17,663,113)
(18,851,675)
8,305,600
8,005,600
175,071
158,940
4,167,998
-
3,806,771
4,079,069
16,455,440
12,243,609
(272,298)
(186,115)
(272,298)
(186,115)
* Prior year adjustment relates to Intercompany transactions withing the group being rectified relating to prior year transactions
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and some of its subsidiaries are not party to a deed of cross guarantee under which each company
guarantee the debts of the others. No deficiencies of assets exist in any of these subsidiaries.
Contingent Liabilities
A demand made in the FY20 period in respect of alleged unpaid amounts for previous work provided to the Company is
ongoing. The Claimant has now filed proceedings in the Federal Court of Australia. The Company has disclaimed liability and
is defending the action. The Company is of the view that it unlikely that any significant liability arises. The directors are of the
view that no material losses will arise in respect of the legal claim at the date of these financial statements. The parent entity
had no contingent liabilities as at 30 June 2021.
Capital Commitments – Property, Plant and Equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
Note 25: Events After the reporting period
The impact of COVID-19 and extended lockdowns across Australia since 30th June 2021, in particular New South Wales and
Victoria has seen clients deferring decisions, and connection and collaboration with customers and employees more difficult.
The Company has qualified for the NSW 2021 COVID-19 Jobsaver scheme expecting to receive $.05 million for each week of
lockdown in NSW estimated to be 11 weeks, equivalent to $0.55 million.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of the
consolidated group in future financial years.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 69
Director’s Declaration
In accordance with a resolution of the Directors of Energy Action Limited, I state that:
1.
In the opinion of the Directors:
a.
The financial statements and notes of Energy Action Limited for the financial year ended 30 June 2021 are in
accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of its financial position as at 30 June 2021 and performance
complying with Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001
b.
c.
The financial statements and notes also comply with International Financial Reporting Standards as disclosed
in Note 2.1
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
On behalf of the board
Murray Bleach
Director
23 September 2021
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 70
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
GPO Box 5138 Sydney NSW 2001
T +61 (0) 2 8226 4500
F +61 (0) 2 8226 4501
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of Energy Action Limited
Opinion
We have audited the financial report of Energy Action 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 the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 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 and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Revenue Recognition
Refer to Note 1 (m) in the financial statements
The Group generates its revenue from a variety of
services such as procurement, managed services,
retail services and other service lines.
Our audit team focused on revenue recognition
across these services due to its importance and
to shareholders. The Group has
significance
experienced a drop in revenue over a number of
financial years, including the current financial year.
Therefore, revenue is seen as a key performance
indicator and consequently, it necessitated greater
involvement of the audit team and a high portion of
audit effort was applied to gather sufficient audit
evidence.
Refer to Note 1 (m) of the financial report for the
related disclosures.
Impairment of Intangible Assets
Refer to Note 12 in the financial statements
Other
intangible assets comprise capitalised
software development costs which were assessed
by the Group for indicators of impairment. If
indicators of impairment exist during the year, an
impairment test for these assets is performed.
Irrespective of whether there is any indication of
impairment, the Group is required to test an
intangible asset not yet available for use for
impairment annually by comparing its carrying
amount with its recoverable amount.
The carrying value of
intangible assets was
considered to be a key audit matter due to the
magnitude of the balance in the consolidated
statement of financial position.
Refer to Note 12 of the financial report for the related
disclosures.
We have:
• Assessed whether the Group’s revenue recognition
in compliance with Australian
policies were
Accounting Standards.
• Tested a samples of revenue transactions during
the year, from each revenue stream, by checking
them
records and ensuring
consistency to the Group’s timing and measurement
of revenue recognition.
to underlying
We have:
• Evaluating the Group’s assessment of indicators of
impairment for capitalised software development
costs.
• Obtained and assessed
the board approved
impairment review in relation to capitalised software
development costs.
• Considered the adequacy of the financial report
disclosures contained in Note 12 of the financial
report.
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 the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 26 of the directors' report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Energy Action Limited, for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
C J Hume
Partner
Sydney, NSW
Dated: 23 September 2021
Corporate Governance Policy
Energy Action Limited (“Energy Action”) is committed to the achievement of superior financial performance and long-term
prosperity, while meeting stakeholders’ expectations of sound corporate governance practices. The Energy Action Board
determines the corporate governance arrangements. As with all its business activities, Energy Action is proactive in respect of
corporate governance and puts in place those arrangements which it considers are in the best interests of shareholders, and
consistent with its responsibilities to other stakeholders.
This statement:
•
•
reports against the 4th edition of the ASX Corporate Governance Council’s Principles and Recommendations (ASX
Principles) and the practices detailed in this Statement are current as at 22 October 2021; and
has been approved by the Board and is available of Energy Action’s website at
http://www.energyaction.com.au/about/corporate-governance
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 75
Shareholder information as at 24 September 2021
Shareholder information required by the Australian Securities exchange Limited (ASX) Listing Rules and not
disclosed elsewhere in the Report is set out below:
Substantial Shareholders
The number of securities held by Substantial Shareholders and their associates as lodged with ASX are set out
below:
Name
Mr Noel Kagi
Mr Bruce Duncan MacFarlane and Ms
Linda Ann Millar
Mr Murray Bleach & related entities
Mr Paul Meehan & related entities
Number of
Shares
2,945,331
2,937,786
5,100,700
4,727,091
Mr Stephen Twadell & related entities
1,946,209
Current
Interest1
10.91%
10.48%
19.65%
18.21%
7.50%
Latest Notice
Date
21/03/2021
26/02/2021
09/06/2020
18/11/2013
13/11/2012
Number of securities on issue
The Company has 26,988,600 fully paid ordinary shares on issue which is held by 293 shareholders.
Voting rights
At a meeting of member, each member who is entitled to attend and vote may attend and vote in person, by
proxy, attorney or representative. On a show of hands, every person present who is a member, proxy, attorney or
representative shall have one vote on a poll, every member who is present or by proxy, attorney or representative
shall have one vote for each fully paid share held.
Distribution of security holders
The following table summarises the distribution of quoted securities as at 24 September 2021:
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
Unmarketable parcels
%
No. of holders
Securities
24,700,892
1,495,492
352,961
427,656
11,599
91.52
5.54
1.31
1.58
0.04
26,988,600
100.00
19,567
0.07
%
9.90
17.06
16.04
46.08
10.92
100.00
12.97
29
50
47
135
32
293
38
The number of shareholding less than a marketable parcels of ordinary shares is 38. An unmarketable
parcel comprises of less than 1,587 fully paid ordinary shares based on EAX’s closing share price of $0.315
on 24 September 2021.
Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 76
The twenty largest shareholders of quoted equity securities as at 24 September 2021
Rank Name
No.Shares
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MR MURRAY EDWARD BLEACH & MRS NORMA LEIGH EDWARDS
MEEHANTEAM PTY LTD
ACRES HOLDINGS PTY LTD
MR BRUCE DUNCAN MACFARLANE & MS LINDA ANN MILLAR
HOLYOAKE INVESTMENTS PTY LTD
TOVEELEN PTY LTD
EQUITAS NOMINEES PTY LIMITED
WEBZONE HOLDINGS PTY LTD
MILLAR & MACFARLANE PTY LTD
J & C ALLEN SUPERANNUATION FUND PTY LTD
MR EDWARD JAMES HANNA
JASPER SUPERANNUATION FUND PTY LTD
MR IVAN ROMAN SLAVICH & MRS ANNA SLAVICH
REDBROOK NOMINEES PTY LTD
HR PRODUCTS AUSTRALIA PTY LTD
EMERALD SHARES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
DR GEOFFREY PHILLIP BENT & MRS GABRIELLE MARY BENT
MONEX BOOM SECURITIES (HK) LTD
PACIFIC CUSTODIANS PTY LIMITED
Total
Balance of register
Grand total
4,827,545
2,900,698
2,615,331
1,969,425
1,774,127
1,696,209
1,207,582
1,206,368
968,361
875,833
611,387
552,553
329,214
282,000
280,000
275,000
252,394
246,299
233,342
233,052
23,336,720
3,651,880
26,988,600
17.89
10.75
9.69
7.30
6.57
6.28
4.47
4.47
3.59
3.25
2.27
2.05
1.22
1.04
1.04
1.02
0.94
0.91
0.86
0.86
86.47
13.53
100.00
Distribution of performance right holders and holdings – performance share rights (unlisted)
There are unlisted performance share rights on issue that have been issued under an employee share plan.
These are held by 2 employees.
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Total
Performance
Share
Rights
-
-
-
-
%
-
-
-
-
No. of
holders
-
-
-
-
%
-
-
-
-
582,750 100.00
582,750 100.00
2 100.00
2 100.00
On market buy back
There is no current on market buy back
Securities exchange listing
Energy Action Limited’s shares are traded on the Australian Securities Exchange under the ticker code EAX.
Energy Action Financial Report for the Full Year Ended 30 June 2021
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Energy Action Financial Report for the Full Year Ended 30 June 2021
Page 78