Energy Action Limited
ABN: 90 137 363 636
2023 Annual Report
Table of Contents
Interim-CEO Letter to Shareholders .............................................................. 3
Corporate information ................................................................................... 5
Financial Report ........................................................................................... 6
Share & Shareholder information ................................................................ 73
September 2023
Interim-CEO Letter to Shareholders
Dear shareholder,
When I wrote to you in February, I talked about how our back-to-basics strategy and straightforward
approach of focusing on sales, technology, and net zero appeared to be having positive results.
Today I’m pleased to present our full-year financial report that shows our approach is paying off.
Energy Action returned to an EBITDA profit in FY2023 for the first time since FY2018 and remained
cashflow positive.
Today, two years since I stepped in as interim CEO, Energy Action has strong sales processes,
advanced technology, and high-quality service offerings. Our expenses are well-aligned with our
current size and our financial situation is improving.
Drivers of growth
Two mega trends are driving our growth, net zero regulation, and energy price volatility. Energy
Action is uniquely positioned to take advantage of these two trends, as our services include
sophisticated renewable buying and cutting-edge technology. Our services help the business
customers we work with to reduce and report on their emissions. Our goal is to capitalise on these
market drivers.
Looking back at 2023
Energy customers faced unprecedented prices during the first half of FY23. A result of market failure
because of underlying supply issues. Despite these market challenges, Energy Action’s sales
performance was strong during FY23. The result of team focus, better marketing capability, and
systems improvement. The changes we have implemented at Energy Action should provide us with
a repeatable and scalable sales model that isn’t impacted by external factors. While we still have
work to do, I expect that FY24 will see continued improvement in sales performance.
During FY23 we continued to reduce headcount in non-sales facing roles. A difficult process
because Energy Action has had to adapt and relearn how to deliver our services in different ways.
That change has resulted in smaller delivery teams that will deliver long-term benefits to
shareholders through improved margins, and with customer issues being escalated more quickly.
Today I see more of our staff talking directly to our customers, helping to drive sales, and improving
the quality of our service.
We continued to reduce our indirect expenses with reductions in lease expenses, fixed technology
costs, and discretionary spending. We will keep looking for cost reduction opportunities, but I expect
fewer to be available to us in FY24 as this work is largely complete.
The quality of our services continues to improve. We have received client feedback that our
technology is impressive. However, many of our clients still use other ways to get access to their
Energy Action Financial Report for the Full Year Ended 30 June 2023
3
energy and emissions data. This shows there is still opportunity to improve the quality of our service
with further investment. Investment we need to make while continuing to grow revenue at a
profitable margin.
At our core, Energy Action is a technology business. On the outside, we're all about delivering
services that customers value. But inside our business we develop software used to deliver high
quality, effective energy procurement and management services at sustainable margins.
We have also had change at a board level, appointing Derek Myers in June, and Caroline Wykamp
in September. Derek’s experience is in building a business like Energy Action in the UK, while
Caroline’s experience is in leading Australia’s investment in renewable energy with her CEO role at
Marinus Link.
These new director appointments give Energy Action different perspectives, experiences, and
networks to continue to build our business.
The resignation of our pervious CFO, Simon Smith in June was disappointing. He brought
efficiencies to the finance team and improved our banking relationship. However, I am delighted by
Gregory Tamvakellis taking on the CFO role. He is an internal replacement and shows that we are
starting to establish the organisational depth to promote from within.
Energy Action’s debt remains high, a hangover from previous acquisitions. While the covenants in
our debt facility with Commonwealth Bank of Australia (CBA) have applied financial discipline to
Energy Action the facility has been in place for a long time. With business operations now delivering
the financial performance we expect, our attention is focused on deleveraging the balance sheet.
Looking forward to 2024
Our back-to-basics strategy won’t change in FY24. We will continue to provide energy procurement
and energy management services using our technology, to Australian businesses. The quality of our
services will continue to improve by investing in our technology and delivery capability. Lastly, we
are increasing our capability in being able to deliver the net zero services and market insights our
larger customers expect, and that our smaller customers are delighted by.
FY23 demonstrated the resilience of the Energy Action business model and that our strategy is the
right one. Our goal is to increase profit margin and cash flow over the long term to generate long-
term value for shareholders.
Thank you for your ongoing support.
Bruce Macfarlane
Interim CEO and Director
Energy Action Financial Report for the Full Year Ended 30 June 2023
4
Corporate information
ACN: 137 363 636
Directors
Murray Bleach - Non-Executive Chairman
Paul Meehan – Non-Executive Director
Bruce Macfarlane – Executive Director and Interim CEO
Derek Myers – Non-Executive Director (appointed 21 June 2023)
Caroline Wykamp – Non-Executive Director (appointed 1 September 2023)
Company Secretary
Dray Andrea
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 2023
5
Financial Report for the year ended 30 June 2023
Table of Contents
Directors’ Report ............................................................................................................................................ 7
Auditor’s Independence Declaration ............................................................................................................. 17
Remuneration Report (Audited) .................................................................................................................... 18
Financial Statements.................................................................................................................................... 26
Consolidated Statement of Comprehensive Income ..................................................................................... 26
Consolidated Statement of Financial Position ............................................................................................... 27
Consolidated Statement of Changes in Equity .............................................................................................. 28
Consolidated Statement of Cash Flow .......................................................................................................... 29
Notes to the Financial Statements for year ended 30 June 2023 .................................................................. 30
Note 1: Corporate Information ................................................................................................................................. 30
Note 2: Summary of Significant Accounting Policies................................................................................................ 30
Note 3: Significant Accounting Judgements, Estimates and Assumptions .............................................................. 40
Note 4: Segment information ................................................................................................................................... 41
Note 5: Revenue, Other Income and Expenses ....................................................................................................... 42
Note 6: Income Tax Expense ................................................................................................................................... 44
Note 7: Earnings per Share ..................................................................................................................................... 45
Note 8: Dividends..................................................................................................................................................... 46
Note 9: Cash and Cash Equivalents ........................................................................................................................ 47
Note 10: Trade and Other Receivables.................................................................................................................... 47
Note 11: Property Plant and Equipment................................................................................................................... 49
Note 12: Intangible Assets ....................................................................................................................................... 50
Note 13: Other Assets.............................................................................................................................................. 51
Note 13(a): Right-of-use Assets ............................................................................................................................... 52
Note 14: Trade and Other Payables ........................................................................................................................ 53
Note 14(a): Lease Liability ....................................................................................................................................... 53
Note 15: Tax ............................................................................................................................................................ 54
Note 16: Provisions and other liabilities ................................................................................................................... 55
Note 17: Loans and Borrowings ............................................................................................................................... 55
Note 18: Issued Capital and Reserves..................................................................................................................... 57
Note 19: Capital and Leasing Commitments............................................................................................................ 59
Note 20: Cash Flow Information............................................................................................................................... 60
Note 21: Related Party Disclosures ......................................................................................................................... 61
Note 22: Financial Risk Management ...................................................................................................................... 63
Note 23: Auditors’ Remuneration ............................................................................................................................. 66
Note 24: Information relating to Energy Action Limited (“the parent entity”)............................................................. 67
Note 25: Events after the reporting period ............................................................................................................... 68
Director’s Declaration ................................................................................................................................... 69
Independent audit report to members of Energy Action Limited .................................................................... 70
Energy Action Financial Report for the Full Year Ended 30 June 2023
6
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 2023.
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 and 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.
Bruce Macfarlane (Executive Director and Interim CEO)
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
Energy Action Financial Report for the Full Year Ended 30 June 2023
7
Derek Myers (Non-Executive Director)
Qualifications – Bachelor of Commerce, University of New South Wales. Masters of Business Administration, University of
New South Wales AGSM.
Experience – Board Member since 21 June 2023
Special Responsibilities – Nil
Directorships held in other listed entities currently and during the three prior years to the current year:
eEnergy Group PLC (Domiciled in UK)
Other Directorships and interests – Director of Polaris Stella Ltd and Beyond Group Ltd
Caroline Wykamp (Non-Executive Director)
Qualifications – Bachelor of Applied Science, Charles Sturt University. Diploma Applied Finance, Kaplan. Graduate Member of
the Australian Institute of Company Directors.
Experience – Board Member since 1 September 2023
Special Responsibilities – Chair 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 – 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
Bruce Macfarlane
Derek Myers
Company Secretary
Number of ordinary
shares
Number of options over
ordinary shares
5,100,700
4,792,846
3,045,986
3,299,746
-
-
-
-
The following person held the position of Company Secretary at the end of the financial year:
Dray Andrea – Bachelor Business Studies (Finance) and a Graduate Diploma in Applied Corporate Governance and Risk
Management
An experienced corporate governance professional and a member of the Governance Institute of Australia and the Chartered
Governance Institute (UK).
Dividends
Dividends recommended:
Cents per share
Ordinary shares
Final 2023 dividend
Interim 2023 dividend
Final 2022 dividend
NIL
NIL
NIL
$
NIL
NIL
NIL
Energy Action Financial Report for the Full Year Ended 30 June 2023
8
Operating and Financial Review
The Board presents the 2023 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 FY23 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.
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 client’s 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.
How we’re different
We’re the trusted, independent energy partner for over 6,000 clients. 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. In FY23 we went live with Utilibox, an enterprise energy and emissions
category management platform. The software has been built using modern technology – AI and cloud based. Through it we
source and transform utility data and deliver high-quality services at 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 has a back-to basics strategy. Our focus is on providing energy procurement and energy management
services using our technology, to Australian businesses. We will continue to improve those services by investing in our
technology and delivery capability. Lastly, we are increasing our capability in being able to deliver the net zero services a nd
market insights our larger customers expect, and that our smaller customers are delighted by.
Operational Performance
Operational performance improved in FY23. During FY23 the Energy Action’s EBIT improved strongly to $0.37 million versus
a loss of $2.5M PCP, a result of improved sales with revenue up 11% YoY to $11.492 million, driven by the increased number
of auctions and greater focus on customer retention during the year. The company has re-focussed its sales team to improve
customer retention and Utilibox attachment rate.
Statutory Loss after tax of $298,475 has decreased by 89% as compared to the FY22 Statutory Loss of $2,841,941. This is
due to the increased revenue and a reduction in operating expenses from $10.8M in FY22 to $10.1M in FY23.
Energy Action Financial Report for the Full Year Ended 30 June 2023
9
Business Priorities
Energy Action's focus remains 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.
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.
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. Energy Action has processes in place to reduce the possibility of the risk
occurring and/or, to the greatest extent possible, the adverse consequences of the risk occurring. 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
Cyber
Security Risk
Cyber-attack or similar
event involving
unauthorised access to
EAX’s IT systems leading
to denial of systems and/or
corruption of data.
Weak Sales
Failure to attract and retain
sufficient customers to
sustain the business
Poor service
Earnings and
Cash Flow
Loss of key
staff
The risk that Energy Action
is unable to meet its
contractual obligations to
customers for the delivery
of services.
The risk of failing to
maintain adequate earnings
and funding to finance
growth objectives and to
generate adequate returns
for shareholders.
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.
Regular proactive cyber security testing is undertaken and external
review of systems. Procedures for systems recovery are in place
including off site storage of data. A modern systems restoration and
approach to business continuity is in place.
Mitigated by 1) having robust and scalable sales processes, 2)
improving service quality by connecting customer expectations, sales
promises, and service delivery through technology 3) ensuring we
maintain product relevance with a focus on net zero.
The same technology that customers use to receive services, is used by
Energy Action’s service delivery and sales staff. This means that issues
with service delivery should be found before customers experience
them.
Mitigated by implementation of a focused back to basics strategy and to
establish the core foundations for growth. A buffer has now been
established between opex and baseline budget revenue.
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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
10
Risk
Risk Description
Potential consequences and mitigation strategies
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.
Legal risk
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,
or individual employee
actions.
Financial Performance
The Group made a statutory net profit/(loss) after tax (NPAT) of ($0.29) million for the year ended 30 June 2023. Operating
net profit after tax has decreased to a loss of ($0.20) million compared to FY22 ($2.79) million.
A reconciliation of the Group’s Statutory NPAT to Operating NPAT and EBITDA is shown in the table below:
$
30-Jun-23
30-Jun-22
Variance
30-Jun-23
30-Jun-22
Variance
Statutory results
(298,475)
(2,841,941)
89%
1,165,666
(1,487,144)
178%
NPAT
EBITDA
Add back Significant Items
after tax:
Restructuring cost
Asset write down
Impairment of Software
Impairment of Intangibles 1
Other items
Government Assistances 2
Onerous contracts & leases 3
Proceeds received on sale of
embedded networks
Costs associated with
derecognition of subsidiaries
-
-
-
-
-
-
78,777
733
-
815,428
47,095
(808,354)
(81,437)
100%
100%
N/A
100%
100%
100%
100%
-
-
-
-
-
-
-
(50,000)
140,109
-
-
100%
(50,000)
-100%
140,109
105,036
-
1,087,238
-
62,794
(808,354)
(108,584)
-
-
Operating profit after tax
(208,366)
(2,789,699)
93%
1,255,775
(1,149,014)
1 Impairment of Right of Use Asset (FY22)
2 Jobkeeper, Cashboost & payroll tax relief
3 Onerous Contracts relating to technology infrastructure and rental premises (FY22)
100%
N/A
100%
100%
100%
100%
100%
-100%
-100%
209%
Key Financial Metrics
Revenue
Operating EBITDA
Operating NPAT
Operating Cash flow1
Statutory NPAT
FY23
$11.49m
$1.26m
($0.21m)
$0.92m
($0.30m)
FY22
$10.38m
($1.15m)
($2.79m)
$0.80m
($2.84m)
Variance
11%
209%
93%
15%
89%
1Operating Cash Flow is defined as Operating Cash Flow before Interest, Tax and Significant Items
Energy Action Financial Report for the Full Year Ended 30 June 2023
11
Revenues
Total revenue increased by 11% versus the previous period. Energy Buying revenue increased 68%, Energy Management
declined 13%, and Embedded Networks declined 96%.
Revenue $
Energy Buying
Energy Management
Embedded Networks 1
Other2
Total Revenue
FY23
5,975,083
5,121,001
42,429
354,338
FY22
3,549,648
5,870,480
958,439
(538)
11,492,851
10,378,029
vs FY22 $
2,425,435
(749,479)
(916,010)
354,876
1,114,822
vs FY22 %
68%
-13%
-96%
65962%
11%
1 On 5 April 2022, the Company announced it had sold its embedded networks business. The transaction was completed in February 2023
2 Other revenue includes $50,000 for proceeds received on sale of embedded networks
Revenue for the full year increased from $10.4 million to $11.4 million mainly as a result of the following:
▪ Energy Buying revenues were up 68% overall with:
− Increase in Auctions Electricity of 61%,
− Total auction bid value increased 153% to $162 million.
▪ Energy Management revenue declined by 13% with a decline of -102 in sites under management to 5,389 and the
average contract duration decreasing 5%.
Operating Expenditure and Cost of Goods Sold (COGS)
Operating overheads (net of significant items) and COGS totalled $10.2 million, compared to $11.5 million in FY22, a
reduction of $1.3 million (11.3%), with reduced operating costs predominantly related to employment costs. In particular:
▪ Employment costs were $1.02 million lower than pcp primarily as a result of:
A reduction of FTE with improved integration and efficiency.
▪ Ongoing strict cost control across all discretionary spend
Reconciliation of Operating Cash Flow before interest, tax and significant items
Statutory operating cash flow
Add back:
Taxes received
Research & Development offset income
Interest paid
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 2023
30 June 2022
768,091
439,807
-
(152,707)
(274,254)
423,932
-
-
917,769
1,255,775
73%
-
242,827
(242,135)
498,140
785,932
(1,149,014)
-68%
As at 30 June 23, the Company had utilised $5.34 million of the CBA loan facility comprising a loan of $5.25 million and bank
guarantees of $0.08 million principally in relation to the Parramatta office. In January 2022, $1 million was repaid to the CBA
loan facility via the provision of a $1.5 million unsecured loan from the Directors. In June 2023 a further $0.5 million was repaid
with the issue of 3,125,000 shares at $0.16.
Energy Action Financial Report for the Full Year Ended 30 June 2023
12
Other
A Nil dividend was declared in FY23 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.
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 value 1
No. of electricity tender events
No. of gas tender events
Managed & Embedded Networks
Sites under current contract 2
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
FY23
686
24.81
0.5
773
$144.60
$162m
8
41
FY22
% change
426
26.6
0.4
850
$79.4
$64m
10
38
61%
-1.79 mths
25%
-9%
82%
153%
-20%
8%
30 June 2023
30 June 2022
Variance
5,389
35
0
5,389
$9.5m
$3.2m
$2.5m
$5.7m
5,491
37
1,447
6,938
$11.9m
$2.2m
$2.2m
$4.4m
-2%
-2 mths
-100%
-22%
-20%
45%
14%
30%
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
Energy Action Financial Report for the Full Year Ended 30 June 2023
13
Forward contracted revenue
The forward contract revenue has continued to decrease during FY23
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 $5.4 million to be received as cash in the future for revenue
recognised in current and previous fiscal periods.
Energy Action Financial Report for the Full Year Ended 30 June 2023
14
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, gov ernments, 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 launched Utilibox, a new energy and emissions management product designed to make it
simple for all Australian business to kickstart their Net Zero journey. As it did during FY22, during FY23 the Company secured
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
Bruce Macfarlane
Derek Myers
(appointed 21 June
2023)
10
10
10
1
10
9
10
1
2
2
2
-
2
2
2
-
2
2
2
-
2
2
2
-
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 2023
15
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 t he
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 2023.
Other audit related services provided include an audit of the subsidiary Energy Action (Australia) Pty Limited in relation to
its Financial Statements for the purposes of maintaining its AFSL (Australian Financial Services Licence).
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 30 September 2023; 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
On 31 August 2023, the Company announced that the CBA had agreed to amend the Facility Deed agreement. The proposed
new Facility Agreement will include the following changes:
1. The loan be extended with final repayment date of 31 December 2024 replaced with 31 December 2025.
2. The repayment of $1.5M due 31 August 2023 be removed
3. The repayment schedule be revised to $300,000 per quarter with first repayment due 30 September 2023
4. The requirement to hold an aggregate balance of $1 million dollars at all times be revised to $700,000
5. Where cash balance held exceeds $1.5 million in a quarter the excess funds to be repaid to the bank
6. Updated Gearing Ratios and Interest Cover Ratios
The above changes have not been finalised in a signed agreement as at the date of this report.
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 th e
consolidated group in future financial years.
Energy Action Financial Report for the Full Year Ended 30 June 2023
16
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 2023, 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: 29 September 2023
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 2023.
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 Paul Meehan (Chairman), Murray Bleach, Bruce Macfarlane and Caroline
Wykamp. 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
Bruce Macfarlane
Derek Myers
Caroline Wykamp
Non-Executive Chairman
Non-Executive Director
Executive Director and interim CEO
Non-Executive Director (appointed 21 June 2023)
Non-Executive Director (appointed 1 September 2023)
1.2.2. Senior executives
Simon Smith
Clint Irving
Edward Hanna
Gregory Tamvakellis
Chief Financial Officer (resigned 27 June 2023)
Chief Technology Officer
Head of Commercial and Growth
Chief Financial Officer (appointed 4 September 2023)
Energy Action Financial Report for the Full Year Ended 30 June 2023
18
1.3
Remuneration Consultants
Where necessary, the Board seeks advice from independent experts and advisors including remuneration c onsultants.
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
During FY23, the company award 1,870,000 Performance Right to employees.
Valuation
No valuation has been given on the performance rights as the options are provided at no cost to the employee and as at the
date of this report no hurdles were met and no options vested.
Performance hurdles
The Performance Rights issued during FY2023 vest in 2 equal tranches. The first tranche vest once the Company share price
remains at $0.40 cents or greater for over 10 days and the second tranche vest once the Company share price remains at
$0.80 cents or greater for over 10 days.
LTI Outcomes
The share price hurdles were not met for the year ending 30 June 2023 for such performance rights. Therefore, no rights
vested in 2023.
Number of instruments awarded
As at 30 June 2023, the PROP accounted for Nil (FY22 Nil) of issued securities of the Group, made up of nil (FY22 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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
19
The annual fee structure for directors for the year ended 30 June 2023, including superannuation, was as follows:
Base fee
Non-Executive Chairman
Non-Executive Director 1
Non-Executive Director 2*
Executive Director**
$ FY23
1/7/22-30/6/23
45,000
36,000
-
36,000
$ FY22
1/7/21-30/6/22
45,000
36,000
36,000
36,000
*Derek Myers appointed as non-executive director effective 21 June 2023.
** Bruce Macfarlane was appointed as an executive director on 25th Feb 2021 and Interim CEO on 23 September 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.
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)
▪ 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, CFO and other senior executives
for the year ended 30 June 2023 was:
Fixed Component
STI Bonus Component
LTI Component
Chief Executive Officer
Chief Financial Officer
Chiel Technology Officer
Head of Commercial and Growth
100%
100%
100%
100%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
As of the date of this report no remuneration mix has been agreed with the new CFO or Interim CEO for FY24.
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 previous CEO and CFO (see detailed explanation below).
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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
20
The performance matrix used to determine actual STI earnings against the STI potential for the previous CEO and CFO were:
Chief Executive Officer
Chief Financial Officer
Company
70%
70%
Individual
30%
30%
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 previous CEO and CFO for the year ended 30 June
2023 was:
Chief Executive Officer
Chief Financial Officer
% of Bonus Potential
% LTI Potential
0%
0%
0%
0%
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
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*
Bruce Macfarlane – interim CEO
On-going (no fixed term)
Simon Smith1
On-going (no fixed term)
1 months base salary termination by company or
1 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.
1 Resigned 27th June 2023
Energy Action Financial Report for the Full Year Ended 30 June 2023
21
1.7
Remuneration table for the year ended 30 June 2023
Details of remuneration of directors and executive KMP of the Group for the 2023 financial year are set out in the following
table.
Non-executive
directors
Murray Bleach
Paul Meehan
Cash
salary and
fees
41,096
32,877
Bruce Macfarlane1
97,877
Derek Myers²
-
Sub-total
171,850
Executives
Simon Smith
Edward Hanna
Clint Irving
Sub-total
Total
296,999
212,251
200,000
709,250
881,100
Short term benefits
Post
employment
benefits
Long term benefits
Additional
fees
Cash
bonus
Non
monetary
benefits
Super
Termination
benefits
Long
service
leave
Share
based
payments
Total
Performance
rights
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,315
3,452
10,277
-
18,044
25,292
23,986
21,000
70,278
88,322
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,411
36,329
108,154
-
189,894
322,291
236,237
221,000
779,528
969,422
1Bruce Macfarlane appointed as director effective 25 February 2021. The above cash salary & fees for Bruce Macfarlane includes director fees of $32,876.76 and salary
of $65,000.
² Derek Myers appointed as non-executive director effective 21 June 2023.
1.8
Remuneration table for the year ended 30 June 2022
Details of remuneration of directors and executive KMP of the Group for the 2023 financial year are set out in the following
table. The executive KMP are considered to be the CEO, CFO and Executive Director only for FY22.
Non-executive
directors
Murray Bleach
Paul Meehan
Nitin Singhi
Sub-total
Executives
Bruce Macfarlane1
John Huggart2
Tracy Bucciarelli3
Simon Smith4
Sub-total
Total
Cash
salary
and fees
41,096
32,877
8,219
82,192
55,628
170,441
214,363
52,380
492,812
575,004
Short term benefits
Post
employment
benefits
Long term benefits
Share based
payments
Total
Additiona
l fees
Cash
bonus
Non
monetary
benefits
Super
Terminatio
n benefits
Long
service
leave
Performance
rights
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,110
3,288
822
8,220
5,563
11,784
20,093
5,238
-
-
-
-
32,090
6,327
-
42,678
38,417
50,898
38,417
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,206
36,165
9,041
90,412
61,191
214,315
240,783
57,618
573,907
664,319
1 Bruce Macfarlane appointed as director effective 25 February 2021. The above cash salary & fees for Bruce Macfarlane includes Directors fees of $32,876.76
director fees and salary of $22,751.01.
2 John Huggart resigned on 23 September 2021
3 Tracy Bucciarelli resigned on 8 February 2022
4 Simon Smith appointed as CFO on 28 April 2022
Energy Action Financial Report for the Full Year Ended 30 June 2023
22
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
2023
2022
Murray Bleach
Paul Meehan
Bruce Macfarlane
Derek Myers
Executives
Simon Smith
Clint Irving
Edward Hanna
%
100
100
100
100
100
100
100
%
100
100
100
N/A
100
100
100
2023
%
2022
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2023
2022
%
N/A
N/A
N/A
N/A
-
-
-
%
N/A
N/A
N/A
N/A
-
-
-
Performance rights of key management personnel
The following Performance Rights were issued to Key Management personnel during FY 2023 (FY22 Nil).
Simon Smith
400,000 performance rights
Clint Irving
400,000 performance rights
Edward Hanna
200,000 performance rights
Fair value of Performance Options
No fair value has been assigned to the performance rights as the options are provided at no cost to the employee.
The tables below disclose the number of Performance Options available to KMP. Performance Options do not carry any voting
or dividend rights and can only be exercised if the vesting conditions have been met, until their expiry date.
Total number of Performance Options issued:
30 June 2023
Balance at
1 July 2022
Granted
Grant
Date
Options
vested &
transferred
Options
cancelled/
forfeited/
other
Options
expired
without
exercise
Net
change
Balance at
end of period
No.
No.
No.
No.
No.
No.
Simon Smith1
Clint Irving
Edward Hanna
Total
Nil
Nil
Nil
Nil
400,000
400,000
200,000
1,000,000
-
-
-
-
-
-
-
-
(400,000)
-
-
(400,000)
-
-
-
-
-
-
-
-
No.
-
400,000
200,000
600,000
1 Simon Smith resigned on 27 June 2023.
There were no alterations to the terms and conditions of Performance Options awarded as remuneration since their grant
date.
Energy Action Financial Report for the Full Year Ended 30 June 2023
23
Shareholdings of Directors and Key Management Personnel
Net change
KMP resigned
2
30-Jun-23
Murray Bleach
Paul Meehan
Bruce Macfarlane
Derek Myers
Simon Smith
Clint Irving
Edward Hanna
Total
2
30-Jun-22
Murray Bleach
Paul Meehan
Nitin Singhi
Bruce Macfarlane
John Huggart
Tracy Bucciarelli
Simon Smith
Total
1
Balance
1 July 2022
5,100,700
4,792,846
2,947,786
-
-
98,200
174,746
3,125,000
-
-
611,387
-
-
-
13,627,465
3,223,200
1
Balance
1 July 2021
5,100,700
4,792,846
3,000
-
-
-
Net change
KMP resigned
2,937,786
10,000
50,000
1,245
-
-
-
-
(50,000)
(1,245)
-
12,885,577
10,000
(51,245)
12,844,332
-
-
-
-
-
-
-
-
-
-
-
2
Balance
30 June 2023
5,100,700
4,792,846
3,045,986
3,299,746
-
-
611,387
16,850,665
2
Balance
30 June 2022
5,100,700
4,792,846
3,000
2,947,786
-
-
-
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
Horizon Services Trust – business consulting
Total Key Management Personnel
Consolidated Group
2023
$
-
-
2022
$
2,970
2,970
Energy Action Financial Report for the Full Year Ended 30 June 2023
24
1.9
Company Performance
The Group results for the financial year ended 30 June 2023 was a Statutory loss after tax of $0.29 million compared to a loss
of $2.8 million in the prior year.
FY23
FY22
FY21
FY20
FY19
Revenue & other income ($000’s)
11,492
10,378
14,359
19,782
24,801
Net profit / (loss) after tax ($000’s)
(298)
(2,841)
(1,000)
(2,487)
(12,093)
Operating profit after tax ($000’s)
(208)
(2,790)
(420)
24
1,005
Earnings per share – Operating
(0.77 cents)
(10.34 cents)
(1.55 cents)
0.09 cents
3.87 cents
Market capitalisation
$5.87m
$4.3m
$7.2m
$4.2m
$10.4m
Closing share price
$0.20
$0.16
$0.265
$0.16
$0.40
This director’s report is signed in accordance with a resolution of the Board of Directors.
Murray Bleach
Director
Dated: 29 September 2023
Energy Action Financial Report for the Full Year Ended 30 June 2023
25
Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2023
Sales Revenue
Other revenue
Total Revenue
Cost of goods and services sold
Employee benefits expense
Rental expense
Travel costs
Administration expenses
Costs associated with derecognition of subsidiaries
Impairment of software
Restructuring cost
Onerous contracts & leases
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
5.1
5.2
2023
$
2022
$
11,138,513
10,378,567
354,338
(538)
11,492,851
10,378,029
(418,468)
(793,119)
5.3
(6,973,852)
(7,188,182)
5.4
12
5.5
5.6
6
(373,019)
(240,913)
(31,306)
(28,128)
(2,390,429)
(2,531,141)
(140,109)
(353,219)
-
-
(434,357)
-
(1,087,238)
(105,036)
108,583
(681,492)
(676,548)
(391,831)
(298,456)
(2,560,468)
(19)
(281,473)
(298,475)
(2,841,941)
Other comprehensive loss net of income tax that may be reclassified
subsequently to profit and loss
Exchange differences on translation of foreign operations
-
(2,048)
Total comprehensive loss for the period attributable to owners of the parent
entity
(298,475)
(2,843,989)
Loss per share:
Cents
Cents
Basic and diluted loss per share for the year attributable to ordinary equity holders of
the parent
7
(1.11)
(10.53)
The accompanying notes form part of these financial statements
Energy Action Financial Report for the Full Year Ended 30 June 2023
26
Consolidated Statement of Financial Position
For the year ended 30 June 2023
Note
Consolidated Group
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Other assets
Other Intangible assets
Right of Use Asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Current Tax Liability
Short-term provisions
Loans & Borrowings
Lease liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other long-term provisions
Loans and Borrowings
Lease liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET LIABILITIES
EQUITY
Issued capital
Retained earnings
Dividend profit reserve
Foreign currency translation reserve
TOTAL DEFICIT
The accompanying notes form part of these financial statements
2023
$
1,397,164
1,221,605
3,329,007
5,947,776
49,315
30,997
2,570,126
676,153
354,098
3,680,689
9,628,465
1,979,698
32
249,475
2,712,719
185,158
5,127,082
54,032
4,277,275
194,182
4,525,489
9,652,571
(24,106)
2022
$
1,859,646
1,121,013
2,733,383
5,714,042
54,737
70,460
2,217,237
487,681
52,421
2,882,536
8,596,578
967,547
13
223,835
5,962,723
123,324
7,277,442
97,894
1,576,332
10,646
1,684,872
8,962,314
(365,736)
7,337,906
(14,085,076)
6,723,064
6,837,906
(13,930,408)
6,723,064
-
3,702
(24,106)
(365,736)
9
10
13
10
11
13
12
13a
14
15
16
17
14a
16
17
14a
18b
18g
18d
Energy Action Financial Report for the Full Year Ended 30 June 2023
27
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Consolidated Group
Note
Balance at 30 June 2021
Profit/(Loss) attributable to
owners of parent entity
Foreign currency translation
reserve
18d
Total comprehensive income
Share based payments
18c
Ordinary
Issued
Share
Capital
Share
Based
Payments
Reserve
Retained
Earnings
Dividend
Profit
Reserve
$
$
$
Foreign
currency
translation
reserve
$
Total
$
6,837,906
175,072
(11,256,519)
6,723,064
1,654
2,481,177
-
-
-
-
-
(2,841,941)
-
-
-
(2,841,941)
(175,072)
168,052
-
-
-
-
-
(2,841,941)
2,048
2,048
2,048
(2,839,893)
-
(7,020)
Balance at 30 June 2022
6,837,906
-
(13,930,408)
6,723,064
3,702
(365,736)
Balance at 30 June 2022
Profit/(Loss) attributable to
owners of parent entity
Adjustments to prior year
retained earnings ^
Foreign currency translation
reserve
Total comprehensive income
Issue of share capital
Share based payments
6,837,906
-
(13,930,408)
6,723,064
3,702
(365,736)
-
-
(298,475)
18d
18b
18c
-
-
500,000
-
140,105
3,702
(154,668)
-
-
-
-
-
-
-
-
-
-
-
-
(298,475)
140,105
(3,702)
-
(3,702)
(158,370)
-
-
-
500,000
-
(24,106)
Balance at 30 June 2023
7,337,906
-
(14,085,076)
6,723,064
^ Adjustments to prior year retained earnings relates to the deregistration of 100% owned group entities during the period. E ntities include Energy Advice Pty
Limited, Eactive Consulting Pty Limited, Ward Consulting Services (NSW) Pty Limited, ACN 087 790 770 Pty Limited.
The accompanying notes form part of these financial statements
Energy Action Financial Report for the Full Year Ended 30 June 2023
28
Consolidated Statement of Cash Flow
For the year ended 30 June 2023
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
Other Significant items
Interest received
Interest paid
Research & Development offset income
Income tax refunded
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of embedded networks business
Purchase of property, plant and equipment
Software development costs
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from / (repayment of) Bank Loan
Proceeds from loans from Directors
Proceeds from convertible debt
Repayment of Lease Liability
Debt establishment fees
Net cash used in by financing activities
Net decrease in cash held
20a
11
12
17a
17b
18b
Cash (including restricted cash) at beginning of financial year
Cash (including restricted cash) at end of financial year
9
The accompanying notes form part of these financial statement
2023
$
2022
$
11,452,295
13,487,365
(10,534,526)
(13,199,573)
-
-
-
-
(329,092)
808,354
(120,421)
(116,706)
18,652
123
(442,584)
(242,950)
274,254
-
-
152,707
768,091
439,807
50,000
(6,721)
-
(36,860)
(706,442)
(947,838)
(663,163)
(984,698)
(750,000)
(1,000,000)
-
1,500,000
500,000
-
(317,410)
(470,542)
-
(567,410)
(47,925)
(18,467)
(462,482)
(563,358)
1,859,646
2,423,004
1,397,164
1,859,646
Energy Action Financial Report for the Full Year Ended 30 June 2023
29
Notes to the Financial Statements for year ended 30 June 2023
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 2023. The financial statements were authorised for
issue in accordance with a resolution of the directors on 29 September 2023.
Energy Action Limited (“the Parent”) is a company limited by shares incorporated in Australia whose shares are publicly trade d
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, modi fied, 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
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 Australian Accounting Standards Board (AASB) has issued a number of standards and amendments to standards that are
mandatory for the first time in the reporting period commenced 1 July 2022. The Group has assessed and determined that
there are no new or amended standards applicable for the first time for the financial report for the year ended 30 June 2023,
that materially affect the Group’s accounting policies or any of the amounts recognised in the financial statements.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Energy Action Financial Report for the Full Year Ended 30 June 2023
30
Note 2: Summary of Significant Accounting Policies (Continued)
Going concern assessments and solvency
The Group 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 FY23.
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed
loss of
$298,475 (2022: $2,841,941) . As at that date the Group had net current assets of $820,694 (2022: $1,563,400 net current
liability) and net asset deficiency of $24,106 (2022: $365,736).
the year ended 30 June 2023
financial statements,
incurred a
the Group
the
for
in
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as a going
concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the
amounts stated in the financial report.
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue as a going concern,
after consideration of the following factors:
•
•
The Group has renegotiated with CBA (lender) the repayment schedule and covenants associated with the borrowing
facility.
The Group has cash of $1,397,164 as at year end and had net cash inflows from operating activities of $768,091 for
the FY23 year then ended.
Accordingly, the Directors believe that the Group will be able to continue as a going concern and that it is appropriate to adopt
the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or liabilities
that might be necessary if the Group does not continue as a going concern.
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 2023. 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 su bsidiary
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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
31
Note 2: Summary of Significant Accounting Policies (Continued)
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.
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, Other taxes and Research & Development offset income
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 tha t 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. Unrecognis ed
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 2023
32
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 dat e, 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.
Research & Development offset income
Research and development tax offset is dependent on the submission and acceptance by the Australian Taxation Office
(ATO) of a research and development project description, and the company fulfilling its requirement to lodge a company tax
return for the relevant year. Management has adopted to recognise the claim on the cash basis, owing to the complexity
involved in determining the claim and resultant uncertainty in terms of the approval of the claim by the ATO.
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 2023
33
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 en d 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 o r, 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 2023
34
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 i s 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 calculati ng 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, whic h 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 init ial
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 2023
35
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 appropri ate,
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 2023
36
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% - 100%
j.
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of t he
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 2023
37
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 10.13% based on the last 2 years of history in addition to specific
provision of some aged items. Accordingly it was assessed that 10.13% 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.
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.
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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
38
Note 2: Summary of Significant Accounting Policies (Continued)
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.
o.
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.
p.
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.
q.
Unearned revenues
These amounts represent services invoiced in advance for which the work has not yet been performed and therefore cannot
be recognised as revenue. Unearned revenue is expected to be settled in no more than 12 months.
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 Energ y
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. 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.
s.
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.
t.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Energy Action Financial Report for the Full Year Ended 30 June 2023
39
Note 2: Summary of Significant Accounting Policies (Continued)
u.
Earnings per share
Basic loss per share
Basic loss per share is calculated by dividing the loss attributable to the owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
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.
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 invoiced” 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 durin g
the contract period. The assessment of historical cancellations is reviewed at each reporting period and revised accordingly.
As at 30 June 2023, a provision of 10.13% 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. This provision is consistent with
prior years estimates.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience, historical collection rates and forward-looking
information that is available. The allowance for expected credit losses, as disclosed in note 10, is calculated based on the
information available at the time of preparation. The actual credit losses in future years may be higher or lower.
Employee benefits provision
As discussed in note 2 (j), the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Lease make good provision
A provision has been made for the present value of anticipated costs for future restoration of leased premises. The provision
includes future cost estimates associated with closure of the premises. The calculation of this provision requires assumptions
such as application of closure dates and cost estimates. The provision recognised for each site is periodically reviewed and
updated based on the facts and circumstances available at the time. Changes to the estimated future costs for sites are
recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the provision that
exceed the carrying amount of the asset will be recognised in profit or loss.
Energy Action Financial Report for the Full Year Ended 30 June 2023
40
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 – This segment was sold in April 2022 and the full assignment of Embedded Networks customer
was completed in February 2023.
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 f rom various
energy providers.
Utilibox 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 monitori ng.
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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
41
Note 5: Revenue, Other Income and Expenses
5.1
Sales Revenue
Year ended 30 Jun 23
Energy Buying
Energy
Management
Embedded
Networks
$
$
$
Total
$
Revenue from Contracts
with Customer
5,975,083
5,121,001
42,429
11,138,513
5,975,083
5,121,001
42,429
11,138,513
Year ended 30 Jun 22
Energy Buying
Energy
Management
Embedded
Networks
$
$
$
Total
$
Revenue from Contracts
with Customer
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.
5.2
Other Revenue
Research & Development offset income
Proceeds received on sale of embedded networks
Other revenue
3,549,648
5,870,480
958,439
10,378,567
3,549,648
5,870,480
958,439
10,378,567
Note
Consolidated Group
2023
$
2022
$
5,265,940
2,640,172
5,872,573
7,738,395
11,138,513
10,378,567
Note
Consolidated Group
2023
$
274,254
50,000
30,084
354,338
2022
$
-
-
(538)
(538)
Research & Development offset income
The company undertakes eligible research and development (R&D) activities and is therefore entitled to claim an R&D
offset under the R&D incentive as administered by the Australian Taxation Office (ATO)
Energy Action Financial Report for the Full Year Ended 30 June 2023
42
Note 5: Revenue, Other Income and Expenses (continued)
Note
Consolidated Group
2023
$
2022
$
5.3
Employee benefits
Salaries
Commissions
Superannuation
Share based payment expense
Other
Government assistance
Total Employment benefits
5.4
Administrative costs
Accounting, audit and tax fees
Advertising and marketing
Legal and professional fees
Telephone and internet
Computer maintenance costs
Bad debt expense
Recruitment Costs
Insurance Costs
Marketing and subscription fees
Entertainment & sustenance costs
FBT expense
Consulting
Other expenses
Total Administrative costs
5.5
Depreciation and amortisation
Depreciation
Lease depreciation
Amortisation - Software
Total Depreciation & Amortisation
5.6
Financing costs / (income)
Interest income
Interest expense - Bank Loan
Interest expense – Directors Loan
Borrowing costs
Lease interest
Total Financing costs / (income)
5,590,213
6,648,655
417,508
601,281
-
364,850
593,992
621,887
(7,020)
139,022
-
(808,354)
6,973,852
7,188,182
209,344
328,319
124,212
73,919
660,959
48,000
154,475
227,106
149,647
14,176
57,833
126,676
215,763
187,006
380,275
40,322
39,289
776,111
80,659
148,837
213,734
141,089
14,963
36,181
132,250
340,425
2,390,429
2,531,141
46,184
223,422
164,751
434,357
68,009
212,345
401,138
681,492
(18,652)
429,265
200,942
27,313
37,680
676,548
(123)
243,246
76,332
49,640
22,736
391,831
Energy Action Financial Report for the Full Year Ended 30 June 2023
43
Note 6: Income Tax Expense
Reconciliation of 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
Note
Consolidated Group
2023
$
2022
$
15
15
19
-
-
-
-
-
-
-
281,473
-
19
281,473
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 25% (2022: 25%)
(74,615)
(640,117)
Add Tax effect of:
Temporary Differences
—
—
Prior year DTA derecognised
Other temporary differences
Permanent Differences
—
—
—
—
Current Year tax movement not recognised
NSW COVID Support Payment / Cashflow boost
Research & Development offset income
Other permanent differences
Income tax attributable to entity
The applicable weighted average effective tax rates are as
follows:
-
281,473
105,323
-
-
-
847,063
(202,089)
(68,564)
37,875
19
0%
-
(4,857)
281,473
-10.99%
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.
Tax losses not brought to account
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 25%
4,678,906
1,169,726
3,106,702
776,675
Deferred tax asset resulting from unrecognised tax losses of $4.7 million may be available for utlisation to offset against
future income tax assessments when the company generates taxable income, continues to comply with the conditions for
deductability imposed by law and no changes in income tax legislation adversely affect the company in utilising the benefits.
Energy Action Financial Report for the Full Year Ended 30 June 2023
44
Note 7: Earnings per Share
Basic loss per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during the year.
Diluted loss per share amounts are calculated by dividing the net loss 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:
2023
$
2022
$
Net loss attributable to ordinary equity holders of the parent from continuing operations
(298,475)
(2,841,941)
Net loss attributable to ordinary equity holders of the parent for basic earnings
(298,475)
(2,841,941)
Net loss attributable to ordinary equity holders of the parent adjusted for the effect of dilutions
(298,475)
(2,841,941)
2023
No.
2022
No.
Weighted average number of ordinary shares for basic earnings per share
27,005,723
26,988,600
Effect of dilution:
Performance rights
-
-
Weighted average number of ordinary shares adjusted for the effect of dilution
27,005,723
26,988,600
Basic and diluted loss per share (Statutory)
Cents
(1.11)
Cents
(10.53)
Energy Action Financial Report for the Full Year Ended 30 June 2023
45
Note 8: Dividends
Dividends paid:
Interim franked dividend of NIL cents per share
Final franked dividend of NIL cents per share
a.
b.
Proposed final 2023 franked dividend of NIL cents per share
(Final 2022 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
— Research & Development offset income
— Payment/(Refund) of provision for income tax
Tax rates
The tax rates at which paid dividends have been franked is:
•
•
•
•
27.5% - from 1 July 2018 – 30 June 2020
26% - from 1 July 2020 – 30 June 2021
25% - from 1 July 2021 – 30 June 2022
25% - from 1 July 2022 – 30 June 2023
Note
Consolidated Group
2023
$
-
-
-
-
2022
$
-
-
-
-
7,455,127
7,516,634
-
91,200
(274,254)
-
-
(152,707)
7,180,873
7,455,127
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
- franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
- franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
- franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Energy Action Financial Report for the Full Year Ended 30 June 2023
46
Note 9: Cash and Cash Equivalents
Cash at bank*
Restricted cash**
Total Cash
Note
Consolidated Group
2023
$
2022
$
1,389,916
1,852,428
7,248
7,218
22
1,397,164
1,859,646
*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.
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
2023
$
2022
$
1,461,091
1,404,067
(239,486)
(283,054)
1,221,605
1,121,013
49,315
54,737
a.
Provision for Impairment of Receivables
Current trade 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 2023
47
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+
$
2023
Trade and term receivables
1,461,091
904,936
149,342
36,956
Expected credit loss allowance
Expected credit loss rate
239,486
16.39%
21,738
2.4%
1,192
0.8%
661
3,934
13,053
1.79%
-331.82%
1,221,605
883,198
148,150
36,295
(9,119)
2022
Trade and term receivables
1,404,067
940,047
358,325
(19,233)
(74,893)
Expected credit loss allowance
283,054
177,480
705
683
Expected credit loss rate
20.16%
1,121,013
18.88%
762,567
0.20%
357,620
-3.55%
(19,916)
(886)
1.18%
(74,007)
365,923
202,842
55.43%
163,081
199,821
105,072
52.58%
94,749
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
2023
$
283,054
48,000
(91,568)
-
2022
$
230,989
80,825
(28,760)
-
239,486
283,054
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 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 2023
48
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
2023
$
2022
$
2,134,049
2,127,662
(2,103,771)
(2,058,621)
30,278
69,041
1,290,903
1,294,859
(1,290,184)
(1,293,440)
719
30,997
1,419
70,460
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 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Note
Computer
Equipment
Furniture and
Fittings
$
$
5.5
5.5
83,316
35,441
(49,716)
69,041
6,387
(45,150)
30,278
18,293
1,419
(18,293)
1,419
334
(1,034)
719
Total
$
101,609
36,860
(68,009)
70,460
6,721
(46,184)
30,997
Energy Action Financial Report for the Full Year Ended 30 June 2023
49
Note 12: Intangible Assets
Software development costs
Software Impairment
Accumulated amortisation
Net carrying value
Total intangibles
Consolidated Group:
Year ended 30 June 2021
Balance at the beginning of year
Additions (Internal development & purchases)
Impairment
Amortisation charge
Closing value at 30 June 2022
22
Year ended 30 June 2022
Balance at the beginning of year
Additions (Internal development & purchases)
Impairment
Amortisation charge
Closing value at 30 June 2023
Consolidated Group
2023
$
2022
$
13,848,022
13,141,581
(6,338,920)
(5,948,776)
(6,832,949)
(6,705,124)
676,153
487,681
676,153
487,681
Note
Software
Development
costs
Total
Intangibles
$
$
1,028,219
1,028,219
947,838
947,838
(1,087,238)
(1,087,238)
5.5
(401,138)
(401,138)
487,681
487,681
487,681
706,442
(353,219)
5.5
(164,751)
676,153
487,681
706,442
(353,219)
(164,751)
676,153
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.
The Company has made a large investment in business software to create a new proprietary data and emission portal called
Utilibox. Utilibox was launched in April 2023.
Energy Action Financial Report for the Full Year Ended 30 June 2023
50
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 2023, the Group 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.
12 (c) Impairment of software
For the year ended 30 June 2023, the Group performed a review of the software assets and reassessed the useful life of the
software asset pool. As a result, it was deemed that several assets had nil value as at 30 June 2023 and the Group has
impaired those assets as required. Total impairment across the various assets was $353,219.
During the year the Group capitalised costs associated with the development of Utilibox. Utilibox was launched in April 2023
and is utilised by customers of the Group. The Group expects that the software will generate future value and has therefore
not impaired the asset. Comparatively in prior year an impairment was made to the Utilibox software after the asset was
assessed by the Company to have Nil value . Impairment was $1.087,238 in 2022.
Note 13: Other Assets
CURRENT
Prepayments
Other assets
Work in progress
Revenue not invoiced*
NON CURRENT
Other non current assets
Revenue not invoiced*
* These represents conditional contract asset
Consolidated Group
2023
$
145,619
1,028
309
2022
$
163,408
201,339
132,934
3,182,051
2,235,702
3,329,007
2,733,383
-
-
2,570,126
2,217,237
2,570,126
2,217,237
Consolidated Group
2023
$
2022
$
CONTRACT ASSETS (CURRENT + NON-CURRENT)
5,752,177
4,452,939
Reconciliation:
Reconciliation of the written down values at the beginning and end
of the current and previous financial year are set our below:
Opening Balance:
Additions
Transfer to Trade Receivables
Energy Action Financial Report for the Full Year Ended 30 June 2023
4,452,939
6,176,501
5,132,738
2,492,261
(3,833,500)
(4,215,823)
5,752,177
4,452,939
51
Note 13(a): Right-of-use Assets
NON CURRENT
Right of use asset:
At cost
Accumulated depreciation
Consolidated Group:
Year ended 30 June 2021
Balance at the beginning of year
Additions
Depreciation
Impairment
Closing value at 30 June 2022
Year ended 30 June 2022
Balance at the beginning of year
Additions
Depreciation
Impairment
Closing value at 30 June 2023
Consolidated Group
2023
$
2022
$
670,266
338,674
(316,168)
(286,253)
354,098
52,421
Total Right of Use
Assets
$
264,766
-
(212,345)
-
52,421
52,421
525,099
(223,422)
-
354,098
Energy Action Financial Report for the Full Year Ended 30 June 2023
52
Note 14: Trade and Other Payables
CURRENT
Unsecured liabilities:
Trade payables
Goods & Services tax
Unearned revenues
Commissions payable
Rebates to channel partners
Makegood Liability for Office Rental
Other payables and accrued expenses
Consolidated Group
2023
$
2022
$
598,663
28,358
210,522
225,999
185,118
205,503
525,535
1,979,698
63,985
(27,201)
-
129,454
191,999
53,303
556,007
967,547
a.
Financial liabilities at amortised cost classified as trade and other
payables
Trade and other payables:
- Total current
- Total non current
Financial liabilities as trade and other payables
Terms and conditions of the above financial liabilities:
1,979,698
967,547
-
-
22
1,979,698
967,547
– 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
2023
$
2022
$
185,158
123,324
194,182
10,646
Energy Action Financial Report for the Full Year Ended 30 June 2023
53
Note 15: Tax
CURRENT
Current tax liabilities
Deferred Tax
Consolidated Group
2023
$
32
2022
$
13
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
At 30 June 2022 the tax asset was de-recognised as there was significant uncertainty that the tax losses representing the tax
asset will be used in the foreseeable future. At 30 June 2023 it was assessed that there was still uncertainty the tax losses will
be used in the foreseeable future, so the Group did not recognise a Deferred Tax Asset.
Deferred Tax 2022
Provisions
Accruals
Fixed assets
Prepaid commissions
Sundry
Tax Losses
Revenue not invoiced
Right of Use Asset
Opening
Balance
$
320,123
336,458
888,166
(44,362)
16,281
460,812
(1,629,814)
(66,191)
281,473
Tax rate change
$
-
-
-
-
-
-
-
-
-
Adj Prior
year
$
Charged to
Income
$
-
-
(10,854)
(87,765)
-
107,124
-
-
(320,123)
(336,458)
(877,312)
132,127
(16,281)
(567,936)
1,629,814
66,191
8,505
(289,978)
Energy Action Financial Report for the Full Year Ended 30 June 2023
Closing
Balance
$
-
-
-
-
-
-
-
-
-
54
Note 16: Provisions and other liabilities
Analysis of total provisions
CURRENT
Annual leave
Long service leave
NON CURRENT
Long service leave
Consolidated Group
2023
$
2022
$
175,531
73,944
249,475
176,117
47,718
223,835
54,032
54,032
97,894
97,894
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 o n 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 - CBA
Less capitalised debt establishment fees
NON CURRENT
Market Rate Loan Facility - CBA
Loan from Directors
Note
Consolidated Group
2023
$
2022
$
2,750,000
6,000,000
(37,281)
(37,277)
22
2,712,719
5,962,723
2,500,000
-
1,777,275
1,576,332
22
4,277,275
1,576,332
During the year a subordinated loan of $0.5 million was received from Mr Derek Myers in January 2023, attached to 3,125,000
Warrants which were available to be converted to ordinary shares at the exercise price of $0.16. The warrants had an expiry
date of 30 June 2023 and if they were not exercised would convert into an interest bearing loan from 1 July 2023 at the rate of
6% p.a quarterly in arrears. On 29 June 2023 Mr Derek Myers exercised the warrants, the $0.5 million was not converted into
a loan.
On 31 August 2023, the Company announced that the CBA had agreed to amend the Facility Deed agreement. The proposed
new Facility Agreement will include the following changes:
1. The loan be extended with final repayment date of 31 December 2024 replaced with 31 December 2025.
2. The repayment of $1.5M due 31 August 2023 be removed
3. The repayment schedule be revised to $300,000 per quarter with first repayment due 30 September 2023
4. The requirement to hold an aggregate balance of $1 million dollars at all times be revised to $700,000
5. Where cash balance held exceeds $1.5 million in a quarter the excess funds to be repaid to the bank
6. Updated Gearing Ratios and Interest Cover Ratios
The above changes have not been finalised in a signed agreement as at the date of this report.
Energy Action Financial Report for the Full Year Ended 30 June 2023
55
Note 17: Loans and Borrowings (Continued)
Utilisation of the facility is summarised in the following table:
Financing facilities
CURRENT
CBA Loan Facility
At the beginning of the reporting period:
Movement in the year:
-
-
-
-
Reclassified from Non-Current to Current
Reclassified from Current to Non-current
Repayment of Loan:
Capitalised/(expensed) debt fees:
At the end of the reporting period
NON CURRENT
CBA Loan Facility
At the beginning of the reporting period:
Movement in the year
-
-
-
Reclassified to Current:
Reclassified from Current to Non-current
Repayment of Loan
At the end of the reporting period
Directors Loan Facility
At the beginning of the reporting period:
Loan facility at establishment
Subordinated loans received
Loans converted to equity
Interest accrued during period (capitalised)
Repayment of Loan
At the end of the reporting period
Total Non-Current Loans
Consolidated Group
2023
$
2022
$
5,962,723
230,226
-
6,731,783
(2,500,000)
-
(750,000)
(1,000,000)
(4)
714
2,712,719
5,962,723
-
6,731,783
-
(6,731,783)
2,500,000
-
2,500,000
-
-
-
1,576,332
-
-
1,500,000
500,000
(500,000)
-
-
200,943
76,332
-
-
1,777,275
1,576,332
4,277,275
1,576,332
Energy Action Financial Report for the Full Year Ended 30 June 2023
56
Note 17: Loans and Borrowings (Continued)
Consolidated Group
2023
$
2022
$
Financing facilities
CBA Loan Facility
Loan facilities (excluding corporate card facility)
5,336,000
6,300,000
Amounts utilised
Borrowings
Bank guarantees – non-cash
Total amounts utilised
Total amounts unutilised
5,250,000
6,000,000
85,813
145,347
5,335,813
6,145,347
187
154,653
As at 30 June 2023, Energy Action had utilised $5.25 million of market rate loan and $0.08 million bank guarantees. The
carrying value of the loans and borrowings materially approximate fair value. Funds advanced under the facility are secured by
a charge over the assets of the Group.
Note 18: Issued Capital and Reserves
Issued Capital -fully paid ordinary shares
a.
Ordinary Shares (number)
At the beginning of the reporting period:
Movement in the year:
-
Shares issued – Convertible Note
At the end of the reporting period
b.
Ordinary Shares ($)
At the beginning of the reporting period:
Movement in the year
-
Shares issued – Convertible Note
At the end of the reporting period
Consolidated Group
2023
$
2022
$
7,337,906
6,837,906
7,337,906
6,837,906
Consolidated Group
2023
No.
2022
No.
26,988,600
26,988,600
3,125,000
-
30,113,600
26,988,600
Consolidated Group
2023
$
2022
$
6,837,906
6,837,906
500,000
-
7,337,906
6,837,906
Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of
shares held.
Energy Action Financial Report for the Full Year Ended 30 June 2023
57
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.
For the year ended 30 June 2023, the Group has recognised $Nil of share-based payment expense in the statement of
comprehensive income (30 June 2022: ($175,072)). Share based payments expense is net of reversals due to non-
achievement of performance vesting targets and forfeitures in the case of terminated employees.
Share Based Payment Reserve
At the beginning of the reporting period
Share based payment expenses
Transfer of reserve to retained earnings
Movement in the year
At the end of the reporting period
d.
Foreign currency translation reserve
Consolidated Group
2023
$
-
-
-
-
-
2022
$
175,072
(7,020)
(168,052)
(175,072)
-
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 entry (current period)
Movement in the year
At the end of the reporting period
e.
Capital Management
Consolidated Group
2023
$
3,702
(3,702)
(3,702)
-
2022
$
1,654
2,048
2,048
3,702
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.
Gearing Ratio
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 2023 and 30
June 2022 are as follows:
Energy Action Financial Report for the Full Year Ended 30 June 2023
58
Note 18: Issued Capital and Reserves (Continued)
Bank and Directors loans
Less cash and cash equivalents
Net debt / (cash)
Total Equity
Gearing percentage (%)
Note
17
9
Consolidated Group
2023
$
2022
$
6,989,994
7,539,055
(1,397,164)
(1,859,646)
5,592,830
5,679,409
(24,106)
(365,736)
-23,201%
-1,553%
Gearing as measured by total net debt divided by total equity was -23,201% as at 30 June 2023 and -1,553% at
30 June 2022.
g.
Dividend Profit Reserve
During the year ended 30 June 2021, 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. There has been no change
to this treatment during the financial year ending 30 June 2023 and 30 June 2022.
Note 19: Capital and Leasing Commitments
The Company holds a lease commitment as at 30 June 23 for the following location :
- Melbourne – ending July 2023 – held as Lease Liability (AASB16)
-
Parramatta – commenced July 2022, ending June 2025 - held as Lease Liability (AASB16)
The Group has provided the following bank or cash guarantees at 30 June 2023 for regional offices:
–
Parramatta office (Bank Guarantee)
– Melbourne office (Cash Guarantee)
Lessee Commitments
Minimum lease commitments payable but not recognised in the financial statements:
Within 1 year
Within 2 to 5 years
Energy Action Financial Report for the Full Year Ended 30 June 2023
Consolidated Group
2023
$
85,813
26,312
112,125
2022
$
-
26,312
26,312
Consolidated Group
2023
$
195,547
201,902
397,449
2022
$
-
451,583
223,303
674,886
59
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
Costs associated with derecognition of subsidiaries
Impairment
Restructuring costs
Onerous Contracts
Other Significant Items
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, accruals and lease liabilities
increase/(decrease) in deferred taxes
increase/(decrease) in provisions
Cash flow (used in)/from operations
Consolidated Group
2023
$
2022
$
(298,478)
(2,841,941)
434,357
681,492
-
-
-
252,615
140,109
353,219
-
-
-
-
2,048
(7,020)
149,004
-
1,087,238
(224,056)
(229,004)
(53,912)
(690,794)
(654,566)
2,188,086
895,669
1,249,831
(1,575,189)
20
(18,222)
768,091
(66,789)
434,181
439,807
b.
Reconciliation of liabilities arising from financing activities
Total liability from
financing activities
Opening
Balance
Cash flow
Acquisition
FY23
Long term borrowings
$
$
7,500,000
(750,000)
$
-
Lease Liability
133,970
(279,729)
525,099
FY22
Long term borrowings
7,000,000
500,000
-
Lease Liability
581,776
(470,542)
22,736
Non-cash changes
Foreign
exchange
movement
Fair value
changes
Closing Balance
$
-
-
-
-
$
-
-
-
-
$
6,750,000
379,340
7,500,000
133,970
Energy Action Financial Report for the Full Year Ended 30 June 2023
60
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:
2023
2022
Eactive Consulting Pty Limited (1)
Australia
N/A
100%
Energy Action (Australia) Pty Limited
Australia
100%
100%
EAIP Pty Limited
Australia
100%
100%
ACN 087 790 770 Pty Limited (1)
Australia
N/A
100%
Exergy Holdings Pty Limited
Australia
100%
100%
Exergy New Zealand Limited (1)
New Zealand
Energy Advice Pty Ltd (1)
Australia
Ward Consulting Services (NSW) Pty Ltd (1)
Australia
N/A
N/A
N/A
100%
100%
100%
Employee Share Trust
Australia
100%
100%
* Percentage of voting power is in proportion to ownership
(1)
b.
i.
These entities are dormant and were deregistered during FY23
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, direc tly 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.
Energy Action Financial Report for the Full Year Ended 30 June 2023
61
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 2023.
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
2023
$
2022
$
881,100
575,004
-
88,322
969,422
38,417
50,898
664,319
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.
c.
Loans from related parties
The group has received the following subordinated loans from Directors or related parties. The following loans were received
31st January 2022 and are due to expire 1st May 2025. The loans are unsecured and accrue interest at 12% p.a daily, payable
on expiration of the loan.
The funds were used to repay $1M to reduce the principal with the CBA Loan Facility and the remaining $0.5M was utilised in
the normal course of business.
2023
Opening
Balance
Converted to
Interest
Additions
Equity
earned
Closing
Balance
Lender
Related party
$
$
$
$
$
Bleach Family Co
Murray Bleach
525,444
66,981
592,425
Meehans Business
Paul Francis Meehan
525,444
66,981
592,425
Millar & Macfarlane Pty Ltd
Bruce Macfarlane
525,444
66,981
592,425
Mr Derek Myers
Derek Myers
-
500,000
(500,000)
1,576,332
500,000
(500,000)
200,943
1,777,275
Energy Action Financial Report for the Full Year Ended 30 June 2023
62
Note 21: Related Party Disclosures (Continued)
c.
Loans from related parties (continued)
2022
Lender
Related party
$
$
$
$
Opening Balance
Additions
Interest earned
Closing Balance
Bleach Family Co
Murray Bleach
Meehans Business
Paul Francis Meehan
Millar & Macfarlane Pty Ltd
Bruce Macfarlane
-
-
-
-
500,000
25,444
525,444
500,000
25,444
525,444
500,000
25,444
525,444
1,500,000
76,332
1,576,332
During the year the group also received a subordinated loan from Director Derek Myers valued at $500,000. No interest was
to accrue up to 30 June 2023 and the loan was attached to a warrant to exercise 3,125,000 shares at the value of $0.16 each.
If the warrant was not exercised by 30 June 2023 it expired and the loan would begin to accrue 6% interest per annum.
The warrant was exercised 21st June 23 and shares issued on 29th June 2023, the funds were utilised to reduce the principal
amount with the CBA.
Note 22: Financial Risk Management
The Group’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financia l
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
Tax payable
Total financial liabilities
Note
9
10
10
13
13
17
14
15
Consolidated Group
2023
$
2022
$
1,397,164
1,859,646
1,221,605
1,121,013
49,315
54,737
5,752,177
4,452,939
309
132,934
8,420,570
7,621,269
6,989,994
7,539,055
1,979,698
967,547
32
13
8,969,724
8,506,615
Energy Action Financial Report for the Full Year Ended 30 June 2023
63
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 met four times during the financial
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 cons isting
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 t he
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 meeti ng 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 2023
64
Note 22: Financial Risk Management (continued)
Consolidated
Group
Weighted
Average
Interest rate
%
Within 1 Year
1 to 5 years
2023
$
2022
$
2023
$
2022
$
Total
2023
$
2022
$
Financial liabilities due for payment
Bank loans
7.40%
2,712,719
5,962,723 2,500,000
-
5,212,719
5,962,723
Directors loans
12.00%
-
-
1,777,275
1,576,332
1,777,275
1,576,332
Lease Liability
185,158
123,324
194,182
10,646
379,340
133,970
Tax
Trade and other
payables (excluding
est. annual leave)
Total expected
outflows
32
13
-
-
32
13
1,979,698
967,547
-
-
1,979,698
967,547
4,877,607
7,053,607
4,471,457
1,586,978
9,349,064
8,640,585
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
c.
Interest rate risk
1,389,916
1,852,428
-
-
1,389,916
1,852,428
7,248
7,218
-
-
7,248
7,218
1,221,605
981,104
-
-
1,221,605
981,104
308
132,934
-
-
308
132,934
40,957
-
8,358
54,736
49,315
54,736
3,182,050
2,235,702
2,570,128
2,217,237
5,752,178
4,452,939
5,842,084
5,209,386
2,578,486
2,271,973
8,420,570
7,481,359
964,477
(1,844,221) (1,892,971)
684,995
(928,494)
(1,159,226)
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 2023, the Group had bank loans of $5.25 million at (line fee of 4.0%, usage fee of
1.40% and 3.765% 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 interes t
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 ra tes
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 2023
65
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 2023
Year ended 30 June 2022
Consolidated Group
Increase/decrease in basis points
$
Profit before tax
$
+/- 100
+/- 100
-/+ 58,041
-/+ 66,548
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 Australia Partners
Amounts received or due and receivable by RSM Australia Partners
for:
—
An audit of the financial report of the entity and any other entity in the
consolidated group
Consolidated Group
2023
$
2022
$
128,250
128,370
128,250
128,370
Energy Action Financial Report for the Full Year Ended 30 June 2023
66
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
(Accumulated Losses) / Retained earnings
Total Equity
Loss of the parent entity
Total comprehensive loss of the parent entity
Parent
2023
$
2022
$
15,504,626
15,557,611
4,063,942
15,065,506
19,568,568
30,623,117
(15,288,108)
(10,745,376)
(2,727,274)
(7,327,659)
(18,015,382)
(18,073,035)
7,337,906
6,837,906
-
-
(5,784,720)
5,712,176
1,553,186
12,550,082
(11,496,896)
(3,898,339)
(11,496,896)
(3,898,339)
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30 June 2022.
Contingent Liabilities
A demand made in the FY20 period in respect of alleged unpaid amounts for previous work provided to the Company and the
case remains ongoing as at 30 June 2023. The Claimant has 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 2023.
Capital Commitments – Property, Plant and Equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except
for the following:
▪ Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
▪ Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Energy Action Financial Report for the Full Year Ended 30 June 2023
67
Note 25: Events after the reporting period
On 31 August 2023, the Company announced that the CBA had agreed to amend the Facility Deed agreement. The proposed
new Facility Agreement will include the following changes:
1. The loan be extended with final repayment date of 31 December 2024 replaced with 31 December 2025.
2. The repayment of $1.5M due 31 August 2023 be removed
3. The repayment schedule be revised to $300,000 per quarter with first repayment due 30 September 2023
4. The requirement to hold an aggregate balance of $1 million dollars at all times be revised to $700,000
5. Where cash balance held exceeds $1.5 million in a quarter the excess funds to be repaid to the bank
6. Updated Gearing Ratios and Interest Cover Ratios
The above changes have not been finalised in a signed agreement as at the date of this report.
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 th e
consolidated group in future financial years.
Energy Action Financial Report for the Full Year Ended 30 June 2023
68
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 2023 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 2023 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 2023.
On behalf of the board
Murray Bleach
Director
29 September 2023
Energy Action Financial Report for the Full Year Ended 30 June 2023
69
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 2023, 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 2023 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.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 in the financial report, which indicates that the company incurred a loss of $298,475
for the year ended 30 June 2023. As at that date the Company had net current assets of $820, 694 and net asset
deficiency of $24,106. As stated in Note 2, these events or conditions, along with other matters as set forth in
Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
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.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
How our audit addressed this matter
Revenue Recognition
Refer to Note 2 (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
significance
to shareholders. The Group has
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 2 (m) of the financial report for the
related disclosures.
Other Information
We have:
• Assessed whether the Group’s revenue recognition
in compliance with Australian
policies were
Accounting Standards.
• Testing revenue transactions on a sample basis,
from each revenue stream, by checking them to
underlying records and ensuring consistency to the
timing and measurement of revenue
Group’s
recognition.
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 2023, 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 25 of the directors' report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Energy Action Limited., for the year ended 30 June 2023, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
C J Hume
Partner
Sydney, NSW
Dated: 29 September 2023
Shareholder information as at 21 September 2023
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
Number of
Shares
Current Interest1
Latest Notice Date
Mr Noel Kagi
Mr Derek Myers
2,945,331
10.91%
26/03/2021
3,299,746
10.95%
30/07/2023
Mr Bruce Duncan MacFarlane and Ms Linda Ann Millar
2,937,786
10.48%
26/02/2021
Mr Murray Bleach & related entities
5,100,700
16.93%
01/08/2023
Mr Paul Meehan & related entities
4,792,846
15.91%
01/08/2023
Mr Stephen Twadell & related entities
1,946,209
7.50%
13/11/2012
Number of securities on issue
The Company has 30,113,600 fully paid ordinary shares on issue which is held by 265 shareholders.
Voting rights
At a meeting of members, every member present at a meeting in person or by proxy shall have one vote on a show of hands,
and upon a poll, each share shall have one vote.
Distribution of security holders
The following table summarises the distribution of quoted securities as at 21 September 2023:
Energy Action Financial Report for the Full Year Ended 30 June 2023
73
Securities%No. of holders%27,945,22692.802910.941,479,7794.914316.23297,5810.993914.72379,2001.2612045.2811,8140.043412.8330,113,600100.00265100.00106,8700.358130.5710,001 to 100,0005,001 to 10,0001,001 to 5,0001 to 1,000Unmarketable ParcelsRange100,001 and OverTotal
Unmarketable parcels
The number of shareholding less than a marketable parcels of ordinary shares is 81. The marketable parcel of shares was
calculated based on the closing market price on 21 September 2023 of $0.195.
The twenty largest shareholders of quoted equity securities as at 21 September 2023
Energy Action Financial Report for the Full Year Ended 30 June 2023
74
RankName21 Sep 2023%IC14,827,54516.0323,125,00010.3832,900,6989.6342,615,3318.6852,067,6256.8761,774,1275.8971,696,2095.6381,455,2924.8391,207,5824.0110978,3613.2511875,8332.9112611,3872.0313552,5531.8314300,0001.0015282,0000.9416273,6040.9117252,3940.8418246,7800.8219246,2990.8220221,6330.74Total26,510,25388.03Balance of register3,603,34711.97Grand total30,113,600100.00HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 PACIFIC CUSTODIANS PTY LIMITED MRS GABRIELLE MARY BENT MONEX BOOM SECURITIES (HK) LTD J & C ALLEN SUPERANNUATION FUND PTY LTD MR EDWARD JAMES HANNA JASPER SUPERANNUATION FUND PTY LTD EMERALD SHARES PTY LIMITED REDBROOK NOMINEES PTY LTD MR IVAN ROMAN SLAVICH & MRS ANNA SLAVICH DEREK MYERS MEEHANTEAM PTY LTD ACRES HOLDINGS PTY LTD MR BRUCE DUNCAN MACFARLANE & MS LINDA ANN MILLAR HOLYOAKE INVESTMENTS PTY LTD MR MURRAY EDWARD BLEACH & MRS NORMA LEIGH EDWARDS TOVEELEN PTY LTD WEBZONE HOLDINGS PTY LTD RADELL PTY LTD MILLAR & MACFARLANE PTY LTD
Unquoted Securities
Type of security
Number of holders
Number of securities
Options allocated to employees
32
1,155,000
Options unallocated
Total Options Expiring 30 November 2025
Options Expiring 30 November 2025
715,000
1,870,000
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Unallocated options
Total
Number of holders
% of holders
Number of
securities
% of securities
-
11
10
8
3
32
-
-
34.38%
55,000
31.25%
100,000
25%
200,000
-
2.94%
5.35%
10.7%
9.37%
800,000
42.77%
715,000
38.24%
100%
1,870,000
100%
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 2023
75