2021
ANNUAL REPORT
Developing better
lifestyles for 26 years
1
Contents
3
Chairman’s
Report
11
Key Financial
Metrics
5
Managing
Director’s
Report
15
Finbar
Milestones
Looking out across the Perth
CBD Skyline it’s hard not
to notice the unmistakable
footprint of Finbar.
Since our beginnings in 1995, our vision has been to
build better lifestyles – a philosophy that has seen us
raise apartment development standards to new heights.
In the 26 years that followed, a gold standard commitment to our
craft has seen us become an award-winning company with an
astonishing 100% delivery track record on over 6,527 apartments.
With every Finbar development seen successfully through to
completion, it’s no wonder that Finbar has earned the reputation
as WA’s largest and most trusted apartment developer.
2
17
Our
Finbar
19
Completed
Projects
24
Projects Under
Construction
27
Future
Projects
Defining Perth’s
Skyline since 1995.
We are privileged to have helped shape Perth
into a vibrant modern city through over 75
landmark developments.
33
Investment
Properties
36
Financial
Report
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
3
Chairman’s
report
Message from
The Chairman
JOHN CHAN
“
In the rapidly changing market, there
are green shoots from areas that were
not previously anticipated.
”
Dear Shareholder
I am pleased to present Finbar Group’s Annual Report for
2021.
Finbar has this year delivered a net profit after tax of $8.86
million. This is a pleasing achievement in an external
environment that continues to be challenging for property
development companies, and represents a 25 per cent
increase on the previous year.
It is the 25th year of consecutive profit reported by Finbar,
a remarkable achievement through a number of different
property cycles.
At the end of the financial year, Finbar held $52.6 million
in cash compared with $30.6 million at 30 June 2020. The
company completed 486 sales – both finished product and
off-the-plan – over the course of the year, valued at $296
million.
Finbar held completed stock valued at $59.9 million as at
June 30, which equates to a sell down of $137 million in debt
free stock during the financial year.
This strong cash position, bolstered by strong cashflow from
completed stock settlements and increased confidence of
improving operating conditions, allowed your company to pay
a second half dividend of $0.02 per share, fully franked. This
followed the interim dividend of $0.02 per share announced
in February and brought the full year dividend to $0.04 per
share, fully franked.
The current market for apartment developers remains
challenging, particularly in marketing to those buyers that
traditionally have contributed to off-the-plan pre-sales for
major developments. As a result of this, we are seeing many
projects being delayed because the developer and financial
backers are unable to proceed without reaching their pre-
determined required level of pre-sales.
At the same time, the cost of raw materials, particularly
steel, and labour are continuing to increase, and therefore
construction costs are seeing significant upward pressure.
It is this environment where our long term and deep
relationships with builders like Hanssen Pty Ltd provide us
with cost advantages that helps Finbar offer a product that
remains very good value for money amongst any remaining
competition.
Because of this, we believe the level of new apartment stock
being developed and delivered to the market will continue
to tighten. As demonstrated by Finbar’s sales of completed
stock during the past financial year, there is good demand for
well-located, well-presented and well-priced apartments.
There is no question that there will be a decreased number
of new apartments available for sale in the market in coming
years which, if completed stock demand levels remain strong,
will lead to price appreciation.
To date, prices for apartments have not moved in step with
the increases seen in development costs, despite the limited
stock entering the market, but there are early signs that
prices are beginning to move.
This should ensure adequate margins are achieved for our
current projects as well as those that will commence this
financial year. With our strong balance sheet and cashflow,
and support from our banking and joint venture partners, we
are able to commit to commencing projects without reaching
4
The pre-sales achieved at Civic Heart stand at more than
“
$117 million which is testament to the quality of Finbar’s
developments and a reflection of the trust and goodwill we have
earned over the years from the West Australian market.
”
the usual level of pre-sales and this is a major competitive
advantage in the current market.
I wrote last year about the impacts caused by the COVID-19
pandemic and clearly they are still playing out and will
continue to do so for several years.
The stalling of immigration and international travel
caused by COVID-19 continues to impact on Finbar.
Sales to foreign buyers have historically accounted for
approximately 20 per cent of total sales and this market
has now almost completely disappeared and remains
uncertain into the future.
In the rapidly changing market however, there are green
shoots from areas that were not previously anticipated.
The advent of the pandemic has seen many Australians
living and working overseas wanting to return home. Perth
in particular has seen many expats entering from overseas
and this has contributed to the acute shortage of available
rental properties.
The resulting low vacancy rates and increasing rental prices,
in addition to the reduced supply of new stock as I discussed
earlier, will put further pressure on property prices.
Perth and parts of regional
Western Australia will be seen
as very attractive destinations
when life returns to conditions
closer to those that we enjoyed
pre-COVID-19.
We expect returning Australians to continue to boost
demand for housing and accommodation in coming years
and this should help negate the negative impacts caused
by the reduced number of foreign investors actively
looking to purchase in Perth. Unfortunately, the foreign
buyer duty that imposes an additional 7 per cent cost
on this sector of the market, does not look like it will be
revoked, and certainly continues to discourage foreign
investment in this sector.
I am pleased to report that, at the time of writing,
Finbar’s largest ever project Civic Heart in South Perth is
progressing well with construction proceeding according to
our expectations.
Large projects become more complex as the scale
increases. The lead time and construction timetable take
longer and there are a number of issues that make these
projects more difficult than projects of a smaller scale. It
is a reflection of how Finbar has grown over the years and
the intellectual property and in-house expertise it has built
that we were able to commit to this project with our joint
venture partners and progress it to its current point where
construction is well underway.
The pre-sales achieved at the project stand at more than
$117 million which is testament to the quality of Finbar’s
developments and a reflection of the trust and goodwill
we have earned over the years from the West Australian
market.
Civic Heart will be an outstanding apartment development
within the local community, bringing great amenity and
a range of food and beverage options. The sales to date
show it is an extremely attractive proposition for a range of
people with pre-sales reflecting buyers coming from many
different areas.
As with Civic Heart, construction at Finbar’s Perth CBD
Project – AT238 is also progressing well with the structure
now reaching level three at the time of writing and with
$21.1m in pre-sales secured.
We look forward to completing this project in the next
financial year.
In closing, I want to take the opportunity to thank our
sales agents, our builder - Hanssen, our joint venture
partners and our banking partners for their ongoing
support. I also want to thank all of our shareholders and
look forward to working on your behalf with our senior
management, as we focus on delivering our current and
future projects to market.
John Chan
Chairman
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
5
Managing
Director’s
Report
Message from
Managing Director
DARREN PATEMAN
“
We have built enormous goodwill in Western
Australia and people trust us to deliver on our
promise to deliver quality accommodation, a
better lifestyle, and value for money.
”
Finbar has this year delivered a 25 per cent increase in net
profit after tax of $8.86 million in a year that has seen some
very encouraging signs for the recovery of the residential
apartment development sector.
Our results were achieved predominately from improving
market conditions that recovered quickly from lows of the
pandemic news early last year to some of the highest sales
months we have seen in many years. This has helped us sell
down our previously completed existing stock and turn these
funds into cash for reinvestment and the return of capital to
shareholders through the dividend which I will discuss below.
Furthermore, it is allowing us to grow our pre-sale book to
support our new project launches.
Pleasingly, we have now almost completely sold those
projects that in recent years have contributed to an erosion
of development margins due to many years of a weakening
market. We expect margins to normalise as we begin to
complete our new round of current projects to market,
starting with Dianella which reached a stage of completion
late last month with revenues expected at the time of
publishing this report, and new projects under construction.
At the end of the financial year, Finbar held $52.6 million in
cash compared with $30.6 million at 30 June 2020. Finbar
held completed stock valued at $59.9 million, which as
the Chairman has noted, represents the sell down of $137
million in debt free stock during the financial year.
During the year we sold 486
apartments with a total value
of $296 million. A number of
these sales can be attributed
to the in-house sales team we
established during the year
that has performed ahead of
expectations amidst volatile
market conditions.
Importantly, this cash and the cashflows from the settlement
of our debt free stock selldown has allowed us to commence
two very significant projects at Civic Heart and AT238 during
the reporting period. We have also now committed to the
commencement of major project Aurora and are also
committed to commence The Point in this financial year.
It also allowed the payment of the $0.04 per share fully franked
dividend for the full year, up from $0.03 last year, which I hope
has pleased our long-term shareholders who have continued
to hold our shares during the Perth property downturn.
The repatriation of Western Australians to the state has been
a huge driver of accommodation demand. Furthermore,
Western Australia is benefiting from a net gain in eastern
states migration, the age group statistics indicating families
are relocating to Western Australia to escape COVID-19
6
restrictions and in pursuit of career opportunities and older
age groups indicating an attractive retirement destination.
committed to commence major projects and rapidly bring
them to the market as finished completed stock for sale.
This has helped support our efforts in marketing existing
stock which, prior to the completion of Dianella, was
approximately just two months of existing stock available
based on our current sales rates.
Whilst the market has improved for completed stock,
this is still not flowing through to off-the-plan pre-sales
activity. It is not easy to launch new projects and expect
them to be rapidly underpinned by off-the-plan pre-sales.
The investor market has not yet returned to normal levels.
Interest rates are at record lows and rental yields are
improving due to high rental demand fuelled by population
growth as previously mentioned, but property investors
are cautious in stepping back into the property market.
Investment property as an asset class is competing with
other investment asset classes, like the equities market,
which is seeing record highs and is easily accessible with
smaller commitments.
We believe the value erosion that has been experienced
in property investments in recent years is still fresh in
people’s minds and we believe that we need to see a
period of increased values to convince investors to return
to ‘bricks and mortar’ investments (or ‘concrete and
steel’ in our case). It won’t be until we see sustained
periods of price growth that investors are likely to return
to the market.
This difficulty in selling projects off-the-plan will ultimately
assist Finbar in cementing our existing number one
market position in the longer term. It continues to stifle
competition and is the single largest barrier for any
developer to obtain debt funding on which high density
development is so heavily reliant. The only way projects
are commencing currently is with development companies
committing more cash equity than in normalised market
conditions, which means you need a strong balance sheet,
good cashflows, sound banking relationships, and strong
joint venture partnerships to see the construction of these
projects commence.
Finbar continues to outperform relative to the WA market
in difficult conditions because Finbar and our joint venture
partners have been willing to commit capital to the
development of our projects even if pre-sales have not
reached levels required by rival development companies.
Whilst overall sales conditions have clearly improved, we
still see this financial year playing out similarly to recent
years where an approval, a signboard, and a selling agent
does not make you a developer, and the construction of
many local apartment projects will not get off the ground
if developers are relying purely on a pre-sales campaign to
underpin their commencement.
We, with our joint venture partners, have committed to our
major projects at Civic Heart in South Perth and AT238 on
Adelaide Terrace in Perth. We will do the same at Aurora
and The Point later in the financial year and I want to
thank our joint venture partners who, with Finbar, have
In total, during the current
financial year we will have
$726 million of product under
construction. That is a big
commitment to new projects,
and our largest since the
sector’s downturn which
commenced seven years ago.
Looking more closely at the current financial year, our
project in Dianella is the only project expected to complete
to add to the remaining stock and contribute to earnings
this financial year. AT238 in Perth’s CBD is anticipated to be
completed early next financial year, with the completion of
Civic Heart expected to follow late FY2023 or early FY2024.
Because of the timing of delivery of AT238, which is
currently anticipated to fall into early next financial year,
we expect earnings to moderate this year before building
materially the following year with the completion of those
previously mentioned major projects.
We have also taken the decision to slowly release some
of our investment properties in Karratha to the market,
where our investment has continued to improve. When
we first commenced our Karratha project in 2012 it was
a unique time for the region with the State Government
investing significant amounts into the Royalties for
Regions program, banks were lending in the region,
and a local and transient labour force was available
so construction could take place and costs readily
controlled. Now, some eight years later, none of the
above three factors are available to Karratha and as such,
Finbar’s asset is unique and not easily replicated. It is
the best asset of its type in the city and it remains in high
demand from an accommodation perspective.
We will continue to increase rents to meet demand both
improving our returns and value for Finbar’s retained
property comprising 101 apartments plus ground floor
commercial property. Although the investment has
performed particularly well and generated respectable
returns since 2012, we have never seen it as a long-term
holding for the company nor necessarily the best use
of our equity in the project. As property conditions in
Karratha continue to improve, we have opted to release
units progressively into the rising market. These sales
will contribute to earnings where they exceed our current
valuations and will release additional cash to Finbar for
reinvestment in our core business.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
8
7
Managing Director’s
Report continued
As expected, Federal and State Government stimulus
packages, put in place to counter the economic impacts of
COVID-19 and the ongoing State hard border controls, have
put upward pricing pressure on building costs, particularly on
labour and the cost of subcontractors.
Our building contracts are structured in a way to mitigate
these risks and we also carry contingencies within our
feasibilities to ensure we have adequate coverage to further
accommodate these pressures from a budgeted margin and
return perspective if required.
Some strategies to control costs include supporting our
primary builder, Hanssen, in the early pre-purchasing of
bulk materials where required to help hedge against the
increasing costs of raw materials like structural steel.
As already outlined by our Chairman John Chan, we value our
relationships with the major Australian banks, in particular
Commonwealth Bank and Westpac Banking Corporation, who
have been integral to Finbar’s continued development activity
over multiple decades and many property cycles. I would like
to add my personal thanks for the strong relationships we
enjoy and the success of countless projects over our 26 years
in the industry.
We have built a dedicated team
of senior management at Finbar,
including many that have been with
our Group for more than a decade.
We are proud of the Finbar small
office culture that we have which
plays a major part in ensuring
our corporate agility and I thank
them all for diligently working to
successfully address the recent
volatility and remaining motivated to
succeed in sometimes unrewarding
market conditions, seeing Finbar
through the property cycles.
One area of focus during the slower market conditions we
have experienced is to increase the promotional reach and
possible sales channels for our projects. Two such channels
to improve this reach was the establishment of Finbar to
Rent as a way to provide an improved offering to investors
and to reach renters, many of which will likely be future
property owners. The other is in the establishment of a small
in-house sales team to have a more intense knowledge,
marketing control, and lead conversion to better leverage our
significant project marketing spend.
Whilst established as a promotional tool and as a service
offering to our important buyers, Finbar to Rent has
completed its first full year of operation and is now managing
360 Finbar developed properties and generated $197,000
in net profit after tax for the financial year. It is a business
that has grown organically and will scale over time as new
Finbar projects are completed. Importantly, Finbar to Rent
allows us to retain a strong one-to-one monthly relationship
with existing buyers of our apartments, as well as provide
a database for introducing potential future buyers to Finbar
properties by way of marketing to tenants.
Finbar Sales achieved 136 sales to the value of $109.3 million
in its first year of operation, writing $2.03 million dollars in
commissions, and has sold 60% of the value sold at
Civic Heart, 67% at Sabina, and 92% of all sales at Aurora.
The commissions received from these sales have helped the
team produce a first year net profit of $189,000.
Finbar is a proud Western Australian property developer. The
overwhelming majority of our shareholders are long term
holders who purchased shares in Finbar knowing that Finbar
is a beneficiary of the success or otherwise of the West
Australian economy. We have become WA’s most trusted
apartment developer because we continue to commit capital
locally, to local projects, and continue to invest and develop
projects in Western Australia through the economic cycle.
We have built enormous goodwill in Western Australia and
people trust us to deliver on our promise to deliver quality
accommodation, a better lifestyle, and value for money.
Finbar has made a long-term commitment to the local
market, with long term management in place making
investment decisions that are not based on short term
factors. It is a business that has successfully operated this
way over two and a half decades and I thank you for your
ongoing support and interest in Finbar Group as we move into
a far more encouraging market environment.
By any measure, the overwhelmingly positive feedback we
receive on completion of Finbar projects by the buyers of
our apartments reflects well on our people, our product,
and our business.
Darren Pateman
Managing Director
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
9
The future is bright. The active
sales environment means we’re
able to fund all of our continued
capital commitments for Civic
Heart in South Perth and AT238 in
Perth. Construction at both Aurora
in Applecross and The Point in
Rivervale will also commence this
financial year.
486 apartments sold during
the year with a total value of
$296m
Finbar has this year delivered a
net profit after tax of
$8.86m
$0.04
per share fully franked
dividend for the full year.
26 years
on the ASX
1 0
Over 70%
of buyers say the reputation of the
developer is critical when choosing
an apartment. Our reputation is
everything to us.
100% delivery on
6,527 apartments over
75 landmark developments.
Delivering on our commitment to
develop better lifestyles.
Our customers trust us to
develop better lifestyles. For us,
there is no greater inspiration.
$726m
of product under construction.
1.3
sales per day in FY21.
160% up on FY20.
89% of customers would
recommend Finbar to a friend.
Word of mouth is our strongest asset.
Final Dividend FY21:
$5,442m
486 apartments sold FY21
We understand that buying ‘off the plan’ can
be daunting. Our process is transparent and
simple, we empower our customers with open
communication, and we’re rewarded with their
trust. 84% of our customers rated buying ‘off the
plan’ easy.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
11
Key Financial
Metrics
SOURCE OF EARNINGS
TOTAL EARNINGS
RENTAL INCOME
91%
6%
3%
66%
32%
2%
Development
Income
Rental Income
Other
Pelago
Fairlanes
Other
DEVELOPMENT INCOME
FULLY FRANKED
DIVIDEND PER YEAR (CENTS)
Sabina
Palmyra
Riverena
Vue
27%
17%
16%
15%
One Kennedy
12%
Motive
Concerto
6%
5%
Reva
2%
$296m
FY21 Sales
8.86m
after tax profit
$12.8m
average sales of off-the-plan
apartments per month
$11.3m
average sales of completed
apartments per month
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
R
A
E
Y
L
A
I
C
N
A
N
F
I
$0.00
$0.00
$0.01
$0.01
$0.01
$0.01
$0.03
$0.03
$0.03
$0.02
$0.03
$0.04
Interim Dividend
Final Dividend
$0.06
$0.06
$0.07
$0.075
$0.085
$0.085
$0.095
$0.10
$0.10
$0.07
$0.06
$0.06
$0.06
$0.03
$0.04
1 2
NET PROFIT AFTER TAX
EARNINGS PER SHARE
$MILLION
$25.9
$8.1
$5.1
$13.8
$11.4
$7.1
$8.9
2015
2016
2017
2018
2019
2020
2021
$0.11
$
2015
2016
2017
2018
2019
2020
2021
$0.04
$0.02
$0.06
$0.04
$0.02
$0.03
Finbars Net Profit After Tax increased
by $1.8 MILLION
Finbars EPS increased by 34% to $0.03
ENTERPRISE VALUE
$MILLION
PRESALES
$MILLION
2015
2016
2017
2018
2019
2020
2021
$289.2
$239.1
$258.4
$252.7
$262.7
$223.9
$250.2
Finbar’s Enterprise Value increased by 11.74%
to $250.2 MILLION
$407.1
$447.6
2015
2016
2017
2018
2019
2020
2021
$260.9
$194.1
$117.9
$53.6
$189.6
The increase in Presales for FY2021 to $189.6 MILLION was
largely due to presales achieved at Civic Heart, AT238 and
Aurora, and the settlement of Riverena. With the launch of
two new developments in FY2022 Finbar expects presales to
continue to strengthen.
PROJECT PIPELINE
TOTAL DEVELOPED UNITS
$BILLION
UNITS
2015
2016
2017
2018
2019
2020
2021
$2.3b
$2.2b
$2.0b
$1.8b
$1.2b
$1.3b
$1.4b
2015
2016
2017
2018
2019
2020
2021
4421
4923
5293
5675
5984
6402
6527
25%
increase in profit
Dividend per share FY 21
$0.04c
Finbar has rewarded shareholders with a fully franked
dividend for the past 25 years, the last 16 by way of an interim
and a final. The dividend paid for the full year ended 30 June
2021 is $0.04 cents per ordinary security fully franked.
Finbar maintains a robust Project Pipeline of $1.4 BILLION to
ensure that the company can capitalise on changing market
conditions and bring new product to the market as quickly and
efficiently as possible to maximise shareholder returns.
Total Developed Units reached 6,527 by the end of FY2021
with the addition of 125 units from the completion of
Riverena. Finbar continues to position itself as the largest
residential apartment developer in Western Australia.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
13
Key Financial
Metrics continued
TOTAL SALES AND VALUE
FINANCIAL YEAR
Number Of Sales
Total Value
AVERAGE SALES PER DAY SINCE 1996
FINANCIAL YEAR
Number Of Sales
Average Sales Per Day
AVERAGE SALES VALUE SINCE 1996
FINANCIAL YEAR
Number Of Sales
Average Sales
1 4
FY2021 REPEAT BUYERS
13%
87%
Repeat Buyers
New Buyers
During the year
we sold 486
apartments with
a total value of
$296 million
120
100
80
60
40
20
0
FIRB SALES
25
28
43
46
44
112
52
47
74
59
20
26
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
30%
25%
20%
15%
10%
5%
0%
25%
20%
15%
10%
5%
0%
FY2021 - SALES ACROSS AGE GROUP
10%
18-24
26%
25-34
12%
35-39
16%
40-49
18%
50-59
18%
60+
FY2021 - LOCATION OF BUYER FROM
THE DEVELOPMENTS
18%
12%
20%
17%
10%
3%
12%
3%
6%
2.5km or less 2.6-5km
6-10km
11-20km 21-30km 31-40km Regional WA Interstate Overseas
115178100230245309591305211138321184338547403430266235406264200486$0 $4 $6 $17 $17 $37 $86 $95 $329 $133 $198 $134 $334 $277 $304 $214 $296 010020030040050060070005010015020025030035040019961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018201920202021Millions245054$143 $158 $94 $167 $140 $148 $110 $195 $45 117854501002302453095913052111383211843385474034302662354062642004860.00.10.50.60.71.60.60.50.91.51.11.20.70.61.10.70.51.3010020030040050060070000.20.40.60.811.21.41.61.81996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202115240.80.80.40.90.10.10.3115241785450100230245309591305211138321184338547403430266235406264200486$330 $299 $232 $255 $319 $333 $365 $372 $389 $462 $519 $629 $678 $617 $730 $577 $611 $686 $706 $626 $598 $526 $559 $549 $610 0100200300400500600700 $- $100 $200 $300 $400 $500 $600 $700 $80019961997199819992000200120022003200420052006200720082009201020112012201320142015201620172018201920202021Thousands$557 2021 Finbar Group Annual Report2021 Finbar Group Annual Report 15
Finbar
Milestones
1 6
26 years on the ASX
In our 26th year on the ASX, our
shareholders benefit from a strong sales
and settlement cashflow environment
with an increase in dividend.
Lists on ASX as
Property Development
Company operating out
of a 2 bedroom Como
apartment
Commenced 1st
Development Seville
on the Point, South Perth
$1m
net profit
milestone
1000
apartments
milestone
$10m
net profit
milestone
$20m
net profit
milestone
Secured first
Pilbara project,
Pelago West,
Karratha
2014
$36.5m
after tax profit
Launched WA’s tallest
residential building,
Concerto.
St. Mark’s awarded
winner UDIA High
Density Development
and Urban Renewal
Completed two projects;
Aurelia and Aire West
Perth consisting of 296
apartments, 64 serviced
apartments and 22
commercial lots
Commenced
construction on four
projects, Vue Tower,
Reva, Palmyra East and
Sabina consisting of
582 apartments and 26
commerecial lots
26th Year
on the ASX
Completed three
projects; Sabina,
Riverena and One
Kennedy consisting of
415 apartments worth
$223.5m completed
Four projects;
Norwood, Arbor North,
Unison on Tenth and
Linq consisting of 492
apartments and 10
ancillary commercial
tenancies worth
$249.3m completed
1995
1997
1998
2001
2005
2006
2008
2009
2010
2012
2014
2015
2016
2017
2018
2019
2020
2021
Completed 1st
Development Seville on
the Point, South Perth
Maiden net profit
$0.7m
Relocated to first
corporate office,
Preston Street
South Perth (4 staff)
$100m market
capitalisation
Inclusion in All
Ordinaries Index
Completed The Westralian,
first luxury project on
Terrace Road, East Perth
2000
apartments
milestone
Commenced
construction at
AT238 and
Civic Heart
Completed two
projects; Vue Tower
and Reva consisting
of 286 residential
apartments and 23
commercial lots
Completed Palmyra
East consisting of 128
residential apartments
Record launch at
Aurelia, with $66m of
sales in the 1st month
Completed Finbar’s
largest development to
date, Subi Strand
Spring View Towers
awarded winner
UDIA High Density
Development
2015
Completed WA’s tallest
residential apartment
development to date,
Concerto
Completed over $3b
worth of developments
since 1995
5,000
apartment
milestone
Concerto awarded
winner UDIA High
Density Development
2017
Completed
company’s first
Pilbara project
Fairlanes awarded
winner UDA High
Density Development
Relocated to
Fairlanes building,
East Perth (13 staff)
3,000
apartment
milestone
2012
26 years ago, with three staff operating out of
a makeshift office and a vision to build better
lifestyles, Finbar listed on the ASX. Today, we’re
WA’s leading and most trusted residential
apartment developer.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report 17
Our Finbar
Finbar is one of Perth’s most successful and agile lifestyle
property developers leading the way in the development
of medium to high density residential apartments and
commercial property in Western Australia.
1 8
At the heart of every
Finbar development is a drive
to develop better lifestyles.
JOHN CHAN
Executive Chairman
26 years
DARREN PATEMAN
Managing Director
26 years
RONALD CHAN
Executive Director
17 years
KEE KONG LOH
Non-Executive Director
LEE VERIOS
Non-Executive Director
TERENCE PEH
Non-Executive Director
OUR PEOPLE
A team of 19 staff in Finbar’s head office
A team of 5 staff in Finbar to Rent
A team of 3 staff in Finbar Sales
Includes a management team with strong leadership skills and an excellent track record
Are led by experienced and long serving management focusing on decisions that benefit the
company for the long term
OUR BUSINESS
Retains a strong brand and a highly regarded reputation in WA
Operates on a low cost base providing attractive profit margins and shareholder returns
Maintains exemplary relationships with suppliers and stakeholders
Manages a pipeline of projects to ensure economies of scale and future growth
OUR COMMITMENT
Our commitment to our customers, shareholders, State and local government and the
environment has seen Finbar remain WA’s largest and most trusted apartment developer
OUR PROJECTS
Represent some of Perth’s most prestigious and well-appointed lifestyle apartments
Remain committed to creating progressive and innovative designs which represent value for money
Offer a successful fusion of residential, office and public space
OUR INVESTMENT PROPERTIES
Include the Fairlanes and Pelago buildings leased to reputable and proven businesses and individuals
Provide consistent annual revenues from investments
Ensure these additional revenue streams contribute to and smooth annual earnings
OUR FUTURE
Our vision is to remain WA’s leading medium to high density apartment developer
Continue to focus development efforts in and around inner city Perth
Sustain and enhance the quality of inner city living for current and future generations
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
19
2 0
Completed
Projects
DIANELLA APARTMENTS
36 Chester Avenue, Dianella
Project Company
36 Chester Avenue Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Construction Commenced Aug-20
Construction Completed
Sep-21
Total Lots
128
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
$62.8m
$32.1m
70 (55%)
58 (45%)
A
L
L
E
N
A
D
I
Dianella Apartments is conveniently located to the
amenity of Dianella Plaza and nearby high frequency
public transport. Combined with resort facilities, the
128 residential apartments within a low-rise built form
offer housing diversity within a local market devoid of
housing choice. Construction has been completed and
settlements have begun with the balance of unsold stock
expected to meet the strong owner-occupier demand
currently being experienced.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
21
2 2
Palmyra
APARTMENTS EAST
Lot 1001-1003 Rowe
Avenue Pty Ltd
Equity Accounted Investee
RIVERENA
5 Rowe Avenue, Rivervale
Project Company
Entity Type
Finbar’s Ultimate Interest 50%
Marketing Commenced
Feb-19
Construction Completed Nov-20
Total Lots
125
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
$52.5m
$46.6m
110 (88%)
15 (12%)
A
N
E
R
E
V
I
R
Riverena is the second stage of the Arbor development
in the Springs precinct, which comprises of 125 one,
two, and three bedroom residential apartments.
ONE KENNEDY
1 Kennedy Street, Maylands
Project Company
241 Railway Parade
Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Marketing Commenced
Oct-18
Construction Completed May-20
Total Lots
123
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
$53.5m
$46.5m
110 (89%)
13 (11%)
Y
D
E
N
N
E
K
E
N
O
One Kennedy comprises 120 one, two, and three
bedroom residential three storey walk-up apartments
and 3 commercial lots. One Kennedy capitalises on its
proximity to public transport, located only 200 metres
from Maylands railway station, and connecting directly
to the Central Business District 4.5 kilometres away.
SABINA APPLECROSS
908 Canning Highway, Applecross
PALMYRA APARTMENTS EAST
49 McGregor Road, Palmyra
Project Company
Finbar Applecross Pty Ltd
Project Company
43 McGregor Road Pty Ltd
Entity Type
Fully Owned Subsidiary
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Marketing Commenced
Feb-18
Construction Completed
Feb-20
Total Lots
167
Approximate Total Project
Sales Value
$117.5m
Value of Sales to Date
$113.2m
Lots Sold
Lots Unsold
163 (98%)
4 (2%)
Finbar’s Ultimate Interest 50%
Marketing Commenced
Jan-18
Construction Completed
Sept-19
Total Lots
128
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
$49.9m
$49.9m
128 (100%)
0 (0%)
I
A
N
B
A
S
A
R
Y
M
L
A
P
Located only metres from the Swan River and
approximately 700 metres to the Canning Bridge
Train Station. Sabina is the first stage of a three stage
development and consists of 164 residential apartments
and 3 ground floor commercial tenancies within a
podium and 30 storey tower built form. Finalist in the
Urban Development Industry Association Awards for
Excellence for High Density in 2020 and received a judges’
commendation in the UDIA Awards for Excellence in 2021.
Situated on the doorstep of the historic port city of
Fremantle in the established suburb of Palmyra,
Palmyra Apartments Estate East is the first stage of a
transformative three-storey residential development.
Achieving a strong response from first home buyers
and downsizers, the project successfully responded to
the growing owner-occupier demand for well-located,
affordable and good amenity product.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
23
2 4
VUE TOWER
63 Adelaide Terrace, East Perth
REVA
5 Harper Terrace, South Perth
Project Company
63 Adelaide Terrace Pty Ltd
Project Company
5-7 Harper Terrace Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Marketing Commenced
Feb-15
Construction Completed
June-19
Total Lots
250
Approximate Total Project
Sales Value
$143.7m
Value of Sales to Date
$140.6m
Lots Sold
Lots Unsold
247 (99%)
3 (1%)
R
E
W
O
T
E
U
V
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Marketing Commenced
Jul-17
Construction Completed
Feb-19
Total Lots
59
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
$47.4m
$39.7m
50 (85%)
9 (15%)
A
V
E
R
Vue Tower is located just 150 metres from Langley
Park and 300 metres from the Perth foreshore. The
apartments enjoy expansive views of the City, the
Swan River, Heirisson Island, Optus Stadium and the
Burswood Peninsula. The project consists of a 34 level
building and podium, and comprises 245 residential
apartments with ground floor commercial lots and
office units on levels 1 & 2.
Adjacent to Finbar’s highly successful Aurelia project in
South Perth, Reva is situated fronting Harper Terrace
and comprises of 41 luxury one, two, and three bedroom
apartments with rooftop amenities, as well as 18
commercial lots that were developed within the Harper
Terrace structure. A separate structure will also be
developed on the secondary frontage of Mill Point Road.
Projects Under
Construction
A r ti s t im p r e s s i o n
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
25
2 6
CIVIC HEART
1 Mends Street, South Perth
Project Company
1 Mends Street Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 52.5%
Construction Commenced FY21
Estimated Completion
Total Lots
FY24
335
Approximate Total Project
Sales Value
$404.5m
Value of Sales to Date
$118.1m
Lots Sold
Lots Unsold
116 (35%)
219 (65%)
T
R
A
E
H
C
I
V
I
C
This iconic site bounded by Mends Street, Labouchere
Road and Mill Point Road offers luxurious apartments,
world-class resort facilities, and a thriving ground floor
commercial precinct anchored by the heritage South
Perth Police Station and Post Office. Located in close
proximity to the Swan River, Perth Zoo, and the Mends
Street retail high street, Civic Heart is a transformational
development that has achieved strong sales in a highly
competitive localised market.
AT238
238 Adelaide Terrace, Perth
Project Company
240 Adelaide Terrace
Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Construction Commenced FY21
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
FY23
121
$90.9m
$21.6m
32 (26%)
89 (74%)
8
3
2
T
A
AT238 comprises 119 residential apartments and two
ground floor commercial lots in a 34 storey tower and
represents Finbar’s tenth development along Adelaide
Terrace. Embracing expansive winter gardens, AT238
is positioned as an unique apartment product with a
striking glazed façade and rooftop amenities that take
full advantage of the expansive views.
A r ti s t im p r e s s i o n s
A r ti s t im p r e s s i o n s
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
27
2 8
AURORA APPLECROSS
3 Kintail Road, Applecross
THE POINT
31 Rowe Avenue, Rivervale
Project Company
Finbar Applecross Pty Ltd
Project Company
31 Rowe Avenue Pty Ltd
Entity Type
Fully Owned Subsidiary
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Construction
Commencement
Estimated Completion
Total Lots
FY22
TBC
121
Approximate Total Project
Sales Value
$133.0m
Value of Sales to Date
$20.7m
Lots Sold
Lots Unsold
31 (25%)
90 (75%)
Finbar’s Ultimate Interest 50%
Construction
Commencement
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
Value of Sales to Date
Lots Sold
Lots Unsold
FY22
TBC
176
$97.1m
$5.6m
9 (5%)
167 (95%)
A
R
O
R
U
A
I
T
N
O
P
E
H
T
The second stage of three in the Canning bridge
precinct, Aurora combines luxurious apartment finishes
& world-class facilities within an affluent Applecross
address. Featuring a central shared lane and public
amenity piazza.
The Point development is located 200 metres from Finbar’s
highly successful Spring View Towers project and 350 metres
from Finbar’s Arbor projects. The development is located on
a 4,000 square metre site situated on the corners of Brighton
Road, Rowe Avenue, and Great Eastern Highway in the
Springs precinct in Rivervale. The Point will comprise of 167
one, two, and three bedroom apartments and 9 commercial
lots on the ground floor and will be situated at the main
entrance to the Springs precinct, opposite the Aloft Hotel.
A r ti s t im p r e s s i o n
A r ti s t im p r e s s i o n s
Future
Projects
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
29
3 0
Palmyra
APARTMENTS WEST
PALMYRA APARTMENTS WEST
45 McGregor Road, Palmyra
Project Company
43 McGregor Road Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
130
Approximate Total Project
Sales Value
$52m
A
R
Y
M
L
A
P
LOT 101 HAY STREET
Finbar Sub 107 Pty Ltd
CANNING HWY APPLECROSS STAGE 3
912 Canning Highway, Appl ecross
239 GREAT EASTERN HIGHWAY
Project Company
Finbar Sub 107 Pty Ltd
Project Company
Finbar Applecross Pty Ltd
Project Company
239 Great Eastern Highway
Pty Ltd
Entity Type
Fully Owned Subsidiary
Entity Type
Fully Owned Subsidiary
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
331
Approximate Total Project
Sales Value
$200m
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
153
Approximate Total Project
Sales Value
$103m
Finbar’s Ultimate Interest 100%
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
TBC
The Palmyra second stage has received an amended
DA to incorporate market feedback from stage one.
Comprising 130 residential apartments, the introduction
of lifts and re-alignment of apartment typologies within
a low-rise structure, is designed to respond to first
home buyer and downsizer drivers within the strong
owner-occupier purchaser demographic. With an
anticipated end value of $52 million.
Positioned opposite the high amenity Queens Gardens in
East Perth, the proposed development currently comprises
331 residential apartments and 1283sqm of commercial
plot ratio across 13 ground floor tenancies within two
towers of 37 and 26 storeys above a six level podium.
The commercial component is anchored by the heritage
Materials Science building located on the corner of Hay and
Plain Streets. A DA has been lodged with the Metropolitan
Redevelopment Authority and expected to be determined in
the first half of FY22.
A r ti s t im p r e s s i o n
Located only metres from the Swan River and
approximately 600 metres to the Canning Bridge Train
Station, this 2,620sqm site fronting Canning Highway
received DA approval in April 2017 as the third of 3 stages
comprising 151 residential apartments and 3 ground floor
commercial tenancies within a podium and 26 storey tower
built form.
The 239 Great Eastern Highway project has an approved
DA for 194 one and two bedroom apartments and
154sqm of ground floor commercial.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
31
3 2
LOT 1000
32 Riversdale Road, Rivervale
2 HOMELEA COURT
Cnr Rowe Avenue & Homelea Court, Rivervale
LOT 888
2 Hawksburn Road, Rivervale
FORMER ABC STUDIOS
187 Adelaide Terrace, East Perth
Project Company
32 Riversdale Road Pty Ltd
Project Company
Entity Type
Fully Owned Subsidiary
2 Homelea Court Springs
Pty Ltd
Project Company
Rowe Avenue Pty Ltd
Entity Type
Equity Accounted Investee
Project Company
Finbar Sub 104 Pty Ltd
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
TBC
143
Approximate Total Project
Sales Value
$80m
Entity Type
Fully Owned Subsidiary
Finbar’s Ultimate Interest 100%
Estimated Completion
Total Lots
TBC
185
Approximate Total Project
Sales Value
$83m
Finbar’s Ultimate Interest 50%
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
TBC
Finbar’s Ultimate Interest 100%
Estimated Completion
Total Lots
Approximate Total Project
Sales Value
TBC
TBC
TBC
A development application is being prepared for
lodgement with the WAPC as part of the Part 17
Significant Development approvals pathway. Initial plans
propose a 19 storey tower with over 140 residential
apartments, leveraging the direct connection with the
Swan River reserve, close proximity to the Burswood
train station, adjacent extensive bicycle path network,
and the excellent amenity surrounding the Optus
Stadium.
Acquired in 2016, the 3,770 square metres of land
located on the corner of Rowe Avenue and Homelea
Court, opposite Finbar’s Spring View Towers is
proposed to be developed into a project consisting of
approximately 185 apartments within a 10 level building.
The proposed apartment project has an estimated end
value of approximately $83 million.
The current approved DA comprises a 6 level office
building with 6,250sqm NLA. A concept has been
developed for a residential outcome of 86 apartments
and 1,200sqm of commercial.
The former ABC Radio Studios heritage building with a
GFA of 3,711sqm over 3 levels. Finbar acquired the final
stage from the JV partner to better leverage potential
future development outcomes.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
33
3 4
PELAGO
Sharpe Avenue, Karratha
Total Lots
Residential Lots
Commercial Lots
122
100
22
FY22 Forecasted Rent
$5.14m
Lots Leased
113 (93%)
Residential Lots Leased
97 (97%)
Commercial Lots Leased
16 (73%)
FAIRLANES
181 Adelaide Terrace, East Perth
Total Sqm
Office Sqm
Retail Sqm
7582
7112
470
FY22 Forecasted Rent
$1.96m
Sqm Leased
7366 (97%)
AURELIA
1 Harper Terrace, South Perth
Total Sqm
929
Estimated sales value
$6.5m
Estimated income value
$366,000 p.a.
Total Sales value
$129.8m
Investment
Property
2021 Finbar Group Annual Report2021 Finbar Group Annual Report 35
3 6
Financial
Report
CONTENTS
PAGE
Directors’ Report
(including Corporate Governance Statement)
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Lead Auditor’s Independence Declaration
ASX Additional Information
37
54
55
56
57
58
94
95
100
101
2021 Finbar Group Annual Report2021 Finbar Group Annual Report DIRECTORS’ REPORT
For the Year Ended 30 June 2021
The Directors present their report together with the consolidated financial report of the Group, comprising Finbar Group Limited (‘the
Company’), its subsidiaries and the Group’s interest in equity accounted investees for the financial year ended 30 June 2021 and the
independent auditor’s report thereon.
CONTENTS OF DIRECTORS’ REPORT
PAGE
1 Directors
2 Company Secretary
3 Directors’ Meetings
4 Corporate Governance Statement
4.1 Board of Directors
4.2 Remuneration Committee
4.3 Remuneration Report - Audited
4.3.1 Principles of Remuneration - Audited
4.3.2 Directors’ and Executive Officers’ Remuneration - Audited
4.3.3 Analysis of Bonuses included in Remuneration Report - Audited
4.3.4 Directors’ and Executives Interests
4.3.5 Equity Instruments - Audited
4.4 Audit Committee
4.5 Risk Management
4.6 Ethical Standards
4.7 Communication with Shareholders
4.8 Diversity
5 Principal Activities
6 Operating and Financial Review
7 Dividends
8 Events Subsequent to Reporting Date
9 Likely Developments
10 Directors’ Interests
11 Indemnification and Insurance of Officers and Auditors
12 Non-audit Services
13 Lead Auditor’s Independence Declaration
38
39
39
39
40
40
40
40
42
44
44
45
45
45
46
47
47
47
48
51
51
51
52
52
53
53
DIRECTORS’ REPORT
For the Year Ended 30 June 2021
1. Directors
The Directors of the Company at any time during or since the end of the financial year are:
Executive Director and Chairman
John CHAN - BSc, MBA, MAICD
Director since 27 April 1995
Chairman since 15 July 2010
John Chan is Executive Director and Chairman of Finbar, and a Director of its Subsidiaries and equity accounted investees.
John was appointed director in 1995 and was instrumental in re-listing Finbar on the ASX as a property development company.
Prior to joining Finbar, John headed several property and manufacturing companies both in Australia and overseas.
John holds a Bachelor of Science from Monash University in Melbourne and a Master of Business Administration from the University
of Queensland. John is a Member of the Australian Institute of Company Directors, is a Trustee for the Western Australian Chinese
Chamber of Commerce, and is a former Senate Member of Murdoch University.
Managing Director
Darren John PATEMAN - EMBA, GradDipACG, ACSA, AGIA, MAICD
Director since 6 November 2008
Managing Director since 15 July 2010
Darren Pateman is the Managing Director of Finbar and a Director of Finbar’s Subsidiaries and equity accounted investees.
Darren commenced with Finbar prior to its re-listing on the ASX as a property development company in 1995 and in this time has
played a primary role in developing Finbar’s systems, strategy and culture.
Darren has held several positions in his 26 years with the company which has given Darren an intimate knowledge of the key aspects
of Finbar’s business. Darren was formerly Company Secretary from 1996 to 2010, Chief Executive Officer from 2008 to 2010, and was
appointed Managing Director on 15 July 2010.
Darren is a Chartered Secretary and holds an Executive Master of Business Administration from the University of Western Australia
and a Graduate Diploma in Applied Corporate Governance (GradDipACG). Darren is an Associate of the Institute of Chartered
Secretaries and Administrators and a Member of the Australian Institute of Company Directors.
Executive Director and Chief Operations Officer
Ronald CHAN
Director since 24 February 2017
Ronald Chan is the Chief Operations Officer of Finbar and a Director of Finbar’s Subsidiaries and equity accounted investees.
Ronald joined the Board as an Executive Director on 24 February 2017. Ronald brings 17 years of experience in Finbar’s Company
operations where he has worked in several roles in the organisation including marketing, contract administration, and in 2013 was
appointed Chief Operations Officer. In this role Ronald has gained an intimate understanding of the Company’s relationships and
systems and managed the Company’s transition to digital and online marketing strategies.
Non-executive Director
Kee Kong LOH - B Acc, CPA
Director since 28 April 1993
Kee Kong Loh joined the Board in April 1993 and has substantial experience in the governance of companies in property development,
marine transportation, and electronics manufacturing sectors. He has a degree in accountancy from the University of Singapore and is
a member of the Institute of Certified Public Accountants of Singapore.
Non-executive Director
Terence Siong Woon PEH - B.Comm, M.Comm
Director since 24 April 2018
Terence Peh joined the Board on 24 April 2018. Terence is Chief Executive Officer and Executive Director of Chuan Hup Holdings
Limited, an investment company listed on the Singapore Stock Exchange, and Finbar’s largest corporate shareholder.
Terence has over 22 years of experience in property development investment and project management in Asia Pacific, and
management experience in finance in the marine and electronics manufacturing services industries.
Terence obtained his Bachelor of Commerce in Marketing from Curtin University and a Master of Commerce in Finance from the
University of New South Wales.
37
3 8
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
DIRECTORS’ REPORT
For the Year Ended 30 June 2021
1. Directors (continued)
Non-executive (Independent) Director
Lee VERIOS - LLB, MAICD
Director since 6 December 2011
DIRECTORS’ REPORT
For the Year Ended 30 June 2021
4. Corporate Governance Statement (continued)
4.1 Board of Directors
Role of the Board
Lee Verios joined the Board in December 2011. He is a well credentialed commercial lawyer having practised in Western Australia for
over 40 years.
Until his retirement from practising law in 2012, Lee was partner in the international law firm of Norton Rose and the leader of their
Commercial Property division in Perth. Throughout his legal career, Lee has held senior management roles in each of the firms of
which he has been a member.
The Board Charter sets out the Board’s role, powers and duties, and establishes the functions reserved for the Board and those which
are delegated to the management. The Board’s primary role is the protection and enhancement of long-term shareholder value. To
fulfil this role, the Board is responsible for the overall corporate governance of the Group.
The Board has delegated responsibility for the operation and administration of the Group to the Executive Chairman, the Managing
Director and Senior Executives.
In addition to his legal practice, Lee is an experienced company director, having held positions in a variety of public and private
enterprises.
Composition of the Board
Lee is a member of the Australian Institute of Company Directors, the Law Society of WA and was previously Chairman of the
Australian Indonesian Business Council (WA Branch).
2. Company Secretary
The Company Secretary of the Company at any time during or since the end of the financial year is:
Edward Guy BANK - B Bus, ASCPA
Company Secretary since 2 December 2016
Edward Bank is the Company Secretary of Finbar, and of Finbar’s Subsidiaries and equity accounted investees. Ed is a Certified
Practicing Accountant with 28 years experience in private practice including 8 years as the Company’s external accountant. Ed joined
the Company in 2005 in the capacity of Chief Financial Officer.
Ed continues to hold the position of Chief Financial Officer.
3. Directors’ Meetings
The number of Directors’ meetings attended by each of the Directors of the Company, whilst being a Director, during the financial year
are:
Director
Board
Meetings
Held
Board
Meetings
Attended
Resolutions
Without
Meetings
Audit
Committee
Meetings
Held
Audit
Committee
Meetings
Attended
Remuneration
Committee
Meetings Held
Remuneration
Committee
Meetings
Attended
John CHAN
Darren John PATEMAN
Ronald CHAN
Kee Kong LOH
Lee VERIOS
Terence Siong Woon PEH
4
4
4
4
4
4
4
4
4
4
4
4
1
1
1
1
1
1
N/A
N/A
N/A
2
2
2
N/A
N/A
N/A
2
2
2
2
N/A
N/A
2
2
2
2
N/A
N/A
2
2
2
4. Corporate Governance Statement
The Board (‘Board’) of Finbar Group Limited (‘Finbar’ or ‘the Company’), its subsidiaries and equity accounted investees (collectively
the Group) is committed to maintaining a high standard of corporate governance in the conduct of the organisation’s business in
order to create and deliver value to shareholders. In this regard, Finbar has established a corporate governance framework, including
corporate governance policies and charters to assist in this commitment. A copy of these policies and charters are available from the
governance page of Finbar’s website, www.finbar.com.au and are referenced throughout this document where relevant.
The framework is reviewed and revised in response to changes to law, developments in corporate governance best practice and
changes to the Finbar business environment.
As a listed entity, Finbar is required to comply with Australian laws including the Corporations Act 2001 (Cth) and the Australian
Securities Exchange Listing Rules, and to report against the ASX Corporate Governance Council’s Principles and Recommendations.
The Board recognises the importance of ensuring that Directors are free from interests and relationships that could, or could
reasonably be perceived to materially interfere with the Director’s ability to exercise independent judgement and act in the Group’s best
interests.
Accordingly, the Board has adopted guidelines, set out in the Board Charter, which are used to determine the independence of the
Directors.
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Group.
Where the Board believes that a significant conflict exists for a Director on a Board matter, the Director concerned will be restricted
from receiving materials, discussing or voting on the matter.
Details of each of the non-executive Directors (Independent) are set out in the Directors Report (page 39).
4.2 Remuneration Committee
The Remuneration Committee Charter sets out the Remuneration Committee’s role, powers and duties, and establishes the functions
delegated to the Committee by the Board. The Remuneration Committee reviews and makes recommendations to the Board on
remuneration packages and policies applicable to the Executive Officers and Directors themselves of the Company and of other Group
Executives. It is also responsible for share option schemes, incentive performance packages, superannuation entitlements, retirement
and termination entitlements, fringe benefits policies and professional indemnity and liability insurance policies.
The following directors serve on the Remuneration Committee:
• Kee Kong LOH (Chairman) - Non-executive Director
• John CHAN - Executive Director and Chairman
• Lee VERIOS - Non-executive Independent Director
• Terence Siong Woon PEH - Non-executive Director
The Remuneration Committee Charter sets out the process for the periodical evaluation of the performance of the Executive Chairman
and Managing Director. These evaluations have been conducted during the period.
The Remuneration Committee Charters sets out the process for the periodical evaluation of the performance of the Senior Executives.
The Remuneration Committee in consultation with the Executive Chairman and Managing Director are responsible for the periodical
evaluation of the performance of the Senior Executives. These evaluations have been conducted during the period.
Finbar has a written agreement, either in the form of an employment contract or letter of employment, with each Executive Director
and Senior Executive which sets out the terms of their appointment.
A copy of the Remuneration Committee Charter is available on Finbar’s website www.finbar.com.au.
4.3 Remuneration Report - Audited
4.3.1 Principles of Remuneration
Remuneration of Directors and Executives is referred to as remuneration as defined in AASB 124 Related Party Disclosures and Section
300A of the Corporations Act 2001.
Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Group,
including Directors of the Company and other Executives. Key management personnel comprise the Directors of the Company and
Executives for the Company and the Group including the Section 300A Executives.
Remuneration levels for key management personnel and the secretary of the Company, and key management personnel and
secretaries of the Group, are competitively set to attract and retain appropriately qualified and experienced Directors and Executives.
The Remuneration Committee periodically obtains independent advice on the appropriateness of remuneration packages of both the
Company and the Group given trends in comparative companies both locally and internationally and the objectives of the Company’s
remuneration strategy.
39
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2021 Finbar Group Annual Report2021 Finbar Group Annual Report
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.1 Principles of Remuneration (continued)
The remuneration structures explained below are designed to attract suitably qualified candidates, reward the achievement of
strategic objectives and achieve the broader outcome of creation of value for shareholders. The remuneration structures take into
account:
• the capability and experience of the key management personnel;
• the key management personnel’s ability to control the Group’s performance;
• the key management personnel’s contribution to revenue and future earnings potential;
• project outcomes;
• the key management personnel’s length of service; and
• the Group’s performance including:
- the Group’s earnings;
- the growth in share price and delivering constant returns on shareholder wealth; and
- the amount of incentives within each key management person’s remuneration.
Remuneration packages include a mix of fixed and variable remuneration, short-term performance-based incentives and can include
long-term performance-based incentives.
Fixed Remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any fringe benefit tax
charges related to employee benefits including motor vehicles), as well as employer contributions to superannuation funds.
Remuneration levels are reviewed annually through a process that considers individual, segment and overall performance of the
Group. In addition, where appropriate, external consultants provide analysis and advice to ensure the Directors’ and Senior Executives’
remuneration is competitive in the market place. A Senior Executive’s remuneration is also reviewed on promotion.
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.1 Principles of Remuneration (continued)
Consequences of Performance on Shareholders Wealth
In considering the Group’s performance and benefits for shareholder wealth, the Remuneration Committee has regard to the following
indices in respect of the current financial year and the previous four financial years:
Total comprehensive income
$8,863,000
$7,068,000
$11,372,000
$13,760,000
$5,059,000
2021
2020
2019
2018
2017
Profit before tax
Dividends paid
Change in share price
Return on capital employed
Return on total equity
$12,043,000
$10,488,000
$15,947,000
$18,786,000
$10,369,000
$8,163,000
$13,606,000
$16,302,000
$13,874,000
$16,219,000
$0.15
3.82%
3.65%
-$0.14
4.47%
2.92%
-$0.10
5.58%
4.58%
$0.14
6.24%
5.46%
-$0.03
4.76%
2.34%
Profit before tax is considered as one of the financial targets in setting the STI.
Dividends, changes in share price, and return of capital are included in the total shareholder return (TSR) calculation which is one of
the performance criteria assessed for the LTI. The other performance criteria assessed for the LTI is growth in earnings per share,
which takes into account the Group’s net profit.
The overall level of key management personnel’s remuneration takes into account the performance of the Group over a number of
years.
Directors
Total base remuneration for all Directors, last voted upon by shareholders at the November 2013 AGM, is not to exceed $360,000 per
annum. Directors’ base fees are presently $197,790 per annum. In line with industry practice, as from 1 July 2017 executive salaries
were varied to be inclusive of all directors duties and responsibilities.
Performance Linked Remuneration
4.3.2 Directors’ and Executive Officers’ Remuneration
Performance linked remuneration includes short-term incentives (STI) and can include long-term incentives (LTI), which are designed
to reward key management personnel for meeting or exceeding their financial and personal objectives. The short-term incentive is
an ‘at risk’ bonus provided in the form of cash, whilst the long-term incentive is provided as shares or options over ordinary shares of
the Company under the rules of the Employee Incentive Plan 2013 and Director Share Plan 2014. As at 30 June 2021, there were no
options on issue.
Short-term Incentive
The Remuneration Committee has elected to set the primary financial performance objective of ‘profit before tax’ as the key measure
for the calculation of the short term incentives of key management personnel. The non-financial objectives vary with position and
responsibility and include measures such as those outlined above. The STI for the current period was wholly based on a percentage
of ‘profit before tax’. Contractual amounts are accrued in the current year and discretionary amounts are accounted for in the year of
payment. The contractual amount is set at 3.3% of ‘profit before tax’ for 2021 financial year.
At the end of the financial year the Remuneration Committee assess the actual performance of the Group, the relevant segment and
the individual key management personnel contribution to the Group. The performance evaluation in respect of the year ended 30 June
2021 has taken place in accordance with this process.
Long-term Incentive
Incentive shares or options issued under the Employee Incentive Plan 2013 or Director Share Plan 2014 are made in accordance with
thresholds set in the plans approved by shareholders at the relevant Annual General Meeting, subject to the Board’s discretion.
Short-term and Long-term Incentive Structure
The Remuneration Committee considers that the above performance-linked remuneration structure is generating the desired
outcome. The evidence of this is in respect to the long term historical profit and dividend growth of the Company, coupled with the long
term retention of key management personnel resulting in the retention of Company intellectual property.
Details of the nature and amount of each major element of remuneration of each Director of the Company and of the named Group
Executives who received the highest remuneration are:
Short-Term
Post - Employment
Directors
Fees and
Committee
Fees
$
Salary
$
STI Cash
Bonus (A)
$
Non
Monetary
Benefits
$
Total
$
Superannuation
$
Other
Long
Term
$
Total
$
-
527,692
132,272
-
659,964
25,000
8,869
693,833
-
663,948
132,272
47,134
843,354
21,614
11,032
876,000
-
368,298
66,136
-
434,434
21,614
6,069
462,117
71,710
61,535
65,490
-
-
-
-
-
-
-
-
-
71,710
61,535
65,490
-
-
6,220
-
-
-
71,710
61,535
71,710
For the year ended
30 June 2021
Executive Directors
Mr John Chan, Executive
Chairman
Mr Darren John Pateman,
Managing Director
Mr Ronald Chan, Chief
Operating Officer*
Non-executive Directors
Mr Kee Kong Loh
Mr Terence Siong Woon Peh
Mr Lee Verios
Executives
Mr Edward Guy Bank, CFO*
-
290,381
66,136
-
356,517
21,694
4,707
382,918
198,735
1,850,319
396,816
47,134
2,493,004
96,142
30,677 2,619,823
41
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DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2021DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
For the year ended
30 June 2020
Executive Directors
Mr John Chan, Executive
Chairman
Mr Darren John Pateman,
Managing Director
Mr Ronald Chan, Chief
Operating Officer*
Non-executive Directors
Mr Kee Kong Loh
Mr Terence Siong Woon Peh
Mr Lee Verios
Executives
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.2 Directors’ and Executive Officers’ Remuneration (continued)
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.3 Analysis of Bonuses included in Remuneration
Details of the vesting profile of the short term incentive bonuses awarded as remuneration to each Director of the Company and each
of the named Group Executives are detailed below.
Short-Term
Post - Employment
Directors
Fees and
Committee
Fees
$
Salary
$
STI Cash
Bonus (A)
$
Non
Monetary
Benefits
$
Total
$
Superannuation
$
Other
Long
Term
$
Total
$
-
532,130
134,694
-
666,824
26,817
(72,997)
620,644
Mr John Chan
Executive Directors
-
668,906
134,694
90,556
894,156
21,173
11,026
926,355
-
373,257
67,347
-
440,604
21,173
23,048
484,825
Mr Darren John Pateman
Mr Ronald Chan
Executives
Mr Edward Guy Bank
Short Term Incentive Bonus
Included in
Remuneration
$
% vested in year
%
132,272
132,272
66,136
66,136
396,816
100%
100%
100%
100%
100%
76,105
65,930
69,661
-
-
-
-
-
-
-
-
-
76,105
65,930
69,661
-
-
6,444
-
-
-
76,105
65,930
76,105
Amounts included in remuneration for the financial year represent the amount of entitlements in the financial year based on
achievement of personal goals and satisfaction of performance criteria, as per Short Term Incentives (page 41). No discretionary bonus
was paid to the Executives in the 2021 financial year (2020: NIL). Any discretionary amounts of executive bonuses relating to 2021
financial year are yet to be determined, and therefore may impact future financial years.
Mr Edward Guy Bank, CFO*
-
290,901
67,347
-
358,248
21,173
4,695
384,116
4.3.4 Directors’ and Executives Interests
211,696
1,865,194
404,082
90,556
2,571,528
96,780
(34,228)
2,634,080
Movement in Shares
* Excludes total accrued annual leave balance of $186,000 (2020: $161,000).
Notes in relation to the Table of Directors’ and Executive Officers’ Remuneration - Audited
(A) Short-term Incentive Cash Bonus:
The short-term incentive bonus is for performance during the respective financial years using the criteria set out on Page 41.
Details of the Group’s policy in relation to the remuneration that is performance related is discussed on Page 41.
On 31st August 2015, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive Shares
under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $290,000 which was repaid in August
2020. The related benefit is disclosed in table 4.3.2 on page 42.
On 25th August 2016, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive Shares
under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $207,500 which was repaid in August
2021. The related benefit is disclosed in table 4.3.2 on page 42.
On 13th September 2017, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive
Shares under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $202,500 which is repayable by
13th September 2022. The related benefit is disclosed in table 4.3.2 on page 42.
The movement during the reporting period in the number of ordinary shares in Finbar Group Limited held, directly, indirectly or
beneficially, by each key management person, including their related parties, is as follows:
Held at 1 July 2020
Purchases
Sales
Held at 30 June 2021
Directors
Mr John Chan*
Mr Darren John Pateman
Mr Ronald Chan**
Mr Kee Kong Loh
Mr Terence Siong Woon Peh***
Mr Lee Verios
Executives
Mr Edward Guy Bank
Directors
Mr John Chan*
Mr Darren John Pateman
Mr Ronald Chan**
Mr Kee Kong Loh
Mr Terence Siong Woon Peh***
Mr Lee Verios
Executives
Mr Edward Guy Bank
27,031,551
3,609,493
15,481,061
2,000,904
55,837,175
72,393
286,714
23,000
1,610,037
-
-
-
300,000
-
Held at 1 July 2019
Purchases
Sales
26,617,520
3,609,493
5,074,074
2,000,904
55,837,175
72,393
414,031
-
10,406,987
-
-
-
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,318,265
3,632,493
17,091,098
2,000,904
55,837,175
72,393
300,000
Held at 30 June 2020
27,031,551
3,609,493
15,481,061
2,000,904
55,837,175
72,393
300,000
* John Chan has interests in Forward International Pty Ltd which holds shares in Finbar Group Limited.
** Ronald Chan has interests in Forward International Pty Ltd and Blair Park Pty Ltd (from 2020 financial year) which hold shares in
Finbar Group Limited.
*** Terence Peh is a Director and shareholder of Chuan Hup Holdings Limited which holds shares in Finbar Group Limited.
No options for shares were granted to key management personnel as remuneration during the reporting period.
43
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DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2021DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
4. Corporate Governance Statement (continued)
4.3 Remuneration Report - Audited (continued)
4.3.5 Equity Instruments
4. Corporate Governance Statement (continued)
4.5 Risk Management (continued)
Financial Reporting (continued)
All options refer to options over ordinary shares of Finbar Group Limited issued under the Employee Incentive Plan 2013 or Director
Share Plan 2014. As at 30 June 2021, there were no options on issue.
A review is undertaken at each half year end of all related party transactions.
4.4 Audit Committee
Environmental Regulation
The Audit Committee Charter sets out the Audit Committee’s role, powers and duties, and establishes the functions delegated to the
Audit Committee by the Board. The Audit Committee advises on the establishment and maintenance of a framework of internal control
and appropriate ethical standards for the management of the Group.
A copy of the Audit Committee Charter is available on Finbar’s website www.finbar.com.au.
The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation.
Compliance with the requirements of environmental regulations and with specific requirements of site environmental licences was
substantially achieved across all operations with no instances of non-compliance in relation to licence requirements noted.
The Board is not aware of any significant breaches of environmental regulations during the period covered by this report.
The following directors serve on the Audit Committee:
- Lee VERIOS (Chairman) - Non-executive Independent Director
- Kee Kong LOH - Non-executive Director
- Terence Siong Woon PEH - Non-executive Director
4.5 Risk Management
Oversight of the Risk Management Procedures
The Board has elected not to establish a separate Risk Committee to oversee risk management and instead the overall responsibility
of risk management resides with the Board in its entirety. In this regard, risk management considerations form part of the Board’s
discussions at scheduled meetings.
The Board oversees the establishment, implementation, and annual review of the Group’s risk management procedures. Management
has established and implemented informal risk management procedures for assessing, monitoring and managing all risks including
operational, financial reporting and compliance risks for the Group. The Managing Director and Chief Financial Officer provide
assurance, in writing to the Board, that the financial risk management and associated compliance and controls have been assessed
and found to be operating effectively.
Risk Management and Compliance Control
Comprehensive practices have been established to ensure:
- capital expenditure with respect to land acquisitions or development agreements obtain prior Board approval;
- financial exposures are controlled, including use of derivatives. Further details of the Group’s policies relating to interest rates
management and credit risk are included in Notes 5 and 24 in the Notes to the Consolidated Financial Statements;
- management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations;
- business transactions are properly authorised and executed;
- the quality and integrity of personnel (see below);
- financial reporting accuracy and compliance with the financial reporting regulatory framework (see below); and
- environmental regulation compliance (see page 46.).
Quality and Integrity of Personnel
Training and development and appropriate remuneration and incentives with regular performance reviews create an environment of
cooperation and constructive dialogue with employees and senior management.
Financial Reporting
The Managing Director and the Chief Financial Officer have provided assurance, in writing to the Board that the Group’s financial
reports are founded on a sound system of risk management and internal compliance and control which implements the policies
adopted by the Board.
There is a comprehensive accounting system. Monthly actual results are reported against budgets approved by the Directors and
revised forecasts for the year are prepared regularly. Procedures are in place to ensure price sensitive information is reported to the
Australian Securities Exchange (ASX) in accordance with Continuous Disclosure Requirements.
4.6 Ethical Standards
All Directors, Managers and Employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the
reputation and performance of the Group.
Conflict of Interest
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Group.
Where the Board believes that a significant conflict exists for a Director on a Board matter, the Director concerned does not receive the
relevant Board papers and is not present at the meeting whilst the item is considered. Details of Director related entity transactions
with the Company and the Group are set out in Note 28 in the Notes to the Consolidated Financial Statements.
Code of Conduct
All Directors, Managers and Employees are expected to maintain high ethical standards including the following:
- aligning the behaviour of the Board and Management with the code of conduct by maintaining appropriate core Group values
and objectives;
- fulfilling responsibilities to shareholders by delivering shareholder value;
- usefulness of financial information by maintaining appropriate accounting policies, practices and disclosure;
- fulfilling responsibilities to clients, customers and consumers by maintaining high standards of product quality, service
standards, commitments to fair value, and safety of goods produced;
- employment practices such as occupational health and safety, employment opportunity, training and education support,
community activities, sponsorships and donations;
- responsibilities to the individual, such as privacy, use of privileged or confidential information, and conflict resolution;
- managing actual or potential conflicts of interest;
- corporate opportunities such as preventing Directors and key executives from taking advantage of property, information or
position for personal gain;
- confidentiality of corporate information;
- fair dealing;
- protection and proper use of the Group’s assets;
- compliance with laws; and
- reporting unlawful or of unethical behaviour including protection of those who report violations in good faith.
45
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DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2021DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
4. Corporate Governance Statement (continued)
4.6 Ethical Standards (continued)
Trading in General Company Securities by Directors and Employees
The key elements of the Trading in Company Securities by Directors and Employees policy are:
• identification of those restricted from trading - Directors and Senior Executives may acquire shares in the Company, but are
prohibited from dealing in Company
• shares or exercising options:
- within two trading days after either the release of the Company’s half-year and annual results to the Australian Securities
Exchange (‘ASX’), the Annual General Meeting or any major announcement;
- whilst in possession of price sensitive information not yet released to the market;
• raising the awareness of legal prohibitions including transactions with colleagues and external advisers;
• raising awareness that the Company prohibits those restricted from trading in Company shares as described above from entering
into transactions such as margin loans that could trigger a trade during a prohibited period; and
• requiring details to be provided of the trading activities of the Directors of the Company.
4.7 Communication with Shareholders
6. Operating and Financial Review
Operating Results
Total comprehensive income attributable to Owners of the Group
2021
2020
$8,863,000
$7,068,000
Total comprehensive income attributable to
Owners of the Group
Basic EPS
Diluted EPS
Dividends paid
Dividends paid per share
Market price per share
Change in share price
Return on capital employed attributable to
Owners of the Group
Return on total equity attributable to
Owners of the Group
2021
2020
2019
2018
2017
$8,863,000
$7,068,000
$11,372,000
$13,760,000
$5,062,000
$0.03
$0.03
$0.02
$0.02
$0.04
$0.04
$0.06
$0.06
$0.02
$0.02
$8,163,000
$13,606,000
$16,302,000
$13,874,000
$16,219,000
$0.03
$0.85
$0.15
3.82%
3.65%
$0.05
$0.70
-$0.14
4.47%
$0.06
$0.84
-$0.10
5.58%
2.92%
4.58%
$0.06
$0.94
$0.14
6.24%
5.46%
$0.07
$0.80
-$0.03
4.76%
2.34%
The Board is committed to ensuring that the Company complies with its continuous disclosure obligations and to facilitate this, has
approved a Continuous Disclosure Policy that applies to all Group personnel, including the Directors and Senior Executives. The Board
seeks to promote investor confidence by seeking to ensure that trading in the Company’s shares take place in an informed market.
Finbar provides information about itself, its activities and operations, and its governance via its website www.finbar.com.au.
Dividends for 2021 were fully franked and it is expected that dividends in future years will continue to be fully franked.
Key transactions that contributed to the consolidated net profit of the Company for the 2021 financial year were the completion of
Riverena, sales and settlements of completed stock held at 30 June 2020 as well as the ongoing rental of the Company’s commercial
properties. See below for further information on the Company’s project completions.
A copy of the Group’s Market Disclosure Policy is available on Finbar’s website www.finbar.com.au.
Review of Operations
4.8 Diversity
The Board has considered the recommendation to formulate strict measurable targets for the purposes of the assessment of gender
diversity within the organisation. Given the small size and relatively stable nature of its workforce it has formed the view that at this
time it would not be appropriate or practical to establish a written policy regarding gender diversity. The Board will review this position
at least annually. However, generally, when selecting new employees or advancing existing employees, no consideration is given to
gender, age or ethnicity, but instead selections are based upon individual achievements, skill and expertise.
Gender representation
Board
Key Management
Personnel
Senior Management
Group
5. Principal Activities
2021
Female
-
-
50%
55%
Male
100%
100%
50%
45%
2020
Female
-
-
50%
53%
Male
100%
100%
50%
47%
The principal activities of the Group during the course of the financial year continued to be property development and investment.
The Group’s focus is the development of medium to high-density residential buildings and commercial developments in Western
Australia by way of direct ownership, ownership through fully owned Subsidiaries or by equity accounted investees (through companies
registered specifically to conduct the development).
The Group holds rental property through 175 Adelaide Terrace Pty Ltd, Finbar Karratha Pty Ltd and Finbar Commercial Pty Ltd.
There were no significant changes in the nature of the activities of the Group during the financial year.
Finbar Group Limited’s (‘Finbar’ or ‘the Company’) core business lies in the development of medium to high density residential
apartments and commercial property within the state of Western Australia. Finbar carries out its development projects in its own right
or through incorporated special purpose entities and equity accounted investees, of which the Company either directly or indirectly
holds interests in project profitability ranging between 50% and 100%.
The Company operates predominantly within the Perth CBD and surrounding areas.
Finbar’s business model involves the acquisition of suitable development land either directly or by way of an incorporated Special
Purpose Vehicle or by development agreements with Land Owners. Equity partners are sought to allow the Company to leverage into
larger development projects to take advantage of the benefits of economies of scale, and to help spread project risk.
Finbar outsources its design and construction activities to external parties.
The administration of the companies along with the operating, investment, and acquisitions decisions are made by Finbar’s Board and
Management. The Company employs 27 staff in its corporate offices in East Perth, Western Australia and 1 member of staff in its office
in the Pilbara.
This outsourcing model ensures that the Company is and remains scalable, efficient and agile in a market where acquisition and
project timing is critical in maintaining a competitive advantage, helping to protect margins and enhancing the returns Finbar can
generate for its shareholders.
There have been no significant changes in the Company’s operating model that occurred during the relevant reporting period and the
Company continued to develop and invest in built-form projects within Western Australia throughout the year as its core business.
There is less demand for investment property, however, a low interest rate environment coupled with weakened housing prices is
helping drive owner occupier activity for company product.
Factors that may affect the Company’s profit are generally restricted to items that would be considered to reside outside of the control
of the Board and Management and are, in general, movements in interest rates, government rebates and incentives, changes in
taxation and superannuation laws, banking lending policies and their regulatory changes, global economic factors, resources sector
activity, and employment rates.
The outbreak of COVID-19 globally and in Australia in 2020 remains as a significant risk event. The full impact on the Australian
economy, travel restrictions and period of recovery is yet to be known. While the measures implemented by the Federal and State
Governments were effective in reducing the impact of the virus, there may be ongoing outbreaks of COVID-19 which will require further
government response.
47
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DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2021DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
6. Operating and Financial Review (continued)
The Company’s Management has remained diligent in ensuring it maintains a strong balance sheet to protect and improve the
Company’s market position through this crisis. The construction commencement of Civic Heart in South Perth and AT238 in East
Perth as well as the imminent completion of the project at Daniella positions the Company to benefit from the opportunities that may
arise from decreased competition and general industry stress. The ability to source new viable development opportunities is central to
Finbar’s ongoing success and the Board and Management has demonstrated a long track record of this ability.
The Board and Management control the Company’s key risks through the implementation of control measures which include; land
acquisitions generally secured without the use of debt funding, development funding which is carried out utilising senior bank funding
from major Australian banks, and the Company’s small and agile structure which can rapidly adapt to changes in market conditions.
There were no significant changes in the composition of overall assets and liabilities, with movements in assets from non-current to
current and movements in liabilities from non-current to current as projects reach completion. The Company continued to focus on
the generation of sales and rental revenue through property development and investment.
The Board and Management do not currently have the view that there is a requirement to reposition the Company’s overall business
model. The Board and Management continuously monitor market fluctuations and conditions and implement appropriate strategies to
benefit from and insulate the Company against changing market conditions.
Completed Projects
Motive - 172 Railway Parade, West Leederville: 16 units have settled in the reporting period. The 143 unit development is now fully sold
and settled.
Concerto - 193 Adelaide Terrace, East Perth: 11 units settled in the reporting period. The 227 unit development is now fully sold and
settled.
Aire West Perth - 647-659 Murray Street, West Perth: 2 units have settled in the reporting period. The 244 unit development is now fully
sold.
Reva - 5 Harper Terrace, South Perth: 3 units have settled in the reporting period. 9 commercial units remain for sale in the 59 unit
development.
Vue Tower - 63 Adelaide Terrace, East Perth: 12 units have settled in the reporting period. 4 units remain for sale in the 250 unit
development.
Palmyra East Apartments - 43 McGregor Road, Palmyra: 51 units have settled in the reporting period. The 128 unit development is now
fully sold.
Sabina - 908 Canning Highway, Applecross: 53 units have settled in the reporting period. 9 residential units and 3 commercials units
remain for sale in the development of 164 residential apartments and 3 commercial units.
One Kennedy - 241 Railway Parade, Maylands: 33 units have settled in the reporting period. 18 units remain for sale in the
development of 120 residential apartments and 3 commercial units.
Riverena - Lot 1001-1003 Rowe Avenue, Rivervale: 91 units have settled in the reporting period. 16 units remain for sale in the
development of 125 residential apartments.
Currently Under Construction
Dianella Apartments - 36 Chester Avenue, Dianella: Construction works continues to progress well, with completion expected in
September 2021. To date 65 sales have been achieved in the development of 128 residential apartments.
Civic Heart - 1 Mends Street, South Perth: Construction works continues to progress well, with completion expected during financial
year ending 30 June 2024. To date 110 sales have been achieved in the development of 309 residential apartments and 26 commercial
units.
AT238 - 240 Adelaide Terrace, Perth: Construction works commenced in March 2021. To date 29 residential sales and 1 commercial
sale have been achieved in the development of 119 residential apartments and 2 commercial units.
6. Operating and Financial Review (continued)
Future Projects
Aurora Applecross - 3 Kintail Road, Applecross (Stage 2): Marketing of the Aurora project continues to progress, with construction
expected to commence in the financial year ending 30 June 2022. To date 30 residential sales have been achieved in the development
of 118 residential apartments and 3 commercial units.
The Point - 31 Rowe Avenue, Rivervale: Marketing of The Point is currently underway and construction is anticipated to commence in
financial year ending 30 June 2022. To date 2 residential sales and 1 commercial sale have been achieved in the development of 167
residential units and 9 commercial units.
912 Canning Highway, Applecross (Stage 3): Development Approval has been received for 148 residential apartments and 3 commercial
units.
Palmyra West Apartments - 43 McGregor Road, Palmyra (Stage 2): Development Approval has been received for 130 residential
apartments.
239 Great Eastern Highway, Belmont: Development Approval has been received for a development of 194 residential apartments and 2
commercial units. The development is currently in redesign to a new low rise scheme.
Springs Commercial - 2 Hawksburn Road, Rivervale: The company has not secured a lease to date which would underpin the viability
of the development of a commercial building on this land. The company will continue to seek a leasing pre-commitment.
2 Homelea Court, Rivervale: Finbar through a wholly owned subsidiary holds an additional four abutting parcels of land in the Springs
precinct in Rivervale for a combined value of $5.15m. The four vacant sites are located on the corners of Rowe Avenue and Homelea
Court and comprise a total of 3,770 square metres of land which Finbar intends to amalgamate to develop a project consisting of
approximately 185 apartments within a 10 level building.
Lot 1000 - 32 Riversdale Road, Rivervale: Development options are currently being explored.
187 Adelaide Terrace, East Perth: Development options are currently being explored.
Lot 101 Hay Street, East Perth: A development application has been lodged comprising 332 residential units and 13 commercial units.
Investment Property
Fairlanes - 175 Adelaide Terrace, East Perth: The Fairlanes property has been revalued during the reporting period. The valuation
resulted in $131,502 increase to the value of the property. The company continues to benefit from the investment income generated
from the leased property. The property is currently 93% leased. The company continues to actively market the remaining tenancies for
rental.
Pelago Commercial - 23 & 26 Sharpe Avenue, Karratha: The Pelago commercial property has been revalued during the reporting
period. The valuation resulted in a $467,800 increase in value of the property. The company continues to benefit from the investment
income generated from the leased property. The property is currently 61% leased. The company continues to actively market the
remaining tenancies for rental.
Pelago Residential - 23 & 26 Sharpe Avenue, Karratha: The Pelago residential property has been revalued during the reporting period.
The valuation resulted in a $1,010,000 increase to the value of the property. The company continues to benefit from the investment
income generated from the leased property. The property is currently 99% leased. The company continues to actively market
tenancies for rental as they become available.
Vue Tower Commercial - 63 Adelaide Terrace, East Perth: Lot 4 at Vue Tower - Finbar Commercial Pty Ltd continues to be leased to a
non-profit organisation at $1 per annum until 13 June 2029.
Aurelia Commercial - 96 Mill Point Road, South Perth: Lots 132-138 at Aurelia were revalued during the period. The valuation resulted
in $75,000 decrease to the value of the property. The company is actively marketing the tenancies for rental.
Significant Changes in State of Affairs
Other than set out in this report, in the opinion of the Directors there were no significant changes in the state of affairs of the Group
that occurred during the financial year under review.
49
5 0
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2021DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report 7. Dividends
10. Directors’ Interests
Dividends paid or declared by the Company to members since the end of the previous financial year were:
Dividends Paid During the Year 2021
Final 2020 ordinary
Interim 2021 ordinary
Total Dividends Paid
Cents per
Share
1.00
2.00
8,163
Total
Amount
$’000
Franked /
Unfranked
Date of Payment
2,721
Franked
21 September 2020
5,442
Franked
19 March 2021
Mr Darren John Pateman
Director
Mr John Chan
Franked dividends declared or paid during the year were franked at the rate of 30%.
Proposed Dividend
After the balance date the following dividend has been proposed by the Directors. The dividend has not been provided for and there
are no income tax consequences.
Mr Ronald Chan
Mr Kee Kong Loh
Mr Terence Siong Woon Peh
Mr Lee Verios
11. Indemnification and Insurance of Officers and Auditors
The relevant interest of each Director in the shares and options over such instruments by the companies within the Group, as notified
by the Directors to the Australian Stock Exchange Limited in accordance with S205G(1) of the Corporations Act 2001, as at the date of
this report is as follows:
Ordinary Shares
27,318,265
3,632,493
17,091,098
2,000,904
55,837,175
72,393
Final 2021 ordinary
Total Dividend Proposed
2.00
5,442
Franked
10 September 2021
Indemnification
5,442
The Company has agreed to indemnify the current Directors of the Company, its Subsidiaries and Equity Accounted Investees, against
all liabilities to another person (other than the Company or related body corporate) that may arise from their position as Directors of
the Company, its Subsidiaries and Equity Accounted Investees, except where the liability arises out of the conduct involving a lack of
good faith.
The financial effect of this dividend has not been brought to account in the financial statements for the year ended 30 June 2021 and
will be recognised in subsequent financial reports.
Insurance Premiums
During the financial year the Company has paid insurance premiums of $55,000 (2020: $38,000) in respect of Directors and Officers
liability and legal expenses insurance contracts for Directors and Officers, including Executive Officers of the Company. The insurance
premiums relate to:
- Costs and expenses incurred by the relevant Officers in defending proceedings, whether civil or criminal and whatever their
outcome; and
- Other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use
of information or position to gain a personal advantage.
Dealt with in the financial report as - Dividends
Dividend Reinvestment Plan
Note
19
$’000
8,163
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the
2021 financial year until further notice. As such the DRP will not be active for the above mentioned dividend.
8. Events Subsequent to Reporting Date
With continuing economic uncertainty from the COVID-19 pandemic, the Company may require to grant further rent abatements and/
or rent deferrals in accordance to the relevant Code of Conduct legislation. Further mandatory closures and government mandated
restrictions will influence the Australian economy and property market which may have a future impact on property valuations.
Other than mentioned, there has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
9. Likely Developments
The Group will continue to pursue its policy of increasing the profitability and market share of its major business sectors during the
next financial year.
The Group will continue planned development projects on existing land and will continue to assess new development opportunities for
the acquisition of land for future development.
Further information about likely developments in the operations of the Group and the expected results of these operations in future
years have not been included in this report as the disclosure of such information would, in the opinion of the Directors, be likely to
result in unreasonable prejudice to the Group.
51
5 2
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 2021DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the Year Ended 30 June 2021
12. Non-audit Services
During the year KPMG, the Group’s auditor, has performed certain other services in addition to their statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and is satisfied that the provision of those
non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
- all non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed to
ensure they do not impact the integrity and objectivity of the auditor; and
- the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and
rewards.
Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit services provided
during the year are set out below:
Consolidated
2021
$
2020
$
Audit Services:
Auditors of the Company
Audit and review of the financial reports
Services Other Than Statutory Audit:
Taxation compliance services
129,115
129,115
16,560
16,560
126,697
126,697
20,286
20,286
Finance income
Finance costs
Net Finance Income
Revenue
Cost of sales
Gross Profit
Other income
Administrative expenses
Advertising expenses
Revaluation increase of investment property
Revaluation increase of property, plant and equipment
Rental expenses
Gain on disposal of investment properties
Results from Operating Activities
13. Lead Auditor’s Independence Declaration
The Lead Auditor’s Independence Declaration is set out on Page 100 and forms part of the Directors’ Report for the financial year
ended 30 June 2021.
Signed in accordance with a resolution of the Board of Directors:
Darren Pateman
Managing Director
Dated at Perth this Twenty-fourth day of August 2021.
Share of profit/(loss) of Equity Accounted Investees (net of income tax)
Profit before Income Tax
Income tax expense
Profit for the year
Other comprehensive income
Items which will not be reclassified to profit or loss:
Revaluation increase of property, plant and equipment
Tax on items that will not be reclassified to profit or loss
Other comprehensive income for the year, net of income tax
Total comprehensive income for the year
Earnings per Share:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Note
Consolidated
2021
$’000
2020
$’000
7
8
10
10
14
11
11
20
20
101,965
154,307
(81,664)
(132,076)
20,301
22,231
1,429
(7,796)
(1,054)
1,534
196
278
(7,159)
(7,779)
6,203
627
(4,439)
(4,525)
129
-
10,300
9,876
858
(52)
806
937
12,043
(3,196)
8,847
23
(7)
16
8,863
970
(332)
638
(26)
10,488
(3,864)
6,624
635
(191)
444
7,068
3.25
3.25
2.43
2.43
53
5 4
The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements
set out on Pages 58 to 93.
DIRECTORS’ REPORT (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the Year Ended 30 June 2021
Balance as at 1 July 2019
Total comprehensive income for the year
Profit
Other comprehensive income
Transactions with owners, recognised directly in equity
Note
Share
Capital
$’000
Retained
Earnings
$’000
Asset
Revaluation
Reserve
$’000
Total Equity
$’000
194,484
53,995
-
-
6,624
-
-
-
444
248,479
6,624
444
Dividends to shareholders
19
-
(13,606)
-
(13,606)
Balance as at 30 June 2020
194,484
47,013
444
241,941
Balance as at 1 July 2020
Total comprehensive income for the year
Profit
Other comprehensive income
Transactions with owners, recognised directly in equity
194,484
47,013
444
241,941
-
-
8,847
-
-
16
8,847
16
Dividends to shareholders
19
-
(8,163)
-
(8,163)
Balance as at 30 June 2021
194,484
47,697
460
242,641
Amounts are stated net of tax
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Investments in Equity Accounted Investees
Other assets
Total Current Assets
Non Current Assets
Trade and other receivables
Inventories
Investment property
Prepayments
Investments in Equity Accounted Investees
Property, plant and equipment
Deferred tax assets
Other assets
Total Non Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Loans and borrowings
Current tax payable
Employee benefits
Total Current Liabilities
Non Current Liabilities
Trade and other payables
Loans and borrowings
Deferred tax liabilities
Employee benefits
Total Non Current Liabilities
Total Liabilities
Net Assets
EQUITY
Share capital
Retained earnings
Reserves
Total Equity
Consolidated
Note
2021
$’000
2020
$’000
18a
17
16
14
17
16
12
14
13
15
23
21
15
22
23
21
15
22
19
19
52,599
8,085
57,736
139
65
30,591
10,341
58,803
746
55
118,624
100,536
26,024
82,105
97,925
434
2,235
9,218
6,719
154
26,911
95,798
97,331
-
1,368
9,396
6,313
149
224,814
237,266
343,438
337,802
22,240
2,228
1,454
567
24,284
55,504
1,116
490
26,489
81,394
37
69,254
4,957
60
1,766
8,478
4,179
44
74,308
14,467
100,797
95,861
242,641
241,941
194,484
194,484
47,697
47,013
460
444
242,641
241,941
The Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements set out on Pages 58 to 93.
The Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements set out on Pages 58 to 93.
55
5 6
2021 Finbar Group Annual Report2021 Finbar Group Annual Report Cash Flows from Operating Activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from Operating Activities
Interest paid
Income tax paid
Net Cash generated from Operating Activities
Cash Flows from Investing Activities
Proceeds from sales of investment properties
Interest received
Dividends received from Equity Accounted Investees
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Acquisition of investment property
Loans to Equity Accounted Investees
Proceeds from loans to Equity Accounted Investees
Net Cash provided by/(used in) Investing Activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net Cash used in Financing Activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and Cash Equivalents at 30 June
Consolidated
Note
2021
$’000
2020
$’000
169,139
265,611
(150,909)
(235,864)
18,230
29,747
(71)
(2,492)
15,667
(1,231)
(4,643)
23,873
725
1,762
676
(70)
-
-
-
200
2,401
(91)
325
(4,142)
(7,985)
(10,515)
12,595
7,703
2,779
(9,043)
40,193
64,264
(33,392)
(8,163)
(1,362)
(80,387)
(13,606)
(29,729)
22,008
30,591
52,599
(14,899)
45,490
30,591
18b
13
13
21
21
19
18a
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended 30 June 2021
Index to Notes to the Financial Statements
Note
Page
Note
Page
1. Reporting Entity
2. Basis of Preparation
3. Significant Accounting Policies
4. Determination of Fair Values
5. Financial Risk Management
6. Operating Segments
7. Revenue
8. Other Income
9. Personnel Expenses
10. Finance Income and Finance Costs
11. Income Tax Expense
12. Investment Property
13. Property, Plant and Equipment
60
60
61
67
68
70
73
73
73
73
74
75
76
17. Trade and Other Receivables
18. Cash and Cash Equivalents
19. Capital and Reserves
20. Earnings per Share
21. Loans and Borrowings
22. Employee Benefits
23. Trade and Other Payables
24. Financial Instruments
25. Operating Leases
81
81
82
84
85
86
86
87
89
26. Capital and Other Commitments 89
27. Contingencies
28. Related Parties
29. Group Entities
90
90
92
93
93
93
14. Investments in Equity Accounted Investees 78
30. Subsequent Events
15. Tax Assets and Liabilities
16. Inventories
80
81
31. Auditor’s Remuneration
32. Parent Entity Disclosures
The Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements set out on Pages 58 to 93.
57
5 8
CONSOLIDATED STATEMENT OF CASH FLOWSFor the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report Index to Significant Accounting Policies (Note 3)
1.Reporting Entity
Note
(a) Basis of Consolidation
(b) Financial Instruments
(c) Property, Plant and Equipment
(d) Investment Property
(e) Inventories
(f)
Impairment
(g) Employee Benefits
(h) Provisions
(i) Revenue
(j) Finance Income and Finance Costs
(k) Income Tax
(l) Goods and Services Tax
(m) Earnings per Share
(n) Segment Reporting
(o) New Standards and Interpretations
Page
61
62
62
63
64
64
65
65
65
66
66
67
67
67
67
Finbar Group Limited (‘the Company’) is a public company domiciled in Australia. The address of the Company’s registered office is
Level 6, 181 Adelaide Terrace, East Perth, WA 6004. The consolidated financial statements of the Group as at and for the year ended
30 June 2021 comprise the Company, its Subsidiaries (together referred to as ‘the Group’ and individually as ‘Group entities’) and
the Group’s interest in equity accounted investees. The Group is a for-profit entity and is primarily involved in residential property
development and property investment (see Note 6).
2. Basis of Preparation
(a) Statement of Compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act
2001. These consolidated financial statements of the Group comply with International Financial Reporting Standards (IFRSs) and
interpretations adopted by the International Accounting Standards Board (IASB).
The consolidated financial statements were approved by the Board of Directors on 24th August 2021.
(b) Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
• financial instruments recognised through profit or loss are measured at fair value; and
• investment property is measured at fair value.
The methods used to measure fair values are discussed further in Note 4.
(c) Functional and Presentation Currency
These consolidated financial statements are presented in Australian dollars which is the functional currency for the Group. In
accordance with ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191, amounts in the consolidated
financial statements and directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated.
(d) Use of Estimates and Judgements
The preparation of consolidated financial statements in conformity with AASBs requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
(i) Assumptions and estimation uncertainties
Information about assumptions made in measuring fair values and estimation uncertainties that have a significant risk of resulting in a
material adjustment within the year ending 30 June 2021 are included in the following notes:
• Note 12 - Valuation of investment property;
• Note 13 - Property, plant & equipment; and
• Note 24 - Valuation of financial instruments.
(ii) Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-
financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes the CFO who has
overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values.
Valuations are reported to the Audit Committee at each reporting date.
59
6 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
2. Basis of Preparation (continued)
(d) Use of Estimates and Judgements (continued)
(ii) Measurement of fair values (continued)
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that
is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
occurred.
(e) Changes in Accounting Policies
The Group’s accounting policies are consistent with those disclosed in the financial statements for the year ended 30 June 2020.
3. Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, and have been applied consistently by Group entities.
(a) Basis of Consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to or has rights to variable returns
from its investment with the entity and has the ability to affect those returns through its power over the entity. The financial statements
of Subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
(ii) Equity Accounted Investees
Equity accounted investees are those entities over whose activities the Group has joint control, established by contractual agreement
and requiring unanimous consent for strategic and operating decisions. Investments in equity accounted investees are accounted
for using the equity method (Equity Accounted Investees) and are initially recognised at cost. The consolidated financial statements
include the Group’s share of the income and expenses and equity movements of Equity Accounted Investees, after adjustments to align
the accounting policies with those of the Group, from the date that the joint control commences until the date the joint control ceases.
When the Group’s share of losses exceeds its interest in an Equity Accounted Investee, the carrying amount of that interest is reduced
to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments
on behalf of the Equity Accounted Investee. Investments in equity accounted investees are carried at the lower of the equity accounted
amount and the recoverable amount. Investments in equity accounted investees are treated as current assets where it is expected that
the investment will be realised within a twelve month time frame.
(iii) Joint Operations
A joint operation is carried on by each venturer using its own assets in pursuit of the joint operations. The consolidated financial
statements include the assets that the Group controls and the liabilities that it incurs in the course of pursuing the joint operation, and
the expenses that the Group incurs and its share of the income that it earns from the joint operation.
(iv) Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with Equity
Accounted Investees are eliminated against the investment to the extent of the Group’s interest in the Equity Accounted Investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Gains and losses are recognised as the contributed assets are consumed or sold by the Equity Accounted Investee or, if not consumed
or sold by the Equity Accounted Investee, when the Group’s interest in such entities is disposed.
3. Significant Accounting Policies (continued)
(b) Financial Instruments
(i) Non-derivative Financial Instruments
Non-derivative financial assets
Trade and other receivables and debt securities issued are initially recognised when they are originated. All other financial assets
(including assets designated at fair value through profit or loss – FVTPL) are initially recognised when the Group becomes a party to
the contractual provisions of the instrument.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers
the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset. Any interest in transferred financial assets that is created or retained by
the Group is recognised as a separate asset or liability.
Accounting for finance income and expense is discussed in Note 3(j).
Non-derivative financial liabilities
Trade and other payables, commercial bills and subordinated liabilities are initially recognised when they are originated at fair value
plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised
cost using the effective interest rate method. All other financial liabilities (including liabilities designated at fair value through profit or
loss) are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the
Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
(ii) Share Capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effects.
Repurchase of share capital
When share capital recognised in equity is repurchased, the amount of the consideration paid, which includes directly attributable
costs, net of any tax effects, is recognised as a deduction from equity.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(c) Property, Plant and Equipment
(i) Recognition and Measurement
Items of plant and equipment are measured at cost or deemed cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets include the
cost of materials, direct labour, any other costs directly attributable to bringing the asset to a working order for its intended use, the
costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs (see
below).
Items classified as property are measured at fair value. Refer Note 3(c)(iv).
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
61
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
3. Significant Accounting Policies (continued)
(c) Property, Plant and Equipment (continued)
(i) Recognition and Measurement (continued)
Gains on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the
carrying amount of property, plant & equipment and are recognised net within “Other income” in profit or loss.
Losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the
carrying amount of property, plant & equipment and are recognised net within “Administrative expenses” in profit or loss.
When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings.
In respect to borrowing costs relating to qualifying assets, the Group capitalises costs directly attributable to the acquisition,
construction or production of a qualifying asset as part of the cost of the asset.
(ii) Reclassification to Investment Property
Property that is being constructed for future use as investment property is accounted for as property, plant and equipment until
construction or development is complete, at which time it is remeasured to fair value and reclassified as investment property. Any gain
or loss arising on remeasurement is recognised in profit or loss.
When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and
reclassified as investment property. Any loss is recognised in the revaluation reserve to the extent that an amount is included in
revaluation reserve for that property, with any remaining loss recognised immediately in profit or loss. Any gain arising on revaluation
is recognised in profit or loss to the extent the gain reverses a previous impairment loss on the property, with any remaining gain
recognised in a revaluation reserve in equity.
(iii) Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable
that the future economic benefits embodied within the part will flow to the Group and its cost can be reliably measured. The carrying
amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in
profit or loss as incurred.
(iv) Revaluation Model for Property
After recognition as an asset, the Group has elected to carry an item of property whose fair value can be reliably measured shall be
carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated impairment losses.
Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be
determined using fair value at the end of the reporting period.
If an item of property is revalued, the entire class of property to which that asset belongs shall be revalued. Any gain or loss arising on
remeasurement is recognised in other comprehensive income and asset revaluation reserve. Refer Note 4.
(v) Depreciation and Amortisation
Depreciation and amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an
item of property, plant and equipment. Assets are depreciated or amortised from the date of acquisition. Land is not depreciated.
The estimated useful lives in the current and comparative periods are as follows:
• Office property
• Office furniture and equipment, fixtures and fittings
• Plant and equipment
40 years
5 - 25 years
1 - 10 years
Depreciation and amortisation rates and methods are reviewed at each reporting date. When changes are made, adjustments are
reflected prospectively in the current and future periods only.
(d) Investment Property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary
course of business, used in the production or supply of goods and services or for administrative purposes. Investment property is
measured at fair value (see Note 4) with any change therein recognised in profit or loss.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The self-constructed investment
property transferred from inventory are recognised at fair value.
When the use of a property changes such that it is reclassified as property, plant or equipment, its fair value at the date of
reclassification becomes its cost for subsequent accounting.
3. Significant Accounting Policies (continued)
(e) Inventories
Inventories and work in progress, including land held for resale, are stated at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
Cost includes the cost of acquisition, development costs, holding costs and directly attributable interest on borrowed funds where the
development is a qualifying asset. Capitalisation of borrowing costs is ceased during extended periods in which active development is
interrupted. When a development is completed and ceases to be a qualifying asset, borrowing costs and other costs are expensed as
incurred.
Current and Non-current Inventory Assets
Inventory is classified as current when it satisfies any of the following criteria:
• it is expected to be realised in, or is intended for sale or consumption in, the entity’s normal operating cycle;
• it is held primarily for the purpose of being traded; or
• it is expected to be realised within twelve months of the reporting date.
All other inventory is treated as non-current.
(f) Impairment
(i) Financial Assets
Under the expected credit losses (ECL) model in accordance with AASB 9 Financial Instrument, the Group calculates the allowance for
credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future
periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these probability-
weighted outcomes.
At each reporting period, the Group assess whether the credit risk on a financial instrument has increased significantly since initial
recognition, by analysing reasonable and supportable information that is available without undue cost or effort about past events,
current conditions and forecasts of future economic conditions.
Except for purchased or originated credit-impaired financial assets, trade receivables, AASB 15 contract assets and lease receivables,
at each reporting date:
• the Group measures the loss allowance for a financial instrument at an amount equal to the ‘lifetime expected credit losses’ if the
credit risk on that financial instrument has increased significantly since initial recognition; and
• if the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measure the loss
allowance for that financial instrument at an amount equal to ‘12 month expected credit loss’.
The allowance and any changes in the expected credit loss are recognised as impairment gain and losses in profit or loss.
(ii) Non-financial Assets
The carrying amounts of the Group’s non-financial assets other than investment property, inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the
asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.
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. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash flow from
continuing use that are largely independent of the cash flows of other assets or groups of assets (the “cash generating unit”).
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in profit or loss.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
63
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
3. Significant Accounting Policies (continued)
(g) Employee Benefits
(i) Superannuation Contributions
3. Significant Accounting Policies (continued)
(i) Revenue (continued)
(i) Property Sales (continued)
Obligations for contributions to superannuation funds are recognised as an expense in profit or loss.
(ii) Long-term Employee Benefits
The Group’s obligation in respect of long-term service benefits is the amount of future benefit that employees have earned in return for
their service in the current and prior periods plus related on costs; that benefit is discounted to determine its present value, and the
fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit-rated or government bonds
that have maturity dates approximating the terms of the Group’s obligations. The calculation is performed using the projected unit
credit method. Any actuarial gains or losses are recognised in profit or loss in the period in which they arise.
The cost of sales allocated to individual units is based on the estimated overall selling price for the project and is updated at each
reporting date.
(ii) Supervision Fees
Supervision fees represents the management fees charged to the Equity Accounted Investees. Revenue is recognised in profit or
loss in proportion to the stage of project completion which is by reference to an assessment of the costs incurred and the costs to be
incurred. Revenue is measured based on the contracted amount and constrained to the amount that is highly probable.
(iii) Termination Benefits
(iii) Management Fee
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of
withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination
benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are
recognised as an expense if the Group has made an offer encouraging voluntary redundancy, it is probable that the offer will be
accepted, and the number of acceptances can be reliably estimated.
(iv) Short-term Employee Benefits
Short term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be recognised reliably.
(v) Share-based Payment Transactions
At the grant date, fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in
equity, over the period in which the employees become unconditionally entitled to the options. The amount recognised is adjusted to
reflect the actual number of share options that vest, except for those that fail to vest due to market conditions not being met.
(h) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be reliably
estimated, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability.
(i) Revenue
Under AASB 15, Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts
collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.
(i) Property Sales
Revenue from property sales include:
• Sale of residential and commercial property;
• Development costs fees which represent the fees charged to recoup project development costs from the Land Owners; and
• Profit Share fees which represent percentage profit sharing revenue based on net project profit.
Revenue is recognised when control of the assets is transferred and the amount of revenue is measured based on the contracted
amount. The timing of transfer of control vary depending on the individual terms of the contract of sale.
For projects with an external landowner when the Group is engaged as a property developer of the land, the Group is deemed to be
acting as the principal in the transaction and as such, property sales revenue and cost of sale are grossed up by the land cost base.
Management fees represents the management fee charged to the Equity Accounted Investees shareholders. Revenue is recognised
in profit or loss at project completion and is measured based on the contracted amount and constrained to the amount that is highly
probable.
(iv) Rental Income
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease in accordance
with AASB 117. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
(j) Finance Income and Finance Costs
Finance income comprises interest income on funds invested (including available-for-sale financial assets), interest on loans to Equity
Accounted Investees, dividend income, gains on the disposal of available-for-sale assets, changes in the fair value of financial assets at
fair value through profit or loss, and gains on hedging instruments that are recognised in profit or loss. Interest income is recognised
as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the
Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Finance costs comprise interest expense on borrowings, changes in fair value of financial assets at fair value through profit or loss,
impairment losses recognised on financial assets, and losses on hedging instruments that are recognised in profit or loss. Borrowing
costs that are not directly attributable to the acquisition or production of a qualifying asset are recognised in profit or loss using the
effective interest method.
(k) Income Tax
Income tax expense comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent
that it relates to items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and equity accounted investees to the
extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable
temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they
relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Additional income tax expenses that arise from the distribution of dividends are recognised at the same time as the liability to pay the
related dividend is recognised. The Group does not distribute non-cash assets as dividends to its shareholders.
65
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
3. Significant Accounting Policies (continued)
(l) Goods and Services Tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost
of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO
is included as a current asset or liability in the balance sheet.
4. Determination of Fair Values (continued)
(a) Investment Property and Property carried at fair value (continued)
Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or
likely to be in occupation after letting vacant accommodation, the allocation of maintenance and insurance responsibilities between
the Group and the lessee, and the remaining economic life of the property. When rent reviews or lease renewals are pending with
anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices, have been served validly and
within the appropriate time.
Properties that have not been independently valued as at the balance sheet date are carried at fair value by way of directors valuation.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and
financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(b) Trade and Other Receivables
(m) Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options
granted to employees.
(n) Segment Reporting
Determination and Presentation of Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating
segment’s operating results are regularly reviewed by the Chief Operating Decision Maker (CODM) to make decisions about resources
to be allocated to the segment and assess its performance, and for which discrete information is available.
Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Group’s headquarters), head office
expenses, and income tax assets and liabilities.
The fair value of trade and receivables, excluding construction work in progress, is estimated as the present value of future cash flows,
discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
(c) Share-based Payment Transactions
The fair value of employee stock options is measured using the Black-Scholes (or similar) option-pricing model. Measurement inputs
include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic
volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments
(based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based
on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in
determining fair value.
(d) Financial Guarantees
For financial guarantee contracts liabilities, the fair value at initial recognition is determined using a probability weighted discounted
cash flow approach. This method takes into account the probability of default by the guaranteed party over the term of the contract,
the loss given default (being the proportion of the exposure that is not expected to be recovered in the event of default) and exposure at
default (being the maximum loss at the time of default).
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible
assets other than goodwill.
5. Financial Risk Management
(o) New Standards and Interpretations
Overview
A number of new standards are effective for annual periods beginning after 1 July 2021 and earlier application is permitted; however,
the Group has not early adopted the new or amended standards in preparing these consolidated financial statements.
The potential impact of the new standards, amendments to standards and interpretations has been considered and they are not
expected to have a significant impact on the financial statement.
The Group has exposure to the following risks from their use of financial instruments:
• credit risk
• liquidity risk
• market risk
4. Determination of Fair Values
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-
financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following
methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes
specific to that asset or liability.
(a) Investment Property and Property carried at fair value
An external, independent valuation company, having appropriately recognised professional qualifications and recent experience in the
location and category of the property being valued, values the Group’s investment property portfolio and property no less than once
every three years. The fair values are based on market values, being the estimated amount for which a property could be exchanged on
the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the
parties had each acted knowledgeably and willingly.
In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash
flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows is then
applied to the net annual cash flows to arrive at the property valuation.
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for
measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout these
consolidated financial statements.
Risk Management Framework
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board is
responsible for developing and monitoring risk management policies.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers and investment securities.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
5. Financial Risk Management (continued)
Trade and Other Receivables
The nature of the Group’s business means that most sales contracts occur on a pre-sales basis, before significant expenditure has
been incurred on the development. All pre-sale contracts require a deposit at the point of entering into the contract, these funds
being held in trust independently of the Group. Generally, pre-sale contracts are executed on an unconditional basis. Possession of
a development property does not generally pass until such time as the financial settlement of the property has been completed, and
title to a development property does not pass until the financial settlement of the property has been completed. Where possession of
the development property is granted prior to settlement, title to the property remains with the Group until financial settlement of the
property has been completed.
The demographics of the Group’s customer base has little or no influence on credit risk. Approximately 4.80% (2020: 2.31%) of the
Group’s revenue is attributable to multiple sales transactions with single customers.
The Board of Directors has established a credit policy which undertakes an analysis of each sale. Purchase limits are established on
customers, with these purchase limits being reviewed on each property development.
The Group’s trade and other receivables relate mainly to the Group’s loans to Equity Accounted Investees (within which the Group
holds no more than a 50% interest) and Goods and Services Tax refunds due from the Australian Taxation Office. The loans to Equity
Accounted Investees are repaid from proceeds on settlement and bear interest at BBSY plus agreed margin.
The Group has not established an allowance for impairment, as no losses are expected to be incurred in respect of trade and other
receivables.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group uses project by project costing to cost its products and services, which assists it in monitoring cash flow requirements
and optimising its cash return on investments. Typically the Group ensures that it has sufficient cash on demand to meet expected
operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of
extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Market Risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group’s income or
the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, whilst optimising the return.
Interest Rate Risk
The Group continuously reviews its exposure to changes in interest rates and where it is considered prudent will enter into borrowings
on a fixed rate basis.
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The Board of Directors monitors the return on capital, which the Group defines as total comprehensive
income attributable to the group divided by total shareholders’ equity, excluding non-controlling interests. The Board of Directors also
monitors the level of dividends to shareholders.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the
advantages and security afforded by a sound capital position. The Group’s target is to achieve a return on assets of between 6.00% and
8.00%; for the year ended 30 June 2021 the return was 3.51% (2020: 3.39%). In comparison the weighted average interest expense on
interest-bearing borrowings (excluding liabilities with imputed interest) was 0.43% (2020: 1.74%).
5. Financial Risk Management (continued)
Capital Management (continued)
The Group’s debt-to-capital ratio at the end of the financial year was as follows:
Interest-bearing debt
Market Capitalisation as at 30 June
Total Capital
Debt-to-capital ratio at 30 June
Note
2021
$’000
2020
$’000
21
62,135
42,854
231,305
190,486
293,440
233,340
21%
18%
From time to time the Company purchases its own shares on the market; the timing of these purchases depends on market prices and
availability of unallocated company cash resources where not required for core business activity. Shares purchased are cancelled from
issued capital on purchase. The intention of the Board of Directors in undertaking such purchases is to enhance the capital return to
the shareholders of the Company. Buy decisions are made on a specific transaction basis by the Board of Directors.
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the
2021 financial year until further notice. As such the DRP will not be active for the above mentioned dividend.
6. Operating Segments
The Group operates predominantly in the property development sector and has identified 4 reportable segments, as described below,
which are the Group’s three strategic business units, as well as the Corporate office. The strategic business units offer different
products, and are managed separately because they require different technology, marketing strategies and have different types of
customers. For each of the strategic business units, the Chief Operating Decision Maker (CODM) reviews internal management reports
on a regular basis. The following describes the operations in each of the Group’s reportable segments:
• Residential apartment development in Western Australia;
• Commercial office/retail development in Western Australia;
• Rental of property in Western Australia; and
• Corporate costs includes supervision fees, management fees and net assets attributable to the corporate office.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
6. Operating Segments (continued)
6. Operating Segments (continued)
Information about Reportable Segments
For the Year ended 30 June 2021
Residential
Apartment
Development
$’000
Commercial
Office/Retail
Development
$’000
Rental of
Property
$’000
Corporate
$’000
Total
$’000
Reconciliation of Reportable Segment Revenues, Profit or Loss, Assets and Liabilities
Revenues
External Revenues - Company and Subsidiaries
External Revenues - Equity Accounted Investees
External Revenues - Total
90,961
17,618
108,579
2,328
7,871
2,234
103,394
Total revenue for development reportable segments
-
-
-
17,618
Total revenue for rental segments
2,328
7,871
2,234
121,012
Total revenue for other reportable segments
Reportable Segment Profit before Income Tax - Company and
Subsidiaries
Reportable Segment Profit before Income Tax - Equity
Accounted Investees
8,205
(436)
2,967
5,501
16,237
Total revenue for development reportable segments - Equity Accounted Investees
1,366
-
-
(28)
1,338
Total revenue for rental segments - Equity Accounted Investees
Total Reportable Segments Revenue
Consolidated Revenue
Reportable Segment Profit before Income Tax - Total
9,571
(436)
2,967
5,473
17,575
Reportable Segment Assets - Company and Subsidiaries
132,813
16,473
98,868
25,017
273,171
Reportable Segment Assets - Equity Accounted Investees
Reportable Segment Liabilities - Company and Subsidiaries
Reportable Segment Liabilities - Equity Accounted Investees*
Capital Expenditure
22,673
49,449
18,523
-
2,044
-
-
241
43,355
1,341
53
-
-
-
1
27
24,717
94,386
18,577
27
For the Year ended 30 June 2020
External Revenues - Company and Subsidiaries
136,630
10,458
7,127
370
154,585
External Revenues - Equity Accounted Investees
4,171
-
16
-
4,187
External Revenues - Total
140,801
10,458
7,143
370
158,772
Profit or Loss
Total profit or loss for reportable segments
Finance income - Company and Subsidiaries
Finance costs - Company and Subsidiaries
Unallocated amounts:
Administrative expenses
Revaluation of investment property
Revaluation of property, plant and equipment
Gain on disposal of investment properties
Income tax applicable to share of profit of Equity Accounted Investees
Consolidated Profit before Income Tax
Reportable Segment Profit before Income Tax - Company and
Subsidiaries
Reportable Segment Profit before Income Tax - Equity
Accounted Investees
7,241
(3,811)
2,202
4,573
10,205
Assets
Total assets for reportable segments
(24)
4
10
(27)
(37)
Cash and cash equivalents
Reportable Segment Profit before Income Tax - Total
7,217
(3,807)
2,212
4,546
10,168
Reportable Segment Assets - Company and Subsidiaries
145,852
17,701
98,285
23,369
285,207
Reportable Segment Assets - Equity Accounted Investees
Reportable Segment Liabilities - Company and Subsidiaries
Reportable Segment Liabilities - Equity Accounted Investees*
Capital Expenditure
18,012
51,653
11,195
-
2,016
1,959
44
-
-
36,108
-
-
-
846
1
87
20,028
90,566
11,240
87
Investments in Equity Accounted Investees
Other assets**
Consolidated Total Assets
Liabilities
Total liabilities for reportable segments
Other liabilities
Consolidated Total Liabilities
2021
$’000
2020
$’000
93,289
147,089
7,871
2,234
7,127
369
103,394
154,585
17,618
4,171
-
16
121,012
158,772
17,575
10,168
858
(52)
970
(332)
(7,796)
(7,159)
1,534
196
129
(401)
6,203
627
-
11
12,043
10,488
273,171
285,207
52,599
30,591
2,374
2,113
15,294
19,890
343,438
337,801
94,386
90,566
6,411
5,295
100,797
95,861
* Excludes Liabilities payable to Finbar Group.
** Includes receivables due to Finbar Group Limited from Equity Accounted Investees.
The Group’s share of revenues from equity accounted investees are reported in this table as they are managed by Finbar and reported
to the CODM. Revenues from equity accounted investees are not reported in the statement of profit or loss and other comprehensive
income.
Geographical information
The Group operates predominantly in the one geographical segment of Western Australia.
71
7 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
2020
7. Revenue
Property development sales
Rental income
Supervision fees
Gain on transfer to investment property
Total Revenue
8. Other Income
Administration fees
Management fees
Other
Total Other Income
9. Personnel Expenses
Wages and salaries
Superannuation contributions
Increase in liability for annual leave
Increase/(decrease) in liability for long service leave
Directors and committee fees
Non Executive Directors - superannuation contributions
Total Personnel Expenses
Personnel expenses are included in administrative expenses on the Consolidated Statement of
Profit or Loss and Other Comprehensive Income for the year ended 30 June 2021.
10. Finance Income and Finance Costs
Recognised in Profit or Loss
Interest income on loans to Equity Accounted Investees
Interest income on loans
Interest income on bank deposits
Interest income on property settlements
Total Finance Income
Interest expense
Bank charges
Total Finance Costs
Net Finance Income
2021
$’000
2020
$’000
93,289
145,410
7,871
7,127
805
-
91
1,679
101,965
154,307
X
X
52
850
527
1,429
X
X
4,781
322
36
57
199
6
60
217
1
278
4,029
260
26
(10)
212
6
5,401
4,523
11. Income Tax Expense
Recognised in Income Statement
Current Tax Expense
Current year
Income tax recognised directly to equity
(Reversal)/write off of previously recognised tax assets
Non-recoverable amounts
Deferred Tax Expense Movement
Origination and reversal of temporary differences
Income Tax Expense excluding share of Income Tax on Equity Accounted Investees
Income tax relating to components of other comprehensive income
Total Income Tax Expense excluding share of Income Tax on Equity Accounted Investees
Numerical Reconciliation between Tax Expense and Pre-tax Net Profit
Profit for the year
Total income tax expense
Profit before Income Tax
Income tax using the domestic rate of 30% (2020: 30%)
Increase in income tax expense due to:
Non-deductible expenses
Non-recoverable amounts
(Reversal)/write off of previously recognised tax assets
(Decrease)/increase in income tax expense due to:
Tax effect of share of equity accounted investees (profit)/loss
X
X
Total Income Tax Expense
532
291
15
20
858
45
7
52
806
319
482
109
60
970
326
6
332
638
Made up of:
Income Tax Expense excluding share of Income Tax on Equity Accounted Investees
Income tax relating to components of other comprehensive income
Income Tax Recognised Directly in Equity
Decrease in income tax expense due to:
Tax incentives not recognised in income statement
Total Income Tax Recognised Directly in Equity
2021
$’000
2020
$’000
2,962
1,801
58
(140)
2
58
281
426
2,882
2,566
314
314
3,196
7
3,203
1,298
1,298
3,864
191
4,055
8,847
3,196
6,624
3,864
12,043
10,488
3,613
3,147
2
2
(140)
2
426
281
(281)
3,196
8
3,864
3,196
7
3,203
3,864
191
4,055
(58)
(58)
(58)
(58)
73
7 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report 12. Investment Property
12a Reconciliation of Carrying Amount
Balance at 1 July
Sale of Investment Property
Acquisition of Investment Property
Change in fair value
Balance at 30 June
2021
$’000
2020
$’000
12. Investment Property (continued)
12b Measurement of fair values (continued)
(iii) Valuation technique and significant unobservable inputs (continued)
97,331
85,307
(940)
-
1,534
-
5,821
6,203
97,925
97,331
Investment property comprises commercial properties at five developments and residential properties at two developments which are
leased to third parties (see Note 25).
The increase in the revaluation was as a result of an extension of the weighted average lease term from prior year, offset by COVID-19
impacts.
12b Measurement of fair values
(i) Fair Value Hierarchy
The fair value of investment property was determined by external, independent property valuers, having appropriate recognised
professional qualifications and recent experience in the location and category of the property being valued or by director’s valuation.
In accordance with the Company’s policy, independent valuations were undertaken in December 2020 on existing properties, Pelago in
Karratha and Fairlanes in East Perth and in June 2021 for Aurelia in South Perth. At June reporting period the Directors confirm that
there is no change to the valuations undertaken in December 2020.
The fair value assessment of the Company as at the reporting date includes the best estimate of the impacts of COVID-19 pandemic
using information available at the time of preparation of the financial statements and appropriate forward looking assumptions.
The fair value measurement for investment property of $97,925,000 has been categorised as a Level 3 fair value based on the inputs to
the valuation technique used (see Note 2(d)).
(ii) Level 3 Fair Value
Note 12a shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.
(iii) Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment property, as well as the significant
unobservable inputs used.
Valuation Technique
Significant unobservable inputs
Inter-relationship between key
unobservable inputs and fair value
measurement
Discounted cash flows: The valuation model
considers the present value of net cash
flows able to be generated from the property
taking into account expected rental growth
rate, void periods, occupancy rate, lease
incentive costs, such as rent-free periods
and other costs not paid by tenants. The
expected net cash flows are discounted
using risk-adjusted discount rates. Among
other factors, the discount rate estimation
considers the quality of a building and its
location (prime vs secondary), tenant credit
quality and lease terms.
Expected market rental growth
0.00% - 5.00%;
The estimated fair value would
increase (decrease) if:
Weighted average 2.86%;
Void periods (average 7.8 months
after the end of each lease);
Occupancy rate 84%;
Risk-adjusted discounted rates
(weighted average 7.75%).
Expected market rental growth were
higher (lower);
Void periods were shorter (longer);
Occupancy rate were higher (lower);
Rent-free periods were shorter
(longer); or
Risk-adjusted discount rate were
lower (higher).
75
Valuation Technique
Significant unobservable inputs
Capitalisation of income valuation: The
capitalisation of income valuation method
capitalises the current rent received, at
a rate analysed from the most recent
transactions of comparable property
investments. The capitalisation rate used
varies across properties. Valuations reflect,
where appropriate, lease term remaining,
the relationship of current rent to the market
rent, location and prevailing investment
market conditions.
Adopted capitalisation rate
7.25% - 10.00%;
Gross rent per annum
$450 - $650 per sqm;
Occupancy rate 61% - 99%; and
Rent free period 28.5 months
Inter-relationship between key
unobservable inputs and fair value
measurement
The estimated fair value would
increase (decrease) if:
Adopted capitalisation rate were
higher (lower);
Gross rent per annum were higher
(lower);
Occupancy rate were higher (lower);
or
Lease term remaining were longer
(shorter).
13. Property, Plant and Equipment
Cost or Valuation
Balance at 1 July 2019
Additions
Change in fair value
Disposals
Balance at 30 June 2020
Balance at 1 July 2020
Additions
Change in fair value
Disposals
Balance at 30 June 2021
Depreciation
Balance at 1 July 2019
Disposals
Revaluation
Depreciation and amortisation charge for the year
Balance at 30 June 2020
Balance at 1 July 2020
Disposals
Revaluation
Depreciation and amortisation charge for the year
Balance at 30 June 2021
Office
Furniture and
Equipment
$’000
Plant and
Equipment
$’000
Fixtures
and
Fittings
$’000
Property
$’000
Total
$’000
6,150
-
1,091
-
7,241
7,241
-
47
-
816
87
-
-
10,090
91
17,147
-
-
(2,407)
-
-
-
87
1,091
(2,407)
903
7,683
91
15,918
903
70
-
-
7,683
91
15,918
-
-
-
-
-
-
70
47
-
7,288
973
7,683
91
16,035
-
-
(171)
171
-
-
-
(172)
172
-
598
6,848
72
7,518
-
-
107
705
(1,762)
-
655
5,741
-
-
4
76
(1,762)
(171)
937
6,522
705
5,741
76
6,522
-
-
61
766
-
-
231
5,972
-
-
3
79
-
(172)
467
6,817
7 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
13. Property, Plant and Equipment (continued)
Carrying Amounts
At 1 July 2019
At 30 June 2020
At 1 July 2020
At 30 June 2021
Office
Furniture and
Equipment
$’000
Plant and
Equipment
$’000
Fixtures
and
Fittings
$’000
Property
$’000
Total
$’000
6,150
7,241
7,241
7,288
218
198
198
207
3,242
1,942
1,942
1,711
19
15
15
12
9,629
9,396
9,396
9,218
For each revalued class the carrying amount that would have been recognised had the assets been carried on historical cost basis are
as follows:
Revalued assets at deemed cost
Cost
Less accumulated depreciation
Net book value at 30 June 2021
Measurement of fair values
(i) Fair Value Hierarchy
Property
$’000
6,871
(1,575)
5,296
The fair value of property was determined by external, independent property valuers, having appropriate recognised professional
qualifications and recent experience in the location and category of the property being valued or by director’s valuation.
In accordance with the Company’s policy, independent valuations were undertaken in December 2020 on existing properties, Pelago
in Karratha and Fairlanes in East Perth. At June reporting period the Directors confirm that there is no change to the valuations
undertaken in December 2020.
The fair value assessment of the Company as at the reporting date includes the best estimate of the impacts of COVID-19 pandemic
using information available at the time of preparation of the financial statements and appropriate forward looking assumptions.
The fair value measurement for property of $7,288,000 has been categorised as a Level 3 fair value based on the inputs to the
valuation technique used (see Note 2(d)).
(ii) Level 3 Fair Value
The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.
13. Property, Plant and Equipment (continued)
Measurement of fair values (continued)
(iii) Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment property, as well as the significant
unobservable inputs used.
Valuation Technique
Significant unobservable inputs
Inter-relationship between key
unobservable inputs and fair value
measurement
Discounted cash flows: The valuation
model considers the present value of net
cash flows able to be generated from the
property taking into account expected rental
growth rate, void periods, occupancy rate,
lease incentive costs, such as rent-free
periods and other costs not paid by tenants.
The expected net cash flows are discounted
using risk-adjusted discount rates. Among
other factors, the discount rate estimation
considers the quality of a building and its
location (prime vs secondary), tenant credit
quality and lease terms.
Capitalisation of income valuation: The
capitalisation of income valuation method
capitalises the current rent received, at
a rate analysed from the most recent
transactions of comparable property
investments. The capitalisation rate used
varies across properties. Valuations
reflect, where appropriate, lease term
remaining, the relationship of current rent
to the market rent, location and prevailing
investment market conditions.
Expected market rental growth
0.00% - 5.00%;
The estimated fair value would
increase (decrease) if:
Weighted average 2.86%;
Void periods (average 7.8 months after
the end of each lease);
Expected market rental growth were
higher (lower);
Void periods were shorter (longer);
Occupancy rate 84%;
Occupancy rate were higher (lower);
Risk-adjusted discounted rates
(weighted average 7.75%).
Rent-free periods were shorter
(longer); or
Adopted capitalisation rate
7.25% - 10.00%;
Gross rent per annum
$450 - $650 per sqm;
Occupancy rate 61% - 99%; and
Rent free period 28.5 months
Risk-adjusted discount rate were
lower (higher).
The estimated fair value would
increase (decrease) if:
Adopted capitalisation rate were
higher (lower);
Gross rent per annum were higher
(lower);
Occupancy rate were higher (lower);
or
Lease term remaining were longer
(shorter).
14.Investments in Equity Accounted Investees
Equity Accounted Investees
The Group accounts for investments in Equity Accounted Investees using the equity method.
The Group has the following investments in Equity Accounted Investees (all stated at 100% of the values):
Balance at 1 July
Revaluation increase included in ‘profit or loss’
Revaluation increase included in ‘other comprehensive income’
Depreciation
Balance at 30 June
77
2021
$’000
2020
$’000
7,241
6,150
196
23
(172)
7,288
627
635
(171)
7,241
Equity Accounted Investees Assets
2020
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Roydhouse Street Subiaco Pty Ltd
Ownership
Current
Assets
$’000
Non-
current
Assets
$’000
Total
Assets
$’000
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
3
7,239
1,649
-
-
-
-
1
7,242
1,649
-
1
543
28,321
28,864
10
2
4,094
4,104
-
2
2,207
39,655
41,862
7 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
14.Investments in Equity Accounted Investees (continued)
14.Investments in Equity Accounted Investees (continued)
Equity Accounted Investees Liabilities
2020
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Roydhouse Street Subiaco Pty Ltd
Equity Accounted Investees Assets
2021
Finbar Sub 107 Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Roydhouse Street Subiaco Pty Ltd
Equity Accounted Investees Liabilities
2021
Finbar Sub 107 Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Roydhouse Street Subiaco Pty Ltd
79
Ownership
Current
Liabilities
$’000
Non-
current
Liabilities
$’000
Total
Liabilities
$’000
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
17
141
-
-
7,226
19
1
4
7,243
160
1
4
1,654
28,033
29,687
17
1
522
-
539
1
1,830
35,805
37,635
Ownership
Current
Assets
$’000
Non-
current
Assets
$’000
Total
Assets
$’000
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
350
563
155
-
-
5,515
1
-
17,495
17,099
-
-
1
6,426
4,169
-
17,845
17,662
155
-
1
11,941
4,170
-
6,584
45,190
51,774
Ownership
Current
Liabilities
$’000
Non-
current
Liabilities
$’000
Total
Liabilities
$’000
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
12
2,294
17,836
15,790
17,848
18,084
(5)
-
-
-
2
5
(5)
2
5
355
10,127
10,482
-
-
611
-
611
-
2,656
44,371
47,027
Profit/(Loss) Before Income Tax Recognised from Equity Accounted Investees
2020
Ownership
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001-1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Roydhouse Street Subiaco Pty Ltd
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Profit/(Loss) Before Income Tax Recognised from Equity Accounted Investees
2021
Ownership
Finbar Sub 107 Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
Roydhouse Street Subiaco Pty Ltd
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
Revenues
$’000
Expenses
$’000
-
1
8,342
7,809
-
-
-
8
1
369
(3)
3
Profit/
(Loss)
before
income tax
$’000
(1)
533
(1)
(369)
3
5
8,350
8,180
170
Revenues
$’000
Expenses
$’000
Profit/
(Loss)
before
income tax
$’000
-
-
681
-
3
602
652
1
(3)
(602)
29
(1)
34,568
31,307
3,261
-
-
7
-
(7)
-
35,249
32,572
2,677
* Finbar Sub 107 Pty Ltd was a fully owned subsidiary as at 30 June 2020. Refer to Note 29. In October 2020, the Group entered into a
joint venture with Ventrade Australia Pty Ltd to acquire Lot 101 Hay Street, East Perth.
15.Tax Assets and Liabilities
The current tax liability for the Group of $1,454,000 (2020: $1,116,000) represents the amount of income taxes payable in respect of
current and prior periods.
Recognised Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:
Inventories
Interest bearing loans and borrowings
Revaluation of investment property
Other items
Tax value of carry-forward losses recognised
Tax assets/(liabilities)
Set off of tax
Net Tax
Assets
Liabilities
2021
$’000
2020
$’000
2021
$’000
2020
$’000
(1,131)
(1,164)
(9,347)
(9,902)
31
1,654
2,008
6,217
8,779
30
2,065
859
7,248
9,038
(2,060)
(2,725)
-
(481)
2,811
-
(7,017)
2,060
6,719
6,313
(4,957)
-
(504)
3,502
-
(6,904)
2,725
(4,179)
8 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
16. Inventories
Current
Work in progress
Completed stock
Total Current Inventories
Non Current
Work in progress
Completed stock
Total Non Current Inventories
2021
$’000
2020
$’000
18 Cash and Cash Equivalents (continued)
18b Reconciliation of Cash Flows from Operating Activities
24,000
33,736
57,736
-
58,803
58,803
78,246
3,859
82,105
50,651
45,147
95,798
Cash Flows from Operating Activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Loss on Disposal of Assets
Revaluation of investment property
Revaluation of property, plant & equipment
Gain on transfer to investment property
Gain on sale of investment property
Net financing income
17.Trade and Other Receivables
x
x
Current
Trade receivables
Other receivables
Total Current Trade and Other Receivables
Non Current
Trade receivables
Other receivables
Amounts receivable from equity accounted investees
Total Non Current Trade and Other Receivables
Amounts receivable from equity accounted investees bear interest at BBSY plus agreed margin.
7,458
627
9,632
709
8,085
10,341
7,105
10,344
8,575
26,024
5,382
7,952
13,577
26,911
Share of net (loss)/profit of equity accounted investees
Income tax expense
Operating Profit before Changes in Working Capital and Provisions
Change in trade and other receivables
Change in inventories
Change in prepayments
Change in provision for employee benefits
Change in trade and other payables
Cash generated from Operating Activities
Interest paid
Income taxes paid
The Group’s exposure to credit risk and impairment losses to trade and other receivables are disclosed at Note 24.
Net Cash generated from Operating Activities
Note
2021
$’000
2020
$’000
13
11
16
22
8,847
6,624
467
3
937
320
(1,534)
(6,203)
(196)
(627)
-
(1,679)
(129)
(729)
(937)
3,196
8,988
(1,433)
-
(560)
26
3,864
2,702
6,945
14,760
38,132
(434)
93
55
17
(3,744)
(18,104)
18,230
29,747
(71)
(2,492)
(1,231)
(4,643)
15,667
23,873
18.Cash and Cash Equivalents
18a Cash and Cash Equivalents
Bank balances
Cash and Cash Equivalents in the Statement of Cash Flows
2021
$’000
2020
$’000
52,599
52,599
30,591
30,591
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed at Note 24.
The increases and decreases in trade and other receivables as well as trade and other payables reflect only those changes that relate
to operating activities. The remaining increases and decreases relate to investing activities.
19. Capital and Reserves
Share Capital
On issue at 1 July
On Issue at 30 June - Fully Paid
Company
Ordinary Shares
2021
2020
272,123,142
272,123,142
272,123,142
272,123,142
The Company does not have authorised capital or par value in respect of its issued shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
81
8 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report 19. Capital and Reserves (continued)
Dividends
Dividends recognised in the current year by the Group are:
Dividends Paid During the Year 2021
Final 2020 ordinary
Interim 2021 ordinary
Total Amount
Dividends Paid During the Year 2020
Final 2019 ordinary
Interim 2020 ordinary
Total Amount
Cents per
Share
Total Amount
$’000
Franked /
Unfranked
Date of Payment
1.00
2.00
3.00
2.00
2,721
5,442
8,163
8,164
5,442
13,606
Franked
21 September 2020
Franked
19 March 2021
Franked
12 September 2019
Franked
26 March 2020
19. Capital and Reserves (continued)
Dividend Franking Account
30% franking credits available to shareholders of Finbar Group Limited for
subsequent financial years
Company
2021
$’000
2020
$’000
10,481
8,311
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
(a) franking credits that will arise from the payment of current tax liabilities;
(b) franking debits that will arise from the payment of dividends recognised as a liability at the year-end;
(c) franking credits that will arise from the receipt of dividends recognised as receivables at the year-end; and
(d) franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The impact
on the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability is to reduce it by
$2,332,000 (2020: $1,166,000).
Nature and purpose of reserve
Asset revaluation reserve
Franked dividends declared or paid during the year were franked at the rate of 30%.
The revaluation reserve relates to the revaluation of non investment property carried at fair value.
After 30 June 2021 the following dividend has been proposed by the Directors. The dividend has not been provided. The declaration
and subsequent payment of dividends has no income tax consequences.
Proposed Dividend
Dividend proposed by the Group are:
Final 2021 ordinary
Total Amount
Cents per
Share
Total Amount
$’000
Franked /
Unfranked
Date of Payment
2.00
5,442
5,442
Franked
10 September 2021
The financial effect of this dividend has not been brought to account in the financial statements for the financial year ended 30 June
2021 and will be recognised in subsequent financial reports.
Dividend Reinvestment Plan
The Company has a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of their dividend
entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash.
In accordance with Rule 13 of the Company’s Dividend Reinvestment Plan (DRP), the Directors have elected to suspend the DRP in the
2020 financial year until further notice. As such the DRP will not be active for the above mentioned dividend.
20. Earnings per Share
Basic Earnings per Share
The calculation of basic earnings per share at 30 June 2021 was based on the profit attributable to ordinary shareholders of
$8,847,000 (2020: $6,624,000) and a weighted average number of ordinary shares on issue during the year ended 30 June 2021 of
272,123,142 (2020: 272,123,142), calculated as follows:
Profit Attributable to Ordinary Shareholders
Weighted Average Number of Ordinary Shares
Issued ordinary shares at 1 July
Weighted Average Number of Ordinary Shares at 30 June
2021
$’000
2020
$’000
8,847
6,624
Ordinary Shares
2021
2020
272,123,142
272,123,142
272,123,142
272,123,142
Basic Earnings per Share (cents per share)
3.25
2.43
Diluted Earnings per Share
The calculation of diluted earnings per share at 30 June 2021 was based on the profit attributable to ordinary shareholders of
$8,847,000 (2020: $6,624,000) and a weighted average number of ordinary shares on issue during the year ended 30 June 2021 of
272,123,142 (2020: 272,123,142), calculated as follows:
Profit Attributable to Ordinary Shareholders (Diluted)
Weighted Average Number of Ordinary Shares (Diluted)
Weighted average number of ordinary shares at 30 June
2021
$’000
2020
$’000
8,847
6,624
Ordinary Shares
2021
2020
272,123,142
272,123,142
Diluted Earnings per Share (cents per share)
3.25
2.43
83
8 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
22. Employee Benefits
Current
Liability for annual leave
Liability for long-service leave
Total Current Employee Benefits
Non Current
Liability for long-service leave
Total Non Current Employee Benefits
23. Trade and Other Payables
Current
Trade and other payables
Other payables and accrued expenses
Total Current Trade and Other Payables
Non Current
Trade and other payables
Other payables and accrued expenses
Total Non Current Trade and Other Payables
2021
$’000
2020
$’000
87
480
567
60
60
51
439
490
44
44
X
X
21,262
23,581
978
703
22,240
24,284
-
37
37
1,765
1
1,766
At 30 June 2021, consolidated trade and other payables include retentions of $217,000 (2020: $264,000) relating to construction
contracts in progress.
The Group’s exposure to liquidity risk related to trade and other payables is disclosed at Note 24.
21. Loans and Borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more
information about the Group’s exposure to interest rate risk see Note 24.
Current
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)
Total Current Loans and Borrowings
Non Current
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)
Total Non Current Loans and Borrowings
Terms and debt repayment schedule
Terms and conditions of outstanding loans are as follows:
Current
Commercial bills (Secured)
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)
Investor loans to subsidiaries (Unsecured)*
Total Current Loans and Borrowings
Non Current
Commercial bills (Secured)
Commercial bills (Secured)
Investor loans to subsidiaries (Unsecured)*
Investor loans to subsidiaries (Unsecured)
Total Non Current Loans and Borrowings
2021
$’000
2020
$’000
1,500
728
2,228
35,858
19,646
55,504
41,340
27,914
69,254
-
8,478
8,478
Nominal
Interest Rate
BBSY+2.00%
BBSY+2.00%
BBSY+1.50%
BBSY+2.00%
BBSY+2.00%
3.00%
2021
2020
Financial
Year of
Maturity
Carrying
Amount
$’000
Carrying
Amount
$’000
2022
2021
2022
2021
2024
2023
2024
2023
1,500
-
728
-
2,228
19,500
21,840
9,347
18,567
69,254
14,393
21,465
6,996
12,650
55,504
-
-
8,478
-
8,478
* These are loans from land owners which are non interest bearing.
Financing Arrangements
Commercial bills
Commercial bills (refer Note 24) are denominated in Australian dollars.
The commercial bill loans of the Subsidiaries are secured by registered first mortgages over the investment property land and
buildings of the Controlled entity as well as a registered mortgage debenture over the Controlled entity’s assets and undertakings.
The Group has successfully refinanced both commercial bills during the year ended 30 June 2021 with an increase in facility limit of
$6,607,000.
Investor Loans
Investor Loans are repayable upon the completion of the project.
85
8 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
24. Financial Instruments
Credit Risk
Exposure to Credit Risk
The carrying amount of the Group’s financial assets represent the maximum credit
exposure. The Group’s maximum exposure to credit risk at the reporting date was:
Trade and other receivables - current
Trade and other receivables - non-current
Cash and cash equivalents
The Group’s maximum exposure to credit risk for trade and other receivables at the
reporting date by receivable category was:
Equity Accounted Investees
GST refunds due and other trade debtors
Other receivables
Working capital advances and bonds
Impairment Losses
Note
17
17
18a
Carrying Amount
2021
$’000
2020
$’000
8,085
26,024
52,599
86,708
10,341
26,911
30,591
67,843
8,575
9,922
10,971
4,641
13,577
10,229
8,661
4,785
34,109
37,252
None of the Group’s trade or other receivables are past due and based on historic default rates and security held the Group believes
that no impairment allowance is necessary in respect of trade or other receivables.
Liquidity Risk
The following are the contractual maturities of non-derivative financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
Non-derivative Financial Liabilities
Commercial bills*
Investor Loans*
Trade and other payables
Non-derivative Financial Liabilities
Commercial bills*
Investor Loans*
Trade and other payables
Note
21
21
23
Note
21
21
23
30 June 2021
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
1 Year or
Less
$’000
1-3 Years
$’000
42,840
28,642
22,277
93,759
44,037
28,813
22,277
95,127
2,081
899
22,240
25,220
41,956
27,914
37
69,907
30 June 2020
Carrying
Amount
$’000
Contractual
Cash Flows
$’000
1 Year or
Less
$’000
1-3 Years
$’000
35,858
28,124
26,050
90,032
36,978
28,306
26,050
91,334
36,978
19,828
24,284
81,090
-
8,478
1,766
10,244
* Refer to Note 21 Loans and Borrowings for details on loan maturity.
24. Financial Instruments (continued)
Interest Rate Risk
Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial assets and liabilities was:
Variable Rate Instruments
Financial Assets
Financial Liabilities
Carrying Amount
2021
$’000
2020
$’000
61,175
44,168
(43,568)
(42,854)
17,607
1,314
Cash Flow Sensitivity Analysis for Variable Rate Instruments
A change of 100 basis points in interest rates would have (decreased)/increased the Group’s equity and profit or loss by the amounts
shown below. This analysis assumes that all variables remain constant. The analysis is on the same basis for 2020.
30 June 2021
Variable rate instruments
30 June 2020
Variable rate instruments
Fair Values
Fair Values Versus Carrying Amounts
Profit or Loss
Equity
100bp
Increase
$’000
100bp
Decrease
$’000
100bp
Increase
$’000
100bp
Decrease
$’000
(914)
-
(914)
-
100bp
Increase
$’000
100bp
Decrease
$’000
100bp
Increase
$’000
100bp
Decrease
$’000
(867)
867
(867)
867
The fair values of financial assets and liabilities, as detailed below, are equal to the carrying amounts shown on the balance sheet:
Trade and other receivables
Cash and cash equivalents
Secured bank loans
Investor loans
Trade and other payables
Fair Values
2021
$’000
2020
$’000
34,109
52,599
37,252
30,591
(42,840)
(35,858)
(28,642)
(28,124)
(22,277)
(26,050)
Note
17
18a
21
21
23
87
8 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
24. Financial Instruments (continued)
Fair Values Versus Carrying Amounts (continued)
The methods and assumptions used to estimate the fair value of financial instruments are as follows:
Unsecured shareholder loans
Due to the short term nature of these financial rights and obligations, their carrying values approximate to their fair values.
26. Capital and Other Commitments (continued)
Property Development - Equity Accounted Investees
Contracted but not provided for and payable:
Within one year
Later than one year
Long term loans are secured and interest bearing at bank business interest rates.
Total Property Development Commitments - Equity Accounted Investees
Cash and short term deposits
The carrying amount is fair value due to the liquid nature of these assets.
Bank loans
The carrying amount is a reasonable approximation of fair value.
25. Operating Leases
Leases as Lessor
The Group leases out its investment properties held under operating leases.
Rental income received from investment property
Other rental property income received
Note
2021
$’000
2020
$’000
7,724
147
7,871
7,123
4
7,127
7
Future minimum lease receipts
At 30 June, the future minimum lease receipts under non-cancellable leases are receivable as follows:
Less than one year
Between one and five years
More than 5 years
26. Capital and Other Commitments
Commitments and Contingent Liabilities
Property Development
Contracted but not provided for and payable:
Within one year
Later than one year
Total Property Development Commitments
4,349
3,622
188
8,159
4,059
5,029
308
9,396
97,610
66,264
163,874
-
-
-
2021
$’000
2020
$’000
33,772
9,343
57
-
33,829
9,343
16,886
4,672
29
-
16,915
4,672
114,496
4,672
66,293
-
180,789
4,672
Group’s Share of Property Development - Equity Accounted Investees
Contracted but not provided for and payable:
Within one year
Later than one year
Total Share of Property Development Commitments - Equity Accounted Investees
Group’s Property Development Commitments including Equity Accounted Investees
Contracted but not provided for and payable:
Within one year
Later than one year
Total Property Development Commitments including Equity Accounted Investees
27. Contingencies
x
x
The Directors are of the opinion that provisions are not required in respect of these matters,
as it is not probable that a future sacrifice of economic benefits will be required or the
amount is not capable of reliable measurement.
Guarantees
The Company has guaranteed the bank facilities of certain controlled entities
23,184
16,577
28. Related Parties
x
x
The key management personnel compensation included in ‘personnel expenses’ is as follows:
Short term employee benefits
Other long term benefits
Post employment benefits
Employee benefits
2,493
2,572
31
96
(34)
97
2,620
2,634
89
9 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
28. Related Parties (continued)
Individual Directors and Executives Compensation Disclosures
Information regarding individual directors and executives compensation are provided in the Remuneration Report section of the
Directors’ report on pages 40 to 45.
On 31st August 2015, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive Shares
under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $290,000 which was repaid in August
2020. The related benefit is disclosed in table 4.3.2 on page 42.
On 25th August 2016, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive Shares
under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $207,500 which was repaid in August
2021. The related benefit is disclosed in table 4.3.2 on page 42.
On 13th September 2017, Finbar Group Limited issued 250,000 fully paid ordinary shares to Darren Pateman as Director Incentive
Shares under the rules of the Director Share Plan 2014. Payment was by way of an interest free loan of $202,500 which is repayable
by 13th September 2022. The related benefit is disclosed in table 4.3.2 on page 42.
Other Related Party Transactions
Equity Accounted Investees
Loans are made by the Group to equity accounted investees for property development undertakings. Loans outstanding between
the Group and joint ventures are interest bearing and are repayable at the completion of the equity accounted investees
development project.
As at 30 June the balance of these loans were as follows:
Finbar Sub 107 Pty Ltd*
240 Adelaide Terrace Pty Ltd
647 Murray Street Pty Ltd
Axis Linkit Pty Ltd
Finbar Sub 5050 Pty Ltd
Lot 1001 - 1003 Rowe Avenue Pty Ltd
Rowe Avenue Pty Ltd
2021
$’000
2020
$’000
334
3,360
-
1
2
-
274
(20)
1
2
4,775
13,252
103
68
8,575
13,577
* Refer to Note 14 Investments in Equity Accounted Investees.
In the financial statements of the Group, investments in equity accounted investees are carried at the lower of the equity accounted
amount and the recoverable amount.
Ventrade Australia Pty Ltd and Ventrade Maylands Pty Ltd are related parties of Chuan Hup Holdings Limited who owns 20.53% of
Finbar Group. The Company entered into a joint venture arrangement with Ventrade Australia Pty Ltd, under Finbar Sub 107 Pty Ltd,
during the financial year ended 30 June 2021. The project end value is estimated at $200 million.
Included within the trade and other payables balance is $3,793,000 (2020: 2,802,000) owing to Ventrade Maylands Pty Ltd. Included
within the trade and other receivables balance is $207,000 (2020: $520,000 payable) receivable from Ventrade Australia Pty Ltd. The
payables and receivables are in relation to development projects, are at arms length, non-interest bearing and at call.
29. Group Entities
Parent Company
Finbar Group Limited
Subsidiaries
1 Mends Street Pty Ltd
2 Homelea Court Springs Pty Ltd
31 Rowe Avenue Pty Ltd
32 Riversdale Road Pty Ltd
36 Chester Avenue Pty Ltd
43 McGregor Road Pty Ltd
5-7 Harper Terrace Pty Ltd
63 Adelaide Terrace Pty Ltd
88 Terrace Road Pty Ltd
96 Mill Point Road Pty Ltd
172 Railway Parade West Leederville Pty Ltd
175 Adelaide Terrace Pty Ltd
239 Great Eastern Highway Pty Ltd
241 Railway Parade Pty Ltd
262 Lord Street Perth Pty Ltd (Deregistered)
269 James Street Pty Ltd
280 Lord Street Perth Pty Ltd (Deregistered)
Finbar Applecross Pty Ltd
Finbar Commercial Pty Ltd
Finbar Finance Pty Ltd
Finbar Fund Pty Ltd
Finbar Karratha Pty Ltd
Finbar Port Hedland Pty Ltd
Finbar Project Management Pty Ltd
Finbar To Rent Pty Ltd
Finbar Sales Pty Ltd
Finbar Sub 104 Pty Ltd
Finbar Sub 107 Pty Ltd*
Finbar Executive Rentals Pty Ltd
Lot 1 to 10 Whatley Crescent Pty Ltd
* Refer to Note 14 Investments in Equity Accounted Investees.
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Shareholding/Unit Holding
Ownership Interest
$
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
1
32
2021
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
91
9 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 2021NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
DIRECTORS’ DECLARATION
1. In the opinion of the Directors of Finbar Group Limited (‘the Company’):
a) The Consolidated Financial Statements and notes that are contained in Pages 54 to 93 and the Remuneration report in the
Directors’ report, set out on Pages 40 to 45, are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year ended on
that date; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001; and
b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing Director
and the Chief Financial Officer for the financial year ended
30 June 2021.
3. The Directors draw attention to Note 2(a) to the consolidated financial statements, which contains a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the Board of Directors:
Darren Pateman
Managing Director
Dated at Perth this Twenty-fourth day of August 2021.
30. Subsequent Events
With continuing economic uncertainty from the COVID-19 pandemic, the Company may require to grant further rent abatements and/
or rent deferrals in accordance to the relevant Code of Conduct legislation. Further mandatory closures and government mandated
restrictions will influence the Australian economy and property market which may have a future impact on property valuations.
Other than mentioned, there has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
31. Auditors’ Remuneration
Audit Services:
Auditors of the Group
Audit and review of the financial reports
Services other than Statutory Audit:
Taxation compliance services
32. Parent Entity Disclosures
As at, and throughout the financial year ending 30 June 2021 the parent company of the Group was
Finbar Group Limited.
Result of the Parent Entity
Profit for the year
Total Comprehensive Income for the year
Financial Position of the Parent Entity
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Total Equity of the Parent Entity comprising of:
Share capital
Retained earnings
Total Equity
Parent Entity Contingencies
2021
2020
129,115
126,697
129,115
126,697
16,560
16,560
20,286
20,286
2021
$’000
2020
$’000
11,285
11,285
7,846
7,846
43,094
29,391
215,701
212,270
1,107
1,168
815
859
194,483
194,483
20,050
16,928
214,533
211,411
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future
sacrifice of economic benefits will be required or the amount is capable of reliable measurement.
93
9 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)For the Year Ended 30 June 20212021 Finbar Group Annual Report2021 Finbar Group Annual Report
Independent Auditor’s Report
To the shareholders of Finbar Group Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Finbar
Group Limited (the Company).
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2021and of its
financial performance for the year ended on
that date; and
The Financial Report comprises:
• Consolidated statement of financial position as
at 30 June 2021
• Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for the
year then ended
• Notes including a summary of significant
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with
the Code.
Key Audit Matters
The Key Audit Matters we identified are:
• Valuation of Investment Properties; and
• Carrying Value of Inventory.
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.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under
license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards
Legislation.
Valuation of Investment Properties ($97.9million)
Refer to Note 12 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Valuation of investment properties is a key
audit matter due to the:
• Significance of the balance to the financial
statements
•
•
Judgement required in assessing the
capitalisation rates applied to the projected
income of individual properties in the
income valuation model. A small
percentage movement in the capitalisation
rate would result in a significant financial
impact to the investment property balance
and the income statement.
Timing of the valuations performed by the
Group’s external valuer. It is the Group’s
policy when the valuation was not
performed at year end for the directors to
assess and confirm the valuation to be
adopted in the financial report. We involved
KPMG Real Estate Specialists to inform our
evaluation of the external and internal
valuations for specific properties.
• Consideration of the economic impacts of
COVID-19 on valuations including leasing
and rental relief assumptions.
Our procedures included:
• Understanding the Group’s process regarding the
valuation of investment property, including
specific considerations of the impact of
COVID-19.
• We assessed the scope, objectivity, competence
and capabilities of the Group’s external valuer.
• Working with our KPMG Real Estate specialists,
we assessed the appropriateness of the property
valuation methodology adopted, key assumptions
and supporting market commentary in the
valuations for specific properties.
• We compared the valuations prepared using the
income valuation model to the alternate
discounted cashflow method valuation where
prepared, as a comparator, by the external
valuers.
• We informed our evaluation of the external
valuations and the director’s internal valuations,
by comparing values to recent sales evidence and
other published reports of industry
commentators.
• We challenged the capitalisation rates applied,
based on our knowledge of the property portfolio
and other published reports of industry
commentators.
• We also tested, on a sample basis, the following
key inputs to the valuations to existing lease
contracts and published CPI statistics by the
Australian Bureau of Statistics:
− Gross rent;
− Occupancy rate;
− Lease term remaining; and
− CPI.
• We assessed the appropriateness of the Group’s
leasing and rental relief assumptions with
consideration of the industry sector of the
Group’s tenants.
• We assessed the disclosures in the financial
report, using our understanding obtained from our
testing, against accounting standards
requirements.
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2021 Finbar Group Annual Report2021 Finbar Group Annual Report
Carrying value of Inventory ($139.8million)
Refer to Note 16 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Valuation of inventory, being both completed
units and work in progress, is a key audit matter
due to the:
• Significance of the balance to the financial
statements
• Significant judgement and our effort applied
to assessing forecast selling prices and costs
to complete for work in progress. These
factors impact the assessment of net
realisable value, as in accordance with
accounting standards, inventory must be
carried at the lower of cost and net realisable
value.
Work in progress comprises developments
currently under construction and future projects,
which are long term in nature where forecast
costs could be negatively impacted by issues
encountered during planning or construction. In
addition, forecast selling prices can fluctuate
significantly based on property market
conditions. This includes consideration of
economic impacts of COVID-19 on forecast
selling prices.
These factors increase the level of forecasting
judgement and audit complexity when assessing
forecast selling prices and costs to complete for
inventory.
Our procedures included:
• We selected a sample of significant
developments under construction and future
projects to understand project design
complexity, sub-contractor reliance, other
project risks and project funding which could
negatively impact costs to complete. This was
done through enquiry of senior management,
and inspection of documentation such as
budgets, funding agreements, supplier
contracts and internal reports.
• We compared a sample of actual to forecast
selling prices and actual to forecast construction
costs to inform our evaluation of forecast selling
prices and costs to complete respectively. We
have considered the impact of COVID-19 on the
forecast selling prices.
• We undertook sample testing of sales made
during the year and subsequent to year end to
sales contracts to assess sales margins
achieved during the year and post year end.
This informs our evaluation of the carrying value
of inventory at balance date against the Group’s
policy for recording inventory at the lower of
cost and net realisable value.
• We compared forecast selling prices to forecast
total costs for significant projects. We did this
to assess the carrying value of inventory against
the Group’s policy for recording at the lower of
cost and forecast net realisable value.
Other Information
Other Information is financial and non-financial information in Finbar Group Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report.
The remaining Other Information consisting of Key Financial Metrics, Chairman’s Report, Managing
Directors’ Report, Finbar Overview, Key Achievements, Development Overview and Finbar’s Investment
Properties are expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error
• assessing the Group and Company’s ability to continue as a going concern and whether the use of
the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend
to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do
so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
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 Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They 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 the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
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2021 Finbar Group Annual Report2021 Finbar Group Annual Report
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of Finbar
Group Limited for the year ended 30 June 2021,
complies with Section 300A of the Corporations
Act 2001.
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 responsibilities
We have audited the Remuneration Report
included in paragraph 4.3 of the Directors’ report
for the year ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Derek Meates
Partner
Perth
24 August 2021
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Finbar Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Finbar Group Limited
for the financial year ended 30 June 2021 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Derek Meates
Partner
Perth
24 August 2021
99
1 00
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
2021 Finbar Group Annual Report2021 Finbar Group Annual Report
ASX ADDITIONAL INFORMATION
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.
Twenty largest shareholders of ordinary shares as disclosed in the share register :
Shareholdings (as at 30 June 2021)
Substantial Shareholders
The number of shares held by substantial shareholders and their associates are set out below:
Shareholder Name
Chuan Hup Holdings Limited
Thorney Holdings Proprietary Limited
John Chan
Westoz Funds Management Pty Ltd
Voting rights
Ordinary shares
Refer to Note 19 in the Notes to the Financial Statements.
Distribution of Equity Security Holders
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-over
Number
55,871,363
28,362,797
27,318,265
23,615,000
%
20.53
10.42
10.04
8.68
Number of
Holders
Ordinary
Shares
390
500
334
804
154
2,182
105,770
1,472,980
2,572,666
25,527,382
242,444,344
272,123,142
The number of shareholders holding less than a marketable parcel of ordinary shares is 300.
Stock Exchange
The Company is listed on the Australian Securities Exchange. The Home exchange is Perth.
ASX Code: FRI
Other Information
Finbar Group Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
Chuan Hup Holdings Limited
UBS Nominees Pty Ltd
Zero Nominees Pty Ltd
Citicorp Nominees Pty Limited
Blair Park Pty Ltd
Rubi Holdings Pty Ltd (John Rubino S/F A/C)
3RD Wave Investors Pty Ltd
Forward International Pty Ltd
Mr James Chan
J P Morgan Nominees Australia Pty Limited
Hanssen Pty Ltd
Mrs Siew Eng Mah
BNP Paribas Nominees Pty Ltd (DRP)
Apex Investments Pty Ltd
Chan Family Super (WA) Pty Ltd (Chan Family S/F A/C)
Milton Corporation Limited
Mr Ah-Hwa Lim
Ms Yi Xian Chan
Denshir Pty Ltd
Mr Wan Soon Chan
Top 20
Number of
Ordinary
Shares Held
%
53,837,175
19.78
28,362,797
10.42
23,781,255
9,079,790
8,497,045
7,912,358
6,500,000
6,472,922
6,141,290
5,960,860
5,000,000
4,820,000
4,570,596
4,298,481
4,177,072
3,642,464
3,155,770
2,892,126
2,739,322
2,435,137
8.74
3.34
3.12
2.91
2.39
2.38
2.26
2.19
1.84
1.77
1.68
1.58
1.53
1.34
1.16
1.06
1.01
0.89
194,276,460
71.39
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ASX ADDITIONAL INFORMATION (Continued) 2021 Finbar Group Annual Report2021 Finbar Group Annual Report
Offices and Officers
Directors
Mr John Chan (Executive Chairman)
Mr Darren John Pateman (Managing Director)
Mr Ronald Chan (Chief Operations Officer)
Mr Kee Kong Loh
Mr Lee Verios
Mr Terence Siong Woon Peh
Company Secretary
Mr Edward Guy Bank (Chief Financial Officer)
Principal Registered Office
Finbar Group Limited
Level 6
181 Adelaide Terrace
EAST PERTH WA 6004
PO Box 3380
EAST PERTH WA 6892
Telephone: +61 8 6211 3300
Email: info@finbar.com.au
Website: www.finbar.com.au
ABN 97 009 113 473
ACN 009 113 473
Share Registry
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9323 2000
Auditors
KPMG
235 St Georges Terrace
PERTH WA 6000
103
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finbar.com.au